tln20163312016ex101







Exhibit 10.1         - 1 -   AGREEMENT      THIS AGREEMENT, effective as of December 18, 2015, is made by and   between Talen Energy Corporation, a Delaware corporation, and Paul Farr (the   "Executive").      WHEREAS, the Company considers it essential to the best interests of its   shareowners to foster the continued employment of key management personnel; and      WHEREAS, the Board of Directors of the Company (the "Board")   recognizes that, as is the case with many publicly-held corporations, the possibility of a   Change in Control (as defined in the last Section hereof) exists 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 shareowners; and      WHEREAS, the Board has determined that appropriate steps should be   taken to reinforce and encourage the continued attention and dedication of members of   management, including the Executive, to their assigned duties without distraction in the   face of potentially disturbing circumstances arising from the possibility of a Change in   Control;      NOW THEREFORE, in consideration of the premises and the mutual   covenants herein contained, the Company and the Executive hereby agree as follows:      1.  Defined Terms.  The definitions of capitalized terms used in this   Agreement are provided in the last Section hereof.      2.  Term of Agreement.  The Term of this Agreement shall commence on   the date hereof and shall continue in effect through May 31, 2017; provided, however,   that if a Change in Control shall have occurred during the Term, the Term shall expire   no earlier than thirty-six (36) months beyond the month in which such Change in Control   occurred.  Notwithstanding the foregoing, and subject to any extensions pursuant to   Section 7.3, in the event that prior to the occurrence of a Change in Control or Potential   Change in Control, the Executive's employment is terminated for any reason then this   Agreement shall terminate as of the date that the Executive's employment is terminated.       3.  Company's Covenants Summarized.  In order to induce the Executive   to remain in the employ of the Company and in consideration of the Executive's   covenants set forth in Section 4 hereof, the Company agrees, under the conditions   described herein, to pay the Executive the Severance Payments and the other   payments and benefits described herein.  Except as provided in Section 9.1 hereof, no   Severance Payments shall be payable under this Agreement unless there shall have   been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be   deemed to have been) a termination of the Executive's employment with the Company   following a Change in Control and during the Term.  This Agreement shall not be     





 







Exhibit 10.1         - 2 -   construed as creating an express or implied contract of employment and, except as   otherwise agreed to in writing between the Executive and the Company, the Executive   shall not have any right to be retained in the employ of the Company.      4.  The Executive's Covenants.  The Executive agrees that, subject to the   terms and conditions of this Agreement, in the event of a Potential Change in Control   during the Term, the Executive will remain in the employ of the Company until the   earliest of (i) the last day of the Potential Change in Control Period, (ii) the date of a   Change in Control, (iii) the date of termination by the Executive of the Executive's   employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the   termination by the Company of the Executive's employment for any reason.      5.  Compensation Other Than Severance Payments.       5.1  Following a Change in Control and during the Term, during any period   that the Executive fails to perform the Executive's full-time duties with the Company as a   result of incapacity due to physical or mental illness, the Company shall pay the   Executive's full salary to the Executive at the rate in effect at the commencement of any   such period, together with all compensation and benefits payable to the Executive under   the terms of any compensation or benefit plan, program or arrangement maintained by   the Company during such period (other than any disability plan), until the Executive's   employment is terminated by the Company for Disability.       5.2  If the Executive's employment shall be terminated for any reason   following a Change in Control and during the Term, the Company shall pay to the   Executive (i) the Executive's full base salary through the Date of Termination at the rate   in effect immediately prior to the Date of Termination, or if higher, the rate in effect   immediately prior to the first occurrence of an event or circumstance constituting Good   Reason, together with all compensation and benefits payable to the Executive through   the Date of Termination under the terms of the Company's compensation or benefit   plans, programs or arrangements as in effect immediately prior to the Date of   Termination, or if more favorable to the Executive, as in effect immediately prior to the   first occurrence of an event or circumstance constituting Good Reason, (ii) the value of   any annual bonus or cash incentive plan payment that would have been paid for service   in the final calendar year of employment, as if 100% of target goals were achieved, but   prorated by multiplying by a fraction equal to the number of full calendar months of   service completed divided by 12, and (iii) the value of any Restricted Stock Units that   would have been awarded for service in the final calendar year of employment, as if   100% of target goals were achieved, but prorated by multiplying by a fraction equal to   the number of full calendar months of service completed divided by 12.      5.3  If the Executive's employment shall be terminated for any reason   following a Change in Control and during the Term, the Company shall pay to the   Executive the Executive's normal post-termination compensation and benefits due the   Executive as such payments become due.  Such post-termination compensation and   benefits shall be determined under, and paid in accordance with, the Company's     





 







