EXHIBIT 10
(CENTERPOINT ENERGY (TM) LOGO) XXXXX X. XXXXXXXXXX P.O. Box 1700
President and CEO Houston, TX 77251
CenterPoint Energy 000 000 0000
Fax: 000 000 0000
xxxxx.xxxxxxxxxx@
XxxxxxXxxxxXxxxxx.xxx
March 16, 2006
Xx. Xxxx X. Xxxxx
0000 Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Re: Waiver of Certain Rights under CenterPoint Energy, Inc. 1985 Deferred
Compensation Plan
Dear Xxxx:
The purpose of this letter agreement (this "Agreement") is to set
forth the terms of your election to forfeit and waive certain rights in
connection with your benefits under the CenterPoint Energy, Inc. 1985 Deferred
Compensation Plan (the "PLAN").
BENEFITS UNDER PLAN: As a member of the Board of Directors (the
"Board") of CenterPoint Energy, Inc. (the "Company"), you deferred compensation
under the Plan in 1985, 1986, 1987 and 1988, pursuant to deferred compensation
agreements with the Company (the "Deferred Compensation Agreements"). Your
deferred compensation account balance under the Plan earns interest at the
interest rate specified in your Deferred Compensation Agreements, compounded
annually (the "Interest Rate"). Pursuant to those agreements and the terms of
the Plan, your account balance under the Plan will be paid to you in 15 annual
installments commencing on the later of your (i) attaining age 70 or (ii)
termination of membership on the Board, with interest continuing to be earned on
your remaining Plan account balance at the Interest Rate during the 15-year
installment period.
The Company's Bylaws require a member of the Board to resign his or
her membership at the annual meeting first occurring after he or she attains age
70, unless the Board determines that such member has special skill, experience
or distinction having value to the Company that is not readily available or
transferable. While you will attain age 70 by the expected date of the Company's
2006 annual meeting, in accordance with the Company's Bylaws, the Board, at its
February 23, 2006 meeting, elected to extend your service as a director until
the expiration of your current term on the date of the 2007 annual meeting,
which is anticipated to be held in May 2007.
WAIVER OF BENEFITS UNDER PLAN: In connection with the extension of
your service on the Board, you have agreed to irrevocably forfeit and waive your
right to earn interest on your account balance under the Plan at the Interest
Rate during the one-year extension period of your membership on the Board (the
"Extended Term"). In lieu of the Interest Rate, during the Extended Term your
account balance will earn interest based on an interest rate of 8.08% (the
"Extended Term Interest Rate"). Moreover, you agree that the amount of interest
earned on your account balance during the Extended Term (such amount, the
"Extended Term Interest"), shall accrue interest at the Extended Term Interest
Rate during the 15-year installment period under the Plan commencing upon your
termination of membership on the Board.
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By executing this Agreement, you agree, represent and acknowledge that
you have full knowledge and understanding of the value of your benefits under
the Plan pursuant to the application of the Interest Rate during the Extended
Term and installment period, and that you forfeit and waive your right to such
benefits knowingly, freely and voluntarily and further understand and
acknowledge that the effect of this Agreement is a reduction in your benefits
under the Plan that you would otherwise have been entitled to receive for the
Extended Term and installment period. You also agree, represent and acknowledge
that you have sought or have had the opportunity to seek legal and/or financial
counsel in connection with your election to forfeit and waive your right to the
Interest Rate and the resulting reduction of your benefits under the Plan.
WAIVER AND RELEASE: You hereby agree to irrevocably forfeit and waive
any and all claims of any kind arising out of or in connection with the Extended
Term Interest Rate as set forth in this Agreement and under the Plan and to
irrevocably release the Plan, the related trust under the Plan, the Benefits
Committee (and its member and delegates), the Company, and any of its officers,
directors, employees, subsidiaries or affiliates from liability for any and all
claims of any kind arising out of or in connection with the Plan and your waiver
of benefits thereunder.
MISCELLANEOUS: This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
This Agreement constitutes the entire agreement between the parties
with respect to application of the Extended Term Interest Rate and interest
earned during the Extended Term and supersedes any and all prior written or oral
agreements, arrangements or understandings between you and the Company with
respect to the same. Except as expressly provided in this Agreement, the terms
and conditions of the Plan shall continue to apply with respect to your benefits
under the Plan.
If you understand and agree with the foregoing, please execute both
copies of this Agreement, retain one original executed copy of this Agreement,
and return the other original executed copy of this Agreement to me.
Sincerely,
/s/ Xxxxx X. XxXxxxxxxx
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Xxxxx X. XxXxxxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED TO BY:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Date: March 20, 2006
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