exhibit10n3.htm


    Exhibit
10(n)(3)

     

    


    CENTERPOINT
ENERGY, INC.

    OUTSIDE
DIRECTOR BENEFITS PLAN

    (As
Amended and Restated Effective December 31, 2008)

     

    __________________________

    


    RECITALS

     

    WHEREAS, CenterPoint Energy,
Inc., a Texas corporation (the “Company”), maintains the CenterPoint Energy,
Inc. Outside Director Benefits Plan, as amended and restated effective June 18,
2003, and as thereafter amended (“Plan”); and

     

    WHEREAS, the Plan is closed to
outside directors of the Company who (i) terminated service prior to January 1,
1992 and were not re-elected to the Board of Directors of the Company (“Board”)
prior to January 1, 2004 or (ii) were initially elected to the Board on or after
January 1, 2004; and

     

    WHEREAS, on and after January
1, 2005, the Plan has been operated in good faith compliance with Section 409A
of the Internal Revenue Code (“Code”) with respect to benefits under the Plan
that are earned or vested after December 31, 2004, with such Plan benefits
earned and vested prior to January 1, 2005, subject to the terms and conditions
of the Plan as in effect on October 3, 2004; and

     

    WHEREAS, pursuant to Section
7.1 of the Plan, the Company desires to amend the Plan to freeze the Plan
benefit and to comply with the final
regulations issued under Section 409A of the Code;

     

    NOW, THEREFORE, in
consideration of the foregoing, the Plan is hereby amended and restated,
effective as of December 31, 2008, to read as follows:

     

    ARTICLE
I

     

    PURPOSE

     

    The
purpose of the Plan is to enhance the Company’s ability to maintain a
competitive position in attracting and retaining qualified Outside Directors who
contribute, and are expected to contribute, materially to the success of the
Company and its subsidiaries by providing retainer continuation benefits for the
Outside Directors.  The Plan is closed to any Outside Director (i)
whose service on the Board terminated prior to January 1, 1992 and who was not
re-elected to the Board prior to January 1, 2004, or (ii) who was first elected
to the

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Board on
or after January 1, 2004.  Effective as of December 31, 2008, the
benefit under the Plan is frozen.

     

    ARTICLE
II

     

    DEFINITIONS

     

    For
purposes of the Plan, the terms set forth below shall have the following
meanings:

     

    “Annual Retainer Fee” means the
annual fee paid to the Outside Director for his service on the Board exclusive
of Board and committee meeting fees and any other supplemental or special
retainer fees.

     

    “Board” means the Board of
Directors of the Company.

     

    “Code” means the Internal
Revenue Code of 1986, as amended from time to time.

     

    “Company” means CenterPoint
Energy, Inc., a Texas corporation, or any successor thereto.

     

    A “Full Year of Service” means
the completion of service in the capacity of an Outside Director from one annual
meeting of shareholders of the Company to the next following annual meeting of
shareholders of the Company; provided, however, that (1)
such calculation shall include (i) any such service as an Outside Director prior
to January 1, 1992, the original effective date of the Plan, and (ii) service as
a member of the board of directors of NorAm Energy Corp., any predecessor
thereto, or any division or subsidiary of NorAm Energy Corp., or service as a
director of any “advisory board” of NorAm Energy Corp. or its subsidiaries or
divisions; and (2) the Current Outside Directors (as defined in Article IV)
shall be deemed to have a Full Year of Service for the period commencing with
the 2008 annual meeting of the shareholders and ending on December 31,
2008.

     

    “Outside Director” means a
person who is a member of the Board and who is not a current employee of the
Company or a subsidiary.

     

    “Plan” means the CenterPoint
Energy, Inc. Outside Director Benefits Plan set forth herein, as amended and
restated effective December 31, 2008, and as the same may hereafter be amended
from time to time.

     

    “Termination Date” means the
date on which occurs the end of an Outsider Director’s service to the Company as
a Director by reason of his retirement, declination to stand for re-election,
resignation, disability, removal, death or other event that has the effect of
terminating his service to the Company; provided, however, that a
date shall not be a “Termination Date” until there has been a “Separation from
Service” within the meaning of Section 409A of the Code and the Treasury
regulations issued thereunder.

