Document:

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                                                                    EXHIBIT 10.4

                               SEVERANCE AGREEMENT

                  THIS SEVERANCE AGREEMENT ("Agreement") is made and effective
as of the 11th day of August, 2003, by and between RELIANT RESOURCES, INC., a
Delaware corporation, (the "Company"), RELIANT ENERGY CORPORATE SERVICES, LLC, a
Delaware limited liability corporation and wholly owned subsidiary of the
Company (the "Employer") and Joel V. Staff ("Executive").

                  WHEREAS, the Company and the Employer consider it essential to
the best interests of the Company's stockholders to foster the continued
employment of key management personnel; and

                  WHEREAS, the key management personnel of the Company,
including Executive, are employed by the Employer; and

                  WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change of Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and

                  WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's and the Employer's management to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change of Control;

                  NOW, THEREFORE, the Company, the Employer and Executive have
entered into this Agreement, on the terms and conditions hereinafter stated.

         1.       DEFINITIONS: The following terms shall have the meanings set
forth below.

                  "Affiliate" means any company controlled by, controlling or
under common control with the Company within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code") and includes, without
limitation, the Employer.

                  "Board" means the board of directors of the Company.

                  "Cause" means Executive's (a) gross negligence in the
performance of Executive's duties, (b) intentional and continued failure to
perform Executive's duties, (c) intentional engagement in conduct which is
materially injurious to the Company or its Affiliates (monetarily or otherwise)
or (d) conviction of a felony, which, in the case of clauses (a), (b) or (c) has
not been cured within 30 days after a written demand for substantial performance
is delivered to Executive by the Board, which demand specifically identifies the
conduct which the Board asserts to constitute Cause. For purposes of the
definition of Cause, an act or failure to act on the part of Executive will be
deemed "intentional" only if done or omitted to be done by Executive not in good
faith and without reasonable belief that his/her action or omission was in the
best interest of the Company and its Affiliates, and no act or failure to act on
the part of

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Executive will be deemed "intentional" if it was due primarily to an error in
judgment or negligence.

                  A "CHANGE OF CONTROL" shall be deemed to have occurred upon
the occurrence of any of the following events:

                  (a)      30% OWNERSHIP CHANGE: Any Person, other than an
         ERISA- regulated pension plan established by the Company or an
         Affiliate, makes an acquisition of Outstanding Voting Stock and is,
         immediately thereafter, the beneficial owner of 30% or more of the then
         Outstanding Voting Stock, unless such acquisition is made directly from
         the Company in a transaction approved by a majority of the Incumbent
         Directors; or any group is formed that is the beneficial owner of 30%
         or more of the Outstanding Voting Stock; or

                  (b)      BOARD MAJORITY CHANGE: Individuals who are Incumbent
         Directors cease for any reason to constitute a majority of the members
         of the Board; or

                  (c)      MAJOR MERGERS AND ACQUISITIONS: Consummation of a
         Business Combination unless, immediately following such Business
         Combination, (i) all or substantially all of the individuals and
         entities that were the beneficial owners of the Outstanding Voting
         Stock immediately prior to such Business Combination beneficially own,
         directly or indirectly, more than 70% of the then outstanding shares of
         voting stock of the parent corporation resulting from such Business
         Combination in substantially the same relative proportions as their
         ownership, immediately prior to such Business Combination, of the
         Outstanding Voting Stock, (ii) if the Business Combination involves the
         issuance or payment by the Company of consideration to another entity
         or its shareholders, the total fair market value of such consideration
         plus the principal amount of the consolidated long-term debt of the
         entity or business being acquired (in each case, determined as of the
         date of consummation of such Business Combination by a majority of the
         Incumbent Directors) does not exceed 50% of the sum of the fair market
         value of the Outstanding Voting Stock plus the principal amount of the
         Company's consolidated long-term debt (in each case, determined
         immediately prior to such consummation by a majority of the Incumbent
         Directors), (iii) no Person (other than any corporation resulting from
         such Business Combination) beneficially owns, directly or indirectly,
         30% or more of the then outstanding shares of voting stock of the
         parent corporation resulting from such Business Combination and (iv) a
         majority of the members of the board of directors of the parent
         corporation resulting from such Business Combination were Incumbent
         Directors of the Company immediately prior to consummation of such
         Business Combination; or

