LONG-TERM INCENTIVE PLAN OF CENTERPOINT ENERGY, INC. STOCK AWARD AGREEMENT (With Performance Goal)
Exhibit 10.2
LONG-TERM INCENTIVE PLAN OF
CENTERPOINT ENERGY, INC.
CENTERPOINT ENERGY, INC.
STOCK AWARD AGREEMENT
(With Performance Goal)
(With Performance Goal)
Pursuant to this Stock Award Agreement, CenterPoint Energy, Inc. (the “Company”) hereby grants
to «FIRST_NAME» «LAST_NAME» (the “Participant”), an employee of the Company, on [GRANT DATE] (the
“Grant Date”), an award of «RS» shares of Common Stock of the Company (the “Stock Award”), pursuant
to the Long-Term Incentive Plan of CenterPoint Energy, Inc. (the “Plan”), conditioned upon the
Company’s achievement of the Performance Goals established by the Committee over the course of the
Vesting Period, and subject to the terms, conditions and restrictions described in the Plan and as
follows:
1. Relationship to the Plan; Definitions. This Stock Award 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 Stock 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 Stock 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 Stock Award
Agreement:
“Change in Control Closing Date” means the date a Change in Control (as defined in the Plan)
is consummated during the Vesting Period.
“Change in Control Payment Date” means the following:
(i)
If the Participant is not Retirement Eligible, then the Change in Control Payment Date shall be not
later than the 70th day after the Change in Control Closing Date (regardless of whether or not the
Participant is a Specified Employee); and
(ii) If the Participant is Retirement Eligible and the Change in Control is a Section 409A Change in
Control, then the Change in Control Payment Date shall be not later than the 70th day after the
Change in Control Closing Date (regardless of whether or not the Participant is a Specified
Employee); and
(iii) If the Participant is Retirement Eligible, the Change in Control is not a Section 409A Change in
Control and the Participant is not a Specified Employee, then the Change in Control Payment Date
shall be not later than the 70th day after the earlier of:
| (1) | the Vesting Date; or |
| (2) | the date of the Participant’s Termination for any reason. |
(iv) If the Participant is Retirement Eligible, the Change in Control is not a Section 409A Change in
Control and the Participant is a Specified Employee, then the Change in Control Payment Date shall
be as follows:
| (1) | if (x) the Participant is in continuous Employment from the Change in Control Closing Date until and including the Vesting Date or (y) the Participant’s death occurs prior to the Vesting Date, then the Change in Control Payment Date shall be not later than the 70th day after the earlier of: |
| (a) | the Vesting Date; or | ||
| (b) | the date of the Participant’s death; or |
| (2) | if the Participant’s Employment terminates following the Change in Control Closing Date, other than due to death, but prior to the Vesting Date, then the Change in Control Payment Date shall be the earlier of: |
| (a) | the second business day following the end of the six-month period commencing on the Participant’s Termination Date; or | ||
| (b) | the date of the Participant’s death, if death occurs during such six-month period. |
“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 Goals” means the standards established by the Committee to determine in whole or
in part whether the shares of Common Stock under the Stock Award shall be earned, which are
attached hereto and made a part hereof for all purposes.
“Retirement” means Termination (i) on or after attainment of age 55 and (ii) with at least
five years of Employment; provided, however, that such Termination is not by the Company for Cause.
For purposes of this Stock 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.
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“Retirement Eligible” means the Participant (i) is or will be age 55 or older and (ii) has or
will have at least five years of Employment on or after the Grant Date, but prior to the calendar
year in which the Vesting Date occurs.
“Section 409A” means Code Section 409A and the Treasury regulations and guidance issued
thereunder.
“Section 409A Change in Control” means a Change in Control that satisfies the definition of a
change of control for purposes of Code Section 409A(a)(2)(A)(v) and the Treasury regulations and
guidance issued thereunder.
“Specified Employee” has the meaning of that term under Code Section 409A(a)(2)(B)(i) and the
Treasury regulations and guidance issued thereunder.
“Termination” means a “separation from service” with the Company and all its Subsidiaries
within the meaning of Section 409A and Treasury Regulation § 1.409A-1(h) (or any successor
regulation).
“Termination Date” means the date of the Participant’s Termination.
“Vesting Date” means [ ___, 2012].
“Vesting Period” means the period commencing on the Grant Date and ending on the Vesting Date.
2. Establishment of Stock Award Account. The grant of shares of Common Stock of the Company
pursuant to this Stock 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 such shares of Common Stock, 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 Stock Award Agreement. Except as otherwise provided in Section 10
of this Stock Award Agreement, the shares of Common Stock credited to the Participant’s bookkeeping
account may not be sold, assigned, transferred, pledged or otherwise encumbered until the
Participant has been registered as the holder of such shares of Common Stock on the records of the
Company, as provided in Sections 4, 5 or 6 of this Stock Award Agreement.
