EXHIBIT 10.3
CENTERPOINT ENERGY, INC.
LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE AWARD
20XX - 20XX PERFORMANCE CYCLE
Pursuant to this Award Agreement, CENTERPOINT ENERGY, INC. (the
"Company") hereby grants to [NAME] (the "Participant"), an employee of the
Company, [NUMBER] 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
Objectives over the course of the 20XX - 20XX Performance Cycle pursuant to the
Plan, and subject to the following terms and conditions:
1. RELATIONSHIP TO THE PLAN; DEFINITIONS.
This grant of 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. Except as defined herein, capitalized terms shall have the
same meanings ascribed to them under the Plan. 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. For purposes of this Award Agreement:
"20XX - 20XX PERFORMANCE CYCLE" means the period from January 1,
20XX to December 31, 20XX.
"ACHIEVEMENT PERCENTAGE" means the percentage of achievement
determined by the Committee in accordance with Section 3 that reflects the
extent to which the Company achieved the Performance Objectives during the
performance cycle applicable to this Award Agreement.
"DISABILITY" means a physical or mental impairment of sufficient
severity such that the Participant is both eligible for and in receipt of
benefits under the long-term disability provisions of the Company's
benefit plans.
"EMPLOYMENT" means employment with the Company or any of its
Subsidiaries.
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"PERFORMANCE OBJECTIVES" means the standards established by the
Committee to determine whether and to what extent the Participant's right
to Performance Shares shall vest, which are attached hereto and made a
part hereof for all purposes.
"PERFORMANCE SHARES" means the shares of Common Stock potentially
deliverable to Participant pursuant to this Award Agreement.
"RETIREMENT" means termination of Employment on or after attainment
of age 55 and with at least five years of service with the Company.
"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 20XX - 20XX Performance Cycle if the
Company attains an Achievement Percentage of 100%.
"VESTED PERFORMANCE SHARES" means the shares of Common Stock awarded
to Participant following Participant's satisfaction of the vesting
provisions of Section 4 and, if applicable, the determination by the
Committee of the extent to which the Company has achieved the Performance
Objectives for the 20XX - 20XX Performance Cycle pursuant to Section 3.
2. ESTABLISHMENT OF RESTRICTED 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.
3. AWARD OPPORTUNITY. The Performance Objectives established for the
20XX - 20XX Performance Cycle are attached hereto and made a part hereof for all
purposes. Except as otherwise provided in Sections 4 and 5, the number of
Performance Shares awarded to Participant shall be the product of the number of
Target Performance Shares and a percentage (the "Achievement Percentage") that
is based upon the Committee's determination of whether and to what extent the
Company achieves the Performance Objectives during the 20XX - 20XX Performance
Cycle.
As soon as practicable after the close of the 20XX - 20XX
Performance Cycle, the Committee shall determine the extent to which the Company
has achieved the Performance Objectives. If the Company has performed at or
above the threshold level of achievement, the Achievement Percentage shall be
between
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50% and 150%, with a target level of achievement resulting in an Achievement
Percentage of 100%. If the Company has performed below the threshold level of
achievement, the Achievement Percentage shall be 0%. In no event shall the
Achievement Percentage exceed 150%. Upon completing its determination of the
level at which the Performance Objectives have been achieved, the Committee
shall notify the Participant of the number of Vested Performance Shares that
will be issued to the Participant pursuant to Section 6.
4. VESTING OF PERFORMANCE SHARES.
(a) Unless earlier forfeited or vested in accordance with paragraph
(b) or Section 5, Participant's right to receive Performance Shares shall
vest upon Participant's receipt of written notice from the Committee, as
required by Section 3, of the level at which the Performance Objectives
established for the 20XX - 20XX Performance Cycle have been achieved. Such
notice shall be given by the Committee as soon as practical after the
close of the 20XX - 20XX Performance Cycle in accordance with the terms of
the Plan and this Award Agreement.
