EX-10.40






Exhibit 10.40




NRG Energy, Inc.




Executive Change-in-Control

and General Severance Plan




(Amended and Restated December 9, 2008)




 









 





Contents




	 	 	 	 	 
	Article 1. Establishment and Term of the Plan
	 	 	1	 
	 
	 	 	 	 
	Article 2. Definitions
	 	 	2	 
	 
	 	 	 	 
	Article 3. Severance Benefits
	 	 	6	 
	 
	 	 	 	 
	Article 4. Confidentiality and Noncompetition
	 	 	10	 
	 
	 	 	 	 
	Article 5. Excise Tax Equalization Payment
	 	 	12	 
	 
	 	 	 	 
	Article 6. Legal Fees and Notice
	 	 	13	 
	 
	 	 	 	 
	Article 7. Successors and Assignment
	 	 	13	 
	 
	 	 	 	 
	Article 8. Miscellaneous
	 	 	14	 






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NRG Energy, Inc.

Executive Change-in-Control

and General Severance Plan for Tier I and Tier II Executives



Article 1. Establishment and Term of the Plan




     1.1 Establishment of the Plan. NRG Energy, Inc. (hereinafter referred to as the
“Company”) adopted the NRG Executive & Key Management Change-in-Control & General Severance
Plan effective May 24, 2006, which was amended and restated on April 25, 2007 (the “Original
Plan”). The Company hereby continues the Original Plan, effective December 9, 2008 as applied
to Tier I and Tier II Executives, as amended and restated as set forth herein. This amended plan is
to be known as the “NRG Energy, Inc. Executive Change-in-Control and General Severance Plan” (the
“Plan”). The Plan provides severance benefits to certain employees of the Company (each an
“Executive” and collectively the “Executives”) upon certain terminations of
employment from the Company.



     The Company considers the establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company and its stockholders. In
this connection, the Company recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control may arise and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.



     Accordingly, the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s management to their
assigned duties without distraction in circumstances arising from the possibility of a Change in
Control of the Company.



     1.2 Initial Term. This Plan will commence on May 24, 2006 (the “Effective Date”) and
shall continue in effect for a period of three (3) years (the “Initial Term”).



     1.3 Successive Periods. The term of this Plan shall automatically be extended for one (1)
additional year at the end of the Initial Term, and then again after each successive one (1) year
period thereafter (each such one (1) year period following the Initial Term is referred to as a
“Successive Period”). However, the Committee may terminate this Plan at the end of the
Initial Term, or at the end of any Successive Period thereafter, by giving the Executives written
notice of intent to terminate the Plan, delivered at least six (6) months prior to the end of such
Initial Term or Successive Period. If such notice is properly delivered by the Company, this Plan,
along with all corresponding rights, duties, and covenants, shall automatically expire at the end
of the Initial Term or Successive Period then in progress.



     1.4 Change-in-Control Renewal. Notwithstanding the provisions of Section 1.3 above, in
the event that a Change in Control of the Company occurs during the Initial Term or any Successive
Period, upon the effective date of such Change in Control, the term of this Plan shall
automatically and irrevocably be renewed for a period of two (2) years from the effective date of
such Change in Control. Further, this Plan may be assigned to the successor in such Change in
Control, as further provided in Article 8 herein. This Plan shall
thereafter



 









 







automatically terminate following such two (2) year Change-in-Control renewal period; provided that such
termination shall not affect or diminish the rights of Executives who become entitled to benefits
or payments under this Plan.


Article 2. Definitions




     Whenever used in this Plan, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized.




	 	(a)	 	“Base Salary” means the greater of the Executive’s annual rate of salary,
whether or not deferred, at: (i) the Effective Date of Termination or (ii) at the date
of the Change in Control.
	 
	 	(b)	 	“Beneficiary” means the persons or entities designated or deemed designated by
the Executive pursuant to Section 8.6 herein.
	 
	 	(c)	 	“Board” means the Board of Directors of the Company.
	 
	 	(d)	 	“Cause” shall mean one or more of the following:






	 	(i)	 	The conviction of, or an agreement to a plea of nolo contendere
to, any felony or other crime involving moral turpitude; or
	 
	 	(ii)	 	The Executive’s willful and continuing refusal to substantially
perform duties as reasonably directed by the Board under this or any other
agreement (after receipt of written notice from the Board setting forth such
duties and responsibilities to be performed); or
	 
	 	(iii)	 	In carrying out the Executive’s duties, the Executive engages
in conduct that constitutes willful gross neglect or willful gross misconduct
which, in either case, results in demonstrable harm to the business,
operations, prospects, or reputation of the Company; or
	 
	 	(iv)	 	Any other material breach of Article 4 of this Plan
which is not cured to the Board’s reasonable satisfaction within fifteen (15)
days after written notice thereof to the Executive.
	 
