EX-4.3






Exhibit 4.3




PRISMA ENERGY INTERNATIONAL INC.




2005 SALES INCENTIVE PLAN




EFFECTIVE AS OF August 18, 2005




 









 





PRISMA ENERGY INTERNATIONAL INC.




2005 SALES INCENTIVE PLAN



Preamble. The Prisma Energy International Inc. 2005 Sales Incentive Plan (the “Plan”) and
certain awards to be granted thereunder were approved by the Compensation Committee of the Board
of Directors of Prisma Energy International Inc. (the “Company”) on September 16, 2005
and by Enron Corp.’s Board of Directors on August 18, 2005. The Plan is designed to be exempt
from Section 409A of the Internal Revenue Code of 1986, as amended in accordance with guidance
issued in the form of Internal Revenue Service Notice 2005-1. As of the date hereof, the Company
is not subject to Section 162(m) of the Code.




     1. Purpose. The Plan is intended to provide incentives which will attract, retain and
motivate highly competent persons as officers, directors and key employees of the “Company”
and its subsidiaries and affiliates, by providing them with appropriate incentives and rewards
in
the form of rights to earn remuneration in connection with a divestiture of the Company by
Enron Corp.



     2. Definitions. A listing of the defined terms utilized in the Plan is set forth in
Appendix A.



     3. Effective Date and Terms of Plan. The Plan is subject to the approval of (i) the
shareholders of the Company and (ii) an independent committee of the board of directors of
Enron Corp. or those directors of the board of directors of Enron Corp., in either case,
constituting an independent “compensation committee” within the meaning of Treasury
Regulation Section 1. 162-27(c)(4) under Section 162(m) of the Code (the
“Approving
Committee”). The Plan shall become effective as of August 18, 2005 (the “Effective
Date”) and
shall remain in effect until the earlier of the Distribution Date or the first anniversary of
such
Change in Control as defined in Section 20(b) of the Prisma Energy International Inc. 2004
Stock Incentive Plan (the “2004 SIP”), subject to any continued vesting provisions of an
applicable Cash Award agreement. “Distribution Date” shall mean the date the
Company
Common Stock as defined in the 2004 SIP is first distributed to creditors (a “Share
Distribution”)



2









 







pursuant to the Fifth Amended Joint Plan of Affiliated Debtors in Re Enron Corp. et. al. (the
“Plan of Reorganization”).



     4. Administration.



          (a) Committee. The Plan shall be administered by the Approving Committee
(the “Committee”).



          (b) Authority. The Committee is authorized, subject to the provisions of the
Plan, to establish such rules and regulations as it deems necessary for the proper
administration
of the Plan and, in its sole discretion, to make such determinations, valuations
and
interpretations and to take such action in connection with the Plan and any Awards (as
hereinafter defined) granted hereunder as it deems necessary or advisable. All determinations
and interpretations made by the Committee shall be binding and conclusive on all participants
and their legal representatives.



          (c) Indemnification. No member of the Committee and no employee of the
Company shall be liable for any act or failure to act hereunder, or for any act or failure to
act
hereunder by any other member or employee or by any agent to whom duties in connection
with the administration of this Plan have been delegated, except in circumstances involving
his
or her bad faith or willful misconduct. The Company shall indemnify members of the
Committee and any agent of the Committee who is an employee of the Company, or of a
subsidiary or an affiliate against any and all liabilities or expenses to which they may be
subjected by reason of any act or failure to act with respect to their duties on behalf of the
Plan,
except in circumstances involving such person’s bad faith or willful misconduct.



          (d) Delegation and Advisers. The Committee may delegate to one or more of its
members, or to one or more employees or agents, including the Compensation Committee of the
Company, such duties and authorities as it may deem advisable including the authority to make
grants as permitted by applicable law, and the Committee, or any person to whom it has
delegated duties or authorities as aforesaid, may employ one or more persons to render advice



3









 




with respect to any responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent. Expenses incurred by the Committee in the
engagement of such counsel, consultant or agent shall be paid by the Company, or the
subsidiary or affiliate whose employees have benefited from the Plan, as determined by the
Committee.




     5. Type of Awards. Awards under the Plan shall be granted in Cash Awards (as
described below, the “Awards”).



     6. Participants. Participants will consist of such officers and key employees of the
Company and its subsidiaries and affiliates as the Committee in its sole discretion
determines to
be significantly responsible for the successful divestiture of the Company and whom the
Committee may designate from time to time to receive Awards under the Plan. Designation
of
a participant in any year shall not require the Committee to designate such person to
receive an
Award in any other year or, once designated, to receive the same type or amount of Award
as
granted to the participant in any other year.



     7. Grant Agreements.


Awards granted under the Plan shall be evidenced by an agreement (“Grant Agreement”) that
shall provide such terms and conditions, as determined by the Committee in its sole discretion,
provided, however, that in the event of any conflict between the provisions of the Plan and any
such agreement, the provisions of the Plan shall prevail. The Grant Agreement will determine the
effect on an Award of the disability, death, retirement, involuntary termination, termination for
cause or other termination of employment of a participant and the extent to which, and the period
during which, the participant’s legal representative, guardian or beneficiary may receive payment
of an Award. The Committee, in its sole discretion, may modify a Grant Agreement. Grant Agreements
under the Plan need not be identical.




