Document:

EXHIBIT 10.8

EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT is
dated effective as of the grant date set forth on Exhibit 1 attached
hereto, between CS Financing Corporation, a Delaware corporation (the “Corporation”),
and the party listed on Exhibit 1 (“Grantee”).

WHEREAS, the
Corporation desires to grant and the Grantee desires to accept the Nonqualified
Stock Options to purchase Common Stock of the Corporation (as defined below);

NOW THEREFORE, in
consideration of the premises and of the covenants and agreements set forth
below, it is mutually agreed as follows:

1.                                       Grant of Options.  The Corporation hereby grants to
Grantee an Option to purchase from the Corporation all or any part of an
aggregate amount of the shares of the Common Stock of the Corporation, $0.01
par value per share (the “Common Stock”), at the Option price and on other
terms, as set forth in Exhibit 1 attached hereto and made a part
hereof.  The date of this Agreement is
the effective date of the grant.  This
Option is not intended to qualify as an Incentive
Stock Option as described in Section 422 of the Internal Revenue Code of 1986
and is referred to as a Nonqualified Stock Option.

2.                                       Exercise Period.  This Option shall vest and become
exercisable in accordance with the schedule attached hereto as Exhibit 1 and
made a part hereof.  All vested Options
must be exercised on or before a date ten (10) years from the date of the
grant.  Vesting shall continue in
accordance with Exhibit 1 notwithstanding the termination of Grantee’s
employment relationship with the Corporation.

3.                                       Exercise of Option.  The vested portion of this Option
may be exercised only by written notice of intent to the Corporation at its
office at 45 San Clemente Drive, Suite B210, Corte Madera, California 94925.  Such notice shall state the number of shares
of Common Stock in respect of which the Option is being exercised and shall be
accompanied by payment for such Common Stock in cash, certified or cashier’s
check or by personal check.  A form of
Notice of Exercise is attached hereto as Exhibit A.

4.                                       Withholding.  In the event that the Grantee elects to
exercise this Option or any part thereof, and if the Corporation shall be
required to withhold any amounts by reasons of any federal, state or local tax
laws, rules or regulations in respect of the issuance of shares to the Grantee
pursuant to the Option, the Corporation shall be entitled to deduct and
withhold such amounts from any payments to be made to the Grantee.  In any event, the Grantee shall make available
to the Corporation, promptly when requested by the Corporation, sufficient
funds to meet the requirements of such withholding; and the Corporation shall
be entitled to take and authorize such steps as it may deem advisable in order
to have such funds available to the Corporation out of any funds or property
due or to become to the Grantee.

5.                                       No Shareholder Rights.  Grantee shall have no rights as a
stockholder with respect to any shares of Common Stock subject to this Option
prior to the date of issuance of a certificate or certificates for such shares.

 

6.                                       Investment Representation.  Notice of the
exercise of this Option may include a representation that any of the Option
shares purchased shall be acquired as an investment and not with a view to, or
for sale in connection with, any public distribution.

7.                                       Compliance with Law and Regulations.  The Grantee
acknowledges that this Option may not be exercised until the Corporation has
taken all actions then required to comply with all applicable federal and state
laws, rules and regulations and any exchange on which the Common Stock may then
be listed.  The certificates representing
the shares purchased upon the exercise of this Option may bear a legend in
substantially the following form:

These shares have not been registered either under any applicable
federal law and rules and resale will not be permitted under state law unless
the shares are first registered under the Minnesota Securities Law.  Further, no sale, offer to sell, or transfer
of these shares shall be made unless a registration statement under the federal
Securities Act of 1933, as amended, with respect to such shares is then in
effect or an exemption from the registration requirements of such Act is then
in fact applicable to such shares.

8.                                       Binding Agreement.  This Agreement shall be binding
upon and inure to the benefit of the legal representatives, executors,
administrators, successors and assigns of each party to this Agreement.

9.                                       Complete Agreement.  This Agreement sets forth the
entire understanding of the parties hereto and shall not be amended, changed or
terminated except by an instrument in writing signed by the parties to this
Agreement.

