EXHIBIT 10
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
2007 EQUITY COMPENSATION PLAN FOR OUTSIDE DIRECTORS
I. PURPOSE
The purpose of this Public Service Enterprise Group Incorporated 2007
Equity Compensation 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.
It is intended that the Plan will be interpreted and administered to
prevent taxation under Section 409A of the Code. Any provision of or amendment
to this Plan that would cause any amount to be taxable under Section 409A with
respect to any individual is void and without effect. Any election by any
participant, and any administrative action by the Committee that would cause any
amount to be taxable under Section 409A with respect to any individual is void
and without effect under the Plan. In the event that a Participant fails to make
a Section 409A-compliant payment election, the Plan's default payment
provisions, as set forth in Subsection V.G and Article VIII, shall apply. It is
further intended that the Plan will be amended in accordance with present and
future guidance issued by the Treasury Department under Section 885 of the
American Jobs Creation Act of 2004.
II. DEFINITIONS
The following words and phrases shall have the meanings set forth below
unless a different meaning is required by the context:
a) ANNUAL MEETING: The Annual Meeting of Stockholders of the Company.
b) BOARD: The Board of Directors of the Company.
c) CODE: The Internal Revenue Code of 1986, as amended.
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 judgment of the Committee, renders an
Outside Director incapable of performing the duties of a member of
the Board.
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h) EFFECTIVE DATE: Upon approval by stockholders at the 2007 Annual
Meeting of Stockholders.
i) EXCHANGE ACT: The Securities and Exchange Act of 1934, as amended,
or as it may be amended from time to time.
j) NYSE: The New York Stock Exchange, Inc.
k) 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.
l) PARTICIPANT: An Outside Director who receives a Stock Unit Award
under this Plan.
m) PLAN: This Public Service Enterprise Group Incorporated 2007 Equity
Compensation Plan for Outside Directors, as it may be amended from
time to time.
n) SECURITIES ACT: The Securities Act of 1933, as amended, or as it may
be amended from time to time.
o) SERVICE: A Director's service as a member of the Board.
p) STOCK UNIT AWARD: An award, representing the right to receive shares
of Common Stock upon termination of service as an Outside Director,
subject to the provisions of Article IV hereof
q) YEAR OF SERVICE: The annual period commencing on May 1st of each
year and ending at the earlier of the succeeding April 30th or the
next Annual Meeting of Stockholders. For any person first elected a
member of the Board after May 1st of any year, his/her first Year of
Service shall commence upon his/her election as a Director and shall
end at the earlier of the succeeding April 30th or the next Annual
Meeting of Stockholders..
III. SHARES SUBJECT TO THE PLAN
200,000 shares of Common Stock are reserved to satisfy awards of Stock
Units pursuant to the terms of this Plan. Such shares may be acquired directly
from the Company or, at the discretion of the Company, purchased on the open
market by the Company or its agent.
IV. STOCK UNIT AWARDS
A. Upon the commencement of each Year of Service as a member of the
Board, each Outside Director shall be granted an award of Stock
Units in an amount as shall be established from time to time by the
Board of Directors. The date of grant shall be the first business
day of May. With respect to an Outside Director first elected
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as a director after May 1 of any year, the date of such Outside
Director's initial award grant under this Plan shall be the first
business day of the month next following the Outside Director's
initial election as a member of the Board.
B. The number of Stock Units to be awarded on any particular date of
grant shall be equal to the amount of the award grant (expressed in
dollars) divided by the closing price of the Common Stock on the
NYSE on the date of grant as provided in Section IV.A, rounded up to
the next whole share.
C. If a Participant fails to complete the Year of Service with respect
to which a Stock Unit Award has been granted, other than on account
of Disability or death, such Stock Unit Award and any earnings
thereon shall be prorated to reflect the portion of the Year of
Service actually served by the Participant.
D. No stock certificates shall be issued in connection with any Stock
Unit Award and the Stock Unit Awards shall be evidenced by
bookkeeping account in the name of the Participant maintained by the
Company. The Company shall not be required to segregate any amounts
credited to these Stock Unit Award accounts, which shall be
established merely as an accounting convenience. Amounts credited to
the Stock Unit Award accounts shall at all times remain solely the
property of the Company subject to the claims of its general
creditors and available for the Company's use for whatever purpose
desired. Stock Unit Award accounts shall be credited with dividend
equivalents at a rate equal to such dividends as may be declared by
the Company on the Common Stock. Such dividends equivalents shall
invested as additional Stock Units as of the last business day of
each quarter at a share price equal to closing price of the Common
Stock on the NYSE on the date the transaction is credited.
E. Until distribution of shares of Common Stock from the Plan, neither
a Participant nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate, alienate or convey the amounts, if
any, payable hereunder, or any part thereof, which are, and all
rights to which are expressly declared to be, unassignable and
non-transferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, be
transferable by operation of law in the event of a Participant's or
any other person's bankruptcy or insolvency.
