Document:

EX-10.33

 

Exhibit 10.33

EMPLOYMENT AGREEMENT

Between

NRG Energy, Inc.

and

David W. Crane

     THIS AGREEMENT is made as of March 3, 2006, between NRG Energy, Inc. (the “Company”), and
David W. Crane (“Executive”).

     WHEREAS, the Company has employed the Executive as its President and Chief Executive Officer
since December 1, 2003, pursuant to the terms of an Employment Agreement (“Original Agreement”),
scheduled to expire by its terms on December 1, 2006; and

     WHEREAS, the parties wish to extend and modify the Original Agreement to more accurately
reflect current circumstances.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Employment. The Company shall continue to employ Executive, and Executive hereby
agrees to continue in employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on March 3, 2006 (the “Effective Date”) and ending as provided
in Section 5 hereof (the “Employment Period”).

 

 

     2. Position and Duties.

     (a) During the Employment Period, Executive shall serve as the President and Chief Executive
Officer (“CEO”) of the Company and shall have the normal duties, responsibilities, functions and
authorities customarily exercised by the President and CEO of a company of similar size and nature
as the Company. During the Employment Period, Executive shall render such administrative,
financial and other executive and managerial services to the Company and its affiliates which are
consistent with Executive’s position, as the Board of Directors of the Company (the “Board”) may
from time to time direct.

     (b) During the Employment Period, Executive shall report to the Board and shall devote his
best efforts and his full business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs of the Company.
Executive shall perform his duties, responsibilities and functions to the Company hereunder to the
best of his abilities in a diligent, trustworthy, professional and efficient manner and shall
comply with the Company’s policies and procedures in all material respects. In performing his
duties and exercising his authority under this Agreement, Executive shall support and implement the
business and strategic plans approved from time to time by the Board. During the Employment
Period, Executive shall not serve as an officer or director of, or otherwise perform services for
compensation for, any other entity without the prior written consent of the Board. Executive may
serve as an officer or director of, or otherwise participate in, purely educational, welfare,
social, religious and civic organizations so long as such activities do not interfere with
Executive’s employment. Nothing contained herein shall preclude Executive from (i) engaging in
charitable and community activities; (ii) participating in industry and trade organization
activities; (iii) managing his and his family’s personal investments and

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affairs; and (iv) delivering lectures, fulfilling speaking engagements or teaching at
educational institutions; provided, that such activities do not materially interfere with the
regular performance of his duties and responsibilities under this Agreement.

          3. Compensation and Benefits.

          (a) Beginning on the Effective Date, and ending on December 31, 2006, Executive’s annual base
salary shall be One Million Dollars ($1,000,000.00). For each subsequent annual period thereafter,
the Executive’s annual base salary shall be reviewed by the Board, which shall determine whether to
grant an increase (such initial annual base salary and the annual base salary as determined and
adjusted upward from time to time by the Board are referred to herein as the “Base Salary”). The
Base Salary shall be payable by the Company in regular installments in accordance with the
Company’s general payroll practices (in effect from time to time) but in any event no less
frequently than monthly. For purposes of this Agreement, the Base Salary shall not include any
other type of compensation or benefit paid or payable to the Executive.

          (b) Bonuses and Incentive Compensation.

          (i) Annual Bonus. Beginning for fiscal year 2006 and for each fiscal year
thereafter during the Employment Period, based on achievement of criteria determined by the
Board as soon as administratively practicable following the beginning of each such fiscal
year with input from Executive, Executive will be entitled to an annual bonus with a target
amount equal to 100% of the Executive’s then Base Salary (the “Annual Bonus”). The Company
shall pay the Annual Bonus in a single cash lump-sum after the end of the Company’s fiscal
year in accordance with procedures established

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by the Board, but in no event later than two and one-half months after the end of such
fiscal year.

          (ii) Maximum Bonus. In addition to the Annual Bonus referenced in paragraph
3(b)(i), beginning for fiscal year 2006 and for each fiscal year thereafter during the
Employment Period, based on achievement of criteria determined by the Board as soon as
administratively practicable following the beginning of each such fiscal year with input
from Executive, Executive shall be eligible to receive a “maximum bonus” in an amount up to,
but not exceeding, 100% of Executive’s then Base Salary (the “Maximum Bonus”). The Company
shall pay the Maximum Bonus in a single cash lump-sum following the end of the Company’s
fiscal year in accordance with procedures established by the Board, but in no event later
than two and one-half months after the end of such fiscal year.

          (iii) Long Term Incentive. The Company has previously provided Executive with
a combination of restricted stock or units (“restricted stock”) and stock options (the
“Executive LTIP”), pursuant to paragraph 3(b)(iv) of the Original Agreement, which is
incorporated herein by reference. The Executive LTIP shall be governed by the terms of
paragraph 3(b)(iv) of the Original Agreement and the applicable award agreements entered
into by the Company and the Executive. In addition, Executive shall be eligible to
participate in the NRG Energy, Inc. Long-Term Incentive Plan, on such terms and conditions
as are stated therein.

