Exhibit 10.7

 

GENON ENERGY, INC.

CHANGE IN CONTROL SEVERANCE PLAN

 

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GENON ENERGY, INC.
CHANGE IN CONTROL SEVERANCE PLAN

 

INDEX

 

Table of Contents

 

ARTICLE 1 PURPOSE AND TERM

 

1

1.1

 

Purpose

 

1

1.2

 

Term

 

1

ARTICLE 2 DEFINITIONS

 

1

2.1

 

“Affiliate”

 

1

2.2

 

“Base Salary”

 

1

2.3

 

“Board”

 

1

2.4

 

“Cause”

 

1

2.5

 

“Change in Control”

 

2

2.6

 

“Code”

 

2

2.7

 

“Committee”

 

2

2.8

 

“Company”

 

2

2.9

 

“Disability”

 

2

2.10

 

“Effective Date”

 

2

2.11

 

“Employee”

 

2

2.12

 

“ERISA”

 

2

2.13

 

“Good Reason

 

2

2.14

 

“Notice of Termination”

 

3

2.15

 

“Participant”

 

3

2.16

 

“Plan”

 

3

2.17

 

“Severance Benefits”

 

4

2.18

 

“Target Annual Bonus”

 

4

2.19

 

“Termination Date”

 

4

2.20

 

“Tier Level”

 

4

2.21

 

“Waiver and Release”

 

4

2.22

 

“Welfare Benefit Coverage”

 

4

ARTICLE 3 ELIGIBILITY

 

4

3.1

 

Participation

 

4

3.2

 

Duration of Participation

 

4

ARTICLE 4 SEVERANCE BENEFITS

 

5

4.1

 

Right to Severance Benefits

 

5

4.2

 

Amount of Severance Benefits

 

5

4.3

 

Non-Duplication of Benefits

 

7

4.4

 

Full Settlement; No Mitigation

 

8

4.5

 

Code Section 409A

 

8

4.6

 

Potential Reduction of Payments under the Plan

 

9

 

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ARTICLE 5 TERMINATION OF EMPLOYMENT

 

10

5.1

 

Written Notice Required

 

10

5.2

 

Termination Date

 

10

ARTICLE 6 DURATION, AMENDMENT AND TERMINATION, CLAIMS

 

11

6.1

 

Duration

 

11

6.2

 

Amendment and Termination

 

11

6.3

 

Form of Amendment

 

11

6.4

 

Claims Procedure

 

11

ARTICLE 7 MISCELLANEOUS

 

12

7.1

 

Legal Fees and Expenses

 

12

7.2

 

Employment Status

 

12

7.3

 

Nature of Plan and Benefits

 

12

7.4

 

Withholding of Taxes

 

12

7.5

 

No Effect on Other Benefits

 

13

7.6

 

Validity and Severability

 

13

7.7

 

Successors

 

13

7.8

 

Assignment

 

13

7.9

 

Enforcement

 

13

7.10

 

Governing Law

 

13

EXHIBIT A Definition of Change in Control

 

A-1

EXHIBIT B Participants

 

B-1

EXHIBIT C Form of Waiver and Release

 

C-1

 

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GENON ENERGY, INC.

 

CHANGE IN CONTROL SEVERANCE PLAN

 

ARTICLE 1
PURPOSE AND TERM

 

1.1                         Purpose.  GenOn Energy, Inc. (“the Company”) has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of certain key
employees, notwithstanding the possibility, threat or occurrence of a Change in
Control of the Company.  The Company believes it is imperative to diminish the
inevitable distraction of such key employees by virtue of the personal
uncertainties and risks created by a threatened or pending Change in Control,
and to encourage the key employees’ full attention and dedication to the Company
currently and in the event of any threatened or pending Change in Control, and
to provide the key employees with compensation and benefits arrangements upon a
Change in Control.  Therefore, in order to accomplish these objectives, the
Company has adopted the Plan.

 

The Plan is intended to qualify under Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA as an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees.

 

1.2                         Term.  The Plan shall be effective as of the
Effective Date, subject to amendment from time to time in accordance with
Section 6.2.  The Plan shall continue until terminated pursuant to Article 6 of
the Plan.

 

ARTICLE 2
DEFINITIONS

 

As used herein, the following words and phrases shall have the following
meanings:

 

2.1                         “Affiliate” means any corporation or other entity
(including, but not limited to, a partnership or a limited liability company)
which is 50% or more owned, directly or indirectly, by the Company.

 

2.2                         “Base Salary” means the amount a Participant is
entitled to receive as wages or salary on an annualized basis as in effect
immediately prior to a Change in Control or, if greater, at any time thereafter,
in each case without reduction for any pre-tax contributions to benefit plans. 
Base Salary does not include bonuses, short-term incentive pay, overtime pay or
income from stock options, stock grants or other incentive compensation.

 

2.3                         “Board” means the Board of Directors of the Company.

 

2.4                         “Cause” as a reason for a Participant’s termination
of employment means any of the following acts by the Participant, as determined
by the Chief Executive Officer of the

 

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Company in the case of Tier II and Tier III Employees and by the Board in the
case of Tier I Employees:  (a) gross neglect of duty; (b) prolonged absence from
duty without the consent of the Company; (c) intentionally engaging in any
activity that is in conflict with or adverse to the business or other interests
of the Company; (d) conviction of a felony; or (e) willful misconduct,
misfeasance or malfeasance of duty which is reasonably determined to be
detrimental to the Company.  This definition applies to the Plan only.  Use of
the term “Cause” in the Plan does not change or modify any individual’s
employment-at-will status.

 

2.5                         “Change in Control” means a Change in Control as
defined in Exhibit A to this Plan.

 

2.6                         “Code” means the Internal Revenue Code of 1986, as
amended from time to time, and includes a reference to the underlying proposed
or final regulations.

 

2.7                         “Committee” means the Compensation Committee of the
Board.

 

2.8                         “Company” means GenOn Energy, Inc., or its successor
as provided in Section 7.7.

 

2.9                         “Disability” has the same meaning assigned such term
in the Company’s long-term disability plan, as in effect from time to time, or
if no such plan is in effect, “Disability” means Permanent and Total Disability
as defined in Section 22(e)(3) of the Code.

 

2.10                  “Effective Date” means February 27, 2012.

 

2.11                  “Employee” means any regular, full-time or part-time
employee of the Company or any Affiliate.  Where the context requires in
connection with a Participant who is employed directly by an Affiliate, the term
“Company” as used herein includes such Affiliate.

 

2.12                  “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended.

