Document:

Subscription Agreement

Exhibit 10.1

PRIME GLOBAL CAPITAL GROUP INCORPORATED

 

SUBSCRIPTION AGREEMENT

 

PRIME GLOBAL CAPITAL GROUP INCORPORATED, a Nevada corporation (the “Company”), has authorized capital stock consisting of 1,000,000,000 shares of Common Stock, par value US$0.001 per share (“Common Stock”).  The Company now desires to issue and sell to the undersigned (the “Subscriber”), and the Subscriber desires to purchase from the Company, the number of shares of Common Stock set forth below next to the Subscriber’s name on the signature page
hereto (such shares, the “Shares”) in connection with an offering of up to 667,780 shares of Common Stock at a purchase price of US$2.995 per share, up to an aggregate of US$2,000,000 (the “Offering”).

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

	
1.

	
Purchase.

 

	
  

	
(a)

	
Subject to the terms and conditions hereof, the Subscriber agrees to purchase from the Company, and the Company agrees to issue and sell to the Subscriber, the Shares at an aggregate purchase price equal to the aggregate amount set forth next to the Subscriber’s name on the signature page hereto (the “Funds”).  If the Funds are paid in Malaysian Ringgit (RM), the parties agree that the exchange rate to US Dollars shall be RM $3.018 to US $1, representing up to an aggregate of RM $6,036,000 (or US $2,000,000).

 

	
  

	
(b)

	
The Company has authorized the issuance and sale of the Shares subject to the terms and conditions hereof.

 

	
  

	
(c)

	
Contemporaneously with the Subscriber’s execution and delivery to the Company of an executed counterpart to this Agreement, the Subscriber shall tender the Funds to the Company by wire transfer of immediately available funds to an account or accounts specified in writing by the Company to the Subscriber.

 

2.           Delivery of Agreement.  The Subscriber hereby delivers to the Company, and the Company hereby accepts, an executed counterpart of this Subscription Agreement.

 

3.           Representations and Warranties of the Subscriber.  The Subscriber hereby represents and warrants to the Company that:

 

	
  

	
(a)

	
The Subscriber:  (i) if a natural person, represents that he or she has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and has adequate means for providing for his or her current financial needs and anticipated future needs and possible contingencies and emergencies and has no need for liquidity in the investment in the Shares; (ii) if a corporation, partnership, association, joint stock company, trust, unincorporated organization or other entity, represents that:  such entity was not formed for the specific purpose of acquiring the Shares; such entity is duly organized, validly existing and (if applicable in the
applicable jurisdiction) in good standing (or similar status under local law) under the laws of the jurisdiction of its organization; the consummation of the transactions contemplated hereby will not result in a violation of its charter or other organizational documents; such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Shares; the execution and delivery of this Agreement has been duly authorized by all necessary corporate or other action on its part; and this Agreement has been duly executed and delivered on behalf of such entity; (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of
the subscribing individual, ward, partnership, trust, estate, corporation or other entity for whom the undersigned is executing this Agreement, and such individual, ward, partnership, trust, estate, corporation or other entity has full right and power to perform his, her or its obligations pursuant to this Agreement and make an investment in the Company, and that this Agreement constitutes a legal, valid and binding obligation of such subscribing individual, ward, partnership, trust, estate, corporation or other entity; and (iv) the execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Subscriber (or, if applicable, such subscribing individual, ward, partnership, trust, estate, corporation or other entity) is a party or by which he, she or it is bound;

 

  

 

  

	
  

	
(b)

	
The Subscriber has received and reviewed this Agreement and all Exhibits hereto; it, its attorney and its accountant have had access to, and an opportunity to review, all documents and other materials requested of the Company; it and they have been given an opportunity to ask any and all questions of, and receive answers from, the Company concerning the terms and conditions of the offering and to obtain all information that it or they believe necessary or appropriate to verify the accuracy of this Agreement, all Exhibits hereto and any other documents and materials requested of the Company and to evaluate the suitability of an investment in the Shares; and, in evaluating the suitability of an investment in the Shares, it and they have not relied upon any representations or other information
(whether oral or written);

 

	
  

	
(c)

	
Assuming due execution and delivery by the Company of this Agreement, this Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity); and

 

	
  

	
(d)

	
No broker has acted on behalf of the Subscriber in connection with this Agreement, and there are no brokerage commissions, finders’ fees or commissions payable in connection herewith based on any agreement, arrangement or understanding with the Subscriber or any action taken by the Subscriber.