                  (d)      MAJOR ASSET DISPOSITIONS: Consummation of a Major
         Asset Disposition unless, immediately following such Major Asset
         Disposition, (i) individuals and entities that were beneficial owners
         of the Outstanding Voting Stock immediately prior to such Major Asset
         Disposition beneficially own, directly or indirectly, more than 70% of
         the then outstanding shares of voting

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         stock of the Company (if it continues to exist) and of the entity that
         acquires the largest portion of such assets (or the entity, if any,
         that owns a majority of the outstanding voting stock of such acquiring
         entity) and (ii) a majority of the members of the board of directors of
         the Company (if it continues to exist) and of the entity that acquires
         the largest portion of such assets (or the entity, if any, that owns a
         majority of the outstanding voting stock of such acquiring entity) were
         Incumbent Directors of the Company immediately prior to consummation of
         such Major Asset Disposition.

For purposes of the foregoing definition,

                  (1)      the term "Person" means an individual, entity or

         group;

                  (2)      the term "group" is used as it is defined for
         purposes of Section 13(d)(3) of the Securities Exchange Act of 1934
         (the "Exchange Act");

                  (3)      the term "beneficial owner" is used as it is defined
         for purposes of Rule 13d-3 under the Exchange Act;

                  (4)      the term "Outstanding Voting Stock" means outstanding
         voting securities of the Company entitled to vote generally in the
         election of directors; and any specified percentage or portion of the
         Outstanding Voting Stock (or of other voting stock) shall be determined
         based on the combined voting power of such securities;

                  (5)      the term "Incumbent Director" means a director of the
         Company (x) who was a director of the Company on the date first written
         above or (y) who becomes a director subsequent to such date and whose
         election, or nomination for election by the Company's shareholders, was
         approved by a vote of a majority of the Incumbent Directors at the time
         of such election or nomination, except that any such director shall not
         be deemed an Incumbent Director if his or her initial assumption of
         office occurs as a result of an actual or threatened election contest
         or other actual or threatened solicitation of proxies by or on behalf
         of a Person other than the Board;

                  (6)      the term "election contest" is used as it is defined
         for purposes of Rule 14a-11 under the Exchange Act;

                  (7)      the term "Business Combination" means (x) a merger or
         consolidation involving the Company or its stock or (y) an acquisition
         by the Company, directly or through one or more subsidiaries, of
         another entity or its stock or assets;

                  (8)      the term "parent corporation resulting from a
         Business Combination" means the Company if its stock is not acquired or
         converted in the Business Combination and otherwise means the entity
         which as a result of such Business Combination owns the Company or all
         or substantially all the Company's assets either directly or through
         one or more subsidiaries; and

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                  (9)      the term "Major Asset Disposition" means the sale or
         other disposition in one transaction or a series of related
         transactions of 70% or more of the assets of the Company and its
         subsidiaries on a consolidated basis; and any specified percentage or
         portion of the assets of the Company shall be based on fair market
         value, as determined by a majority of the Incumbent Directors.

                  "COMPANY" means Reliant Resources, Inc., and, except for
purposes of determining whether a Change of Control has occurred, any successor
thereto.

                  "COVERED TERMINATION" means any termination of Executive's
employment with the Employer, the Company and their Affiliates during the term
of this Agreement that does not result from any of the following:

                           (i)      death;

                           (ii)     disability entitling Executive to benefits
                  under the Company's or the Employer's long-term disability
                  plan;

                           (iii)    termination for Cause; or

                           (iv)     termination by Executive.