10.                                 Counterparts and Governing Law.  This Agreement
may be executed in counterparts, and its validity, construction and
performance, shall be governed by the laws of the state of Minnesota.

IN WITNESS WHEREOF,
the parties have executed this Agreement effective the date first above
written.

	
  

  	
   

  	
  CS FINANCING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
  Timothy R. Redpath

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRANTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Grantee’s signature is set forth on Exhibit 1
  attached hereto and made a part hereof.]

  

 

 

EXHIBIT
A

NOTICE OF EXERCISE OF STOCK OPTION

CS Financing
Corporation

45 San Clemente Drive, Suite B210

Corte Madera, CA 94925

The undersigned is the holder of a Stock Option (the “Option”)
to purchase shares of Common Stock of CS Financing Corporation (the “Corporation
“), pursuant to the terms of the Stock Option Agreement between the Corporation
and the undersigned (the “Agreement”). 
The undersigned hereby irrevocably elects to exercise the Option to
purchase _____ shares of Common Stock (the “Option Shares”).  Enclosed herewith are (1) the original signed
Agreement, and (2) payment for the Option Shares as required under the
Agreement.  The undersigned requests that
the certificate representing the Option Shares be issued in the name of the undersigned
and delivered to the address set forth below.

In connection with the issuance of the Option Shares
to the undersigned, the undersigned hereby certifies and represents to the
Corporation that the undersigned is acquiring such shares for the purpose of
investment and not with a view toward distribution.  The undersigned understands that these
securities have not been registered either under any applicable federal law and
rules or applicable state law and rules and that resale will not be permitted under
state law unless the securities are first registered or the sale is a
transaction exempt from registration under the applicable state securities law.

The undersigned further understands that no sale,
offer to sell, or transfer of the Option Shares shall be made unless a
registration statement under the federal Securities Act of 1933, as amended
(the “Act”), with respect to the Option Shares is then in effect or an
exemption from the registration requirements of the Act is then in fact
applicable to the Option Shares.  The
undersigned understands that a legend reciting this investment restriction may
be placed on any stock certificate that may be issued to the undersigned.

Dated:

(Grantee
Signature)

(Address)

 

EXHIBIT
1

OPTION TERMS

	
  Name of Grantee:

  	
   

  	
  Michael W. Bozora

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  January 1, 2006

  
	
   

  	
   

  	
   

  
	
  Number of Shares
  Granted:

  	
   

  	
  12,000     (10%
  of total issued and outstanding shares)

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
   

  	
  $2.00

  
	
   

  	
   

  	
   

  
	
  Type of Option

  	
   

  	
   

  
	
  (Qualified or
  Non-Qualified):

  	
   

  	
  Non-Qualified

  
	
   

  	
   

  	
   

  
	
  Vesting:

  	
   

  	
  ×  2,000 — filing of the Corporation’s
  registration statement

  
	
   

  	
   

  	
  ×  2,000 — effectiveness of the registration
  statement

  
	
   

  	
   

  	
  ×  2,000 — aggregate sale of $25,000,000 in
  debt securities of the Corporation

  
	
   

  	
   

  	
  ×  2,000 — aggregate sale of $50,000,000 in
  debt securities of the Corporation

  
	
   

  	
   

  	
  ×  2,000 — aggregate sale of $75,000,000 in
  debt securities of the Corporation

  
	
   

  	
   

  	
  ×  2,000 — aggregate sale of $100,000,000 in
  debt securities of the Corporation

  

 

	
  CS FINANCING CORPORATION

  	
   

  	
  Accepted and agreed to by

  the undersigned Grantee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  	
   

  	
  By:

  	
   

  	
  /s/ Michael W. Bozora

  
	
  Print Name:

  	
   

  	
  Timothy R. Redpath

  	
   

  	
  Print Name:

  	
   

  	
  Michael W. Bozora

  
	
  Title:

  	
   

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[Please execute two copies of this Exhibit 1

and return one copy to the Corporation.]Exhibit 10.1

DIRECTORS’ INITIAL GRANT

RELIANT
ENERGY, INC.

