Document:

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                                                                   EXHIBIT 10.12

                       HOUSTON INDUSTRIES INCORPORATED
                           BENEFIT RESTORATION PLAN
                           (As Amended and Restated
                           Effective July 1, 1991)

      Houston Industries Incorporated, a Texas corporation, hereby amends and
restates the Houston Industries Incorporated Benefit Restoration Plan, effective
July 1, 1991, to read as follows:

      1.    Name. The name of this Plan is the "Houston Industries Incorporated
Benefit Restoration Plan" (the "Plan").

      2.   Purpose. Section 415 of the Internal Revenue Code of 1986, as amended
("Section 415"), imposes limitations on the amount of retirement benefits which
may be paid to certain Employees of the Company and its participating
Subsidiaries under the Retirement Plan for Employees of Houston Industries
Incorporated, as amended from time to time (the "Retirement Plan"). Effective
January 1, 1989, Section 401(a)(17) of the Internal Revenue Code of 1986, as
amended ("Section 401(a)(17)"), limits to $200,000 (indexed annually) the annual
compensation of each participating Employee which may be taken into account in
computing benefits under the Retirement Plan for any Plan Year. In addition, the
Retirement Plan excludes from the definition of "Compensation" for purposes of
computing benefits (a) any salary deferrals under the Houston Industries
Incorporated Deferred Compensation Plan (the "Deferred Compensation Plan") and
(b) any annual awards earned under the Houston Industries Incorporated
Executive Incentive Compensation Plan (the "EICP"). The principal purposes of
the Plan are to provide

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additional benefits to those Employees whose retirement benefits under
the Retirement Plan are reduced, curtailed or otherwise limited as a result of
the limitations imposed by Section 415 and Section 401(a)(17), and to provide
supplemental retirement benefits to those Employees selected by the Personnel
Committee whose retirement benefits under the Retirement Plan are affected by
the exclusion of certain amounts under the Deferred Compensation Plan and EICP.

      3.    Participants.

            A. Retirement Plan Restoration Benefits. All full-time, salaried
    officers or highly-compensated Employees of the Company or any of its
    adopting Subsidiaries shall be eligible to participate in the "Retirement
    Plan Restoration Benefit" described in Paragraph 4. Each eligible Employee
    shall become a Restoration Participant from and after June 1, 1985 if as of
    such date one of the limitations imposed by Section 415 or Section
    401(a)(17) applies to his benefits under the Retirement Plan. Each other
    eligible Employee shall become a Restoration Participant from and after
    the first January 1st after June 1, 1985 as of which one of the limitations
    imposed by Section 415 or Section 401(a)(17) applies to his benefits under
    the Retirement Plan.

           B.  Supplemental Retirement Benefits. The Personnel Committee shall
    select Employees eligible to participate in the "Supplemental Retirement
    Benefit" described in Paragraph 5 from full-time, salaried officers or other
    highly-compensated Employees of the Company or any adopting Subsidiary. Once
    selected as a Supplemental Participant, an Employee shall continue to be a
    Supplemental

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    Participant as long as he continues to be an Employee of the Company or of a
    participating Subsidiary unless the Personnel Committee determines that his
    participation shall cease as of the end of any calendar year in which notice
    of such discontinuance of participation is delivered in writing to the
    Supplemental Participant by the Personnel Committee.

           4.  Retirement Plan Restoration Benefit. When a Restoration
Participant's retirement benefit commences or a death benefit payable with
respect to a Restoration Participant commences under the Retirement Plan, the
Company will calculate a benefit equal to the excess of the amount of the
retirement benefit or death benefit, as the case may be, which would have been
payable under the Retirement Plan but for the limitations imposed by Section 415
and Section 401(a)(17) over the amount of the retirement benefit or death
benefit actually payable under the Retirement Plan, which excess is referred to
herein as the "Retirement Plan Restoration Benefit." The Company shall pay a
Retirement Plan Restoration Benefit to such Restoration Participant or such
other persons, at such times and in such manner as the Retirement Plan benefit
is payable pursuant to the terms of the Retirement Plan; provided, however, that
(i) the commencement of payment of any Retirement Plan Restoration Benefit
attributable to an Early Pension or a Deferred Vested Pension under the
Retirement Plan may be delayed beyond the earliest date the Restoration
Participant could elect to commence receiving any such benefit under the
Retirement Plan only if the Personnel Committee approves such delayed
commencement date of such Retirement Plan Restoration Benefit, and (ii) the
Company may in its sole discretion determine to convert the payment of the
Retirement Plan Restoration Benefit into an

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  actuarially equivalent lump sum payment, as determined by the Personnel
  Committee, with the advice of the actuary for the Retirement Plan, employing
  those actuarial assumptions as are then employed in converting Retirement Plan
  benefits from one form to another.

      5. Supplemental Retirement Benefit. When a Supplemental Participant's
retirement benefit commences or a death benefit payable in respect of the
Supplemental Participant commences under the Retirement Plan, the Company will
calculate a benefit under this Plan equal to the amount that would have been
payable under the Retirement Plan (without the limitations of Section 415 and
Section 401(a)(17)) if the definition of "Compensation" under the Retirement
Plan was amended to include (i) any amounts deferred under the Deferred
Compensation Plan at the time of deferral and (ii) any annual awards earned by
the Supplemental Participant under EICP in the December of the calendar year for
which the award was earned.  For purposes of clause (ii) above, if the
Supplemental Participant is awarded an annual EICP award after his termination
of Service, such award shall be considered as Compensation in the December
immediately preceding his termination if and only if it results in a greater
benefit payable to the Supplemental Participant under this Plan; any increase in
benefits shall be retroactive to the initial commencement of benefits. The
excess of the amount of such benefit over the total amount actually payable
under the Retirement Plan and any Retirement Plan Restoration Benefit payable
under this Plan is referred to herein as the "Supplemental Retirement Benefit."
The Company shall pay a Supplemental Retirement Benefit to such Supplemental
Participant or such other persons at such times and in such manner as the
Retirement Plan benefit is payable pursuant to the terms of the Retirement Plan;
provided, however, that (i) the

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commencement of payment of any Supplemental Retirement Benefit attributable to
an Early Pension or a Deferred Vested Pension under the Retirement Plan may be
delayed beyond the earliest date the Supplemental Participant could elect to
commence receiving any such benefit under the Retirement Plan only if the
Personnel Committee approves such delayed commencement date of such Supplemental
Retirement Benefit, and (ii) the Company may in its sole discretion determine to
convert the payment of the Supplemental Retirement Benefit into an actuarially
equivalent lump sum payment, as determined by the Personnel Committee, with the
advice of the actuary for the Retirement Plan, employing those actuarial
assumptions as are then employed in converting Retirement Plan benefits from one
form to another.

      6. Contractual Obligation of Company. The benefits described in this
Plan are contractual obligations of the Company to pay compensation for
services, and shall constitute a liability to the Participants and/or their
beneficiaries in accordance with the terms hereof. The payment of such benefits
shall be made from the general funds of the Company. No special or separate fund
need be established and no segregation of assets need be made to assure the
payment of such benefits. No Participant shall have any interest in any
particular asset of the Company by virtue of his rights under this Plan. To the
extent that any person acquires a right to receive payments from the Company
under this Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company.

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      7. Administration. The Plan shall be administered, construed and
interpreted by the Personnel Committee of the Board of Directors (the "Personnel
Committee"). The determinations by the Personnel Committee of the Employees who
are eligible to be Participants in the Plan, the selection of Participants from
eligible Employees, the amounts of their benefits under the Plan, and the
construction and interpretation by the Personnel Committee of any provision of
the Plan, shall be final, conclusive and binding upon all parties including the
Company, its shareholders and its employees. No member of the Personnel
Committee shall be liable for any act done or determination made in good faith.
All expenses of administering the Plan shall be borne by the Company.