Notwithstanding the foregoing, a Covered Termination shall also include a
termination by Executive for Good Reason that occurs following a Change of
Control.

                  "EMPLOYER" shall mean Reliant Energy Corporate Services, LLC.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "GOOD REASON" shall mean any one or more of the following
which occurs following a Change of Control:

                  (a)      a significant reduction in the duties or
         responsibilities of Executive from those applicable to him/her
         immediately prior to the date on which a Change of Control occurs;

                  (b)      a reduction by the Employer or the Company in
         Executive's annual base salary as in effect on the date hereof or as
         the same may be increased from time to time;

                  (c)      the failure by the Company or the Employer to
         continue in effect any compensation plan in which Executive
         participates immediately prior to the Change of Control which is
         material to Executive's total compensation, unless an equitable
         arrangement (embodied in an ongoing substitute or alternative plan) has
         been made with respect to such plan, or the failure by the Company or
         the Employer to continue Executive's participation therein (or in such
         substitute or alternative plan) on a basis not materially less
         favorable, both in terms of the

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         amount or timing of payment of benefits provided and the level of
         Executive's participation relative to other participants, as existed
         immediately prior to the Change of Control;

                  (d)      the failure by the Company and the Employer to
         continue to provide Executive with benefits substantially similar to
         those enjoyed by Executive under any of the Company's (or the
         Employer's) pension, savings, life insurance, medical, health and
         accident, or disability plans in which Executive was participating
         immediately prior to the Change of Control, the taking of any other
         action by the Company or the Employer which would directly or
         indirectly materially reduce any of such benefits or deprive Executive
         of any material fringe benefit enjoyed by Executive at the time of the
         Change of Control or the failure by the Company or the Employer to
         provide Executive with paid vacation on the same basis as was
         applicable to Executive immediately prior to the Change of Control; or

                  (e)      a change in the location of Executive's principal
         place of employment with the Employer or the Company by more than 50
         miles from the location where Executive was principally employed
         immediately prior to the date on which a Change of Control occurs or
         the Company or the Employer requiring Executive to be based in a
         location other than that of the Company's principal executive offices.

                  "SALARY" means Executive's base salary as in effect
immediately prior to the termination of his employment or, if higher, the base
salary in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.

                  "TARGET BONUS PERCENTAGE" means Executive's target incentive
award opportunity under the Reliant Resources, Inc. Annual Incentive
Compensation Plan (or any successor plan) in effect immediately prior to the
termination of his employment or, if higher, immediately prior to the first
event or circumstance constituting Good Reason.

                  "WAIVER AND RELEASE" means a legal document, in the form
attached hereto as Exhibit A or such other form as may be prescribed by the
Company, but which form may not be altered, amended or modified after execution
of a binding agreement to effect a Change of Control without the consent of
Executive.

                  "WELFARE BENEFIT COVERAGE" shall mean each of life insurance,
medical, dental and vision benefits.

         2.       SEVERANCE BENEFITS: If Executive (a) experiences a Covered
Termination, (b) executes and returns to the Company a Waiver and Release within
the time period prescribed in the Waiver and Release following the date of
Executive's Covered Termination, and (c) does not revoke such Waiver and Release
within the time period prescribed in the Waiver and Release, then Executive
shall be entitled to receive from the Employer, as additional compensation for
services rendered to the Company (including its Affiliates), the following
severance benefits:

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                  (a)      Cash Severance Payments: Executive will receive from
         the Employer an amount equal to the product of (1) three and (2) the
         sum of (a) the Salary and (b) the product of the Salary multiplied by
         the Target Bonus Percentage, in one lump sum payment, within 15 days
         after the expiration of the Waiver and Release revocation period.

                  (b)      PRO RATED BONUS: Executive will receive from the
         Employer an amount equal to the product of (1) the Salary and (2) the
         Target Bonus Percentage, with the product of (1) and (2) prorated based
         on the number of days Executive was employed during the bonus year in
         which his employment terminated. Such bonus shall be paid within 15
         days after the expiration of the Waiver and Release revocation period.

