<PAGE>

                               DESTEC ENERGY, INC.
                             1995 VARIABLE PAY PLAN
                     (As amended through November 14, 1995)


                                   I.  PURPOSE

          The purpose of the Destec Energy, Inc. 1995 Variable Pay Plan is to
provide a means through which the Company may reward its employees for their
contributions to the Company's financial success through incentives and reward
opportunities designed to enhance the future profitable growth of the Company.
Accordingly, the Plan provides for the granting of Awards of cash, Restricted
Stock, Deferred Stock or a combination thereof, as provided herein.


                                II.  DEFINITIONS

          The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:

               "AWARD" shall mean, individually or collectively, any Award of
          cash, Restricted Stock or Deferred Stock.

               "AWARD AGREEMENT" means the written agreement between Destec and
          the Participant entered into in accordance with subparagraph (d) of
          Article VII.

               "BOARD" shall mean the Board of Directors of Destec.

               "CHANGE OF CONTROL" shall mean the occurrence of any of the
          following events:  (i) Destec shall not be the surviving entity in any
          merger, consolidation or other reorganization (or survives only as a
          subsidiary of an entity other than a previously wholly owned
          subsidiary of Destec), (ii) Destec sells, leases or exchanges all or
          substantially all of its assets to any other person or entity (other
          than a wholly owned subsidiary of Destec), (iii) Destec is to be
          dissolved and liquidated, (iv) any person or entity, including a
          "group" as contemplated by Section 13(d)(3) of the Securities Exchange
          Act of 1934, as amended, acquires or gains ownership or control
          (including, without limitation, power to vote) of more than 20% of the
          outstanding shares of Destec's voting stock (based upon voting power),
          or (v) as a result of or in connection with a contested election of
          Directors, the persons who were Directors of Destec before such
          election shall cease to constitute a majority of

<PAGE>

                                        2

          the Board; provided, however, that a Change in Control shall not be
          deemed to occur as a result of the beneficial ownership of securities
          of Destec by The Dow Chemical Company.

               "CODE" shall mean the Internal Revenue Code of 1986, as amended.
          Reference in the Plan to any section of the Code shall be deemed to
          include any amendments or successor provisions to any section and any
          Regulations under such section.

               "COMMITTEE" shall mean the Compensation Committee of the Board
          consisting of at least two members of the Board who qualify as
          "disinterested persons" for purposes of Rule 16b-3 under the Exchange
          Act.

               "COMPANY" shall mean, collectively, Destec and each subsidiary of
          Destec (as defined in Section 424 of the Code).

               "COMPANY COMPONENT" shall mean that portion of each Participant's
          Award that is determined by the Company's 1995 financial performance.

               "DEFERRED STOCK" shall mean an Award of Stock made in accordance
          with Article IX of the Plan.

               "DEFERRED STOCK PRICE" shall mean an average Market Price for the
          Stock during the 30-day period ending on each of December 31, 1996,
          1997 and 1998 or at least $10.00, $11.00 and $12.00, respectively.

               "DESTEC" means Destec Energy, Inc., a Delaware corporation.

               "DIRECTOR" shall mean an individual elected to the Board by the
          stockholders of Destec or by the Board under applicable corporate law.

               "DISABILITY" shall mean, in the judgment of the Committee, a
          physical or mental incapacity or illness of a Participant which has
          continued for at least six months and which is likely to be
          indefinite.

               "ELECTION CERTIFICATES" shall mean the certificate filed by each
          Participant with the Company's Human Resources Department, in
          accordance with subparagraph (c) of Article VIII below, which
          specifies the portion of the Participant's Award to be paid in cash
          and the portion of such Award to be paid in Restricted Stock, if any.

<PAGE>

                                        3

               An "EMPLOYEE" shall mean any person (including an officer or a
          Director of Destec) in an employment relationship with the Company (as
          defined in Section 424 of the Code).

               "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
          amended. Reference in the Plan to any section of the Exchange Act
          shall be deemed to include any amendments or successor provisions to
          any section and any regulations under such section.

               "EXECUTIVE PARTICIPANTS" shall mean each Participant who is
          subject to Section 16(a) of the Exchange Act at the time such
          Participant's Award under the Plan is determined.