 

2.13                  “Good Reason” means, as a reason for a Participant’s
resignation from employment, the occurrence of any of the following after a
Change in Control:

 

(a)                                 A material reduction by the Company in the
Participant’s Base Salary or Target Annual Bonus, as in effect immediately prior
to a Change in Control, as the same may be increased from time to time (it being
understood that a Participant shall not have a basis to resign for Good Reason
if (i) such reduction is part of a less than 5% across-the-board reduction in
base salary rate or target annual bonus opportunity similarly affecting at least
95% of all Employees of the Company, or (ii) no bonus is paid, or the amount of
the bonus is reduced, as a result of the failure of the Participant or the
Company to achieve applicable performance targets for such bonus);

 

(b)                                 Failure by the Company to continue (i) in
effect any compensation plan (which includes, but is not limited to, any
retirement, health and welfare, incentive and fringe benefits plan or program)
in which the Participant participates that is material to

 

2

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the Participant’s total compensation or (ii) the Participant’s participation
therein on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of the Participant’s participation relative to
other participants, unless (x) such failure arises from the discontinuance of,
or change to, any compensation plan affecting at least 95% of all Employees of
the Company who are covered under such affected plan and the amount of the
reduced benefits, or increased cost to the Participant, is less than 5% of the
Participant’s aggregate base salary rate and target annual bonus opportunity as
in effect immediately prior to such change, or (y) an equitable arrangement for
the Participant has been made with respect to such affected plan;

 

(c)                                  Failure by the Company to comply with and
satisfy its obligations to the Participant under any employment agreement,
accepted written offer of employment or similar arrangement;

 

(d)                                 The assignment to the Participant of duties
materially inconsistent with his or her position, duties or responsibilities as
in effect immediately prior to a Change in Control, or any other action by the
Company which results in a material diminution in such position, duties or
responsibilities, excluding for this purpose (i) a change in title or reporting
relationship alone, (ii) assignment of a position of similar stature and
compensation with duties consistent with the Participant’s experience and
training, or (iii) an isolated, insubstantial and inadvertent action not taken
in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Participant;

 

(e)                                  The failure of the Company to comply with
and satisfy its obligations under Section 7.7 of the Plan; or

 

(f)                                   A requirement that the Participant move
his or her principal place of business to a location that is more than 50 miles
from the location at which the Participant was stationed immediately prior to a
Change in Control;

 

provided, however, that (1) Good Reason shall not exist with respect to an event
unless the Participant shall provide the Company with a Notice of Termination
that sets forth in reasonable detail the facts and circumstances supporting the
Good Reason event not later than 90 days after the Participant has notice that
the event has occurred and (2) the Company shall have 30 days from the date of
receipt of the Notice of Termination to cure the event.  If the Company cures
the event, such Notice of Termination shall be deemed rescinded.  If the Company
fails to cure the event timely, the Employee shall be deemed to have terminated
for Good Reason at the end of such 30-day cure period.

 

2.14                  “Notice of Termination” means a written notice by the
Company or the Participant of the termination of the Participant’s employment
that satisfies the requirements of Article 5.

 

2.15                  “Participant” means any Employee designated by the
Committee or the Board as a participant in the Plan.

 

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2.16                  “Plan” means this GenOn Energy, Inc. Change in Control
Severance Plan.

 

2.17                  “Severance Benefits” mean the benefits payable in
accordance with Article 4 of the Plan.

 

2.18                  “Target Annual Bonus” means, with respect to any
Participant, an amount equal to the higher of (x) the Participant’s target bonus
opportunity under the annual bonus plan or annual short-term incentive plan
applicable to the Participant for the year during which a Change in Control
occurs, provided, however, that if no target bonus opportunity has been
established for such year under such plan, the year immediately preceding the
year in which a Change in Control occurs, or (y) the Participant’s target bonus
opportunity under the annual bonus plan or annual short term incentive plan
applicable to the Participant in effect at any time after a Change in Control.

 

2.19                  “Termination Date” means the date of the termination of a
Participant’s employment with the Company as determined in accordance with
Article 5.

 

2.20                  “Tier Level” means a Participant’s designation as a Tier
I, Tier II or Tier III Employee, as described in Section 3.1.

 

2.21                  “Waiver and Release” means a legal document substantially
in the form attached as Exhibit C to the Plan.

 

2.22                  “Welfare Benefit Coverage” means medical, dental and
vision benefits.

 

ARTICLE 3
ELIGIBILITY

 

3.1                         Participation.  The Committee or the Board shall
designate from time to time those Employees or classes of Employees who are
Participants in the Plan.  In the event the Committee or the Board designates
certain Participants by job title, position, function or responsibilities, an
Employee who is appointed to such a position after the Effective Date shall be a
Participant upon the date he or she begins his or her duties in such position,
unless otherwise determined by the Committee or the Board.  The Committee or the
Board shall designate each Participant in the Plan as a Tier I, Tier II or Tier
III Employee.  Exhibit B, attached hereto and made a part hereof, sets forth the
initial Participants by job title and their respective Tier Levels, which may be
amended by the Committee or the Board at any time prior to a Change in Control
to add or remove individual Participants or classes of Participants or to change
Tier Level classifications; provided, however, that the removal of individual
Participants or classes of Participants from the Plan, or any change in Tier
Level classification to a lower Tier Level with respect to any individual
Participant or class of Participants shall not be effective for at least 12
months after the date of the Committee or Board action.  If a Change in Control
occurs during such 12-month period, any such action to remove individual
Participants or classes of Participants or to place individual Participants or
classes of Participants in a lower Tier Level shall be null and void.

 

4

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3.2                         Duration of Participation.  Subject to Article 4 and
Article 6, an Employee shall cease to be a Participant in the Plan if (i) his or
her employment is terminated under circumstances in which he or she is not
entitled to Severance Benefits under the terms of the Plan, or (ii) prior to a
Change in Control, he or she ceases to be among the class of Employees
designated by the Committee or the Board as Participants. Notwithstanding the
foregoing, a Participant who has terminated employment and is entitled to
Severance Benefits under Section 4.1 shall remain a Participant in the Plan
until the full amount of the Severance Benefits and any other amounts payable
under the Plan have been paid to the Participant.

