Exhibit 10.2

HOUSTON LIGHTING & POWER COMPANY
 
Executive Incentive Compensation Plan
 
(As Amended and Restated as of January 1, 1985)
 
Houston Lighting & Power Company, a Texas corporation (the “Company” herein),
hereby establishes and adopts the following Executive Incentive Compensation
Plan (the “Plan”):
 
1.  
Purpose.

 
The purpose of the Plan is to encourage a high level of corporate performance
through the establishment of specific corporate and individual goals, the
obtainment of which will require a high degree of competence and diligence on
the part of the executive employees of the Company selected to participate in
the Plan, and which will be beneficial to the owners and customers of the
Company.
2.  
Definitions.

 
The following definitions are applicable to the Plan:
“Award” means a payment made in accordance with the provisions of the Plan.
“Board of Directors” means the Board of Directors of the Company.
“Committee” means the Personnel Committee referred to in Section 3 hereof.
“Management” means the senior officers of the Company responsible for
determining business and strategic policies.
“Maximum Incentive Award Opportunity” means the maximum Award which possibly
could be made to a Participant during a Plan Year.
“Participant” means an employee who is selected to participate in the Plan.

 
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“Performance Goals” means the annual performance objectives of the Company and
individual Participants established for the purpose of determining the level of
Awards, if any, earned during a Plan Year.
“Plan Year” means the calendar year.
 
3.  
Administration.

 
The Plan shall be administered by the Personnel Committee (the “Committee”) of
the Board of Directors, which Committee shall in no event have as a member a
person entitled to receive an Award under the Plan.  All decisions of the
Committee shall be binding and conclusive on the Participants.  Subject to the
provisions of the Plan the Committee shall have the authority to:
(i) Select the Participants;
(ii) Approve Performance Goals for the Company and for each Participant;
(iii) Approve the level of the Maximum Incentive Award Opportunity and actual
Award that may be made to each Participant; and
(iv) Establish from time to time policies and regulations for the administration
of the Plan, interpret the Plan, and make all determinations necessary or
advisable for the administration of the Plan.
 
4.  
Participation.

 
Participants in the Plan shall be selected for each Plan Year from those
employees of the Company whose decisions contribute directly to the annual
success of the Company.  No employee shall at any time have the right (i) to be
selected as a Participant in the Plan for any Plan Year, (ii) if so selected, to
be entitled automatically to an Award, nor, (iii) having been
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selected as a Participant for one Plan Year, to be selected as a Participant in
any subsequent Plan Year.
 
5.  
Performance Goals.

 
The Committee, upon recommendation by Management, shall establish for each Plan
Year Corporate Performance Goals designed to accomplish such financial and
strategic objectives as it may from time to time determine appropriate.  The
Committee shall have the authority to adjust the Corporate Performance Goals for
any Plan Year as it deems equitable in recognition of extraordinary or
non-recurring events experienced by the Company during the Plan Year or in the
event of changes in applicable accounting rules or principles or changes in the
Company’s methods of accounting during the Plan Year.
 
6.  
Maximum Amount Available For Awards.

 
For each Plan Year, the Committee shall establish a Maximum Incentive Award
Opportunity that may be made to each Participant.  The maximum amount which may
be paid as Awards for any Plan Year shall be limited to the lesser of (i) the
sum of the Maximum Incentive Award Opportunities for all Participants for that
Plan Year, or (ii) 3/4 of 1% of the Company’s net income for that Plan Year.  If
the net income limit is applicable, all Awards shall be proportionately reduced
to comply with the net income limit.
 
7.  
Determination of Awards.

 
Subject to the provisions of Sections 5 and 6 hereof, the Committee shall
approve the Awards for each Plan Year taking into consideration actual
performance of the Company for such Plan Year in relation to the established
corporate goals.

 
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8.  
Payment of Awards.