	 	 	 	For purposes of this Plan, there shall be no termination for Cause pursuant
to subsections (i) through (iv) above, unless a written notice, containing a
detailed description of the grounds constituting Cause hereunder, is
delivered to the Executive stating the basis for the termination. Upon
receipt of such notice, the Executive shall be given thirty (30) days to
fully cure and remedy the neglect or conduct that is the basis of such
claim. If the Executive fails to fully cure and remedy such neglect or
misconduct within such thirty (30) day period, the Executive shall have an
opportunity to be heard before the full Board. After such hearing, a
termination for Cause shall only occur if there is a vote of three-quarters
(3/4) of the Board to terminate the Executive for Cause.




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	 	(e)	 	“Change in Control” shall mean the first to occur of any of the following
events:






	 	(i)	 	Any “person” (as that term is used in Sections 13 and 14(d)(2)
of the Securities Exchange Act of 1934 (“Exchange Act”)) becomes the
“Beneficial Owner” (as that term is used in Section 13(d) of the Exchange Act),
directly or indirectly, of fifty percent (50%) or more of the Company’s capital
stock entitled to vote in the election of directors, excluding any “person” who
becomes a “beneficial owner” in connection with a Business Combination (as
defined in paragraph (iii) below) which does not constitute a Change in Control
under said paragraph (iii); or
	 
	 	(ii)	 	Persons who on the Effective Date constitute the Board (the
“Incumbent Directors”) cease for any reason, including without limitation, as a
result of a tender offer, proxy contest, merger, or similar transaction, to
constitute at least a majority thereof, provided that any person becoming a
director of the Company subsequent to the Effective Date shall be considered an
Incumbent Director if such person’s election or nomination for election was
approved by a vote of at least two-thirds (2/3) of the Incumbent Directors; but
provided further, that any such person whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a “person” (as defined in Sections 13(d)
and 14(d) of the Exchange Act) other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or
	 
	 	(iii)	 	Consummation of a reorganization, merger, consolidation, or
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case, unless, following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the company resulting from such Business
Combination (including, without limitation, a company which, as a result of
such transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the outstanding voting securities of the Company; or
	 
	 	(iv)	 	The stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.




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	 	(f)	 	“Code” means the United States Internal Revenue Code of 1986, as amended, and
any successors thereto.
	 
	 	(g)	 	“Committee” means the Compensation Committee of the Board or any other
committee appointed by the Board to perform the functions of the Compensation
Committee.
	 
	 	(h)	 	“Company” means NRG Energy, Inc., a Delaware corporation, or any successor
thereto as provided in Article 7 herein.
	 
	 	(i)	 	“Disability” shall mean the Executive’s inability to perform the essential
duties, responsibilities, and functions of his position with the Company and its
affiliates as a result of any mental or physical disability or incapacity even with
reasonable accommodations of such disability or incapacity, provided by the Company and
its affiliates, or if providing such accommodations would be unreasonable, for a period
of twelve (12) months. The Executive shall cooperate in all respects with the Company
if a question arises as to whether he has become disabled (including, without
limitation, submitting to an examination by a medical doctor or other health care
specialists selected by the Company and reasonably acceptable to the Executive and
authorizing such medical doctor or such other health care specialist to discuss the
Executive’s condition with the Company).
	 
	 	(j)	 	“Effective Date” means the commencement date of this Plan as specified in
Section 1.2 of this Plan.
	 
	 	(k)	 	“Effective Date of Termination” means the date on which a Qualifying
Termination occurs, as defined hereunder, which triggers the payment of Severance
Benefits hereunder.
	 
	 	(l)	 	“Former Parent Company” means Xcel Energy, Inc., a Minnesota corporation, or
any successor thereto.
	 
	 	(m)	 	“Good Reason” shall mean without the Executive’s express written consent the
occurrence of any one or more of the following:






	 	(i)	 	The Company materially reduces the amount of the Executive’s
then current Base Salary or the target for his annual bonus; or
	 
	 	(ii)	 	A material reduction in the Executive’s benefits under or
relative level of participation in the Company’s employee benefit or retirement
plans, policies, practices, or arrangements in which the Executive participates
as of the Effective Date of this Plan; or
	 
	 	(iii)	 	A material diminution in the Executive’s title, authority,
duties, or responsibilities or the assignment of duties to the Executive which
are materially inconsistent with his position; or




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	 	(iv)	 	The failure of the Company to obtain in writing the obligation
to perform or be bound by the terms of this Plan by any successor to the
Company or a purchaser of all or substantially all of the assets of the Company
within fifteen (15) days after a merger, consolidation, sale, or similar
transaction.