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          (c) During the Employment Period, the Company shall promptly reimburse Executive for all
reasonable business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the Company’s policies in effect
from time to time with respect to travel, entertainment and other business expenses, subject to the
Company’s requirements with respect to reporting and documentation of such expenses. The Company
will promptly reimburse Executive for reasonable expenses incurred for annual tax return
preparation, and ongoing tax advice and financial planning, and for reasonable legal expenses
incurred in connection with negotiating this Agreement and the other agreements referred to herein.

          (d) In addition to the Base Salary and any bonuses and incentives payable to Executive
pursuant to this Section 3, Executive shall also be entitled to the following benefits during the
Employment Period, unless otherwise modified by the Board:

          (i) participation in the Company’s retirement plans, health and welfare plans and
disability insurance plans, under the terms of such plans and to the same extent and under
the same conditions such participation and coverages are provided to other senior management
of the Company;

          (ii) term life insurance with a death benefit of $7.75 million through the continuation
of the term life insurance provided to Executive by his former employer (other than
adjustable rate life insurance) immediately prior to the Executive’s employment with the
Company;

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          (iii) prompt reimbursement of the costs, not to exceed $10,000 per year, Executive
incurs in obtaining additional disability insurance coverage with a monthly disability
benefit of up to $30,000;

          (iv) five weeks paid vacation each calendar year; and

          (v) coverage under the Company’s director and officer liability insurance policy.

          4. Board Membership. With respect to all regular elections of directors during the
Employment Period, the Company shall nominate, and use its reasonable efforts to cause the election
of, Executive to serve as a member of the Board. Effective upon the termination or expiration of
the Employment Period, Executive shall resign as a director of the Company and its affiliates, as
the case may be.

          5. Termination.

          (a) The Employment Period shall end on December 31, 2008, provided, however, that the
Employment Period shall be automatically renewed for successive one-year terms thereafter on the
same terms and conditions set forth herein unless either party provides the other party with notice
that it has elected not to renew the Employment Period at least 90 days prior to the end of the
initial Employment Period or any subsequent extension thereof. Notwithstanding the foregoing, (i)
the Employment Period shall terminate immediately upon Executive’s resignation (with or without
“Good Reason,” as defined in the Company’s Executive Change in Control and General Severance Plan,
as in effect from time to time (the “Severance Plan”)), death or Disability (as defined herein) or
(ii) the Employment Period may be terminated by the

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Company at any time prior to such date for “Cause” (as defined in the Severance Plan) or
without Cause. Except as otherwise provided herein, any termination of the Employment Period by
the Company shall be effective as specified in a written notice from the Company to Executive, but
in no event more than 30 days from the date of such notice.

          (b) For purposes of this Agreement, the definition of Good Reason shall also include the
following:

          (i) any failure by the Company to comply with any of the provisions of this Agreement,
other than any isolated, insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after receipt of written notice thereof given
by the Executive; or

          (ii) any failure to elect Executive to the Board at any regular election of directors
during the Employment Period, or any removal of Executive from the Board, for any reason,
during the Employment Period; or

          (iii) a change in reporting structure of the Company where Executive is required to
report to someone other than the Board.

          6. Severance.

          (a) Termination without Cause or for Good Reason.

          (i) In the event of Executive’s termination of employment with the Company (i) by the
Company without Cause, (ii) by Executive for Good Reason or (iii) if the Company notifies
Executive pursuant to Section 5 that it has elected not to renew this Agreement after the
initial term or any subsequent one-year term, Executive shall be

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entitled to the severance benefits set forth below in Section 6(a)(ii); provided,
however, if such termination of employment or election of non-renewal occurs within
twenty-four (24) months immediately following a “Change in Control” (as defined in the
Severance Plan) of the Company, Executive shall in lieu of the severance benefits provided
under Section 6(a)(ii) hereof become entitled to the severance benefits set forth below in
Section 6(a)(iii).

          (ii) As a condition to the payment of the following severance benefits, the Executive
shall execute and deliver the “Release” in the form attached hereto as Exhibit A, in
consideration for which the Company agrees to the following:

	 	(A)	 	The Company shall pay Executive, within 45 days
after termination of employment, a lump-sum cash payment in an amount
equal to two times the Executive’s annual Base Salary (as in effect at
the date of Executive’s termination determined without regard to any
reduction in such Base Salary constituting Good Reason).
	 
	 	(B)	 	The Company shall pay Executive, within 45 days
after termination of employment, a lump-sum payment in an amount equal
to 50% of his target Annual Bonus then in effect (excluding the Maximum
Bonus but determined without regard to any reduction in such target
Annual Bonus constituting Good Reason) pro-rated for the number of days
during such year that Executive was employed by the Company.

