Exhibit 10.31

 

OGE ENERGY CORP. EMPLOYEES’ STOCK OWNERSHIP

AND RETIREMENT SAVINGS PLAN

 

(As Amended and Restated Effective as of January 1, 2006)

 

 

 

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Table of Contents

 

Page

 

ARTICLE 1

ESTABLISHMENT, TITLE, PURPOSE, INTENT AND EFFECTIVE DATE OF

 

PLAN

1

 

Section 1.1

Establishment, Effective Date and Title of Plan

1

 

Section 1.2

Purpose of Plan

1

 

Section 1.3

Intent of Plan

1

ARTICLE 2

DEFINITIONS

2

 

Section 2.1

Accounts

2

 

Section 2.2

Actual Contribution Percentage

2

 

Section 2.3

Actual Deferral Percentage

2

 

Section 2.4

After-Tax Contributions

2

 

Section 2.5

Authorized Leave of Absence

2

 

Section 2.6

Beneficiary

2

 

Section 2.7

Benefits Committee

2

 

Section 2.8

Benefits Oversight Committee

2

 

Section 2.9

Board of Directors

2

 

Section 2.10

Catch-Up Contributions

3

 

Section 2.11

Code

3

 

Section 2.12

Company

3

 

Section 2.13

Company Matching Contribution Account

3

 

Section 2.14

Company Matching Contributions

3

 

Section 2.15

Company Stock

3

 

Section 2.16

Compensation

3

 

Section 2.17

Eligible Employee

4

 

Section 2.18

Employee

4

 

Section 2.19

Employee Contributions

4

 

Section 2.20

Employment Commencement Date and Reemployment Commencement

 

Date

4

 

Section 2.21

ERISA

4

 

Section 2.22

Fiduciaries

5

 

Section 2.23

Forfeiture

5

 

Section 2.24

Highly Compensated Employee

5

 

Section 2.25

Hour of Service

5

 

Section 2.26

Investment Fund or Funds

6

 

Section 2.27

OGE DB Rollover Account

6

 

Section 2.28

Participant

6

 

Section 2.29

Participating Employer

6

 

Section 2.30

Payroll Period

6

 

Section 2.31

Period of Severance

6

 

Section 2.32

Permanent Disability

6

 

Section 2.33

Plan

6

 

Section 2.34

Plan Administrator

6

 

Section 2.35

Plan Year

6

 

Section 2.36

Regular Contributions

7

 

Section 2.37

Severance Date

7

 

Section 2.38

Subsidiary

7

 

Section 2.39

Supplemental Contributions

7

 

Section 2.40

Tax-Deferred Contribution Account

7

 

Section 2.41

Tax-Deferred Contributions

7

 

Section 2.42

Tejas Gas After-Tax Transfer Account

7

 

Section 2.43

Transfer Account

7

 

 

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Table of Contents

 

(continued)

Page

 

 

Section 2.44

TRASOP Account

7

 

Section 2.45

Trust

7

 

Section 2.46

Trustee

8

 

Section 2.47

USERRA

8

 

Section 2.48

Valuation Date

8

 

Section 2.49

Year of Eligibility Service

8

 

Section 2.50

Year of Service

8

ARTICLE 3

ELIGIBILITY AND PARTICIPATION

8

 

Section 3.1

Eligibility to Participate

8

 

Section 3.2

Election to Participate

9

 

Section 3.3

Participation Fees

9

 

Section 3.4

Becoming a Noncontributing Participant

9

 

Section 3.5

Status of Noncontributing Participant

9

 

Section 3.6

Status of Terminated Participant

9

 

Section 3.7

Participation and Reemployment

9

 

Section 3.8

Beneficiary Designation

11

ARTICLE 4

COMPANY MATCHING CONTRIBUTIONS

11

 

Section 4.1

Amount of Company Matching Contributions

11

 

Section 4.2

Time and Form of Company Matching Contributions

12

ARTICLE 5

EMPLOYEE CONTRIBUTIONS

12

 

Section 5.1

Employee Regular and Supplemental Contributions

12

 

Section 5.2

Change in Employee Contribution Percentages

12

 

Section 5.3

Suspension of Employee Contributions

13

 

Section 5.4

Deduction of Employee Contributions

13

 

Section 5.5

Yearly Limitation on Tax-Deferred Contributions

13

 

Section 5.6

Reduction of Tax-Deferred Contributions by the Benefits Committee

13

 

Section 5.7

Rollover Contributions

15

 

Section 5.8

Catch-Up Contributions

15

ARTICLE 6

LIMITATIONS ON CONTRIBUTIONS TO THE PLAN

16

 

Section 6.1

Company Matching Contribution and Tax-Deferred Contribution

 

Limitations

16

 

Section 6.2

Maximum Annual Additions to Participant Accounts

16

 

Section 6.3

Participation in More than One Plan of Company

17

 

Section 6.4

Limitation on Amount of Company Matching Contributions and After-Tax

 

Contributions

17

 

Section 6.5

Multiple Use of Alternative Limitation

19

ARTICLE 7

PARTICIPANT ACCOUNTS

19

 

Section 7.1

Establishment of Participant Accounts

19

 

Section 7.2

Quarterly Statement of Account Balances

19

 

Section 7.3

Nonforfeitability of Employee Contribution Accounts

19

 

Section 7.4

Compliance with USERRA

19

ARTICLE 8

INVESTMENT FUNDS

20

 

Section 8.1

Establishment of Funds

19

 

Section 8.2

Investment in Funds

22

 

Section 8.3

Investment of Company Matching Contributions

22

 

 

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Table of Contents

 

(continued)

Page

 

 

Section 8.4

Investment of Employee Contributions and Transfer Accounts

23

 

Section 8.5

Change in Participant’s Investment Election

23

 

Section 8.6

Managed Account Option Election

23

 

Section 8.7

Participant Voting Rights

24

 

Section 8.8

Limitations On Investments And Transactions/Conversions

24

ARTICLE 9

VALUATIONS AND ADJUSTMENTS

24

 

Section 9.1

Computation of Fair Market Value of Funds

24

 

Section 9.2

Method of Adjustment

24

 

Section 9.3

Allocation of Dividends in the OGE Energy Corp. Common Stock Fund

25

 

Section 9.4

Allocation of Company Matching Contributions

25

 

Section 9.5

Payment Of Expenses By Participants

25

ARTICLE 10

DISTRIBUTIONS AND WITHDRAWALS

25

 

Section 10.1

Distributions after a Severance Date

25

 

Section 10.2

Termination by Reason of Death, Permanent Disability or Retirement

25

 

Section 10.3

Termination by Resignation, Release or Discharge

25

 

Section 10.4

In-Service Withdrawals

28

 

Section 10.5

Indebtedness to Trust

31

 

Section 10.6

Loans to Participants

31

ARTICLE 11

DISTRIBUTION OF BENEFITS

32

 

Section 11.1

Distribution of Benefits Upon Termination of Employment

32

 

Section 11.2

Manner of Distribution

33

 

Section 11.3

Required Beginning Date

33

 

Section 11.4

Form of Distribution

34

 

Section 11.5

Dividend Distributions

34

 

Section 11.6

Distribution of Benefits upon Death of Participant

34

 

Section 11.7

Distribution to Alternate Payees

35

 

Section 11.8

Distributions from TRASOP Account

35

 

Section 11.9

Eligible Rollover Distributions

35

ARTICLE 12

THE RETIREMENT SAVINGS TRUST

36

 

Section 12.1

Establishment of Trust

36

 

Section 12.2

Appointment of Trustee

36

ARTICLE 13

ADMINISTRATION

36

 

Section 13.1

Allocation of Responsibilities Among Fiduciaries

36

 

Section 13.2

Plan Administrator

37

 

Section 13.3

Committees

37

 

Section 13.4

Information from Participant

40

 

Section 13.5

Notification of Participant’s Address

40

 

Section 13.6

Claims and Appeal Procedure

40

ARTICLE 14

NATURE AND CONSTRUCTION OF RIGHTS AND DUTIES

43

 

Section 14.1

Participant Elections

43

 

Section 14.2

Nonalienation of Benefits

43

 

Section 14.3

Payments to Incapacitated Participant or Beneficiary

43

 

Section 14.4

Payment on Inability to Locate Participant or Beneficiary

43

 

Section 14.5

Interest in Trust Governed by Terms of Plan

44

 

Section 14.6

Trust as Sole Source of Benefits

44

 

 

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Table of Contents

 

(continued)

Page

 

 

Section 14.7

Uniformity of Treatment

44

 

Section 14.8

Exclusive Benefit of Participants and Beneficiaries

44

 

Section 14.9

No Contract of Employment

44

 

Section 14.10

Form of Actions and Notices

44

 

Section 14.11

Partial Invalidity Not To Affect Remaining Provisions

44

 

Section 14.12

Recovery of Overpayments

44

ARTICLE 15

AMENDMENT AND TERMINATION

45

 

Section 15.1

Plan and Trust Amendment

45

 

Section 15.2

Permanency of Plan

45

 

Section 15.3

Termination of Plan

45

 

Section 15.4

Distribution Upon Termination

45

ARTICLE 16

SUCCESSOR COMPANY; PLAN MERGER, CONSOLIDATION OR TRANSFER

 

OF ASSETS

46

 

Section 16.1

Continuation by Successor

46

 

Section 16.2

Merger or Consolidation of Plan

46

 

Section 16.3

Transfer of Assets From Other Qualified Plans

46

ARTICLE 17

JOINT AND SURVIVOR ANNUITY REQUIREMENTS

46

 

Section 17.1

Applicability

46

 

Section 17.2

General Rules

47

 

Section 17.3

Definitions

47

ARTICLE 18

CONSTRUCTION

48

 

Section 18.1

In General

48

 

Section 18.2

Number and Context

48

ARTICLE 19

MULTIPLE EMPLOYER PROVISIONS

48

 

Section 19.1

Participating Employers

48

 

Section 19.2

Plan’s Application to Each Participating Employer

48

 

Section 19.3

Continuity of Employment

48

 

Section 19.4

Instructions to Trustee

48

 

Section 19.5

Amendment by Board of Directors

48

 

Section 19.6

Withdrawal by Participating Employer

48

ARTICLE 20

SPECIAL PROVISIONS FOR TOP-HEAVY PLANS

49

 

Section 20.1

Top-Heavy Plan Definitions

49

 

Section 20.2

Requirements in Plan Years in Which Plan Is Top-Heavy

50

 

 

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OGE ENERGY CORP. EMPLOYEES’ STOCK OWNERSHIP

AND RETIREMENT SAVINGS PLAN

 

(As Amended and Restated Effective as of January 1, 2006)

ARTICLE 1

 

ESTABLISHMENT, TITLE, PURPOSE, INTENT AND EFFECTIVE DATE OF PLAN

Section 1.1            Establishment, Effective Date and Title of Plan. OGE
Energy Corp. sponsored what was originally known as the Oklahoma Gas and
Electric Company Employees’ Thrift Plan (the “RSP”) established January 1, 1982
by OGE Energy Corp.’s wholly-owned subsidiary, Oklahoma Gas and Electric
Company. The RSP was amended and restated twice as of January 1, 1984, amended
and restated as of January 1, 1987, amended and restated as of January 1, 1989,
and amended and restated as of December 1, 1993, at which time the RSP was
renamed the Oklahoma Gas and Electric Company Employees’ Retirement Savings
Plan. The RSP was amended as of September 17, 1997, at which time OGE Energy
Corp. assumed sponsorship of the RSP, and it was renamed the OGE Energy Corp.
Employees’ Retirement Savings Plan.

OGE Energy Corp. also sponsored the Oklahoma Gas and Electric Company Employees’
Stock Ownership Plan (the “ESOP”), established January 1, 1977 by OGE Energy
Corp.’s wholly-owned subsidiary, Oklahoma Gas and Electric Company. The ESOP was
amended and restated effective January 1, 1978, January 1, 1983, January 1,
1984, and January 1, 1989. On July 15, 1998, OGE Energy Corp. assumed
sponsorship of the ESOP.

 

The RSP and the ESOP were merged effective October 1, 1998 and amended, restated
and continued as of that date in the form of the OGE Energy Corp. Employees’
Stock Ownership and Retirement Savings Plan (the “Plan”). The following
provisions constitute an amendment and restatement of the Plan, as heretofore
amended, effective as of January 1, 2006.

 

Section 1.2           Purpose of Plan. The purpose of the Plan is to assist
Employees of the Company in acquiring an equity ownership in OGE Energy Corp.
and to provide additional financial security to Participants and their
Beneficiaries through systematic savings of a portion of their earnings
supplemented by Company Matching Contributions. Unless expressly stated
otherwise with respect to a particular provision, the amended and restated Plan
shall apply only to Plan Years beginning on or after January 1, 2006 and to
Participants and former Participants (and their Beneficiaries and alternate
payees) who have an Account balance under the Plan on or after January 1, 2006.

Section 1.3            Intent of Plan. Effective on and after January 1, 2003,
the Plan is intended to be a profit-sharing plan with a cash-or-deferred
arrangement and is designed to qualify under Code Sections 401(a) and 401(k) of
the Internal Revenue Code, as applicable; provided, however, that the portion of
the Plan that from time to time is invested in the OGE Energy Corp. Common Stock
Fund under the Plan is intended to be a stock bonus plan and an “employee stock
ownership plan” (within the meaning of Section 4975(e)(7) of the Internal
Revenue Code) and is designed to satisfy the requirements of Section 409 of the
Internal Revenue Code. Prior to January 1, 2003, the entire Plan was intended to
be an “employee stock ownership plan”. The portion of the Plan that from time to
time constitutes an “employee stock ownership plan,” as described in the
preceding sentences, is designed to invest in stock of OGE Energy Corp. which
meets the requirements for “qualifying employer securities” within the meaning
of Section 4975(e)(8) and “employer securities” under Section 409(l) of the
Internal Revenue Code and regulations thereunder. As far as practicable, the
income and earnings from the portion of the Plan constituting an “employee stock
ownership plan” and accretions on Company Stock held therein shall also be
invested in Company Stock, except to the extent dividends on such Company Stock
are paid out in cash to Participants as provided in Section 11.5. Effective as
of January 1, 2003, all assets of the Plan that are not invested from time to
time in the OGE Energy Corp. Common Stock Fund shall be characterized as assets
of the profit sharing portion of the Plan. The Company intends that the Plan
shall continue to be maintained by it for the above purposes indefinitely,
subject always, however, to the rights reserved to amend and terminate the Plan
as set forth below.

 

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ARTICLE 2

 

DEFINITIONS

The following terms, when used in the Plan, shall have the following meanings,
unless the context clearly indicates otherwise:

 

Section 2.1          Accounts. The term “Accounts” refers collectively to a
Participant’s After-Tax Contribution Account, Company Matching Contribution
Account, Tax-Deferred Contribution Account, Catch-Up Contribution Account,
Transfer Account, TRASOP Account, if any, and any other account, and any
sub-account of any of them, maintained under Section 7.1.

Section 2.2            Actual Contribution Percentage. The term “Actual
Contribution Percentage” for a Plan Year means a percentage calculated for
purposes of Section 6.4 for the Plan Year for (a) the group of Highly
Compensated Employees who are eligible under Section 3.1 to participate in the
Plan or (b) the group of all other Employees who are eligible under Section 3.1
to participate in the Plan. For each group being tested for a Plan Year, the
Actual Contribution Percentage shall be the average of the following
percentages, which shall be calculated separately for each member of the group:
the sum of the Company Matching Contributions under Section 4.1 and the
After-Tax Contributions under Section 5.1 for the Plan Year on behalf of each
group member, divided by the Compensation for the Plan Year of each group
member.

Section 2.3           Actual Deferral Percentage. The term “Actual Deferral
Percentage” for a Plan Year means a percentage calculated for purposes of
Section 5.6 for the Plan Year for (a) the group of Highly Compensated Employees
who are eligible under Section 3.1 to participate in the Plan or (b) the group
of all other Employees who are eligible under Section 3.1 to participate in the
Plan. For each group being tested for a Plan Year, the Actual Deferral
Percentage shall be the average of the following percentages, which shall be
calculated separately for each member of the group: the Tax-Deferred
Contributions for the Plan Year on behalf of each group member divided by the
Compensation for the Plan Year of each group member.

Section 2.4           After-Tax Contributions. The term “After-Tax
Contributions” means the Employee Contributions under Section 5.1 designated as
such by the Participant. All Participant contributions made before January 1,
1984 shall be considered After-Tax Contributions. After-Tax Contributions are
not intended to qualify as “salary reduction” contributions under Code Section
401(k).

Section 2.5            Authorized Leave of Absence. The term “Authorized Leave
of Absence” means any paid absence by an Employee on account of time during
which no duties are performed due to vacation, holiday, illness, incapacity,
layoff, jury duty, military duty or other leave of absence authorized by the
Company under its standard personnel practices, administered in a uniform and
nondiscriminatory manner. During an Authorized Leave of Absence, a Participant
shall be given credit for Years of Service, provided that he or she retires or
returns to employment with the Company within the period specified in the
Authorized Leave of Absence.

Section 2.6            Beneficiary. The term “Beneficiary” means the person,
persons or trust designated under Section 3.8 to receive a benefit under the
Plan after the death of a Participant.

Section 2.7           Benefits Committee. The term “Benefits Committee” means
the committee appointed from time to time by the Benefits Oversight Committee
pursuant to the provisions of Article 13.

Section 2.8           Benefits Oversight Committee. The term “Benefits Oversight
Committee” means the committee appointed by the Board of Directors pursuant to
Section 13.3(a).

Section 2.9           Board of Directors. The term “Board of Directors” or
“Board” means the Board of Directors of OGE Energy Corp. as from time to time
constituted.

 

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Section 2.10         Catch-Up Contributions. The term “Catch-Up Contributions”
means the contributions made by a Participant pursuant to Section 5.8.
Catch-Up Contributions are intended to qualify as “salary reduction”
contributions under Section 401(k) of the Code.

Section 2.11         Code. The term “Code” means the Internal Revenue Code of
1986, as amended from time to time.

Section 2.12          Company. The term “Company” means OGE Energy Corp., a
corporation organized and existing under the laws of the State of Oklahoma, and
any successor thereto which continues the Plan as provided in Section 16.1, and
any Subsidiary or other corporation or business organization which together with
OGE Energy Corp. is a member of a “controlled group” of corporations or a group
of trades or business under “common control” under Code Section 414(b) or (c) or
which is required to be aggregated with OGE Energy Corp. under Code Section 414
(m) or (o).

Section 2.13          Company Matching Contribution Account. The term “Company
Matching Contribution Account” means the account maintained for the Company
Matching Contributions allocated on a Participant’s behalf, after adjustment for
earnings, losses, changes in market value, fees, expenses, withdrawals,
distributions and Forfeitures.

Section 2.14          Company Matching Contributions. The term “Company Matching
Contributions” means the contributions of the Company described in Section 4.1.

Section 2.15          Company Stock. The term “Company Stock” means the common
stock of OGE Energy Corp. which currently has a par value of $0.01 per share. At
all times, Company Stock shall meet the requirements of Section 4975(e) of the
Code.

 

Section 2.16

Compensation. The term “Compensation” shall:

(a)           Include the following items paid in cash to the Participant by the
Company during a calendar year:

 

(i)

Base compensation;

 

(ii)

The regular (non-premium) rate of pay for shift work performed by full-time
employees of the Company for the limited purpose of crediting such Participants
with up to 80 total hours of pay during any regular biweekly payroll period; and

 

(iii)

Incentive pay. Unless otherwise specified by the Benefits Oversight Committee,
incentive pay means amounts paid pursuant to a written formal incentive plan, as
approved by the Benefits Oversight Committee in a nondiscriminatory manner,
which includes specific payout criteria. Lump-sum merit awards provided in
conjunction with a merit pay program shall be Compensation for the purpose of
determining eligible Employee Contributions; however, these lump-sum amounts
shall be excluded from consideration of Company Matching Contributions.

“Compensation” shall also include elective contributions in respect of the above
items made by the Company on behalf of a Participant to this Plan or any other
plan or arrangement maintained by the Company pursuant to Code Sections 125,
129, 132, and 401(k), or any similar Code Section providing for pre-tax payments
or deferrals.

 

(b)

Items such as the following shall be excluded from the term “Compensation:”

 

(i)

Amounts paid for overtime work except as provided in subsection (ii) above;

 

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(ii)

Pay in lieu of overtime for exempt personnel;

 

(iii)

Lump-sum pay structure adjustments;

 

(iv)

Shift premiums;

 

(v)

Commissions;

 

(vi)

Fringe benefits;

 

(vii)

Non-cash benefits;

 

(viii)

Company contributions to employee benefit plans or arrangements;

 

(ix)

Employee reimbursements; and

 

(x)

Special lump-sum recognition awards.

Notwithstanding the foregoing, solely for the purpose of determining eligible
Employee Contributions, the definition of Compensation shall include overtime
payments, pay in lieu of overtime for exempt personnel and special lump-sum
recognition awards. These amounts, however, will not be eligible for Company
Matching Contributions. Compensation shall be limited for all Plan purposes to
the first $160,000 ($200,000 for Plan Years beginning on or after January 1,
2002) of Compensation per Participant, as adjusted by the Secretary of the
Treasury pursuant to Code Section 401(a)(17).

 

For purposes of Sections 2.2, 2.3 and 2.24, the term “Compensation” shall mean
the total compensation received by an Employee from the Company for the Plan
Year, including salary, wages, bonuses, commissions, overtime pay, overtime
premiums, amounts which are Tax-Deferred Contributions under the Plan, and any
other elective contributions that are not included in gross income under Code
Section 125, 132(f)(4), 402(e)(3) or 402(h).

 

Section 2.17        Eligible Employee. The term “Eligible Employee” means every
Employee of a Participating Employer, excluding any person who is (a) a leased
employee, (b) classified by a Participating Employer as a leased employee or an
independent contractor (even if such person is later determined to have been a
common law employee), or (c) employed within a collective bargaining unit
recognized as such by the Participating Employer unless and until mutually
satisfactory agreements have been reached with the union bargaining agent for
coverage of the Employees in the bargaining unit represented by the union under
the terms of the Plan, together with such other waivers as the Participating
Employer may deem necessary in light of the local contractual situations.

Section 2.18          Employee. The term “Employee” means every common law
employee of the Company. The term Employee also means any person who is not a
common law employee of the Company and who provides services to the Company if
(a) such services are provided pursuant to an agreement between the Company and
a leasing organization, (b) such person has performed such services for the
Company on a substantially full-time basis for a period of at least one year,
and (c) such services are performed under the primary direction or control of
the Company, as provided in Section 414(n)(2) of the Code.