      8. Amendment or Termination of the Plan. The Board of Directors may
terminate this Plan at any time. The Board of Directors may amend or modify this
Plan from time to time in any respect. No such termination or amendment by the
Board of Directors shall divest a Participant of any benefit which had
previously accrued to him or which had previously become payable to him under
this Plan unless the Participant agrees in writing to such divestment.

      9. Non-Alienation of Benefits. Except by mutual agreement between the
Company and the Participant, any benefit which shall be payable under this Plan
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt at such shall be
void, and any such benefit shall not in any way be subject to the debts,
contract, liabilities, engagements, or torts of the person who shall be entitled
to such benefit, nor shall it be subject to attachment or legal process for or
against such person.

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      10. No Employment Rights. The receipt of benefits under this Plan shall
not give a Participant any right to continued employment by the Company and its
Subsidiaries; the right to terminate employment of any Participant, with or
without cause, is specifically reserved by the Company.

      11. Definitions. For purposes of this Plan, the following definitions
shall be applicable:

      a. "Employee" shall mean any person who is regularly employed on a salary
    basis by the Company or by a Subsidiary, including, but not limited to, any
    employee who is also an officer or director of the Company or of a
    Subsidiary.

      b. "Participant" shall mean any Employee who is entitled to a benefit
    under the provisions of Paragraph 4 and/or Paragraph 5 of the Plan.

      c. "Company" shall mean Houston Industries Incorporated.

      d. "Subsidiary" shall mean a company 50 percent or more of whose voting
    stock is owned (directly or through another Subsidiary) by Houston
    Industries Incorporated and which is an Employer under the Retirement Plan
    for Employees of Houston Industries Incorporated.

      e. "Board of Directors" shall mean the Board of Directors of Houston
    Industries Incorporated.

      f. "Personnel Committee" shall mean the committee designated as such from
   time to time by the Board of Directors of Houston industries Incorporated.

      g. "Restoration Participant" shall mean any Employee who is entitled to a
   benefit under the provisions of Paragraph 4 of the Plan.

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      h. "Supplemental Participant" shall mean any Employee who is entitled to a
   benefit under the provisions of Paragraph 5 of the Plan.

     12. Effective Date. The effective date of this amended and restated Plan
shall be July 1, 1991. Any benefits payable under this Plan to a Participant
whose employment terminated prior to July 1, 1991 shall be governed by the terms
of the Plan as in effect on the date of his termination. The Plan shall continue
until terminated by the Board of Directors as provided in paragraph 8.

     13. Applicable Law. The Plan administered hereunder shall be construed,
administered, and governed in all respects under the laws of the State of
Texas.

     IN WITNESS WHEREOF, Houston Industries Incorporated has caused these
presents to be executed by its duly authorized officers in a number of copies,
each of which shall be deemed an original, but all of which shall constitute the
same instrument, this 6th day of March, 1992, but effective as of July 1, 1991.

                                    HOUSTON INDUSTRIES INCORPORATED

                                    BY /s/ ROSS E. DOAN
                                       ---------------------------------
                                       Ross E. Doan, Vice President

ATTEST:

/s/ [ILLEGIBLE]
--------------------------------
Assistant Corporate Secretary

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                         HOUSTON INDUSTRIES INCORPORATED
                            BENEFIT RESTORATION PLAN

                (As Amended and Restated Effective July 1, 1991)

                                 First Amendment

               Houston Industries Incorporated, a Texas corporation (the
"Company"), having amended and restated the Houston Industries Incorporated
Benefit Restoration Plan, effective July 1, 1991 (the "Plan"), and having
reserved the right under Section 8 thereof to amend the Plan, does hereby amend
the Plan, effective as of the dates specified herein as follows:

               1.     Paragraph 4 of the Plan is hereby amended, effective
September 3, 1997, by adding the following to the end thereof:

        "If any Restoration Participant who has entered into a Severance
        Agreement, as defined in the Houston Industries Incorporated Executive
        Severance Benefits Plan, effective as of September 3, 1997, experiences
        a termination giving rise to a right to benefits under his Severance
        Agreement and complies with the conditions set forth in his Severance
        Agreement for the receipt of benefits thereunder, then such Restoration
        Participant's Retirement Plan Restoration Benefit under this section
        shall be calculated as if (a) the Restoration Participant were fully
        vested in the Retirement Plan and (b) the Restoration Participant had
        remained in the service of the Company or its Affiliates, as defined in
        his Severance Agreement, throughout the three-year period following the
        Change of Control, as defined in his Severance Agreement, or such other
        period as provided in the Restoration Participant's Severance
        Agreement."

               2.     Paragraph 5 of the Plan is hereby amended, effective
September 3, 1997, by adding the following to the end thereof:

        "If any Supplemental Participant who has entered into a Severance
        Agreement with Company experiences a termination giving rise to a right
        to benefits under his Severance Agreement and complies with the
        conditions set forth in his Severance Agreement for the receipt of
        benefits thereunder, then such Supplemental Participant's Supplemental
        Retirement Benefit under this section shall be calculated as if (a) the
        Supplemental Participant were fully vested in the Retirement Plan and
        (b) the Supplemental Participant had remained in the service of the
        Company or its Affiliates, as defined in his Severance Agreement,
        throughout the three-year period following the Change of Control, as
        defined in his Severance Agreement, or such other period as provided in
        the Supplemental Participant's Severance Agreement."

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               3.     Paragraph 11.c. of the Plan is hereby amended, effective
August 6, 1997, to read as follows:

               "c.    'Company' shall mean Houston Industries Incorporated, any
        successor thereto, and/or any subsidiaries adopting the Plan with
        approval of the Board of Directors."

               4.     A new paragraph 14 shall be added to the Plan, effective
October 1, 1997, which shall read as follows:

               "14. OPCO as Successor Employer. Effective on or about October 1,
        1997, STP Nuclear Operating Company, a Texas nonprofit corporation
        ("OPCO" herein), assumed the responsibilities of Houston Lighting &
        Power Company ("HL&P herein), a division of the Company, as project
        manager of the South Texas Project. In connection therewith, OPCO
        employed substantially all of the former employees of HL&P stationed at
        the South Texas Project who have been engaged in the operation and
        management of the South Texas Project as employees of HL&P ("OPCO
        Employees"). Section 8.6.4 of that certain South Texas Project
        Transition Agreement between the Company and the remaining owners of the
        South Texas Project, dated effective November 17, 1997, provides that
        OPCO shall assume any and all liabilities for providing benefits under
        this Plan to the former HL&P employees who became OPCO Employees. In
        furtherance thereof, the liabilities for benefits accrued under this
        Plan as of September 30, 1997 with respect to OPCO Employees have been
        transferred from the books and records of the Company to the books and
        records of OPCO. Accordingly, from and after October 1, 1997, the
        Company shall have no further obligation with respect to such benefits,
        if any, accrued under this Plan on behalf of OPCO Employees and the OPCO
        Employees shall look solely to the OPCO Plan and OPCO for the payment of
        such benefits."

               IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officers in a number of
copies, all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this 26th day of
February, 1998, but effective as of the dates specified herein.

                                 HOUSTON INDUSTRIES INCORPORATED

                                 By    /s/ LEE W. HOGAN
                                   -------------------------------------------
                                   Name:     Lee W. Hogan
                                        --------------------------------------
                                   Title:    Executive Vice President
                                         -------------------------------------
ATTEST:

/s/ [ILLEGIBLE]
------------------------------
Assistant Corporate Secretary

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                                                                   EXHIBIT 10.25

                         HOUSTON INDUSTRIES INCORPORATED

                           DEFERRED COMPENSATION PLAN

                                   ARTICLE ONE

                   PURPOSES OF PLAN; DEFINITIONS; DURATION

            1.1   Purposes. This Deferred Compensation Plan of Houston
Industries Incorporated for selected management and highly compensated employees
is intended to provide greater incentives to attain and maintain their highest
standards of performance.