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	 	(C)	 	All restricted stock, stock options and other
equity awards granted under the Executive LTIP, described in paragraph
3(b)(iv) of the Original Agreement, shall vest in full on the date of
such termination of employment, and all stock options shall continue to
be exercisable for the remainder of their stated terms.
	 
	 	(D)	 	For eighteen (18) months from the date of
termination (the “Benefits Continuation Period”), the Company shall
arrange to provide Executive and his dependents, at the Company’s cost,
medical and dental coverage providing substantially similar benefits to
those which Executive and his dependents were receiving immediately
prior to such date. Notwithstanding the foregoing, the period for which
Executive’s eligibility for COBRA benefits continuation coverage is
measured shall commence upon Executive’s termination of employment and
shall run concurrently with the Benefits Continuation Period.
	 
	 	(E)	 	The Company shall pay Executive the amounts
described in Section 6(d).

           (iii)   As a condition to the payment of the following severance benefits, the Executive
shall execute and deliver the “Release” in the form attached hereto as Exhibit A, in
consideration for which the Company agrees to the following:

	 	(A)	 	The Company shall pay Executive, within 45 days
after termination of employment, a lump-sum cash payment in an

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	 	 	 	amount equal to two and ninety-nine one-hundredths (2.99) times the
sum of the following: (x) Executive’s annual Base Salary (as in
effect at the date of Executive’s termination determined without
regard to any reduction in such Base Salary constituting Good Reason)
and (y) Executive’s target Annual Bonus (excluding the Maximum Bonus
but determined without regard to any reduction in such target Annual
Bonus constituting Good Reason) for the year in which the termination
of employment occurs.
	 
	 	(B)	 	The Company shall pay Executive, within 45 days
after termination of employment, a lump-sum cash payment in an amount
equal to Executive’s then current target Annual Bonus (excluding the
Maximum Bonus but determined without regard to any reduction in such
target Annual Bonus constituting Good Reason) for the year in which the
termination of employment occurs, adjusted on a pro rata basis based on
the number of days Executive was actually employed during the year in
which the termination of employment occurs.
	 
	 	(C)	 	All restricted stock, stock options and other
equity awards granted under the Executive LTIP, described in paragraph
3(b)(iv) of the Original Agreement, shall vest in full on the date of
such termination of employment, and all stock options shall continue to
be exercisable for the remainder of their stated terms.

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	 	(D)	 	For eighteen (18) months from the date of
termination (the “Change in Control Benefits Continuation Period”), the
Company shall arrange to provide Executive and his dependents, at the
Company’s cost, medical and dental coverage providing substantially
similar benefits to those which Executive and his dependents were
receiving immediately prior to such date. Notwithstanding the
foregoing, the period for which Executive’s eligibility for COBRA
benefits continuation coverage is measured shall commence upon
Executive’s termination of employment and shall run concurrently with
the Change in Control Benefits Continuation Period.
	 
	 	(E)	 	The Company shall pay Executive the amounts
described in Section 6(d).

          (iv) Notwithstanding anything in this Section 6(a) to the contrary, the benefits
provided pursuant to Section 6(a)(ii)(D) and Section 6(a)(iii)(D) shall be discontinued
prior to the end of the Benefits Continuation Period or Change in Control Benefits
Continuation Period, as applicable, in the event Executive receives substantially similar
benefits from a subsequent employer, as determined by the Company in good faith. Executive
shall be deemed to have a duty to inform the Company as to the terms and conditions of any
subsequent employment and the corresponding benefits earned from such employment, and shall
provide, or cause to be provided, to the Company in writing correct, complete and timely
information concerning the same.

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          (v) Notwithstanding anything herein to the contrary, if Executive is a “specified
employee” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”)) as of his termination of employment, then to the extent necessary to
comply with the requirements of Section 409A of the Code, no payment due Executive under
this Section 6(a) shall be made earlier than the date that is six months following
Executive’s termination of employment, at which time all payments that would otherwise have
been made within that six month period shall be paid to Executive in a lump sum.

          (b) Termination for Cause or Voluntary Resignation. In the event Executive’s
employment with the Company is terminated (i) by the Board for Cause (as defined herein), or (ii)
by Executive’s resignation from the Company for any reason other than Good Reason or Disability the
Company agrees to the following:

	 	(A)	 	The Company shall pay Executive the amounts
described in Section 6(d).
	 
	 	(B)	 	The Company shall treat all restricted stock,
stock options and other equity awards outstanding under the Executive
LTIP or any other Company equity plans in accordance with the terms of
the plans or agreements under which such awards were created or
maintained. If Executive resigns from the Company for any reason on or
after November 10, 2006, all stock options granted under the Executive
LTIP will remain exercisable for the remainder of their stated terms.