               "INDIVIDUAL COMPONENT" shall mean that portion of each
          Participant's Award that is determined by his job level and 1995 job
          performance.

               "MARKET PRICE" shall mean, as of any specified date, the average
          of the reported high and low sales prices of the Stock on that date on
          the New York Stock Exchange, as reported in THE WALL STREET JOURNAL,
          or ir no prices are reported on that date, on the last preceding date
          on which such prices of the Stock are so reported. In the event the
          Stock is not publicly traded at the time a determination of its value
          is required to be made hereunder, the determination of its fair market
          value shall be made by the Committee in such manner as it deems
          appropriate.

               "PLAN" shall mean this Destec Energy, Inc. 1995 Variable Pay
          Plan, as may be amended from time to time.

               "PARTICIPANT" shall mean an employee who has been notified of his
          eligibility to participate in the Plan and receive an Award
          thereunder. Unless the Plan provides otherwise, the term "Participant"
          shall include "Executive Participants."

               "RESTRICTED STOCK" shall mean an Award of Stock made in
          accordance with Article VIII of the Plan.

               "RESTRICTED STOCK PRICE" shall mean a per share price of $10.25.

               "RETIREMENT" shall mean, solely for purposes of the Plan, a
          voluntary resignation of employment with the Company with the prior
          written approval of the Committee to such resignation.

<PAGE>

                                        4

               "STOCK" shall mean Destec's common stock, par value $.01 per
          share.

               "TARGET AWARD" shall mean an amount in dollars equal to the
          target bonus that may be earned by the Participant for 1995 based on
          the Participant's job level and base salary as of January 1, 1995 (or
          date of hire, if later).


                     III.  OVERVIEW AND CONDITIONS TO AWARDS

          The Plan is designed to reward Participants for their contribution to
the Company's achievement of its 1995 performance goals of $25,000,000 profit
after tax and a stock price of $12.00 per share. Awards made under the Plan
consist of an Individual Component and a Company Component. The value of the
Individual Component is determined by the Participant's job level and his
individual job performance during 1995. The value of the Company Component is
determined by the Participant's job level and the extent to which the Company
achieves its profit after tax and stock  price targets.

          A Participant may elect to take a certain portion of his Award in the
form of  Restricted Stock. If such an election is made, a Participant becomes
eligible to receive Deferred Stock from the Company at no additional cost. See
Articles VIII and IX and the performance matrix attached as Exhibit A, which
Exhibit shall constitute a part of the Plan.


                  IV.  EFFECTIVE DATE AND DURATION OF THE PLAN

          The Plan become effective on February 23, 1995, the date of its
adoption by the Committee. The Plan shall remain in effect until all Awards
granted under the Plan have vested, expired or terminated. In no event shall any
Awards be granted after June 30, 1999. The text of the Plan set forth herein
supersedes and replaces any prior versions of the Plan.


                               V.  ADMINISTRATION

          (a)  COMMITTEE.  The Plan shall be administered by the  Committee.

          (b)  POWERS.  Subject to the provisions of the Plan, the Committee
shall have sole authority to determine which employees shall receive an Award,
the time or times when such Award shall be made, whether any Deferred Stock
shall be issued, and the number of shares of Deferred Stock to be issued to each
Participant. In making such determinations, other than Deferred Stock Awards,
the Committee may take into account the nature of the services rendered by each
employee, his present and potential contributions to

<PAGE>

                                        5

the Company's success and such other factors as the Committee in its discretion
shall deem relevant.

          (c)  ADDITIONAL POWERS.  The Committee shall have such additional
powers as are delegated to it by the other provisions of the Plan. Subject to
the express provisions of the Plan, the Committee is authorized to construe the
terms of the Plan, the Election Certificates and the Award Agreements executed
thereunder, to prescribe such rules and Regulations relating to the Plan as it
may deem advisable to carry out the Plan, and to make all other determinations
necessary or advisable for administering the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in any document or
agreement relating to an Award in the manner and to the extent it shall deem
expedient to carry it into effect. The determinations of the Committee on the
matters referred to in this Article V shall be conclusive.


