Document:

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                                                                     EXHIBIT 4.5

                             RELIANT RESOURCES, INC.
                               UNION SAVINGS PLAN

                   (As Established Effective January 1, 2002)

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                   RELIANT RESOURCES, INC. UNION SAVINGS PLAN
                   (As Established Effective January 1, 2002)

                                      INDEX

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ARTICLE I           DEFINITIONS...................................................................................1

ARTICLE II          ADMINISTRATION OF THE PLAN....................................................................8
         2.1        Appointment of Committee......................................................................8
         2.2        Records of Committee..........................................................................8
         2.3        Committee Action..............................................................................8
         2.4        Committee Disqualification....................................................................8
         2.5        Committee Compensation and Expenses...........................................................8
         2.6        Committee Liability...........................................................................8
         2.7        Committee Determinations......................................................................9
         2.8        Information from Employer....................................................................10
         2.9        Uniform Administration.......................................................................10
         2.10       Reporting Responsibilities...................................................................11
         2.11       Disclosure Responsibilities..................................................................11
         2.12       Quarterly Statements.........................................................................11
         2.13       Allocation of Responsibility Among Fiduciaries for Plan and Trust
                    Administration...............................................................................11
         2.14       Annual Audit.................................................................................12
         2.15       Presenting Claims for Benefits...............................................................12
         2.16       Claims Review Procedure......................................................................13
         2.17       Disputed Benefits............................................................................14

ARTICLE III         PARTICIPATION IN THE PLAN....................................................................15
         3.1        Eligibility of Employees.....................................................................15
         3.2        Employee Information.........................................................................15
         3.3        Notification of Eligible Employees...........................................................15
         3.4        Application by Participants to Make Pre-Tax and/or After-Tax Contributions...................15
         3.5        Service Defined..............................................................................16
         3.6        Commencement and Termination of Service......................................................17
         3.7        Break In Service.............................................................................18
         3.8        Effect of Re-employment Prior to a Break In Service..........................................18
         3.9        Effect of Re-employment After a Break In Service.............................................18
         3.10       Vesting Service..............................................................................19
         3.11       Transferred Participants.....................................................................19
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ARTICLE IV          CONTRIBUTIONS TO THE PLAN....................................................................21
         4.1        Employer Contributions.......................................................................21
         4.2        Pre-Tax Contributions........................................................................24
         4.3        After-Tax Contributions......................................................................25
         4.4        Actual Deferral Percentage...................................................................26
         4.5        Actual Deferral Percentage Limits............................................................27
         4.6        Reduction of Pre-Tax Contribution Rates by Leveling Method...................................28
         4.7        Increase in Pre-Tax Contribution Rates.......................................................28
         4.8        Excess Pre-Tax Contributions.................................................................28
         4.9        Contribution Percentage......................................................................30
         4.10       Contribution Percentage Limits...............................................................31
         4.11       Treatment of Excess Aggregate Contributions..................................................31
         4.12       Multiple Use of Alternative Limitation Shall Not Apply.......................................33
         4.13       Employer Matching Contributions and Pre-Tax Contributions to Be Tax
                    Deductible...................................................................................33
         4.14       Maximum Allocations..........................................................................33
         4.15       Refunds to Employer..........................................................................33
         4.16       Rollover Contributions.......................................................................33

ARTICLE V           PARTICIPANTS' ACCOUNTS.......................................................................36
         5.1        Trust Accounts...............................................................................36
         5.2        Valuation of Trust Fund......................................................................37
         5.3        Allocation to Accounts.......................................................................37
         5.4        Maximum Annual Additions.....................................................................39

ARTICLE VI          PARTICIPANTS' BENEFITS.......................................................................45
         6.1        Termination of Service.......................................................................45
         6.2        Disability of Participants...................................................................45
         6.3        Death of Participants........................................................................45
         6.4        Retirement of Participants on or After Retirement Date.......................................47
         6.5        In-Service Distributions.....................................................................47
         6.6        Payments of Benefits.........................................................................47
         6.7        Payment of Distribution Directly to Eligible Retirement Plan.................................51
         6.8        Participation Rights Determined as of Valuation Date Coinciding with or
                    Preceding Termination of Employment..........................................................53
         6.9        Treatment of Non-Vested Account Balances upon Termination of Service.........................53
         6.10       Required Minimum Distributions...............................................................54
         6.11       Unclaimed Benefits...........................................................................54
         6.12       Optional Forms of Benefits...................................................................55

ARTICLE VII         WITHDRAWALS AND LOANS........................................................................56
         7.1        Hardship Withdrawals.........................................................................56
         7.2        Account Withdrawals..........................................................................58
         7.3        Loans........................................................................................59
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ARTICLE VIII        INVESTMENT DIRECTIONS........................................................................60
         8.1        Investment of Trust Fund.....................................................................60
         8.2        Voting of Company Stock and CenterPoint Common Stock; Exercise of
                    Other Rights.................................................................................61

ARTICLE IX          TRUST AGREEMENT AND TRUST FUND...............................................................63
         9.1        Trust Agreement..............................................................................63
         9.2        Benefits Paid Solely from Trust Fund.........................................................63
         9.3        Committee Directions to Trustee..............................................................63
         9.4        Trustee's Reliance on Committee Instructions.................................................63
         9.5        Authority of Trustee in Absence of Instructions from the Committee...........................63
         9.6        Compliance with Exchange Act Rule 10(b)(18)..................................................63

ARTICLE X           ADOPTION OF PLAN BY OTHER CORPORATIONS, AMENDMENT
                    AND TERMINATION OF THE PLAN, AND DISCONTINUANCE OF
                    CONTRIBUTIONS TO THE TRUST FUND..............................................................65
         10.1       Adoption by Employers........................................................................65
         10.2       Continuous Service...........................................................................66
         10.3       Amendment of the Plan........................................................................66
         10.4       Termination of the Plan......................................................................67
         10.5       Distribution of Trust Fund on Termination....................................................67
         10.6       Effect of Discontinuance of Contributions....................................................67
         10.7       Merger of Plan with Another Plan.............................................................67

ARTICLE XI          MISCELLANEOUS PROVISIONS.....................................................................69
         11.1       Terms of Employment..........................................................................69
         11.2       Controlling Law..............................................................................69
         11.3       Invalidity of Particular Provisions..........................................................69
         11.4       Non-Alienability of Rights of Participants...................................................69
         11.5       Payments in Satisfaction of Claims of Participants...........................................70
         11.6       Payments Due Minors and Incompetents.........................................................70
         11.7       Acceptance of Terms and Conditions of Plan by Participants...................................70
         11.8       Impossibility of Diversion of Trust Fund.....................................................70
</Table>

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                   RELIANT RESOURCES, INC. UNION SAVINGS PLAN
                   (As Established Effective January 1, 2002)

                                    Recitals

                  WHEREAS, effective as of January 1, 2002, Reliant Resources,
Inc., a Delaware corporation (the "Company"), authorizes and directs (i) the
establishment of a new savings plan under Sections 401(a) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), that is a
profit sharing plan under Code Section 401(a)(27) and includes a cash or
deferred arrangement under Code Section 401(k), to provide benefits for certain
eligible employees whose employment is covered by a collective bargaining
agreement, in the form of the Reliant Resources, Inc. Union Savings Plan (the
"Plan"), and (ii) the establishment of a trust (the "Trust") pursuant to an
agreement by and between the Company and The Vanguard Group, as trustee, for the
exclusive benefit of the participants in the Plan, with such Trust intended to
form a part of the Plan.

                  WHEREAS, pursuant to certain merger instruments, the Company
authorized and directed that (i) the Reliant Energy New Jersey Holdings, LLC
Savings Plan for IBEW Local 327 ("Local 327 Savings Plan"), Reliant Energy
Mid-Atlantic Savings Plan for IBEW Local 459 ("Local 459 Savings Plan") and
Reliant Energy Mid-Atlantic Power Holdings, LLC Savings Plan for IBEW Local 777
("Local 777 Savings Plan") (collectively, the "REMA Union Plans") be
consolidated with, merged into, and continued in the form of the Plan as of the
Effective Date of the Plan; and (ii) all assets held under the separate trusts
for each of the REMA Union Plans for the benefit of the participants in the REMA
Union Plans be merged with all the assets held under the Trust for the benefit
of the participants in the Plan.

                  WHEREAS, from and after January 1, 2002, the REMA Union Plans
and the Plan shall constitute a "single plan" within the meaning and purview of
Section 414(l) of the Code, with the Plan being the surviving plan for all legal
purposes, including reporting and disclosure under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").

                  WHEREAS, the Plan and Trust are intended to meet the
requirements of Sections 401(a), 401(k) and 501(a) of the Code and ERISA, as
either may be amended from time to time.

                  NOW, THEREFORE, the Company hereby establishes the Plan in the
form of, and by the adoption of, the Plan as herein set forth, effective January
1, 2002, except as otherwise indicated herein, to read as follows:

                                      -1-
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                                    ARTICLE I

                                   DEFINITIONS

                  As used in the Plan, the following words and phrases shall
have the following meanings unless the context clearly requires a different
meaning:

                  ACCOUNT: Any of the accounts maintained for a Participant
pursuant to Section 5.1, or all such accounts collectively, as the context
requires.

                  AFFILIATE: A corporation or other trade or business which,
together with an Employer, is "under common control" within the meaning of
Section 414(b) or (c), as modified by Section 415(h) of the Code; any
organization (whether or not incorporated) which is a member of an "affiliated
service group" (within the meaning of Section 414(m) of the Code) which includes
the Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.

                  AFTER-TAX CONTRIBUTIONS: Any amount contributed by a
Participant to the Trust Fund from his Compensation as "After-Tax Matched
Contributions" and "After-Tax Unmatched Contributions" pursuant to Section 4.3.

                  AFTER-TAX CONTRIBUTION ACCOUNT: The account or accounts
maintained for each Participant to reflect his After-Tax Matched Contributions
and After-Tax Unmatched Contributions, and adjustments relating thereto made
pursuant to the provisions of the Plan.

                  ANNUITY STARTING DATE: The first day of the first month for
which an amount is paid as an annuity or any other form.

                  BENEFICIARY: Such natural person or persons, or the trustee of
an inter vivos trust for the benefit of natural persons, entitled to receive a
Participant's death benefits under the Plan, as provided in Section 6.3 hereof.

                  BENEFIT PROGRAM I PARTICIPANT: A Participant who is a
Non-Grandfathered 327 Employee, Non-Grandfathered 459 Employee, Local 47
Employee or such other Employee as determined by the Committee, in its sole
discretion, from time to time.

                  BENEFIT PROGRAM II PARTICIPANT: A Participant who is a
Grandfathered 327 Employee, Grandfathered 459 Employee or a Local 777 Employee.

                  BENEFIT PROGRAM III PARTICIPANT: A Participant who is a Local
66 Employee.

                  BOARD: The Board of Directors of the Company.

                  CENTERPOINT COMMON STOCK: Common Stock of (i) Reliant Energy,
Inc., a Texas corporation, prior to the reorganization of Reliant Energy, Inc.,
and (ii) CenterPoint

                                      -1-
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Energy, Inc., a Texas corporation, on and after such reorganization date, which
is readily tradable on an established securities market.

                  CENTERPOINT COMMON STOCK FUND: An Investment Fund established
to hold any shares of CenterPoint Common Stock transferred, pursuant to a
plan-to-plan transfer entered into by the Company and the sponsor of the REI
Savings Plan, to the Trust directly from the trust for the REI Savings Plan with
respect to the Accounts of Participants who were former participants in the REI
Savings Plan.

                  CODE: The Internal Revenue Code of 1986, as amended.

                  COLLECTIVE BARGAINING AGREEMENT: Collectively or separately,
depending on the context used, the collective bargaining agreements (or any
other agreements) by and between an Employer (or Affiliate) and (1)
International Brotherhood of Electrical Workers, AFL-CIO ("IBEW"), Local 47, (2)
IBEW Local 66, (3) IBEW Local 327, (4) IBEW Local 459 and/or (5) IBEW Local 777,
providing for participation in the Plan by eligible Employees covered under the
Collective Bargaining Agreements, together with any renewals, modifications or
amendments thereof, or any successor agreements thereto.

                  COMMITTEE: The Benefits Committee as described in Article II
and, in regard to any provision of this Plan under which an agent has been
appointed by the Benefits Committee pursuant to Article II to administer such
provision of this Plan, such agent.

                  COMPANY: Reliant Resources, Inc., a Delaware corporation, or a
successor to Reliant Resources, Inc. in the ownership of substantially all of
its assets.

                  COMPANY STOCK: Common stock of the Company, which is readily
tradable on an established securities market.

                  COMPENSATION:

                  (a) With respect to a Benefit Program II Participant,
Compensation means the total cash base salary and wages paid to an Employee by
an Employer for any Plan Year, including annual bargaining incentive awards, but
specifically excluding any overtime pay, bonuses, commissions and any other
extra compensation.

                  (b) With respect to a Benefit Program I Participant or Benefit
Program III Participant, total cash compensation actually paid for personal
services to an Employee by an Employer for any Plan Year, including salaries,
wages, commissions, overtime pay, performance-based bonuses paid in cash, and
any other payments of compensation in cash that would be subject to tax under
Code Section 3101(a), without the dollar limitations of Code Section 3121(a)(1),
but specifically excluding (i) expense allowances; (ii) benefits received under
the Long-Term Disability Plan of an Employer; (iii) contributions of the
Employer to or benefits under this Plan or any other welfare or deferred
compensation plan not expressly included above; and (iv) any payments made in
connection with a Participant's termination of employment or severance pay.

                                      -2-
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                  (c) For purposes of the Plan, Compensation shall also include
amounts excludable from gross income by reason of Code Sections 125, 402(e)(3),
402(h) or 403(b), but shall be limited for all purposes under the Plan to
$200,000 (or such other amount provided under Code Section 401(a)(17)), as
adjusted for cost-of-living increases in accordance with Code Section
401(a)(17)(B). The Compensation of the respective Employees and Participants as
reflected by the books and records of the Employer shall be conclusive.

                  CONTRIBUTION: Any amount contributed to the Trust Fund
pursuant to the provisions of this Plan by the Employer or by a Participant from
his Compensation, including After-Tax Matched Contributions, After-Tax Unmatched
Contributions, Pre-Tax Matched Contributions, Pre-Tax Unmatched Contributions,
Employer Matching Contributions and Profit Sharing Contributions.

                  DISABILITY: A disability incurred by a Participant that
satisfies the requirements of Section 6.2.

                  EFFECTIVE DATE: January 1, 2002, except as otherwise provided
in specific provisions of the Plan.

                  EMPLOYEE: Any person who renders services to an Employer or an
Affiliate in the status of an employee, as the term is defined in Code Section
3121(d), including any Leased Employee performing services for any Employer.

                  EMPLOYER: The Company (including its successors) and any other
eligible entity or organization that has adopted this Plan pursuant to the
provisions of Article X, and the successors, if any, to such entity or
organization.

                  EMPLOYER CONTRIBUTIONS: Collectively, the Employer Matching
Contributions and Profit Sharing Contributions.

                  EMPLOYER MATCHING CONTRIBUTIONS: Any amount contributed to the
Trust Fund by the Employer pursuant to Section 4.1.

                  EMPLOYER MATCHING ACCOUNT: The account maintained for each
Participant to reflect his Employer Matching Contributions, and adjustments
relating thereto made pursuant to the provisions of the Plan.

                  ERISA: The Employee Retirement Income Security Act of 1974
(Public Law No. 93-406), as amended from time to time.

                  FIDUCIARIES: The Employer, the Committee, the Trustee, and any
other person designated as a Fiduciary with respect to the Plan or the Trust
Agreement, but only with respect to the specific responsibilities of each as
described in Section 2.13 hereof. Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan.

                                      -3-
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                  GRANDFATHERED LOCAL 327 EMPLOYEE: A Local 327 Employee who (1)
was an active participant in the Local 327 Savings Plan as of November 1, 2001,
(2) will be age 40 or older as of December 31, 2002, (3) was a "Grandfathered
Participant" under the Local 327 Savings Plan immediately prior to the Effective
Date and (4) is eligible to participate in the Plan as of the Effective Date,
for so long as such Employee is continuously a Local 327 Employee on and after
the Effective Date.

                  GRANDFATHERED LOCAL 459 EMPLOYEE: A Local 459 Employee who (1)
was an active participant in the Local 459 Savings Plan as of July 24, 2001, (2)
will be age 40 or older as of December 31, 2002, (3) was a "Grandfathered
Participant" under the Local 459 Savings Plan immediately prior to the Effective
Date and (4) is eligible to participate in the Plan as of the Effective Date,
for so long as such Employee is continuously a Local 459 Employee on and after
the Effective Date.

                  INVESTMENT FUND: One or more investment alternatives
designated by the Committee pursuant to the Plan and Trust Agreement as
alternatives in which Participants may elect to invest their Accounts.

                  INVESTMENT MANAGER: The Investment Manager, if any, appointed
by the Committee under the Trust Agreement, as such term is defined by Section
3(38) of ERISA.

                  LEASED EMPLOYEE: Each person who is not an employee of the
Employer or an Affiliate but who performs services for the Employer or an
Affiliate pursuant to a leasing agreement (oral or written) between the Employer
or an Affiliate and any leasing organization, provided that such person has
performed such services for the Employer or an Affiliate or for related persons
(within the meaning of Section 144(a)(3) of the Code) on a substantially
full-time basis for a period of at least one year and such services are
performed under primary direction or control by the Employer or an Affiliate.
Notwithstanding the preceding sentence, the term "Leased Employee" does not
include individuals described in Section 414(n)(5) of the Code.

                  LEAVE FOR BUSINESS AND CIVIC REASONS: The period of an
"Authorized Absence" (as defined in Section 3.5) taken in order to hold an
office or position in a business or civic organization which has been approved
by the Committee.

                  LOCAL 47 EMPLOYEE: An Employee who is covered under a
Collective Bargaining Agreement with IBEW Local 47.

                  LOCAL 66 EMPLOYEE: An Employee who is covered under a
Collective Bargaining Agreement with IBEW Local 66.

                  LOCAL 327 EMPLOYEE: An Employee who is covered under a
Collective Bargaining Agreement with IBEW Local 327.

                  LOCAL 459 EMPLOYEE: An Employee who is covered under a
Collective Bargaining Agreement with IBEW Local 459.

                                      -4-
<PAGE>

                  LOCAL 777 EMPLOYEE: An Employee who is covered under a
Collective Bargaining Agreement with IBEW Local 777.

                  LOCAL 327 SAVINGS PLAN: The Reliant Energy New Jersey
Holdings, LLC Savings Plan for IBEW Local 327, as established effective May 12,
2000, as subsequently amended, as in effect on December 31, 2001.

                  LOCAL 459 SAVINGS PLAN: The Reliant Energy Mid-Atlantic
Savings Plan for IBEW Local 459, as established effective May 12, 2000, as
subsequently amended, as in effect on December 31, 2001.

                  LOCAL 777 SAVINGS PLAN: The Reliant Energy Mid-Atlantic Power
Holdings, LLC Savings Plan for IBEW Local 777, as established effective May 12,
2000, as subsequently amended, as in effect on December 31, 2001.

                  NON-GRANDFATHERED LOCAL 327 EMPLOYEE: A Local 327 Employee who
is not a Grandfathered Local 327 Employee.

                  NON-GRANDFATHERED LOCAL 459 EMPLOYEE: A Local 459 Employee who
is not a Grandfathered Local 459 Employee.

                  PARTICIPANT: An Employee who, pursuant to the provisions of
Article III hereof, has met the eligibility requirements and is participating in
the Plan. A former Employee shall be deemed a Participant under the Plan as long
as he has an Account in the Trust Fund that has not been forfeited under Section
6.9 and will be entitled to exercise all the rights and privileges granted
active Employees who are Participants except as otherwise specifically provided
in the case of contributions to the Plan under Article IV and Participant loans
under Section 7.3 hereof.

                  PLAN: The Reliant Resources, Inc. Union Savings Plan set forth
herein, which is intended to constitute a profit-sharing plan under Section
401(a)(27) of the Code and includes a cash or deferred arrangement under Section
401(k) of the Code, including all subsequent amendments hereto.

                  PLAN YEAR: The 12-month period commencing on January 1 and
ending on December 31.

                  PRE-TAX CONTRIBUTIONS: Any amount deferred by a Participant
from his Compensation as "Pre-Tax Matched Contributions" and "Pre-Tax Unmatched
Contributions" pursuant to Section 4.2.

                  PRE-TAX CONTRIBUTION ACCOUNT: The account or accounts
maintained for each Participant to reflect his Pre-Tax Matched Contributions and
Pre-Tax Unmatched Contributions to the Plan, and any adjustments thereto made
pursuant to the provisions of the Plan.

                                      -5-
<PAGE>

                  PROFIT SHARING CONTRIBUTIONS: Any amount contributed to the
Trust Fund by the Employer pursuant to Section 4.1, in the form of an "Annual
Profit Sharing Contribution" or a "Payroll Profit Sharing Contribution" (as each
is described in Section 4.1).

                  PROFIT SHARING ACCOUNT: The account maintained to reflect the
Profit Sharing Contributions to the Plan for a Participant, and any adjustments
thereto made pursuant to the provisions of the Plan.

                  QUALIFIED JOINT AND SURVIVOR ANNUITY: A monthly annuity for
the life of the Participant beginning on the date any distribution is to be
made, with a survivor annuity for the life of his spouse equal to 50% of the
monthly amount of the annuity which is payable during the joint lives of the
Participant and his spouse on the earlier of the date benefits commence or the
date the annuity is distributed, and which is purchased from an insurance
company with the vested portion of the Participant's Account determined as of
the most recent Valuation Date. The Committee shall have the discretion to
determine the insurance company from which the annuity shall be purchased. If a
Participant is not married, the term "Qualified Joint and Survivor Annuity"
shall mean an immediate annuity for the life of the Participant purchased in the
same manner as provided above.

                  QUALIFIED MILITARY SERVICE: Any service in the uniformed
services (as defined in Chapter 43 of Title 38 of the United States Code or its
successor) by an Employee who is entitled to reemployment rights under such
chapter with respect to such service.

                  QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY: An annuity payable
for the life of the Participant's spouse beginning on the date any distribution
is to be made which is purchased from an insurance company with the vested
portion of the Participant's Account determined as of the most recent Valuation
Date. The Committee shall have the discretion to determine the insurance company
from which the annuity shall be purchased.

                  REI SAVINGS PLAN: The Reliant Energy, Incorporated Savings
Plan, as amended and restated effective as of April 1, 1999, as thereafter
amended from time to time.

                  REMA UNION PLAN: The applicable of the (i) Local 327 Savings
Plan; (ii) Local 459 Savings Plan; and (iii) Local 777 Savings Plan.

                  REMA UNION PLAN PARTICIPANT: Any person who is in the
employment of an Employer on the Effective Date and was included in and covered
by a REMA Union Plan immediately prior thereto, or who is the alternate payee,
beneficiary, spouse or estate representative of such a person who died or was
receiving or entitled to receive benefits under a REMA Union Plan.

                  RETIREMENT: Termination of Service on or after the Retirement
Date of a Participant.

                  RETIREMENT DATE: The later of (i) the date upon which the
Participant attains age 65 or (ii) the fifth anniversary of the Participant's
commencement of participation in the Plan.

                                      -6-
<PAGE>

                  ROLLOVER ACCOUNT: An account maintained for an Employee or
Participant to record rollover contributions to this Plan pursuant to Section
4.16, and any allocations and adjustments thereto.

                  SERVICE: An Employee's or Participant's period of employment
with an Employer or Affiliate, as determined in accordance with Article III.

                  SPOUSAL CONSENT: Consent by a Participant's spouse to an
election, designation or other action of a Participant shall mean the written
consent thereto of the spouse, witnessed by a Plan representative or a notary
public, which acknowledges the effect of such election on the rights of the
spouse, and, in the case of consent to a Beneficiary designation, with such
designation not being changeable without further Spousal Consent unless the
prior Spousal Consent expressly permits such changes without the necessity of
further Spousal Consent. Spousal Consent shall be deemed to have been obtained
if it is established to the satisfaction of the Committee that it cannot
actually be obtained because there is no spouse, or because the spouse could not
be located, or because of such other circumstances as the Secretary of the
Treasury by regulation may prescribe. Any Spousal Consent shall be effective
only with respect to the spouse who made such Spousal Consent.

                  TRANSFER DATE: The effective date set forth in an instrument
entered into by the Company and Reliant Energy, Incorporated, or its successor,
for the participation in the Plan by eligible Local 47 Employees and Local 66
Employees.

                  TRUST AGREEMENT: The agreement established by and between the
Company and the Trustee, effective January 1, 2002, as it may hereafter be
amended from time to time.

                  TRUST FUND: All contributions of the Employer and
Participants, and the investments and reinvestments thereof, held by the Trustee
under the Trust Agreement, together with all income, profits or increments
thereon.

                  TRUSTEE: The Vanguard Group, or any successor Trustee or
Trustees under the relevant Trust Agreement.

                  VALUATION DATE: Any date on which the New York Stock Exchange
is open for trading and any date on which the value of the assets of the Trust
Fund is determined by the Trustee pursuant to Section 5.2. The last business day
of each calendar month shall be the "monthly Valuation Date," the last business
day of each March, June, September and December of each Plan Year shall be the
"quarterly Valuation Date," and the last business day of each December of each
Plan Year shall be the "annual Valuation Date."

                  Words used in this Plan and in the Trust Agreement in the
singular shall include the plural and in the plural the singular, and the gender
of words used shall be construed to include whichever may be appropriate under
any particular circumstances of the masculine, feminine or neuter genders.

                                      -7-
<PAGE>

                                   ARTICLE II

                           ADMINISTRATION OF THE PLAN

         2.1 Appointment of Committee: The Board shall appoint a Committee of
not less than three persons, who may be Employees of the Company, to perform the
administrative duties set forth herein. The Committee shall be the administrator
of the Plan for the purposes of ERISA. Each member of the Committee shall serve
for such term as the Board may designate or until his death, resignation or
removal by the Board. The Board shall promptly appoint successors to fill any
vacancies in the Committee.

         2.2 Records of Committee: The Committee shall keep appropriate records
of its proceedings and the administration of the Plan. The Committee shall make
available to Participants and their Beneficiaries for examination, during
business hours, such records of the Plan as pertain to the examining person and
such documents relating to the Plan as are required by any applicable disclosure
acts.

         2.3 Committee Action: The Committee may act through the concurrence of
a majority of its members expressed either at a meeting of the Committee or in
writing without a meeting. Any member of the Committee, or the Secretary or
Assistant Secretary of the Committee (who need not be members of the Committee),
may execute on behalf of the Committee any certificate or other written
instrument evidencing or carrying out any action approved by the Committee. The
Committee may delegate any of its rights, powers and duties to any one or more
of its members or to an agent. The Chairman of the Committee shall be agent of
the Plan and the Committee for the service of legal process at the principal
office of the Company in Houston, Texas.

         2.4 Committee Disqualification: A member of the Committee who may be a
Participant shall not vote on any question relating specifically to himself.

         2.5 Committee Compensation and Expenses: The members of the Committee
shall serve without bond (unless otherwise required by law) and without
compensation for their services as such. The Committee may select and authorize
the Trustee to suitably compensate such attorneys, agents and representatives as
it may deem necessary or advisable to the performance of its duties. Expenses of
the Committee that shall arise in connection with the administration of the Plan
shall be paid by the Company or, if not paid by the Company, by the Trustee out
of the Trust Fund.

         2.6 Committee Liability: Except to the extent that such liability is
created by ERISA, no member of the Committee shall be liable for any act or
omission of any other member of the Committee, nor for any act or omission on
his own part except for his gross negligence or willful misconduct, nor for the
exercise of any power or discretion in the performance of any duty assumed by
him hereunder. The Company shall indemnify and hold harmless each member of the
Committee from any and all claims, losses, damages, expenses (including counsel
fees approved by the Committee) and liabilities (including any amounts paid in
settlement with the

                                      -8-
<PAGE>

Committee's approval but excluding any excise tax assessed against any member or
members of the Committee pursuant to the provisions of Section 4975 of the Code)
arising from any act or omission of such member in connection with duties and
responsibilities under the Plan, except where the same is judicially determined
to be due to the gross negligence or willful misconduct of such member.

         2.7 Committee Determinations: The Committee shall enforce this Plan in
accordance with its terms and shall have all powers necessary for the
accomplishment of that purpose, including, but not by way of limitation, the
following powers:

                  (a) To employ such agents and assistants, such counsel (who
         may be of counsel to the Company) and such clerical, accounting,
         administrative, and investment services as the Committee may require in
         carrying out the provisions of the Plan;

                  (b) To authorize one or more of their number, or any agent, to
         make payment, or to execute or deliver any instrument, on behalf of the
         Committee, except that all requisitions for funds from, and requests,
         directions, notifications, certifications, and instructions to, the
         Trustee (except as provided in (i) below) or to the Company shall be
         signed either by a member of the Committee or by the Secretary or
         Assistant Secretary of the Committee;

                  (c) To determine from the records of the Company the
         considered Compensation, Service and other pertinent facts regarding
         Employees and Participants for the purpose of the Plan;

                  (d) To construe and interpret the Plan, decide all questions
         of eligibility and determine the amount, manner and time of payment of
         any benefits hereunder;

                  (e) To prescribe forms and procedures to be followed by
         Employees for participation in the Plan, by Participants or
         Beneficiaries filing applications for benefits, by Participants
         applying for withdrawals or loans, and for other occurrences in the
         administration of the Plan;

                  (f) To prepare and distribute, in such manner as the Committee
         determines to be appropriate, information explaining the Plan;

                  (g) To furnish the Company and the Participants, upon request,
         such annual reports with respect to the administration of the Plan as
         are reasonable and appropriate;

                  (h) To certify to the Trustee the amount and kind of benefits
         payable to Participants and their Beneficiaries;

                                      -9-
<PAGE>

                  (i) To authorize all disbursements by the Trustee from the
         Trust Fund by a written authorization signed either by a member of the
         Committee or by the Secretary or Assistant Secretary of the Committee;
         provided, however, that disbursements for ordinary expenses incurred in
         the administration of the Trust Fund and disbursements to Participants
         need not be authorized by the Committee;

                  (j) In the event of any share split, share dividend or
         combination of outstanding shares of Company Stock (and CenterPoint
         Common Stock), to determine the appropriate allocation of shares of
         such stock to the Accounts maintained for the Participants and to
         determine the appropriate number of shares distributable to a
         Participant under Section 6.6 hereof immediately following such share
         split, share dividend or combination so as to effectuate the intent and
         purpose of the Plan;

                  (k) To interpret and construe all terms, provisions,
         conditions and limitations of this Plan and to reconcile any
         inconsistency or supply any omitted detail that may appear in this Plan
         in such manner and to such extent, consistent with the general terms of
         this Plan, as the Committee shall deem necessary and proper to
         effectuate the Plan for the greatest benefit of all parties interested
         in the Plan;

                  (l) To make and enforce such rules and regulations for the
         administration of the Plan as are not inconsistent with the terms set
         forth herein; and

                  (m) In addition to all other powers herein granted, and in
         general consistent with provisions hereof, the Committee shall have all
         other rights and powers reasonably necessary to supervise and control
         the administration of this Plan.