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          (c) Death or Disability. In the event that Executive’s employment with the Company is
terminated as a result of Executive’s death or Disability, the Company agrees to the following:

	 	(A)	 	The Company shall pay Executive, or his estate
or legal representative, within fifteen (15) days after such
termination, a lump-sum payment in an amount equal to 50% of the target
Annual Bonus then in effect (excluding the Maximum Bonus but determined
without regard to any reduction in such target Annual Bonus
constituting Good Reason) pro-rated for the number of days during such
year that Executive was employed by the Company. Any stock options
granted under the Executive LTIP that have vested will remain
exercisable for the remainder of their stated terms.
	 
	 	(B)	 	If the Executive is terminated as a result of
his death or Disability prior to December 1, 2006, his “restricted
stock” (as defined above) shall vest on a pro rata basis (based on the
ratio of (x) the number of complete months beginning on the
Commencement Date (as such term is defined in the Original Agreement)
and ending on the date of Executive’s termination of employment to (y)
thirty-six (36)).
	 
	 	(C)	 	The Company shall treat all stock options under
the Executive LTIP or other equity under any other Company plans in

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	 	 	 	accordance with the terms of the plans or agreements under which such
awards were created or maintained.
	 
	 	(D)	 	The Company shall pay Executive the amounts
described in Section 6(d).

For purposes of this Section 6(c), “Disability” shall mean “disabled” as defined in Section
409A(a)(2)(C) of the Code and the regulations promulgated thereunder. 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 Executive and authorizing such
medical doctor or such other health care specialist to discuss Executive’s condition with the
Company).

          (d) In the case of any termination of Executive’s employment with the Company, Executive or
his estate or legal representative shall be entitled to receive from the Company (i) Executive’s
Base Salary through the date of termination to the extent not theretofore paid, (ii) to the extent
not theretofore paid and not otherwise addressed in this Section 6, the amount of any bonus,
incentive compensation, deferred compensation and other compensation earned or accrued by Executive
as of the date of termination under any compensation and benefit plans, programs or arrangements
maintained in force by the Company (for this purpose, Executive’s Annual Bonus, if any, for any
fiscal year shall be deemed to have accrued on the last day of such fiscal year), (iii) any
vacation pay, expense reimbursements and other cash entitlements accrued by Executive, in
accordance with Company policy, as of the date of termination to the extent not theretofore paid,
and (iv) all benefits accrued by Executive under all benefit plans and qualified and nonqualified
retirement, pension, 401(k) and similar plans and arrangements of the

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Company, in such manner and at such time as are provided under the terms of such plans and
arrangements. In the event Executive becomes entitled to receive the benefits described in Section
6(a) hereof, such benefits shall be in lieu of other compensation to which Executive may have been
entitled pursuant to all other agreements and plans, including without limitation, the Severance
Plan.

          (e) No Other Payments. Except as provided in (a), (b), (c) or (d) above, all of
Executive’s rights to salary, bonuses, employee benefits and other compensation hereunder which
would have accrued or become payable after the termination or expiration of the Employment Period
shall cease upon such termination or expiration, other than those expressly required under
applicable law.

          (f) No Mitigation, Et Cetera. In the event of Executive’s termination of employment
for whatever reason or in the event of breach of this Agreement by the Company, Executive shall be
under no obligation to seek other employment or to otherwise mitigate his damages.

          (g) Offset. The Company may offset, to the fullest extent of the law, any amounts due
to the Company from the Executive, or advanced or loaned to the Executive by the Company, from any
monies owed to Executive or Executive’s estate by reason of his termination of employment.

          7. Indemnification.

          (a) The Company agrees that (i) if Executive is made a party, or is threatened to be made a
party, to any threatened or actual action, suit or proceeding, whether civil, criminal,

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administrative, investigative, appellate or other (each, a “Proceeding”) by reason of the fact
that he is or was a director, officer, employee, agent, manager, consultant or representative of
the Company or is or was serving at the, request of the Company as a director, officer, member,
employee, agent, manager, consultant or representative of another entity or (ii) if any claim,
demand, request, investigation, dispute, controversy, threat, discovery request or request for
testimony or information (each, a “Claim”) is made, or threatened to be made, that arises out of or
relates to Executive’s service in any of the foregoing capacities, then Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent legally permitted or authorized
by the Company’s certificate of incorporation, bylaws or Board resolutions or, if greater, by the
laws of the State of Delaware, against any and all costs, expenses, liabilities and losses
(including, without limitation, attorney’s fees, judgments, interest, expenses of investigation,
penalties, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
incurred or suffered by the Executive in connection therewith, and such indemnification shall
continue as to Executive even if he has ceased to be a director, member, employee, agent, manager,
consultant or representative of the Company or other entity and shall inure to the benefit of
Executive’s heirs, executors and administrators. The Company shall advance to Executive all costs
and expenses incurred by him in connection with any such Proceeding or Claim within 15 days after
receiving written notice requesting such an advance. Such notice shall include, to the extent
required by applicable law, an undertaking by Executive to repay the amount advanced if he is
ultimately determined not to be entitled to indemnification against such costs and expenses.