                  (c)      WELFARE BENEFIT COVERAGE: The Employer will provide,
         or will cause to be provided, continued Welfare Benefit Coverage for
         Executive and his/her eligible dependents at the active employee rate
         for a period of (1) 3 years following the date of Executive's Covered
         Termination which occurs following a Change of Control or (2) 18 months
         following any other Covered Termination. Such entitlement shall apply
         only to those Welfare Benefit Coverages that the Company or the
         Employer has in effect from time to time for active employees. If
         Executive's employment is terminated following a Change of Control and
         Executive would have become entitled to benefits under the Company's or
         the Employer's post-retirement health care or life insurance plans, as
         in effect immediately prior to the termination or of his employment
         (or, if more favorable to Executive, as in effect immediately prior to
         the first occurrence of an event or circumstance constituting Good
         Reason), had Executive's employment terminated at any time during the
         period of three years following the date upon which Executive's
         employment was terminated, the Company or the Employer, as applicable,
         shall provide such post-retirement health care or life insurance
         benefits to Executive and Executive's dependents commencing on the
         later of (i) the date on which such coverage would have first become
         available and (ii) the date on which benefits described in the first
         sentence of this paragraph 2(c) terminate. Benefits otherwise
         receivable by Executive pursuant to this Section 2(c) shall be reduced
         to the extent Executive becomes eligible to receive benefits pursuant
         to a government-sponsored health insurance or health care program.

                  (d)      OUTPLACEMENT: The Employer will provide reimbursement
         for fees incurred for outplacement services within twenty four months
         of the date of Executive's Covered Termination in connection with
         Executive's efforts to obtain new employment, up to a maximum of
         $100,000.

                  (e)      FINANCIAL PLANNING: The Employer will provide, or
         cause to be provided, continued access, for the remainder of the
         calendar year in which the Covered Termination occurs or for 60 days
         (if greater), to the financial planning services available to executive
         employees at the time of Covered Termination.

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         3.       CHANGE OF CONTROL EQUITY-BASED BENEFITS: Immediately upon any
Change of Control or, if earlier, immediately upon a Covered Termination,
Executive shall be entitled to receive, as additional compensation for services
rendered to the Company (including its Affiliates), benefits with respect to any
equity based compensation in accordance with the applicable plans and
agreements.

         4.       CERTAIN ADDITIONAL PAYMENTS: Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company or the Employer to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 4 (a "Payment")) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties incurred by Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") from the Employer in an amount such
that after payment (whether through withholding at the source or otherwise) by
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto), employment taxes and
Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

                  Subject to the provisions of this Section 4, all
determinations required to be made under this Section 4, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Deloitte & Touche (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Employer and Executive within 15 business
days of the receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by the Employer. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, Executive may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Employer. Any Gross-Up Payment, as determined pursuant to this
Section 4, shall be paid by the Employer to Executive within five days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion that failure to report the Excise Tax on
Executive's applicable federal income tax return would not result in the
imposition of negligence or similar penalty. Any determination by the Accounting
Firm shall be binding upon the Company, the Employer and Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross- Up Payments which will not have been made by the Employer should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Employer exhausts its remedies pursuant to the
following provisions of this Section 4 and Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Employer to or for the benefit of Executive.

