Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.10

PERFORMANCE AWARD AGREEMENT

THIS PERFORMANCE AWARD AGREEMENT (this “Agreement”) is made as of the 6th day of
March, 2008, between DYNEGY INC., a Delaware corporation (“Dynegy”), and all of its Affiliates
(collectively, the “Company”), and Jason Hochberg (“Employee”). A copy of the Dynegy Inc. 2000
Long Term Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part of
this Agreement as if fully set forth herein. Unless the context otherwise requires, all terms that
are not defined herein but which are defined in the Plan shall have the same meaning given to them
in the Plan when used herein.

1. The Grant. The Compensation and Human Resources Committee of the Board of
Directors (the “Committee”) granted to Employee on March 6, 2008 (“Effective Date”), a Performance
Award of 3,500 performance units, each of which has a designated value of $100 and represents the
right to receive an amount payable in the form of cash or shares of Dynegy’s Class A Common Stock
(a “Share” or “Shares”), as determined in the discretion of the Committee. Employee acknowledges
receipt of a copy of the Plan, and agrees that this Performance Award shall be subject to all of
the terms and provisions of the Plan, including future amendments thereto, if any, pursuant to the
terms thereof, and to all of the terms and conditions of this Agreement. If it is subsequently
determined by the Committee, in its sole discretion, that the terms and conditions of this
Agreement and/or the Plan are not compliant with Code Section 409A, or any Treasury regulations or
Internal Revenue Service guidance promulgated thereunder, this Agreement and/or the Plan may be
amended accordingly.

2. Performance Period and Performance Goals. Subject to the provisions of Section 5
of this Agreement, the performance period for purposes of determining whether the Performance Award
will be paid shall be March 6, 2008 through March 6, 2011 (the “Performance Period”). The
performance goals for purposes of determining whether, and the extent to which, the Performance
Award will be paid are set forth in Exhibit 1 to this Agreement, which Exhibit is made a
part of this Agreement. Notwithstanding the foregoing, the Committee shall have discretion to
adjust the performance goals to reflect actions undertaken in the best interest of the Company and
its shareholders, including, but not limited to, strategic transactions affecting the performance
goals as well as recapitalizations, reorganizations, mergers, consolidations, split-ups,
split-offs, spin-offs, exchanges or other relevant changes in capitalization or structure of the
Company.

3. Payment. Subject to the provisions of Sections 4 and 5 of this Agreement, after
the Performance Period, the Performance Award shall be paid as soon as practicable after the
Committee determines whether and to what extent the performance goals have been achieved for the
Performance Period in accordance with the terms set forth in Exhibit 1 to this Agreement;
provided, however, that any such payment shall be made no later than December 31, 2011.

4. Termination. The Performance Award and the Employee’s right to receive any cash or
Shares hereunder will automatically and without notice terminate and become null and void upon
Employee’s termination of employment with the Company prior to the Performance Award payment date,
except that:

 

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	 	(a)	 	if Employee’s termination of employment is by reason of:

	 	(1)	 	death,

	 
	 	(2)	 	retirement by Employee following (A)
the date on which such Employee has reached sixty (60) years of
age and (B) at least ten (10) years of service as an employee
of the Company, or

	 
	 	(3)	 	Involuntary Termination (as defined in
the Dynegy Inc. Executive Severance Pay Plan, as amended and
restated effective January 1, 2008) or a mutually satisfactory
resignation as determined by the Committee in its sole
discretion, or

	 
	 	(4)	 	a Change in Control Termination
occurring in connection with, but in no event earlier than
sixty (60) days prior to, a Change in Control, or

	 	(b)	 	if Employee is determined to be disabled (as defined in the
Company’s long term disability program or the plan in which Employee is a
participant or, if Employee does not participate in any such plan, as defined
in the Dynegy Inc. Long Term Disability Plan, as amended, or the successor plan
thereto),

Employee shall be treated as if he had been continuously employed by the Company through the
Performance Award payment date. In such case, Employee or Employee’s legal representative, or the
person, if any, who acquired the Performance Award by bequest or inheritance or by reason of the
death of Employee, shall be entitled to receive any payment with respect to the Performance Award
in accordance with this Agreement; provided, however, that if Employee’s termination of employment
is for the reason described in Sections 4(a)(3) or (4), any such payment shall be prorated by
multiplying the payment by a fraction, the numerator of which shall be the number of calendar days
that elapsed between the date of Employee’s termination and the Effective Date and the denominator
of which shall be 1,080 but in no case shall such fraction be greater than one (1).

