<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 8, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOUSTON INDUSTRIES INCORPORATED
(Exact name of registrant as specified in its charter)
TEXAS 74-1885573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 POST OAK PARK
4400 POST OAK PARKWAY
HOUSTON, TEXAS 77027
(713) 629-3000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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WILLIAM A. CROPPER
VICE PRESIDENT AND TREASURER
HOUSTON INDUSTRIES INCORPORATED
5 POST OAK PARK
4400 POST OAK PARKWAY
HOUSTON, TEXAS 77027
(713) 629-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
PROPOSED
PROPOSED MAXIMUM MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT(2) PRICE(2) FEE(3)
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<S> <C> <C> <C> <C>
Common Stock, without par
value (1)................. 4,000,000 $183,000,000 $45.75 $63,103.89
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(1) Includes preference stock purchase rights of one Right per share associated
with the Common Stock.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high and
low prices reported on the New York Stock Exchange Composite Tape on
February 1, 1994.
(3) As no separate consideration is payable for the Rights, the registration
fee for such securities is included in the fee for the Common Stock.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 8, 1994
PROSPECTUS
HOUSTON INDUSTRIES INCORPORATED
4,000,000 SHARES
COMMON STOCK
INVESTOR'S CHOICE PLAN
Houston Industries Incorporated (the "Company") hereby offers participation
in its Investor's Choice Plan ("Investor's Choice" or the "Plan"). The Plan is
designed to provide investors with a convenient and economical way to purchase
shares of the Company's common stock, without par value, including associated
preference stock purchase rights ("Common Stock"), and to reinvest all or a
portion of the cash dividends paid and interest payments made on certain
securities of the Company and its subsidiaries (the "Eligible Securities") in
shares of Common Stock.
PARTICIPANTS IN INVESTOR'S CHOICE MAY:
. Reinvest all or a portion of cash dividends paid or interest payments made
on Eligible Securities registered in their names or Common Stock credited
to their Plan accounts in shares of Common Stock.
. Make an initial investment in Common Stock with a cash payment of at least
$250 or, if already a holder of Eligible Securities, increase their
investment in Common Stock by making optional cash payments at any time of
at least $50 for any single investment, up to a maximum of $120,000 per
calendar year.
. Receive, upon written request, certificates for whole shares of Common
Stock credited to their Plan accounts.
. Deposit certificates representing Common Stock into the Plan for
safekeeping.
. Sell shares of Common Stock credited to their Plan accounts through the
Plan.
Shares of Common Stock will be purchased under the Plan, at the option of the
Company, from newly issued shares, shares held in the treasury of the Company
or shares purchased in the open market. Any open market purchases will be
effected through an Independent Agent (as hereinafter defined) selected by the
Company. The Common Stock is listed on the New York, Midwest and London Stock
Exchanges. The closing price of the Common Stock on February 4, 1994 on the New
York Stock Exchange was $45 7/8.
The purchase price of newly issued or treasury shares of Common Stock
purchased under the Plan for an Investment Date (as hereinafter defined) will
be the average of the high and low sales prices of the Common Stock reported on
the New York Stock Exchange Composite Tape as published in The Wall Street
Journal for the trading day preceding that Investment Date. The price of shares
of Common Stock purchased or sold in the open market will be the weighted
average price per share (adjusted for brokerage commissions, any related
service charges and applicable taxes) of the aggregate number of shares
purchased or sold, respectively, in the open market for the relevant period.
The Company will pay the costs of administration of the Plan, except that
Investor's Choice participants will bear the cost of brokerage commissions, any
related service charges and applicable taxes relating to shares of Common Stock
purchased or sold in the open market.
To the extent required by applicable law in certain jurisdictions, including
Arizona, Florida, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma and
Vermont, shares of Common Stock offered under Investor's Choice to persons not
presently record holders of Common Stock are offered only through a registered
broker/dealer in such jurisdictions.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is February , 1994
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and at the Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at its principal office at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Such reports,
proxy statements and other information concerning the Company may also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005 and the Midwest Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60603, on which the Common Stock is listed.
This Prospectus constitutes a part of a registration statement (together with
all amendments and exhibits thereto, the "Registration Statement") filed by the
Company with the Commission under the Securities Act of 1933, as amended
("Securities Act"). As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information contained in the
Registration Statement, and reference is made to the Registration Statement for
further information with respect to the Company and the shares of Common Stock
registered under the Registration Statement. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of
such document so filed. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 1-7629), are incorporated by
reference into this Prospectus and shall be deemed to be a part hereof:
(1) the Company's Annual Report on Form 10-K for the year ended December
31, 1992;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, June 30, 1993 and September 30, 1993;
(3) the Company's Current Reports on Form 8-K dated March 10, 1993, June
17, 1993, June 25, 1993 and July 1, 1993; and
(4) the descriptions of each of (a) the Common Stock, which is contained
in the Company's Registration Statement on Form 8-A dated January 14, 1977,
as amended by Form 8 dated July 14, 1986, and (b) the Company's Rights to
Purchase Preference Stock, which is contained in the Company's Registration
Statement on Form 8-A dated July 16, 1990.
All documents subsequently filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of Common Stock made by this Prospectus shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference into this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company hereby undertakes to provide copies of any or all of the
documents referred to above that have been or may be incorporated by reference
into this Prospectus (not including exhibits to the documents that are
incorporated by reference unless such exhibits are specifically incorporated by
reference into such documents) without charge to each recipient of a copy of
this Prospectus, upon written or oral request of the recipient. Requests for
copies of such documents or for additional information regarding the Plan and
its Administrator should be directed in writing or by telephone to the Investor
Relations Department, Houston Industries Incorporated, P. O. Box 4505, Houston,
Texas 77210, telephone (800) 231-6406 (if calling from outside Texas) or (800)
392-4261 (if calling from inside Texas) (toll free in either case) or (713)
629-3060.
THE COMPANY AND ITS SUBSIDIARIES
The Company is a holding company operating principally in two business
segments, the electric utility business and the cable television business. The
Company conducts its operations primarily through three subsidiaries: Houston
Lighting & Power Company ("HL&P"), its principal operating subsidiary, KBLCOM
Incorporated ("KBLCOM") and Houston Industries Energy, Inc. ("HI Energy"). The
Company is a holding company as defined in the Public Utility Holding Company
Act of 1935, as amended (the "Holding Company Act"), but is exempt from
regulation as a "registered" holding company under the Holding Company Act.
HL&P is engaged in the generation, transmission, distribution and sale of
electric energy and serves customers in an approximately 5,000 square mile area
of the Texas Gulf Coast, including Houston. As of September 30, 1993, the total
assets and common stock equity of HL&P represented 91% of the Company's
consolidated assets and 113% of the Company's consolidated common stock equity,
respectively. For the twelve-month period ended September 30, 1993, the
operations of HL&P accounted for substantially all of the Company's
consolidated net income.
The cable television operations of the Company are conducted through KBLCOM
and its subsidiaries. This segment includes five cable television systems
located in four states and a 50% interest in Paragon Communications
("Paragon"), a partnership which owns systems located in seven states. As of
September 30, 1993, a wholly owned subsidiary of KBLCOM served approximately
592,000 basic cable customers subscribing to approximately 475,000 premium
programming units and, according to information provided by Paragon's managing
partner, Paragon served approximately 908,000 basic cable customers subscribing
to approximately 536,000 premium programming units.
HI Energy was recently organized by the Company to participate in domestic
and foreign power generation projects and to invest in the privatization of
foreign electric utilities. HI Energy is actively engaged in the evaluation of
several such projects, but has not yet committed significant financial or other
resources to any single project.
The address of the principal executive offices of the Company is 5 Post Oak
Park, 4400 Post Oak Parkway, Houston, Texas 77027. Its telephone number is
(713) 629-3000.
APPLICATION OF PROCEEDS
Since purchases of Common Stock under the Plan may be satisfied by any of (i)
the purchase of new shares of Common Stock issued by the Company, (ii) the
purchase of shares of Common Stock held in the Company's treasury, or (iii) the
purchase of shares of Common Stock in the open market, the number of shares of
Common Stock, if any, that the Company ultimately will sell under Investor's
Choice is not known. If newly issued or treasury shares of Common Stock are
purchased under the Plan, the proceeds from such sales will be used for general
corporate purposes, including, without limitation, the redemption, repayment or
retirement of outstanding indebtedness of the Company or the advance or
contribution of funds to one or more of the Company's subsidiaries to be used
for their general corporate purposes, including, without limitation, the
redemption, repayment or retirement of indebtedness or preferred stock of one
or more of such subsidiaries. The Company will not receive any proceeds when
shares of Common Stock are purchased under the Plan in the open market.
3
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
INVESTOR'S CHOICE PLAN
PURPOSE
The purpose of Investor's Choice is to provide existing and potential
investors in the Company and its subsidiaries with a convenient and economical
way to purchase shares of Common Stock and to reinvest all or a portion of the
cash dividends paid and interest payments made on Eligible Securities in shares
of Common Stock.
ADVANTAGES
. Interested investors, not already record or registered holders of
Eligible Securities, may become participants in the Plan ("Participants")
by making an initial minimum cash investment of at least $250 to purchase
Common Stock through the Plan.
. Record or registered holders of Eligible Securities not already
Participants may become Participants by electing to have dividend and
interest payments on all or a portion of their Eligible Securities
reinvested in Common Stock, depositing certificates representing Common
Stock into the Plan for safekeeping or making an initial minimum cash
investment of at least $50 to purchase Common Stock through the Plan.
. In addition to having their dividend and interest payments on Eligible
Securities reinvested in Common Stock, Participants may invest additional
funds in Common Stock through optional cash investments of at least $50
for any single investment up to $120,000 per calendar year. Optional cash
investments may be made occasionally or at regular intervals, as the
Participant desires.
. Funds invested in the Plan are fully invested in Common Stock through the
purchase of whole shares and fractions of shares, and proportionate cash
dividends on fractions of shares of Common Stock are used to purchase
additional shares of Common Stock.
. Investor's Choice offers a "safekeeping" service whereby Participants may
deposit, free of any service charges, certificates representing Common
Stock held in certificate form into the Plan. Shares of Common Stock so
deposited will be credited to the account of the Participant (an
"Account"). This service can be selected by Participants without
participating in any other feature of the Plan.
. A Participant may direct the Company, at any time and at no cost to the
Participant, to transfer all or a portion of the shares of Common Stock
credited to his Account (including those shares of Common Stock deposited
into the Plan for safekeeping) to the Account of another Participant (or
to set up an Account for a new Participant in connection with such
transfer) or to send certificate(s) representing such shares to the
Participant or another designated person or entity.
. Quarterly statements ("Statements of Account") will be mailed to each
Participant showing all transactions completed during the year to date,
total shares of Common Stock credited to the Participant's Account and
other information related to his Account.
. Participants may direct that all, a portion or none of their dividend or
interest payments on Eligible Securities, including shares of Common
Stock purchased for a Participant under the Plan and shares of Common
Stock deposited into the Plan for safekeeping, be reinvested in shares of
Common Stock. Dividend and interest payments not reinvested will be paid
in the usual manner.
. Participants may sell shares of Common Stock credited to their Accounts
(including those shares of Common Stock deposited into the Plan for
safekeeping) through the Plan.
4
<PAGE>
SUMMARY
The following is a summary of certain terms and provisions of Investor's
Choice and does not purport to be a complete description of all terms and
provisions of Investor's Choice. The following summary is qualified in its
entirety by reference to all of the terms and provisions of the Plan, which is
an exhibit to the Registration Statement.
ADMINISTRATION
Administration of the Plan is conducted by the individual (who may be an
employee of the Company), bank, trust company or other entity (including the
Company) appointed from time to time by the Company to act as administrator of
Investor's Choice (the "Administrator"). The Company will be the initial
Administrator. The Administrator is responsible for administering the Plan,
receiving all cash investments made by Participants, maintaining records of
each Participant's Account activities, issuing Statements of Account and
performing other duties required by the Plan. The Administrator or its nominee,
as custodian, will hold one or more certificates registered in its name
representing the aggregate number of whole shares of Common Stock purchased
under, or deposited for safekeeping into, the Plan and credited to
Participants' Accounts. The Administrator will forward funds to be used to
purchase shares of Common Stock in the open market to an agent selected by the
Company (an "Independent Agent") that is an "agent independent of the issuer,"
as that term is defined in the rules and regulations under the Exchange Act.
Additionally, the Administrator will promptly forward sales instructions to the
Independent Agent. The Independent Agent is responsible for purchasing and
selling shares of Common Stock in the open market for Participants' Accounts in
accordance with the provisions of the Plan. Under certain circumstances, the
Administrator may be an Independent Agent.