 

4.           Representations and Warranties for Accredited Investors.  The Subscriber hereby represents and warrants as follows:

 

	
  

	
(a)

	
The Subscriber is acquiring the Shares for investment purposes only, for its own account, and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”);

 

	
  

	
(b)

	
The Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment;

 

	
  

	
(c)

	
The Subscriber is aware that it may have to bear the economic risk of such investment for an indefinite period of time or to suffer a complete loss of its investment;

 

  

-2-

  

	
  

	
(d)

	
The Subscriber understands, acknowledges and agrees (i) that the Shares have not been registered under (and that the Company has no present intention to register the Shares under) the Securities Act or applicable state securities law and that the offering and sale of such Shares are being made in reliance on the exemption from the registration requirements provided by Section 4(2) of the Securities Act and the regulations promulgated thereby and analogous provisions of certain state securities laws or in accordance with Regulation S under the Securities Act (“Regulation S”), and (ii) that such Shares may not be sold or otherwise transferred by the Subscriber unless the Shares have been registered under the
Securities Act and applicable state securities laws or are sold or transferred in a transaction exempt therefrom;

 

	
  

	
(e)

	
The Subscriber understands that no public market now exists for any of the securities issued by the Company and that it is unlikely that a public market will ever exist for the Shares; and

 

	
  

	
(f)

	
The Subscriber is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act and has completed properly and delivered an executed copy of the questionnaire attached hereto as Exhibit A.

 

5.           Representations and Warranties For Non-U.S. Persons Only.  The Subscriber hereby represents and warrants the following:

 

	
  

	
(a)

	
The Subscriber is not a U.S. Person, as such term is defined in Regulation S, was not formed under the laws of any United States jurisdiction and was not formed for the purpose of investing in securities not registered under the Securities Act.  The term “U.S. Person” as defined in Regulation S means: (s) any natural person resident in the United States; (t) any partnership or corporation organized or incorporated under the laws of the United States; (u) any estate of which any executor or administrator is a U.S. Person; (v) any trust of which any trustee is a U.S. Person; (w) any agency or branch of a foreign entity located in the United States; (x) any non-discretionary account or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a U.S. Person; (y) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (z) any partnership or corporation if: (A) organized or incorporated under the laws of any foreign jurisdiction; and (B) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act unless it is organized or incorporated, and owned by, accredited investors (as defined in Rule 501(a) under the Securities Act) that are not natural persons, estates or trusts;

 

	
  

	
(b)

	
No offer or sale of the Shares was made to the Subscriber in the United States;

 

	
  

	
(c)

	
The Subscriber is not purchasing the Shares for the account or on behalf of any U.S. Person;

 

  

-3-

  

	
  

	
(d)

	
The Subscriber has not made any pre-arrangement to transfer the Shares to a U.S. Person or to return the Shares to the United States securities markets (which includes short sales and hedging transactions in the United States within the periods restricted under Regulation S (the “Restricted Periods”) to be covered by delivery of Shares) and is not purchasing the Shares as part of any plan or scheme to evade the registration requirements of the Securities Act;

 

	
  

	
(e)

	
The Subscriber acknowledges and understands that all offers and sales of the Shares by the Subscriber in the United States or to U.S. Persons or otherwise, whether prior to the expiration or after the expiration of the Restricted Periods, shall be made only pursuant to a registration of the Shares under the Securities Act or an exemption from registration requirements of the Securities Act.  The Subscriber also acknowledges and understands that the Company will, in order to approve removal of the restrictive legend from certificates evidencing the Shares, require from the Subscriber (i) certain written representations to indicate that the sale of the Shares was made in a transaction that complies with the provisions of Regulation S, pursuant to a registration of the Shares
under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and (ii) require a legal opinion in accordance with Section 8(a) hereof that removal of the legend is appropriate;

 

	
  

	
(f)

	
The Subscriber has not engaged in any “directed selling efforts” (as defined in Regulation S) in the United States regarding the Shares, nor has it engaged in any act intended to or that reasonably might have the effect of preconditioning the U.S. market for the resale of the Shares;

 

	
  

	
(g)

	
The Subscriber is not a “distributor” as defined in Regulation S.  The Subscriber acknowledges, understands and agrees that, if the Subscriber should be deemed to be a distributor prior to reselling the Shares to a non-U.S. Person during the Restricted Periods, the Subscriber will send a notice to each new subscriber of the Shares that such new subscriber is subject to the restrictions of Regulation S during the Restricted Periods;

 

	
  

	
(h)

	
The Subscriber is not an officer, director or “affiliate” (as that term is defined in Rule 405 under the Securities Act) of the Company or an “underwriter” or “dealer” (as such terms are defined in the federal securities laws of the United States), and the purchase of the Shares by the Subscriber is not a transaction (or part of a series of transactions) that is part of any plan or scheme to evade the registration provisions of the Securities Act.  The Subscriber understands and agrees that, if the Subscriber becomes an affiliate of the Company at any time after purchasing the Shares, every sale made by it thereafter must be made in compliance with the provisions of Rule 144 of the Securities Act
(“Rule 144”) (except for the two-year holding period requirement), including the filing of Form 144 with the U.S. Securities and Exchange Commission at the time of the sale, as required under Rule 144.  The Subscriber understands and agrees that the provisions of Rule 144, if at any time applicable to it, are separate and apart from, and independent of, any restrictions imposed by Regulation S and will apply even after the expiration of the Restricted Periods;

 

	
  

	
(i)

	
The Subscriber does not have a short position in, or other hedged position with respect to, the Shares or the shares of Common Stock of the Company and will not have a short position in, or other hedged position with respect to, such securities at any time prior to the expiration of the Restricted Periods; and

 

  

-4-

  

	
  

	
(j)

	
If at any time after the expiration of the Restricted Periods the Subscriber wishes to transfer or attempts to transfer the Shares to a U.S. Person, the Subscriber agrees to notify the Company if at such time it is an “affiliate” of the Company or is then acting as an “underwriter,” “dealer” or “distributor” as to such Shares (as such terms are defined in the federal securities laws of the United States or the regulations promulgated thereunder, including, but not limited to, Regulation S), or if such transfer is being made as part of a plan or scheme to evade the registration provisions of the Securities Act.