         2.8 Information from Employer: To enable the Committee to perform its
functions, the Employer shall supply full and timely information to the
Committee of all matters relating to the dates of employment of its Employees
for purposes of determining eligibility of Employees to participate hereunder,
the Compensation of all Participants, their Retirement, death or other cause for
termination of employment, and such other pertinent facts as the Committee may
require; and the Committee shall advise the Trustee of such of the foregoing
facts as may be pertinent to the Trustee's administration of the Trust Fund.

         2.9 Uniform Administration: Whenever in the administration of the Plan
any action is required by the Employer or the Committee, including, but not by
way of limitation, action with respect to eligibility of Employees,
Contributions, and benefits, such action shall be uniform in nature as applied
to all persons similarly situated, and no action shall be taken which will
discriminate in favor of Participants who are officers or shareholders of the
Employer, highly compensated Employees, or persons whose principal duties
consist of supervising the work of others.

                                      -10-
<PAGE>

         2.10 Reporting Responsibilities: As administrator of the Plan under
ERISA, the Committee shall file or distribute all reports, returns and notices
required under ERISA or other applicable law.

         2.11 Disclosure Responsibilities: The Committee shall make available to
each Participant and Beneficiary such records, documents and other data as may
be required under ERISA, and Participants or Beneficiaries shall have the right
to examine such records at reasonable times during business hours. Nothing
contained in this Plan shall give any Participant or Beneficiary the right to
examine any data or records reflecting the Compensation paid to, or relating to
any Account of, any other Participant or Beneficiary, except as may be required
under ERISA.

         2.12 Quarterly Statements: As soon as practicable after each quarterly
Valuation Date, the Committee shall prepare and deliver to each Participant a
written statement reflecting as of that quarterly Valuation Date:

                  (a) Such information applicable to contributions by and for
         each such Participant and the increase or decrease thereof as a
         consequence of valuation adjustments as may be pertinent in the
         premises; and

                  (b) The balance in his Account as of that quarterly Valuation
         Date.

         2.13 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration: The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan
or the Trust Agreement. In general, the Employer shall have the sole
responsibility for making the Contributions provided for under Sections 4.1, 4.2
and 4.3. The Company shall have the sole authority to appoint and remove the
Trustee and members of the Committee. The Company may amend or terminate, in
whole or in part, this Plan or the Trust Agreement. The Committee shall have the
sole responsibility for the administration of the Plan and the sole authority to
appoint and remove any Investment Manager which may be provided for under the
Trust. The Trustee shall have the sole responsibility for the administration of
the Trust Fund and shall have exclusive authority and discretion to manage and
control the assets held under the Trust Fund, except to the extent that the
authority to manage, acquire and dispose of the assets of the Trust Fund is
delegated to an Investment Manager, all as specifically provided in the Trust
Agreement. Each Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan or the Trust Agreement, as the case may be, authorizing or providing
for such direction, information or action. Furthermore, each Fiduciary may rely
upon any such direction, information or action of another Fiduciary as being
proper under this Plan or the Trust Agreement and is not required under this
Plan or the Trust Agreement to inquire into the propriety of any such direction,
information or action. It is intended under this Plan and the Trust Agreement
that each Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and the Trust
Agreement and shall not be responsible for any act or failure to act of another
Fiduciary.

                                      -11-
<PAGE>

No Fiduciary guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value.

         2.14 Annual Audit: The Committee shall engage, on behalf of all
Participants, an independent Certified Public Accountant who shall conduct an
annual examination of any financial statements of the Plan and Trust Fund and of
other books and records of the Plan and Trust Fund as the Certified Public
Accountant may deem necessary to enable him to form and provide a written
opinion as to whether the financial statements and related schedules required to
be filed with the Internal Revenue Service, Securities and Exchange Commission,
or Department of Labor or furnished to each Participant are presented fairly and
in conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding Plan Year. If, however, the statements
required to be submitted as part of the reports to the Department of Labor are
prepared by a bank or similar institution or insurance carrier regulated and
supervised and subject to periodic examination by a state or federal agency and
if such statements are, in fact, made a part of the annual report to the
Department of Labor and no such audit is required by ERISA, then the audit
required by the foregoing provisions of this Section shall be optional with the
Committee.

         2.15 Presenting Claims for Benefits: A "Claims Administrator" shall be
appointed by the Committee or, absent such appointment, shall be the Company's
director of benefits, with such Claims Administrator authorized by the Committee
to conduct the initial review and render a decision as provided in this Section
for all claims for benefits under the Plan. Any Participant or any other person
claiming under any deceased Participant (collectively, the "Applicant") may
submit written application to the Claims Administrator for the payment of any
benefit asserted to be due him under the Plan. Such application shall set forth
the nature of the claim and such other information as the Claims Administrator
may reasonably request.

                  The Claims Administrator shall notify the Applicant of the
benefits determination within a reasonable time after receipt of the claim, such
time not to exceed 90 days unless special circumstances require an extension of
time for processing the application. If such an extension of time for processing
is required, written notice of the extension shall be furnished to the Applicant
prior to the end of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Claims Administrator expects to render its final
decision. Notice of the Claims Administrator's decision to deny a claim in whole
or in part shall be set forth in a manner calculated to be understood by the
Applicant and shall contain the following:

                  (a) the specific reason or reasons for the denial;

                  (b) specific reference to the pertinent Plan provisions on
         which the denial is based;

                                      -12-
<PAGE>

                  (c) a description of any additional material or information
         necessary for the Applicant to perfect the claim and an explanation of
         why such material or information is necessary; and

                  (d) an explanation of the claims review procedures set forth
         in Section 2.16 hereof, including the claimant's right to bring a civil
         action under Section 502(a) of ERISA following a denial on review.

If notice of denial is not furnished and if the claim is not granted within the
period of time set forth above, the claim shall be deemed denied for purposes of
proceeding to the review stage described in Section 2.16. Applicants shall be
given timely written notice of the time limits set forth herein for
determination on claims, appeal of claim denial and decisions on appeal.

         2.16 Claims Review Procedure: If an application filed by an Applicant
under Section 2.15 above shall result in a denial by the Claims Administrator of
the benefit applied for, either in whole or in part, such Applicant shall have
the right, to be exercised by written request filed with the Committee within 60
days after receipt of notice of the denial of his application or, if no such
notice has been given, within 60 days after the application is deemed denied
under Section 2.15, for the review of his application and of his entitlement to
the benefit for which he applied, by the Committee. Such request for review may
contain such additional information and comments as the Applicant may wish to
present. The Committee shall reconsider the application in light of such
additional information and comments as the Applicant may have presented and, if
the Applicant shall have so requested, may grant the Applicant a formal hearing
before the Committee in its discretion. The Committee shall also permit the
Applicant or his designated representative to review pertinent documents in its
possession, including copies of the Plan document and information provided by
the Employer relating to the Applicant's entitlement to such benefit. The
Committee shall render a decision no later than the date of the Committee
meeting next following receipt of the request for review, except that (i) a
decision may be rendered no later than the second following Committee meeting if
the request is received within 30 days of the first meeting and (ii) under
special circumstances which require an extension of time for rendering a
decision (including but not limited to the need to hold a hearing), the decision
may be rendered not later than the date of the third Committee meeting following
the receipt of the request for review. If such an extension of time for review
is required because of special circumstances, written notice of the extension
shall be furnished to the Applicant prior to the commencement of the extension.
Notice of the Committee's final decision shall be furnished to the Applicant in
writing, in a manner calculated to be understood by him, and if the Applicant's
claim on review is denied in whole or in part, the notice shall set forth the
specific reason or reasons for the denial and the specific reference to the
pertinent plan provisions on which the denial is based, the Applicant's right to
receive upon request, free of charge, reasonable access to, and copies of, all
relevant documents, records and other information to his claim, and his right to
bring a civil action under Section 502(a) of ERISA. If the decision on review is
not furnished within the time period set forth above, the claim shall be deemed
denied on review. Benefits under this Plan will only be paid if the Committee
decides in its discretion that the Applicant is entitled to them.

                                      -13-
<PAGE>

         2.17 Disputed Benefits: If any dispute shall arise between a
Participant or other person claiming under a Participant and the Committee after
review of a claim for benefits, or in the event any dispute shall develop as to
the person to whom the payment of any benefit under the Plan shall be made, the
Trustee may withhold the payment of all or any part of the benefits payable
hereunder to the Participant or other person claiming under the Participant
until such dispute has been resolved by a court of competent jurisdiction or
settled by the parties involved.

                                      -14-
<PAGE>

                                   ARTICLE III

                            PARTICIPATION IN THE PLAN

         3.1 Eligibility of Employees: An Employee eligible to participate under
a REMA Union Plan immediately preceding the Effective Date shall be eligible to
become a Participant in this Plan as of the Effective Date. From and after the
Effective Date, each eligible Employee who is not a Participant and who began
Service with an Employer on or after the Effective Date shall be initially
eligible to participate in the Plan as soon as practicable following the later
of the Effective Date or the date he first begins Service with an Employer. An
Employee who is eligible to receive Profit Sharing Contributions (if any) shall
become a Participant for purposes of such contributions as of the later of the
Effective Date or the date he first begins Service with an Employer. Any
Participant who terminates his Service and subsequently recommences his Service
with an Employer shall again become eligible to participate in the Plan as soon
as practicable following the first date he recommences his service; provided,
however, that if such Employee was a Grandfathered Local 327 Employee or
Grandfathered Local 459 Employee prior to such termination of Service, he shall
not be a Grandfathered Local 327 Employee or Grandfathered Local 459 Employee,
as applicable, on or after such re-employment date.

                  The foregoing notwithstanding, each eligible Local 47 Employee
and Local 66 Employee as of the Transfer Date shall be eligible to become a
Participant in the Plan as of the Transfer Date.

                  Notwithstanding the foregoing to the contrary, each of the
following individuals shall be ineligible to participate in this Plan: (i) an
Employee who is not covered by a Collective Bargaining Agreement; (ii) a Local
47 Employee or Local 66 Employee prior to the Transfer Date; (iii) an Employee
who is a Leased Employee; (iv) an individual who is designated, compensated or
otherwise classified or treated as an independent contractor or a leased
employee by an Employer or an Affiliate; and (v) an individual who is a
nonresident alien and who receives no United States source earned income from
the Employer.

         3.2 Employee Information: The Committee shall maintain records which
shall reflect as to each Employee his date of birth, all dates reflecting when
he entered into or left the employment of any Employer, and his years of Vesting
Service. The Employer shall make available to the Committee all such information
as may be required by the Committee for the purposes of maintaining such
information as to each Employee.

         3.3 Notification of Eligible Employees: Each eligible Employee shall be
notified that he is eligible to participate in the Plan upon commencement of his
Service as soon as administratively practicable.

         3.4 Application by Participants to Make Pre-Tax and/or After-Tax
Contributions:

                  Each Participant pursuant to this Article III who desires to
make Pre-Tax Contributions and/or After-Tax Contributions to the Plan shall
complete an application in such form as may be prescribed by the Committee in
which the Participant shall elect to make and

                                      -15-
<PAGE>

designate the amount of his Contributions, as contemplated under Sections 4.2
and 4.3 hereof, and his choice of investment options under Section 8.1 hereof.

         3.5 Service Defined:

                  (a) For purposes of the Plan, the term "Service" shall mean
         all years, months and days of active employment with an Employer or an
         Affiliate from and after the Effective Date as an Employee, a
         Participant or a Participant on inactive status, as described in
         Section 3.11 ("Transferred Participant"), including periods includable
         under Sections 3.8 and 3.9, and the following periods of "Authorized
         Absence" during which a Participant or Transferred Participant is:

                           (i) Absent due to Qualified Military Service,
                  provided that such Employee or Participant complies with all
                  prerequisites of applicable Federal law and applied for
                  reinstatement of employment pursuant to the procedures and
                  requirements of the Employer and, if applicable, the
                  Committee, to the extent consistent with applicable Federal
                  law; or

                           (ii) Absent due to accident or sickness as long as
                  the Employee or Participant is continued on the employment
                  rolls of the Employer and remains eligible to work upon his
                  recovery, provided that such Employee or Participant timely
                  applied for reinstatement of employment following his date of
                  recovery in accordance with the procedures and requirements of
                  the Employer and, if applicable, the Committee; or

                           (iii) Absent due to an authorized leave of absence,
                  including periods of Leave for Business and Civic Reasons,
                  subject to such conditions as may be approved by the Committee
                  consistently applied in a uniform and non-discriminatory
                  manner to all employees similarly situated.

                  (b) With respect to a REMA Union Plan Participant who becomes
         eligible to participate in the Plan as of the Effective Date, his
         Service shall also include his "service" determined in accordance with
         the provisions of the applicable REMA Union Plan as of December 31,
         2001. With respect to a Local 47 Employee or Local 66 Employee who is
         eligible to become a Participant as of the Transfer Date, his Service
         shall also include his service with Reliant Energy, Incorporated and
         its affiliates prior to the Effective Date.

                  (c) An Employee's or Participant's Service shall also include
         any period required to be included as Service by federal law other than
         ERISA or the Code, but only under the conditions and to the extent so
         required by such federal law. In addition, the Committee, in its
         discretion, may credit an individual with Service based on employment
         with an entity other than the Employer, but only if and when such
         individual becomes an Employee eligible to participate in the Plan
         under this Article III and only if such crediting of Service (i) has a
         legitimate

                                      -16-
<PAGE>

         business reason, (ii) does not by design or operation discriminate
         significantly in favor of "highly compensated employees" (as defined in
         Code Section 414(q)), and (iii) is applied to all similarly situated
         Employees eligible to participate in the Plan under this Article III.
         Furthermore, in the event that the Plan constitutes a plan of a
         predecessor employer within the meaning of Section 414(a) of the Code,
         service for such predecessor employer shall be treated as Service to
         the extent required by Section 414(a) of the Code.

         3.6 Commencement and Termination of Service:

                  (a) From and after the Effective Date, an Employee's or
         Participant's Service shall commence (or recommence) on the date he
         first performs an "hour of service" within the meaning of Department of
         Labor Regulation Section 2530.200b-2(a)(1) for an Employer or
         Affiliate. All periods of Service shall be aggregated so that a
         one-year period of Service shall be completed as of the date the
         Employee or Participant completes 365 days of Service. Hours of service
         and Service will be credited for employment with other members of an
         affiliated service group (under Code Section 414(m)), a controlled
         group of corporations (under Code Section 414(b)), or a group of trades
         or businesses under common control (under Code Section 414(c)), of
         which the Employer is a member.

                  (b) Except as otherwise provided in this Article III, a period
         of Service of an Employee or Participant shall terminate on the date of
         the first to occur of:

                           (i) His Retirement or death;

                           (ii) His quitting or discharge;

                           (iii) His deemed date of termination of employment
                  pursuant to his failure to return to work upon the expiration
                  of such an Authorized Absence; or

                           (iv) One year from the date the Employee or
                  Participant is absent from active employment for any reason
                  other than Retirement, quitting, discharge, Authorized Absence
                  or death.

         For purposes of clause (iii) immediately above, an Employee's or
         Participant's deemed date of termination shall be the earlier of (1)
         the expiration date of such Authorized Absence or (2) one year from the
         date such Authorized Absence commenced. Notwithstanding any provision
         of this Plan to the contrary, contributions, benefits and service
         credit with respect to Qualified Military Service will be provided in
         accordance with Section 414(u) of the Code.

                                      -17-
<PAGE>

         3.7 Break In Service:

                  (a) A Break In Service shall occur upon the expiration of the
         12 consecutive month period next following an Employee's or a
         Participant's termination of Service, as determined in accordance with
         the provisions of Section 3.6(b), unless such Employee or Participant
         sooner recommences Service with an Employer or Affiliate. In the event
         an Employee or Participant recommences Service with an Employer or
         Affiliate prior to incurring a Break In Service, the period of his
         interim absence shall constitute Service for all purposes of the Plan,
         as provided under Section 3.8 below.

                  (b) Solely for purposes of determining whether a Break In
         Service has occurred under this Plan, the Service of an individual who
         is absent from work for maternity or paternity reasons shall not
         terminate until the expiration of two years after the date such absence
         commenced. For purposes of this paragraph, an absence from work for
         maternity or paternity reasons means an absence (i) by reason of the
         pregnancy of the Employee or Participant, (ii) by reason of the birth
         of a child of the Employee or Participant, (iii) by reason of the
         placement of a child with the Employee or Participant in connection
         with the adoption of such child by such Employee or Participant or (iv)
         for purposes of caring for such child for a period beginning
         immediately following such birth or placement. In order for the absence
         of a Participant or an Employee to qualify as a maternity/paternity
         leave, the Participant must furnish the Committee, in a timely manner,
         with such information and documentation as the Committee shall
         reasonably require to establish that the absence from work is for the
         reasons referred to above and the number of days for which there was
         such absence.

                  (c) Notwithstanding any provision of this Article III to the
         contrary, for purposes of determining eligibility to participate and
         vesting under the Plan, Service shall be continued during any leave
         taken pursuant to the Family and Medical Leave Act of 1993 and no Break
         In Service shall occur due, in whole or in part, to such leave.

         3.8 Effect of Re-employment Prior to a Break In Service: In the event
an Employee or Participant is re-employed by an Employer or Affiliate prior to a
Break In Service, the period of his interim absence shall constitute Service for
eligibility and vesting purposes under the Plan.

         3.9 Effect of Re-employment After a Break In Service: In the event an
Employee or Participant is re-employed by an Employer or Affiliate after a Break
In Service, the following rules shall apply in determining his participation in
the Plan under Section 3.1 and his Vesting Service under Section 3.10:

                  (a) Participation: If the re-employed person was not a
         Participant during his prior period of Service, he shall be eligible to
         commence participation in the Plan on the date of his re-employment if
         he otherwise meets the

                                      -18-
<PAGE>

         requirements of Section 3.1. If the re-employed Employee was a
         Participant during his prior period of Service, he shall recommence
         participation in the Plan on the date of his re-employment if he
         otherwise meets the requirements of Section 3.1, and any forfeitures
         from his Employer Matching Account and Profit Sharing Account, as
         applicable, shall be reinstated to the extent provided in Section 6.9.

                  (b) Vesting Service: Any Vesting Service attributable to the
         re-employed Employee's prior period of Service shall be reinstated as
         of the date of his recommencement of participation in the Plan.

         3.10 Vesting Service: Subject to the Break In Service provisions of
this Article III, a Participant's Vesting Service shall equal each day of
Service earned after the Participant's employment date with an Employer or
Affiliate. The foregoing notwithstanding, the Vesting Service of a Local 66
Employee who is eligible to participate in the Plan as of the Transfer Date
shall include his service with Reliant Energy, Incorporated and its affiliates
prior to the Effective date and in no event shall such Participant's Vesting
Service as of the Transfer Date be less than his years of "Vesting Service"
under the Reliant Energy, Incorporated Savings Plan as of the date immediately
preceding the Transfer Date, as defined and determined under the Reliant Energy
Incorporated Savings Plan.

         3.11 Transferred Participants:

                  (a) For purposes of determining eligibility to participate in
         the Plan and Vesting Service under this Article III, a Participant's
         Service shall include his employment with an Affiliate after it becomes
         an Affiliate; provided, however, that all such employment is determined
         in accordance with the re-employment provisions of Sections 3.8 and
         3.9. If an individual is transferred from an employment classification
         with an Employer that is not covered by the Plan to an employment
         classification that is so covered, or from an Affiliate that is not an
         Employer to an employment classification with an Employer that is so
         covered, his period of Service prior to the date of transfer shall be
         considered for purposes of determining his eligibility to become a
         Participant under Section 3.1 and for purposes of vesting under Section
         6.1. In addition, if such transferred Participant had an account in a
         qualified defined contribution plan maintained by such Affiliate, such
         account shall be transferred to the Trust Fund under this Plan if the
         transfer is permitted by the terms of said plan and if the Committee
         determines that the transferred account will not fail to satisfy
         Section 401(a) or 411(d)(6) of the Code. Any transferred account shall
         be subject to the provisions of this Plan; provided, however, that the
         vesting provisions of the transferor plan shall continue to apply.

                  (b) If a Participant is transferred to employment with an
         Employer or Affiliate which is not eligible employment covered by the
         Plan, his participation

                                      -19-
<PAGE>

         in the Plan shall be suspended; provided, however, that during the
         period of his employment in such ineligible position:

                           (i) Subject to the re-employment provisions of
                  Sections 3.8 and 3.9, he shall be credited with Service in
                  accordance with this Article III;

                           (ii) He shall cease to have any right to make
                  Contributions pursuant to Sections 4.2 and 4.3; (iii) His
                  Employer Matching Account and Profit Sharing Account shall
                  receive no Employer Matching Contribution or Profit Sharing
                  Contribution allocations under Section 4.1;

                           (iv) He shall continue to participate in income
                  allocations of the earnings and/or losses of the Trust Fund
                  pursuant to Section 5.3;

                           (v) No distribution event shall be deemed to have
                  occurred under Section 6.1; and

                           (vi) The loan privileges under Section 7.3 and the
                  provisions of Article VIII shall continue to apply.

                           In addition, the Committee may, at its discretion,
         authorize the transfer of his Accounts under this Plan to the Trust
         Fund funding the qualified defined contribution plan, if any, of the
         Affiliate to which the Participant was transferred. In such event, the
         provisions of the transferee plan shall govern.

                                      -20-
<PAGE>

                                   ARTICLE IV

                            CONTRIBUTIONS TO THE PLAN

         4.1 Employer Contributions:

                  (a) Benefit Program I. Benefit Program I Participants shall be
         eligible for the Employer Contributions provided under this subsection
         (a):

                           (i) Employer Matching Contributions. The Employer
                  shall make an Employer Matching Contribution (subject to
                  adjustment for limitations on annual additions as elsewhere
                  specified in the Plan) in an amount in cash to be allocated
                  under Article V to the Employer Matching Account of each
                  Benefit Program I Participant equal to 100% of the total of
                  his Pre-Tax Matched Contribution and After-Tax Matched
                  Contribution for each payroll period (not to exceed 6%).

                           (ii) Profit Sharing Contributions: For any Plan Year,
                  the Employer may, in its sole discretion, make a Profit
                  Sharing Contribution or Contributions (subject to adjustments
                  for forfeitures and limitations on annual additions as
                  elsewhere specified in the Plan) as described in paragraph (A)
                  and/or paragraph (B) below, as follows:

                                    (A) Annual Profit Sharing Contribution: For
                           any Plan Year, the Employer may, in its sole
                           discretion, contribute to the Trust Fund a
                           discretionary Profit Sharing Contribution in an
                           amount, if any, necessary to result in a total
                           allocation under Article V to the Profit Sharing
                           Accounts of Benefit Program I Participants:

                           (1)      who, as of the last day of the applicable
                                    Plan Year, are (a) Benefit Program I
                                    Participants and (b) in active Service;

                           (2)      whose Service terminates during the
                                    applicable Plan Year other than due to death
                                    or Disability and who, as of such
                                    termination date, are (a) Benefit Program I
                                    Participants and (b) age 55 or older with
                                    five years of Service; and

                           (3)      whose Service terminates during the
                                    applicable Plan Year due to death or
                                    Disability and who, as of such termination
                                    date, are Benefit Program I Participants;

                           equal to a percentage, not to exceed 3%, determined
                           by the Chairman of the Committee, in his sole
                           discretion, of each such eligible Participant's
                           Compensation for such Plan Year ("Annual Profit
                           Sharing Contribution"). The Annual Profit Sharing

                                      -21-
<PAGE>

                           Contribution may be made in cash, Company Stock or a
                           combination of cash and Company Stock, as determined
                           by the Chairman of the Committee, in his sole
                           discretion. Any Annual Profit Sharing Contribution
                           shall be communicated to eligible Participants within
                           90 days following the close of the applicable Plan
                           Year, with such contribution to be made as soon as
                           administratively practicable on or after the date of
                           such communication, but in no event later than the
                           time prescribed by law for filing the federal income
                           tax return of the Company for the applicable Plan
                           Year, including any extension which has been granted
                           for the filing of such tax return.

                                    (B) Payroll Profit Sharing Contributions:
                           For any Plan Year, the Employer may, in its sole
                           discretion, contribute to the Trust Fund a
                           discretionary Profit Sharing Contribution in cash as
                           soon as administratively practicable on or after each
                           payroll period during such Plan Year in an amount to
                           result in a total allocation under Article V to the
                           Profit Sharing Accounts of each Benefit Program I
                           Participant as of the last day of each payroll period
                           equal to a percentage of each such Participant's
                           eligible Compensation (as defined below) for each
                           such payroll period, as determined by the Chairman of
                           the Committee, in his sole discretion ("Payroll
                           Profit Sharing Contribution"). For any Plan Year in
                           which the Payroll Profit Sharing Contribution is
                           elected to be made, Compensation for such
                           contributions shall be limited to the first $85,000
                           (or such other amount determined by the Chairman of
                           the Committee, in his sole discretion) of
                           Compensation for such Plan Year. With the exception
                           of the 2002 Plan Year, any Payroll Profit Sharing
                           Contribution shall be communicated to eligible
                           Participants prior to the first day of the applicable
                           Plan Year.

                  (b) Benefit Program II. Benefit Program II Participants shall
         be eligible for the Employer Contributions provided under this
         subsection (b):

                                    Employer Matching Contributions: The
                           Employer shall make an Employer Matching Contribution
                           (subject to adjustment for limitations on annual
                           additions as elsewhere specified in the Plan) in an
                           amount in cash to be allocated under Article V to the
                           Employer Matching Account of each Benefit Program II
                           Participant equal to 65% of the total of his Pre-Tax
                           Matched Contribution and After-Tax Matched
                           Contribution for each payroll period (not to exceed
                           4%).

                                      -22-
<PAGE>

                  (c) Benefit Program III. Benefit Program III Participants
         shall be eligible for the Employer Contributions provided under this
         subsection (c):

                           (i) Employer Matching Contributions: The Employer
                  shall make an Employer Matching Contribution (subject to
                  adjustments for forfeitures and limitations on annual
                  additions as elsewhere specified in the Plan) in an amount in
                  Company Stock to be allocated under Article V to the Employer
                  Matching Account of each Benefit Program III Participant equal
                  to 75% of the total of his Pre-Tax Matched Contribution and
                  After-Tax Matched Contribution for each payroll period (not to
                  exceed 6%).

                           (ii) Discretionary Employer Matching Contributions:
                  In addition to the Employer Matching Contributions under the
                  foregoing clause (i), for any Plan Year, the Employer, in its
                  sole discretion, may make a discretionary Employer Matching
                  Contribution in an amount in shares of Company Stock to be
                  allocated under Article V to the Employer Matching Accounts of
                  Benefit Program III Participants:

                  (A)      who, as of the last day of the applicable Plan Year,
                           are (1) Benefit Program III Participants and (2) in
                           active Service;

                  (B)      whose Service terminates during the applicable Plan
                           Year other than due to death or Disability and who,
                           as of such termination date, are (1) Benefit Program
                           III Participants and (2) age 55 or older with five
                           years of Service; and

                  (C)      whose Service terminates during the applicable Plan
                           Year due to death or Disability and who, as of such
                           termination date, are Benefit Program III
                           Participants;

                  equal to a percentage, determined by the Chairman of the
                  Committee, in his sole discretion, of the total of each such
                  eligible Participant's Pre-Tax Matched Contributions and
                  After-Tax Matched Contributions for such Plan Year. Any
                  discretionary Employer Matching Contribution under this clause
                  (ii) shall be communicated to such eligible Participants
                  within 90 days following the close of the applicable Plan
                  Year, with such contribution to be made as soon as
                  administratively practicable on or after the date of such
                  communication, but in no event later than the time prescribed
                  by law for filing the federal income tax return of the Company
                  for the applicable Plan Year, including any extension which
                  has been granted for the filing of such tax return.

                  (d) Forfeitures: To the extent specified in Section 5.3, any
         amount attributable to forfeitures will be applied to reduce, to the
         extent of such forfeitures, the Employer Matching Contributions and/or
         Profit Sharing

                                      -23-
<PAGE>

         Contributions (if any) made under this Section 4.1 next following the
         determination of any such forfeiture amounts and/or pay incident
         expenses of the Plan. In the event that a forfeiture arising under
         Section 6.1 is reinstated under Section 6.9 because of the return to
         the employment of the terminated Participant, or in the event that a
         forfeiture arising under Section 6.11 is reinstated in accordance with
         the provisions of Section 6.11 because of an appropriate claim of
         forfeited unclaimed benefit by the Participant, Beneficiary or other
         distributee, the Employer shall contribute, within a reasonable time
         following such reemployment or claim, an amount equal to the forfeiture
         to be reinstated.

         4.2 Pre-Tax Contributions: Each Participant who has elected to defer a
portion of his salary as a Pre-Tax Matched Contribution to the Plan, pursuant to
Section 3.4, shall defer as his Pre-Tax Matched Contribution to the Trust Fund,
in whole percentages, from 1% up to the "Maximum Matched Contribution Percent"
(as defined below), as he may designate, of his Compensation for each payroll
period. The "Maximum Matched Contribution Percent" shall be equal to:

         (a)      4% of Compensation for a payroll period, if the Participant is
                  a Benefit Program II Participant; and

         (b)      6% of Compensation for a payroll period, if the Participant is
                  a Benefit Program I Participant or a Benefit Program III
                  Participant.

In addition, each Participant may also elect to defer any whole percent above
the Maximum Matched Contribution Percent, but not to exceed the "Maximum
Unmatched Contribution Percent" (as defined below), as he may designate, of his
Compensation as a Pre-Tax Unmatched Contribution. The "Maximum Unmatched
Contribution Percent" shall be equal to:

         (a)      18% of Compensation for a payroll period, if the Participant
                  is a Benefit Program II Participant; and

         (b)      10% of Compensation for a payroll period, if the Participant
                  is a Benefit Program I Participant or a Benefit Program III
                  Participant.

