What is the main reason for the changes to ONEOK's compensation plans?

The primary reason for amending and adopting new compensation plans is to ensure compliance with Section 409A of the Internal Revenue Code, which introduced new regulations for nonqualified deferred compensation arrangements.

What happens to benefits accrued under the old plans?

Participants who are already in the Supplemental Executive Retirement Plan (SERP) and the Employee Nonqualified Deferred Compensation Plan will retain their vested benefits accrued as of December 31, 2004. These benefits will be paid out according to the terms of the original plans.

Will employees be able to join the new plans if they were not part of the old ones?

The filing indicates that the '2005 SERP' and '2005 Nonqualified Deferred Compensation Plan' will be effective January 1, 2005. The exact eligibility criteria for new participants in these 2005 plans are detailed within the respective plan documents filed as exhibits, but the overarching goal is compliance with Section 409A, which governs who can participate and how.

What are the key differences between the old and new deferred compensation plans?

The core functionality of allowing employees to defer compensation remains, but the 2005 Deferred Compensation Plan includes specific provisions to comply with Section 409A. These changes affect participant elections regarding deferrals, the timing of payments and distributions, and other conforming definitions and features. The prior plan's investment options for long-term deferrals no longer include ONEOK's common stock as of May 2004.

OKE 8-K: Material Agreements

Summary

ONEOK, Inc. (OKE) filed an 8-K on December 20, 2004, reporting significant changes to its executive and employee compensation plans. The company's Board of Directors approved amendments to its Supplemental Executive Retirement Plan (SERP) and Nonqualified Deferred Compensation Plan, and adopted new 2005 versions of both plans. The key driver for these changes appears to be compliance with newly enacted Section 409A of the Internal Revenue Code concerning nonqualified deferred compensation. The Prior SERP and Prior Deferred Comp Plan will be frozen as of December 31, 2004, meaning no new participants will be admitted and no further benefits will accrue. Existing participants will retain their vested benefits, which will be paid according to the terms of the prior plans. The newly adopted 2005 SERP and 2005 Deferred Comp Plan will become effective January 1, 2005, and are designed to align with the requirements of Section 409A, impacting participant elections, payment timing, and other plan features.

Key Highlights

1ONEOK is updating its executive and employee retirement and deferred compensation plans to comply with new IRS regulations (Section 409A).
2The existing Supplemental Executive Retirement Plan (SERP) and Employee Nonqualified Deferred Compensation Plan will be frozen effective December 31, 2004.
3No new participants will be added, and no further benefits will accrue under the frozen plans.
4New '2005 SERP' and '2005 Nonqualified Deferred Compensation Plan' will take effect on January 1, 2005.
5The new plans incorporate provisions related to participant elections, payment timing, and other features to meet Section 409A requirements.
6Participants in the prior plans retain their vested benefits.
7Amendments to the 2005 SERP were also made on December 16, 2004, to ensure compliance with Section 409A.

ONEOK INC /NEW/ 8-K Report, Material Agreement (Dec 20, 2004)

Summary

Key Highlights

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