For purposes of this Agreement, the term “Cause” shall mean, and hence arise where, as
determined by the Committee in its sole discretion, Employee (i) has been convicted of a
misdemeanor involving moral turpitude or a felony; (ii) has failed to substantially perform the
duties of such Employee to the Company (other than such failure resulting from Employee’s
incapacity due to physical or mental condition) which results in a materially adverse effect upon
the Company, financial or otherwise; (iii) has refused without proper legal reason to perform
Employee’s duties and responsibilities to the Company; or (iv) has breached any material corporate
policy maintained and established by the Company that is applicable to Employee, provided such
breach results in a materially adverse effect upon the Company, financial or otherwise. In
addition, the term “Change in Control Termination” shall mean Employee’s employment is terminated by the Company (or a successor thereto) without Cause, or by Employee
following: (A) a significant diminution in Employee’s responsibilities, authority or duties; (B) a
material reduction in Employee’s base salary; or (C) relocation of Employee’s position outside the
Houston, Texas metropolitan area, all as determined by the Committee in its sole discretion.

 

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5. Change In Control. In the event a “Change in Control” (as defined below) occurs
during the Performance Period, provided the ending Share price, as determined in accordance with
this Section 5, would entitle Employee to receive a Performance Award based upon the performance
goals set forth in Exhibit 1 to this Agreement, Employee shall receive a payment with
respect to the Performance Award, which shall be determined by using either, as applicable (a) the
agreed price per Share received by the shareholders of Dynegy as a result of the Change in Control
transaction, or if there is no agreed price per Share, then (b) the average closing Share price for
the twenty (20) consecutive trading days immediately preceding the effective date of the Change in
Control, as the ending Share price for the Performance Period. Such payment, if any, shall be made
regardless of whether Employee’s employment with the Company is terminated (other than For Cause)
on or after the effective date of such Change in Control, and shall be made in the form of cash to
Employee as soon as administratively feasible but no later than the later of December 31 of the
calendar year in which the Change in Control occurs or the 15th day of the third month
following the effective date of the Change in Control. The Performance Period shall end as of the
effective date of a Change in Control, and any Performance Award payments hereunder shall only be
made in accordance with this Section 5.

For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the
following events: (1) a merger of Dynegy with another entity, a consolidation involving Dynegy, or
the sale of all or substantially all of the assets or equity interests of Dynegy to another entity
if, in any such case, (A) the holders of equity securities of Dynegy immediately prior to such
event do not beneficially own immediately after such event equity securities of the resulting
entity entitled to fifty-one percent (51%) or more of the votes then eligible to be cast in the
election of directors (or comparable governing body) of the resulting entity in substantially the
same proportions that they owned the equity securities of Dynegy immediately prior to such event or
(B) the persons who were members of the Board immediately prior to such event do not constitute at
least a majority of the board of directors of the resulting entity immediately after such event;
(2) the dissolution or liquidation of Dynegy, but excluding a reorganization pursuant to chapter 11
of Title 11, U.S. Code, as amended; (3) a circumstance where any person or entity, including a
“group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or
control (including, without limitation, power to vote) of fifty percent (50%) or more of the
combined voting power of the outstanding securities of, (A) if Dynegy has not engaged in a merger
or consolidation, Dynegy, or (B) if Dynegy has engaged in a merger or consolidation, the resulting
entity; (4) circumstances where, as a result of or in connection with, a contested election of
directors, the persons who were members of the Board immediately before such election shall cease
to constitute a majority of the Board; or (5) the Board (or the Committee) adopts a resolution
declaring that a Change in Control has occurred. For purposes of the “Change in Control”
definition, (A) “resulting entity” in the context of an event that is a merger, consolidation or
sale of all or substantially all of the subject assets or equity interests shall mean the surviving
entity (or acquiring entity in the case of an asset or equity interest sale), unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary
of another entity and the holders of common stock of Dynegy receive capital stock of such other
entity in such transaction or event, in which event the resulting entity shall be such other
entity, and (B) subsequent to the consummation of a merger or consolidation that does not
constitute a Change in Control, the term “Dynegy” shall refer to the resulting entity and the term
“Board” shall refer to the board of directors (or comparable governing body) of the resulting
entity.