For purposes of this Plan, the Executive is not entitled to assert that his
termination is for Good Reason unless the Executive gives the Board written notice
of the event or events which are the basis for such claim within ninety (90) days
after the event or events occur, describing such claim in reasonably sufficient
detail to allow the Board to address the event or events and a period of not less
than thirty (30) days after to cure or fully remedy the alleged condition.




	 	(n)	 	“Notice of Termination” shall mean a written notice which shall indicate the
specific termination provision in this Plan relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.
	 
	 	(o)	 	“Qualifying Termination” means:






	 	(i)	 	If such event occurs within twenty-four (24) months immediately
following a Change in Control:






	 	(A)	 	An involuntary termination of the Executive’s
employment by the Company for reasons other than Cause, death, or
Disability pursuant to a Notice of Termination delivered to the
Executive by the Company; or
	 
	 	(B)	 	A voluntary termination by the Executive for
Good Reason pursuant to a Notice of Termination delivered to the
Company by the Executive; or






	 	(ii)	 	If such event occurs at any other time:






	 	(A)	 	An involuntary termination of the Executive’s
employment by the Company for reasons other than Cause, death, or
Disability pursuant to a Notice of Termination delivered to the
Executive by the Company.






	 	(p)	 	“Retirement” shall have the meaning ascribed to such term in the Company’s
tax-qualified retirement plan or under the successor or replacement of such retirement
plan if it is then no longer in effect.
	 
	 	(q)	 	“Severance Benefits” means the payment of Change-in-Control or General (as
appropriate) Severance compensation as provided in Article 3 herein.
	 
	 	(r)	 	“Specified Employee” means any Executive described in section 409A(a)(2)(B)(i)
of the Code.




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	 	(s)	 	“Tier I Executives” shall include those employees of the Company holding the
title EVP immediately prior to the Change in Control, or such other employee who is
designated as a Tier I Executive in the Company’s human resources records immediately
prior to the Change in Control other than the CEO.
	 
	 	(t)	 	“Tier II Executives” shall include those employees of the Company holding the
title SVP immediately prior to the Change in Control, or such other employee who is
designated as a Tier II Executive in the Company’s human resources records immediately
prior to the Change in Control.




Article 3. Severance Benefits




     3.1 Right to Severance Benefits.




	 	(a)	 	Change-in-Control Severance Benefits. The Executive shall be entitled to
receive from the Company Change-in-Control Severance Benefits, as described in
Section 3.2 herein, if a Qualifying Termination of the Executive’s employment
has occurred within twenty-four (24) months immediately following a Change in Control
of the Company.
	 
	 	(b)	 	General Severance Benefits. The Executive shall be entitled to receive from
the Company General Severance Benefits, as described in Section 3.3 herein, if
a Qualifying Termination of the Executive’s employment has occurred other than during
the twenty-four (24) months immediately following a Change in Control.
	 
	 	(c)	 	No Severance Benefits. The Executive shall not be entitled to receive
Severance Benefits if the Executive’s employment with the Company ends for reasons
other than a Qualifying Termination.
	 
	 	(d)	 	General Release and Acknowledgement of Restrictive Covenants. As a condition
to receiving Severance Benefits under either Section 3.2 or 3.3
herein, the Executive shall be obligated to execute a general release of claims in
favor of the Company, its current and former affiliates and stockholders, and the
current and former directors, officers, employees, and agents of the Company in a form
acceptable to the Company, and any revocation period for such release must have
expired, in each case within 60 days of the date of termination. The date upon which
the executed release is no longer subject to revocation shall be referred to herein as
the “Release Effective Date”. The Executive must also execute a notice
acknowledging the restrictive covenants in Article 4 within 60 days of the
date of termination. Any payments under Section 3.2 or 3.3 shall
commence only after execution of the release and acknowledgement, and in the manner
provided in Section 3.4.