          (b) Neither the failure of the Company (including the Board, independent legal counsel or
stockholders) to have made a determination in connection with any request for

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indemnification or advancement under Section 7(a) that Executive has satisfied any applicable
standard of conduct nor a determination by the Company (including the Board, independent legal
counsel or stockholders) that Executive has not met any applicable standard of conduct, shall
create a presumption that Executive has or has not met an applicable standard of conduct.

          8. Gross-up. In the event that any payment or benefit made or provided to or for the
benefit of Executive in connection with this Agreement 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
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 Section 8 shall be made by an
independent auditor (the “Auditor”) jointly selected by the parties and paid by the Company.
Unless Executive agrees otherwise in writing, the Auditor shall be a nationally recognized United
States public accounting firm that has not, during the two 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 accounting
firm and those two firms shall jointly select the accounting firm to serve as the Auditor. The
parties shall cooperate with each other in connection with any Proceeding or Claim relating to the
existence or amount of any liability for Excise Tax. All expenses relating to any such Proceeding
or Claim (including attorneys’ fees

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and other expenses incurred by Executive in connection therewith) shall be paid by the Company
promptly upon demand by Executive, and any such payment shall be subject to a Gross-Up Payment
under this Section 8 in the event that Executive is subject to Excise Tax on such payment. This
Section 8 shall apply irrespective of whether a Change of Control has occurred.

          9. Confidential Information.

          (a) 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 Executive’s duties to the Company or as may be
compelled by law or appropriate legal process, 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 Parry Information becomes generally known
to and available for use by the public other than as a result of Executive’s acts or omissions.
Except in the course of Executive’s duties to the Company or as may be compelled by law or
appropriate legal process, Executive will not, during his employment by 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. Executive shall deliver to the Company at the termination or expiration of the Employment
Period, 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

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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. Notwithstanding the foregoing, the
Company hereby waives the right to assert an “inevitable disclosure” argument in any legal
proceeding against Employee after the termination of his employment.

          (b) Executive shall be prohibited from using or disclosing any confidential information or
trade secrets that Executive may have learned through any prior employment. If at any time during
his employment with the Company or any of its affiliates, Executive believes he is being asked to
engage in work that will, or will be likely to, jeopardize any confidentiality, or other
obligations Executive may have to former employers, Executive shall immediately advise the Board so
that Executive’s duties can be modified appropriately. Executive represents and warrants to the
Company that Executive took nothing with him which belonged to any former employer when Executive
left his prior position and that Executive has nothing that contains any information which belongs
to any former employer. If at any time Executive discovers this is incorrect, Executive shall
promptly return any such materials to Executive’s former employer. The Company does not want any
such materials, and Executive shall not be permitted to use or refer to any such materials in the
performance of Executive’s duties hereunder.

          10. Intellectual Property, Inventions and Patents. 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

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affiliates’ actual or anticipated business, research and development or existing or future
products or services and which are conceived, developed or made by Executive (whether alone or
jointly with others) while employed by the Company and its affiliates (“Work Product”), belong to
the Company or such affiliate. 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 Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments). Executive
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 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.

          11. Non-Compete, Non-Solicitation.

          (a) In further consideration of the compensation to be paid to Executive hereunder, 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, Executive agrees that, during the
Employment Period and for one (1) year thereafter (the “Noncompete Period”), he 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 a business that competes with any businesses of the Company or its
affiliates, as such businesses exist or are in

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process during the Employment Period or on the date of the termination or expiration of the
Employment Period, 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 Executive from
being a passive owner of not more than 2% of the outstanding stock of any class of a corporation
which is publicly traded, so long as Executive has no active participation in the business of such
corporation. Notwithstanding the foregoing, the provisions of this Section 11(a) shall not apply
in the case of any material breach of the Company’s obligations under Section 6 or Section 7 which
remains uncured for more than twenty (20) days after notice is received from Executive of such
breach, which such notice shall include a detailed description of the grounds constituting such
breach.

          (b) During the Noncompete Period, 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 months of the Employment
Period; 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 way 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).

          (c) If, at the time of enforcement of this Section 11, a court shall hold that the duration,
scope or area restrictions stated herein are unreasonable under circumstances then

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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. Executive acknowledges that the restrictions contained in this Section 11 are
reasonable and that he has reviewed the provisions of this Agreement with his legal counsel.

          (d) In the event of the breach or a threatened breath by Executive of any of the provisions of
this Section 11, 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 Executive of Section 11(a),
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.

          12. Executive’s Representations. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which he is bound which
has not been waived, (ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or entity which has not
been waived, and (iii) on the Effective Date, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges
and represents that he has consulted with independent legal counsel regarding his

22

 

rights and obligations under this Agreement and that he fully understands the terms and
conditions contained herein.

          13. Survival. Sections 5 through 28, inclusive, shall survive and continue in full
force in accordance with their terms notwithstanding the expiration or termination of the
Employment Period.

