Document:

2014 OGE 10-K - Ex. 10.34

Exhibit 10.34

OGE Energy Corp. 
Executive Officer Compensation 
Executive Compensation
In December 2014, the Compensation Committee of the OGE Energy Corp. board of directors took actions setting executives' salaries, target amount of annual bonus awards and target amounts of long-term compensation awards for 2015.  Executive compensation was set by the Compensation Committee after consideration of, among other things, individual performance and market-based data on compensation for executives with similar duties.  Payouts of 2015 annual bonus targets and long-term awards are dependent on achievement of specified corporate goals established by the Compensation Committee and no officer is assured of any payout.
Salary
The Compensation Committee established the base salaries for its senior executive group.  The salaries for 2015 for the OGE Energy officers who are expected to be named in the Summary Compensation Table in OGE Energy's 2015 Proxy Statement are as follows:
	
		
	Executive Officer
	2015 Base Salary

	Peter B. Delaney, Chairman and Chief Executive Officer
	$1,100,000

	Sean Trauschke, President
	$625,313

	Stephen E. Merrill, Chief Financial Officer
	$400,000

	Jean C. Leger, Jr., Vice President - Utility Operations of OG&E
	$350,303

	Paul Renfrow, Vice President - Public Affairs and Corporate Administration
	$338,000

	Scott Forbes, Controller and Chief Accounting Officer
	$289,275

In addition, the 2015 salary for Mr. Keith Mitchell, the Chief Operating Officer of OG&E, was established at an annual level of $470,000.
Establishment of 2015 Annual Incentive Awards
As stated above, at its December 2014 meeting, the Compensation Committee approved the target amount of annual incentive awards, expressed as a percentage of salary, with the officer having the ability, depending upon achievement of the 2015 corporate goals to receive from 0 percent to 150 percent of such targeted amount.  For 2015, the targeted amount ranged from 40 percent to 100 percent of the approved 2015 base salary for the executive officers in the above table.
Establishment of Long-Term Awards
At its December 2014 meeting, the Compensation Committee also approved the level of target long-term incentive awards, expressed as a percentage of salary, with the officer having the ability to receive from 0 percent to 200 percent of such targeted amount at the end of a three-year performance period depending upon achievement of the corporate goals.  For 2015, the targeted amount ranged from 90 percent to 285 percent  of the approved 2015 base salary for the executive officers in the above table.
Other Benefits
Retirement Benefits.  A significant amount of the Company's employees hired before December 1, 2009, including executive officers, are eligible to participate in the Company's Pension Plan and certain employees are eligible to participate in the Company's Restoration of Retirement Income Plan that enables participants, including executive officers, to receive the same benefits that they would have received under the Company's Pension Plan in the absence of limitations imposed by the Federal tax laws.  In addition, the supplemental executive retirement plan, which was adopted in 1993, provides a supplemental executive retirement plan in order to attract and retain lateral hires or other executives designated by the Compensation Committee of the Company's Board of Directors who may not otherwise qualify for a sufficient level of benefits under the Company's Pension Plan and Restoration of Retirement Income Plan. Mr. Delaney is the only employee, including executive officers, who participates in the supplemental executive retirement plan. Mr. Delaney's participation in the supplemental executive retirement plan was the result of arms-length bargaining between Mr. Delaney and the Company at the time of his hire in April 2002 as Executive Vice President of the Company.

Almost all employees of the Company, including executive officers, also are eligible to participate in our 401(k) Plan.  Participants may contribute each pay period any whole percentage between two percent and 19 percent of their compensation, as defined in the 401(k) Plan, for that pay period. Participants who have attained age 50 before the close of a year are allowed to make additional contributions referred to as "Catch-Up Contributions," subject to certain limitations of the Code. Participants may designate, at their discretion, all or any portion of their contributions as: (i) a before-tax contribution under Section 401(k) of the Code subject to the limitations thereof; or (ii) a contribution made on an after-tax basis. The 401(k) Plan also includes an eligible automatic contribution arrangement and provides for a qualified default investment alternative consistent with the U.S. Department of Labor regulations. Participants may elect, in accordance with the 401(k) Plan procedures, to have his or her future salary deferral rate to be automatically increased annually on a date and in an amount as specified by the participant in such election. For employees hired or rehired on or after December 1, 2009, the Company contributes to the 401(k) Plan, on behalf of each participant, 200 percent of the participant's contributions up to five percent of compensation. 

