Exhibit 10.1

 

PHANTOM STOCK UNIT AWARD AGREEMENT

 

THIS PHANTOM STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made as of the
30th day of June, 2011, (the “Grant Date”) between DYNEGY INC., a Delaware
corporation (“Dynegy”), and the applicable employing Affiliate (collectively,
the “Company”), and E. Hunter Harrison (the “Employee”).  A copy of the Dynegy
Inc. 2009 Phantom Stock Plan (the “Plan”) is annexed to this Agreement and shall
be deemed a part hereof as if fully set forth herein.  Unless the context
otherwise requires, all terms that are not defined in this Agreement but which
are defined in the Plan shall have the same meaning given to them in the Plan
when used herein.

 

1.             The Grant.  On June 15, 2011, the Compensation and Human
Resources Committee of the Board of Directors (the “Committee”) approved
granting to the Employee, on the last day of each calendar quarter prior to the
Employee’s Separation from Service in his capacity as an employee of the
Company, a number of phantom stock units determined by dividing the “Phantom
Stock Amount” (as such term is defined in the Directors’ Plan) by the Trading
Day value of one share of Dynegy’s common stock, $0.01 par value per share (the
“Common Stock”), on such last day of the calendar quarter (or the Trading Day
immediately preceding the last day of the calendar quarter if such last day is
not a Trading Day).  Therefore, the Employee is hereby granted on the Grant Date
two thousand eight hundred twenty seven (2827) phantom stock units (determined
in accordance with the preceding) (the “Phantom Stock Units”), which shall be
granted as a matter of separate inducement and not in lieu of any salary or
other compensation for the Employee’s services, subject to the acceptance by the
Employee of the terms and conditions of this Agreement.  The Employee
acknowledges receipt of a copy of the Plan, and agrees that this award of
Phantom Stock Units 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.

 

2.             Phantom Stock Units.  The Employee hereby accepts the Phantom
Stock Units and agrees with respect thereto as follows:

 

(a)           Payment and Determination of Value.  Dynegy shall pay to the
Employee the value of a Phantom Stock Unit in cash not later than thirty (30)
days immediately following the date the Employee incurs a Separation from
Service in his capacity as an employee of the Company, and such Phantom Stock
Unit shall thereafter be treated as redeemed for purposes of this Agreement. 
Notwithstanding the foregoing, however, payment of the Phantom Stock Units shall
be subject to any mandatory payment delay requirements under Section 409A of the
Internal Revenue Code of 1986, as amended (“Code Section 409A”), as set forth in
more detail in Section 4 below.  Each Phantom Stock Unit shall have a value
equal to one share of Common Stock, determined based on the closing price of a
share of such Common Stock on the date of the Employee’s Separation from Service
in his capacity as an employee of the Company (or the Trading Day immediately
preceding the date of such Separation from Service if such Separation from
Service date is not a Trading Day).

 

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(b)           Vesting.  The Employee’s Phantom Stock Units shall be vested as of
the Grant Date.  Notwithstanding the foregoing or anything to the contrary,
however, if the Employee’s employment with the Company terminates by reason of
dismissal by the Company for Cause, then the Employee’s Phantom Stock Units
shall be forfeited to the Company for no consideration as of the date of the
termination of the Employee’s employment with the Company.

 

(c)           Transfer Restrictions.  The Phantom Stock Units may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or otherwise disposed of by the Employee.

 

(d)           Definitions.  For purposes of this Agreement, the following terms
shall have the meanings indicated below:

 

(i)            “Cause” shall mean, and hence arise where, as determined by the
Committee in its sole discretion, the 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 the 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
the 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 the Employee, provided such breach results in a materially adverse
effect upon the Company, financial or otherwise.

 

(ii)           “Directors’ Plan” shall mean the Dynegy Inc. Deferred
Compensation Plan for Certain Directors.

 

(iii)          “Separation from Service” shall have the meaning set forth in
Treasury Regulation Section 1.409A-1(h).

 

(iv)          “Trading Day” means a day during which trading in securities
generally occurs in the principal securities market in which Dynegy’s Common
Stock is traded.

 

(e)           Shareholder Rights.  The Employee shall not have any of the rights
of a shareholder of the Company with respect to the Phantom Stock Units.

 

(f)            Corporate Acts.  The existence of the Phantom Stock Units shall
not affect in any way the right or power of the Board of Directors of the
Company or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities, the dissolution or liquidation of the Company 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.