Exhibit 10.1         - 3 -   retirement, insurance and other compensation or benefit plans, programs and   arrangements as in effect immediately prior to the Date of Termination or, if more   favorable to the Executive, as in effect immediately prior to the occurrence of the first   event or circumstance constituting Good Reason.      6.  Severance Payments.      6.1  The Company shall pay the Executive the payments, and provide the   Executive the benefits, described in this Section 6.1 (the "Severance Payments") upon   the termination of the Executive's employment following a Change in Control and during   the Term, in addition to the payments and benefits described in Section 5 hereof, unless   such termination is (i) by the Company for Cause, (ii) by reason of death, Disability or   Retirement, or (iii) by the Executive without Good Reason.  For purposes of this   Agreement, the Executive's employment shall be deemed to have been terminated   following a Change in Control by the Company without Cause or by the Executive with   Good Reason if (A) the Executive's employment is terminated by the Company without   Cause prior to a Change in Control (whether or not a Change in Control ever occurs)   and such termination was at the request or direction of a Person who has entered into   an agreement with the Company the consummation of which would constitute a Change   in Control or (B) if the Executive terminates his employment for Good Reason prior to a   Change in Control (whether or not a Change in Control ever occurs) and the   circumstance or event which constitutes Good Reason occurs at the request or direction   of such Person, or (C) the Executive's employment is terminated by the Company   without Cause or by the Executive for Good Reason and such termination or the   circumstance or event which constitutes Good Reason is otherwise in connection with   or in anticipation of a Change in Control (whether or not a Change in Control ever   occurs).  For purposes of any determination regarding the applicability of the   immediately preceding sentence, any position taken by the Executive shall be presumed   to be correct unless the Company establishes to the Board by clear and convincing   evidence that such position is not correct.      (A)  In lieu of any further salary payments to the Executive for periods   subsequent to the Date of Termination and in lieu of any severance benefit otherwise   payable to the Executive including any payments under the Talen Energy Severance   Benefits Plan or any similar plan, policy or procedure or arrangement, if eligible, or any   employment agreement or arrangement between the Executive and the Company, to   the extent provided in Section 11 of this Agreement, the Company shall pay to the   Executive a lump sum severance payment, in cash, equal to three times the sum of (i)   the Executive's base salary as in effect immediately prior to the Date of Termination or,   if higher, in effect immediately prior to the first occurrence of an event or circumstance   constituting Good Reason, and (ii) the Executive’s target annual cash bonus payable   pursuant to any annual bonus or annual incentive plan maintained by the Company for   the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to   the fiscal year in which occurs the first event or circumstance constituting Good Reason   (including as an amount so paid any amount that would have been so paid but for the   Executive's request that the amount not be paid).  For purposes of determining the     





 







Exhibit 10.1         - 4 -   value of the annual bonus earned by the Executive in any calendar year, the value of   any restricted stock awards or stock options earned by the Executive in any such year   shall not be included in the value of the annual bonus for such year;       (B)  For the thirty-six (36) month period immediately following the Date of   Termination, the Company shall arrange to provide the Executive and his dependents,   life, disability, accident and health insurance benefits substantially similar to those   provided to the Executive and his dependents immediately prior to the Date of   Termination (without giving effect to any reduction in such benefits subsequent to a   Change in Control which reduction constitutes Good Reason) or, if more favorable to   the Executive, those provided to the Executive and his dependents immediately prior to   the first occurrence of an event or circumstance constituting Good Reason, at no   greater after-tax cost to the Executive than the after-tax cost to the Executive   immediately prior to such date or occurrence; provided, however, that, unless the   Executive consents to a different method (after taking into account the effect of such   method on the calculation of "parachute payments" pursuant to Section 6.2 hereof),   such health insurance benefits shall be provided through a third-party insurer.  Benefits   otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced   to the extent benefits of the same type are received by or made available to the   Executive during the thirty-six (36) month period following the Date of Termination (and   any such benefits received by or made available to the Executive shall be reported to   the Company by the Executive); provided, however, that the Company shall reimburse   the Executive for the excess, if any, of the cost of such benefits to the Executive over   such cost immediately prior to the Date of Termination or, if more favorable to the   Executive, the first occurrence of an event or circumstance constituting Good Reason.      (C)  Notwithstanding any provision of any annual or long-term incentive   plan to the contrary, the Company shall pay to the Executive a lump sum amount, in   cash, equal to the sum of (i) any unpaid incentive compensation that has been allocated   or awarded to the Executive for a completed fiscal year or other measuring period   preceding the Date of Termination under any such plan and which, as of the Date of   Termination, is contingent only upon the continued employment of the Executive to a   subsequent date, and (ii) to the extent not otherwise paid or deferred at the Executive's   election, pursuant to the terms of the applicable plan, a pro rata portion to the Date of   Termination of the aggregate value of all contingent incentive compensation awards to   the Executive for all then uncompleted periods under any such plan, calculated as to   each such award by multiplying the award that the Executive would have earned on the   last day of the performance award period, assuming the achievement, at the level that   would produce the maximum award, of the individual and corporate performance goals   established with respect to such award, by the fraction obtained by dividing the number   of full months and any fractional portion of a month during such performance award   period through the Date of Termination by the total number of months contained in such   performance award period.       (D)  In addition to the retirement benefits to which the Executive may be   entitled under each Pension Plan, if any, or any successor plan thereto, the Company     





 







