PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
STOCK PLAN FOR OUTSIDE DIRECTORS
EFFECTIVE JANUARY 1, 1996
I. PURPOSE.
The purpose of this Public Service Enterprise Group Incorporated
Stock Plan for Outside Directors is to advance the interests of the
Company and its stockholders by assisting the Company in attracting
and retaining individuals of superior talent, ability and
achievement to serve on its Board of Directors.
II. DEFINITIONS.
The following words and phrases shall have the meanings set
forth below unless a different meaning is required by the context:
(a) Adjustment Shares: New or additional or different shares
of Common Stock or other securities (other than rights or
warrants to purchase securities) received or entitled to be
received by an owner of Restricted Stock as a result of a
change in capitalization of the Company as set forth in
Article VIII hereof.
(b) Annual Meeting: The Annual Meeting of Stockholders of the
Company.
(c) Board: The Board of Directors of the Company.
(d) Committee: Those persons who are members of the Board but
who are not Outside Directors.
(e) Common Stock: The Common Stock without nominal or par
value of the Company.
(f) Company: Public Service Enterprise Group Incorporated, a
corporation organized and existing under the laws of the
State of New Jersey, or its successor or successors.
(g) Disability: Any physical or mental condition of a
permanent nature which, in sole reasonable judgement of the
Committee, renders an Outside Director incapable of
performing the duties of a member of the Board.
(h) Effective Date: January 1, 1996.
(i) Eligible Director: An Outside Director who meets the
eligibility requirements for stock awards as set forth in
Article IV hereof.
(j) Exchange Act: The Securities and Exchange Act of 1934, as
amended, or as it may be amended from time to time.
(k) NYSE: The New York Stock Exchange, Inc.
(l) Outside Director: A member of the Board on or after the
Effective Date who never has been employed by the Company
or any of its affiliates.
(m) Outside Directors' Pension Plan: The Public Service
Enterprise Group Incorporated Pension Plan for Outside
Directors Effective January 1, 1989.
(n) Plan: This Public Service Enterprise Group Incorporated
Stock Plan for Outside Directors, as it may be amended from
time to time.
(o) Restricted Stock: Shares of Common Stock subject to
restrictions awarded pursuant to Article IV hereof.
(p) Securities Act: The Securities Act of 1933, as amended, or
as it may be amended from time to time.
(q) Service: A Director's service as a member of the Board .
(r) Year of Service: The annual period commencing the day of
each Annual Meeting and ending on the day before the next
Annual Meeting. For any person first elected a member of
the Board after the date of an Annual Meeting, his first
Year of Service shall commence upon his election as a
Director and shall end on the day before the next Annual
Meeting.
III. SHARES SUBJECT TO THE PLAN.
Shares of Restricted Stock which may be awarded under the Plan
shall be purchased on the open market by the Company or its agent.
In the event that any shares of Restricted Stock shall be
forfeited, the shares so forfeited shall again be available for the
awarding of Restricted Stock under the Plan.
IV. RESTRICTED STOCK AWARDS.
A. After the Effective Date of this Plan, each Outside
Director shall be granted an award of 300 shares of
Restricted Stock upon the commencement of each Year of
Service as a member of the Board. The date of grant shall
be the first business day of the month following the Annual
Meeting or the Outside Director's first election as a
member of the Board.
B. Upon the Effective Date of this Plan, (i) each Outside
Director who shall have completed five Years of Service as
of December 31, 1995 shall be granted an award of shares of
Restricted Stock equal to the present value (assuming
commencement of payment at age 70) of what his vested
accrued benefit under the Outside Directors' Pension Plan
would have been had he terminated Service as of December
31, 1995. The actual number of shares will be determined
by dividing said Outside Directors' Pension Plan assumed
vested accrued benefit by the closing price of the Common
Stock on the NYSE on December 29, 1995 and rounding up to
the next whole share; (ii) each Outside Director who shall
not have completed five Years of Service as of December 31,
1995 shall be granted an award of shares of Restricted
Stock equal in number to 300 times the number of the years
he has been a member of the Board; all as reflected in
Schedule A to the Plan.