 

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3.             Withholding of Tax.  The Company is authorized and directed to
withhold from any cash payment made to the Employee under this Agreement any tax
required to be withheld by reason of such resulting compensation income.  To the
extent that any portion of the Phantom Stock Units is treated as includible in
the Employee’s income prior to the date a cash payment is made to the Employee
under this Agreement, the Company is hereby authorized and directed to either
(i) require the Employee to make payment of such taxes to the Company through
delivery of cash or a cashier’s check within five (5) calendar days after the
Company is required to remit such taxes to the Internal Revenue Service, or
(ii) withhold from the Employee’s regular wages or bonus payments, if any, the
amount of any tax required to be withheld.

 

4.             Code Section 409A.  If and to the extent any portion of any
payment provided to the Employee under this Agreement in connection with the
Employee’s Separation from Service is determined to constitute “nonqualified
deferred compensation” within the meaning of Code Section 409A and the Employee
is a specified employee as defined in Code Section 409A(a)(2)(B)(i), as
determined by the Company in accordance with the procedures separately adopted
by the Company for this purpose, by which determination the Employee, as a
condition to accepting benefits under this Agreement and the Plan, agrees that
he or she is bound, such portion of the payment, compensation or other benefit
shall not be paid before the earlier of (i) the day that is six (6) months plus
one (1) day after the date of Separation from Service (as determined under Code
Section 409A) or (ii) the tenth (10th) day after the date of the Employee’s
death  (as applicable, the “New Payment Date”).  The aggregate of any payments
that otherwise would have been paid to the Employee during the period between
the date of Separation from Service and the New Payment Date shall be paid to
the Employee in a lump sum on such New Payment Date, and any remaining payments
will be paid on their original schedule.  Neither the Company nor the Employee
shall have the right to accelerate or defer the delivery of any such payments or
benefits except to the extent specifically permitted or required by Code
Section 409A.  This Agreement is intended to comply with the provisions of Code
Section 409A and this Agreement and the Plan shall, to the extent practicable,
be construed in accordance therewith.  Terms defined in this Agreement and the
Plan shall have the meanings given such terms under Code Section 409A if and to
the extent required to comply with Code Section 409A.  In any event, the Company
makes no representations or warranty and shall have no liability to the Employee
or any other person if any provisions of or payments under this Agreement are
determined to constitute deferred compensation subject to Code Section 409A but
not to satisfy the conditions of that section.

 

5.             Employment Relationship.  For purposes of this Agreement, the
Employee shall be considered to be in the employment of the Company as long as
the Employee remains an employee of either the Company or an Affiliate (as such
term is defined in the Plan).  Nothing in the adoption of the Plan or the award
of the Phantom Stock Units thereunder pursuant to this Agreement shall confer
upon the Employee the right to continued employment by the Company or any
Affiliate or affect in any way the right of the Company or any Affiliate to
terminate such employment at any time.  Unless otherwise provided in a written
employment agreement or by applicable law, the Employee’s employment by the
Company (or any Affiliate) shall be on an at-will basis, and the employment
relationship may be terminated at any time by either the Employee or the Company
(or any Affiliate) for any reason whatsoever, with or without Cause.  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, and its
determination shall be final.

 

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6.             Notices.  Any notices or other communications provided for in
this Agreement shall be sufficient if in writing.  In the case of the Employee,
such notices or communications shall be effectively delivered when hand
delivered to the Employee at his or her principal place of employment or when
sent by registered or certified mail to the Employee at the last address the
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.

 

7.             Entire Agreement; Amendment.  This Agreement replaces and merges
all previous agreements and discussions relating to the same or similar subject
matters between the Employee and the Company and constitutes the entire
agreement between the Employee and the Company with respect to the subject
matter of this Agreement.  This Agreement may not be modified in any respect by
any verbal statement, representation or agreement made by any employee, officer,
or representative of the Company or by any written agreement unless signed by an
officer of the Company who is expressly authorized by the Company to execute
such document.   In addition, 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 by the Company accordingly.

 

8.             Binding Effect.  This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under the Employee.

 

9.             Miscellaneous.  In the event of any conflict or inconsistency
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall be controlling, except with respect to the terms set forth under
Sections 2(a) and (b) above.

 

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

 

 

 

DYNEGY INC.

 

 

 

 

 

By:

/s/ Lynn Lednicky

 

 

 

 

 

 

Name:

 Lynn Lednicky

 

 

 

 

Title:

EVP, Operations

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

By:

/s/ E. Hunter Harrison

 

 

 

 

 

 

Name:

 E. Hunter Harrison

 

 

 

 

Title:

President and Chief
Executive Officer

 

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