Section 2.19         Employee Contributions. The term “Employee Contributions”
means the contributions made by a Participant pursuant to Section 5.1.

Section 2.20          Employment Commencement Date and Reemployment Commencement
Date. The term “Employment Commencement Date” means the first day on which the
Employee actually performs an Hour of Service for the Company. The term
“Reemployment Commencement Date” means the first day following a Period of
Severance on which the Employee performs an Hour of Service for the Company.

Section 2.21         ERISA. The term “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from time to time.

 

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Section 2.22          Fiduciaries. The term “Fiduciaries” means the Board of
Directors, the Benefits Oversight Committee, the Benefits Committee, the Plan
Administrator, and the investment manager(s), if any, but only with respect to
the specific responsibilities of each for Plan or Trust administration, as
described and allocated in Article 13. For the sole purpose of voting shares of
Company Stock allocated to Participant Accounts or the exercise of any other
rights appertaining to such shares, including any tender offer rights, the term
“Fiduciaries” shall also mean Participants (or, in the event of a Participant’s
death, his or her Beneficiary) who exercise such voting or other rights.

Section 2.23         Forfeiture. The term “Forfeiture” means the portion of a
Participant’s Company Matching Contribution Account which by reason of the
provisions of Section 4.1(c), 6.4 or 10.3 can no longer become distributable to
him or her. Each Forfeiture shall be applied solely to reduce the amount of
Company Matching Contributions otherwise payable by the Participating Employer
that employed the Participant to whom the Forfeiture is attributable. No part of
any Forfeiture may be applied to increase the benefits any Participant otherwise
would receive under the Plan.

Section 2.24          Highly Compensated Employee. The term “Highly Compensated
Employee” means each Employee who:

(a)           Was a five percent (5%) owner of the Company at any time during
the Plan Year under consideration (the “current Plan Year”) or the preceding
Plan Year; or

(b)           Received Compensation of more than $80,000 during the preceding
Plan Year and who was in the top twenty percent (20%) of Employees (in terms of
Compensation received) for that year.

The $80,000 amount in paragraph (b) shall be adjusted by the Secretary of the
Treasury pursuant to Sections 415(d) and 414(q)(l) of the Code.

 

 

Section 2.25

Hour of Service. The term “Hour of Service” means:

(a)           Each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Company for the performance of duties for the
Company;

(b)           Each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Company on account of a period of time during which
no duties are performed due to Authorized Leave of Absence; provided, however,
that no hour shall be considered an Hour of Service if no duties are performed
and the Employee is paid or entitled to payment under the terms of a plan or
arrangement maintained solely for the purposes of complying with applicable
workers’ compensation, unemployment compensation or disability insurance laws.
The number of Hours of Service credited to an Employee on account of any single
continuous period during which the Employee performs no duties for the Company
shall be limited to the lesser of 50l or the actual number of hours that would
otherwise be considered Hours of Service; and

(c)           Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company; provided, however,
that:  (i) hours for which back pay is awarded or agreed to for periods
described by subsection 2.25(b) above shall be limited by the rules of that
subsection; (ii) hours shall not be credited under both this subsection 2.25(c)
and subsection 2.25(a) or (b) above; and (iii) in the event that the Company
agrees to back pay pursuant to an enforceable, arm’s-length negotiation with an
Employee, nothing in this subsection 2.25(c) shall preclude the Employee from
waiving his or her right to credit for such hours in consideration for the
Company’s agreement.

(d)           For purposes of satisfying a Year of Eligibility Service and
notwithstanding anything in the Plan to the contrary, an Employee who is absent
from work due to (i) the pregnancy of the Employee, (ii) the birth of a child of
the Employee, (iii) the placement of a child in connection with the adoption of
the child by the Employee, or (iv) the caring for the child by the Employee
during the period immediately following the child’s birth or placement for
adoption, shall be treated as having completed certain Hours of

 

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Service for a limited period. The Employee will be treated as completing either
(i) the number of Hours of Service that normally would have been credited but
for the absence or, (ii) if the normal work hours are unknown, eight Hours of
Service for each normal workday during the leave, to a maximum per Plan Year of
501 Hours of Service, but only for purposes of preventing a One-Year Period of
Severance. The Hours of Service required to be credited under this subsection
2.25(d) must be credited only in the Plan Year in which the absence begins for
one of the permitted reasons or, if crediting in such year is not necessary to
prevent a One-Year Period of Severance in that Plan Year, in the following Plan
Year.

Hours of Service shall be credited on the records of the Company to the
employment periods to which the payment relates rather than to the periods in
which payment is actually made. All Employees for whom the Company does not keep
records of the number of hours worked shall be credited with 45 Hours of Service
for each week for which they are paid or entitled to payment. Special rules for
treatment of Hours of Service to be credited for time spent on Authorized Leave
of Absence are set forth in 29 CFR §2530.200b-2(b) and (c), issued by the United
States Department of Labor, which are incorporated herein by reference.

 

Section 2.26          Investment Fund or Funds. The term “Investment Fund” or
“Funds” means any one or all of the funds provided for in Article 8.

Section 2.27        OGE DB Rollover Account. The term “OGE DB Rollover Account”
means the subaccount of the Transfer Account into which employee contributions
made under the Oklahoma Gas and Electric Company Retirement Plan (currently
known as the OGE Energy Corp. Retirement Plan (the “Retirement Plan”)) prior to
October 1, 1975 were transferred for those Employees who took a refund and
elected to roll over their contributions to the Plan.

Section 2.28         Participant. The term “Participant” means any Eligible
Employee who has elected to participate in the Plan pursuant to Section 3.2.

Section 2.29          Participating Employer. The term “Participating Employer”
means OGE Energy Corp. or any Subsidiary or other business organization that is
participating in the Plan pursuant to Article 19.

Section 2.30          Payroll Period. The term “Payroll Period” means the
biweekly, semi-monthly or other period as appropriate, on the basis of which an
Employee is paid by the Company.

Section 2.31         Period of Severance. The term “Period of Severance” means
the period of time commencing on an Employee’s Severance Date and ending on the
Employee’s Reemployment Commencement Date. The term “One-Year Period of
Severance” means a Period of Severance of twelve (12) consecutive months and a
“Five-Year Period of Severance” means a Period of Severance of sixty (60)
consecutive months.

Section 2.32          Permanent Disability. The term “Permanent Disability”
means the permanent incapacity of a Participant to perform the duties of his or
her employment for the Company by reason of physical or mental impairment.
Permanent Disability shall be deemed to exist when so determined by the Benefits
Committee, based upon the written opinion of a licensed physician who has been
approved by the Benefits Committee. The final decision of the Benefits Committee
with respect to Permanent Disability shall be conclusive for all purposes of the
Plan and Trust.

Section 2.33          Plan. The term “Plan” means the OGE Energy Corp.
Employees’ Stock Ownership and Retirement Savings Plan, as set forth herein and
as from time to time amended and in effect.

Section 2.34         Plan Administrator. The term “Plan Administrator” means the
person, persons or corporation from time to time designated as such by the
Benefits Committee, with the administrative responsibilities for the Plan set
forth in Section 13.2.

Section 2.35          Plan Year. The term “Plan Year” means the administrative
year of the Plan and Trust ending each December 31.

 

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Section 2.36        Regular Contributions. The term “Regular Contributions”
means a Participant’s Employee Contributions up to and including 6% of
Compensation.

Section 2.37          Severance Date. The term “Severance Date” means a
severance from employment with the Company which shall occur on the earlier of:

(a)           The date on which an Employee ceases to be an Employee because the
Employee quits, retires, is discharged or dies, whichever occurs first; or

 

(b)

The later of:

 

(i)

One year after the first day of a period in which an Employee remains absent
from the service of the Company with or without pay for any reason other than
quitting, retirement or discharge unless the absence is due to an Authorized
Leave of Absence and the Employee returns to service with the Company at the end
of the Authorized Leave of Absence; or

 

(ii)

The end of the second year after an Authorized Leave of Absence related to
maternity or paternity.

If an Employee incurs a Severance Date under subsection 2.37(a) and performs an
Hour of Service within the twelve-consecutive-month period beginning on the
Severance Date, the Employee shall not have incurred a Period of Severance and
the entire period shall constitute a period of service.

 

Section 2.38          Subsidiary. The term “Subsidiary” means any corporation,
domestic or foreign, of which 50% or more of the voting stock is owned directly
or indirectly by OGE Energy Corp.

Section 2.39        Supplemental Contributions. The term “Supplemental
Contributions” means a Participant’s Employee Contributions of more than 6% of
Compensation.

Section 2.40         Tax-Deferred Contribution Account. The term “Tax-Deferred
Contribution Account” means the account maintained for the Participant’s
Tax-Deferred Contributions, after adjustment for earnings, losses, changes in
market value, fees, expenses, withdrawals and distributions.

Section 2.41        Tax-Deferred Contributions. The term “Tax-Deferred
Contributions” means the Employee Contributions under Section 5.1 designated as
such by the Participant. Tax-Deferred Contributions are intended to qualify as
“salary reduction” contributions under Section 401(k) of the Code.

Section 2.42         Tejas Gas After-Tax Transfer Account. The term “Tejas Gas
After-Tax Transfer Account” means the subaccount of the Transfer Account into
which the after-tax accounts of Participants who became Employees of the Company
on July 1, 1999 (upon the acquisition of Tejas Gas LLC by Enogex, Inc.) were
transferred.

Section 2.43         Transfer Account. The term “Transfer Account” means the
fully vested bookkeeping account established and maintained as provided in
Section 16.3, which may include amounts rolled over to the Trust pursuant to
Section 5.7.

Section 2.44          TRASOP Account. The term “TRASOP Account” means the fully
vested bookkeeping account established and maintained to hold the assets
attributable to the Participant’s Account under the Oklahoma Gas and Electric
Company Employees’ Stock Ownership Plan before it merged with the OGE Energy
Corp. Employees’ Retirement Savings Plan.

 

Section 2.45

Trust. The term “Trust” means the trust or trusts established pursuant to
Section 12.1.

 

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Section 2.46         Trustee. The term “Trustee” means the trustee or trustees
appointed by the Board of Directors pursuant to Section 12.2, and any successor
trustee or trustees.

Section 2.47         USERRA. The term “USERRA” means the Uniformed Services
Employment and Reemployment Rights Act of 1994.

Section 2.48         Valuation Date. The term “Valuation Date” means each
business day on which the Federal Reserve, the New York Stock Exchange and the
Trustee are all open for business.

Section 2.49         Year of Eligibility Service. The term “Year of Eligibility
Service” means the period of twelve consecutive months, commencing as of the
Employee’s Employment Commencement Date or any anniversary thereof, during which
the Employee completes 1,000 or more Hours of Service. Notwithstanding the
foregoing, for purposes of determining the eligibility of the following
Employees to participate in the Plan, Hours of Service for eligibility purposes
shall be accrued as follows:

(a)           Employees of Clinton Gas Company as of August 31, 1994, who became
Employees of the Company on September 1, 1994 (upon the acquisition of Clinton
Gas Company by Enogex, Inc.) shall have their Hours of Service accrued while
employees of Clinton Gas Company prior to September 1, 1994, treated in the same
manner as though such Hours of Service had been accrued with the Company.

(b)           Employees of Ozark Pipeline, Inc. or its affiliates as of July 31,
1998, who became Employees of the Company on August 1, 1998 (in connection with
the purchase of substantially all of the assets of Ozark Pipeline, Inc. by
Enogex Interstate Transmission L.L.C. (the “Ozark Purchase”)) shall have their
Hours of Service accrued while employees of Ozark Pipeline, Inc. or its
affiliates prior to August 1, 1998, treated in the same manner as though such
Hours of Service had been accrued with the Company.

(c)           Effective July 1, 1999, Employees of Tejas Gas LLC as of June 30,
1999, who became Employees of the Company on July 1, 1999 (upon the acquisition
of Tejas Gas LLC by Enogex, Inc.) shall have their Hours of Service accrued
under the Coral Energy Services LLC Thrift Plan prior to July 1, 1999 counted as
Hours of Service for purposes of the Plan.

Section 2.50          Year of Service. The term “Year of Service” means each
twelve-month period of service after January 1, 1982 as an Employee of the
Company, regardless of whether or not such months of service are consecutive.
For a Participant whose Employment Commencement Date was prior to January 1,
1982 and who was employed by the Company on January 1, 1982, Years of Service
shall include periods of service prior to January 1, 1982 if the Participant
elected to participate in the Plan (i) on or before July 1, 1982, or (ii) when
he or she was first eligible to participate, whichever is later. Service with a
“related employer” shall be included in determining an Employee’s Years of
Service. A “related employer” is any trade or business under common control (as
defined in Sections 414(b) and (c) of the Code) with OGE Energy Corp. or which
is required to be aggregated with OGE Energy Corp. under Code Section 414 (m) or
(o), in each case only while it is under common control or required to be so
aggregated.

For Employees who were employed by Mustang Fuel Corporation or Mustang Gas
Products Company on September 29, 1986, employment with Mustang Fuel Corporation
or Mustang Gas Products Company prior to September 29, 1986 shall be included in
determining Years of Service under this Section 2.50 if the Participant elected
to participate in the Plan when first eligible.

 

ARTICLE 3

 

ELIGIBILITY AND PARTICIPATION

Section 3.1            Eligibility to Participate. Each regular full-time
Employee shall be eligible to participate in the Plan upon becoming an Eligible
Employee. Each other Employee who is an Eligible Employee shall be eligible to
participate in the Plan after the completion of a Year of Eligibility Service.

 

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Section 3.2            Election to Participate. Each Eligible Employee may
become a Participant in the Plan as of the first day of the first Payroll Period
beginning after he or she has satisfied the requirements of Section 3.1, by
making an election to participate in advance of such date. An Eligible Employee
who does not elect to become a Participant when first eligible, may elect to
participate as of the first day of any subsequent Payroll Period by making an
election prior thereto in accordance with procedures established by the Plan
Administrator, provided that he or she is employed as an Eligible Employee on
such date.

Section 3.3            Participation Fees. An annual administrative fee may be
charged to each Participant and former Participant (or their Beneficiaries or
alternate payees) with any balance in his or her Accounts under the Plan, as
shall be determined by the Plan Administrator from time to time. Any such fee
shall be applied on a uniform and nondiscriminatory basis to all such
Participants and former Participants.

Section 3.4            Becoming a Noncontributing Participant. A Participant
shall become a Noncontributing Participant for the period during which:

 

(a)

He or she is on an unpaid leave of absence;

(b)           He or she has voluntarily elected to suspend Employee
Contributions as provided in Section 5.3;

(c)           His or her Employee Contributions are automatically suspended
because he or she has taken a withdrawal pursuant to Section 10.4 (h), (i), (j),
(k) or (l); or

 

(d)

He or she is no longer employed as an Eligible Employee.

Section 3.5          Status of Noncontributing Participant. During the period
that a Participant is a Noncontributing Participant he or she shall be entitled
to all the rights, privileges and benefits of a Participant, except that:

 

(a)

No Employee Contributions shall be made on his or her behalf;

 

(b)

No Company Matching Contribution shall be made on his or her behalf;

(c)           If he or she is a Noncontributing Participant pursuant to Section
3.4(a) or (d), no withdrawals pursuant to Section 10.4 and no loans pursuant to
Section 10.6 may be requested.

A Noncontributing Participant who becomes eligible to make Employee
Contributions may so elect by notifying the Trustee in advance of the first day
of a Payroll Period in accordance with procedures established by the Benefits
Committee.

 

Section 3.6           Status of Terminated Participant. Except as provided in
Section 11.1 for Account balances of $5,000 or less ($1,000 or less, effective
on and after March 28, 2005), a terminated Participant shall be entitled to
maintain his or her Accounts in the Plan until such time as distributions are
required pursuant to Section 11.1, unless he or she requests an earlier
commencement of payments pursuant to Section 11.1. The Participant shall have
only those rights, privileges and benefits under the Plan as provided in this
Section 3.6 and in Sections 3.7, 7.2, 8.5, 8.6, 8.7, and in Articles 9 and 11.

 

Section 3.7

Participation and Reemployment.

(a)           If an Employee was a Participant in the Plan on his or her prior
termination of employment and is an Eligible Employee on or after his or her
Reemployment Commencement Date, he or she shall be eligible to become a
Participant as of the first day of the first Payroll Period coincident with or
following his or her Reemployment Commencement Date or, if later, the date such
Employee again becomes an Eligible Employee, provided that he or she has made an
election to participate in advance of such date pursuant to such procedures as
the Plan Administrator requires under Section 3.2. If he or she

 

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does not elect to become a Participant as of such date, he or she may elect to
become a Participant as of the first day of any succeeding Payroll Period by
making an election prior thereto according to Section 3.2.

(1)           Restoration of “Unvested” Amounts. If a Participant terminates
employment with the Company before becoming fully vested in his or her Company
Matching Contribution Account, does not take a total distribution of the vested
portion of his or her Company Matching Contribution Account upon termination, is
reemployed by the Company, and either (i) his or her Period of Severance is less
than five years or (ii) the Company fully vested the Company Matching
Contribution Accounts of other Participants in the same category as the
Participant if the Participant had remained employed by the Company and five
years had not elapsed during his or her Period of Severance, the unvested
portion of his or her Company Matching Contribution Account treated as a
Forfeiture, if any, under Section 10.3 shall be restored to the Participant
without interest or earnings as of the Valuation Date immediately following the
date of reemployment. The Participant’s vested interest in his or her Company
Matching Contribution Account upon reemployment shall be determined pursuant to
Section 10.3.

If a Participant terminates employment with the Company before becoming fully
vested in his or her Company Matching Contribution Account, receives a
distribution or deemed distribution pursuant to Section 10.3 of all of the
vested portion of the account after termination, is reemployed by the Company,
and either (i) his or her Period of Severance is less than five years or (ii)
the Company fully vested the Company Matching Contribution Accounts of other
Participants in the same category as the Participant if the Participant had
remained employed by the Company and five years had not elapsed during his or
her Period of Severance, the Company shall restore to the Participant as of the
Valuation Date immediately following the date of reemployment those amounts
treated as Forfeitures under Section 10.3 without interest or earnings for the
period between the Valuation Date immediately following the Participant’s
distribution date and the Valuation Date immediately following the Participant’s
reemployment. The Participant’s vested interest in his or her Company Matching
Contribution Account upon reemployment shall be determined pursuant to Section
10.3.

 

The Company shall restore unvested Company Matching Contributions to
Participants under this subsection by utilizing first any available Forfeitures
and then by making an additional Company contribution. The Forfeitures or
additional Company contributions must be allocated to the Participant’s Company
Matching Contribution Account prior to the end of the Plan Year following the
Plan Year in which restoration occurs.

 

Notwithstanding any other provision of the Plan to the contrary, if a
Participant terminates employment and his or her Period of Severance exceeds the
greater of (1) five years or (2) his or her Years of Service, the entire
unvested portion of his or her Company Matching Contribution Account, and all
earnings thereon, not previously forfeited shall be forfeited and became a
Forfeiture as of the date he incurs a Five-Year Period of Severance and shall
not be restored upon reemployment.

 

(2)           Restoration of Years of Vesting Service and Years of Service. If
the Participant either had a Vested Percentage under Section 10.3 in his or her
Company Matching Contribution Account (or, effective on and after January 1,
2006 for Participants who terminate employment on or after such date, in his or
her Tax-Deferred Contribution Account) as of his or her Severance Date or if his
or her Period of Severance is less than five years, the Participant shall be
entitled, following his or her reemployment, to a reinstatement of his or her
Years of Vesting Service and his or her Years of Service accrued as of his or
her Severance Date. If the Participant’s Period of Severance equaled or exceeded
five years, however, Years of Vesting Service accrued after his or her
Reemployment Commencement Date will be disregarded for the purpose of vesting in
the Participant’s Company Matching Contribution Account accrued before such
Period of Severance.

 

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(b)           If an Employee has a Reemployment Commencement Date but was not a
Participant in the Plan on his or her prior termination of employment, such
Employee shall be eligible to participate in the Plan upon satisfying the
eligibility requirements under Section 3.1.

Section 3.8            Beneficiary Designation. A Participant may designate a
Beneficiary in writing on a form provided by the Plan Administrator. Such a
designation may be in favor of one or more Beneficiaries, may include contingent
as well as primary designations, may apportion or specify the benefits payable
hereunder, and may include named or yet unnamed trustees under any will or
living trust. The designation may be changed at any time or times by filing a
new designation form with the Plan Administrator. Any designation shall become
effective upon receipt thereof acknowledged by the Plan Administrator during the
Participant’s lifetime. The most recent designation received by the Plan
Administrator shall control as of any date. If a Participant designates a
Beneficiary without providing that the Beneficiary must be living at the time of
each distribution, and if the Beneficiary survives the Participant but dies
before receiving all of the benefits so designated, then the remaining benefits
shall be distributed to the Beneficiary’s spouse, if any, otherwise to the
Beneficiary’s then-living descendants, per stirpes, if any, otherwise to the
Beneficiary’s estate. If multiple Beneficiaries are named without specifying the
proportions payable to each, distribution shall be made in equal shares to the
Beneficiaries entitled thereto. In the absence of a written and receipted
designation of Beneficiary, or if all designated Beneficiaries predecease the
Participant, the Participant’s spouse, if any, otherwise the Participant’s
then-living descendants (with distribution being made per stirpes), if any,
otherwise the Participant’s estate, shall be considered the designated
Beneficiary. All Beneficiary designations should include the full name and post
office address of the Beneficiary. Distribution to a Beneficiary hereunder other
than to the estate of a Participant shall not be subjected to claims against the
Participant. A married Participant’s sole primary Beneficiary shall, while the
Participant is married, automatically be his or her current spouse unless the
spouse consents in writing to the designation of a different primary Beneficiary
or Beneficiaries. Such spousal consent shall acknowledge the financial effect of
the designation and shall also acknowledge the non-spouse Beneficiary, class of
Beneficiaries or contingent Beneficiaries and the specific form of payment, if
any, chosen by the Participant. The consent shall be witnessed by a Plan
representative or a notary public.

