CENTERPOINT ENERGY INC — Proxy Solicitation & Information Statement 2010

Mar 12, 2010

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant þ Filed by a Party other than the Registrant o Check the appropriate box: o Preliminary Proxy Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) þ Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Under §240.14a-12

CenterPoint Energy, Inc.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þ	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)	Title of each class of securities to which transaction applies:
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(3)	Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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o	Fee paid previously with preliminary materials.
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offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.

(1)	Amount previously paid:
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Folio /Folio

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CenterPoint Energy, Inc.

Notice of Annual Meeting of Shareholders to be held on April 22, 2010 and Proxy Statement

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TOC

Notice of Annual Meeting of Shareholders
PROXY STATEMENT
Voting Information	1
Election of Directors (Item 1)	2
Information About Directors	2
Board Leadership	12
The Board’s Role in Risk Oversight	13
Board Organization and Committees; Other
Governance Provisions	14
Compensation of Directors	16
Director Compensation Table	19
Stock Ownership	21
Compensation Discussion and Analysis	23
Executive Compensation Tables	34
Equity Compensation Plan Information	57
Report of the Compensation Committee	58
Report of the Audit Committee	59
Principal Accounting Firm Fees	60
Audit Committee Policies and Procedures for
Preapproval of Audit and Non-Audit Services	60
Ratification of Appointment of Independent
Auditors (Item 2)	61
General Information	62
Shareholder Proposals for 2011 Annual Meeting	62
Director Nominations for 2011 Annual Meeting	62
Section 16(a) Beneficial Ownership Reporting
Compliance	63
Householding of Annual Meeting Materials	63
Annual Report to Shareholders	63

/TOC

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Notice of Annual Meeting of Shareholders

Dear Shareholder:

You are cordially invited to attend the 2010 annual meeting of shareholders of CenterPoint Energy, Inc. This is your notice for the meeting.

TIME AND DATE	9:00 a.m. Central Time on Thursday, April 22, 2010
PLACE	The auditorium at 1111 Louisiana, Houston, Texas
ITEMS OF BUSINESS	• elect the nine nominees named in the Proxy Statement
as directors to hold office until the 2011 annual meeting;
	• ratify the appointment of Deloitte &
Touche LLP as our independent auditors for 2010; and
	• conduct other business if properly raised.
RECORD DATE	Shareholders of record at the close of business on
February 22, 2010 are entitled to vote.
PROXY VOTING	Each share entitles the holder to one vote. You may vote either
by attending the meeting or by proxy. For specific voting
information, please see “Voting Information” beginning
on page 1 of the Proxy Statement that follows. Even if
you plan to attend the meeting, please sign, date and return the
enclosed proxy card or submit your proxy using the Internet or
telephone procedures described on the proxy card.

Sincerely,

Scott E. Rozzell

Executive Vice President,

General Counsel and

Corporate Secretary

Dated and first mailed

to shareholders

on March 12, 2010

Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholder Meeting to be Held April 22, 2010

The proxy statement and annual report to shareholders are available at: http://materials.proxyvote.com/15189T

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CENTERPOINT ENERGY, INC. 1111 Louisiana Houston, Texas 77002 (713) 207-1111

For deliveries by U.S. Postal Service:

P.O. Box 4567 Houston, Texas 77210-4567

Proxy Statement

Voting Information

| Who may vote? | Shareholders recorded in our stock register on February 22,
2010 may vote at the meeting. As of that date, there were
393,082,659 shares of our common stock outstanding. |
| --- | --- |
| How many votes do I have? | You have one vote for each share of our common stock you owned
as of the record date for the meeting. |
| How do I vote? | Your vote is important. You may vote in person at the meeting or
by proxy. We recommend you vote by proxy even if you plan to
attend the meeting. You may always change your vote at the
meeting if you are a holder of record or have a proxy from the
record holder. Giving us your proxy means that you authorize us
to vote your shares at the meeting in the manner you indicated
on your proxy card. You may also provide your proxy using the
Internet or telephone procedures described on the proxy card.
You may vote for or against each director and each of the other
proposals or abstain from voting. If you give us your proxy but
do not specify how to vote, we will vote your shares in
accordance with the Board’s recommendations. |
| What are the Board’s recommendations? | The Board’s recommendations are set forth together with the
description of each item in this proxy statement. In summary,
the Board and, with respect to the ratification of the
independent auditors, the Audit Committee, recommends a vote as
follows: |
| | • FOR election of the nine nominees named in
the Proxy Statement as directors to hold office until the 2011
annual meeting of shareholders; |
| | • FOR ratification of the appointment of
Deloitte & Touche LLP as our independent auditors for
2010. |
| | If any other matters properly come before the annual meeting, we
will vote the shares in accordance with our best judgment and
discretion, unless you mark the proxy card to withhold that
authority. |
| What if I change my mind after I have voted? | You may revoke your proxy before it is voted by submitting a new
proxy card with a later date, by voting in person at the
meeting, or by giving written notice to Mr. Scott E.
Rozzell, Corporate Secretary, at CenterPoint Energy’s
address shown above. |
| Do I need a ticket to attend the meeting? | Proof of identification and proof of ownership of our common
stock are needed for you to be admitted to the meeting. If you
plan to attend the meeting and your shares are held by banks,
brokers, stock plans or other holders of record (in “street
name”), you will need to provide |

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| | proof of ownership. Examples of proof of ownership include a
recent brokerage statement or letter from your broker or bank. |
| --- | --- |
| What constitutes a quorum? | In order to carry on the business of the meeting, we must have a
quorum. This means at least a majority of the shares of common
stock outstanding as of the record date must be represented at
the meeting, either by proxy or in person. Shares of common
stock owned by CenterPoint Energy are not voted and do not count
for this purpose. |
| | Abstentions and proxies submitted by brokers that do not
indicate a vote because they do not have discretionary authority
and have not received instructions as to how to vote on a
proposal (so-called “broker non-votes”) will be
considered as present for quorum purposes, but not as shares
counted for determining the outcome of the vote on that proposal. |
| | Brokers holding shares must vote according to specific
instructions they receive from the beneficial owners of those
shares. If brokers do not receive specific instructions, brokers
may in some cases vote the shares in their discretion. However,
the New York Stock Exchange precludes brokers from exercising
voting discretion on certain proposals without specific
instructions from the beneficial owner. Importantly, a recent
amendment to an NYSE rule now expressly prohibits brokers
holding shares in “street name” for their beneficial
holder clients from voting in uncontested director elections on
behalf of the clients without receiving specific voting
instructions from those clients. Under NYSE rules, brokers will
have discretion to vote only on Item 2 (ratification of the
appointment of independent auditors). Brokers cannot vote on
Item 1 (the election of directors) without instructions
from the beneficial owners. If you do not instruct your broker
how to vote on the election of directors, your broker will not
vote for you. |
| What vote is required to approve each of the proposals? | Under our bylaws, directors are elected by a majority of the
votes cast at the meeting. This means that the number of shares
voted “for” a director must exceed the number of votes
cast “against” that director. Abstentions and broker
non-votes will be ignored. For additional information on the
election of directors, see “Election of
Directors — Information About Directors —
Majority Voting in Director Elections.” |
| | Ratification of the appointment of independent auditors requires
the favorable vote of a majority of the shares of common stock
voted for or against the matter. |
| | Abstentions and broker non-votes do not affect the outcome of
the ratification of the appointment of independent auditors. |

ELECTION OF DIRECTORS (ITEM 1)

Information About Directors In 2008, our Articles of Incorporation were amended to phase out the classified structure of our Board of Directors. Pursuant to that amendment, at each annual meeting of shareholders beginning in 2009, new directors and directors whose terms are expiring are elected to serve for one year terms. Directors who were elected to longer terms prior to the 2009 annual meeting will serve until the end of those terms. The term of office of the directors in Class I expired at the 2009 meeting.

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| | The term of office of the Class II directors expires at
this year’s annual meeting, and the term of Class III
directors will expire in 2011. |
| --- | --- |
| | The directors to be elected at this meeting will be elected to a
one-year term expiring at the annual meeting in 2011. |
| | If any nominee becomes unavailable for election, your Board of
Directors can name a substitute nominee, and proxies will be
voted for the substitute nominee pursuant to discretionary
authority, unless withheld. |
| | Unless otherwise indicated or the context otherwise requires,
when we refer to periods prior to September 1, 2002,
CenterPoint Energy should be understood to mean or include the
public companies that were its predecessors. |
| | Under our bylaws, a director must step down from the Board at
the annual meeting occurring in the year in which he or she
reaches age 73, unless the Board determines that the member
has special skill, experience or distinction having value to
CenterPoint Energy and not readily available or transferable. In
February 2009, the Board made such a determination as to current
directors Thomas F. Madison, Chairman of our Compensation
Committee, which will allow him to complete his current term
ending in 2011, and Michael E. Shannon, who is retiring at this
year’s annual meeting. |
| | Listed below are the biographies of each director nominee
followed by the biographies of continuing directors. The
biographies include information regarding each individual’s
service as a director of the Company, business experience,
director positions at public companies held currently or at any
time during the last five years, and the experiences,
qualifications, attributes or skills that caused the Governance
Committee and the Board to determine that the person should
serve as a director for the Company. |
| Nominees for Directors — Term Expiring 2011 | At the meeting, nine directors are to be elected to each serve a
one-year term expiring on the date of the annual meeting of
shareholders to be held in 2011. The nominees for election in
2010 are listed below. |
| | Donald R. Campbell , age 69, has been a director
since 2005. Prior to his retirement in September 2000, he was
the Chief Financial Officer of Sanders Morris Harris Group,
Inc., a NASDAQ-listed regional investment banking firm. He
served as a director of Sanders Morris Harris from 1999 until
May 2004. Mr. Campbell previously served as a director of
Texas Genco Holdings, Inc., an NYSE-listed former subsidiary of
the Company, and as the chairman of its audit committee, from
March 2003 until December 2004. He also previously served as
Vice Chairman of the board of directors and Chief Financial
Officer of Pinnacle Global Group, a Houston based financial
services firm from 1998 to 1999. From 1990 until 1999, he was
employed by TEI, Inc., holding a variety of positions including,
Chief Executive Officer, Chief Financial Officer and director.
The Board determined that Mr. Campbell should be nominated
for election as a director due to his experience as a senior
corporate executive, his financial and accounting expertise, and
his experience as director of several |

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| corporations, including service on the Board and Audit Committee
Chairman of both Texas Genco Holdings, Inc. and the Company. |
| --- |
| Milton Carroll , age 59, has been a director since
1992 and Chairman since September 2002. Mr. Carroll is
Chairman and founder of Instrument Products, Inc., an oil-tool
manufacturing company in Houston, Texas. He has served as a
director of Halliburton Company since 2006 and Western Gas
Holdings, LLC, general partner of Western Gas Partners, LP,
since 2008. He has served as a director of Healthcare Service
Corporation since 1998 and as its chairman since 2002.
Mr. Carroll previously served as a director of EGL, Inc.
from 2003 to 2007, DCP Midstream GP, LLC, general partner of DCP
Midstream Partners, LP from 2005 to 2006, Devon Energy
Corporation from 2003 to 2005 and Texas Eastern Products
Pipeline Company, LLC, general partner of TEPPCO Partners, L.P.
from 1997 to 2005. The Board determined that Mr. Carroll
should be nominated for election as a director due to his
extensive knowledge of the Company and its operations gained in
over 17 years of service as a director of the Company, its
predecessors and affiliates. The Board values
Mr. Carroll’s knowledge of the oil and natural gas
industries, board leadership skills and corporate governance
expertise. |
| Derrill Cody , age 71, has been a director since
2003. Mr. Cody has been of counsel to the law firm of
Tomlinson & O’Connell in Oklahoma City, Oklahoma
since December 2005. Prior to that, he was of counsel to the law
firm of McKinney & Stringer, P.C. in Oklahoma
City, Oklahoma from 1990. From 2005 to 2007, Mr. Cody
served as a director of DCP Midstream GP, LLC, the general
partner of DCP Midstream Partners, LP. He also previously served
from 1989 to 2005 as a director of Texas Eastern Products
Pipeline Company, LLC, general partner of TEPPCO Partners, L.P.
and from 1987 to 1990 as Executive Vice President of Texas
Eastern Corporation and as Chief Executive Officer of Texas
Eastern Gas Pipeline Company. The Board determined that
Mr. Cody should be nominated for election as a director due
to his substantial experience in the oil and gas industry as a
lawyer, senior corporate executive and director in a variety of
major energy-related corporations. The Board benefits from
Mr. Cody’s expertise gained through service as a
senior executive officer leading interstate natural gas pipeline
companies. |
| Michael P. Johnson , age 62, has been a director
since July 2008. Mr. Johnson is President and Chief
Executive Officer of J&A Group, LLC, a management and
business consulting company. He served from 2002 until his
retirement in March 2008 as Senior Vice President and Chief
Administrative Officer of The Williams Companies, Inc., a
publicly held natural gas producer, processor and transporter.
Prior to joining the Williams Companies, he served in various
executive capacities with Amoco Corporation, including vice
president of human resources. He has served as a director of
Patriot Coal Corporation since 2008, Buffalo Wild Wings, Inc.
since 2006, and QuikTrip Corporation, a private company, since
2001. He also serves on the Oklahoma Advisory Board of Health
Care Service Corporation and on the boards of several charitable
organizations and foundations, including the Tiger Woods
Foundation. The Board determined that |

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| Mr. Johnson should be nominated for election as a director
due to his extensive management and leadership experience as a
senior executive officer of major international companies. The
Board values Mr. Johnson’s knowledge of the oil and
gas industry and expertise in corporate governance and human
resources matters. |
| --- |
| David M. McClanahan , age 60, has served as a
director and as President and Chief Executive Officer of
CenterPoint Energy since 2002. He served as Vice Chairman of our
predecessor company from October 2000 to September 2002 and as
President and Chief Operating Officer of its Delivery Group from
1999 to September 2002. Previously, he served as President and
Chief Operating Officer of our predecessor company’s
Houston Lighting & Power Company division from 1997 to
1999. He has served in various executive officer capacities with
us since 1986. He currently serves on the boards of the Edison
Electric Institute and the American Gas Association. The Board
determined that Mr. McClanahan should be nominated for
election as a director due to his extensive knowledge of the
industry and the Company, its operations and people, gained in
38 years of service with the Company and its predecessors
in positions of increasing responsibility. The Board benefits
from Mr. McClanahan’s financial and accounting
expertise and industry leadership. |
| Robert T. O’Connell , age 71, has been a
director since 2004. From 1997 to 2003, he served as a director
of RWD Technologies, Inc. and as its Chief Financial Officer
from August 2000 to July 2001, and Senior Vice President
Strategic Business Planning from August 1997 to July 2001.
Mr. O’Connell served as Senior Vice President and
Chief Staff Officer of EMC Corporation from 1995 to 1997.
Between 1965 and 1994, Mr. O’Connell held various
positions in General Motors Corporation, including Chief
Financial Officer of General Motors Corporation from 1988 to
1992 and Chairman and Chief Executive Officer of General Motors
Acceptance Corporation from 1992 to 1994. He has served as a
director of Gulfmark Offshore, Inc. since 2006 and as a
Governor-appointed member of the Boston Finance Commission since
2003. The Board determined that Mr. O’Connell should
be nominated for election as a director due to his financial
expertise, experience as a senior executive and director of
complex corporate organizations, and strategic business
management expertise. |
| Susan O. Rheney , age 50, has been a director since
July 2008. Ms. Rheney is a private investor. From 2002
until March 2010, she served as a director of Genesis Energy,
Inc., the general partner of Genesis Energy, LP, a publicly
traded limited partnership. From 2003 to 2005, she was a
director of Cenveo, Inc. and served as chairman of the board
from January to August 2005. She also served until 2001 as a
principal with The Sterling Group, a private financial and
investment organization. The Board determined that
Ms. Rheney should be nominated for election as a director
due to her financial management and accounting expertise and
experience as a director of a mid-stream oil and gas company.
The Board benefits from her experience implementing strategic
and operational initiatives at a variety of firms. |
| R. A. Walker , age 53, has not previously served as a
director of CenterPoint Energy. Mr. Walker is currently
President and Chief |

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| | Operating Officer of Anadarko Petroleum Corporation, having
joined the company in 2005 as Senior Vice President and Chief
Financial Officer. He is a director of Temple-Inland, Inc. and
Western Gas Holdings, LLC, a subsidiary of Anadarko and general
partner to Western Gas Partners, LP., having previously served
as the Chairman of the Board of that company until 2009. Prior
to joining Anadarko, Mr. Walker was a Managing Director for
the Global Energy Group of UBS Investment Bank from 2003 to
2005. He previously served as President, Chief Financial Officer
and a director of 3TEC Energy Corporation from 2000 to 2003. The
board determined that Mr. Walker should be nominated for
election as a director due to his extensive knowledge of the
energy industry, experience as a director of public companies,
merchant banking experience and his financial and executive
management expertise, including experience as a president, chief
operating officer, and chief financial officer. |
| --- | --- |
| | Peter S. Wareing , age 58, has been a director since
2005. Mr. Wareing is a co-founder and partner of the
private equity firm Wareing, Athon & Company and is
involved in a variety of businesses. He is the Chairman of the
Board of Gulf Coast Pre-Stress, Ltd. in Pass Christian,
Mississippi, the Vice Chairman of the Board of Nordic Cold
Storage, LLC, in Atlanta, Georgia and an officer and director of
several other privately owned family entities. He also currently
serves as a trustee of Texas Children’s Hospital in
Houston. The Board determined that Mr. Wareing should be
nominated for election as a director due to his expertise in
financial, business and corporate strategy development matters.
The Board also values his civic leadership and involvement in
the Houston business community. |
| | Your Board of Directors recommends a vote FOR each of the
nominees. |
| | Information about each of the continuing directors is set forth
below. |
| Continuing Class III Directors — Term
Expiring 2011 | O. Holcombe Crosswell , age 69, has been a director
since 1997 and was a director of NorAm Energy Corp. and the
predecessor of a division of that company from 1986 until we
acquired that company in 1997. Mr. Crosswell is President
of Griggs Corporation, a real estate and investment company in
Houston, Texas. He previously served as a director and as
chairman of the Metropolitan Transit Authority of Harris County.
The Board determined that Mr. Crosswell should serve as a
director due to his real estate and investment expertise and his
knowledge and experience of the natural gas and electric
industry gained in over 23 years of service as a director
of the Company and predecessor entities. The Board also benefits
from his involvement in the Houston business community, and
service on civic boards and charitable organizations. |
| | Janiece M. Longoria , age 57, has been a director
since 2005. Ms. Longoria is a partner in the law firm of
Ogden, Gibson, Broocks & Longoria, L.L.P. in Houston,
Texas and has a concentration of experience in commercial and
securities-related litigation and regulatory matters. She has
served as a commissioner of the Port of Houston Authority since
2002 and as a member of The University of Texas |

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| | System Board of Regents since February 2008. She previously
served as the treasurer and a director of the Houston Convention
Center Hotel Corporation from 1999 to 2004. The Board determined
that Ms. Longoria should serve as a director due to her
extensive legal and regulatory expertise, experience serving as
a commissioner or in a similar oversight position on major
governmental and civic organizations. The Board values her
service on boards of charitable organizations and extensive
community involvement. |
| --- | --- |
| | Thomas F. Madison , age 74, has been a director since
2003. He has served as President and Chief Executive Officer of
MLM Partners, a small business consulting and investments
company in Minneapolis, since 1993. He previously served as
President of US West Communications-Markets until December 1992.
He later served as Vice Chairman of Minnesota Mutual Life
Insurance Company until September 1994, Chairman of
Communication Holdings, Inc. until March 1999, and as an
advisory director of one of our natural gas distribution units.
He has served as a director of Valmont Industries, Inc. since
1987, Delaware Group of Funds since 1993, Digital River, Inc.
since 1996, and Rimage Corporation since 2001. In February 2009,
the Board waived for Mr. Madison the mandatory retirement
age under our bylaws to allow him to complete his current term.
The Board determined that Mr. Madison should serve as a
director due to his extensive executive experience, including
his prior service as an executive officer of major corporations,
including as a chief executive officer, his public company board
leadership and his corporate governance expertise. |
| | Sherman M. Wolff , age 69, has been a director since
2007. Prior to his retirement in 2006, he served as executive
vice president and chief operating officer of Health Care
Service Corporation, which provides health and life insurance
products and related services as Blue Cross Blue Shield of
Texas, Illinois, New Mexico and Oklahoma. He held various
positions with that company from 1991 until his retirement,
including service as Chief Financial Officer. He currently
serves as a director of Fort Dearborn Life Insurance
Company, a subsidiary of Health Care Service Corporation. He
previously served as a director of EGL, Inc. from 2006 to 2007.
The Board determined that Mr. Wolff should serve as a
director due to his financial and executive management
expertise, including experience as a chief financial officer and
chief operating officer of a major corporation. |
| Director Nomination Process | In assessing the qualifications of candidates for nomination as
director, the Governance Committee and the Board consider, in
addition to qualifications set forth in our bylaws, each
potential nominee’s |
| | • personal and professional integrity, experience,
reputation and skills; |
| | • ability and willingness to devote the time and
effort necessary to be an effective board member; and |
| | • commitment to act in the best interests of
CenterPoint Energy and its shareholders. |

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| Consideration is also given to the requirements under the
listing standards of the New York Stock Exchange for a majority
of independent directors, as well as qualifications applicable
to membership on Board committees under the listing standards
and various regulations. |
| --- |
| In addition, the Governance Committee and the Board take into
account the desire that the directors possess a broad range of
business experience, diversity, professional skills, geographic
representation and other qualities they consider important in
light of our business plan. The Governance Committee
periodically reviews the overall composition of the Board, the
skills represented by incumbent directors and the need for new
directors to replace retiring directors or to expand the Board.
In seeking new director candidates, the Governance Committee and
the Board consider the skills, expertise and qualities that will
be required to effectively oversee management of the business
and affairs of the Company. The Governance Committee and the
Board also considers the diversity of the Board in terms of the
geographic, gender, age, and ethnic makeup of its members. The
Board evaluates the makeup of its membership in the context of
the Board as a whole, with the objective of recommending a group
that can effectively work together using its diversity of
experience to see that the Company is well-managed and
represents the interests of the Company and its shareholders. |
| Mr. Walker’s nomination was initially recommended by
individual members of the Governance Committee. Mr. Walker
was then interviewed by an executive search firm retained by the
Governance Committee for the purpose of identifying director
candidates. The members of the Governance Committee discussed
Mr. Walker’s background and qualifications and
unanimously recommended to the Board that Mr. Walker be
nominated for election at the annual meeting. |
| Suggestions for potential nominees for director can come to the
Governance Committee from a number of sources, including
incumbent directors, officers, executive search firms and
others. If an executive search firm is engaged for this purpose,
the Governance Committee has sole authority with respect to the
engagement. The Governance Committee will consider director
candidates recommended by shareholders. The extent to which the
Governance Committee dedicates time and resources to the
consideration and evaluation of any potential nominee brought to
its attention depends on the information available to the
Committee about the qualifications and suitability of the
individual, viewed in light of the needs of the Board, and is at
the Committee’s discretion. The Governance Committee and
the Board evaluate the desirability for incumbent directors to
continue on the Board following the expiration of their
respective terms, taking into account their contributions as
Board members and the benefit that results from increasing
insight and experience developed over a period of time. |
| Shareholders may submit the names and other information
regarding individuals they wish to be considered for nomination
as directors by writing to the Corporate Secretary at the
address indicated on the first |