Each Participant's Pre-Tax Matched Contribution and Pre-Tax Unmatched
Contribution, if any, shall be contributed to the Trust Fund by the Employer as
soon as practicable. A Participant's Pre-Tax Contributions under this Plan and
all other plans, contracts or arrangements of the Employer shall not exceed a
maximum dollar limitation provided under Code Section 402(g), as adjusted by the
Secretary of the Treasury or his delegate for cost-of-living increases pursuant
to Code Section 402(g). In the event a Participant's Pre-Tax Contributions
exceed the applicable limit described in the preceding sentence, or in the event
the Participant submits a written claim under the Plan, at the time and in the
manner prescribed by the Committee, specifying an amount of Pre-Tax
Contributions that will exceed the applicable limit of Section 402(g) of the
Code when added to the amounts deferred by the Participant in other plans or
arrangements, such excess (the "Excess Deferrals"), plus any income and minus
any loss allocable to such amount, shall be returned to the Participant by April
15 of the following year. Excess Deferrals shall be

                                      -24-
<PAGE>

treated as Annual Additions under Section 5.4 of the Plan. Each Participant's
Pre-Tax Contribution Account shall be fully vested and non-forfeitable at all
times.

                  When first electing to participate in the Plan, each
Participant shall give advance notification by electronic, telephonic, written
or other such manner as may be prescribed from time to time by the Committee, of
the amount he elects to defer as a Pre-Tax Matched Contribution and as a Pre-Tax
Unmatched Contribution. Each such election shall continue in effect during
subsequent Plan Years unless the Participant shall give timely notice of his
election to change or discontinue his Pre-Tax Matched Contribution or his
Pre-Tax Unmatched Contribution in accordance with procedures established from
time to time by the Committee.

                  A Participant may change the rate of his Pre-Tax Matched
Contribution and/or Pre-Tax Unmatched Contribution, with no restrictions on
frequency, by electronic, telephonic, written or other such manner as may be
prescribed from time to time by the Committee. A Participant may discontinue his
Pre-Tax Matched Contribution and/or Pre-Tax Unmatched Contribution, with no
restrictions on frequency, by electronic, telephonic, written or other such
manner as may be prescribed from time to time by the Committee. Any such change
or discontinuance in the rate of Pre-Tax Matched and/or Pre-Tax Unmatched
Contributions shall be effective as soon as reasonably practicable following
receipt of the change or discontinuance of elections.

         4.3 After-Tax Contributions: Each Participant who has elected to make a
Pre-Tax Matched Contribution of less than the Maximum Matched Contribution
Percent (as defined in Section 4.2) of his Compensation may elect to make an
After-Tax Matched Contribution to the Plan, pursuant to Section 3.4, of 1% up to
the Maximum Matched Contribution Percent, in whole percentages, as he may
designate, of his Compensation for each payroll period, provided that the total
of his Pre-Tax Matched Contribution, if any, and his After-Tax Matched
Contribution does not exceed the Maximum Matched Contribution Percent of his
Compensation for a payroll period. In addition to the foregoing:

         (i)      each Benefit Program II Participant who has elected to make a
                  Pre-Tax Unmatched Contribution of less than the Maximum
                  Unmatched Contribution Percent of his Compensation for each
                  payroll period may elect to contribute to the Plan any whole
                  percent not to exceed the Maximum Unmatched Contribution
                  Percent of his Compensation as an After-Tax Unmatched
                  Contribution; provided, however, that (a) the total of his
                  Pre-Tax Unmatched Contribution, if any, and his After-Tax
                  Unmatched Contribution does not exceed the Maximum Unmatched
                  Contribution Percent of his Compensation for a payroll period,
                  and (b) the total of his After-Tax Matched Contribution and
                  After-Tax Unmatched Contribution does not exceed 10% for a
                  payroll period. Each Participant's After-Tax Matched
                  Contribution and After-Tax Unmatched Contribution, if any,
                  shall be withheld from each of his paychecks and contributed
                  to the Trust Fund by the Employer as soon as practicable; and

                                      -25-
<PAGE>

         (ii)     each Benefit Program I Participant or Benefit Program III
                  Participant who has elected to make a Pre-Tax Unmatched
                  Contribution of less than the Maximum Unmatched Contribution
                  Percent of his Compensation for each payroll period may elect
                  to contribute to the Plan any whole percent not to exceed the
                  Maximum Unmatched Contribution Percent of his Compensation as
                  an After-Tax Unmatched Contribution; provided, however, that
                  the total of his Pre-Tax Unmatched Contribution, if any, and
                  his After-Tax Unmatched Contribution does not exceed the
                  Maximum Unmatched Contribution Percent of his Compensation for
                  a payroll period.

Each Participant's After-Tax Contribution Account shall be fully vested and
non-forfeitable at all times

                  When first electing to participate in the Plan, each
Participant shall give advance notification by electronic, telephonic, written
or other such manner as may be prescribed from time to time by the Committee, of
the amount he elects to contribute as an After-Tax Matched Contribution and as
an After-Tax Unmatched Contribution. Each such election shall continue in effect
during subsequent Plan Years unless the Participant shall give timely notice of
his election to change or discontinue his After-Tax Matched Contribution or his
After-Tax Unmatched Contribution in accordance with procedures established from
time to time by the Committee.

                  A Participant may change the amount of his After-Tax Matched
Contribution and/or After-Tax Unmatched Contribution, with no restrictions on
frequency, by electronic, telephonic, written or other such manner as may be
prescribed from time to time by the Committee. A Participant may discontinue his
After-Tax Matched Contribution and/or After-Tax Unmatched Contribution, with no
restrictions on frequency, by electronic, telephonic, written or other such
manner as may be prescribed from time to time by the Committee. Any such change
or discontinuance in the amount of After-Tax Matched or Unmatched Contributions
shall be effective as soon as reasonably practicable following receipt of the
change or discontinuance of elections.

         4.4 Actual Deferral Percentage: The Actual Deferral Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:

                  (a) the amount of Pre-Tax Contributions (i) allocated to each
         such Employee's Account under the Plan as of a date during the Plan
         Year, without contingency on future participation in the Plan or
         performance of future services, (ii) actually paid to the Plan on
         behalf of each such Employee for such Plan Year no later than the end
         of the 12-month period immediately following such Plan Year and (iii)
         that relates to Compensation that either would have been received by
         the Employee in such Plan Year (but for the deferral election) or is
         attributable to services performed by the Employee in the Plan Year and
         would have been received by the Employee within 2 1/2 months after the
         close of the Plan Year (but for the deferral election); over

                                      -26-
<PAGE>

                  (b) the Employee's Compensation (as defined in Treasury
         Regulation Section 1.414(s)-1(c)) for such Plan Year.

                  The Plan uses the Actual Deferral Percentage for Participants
who are Highly Compensated Employees (as defined in Section 4.5) for the current
Plan Year and the Actual Deferral Percentage for Participants who are non-Highly
Compensated Employees for the preceding Plan Year in performing the
nondiscrimination testing required under this Article IV. Notwithstanding any
provision in this Plan to the contrary, an Employer may, to the extent permitted
by the Code and applicable regulations, elect to include as Compensation pre-tax
contributions made under this Plan or any other plan of the Employer, and may
elect to exclude as Compensation any Compensation received by a Participant
during the Plan Year while such Participant was not eligible to be a Participant
in the Plan.

                  An eligible Employee for the purpose of computing the Actual
Deferral Percentage is defined in Treasury Regulation Section 1.401(k)-1(g)(4).
The Actual Deferral Percentage of an eligible Employee who makes no Pre-Tax
Contributions is zero. The individual ratios and Actual Deferral Percentages
shall be calculated to the nearest 1/100 of 1% of an Employee's Compensation.

         4.5 Actual Deferral Percentage Limits: The Actual Deferral Percentage
for the eligible Highly Compensated Employees for any Plan Year shall not exceed
the greater of (a) or (b), as follows:

                  (a) the Actual Deferral Percentage of Compensation for the
         eligible non-Highly Compensated Employees times 1.25; or

                  (b) the lesser of (i) the Actual Deferral Percentage of
         Compensation for the eligible non-Highly Compensated Employees times
         2.0 or (ii) the Actual Deferral Percentage of Compensation for the
         eligible non-Highly Compensated Employees plus two percentage points or
         such lesser amount as the Secretary of the Treasury shall prescribe to
         prevent the multiple use of this alternative limitation with respect to
         any Highly Compensated Employee.

                  "Highly Compensated Employee" shall mean any Employee and any
employee of an Affiliate who is a highly compensated employee under Section
414(q) of the Code, including any Employee and any employee of an Affiliate who:

                  (i) was a "5% owner" (as defined in Code Section 416(i))
         during the current Plan Year or prior Plan Year; or

                  (ii) received Compensation during the prior Plan Year (as
         defined in Section 5.5(c)(6)) in excess of $85,000, or such other
         amount as determined by the Secretary of the Treasury or his delegate,
         excluding Employees described in Code Section 414(q)(8).

                                      -27-
<PAGE>

                  In determining an Employee's status as a Highly Compensated
Employee within the meaning of Section 414(q), the entities set forth in
Treasury Regulation Section 1.414(q)-1T Q&A-6(a)(1) through (4) must be taken
into account as a single employer. A former Employee shall be treated as a
Highly Compensated Employee if (1) such former Employee was a Highly Compensated
Employee when he separated from Service or (2) such former Employee was a Highly
Compensated Employee in Service at any time after attaining age 55.

                  The Actual Deferral Percentage for any Highly Compensated
Employee who is eligible to have deferred contributions allocated to his account
under one or more plans described in Section 401(k) of the Code that are
maintained by an Employer or an Affiliate in addition to this Plan shall be
determined as if all such contributions were made to this Plan. For purposes of
determining whether the Actual Deferral Percentage limits of this Section are
satisfied, all Pre-Tax Contributions that are made under two or more plans that
are aggregated for purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)) are to be treated as made under a single plan, and if
two or more plans are permissively aggregated for purposes of Code Section
401(k), the aggregated plans must also satisfy Code Sections 401(a)(4) and
410(b) as though they were a single plan.

         4.6 Reduction of Pre-Tax Contribution Rates by Leveling Method: If, on
the basis of the Pre-Tax Contribution rates elected by Participants for any Plan
Year, the Committee determines, in its sole discretion, that neither of the
tests contained in (a) or (b) of Section 4.5 will be satisfied, the Committee
may reduce the Pre-Tax Contribution rate of any Participant who is among the
eligible Highly Compensated Employees to the extent necessary to reduce the
overall Actual Deferral Percentage for eligible Highly Compensated Employees to
a level which will satisfy either (a) or (b) of Section 4.5. The reductions in
Pre-Tax Contribution rates shall be made in a manner so that the Actual Deferral
Percentage of the affected Participants who elected the highest Actual Deferral
Percentage shall be first lowered to the level of the affected Participants who
elected the next to the highest Actual Deferral Percentage. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 4.5,
both of the above-described groups of Participants will be lowered to the level
of Participants with the next highest Actual Deferral Percentage, and so on,
until sufficient total reductions in Pre-Tax Contribution rates have occurred to
achieve compliance with (a) or (b) of Section 4.5. The Committee may, in its
discretion, permit a Participant whose Pre-Tax Contributions are reduced under
this paragraph to contribute a like amount to his After-Tax Contribution
Account.

         4.7 Increase in Pre-Tax Contribution Rates: If a Participant's Pre-Tax
Contribution is reduced below the level necessary to satisfy either (a) or (b)
of Section 4.5 for the Plan Year, such Participant may be eligible to increase
his Pre-Tax Contribution rate for the remainder of the Plan Year to a level not
in excess of that level which will satisfy the greater of (a) or (b) of Section
4.5. Such an increase in the Pre-Tax Contribution rate shall be made by
Participants on a uniform and non-discriminatory basis, pursuant to such rules
and procedures as the Committee may prescribe.

         4.8 Excess Pre-Tax Contributions: As soon as possible following the end
of the Plan Year, the Committee shall determine whether either of the tests
contained in Section 4.5 was

                                      -28-
<PAGE>

satisfied as of the end of the Plan Year, and any excess Pre-Tax Contributions,
plus any income and minus any loss attributable thereto, of those Participants
who are among the Highly Compensated Employees shall be distributed, first from
Pre-Tax Unmatched Contributions (if any) and then from Pre-Tax Matched
Contributions, to such Participants in the manner provided below based on the
amount of Pre-Tax Contributions. In addition, the Employer Contribution made
with respect to such excess Pre-Tax Contributions shall be forfeited and applied
to reduce future Employer Contributions otherwise required under Section 4.1.
Such income shall include the allocable gain or loss for the Plan Year only.

                  The amount of any excess Pre-Tax Contributions to be
distributed to a Participant shall be reduced by Excess Deferrals previously
distributed to him pursuant to Section 4.2 for the taxable year ending in the
same Plan Year. All excess Pre-Tax Contributions shall be returned to the
Participants no later than the last day of the following Plan Year. The excess
Pre-Tax Contributions, if any, of each Participant who is among the Highly
Compensated Employees shall be determined by computing the maximum Actual
Deferral Percentage which each such Participant may defer under (a) or (b) of
Section 4.5 and then reducing the Actual Deferral Percentage of some or all of
such Participants through the distribution of such excess Pre-Tax Contributions,
on the basis of the amount of Pre-Tax Contributions of such Participants, as
necessary to reduce the overall Actual Deferral Percentage for eligible
Participants who are among the Highly Compensated Employees to a level which
satisfies either (a) or (b) of Section 4.5, according to the following
procedures:

                  (a) the Pre-Tax Contributions of the Highly Compensated
         Employee or Employees with the highest dollar amount of Pre-Tax
         Contributions shall be reduced to equal the dollar amount of the
         Pre-Tax Contributions of the Highly Compensated Employee or Employees
         with the next highest dollar amount of Pre-Tax Contributions;

                  (b) the reduction amount determined in clause (a) shall be
         distributed to the Highly Compensated Employee or Employees who had the
         highest dollar amount of Pre-Tax Contributions prior to such reduction;
         and

                  (c) the procedures in clauses (a) and (b) shall be repeated
         until the total excess Pre-Tax Contributions are distributed and
         compliance is achieved with (a) or (b) of Section 4.5.

If these distributions are made, the Actual Deferral Percentage is treated as
meeting the nondiscrimination test of Section 401(k)(3) of the Code regardless
of whether the Actual Deferral Percentage, if recalculated after distributions,
would satisfy Section 401(k)(3) of the Code. The above procedures are used for
purposes of distributing excess Pre-Tax Contributions under Section
401(k)(8)(A)(i) of the Code. For purposes of Section 401(m)(9) of the Code, if a
corrective distribution of excess Pre-Tax Contributions has been made, the
Actual Deferral Percentage for Highly Compensated Employees is deemed to be the
largest amount permitted under Section 401(k)(3) of the Code.

                                      -29-
<PAGE>

                  The income or loss attributable to the Participant's excess
Pre-Tax Contributions for the Plan Year shall be determined by multiplying the
income or loss attributable to the Participant's Pre-Tax Contribution Account
balance for the Plan Year by a fraction, the numerator of which is the excess
Pre-Tax Contribution and the denominator of which is the Participant's total
Pre-Tax Contribution Account balance. Excess Pre-Tax Contributions shall be
treated as Annual Additions under Section 5.4 of the Plan.

         4.9 Contribution Percentage: The Contribution Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:

                  (a) the total of the Employer Matching Contributions and the
         After-Tax Contributions (the "Aggregate Contributions") paid under the
         Plan on behalf of each such Employee for such Plan Year; to

                  (b) the Employee's Compensation (as defined in Section
         4.4(b)).

                  The Plan uses the Contribution Percentage for Participants who
are Highly Compensated Employees for the current year and the Contribution
Percentage for Participants who are non-Highly Compensated Employees for the
preceding Plan Year in performing the non-discrimination testing required under
this Article IV. In computing the Contribution Percentage, the Employer may
elect to take into account After-Tax and Pre-Tax Contributions made under this
Plan or any other plan of the Employer to the extent that the following
requirements are satisfied:

                  (i) the amount of non-elective contributions, including those
         qualified non-elective contributions treated as Employer Matching
         Contributions for purposes of calculating the Contribution Percentage,
         satisfies the requirements of Section 401(a)(4) of the Code;

                  (ii) the amount of non-elective contributions, excluding those
         qualified non-elective contributions treated as Employer Matching
         Contributions for purposes of calculating the Contribution Percentage
         and those qualified non-elective contributions treated as elective
         contributions under Treasury Regulation Section 1.401(k)-1(b)(5) for
         purposes of calculating the Actual Deferral Percentage, satisfies the
         requirements of Section 401(a)(4) of the Code;

                  (iii) the elective contributions, including those treated as
         Employer Matching Contributions for purposes of calculating the
         Contribution Percentage, satisfy the requirements of Code Section
         401(k)(3);

                  (iv) the qualified non-elective contributions are allocated to
         the Employee under the Plan as of a date within the Plan Year and the
         elective contributions satisfy Treasury Regulation Section
         1.401(k)-1(b)(i) for the Plan Year; and, if applicable, the Plan and
         the plans to which the qualified non-elective

                                      -30-
<PAGE>

         contributions and elective contributions are made, are or could be
         aggregated for purposes of Code Section 410(b).

A Participant's Contribution Percentage shall be determined after determining
the Participant's Excess Deferrals, if any, pursuant to Section 4.2, and after
determining the Participant's excess Pre-Tax Contributions pursuant to Section
4.8.

                  An eligible Employee for purposes of computing the
Contribution Percentage is defined in Treasury Regulation Section
1.401(m)-1(f)(4). The Contribution Percentage will be zero for an eligible
Employee who received no allocation of Aggregate Contributions.

         4.10 Contribution Percentage Limits: The Contribution Percentage for
the eligible Employees for any Plan Year who are Highly Compensated Employees
shall not exceed the greater of (a) or (b), as follows:

                  (a) the Contribution Percentage for the eligible Employees who
         are not Highly Compensated Employees times 1.25; or

                  (b) the lesser of (i) the Contribution Percentage for the
         eligible Employees who are not Highly Compensated Employees times 2.0
         or (ii) the Contribution Percentage for the eligible Employees who are
         not Highly Compensated Employees plus two percentage points or such
         lesser amount as the Secretary of the Treasury shall prescribe to
         prevent the multiple use of this alternative limitation with respect to
         any Highly Compensated Employee.

                  The Contribution Percentage for any Highly Compensated
Employee for any Plan Year who is eligible to have matching employer
contributions made on his behalf or to make after-tax contributions under one or
more plans described in Section 401(a) of the Code that are maintained by an
Employer or an Affiliate in addition to this Plan shall be determined as if all
such contributions were made to this Plan.

                  In the event that this Plan must be combined with one or more
other plans in order to satisfy the requirements of Code Section 410(b), then
the Contribution Percentage shall be determined as if all such plans were a
single plan. If two or more plans are permissively aggregated for the purposes
of Code Section 410(b) (other than the average benefit percentage test), then
the Contribution Percentage shall be determined as if all such plans were a
single plan.

         4.11 Treatment of Excess Aggregate Contributions: If neither of the
tests described above in Section 4.10 is satisfied with respect to the Aggregate
Contributions, the excess Aggregate Contributions, plus any income and minus any
loss attributable thereto, shall be forfeited or, if not forfeitable, shall be
distributed no later than the last day of the Plan Year following the Plan Year
in which such excess Aggregate Contributions were made. Such income shall
include the allocable gain or loss for the Plan Year only. The income or loss
attributable to the Participant's excess Aggregate Contributions for the Plan
Year shall be determined by multiplying the income or loss attributable to the
Participant's Account for the Plan Year by a fraction, the numerator of which is
the excess Aggregate Contribution, and the denominator of

                                      -31-
<PAGE>

which is the Participant's total Employer Matching and After-Tax Contribution
Account balances. Excess Aggregate Contributions shall be treated as Annual
Additions under Section 5.4 of the Plan.

                  The excess Aggregate Contributions, if any, of each
Participant who is among the Highly Compensated Employees shall be determined by
computing the maximum Contribution Percentage under (a) or (b) of Section 4.10
and then reducing the Contribution Percentage of some or all of such
Participants whose Contribution Percentage exceeds the maximum through the
distribution or forfeiture of the excess Aggregate Contributions, on the basis
of the amount of such excess contributions attributable to such Participants, as
necessary to reduce the overall Contribution Percentage for eligible
Participants who are among the Highly Compensated Employees to a level which
satisfies either (a) or (b) of Section 4.10, according to the following
procedures:

                  (a) the Aggregate Contributions of the Highly Compensated
         Employee or Employees with the highest dollar amount of such
         contributions shall be reduced to equal the dollar amount of the
         Aggregate Contributions of the Highly Compensated Employee or Employees
         with the next highest dollar amount of such contributions;

                  (b) the reduction amount determined in clause (a) shall be
         forfeited by or, if not forfeitable, distributed to the Highly
         Compensated Employee or Employees who had the highest dollar amount of
         Aggregate Contributions prior to such reduction; and

                  (c) the procedures in clauses (a) and (b) shall be repeated
         until the total excess Aggregate Contributions are forfeited and/or
         distributed and compliance is achieved with (a) or (b) of Section 4.10.

If these forfeitures and/or distributions are made, the Contribution Percentage
is treated as meeting the nondiscrimination test of Section 401(m)(2) of the
Code regardless of whether the Contribution Percentage, if recalculated after
such forfeitures and/or distributions would satisfy Section 401(m)(2) of the
Code. For purposes of Section 401(m)(9) of the Code, if a corrective
distribution of excess Aggregate Contributions has been made, the Contribution
Percentage for Highly Compensated Employees is deemed to be the largest amount
under Section 401(m)(2) of the Code.

                  For each Participant who is a Highly Compensated Employee, the
amount of excess Aggregate Contributions is equal to the total Employer
Contributions and After-Tax Contributions on behalf of the Participant
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the Participant's actual contribution ratio
(determined after application of this paragraph) by his Compensation used in
determining such ratio. The individual ratios and Contribution Percentages shall
be calculated to the nearest 1/100 of 1% of the Employee's Compensation, as such
term is used in paragraph (b) of Section 4.10.

                                      -32-
<PAGE>

         4.12 Multiple Use of Alternative Limitation Shall Not Apply: The
multiple use test described in Treasury Regulation Section 1.401(m)- 2 shall not
apply for any Plan Year.

         4.13 Employer Matching Contributions and Pre-Tax Contributions to Be
Tax Deductible: Employer Matching Contributions, Profit Sharing Contributions
and Pre-Tax Contributions shall not be made in excess of the amount deductible
under applicable federal law now or hereafter in effect limiting the allowable
deduction for contributions to profit-sharing plans. Employer Matching
Contributions, Profit Sharing Contributions and Pre-Tax Contributions to this
Plan when taken together with all other contributions made by the Employer to
other qualified retirement plans shall not exceed the maximum amount deductible
under Section 404 of the Code.

         4.14 Maximum Allocations: Notwithstanding the above, the total Annual
Additions made to the Account of any Participant shall not exceed the limits
prescribed in Section 5.4.

         4.15 Refunds to Employer: Once Contributions are made to the Plan by
the Employer on behalf of the Participants, they are not refundable to the
Employer unless a Contribution:

                  (a) was made by mistake of fact; or

                  (b) was made conditioned upon the contribution being allowed
         as a deduction and such deduction was disallowed.

Any Contribution made by the Employer during any Plan Year in excess of the
amount deductible or any Contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to the
Employer is the excess of the amount contributed over the amount that would have
been contributed had there not occurred a mistake of fact or the excess of the
amount contributed over the amount deductible, as applicable. A Contribution
made by reason of a mistake of fact may be refunded only within one year
following the date of payment. Any Contribution to be refunded because it was
not deductible under Section 404 of the Code may be refunded only within one
year following the date the deduction was disallowed. Earnings attributable to
any such excess Contribution may not be withdrawn, but losses attributable
thereto must reduce the amount to be returned. In no event may a refund be due
which would cause the Account balance of any Participant to be reduced to less
than the Participant's Account balance would have been had the mistaken amount,
or the amount determined to be non-deductible, not been contributed.

                  Moreover, the contributions of the Employer to the Plan for
all Plan Years shall be returned to the Employer within one year in the event
that the Commissioner of Internal Revenue initially fails to rule that the Plan
and Trust are qualified and tax-exempt within the meaning of Code Sections 401
and 501, but only if such application for the determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan was adopted or such later date as the Secretary of the Treasury may
prescribe.

         4.16 Rollover Contributions: Notwithstanding any other provision of the
Plan, the Trustee shall be authorized to accept an "eligible rollover
distribution" within the meaning of

                                      -33-
<PAGE>

Code Section 402(c)(4) from an "eligible retirement plan" within the meaning of
Code Section 402(c)(8)(B) on behalf of, or from, a person who is (or who will be
entitled under Section 3.1 to become) a Participant in this Plan, provided that
such amounts contributed to this Plan are amounts described in Section
402(c)(2), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii) or 457(e)(16) of the Code.
Such a transferred distribution is referred to herein as a "rollover
contribution." The acceptance of rollover contributions under this Section 4.16
shall be subject to the following conditions:

                  (a) No rollover contribution shall be in an amount less than
         $500.

                  (b) Rollover contributions shall be in cash only.

                  (c) No rollover contribution may be transferred to the Plan
         without the prior approval of the Committee or its designee. The
         Committee shall develop such procedures and may require such
         information from an Employee desiring to make such a transfer as it
         deems necessary or desirable. The Committee may act in its sole
         discretion in determining whether to accept the transfer, and shall act
         in a uniform, non-discriminatory manner in this regard.

                  (d) Upon approval by the Committee or its designee, a rollover
         contribution shall be paid to the Trustee to be held in the Trust Fund.

                  (e) A separate Rollover Account shall be established and
         maintained for each Employee who has made a rollover contribution;
         provided, however, that the portion of such amounts contributed, if
         any, that are after-tax employee contributions not includable in gross
         income shall be accounted for separately, including separate accounting
         for the portion of such contribution that is includable in gross income
         and the portion that is not so includable. A Rollover Account shall
         share in the earnings and/or losses of the Trust Fund (and component
         Investment Funds in which such account may be invested) commencing on
         the Valuation Date coincident with or next following the date on which
         the transferred amount is placed in the Trust Fund. The Employee's
         interest in his Rollover Account shall be fully vested and
         non-forfeitable. If an Employee who is otherwise eligible to
         participate in the Plan but who has not yet begun participation under
         Section 3.1 of the Plan makes a rollover contribution to the Plan, his
         Rollover Account shall represent his sole interest in the Plan until he
         becomes a Participant.

                  (f) The Committee shall be entitled to rely on the
         representation of the Employee that the rollover contribution is an
         eligible rollover distribution. If, however, it is determined that a
         transfer received from or on behalf of a Employee failed to qualify as
         an eligible rollover distribution within the meaning of Code Section
         402(c)(4), then the balance in the Employee's Rollover Account
         attributable to the ineligible transfer shall, along with any earnings
         thereon, as soon as is administratively practicable, be:

                                      -34-
<PAGE>

                           (1) segregated from all other Plan assets;

                           (2) treated as a non-qualified trust established by
                  and for the benefit of the Participant; and

                           (3) distributed to the Employee.

         Such an ineligible transfer shall be deemed never to have been a part
of the Plan or Trust.

                                      -35-

<PAGE>
                                    ARTICLE V

                             PARTICIPANTS' ACCOUNTS

         5.1 Trust Accounts: The Committee shall create and maintain adequate
records to reflect all transactions of the Trust Fund and to disclose the
interest in the Trust Fund of each Participant (whether on active or inactive
status), former Participant and Beneficiary.

                  (a) Accounts: Accounts shall be maintained for each
         Participant as may be appropriate from time to time to reflect his
         interest in each Investment Fund in which he may be participating at
         any time as contemplated under Section 8.1. The interest in each
         available Investment Fund attributable to the Pre-Tax and/or After-Tax
         Contributions made by or on behalf of each Participant under the Plan
         shall be reflected in a Pre-Tax Contribution Account and/or an
         After-Tax Contribution Account for each Participant, respectively. The
         interest in each available Investment Fund of each Participant
         attributable to Employer Matching Contributions made to the Plan shall
         be reflected in an Employer Matching Account for each such Participant.
         The interest in each available Investment Fund of each Participant
         attributable to Profit Sharing Contributions made to the Plan shall be
         reflected in an Employer Matching Account and/or a Profit Sharing
         Account, respectively, for each such Participant. The interest in the
         Investment Funds of each Participant attributable to any rollover
         contributions pursuant to Section 4.16 shall be reflected in a Rollover
         Account.

                  (b) As applicable, the amounts in the REMA Union Plan "Pre-Tax
         Contribution Accounts," "After-Tax Contribution Accounts," "Matching
         Contribution Accounts," "Profit Sharing Contribution Accounts" and
         "Rollover Accounts" of REMA Union Plan Participants transferred to the
         Plan pursuant to the merger of the REMA Union Plans with and into the
         Plan shall be reflected in the Pre-Tax Contribution Accounts, After-Tax
         Contribution Accounts, Employer Matching Accounts, Profit Sharing
         Accounts and Rollover Accounts, respectively, for such Participants.
         With respect to Local 47 Employees and Local 66 Employees whose
         "Pre-Tax Contribution Accounts," "After-Tax Contribution Accounts,"
         "Employer Matching Accounts," "Profit Sharing Accounts" and "Rollover
         Accounts" under the REI Savings Plan are transferred to the Plan
         following the Transfer Date, the transferred balances of such accounts
         shall be reflected in the Pre-Tax Contribution Accounts, After-Tax
         Contribution Accounts, Employer Matching Accounts, Profit Sharing
         Accounts and Rollover Accounts, respectively, for such Participants.

                  (c) Rights in Trust Fund: The maintenance of individual
         Accounts is only for accounting purposes, and a segregation of the
         assets of the Trust Fund to each Account shall not be required.
         Distribution and withdrawals made from an Account shall be charged to
         the Account as of the date paid.

                                      -36-
<PAGE>

         5.2 Valuation of Trust Fund: A valuation of the Trust Fund shall be
made as of each Valuation Date of each Plan Year. For the purposes of each such
valuation, the assets of each Investment Fund shall be valued at their
respective current market values, and the amount of any obligations for which
the Investment Fund may be liable, as shown on the books of the Trustee, shall
be deducted from the total value of the assets. For the purposes of maintenance
of books of account in respect of properties comprising the Trust Fund, and of
making any such valuation, the Trustee shall account for the transactions of the
Trust Fund on an accrual basis. The current market value shall, for the purposes
hereof, be determined as follows:

                  (a) Where the properties are securities which are listed on a
         securities exchange, or which are actively traded over the counter, the
         value shall be the net asset value, if appropriate, otherwise, the last
         recorded sales price. In the event transactions regarding such property
         are recorded over more than one such exchange, the Trustee may select
         the exchange to be used for purposes hereof. Recorded information
         regarding any such securities published in The Wall Street Journal or
         any other publication deemed appropriate may be relied upon by the
         Trustee. If no transactions involving any such securities have been
         recorded as of a particular Valuation Date, then such securities shall
         be valued as provided in paragraph (b) below.