Exhibit 10.1         - 5 -   shall pay the Executive a lump sum amount, in cash, equal to the excess of (i) the   actuarial equivalent of the aggregate retirement pension (taking into account any early   retirement subsidies associated therewith and determined as a straight life annuity   commencing at the date (but in no event earlier than the third anniversary of the Date of   Termination) as of which the actuarial equivalent of such annuity is greatest) which the   Executive would have accrued under the terms of all Pension Plans (without regard to   any amendment to any Pension Plan made subsequent to a Change in Control and on   or prior to the Date of Termination, which amendment adversely affects in any manner   the computation of retirement benefits thereunder), determined as if the Executive were   fully vested thereunder and had accumulated after the Date of Termination thirty-six   (36) additional months of service credit thereunder (and if any Pension Plan imposes a   maximum number of months for purposes of accrual of benefits thereunder, such thirty-   six (36) additional months shall be reduced, but not below zero, to the extent necessary   so that the total number of months of service credited thereunder, including the number   of months credited pursuant to this Section 6.1(D), does not exceed such maximum   number of months) and had been credited under each Pension Plan during such period   with compensation equal to the Executive's compensation (as defined in such Pension   Plan) during the twelve (12) months immediately preceding the Date of Termination or,   if higher, during the twelve months immediately prior to the first occurrence of an event   or circumstance constituting Good Reason, over (ii) the actuarial equivalent of the   aggregate retirement pension (taking into account any early retirement subsidies   associated therewith and determined as a straight life annuity commencing at the date   (but in no event earlier than the Date of Termination) as of which the actuarial   equivalent of such annuity is greatest) which the Executive had accrued pursuant to the   provisions of the Pension Plans as of the Date of Termination.  For purposes of this   Section 6.1(D), "actuarial equivalent" shall be determined using the same assumptions   utilized under the Talen Energy Supplemental Compensation Pension Plan or any   successor plan, immediately prior to the Date of Termination, or, if more favorable to the   Executive, immediately prior to the first occurrence of an event or circumstance   constituting Good Reason.      (E)  If the Executive would have become entitled to benefits under the   Company's post-retirement health care or life insurance plans, as in effect immediately   prior to the Date of Termination or, if more favorable to the Executive, as in effect   immediately prior to the first occurrence of an event or circumstance constituting Good   Reason, had the Executive's employment terminated at any time during the period of   thirty-six (36) months after the Date of Termination, the Company shall provide such   post-retirement health care or life insurance benefits to the Executive and the   Executive's dependents commencing on the later of (i) the date on which such coverage   would have first become available and (ii) the date on which benefits described in   subsection (B) of this Section 6.1 terminate.      (F)  The Company shall provide the Executive with outplacement services   suitable to the Executive's position for a period of three years or, if earlier, until the first   acceptance by the Executive of an offer of employment.        





 







Exhibit 10.1         - 6 -   6.2 (A) Notwithstanding any other provisions of this Agreement, in the   event that any payment or benefit received or to be received by the Executive in   connection with a Change in Control or the termination of the Executive's employment   (whether pursuant to the terms of this Agreement or any other plan, arrangement or   agreement with the Company, any Person whose actions result in a Change in Control   or any Person affiliated with the Company or such Person) (all such payments and   benefits, including the Severance Payments, being hereinafter called "Total Payments")        (I) constitute “parachute payments” within the meaning of Section   280G of the Code, and       (II) but for this Section 6.2(A), would be subject to the Excise Tax   imposed by Section 4999 of the Code, then the Executive will be entitled to receive   either        (a) the full amount of the Total Payments, or        (b) a portion of the Total Payments having a value equal to   $1 less than three (3) times such individual’s “base amount” (as such term is defined in   Section 280G(b)(3)(A) of the Code),      whichever of (a) and (b), after taking into account applicable federal, state,   and local income taxes and the Excise Tax imposed by Section 4999 of the Code,   results in the receipt by the Executive on an after-tax basis, of the greatest portion of the   Total Payments (such determination and potential reduction of payments being referred   to herein as the “Cut-Back Condition”).  In the event that a reduction in Total Payments   is required pursuant to the preceding sentence, such reduction shall apply first to the   cash payments provided under Section 6.1(A) and thereafter shall apply on a pro-rata   basis to other payments in a manner that complies with Section 409A of the Code.      (B)  For purposes of determining whether and the extent to which the Total   Payments will be subject to the Excise Tax and whether the Cut-Back Condition will be   satisfied, (i) no portion of the Total Payments the receipt or enjoyment of which the   Executive shall have  waived at such time and in such manner as not to constitute a   "payment" within the meaning of Section 280G(b) of the Code shall be taken into   account, (ii) no portion of the Total Payments shall be taken into account which, in the   opinion of tax counsel selected by the accounting firm that was, immediately prior to the   Change in Control, the Company's independent auditor (the "Auditor"), does not   constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the Code,   (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the   Excise Tax and determining whether the Cut-Back Condition is satisfied, no portion of   such Total Payments shall be taken into account which constitutes reasonable   compensation for services actually rendered, within the meaning of Section   280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable   compensation, and (iii) the value of any non-cash benefit or any deferred payment or   benefit included in the Total Payments shall be determined by the Auditor in accordance     





 