 

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6. Status of Stock. Employee agrees that any Shares distributed pursuant to this
Agreement will not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. Employee also agrees that (a) the
certificates representing the Shares may bear such legend or legends as the Committee in its sole
discretion deems appropriate in order to assure compliance with applicable securities laws and (b)
the Company may refuse to register the transfer of the Shares on the stock transfer records of the
Company, and may give related instructions to its transfer agent, if any, to stop registration of
such transfer, if such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law.

7. Employment Relationship. For purposes of this Agreement, Employee shall be
considered to be in the employment of the Company as long as Employee remains an employee of the
Company or an Affiliate (as such term is defined in the Plan). Nothing in the adoption of the Plan
or the grant of the Performance Award thereunder pursuant to this Agreement shall confer upon
Employee the right to continued employment by the Company or affect in any way the right of the
Company to terminate such employment at any time. Unless otherwise provided in a written
employment agreement or by applicable law, Employee’s employment by the Company shall be on an
at-will basis, and the employment relationship may be terminated at any time by either Employee or
the Company for any reason whatsoever, with or without cause. Any question as to whether and when
there has been a termination of such employment, and the cause of such termination, shall be
determined by the Committee in its sole discretion, and its determination shall be final and
binding on all parties.

8. Withholding of Tax. To the extent that payment of the Performance Award results in
compensation income to Employee for federal or state income tax purposes, the Company is authorized
to withhold from any cash or Shares distributable to the Employee under this Agreement) then or
thereafter payable to Employee any tax required to be withheld by reason of such resulting
compensation income.

9. Miscellaneous.

(a) This grant is subject to all the terms, conditions, limitations and restrictions
contained in the Plan. In the event of any conflict or inconsistency between the terms
hereof and the terms of the Plan, the terms of the Plan shall be controlling. In the event
of any conflict or inconsistency between the terms hereof and the terms of the Dynegy Inc.
Executive Severance Pay Plan, including any amendments or supplements thereto, or the Dynegy
Inc. Severance Pay Plan, including any amendments or supplements thereto, the terms hereof
shall be controlling.

 

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(b) Any notices or other communications provided for in this Agreement shall be
sufficient if in writing. In the case of Employee, such notices or communications shall be
effectively delivered when hand delivered to Employee at his or her principal place of
employment or when sent by registered or certified mail to Employee at the last address
Employee has filed with the Company. In the case of the Company, such notices or
communications shall be effectively delivered when sent by registered or certified mail to
the Company at its principal executive offices.

(c) Employee shall be presumed to have agreed to and accepted the terms of this
Agreement unless he submits a written objection to the Committee or the undersigned officer
within 30 days after the Effective Date.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized as of the date first above written.

	 	 	 	 	 	 	 
	 	 	DYNEGY INC.	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	
	 	 	 	 	 
	 	 	Name:	 	J. Kevin Blodgett
	 
	 	 	 	 	 	 
	 	 	Title:	 	General Counsel & EVP, Administration

 

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Exhibit 1

Performance Goals for Performance Period

(March 6, 2008 — March 6, 2011)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Threshold	 	Target	 	Maximum
	 
	 	Dynegy Inc.	 	 	 	 	 	 
	Performance Goals
	 	Achieved Share Price*	 	$10.00	 	$12.00	 	$14.00
	 	 	 	 	 	 	 	 	 
	 
	 	% of each $100	 	 	 	 	 	 
	Payment Levels**
	 	Performance Unit	 	0%	 	100%	 	200%

*Achieved Share Price shall be the ending Share price equal to the average closing Share price for
the month of February 2011or, if applicable, the ending Share price determined in accordance with
Section 5 of the Agreement in the event of a Change in Control.