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                  Executive shall notify the Employer in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Employer of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after Executive is informed
in writing of such claim and shall apprise the Employer of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall
not pay such claim prior to the expiration of the 30-day period following the
date on which it gives such notice to the Employer (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Employer notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:

                  (a)      give the Employer any information reasonably
         requested by the Employer relating to such claim;

                  (b)      take such action in connection with contesting such
         claim as the Employer shall reasonably request in writing from time to
         time, including, without limitation, accepting legal representation
         with respect to such claim by an attorney reasonably selected by the
         Employer;

                  (c)      cooperate with the Employer in good faith in order to
         effectively contest such claim; and

                  (d)      permit the Employer to participate in any proceedings
         relating to such claim;

provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax, employment tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 4, the Employer shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Employer shall determine; provided, however, that if the Employer directs
Executive to pay such claim and sue for a refund, the Employer shall advance the
amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax, employment tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Employer's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

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                  If, after the receipt by Executive of an amount advanced by
the Employer pursuant to the foregoing provisions of this Section 4, Executive
becomes entitled to receive any refund with respect to such claim, Executive
shall (subject to the Employer complying with the requirements of this Section
4) promptly pay to the Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Executive of an amount advanced by the Employer pursuant to the
foregoing provisions of this Section 4, a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the Employer
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

                  If the Company or the Employer are obligated to provide
Executive with one or more Welfare Benefit Coverages pursuant to Section 2(c),
and the amount of such benefits or the value of such benefit coverage (including
without limitation any insurance premiums paid by the Company or the Employer to
provide such benefits) is subject to any income, employment or similar tax
imposed by federal, state or local law, or any interest or penalties with
respect to such tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the "Income Tax") because
such benefits cannot be provided under a nondiscriminatory health plan described
in Section 105 of the Code or for any other reason, the Employer will pay to
Executive an additional payment or payments (collectively, an "Income Tax
Payment"). The Income Tax Payment will be in an amount such that, after payment
by Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), Executive retains an amount of the Income Tax Payment
equal to the Income Tax imposed with respect to such welfare benefits or such
welfare benefit coverage.

         5.       LEGAL FEES AND EXPENSES: It is the intent of the Company and
the Employer that Executive not be required to incur legal fees and the related
expenses associated with the interpretation, enforcement or defense of
Executive's rights under this Agreement by litigation or otherwise because the
cost and expense thereof would detract from the benefits intended to be extended
to Executive hereunder. Accordingly, if it should appear to Executive that the
Company or the Employer have failed to comply with any of their obligations
under this Agreement or in the event that the Company or the Employer or any
other person takes or threatens to take any action to declare this Agreement
void or unenforceable, or institutes any litigation or other action or
proceeding designed to deny, or to recover from, Executive the benefits provided
or intended to be provided to Executive hereunder, the Employer irrevocably
authorizes Executive from time to time to retain counsel of Executive's choice,
at the expense of the Employer as hereafter provided, to advise and represent
Executive in connection with any such interpretation, enforcement or defense,
including without limitation the initiation or defense of any litigation or
other legal action, whether by or against the Company, the Employer or any
director, officer, stockholder or other person affiliated with the Company or
the Employer, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company or the Employer and such
counsel, the Company and the Employer irrevocably consent to Executive entering
into an attorney-client relationship with such counsel, and in that connection
the Company, the Employer and Executive agree that a confidential relationship
will exist between Executive and such counsel. Without regard to whether
Executive prevails, in whole or in part, in connection with any of the
foregoing, the Employer will pay and be solely

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financially responsible for any and all attorneys' fees and related expenses
incurred by Executive in connection with any of the foregoing except to the
extent that a final judgment no longer subject to appeal finds that a claim or
defense asserted by Executive was frivolous. In such a case, the portion of such
fees and expenses incurred by Executive as a result of such frivolous claim or
defense shall become Executive's sole responsibility and any funds advanced by
the Company or by a trust created to secure such payment shall be repaid.