 

6.           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Subscriber that:

 

	
  

	
(a)

	
Organization.  The Company is duly organized and validly existing under the laws of the State of Nevada and has the corporate power and authority to own its properties and assets and to carry on its business as now conducted.  The Company is duly qualified or authorized to do business as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties or assets requires such qualification or authorization, except where the failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company.

 

	
  

	
(b)

	
Authorization of Agreement; Enforceability.  The Company has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance by the Company of this Agreement have been duly authorized by all necessary corporate action on the part of the Company.  This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Subscriber, this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

7.           Reliance.  The Subscriber acknowledges and agrees that the Company and its agents are relying on the truth and accuracy of the foregoing representations and warranties in the offering of the Shares for sale to the Subscriber without having first registered the Shares under the Securities Act.  All representations, warranties and covenants contained in this
Subscription Agreement shall survive the execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereunder.

 

8.           Restrictions on Transfer of the Shares.

 

	
  

	
(a)

	
No Transfer; Opinion of Counsel.  The Subscriber acknowledges that there are restrictions on the transferability of the Shares.  Since the Shares are not registered under the Securities Act or applicable state securities laws, the Subscriber acknowledges and agrees that it shall have no right at any time to sell, assign, pledge, hypothecate, distribute (as a dividend or otherwise), transfer or otherwise dispose of or encumber the Shares (except by will or by the laws of descent and distribution), unless the Company shall first have been provided with an opinion of counsel acceptable to the Company that such sale is exempt from such
registration under the Securities Act and any applicable state securities laws.

 

  

-5-

  

	
  

	
(b)

	
Restrictive Legends.  The Subscriber is acquiring the Shares for its own account and not with a view to their distribution within the meaning of Section 2(11) of the Securities Act.  The Subscriber consents to the placement of the following legend on the stock certificate(s) representing the Shares until such time as the Shares are eligible for sale under Rule 144(k) under the Securities Act and prior to the registration for resale thereof:

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘SECURITIES ACT’), AND MAY NOT BE OFFERED OR SOLD (I) IN THE UNITED STATES OR TO U.S. PERSONS BY OR ON BEHALF OF ANY U.S. PERSON, UNLESS (A) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN EFFECT WITH RESPECT THERETO OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION AND A WRITTEN OPINION FROM COUNSEL FOR THE ISSUER OR COUNSEL FOR THE HOLDER REASONABLY ACCEPTABLE TO THE ISSUER HAS BEEN OBTAINED TO THE EFFECT THAT NO SUCH REGISTRATION IS REQUIRED AND (II) OUTSIDE THE UNITED STATES, UNLESS IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT AND
THE PURCHASER IN SUCH TRANSACTION PROVIDES A CERTIFICATION TO THE ISSUER THAT IT IS A NON-U.S. PERSON.  EACH BENEFICIAL HOLDER, BY ACCEPTING AN INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE, AGREES THAT ANY HEDGING TRANSACTION INVOLVING SUCH SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.  TERMS IN THIS LEGEND HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

 

 “TRANSFER OF SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A SUBSCRIPTION AGREEMENT, DATED AS OF FEBRUARY 16, 2012 (THE ‘SUBSCRIPTION AGREEMENT’), TO WHICH THE CORPORATION IS PARTY.  A COPY OF THE SUBSCRIPTION AGREEMENT WILL BE FURNISHED TO ANY STOCKHOLDER UPON WRITTEN REQUEST, AND WITHOUT CHARGE, WITHIN FIVE (5) DAYS AFTER THE CORPORATION’S RECEIPT OF A WRITTEN REQUEST THEREFOR.”

 

9.            Notice to Subscriber.  Correspondence and notices to the Subscriber shall be sent to the address listed below the signature of the Subscriber on the signature page of this Agreement until such time as the Subscriber shall notify the Company, in writing, of a different address to which such correspondence and notices are to be sent.

 

10.         Miscellaneous.

 

	
  

	
(a)

	
The Subscriber agrees that this Agreement is not transferable or assignable.

 

  

-6-

  

	
  

	
(b)

	
The Subscriber agrees that, except as expressly permitted by any applicable state law, the Subscriber may not cancel, terminate or revoke this Agreement or any agreement of the Subscriber made hereunder, and this Agreement shall survive the death or legal disability of the Subscriber and shall be binding upon the Subscriber’s heirs, executors, administrators, successors and assigns.