          14. Notices. Any notice, communication or request provided for in this Agreement
shall be in writing and shall be either personally delivered (with a written acknowledgement of
receipt), sent by nationally recognized overnight courier service (with a written acknowledgement
of receipt by the overnight courier) or mailed by certified or registered mail, return receipt
requested, to the recipient at the address below indicated:

	 	 	 
	 

	 	Notices to Executive:
	 
	 	 
	 

	 	David Crane
	 

	 	Orchard Hill
	 

	 	3071 Lawrenceville Road
	 

	 	Lawrenceville, NJ 08648
	 
	 	 
	 

	 	Notices to the Company:
	 
	 	 
	 

	 	Denise Wilson
	 

	 	VP, Human Resources
	 

	 	NRG Energy, Inc.
 211 Carnegie Center
	 
	 	Princeton, NJ 08540
	 
	 	 
	 

	 	Timothy O’Brien
	 

	 	VP, General Counsel
	 

	 	NRG Energy, Inc.
	 

	 	211 Carnegie Center
	 

	 	Princeton, NJ 08540

23

 

or such other address or to the attention of such other person as the recipient party shall have
specified by ten (10) days prior written notice to the sending party. Any notice under this
Agreement shall be deemed to have been given when (i) when personally delivered, (ii) two (2) days
after being sent by overnight courier or (iii) three (3) days after mailing by certified or
registered mail.

          15. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any action in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as if such, invalid,
illegal or unenforceable provision had never been contained herein.

          16. Complete Agreement. This Agreement, those documents expressly referred to herein
and other documents of even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject matter hereof in any way.
For the sake of clarity, except as otherwise specifically provided herein, this Agreement
supersedes the Original Agreement.

          17. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

24

 

          18. Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.

          19. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the beneficiaries, heirs and representatives of Executive and the successors and assigns
of 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)
to all or a majority of its assets, by agreement in form and substance satisfactory to Executive,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform this Agreement if no such succession had taken place.
Regardless whether such agreement is executed, this Agreement shall be binding upon any successor
of the Company in accordance with the operation of law and such successor shall be deemed the
“Company” for purposes of this Agreement. Executive may not assign his rights (except by will or
the laws of descent and distribution) or delegate his duties or obligations hereunder. Except as
provided by this Section 19, this Agreement is not assignable by any party and no payment to be
made hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or other charge.

          20. Choice of Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

25

 

          21. Amendment and Waiver. The provisions of this Agreement may be amended, modified
or waived only with the prior written consent of the Company and Executive, and no course of
conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any
of the provisions of this Agreement (including, without limitation, the Company’s right to
terminate the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any provision of this
Agreement.

          22. Insurance. The Company may, at its discretion, apply for and procure in its own
name and for its own benefit life and/or disability insurance on Executive in any amount or amounts
considered advisable. Executive agrees to cooperate in any medical or other examination, supply
any information and execute and deliver any applications or other instruments in writing as may be
reasonably necessary to obtain and constitute such insurance. Executive hereby represents that he
has no reason to believe that his life is not insurable at rates now prevailing for healthy men of
his age.

          23. Indemnification and Reimbursement of Payments on Behalf of Executive. The Company
and its affiliates shall be entitled to deduct or withhold from any amounts owing from the Company
or any of its affiliates to Executive any federal, state, local or foreign withholding taxes,
excise tax, or employment taxes (“Taxes”) imposed with respect to Executive’s compensation or other
payments from the Company or any of its affiliates or Executive’s ownership interest in the Company
(including, without limitation, wages, bonuses, dividends, the receipt or exercise of equity
options and/or the receipt or vesting of restricted equity). In the event the Company or any of
its affiliates does not make such deductions or withholdings at the written request of the
Executive, Executive shall indemnify the Company and

26

 

its affiliates for any amounts paid with respect to any such Taxes, together with any
interest, penalties and related expenses thereto.

          24. Consent to Jurisdiction. EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, FOR THE PURPOSES OF
ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE
OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT IN COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 14
(NOTICE) SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO
ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS SECTION 24. EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION,
SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE,
AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

          25. Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE
PARTIES HERETO TO ENTER INTO THIS

27

 

AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY
FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

          26. Corporate Opportunity. During the Employment Period, Executive shall submit to
the Board all business, commercial and investment opportunities or offers presented to Executive
that relate to the business of the Company or its affiliates (“Corporate Opportunities”), if
Executive wishes to accept or pursue, directly or indirectly, such Corporate Opportunities on
Executive’s own behalf. This Section 26 shall not apply to purchases of publicly traded stock by
Executive.

          27. Legal Costs. 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 Executive in asserting any claims or defenses under this Agreement,
except that Executive shall bear his own costs of such litigation or disputes (including, without
limitation attorneys’ fees) if the court finds in favor of the Company with respect to any claims
or defenses asserted by the Executive.