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| | page of this proxy statement. In order to be considered for
nomination by the Board of Directors, submissions of potential
nominees should be made no later than November 15 in the year
prior to the meeting at which the election is to occur. |
| --- | --- |
| Director Independence | The Board of Directors determined that Messrs. Campbell,
Carroll, Cody, Crosswell, Johnson, Madison, O’Connell,
Shannon, Wareing and Wolff and Mses. Longoria and Rheney are
independent, within the meaning of the listing standards for
general independence of the New York Stock Exchange. It is
anticipated that the Board will also determine that
Mr. Walker is independent within the meaning of these
standards upon his election. Under the listing standards, a
majority of our directors must be independent, and the Audit,
Compensation and Governance Committees are each required to be
composed solely of independent directors. The standards for
audit committee membership include additional requirements under
rules of the Securities and Exchange Commission. The Board has
determined that all of the members of these three committees
meet the applicable independence requirements. The listing
standards relating to general independence consist of both a
requirement for a board determination that the director has no
material relationship with the listed company and a listing of
several specific relationships that preclude independence. |
| | As contemplated by New York Stock Exchange Rules then in effect,
the Board adopted categorical standards in 2004 to assist in
making determinations of independence. Under the rules then in
effect, relationships falling within the categorical standards
were not required to be disclosed or separately discussed in the
proxy statement in connection with the Board’s independence
determinations. |
| | The categorical standards cover two types of relationships. The
first type involves relationships of the kind addressed in either |
| | • the rules of the Securities and Exchange Commission
requiring proxy statement disclosure of relationships and
transactions or |
| | • the New York Stock Exchange listing standards
specifying relationships that preclude a determination of
independence. |
| | For those relationships, the categorical standards are met if
the relationship neither requires disclosure nor precludes a
determination of independence under either set of rules. |
| | The second type of relationship is one involving charitable
contributions by CenterPoint Energy to an organization in which
a director is an executive officer. In that situation, the
categorical standards are met if the contributions do not exceed
the greater of $1 million or 2% of CenterPoint
Energy’s gross revenue in any of the last three years. |
| | In making its subjective determination that
Messrs. Campbell, Carroll, Cody, Crosswell, Johnson,
Madison, O’Connell, Shannon, Wareing and Wolff and Mses.
Longoria and Rheney are independent, the Board reviewed and
discussed additional information provided by the directors and
the Company with regard to each of the directors business and
personal activities as they related to the Company and Company
management. The Board considered the transactions in the context
of the New York Stock Exchange’s objective listing
standards, the |

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| | categorical standards noted above and the additional standards
established for members of audit, compensation and governance
committees. |
| --- | --- |
| | In connection with its determination as to the independence of
Mr. Carroll, the Board has considered that Mr. Carroll
receives additional director compensation for serving as
non-executive Chairman of the Board. This position involves a
substantial commitment of time over and above regular service as
a Board member and member of committees of the Board. The Board
also considered a relationship in which a company on whose board
Mr. Carroll serves as a non-employee director and
non-executive chairman provides services to CenterPoint Energy.
Mr. Carroll had no role in initiating the relationship with
this service provider. Because the business relationship is of a
nature and magnitude not requiring proxy statement disclosure
under Securities and Exchange Commission rules, it falls within
the categorical standards described above. The Board has
concluded that these circumstances and relationships do not
adversely affect Mr. Carroll’s ability and willingness
to act in the best interests of CenterPoint Energy and its
shareholders or otherwise compromise his independence. |
| | Although the Board will not make its determination as to
Mr. Walker’s independence until his election, the
Board considered ordinary course transactions between the
Company and Anadarko Petroleum Corporation, for which
Mr. Walker serves as President and Chief Operating Officer.
During 2009 subsidiaries of CenterPoint Energy purchased natural
gas from and provided natural gas related transportation
services to subsidiaries of Anadarko totaling approximately
$45 million. These payments represent approximately
one-half of one percent of the consolidated gross revenues for
2009 for each of the Company and Anadarko. Additionally, the
Board considered that Company subsidiaries may purchase natural
gas from and provide transportation services to Anadarko in the
future. The Board believes that these transactions and
relationships would not adversely affect Mr. Walker’s
ability or willingness to act in the best interests of the
Company and its shareholders or otherwise compromise his
independence, nor are similar transactions in the future
expected to adversely affect Mr. Walker’s
independence. These transactions were on standard terms and
conditions, and Mr. Walker did not have any involvement in
negotiating the terms of the purchases nor interest in the
transactions. |
| Code of Ethics and Ethics and Compliance Code | We have a Code of Ethics for our Chief Executive Officer and
Senior Financial Officers, consisting of our Chief Financial
Officer, Chief Accounting Officer, Treasurer and Controller. We
will post information regarding any amendments to, or waivers
of, the provisions of this code applicable to these officers at
the website location referred to below under “Website
Availability of Documents.” |
| | We also have an Ethics and Compliance Code applicable to
directors, officers and employees. This code addresses, among
other things, the requirements for a code of business conduct
and ethics required under New York Stock Exchange listing
standards. Any waivers of this code |

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| | for executive officers or directors may be made only by the
Board of Directors or a committee of the Board and must be
promptly disclosed to shareholders. In 2009, no waivers of our
Code of Ethics or our Ethics and Compliance Code were granted. |
| --- | --- |
| Conflicts of Interest and Related Party Transactions | The Governance Committee will address and resolve any issues
with respect to related-party transactions and conflicts of
interest involving our executive officers, directors or other
“related persons” under the applicable disclosure
rules of the Securities and Exchange Commission. |
| | Our Ethics and Compliance Code provides that all directors,
executive officers and other employees should avoid actual
conflicts of interest as well as the appearance of a conflict of
interest, and our Code of Ethics for Chief Executive Officer and
Senior Financial Officers similarly obligates the employees
covered by that Code of Ethics (our Chief Executive Officer,
Chief Financial Officer, Chief Accounting Officer, Treasurer and
Assistant Controller) to handle actual or apparent conflicts of
interest between personal and professional relationships in an
ethical manner. Under our Ethics and Compliance Code, prior
approval is required for any significant financial interest with
suppliers, partners, subcontractors, or competitors. Any
questionable situation is required to be disclosed to the Law
Department or an employee’s direct manager. Pursuant to our
Corporate Governance Guidelines and the Governance Committee
Charter, the Board has delegated to the Governance Committee the
responsibility for reviewing and resolving any issues with
respect to related party transactions and conflicts of interests
involving executive officers or directors of the Company or
other related persons under the applicable rules of the
Securities and Exchange Commission. The Company’s Corporate
Governance Guidelines require that (i) each director shall
promptly disclose to the Chairman any potential conflicts of
interest he or she may have with respect to any matter involving
the Company and, if appropriate, recuse himself or herself from
any discussions or decisions on any of these matters, and
(ii) the Chairman shall promptly advise the Governance
Committee of any potential conflicts of interest he or she may
have with respect to any matter involving the Company and, if
appropriate, recuse himself or herself from any discussions or
decisions on any of these matters. |
| | The Office of the Corporate Secretary periodically gathers
information from Directors and executive officers regarding
matters involving potential conflicts of interest or related
party transactions and provides that information to the
Governance Committee for review. Directors and executive
officers are also required to inform the Company immediately of
any changes in the information provided concerning related party
transactions that such director or executive officer or other
related person was, or is proposed to be, a participant. In each
case, the standard applied in approving the transaction is the
best interests of CenterPoint Energy and its shareholders. |
| | There were no related-party transactions in 2009 that were
required to be reported pursuant to the applicable disclosure
rules of the Securities and Exchange Commission. |

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| Majority Voting in Director Elections | Our amended and restated bylaws include a majority voting
standard in uncontested director elections. This standard
applies to the election of directors at this meeting. To be
elected, a nominee must receive more votes cast “for”
that nominee’s election than votes cast “against”
that nominee’s election. In contested elections, the voting
standard will be a plurality of votes cast. Under our bylaws,
contested elections occur where, as of a date that is
14 days in advance of the date we file our definitive proxy
statement with the Securities and Exchange Commission
(regardless of whether or not thereafter revised or
supplemented), the number of nominees exceeds the number of
directors to be elected. |
| --- | --- |
| | Our Corporate Governance Guidelines include director resignation
procedures. In brief, these procedures provide that: |
| | • Incumbent director nominees must submit irrevocable
resignations that become effective upon and only in the event
that (1) the nominee fails to receive the required vote for
election to the Board at the next meeting of shareholders at
which such nominee faces re-election and (2) the Board
accepts such resignation; |
| | • Each director candidate who is not an incumbent
director must agree to submit such an irrevocable resignation
upon election or appointment as a director; |
| | • Upon the failure of any nominee to receive the
required vote, the Governance Committee makes a recommendation
to the Board on whether to accept or reject the resignation; |
| | • The Board takes action with respect to the
resignation and publicly discloses its decision and the reasons
therefor within 90 days from the date of the certification
of the election results; and |
| | • The resignation, if accepted, will be effective at
the time specified by the Board when it determines to accept the
resignation, which effective time may be deferred until a
replacement director is identified and appointed to the Board. |
| | Our amended and restated bylaws and our Corporate Governance
Guidelines can be found on our website at www.centerpointenergy.com . |
| Board Leadership | The offices of Chairman of the Board and Chief Executive Officer
are currently separate and have been separate since the
formation of the Company as a new holding company in 2002. The
Board believes that the separation of the two roles provides, at
present, the best balance of these important responsibilities
with the Chairman directing board operations and leading the
board in its oversight of management, and the Chief Executive
Officer focusing on developing and implementing the
Company’s board-approved strategic vision and managing its
day-to-day business. The Board believes that the independent
board chairman helps provide an opportunity for the Board
members to provide more direct input to management in shaping
the organization and strategy of the Company and strengthening
the Board’s independent oversight of management. |

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| The Board’s Role in Risk Oversight |
| --- |
| The Board believes that the administration of its risk oversight
function has not affected its leadership structure. In reviewing
the Company’s compensation program, the Compensation
Committee has made an assessment of whether compensation
policies and practices create risks that are reasonably likely
to have a material adverse effect on the Company and has
concluded that they do not create such risks as presently
constituted. |

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Board Organization and Committees; Other Governance Provisions Your Board of Directors oversees the management of the business and affairs of our Company. The Board appoints committees to help carry out its duties. Last year, the Board met seven times and the committees met a total of 22 times. Each director attended more than 90% of the meetings of the Board of Directors and the committees on which he or she served. Mr. McClanahan does not serve on any committees. The following table sets forth the committees of the Board and their members as of the date of this proxy statement, as well as the number of meetings each committee held during 2009:

	Audit	Compensation	Finance	Governance	Strategic — Planning
Director	Committee	Committee	Committee	Committee	Committee
Donald R. Campbell	+	•		•
Milton Carroll				+	•
Derrill Cody		•		•	+
O. Holcombe Crosswell				•	•
Michael P. Johnson		•		•
Janiece M. Longoria	•		•		•
Thomas F. Madison		+		•
Robert T. O’Connell	•		+
Susan O. Rheney	•		•
Michael E. Shannon	•		•		•
Peter S. Wareing		•	•		•
Sherman M. Wolff	•	•	•
Number of Meetings Held in 2009	5	4	5	4	4

(+) Denotes Chair.

| Audit Committee | The primary responsibilities of the Audit Committee are to
assist the Board in fulfilling its oversight responsibility for
the integrity of our financial statements, the qualifications,
independence and performance of our independent auditors, the
performance of our internal audit function, compliance with
legal and regulatory requirements and our systems of disclosure
controls and internal controls, and our system of enterprise
risk management. The Audit Committee has sole responsibility to
appoint and, where appropriate, replace our independent auditors
and to approve all audit engagement fees and terms. The Audit
Committee’s report is on page 59. |
| --- | --- |
| | The Board of Directors has determined that Mr. Campbell is
an audit committee financial expert within the meaning of the
regulations of the Securities and Exchange Commission. |
| Compensation Committee | The primary responsibilities of the Compensation Committee are
to oversee compensation for our senior officers, including
salary and short term and long term incentive awards, administer
incentive compensation plans, evaluate Chief Executive Officer
performance and review management succession planning and
development. For |

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| | information concerning policies and procedures relating to the
consideration and determination of executive compensation,
including the role of the Compensation Committee, see
“Compensation Discussion and Analysis” beginning on
page 23 and for the report of the Compensation Committee
concerning the Compensation Discussion and Analysis, see
“Report of the Compensation Committee” on page 58. |
| --- | --- |
| Finance Committee | The primary responsibilities of the Finance Committee are to
assist the Board in fulfilling its oversight responsibility with
respect to the financial affairs of CenterPoint Energy and its
subsidiaries. The Finance Committee reviews our financial
objectives and policies, financing strategy and requirements,
capital structure, and liquidity and related financial risk. The
Finance Committee also reviews and makes recommendations to the
Board regarding our dividend policy and actions, approves
specific debt and equity offerings and other capital
transactions within limits set by the Board, and reviews the
capital structure, financing plans and credit exposures of our
major subsidiaries. |
| Governance Committee | The primary responsibilities of the Governance Committee are to
identify, evaluate and recommend, for the approval of the entire
Board of Directors, potential nominees for election to the
Board; recommend membership on standing committees of the Board;
address and resolve any issues with respect to related-party
transactions and conflicts of interest involving our executive
officers, directors or other “related persons”;
oversee annual evaluations of the Board and management; review
and recommend fee levels and other elements of compensation for
non-employee directors; evaluate whether to accept a conditional
resignation of an incumbent director who does not receive a
majority vote in favor of election in an uncontested election;
and establish, periodically review and recommend to the Board
any changes to our Corporate Governance Guidelines. For
information concerning policies and procedures relating to the
consideration and determination of compensation of our
directors, including the role of the Governance Committee, see
“Compensation of Directors” beginning on page 16. |
| Strategic Planning Committee | The primary responsibilities of the Strategic Planning Committee
are to assist the Board in fulfilling its responsibilities to
monitor the development of and ultimately approve the
Company’s strategies and strategic plan. |
| Executive Sessions of the Board | Our Corporate Governance Guidelines provide that the members of
the Board of Directors who are not officers of CenterPoint
Energy will hold regular executive sessions without management
participation. If at any time the non-management directors
include one or more directors who do not meet the listing
standards of the New York Stock Exchange for general
independence, the Board must hold an executive session at least
once each year including only the non-management directors who
are also independent. An executive session is currently
scheduled in conjunction with each regular meeting of the Board
of Directors. Currently, the Chairman of the Board
(Mr. Carroll) presides at these sessions. |
| Shareholder Communications with Directors | Interested parties who wish to make concerns known to the
non-management directors may communicate directly with the
non-management directors by making a submission in writing to
“Board of Directors (independent members)” in care of
our Corporate Secretary |

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| | at the address indicated on the first page of this proxy
statement. Aside from this procedure for communications with the
non-management directors, the entire Board of Directors will
receive communications in writing from shareholders. Any such
communications should be addressed to the Board of Directors in
care of the Corporate Secretary at the same address. |
| --- | --- |
| Attendance at Meetings of Shareholders | Directors are expected to attend annual meetings of
shareholders. All directors attended the 2009 annual meeting. |
| Website Availability of Documents | CenterPoint Energy’s Annual Report on Form 10-K, Corporate Governance Guidelines, the charters of the Audit
Committee, Finance Committee, Compensation Committee, Governance
Committee, and Strategic Planning Committee, the Code of Ethics
and the Ethics and Compliance Code can be found on our website
at www.centerpointenergy.com . Unless specifically stated
herein, documents and information on our website are not
incorporated by reference in this proxy statement. |
| Compensation of Directors | The Governance Committee of the Board oversees fee levels and
other elements of compensation for CenterPoint Energy’s
non-employee directors, including the Company’s
non-executive Chairman of the Board. The Governance Committee
retained Frederic W. Cook & Co., Inc. in 2008 to make
an updated assessment of director compensation levels. |
| | Directors receive a cash retainer and fees for attending
meetings of the Board of Directors and each of its committees
and are eligible to receive annual grants of our common stock
under the Stock Plan for Outside Directors. Participation in a
plan providing split-dollar life insurance coverage has been
discontinued for directors commencing service after 2000.
Certain directors who commenced service prior to 2004 also
participated in a plan providing compensation after termination
of service as a director. Benefit accruals under this plan
ceased effective December 31, 2008. |
| Retainer and Meeting Fees | In 2009, each non-employee director received an annual retainer
of $50,000. The current level of the cash retainer paid to
directors was set in June 2004. Fees for attending meetings of
the Board and each of its committees are set at $2,000 per
meeting. In 2008, the supplemental retainers received by the
Chairmen of the Audit Committee and Compensation Committee were
increased to $15,000 and $10,000, respectively. The Chairmen of
each of the Finance, Governance and Strategic Planning
committees receive a supplemental annual retainer of $5,000 for
service as committee chairman. Fees earned or paid in 2009 are
set forth in the Fees Earned or Paid in Cash column of the
Director Compensation Table on page 19. |
| Chairman’s Supplemental Retainer and Special Stock
Awards | Mr. Carroll receives the compensation payable to other
non-employee directors and a supplemental monthly retainer of
$30,000 for serving as the non-executive Chairman of the Board.
Mr. Carroll’s supplemental monthly retainer was last
adjusted in October 2004. This position involves a substantial
commitment of time over and above regular service as a Board
member and member of committees of the Board. In addition, in
connection with his agreement in 2007 to continue to serve in
the position of Chairman through May 2010, Mr. Carroll
received 25,000 shares of CenterPoint Energy common |

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| | stock in May 2007, 2008, and 2009. In conjunction with his
duties as non-executive Chairman of the Board, we also provide
Mr. Carroll office space and administrative assistant
services. |
| --- | --- |
| Stock Plan for Outside Directors | Under the Stock Plan for Outside Directors, each non-employee
director may be granted an annual stock award of up to
5,000 shares of CenterPoint Energy common stock. The number
of shares of common stock granted to non-employee directors is
set by the Board annually. Each non-employee director serving as
of May 1, 2009 received an award of 4,000 shares of
common stock. Grants made under this plan vest in one-third
increments on the first, second and third anniversaries of the
grant date. Those shares fully vest in the event of the
director’s death or upon a change in control (defined in
substantially the same manner as in the change in control
agreements for certain officers described in “Potential
Payments upon Change in Control or Termination” beginning
on page 51). Upon vesting of the shares, each director
receives, in addition to the shares, a cash payment equal to the
amount of dividend equivalents earned since the date of grant.
If a director’s service on the Board is terminated for any
reason other than death or a change in control, the director
forfeits all rights to the unvested portion of the outstanding
grants as of the termination date. If the director is
70 years of age or older when he or she ceases to serve on
the Board of Directors, the director’s termination date is
deemed to be December 31st of the year in which he or she
leaves the Board. In addition to the annual grant, a
non-employee director may receive a one-time grant of up to
5,000 shares of common stock upon commencing service as a
director, subject to the same vesting schedule described above.
No awards have been made under the provision allowing one-time
initial grants. The aggregate number of outstanding unvested
stock awards is set forth in footnote (2) to the Director
Compensation Table. |
| Deferred Compensation Plan | We maintain a deferred compensation plan that permits directors
to elect each year to defer all or part of their annual
retainer, supplemental annual retainer for committee
chairmanship and meeting fees. The supplemental monthly retainer
for service as Chairman of the Board is not eligible for
deferral under this plan. Interest 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. Directors participating in this plan may elect at the
time of deferral to receive distributions of their deferred
compensation and interest in three ways: |
| | • an early distribution of either 50% or 100% of their
account balance in any year that is at least four years from the
year of deferral or, if earlier, the year in which they attain
age 70; |
| | • a lump sum distribution payable in the year after
they reach age 70 or upon leaving the Board of Directors,
whichever is later; or |
| | • 15 annual installments beginning on the first of the
month coincident with or next following age 70 or upon
leaving the Board of Directors, whichever is later. |
| | The deferred compensation plan is a nonqualified, unfunded plan,
and the directors are general, unsecured creditors of
CenterPoint Energy. No fund or other assets of CenterPoint
Energy have been set aside or segregated to pay benefits under
the plan. Refer to “Rabbi Trust” |

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| | under “Potential Payments upon Change in Control or
Termination” on page 56 for funding of the deferred
compensation plan upon a change in control. |
| --- | --- |
| | The amounts deferred by directors in 2009 are set forth in
footnote (1) to the Director Compensation Table. The above
market earnings are reported in the Change in Pension Value and
Nonqualified Deferred Compensation Earnings column of the
Director Compensation Table. |
| Outside Director Benefits Plan | Non-employee directors elected to the Board before 2004
participated in our outside director benefits plan.
Participating directors accrued a cash amount equal to the
annual retainer (excluding any supplemental retainer) in effect
when the director terminates service multiplied by the number of
full years of service of the director. A full year of service
means completion of service as a non-employee director from one
annual meeting of shareholders to the following annual meeting
of shareholders. Directors elected prior to January 1,
2004, which include Messrs. Carroll, Cody, Crosswell,
Madison and Shannon, participated in this plan. In accordance
with the transition rules under Section 409A of the
Internal Revenue Code, the Board amended the plan to freeze
future benefit accruals under the plan effective
December 31, 2008 and to provide commencement of payments
as of February 1, 2009. Each active director participating
in this plan was given the opportunity to make a one-time
irrevocable election by December 31, 2008 as to the payment
form. Each active director elected a lump sum payment;
therefore, all accrued benefits under the plan were paid to them
on February 1, 2009. Please refer to footnote (4) to the
Director Compensation Table. |
| Executive Life Insurance Plan | Non-employee directors who were elected to the Board before 2001
(Messrs. Carroll and Crosswell) participate in an executive
life insurance plan. This plan provides endorsement split-dollar
life insurance with a death benefit equal to six times the
director’s annual retainer, excluding any supplemental
retainer, with coverage continuing after the director’s
retirement from the Board. Due to limits on the increases in the
death benefit under this plan, the death benefit for the current
eligible directors remains at $180,000. The annual premiums on
the policies are payable solely by CenterPoint Energy, and in
accordance with the Internal Revenue Code, the directors must
recognize imputed income based upon the insurer’s one-year
term rates. The director is also provided a tax gross-up payment for all taxes due on the imputed income associated with
the policy value so that coverage is provided at no cost to the
director. The applicable amounts are set forth in footnote
(5) to the All Other Compensation column of the Director
Compensation Table. Upon the death of the insured, the
director’s beneficiaries will receive the specified death
benefit, and we will receive any balance of the insurance
proceeds. |

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Director Compensation Table

The table below and the narrative in the footnotes provide compensation amounts for our non-employee directors for 2009 as well as additional material information in connection with such amounts. For summary information on the provision of the plans and programs, refer to the “Compensation of Directors” discussion immediately preceding this table.