 

	
  

	
(c)

	
This Agreement and the Exhibits hereto constitute the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties.

 

	
  

	
(d)

	
Headings are for convenience only and are not deemed to be part of this Agreement.

 

	
  

	
(e)

	
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device, pursuant to which the signature of, or on behalf of, such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes as of the date first written above.  At the request of any party hereto, all parties hereto agree to execute an original of this Agreement, as well as any facsimile,
telecopy or other reproduction hereof.

 

	
  

	
(f)

	
This Agreement and the rights and obligations of the parties hereunder shall be enforced, governed and construed in all respects in accordance with the internal substantive laws of the State of Nevada (without reference to principles of conflicts or choice of law that would cause the application of the internal laws of any other jurisdiction).

 

	
  

	
(g)

	
The Subscriber acknowledges that, if it is a resident of any state whose “blue sky laws” or other local securities laws require a restriction on transferability of securities, it will comply with such restriction requirements.

 

	
  

	
(h)

	
If any part of any provision of this Agreement or any other agreement or document given pursuant to or in connection with this Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or the remaining provisions of this Agreement.

 

11.         Confidentiality.  Except as may be required by applicable law or as otherwise agreed among the parties hereto, neither the Company nor the Subscriber nor any of their respective Affiliates (as defined below) shall at any time divulge, disclose, disseminate, announce or release any information to any person (i) concerning this Agreement or the transactions contemplated hereby,
without first obtaining the prior written consent of the other party hereto or (ii) any trade secrets or other confidential information of the other  party hereto (or its Affiliates), without first obtaining the prior written consent of such other party hereto; provided, however, that each party shall be entitled to disclose information with respect to the Subscriber’s investment in the Company on any reports such Subscriber furnishes to its investors or as otherwise required by any federal, state, local or foreign law (including common law), statute, code, ordinance, rule, regulation or other requirement or guideline.  An “Affiliate” of any specified
person shall mean any other person that directly or indirectly controls, or is under common control with, or is controlled by, such specified person.  As used in this definition, “control” (including with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

[Signature Page Follows]

 

  

-7-

  

IN WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement as of February 16, 2012.

 

 

SUBSCRIBER:

 

	
                                                               

 

	
 

 

US$2,000,000

Total Dollar Amount of Subscription

	
 

 

Not applicable

Tax Identification Number

	
 

 

 

US$ 2.995

Price Per Share

	  	  
	  	
 

 

667,780

Total Number of Shares

 

Mailing Address and Phone Number of Subscriber:

 

c/o Union Hub Technology Sdn Bhd

11-2, Jalan 26/70A,

Desa Sri Hartamas

50480 Kuala Lumpur

Malaysia

Telephone:  +6013 398 3183

 

Accepted and agreed to as of February 16, 2012:

 

PRIME GLOBAL CAPITAL GROUP INCORPORATED

By:  /s/ Liong Tat Teh

Name: Liong Tat Teh

Title:   Chief Financial Officer

  

-8-

  

Exhibit A

 

PRIME GLOBAL CAPITAL GROUP INCORPORATED

 

ACCREDITED INVESTOR QUESTIONNAIRE

In connection with that certain Subscription Agreement, dated as of February 16, 2012, by and between Weng Kung Wong (the “Subscriber”) and Prime Global Capital Group Incorporated, a Nevada corporation (the “Company”), pursuant to which the Subscriber has subscribed for, and (subject to acceptance by the Company) has agreed to purchase from the Company, 667,780 shares (collectively, the “Shares”) of common stock, with a par value of US$0.001 per share
(“Common Stock”), of the Company the undersigned represents and warrants to the Company as follows:

1. Status as “Accredited Investor”

The undersigned understands that the sale of the Shares is limited solely to “Accredited Investors”, as that term is defined under Regulation D of the Securities Act of 1933, as amended (the “Act”). Under Regulation D, individuals and entities meeting the qualifications set forth below are Accredited Investors.  By checking one of the boxes set forth below, the undersigned represents and warrants to the Company that the undersigned is an Accredited Investor by reason of the qualifications described opposite the checked box:

A. Individual Investors.

	
 ̈

	
Any natural person whose net worth, or joint net worth with that person’s spouse, at the time of the purchase exceeds US$1,000,000, excluding the value of the primary residence of such natural person or persons.

	
 ̈

	
Any natural person who had an individual income in excess of US$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of US$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

	
 ̈

	
Any executive officer or director of the Company.

B. Investor Entities.

	
 ̈

	
Any entity in which all of the equity owners are Accredited Investors.

  

-9-

  

	
 ̈

	
A corporation, partnership, business trust, limited liability company or Section 501(c)(3) organization with total assets in excess of US$5,000,000 that was not formed for the specific purpose of acquiring shares of Common Stock.

	
 ̈

	
Any trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring shares of Common Stock, whose purchase of shares of Common Stock is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment in shares of Common Stock. Note: If this qualification is selected, the representative of the trust must deliver to the Company a written summary of his or her knowledge and experience in financial and business matters on a separate form to be provided by the Company.