**Payment levels will be based upon the actual Achieved Share Price and will be interpolated
between Achieved Share Price goals.

 

6Filed by Bowne Pure Compliance

 

Exhibit 10.11

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as of the 6th day
of March, 2008, between DYNEGY INC., a Delaware corporation (“Dynegy”), and all of its Affiliates
(collectively, the “Company”), and (“Employee”). A copy of the Dynegy Inc. 2000 Long-Term
Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part of this
Agreement as if fully set forth herein. Unless the context otherwise requires, all terms that are
not defined herein but which are defined in the Plan shall have the same meaning given to them in
the Plan when used herein.

1. The Grant. The Compensation and Human Resources Committee of the Board of
Directors (the “Committee”) granted to Employee on March 6th, 2008 (“Effective Date”), as a matter
of separate inducement and not in lieu of any salary or other compensation for Employee’s services,
the right and option to purchase (the “Option”), in accordance with the terms and conditions set
forth in the Plan and in this Agreement, an aggregate number of shares (the “Shares”) of Class A
common stock of Dynegy, $0.01 par value per share (the “Common Stock”), at a price of $7.48 per
share (the “Exercise Price”). Employee acknowledges receipt of a copy of the Plan, and agrees that
the Option shall be subject to all of the terms and provisions of the Plan, including future
amendments thereto, if any, pursuant to the terms thereof, and to all of the terms and conditions
of this Agreement. The Option shall not be treated as an incentive stock option within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The Exercise Price
is, in the judgment of the Committee, not less than one hundred percent (100%) of the Fair Market
Value of a share of the Common Stock on the Effective Date. If it is subsequently determined by
the Committee, in its sole discretion, that the terms and conditions of this Agreement and/or the
Plan are not compliant with Code Section 409A, or any Treasury regulations or Internal Revenue
Service guidance promulgated thereunder, this Agreement and/or the Plan may be amended accordingly.

2. Exercise. Subject to the provisions, limitations and other relevant provisions of
the Plan and of this Agreement, and the earlier expiration of the Option as herein provided,
Employee may exercise the Option to purchase some or all of the Shares as follows:

(a) The Option shall become exercisable in three cumulative equal annual installments
as follows:

(i) on the first anniversary of the Effective Date, the right to
purchase one-third of the aggregate number of Shares shall become
exercisable without further action by the Committee;

(ii) on the second anniversary of the Effective Date, the right to
purchase an additional one-third of the aggregate number of Shares shall
become exercisable without further action by the Committee; and

 

 

 

(iii) on the third anniversary of the Effective Date, the right to
purchase the remaining one-third of the aggregate number of Shares shall
become exercisable without further action by the Committee.

(b) Notwithstanding any other provision of this Agreement, the unexercised portion of
the Option, if any, will automatically and without notice terminate and become null and void
upon the expiration of ten (10) years from the Effective Date of the Option.

(c) Any exercise by Employee of the Option, or portion thereof, shall be conducted by
delivery of an irrevocable notice of exercise to the Company or its designee as provided in
the Plan. In no event shall Employee be entitled to exercise the Option for less than a
whole Share.