Participants may contact the Administrator by writing:
Houston Industries Incorporated
Investor Services Department
P. O. Box 4505
Houston, Texas 77210
or by telephoning toll-free (800) 231-6406 (if calling from outside Texas),
(800) 392-4261 (if calling from within Texas), or, in Houston, (713) 629-3060
between 8 a.m. and 5 p.m., Monday through Friday, Central Time. Written
communications may be sent by telecopier (fax) to (713) 629-3129.
ELIGIBILITY
Any person or entity, whether or not a record holder of Common Stock, is
eligible to participate in Investor's Choice, provided that (i) such person or
entity fulfills the prerequisites for participation described below under
"Enrollment Procedures" and (ii) in the case of citizens or residents of a
country other than the United States, its territories and possessions,
participation would not violate local laws applicable to the Company, the Plan
and the Participant.
ENROLLMENT PROCEDURES
HOLDERS OF COMMON STOCK CURRENTLY PARTICIPATING IN THE COMPANY'S DIVIDEND
REINVESTMENT PLAN, WHICH IS BEING REPLACED BY INVESTOR'S CHOICE (BY MEANS OF
AMENDMENT AND RESTATEMENT), WILL AUTOMATICALLY BE PARTICIPANTS IN THE PLAN
WITHOUT SENDING IN A NEW ENROLLMENT FORM ("ENROLLMENT FORM"). HOWEVER, A
PARTICIPANT WHO WISHES TO CHANGE HIS PARTICIPATION IN ANY WAY (E.G., FROM
PARTIAL TO FULL REINVESTMENT) MUST SUBMIT A NEW ENROLLMENT FORM.
After being furnished with a copy of this Prospectus, eligible applicants may
join Investor's Choice at any time by completing and signing an Enrollment Form
in the manner set forth below. REQUESTS FOR COPIES OF ENROLLMENT FORMS, AS WELL
AS COPIES OF OTHER INVESTOR'S CHOICE FORMS AND THIS PROSPECTUS, SHOULD BE MADE
IN WRITING OR BY TELEPHONE TO THE ADMINISTRATOR'S ADDRESS AND TELEPHONE NUMBERS
LISTED IN "--ADMINISTRATION" ABOVE. RECORD OR REGISTERED HOLDERS OF ELIGIBLE
SECURITIES SHOULD BE SURE TO SIGN THEIR NAME(S) ON THE ENROLLMENT FORM EXACTLY
AS THEY APPEAR ON THEIR CERTIFICATES OR INSTRUMENTS.
5
<PAGE>
In order to become a Participant in Investor's Choice, an eligible applicant
must complete and sign an Enrollment Form and return it to the Administrator
and (i) elect to have cash dividends paid or interest payments made on Eligible
Securities (see "--Eligible Securities" for a list of Eligible Securities) of
which such applicant is the record or registered holder invested in Common
Stock (see "--Reinvestment of Cash Dividend and Interest Payments"), (ii)
deposit certificates representing shares of Common Stock into the Plan for
safekeeping (see "--Safekeeping Service") or (iii) make an initial cash
investment (see "--Initial Cash Investments and Optional Cash Investments").
Eligible Securities held in "street name" (e.g., in the name of a bank, broker,
or trustee) are not eligible for inclusion in any aspect of Investor's Choice.
Beneficial owners of Eligible Securities registered in "street name" may
participate in Investor's Choice with respect to such securities (a) by
transferring those Eligible Securities which they wish to be subject to the
Plan into their own name and (b) by depositing shares of Common Stock into the
Plan for safekeeping and/or electing to reinvest cash dividend or interest
payments on such Eligible Securities in Common Stock (see "--Transfer of
Eligible Securities--From a Broker").
A person will become a Participant after a properly completed Enrollment Form
has been received and accepted by the Administrator.
ELIGIBLE SECURITIES
The following equity and debt securities of the Company and its subsidiaries
are Eligible Securities:
. Common Stock (including shares of Common Stock purchased through the
Plan)
. The Company's Debentures, 7 1/4% Series due December 1, 1996
. The Company's Debentures, 9 3/8% Series due June 1, 2001
. The Company's Debentures, 7 7/8% Series due July 1, 2002
. $4 Preferred Stock of HL&P
. $6.72 Cumulative Preferred Stock of HL&P
. $7.52 Cumulative Preferred Stock of HL&P
. $8.12 Cumulative Preferred Stock of HL&P
. $8.50 Cumulative Preferred Stock of HL&P
. HL&P's First Mortgage Bonds, 5 1/4% Series due 1996
. HL&P's First Mortgage Bonds, 5 1/4% Series due 1997
. HL&P's First Mortgage Bonds, 6 3/4% Series due 1997
. HL&P's First Mortgage Bonds, 7 5/8% Series due March 1, 1997
. HL&P's First Mortgage Bonds, 6 3/4% Series due 1998
. HL&P's First Mortgage Bonds, 7 1/4% Series due 2001
. HL&P's First Mortgage Bonds, 9.15% Series due March 15, 2021
. HL&P's First Mortgage Bonds, 8 3/4% Series due March 1, 2022
. HL&P's First Mortgage Bonds, 7 3/4% Series due March 15, 2023
. HL&P's First Mortgage Bonds, 7 1/2% Series due July 1, 2023.
In addition, the Company may from time to time designate, in its sole
discretion, other equity or debt securities of the Company and its subsidiaries
as Eligible Securities by notifying the Administrator in writing of such
designation.
6
<PAGE>
INITIAL CASH INVESTMENTS AND OPTIONAL CASH INVESTMENTS
Interested investors, whether or not record or registered holders of Eligible
Securities, may become Participants by making an investment through the Plan as
hereinafter described. ELIGIBLE APPLICANTS WHO ARE NOT RECORD OR REGISTERED
HOLDERS OF ELIGIBLE SECURITIES MUST INCLUDE A MINIMUM INITIAL CASH INVESTMENT
OF AT LEAST $250 WITH THEIR COMPLETED ENROLLMENT FORM. ELIGIBLE APPLICANTS WHO
ARE RECORD OR REGISTERED HOLDERS OF ELIGIBLE SECURITIES MUST INCLUDE A MINIMUM
INITIAL CASH INVESTMENT OF AT LEAST $50 WITH THEIR COMPLETED ENROLLMENT FORM.
Such investments may be made by personal check, money order or wire transfer
payable to Houston Industries Incorporated. DO NOT SEND CASH. Interested
investors making wire transfers should contact the Administrator for wire
instructions and may be charged fees by the commercial bank initiating the
transfer.
Participants may make optional cash investments by delivering to the
Administrator (a) a completed optional cash investment stub which will be
attached to each Participant's quarterly Statement of Account or an Enrollment
Form and (b) a personal check, money order or wire transfer payable to Houston
Industries Incorporated. DO NOT SEND CASH. Participants making wire transfers
should contact the Administrator for wire instructions and may be charged fees
by the commercial bank initiating the transfer. Optional cash investments must
be at least $50 for any single investment. There is no obligation to make any
optional cash investment and the amount and timing of such investments may vary
from time to time.
Optional cash investments may not exceed $120,000 in the aggregate per
calendar year (the "Maximum Amount"). In determining whether the Maximum Amount
has been reached, initial investments will be counted as optional cash
investments.
Optional and initial cash investments will be invested in Common Stock
beginning on the first Investment Date following their receipt by the
Administrator; provided, that such investments must be received by the
Administrator no later than two business days prior to an Investment Date to be
invested beginning on that Investment Date. Otherwise, the investment may be
held by the Administrator and invested beginning on the next Investment Date.
(See "--Investment Dates" and "--Purchases and Sales of Shares Generally.") NO
INTEREST WILL BE PAID ON FUNDS HELD BY THE ADMINISTRATOR PENDING INVESTMENT.
Accordingly, Participants and interested investors should transmit cash
investments so as to reach the Administrator shortly (but not less than two
business days) before an Investment Date.
Upon a Participant's written request, received by the Administrator no later
than two business days prior to the applicable Investment Date, a cash
investment not already invested in Common Stock will be returned to the
Participant. However, no refund of a check or money order will be made until
the funds from such instruments have been actually collected by the
Administrator. Accordingly, such refunds may be significantly delayed. If the
written request to stop investment is received by the Administrator within two
business days prior to an Investment Date, any cash investment then held by the
Administrator will be invested in Common Stock on such Investment Date.
Optional and initial cash investments, pending investment pursuant to
Investor's Choice, will be credited to a Participant's Account and held in an
escrow account which will be separated from any other funds or monies of the
Company. All cash investments are subject to collection by the Administrator of
full face value in U. S. funds. The method of delivery of any cash investment
is at the election and risk of the Participant or interested investor and will
be deemed received when actually received by the Administrator. If the delivery
is by mail, it is recommended that the Participant or interested investor use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Investment Date.
CASH DIVIDENDS PAID ON SHARES OF COMMON STOCK CREDITED TO A PARTICIPANT'S
ACCOUNT THAT WERE PURCHASED THROUGH THE PLAN WITH OPTIONAL AND INITIAL CASH
INVESTMENTS WILL AUTOMATICALLY BE REINVESTED IN SHARES OF COMMON STOCK UNLESS
THE PARTICIPANT NOTIFIES THE ADMINISTRATOR OTHERWISE BY NOTATION ON THE
OPTIONAL CASH INVESTMENT STUB OR COMPLETED ENROLLMENT FORM, AS THE CASE MAY BE.
7
<PAGE>
Funds payable to a Participant or interested investor as a result of the
redemption, tender or maturity, including accrued interest and premium, if any,
of any of the Eligible Securities of which such Participant or interested
investor is the record or registered holder may be invested in Common Stock
through Investor's Choice at the request of such holder by delivering a
properly completed Enrollment Form covering such Eligible Securities to the
Administrator.
REINVESTMENT OF CASH DIVIDEND AND INTEREST PAYMENTS
Participants may elect to invest in Common Stock by reinvesting all or a
portion of cash dividends paid and interest payments made on all or a portion
of Eligible Securities registered in their names, Common Stock purchased
through the Plan and credited to their Accounts and Common Stock deposited into
the Plan for safekeeping, by designating such election on their Enrollment
Form. IF A PARTICIPANT DOES NOT MAKE AN ELECTION, CASH DIVIDENDS PAID ON SHARES
OF COMMON STOCK CREDITED TO A PARTICIPANT'S ACCOUNT THAT WERE PURCHASED THROUGH
THE PLAN OR DEPOSITED INTO THE PLAN FOR SAFEKEEPING WILL AUTOMATICALLY BE
REINVESTED IN SHARES OF COMMON STOCK. Participants electing partial
reinvestment of cash dividend and interest payments on any Eligible Securities
must designate the specific security for which such partial reinvestment is
desired and the whole dollar amount or whole numbers of shares for which
reinvestment is desired. Once a Participant elects reinvestment, cash dividend
and interest payments made on the designated Eligible Securities will be
reinvested in shares of Common Stock. THE AMOUNT SO REINVESTED WILL BE REDUCED
BY ANY AMOUNT WHICH IS REQUIRED TO BE WITHHELD UNDER ANY APPLICABLE TAX OR
OTHER STATUTES. If the Participant has specified partial reinvestment, that
portion of cash dividend and interest payments not designated for reinvestment
will be sent to the Participant by check in the usual manner or with regard to
the partial reinvestment of cash dividends on Common Stock credited to the
Participant's Account, by electronic direct deposit, if the Participant has
elected the direct deposit option (see "--Direct Deposit of Dividends Not
Reinvested").
Dividends and interest payments will be invested in Common Stock beginning
either on the date of payment, if such payment date is an Investment Date, or
on the first Investment Date following such payment. (See "--Investment Dates"
and "--Purchases and Sales of Shares Generally.") Cash dividend and interest
payment reinvestment amounts, pending investment pursuant to Investor's Choice,
will be credited to a Participant's Account and held in an escrow account which
will be separated from any other funds or monies of the Company. INTEREST
PAYMENTS ON DEBT ELIGIBLE SECURITIES ARE GENERALLY MADE ON THE 1ST OR 15TH DAY
OF THE RELEVANT MONTH, WHILE THE INVESTMENT DATE IS GENERALLY THE 10TH DAY OF
THE MONTH. (See "--Investment Dates.") NO INTEREST WILL BE PAID ON SUCH FUNDS
HELD BY THE ADMINISTRATOR PENDING INVESTMENT.