					Change in
					Pension Value
					and
	Fees				Nonqualified
	Earned			Non-Equity	Deferred
	or Paid	Stock		Incentive Plan	Compensation	All Other
	in Cash	Awards	Option Awards	Compensation	Earnings	Compensation	Total
Name	($) (1)	($) (2)	($) (3)	($) (3)	($) (4)	($) (5)	($)
Donald R. Campbell	100,000	43,200	—	—	—	—	143,200
Milton Carroll	445,000	296,200	—	—	26,967	4,602	772,769
Derrill Cody	93,000	43,200	—	—	—	—	136,200
O. Holcombe Crosswell	80,000	43,200	—	—	38,416	10,548	172,164
Michael P. Johnson	80,000	43,200	—	—	—	—	123,200
Janiece M. Longoria	90,000	43,200	—	—	8,293	—	141,493
Thomas F. Madison	90,000	43,200	—	—	—	—	133,200
Robert T. O’Connell	89,000	43,200	—	—	—	—	132,200
Susan O. Rheney	84,000	43,200	—	—	—	—	127,200
Michael E. Shannon	97,000	43,200	—	—	—	—	140,200
Peter S. Wareing	90,000	43,200	—	—	11,576	—	144,776
Sherman M. Wolff	92,000	43,200	—	—	7,819	—	143,019

| (1) | Includes annual retainer, supplemental retainer, Board meeting
fees and Committee meeting fees for each director as more fully
explained under “Compensation of Directors —
Retainer and Meeting Fees” and “Compensation of
Directors — Chairman’s Supplemental Retainer and
Special Stock Awards” above. |
| --- | --- |
| | Mr. Carroll’s supplemental retainer includes a
supplemental monthly retainer of $30,000 for service as Chairman
of the Board and a $5,000 supplemental annual retainer for
serving as Chairman of the Governance Committee.
Mr. Carroll elected to defer his annual retainer and his
supplemental annual retainer for serving as Chairman of the
Governance Committee during 2009. |
| | Mr. Campbell received a supplemental annual retainer for
serving as Chairman of the Audit Committee beginning in April
2009. Mr. Shannon received a supplemental annual retainer
for serving as Chairman of the Audit Committee in 2009 until
Mr. Campbell’s appointment in April.
Messrs. Cody, Madison and O’Connell each received a
supplemental annual retainer for serving as Chairman of the
Strategic Planning, Compensation, and Finance Committees,
respectively. Messrs. Wareing and Wolff elected to defer
their meeting fees and annual retainer, and Mr. Crosswell
elected to defer his annual retainer during 2009. |
| (2) | Reported amounts in the table represent the aggregate grant date
fair value of awards computed in accordance with FASB ASC Topic
718 as of the grant date. For purposes of the table above, the
effects of estimated forfeitures are excluded. In May 2009, we
issued Mr. Carroll 25,000 shares of CenterPoint Energy
common stock pursuant to his May 2007 agreement with us. The
value of the shares at issuance was based on the closing price
of our common stock on the New York Stock Exchange Composite
Tape of $10.12 on May 29, 2009. |
| | Upon the recommendation of the Governance Committee, the Board
granted each non-employee director 4,000 shares of common
stock on May 1, 2009 under our Stock Plan for Outside
Directors. The grant date fair value of the awards based on the
average of the high and low market price of our common stock on
the New York Stock Exchange Composite Tape was $10.80. At
December 31, 2009, each of our non-employee directors had
7,999 unvested stock awards, except for (i) Mr. Wolff
who had 6,666 unvested stock awards and
(ii) Ms. Rheney and Mr. Johnson who each had
4,000 unvested stock awards. |

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| (3) | The Board does not grant stock options or non-equity incentive
plan compensation to non-employee directors. |
| --- | --- |
| (4) | Outside director benefits plan. Under the outside
director benefits plan, non-employee directors elected to the
Board before 2004 accrued a cash amount equal to the annual
retainer (excluding any supplemental retainer) in effect when
the director terminates service multiplied by the number of full
years of service as a director. A full year of service means
completion of service from one annual meeting of shareholders to
the following annual meeting. The Board amended the plan to
freeze future benefit accruals under the plan effective
December 31, 2008. In conjunction with the decision to
freeze the director benefits plan, each director was granted a
full year of service from the 2008 annual meeting of
shareholders, as all participating directors would remain until
the 2009 annual meeting of shareholders. The Board also amended
the plan to provide commencement of benefit payments as of
February 1, 2009. Each active director elected a lump sum
payment of his or her benefit actuarially adjusted based on an
interest rate of 4.52%, and all accrued benefits under the plan
were paid to them in February 2009. |
| | The actuarial present value of each director’s benefit as
of December 31, 2009, is a negative amount equivalent to
the distribution received during 2009. The following table sets
forth the number of years of service credited and payments paid
in February 2009 for each director in the plan: |

	Years of	Accrued
	Service	Benefit as of	Payments
Name	Through 2009	December 31, 2009 ($)	During 2009 ($)
Carroll	18		—	456,631
Cody	7		—	269,377
Crosswell	24	(a)	—	737,936
Madison	7		—	269,377
Shannon	7		—	269,377

(a) Mr. Crosswell’s service includes service on the board of directors of NorAm Energy Corp., which we acquired in 1997, and the predecessor of a division of that company.

Deferred compensation plan. In 2009, Messrs. Carroll, Crosswell, Wareing and Wolff and Ms. Longoria accrued above-market earnings on their deferred compensation account balances of $26,967, $38,416, $11,576, $7,819 and $8,293, respectively.

(5) The following table sets forth the premium paid by CenterPoint Energy and the tax gross-up payments made to our directors who participated in the executive life insurance plan in 2009:

Director Compensation — All Other Compensation

Name	Split-Dollar Life — Insurance Premium ($)	Paid Tax — Gross-Up ($)	Total ($)
Carroll	4,288	314	4,602
Crosswell	9,758	790	10,548

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Stock Ownership

The following table shows stock ownership of known beneficial owners of more than 5% of CenterPoint Energy’s common stock, each director or nominee for director, the Chief Executive Officer, the Chief Financial Officer, the three other most highly compensated executive officers, and the executive officers and directors as a group. Information for the executive officers and directors is given as of March 1, 2010 except as otherwise indicated. The directors and officers, individually and as a group, beneficially own less than 1% of CenterPoint Energy’s outstanding common stock. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act, and, except as otherwise indicated, the respective holders have sole voting and investment powers over such shares.

	Number of Shares of
	CenterPoint Energy
Name	Common Stock
Barrow, Hanley, Mewhinney & Strauss, LLC	31,596,633	(1)
2200 Ross Avenue, 31st Floor
Dallas, Texas 75201
Northern Trust Corporation	25,906,507	(2)
50 South LaSalle Street
Chicago, Illinois 60603
Vanguard Windsor Funds — Vanguard Windsor II Fund	24,160,200	(3)
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
BlackRock, Inc.	21,060,499	(4)
40 East 52nd Street
New York, New York 10022
The Vanguard Group, Inc.	19,996,263	(5)
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
Donald R. Campbell	20,001
Milton Carroll	90,001	(6)
Derrill Cody	26,001
O. Holcombe Crosswell	32,096	(7)
C. Gregory Harper	13,628	(8)
Michael P. Johnson	3,200
Janiece M. Longoria	14,670
Thomas F. Madison	18,501
David M. McClanahan	1,153,286	(8)(9)
Robert T. O’Connell	10,001
Susan O. Rheney	2,000
Scott E. Rozzell	430,080	(8)(9)
Michael E. Shannon	18,001
Thomas R. Standish	303,156	(7)(8)(9)
R. A. Walker	—
Peter S. Wareing	80,001	(10)
Gary L. Whitlock	361,821	(8)(9)
Sherman M. Wolff	7,334	(11)
All executive officers and directors as a group (18 persons)	2,583,778

(1) This information is as of December 31, 2009 and is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2010 by Barrow, Hanley, Mewhinney & Strauss, LLC. This represents 8.09% of the outstanding common stock of CenterPoint Energy. The Schedule 13G/A reports sole voting

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| | power for 2,924,420 shares of common stock, shared voting
power for 28,672,213 shares of common stock and sole
dispositive power for 31,596,633 shares of common stock. |
| --- | --- |
| (2) | This information is as of December 31, 2009 and is based on
a Schedule 13G/A filed with the Securities and Exchange
Commission on February 16, 2010 by Northern
Trust Corporation and certain of its subsidiaries. This
represents 6.64% of the outstanding common stock of CenterPoint
Energy. The Schedule 13G/A reports sole voting power for
1,166,698 shares of common stock, shared voting power for
24,727,085 shares of common stock, sole dispositive power
for 3,399,173 shares of common stock and shared dispositive
power for 1,139,781 shares of common stock. CenterPoint
Energy understands that the shares reported include
21,320,436 shares of common stock held as trustee of
CenterPoint Energy’s savings plan which provides for
pass-through voting by plan participants. |
| (3) | This information is as of December 31, 2009 and is based on
a Schedule 13G/A filed with the Securities and Exchange
Commission on February 4, 2010 by Vanguard Windsor
Funds — Vanguard Windsor II Fund. This represents
6.18% of the outstanding common stock of CenterPoint Energy. The
Schedule 13G/A reports sole voting power for
24,160,200 shares of common stock. |
| (4) | This information is as of December 31, 2009 and is based on
a Schedule 13G filed with the Securities and Exchange Commission
on January 29, 2010 by BlackRock, Inc. This represents
5.39% of the outstanding common stock of CenterPoint Energy. The
Schedule 13G reports sole voting power for
21,060,499 shares of common stock, no shared voting power
for shares of common stock and sole dispositive power for
21,060,499 shares of common stock. |
| (5) | This information is as of December 31, 2009 and is based on
a Schedule 13G/A filed with the Securities and Exchange
Commission on February 8, 2010 by The Vanguard Group, Inc.
This represents 5.12% of the outstanding common stock of
CenterPoint Energy. The Schedule 13G/A reports sole voting
power of 624,059 shares of common stock, sole dispositive
power for 19,437,504 shares of common stock and shared
dispositive power of 558,759 shares of common stock. |
| (6) | Includes 60,000 shares held in brokerage margin accounts or
pledged to secure loans. |
| (7) | Includes shares held by spouse. |
| (8) | Includes shares of CenterPoint Energy common stock held under
CenterPoint Energy’s savings plan, for which the
participant has sole voting power (subject to such power being
exercised by the plan’s trustee in the same proportion as
directed shares in the savings plan are voted in the event the
participant does not exercise voting power). |
| (9) | Includes shares covered by CenterPoint Energy stock options that
are exercisable within 60 days of March 1, 2010 as
follows: Mr. McClanahan, 562,241 shares;
Mr. Rozzell, 230,669 shares; Mr. Standish,
149,260 shares; Mr. Whitlock, 178,919 shares; and
the group, 1,121,089 shares. No stock options have been
granted to Mr. Harper. |
| (10) | Includes shares held in trust for benefit of spouse, as to which
Mr. Wareing disclaims beneficial interest. |
| (11) | Includes shares acquired subsequent to March 1, 2010 and
shares held in trust for benefit of spouse of which
Mr. Wolff is a trustee. |

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Compensation Discussion and Analysis

The following compensation discussion and analysis contains information regarding measures applicable to performance-based compensation and targets and other achievement levels associated with these measures. CenterPoint Energy cautions investors not to regard this information, to the extent it may relate to future periods or dates, as forecasts, projections or other guidance. The reasons for this caution include the following: The information regarding performance objectives and associated achievement levels was formulated as of earlier dates and does not take into account subsequent developments. The objectives may include adjustments from, or otherwise may not be comparable to, financial and operating measures that are publicly disclosed and may be considered of significance to investors. Some achievement levels, such as those relating to incentives for exceptional performance, may be based on assumptions that differ from actual results.

Objective and Design of Executive Compensation Program

The objective of CenterPoint Energy’s executive compensation program is to enable us to recruit and retain highly qualified managerial talent by providing market-based levels of compensation. We also seek to motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with the success of our business. To achieve our objective, we believe that our executive compensation program must be competitive with that of our peer companies and other likely competitors for executive talent.

To help ensure market-based levels of compensation, we measure the major elements of compensation annually for a job against available data for similar positions in other companies. We believe annual measurement is generally appropriate, because the market itself is subject to variations over time as a result of changes within peer companies and the supply and demand for experienced executives. Once the market value for a position is determined, we compare the compensation levels of individual incumbents to these market values. The salary level and short term and long term incentive target percentages for each named executive officer are based on market data for the officer’s position. Compensation levels can vary compared to the market due to a variety of factors such as experience, tenure and individual performance.

In light of our focus on determining market value for each position, we do not employ analyses that compare compensation levels of our named executive officers with each other or with other employees within the Company. We recognize, however, that the compensation of our Chief Executive Officer, Mr. McClanahan, is substantially greater than the compensation of the other named executive officers. The differential in total compensation stems from Mr. McClanahan’s long tenure with CenterPoint and its predecessors and his participation in legacy benefit plans that are no longer available to newly-hired executives. For example, during most of his over 35 years of service with the Company, Mr. McClanahan has participated in our pension plan final average pay formula in which the benefit grows based on his years of service and final average pay. After 2008 the benefit under the final average pay formula was frozen and the benefit that an employee had under that formula was converted to a lump sum. For long-tenured employees such as Messrs. McClanahan and Standish, the accounting for this change resulted in an increase in the reported Change in Pension Value for 2009, which is shown in the Summary Compensation Table at page 34.

We define the major elements of compensation as base salary and short term and long term incentives. We target the market median (50th percentile) for each major element of compensation because we believe the market median is a generally accepted benchmark of external competitiveness.

We believe compensation programs can drive the behavior of employees covered by the programs, and accordingly we seek to design our executive compensation program to align compensation with current and desired corporate performance and shareholder interests. Actual compensation in a given year will vary based on CenterPoint Energy’s performance, and to a lesser extent, on subjective appraisals of individual performance. In other words, while compensation targets will to a large extent reflect the market, actual compensation will reflect CenterPoint Energy’s attainment of (or failure to attain) financial and operational performance objectives.

We maintain competitive benefit programs for our employees, including our named executive officers, with the objective of retaining their services. Our benefits reflect competitive practices at the time the benefit programs were implemented and, in some cases, reflect our desire to maintain similar benefits treatment for all employees in

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similar positions. To the extent possible, we structure these programs to deliver benefits in a manner that is tax efficient to both the recipient and CenterPoint Energy.

Role of Compensation Committee

The Compensation Committee of the Board of Directors oversees compensation for our named executive officers and other senior executives, including base salary and short term and long term incentive awards. The Committee also administers incentive compensation plans, evaluates our Chief Executive Officer’s performance and reviews management succession planning and development. The Board has determined that the members of the Committee meet the applicable requirements for independence under the listing standards of the New York Stock Exchange discussed under “Director Independence” on page 9.

Role of Consultant. To assist in carrying out its responsibilities, the Committee retains a consultant to provide independent advice on executive compensation and to perform specific tasks as requested by the Committee. The consultant reports directly to the Committee, which pre-approves the scope of work and the fees charged. Since October 2006, Frederic W. Cook & Co., Inc. has served as consultant to the Committee. No other services were provided to us by Cook & Co. in 2009. From time to time, the Governance Committee of the Board of Directors also has retained Cook & Co. to provide independent advice on director compensation. Either committee may also direct the consultant to perform additional analyses or research related to compensation issues.

Decisions Made by the Compensation Committee. At least annually, the Compensation Committee reviews and may recommend that the Board approve adjustments to base salary for our named executive officers. In addition, the Committee may adjust short term and long term incentive target compensation levels for the named executive officers to better align compensation with our market-based pay philosophy. In establishing individual incentive targets and awards, the Committee considers the data provided by its consultant, the level and nature of the executive’s responsibility, the executive’s experience and the Committee’s own subjective assessment of the executive’s performance. In making these determinations, the Committee also takes into account our Chief Executive Officer’s performance evaluations of and recommendations regarding the other named executive officers.

Annually, the Committee directs Cook & Co. to review the base salary and short term and long term incentive levels of our most senior executives including the named executive officers. In order to ensure that our compensation programs are market-based, Cook & Co. analyzes and matches the position and responsibilities of each executive either to proxy statement data from a peer group of utility companies or to published compensation surveys covering both the utility industry and general industry. We do not consider geographical differences to be a relevant factor since we recruit on a national basis.

For 2009, the peer group for proxy statement data consisted of 14 publicly traded utility companies that derived approximately 70% of their income from regulated operations. The group included companies of similar scope and complexity to CenterPoint Energy that were comparable in terms of annual revenues and the value of ongoing operations. Included were: Ameren Corporation, Atmos Energy Corporation, Consolidated Edison, Inc., CMS Energy Corporation, DTE Energy Company, Duke Energy Corporation, FPL Group, Inc., NiSource Inc., Northeast Utilities, Pepco Holdings, Inc., PG&E Corporation, Pinnacle West Capital Corporation, Progress Energy, Inc. and Xcel Energy Inc.

For 2010, the peer group for proxy statement data was broadened to 17 publicly traded utility companies. The resulting peer group companies generate at least 70% of their income from regulated operations and are included in the S&P Utility Index. Ameren Corporation and FPL Group, Inc. were removed from the peer group used in 2009 because they no longer generate at least 70% of their income from regulated operations. Atmos Energy Corporation was removed as it is not in the S&P Utility Index. Six companies from the S&P Utility Index that generate at least 70% of their income from regulated operations were added to the peer group in 2010. These new entrants were American Electric Power, Integrys Energy Group, Inc., Scana Corporation, Southern Company, TECO Energy and Wisconsin Energy.

The resulting group of 17 companies is now identical to the panel of companies used for measuring our relative total shareholder return for purposes of valuing long term incentives as referenced on page 44. We believe the resulting group is aligned with our peers and competitors. We also believe the companies in a larger data set will be

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less subject to wide changes in compensation data. Prior to conducting its 2010 analysis, the Committee asked Cook & Co. to revalidate the proposed peer group. Cook & Co. revalidated the proposed peer group by comparing us to key financial metrics of the companies and recommended approval of the changes.

Role of Executive Officers

Of the named executive officers, only our Chief Executive Officer has a role in determining executive compensation policies and programs. Our Chief Executive Officer works with business unit and functional leaders along with our internal compensation staff to provide information to the Committee to help ensure that all elements of compensation support our business strategy and goals. Our Chief Executive Officer reviews internally developed materials before they are furnished to the Committee.

Our Chief Executive Officer reviews and recommends specific Company performance metrics to be used in short and long term incentive plans. Our Chief Executive Officer works with the various business units and functional departments and with our Corporate Financial Planning and Performance Department to develop these metrics, which are then presented to the Committee for its consideration and approval.

Our Chief Executive Officer reviews and recommends changes to the peer companies used for compensation purposes using internal analyses of revenue and the percentage of income from regulated operations. These recommendations are then presented to the Committee for its consideration and approval.

Within the parameters of the compensation policies established by the Committee, our Chief Executive Officer also makes preliminary recommendations for base salary adjustments and short term and long term incentive levels for the other named executive officers. Our Chief Executive Officer also recommends payment amounts for the non-formulaic portion of the other executive officers’ short term incentive plan awards. Our Chief Executive Officer bases his recommendations on a variety of factors such as his appraisal of the executive’s job performance and contribution to CenterPoint Energy, improvement in organizational and employee development and accomplishment of strategic priorities. Our Chief Executive Officer does not make any recommendations regarding his own compensation.

Review of Elements of Compensation

Compensation Philosophy. As indicated above, we seek to provide compensation that is competitive, both in total level and in individual components, with the companies we believe are our peers and other likely competitors for executive talent. By competitive, we mean that total compensation and each element of compensation corresponds to a market-determined range. Competitive compensation is normally sufficient to attract executive talent to the Company. Competitive compensation also makes it less likely that executive talent will be lured away by higher compensation to perform a similar role with a similarly-sized competitor. We also believe that a substantial portion of compensation for executives should be “at risk,” meaning that the executives will receive a certain percentage of their total compensation only to the extent CenterPoint Energy and the executive accomplish goals established by the Committee. We expect senior level executives, including the named executive officers, to have a higher percentage of their total compensation at risk. By this means, we seek to align each of our named executive officers with the short and long term performance objectives of CenterPoint Energy and with the interests of our shareholders. The size of “at risk” compensation is expressed as a percentage of base salary.

Base Salary. Base salary is the foundation of total compensation. Base salary recognizes the job being performed and the value of that job in the competitive market. Base salary must be sufficient to attract and retain the talent necessary for our continued success and provides an element of compensation that is not at risk in order to avoid fluctuations in compensation that could distract the executives from the performance of their responsibilities. Our intent is that base salary for our most senior executives, including the named executive officers, will be positioned near the 50th percentile of base salaries in the comparable competitive market.

Annual adjustments to base salary primarily reflect either changes or responses to changes in market data or increased experience and individual contribution of the employee. The typical date for making these adjustments is April 1; however, adjustments may occur at other times during the year to recognize new responsibilities or new data

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regarding the market value of the job being performed. Changes in base salary impact short and long term incentive payouts, as well as some benefits.

A newly named executive or an executive whose responsibilities have significantly increased may be moved to the market median (50th percentile) over several years. Decreases in base salary are rare. It is considered a preferred human resources practice to freeze base salary over several years rather than reduce base salary if a named executive officer’s level of responsibility has been decreased or market data for the job has declined.

The Compensation Committee did not increase the base salaries for our named executive officers in 2009 in response to the uncertainty in the financial and credit markets and in consideration of the fact that many companies were reducing or eliminating base pay increases in light of the recession.