2002 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AWARD
AGREEMENT

Pursuant to this Award
Agreement, as of                           ,            ,
Reliant Energy, Inc. (the “Company”)
hereby grants to «Director» (the “Participant”),
a Director of the Company, «Shares» shares
of Restricted Stock.  Such number of
shares are subject to adjustment as provided in Section 15 of the Reliant
Energy, Inc. 2002 Long-Term Incentive Plan (the “Plan”), subject to the terms,
conditions and restrictions described in the Plan and in this Agreement.

1.                                       Relationship to the Plan.  This
grant of Restricted Stock is subject to all of the terms, conditions and
provisions of the Plan and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in effect on this date.  Except as defined herein, capitalized terms
have the same meanings as under the Plan. 
If any provision of this Award Agreement conflicts with the express terms of the Plan, the terms of the
Plan control and, if necessary, the applicable provisions of this Award Agreement are deemed amended so as to carry
out the purpose and intent of the Plan. References to the Participant also
include the heirs or other legal representatives of the Participant or the
Participant’s estate.

2.                                       Restrictions.  The
Restricted Stock granted under this Agreement may not be sold, assigned,
transferred, pledged or otherwise encumbered until the restrictions have lapsed
(“Restriction Period”) except as otherwise provided in this Section 2.  Notwithstanding anything herein or in the
Plan to the contrary, the shares of Restricted Stock are transferable by the
Participant to Immediate Family Members, Immediate Family Member Trusts, and
Immediate Family Member Partnerships pursuant to Section 14 of the Plan.

3.             Vesting and Forfeiture.

(a)                                  The
Restricted Stock vests as of the date of the Company’s annual meeting in 2008 (“Vesting
Date”) (the end of the Participant’s initial term as a Director), provided the
Participant does not terminate service, except as otherwise provided in this
Section 3, before the Vesting Date.

(b)                                 If
the Participant’s service as a Director is terminated due to death or
Disability, the Restricted Stock vests at the time of such termination to the
extent not previously vested pursuant to this Section 3.  For purposes of this Award Agreement, “Disability”
means a physical or mental impairment of sufficient severity such that the
Participant can no longer serve as a Director.

(c)                                  If
the Participant terminates service on the Board for any reason other than death
or Disability, the Restricted Stock granted during the term during which the
Participant terminates service will be forfeited in its entirety upon
termination.

4.                                       Rights as a Stockholder. 
Except as otherwise specifically provided in this Award Agreement and
the Plan, during the Restriction Period the Participant shall have all the
rights of a stockholder with respect to the Restricted Stock including, without
limitation, the right to vote the Restricted Stock and the right to receive any
dividends with respect thereto.

 1
 

 

5.                                       Change
in Control.  Notwithstanding anything
herein to the contrary, upon any Change of Control the Restricted Stock will
vest to the extent not previously vested.

6.                                       Notices.  For purposes of this Award Agreement, notices
and all other communications must be in writing and will be deemed to have been
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

	
  If to Company:

  	
   

  	
  Reliant Energy, Inc.

  
	
   

  	
   

  	
  1000 Main Street

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  ATTENTION: Senior Vice President and

  
	
   

  	
   

  	
  Corporate Secretary

  
	
   

  	
   

  	
   

  
	
  If to Director:

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Corporate Secretary

  
	
   

  	
   

  	
  Reliant Energy, Inc.

  
	
   

  	
   

  	
  1000 Main Street

  
	
   

  	
   

  	
  Houston, Texas 77002

  

 

or to such other address as either party may furnish to the other in
writing in accordance with this Section 6.

7.                                       Successors and Assigns. 
This Award Agreement is binding upon and inures to the benefit of the Participant, the Company and their respective permitted
successors and assigns.

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Joel V. Staff

  	
   

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer

  	
   

  

 

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