CHANGING PLAN OPTIONS
A Participant may change his Investor's Choice options, including (i)
changing the reinvestment level (i.e., full, partial or none) of cash dividend
and interest payments on Eligible Securities and (ii) changing the designation
of Eligible Securities on which cash dividend or interest payments are subject
to reinvestment, by delivering written instructions or a new Enrollment Form to
that effect to the Administrator. To be effective with respect to a particular
cash dividend or interest payment, any such instructions must be received by
the Administrator at least two business days prior to the payment date relating
to such cash dividend or interest payment. If such instructions are not
received by the Administrator at least two business days prior to the payment
date, the instructions will not become effective until after such dividend or
interest is paid. The shares of Common Stock purchased with such funds will be
credited to the Participant's Account.
DIRECT DEPOSIT OF DIVIDENDS NOT REINVESTED
A Participant who elects not to reinvest in Common Stock all or any portion
of cash dividends on shares of Common Stock credited to his Account may receive
such cash dividends by electronic deposit to the Participant's predesignated
bank, savings, or credit union account. To receive a direct deposit of funds,
Participants must complete and sign a Direct Deposit Authorization Form and
return it to the Administrator. Direct deposit will become effective as
promptly as practicable after receipt of a completed Direct Deposit
8
<PAGE>
Authorization Form. Changes in designated direct deposit accounts may be made
by delivering a completed Direct Deposit Authorization Form to the
Administrator.
Cash dividends on shares of Common Stock not designated for reinvestment and
not directly deposited will be paid by check on the applicable Dividend Payment
Date (as hereinafter defined).
INVESTMENT DATES
An "Investment Date" under the Plan will be, (i) in any month in which a cash
dividend on the Common Stock is paid (a "Dividend Payment Date"), normally the
10th day of March, June, September and December of each year, such Dividend
Payment Date and (ii) in any month in which no Dividend Payment Date occurs,
the 10th day of the month or, if the 10th day is not a business day, the
business day immediately preceding the 10th day of such month.
PURCHASES AND SALES OF SHARES GENERALLY
Shares of Common Stock purchased for Participants under the Plan will be
either newly issued shares or shares held in the treasury of the Company or, at
the Company's option, shares of Common Stock purchased in the open market by an
Independent Agent. As of the date hereof, shares of Common Stock purchased for
Participants under the Plan are being purchased in the open market by an
Independent Agent. The Plan provides that the Company may not change its
determination regarding the source of purchases of the shares (i.e., from the
Company or in the open market) more than once in any 12-month period. At any
time that shares of Common Stock are purchased for Participants under the Plan
in the open market, the Company will not exercise its right to change the
source of purchases of shares of Common Stock absent a determination by the
Company's Board of Directors or Finance Committee of the Board of Directors
that the Company has a compelling reason for such change.
Purchases of shares of Common Stock from the Company, whether newly issued or
treasury shares, will be made on the relevant Investment Date at the average of
the high and low sales prices of the Common Stock reported on the New York
Stock Exchange Composite Tape as published in The Wall Street Journal for the
trading date preceding the Investment Date. In the event no trading is reported
for the trading day, the purchase price may be determined by the Company on the
basis of such market quotations as it deems appropriate. No brokerage
commissions will be charged on shares acquired directly from the Company.
Purchases in the open market may begin on the relevant Investment Date and
will be completed no more than 30 days after the Investment Date, except as
required by applicable federal securities or other laws or stock exchange
regulations. The price of any shares of Common Stock purchased or sold in the
open market for Participants will be the weighted average price per share
(ADJUSTED FOR BROKERAGE COMMISSIONS, ANY RELATED SERVICE CHARGES AND APPLICABLE
TAXES) of the aggregate number of shares purchased or sold, as the case may be,
for the relevant Investment Date or period, respectively.
The number of shares (including any fraction of a share rounded to three
decimal places) of Common Stock credited to the Account of a Participant for a
particular Investment Date will be determined by dividing the total amount of
cash dividends, interest payments, optional cash investments and/or initial
cash investments to be invested for such Participant on such Investment Date by
the relevant purchase price per share.
With regard to open market purchases and sales of shares of Common Stock by
an Independent Agent, none of the Company, the Administrator (if it is not also
the Independent Agent) nor any Participant will have any authority or power to
direct the time or price at which shares may be purchased or sold, the markets
on which the shares are to be purchased or sold (including on any securities
exchange, in the over-the-counter market or in negotiated transactions), or the
selection of the broker or dealer (other than any Independent Agent) through or
from whom purchases and sales may be made, except that the timing of such
purchases and sales must be made in accordance with the terms and conditions of
Investor's Choice. The Independent Agent may commingle each Participant's funds
with those of other Participants for the purpose of executing purchase and sale
transactions. Dividend and voting rights will commence upon settlement, whether
shares are purchased from the Company or any other source.
9
<PAGE>
SAFEKEEPING SERVICE
At the time of enrollment, or at any later time, Participants may take
advantage of the Plan's cost-free safekeeping services. Common Stock held in
certificate form by a Participant may be deposited into the Plan, to be held by
the Administrator or its nominee, by delivering a completed Enrollment Form and
such certificates to the Administrator. Such certificates should not be
endorsed. The shares of Common Stock so deposited will be transferred into the
name of the Administrator or its nominee, as custodian, and credited to the
Participant's Account. Thereafter, such shares of Common Stock will be treated
in the same manner as shares of Common Stock purchased under the Plan and
credited to the Participant's Account. References herein to shares of Common
Stock credited to a Participant's Account will include shares of Common Stock
deposited into the Plan for safekeeping unless otherwise indicated. CASH
DIVIDENDS PAID ON SHARES OF COMMON STOCK CREDITED TO A PARTICIPANT'S ACCOUNT
THAT WERE DEPOSITED INTO THE PLAN FOR SAFEKEEPING WILL AUTOMATICALLY BE
REINVESTED IN SHARES OF COMMON STOCK UNLESS THE PARTICIPANT NOTIFIES THE
ADMINISTRATOR OTHERWISE ON HIS ENROLLMENT FORM.
SALE OF SHARES
A Participant may request, at any time, that all or a portion of the shares
of Common Stock credited to his Account be sold by delivering to the
Administrator a completed Sale/Transfer Request Form. ONLY WHOLE SHARES OF
COMMON STOCK CREDITED TO A PARTICIPANT'S ACCOUNT MAY BE SOLD UNDER THE PLAN.
The Administrator will forward the sale instructions to an Independent Agent
within five business days of receipt (except as described in the following
paragraph). An Independent Agent will sell such shares as soon as practicable
after processing the request and will transmit to the Participant the proceeds
of the sale (less brokerage fees and commissions and any transfer taxes). (See
"--Purchases and Sales of Shares Generally" for the applicable sales price.)
Proceeds of shares of Common Stock sold through Investor's Choice will be paid
to the Participant by check.
Except as described in the following sentence, if instructions for the sale
of shares of Common Stock are received by the Administrator on or after an ex-
dividend date but before the related Dividend Payment Date, the sale will be
processed as described above and a separate check for the dividends will be
mailed to the Participant following the Dividend Payment Date or will be
directly deposited into the Participant's designated direct deposit account, as
applicable. If instructions for the sale of shares of Common Stock on which
cash dividends are being reinvested are received by the Administrator within
two business days prior to a Dividend Payment Date, the dividends paid on that
Dividend Payment Date will be invested in Common Stock through the Plan, and
(i) if the Participant's sale instructions cover less than all of the shares of
Common Stock credited to his Account, the newly purchased shares will be
credited to his Account or (ii) if the Participant's sale instructions cover
all of the shares of Common Stock credited to his Account, the sale
instructions will not be processed until after the dividends have been invested
in Common Stock through the Plan at which time all of the shares credited to
his Account, including the newly purchased shares, will be sold and the
proceeds transmitted to the Participant. (See "-- Reinvestment of Dividends on
Remaining Shares" for the reinvestment level of dividends on shares of Common
Stock credited to a Participant's Account after a sale.)
WITHDRAWAL OF SHARES OF COMMON STOCK
A Participant may withdraw some or all of the Common Stock credited to his
Account from the Plan at any time by delivering to the Administrator (i)
appropriate instructions, if the Participant will be the record holder of such
Common Stock after withdrawal, or (ii) a completed Sale/Transfer Request Form
and a stock assignment (stock power), if the Participant will not be the record
holder of the Common Stock after withdrawal. Upon the Administrator's receipt
of the proper documentation, certificates representing the designated Common
Stock will be sent to the Participant, the Participant's broker or any other
person that the Participant has designated.
Except as described in the following sentence, if a completed Sale/Transfer
Request Form with regard to shares of Common Stock credited to a Participant's
Account is received on or after an ex-dividend date
10
<PAGE>
but before the related Dividend Payment Date, the withdrawal will be processed
as described above and a separate check for the dividends will be mailed to the
Participant following the Dividend Payment Date or will be directly deposited
into the Participant's designated direct deposit account, as applicable. If a
completed Sale/Transfer Request Form with regard to shares of Common Stock
credited to a Participant's Account on which cash dividends are being
reinvested is received by the Administrator within two business days prior to a
Dividend Payment Date, the dividends paid on the Dividend Payment Date will be
invested in Common Stock through the Plan, and (i) if the Participant's
withdrawal instructions cover less than all of the shares of Common Stock
credited to his Account, the newly purchased shares will be credited to his
Account or (ii) if the Participant's withdrawal instructions cover all of the
shares of Common Stock credited to his Account, the withdrawal instructions
will not be processed until after the dividends have been invested in Common
Stock through the Plan, at which time certificates representing all of the
shares credited to his Account, including the newly purchased shares, will be
sent to the Participant or other designated recipient. (See "--Reinvestment of
Dividends on Remaining Shares" for the reinvestment level of dividends on
shares of Common Stock credited to a Participant's Account after a withdrawal.)
Certificates representing whole shares of Common Stock withdrawn from the
Plan will be sent to the Participant or designated recipient by First Class
Mail as soon as practicable following the Administrator's receipt of the
required documentation, subject to the provisions of the preceding paragraph.
Withdrawal of shares of Common Stock does not affect reinvestment of cash
dividends on the shares withdrawn unless (i) the Participant is no longer the
record holder of such shares, (ii) the reinvestment is specifically
discontinued by the Participant (see "--Changing Plan Options") or (iii) the
Participant terminates his participation in the Plan (see "--Termination of
Participation by a Participant").
TRANSFER OF SHARES OF COMMON STOCK
From a Broker--Eligible Securities held in "street name" by a broker, bank or
trustee are not eligible for inclusion in Investor's Choice. Owners of Eligible
Securities held beneficially in "street name" who desire to participate in the
Plan must first have the Eligible Securities transferred into their names. To
do so, a Participant must instruct the "street name" holder to transfer the
Eligible Securities to the Participant or in the case of Common Stock to be
deposited into the Plan for safekeeping, to the Administrator for credit to the
Participant's Account. If the person is already a Participant, the Eligible
Securities must be transferred to the Participant in the same name in which the
Participant's Account is registered. If the person does not have an Account,
participation in Investor's Choice will commence when the Eligible Securities
are registered in his name AND a properly completed Enrollment Form is received
by the Administrator.
To a Broker--A Participant wishing to transfer all or any part of the shares
of Common Stock credited to his Account to a brokerage account may do so by
delivering to the Administrator a completed Sale/Transfer Request Form and a
stock assignment (stock power), acceptable to the Administrator. The completed
Sale/Transfer Request Form must specify the whole number of shares of Common
Stock, if less than all of such shares credited to his Account and the name and
address of the brokerage firm to which the shares are to be transferred,
including the name of the specific broker handling the account and the broker's
telephone number. The transfer will be handled as described in "--Withdrawal of
Shares of Common Stock" above.
Gift or Transfer of Shares of Common Stock Within Investor's Choice--If a
Participant wishes to transfer, whether by gift, private sale or otherwise,
ownership of all or a part of the shares of Common Stock credited to his
Account to the Account of another Participant or to establish by such transfer
an Account for a person or entity not already a Participant, the Participant
may do so by delivering to the Administrator a completed Sale/Transfer Request
Form and a stock assignment (stock power). The transfer will be effected as
soon as practicable following the Administrator's receipt of the required
documentation, subject to the provisions of the second paragraph under "--
Withdrawal of Shares of Common Stock." No fraction of a share of Common Stock
credited to a Participant's Account may be transferred unless the Participant's
entire Account is
11
<PAGE>
transferred. Requests for interaccount transfers are subject to the same
requirements as for the transfer of securities generally, including the
requirement of a guarantee of signature on the stock assignment. Stock power
forms are available at local banks, brokerage firms and from the Administrator.
(See "--Reinvestment of Dividends on Remaining Shares" for the reinvestment
level of dividends on shares of Common Stock credited to a Participant's
Account after a transfer.)