            1.2   Definitions. Each term below shall have the meaning assigned
thereto for all purposes of this Plan unless the context requires a different
construction.

            (a)   "Affiliate" means any corporation in which the shares owned or
       controlled, directly or indirectly, by the Company represent eighty
       percent (80%), or more, of the voting power of the issued and outstanding
       capital stock of such corporation, and a corporation which owns or
       controls, directly or indirectly, eighty percent (80%), or more, of the
       voting power of the issued and outstanding capital stock of the Company,
       and any corporation in which eighty percent (80%), or more, of the voting
       power of the issued and outstanding capital stock is owned or controlled,
       directly or indirectly, by any corporation which owns or controls,

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       directly or indirectly, eighty percent (80%), or more, of the voting
       power of the issued and outstanding capital stock of the Company.

            (b)   "Age" means the Participant's age on his birthday nearest the
       applicable Commencement Date.

            (c)   "Agreement" means the Deferred Compensation Agreement between
       the Employer and the Participant describing the Benefits payable to the
       Participant under the Plan with respect to salary deferrals and Bonus
       deferrals for a Participation Year. Deferrals for each separate
       Participation Year will be covered by a separate Agreement.

            (d)   "Beneficiary" means a person or persons designated by the
       Participant, as provided in Section 4.1, to receive any amounts
       distributed under the Plan after Participant's death.

            (e)   "Bonus" means a formula or discretionary bonus or incentive
       compensation paid by an Employer, including, but not limited to, a vested
       award under Houston Lighting & Power Company's Executive Incentive
       Compensation Plan, granted after September 1, 1985.

            (f)   "Company" means Houston Industries Incorporated, or any
       successor thereto.

            (g)   "Commencement Date" means the first day of the Participation
       Year with respect to which a

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       Compensation deferral occurs, except that for the 1985 Participation
       Year, the Commencement Date is October 1, 1985.

            (h)   "Committee" means the Compensation and Benefits Committee of
       the Company or such other committee, which shall consist of five (5) or
       fewer persons, as shall be appointed by the Board of Directors of the
       Company to administer the Plan pursuant to Article Two hereof. The Board
       of Directors of the Company may remove a Committee member for any reason
       by giving him ten (10) days' written notice, and shall fill any vacancy
       thus created.

            (i)   "Compensation" means the salary and Bonus which an Employer
       pays its Employees, and the retainer fee paid to a Director by an
       Employer.

            (j)   "Director" means a member of the Board of Directors of an
      Employer who is not an Employee of the Company or an Affiliate.

            (k)   "Early Retirement Date" means with respect to an Employee the
       first day of the month coincident with or next following his 60th
       birthday; and means with respect to a Director the first day of the month
       coincident with or next following his resignation or removal as a
       Director before his Normal Retirement Date.

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            (1)   "Employee" means any person, including an officer of any
       Employer (whether or not he is also a director thereof), who, at the
       time such person is designated a Participant hereunder, is employed by
       the Employer on a full-time basis, who is compensated for such
       employment by a regular salary, and who, in the opinion of the Committee,
       is one of the officers or other key employees of the Employer in a
       position to contribute materially to the continued growth and development
       and to the future financial success of the Employer.

            (m)   "Employer" means the Company and each Affiliate which has
       adopted this Plan.

            (n)   "Employment" means employment with an Employer or currently
       acting as a Director of an Employer. Neither the transfer of a
       Participant from employment by the Company to employment by an Affiliate
       nor the transfer of a Participant from employment by an Affiliate to
       employment by the Company shall be deemed to be a termination of
       Employment of the Participant. Moreover, the Employment of a Participant
       shall not be deemed to have been terminated because of his absence from
       active employment on account of temporary illness or during authorized
       vacation or during temporary leaves of absence, granted by the Employer
       for reasons

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       of professional advancement, education, health, or government service, or
       during military leave for any period if the Participant returns to active
       employment within 90 days after the termination of his military leave, or
       during any period required to be treated as a leave of absence by virtue
       of any valid law or agreement.

            (o)   "Moody's Rate" means a rate of interest equal to the composite
       yield on Moody's Seasoned Corporate Bond Yield Index for the calendar
       month 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.

            (p)   "Normal Retirement Date" means with respect to an Employee the
       first day of the month coincident with or next following his 65th
       birthday or the date of his termination of employment, if later, and
       means with respect to a Director the first day of the month coincident
       with or next following his 70th birthday.

            (q)   "Participant" means an Employee or a Director who has been
       designated by the Committee to participate in the Plan pursuant to
       Section 3.2 or 3.6 hereof.

            (r)   "Participation Year" means (i) with respect to Compensation in
       the form of a Bonus, the Plan Year

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        during which the Bonus would have been paid if not deferred, and (ii)
        with respect to Compensation in the form of salary, the Plan Year during
        which a Participant performs services for the Employer for a salary.

               (s)    "Plan" means the Houston Industries Incorporated Deferred
        Compensation Plan set forth herein, as the same may hereafter be amended
        from time to time.

               (t)    "Plan Year" means the calendar year.

               (u)    "Disability" means a physical or mental condition which
        qualifies as a total and permanent disability under the Houston
        Industries Incorporated Long Term Disability Plan.

               1.3    Term.  The effective date of the Plan is September 1,
1985. The Plan shall continue until terminated by the Board of Directors of the
Company. The Committee, in its sole discretion, may or may not authorize
deferral of Compensation during the term of the Plan.

                                   ARTICLE TWO

                                 ADMINISTRATION

               The Plan shall be administered by the Compensation and Benefits
Committee of the Company (the "Committee"). The Committee shall represent the
Company and other Employers in all matters concerning the administration of the
Plan. Members of the Committee may be Participants under the Plan, but no Member
may vote on any matter

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relating to his benefits under the Plan. The Committee shall have primary
responsibility for the administration and operation of the Plan and shall have
all powers necessary to carry out the provisions of the Plan, including the
power to determine which Employees and Directors shall be Participants under
the Plan and which Compensation may be subject to deferral. The determination
of the Committee as to the construction, interpretation, or application of any
terms and provisions of the Plan, including whether and when there has been a
termination of an Employee's employment, shall be final, binding, and
conclusive upon all persons.

                                  ARTICLE THREE

                                  PARTICIPATION

               3.1    Eligibility of Employees and Directors. An Employee must
be a manager or a highly compensated salaried employee of an Employer to be
eligible to participate in the Plan. All Directors shall be eligible to
participate in the Plan. The Committee may from time to time establish
additional eligibility requirements for participation in the Plan.

               3.2    Designation of Participants. Prior to the commencement of
any Participation Year after 1985 the Committee shall designate and notify in
writing the Employees and/or Directors who are eligible to elect to defer
Compensation as provided in Section 5.1 hereof. A

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designation of an Employee or Director to participate with respect to
Compensation for a particular Participation Year shall not automatically
entitle such Participant to participate with respect to any other Participation
Year. The Committee may, in its sole discretion, notify a Participant that he
is entitled to participate with respect to all future Compensation for all
Participation Years beginning after the date of notification by the Committee
in which event the Participant may continue to participate and elect to defer
Compensation awarded in respect of future Participation Years until such time
as the Committee notifies the Participant in writing that he may not
participate for particular future Participation Years.

               3.3    Election to Participate. After a Participant has been
notified by the Committee that he is eligible to participate in the Plan, he
must, in order to participate in the Plan, notify the Committee in writing of
his election to so participate. The election to participate in the Plan shall
be effective upon the receipt by the Committee of the Participant's written
election to defer Compensation which specifies the type or types and the amount
or amounts of his Compensation that he wishes to defer and the manner of such
deferral pursuant to Section 3.4, 3.5, or 3.6 hereof.