                  (b) Where paragraph (a) hereof shall be inapplicable in the
         valuation of any properties, the Trustee shall obtain from at least two
         qualified persons an opinion as to the value of such properties as of
         the close of business on the particular Valuation Date. The average of
         such estimates shall be used.

         5.3 Allocation to Accounts:

                  (a) Pre-Tax Contributions, After-Tax Contributions, Employer
         Matching Contributions and Profit Sharing Contributions:

                           (i) Pre-Tax Contributions and After-Tax Contributions
                  received in the Trust Fund shall be allocated and credited as
                  soon as practicable after the close of each applicable payroll
                  period to the respective Pre-Tax Contribution Accounts and
                  After-Tax Contribution Accounts of the Participants, and shall
                  be invested in the Investment Funds in accordance with the
                  Participants' instructions pursuant to Section 8.1.

                           (ii) Employer Matching Contributions, other than
                  discretionary Employer Matching Contributions, pursuant to
                  Section 4.1 received in the Trust Fund shall be allocated and
                  credited as soon as practicable after the close of each
                  applicable payroll period to such Participants' Employer
                  Matching Accounts in accordance with Section 4.1 and shall be
                  invested in the Investment Funds in accordance with the
                  Participants' instructions pursuant to Section 8.1.

                                      -37-
<PAGE>

                           (iii) Discretionary Employer Matching Contributions
                  pursuant to Section 4.1 received in the Trust Fund shall be
                  allocated and credited as soon as practicable after the end of
                  the applicable Plan Year, but in no event later than the time
                  prescribed by law for the filing of the federal income tax
                  return for the Company for the applicable Plan Year, including
                  any extension which has been granted for the filing of such
                  tax return, to such Participants' Employer Matching Accounts
                  in accordance with Section 4.1 and shall be invested in the
                  Reliant Resources Common Stock Fund in accordance with Section
                  8.1.

                           (iv) Payroll Profit Sharing Contributions, if any,
                  under Section 4.1 received in the Trust Fund shall be
                  allocated and credited as soon as practicable after the close
                  of each applicable payroll period to the Profit Sharing
                  Accounts of the eligible Participants in an amount equal to
                  the percentage of each such Participant's eligible
                  Compensation for the applicable payroll period in accordance
                  with Section 4.1, and shall be invested in the Investment
                  Funds in accordance with the Participant's instructions
                  pursuant to Section 8.1.

                           (v) An Annual Profit Sharing Contribution, if any,
                  under Section 4.1 received in the Trust Fund for a Plan Year
                  shall be allocated and credited as soon as practicable after
                  the end of the applicable Plan Year, but in no event later
                  than the time prescribed by law for the filing of the federal
                  income tax return for the Company for the applicable Plan
                  Year, including any extension which has been granted for the
                  filing of such tax return, to the Profit Sharing Accounts of
                  the eligible Participants in an amount equal to the ratio that
                  the sum of each such eligible Participant's Compensation for
                  that applicable Plan Year bears to the total Compensation for
                  all such eligible Participants for such applicable Plan Year,
                  and shall be invested (1) if made in cash, in the Investment
                  Funds in accordance with the Participants' instructions
                  pursuant to Section 8.1, and (2) if made in Company Stock, in
                  the Reliant Resources Common Stock Fund.

                  (b) Adjustment Procedures: The Accounts of Participants,
         former Participants and Beneficiaries shall be adjusted in accordance
         with the following:

                           (i) Earnings of the Investment Funds: The earnings
                  (or loss) of each Investment Fund since the preceding
                  Valuation Date (including the appreciation or depreciation in
                  value of the assets of the Investment Fund) shall be allocated
                  to the Accounts of Participants (other than a terminated
                  Participant's Accounts which have become current obligations
                  of the Investment Fund) in proportion to the balances in such
                  Accounts invested in such Investment Fund on the preceding
                  Valuation Date, but

                                      -38-
<PAGE>
                  after first reducing each such Account balance by any
                  distribution from such Accounts since the preceding Valuation
                  Date.

                           (ii) Forfeitures: As of each Valuation Date, any
                  amounts in the Employer Matching Accounts and Profit Sharing
                  Accounts, if any, which have become forfeitures since the
                  preceding Valuation Date shall first be made available to
                  reinstate previously forfeited Account balances of former
                  Participants, if any, in accordance with Section 6.9 and
                  previous Participants who have unclaimed benefits, if any, in
                  accordance with Section 6.11 and/or to pay incident expenses
                  of the Plan. The remaining forfeitures from the Employer
                  Matching Accounts and Profit Sharing Accounts, if any, shall
                  be used to reduce Employer Matching Contributions and Profit
                  Sharing Contributions as specified under Section 4.1.

         5.4 Maximum Annual Additions: Notwithstanding anything contained herein
to the contrary, the total Annual Additions made to the Account of a Participant
for any Plan Year commencing on or after the Effective Date shall be subject to
the following limitations:

                  (a) Single Defined Contribution Plan

                  1. If an Employer does not maintain any other qualified plan,
         the amount of Annual Additions which may be allocated under this Plan
         on a Participant's behalf for a Limitation Year shall not exceed the
         lesser of the Maximum Permissible Amount or any other limitation
         contained in this Plan.

                  2. Prior to the determination of the Participant's actual
         Compensation for a Limitation Year, the Maximum Permissible Amount may
         be determined on the basis of the Participant's estimated annual
         Compensation for such Limitation Year. Such estimated annual
         Compensation shall be determined on a reasonable basis and shall be
         uniformly determined for all Participants similarly situated. Any
         Employer contributions (including allocation of forfeitures) based on
         estimated annual Compensation shall be reduced by any Excess Amounts
         carried over from prior years.

                  3. As soon as is administratively feasible after the end of
         the Limitation Year, the Maximum Permissible Amount for such Limitation
         Year shall be determined on the basis of the Participant's actual
         Compensation for such Limitation Year.

                  4. If there is an Excess Amount with respect to a Participant
         for the Limitation Year, such Excess Amount shall be disposed of as
         follows:

                           A. There shall first be returned to the Participant
                  his After-Tax Unmatched Contributions, as defined in Section
                  4.3, if any, attributable to that Limitation Year to the
                  extent such returned and reduced contributions

                                      -39-
<PAGE>
                  would reduce the Excess Amount. If any such Excess Amount
                  shall then remain, the Participant's Profit Sharing
                  Contributions, if any, attributable to that Limitation Year
                  shall be released and allocated to a suspense account in the
                  manner set forth in Paragraph B below to the extent such
                  returned and reduced contributions would reduce the Excess
                  Amount. If any such Excess Amount shall then remain, the
                  Participant's Pre-Tax Unmatched Contributions, as defined in
                  Section 4.2, if any, attributable to that Limitation Year
                  shall be returned to the Participant to the extent such
                  returned contributions would reduce the Excess Amount. If any
                  such Excess Amount shall then remain, the Participant's
                  After-Tax Matched Contributions, as defined in Section 4.3, if
                  any, attributable to that Limitation Year shall be returned to
                  the Participant, and the Employer Matching Contributions made
                  with respect to said After-Tax Matched Contributions shall be
                  reduced and allocated to a suspense account in the manner set
                  forth in Paragraph B below, both to the extent such returned
                  and reduced contributions would reduce the Excess Amount. If
                  any such Excess Amount shall then remain, the Participant's
                  Pre-Tax Matched Contributions, as defined in Section 4.2, if
                  any, attributable to that Limitation Year shall be returned to
                  the Participant, and the Employer Matching Contributions made
                  with respect to said Pre-Tax Matched Contributions shall be
                  reduced and allocated to a suspense account in the manner set
                  forth in Paragraph B below, both to the extent such returned
                  and reduced contributions would reduce the Excess Amount. All
                  such amounts shall be adjusted for any income or loss
                  allocated thereon.

                           B. The amount of the reduction of the Employer
                  Matching Contributions and/or Profit Sharing Contributions for
                  the Participant shall be reallocated out of the Employer
                  Matching Account or Profit Sharing Account, as applicable, of
                  such Participant and shall be held in a suspense account that
                  shall be applied as a part of (and to reduce to such extent
                  what would otherwise be) the Employer Matching Contributions
                  and/or Profit Sharing Contributions for all Participants
                  required to be made to the Plan during the next subsequent
                  calendar quarter or quarters. No portion of such Excess Amount
                  may be distributed to Participants or former Participants. If
                  a suspense account is in existence at any time during the
                  Limitation Year pursuant to this Paragraph B, such suspense
                  account shall not participate in the allocation of investment
                  gains or losses of the Trust Fund.

                                      -40-
<PAGE>

                  (b) Two or More Defined Contribution Plans

                  1. If, in addition to this Plan, the Employer maintains any
         other qualified defined contribution plan, the amount of Annual
         Additions which may be allocated under this Plan on a Participant's
         behalf for a Limitation Year, shall not exceed the lesser of:

                           A. the Maximum Permissible Amount, reduced by the sum
                  of any Annual Additions allocated to the Participant's
                  accounts for the same Limitation Year under such other defined
                  contribution plan or plans; or

                           B. any other limitation contained in this Plan.

                  2. Prior to the determination of the Participant's actual
         Compensation for the Limitation Year, the amount referred to in
         paragraph 1.A. above may be determined on the basis of the
         Participant's estimated annual Compensation for such Limitation Year.
         Such estimated annual Compensation shall be determined on a reasonable
         basis and shall be uniformly determined for all Participants similarly
         situated. Any Employer Contribution (including allocation of
         forfeitures) based on estimated annual Compensation shall be reduced by
         any Excess Amounts carried over from prior years.

                  3. As soon as is administratively feasible after the end of
         the Limitation Year, the amounts referred to in paragraph 1.A. above
         shall be determined on the basis of the Participant's actual
         Compensation for such Limitation Year.

                  4. If a Participant's Annual Additions under this Plan and all
         such other defined contribution plans result in an Excess Amount, such
         Excess Amount shall be deemed to consist of the amounts last allocated.

                  5. If an Excess Amount was allocated to a Participant on an
         allocation date of this Plan which coincides with an allocation date of
         another plan, the Excess Amount attributed to this Plan will be the
         product of:

                           A. the total Excess Amount allocated as of such date
                  (including any amount which would have been allocated but for
                  the limitations of Section 415 of the Code); times

                           B. the ratio of (i) the amount allocated to the
                  Participant as of such date under this Plan divided by (ii)
                  the total amount allocated as of such date under all qualified
                  defined contribution plans (determined without regard to the
                  limitations of Section 415 of the Code).

                  6. Any Excess Amounts attributed to this Plan shall be
         disposed of as provided in paragraph (a) above.

                                      -41-
<PAGE>

                  (c) Definitions

                  1. Employer: The Employer that adopts this Plan. In the case
         of a group of employers which constitutes a controlled group of
         corporations (as defined in Section 414(b) of the Code as modified by
         Section 415(h)) or which constitutes trades and businesses (whether or
         not incorporated) which are under common control (as defined in Section
         414(c) as modified by Section 415(h)) or an affiliated service group
         (as defined in Section 414(m)), all such employers shall be considered
         a single Employer for purposes of applying the limitations of this
         Section.

                  2. Annual Additions: With respect to each Plan Year
         (Limitation Year), the total of the Employer Matching Contributions,
         Pre-Tax Contributions, After-Tax Contributions, Profit Sharing
         Contributions, forfeitures and amounts described in Sections 415(e)(1)
         and 419(d)(2) of the Code, which are allocated to the Participant's
         Account; excluding, however, any amounts contributed to reinstate an
         amount forfeited or an unclaimed benefit.

                  3. Excess Amount: The excess of the Participant's Annual
         Additions for the Limitation Year over the Maximum Permissible Amount.

                  4. Limitation Year: A 12 consecutive month period ending on
         December 31.

                  5. Maximum Permissible Amount: For a Limitation Year, the
         Maximum Permissible Amount with respect to any Participant shall be the
         lesser of:

                           A. $40,000, as adjusted by the Secretary of the
                  Treasury or his delegate pursuant to Code Section 415(d); or

                           B. 100% of the Participant's Compensation for the
                  Limitation Year.

                  6. Compensation: For purposes of applying the limitations of
         Code Section 415, Compensation shall include the Participant's wages,
         salaries, fees for professional service and other amounts received
         (without regard to whether or not an amount is paid in cash) for
         personal services actually rendered in the course of employment with an
         Employer maintaining the Plan to the extent that the amounts are
         includable in gross income (including, but not limited to, commissions
         paid to salesmen, compensation for services on the basis of a
         percentage of profits, commissions on insurance premiums, tips,
         bonuses, fringe benefits, reimbursements and expense allowances) and
         shall exclude the following:

                           A. (i) Contributions made by the Employer to a plan
                  of deferred compensation to the extent that, before the
                  application of the

                                      -42-
<PAGE>
                  Code Section 415 limitations to the Plan, the contributions
                  are not includable in the gross income of the Employee for the
                  taxable year in which contributed, (ii) Employer contributions
                  made on behalf of an Employee to a simplified employee pension
                  plan described in Code Section 408(k) to the extent such
                  contributions are excludable from the Employee's gross income
                  and (iii) any distributions from a plan of deferred
                  compensation regardless of whether such amounts are includable
                  in the gross income of the Employee when distributed, except
                  any amounts received by an Employee pursuant to an unfunded
                  non-qualified plan to the extent such amounts are includable
                  in the gross income of the Employee;

                           B. Amounts realized from the exercise of a
                  non-qualified stock option or when restricted stock (or
                  property) held by an Employee either becomes freely
                  transferable or is no longer subject to a substantial risk of
                  forfeiture;

                           C. Amounts realized from the sale, exchange or other
                  disposition of stock acquired under a qualified stock option;
                  and

                           D. Other amounts which receive special tax benefits,
                  such as premiums for group life insurance (but only to the
                  extent that the premiums are not includable in the gross
                  income of the Employee), or contributions made by the Employer
                  (whether or not under a salary reduction agreement) towards
                  the purchase of any annuity contract described in Code Section
                  403(b) (whether or not the contributions are excludable from
                  the gross income of the Employee).

                  For the purposes of this Section, Compensation shall include
         any and all items which may be included in Compensation under Code
         Section 415(c)(3), including (i) any elective deferral (as defined in
         Code Section 402(g)(3)) and (ii) any amount which is contributed or
         deferred by the Employer at the election of the Employee and which is
         not includable in the gross income of the Employee by reason of Code
         Section 125, 132(f)(4) or 457, but shall exclude amounts that would
         otherwise be excluded from an Employee's gross income by reason of the
         application of Code Section 402(h)(1)(B) and, in the case of Employer
         contributions made pursuant to a salary reduction agreement, Code
         Section 403(b). The foregoing notwithstanding, Compensation shall be
         limited to $200,000 (or such other amount provided under Code Section
         401(a)(17)), as adjusted for cost-of-living increases in accordance
         with Code Section 401(a)(17)(B).

                                      -43-
<PAGE>

                  7. Average Compensation: The average compensation during a
         Participant's high three years of Service, which period is the three
         consecutive calendar years (or the actual number of consecutive years
         of employment for those Employees who are employed for less than three
         consecutive years with the Employer) during which the Participant had
         the greatest aggregate compensation from the Employer.

                  8. Annual Benefit: A benefit payable annually in the form of a
         straight life annuity (with no ancillary benefits) under a plan to
         which Employees do not contribute and under which no rollover
         contributions are made.

                                      -44-
<PAGE>
                                   ARTICLE VI

                             PARTICIPANTS' BENEFITS

         6.1 Termination of Service: In the event of termination of Service of a
Participant who is a Local 47 Employee, Local 327 Employee, Local 459 Employee
or Local 777 Employee for any reason, such Participant shall, subject to the
further provisions of the Plan, be entitled to receive 100% of the values in his
Pre-Tax Contribution Account, After-Tax Contribution Account, Employer Matching
Account, Profit Sharing Account and Rollover Account, as applicable.

                  In the event of termination of Service of a Participant who is
a Local 66 Employee, for any reason other than Disability, Retirement or death,
such Participant shall, subject to the further provisions of the Plan, be
entitled to receive (a) 100% of the values in his Pre-Tax Contribution Account,
After-Tax Contribution Account, and Rollover Account, as applicable, plus (b) a
portion of his Employer Matching Account, determined by reference to his number
of years of Vesting Service and the following schedule:

<Table>
<Caption>
                                                                           Vesting
                    Years of Vesting Service                              Percentage
                    ------------------------                              ----------
<S>                                                                       <C>
                    Less than 2                                                0%
                    2 but less than 3                                         25%
                    3 but less than 4                                         50%
                    4 but less than 5                                         75%
                    5 and more                                               100%
</Table>

                  If such Participant terminates Service and, at the time of
termination, the present value of the Participant's vested benefit is zero, the
Participant will be deemed to have then received a distribution of such vested
benefit. Any portion of the Employer Matching Account of a terminated
Participant in excess of the vested portion specified herein shall be forfeited
to the extent provided in Section 6.9. Payment of benefits due under this
Section shall be made in accordance with Section 6.6.

         6.2 Disability of Participants: If a Participant satisfies the
definition of "Disability" under the Company's Long-Term Disability Plan and
commences to receive disability benefits thereunder, such Participant (a) to the
extent not vested, shall be fully vested in the entire amount of his Account as
of the date of the Disability and (b) shall be entitled to receive such amount
in accordance with Section 6.6. The determination of whether a Participant has
become "Disabled" under the Company's Long-Term Disability Plan by such
disability plan's administrator shall be final and binding on all parties
concerned.

         6.3 Death of Participants: In the event of termination of a
Participant's Service due to his death, to the extent not vested, the entire
amount of such Participant's Account shall be fully

                                      -45-
<PAGE>
vested as of his date of death and such Account balance shall be distributable
in accordance with Section 6.6. If a Participant's death occurs prior to filing
his written election to commence the payment of his benefit under the Plan,
after receipt by the Committee of acceptable proof of death, the entire vested
amount in the Account of such Participant shall be payable as follows:

                  (a) The Participant's Account shall be distributed to the
         Participant's surviving spouse, but if there is no surviving spouse, or
         if the surviving spouse has previously consented by a qualified
         election pursuant to Section 6.3(b), to the Beneficiary or
         Beneficiaries designated by the Participant in a written designation
         filed with his Employer. If no such designation shall have been so
         filed, or if no designated Beneficiary survives the Participant or can
         be located by the Committee, using reasonable diligence, within six
         months of the Participant's death, then such Participant's Account
         shall be distributed to the duly appointed and serving personal
         representative of the Participant's estate, but only if that personal
         representative can provide the Committee with what the Committee
         reasonably determines is satisfactory documentary proof of that
         appointment and of the personal representative's identity
         (collectively, "Documentary Proof"); if, within six months of the
         Participant's death, there is no duly appointed and serving personal
         representative of the Participant's estate who has provided the
         Committee with Documentary Proof, or if such decedent left no will,
         then such Participant's Account shall be distributed to the
         Participant's heirs at law, determined in accordance with the laws of
         intestate succession of the state in which the Participant was
         domiciled at the time of the Participant's death, provided that such
         heirs provide the Committee with what the Committee reasonably
         determines is satisfactory Documentary Proof of information the
         Committee believes it needs to make the distribution to such heirs. No
         designation of any Beneficiary other than the Participant's surviving
         spouse shall be effective unless in writing and received by the
         Participant's Employer and in no event shall it be effective as of the
         date prior to such receipt. The former spouse of a Participant shall be
         treated as a surviving spouse to the extent provided under a qualified
         domestic relations order as described in Section 414(p) of the Code.

                  (b) The Participant's spouse may waive the right to be the
         Participant's sole Beneficiary and consent to the Beneficiary
         designation made by the Participant. The waiver must be in writing and
         the spouse must acknowledge the effect of the waiver. The spouse's
         waiver must be witnessed by a Plan representative or a notary public.
         The Beneficiary designated by the Participant may not be changed
         without the spouse's consent, unless the consent of the spouse permits
         designation of Beneficiaries by the Participant without any requirement
         of further consent by the spouse. The Participant may file a waiver
         without the spouse's consent if it is established to the satisfaction
         of the Committee that such written consent may not be obtained because
         there is no spouse or the spouse may not be located. Any consent under
         this Section 6.3(b) will be valid only with respect to the spouse who
         signs the consent. Additionally, a revocation of a prior spousal waiver
         may be made by a Participant without the consent of the spouse at

                                      -46-
<PAGE>
         any time before the distribution of the Account. The number of
         revocations shall not be limited.

         6.4 Retirement of Participants on or After Retirement Date: A
Participant's interest in the full balance of his Account shall be fully vested
and non-forfeitable upon reaching his Retirement Date. Any Participant who
terminates his Service on or after his Retirement Date shall attain a fully
vested non-forfeitable interest in the entire amount of his Account and shall be
entitled to receive the entire amount of his Account upon the termination of his
Service.

         6.5 In-Service Distributions: Except to the extent that distribution of
a Participant's Account is required prior to termination of his employment under
Section 6.10 hereof (in the case of a Participant whose required beginning date
occurs prior to his termination of employment), under Section 10.5 hereof
relating to termination of the Plan, or at the election of the Participant under
Article VII relating to certain withdrawals and loans, no distribution or
withdrawal of any benefits under the Plan shall be permitted prior to the
Participant's "severance from employment, death or disability" within the
meaning of Code Section 401(k) and the regulations thereunder other than a
distribution authorized under the Plan upon the occurrence of an event described
in, and made in accordance with, Code Section 401(k)(10) or any successor
provision of the Code.

         6.6 Payments of Benefits: Upon a Participant's entitlement to payment
of benefits under either Section 6.1, 6.2 or 6.4, he shall file his written
election on such form or forms, and subject to such conditions, as the Committee
shall prescribe. His election shall specify whether he wishes payment of his
benefits to be made or commence as of such entitlement or to be deferred to the
extent provided below and subject to Section 6.10. If a payment becomes due for
any reason other than death and if the amounts due from the Participant's
Accounts are in excess of $5,000, payment of such amounts shall be deferred to
the extent provided below unless the Participant consents to earlier payment.
Unless a Participant elects otherwise, payment of his benefits under this Plan
shall be made or commence no later than the 60th day after the latest of the end
of the Plan Year in which (a) the Participant attains age 65, (b) occurs the
tenth anniversary of the year in which the Participant commenced participation
in the Plan or (c) the Participant's Service terminates. If the Participant so
consents to an earlier payment, such payment shall be made as soon as
practicable. Notwithstanding any other provision of this Section 6.6 or the Plan
to the contrary, if the amounts due from the Participant's Accounts do not
exceed $5,000, payment of such amounts shall automatically be made in a lump-sum
payment as soon as administratively practicable following termination of Service
for any reason.

                  In the case of a distribution under Section 6.3 on account of
the Participant's death, subject to subsection (b)(i) below, the Committee shall
pay the entire amount in the Participant's Accounts to the party or parties
entitled thereto under Section 6.3 in a lump-sum distribution in cash or, if
timely elected by such party or parties, all or a portion in kind in the shares
of Company Stock held in an Account invested in the Reliant Resources Common
Stock Fund, and, if applicable, CenterPoint Common Stock held in an Account
invested in the CenterPoint Common Stock Fund, within five years after the death
of such Participant.

                                      -47-
<PAGE>

                  Subject to the requirements of Section 6.10 and except as
otherwise provided in this Section 6.6, any distribution to be made to a
Participant under the provisions of this Article VI following his termination of
employment shall be made or commence as soon as administratively practicable
after the Participant files his written election, in the form and manner
prescribed by the Committee, to receive the amounts in his Accounts, with such
amounts to be paid in one of the following methods:

                  (a) Except as provided in subsection (b) below, as elected by
         such Participant:

                           (i) Lump-Sum Distributions: As a lump-sum
                  distribution in cash, provided that no lump-sum distribution
                  may be paid to the Participant unless he has elected such
                  distribution on an election form prescribed by the Committee.

                           (ii) Installment Payments: As monthly, quarterly,
                  semi-annual or annual installment payments over a specified
                  term of 10 years or less, as elected by the Participant, in
                  cash ("Installment Payments"), provided that no Installment
                  Payments may be paid to the Participant unless he has elected
                  such payments on an election form prescribed by the Committee,
                  with such Installment Payments continuing to the Participant's
                  Beneficiary designated on such election form (or his
                  Beneficiary under the Plan in lieu of a valid election form
                  designation) if the Participant's death occurs during the term
                  of the Installment Payments. After Installment Payments
                  commence, the Participant (or his Beneficiary, as provided
                  above in the event of the Participant's death) shall have the
                  right at any time to convert the remaining balance of his
                  Account to a lump-sum distribution.

                           (iii) In-Kind Distributions: As a distribution in
                  kind of the shares held for his Account in the Reliant
                  Resources Common Stock Fund and/or CenterPoint Common Stock
                  Fund (collectively, "Common Stock Funds"), as described below.
                  A Participant may elect to receive any percentage, up to 100%,
                  of the vested portion of his Accounts in the Common Stock
                  Funds in whole shares of Company Stock as a lump-sum
                  distribution in whole shares, with any remaining Common Stock
                  Fund balances and any other Investment Fund balances
                  distributed in cash as a lump-sum distribution or as
                  Installment Payments, as elected by the Participant. If a
                  Participant elects to receive the entire vested portion of his
                  Accounts in the Common Stock Funds in whole shares of Company
                  Stock and/or CenterPoint Common Stock, such Participant shall
                  be entitled to receive a number of whole shares of Company
                  Stock and/or CenterPoint Common Stock, plus the cash value of
                  any partial shares of Company Stock and/or CenterPoint Common
                  Stock, necessary to equal the sum of (A) the value in the
                  Common Stock Funds held in his Pre-Tax Contribution Account,
                  and/or his After-Tax Contribution Account and/or

                                      -48-
<PAGE>
                  his Profit Sharing Account as of the Valuation Date specified
                  in Section 6.8, and (B) the vested portion of the value in the
                  Common Stock Funds held in his Employer Matching Account as of
                  such Valuation Date. If a Participant elects to receive a
                  percentage which is less than 100% of the vested portion of
                  his Accounts in the Common Stock Fund, in whole shares of
                  Company Stock and/or CenterPoint Common Stock, then the result
                  obtained from the preceding formula shall be multiplied by
                  such percentage to obtain the number of whole shares of
                  Company Stock and/or CenterPoint Common Stock and cash for
                  partial shares of Company Stock and/or CenterPoint Common
                  Stock to be distributed to such Participant. The foregoing not
                  withstanding, an in-kind distribution may not be paid to the
                  Participant unless he has elected such distribution on an
                  election form prescribed by the Committee.

                  All amounts attributable to (i) any excess of the values
         attributable to the interest in his Pre-Tax Contribution Account and/or
         his After-Tax Contribution Account and Profit Sharing Account, and the
         vested portion of his interest in his Employer Matching Account that
         are invested in the Common Stock Funds, over the interest therein
         provided to be distributed to him in kind, plus (ii) any interest of
         such Participant in his Pre-Tax Contribution Account and/or his
         After-Tax Contribution Account in any other Investment Fund, with the
         exception of the Common Stock Funds, shall be distributed in cash.

                  (b) If the Participant is a Local 777 Employee or, prior to
         February 18, 2002, a Local 327 Employee:

                           (i) Normal Form of Payment. Unless an optional form
                  of payment under clause (ii) below is selected pursuant to a
                  Qualified Election, as defined in this clause (i) below,
                  within the 90-day period ending on a Participant's Annuity
                  Starting Date, a Participant's Account will be distributable
                  following his termination of employment in the form of a
                  Qualified Joint and Survivor Annuity.

                           If a married Participant dies before his Annuity
                  Starting Date, then the Participant's Accounts will be paid in
                  the form of a Qualified Pre-Retirement Survivor Annuity unless
                  such form of payment has been waived within the "Election
                  Period" pursuant to a "Qualified Election" (as each is defined
                  below). If a married Participant who validly waives the
                  Qualified Pre-Retirement Survivor Annuity dies prior to his
                  Annuity Starting Date, his Plan Accounts will be paid to his
                  Beneficiary in accordance with Section 6.3. Additionally, if a
                  married Participant dies before his Annuity Starting Date
                  without validly waiving the Qualified Pre-Retirement Survivor
                  Annuity, the spouse of such Participant may waive the
                  Qualified Pre-Retirement Survivor Annuity. Within a

                                      -49-
<PAGE>
                  reasonable time after the death of a Participant, the
                  Participant's spouse may elect to have benefits commence
                  subsequent to such election.

                           For purposes of this clause (i):

                           The "Election Period" is the period which begins on
                  the first day of the Plan Year in which the Participant
                  attains the age of 35 and ends on the date of the
                  Participant's death. If a Participant separates from service
                  prior to the first day of the Plan Year in which he attains
                  age 35, with respect to the Plan Accounts as of the date of
                  separation, the Election Period shall begin on the date of
                  separation. A valid election may be made prior to the first
                  day of the Plan Year in which he attains age 35; however, such
                  election shall be ineffective as of such first day. A new
                  election must be filed on or after such first day to validly
                  waive the Qualified Pre-Retirement Survivor Annuity.

                           A "Qualified Election" is a waiver of a Qualified
                  Joint and Survivor Annuity or a Qualified Pre-Retirement
                  Survivor Annuity. The waiver must be in writing and must be
                  consented to by the Participant's spouse. The spouse's consent
                  to a waiver must be notarized or witnessed by a Plan
                  representative, as provided in Section 6.3. Notwithstanding
                  this consent requirement, if the Participant states on the
                  applicable form provided for that purpose by the Committee and
                  notarized or witnessed by a Plan representative that (A)
                  Participant is able to establish to the satisfaction of the
                  Committee that he has no spouse; (B) the Participant's spouse
                  cannot be located; or (C) there are other circumstances under
                  which consent of the spouse is not required in accordance with
                  applicable U.S. Treasury or Department of Labor regulations, a
                  waiver by the Participant's spouse will not be required. Any
                  consent necessary under this provision will be valid only with
                  respect to the spouse who signs the consent, or in the event
                  of a deemed qualified election, the designated spouse.
                  Additionally, a revocation of a prior waiver may be made by a
                  Participant without the consent of the spouse at any time
                  before the commencement of benefits. A new waiver can be made
                  thereafter, but a new consent of the spouse will be required.
                  The number of revocations and waivers shall not be limited.

                           (ii)     Notice Requirement.