Shares of Common Stock so transferred will be credited to the transferee's
Account. Unless a transferee who is already a Participant otherwise directs the
Administrator in writing by completion of an Enrollment Form, the reinvestment
of cash dividends on the transferred shares will be made in proportion to the
reinvestment level (i.e., full, partial or none) of the other shares of Common
Stock credited to the transferee's Account. If the transferee is not already a
Participant, an Account will be opened in the transferee's name and he may make
elections with regard to reinvestment of cash dividends on such transferred
shares and other services provided by Investor's Choice on the Enrollment Form
that is provided to him. Unless otherwise requested by the transferor,
transferees will be sent a Statement of Account showing the transfer of such
shares into their Accounts. The transferor may request that such Statement of
Account be returned to the transferor for personal delivery and/or that a gift
certificate be provided. The transferor may send the gift certificate directly
or request that it be sent by the Administrator to the transferee with the
first Statement of Account.
REINVESTMENT OF DIVIDENDS ON REMAINING SHARES
If a Participant is reinvesting cash dividends paid on only a portion of the
shares of Common Stock credited to his Account through the Plan and the
Participant elects to sell, withdraw or transfer a portion of such shares, cash
dividends on the remainder of the shares credited to his Account, up to the
number of shares designated for reinvestment prior to such sale, withdrawal or
transfer, will continue to be reinvested through the Plan, except where the
Participant gives specific instructions to the contrary in connection with such
sale, withdrawal or transfer. For example, if a Participant who had elected to
have cash dividends reinvested through the Plan on 50 shares of a total of 100
shares of Common Stock credited to his Account elected to sell, withdraw or
transfer 25 shares, cash dividends on 50 shares of the remaining 75 shares
credited to his Account would be reinvested through the Plan. If instead the
Participant elected to sell, withdraw or transfer 75 shares, cash dividends on
the remaining 25 shares credited to his Account would be reinvested through the
Plan.
REPORTS TO PARTICIPANTS
Each Participant will receive a quarterly Statement of Account showing all
transactions for the Participant's Account during the current calendar year,
the number of shares of Common Stock credited to the Account, the amount of
cash held in the Account and other information for the Account. Supplemental
Statements of Account will be provided in months where the Participant has made
an optional cash investment, deposited, transferred or withdrawn shares of
Common Stock or had cash dividend or interest payments reinvested in Common
Stock. The Administrator also will send each Participant a confirmation
promptly after each sale of Common Stock under the Plan. Participants should
retain these Statements of Account and confirmations in order to establish the
cost basis, for tax purposes, for shares of Common Stock acquired under
Investor's Choice.
Participants will receive copies of all communications sent to holders of
Common Stock. This may include quarterly reports to shareholders, annual
reports to shareholders, proxy material, consent solicitation material and
Internal Revenue Service information, if appropriate, for reporting dividend
income. All notices, Statements of Accounts and other communications from the
Administrator to Participants will be addressed to the latest address of
record; therefore, it is important that Participants promptly notify the
Administrator of any change of address.
12
<PAGE>
CERTIFICATES FOR SHARES
A Participant may obtain, free of charge at any time, a certificate for all
or a part of the whole shares of Common Stock credited to his Account upon
written request to the Administrator. Such certificate(s) will be mailed by
First Class Mail, within two business days of the Administrator's receipt of
the written request, to the Participant's address of record. Any remaining
whole or fractions of shares of Common Stock will continue to be credited to
the Participant's Account.
Except for transfers described in "--Transfer of Shares of Common Stock,"
shares of Common Stock credited to a Participant's Account may not be pledged
or assigned. A Participant who wishes to pledge or assign shares of Common
Stock must request that they be withdrawn. (See "--Withdrawal of Shares of
Common Stock.")
Certificates for fractions of shares of Common Stock will not be issued under
any circumstances.
TERMINATION OF PARTICIPATION BY A PARTICIPANT
A Participant may at any time terminate his participation in the Plan by
delivering written notification to the Administrator to that effect. Upon the
Administrator's receipt of such written notification, the Participant will
receive (i) a certificate for all of the whole shares of Common Stock credited
to his Account, (ii) any dividends, interest payments and cash investments
credited to his Account and (iii) a check for the cash value of any fraction of
a share of Common Stock credited to his Account. Such fraction of a share will
be valued at the average of the high and low sales prices of the Common Stock
reported on the New York Stock Exchange Composite Tape as published in The Wall
Street Journal for the trading day preceding the date of receipt of a completed
Sale/Transfer Request Form.
COSTS
The Company will pay all administrative costs and expenses associated with
Investor's Choice. PARTICIPANTS WILL BEAR THE COST OF BROKERAGE COMMISSIONS,
RELATED SERVICE CHARGES AND ANY APPLICABLE TAXES INCURRED ON ALL SALES AND
PURCHASES OF SHARES OF COMMON STOCK MADE IN THE OPEN MARKET. Such costs will be
included as adjustments to sales and purchase prices. It is estimated at this
time that such brokerage commissions and related service charges will not
exceed ten cents per share. As of the date hereof, shares of Common Stock
purchased for Participants under the Plan are being purchased in the open
market by an Independent Agent. There will be no brokerage commissions or
related service charges for shares of Common Stock purchased directly from the
Company.
FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING DISCUSSION RELATES TO THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATION IN INVESTOR'S CHOICE. THE EFFECT OF SUCH TAX
CONSEQUENCES UPON ANY PARTICIPANT WILL DEPEND UPON SUCH PARTICIPANT'S
INDIVIDUAL CIRCUMSTANCES WHICH, TOGETHER WITH THE STATE AND LOCAL TAX
CONSEQUENCES OF PARTICIPATION, SHOULD BE DISCUSSED BY EACH PARTICIPANT WITH HIS
TAX ADVISOR.
A Participant will be required to include in income for federal income tax
purposes amounts reinvested in Common Stock in respect of dividends and
interest (including any original issue discount) on his Eligible Securities
subject to the Plan and all shares of Common Stock credited to his Account
under the Plan in the manner which would be required if he directly received
such dividends and interest even though no such amount is actually received by
the Participant in cash, but instead is applied to the purchase of shares of
Common Stock for the Participant's Account.
A Participant's tax basis for shares of Common Stock purchased pursuant to
the Plan will be equal to the cost of such shares as discussed above (which
cost in the case of shares purchased in the open market may include amounts in
respect of brokerage commissions, service charges and any applicable taxes).
Such shares of Common Stock will have a holding period beginning on the day
after the shares are allocated to the Participant's Account.
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<PAGE>
A Participant will not realize any taxable income when he receives
certificates for whole shares credited to his Account under the Plan. Gain or
loss will be recognized by the Participant when he sells such whole shares and
will be recognized by a Participant when a fractional share credited to his
Account is sold pursuant to the terms of the Plan.
MISCELLANEOUS
Stock Splits, Stock Dividends and Rights Offerings
Any shares or other securities representing stock splits or noncash
distributions on shares of Common Stock credited to the Account of a
Participant will be credited to the Participant's Account. Stock splits,
combinations, recapitalization and similar events affecting shares of Common
Stock credited to a Participant's Account will be credited to the Participants'
Accounts on a pro rata basis.
In the event of a rights offering, a Participant will receive rights based
upon the total number of whole shares of Common Stock credited to his Account.
Voting of Proxies
A Participant will have the exclusive right to exercise all voting rights
respecting shares of Common Stock credited to his Account. The Administrator
will forward all shareholder materials relating to shares of Common Stock
credited to a Participant's Account to the Participant. A Participant may vote
any whole shares of Common Stock credited to his Account in person or by proxy.
A Participant's proxy card will include whole shares of Common Stock credited
to his Account and shares of Common Stock registered in his name. Shares of
Common Stock credited to a Participant's Account will not be voted unless the
Participant or his proxy votes them. Fractions of shares of Common Stock may
not be voted.
Limitation of Liability
The Plan provides that neither the Company, the Administrator (including the
Company if it is acting as such) in administering Investor's Choice nor any
Independent Agent will be liable for any act done in good faith or for the good
faith omission to act in connection with the Plan, including, without
limitation, any claim of liability arising out of failure to terminate a
Participant's Account upon such Participant's death prior to receipt of notice
in writing of such death, or with respect to the prices at which shares of
Common Stock are purchased or sold for the Participant's Account and the times
when such purchases and sales are made, or with respect to any loss or
fluctuation in the market value after the purchase or sale of such shares.
Interpretation and Regulation of Investor's Choice
The officers of the Company are authorized to take such actions to carry out
Investor's Choice as may be consistent with the Plan's terms and conditions.
The Company reserves the right to interpret and regulate the Plan as the
Company deems desirable or necessary in connection with the Plan's operations.
Change or Termination of Investor's Choice
The Company may suspend, modify or terminate Investor's Choice at any time,
in whole, in part or in respect of Participants in one or more jurisdictions,
without the approval of Participants. Notice of such suspension, modification
or termination will be sent to all affected Participants, who will in all
events have the right to withdraw from participation. Upon any whole or partial
termination of Investor's Choice by the Company, each affected Participant will
receive (i) certificates for whole shares of Common Stock credited to his
Account, (ii) any dividends, interest payments and cash investments credited to
his Account and (iii) a check for the cash value for any fraction of a share of
Common Stock credited to his Account. Such fraction of a share shall be valued
at the average of the high and low sales prices of the Common Stock reported on
the New York Stock Exchange Composite Tape as published in The Wall Street
Journal for the trading day preceding the date of termination.
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Termination of Participation by the Company
If a Participant does not have at least one whole share of Common Stock
credited to his Account, or does not own any Eligible Securities for which cash
dividends or interest payments are designated for reinvestment pursuant to the
Plan, the Participant's participation in the Plan may be terminated by the
Company upon written notice to the Participant. Additionally, the Company may
terminate any Participant's participation in the Plan after written notice
mailed in advance to such Participant at the address appearing on the
Administrator's records. A Participant whose participation has been terminated
will receive (i) certificates for whole shares of Common Stock credited to his
Account, (ii) any dividends, interest payments and cash investments credited to
his Account and (iii) a check for the cash value of any fraction of a share of
Common Stock credited to his Account. Such fraction of a share shall be valued
at the average of the high and low sales prices of the Common Stock reported on
the New York Stock Exchange Composite Tape as published in The Wall Street
Journal for the trading day preceding the date of termination.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of the Company and its subsidiaries included in the Company's Annual
Report on Form 10-K, which are incorporated herein by reference, have been
audited by Deloitte & Touche, Independent Auditors, as stated in their reports
appearing therein. Such financial statements and financial statement schedules
are incorporated herein by reference in reliance on such reports given upon the
authority of that firm as experts in accounting and auditing.
LEGAL OPINIONS
Certain legal matters in connection with the Common Stock offered hereby have
been passed upon for the Company by Baker & Botts, L.L.P., Houston, Texas.
15
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTA-TIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR
OF THE PLAN SINCE THE DATE OF THIS PROSPECTUS OR THAT THE INFORMATION SET
FORTH HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THE
DATE OF FILING OF ANY DOCUMENTS INCORPORATED BY REFERENCE HEREIN.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company and its Subsidiaries........................................... 3
Application of Proceeds.................................................... 3
Houston Industries Incorporated
Investor's Choice Plan.................................................... 4
Experts.................................................................... 15
Legal Opinions............................................................. 15
</TABLE>
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HOUSTON
[LOGO] INDUSTRIES
INCORPORATED
4,000,000 Shares
Common Stock
(without par value)
----------------------
PROSPECTUS
----------------------
INVESTOR'S
CHOICE
PLAN
February . . ., 1994
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses payable by the Company in connection with the sale of the Common
Stock offered hereby are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission fee........................ $ 63,104
* Fees and expenses of Company's Counsel........................ 50,000
* Listing fees ................................................. 32,000
* Independent Auditors' fees.................................... 10,000
* Blue sky fees and expenses.................................... 20,000
* Printing expenses............................................. 28,000
* Miscellaneous................................................. 1,896
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* Total Expenses............................................ $205,000
========
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* Estimated.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02A(16) and Article 2.02-1 of the Texas Business Corporation Act
and Article V of the Company's Amended and Restated Bylaws provide the Company
with broad powers and authority to indemnify its directors and officers and to
purchase and maintain insurance for such purposes. Pursuant to such statutory
and Bylaw provisions, the Company has purchased insurance against certain costs
of indemnification that may be incurred by it and by its officers and
directors.
Additionally, Article IX of the Company's Restated Articles of Incorporation
provides that a director of the Company is not liable to the Company or its
shareholders for monetary damages for any act or omission in the director's
capacity as director, except that Article IX does not eliminate or limit the
liability of a director for (i) breaches of his duty of loyalty to the Company
and its shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) transactions from
which a director receives an improper benefit, irrespective of whether the
benefit resulted from an action taken within the scope of the director's
office, (iv) acts or omissions for which liability is specifically provided for
by statute and (v) acts relating to unlawful stock repurchases or payments of
dividends.