Short Term Incentives. Our short term incentive plan provides an annual cash award that is designed to link each employee’s annual compensation to the achievement of annual performance objectives for CenterPoint Energy and the individual’s business unit, as well as to recognize the employee’s performance during the year. The target for each employee is expressed as a percentage of base salary earned during the year.

The Compensation Committee determines each named executive officer’s short term incentive target by taking into account the market analysis performed annually by the consultant as described above and recommendations from the Chief Executive Officer for officers other than himself. Named executive officers, who are expected to have a greater percentage of total pay at risk, have higher incentive targets. There were no changes in short term incentive targets for our named executive officers for 2009 as shown in the table on page 30 in the column Short Term Incentive Target %.

The achievement of performance objectives, which the Committee establishes and approves annually, is used to determine the funding of the short term incentive plan for the year. For each performance objective, a target performance level is established at the beginning of the year. If actual performance is achieved at that target level, the plan is funded at 100% for that performance objective. A threshold level of achievement is also established for the performance objective. Achievement must meet at least the threshold level for any funding to be provided on that performance objective. At the threshold level, funding for that performance objective is 50% of the target amount. Similarly, a maximum level of performance is established for each performance objective, which results in funding for that objective at 150% of the target amount if the maximum level of performance is achieved. An exceptional achievement level is established at 200% of target for performance objectives related to core operating income. Linear interpolation is used to determine funding for performance between achievement levels. The maximum funded amount under the plan is limited based on the percentage achievement level of the applicable performance objectives and the base salary earned multiplied by his or her short term incentive target.

The Committee establishes and approves the specific performance objectives based on possible objectives included in the plan, which was last approved by shareholders in 2006. Performance objectives are based on company and business unit financial and operational factors determined to be critical to achieving our desired business plans. Performance objectives are designed to reflect goals and objectives to be accomplished over a 12-month measurement period; therefore, incentive opportunities under the plan are not impacted by compensation amounts earned in prior years. At the end of the year, the Committee compares the actual results to the pre-established performance objectives and certifies the extent to which the objectives are achieved for funding the incentive plan.

Because an important component of our business plan is successful financial performance, the primary performance objectives for 2009 were based on core operating income. “Core operating income” is our reported operating income adjusted to reflect what we consider to be our core operational business performance in the period being measured. The adjustments made to our reported operating income to arrive at our core operating income are detailed at page 39.

For 2009, our Chief Executive Officer’s only performance objective was achievement of our targeted core operating income. Performance objectives for each of the other named executive officers were based on a matrix of performance objectives for the Company as a whole and for the various business units. Business unit performance objectives include (i) achieving specified levels of core operating income for the business unit, (ii) achieving specified levels of modified cash flow for the business unit, (iii) controlling expenditures and (iv) non-financial

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operational performance objectives such as reliability indices, safety-related incident rates, customer satisfaction ratings, progress or completion of projects and other objectives relating to the services provided by CenterPoint Energy.

Additional detail regarding targets and specific performance objectives for our named executive officers for 2009 and an example of the funding and distribution calculation are provided following the Grants of Plan-Based Awards for Fiscal 2009 table under Non-Equity Incentive Plan Awards beginning on page 38.

The short term incentive plan includes a formulaic payment equal to 50% of the funding of the plan. The Committee exercises discretion in determining all distributions above the formulaic amount for the named executive officers, but performance awards cannot exceed the funded amount under the plan. The Committee only exercises discretion with respect to performance awards in excess of the formulaic amount but less than the full funding of the plan for named executive officers. In exercising its discretion, the Committee may assess an individual executive’s contribution to the achievement of the performance objectives, as well as any special circumstances that may justify the amount awarded. The Committee also considers the input of our Chief Executive Officer on the amount to be awarded to each of the other named executive officers. The maximum funding amount under the plan is 200% of target for Mr. McClanahan, 180% of target for Messrs. Whitlock and Rozzell, 173% of target for Mr. Standish and 182% of target for Mr. Harper. The maximum award a named executive may receive is 200% of target. The Committee has discretion to pay awards that are not tied to performance objectives. Any amount paid in excess of the funded amount is reported as a bonus instead of non-equity incentive plan compensation.

The scaling of target levels necessary to achieve threshold, target, maximum and exceptional performance is based on an assessment of expected business performance during the measurement period. Over a period of years, if we achieve expected business performance, the short term incentive program should pay out at target levels. In order for a program to be motivational, there should be a high likelihood of achieving at least threshold performance in a given year. Also in a given year, we believe there should be a reasonable likelihood of achieving target performance. In order to create additional incentive for exceptional performance, funding for short term incentive goals related to core operating income can reach 200% of target, but it is not expected that this level of funding would be triggered in most years.

The short term incentive awards with respect to 2009 are described in the Grants of Plan-Based Awards for Fiscal Year 2009 table on page 37 and the discussion following the table. Based on the Committee’s assessment of their individual contributions, the Committee authorized awards to each of the named executive officers equal to their respective funded amounts. These awards, expressed as a percentage of their individual target awards, were 90% for Mr. McClanahan, 115% for Messrs. Whitlock and Rozzell, 129% for Mr. Standish, and 110% for Mr. Harper.

Effective January 1, 2010, the Compensation Committee revised the terms of the short term incentive plan for participants who are or become “retirement eligible” (age 55 with five years of service) during the year. Retirement eligible participants who terminate employment will receive a short term incentive payment, if any, under the short term incentive plan based on the actual achievement of the applicable performance objectives, pro-rated for the period of employment during the calendar year. By contrast, prior years’ short term incentive awards, including those for 2009, provided that retirement eligible participants received a pro-rated payment upon separation from service based on the target achievement level of the applicable performance objective.

Long Term Incentives. We provide a long term incentive plan in which each of our executive officers, including our named executive officers, and certain other management-level employees participate. At our 2009 annual meeting, stockholders approved the CenterPoint Energy, Inc. 2009 Long Term Incentive Plan, the terms of which are substantially similar to the prior long term incentive plan. Awards made in February 2009 were made under the prior long term incentive plan. Our long term incentive plan is designed to reward participants for sustained improvements in CenterPoint Energy’s financial performance and increases in the value of our common stock and dividends over an extended period.

The Committee authorizes grants annually at a regularly scheduled meeting during the first quarter of the year. Grants can be made from a variety of award types authorized under our long term incentive plan. In recent years, we

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have emphasized performance-based shares, with the primary performance objective being our total shareholder return compared to that of a subset of the S&P Utility Index comprised of 17 companies (not including CenterPoint Energy) that generate at least 70% of their income from regulated operations. We refer to this group of companies as the regulated utility subset of the S&P Utility Index.

For the 2009-2011 award, this subset included in addition to CenterPoint Energy, Ameren Corporation, American Electric Power Company, CMS Energy Corporation, Consolidated Edison, Inc., DTE Energy Company, Duke Energy Corporation, FirstEnergy Corporation, FPL Group, Inc., Nicor Inc., NiSource Inc., Pepco Holdings, Inc., PG&E Corporation, Pinnacle West Capital Corporation, Progress Energy, Inc., Southern Company, TECO Energy, Inc. and Xcel Energy Inc.

For the 2010-2012 award, Ameren Corporation, First Energy Corporation, FPL Group and NICOR Inc. were removed from the group because they no longer generate at least 70% of their income from regulated operations. Integrys Energy Group Inc., Scana Corporation and Wisconsin Energy were added as they were new entrants to the S&P Utility Index, and they generate at least 70% of their income from regulated operations. Northeast Utilities was added because they were an existing member of the S&P Utility index, and their percentage of income from regulated operations now meets the 70% threshold.

We have also made stock awards which vest based on continued service over a three-year period and the achievement of a performance goal based on the level of dividends declared over the vesting period. Over a period of years, if we achieve expected business performance, the long term incentive plan should pay out at target levels.

A three-year performance period is used for grants under the long term incentive plan for several reasons. A three-to-five year period is a typical performance measurement period for this type of compensation element, and a three-year period is what we have traditionally used. Three years is of sufficient duration so that high or low performance in one year should neither guarantee nor preclude a payout. Three years’ duration also helps assure participants that their performance will influence a payout during the measurement period. As a result of the three-year performance periods, in any given year each named executive officer generally has outstanding grants covering three concurrent periods.

On February 18, 2009, the Committee authorized awards as shown in the columns captioned Estimated Future Payouts Under Equity Incentive Plan Awards in the Grants of Plan-Based Awards for Fiscal Year 2009 table on page 37. The Committee set a target percentage of each named executive officer’s base salary that was consistent with our objective of targeting the market median compensation level as described above. The target award levels for 2009 were increased in some cases to address shortfalls in compensation levels relative to market data and to advance the retention and motivational objectives of our compensation program. Vesting and payout of the performance shares will be determined based on the level of achievement of each performance objective over the three-year cycle of January 2009 through December 2011. For additional detail regarding the grants, see the discussion following the Grants of Plan-Based Awards for Fiscal Year 2009 table under Equity Incentive Plan Awards — Long Term Incentive Plan Awards Granted in February 2009 beginning on page 43.

Long term incentive compensation is allocated between performance shares and stock awards on a 70% and 30% basis, respectively. This allocation provides what the Committee considers to be an appropriate blend of grants, as supported by Cook & Co.’s analysis. Our performance share awards were made in three separate, equal grants, with the payout opportunity for each grant based on a different performance objective. The first is based on total shareholder return over the three-year performance cycle as compared to that of the 17 other companies included in the regulated utility subset of the S&P Utility Index described above, the second is based on achieving our modified cash flow goal and the third is based on improvement in our core operating income over the three-year performance cycle.

Total shareholder return is a widely utilized metric that captures stock price appreciation and dividend yield. By comparing CenterPoint Energy’s total shareholder return to the other companies included in the regulated utility subset of the S&P Utility Index, threshold payout for this metric is achieved by the creation of shareholder value that places CenterPoint Energy at the 40th percentile within this group (tenth out of the 18 company peer group that includes CenterPoint Energy). Maximum payout for this metric is achieved by the creation of shareholder value that places CenterPoint Energy in the third position or higher within the group. Linear interpolation is used to reward

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performance between threshold and maximum. We intend for the total shareholder return measure to provide a reasonable chance of threshold performance, thus enhancing the motivational effects of the plan, while requiring a rank in the top three companies for maximum payout. We believe the regulated utility subset of the S&P Utility Index is a reasonable proxy for the universe of companies engaged in businesses similar to ours.

The Committee established achievement of core operating income and modified cash flow, as compared with our targeted performance reflected in our five-year plan at the time these awards were made, as two other performance objectives for long term incentive awards made in 2009 as well as 2010. As in the case of core operating income for our short term incentive awards, we calculate these measures from our reported financial results, adjusted for certain factors to reflect what we consider to be our true operational performance over the performance cycle. Both of these were adopted as performance objectives because they measure our degree of success in the achievement of our business plan. We intend that the objectives will provide a reasonable chance of achieving threshold performance, thus enhancing the motivational effects of the plan, while requiring significant income growth for maximum payout. For a detailed description of the calculation of core operating income and modified cash flow, see page 38.

If actual achievement for the performance objective under an award does not meet at least the threshold level, the Compensation Committee will not approve a distribution under the plan related to that award. If a performance objective meets or exceeds the threshold level, the Committee may approve a payout ranging from 50% to 150% of target based on actual achievement level.

The February 18, 2009 awards shown in the Grants of Plan-Based Awards for Fiscal Year 2009 table on page 37 also include stock awards. Vesting of these awards requires continuous service through the February 18, 2012 vesting date and a performance objective of declaring a minimum of $2.28 per share in cash dividends on CenterPoint Energy common stock during the three-year vesting period.

Payments of both the performance share awards and the stock awards will be made in the form of shares equal in number to the shares covered by the award multiplied by the achievement percentage, if applicable, subject to withholding to satisfy tax obligations. Please refer to “Potential Payments Upon Change in Control or Termination” for the impact of a change in control or termination of employment on outstanding grants.

Both the performance shares and the stock awards accrue dividend equivalents over the performance cycle or vesting period, respectively, at the same level as dividends earned by shareholders on shares of common stock outstanding. Dividend equivalents on the shares which are vested are paid in cash when the vested shares are distributed.

In addition, the Compensation Committee revised the terms of the performance share awards and stock awards for participants who are or become “retirement eligible” (age 55 with five years of service) during the performance period. The terms of the 2009 performance share and stock awards provide that retirement eligible participants who terminate employment will receive a payment under the award, if any, based on the actual achievement of the applicable performance objective at the end of the performance period or vesting period, respectively, with any such amount pro-rated for the period of their employment during that period. The 2009 performance share and stock awards also provide that upon termination for cause, no benefits are payable under the award agreements. By contrast, prior years’ performance and stock awards provided that retirement eligible participants received a payment upon separation from service based on the target achievement level regardless of the actual results of the performance objectives, pro-rated for the period of their employment during the period.

Changes in 2009 to Compensation. During 2009, the Committee reviewed but did not change the base salary and short term incentive target of the named executives. The Committee did approve changes to the long term

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incentive target of the named executives other than Messrs. McClanahan and Harper. For 2009, base salaries, short term incentive and long term incentive targets for the named executives were as follows:

	Base Salary — effective 04/01/09	Short Term Incentive — Target % as of 01/01/09	Long Term Incentive
Name	(No change)	(No change)	Target % as of 01/01/09
David M. McClanahan	$ 1,060,000	100% of base salary	200% (No change)
Gary L. Whitlock	$ 505,000	75% of base salary	Increase from 135% to 140% of base salary
Scott E. Rozzell	$ 475,000	75% of base salary	Increase from 135% to 140% of base salary
Thomas R. Standish	$ 457,000	75% of base salary	Increase from 135% to 140% of base salary
C. Gregory Harper	$ 340,000	70% of base salary	90% of base salary (No change)

The 2009 adjustments to long term incentive targets primarily reflect either changes in market data for the executive’s position or the increased experience level and individual contribution of the executive. The Committee reviews each element of compensation annually to improve alignment with stated compensation objectives. In its review, the Committee also takes into consideration whether any incentive compensation target or performance objective could lead to a decision by an executive to take an inappropriate level of risk for the Company.

Effective April 1, 2010, base salaries for named executive officers will increase to the following amounts: Mr. McClanahan, $1,100,000; Mr. Whitlock, $525,000; Mr. Rozzell, $490,000; Mr. Standish, $472,000 and Mr. Harper, $355,000. For 2010, there are no changes in the short term incentive or long term incentive targets for the named executive officers.

Equity Award Practices

Under our newly approved long term incentive plan, our practice is to price annual grants of equity awards at the closing market price for our common stock on the New York Stock Exchange on the grant date, which is the date the Compensation Committee approves the grants. This practice is in accordance with the terms of our long term incentive plan. In recent years, long term incentive grants made other than at the time of the annual grants have been provided to new employees only. These types of grants are approved by the Compensation Committee or, with respect to our non-executive officers, a Special Stock Award Committee, which consists of our Chief Executive Officer and the Chairman of the Compensation Committee.

We do not have a practice of timing grants in coordination with the release of material information or timing grants to enhance the value of stock options to optionees. We have not granted stock options since 2004.

Recoupment of Awards

The Board has implemented a policy for the recoupment of short term and/or long term incentive payments in the event an officer is found to have engaged in any fraud, intentional misconduct or gross negligence that leads to a restatement of all, or a portion of, our financial results. This policy permits us to pursue recovery of incentive payments if the payment would have been lower based on the restated financial results.

Stock Ownership Guidelines

With the approval of the Compensation Committee, we have established executive stock ownership guidelines applicable to our named executive officers and all other officers. The guidelines indicate that our Chief Executive Officer should own CenterPoint Energy common stock having a market value of four times base salary, and the other named executive officers should own CenterPoint Energy common stock having a market value of three times their respective base salaries. For purposes of the guidelines, the ownership requirement is determined based on the executive’s base salary at the time he or she becomes covered by the guidelines or at the time of promotion to a higher level covered by the guidelines. The base salary multiple is converted to a fixed number of shares (rounded to

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the nearest 100 shares) using the prior 365-day average closing price of our common stock as reported by the New York Stock Exchange.

In addition to shares owned outright, equivalent shares held in our savings plan, unvested stock awards and the target number of performance-based shares from the long term incentive plan and shares held in trust are counted towards the guidelines. Until the designated ownership level is reached, the guidelines suggest that the officer retain at least 50% of the after-tax shares delivered through the long term incentive plan. Certain exclusions apply to the retention expectation, such as estate planning, gifts to charity, education and the purchase of a primary residence. Newly hired or recently promoted officers are given a reasonable period of time to comply with these guidelines. The Committee reviews the officer’s stock holdings annually to monitor compliance with these guidelines.

The stock ownership guidelines were established at their current levels in 2005 by the Board of Directors on the recommendation of the Compensation Committee. The Committee took into consideration a consultant’s survey report of proxy disclosure data relating to stock ownership guidelines at the largest 250 companies, by market capitalization, in the S&P 500 Index. Guideline levels of four times salary for the Chief Executive Officer and three times salary for other executive officers were established as appropriate to achieve the objective of ensuring that the executives’ interests are appropriately aligned with shareholders’ interests for CenterPoint Energy common stock. In setting these guidelines the Committee took into consideration the character of CenterPoint Energy common stock as a relatively low volatility stock primarily driven by dividend yield. Although we do not conduct formal benchmarking studies of ownership guidelines, the ownership guidelines and the administration of the program are reviewed annually by the Compensation Committee with advice from the Committee’s consultant.

We also have a policy prohibiting all officers, as well as our directors, from hedging the risk of stock ownership. This policy is part of our insider trading policy.

Review of Tally Sheets

At least annually (with the most recent version covering 2009 presented in January 2010), the Committee reviews tally sheets for each of the named executive officers. Tally sheets are provided to the Committee to show how various compensation and benefits amounts are interrelated and how changes in one component of compensation impact other components and to enable Committee members to quantify amounts payable upon various termination scenarios. Tally sheets provide the Committee the following compensation and benefit data:

•	Base salary;
•	Short term incentive compensation (target value approved in 2009
and amount paid in 2009);
•	Long term incentive compensation (threshold, target and maximum
levels granted in 2009, in addition to other outstanding equity
grants in 2009 plus amount distributed in 2009);
•	Value of in-the-money stock options;
•	Value of retirement benefits, including nonqualified benefits
and retiree medical benefits as of December 31, 2009 and at
ages 60, 62 and 65;
•	Value of savings plan company match and earnings, including
nonqualified benefits as of December 31, 2009 and at
ages 60, 62 and 65;
•	Cumulative interest earned on nonqualified deferred compensation
plans as of December 31, 2009, including above-market
earnings;
•	Other income and benefits earned in 2009, such as dividends paid
and company costs associated with the executive life insurance
plan;
•	Value of beneficiary’s benefits at death of the executive
at ages 60, 62 and 65 under the executive benefit plan;
•	Benefits or payments that would be received upon a change in
control or within two years of a change in control, including
tax gross-ups for estimated excise taxes due under Sections 4999 and 280G
of the Internal Revenue Code as if the change in control
occurred on December 31, 2009;

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| • | Benefits or payments that would be received upon other
termination of employment scenarios, such as death, disability,
voluntary termination, involuntary termination for cause and
resignation without good reason as of December 31,
2009; and |
| --- | --- |
| • | Business travel and expenses incurred in 2009. |

Change in Control

In December 2008, the Board adopted change in control agreements for certain executives, including each of the named executive officers, that were substantially similar to agreements that were already in place. The agreements were slightly modified to comply with the final regulations under Section 409A of the Internal Revenue Code and closely reflect comparable terms to similar agreements in place at our peer companies. These agreements are intended to help ensure the executives’ continued full attention to our business needs in the event we were to become the subject of the types of change in control transactions described in the agreements. The agreements are for a one-year term but renew automatically each year unless action is taken by the Board to modify or terminate them. In December 2009, the agreements automatically renewed for an additional year. In order to be eligible for benefits, the executive’s employment must be terminated following a change in control so that these agreements are subject to a “double trigger.” The Board has also determined that it will no longer include an excise tax gross-up payment in new and materially amended change in control agreements with our named executive officers. For a more detailed discussion, refer to “Potential Payments upon Change in Control or Termination” on page 51.

To provide additional assurance of the payment of benefits in the event of a change in control, we have established a rabbi trust. Please refer to “Rabbi Trust” under “Potential Payments Upon Change in Control or Termination” on page 56.

Benefits

We have maintained a defined benefit plan for eligible employees since 1953 to help employees provide for retirement and to attract and retain employees. In addition, we maintain a benefit restoration plan as a nonqualified supplemental retirement plan to generally provide for benefits in excess of those available under the retirement plan due to annual limits imposed by the Internal Revenue Code. Changes in base salary and/or short term incentive compensation affect benefits payable under the retirement plan and the benefit restoration plan. A description of the retirement plan and benefit restoration plan begins under “Pension Benefits” on page 47. The present value of the accumulated benefits under the plans for each named executive officer is set forth in the Pension Benefits table on page 48.

We also maintain a savings plan designed to encourage all employees to help provide for their own retirement and to attract and retain employees. Our savings restoration plan is a nonqualified plan that provides for matching contributions not available under the savings plan due to Internal Revenue Code limits. Base salary and short term incentive compensation are included as eligible plan compensation under the provisions of the savings plan and the savings restoration plan. A description of the savings plan and the savings restoration plan begins on page 49. Matching contributions to the plans for the named executive officers are included in the footnote to the All Other Compensation column of the Summary Compensation Table.

The named executive officers may defer salary and short term incentive compensation under our deferred compensation plan. A description of the plan begins on page 50. The above-market portion of the 2009 aggregate earnings is reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table.

We also maintain an executive benefits plan for certain executives who were employed as of July 1, 1996 that provides death benefits. In 1996, we determined this benefit was no longer competitive in the market and consequently froze entry into this plan at that time. Only two of our named executive officers participate in this plan. See footnote 8(f) to the Summary Compensation Table for a description of the plan and the estimated aggregate incremental benefit during 2009.

We also have an executive life insurance plan providing endorsement split-dollar life insurance in the form of a death benefit for designated executives who were employed as of December 31, 2001. The purpose of this plan is to

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assist the executive’s beneficiaries with the impact of estate taxes on deferred compensation plan distributions. See footnote 8(e) to the Summary Compensation Table for a description of the plan.

We do not consider perquisites to be a significant element of compensation.

Tax Considerations

We periodically evaluate our executive compensation programs in light of Section 162(m) of the Internal Revenue Code. This section generally limits the tax deductibility of compensation in excess of $1 million for certain executive officers, unless the compensation meets rules qualifying it as performance-based compensation. Generally, we intend to structure our compensation programs in a manner that maximizes tax deductibility. The Committee recognizes, however, that there may be situations in which the best interests of shareholders are served by administering some elements of compensation in a way that may not meet the requirements for performance-based compensation under Section 162(m). Currently, payments to a company’s chief financial officer are not subject to the limitations of Section 162(m).