No Company contributions are made with respect to a participant's Catch-Up Contributions, rollover contributions, or with respect to a participant's contributions based on overtime payments, pay-in-lieu of overtime for exempt personnel, special lump-sum recognition awards and lump-sum merit awards included in compensation for determining the amount of participant contributions.  Once made, the Company's contribution may be directed to any available investment option in the 401(k) Plan.  The Company match contributions vest over a three-year period. After two years of service, participants become 20 percent vested in their Company contribution account and become fully vested on completing three years of service. In addition, participants fully vest when they are eligible for normal or early retirement under the Pension Plan, in the event of their termination due to death or permanent disability or upon attainment of age 65 while employed by the Company or its affiliates.

The Company provides a nonqualified deferred compensation plan which is intended to be an unfunded plan.  The plan's primary purpose is to provide a tax-deferred capital accumulation vehicle for a select group of management, highly compensated employees and non-employee members of the Board of Directors of the Company and to supplement such employees' 401(k) Plan contributions as well as offering this plan to be competitive in the marketplace. Eligible employees who enroll in the plan have the following deferral options: (i) eligible employees may elect to defer up to a maximum of 70 percent of base salary and 100 percent of annual bonus awards or (ii) eligible employees may elect a deferral percentage of base salary and bonus awards based on the deferral percentage elected for a year under the 401(k) Plan with such deferrals to start when maximum deferrals to the qualified 401(k) Plan have been made because of limitations in that plan.  Eligible directors who enroll in the plan may elect to defer up to a maximum of 100 percent of directors' meeting fees and annual retainers.

The Company matches employee (but not non-employee director) deferrals to make up for any match lost in the 401(k) Plan because of deferrals to the deferred compensation plan, and to allow for a match that would have been made under the 401(k) Plan on that portion of either the first six percent of total compensation or the first five percent of total compensation, depending on prior participant elections, deferred that exceeds the limits allowed in the 401(k) Plan. Matching credits vest based on years of service, with full vesting after three years or, if earlier, on retirement, disability, death, a change in control of the Company or termination of the plan. 

Deferrals, plus any Company match, are credited to a recordkeeping account in the participant's name. Earnings on the deferrals are indexed to the assumed investment funds selected by the participant. In 2014, those investment options included a Company Common Stock fund, whose value was determined based on the stock price of the Company's Common Stock.
Normally, payments under the deferred compensation plan begin within one year after retirement. For these purposes, normal retirement age is 65 and the minimum age to qualify for early retirement is age 55 with at least five years of service. Benefits will be paid, at the election of the participant, either in a lump sum or a stream of annual payments for up to 15 years, or a combination thereof. Participants whose employment terminates before they qualify for retirement will receive their vested account balance in one lump sum following termination as provided in the plan. Participants also will be entitled to pre- and post-retirement survivor benefits. If the participant dies while in employment before retirement, his or her beneficiary will receive a payment of the account balance plus a supplemental survivor benefit equal to two times the total amount of base salary and bonuses deferred under the plan.  If the participant dies following retirement, his or her beneficiary will continue to receive the remaining vested account balance. Additionally, eligible surviving spouses will be entitled to a lifetime survivor annuity payable annually. The amount of the annuity is based on 50 percent of the participant's account balance at retirement, the spouse's age and actuarial assumptions established by the Company's Benefits Committee.
At any time prior to retirement, a participant may withdraw all or part of amounts attributable to his or her vested account balance under the deferred compensation plan at December 31, 2004, subject to a penalty of 10 percent of the amount withdrawn. 

In addition, at the time of the initial deferral election, a participant may elect to receive one or more in-service distributions on specified dates without penalty. Hardship withdrawals, without penalty, of amounts attributable to a participant's vested account balance as of December 31, 2004 may also be permitted at the discretion of the Company's Benefits Committee.
Perquisites. The Company also offers executive officers a limited amount of perquisites. These include payment of social membership dues at dining and country clubs for certain executive officers, an annual physical exam for all executive officers, a relocation program and, in the case of Mr. Delaney, use of a Company car. In reviewing the perquisites and the benefits under the supplemental executive retirement plan, 401(k) Plan, Deferred Compensation Plan, Pension Plan and Restoration of Retirement Income Plan, the Compensation Committee sought in 2014 to provide participants with benefits at least commensurate with those offered by other utilities of comparable size.
Change-of-Control Provisions and Employment Agreements.  None of the Company's executive officers has an employment agreement with the Company. Each of the executive officers has a change of control agreement that becomes effective upon a change of control.  If an executive officer's employment is terminated by the Company "without cause" following a change of control, the executive officer is entitled to the following payments: (i) all accrued and unpaid compensation and a prorated annual bonus and (ii) a severance payment equal to 2.99 times the sum of such officer's (a) annual base salary and (b) highest recent annual bonus.  The change of control agreements are considered to be double trigger agreements because payment will only be made following a change of control and termination of employment. The 2.99 times multiple for change-of-control payments was selected because at the time it was considered standard. Although many companies also include provisions for tax gross-up payments to cover any excise taxes on excess parachute payments, the Company's Board of Directors decided not to include this additional benefit in the Company's agreements. Instead, under the Company's agreements if the excise tax would be imposed, the change-of-control payments will be reduced to a point where no excise tax would be payable, if such reduction would result in a greater after-tax payment.