ARTICLE 4

 

COMPANY MATCHING CONTRIBUTIONS

Section 4.1            Amount of Company Matching Contributions. Subject to the
provisions of Section 6.1, the Participating Employers shall make Company
Matching Contributions to the Plan for each Payroll Period on behalf of each
Participant, on the following basis:

(a)           For Participants whose Employment and, if applicable, most recent
Reemployement Commencement Dates were before February 1, 2000, and

(1)           the Participant has completed fewer than 20 full Years of Service,
the Participating Employers shall contribute fifty percent (50%) of the Regular
Contributions deposited during such Payroll Period by such Participant;
provided, however, that the amount of Employee Contributions for which the
Participating Employers shall make a Company Matching Contribution shall not
exceed six percent (6%) of the Participant’s Compensation; or

(2)           the Participant has completed 20 or more full Years of Service,
the Participating Employers shall contribute seventy-five percent (75%) of the
Regular Contributions deposited during such Payroll Period by such Participant;
provided, however, that the amount of Employee Contributions for which the
Participating Employers shall make a Company Matching Contribution shall not
exceed six percent (6%) of the Participant’s Compensation.

(b)           For Participants whose Employment or most recent Reemployment
Commencement Dates were on or after February 1, 2000, the Participating
Employers shall contribute one hundred percent (100%) of the Regular
Contributions deposited during such Payroll Period by such Participant;
provided, however, that the amount of Employee Contributions for which the
Participating Employers shall make a Company Matching Contribution shall not
exceed six percent (6%) of the Participant’s Compensation.

 

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(c)           In the event that (i) the amount contributed to a Participant’s
Tax Deferred Contribution Account under Section 5.1 for a Plan Year exceeds the
limitation of Section 5.5 for the Plan Year or (ii) the amount contributed to a
Participant’s Tax Deferred Contribution Account or After-Tax Contribution
Account under Section 5.1 for a Plan Year is reduced in order to comply with the
limitations of Section 5.6 or 6.4, respectively, any Company Matching
Contributions made with respect to such excess contributions, plus any income
and minus any loss allocable thereto, shall be forfeited notwithstanding any
other provision of the Plan to the contrary and shall be considered a Forfeiture
and applied as provided in Section 2.23. Any such forfeited Company Matching
Contributions shall not be taken into account in applying the limitations under
Section 6.4. Income and losses shall be determined in the manner provided in
Section 5.6(c)(iii) for determining earnings and losses thereunder.

Section 4.2            Time and Form of Company Matching Contributions. Company
Matching Contributions shall be made as soon as reasonably practicable after the
last business day of the calendar month in which the Payroll Period to which
they relate ends. Company Matching Contributions may be made in the form of cash
or qualifying employer securities (within the meaning of Code Section
4975(e)(8)) or in a combination thereof, as the Participating Employers elect.
To the extent that Company Matching Contributions are made in the form of
Company Stock, the number of shares to be contributed shall be determined by
dividing the amount of the contribution to be made in the form of stock by the
closing price of such stock as reported as New York Stock Exchange-Composite
Transactions on the date to which such contribution relates. Such stock may be
stock which has been purchased by the Participating Employers for this purpose,
authorized but unissued stock of OGE Energy Corp., or treasury stock held by OGE
Energy Corp. Regardless of the form of contribution, all Company Matching
Contributions shall be invested in the OGE Energy Corp. Common Stock Fund when
contributed to the Trust.

 

ARTICLE 5

 

EMPLOYEE CONTRIBUTIONS

Section 5.1           Employee Regular and Supplemental Contributions. For each
Payroll Period, each Participant shall contribute to the Plan an amount not less
than two percent (2%) nor more than nineteen percent (19%) of his or her
Compensation, which contributions shall be designated by the Participant, in
whole multiples of one percent (1%) of Compensation, on the following basis:

(a)           Contributions not exceeding the first six percent (6%) of
Compensation shall be designated Regular Contributions. Regular Contributions
may be designated as After-Tax Contributions or Tax-Deferred Contributions in
any combination, provided that any such designation is made in whole multiples
of one percent (1%) of Compensation.

(b)           Contributions exceeding the first six percent (6%) of Compensation
shall be designated Supplemental Contributions. Supplemental Contributions may
be designated as After-Tax Contributions or Tax-Deferred Contributions, in any
combination, provided that any such designation is made in whole multiples of
one percent (1%) of Compensation.

All Employee Contributions shall be effected by payroll deductions in accordance
with procedures established by the Benefits Committee.

 

Section 5.2           Change in Employee Contribution Percentages. The rate of
Regular and Supplemental Contributions may be changed from one whole multiple of
one percent (1%) to another by any Participant as to Employee Contributions to
be made in the future, effective as of the first day of any Payroll Period and
within the limitations of Section 5.1, by submitting the required information in
advance to the Trustee; provided, however, that a Participant’s Supplemental
Contributions shall be completely suspended during any period in which his or
her Regular Contribution percentage is less than six percent (6%).
Notwithstanding the foregoing or the provisions of Section 5.3, a Participant
who is a participant in the OGE Energy Corp. Deferred Compensation Plan or any
successor thereto, shall not be permitted to change, suspend or resume his or
her Employee Contributions hereunder other than as of the first day of a Plan
Year unless the change is permitted under Code Section 409A and the regulations
thereunder.

 

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Section 5.3           Suspension of Employee Contributions. Subject to the last
sentence of Section 5.2, a Participant may suspend his or her Regular
Contributions and/or Supplemental Contributions as of the first day of any
Payroll Period by making a request to the Trustee prior to the start of such
Payroll Period, in accordance with procedures established by the Benefits
Committee. A Participant may resume Employee Contributions by similar advance
notice to the Trustee.

Section 5.4          Deduction of Employee Contributions. The Company shall
deduct Employee Contributions from the Compensation of the Participant and shall
transmit biweekly, but in no event later than the 15th business day of the month
following the month in which such deduction is made, the sums so deducted to the
Trustee for investment as the Participant shall have directed. A statement of
the amount of each Participant’s Employee Contributions shall be delivered to
the Trustee by the Plan Administrator.

Section 5.5           Yearly Limitation on Tax-Deferred Contributions. No
Participant shall be permitted to have Tax-Deferred Contributions made under the
Plan during any calendar year beginning on or after January 1, 2002, in excess
of $11,000 or such other maximum amount as is provided for under Code Section
402(g) for such calendar year (reduced by the Participant’s elective deferrals
for such year under any other salary reduction arrangement maintained by the
Company under Code Section 401(k), 403(b), 408(k)(6), 408(p) or 501(c)(18) and,
effective after 2005, by any designated Roth contribution for such year under a
cash or deferred arrangement maintained by the Company under Section 401(k) or
403(b) to the extent includible in gross income), as adjusted by the Secretary
of the Treasury each year. Any Tax-Deferred Contributions made by the Company on
behalf of a Participant in excess of such adjusted limit for any calendar year
shall be returned to the Participant (as adjusted for earnings and losses
attributable thereto, as determined under Article 9, (i) with respect to any
excess returned for calendar years before 2008, through a date that is no more
than seven (7) days before the date of distribution and (ii) with respect to any
excess returned for calendar years ending after 2007, the end of such calendar
year) no later than the April 15 following the close of the calendar year to
which such excess relates. The amount of excess Tax-Deferred Contributions to be
distributed under this Section with respect to an Employee for a Plan Year shall
be reduced by any excess Tax-Deferred Contributions previously distributed to
the Employee for the Employee’s taxable year ending with or within the Plan Year
in accordance with Section 402(g)(2).

 

Section 5.6

Reduction of Tax-Deferred Contributions by the Benefits Committee.

 

(a)

To the extent necessary to meet for any Plan Year either of the following tests:

 

(i)

the average Actual Deferral Percentage of the Highly Compensated Employees for
the current Plan Year is not more than 1.25 times the average Actual Deferral
Percentage of all other Employees for the preceding Plan Year; or

 

(ii)

the excess of the average Actual Deferral Percentage of the Highly Compensated
Employees for the Plan Year over the average Actual Deferral Percentage of all
other Employees for the preceding Plan Year is not more than 2 percentage points
and the average Actual Deferral Percentage of the Highly Compensated Employees
for the Plan Year is not more than 2 times the average Actual Deferral
Percentage of all other Employees for the preceding Plan Year;

 

(b)

the Benefits Committee may undertake the following actions:

 

(i)

decrease the maximum Tax-Deferred Contribution permitted to be made on behalf of
certain Highly Compensated Employees as determined by the Benefits Committee
each Plan Year; or

 

(ii)

distribute the Tax-Deferred Contributions of certain Participants;

 

(c)

according to the following rules:

 

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(i)

Any distribution to Participants under this paragraph shall occur before the end
of the Plan Year following the Plan Year in which the contributions were made.
However, unless the distribution is made within the first 2½ months of that
following Plan Year, the Participating Employer shall incur a 10% excise tax
with respect to the excess not distributed to the extent required by law.

 

(ii)

The distribution shall be made by distributing the Tax-Deferred Contributions
made on behalf of the Highly Compensated Employees under the leveling method
described under Code Section 401(k)(8) and applicable Treasury Regulations in
order of the aggregate amount of contributions by, or on behalf of, each of such
Employees. Beginning with the highest of such contributions, each aggregate
contribution amount shall be reduced to the next highest aggregate contribution
amount until the excess is eliminated.

 

(iii)

Each distribution under this paragraph shall include the earnings or losses
attributable to the contributions distributed, as determined under Article 9,
through (A) with respect to such distributions made for calendar years ending
before 2008, a date that is no more than seven (7) days before the date of the
distribution and (B) with respect to any such distribution made for calendar
years ending after 2007, the end of such calendar year.

(d)           The amount of excess Tax-Deferred Contributions to be distributed
under this Section with respect to an Employee for a Plan Year shall be reduced
by any excess Tax-Deferred Contributions previously distributed to the Employee
for the Employee’s taxable year ending with or within the Plan Year in
accordance with Section 402(g)(2).

(e)           For purposes of applying the tests set forth in Section 5.6(a) for
any Plan Year beginning on or after January 1, 1997, the Benefits Oversight
Committee may elect, by amending the Plan to provide that it has made such
election, to use the average Actual Deferral Percentage of Employees (who are
not Highly Compensated Employees) for the current Plan Year rather than use the
average Actual Deferral Percentage of Employees (who are not Highly Compensated
Employees) for the preceding Plan Year as is otherwise provided in Section
5.6(a). If such an election is made, it may not be changed except to the extent
provided in applicable governmental regulations, rulings or announcements. In
accordance with the preceding sentences, the Benefits Oversight Committee hereby
elects to use the average Actual Deferral Percentage for Employees (who are not
Highly Compensated Employees) for the current Plan Year in applying the tests
under Section 5.6(a) for each Plan Year commencing on or after January 1, 1997,
and the Plan is hereby amended to so provide.

(f)            The following rules shall apply, to the extent applicable, for
purposes of determining whether the foregoing tests of Section 5.6(a) are met
for a Plan Year:

 

(i)

If during the Plan Year an Employee who is a Highly Compensated Employee for
such Plan Year also participated in any other plan of the Company which includes
a cash or deferred arrangement qualifying under Section 401(k) of the Code, his
or her contributions made pursuant to the cash or deferred arrangement under
such other plan for such Plan Year shall be taken into account for purposes of
applying the tests under (a) above. In the event that such arrangements have
different plan years, all such contributions made during the Plan Year under all
such arrangements shall be aggregated for this purpose. Notwithstanding the
foregoing, cash or deferred arrangements that are not permitted to be aggregated
under Treasury Regulations issued under Code Section 401(k) shall be treated as
separate arrangements.

 

(ii)

If during a Plan Year a Participant who is not a Highly Compensated Employee for
such Plan Year had contributions made under Section 4.1 on his or her behalf in
excess of the limitations of Section 5.5 for such Plan Year, such excess

 

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contributions shall not be taken into account for purposes of applying the tests
under (a) above; however, if the Participant is a Highly Compensated Employee
for the Plan Year, they shall be taken into account.

 

(iii)

If during a Plan Year one or more other plans which include cash or deferred
arrangements under Section 401(k) of the Code are considered with this Plan as
one plan for purposes of Section 401(a)(4) or 410(b) of the Code (other than the
average benefit percentage test thereunder), all such arrangements shall be
treated as one arrangement for purposes of applying this Section 5.6.

(g)           In the discretion of the Benefits Committee and to the extent
permitted under Treasury Regulations, the tests under this Section 5.6 and any
corrective action resulting therefrom may be conducted separately with regard to
any group of Employees for whom separate testing is permissible under such
regulations and shall be conducted separately with regard to any group of
Employees for whom separate testing is required under such regulations.

Section 5.7            Rollover Contributions. An Eligible Employee who has
received a distribution of his or her interest in a plan that is qualified under
Section 401(a) of the Code may, in accordance with procedures established by the
Benefits Committee, transfer the distribution to the Trust and instruct the
Trustee to accept such a distribution directly from the distributing plan,
provided the following conditions are met:

 

(a)

the distribution is an eligible rollover distribution as defined in
Section 11.9;

(b)           the transfer occurs in a direct trustee-to-trustee rollover or on
or before the 60th day following the Employee’s receipt of the distribution from
the other plan, or, if such distribution had previously been transferred into an
individual retirement account or individual retirement annuity described in
Section 408 of the Code, on or before the 60th day following the Employee’s
receipt of the distribution from such account or annuity;

(c)           the Employee provides the Trustee with whatever information it
deems necessary to determine that the proposed rollover will meet the
requirements of this Section; and

(d)           to the extent the distribution consists of after-tax
contributions, such after-tax contribution amounts may be rolled over to the
Plan only from another qualified plan in a direct trustee-to-trustee rollover
and shall be separately accounted for under the Plan; provided, however, that no
amounts distributed from a designated Roth account (as defined in Section 402A
of the Code) or from a Roth IRA (as defined in Section 408A of the Code) may be
transferred to the Plan.

The amount transferred shall be credited to the rollover subaccount of the
Employee’s Transfer Account, subject to subsection (d) above.

 

 

Section 5.8

Catch-Up Contributions.

(a)           For any Plan Year beginning after December 31, 2001, all
Participants who have attained age 50 before the close of the Plan Year shall be
eligible to make Catch-Up Contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Code. Such Catch-Up Contributions shall
not be taken into account for purposes of the provisions of Sections 5.5 and 6.2
of the Plan and shall not be eligible for Company Matching Contributions. The
Plan shall not be treated as failing to satisfy Section 5.6 and Article 20 of
the Plan or the requirements of Code Section 410(b) by reason of the making of
such Catch-Up Contributions, and, accordingly, Catch-Up Contributions shall not
be taken into account for purposes of applying tests under Section 5.6, in
determining the minimum allocation under Article 20 for the current Plan Year
(but Catch-Up Contributions made in prior years are counted in determining
whether the Plan is Top-Heavy) or for purposes of Section 410(b) of the Code.

 

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(b)           In furtherance of, but without limiting the foregoing, (i) the
percentage limitation described in Section 5.1 shall not apply to Catch-Up
Contributions, (ii) any Tax-Deferred Contributions which exceed (A) the
percentage limits described in Section 5.1, (B) the statutory limits described
in Sections 5.5 and 6.2, or (C) the limits specified by the Benefits Committee
under Section 5.6 for the Plan Year, shall be treated as Catch-Up Contributions
and (iii) Catch-Up Contributions shall be permitted to be made on a
payroll-by-payroll basis; provided, however, that Tax-Deferred Contributions may
only be characterized as a Catch-Up Contribution on a Plan Year basis.

(c)           Catch-Up Contributions shall be credited to the Participant’s
Catch-Up Contribution Account established under the Plan. For purposes of making
contributions under Section 6.1, the vesting under Section 7.3, the time and
form of distribution and withdrawals under Articles 10 and 11, including
hardship withdrawals, and investments under Article 8, a Catch-Up Contribution
shall be treated as Supplemental Contributions under the Plan.

ARTICLE 6

 

LIMITATIONS ON CONTRIBUTIONS TO THE PLAN

Section 6.1            Company Matching Contribution and Tax-Deferred
Contribution Limitations. Company Matching Contributions and Tax-Deferred
Contributions made by any Participating Employer shall be made only on behalf of
Participants who are Employees of the Participating Employer, and Company
Matching Contributions shall be made only from current or accumulated earnings
or profits of such Participating Employer. If any Participating Employer is
prevented from making a contribution which it otherwise would have made by
reason of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it otherwise would have
made, then so much of the contribution which such Participating Employer was so
prevented from making may be made for the benefit of Participants who are
Employees of such Participating Employer by any of the other Participating
Employers to the extent of its current or accumulated earnings or profits. If
the Participating Employers do not file a consolidated federal income tax
return, the contribution by each such other Participating Employer shall be
limited to that portion of its total current and accumulated earnings or profits
remaining after adjustment for its contributions on behalf of Participants who
are its own Employees which the total prevented contribution bears to the total
current and accumulated earnings or profits of all such Participating Employers
remaining after adjustment for all contributions on behalf of Participants who
are their own Employees. Notwithstanding the foregoing provisions of this
Section 6.1, OGE Energy Corp. may waive the earnings and profits limitation
under this Section 6.1 for any Plan Year. The amount of contributions made by
any Participating Employer for a Plan Year shall not exceed the amount deemed to
be deductible in computing the taxable income of such Participating Employer
(taking into account all contributions under all of such Participating
Employer’s qualified plans and all privileges and limitations of carryovers and
carryforwards as established by law) for the purpose of computing taxes on or
measured by income under the provisions of the Code and/or any other laws in
effect from time to time.

Section 6.2           Maximum Annual Additions to Participant Accounts.
Notwithstanding any other provision of the Plan, the “annual additions” on
behalf of a Participant for any “limitation year” shall not exceed an amount
equal to the lesser of:

(a)           Thirty thousand dollars ($30,000) (or, for limitation years
beginning on and after January 1, 2002, forty thousand dollars ($40,000)), as
adjusted by the Secretary of the Treasury under Section 415(d) of the Code; or

(b)           Twenty-five percent (25%) (or, for limitation years beginning on
or after January 1, 2002, one hundred percent (100%)) of the Compensation paid
to the Participant by the Company in that limitation year.

For purposes of this Section 6.2 and Section 6.3, the term “annual additions”
shall mean, with respect to each Participant for each Plan Year, the aggregate
of the Company Matching Contributions allocated to his or her Company Matching
Contribution Account, the Tax-Deferred Contributions allocated to his or her
Tax-Deferred Contribution Account and the contributions made by the Participant
to his or her After-Tax Contribution Account.

 

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If any Participant’s annual additions exceed the applicable maximum limitation
set forth above, contributions (and the earnings attributable thereto during the
Plan Year) shall be returned to the Participant and/or held in a suspense
account for the Participating Employer to the extent necessary and in the
following priority:

 

 

(c)

First, Supplemental After-Tax Contributions shall be returned to the
Participant;

(d)           Second, Regular After-Tax Contributions shall be returned to the
Participant and Company Matching Contributions relating thereto shall be held in
a suspense account for the Participating Employer;

(e)           Third, Supplemental Tax-Deferred Contributions shall be returned
to the Participant; and

(f)            Fourth, Regular Tax-Deferred Contributions shall be returned to
the Participant and Company Matching Contributions relating thereto shall be
held in a suspense account for the Participating Employer.

Amounts held in a suspense account for a Participating Employer shall be used to
reduce future Company Matching Contributions by such Participating Employer. For
purposes of this Section 6.2 and Section 6.3, the term “limitation year” shall
mean the Plan Year and the term “Compensation” shall be defined pursuant to Code
Section 415(c)(3) and Treasury Regulation Section 1.415-2(d).

 

Section 6.3            Participation in More than One Plan of Company. In the
event that the annual additions which otherwise would be made to the
Participant’s Accounts under all defined contribution plans of the Company for
any Plan Year exceed the limitations set forth in Section 6.2, the excess annual
additions shall be attributable first to the Plan as may be required under
Section 6.2 so that no such excess annual additions are made.

 

Section 6.4

Limitation on Amount of Company Matching Contributions and After-Tax
Contributions.

 

(a)

To the extent necessary to meet for any Plan Year either of the following tests:

 

(i)

The average Actual Contribution Percentage of the Highly Compensated Employees
for the current Plan Year is not more than 1.25 times the average Actual
Contribution Percentage of all other Employees for the preceding Plan Year; or

 

(ii)

The excess of the average Actual Contribution Percentage of the Highly
Compensated Employees for the current Plan Year over the average Actual
Contribution Percentage of all other Employees for the preceding Plan Year is
not more than 2 percentage points and the average Actual Contribution Percentage
of the Highly Compensated Employees for the current Plan Year is not more than 2
times the average Actual Contribution Percentage of all other Employees for the
preceding Plan Year;

 

(b)

the Benefits Committee may undertake any of the following actions:

 

(i)

forfeit the amount of the nonvested Company Matching Contributions made on
behalf of certain Highly Compensated Employees as determined by the Benefits
Committee each Plan Year;

 

(ii)

return the After-Tax Contributions made by certain Highly Compensated Employees
as determined by the Benefits Committee each Plan Year; or

 

(iii)

return the amount of the vested Company Matching Contributions made on behalf of
certain Highly Compensated Employees as determined by the Benefits Committee
each Plan Year;

 

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(c)

according to the following rules:

 

(i)

Any distribution to Participants under this paragraph shall occur before the end
of the Plan Year following the Plan Year in which the contributions were made.
However, unless the distribution is made within the first 2½ months of that
following Plan Year, the Participating Employer shall incur a 10% excise tax
with respect to the excess not distributed to the extent required by law.

 

(ii)

The distribution shall be made by reducing the Company Matching Contributions
made on behalf of the Highly Compensated Employees under the leveling method
described under Code Section 401(k)(8) and applicable Treasury Regulations in
order of the aggregate amount of contributions by, or on behalf of, each of such
Employees. Beginning with the highest of such contributions, each aggregate
contribution amount shall be reduced to the next highest aggregate contribution
amount until the excess is eliminated.

 

(iii)

Each distribution under this paragraph shall include the earnings or losses
attributable to the contributions distributed, as determined under Article 9,
through (A) with respect to such distributions made for calendar years ending
before 2008, a date that is no more than seven (7) days before the date of the
distribution and (B) with respect to any such distribution made for calendar
years ending after 2007, the end of such calendar year.

 

(iv)

Except as otherwise provided by Treasury Regulations, for each Plan Year
beginning before January 1, 2002 in which the nondiscrimination test of
subsection 5.6(a)(ii) is relied upon to satisfy the requirements of Section 5.6,
Company Matching Contributions and After-Tax Contributions must meet the
nondiscrimination test set forth in subsection 6.4(a)(i).

 

(v)

The amount of any Company Matching Contributions which are forfeited under this
Section 6.4 shall be considered a Forfeiture and used in accordance with Section
2.23.