 

ARTICLE 4
SEVERANCE BENEFITS

 

4.1                         Right to Severance Benefits.  A Participant shall be
entitled to receive from the Company Severance Benefits in the amount provided
in Section 4.2:

 

(a)                                 If within the two-year period following a
Change in Control:

 

(i)                                     the Participant’s employment with the
Company or any Affiliate is terminated by the Company without Cause (other than
by reason of the Participant’s death or Disability);

 

(ii)                                  the Participant’s employment is terminated
by the Participant for Good Reason; or

 

(iii)                               the Participant’s employment is terminated
by an action initiated by the Company or any Affiliate and mutually agreed upon
by the Participant and the Company; or

 

(b)                                 If a Change in Control occurs and

 

(i)                                     a Participant’s employment with the
Company or any Affiliate was terminated by the Company without Cause (other than
by reason of the Participant’s death or Disability) prior to the date of the
Change in Control; or

 

(ii)                                  an action was taken with respect to the
Participant prior to the date of the Change in Control that would have
constituted Good Reason if taken after a Change in Control; and

 

the Participant can reasonably demonstrate that such termination or action in
clause (b)(i) or (ii) above, as applicable, occurred at the request of a third
party who had taken steps reasonably calculated to effect the Change in Control,
then the termination or action, as applicable, will be treated for all purposes
of the Plan as having occurred immediately following the Change in Control and
such former Participant shall be entitled to the Severance Benefits, subject to
and in accordance with the terms and conditions of the Plan.

 

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4.2                         Amount of Severance Benefits.  If a Participant’s
employment is terminated in circumstances entitling him or her to Severance
Benefits as provided in Section 4.1, then, subject to the Waiver and Release
requirement in Section 4.2(f) and Sections 4.5 and 4.6 hereof:

 

(a)                                 Severance Payment.  The Company shall pay to
the Participant in a single lump sum cash payment no later than the 70th day
following his or her Termination Date, or such later date as may be required by
Section 4.5 of the Plan, the aggregate of the following amounts:

 

(i)                                     the sum of (x) the Participant’s Base
Salary through the Termination Date to the extent not theretofore paid, (y) the
product of (A) the Participant’s Target Annual Bonus for the year in which the
Termination Date occurs, and (B) a fraction, the numerator of which is the
number of days in the current fiscal year through the Termination Date, and the
denominator of which is 365, and (z) any accrued vacation pay to the extent not
theretofore used or paid; and

 

(ii)                                  a severance payment equal to the product
of three times, in the case of a Tier I Employee, or two times, in the case of a
Tier II Employee, or 1.5 times, in the case of a Tier III Employee, the sum of
(x) the Participant’s Base Salary and (y) the Target Annual Bonus for the year
in which the Termination Date occurs.

 

(b)                                 Welfare Benefit Coverage.

 

(i)                                     Active Coverage.  The Company will
provide, or will cause to be provided, continued Welfare Benefit Coverage (as in
effect from time to time for similarly situated active employees) for the
Participant and the Participant’s eligible dependents at the active employee
rate for (x) 36 months, in the case of a Tier I Employee, (y) 24 months, in the
case of a Tier II Employee, and (z) 18 months, in the case of a Tier III
Employee following the Participant’s Termination Date.

 

(ii)                                  Post Retirement Medical Coverage.  If the
Participant would be entitled to post-retirement medical coverage within two
years following the Participant’s Termination Date if the Participant had
remained employed, the Company will provide, or cause to be provided, the
coverage as follows:

 

(A)                               the coverage provided will be the coverage in
effect immediately before the Participant’s Termination Date; and

 

(B)                               coverage will begin on the later of (i) the
date on which the post-retirement medical coverage would have become available
or (ii) the date on which the benefits under Section 4.2(b)(i) end; and

 

(C)                               the post-retirement medical coverage so
provided will be that as in effect from time to time for retired employees
(which coverage

 

6

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may be amended or terminated at any time by the Company (or an Affiliate).

 

(iii)                               Reduction for Other Coverage.  Benefits
otherwise receivable by the Participant pursuant to this Section 4.2(c) will be
reduced to the extent the Participant becomes eligible to receive benefits
pursuant to a government-sponsored health insurance or health care program.

 

(c)                                  Equity-Based Compensation.  A Participant
shall be entitled to receive benefits with respect to any equity-based
compensation in accordance with the applicable plans and agreements.

 

(d)                                 Other Benefits.  To the extent not
theretofore paid or provided, the Company shall (or the Company shall cause an
Affiliate to) timely pay or provide to the Participant any other amounts or
benefits required to be paid or provided or which the Participant is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and its Affiliates.

 

(e)                                  Outplacement.  The Company will provide or
cause to be provided outplacement services pursuant to a Company-arranged
program for a period of up to 12 months following the Participant’s Termination
Date in connection with Participant’s efforts to obtain new employment.  The
Participant must notify the Company or the outplacement firm designated by the
Company, in writing, within 180 days after the Participant’s Termination Date if
Participant wishes to utilize this outplacement benefit.  In no event will the
period of outplacement services extend beyond the two-year anniversary of the
Participant’s Termination Date, regardless of the date Participant gives the
notice required hereunder.  The Participant shall not be entitled to a cash
payment in lieu of such outplacement services.

 

(f)                                   Waiver and Release.  The foregoing
notwithstanding, payment or receipt of the benefits under this Section 4.2 is
subject to the Participant’s timely execution and return of a Waiver and Release
to the Company, without subsequent revocation during the seven-day period
following such execution date (the “Waiver and Release Revocation Period”), as
provided in this Section 4.2(f).  The Company shall provide the Participant the
Waiver and Release no later than 15 days after the Participant’s Termination
Date.  Participant shall have 45 days following receipt of the Waiver and
Release to consider, execute and return the Waiver and Release to the Company
and shall then have the right to revoke the Waiver and Release during the Waiver
and Release Revocation Period.  If Participant fails to timely execute and
return the Waiver and Release to the Company or revokes such Waiver and Release
during the Waiver and Release Revocation Period, then Participant shall forfeit,
and shall not be entitled to, any of the benefits described in this Section 4.2.

 

4.3                         Non-Duplication of Benefits.  The Plan is not
intended to supersede any other plan, program, arrangement or agreement
providing a Participant with severance or related benefits in the case of
termination of employment following a Change in Control.  In the event

 

7

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that a Participant becomes entitled to receive benefits under the Plan and any
such benefit duplicates a benefit that would otherwise be provided under any
other plan, program, arrangement or agreement as a result of the Participant’s
termination of employment, then the Participant shall be entitled to receive the
greater of the benefit available under the Plan, on the one hand, and the
benefit available under such other plan, program, arrangement or agreement, on
the other.