PROVIDED, HOWEVER, THAT, in the event that a domestic relations
order of any State is received by the Plan and thereafter determined
to be a Qualified Domestic Relations Order (QDRO) within the meaning
of Code section 414(p), the portion of the Account of the
Participant to which such QDRO is directed shall be apportioned as
specified in such QDRO, valued as of the business day preceding the
date specified in such QDRO. Upon notice to the Committee that a
QDRO is being sought with respect to a Participant's Account, no
distribution shall be
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made to a Participant until such time as the status of the QDRO is
determined. The alternate payee of the Participant's Account shall
thereafter participate in the Plan in accordance with its terms,
except such person shall not have the rights or benefits provided in
Subsection IV.A If a QDRO is issued and the amount awarded the
alternate payee exceeds the value of the Participant's Account, the
amount apportioned shall be limited to the amount then in the
account. If a QDRO so provides, benefits may be paid to an alternate
payee before they would otherwise be distributable under the Plan,
and no such distribution to an alternate payee shall be treated as a
distribution to the Participant for purposes of Article V.
F. No Participant shall have any of the rights of a stockholder
(including the right to vote and to receive dividends and other
distributions) with respect to Stock Units unless and until shares
of Common Stock are actually issued in his/her name.
G. In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off or other
distribution (other than normal cash dividends) of Company assets to
shareholders, or any other change affecting the Common Stock, such
adjustments, if any, as are appropriate to reflect such change shall
be made with respect to outstanding Stock Unit Awards.
H. Upon a Change in Control of the Company all outstanding Stock Unit
Awards shall be considered as having met the requirements of Section
IV.C. For the purposes of this Plan, "Change in Control" shall mean
the occurrence of any of the following events:
a) any "person" (within the meaning of Section 13(d) of the
Exchange Act is or becomes the beneficial owner within the
meaning of Rule 13d-3 under the Exchange Act (a "Beneficial
Owner"), directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such
person any securities acquired directly from the Company or
its affiliates) representing 25% or more of the combined
voting power of the Company's then outstanding securities,
excluding any person who becomes such a Beneficial Owner in
connection with a transaction described in clause (1) of
paragraph (c) below; or
b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on December 15, 1998, constitute the Board of Directors
and any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation. relating to the election of directors of
the Company) whose appointment or election by the Board of
Directors or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors on April 17, 2007 or whose appointment,
election or nomination for election was previously so approved
or recommended: or
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c) there is consummated a merger or consolidation of the Company
or any direct or indirect wholly owned subsidiary of the
Company with any other corporation other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least 75% of the combined
voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (2) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding
securities; or
d) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least 75% of the combined voting power of the voting
securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
Notwithstanding the foregoing subparagraphs (a), (b), (c) and (d), a
"Change in Control" shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the
Common Stock of the Company immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially
all of the assets of the Company immediately following such
transaction or series of transactions.
V. DISTRIBUTIONS
A. Upon the termination of a Participant's service as an Outside
Director, the Company shall issue to the Participant certificates
for shares of Common Stock equal to the number of whole Stock Units
in his/her account without any legend or restriction of any kind in
accordance with such Participant's distribution elections hereunder.
Any remaining fractional Stock Units shall be paid in cash based
upon the closing price of the Common Stock on the NYSE on the day
prior to the date of distribution.
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B. By written notice to the Plan filed with the Company's Secretary, a
Participant may elect to have distribution of his/her Stock Unit
Award account commence: (1) on the 30th day following the date of
termination of the Participant's Service, (2) on the 15th day of
January next following the date of termination of the Participant's
Service or (3) on the 15th day of January of any calendar year
following termination of the Participant's Service, but not later
than the January following the Participant's 72nd birthday, unless
the Participant is still a Director at such time, in which case
distribution shall commence on the 30th day following the date the
Participant ceases to be a Director. Any such election, or any
change in such election (by such subsequent written notice to the
Secretary of the Company), shall apply only to future awards. In the
event no election is made as to the commencement of distribution,
such distribution shall commence on the 30th day following the date
the Participant ceases to be a Director of the Company.
C. By written notice to the Plan filed with the Company's Secretary, a
Participant may elect to receive the distribution of his/her Stock
Unit Award account in the form of (1) one lump-sum payment, or (2)
annual distributions over a period selected by the Participant of up
to ten years. In the event a lump-sum payment is made under the
Plan, the amount then standing to the Participant's credit in his/
her Stock Unit Award account shall be paid to the Participant on the
date determined under Section V.B. In the case of a distribution
over a period of years, the Company shall pay to the Participant,
commencing on the date determined under Section V.B, annual
installments from the amount then standing to his or her credit in
his or her Stock Unit Award account, including earnings credits on
the unpaid balance to the date of distribution. The amount of each
installment shall be determined by dividing the then unpaid balance,
plus earnings credits, in the Participant's Stock Unit Award account
by the number of installments remaining to be paid. If a Participant
does not make an election as to the manner of distribution of his or
her Stock Unit Award account, such distribution shall be made in the
form of a lump sum.