               3.4    Salary Deferral. A Participant's election to defer the
payment of salary for 1986 and subsequent Plan

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<PAGE>   9

Years must be made prior to December 1st of the Plan Year preceding the Plan
Year in which the salary is earned by the Participant. Such election will be
irrevocable as of December 31 of the calendar year preceding the calendar year
in which the salary is earned.

               A Participant may not elect to defer less than $2,000 for any
Participation Year and may not elect to defer more than 40% of his annual
salary in any Participation Year in which the Participant is Age 50 or older,
and may not elect to defer more than 25% of his annual salary in any
Participation Year in which the Participant is Age 49 or younger.

               The amount of Compensation elected to be deferred pursuant to
this Section 3.4 shall be withheld from the Participant's salary during a Plan
Year in equal semi-monthly amounts.

               3.5    Bonus Deferral. A Participant's election to defer the
payment of a Bonus must be made prior to, and will become irrevocable on, the
earlier of (a) December 1st of the Plan Year before the Participation Year with
respect to which the Bonus is paid, or (b) the date on which the amount of
Bonus to be paid to the Participant for such Participation Year is determined
or determinable by the Board.

                                      -9-

<PAGE>   10

               A Participant may not elect to defer more than 100% of his annual
cash Bonus award with respect to a particular Participation Year, nor less than
$2,000 for each Participation Year.

               The amount of Compensation elected to be deferred under this
Section 3.5 shall not be paid but shall be deemed to have been deferred in one
lump sum on the Commencement Date of the applicable Participation Year. If the
amount of Bonus awarded to the Participant with respect to a Participation Year
is less than the amount of Bonus which the Participant had elected to defer for
such Participation Year, the entire amount of the Bonus awarded shall be
deferred in accordance with this Section 3.5, and no further deferral shall be
made with respect to such election for such Participation Year.

               3.6    Participation for the Participation Year Ending December
31, 1985.  Notwithstanding any other provision of the Plan to the contrary, for
the Participation Year ending December 31, 1985, the Committee may select and
notify eligible Participants, in accordance with the provisions of Section 3.2
hereof, at any time on or before September 1, 1985.

               Any such eligible Participant may elect in writing, in accordance
with the provisions of Section 3.3 hereof, at any time on or before the date
which follows by

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thirty days the date on which such Participant is so notified to defer the
payment of any portion of his Compensation earned subsequent to October 1, 1985
and prior to December 31, 1985, up to the maximum salary deferral authorized
under Section 3.4. Such election shall be irrevocable as of the date which
follows by thirty days the date on which the Participant is so notified that he
is eligible to participate in the Plan. The amount of Compensation elected to be
deferred pursuant to this paragraph shall be withheld from the Participant's
salary received subsequent to October 1, 1985 during the calendar year ending
December 31, 1985, in equal semi-monthly amounts.

               3.7    Waiver or Suspension of Deferral. The Committee may, in
its sole discretion, grant a waiver or suspension of a Participant's irrevocable
deferral election under this Article Three for such time as the Committee may
deem to be necessary upon a finding that the Participant has suffered a
financial hardship.

                                  ARTICLE FOUR

                  BENEFICIARY DESIGNATIONS; WITHHOLDING

               4.1    Beneficiary Designations. Each person becoming a
Participant shall file with the Committee a designation of one or more
Beneficiaries to whom distributions otherwise due the Participant shall be made
in the

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event of his death while in the employ of the Company or after termination of
employment but prior to the complete distribution of the benefits payable with
respect to the Participant. Such designation shall be effective when received in
writing by the Committee. The Participant may from time to time revoke or change
any such designation of the Beneficiary by written document delivered to the
Committee. If there is no valid designation of the Beneficiary on file with the
Committee at the time of the Participant's death, or if all of the Beneficiaries
designated therein shall have predeceased the Participant or otherwise ceased to
exist, the Beneficiary shall be, and any payment hereunder shall be made to,
the Participant's spouse, if she survives the Participant, otherwise to the
Participant's estate. If the Beneficiary, whether under a valid beneficiary
designation or under the preceding sentence, shall survive the Participant but
die before receiving all payments hereunder, the balance of the benefits which
would have been paid to the Beneficiary had he or she lived shall, unless the
Participant's designation provided otherwise, be distributed to the
Beneficiary's estate.

               4.2    Withholding of Taxes. The Committee shall cause the
Employer to deduct from the amount of all benefits paid under the Plan any taxes
required to be withheld by the Federal Government or any state or local
government.

                                      -12-
<PAGE>   13
                                  ARTICLE FIVE

                                    BENEFITS

           5.1   Benefit Payments. The benefit payments with respect to
deferrals for a specific Participation Year will be determined by the amount of
Compensation deferred during that Participation Year and the Participant's Age
on the Commencement Date, as set forth below:

           (a)   A Participant who has attained Age 58 or older on the
      Commencement Date of a Participation Year during which part of his
      Compensation is deferred will receive 15 annual installment payments from
      his Employer commencing on the first day of the month following his
      termination of employment on or after his Normal Retirement Date. A
      Participant who has attained Age 55, 56 or 57 on the Commencement Date of
      a Participation Year during which part of his Compensation is deferred
      will receive equal annual installments for three years if Age 55, or for
      two years if Age 56, or will receive a single payment if age 57, to
      commence or to be paid on the seventh anniversary of the Commencement
      Date, provided he remains in the continuous employ of his Employer from
      the Commencement Date through the dates of payment of such annual
      installments or such single payment. Each such Participant Age 55, 56 or
      57

                                      -13-

<PAGE>   14

      on any such Commencement Date will also receive annual installment
      payments for 15 years commencing on the first of the month following his
      termination of employment on or after his Normal Retirement Date. In any
      case where payments pursuant to this Section 5.1(a) are to commence later
      than the Participant's Normal Retirement Date, the amount of such payments
      otherwise payable commencing on the Participant's Normal Retirement Date
      shall be increased by application of the interest rate specified in his
      Agreement, compounded annually from his Normal Retirement Date until the
      date of the first such payment.

           (b)   A Participant who has not attained Age 55 on the Commencement
      Date of a Participation Year during which part of his Compensation is
      deferred will receive equal annual installments for four years commencing
      on the seventh anniversary of the Commencement Date, provided he remains
      in the continuous employ of his Employer from the Commencement Date
      through the dates of payment of such annual installments. Such a
      Participant will also receive annual installment payments for 15 years
      commencing on the first of the month following his termination of
      employment on or after his Normal Retirement Date. In any case where such
      15 annual installment payments pursuant to this

                                      -14-

<PAGE>   15

      Section 5.1(b) are to commence later than the Participant's Normal
      Retirement Date, the amount of such payments otherwise payable commencing
      on his Normal Retirement Date shall be increased by application of the
      interest rate specified in his Agreement, compounded annually, from his
      Normal Retirement Date until the date of the first such payment.

           (c)   Any Participant who terminates employment after his Early
      Retirement Date (or an earlier date if authorized by the Committee in its
      discretion) but prior to his Normal Retirement Date, will (if he is living
      on the date of payment) receive 15 equal annual installment payments
      commencing on the first of the month following his Normal Retirement Date.
      Such commencement date may be accelerated by the Committee, in its sole
      discretion, but could not occur before a Participant's termination of
      employment. In any case where 15 annual installment payments pursuant to
      this Section 5.1(c) are to commence earlier than the Participant's Normal
      Retirement Date, the amount of such payments otherwise payable commencing
      on the Participant's Normal Retirement Date shall be reduced and
      discounted to reflect early receipt by application of the interest rate
      specified in the Participant's

                                      -15-

<PAGE>   16
      Agreement, compounded annually, for the period from the date of payment
      to the Participant's Normal Retirement Date.

           (d)   The amount of benefit payments will be stated in the Agreement
      between the Employer and the Participant, based on the Company's
      administrative guidelines under the Plan.