 
(a)   Awards for 1982.  Each Award granted for the 1982 Award Year (i.e., the
1982 Plan Year for which a 1982 Award is earned) shall be a Contingent Award
subject to the further provisions of this paragraph 8.
(b)   Awards for 1983 and Subsequent Award Years.  Each Award granted for the
1983 Award Year or any subsequent Award Year shall be divided into two equal
portions, to be known as the 50% vested portion and the 50% contingent portion,
respectively, of the Award.
(c)   Payment of Vested Portions of Award.  The payment of the 50% vested
portion of each Award granted for the 1983 Award Year or for any subsequent
Award Year shall be made in cash to the Participant as soon as practicable after
the close of the Award Year, unless the Participant has irrevocably elected,
with respect to an Award for 1984 or an earlier Award Year, to defer payment of
such vested portion of such Award as provided in subparagraph (g) below by
filing a written election form with the Committee prior to the beginning of such
Award Year.
(d)   Contingent Accounts of Participants.  Each Participant’s 1982 Contingent
Award and the 50% contingent portion of his Award for 1983 or for any subsequent
Award Year shall be converted into a fixed dollar amount as of the close of the
applicable Award Year and shall be credited to such Participants’ Contingent
Account on the Company’s records of this Plan; subject, however, to the
forfeiture provisions of subparagraph (f) below and other provisions of this
paragraph 8.  Each such Contingent Account shall be credited with interest at
the end of each Plan Year as provided in subparagraph (h) below.
(e)   Payment of Participant’s Contingent Account and Portion of Current Award
upon his Retirement, Death or  Disability.  If a Participant’s employment with
the
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Company terminates because of retirement after attainment of age 60, death, or
total and permanent disability (i.e., disability resulting in a disability
benefit under the Company’s Long-Term Disability Plan), such Participant, or his
Beneficiary or estate in the event of his death, shall be entitled to receive
payment, in 15 substantially equal annual installments commencing as soon as
practicable after the close of the Plan Year during which such termination of
employment occurs, of (i) the entire balance of such Participant’s Contingent
Account at the close of the Plan Year during which the termination of his
employment occurs, plus interest credited in accordance with subparagraph (h) on
the unpaid balance during the payment period, and (ii) a pro-rata portion of his
Award, if any, for the current Award Year, determined by reference to the
portion of the current Award Year during which the Participant was employed.  In
its sole discretion, the Committee may commute the value to be paid in
installments and make payment in a single lump sum or in monthly, quarterly or
annual installments over a period of time of less than 15 years, in any of which
events the amounts to be paid are to be determined by reference to the annual
interest rate credited as provided in subparagraph (h) of this paragraph 8.  For
purposes of this subparagraph (e) and other provisions of paragraph 8, a
Participant shall be deemed to be employed by the Company during any period of
time he is employed by Houston Industries Incorporated or any other wholly-owned
subsidiary of Houston Industries Incorporated or the Company.  Any amount
payable after a Participant’s death shall be paid to the Beneficiary or
Beneficiaries designated by such Participant in accordance with the procedures
established by the Committee, or in the absence of such designation or the
failure of any designated Beneficiary to survive the Participant, to the
Participant’s estate.
(f)    Forfeiture of Contingent Account.  If a participant’s employment with the
Company is terminated for any reason other than retirement, death or disability,
as more fully
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described in subparagraph (e) above, such Participant shall forfeit the entire
amount in his Contingent Account and his entire interest in his Award, if any,
for the current Award Year.  All such forfeited amounts shall be cancelled and
the Company shall have no obligation whatsoever to pay such forfeited amounts to
the Participant or to any other person.
(g)   Payment of Deferred Vested Awards.  Each Deferred Vested Award for 1984 or
an earlier Award Year shall be credited to the Participant’s Deferred Vested
Account, which shall not be subject to forfeiture, and shall be paid to the
Participant, or his Beneficiary or estate in the event of his death, at the end
of the deferral period designated in the written election form, or at the time
of Participant’s earlier termination of employment.  Such Deferred Vested
Account shall be credited with interest, as provided in subparagraph (h) of this
paragraph 8, from the end of the Award Year during which any Deferred Vested
Award is earned to the end of the Plan Year preceding payment.  Notwithstanding
any contrary provisions in the Participant’s written election form, the balance
in the Participant’s Deferred Vested Account shall be paid in 15 substantially
equal annual installments commencing on the earlier of (i) the deferral date
designated in the written election form, or (ii) the first day of the month next
following the month during which the Participant terminates employment with the
Company for any reason.  In its sole discretion, the Committee may commute the
value to be paid in installments and make payment in a single lump sum or in
monthly, quarterly or annual installments over a period of time of less than 15
years, in any of which events the amounts to be paid are to be determined by
reference to the annual interest rate credited to the Deferred Vested Accounts
of Participant, as provided in subparagraph (h) of this Paragraph 8.
(h)   Interest Computation.  Interest to be credited prior to January 1, 1985 to
the Contingent Accounts of Participants, as provided in subparagraph (c) above,
and to the
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Deferred Vested Accounts of Participants, as provided in subparagraph (g) above,
and interest to be credited to new Contingent Awards for Award Years beginning
on or after January 1, 1985 shall be computed at the end of each Plan Year by
using the weighted average interest rate incurred by the Company for short-term
borrowings having maturities of less than one year, during such applicable Plan
Year, and such interest shall be compounded annually.  Interest to be credited
from and after January 1, 1985 to the Contingent Accounts of Participants
attributable to contingent awards for Plan Years prior to 1985 and the interest
to be credited to the Deferred Vested Accounts of Participants attributable to
Deferred Vested Awards for Plan Years prior to 1985, shall be computed at the
end of each Plan Year at an annual interest rate, compounded annually,
determined by reference to the Participant’s Age, as of October 1, 1985, in
accordance with the following schedule:
 