Exhibit 10.1         - 7 -   with the principles of Sections 280G(d)(3) and (4) of the Code.  Prior to the payment   date set forth in Section 6.3 hereof, the Company shall provide the Executive with its   calculation of the amounts referred to in this Section and such supporting materials as   are reasonably necessary for the Executive to evaluate the Company's calculations.  If   the Executive objects to the Company's calculations, the Company shall pay to the   Executive (as such time or times otherwise provided by this Agreement) such portion of   the Severance Payments (up to 100% thereof) as the Executive determines is   necessary to result in the Executive receiving the greater of clauses (i) and (ii) of   Section 6.1(A) hereof.      (C)  If it is established pursuant to a final determination of a court or an   Internal Revenue Service proceeding that, notwithstanding the good faith of the   Executive and the Company in applying the terms of this Section 6.2, the Total   Payments paid to or for the Executive's benefit are in an amount that would result in any   portion of such Total Payments being subject to the Excise Tax, then, if such repayment   would result in satisfaction of the Cut-Back Condition, the Executive shall have an   obligation to pay the Company upon demand an amount equal to the excess of the   Total Payments paid to or for the Executive's benefit over the Total Payments that could   have been paid to or for the Executive's benefit without any portion of such Total   Payments being subject to the Excise Tax.      6.3  The payments provided in Subsection 6.1(A), (C) and (D) hereof and   Section 6.2 hereof shall be made on the first day of the seventh (7th) month following   the Date of Termination provided, however, that if the amounts of such payments   cannot be finally determined on or before such day, the Company shall pay to the   Executive on such day an estimate, as determined in good faith by the Executive, or, in   the case of payments under Section 6.2 hereof, in accordance with Section 6.2 hereof,   of the minimum amount of such payments to which the Executive is clearly entitled and   shall pay the remainder of such payments (together with interest on the unpaid   remainder (or on all such payments to the extent the Company fails to make such   payments when due) at 120% of the rate provided in Section 1274(b)(2)(B) of the Code)   as soon as the amount thereof can be determined but in no event later than the thirtieth   (30th) day after the last day of the seventh (7th) month following the Date of   Termination.  In the event that the amount of the estimated payments exceeds the   amount subsequently determined to have been due, such excess shall constitute a loan   by the Company to the Executive, payable on the fifth (5th) business day after demand   by the Company (together with interest at 120% of the rate provided in Section   1274(b)(2)(B) of the Code).  At the time that payments are made under this Agreement,   the Company shall provide the Executive with a written statement setting forth the   manner in which such payments were calculated and the basis for such calculations   including, without limitation, any opinions or other advice the Company has received   from tax counsel, the Auditor or other advisors or consultants (and any such opinions or   advice which are in writing shall be attached to the statement).      6.4  The Company also shall pay to the Executive all legal fees and   expenses incurred by the Executive in disputing in good faith any issue hereunder     





 







Exhibit 10.1         - 8 -   relating to the termination of the Executive's employment hereunder or in seeking in   good faith to obtain or enforce any benefit or right provided by this Agreement or in   connection with any tax audit or proceeding to the extent attributable to the application   of section 4999 of the Code to any payment or benefit provided hereunder.  Such   payments shall be made within five (5) business days after delivery of the Executive's   written requests for payment accompanied with such evidence of fees and expenses   incurred as the Company reasonably may require.      7.  Termination Procedures and Compensation During Dispute.        7.1  Notice of Termination.  After a Change in Control and during the   Term, any purported termination of the Executive's employment (other than by reason of   death) shall be communicated by written Notice of Termination from one party hereto to   the other party hereto in accordance with Section 10 hereof.  For purposes of this   Agreement, a "Notice of Termination" shall mean a notice which shall indicate the   specific termination provision in this Agreement 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.  Further, a Notice of   Termination for Cause is required to include a copy of a resolution duly adopted by the   affirmative vote of not less than three-quarters (3/4) of the entire membership of the   Board at a meeting of the Board which was called and held for the purpose of   considering such termination (after reasonable notice to the Executive and an   opportunity for the Executive, together with the Executive's counsel, to be heard before   the Board) finding that, in the good faith opinion of the Board, the Executive was guilty   of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying   the particulars thereof in detail.      7.2  Date of Termination.  "Date of Termination", with respect to any   purported termination of the Executive's employment after a Change in Control and   during the Term, shall mean (i) if the Executive's employment is terminated for   Disability, thirty (30) days after Notice of Termination is given (provided that the   Executive shall not have returned to the full-time performance of the Executive's duties   during such thirty (30) day period), and (ii) if the Executive's employment is terminated   for any other reason, the date specified in the Notice of Termination (which, in the case   of a termination by the Company, shall not be less than thirty (30) days (except in the   case of a termination for Cause) and, in the case of a termination by the Executive, shall   not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the   date such Notice of Termination is given).      7.3  Dispute Concerning Termination.  If within fifteen (15) days after any   Notice of Termination is given, or, if later, prior to the Date of Termination (as   determined without regard to this Section 7.3), the party receiving such Notice of   Termination notifies the other party that a dispute exists concerning the termination, the   Date of Termination shall be extended until the earlier of (i) the date on which the Term   ends or (ii) the date on which the dispute is finally resolved, either by mutual written   agreement of the parties or by a final judgment, order or decree of an arbitrator or a     