(d) Notwithstanding any other provision of this Agreement, upon the occurrence of a
Change in Control, the Option shall become fully vested and immediately exercisable in full
on the date of the Change in Control. For purposes hereof, “Change in Control” shall mean
the occurrence of any of the following events: (i) a merger of Dynegy with another entity, a
consolidation involving Dynegy, or the sale of all or substantially all of the assets or
equity interests of Dynegy to another entity if, in any such case, (A) the holders of equity
securities of Dynegy immediately prior to such event do not beneficially own immediately
after such event equity securities of the resulting entity entitled to fifty-one percent
(51%) or more of the votes then eligible to be cast in the election of directors (or
comparable governing body) of the resulting entity in substantially the same proportions
that they owned the equity securities of Dynegy immediately prior to such event or (B) the
persons who were members of the Board immediately prior to such event do not constitute at
least a majority of the board of directors of the resulting entity immediately after such
event; (ii) the dissolution or liquidation of Dynegy, but excluding a reorganization
pursuant to chapter 11 of Title 11, U.S. Code, as amended; (iii) a circumstance where any
person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange
Act, acquires or gains ownership or control (including, without limitation, power to vote)
of fifty percent (50%) or more of the combined voting power of the outstanding securities
of, (A) if Dynegy has not engaged in a merger or consolidation, Dynegy, or (B) if Dynegy has
engaged in a merger or consolidation, the resulting entity; (iv) circumstances where, as a
result of or in connection with, a contested election of directors, the persons who were
members of the Board immediately before such election shall cease to constitute a majority
of the Board; or (v) the Board (or the Committee) adopts a resolution declaring that a
Change in Control has occurred. For purposes of the “Change in Control” definition, (1)
“resulting entity” in the context of an event that is a merger, consolidation or sale of all
or substantially all of the subject assets or equity interests shall mean the surviving
entity (or acquiring entity in the case of an asset or equity interest sale), unless the
surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of
another entity and the holders of common stock of Dynegy receive capital stock of such other
entity in such transaction or event, in which event the resulting entity shall be such other
entity, and (2) subsequent to the consummation of a merger or consolidation that does not
constitute a Change in Control, the term “Dynegy” shall refer
to the resulting entity and the term “Board” shall refer to the board of directors (or
comparable governing body) of the resulting entity.

 

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3. Termination of Employment. The Option may be exercised only while Employee remains
an employee of the Company and will terminate and cease to be exercisable upon Employee’s
termination of employment with the Company, except that:

(a) if Employee shall die while in the employ of the Company, the Option awarded
hereunder shall immediately vest with respect to all of the remaining Shares and become
fully exercisable without further action by the Committee, and Employee’s legal
representative, or the person, if any, who acquired the Option by bequest or inheritance or
by reason of the death of Employee, may exercise the Option, to the extent not previously
exercised, in respect of any or all such Shares at any time up to and including the date
three (3) years after the date of death, after which date the Option will automatically and
without notice terminate and become null and void; and

(b) if Employee is determined to be disabled (as defined in the Company’s long term
disability program or plan in which Employee is a participant or, if Employee does not
participate in any such plan, as defined in the Dynegy Inc. Long Term Disability Plan, as
amended, or the successor plan thereto), the Option awarded hereunder shall immediately vest
with respect to all of the remaining Shares and become fully exercisable without further
action by the Committee, and Employee may exercise the Option, to the extent not previously
exercised, in respect of any or all such Shares at any time up to and including the date
three (3) years after the date of such determination, after which date the Option will
automatically and without notice terminate and become null and void; and

(c) if Employee’s employment with the Company terminates by reason of retirement by
Employee following (i) the date on which such Employee has reached sixty (60) years of age
and (ii) at least ten (10) years of service as an employee of the Company or its
subsidiaries, the Option awarded hereunder shall continue to become exercisable in
accordance with Section 2(a) of this Agreement, and Employee may exercise the Option, to the
extent not previously exercised, at any time up to and including the date five (5) years
after the date of termination of Employee’s employment by reason of such retirement, or the
end of the option term, whichever is less, after which date the Option will automatically
and without notice terminate and become null and void; and

(d) if Employee’s employment with the Company terminates by reason of dismissal by the
Company for Cause, then the Option, to the extent not previously exercised, will
immediately, automatically and without notice or further action by the Committee, terminate
and become null and void; and