In addition, pursuant to the terms of the Company's incentive compensation plans, upon a change of control, all stock options and restricted stock will vest immediately and, for a 60-day period following the change of control, executive officers may surrender their options and receive in return a cash payment equal to the excess of the change of control price (as defined) over the exercise price; all performance units will vest and be paid out immediately in cash as if the applicable performance goals had been satisfied at target levels; and any annual incentive award outstanding for the year in which the participant's termination occurs for any reason, other than cause, within 24 months after the change of control will be paid in cash at target level on a prorated basis.2014 OGE 10-K - Ex. 10.53

Exhibit 10.53

OGE ENERGY CORP.
FORM OF PERFORMANCE UNIT AGREEMENT
UNDER THE 2013 STOCK INCENTIVE PLAN
OGE Energy Corp. (the "Company") hereby awards, at target, to __________ (the "Participant") __ Performance Units pursuant to the OGE Energy Corp. 2013 Stock Incentive Plan (the "Plan"), the definitions and provisions of which are incorporated herein by reference.
The specific terms and conditions of the award are set forth hereinafter.
		
	1.
	Performance Units and Award Cycle.  Each Performance Unit represents and is equal to the value of one share of Company Common Stock.  Subject to the provisions of the Plan, the Performance Units awarded to the Participant may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during the award cycle established with respect thereto beginning on __________ and ending on __________ (the "Award Cycle").

		
	2.
	Performance Goal Condition.  The Performance Units are contingently awarded subject to the condition that the number of Performance Units, if any, earned by the Participant upon the expiration of the Award Cycle is dependent (in the manner hereinafter set forth) on the performance of the Company's total shareholder return relative to the total shareholder return of all of the companies (the "S&P Companies") comprising the Standard and Poor's 1500 Utilities Index as of __________ and __________ (or their successors from a merger or other combination with another company listed in such Index, but excluding any company subject to a Business Combination, as hereinafter defined on __________).  Total shareholder return ("TSR") for any company, including the Company, shall include both price appreciation (depreciation) and cash dividends, shall be calculated in the same manner that Standard and Poor’s calculated total return as of __________ and shall be measured by the company's total return that shareholders receive over the Award Cycle by investment at the first day of the Award Cycle.

The number of Performance Units earned is dependent on the performance ranking of the Company's total shareholder return for the Award Cycle, as set forth below (expressed in terms of the Company's position among the S&P Companies when ranked by total shareholder return for the Award Cycle):
	
		
	COMPANY TSR PERCENTILE RANKING VS. S&P COMPANIES
	PERCENT OF TARGET PERFORMANCE UNITS EARNED

	__ percentile
	200%

	__ percentile
	175%

	__ percentile
	150%

	__ percentile
	125%

	__ percentile
	100%

	__ percentile
	75%

	__ percentile
	50%

	__ percentile
	25%

	Below __ percentile
	0%

Performance Units earned for performance between the percentiles shown above will be determined by straight-line interpolation; provided, that, in all cases, the number of Performance Units which the Participant earns shall be a whole number (disregarding any fraction).
Any Performance Units awarded hereunder that the Participant does not earn at the end of the Award Cycle pursuant to the foregoing schedule shall be forfeited.  

The provisions of this Section 2 shall not affect in any way any forfeiture under Section 4 below or Section 8(b) of the Plan or any provision regarding the earning of Performance Units at the 100% target level under Section 9 of the Plan upon the occurrence of a Change of Control.
For purposes of determining whether any of the S&P Companies is subject to a Business Combination on __________, a company shall be deemed subject to a Business Combination on __________, if such company is: (i) the subject of a tender offer or exchange offer by a third party seeking to acquire more than 20% of the outstanding voting securities of such company or (ii) a party to a merger, consolidation, share exchange or reorganization agreement or an agreement providing for the sale or disposition of all or substantially all of its assets.
		
