UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2008
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
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| Texas
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1-31447 |
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74-0694415 |
(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
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1111 Louisiana
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Houston, Texas
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77002 |
(Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (713) 207-1111
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| ITEM 5.02. |
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
Short Term Incentive Plan
On February 20, 2008, the Compensation Committee of the Board of Directors of CenterPoint
Energy, Inc. (the “Company”) determined performance targets and potential payouts for 2008 under the
Company’s short term incentive plan, which provides annual cash awards based on achievement of
specified performance goals. The Compensation Committee increased Mr. McClanahan’s target award
under this plan from 90% of his earnings to 100%, Mr. Kelley’s from 60% to 70% and the other named
executive officers from 60% to 75% for 2008. The performance metrics for 2008 are consistent with
the previously disclosed terms of the plan in all material respects.
Long-Term Incentive Plan
On February 20, 2008, the Compensation Committee authorized awards of performance shares and
stock with performance goals for the 2008 to 2010 performance cycle under the Company’s long term
incentive plan. The terms of the awards for the 2008 to 2010 performance cycle are consistent with
the previously disclosed terms of the plan in all material respects, except for the addition of
modified cash flow as a third performance metric for performance share awards. Metrics related to
total shareholder return and operating income remain unchanged. The modified cash flow metric was
added to measure an additional dimension of business performance in the measurement period.
One-third of the performance share payout opportunity for performance share awards for the 2008 to
2010 performance cycle will be based on each of the three performance metrics.
In addition, the Compensation Committee increased the target award under this plan for the
2008 to 2010 performance cycle from 125% of his earnings to 135% for each of Messrs. Whitlock and
Rozzell, from 100% to 135% for Mr. Standish and from 90% to 110% for Mr. Kelley.
The Compensation Committee also approved new forms of agreement under the Company’s long-term
incentive plan for performance share awards and stock awards with performance goals to bring the
forms into compliance with the requirements of Internal Revenue Code Section 409A and the
regulations promulgated thereunder (“Section 409A”). Forms of agreement for performance share awards and stock
awards with performance goals are attached hereto as Exhibits 10.1 and 10.2, respectively and are
incorporated by reference herein.
Deferred Compensation Plan
On February 21, 2008, the Company entered into the CenterPoint Energy 2005 Deferred
Compensation Plan (the “Plan”), under which the Company’s eligible key employees and non-employee
directors may elect to defer each year a percentage of up to 100% of salary and/or short term
incentive compensation, in the case of employees, and director fees, in the case of directors. The
Plan replaces the CenterPoint Energy, Inc. Deferred Compensation Plan
in effect as of December 31, 2007 (the “Prior Plan”) and was adopted to comply with the
requirements of Section 409A. The Plan is effective as of January 1, 2008. Other than as necessary
to comply with Section 409A, the benefits and terms of the Plan are substantially the same as the
benefits and terms of the Prior Plan. Accordingly, the Plan is an “unfunded” plan for state and
federal tax purposes, and interest under the Plan accrues on deferrals at a rate adjusted annually
equal to the average yield during the year of the Moody’s Long-Term Corporate Bond Index plus two
percent.
In addition, the Prior Plan has been amended to rename the plan the CenterPoint Energy 1989
Deferred Compensation Plan and to freeze the Prior Plan with respect to new participation and
contributions as of December 31, 2007. Effective January 1, 2008, obligations with respect to
compensation deferred under the Prior Plan after December 31, 2004, along with all associated
earnings, were transferred to the Plan and will be maintained and distributed under the Plan.
Accordingly, effective after December 31, 2007, only benefits that are exempt from Section 409A
will be maintained under, and paid from, the Prior Plan, in accordance with the terms of the Prior
Plan as in effect on October 3, 2004.