 

For the avoidance of doubt, if a Participant was (i) a participant in the Mirant
Corporation Change in Control Plan, effective as of June 6, 2006 (“Mirant
Plan”), or (ii) a party to a Change in Control Agreement with RRI (“RRI
Agreement”) as of December 3, 2010, the closing date of the transaction pursuant
to that certain Agreement and Plan of Merger by and among Reliant Energy, Inc.,
RRI Energy Holdings, Inc. and Mirant Corporation, dated as of April 11, 2010, as
amended, such Participant shall continue to be eligible for the severance
benefits provided under the Mirant Plan or RRI Agreement, as applicable, during
the period beginning on December 3, 2010 and ending on December 3, 2012 (the
“Protected Period”) except to the extent waived in writing by such Participant. 
If such Participant becomes entitled to severance benefits under the Mirant Plan
or RRI Agreement during the Protected Period, then the Participant shall be
entitled to the severance benefits that are greater under (i) the Mirant Plan or
RRI Agreement, as applicable, or (ii) the Plan (but not under both).

 

4.4                         Full Settlement; No Mitigation.  The Company’s
obligation to make the payments provided for under the Plan and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Participant or others.  In no event shall the
Participant be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Participant under any of the
provisions of the Plan and such amounts shall not be reduced whether or not the
Participant obtains other employment.

 

4.5                         Code Section 409A.  Notwithstanding any provisions
of the Plan or the foregoing provisions of this Article 4 to the contrary:

 

(a)                                 Compliance.  It is the intent of the parties
that the Plan comply with Code Section 409A.  Accordingly, the Plan will be
interpreted and operated consistent with such requirements of Code Section 409A
in order to avoid the application of penalty taxes under Code Section 409A to
the extent reasonably practicable.  The Company shall neither cause nor permit
any payment, benefit or consideration to be substituted for a benefit that is
payable under the Plan if such action would result in the failure of any amount
that is subject to Code Section 409A to comply with the applicable requirements
of Code Section 409A.  To the extent that any amount or benefit that would
constitute “deferred compensation” for purposes of Code Section 409A would
otherwise be payable or distributable under the Plan by reason of a
Participant’s termination of employment, such amount or benefit will not be
payable or distributable to the Participant unless (i) such termination of
employment meets the requirements of a “Separation from Service” (as defined in
Code Section 409A), or (ii) the payment or distribution of such amount or
benefit would be exempt from the application of Code Section 409A by reason of
the “short term deferral exemption” or otherwise.

 

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(b)                                 Waiting Period for Specified Employees. 
Notwithstanding Section 4.2(a) or any provision of the Plan to the contrary, if
a Participant is a “Specified Employee” (as that term is defined in Code
Section 409A) as of the Participant’s Termination Date, then the amounts or
benefits which (i) are payable under the Plan upon the Participant’s “Separation
from Service” (as defined above), (ii) are subject to the provisions of Code
Section 409A and not otherwise excluded under Code Section 409A, and (iii) would
otherwise be payable during the first six-month period following such Separation
from Service, shall be paid on the first business day that (x) is at least six
months after the date after the Participant’s Termination Date or (y) follows
the Participant’s date of death, if earlier.

 

(c)                                  Reimbursements and In-Kind Benefits.  All
reimbursements and in-kind benefits provided pursuant to the Plan shall be made
in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) such that any
reimbursements or in-kind benefits will be deemed payable at a specified time or
on a fixed schedule relative to a permissible payment event.  Specifically,
(i) the amounts reimbursed and in-kind benefits provided under the Plan, other
than total reimbursements that are limited by a lifetime maximum under a group
health plan, during the Participant’s taxable year may not affect the amounts
reimbursed or in-kind benefits provided in any other taxable year, (ii) the
reimbursement of an eligible expense shall be made on or before the last day of
the Participant’s taxable year following the taxable year in which the expense
was incurred, and (iii) the right to reimbursement or an in-kind benefit is not
subject to liquidation or exchange for another benefit.

 

4.6                           Potential Reduction of Payments under the Plan. 
Whether or not a Participant becomes entitled to the payments or benefits
pursuant to Section 4 of the Plan, if any of the payments or benefits received
or to be received by the Participant (including any payment or benefit received
or to be received in connection with a Change in Control or the Participant’s
termination of employment, whether pursuant to the terms of the Plan or any
other plan, arrangement or agreement) (all such payments and benefits being
hereinafter referred to as the “Total Payments”) will be subject to the tax
under Section 4999 of the Code (the “Excise Tax”), a reduction shall be made
from the severance amount in Section 4.2(a)(ii) above (and if necessary, from
the severance amount in Section 4.2(a)(i) above) so that the amount of the Total
Payments is equal to the largest amount that would result in no portion of the
Total Payments being subject to the Excise Tax, but only if (A) the net amount
of such Total Payments, as so reduced (and after subtracting the net amount of
federal, state and local income taxes on such reduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments) is greater than or equal to (B) the
net amount of such Total Payments without such reduction (but after subtracting
the net amount of federal, state and local income taxes on such Total Payments
and the amount of Excise Tax to which the Participant would be subject in
respect of such unreduced Total Payments and after taking into account the phase
out of itemized deductions and personal exemptions attributable to such
unreduced Total Payments).

 

For purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments
will be treated as “parachute

 

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payments” (within the meaning of Section 280G(b)(2) of the Code) unless, in the
opinion of Deloitte Tax LLP (or such other nationally recognized certified
public accounting firm as may be designated by the Company) (the “Tax Advisor”),
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all
“excess parachute payments” within the meaning of Section 280G(b)(l) of the Code
will be treated as subject to the Excise Tax unless, in the opinion of the Tax
Advisor, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the base amount allocable to
such reasonable compensation (within the meaning of Section 280G of the Code),
or are otherwise not subject to the Excise Tax, and (iii) the value of any
noncash benefits or any deferred payment or benefit will be determined by the
Tax Advisor in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code. For purposes of this Section 4.6, the Participant shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the applicable Total Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Participant’s residence in the calendar year in which
the applicable Total Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes and except to the extent that the Participant otherwise notifies the
Company, the Participant shall be deemed to be subject to the loss of itemized
deductions and personal exemptions to the maximum extent provided by the Code
for each dollar of incremental income.

 

At the time that payments are made under the Plan, the Company shall provide the
Participant with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from the Tax
Advisor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).

 

ARTICLE 5
TERMINATION OF EMPLOYMENT

 

5.1                           Written Notice Required.  Any purported
termination of employment, whether by the Company or by the Participant, shall
be communicated by a Notice of Termination, except in the case of the
Participant’s death.

 

5.2                           Termination Date.  In the case of the
Participant’s death, the Participant’s Termination Date shall be his or her date
of death.  In the case of the Participant’s termination of employment by the
Company for Cause or due to Disability, the Participant’s Termination Date is
the date the Company terminates the Participant.  In the case of the
Participant’s termination of employment for Good Reason, the Participant’s
Termination Date shall be the date specified in the Notice of Termination,
provided that such date must be 30 days from the date the Notice of Termination
is given to the Company (and subject to the Company’s cure right during such
30-day period).

