Exhibit 10.1

 

General Version

 

FORM OF NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

 

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as of
the       th day of                 , 2012, between DYNEGY INC., a Delaware
corporation (“Dynegy”), and all of its Affiliates (collectively, the “Company”),
and                 (“Employee”).  A copy of the Dynegy Inc. 2012 Long Term
Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a
part of this Agreement as if fully set forth herein.  Unless the context
otherwise requires, all terms that are not defined herein but which are defined
in the Plan shall have the same meaning given to them in the Plan when used
herein.

 

1.             The Grant.  The Compensation and Human Resources Committee of the
Board of Directors (the “Committee”) granted to Employee on               , 2012
(“Effective Date”), as a matter of separate inducement and not in lieu of any
salary or other compensation for Employee’s services, the right and option to
purchase (the “Option”), in accordance with the terms and conditions set forth
in the Plan and in this Agreement, an aggregate number of shares (the “Shares”)
of common stock of Dynegy, $0.01 par value per share (the “Common Stock”), at a
price of $                       per share (the “Exercise Price”).  Employee
acknowledges receipt of a copy of the Plan, and agrees that the Option shall be
subject to all of the terms and provisions of the Plan, including future
amendments thereto, if any, pursuant to the terms thereof, and to all of the
terms and conditions of this Agreement.  The Option shall not be treated as an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).  The Exercise Price is, in the judgment
of the Committee, not less than one hundred percent (100%) of the Fair Market
Value of a share of the Common Stock on the Effective Date.

 

2.             Exercise.  Subject to the provisions, limitations and other
relevant provisions of the Plan and of this Agreement, and the earlier
expiration of the Option as herein provided, Employee may exercise the Option to
purchase some or all of the Shares as follows:

 

(a)           The Option shall become exercisable in three cumulative equal
annual installments as follows:

 

(i)            on the first anniversary of the Effective Date, the right to
purchase one-third of the aggregate number of Shares shall become exercisable
without further action by the Committee;

 

(ii)           on the second anniversary of the Effective Date, the right to
purchase an additional one-third of the aggregate number of Shares shall become
exercisable without further action by the Committee; and

 

(iii)          on the third anniversary of the Effective Date, the right to
purchase the remaining one-third of the aggregate number of Shares shall become
exercisable without further action by the Committee.

 

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(b)           Notwithstanding any other provision of this Agreement, the
unexercised portion of the Option, if any, will automatically and without notice
terminate and become null and void upon the expiration of ten (10) years from
the Effective Date of the Option.

 

(c)           Any exercise by Employee of the Option, or portion thereof, shall
be conducted by delivery of an irrevocable notice of exercise to the Company or
its designee as provided in the Plan.  In no event shall Employee be entitled to
exercise the Option for less than a whole Share.

 

3.             Termination of Employment.  The Option may be exercised only
while Employee remains an employee of the Company and will terminate and cease
to be exercisable upon Employee’s termination of employment with the Company,
except that:

 

(a)           if Employee shall die while in the employ of the Company, the
Option awarded hereunder shall immediately vest with respect to all of the
remaining Shares and become fully exercisable without further action by the
Committee, and Employee’s legal representative, or the person, if any, who
acquired the Option by bequest or inheritance or by reason of the death of
Employee, may exercise the Option, to the extent not previously exercised, in
respect of any or all such Shares at any time up to and including the date three
(3) years after the date of death, or the end of the option term, whichever is
less, after which date the Option will automatically and without notice
terminate and become null and void; and

 

(b)           if Employee is determined to be disabled (as defined in the
Company’s long term disability program or plan in which Employee is a
participant or, if Employee does not participate in any such plan, as defined in
the Dynegy Inc. Long Term Disability Plan, as amended, or the successor plan
thereto), the Option awarded hereunder shall immediately vest with respect to
all of the remaining Shares and become fully exercisable without further action
by the Committee, and Employee may exercise the Option, to the extent not
previously exercised, in respect of any or all such Shares at any time up to and
including the date three (3) years after the date of such determination, or the
end of the option term, whichever is less, after which date the Option will
automatically and without notice terminate and become null and void; and

 