           (e)   Any benefit payable in installments, in the discretion of the
      Committee, may be commuted to a lump sum payment or may be paid over a
      shorter period of time on the basis of the interest rate specified in the
      Participant's Agreement, compounded annually.

           5.2   Death

           (a)   If a Participant dies (i) prior to his Normal Retirement Date
      and prior to his termination of employment, or (ii) after his termination
      of employment having met the requirements for 15 annual installment
      payments pursuant to Section 5.l(c) as of the date of such termination,
      but prior to the commencement of such 15 annual installments payments, the
      payments otherwise described in Section 5.1 not theretofore made shall not
      be made, but the Employer shall pay Participant's Beneficiary the sum or
      sums actually deferred with interest thereon compounded annually from the
      Commencement Date through the date of payment at the

                                      -16-

<PAGE>   17

      annual percentage rate specified in the Participant's Agreement, less an
      amount equal to the benefits paid prior to Participant's death with
      interest thereon at such annual rate compounded annually from the date of
      such prior benefit payment through the date of payment of the death
      benefit pursuant to this Section 5.2(a). The payment pursuant to this
      Section 5.2(a) shall be made within 90 days following the date of
      Participant's death.

           (b)   If Participant dies (i) after his Normal Retirement Date but
      prior to his termination of employment, (ii) after his termination of
      employment, provided he had attained his Normal Retirement Date on or
      before the date of such termination, or (iii) after commencement of 15
      annual installment payments pursuant to Section 5.l but prior to
      completion of all such payments, the Employer shall make (or continue to
      make) such payments provided for in Section 5.1 to the Participant's
      Beneficiary.

           (c)   Any death benefit payable in installments, in the discretion of
      the Committee, may be commuted to a lump sum payment or may be paid over a
      shorter period of time on the basis of the interest rate specified in the
      Participant's Agreement, compounded annually.

                                      -17-

<PAGE>   18

           5.3   Disability. In the event of the Disability of a Participant
while in the employ of an Employer, the Participant shall be considered to have
remained in the continuous employment of the Employer during his Disability
until his Normal Retirement Date or earlier death. The benefits payable to such
Participant under the Plan shall be paid in the amounts and at the times
otherwise provided in Section 5.1, except that the Committee, in its discretion,
may commute any such payments to a lump sum payment or may pay any such payments
over a shorter period of time on the basis of the interest rate specified in the
Participant's Agreement, compounded annually.

           5.4   Payment Upon Termination of Employment. If the employment of a
Participant who is an Employee of an Employer is terminated for any reason other
than death, retirement at or after his Normal Retirement Date, or early
retirement in accordance with the provisions of Section 5.1(c), the 15 annual
installment payments described in Section 5.1 shall not be made, but the
Employer shall pay the Participant the sum or sums actually deferred with
interest thereon compounded annually from the Commencement Date through the date
of payment, at a rate determined as follows:

           (a)   If the date of Participant's termination of employment occurs
      prior to the seventh anniversary of

                                      -18-

<PAGE>   19

      the Commencement Date, the interest rate shall be the lesser of (i)
      Moody's Rate, or (ii) the annual percentage rate specified in
      Participant's Agreement.

           (b)   If the date of Participant's termination of employment occurs
      after the seventh anniversary of the Commencement Date, the interest rate
      shall be the annual percentage rate specified in Participant's Agreement.

Notwithstanding the foregoing, the amount payable under this Section 5.4 shall
be reduced by an amount equal to any benefits paid prior thereto with interest
thereon at the rate determined in accordance with the foregoing compounded
annually from the date of such prior benefit payment through the date of the
termination payment pursuant to this Section 5.4. The payment pursuant to this
Section 5.4 shall be made on the first of the month coincident with or next
following the expiration of 90 days following the date of Participant's
termination of employment.

           5.5   Termination of Employment During Participation Year. If
Participant terminates his employment with Employer for any reason during the
Participation Year for which Compensation is to be deferred, the amount of
deferral specified in his Agreement for that Participation Year shall be
adjusted to equal the actual deferral amount for the Participation Year prior to
such

                                      -19-

<PAGE>   20

termination. In addition, any Benefits payable in accordance with this Plan
shall be proportionately reduced to reflect such actual deferral amount.

                                   ARTICLE SIX

                             RIGHTS OF PARTICIPANTS

           6.1   Limitation of Rights. Nothing in this Plan shall be construed
to:

           (a)   Give any Employee of an Employer any right to be designated a
      Participant in the Plan other than in the sole discretion of the
      Committee;

           (b)   Limit in any way the right of the Employer to terminate a
      Participant's employment at any time; or

           (c)   Be evidence of any agreement or understanding, express or
      implied, that the Company or any other Employer will employ a Participant
      in any particular position or at any particular rate of remuneration.

           6.2   Nonalienation of Benefits. 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 in any manner be liable for or subject to any debts, contracts,
liabilities or torts of any Participant or other person entitled to such
benefits. The foregoing provisions of this Section 6.2

                                      -20-

<PAGE>   21

shall not apply to a domestic relations order awarding any benefits under the
Plan to the divorced spouse of a Participant.

           6.3   Prerequisites to Benefits. No Participant, nor any Beneficiary
or other person claiming through a Participant, shall have any right or interest
in the Plan, or any benefits hereunder, unless and until all the terms,
conditions, and provisions of the Plan which affect such Participant or such
other person shall have been complied with as specified herein.

           6.4   Nature of Employer's Obligation. This Plan is intended to be,
and shall be construed as, an unfunded plan maintained by each Employer
primarily for the purpose of providing deferred compensation for a select group
of its management or highly compensated employees. The benefits provided under
this Plan shall be a general, unsecured obligation of the Employer payable
solely from the general assets of the Employer, and neither the Participant nor
the Participant's Beneficiary or estate shall have any interest in any assets of
the Employer by virtue of this Plan. No fund or other assets will ever be set
aside or segregated for the benefit of the Participant or the Participant's
Beneficiary under this Plan. The adoption of the Plan and any setting aside of
amounts by an Employer with which to discharge its obligations hereunder shall
not be deemed to

                                      -21-

<PAGE>   22

create a trust; legal and equitable title to any funds so set aside shall remain
in the Employer and any funds so set aside shall remain subject to the general
creditors of the Employer. If it becomes necessary for a Participant to
institute a claim, by litigation or otherwise, to enforce his rights under the
Plan, the Employer shall indemnify Participant from and against all costs and
expenses, including legal fees, incurred by him instituting and maintaining such
claim.

                                  ARTICLE SEVEN

                                  MISCELLANEOUS

           7.1   Amendment or Termination of the Plan. The Board of Directors of
the Company may amend or terminate this Plan at any time. Any such amendment or
termination shall not, however, affect the rights of any Participant to any
accrued benefits payable under the Plan.

           7.2   Reliance Upon information. The Committee shall not be liable
for any decision or action taken in good faith in connection with the
administration of this Plan. Without limiting the generality of the foregoing,
any such decision or action taken by the Committee in reliance upon any
information supplied to it by an officer of the Company, the Company's legal
counsel, or the Company's independent accountants in connection with the
administration of this Plan shall be deemed to have been taken in good faith.

                                      -22-

<PAGE>   23

           7.3   Effective Date. The Plan shall become effective as of September
1, 1985.

           7.4   Governing Law. The Plan shall be construed, administered, and
governed in all respects under the laws of the State of Texas.

           7.5   Severability. If any term, provision, covenant, or condition of
the Plan is held to be invalid, void, or otherwise unenforceable, the rest of
the Plan shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated.

           7.6   Notice. Any notice or filing required or permitted to be given
to the Committee under this Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal office of
the Company. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the dates shown on the postmark on the receipt
for registration or certification.

           IN WITNESS WHEREOF, the Company has executed these presents as
evidenced by the signatures affixed hereto of its officers hereunto duly
authorized and by its corporate seal being affixed hereto, in a number of
copies, all of which shall constitute but one and the same instrument which

                                      -23-

<PAGE>   24

may be sufficiently evidenced by any executed copy hereof, as of September 1,
1985.