 




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	 	(e)	 	No Duplication of Severance Benefits. If the Executive becomes entitled to
Change-in-Control Severance Benefits, the Severance Benefits provided for under
Section 3.2 hereunder shall be in lieu of all other Severance Benefits
provided to the Executive under the provisions of this Plan and any other
Company-related or Former Parent Company-related severance plans, programs, or
agreements including, but not limited to, the Severance Benefits under Section
3.3 herein. Likewise, if the Executive becomes entitled to General Severance
Benefits, the Severance Benefits provided under Section 3.3 hereunder shall be
in lieu of all other Severance Benefits provided to the Executive under the provisions
of this Plan and any other Company-related severance plans, programs, or other
agreements including, but not limited to, the Severance Benefits under Section
3.2 herein.





     3.2 Description of Change-in-Control Severance Benefits. In the event the Executive becomes
entitled to receive Change-in-Control Severance Benefits, as provided in Section 3.1(a)
herein, the Company shall provide the Executive with the following:




	 	(a)	 	A lump-sum amount, paid upon the date that is sixty (60) calendar days
following the Effective Date of Termination, equal to the Executive’s unpaid Base
Salary, accrued vacation pay, unreimbursed business expenses, and all other items
earned by and owed to the Executive through and including the Effective Date of
Termination, provided that to the extent the payment of any amounts pursuant to this
Section 3.2(a) does not constitute “deferred compensation” for purposes of
Code Section 409A, such amounts shall be paid upon the Release Effective Date.
	 
	 	(b)	 	A lump-sum amount, paid upon the date that is sixty (60) calendar days
following the Effective Date of Termination, equal to: (i) two and ninety-nine
one-hundredths (2.99) for Tier I Executives, or (ii) two (2) for Tier II Executives
times the sum of the following: (A) the Executive’s Base Salary and (B) the Executive’s
annual target bonus opportunity in the year of termination; provided that to the extent
the payment of any amounts pursuant to this Section 3.2(b) does not
constitute “deferred compensation” for purposes of Code Section 409A, such amounts
shall be paid upon the Release Effective Date; provided further that any amounts that
become payable pursuant to this Section 3.2(b) prior to January 1, 2009 shall
be paid in accordance with the schedule provided under the Original Plan (which, for
the avoidance of doubt, shall commence upon the Effective Date of Termination and shall
continue for the period provided in the Original Plan, paid in accordance with the
payroll practices of the Company as in effect on the Effective Date of Termination, but
in no event less frequently than monthly).
	 
	 	(c)	 	A lump-sum amount, paid upon the date that is sixty (60) calendar days
following the Effective Date of Termination, equal to the Executive’s then current
target bonus opportunity established under the bonus plan in which the Executive is
then participating, for the plan year in which a Qualifying Termination occurs,
adjusted on a pro rata basis based on the number of days the Executive was actually
employed during the bonus plan year in which the Qualifying Termination occurs,
provided that to the extent the payment of any amounts




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	 	 	 	pursuant to this Section 3.2(c) does not constitute “deferred
compensation” for purposes of Code Section 409A, such amounts shall be paid upon the
Release Effective Date.






	 	(d)	 	Reimburse Executive for all or a portion of his or her cost to participate in
COBRA medical and dental continuation coverage for eighteen (18) months following the
Executive’s Date or Termination, such that Executive maintains the same coverage level
and cost, on an after tax basis, to the Executive as in effect immediately prior to the
Executive’s Effective Date of Termination.






Notwithstanding the above, these medical benefits shall be discontinued prior to the
end of the stated continuation period in the event the Executive receives
substantially similar benefits from a subsequent employer, as determined solely by
the Committee in good faith. For purposes of enforcing this offset provision, the
Executive shall be deemed to have a duty to keep the Company informed as to the
terms and conditions of any subsequent employment and the corresponding benefits
earned from such employment, and shall provide, or cause to provide, to the Company
in writing correct, complete, and timely information concerning the same.




	 	(e)	 	Treatment of outstanding long-term incentives shall be in accordance with the
governing plan document and award agreements, if any.





     3.3 Description of General Severance Benefits. In the event the Executive becomes entitled to
receive General Severance Benefits as provided in Section 3.1(b) herein, the Company shall
provide the Executive with the following:




	 	(a)	 	A lump-sum amount, paid upon the date that is sixty (60) calendar days
following the Effective Date of Termination, equal to the Executive’s unpaid Base
Salary, accrued vacation pay, unreimbursed business expenses, and all other items
earned by and owed to the Executive through and including the Effective Date of
Termination; provided that to the extent the payment of any amounts pursuant to this
Section 3.3(a) does not constitute “deferred compensation” for purposes of
Code Section 409A, such amounts shall be paid upon the Release Effective Date.
	 