          28. Executive’s Cooperation. During the Employment Period and thereafter, Executive
shall cooperate with the Company and its affiliates, upon the Company’s reasonable request, with
respect to any internal, investigation or administrative, regulatory or judicial proceeding
involving matters within the scope of Executive’s duties and responsibilities to the Company during
the Employment Period (including, without limitation, Executive being available to the Company upon
reasonable notice for interviews and factual investigations,

28

 

appearing at the Company’s reasonable request to give testimony without requiring service of a
subpoena or other legal process, and turning over to the Company all relevant Company documents
which are or may come into Executive’s possession during the Employment Period); provided, however,
that any such request by the Company shall not be unduly burdensome or interfere with Executive’s personal schedule or ability to engage in gainful employment. In
the event the Company requires Executive’s cooperation in accordance with this Section 28, the
Company shall reimburse Executive for reasonable out-of-pocket expenses (including travel, lodging
and meals) incurred by Executive in connection with such cooperation, subject to reasonable
documentation. In addition, the Company shall compensate Executive at a rate of $500 per hour for
the time in excess of one business day, per occurrence or event, that Executive reasonably spends
complying with his obligations under this Section after the expiration of the Employment Period.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 
	 	 	NRG ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Howard Cosgrove
	 

	 	 	 	 
	 

	 	 	 	Howard Cosgrove
	 

	 	 	 	Board Chairman
	 
	 	 	 	 
	 

	 	 	 	/s/ David W. Crane
	 

	 	 	 	 
	 

	 	 	 	David W. Crane
	 

	 	 	 	President & CEO

29

 

EXHIBIT A

GENERAL RELEASE

     In consideration of the payments and benefits (the “Severance Payment”) paid or to be paid to
me pursuant to and in accordance with the terms of my Employment Agreement with NRG Energy, Inc.
dated March 3, 2006 (the “Agreement”), on behalf of myself, my heirs, executors, administrators,
successors, and assigns, I hereby fully and forever RELEASE and DISCHARGE NRG ENERGY, INC., its
affiliates and their officers, directors, agents, employees, representatives, successors and
assigns (hereinafter, collectively called the “Company”), from any and all claims and causes of
action arising out of or relating in any way to my employment with the Company, including, but not
limited to, the offer of employment and termination of my employment, and I agree that I will not
in any manner institute, prosecute or pursue any complaints, claims, charges, liabilities, claims
for relief, demands, suits, actions or causes of action against the Company that are covered by
this RELEASE.

     Notwithstanding the foregoing, expressly excluded from this RELEASE are any claims or causes
of action which I may have (i) seeking enforcement of my rights under the Agreement, including,
without limitation, Sections 6, 7, 8 and 27 thereof, or any other plan, policy or arrangement of
the Company, (ii) seeking to obtain contribution as permitted by applicable law in the event of the
entry of judgment against me as a result of any act or failure to act for which

 

 

both I and the Company are held to be jointly liable, (iii) arising out of or relating in any way
to acts or omissions after the date of this RELEASE or otherwise not covered by this RELEASE, and
(iv) which cannot be waived by law. I shall also retain the right to seek indemnification from the
Company, to the extent permitted under applicable law and Section 7 of the Agreement.

1. I understand and agree that, except as specifically provided above, this RELEASE is a full and
complete waiver of all claims relating to my employment with the Company, including, but not
limited to, claims of wrongful discharge, breach of contract, breach of the covenant of good faith
and fair dealing, violation of public policy, defamation, personal injury and emotional distress,
claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991,
the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit
Protection Act of 1990, the Americans With Disabilities Act, the Rehabilitation Act of 1973, as
amended, the Equal Pay Act of 1963, Section 1981 of the Civil Rights Act of 1866, any of the
Delaware State employment, discrimination or wage payment laws, the Fair Labor Standards Act of
1938, as amended, the Family and Medical Leave Act of 1993, and the Employee Retirement Income
Security Act of 1974, as amended, claims arising from any legal restrictions on the Company’s right
to terminate employees (including, without limitation, claims arising under various contract, tort,
public policy or wrongful discharge theories under any federal, state or local law, or under the
federal Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state
or local law), and any claims for attorney’s fees or costs.

2

 

2. I understand that I have received or will receive, regardless of the execution of this RELEASE,
all amounts due to me pursuant to Sections 6(d), 7 and 8 of the Agreement. I further understand
and agree that the Company will not provide me with any additional payments or benefits under the
Agreement (including, without limitation, payments under Section 6(a) of the Agreement) unless I
execute this RELEASE. In consideration of the execution of this RELEASE, I will receive additional
payments and benefits specified in Section 6(a) of the Agreement.

3. In addition, and in further consideration of the foregoing, I acknowledge and agree that if I
hereafter discover facts different from or in addition to those which I now know or believe to be
true that this RELEASE shall be and remain effective in all respects notwithstanding such different
or additional facts or the discovery thereof. I understand that this RELEASE does not waive or
release any rights or claims that I may have under the Age Discrimination in Employment Act of
1967, as amended, which arise after the date I sign this RELEASE.

