Exhibit 10.3
DYNEGY INC.
2009 PHANTOM STOCK PLAN
I. PURPOSE
The purpose of the DYNEGY INC. 2009 PHANTOM STOCK PLAN (the “Plan”) is to
provide a means through which DYNEGY INC., a Delaware corporation (the
“Company”), and its Affiliates may attract able persons to enter the employ of
the Company and its Affiliates and to provide a means whereby those individuals
upon whom the responsibilities of the successful administration and management
of the Company and its Affiliates rest, and whose present and potential
contributions to the Company and its Affiliates are of importance, can be
rewarded based on the Company’s performance, thereby strengthening their concern
for the profitable growth of the Company and its Affiliates.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) “Affiliate” means any corporation, partnership, limited liability company or
partnership, association, trust or other organization which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company.
(b) “Award” means a grant of Phantom Stock Units issued under this Plan.
(c) “Award Agreement” means a written agreement between the Company and a
Participant with respect to a grant of an Award.
(d) “Board” means the Board of Directors of the Company.
(e) “Code” means the Internal Revenue Code of 1986, as amended. Reference in the
Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations under such section.
(f) “Committee” means the Compensation and Human Resources Committee of the
Company’s Board.
(g) “Common Stock” means the Class A common stock, $0.01 par value per share, of
the Company, or any security into which such common stock may be changed by
reason of any transaction or event of the type described in Article VII.
(h) “Company” means Dynegy Inc., a Delaware corporation.

 

 

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(i) “Corporate Change” shall means the occurrence of any of the following
events:
(1)  a merger of the Company with another entity, a consolidation involving the
Company, or the sale of all or substantially all of the assets or equity
interests of the Company to another entity if, in any such case, (i) the holders
of equity securities of the Company immediately prior to such event do not
beneficially own immediately after such event equity securities of the resulting
entity entitled to fifty-one percent (51%) or more of the votes then eligible to
be cast in the election of directors (or comparable governing body) of the
resulting entity in substantially the same proportions that they owned the
equity securities of the Company immediately prior to such event or (ii) the
persons who were members of the Board immediately prior to such event do not
constitute at least a majority of the board of directors of the resulting entity
immediately after such event;
(2)  the dissolution or liquidation of the Company, but excluding a
reorganization pursuant to chapter 11 of Title 11, U.S. Code, as amended;
(3)  a circumstance where any person or entity, including a “group” as
contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains
ownership or control (including, without limitation, power to vote) of fifty
percent (50%) or more of the combined voting power of the outstanding securities
of, (i) if the Company has not engaged in a merger or consolidation, the
Company, or (ii) if the Company has engaged in a merger or consolidation, the
resulting entity;
(4) circumstances where, as a result of or in connection with, a contested
election of directors, the persons who were members of the Board immediately
before such election shall cease to constitute a majority of the Board; or
(5) the Board (or the Committee) adopts a resolution declaring that a Corporate
Change has occurred.
For purposes of this definition, (i) “resulting entity” in the context of an
event that is a merger, consolidation or sale of all or substantially all of the
subject assets or equity interests shall mean the surviving entity (or acquiring
entity in the case of an asset or equity interest sale), unless the surviving
entity (or acquiring entity in the case of an asset sale) is a subsidiary of
another entity and the holders of common stock of the Company receive capital
stock of such other entity in such transaction or event, in which event the
resulting entity shall be such other entity, and (i) subsequent to the
consummation of a merger or consolidation that does not constitute a Corporate
Change, the term “Company” shall refer to the resulting entity and the term
“Board” shall refer to the board of directors (or comparable governing body) of
the resulting entity.
(j) “Director” means an individual who is a member of the Board.
(k) “Disability” has the meaning provided in the Dynegy Inc. Long Term
Disability Plan.
(l) “Employee” means any person in an employment relationship with the Company
or any Affiliate.

 