 

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ARTICLE 6
DURATION, AMENDMENT AND TERMINATION, CLAIMS

 

6.1                           Duration.  The Plan shall become effective as of
the Effective Date.  The Board or the Committee may terminate the Plan as of any
date that is at least 12 months after the date of the Board or Committee’s
action.  If a Change in Control occurs during such 12-month period, the Plan
shall continue in full force and effect and shall not terminate or expire until
after all Participants who become entitled to any payments hereunder shall have
received such payments in full.

 

6.2                           Amendment and Termination.  Subject to the
following sentence, the Plan may be amended from time to time in any respect by
the Board or the Committee; provided, however, in the event that a Change in
Control occurs within one year following an amendment to the Plan that would
adversely affect the rights or potential rights of Participants, the amendment
will not be effective.  In anticipation of or on or following a Change in
Control, the Plan shall no longer be subject to amendment, change, substitution,
deletion, revocation or termination in any respect which adversely affects the
rights of Participants without the consent of each Participant so affected.  For
the avoidance of doubt, removal of a Participant as a Participant (other than as
a result of the Participant ceasing to be an Employee) or a decrease in the
Participant’s Tier Level shall be deemed to be an amendment of the Plan which
adversely affects the rights of the Participant.

 

6.3                           Form of Amendment.  The form of any amendment or
termination of the Plan shall be a written instrument signed by a duly
authorized officer or officers of the Company, certifying that the amendment or
termination has been approved by the Board or the Committee. An amendment of the
Plan in accordance with the terms hereof shall automatically effect a
corresponding amendment to all Participants’ rights and benefits hereunder. A
termination of the Plan shall, in accordance with the terms hereof,
automatically effect a termination of all Participants’ rights and benefits
hereunder.

 

6.4                                 Claims Procedure.  A Participant or his or
her authorized representative (as applicable, the “claimant”) may file a claim
with respect to amounts asserted to be due hereunder by filing a written claim
with the Company’s senior human resources officer (“Claims Administrator”)
specifying the nature of such claim in detail.  The Claims Administrator shall
notify the claimant within 60 days as to whether the claim is allowed or denied,
unless the claimant receives written notice from the Claims Administrator prior
to the end of the 60-day period stating that special circumstances require an
extension of time for a decision on the claim, in which case the period shall be
extended by an additional 60 days.  Notice of the Claims Administrator’s
decision shall be in writing, sent by mail to the Participant’s last known
address and, if the claim is denied such notice shall:  (i) state the specific
reasons for denial; (ii) refer to the specific provisions of the Plan upon which
such denial is based; (iii) if applicable, describe any additional information
or material necessary to perfect the claim, an explanation of why such
information or material is necessary; and (iv) explain the appeal procedure in
Section 6.4(b), including the right to bring suit under Section 502(a) of ERISA
if the claim is denied on appeal.

 

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(a)                                  A claimant is entitled to request a review
of any denial of his or her claim under Section 6.4(a).  The request for review
must be submitted to the committee appointed by GenOn Energy Services, LLC to
serve as plan administrator of its tax-qualified plan (“Benefits Committee”) in
writing within 60 days of mailing by the Claims Administrator of notice of the
denial (absent a denial notice within the 60- or 120- day period in
Section 6.4(a), the claim will be deemed conclusively denied).  The claimant
shall be entitled to review all pertinent documents, and to submit issues and
comments in writing to the Benefits Committee.  The review shall be conducted by
the Benefits Committee, which may, if requested by the Benefits Committee,
afford the claimant a hearing and which shall render a decision in writing
within 60 days of a request for a review, provided that, if the Benefits
Committee determines prior to the end of such 60-day review period that special
circumstances require an extension of time for the review and decision of the
denial, the period for review and decision on the denial shall be extended by an
additional 60 days.  The claimant shall receive written notice of the Benefits
Committee’s review decision and if the claim is denied, such notice shall: 
(i) state the specific reasons for the denial; (ii) refer to the specific
provisions of the Plan upon which such denial is based; (iii) state that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to and copies of all documents, records and other information relevant to
the claim for benefits; and (iv) inform the claimant of his or her right to
bring suit under Section 502(a) of ERISA.

 

(b)                                 Except as may be otherwise required by law,
the decision of the Benefits Committee in Section 6.4(b) regarding the
claimant’s claim on appeal will be final, binding and conclusive on all
parties.  Completion of the claims procedure described above in this Section 6.4
is a condition precedent to commencing any legal or equitable action regarding a
claim for Severance Benefits under the Plan.

 

ARTICLE 7
MISCELLANEOUS

 

7.1                           Legal Fees and Expenses.  The Company shall
reimburse all legal fees and related expenses (including the costs of experts,
evidence and counsel) reasonably and in good faith incurred by a Participant if
the Participant prevails on a material issue with respect to his or her claim
for relief in an action by the Participant to obtain or enforce any right or
benefit provided by the Plan.

 

7.2                           Employment Status.  The Plan does not constitute a
contract of employment or impose on the Participant or the Company any
obligation to retain the Participant as an Employee, to change the status of the
Participant’s employment, or to change the Company’s policies regarding
termination of employment.

 

7.3                           Nature of Plan and Benefits.  Participants and any
other person who may have rights hereunder shall be mere unsecured general
creditors of the Company with respect to the Severance Benefits due hereunder,
and all amounts (other than fully insured benefits) shall be payable from the
general assets of the Company.

 

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7.4                           Withholding of Taxes.  The Company may withhold
from any amount payable or benefit provided under the Plan such Federal, state,
local, foreign and other taxes as are required to be withheld pursuant to any
applicable law or regulation.

 

7.5                           No Effect on Other Benefits.  Severance Benefits
shall not be counted as compensation for purposes of determining benefits under
other benefit plans, programs, policies and agreements, except to the extent
expressly provided therein or herein.

 

7.6                           Validity and Severability.  The invalidity or
unenforceability of any provision of the Plan shall not affect the validity or
enforceability of any other provision of the Plan, which shall remain in full
force and effect, and any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

 

7.7                           Successors.  The Plan shall bind any successor of
or to the Company, its assets or its businesses (whether direct or indirect, by
purchase, merger, consolidation or otherwise), in the same manner and to the
same extent that the Company would be obligated under the Plan if no succession
had taken place.  In the case of any transaction in which a successor would not
by the foregoing provision or by operation of law be bound by the Plan, the
Company shall require such successor expressly and unconditionally to assume and
agree to perform the Company’s obligations under the Plan, in the same manner
and to the same extent that the Company would be required to perform if no such
succession had taken place. The term “Company,” as used in the Plan, shall mean
the Company as hereinbefore defined and any successor or assignee to the
business or assets which by reason hereof becomes bound by the Plan.

