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                                                                    EXHIBIT 10.2


                                 FIRST AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT

         WHEREAS, Reliant Resources, Inc., ("RRI") and Reliant Energy
Incorporated ("REI") have entered into an employment agreement, dated as July
29, 2002 (the "Agreement") with Mark M. Jacobs (the "Executive"); and

         WHEREAS, as a result of the spin-off of RRI by a successor to REI, REI
is no longer a party to the Agreement

         WHEREAS, the Executive and RRI desire to amend the Agreement;

         NOW, THEREFORE, the Agreement is hereby amended, effective as of the
date hereof:

1.       Section 2 of the Agreement is hereby redesignated as Section 2.A., and
         a new Section 2.B. is added to the Agreement, as follows:

                  B. New Severance Agreement. If Executive remains employed by
         RRI at the natural expiration of the Term on the close of business on
         July 31, 2005 and at such time neither Executive nor RRI shall have
         delivered a notice of termination of Executive's employment, the
         Severance Agreement between RRI and Executive, executed as of the date
         hereof (the "Severance Agreement"), shall become immediately effective
         without further action by the parties. Upon the effectiveness of the
         Severance Agreement, this Agreement shall be deemed to have expired in
         accordance with its terms and Executive shall have no rights hereunder
         due to any subsequent termination of employment with RRI. In the event
         that Executive is not employed by RRI at the natural expiration of the
         Term or a notice of termination of Executive's employment has been
         delivered by Executive or RRI prior to such time, the Severance
         Agreement shall not become effective and shall be null and void and of
         no force or effect and any applicable provisions of this Agreement
         shall govern the consequences of such termination of employment.

2.       The following additional clauses 4, 5 and 6 are added to Section 5.D.
         of the Agreement, as follows:

         4. subject to any election by Executive pursuant to Section 6.C.2., an
amount equal to the product of (a) the Base Salary and (b) the Executive's
target incentive award opportunity under the applicable annual short-term
incentive bonus plan in effect immediately prior to the termination of
Executive's employment (or, if higher, immediately prior to the first event or
circumstance constituting Good Reason) with the product of (a) and (b) prorated
based on the number of days Executive was employed during the bonus year in
which his employment terminated;


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         5. subject to any election by Executive pursuant to Section 6.C.2.,
reimbursement for fees incurred for outplacement services within twenty four
months of the date of Executive's termination of employment in connection with
Executive's efforts to obtain new employment, up to a maximum of $100,000 (such
outplacement benefits, together with the prorata bonus payment described in
clause 4 above, the "Elected Benefits");

         6. in the event it shall be determined that any payment or distribution
by RRI to or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5.D.6. (a "Payment")) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") from
RRI in an amount such that after payment (whether through withholding at the
source or otherwise) by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto),
employment taxes and Excise Tax imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. The provisions of Exhibit C shall govern determinations required
to be made under this Section 5.D.6.

3.       Section 6.C. is hereby amended by redesignating Section 6.C.2. as
         Section 6.C.3. and be adding a new Section 6.C.2., as follows:

                  2. Executive agrees that while employed by RRI during the Term
of this Agreement and for one year following a termination of employment during
the Term of this Agreement that does not occur (i) on or following a Change of
Control (as defined on Exhibit D) or (ii) on or following the execution of a
binding agreement to effectuate a Change of Control but prior to the
consummation of such Change of Control, Executive will not, without the prior
written consent of RRI, acting alone or in conjunction with others, either
directly or indirectly, engage in any business that is in competition with RRI
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 RRI. Notwithstanding the foregoing, in
the event that Executive irrevocably elects in writing, prior to the 15th day
following termination of his employment, not to receive the Elected Benefits,
Executive shall not be subject to the provisions of this Section 6.C.2.

4.       New Exhibits C and D are added to the Agreement in the form attached
         hereto.


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Executed this 30th day of April, 2003


                                              RELIANT RESOURCES, INC.

                                              By:    /s/ Joel V. Staff
                                                     ---------------------------
                                              Title: Chairman and Chief
                                                     Executive Officer


                                              /s/ Mark M. Jacobs
                                              ----------------------------------
                                              Mark M. Jacobs


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                                    EXHIBIT C

                  Subject to the provisions of this Exhibit C, all
determinations required to be made under this Exhibit C, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Deloitte & Touche (the "Accounting Firm") which shall provide detailed
supporting calculations both to RRI and Executive within 15 business days of the
receipt of notice from Executive that there has been a Payment, or such earlier
time as is requested by RRI. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control (as defined in Exhibit D), Executive may appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by RRI. Any
Gross-Up Payment, as determined pursuant to this Exhibit C, shall be paid by RRI
to Executive within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by Executive, it shall furnish Executive with a written opinion that failure to
report the Excise Tax on Executive's applicable federal income tax return would
not result in the imposition of negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon RRI and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by RRI should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that RRI exhausts its remedies pursuant to the following
provisions of this Exhibit C and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by RRI to or for the benefit of Executive.