                                       HOUSTON INDUSTRIES INCORPORATED

                                       By  /s/ [ILLEGIBLE]
                                         --------------------------------------
                                         President

ATTEST:

/s/ [ILLEGIBLE]
----------------------------------
Secretary

[SEAL]

                                      -24-

<PAGE>   25
                        HOUSTON INDUSTRIES INCORPORATED

                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                                 First Amendment

           Houston Industries Incorporated, a Texas corporation (the "Company"),
having established the Houston Industries Incorporated Deferred Compensation
Plan, effective September 1, 1985 (the "Plan"), and having reserved the right to
amend the Plan under Section 7.1 thereof, does hereby amend the Plan, effective
as of September 1, 1985, as follows:

           1.    Section 5.1(a) of the Plan is hereby amended to read as
           follows:

                 "(a) A Participant who has attained Age 58 or older on the
           Commencement Date of a Participation Year during which part of his
           Compensation is deferred will receive 15 annual installment payments
           from his Employer commencing on the first day of the month following
           his termination of employment on or after his Normal Retirement Date.
           A Participant who has attained Age 55, 56 or 57 on the Commencement
           Date of a Participation Year during which part of his Compensation is
           deferred will receive equal annual installments for three years if
           Age 55, or for two years if Age 56, or will receive a single payment
           if Age 57, to commence or to be paid on the seventh anniversary of
           the Commencement Date, provided he remains in the continuous employ
           of his Employer from the Commencement Date through the date(s) of
           payment of such annual installment(s) or, if applicable, his Early
           Retirement Date. Each such Participant Age 55, 56 or 57 on any such
           Commencement Date will also receive annual installment payments for
           15 years commencing on the first of the month following his
           termination of employment on or after his Normal Retirement Date. In
           any case where payments pursuant to this Section 5.1(a) are to
           commence later than the Participant's Normal Retirement Date, the
           amount of such payments otherwise payable commencing on the
           Participant's Normal Retirement Date shall be increased by
           application of the

                                      -1-

<PAGE>   26
           interest rate specified in his Agreement, compounded annually from
           his Normal Retirement Date until the date of the first such payment."

           2.    Section 5.1(b) of the Plan is hereby amended to read as
           follows:

                 "(b) A Participant who has not attained Age 55 on the
           Commencement Date of a Participation Year during which part of his
           Compensation is deferred will receive equal annual installments for
           four years commencing on the seventh anniversary of the Commencement
           Date, provided he remains in the continuous employ of his Employer
           from the Commencement Date through the date(s) of payment of such
           annual installment(s) or, if applicable, his Early Retirement Date.
           Such a Participant will also receive annual installment payments for
           15 years commencing on the first of the month following his
           termination of employment on or after his Normal Retirement Date. In
           any case where such 15 annual installment payments pursuant to this
           Section 5.1(b) are to commence later than the Participant's Normal
           Retirement Date, the amount of such payments otherwise payable
           commencing on his Normal Retirement Date shall be increased by
           application of the interest rate specified in his Agreement,
           compounded annually, from his Normal Retirement Date until the date
           of the first such payment."

           3.    Section 5.1(e) of the Plan is hereby amended to read as
           follows:

                 "(e) Any installment benefits, at the request of the
           Participant and in the sole discretion of the Committee, may be
           commuted to a lump sum payment or may be paid over a shorter period
           of time on the basis of the interest rate specified in the
           Participant's Agreement, compounded annually."

           4.    Section 5.2(c) of the Plan is hereby amended to read as
           follows:

                 "(c) Any installment death benefits, at the request of the
           Beneficiary and in the sole discretion of the Committee, may be
           commuted to a lump sum payment or may be paid over a shorter period
           of time on the basis of the interest rate specified in the
           Participant's Agreement, compounded annually."

                                      -2-

<PAGE>   27

           5.    The second sentence of Section 5.3 is hereby amended to read as
           follows:

                 "The benefits payable to each Participant under the Plan shall
           be paid in the amounts and at the times otherwise provided in Section
           5.1, except that at the request of the Participant and in the sole
           discretion of the Committee any such payments may be commuted to a
           lump sum payment or may be paid over a shorter period of time on the
           basis of the interest rate specified in the Participant's Agreement,
           compounded annually."

           IN WITNESS WHEREOF, Houston Industries Incorporated has caused these
presents to be executed by its duly authorized officers and to be affixed with
its corporate seal, in a number of copies, all of which shall constitute but one
and the same instrument which may be sufficiently evidenced by any executed copy
hereof, this 20th day of February, 1991, but effective as of September 1, 1985.

                                              HOUSTON INDUSTRIES INCORPORATED

                                              By /s/ ROSS E. DOAN
                                                --------------------------------

ATTEST:

/s/ [ILLEGIBLE]
--------------------------------------
Assistant Secretary

[SEAL]

                                      -3-

<PAGE>   28
                         HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                                Second Amendment

           Houston Industries Incorporated, a Texas corporation (the "Company"),
having established the Houston Industries Incorporated Deferred Compensation
Plan, effective September 1, 1985 (the "Plan"), and having reserved the right to
amend the Plan under Section 7.1 thereof, does hereby amend Article V of the
Plan by adding the following Section 5.6 thereto, effective March 30, 1992:

           "5.6 Termination Under the Separation Program.
           (a) Voluntary Terminations. (i) Prior to Early Retirement Date.
           Notwithstanding any other provision of the Plan to the contrary, if
           the employment of a Participant is terminated voluntarily under the
           Voluntary Early Retirement Program adopted by the Board of Directors
           of the Company on January 8, 1992 and prior to the first day of the
           month coincident with or next following the Participant's sixtieth
           (60th) birthday, a Normal Retirement Distribution as described in
           Section 5.1 shall not be made, but the Employer (x) shall pay the
           Participant the sum or sums of Compensation actually deferred, with
           interest thereon, compounded annually, at the applicable interest
           rate specified in the Participant's agreement for each Participation
           Year, from the Commencement Date through the date of payment, (y)
           shall pay such amount in fifteen (15) annual installment payments, in
           accordance with Section 5.1(b) above, commencing the month following
           the month in which the Participant terminates employment and payable
           thereafter in that same month in each remaining year, and (z) shall
           not make any equal annual installments to such Participant.

           (ii) After Early Retirement Date. If the employment of a Participant
           is terminated voluntarily as described in (a)(i) above but after the
           first day of the month coincident with or next following the
           Participant's sixtieth (60th) birthday, distributions (including the
           equal annual installments) shall be made as otherwise provided in
           this Article V.

<PAGE>   29

           (b) Involuntary Terminations. (i) Prior to Early Retirement Date.
           Notwithstanding any other provision of the Plan to the contrary, if
           the employment of a Participant is terminated involuntarily under the
           severance program adopted by the Board of Directors of the Company on
           January 8, 1992 and prior to the first day of the month coincident
           with or next following the Participant's sixtieth (60th) birthday, a
           Normal Retirement Distribution as described in Section 5.1 shall not
           be made, but the Employer (a) shall pay the Participant the sum or
           sums of Compensation actually deferred, with interest thereon,
           compounded annually, at the applicable interest rate specified in the
           Participant's agreement for each Participation Year, from the
           Commencement Date through the date of payment, (b) shall pay such
           amount in a lump sum within ninety-five (95) days following the date
           of Participant's termination of employment or as soon as practicable
           thereafter, and (c) shall not make any equal annual installments to
           such Participant.

           (ii) After Early Retirement Date. If the employment of a
           Participant is terminated involuntarily as described in (b)(i) above
           but after the first day of the month coincident with or next
           following the Participant's sixtieth (60th) birthday, distributions
           (including the equal annual installments) shall be made as otherwise
           provided in this Article V.