	 	(b)	 	A lump-sum amount, paid upon the date that is sixty (60) calendar days
following the Effective Date of Termination, equal to one and one-half (1.5) times the
Executive’s Base Salary; provided that to the extent the payment of any amounts
pursuant to this Section 3.3(b) does not constitute “deferred compensation”
for purposes of Code Section 409A, such amounts shall be paid upon the Release
Effective Date; provided further that any amounts that become payable pursuant to this
Section 3.3(b) prior to January 1, 2009 shall be paid in accordance with the
schedule provided under the Original Plan (which, for the avoidance of doubt, shall
commence upon the Effective Date of Termination and shall continue for the period
provided in the Original Plan, paid in accordance with the payroll practices of the
Company as in effect on the Effective Date of Termination, but in no event less
frequently than monthly).




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	 	(c)	 	Reimburse Executive for all or a portion of his or her cost to participate in
COBRA medical and dental continuation coverage for eighteen (18) months following the
Executive’s Date or Termination, such that Executive maintains the same coverage level
and cost, on an after tax basis, to the Executive as in effect immediately prior to the
Executive’s Effective Date of Termination.
	 
	 	 	 	Notwithstanding the above, these medical insurance benefits shall be discontinued
prior to the end of the stated continuation period in the event the Executive
receives substantially similar benefits from a subsequent employer, as determined
solely by the Committee in good faith. For purposes of enforcing this offset
provision, the Executive shall be deemed to have a duty to keep the Company informed
as to the terms and conditions of any subsequent employment and the corresponding
benefits earned from such employment, and shall provide, or cause to provide, to the
Company in writing correct, complete, and timely information concerning the same.






	 	(d)	 	Treatment of outstanding long-term incentives shall be in accordance with the
governing plan document and award agreements, if any.





     3.4 Coordination with Release and Delay Required by Code Section 409A.




	 	(a)	 	To the extent any continuing benefit (or reimbursement thereof) to be provided
is not “deferred compensation” for purposes of Code Section 409A, then such benefit
shall commence or be made immediately after the Release Effective Date. To the extent
any continuing benefit (or reimbursement thereof) to be provided is “deferred
compensation” for purposes of Code Section 409A, then such benefits shall be reimbursed
or commence upon the sixtieth (60) day following the Executive’s termination of
employment. The delayed benefits shall in any event expire at the time such benefits
would have expired had the benefits commenced immediately upon Executive’s termination
of employment.
	 
	 	(b)	 	Notwithstanding any other payment schedule provided herein to the contrary, if
the Executive is deemed on the date of termination to be a Specified Employee, then,
once the release and acknowledgement required by Section 3.1(d) is executed
and delivered and no longer subject to revocation, any payment that is considered
deferred compensation under Code Section 409A payable on account of a “separation from
service” shall be made on the date which is the earlier of (A) the expiration of the
six (6)-month period measured from the date of such “separation from service” of the
Executive, and (B) the date of the Executive’s death (the “Delay Period”) to
the extent required under Code Section 409A. Upon the expiration of the Delay Period,
all payments delayed pursuant to this Section 3.4(b) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such delay)
shall be paid to the Executive in a lump sum, and any remaining payments due under this
Plan shall be paid or provided in accordance with the normal payment dates specified
for them herein.




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Article 4. Confidentiality and Noncompetition




     In the event the Executive becomes entitled to receive Change-in-Control Severance Benefits as
provided in Section 3.2 herein or General Severance Benefits as provided in Section
3.3 herein, the following shall apply:




	 	(a)	 	Confidential Information. The Executive acknowledges that the information,
observations, and data (including trade secrets) obtained by him while employed by the
Company concerning the business or affairs of the Company or any of its affiliates
(“Confidential Information”) are the property of the Company or such affiliate.
Therefore, except in the course of the Executive’s duties to the Company or as may be
compelled by law or appropriate legal process, the Executive agrees that he shall not
disclose to any person or entity or use for his own purposes any Confidential
Information or any confidential or proprietary information of other persons or entities
in the possession of the Company and its affiliates (“Third Party
Information”), without the prior written consent of the Board, unless and to the
extent that the Confidential Information or Third Party Information becomes generally
known to and available for use by the public other than as a result of the Executive’s
acts or omissions. Except in the course of the Executive’s duties to Company or as may
be compelled by law or appropriate legal process, the Executive will not, during his
employment with the Company, or permanently thereafter, directly or indirectly use,
divulge, disseminate, disclose, lecture upon, or publish any Confidential Information,
without having first obtained written permission from the Board to do so. As of the
Effective Date of Termination, the Executive shall deliver to the Company, or at any
other time the Company may reasonably request, all memoranda, notes, plans, records,
reports, computer files, disks and tapes, printouts and software and other documents
and data (and copies thereof) embodying or relating to Third Party Information,
Confidential Information, or the business of the Company, or its affiliates which he
may then possess or have under his control.
	 