(c)           if Employee’s employment with the Company terminates by reason of
dismissal by the Company for Cause, then the Option, to the extent not
previously exercised, will immediately, automatically and without notice or
further action by the Committee, terminate and become null and void; and

 

(d)           if Employee’s employment with the Company terminates by reason of
resignation by the Employee (except as otherwise provided in Section 3(f) or
(g) below) and at a time when Employee was entitled to exercise the Option,
Employee may exercise the Option, to the extent not previously exercised, with
respect to any or all such number of Shares as to which the Option was
exercisable as of the date of Employee’s termination of employment, at any time
up to and including the date ninety (90) days after

 

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the date of termination by reason of such resignation, or the end of the option
term, whichever is less, after which date the Option will automatically and
without notice terminate and become null and void; and

 

(e)           if Employee’s employment with the Company terminates by reason of
Involuntary Termination, as such term is defined below, the Option awarded
hereunder shall immediately vest with respect to all remaining Shares and become
fully exercisable without further action of the Committee, and Employee may
exercise the Option, to the extent not previously exercised, at any time up to
and including the date three (3) years after the date of such termination of
employment, or the end of the option term, whichever is less, after which date
the Option will automatically and without notice terminate and become null and
void; and

 

(f)            if the Employee’s employment with the Company terminates as a
result of an Involuntary Termination within six months following a Change in
Control, the Option shall become fully vested and immediately exercisable in
full on the effective date of the Change of Control, and such Option shall
remain exercisable from such date for the lesser of: (A) five (5) years from the
date of such Change in Control; (B) the remaining period of time for exercise of
the Option hereunder (irrespective of any mandatory exercise period specified
herein that would otherwise be triggered by the termination of employment of
such Employee); or (C) such period of time (which period of time may end as
early as the consummation of a Change in Control) as the Committee may determine
in connection with or in contemplation of a Change in Control in the exercise of
its discretion under the Plan, with respect to which the Committee has the
discretion to, among other things, require the surrender of stock options (which
surrender may be in exchange for a cash payment, if applicable) and to cancel
such stock options upon the consummation of a Change in Control; and

 

(g)           if the Employee’s employment with the Company terminates by reason
of retirement following the date on which such Employee has (I) reached sixty
(60) years of age and (II) completed at least ten (10) years of service as an
employee of the Company, Employee may exercise the Option, to the extent not
previously exercised, with respect to any or all such number of Shares as to
which the Option was exercisable as of the date of Employee’s termination of
employment and (1) the number of then unvested and unexercised Shares subject to
the Agreement multiplied by (2) a fraction, the numerator of which shall be the
number of calendar days which have lapsed since the later of the Effective Date
or most recent anniversary thereof and the denominator of which shall be the
number of calendar days from the later of the Effective Date or the most recent
anniversary thereof until the third anniversary of the Effective Date, at any
time up to and including the date ninety (90) days after the date of
termination, or the end of the option term, whichever is less, after which date
the Option will automatically and without notice terminate and become null and
void.

 

(h)           For purposes of this Agreement:

 

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“Base Salary” shall mean the regular base salary of Employee but excluding all
bonuses, expense reimbursements, benefits paid under any plan maintained by the
Company and all equity awards of any type.

 

“Cause” shall have the same meaning as set forth in the Plan.

 

“Change in Control” shall have the same meaning as the term “Corporate Change”
set forth in the Plan.

 

“Involuntary Termination” shall have the same meaning as specified in the Dynegy
Inc. Executive Severance Pay Plan.

 

4.             Registration.  The Company intends to register the Shares for
issuance under the Securities Act of 1933, as amended (the “Act”), and to keep
such registration effective throughout the period the Option is exercisable.  In
the absence of such effective registration or an available exemption from
registration under the Act, issuance of the Shares will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available.  The Company intends to use its best efforts to ensure
that no such delay will occur.  In the event exemption from registration under
the Act is available upon an exercise of the Option, Employee (or the person
permitted to exercise the Option in the event of Employee’s death or
incapacity), if requested by the Company to do so, will execute and deliver to
the Company, in writing, such agreements and other documents containing such
provisions as the Company may require to assure compliance with applicable
securities laws.