	3.
	Payout.  Subject to Section 9 of the Plan, as soon as practicable following the end of the Award Cycle, the Committee shall evaluate the actual performance of the Performance Goal set forth in Section 2 hereof, shall certify in writing the extent to which such Performance Goal and other material terms of this award have been satisfied and shall determine the number, if any, of Performance Units that have been earned (the "Earned Performance Units").  The Committee shall then cause to be issued to the Participant (or, in the event of the Participant's death, to the Participant's beneficiary under the Plan) no later than __________:  (i) a certificate for shares of Common Stock equal in number to the Earned Performance Units (disregarding any fraction) plus a cash payment equal to the amount of dividends that would have been declared during the Award Cycle on such number of shares of Common Stock being issued pursuant to this Section 3.

		
	4.
	Forfeiture.  All Performance Unit awards are subject to the terms and conditions of the Plan relating to Performance Units.  If the Participant incurs a Termination of Employment for any reason on or before the end of the Award Cycle, all rights to or in respect of Performance Units awarded hereunder shall be forfeited except as provided in Section 8(b)(iii) or Section 9(a)(iii) of the Plan.

		
	5.
	Acceptance of Award.  By execution of this Agreement, the Participant accepts the award, acknowledges receipt of a copy of the Plan, and represents that the Participant is familiar with the terms and provisions thereof and agrees to be bound thereby.  Participant further agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee with respect to any questions arising under the Plan, including any calculation of, or in connection with, the total shareholder return of the Company or any other company for the Award Cycle.

		
	6.
	Taxes and Other Matter.

(a)    By execution of this Agreement, the Participant agrees to pay all withholding and other taxes payable by the Participant with respect to Performance Units earned under this Agreement at such times and in such manner as the Company may request, and the Participant further agrees to comply with all Federal and State securities laws.
(b)    The Participant may elect, subject to approval of the Board of Directors or a committee composed of two or more non-employee directors within the meaning of Rule 16b-3(b)(3) of the Securities Exchange Act of 1934 or any successor provision thereto, to satisfy Participant’s minimum tax withholding requirements under Federal, State and local laws and regulations thereunder, in whole or in part, by having the Company withhold shares having a fair market value equal to all or a portion of the amount so required to be withheld.  The value of the shares to be withheld is to be based upon the same price of the shares that is utilized to determine the amount of withholding tax that the Participant owes.  All elections under this Section 6(b) shall be (i) irrevocable and (ii) made electronically through the Common Stock Plan Services Administrator (or by such other method as the Committee determines) prior to the date on which the Committee will determine the number of Performance Units earned hereunder or such earlier date as the Company shall prescribe.
		
	7.
	Other Condition.  The award of Performance Units evidenced by this Agreement shall be subject to your acceptance of this Agreement.

	
		
	OGE ENERGY CORP.

	 
	 

	 
	 

	 
	 

	BY:
	 

	 
	Chairman of the Board and

	 
	Chief Executive Officer

	 
	 

	 
	 

	 
	 

ACCEPTED AND AGREED TO this  _________ day of _____________________________ 

__________________________________
		
	            
	         Participant

OGE ENERGY CORP.
FORM OF PERFORMANCE UNIT AGREEMENT
UNDER THE 2013 STOCK INCENTIVE PLAN

OGE Energy Corp. (the "Company") hereby awards, at target, to __________ (the "Participant") __ Performance Units pursuant to the OGE Energy Corp. 2013 Stock Incentive Plan (the "Plan"), the definitions and provisions of which are incorporated herein by reference.
The specific terms and conditions of the award are set forth hereinafter.
		
	1.
	Performance Units and Award Cycle.  Each Performance Unit represents and is equal to the value of one share of Company Common Stock.  Subject to the provisions of the Plan, the Performance Units awarded to the Participant may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during the award cycle established with respect thereto beginning on __________ and ending on __________ (the "Award Cycle").