                                    (A) Notice of Qualified Joint and Survivor
                           Annuity. In the case of a Qualified Joint and
                           Survivor Annuity, the Committee shall provide each
                           Participant with a written explanation of:

                                             (1) the terms and conditions of a
                                    Qualified Joint and Survivor Annuity;

                                      -50-
<PAGE>

                                             (2) the Participant's rights to
                                    make, and the effect of, an election to
                                    waive the Qualified Joint and Survivor
                                    Annuity form of benefit;

                                             (3) the rights of a Participant's
                                    spouse; and

                                             (4) the right to make, and the
                                    effect of, a revocation of a previous
                                    election to waive the Qualified Joint and
                                    Survivor Annuity.

                           The notice shall be provided no earlier than 90 days
                           before the Annuity Starting Date. The Participant
                           shall have 30 days from the date such notice is
                           provided to make his election. A Participant may,
                           with Spousal Consent, waive this 30-day election
                           period if the distribution commences more than seven
                           days after such notice is provided.

                           (B) Notice of Qualified Pre-Retirement Survivor
                  Annuity. In the case of a Qualified Pre-Retirement Survivor
                  Annuity, the Committee shall provide each Participant within
                  the period beginning on the first day of the Plan Year in
                  which the Participant attains age 32 and ending with the close
                  of the Plan Year preceding the Plan Year in which the
                  Participant attains age 35, or, if later, within a reasonable
                  period after the Participant is hired, a written explanation
                  of the Qualified Pre-Retirement Survivor Annuity in such terms
                  and in such manner as would be comparable to the explanation
                  provided for meeting the requirements of Paragraph (A) above
                  applicable to a Qualified Joint and Survivor Annuity.

                           (iii) Optional Form of Payment. The optional forms of
                  payment among which the Participant may elect in lieu of the
                  normal form of payment described under clause (i) above, are
                  the forms of payment provided above in subsection (a) of this
                  Section 6.6.

         6.7 Payment of Distribution Directly to Eligible Retirement Plan:

                  (a) Notwithstanding any provision of the Plan to the contrary
         that would otherwise limit a Distributee's election under this Section
         6.7, a Distributee may elect, at the time and in the manner prescribed
         by the Committee, to have any portion of an Eligible Rollover
         Distribution paid directly to an Eligible Retirement Plan specified by
         the Distributee in a Direct Rollover.

                  (b) The terms used in Section 6.7(a) above shall have the
         following meanings:

                           (i) Eligible Rollover Distribution: An Eligible
                  Rollover Distribution is any distribution of all or any
                  portion of the balance to the

                                      -51-
<PAGE>
                  credit of the Distributee, except that an Eligible Rollover
                  Distribution does not include: any distribution that is one of
                  a series of substantially equal periodic payments (not less
                  frequently than annually) made for the life (or life
                  expectancy) of the Distributee or the joint lives (or joint
                  life expectancies) of the Distributee and the Distributee's
                  designated Beneficiary, or for a specified period of 10 years
                  or more; any distribution to the extent that such distribution
                  is required under Section 401(a)(9) of the Code; any hardship
                  distribution made under Section 401(k)(2)(B)(i)(IV) of the
                  Code; and the portion of any distribution that is not
                  includable in gross income (determined without regard to the
                  exclusion for net unrealized appreciation with respect to
                  employer securities).

                           (ii) Eligible Retirement Plan: An Eligible Retirement
                  Plan is an individual retirement account described in Section
                  408(a) of the Code, an individual retirement annuity described
                  in Section 408(b) of the Code (other than an endowment
                  contract), an annuity plan described in Section 403(a) of the
                  Code, an eligible deferred compensation plan described in
                  Section 457(b) of the Code, which is maintained by an eligible
                  employer described in Code Section 457(e)(1)(A), an annuity
                  contract described in Section 403(b) of the Code, or a
                  qualified trust described in Section 401(a) of the Code that
                  accepts the Distributee's Eligible Rollover Distribution.
                  However, in the case of an Eligible Rollover Distribution to
                  the surviving spouse, an Eligible Retirement Plan is an
                  individual retirement account or individual retirement
                  annuity.

                           (iii) Distributee: A Distributee includes an Employee
                  or former Employee. In addition, the Employee's or former
                  Employee's surviving spouse and the Employee's or former
                  Employee's spouse or former spouse who is the alternate payee
                  under a qualified domestic relations order, as defined in
                  Section 414(p) of the Code, are Distributees with regard to
                  the interest of the spouse or former spouse.

                           (iv) Direct Rollover: A Direct Rollover is a payment
                  by the Plan to an Eligible Retirement Plan specified by the
                  Distributee.

                                      -52-
<PAGE>

                  (c) In the event that a Distributee, after receiving the
         explanation required by Section 402(f) of the Code, does not
         affirmatively elect a Direct Rollover under Section 6.7(a) above, the
         Distributee shall be deemed to have elected not to have any portion of
         the Eligible Rollover Distribution paid directly to an Eligible
         Retirement Plan.

                  (d) Notwithstanding any provisions of this Section to the
         contrary, a Distributee may not elect a Direct Rollover with respect to
         Eligible Rollover Distributions under this Plan which are reasonably
         expected to total less than $200 during any calendar year.

         6.8 Participation Rights Determined as of Valuation Date Coinciding
With or Preceding Termination of Employment: In the case of any Participant
whose employment shall be terminated for any reason, no further credits or
charges arising from any source shall be made to the Accounts of any such
terminating Participant after the credits or charges made as of the Valuation
Date coinciding with or immediately preceding his termination of employment,
except for:

                  (a) Pre-Tax Contributions, After-Tax Contributions, Profit
         Sharing Contributions, and Employer Matching Contributions made
         subsequent to such Valuation Date;

                  (b) Withdrawals or distributions made subsequent to such
         Valuation Date; or

                  (c) In the case of a delayed distribution pursuant to a
         Participant's election as provided in Section 6.6, such subsequent
         adjustments to the values in the Accounts of such Participant up to the
         Valuation Date coinciding with or preceding the receipt of the
         Participant's election for distribution.

         6.9 Treatment of Non-Vested Account Balances upon Termination of
Service: This Section 6.9 does not apply to Participants who are fully vested at
the time of termination of Service.

                  If a Participant receives an actual or deemed distribution
pursuant to Section 6.1 prior to the close of the second Plan Year following the
Plan Year in which the Participant's Service terminates, the non-vested portion
of his Employer Matching Account and/or Profit Sharing Account shall be
forfeited and shall become available for allocation as provided in Section 5.3.
If a Participant who has received an actual distribution as described in this
paragraph thereafter resumes Service under the Plan at any time, he shall be
entitled to have the forfeited amounts reinstated to such Accounts upon his
recommencement of participation in the Plan. If a Participant who has received a
deemed distribution as described in this paragraph thereafter resumes Service
under the Plan before incurring five consecutive one-year Breaks in Service, he
shall be entitled to have the forfeited amounts reinstated to such Accounts upon
his recommencement of participation in the Plan.

                                      -53-
<PAGE>

                  If a Participant does not receive a distribution of his vested
benefit by the close of the second Plan Year following the Plan Year in which
his Service terminates, but receives such a distribution before incurring five
consecutive one-year Breaks in Service, the non-vested balance in the
Participant's Employer Matching Account and/or Profit Sharing Account shall be
credited to a separate account at the time of distribution of the vested
benefit. If such a Participant is thereafter reemployed prior to incurring five
consecutive one-year Breaks in Service, the Participant's vested interest in the
separate account, including any gains or losses thereon, at any subsequent
relevant time shall be an amount "X" determined by the following formula: X = P
(AB + D) - D. For purposes of applying this formula: P is the vested percentage
at such relevant time; AB is the account balance at the relevant time; D is the
amount of the prior distribution to the Participant. If the Participant is not
reemployed before he has incurred five consecutive one-year Breaks in Service,
his separate account shall then be forfeited and shall become available for
allocation as described in Section 5.3.

                  If a Participant does not receive a distribution of his vested
benefit before incurring five consecutive one-year Breaks in Service, the
non-vested balance in the Participant's Employer Matching Account and/or Profit
Sharing Account shall then be forfeited and shall become available for
allocation as described in Section 5.3.

         6.10 Required Minimum Distributions: Notwithstanding any provision of
this Plan to the contrary, for a Participant attaining age 70 1/2, any benefits
to which a Participant is entitled shall commence not later than the April 1
following the later of (a) the calendar year in which the Participant attains
age 70 1/2 or (b) the calendar year in which the Participant's employment
terminates (provided, however, that clause (c) of this sentence shall not apply
in the case of a Participant who is a "5% owner" (as defined in Section 416 of
the Code) with respect to the Plan Year ending in the calendar year in which
such Participant attains age 70 1/2). Distributions under this Section 6.10
shall be at least equal to the required minimum distributions under Section
401(a)(9) of the Code; provided, however, that any installment distributions
pursuant to this Section 6.10 for Participants who have not terminated
employment shall be made over a period not to exceed 10 years.

                  The Plan will apply the minimum distribution requirements of
Section 401(a)(9) of the Code, in accordance with the regulations under Section
401(a)(9), that were proposed on January 17, 2001 until the end of the last
calendar year beginning before the effective date of final regulations under
Code Section 401(a)(9) or such other date as may be specified in guidance
published by the Internal Revenue Service.

         6.11 Unclaimed Benefits: If at, after or during the time when a benefit
hereunder is payable to any Participant, Beneficiary or other distributee, the
Committee, upon request of the Trustee, or at its own instance, shall mail by
registered or certified mail to such distributee, at his last known address, a
written demand for his present address or for satisfactory evidence of his
continued life, or both, and if such distributee shall fail to furnish the same
to the Committee within two years from mailing of such demand, then the
Committee may, in its sole discretion, determine that such Participant,
Beneficiary or other distributee has forfeited his right to such benefit and may
declare such benefit, or any unpaid portion thereof, terminated, as if the death
of

                                      -54-
<PAGE>
the distributee (with no surviving Beneficiary) had occurred on the later of the
date of the last payment made thereon, or the date such Participant, Beneficiary
or other distributee first became entitled to receive benefit payments. Any such
forfeited benefit shall be applied as a part of (and to reduce to such extent)
the Employer Contributions required to be made next following the date such
forfeiture is declared to be forfeited by the Committee. Notwithstanding the
provisions of this Section 6.11, any such forfeited benefit shall be reinstated
if a claim for the same is made by the Participant, Beneficiary or other
distributee at any time thereafter. The reinstatement shall be made by a
mandatory contribution by the Company, allocated solely to such reinstatement.

         6.12 Optional Forms of Benefits: Notwithstanding anything in the Plan
to the contrary, all optional forms of benefits which are "Section 411(d)(6)
protected benefits," as described in Treasury Regulations Section 1.411(d)-4,
shall continue to be optional forms of benefits for Participants to whom the
optional forms apply, notwithstanding any subsequent amendment of the Plan
purporting to revise or delete any such optional form of benefit and
notwithstanding any contrary provision of this Article VI or Article VII, unless
otherwise permitted by applicable law.

                                      -55-
<PAGE>
                                  ARTICLE VII

                              WITHDRAWALS AND LOANS

         7.1 Hardship Withdrawals: A Participant who is a Local 459 Employee or
Local 777 Employee and who, if applicable, obtains Spousal Consent, may make a
withdrawal from his Pre-Tax Contribution Account (excluding credited investment
earnings) on account of Hardship (as defined herein), subject to the following
requirements:

                  (a) "Hardship" of a Participant as determined by the
         Committee, in its discretion, on the basis of all relevant facts and
         circumstances and in accordance with the following nondiscriminatory
         and objective standards, uniformly interpreted and consistently
         applied, and without regard to the existence of other resources which
         are reasonably available to the Participant in question, shall mean any
         one or more of the following:

                           (i) Unreimbursed expenses for medical care described
                  in Code Section 213(d) previously incurred by the Participant,
                  his spouse or his dependent, as described in Code Section 152
                  ("Dependent"), or necessary for him, his spouse or his
                  Dependent to obtain medical care;

                           (ii) Costs directly related to the purchase
                  (excluding mortgage payments) of a principal residence for the
                  Participant;

                           (iii) Payment of tuition and related educational fees
                  for the next 12 months of post-secondary education for the
                  Participant, his spouse, children or his Dependents;

                           (iv) Payments necessary to prevent his eviction from
                  the Participant's principal residence, or foreclosure on the
                  mortgage of his principal residence;

                           (v) Costs and expenses of funeral and/or burial of
                  the Participant's spouse, parent, brother, sister, child,
                  Dependent or member of his immediate household; or

                           (vi) Any other event identified by the Commissioner
                  of Internal Revenue in revenue rulings, notices and/or other
                  documents of general applicability for inclusion in the
                  foregoing list.

                  (b) A financial need shall not fail to qualify as immediate
         and heavy merely because such need was reasonably foreseeable by the
         Participant or voluntarily incurred by him.

                  (c) The minimum Hardship withdrawal is the lesser of $500 or
         the maximum amount available for withdrawal.

                                      -56-
<PAGE>
                  (d) Unless the Participant elects that the conditions of
         subsections (e) and (g) shall apply, the requirements of subsection (f)
         must be satisfied.

                  (e) The conditions of this subsection are:

                           (i) the Participant shall obtain all distributions
                  (other than Hardship distributions), and all nontaxable loans
                  currently available under all plans maintained by the Employer
                  or any Affiliate;

                           (ii) the Participant shall not be permitted to make
                  further Pre-Tax Contributions or After-Tax Contributions under
                  the Plan (or other plan (whether or not qualified) or a stock
                  option, stock purchase or similar plan maintained by the
                  Employer or any Affiliate) for 6 months thereafter; and

                           (iii) the sum of the Participant's deferrals of
                  Compensation under this Plan (and other plans maintained by
                  the Employer or any Affiliate) for the next taxable year shall
                  not exceed the annual limit under Code Section 402(g), as
                  adjusted, for that taxable year, minus the sum of such
                  deferrals of Compensation by the Participant for the taxable
                  year in which the Hardship distribution is received.

                  (f) To meet the requirements of this subsection, the
         Participant must certify to the Committee in writing that the financial
         need in question cannot be satisfied

                           (i) through reimbursement or compensation by
                  insurance or otherwise,

                           (ii) by reasonable liquidation of the assets of
                  himself or of those assets which he owns jointly or in common
                  with his spouse, a child or any other person (but not of
                  property held for his spouse or child under an irrevocable
                  trust or the Uniform Gifts to Minors Act),

                           (iii) by cessation of Pre-Tax Contributions under
                  Section 4.2 and After-Tax Contributions under Section 4.3,

                           (iv) by other distributions or nontaxable (at the
                  time of the loan) loans from plans maintained by the Employer
                  or by any other employer, or

                           (v) by borrowing from commercial sources on
                  reasonable commercial terms,

         and the Committee reasonably relies on such certification and has no
         actual knowledge and to the contrary.

                                      -57-
<PAGE>

                  (g) The conditions of this subsection, if any, shall be those
         prescribed by the Commissioner of Internal Revenue through the
         publication of revenue rulings, notices and/or other documents of
         general applicability, as an alternate method under which a Hardship
         distribution will be deemed to be necessary to satisfy an immediate and
         heavy financial need.

                  (h) A Participant whose Pre-Tax Contributions and After-Tax
         Contributions have been suspended under subsection (e) nevertheless
         shall be included in determinations under Sections 4.4 through 4.12 if
         he would otherwise be so included.

                  (i) No more than one Hardship withdrawal may be made to a
         Participant in any consecutive 12-month period.

         7.2 Account Withdrawals: Participants may request the following
in-service withdrawals, subject to the requirements set forth herein:

                  (a) Age 59 1/2 Withdrawals. Subject to subsection (d) below, a
         Participant who has attained age 59 1/2 or older may withdraw all or
         any portion of his Pre-Tax Contribution Account, After-Tax Contribution
         Account, Employee Matching Account and Rollover Account, provided that
         the minimum withdrawal amount shall be the lesser of $500 or the total
         of the Account balances available for withdrawal, with such balances
         determined as of the Valuation Date immediately preceding the
         withdrawal distribution date. To obtain an age 59 1/2 withdrawal under
         this subsection (a), the Participant must submit a request to the
         Committee or its designee in the manner and form approved by the
         Committee. Amounts withdrawn under this subsection (a) shall be charged
         to, and withdrawn from, a Participant's Accounts, to the extent
         applicable, in the following order: (i) Pre-Tax Unmatched Contributions
         (including earnings thereon) and then Pre-Tax Matched Contributions
         (including earnings thereon) in the Pre-Tax Contribution Account; (ii)
         the Rollover Account; (iii) After-Tax Unmatched Contributions
         (including earnings thereon) and then After-Tax Matched Contributions
         (including earnings therein) in the After-Tax Contribution Account; and
         (iv) the Employer Matching Account.

                  (b) After-Tax Contribution Account. Subject to subsection (d)
         below, a Participant who has made After-Tax Contributions to the Plan
         may withdraw all or any portion of the balance of his After-Tax
         Contribution Account, provided that the minimum withdrawal amount shall
         be the lesser of $500 or the entire balance of such Account available
         for withdrawal, with such balance determined as of the Valuation Date
         immediately preceding the withdrawal distribution date. To obtain a
         withdrawal under this subsection (b), a Participant must submit a
         request to the Committee or its designee in the manner and form
         approved by the Committee. After-Tax Contributions withdrawn under this
         subsection (b) shall be charged to, and withdrawn from, to the extent
         applicable, first, After-Tax

                                      -58-
<PAGE>

         Unmatched Contributions (including earnings thereon), and second,
         After-Tax Matched Contributions (including earnings thereon).

                  (c) Rollover Account Withdrawals. Subject to subsection (d)
         below, a Participant who has made rollover contributions to the Plan
         may withdraw all or any portion of the balance of his Rollover Account,
         provided that the minimum withdrawal amount shall be the lesser of $500
         or the entire balance of such Account available for withdrawal, with
         such balance determined as of the Valuation Date immediately preceding
         the withdrawal distribution date. To obtain a withdrawal under this
         subsection (c), a Participant must submit a request to the Committee or
         its designee in the manner and form approved by the Committee.

                  (d) Conditions of Withdrawals. There is no limit to the number
         of withdrawals a Participant may make under this Section. To the extent
         applicable, any withdrawal under this Section by such a Participant who
         is a Local 777 Employee or, prior to February 18, 2002, a Local 327
         Employee, shall be subject to Spousal Consent. If a Participant who is
         a Local 66 Employee or Local 47 Employee and who is under the age of 59
         1/2 and who has less than five years of Service at the time he elects
         to withdraw all or a portion of his After-Tax Matched Contributions,
         such Participant shall be suspended from participation in the Plan from
         the Valuation Date preceding the distribution of the withdrawal until
         the date following 6 full months from the date of such withdrawal,
         provided the Committee or its agent has received prior to such date the
         Participant's election (in the form and manner prescribed in Section
         3.4 hereof) to recommence participation after such suspension period.

         7.3 Loans: Any Participant who is an Employee (including any such
Participant on an Authorized Absence) may make application to borrow from his
vested Accounts in the Trust Fund. Upon receipt of a loan application from
Participant, the Committee may in its discretion direct the Trustee to make a
loan to such Participant. Such loans shall be granted in a uniform and
non-discriminatory manner pursuant to the terms and conditions of a written loan
procedure that shall be established by the Committee and subject to amendment
from time to time and at any time by the Committee, with such written procedure
hereby incorporated by reference as a part of the Plan. The amount of the loan,
when added to the amount of any outstanding loan or loans to the Participant
from any other plan of the Employer or an Affiliate which is qualified under
Code Section 401(a), shall not exceed the lesser of (a) $50,000, reduced by the
excess, if any, of the highest outstanding balance of loans from all such plans
during the one-year period ending on the day before the date on which such loan
was made over the outstanding balance of loans from the Plan on the date on
which such loan was made or (b) 50% of the present value of the Participant's
vested Account balances under the Plan. The foregoing notwithstanding, to the
extent applicable for Local 777 Employees and, prior to February 18, 2002, Local
327 Employees, a loan under this Section shall be subject to Spousal Consent.

                                      -59-
<PAGE>

                                  ARTICLE VIII

                              INVESTMENT DIRECTIONS

         8.1 Investment of Trust Fund: Except as provided in Article VII with
respect to Plan loans and as otherwise provided below, the Trustee shall divide
the Trust Fund into the Reliant Resources Common Stock Fund, CenterPoint Common
Stock Fund, and such other Investment Funds as may be selected from time to time
by the Committee, in accordance with the directions of the Participant and
following such rules and procedures prescribed by the Committee. Notwithstanding
any provision in this Section 8.1 to the contrary, a Participant (a) who is a
Benefit Program III Participant may not direct the investment of the amounts in
his Employer Matching Account or (b) who is a Benefit Program I Participant may
not direct the investment of amounts in his Profit Sharing Account that were
contributed in the form of Company Stock, into any Investment Fund other than
the Reliant Resources Common Stock Fund until such Participant attains age 55 or
older. Moreover, notwithstanding any provision in this Section 8.1 to the
contrary, no Contributions, forfeitures or balances in Rollover Accounts shall
be invested in the CenterPoint Common Stock Fund.

                  The Committee from time to time may revise the number and type
of Investment Funds. Subject to such rules and procedures adopted by the
Committee, each Participant shall have the right to direct the Committee or any
agent appointed by the Committee to administer the investment of the Trust Fund
to instruct the Trustee to invest his (a) Pre-Tax Contributions, (b) After-Tax
Contributions, (c) Employer Matching Contributions, other than such
contributions made in Company Stock unless he is age 55 or older, (d) Profit
Sharing Contributions paid in cash and, if age 55 or older, paid in Company
Stock, and (e) Rollover Account, and the earnings and accretions thereon, in any
whole percentages totaling 100% among the Investment Funds (other than the
CenterPoint Common Stock Fund).

                  With no restrictions on frequency, each Participant may, by
electronic, telephonic, written or other such manner as may be prescribed from
time to time by the Committee and subject to any restrictions or conditions that
may be established by the Committee, direct (1) the investment of his future (i)
After-Tax Contributions, (ii) Pre-Tax Contributions, (iii) Employer Matching
Contributions, other than such contributions made by the Employer in Company
Stock, and (iv) Profit Sharing Contributions paid in cash, and (2) the transfer
of the current values in his (i) After-Tax Contribution Account, (ii) Pre-Tax
Contribution Account, (iii) Employer Matching Account that were contributed in
cash or, if age 55 or older, contributed in Company Stock, (iv) Profit Sharing
Account that were contributed in cash or, if age 55 or older, contributed in
Company Stock and/or (v) Rollover Account among the various Investment Funds
(other than the CenterPoint Common Stock Fund) in any whole percentages totaling
100%. Any such change in Investment Funds shall be effective as soon as
reasonably practicable following receipt of the change of Investment Funds, but
in no event shall such change be effective earlier than the close of business on
the Valuation Date on which such change is received. If a Participant fails to
make a proper designation, then his Account shall be invested as soon as
administratively feasible in the Investment Fund or Funds specified by the
Committee from time to time in a uniform and nondiscriminatory manner.

                                      -60-
<PAGE>

                  To the extent applicable, with no restrictions on frequency,
by electronic, telephonic, written or other such manner as may be prescribed
from time to time by the Committee and subject to any restrictions or conditions
that may be established by the Committee, direct that any portion of his Account
invested in the CenterPoint Common Stock Fund be transferred among the other
available Investment Funds. Any such transfer shall be irrevocable and the
transferred amounts may not at any time be subsequently reinvested in the
CenterPoint Common Stock Fund.

                  Except as otherwise expressly provided herein, interest,
dividends and other income and all profits and gains produced by each Investment
Fund shall be paid in such Investment Fund, and such interest, dividends and
other income, and profits or gains without distinction between principal and
income, shall be invested and reinvested, but only in property of the class
hereinabove specified for the particular Investment Fund. The foregoing
notwithstanding, any interest, dividends or other income produced, or profits or
gains realized, by the CenterPoint Common Stock Fund shall be paid to and
invested in the other Investment Funds in accordance with a Participant's
investment fund direction in effect as of such payment date. All purchases of
Company Stock shall be made at prices which, in the judgment of the Trustee, do
not exceed the fair market value of such Company Stock. Pending such investment
or application of cash, the Trustee may retain cash uninvested without liability
for interest if it is prudent to do so, or may invest all or any part thereof in
Treasury Bills, commercial paper or like holdings.

         8.2 Voting of Company Stock and CenterPoint Common Stock; Exercise of
Other Rights:

                  (a) Voting rights with respect to shares of Company Stock in
         the Reliant Resources Common Stock Fund and CenterPoint Common Stock in
         the CenterPoint Common Stock Fund allocated to the Accounts of
         Participants shall be voted by the Trustee in such manner as may be
         directed by the respective Participants, with fractional shares being
         voted on a combined basis to the extent possible to reflect the
         direction of the voting Participants. The Trustee shall vote shares of
         Company Stock and CenterPoint Common Stock, as applicable, for which
         they have not received direction in the same proportion as directed
         shares are voted, giving effect to all affirmative directions by
         Participants, including directions to vote for or against, to abstain
         or to withhold the vote, and the Trustee shall have no discretion in
         such matter unless the Trustee determines that to do so would be
         inconsistent with the provisions of Title I of ERISA.

                  (b) In the event that there is a tender offer or exchange
         offer for outstanding shares of Company Stock or CenterPoint Common
         Stock, rights with respect to the tender offer or exchange offer shall
         be as with respect to voting rights described in Section 8.2(a) above.
         If the Trustee shall not receive timely instruction from a Participant
         as to the manner in which to respond to such a tender offer, the
         Trustee shall not tender or exchange any shares of Company Stock with
         respect to which such Participant has the right to direction, and the

                                      -61-
<PAGE>
         Trustee shall have no discretion in such matter unless the Trustee
         determines that to do so would be inconsistent with the provisions of
         Title I of ERISA. With respect to fractional shares of Company Stock or
         CenterPoint Common Stock allocated to the Accounts, voting rights and
         rights to tender or exchange in connection with a tender offer or
         exchange offer for the shares of Company Stock or CenterPoint Common
         Stock, as applicable, shall be exercised by the Trustee in the same
         proportion as they vote, tender or exchange shares of Company Stock or
         CenterPoint Common Stock with respect to shares allocated to the
         Accounts, and the Trustee shall have no discretion in such matter
         unless the Trustee determines that to do so would be inconsistent with
         the provisions of Title I of ERISA.

                  (c) Solicitation of exercise of Participants' voting rights by
         management of the Company and others under a proxy or consent provision
         applicable to all holders of Company Stock shall be permitted.
         Solicitation of exercise of Participant tender or exchange offer rights
         by management of the Company and others shall be permitted. The Trustee
         shall notify Participants of each occasion for the exercise of voting
         rights or rights with respect to a tender offer or exchange offer
         within a reasonable time before such rights are to be exercised. Such
         notification shall include all information distributed to shareholders
         by the Company regarding the exercise of such rights. Copies of Company
         written communications to Participants relating to each opportunity for
         Participant exercise of rights under this Section 8.2 shall be promptly
         furnished to the Trustee. The instructions received by the Trustee from
         Participants shall be held by the Trustee in confidence and shall not
         be divulged or released to any person, including the Committee or
         officers or employees of the Company or its Affiliates.

                                      -62-
<PAGE>

                                   ARTICLE IX

                         TRUST AGREEMENT AND TRUST FUND

         9.1 Trust Agreement: As part of the Plan, the Company has entered into
the Trust Agreement with the Trustee. The provisions of such Trust Agreement are
herein incorporated by reference as fully as if set out herein, and the assets
held under said Trust Agreement on behalf of this Plan shall constitute the
Trust Fund.

         9.2 Benefits Paid Solely From Trust Fund: All of the benefits provided
to be paid under Article VI hereof shall be paid by the Trustee out of the Trust
Fund to be administered under such Trust Agreement. Neither the Employer nor the
Trustee shall be responsible or liable in any manner for payment of any such
benefits, and all Participants hereunder shall look solely to such Trust Fund
and to the adequacy thereof for the payment of any such benefits of any nature
or kind which may at any time be payable hereunder.

         9.3 Committee Directions to Trustee: The Trustee shall make only such
payments out of the Trust Fund as may be directed by the Committee. The Trustee
shall not be required to determine or make any investigation to determine the
identity or mailing address of any person entitled to any payments out of the
Trust Fund and shall have discharged its obligation in that respect when it
shall have sent checks or other papers by ordinary mail to such persons and
addresses as may be certified to it by the Committee.

         9.4 Trustee's Reliance on Committee Instructions: In any case where the
Trustee shall be required hereunder to act upon instructions to be received from
the Committee, the Trustee shall be protected in relying on any such
instructions which shall be in writing and signed by any member of, or Secretary
of, the Committee, and the Trustee shall be protected in relying upon the
authority to act of any person certified to it by the Company as a member of, or
Secretary of, the Committee until a successor to any such person shall be
certified to the Trustee by the Company.

         9.5 Authority of Trustee in Absence of Instructions From the Committee:
If at any time the Committee shall be incapable for any reason of giving any
directions, instructions or authorizations to the Trustee as are herein provided
for and as may be required incidental to the administration of this Plan, the
Trustee may act and shall be completely protected and without liability in so
acting without such directions, instructions and authorizations as it in its
sole discretion deems appropriate and advisable under the circumstances for the
carrying out of the provisions of this Plan. In the event of termination of this
Plan for any reason, the Committee shall be authorized to give all such
instructions to the Trustee, and the Trustee shall be protected in relying on
all such instructions, as may be necessary to make payment to any persons then
interested in the Trust Fund of all such amounts as are specified herein to be
paid under Section 10.5 hereof upon the termination of this Plan and the Trust
Agreement.

         9.6 Compliance with Exchange Act Rule 10(b)(18): At any time that the
Trustee makes open market purchases of Company Stock, the Trustee will either
(a) be an "agent

                                      -63-
<PAGE>

independent of the issuer" as that term is defined in Rule 10(b)(18) promulgated
pursuant to the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), or (b) make such open market purchases in accordance with the provisions,
and subject to the restrictions, of Rule 10(b)(18) of the Exchange Act.