                         VI.  SHARES SUBJECT TO THE PLAN

          (a)  STOCK GRANT AND AWARD LIMITS.  The aggregate number of shares of
Stock that may be issued under the Plan shall not exceed 500,000 shares. Shares
of Stock shall be deemed to have been issued under the Plan only to the extent
actually issued and delivered pursuant to an Award. To the extent that an Award
lapses or the rights of a Participant terminate, any shares of Stock subject to
such Award shall again be available for issuance under the Plan. Separate stock
certificates shall be issued by the Company for those shares acquired as
Restricted Stock and for those shares acquired as Deferred Stock.

          (b)  STOCK OFFERED.  The stock to be offered pursuant to the grant of
an Award will be previously issued and outstanding Stock that has been
reacquired by Destec.


                                VII.  ELIGIBILITY

          (a)  ELIGIBLE GROUP.  All full-time employees of the Company are
eligible for participation in the Plan if they were hired before January 1,
1995. Employees hired between January 1 and September 30, 1995 will receive a
prorated award based on their job level and base salary, as of their hire date,
but will not be able to choose to receive a portion of their Award in Stock.
Each Participant's Target Award will be based upon the employee's job level and
base salary as of January 1, 1995 (or the date of hire, if later). If an
employee has serious performance problems in 1995, the employee may not receive
an Award under the Plan, as determined by his senior manager. No Awards may be
granted to any Director of Destec who is not an employee of the Company. All
Awards are subject to the limitations set forth in the Plan.

<PAGE>

                                        6

          (b)  CONDITIONS TO AWARDS.  Notwithstanding subparagraph (a) above,
all Awards are contingent upon the Company's achievement of $18,000,000 in
profits after tax for 1995.

          (c)  COMPONENTS OF AWARDS.  Each Participant's Target Award is divided
into two components:  the Individual Component and the Company Component.

          A Participant's target Individual Component is determined by
multiplying the Participant's Target Award by a percentage ranging from 33% to
50% applicable to that Participant's job level. The Individual Component of a
Participant's Award can range from 0-200% of that target. The sum of all
Individual Components set by a senior manager for his department may not exceed
100% of the total of the target Individual Components of all of the Participants
within that senior manager's department.

          A Participant's target Company Component is determined by multiplying
the Participant's Target Award by a percentage ranging from 50% to 67%
applicable to that Participant's job level. The Company Component of a
Participant's Award can range from 0-200% of that target. The multiplier
applicable to the Company Component for all Participants is determined by
reference to the performance matrix attached as Exhibit A which establishes
performance measures for the Company's 1995 after-tax profits and the Stock
price for the last two months of 1995.

          (d)  AWARD AGREEMENTS.  Destec and each Participant shall enter into
an Award Agreement setting forth the terms and conditions of each Award and such
other matters as the Committee may deem relevant. Each Award Agreement shall be
signed by an officer of Destec on behalf of Destec and by the Participant. The
Award Agreement for each Executive Participant shall also set forth the
forfeiture and transfer restrictions applicable to Deferred Stock. At the time
of granting of Awards, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to the Awards. The Award
Agreements may also include, without limitation, provisions relating to tax
matters (including provisions (i) covering any applicable employee wage
withholding requirement and (ii) prohibiting an election by the Participant
under Section 83(b) of the Code), and any other matters not inconsistent with
the terms and provisions of the Plan that the Committee shall in its sole
discretion determine.


                         VIII.  RESTRICTED STOCK AWARDS

          (a)  FORM OF PAYMENT OF AWARDS.  Awards may be paid in cash or in a
combination of cash and Restricted Stock. Each Participant in the Plan may
irrevocably elect, in accordance with subparagraph (c) of this Article VIII, to
receive between zero and 30% of his Award in Restricted Stock, except that each
Executive Participant and member of

<PAGE>

                                        7

Destec senior management will receive a minimum of 30%, and may voluntarily
elect up to a maximum of sixty percent, of his Award in Restricted Stock. Each
Participant's designated percentage of the Award to be paid in Restricted Stock,
if any, shall be converted into a number of whole shares based on a per share
price equal to the Restricted Stock Price.

          (b)  RESTRICTION PERIOD.  For those employees who elect to receive
Restricted Stock as a part of their Award, the Restricted Stock will have a
three-year restriction period with the Restricted Stock vesting in three equal
installments on December 31 of 1996, 1997 and 1998. Except as otherwise provided
in Article X, the restriction period applicable to a particular Restricted Stock
Award shall not be changed except in the event of a Change in Control.