Executive shall notify RRI in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by RRI of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than ten business days after Executive is informed in writing of such claim and
shall apprise RRI of the nature of such claim and the date on which such claim
is requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives such notice
to RRI (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If RRI notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:

                  (a) give RRI any information reasonably requested by RRI
         relating to such claim;

                  (b) take such action in connection with contesting such claim
         as RRI shall reasonably request in writing from time to time,
         including, without limitation, accepting legal representation with
         respect to such claim by an attorney reasonably selected by RRI;


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                  (c) cooperate with RRI in good faith in order to effectively
         contest such claim; and

                  (d) permit RRI to participate in any proceedings relating to
         such claim;

provided, however, that RRI shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax, employment tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this Exhibit C, RRI shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as RRI shall determine; provided, however, that if RRI
directs Executive to pay such claim and sue for a refund, RRI shall advance the
amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax, employment tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, RRI's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

If, after the receipt by Executive of an amount advanced by RRI pursuant to the
foregoing provisions of this Exhibit C, Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to RRI complying
with the requirements of this Exhibit C) promptly pay to RRI the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
RRI pursuant to the foregoing provisions of this Exhibit C, a determination is
made that Executive shall not be entitled to any refund with respect to such
claim and RRI does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

If RRI is obligated to provide the Executive with health benefit coverage
pursuant to Section 5.D.3., and the amount of such benefits or the value of such
benefit coverage (including without limitation any insurance premiums paid by
RRI to provide such


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benefits) is subject to any income, employment or similar tax imposed by
federal, state or local law, or any interest or penalties with respect to such
tax (such tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the "Income Tax") because such benefits
cannot be provided under a nondiscriminatory health plan described in Section
105 of the Code or for any other reason, RRI will pay to the Executive an
additional payment or payments (collectively, an "Income Tax Payment"). The
Income Tax Payment will be in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), the Executive retains an amount of the Income Tax Payment equal
to the Income Tax imposed with respect to such welfare benefits or such welfare
benefit coverage.


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                                    EXHIBIT D

                  A "CHANGE OF CONTROL" shall be deemed to have occurred upon
the occurrence of any of the following events:

                  (a) 30% OWNERSHIP CHANGE: Any Person, other than any pension
         plan regulated under the Employee Retirement Income Security Act of
         1974, as amended established by RRI 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 RRI 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 of Directors of RRI; 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 prior
         to 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 prior to such Business Combination, of the Outstanding
         Voting Stock, (ii) if the Business Combination involves the issuance or
         payment by RRI 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 RRI's
         consolidated long-term debt (in each case, determined immediately prior
         to 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 RRI
         immediately prior to consummation of such Business Combination; or


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                  (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 prior to such Major Asset
         Disposition beneficially own, directly or indirectly, more than 70% of
         the then outstanding shares of voting stock of RRI (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 of directors of RRI (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 RRI immediately
         prior to consummation of such Major Asset Disposition.

For purposes of the foregoing definition,

                  (1)      the term "Person" means an individual, entity or
         group;

                  (2) the term "group" is used as it is defined for purposes of
         Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange
         Act");

                  (3) the term "beneficial owner" is used as it is defined for
         purposes of Rule 13d-3 under the Exchange Act;

                  (4) the term "Outstanding Voting Stock" means outstanding
         voting securities of RRI 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) shall be determined based on
         the combined voting power of such securities;

                  (5) the term "Incumbent Director" means a director of RRI (x)
         who was a director of RRI on January 1, 2003 or (y) who becomes a
         director subsequent to such date and whose election, or nomination for
         election by RRI'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 shall 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 of Directors of RRI;

                  (6) the term "election contest" is used as it is defined for
         purposes of Rule 14a-11 under the Exchange Act;

                  (7) the term "Business Combination" means (x) a merger or
         consolidation involving RRI or its stock or (y) an acquisition by RRI,


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         directly or through one or more subsidiaries, of another entity or its
         stock or assets;

                  (8) the term "parent corporation resulting from a Business
         Combination" means RRI if its stock is not acquired or converted in the
         Business Combination and otherwise means the entity which as a result
         of such Business Combination owns RRI or all or substantially all RRI's
         assets either directly or through one or more subsidiaries;

                  (9) the term "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 RRI and its subsidiaries on a consolidated
         basis; and any specified percentage or portion of the assets of RRI
         shall be based on fair market value, as determined by a majority of the
         Incumbent Directors; and

                  (10) the term "Affiliate" means any company controlled by,
         controlling or under common control with RRI within the meaning of
         Section 414 of the Code.


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