(b) If Participant's Employment is terminated prior to the close of
the 20XX - 20XX Performance Cycle:
(i) by the Company or any of its Subsidiaries for any reason
or due to voluntary resignation by the Participant, Participant's
right to receive Performance Shares shall be forfeited in its
entirety as of such termination.
(ii) due to death, Disability, or Retirement, Participant's
right to receive the Target Performance Shares shall vest at the
time of such termination in the same proportion as the number of
days elapsed in the 20XX - 20XX Performance Cycle as of the date of
such termination of Employment bears to the total number of days in
the 20XX - 20XX Performance Cycle and shall be delivered to
Participant as soon as possible following such termination.
Participant's right to receive additional Performance Shares shall
be forfeited at such time.
5. CASH PAYMENT UPON A CHANGE OF CONTROL. Notwithstanding anything
herein to the contrary, upon or immediately prior to the occurrence of any
Change of Control of the Company prior to the end of the 20XX - 20XX Performance
Cycle, Participant's right to receive Performance Shares, unless previously
forfeited pursuant to Section 4, shall be settled by a cash payment to
Participant equal to the product of (i) the Fair Market value per share of
Common Stock on the date immediately preceding the date on which the Change of
Control occurs and (ii) 150% of the number of Target Performance Shares. Such
cash payment shall satisfy the rights of Participant and the obligations of the
Company under this Award Agreement in full.
6. PAYMENT OF AWARD.
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(a) If Participant's right to receive Performance Shares has vested
pursuant to Section 4, a number of shares of Common Stock equal to the
number of Vested Performance Shares shall be registered in the name of the
Participant and certificates representing such Common Stock shall be
delivered to the Participant as soon as practical after the date upon
which the Participant's right to such shares vested according to the
provisions of Section 4. The Company shall have the right to withhold
applicable taxes from any such payment of Vested Performance Shares or
from other compensation payable to the Participant at the time of such
vesting and delivery pursuant to Section 11 of the Plan.
(b) Upon delivery of the Vested Performance Shares pursuant to
paragraph (a), above, Participant shall also be entitled to receive a cash
payment equal to the sum of all dividends, if any, announced or paid on
the Vested Performance Shares after the commencement of the 20XX - 20XX
Performance Cycle but prior to the date the Vested Performance Shares are
delivered to the Participant.
7. NOTICES. For purposes of this Award Agreement, notices to the
Company shall be deemed to have been duly given upon receipt of written notice
by the corporate secretary of the Company at 1111 Louisiana, Houston, Texas
77002, or to such other address as the Company may furnish to the Participant.
Notices to the Participant shall be deemed effectively delivered or
given upon personal, electronic, or postal delivery of written notice to the
Participant, the place of Employment of the Participant, the address on record
for the Participant at the human resources department of the Company, or such
other address as the Participant hereafter designates by written notice to the
Company.
8. SHAREHOLDER RIGHTS. The Participant shall have no rights of a
shareholder with respect to the Performance Shares, unless and until the
Participant is registered as the holder of shares of Common Stock representing
the Vested Performance Shares on the records of the Company as provided in
Section 6.
9. SUCCESSORS AND ASSIGNS. This Award Agreement shall bind and inure
to the benefit of and be enforceable by the Participant, the Company and their
respective permitted successors and assigns except as expressly prohibited
herein and in the Plan. Notwithstanding anything herein or in the Plan to the
contrary, the Performance Shares are transferable by the Participant to
Immediate Family Members, Immediate Family Members Trusts, and Immediate Family
Member Partnerships pursuant to Section 13 of the Plan.
10. NO EMPLOYMENT GUARANTEED. Nothing in this Award Agreement shall
give the Participant any rights to (or impose any obligations for) continued
Employment by the Company or any Subsidiary thereof or successor thereto, nor
shall it give such entities any rights (or impose any obligations) with respect
to continued performance of duties by the Participant.
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11. MODIFICATION OF AGREEMENT. Any modification of this Award
Agreement shall be binding only if evidenced in writing and signed by an
authorized representative of the Company.
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