          (c)  ELECTION CERTIFICATES.  Each Participant in the Plan must
complete an Election Certificate stating the percentage of their Award to be
made in Restricted Stock, if any, and the portion of their Award to be paid in
cash. All Election Certificates must be received by the Human Resources
Department by June 9, 1995. All elections to receive Restricted Stock are
irrevocable.

          (d)  RECEIPT FOR RESTRICTED STOCK.  The Restricted Stock to be
received by a Participant, if any, shall be determined in accordance with each
Participant's Election Certificate and the results of individual and corporate
performance for the year.

          (e)  OTHER TERMS AND CONDITIONS.  Restricted Stock awarded as part of
a Participant's Award shall be represented by a stock certificate registered in
the name of the Participant receiving such Restricted Stock Award. Each
Participant shall have the right to receive dividends during the restriction
period, to vote the Restricted Stock and to enjoy all other stockholder rights,
except that (i) the Participant shall not be entitled to delivery of the stock
certificate until the restriction period has expired, (ii) the Participant may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
Restricted Stock during the restriction period, and (iii) a breach of the terms
or a failure to satisfy the conditions established by the Committee pursuant to
a Participant's Award Agreement shall cause a forfeiture of the Restricted
Stock.


                               IX.  DEFERRED STOCK

          (a)  PROVISIONS APPLICABLE TO PARTICIPANTS WHO ARE NOT EXECUTIVE
PARTICIPANTS.  Subject to Article X, each Participant who is not an Executive
Participant shall be eligible to earn a number of shares of Deferred Stock equal
to the aggregate number of shares of Restricted Stock awarded to the Participant
as part of the Award. One-third of the number of shares of Deferred Stock for a
Participant who is not an Executive Participant will be awarded on each of
December 31, 1996, 1997, and 1998, if the average Market Price

<PAGE>

                                        8

for the 30-day period ending on such date equals or exceeds the Deferred Stock
Price applicable to that date. If the average Market Price of the Stock for the
30-day period ending on the applicable vesting date is below the Deferred Stock
Price, no Deferred Stock shall be awarded for that year. If, however, on a
subsequent vesting date the Market Price of the Stock equals or exceeds the
Deferred Stock Price applicable to that vesting date, a Participant who is not
an Executive Participant shall receive the number of shares of Deferred Stock to
be awarded as of that vesting date (i.e., one-third of the aggregate number of
shares of Deferred Stock that may be awarded hereunder) plus the aggregate
number of shares of Deferred Stock that were not awarded on prior vesting dates
because the average Market Price of the Stock on such vesting date did not equal
or exceed the Deferred Stock Price applicable to that vesting date. No shares of
Deferred Stock may be awarded or earned under the Plan after December 31, 1998.
All shares of Deferred Stock will be fully vested at the time such shares are
received by Plan Participants who are not Executive Participants and will be
awarded to the Participants at no cost, except that each Participant shall be
responsible for the payment of all amounts which are required to be withheld for
tax purposes in connection with the delivery of such shares. In no event may a
Participant receive a number of shares of Deferred Stock hereunder greater than
the number of shares of Restricted Stock awarded to the Participant and in which
the Participant ultimately vests.

          (b)  PROVISIONS APPLICABLE TO EXECUTIVE PARTICIPANTS.  On the date
that shares of Restricted Stock are awarded to an Executive Participant in
accordance with Article VIII of the Plan, the Executive Participant shall also
be awarded a number of shares of Deferred Stock equal to the aggregate number of
shares of Restricted Stock awarded as of that date. Subject to Article X below,
the shares of Deferred Stock shall vest and become nonforfeitable as follows:
(A) one-third of the shares of Deferred Stock awarded to an Executive
Participant will vest on December 31, 1996, if the average Market Price for the
30-day period ending on such date equals or exceeds the Deferred Stock Price
applicable to that date; (B) one-third of the shares of Deferred Stock (plus any
portion that was scheduled to vest but which did not vest on a prior vesting
date because the average Market Price was less than the applicable Deferred
Stock Price) will vest on December 31, 1997, if the average Market Price for the
30-day period ending on such date equals or exceeds the Deferred Stock Price
applicable to that date and (C) one-third of the shares of Deferred Stock (plus
any portion that was scheduled to vest but which did not vest on a prior vesting
date because the average Market Price was less than the applicable Deferred
Stock Price) will vest on December 31, 1998, if the average Market Price for the
30-day period ending on such date equals or exceeds the Deferred Stock Price
applicable to that date. Any shares of Deferred Stock awarded to an Executive
Participant that have not vested as of December 31, 1998 shall be immediately
forfeited. Until such time as a share of Deferred Stock is forfeited, the
Executive Participant shall have the right to receive dividends on the shares,
to vote the shares and to enjoy all other stockholder rights except that (i) the
Executive Participant shall not be entitled to delivery of the stock certificate
until the restriction period has expired, (ii) the Executive Participant may not
sell, transfer, pledge, exchange, hypothecate or otherwise