	 	(b)	 	Intellectual Property, Inventions, and Patents. The Executive acknowledges
that all discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, trade secrets, designs, analyses, drawings, reports, patent
applications, copyrightable work and mask work (whether or not including any
confidential information), and all registrations or applications related thereto, all
other proprietary information and all similar or related information (whether or not
patentable) which may relate to the Company’s or any of its affiliates’ actual or
anticipated business, research and development, or existing or future products or
services and which are conceived, developed, or made by the Executive (whether alone or
jointly with others) while employed by the Company and its affiliates (“Work
Product”), belong to the Company or such affiliate. The Executive shall promptly
disclose such Work Product to the Board and, at the Company’s expense, perform all
actions reasonably requested by the Board (whether during or after the Executive’s
employment with the Company) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney, and other instruments).
The Executive




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	 	 	 	acknowledges that all applicable Work Product shall be deemed to constitute “works
made for hire” under the U.S. Copyright Act of 1976, as amended. To the extent any
Work Product is not deemed a work made for hire, then the Executive hereby assigns
to the Company or such affiliate all right, title, and interest in and to such Work
Product, including all related intellectual property rights.
	 
	 	 	 	The Executive is hereby advised that the above paragraph regarding the Company’s and
its affiliates’ ownership of Work Product does not apply to any invention for which
no equipment, supplies, facilities, or trade secret information of the Company or
any affiliate was used and which was developed entirely on the Executive’s own time,
unless: (i) the invention relates to the business of the Company or any affiliate or
to the Company’s or any affiliate’s actual or demonstrably anticipated research or
development, or (ii) the invention results from any work performed by the Executive
for the Company or any affiliate.






	 	(c)	 	Noncompete. In further consideration of the compensation to be paid to the
Executive hereunder, the Executive acknowledges that during the course of his
employment with the Company and its affiliates he shall become familiar with the
Company’s trade secrets and with other Confidential Information concerning the Company
and its affiliates and that his services shall be of special, unique, and extraordinary
value to the Company and its affiliates, and therefore, the Executive agrees that,
during the Executive’s employment with the Company and for one (1) year thereafter (the
“Noncompete Period”), the Executive shall not directly or indirectly own any
interest in, manage, control, participate in, consult with, render services for, be
employed in an executive, managerial, or administrative capacity by, or in any manner
engage in any company engaged in the business of wholesale power generation which
competes with the businesses of the Company or its affiliates, as such businesses exist
or are in process during the Executive’s employment with the Company, within any
geographical area in which the Company or its affiliates engage or have definitive
plans to engage in such businesses. Nothing herein shall prohibit the Executive from
being a passive owner of not more than two percent (2%) of the outstanding stock of any
class of a corporation which is publicly traded, so long as the Executive has no active
participation in the business of such corporation. Notwithstanding the foregoing, the
provisions of this Article 4(c) shall not apply in the case of termination of
the Executive’s employment pursuant to any material breach of the Company’s obligations
under Article 3 which remains uncured for more than twenty (20) days after
notice is received from the Executive of such breach, which such notice shall include a
detailed description of the grounds constituting such breach.
	 
	 	(d)	 	Nonsolicitation. During the Noncompete Period, the Executive shall not
directly or indirectly through another person or entity: (i) induce or attempt to
induce any employee of the Company or any of its affiliates to leave the employ of the
Company or such affiliate, or in any way interfere with the relationship between the
Company or any affiliate and any employee thereof; (ii) hire any person who was an
employee of the Company or any affiliate during the last six (6) months of




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	 	 	 	the Executive’s employment with the Company; or (iii) induce or attempt to induce
any customer, supplier, licensee, licensor, franchisee, or other business relation
of the Company or any affiliate to cease doing business with the Company or such
affiliate, or in any interfere with the relationship between any such customer,
supplier, licensee, or business relation and the Company or any affiliate
(including, without limitation, making any negative or disparaging statements or
communications regarding the Company or its affiliates).