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(m) “Fair Market Value” means, as of any specified date, the closing sales price
of the Common Stock reported on the stock exchange composite tape on that date
(or such other reporting service approved by the Committee), or, if no prices
are reported on that date, on the last preceding date on which such prices of
the Common Stock are so reported. In the event Common Stock is not publicly
traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the
Committee in such manner as it deems appropriate, in accordance with Code
Section 409A.
(n) “1934 Act” means the Securities Exchange Act of 1934, as amended.
(o) “Participant” means an Employee who has been granted an Award.
(p) “Phantom Stock Unit” means an Award granted under Article VI of the Plan.
(q) “Plan” means the Dynegy Inc. 2009 Phantom Stock Plan, as amended from time
to time.
(r) “Rule 16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as such
may be amended from time to time, and any successor rule, regulation or statute
fulfilling the same or a similar function.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon the date its adoption by the Committee. No
further Awards may be granted under the Plan after ten (10) years from the
Plan’s adoption date.
IV. ADMINISTRATION
(a) Powers. Subject to the express provisions of the Plan, the Committee shall
have authority, in its discretion, to determine which Employees shall receive an
Award, the time or times when such Award shall be made, and the value of each
such Award. In making such determinations, the Committee shall take into account
the nature of the services rendered by the respective Employees, their present
and potential contribution to the Company’s success and such other factors as
the Committee in its sole discretion shall deem relevant.
(b) Additional Powers. The Committee shall have such additional powers as are
delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, this shall include the power to construe the Plan and
the respective agreements executed hereunder, to prescribe rules and regulations
relating to the Plan, and to determine the terms, restrictions and provisions of
the agreement relating to each Award, and to make all other determinations
necessary or advisable for administering the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any agreement relating to an Award in the manner and to the extent it shall deem
expedient to carry it into effect. The determinations of the Committee on the
matters referred to in this Article IV shall be conclusive.

 

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V. PLAN LIMIT
Subject to adjustment as provided in Article VII, the aggregate number of
Phantom Stock Units that may be issued under the Plan shall not exceed
25,000,000. Phantom Stock Units shall be deemed to have been issued on the date
an Award is granted under the terms of an Award Agreement and, when vested, are
settled in cash. To the extent that an Award lapses or the rights of its holder
terminate, any Phantom Stock Units subject to such Award shall not be available
for the grant of additional Awards under the Plan. Notwithstanding any provision
of this Plan, no shares of Common Stock will be issued upon settlement of an
Award.
VI. PHANTOM STOCK UNITS
(a) Phantom Stock Unit Awards. A “Phantom Stock Unit” is the grant of a right to
receive a cash payment in an amount equal to the Fair Market Value of a share of
Common Stock on its vesting date. The Committee may, subject to the limitations
of the Plan, grant Phantom Stock Units to eligible individuals upon such terms
and conditions as it may determine to the extent such terms and conditions are
consistent with Section 6(c) below.
(b) Eligibility for Awards. Awards may be granted only to persons who, at the
time of grant, are Employees. An Award may be granted on more than one occasion
to the same person, subject to the limitations set forth in the Plan. In
determining the number of Phantom Stock Units to be granted to a Participant,
the Committee shall take into account a Participant’s responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate.
(c) Terms and Conditions of Awards. For each Participant, the Committee will
determine the timing of awards; the number of Phantom Stock Units awarded, any
performance measures or service requirements used for determining whether the
Phantom Stock Units are earned, and whether dividend equivalents will be paid on
Phantom Stock Units, either currently or on a deferred basis.
(d) Payment. Payment for Phantom Stock Units earned under an Award shall be made
in cash within thirty (30) days after the date a Phantom Stock Unit becomes
vested (or such other time as the applicable Phantom Stock Unit Award Agreement
may provide). In the event that payment is not made at the time vesting occurs,
the Award Agreement for such Phantom Stock Unit shall contain provisions that
comply with the requirements of Code Section 409A.
(e) Termination of Award. An Award of Phantom Stock Units shall terminate if the
Participant does not remain continuously in the employ of the Company and its
Affiliates at all times during the applicable vesting period, except as may be
otherwise determined by the Committee. At the time of the Award is issued, the
Committee may, in its sole discretion, prescribe additional terms, conditions or
restrictions relating to the such Phantom Stock Units, including, but not
limited to, rules pertaining to the termination of employment (by retirement,
Disability, death or otherwise) of a Participant prior to the Award’s vesting
date. Such additional terms, conditions or restrictions shall be set forth in a
Phantom Stock Unit Award Agreement issued in conjunction with the Award.
(f) Phantom Stock Award Agreements. At the time an Award is issued under this
Article VI, the Company and the Participant shall enter into a Phantom Stock
Unit Award Agreement setting forth each of the matters contemplated hereby, and
such additional matters as the Committee may determine to be appropriate. The
terms and provisions of the respective Phantom Stock Unit Award Agreements need
not be identical.