Our change in control agreements described above provide a gross-up payment to cover any excise tax an executive is determined to owe on an “excess parachute payment”; however, the Board has determined that it will no longer include excise tax gross-up payment provisions in new and materially amended change in control agreements with our named executive officers. The total change in control payment is subject to a reduction of up to 10% if such reduction would avoid triggering excise tax. For additional discussion, refer to “Potential Payments upon Change in Control or Termination” on page 51.

Section 409A of the Internal Revenue Code made significant changes in the taxation of nonqualified deferred compensation arrangements. As applicable, our executive plans and agreements that are subject to Section 409A have been amended to comply with Section 409A as discussed more fully under each particular plan.

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Executive Compensation Tables

The following tables show compensation information for our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers for the one-year periods ended December 31, 2009, 2008 and 2007.

Summary Compensation Table

							Change in
							Pension Value
							and
							Nonqualified
						Non-Equity	Deferred
Name and				Stock	Option	Incentive Plan	Compensation	All Other
Principal		Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation
Position	Year	($) (2)	($) (3)	($) (4)	($) (5)	($) (6)	($) (7)	($) (8)	Total ($)
David M. McClanahan	2009	1,060,000	—	2,119,970	—	954,000	3,022,798	461,769	7,618,537
President and Chief	2008	1,052,500	—	2,058,980	—	1,578,750	1,541,022	257,519	6,488,771
Executive Officer	2007	1,017,500	—	1,959,602	—	1,400,000	144,056	237,087	4,758,245
Gary L. Whitlock	2009	505,000	—	707,195	—	435,563	74,806	106,081	1,828,645
Executive Vice	2008	497,500	—	682,251	—	604,463	34,523	105,402	1,924,139
President and Chief Financial Officer	2007	467,500	—	556,767	—	420,500	31,103	92,390	1,568,260
Scott E. Rozzell	2009	475,000	—	665,339	—	409,688	71,819	98,358	1,720,204
Executive Vice	2008	467,500	—	640,640	—	568,013	33,345	97,761	1,807,259
President, General Counsel and Corporate Secretary	2007	440,000	—	531,294	—	395,800	29,545	85,906	1,482,545
Thomas R. Standish	2009	457,000	—	640,375	—	442,147	721,048	189,216	2,449,786
Senior Vice	2008	448,000	84,000	616,031	—	420,000	421,768	99,751	2,089,550
President and Group President, Regulated Operations	2007	417,000	—	405,749	—	372,799	222,444	74,703	1,492,695
C. Gregory
Harper (1)	2009	340,000	—	306,153	—	261,800	14,008	20,921	942,882
Senior Vice	2008	21,893	200,000	635,000	—	—	540	1,225	858,658
President and Group President, Pipelines and Field Services

| (1) | Upon beginning employment with the Company in December 2008,
Mr. Harper was paid a cash bonus of $200,000 and was
awarded 50,000 shares of stock, a third of which vest
annually contingent on his continued employment with the Company. |
| --- | --- |
| (2) | The named executive officers did not receive base salary
increases in 2009. The differences in base salaries between 2009
and 2008 for Messrs. McClanahan, Whitlock, Rozzell and
Standish are due to the fact that increases in base salary for
2008 did not become effective until April 1, 2008.
Mr. Harper began employment with the Company in December
2008 at an annual salary of $340,000. |
| (3) | The 2008 bonus to Mr. Standish was in recognition of his
leadership in restoring service when Hurricane Ike struck the
Houston area in 2008. This amount represented a discretionary
payment above the amount earned pursuant to achieved performance
objectives under our short term incentive plan. |
| (4) | Reported amounts in the table above represent the aggregate
grant date fair value of awards computed in accordance with FASB
ASC Topic 718 based on the target achievement level of the
underlying performance conditions as of the grant date.
Previously reported amounts for the years ended
December 31, 2008 and 2007 have been restated in this
regard. For purposes of the tables above and below, the effects
of estimated forfeitures are excluded. Please also refer to the
Grants of Plan-Based Awards for Fiscal Year 2009 table and
accompanying footnotes. |

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The maximum value of stock awards assuming the highest achievement level of the performance conditions is as follows:

		Maximum Value of
		Stock Awards
Name	Year	($)
McClanahan	2009	2,862,003
	2008	2,779,700
	2007	2,645,553
Whitlock	2009	954,601
	2008	920,966
	2007	751,454
Rozzell	2009	898,028
	2008	864,710
	2007	716,883
Standish	2009	864,308
	2008	831,646
	2007	547,670
Harper	2009	413,276

(5)	CenterPoint Energy has not granted stock options since 2004.
(6)	Non-Equity Incentive Plan Compensation represents short term
incentive awards earned with respect to performance in the
designated year and paid in the following year. For more
information on the 2009 short term incentive awards, refer to
the Grants of Plan-Based Awards for Fiscal Year 2009 table on
page 37 and the accompanying footnotes.
(7)	The two components of the 2009 Change in Pension Value and
Nonqualified Deferred Compensation Earnings are as follows:

	Change in	Above Market — Earnings on Nonqualified
	Pension Value	Deferred Compensation	Total
Name	($) (a)	($) (b)	($)
McClanahan	2,957,413	65,385	3,022,798
Whitlock	74,613	193	74,806
Rozzell	71,819	—	71,819
Standish	704,082	16,966	721,048
Harper	14,008	—	14,008

(a) The Change in Pension Value is the difference in the present value of accumulated benefits under our retirement plan and the related benefit restoration plans from December 31, 2008 to December 31, 2009. Benefits are assumed to commence as of the earliest age that an individual could retire without a reduction in benefits. The present value as of December 31, 2008 assumed a discount rate of 6.9% and lump sum conversion interest rates of 5.9%, 6.65% and 6.9% for benefits paid within the first 5 years, 5th through 20th years, and all remaining years, respectively. The present value as of December 31, 2009 assumed a discount rate of 5.7% and lump sum conversion interest rates of 4.7%, 5.45% and 5.7% for benefits paid within the first 5 years, 5th through 20th years, and all remaining years, respectively.

The significant Change in Pension Value for Messrs. McClanahan and Standish from 2008 to 2009 is primarily due to:

(i) the change to plan design that was effective as of January 1, 2009 as a result of freezing the final average pay benefit formula and converting the accumulated benefit to a lump sum value using a conversion interest rate of 4.52% and adding interest at 4% on the lump sum amount. The present value of accumulated benefit calculated as of December 31, 2008 did not reflect the new plan design.

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(ii) the 2009 discount rates used in the present value accumulated benefit calculations and the lump sum calculations (as required under FASB ASC Topic 715) were lower than the rates used for 2008, resulting in increases in the present value of accrued benefits. These lower discount rates also impacted the present value of accumulated benefits in 2009 for Messrs. Whitlock, Rozzell and Harper.

Refer to the narrative accompanying the Pension Benefits table on page 48 for a more detailed discussion of the present value calculation.

(b) Above Market Earnings consist of the amounts that exceed 120% of the applicable federal long-term rate at the time the interest rate was set. In 1985, CenterPoint Energy entered into corporate-owned life insurance policies on the lives of Messrs. McClanahan and Standish who contributed to the 1985 deferred compensation plan. These policies were entered into with their consent. Proceeds upon their deaths are payable to CenterPoint Energy and are available to offset the benefit payments from the plan.

(8) The following table sets forth the elements of All Other Compensation for 2009:

					Annual
					Value of
					Executive
		Contributions to	Contributions to		(Death)
		Vested and	Vested and		Benefit
		Unvested Defined	Unvested Defined		Plan
	Tax	Contribution Plans	Contribution Plans	Insurance	(change in
	Reimbursements	(qualified)	(nonqualified)	Premiums	PVAB)	Total All Other
Name (a)	($) (b)	($) (c)	($) (d)	($) (e)	($) (f)	Compensation ($)
McClanahan	3,188	14,700	143,625	76,638	223,618	461,769
Whitlock	1,519	14,700	51,868	37,994	—	106,081
Rozzell	1,428	14,700	47,881	34,349	—	98,358
Standish	1,248	14,700	42,960	30,491	99,817	189,216
Harper	—	14,700	4,476	1,745	—	20,921

(a) None of the named executive officers received perquisites valued in excess of $10,000.

(b) The tax reimbursement amounts shown are gross-up payments equal to the after-tax cost of imputed income that the named executive officers are required to recognize as a result of coverage under the executive life insurance plan described in footnote (e) below. The gross-up payment is provided in accordance with the terms of each officer’s agreement. The gross-up payments are calculated assuming the highest individual income tax rate is applicable.

(c) These amounts represent CenterPoint Energy’s contributions to the savings plan, which is described under “Savings Plan and Savings Restoration Plans” on page 49.

(d) These amounts represent benefits accrued under the savings restoration plan, which is described under “Savings Plan and Savings Restoration Plans” on page 49.

(e) The insurance premium amounts include annual premiums we pay to provide life insurance coverage and long-term disability coverage and annual premiums we pay to provide coverage under an executive life insurance plan providing split-dollar life insurance. The executive life insurance plan provides endorsement split-dollar life insurance, with coverage continuing after the executive’s termination of service at age 65 or later. If the participant leaves after age 55 and prior to age 65, benefits under the plan will cease unless the Compensation Committee elects to continue the coverage. With the exception of Mr. Harper, all named executive officers have single-life coverage equal to two times current salary. Upon the death of the insured, CenterPoint Energy will receive any balance of the insurance proceeds payable in excess of the specified death benefit.

(f) These amounts include the estimated aggregate incremental benefit during 2009 of providing benefits under our executive benefit plan for Messrs. McClanahan and Standish who participate in this plan pursuant to individual contractual agreements originally entered into in 1986 and 1993, respectively. If death occurs during active employment, the plan provides for a benefit of 100% of the executive’s

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current base salary for one year and then 50% of base salary for nine years. The plan also provides that if the executive retires after reaching age 65, CenterPoint Energy will pay an annual benefit equal to 50% of the executive’s annual base salary at the time of retirement for six years after his death. If the executive terminates employment prior to reaching age 65, all benefits are forfeited. Benefits have been calculated assuming retirement at age 65 and using base salary in effect at the end of the year for which the calculation was made. No pre-retirement mortality or terminations are assumed. In 1986, CenterPoint Energy entered into a corporate-owned life insurance policy on the life of Mr. McClanahan who participates in the executive benefit plan. This policy was entered into with his consent. Proceeds upon his death are payable to CenterPoint Energy and are available to offset the benefit payments from the plan.

Grants of Plan-Based Awards for Fiscal Year 2009

The following table presents the non-equity and equity incentive plan-based awards granted during 2009. The grant date fair value of stock awards is based on the probable achievement level of the underlying performance conditions as of the grant date at the average of the high and low price on the grant date, which was $12.42 for the February 18, 2009 grants.

					Estimated Future Payouts Under
					Equity Incentive Plan
Awards (2)
		Estimated Possible Payouts Under						Grant Date
		Non-Equity Incentive Plan
Awards (1)			Threshold:	Target:	Maximum:	Fair Value
	Grant	Threshold	Target	Maximum	Number of	Number of	Number of	of Stock
Name	Date	($)	($)	($)	Shares (#)	Shares (#)	Shares (#)	Awards ($)
David M. McClanahan	2/18/09	530,000	1,060,000	2,120,000	—	51,200	—	635,903
	2/18/09				19,915	39,830	59,745	494,689
	2/18/09				19,915	39,830	59,745	494,689
	2/18/09				19,915	39,830	59,745	494,689
Gary L. Whitlock	2/18/09	189,375	378,750	681,750	—	17,100	—	212,381
	2/18/09				6,640	13,280	19,920	164,938
	2/18/09				6,640	13,280	19,920	164,938
	2/18/09				6,640	13,280	19,920	164,938
Scott E. Rozzell	2/18/09	178,126	356,250	641,252	—	16,100	—	199,961
	2/18/09				6,245	12,490	18,735	155,126
	2/18/09				6,245	12,490	18,735	155,126
	2/18/09				6,245	12,490	18,735	155,126
Thomas R. Standish	2/18/09	171,375	342,750	592,958	—	15,500	—	192,511
	2/18/09				6,010	12,020	18,030	149,288
	2/18/09				6,010	12,020	18,030	149,288
	2/18/09				6,010	12,020	18,030	149,288
C. Gregory Harper	2/18/09	119,000	238,000	433,160	—	7,400	—	91,908
	2/18/09				2,875	5,750	8,625	71,415
	2/18/09				2,875	5,750	8,625	71,415
	2/18/09				2,875	5,750	8,625	71,415

There were no other stock or option awards granted during the year.

| (1) | The estimated possible payouts under non-equity incentive plan
awards are based on the terms of our February 2009 grants under
the short term incentive plan. Based on the goals adopted in
2009, the maximum possible payout amount (as shown in the
Maximum column) is 200% of target for Mr. McClanahan, 180%
of target for Messrs. Whitlock and Rozzell, 173% of target
for Mr. Standish, and 182% of target for Mr. Harper.
Actual amounts paid in 2010 for 2009 performance are shown in
the Non-Equity Incentive Plan Compensation column of the Summary
Compensation Table. In addition, the maximum possible payout to
any named executive officer under the terms of the short term
incentive plan is 200% of that individual’s target. Any
amount awarded by the Compensation Committee to an individual
executive officer in excess of the actual performance level of
the underlying performance objectives is reflected in the
Summary Compensation Table in the Bonus column. |
| --- | --- |
| (2) | The grants of equity incentive plan awards consist of two types
of awards for each named executive officer: a stock award
covering a number of shares listed in the Target: Number of
Shares column in the first line for each |

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officer, and three performance share awards, for which threshold, target and maximum numbers of shares are shown in the columns under Estimated Future Payouts Under Equity Incentive Plan Awards in the second, third and fourth lines for each officer. Both the stock awards and the performance share awards accrue dividend equivalents over the vesting period or performance cycle, respectively, at the same level as dividends earned by shareholders on shares of common stock outstanding. Dividend equivalents on the earned and vested shares will be paid in cash. These awards are granted under our long term incentive plan. Refer to Note (2) to the Outstanding Equity Awards at Fiscal Year-End 2009 table for the vesting date of each of these awards.

Non-Equity Incentive Plan Awards

For our short term incentive plan, the following thresholds had to be met before any payouts for the 2009 plan year occurred:

| • | After-tax income from continuing operations had to exceed the
common dividends paid; and |
| --- | --- |
| • | Core Operating Income had to equal or exceed $950 million. |

Short Term Incentive Targets. The base salary and short term incentive target for each of our named executive officers for the 2009 plan year were as follows:

	McClanahan	Whitlock	Rozzell	Standish	Harper
Base salary earned during 2009	$ 1,060,000	$ 505,000	$ 475,000	$ 457,000	$ 340,000
Target short term incentive award percentage for 2009	100%	75%	75%	75%	70%

Funding of the Short Term Incentive Plan Awards. The performance objectives for each of our named executive officers used to determine the level of funding for their 2009 short term incentive plan awards were as follows:

Performance	Performance — Objectives Actual	Weightings of Performance Objectives
Objectives	Achievement	McClanahan	Whitlock	Rozzell	Standish	Harper
CenterPoint Energy Core Operating Income	90 %	100 %	40 %	40 %	25 %	20 %
Business Services Controllable Expenses	150 %		20 %	20 %
Competitive Natural Gas Sales and Services Business Operating
STI Results	51 %		3 %	3 %
Composite Electric Transmission & Distribution Goal
Achievement	132 %		15 %	15 %	37.5 %
Composite Natural Gas Distribution Goal Achievement	152 %		7 %	7 %	37.5 %
Composite Interstate Pipelines Goal Achievement	141 %		10 %	10 %		55 %
Composite Field Services Goal Achievement	58 %		5 %	5 %		25 %
Total Weightings		100 %	100 %	100 %	100 %	100 %
Funded Achievement Level		90 %	115 %	115 %	129 %	110 %
Awarded Level		90 %	115 %	115 %	129 %	110 %

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Each of the performance objectives is described in detail below.

To determine Core Operating Income, we adjust our reported operating income to remove the effect of specified items, either positive or negative, to reflect true operational business performance in the period being measured. Adjustments are the following:

| • | Income or loss (excluding allowance for funds used during
construction) from any partnership in which the Company holds an
equity interest, which is recorded as equity income per
accounting rules. Partnership income or loss from the Southeast
Supply Header Pipeline joint venture is adjusted to reflect any
financing that is different than the plan; |
| --- | --- |
| • | Income or loss related to the Company’s stranded cost
recovery and Hurricane Ike recovery; |
| • | Any mark-to-market accounting entries and net natural gas inventory adjustments not
reflected in the plan; |
| • | Unplanned restructuring costs; |
| • | Impairment of goodwill; |
| • | The financial impacts of any acquisitions, mergers and
divestitures, including impacts not reflected in the plan
related to the formation of a master limited partnership or
joint venture and any special financing arrangements such as
credit sleeves; and |
| • | The financial impacts of any changes in accounting standards. |

The various levels of achievement for “Core Operating Income,” the most significant performance objective for CenterPoint Energy, as well as each of its business units, are as follows:

	In Millions — Threshold	Target	Maximum	Exceptional
Organizational Unit	($)	($)	($)	($)
CenterPoint Energy	966.0	1,046.0	1,077.0	1,112.0
Electric Transmission & Distribution	361.4	380.4	399.4	418.4
Natural Gas Distribution	173.0	182.1	191.2	200.3
Interstate Pipelines	235.8	245.6	262.8	275.1
Field Services	117.4	122.3	130.9	137.0

The threshold levels above are based on our 2009 business plan, as approved by our Board of Directors, (i) less 4.5% for CenterPoint Energy, (ii) less 5% for Electric Transmission & Distribution and Natural Gas Distribution, and (iii) less 4% for Interstate Pipelines and Field Services. The exceptional levels are based upon exceeding our 2009 approved business plan by 10% for CenterPoint Energy, Electric Transmission & Distribution and Natural Gas Distribution and 12% for Interstate Pipelines and Field Services.

“Business Services Controllable Expenses” is defined as operation and maintenance expenses reported pursuant to generally accepted accounting principles, adjusted to reflect core operational performance. Performance of this objective is compared to the plan amounts established at the beginning of 2009. For 2009, threshold, target and maximum performance levels for this objective were $218.1 million, $211.7 million and $201.1 million, respectively. Actual business controllable expenses were $199.0 million, resulting in achievement at the maximum level of 150%.

“Competitive Natural Gas Sales and Services Business Operating STI Results (BOSR)” is defined as Operating Income:

•	minus a $10 million capital charge;
•	plus accrued to date short term incentive;
•	plus or minus mark-to-market accounting entries;
•	plus or minus net natural gas inventory adjustments;
•	plus impairments of goodwill;

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| • | plus or minus the financial impacts of any changes in accounting
standards; |
| --- | --- |
| • | plus or minus the financial impacts of any acquisitions, mergers
and divestitures, including expenses not reflected in the plan
related to formation of a master limited partnership or joint
ventures and any special financing arrangements such as credit
sleeves; and |
| • | plus unplanned restructuring costs. |

For the Competitive Natural Gas Sales and Services business unit, funding for short term incentive compensation is based on a percentage of BOSR (5.5% for 2009). For 2009, BOSR of $47 million would have resulted in funding for these employees of $2.6 million, which would have been equivalent to achievement of this performance objective at the 100% level for Messrs. Whitlock and Rozzell. The actual BOSR for 2009 was $24 million, resulting in achievement of this performance objective at the 51% level.

“Modified Cash Flow” as used below for the business units is defined as Core Operating Income:

•	plus depreciation and amortization;
•	minus capital expenditures (excluding allowance for funds used
during construction, extraordinary capital projects outside the
scope of the business units’ capital budgets that receive
contemporaneous written approval from the CenterPoint Energy
Executive Committee or Board of Directors, and unplanned
projects required by regulations);
•	adjusted for significant projects planned in 2009 but carried
over to future periods;
•	adjusted for actual carryover capital expenditures from 2008
that differ from plan carryover capital expenditures presented
in the December 2008 Board of Directors presentation;
•	adjusted for the financial impacts of any acquisitions, mergers
and divestures; and
•	adjusted for the financial impacts of any changes in accounting
standards.

The performance levels are based on the 2009 business plan approved by the Board of Directors.