     


    
      
         


      

      
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    ARTICLE
III

     

    ADMINISTRATION

     

    3.1           Plan
Administrator:  This Plan shall be administered by the
Board.

     

    3.2           Powers and
Duties:  Subject to the provisions hereof, the Board shall have
full and exclusive power and authority to administer this Plan and to take all
actions that are specifically contemplated hereby or are necessary or
appropriate in connection with the administration hereof.  The Board
shall also have full and exclusive power to interpret this Plan and to adopt
such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this
Plan.  The Board may correct any defect or supply any omission or
reconcile any inconsistency in this Plan in the manner and to the extent the
Board deems necessary or desirable.  Any decision of the Board in the
interpretation and administration of this Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned.  The Board may engage in or authorize the engagement of a
third party administrator to carry out administrative functions under the
Plan.

     

    The Board
shall publish and file or cause to be published and filed or disclosed all
reports and disclosures required by federal or state law.  The Board
shall keep all such books of accounts, records and other data as may be
necessary for the proper administration of the Plan.

     

    3.3           Payment of Expenses:
Each member of the Board shall serve without compensation for his services as
Plan administrator, but all expenses incurred in administration of the Plan
shall be paid by the Company.

     

    3.4           Indemnities:  No
member of the Board or officer of the Company or a subsidiary of the Company to
whom the Board has delegated authority in accordance with the provisions of this
Article shall be liable for anything done or omitted to be done by him, by any
member of the Board or by any officer of the Company or Company subsidiary in
connection with the performance of any duties under this Plan, except for his
own willful misconduct or as expressly provided by statute.

     

    ARTICLE
IV

     

    PARTICIPATION

     

    All
Outside Directors serving in such capacity on or after January 1, 1992 shall be
eligible to participate in the Plan, provided such service commenced prior to
January 1, 2004.  Any Outside Director (i) whose service on the Board
terminated prior to January 1, 1992 and who was not re-elected to the Board
prior to January 1, 2004, or (ii) who was first elected to the Board on or after
January 1, 2004 shall not be eligible to participate in the Plan.  As
of January 1, 2008, the Outside Directors who are active participants in the
Plan are Milton Carroll, Derrill Cody, O. Holcombe Crosswell, Thomas F.
Madison and Michael E. Shannon (with such active directors referred to as
the “Current Outside Directors”).

     


    
      
         


      

      
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    ARTICLE
V

     

    BENEFITS

     

    5.1           Retainer Continuation
Benefits:  Each Current Outside Director shall receive a cash
benefit equal to the amount resulting from (i) the amount of the Annual Retainer
Fee payable to the Outside Director for 2008 (which is $50,000), multiplied by (ii) the
Outside Director’s Full Years of Service as of December 31, 2008 (“Plan
Benefit”).  The Plan Benefit shall be payable to a Current Outside
Director, in accordance with his timely-filed election on the form prescribed by
the Board (“Election Form”), either in (1) a lump sum cash payment or (2) annual
installment payments for up to the maximum number of years set forth in the
Election Form, payable in substantially equal installments based on the number
of years elected by the Participant on his Election Form, with such Plan Benefit
actuarially adjusted as provided in the Election Form.  A Current
Outside Director’s Plan Benefit shall be paid or commence, as applicable, in
February 2009 (with, in the case of installment payments, the remaining annual
installments paid in the same month as the initial payment month for each of the
remaining years elected).  If a Current Outside Director fails to
timely make such election, his Plan Benefit shall be paid in the form of a lump
sum cash payment (actuarially adjusted as described on the Election Form not
timely executed by him).

     

    5.2           Death of Outside
Director:  Upon the death of a Current Outside Director before
commencement of, or receipt of all, payments payable under the Plan, the Outside
Director’s beneficiary or beneficiaries, designated under rules and procedures
established by the Board, or in the absence of such beneficiary, the Outside
Director’s surviving spouse, or if there is no surviving spouse, the personal
representative of such Outside Director’s estate, shall be entitled to receive
the cash payment or payments to which the Outside Director was entitled in
accordance with Section 5.1 of the Plan.

