Exhibit 10.1
RRI ENERGY, INC.
2002 LONG TERM INCENTIVE PLAN
2010 LONG TERM INCENTIVE AWARD FOR OFFICERS

AWARD AGREEMENT
Pursuant to this award agreement (“Agreement”), as of March  _____, 2010, RRI
Energy, Inc. (the “Company”) hereby grants to                      (the
“Participant”),                      Restricted Stock Units,
                     Cash Performance Units and rights (the “Nonqualified Stock
Options” or “Options”) to purchase from the Company                      shares
of Common Stock of the Company at $                     per share. The number of
units and shares is subject to adjustment as provided in Section 15 of the RRI
Energy 2002 Long-Term Incentive Plan (the “Plan”), subject to the terms,
conditions and restrictions described in the Plan and in this Agreement.

1.  
Relationship to the Plan; Definitions.

  (a)  
This grant of Restricted Stock Units, Cash Performance Units and Options is
subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on this date. If any provision of this Agreement
conflicts with the express terms of the Plan, the terms of the Plan control and,
if necessary, the applicable provisions of this Agreement are deemed amended so
as to carry out the purpose and intent of the Plan. References to the
Participant also include the heirs or other legal representatives of the
Participant or the Participant’s estate.

  (b)  
Except as defined herein, capitalized terms have the same meanings as under the
Plan.

Cash Performance Unit means a Cash Award with each unit equal to the Fair Market
Value of one share of Common Stock on the vesting date as determined pursuant to
Section 3.
Disability means a physical or mental impairment of sufficient severity such
that the Participant is receiving benefits under the Company’s long-term
disability plan.
Employment means employment with the Company or any of its subsidiaries.
Options mean Nonqualified Stock Options.
Option Period means the period beginning on the date of this Agreement and
ending on the date the Options expire pursuant to Section 4.
Option Shares means shares of Common Stock which the Participant may have the
right to purchase under this Agreement.

 

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Performance Goal means the standard established by the Committee for the
performance period from March  _____, 2010 through March  _____, 2013 to
determine whether the Participant’s Cash Performance Units will vest. The
Performance Goal is attached as Exhibit I.
Restricted Stock Unit means a Stock Award with restrictions and subject to a
vesting condition as described in this Agreement.
Retirement means termination of Employment on or after attainment of age 55 with
at least five years of service with the Company.

2.  
Account. The Awards granted pursuant to this Agreement will be implemented by a
credit to a bookkeeping account maintained by the Company evidencing the accrual
in favor of the Participant of the unfunded and unsecured right to receive the
Restricted Stock Units, the Cash Performance Units and the Options granted.
Except as provided in Section 10, the Awards credited to the bookkeeping account
may not be sold, assigned, transferred, pledged or otherwise encumbered until
the Participant has been registered as the holder of shares of Common Stock
representing the Restricted Stock Units or exercised Options.

3.  
Vesting. Unless earlier forfeited as described below, the Awards will vest as
follows:

(i) The Restricted Stock Units will vest on March  _____, 2013. If the
Participant’s Employment is terminated for any reason on or prior to March
 _____, 2013, the Participant’s right to receive the Restricted Stock Units will
be forfeited.
(ii) The Cash Performance Units will vest, if at all, upon the Committee’s
determination that the Performance Goal has been met on March  _____, 2013 and
the performance level achieved. If the Performance Goal has not been met by
March  _____, 2013, the Cash Performance Units will be forfeited. If the
Participant’s Employment is terminated for any reason before the earlier of the
date the Committee determines that the Performance Goal has been met or March
 _____, 2013, the Participant’s right to receive the Cash Performance Units will
be forfeited.
(iii) The Options will vest and become exercisable in three cumulative annual
installments as follows:
 _____ Option Shares exercisable on March  _____, 2011;
an additional  _____ Option Shares exercisable on March  _____, 2012;
and the remaining  _____  Option Shares exercisable on March  _____, 2013.
The Participant must be employed by the Company through the date of
exercisability of each installment for the Options to become exercisable with
respect to additional shares of Common Stock on such date.

 

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4.  
Expiration of Option Period. The Option Period will expire on March  _____, 2016
except as follows:

(i) Upon termination of Employment of the Participant due to death or
Disability, the vested Options, if any, will expire upon the earlier of one year
following the date of termination of Employment or expiration of the Option
Period.
(ii) Upon termination of Employment of the Participant because of Retirement,
the vested Options, if any, will expire upon the earlier of three years
following the date of termination of Employment or expiration of the Option
Period.
(iii) Upon termination of Employment of the Participant by the Company or any of
its Subsidiaries for any reason or due to voluntary resignation by the
Participant, the unvested portion of the Options will expire immediately, and
the vested Options, if any, will expire upon the earlier of one year following
the date of termination of Employment or the expiration of the Option Period.
(iv) Notwithstanding anything herein to the contrary, in the event the
Participant dies following termination of Employment but prior to the expiration
of the Option pursuant to this Section 4, the portion of the Option exercisable
upon the Participant’s death will expire one year following the date of the
Participant’s death or, if earlier, upon the expiration of the Option Period.

5.  
Payment of Restricted Stock Units. Upon the vesting of Participant’s right to
receive Restricted Stock Units, a number of shares of Common Stock equal to the
number of vested Restricted Stock Units will be registered in the Participant’s
name as soon as practicable after the vesting date, but in no event later than
March 15 of the year immediately following the year during which the vesting
date occurs. The Company will have the right to withhold applicable taxes from
any such payment or from other compensation payable to the Participant at the
time of such vesting and delivery pursuant to Section 12 of the Plan.