 

Employee agrees that the Shares will not be sold or otherwise disposed of in any
manner which would constitute a violation of any applicable federal or state
securities laws.  Employee also agrees that (a) the certificates representing
the Shares, if any, may bear such legend or legends as the Committee in its sole
discretion deems appropriate in order to assure compliance with applicable
securities laws and (b) the Company may refuse to register transfer of the
Shares on the stock transfer records of the Company, and may give related
instructions to its transfer agent, if any, to stop registration of such
transfer, if such proposed transfer would in the opinion of counsel satisfactory
to the Company constitute a violation of any applicable securities law.

 

5.             Employment Relationship.  For purposes of this Agreement,
Employee shall be considered to be in the employment of the Company as long as
Employee remains an employee of (a) the Company, (b) an Affiliate (as such term
is defined in the Plan) or (c) a corporation (or a parent or subsidiary of such
corporation) assuming or substituting a new option for the Option.  Any question
as to whether and when there has been a termination of such employment, and the
cause of such termination, shall be determined by the Committee in its sole
discretion, and its determination shall be final and binding on all parties.

 

6.             Withholding Taxes.  By Employee’s acceptance hereof, Employee
hereby (a) agrees to reimburse the Company or any Affiliate by which Employee is
employed for any federal, state or local taxes required by any government to be
withheld or otherwise deducted by such corporation in respect of Employee’s
exercise of the Option, (b) authorize the Company or

 

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any Affiliate by which Employee is employed to withhold from any cash
compensation paid to Employee or in Employee’s behalf, an amount sufficient to
discharge any federal, state and local taxes imposed on the Company, or the
Affiliate by which Employee is employed, and which otherwise has not been
reimbursed by Employee, in respect of Employee’s exercise of the Option and
(c) agrees that the corporation by which Employee is employed, may, in its
discretion, hold the stock to which Employee is entitled upon exercise of the
Option, as security for the payment of the aforementioned withholding tax
liability, until cash sufficient to pay that liability has been accumulated, and
may, in its discretion, effect such withholding by retaining Shares issuable
upon the exercise of the Option having a Fair Market Value on the date of
exercise which is equal to the amount to be withheld.

 

7.             Miscellaneous.

 

(a)           This grant is subject to all the terms, conditions, limitations
and restrictions contained in the Plan.  In the event of any conflict or
inconsistency between the terms hereof and the terms of the Plan, the terms of
the Plan shall be controlling.  In the event of any conflict or inconsistency
between the terms hereof and the terms of the Dynegy Inc. Executive Severance
Pay Plan and Dynegy Inc. Change in Control Executive Severance Pay Plan,
including any amendments or supplements thereto, the terms hereof shall be
controlling.

 

(b)           This grant is not a contract of employment and the terms of
Employee’s employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein. 
Nothing herein shall be construed to impose any obligation on the Company or on
any Affiliate to continue Employee’s employment, and it shall not impose any
obligation on Employee’s part to remain in the employ of the Company or of any
Affiliate.

 

(c)           All references in this Agreement to any “corporation” shall
include a corporation, a general partnership, a joint venture, a limited
partnership, a business trust or any other lawful business entity.

 

(d)           Any notices or other communications provided for in this Agreement
shall be sufficient if in writing. In the case of Employee, such notices or
communications shall be effectively delivered when hand delivered to Employee at
his or her principal place of employment or when sent by registered or certified
mail to Employee at the last address Employee has filed with the Company. In the
case of the Company, such notices or communications shall be effectively
delivered when sent by registered or certified mail to the Company at its
principal executive offices.

 

8.             Amendment.  This Agreement may not be amended except by an
agreement in writing signed by each of the Company and Employee consenting to
such amendment. Notwithstanding the preceding, if it is subsequently determined
by the Committee, in its sole discretion, that the terms and conditions of this
Agreement and/or the Plan are not compliant with Code Section 409A, or any
Treasury regulations or Internal Revenue Service guidance

 

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promulgated thereunder, this Agreement and/or the Plan may be amended by the
Company accordingly.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Employee has agreed to and accepted
the terms of this Agreement*, all as of the date first above written.

 

 

 

DYNEGY INC.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

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*Employee has agreed to and accepted the terms of this Agreement utilizing
online grant acceptance capabilities with E*Trade Financial, the Company’s stock
option administrator.

 

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