                                      -64-
<PAGE>

                                   ARTICLE X

                               ADOPTING EMPLOYERS,
                    AMENDMENT AND TERMINATION OF THE PLAN AND
                DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND

         10.1 Designation of Employers: The Board by may designate by written
instrument any entity or organization eligible by law to participate in the Plan
and the Trust as an Employer. Such written instrument shall specify the
effective date of such designated participation and the classification of its
Employees who shall be eligible to participate in the Plan, may incorporate
specific provisions relating to the operation of the Plan that apply to the
designated Employer only and shall become, as to such designated Employer and
its Employees, a part of the Plan. Each designated Employer shall be
conclusively presumed to have consented to its designation and to have agreed to
be bound by the terms of the Plan and any and all amendments thereto upon its
submission of information to the Committee required by the terms of or with
respect to the Plan or upon making a contribution to the Trust Fund pursuant to
the terms of the Plan; provided, however, that the terms of the Plan may be
modified so as to increase the obligations of an Employer only with the consent
of such Employer, which consent shall be conclusively presumed to have been
given by such Employer upon its submission of any information to the Committee
required by the terms of or with respect to the Plan or upon making a
contribution to the Trust Fund pursuant to the terms of the Plan following
notice of such modification.

                  For purposes of the Code and ERISA, the Plan as adopted by the
Employers shall constitute a single plan rather than a separate plan of each
Employer. All assets in the Trust Fund shall be available to pay benefits to all
Members and their beneficiaries. The provisions of the Plan shall apply
separately and equally to each Employer and its Employees in the same manner as
is expressly provided for the Company and its Employees, except that the power
to appoint or otherwise affect the Committee or the Trustee and the power to
amend or terminate the Plan and Trust Agreement shall be exercised by the
Company, the Board of Directors of the Company or the Committee, as applicable,
alone.

                  The Board may, in its discretion, terminate an Employer's Plan
participation at any time. With the written consent of the Committee, any
Employer may, by appropriate action of its Board of Directors or noncorporate
counterpart, terminate its participation in the Plan. Upon an Employer's
liquidation, bankruptcy, insolvency, sale, consolidation or merger to or with
another organization that is not an Employer hereunder, in which such Employer
is not the surviving company, all obligations of that Employer hereunder and
under the Trust Agreement shall terminate automatically, and the Trust Fund
assets attributable to the Employees of such Employer shall be held or
distributed as herein provided unless, with the approval of the Board or the
Committee, the successor to that Employer assumes the duties and
responsibilities of such Employer, by adopting this Plan and the Trust
Agreement, or by establishment of a separate plan and trust to which the assets
of the Trust Fund held on behalf of the Employees of such Employer shall be
transferred with the consent and agreement of that Employer. Upon the
consolidation or merger of two or more of the Employers under this Plan with
each other, the

                                      -65-
<PAGE>
surviving Employer or organization shall automatically succeed to all the rights
and duties under the Plan and Trust Agreement of the Employers involved.

                  The above to the contrary notwithstanding, any action that may
be taken by the Board pursuant to this Section may also be taken by the
Committee.

         10.2 Continuous Service: The following special provisions shall apply
to all Employers:

                  (a) An Employee shall be considered in continuous Service
         while regularly employed simultaneously or successively by one or more
         Employers.

                  (b) The transfer of a Participant from one Employer to another
         Employer shall not be deemed a termination of Service.

         10.3 Amendment of the Plan: Except as otherwise expressly provided in
this Section, (a) the Company shall have the right to amend or modify this Plan
and the Trust Agreement (with the consent of the Trustee, if required) at any
time and from time to time to the extent that it may deem advisable and (b) the
Committee shall have the right to amend or modify this Plan and the Trust
Agreement (with the consent of the Trustee, if required) to modify the
administrative provisions of the Plan, to change the Investment Funds offered
under the Plan and for any changes required by applicable law or by the Internal
Revenue Service to maintain the qualified status of the Plan and related Trust
at any time and from time to time to the extent that it may deem advisable. Any
such amendment or modification shall be set out in an instrument in writing duly
authorized by the Board or the Committee, as the case may be, and executed by an
appropriate officer of the Company or member of the Committee. Upon delivery by
the Company of such an instrument amending the Plan to the Trustee, this Plan
shall be deemed to have been amended or modified in such manner and to such
extent and effective as of the date therein set forth, and thereupon any and all
Participants, whether or not they shall have become such prior to such amendment
or modification, shall be bound thereby. No such amendment or modification
shall, however, increase the duties or responsibilities of the Trustee without
its consent thereto in writing, or have the effect of transferring to or vesting
in any Employer any interest or ownership in any properties of the Trust Fund,
or of permitting the same to be used for or diverted to purposes other than for
the exclusive benefit of the Participants and their Beneficiaries. No such
amendment shall decrease the Account of any Participant or shall decrease any
Participant's vested interest in his Account. No amendment shall directly or
indirectly reduce a Participant's non-forfeitable vested percentage in his
benefits under Section 6.1 of this Plan, unless each Participant having not less
than three years of Service is permitted to elect to have his non-forfeitable
vested percentage in his benefits computed under the provisions of Section 6.1
without regard to the amendment. Such election shall be available during an
election period, which shall begin on the date such amendment is adopted, and
shall end on the latest of (i) the date 60 days after such amendment is adopted,
(ii) the date 60 days after such amendment is effective, or (iii) the date 60
days after such Participant is issued written notice of the amendment by the
Committee or the Employer. Notwithstanding anything herein to the contrary, the
Plan or the Trust Agreement may be amended in such manner as may be

                                      -66-
<PAGE>
required at any time to make it conform to the requirements of the Code or of
any United States statutes with respect to employees' trusts, or of any
amendment thereto, or of any regulations or rulings issued pursuant thereto, and
no such amendment shall be considered prejudicial to any then existing rights of
any Participant or his Beneficiary under the Plan.

         10.4 Termination of the Plan: The Plan may be terminated pursuant to
the provisions of, and as of any subsequent date specified in, an instrument in
writing executed by the Company, and approved and authorized by the Board, and
which said instrument shall be delivered to the Trustee.

         10.5 Distribution of Trust Fund on Termination: In the event of a
termination of the Plan by the Company, the assets and properties of the Trust
Fund shall be valued and allocated as provided in Sections 5.2 and 5.3, and each
Participant shall be fully vested in all amounts attributable to his Employer
Matching Account and his Profit Sharing Account, and thereafter, each such
Participant shall become entitled to distributions in respect of his Accounts in
the Plan in the manner as provided in Section 6.6 herein, provided that no
Employer or Affiliate then establishes or maintains another defined contribution
plan (other than an employee stock ownership plan within the meaning of Code
Section 4975(e)(7) or Code Section 409 or a simplified employee pension within
the meaning of Code Section 408(k)).

         10.6 Effect of Discontinuance of Contributions: If the Company shall
discontinue its Contributions to the Trust Fund, or suspend its Contributions to
the Trust Fund under such circumstances so as to constitute a discontinuance of
Contributions within the purview of the reasoning of Treasury Regulations
Section 1.401-6(c), then all amounts theretofore credited to the Accounts of the
Participants shall become fully vested, and throughout any such period of
discontinuance of Contributions, all other provisions of the Plan shall continue
in full force and effect other than the provisions for Contributions by an
Employer or Participants and the forfeiture provisions of Section 6.1.

         10.7 Merger of Plan With Another Plan: In the case of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under, any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:

                  (a) Each Participant would (if either this Plan or the other
         plan then terminated) receive a benefit immediately after the merger,
         consolidation or transfer which is equal to or greater than the benefit
         he would have been entitled to receive immediately before the merger,
         consolidation or transfer (if this Plan had then terminated);

                  (b) Resolutions of the Board of Directors of the Employer
         under this Plan, and of any new or successor employer of the affected
         Participants, shall authorize such transfer of assets; and, in the case
         of the new or successor employer of the affected Participants, its
         resolutions shall include an assumption

                                      -67-
<PAGE>
         of liabilities with respect to such Participants' inclusion in the new
         employer's plan; and

                  (c) Such other plan and trust are qualified under Sections
         401(a) and 501(a) of the Code.

                                      -68-
<PAGE>
                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         11.1 Terms of Employment: The adoption and maintenance of the
provisions of this Plan shall not be deemed to constitute a contract between the
Employer and any Employee, or to be a consideration for, or an inducement or
condition of, the employment of any person. Nothing herein contained shall be
deemed to give to any Employee the right to be retained in the employ of the
Employer or to interfere with the right of the Employer to discharge any
Employee at any time, nor shall it be deemed to give the Employer the right to
require any Employee to remain in its employ, nor shall it interfere with any
Employee's right to terminate his employment at any time.

         11.2 Controlling Law: This Plan and the Trust shall be construed,
regulated and administered under the laws of the State of Texas, subject,
however, to such determinations under the Plan as may be governed by ERISA and
related provisions of the Code.

         11.3 Invalidity of Particular Provisions: In the event any provision of
this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.

         11.4 Non-Alienability of Rights of Participants: Except as otherwise
provided below and with respect to certain judgments and settlements pursuant to
Section 401(a)(13) of the Code, no interest, right or claim in or to the part of
the Trust Fund attributable to the Account of any Participant, or any
distribution of benefits therefrom, shall be assignable, transferable or subject
to sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution, claim or levy of any kind, voluntary or
involuntary (excluding a levy on an Account, other than the Pre-Tax Contribution
Account, for taxes filed upon the Plan by the Internal Revenue Service to the
extent valid and enforceable under applicable federal law), including, without
limitation, any claim asserted by a spouse or former spouse of any Participant,
and the Trustee shall not recognize any attempt to assign, transfer, sell,
mortgage, pledge, hypothecate, commute or anticipate the same. The preceding
sentence shall also apply to the creation, assignment or recognition of a right
to any benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a qualified domestic
relations order, as defined in Section 414(p) of the Code. The Committee shall
establish a written procedure to be used to determine the qualified status of
such orders and to administer distributions under such orders. Further, to the
extent provided under the qualified domestic relations order, a former spouse of
a Participant shall be treated as a spouse for all purposes of the Plan. If the
Committee receives a qualified domestic relations order with respect to a
Participant, the amount assigned to the Participant's former spouse may be
immediately distributed, to the extent permitted by law, from the vested portion
of the Participant's Account.

                                      -69-
<PAGE>

         11.5 Payments in Satisfaction of Claims of Participants: Any
distribution to any Participant or his Beneficiary or legal representative, in
accordance with the provisions of the Plan, of the interest in the Trust Fund
attributable to his Pre-Tax Contribution Account, Profit Sharing Account and/or
After-Tax Contribution Account, and the vested portion of his Employer Matching
Account, shall be in full satisfaction of all claims under the Plan against the
Trust Fund, the Trustee, the Company and the Employer. The Trustee may require
that any distributee execute and deliver to the Trustee a receipt and a full and
complete release of the Employer as a condition precedent to any payment or
distribution under the Plan.

         11.6 Payments Due Minors and Incompetents: If the Committee determines
that any person to whom a payment is due hereunder is a minor or is incompetent
by reason of physical or mental disability, the Committee shall have power to
cause the payments becoming due such person to be made to the guardian of the
minor or the guardian of the estate of the incompetent, or to the County Clerk
as allowed under law without the Committee or the Trustee being responsible to
see to the application of such payment. Payments made pursuant to such power
shall operate as a complete discharge of the Committee, the Trustee and the
Employer.

         11.7 Acceptance of Terms and Conditions of Plan by Participants: Each
Participant, through execution of the application required under the terms of
the Plan as a condition of participation herein, for himself, his heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and the Trust Agreement and
any subsequent amendments thereto and all actions of the Committee and the
Trustee hereunder. In consideration of the adoption of this Plan by the Employer
and the Contributions of the Employer to the Trust Fund, each Participant agrees
by the execution of his application to participate herein to release and hold
harmless to the extent permitted by ERISA the Employer, the Committee and the
Trustee from any liability for any act whatsoever, past, present or future,
performed in good faith in such respective capacities pursuant to the provisions
of this Plan or the Trust Agreement.

         11.8 Impossibility of Diversion of Trust Fund: Notwithstanding any
provision herein to the contrary, no part of the corpus or the income of the
Trust Fund shall ever be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries or for the payment
of expenses of the Plan. No part of the Trust Fund shall ever revert to the
Employer.

                                      -70-
<PAGE>

                  IN WITNESS WHEREOF, RELIANT RESOURCES, INC. has executed these
presents as evidenced by the signatures affixed hereto of its officers hereunto
duly authorized, in a number of copies, all of which shall constitute but one
and the same instrument, which instrument may be sufficiently evidenced by any
such executed copy hereof, this 7th day of December, 2001, effective as of
January 1, 2002.

                                       RELIANT RESOURCES, INC.

                                       By:     /s/ PHILIP J. BAZELIDES
                                           -----------------------------------
                                           Philip J. Bazelides
                                           Senior Vice President-Human Resources

                                      -71-<PAGE>
                                                                     EXHIBIT 4.1

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

<PAGE>

                             RELIANT RESOURCES, INC.
                                  DEFERRAL PLAN

                                    I N D E X

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                   <C>                                                                                      <C>
ARTICLE I             DEFINITIONS.................................................................................2

ARTICLE II            ADMINISTRATION..............................................................................6
         2.1          Plan Administrator..........................................................................6
         2.2          Records of Committee........................................................................6
         2.3          Committee Action............................................................................6
         2.4          Compensation, Expenses and Advisors of the Committee........................................6
         2.5          Liability of the Committee..................................................................6
         2.6          Powers and Duties of the Committee..........................................................7
         2.7          General Powers of Committee.................................................................7
         2.8          Participation by Committee..................................................................7
         2.9          Information From Employers..................................................................7

ARTICLE III           ACCOUNTS AND INVESTMENTS....................................................................8
         3.1          Accounts....................................................................................8
         3.2          Deemed Investment of Funds..................................................................8
         3.3          Distribution of Benefits....................................................................9
         3.4          Nature of Company's Obligation..............................................................9
         3.5          Administrative Costs.......................................................................10
         3.6          Forfeitures................................................................................10

ARTICLE IV            RIGHTS OF PARTICIPANTS.....................................................................11
         4.1          No Employment Agreement....................................................................11
         4.2          Assignability..............................................................................11
         4.3          Prerequisites to Benefits..................................................................12

ARTICLE V             BENEFICIARY DESIGNATIONS...................................................................13
         5.1          Beneficiary Designations...................................................................13

ARTICLE VI            CLAIMS FOR BENEFITS........................................................................14
         6.1          Presenting Claims for Benefits.............................................................14
         6.2          Claims Review Procedure....................................................................14
         6.3          Disputed Benefits..........................................................................15

ARTICLE VII           AMENDMENT, TERMINATION AND  ADOPTION OF PLAN...............................................16
         7.1          Amendment or Termination of the Plan.......................................................16
         7.2          Designation of Employers...................................................................16
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                   <C>                                                                                      <C>
ARTICLE VIII          MISCELLANEOUS..............................................................................17
         8.1          Reliance Upon Information..................................................................17
         8.2          Governing Law..............................................................................17
         8.3          Severability...............................................................................17
         8.4          Notice.....................................................................................17
         8.5          Withholding of Taxes.......................................................................17

PROGRAM A

ARTICLE I              DEFINITIONS..............................................................................A-1

ARTICLE II            PARTICIPATION.............................................................................A-1
         2.1          Eligibility...............................................................................A-1
         2.2          Designation of Participants...............................................................A-1
         2.3          Election to Participate...................................................................A-2

ARTICLE III           DEFERRALS.................................................................................A-2
         3.1          Employee Deferrals........................................................................A-2
         3.2          Director Deferrals........................................................................A-2
         3.3          Waiver or Suspension of Deferral..........................................................A-3

ARTICLE IV            INVESTMENTS OF ACCOUNTS...................................................................A-3
         4.1          Crediting of Accounts.....................................................................A-3
         4.2          Deemed Investment.........................................................................A-3

ARTICLE V             DISTRIBUTIONS.............................................................................A-3
         5.1          Distribution Elections....................................................................A-3
         5.2          Optional Forms of Distribution............................................................A-5
         5.3          Distribution Upon Early Termination.......................................................A-6
         5.4          Early Withdrawal With Penalty.............................................................A-6

PROGRAM B

ARTICLE I             DEFINITIONS...............................................................................B-1

ARTICLE II            PARTICIPATION.............................................................................B-1
         2.1          Eligibility...............................................................................B-1

ARTICLE III           RESTORATION BENEFITS......................................................................B-1
         3.1          Amount of Savings Restoration Benefit.....................................................B-1

ARTICLE IV            INVESTMENT OF ACCOUNTS....................................................................B-2
         4.1          Crediting of Accounts.....................................................................B-2
         4.2          Deemed Investment.........................................................................B-2

ARTICLE V             DISTRIBUTIONS.............................................................................B-2
         5.1          Distribution Elections....................................................................B-2
         5.2          Distribution Upon Termination of Employment...............................................B-3
</TABLE>

                                       ii
<PAGE>
<TABLE>
<CAPTION>
                                                                                                               Page
<S>                   <C>                                                                                      <C>
         5.3          Distribution Upon Disability..............................................................B-3
         5.4          Vesting...................................................................................B-4

PROGRAM C

ARTICLE I             DEFINITIONS...............................................................................C-1

ARTICLE II            PARTICIPATION.............................................................................C-1
         2.1          Eligibility...............................................................................C-1

ARTICLE III           RESTORATION BENEFITS......................................................................C-1
         3.1          Retirement Plan Restoration Benefit.......................................................C-1

ARTICLE IV            DISTRIBUTIONS.............................................................................C-2
         4.1          Distribution..............................................................................C-2
         4.2          Deemed Investment.........................................................................C-3

PROGRAM D

ARTICLE I             DEFINITIONS...............................................................................D-1

ARTICLE II            PARITICPATION.............................................................................D-1
         2.1          Eligibility...............................................................................D-1

ARTICLE III           ACCOUNTS AND INVESTMENTS..................................................................D-2
         3.1          Establishment of Account..................................................................D-2
         3.2          Crediting of Benefits.....................................................................D-2
         3.3          Deemed Investment.........................................................................D-2

ARTICLE IV            DISTRIBUTIONS.............................................................................D-2
         4.1          Distribution Upon Termination of Employment...............................................D-2
         4.2          Distribution Upon Disability..............................................................D-3

PROGRAM E

ARTICLE I             DEFINITIONS...............................................................................E-1

ARTICLE II            PARTICIPATION.............................................................................E-2
         2.1          Eligibility...............................................................................E-2

ARTICLE III           ACCOUNTS AND INVESTMENTS..................................................................E-2
         3.1          Transfers to 1985 Plan Deferral Accounts..................................................E-2
         3.2          Transfers of 1989 Plan Deferral Accounts..................................................E-2
         3.3          Deemed Investment.........................................................................E-2

ARTICLE IV            DISTRIBUTIONS.............................................................................E-2
         4.1          Distribution of 1985 Plan Deferral Accounts...............................................E-2
         4.2          Distribution of 1989 Plan Deferral Accounts...............................................E-3
         4.3          Early Withdrawal With Penalty.............................................................E-5
</TABLE>

                                      iii
<PAGE>

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    RECITALS

                  Reliant Resources, Inc., a Delaware corporation, with its
principal place of business in Houston, Harris County, Texas, hereby establishes
the Reliant Resources, Inc. Deferral Plan, effective January 1, 2002, for the
benefit of its eligible non-union employees and directors. The Plan provides
various separate Benefit Programs, as further described below.

                  The purpose of Program A is to permit the deferral of
compensation on favorable terms and thereby provide greater incentives to
Participants to remain in service with the Company and maintain the highest
standards of performance. The purpose of Program B is to restore to Participants
employer matching and annual employer profit sharing contributions that they are
unable to receive under the Reliant Resources, Inc. Savings Plan as a result of
annual compensation and contribution limits under Sections 401(a)(17) and 415 of
the Code.

                  The purpose of Programs C, D and E is to permit Employees
whose employment was transferred to the Company directly from Reliant Energy,
Incorporated to transfer the benefits, if any, they had accrued under certain
non-qualified benefits plans of Reliant Energy, Incorporated to the Plan.

                  Programs A and E are intended to qualify for the exemptions
provided under Title I of ERISA for plans that are not tax-qualified and that
are maintained primarily to provide deferred compensation for a select group of
management or highly compensated employees. Programs B, C, and D are intended to
qualify for the exemptions provided under Title I of ERISA for plans that are
excess benefit plans.

                                       1
<PAGE>

                                   ARTICLE I
                                  DEFINITIONS

                  Each term below shall have the meaning assigned thereto for
all purposes of this Plan unless the context requires a different construction.
Capitalized terms used herein that are not defined below but that are defined in
the Savings Plan shall have the meanings assigned thereto in the Savings Plan.

                  "ACCOUNT" means an individual account, established on behalf
of a Participant pursuant to a Benefit Program, to which contributions, earnings
and/or losses, and other benefits are credited and/or debited on his behalf.

                  "AFFILIATE" means any corporation which is a member of a
controlled group of corporations under Code Section 424(f) or is a member of an
affiliated service group, under Code Section 414(m), of which the Company or any
other Employer is a member, and any other business which together with the
Company is under common control pursuant to Code Section 414(c).

                  "ANNUAL INSTALLMENT PAYMENTS" means annual payments made to a
Participant pursuant to the terms of a Benefit Program, each of which shall be
calculated based on the total value of the Participant's relevant Account
balance(s) on the date immediately preceding the date of payment, multiplied by
a fraction, the numerator of which shall be one and the denominator of which
shall be the number of annual payments, including the payment to be made,
remaining in the payment period. For purposes of making any annual installment
distributions, the Investment Funds in which the Account(s) that are subject to
distribution are invested shall be liquidated on a pro rata basis.

                  "BENEFICIARY" means the person or entity to whom benefits are
payable in respect of a Participant hereunder after the Participant's death, as
provided in the applicable Benefit Program.

                  "BENEFIT PROGRAM" means each of the various programs of
benefits attached hereto, as amended from time to time, each of which is hereby
incorporated by reference as part of the Plan, under which specific benefits are
granted to Participants.

                  "BOARD" means the Board of Directors of the Company.

                  "BONUS" means a bonus payable in cash to the Employee by an
Employer under the Reliant Resources, Inc. Annual Incentive Compensation Plan or
such other equivalent plan as approved by management for inclusion hereunder.

                  "BRP ACCOUNT" means an account established pursuant to Program
C to which a Participant's benefits under the Reliant Energy, Incorporated
Benefit Restoration Plan or the Reliant Resources, Inc. Benefit Restoration
Plan, as applicable, are transferred, and deemed investment performance and
costs are credited and debited from time to time.

                                       2
<PAGE>

                  "COMMITTEE" means the Benefits Committee of the Company or
such other committee as shall be appointed by the Board to administer the Plan
pursuant to Article II hereof.

                  "COMPANY" means Reliant Resources, Inc., a Delaware
corporation, or any successor thereto.

                  "COMPENSATION" means the base salary and/or Bonus payable to
an Employee by an Employer, and the meeting attendance fees and/or retainer fees
payable to a Director by an Employer.

                  "DEFERRAL ACCOUNT" means an account established pursuant to
Program A to which participant compensation deferrals, deemed investment
performance and costs are credited and debited from time to time.

                  "DIRECTOR" means a member of the Board who is not an Employee.

                  "DISTRIBUTION DATE" means the date on which Reliant Energy,
Incorporated distributes to the holders of its common stock, by means of a pro
rata distribution, all of the shares of Company common stock it then owns.

                  "EFFECTIVE DATE" means January 1, 2002.

                  "EMPLOYEE" means any person, including an officer of any
Employer (whether or not he is also a member of the Board), who is employed by
an Employer and whose employment is not covered by the terms of a collective
bargaining agreement between an Employer and a union.

                  "EMPLOYER" means the Company and each Affiliate or other
employing organization in which the Company has a direct or indirect ownership
interest and that has been designated by the Committee as a participating
Employer pursuant to Section 7.2, and the successors, if any, to such
organizations.

                  "EMPLOYMENT" means employment as an Employee or the current
holding of a position as a Director of an Employer. Neither the transfer of an
Employee Participant from employment by the Company to employment by an
Affiliate nor the transfer of an Employee Participant from employment by an
Affiliate to employment by the Company shall be deemed to be a termination of
Employment of such 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 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.

                  "INVESTMENT FUND" means one or more of the investment funds
designated by the Committee at the time of reference. The Committee from time to
time may revise the number and type of Investment Funds.

                                       3
<PAGE>

                  "1985 PLAN DEFERRAL ACCOUNT" means an account established
pursuant to Program E to which certain of a Participant's benefits accrued under
the Reliant Energy, Incorporated 1985 Deferred Compensation Plan are
transferred.

                  "1989 PLAN DEFERRAL ACCOUNT" means an account established
pursuant to Program E to which certain of a Participant's benefits accrued under
the Reliant Energy, Incorporated 1989 Deferred Compensation Plan are
transferred.

                  "PARTICIPANT" means an Employee or a Director who is eligible
to participate in one or more Benefit Programs according to the terms thereof
and, if applicable, has elected to so participate.

                  "PARTICIPANT-DIRECTED ACCOUNT" means an Account with respect
to which an individual Participant has the right to direct the manner in which
the funds held therein shall be allocated among the available Investment Funds.

                  "PARTICIPATION YEAR" means (i) with respect to Compensation in
the form of a Bonus, the Plan Year during which the Bonus would have been paid
if not deferred, (ii) with respect to Compensation in the form of base salary,
the Plan Year during which a Participant performs services for the Employer for
such base salary, and (iii) with respect to Compensation in the form of a
Director's meeting attendance fees and a Director's retainer fees, the Plan Year
during which a Participant performs services for the Employer for such fees.

                  "PLAN" means the Reliant Resources, Inc. Deferral Plan,
established effective January 1, 2002, as set forth herein, and as may hereafter
be amended from time to time.

                  "PLAN YEAR" means the 12-month period commencing on January 1
and ending on December 31.

                  "ROLLOVER DISTRIBUTION ELECTION" means the election, if any,
made by the Participant and filed with the Committee prior to the Effective Date
indicating the Participant's desired method of distribution for his BRP Account
and/or his Savings Restoration Account.

                  "SAVINGS PLAN" means the applicable of the Reliant Energy,
Incorporated Savings Plan, as amended and restated effective April 1, 1999, as
thereafter amended from time to time, and the Reliant Resources, Inc. Savings
Plan, as established and thereafter amended from time to time.

                  "SAVINGS PLAN YEAR" means the "Plan Year" as defined in the
Savings Plan.

                  "SAVINGS RESTORATION ACCOUNT" means an account established
pursuant to Program B or Program D to which benefits accrued under Programs B
and D, deemed investment performance and costs are credited and debited from
time to time.

                  "TRUST" means the trust, if any, established under the Trust
Agreement.

                                       4
<PAGE>

                  "TRUST AGREEMENT" means the agreement, if any, entered into
between the Company and the Trustee pursuant to Section 3.4.

                  "TRUST FUND" means the funds and properties, if any, held
pursuant to the provisions of the Trust Agreement, together with all income,
profits, and increments thereto.

                  "TRUSTEE" means the trustee or trustees qualified and acting
under the Trust Agreement at any time.

                  Words used in this Plan in the singular shall include the
plural and in the plural the singular, and the gender of words used shall be
construed to include whichever may be appropriate under any particular
circumstances of the masculine, feminine or neuter genders.

                                       5
<PAGE>

                                   ARTICLE II
                                 ADMINISTRATION

         2.1 Plan Administrator. The Plan shall be administered by the
Committee, which shall be the primary fiduciary with respect to the operation
and administration of this Plan and shall serve as Plan administrator and named
fiduciary for purposes of ERISA Section 402(a)(i).

         2.2 Records of Committee. The Committee shall keep appropriate records
of its proceedings and the administration of the Plan. The Committee shall make
available to Participants and their Beneficiaries for examination, during
business hours, such records of the Benefit Program as pertain to the examining
person and such documents relating to the Benefit Program as are required by
ERISA.

         2.3 Committee Action. The Committee shall act by a majority of its
members at the time in office and such action may be taken either by vote at a
meeting or in writing without a meeting. The Committee shall keep a record of
all its meetings or other actions and shall forward all necessary communications
to the Employers and the Trustee. The Committee may adopt such rules,
regulations and bylaws as it deems desirable for the conduct of its affairs. The
Committee may authorize any one or more of its members or an agent to execute
any document or documents on behalf of the Committee and, in the event such
document affects the Trustee, the Committee shall notify the Trustee in writing
of such action and the name or names of its member or members or other agent so
designated. The Trustee thereafter shall accept and rely upon any document
executed by such member or members or agent as representing the action of the
Committee, until the Committee shall file with the Trustee a written revocation
of such designation. Upon the approval of a majority of the members of the
Committee, the Committee may (i) allocate among any of its members any of the
responsibilities of the Committee under the Plan and Trust Agreement and/or (ii)
designate any person, firm or corporation that is not a member of the Committee
to carry out any of the responsibilities of the Committee under the Plan and/or
Trust Agreement. Any such allocation or designation shall be made pursuant to a
Committee resolution. The Chairman of the Committee shall be agent of the Plan
and the Committee for the service of legal process at the principal office of
the Company.

         2.4 Compensation, Expenses and Advisors of the Committee. The members
of the Committee shall serve without bond (unless otherwise required by law) and
without compensation for their services as such. The Committee may select, and
authorize the Trustee to compensate suitably, such attorneys, agents and
representatives as it may deem necessary or advisable to the performance of its
duties. All expenses of the Committee that shall arise in connection with the
administration of the Plan shall be paid by the Employers or by the Trustee out
of the Trust Fund.

         2.5 Liability of the Committee. Except to the extent that such
liability is created by ERISA, no member of the Committee shall be liable for
any act or omission of any other member of the Committee, nor for any act or
omission on his own part except for his own gross negligence or willful
misconduct, nor for the exercise of any power or discretion in the performance
of any duty assumed by him hereunder. The Company shall indemnify and hold
harmless each member of the Committee from any and all claims, losses, damages,
expenses

                                       6
<PAGE>

(including counsel fees approved by such Committee), and liabilities
arising from any act or omission of such member in connection with duties and
responsibilities under the Plan and Trust Agreement, except when the same is
judicially determined to be due to the gross negligence or willful misconduct of
such member.

         2.6 Powers and Duties of the Committee. The Committee, on behalf of the
Participants and their Beneficiaries, shall enforce this Plan in accordance with
its terms and shall have all powers necessary for the accomplishment of that
purpose, including, but not by way of limitation, the following powers:

                  (a) to determine all questions relating to the eligibility of
         Employees and Directors to become Participants;

                  (b) to authorize all disbursements by the Trustee from the
         Trust Fund;

                  (c) to interpret and construe all terms, provisions,
         conditions and limitations of this Plan and of any Benefit Program
         adopted hereunder and to reconcile any inconsistency or supply any
         omitted detail that may appear in this Plan or in any Benefit Program
         adopted hereunder in such manner and to such extent, consistent with
         the general terms of the Plan and of any Benefit Program adopted
         hereunder, as the Committee shall deem necessary and proper to
         effectuate the Plan and any Benefit Program adopted hereunder for the
         greatest benefit of all parties interested in the Plan; and

                  (d) to make and enforce such rules and regulations for the
         administration of the Plan as are not inconsistent with the terms set
         forth herein.