Article IX also provides that any subsequent amendments to Texas statutes
that further limit the liability of directors will inure to the benefit of the
directors, without any further action by shareholders. Any repeal or
modification of Article IX shall not adversely affect any right of protection
of a director of the Company existing at the time of the repeal or
modification.
II-1
<PAGE>
ITEM 16. EXHIBITS.
The following documents are filed as a part of this registration statement or
incorporated by reference herein:
<TABLE>
<CAPTION>
REPORT OR SEC FILE OR
EXHIBIT REGISTRATION REGISTRATION EXHIBIT
NO. DESCRIPTION STATEMENT NUMBER REFERENCE
------- ----------- ------------ ------------ ---------
<C> <S> <C> <C> <C>
3.1* --Restated Articles of Incorporation Form 10-Q for 1-7629 3
of the Company. the quarter ended
June 30, 1993
3.2* --Amended and Restated Bylaws of Form 8-K dated 1-7629 3
the Company. June 29, 1992
4.1* --Rights Agreement dated July 11, Form 8-K dated 1-7629 4(a)(1)
1990 between the Company and Texas July 11, 1990
Commerce Bank National
Association, as Rights Agent
(Rights Agent), which includes
form of Statement of Resolution
Establishing Series of Shares
designated Series A Preference
Stock and form of Rights
Certificate.
4.2* --Agreement and Appointment of Form 8-K dated 1-7629 4(a)(2)
Agent dated as of July 11, 1990 July 11, 1990
between the Company and the Rights
Agent.
4.3 --Form of Houston Industries
Incorporated Investor's Choice
Plan.
5** --Opinion of Baker & Botts, L.L.P.
23.1 --Consent of Deloitte & Touche.
23.2** --Consent of Baker & Botts, L.L.P.
(included in Exhibit 5).
24 --Powers of Attorney.
- --------
*Incorporated herein by reference as indicated.
**To be filed by amendment.
</TABLE>
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the registrant need not file a post-effective
amendment to include the information required to be included by subsection
(i) or (ii) if such information is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON FEBRUARY 8, 1994.
HOUSTON INDUSTRIES INCORPORATED
/s/ Don D. Jordan
By___________________________________
(Don D. Jordan,
Chairman and Chief Executive
Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement or Amendment has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Don D. Jordan Chairman and Chief Executive February 8, 1994
- ------------------------------------ Officer and Director
(Don D. Jordan) (Principal Executive and
Financial Officer and
Director)
/s/ Mary P. Ricciardello Comptroller (Principal February 8, 1994
- ------------------------------------ Accounting Officer)
(Mary P. Ricciardello)
*Milton Carroll, Robert J. )
Cruikshank, Linnet F. Deily, )
Joseph M. Hendrie, Howard W. ) Directors February 8, 1994
Horne, Thomas B. McDade, )
Alexander F. Schilt, Kenneth L. )
Schnitzer, Sr., D. D. Sykora, )
Jack T. Trotter, Bertram Wolfe )
/s/ Hugh Rice Kelly February 8, 1994
*By____________________________
(Hugh Rice Kelly,
Attorney-in-Fact)
</TABLE>
II-4
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Report or SEC File or
Exhibit Registration Registration Exhibit
No. Description Statement Number Reference
------- ------------ ------------ ------------- ---------
<S> <C> <C> <C> <C>
3.1* -Restated Articles of Form 10-Q for 1-7629 3
Incorporation of the the quarter ended
Company. June 30, 1993
3.2* -Amended and Restated Form 8-K dated 1-7629 3
Bylaws of the Company. June 29, 1992
4.1* -Rights Agreement dated Form 8-K dated 1-7629 4(a)(1)
July 11, 1990 between the July 11, 1990
Company and Texas
Commerce Bank National
Association, as Rights Agent
(Rights Agent), which
includes form of Statement of
Resolution Establishing
Series of Shares designated
Series A Preference Stock
and form of Rights
Certificate.
4.2* -Agreement and Appointment Form 8-K dated 1-7629 4(a)(2)
of Agent dated as of July 11, July 11, 1990
1990 between the Company
and the Rights Agent.
4.3 -Form of Houston Industries
Incorporated Investor's
Choice Plan.
5** -Opinion of Baker & Botts,
L.L.P.
23.1 -Consent of Deloitte &
Touche.
23.2** -Consent of Baker & Botts,
L.L.P. (included in Exhibit
5).
24 -Powers of Attorney.
----------
* Incorporated herein by reference as indicated.
** To be filed by amendment.
</TABLE>
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
INVESTOR'S CHOICE PLAN
Houston Industries Incorporated, a Texas corporation (the "Company"), hereby
amends and restates its Dividend Reinvestment Plan, as amended and restated
effective September 12, 1988 (the "DRIP"), in its entirety to establish the
following Houston Industries Incorporated Investor's Choice Plan (the "Plan"):
RECITAL:
WHEREAS, the DRIP has been in existence since 1978; and
WHEREAS, the Company desires to amend and restate the DRIP to include other
stock purchase opportunities and services in an effort to enhance its
attractiveness to investors in the Company's common stock, without par value,
including associated preference stock purchase rights (the "Common Stock"); and
WHEREAS, the purpose of the Plan is to provide interested investors and
holders of certain debt and equity securities of the Company and its
subsidiaries a convenient, economical means of increasing their investment in
the Company through (i) regular investment of cash dividends paid and interest
payments made on such securities, (ii) optional cash investments and/or (iii)
initial cash investments in shares of Common Stock;
NOW, THEREFORE:
ARTICLE I
Definitions
The terms defined in this Article I shall, for all purposes of this Plan, have
the following respective meanings:
Account
The term "Account" shall mean, as to any Participant, the account maintained
by the Administrator evidencing (i) the shares (and/or fraction of a share) of
Common Stock (a) purchased through the Plan and/or (b) deposited by such
Participant into the Plan
<PAGE>
pursuant to Section 4.1 hereof, and credited to such Participant and (ii) cash
held in the Plan pending investment in Common Stock for such Participant.
Account Shares
The term "Account Shares" shall mean all shares (and/or fraction of a share)
of Common Stock credited to the Account of a Participant by the Administrator,
which shall include shares deposited into the Plan pursuant to Section 4.1
hereof.
Administrator
The term "Administrator" shall mean the individual (who may be an employee of
the Company), bank, trust company or other entity (including the Company)
appointed from time to time by the Company to act as Administrator hereunder.
Common Stock
As defined in the Recitals.
Company
As defined in the introduction to the Recitals.
Company Share Purchase Price
The term "Company Share Purchase Price," when used with respect to Fractional
Account Shares, newly issued shares of Common Stock or shares of Common Stock
held in the Company's treasury, shall mean the average of the high and low sales
prices of Common Stock on a given trading day as reported on the New York Stock
Exchange Composite Tape and published in The Wall Street Journal. In the
absence of knowledge of inaccuracy, the Administrator may rely upon such prices
as published in The Wall Street Journal. In the event no trading is so reported
for a trading day, the Company Share Purchase Price for such shares may be
determined by the Company on the basis of such market quotations as it deems
appropriate.
Dividend
The term "Dividend" shall mean cash dividends paid on Reinvestment Eligible
Securities.
Dividend Payment Date
The term "Dividend Payment Date" shall mean a date on which a cash dividend on
shares of Common Stock is paid.
2
<PAGE>
DRIP
As defined in the introduction to the Recitals.
Eligible Securities
The term "Eligible Securities" shall mean those equity and debt securities of
the Company and its subsidiaries, whether issued prior to, on or after the date
hereof, set forth in Section 6.1 hereof, and such other equity and debt
securities of the Company and its subsidiaries as the Company may designate, in
its sole discretion, pursuant to Section 6.2 hereof.
Enrollment Form
The term "Enrollment Form" shall mean the documentation that the Administrator
(i) shall require to be completed and received prior to an investor's enrollment
in the Plan pursuant to Section 2.2 or 2.4 hereof, a Participant's changing his
options under the Plan pursuant to Section 7.1 hereof, or a Participant's
depositing shares of Common Stock into the Plan pursuant to Section 4.1 hereof
and (ii) may require to be completed and received prior to an optional cash
investment pursuant to Section 2.5 hereof.
Exchange Act
The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
Foreign Person
The term "Foreign Person" shall mean a Person that is a citizen or resident
of, or is organized or incorporated under, or has its principal place of
business in, a country other than the United States, its territories and
possessions.
Fractional Account Shares
The term "Fractional Account Shares" shall mean the shares (and fractions of
shares) of Common Stock held in the Fractional Share Account.
Fractional Share Account
The term "Fractional Share Account" shall mean an account under the Plan,
owned by the Company, consisting of Fractional Account Shares, which is held by
the Administrator and administered pursuant to Section 8.3 hereof.
3
<PAGE>
Independent Agent
The term "Independent Agent" shall mean an agent independent of the Company
who satisfies applicable legal requirements (including without limitation the
requirements of Rule 10b-6 and Rule 10b-18 promulgated under the Exchange Act)
and who has been selected by the Company, pursuant to Section 10.6 hereof, to
serve as an Independent Agent for purposes of making open market purchases and
sales of Common Stock under the Plan.
Interest
The term "Interest" shall mean interest payments made on Reinvestment Eligible
Securities.
Investment Date
The term "Investment Date" shall mean (i) in any month in which a Dividend
Payment Date occurs, such Dividend Payment Date and (ii) in any month in which
no Dividend Payment Date occurs, the tenth day of the month or, if the tenth day
is not a business day, the business day immediately preceding the tenth day of
such month.
Market Share Purchase Price
The term "Market Share Purchase Price," when used with respect to shares of
Common Stock purchased in the open market, shall mean the weighted average
purchase price per share (including brokerage commissions, any related service
charges and applicable taxes) of the aggregate number of shares purchased in the
open market for an Investment Date.
Market Share Sales Price
The term "Market Share Sales Price," when used with respect to shares of
Common Stock sold under the Plan, shall mean the weighted average sales price
per share (less brokerage commissions, any related service charges and
applicable taxes) of the aggregate number of shares sold in the open market for
the relevant period.
Maximum Amount
As defined in Section 2.5 hereof.
Participant
As defined in Section 2.1 hereof.
4
<PAGE>
Person
The term "Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
estate or unincorporated organization.
Plan
As defined in the introduction to the Recitals.
Reinvestment Eligible Securities
The term "Reinvestment Eligible Securities" shall mean (i) those Eligible
Securities of which a Participant is the record or registered holder and on
which such Participant has elected to have all or a portion of the Dividends or
Interest paid reinvested in Common Stock and (ii) a Participant's Account Shares
except for Account Shares as to which the Participant has elected not to have
Dividends reinvested in Common Stock and has notified the Administrator by
delivery of a completed optional cash investment stub or a completed Enrollment
Form of such election.
Sales/Transfer Request Form
The term "Sales/Transfer Request Form" shall mean the documentation that the
Administrator shall require to be completed and received prior to a
Participant's (i) sale of Account Shares pursuant to Section 5.1 hereof, (ii)
gift or transfer of Account Shares pursuant to Section 5.2 hereof, (iii)
withdrawal of whole Account Shares pursuant to Section 7.2 hereof (unless such
Participant will be the record holder of such Account Shares after withdrawal)
and (iv) termination of participation in the Plan pursuant to Section 7.3
hereof.
Statement of Account
The term "Statement of Account" shall mean a written statement prepared by the
Administrator and sent to each Participant which reflects (i) all transactions
to date completed under the Plan during the current calendar year, (ii) the
number of Account Shares credited to such Participant's Account at the date of
such statement, (iii) the amount of cash, if any, credited to such Participant's
Account pending investment at the date of such statement and (iv) such
additional information regarding such Participant's Account as the Administrator
may determine to be pertinent to the Participant.
5
<PAGE>
A pronoun or adjective in the masculine gender includes the feminine gender,
and the singular includes the plural, unless the context clearly indicates
otherwise.
ARTICLE II
Participation
Section 2.1. Participation. Any Person, whether or not a record holder of
Common Stock, may elect to participate in the Plan; provided, however, that if
such Person is a Foreign Person, he must provide evidence satisfactory to the
Administrator that his participation in the Plan would not violate local laws
applicable to the Company, the Plan or such Foreign Person.
An election by a Person to participate in the Plan shall be made by completing
and returning to the Administrator an Enrollment Form and (i) electing to have
Dividends on Eligible Securities of which such Person is the record holder
invested in Common Stock pursuant to Section 2.2 hereof, (ii) electing to have
Interest on Eligible Securities of which such Person is the registered owner
invested in Common Stock pursuant to Section 2.3 hereof, (iii) depositing
certificates representing Common Stock into the Plan pursuant to Section 4.1
hereof or (iv) making an initial cash investment pursuant to Section 2.4 hereof.