(d)           For purposes of applying the tests under Section 6.4(a) for any
Plan Year beginning on or after January 1, 1997, the Benefits Oversight
Committee may elect, by amending the Plan to provide that it has made such
election, to use the average Actual Contribution Percentage of Employees (who
are not Highly Compensated Employees) for the current Plan Year rather than use
the average Actual Contribution Percentage of Employees (who are not Highly
Compensated Employees) for the preceding Plan Year as is otherwise provided in
Section 6.4(a). If such an election is made, it may not be changed except to the
extent provided in applicable governmental regulations, rulings or
announcements. In accordance with the preceding sentences, the Benefits
Oversight Committee hereby elects to use the average Actual Contribution
Percentage for Employees (who are not Highly Compensated Employees) for the
current Plan Year in applying the tests under Section 6.4(a) for each Plan Year
commencing on or after January 1, 1997, and the Plan is hereby amended to so
provide.

(e)           The following rules shall apply, to the extent applicable, for
purposes of determining whether the foregoing tests of this Section 6.4(a) are
met for a Plan Year:

 

(i)

If during the Plan Year an Employee who is eligible under Section 3.1 to
participate in the Plan and is a Highly Compensated Employee for such Plan Year
also participated in any other plan of the Company to which employer matching
contributions or employee contributions required to be taken into account
hereunder are made, such contributions made under such other plan for such Plan
Year by or on his or her behalf shall be taken into account for purposes of
applying the tests under (a) above. In the event that such plans have different
plan years, all such contributions made during the Plan Year under all

 

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such plans shall be aggregated for this purpose. Notwithstanding the foregoing,
plans that are not permitted to be aggregated under Treasury Regulations issued
under Code Section 401(m) shall be treated as separate plans.

 

(ii)

If during a Plan Year one or more other plans to which employer matching
contributions or employee contributions required to be taken into account
hereunder are made are considered along with the Plan as one plan for purposes
of Section 401(a)(4) or 410(b) of the Code (other than the average benefit
percentage test thereunder), all such plans shall be treated as one plan in
determining the Actual Contribution Percentage of a group of Employees under the
Plan.

(f)            In the discretion of the Benefits Committee and to the extent
permitted under Treasury Regulations, the tests under this Section 6.4 and any
corrective action resulting therefrom may be conducted separately with regard to
any group of Employees for whom separate testing is permissible under such
regulations and shall be conducted separately with regard to any group of
Employees for whom separate testing is required under such regulations.

Section 6.5            Multiple Use of Alternative Limitation. Notwithstanding
any provision in Articles 5 and 6 to the contrary, if the 1.25 factors referred
to in Sections 5.6 or 6.4 are both exceeded for a Plan Year beginning before
January 1, 2002, the leveling method of corrections under Treasury Regulation
Section 1.401(m)-1(e)(2) shall be continued until the combined limitation set
forth in Treasury Regulation Section 1.401(m)-2(b) is satisfied for such Plan
Year.

ARTICLE 7

 

PARTICIPANT ACCOUNTS

Section 7.1            Establishment of Participant Accounts. The Benefits
Committee shall maintain, or cause to be maintained, for each Participant a
Company Matching Contribution Account, a Regular After-Tax Contribution Account
and/or a Regular Tax-Deferred Contribution Account, a Supplemental After-Tax
Contribution Account and/or a Supplemental Tax-Deferred Contribution Account, a
Catch-Up Contribution Account, and a TRASOP Account if the Participant also
participated in the Oklahoma Gas and Electric Company Employees’ Stock Ownership
Plan, such Transfer Account as may be required under the terms of Section 16.3,
and any other account or any subaccounts under any account as they may deem
appropriate.

Section 7.2            Quarterly Statement of Account Balances. As soon as
practicable after the close of each calendar quarter, the Plan Administrator
shall prepare and deliver to each Participant a statement of the balances in
such person’s Participant Accounts as of the close of such calendar quarter.

Section 7.3           Nonforfeitability of Employee Contribution Accounts. The
entire interest of each Participant in his or her Regular After-Tax Contribution
Account, Regular Tax-Deferred Contribution Account, Supplemental After-Tax
Contribution Account, Supplemental Tax-Deferred Contribution Account and
Transfer Account, if any, shall be at all times fully vested and nonforfeitable.

Section 7.4            Compliance with USERRA Notwithstanding any provision of
this Plan to the contrary, effective December 12, 1994, contributions, benefits
and service credit with respect to qualified military service will be provided
in accordance with Section 414(u) of the Code.

ARTICLE 8

 

INVESTMENT FUNDS

Section 8.1            Establishment of Funds. The Benefits Committee shall
cause the Trustee to establish and maintain the Investment Funds offered under
the Plan, except that it is OGE Energy Corp.’s intent in its settlor

 

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capacity that the OGE Energy Corp. Common Stock Fund provided for in Section
8.1(a) shall be a permanent feature of the Plan as provided in said Section
8.1(a). Consistent with the foregoing, the Benefits Committee shall have the
authority to add or delete funds as it deems appropriate without amending this
Plan document. As of the effective date of this amendment and restatement the
following funds are available under the Plan unless indicated otherwise:

(a)           OGE Energy Corp. Common Stock Fund. Except as otherwise provided
in this Section 8.1(a), this fund invests exclusively in Company Stock, which
stock shall be contributed by the Participating Employers or purchased: (i) from
OGE Energy Corp., (ii) on the open market or (iii) by participation in a
dividend reinvestment or similar plan available to OGE Energy Corp.’s
shareholders in general. A small portion of this fund may be invested in
short-term investments for liquidity purposes to accommodate daily cash flow
necessary to meet distribution, withdrawal, loan, transfer and administrative
expense needs of the Plan. Interests in this fund are expressed in terms of
“units” and not in shares of stock to permit same day trading and valuations. It
is OGE Energy Corp.’s intent in its settlor capacity that the OGE Energy Corp.
Common Stock Fund shall be a permanent feature of the Plan and shall continue to
be invested exclusively in Company Stock (other than for liquidity purposes as
provided above) without regard to (A) the diversification of assets of the Plan
and Trust, (B) the risk profile of Company Stock, (C) the amount of income
provided by Company Stock, or (D) the fluctuation in the fair market value of
Company Stock, unless the Benefits Committee determines that there is a serious
question concerning the short-term viability of OGE Energy Corp. as a going
concern without resort to bankruptcy proceedings.

(b)           Fidelity Managed Income Portfolio. This option seeks to preserve
the amount invested and to earn a competitive level of income over time. The
goal is to maintain a stable $1 share price, but the yield will fluctuate. This
option purchases short- and long-term investment contracts that meet the credit
quality standards of Fidelity Management Trust Company. An investment contract
is an unsecured agreement where the purchaser agrees to pay for the life of the
contract and repay the money when the contracts become due. The issuers of
investment contracts may be insurance companies, banks or other approved
financial institutions.

(c)           Fidelity Asset Manager: Income. This fund seeks a high level of
current income by maintaining a diversified portfolio of stocks, bonds and
short-term, interest-bearing instruments. The fund emphasizes investments in
bonds and other short-term instruments for income and price stability. The
fund’s “neutral mix” is 20 percent stocks, 50 percent bonds and 30 percent
short-term instruments. This mix will vary as the fund manager gradually adjusts
the fund’s holdings - within defined ranges - based on the current outlook for
different markets.

(d)           Fidelity Asset Manager. This fund seeks high total return with
moderate risk over the long term. The fund may invest in stocks, bonds and other
short-term instruments, both in the U.S. and abroad. The fund’s “neutral mix” is
50 percent stocks, 10 percent bonds and 20 percent short-term instruments. This
mix will vary as the fund manager gradually adjusts the fund’s holdings - within
defined ranges - based on the current outlook for different markets.

(e)           Fidelity Asset Manager: Growth. This fund seeks to maximize total
return over the long-term by investing in a more aggressive mix of stocks, bonds
and other short-term securities. The fund may invest in both U.S. and foreign
securities. The fund’s “neutral mix” is 70 percent stocks, 25 percent bonds, and
5 percent short-term instruments. This mix will vary as the fund manager
gradually adjusts the fund’s holdings - within defined ranges - based on the
current outlook for different markets.

(f)            Fidelity Growth and Income Portfolio. This fund seeks high total
return though a combination of current income (such as through dividends) and
capital appreciation (an increase in the value of the fund’s shares). The fund
expects to invest a majority of its assets in domestic and foreign equity
securities, with a focus on those that pay current dividends and show potential
earnings growth. However, the fund may buy securities that are not currently
paying dividends, but offer prospects for either capital appreciation or future
income.

 

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(g)           Fidelity Blue Chip Growth Fund. This fund seeks capital
appreciation (an increase in the value of the fund’s shares). The fund invests
mainly in common stocks of well-known and established domestic and foreign
companies. The fund normally invests at least 65% of its total assets in the
common stock of “blue chip” companies, i.e., those with a market capitalization
of at least $200 million, if included in the S&P 500 or the Dow Jones Industrial
Average, or $1 billion if not included in either index.

(h)           Fidelity Contrafund. This fund seeks capital appreciation (an
increase in the value of the fund’s shares). The fund invests mainly in equity
securities of foreign and domestic companies that are undervalued or out of
favor. The fund looks for companies that have at least one of the following
characteristics: (i) the company is unpopular, but improvements seem possible
due to developments such as a change in management, a new product line, or an
improved balance sheet; (ii) the company has been popular recently, but is
temporarily out of favor due to short-term or one-time factors; and/or (iii) the
company is undervalued when compared to other companies in the same industry.

(i)            Spartan Total Market Index Fund. This fund seeks to provide
investment results that correspond to the total return of a broad range of
domestic (U.S.) stocks. The fund invests at least 80 percent of its assets in
common stocks included in the Wilshire 5000. The fund’s share price and return
will fluctuate.

(j)            Templeton Foreign I. This fund seeks capital appreciation (an
increase in the value of the fund’s shares). The fund invests mainly in stocks
and debt securities of companies and governments of developed or developing
countries outside the United States. This fund is being closed to new funds
effective October 31, 2006 and removed as an Investment Fund effective December
29, 2006.

(k)           PIMCO Total Return Fund Administrative Class. This fund seeks to
provide high total return that exceeds general bond market indices. The fund
invests mainly in bonds, including U.S. government, corporate, mortgage and
foreign.

(l)            American Beacon Large Cap Value Fund Class A. This fund is added
effective October 31, 2006 and seeks to provide long-term capital appreciation
and current income. The fund invests mainly in equity securities of large market
capitalization U.S. companies. These companies generally have market
capitalizations similar to the market capitalization of the companies in the
Russell 1000®Index. These may consist of common and preferred stocks,
convertible securities, U.S. dollar-denominated American Depositary Receipts and
U.S. dollar-denominated foreign stocks traded on U.S. exchange.

(m)          American Funds EuroPacific Growth Fund Class R4. This fund seeks
long-term growth of capital. The fund invests primarily in stocks of companies
that do most of their business outside the United States. Normally, at least 80%
of the fund's total assets will be invested in securities of companies from
Europe or the Pacific Basin. The fund can invest in many types of companies,
ranging from large multinational corporations located in major world markets, to
smaller companies located in developing countries.

(n)           AIM International Growth Fund. This is a growth fund that invests
internationally and seeks to provide long-term growth of capital. This fund
primarily invests in a diversified portfolio of foreign stocks which have strong
potential growth. The fund will emphasize investments in foreign companies in
the developed countries of Western Europe and the Pacific Basin and may also
invest in stocks of companies located in developing countries in various regions
of the world.

(o)           Calamos Growth A Fund Class A. This fund seeks to provide
long-term capital growth. The fund primarily invests in companies that have the
potential for above-average, sustainable earnings growth, that fund management
believes will outperform most analysts' expectations, and whose results and
prospects are not yet fully reflected in their stock prices. Management has
developed a proprietary screening process that uses sophisticated quantitative
models, with in-depth analysis of such quantitative indicators of a company's
growth prospects as anticipated earnings, cash flow, return on capital, and
expected return. Although the fund can invest in companies of any size, many of
the most promising

 

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opportunities lie in rapidly growing small and mid-sized companies. But, these
sectors of the market also can be more volatile than larger, well-established
companies.

(p)           Fidelity Low Price Stock Fund. This fund seeks to provide capital
appreciation. The fund invests at least 80% of its assets in low-priced stocks
(those priced at or below $35 per share), which can lead to investments in small
and medium-sized companies. The fund may potentially invest in stocks not
considered low priced. Investments in smaller companies may involve greater risk
than those of larger, more well known companies. The fund may invest in
securities of domestic and foreign issuers. The fund may invest in "growth" or
"value" stocks, or both. If a Participant or Beneficiary sells any shares after
holding them for less than 90 days, the fund will deduct a short-term trading
fee from his or her Account equal to 1.5% of the value of the shares sold.

(q)           Fidelity Small Cap Stock Fund. This fund is a growth fund that
seeks to provide long-term growth of capital. The fund invests at least 80% of
its assets in common stocks of companies with small market capitalizations
(those with market capitalizations similar to companies in the Russell 2000®
Index or the S&P® SmallCap 600 Index). Investments in smaller companies may
involve greater risk than those in larger, more well known companies. The fund
may invest in securities of domestic and foreign issuers. If a Participant or
Beneficiary sells shares after holding them for less than 90 days, the fund will
deduct a short-term trading fee from his or her Account equal to 2% of the value
of the shares sold.

(r)            Fidelity Freedom Funds. The Fidelity Freedom Funds are lifecycle
funds, offering a diversified set of mutual funds in a single fund, with the
added benefit of professional asset allocation. The Freedom Funds have an asset
allocation mix among stocks, bonds, and short-term instruments that is more
aggressive when investor is younger and get more conservative as one nears
retirement target date. An investor selects the fund with a target retirement
date closest to when one wants to retire, and fund’s money managers have a
systematic plan for adjusting the asset allocation by incrementally rolling our
of equities and into fixed income investments as the target date approaches.

(s)           Goldman Sachs Mid Cap Value Fund Class A. This mid cap value fund
seeks to provide long-term capital appreciation. The fund primarily invests at
least 80% of its net assets in a diversified portfolio of equity investments in
mid-cap issuers with public stock market capitalizations within the range of the
market capitalization of companies constituting the Russell Midcap® Value Index
at the time of investment. Investments in mid-sized companies may involve
greater risks than those in larger, more well known companies, but may be less
volatile than investments in smaller companies.

(t)            Wells Fargo Advantage Small Cap Value Fund Class Z. This fund
seeks to provide long-term capital growth. This fund primarily invests in stocks
of small-capitalization companies that the fund's manager believes are
undervalued relative to the market based on earnings, cash flow, or asset value.
The manager looks for companies whose stock prices may benefit from a positive
dynamic change, such as a new management team, a new product or service, a
corporate restructuring, an improved business plan, or a change in the
political, economic, or social environment. To a limited extent, the fund may
also invest in foreign securities.

Section 8.2            Investment in Funds. Each of the Investment Funds shall
be invested without distinction between principal and income within the
investment directive for that Fund. The OGE Energy Corp. Common Stock Fund shall
be administered on a unitized share accounting basis with segregation of units
to the individual Participant Accounts. Pending payment of costs, expenses or
anticipated benefits, or acquisition of permanent investments, the Trustee may
hold any portion of any of the Investment Funds in obligations issued or fully
guaranteed as to payment of principal or interest by the Federal government,
short-term demand notes, short-term commercial paper, collective trust funds
investing in short-term investments or in cash and may deposit any uninvested
funds with any bank selected by the Trustee.

Section 8.3            Investment of Company Matching Contributions. All Company
Matching Contributions shall be invested at the time contributed to the Trust in
the OGE Energy Corp. Common Stock Fund. The TRASOP Account shall also be
invested in the OGE Energy Corp. Common Stock Fund. Prior to January 1, 2007, a

 

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Participant who has not attained age 55 may not transfer amounts from his or her
TRASOP Account into any other Investment Fund, and, prior to January 1, 2003, a
Participant who has not attained age 55 may not transfer amounts from his or her
Company Matching Contribution Account into any other Investment Fund. Upon
attaining age 55 and thereafter, a Participant may transfer amounts from his or
her TRASOP Account and Company Matching Contribution Account as provided in
Section 8.5 and may request a distribution from the TRASOP Account in accordance
with Section 11.8. Effective beginning January 1, 2003, a Participant may
transfer amounts from his or her Company Matching Contribution Account in
accordance with Section 8.5 without regard to whether the Participant has
attained age 55 and, effective beginning January 1, 2007, a Participant may
transfer amounts from his or her TRASOP Account in accordance with Section 8.5
without regard to whether the Participant has attained age 55.

Section 8.4           Investment of Employee Contributions and Transfer
Accounts. Each Participant shall have the right to make an election directing
that his or her Employee Contributions and Transfer Account be invested in
specified multiples of one percent (1%) of each of such amounts up to one
hundred percent (100%) thereof, in any one or more of the Investment Funds. A
Participant’s initial investment election shall be made as of his or her initial
commencement of participation in the Plan by making such election at the time of
the Participant’s election to participate under Section 3.2. In the absence of
an effective election, one hundred percent (100%) of the Participant’s Employee
Contributions and Transfer Account shall be invested in the Fidelity Managed
Income Portfolio.

Section 8.5           Change in Participant’s Investment Election. Each
Participant may elect to change the investment of future Employee Contributions
and any future transfers to his or her Transfer Account in any multiple of one
percent (1%) of each of such amounts effective as of any business day, by
providing the required information to the Trustee. Each Participant (or, in the
event of his or her death, the Participant’s Beneficiary) may also elect to
change the investment of the balances in his or her Tax-Deferred Contribution
Account, After-Tax Contribution Account, Transfer Account, Company Matching
Contribution Account, and TRASOP Account, in any multiple of one percent (1%) of
such balances, effective as of any business day, by submitting the required
information to the Trustee in such manner as the Benefits Committee shall
prescribe from time to time, provided, however, that (i) prior to January 1,
2003, a Participant may elect to change the investment of the balance in his or
her Company Matching Contribution Account only after attaining age 55 and (ii)
prior to January 1, 2007, a Participant may elect to change the investment of
the balance in his or her TRASOP Account only after attaining age 55.

Section 8.6            Managed Account Option Election. Instead of directing the
investment of contributions and transfers to and the balance in his or her
Account among available Investment Funds as provided in Sections 8.4 and 8.5,
effective February 1, 2006, each Participant (or, in the event of his or her
death, the Participant’s Beneficiary) shall have the right to elect to have the
Trustee invest such Participant’s Accounts and the contributions and transfers
thereto in available Investment Funds (other than the OGE Energy Corp. Common
Stock Fund) in accordance with directions to be provided by an investment
manager appointed under the Plan for this purpose. With respect to any
Participant or Beneficiary so electing, investments shall be made by the
investment manager in accordance with governing investment guidelines based on
input provided by the Participant or Beneficiary to the investment manager. An
election hereunder may be made at the time of the Participant’s election to
participate in the Plan as provided in Section 3.2 or effective as of any
business day thereafter, but not before February 1, 2006, by submitting required
information to the Trustee. In the event a Participant or Beneficiary makes such
election, he or she may not exercise investment direction with respect to his or
her Account under Sections 8.4 and 8.5 until the election is terminated,
provided, however, that the Participant or Beneficiary may, at any time as
provided in Section 8.5, direct while such an election is in effect that all or
part of the balance in his or her Account, if any, invested in the OGE Energy
Corp. Common Stock Fund thereafter be invested in the other available Investment
Funds by the investment manager pursuant to this Section 8.6. An election under
Section 8.6 shall only apply to the portion of his or her Account with respect
to which the Participant or Beneficiary could otherwise provide investment
directions under this Article 8 other than any such amounts as are invested in
the OGE Energy Corp. Common Stock Fund. Elections shall be subject to such
additional rules or restrictions imposed by the Trustee or investment manager,
and the Trustee and investment manager may decline to implement any election
where it deems appropriate in light of such rules or restrictions. Once made, an
election hereunder may be terminated as of any business day. Elections under
this Section 8.6, and terminations thereof, shall be made by such means as the
Benefits Committee shall prescribe from time to time and shall become effective
as soon as practicable after they are made.

 

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Section 8.7           Participant Voting Rights. Each Participant (or, in the
event of his or her death, the Participant’s Beneficiary) shall be entitled to
direct the Trustee with respect to any shares of Company Stock in the OGE Energy
Corp. Common Stock Fund (including fractional shares) allocated to his or her
Accounts as to the manner in which such shares shall be voted and as to the
exercise of any other rights, including tender offer rights, appertaining to
such shares. In the absence of such direction, the Trustee shall vote or
exercise such allocated shares of Company Stock in the same proportion as shares
for which directions have been received from Participants and Beneficiaries. The
Benefits Committee shall cause all information provided to shareholders of
Company Stock to be concurrently provided to all such Participants (or, in the
event of his or her death, the Participant’s Beneficiary).

Section 8.8          Limitations On Investments And Transactions/Conversions.
Notwithstanding any provision of the Plan to the contrary:

(a)           The Benefits Committee, in its sole and absolute discretion, may
temporarily suspend, in whole or in part, certain Plan transactions, including,
without limitation, the right to change or suspend contributions, and/or the
right to receive a distribution, loan or withdrawal from an Account in the event
of any conversion, change in Plan recordkeeper or Trustee and/or Plan merger or
spinoff.

(b)           The Benefits Committee, in its sole and absolute discretion, may
suspend, in whole or in part, temporarily or permanently, Plan transactions
dealing with investments, including without limitation, the right of a
Participant to change investment elections or reallocate Account balances in the
event of any conversion, change in Plan recordkeeper or Trustee, change in
Investment Funds and/or Plan merger or spinoff.

(c)           In the event of a change in Investment Funds and/or a Plan merger
or spinoff, the Benefits Committee, in its sole and absolute discretion, may
decide to map investments from a Participant’s prior Investment Fund elections
to the then available Investment Funds under the Plan. In the event that
investments are mapped in this manner, the Participant shall be permitted to
reallocate funds among the Investment Funds (in accordance with the terms of the
Plan and any relevant rules and procedures adopted for this purpose) after the
suspension period described in Section 8.8(b) (if any) is lifted.

(d)           Notwithstanding any provision of the Plan to the contrary, the
Investment Funds shall be subject to, and governed by, the restrictions, rules
and procedures specified by the Investment Fund providers in the fund
prospectus(es) or other governing documents thereof (to the extent such rules
and procedures are imposed and enforced by the Investment Fund provider against
the Plan or a particular Participant). Such rules, procedures and restrictions
may limit the ability of a Participant to make transfers into or out of a
particular Investment Fund and/or may result in additional transaction fees or
other costs relating to such transfers. In furtherance of, but without limiting
the foregoing, the Trustee, Plan recordkeeper, Benefits Committee or Investment
Fund provider (or their delegate, as applicable) may decline to implement any
investment election or instruction where it deems appropriate.