	
 ̈

	
Any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

	
 ̈

	
Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring shares of Common Stock, with total assets in excess of US$5,000,000.

The undersigned is a ____(Insert Type of Entity)____ meeting the foregoing description.

 

	
 ̈

	
Any bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; any insurance company as defined in Section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a
state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors.

 

 

  

-10-

  

 

The undersigned is a ____(Insert Type of Entity)____ meeting the foregoing description.

2. Certification as to Location of Residence or Principal Place of Business. The undersigned represents and warrants to the Company that the undersigned is a resident of the location listed in the address of the undersigned set forth below, or, if the undersigned is an entity, that the principal place of business of the undersigned is such address.

 

	
[Signature Block For Individuals]

	
[Signature Block For Entities]

	  	  
	  	
Not applicable

	
______________________________

	
______________________________

	
(Signature)

	
(Name of Entity)

	  	  
	  	  
	
Weng Kung Wong

	
By: ______________________________

	
(Printed Name)

	
     Name:______________________

	  	
     Title:______________________________

	  	  
	  	  
	
c/o Union Hub Technology Sdn Bhd

	  
	
11-2, Jalan 26/70A,

	
______________________________

	
(Street Address of Residence)

	
(Street Address of Principal Office)

	  	  
	  	  
	
Desa Sri Hartamas

	  
	
50480 Kuala Lumpur

	
______________________________

	
(City or Town)  (State)  (Zip Code)

	
(City or Town)  (State)  (Zip Code)

	  	  
	  	  
	
Malaysia

	
______________________________

	
(Country)

	
(Country)

	  	  
	  	  
	
+6013 398 3183

	
______________________________

	
(Daytime Telephone Number)

	
(Daytime Telephone Number)

Date: February 16, 2012

 

-11-OGE 2011 10-K - Ex. 10.28

Exhibit 10.28

OGE Energy Corp.
Form of Employment Agreement

AGREEMENT by and between OGE Energy Corp., an Oklahoma corporation, and ______________ (the "Executive"), dated as of the __ day of ___________.
WHEREAS, the Board of Directors (the "Board") of the Company (as hereinafter defined) recognizes that the possibility of a Change of Control (as hereinafter defined) exists and that the occurrence of a Change of Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its shareowners to retain the services of the Executive in the event of a Change of Control and to ensure the Executive's continued dedication and efforts in such event without undue concern for the Executive's personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the Company or an Affiliate (as hereinafter defined), as the case may be, particularly in the event of a threat or the occurrence of a Change of Control, the Company desires to enter into this Employment Agreement with the Executive to provide the Executive with certain benefits in the event the Executive's employment is terminated as a result of, or in connection with, a Change of Control.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.    Certain Definitions. (a) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs during the Change of Control Period and if the Executive's employment with the Employer (as defined in Section 1(d)) is terminated prior to the date on which the Change of Control occurs, and it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or in anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.
(b)    The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.
(c)    The "Company" shall mean OGE Energy Corp. and any successor to its business and/or assets which assumes and agrees to perform this Agreement, pursuant to Section 11 herein, by operation of law, or otherwise.
(d)    Employer" shall mean (i) in the event the Executive is an officer of the Company and not of any Affiliate (as defined in Section 1(e)) of the Company immediately prior to the Effective Date, the Company; (ii) in the event the Executive is an officer of one or more Affiliates of the Company, but not of the Company, immediately prior to the Effective Date, any such Affiliate; and (iii) in the event the Executive is an officer of the Company and one or more Affiliates of the Company immediately prior to the Effective Date, any such entity of which the Executive is an officer immediately prior to the Effective Date.
(e)    "Affiliate", for all purposes of this Agreement other than Section 5 and Section 6(e), shall mean, with respect to any Person (as defined in Section 2(a)), any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. For purposes of Sections 5 and 6(e), however, "Affiliate" shall mean any Person which is a member of the same controlled group of corporations, trades or businesses within the meaning of the Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended (the "Code"), as any other Person, provided that for purposes of Section 5 (but not for purposes of Section 6(e)) in applying Code Section 1563(a)(1), (2), and (3) in determining a controlled group of corporations under Code Section 414(b), the language "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in Code Section 1563(a)(1), (2), and (3), and in applying Treasury Reg. § 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in 

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Treasury Reg. § 1.414(c)-2.
2.    Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean:
(a)    The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other Person controlled by the Company, or (iv) any acquisition by any corporation or other Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
(b)    Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareowners, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(c)    Consummation of a reorganization, merger, share exchange or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then-outstanding shares of common stock or equity interests and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors or other controlling persons, as the case may be, of the corporation or other Person resulting from such Business Combination (including, without limitation, a corporation or other Person which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation or other Person resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation or other Person resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock or equity interests of the corporation or other Person resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation or other Person except to the extent that such ownership existed with respect to the Company prior to the Business Combination and (iii) at least a majority of the members of the board of directors or other governing body of the corporation or other Person resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(d)    Approval by the shareowners of the Company of a complete liquidation or dissolution of the Company.
3.    Employment Period.  The Executive shall remain in the employ of the Employer subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending, unless earlier terminated by the occurrence of the Executive's Date of Termination as provided in Section 5, on the third anniversary of such date (the "Employment Period").
4.    Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive performed the majority of the Executive's services immediately preceding the Effective Date or any office or location less than 50 miles from such location.
(ii)    During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Employer and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements 