C. The award of shares of Restricted Stock, including the
restrictions thereon, shall be evidenced by a written
instrument in such form and upon such terms and conditions
as the Committee shall determine and as are consistent
with the following provisions of the Plan:
(i) Upon the retirement of an Outside Director as a member of
the Board at the Annual Meeting next following the
Outside Director's 70th birthday, the restrictions on the
Restricted Stock shall lapse and the Company shall issue
to the Outside Director a certificate for the shares
which have been awarded to him without any legend or
restriction of any kind and the Company shall return to
the Outside Director or destroy any and all blank stock
powers previously provided to it by such Outside
Director.
(ii) If the service as a member of the Board of an
Outside Director who is the recipient of the shares
of Restricted Stock terminates for any reason, other
than on account of Disability, before the Annual
Meeting next following said Outside Director's 70th
birthday, such Outside Director shall forfeit any
and all rights in and to the shares of Restricted
Stock; provided, however, that, the Committee may,
for good and valid business reasons, waive such
restriction as the Committee deems appropriate.
Notwithstanding the foregoing, if the Company shall
merge with or into any other corporation and not be
the surviving entity, this restriction shall be
deemed to have lapsed.
(iii) Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of
descent and distribution, for the period specified
in or in accordance with Section IV(c)(i) and except
in accordance with applicable laws and regulations.
Any attempted sale, assignment, transfer, pledge,
hypothecation or other disposition in contravention
of the foregoing shall be null and void and without
effect.
(iv) Shares of Restricted Stock will be issued in the
name of the Outside Director receiving the award,
but will be held by the Company for the account of
such Outside Director (together with a blank stock
power which such Outside Director shall execute and
deliver to the Company), subject to all of the terms
and conditions of the Plan, for the period specified
in or in accordance with Section IV(c)(i).
(v) Except as otherwise provided herein and in the instrument
evidencing the award of shares of Restricted Stock, the
Outside Director receiving same shall have all rights of
a stockholder with respect to shares of Restricted Stock
issued in his name, including the right to vote and to
receive dividends and other distributions.
(vi) If an Outside Director dies while serving as a
member of the Board, and more than six months after
the date on which the shares of Restricted Stock
were awarded to him have elapsed, the restriction
provided for in Section IV(c)(i) shall be deemed to
have lapsed immediately prior to death.
(vii) If an Outside Director, as owner of shares of
Restricted Stock, receives or shall be entitled to
receive Adjustment Shares, the certificates
representing the Adjustment Shares (together with a
blank stock power executed by such Outside Director)
shall be delivered to and held by the Company,
subject to all of the terms and conditions of the
Plan, for the period specified in or in accordance
with Section IV(c)(i). Any Adjustment Shares shall
be Restricted Stock for all purposes of the Plan,
subject to the same restrictions as the shares of
Restricted Stock to which they relate. If such
Participant shall receive rights or warrants with
respect to any shares of Restricted Stock or any
Adjustment Shares, such rights or warrants may be
held, exercised, sold or otherwise disposed of by
such Outside Director, and any shares or other
securities acquired by such Outside Director as a
result of the exercise of such rights or warrants
likewise may be held, sold, or otherwise disposed of
by such Outside Director, free and clear of any
restrictions.
V. FURTHER CONDITIONS.
A. Unless the shares of Restricted Stock to be awarded under
the Plan have been registered with the Securities and
Exchange Commission under the Securities Act prior the
issuance of the shares of Restricted Stock, the Outside
Director receiving such Restricted Stock must represent in
writing to the Company that such shares of Common Stock are
being acquired for investment purposes only and not with a
view towards the further resale or distribution thereof and
must supply to the Company such other documentation as may
be required by the Company, unless in the opinion of
counsel to the Company such representation, agreement or
documentation is not necessary to comply with the
Securities Act.