AGE
INTEREST RATE
49 or less
Moody’s Rate + 4%
50 to 54
22% per year until payment
55 to 59
23% per year until payment
60 or older
 
24% per year until payment

 
For purposes of this subparagraph (h) of paragraph 8, the following terms shall
have the following meanings:
 
(i)    “Moody’s Rate” means a rate of interest equal to the twelve month average
of the composite yield of Moody’s Seasoned Corporate Bond Yield Index for the
twelve calendar months in a calendar year as determined from Moody’s Bond Record
published by Moody’s Investors Service, Inc.  (or any successor thereto), or, if
such yield is no longer published, a substantially similar average selected by
the Committee.
 
 
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(ii)    “Age” means a Participant’s age on his birthday nearest to October 1,
1985.
 
9.  
Assignments and Transfers.

 
A Participant shall not assign, encumber or transfer his rights and interests
under the Plan and any attempt to do so shall render those rights and interests
null and void.
 
10.  
Employee Rights Under the Plan.

 
No employee or other person shall have any claim or right to be granted an Award
under this Plan.  Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the
Company.
 
11.  
Withholding Taxes.

 
The Company shall withhold the amount of any Federal, state or local taxes
attributable to any amounts payable under the Plan.
 
12.  
Other Plans.

 
The payments and benefits under this Plan shall be excluded from considered
compensation under the Houston Industries Incorporated Retirement Plan.  Such
payments however shall be included in considered compensation under the Houston
Industries Incorporated Employee Savings Plan and the Houston Industries
Incorporated Employee Stock Ownership Plan.
 
13.  
Term.

 
Subject to earlier termination pursuant to the provisions of this Section 13,
the Plan shall have a term of five years from its effective date, January 1,
1982; provided, however, the Board or terminate the Plan or any of Directors may
amend, suspend portion thereof at any time.

 
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IN WITNESS WHEREOF, the Company has executed this Plan this 16th day of August,
1985, but effective as of January 1, 1985.
 

 
HOUSTON LIGHTING & POWER
 
COMPANY
   
By:
/s/ Don D. Jordan
 
Don D. Jordan, Chairman
 
& Chief Executive Officer

 

 
ATTEST:
 
 
/s/ Hugh Rice Kelly
 
Secretary
     

 
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