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or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Employer in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Employer.
(b)    Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its Affiliates in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased.
(ii)    Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's highest bonus under the Company's or any of its Affiliates' Annual Incentive Compensation Plan, or any comparable bonus under any predecessor or successor plan of the Company or any of its Affiliates, for the last three full fiscal years ending prior to the Effective Date (annualized in the event that the Executive was not employed by the Employer for the whole of such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid during the period beginning on the first day of the first month and ending on the 15th day of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus pursuant to the terms of a plan of the Company or an Affiliate thereof permitting such deferral.
(iii)    Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its Affiliates, including, but not limited to, those specified in Exhibit A attached hereto, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its Affiliates for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its Affiliates.
(iv)    Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its Affiliates (including, without limitation, medical, prescription, dental, vision, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its Affiliates, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its Affiliates.
(v)    Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its Affiliates in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliates.
(vi)    Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its Affiliates in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliates.

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(vii)    Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its Affiliates at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its Affiliates.
(viii)    Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its Affiliates as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliates.
5.    Termination of Employment. Subject to the provisions of this Section 5, the Executive's employment shall be deemed terminated for purposes of this Agreement when the Executive incurs a "separation from service" (as such phrase is defined in Code Section 409A and the regulations promulgated thereunder) with the Employer and its Affiliates because of death, retirement or termination of employment for any other reason, including any reason specified in Section 5(a), (b) or (c) below; provided, however, that no termination shall be deemed to occur for purposes of the Agreement while the Executive continues to perform services for the Employer or its Affiliates in a capacity as an employee or as an independent contractor at a level that is more than 20% of the average level of bona fide services performed (whether as an employee or otherwise) by the Executive during the immediately preceding 36-month period (or, if employed less than 36 months, such lesser period).

(a)    Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Employer determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Employer shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Employer on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Employer or its insurers and acceptable to the Executive or the Executive's legal representative.
(b)    Cause. The Employer may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:
(i)    the willful and continued failure of the Executive to perform substantially the Executive's duties with the Employer or one of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or
(ii)    the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Employer.
For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Employer. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company (in either case, who is not the Executive) or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Employer. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.
(c)    Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i)    the assignment to the Executive of any duties inconsistent in any respect with the Executive's position 

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(including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Employer  which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(ii)    any failure by the Employer to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(iii)    the Employer's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Employer's requiring the Executive to travel on Employer business to a substantially greater extent than required immediately prior to the Effective Date;
(iv)    any purported termination by the Employer of the Executive's employment otherwise than as expressly permitted by this Agreement; or
(v)    any failure by the Employer to comply with and satisfy Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d)    Notice of Termination. Any termination by the Employer for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Employer, respectively, hereunder or preclude the Executive or the Employer, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Employer's rights hereunder.
(e)    Date of Termination. "Date of Termination" in respect of the Executive's separation from service under this Agreement means (i) if the Executive's employment is terminated by the Employer for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Employer other than for Cause or Disability, the Date of Termination shall be the date on which the Employer notifies the Executive of such termination or any later date specified therein, (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be, and (iv) if the Executive's employment is terminated by the Executive voluntarily other than for Good Reason, the Date of Termination shall be the date on which the Executive notifies the Employer of such termination or any later date specified therein.
6.    Obligations of the Company upon Termination. Subject to Section 6(e) below:
(a)    Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Employer shall terminate the Executive's employment other than for Cause, death or Disability or the Executive shall terminate employment for Good Reason, the Employment Period shall thereupon terminate and:
(i)    the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts, subject to reduction as set forth in Section 9:
A.    the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any accrued vacation pay to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and

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B.    the amount equal to the product of (1) 2.99 and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus;
(ii)    for three years after the Executive's Date of Termination, the Company shall continue benefits under the medical, prescription, vision, dental, disability, employee life, group life, accidental death and travel accident insurance plans programs to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliates and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility, and provided further, that (A) with respect to any such benefits providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code under a self-insured medical reimbursement plan (within the meaning of Code Section 105(h)), (a "Self-Insured Medical Plan"), including, without limitation, medical, prescription, vision or dental benefits, that are incurred following the period the Executive would be entitled (or would, but for this Section 6(a)(ii), be entitled) to continuation coverage under such plan under Code Section 4980B (COBRA) if the Executive had elected such coverage and paid the applicable premiums, the reimbursement of an eligible medical expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred and (B) the Executive and/or the Executive's family pays to the Company the cost, on an after-tax basis, for the premium payments (both the employee and employer portion) required for such continued coverage under any Self-Insured Medical Plan. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period;
(iii)    the Company shall, at its sole expense as incurred, provide the Executive with reasonable outplacement services the scope and provider of which shall be selected by the Executive in [his][her] sole discretion, provided that, such services must be provided and the expenses therefor incurred prior to the end of the second calendar year following the calendar year in which the Date of Termination occurs, and provided further, that the Company shall pay all reimbursements for such expenses so incurred not later than the end of the third calendar year following the calendar year in which the Date of Termination occurs;
(iv)    to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company or its Affiliates (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"); and