Any Person who has met such requirements and has made and not revoked such
election is herein referred to as a "Participant." Notwithstanding the
foregoing, each participant in the DRIP on the date hereof is automatically a
Participant without submitting a new Enrollment Form; provided, however, that
any such Participant who wishes to change his current participation in any way
must submit a new Enrollment Form to the Administrator. A Participant may elect
to participate in any or all of the forms of investment provided in Sections 2.2
through 2.5 hereof and to utilize the Plan's safekeeping services provided in
Section 4.1 hereof by submitting an Enrollment Form designating such election to
the Administrator; provided, however, that a Participant may elect to make
optional cash investments pursuant to Section 2.5 hereof by submitting to the
Administrator a completed optional cash investment stub attached to a quarterly
Statement of Account in lieu of an Enrollment Form.
Section 2.2. Dividend Reinvestment. A Participant may elect to have all or a
portion of any Dividend on his Reinvestment Eligible Securities invested in
shares (and/or
6
<PAGE>
a fraction of a share) of Common Stock to be credited to his Account in lieu of
receiving such Dividend directly. If a Participant elects to reinvest only a
portion of the Dividends received on Reinvestment Eligible Securities, other
than shares of Common Stock, that portion of such Dividends not reinvested in
Common Stock will be sent to the Participant by check in the manner otherwise
associated with payment of such Dividends. If a Participant elects to reinvest
only a portion of the Dividends received on his Reinvestment Eligible Securities
which are Common Stock, the portion of Dividends not reinvested will be sent to
the Participant by check in the manner otherwise associated with payment of such
Dividends or if such Reinvestment Eligible Securities are also Account Shares,
by electronic direct deposit if the Participant has elected the direct deposit
option provided in Section 7.7 hereof.
Section 2.3. Interest Reinvestment. A Participant may elect to have all or a
portion of any Interest on his Reinvestment Eligible Securities invested in
shares (and/or a fraction of a share) of Common Stock to be credited to his
Account in lieu of receiving such Interest directly. If a Participant elects to
reinvest only a portion of the Interest on his Reinvestment Eligible Securities,
that portion of Interest not reinvested in Common Stock will be sent to the
Participant by check in the manner otherwise associated with payment of
Interest.
Section 2.4. Initial Cash Investment. A Person not already a Participant may
become a Participant by (i) making an initial cash payment of at least $250, or
(ii) in the case of a Person who is already a record or registered holder of
Eligible Securities, of at least $50, by personal check, money order or wire
transfer payable to Houston Industries Incorporated, to be invested in Common
Stock pursuant to Section 3.4 hereof; provided, however, that payment for such
initial cash investment must be accompanied by a completed Enrollment Form.
Section 2.5. Optional Cash Investments. A Participant may elect to make cash
payments at any time or from time to time to the Plan, by personal check, money
order or wire transfer payable to Houston Industries Incorporated, for
investment in Common Stock pursuant to Section 3.4 hereof; provided, however,
that any Participant who elects to make optional cash investments pursuant to
this Section 2.5 must invest at least $50 for any
7
<PAGE>
single investment and may not invest more than $120,000 in aggregate amount in
any calendar year (the "Maximum Amount"). For purposes of determining whether
the Maximum Amount has been reached, initial cash investments shall be counted
as optional cash investments.
ARTICLE III
Dividend and Interest Reinvestment and Stock Purchase
-----------------------------------------------------
Section 3.1. Dividend and Interest Reinvestment. Dividends and Interest as
to which reinvestment has been elected by a Participant shall be paid to the
Administrator or its nominee on behalf of such Participant. Dividends and
Interest shall be reinvested, at the Company's election, in either (i) newly
issued shares of Common Stock or shares of Common Stock held in the Company's
treasury purchased from the Company or (ii) shares of Common Stock purchased in
the open market. Any reinvestment of Dividends or Interest in, or other
purchases of, Common Stock pursuant to this Article III shall be subject to
Section 3.5 hereof.
Section 3.2. Dividend and Interest Reinvestment in Newly Issued or Treasury
Shares. Dividend and Interest reinvestment in newly issued shares of Common
Stock or shares of Common Stock held in the Company's treasury shall be governed
by this Section 3.2. On an Investment Date with respect to which the Company
elects to issue new shares or sell shares of Common Stock held in the Company's
treasury to the Plan in order to effect the reinvestment of Dividends and/or
Interest, the Company shall issue to the Administrator upon the Company's
receipt of the funds described in (a) below, for crediting by the Administrator
to the Account of a Participant, a number of shares (and/or fraction of a share
rounded to three decimal places) of Common Stock equal to (a) the amount of any
Dividends and/or Interest paid to the Administrator on behalf of such
Participant since the preceding Investment Date plus the amount of any
Dividends paid to the Administrator on behalf of such Participant on such
Investment Date divided by (b) the Company Share Purchase Price on the trading
day immediately preceding such Investment Date. Such shares shall be issued or
sold to, and registered in the name of, the Administrator or its nominee as
custodian for such Participants. No interest shall be paid on Dividends or
Interest held pending reinvestment pursuant to this Section 3.2.
8
<PAGE>
Section 3.3. Dividend and Interest Reinvestment in Shares Purchased in the
Open Market. Dividend and Interest reinvestment in shares of Common Stock
purchased in the open market shall be governed by this Section 3.3. On an
Investment Date with respect to which the Company elects to effect reinvestment
of Dividends and/or Interest in shares of Common Stock purchased in the open
market, the Administrator shall (if it is an Independent Agent), or shall cause
an Independent Agent to, apply the amount of any Dividends and/or Interest paid
to the Administrator on behalf of the Participants since the preceding
Investment Date plus the amount of any Dividends paid to the Administrator on
behalf of the Participants on such Investment Date to the purchase of shares of
Common Stock in the open market. Purchases in the open market pursuant to this
Section 3.3 and Subsection 3.4.2 hereof may begin on the applicable Investment
Date and shall be completed no later than 30 days from such date unless
completion at a later date is necessary or advisable under applicable law,
including without limitation any federal securities laws. Open market purchases
pursuant to this Section 3.3 and Subsection 3.4.2 hereof may be made on any
securities exchange on which the Common Stock is traded, in the over-the-counter
market or by negotiated transactions, and may be upon such terms and subject to
such conditions with respect to price and delivery to which the Independent
Agent (including the Administrator if it is also an Independent Agent) may
agree. With regard to open market purchases of shares of Common Stock pursuant
to this Section 3.3 and Subsection 3.4.2 hereof, none of the Company, the
Administrator (if it is not also serving as the Independent Agent) or any
Participant shall have any authority or power to direct the time or price at
which shares of Common Stock may be purchased, the markets on which such shares
are to be purchased (including on any securities exchange, in the over-the-
counter market or in negotiated transactions) or the selection of the broker or
dealer (other than the Independent Agent) through or from whom purchases may be
made, except that the timing of such purchases must be made in accordance with
the terms and conditions of the Plan. For the purpose of making, or causing to
be made, purchases of shares of Common Stock pursuant to this Section 3.3 and
Subsection 3.4.2 hereof, the Independent Agent shall be entitled to commingle
each Participant's funds with those of all other Participants and to offset
purchases of shares of Common Stock against sales of shares of
9
<PAGE>
Common Stock to be made for Participants, resulting in a net purchase or a net
sale of shares. The number of shares (and/or fraction of a share rounded to
three decimal places) of Common Stock that shall be credited to a Participant's
Account with respect to an Investment Date to which this Section 3.3 applies
shall be equal to (a) the amount of any Dividends and/or Interest paid to the
Administrator on behalf of such Participant since the preceding Investment Date
plus the amount of any Dividends paid to the Administrator on behalf of such
Participant on such Investment Date divided by (b) the Market Share Purchase
Price with respect to such Investment Date. Such shares shall be registered in
the name of the Administrator or its nominee as custodian for the Participants.
No interest shall be paid on Dividends or Interest held pending reinvestment
pursuant to this Section 3.3.
Section 3.4. Investment of Optional Cash Payments and Initial Cash Payments.
Any optional cash investments and initial cash investments received by the
Administrator from a Participant at least two business days prior to an
Investment Date shall be invested, beginning on such Investment Date, in either
(i) newly issued shares or shares of Common Stock held in the Company's treasury
in the manner provided in Subsection 3.4.1 hereof, or (ii) Common Stock
purchased in the open market in the manner provided in Subsection 3.4.2 hereof.
Optional cash investments and initial cash investments not received by the
Administrator at least two business days prior to an Investment Date need not be
invested on such Investment Date; provided, however, that any such optional cash
investments and initial cash investments not invested on such Investment Date
shall be invested beginning on the next succeeding Investment Date. No interest
shall be paid on optional cash investments and initial cash investments held
pending investment pursuant to this Section 3.4.
Subsection 3.4.1 Newly Issued or Treasury Shares. On an Investment Date with
respect to which the Company elects to issue new shares or sell shares of Common
Stock held in the Company's treasury to the Plan in order to effect the
investment of optional cash investments and initial cash investments, the
Company shall issue to the Administrator upon the Company's receipt of the funds
described in (a) below, for crediting by the Administrator to the Account of a
Participant, a number of shares (and/or fraction
10
<PAGE>
of a share rounded to three decimal places) of Common Stock equal to (a) the
amount of any optional cash investments and/or initial cash investment received
by the Administrator from such Participant since the preceding Investment Date
(excluding any amounts received from such Participant within two business days
of such Investment Date but including any amounts received from such Participant
within two business days prior to the preceding Investment Date that were not
invested on the preceding Investment Date as set forth in Section 3.4 hereof)
divided by (b) the Company Share Purchase Price on the trading day immediately
preceding such Investment Date. Such shares shall be issued or sold to, and
registered in the name of, the Administrator or its nominee as custodian for the
Participants.
Subsection 3.4.2 Shares Purchased in the Open Market. On an Investment Date
with respect to which the Company elects to effect the investment of optional
cash investments and initial cash investments in shares of Common Stock
purchased in the open market, the Administrator shall (if it is an Independent
Agent), or shall cause an Independent Agent to, purchase for crediting by the
Administrator to the Account of a Participant a number of shares (and/or
fraction of a share rounded to three decimal places) of Common Stock in the open
market equal to (a) the amount of any optional cash investments and/or initial
cash investment received by the Administrator from such Participant since the
preceding Investment Date (excluding any amounts received from such Participant
within two business days of such Investment Date but including any amounts
received from such Participant within two business days prior to the preceding
Investment Date as set forth in Section 3.4 hereof) divided by (b) the Market
Share Purchase Price with respect to such Investment Date. Such purchases shall
be made in the manner set forth in Section 3.3 hereof. Such shares shall be
registered in the name of the Administrator or its nominee as custodian for the
Participants.
Subsection 3.4.3 Request to Stop Investment. If a written request to stop
investment of optional cash investments or an initial cash investment is
received by the Administrator from a Participant at least two business days
before the next Investment Date, any optional cash investments or initial cash
investment from such Participant then held by the Administrator shall not be
invested in Common Stock and shall be returned to such Participant. If such a
request is not received by the Administrator at least two business days
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prior to an Investment Date, any such optional cash investments or initial cash
investment shall be invested in shares of Common Stock for such Participant's
Account.
Section 3.5. Exhaustion of Fractional Share Account. Prior to any purchase
of Common Stock by the Administrator or an Independent Agent pursuant to this
Article III, the Administrator shall first purchase, at the Company Share
Purchase Price on the trading day immediately preceding the Investment Date, the
Fractional Account Shares from the Fractional Share Account. To the extent
made, such purchases from the Fractional Share Account shall substitute for
purchases required by this Article III.
ARTICLE IV
Safekeeping Services for Deposited Common Stock
-----------------------------------------------
Section 4.1. Deposited Common Stock. A Participant may elect to have
certificates representing shares of Common Stock of which the Participant is the
record holder deposited into the Plan by completing an Enrollment Form and
delivering such certificates and Enrollment Form to the Administrator. Shares
of Common Stock so deposited shall be transferred into the name of the
Administrator or its nominee and credited to the depositing Participant's
Account. Dividends paid on shares of Common Stock deposited into the Plan
pursuant to this Section 4.1 shall be reinvested in Common Stock pursuant to
Article III hereof unless a Participant notifies the Administrator otherwise on
the completed Enrollment Form.
Section 4.2. Withdrawal of Common Stock Deposited Pursuant to Section 4.1.
Shares of Common Stock deposited pursuant to Section 4.1 hereof may be withdrawn
from the Plan pursuant to Section 7.2 hereof.