     

    5.3           Withholding of
Taxes:  Unless otherwise required by applicable federal or
state laws or regulations, the Company shall not withhold or otherwise pay on
behalf of any Outside Director any federal, state, local or other taxes arising
in connection with the payment of any benefits under this Plan.  The
payment of any such taxes shall be the sole responsibility of each Outside
Director.

     

    5.4           Prior Plan
Benefits.  Benefits payable to Outside Directors who ceased to
be members of the Board prior to January 1, 2005, and thus their benefits under
the Plan were earned and vested as of December 31, 2004, are subject to the
terms and conditions of the Plan as in effect on October 3, 2004 (“Grandfathered
Benefits”).  Such Grandfathered Benefits are not subject to Section
409A of the Code.  The benefits payable to an Outside Director who
ceased to be a member of the Board after December 31, 2004, but prior to
December 31, 2007, are subject to the terms and conditions of the Plan as in
effect on the Termination Date of such Outside Director (subject to good faith
compliance with Section 409A of the Code in operation) and his election form,
which was made in accordance with the applicable transition guidance issued by
the Internal Revenue Service with respect to Section 409A of the
Code.

     


    
      
         


      

      
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    ARTICLE
VI

     

    RIGHTS OF OUTSIDE
DIRECTORS

     

    6.1           No Assignment or
Transfer:  No right or benefit under this Plan shall be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge the same will be void.  No right or benefit hereunder shall be
in any manner payable for or subject to any debts, contracts, liabilities or
torts of the person entitled to such benefits.

     

    6.2           Prerequisites:  No
Outside Director, or any person claiming through an Outside Director, shall have
any right or interest in the Plan or any benefits hereunder, unless and until
all terms, conditions and provisions of the Plan which affect such Outside
Director or such other person shall have been complied with as specified
herein.

     

    ARTICLE
VII

     

    MISCELLANEOUS

     

    7.1           Amendment, Modification,
Suspension or Termination:  The Board may amend, modify,
suspend or terminate this Plan in whole or in part at any time. Any such
amendment, modification, suspension or termination shall not, however, adversely
affect the rights of any Outside Director to any accrued benefits under the
Plan.

     

    7.2           Code Section
409A.  It is intended that the provisions of this Plan comply
with and satisfy the requirements of Code Section 409A.  The Plan
shall be operated and the Plan provisions interpreted in a manner consistent
with such requirements to the extent applicable.

     

    7.3           Applicable
Laws:  This Plan and all determinations made and actions taken
pursuant hereto shall be governed by the internal laws of the State of Texas,
except as federal law may apply.

     

    7.4           Unfunded Status of
Plan:  This Plan shall be an unfunded plan.  The
annual benefit amount payable under this Plan shall be implemented by a credit
to a bookkeeping account maintained by the Company evidencing the unfunded and
unsecured right to receive the amount, which right shall be subject to the
terms, conditions and restrictions set forth in the Plan.  Such
accounts shall be used merely as a bookkeeping convenience.  The
Company shall not be required to establish any special or separate fund or
reserve or to make any other segregation of assets to assure the payment of the
annual benefit amount under this Plan.  Neither the Company nor the
Board shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

     

    [Signature
Page To Follow]

     


    
      
         


      

      
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    IN WITNESS WHEREOF,
CenterPoint Energy, Inc. has executed these presents as evidenced by the
signature of its duly authorized officer, in a number of copies, all of which
shall constitute but one and the same instrument, which may be sufficiently
evidenced by any such executed copy hereof, this 12th day of December,
2008.

    


    
      	 
      	
                  CENTERPOINT
      ENERGY, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      David M. McClanahan

            
	 
      	 
      	
              David
      M. McClanahan

            
	 
      	 
      	
              President
      and Chief Operating Officer

            
	 
      	 
      	 
      
	
              ATTEST:

            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              /s/
      Richard Dauphin

            	 
      	 
      
	
              Richard
      Dauphin

            	 
      	 
      
	
              Assistant
      Corporate Secretary

            	 
      	 
      


    

    



    
      
         


      

      
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