           (c) Commutation. Any installment payments hereunder may be commuted
           as provided in Section 5.1(e)."

           IN WITNESS WHEREOF, Houston Industries Incorporated has caused these
presents to be executed by its duly authorized officers, in a number of copies,
all of which shall constitute but one and the same instrument which may be
sufficiently evidenced by any executed copy hereof, this 27th day of March,
1992, but effective March 30, 1992.

                                              HOUSTON INDUSTRIES INCORPORATED

                                              By     /s/ ROSS E. DOAN
                                                 -------------------------------
                                                        Vice President

ATTEST:

/s/ [ILLEGIBLE]
------------------------------------
Assistant Corporate Secretary

                                      -2-

<PAGE>   30

                         HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                                 Third Amendment

           Houston Industries Incorporated, a Texas corporation (the "Company"),
having established the Houston Industries Incorporated Deferred Compensation
Plan, effective September 1, 1985 (the "Plan"), and having reserved the right to
amend the Plan under Section 7.1 thereof, does hereby amend Article V of the
Plan by adding the following Section 5.7 thereto, effective June 2, 1993:

           "5.7 Terminations Under the UFI Severance Program. (a) Prior to Early
           Retirement Date. Notwithstanding any other provision of the Plan to
           the contrary, if the employment of a Participant is terminated under
           the Utility Fuels, Inc. severance program, on or after July 26, 1993,
           and prior to the first day of the month coincident with or next
           following the Participant's sixtieth (60th) birthday, a Normal
           Retirement Distribution as described in Section 5.1 shall not be
           made, but the Employer (i) shall pay the Participant the sum or sums
           of Compensation actually deferred, with interest thereon, compounded
           annually, at the applicable interest rate specified in the
           Participant's agreement for each Participation Year, from the
           Commencement Date through the date of payment, (ii) shall pay such
           amount in a lump sum within ninety-five (95) days following the date
           of Participant's termination of employment or as soon as practicable
           thereafter (or, if a Participant is designated to receive installment
           payments as determined in the sole discretion of the Chief Operating
           Officer of the Company, shall pay such amount in fifteen (15) annual
           installment payments, in accordance with Section 5.1(b) above,
           commencing the month following the month in which such designated
           Participant terminates employment and payable thereafter in that same
           month in each remaining year), and (iii) shall not make any equal
           annual installments to such Participant after the date of
           termination.

<PAGE>   31
           (b) After Early Retirement Date. If the employment of a Participant
           is terminated as described in (a) above but after the first day of
           the month coincident with or next following the Participant's
           sixtieth (60th) birthday, distributions (including the equal annual
           installments) shall be made as otherwise provided in this Article V.

           (c) Commutation. Any installment payments hereunder may be commuted
           as provided in Section 5.1(c)."

           IN WITNESS WHEREOF, Houston Industries Incorporated has caused these
presents to be executed by its duly authorized officers in a number of copies,
all of which shall constitute but one and the same instrument which may be
sufficiently evidenced by any executed copy hereof, this 23rd day of November,
1993, but effective June 2, 1993.

                                           HOUSTON INDUSTRIES INCORPORATED

                                           By: /s/ [ILLEGIBLE]
                                              ----------------------------

ATTEST:

/s/ [ILLEGIBLE]
----------------------------------
Assistant Corporate Secretary
<PAGE>   32
                         HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                       (As Established September 1, 1985)

                                Fourth Amendment

               Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985 (the "Plan"), and having reserved
the right under Section 7.1 thereof to amend the Plan, does hereby amend Section
6.2 of the Plan, effective September 7, 1994, to read as follows:

               "6.2   Non-Alienation of Benefits. No right or benefit under this
        Plan shall be subject to anticipation, alienation, transfer, sale,
        assignment, pledge, encumbrance or charge, whether voluntary,
        involuntary, direct or indirect, by operation of law or otherwise,
        including, without limitation, a change in beneficial interest of any
        trust and a change in ownership of a corporation or partnership, but not
        including a change of legal and beneficial title of a right or benefit
        resulting from the death of any Participant or the spouse of any
         Participant (any such proscribed transaction hereinafter a
         'Disposition') and any attempted Disposition will be null and void. No
         right or benefit hereunder shall in any manner be liable for or subject
         to any debts, contracts, liabilities, or torts of any Participant or
         other person entitled to such benefits. The foregoing provisions of
         this Section 6.2 shall not apply to a domestic relations order awarding
         any benefits under the Plan to the divorced spouse of a Participant.
         The foregoing provisions of this Section 6.2 shall also not apply to an
         irrevocable Disposition of a right or benefit under this Plan to a
         'Permitted Assignee,' as defined below, by (i) a Participant age 55 or
         older (an 'Eligible Participant'), or (ii) a 'Permitted Assignee,' as
         defined below, who has received an assignment from an Eligible
         Participant pursuant to this sentence.

                      (a)    Permitted Assignee.   The term 'Permitted
               Assignee' shall mean:

                             (i)    The Eligible Participant;

                             (ii)   A spouse of the Eligible Participant;

<PAGE>   33

                             (iii)  Any person who is a lineal ascendant or
                      descendant of the Eligible Participant or the Eligible
                      Participant's spouse;

                             (iv)   Any brother or sister of the Eligible
                      Participant;

                             (v)    Any spouse of any individual described in
                      subparagraph (iii) or (iv);

                             (vi)   A trustee of any trust which, at the
                      applicable time, is 100% Actuarially Held for a Permitted
                      Assignee or Assignees (as defined in Section 6.2(c));

                             (vii)  Any corporation in which, at the applicable
                      time, each class of stock is 100% owned by a Permitted
                      Assignee or Permitted Assignees;

                             (viii) Any partnership in which, at the applicable
                      time, each class of partnership interest is 100% owned by
                      a Permitted Assignee or Permitted Assignees; or

                             (ix)   Any limited liability company or other form
                      of incorporated or unincorporated business organization
                      in which each class of stock, membership or other equity
                      interest is 100% owned by a Permitted Assignee or
                      Assignees.

                      (b)    Subsequent Assignees. This Section 6.2 shall be
               fully applicable to all Permitted Assignees, and the provisions
               of this Section 6.2 shall be fully applicable to any right or
               benefit transferred by an Eligible Participant to any Permitted
               Assignee as if such Permitted Assignee were an Eligible
               Participant; provided, however, that no Permitted Assignee shall
               be deemed an Eligible Participant for determining the persons
               who constitute Permitted Assignees under Section 6.2(a). Any
               Permitted Assignee acquiring a right or benefit under this Plan
               shall execute and deliver to the Committee an Agreement
               pursuant to which such Permitted Assignee agrees to be bound by
               all of the terms and provisions of the Plan, provided that the
               failure to execute and deliver such an Agreement shall not be
               deemed to relieve such Permitted Assignee of the restrictions
               imposed by the Plan. Any attempted Disposition of a right or
               benefit under this Plan in breach of this Section 6.2, whether
               voluntary, involuntary, by operation of law or otherwise shall
               be null and void.

                                      -2-
<PAGE>   34

                      (c)    Actuarially Held. In making the determination
               whether a trust is 100% Actuarially Held for Permitted
               Assignee(s), a trust, at the applicable point in time, is 100%
               Actuarially Held for Permitted Assignee or Assignees when 100%
               of the actuarial value of the beneficial interests of the trust,
               except as provided in the following sentence, are held for a
               Permitted Assignee or Permitted Assignees. For purposes of
               making the determination described above, the possibility that
               an interest in a trust may be appointed pursuant to a special
               or general power of appointment shall be ignored; provided,
               that the actual exercise of any such power of appointment shall
               not be ignored."

               IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officer in a number of
copies, all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this 16th day of
November, 1994, but effective as of the date specified herein.