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Electric Transmission & Distribution

The Electric Transmission & Distribution performance objective achievement consisted of the following:

	($ in Millions) — Threshold	Target		Maximum		Exceptional	Weight		Actual — #	%
Financial
Core Operating Income	$ 361.4	$	380.4	$	399.4	$	418.4	27 %	$ 402.0		157 %
Controllable Expenditures	$ 896.7	$	870.6	$	827.1		—	27 %	$ 813.8		150 %
Operational Performance
Customer — Phone Response (% calls answered in 30
seconds)	67.0	%	70.0	%	73.0	%	—	7 %	73.4	%	150 %
Reliability — System Average Interruption Duration
Index (SAIDI)	109		104		99		—	13 %	117		0 %
Composite of AMS/AMR
Achievement (1)	(1	)	(1	)	(1	)	—	13 %	(1	)	150 %
Safety
Recordable Incident Rate (RIR)	4.73		4.49		4.26		—	5 %	3.01		150 %
Lost Time Incident Rate (LTIR)	1.12		1.06		0.95		—	4 %	0.33		150 %
Preventable Vehicle Incident Rate (PVIR)	3.76		3.57		3.38		—	4 %	3.29		150 %
Overall Achievement											132 %

(1) Composite of AMS/AMR Achievement consists of four operational performance measures. Each of the four performance measures, along with their respective threshold, target, maximum and actual results are as follows:

Threshold	Target	Maximum	#	%
Percentage of installed and registered meters that can
communicate	90 %	93 %	95 %	99 %	150 %
Percentage of 15 minute data slots collected on a 24-hour basis	90 %	93 %	95 %	98 %	150 %
Percentage of availability of back-end systems and portals	95 %	97 %	98 %	100 %	150 %
Percentage of completed meter reading routes installed and
registered	90 %	95 %	98 %	110 %	150 %

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Natural Gas Distribution

The Natural Gas Distribution performance objective achievement consisted of the following:

	($ in Millions) — Threshold	Target		Maximum		Exceptional	Weight	Actual — # %
Financial
Core Operating Income	$ 173.0	$	182.1	$	191.2	$ 200.3	27 %	$ 203.7	200 %
Controllable Expenditures	$ 764.5	$	742.2	$	705.1	—	33 %	$ 715.5	136 %
Operational Performance
Customer — Phone Response (% calls answered in 30 seconds)	67.0	%	70.0	%	73.0 %	—	13 %	73.4 %	150 %
JD Power Survey Percentile Rank	>50	% and £ 60%	>25	% and £ 50%	£ 25 %	—	7 %	47 %	100 %
Resource Utilization (Minutes per job)	40:05		39:53		39:16	—	7 %	36:17	150 %
Safety
RIR	3.28		3.12		2.95	—	4 %	2.54	150 %
LTIR	1.00		0.95		0.90	—	4 %	0.66	150 %
PVIR	2.11		2.00		1.90	—	5 %	2.01	95 %
Overall Achievement									152 %

Interstate Pipelines

The Interstate Pipelines performance objective achievement consisted of the following:

	($ in Millions) — Threshold	Target	Maximum	Exceptional	Weight	Actual — # %
Financial
Core Operating Income	$ 235.8	$ 245.6	$ 262.8	$ 275.1	39 %	$ 269.2	176 %
Modified Cash Flow	$ 85.1	$ 102.6	$ 115.7	—	13 %	$ 124.4	150 %
Field Services Core Operating Income	$ 117.4	$ 122.3	$ 130.9	$ 137.0	13 %	$ 102.1	0 %
Operational Performance
Fuel Efficiency Carthage to Perryville Fuel	0.90 %	0.85 %	0.80 %	—	7 %	0.57 %	150 %
Lost and Unaccounted for Gas	0.40 %	0.35 %	0.30 %	—	7 %	0.36 %	90 %
Safety
RIR	1.61	1.53	1.45	—	7 %	1.88	0 %
Environmental Compliance Index	2.45	1.53	0.80	—	7 %	1.76	88 %
Customer Service
# of Operational Alerts posted less than 5 days	2	1	0	—	7 %	0	150 %
Overall Achievement							141 %

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Field Services

The Field Services performance objective achievement consisted of the following:

	($ in Millions) — Threshold		Target		Maximum	Exceptional	Weight		Actual — #	%
Financial
Core Operating Income	$ 117.4		$ 122.3		$ 130.9	$	137.0	46 %	$ 102.1		0 %
Modified Cash Flow	$ (155.1	)	$ (139.1	)	$ (127.1	)	—	13 %	$ (135.3	)	116 %
Interstate Pipelines Core Operating Income	$ 235.8		$ 245.6		$ 262.8	$	275.1	13 %	$ 269.2		176 %
Operational Performance
Receipt Point Pressure	102	%	100	%	98	%	—	7 %	95	%	150 %
Service Star System Availability	97	%	98	%	100	%	—	7 %	100	%	150 %
Well Connects	300		350		400		—	7 %	356		106 %
Safety
RIR	2.31		1.84		1.38		—	7 %	1.67		118 %
Overall Achievement											58 %

Example of Funding and Distribution of the Short Term Incentive Plan Awards

The following example is provided to illustrate the funding and distribution of the short term incentive plan. For purposes of this example, we have assumed a base salary earned of $500,000, a short term incentive plan target of 75% and a funded achievement level of 120%.

Funding of the Short Term Incentive Plan Award:

Base salary earned during the year	$
Short term incentive plan target percentage	× 75 %
Target individual award amount	$ 375,000
Funded achievement level	× 120 %
Funding of the short term incentive plan award	$ 450,000

Distribution of the Short Term Incentive Plan Award:

Funding of the short term incentive plan award per above	$
Formulaic award percentage	× 50 %
Formulaic portion paid	$ 225,000

Any amount paid above the formulaic portion is at the discretion of the Committee.

Equity Incentive Plan Awards

Long Term Incentive Plan Awards Granted in February 2009. To determine the amount of long term incentive compensation granted, each named executive officer’s base salary was multiplied by his long term incentive target percentage. The resulting amount of long term incentive compensation for each of the awards of

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performance shares and stock awards was then divided by the average of the high and low market price of our common stock on the New York Stock Exchange on February 18, 2009. The grants were determined as follows:

Description	McClanahan	Whitlock	Rozzell	Standish	Harper
Base Salary	$ 1,060,000	$ 505,000	$ 475,000	$ 457,000	$ 340,000
Long term incentive target	200%	140%	140%	140%	90%
Long term incentive compensation at target	$ 2,120,000	$ 707,000	$ 665,000	$ 639,800	$ 306,000
Performance share portion (70%)	$ 1,484,000	$ 494,900	$ 465,500	$ 447,860	$ 214,200
Performance shares granted at target (rounded)	119,490	39,840	37,470	36,060	17,250
Stock award portion (30%)	$ 636,000	$ 212,100	$ 199,500	$ 191,940	$ 91,800
Stock award shares granted at target (rounded)	51,200	17,100	16,100	15,500	7,400

Performance Shares. Participants received three separate, equal awards totaling the performance shares granted at target shown above, with vesting of each award based on one of the independent performance objectives listed below:

Performance	Threshold — Achievement	Target Achievement	Maximum Achievement
Objectives	(50%)	(100%)	(150%)
Total shareholder return based upon companies in the S&P Utility Index regulated subset	10th position or higher	Linear interpolation between Threshold and Maximum achievement	3rd position or higher
Core operating income	$3.063 billion	$3.247 billion	$3.378 billion
Modified cash flow	$1.64 billion	$1.845 billion	$1.945 billion

Total Shareholder Return

One performance share award vests based on total shareholder return achieved in comparison to a subset of 18 companies in the S&P Utility Index as of January 1, 2009 that includes CenterPoint Energy. Maximum achievement (150% of target) requires CenterPoint Energy to rank third or higher in that comparison, but no shares would vest if the company ranks below 10th in that comparison (threshold level). For this performance objective, the target number of performance shares granted will vest using linear interpolation between the threshold and maximum achievement levels.

The 18 companies included in our regulated company subset of the S&P Utility Index as of January 1, 2009 were:

Ameren Corporation	Nicor Inc.
American Electric Power Company	NiSource Inc.
CenterPoint Energy, Inc.	Pepco Holdings, Inc.
CMS Energy Corporation	PG&E Corporation
Consolidated Edison, Inc.	Pinnacle West Capital Corporation
DTE Energy Company	Progress Energy, Inc.
Duke Energy Corporation	Southern Company
FirstEnergy Corporation	TECO Energy, Inc.
FPL Group, Inc.	Xcel Energy Inc.

Core Operating Income

One performance share award vests based on core operating income reported over the three-year cycle for the award, with maximum achievement (150% of target) being reached if core operating income reaches the maximum

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level, but no shares would vest if core operating income is below the threshold level. The target number of performance shares granted would vest if core operating income reaches the target level.

Core Operating Income is based on reported operating income adjusted to remove the effect of specified items, either positive or negative, to reflect true operational business performance in the period being measured. Adjustments are the following:

| • | Income or loss (excluding allowance for funds used during
construction) from any partnerships in which the company holds
an equity interest, which is recorded as equity income per
accounting rules. Partnership income or loss from the Southeast
Supply Header Pipeline joint venture is adjusted for any
financing that is different than the plan; |
| --- | --- |
| • | Income or loss related to the Company’s stranded cost
recovery and Hurricane Ike recovery; |
| • | Any mark-to-market accounting entries and net natural gas inventory adjustments not
reflected in the plan; |
| • | Certain restructuring costs incurred in 2011 including
termination benefits provided to current employees that are
voluntarily or involuntarily terminated, costs to terminate a
contract that is not a capital lease and costs to consolidate
facilities or relocate employees; |
| • | Impairment of goodwill; |
| • | The financial impacts of any acquisitions, mergers and
divestitures, including impacts not reflected in the plan
related to the formation of a master limited partnership or
joint venture and any special financing arrangements such as
credit sleeves; and |
| • | The financial impacts of any changes in accounting standards. |

Modified Cash Flow

One performance share award vests based on modified cash flow reported over the three-year cycle for the award, with maximum achievement (150% of target) being reached if modified cash flow reaches the maximum level, but no shares would vest if modified cash flow is less than the threshold level. The target number of performance shares granted would vest if modified cash flow reaches the target level.

Modified Cash Flow is based on our reported operating income, adjusted for those items, either positive or negative, to reflect true operational business performance in the period being measured, as defined below:

Core Operating Income, as calculated above

| • | Plus depreciation and amortization included in the calculation
of the Core Operating Income performance objective (excluding
Transportation Depreciation); |
| --- | --- |
| • | Less capital expenditures (excluding allowance for funds used
during construction and unplanned projects required by
regulation); |
| • | Adjusted for impacts of significant capital projects approved by
the Board of Directors not included in the plan; |
| • | Adjusted for impacts to capital expenditures of any
acquisitions, mergers and divestitures (including any master
limited partnership); and |
| • | Adjusted for impacts to capital expenditures for any changes in
accounting standards. |

Refer to “Compensation Discussion and Analysis — Review of Elements of Compensation — Long Term Incentives” and “— Long Term Incentive Plan Awards in February 2009” for a discussion of vesting and dividend rights associated with awards under our long term incentive plan.

Stock Awards. Participants received a stock award of shares of the Company’s common stock, granted at target, as shown in the table on page 44. Vesting of the stock awards requires continuous service with the Company through the three year vesting period of the award and achievement of a performance objective that

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requires the Company to have declared cash dividends on its common stock during the three-year vesting period totaling at least $2.28 per share.

Outstanding Equity Awards At Fiscal Year-End 2009

The following table provides information regarding the outstanding equity awards held by our named executive officers as of December 31, 2009. The closing stock price on the NYSE on December 31, 2009 was $14.51.

| | Option
Awards (1) | | | | | Stock
Awards (1) | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | Equity | Equity |
| | | | | | | | | Incentive | Incentive |
| | | | Equity | | | | | Plan | Plan |
| | | | Incentive | | | | Market | Awards: | Awards: |
| | | | Plan | | | | Value of | Number of | Market or |
| | Number | | Awards: | | | Number | Shares | Unearned | Payout Value |
| | of | Number of | Number of | | | of Shares | or Units | Shares, | of Unearned |
| | Securities | Securities | Securities | | | or Units | of Stock | Units or | Shares, Units |
| | Underlying | Underlying | Underlying | | | of Stock | That | Other | or Other |
| | Unexercised | Unexercised | Unexercised | Option | | That | Have | Rights That | Rights That |
| | Options | Options | Unearned | Exercise | Option | Have Not | Not | Have Not | Have Not |
| | (#) | (#) | Options | Price | Expiration | Vested | Vested | Vested | Vested |
| Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) (3) | ($) | (#) (2) | ($) |
| McClanahan | 84,873 | — | — | 14.0077 | 2/24/2010 | | | 336,690 | 4,885,372 |
| | 148,864 | — | — | 31.9786 | 3/5/2011 | — | — | — | — |
| | 203,377 | — | — | 6.4378 | 3/4/2012 | — | — | — | — |
| | 103,900 | — | — | 5.6400 | 3/3/2013 | — | — | — | — |
| | 106,100 | — | — | 10.9200 | 3/2/2014 | — | — | — | — |
| Whitlock | 26,522 | — | — | 21.6777 | 7/31/2011 | — | — | 110,442 | 1,602,513 |
| | 76,597 | — | — | 6.4378 | 3/4/2012 | — | — | — | — |
| | 40,600 | — | — | 5.6400 | 3/3/2013 | — | — | — | — |
| | 35,200 | — | — | 10.9200 | 3/2/2014 | — | — | — | — |
| Rozzell | 62,767 | — | — | 31.9786 | 3/5/2011 | — | — | 103,970 | 1,508,605 |
| | 74,263 | — | — | 31.1347 | 4/1/2011 | — | — | — | — |
| | 56,539 | — | — | 6.4378 | 3/4/2012 | — | — | — | — |
| | 37,100 | — | — | 10.9200 | 3/2/2014 | — | — | — | — |
| Standish | 41,254 | — | — | 31.9786 | 3/5/2011 | | | 98,262 | 1,425,781 |
| | 54,106 | — | — | 6.4378 | 3/4/2012 | — | — | — | — |
| | 29,100 | — | — | 5.6400 | 3/3/2013 | — | — | — | — |
| | 24,800 | — | — | 10.9200 | 3/2/2014 | — | — | — | — |
| Harper | — | — | — | — | — | 33,333 | 483,662 | 24,650 | 357,672 |

(1)	None of the awards have been transferred.
(2)	Outstanding stock awards with performance objectives will fully
vest on the following dates:

Grant Date	Type of — Stock Award	Vesting Date	McClanahan	Whitlock	Rozzell	Standish	Harper
February 21, 2007	Stock Award	February 21, 2010	32,300	9,200	8,800	6,700	—
February 20, 2008	Performance Shares	December 31, 2010	93,600	31,002	29,100	28,002	—
February 20, 2008	Stock Award	February 20, 2011	40,100	13,300	12,500	12,000	—
February 18, 2009	Performance Shares	December 31, 2011	119,490	39,840	37,470	36,060	17,250
February 18, 2009	Stock Award	February 18, 2012	51,200	17,100	16,100	15,500	7,400
Total			336,690	110,442	103,970	98,262	24,650

(3) Mr. Harper’s additional stock awards granted upon his employment will vest as follows: 16,667 on December 10, 2010 and 16,666 on December 10, 2011.

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Option Exercises and Stock Vested for Fiscal Year 2009

The following table indicates the number and value of stock options exercised and stock awards vested during 2009.

| | Option Awards — Number of | | Stock
Awards (1) — Number of | |
| --- | --- | --- | --- | --- |
| | Shares | | Shares | |
| | Acquired | Value Realized | Acquired | Value Realized |
| | on Exercise | on Exercise | on Vesting | on Vesting |
| Name | (#) | ($) | (#) | ($) |
| McClanahan | — | — | 97,704 | 1,479,486 |
| Whitlock | — | — | 28,164 | 425,938 |
| Rozzell | — | — | 27,104 | 409,595 |
| Standish | 21,295 | 15,518 | 20,256 | 306,676 |
| Harper | — | — | 16,667 | 246,672 |

(1) For each of the named executive officers, the Stock Awards consist of the following:

	Performance Share Awards — for the 2007-2009		Stock Award Granted — February 22, 2006		Stock Award Granted — December 10, 2008
	Performance Cycle		That Vested February 22, 2009		That Vested December 10, 2009
	Number of	Value Realized	Number of	Value Realized	Number of	Value Realized
	Shares	on
Vesting (a)	Shares	on
Vesting (b)	Shares	on
Vesting (c)
Name	(#)	($)	(#)	($)	(#)	($)
McClanahan	57,304	917,724	40,400	561,762	—	—
Whitlock	16,264	260,468	11,900	165,470	—	—
Rozzell	15,504	248,297	11,600	161,298	—	—
Standish	11,856	189,874	8,400	116,802	—	—
Harper	—	—	—	—	16,667	246,672

| (a) | Value Realized on Vesting for the performance share awards was
determined using the average of the high and low market prices
of our common stock ($13.65) on the New York Stock Exchange on
the date our external auditors completed their review of our
financial statements, on which the performance achievement level
approved by the Compensation Committee was based, together with
a dividend equivalent amount equal to the dividends accrued
during the performance period ($2.365 per share) on our shares
of common stock. The number of performance shares vested was
determined based on an achievement level of 76%. |
| --- | --- |
| (b) | Value Realized on Vesting for the stock awards was determined
using the average of the high and low market prices of our
common stock ($11.855) on the New York Stock Exchange on the
vesting date together with dividend equivalents per share during
the vesting period of $2.05. |
| (c) | Value Realized on Vesting for the stock awards was determined
using the average of the high and low market prices on our
common stock ($14.04) on the New York Stock Exchange on the
vesting date together with dividend equivalents per share during
the vesting period of $0.76. |

Pension Benefits

Pension benefits for our named executive officers are provided under a tax-qualified defined benefit pension plan — the CenterPoint Energy Retirement Plan. In addition, our named executive officers are eligible for benefits under a benefit restoration plan, also a defined benefit plan. Participants are fully vested in both plans after three years of service. For all employees hired on or after January 1, 1999 (which includes Messrs. Whitlock, Rozzell and Harper), participants accumulated a retirement benefit based upon a cash balance formula of four percent of base salary and short term incentive compensation through December 31, 2008. For all employees hired prior to January 1, 1999 (which includes Messrs. McClanahan and Standish), benefits accrued based on a participant’s years of service, final average pay and covered compensation through December 31, 2008. Beginning January 1, 2009, this final average pay formula benefit under the retirement plan was frozen as to any future accruals. The lump sum

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value of the age-65 annuity for all final average pay formula participants was calculated using an interest conversion rate of 4.52% as of January 1, 2009. This lump sum amount will continue to grow annually with interest, based on the 30-year Treasury rate from the prior November of each year, until commencement of the benefit. Effective January 1, 2009 all participants are eligible for a retirement benefit based on a cash balance formula of five percent of base salary and short term incentive compensation. Benefits that may not be provided under the retirement plan because of Internal Revenue Code annual limits on benefits and compensation are made in a bookkeeping account under the benefit restoration plan. This excess benefit amount is determined based on the final average pay formula and the cash balance formula under the retirement plan, as applicable. In order to comply with the requirements under Section 409A of the Internal Revenue Code, we established the CenterPoint Energy Benefit Restoration Plan (“CNP Benefit Restoration Plan”) for excess benefits that accrued or vested from and after 2005. This plan is subject to Section 409A. Benefits accrued under this plan are generally paid in a lump sum six months following separation from service, and all of our named executive officers participate in this plan. Messrs. McClanahan and Standish also have a benefit under the 1991 CenterPoint Energy Benefit Restoration Plan (“1991 Benefit Restoration Plan”), which provides for excess benefits that were earned and vested prior to 2005. The 1991 Benefit Restoration Plan is not subject to Section 409A, and benefits under this plan are paid at the same time and in the same form and manner as distributions from the retirement plan. The benefit restoration plans also provide for the inclusion of short term incentive compensation in the final average pay formula for calculating benefits for certain executives, including Messrs. McClanahan and Standish. Neither benefit restoration plan provides any past service credits or accelerated service benefits.

The table below provides information regarding our named executive officers’ accumulated benefits under our retirement and benefit restoration plans.

		Number of — Years	Present Value — of Accumulated	Payments
		Credited	Benefit	during 2009
Name	Plan Name	Service	($)	($)
Final Average Pay
Formula (1)
McClanahan	Retirement Plan	35.0	1,522,005	—
	CNP Benefit Restoration Plan	35.0	7,725,752	—
	1991 Benefit Restoration Plan	35.0	6,963,214	—
Standish	Retirement Plan	28.0	1,085,235	—
	CNP Benefit Restoration Plan	28.0	1,489,037	—
	1991 Benefit Restoration Plan	28.0	891,610	—
Cash Balance
Formula (2)
Whitlock	Retirement Plan	8.4	85,023	—
	CNP Benefit Restoration Plan	8.4	185,653	—
Rozzell	Retirement Plan	8.8	86,783	—
	CNP Benefit Restoration Plan	8.8	188,839	—
Harper	Retirement Plan	1.1	10,690	—
	CNP Benefit Restoration Plan	1.1	3,858	—

(1) Through December 31, 2008, Messrs. McClanahan and Standish accrued benefits based on years of service, final average pay and covered compensation, which we refer to as the final average pay (FAP) formula. Final average pay means the highest base salary for 36 consecutive months out of the 120 consecutive months immediately preceding the earlier of retirement or December 31, 2008. Messrs. McClanahan and Standish’s retirement plan benefit is calculated under the following formula:

1.5% x FAP x Service + [.44% x (FAP – Social Security Covered Compensation) x Service]

In the final average pay formula, the maximum service is 35 years. In addition, the age 65 benefit is not reduced for early retirement if retirement occurs at age 60 or later with at least 30 years of service. Early retirement subsidies are also provided for participants who are age 55 or older with at least 30 years of service. Messrs. McClanahan and Standish also accrued a benefit under the benefit restoration plans based on the final average pay formula as if the Internal Revenue Code limits did not apply. In addition, short term incentive

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| | compensation is included in the formula for calculating the
benefit payable under the benefit restoration plans for certain
key officers, including Messrs. McClanahan and Standish.
Beginning in 2009, Messrs. McClanahan and Standish accrued
a benefit under the CNP Benefit Restoration Plan based on the
cash balance formula as if the Internal Revenue Code
compensation limits did not apply. In addition,
Mr. McClanahan received approximately seven months of
service (valued at $288,326 as of December 31,
2009) under a supplemental agreement. |
| --- | --- |
| | The present value for Messrs. McClanahan and Standish was
calculated based on benefits accrued through December 31,
2009 assuming retirement at the earliest age without a reduction
in benefits (at least age 60 with at least 30 years of
service). The calculation assumes the participant is equally
likely to commence the benefit in the form of a single life
annuity or a lump sum distribution. The single life annuity is
the normal form of benefit under the plan. Mortality assumptions
for discounting annuities are based on the RP-2000 Combined
Healthy Mortality Table projected to 2009 using Scale AA and an
interest rate of 5.7%. The lump sum distribution is calculated
as the greater of the cash balance amount and the present value
of the accrued benefit commencing at age 65 assuming
interest rates of 4.7%, 5.45% and 5.7%, for benefits paid within
the first five years, 5th through 20th years and all
remaining years, respectively and using the mortality table
prescribed by Section 417(e)(3) of the Internal Revenue
Code. The interest rate for discounting payments back to
December 31, 2009 was 5.7%. These assumptions, where
applicable, are the same assumptions disclosed in “Stock
Based Incentive Compensation Plans and Employee Benefit
Plans — Pension and Postretirement Benefits” in
Note 2(p) in our consolidated financial statements included
in our annual report on Form 10-K for the year ended December 31, 2009. |
| (2) | Messrs. Whitlock, Rozzell and Harper’s benefits are
based solely on the cash balance formula under the retirement
plan. Interest accrues in the current year at the
“applicable interest rate” prescribed under the
Internal Revenue Code for the previous November based upon the
account balance as of the end of the previous year. The interest
rate for the 2009 plan year was 4.0%. In addition,
Messrs. Whitlock, Rozzell and Harper accrued an excess
benefit amount under the CNP Benefit Restoration Plan based on
the cash balance formula as if the Internal Revenue Code annual
benefit and compensation limits did not apply. Mr. Harper
will become fully vested as of December 8, 2011. |
| | The present value for Messrs. Whitlock, Rozzell and Harper
was calculated based on benefits accrued through
December 31, 2009 payable at age 65 (the earliest
retirement age where the benefit is not reduced). Account
balances are assumed to accumulate interest credits until
age 65 at 4.75%. Since this is a cash balance plan, the
lump sum payment is equal to the participant’s account
balance at retirement. The single life annuity is calculated by
dividing the account balance by the present value factor of an
immediate single life annuity assuming interest rates of 4.7%,
5.45% and 5.7% for benefits paid within the first five years,
5th through 20th years and all remaining years,
respectively and using the mortality table prescribed by
Section 417(e)(3) of the Internal Revenue Code. To
calculate the present value of the benefit in the table,
mortality assumptions are based on the RP-2000 Combined Healthy
Mortality Table projected to 2009 using Scale AA, and the
interest rate for discounting payments back to December 31,
2009 is 5.7%. |

Savings Plan and Savings Restoration Plans

Under our savings plan prior to 2009, participants could contribute up to 16%, on a pre-tax and/or after-tax basis, of their plan eligible compensation. We made a matching contribution of 75% of the first six percent contributed by employees on a payroll-period basis. We could make an additional discretionary matching contribution of up to 50% of the first six percent contributed by employees in the prior year determined based on the Company’s overall business performance for that year. In 2009, we paid the full amount of the discretionary match for 2008. The contributions to the savings plan are immediately vested. Effective January 1, 2009, we amended the savings plan to provide that participants may contribute up to 50% on a pre-tax basis of their plan-eligible compensation. In addition, beginning January 1, 2009, the Company makes a matching contribution of 100% of the first 6% contributed by employees on a payroll-period basis and has discontinued the discretionary match under the savings plan. Payment options under the savings plan include (i) a lump sum payment or (ii) annual, semi-annual, quarterly or monthly installments over a period elected by the participant, not to exceed ten years. Once the annual compensation limit under the Internal Revenue Code is reached in the savings plan, CenterPoint

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Energy’s matching contribution is made in a bookkeeping account under the savings restoration plan. In order to comply with the provisions under Code Section 409A, we established the CenterPoint Energy Savings Restoration Plan (“CNP Savings Restoration Plan”) for all benefits earned or vested from and after 2005, and this plan is subject to Section 409A. Benefits under the CNP Savings Restoration Plan are paid in a lump sum following the participant’s separation from service. Benefits earned and vested prior to 2005 are payable under the 1991 CenterPoint Energy Savings Restoration Plan (“1991 Savings Restoration Plan”), and no new benefits are provided from and after 2005 under this plan. The 1991 Savings Restoration Plan is not subject to Section 409A, and benefits are paid under this plan at the same time and in the same form and manner as distributions payable from the savings plan. Earnings on both restoration plans are based on each participant’s annual rate of return on their account in the savings plan. Participants are not permitted to make voluntary deferrals into either savings restoration plan.

