Exhibit 10.2

 

RELIANT ENERGY, INC.

2002 LONG TERM INCENTIVE PLAN

LONG TERM INCENTIVE AWARD

 

AWARD AGREEMENT

 

Pursuant to this award agreement (“Agreement”), as of November 1, 2007. Reliant
Energy, Inc. (the “Company”) hereby grants to Rick J. Dobson (the
“Participant”), 9,700 Restricted Stock Units and rights (the “Nonqualified Stock
Options” or “Options”) to purchase from the Company 24,000 shares of Common
Stock of the Company at $26.955 per share. The number of units and shares is
subject to adjustment as provided in Section 15 of the Reliant Energy, Inc. 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 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.

 

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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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 and the
Options granted. Except as provided in Section 9, 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 Options will vest and become
exercisable in three cumulative annual installments as follows:

 

8,000 Option Shares exercisable on November 1, 2008;

 

an additional 8,000 Option Shares exercisable on November 1, 2009;

 

and the remaining 8,000 Option Shares exercisable on November 1, 2010.

 

The Participant must be continuously 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.

 

(ii)                                  The Restricted Stock Units will vest on
November 1, 2010.

 

The Participant must be continuously employed by the Company through the date of
vesting for the Restricted Stock Units to vest.

 

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4.                                       Expiration of Option Period. The Option
Period will expire on October 31, 2017 except as follows:

 

(i)                                     Upon termination of Employment of the
Participant due to death or Disability, (a) the unvested portion of the Options
will expire immediately and (b) the vested Options, if any, will expire upon the
earlier of (I) one year following the date of termination of Employment or (II)
the expiration of the Option Period.

 

(II)                                  UPON TERMINATION OF EMPLOYMENT OF THE
PARTICIPANT BECAUSE OF RETIREMENT, (A) THE UNVESTED PORTION OF THE OPTIONS WILL
EXPIRE IMMEDIATELY AND (B) THE VESTED OPTIONS, IF ANY, WILL EXPIRE UPON THE
EARLIER OF (I) THREE YEARS FOLLOWING THE DATE OF TERMINATION OF EMPLOYMENT OR
(II) THE 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, (A) THE UNVESTED PORTION OF THE
OPTIONS WILL EXPIRE IMMEDIATELY AND (B) THE VESTED OPTIONS, IF ANY, WILL EXPIRE
UPON THE EARLIER OF (I) ONE YEAR FOLLOWING THE DATE OF TERMINATION OF EMPLOYMENT
OR (II) 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 PERIOD 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 the 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 and issued or distributed to
him as soon as practicable after the vesting date, but in no event later than
March 15th 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.                                       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, at the election of the Participant, Common Stock
held by the Participant 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

 

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the amount, if any, of the purchase price satisfied by payment in Common Stock,
the Common Stock will 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 must be appropriately endorsed for transfer and assignment to the
Company. 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.

 

7.                                       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 one or more of
the vesting dates provided for under this Agreement, (i) the Participant’s right
to receive Restricted Stock Units will vest and will be settled by a cash
payment to the 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
granted, and (ii) the 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, with such
payments under clauses (i) and (ii) above in no event made later than March 15th
of the year immediately following the year during which the date immediately
prior to the date of the Change of Control occurs. Such cash payment will
satisfy the rights of the Participant and the obligations of the Company under
this Agreement in full.

 

8.                                       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 8.

 

9.                                       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 and/or Options are
transferable by the Participant to Immediate Family Members, Immediate Family
Member Trusts and Immediate Family Member Partnerships pursuant to Section 14 of
the Plan.

 

10.                                 No Employment Guaranteed. Nothing in this
Agreement gives the Participant any rights to (or imposes any obligations for)
continued Employment by the

 

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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.

 

11.                                 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 Option
Shares on the records of the Company.

 

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

 

 

 

RELIANT ENERGY, INC.

 

 

 

 

 

By:

/s/ Karen D. Taylor

 

 

Karen D. Taylor

 

 

Senior Vice President-Human Resources

 

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