4









 








     8. Cash Awards.



          (a) Generally. The Committee may, in its discretion, grant “Cash Awards” (as
defined in subsection (b) below) to participants hereunder. Cash Awards may be subject to such
terms and conditions as the Committee determines appropriate.



          (b) Definition and Structure. A “Cash Award” means any award denominated in
a Grant Agreement as a cash award. Such denomination may include but is not limited to a fixed
or variable amount expressed as dollars, units, or any other denomination as set forth herein
and
in the applicable Grant Agreement. Subject thereto, the following provisions shall apply to
Cash
Awards:



               (i) The total amount of Cash Awards payable under this Plan (“Cash Award Fund” as set forth on
Schedule I for calendar years 2005 — 2008 attached to this Plan, as may be amended from time to
time, by the Committee, pursuant to Section 8(iv) (“Schedule I”)), will be determined by a
quarterly threshold established by the Committee which is based upon the specific quarter and the
specific calendar year of a closing of a sale (“Threshold Value”), the amount of value in a Change
in Control received by Enron Corp. and its affiliates, net of 3rd party transaction fees
associated with the sale, and including aggregate dividends which include payments on intercompany
notes paid to Enron, its affiliates or Enron Netherlands Holdings BV (“ENHBV”) from Prisma or its
subsidiaries, and sales proceeds on the sale of four Enron assets (“Aggregate Dividends”) in excess
of $435 million after December 31, 2002, in excess of the Threshold Value (“Realized Value”) as set
forth on Schedule I, and a vesting schedule as affected by the calendar year in which such a Change
in Control becomes effective.



               (ii) The Threshold Value set forth on Schedule I has been established based upon the calendar
year quarter in which a Change in Control occurs as set forth on Schedule I. If a Change in Control
occurs and there is no Realized Value, or if no Change in Control occurs before calendar year 2009,
no Cash Awards shall be payable under this Plan.



5









 





               (iii) The amount of Realized Value will determine the total amount of the Cash Award Fund and
a separate percentage (“Incremental Cash Incentive Percentage”) will be applied separately and
solely to each $150 million increment of Realized Value (“Incremental Value”) as indicated on
Schedule I. Schedule I also contains the methodology for determining the amount of the Cash Award
Fund for the calendar year in which a Change in Control occurs.



               (iv) The Committee, in its sole discretion and without obligation, may make adjustments which
the Committee deems reasonable to any one or more of the Cash Award Fund, Threshold Value,
Realized Value and Incremental Cash Incentive Percentage applicable to the Cash Awards.


The Threshold Value in Schedule I for each particular calendar year quarter is based upon an
assumed growth rate for each of the sixteen Prisma assets. If a particular asset is sold, the
Committee shall adjust any future Threshold Value to reflect a new assumed growth rate equivalent
to the rate such proceeds would earn if invested in a market instrument or such other rate as
determined by the Committee if re-invested in an operating asset.




               (v) The following vesting schedule shall apply to a Cash Award upon a Change in Control:




	 	•	 	Change in Control in 2005 — 33% vesting,
	 
	 	•	 	Change in Control in 2006 — 50% vesting;
	 
	 	•	 	Change in Control in 2007 — 67 % vesting; and
	 
	 	•	 	Change in Control in 2008 — 75% vesting





               Following a Change in Control and after giving effect to the preceding sentence, all remaining
unvested portions of Cash Awards shall become fully vested on the first anniversary of a Change in
Control provided the participant is continuously employed with the Company through such first
anniversary date, except as otherwise provided in the applicable Grant Agreement.



6









 





               (vi) Generally, the payment amount attributable to Cash Awards to any participant will be
based in part on the number of Stock Unit grants awarded under the Company’s 2004 SIP for 2005 and
subsequent years to such participant as a percentage of the total of all such grants awarded to
participants in the aggregate under the 2004 SIP for such years. Schedule II attached to this Plan
contains an example of the methodology utilized in part for the determination of the amount of Cash
Awards to be granted to any particular participant.



     9. Foreign Laws. The Committee may grant Awards to individual participants who
are subject to the tax laws of nations other than the United States, which Awards may have
terms and conditions as determined by the Committee as necessary to comply with applicable
foreign laws. The Committee may take any action which it deems advisable to obtain approval
of such Awards by the appropriate foreign governmental entity; provided, however, that no
such Awards may be granted pursuant to this Section 9 and no action may be taken which
would result in a violation of the Exchange Act, the Code or any other applicable law.



     10. Nontransferability, Title and Other Restrictions. Except as otherwise
specifically provided by the Committee in a Grant Agreement or modification of a Grant
Agreement that provides for transfer, each Award granted under the Plan to a participant shall
not be transferable otherwise than by will or the laws of descent and distribution.