(v)    on or about January 31 of the year following the year in which the Date of Termination occurs and continuing on or about each January 31 thereafter until the year following the year in which the Executive's continued coverage under any Self-Insured Medical Plan pursuant to the first sentence of Section 6(a)(ii) terminates, the Company will make a payment in cash to the Executive and/or the Executive's family equal, on an after-tax basis, to the amount, if any, the Executive and/or the Executive's family paid in premium payments during the immediately preceding calendar year for continued coverage under any Self-Insured Medical Plan described in Section 6(a)(ii) exceeds the amount the Executive and/or the Executive's family would have paid if the Executive had remained in employment during such year, provided that each such cash payment by the Company pursuant to this Section 6(a)(v) shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A.

Following such termination of the Executive's employment, except as set forth in this Section 6(a) or Section 8 or 9, the Executive shall have no further rights to compensation or other benefits under this Agreement.
(b)    Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement and the Employment Period shall thereupon terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and its Affiliates to the estates and beneficiaries of peer executives of the Company and such Affiliates under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its Affiliates and their beneficiaries.

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(c)    Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement and the Employment Period shall thereupon terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term "Other Benefits" as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its Affiliates to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its Affiliates and their families.
(d)    Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement and the Employment Period shall thereupon terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) [his][her] Annual Base Salary through the Date of Termination and (y) Other Benefits, in each case to the extent theretofore unpaid. All amounts payable under clause (x) shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement and the Employment Period shall thereupon terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.
(e)    (i) Notwithstanding anything in this Section 6 or any other provision of this Agreement to the contrary, if, at the Executive's Date of Termination, stock of the Company or any Affiliate is publicly traded on an established securities market or otherwise and the Executive is a "Specified Employee" (as defined in Section 6(e)(ii)) at the Date of Termination, then the Company will defer the payment or commencement of the payment, as the case may be, of any amounts described in Section 6(a)(i)(A)(2) (but only where payable under Section 6(a), 6(c) or 6(d)), Section 6(a)(i)(B) and Section 6(a)(v) that, in any such case, otherwise become payable during the first six months following the Executive's Date of Termination, until the earlier of (A) the first day of the seventh month following the Executive's Date of Termination or (B) the Executive's death. Any payments or benefits delayed as a result of the preceding sentence shall be accumulated and paid in a lump sum, without interest, as soon as practicable but not later than five business days after the first day of the seventh month following the Executive's Date of Termination (or the Executive's earlier death). Thereafter, payments will resume in accordance with this Agreement.
(ii)    For purposes of this Agreement, a "Specified Employee" means, during the 12-month period beginning on April 1st of 2011 or on April 1st of any subsequent calendar year, an employee of the Company or its Affiliates who met the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder and without regard to Code Section 416(i)(5)) for being a "key employee" at any time during the 12-month period ending on the December 31st immediately preceding such April 1st.
7.    Nonexclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its Affiliates and for which the Executive may qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its Affiliates. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its Affiliates at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.
8.    Full Settlement. Subject to Section 9 herein, the Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its Affiliates may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment (except as provided in Section 6(a)(ii) where the medical and other welfare benefits described therein shall be secondary to those provided under another employer-provided plan). Notwithstanding any other provision of this Agreement, the Company agrees to pay as incurred but in no event later than the end of the calendar year following the calendar year in which incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur during the period beginning on the date of this Agreement and ending ten (10) years after the Date of Termination as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

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9.    Certain Reduction of Payments by the Company.
(a)    For purposes of this Section 9, (i) a Payment shall mean any payment or distribution in the nature of compensation to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise, including, without limitation, any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing; (ii) Change of Control Payment shall mean a Payment paid or payable pursuant to this Agreement (disregarding this Section); (iii) Net After Tax Receipt shall mean the Present Value of a Payment net of all taxes imposed on the Executive with respect thereto under Sections 1 and 4999 of the Code, determined by applying the highest marginal rate under Section 1 of the Code which applied to the Executive's taxable income for the immediately preceding taxable year; (iv) "Present Value" shall mean such value determined in accordance with Section 280G(d)(4) of the Code; and (v) "Reduced Amount" shall mean the greatest aggregate amount of Change of Control Payments which (A) is less than the sum of all Change of Control Payments and (B) results in aggregate Net After Tax Receipts which are equal to or greater than the Net After Tax Receipts which would result if the Executive were paid the sum of all Change of Control Payments.
(b)    Anything in this Agreement to the contrary notwithstanding, in the event Ernst & Young or such other certified public accounting firm designated by the Executive (the "Accounting Firm") shall determine that receipt of all Payments would subject the Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Change of Control Payments would meet the definition of a "Reduced Amount." If the Accounting Firm determines that there is a Reduced Amount, the aggregate Change of Control Payments shall be reduced to such Reduced Amount as provided below. All fees payable to the Accounting Firm shall be paid solely by the Company.