         2.7 General Powers of Committee. In addition to all other powers herein
granted, and in general consistent with the provisions hereof, the Committee
shall have all other rights and powers reasonably necessary to supervise and
control the administration of this Plan. The determination of any fact by the
Committee and the construction placed by the Committee upon the provisions of
this Plan shall be binding upon all of the Participants under this Plan, their
Beneficiaries and the Employers.

         2.8 Participation by Committee. Members of the Committee may be
Participants under the Plan, but no member may vote on any matter relating to
his benefits under the Plan (except to the extent the vote applies to Plan
benefits generally).

         2.9 Information From Employers. The Employers shall supply full and
timely information to the Committee and its delegates as they may require in
administration of the Plan.

                                       7
<PAGE>

                                  ARTICLE III
                            ACCOUNTS AND INVESTMENTS

         3.1 Accounts. A separate Account(s) shall be established and maintained
for each Participant in accordance with the provisions of the Benefit Programs
in which he participates. Each Account shall clearly reflect the contributions
made to the Plan under the relevant Benefit Program(s) on behalf of the
Participant, whether by the Participant or by an Employer. All Accounts shall
also reflect the consequences of the deemed investment provided for in the
applicable Benefit Program. All interest, dividends, charges for premiums,
capital changes or market changes applicable to each Account shall be credited
or debited to the Account as they are deemed to occur. Until otherwise provided
by the Committee, Accounts shall be valued daily. A written report of the status
of each Account shall be furnished to the Participant from time to time, but no
less frequently than annually, based on the net fair market value of the assets
as of the reporting date calculated based on such deemed investment.

         3.2 Deemed Investment of Funds.

                  (a) Participant-Directed Accounts. All Accounts designated as
         Participant-Directed Accounts in the relevant provisions of the
         applicable Benefit Program shall be deemed to be invested among the
         Investment Funds in accordance with the directions of the Participant
         and following the relevant rules and procedures prescribed by the
         Committee. Except as otherwise expressly provided herein, interest,
         dividends and other income and all profits, gains and losses deemed to
         have been produced by each Investment Fund shall be credited or debited
         in such Investment Fund.

                      Prior to or upon the initial crediting of contributions to
         a Participant-Directed Account on behalf of a Participant, the
         Participant, in accordance with procedures established by the
         Committee, shall file with the Company an initial investment
         instruction indicating the manner in which his Participant-Directed
         Accounts shall be deemed allocated among the available Investment
         Funds. If no such instruction shall have been received by the Company,
         the Participant's Participant-Directed Accounts initially shall be
         deemed allocated among the available Investment Funds in the manner
         determined by the Committee. A Participant's investment instruction,
         including any permitted changes thereto as described below, shall apply
         to all contributions subsequently credited to a Participant-Directed
         Account on behalf of the Participant unless otherwise specified in the
         applicable Benefit Program or by the Committee.

                      Until such time as the Committee provides otherwise,
         Participants shall be permitted to change investment instructions in
         the manner approved by the Committee at any time with unlimited
         frequency. Any such change in investment instructions shall be
         effective as soon as reasonably practicable following receipt of the
         change of investment instructions by the Company or its appointed
         agent, but in no event shall such change be effective earlier than the
         close of business on the date on which such change is received.

                                       8
<PAGE>

                  (b) All Other Accounts. All Accounts other than
         Participant-Directed Accounts shall be deemed to be invested in the
         manner set forth in the applicable Benefit Program.

                  (c) Company Ownership. All contracts and other evidence of the
         investment of all assets related to this Plan shall be registered in
         the name of the Company, which shall be the owner/beneficiary thereof.
         While the Company may choose to invest assets equal to Account balances
         in accordance with the deemed investments described herein, it reserves
         the right not to make any such investment.

         3.3 Distribution of Benefits. A Participant's Accounts shall be
distributed to him in the manner set forth in the applicable Benefit Program.

         3.4 Nature of Company's Obligation. Plan benefits herein provided are a
contractual obligation of the Company and shall be paid out of the Company's
general assets. Neither a Participant nor a Beneficiary shall acquire any
interest greater than that of an unsecured creditor. Nevertheless, subject to
the terms hereof and of a Trust Agreement, the Company may transfer money or
property to a Trustee to provide, in whole or in part, the Plan benefits
hereunder, and the Trustee shall pay such Plan benefits to Participants and
their Beneficiaries out of the Trust Fund. To the extent the Company transfers
assets to a Trustee pursuant to a Trust Agreement, the Committee may, but need
not, establish procedures for the Trustee to invest the Trust Fund in accordance
with each Participant's designated deemed investments pursuant to Section 3.2(a)
respecting the portion of the Trust Fund assets equal to such Participant's
Participant-Directed Accounts.

         The Committee, in its sole discretion, may establish such a Trust and
direct the Company to enter into a Trust Agreement. In such event, the Company
shall remain the owner of all assets in the Trust Fund and the assets shall be
subject to the claims of the Company's creditors if the Company ever becomes
insolvent. For purposes hereof, the Company shall be considered "insolvent" if
(a) the Company is unable to pay its debts as they become due or (b) the Company
is subject to a pending proceeding as a debtor under the United States
Bankruptcy Code (or any successor federal statute). The chief executive officer
of the Company and the Board shall have the duty to inform the Trustee in
writing if the Company becomes insolvent. Such notice given under the preceding
sentence by any party shall satisfy all of the parties' duty to give notice.
When so informed, the Trustee shall suspend payments to the Participants and
hold the Trust Fund for the benefit of the Company's general creditors. If the
Company subsequently alleges that it is no longer insolvent or if the Trustee
receives a written allegation from a third party that the Company is insolvent,
the Trustee shall determine in accordance with the Trust Agreement whether the
Company is insolvent. If the Trustee determines that the Company is not
insolvent, the Trustee shall resume payments to the Participants. No Participant
or Beneficiary shall have any preferred claim to, or any beneficial ownership
interest in, any assets of the Trust Fund, and, upon commencement of
participation in the Plan, each Participant shall have agreed to waive his
priority credit position, if any, under applicable state law with respect to the
assets of the Trust Fund.

                                       9
<PAGE>

         3.5 Administrative Costs. All expenses incident to the administration,
termination or protection of the Plan and Trust Fund, including, but not limited
to, legal, accounting, Investment Manager and Trustee fees, shall be paid by the
Company, which may require reimbursement from the other Employers for their
proportionate shares, or, if not paid by the Company, shall be paid by the
Trustee from the Trust Fund and, until paid, shall constitute a first and prior
claim and lien against the Trust Fund. The Committee may, in its discretion,
charge Participants on a uniform basis for the administrative costs associated
with administering or implementing the Plan. Such amounts shall be reflected as
a reduction to Participant's Accounts in such manner as the Committee deems
appropriate.

         3.6 Forfeitures. Any amounts forfeited by a Participant under the terms
of the Plan will be applied to reduce, to the extent of such forfeitures, the
future contribution obligations of the Company hereunder.

                                       10
<PAGE>

                                   ARTICLE IV
                             RIGHTS OF PARTICIPANTS

         4.1 No Employment Agreement. Nothing in this agreement shall give a
Participant any rights to (or impose any obligations for) continued Employment
by the Company or any Affiliate or subsidiary thereof or successor thereto, nor
shall it give such entities any rights (or impose any obligations) with respect
to continued performance of duties by a Participant.

         4.2 Assignability.

                  (a) Restrictions on Assignment. Except as otherwise provided
         in Section 4.2(b), a Participant's right to receive payments or
         benefits under this Plan shall not be assignable or otherwise
         transferable except by will or the laws of descent and distribution or
         pursuant to a qualified domestic relations order as defined by the Code
         or Title I of ERISA, or the rules thereunder. Any attempted assignment
         or transfer in violation of this Section 4.2(a) shall be null and void.

                  (b) Additional Permitted Assignments. Section 4.2(a) shall not
         apply to an irrevocable disposition of a right or benefit under this
         Plan to a "Permitted Assignee," as defined below, by (x) a Participant
         age 55 or older (an "Eligible Participant"), or (y) a Permitted
         Assignee who has received an assignment from an Eligible Participant
         pursuant to this sentence.

                      (i) Permitted Assignee. The term "Permitted Assignee"
                  shall mean:

                          (A) the Eligible Participant;

                          (B) a spouse of the Eligible Participant;

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

                          (D) any brother or sister of the Eligible Participant;

                          (E) any spouse of any individual described in
                              subparagraph (C) or (D);

                          (F) a trustee of any trust which, at the applicable
                              time, is 100% Actuarially Held, as defined below,
                              for a Permitted Assignee or Assignees;

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

                                       11
<PAGE>

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

                          (I) 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.

                  (ii) Subsequent Assignees. This Section 4.2(b) shall be fully
         applicable to all Permitted Assignees, and the provisions of this
         Section 4.2(b) 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 4.2(b)(i). Any Permitted Assignee acquiring a
         right or benefit under this Plan shall execute and deliver to the
         Committee an agreement in the form specified by the Committee 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 4.2(b), whether voluntary, involuntary, by operation of law or
         otherwise shall be null and void.

                  (iii) 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, however, that
         the actual exercise of any such power of appointment shall not be
         ignored.

         4.3 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.

                                       12

<PAGE>

                                   ARTICLE V
                            BENEFICIARY DESIGNATIONS

         5.1 Beneficiary Designations. Each Participant shall file with the
Company a designation of one or more Beneficiaries to whom the Participant's
Account balance(s) shall be distributed in the event of the Participant's death
prior to the complete distribution of the Account balance(s) payable with
respect to the Participant. Such designation shall be effective when received in
writing and accepted by the Company (the "Beneficiary Designation"). The
Participant may from time to time revoke or change the Beneficiary Designation
by a written document delivered to and accepted by the Company. If there is no
valid Beneficiary Designation on file with the Company at the time of the
Participant's death, or if all of the Beneficiaries designated by the
Participant in the Beneficiary Designation shall have predeceased the
Participant or otherwise ceased to exist, the Beneficiary shall be the
Participant's spouse, if the Participant was legally married at the time of the
Participant's death and if the Participant's spouse survives the Participant, or
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 that Beneficiary had that Beneficiary
lived shall, unless the Beneficiary Designation provided otherwise, be
distributed to that Beneficiary's estate.

                                       13
<PAGE>

                                   ARTICLE VI
                               CLAIMS FOR BENEFITS

         6.1 Presenting Claims for Benefits. A "Claims Administrator" shall be
appointed by the Committee or, absent such appointment, shall be the Company's
director of benefits, with such Claims Administrator authorized by the Committee
to conduct the initial review and render a decision as provided in this Section
for all claims for benefits under the Plan. Any Participant or any other person
claiming under any deceased Participant (collectively, the "Applicant") may
submit written application to the Claims Administrator for the payment of any
benefit asserted to be due him under the Plan. Such application shall set forth
the nature of the claim and such other information as the Claims Administrator
may reasonably request.

         The Claims Administrator shall notify the Applicant of the benefits
determination within a reasonable time after receipt of the claim, such time not
to exceed 90 days unless special circumstances require an extension of time for
processing the application. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the Applicant
prior to the end of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Claims Administrator expects to render its final
decision. Notice of the Claims Administrator's decision to deny a claim in whole
or in part shall be set forth in a manner calculated to be understood by the
Applicant and shall contain the following:

                  (a) the specific reason or reasons for the denial;

                  (b) specific reference to the pertinent Plan provisions on
         which the denial is based;

                  (c) a description of any additional material or information
         necessary for the Applicant to perfect the claim and an explanation of
         why such material or information is necessary; and

                  (d) an explanation of the claims review procedures set forth
         in Section 6.2 hereof, including a statement of the claimant's right to
         bring a civil action under Section 502(a) of ERISA following a denial
         on review.

If notice of denial is not furnished and if the claim is not granted within the
period of time set forth above, the claim shall be deemed denied for purposes of
proceeding to the review stage described in Section 6.2. Applicants shall be
given timely written notice of the time limits set forth herein for
determination on claims, appeal of claim denial and decisions on appeal.

         6.2 Claims Review Procedure. If an application filed by an Applicant
under Section 6.1 above shall result in a denial by the Claims Administrator of
the benefit applied for, either in whole or in part, such Applicant shall have
the right, to be exercised by written request filed with the Committee within 60
days after receipt of notice of the denial of his application or, if no such
notice has been given, within 60 days after the application is deemed denied
under Section 6.1, for the review of his application and of his entitlement to
the benefit for which he

                                       14
<PAGE>

applied, by the Committee. Such request for review may contain such additional
information and comments as the Applicant may wish to present. The Committee
shall reconsider the application in light of such additional information and
comments as the Applicant may have presented and, if the Applicant shall have so
requested, may grant the Applicant a formal hearing before the Committee in its
discretion. The Committee shall also permit the Applicant or his designated
representative to review pertinent documents in its possession, including copies
of the Plan document and information provided by the Employer relating to the
Applicant's entitlement to such benefit. The Committee shall render a decision
no later than the date of the Committee meeting next following receipt of the
request for review, except that (i) a decision may be rendered no later than the
second following Committee meeting if the request is received within 30 days of
the first meeting and (ii) under special circumstances which require an
extension of time for rendering a decision (including but not limited to the
need to hold a hearing), the decision may be rendered not later than the date of
the third Committee meeting following the receipt of the request for review. If
such an extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to the
Applicant prior to the commencement of the extension. Notice of the Committee's
final decision shall be furnished to the Applicant in writing, in a manner
calculated to be understood by him, and if the Applicant's claim on review is
denied in whole or in part, the notice shall set forth the specific reason or
reasons for the denial and the specific reference to the pertinent plan
provisions on which the denial is based, the Applicant's right to receive upon
request, free of charge, reasonable access to, and copies of, all relevant
documents, records and other information to his claim, and his right to bring a
civil action under Section 502(a) of ERISA. If the decision on review is not
furnished within the time period set forth above, the claim shall be deemed
denied on review. Benefits under this Plan will only be paid if the Committee
decides in its discretion that the Applicant is entitled to them.

         6.3 Disputed Benefits. If any dispute shall arise between a Participant
or other person claiming under a Participant and the Committee after review of a
claim for benefits, or in the event any dispute shall develop as to the person
to whom the payment of any benefit under the Plan shall be made, the Trustee may
withhold the payment of all or any part of the benefits payable hereunder to the
Participant or other person claiming under the Participant until such dispute
has been resolved by a court of competent jurisdiction or settled by the parties
involved.

                                       15
<PAGE>

                                  ARTICLE VII
                           AMENDMENT, TERMINATION AND
                                ADOPTION OF PLAN

         7.1 Amendment or Termination of the Plan. The Board or the Committee
may amend or, in the case of the Committee, with the consent of the Board,
terminate this Plan from time to time or at any time. Such right of amendment
shall include the right to change the Investment Funds offered under the Plan,
to add new Benefit Programs or to amend or terminate existing Benefit Programs
from time to time or at any time. Other than the right to change Investment
Funds prospectively, any such amendment or termination shall not, however,
without the written consent of the affected Participant, adversely affect the
rights of a Participant with respect to amounts credited to his Account prior to
the later of the date that such amendment is executed or effective. In the event
of a termination of the Plan, unpaid benefits shall continue to be an obligation
of the Company and shall be paid as scheduled.

         7.2 Designation of Employers. The Committee may designate any Affiliate
as an Employer by written instrument delivered to the Company, the Trustee, and
the designated Affiliate. Such written instrument shall specify the effective
date of such designated participation and shall become, as to such designated
Affiliate and its Employees, a part of the Plan. Each designated Affiliate shall
be conclusively presumed to have consented to its designation and to have agreed
to be bound by the terms of the Plan and any and all amendments thereto with
respect to its eligible Employees upon its submission of information to the
Committee required by the terms of or with respect to the Plan or upon making a
contribution pursuant to the terms of the Plan. Each designated Affiliate shall
authorize and designate the Company as its agent to act for it in all
transactions affecting the administration of the Plan and shall authorize and
designate the Committee to act for such Affiliate and its Participants in the
same manner in which the Committee may act for the Company and its Participants
hereunder.

                                       16
<PAGE>

                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.1 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.

         8.2 Governing Law. This Plan shall be construed, administered, and
governed in all respects under applicable federal law, and to the extent that
federal law is inapplicable, under the laws of the State of Texas. If any
provision of this Plan shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall continue to be
fully effective.

         8.3 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.

         8.4 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 date shown on the postmark on the receipt
for registration or certification.

         8.5 Withholding of Taxes. The Company will withhold from any benefits
payable under this Plan all federal, state, city or other taxes as may be
required pursuant to any law or governmental regulation or ruling and take other
action as may be necessary in the opinion of the Company to satisfy all
obligations for withholding of such taxes.

                                       17
<PAGE>

         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 may
be sufficiently evidenced by any executed copy hereof, this 7th day of
December, 2001, but effective as of January 1, 2002.

                                       RELIANT RESOURCES, INC.

                                        By       /s/ PHILIP J. BAZELIDES
                                          --------------------------------------
                                          Philip J. Bazelides
                                          Senior Vice President-Human Resources

                                       18
<PAGE>

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    PROGRAM A
                              DEFERRED COMPENSATION

                                   ARTICLE I
                                   DEFINITIONS

                  This Program A is part of the Reliant Resources, Inc. Deferral
Plan (the "Plan"), and all capitalized terms defined therein shall have the same
meaning when used in this Program A. In addition, each term below shall have the
meaning assigned thereto for all purposes of this Program A unless the context
requires a different construction.

                  "ATTENDANCE FEE DEFERRAL" means the amounts withheld from the
meeting attendance fees otherwise payable to a Director Participant in the
applicable Participation Year, as described in Section 3.2(a).

                  "BONUS DEFERRAL" means the amount withheld from an Employee
Participant's Bonus for the applicable Participation Year, as described in
Section 3.1(b).

                  "RETAINER FEE DEFERRAL" means the amount withheld from the
retainer fee otherwise payable to a Director Participant in the applicable
Participation Year, as described in Section 3.2(b).

                  "SALARY DEFERRAL" means the amounts withheld from an Employee
Participant's base salary for the applicable Participation Year, as described in
Section 3.1(a).

                  All section references used in this Program A refer to the
applicable section in this Program A except where otherwise noted.

                                   ARTICLE II
                                  PARTICIPATION

         2.1 Eligibility. Each Director shall be eligible for designation by the
Committee for participation in Program A as of the first day of the Plan Year
coincident with or next following the date on which he is first installed as a
Director. All select key Employees who are highly-compensated Employees shall be
eligible for designation by the Committee for participation in Program A. The
Committee may, from time to time, establish additional eligibility requirements
for participation in Program A.

         2.2 Designation of Participants. Prior to the commencement of any
Participation Year, the Committee shall designate and notify in writing the
Employees and/or Directors who it

                                      A-1
<PAGE>

selects as eligible to elect to defer Compensation under this Program A for such
Participation Year. A designation of an Employee or Director as eligible to
defer Compensation for a particular Participation Year shall not automatically
entitle such Participant to participate with respect to any other Participation
Year.

         2.3 Election to Participate. After an Employee or Director has been
notified by the Committee that he is eligible to participate in Program A for a
Participation Year, he must notify the Committee by such method as the Committee
shall designate if he chooses to defer Compensation for such Participation Year.
A Participant's election to defer Compensation with respect to a Participation
Year (i) shall specify the type or types and the amount or amounts of
Compensation, as described in Article III hereof, that he wishes to defer,
subject to such limitations as the Committee may impose from time to time; (ii)
shall specify the manner of distribution the Participant chooses with respect to
such deferrals pursuant to Article V; (iii) in the event a Participant-Directed
Account shall not previously have been established on behalf of the Participant,
shall specify an initial investment instruction pursuant to Section 3.2(a) of
the Plan indicating the manner in which his Participant-Directed Accounts shall
be deemed allocated among the available Investment Funds; and (iv) shall be
effective upon receipt by the Committee. A Participant's election to defer the
payment of any form of Compensation must be made prior to the first day of the
Participation Year in which such Compensation would otherwise be paid to the
Participant and will be irrevocable as of the December 31 preceding such
Participation Year.

                                  ARTICLE III
                                    DEFERRALS

         3.1 Employee Deferrals.

                  (a) Salary Deferrals. When making an election under Section
         2.3, an Employee Participant may elect to defer a certain percentage of
         the annual base salary otherwise payable to him after the withholding
         of any applicable FICA taxes, from a minimum of 1% up to a maximum of
         80% of such amount, for the applicable Participation Year. The
         percentage of base salary so elected to be deferred shall be withheld
         from the Employee Participant's base salary during each pay period of
         the applicable Participation Year.

                  (b) Bonus Deferrals. When making an election under Section
         2.3, an Employee Participant may elect to defer a certain percentage of
         the Bonus otherwise payable to him after the withholding of any
         applicable FICA taxes, from a minimum of 1% up to a maximum of 100% of
         such amount, for the applicable Participation Year. The amount of Bonus
         elected to be deferred shall be withheld from the Employee
         Participant's Bonus otherwise payable during the Participation Year.

         3.2 Director Deferrals.

                  (a) Attendance Fee Deferrals. When making an election under
         Section 2.3, a Director Participant may elect to defer a certain
         percentage of the meeting attendance

                                      A-2
<PAGE>

         fees earned by him in the applicable Participation Year from a minimum
         of 1% up to a maximum of 100%. The amount of meeting attendance fees so
         elected to be deferred shall not be paid but shall be withheld from the
         Director Participant's meeting attendance fees otherwise payable during
         the Participation Year.

                  (b) Retainer Fee Deferrals. When making an election under
         Section 2.3, a Director Participant may elect to defer a certain
         percentage of the retainer fees earned by him in the applicable
         Participation Year from a minimum of 1% up to a maximum of 100%. The
         amount of retainer fees so elected to be deferred shall not be paid but
         shall be withheld from the Director Participant's retainer fees
         otherwise payable during the Participation Year.

         3.3 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 Program A for such time as the Committee may deem to be
necessary upon a finding that the Participant has suffered a financial hardship.
The Committee may also, in its sole discretion, permit a Participant to take
prospective remedial action within the same year in order to bring his total
Compensation deferral for the Participation Year in which the event resulting in
a waiver or suspension occurred to the level of his original deferral election,
provided that any otherwise applicable limits of Program A, whether contained
herein or established by the Committee, are not thereby exceeded.

                                   ARTICLE IV
                             INVESTMENTS OF ACCOUNTS

         4.1 Crediting of Accounts. A separate Deferral Account shall be
established and maintained for each Participant who makes deferrals of
Compensation under this Program A. All Compensation deferred by a Participant
under this Program A shall not be paid to the Participant but shall be credited
to the Participant's Deferral Account on the date such Compensation otherwise
would have been paid to the Participant.

         4.2 Deemed Investment. All Deferral Accounts established pursuant to
this Program A shall be Participant-Directed Accounts such that the amounts
contributed thereto are deemed to be invested in accordance with the provisions
of Section 3.2(a) of the Plan.

                                   ARTICLE V
                                  DISTRIBUTIONS

         5.1 Distribution Elections.

                  (a) Employee Participants. At the time an Employee Participant
         elects to defer Compensation for a Participation Year and in accordance
         with procedures established by the Committee, he shall elect (x) a
         method(s) of distribution for the benefits attributable to his Salary
         Deferrals, if any, for such Participation Year and (y) a method(s) of
         distribution for the benefits attributable to his Bonus Deferrals, if
         any, for such Participation Year, as follows:

                                      A-3
<PAGE>

                      (i) the Employee Participant shall elect a form(s) of
                  distribution from among those set forth in Section 5.2, below;

                      (ii) if he elects one of the early distribution options
                  set forth in Sections 5.2(a) and 5.2(b) below, the Employee
                  Participant shall elect a calendar year during which such
                  early distribution shall be paid, which shall in no event be
                  prior to the fourth calendar following the Plan Year in which
                  the Participant deferred the Compensation;

                      (iii) if he elects the lump-sum distribution option set
                  forth in Section 5.2(c) below, the Employee Participant shall
                  elect the age between ages 55 and 65 following his attainment
                  of which the lump-sum distribution shall be paid, except as
                  otherwise indicated in Section 5.2(c)(i), below; and

                      (iv) if he elects the annual installment option set forth
                  in Section 5.2(d) below, the Employee Participant shall elect
                  (x) whether such Annual Installment Payments shall be
                  distributed over a 5, 10 or 15 year term, and (y) the age
                  between ages 55 and 65 following his attainment of which the
                  annual installment payments shall commence, except as
                  otherwise indicated in Section 5.2(d)(i), below.

                  (b) Director Participants. At the time a Director Participant
         elects to defer Compensation for a Participation Year and in accordance
         with procedures established by the Committee, he shall elect (x) a
         method(s) of distribution for the benefits attributable to his
         Attendance Fee Deferrals, if any, for such Participation Year and (y) a
         method(s) of distribution for the benefits attributable to his Retainer
         Fee Deferrals, if any, for such Participation Year, as follows:

                      (i) the Director Participant shall elect a form(s) of
                  distribution from among those set forth in Section 5.2, below;

                      (ii) if he elects one of the early distribution options
                  set forth in Sections 5.2(a) and 5.2(b) below, the Director
                  Participant shall elect a calendar year during which such
                  early distribution shall be paid, which shall in no event be
                  prior to the fourth calendar year following the Plan Year in
                  which the Participant deferred the Compensation;

                      (iii) if he elects the lump-sum distribution option set
                  forth in Section 5.2(c) below, the Director Participant shall
                  elect the age, up to age 70, following his attainment of which
                  the lump-sum distribution shall be paid, except as otherwise
                  indicated in Section 5.2(c)(ii) below; and

                      (iv) if he elects the annual installment option set forth
                  in Section 5.2(d) below, the Director Participant shall elect
                  (x) whether such Annual Installment Payments shall be
                  distributed over a 5, 10 or 15 year term, and (y) the age, up
                  to age 70, following his attainment of which the annual
                  installment payments shall commence, except as otherwise
                  indicated in Section 5.2(d)(ii), below.

                                      A-4
<PAGE>

                  (c) Failure to Elect Method of Distribution. If a Participant
         fails to make an election as to the manner in which Compensation
         deferred in a particular Participation Year shall be distributed,
         benefits attributable to such deferred Compensation shall be
         distributed in the form of a lump-sum distribution as soon as
         administratively practicable following the Participant's termination of
         Employment.

         5.2 Optional Forms of Distribution. Pursuant to Section 5.1, a
Participant may elect that the amounts of Compensation deferred on his behalf
pursuant to this Program A in each Participation Year be paid in one or more of
the following methods:

                  (a) Complete Early Distribution. The Participant may elect to
         receive an early lump-sum distribution in cash equal to 100% of his
         Deferral Account balance at the time of the distribution that is
         attributable to the amounts of Compensation deferred to which such
         election applies, and such early distribution shall be paid on or as
         soon as administratively practicable after the January 1 of the year
         elected by the Participant pursuant to Section 5.1(a)(ii) or
         5.1(b)(ii), as applicable.

                  (b) Partial Early Distribution. The Participant may elect to
         receive an early lump-sum distribution equal to 50% of his Deferral
         Account balance at the time of the distribution that is attributable to
         the amounts of Compensation deferred to which such election applies,
         and such early distribution shall be paid on or as soon as
         administratively practicable after the January 1 of the year elected by
         the Participant pursuant to Section 5.1(a)(ii) or 5.1(b)(ii), as
         applicable. If the Participant elects this partial early distribution
         option, he must elect an additional method of distribution for the
         remaining benefits attributable to his deferrals for that Participation
         Year.

                  (c) Lump-Sum Distribution. The Participant may elect to
         receive a single lump-sum distribution equal to his Deferral Account
         balance at the time of the distribution that is attributable to the
         amounts of Compensation deferred to which such election applies. Any
         such lump-sum distribution shall be paid as follows:

                      (i) a lump-sum distribution to an Employee Participant
                  shall be paid on or as soon as administratively practicable
                  after the January 1 following the later of (A) the
                  commencement of the calendar year selected by the Employee
                  Participant pursuant to Section 5.1(a)(iii), or (B) the
                  Employee Participant's termination of Employment.

                      (ii) a lump-sum distribution to a Director Participant
                  shall commence on or as soon as administratively practicable
                  after the July 1 following the later of (A) the commencement
                  of the calendar year selected by the Director Participant
                  pursuant to Section 5.1(b)(iii), or (B) the Director
                  Participant's termination of Employment.

                  (d) Annual Installment Payments. The Participant may elect to
         receive Annual Installment Payments over a term of 5, 10, or 15 years.
         Amounts remaining unpaid shall be subject to adjustment for costs
         pursuant to Section 3.5 of the Plan and

                                      A-5
<PAGE>

         deemed investment performance pursuant to Section 4.2. Any such Annual
         Installment Payments shall commence as follows:

                      (i) Annual Installment Payments to an Employee Participant
                  shall commence on or as soon as administratively practicable
                  after the January 1 following the later of (A) the Employee
                  Participant's attainment of the commencement age selected by
                  him pursuant to Section 5.1(a)(iv), or (B) the Employee
                  Participant's termination of Employment.

                      (ii) Annual Installment Payments to a Director Participant
                  shall commence on or as soon as administratively practicable
                  after the July 1 following the later of (A) the Director
                  Participant's attainment of the commencement age selected by
                  him pursuant to Section 5.1(b)(iv), but not prior to the end
                  of the Participation year in which the attributable
                  Compensation was deferred, or (B) the Director Participant's
                  termination of Employment.

         At the request of the Participant, or in the event of his death his
         Beneficiary, and in the sole discretion of the Committee, any such
         annual installment payments may be commuted to a lump-sum payment or
         may be paid over a shorter period of time.

         5.3 Distribution Upon Early Termination. Notwithstanding anything in
this Article V to the contrary, if an Employee Participant's Employment is
terminated for any reason prior to his attainment of age 55, any distribution
election made by the Participant pursuant to Section 5.1 that was not previously
effectuated shall be disregarded, and the Participant's Deferral Account balance
will be distributed to him in the form of a lump-sum as soon as administratively
practicable following his termination of Employment.

         5.4 Early Withdrawal With Penalty. Notwithstanding the provisions of
this Article V, the Plan or any applicable distribution election to the
contrary, a Participant may elect, in accordance with procedures established by
the Committee, to receive a lump-sum payment equal to the sum of the entire
balance(s) in his Deferral Account, 1985 Plan Deferral Account (if any), and
1989 Plan Deferral Account (if any) at any time prior to the date(s) otherwise
designated for the distribution of such Account(s). Such payment shall be made
as soon as practicable following the date as of which the Participant requests
such payment. The Committee shall impose a penalty for such early payment, in an
amount equal to 10% of the Account balance(s) to be distributed, and such
penalty shall be deducted from the distribution and forfeited by the
Participant. Immediately upon receipt of any such early withdrawal payment, the
Participant shall be suspended from further participation in Program A for the
remainder of the Participation Year in which such early withdrawal is made.

