<PAGE>

                             NRG GENERATING (U.S.) INC.
                               1998 STOCK OPTION PLAN

                           GRANT OF NONEMPLOYEE DIRECTOR
                             NONQUALIFIED STOCK OPTION


DATE OF GRANT: ______________________

     THIS GRANT, dated as of the date of grant first stated above (the "Date 
of Grant"), is delivered by NRG Generating (U.S.) Inc. (the "Company") to 
_____________________ (the "Grantee"), who is a director of the Company who 
is not an Employee of the Company or a Subsidiary.

     WHEREAS, the Board of Directors of the Company (the "Board") on April 
20, 1998 adopted the NRG Generating (U.S.) Inc. 1998 Stock Option Plan (the 
"Plan") effective as of that date;

     WHEREAS, the Plan provides for the granting of Nonqualified Stock 
Options by the Committee to directors of the Company to purchase shares of 
the Common Stock of the Company (the "Stock"), in accordance with the terms 
and provisions thereof; and

     WHEREAS, the Committee considers Grantee to be a person who is eligible 
for a grant of Nonqualified Stock Options under the Plan, and has determined 
that it would be in the best interest of the Company to grant the 
Nonqualified Stock Options documented herein.

     NOW THEREFORE, the parties hereto, intending to be legally bound hereby, 
agree as follows:

1.   GRANT OF OPTION.

     Subject to the terms and conditions hereinafter set forth, the Company, 
with the approval and at the direction of the Committee, hereby grants to 
Grantee, as of the Date of Grant, an option to purchase up to __________ 
shares of Stock at a price of $___________ per share.  The shares of stock 
purchasable upon exercise of the Option are hereinafter sometimes referred to 
as the "Option Shares."  The Option is intended by the parties hereto to be, 
and shall be treated as, a Nonqualified Stock Option which is not subject to 
the provisions of Code Section 422.

2.   INSTALLMENT EXERCISE.

     Subject to such further limitations as are provided herein, the Option 
shall become exercisable in three (3) installments, Grantee having the right 
hereunder to purchase from the Company the following number of Option Shares 
upon exercise of the Option, on and after the following dates, in cumulative 
fashion:

     (i)  on and after the first anniversary of the Date of Grant up to 
one-third (ignoring fractional shares) of the total number of Option Shares;

     (ii)  on and after the second anniversary of the Date of Grant, up to an 
additional one-third (ignoring fractional shares) of the total number of 
Option Shares; and


Exhibit 10.35.4

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     (iii)  on and after the third anniversary of the Date of Grant, the 
remaining Option Shares.

3.   TERMINATION OF OPTION.

     (a)  The Option and all rights hereunder with respect thereto, to the 
extent such rights shall not have been exercised, shall terminate and become 
null and void after the expiration of ten (10) years from the Date of Grant 
(the "Option Term").

     (b)  When the Grantee ceases to be a director of the Company, the 
Option, to the extent not previously exercised, shall terminate and become 
null and void immediately upon the Separation Date, except in a case where 
the Grantee's service as a director of the Company ceases by reason of 
Disability or death or otherwise as follows.  If the Grantee ceases to be a 
director of the Company by reason of Disability or death, all unexercised 
portions of the Option shall become immediately exercisable and the Option 
may be exercised during the period beginning upon such termination and ending 
one year after such date. In no event, however, shall any such period extend 
beyond the Option Term.  If the Participant's service as a director of the 
Company terminates for any other reason prior to the exercise of all portions 
of the Option, the Participant shall have the right within three (3) months 
of his Separation Date, but not beyond the expiration date of the Option, to 
exercise such unexercised portions of the Option.

     (c)  In the event of Grantee's death, the Option may be exercised by 
Grantee's legal representative(s) as and to the extent that the Option would 
otherwise have been exercisable by Grantee, subject to the provisions of  
Section 3(b) hereof.

     (d)  Notwithstanding any other provisions set forth herein or in the 
Plan, if Grantee shall: (i) commit any act of malfeasance or wrongdoing 
affecting the Company, its Parents or Subsidiaries, or (ii) engage in conduct 
that would warrant Grantee's removal for cause (excluding general 
dissatisfaction with the performance of Grantee's duties, but including any 
act of disloyalty or any conduct clearly tending to bring discredit upon the 
Company, its Parents or Subsidiaries), any unexercised portion of the Option 
shall immediately terminate and be void.

4.   EXERCISE OF OPTIONS.

     (a)  Grantee may exercise the Option with respect to all or any part of 
the number of Option Shares that are exercisable hereunder by giving the 
Secretary of the Company written notice of intent to exercise.  The notice of 
exercise shall specify the number of Option Shares as to which the Option is 
to be exercised and date of exercise thereof, which date shall be at least 
five (5) days after the signing of such notice unless an earlier time shall 
have been mutually agreed upon.

     (b)  Full payment (in U.S. dollars) by Grantee of the Option Price for 
Option Shares purchased shall be made on or before the exercise date 
specified in the notice of exercise in cash or as the Company may otherwise 
permit as further set forth in the Plan.  On the exercise date specified in 
Grantee's notice or as soon thereafter as is practicable, the Company shall 
cause to be delivered to Grantee, a certificate or certificates for the 
Option Shares then being purchased (out of theretofore unissued Stock or 
reacquired Stock, as the Company may elect) upon full payment for such Option 
Shares.  The obligation of the Company to deliver Stock shall, however, be 
subject to the condition that if at any time the Committee shall determine in 
its discretion that the listing, registration or qualification of the Option 
or the Option Shares upon any securities exchange or under any state or 
federal law, or the consent or approval of any governmental regulatory body, 
is necessary or desirable as a condition of, or in connection with, the 
Option or the issuance or purchase of Stock thereunder, the Option may not be 
exercised in whole or in part unless such listing, registration, 
qualification, consent or approval shall have been effected or obtained free 
of any conditions not acceptable to the Committee.