                  In the event a Change of Control occurs, the performance of
the Employer's obligations under this Section 5 will be funded by amounts
deposited or which may be deposited in trust pursuant to certain trust
agreements to which the Company or the Employer may be a party providing that
the fees and expenses of counsel selected from time to time by Executive
pursuant to this Section 5 will be paid, or reimbursed to Executive if paid by
Executive, either in accordance with the terms of such trust agreements, or, if
not so provided, on a regular, periodic basis upon presentation by Executive to
the Employer or to the trustee of a statement or statements prepared by such
counsel in accordance with its customary practices. In order to be eligible for
payment of expenses directly from the Employer, Executive must first exhaust all
rights to payment under the trust agreements, if any, contemplated immediately
above. The pendency of a claim by the Employer that a claim or defense of
Executive is frivolous or otherwise lacking merit shall not excuse the Employer
(or the trustee of a Trust contemplated by this Section 5) from making periodic
payments of legal fees and expenses until a final judgment is rendered as
hereinabove provided. Any failure by the Employer to satisfy any of its
obligations under this Section 5 will not limit the rights of Executive
hereunder. Subject to the foregoing (and to the provisions of Section 14),
Executive will have the status of a general unsecured creditor of the Employer
and will have no right to, or security interest in, any assets of the Company,
the Employer or any Affiliate.

         6.       CONFIDENTIALITY: Executive acknowledges that pursuant to this
Agreement, the Company agrees to provide to him Confidential Information
regarding the Company and the Company's business and has previously provided him
other such Confidential Information. In return for this and other consideration
provided under this Agreement, Executive agrees that he will not, while employed
by the Company or the Employer and thereafter, disclose or make available to any
other person or entity, or use for his own personal gain, any Confidential
Information, except for such disclosures as required in the performance of his
duties hereunder as may otherwise be required by law or legal process (in which
case Executive and shall notify the Company of such legal or judicial proceeding
as soon as practicable following his receipt of notice of such a proceeding, and
permit the Company to seek to protect its interests and information). For
purposes of this Agreement, "Confidential Information" shall mean any and all
information, data and knowledge that has been created, discovered, developed or
otherwise become known to the Company or any of its Affiliates or ventures or in
which property rights have been assigned or otherwise conveyed to the Company or
any of its Affiliates or ventures, which information, data or knowledge has
commercial value in the business in which the Company or any of its Affiliates
or ventures is engaged, except such information, data or knowledge as is or
becomes known to the public without violation of the terms of this Agreement. By
way of illustration, but not limitation, Confidential Information includes
business trade secrets, secrets concerning the Company's or any of its
Affiliates or ventures plans and strategies, nonpublic information concerning
material market opportunities, technical trade secrets, processes, formulas,
know-how, improvements, discoveries, developments,

<PAGE>

designs, inventions, techniques, marketing plans, manuals, records of research,
reports, memoranda, computer software, strategies, forecasts, new products,
unpublished financial information, projections, licenses, prices, costs, and
employee, customer and supplier lists or parts thereof.

         7.       RETURN OF PROPERTY: Executive agrees that at the time of
leaving the Company's or the Employer's employ, he will deliver to the Employer
(and will not keep in his possession, recreate or deliver to anyone else) all
Confidential Information as well as all other devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, customer or client lists or information, or any
other documents or property (including all reproductions of the aforementioned
items) belonging to the Company or any of its Affiliates or ventures, regardless
of whether such items were prepared by Executive.

         8.       NON-SOLICITATION AND NON-COMPETITION:

                  (a)      For consideration provided under this Agreement,
         including but not limited to the Company's agreement to provide
         Executive with Confidential Information regarding the Company and the
         Company's business, Executive agrees that while employed by the Company
         or the Employer and for one year following a Covered Termination that
         does not occur following a Change of Control, he shall not, without the
         prior written consent of the Company, directly or indirectly, (i) hire
         or induce, entice or solicit (or attempt to induce entice or solicit)
         any employee of the Company or any of its Affiliates or ventures to
         leave the employment of the Company or any of its Affiliates or
         ventures or (ii) solicit or attempt to solicit the business of any
         customer or acquisition prospect of the Company or any of its
         Affiliates or ventures with whom Executive had any actual contact while
         employed at the Company, the Employer or any Affiliate.