6.  
Payment of Cash Performance Units. Upon the vesting, if at all, of Participant’s
right to receive Cash Performance Units, the Cash Performance Units will be
settled by a cash payment to the Participant based on the performance level
achieved as soon as practicable after the vesting date, but in no event later
than March 15 of the year immediately following the year during which the
vesting date occurs. The Company will have the right to withhold applicable
taxes from any such payment or from other compensation payable to the
Participant at the time of such vesting and delivery pursuant to Section 12 of
the Plan.

 

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7.  
Exercise of Options. Subject to the limitations set forth herein and in the
Plan, the Options may be exercised pursuant to the procedures established by the
Committee. Unless otherwise permitted by the Committee, upon exercise the
Participant must provide to the Company or its designated representative, cash,
check or money order payable to the Company equal to the full amount of the
purchase price for any shares of Common Stock being acquired or may remit the
proceeds received from the sale of Common Stock issuable pursuant to the
exercise of the options. The Company will have the right to withhold applicable
taxes from compensation otherwise payable to the Participant at the time of
exercise pursuant to Section 12 of the Plan.

8.  
Cash Payment Upon a Change of Control. Notwithstanding anything herein to the
contrary, upon or immediately prior to the occurrence of any Change of Control
of the Company prior to vesting date:

(i) Participant’s right to receive Restricted Stock Units will vest and will be
settled by a cash payment to Participant equal to the product of (A) the Fair
Market Value per share of Common Stock on the date immediately preceding the
date on which the Change of Control occurs and (B) the total number of
Restricted Stock Units;
(ii) Participant’s right to receive the Options (unless previously expired
pursuant to Section 4) shall be settled by a cash payment to the Participant
equal to the product of (A) the difference between (1) the Fair Market Value per
share of Common Stock on the date immediately preceding the date on which the
Change in Control occurs and (2) the exercise price of the Options and (B) the
total number of unexercised Option shares, regardless of whether such Option
shares have become exercisable under Section 3; and
(iii) Participant’s right to receive Cash Performance Units will vest on a
prorated basis at 100 percent performance achievement or performance as of the
date immediately preceding the date of the Change in Control, whichever is
higher and be settled by a cash payment equal to the product of the number of
vested Cash Performance Units and the Fair Market Value per share of Common
Stock on the date immediately preceding the date on which the Change in Control
occurs. Such cash payment will satisfy the rights of Participant and the
obligations of the Company under this Agreement in full.

9.  
Notices. For purposes of this Agreement, notices and all other communications
must be in writing and will be deemed to have been given when personally
delivered or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the Company at 1000 Main St.,
Houston, TX 77002, and to the Participant at the address on record for the
Participant in the Company’s human resources department or to such other address
as either party may furnish to the other in writing in accordance with this
Section 9.

 

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10.  
Successors and Assigns. This Agreement is binding upon and inures to the benefit
of the Participant, the Company and their respective permitted successors and
assigns. Notwithstanding anything herein to the contrary, the Restricted Stock
Units, Cash Performance Units and/or Options are transferable by the Participant
to Immediate Family Members, Immediate Family Members Trusts and Immediate
Family Member Partnerships pursuant to Section 14 of the Plan.

11.  
No Employment Guaranteed. Nothing in this Agreement gives the Participant any
rights to (or imposes any obligations for) continued Employment by the Company
or any Subsidiary thereof or successor thereto, nor does it give those entities
any rights (or impose any obligations) with respect to continued performance of
duties by the Participant.

12.  
Shareholder Rights. The Participant shall have no rights of a shareholder with
respect to the Restricted Stock Units or the Options unless and until the
Participant is registered as the holder of shares of Common Stock representing
the Restricted Stock Units and/or the Options on the records of the Company.

13.  
Section 409A of the Code. It is intended that this Agreement and any Awards
under this Agreement satisfy the short-term deferral exclusion under
Section 490A of the Code.

            RRI ENERGY, INC.
      /s/ Karen D. Taylor       Karen D. Taylor      Senior Vice President
Human Resources, Chief Diversity Officer   

 

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EXHIBIT I
PERFORMANCE GOAL
Cash Performance Units will vest based on the three-year average Total
Shareholder Return (“TSR”) for the period beginning March  _____, 2010 and
ending March  _____, 2013 relative to the composite three-year average TSR for
the same period for the Merchant Peer Companies. “Merchant Peer Companies” shall
mean Allegheny Energy, Inc., Calpine Corp., Dynegy, Inc., Mirant Corp., NRG
Energy, Inc. and PPL Corp.
Vesting of the Cash Performance Units shall be determined as follows:
RRI TOTAL SHAREHOLDER RETURN

                          100+%   Positive RRI TSR     RRI TSR 0 – -20%     RRI
TSR Below -20%  
Out perform composite 0%
    100 – 200 %     50 – 100 %     0 – 50 %
Under perform composite 0-25%
    75 – 99 %     0 – 49 %     0 %
Under perform composite 26-50%
    50 – 74 %     0 %     0 %
Below 50%
    0 %     0 %     0 %

The calculation of performance is linear within each set of possible outcomes.
In all events, the Compensation Committee retains downward discretion to adjust
payments in the event it determines, in its judgment, the calculated payment is
not warranted in light of the circumstances at a measurement date.

 

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