	 	(e)	 	Duration, Scope, or Area. If, at the time of enforcement of this Article
4, a court shall hold that the duration, scope, or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the maximum
duration, scope, or area reasonable under such circumstances shall be substituted for
the stated duration, scope, or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope, and area permitted by
law.
	 
	 	(f)	 	Company Enforcement. In the event of a breach or a threatened breach by the
Executive of any of the provisions of this Article 4, the Company would suffer
irreparable harm, and in addition and supplementary to other rights and remedies
existing in its favor, the Company shall be entitled to specific performance and/or
injunctive or other equitable relief from a court of competent jurisdiction in order to
enforce or prevent any violations of the provisions hereof (without posting a bond or
other security). In addition, in the event of a breach or violation by the Executive
of Article 4(c), the Noncompete Period shall be automatically extended by the
amount of time between the initial occurrence of the breach or violation and when such
breach or violation has been duly cured.




Article 5. Excise Tax Equalization Payment




     In the event that any payment or benefit made or provided to or for the benefit of Executive
in connection with this Plan or his employment with the Company or the termination thereof (a
“Payment”) is determined to be subject to any excise tax (“Excise Tax”) imposed by
Section 4999 of the Code (or any successor to such Section), the Company shall pay to such
Executive, prior to the time any Excise Tax is payable with respect to such Payment (through
withholding or otherwise), an additional amount (a “Gross-Up Payment”) which, after the
imposition of all income, employment, excise and other taxes, penalties and interest thereon, is
equal to the sum of: (i) the Excise Tax on such Payment, plus (ii) any penalty and interest
assessments associated with such Excise Tax. The determination of whether any Payment is subject
to an Excise Tax and, if so, the amount and time of any Gross-Up Payment pursuant to this
Article 5 shall be made by an independent auditor (the “Auditor”) jointly selected
by the parties and paid by the Company. Unless the Executive agrees otherwise in writing, the
Auditor shall be a nationally recognized United States public accounting firm that has not, during
the two (2) years preceding the date of its selection, acted in any way on behalf of the Company or
any of its affiliates. If the parties cannot agree on the firm to serve as the Auditor, then the
parties shall each select one (1) accounting firm and those two (2) firms shall jointly select the
accounting firm to serve as the Auditor. The parties shall cooperate with each other in connection
with any Proceeding, defined as any threatened or actual action, suit, or proceeding, whether
civil,



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criminal, administrative, investigative, appellate, or other, or Claim, defined as any claim,
demand, request, investigation, dispute, controversy, threat, discovery request, or request for
testimony or information, relating to the existence or amount of any liability for Excise Tax. All
expenses relating to any such Proceeding or Claim (including attorneys’ fees and other expenses
incurred by the Executive in connection therewith) shall be paid by the Company promptly upon
demand by the Executive, and any such payment shall be subject to a Gross-Up Payment under this
Article 5 in the event that the Executive is subject to Excise Tax on such payment. This
Article 5 shall apply irrespective of whether a Change in Control has occurred. Any
Gross-Up Payment shall be made no later than the end of the calendar year immediately following the
calendar year in which the Excise Tax payment was made.


Article 6. Legal Fees and Notice




     6.1 Payment of Legal Fees. Except as otherwise agreed to by the parties, the Company shall pay
the Executive for costs of litigation or other disputes including, without limitation, reasonable
attorneys’ fees incurred by the Executive during Executive’s lifetime in asserting any claims or
defenses under this Plan, except that the Executive shall bear his own costs of such litigation or
disputes (including, without limitation, attorneys’ fees) if the court (or arbitrator) finds in
favor of the Company with respect to any claims or defenses asserted by the Executive.



     6.2 Notice. Any notices, requests, demands, or other communications provided for by this Plan
shall be sufficient if in writing and if sent by registered or certified mail to the Executive at
the last address he or she has filed in writing with the Company or, in the case of the Company, at
its principal offices.


Article 7. Successors and Assignment




     7.1 Successors to the Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) of all or a significant portion of the assets of the Company by
agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to
perform under this 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. Regardless of whether such agreement is
executed, the terms of this Plan shall be binding upon any successor in accordance with the
operation of law and such successor shall be deemed the “Company” for purposes of this Plan.



     7.2 Assignment by the Executive. This Plan shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive dies while any amount would still be
payable to him or her hereunder had he or she continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the Executive’s
Beneficiary. If the Executive has not named a Beneficiary, then such amounts shall be paid to the
Executive’s devisee, legatee, or other designee, or if there is no such designee, to the
Executive’s estate.