(e) if Employee’s employment with the Company terminates by reason of resignation by
the Employee (except as otherwise provided in Section 3(f) or (g) below) and at a time when
Employee was entitled to exercise the Option, Employee may exercise the Option, to the
extent not previously exercised, with respect to any or all such number
of Shares as to which the Option was exercisable as of the date of Employee’s
termination of employment, at any time up to and including the date ninety (90) days after
the date of termination by reason of such resignation, after which date the Option will
automatically and without notice terminate and become null and void; and

 

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(f) if Employee’s employment with the Company terminates by reason of Involuntary
Termination, as such term is defined below, the Option awarded hereunder shall immediately
vest with respect to all remaining Shares and become fully exercisable without further
action of the Committee, and Employee may exercise the Option, to the extent not previously
exercised, at any time up to and including the date three (3) years after the date of such
termination of employment, after which date the Option will automatically and without notice
terminate and become null and void; and

(g) if Employee’s employment with the Company is terminated as a result of a Change in
Control Termination, as such term is defined below, occurring (i) in connection with, but in
no event earlier than sixty (60) days prior to, a Change in Control or (ii) on or within one
year after the effective date upon which a Change in Control occurs, the Option shall become
fully vested and immediately exercisable in full on the effective date of the Change of
Control, and such Option shall remain exercisable from such date for the lesser of: (A) five
(5) years from the date of such Change in Control; (B) the remaining period of time for
exercise of the Option hereunder (irrespective of any mandatory exercise period specified
herein that would otherwise be triggered by the termination of employment of such Employee);
or (C) such period of time (which period of time may end as early as the consummation of a
“Corporate Change,” as such term is defined in the Plan) as the Committee may determine in
connection with or in contemplation of a Corporate Change in the exercise of its discretion
under the Plan, with respect to which the Committee has the discretion to, among other
things, require the surrender of stock options (which surrender may be in exchange for a
cash payment, if applicable) and to cancel such stock options upon the consummation of a
Corporate Change as further described in the Plan.

(h) For purposes of this Agreement:

“Base Salary” shall mean the regular base salary of Employee but excluding all
bonuses, expense reimbursements, benefits paid under any plan maintained by the
Company and all equity awards of any type.

“Cause” shall mean, and hence arise where, as determined by the Committee in
its sole discretion, Employee (A) has been convicted of a misdemeanor involving
moral turpitude or a felony; (B) has failed to substantially perform the duties of
such Employee to the Company (other than such failure resulting from Employee’s
incapacity due to physical or mental condition) which results in a materially
adverse effect upon the Company, financial or otherwise; (C) has refused without
proper legal reason to perform Employee’s duties and responsibilities to the
Company; or (D) has breached any material corporate policy
maintained and established by the Company that is applicable to Employee,
provided such breach results in a materially adverse effect upon the Company,
financial or otherwise.

 

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“Change in Control Termination” shall mean Employee’s employment is terminated
by the Company (or a successor thereto) without Cause, or by Employee following: (i)
a significant diminution in Employee’s responsibilities, authority or duties; (ii) a
material reduction in Employee’s Base Salary; or (iii) relocation of Employee’s
principal place of employment by 50 miles or more, all as determined by the
Committee in its sole discretion.

“Involuntary Termination” shall have the same meaning as specified in the
Dynegy Inc. Executive Severance Pay Plan (as amended and restated effective January
1, 2008).

4. Registration. The Company intends to register the Shares for issuance under the
Securities Act of 1933, as amended (the “Act”), and to keep such registration effective throughout
the period the Option is exercisable. In the absence of such effective registration or an
available exemption from registration under the Act, issuance of the Shares will be delayed until
registration of such shares is effective or an exemption from registration under the Act is
available. The Company intends to use its best efforts to ensure that no such delay will occur.
In the event exemption from registration under the Act is available upon an exercise of the Option,
Employee (or the person permitted to exercise the Option in the event of Employee’s death or
incapacity), if requested by the Company to do so, will execute and deliver to the Company, in
writing, such agreements and other documents containing such provisions as the Company may require
to assure compliance with applicable securities laws.