                                        HOUSTON INDUSTRIES INCORPORATED

                                        By   /s/ D. D. SYKORA
                                           -------------------------------------
                                           D. D. Sykora
                                           President and Chief Operating Officer

ATTEST

/s/ [ILLEGIBLE]
------------------------------
Assistant Corporate Secretary

                                     -3-

<PAGE>   35
                         HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                       (As Established September 1, 1985)

                                 Fifth Amendment

               Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985 (the "Plan"), and having
reserved the right under Section 7.1 thereof to amend the Plan, does hereby
amend Article Five of the Plan by adding the following Section 5.8 thereto,
effective August 1, 1995:

               "5.8   Terminations under the 1995 Voluntary Early Retirement
Program.

                      (a)   Prior to Early Retirement Date. Notwithstanding any
               other provision of the Plan to the contrary, if the employment of
               a Participant who fulfills the requirements for the Voluntary
               Early Pension for 1995 Program participants under Section 9.7(a)
               of the Houston Industries Incorporated Retirement Plan is
               terminated prior to the first day of the month coincident with or
               next following the date of the Participant's 60th birthday,
               distribution shall not be made as described in Section
               5.1(a)-(c), but the Employer (x) shall pay the Participant the
               sum or sums of Compensation actually deferred, with interest
               thereon, compounded annually, at the applicable interest rate
               specified in the Participant's Agreement for each Participation
               Year, from the Commencement Date through the date of payment, (y)
               shall pay such amount in 15 annual installment payments,
               commencing the first day of the month following the month in
               which the Participant terminates employment and payable
               thereafter in that same month in each remaining year, and (z)
               shall not pay any equal annual installments (as described in
               Section 5.1(a)-(b)) to such Participant.

                      (b)   After Early Retirement Date. If the employment of a
               Participant is terminated voluntarily as described in subsection
               (a) above but after the Participant's Early Retirement Date,
               distributions (including the equal annual installments) shall be
               made as otherwise provided in this Article Five.

<PAGE>   36

                      (c)   Commutation.  Any installment payments hereunder
               may be commuted as provided in Section 5.1(e)."

               IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officer in a number of
copies, all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this 18th day of May, 1995,
but effective as of the date stated herein.

                                     HOUSTON INDUSTRIES INCORPORATED

                                     By   /s/ D. D. SYKORA
                                       -----------------------------------------
                                         D. D. Sykora
                                         President and Chief Operating Officer

ATTEST:

/s/ [ILLEGIBLE]
------------------------------
Assistant Corporate Secretary

                                      -2-

<PAGE>   37
                        HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                                Sixth Amendment

             Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985 and as amended (the "Plan"), and
having reserved the right under Section 7.1 thereof to amend the Plan, does
hereby amend the last sentence of Section 7.1 of the Plan, effective as of
December 1, 1995, to read as follows:

      "Any such amendment or termination shall not, however, without the
      written consent of the affected Participant, reduce the interest rate
      applicable to, or otherwise adversely affect the rights of a Participant
      with respect to, Compensation with respect to which a Participant made an
      irrevocable deferral election before the later of the date that such
      amendment is executed or effective."

             IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by the duly authorized Chairman of the Benefits
Committee in a number of copies, all of which shall constitute one and the same
instrument, which may be sufficiently evidenced by any executed copy hereof,
this 18th day of June, 1996, but effective as of the date stated herein.

                                    HOUSTON INDUSTRIES INCORPORATED

                                    By    /s/ D. D. SYKORA
                                      ------------------------------------
                                      D. D. Sykora
                                      Chairman of the Benefits Committee

ATTEST:

/s/ [ILLEGIBLE]
------------------------------
Assistant Corporate Secretary

<PAGE>   38
                        HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                               Seventh Amendment

             Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985 and as amended (the "Plan"), and
having reserved the right under Section 7.1 thereof to amend the Plan, does
hereby amend the Plan, effective as of January 1, 1997, to read as follows:

             1.    Section 1.2(d) of the Plan is hereby amended in its
entirety to read as follows:

             "(d)  'Beneficiary' means person or persons, a trustee or trustees
      of a trust, or a partnership, corporation, limited liability partnership,
      limited liability company, or other entity designated by the Participant,
      as provided in Section 4.1, to receive any amounts distributed under the
      Plan after a Participant's death."

             2.    Section 1.2(h) of the Plan is hereby amended in its entirety
to read as follows:

             "(h)  'Committee' means the Benefits Committee or such other
      committee, which shall consist of five (5) or fewer persons, as shall be
      appointed by the Board of Directors of the Company to administer the
      Plan pursuant to Article Two hereof."

             IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officers in a number of
copies, all of which shall
<PAGE>   39
constitute one and the same instrument, which may be sufficiently evidenced by
any executed copy hereof, this 5th day of June, 1997, but effective as of the
date stated herein.

                                HOUSTON INDUSTRIES INCORPORATED

                                By    /s/ R.S. LETBETTER
                                  ------------------------------

ATTEST:

/s/ [ILLEGIBLE]
--------------------
<PAGE>   40
                         HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                  (As Established Effective September 1, 1985)

                                Eighth Amendment

               Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985 and as amended (the "Plan"), and
having reserved the right under Section 7.1 thereof to amend the Plan, does
hereby amend Section 1.2 (n) the Plan, effective as of October 1, 1997, by
inserting the following to the end thereof:

        "From and after October 1, 1997, employment with STP Nuclear Operating
        Company shall be deemed to constitute 'Employment' with an Employer
        hereunder for all purposes except any such Employee shall not be
        eligible to make any additional deferrals of Compensation under the
        Plan."

               IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officers in a number of
copies, all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this 13th day of
November, 1997, but effective as of the date stated herein.

                                            HOUSTON INDUSTRIES INCORPORATED

                                            By /s/ LEE W. HOGAN
                                              ---------------------------------

ATTEST:

/s/ [ILLEGIBLE]
----------------------------
<PAGE>   41
                        HOUSTON INDUSTRIES INCORPORATED
                           DEFERRED COMPENSATION PLAN

                       (As Established September 1, 1985)

                                Ninth Amendment

             Houston Industries Incorporated, a Texas corporation (the
"Company"), having established the Houston Industries Incorporated Deferred
Compensation Plan, effective September 1, 1985, and as thereafter amended (the
"Plan"), and having reserved the right under Section 7.1 thereof to amend the
Plan, does hereby amend the Plan, effective as of September 3, 1997 as follows:

             1.    Sections 5.2(a), 5.2(b), and 5.2(c) of the Plan are hereby
amended by adding the following sentence at the end of each section:

      "Notwithstanding the foregoing, if there is a conflict between the
      provisions of this section and the terms of the Participant's Severance
      Agreement (as described in Section 5.4), the terms of the Severance
      Agreement shall control."

             2.    Section 5.4 of the Plan is hereby amended by inserting the
following paragraph at the end thereof which shall read as follows:

             "However, if any Participant who has entered into a Severance
      Agreement, as defined in the Houston Industries Incorporated Executive
      Severance Benefits Plan, effective as of September 3, 1997, experiences a
      termination giving rise to a right to benefits under his Severance
      Agreement and complies with the conditions set forth in his Severance
      Agreement for the receipt of benefits thereunder, then such Participant
      shall be treated as if his termination did not occur until after his
      Early Retirement Date, and the provisions of Section 5.1(c) shall apply."
<PAGE>   42
             IN WITNESS WHEREOF, Houston Industries Incorporated has caused
these presents to be executed by its duly authorized officers in a number of
copies, all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this 26th day of February,
1998, but effective as of the date specified herein.

                                  HOUSTON INDUSTRIES INCORPORATED

                                  By    /s/ LEE W. HOGAN
                                    ---------------------------------
                                    Name:   Lee W. Hogan
                                         ----------------------------
                                    Title:  Executive Vice President
                                          ---------------------------

ATTEST:

/s/ [ILLEGIBLE]
-----------------------------
Assistant Corporate Secretary

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