                  (b)      Additionally, for consideration provided under this
         Agreement, including but not limited to the Company's agreement to
         provide Executive with Confidential Information regarding the Company
         and the Company's business, Executive agrees that while employed by the
         Company or the Employer and for one year following a Covered
         Termination that does not occur following a Change of Control, he will
         not, without the prior written consent of the Company, acting alone or
         in conjunction with others, either directly or indirectly, engage in
         any business that is in competition with the Company or any of its
         Affiliates or ventures or accept employment with or render services to
         such a business as an officer, agent, employee, independent contractor
         or consultant, or otherwise engage in activities that are in
         competition with the Company or any of its Affiliates or ventures.

                  (c)      The restrictions contained in this Paragraph 8 are
         limited to a 50- mile radius around any geographical area in which the
         Company or any of its Affiliates or ventures engages (or has definite
         plans to engage) in operations or the marketing of its products or
         services at the time of a Covered Termination.

<PAGE>

                  (d)      Executive acknowledges that these restrictive
         covenants under this Agreement, for which Executive received valuable
         consideration from the Company as provided in this Agreement, including
         but not limited to the Company's agreement to provide Executive with
         Confidential Information regarding the Company and the Company's
         business are ancillary to otherwise enforceable provisions of this
         Agreement that the consideration provided by the Company gives rise to
         the Company's interest in restraining Executive from competing and that
         the restrictive covenants are designed to enforce Executive's
         consideration or return promises under this Agreement. Additionally,
         Executive acknowledges that these restrictive covenants contain
         limitations as to time, geographical area, and scope of activity to be
         restrained that are reasonable and do not impose a greater restraint
         than is necessary to protect the goodwill or other legitimate business
         interests of the Company, including but not limited to the Company's
         need to protect its Confidential Information.

         9.       NOTICES: For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly 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 or the Employer:    Reliant Resources, Inc.
                                                    1000 Main Street
                                                    Houston, Texas 77002
                                                    ATTENTION: Chairman of the
                                                    Board

                  If to Executive:                  Joel V. Staff
                                                    1 Winners Circle
                                                    Houston, TX 77024

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

         10.      APPLICABLE LAW: The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Texas, including the Texas statute of
limitations, but without giving effect to the principles of conflict of laws of
such State.

         11.      SEVERABILITY: If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.

         12.      WITHHOLDING OF TAXES: The Company or the Employer, as
applicable, may withhold from any payments payable under this Agreement all
federal, state, city or other taxes as may be required pursuant to any law or
governmental regulation or ruling.

<PAGE>

         13.      No ASSIGNMENT; SUCCESSORS: Executive's right to receive
payments or benefits hereunder shall not be assignable or transferable, whether
by pledge, creation or a security interest or otherwise, whether voluntary,
involuntary, by operation of law or otherwise, other than a transfer by will or
by the laws of descent or distribution, and in the event of any attempted
assignment or transfer contrary to this Section 13 the Company shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                  This Agreement shall be binding upon and inure to the benefit
of the Company and the Employer and their successors and assigns (including,
without limitation, any company into or with which the Company may merge or
consolidate).

         14.      PAYMENT OBLIGATIONS ABSOLUTE: Except for the requirement of
Executive to execute and return to the Company the Waiver and Release in
accordance with Section 2, the Company's and the Employer's obligation to pay
Executive the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counter-claim, recoupment, defense
or other right which the Company or the Employer (including their Affiliates)
may have against him/her or anyone else. All amounts payable by the Company or
the Employer (including its Affiliates hereunder) shall be paid without notice
or demand. Executive shall not be obligated to sign an agreement not to compete
with the Company in addition to that set forth in Section 8 or to seek other
employment in mitigation of the amounts payable or arrangements made under any
provision of this Agreement, and the obtaining of any other employment shall in
no event effect any reduction of the Company's or the Employer's obligations to
make (or cause to be made) the payments and arrangements required to be made
under this Agreement. In the event that the Employer fails to pay any amount or
provide any benefit required to be made or provided by the terms of this
Agreement, the Company shall be required to make such payment or provide such
benefit, as the case may be, under the same terms and conditions that were
applicable to the Employer.