3. Vesting of Stock Award. Unless earlier (a) vested or forfeited pursuant this Section 3 or
Section 4 below or (b) vested upon the occurrence of a Change in Control pursuant to Section 5
below, the Participant’s right to receive shares of Common Stock (if any) under this Stock Award
Agreement shall vest on the Vesting Date. No later than 60 days after the Vesting Date, the
Committee shall determine the extent to which each Performance Goal has been achieved. Upon
completing its determination of the level at which the Performance Goals have been achieved, the
Committee shall notify the Participant of the number of shares of
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Common Stock (if any) under this
Stock Award Agreement that will be issued to the Participant pursuant to Section 6. Except as
provided in Sections 4 and 5 below, the Participant must be in continuous Employment during the
Vesting Period in order for the Common Stock to vest; otherwise, all such shares shall be forfeited
as of the Participant’s Termination Date.
4. Effect of Termination; Payment Timing.
(a)
Termination Prior to the Vesting Date or Change in Control. Notwithstanding Section 3 above, if
prior to (i) the Vesting Date or (ii) the occurrence of a Change in Control, the Participant’s
Termination occurs due to Retirement, death or Disability, then:
(1) Retirement. In the event of Retirement, the Participant shall vest in the
right to receive a number, if any, of the shares of Common Stock (rounded up to the
nearest whole share) determined by multiplying (x) the total number of shares of
Common Stock granted under this Stock Award Agreement to the Participant based upon
the Committee’s determination of achievement of Performance Goals after the end of
the Vesting Period, as provided in Section 3, by (y) a fraction, the numerator of
which is the number of days that have elapsed from the Grant Date to the
Participant’s Termination Date, and the denominator of which is the total number of
days in the Vesting Period; or
(2) Death or Disability. In the event of the Participant’s death or
Termination due to Disability, without regard to the Performance Goals, the
Participant shall vest in the right to receive a number of the shares of Common
Stock (rounded up to the nearest whole share) determined by multiplying (x) the
total number of shares of Common Stock granted under this Stock Award Agreement by
(y) a fraction, the numerator of which is the number of days that have elapsed from
the Grant Date to the Participant’s Termination Date, and the denominator of which
is the total number of days in the Vesting Period.
(b)
Timing of Payments.
(1) Retirement. If the Participant is entitled to a benefit pursuant to
Section 4(a)(1) hereof, a number of shares of Common Stock equal to the number of
vested shares of Common Stock under this Stock Award Agreement (as determined by the
Committee in accordance with Section 3 and Section 4(a)(1), if any) shall be
registered in the name of the Participant and the certificates representing such
Common Stock shall be delivered to the Participant not later than the 70th day after
the Vesting Date.
(2) Death. If the Participant is entitled to a benefit pursuant to Section
4(a)(2) hereof due to the Participant’s death, the number of shares of Common Stock
determined in accordance with Section 4(a)(2) shall be registered in the name of the
Participant’s estate and the certificates representing such Common Stock shall be
delivered to the Participant’s estate as soon as practicable but not later than the
70th day after the date of the Participant’s death.
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(3) Disability.
(A) Specified Employee and Retirement Eligible. If the
Participant (i) is entitled to a benefit pursuant to Section 4(a)(2) hereof
due to the Participant’s Termination due to Disability, (ii) is a Specified
Employee, and (iii) is Retirement Eligible, the number of shares of Common
Stock determined in accordance with Section 4(a)(2) shall be registered in
the name of the Participant and the certificates representing such Common
Stock shall be delivered to the Participant on the date that is the earlier
of (x) the second business day following the end of the six-month period
commencing on the Participant’s Termination Date or (y) the Participant’s
date of death, if death occurs during such six-month period.
(B) All Other Participants. Except as provide in Section
4(b)(3)(A), if the Participant is entitled to a benefit pursuant to Section
4(a)(2) hereof due to the Participant’s Termination due to Disability, the
number of shares of Common Stock determined in accordance with Section
4(a)(2) shall be registered in the name of the
Participant and the certificates representing such Common Stock shall
be delivered to the Participant as soon as practicable but not later than
the 70th day after the date of the Participant’s Termination due to
Disability.
(c)
Dividend Equivalents. Upon the date of delivery of shares of Common Stock under this Section 4,
the Participant shall also be entitled to receive a lump sum cash payment equal to the sum of all
dividends, if any, declared on such shares of Common Stock where the record date is after the Grant
Date but prior to the date such vested shares of Common Stock are distributed to the Participant
(in accordance with the requirements of Section 409A, to the extent applicable).