ARTICLE 9

 

VALUATIONS AND ADJUSTMENTS

Section 9.1            Computation of Fair Market Value of Funds. The Trustee
shall make a valuation of the net assets of the Funds based on the fair market
values of the Fund’s assets as of each Valuation Date.

Section 9.2            Method of Adjustment. The Trustee shall determine the
fair market value of the Trust based on the fair market value of each individual
share or unit held in the Trust on each Valuation Date and shall adjust the fair
market value of Accounts accordingly as of each Valuation Date to reflect the
dividends, earnings, losses and gains represented in the fair market value of
each individual share or unit allocated thereto; except if an Investment Fund is
closed for trading on any Valuation Date, the Trustee shall determine fair
market value of the individual shares or units thereof as of such other
Valuation Date that the Trustee deems necessary or appropriate. Each
distribution, withdrawal or loan shall be charged to the proper Accounts on the
Valuation Date as of which such distribution or withdrawal is processed. Each
contribution made by or on behalf of a Participant shall be credited to the
proper Accounts on the Valuation Date as of which such contribution is made. The
Trustee’s

 

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determination of the net value of the Plan assets, and of the charges or credits
to Participant Accounts, shall be conclusive and binding on all parties under
the Plan.

Section 9.3            Allocation of Dividends in the OGE Energy Corp. Common
Stock Fund. Any dividends received on shares of Company Stock held in the OGE
Energy Corp. Common Stock Fund which are not distributed in accordance with
Section 11.5 shall be used by the Trustee to purchase additional shares of
Company Stock. All shares of Company Stock obtained with such dividends shall be
added to the OGE Energy Corp. Common Stock Fund and allocated to the Accounts of
the Participants to which they relate in the form of additional units.

Section 9.4           Allocation of Company Matching Contributions. For the
purposes of allocating the Company Matching Contribution for each month, the
Company Matching Contribution Account of each Participant shall be credited with
the number of units of the OGE Energy Corp. Common Stock Fund equal to the
amount calculated in accordance with Section 4.1.

Section 9.5            Payment Of Expenses By Participants. The Benefits
Committee may direct that certain administrative expenses shall be paid directly
by the Participants and former Participants (or their Beneficiaries or alternate
payees), including, but not limited to, loan fees, withdrawal fees, Investment
Fund fees, investment management service fees, and recordkeeping expenses and/or
the Benefits Committee may direct that some or all of those expenses shall only
be paid from the Accounts of former Participants (or their Beneficiaries or
alternate payees).

ARTICLE 10

 

DISTRIBUTIONS AND WITHDRAWALS

Section 10.1          Distributions after a Severance Date. Each Participant who
incurs a Severance Date shall be entitled to a distribution of that portion (or
all) of his or her Accounts determined in accordance with Section 10.2 or 10.3,
whichever is applicable, payable in accordance with the provisions of Article 11
hereof.

Notwithstanding any other provision of the Plan, for purposes of this Section
10.1, a Participant shall be deemed to incur a Severance Date if he incurs
“severance from employment” (within the meaning of Code Section
401(k)(2)(B)(i)(I)) as a result of a liquidation, merger, consolidation, or
other corporate transaction, regardless of whether the Participant continues on
the same job for a different employer following such transaction.
Notwithstanding the foregoing, in the event that the seller and buyer in a
transaction involving the sale of OGE Energy Corp. or a related employer (as
defined in Section 2.50) or the sale of assets of OGE Energy Corp. or a related
employer agree in a purchase agreement to transfer from the Plan to a plan
maintained by the buyer or an affiliate thereof assets and liabilities
attributable to Accounts of one or more Participants, then no such Participant
who is employed by the buyer or an affiliate thereof, as a result of such sale
shall be deemed to have incurred a Severance Date for purposes of being eligible
to receive a distribution of his or her Account.

 

Section 10.2          Termination by Reason of Death, Permanent Disability or
Retirement. If a Participant’s service is terminated by reason of Permanent
Disability or death or after he or she becomes eligible for Normal or Early
Retirement under the terms of the OGE Energy Corp. Retirement Plan, such
Participant (or his or her Beneficiary) shall be entitled to a distribution of
the entire balance in his or her Accounts.

Section 10.3          Termination by Resignation, Release or Discharge. If a
Participant’s service is terminated for a reason other than death or Permanent
Disability and before he or she becomes eligible for Normal or Early Retirement
under the terms of the OGE Energy Corp. Retirement Plan, such Participant shall
be entitled to a distribution of the entire balance in his or her Employee
Contribution Accounts, TRASOP Account, and Transfer Account and, to the extent
the Participant is vested, the vested balance in his or her Company Matching
Contribution Account. The unvested portion of that Participant’s Company
Matching Contribution Account will be treated as a Forfeiture as of the last day
of the Plan Year in which the Participant receives his or her distribution or,
if earlier, as of the date he or she incurs a Five-Year Period of Severance as
provided in Section 3.7(a). If the Participant elects to have distributed less
than the entire vested portion of his or her Company Matching Contribution
Account, the portion of the unvested amounts that will be treated as a
Forfeiture is the total unvested portion multiplied by a fraction, the numerator
of which is the amount of the distribution attributable to the Company Matching

 

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Contribution Account (and, effective on and after January 1, 2006, all other
Accounts other than the Participant’s After-Tax Contribution Account and
Transfer Account) and the denominator of which is the total value of the vested
Company Matching Contribution Account (and, effective on and after January 1,
2006, all other Accounts other than the Participant’s After-Tax Contribution
Account and Transfer Account). The remaining unvested amounts in the
Participant’s Company Matching Contribution Account and the vested portion of
the Participant’s Accounts which remain within the Plan shall continue to accrue
earnings under the regular terms of the Plan, except as provided in subsection
3.7(a) of the Plan.

If the value of the vested portion of a Participant’s Company Matching
Contribution Account is zero and the Participant terminated employment prior to
January 1, 2006, the Participant shall be deemed to have received at termination
a distribution of such vested account balance.

 

If a Participant terminates employment and the value of the vested portion of
the Participant’s Accounts is greater than $5,000 ($1,000, effective on and
after March 28, 2005), but the Participant elects not to receive a distribution
of his or her vested account balances, the unvested portion of his or her
Company Matching Contribution Account and the vested portion of the Accounts
which remain within the Plan shall continue to accrue earnings under the regular
terms of the Plan, except as provided in subsection 3.7(a) of the Plan.

 

If a Participant terminates employment and the value of the vested portion of
the Participant’s Accounts does not exceed $5,000 in the aggregate ($1,000 in
the aggregate, effective on and after March 28, 2005), and the Participant
receives a distribution pursuant to the second sentence of the first paragraph
of Section 11.1 of the Plan, the unvested portion of such Participant’s Matching
Company Contribution Account shall be treated as a Forfeiture as of the last day
of the Plan Year in which the Participant receives his or her distribution.

 

A Participant’s vested balance in his or her Company Matching Contribution
Account as of any Valuation Date shall be determined as follows:

 

 

(a)

An amount equal to:

 

(i)

The sum of:

(1)           the entire balance in the Participant’s Company Matching
Contribution Account as of such Valuation Date; and

(2)           the total debits against the Participant’s Company Matching
Contribution Account as of such Valuation Date attributable to in-service
withdrawals under Section 10.4 hereof and prior distributions under this Section
10.3 which were made before a Five-Year Period of Severance, if any;

 

multiplied by

 

(ii)

The Participant’s Vesting Percentage as specified in the applicable schedule
below, determined as of such Valuation Date;

 

less

 

(iii)

The total debits against the Participant’s Company Matching Contribution Account
as of such Valuation Date attributable to in-service withdrawals under Section
10.4 hereof and prior distributions under this Section 10.3 which were made
before a Five-Year Period of Severance, if any.

 

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Vesting Schedule

Full Years of Vesting Service

 

Vesting Percentage

Less than 3 years

0%

3

30%

4

40%

5

60%

6

80%

7

100%

provided, however, that if the Participant is employed by the Company when he or
she attains age 65 or after he or she becomes eligible for Normal or Early
Retirement under the terms of the OGE Energy Corp. Retirement Plan, his or her
Vesting Percentage shall be one hundred percent (100%).

 

Notwithstanding the foregoing, with respect to any Participant who completes an
Hour of Service in any Plan Year beginning on or after January 1, 2002, the
vested balance in the Company Matching Contribution Account of such Participant
on or after January 1, 2002 will be determined based on the Participant’s
Vesting Percentage as specified in the Vesting Schedule below instead of under
the Vesting Schedule provided above:

 

Vesting Schedule

Full Years of Vesting Service

 

Vesting Percentage

Less than 2 years

0%

2

20%

3

40%

4

60%

5

80%

6

100%

 

                Any amount in a Participant’s Company Matching Contribution
Account which is not distributable as set forth above shall become a Forfeiture
as provided above and shall, together with other Forfeitures arising during the
same Plan Year, be applied to reduce future Company Matching Contributions. A
record of the total debits against the Participant’s Company Matching
Contribution Account for distributions from such Account pursuant to this
Section 10.3 shall be maintained for the purposes of determining the
Participant’s vested balance in such Account prior to the expiration of a
Five-Year Period of Severance.

 

For purposes of the above vesting schedules, the Participant’s Years of Vesting
Service in the Plan shall mean his or her Years of Service with the Company
commencing on or after January 1, 1982; provided, however, that any Participant
whose Employment Commencement Date was prior to January 1, 1982, who was
employed by the Company on January 1, 1982, and who elected to participate in
the Plan on or before July 1, 1982 or when he or she was first eligible to
become a Participant (whichever is later), shall be entitled, upon completion of
three full Years of Vesting Service in the Plan, to have his or her Years of
Service with the Company which are prior to the date on which he or she was
first eligible to participate in the Plan included as Years of Vesting Service.
Notwithstanding the foregoing, for Employees of Enogex Inc., Enogex Products
Corporation and their subsidiaries who became employees of the Company on
September 30, 1986, who did not elect to participate in the Plan when first
eligible or who did elect to participate in the Plan when first eligible and who
have not completed three full Years of Vesting Service in the Plan, only Years
of Service commencing on or after September 30, 1986 shall be included in
determining a Participant’s Years of Vesting Service. Also, and notwithstanding
the foregoing, Employees of Enogex Inc., Enogex Products Corporation and their
subsidiaries, who were employed by the Company on September 30, 1986 and elected
to participate in the Plan when first eligible, shall be entitled, upon
completion of three full Years of Vesting Service, to have all service with
Mustang Fuel Corporation and Mustang Gas Products Company prior to September 30,
1986 treated as Years of Service for the Company in determining Years of Vesting
Service.

 

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Notwithstanding the foregoing, for purposes of determining Participants’ Years
of Vesting Service under this Section 10.3:

 

(1)           Employees who became Employees of the Company on September 1,
1994, upon the acquisition of Clinton Gas Company by Enogex, Inc. and who did
not elect to participate in the Plan when first eligible or who did elect to
participate in the Plan when first eligible and who have not completed three
full Years of Vesting Service in the Plan shall only include their Years of
Service commencing on or after September 1, 1994 in determining their Years of
Vesting Service. Also, and notwithstanding the foregoing, Employees who became
Employees of the Company on September 1, 1994, upon the acquisition of Clinton
Gas Company by Enogex, Inc., and who were employed by the Company on September
1, 1994 and elected to participate in the Plan when first eligible, shall be
entitled, upon completion of three full Years of Vesting Service, to have all
service with Clinton Gas Company prior to September 1, 1994 treated as Years of
Service for the Company in determining Years of Vesting Service.

(2)           Employees who became Employees of the Company on August 1, 1998,
by reason of the Ozark Purchase who have not completed three full Years of
Vesting Service in the Plan shall only include their Years of Service commencing
on or after August 1, 1998 in determining their Years of Vesting Service. Also,
and notwithstanding the foregoing, Employees who became Employees of the Company
on August 1, 1998, by reason of the Ozark Purchase shall be entitled, upon
completion of three full Years of Vesting Service, to have all service with
Ozark Pipeline, Inc. and its affiliates prior to August 1, 1998 treated as Years
of Service for the Company in determining Years of Vesting Service.

(3)           Effective July 1, 1999, Employees who became Employees of the
Company on July 1, 1999, by reason of the acquisition of Tejas Gas LLC by
Enogex, Inc. shall have their years of service for Tejas Gas LLC treated in the
same manner as though such years of service had been accrued with the Company in
determining Years of Vesting Service.

Section 10.4         In-Service Withdrawals. In addition to the withdrawals
permitted under Section 11.8 (related to distributions from TRASOP Accounts) but
subject to the provisions of Section 3.5(c) and this Section 10.4, prior to the
termination of his or her employment with the Company, a Participant may
withdraw, for any reason, as of any Valuation Date, such part or all of the
balance in his or her After-Tax Contribution Account as described in subsections
(a), (b), (c), (d), (e), (f) and (g) of this Section 10.4; such part or all of
the vested balance in his or her Company Matching Contribution Account as
described in subsection (h) of this Section 10.4; such part or all of the
balance in his or her Employee Tax-Deferred Contribution Account as described in
subsections (i), (j), (k), (l), (m) and (n) of this Section 10.4; and such part
or all of the balance in his or her OGE DB Rollover Account as described in
subsection (o) of this Section 10.4.

Any withdrawal under this Section 10.4 may be made by submitting the required
information to the Trustee in such manner as the Benefits Committee shall
prescribe from time to time. All withdrawals shall be made pro rata from the
Funds in which the Participant’s Accounts to which the withdrawal relates are
invested. All withdrawals must be for at least $300 or one hundred percent
(l00%) of the Participant’s After-Tax Contribution Account balance, whichever is
less. A Participant may make only one withdrawal pursuant to this Section 10.4
in any Plan Year, without regard to whether the withdrawal has been requested as
a result of the Participant’s hardship. All such withdrawals shall be made in
cash. Notwithstanding the foregoing, the balance of a Participant’s Tejas Gas
After-Tax Transfer Account may be withdrawn on an unlimited basis.

 

 

Withdrawals shall be deemed made in the following order:

 

 

(a)

The amount, if any, in the Participant’s Tejas Gas After-Tax Transfer Account;

(b)           The amount of any contributions made to the Participant’s
Supplemental After-Tax Contribution Account before 1987;

(c)           The amount of any contributions made to the Participant’s Regular
After-Tax Contribution Account before 1987;

 

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(d)           The amount of any increment in value in the Participant’s
Supplemental After-Tax Contribution Account attributable to contributions made
before 1987;

(e)           The amount of any increment in value in the Participant’s Regular
After-Tax Contribution Account attributable to contributions made before 1987;

(f)            The balance in the Participant’s Supplemental After-Tax
Contribution Account attributable to contributions made after 1986 and earnings
accrued thereon;

(g)           The balance in the Participant’s Regular After-Tax Contribution
Account attributable to contributions made after 1986 and earnings accrued
thereon;

 

(h)

The vested balance in the Participant’s Company Matching Contribution Account;

(i)            The amount of any increment in value credited to the
Participant’s Supplemental Tax-Deferred Contribution Account as of December 31,
1988;

(j)            The amount of any increment in value credited to the
Participant’s Regular Tax-Deferred Contribution Account as of December 31, 1988;

(k)           The amount of contributions made to the Participant’s Supplemental
Tax-Deferred Contribution Account;

(l)            The amount of contributions made to the Participant’s Regular
Tax-Deferred Contribution Account;

(m)          The amount of any increment in value credited to the Participant’s
Supplemental Tax-Deferred Contribution Account after December 31, 1988;

(n)           The amount of any increment in value credited to the Participant’s
Regular Tax-Deferred Contribution Account after December 31, 1988; and

 

(o)

The amount, if any, in the Participant’s OGE DB Rollover Account;

provided, however, that the Participant shall be permitted to withdraw such
amounts pursuant to subsections 10.4 (i), (j), (k), (l) or (o) only as the
Benefits Committee shall authorize upon satisfactory proof provided to the
Benefits Committee that (i) a hardship exists, which hardship shall be limited
to the Participant’s immediate and heavy financial need, and (ii) such
withdrawal is necessary to satisfy such immediate and heavy financial need. The
determination of the existence of an immediate and heavy financial need and of
the amount necessary to meet that need shall be made by the Benefits Committee
in a nondiscriminatory manner. A distribution will be deemed to be made on
account of an immediate and heavy financial need of the Participant only if the
Participant provides evidence satisfactory to the Benefits Committee that the
distribution is on account of:

 

(1)           Expenses for (or necessary to obtain) medical care that would be
deductible under Section 213(d) of the Code (determined without regard to
whether the expenses exceed 7.5% of adjusted gross income) for the Participant,
the Participant’s spouse or any dependent of the Participant (as defined in
Section 152 of the Code and, effective on or after January 1, 2005, without
regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B));

 

(2)

Purchase (excluding mortgage payments) of a principal residence for the
Participant;

(3)           Payment of tuition, related education fees, and room and board for
up to the next 12 months of post-secondary education for the Participant, his or
her spouse, children or dependents (as defined above);

 

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(4)           The need to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of the Participant’s
principal residence;

(5)           Effective on and after January 1, 2007, payment for burial or
funeral expenses for the Participant’s deceased parent, spouse, children or
dependents (as defined in Section 152 of the Code without regard to Code Section
152(d)(1)(B)); or

(6)           Effective on and after January 1, 2007, expenses for the repair of
damage to the Participant’s principal residence that would qualify for the
casualty deduction under Section 165 of the Code (determined without regard to
whether the loss exceeds 10% of the adjusted gross income).

 

A withdrawal shall be necessary to satisfy a Participant’s immediate and heavy
financial need only if:

 

(A)

All of the following requirements are met:

 

(i)

the amount of the withdrawal is not in excess of the amount of the immediate and
heavy financial need (including, effective January 1, 2007, amounts necessary to
pay any federal, state or local income taxes or penalties reasonably anticipated
to result from the withdrawal);

 

(ii)

the Participant has obtained all distributions (including distribution of
dividends under Section 11.5 and of ESOP dividends under Section 404(k) of the
Code under any other Company plan), other than hardship distributions, and all
nontaxable loans available at the time of the requested withdrawal under all
qualified and nonqualified plans of deferred compensation maintained by the
Company, including a cash or deferred arrangement that is part of a Code Section
125 cafeteria plan, but excluding the mandatory employee contribution portion of
a defined benefit plan or a health or welfare benefit plan (including one that
is part of a cafeteria plan);

 

(iii)

the Employee Contributions of any Participant who makes a hardship withdrawal
under subsections 10.4(i), (j), (k) or (l) shall be suspended until the first
day of the first Payroll Period beginning after the end of the twelve-month
period beginning on the date of receipt of the withdrawal; and

 

(iv)

a Participant may not make Tax-Deferred Contributions during the calendar year
immediately following the calendar year of the hardship withdrawal in excess of
the applicable dollar limit under Section 5.5 for such next calendar year less
the amount of such Participant’s Tax-Deferred Contributions for the calendar
year of the hardship withdrawal; provided, however, that this subsection (A)(iv)
shall be without effect for calendar years beginning on or after January 1,
2002; or

(B)          All of the requirements of any additional method prescribed by the
Commissioner of Internal Revenue under which distributions will be deemed
necessary to satisfy an immediate and heavy financial need are met.

Notwithstanding the foregoing provisions of subsection (A)(iii), a Participant
who makes a withdrawal described in subsection 10.4(i), (j), (k) or (l) after
December 31, 2001, shall be suspended from making further Employee Contributions
to the Plan and elective and employee contributions to all other qualified and
nonqualified plans of deferred compensation described in subsection (A) (ii)
above and to all stock options, stock purchase or similar plan maintained by the
Company until the first day of the Payroll Period beginning after the end of the
six-month period beginning on the date of receipt of the withdrawal.

 

A Participant who has attained age 59½ shall not be required to provide evidence
of a hardship to qualify for a withdrawal from his or her Tax-Deferred
Contribution Account. Notwithstanding any other provision in this Section 10.4,
a Participant described in the preceding sentence shall be permitted to withdraw
all or any portion of

 

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his or her Tax-Deferred Contributions and the income allocable thereto,
including pursuant to subsections 10.4(m) and (n), and prior to attaining age
59½, a Participant shall not be permitted to withdraw amounts described in
subsection 10.4(m) or (n) pursuant to this Section 10.4 under any circumstances.

 

Upon making a withdrawal described in subsection 10.4(h) above, the Participant
shall be suspended from making further Employee Contributions to the Plan for a
period of twelve months following such withdrawal.

 

A record of the total debits against the Participant’s Company Matching
Contribution Account for withdrawals from such Account shall be maintained for
the purposes of determining his or her vested balance in his or her Company
Matching Contribution Account upon a Severance Date under the provisions of
Section 10.3.

 

The Plan Administrator shall provide the Participant with notices prescribed by
Code Section 402(f) and 411(a)(11), including, effective January 1, 2007, a
description of the consequences of failing to defer receipt of the withdrawal.
Such information shall be provided not more than ninety (90) days (effective on
and after January 1, 2007, not more than one hundred eighty (180) days) nor less
than thirty (30) days prior to the date of withdrawal; provided, however, that
withdrawal may be made less than thirty (30) days after the provision of such
information if the notice informs the Participant of his or her right of at
least thirty (30) days after receiving the notice to consider the decision as to
whether to elect a withdrawal, and the Participant, after receiving the notice,
affirmatively elects withdrawal.

 

Section 10.5          Indebtedness to Trust. If a Participant is in default or
indebted to the Trust, the amount of such default or indebtedness shall be
deducted from any amounts payable to him or her or to his or her Beneficiary
under this Article 10 and shall be paid to the Trust.