     (c)  If Grantee fails to pay for any of the Option Shares specified in 
such notice or fails to accept delivery thereof, Grantee's right to purchase 
such


Exhibit 10.35.4                        2

<PAGE>

Option Shares may be terminated by the Company or the exercise of the Option 
may be ignored, as the Committee in its sole discretion may determine. The 
date specified in Grantee's notice as the date of exercise shall be deemed 
the date of exercise of the Option, provided that payment in full for the 
Option Shares to be purchased upon such exercise shall have been received by 
such date.

5.   ADJUSTMENT OF AND CHANGES IN STOCK.

     In the event of a reorganization, recapitalization, change of shares, 
stock split, spin-off, stock dividend, reclassification, subdivision, or 
combination of shares, merger, consolidation, rights offering, or any other 
change in the corporate structure of shares of capital stock of the Company, 
the Committee shall appropriately adjust the number and kind of shares of 
Stock subject to the Option and such option price; provided, however, that no 
such adjustment shall give Grantee any additional benefits under the Option.

     In the event of any Corporate Transaction or an event giving rise to a 
Change in Control, the Option shall be fully vested, nonforfeitable and 
become exercisable as of the date of the Change in Control or Corporate 
Transaction or as otherwise determined in accordance with Section 5.5(c) of 
the Plan.  However, in the case of a Corporate Transaction, the Committee may 
determine that the Option will not be so accelerated if and to the extent (i) 
such Option is either to be assumed by the successor or parent thereof or to 
be replaced with a comparable Option to purchase shares of the capital stock 
of the successor corporation or parent thereof, or (ii) such Option is to be 
replaced with a cash incentive program of the successor corporation that 
preserves the option spread existing at the time of the Corporate Transaction 
and provides for subsequent payment in accordance with the same vesting 
schedule applicable to such Option.

     In the event of a Corporate Transaction described in clauses (i) or (ii) 
of Section 5.5(b) of the Plan, the Committee may, upon no less than 60 days 
notice to the optionee (an "Acceleration Notice") determine that such 
optionee's Options will terminate as of the effective date of such Corporate 
Transaction, in which event such Options shall be fully vested, 
nonforfeitable and become exercisable immediately as of the date of such 
Acceleration Notice.  In the event of a Change in Control or Corporate 
Transaction described in clauses (a)(i), (a)(ii) and (b)(iii) of Section 5.5 
of the Plan or in the event the Acceleration Notice is not timely given, the 
Option shall remain exercisable for the remaining term of the Option 
notwithstanding the provisions of Article V of the Plan, subject to any 
limitations thereto which may be applicable to Incentive Stock Options.  In 
the event of a Corporate Transaction described in clauses (a)(i)(iii), b(i) 
or (b)(ii) of Section 5.5 of the Plan, which is preceded by a timely 
Acceleration Notice, the Option shall terminate as of the effective date of 
the Corporate Transaction described therein.  In no event shall the Option be 
exercised after the expiration of the Option Term.

6.   NO RIGHTS AS SHAREHOLDERS.

     Grantee shall have no rights as a shareholder with respect thereto 
unless and until certificates for shares of Common Stock are issued to him or 
her.

7.   NON-TRANSFERABILITY OF OPTION.

     During Grantee's lifetime, this Option shall be exercisable only by 
Grantee or his or her guardian or legal representative.  

8.   AMENDMENT OF OPTION.

     The Option may be amended by the Committee at any time (i) if the Committee
determines, in its sole discretion, that amendment is necessary or advisable in
light of any addition to or change in the Code or in the regulations issued
thereunder, or any federal or state securities law or other law of regulation,
which change occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause (i), with
the consent of Grantee.


Exhibit 10.35.4                        3

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9.   NOTICE.

     Any notice to the Company provided for in this instrument shall be 
addressed to it in care of its Secretary at its executive offices and any 
notice to Grantee shall be addressed to Grantee at the address below.  Any 
notice shall be deemed to be duly given if and when properly addressed and 
posted by registered or certified mail, postage prepaid.

10.  INCORPORATION OF PLAN BY REFERENCE.

     The Option is granted pursuant to the Plan, the terms and definitions of 
which are incorporated herein by reference, and the Option shall in all 
respects by interpreted in accordance with the Plan.

11.  GOVERNING LAW.

     To the extent that federal law shall not be held to have preempted local 
law, this Option shall be governed by the laws of the State of Delaware.  If 
any provision of the Option shall be held invalid or unenforceable, the 
remaining provisions hereof shall continue in full force and effect.


Exhibit 10.35.4                        4

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     IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Grant of Nonqualified Stock Option, and Grantee has placed his or
her signature hereon, effective as of the Date of Grant.



                                   NRG GENERATING (U.S.) INC.


                                   By: 
                                       --------------------------------------
                                        Timothy P. Hunstad
                                        Vice President and Chief Financial 
                                        Officer



                                   GRANTEE


                                   Signature 
                                            ---------------------------------

                                   Name: 
                                         ------------------------------------
                                                     (Print)

                                   Address: 
                                           ----------------------------------

                                           ----------------------------------

                                           ----------------------------------


Exhibit 10.35.4                        5