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Article 8. Miscellaneous




     8.1 Employment Status. Except as may be provided under any other agreement between the Executive
and the Company, the employment of the Executive by the Company is “at will” and may be terminated
by either the Executive or the Company at any time, subject to applicable law.



     8.2 Code Section 409A.




	 	(a)	 	All expenses or other reimbursements under this Plan shall be made on or prior
to the last day of the taxable year following the taxable year in which such expenses
were incurred by the Executive (provided that if any such reimbursements constitute
taxable income to the Executive, such reimbursements shall be paid no later than March
15th of the calendar year following the calendar year in which the expenses to be
reimbursed were incurred), and no such reimbursement or expenses eligible for
reimbursement in any taxable year shall in any way affect the expenses eligible for
reimbursement in any other taxable year.
	 
	 	(b)	 	For purposes of Code Section 409A, the Executive’s right to receive any
installment payment pursuant to this Plan shall be treated as a right to receive a
series of separate and distinct payments.
	 
	 	(c)	 	Whenever a payment under this Plan specifies a payment period with reference to
a number of days (e.g., “payment shall be made within thirty (30) days
following the date of termination”), the actual date of payment within the specified
period shall be within the sole discretion of the Company.
	 
	 	(d)	 	A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Plan providing for the payment of any amounts or benefits upon
or following a termination of employment unless such termination is also a “separation
from service” within the meaning of Code Section 409A and, for purposes of any such
provision of this Plan, references to a “termination,” “termination of employment” or
like terms shall mean “separation from service.”
	 
	 	(e)	 	Notwithstanding any other provision of this Plan to the contrary, in no event
shall any payment under this Plan that constitutes “deferred compensation” for purposes
of Code Section 409A be subject to offset unless otherwise permitted by Code Section
409A.





     8.3 Entire Plan. This Plan supersedes any prior agreements or understandings, oral or written,
between the parties hereto, with respect to the subject matter hereof, and constitutes the entire
agreement of the parties with respect thereto. Without limiting the generality of the foregoing
sentence, this Plan completely supersedes any and all prior employment agreements entered into by
and between the Company and the Executive, and all amendments thereto, in their entirety.



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     8.4 Severability. In the event that any provision or portion of this Plan shall be determined to
be invalid or unenforceable for any reason, the remaining provisions of this Plan shall be
unaffected thereby and shall remain in full force and effect.



     8.5 Tax Withholding. The Company may withhold from any benefits payable under this Plan all
federal, state, city, or other taxes as may be required pursuant to any law or governmental
regulation or ruling.



     8.6 Beneficiaries. The Executive may designate one (1) or more persons or entities as the primary
and/or contingent beneficiaries of any amounts to be received under this Plan. Such designation
must be in the form of a signed writing acceptable to the Board or the Board’s designee. The
Executive may make or change such designation at any time.



     8.7 Payment Obligation Absolute. The Company’s obligation to make the payments provided for
herein shall be absolute and unconditional, and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or anyone else.



     Except as provided in Sections 3.2(d) and 3.3(c) of this Plan, the Executive
shall not be obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Plan, and the obtaining of any such other employment
shall in no event effect any reduction of the Company’s obligations to make the payments and
arrangements required to be made under this Plan.



     8.8 Contractual Rights to Benefits. Subject to approval and ratification by the Board of
Directors, this Plan establishes and vests in the Executive a contractual right to the benefits to
which he or she is entitled hereunder. However, nothing herein contained shall require or be
deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or
otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments
to be made or required hereunder.



     8.9 Modification. No provision of this Plan may be modified, waived, or discharged with respect
to any particular Executive unless such modification, waiver, or discharge is agreed to in writing
and signed by such Executive and by an authorized member of the Committee, or by the respective
parties’ legal representatives and successors, provided, however, that the Committee may
unilaterally amend this Plan without the Executive’s consent if such amendment does not materially
adversely alter or impair in any significant manner any rights or obligations of the Executive
under the Plan.



     8.10 Gender and Number. Except where otherwise indicated by the context, any masculine term used
herein also shall include the feminine; the plural shall include the singular and the singular
shall include the plural.



     8.11 Applicable Law. To the extent not preempted by the laws of the United States, the laws of the
state of New Jersey shall be the controlling law in all matters relating to this Plan.



     IN WITNESS WHEREOF, the Company has executed this Plan on this ninth day of December, 2008.



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ATTEST




NRG Energy, Inc.




	 	 	 
	/S/ DAVID W. CRANE

	 	 
	 
	 	 
	David W. Crane
	 	 
	President and Chief Executive Officer
	 	 







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