 

7.8                           Assignment.  The Plan shall inure to the benefit
of and shall be enforceable by a Participant’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If a Participant should die while any amount is still
payable to the Participant under the Plan had the Participant continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of the Plan to the Participant’s estate.  A Participant’s rights
under the Plan shall not otherwise be transferable or subject to lien or
attachment.

 

7.9                           Enforcement.  The Plan is intended to constitute
an enforceable contract between the Company and each Participant subject to the
terms hereof.

 

7.10                     Governing Law.  To the extent not preempted by ERISA,
the validity, interpretation, construction and performance of the Plan shall in
all respects be governed by the laws of Delaware, without reference to
principles of conflict of law.

 

IN WITNESS WHEREOF, GenOn Energy, Inc. has executed these presents to be
executed by its duly authorized officer in a number of copies, all of which
shall constitute but one and the same instrument which may be sufficiently
evidenced by any executed copy hereof, this 2nd day of March, 2012, but
effective as of February 27, 2012.

 

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GENON ENERGY, INC.

 

 

 

 

By:

/s/ Karen D. Taylor

 

 

Karen D. Taylor

 

 

Senior Vice President, Human Resources and Administration

 

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EXHIBIT A

 

Definition of
Change in Control

 

For purposes of this Plan, a “Change in Control” shall be deemed to have
occurred upon the occurrence of any of the following:

 

(a)                                  30% Ownership Change:  Any Person, other
than an ERISA-regulated pension plan established by the Company or an Affiliate,
makes an acquisition of Outstanding Voting Stock and is, immediately thereafter,
the beneficial owner of 30% or more of the then Outstanding Voting Stock, unless
such acquisition is made directly from the Company in a transaction approved by
a majority of the Incumbent Directors; or any Group is formed that is the
beneficial owner of 30% or more of the Outstanding Voting Stock; or

 

(b)                                 Board Majority Change:  Individuals who are
Incumbent Directors cease for any reason to constitute a majority of the members
of the Board; or

 

(c)                                  Major Mergers and
Acquisitions:  Consummation of a Business Combination unless, immediately
following such Business Combination, (i) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding
Voting Stock immediately before such Business Combination beneficially own,
directly or indirectly, more than 70% of the then outstanding shares of voting
stock of the parent corporation resulting from such Business Combination in
substantially the same relative proportions as their ownership, immediately
before such Business Combination, of the Outstanding Voting Stock, (ii) if the
Business Combination involves the issuance or payment by the Company of
consideration to another entity or its shareholders, the total fair market value
of such consideration plus the principal amount of the consolidated long-term
debt of the entity or business being acquired (in each case, determined as of
the date of consummation of such Business Combination by a majority of the
Incumbent Directors) does not exceed 50% of the sum of the fair market value of
the Outstanding Voting Stock plus the principal amount of the Company’s
consolidated long-term debt (in each case, determined immediately before such
consummation by a majority of the Incumbent Directors), (iii) no Person (other
than any corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 30% or more of the then outstanding shares of
voting stock of the parent corporation resulting from such Business Combination
and (iv) a majority of the members of the board of directors of the parent
corporation resulting from such Business Combination were Incumbent Directors of
the Company immediately before consummation of such Business Combination; or

 

(d)                                 Major Asset Dispositions:  Consummation of a
Major Asset Disposition unless, immediately following such Major Asset
Disposition, (i) individuals and entities that were beneficial owners of the
Outstanding Voting Stock immediately before such Major Asset Disposition
beneficially own, directly or indirectly, more than

 

A-1

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70% of the then outstanding shares of voting stock of the Company (if it
continues to exist) and of the entity that acquires the largest portion of such
assets (or the entity, if any, that owns a majority of the outstanding voting
stock of such acquiring entity) and (ii) a majority of the members of the Board
(if it continues to exist) and of the entity that acquires the largest portion
of such assets (or the entity, if any, that owns a majority of the outstanding
voting stock of such acquiring entity) were Incumbent Directors of the Company
immediately before consummation of such Major Asset Disposition.

 

Anything in this definition to the contrary notwithstanding, no Change in
Control shall be deemed to have occurred unless such event constitutes an event
specified in Code Section 409A(2)(A)(v) and the Treasury Regulations promulgated
thereunder.

 

For purposes of the definition of a “Change in Control”,

 

(1)                                  “Person” means an individual, entity or
group;

 

(2)                                  “Group” is used as it is defined for
purposes of Section 13(d)(3) of the Exchange Act;

 

(3)                                  “Beneficial Owner” is used as it is defined
for purposes of Rule 13d-3 under the Exchange Act;

 

(4)                                  “Outstanding Voting Stock” means
outstanding voting securities of the Company entitled to vote generally in the
election of directors; and any specified percentage or portion of the
Outstanding Voting Stock (or of other voting stock) is determined based on the
combined voting power of such securities;

 

(5)                                  “Incumbent Director” means a director of
the Company (x) who was a director of the Company on the Effective Date or
(y) who becomes a director after such date and whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of a majority of
the Incumbent Directors at the time of such election or nomination, except that
any such director will not be deemed an Incumbent Director if his or her initial
assumption of office occurs as a result of an actual or threatened election
contest or other actual or threatened solicitation of proxies by or on behalf of
a Person other than the Board;

 

(6)                                  “Election Contest” is used as it is defined
for purposes of Rule 14a-11 under the Exchange Act;

 

(7)                                  “Business Combination” means

 

(x)                                   a merger or consolidation involving the
Company or its stock or

 

(y)                                 an acquisition by the Company, directly or
through one or more subsidiaries, of another entity or its stock or assets;

 

(8)                                  “parent corporation resulting from a
Business Combination” means the Company if its stock is not acquired or
converted in the Business

 

A-2

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Combination and otherwise means the entity which as a result of such Business
Combination owns the Company or all or substantially all the Company’s assets
either directly or through one or more subsidiaries; and

 

(9)                                  “Major Asset Disposition” means the sale or
other disposition in one transaction or a series of related transactions of 70%
or more of the assets of the Company and its subsidiaries on a consolidated
basis; and any specified percentage or portion of the assets of the Company will
be based on fair market value, as determined by a majority of the Incumbent
Directors.

 

(10)                            “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.