                                      A-6
<PAGE>

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    PROGRAM B
                          SAVINGS RESTORATION BENEFITS

                                   ARTICLE I
                                   DEFINITIONS

                  This Program B is part of the Reliant Resources, Inc. Deferral
Plan (the "Plan"), and all capitalized terms defined therein shall have the same
meaning when used in this Program B. In addition, each term below shall have the
meaning assigned thereto for all purposes of this Program B unless the context
requires a different construction.

                  "MATCHED CONTRIBUTION" means an amount deferred by a
Participant as a Pre-Tax Matched Contribution and/or an After-Tax Matched
Contribution under the Savings Plan.

                  "SAVINGS RESTORATION BENEFIT" means the Employer contributions
made to a Savings Restoration Account on behalf of a Participant in the
applicable Plan Year pursuant to Section 3.1.

                  All section references used in this Program B refer to the
applicable section in this Program B except where otherwise noted.

                                   ARTICLE II
                                  PARTICIPATION

         2.1 Eligibility. An Employee shall be entitled to a Savings Restoration
Benefit for each Plan Year (i) in which the Employee is a highly-compensated
Employee, (ii) in which the Participant makes the maximum Matched Contribution
permitted under the Savings Plan for the coinciding Savings Plan Year and (iii)
during which the Employer Matching Contributions or Annual Profit Sharing
Contributions made by the Employer under the Savings Plan are limited due to the
limitations under Code Section 401(a)(17) or the limitations under Code Section
415.

                                  ARTICLE III
                              RESTORATION BENEFITS

         3.1 Amount of Savings Restoration Benefit. The Savings Restoration
Benefit credited on behalf of a Participant under this Program B for each Plan
Year shall be equal to the difference between (i) the aggregate amount of
Employer Matching Contributions and Annual Profit Sharing Contributions which
would have been allocated in respect of the Participant under the Savings Plan
for the Savings Plan Year that coincides with such Plan Year if the Participant
had made the maximum Matched Contribution to the Savings Plan without regard to
the limitations imposed by Code Section 401(a)(17) and the limitations imposed
by Code Section

                                      B-1
<PAGE>

415; and (ii) the aggregate amount of Employer Matching Contributions and Annual
Profit Sharing Contributions actually allocated in respect of the Participant
for such Savings Plan Year.

                                   ARTICLE IV
                             INVESTMENT OF ACCOUNTS

         4.1 Crediting of Accounts. A Savings Restoration Account shall be
established for each Participant who is credited with a Savings Restoration
Benefit under this Program B, unless a Saving Restoration Account has previously
been established for that Participant pursuant to Program D. Savings Restoration
Benefits shall be credited to a Participant's Savings Restoration Account (i)
with respect to restored Employer Matching Contributions, as soon as
administratively practicable after the close of each payroll period for which
the Participant is entitled to restored Employer Matching Contributions pursuant
to Section 3.1 and (ii) with respect to restored Annual Profit Sharing
Contributions, no later than 90 days following the end of the Plan Year to which
such contributions relate.

         4.2 Deemed Investment. All Savings Restoration Accounts shall be
Participant-Directed Accounts such that the amounts contributed thereto are
deemed to be invested in accordance with the provisions of Section 3.2(a) of the
Plan.

                                   ARTICLE V
                                  DISTRIBUTIONS

         5.1 Distribution Elections.

                  (a) Prior Election Applies. If, prior to becoming eligible for
         a Savings Restoration Benefit, a Participant made a Rollover
         Distribution Election, then such election shall apply to his Savings
         Restoration Account.

                  (b) Election Upon Becoming Eligible. If a Participant has not
         made a Rollover Distribution Election, then upon becoming eligible for
         a Savings Restoration Benefit the Participant shall, in accordance with
         procedures established by the Committee, elect a method of distribution
         for his Savings Restoration Account, if any, from among the following
         options:

                      (i) Lump-Sum Distribution. The Participant may elect to
                  receive a single lump-sum distribution equal to the vested
                  balance in his Savings Restoration Account as of the date of
                  distribution in the form of a lump-sum distribution. Any such
                  lump-sum payment shall be made as soon as administratively
                  practicable following the date of the Participant's
                  termination of Employment, and any additional contributions
                  made on behalf of the Participant following such payment shall
                  be distributed to him as soon as administratively practicable
                  after the crediting of such additional contributions to the
                  Participant's Savings Restoration Account.

                      (ii) Annual Installment Payments. The Participant may
                  elect to receive the vested balance in his Savings Restoration
                  Account in the form of Annual

                                      B-2
<PAGE>

                  Installment Payments over a term of 5, 10 or 15 years. Any
                  such Annual Installment Payments shall commence on or as soon
                  as administratively practicable after the January 1 following
                  the Participant's termination of Employment, and amounts
                  remaining unpaid shall continue to be subject to adjustment
                  for costs pursuant to Section 3.5 of the Plan and deemed
                  investment performance pursuant to Section 4.2. At the request
                  of the Participant or Beneficiary and in the sole discretion
                  of the Committee, any such Annual Installment Payments may be
                  commuted to a lump-sum payment or may be paid over a shorter
                  period of time.

                  (c) Failure to Elect Method of Distribution. If a Participant
         fails to make an election as to the manner in which his Savings
         Restoration Account shall be distributed pursuant to this Section 5.1,
         the vested balance in his Savings Restoration Account shall be
         distributed in the form of a lump-sum distribution at the time and in
         the manner described in Section 5.1(b)(i).

         5.2 Distribution Upon Termination of Employment.

                  (a) $50,000 or Less. Upon a Participant's termination of
         Employment, if the combined balance of the Participant's Savings
         Restoration Account and BRP Account does not exceed $50,000, then
         notwithstanding anything herein to the contrary, the Participant, or in
         the event of his death his Beneficiary, shall receive the vested
         balance in such Participant's Savings Restoration Account as of the
         date of distribution in the form of a lump-sum distribution at the time
         and in the manner described in Section 5.1(b)(i). Any unvested amounts
         in the Participant's Savings Restoration Account as of the date of his
         termination of Employment shall be forfeited in their entirety.

                  (b) More Than $50,000. Upon a Participant's termination of
         Employment, if the combined balance of the Participant's Savings
         Restoration Account and BRP Account exceeds $50,000, then the
         Participant, or in the event of his death his Beneficiary, shall
         receive the vested balance in such Participant's Savings Restoration
         Account as of the date of distribution in accordance with the
         Participant's distribution election made pursuant to Section 5.1. Any
         unvested amounts in the Participant's Savings Restoration Account as of
         the date of his termination of Employment shall be forfeited in their
         entirety.

         5.3 Distribution Upon Disability. If a Participant satisfies the
   definition of "disability" under the long-term disability plan of the Company
   and commences to receive disability benefits thereunder, notwithstanding his
   continued Employment such Participant shall be entitled to receive the vested
   balance in his Savings Restoration Account in accordance with Section 5.2 as
   if the Participant's Employment was terminated on the date of the disability.
   The determination of whether a Participant has become "disabled" under the
   long-term disability plan of the Company by such disability plan's
   administrator shall be final and binding on all parties concerned.

                                      B-3
<PAGE>

         5.4 Vesting. A Participant shall become vested in his Savings
   Restoration Account at the same time that he becomes vested in his Employer
   Matching Contributions and Annual Profit Sharing Contributions under the
   Savings Plan. However, a Participant (and his Beneficiary) shall have no
   right to his Savings Restoration Account if the Committee determines that the
   Participant engaged in a willful, deliberate or gross act of commission or
   omission which is injurious to the finances or reputation of the Company or
   any of its Affiliates.

                                      B-4
<PAGE>
                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    PROGRAM C
                          BENEFIT RESTORATION BENEFITS

                                    ARTICLE I
                                   DEFINITIONS

                  This Program C is part of the Reliant Resources Inc. Deferral
Plan (the "Plan"), and all capitalized terms defined therein shall have the same
meaning when used in this Program C. In addition, each term below shall have the
meaning assigned thereto for all purposes of this Program C unless the context
requires a different construction.

                  "REI RETIREMENT PLAN" means the Reliant Energy, Incorporated
Retirement Plan, as amended and restated effective January 1, 1999, and as
thereafter amended.

                  "RESTORATION PLAN" means the applicable of the Reliant Energy,
Incorporated Benefit Restoration Plan, as amended and restated and as in effect
from time to time, or the Reliant Resources, Inc. Benefit Restoration Plan, as
in effect from time to time.

                  "RETIREMENT PLAN RESTORATION BENEFIT" means the benefit to
which a Participant is entitled pursuant to Section 3.1.

                  All section references used in this Program C refer to the
applicable section in this Program C except where otherwise noted.

                                   ARTICLE II
                                  PARTICIPATION

         2.1 Eligibility. An Employee with an accrued benefit under the
Restoration Plan immediately preceding the Distribution Date shall be eligible
to participate in this Program C as of the Distribution Date.

                                  ARTICLE III
                              RESTORATION BENEFITS

         3.1 Retirement Plan Restoration Benefit. When a Participant's
retirement benefit commences or a death benefit payable with respect to a
Participant commences under the REI 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 REI
Retirement Plan without regard to the limitations imposed by Code Section 415
and the limitations imposed by Code Section 401(a)(17) over the amount of the
retirement benefit or death benefit actually payable under the REI Retirement
Plan, which excess is referred to herein

                                      C-1
<PAGE>

as the "Retirement Plan Restoration Benefit." A Participant's Retirement Plan
Restoration Benefit will be distributed to him in accordance with Article IV.

                                   ARTICLE IV
                                  DISTRIBUTIONS

         4.1 Distribution. The distribution of a Participant's Retirement Plan
Restoration Benefit shall be made or shall commence, as applicable, upon the
Participant's commencement of benefits under the REI Retirement Plan as follows:

                  (a) Annuity Distribution. If the Participant's benefit under
         the REI Retirement Plan is to be paid in the form of an annuity
         distribution, then the Participant's Retirement Plan Restoration
         Benefit shall be paid at such time and in such manner as the
         Participant's REI Retirement Plan benefit is payable pursuant to the
         terms of the REI Retirement Plan.

                  (b) Other Distribution Options. If the Participant's benefit
         under the REI Retirement Plan is to be paid in the form of a lump-sum
         distribution, then the Participant's Retirement Plan Restoration
         Benefit shall be distributed in one of the following forms in
         accordance with an election made by the Participant and filed with the
         Committee prior to the Effective Date:

                           (i) Lump-Sum Distribution: an actuarially equivalent
                  lump-sum distribution, as determined on the date of
                  distribution in accordance with the actuarial assumptions then
                  in use by the REI Retirement Plan, to be paid at such time as
                  the Participant's REI Retirement Plan benefit is payable
                  pursuant to the terms of the REI Retirement Plan; or

                           (ii) Rollover Distribution: the credit of an
                  actuarially equivalent lump-sum, as determined on the date of
                  such credit in accordance with the actuarial assumptions then
                  in use by the REI Retirement Plan, at the time the Participant
                  commences benefits under the REI Retirement Plan to a separate
                  BRP Account that is established and maintained pursuant to
                  this Program C on behalf of the Participant. No additional
                  contributions to the Participant's BRP Account shall be
                  allowed. The Participant's BRP Account shall be distributed in
                  accordance with the following:

                           (A) Combined Benefit of $50,000 or Less. Upon a
                           Participant's termination of Employment, if the
                           combined balance of the Participant's Savings
                           Restoration Account and BRP Account does not exceed
                           $50,000, then the Participant, or in the event of his
                           death his Beneficiary, shall receive the balance in
                           such Participant's BRP Account as of the date of
                           distribution in the form of a lump-sum distribution.
                           Any such lump-sum payment shall be made as soon as
                           administratively practicable following the date of
                           the Participant's termination of Employment.

                           (B) Combined Benefit of More Than $50,000. Upon a
                           Participant's termination of Employment, if the
                           combined balance of the Participant's

                                      C-2
<PAGE>

                           Savings Restoration Account and BRP Account exceeds
                           $50,000, then the Participant, or in the event of his
                           death his Beneficiary, shall receive the balance in
                           such Participant's BRP Account in one of the
                           following forms in accordance with the Participant's
                           Rollover Distribution Election made prior to the
                           Effective Date:

                                    (I) Lump-Sum Distribution: a single lump-sum
                                    distribution, which shall be made as soon as
                                    administratively practicable following the
                                    date of the Participant's termination of
                                    Employment; or,

                                    (II) Annual Installment Payments: Annual
                                    Installment Payments over a term of 5, 10 or
                                    15 years. Any such Annual Installment
                                    Payments shall commence on or as soon as
                                    administratively practicable after the
                                    January 1 following the Participant's
                                    termination of Employment, and amounts
                                    remaining unpaid shall continue to be
                                    subject to adjustment for costs pursuant to
                                    Section 3.5 of the Plan and deemed
                                    investment performance pursuant to Section
                                    4.2. At the request of the Participant or
                                    Beneficiary and in the sole discretion of
                                    the Committee, any such Annual Installment
                                    Payments may be commuted to a lump-sum
                                    payment or may be paid over a shorter period
                                    of time.

                           (C) Distribution Upon Disability. If a Participant
                           satisfies the definition of "disability" under the
                           long-term disability plan of the Company and
                           commences to receive disability benefits thereunder,
                           notwithstanding his continued Employment such
                           Participant shall be entitled to receive the balance
                           in his BRP Account in accordance with Section
                           4.1(b)(ii)(A) or 4.1(b)(ii)(B), as applicable, as if
                           the Participant's Employment was terminated on the
                           date of the disability. The determination of whether
                           a Participant has become "disabled" under the
                           long-term disability plan of the Company by such
                           disability plan's administrator shall be final and
                           binding on all parties concerned.

                           (iii) Failure to Elect Method of Distribution. If a
                  Participant has not made an election as required in this
                  Section 4.1(b), his Retirement Plan Restoration Benefit shall
                  be distributed in the form of a lump-sum distribution at the
                  time and in the manner described in Section 4.1(b)(i).

         4.2 Deemed Investment. Any BRP Account established pursuant to Section
4.1(b)(ii) shall be a Participant-Directed Account such that the amounts
contributed thereto are deemed to be invested in accordance with the provisions
of Section 3.2(a) of the Plan.

                                      C-3
<PAGE>

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    PROGRAM D
                    TRANSFERRED SAVINGS RESTORATION BENEFITS

                                    ARTICLE I
                                   DEFINITIONS

                  This Program D is part of the Reliant Resources Inc. Deferral
Plan (the "Plan"), and all capitalized terms defined therein shall have the same
meaning when used in this Program D. In addition, each term below shall have the
meaning assigned thereto for all purposes of this Program D unless the context
requires a different construction.

                  "NORAM ACCOUNT" means an account established pursuant to
Section 4.1 of the Prior Plan for each former participant in the NorAm Energy
Corp. Restoration of Accounts Plan to reflect his balance in such plan
immediately prior to January 1, 1999, plus the interest accrued thereon.

                  "NORAM ELECTION" means the election, if any, made by a
Participant pursuant to the terms and conditions of the Prior Plan and filed
with the Committee prior to the Effective Date indicating the Participant's
desire to transfer his NorAm Account balance to the Plan as of the Distribution
Date.

                  "PRIOR PLAN" means the Reliant Energy, Incorporated Savings
Restoration Plan, as amended and restated effective January 1, 1999.

                  All section references used in this Program D refer to the
applicable section in this Program D except where otherwise noted.

                                   ARTICLE II
                                  PARTICIPATION

         2.1 Eligibility. An Employee with an accrued benefit under the Prior
Plan immediately preceding the Distribution Date shall automatically be eligible
to participate in this Program D as of the Distribution Date. However, an
Employee whose only benefit under the Prior Plan is a NorAm Account shall be
eligible to participate in this Program D only if he made the NorAm Election.

                                      D-1
<PAGE>

                                  ARTICLE III
                            ACCOUNTS AND INVESTMENTS

         3.1 Establishment of Account. A Savings Restoration Account shall be
established on behalf of each Participant who is credited with a benefit under
this Program D, unless a Savings Restoration Account has previously been
established for that Participant pursuant to Program B.

         3.2 Crediting of Benefits. Each Participant's Savings Restoration
Account shall automatically be credited with the lump-sum value of the
Participant's accrued benefit under the Prior Plan (excluding amounts in the
Participant's NorAm Account unless such Participant made the NorAm Election) for
periods ending on or before December 31, 2001, as calculated in accordance with
Section 4.1 of the Prior Plan.

         3.3 Deemed Investment. Each Savings Restoration Account shall be a
Participant-Directed Account such that the amounts contributed thereto are
deemed to be invested in accordance with the provisions of Section 3.2(a) of the
Plan.

                                   ARTICLE IV
                                  DISTRIBUTIONS

         4.1 Distribution Upon Termination of Employment. The distribution of a
Participant's Savings Restoration Account shall be made or shall commence, as
applicable, upon the Participant's termination of Employment as follows:

                  (a) Combined Benefit of $50,000 or Less. Upon a Participant's
         termination of Employment, if the combined balance of the Participant's
         Savings Restoration Account and BRP Account does not exceed $50,000,
         then the Participant, or in the event of his death his Beneficiary,
         shall receive the balance in such Participant's Savings Restoration
         Account as of the date of distribution in the form of a lump-sum
         distribution. Any such lump-sum payment shall be made as soon as
         administratively practicable following the date of the Participant's
         termination of Employment.

                  (b) Combined Benefit of More Than $50,000. Upon a
         Participant's termination of Employment, if the combined balance of the
         Participant's Savings Restoration Account and BRP Account exceeds
         $50,000, then the Participant, or in the event of his death his
         Beneficiary, shall receive the balance in such Participant's Savings
         Restoration Account in one of the following forms in accordance with
         the Participant's Rollover Distribution Election made prior to the
         Effective Date:

                           (i) Lump-Sum Distribution: a single lump-sum
                  distribution, which shall be made as soon as administratively
                  practicable following the date of the Participant's
                  termination of Employment; or,

                           (ii) Annual Installment Payments: Annual Installment
                  Payments over a term of 5, 10 or 15 years. Any such Annual
                  Installment Payments shall commence on or as soon as
                  administratively practicable after the January 1

                                      D-2
<PAGE>

                  following the Participant's termination of Employment, and
                  amounts remaining unpaid shall continue to be subject to
                  adjustment for costs pursuant to Section 3.5 of the Plan and
                  deemed investment performance pursuant to Section 3.3. At the
                  request of the Participant or Beneficiary and in the sole
                  discretion of the Committee, any such Annual Installment
                  Payments may be commuted to a lump-sum payment or may be paid
                  over a shorter period of time.

                           (iii) Failure to Elect Method of Distribution. If a
                  Participant has not made an election as required in this
                  Section 4.1(b), his Savings Restoration Account shall be
                  distributed in the form of a lump-sum distribution at the time
                  and in the manner described in Section 4.1(b)(i).

         4.2 Distribution Upon Disability. If a Participant satisfies the
definition of "disability" under the long-term disability plan of the Company
and commences to receive disability benefits thereunder, notwithstanding his
continued Employment such Participant shall be entitled to receive the vested
balance in his Savings Restoration Account in accordance with Section 4.1 as if
the Participant's Employment was terminated on the date of the disability. The
determination of whether a Participant has become "disabled" under the long-term
disability plan of the Company by such disability plan's administrator shall be
final and binding on all parties concerned.

                                      D-3
<PAGE>

                             RELIANT RESOURCES, INC.

                                  DEFERRAL PLAN

                   (As Established Effective January 1, 2002)

                                    PROGRAM E
                   TRANSFERRED DEFERRED COMPENSATION BENEFITS

                                    ARTICLE I
                                   DEFINITIONS

                  This Program E is part of the Reliant Resources Inc. Deferral
Plan (the "Plan"), and all capitalized terms defined therein shall have the same
meaning when used in this Program E. In addition, each term below shall have the
meaning assigned thereto for all purposes of this Program E unless the context
requires a different construction.

                  "EARLY RETIREMENT DATE" means with respect to an Employee the
first day of the month coincident with or next following his 60th birthday or,
with respect to a distribution from a 1989 Plan Deferral Account, an earlier age
as may be authorized by the Committee in its sole discretion; 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.

                  "1985 PLAN" means the Reliant Energy, Incorporated 1985
Deferred Compensation Plan, as amended and restated effective December 1, 2000.

                  "1989 PLAN" means the Reliant Energy, Incorporated 1989
Deferred Compensation Plan, as amended and restated effective December 1, 2000.

                  "NORMAL RETIREMENT DATE" means with respect to an Employee the
first day of the month coincident with or next following his 65th birthday, and
means with respect to a Director the first day of the month coincident with or
next following his 70th birthday.

                  "TRANSFER DATE" means the date on or as soon as
administratively practicable after January 31, 2002, on which Participants'
benefits are transferred from the 1985 Plan and the 1989 Plan to the Plan.

                  "TRANSFER ELECTION" means an election, if any, made by a
Participant pursuant to the terms and conditions of the 1985 Plan or the 1989
Plan, as applicable, and filed with the Committee prior to the Effective Date
indicating the Participant's desire to transfer his benefits under such plan to
the Plan as of the Transfer Date.

                  All section references used in this Program E refer to the
applicable section in this Program E except where otherwise noted.

                                      E-1
<PAGE>

                                   ARTICLE II
                                  PARTICIPATION

         2.1 Eligibility. An Employee or Director with an accrued benefit under
the 1985 Plan and/or the 1989 Plan immediately prior to the Transfer Date shall
be eligible to participate in this Program E as of the Transfer Date if such
Employee made a Transfer Election.

                                  ARTICLE III
                            ACCOUNTS AND INVESTMENTS

         3.1 Transfers to 1985 Plan Deferral Accounts. A separate 1985 Plan
Deferral Account shall be established and maintained on behalf of each
Participant who makes a Transfer Election with respect to his accrued benefits
under the 1985 Plan. On the Transfer Date, the 1985 Plan Deferral Account of
each such Participant shall be credited with the value of the Participant's
accrued benefit under the 1985 Plan as of the Transfer Date as determined using
the interest rate applicable to the Participant under the terms of the 1985
Plan. No additional contributions to the Participant's 1985 Plan Deferral
Account shall be allowed.

         3.2 Transfers of 1989 Plan Deferral Accounts. A separate 1989 Plan
Deferral Account shall be established and maintained on behalf of each
Participant who makes a Transfer Election with respect to his accrued benefits
under the 1989 Plan. On the Transfer Date, the 1989 Plan Deferral Account of
each such Participant shall be credited with the value of the Participant's
accrued benefit under the 1989 Plan as of the Transfer Date as determined using
the applicable Interest Crediting Rate, as such term is defined in the 1989
Plan. No additional contributions to the Participant's 1989 Plan Deferral
Account shall be allowed.

         3.3 Deemed Investment. Each 1985 Plan Deferral Account and each 1989
Plan Deferral Account established pursuant to this Article III shall be a
Participant-Directed Account such that the amounts contributed thereto are
deemed to be invested in accordance with the provisions of Section 3.2(a) of the
Plan.

                                   ARTICLE IV
                                  DISTRIBUTIONS

         4.1 Distribution of 1985 Plan Deferral Accounts. The distribution of a
Participant's 1985 Plan Deferral Account shall be made or shall commence, as
applicable, as follows:

                  (a) Annual Installment Payments. If the Participant's
         Employment is terminated on or after his Early Retirement Date, he
         shall receive the remaining balance in his 1985 Plan Deferral Account
         in 15 Annual Installment Payments commencing the month following the
         later of the month in which his Employment is terminated or the month
         of his Normal Retirement Date. At the discretion of the Committee, such
         commencement date may be accelerated, but in no event shall such
         benefits commence prior to the Participant's termination of Employment.
         Amounts remaining unpaid shall be subject to adjustment for costs
         pursuant to Section 3.5 of the Plan and deemed investment performance
         pursuant to Section 3.3. At the request of the Participant, or in the
         event of his death, his Beneficiary, and in the sole discretion of the
         Committee, any such Annual

                                      E-2
<PAGE>

         Installment Payments may be commuted to a lump-sum payment or may be
         paid over a shorter period of time.

                  (b) Early Termination. If a Participant's Employment is
         terminated for any reason other than death or retirement at or after
         his Early Retirement Date, he shall receive the remaining balance in
         his 1985 Plan Deferral Account as a lump-sum distribution on the first
         of the month coincident with or next following the expiration of 90
         days following the date of the Participant's termination of Employment.

                  (c) 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 such disability until his Normal Retirement Date or
         earlier death. The Participant's 1985 Plan Deferral Account shall then
         be distributed in the form of Annual Installment Payments in accordance
         with Section 4.1(a), above, 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.

                  (d) Death.

                           (i) Prior to Commencement of Normal Retirement
                  Distribution. If a Participant dies (A) prior to his Normal
                  Retirement Date and prior to his termination of employment or
                  (B) after his termination of employment after his Early
                  Retirement Date, but prior to the commencement of a Normal
                  Retirement Distribution payable in 15 Annual Installment
                  Payments, the Company shall pay the Participant's 1985 Plan
                  Deferral Account balance in the form of a lump-sum
                  distribution to the Participant's Beneficiary within 90 days
                  following the date of the Participant's death.

                           (ii) Death After Normal Retirement Date. If
                  Participant dies (A) after his Normal Retirement Date but
                  prior to his termination of employment, (B) after his
                  termination of employment, provided the Participant had
                  attained his Normal Retirement Date on or before the date of
                  such termination, or (C) after commencement of a Normal
                  Retirement Distribution in the form of 15 Annual Installment
                  Payments but prior to completion of all such payments, the
                  Company shall make (or continue to make) such payments to the
                  Participant's Beneficiary.

                  (e) Failure to Elect Method of Distribution. If a Participant
         did not make a distribution election under the 1985 Plan, his 1985 Plan
         Deferral Account shall be distributed in the form of a lump-sum
         distribution at the time and in the manner described in Section 4.1(b).

         4.2 Distribution of 1989 Plan Deferral Accounts. The distribution of a
Participant's 1989 Plan Deferral Account shall be made or shall commence, as
applicable, in accordance with the Participant's distribution election(s) under
the 1989 Plan as follows:

                                      E-3
<PAGE>

                  (a) Early Distribution. If the Participant elected to receive
         an early distribution of either 50% or 100% of the benefits
         attributable to compensation deferred in a prior year, then the portion
         of his 1989 Plan Deferral Account to which such election applies shall
         be distributed within 95 days of the beginning of the year selected by
         the Participant.

                  (b) Lump-Sum Distribution. If the Participant's Employment is
         terminated on or after his Early Retirement Date and he elected to
         receive his benefits in a lump-sum, he shall receive the remaining
         balance in his 1989 Plan Deferral Account as a lump-sum distribution in
         the January following the later of his termination of Employment or his
         Normal Retirement Date.

                  (c) Annual Installment Payments. If the Participant's
         Employment is terminated on or after his Early Retirement Date and he
         elected to receive his benefits in Annual Installment Payments, he
         shall receive the remaining balance in his 1989 Plan Deferral Account
         in 15 Annual Installment Payments commencing the month following the
         later of the month in which his Employment is terminated or the month
         of his Normal Retirement Date. At the discretion of the Committee, such
         commencement date may be accelerated, but in no event shall such
         benefits commence prior to the Participant's termination of Employment.
         Amounts remaining unpaid shall be subject to adjustment for costs
         pursuant to Section 3.5 of the Plan and deemed investment performance
         pursuant to Section 3.3. At the request of the Participant, or in the
         event of his death, his Beneficiary, and in the sole discretion of the
         Committee, any such Annual Installment Payments may be commuted to a
         lump-sum payment or may be paid over a shorter period of time.

                  (d) Early Termination. If a Participant's Employment is
         terminated for any reason other than death or retirement at or after
         his Early Retirement Date, he shall receive the remaining balance in
         his 1989 Plan Deferral Account as a lump-sum distribution within 95
         days following the date of his termination of Employment or as soon as
         practicable thereafter.

                  (e) 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 such disability until his Normal Retirement Date or
         earlier death. The Participant's 1989 Plan Deferral Account shall be
         paid in accordance with the Participant's distribution election(s)under
         the 1989 Plan, 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.

                  (f) Death.

                           (i) Prior to Commencement of Normal Retirement
                  Distribution. If a Participant dies (A) prior to his Normal
                  Retirement Date and prior to his termination of employment or
                  (B) after his termination of employment after his

                                      E-4
<PAGE>

                  Early Retirement Date, but prior to the commencement of a
                  Normal Retirement Distribution payable in 15 Annual
                  Installment Payments, the payments otherwise elected by him
                  not theretofore made shall not be made, but the Company shall
                  pay the Participant's 1989 Plan Deferral Account balance in
                  the form of a lump-sum distribution to the Participant's
                  Beneficiary. Any such payments shall be made within
                  approximately 95 days following the date of Participant's
                  death.

                           (ii) Death After Normal Retirement Date. If
                  Participant dies (A) after his Normal Retirement Date but
                  prior to his termination of employment, (B) after his
                  termination of employment, provided the Participant had
                  attained his Normal Retirement Date on or before the date of
                  such termination, or (C) after commencement of a Normal
                  Retirement Distribution in the form of 15 Annual Installment
                  Payments but prior to completion of all such payments, the
                  Company shall make (or continue to make) such payments to the
                  Participant's Beneficiary.

                           (iii) Commutation of Death Benefit. Any death
                  benefits payable in the form of Annual Installment Payments,
                  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.

                  (g) Failure to Elect Method of Distribution. If a Participant
         did not make a distribution election under the 1989 Plan, his 1989 Plan
         Deferral Account shall be distributed in the form of a lump-sum
         distribution at the time and in the manner described in Section 4.2(d).

         4.3 Early Withdrawal With Penalty. Notwithstanding the provisions of
this Article IV, the Plan or any applicable distribution election to the
contrary, a Participant may elect, in accordance with procedures established by
the Committee, to receive a lump-sum payment equal to the sum of the balance(s)
in his Deferral Account (if any), 1985 Plan Deferral Account (if any), and 1989
Plan Deferral Account (if any) at any time prior to the date(s) otherwise
designated for the distribution of such Account(s). Such payment shall be made
as soon as practicable following the date as of which the Participant requests
such payment. The Committee shall impose a penalty for such early payment, in an
amount equal to 10% of the Account balance(s) to be distributed, and such
penalty shall be deducted from the distribution and forfeited by the
Participant.

                                      E-5

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