Employee agrees that the Shares will not be sold or otherwise disposed of in any manner which
would constitute a violation of any applicable federal or state securities laws. Employee also
agrees that (a) the certificates representing the Shares may bear such legend or legends as the
Committee in its sole discretion deems appropriate in order to assure compliance with applicable
securities laws and (b) the Company may refuse to register transfer of the Shares on the stock
transfer records of the Company, and may give related instructions to its transfer agent, if any,
to stop registration of such transfer, if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities law.

5. Employment Relationship. For purposes of this Agreement, Employee shall be
considered to be in the employment of the Company as long as Employee remains an employee of (a)
the Company, (b) an Affiliate (as such term is defined in the Plan) or (c) a corporation (or a
parent or subsidiary of such corporation) assuming or substituting a new option for the Option.
Any question as to whether and when there has been a termination of such employment, and the cause
of such termination, shall be determined by the Committee in its sole discretion, and its
determination shall be final and binding on all parties.

 

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6. Withholding Taxes. By Employee’s acceptance hereof, Employee hereby (a) agrees to
reimburse the Company or any Affiliate by which Employee is employed for any federal, state or
local taxes required by any government to be withheld or otherwise deducted by such corporation in
respect of Employee’s exercise of the Option, (b) authorize the Company or any Affiliate by which
Employee is employed to withhold from any cash compensation paid to Employee or in Employee’s
behalf, an amount sufficient to discharge any federal, state and local taxes imposed on the
Company, or the Affiliate by which Employee is employed, and which otherwise has not been
reimbursed by Employee, in respect of Employee’s exercise of the Option and (c) agrees that the
corporation by which Employee is employed, may, in its discretion, hold the stock certificates to
which Employee is entitled upon exercise of the Option, as security for the payment of the
aforementioned withholding tax liability, until cash sufficient to pay that liability has been
accumulated, and may, in its discretion, effect such withholding by retaining Shares issuable upon
the exercise of the Option having a Fair Market Value on the date of exercise which is equal to the
amount to be withheld.

7. Miscellaneous.

(a) This grant is subject to all the terms, conditions, limitations and restrictions
contained in the Plan. In the event of any conflict or inconsistency between the terms
hereof and the terms of the Plan, the terms of the Plan shall be controlling. In the event
of any conflict or inconsistency between the terms hereof and the terms of the Dynegy Inc.
Executive Severance Pay Plan, including any amendments or supplements thereto, the terms
hereof shall be controlling.

(b) This grant is not a contract of employment and the terms of Employee’s employment
shall not be affected hereby or by any agreement referred to herein except to the extent
specifically so provided herein or therein. Nothing herein shall be construed to impose any
obligation on the Company or on any Affiliate to continue Employee’s employment, and it
shall not impose any obligation on Employee’s part to remain in the employ of the Company or
of any Affiliate.

(c) All references in this Agreement to any “corporation” shall include a corporation,
a general partnership, a joint venture, a limited partnership, a business trust or any other
lawful business entity.

(d) Any notices or other communications provided for in this Agreement shall be
sufficient if in writing. In the case of Employee, such notices or communications shall be
effectively delivered when hand delivered to Employee at his or her principal place of
employment or when sent by registered or certified mail to Employee at the last address
Employee has filed with the Company. In the case of the Company, such notices or
communications shall be effectively delivered when sent by registered or certified mail to
the Company at its principal executive offices.

[Remainder of page intentionally left blank]

 

6

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and Employee has agreed to and accepted the terms of this Agreement*,
all as of the date first above written.

	 	 	 	 	 
	 	DYNEGY INC.

 	 
	 	By:  	/s/ J. Kevin Blodgett
 	 
	 	 	Name:  	J. Kevin Blodgett 	 
	 	 	Title:  	General Counsel & EVP, Administration 	 
	 

	 	 	 
	*	 	Employee has agreed to and accepted the terms of this Agreement utilizing online grant acceptance
capabilities with E*Trade Financial, the Company’s stock option administrator.

 

7

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