 

For the avoidance of doubt, the transaction pursuant to that certain Agreement
and Plan of Merger by and among RRI Energy, Inc., RRI Energy Holdings, Inc., and
Mirant Corporation, dated as of April 11, 2010, as amended, is not a Change in
Control for purposes of this Plan.

 

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EXHIBIT B

 

Participants

 

Tier I Employee Participants:

 

Edward R. Muller;

Michael L. Jines; and

J. William Holden III

 

Tier II Employee Participants:

 

All Executive Vice Presidents (other than Mr. Jines and Mr. Holden); and Senior
Vice Presidents of GenOn Energy, Inc.

 

Tier III Employee Participants:

 

All Vice Presidents of GenOn Energy, Inc.

 

B-1

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EXHIBIT C

 

Form of Waiver and Release

 

This Waiver and Release (this “Release”) is granted effective as of the date
signed below by                            (“Employee”) in favor of GenOn
Energy, Inc. (the “Company”).  This is the Release referred to in that certain
Change in Control Severance Plan adopted by the Company effective as of
February 27, 2012 (the “Plan”).  Capitalized terms not defined in this Release
are as defined in the Plan.  Employee gives this Release in consideration of the
Company’s promises and covenants as recited in the Plan, with respect to which
this Release is an integral part.  Employee agrees as follows:

 

1.                                      Release of the Company.  Employee,
individually and on behalf of Employee’s successors, assigns, attorneys, and all
those entitled to assert Employee’s rights, now and forever hereby releases and
discharges the Company and its respective officers, directors, stockholders,
trustees, employees, agents, fiduciaries, parent corporations, subsidiaries,
Affiliates, estates, successors, assigns and attorneys (the “Released Parties”),
from any and all claims, actions, causes of action, sums of money due, suits,
debts, liens, covenants, contracts, obligations, costs, expenses, damages,
judgments, agreements, promises, demands, claims for attorney’s fees and costs,
or liabilities whatsoever (collectively, “Claims”), in law or in equity, which
Employee ever had or now has against the Released Parties, including, without
limitation, any Claims arising by reason of or in any way connected with any
employment relationship which existed between the Company or any of its
Affiliates, and Employee.  It is understood and agreed that this Release is
intended to cover all Claims , whether known or unknown, of any nature
whatsoever, including those which may be traced either directly or indirectly to
the aforesaid employment relationship, or the termination of that relationship,
that Employee has, had or purports to have, from the beginning of time to the
date of this Release, and including but not limited to Claims for employment
discrimination under federal or state law; Claims arising under the Age
Discrimination in Employment Act, 29 U.S.C. § 621, et seq., Title VII of the
Civil Rights Act, 42 U.S.C. § 2000(e), et seq. or the Americans With
Disabilities Act, 42 U.S.C. § 12101 et seq.; Claims for statutory or common law
wrongful discharge; Claims arising under the Fair Labor Standards Act, 29 U.S.C.
§ 201 et seq.; Claims for attorney’s fees, expenses and costs; Claims for
defamation; Claims for emotional distress; Claims for wages or vacation pay;
Claims for benefits or that in any way relate to the design or administration of
any employee benefit program, including any claims arising under the Employee
Retirement Income Security Act, 29 U.S.C. § 1001, et seq.; or Claims under any
other applicable federal, state or local laws or legal concepts.

 

2.                                      Release of Claims Under Age
Discrimination in Employment Act.  Without limiting the generality of the
foregoing, Employee agrees that by executing this Release, he or she has
released and waived any and all Claims he or she has or may have as of the date
of this Release under the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq.  Employee acknowledges and agrees that he or she has been, and hereby
is, advised by the Company to consult with an attorney prior to executing this
Release.  Employee further acknowledges and agrees that the Company has offered
Employee the opportunity, before executing this Release, to

 

C-1

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consider this Release for a period of forty-five (45) calendar days; and that
the consideration Employee receives for this Release is in addition to amounts
to which Employee was already entitled.  It is further understood that this
Release is not effective until seven (7) calendar days after the execution of
this Release and that Employee may revoke this Release within seven (7) calendar
days from the date of execution hereof.  Employee has read and understood the
Plan, and it is incorporated herein by reference.  Employee was advised in the
Plan as to the class, organizational unit or group of individuals covered by the
Plan, the eligibility factors for the Plan and the time limits applicable to the
Plan.  If Employee’s employment is ending as part of a group termination,
Employee has received a list of the job titles and the ages of all employees
eligible or selected for the Plan and a list of the ages and job titles of
employees in the same job classification or organizational unit who are not
eligible or selected for the Plan.

 

3.                                                Release of Unknown Claims. 
Employee understands and agrees that this Release is a full and final release
covering all known and unknown, suspected or unsuspected injuries, debts, Claims
or damages which have arisen or may have arisen from any matters, acts,
omissions or dealings released in this Release.  As to such matters, Employee
expressly waives and releases any and all rights or benefits which Employee may
now have, or in the future may have, under the terms of Section 1542 of the
California Civil Code and any similar law of any state or territory of the
United States.  Section 1542 provides:  “A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him must have materially
affected his or her settlement with the debtor.”  Employee fully understand that
if any fact with respect to any matter covered in this Release is found
hereinafter to be other than or different from the facts believed by Employee to
be true at the time of the execution of this Release, Employee expressly accepts
and assumes that this Release shall be and remain effective, notwithstanding
such difference in facts.

 

4.                                      Limited Exceptions to Release.  The only
exceptions to this Release of Claims are with respect to (1) such Claims as may
arise after the date this Release is executed; (2) any indemnification
obligations to Employee under the Company’s bylaws, certificate of
incorporation, Delaware law or otherwise; (3) Employee’s vested rights under the
terms of employee benefit plans sponsored by the Company or Company Affiliates;
(4) an action to challenge the Release of Claims under the Age Discrimination in
Employment Act; (5) applicable Workers’ Compensation benefits for occupational
injuries or illnesses; and (6) any Claims which the controlling law clearly
states may not be released by private agreement.

 

5.                                      Covenant Not to Sue.  Employee agrees
and covenants not to sue in any local, state or federal court or any other court
or tribunal for any Claims released by this Release.

 

6.                                      Confidential Information.  From and
after the Termination Date (as defined in the Plan), Employee shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any secret or confidential information,
knowledge or data relating to the Company or any Affiliate and their respective
businesses, which shall have been obtained by Employee during Employee’s
employment by the Company or any Affiliate, to anyone other than the Company and
those designated by it.  Should Employee be contacted or served with legal
process seeking to compel Employee to disclose any

 

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such information, Employee agrees to notify the General Counsel of the Company
immediately, in order that the Company may seek to resist such process if it so
chooses.  It is understood, however, that the obligations of this Paragraph
shall not apply to the extent that the aforesaid matters become generally known
to and available for use by the public other than by acts by Employee or
Employee’s representatives in violation of the Plan or this Release.