 







Exhibit 10.1         - 9 -   court of competent jurisdiction (which is not appealable or with respect to which the time   for appeal therefrom has expired and no appeal has been perfected); provided,   however, that the Date of Termination shall be extended by a notice of dispute given by   the Executive only if such notice is given in good faith and the Executive pursues the   resolution of such dispute with reasonable diligence.      7.4  Compensation During Dispute.  If a purported termination occurs   following a Change in Control and during the Term and the Date of Termination is   extended in accordance with Section 7.3 hereof, the Company shall continue to pay the   Executive the full compensation in effect when the notice giving rise to the dispute was   given (including, but not limited to, salary) and continue the Executive as a participant in   all compensation, benefit and insurance plans in which the Executive was participating   when the notice giving rise to the dispute was given, until the Date of Termination, as   determined in accordance with Section 7.3 hereof.  Amounts paid under this Section 7.4   are in addition to all other amounts due under this Agreement (other than those due   under Section 5.2 hereof) and shall not be offset against or reduce any other amounts   due under this Agreement.      8.  No Mitigation.  The Company agrees that, if the Executive's   employment with the Company terminates during the Term, the Executive is not   required to seek other employment or to attempt in any way to reduce any amounts   payable to the Executive by the Company pursuant to Section 6 or Section 7.4 hereof.    Further, the amount of any payment or benefit provided for in this Agreement (other   than in Section 6.1(B) hereof) shall not be reduced by any compensation earned by the   Executive as the result of employment by another employer, by retirement benefits, by   offset against any amount claimed to be owed by the Executive to the Company, or   otherwise.      9.  Successors; Binding Agreement.      9.1  In addition to any obligations imposed by law upon any successor to   the Company, the Company will require any successor (whether direct or indirect, by   purchase, merger, consolidation or otherwise) to all or substantially all of the business   and/or assets of the Company to expressly assume and agree to perform this   Agreement in the same manner and to the same extent that the Company would be   required to perform it if no such succession had taken place.  Failure of the Company to   obtain such assumption and agreement prior to the effectiveness of any such   succession shall be a breach of this Agreement and shall entitle the Executive to   compensation from the Company in the same amount and on the same terms as the   Executive would be entitled to hereunder if the Executive were to terminate the   Executive's employment for Good Reason after a Change in Control, except that, for   purposes of implementing the foregoing, the date on which any such succession   becomes effective shall be deemed the Date of Termination.        9.2  This Agreement shall inure to the benefit of and be enforceable by the   Executive's personal or legal representatives, executors, administrators, successors,     





 







Exhibit 10.1         - 10 -   heirs, distributees, devisees and legatees.  If the Executive shall die while any amount   would still be payable to the Executive hereunder (other than amounts which, by their   terms, terminate upon the death of the Executive) if the Executive had continued to live,   all such amounts, unless otherwise provided herein, shall be paid in accordance with   the terms of this Agreement to the executors, personal representatives or administrators   of the Executive's estate.      10.  Notices.  For the purpose of this Agreement, notices and all other   communications provided for in the Agreement shall be in writing and shall be deemed   to have been duly given when delivered or mailed by United States registered mail,   return receipt requested, postage prepaid, addressed, to the Executive at the last   known address maintained in the Company's personnel records, and to the Company,   to the address set forth below, or to such other address as either party may have   furnished to the other in writing in accordance herewith, except that notice of change of   address shall be effective only upon actual receipt:      To the Company:      Talen Energy Corporation   835 Hamilton Street, Suite 150   Allentown, Pennsylvania  18101   Attention:  Corporate Secretary      11.  Miscellaneous.  No provision of this Agreement may be modified,   waived or discharged unless such waiver, modification or discharge is agreed to in   writing and signed by the Executive and such officer as may be specifically designated   by the Board.  No waiver by either party hereto at any time of any breach by the other   party hereto of, or any lack of compliance with, any condition or provision of this   Agreement to be performed by such other party shall be deemed a waiver of similar or   dissimilar provisions or conditions at the same or at any prior or subsequent time.  This   Agreement supersedes any other agreements or representations, oral or otherwise,   express or implied, with respect to the subject matter hereof, which have been made by   either party; provided, however, that this Agreement shall supersede any agreement   setting forth the terms and conditions of the Executive's employment with the Company   only in the event that the Executive's employment with the Company is terminated on or   following a Change in Control, by the Company other than for Cause or by the   Executive for Good Reason.  The validity, interpretation, construction and performance   of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania.    All references to sections of the Exchange Act or the Code shall be deemed also to   refer to any successor provisions to such sections.  Any payments provided for   hereunder shall be paid net of any applicable withholding required under federal, state   or local law and any additional withholding to which the Executive has agreed.  The   obligations of the Company and the Executive under this Agreement that by their nature   may require either partial or total performance after the expiration of the Term   (including, without limitation, those under Sections 6 and 7 hereof) shall survive such   expiration.     