 

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VII. RECAPITALIZATION OR REORGANIZATION
(a) No Effect on Right or Power. The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s or any
Affiliate’s capital structure or its business, any merger or consolidation of
the Company or any Affiliate, any issue of debt or equity securities ahead of or
affecting Common Stock or the rights thereof, the dissolution or liquidation of
the Company or any Affiliate or any sale, lease, exchange or other disposition
of all or any part of its assets or business or any other corporate act or
proceeding.
(b) Adjustment upon a Change in Capitalization
(1) Subdivision or Consolidation of Shares; Stock Dividends. The shares with
respect to which the value of an Award is determined are shares of Common Stock
as presently constituted, but if, and whenever, prior to the expiration of an
Award theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the number of
shares of Common Stock with respect to which such Award may thereafter be
satisfied, as applicable (i) in the event of an increase in the number of
outstanding shares shall be proportionately increased, and (ii) in the event of
a reduction in the number of outstanding shares shall be proportionately
reduced. Any fractional share resulting from such adjustment shall be rounded
down to the next whole share.
(2) Recapitalizations. If the Company recapitalizes, reclassifies its capital
stock, or otherwise changes its capital structure (a “recapitalization”), the
number and class of shares of Common Stock used to determine the value of an
Award theretofore granted shall be adjusted so that the value of such Award
shall thereafter be determined by reference to the number and class of shares of
stock and securities to which the Participant would have been entitled pursuant
to the terms of the recapitalization if, immediately prior to the
recapitalization, the Participant had been the holder of record of the number of
shares of Common Stock used to determine the value of such Award.
(c) Adjustment upon a Corporate Change. If a Corporate Change occurs, no later
than (x) ten (10) days after the approval by the stockholders of the Company of
the merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of Directors or (y) thirty (30) days after a
Corporate Change of the type described in Section 2(i)(3), the Committee, acting
in its sole discretion without the consent or approval of any Participant, shall
effect one or more of the following alternatives, which alternatives may vary
among individual Participants and which may vary among Awards held by any
individual Participant:
(1) require the mandatory surrender to the Company by selected Participants of
some or all of the outstanding Awards held by such Participants as of a date,
before or after such Corporate Change, specified by the Committee, in which
event the Committee shall thereupon cancel such Awards and the Company shall pay
(or cause to be paid) to each Participant an amount of cash equal to the Fair
Market Value of the Award as calculated in Subsection (d) below (the “Change of
Control Value”), or

 

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(2) make such adjustments to the Award as the Committee deems appropriate to
reflect such Corporate Change (provided, however, that the Committee may
determine in its sole discretion that no adjustment is necessary to an Award),
including, without limitation, adjusting the Award to provide that the number
and class of shares of Common Stock used to determine the value of the Award
shall be adjusted so that such Award shall thereafter cover securities of the
surviving or acquiring corporation or other property (including, without
limitation, cash) as determined by the Committee in its sole discretion.
Unless otherwise provided in an Award Agreement, and notwithstanding the
foregoing, upon the occurrence of a Corporate Change, the Committee, acting in
its sole discretion without the consent or approval of any Participant, may
require the mandatory surrender to the Company by selected Participants of some
or all of the outstanding Phantom Stock Units as of a designated date, before or
after such Corporate Change, specified by the Committee, in which event the
Committee shall thereupon cancel such Phantom Stock Units and the Company shall
pay (or cause to be paid) to each Participant an amount of cash equal to the
maximum value of such Phantom Stock Units which, in the event the applicable
vesting period set forth in such Phantom Stock Unit Award has not been
completed, shall be multiplied by a fraction, the numerator of which is the
number of days during the period beginning on the first day of the applicable
vesting period and ending on the date of the surrender, and the denominator of
which is the aggregate number of days in the applicable vesting period.
(d) Change of Control Value. For the purposes of clause (1) in Subsection (c)
above, the “Change of Control Value” shall equal the amount determined in clause
(i), (ii) or (iii), whichever is applicable, as follows; (i) the per share price
offered to stockholders of the Company in any such merger, consolidation, sale
of assets or dissolution transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) if such Corporate Change occurs other
than pursuant to a tender or exchange offer, the fair market value per share of
the shares into which the Company’s Common Stock is converted, as determined by
the Committee as of the date determined by the Committee to be the date of
cancellation and surrender of such Awards. In the event that the consideration
offered to stockholders of the Company in any transaction described in this
Subsection (d) or Subsection (c) above consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
(e) Other Changes in the Common Stock. In the event of changes in the
outstanding Common Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Article VII, such Award and any agreement
evidencing such Award shall be subject to adjustment by the Committee at its
sole discretion as to the number shares of Common Stock used to determine the
value of the Award. In the event of any such change in the outstanding Common
Stock or distribution to the holders of Common Stock, or upon the occurrence of
any other event described in this Article VII, the aggregate number of Phantom
Stock Units available for grant under the Plan shall be appropriately adjusted
as determined by the Committee, whose determination shall be conclusive.