     11. Substantial Risk of Forfeiture. The occurrence of a Change in Control is intended
to constitute a condition related to the purpose of Awards under the Plan that subjects such
Awards to a substantial risk of forfeiture under Section 409A of the Code. All portions of
Cash
Awards becoming vested shall be settled as soon as practicable thereafter, but no later than
the
date which is the later of 2 1/2 months from the end of (a) the participant’s or (b) the
service
recipient’s (i.e., the participant’s employer) first taxable year after such vesting.



     12. Acceleration of Awards.



          The Committee, in its sole discretion and without obligation, may, at the time an



7









 




Award is made or at any time thereafter, take one or more of the following actions: (i) provide
for the acceleration of any time period relating to the payment of the Award, (ii) adjust the
terms of the Award in a manner determined by the Committee to reflect such event, (iii) cause the
Award to be assumed by another entity, or (iv) make such other adjustments in the Award as the
Committee may determine in its sole discretion.




     13. Withholding. All payments or distributions of Awards made pursuant to the Plan
shall be net of any amounts required to be withheld pursuant to applicable federal, state and
local tax withholding requirements.



     14. Employment. A participant’s right, if any, to continue to serve the Company or any
of its subsidiaries or affiliates as an officer, employee, or otherwise, shall not be enlarged
or
otherwise affected by his or her designation as a participant under the Plan.



     15. Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or
to any investments which the Company may make to aid it in meeting its obligations under the
Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall
create
or be construed to create a trust of any kind, or a fiduciary relationship between the Company
and any participant, beneficiary, legal representative or any other person. To the extent that
any
person acquires a right to receive payments from the Company under the Plan, such right shall
be no greater than the right of an unsecured general creditor of the Company. All payments to
be
made hereunder shall be paid from the general funds of the Company and no special or separate
fund shall be established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to
the
Employee Retirement Income Security Act of 1974, as amended.



     16. Duration, Amendment and Termination. No Award shall be granted after a
Change in Control. The Committee may amend the Plan from time to time or suspend or
terminate the Plan at any time.



     17. Governing Law. This Plan, Awards granted hereunder and actions taken in



8









 







connection herewith shall be governed and construed in accordance with the laws of the Cayman
Islands.



     Executed as of the 9th day of Dec 2005



	 	 	 	 	 
	 	PRISMA ENERGY INTERNATIONAL INC.

 	 
	 	By:  	/s/ Ron W. Haddock
 	 
	 	 	Title: 	 
	 	 	 	 



9









 






	 	 	 	 	 



Amendment to the

Prisma Energy International Inc. 2005 Sales Incentive Plan.





     Pursuant to the authority granted in Section 16 of the Prisma Energy International Inc. 2005
Sales Incentive Plan (the “Plan”) and with respect to item 3 below, the acknowledgment of the
affected participants, the Plan is hereby amended as follows:



     1. Section 4(a) of the Plan is amended to read in its entirety as follows:




     The Plan will be administered by a committee (“Committee”) appointed by the Board of
Directors of the Company from among its members (which may be the Compensation Committee or
may constitute the entire Board of Directors). If the Company determines that it is subject
to Section 162(m) of the Code, the Committee shall be comprised, unless otherwise
determined by the Company’s Board of Directors, solely of not less than two (2) members who
shall be “outside directors” within the meaning of Treasury Regulation Section
1.162-27(e)(3).



     2. Section 3 of the Plan is amended to delete the defined term “Approving
Committee”.



     3. Section 8(b)(i) of the Plan is amended to change the entities included in
calculating the sale proceeds of Enron assets to be included in calculating the amount of
the Cash Award. It shall read in its entirety as follows:




     The total amount of Cash Awards payable under this Plan (“Cash Award Fund” as set
forth on Schedule I for calendar years 2005-2008 attached to this Plan, as may be amended
from time to time, by the Committee, pursuant to Section 8(iv) (“Schedule I”)), will be
determined by a quarterly threshold established by the Committee which is based upon the
specific quarter and the specific calendar year of a closing of a sale (“Threshold Value”),
the amount of value in a Change in Control received by Enron Corp. and its affiliates, net
of 3rd party transaction fees associated with the sale, and including aggregate dividends
which include payments on intercompany notes paid to Enron, its affiliates or Enron
Netherlands Holdings BV (“ENHBV”) from Prisma or its subsidiaries, and sales proceeds from
the sale of MEC — Guam and GMSA (but not sales proceeds from the sale of Sarlux or
Centragas) (“Aggregate Dividends”) in excess of $435 million after December 31, 2002, in
excess of the Threshold Value (“Realized Value” as set forth on Schedule I, and a vesting
schedule as affected by the calendar year in which such a Change in Control becomes
effective.




     This amendment shall be effective as of the 22nd day of May, 2006.



	 	 	 
	/s/ Robert W. Jones
	 	 
	 

On behalf of the Approving Committee of the

	 	 
	Prisma Energy International Inc. 2005 Sales Incentive Plan