D. In the event of a Participant's death, the balance of the
Participant's Stock Unit Award account shall be distributed to the
Participant's Beneficiary(ies) in a lump-sum payment within 30 days
following the Participant's death A Participant may change
Beneficiary designations by filing a subsequent notice with the
Secretary of the Company. If a Participant does not make a
Beneficiary designation, or if the Beneficiary has predeceased the
Participant, such distribution shall be made as a lump-sum to
his/her estate.
E. Participants may, (i) by notice filed with the Company prior to
December 31st of any year, make changes of distribution elections on
a prospective basis; and (ii) by notice filed with the Company, make
changes of distribution elections with respect to prior deferred
compensation as long as (A) any such new distribution election is
made at least one year prior to the date that the commencement of
the distribution would otherwise have occurred and (B) the revised
commencement
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date is at least five years later than the date that the
commencement of the distribution would otherwise have occurred;
provided that such an election may not defer payment beyond the
later of the January following the Participant's 72nd birthday or
the Participant's termination of service as a director. For the
purposes of this subsection V.E, if a Participant has elected a
distribution in installments, each installment shall be deemed a
separate election.
F. Notwithstanding any other provision of the Plan, if the Board, by
vote of the Outside Directors, other than the Participant making the
claim, shall determine in its sole discretion that the time of
payment of a Participant's Stock Unit Award account should be
advanced because of protracted illness or other undue hardship, then
the Board may advance the time or times of payment (whether before
or after the date of Participant's termination of service as a
Director) of an amount or amounts needed to meet the emergency in
accordance with the requirements of Code Section 409A and the
regulations promulgated thereunder.
G. DISTRIBUTION IN CASE OF CERTAIN TAX EVENTS - If, with respect to any
Participant, the Plan fails to meet the requirements of the Code
with respect to the deferral of tax liability, the Company may
accelerate distribution from a Participant's Account amounts
sufficient to meet such Participant's resulting Federal, State,
Local and/or Foreign tax liability (including any interest and
penalties).
VI. FURTHER CONDITIONS
A. Unless the shares of Common Stock to be distributed pursuant to the
Plan have been registered with the Securities and Exchange
Commission under the Securities Act prior to issuance, the
Participant receiving such shares 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 Stock 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
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Stock Units or the distribution of any Common Stock, including, but
not limited to (i) the withholding of delivery of certificates for
shares of Common Stock until the Participant reimburses the Company
for the amount the Company is required to withhold with respect to
such taxes, (ii) the canceling 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 Participant's other compensation.
VII. ADMINISTRATION
The Plan shall be administered by the Committee, which shall establish
rules and regulations regarding the administration and operation of the Plan.
VIII. TERMINATION, MODIFICATION AND AMENDMENT
Although the Company anticipates that it will continue the Plan for an
indefinite period of time, there is no guarantee that the Company will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly,
the Company, by the Board of Directors, reserves the right to discontinue its
sponsorship of the Plan or to terminate the Plan (or both), at any time, by the
action of the Board of Directors. In general, upon the termination of the Plan,
the affected Participants shall receive payment of their benefits in accordance
with the terms of Article V. However, the Company may, in its discretion,
terminate the entire Plan and pay each Participant a single lump-sum
distribution of his or her entire Account Balance, in the event that the Company
satisfies any of the following:
(a) such distributions are made between 12 and 24 months following the
termination of the Plan, and the Company does not adopt a new plan which would
be aggregated with this Plan under IRS guidance under Code Section 409A at any
time within the five years following the Plan termination.
(b) the Plan is terminated within the 30 days preceding or the 12 months
following a Change in Control, all payments are made within 12 months of the
date of termination, and all substantially similar arrangements sponsored by the
Company are terminated as well.
(c) the Plan is terminated within 12 months of a corporate dissolution,
as defined in IRS guidance under Code Section 409A, and lump sum payments are
made in the latest of (i) the year of the termination, (ii) the year in which
amounts are no longer subject to a substantial risk of forfeiture; or (iii) the
first year in which payment is administratively practicable.
The termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under the
Plan as of the date of termination.
IX. 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 Stock Unit Awards are or may be awarded hereunder any right to remain a
member of the Board or in any way limit the
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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.
X. MISCELLANEOUS
A. The costs and expenses of administering the Plan shall be borne by
the Company and shall not be charged against any award or to any
Outside Director receiving an award.
B. This Plan and actions taken in connection herewith shall be governed
and construed in accordance with the laws of the State of New
Jersey.
C. 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.
D. 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.