B. The Company shall not be obligated to deliver any shares of
Common Stock until they have been listed on each securities
exchange on which the shares of Common Sock may then be
listed or until there has been qualification under or
compliance with such state or federal laws, rules or
regulations as the Company may deem applicable. The
Company shall use reasonable efforts to obtain such
listing, qualification and compliance.
C. The Committee may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding
of any taxes that the Company is required by any law or
regulation of any governmental authority, whether federal,
state or local, domestic or foreign, to withhold in
connection with the award of any Restricted Stock,
including, but not limited to (i) the withholding of
delivery of certificates for shares of Common Stock until
the Outside Director reimburses the Company for the amount
the Company is required to withhold with respect to such
taxes, (ii) the cancelling of any number of shares of
Common Stock issuable in an amount sufficient to reimburse
the Company for the amount it is required to so withhold or
(iii) withholding the amount due from any such Outside
Director's other compensation.
VI. FORFEITURE OF BENEFITS.
As long as an Outside Director is receiving or is a recipient
of a Restricted Stock Award under the Plan, such Outside Director
will not directly or indirectly enter into or in any manner take
part in any business or other endeavor, as an employee, agent,
independent contractor, owner or otherwise, which in any manner
competes or conflicts with the business of the Company or is
detrimental to the best interests of the Company, unless the
Company consents thereto in writing. The failure of an Outside
Director to comply with the provisions of this Article shall result
in the forfeiture all Restricted Stock grants under the Plan.
Before any such forfeiture, the Company shall mail notice to the
Outside Director that consideration is being given to forfeiture
pursuant to this Article. On written request of the Outside
Director within sixty days following the mailing by the Company of
the notice, the Committee shall afford the Outside Director an
opportunity to demonstrate to the Committee that forfeiture would
not be justified.
VII. ADMINISTRATION.
The Plan shall be administered by the Committee, which shall
have full and final authority to interpret the provisions of the
Plan and to establish rules and regulations and otherwise make
determinations regarding the administration and operation of the
Plan. All decisions and determinations by the Committee with
respect to the Plan or awards payable thereunder shall be final and
binding upon all parties.
VIII. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event that the outstanding shares of Common Stock are
hereafter changed by reason of recapitalization, reclassification,
stock split, combination or exchange of shares of Common Stock or
the like, or by the issuance of dividends payable in shares of
Common Stock, an appropriate adjustment shall be made by the
Committee in the number of shares of Restricted Stock outstanding.
IX. TERMINATION, MODIFICATION AND AMENDMENT
A. The Board may, at any time, terminate the Plan or, from
time to time, make such modifications or amendments of the
Plan as it may deem advisable.
B. No termination, modification or amendment of the Plan may
adversely affect the rights under any outstanding shares of
Restricted Stock without the consent of the Outside
Director to whom such shares of Restricted Stock shall have
been previously awarded.
X. NOT A CONTRACT FOR CONTINUED SERVICE
Nothing contained in the Plan or in any restricted stock
agreement executed pursuant hereto shall be deemed to confer upon
any Outside Director to whom shares of Restricted Stock are or may
be awarded hereunder any right to remain a member of the Board or
in any way limit the right of the Board or the Stockholders to
terminate or fail to renominate or reelect any such Outside
Director as a member of the Board.
XI. MISCELLANEOUS
A. The costs and expenses of administering the Plan shall be
borne by the Company and shall not be charged against any
award nor to any Outside Director receiving an award.
B. Any restricted stock agreement may contain, among other
things, provisions prohibiting the Outside Director from
competing with the Company or any affiliate in a form or
forms acceptable to the Committee, in its sole discretion.
C. This Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the
State of New Jersey.
D. The captions and section numbers appearing in this Plan are
inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the
provisions of this Plan. In this Plan, words in the
singular number include the plural and in the plural
include the singular; and words of the masculine gender
include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any
gender.
E. Whenever the time for payment or performance hereunder
shall fall on a weekend or public holiday, such payment or
performance shall be deemed to be timely if made on the
next succeeding business day.