PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
COMPENSATION PLAN FOR OUTSIDE DIRECTORS
EFFECTIVE JANUARY 1, 2003
I. PURPOSE
The purpose of this Public Service Enterprise Group Incorporated
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.
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 Retainer: The amount of annual compensation paid to Outside
Directors for service as a member of the Board.
B) Board: The Board of Directors of the Company.
C) Committee: Those persons who are members of the Board but who are
not Outside Directors.
D) Common Stock: The Common Stock without nominal or par value of the
Company.
E) 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.
F) Date of Grant: The date provided for in Article IV hereof.
G) Effective Date: January 1, 2003.
H) NYSE: The New York Stock Exchange, Inc.
I) 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.
J) Plan: This Public Service Enterprise Group Incorporated Compensation
Plan for Outside Directors, as it may be amended from time to time.
K) Securities Act: The Securities Act of 1933, as amended, or as it may
be amended from time to time.
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III. SHARES SUBJECT TO THE PLAN
100,000 shares of Common Stock may be awarded 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 AWARDS
A. The compensation of each Outside Director shall be determined by the
Board from time to time in its discretion. Such compensation shall
include the Annual Retainer, meeting attendance fees and such other
amounts, as the Board shall deem to be appropriate.
B. As determined from time to time by the Board, a portion of the
amount of each Outside Director's Annual Retainer is to be paid in
cash and the remainder is to be paid in shares of Common Stock
awarded under this Plan.
C. The shares of Common Stock awarded pursuant to this Plan shall, at
the Company's discretion, be acquired directly from it or shall be
purchased on the open market by the Company or its agent. The date
of grant of such awards shall be May 1 of each year. If May 1 in any
year shall not be a day on which trading is being conducted on the
NYSE, the Date of Grant for that year shall be the next succeeding
day on which trading is being conducted on the NYSE.
D. The number of shares of Common Stock to be awarded on any particular
Date of Grant shall be determined as follows:
i) if the shares are acquired directly from the Company, the
number of shares to be awarded shall be equal to the amount of
the portion of the Annual Retainer to be paid in stock divided
by the closing price of the Common Stock on the NYSE on the
business day immediately preceding the Date of Grant, rounded
up to the next whole share; and
ii) if the shares are purchased on the open market by the Company
or its agent, the number of shares to be awarded shall be
equal to the amount of the portion of the Annual Retainer to
be paid in stock divided by the actual purchase price of the
Common Stock, rounded up to the next whole share.
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V. FURTHER CONDITIONS
A. Unless the shares of Common 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 Common Stock,
the Outside Director 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 any shares of Common 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 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 Outside Director's
other compensation.
VI. ADMINISTRATION
This 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.
VII. 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.
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B. No termination, modification or amendment of the Plan may adversely
affect the rights under any award hereunder without the consent of
the Outside Director to whom such award shall have been previously
been made.
VIII. NOT A CONTRACT FOR CONTINUED SERVICE
Nothing contained in the Plan or in any agreement executed pursuant hereto
shall be deemed to confer upon any Outside Director to whom an award has or may
be made 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.
IX. MISCELLANEOUS
A. The costs and expenses of administering the Plan and acquiring the
shares of Common Stock 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.