 







Exhibit 10.1         - 11 -      12.  Validity.  The invalidity or unenforceability of any provision of this   Agreement shall not affect the validity or enforceability of any other provision of this   Agreement, which shall remain in full force and effect.        13.  Counterparts.  This Agreement may be executed in several   counterparts, each of which shall be deemed to be an original but all of which together   will constitute one and the same instrument.      14.  Settlement of Disputes; Arbitration.  The Board shall make all   determinations as to the Executive's right to benefits under this Agreement.  Any denial   by the Board of a claim for benefits under this Agreement shall be stated in writing and   delivered or mailed to the Executive and such notice shall set forth the specific reasons   for the denial and the specific provisions of this Agreement relied upon, and shall be   written in a manner that may be understood without legal or actuarial counsel.  In   addition, the Board shall afford a reasonable opportunity to the Executive for a review of   the decision denying the Executive's claim and, in the event of continued disagreement,   the Executive may appeal within a period of 60 days after receipt of notification of   denial.  Failure to perfect an appeal within the 60-day period shall make the decision   conclusive.  Any further dispute or controversy arising under or in connection with this   Agreement shall be settled exclusively by arbitration in Philadelphia, Pennsylvania in   accordance with the rules of the American Arbitration Association then in effect;   provided, however, that the evidentiary standards set forth in this Agreement shall   apply. Judgment may be entered on the arbitrator's award in any court having   jurisdiction.  Notwithstanding any provision of this Agreement to the contrary, the   Executive shall be entitled to seek specific performance of the Executive's right to be   paid until the Date of Termination during the pendency of any dispute or controversy   arising under or in connection with this Agreement.      15.  Definitions.  For purposes of this Agreement, the following terms shall   have the meanings indicated below:      (A) "Affiliate" shall have the meaning set forth in Rule 12b-2   promulgated under Section 12 of the Exchange Act.      (B) "Base Amount" shall have the meaning set forth in section   280G(b)(3) of the Code.      (C) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3   under the Exchange Act.      (D) "Board" shall mean the Board of Directors of the Company.      (E) "Cause" for termination by the Company of the Executive's   employment shall mean (i) the willful and continued failure by the Executive to   substantially perform the Executive's duties with the Company (other than any such     





 







Exhibit 10.1         - 12 -   failure resulting from the Executive's incapacity due to physical or mental illness or any   such actual or anticipated failure after the issuance of a Notice of Termination for Good   Reason by the Executive pursuant to Section 7.1 hereof) after a written demand for   substantial performance is delivered to the Executive by the Board, which demand   specifically identifies the manner in which the Board believes that the Executive has not   substantially performed the Executive's duties, or (ii) the willful engaging by the   Executive in conduct which is demonstrably and materially injurious to the Company or   its subsidiaries, monetarily or otherwise.  For purposes of clauses (i) and (ii) of this   definition, (a) no act, or failure to act, on the Executive's part shall be deemed "willful"   unless done, or omitted to be done, by the Executive not in good faith and without   reasonable belief that the Executive's act, or failure to act, was in the best interest of the   Company, and (b) in the event of a dispute concerning the application of this provision,   no claim by the Company that Cause exists shall be given effect unless the Company   establishes to the Board by clear and convincing evidence that Cause exists.      (F) "Change in Control" means the occurrence of any one of the   following events:        (I)  the following individuals cease for any reason to constitute a   majority of the number of directors then serving: individuals who, on the date   hereof, constitute the Board and any new director (other than a director whose   initial assumption of office is in connection with an actual or threatened election   contest, including but not limited to a consent solicitation, relating to the election   of directors of the Company) whose appointment or election by the Board or   nomination for election by the Company's shareowners was approved or   recommended by a vote of at least two-thirds (2/3) of the directors then still in   office who either were directors on the date hereof or whose appointment,   election or nomination for election was previously so approved or recommended;      (II)  any Person becomes the Beneficial Owner, directly or   indirectly, of securities of the Company representing 20% or more of the   combined voting power of the Company's then outstanding securities entitled to   vote generally in the election of directors;       (III)  there is consummated a merger or consolidation of the   Company or any direct or indirect subsidiary of the Company with any other   corporation or other entity, other than (I) a merger or consolidation which would   result in the voting securities of the Company outstanding immediately prior to   such merger or consolidation continuing to represent (either by remaining   outstanding or by being converted into voting securities of the surviving entity or   any parent thereof), in combination with the ownership of any trustee or other   fiduciary holding securities under an employee benefit plan of the Company or   any subsidiary of the Company, at least 60% of the combined voting power of the   securities of the Company or at least 60% of the combined voting power of the   securities of such surviving entity or any parent thereof outstanding immediately   after such merger or consolidation; or (II) a merger or consolidation effected to     





 







