LONG-TERM INCENTIVE PLAN OF
CENTERPOINT ENERGY, INC.
PERFORMANCE SHARE AWARD
AGREEMENT
2009 — 2011 PERFORMANCE CYCLE
Pursuant
to this Award Agreement, CenterPoint Energy, Inc. (the
“Company”) hereby grants to «FIRST_NAME»
«LAST_NAME» (the “Participant”), an
employee of the Company, «PBRS» target
performance shares of Common Stock (the “Target Performance
Shares”), such number of shares being subject to adjustment
as provided in Section 14 of the Long-Term Incentive Plan of
CenterPoint Energy, Inc. (the “Plan”), conditioned upon
the Company’s achievement of the Performance Goals over the
course of the 2009 — 2011 Performance Cycle, and subject to
the following terms and conditions:
1. Relationship to the Plan. This grant of Target
Performance Shares is subject to all of the terms, conditions and
provisions of the Plan and administrative interpretations
thereunder, if any, which have been adopted by the Committee and
are in effect on the date hereof. To the extent that any provision
of this Award Agreement conflicts with the express terms of the
Plan, it is hereby acknowledged and agreed that the terms of the
Plan shall control and, if necessary, the applicable provisions of
this Award Agreement shall be hereby deemed amended so as to carry
out the purpose and intent of the Plan. References to the
Participant herein also include the heirs or other legal
representatives of the Participant.
2. Definitions. Except as defined herein, capitalized terms
shall have the same meanings ascribed to them under the Plan. For
purposes of this Award Agreement:
“Achievement Percentage” means the percentage of
achievement determined by the Committee at the end of the
Performance Cycle in accordance with Section 4 that reflects
the extent to which the Company achieved the Performance Goals
during the Performance Cycle applicable to this Award
Agreement.
“Change
in Control Closing Date” means the date a Change in
Control is consummated during the Performance Cycle.
“Disability” means that the Participant is both
eligible for and in receipt of benefits under the Company’s
long-term disability plan.
“Employment” means employment with the Company
or any of its Subsidiaries.
“Performance Cycle” means the period beginning
on January 1, 2009 and ending on December 31,
2011.
“Performance Goals” means the standards
established by the Committee to determine, in whole or in part,
whether the Target Performance Shares are earned, which are
attached hereto and made a part hereof for all purposes.
“Performance Shares” means the shares of Common
Stock potentially deliverable to the Participant pursuant to this
Award Agreement.
“Retirement” means a Separation from Service on
or after attainment of age 55 and with at least five years of
service with the Company; provided, however , that such
Separation from Service is not by the Company for Cause. For
purposes of this Award Agreement, “Cause” means the
Participant’s (a) gross negligence in the performance of
his or her duties, (b) intentional and continued failure to
perform his or her duties, (c) intentional engagement in
conduct which is materially injurious to the Company or its
Subsidiaries (monetarily or otherwise) or (d) conviction of a
felony or a misdemeanor involving moral turpitude. For this
purpose, an act or failure to act on the part of the Participant
will be deemed “intentional” only if done or omitted to
be done by the Participant not in good faith and without reasonable
belief that his or her action or omission was in the best interest
of the Company, and no act or failure to act on the part of the
Participant will be deemed “intentional” if it was due
primarily to an error in judgment or negligence.
“Section 409A” means Code Section 409A
and the Treasury regulations and guidance issued
thereunder.
“Separation from Service” means a separation
from service with the Company and all its Subsidiaries within the
meaning of Treasury Regulation § 1.409A-1(h) (or any successor
regulation).
“Target
Performance Shares” means the actual number of
Performance Shares initially granted to the Participant pursuant to
this Award Agreement, with such number of Performance Shares to be
awarded to the Participant at the close of the Performance Cycle if
the Company attains an Achievement Percentage of 100% for the
Performance Goals associated with such Target Performance
Shares.
“Vested
Performance Shares” means the shares of Common Stock
awarded to the Participant following the Participant’s
satisfaction of the vesting provisions of Section 5 and, if
applicable, the determination by the Committee of the extent to
which the Company has achieved the Performance Goals for the
Performance Cycle pursuant to Section 4.
3. Establishment of Target Performance Share Account. The
grant of Target Performance Shares pursuant to this Award Agreement
shall be implemented by a credit to a bookkeeping account
maintained by the Company evidencing the accrual in favor of the
Participant of the unfunded and unsecured right to receive shares
of Common Stock of the Company, which right shall be subject to the
terms, conditions and restrictions set forth in the Plan and to the
further terms, conditions and restrictions set forth in this Award
Agreement.
(a) The
Performance Goals established for the Performance Cycle are
attached hereto and made a part hereof for all purposes. Except as
otherwise provided in Section 5(b)(ii) and Section 6, the
number of Performance Shares awarded to the Participant shall be
the product of the number of Target Performance Shares and the
Achievement Percentage that is based upon the Committee’s
determination of whether and to what extent the Performance Goals
have been achieved during the Performance Cycle.
(b) No later than
60 days after the close of the Performance Cycle, the
Committee shall determine the extent to which each Performance Goal
has been achieved. If the Company has performed at or above the
threshold level of achievement for a Performance Goal, the
Achievement Percentage shall be between 50% and 150%, with a target
level of
-2-
achievement
resulting in an Achievement Percentage of 100%. In no event shall
the Achievement Percentage exceed 150%. The combined level of
achievement is the sum of the weighted achievements of the
Performance Goals as appro
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