		
	2.
	Performance Goal Condition.  The Performance Units are contingently awarded subject to the condition that the number of Performance Units, if any, earned by the Participant upon the expiration of the Award Cycle is dependent (in the manner hereinafter set forth) on the Company's Average Earnings Per Share Growth during the Award Cycle.  Average Earnings Per Share Growth shall mean the amount obtained by multiplying one-third times the percentage increase or decrease in the Company's diluted earnings per average common share for the year ended __________ as compared to the Company's diluted earnings per average common share for the year ended __________ of $___.  For purposes of the foregoing, all percentages shall be calculated to the nearest one-hundredth of one percent and the Company's earnings per share for any year shall be the consolidated diluted earnings per average common share of the Company as reported on the Company's Consolidated Statement of Income for such year.  The number of Performance Units earned for the Award Cycle shall be determined in accordance with the following chart:

	
		
	COMPANY'S AVERAGE EARNINGS PER SHARE GROWTH
	PERCENT OF TARGET PERFORMANCE UNITS EARNED

	___%
	200%

	___%
	180%

	___%
	160%

	___%
	140%

	___%
	120%

	___%
	100%

	___%
	87.5%

	___%
	75%

	___%
	62.5%

	___%
	50%

	Below ___%
	0%

Performance Units earned for performance between the percentiles shown above will be determined by straight-line interpolation; provided, that, in all cases, the number of Performance Units which the Participant earns shall be a whole number (disregarding any fraction).
Any Performance Units awarded hereunder that the Participant does not earn at the end of the Award Cycle pursuant to the foregoing chart shall be forfeited.  
The provisions of this Section 2 shall not affect in any way any forfeiture under Section 4 below or Section 8(b) of the Plan or any provision regarding the earning of Performance Units at the 100% target level under Section 9 of the Plan upon the occurrence of a Change of Control.

		
	3.
	Payout.  Subject to Section 9 of the Plan, as soon as practicable following the end of the Award Cycle, the Committee shall evaluate the actual performance of the Performance Goal set forth in Section 2 hereof, shall certify in writing the extent to which such Performance Goal and other material terms of this award have been satisfied and shall determine the number, if any, of Performance Units that have been earned (the "Earned Performance Units").  The Committee shall then cause to be issued to the Participant (or, in the event of the Participant's death, to the Participant's beneficiary under the Plan) no later than __________:  (i) a certificate for shares of Common Stock equal in number to the Earned Performance Units (disregarding any fraction) plus a cash payment equal to the amount of dividends that would have been declared during the Award Cycle on such number of shares of Common Stock being issued pursuant to this Section 3.

		
	4.
	Forfeiture.  All Performance Unit awards are subject to the terms and conditions of the Plan relating to Performance Units.  If the Participant incurs a Termination of Employment for any reason on or before the end of the Award Cycle, all rights to or in respect of Performance Units awarded hereunder shall be forfeited except as provided in Section 8(b)(iii) or Section 9(a)(iii) of the Plan.

		
	5.
	Acceptance of Award.  By execution of this Agreement, the Participant accepts the award, acknowledges receipt of a copy of the Plan, and represents that the Participant is familiar with the terms and provisions thereof and agrees to be bound thereby.  Participant further agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee with respect to any questions arising under the Plan, including any calculation of, or in connection with, earnings per share of the Company for any period.

		
	6.
	Taxes and Other Matter.

(a)    By execution of this Agreement, the Participant agrees to pay all withholding and other taxes payable by the Participant with respect to Performance Units earned under this Agreement at such times and in such manner as the Company may request, and the Participant further agrees to comply with all Federal and State securities laws.
(b)    The Participant may elect, subject to approval of the Board of Directors or a committee composed of two or more non-employee directors within the meaning of Rule 16b-3(b)(3) of the Securities Exchange Act of 1934 or any successor provision thereto, to satisfy Participant’s minimum tax withholding requirements under Federal, State and local laws and regulations thereunder, in whole or in part, by having the Company withhold shares having a fair market value equal to all or a portion of the amount so required to be withheld.  The value of the shares to be withheld is to be based upon the same price of the shares that is utilized to determine the amount of withholding tax that the Participant owes.  All elections under this Section 6(b) shall be (i) irrevocable and (ii) made electronically through the Common Stock Plan Services Administrator (or by such other method as the Committee determines) prior to the date on which the Committee will determine the number of Performance Units earned hereunder or such earlier date as the Company shall prescribe.
		
	7.
	Other Condition.  The award of Performance Units evidenced by this Agreement shall be subject to your acceptance of this Agreement.

	
		
	OGE ENERGY CORP.

	 
	 

	 
	 

	 
	 

	BY:
	 

	 
	Chairman of the Board and

	 
	Chief Executive Officer

	 
	 

	 
	 

	 
	 

ACCEPTED AND AGREED TO this  _________ day of _____________________________ 

__________________________________
		
	            
	         Participant

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