Section 10.6         Loans to Participants. Upon the application of any
Participant but subject to Section 3.5(c), a loan or loans from the
Participant’s Accounts to such Participant may be granted in accordance with
rules established by the Benefits Committee and upon the following specific
conditions:

(a)           The loan is one which is not made available to highly-compensated
Participants in an amount greater in proportion to the size of such
Participants’ Accounts than that available to other Participants;

 

(b)

No Participant may have more than two loans outstanding at any time;

(c)           The loan shall bear reasonable interest consistent with its nature
as a prudent investment of the Trust. At the time any loan is approved, the
Benefits Committee shall establish a reasonable interest rate thereon, taking
into account such factors as (i) the amount of the requested loan, (ii) the term
during which the requested loan would be outstanding, and (iii) the security
held under the requested loan;

(d)           The loan shall be adequately secured by assignment of a portion of
the Participant’s Accounts in an amount equal to the principal amount of the
loan. In the event that a Participant shall default upon his or her obligation
to repay amounts loaned to him, the Trustee may offset amounts owed by such
Participant (including interest accruing after the default) against benefits at
the time they become payable to him or her hereunder without being in violation
of Section 14.2. To the extent the loan would be secured by a Transfer Account
which is subject to Article 17, such loan may not be made without the prior
written consent of the Participant’s spouse;

(e)           The minimum amount that may be loaned to any Participant is
$1,000. The maximum amount which may be loaned hereunder to any Participant will
be established by the Benefits Committee and, whether by one or more loans,
shall not exceed the lesser of (i) $50,000, reduced by the excess (if any) of
the highest outstanding balance of all loans to the Participant from all
tax-qualified plans of the Company during the one-year period ending on the day
before the date on which such loan is made, over the outstanding balance of all
loans to the Participant from all tax-qualified plans of the Company on the date
on which such loan is made, or (ii) fifty percent (50%) of the vested balance of
the Participant’s Accounts;

 

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(f)           Refusal of the Benefits Committee to grant any loan shall not
preclude future applications by the same Participant, and application for or
acceptance of a loan hereunder shall not of itself be construed to constitute
termination of participation in or waiver of any rights under the Plan;

(g)           All loans granted under the Plan shall be repaid pursuant to a
written repayment schedule and evidenced by a written promissory note payable to
the Trustee. In no event shall loans be extended for a period in excess of five
years from the date of the loan plus any additional period of suspension
permitted under Section 10.6(i) below. If and as long as the Participant is an
active employee of the Company, the loan shall be repaid by regular payroll
deductions effective as of the first Payroll Period beginning after the date the
Participant receives the loan amount. If the Participant is not an active
employee or is not otherwise receiving regular paychecks from the Company in an
amount sufficient to repay the loan, then such Participant shall make payments
on the loan by making or delivering checks to the Company pursuant to the
written repayment schedule. In no event shall principal and interest payments by
Participant-debtors be less frequent than quarterly on a level amortization
basis. In the event of a default in payment of either principal or interest
which is due under the terms of any loan, the Trustee may declare the full
amount of the loan due and payable and may take whatever action that may be
lawful to remedy the default or required with respect to the defaulted loan
under applicable governmental regulations.

(h)           A separate segregated account shall be established for each
Participant who is granted a loan. The segregated account will be credited with
the amount of the loan from the Participant’s Accounts and such credits shall
represent charges against such Accounts. The amount of the loan shall be charged
to a Participant’s Accounts in the following order: (i) Regular Tax-Deferred
Contributions; (ii) Supplemental Tax-Deferred Contributions; (iii) the amount of
any increment in value attributable to Regular Tax-Deferred Contributions; (iv)
the amount of any increment in value attributable to Supplemental Tax-Deferred
Contributions; (v) the vested balance in his or her Company Matching
Contribution Account; (vi) Regular After-Tax Contributions made after 1986 and
the earnings (or losses) accrued thereon; (vii) Supplemental After-Tax
Contributions made after 1986 and the earnings (or losses) accrued thereon;
(viii) Tejas Gas After-Tax Transfer Account; (ix) the amount of any increment in
value in his or her Regular After-Tax Contribution Account attributable to
contributions made before 1987; (x) the amount of any increment in value in his
or her Supplemental After-Tax Contribution Account attributable to contributions
made before 1987; (xi) the amount of Regular After-Tax Contributions made before
1987; (xii) the amount of Supplemental After-Tax Contributions made before 1987;
and (xiii) the balance in his or her Transfer Account, if any. A Participant may
not borrow from the balance of his or her TRASOP Account, if any.

The portion of the loan to be segregated from an Account shall be charged on a
pro rata basis against the Investment Fund or Funds in which the Account is
invested. Segregated accounts shall not share in the dividends, earnings, losses
and gains of the Trust under Sections 9.2 and 9.3, but rather will be credited
with amounts of the interest payments made pursuant to the loan agreement and
promissory note. Similarly, the dividends, earnings, gains and losses of the
Trust that are allocated under Sections 9.2 and 9.3 shall not include the
interest payments. Each payment of principal on the loan will be credited to the
Participant’s Accounts in the reverse order that the loaned amount was charged
to such Accounts and will be invested in the same percentages as the Accounts
are invested at such time or, if there is no current balance in such Accounts,
in the percentages which the Accounts were invested prior to the loan. Each
payment of interest will be credited to the Participant’s Accounts in the same
proportions as the loaned amounts were charged to the Accounts and will be
invested in the same manner as the principal payments.

(i)            Loan payments will be suspended under this Plan as permitted
under Section 414(u)(4) of the Code.

ARTICLE 11

 

DISTRIBUTION OF BENEFITS

Section 11.1         Distribution of Benefits Upon Termination of Employment.
Upon termination of employment (other than by reason of death), a Participant
may request either that the vested balance of his or her

 

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Accounts be distributed to him or her following his or her termination of
employment or that distribution be deferred until a later date; provided,
however, that distributions must commence no later than the Required Beginning
Date (as defined in Section 11.3) or such earlier date as is hereinafter
provided in this Section 11.1. Notwithstanding the preceding sentence, if the
vested balance in the Participant’s Accounts does not exceed $5,000 in the
aggregate ($1,000 in the aggregate, effective on and after March 28, 2005), the
Trustee shall distribute the benefit in one lump sum payment as soon as is
administratively practicable after the Participant’s termination of employment
without the Participant’s consent. Unless the Participant elects otherwise,
distributions to a Participant shall commence no later than 60 days after the
close of the Plan Year in which the latest of the following occurs: the
Participant attains age 65, the Participant terminates his employment with the
Company, or the tenth anniversary of the date the Participant began
participation in the Plan.

The Plan Administrator shall provide the Participant with information regarding
the optional forms and times of distribution available under this Article 11,
or, where applicable, Article 17 or Appendix A, including notices prescribed by
Code Section 402(f) and 411(a)(11), including, effective January 1, 2007, a
description of the consequences of failing to defer receipt of the distribution
to age 65. Such information shall be provided not more than ninety (90) days
(effective on and after January 1, 2007, not more than one hundred eight (180)
days) nor less than thirty (30) days prior to the date of distribution;
provided, however, that distribution may be made less than thirty (30) days
after the provision of such information if the notice informs the Participant of
his or her right of at least thirty (30) days after receiving the notice to
consider the decision as to whether to elect a distribution, and the
Participant, after receiving the notice, affirmatively elects distribution.

 

Section 11.2          Manner of Distribution. Subject to the provisions of
Sections 11.1 and 11.8, a Participant may elect to receive his or her
distribution in the form of a lump sum or in the form of installments, or in any
combination thereof, as follows or, where applicable, as provided in Article 17
or Appendix A:

(a)           Lump-sum distributions. A Participant may request that his or her
vested Account balance be distributed in whole or in part in a lump sum as of
any business day. The Participant may specify the Accounts from which any
partial lump-sum distribution shall be made.

(b)           Installment distributions. A Participant may request distribution
of his or her vested Account balance by installment payments that shall:

 

(i)

Begin as soon as practicable after the Trustee receives the Participant’s
request;

 

(ii)

Be substantially equal in amount, with each installment to be equal to the
quotient obtained by dividing the vested balance in the Accounts being paid in
installments as of the Valuation Date coincident with or next preceding the date
such installment payment is processed by the number of installment payments
remaining to be made to the Participant or Beneficiary; and

 

(iii)

Be made at regular intervals, not less frequently than annually, over a definite
period, which may be for any period elected by the Participant not to exceed the
life expectancy of the Participant or the joint life expectancy of the
Participant and his designated Beneficiary. A life expectancy or joint life
expectancy for this purpose shall be computed using the applicable life
expectancy table set forth in Treasury Regulations Section 1.401(a)(9)-9.

Subject to the provisions of Section 11.1 and, if applicable, Article 17, the
Participant’s election above shall be made in such manner and at such time as
the Plan Administrator shall prescribe.

 

Section 11.3         Required Beginning Date. Distributions must be made, or
begin, as of a Participant’s “Required Beginning Date.” The Required Beginning
Date of any Participant who is a Five-Percent Owner (as defined in Section
20.1(c)(ii)) and any other Participant who attains age 70½ before January 1,
1999 will be April 1st of the calendar year following the calendar year in which
he or she attains age 70½. All other Participants must

 

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begin receiving distributions as of April 1 of the calendar year following the
later of either (i) the calendar year in which the Participant reaches age 70½
or (ii) the calendar year in which the Participant retires.

Section 11.4          Form of Distribution. Distributions, other than dividend
distributions, may be made in cash or in kind, or partly in cash and partly in
kind, as the Participant may elect. Such election shall include the opportunity
to request that distribution of such Participant’s interest in the OGE Energy
Corp. Common Stock Fund shall be made in kind in full shares of Company Stock
with fractions of a share being paid in cash. Company Stock and other property
so distributed shall be valued at its fair market value on the Valuation Date as
of which the benefit is determined. Distributions from a Participant’s TRASOP
Account shall be made in cash or in kind in full shares of Company Stock with
fractional shares paid in cash.

Section 11.5          Dividend Distributions. All dividends on shares of Company
Stock which are allocated to a Participant’s Accounts under the Plan shall be
paid in cash to such Participants based on the number of shares allocated to
each such person as of the ex-dividend date for such dividend. Such cash
distributions of dividends shall be made to Participants on a periodic basis as
established by the Benefits Committee but in no event later than 90 days after
the end of the Plan Year in which the dividends are paid to the Plan by OGE
Energy Corp. Cash dividends under this Section 11.5 shall be paid according to
such procedures as the Benefits Committee establishes.

Dividends shall be distributed to a Participant automatically unless the
Participant affirmatively elects to have all or part of such dividends,
excluding dividends paid from the TRASOP Account, remain in the Plan. Such
election shall remain in effect until a new election is made.

 

Section 11.6          Distribution of Benefits upon Death of Participant. Death
benefits shall be paid under the Plan as follows:

(a)           Death before Commencement of Benefits. Except as provided in
Section 17.3(d), in the event that a Participant dies prior to the commencement
of distribution of his or her Accounts hereunder, then the Participant’s entire
vested balance in his or her Accounts shall be distributed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death in
such manner as the Participant designates in the Beneficiary designation form
under Section 3.8 or, in the absence of such a designation, in the manner
provided in Section 11.2 and Appendix A, if applicable, as the Beneficiary shall
direct; provided, however, that if the balance in the Participant’s Accounts
does not exceed $5,000 in the aggregate, the Trustee shall distribute such
benefit in a lump-sum distribution following the Participant’s death.

(b)           Death after Commencement of Benefits. In the event that a
Participant dies after the commencement of distribution of his or her Accounts
over a period certain as provided in Section 11.2(b), distribution shall
continue to the Participant’s Beneficiary as provided under the terms of the
installment distribution; provided, however, that the Beneficiary may accelerate
payments as provided in Section 11.2(a).

(c)           Compliance with Regulations. With respect to distributions under
the Plan made for calendar years beginning on or after January 1, 2002, the Plan
will apply the minimum distribution requirements of section 401(a)(9) of the
Code in accordance with the regulations under section 401(a)(9) that were
proposed on January 17, 2001, notwithstanding any provision of the Plan to the
contrary. This amendment shall continue in effect until the end of the last
calendar year beginning before the effective date of final regulations under
section 401(a)(9) or such other date as may be specified in guidance published
by the Internal Revenue Code.

Notwithstanding any provision in the Plan to the contrary, all minimum required
distributions under the Plan occurring in any calendar year beginning on or
after January 1, 2003, will be determined and made in accordance with Section
401(a)(9) of the Code, including the incidental death benefit requirements of
Code Section 401(a)(9)(G), and the Treasury Regulations issued under Code
Section 401(a)(9), including Treasury Regulation Sections 1.401(a)(9)-1 through
1.401(a)(9)-9, which provisions are hereby incorporated herein by reference;
provided, however, that such provisions shall override the other distribution
provisions of the Plan only to the extent that such other Plan provisions
provide for distribution

 

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that is less rapid than, or is not made or does not begin to be made by, the
date required under Code Section 401(a)(9) and Treasury Regulations issued
thereunder, and shall not be construed as providing any optional form of payment
that is not available under the Plan.

Section 11.7          Distribution to Alternate Payees. Payment of benefits
assigned to an “alternate payee” as defined in Section 404(p) of the Code may be
made in a lump-sum payment as soon as practicable after the Valuation Date
coincident with or next following the date the Plan Administrator determines
that the domestic relations order satisfies the requirements of Code Section
414(p). The alternate payee must request payment from the Trustee. An alternate
payee shall be permitted to designate a Beneficiary pursuant to the provisions
of Section 3.8, except that a married alternate payee shall not be subject to
the requirement that his or her sole primary Beneficiary be his or her spouse.

Section 11.8         Distributions from TRASOP Account. Each Participant shall
have a fully vested and nonforfeitable right to his or her TRASOP Account. In
addition to the distribution rules otherwise specified in this Article 11,
distributions from the TRASOP Account may be made according to the following
rules:

(a)           With respect to any Participant who has not experienced a
Severance Date as of the first day of the 85th month after which a Company
contribution was allocated to his TRASOP Account, the Company Stock attributable
to that particular contribution plus the dividends on such Company Stock not
previously paid to such Participant in cash under Section 11.5 shall be
distributed to the Participant as of the last business day of any calendar
quarter thereafter, provided that he or she files a request to that effect in
accordance with such procedures as the Benefits Committee may establish.

(b)           If a Participant attains age 55 and has 10 years of participation
in the Plan (a “Qualified Participant”), the Participant shall be eligible for a
distribution of the balance of the value (as of the last day of the most recent
Plan Year) of at least 25% of the number of shares of Company Stock credited to
his or her TRASOP Account during the 90-day period following the end of each of
the first five Plan Years of the Participant’s Qualified Election Period, and of
at least 50% of the number of shares of Company Stock credited to his TRASOP
Account during the 90-day period following the end of the last Plan Year of the
Participant’s Qualified Election Period. For purposes of this Section, the
Qualified Election Period is the six Plan Year period beginning with the Plan
Year during which the Participant first becomes a Qualified Participant. The 25%
and 50% figures in this Section shall be reduced by any portion of the
Participant’s TRASOP Account that was previously received pursuant to an
election under this Section.

Section 11.9         Eligible Rollover Distributions. A Participant or other
“distributee” who is entitled to receive an “eligible rollover distribution,”
notwithstanding any provision of the Plan to the contrary that would otherwise
limit the distributee’s election under this Section 11.9, may elect, at the time
and in the manner prescribed by the Plan Administrator, to have all or a portion
of an eligible rollover distribution paid directly to an “eligible retirement
plan” provided that such eligible retirement plan provides for the acceptance of
direct rollovers. For purposes of this Section 11.9, an “eligible rollover
distribution” is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: (i) any distribution that is one of a series of substantially equal
periodic payments made not less frequently than annually for the life (or life
expectancy) of the distributee or the joint lives (or life expectancies) of the
distributee and his or her Beneficiary, or for a specified period of ten years
or more; (ii) any distribution to the extent such distribution is required under
Code Section 401(a)(9); (iii) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to the employer securities); and (iv) any
hardship withdrawal within the meaning of Code Section 401(k)(2)(B)(i)(IV).
Effective as of January 1, 2002, a portion of a distribution shall not fail to
be an “eligible rollover distribution” merely because the portion consists of
after-tax employee contributions which are not includible in gross income.
However, such portion may be paid only to an individual retirement account or
annuity described in Section 408(a) or (b) of the Code, or to a qualified
defined contribution plan described in Section 401(a) or 403(a) of the Code
(and, effective on and after January 1, 2007, to any qualified plan under Code
Section 401(a), any annuity plan described in Code Section 403(a) or any annuity
contract described in Code Section 403(b)), that provides for separate
accounting for amounts so transferred (and earnings thereon), including
separately accounting for the portion of such distribution which is includable
in gross income and the portion of such distribution which is not so includable.
Effective January 1,

 

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2002, any amount that is distributed on account of hardship shall not be an
“eligible rollover distribution” and the distributee may not elect to have any
portion of such a distribution paid directly to an eligible retirement plan.

An “eligible retirement plan” is an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or a qualified trust
described in Code Section 401(a), that accepts the distributee’s eligible
rollover distribution. For purposes of this Section 11.9, a “distributee”
includes any Participant, a surviving spouse, and a spouse or former spouse who
is an alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), and, effective January 1, 2007, any Beneficiary (other than
a surviving spouse) who is a designated beneficiary within in the meaning of
Code Section 401(a)(9)(E). Effective as of January 1, 2002, an “eligible
retirement plan” shall also mean an annuity contract described in Section 403(b)
of the Code and an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from this Plan.
Effective January 1, 2008, an “eligible retirement plan” shall also mean a Roth
IRA described in Code Section 408A(b) that will accept the distributee’s
eligible rollover distribution. The definition of eligible retirement plan shall
also apply in the case of a distribution to a surviving spouse, to a spouse or
former spouse who is the alternate payee under a qualified domestic relation
order, as defined in Section 414(p) of the Code and, effective January 1, 2007,
to any Beneficiary (other than a surviving spouse) who is a designated
beneficiary within the meaning of Code Section 401(a)(9)(E), except that with
respect to any eligible rollover distribution to the surviving spouse that
occurs before January 1, 2002 or to a Beneficiary (other than a surviving
spouse) who is a distributee under this Section 11.9 that occurs on or after
January 1, 2007, an “eligible retirement plan” shall mean only an individual
retirement account or individual retirement annuity established for the purposes
of receiving such distribution.

 

ARTICLE 12

 

THE RETIREMENT SAVINGS TRUST

Section 12.1         Establishment of Trust. All of the funds of the Plan shall
be held as a separate trust or trusts comprised of the Investment Funds and such
other funds and accounts as shall be appropriate, to be held, invested and
distributed in accordance with provisions of the Plan in providing benefits to
Participants in the Plan and their Beneficiaries.

Section 12.2          Appointment of Trustee. The Trust or Trusts shall be held
by such Trustee or Trustees as may be appointed by the Board of Directors from
time to time, under a trust instrument or instruments which shall be approved by
the Board of Directors and shall constitute part of the Plan.

ARTICLE 13

 

ADMINISTRATION

Section 13.1          Allocation of Responsibilities Among Fiduciaries. The
Fiduciaries shall have only those specific powers, duties, responsibilities and
obligations as are specifically allocated to them under the Plan and Trust. In
general, the Board of Directors shall have the sole responsibility to appoint
and remove the Trustee or Trustees and members of the Benefits Oversight
Committee; the authority to amend the Plan, in whole or in part, when such
amendment or group of related amendments would result in an estimated annual
cost to the Plan of 25% or more of the annual cost of Company contributions
(excluding Employee Contributions) under the Plan; and the authority to
terminate, in whole or in part, the Plan and Trust. The Benefits Oversight
Committee shall have the responsibilities described in Section 13.3(a). The
Benefits Committee shall have the responsibilities described in Section 13.3(b).
The Plan Administrator shall have the duties described in Section 13.2. The
Trustee shall have the sole responsibility for the administration of the Trust
and the management of the assets under the Trust, all as specifically provided
in the Trust and subject to the investment policy adopted by the Benefits
Oversight Committee. The Trustee will be responsible only for the assets of the
Trust which it manages. If an investment manager is appointed, the investment
manager will have sole responsibility for the management of the assets of the
Trust specifically allocated to it. Each Fiduciary warrants that any directions
given, information furnished or action taken by it shall be in accordance with
the provisions of the Plan and Trust, as the case may be, authorizing or
providing for such direction, information or action. Furthermore, each Fiduciary
may rely upon any such direction,

 

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information or action of another Fiduciary as being proper under the Plan and
Trust, and is not required under the Plan or Trust to inquire into the propriety
of any such direction, information or action except that each Fiduciary shall
not be relieved from liability for a breach of fiduciary responsibility by a
co-Fiduciary under Section 405(a) of Title I of ERISA. It is intended under the
Plan and Trust that each Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. The
Benefits Oversight Committee, the Benefits Committee and the Plan Administrator
may delegate their powers, duties, responsibilities and obligations to any other
individual or entity, provided that to be effective, such delegation shall be
agreed to in a written document signed by the parties involved.

Section 13.2          Plan Administrator. A Plan Administrator shall be
appointed by the Benefits Committee to serve at the Benefits Committee’s
discretion. The Plan Administrator shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to:

 

(a)

Reports and notifications to Participants;

 

 

(b)

Reports to and registration with the Internal Revenue Service;

 

 

(c)

Annual reports to the United States Department of Labor;

 

(d)

Any other actions required by ERISA or the Plan.

 

Section 13.3

Committees.

 

(a)

Benefits Oversight Committee.

(i)            Appointment. The Benefits Oversight Committee shall consist of at
least two (2) members appointed by the Board of Directors who may also be
officers, directors, employees, agents or shareholders of OGE Energy Corp.
Benefits Oversight Committee members may resign by written notice to, or may be
removed by, the Board of Directors, which shall appoint a successor to fill any
vacancy on the Benefits Oversight Committee so as to maintain at least two (2)
members. The Secretary of OGE Energy Corp. shall advise the Trustee in writing
of the names of the members of the Benefits Oversight Committee and of any
changes that may occur in its membership from time to time.

(ii)           Specific Powers and Duties. The Benefits Oversight Committee
shall be responsible for appointing and removing the members of the Benefits
Committee and any investment manager, reviewing the performance of the Trustee
and recommending to the Board of Directors the appointment, retention or
termination of the Trustee. In addition, the Benefits Oversight Committee shall
establish an investment policy which shall be communicated to the Trustee and
any investment manager. The Benefits Oversight Committee shall have the power to
amend the Plan without the approval of the Board of Directors for the following
reasons:

(A)          Additions, deletions, or changes necessary or advisable to comply
with the law; or

 

(B)

Non-substantive administrative changes; or

(C)          Changes, or groups of related changes, which result in an estimated
annual cost to the Plan of less than 25% of the annual cost of Company
contributions (excluding Employee Contributions) to the Plan.

The Benefits Oversight Committee shall have such powers as may be necessary to
discharge its duties hereunder and shall provide the Board of Directors with a
report of its actions on an annual basis.

 

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(b)

Benefits Committee.

(i)            Members of the Benefits Oversight Committee may also serve as
members of the Benefits Committee. The Benefits Committee shall consist of at
least five (5) members and not more than nine (9) members appointed by the
Benefits Oversight Committee. The Benefits Oversight Committee will designate
one member as chairman. The Benefits Committee members will appoint a Secretary
who does not have to be a member of the Benefits Committee. The Benefits
Committee members may resign by written notice to, or may be removed by, the
Benefits Oversight Committee, which shall appoint a successor to fill any
vacancy on the Benefits Committee so as to maintain at least five (5) members.
The Secretary of OGE Energy Corp. shall advise the Trustee in writing of the
names of the members of the Benefits Committee and of any changes which may
occur in its membership from time to time.