<PAGE>

                                        9

dispose of the shares of Deferred Stock until such time as the shares have
vested, and (iii) a breach of the terms or a failure to satisfy the conditions
established by the Committee pursuant to a Participant's Award Agreement shall
cause a forfeiture of the Deferred Stock.


                X.  TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL

          (a)  VOLUNTARY RESIGNATION OTHER THAN FOR RETIREMENT AND INVOLUNTARY
TERMINATION.  Unless the Committee determines otherwise, upon a Participant's
resignation of employment from the Company for any reason (other than
Retirement) or the Participant's termination of employment by the Company for
any reason, the unvested portion of any shares of Restricted Stock and Deferred
Stock subject to the Award as of the date of such termination of employment
shall be immediately forfeited and, with respect to Participants who are not
Executive Participants, no additional shares of Deferred Stock may be earned
hereunder.

          (b)  DEATH AND DISABILITY.

          (i)  SHARES OF RESTRICTED STOCK.  In the event a Participant's
employment terminates as a result of the Participant's death of Disability, the
Participant (or in the event of death, the Participant's estate) will
immediately vest in a portion of the shares of Restricted Stock awarded to the
Participant in accordance with the formula [(A x B/C) - D], where "A" equals the
number of shares of Restricted Stock subject to the Award at the time of grant,
"B" equals the whole number of calendar months (not greater than 36) elapsed
from January 1, 1996 to the last day of the month in which such termination of
employment occurs, "C" equals 36, and "D" equals the number of shares of
Restricted Stock subject to the Award in respect of which the Participant has
previously vested. The result shall be rounded to the nearest whole number.

          (ii) SHARES OF DEFERRED STOCK.  In the event that employment of a
Participant terminates as a result of the Participant's death of Disability, the
Participant (or in the event of death, the Participant's estate) will
immediately vest in (in the case of Executive Participants) or be entitled to
receive (in the case of Participants who are not Executive Participants) a
number of shares of Deferred Stock subject to an Award determined in accordance
with the formula [X-Y], where "X" equals the number of shares of Restricted
Stock which have vested in accordance with the Plan, including the previous
subparagraph, and "Y" equals the number of shares of Deferred Stock subject to
the Award previously distributed to the Participant (or in the case of an
Executive Participant, in which the Executive Participant previously vested).

          (c)  RETIREMENT.  If the employment of a Participant ends as a result
of Retirement, the shares of Restricted Stock awarded to the Participant which
have not

<PAGE>

                                       10

previously vested shall immediately vest and become nonforfeitable. The portion
of the Participant's Award representing shares of Deferred Stock shall remain
outstanding and shall vest, be paid or be forfeited, as the case may be, in the
manner contemplated by Article IX.

          (d)  FORFEITURE OF REMAINING SHARES. Any shares of Restricted Stock or
Deferred Stock which do not vest or become payable in accordance with the
provisions of the Article X in connection with a Participant's termination of
employment with the Company shall be forfeited.

          (e)  CHANGE IN CONTROL.  In the event of a Change in Control, (A) all
shares of Restricted Stock previously awarded under the Plan shall become fully
vested and nonforfeitable, and (B) shares of Deferred Stock previously granted
to an Executive Participant, and shares of Deferred Stock subject to the Award
of a Participant who is not an Executive Participant shall vest, become
nonforfeitable and be immediately delivered to the Participant if either of the
following two vesting conditions have been met:  (X) the highest price paid for
a share of Stock in the Change in Control equals or exceeds the Deferred Stock
Price applicable to the vesting date in the calendar year in which the Change in
Control occurs; of (Y) the average Market Price of a share of Stock for the 30-
day period ending on the date of the Change in Control equals or exceeds the
Deferred Stock Price applicable to vesting date in the calendar year in which
the Change in Control occurs.