Exhibit 10.1         - 13 -   implement a recapitalization of the Company (or similar transaction) in which no   Person is or becomes the Beneficial Owner, directly or indirectly, of securities of   the Company (excluding in the securities Beneficially Owned by such Person any   securities acquired directly from the Company or its Affiliates) representing 20%   or more of the combined voting power of the Company's then outstanding   securities;      (IV)  the shareowners of the Company approve a plan of complete   liquidation or dissolution of the Company; or       (V)  the Board adopts a resolution to the effect that a "Change in   Control" has occurred or is anticipated to occur.      (G) "Code" shall mean the Internal Revenue Code of 1986, as   amended from time to time.      (H) "Company" shall mean Talen Energy Corporation and, except in   determining, under Section 15(E) hereof, whether or not any Change in Control of the   Company has occurred in connection with such succession, shall include its   subsidiaries and any successor to its business and/or assets which assumes and   agrees to perform this Agreement by operation of law, or otherwise.  For purposes of   this Agreement, the Executive's employment by (including termination of such   employment) and compensation from any subsidiary of the Company shall be deemed   employment by and compensation from the Company.      (I) "Date of Termination" shall have the meaning set forth in Section   7.2 hereof.      (J) "Disability" shall be deemed the reason for the termination by the   Company of the Executive's employment, if, as a result of the Executive's incapacity   due to physical or mental illness, the Executive shall have been absent from the full-   time performance of the Executive's duties with the Company for a period of six (6)   consecutive months, the Company shall have given the Executive a Notice of   Termination for Disability, and, within thirty (30) days after such Notice of Termination is   given, the Executive shall not have returned to the full-time performance of the   Executive's duties.      (K) "Exchange Act" shall mean the Securities Exchange Act of 1934, as   amended from time to time.      (L) "Excise Tax" shall mean any excise tax imposed under section   4999 of the Code.      (M) "Executive" shall mean the individual named in the first paragraph   of this Agreement.        





 







Exhibit 10.1         - 14 -   (N) "Good Reason" for termination of the Executive's employment with   the Company by such Executive shall mean the occurrence (without the Executive's   express written consent which specifically references this Agreement) after a Change in   Control, or prior to a Change in Control under the circumstances described in clauses   (B) and (C) of the second sentence of Section 6.1 hereof (treating all references in   paragraphs (I) through (VII) below to a "Change in Control" as references to a "Potential   Change in Control"), of any one of the following acts by the Company, or failures by the   Company to act, unless, in the case of any act or failure to act described in paragraph   (I), (V), (VI), or (VII) below, such act or failure to act is corrected prior to the Date of   Termination specified in the Notice of Termination given in respect thereof:      (I)  the assignment to the Executive of any duties inconsistent with   the Executive's status as an executive officer or key employee of the Company, a   substantial adverse alteration in the nature or status of the Executive's   responsibilities from those in effect immediately prior to a Change in Control, or   the elimination of a direct reporting relationship between the Executive and an   independent board of directors;      (II)  a reduction by the Company of the Executive's annual base   salary as in effect on the date of this Agreement, or as the same may be   increased from time to time, except for across-the-board decreases uniformly   affecting management, key employees and salaried employees of the Company   or the business unit in which the Executive is then employed;      (III)  the relocation of the Executive's principal work location to a   location more than 30 miles from the vicinity of such work location immediately   prior to a Change in Control or the Company's requiring the Executive to be   based anywhere other than such principal place of employment (or permitted   relocation thereof) except for required travel on the Company's business to an   extent substantially consistent with the Executive's present business travel   obligations;      (IV)  the failure by the Company to pay to the Executive any portion   of the Executive's current compensation or to pay to the Executive any portion of   an installment of deferred compensation under any deferred compensation   program of the Company, within seven (7) days of the date such compensation is   due, except for across-the-board compensation deferrals uniformly affecting   management, key employees and salaried employees of the Company or the   business unit in which the Executive is then employed;      (V)  the failure by the Company to continue in effect any   compensation or benefit plan in which the Executive participates immediately   prior to a Change in Control which is material to the Executive's total   compensation, or any substitute plans adopted prior to a Change in Control,   unless an equitable arrangement (embodied in an ongoing substitute or   alternative plan) has been made with respect to such plan, or the failure by the     





 







Exhibit 10.1         - 15 -   Company to continue the Executive's participation therein (or in such substitute   or alternative plan) on a basis not materially less favorable, both in terms of the   amount or timing of payment of benefits provided and the level of the Executive's   participation relative to other participants, as existed immediately prior to the   Change in Control;      (VI)  the failure by the Company to continue to provide the   Executive with benefits substantially similar to those enjoyed by the Executive   under any of the Company's pension, savings, life insurance, medical, health and   accident, or disability plans in which the Executive was participating immediately   prior to a Change in Control, except for across-the-board changes to any such   plans uniformly affecting all participants in such plans, the taking of any other   action by the Company which would directly or indirectly materially reduce any of   such benefits or deprive the Executive of any material fringe benefit enjoyed by   the Executive at the time of the Change in Control, or the failure by the Company   to provide the Executive with the number of paid vacation days to which the   Executive is entitled on the basis of years of service with the Company in   accordance with the Company's normal vacation policy at the time of the Change   in Control; or      (VII)  any purported termination of the Executive's employment   which is not effected pursuant to a Notice of Termination satisfying the   requirements of Section 7.1 hereof.  For purposes of this Agreement, no such   purported termination shall be effective.      The Executive's right to terminate his or her employment with the   Company for Good Reason shall not be affected by the Executive's incapacity   due to physical or mental illness.  The Executive's continued employment shall   not constitute consent to, or a waiver of rights with respect to, any act or failure to   act constituting Good Reason hereunder.      For purposes of any determination regarding the existence of Good   Reason, any claim by the Executive that Good Reason exists shall be presumed   correct unless the Company established to the Board by clear and convincing   evidence that Good Reason does not exist.      (O) "Notice of Termination" shall have the meaning stated in Section   7.1 hereof.      (P) "Pension Plan" shall mean any tax-qualified, supplemental or   excess defined benefit pension plan maintained by the Company and any other   agreement entered into between the Executive and the Company which is designed to   provide the Executive with supplemental retirement benefits.      (Q) "Person" shall have the meaning given in Section 3(a)(9) of the   Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided,     