ARTICLE V
Sale of Account Shares; Gift or Transfer of Account Shares
----------------------------------------------------------
Section 5.1. Sale of Account Shares. A Participant may request, at any time,
that all or a portion of his whole Account Shares be sold by delivering to the
Administrator a completed Sale/Transfer Request Form to that effect. The
Administrator (if it is not also an Independent Agent) shall forward such sale
instructions to the Independent Agent within five business days after receipt
thereof (except in the case of instructions to sell all whole Account Shares of
a Participant described below in the immediately following paragraph).
12
<PAGE>
The Independent Agent shall make such sales as soon as practicable (in
accordance with stock transfer requirements and federal and state securities
laws) after processing such sale instructions. As soon as practicable following
the receipt of proceeds from such sale, the Administrator shall mail by First
Class Mail to such Participant at his address of record a check in an amount
equal to (a) the Market Share Sales Price multiplied by (b) the number of his
Account Shares sold.
If instructions for the sale of Account Shares are received on or after an ex-
dividend date but before the related Dividend Payment Date, the sale shall be
processed as described above, and the Administrator shall, as soon as
practicable following the receipt of Dividends paid on such Account Shares, mail
a check for such Dividends by First Class Mail to the Participant at his address
of record or directly deposit such Dividends in the Participant's designated
direct deposit account, if such Participant has elected the direct deposit
option pursuant to Section 7.7 hereof. Notwithstanding the foregoing, if
instructions for the sale of Account Shares which are also Reinvestment Eligible
Securities are not received by the Administrator at least two business days
prior to the relevant Dividend Payment Date, such sale shall not be effected
until after such Dividend Payment Date (except in the case of instructions to
sell all whole Account Shares of such Participant in which case such sale shall
not be effected until after such Dividend has been reinvested pursuant to the
Plan and the shares of Common Stock purchased therewith are credited to his
Account. The shares of Common Stock purchased from the reinvestment of such
Dividend shall be credited to the Participant's Account. Following such
Dividend Payment Date, the Administrator shall forward such sale instructions to
the Independent Agent (within five business days after receipt of such sale
instructions).
With regard to open market sales of Account Shares pursuant to this Section
5.1, none of the Company, the Administrator (if it is not also serving as the
Independent Agent) or any Participant shall have any authority or power to
direct the time or price at which shares of Common Stock may be sold, the
markets on which such shares are to be sold (including on any securities
exchange, in the over-the-counter market or in negotiated transactions) or the
selection of the broker or dealer (other than the Independent
13
<PAGE>
Agent) through or from whom sales may be made, except that the timing of such
sales must be made in accordance with the terms and conditions of the Plan.
Section 5.2. Gift or Transfer of Account Shares. A Participant may elect to
transfer (whether by gift, private sale or otherwise) ownership of all or a
portion of his Account Shares to the Account of another Participant or establish
an Account for a Person not already a Participant by delivering to the
Administrator a completed Sale/Transfer Request Form to that effect and a stock
assignment (stock power), acceptable to the Administrator. No fraction of a
share of Common Stock credited to the transferor's Account shall be transferred
unless the transferor's entire Account is transferred.
Account Shares transferred in accordance with the preceding paragraph shall
continue to be registered in the name of the Administrator as custodian and
shall be credited to the transferee's Account. If the transferee is not already
a Participant, an Account shall be opened in the name of the transferee and the
Administrator shall send the transferee an Enrollment Form as soon as
practicable after such transfer. Unless otherwise requested by a transferee who
is already a Participant on a completed Enrollment Form, the reinvestment of
Dividends on such transferred Account Shares in shares of Common Stock under the
Plan shall be made in proportion to the reinvestment level (i.e., full, partial
or none) of the transferee's other Account Shares. Unless otherwise requested
by the transferor, the Administrator shall deliver a Statement of Account to
such transferee showing the transfer of such Account Shares into his Account.
The transferor may request that the Administrator deliver such Statement of
Account to the transferor for personal delivery to the transferee and/or the
transferor may request that the Administrator deliver to such transferee a gift
certificate. The transferor may request that the Administrator send the gift
certificate directly to such transferee with the first Statement of Account
following such transfer or request that the Administrator deliver such gift
certificate to the transferor for personal delivery to the transferee. The
Administrator shall comply with any such request of a transferor relating to
Statements of Account and/or gift certificates as soon as practicable following
receipt of such request.
If a completed Sale/Transfer Request Form with regard to Account Shares is
received on or after an ex-dividend date but before the related Dividend Payment
Date,
14
<PAGE>
the transfer shall be processed as described above and the Administrator shall,
upon receipt of the Dividends on such designated Account Shares, mail a check
for such Dividends by First Class Mail to the transferor at his address of
record or directly deposit such Dividend in the transferor's direct deposit
account, if he has elected the direct deposit option pursuant to Section 7.7
hereof. Notwithstanding the foregoing, if a completed Sale/Transfer Request
Form with regard to Account Shares that are also Reinvestment Eligible
Securities is not received by the Administrator at least two business days prior
to the relevant Dividend Payment Date, such transfer shall not become effective
until after such Dividend Payment Date (except in the case of instructions to
transfer all whole Account Shares of such Participant in which case such
transfer shall not be effected until after such Dividend has been reinvested
pursuant to the Plan and the shares of Common Stock purchased therewith are
credited to his Account). The shares of Common Stock purchased from the
reinvestment of such Dividend shall be credited to the Participant's Account.
As soon as practicable following such Dividend Payment Date, the Administrator
shall effect such transfer.
Section 5.3 Reinvestment of Dividends on Remaining Account Shares. If only a
portion of a Participant's Account Shares are Reinvestment Eligible Securities
and the Participant elects to (i) sell a portion of his Account Shares pursuant
to Section 5.1 hereof, (ii) transfer a portion of his Account Shares pursuant to
Section 5.2 hereof or (iii) withdraw a portion of his Account Shares pursuant to
Section 7.2 hereof, all of the Account Shares which are not Reinvestment
Eligible Securities shall be sold, transferred or withdrawn, as the case may be,
before any Account Shares which are also Reinvestment Eligible Securities are
sold, transferred or withdrawn unless the Participant gives specific
instructions to the contrary in connection with such sale, transfer or
withdrawal of Account Shares.
ARTICLE VI
Eligible Securities
-------------------
Section 6.1. Eligible Securities. The following debt and equity securities
of the Company and its subsidiaries shall be Eligible Securities:
(i) Common Stock;
(ii) The Company's Debentures, 7 1/4% Series due December 1, 1996;
(iii) The Company's Debentures, 9 3/8% Series due June 1, 2001;
15
<PAGE>
(iv) The Company's Debentures, 7 7/8% Series due July 1, 2002;
(v) $4 Preferred Stock of Houston Lighting and Power Company,
a Texas corporation ("HL&P");
(vi) $6.72 Cumulative Preferred Stock of HL&P;
(vii) $7.52 Cumulative Preferred Stock of HL&P;
(viii) $8.12 Cumulative Preferred Stock of HL&P;
(ix) $8.50 Cumulative Preferred Stock of HL&P;
(x) HL&P's First Mortgage Bonds, 5 1/4% Series due 1996;
(xi) HL&P's First Mortgage Bonds, 5 1/4% Series due 1997;
(xii) HL&P's First Mortgage Bonds, 6 3/4% Series due 1997;
(xiii) HL&P's First Mortgage Bonds, 7 5/8% Series due March 1, 1997;
(xiv) HL&P's First Mortgage Bonds, 6 3/4% Series due 1998;
(xv) HL&P's First Mortgage Bonds, 7 1/4% Series due 2001;
(xvi) HL&P's First Mortgage Bonds, 9.15% Series due March 15, 2021;
(xvii) HL&P's First Mortgage Bonds, 8 3/4% Series due March 1, 2022;
(xviii) HL&P's First Mortgage Bonds, 7 3/4% Series due March 15, 2023;
and
(xix) HL&P's First Mortgage Bonds, 7 1/2% Series due July 1, 2023.
Section 6.2. Additional Eligible Securities. The Company may from time to
time or at any time designate other debt or equity securities of the Company and
its subsidiaries as Eligible Securities by notifying the Administrator in
writing of the designation of such securities as Eligible Securities.
ARTICLE VII
Treatment of Accounts
---------------------
Section 7.1. Changing Plan Options. A Participant may elect to change his
Plan options, including (i) changing the reinvestment levels (i.e., full,
partial or none) of Dividends and Interest on Reinvestment Eligible Securities
and (ii) changing the designation of Reinvestment Eligible Securities, by
delivering to the Administrator written instructions or a new Enrollment Form to
that effect. To be effective with respect to any Dividend or Interest payment,
the instructions or Enrollment Form with respect to such Reinvestment Eligible
Securities must be received by the Administrator at least two business days
prior to the payment date relating to such Dividend and/or Interest. If the
instructions or Enrollment Form are not received by the Administrator at least
two business days prior to the payment date relating to such Dividend and/or
Interest, such instructions shall not become effective until after such payment
date. The shares of Common Stock purchased from the reinvestment of such
Dividend and/or Interest shall be credited to the Participant's
16
<PAGE>
Account. After the Administrator's receipt of effective option changing
instructions, Dividends and Interest on Reinvestment Eligible Securities as to
which the reinvestment election has been revoked will be paid in cash or with
regard to Dividends on Common Stock, by direct deposit to the Participant's
designated direct deposit account, if such Participant has elected the direct
deposit option pursuant to Section 7.7 hereof.
Section 7.2. Right of Withdrawal. A Participant may, at any time or from
time to time, withdraw from the Plan all or any part (other than fractions) of
his Account Shares by delivering to the Administrator (i) appropriate withdrawal
instructions to that effect, if such Participant will be the record holder of
such Account Shares after withdrawal or (ii) a completed Sale/Transfer Request
Form to that effect, if the Participant will not be the record holder of such
Account Shares after withdrawal. Subject to the limitations described in the
immediately following paragraph, as soon as practicable following the
Administrator's receipt of (i) appropriate withdrawal instructions or (ii) a
completed Sale/Transfer Request Form, as the case may be, which indicates the
Participant's desire to withdraw certain of his whole Account Shares, the
Administrator shall mail by First Class Mail to the Participant at his address
of record, or to the address of any Person that the Participant designated,
certificates representing such designated Account Shares.
If a completed Sale/Transfer Request Form with regard to Account Shares is
received by the Administrator on or after an ex-dividend date but before the
related Dividend Payment Date, the withdrawal shall be processed as described
above and the Administrator shall, as soon as practicable following the receipt
of Dividends paid on the withdrawn Account Shares, mail a check for such
Dividends by First Class Mail to the Participant at his address of record or
directly deposit such Dividends in the Participant's designated direct deposit
account, if such Participant has elected the direct deposit option pursuant to
Section 7.7 hereof. Notwithstanding the foregoing, if a completed Sale/Transfer
Request Form with regard to Account Shares, which are also Reinvestment Eligible
Securities, is not received by the Administrator at least two business days
prior to the relevant Dividend Payment Date, such withdrawal shall not become
effective until after such Dividend Payment Date (except in the case of
instructions to withdraw all whole Account Shares of such Participant in which
case such withdrawal shall not be effected until after
17
<PAGE>
such Dividend has been reinvested pursuant to the Plan and the shares of Common
Stock purchased therewith are credited to his Account). The shares of Common
Stock purchased from the reinvestment of such Dividend shall be credited to the
Participant's Account. As soon as practicable following such Dividend Payment
Date, the Administrator shall mail by First Class Mail to the Participant at his
address of record, or to the address of any Person that the Participant
designated, certificates representing the Account Shares withdrawn.
Withdrawal of Account Shares shall not affect reinvestment of Dividends on the
Account Shares withdrawn unless (i) the Participant is no longer the record
holder of such Account Shares, (ii) such reinvestment is changed by the
Participant by delivering to the Administrator written instructions or an
Enrollment Form to that effect pursuant to Section 7.1 hereof or (iii) the
Participant has terminated his participation in the Plan.
Section 7.3. Right of Termination of Participation. If a Participant's
Sale/Transfer Request Form indicates the Participant's desire to terminate his
participation in the Plan, the Administrator shall treat such request as a
withdrawal of all of such Participant's whole Account Shares pursuant to Section
7.2 hereof. The Administrator, in addition to mailing certificates representing
all whole Account Shares, if any, pursuant to Section 7.2 hereof, shall mail by
First Class Mail to the Participant at his address of record a check for an
amount equal to the sum of (i) the amount of cash credited to such Participant's
Account pending investment in Common Stock and (ii) the cash value of any
fraction of a share of Common Stock credited to his Account. Such fraction of a
share shall be valued at the Company Share Purchase Price for the trading day
immediately preceding the date of receipt of the completed Sale/Transfer Request
Form.