 

7.                                      Non-Admission and Non-Disparagement. 
The benefits provided under the Plan are not to be construed as an admission of
any liability whatsoever on the part of the Company or any of the other Released
Parties, by whom liability is expressly denied.  Employee agrees to refrain from
any public or private criticisms or disparaging comments about the Company or
any of the other Released Parties that is intended to result or could result in
public embarrassment or injury to the reputation of the Company or any of the
other Released Parties.  Nothing in this Release, however, is intended to
prohibit, restrict or otherwise discourage Employee or any other individual from
making reports of unsafe, wrongful or illegal conduct to any agency or branch of
the local, state or federal government or other lawful authorities.

 

8.                                      Acknowledgement and Revocation Period. 
Employee has carefully read this Release and is signing it voluntarily.  In
order to be eligible for benefits under the Plan, Employee must sign this
Release and return it to the Company’s General Counsel no earlier than the
Employee’s Termination Date, and no later than 5:30 p.m. Central Standard Time
on the 46th day following the later of (i) the date that Employee received this
Release or (ii) the Employee’s Termination Date.  Employee acknowledges that
Employee has had at least forty-five (45) days from receipt of this Release to
review it prior to signing or that, if Employee is signing this Release prior to
the expiration of such 45-day period, Employee is waiving his or her right to
review the Release for such full 45-day period prior to signing it.  Employee
has the right to revoke this Release within seven (7) days following the date
Employee executes it.  In order to revoke this Release, Employee must deliver
notice of the revocation in writing to Company’s General Counsel before the
expiration of the seven (7) day period.  However, if Employee revokes this
Release within such seven (7) day period, no Severance Benefits will be payable
to Employee under the Plan and Employee shall return to the Company any such
Severance Benefits received prior to that date.

 

9.                                                No Revocation After Seven
Days.  Employee acknowledges and agrees that this Release may not be revoked at
any time after the expiration of the seven (7) day revocation period.  Employee
further acknowledges and agrees that, with the exception of an action to
challenge the waiver of Claims under the Age Discrimination in Employment Act,
Employee shall not ever attempt to challenge the terms of this Release, attempt
to obtain an order declaring this Release to be null and void, or institute
litigation against the Company or any other Released Party based upon a claim
that is covered by the terms of the Release contained herein, without first
repaying all monies paid to him or her under the Plan.  Furthermore, with the
exception of an action to challenge Employee’s waiver of Claims under the Age
Discrimination in Employment Act, if Employee does not prevail in an action to
challenge this Release, to obtain an order declaring this Release to be null and
void, or in any action against the Company or any other Released Party based
upon a Claim that is covered by the Release set forth herein,

 

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Employee shall pay to the Company and/or the appropriate Released Party all of
their costs and attorneys’ fees incurred in their defense of Employee’s action.

 

10.                               Cooperation.  If Employee is called upon to
serve as a witness or consultant in or with respect to any potential litigation,
litigation, or regulatory proceeding, Employee agrees to truthfully cooperate
with the Company and/or its Affiliates to the full extent permitted by law.

 

11.                               Non-Solicitation:  As a condition of
participation in the Plan and receipt of any Severance Benefits under the Plan,
Employee agrees that while employed by the Company or an Affiliate and for one
year following his or her Termination Date, he or she will not, without the
prior written consent of the Company, directly or indirectly, hire or induce,
entice or solicit (or attempt to induce entice or solicit) any employee of the
Company or any of its Affiliates to leave the employment of the Company or any
of its Affiliates.

 

12.                               Non-Competition.  For the consideration
provided under the Plan and the Company’s provision to Employee of secret or
confidential information regarding the Company and the Company’s business prior
(that is subject to Paragraph 6 of this Release) on and after the date on which
Employee became a Participant in the Plan, which Employee acknowledges he or she
has received, Employee agrees that for one year following Employee’s Termination
Date, he or she will not, without the prior written consent of the Company,
acting alone or in conjunction with others, either directly or indirectly,
engage in any business that is in competition with the Company or any of its
Affiliates or ventures or accept employment with or render services to such a
business as an officer, agent, employee, independent contractor or consultant,
or otherwise engage in activities that are in competition with the Company or
any of its Affiliates or ventures.

 

The restrictions contained in this Paragraph are limited to a 50-mile radius
around any geographical area in which the Company or any of its Affiliates or
ventures engages (or has definite plans to engage) in operations or the
marketing of its products or services at the time of Employee’s Termination
Date.

 

Employee acknowledges that these restrictive covenants under this Agreement, for
which Employee received valuable consideration from the Company as provided in
this Agreement, including, but not limited to, secret or confidential
information regarding the Company and the Company’s business as described above,
are ancillary to otherwise enforceable provisions of this Agreement, that the
consideration provided by the Company gives rise to the Company’s interest in
restraining Employee from competing and that the restrictive covenants are
designed to enforce Employee’s consideration or return promises under this
Agreement.  Additionally, Employee acknowledges that these restrictive covenants
contain limitations as to time, geographical area, and scope of activity to be
restrained that are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill or other legitimate business interests of the
Company, including but not limited to the Company’s need to protect its
confidential information.

 

13.                                         Governing Law and Severability. 
This Release and the rights and obligations of the parties hereto shall be
governed and construed in accordance with the laws of the State of

 

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Delaware.  If any provision hereof is unenforceable or is held to be
unenforceable, such provision shall be fully severable, and this document and
its terms shall be construed and enforced as if such unenforceable provision had
never comprised a part hereof, the remaining provisions hereof shall remain in
full force and effect, and the court or tribunal construing the provisions shall
add as a part hereof a provision as similar in terms and effect to such
unenforceable provision as may be enforceable, in lieu of the unenforceable
provision.

 

14.                               Complete Agreement.  This Release and the Plan
set forth the entire understanding and agreement between Employee and the
Company concerning the subject matter of this Release and supersede and
invalidate any previous agreements or contracts.  No representations,
inducements, promises or agreements, oral or otherwise, which are not embodied
herein shall be of any force or effect.

 

I have read and understood this Release (including the Plan, which is
incorporated by reference), and I hereby AGREE TO and ACCEPT its terms and
conditions.

 

 

 

 

Employee’s Printed Name

 

 

 

 

 

Employee’s Signature

 

 

 

 

 

Employee’s Signature Date

 

 

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