(ii)           Specific Powers and Duties. To the extent not delegated to the
Plan Administrator, the Benefits Committee shall have the sole responsibility
for the administration of the Plan, as well as such powers as may be necessary
to discharge its duties hereunder, including, but not limited to, the following:

(A)          The sole and discretionary authority to construe and interpret the
Plan, make factual findings in connection with the administration of the Plan,
decide all questions of eligibility and determine the amount, manner and time of
payment of any benefits hereunder;

(B)          To prescribe procedures to be followed by Participants and
Beneficiaries filing applications for benefits;

(C)          To cause to be prepared and to cause the Plan Administrator to
distribute, in such manner as the Benefits Committee determines to be
appropriate, information explaining the Plan and Trust;

(D)          To receive from any Participating Employer and from Participants,
either directly or through the Plan Administrator, such information as shall be
necessary for the proper administration of the Plan and Trust;

(E)           To furnish to OGE Energy Corp. upon request such annual or other
reports with respect to the administration of the Plan as are reasonable and
appropriate;

(F)           To receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, receipts and disbursements, and
assets of the Trust;

(G)          To appoint or employ individuals to assist in the administration of
the Plan and any other agents (corporate or individual) as it deems advisable,
including legal counsel and such clerical, medical, accounting, auditing,
actuarial and other services as it may require in carrying out the provisions of
the Plan; provided, however, that no agent except an investment manager or
fiduciary named in the Plan shall be appointed or employed in a position that
would require or permit him or her: (1) to exercise discretionary authority or
control over the acquisition, disposition or management of Trust assets; (2) to
render investment advice for a fee or other compensation; or (3) to exercise
discretionary authority or responsibility for Plan administration;

(H)          With respect to the OGE Energy Corp. Common Stock Fund, the sole
authority and responsibility for the following duties:

(I)            To impose any limitation or restriction on the investment of
Participant Accounts in the OGE Energy Corp. Common Stock Fund;

 

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(II)          To direct the sale or other disposition of all or any portion of
the Company Stock held in the OGE Energy Corp. Common Stock Fund;

(III)         To direct the reinvestment of the proceeds from any sale or other
disposition of Company Stock in short-term cash equivalent investments in the
OGE Energy Corp. Common Stock Fund, until the Participants redirect the
investment of such proceeds;

(IV)         To instruct the Trustee with respect to the foregoing matters; and

(V) To communicate with Participants from time to time; and

 

(I)

To discharge all other duties set forth herein.

In exercising the powers set forth in Section 13.3(b)(ii)(H) above, the Benefits
Committee will take into account OGE Energy Corp.’s statement of intent set
forth in Section 8.1(a) to the fullest extent permitted by ERISA. In addition,
the Benefits Committee shall evaluate the prudence of maintaining the OGE Energy
Corp. Common Stock Fund not on the basis of the risk associated with the OGE
Energy Corp. Common Stock Fund standing alone but in light of the availability
of the other investment options under the Plan and the ability of Participants
to construct a diversified portfolio of investments consistent with their
individual desired level of risk and return.

(c)           Limitation on Powers. The Benefits Committee shall have no power
to add to, subtract from or modify any of the terms of the Plan, to change or
add to any benefits provided by the Plan, or to waive or fail to apply any
requirements for eligibility under the Plan.

(d)           Conflicts of Interest. No member of the Benefits Committee or the
Benefits Oversight Committee shall participate in any action on matters
involving solely his or her own rights or benefits as a Participant under the
Plan. Any such matters shall instead be determined by the other members of the
Benefits Committee or the Benefits Oversight Committee. If, in any case in which
any Benefits Oversight Committee member or Benefits Committee member is so
disqualified to act, the remaining members cannot agree or if there is only one
individual member of such committee, the Board of Directors of the Company will
appoint a temporary substitute member to exercise all of the powers of the
disqualified member concerning the matter in which the disqualified member is
not qualified to act. The Benefits Oversight Committee, the Benefits Committee
and any individual member of both committees shall be fully protected when
acting in a prudent manner and relying in good faith upon the advice of the
following professional consultants or advisors employed by the Company, the
Benefits Oversight Committee, or the Benefits Committee: any attorney insofar as
legal matters are concerned, any certified public accountant insofar as
accounting matters are concerned and any enrolled actuary insofar as actuarial
matters are concerned.

(e)           Trustee’s Directions. The Benefits Committee shall direct the
Trustee concerning disbursements which shall be made out of the Trust pursuant
to the provisions of the Plan and Trust. Any direction by the Benefits Committee
to the Trustee shall be in writing and may be signed by any member of the
Benefits Committee or any party authorized by the Benefits Committee.

(f)           Committee Procedures. Both the Benefits Oversight Committee and
the Benefits Committee may act at a meeting or by writing without a meeting, by
the vote or assent of a majority of its respective members. The Benefits
Oversight Committee and the Benefits Committee may adopt such bylaws and rules
as they deem desirable for the conduct of their affairs and the administration
of the Plan. 

(g)           Committee Records. Both the Benefits Oversight Committee and the
Benefits Committee shall keep a record of all of their meetings and shall keep
all such books of account, records and other data as may be necessary or
desirable in their judgment for the administration of the Plan. The

 

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Benefits Oversight Committee and the Benefits Committee shall keep on file, in
such form as each deems convenient and proper, all reports of the Trust received
from the Trustee.

(h)           Compensation; Reimbursement. Members of either the Benefits
Oversight Committee or the Benefits Committee shall not receive compensation for
their services as such members, but OGE Energy Corp. shall reimburse them for
any necessary expenses incurred in the discharge of their duties.

(i)            Certain Indemnification. The current or former Plan Administrator
and current and former members of the Board of Directors, the Benefits Oversight
Committee and the Benefits Committee shall be indemnified by OGE Energy Corp.
for all liability, joint or several, for their acts and omissions and for the
acts and omissions of their agents and other Fiduciaries in the administration
and operation of the Plan. The current and former Plan Administrator and current
and former members of the Board of Directors, the Benefits Oversight Committee
and the Benefits Committee shall also be indemnified by OGE Energy Corp. against
all costs and expenses reasonably incurred by them in connection with the
defense of any action, suit or proceeding in which they may be made party
defendants by reason of their being or having been Plan Administrator, members
of the Board of Directors, the Benefits Oversight Committee or the Benefits
Committee, whether or not then serving as such, including the cost of reasonable
settlements (other than amounts paid to OGE Energy Corp.) made to avoid costs of
litigation and payment of any judgment or decree entered in such action, suit or
proceeding. OGE Energy Corp. shall not, however, indemnify the Plan
Administrator or any member of the Board of Directors, the Benefits Oversight
Committee or the Benefits Committee with respect to any act finally adjudicated
to have been caused by the willful misconduct of such individuals; or with
respect to the cost of any settlement unless the settlement has been approved by
a court of competent jurisdiction. The right of indemnification shall not be
exclusive of any other right to which the Plan Administrator or member of the
Board of Directors, the Benefits Oversight Committee or the Benefits Committee
may be legally entitled and it shall inure to the benefit of the duly appointed
legal representatives of such individual.

(j)            Dissenting Members. A dissenting member of either the Benefits
Oversight Committee or the Benefits Committee who, within a reasonable time
after he or she has knowledge of any action or failure to act by the Benefits
Oversight Committee or the Benefits Committee, respectively, registers his or
her dissent in writing delivered to the Benefits Oversight Committee or the
Benefits Committee shall not be responsible for any such action or failure to
act.

Section 13.4         Information from Participant. The Benefits Committee may
require a Participant to complete and file with the Benefits Committee an
application for benefits and all other forms approved by the Benefits Committee,
and to furnish all pertinent information requested by such Benefits Committee.
The Benefits Committee may rely upon all such information so furnished to it,
including the Participant’s current mailing address.

Section 13.5         Notification of Participant’s Address. E ach Participant
and Beneficiary entitled to benefits under the Plan must file with the Benefits
Committee, in writing, his or her post office address and each change of post
office address. Any communication, statement or notice addressed to such person
at his or her latest post office address as filed with the Benefits Committee
shall, on deposit in the United States mail with postage prepaid, be binding
upon such person for all purposes of the Plan and the Benefits Committee shall
not be obliged to search for, or to ascertain the whereabouts of, any such
person.

Section 13.6          Claims and Appeal Procedure. A Participant, former
Participant, or Beneficiary who feels he or she is being denied any benefit or
right provided under the Plan must file a written claim with the Benefits
Committee. All such claims shall be submitted on a form provided by the Benefits
Committee which shall be signed by the claimant and shall be considered filed on
the date the claim is received by the Benefits Committee.

(a)           Upon the receipt of such a claim and in the event the claim is
denied, the Benefits Committee shall, within 90 days (45 days in the case of a
claim for benefits payable by reason of Permanent Disability and filed on or
after January 1, 2002 (“disability claim”)) after its receipt of such claim,
provide such claimant a written statement which shall be delivered or mailed to
the claimant by certified or registered mail to his or her last known address,
which statement shall contain the following:

 

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(i)

the specific reason or reasons for the denial of benefits;

 

(ii)

a specific reference to the pertinent provisions of the Plan upon which the
denial is based;

 

(iii)

a description of any additional material or information necessary for the
claimant to perfect the claim, and an explanation of why the material or
information is necessary;

 

(iv)

an explanation of the Plan’s claim review procedure and the time limits
applicable for such procedure, including a statement of the claimant’s right to
bring a civil action under section 502(a) of ERISA following an adverse benefit
determination on appeal; and

 

(v)

in the case of denial of a disability claim,

 

(A)

the specific internal rule, guideline, protocol, or similar factor (if any) on
which the adverse determination was based or a statement that a copy thereof is
available to the claimant free of charge upon request; and

 

(B)

a statement explaining the scientific or clinical judgment (if any) used in
applying the terms of the Plan to the claimant’s medical circumstances or a
statement that such explanation will be provided free of charge to the claimant;

provided, however, in the event that special circumstances require an extension
of time for processing the claim (other than a disability claim), the Benefits
Committee shall provide such claimant with such written statement described
above not later than 180 days after receipt of the claimant’s claim, but, in
such event, the Benefits Committee shall furnish the claimant, within ninety
(90) days after its receipt of such claim, written notification of the extension
explaining the circumstances requiring such extension and the date that it is
anticipated that such written statement will be furnished.

In the case of a disability claim, the 45-day period provided for above may be
extended by the Benefits Committee for up to 30 days (and an additional period
of up to 30 days), provided the Benefits Committee:

 

(i)

determines that such an extension is necessary due to matters beyond the control
of the Plan,

 

(ii)

notifies the claimant, before the expiration of the initial 45-day period or the
additional 30-day period, as the case may be, of the circumstances requiring the
extension of time and the date by which the Plan expects to render a decision;

 

(iii)

includes in the notice of the extension an explanation of (A) the standards on
which entitlement to a benefit is based, (B) the unresolved issues that prevent
a decision on the claim, and (C) the additional information needed to resolve
those issues; and

 

(iv)

provides the claimant at least 45 days within which to provide the additional
information described in (iii)(C) above.

In the event that a period of time is extended due to a claimant’s failure to
submit information necessary to decide a disability claim, the period for making
the benefit determination shall be tolled from the date on

 

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which the notification of the extension is sent to the claimant until the date
on which the claimant responds to the request for additional information.

(b)           Within 60 days (180 in the case of a disability claim) after
receipt of a notice of denial of benefits as provided above, if the claimant
disagrees with the denial of benefits, the claimant or his or her authorized
representative may request, in writing, that the Benefits Committee review his
or her claim and may request to appear before the Benefits Committee for such
review.

During the 60-day (or 180-day, if applicable) period, the claimant or his or her
authorized representative may submit written comments, documents, records and
other information relating to the claim, whether or not they were submitted with
an initial claim. In conducting its review, the Benefits Committee shall
consider any written statement or other evidence presented by the claimant or
his or her authorized representative in support of his or her claim, without
regard to whether such information was submitted or considered in the initial
benefit determination. The Benefits Committee shall give the claimant and his or
her authorized representative, upon request and at no charge, reasonable access
to, and copies of, all documents and other information relevant to the claim.

In addition, in the case of denial of a disability claim, the Benefits Committee
will (i) appoint a named Plan fiduciary who was not involved in making the
original adverse determination and who will review the claim without giving any
deference to such determination; (ii) if the adverse determination was based, in
whole or in part, on a medical judgment, provide that the named fiduciary who is
reviewing the claim on appeal will consult a health care professional who has
appropriate training and experience in the field of medicine involved in the
medical judgment and who did not consult the Plan in connection with the
original adverse determination; and (iii) provide the claimant with the name of
any medical or vocational experts with whom the Plan consulted in making its
original determination, whether or not the determination was based on such
experts’ advice.

(c)           Within 60 days (45 days in the case of a disability claim) after
receipt by the Benefits Committee of a written application for review of his or
her claim, the Benefits Committee shall notify the claimant of the decision on
review by delivery or by certified or registered mail to his or her last known
address; provided, however, in the event that special circumstances require an
extension of time for processing such application, the Benefits Committee shall
so notify the claimant of the decision not later than 120 days (90 days in the
case of a disability claim) after receipt of such application, but, in such
event, the Benefits Committee shall furnish the claimant, within 60 days (45
days in the case of a disability claim) after its receipt of such application,
written notification of the extension explaining the circumstances requiring
such extension and the date that it is anticipated that the decision on review
will be furnished.

In the event that a period of time is extended due to a claimant’s failure to
submit information necessary to make the determination on review, the period for
making the benefit determination on review shall be tolled from the date on
which the notification of the extension is sent to the claimant until the date
on which the claimant responds to the request for additional information.

The decision of the Benefits Committee or named fiduciary on review shall be in
writing and shall include:

 

(i)

the specific reasons for the decision presented in a manner calculated to be
understood by the claimant;

 

(ii)

reference to all relevant Plan provision on which the decision was based;

 

(iii)

a statement of the claimant’s right to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information relevant to the claim for benefits;

 

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(iv)

a statement of the claimant’s right to bring a civil action under section 502(a)
of ERISA; and

 

(v)

in the case of denial of a disability claim,

 

(A)

the specific internal rule, guideline, protocol, or similar factor (if any) on
which the adverse determination was based or a statement that a copy thereof is
available to the claimant free of charge upon request;

 

(B)

a statement explaining the scientific or clinical judgment (if any) used in
applying the terms of the Plan to the claimant’s medical circumstances or a
statement that such explanation will be provided free of charge to the claimant;
and

 

(C)

the following statement: “You and your Plan may have other voluntary alternative
dispute resolution options, such as mediation. One way to find out what may be
available is to contact your local U.S. Department of Labor Office.”

The decision of the Benefits Committee or named fiduciary on review shall be
final and conclusive. In performing the duties under this Section, the named
fiduciary shall have the same powers to interpret the Plan and make factual
findings with respect thereto as are granted to the Benefits Committee under
Section 13.3(b).

ARTICLE 14

 

NATURE AND CONSTRUCTION OF RIGHTS AND DUTIES

Section 14.1         Participant Elections. All Participant elections and
applications and notices under this Plan shall be made pursuant to such
procedures as the Plan Administrator requires, which may include elections by
telephonic or other electronic media.

Section 14.2         Nonalienation of Benefits. Except as required for federal
income tax withholding purposes or pursuant to a “qualified domestic relations
order” under Section 401(a)(13) of the Code, assignment of benefits under the
Plan or their pledge or encumbrance in any manner shall not be permitted or
recognized under any circumstances nor shall such benefits be subject to
attachment or other legal process for the debts (including payments for alimony
or support) of any Participant, former Participant or Beneficiary. This Section
14.2 shall not apply to any default or indebtedness to the Trust as provided in
Sections 10.5 and 10.6.

To the extent permitted under Section 401(a)(13)(C) of the Code, the Benefits
Committee may offset against the benefit to be paid to a Participant from the
Plan an amount that the Participant is ordered or required to pay to the Plan.

 

Section 14.3         Payments to Incapacitated Participant or Beneficiary. If
the Benefits Committee shall find that a Participant, former Participant or
Beneficiary is unable to care for his or her affairs because of illness or
accident, or is a minor, or has died, the Benefits Committee may direct that any
payment due him or her, unless claim therefor shall have been made by a duly
appointed legal representative, shall be paid to his or her spouse, a child, a
parent, or other blood relative or to a person with whom he or she resides, and
any such payment so made shall be in complete discharge of the liabilities of
the Plan therefor.

Section 14.4          Payment on Inability to Locate Participant or Beneficiary.
Subject to all applicable laws relating to unclaimed property, if the Benefits
Committee or Trustee mails by registered or certified mail, postage prepaid, to
the last known address of a Participant, former Participant or a Beneficiary, a
notification that he or she is entitled to a distribution hereunder, and if the
notification is returned by the United States Postal Service as being
undeliverable because the addressee cannot be located at the address indicated,
and if the Benefits Committee and

 

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Trustee have no knowledge of such Participant’s or Beneficiary’s whereabouts
within three years from the date the notification was mailed, or if within three
years from the date the notification was mailed to such Participant or
Beneficiary he or she does not respond thereto by informing the Benefits
Committee or Trustee of his or her whereabouts, then, and in either of said
events, upon the December 31 coincident with or next succeeding the third
anniversary of the mailing of such notification, the then undistributed share in
the Trust of such Participant or Beneficiary shall be paid to the person or
persons who would have been entitled to take such share in the event of the
death of the Participant or Beneficiary whose whereabouts are unknown, assuming
that such death occurred as of the December 31 coincident with or next
succeeding the third anniversary of the mailing of such notification. In the
event such alternate payment cannot be made, and subject to the applicable state
laws concerning escheat, the aggregate amount of such Participant’s Accounts
shall be held in a suspense account until the end of the next Plan Year and then
treated as a Forfeiture; provided, however, that such amount shall be reinstated
to the proper Participant’s Accounts upon a valid claim therefor by the
Participant or Beneficiary.

Section 14.5         Interest in Trust Governed by Terms of Plan. No
Participant, former Participant, Beneficiary or any other person shall have any
interest in or right under the Plan or in any part of the assets or earnings
thereof held in the Trust except as and to the extent provided in the Plan.

Section 14.6         Trust as Sole Source of Benefits. The Trust shall be the
sole source of all benefits provided for in the Plan.

Section 14.7          Uniformity of Treatment. Whenever in the administration of
the Plan action by the Board of Directors (with respect to contributions) or the
Benefits Oversight Committee or Benefits Committee (with respect to eligibility
or classification of Employees, contributions, or benefits) is required, such
action shall be uniform in nature as applied to all persons similarly situated,
and no such action shall be taken which shall discriminate in favor of Employees
who are Highly Compensated Employees.

Section 14.8          Exclusive Benefit of Participants and Beneficiaries.
Notwithstanding any provision to the contrary in the Plan, no part of the assets
of the Trust (other than such part as is required to pay taxes and expenses)
shall be used for, or diverted to, purposes other than for the exclusive benefit
of Participants and Beneficiaries; provided, however, that upon the Company’s
request a contribution which was made by it upon a mistake of fact, or
conditioned upon initial qualification of the Plan or upon the deductibility of
the contribution under Section 404 of the Code shall be returned to the Company
which made the contribution within one year after the payment of the mistaken
contribution, the denial of qualification or the disallowance of the deduction
(to the extent disallowed), whichever is applicable.

Section 14.9         No Contract of Employment. Nothing contained in the Plan
shall be construed as a contract of employment between the Company and any
Employee, or as a right of any Employee to be continued in the employment of the
Company, or as a limitation on the right of the Company to discharge its
Employees with or without cause.

Section 14.10       Form of Actions and Notices. Any action by OGE Energy Corp.
pursuant to the provisions of the Plan shall be evidenced by a resolution of the
Board of Directors certified by its secretary or assistant secretary, or by
written instrument executed by any person authorized by the Board of Directors
to take such action, and the Fiduciaries shall be fully protected in acting in
accordance with any such written instrument or resolution received by them.

Section 14.11        Partial Invalidity Not To Affect Remaining Provisions. In
case any provisions of the Plan shall be held unlawful or invalid for any
reason, the illegality or invalidity shall not affect the remaining provisions,
and the Plan shall be construed and enforced as if the unlawful or invalid
provisions had never been inserted.

Section 14.12        Recovery of Overpayments. In the event of an erroneous
payment or the payment of an amount in excess of the Plan’s obligation, the Plan
may reduce future benefits by the amount of the error or may recover the excess
directly from the person to or for whom the payment was made. This right of
recovery does not limit the Plan’s right to recover an erroneous payment in any
other manner.

 

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ARTICLE 15

 

AMENDMENT AND TERMINATION

Section 15.1          Plan and Trust Amendment. OGE Energy Corp. reserves the
right at any time and from time to time to amend the Plan and Trust in whole or
in part, and either retroactively or prospectively, by action of the Board of
Directors or of the Benefits Oversight Committee, as provided under Article 13,
through a written instrument delivered to the Trustee, the Benefits Oversight
Committee, the Benefits Committee, and each Participating Employer; provided,
however, that:

(a)           Except as expressly provided to the contrary herein, no such
amendment shall authorize or permit any part of the corpus or income of the
Trust to be used for or diverted to purposes other than for the exclusive
benefit of Participants or Beneficiaries, or deprive any of them of funds then
held for their account;

(b)           No amendment shall increase the duties or liabilities of the
Trustee without its written consent; and

(c)           Notwithstanding anything herein to the contrary, any amendment may
be made to the Plan and Trust that the Benefits Oversight Committee deems
necessary or appropriate to comply with any statute or regulation, including
requirements for qualification, exempt status and deductibility of contributions
under the Code, and such amendment shall have retroactive effect if necessary
for such purposes.

Section 15.2         Permanency of Plan. OGE Energy Corp. has established the
Plan with a bona fide intention that the Plan and Trust shall be permanent.
However, OGE Energy Corp. realizes that circumstances not now foreseen or
circumstances beyond its control may make it either impossible or inadvisable to
continue to make contributions as herein provided.

