Exhibit 10.3


RELIANT
ENERGY, INC.


2002
LONG TERM INCENTIVE PLAN


LONG
TERM INCENTIVE AWARD


AWARD
AGREEMENT


Pursuant to this award agreement (“Agreement”), as of May 16, 2007, Reliant Energy, Inc.  (the “Company”) hereby grants to Mark Jacobs (the “Participant”), 32,240 Restricted Stock Units and rights
(the “Nonqualified Stock Options” or “Options”) to purchase from the Company 80,663 shares of Common Stock of the
Company at $26.365 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:


26,887
Option Shares exercisable on 5/16/2008;


an
additional 26,888 Option
Shares exercisable on 5/16/2009;


and the remaining 26,888 Option  Shares
exercisable on 5/16/2010.


The Participant must be 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 in three cumulative annual installments as
follows:


10,746 Restricted
Stock Units on May 16, 2010;


10,747 Restricted
Stock Units on May 16, 2011;


and the remaining 10,747
Restricted Stock Units on May 16, 2012.


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



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4.                                       Expiration of Option Period.  The Option Period
will expire on 5/15/2017 except as follows:


(i)                                   Upon
termination of Employment of the Participant due to death or Disability, the
vested Options, if any, will expire upon the earlier of one year following the
date of termination of Employment or expiration of the Option Period.


(ii)                                  Upon
termination of Employment of the Participant because of Retirement, the vested
Options, if any, will expire upon the earlier of three years following the date
of termination of Employment or 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,
the unvested portion of the Options will expire immediately, and the vested
Options, if any, will expire upon the earlier of one year following the date of
termination of Employment or 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 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 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 as soon as practicable after the vesting date.  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 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 



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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 vesting date, (i) Participant’s
right to receive Restricted Stock Units will vest and will be settled by a cash
payment to 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) 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.  Such cash payment will satisfy the rights of
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 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 Options on the records of the Company.



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12.                                 Section
409A of the Code.  It is intended
that this Agreement and any Awards under this Agreement satisfy the
requirements of Section 409A of the Code to avoid imposition of applicable
taxes thereunder.  Thus, notwithstanding
anything in this Agreement to the contrary, if any provision of this Agreement
or Award under this Agreement would result in the imposition of an applicable
tax under Section 409A of the Code and related regulations and Treasury
pronouncements, that Agreement provision or Award will be reformed to avoid
imposition of the applicable tax and no action taken to comply with Section
409A shall be deemed to adversely affect the Participant’s rights to an Award.


	
   

  	
  RELIANT ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen D.
  Taylor

  	
   

  
	
   

  	
   

  	
  Karen D. Taylor

  
	
   

  	
   

  	
  Senior Vice
  President

  



 



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