5. Distribution Upon a Change in Control. Notwithstanding any provision of this Agreement to
the contrary, if during the Participant’s Employment and prior to the end of the Vesting Period or
an accelerated vesting event under Section 4 above there is a Change in Control of the Company,
then, upon the Change in Control Closing Date and without regard to the Performance Goals, the
Participant’s right to receive the unvested shares of Common Stock under this Stock Award Agreement
shall be vested and settled by a distribution, on the Change in Control Payment Date, to the
Participant of:
(a) The number of shares of Common Stock subject to this Stock Award Agreement not previously vested or
forfeited pursuant to Sections 3 or 4 above, plus
(b) Shares of Common Stock (rounded up to the nearest whole share) having a Fair Market Value equal to
the amount of dividends that would have been declared on the number of shares of Common Stock
determined under clause (a) above where the record date is after the Grant Date and ending on the
date immediately preceding the Change in Control Closing Date;
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with such shares of Common Stock registered in the name of the Participant and certificates
representing such Common Stock to be delivered to the Participant. In lieu of the foregoing
distribution in shares, the Committee, in its sole discretion, may direct that such distribution be
made to the Participant in a lump sum cash payment equal to:
(x) The product of (i) the Fair Market Value per share of Common Stock on the date
immediately preceding the Change in Control Closing Date and (ii) the number of shares of
Common Stock subject to this Stock Award Agreement not previously vested or forfeited
pursuant to Sections 3 or 4 above, plus
(y) The amount of dividends that would have been declared on the number of shares of
Common Stock determined under clause (a) above where the record date is after the Grant Date
and ending on the date immediately preceding the Change in Control Closing Date;
with such cash payment to be made on the Change in Control Payment Date. Such distribution under
this Section 5, whether in the form of shares of Common Stock or, if directed by the Committee, in
cash, shall satisfy the rights of the Participant and the obligations of the Company under this
Stock Award Agreement in full.
6. Payment of Award Under Section 3. Upon the vesting of the Participant’s right to receive
the shares of Common Stock pursuant to Section 3 under this Stock Award Agreement, a number of
shares of Common Stock equal to the number of vested shares of Common Stock under this Stock Award
Agreement (as determined by the Committee in accordance with Section 3, if any) shall be registered
in the name of the Participant and the certificates representing such Common Stock shall be
delivered to the Participant not later than the 70th day after the Vesting Date. Moreover, upon
the date of delivery of shares of Common Stock, the Participant shall also be entitled to receive a
lump sum cash payment equal to the sum of all dividends, if any, declared on such shares of Common
Stock where the record date is after the Grant Date but prior to the date such vested shares of
Common Stock are distributed to the Participant (in accordance with the requirements of Section
409A, to the extent applicable).
7. Confidentiality. The Participant agrees that the terms of this Stock Award Agreement are
confidential and that any disclosure to anyone for any purpose whatsoever (save and except
disclosure to financial institutions as part of a financial statement, financial, tax and legal
advisors, or as required by law) by the Participant or his or her agents, representatives, heirs,
children, spouse, employees or spokespersons shall be a breach of this Stock Award Agreement and
the Company may elect to revoke the grant made hereunder, seek damages, plus interest and
reasonable attorneys’ fees, and take any other lawful actions to enforce this Stock Award
Agreement.
8. Notices. For purposes of this Stock Award Agreement, notices to the Company shall be
deemed to have been duly given upon receipt of written notice by the Corporate Secretary of
CenterPoint Energy, Inc., 0000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, or to such other address as the
Company may furnish to the Participant.
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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.
9. Shareholder Rights. The Participant shall have no rights of a shareholder with respect to
the shares of Common Stock granted pursuant to this Stock Award Agreement, unless and until the
Participant is registered as the holder of such shares of Common Stock.
10. Successors and Assigns. This Stock 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 shares of Common Stock are transferable by the Participant to
Immediate Family Members, Immediate Family Member trusts, and Immediate Family Member partnerships
pursuant to Section 13 of the Plan.
11. No Employment Guaranteed. Nothing in this Stock Award Agreement shall give the
Participant any rights to (or impose any obligations for) continued Employment by the Company or
any Subsidiary, or any successor thereto, nor shall it give such entities any rights (or impose any
obligations) with respect to continued performance of duties by the Participant.
12. Compliance with Section 409A. It is the intent of the Company and the Participant that
the provisions of the Plan and this Stock Award Agreement comply with Section 409A and will be
interpreted and administered consistent therewith. Accordingly, (i) no adjustment to the Stock
Award pursuant to Section 14 of the Plan and (ii) no substitutions of the benefits under this Stock
Award Agreement, in each case, shall be made in a manner that results in noncompliance with the
requirements of Section 409A, to the extent applicable. The foregoing notwithstanding, with
respect to a Participant who is not Retirement Eligible, this Stock Award Agreement is intended not
to be subject to Section 409A under the short term deferral exclusion, and this Stock Award
Agreement shall be interpreted and administered consistent therewith.
13. Withholding. The Company shall have the right to withhold applicable taxes from any
distribution of the Common Stock (including, but not limited to, from any cash amounts payable with
respect to dividends) or from other cash compensation payable to the Participant at the time of
such vesting and delivery pursuant to Section 11 of the Plan (but subject to compliance with the
requirements of Section 409A, if applicable).
14. Compliance with Recoupment Policy. Any amounts payable or paid under this Stock Award
Agreement are subject to the recoupment policy of the Company as in effect from time to time.
15. Modification of Stock Award Agreement. Any modification of this Stock Award Agreement is
subject to Section 12 hereof and shall be binding only if evidenced in writing and signed by an
authorized representative of the Company.
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