Section 7.4. Stock Splits, Stock Dividends and Rights Offerings. Any shares
or other securities representing stock splits or other noncash distributions on
Account Shares shall be credited to such Participant's Account. Stock splits,
combinations, recapitalizations and similar events affecting the Common Stock
shall, as to shares credited to Accounts of Participants, be credited to such
Accounts on a pro rata basis.
In the event of a rights offering, a Participant shall receive rights based
upon the total number of whole shares of Common Stock credited to his Account.
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<PAGE>
Section 7.5. Shareholder Materials; Voting Rights. The Administrator shall
send or forward to each Participant all applicable proxy solicitation materials,
other shareholder materials or consent solicitation materials. Participants
shall have the exclusive right to exercise all voting rights respecting Account
Shares credited to their respective Accounts. A Participant may vote any of his
whole Account Shares in person or by proxy. A Participant's proxy card shall
include his whole Account Shares and shares of Common Stock of which he is the
record holder. Account Shares shall not be voted unless a Participant or his
proxy votes them. Fractions of shares of Common Stock shall not be voted.
Solicitation of the exercise of Participants' voting rights by the management
of the Company and others under a proxy or consent provision applicable to all
holders of Common Stock shall be permitted. Solicitation of the exercise of
Participants' tender or exchange offer rights by management of the Company and
others shall also be permitted. The Administrator shall notify the Participants
of each occasion for the exercise of their voting rights or rights with respect
to a tender offer or exchange offer within a reasonable time before such rights
are to be exercised. Such notification shall include all information
distributed to the shareholders of the Company by the Company regarding the
exercise of such rights.
Section 7.6. Statements of Account. As soon as practicable after each
calendar quarter, the Administrator shall send to each Participant a quarterly
Statement of Account. Additionally, the Administrator shall send a supplemental
Statement of Account to each Participant in months where such Participant made
an optional cash investment, deposited Common Stock into the Plan pursuant to
Section 4.1 hereof, transferred or withdrew Account Shares or had Dividends or
Interest reinvested in Common Stock. As soon as practicable following a sale of
Account Shares by a Participant, the Administrator shall deliver a confirmation
to such Participant.
Section 7.7. Direct Deposit Option. A Participant may elect to have any
Dividends on Account Shares not being reinvested in Common Stock pursuant to the
Plan paid by electronic direct deposit to the Participant's predesignated bank,
savings or credit union account. To receive such direct deposit of funds, a
Participant must complete, sign
19
<PAGE>
and return the relevant documentation required by the Administrator. Direct
deposit will become effective as soon as practicable after receipt of such
documentation. A Participant may change his designated direct deposit account
by a written request to the Administrator.
ARTICLE VIII
Certificates and Fractions of Shares
------------------------------------
Section 8.1. Certificates. A Participant, at any time or from time to time,
may request in writing to receive a certificate for all or a portion of his
whole Account Shares and upon such request the Administrator shall promptly mail
such certificate (in any event, within at least two business days of the receipt
of such written request) by First Class Mail to such Participant at his address
of record; provided, however, that upon the mailing of such certificate the
shares of Common Stock represented by such certificate shall no longer be
Account Shares but shall remain Reinvestment Eligible Securities (except to the
extent such Participant has elected not to have Dividends on such Account Shares
reinvested in Common Stock).
Section 8.2. Fractional Shares. Fractions of shares of Common Stock shall be
credited to Accounts as provided in Article III hereof; provided, however, that
no certificate for a fraction of a share shall be distributed to any Participant
at any time; and provided, further, that the Company shall issue and sell only
whole shares of Common Stock to the Administrator in respect of Dividends and
Interest reinvested in, and purchases made by the Administrator hereunder of,
newly issued shares or shares of Common Stock held in the Company's treasury.
Section 8.3. Fractional Share Account. In the event that, upon a
Participant's termination of participation in the Plan, the Account of such
Participant is credited with a fraction of a share of Common Stock, such
fraction of a share shall be purchased by the Administrator for the Fractional
Share Account at the Company Share Purchase Price determined as of the trading
date specified in Sections 7.3, 9.1 or 9.4 hereof, as the case may be, and the
proceeds thereof shall be remitted to such Participant as set forth in Sections
7.3, 9.1 or 9.4 hereof, respectively. The Company shall from time to time
credit the Fractional Share Account with such amounts of money as may be
necessary to fund such purchases for the Fractional Share Account; provided,
however, that the Company may, at
20
<PAGE>
any time or from time to time, direct the Administrator to repay, and thereupon
the Administrator shall repay to the Company such portion of the cash as the
Company may, in its discretion, deem to be in excess of the amount needed to
fund the operations of the Fractional Share Account.
As set forth in Section 3.5 hereof, on each Investment Date, the Administrator
shall first apply the aggregate amount of optional cash investments, initial
cash investments, Dividends and Interest to the purchase of all currently
existing Fractional Account Shares. If the remaining aggregate amount of
optional cash investments, initial cash investments, Dividends and Interest is
not sufficient to purchase a whole number of shares of Common Stock, the Company
shall provide to the Administrator, as agent for the Company, such additional
amount of money as may be necessary to enable the Administrator (or the
Independent Agent, as the case may be) to purchase an additional share of Common
Stock. The fraction of a share that has been purchased with funds provided by
the Company shall be credited to the Fractional Share Account, and the remaining
fraction of a share shall be allocated among the Participants' Accounts as
necessary.
ARTICLE IX
Concerning the Plan
-------------------
Section 9.1. Suspension, Modification and Termination. The Company may at
any time and from time to time, at its sole option, suspend, modify, amend or
terminate the Plan, in whole, in part or in respect of Participants in one or
more jurisdictions; provided, however, no such amendment shall decrease the
Account of any Participant or result in a distribution to the Company of any
amount credited to the Account of any Participant. Upon complete termination of
the Plan, the Accounts of all Participants (or in the case of partial
termination of the Plan, the Accounts of all affected Participants) shall be
treated as if each such Participant had elected to terminate his participation
in the Plan pursuant to Section 7.3 hereof, except that any fraction of a share
of Common Stock shall be valued as of the trading date immediately preceding the
date on which the Plan is terminated. The Administrator shall promptly send
each affected Participant notice of such suspension, modification or
termination.
21
<PAGE>
Section 9.2. Rules and Regulations. The Company may from time to time adopt
such administrative rules and regulations concerning the Plan as it deems
necessary or desirable for the administration of the Plan. The Company shall
have the power and authority to interpret the terms and the provisions of the
Plan and shall interpret and construe the Plan and reconcile any inconsistency
or supply any omitted detail in a manner consistent with the general terms of
the Plan and applicable law.
Section 9.3. Costs. All costs of administration of the Plan shall be paid by
the Company; provided, however, that any brokerage commissions, service charges
or applicable taxes incurred in connection with open market purchases and sales
of shares of Common Stock made under the Plan shall be borne by the
Participants.
Section 9.4. Termination of a Participant. If a Participant does not have at
least one whole Account Share or own or hold any other Reinvestment Eligible
Securities, the Participant's participation in the Plan may be terminated by the
Company, in its sole discretion, after written notice is mailed to such
Participant at his address of record. Additionally, the Company, in its sole
discretion, may terminate any Participant's participation in the Plan after
written notice mailed in advance to such Participant at his address of record.
Upon such termination, the Account of such Participant shall be treated as if he
had elected to terminate his participation in the Plan pursuant to Section 7.3
hereof, except that any fraction of a share of Common Stock shall be valued as
of the trading date immediately preceding the date on which such Participant's
participation is terminated.
Section 9.5. Escrow Account. Dividends, Interest, optional cash investments
and initial cash investments held pending investment in Common Stock pursuant to
the Plan shall be held in an escrow account separate from any other funds or
monies of the Company.
ARTICLE X
Administration of the Plan
--------------------------
Section 10.1. Selection of an Administrator. The Administrator shall be
appointed by the Company. The Administrator's appointment to serve as such may
be revoked by the Company at any time. The Administrator may resign at any time
upon reasonable notice to the Company. In the event that no Administrator is
appointed, the
22
<PAGE>
Company shall be deemed to be the Administrator for purposes of the Plan. The
Company shall be the initial Administrator.
Section 10.2. Compensation. The officers of the Company shall make such
arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator and any Independent Agent as they from time
to time deem reasonable and appropriate.
Section 10.3. Authority and Duties of Administrator. The Administrator shall
have the authority to undertake any act necessary to fulfill its duties as set
forth in the various provisions of the Plan. The Administrator shall maintain
appropriate records of the Accounts of Participants and the Fractional Share
Account.
Section 10.4. Liability of the Company, the Administrator and Any Independent
Agent. The Company, the Administrator and any Independent Agent shall not be
liable for any act done in good faith, or for the good faith omission to act in
administering or performing their duties with respect to the Plan, including,
without limitation, any claim of liability arising out of failure to terminate a
Participant's Account upon such Participant's death prior to receipt of notice
in writing of such death, or with respect to the prices at which shares are
purchased or sold for a Participant's Account and the times when such purchases
and sales are made, or with respect to any loss or fluctuation in the market
value after the purchase or sale of such shares.
Section 10.5. Records and Reports. The Administrator shall keep appropriate
records concerning the Plan, Accounts of Participants, purchases and sales of
Common Stock made under the Plan and Participants' addresses of record and shall
send Statements of Account and confirmations to each Participant in accordance
with the provisions of Section 7.5 hereof.
Section 10.6. Selection of Independent Agent. Any Independent Agent serving
in such capacity pursuant to the Plan shall be selected by the Company, and the
Administrator and the Company, or either of them, shall, subject to the
provisions of Section 3.3 hereof, make such arrangements and enter into such
agreements with the Independent Agent in connection with the activities
contemplated by the Plan as the Administrator and the Company, or either of
them, deem reasonable and appropriate.
23
<PAGE>
10.7. Source of Shares of Common Stock. The Company shall not change the
source of shares of Common Stock purchased by Participants in the Plan (i.e.,
either (i) newly issued shares of Common Stock or shares of Common Stock held
in the Company's treasury purchased from the Company or (ii) shares of Common
Stock purchased in the open market) more than once in any 12-month period. At
any time that the source of shares of Common Stock purchased in the Plan are
shares purchased in the open market, the Company shall not exercise its right to
change the source of shares absent a determination by the Company's Board of
Directors or Finance Committee of the Board of Directors that the Company has a
need to raise additional capital or there is another compelling reason for a
change.
ARTICLE XI
Miscellaneous Provisions
------------------------
11.1. Controlling Law. This Plan shall be construed, regulated and
administered under the laws of the State of Texas.
11.2. Acceptance of Terms and Conditions of Plan by Participants. Each
Participant, by completing an Enrollment Form and as a condition of
participation herein, for himself, his heirs, executors, administrators, legal
representatives and assigns, approves and agrees to be bound by the provisions
of this Plan and any subsequent amendments hereto, and all actions of the
Company and the Administrator hereunder.
24
<PAGE>
INDEPENDENT AUDITORS' CONSENT
HOUSTON INDUSTRIES INCORPORATED:
We consent to the incorporation by reference in this Registration Statement of
Houston Industries Incorporated on Form S-3 of our report dated February 16,
1993, appearing in the Annual Report on Form 10-K of Houston Industries
Incorporated for the year ended December 31, 1992 and to the reference to us
under the heading "Experts" in the Prospectus, which is a part of this
Registration Statement.
DELOITTE & TOUCHE
Houston, Texas
February 8, 1994
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Milton Carroll
------------------
Milton Carroll
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Robert J. Cruikshank
------------------------
Robert J. Cruikshank
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Linnet F. Deily
-------------------
Linnet F. Deily
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Joseph M. Hendrie
---------------------
Joseph M. Hendrie
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Howard W. Horne
-------------------
Howard W. Horne
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Thomas B. McDade
--------------------
Thomas B. McDade
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Alexander F. Schilt
-----------------------
Alexander F. Schilt
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Kenneth L. Schnitzer, Sr.
-----------------------------
Kenneth L. Schnitzer, Sr.
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ D. D. Sykora
----------------
D. D. Sykora
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Jack T. Trotter
-------------------
Jack T. Trotter
<PAGE>
HOUSTON INDUSTRIES INCORPORATED
Power of Attorney
-----------------
(Common Stock)
WHEREAS, HOUSTON INDUSTRIES INCORPORATED, a Texas corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), one or more
Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of up to 4,000,000 shares of
common stock, without par value, of the Company in connection with the Company's
Investor's Choice Plan;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Company, does hereby appoint Don D. Jordan,
Hugh Rice Kelly and William A. Cropper, and each of them severally, his true and
lawful attorney or attorneys-in-fact, with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, each such Registration Statement referred to above,
and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 2nd day
of February, 1994.
/s/ Bertram Wolfe
-----------------
Bertram Wolfe