Deferred Compensation Plans

Our current deferred compensation plan permits eligible key employees to elect voluntarily each year to defer a percentage of up to 90% of salary and/or short term incentive compensation. The Company amended the Deferred Compensation Plan as of December 31, 2007, renamed it the 1989 Deferred Compensation Plan and froze the plan to new participants and benefit accruals as of December 31, 2007. Effective January 1, 2008, obligations with respect to deferrals under the 1989 Deferred Compensation Plan after December 31, 2004, along with all associated earnings were transferred to and are paid from the 2005 Deferred Compensation Plan, which was adopted effective as of January 1, 2008, to replace the 1989 Deferred Compensation Plan. References to our deferred compensation plan include both our 2005 Deferred Compensation Plan, which covers amounts subject to Section 409A, as well as our 1989 Deferred Compensation Plan, which covers amounts which are exempt from Section 409A. Under the terms of our deferred compensation plan, interest 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. Participants in the plan currently may elect to receive distributions of their deferred compensation and interest in three ways: (i) an early distribution of either 50% or 100% of their account balance in any year that is at least four years from the year of deferral or, if earlier, the year in which they attain age 65, (ii) a lump sum distribution upon retirement or (iii) 15 annual installments commencing upon retirement. If a participant terminates employment prior to age 55, a lump sum distribution of his or her deferral amount plus interest, calculated using the Moody’s rate and excluding the additional two percentage points, will be made regardless of his or her form of election. For deferrals under the 2005 Deferred Compensation Plan, if a participant terminates employment after age 55, the deferral amount plus interest (including the additional two percent) will be paid in accordance with the participant’s distribution elections, in either a lump sum payment in the January after his or her termination or 15 annual installments commencing upon his or her separation from service. For deferrals under the 1989 Deferred Compensation Plan, if a participant terminates employment from and after age 55 but prior to age 60, the deferral amount plus interest (including the additional two percent) will be paid in accordance with the participant’s distribution elections, in either a lump sum payment in the January after his or her separation from service or 15 annual installments commencing upon his or her separation from service. If a participant terminates employment after age 60 under the 1989 Deferred Compensation Plan, the deferral amount plus interest, including the additional two percent, will be paid in accordance with the participant’s distribution elections after he or she reaches age 65. None of the named executive officers elected to defer monies in the plan during 2009.

From 1985 to 1988, we offered the 1985 Deferred Compensation Plan that permitted participants to elect to defer all or part of their eligible compensation in those years. Higher fixed interest rates were available for deferrals made under the 1985 Deferred Compensation Plan as a result of higher prevailing market rates at that time. Distribution payments generally follow the same procedures described above for 15 annual installments; however, the fixed interest rate established at the time of deferral is used.

Each of our deferred compensation plans discussed above is a nonqualified, unfunded plan, and the employees are general, unsecured creditors of CenterPoint Energy. No fund or other assets of CenterPoint Energy have been set aside or segregated to pay benefits under any of these plans. Please refer to “Rabbi Trust” under “Potential Payments upon Change in Control or Termination” on page 56 for funding of the plans upon a change in control.

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Nonqualified Deferred Compensation Table

The following table provides information with respect to benefits under the deferred compensation plans and the savings restoration plans.

		Company	Aggregate	Aggregate	Aggregate
		Contributions	Earnings	Withdrawals/	Balance at
		in 2009	in 2009	Distributions	December 31, 2009
Name	Plan Name	($) (1)	($) (2)	($)	($)
McClanahan	1989 Deferred Compensation Plan	—	111,732	—	1,467,412
	1985 Deferred Compensation
Plan (3)	—	38,241	—	239,512
	CNP Savings Restoration Plan	143,625	169,500	—	794,963
	1991 Savings Restoration Plan	—	120,097	—	563,258
Whitlock	1989 Deferred Compensation Plan	—	403	—	5,295
	CNP Savings Restoration Plan	51,868	47,931	—	282,889
	1991 Savings Restoration Plan	—	31,378	—	185,190
Rozzell	CNP Savings Restoration Plan	47,881	51,825	—	272,357
	1991 Savings Restoration Plan	—	35,695	—	187,591
Standish	1989 Deferred Compensation Plan	—	18,197	—	238,984
	1985 Deferred Compensation
Plan (3)	—	26,437	—	165,578
	CNP Savings Restoration Plan	42,960	41,363	—	199,236
	1991 Savings Restoration Plan	—	24,512	—	118,070
Harper	CNP Savings Restoration Plan	4,476	2,314	—	6,790

| (1) | The Company Contributions in 2009 column for the savings
restoration plans include employer matching contributions that
could not be made to the savings plan due to limitations under
the Internal Revenue Code. Our contributions to the savings plan
and the savings restoration plans for the named executive
officers are also included in the footnote to the All Other
Compensation column of the Summary Compensation Table. |
| --- | --- |
| (2) | Aggregate Earnings in 2009 consist of earnings on prior plan
deferrals. This interest rate for 2009 for the 1989 Deferred
Compensation Plan was 8.24% with interest compounded annually.
Messrs. McClanahan, Whitlock and Standish have deferrals
under this plan. |
| | The interest crediting rate under the terms of the 1985 Deferred
Compensation Plan was a fixed rate based upon the age of the
participant at the time of deferral. Messrs. McClanahan and
Standish are the only named executive officers who previously
deferred under this plan and their interest crediting rate is
19%, with interest compounded annually. The above-market portion
of these 2009 aggregate earnings is reported in the Change in
Pension Value and Nonqualified Deferred Compensation Earnings
column of the Summary Compensation Table. |
| | Aggregate Earnings in 2009 also includes gains and losses on
both savings restoration plans determined based on the
participant’s balances as of January 1, 2009 plus any
matching contributions credited for that year. The gains and
losses are calculated using the annualized rate of return for
the participant’s account in the Savings Plan based on the
investment funds selected under the Savings Plan by the
participant. |
| (3) | In 1985, CenterPoint Energy entered into corporate-owned life
insurance policies on the lives of Messrs. McClanahan and
Standish who contributed to the 1985 Deferred Compensation Plan.
These policies were entered into with their consent. Proceeds
upon their deaths are payable to CenterPoint Energy and are
available to offset the benefit payments from the plan. |

Potential Payments upon Change in Control or Termination

In December 2003, the Compensation Committee recommended to the Board of Directors the adoption of change in control agreements for selected executives to help ensure the executives’ continued full attention to business needs in the event of any change in control transaction as described in the agreements. Those agreements became effective in January 2004. The amounts were slightly modified through December 2008 to comply with final regulations under Section 409A of the Internal Revenue Code. In addition, the Board of Directors approved the adoption of a change in control agreement for Mr. Harper effective January 1, 2009, following his employment with us in December 2008. The amounts payable under the agreement were initially determined based on direction and input from the Committee’s consultant and a review of peer group companies. Our change in control agreements

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with certain executives, including each of our named executive officers, provide for payments and other benefits in the event a covered termination of employment occurs within two years after the completion of a transaction that effects a change in control. A change in control will be deemed to occur under the agreements if:

| • | any person or group becomes the direct or indirect beneficial
owner of 30% or more of our outstanding voting securities,
unless these securities are acquired directly from CenterPoint
Energy; |
| --- | --- |
| • | the members of our Board on the date of the agreement, and
successors designated as provided in the agreement, cease to
constitute a majority of the Board; |
| • | there is a merger or consolidation of, or involving, CenterPoint
Energy unless: |

| • | more than 70% of the surviving corporation’s outstanding
voting securities are owned by former shareholders of
CenterPoint Energy, |
| --- | --- |
| • | if the transaction involves CenterPoint Energy’s
acquisition of another entity, the total fair market value of
the consideration plus long-term debt of business being acquired
does not exceed 50% of the total fair market value of
CenterPoint Energy’s outstanding voting securities, plus
CenterPoint Energy’s consolidated long-term debt, |
| • | no person is the direct or indirect beneficial owner of 30% or
more of the then outstanding shares of voting stock of the
parent corporation resulting from the transaction, and |
| • | a majority of the members of the board of directors of the
parent corporation resulting from the transaction were members
of our Board immediately prior to consummation of the
transaction; or |

• there is a sale or disposition of 70% or more of CenterPoint Energy’s assets unless:

| • | individuals and entities that were beneficial owners of
CenterPoint Energy’s outstanding voting securities
immediately prior to the asset sale are the direct or indirect
beneficial owners of more than 70% of the then outstanding
voting securities of CenterPoint Energy (if it continues to
exist) and of the entity that acquires the largest portion of
the assets (or the entity that owns a majority of the
outstanding voting stock of the acquiring entity), and |
| --- | --- |
| • | a majority of the members of our Board (if CenterPoint Energy
continues to exist) and of the entity that acquires the largest
portion of the assets (or the entity that owns a majority of the
outstanding voting stock of the acquiring entity) were members
of our Board immediately prior to the asset sale. |

Under these agreements, a covered termination occurs if the officer’s employment is terminated for reasons other than death, disability (as defined in our long-term disability plan), termination on or after age 65, involuntary termination for cause (as defined), or resignation of the officer unless such resignation is due to (a) a failure to maintain the officer in his position or a substantially equivalent position; (b) a significant adverse change in the authorities, powers, functions, responsibilities or duties held; (c) a reduction in the officer’s base salary; (d) a significant reduction in the officer’s qualified, nonqualified and welfare benefits; (e) a reduction in the officer’s overall compensation; (f) a change in the location of the officer’s principal place of employment by more than 50 miles; or (g) a failure to provide directors’ and officers’ liability insurance covering the officer.

The agreements provide that we will pay an officer experiencing a covered termination of employment a lump sum amount equal to three times the sum of the officer’s base salary plus short term incentive award at target (two times for Messrs. Standish and Harper). For officers who are not age 55 or older with five years of service, the agreements also provide for a short term incentive lump sum payment based on eligible earnings to the date of termination multiplied by his short term incentive target. All named executive officers other than Mr. Harper meet the age and service requirements and therefore would be entitled to a similar pro rata short term incentive payment under the terms of the short term incentive plan. Three years of service (two years for Messrs. Standish and Harper) will be added for benefit purposes under the retirement plan, and such additional benefit will be paid in the same time and manner that the officer’s benefit under the benefit restoration plan is paid. In addition, the agreements provide for welfare benefits for a period of two years, career transition placement services and the reimbursement of legal fees incurred related to the severance. The agreements also provide for us to make a tax gross-up payment to the officer if the officer is determined to owe any excise tax under Internal Revenue Code Section 4999 on “excess

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parachute payments”; however, the Board has determined that it will no longer include excise tax gross-up payment provisions in new or materially amended change in control agreements with our named executive officers. Excess parachute payments are defined in Internal Revenue Code Section 280G(b) and may include payments under the change in control agreements or other agreements or arrangements, including the change in control provisions of the long term incentive plan awards described below. The tax gross-up payment would be an amount sufficient to make the officer whole, after payment of applicable taxes, including excise taxes, interest and penalties assessed. The total change in control payment is subject to a reduction of up to 10% if such reduction would avoid triggering excise tax.

The change in control agreements are not “negotiated” between CenterPoint Energy and the executives covered by those agreements. Instead, the terms of the agreements and the executives to whom the agreements are offered are approved by the Board of Directors based on the recommendation of the Compensation Committee, with input from the Committee’s consultant. The approved form of agreement is then offered to the designated executives to accept or decline. Our Chief Executive Officer and the Committee’s consultant provide input to the Committee in identifying the participants. Each year the agreements are reviewed by the Committee, with input and review by the Committee’s independent compensation consultant. Although no enhancements have been made to benefits payable under the agreements since the initial approval in 2003, the form of the agreements was revised in 2007, following a review by the Committee’s consultant, to (i) reduce the length of change in control protection from three years to two years for certain executives, (ii) eliminate certain benefits and (iii) limit the term of the agreements to one year with annual review by the Committee to determine whether to continue the agreements. The agreements have also been revised to ensure compliance with Internal Revenue Code Section 409A.

An officer must sign a waiver and release in connection with any claims relating to the executive’s employment with or separation from the Company prior to receiving any benefits under the change in control agreement. The agreements also provide that for one year following a covered termination, an officer is prohibited from hiring or soliciting any employees to leave our employment or solicit or attempt to solicit the business of any of our customers or acquisition prospects. In addition, for one year following a covered termination, an officer is prohibited, without prior written consent, from engaging in any business or accepting employment with or rendering services to a business that is in competition with us. These non-solicit and non-compete restrictions are limited to a 50-mile radius around any geographical area in which we engage in operations or marketing of products or services. The term of the agreements is one year, and they renew automatically for successive one-year terms unless the Board takes action to revise or terminate them.

Change in control provisions in our current long term incentive plan. The change in control agreements described above do not provide for any payments related to outstanding awards under our current long term incentive plan. The terms of outstanding awards to the named executive officers under our current long term incentive plan require us to make payments to these officers in the event of a change in control (which has the same definition contained in the change in control agreements), without regard to whether the officer’s employment is terminated. The different outstanding award types under the long term incentive plan are treated as follows:

Stock Awards . We would be required to settle rights relating to unvested stock awards by delivering to the officers shares of our common stock, without regard to whether any performance-based vesting conditions have been satisfied, together with shares having a market value equal to accrued dividend equivalents on those shares. Alternatively, the Compensation Committee could elect to settle these rights by paying cash in an amount equal to the fair market value of the shares otherwise deliverable.

Performance Shares . We would be required to settle rights relating to unvested performance shares by delivering the number of shares that would be required if performance was at the target achievement level plus dividend equivalent shares as described above. Alternatively, the Compensation Committee could elect to settle these rights by paying cash in an amount equal to the fair market value of the shares otherwise deliverable.

Options . We would be required to settle unexercised stock options from our current long term incentive plan in cash for a per share amount equal to the excess of the fair market value of the common stock over the exercise price.

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Payments in the event of change in control. The table below presents amounts that would have been payable in settlement of outstanding awards under our current long term incentive plan if a change in control had occurred on December 31, 2009. It also presents amounts that would have been payable and the value of benefits provided under the change in control agreements assuming a covered termination of employment occurred on December 31, 2009 following a change in control. The numbers in the table and the accompanying footnotes have been rounded to the nearest one thousand dollars.

Type of Payment	McClanahan	Whitlock	Rozzell	Standish	Harper
Severance amount	$ 6,382,000	$ 2,328,000	$ 2,502,000	$ 1,605,000	$ 1,156,000
Short term incentive
plan (1)	1,060,000	379,000	356,000	343,000	238,000
Long term incentive
plan: (2)
Performance shares	4,690,000	1,496,000	1,411,000	1,289,000	263,000
Stock awards	1,987,000	635,000	600,000	547,000	621,000
Stock
options (3)	2,944,000	1,105,000	590,000	784,000	—
Benefit restoration
plan (4)	368,000	186,000	178,000	89,000	63,000
Health and welfare benefits	17,000	17,000	17,000	17,000	25,000
Outplacement	6,000	6,000	6,000	6,000	6,000
Total benefit	17,454,000	6,152,000	5,660,000	4,680,000	2,372,000
Excise tax gross-up (5)	—	—	—	—	846,000
Total payment	$ 17,454,000	$ 6,152,000	$ 5,660,000	$ 4,680,000	$ 3,218,000

| (1) | Under the terms of our short term incentive plan, an individual
age 55 or older with at least five years of service is
eligible for a pro rata payment upon termination, without regard
to whether it is preceded by a change in control, based on his
eligible earnings to the date of termination multiplied by his
short term incentive target. Messrs. McClanahan, Whitlock,
Rozzell and Standish satisfy the retirement provisions under the
plan, and a change in control does not impact this payment.
Mr. Harper does not satisfy the retirement provisions under
the plan. Refer to “— Payments upon termination
of employment.” |
| --- | --- |
| (2) | Under the terms of our long term incentive plans, amounts
payable in shares would be converted to dollars using the New
York Stock Exchange average of the high and low market prices on
the date on which the change in control occurred (which would be
$14.61). For purposes of the calculations, amounts that would be
payable in shares have been converted to dollars using the New
York Stock Exchange closing price for CenterPoint Energy common
stock on December 31, 2009 (which was $14.51). The change
in control provisions under our current long term incentive plan
are not conditioned upon termination of employment. The payments
are determined as described under “Potential Payments upon
Change in Control — Change in control provisions in
our current long term incentive plan.” Amounts shown for
the long term incentive plan in this table include amounts in
the “Payments upon termination of employment” table
below. |
| (3) | The amounts shown represent the cash payment the officers would
receive upon a change in control for all outstanding options as
of December 31, 2009 granted under our current long term
incentive plan. As of March 3, 2007, the named executive
officers were fully vested in all outstanding options and could
realize the gain on the options at any time through normal
exercises and market sales of the shares acquired. |
| (4) | Amounts shown consist of the increase in cash balance accounts
that would result from crediting an additional three years of
service and interest for Messrs. McClanahan, Whitlock and
Rozzell and an additional two years of service and interest for
Messrs. Standish and Harper. For purposes of calculating
these amounts, balances were projected with the 2010 interest
credit rate of 4.31%. Immediate commencement of the benefit was
also assumed. |
| (5) | The excise tax gross-up amount is calculated in accordance with Internal Revenue Code
Section 280G and takes into account all applicable payments
under the change in control agreements as well as those under
the current long term incentive plan. For purposes of the excise
tax gross-up amount, 120% of the relevant applicable federal rate was used to
discount certain annuity-type benefit payments. For purposes of
this table, no portion of |

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the severance amount has been allocated to non-compete restrictions described above. Depending upon the facts and circumstances, any such allocation may result in a reduction of the excise tax or prevent the excise tax from being triggered for a particular executive.

Upon a change in control, each named executive officer would also receive payment for any fully vested benefits to which he is already entitled or which are required to be provided by law. These benefits include those earned under CenterPoint Energy’s retirement, benefit restoration, savings, savings restoration and deferred compensation plans, as well as the continuation of health coverage required by the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Payments upon termination of employment. Certain benefits are payable to a named executive officer upon his termination of employment other than in the event of a change in control as described above. The table below presents information on the value of short term and long term incentive benefits at the target level of achievement that would be provided if a named executive officer terminated employment as of December 31, 2009. The numbers in the table and the accompanying footnotes have been rounded to the nearest one thousand dollars.

Type of Payment	McClanahan	Whitlock	Rozzell	Standish
Short term incentive
plan (1)	$ 1,060,000	$ 379,000	$ 356,000	$ 343,000	—
Long term incentive
plan: (2)
Performance shares	2,932,000	912,000	861,000	760,000	—
Stock awards	1,153,000	359,000	340,000	298,000	—
Total	$ 5,145,000	$ 1,650,000	$ 1,557,000	$ 1,401,000	—

| (1) | Under the terms of our short term incentive plan, an individual
age 55 with five years of service satisfies the retirement
provisions under the plan and is eligible for a pro rata plan
distribution based on eligible earnings to date multiplied by
his short term incentive target at the target level of
achievement. Messrs. McClanahan, Whitlock, Rozzell and
Standish satisfy the retirement provisions under the plan, and a
termination of employment does not impact this payment.
Mr. Harper does not satisfy the retirement provisions under
the plan. |
| --- | --- |
| (2) | Under the terms of our long term incentive plans, amounts
payable in shares would be converted to dollars using the New
York Stock Exchange average of the high and low market prices on
the date on which the change in control occurred (which would be
$14.61). For purposes of the calculations, amounts that would be
payable in shares have been converted to dollars using the New
York Stock Exchange closing price for CenterPoint Energy common
stock on December 31, 2009 (which was $14.51). Under the
terms of our current long term incentive plan, an individual
age 55 with five years of service satisfies the retirement
provisions under the plan and is eligible for a pro rata plan
distribution. In the case of performance shares, such
distribution is based on the number of days employed in the
performance cycle at the target level of achievement for awards
granted prior to 2009 and the actual level of achievement for
awards granted after 2008. All amounts above have been
calculated assuming the target level of achievement. In the case
of stock awards, such distribution is based on the number of
days employed in the vesting period. Messrs. McClanahan,
Whitlock, Rozzell and Standish satisfy the retirement provisions
under the plan. Mr. Harper, however, does not satisfy the
retirement provisions under the plan. |

Upon termination of employment, each named executive officer would also receive payment for any fully vested benefits to which he is already entitled or which are required to be provided by law. These benefits include those earned under CenterPoint Energy’s retirement, benefit restoration, savings, savings restoration and deferred compensation plans, as well as the continuation of health coverage required by COBRA.