4. As part of my existing and continuing obligation to the Company, I have returned or, within
seven (7) days of my termination will return to the Company all Confidential Information and Third
Party Information (as such terms are defined in the Agreement) in accordance with the terms of the
Agreement. I affirm my obligation to keep all Confidential Information confidential and not to
disclose it to any third party as required by Section 9 of the Agreement.

5. I agree not to disclose, either directly or indirectly, any information whatsoever regarding (i)
any of the terms or the existence of this RELEASE and my benefits under the Agreement or

3

 

(ii) any other claim I may have against the Company, to any person or organization, including but
not limited to members of the press and media, present and former employees of the Company,
companies who do business with the Company; or other members of the public. Notwithstanding the
preceding sentence, I may reveal such terms of this RELEASE and the Severance Payment to my spouse,
accountants or attorneys or as are necessary to comply with a request made by the Internal Revenue
Service, as otherwise compelled by a court or agency of competent jurisdiction, as allowed and/or
required by law.

6. This RELEASE shall be governed by the laws of the State of Delaware.

7. This RELEASE contains the entire agreement between the Company and me with respect to any
matters referred to in the RELEASE and shall supersede any all other agreements, whether written or
oral, with respect to such matters. I understand and agree that this RELEASE shall not be deemed
or construed at any time as an admission of liability or wrongdoing by either myself or the
Company. Notwithstanding the foregoing, it is understood and agreed that my termination will be
treated for all purposes as a termination without Cause or for Good Reason under Section 6(a) of
the Agreement and that I shall be entitled to all payments and benefits under the Agreement
consistent with such a termination.

8. If any one or more of the provisions contained in this RELEASE is, for any reason, held to be
unenforceable, that holding will not affect any other provision of this RELEASE, but, with respect
only to the jurisdiction holding the provision to be unenforceable, this RELEASE shall

4

 

then be construed as if such unenforceable provision or provisions had never been contained
therein.

9. Before executing this RELEASE, I obtained sufficient information to intelligently exercise my
own judgment about the terms of the RELEASE. The Company has informed me in writing to consult an
attorney before signing this RELEASE, if I wish.

I also understand for a period of fifteen (15) days after I sign this RELEASE, I may revoke this
RELEASE and that the RELEASE will not become effective until fifteen (15) days after I sign it, and
only then if I do not revoke it. In order to revoke this RELEASE, I must deliver, or cause to be
delivered, to Denise Wilson; VP, Human Resources by First Class mail or facsimile 609-524-4530, by
no later than fifteen (15) days after I execute this RELEASE, a letter stating that I am revoking
it.

10. My severance and other termination benefits under the Agreement will be paid in accordance with
the terms of the Agreement. If I choose to revoke this RELEASE within fifteen (15) days after I
sign it, such benefits will not be due and payable, and the RELEASE will have no effect.

11. If I fail to comply with my agreement not to institute, prosecute or pursue any complaints,
claims, charges, liabilities, claims for relief, demands suits or causes of actions against the
Company (except as set forth in the second unnumbered paragraph at the beginning of this Release
above, including, without limitation, any claims or causes of actions I may have

5

 

as a result of any acts or omissions that occur after the date of this Release), or if I materially
and willfully fail to comply with the terms of Section 4 and 5 of this RELEASE, I will forfeit the
additional payments and benefits due under the Agreement.

6

 

EMPLOYEE’S ACCEPTANCE OF RELEASE

BEFORE SIGNING MY NAME TO THIS RELEASE, I STATE THAT: I HAVE READ IT; UNDERSTAND IT AND KNOW THAT
I AM GIVING UP IMPORTANT RIGHTS; I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING
IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY. EXCEPT FOR THE MATTERS EXPRESSLY STATED IN
THIS RELEASE, THE COMPANY HAS NEITHER MADE ANY REPRESENTATION NOR OFFERED ME ANY INDUCEMENT TO SIGN
THIS RELEASE.

	 	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	David W. Crane
	 
	 	 	 	 
	 

	 	Date:	 	 

	 
	Agreed to and accepted:

	 

	NRG ENERGY, INC.

	 

	By:

	 

	Name:

	 

	Title:EX-10.34

 

Exhibit 10.34

NRG Energy, Inc.

Named Executive Officer 2005 AIP Payout and 2006 Base Salary Table

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	2005 Annual Incentive	 	 
	Name	 	Title	 	Plan Payout	 	2006 Base Salary
	David Crane	 	President, Chief Executive Officer and Director
	 	$	1,252,435	 	 	$	1,000,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert C. Flexon	 	Executive Vice President and Chief Financial Officer
	 	$	488,000	 	 	$	475,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Kevin T. Howell	 	Executive Vice President, Commercial Operations
	 	$	250,000	 	 	$	380,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	John P. Brewster	 	Executive Vice President, International Operations and President, South Central Region
	 	$	225,000	 	 	$	320,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Christine A. Jacobs	 	Vice President, Plant Operations
	 	$	210,000	 	 	$	310,000

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