 







Exhibit 10.1         - 16 -   however, a Person shall not include (i) the Company or any of its Affiliates, (ii) a trustee   or other fiduciary holding securities under an employee benefit plan of the Company or   any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an   offering of such securities, or (iv) a corporation owned, directly or indirectly, by the   shareowners of the Company in substantially the same proportions as their ownership   of stock of the Company.      (R) "Potential Change in Control" shall be deemed to have occurred if   the conditions or events set forth in any one of the following paragraphs shall have been   satisfied or shall have occurred:      (I)  the Company enters into an agreement, the consummation of   which would result in the occurrence of a Change in Control;      (II)  the Company or any Person publicly announces an intention to   take or to consider taking actions which if consummated would constitute a   Change in Control;      (III)  the Board adopts a resolution to the effect that, for purposes of   this Agreement, a Potential Change in Control has occurred.        (IV)  any Person is or becomes the Beneficial Owner, directly or   indirectly, of securities of the Company representing 5% or more of the combined   voting power of the Company's then outstanding securities entitled to vote   generally in the election of directors.      Notwithstanding the foregoing, a "Potential Change of Control" shall not be   deemed to occur if (i) a Person acquired such beneficial ownership of 5% or   more of the Company's outstanding common shares but less than 20% and such   Person has reported or is required to report such ownership on Schedule 13G   under the Exchange Act (or any comparable or successor report); (ii) a Person   acquired such beneficial ownership of 5% or more of the Company's outstanding   common shares and such Person has reported or is required to report such   ownership under Schedule 13D under the Exchange Act (or any comparable or   successor report), which Schedule 13D does not state any intention to or reserve   the right to control or influence the management or policies of the Company or   engage in any of the actions specified in Item 4 of such Schedule (other than the   disposition of the common shares) and, within 10 business days of being   requested by the Company to advise it regarding the same, certifies to the   Company that such Person acquired common shares amounting to 5% or more   of the Company's outstanding common shares inadvertently and who or which,   together with all Affiliates thereof, thereafter does not acquire additional common   shares while the Beneficial Owner, as such term is defined in or used by   Regulation 13D-G as promulgated under the Exchange Act, of 5% or more of the   common shares then outstanding; provided, however, that if the Person   requested to so certify fails to do so within 10 business days, then a Potential     





 







Exhibit 10.1         - 17 -   Change of Control shall be deemed to have occurred immediately after such 10-   Business-Day period; or (iii) any Person who becomes the Beneficial Owner of   5% or more of the common shares then outstanding due to the repurchase of   common shares by the Company unless and until such Person, after becoming   aware that such Person has become the Beneficial Owner of 5% or more of the   common shares then outstanding, acquires beneficial ownership of additional   common shares representing 1% or more of the common shares then   outstanding.       (S) "Potential Change in Control Period" shall mean the period   commencing on the occurrence of a Potential Change in Control and ending upon the   occurrence of a Change in Control or, if earlier (i) with respect to a Potential Change in   Control occurring pursuant to Section 15(R)(I), immediately upon the abandonment or   termination of the applicable agreement, (ii) with respect to a Potential Change in   Control occurring pursuant to Section 15(R)(II), immediately upon a public   announcement by the applicable party that such party has abandoned its intention to   take or consider taking actions which if consummated would result in a Change in   Control or (iii) with respect to a Potential Change in Control occurring pursuant to   Section 15(R)(III) or (IV), upon the one year anniversary of the occurrence of such   Potential Change in Control (or such earlier date as may be determined by the Board).      (T) "Retirement" shall be deemed the reason for the termination by the   Executive of the Executive's employment if such employment is terminated in   accordance with the Company's retirement policy, including early retirement, generally   applicable to its salaried employees.      (U) "Severance Payments" shall have the meaning set forth in Section   6.1 hereof.      (V) "Term" shall mean the period of time described in Section 2 hereof   (including any extension, continuation or termination described therein).        





 







Exhibit 10.1         - 18 -   (W) "Total Payments" shall mean those payments described in Section   6.2 hereof.         TALEN ENERGY CORPORATION            By /s/ Stuart Graham  January 11, 2016    Stuart Graham  Date   Chairman            /s/ Paul Farr  January 11, 2016    Paul Farr Date