Section 15.3         Termination of Plan. The Board of Directors shall have the
power to discontinue contributions to the Trust or to terminate the Plan by
appropriate resolutions upon written notice to the Trustee. In the event of (i)
termination of the Plan, (ii) dissolution, merger, consolidation or
reorganization of OGE Energy Corp. where the successor company does not continue
the Plan in accordance with Section 16.1, (iii) partial termination with respect
to a group of Participants, or (iv) complete discontinuance of contributions
without any further action of the Company, the Company Matching Contribution
Accounts of all affected Participants shall become fully vested and
nonforfeitable, including that portion of a Participant’s Company Matching
Contribution Account which was “frozen” pursuant to Section 10.3. There shall be
no Company contributions for periods after the date the Plan terminates.
However, the Benefits Committee and the Trust shall remain in existence, and all
of the provisions of the Plan (other than the provisions relating to
contributions and Forfeitures) which, in the sole opinion of the Benefits
Committee are necessary, shall remain in full force and effect.

Section 15.4          Distribution Upon Termination. Upon termination of Plan
and Trust, after payment of all expenses (including Trustee’s fees) and
proportionate adjustments to the Participant’s Accounts, where appropriate, to
reflect such expenses, gains, losses, and allocations to the date of
termination, each Participant shall be entitled to receive any amounts then
credited to his or her Accounts, distributed as provided in Article 11;
provided, however, that the Benefits Committee and the Trustee shall not be
required to effect such distribution until written evidence of approval of such
termination and distribution has been received from the Internal Revenue
Service; and, provided further, that no distribution may be made, except as
provided in Article 11, if the Company establishes or maintains an alternative
defined contribution plan within the meaning of Code Section 401(k) and Treasury
Regulations thereunder. If such benefits do not exhaust the assets of the Trust,
any remaining assets shall be allocated among the Accounts of continuing
Participants in the proportion that the aggregate balance in their Accounts
bears to each other. Upon termination, the Benefits Committee may authorize the
payment to Participants or Beneficiaries of such amounts in cash or in kind,
with all such assets being measured at their fair market value. The Trustee
shall continue to hold, invest, administer and distribute the assets of the
Trust pursuant to the terms of the Plan until no Trust assets remain in its
hands. If a Participant dies after termination of the Plan and before all of his
or her interest in the Trust has been paid, the undistributed portion shall be
distributed to his or her Beneficiary in a lump sum.

 

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ARTICLE 16

 

SUCCESSOR COMPANY; PLAN MERGER, CONSOLIDATION OR TRANSFER OF ASSETS

Section 16.1         Continuation by Successor. In the event of the dissolution,
merger, consolidation or reorganization of OGE Energy Corp., or other
circumstances whereby a successor continues to carry on a substantial part of
its business, the successor shall have the option for 90 days thereafter to make
provision for the continuance of the Plan. In that event, such successor shall
be substituted for OGE Energy Corp. under the Plan upon filing a written
election to that effect with the Trustee. The substitution of the successor
shall constitute an assumption of Plan liabilities by the successor and the
successor shall have all of the powers, duties and responsibilities of OGE
Energy Corp. under the Plan.

Section 16.2          Merger or Consolidation of Plan. In the event of any
merger or consolidation of the Plan with, or transfer in whole or in part of the
assets and liabilities of the Trust to, any other plan of deferred compensation
maintained or to be established for the benefit of all or some of the
Participants of the Plan, the assets of the Trust applicable to such
Participants shall be transferred to the other trust only if:

(a)           Each Participant would (if the plan then terminated) receive a
benefit immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
terminated);

(b)           Resolutions of the Board of Directors of OGE Energy Corp., and of
any new or successor employer of the affected Participants, shall authorize such
transfer of assets; and in the case of the new or successor employer, its
resolutions shall include an assumption of liabilities with respect to such
Participants’ inclusion in the new or successor employer’s plan; and

 

(c)

Such other plan is qualified under Sections 401(a) and 501(a) of the Code.

Section 16.3          Transfer of Assets From Other Qualified Plans. The Board
of Directors may approve the transfer in whole or in part of the assets and
liabilities of any other plan of deferred compensation qualified under
Sections 401(a) and 501(a) of the Code into the Trust established under this
Plan, including a transfer that may cause the Plan to be deemed a transferee
plan within the meaning of Section 401(a)(11)(B)(iii) of the Code. The amounts
so transferred shall be deposited into the Trust and a fully vested and
nonforfeitable Transfer Account shall be established for each affected
Participant; provided, however, that any amount which is subject to the
“transferee plan” rules must be accounted for separately within the Transfer
Account. The separate accounting of the “transferee plan” amounts shall be made
by allocating separately to such amounts their allocable share of any gains,
losses and other applicable credits and charges on a reasonable and consistent
basis. Each Participant’s Transfer Account, if any, shall share in adjustments
made to the Trust on subsequent Valuation Dates pursuant to Article 9, but shall
not share in Company Matching Contribution allocations at any time. A
Participant may not make an in-service withdrawal from his or her Transfer
Account, but may receive a loan pursuant to Section 10.6. Notwithstanding the
foregoing, the OGE DB Rollover Account balance and Tejas Gas After-Tax Transfer
Account balance are available for an in-service withdrawal in accordance with
Section 10.4. Upon termination of employment or death, the total amount of a
Participant’s Transfer Account shall be distributed in accordance with
Articles 11 and 17 and Appendix A, if applicable.

ARTICLE 17

 

JOINT AND SURVIVOR ANNUITY REQUIREMENTS

Section 17.1          Applicability. The provisions of this Article 17 shall
apply only to amounts transferred to the Plan on or after January 1, 1985
pursuant to Section 16.3 and subject to the transferee plan rules of Section
401(a)(11)(B)(iii) of the Code (“Transferee Plan Amounts”). With respect to the
Transferee Plan Amounts (as adjusted for any subsequent earnings or losses), the
provisions of this Article 17 shall take precedence over any conflicting
provision in the Plan.

 

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Section 17.2         General Rules. Unless an optional form of benefit under
Article 11 or Appendix A, if applicable, is selected pursuant to a Qualified
Election within the 90-day period (effective on and after January 1, 2007,
within the one hundred eighty (180) day period) ending on the date that
distribution of benefits otherwise would commence, Transferee Plan Amounts shall
be paid in the form of a Qualified Joint and Survivor Annuity. In addition,
unless a form of benefit under Article 11 or Appendix A, if applicable, has been
selected within the Election Period pursuant to a Qualified Election, if a
Participant dies before benefits have commenced, the Participant’s Transferee
Plan Amount shall be applied toward the purchase of a Qualified Preretirement
Survivor Annuity for the life of the Surviving Spouse.

Notwithstanding either of the foregoing general rules, if on the date that
distribution of benefits is to commence the Participant’s vested Account balance
does not exceed $1,000 ($5,000 for distributions commencing prior to March 28,
2005 or in the case of a Qualified Preretirement Survivor Annuity), the
Transferee Plan Amount shall be immediately distributed in one lump sum payment.
If on the date that distribution of benefits is to commence the Participant’s
vested Account balance exceeds $1,000 ($5,000 for distributions commencing prior
to March 28, 2005 or in the case of a Qualified Preretirement Survivor Annuity),
the Participant (with a written consent of the Participant’s Spouse, as provided
in Section 17.3(b), if the Participant’s vested Account balance exceeds $5,000),
or the Surviving Spouse under a Qualified Preretirement Survivor Annuity, may
consent in writing to receive an immediate lump sum payment of the Transferee
Plan Amount.

 

Section 17.3          Definitions. The following terms shall have the following
meanings for purposes of this Article 17:

(a)           Election Period means the period beginning on the first day of the
Plan Year in which the Participant attains age 35 and ends on the date of the
Participant’s death. If a Participant separates from service before the first
day of the Plan Year in which he or she attains age 35, with respect to the
Transferee Plan Amounts as of the date of separation, the Election Period shall
begin on the date of separation.

(b)           Qualified Election means a waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor Annuity, as such waiver
is further described in this subsection 17.3(b). The waiver must be in writing
and must be consented to by the Participant’s Spouse. The Spouse’s consent must
be witnessed by the Plan Administrator or notary public and must acknowledge the
financial effect of the waiver. If the Qualified Election designates a
non-Spouse Beneficiary or a specific form of payment, the Spouse’s consent must
also acknowledge the non-Spouse Beneficiary, class of Beneficiaries or
contingent Beneficiaries, and the specific form of payment, if any.
Notwithstanding this consent requirement, if the Participant establishes to the
satisfaction of the Plan Administrator that such written consent cannot be
obtained because there is no Spouse, the Participant is legally separated from
the Spouse or the Spouse cannot be located, a waiver will be deemed a Qualified
Election. Any consent necessary under this provision will be valid only with
respect to the Spouse who signs the consent, or in the event of a deemed
Qualified Election, the designated Spouse. Additionally, a revocation of a prior
waiver may be made by a Participant without the consent of the Spouse at any
time before the commencement of benefits. The number of revocations shall not be
limited.

(c)           Qualified Joint and Survivor Annuity means, with respect to a
married Participant, an annuity for the life of the Participant with a survivor
annuity for the life of the Spouse which is not less than fifty percent (50%)
and not more than one hundred percent (100%) of the amount of the annuity which
is payable during the joint lives of the Participant and the Spouse and which is
the amount of benefit which can be purchased with the Participant’s Transferee
Plan Amount. With respect to an unmarried Participant, a Qualified Joint and
Survivor Annuity means an annuity for the life of the Participant.

(d)           Qualified Preretirement Survivor Annuity means an annuity, to
begin by December 31 of the calendar year immediately following the calendar
year in which the Participant died, for the life of the Surviving Spouse which
is the amount of benefit which can be purchased with the Participant’s
Transferee Plan Amount.

 

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(e)           Spouse (or Surviving Spouse) means the spouse or surviving spouse
of the Participant, provided that a former spouse will be treated as the spouse
or surviving spouse to the extent required under a “qualified domestic relations
order” as described in Section 414(p) of the Code.

ARTICLE 18

 

CONSTRUCTION

Section 18.1         In General. The Plan and the Trust forming a part thereof
shall be construed and administered according to the laws of the State of
Oklahoma to the extent such laws are not preempted by ERISA or subsequent
amendments thereto or any other laws of the United States of America.

Section 18.2         Number and Context. The singular may include the plural and
vice versa, unless the context clearly indicates to the contrary. The words
“hereof,” “herein,” and other similar compounds of the word “here” shall mean
and refer to the entire Plan, not to any particular provision or section.

ARTICLE 19

 

MULTIPLE EMPLOYER PROVISIONS

Section 19.1          Participating Employers. The Board of Directors may
authorize any other corporation or business organization which is a Company to
participate in the Plan, with participation to commence upon such date as the
Board of Directors shall determine in its discretion. Upon receiving such
authorization, said corporation or business organization shall become a
Participating Employer immediately upon causing its board of directors to adopt
a written resolution electing such participation.

Section 19.2          Plan’s Application to Each Participating Employer. It is
intended that the contribution, Forfeiture and allocation provisions of the Plan
shall apply separately to each Participating Employer, if there be more than
one, and to the Participants of each Participating Employer. In all other
respects, the Plan shall constitute a single plan for all Participating
Employers.

Section 19.3         Continuity of Employment. Except as expressly provided to
the contrary herein, the concept of “employment” shall be deemed to refer
equally to employment with any Participating Employer, so that for the purpose
of measuring Years of Service or for any other purpose under the Plan,
employment with any Participating Employer shall be deemed to be the equivalent
of employment with any other Participating Employer, and employment with any
Participating Employer may be combined with employment with any other
Participating Employer as if all employment had been with any one Participating
Employer. Regardless of the duration of service with any particular
Participating Employer in any given year or the number of Participating
Employers for whom an Employee works, an Employee will not be credited with more
than one Year of Service in any Plan Year.

Section 19.4          Instructions to Trustee. Unless OGE Energy Corp. otherwise
so states in its instructions to the Trustee, its directive to the Trustee shall
apply to the entire trust fund without distinction as to the portion thereof
contributed by any one Participating Employer.

Section 19.5          Amendment by Board of Directors. The Board of Directors
and the Benefits Oversight Committee, in accordance with the powers granted to
each pursuant to Article 13, shall have the power to amend the Plan and Trust by
written instrument delivered to the Trustee, the Benefits Oversight Committee,
the Benefits Committee, and each Participating Employer. Such amendment shall
bind all Participating Employers, except that no such amendment shall bind any
Participating Employer which, within 90 days after its receipt of notice of such
amendment from OGE Energy Corp., shall have given notice pursuant to
Section 19.6 of its termination of Plan participation.

Section 19.6         Withdrawal by Participating Employer. By instrument in
writing, duly executed and delivered to the Trustee, the Benefits Oversight
Committee and OGE Energy Corp. (if such terminating Participating Employer is
not OGE Energy Corp.), the board of directors or other governing body of any
Participating Employer

 

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shall have the right, with the consent of the Board of Directors, to amend the
Plan and Trust in such a way as to withdraw its participation in the Plan and
Trust. In such event said Participating Employer shall forthwith cease to be a
party to the Plan and Trust. OGE Energy Corp. shall thereupon determine that
portion of the trust fund which represents, with respect to those Participants
who are at such time Employees of such Participating Employer, an amount equal
to the balance of their Accounts. The Trustee, at the direction of OGE Energy
Corp., shall do one of the following: (a) set aside such assets for the
exclusive benefit of those Participants who are then Employees of such
Participating Employer; (b) deliver such assets to the trustee to be selected by
such Participating Employer; or (c) terminate the Plan and liquidate the Trust
with respect to such Participating Employer in accordance with Article 15, after
first obtaining any necessary governmental approval.

ARTICLE 20

 

SPECIAL PROVISIONS FOR TOP-HEAVY PLANS

Section 20.1          Top-Heavy Plan Definitions. The definitions relating to
Top-Heavy Plan provisions are as follows:

(a)           The term “Top-Heavy Plan” or “Top-Heavy” means the Plan or refers
to the Plan if, as of the Determination Date, the aggregate of the Accounts of
Key Employees under the Plan exceeds sixty percent (60%) of the aggregate of the
Accounts of all Employees under the Plan, as determined in accordance with the
provisions of Section 416(g) of the Code. The determination of whether the Plan
is Top-Heavy shall be made after aggregating all other tax-qualified plans of
the Company which are required to be aggregated pursuant to Section 416(g)(2) of
the Code and after aggregating any other such plan of the Company which may be
taken into account under the permissive aggregation rules of Section
416(g)(2)(A)(ii) of the Code if such permissive aggregation thereby eliminates
the Top-Heavy status of any plan within such permissive aggregation group. The
Plan is “Super Top-Heavy” if, as of the Determination Date, the Plan would meet
the test specified above for being a Top-Heavy Plan if ninety percent (90%) were
substituted for sixty percent (60%) in each place in which it appears in this
subsection 20.1(a). The plans which are required to be aggregated include (i)
all tax-qualified plans of the Company in which a Key Employee participates and
all tax-qualified plans of the Company in which a Key Employee participated
which were terminated within the five-year period ending on the Determination
Date, and (ii) all other tax-qualified plans of the Company which enable a plan
described in (i) to meet the requirements of Section 401(a)(4) or Section 410 of
the Code. The plans which are permitted to be aggregated include the plans which
are required to be aggregated plus any plan or plans of the Company which, when
considered as a group with the required aggregation group, would continue to
satisfy the requirements of Sections 401(a)(4) and 410 of the Code. For the
purposes of these Top-Heavy provisions, Employees and Key Employees shall
include only such individuals who performed any services for the Company at any
time during the five-year period (or, for Plan Years beginning on or after
January 1, 2002, the one-year period) ending on the Determination Date.

(b)           The term “Determination Date,” for purposes of determining whether
the Plan is Top-Heavy for a particular Plan Year, means the last day of the
preceding Plan Year.

(c)           For Plan Years beginning on or after January 1, 2002, the term
“Key Employee” means any Employee or former Employee (including a Beneficiary of
any such Employee or former Employee, if a Participant) who at any time during
the Plan Year is:

 

(i)

An individual who receives as annual Compensation more than $130,000 (as
adjusted under Code Section 416(i)(1) for Plan Years beginning after December
31, 2002) and who is an officer of the Company (but in no event shall more than
fifty Employees or, if less, ten percent (10%) of all Employees be taken into
account under this paragraph (i) as Key Employees);

 

(ii)

A person owning (or considered as owning within the meaning of Code Section 318)
more than five percent (5%) of the outstanding stock of the Company or

 

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stock possessing more than five percent (5%) of the total combined voting power
of all stock of the Company (a “Five Percent Owner”); or

 

(iii)

A person who receives as annual Compensation from the Company more than One
Hundred Fifty Thousand Dollars ($150,000) and who would be described in
paragraph (ii) of this subsection if “one percent (1%)” were substituted for
“five percent (5%).”

For purposes of applying Code Section 318 to the provisions of this subsection
(c), subparagraph (C) of Code Section 318(a)(2) shall be applied by substituting
“five percent (5%)” for “fifty percent (50%).” In addition, the rules of
subsections (b), (c) and (m) of Code Section 414 shall not apply for purposes of
determining ownership percentage in the Company under this subsection (c).

(d)           The term “Non-Key Employee” means any Employee (including a
Beneficiary of such Employee, if a Participant) who is not a Key Employee.

(e)           For purposes of this Section 20.1 and Section 20.2, the term
“Compensation” shall be defined pursuant to Code Section 415(c)(3) and Treasury
Regulations Section 1.415-2(d).

Section 20.2         Requirements in Plan Years in Which Plan Is Top-Heavy.
Notwithstanding anything herein to the contrary, if the Plan is Top-Heavy as
determined pursuant to Code Section 416 for any Plan Year, then the Plan shall
meet the following requirements for any such Plan Year:

(a)           Minimum Vesting Requirements. A Participant’s Vesting Percentage
under Section 10.3 in his or her Company Matching Contribution Account shall be
determined in accordance with the following schedule:

               Years of Service

Vesting Percentage

 

 

Less than Two

0%

At least Two but less than Three

20%

At least Three but less than Four

40%

At least Four but less than Five

60%

At least Five but less than Six

80%

Six or more

100%

 

In the event that the Top-Heavy Plan ceases thereafter to be Top-Heavy, each
Participant’s Vesting Percentage shall again be determined under Section 10.3,
provided that a Participant’s Vesting Percentage shall not be reduced thereby.
To the extent required by Code Section 411(a)(10) and final Regulations of the
Department of Treasury under Code Section 416, if the determination of a
Participant’s Vesting Percentage is changed from the use of Section 10.3 to the
use of this Section 20.2(a), each Participant with at least three Years of
Service may elect to continue to have his or her Vesting Percentage computed
under the formerly applied vesting schedule.

(b)           It is intended that the Company will meet the minimum contribution
requirements of Code Sections 416(c) by providing a minimum Company contribution
(including Company Matching Contributions already made on behalf of the
Participant under Article 4) for such Plan Year for each Participant who is a
Non-Key Employee (regardless of whether he or she has made Tax-Deferred
Contributions), in accordance with whichever of the following paragraphs is
applicable:

 

(i)

If the Company does not maintain a tax-qualified defined benefit pension plan,
or if the Company maintains such a pension plan in which no Participant can
participate or which is not Top-Heavy under Code Section 416(g)(1)(A)(i), the

 

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minimum contribution per Participant shall be three percent (3%) of the
Participant’s Compensation for that Plan Year.

 

(ii)

If the Company maintains a tax-qualified defined benefit pension plan in which
one or more Participants may participate, and that pension plan is Top-Heavy
under Code Section 416(g)(1)(A)(i), the minimum contribution per Participant
shall be five percent (5%) of the Participant’s Compensation for that Plan Year.

Company Matching Contributions that are used to satisfy the minimum contribution
requirements of this Section 20.2(b) shall be treated as Company Matching
Contributions for purposes of the actual contribution percentage test under
Section 6.4 and other requirements of Code Section 401(m).

The minimum Company contribution under this subsection 20.2(b), to the extent
not already credited or allocated to the appropriate Participants’ Accounts
because it is in addition to Company contributions already made on behalf of the
Participant under Article 4, shall be made to Participants’ Company Matching
Contribution Accounts. Notwithstanding anything in this subsection 20.2(b) to
the contrary, the applicable minimum contribution required under this subsection
shall in no event exceed, in terms of a percentage of Compensation, the
contribution made for the Key Employee for whom such percentage is highest for
the Plan Year after taking into account contributions or benefits under other
tax-qualified plans in the Plan’s aggregation group as provided pursuant to Code
Section 416(c)(2)(B)(ii). Furthermore, no minimum contribution will be required
under this subsection 20.2(b) (or the minimum contribution shall be reduced, as
the case may be) for a Participant for any Plan Year if the Company maintains
another tax-qualified plan under which a minimum benefit or contribution is
being accrued or made for such Plan Year in whole or in part for the Participant
in accordance with Code Section 416(c).

 

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                IN WITNESS WHEREOF, the Company has caused this amended and
restated Plan to be signed on this 13th day of December, 2006.

OGE ENERGY CORP.

 

By:

/s/ Carla D. Brockman

 

Its

Vice President – Administration /

 

Corporate Secretary

 

ATTEST:

___________________________________________

Its___________________________________________

 

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APPENDIX A

 

Special Distribution Provisions for Transfer Accounts

 

A.

Former Employees of Ozark Pipeline, Inc. or its Affiliates

Former employees of Ozark Pipeline, Inc. or its affiliates who became Employees
of the Company on August 1, 1998 and have a Transfer Account in the Plan in
which their benefits from the NGC Profit Sharing/401(k) Savings Plan were
transferred are eligible to receive such portion of their Transfer Accounts
using the methods of payment set forth in Articles 11 and 17 of the Plan or as
follows:

 

 

(1)

A single life annuity for the life of the Participant;

(2)           Installments for a term certain (with the amount of each
installment to be determined as provided in Section 11.2(b)(ii)), or in the
event of the Participant’s death before the end of such term certain, to the
Participant’s Beneficiary; provided, however, that such term certain shall not
exceed the lesser of (i) ten years or (ii) the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary. Upon the death of a Beneficiary who is receiving installment
payments under this Appendix A, the unpaid balance shall be paid as soon as
administratively feasible, in one lump sum cash payment, to the Beneficiary’s
executor or administrator or to his heirs at law if there is no administration
of such Beneficiary’s estate.

 

(3)

An annuity for the joint lives of the Participant and his Beneficiary;

(4)           An annuity for a term certain (of 5, 10, or 15 years, but not to
exceed the life expectancy of the Participant) and continuous for the life of
the Participant if he survives such term certain; or

(5)           An annuity for a term certain, as provided in subsection (2)
above, to the Participant and his Beneficiary if the Participant does not
survive such term certain.

Any annuity shall provide for monthly payments and be provided by purchase of an
annuity contract from such insurance carrier as the Benefits Committee shall
determine. Life expectancies shall be computed as provided in Section 11.2(b).

 

 

 

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