                         XI.  AMENDMENT AND TERMINATION

          The Board may terminate the Plan at any time with respect to any
shares of Stock for which the Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided, however, that no change in any Award theretofore granted
may be made that would impair the rights of a Participant without the consent of
the Participant.


                               XII.  MISCELLANEOUS

          (a)  NO RIGHT TO AN AWARD.  Neither the adoption of the Plan by the
Company nor the execution of an Election Certificate by a Participant shall be
deemed to give an employee any right to be granted an Award hereunder. Each
Award shall be subject to the terms of the Plan and the Award Agreement duly
executed on behalf of Destec and the Participant. In the event of any conflict
between the terms of the Plan and an Election Certificate or Award Agreement,
the terms of the Plan as construed by the Committee shall govern.

<PAGE>

                                       11

          (b)  PLAN FUNDING.  The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the payment of any Award.

          (c)  NO EMPLOYMENT RIGHTS CONFERRED.  Nothing contained in the Plan
shall (i) confer upon any employee any right with respect to continuation of
employment with the Company or (ii) interfere in any way with the right of the
Company to terminate his employment at any time.

          (d)  ASSIGNMENT AND WITHDRAWAL.  No Participant shall have any right
to assign his Awards under the Plan until such time as the shares of Stock
subject thereto have vested and become nonforfeitable in accordance with the
terms of the Plan and applicable Award Agreement.

          (e)  TAX WITHHOLDING.  Amounts paid under the Plan shall be subject to
all applicable federal, state, and local withholding. The Committee may
authorize the Company to lend to a Participant an amount sufficient to satisfy
all or a portion of the tax obligation incurred by a Participant as a result of
the vesting or payment of an Award. Such loan shall be on a fully recourse basis
and shall be secured by all shares of Stock subject to an Award. The interest
payable on such a loan will be the applicable federal rate for mid-term loans
with monthly compounding of interest, as determined under section 1274(d) of the
Code, on the date the loan is made to the Participant. Under the terms of the
loan, principal and interest will be due at the earliest of (i) the date the
Participant's employment is terminated with the Company; (ii) the date on which
the Participant sells shares of Stock which have vested pursuant to the terms of
an Award; or (iii) the fifth anniversary of the date of grant of the Award. If
no loan is made to a Participant, then, at the time of the vesting or payment of
an Award, the Company shall be authorized to withhold from such Participant's
other cash earnings all amounts that are required to be withheld to satisfy any
applicable withholding obligation.

          (f)  CORPORATE CHANGES.  The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of Destec to make or authorize any adjustment,
recapitalization, reorganization or other change in Destec's capital structure
or its business, any merger or consolidation of Destec, any issue of debt or
equity securities ahead of or affecting the Stock or the rights thereof, the
dissolution or liquidation of Destec or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

          (g)  ADJUSTMENTS.  Any adjustment to outstanding Awards contemplated
by the Plan shall be subject to any required stockholder action.

<PAGE>

                                       12

          (h)  OTHER SHARES, ETC.  Except as hereinbefore expressly provided, 
the issuance by Destec of shares of stock of any class, or securities 
convertible into shares of stock of any class, for cash, property, labor or 
services, upon direct sale, upon the exercise of rights or warrants to 
subscribe therefor, or upon conversion of shares or obligations of Destec 
convertible into such shares or other securities, and in any case whether or 
not for fair value, shall not affect, and no adjustment by reason thereof 
shall be made with respect to, the number of shares of Stock subject to the 
Award theretofore granted, if any, or the Restricted Stock Price, if 
applicable.

          (i)  CONSTRUCTION.  As used in the Plan, the masculine pronoun shall
be deemed to include the feminine pronoun and a singular word shall, to the
extent applicable, include the plural. The headings of articles and paragraphs
herein are included only for convenience of reference and shall not affect the
meanings thereof.

          (j)  GOVERNING LAW.  The Plan shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to the choice of
law provisions thereof.

