Exhibit 10.53

 

RELIANT ENERGY, INC.

2002 LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

Pursuant to this Award Agreement, RELIANT ENERGY, INC. (formerly, Reliant
Resources, Inc.) (the “Company”) hereby grants to «legal_name» (the “Optionee”),
a Director of the Company, on «grant_date» (the “Grant Date”), a right (the
“Option”) to purchase from the Company «award» shares of Common Stock of the
Company at «strike» per share (the “Exercise Price”), pursuant to the Reliant
Energy, Inc. 2002 Long-Term Incentive Plan (the “Plan”), with such number of
shares and such price per share being subject to adjustment as provided in
Section 15 of the Plan, and further subject to the following terms and
conditions:

 

1. Relationship to the Plan; Definitions. This Option 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 thereunder and are
in effect on the date hereof. Except as defined herein, capitalized terms shall
have the same meanings ascribed to them under the Plan. To the extent that any
provision of this Award Agreement conflicts with the express terms of the Plan,
it is hereby acknowledged and agreed that the terms of the Plan shall control
and, if necessary, the applicable provisions of this Award Agreement shall be
hereby deemed amended so as to carry out the purpose and intent of the Plan.
References to the Optionee herein also include the heirs or other legal
representatives of the Optionee. For purposes of this Award Agreement:

 

“Disability” means a physical or mental impairment of sufficient severity such
that the Participant can no longer serve as a Director.

 

“Option Period” means the period commencing upon the Optionee’s receipt of this
Award Agreement and ending on the date on which the Option expires pursuant to
Section 3(a).

 

“Option Shares” means the shares of Common Stock covered by this Award
Agreement.

 

“Retire” or “Retirement” means termination of service as a Director at the end
of a term or resignation from the Board as a result of reaching a maximum age as
established in the Company’s bylaws.

 

2. Exercise and Vesting Schedule.

 

(a) This Option shall become exercisable in three cumulative annual
installments, as follows:

 

(i) «vest_one» of the Option Shares shall become exercisable on «date_one»,

 

(ii) an additional «vest_two» of the Option Shares shall become exercisable on
«date_two», and

 

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(iii) the remaining «vest_three» Option Shares shall become exercisable on
«date_three»;

 

provided, however, that the Optionee must be in continuous service as a Director
through the date of exercisability of each installment in order for the Option
to become exercisable with respect to additional shares of Common Stock on such
date.

 

(b) This Option shall become fully exercisable, irrespective of the limitations
set forth in subparagraph (a) above, upon termination of service as a Director
due to death, Disability, or Retirement, provided that prior to such termination
the Optionee had been in continuous service as a Director.

 

3. Expiration of Option.

 

(a) Expiration of Option Period. The Option Period for vested Options shall
expire on «expiration».

 

(b) Termination of Service Due to Death or Disability. Upon termination of
service as a Director by the Optionee due to death or Disability, the vested
Option shall expire upon the earlier of one year following the date of
termination of service or expiration of the Option Period.

 

(c) Termination Due to Retirement. Upon termination of service as a Director by
the Optionee because of Retirement, the vested Option shall expire upon the
earlier of three years following the date of termination of service or
expiration of the Option Period.

 

(d) Termination of Service for Other Reasons. Upon termination of service as a
Director by the Optionee for any reason other than death, Disability or
Retirement, the portion of the Option not exercisable shall expire immediately,
and the portion of the Option exercisable upon termination shall expire upon the
earlier of 90 days following the date of termination of service as a Director or
the expiration of the Option Period.

 

(e) Death Following Termination of Employment. Notwithstanding anything herein
to the contrary, in the event the Optionee dies following termination of service
as a Director but prior to the expiration of the Option pursuant to this Section
3, the portion of the Option exercisable upon the Optionee’s death shall expire
one year following the date of the Optionee’s death or, if earlier, upon the
expiration of the Option Period.

 

4. Cash Payment Upon a Change of Control. Notwithstanding anything herein to the
contrary, upon or immediately prior to the occurrence of a Change of Control,
the Option, unless previously expired pursuant to Section 3, shall be settled by
a cash payment to the Optionee equal to the difference between (i) the Fair
Market Value per share of Common Stock on the date immediately preceding the
date on which the Change of Control occurs and (ii) the Exercise Price of the
Option, multiplied by the total number of unexercised Option Shares, regardless
of whether such

 

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Option Shares have become exercisable under Section 2. Such cash payment shall
satisfy the rights of the Optionee and the obligations of the Company under this
Award Agreement in full.

 

5. Exercise of Option. Subject to the limitations set forth herein and in the
Plan, this Option may be exercised pursuant to the procedures set forth by the
Committee. Unless otherwise permitted by the Committee, upon exercise the
Optionee shall 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, at the election
of the Optionee, Common Stock held by such Optionee for at least six months
equal in value to the full amount of the purchase price (or any combination of
cash, check, money order or such Common Stock). For purposes of determining the
amount, if any, of the purchase price satisfied by payment in Common Stock, such
Common Stock shall be valued at its Fair Market Value on the date of exercise.
Any Common Stock delivered in satisfaction of all or a portion of the purchase
price shall be appropriately endorsed for transfer and assignment to the
Company. The Company shall have the right to withhold applicable taxes from
compensation otherwise payable to the Optionee at the time of exercise pursuant
to Section 12 of the Plan.

 

6. Notices. For purposes of this Award Agreement, notices to the Company shall
be deemed to have been duly given upon receipt of written notice by the
corporate secretary of the Company at 1000 Main Street, Houston, Texas 77002, or
to such other address as the Company may furnish to the Optionee. Notice of
exercise of the Option must be made to the person and in the manner set forth by
the Committee.

 

Notices to the Optionee shall be deemed effectively delivered or given upon
personal, electronic, or postal delivery of written notice to the Optionee, the
place of Employment of the Optionee, the address on record for the Optionee at
the human resources department of the Company, or such other address as the
Optionee hereafter designates by written notice to the Company.

 

7. Shareholder Rights. The Optionee shall have no rights of a shareholder with
respect to shares of Common Stock subject to the Option unless and until such
time as the Option has been exercised and vested and ownership of such shares of
Common Stock has been transferred to the Optionee.

 

8. Successors and Assigns. This Award Agreement shall bind and inure to the
benefit of and be enforceable by the Optionee, the Company and their respective
permitted successors and assigns except as expressly prohibited herein and in
the Plan. Notwithstanding anything herein or in the Plan to the contrary, all or
a portion of the Option is transferable by Optionee to Immediate Family Members,
Immediate Family Member Trusts, and Immediate Family Member Partnerships
pursuant to Section 14 of the Plan.

 

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9. Modification of Agreement. Any modification of this Award Agreement shall be
binding only if evidenced in writing and signed by an authorized representative
of the Company.

 

RELIANT ENERGY, INC. By:         Joel V. Staff     Chairman and CEO        
Director

 

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