 

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(f) No Adjustments unless Otherwise Provided. Except as hereinbefore expressly
provided, the issuance by the Company of shares of stock of any class or
securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not
for fair value, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.
VIII. AMENDMENT AND TERMINATION OF THE PLAN
The Company, through action by the Board or the Committee, shall have the right
to alter or amend the Plan or any part thereof from time to time; provided that
no change in the Plan may be made that would impair the rights of a Participant
with respect to an Award theretofore granted without the consent of the
Participant. The Company, through discretionary action of the Board or the
Committee, may terminate the Plan at any time, provided such termination shall
not result in the termination of the unvested portion of any outstanding Award.
IX. MISCELLANEOUS
(a) No Right To An Award. Neither the adoption of the Plan nor any action of the
Board or of the Committee shall be deemed to give any individual any right to be
granted an Award under this Plan’s terms, except as may be evidenced by an Award
Agreement duly executed on behalf of the Company, and then only to the extent
and on the terms and conditions expressly set forth therein. The Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of funds or assets to assure the
performance of its obligations under any Award.
(b) No Employment/Membership Rights Conferred. Nothing contained in the Plan
shall (i) confer upon any Employee any right with respect to continuation of
employment or of a consulting or advisory relationship with the Company or any
Affiliate or (ii) interfere in any way with the right of the Company or any
Affiliate to terminate his or her employment or consulting or advisory
relationship at any time.
(c) Withholding. The Company shall have the right to deduct in connection with
all Awards any taxes required by law to be withheld and to require any payments
required to enable it to satisfy its withholding obligations.
(d) No Restriction on Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any action which
is deemed by the Company or such Affiliate to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan or
any Award made under the Plan. No Participant, beneficiary or other person shall
have any claim against the Company or any Affiliate as a result of any such
action.

 

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(e) Restrictions on Transfer. Awards granted under this Plan shall not be
transferable otherwise than by will or the laws of descent and distribution.
(f) Termination of Awards or Disgorgement of Funds Triggered By Material
Restatement of the Company’s Financial Results. In accordance with Section 16 of
the Company’s March 6, 2008 Amended and Restated Corporate Governance
Guidelines, in the event of a material restatement of the Company’s financial
results, the Committee shall have the authority to review the Awards granted to
the Company’s “Executive Officers,” as defined under the 1934 Act and the rules
and regulations promulgated thereunder, or earned during the period for which
such financial results are or will be restated and to take any appropriate
action, as determined by the Committee (including, but not limited to,
termination of Awards or repayment of Award proceeds to the Company), with
respect to any such Awards.
(g) Right of Offset. The Company will have the right to offset against its
obligation to deliver shares of Common Stock under the Plan or any Award
Agreement any outstanding amounts (including, without limitation, travel and
entertainment or advance account balances, loans, repayment obligations under
any Awards, or amounts repayable to the Company pursuant to tax equalization,
housing, automobile or other employee programs) that the Participant then owes
to the Company and any amounts the Committee otherwise deems appropriate
pursuant to any tax equalization policy or agreement; provided, however, that no
such offset shall be permitted if it would constitute an “acceleration” of a
payment hereunder within the meaning of Code Section 409A. This right of offset
shall not be an exclusive remedy and the Company’s election not to exercise the
right of offset with respect to any amount payable to a Participant shall not
constitute a waiver of this right of offset with respect to any other amount
payable to the Participant or any other remedy.
(h) Code Section 409A. It is the intention of the Company that no Award shall be
“deferred compensation” subject to Code Section 409A unless and to the extent
that the Committee specifically determines otherwise, and the Plan and the terms
and conditions of all Awards shall be interpreted accordingly. The terms and
conditions governing any Awards that the Committee determines will be subject to
Code Section 409A, including any rules for elective or mandatory deferral of the
delivery of cash or shares of Common stock pursuant thereto, shall be set forth
in the applicable Award Agreement, and shall comply in all respects with Code
Section 409A. Notwithstanding any provision herein to the contrary, any Award
issued under the Plan that constitutes a deferral of compensation under a
“nonqualified deferred compensation plan” as defined under Code
Section 409A(d)(1) and is not specifically designated as such by the Committee
shall be modified or cancelled to comply with the requirements of Code
Section 409A, including any rules for elective or mandatory deferral of the
delivery of cash or Shares pursuant thereto. Unless expressly permitted by the
Committee in an Award Agreement, a Participant does not have any right to make
any election regarding the time or form of any payment pursuant to an Award.

 

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(i) Governing Law. The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflicts of laws
principles thereof.
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
this 4th day of March, 2009.

            DYNEGY INC.
      By:   /s/ Julius Cox       Name:   Julius Cox       Title:   Vice
President of Human Resources    

 

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