<PAGE>

                                    EXHIBIT A

                             1995 VARIABLE PAY PLAN

                            PERFORMANCE AWARD MATRIX


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
                                                  1995 STOCK PRICE
<S>           <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
------------------------------------------------------------------------------------------
                         Below    $10.25    $10.50    $11.00    $11.50    $12.00    $13.00
                        $10.25
          --------------------------------------------------------------------------------
               Below      0.00      0.00      0.00      0.00      0.00      0.00      0.00
              $18.00
          --------------------------------------------------------------------------------
              $18.00      0.00      0.00      0.17      0.50      0.75      1.00      1.50
          --------------------------------------------------------------------------------
1995          $21.50      0.25      0.25      0.42      0.75      1.00      1.25      1.75
After-    --------------------------------------------------------------------------------
Tax           $25.00      0.50      0.50      0.67      1.00      1.25      1.50      2.00
Profits   --------------------------------------------------------------------------------
($Mms)        $28.50      0.75      0.75      0.92      1.25      1.50      1.75      2.00
          --------------------------------------------------------------------------------
              $32.00      1.00      1.00      1.17      1.50      1.75      2.00      2.00
          --------------------------------------------------------------------------------
              $40.00      1.57      1.57      1.74      2.00      2.00      2.00      2.00
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

                             AMENDMENT NO. 1997-1 TO
                               DESTEC ENERGY, INC.
                             1995 VARIABLE PAY PLAN

     This Amendment No. 1997-1 is made to the Destec Energy, Inc. 1995 Variable
Pay Plan, as amended through November 14, 1995 (the "Plan").  Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Plan.

     WHEREAS, Destec Energy, Inc. (the "Company") is considering entering 
into a transaction or series of transactions which will result in a Change in 
Control of the Company within the meaning of the Plan;

     WHEREAS, the Company has determined that it is in the best interest and
that of its stockholders to amend the Plan as set forth herein;

     NOW, THEREFORE, pursuant to Article XI of the Plan, the Plan is hereby
amended as follows:

     1.   Section 10(e) of the Plan is amended in its entirety to read as
          follows:

               (e)  CHANGE IN CONTROL.  (i) Except as provided in paragraph (ii)
          below, in the event of a Change in Control, (A) all shares of
          Restricted Stock previously awarded under the Plan shall become fully
          vested and nonforfeitable, and (B) shares of Deferred Stock previously
          granted to an Executive Participant, and shares of Deferred Stock
          subject to the Award of a Participant who is not an Executive
          Participant shall vest, become nonforfeitable and be immediately
          delivered to the Participant if either of the following two vesting
          conditions have been met:  (X) the highest price paid for a shares of
          Stock in the Change in Control equals or exceeds the Deferred Stock
          Price applicable to the vesting date in the calendar year in which the
          Change in Control occurs, or (Y) the average Market Price of a share
          of Stock for the 30-day period ending on the date of the Change in
          Control equals or exceeds the Deferred Stock Price applicable to
          vesting date in the calendar year in which the Change in Control
          occurs.

               (ii)  Notwithstanding paragraph (i) above, immediately prior to
          the occurrence of a transaction which is consummated pursuant to an
          agreement or agreements which are executed on or prior to December 31,
          1997 and (A) which constitutes a Change in

<PAGE>

          Control (within the meaning of clause (iv) of the definition thereof)
          and (B) in connection with which (or in connection with a related
          transaction) Company stockholders will receive all cash in
          consideration for their shares, (1) each Participant shall be entitled
          to receive in cancellation of all then outstanding Awards of
          Restricted Stock, and all then outstanding Awards of Deferred Stock
          (whether previously granted to an Executive Participant or subject to
          the Award of a Participant who is not an Executive Participant), in
          either case whether or not such Awards are then vested and
          nonforfeitable, and in lieu of shares of Stock otherwise deliverable
          in respect of such Awards, an amount in cash (subject to applicable
          withholding) computed by multiplying (x) the price per share to be
          paid in the transaction constituting such Change in Control by (y) the
          aggregate number of shares of Stock subject to such Awards.

     The effective date of this Amendment No. 1997-1 shall be February 14, 1997.
Except as herein modified, the Plan shall remain in full force and effect.

                                   Page 2 of 2