Exhibit 10.73

FORM OF

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as of
the [            ] day of April, 2007, between DYNEGY INC., a Delaware
corporation (“Dynegy”), and all of its Affiliates (collectively, the “Company”),
and [the named employee] (“Employee”). A copy of the Dynegy Inc.
[                    ] 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 April [            ], 2007
(“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 Class A 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. 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
promulgated thereunder, this Agreement and/or the Plan may be amended
accordingly.

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

 

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(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.

(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.

(d) Notwithstanding any other provision of this Agreement, upon the occurrence
of a Change in Control, the Option shall become fully vested and immediately
exercisable in full on the date of the Change in Control. For purposes hereof,
“Change in Control” shall mean the occurrence of any of the following events:
(i) a merger of Dynegy with another entity, a consolidation involving Dynegy, or
the sale of all or substantially all of the assets or equity interests of Dynegy
to another entity if, in any such case, (A) the holders of equity securities of
Dynegy 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
Dynegy immediately prior to such event or (B) 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;
(ii) the dissolution or liquidation of Dynegy, but excluding a reorganization
pursuant to chapter 11 of Title 11, U.S. Code, as amended; (iii) 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, (A) if Dynegy has
not engaged in a merger or consolidation, Dynegy, or (B) if Dynegy has engaged
in a merger or consolidation, the resulting entity; (iv) 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 (v) the Board (or the Committee)
adopts a resolution declaring that a Change in Control has occurred. For
purposes of the “Change in Control” definition, (1) “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
Dynegy receive capital stock of such other entity in such transaction or event,
in which event the resulting entity shall be such other entity, and
(2) subsequent to the consummation of a merger or consolidation that does not
constitute a Change in Control, the term “Dynegy” 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.

 

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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,
after which date the Option will automatically and without notice terminate and
become null and void; and

(b) if Employee’s employment with the Company terminates by reason of disability
(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 termination
of Employee’s employment by reason of such disability, 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 retirement
by Employee following (i) the date on which such Employee has reached fifty-five
(55) years of age and (ii) at least five (5) years of service as an employee of
the Company or its subsidiaries, the Option awarded hereunder shall continue to
become exercisable in accordance with Section 2(a) of this Agreement, and
Employee may exercise the Option, to the extent not previously exercised, at any
time up to and including the date five (5) years after the date of termination
of Employee’s employment by reason of such retirement, 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

(d) 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

 

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(e) if Employee’s employment with the Company terminates by reason of
resignation by the Employee (except as otherwise provided in Section 3(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 the date of termination by reason of such
resignation, after which date the Option will automatically and without notice
terminate and become null and void; and

(f) if Employee’s employment with the Company terminates by reason of dismissal
by the Company other than For Cause, then 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 one (1) year
after the date of such termination of employment, after which date the Option
will automatically and without notice terminate and become null and void; and

(g) if Employee’s employment with the Company is terminated as a result of an
Involuntary Termination occurring (i) in connection with, but in no event
earlier than sixty (60) days prior to, a Change in Control or (ii) on or within
one year after the effective date upon which a Change in Control occurs, 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 “Corporate Change,” as such term is defined in the Plan)
as the Committee may determine in connection with or in contemplation of a
Corporate Change 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 Corporate Change as further described in the Plan.

(h) For purposes of this Agreement:

(i) “For Cause” shall mean, and hence arise where, as determined by the
Committee in its sole discretion, Employee (A) has been convicted of a
misdemeanor involving moral turpitude or a felony; (B) has failed to
substantially perform the duties of such Employee to the Company (other than
such failure resulting from Employee’s incapacity due to physical or mental
condition) which results in a materially adverse effect upon the Company,
financial or otherwise; (C) has refused without proper legal reason to perform
Employee’s duties and responsibilities to the Company; or (D) has breached any
material corporate policy maintained and established by the Company that is
applicable to Employee, provided such breach results in a materially adverse
effect upon the Company, financial or otherwise.

 

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(ii) “Involuntary Termination” shall mean any termination of Employee’s
employment with the Company that:

(A) does not result from (1) a termination For Cause of Employee, (2) Employee’s
death or disability (as defined in Section 3(b) above) or (3) a voluntary
resignation by Employee from the Company (other than a resignation pursuant to
clause (B) of this Section 3(h)(ii)), or

(B) results from a resignation by Employee on or before the date which is sixty
(60) days after the date that Employee first receives, written notice from or on
behalf of the Company of (1) if Employee is employed as a Managing Director or
above of the Company, (x) a substantial reduction in Employee’s duties from
those applicable to Employee immediately prior to the date on which the Change
in Control occurs determined by taking into consideration, among other factors,
the Company’s status prior to the Change in Control as an independent
corporation whose equity securities are publicly traded if Employee’s duties
encompass or are affected by such matters, as determined by the Committee in its
sole discretion, (y) a reduction in Employee’s annual base salary from the
annual base salary provided to Employee immediately prior to the date on which
the Change in Control occurs, or (z) a change in location of Employee’s
principal place of employment by fifty (50) miles or more from the location
where Employee was principally employed immediately prior to the date on which
the Change in Control occurs; or (2) if Employee is not employed as a Managing
Director or above of the Company, (x) a change in the location of Employee’s
principal place of employment by fifty (50) miles or more from the location
where Employee was principally employed immediately prior to the date on which
the Change in Control occurs or (y) Employee’s offer of, assignment to, or
placement in a position within the Company that provides a base salary lower
than Employee’s base salary on Employee’s termination date.

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.

 

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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 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 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 certificates 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, including any amendments or supplements thereto, or the Dynegy Inc.
Severance Pay Plan, including any amendments or supplements thereto, the terms
hereof shall be controlling.

 

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(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.

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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:   J. Kevin Blodgett   Title:   General Counsel & EVP, Administration  

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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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