Payments upon termination due to death. If a named executive officer had died on December 31, 2009, the officer’s designated beneficiaries would have been entitled to substantially the same amounts set forth in the table above for payments under the short term and long term incentive plans. All amounts would be paid at the time of death. The table below presents information on the value of the benefits also payable if a named executive officer

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had died on December 31, 2009. The numbers in the table and the accompanying footnotes have been rounded to the nearest one thousand dollars. The beneficiaries would be entitled to the following amounts:

Type of Payment	McClanahan (1)	Whitlock	Rozzell	Standish	Harper
Executive life insurance plan	$ 2,120,000	$ 1,010,000	$ 950,000	$ 914,000	$ —
Executive benefit plan	5,830,000	—	—	2,514,000	—
Basic life insurance	50,000	50,000	50,000	50,000	50,000
Total	$ 8,000,000	$ 1,060,000	$ 1,000,000	$ 3,478,000	$ 50,000

(1) In 1986, CenterPoint Energy entered into a corporate-owned life insurance policy on the life of Mr. McClanahan who participates in the executive benefit plan. This policy was entered into with his consent. Proceeds upon his death are payable to CenterPoint Energy and are available to offset the benefit payments from the plan.

Each named executive officer’s beneficiaries would also receive payment for any fully vested benefits to which they are already entitled or which are required to be provided by law. These benefits include those earned under CenterPoint Energy’s retirement, benefit restoration, savings, savings restoration and deferred compensation plans, as well as the continuation of health coverage required by COBRA.

Payments upon disability. If a named executive officer becomes disabled as defined under our long term disability plan, he would receive the amounts shown above for a termination of employment other than in connection with a change in control. Any unvested options become exercisable under the terms of the current long term incentive plan and remain exercisable for one year.

Rabbi Trust

We maintain a trust agreement with an independent trustee establishing a springing rabbi trust for the purpose of funding benefits payable to participants (including each of our named executive officers) under our deferred compensation plans, benefit restoration plans and savings restoration plans and in some instances our long term incentive plan agreements and change in control agreements. The trust is a grantor trust, irrevocable except in the event of an unfavorable ruling by the Internal Revenue Service as to the tax status of the trust or certain changes in tax law. It is currently funded with a nominal amount of cash. Future contributions will be made to the grantor trust if and when required by the provisions of the covered plans or when required by our Benefits Committee. If there is a change in control (defined in substantially the same manner as in the change in control agreements described under “Potential Payments upon Change in Control”), the grantor trust must be fully funded, within 15 days following the change in control, with an amount equal to the entire benefit to which each participant would be entitled under the covered plans as of the date of the change in control (calculated on the basis of the present value of the projected future benefits payable under the covered plans). The assets of the grantor trust are required to be held separate and apart from the other funds of CenterPoint Energy and its subsidiaries, but remain subject to the claims of general creditors under applicable state and federal law.

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Equity Compensation Plan Information

The following table sets forth information about CenterPoint Energy’s common stock that may be issued under our existing equity compensation plans as of December 31, 2009.

securities to be				Number of
issued upon		Weighted		securities remaining
exercise of		average exercise		available for future
outstanding		price of outstanding		issuance
options, warrants		options, warrants		under equity
and rights		and rights		compensation plans
Equity compensation plans approved by security
holders (1)	7,711,754	(2)	17.93	(3)	13,163,001	(4)
Equity compensation plans not approved by security
holders (5)	62,425	(5)	19.57	(3)	—
Totals	7,774,179		17.95		13,163,001

| (1) | Plans approved by shareholders consist of the 1994 Long Term
Incentive Compensation Plan, the 2001 Long-Term Incentive Plan,
the 2009 Long Term Incentive Plan and the Stock Plan for Outside
Directors. No future grants may be made under the 1994 and 2001
plans. |
| --- | --- |
| (2) | Includes, in addition to shares underlying options, an aggregate
of 3,199,283 shares issuable upon settlement of outstanding
grants of 2,309,769 performance shares (assuming maximum
performance is achieved for performance cycles commencing 2008
and later) and 889,514 shares issuable upon settlement of
outstanding grants of stock awards. |
| (3) | The weighted average exercise price applies to outstanding
options, without taking into account performance shares or stock
awards which do not have an exercise price. |
| (4) | The securities remaining available for issuance may be issued in
the form of stock options, stock appreciation rights, restricted
stock, restricted stock units, stock awards, performance units
and performance shares. The shares remaining available for
issuance generally may be used for any of these types of awards,
except that the Stock Plan for Outside Directors provides only
for awards of common stock. |
| (5) | Plans not approved by shareholders consist of the Common Stock
Participation Plan for Designated New Employees and Non-Officer
Employees. Outstanding awards under the Common Stock
Participation Plan, in which participation was limited to new
employees and existing employees who were not officers of
CenterPoint Energy, generally vested in equal annual increments
over three years from the grant date. No future grants may be
made under the Common Stock Participation Plan. |

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Report of the Compensation Committee

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in CenterPoint Energy’s proxy statement on Schedule 14A for its 2010 annual meeting, which is incorporated by reference in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, each as filed with the Securities and Exchange Commission.

Thomas F. Madison, Chairman Donald R. Campbell Derrill Cody Michael P. Johnson Peter S. Wareing Sherman M. Wolff

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Report of the Audit Committee

The Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of CenterPoint Energy. During 2009, the Audit Committee met five times, including meetings to discuss the interim financial information contained in each quarterly earnings announcement with management and Deloitte & Touche LLP, CenterPoint Energy’s independent registered public accounting firm (independent auditors), prior to public release.

In discharging its oversight responsibility as to the audit process, the Audit Committee (a) obtained from the independent auditors a formal written statement describing all relationships between the auditors and CenterPoint Energy that might bear on the auditors’ independence consistent with applicable Public Company Accounting Oversight Board requirements and (b) discussed with the auditors any relationships that may impact their objectivity and independence. The Audit Committee also discussed with management and the independent auditors the quality and adequacy of CenterPoint Energy’s internal controls. The Audit Committee reviewed with the independent auditors their audit plans, audit scope, and identification of audit risks.

The Audit Committee discussed and reviewed with the independent auditors all communications and other matters required to be discussed by generally accepted auditing standards, including those described in Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees” and discussed and reviewed the results of the independent auditors’ examination of the financial statements. The Audit Committee also discussed the results of the internal audit examinations.

Management has the responsibility for the preparation of CenterPoint Energy’s financial statements and for its internal controls and the independent auditors have the responsibility for the examination of those statements and the related audit of internal control over financial reporting. The Audit Committee reviewed and discussed the audited financial statements of CenterPoint Energy as of and for the fiscal year ended December 31, 2009, with management and the independent auditors. The Audit Committee also reviewed and discussed with management and the independent auditors management’s report and the report and attestation of the independent auditors on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

Based on the above-mentioned review and discussions with management and the independent auditors, the Audit Committee recommended to the Board that CenterPoint Energy’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2009, for filing with the Securities and Exchange Commission. The Audit Committee also reappointed, subject to ratification, Deloitte & Touche as CenterPoint Energy’s independent auditors for the fiscal year ending December 31, 2010.

Donald R. Campbell, Chairman Janiece M. Longoria Robert T. O’Connell Susan O. Rheney Michael E. Shannon Sherman M. Wolff

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Principal Accounting Firm Fees

Aggregate fees related to services provided to CenterPoint Energy as a consolidated entity for the fiscal years ending December 31, 2009 and 2008 by CenterPoint Energy’s principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, are set forth below.

	Year Ended December 31, — 2009	2008
Integrated audit of financial statements and internal control
over financial
reporting (1)	$ 5,491,000	$ 5,653,750
Audit-related
fees (2)	404,100	258,969
Total audit and audit-related fees	5,895,100	5,912,719
Tax fees	—	—
All other fees	—	—
Total fees	$ 5,895,100	$ 5,912,719

| (1) | For 2009 and 2008, amounts include fees for services provided by
the principal accounting firm relating to the integrated audit
for financial statements and internal control over financial
reporting, statutory audits, attest services, and regulatory
filings. |
| --- | --- |
| (2) | For 2009 and 2008, includes fees for consultations concerning
financial accounting and reporting standards and various agreed-upon or expanded procedures related to accounting and/or billing
records to comply with financial accounting or regulatory
reporting matters. |

| Audit Committee Policies and Procedures for Preapproval of Audit and Non-Audit Services |
| --- |
| During 2009, no preapproval requirements were waived for
services included in the Audit-related fees, Tax fees and All
other fees captions of the fee table above pursuant to the
limited waiver provisions in applicable rules of the Securities
and Exchange Commission. |

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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS (ITEM 2)

The Audit Committee has appointed Deloitte & Touche LLP as independent auditors to conduct the annual audit of CenterPoint Energy’s accounts for the year 2010. Deloitte & Touche LLP (and their predecessors) have served as independent auditors for CenterPoint Energy and its predecessors since 1932. Ratification requires the affirmative vote of a majority of shares of common stock voted for or against the matter. If the appointment is not ratified by the shareholders, the Audit Committee will reconsider the appointment.

Representatives of Deloitte & Touche LLP will be present at the annual meeting and will have an opportunity to make a statement if they wish. They will be available to respond to appropriate questions from shareholders at the meeting.

Your Board of Directors recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as independent auditors.

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| General Information | We began mailing this proxy statement and the accompanying proxy
card to shareholders on March 12, 2010. The proxy statement
and proxy card are being furnished at the direction of your
Board of Directors. We will pay all solicitation costs,
including the fee of Morrow & Co., who will help us
solicit proxies, of $9,500, plus expenses. We will reimburse
brokerage firms, nominees, fiduciaries, custodians, and other
agents for their expenses in distributing proxy material to the
beneficial owners of our common stock. In addition, certain of
our directors, officers and employees may solicit proxies by
telephone and personal contact. |
| --- | --- |
| | Your Board of Directors does not intend to bring any other
matters before the meeting and has not been informed that any
other matters are to be properly presented to the meeting by
others. If other business is properly raised, your proxy card
authorizes the people named as proxies to vote as they think
best, unless you withhold authority to do so in the proxy card. |
| Shareholder Proposals for 2011 Annual
Meeting | Any shareholder who intends to present a proposal at the 2011
annual meeting of shareholders and who requests inclusion of the
proposal in CenterPoint Energy’s 2011 proxy statement and
form of proxy in accordance with applicable rules of the
Securities and Exchange Commission must file such proposal with
us by November 12, 2010. |
| | Our bylaws also require advance notice of other proposals by
shareholders to be presented for action at an annual meeting. In
the case of the 2011 annual meeting, the required notice must be
received by our Corporate Secretary between October 24,
2010 and January 22, 2011. The bylaws require that the
proposal must constitute a proper subject to be brought before
the meeting and that the notice must contain prescribed
information, including a description of the proposal and the
reasons for bringing it before the meeting, proof of the
proponent’s status as a shareholder and the number of
shares held and a description of all arrangements and
understandings between the proponent and anyone else in
connection with the proposal as well as other procedural
requirements. If the proposal is for an amendment of the bylaws,
the notice must also include the text of the proposal and be
accompanied by an opinion of counsel to the effect the proposal
would not conflict with our Restated Articles of Incorporation
or Texas law. A copy of the bylaws describing the requirements
for notice of shareholder proposals may be obtained on our
website at www.centerpointenergy.com . |
| Director Nominations for 2011 Annual
Meeting | Our bylaws provide that a shareholder may nominate a director
for election if the shareholder sends a notice to our Corporate
Secretary identifying any other person making such nomination
with the shareholder and providing proof of shareholder status.
This notice must be received at our principal executive offices
between October 24, 2010 and January 22, 2011. The
shareholder must also provide the documentation and information
about the nominee required by our bylaws, including information
about the nominee that would be required to be disclosed in the
proxy statement. CenterPoint Energy is not required to include
any shareholder proposed nominee in the proxy statement. You may
obtain a copy of the bylaws describing the requirements for |

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| | nomination of director candidates by shareholders on our website
at www.centerpointenergy.com . |
| --- | --- |
| Section 16(a) Beneficial Ownership
Reporting Compliance | Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers, and holders of more
than 10% of our common stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes in ownership of our common stock. Except for a
Form 4 for Mr. Crosswell that was filed late, we
believe that during the fiscal year ended December 31,
2009, all other officers and directors complied with these
filing requirements. |
| Householding of Annual Meeting
Materials | In accordance with notices previously sent to many shareholders
who hold their shares through a bank, broker or other holder of
record (“street-name shareholders”) and share a single
address, only one annual report and proxy statement is being
delivered to that address unless contrary instructions from any
shareholder at that address were received. This practice, known
as “householding,” is intended to reduce our printing
and postage costs. However, any such street-name shareholder
residing at the same address who wishes to receive a separate
copy of this proxy statement or the accompanying annual report
to shareholders may request a copy by contacting the bank,
broker or other holder of record or by contacting us by
telephone at (888) 468-3020. Street-name shareholders who are currently receiving householded
materials may revoke their consent, and street-name shareholders
who are not currently receiving householded materials may
request householding of our future materials, by contacting
Broadridge Financial Services, Inc., either by calling toll free
at (800) 542-1061 or by writing to Broadridge, Householding Department, 51
Mercedes Way, Edgewood, New York 11717. If you revoke your
consent you will be removed from the “householding”
program within 30 days of Broadridge’s receipt of your
revocation, and each shareholder at your address will receive
individual copies of our future materials. |
| Annual Report to Shareholders | The Annual Report to Shareholders, which includes a copy of our
annual report on Form 10-K containing our consolidated financial statements for the year
ended December 31, 2009, accompanies the proxy material
being mailed to all shareholders. The Annual Report is not part
of the proxy solicitation material. |

By Order of the Board of Directors,

●	●
Milton Carroll	David M. McClanahan
Chairman of the Board	President and Chief Executive Officer

March 12, 2010

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CENTERPOINT ENERGY, INC. C/O INVESTOR SERVICES P.O. BOX 45 5 HOUSTON, TX 7721 -45 5 VOTE BY INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by CenterPoint Energy, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE — 1-8 -69 -69 3 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to CenterPoint Energy, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M2 629-P89618 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY CENTERPOINT ENERGY, INC. Vote on Directors 1. Election of nominees for directors. For Against Abstain The nominees for directors are: 1a. Donald R. Campbell 1b. Milton Carroll 1c. Derrill Cody 1d. Michael P. Johnson 1e. David M. McClanahan 1f. Robert T. O’Connell 1g. Susan O. Rheney 1h. R. A. Walker 1i. Peter S. Wareing For address changes and/or comments, please check this box and write them on the back where indicated. For Against Abstain Vote on Proposal 2. Ratify the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Yes No Withhold granting of discretionary authority to vote on any other matters that may properly come before the annual meeting. Please indicate if you plan to attend this meeting. Please indicate if you plan to attend this meeting. Note: Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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ADMISSION TICKET CENTERPOINT ENERGY, INC. 2 1 ANNUAL MEETING OF SHAREHOLDERS Thursday, April 22, 2 1 9: a.m. Central Time Auditorium 1111 Louisiana Street Houston, Texas 77 2 This admission ticket admits only the named shareholder. Note: If you plan on attending the Annual Meeting in person, please bring, in addition to this Admission Ticket, a proper form of identification. The use of video or still photography at the Annual Meeting is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection. Your compliance is appreciated. M2 63 -P89618 CENTERPOINT ENERGY, INC. 2 1 Annual Meeting of Shareholders Proxy — Common Stock This Proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints Scott E. Rozzell and Richard B. Dauphin, or either of them, as proxies, with full power of substitution, to vote as designated on the reverse side, all shares of common stock held by the undersigned at the Annual Meeting of Shareholders of CenterPoint Energy, Inc. to be held on Thursday, April 22, 2 1 , at 9: a.m. in the auditorium of 1111 Louisiana Street, Houston, Texas, or any adjournments thereof, and with discretionary authority to vote on all other matters that may properly come before the meeting, unless such discretionary authority is withheld. If you wish to vote in accordance with the recommendations of the Board of Directors, you may just sign and date on the reverse side and mail in the postage-paid envelope provided, or direct your vote by Internet or telephone as described on the reverse side. Specific choices may be made on the reverse side. In absence of instructions to the contrary, the shares represented will be voted in accordance with the Board’s recommendation. The nominees for directors are Donald R. Campbell, Milton Carroll, Derrill Cody, Michael P. Johnson, David M. McClanahan, Robert T. O’Connell, Susan O. Rheney, R. A. Walker and Peter S. Wareing. The terms for directors will expire in 2 11. The Board of Directors recommends a vote FOR the nominees for directors and FOR the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

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CENTERPOINT ENERGY, INC. C/O INVESTOR SERVICES P.O. BOX 45 5 HOUSTON, TX 7721 -45 5 VOTE BY

INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 19, 2 1 . Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by CenterPoint Energy, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE — 1-8 -69 -69 3 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 19, 2 1 . Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to CenterPoint Energy, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M2 631-P89618 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY CENTERPOINT ENERGY, INC. Vote on Directors 1. Election of nominees for directors. For Against Abstain The nominees for directors are: 1a. Donald R. Campbell 1b. Milton Carroll 1c. Derrill Cody 1d. Michael P. Johnson 1e. David M. McClanahan 1f. Robert T. O’Connell 1g. Susan O. Rheney 1h. R. A. Walker 1i. Peter S. Wareing For address changes and/or comments, please check this box and write them on the back where indicated. For Against Abstain Vote on Proposal 2. Ratify the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Yes No Withhold granting of discretionary authority to vote on any other matters that may properly come before the annual meeting. Please indicate if you plan to attend this meeting. Note: Please sign exactly as name appears hereon. Signature [PLEASE SIGN WITHIN BOX] Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholder Meeting to be Held April 22, 2 1 . The proxy statement and annual report to shareholders are available at: http://materials.proxyvote.com/15189T This proxy covers all shares for which the undersigned has the right to give voting instructions to Vanguard Fiduciary Company, Trustee of the Reliant Energy, Inc. Savings Plan, Reliant Energy, Inc. Union Savings Plan and STP Nuclear Operating Company Savings Plan. This proxy, when properly executed, will be voted as directed. If no direction is given to the Trustee by 11:59 p.m. Eastern Time on April 19, 2 1 Vanguard Fiduciary Company, as Trustee, will vote the shares held in the plans in the same proportion as votes received from other participants in the plans. M2 632-P89618 CENTERPOINT ENERGY, INC. 2 1 Annual Meeting of Shareholders Voting Directions to Trustee — Common Stock This Proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints Vanguard Fiduciary Company, to vote as designated on the reverse side, all shares of common stock held by the undersigned at the Annual Meeting of Shareholders of CenterPoint Energy, Inc. to be held on Thursday, April 22, 2 1 , at 9: a.m. in the auditorium of 1111 Louisiana Street, Houston, Texas, or any adjournments thereof, and with discretionary authority to vote on all other matters that may properly come before the meeting, unless such discretionary authority is withheld. If you wish to vote in accordance with the recommendations of the Board of Directors, you may just sign and date on the reverse side and mail in the postage-paid envelope provided, or direct your vote by Internet or telephone as described on the reverse side. Specific choices may be made on the reverse side. In absence of instructions to the contrary, the shares represented will be voted in accordance with the Board’s recommendation. The nominees for directors are Donald R. Campbell, Milton Carroll, Derrill Cody, Michael P. Johnson, David M. McClanahan, Robert T. O’Connell, Susan O. Rheney, R. A. Walker and Peter S. Wareing. The terms for directors will expire in 2 11. The Board of Directors recommends a vote FOR the nominees for directors and FOR the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

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CENTERPOINT ENERGY, INC. C/O INVESTOR SERVICES P.O. BOX 45 5 HOUSTON, TX 7721 -45 5 VOTE BY INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 15, 2 1 . Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by CenterPoint Energy, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE — 1-8 -69 -69 3 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 15, 2 1 . Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to CenterPoint Energy, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M2 633-P89618 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY CENTERPOINT ENERGY, INC. Vote on Directors 1. Election of nominees for directors. For Against Abstain The nominees for directors are: 1a. Donald R. Campbell 1b. Milton Carroll 1c. Derrill Cody 1d. Michael P. Johnson 1e. David M. McClanahan 1f. Robert T. O’Connell 1g. Susan O. Rheney 1h. R. A. Walker 1i. Peter S. Wareing For address changes and/or comments, please check this box and write them on the back where indicated. Note: Please sign exactly as name appears hereon. Signature [PLEASE SIGN WITHIN BOX] Date For Against Abstain Vote on Proposal 2. Ratify the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Yes No Withhold granting of discretionary authority to vote on any other matters that may properly come before the annual meeting. Please indicate if you plan to attend this meeting.

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Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholder Meeting to be Held April 22, 2 1 . The proxy statement and annual report to shareholders are available at: http://materials.proxyvote.com/15189T This proxy covers all shares for which the undersigned has the right to give voting instructions to The Northern Trust Company, Trustee of the CenterPoint Energy Savings Plan. This proxy, when properly executed, will be voted as directed. If no direction is given to the Trustee by 11:59 p.m. Eastern Time on April 15, 2 1 The Northern Trust Company, as Trustee, will vote the shares held in the plan in the same proportion as votes received from other participants in the plan. M2 634-P89618 CENTERPOINT ENERGY, INC. 2010 Annual Meeting of Shareholders Voting Directions to Trustee — Common Stock This Proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints The Northern Trust Company, to vote as designated on the reverse side, all shares of common stock held by the undersigned at the Annual Meeting of Shareholders of CenterPoint Energy, Inc. to be held on Thursday, April 22, 2 1 , at 9: a.m. in the auditorium of 1111 Louisiana Street, Houston, Texas, or any adjournments thereof, and with discretionary authority to vote on all other matters that may properly come before the meeting, unless such discretionary authority is withheld. If you wish to vote in accordance with the recommendations of the Board of Directors, you may just sign and date on the reverse side and mail in the postage-paid envelope provided, or direct your vote by Internet or telephone as described on the reverse side. Specific choices may be made on the reverse side. In absence of instructions to the contrary, the shares represented will be voted in accordance with the Board’s recommendation. The nominees for directors are Donald R. Campbell, Milton Carroll, Derrill Cody, Michael P. Johnson, David M. McClanahan, Robert T. O’Connell, Susan O. Rheney, R. A. Walker and Peter S. Wareing. The terms for directors will expire in 2 11. The Board of Directors recommends a vote FOR the nominees for directors and FOR the appointment of Deloitte & Touche LLP as independent auditors for 2 1 . Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

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