(c)    If Accounting Firm determines that aggregate Change of Control Payments should be reduced to the Reduced Amount, the Change of Control Payments shall be reduced or eliminated, as determined by Accounting Firm, in the following order so that after such reduction or elimination the Present Value of the aggregate Change of Control Payments equals the Reduced Amount: (i) cash payments, (ii) outplacement services and (iii) welfare benefits. The Company shall promptly give the Executive notice of the Accounting Firm's determinations and a copy of the detailed calculations thereof showing that aggregate Change of Control Payments should be reduced to the Reduced Amount and the required reduction or elimination of such Change of Control Payments in the order set forth above so that after reduction or elimination the Present Value of the aggregate Change of Control Payments equals the Reduced Amount. All determinations made by Accounting Firm under this Section shall be binding upon the Company and the Executive and shall be made within 60 days of the Executive's Date of Termination. As promptly as practicable following such determination but in no event later than the last day of the calendar year in which the Date of Termination occurs or, if later and the Executive is not permitted, directly or indirectly, to designate the year of payment, by the 15th day of the third calendar month following the Date of Termination, the Company shall pay to or distribute for the benefit of the Executive such Change of Control Payments as are then due to the Executive under this Agreement and shall promptly pay to or distribute for the benefit of the Executive in the future such Change of Control Payments as become due to the Executive under this Agreement.

(d)    While it is the intention of the Company to reduce the amounts payable or distributable to the Executive hereunder only if the aggregate Net After Tax Receipts to the Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of the Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of the Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or the Executive which Accounting Firm believes has a high probability of success determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of the Executive shall be treated for all purposes as a loan to the Executive which the Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by an Executive to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code, but in no event shall the Underpayment be paid later than the end of the first calendar year in which the calculation of the Underpayment is administratively practicable.
10.    Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its Affiliates, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its Affiliates and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). 

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After termination of the Executive's employment with the Employer, the Executive shall not, without the prior written consent of the Employer or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Employer and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.
11.    Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b)    This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)     The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
12.    Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b)    All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
	
		
	If to the Executive:
	___________________________

	 
	OGE Energy Corp.

	 
	321 North Harvey

	 
	Oklahoma City, Oklahoma 73102

	 
	 

	 
	 

	If to the Company
	OGE Energy Corp.

	or the Employer:
	321 North Harvey

	 
	Oklahoma City, Oklahoma 73102

	 
	Attention: General Counsel

 
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c)    The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d)    The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e)    The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(f)    The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company or any of its Affiliates, the employment of the Executive by the Company or any of its Affiliates is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment may be terminated by either the Executive or the Company or any of its Affiliates, as the case may be, at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. From and after the date hereof, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

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(g)    To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with the provisions of Section 409A of the Code. This Agreement shall be administered in a manner consistent with this intent. Notwithstanding any provision of the Plan to the contrary, a distribution to be made as of a specified date in Section 6 shall be treated for purposes of Code Section 409A as made on the date specified if the distribution is made at such date specified or a later date in the same calendar year or, if later, and provided the Executive is not permitted, directly or indirectly, to designate the year in which the distribution is made, by the 15th day of the third calendar month following the specified date. In addition, to the extent any provision of this Agreement, is or will be in violation of Section 409A of the Code and the regulations thereunder, this Agreement shall be amended in such manner as the parties may agree such that the Agreement is or remains in compliance with Section 409A of the Code and the foregoing intent of the parties is maintained to the maximum extent possible. Each party is responsible for reviewing this Agreement for compliance with Section 409A.
(h)    The provisions of this Agreement are not intended, and should not be construed to be legal, business or tax advice. The Company, the Executive and any other party having any interest herein are hereby informed that the U.S. federal tax advice contained in this document (if any) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Code or (ii) promoting, marketing or recommending to any party any transaction or matter addressed herein.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, OGE Energy Corp. has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. 
	
		
	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	OGE ENERGY CORP.

	 
	 

	By
	        

	   
	                               Peter B. Delaney

	 
	Chairman of the Board, President and Chief Executive Officer

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Exhibit A
Incentive, Savings and Retirement Plans
 
	
		
	1
	Annual Incentive Compensation Plan

	 
	 

	2
	Stock Incentive Plan

	 
	 

	3
	OGE Energy Corp. Employees' Stock Ownership and Retirement Savings Plan

	 
	 

	4
	OGE Energy Corp. Deferred Compensation Plan

	 
	 

	5
	Retirement Plan

	 
	 

	6
	Restoration of Retirement Income Plan

 
 
 

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