Exhibit 10.40
OGE ENERGY CORP.
EXECUTIVE OFFICER
COMPENSATION
Executive
Compensation
In December 2008, the Compensation
Committee (the “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 2009. Executive compensation was
set by the Committee after consideration of, among other things,
individual performance and market-based data on compensation for
executives with similar duties. Payouts of 2009 annual bonus
targets and long-term awards are dependent on achievement of
specified corporate goals that will be established by the Committee
at a subsequent meeting, and no officer is assured of any
payout.
Salary
The Committee established the base
salaries for its senior executive group. The salaries for 2009 for
the current OGE Energy officers who are expected to be named in the
Summary Compensation Table in OGE Energy’s 2009 Proxy
Statement (the “Named Executive Officers”) are as
follows:
|
Named Executive
Officer
|
2009 Base
Salary
|
|
|
|
|
Peter B. Delaney, Chairman and Chief
Executive Officer
|
$775,000
|
|
Scott Forbes, Controller, Chief
Accounting Officer and Interim Chief Financial Officer
|
$229,500
|
|
Danny P. Harris, Senior Vice
President and Chief Operating Officer
|
$510,000
|
|
E. Keith Mitchell, Senior Vice
President and Chief Operating Officer – Enogex LLC
|
$293,500
|
|
Paul L. Renfrow, Vice President,
Public Affairs
|
$228,000
|
Establishment of 2009 Annual
Incentive Awards
As stated above, at its December
2008 meeting, the 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 2009
corporate goals to be set by the Committee at a subsequent meeting,
to receive from 0 percent to 150 percent of such targeted amount.
For 2009, the targeted amount was 85 percent of salary for Mr.
Delaney and ranged from 35 percent to 70 percent of salary for the
other Named Executive Officers.
Establishment of Long-Term
Awards
At its December 2008 meeting, the
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 to be set by the
Committee at a subsequent meeting. For 2009, the targeted amount
was 225 percent of salary for Mr. Delaney and ranged from 65
percent to 170 percent for the other Named Executive
Officers.
Other Benefits
Retirement Benefits
. Virtually all of our employees,
including executive officers, are eligible to participate in our
pension plan and supplemental restoration plan that enables
participants, including executive officers, to receive the same
benefits that they would have received under our pension plan in
the absence of limitations imposed by the Federal tax laws. In
addition, a Supplemental Executive Retirement Plan (the
“SERP”), which was adopted in 1993, offers supplemental
pension benefits to specified lateral hires. Mr. Delaney is the
only executive officer who participates in the SERP. Mr.
Delaney’s participation in the SERP 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 tax-qualified defined contribution savings plan (the
“Retirement Savings Plan”). Under the Retirement
Savings Plan, participants may contribute between two percent and
19 percent of their compensation. 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 Internal
Revenue Code subject to the limitations thereof; or (ii) a
contribution made on an after-tax basis. In addition, participants
age 50 or older
may make as a before-tax contribution certain
“catch-up” contributions as permitted under the
Internal Revenue Code. The Company will match (other than the
“catch-up contributions”), depending upon the
participant’s years of service and date of employment, 50
percent, 75 percent or 100 percent of the first six percent of
compensation contributed. Participants’ contributions are
fully vested and non-forfeitable. 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 addi