         15.      NUMBER AND GENDER: Wherever appropriate herein, words used in
the singular shall include the plural and the plural shall include the singular.
The masculine gender where appearing herein shall be deemed to include the
feminine gender.

         16.      CONFLICTS: This Agreement constitutes the entire understanding
of the parties with respect to its subject matter and supercedes any other
agreement or other understanding, whether oral or written, express or implied,
between them concerning, related to or otherwise in connection with, the subject
matter hereof.

         17.      TERM: The effective date of the Agreement is August 11, 2003.
This Agreement shall remain in effect until January 14, 2006. Thereafter, on
each January 14, the term shall be extended automatically for an additional
one-year period unless the Company shall have delivered to Executive written
notice of non-renewal prior to the applicable anniversary. Upon the occurrence
of a Change of Control, the term shall be automatically extended to a date which
is three years from the date upon which the Change of Control occurs. If
Executive's employment is terminated prior to the occurrence of a Change of
Control this Agreement shall

<PAGE>

immediately terminate, except that terms of this Agreement, which must survive
the termination this Agreement in order to be effectuated (including the
provisions of Sections 2, 5, 6, 7 and 8) shall survive.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered this____________day of_______________________2003, but
effective as of the day and year first above written.

                                      RELIANT RESOURCES, INC.

                                      By  /s/ Jerry J. Langdon
                                          --------------------------------
                                          Jerry J. Langdon
                                          Executive Vice President and
                                          Chief Administrative Officer

                                      RELIANT ENERGY CORPORATE SERVICES, LLC

                                      By. /s/ Jerry J. Langdon
                                          --------------------------------------
                                          Jerry J. Langdon
                                          Executive Vice President and
                                          Chief Administrative Officer

                                      EXECUTIVE

                                      /s/ Joel V. Staff
                                      ------------------------------------------
                                      Joel V. Staff

<PAGE>

                                    EXHIBIT A

                               WAIVER AND RELEASE

                  In exchange for the payment to me of the severance benefits
described in Section 2 of the Severance Agreement between Reliant Resources,
Inc. (the "Company"), Reliant Energy Corporate Services, LLC (the "Employer")
and me effective as of ______________________, 200____ (the "Agreement") and of
other remuneration and consideration provided for in the Agreement (the
"Benefits"), which is in addition to any remuneration or benefits to which I am
already entitled, I agree not to sue and to release and forever discharge the
Company, the Employer and all of their respective parents, subsidiaries,
affiliates and unincorporated divisions, and its or their respective officers,
directors, agents, servants, employees, successors, assigns, insurers, employee
benefit plans and fiduciaries, and agents of any of the foregoing (collectively,
the "Corporate Group") from any and all damages, losses, causes of action,
expenses, demands, liabilities, and claims on behalf of myself, my heirs,
executors, administrators, and assigns with respect to all matters relating to
or arising out of my employment with or separation from the Company, under any
employee benefit plan or claims for indemnity arising as a result of my being an
officer or fiduciary of the Corporate Group. The release does not apply to
claims or causes of action accruing after the date hereof.

                  I ACKNOWLEDGE THAT SIGNING THIS WAIVER AND RELEASE IS AN
IMPORTANT LEGAL ACT AND THAT I HAVE BEEN ADVISED IN WRITING TO CONSULT AN
ATTORNEY PRIOR TO EXECUTION. I ALSO UNDERSTAND THAT, IN ORDER TO BE ELIGIBLE FOR
THE BENEFITS, I MUST SIGN AND RETURN THIS WAIVER AND RELEASE TO THE COMPANY'S
GENERAL COUNSEL. I ACKNOWLEDGE THAT I HAVE BEEN GIVEN AT LEAST 21 DAYS TO
CONSIDER WHETHER TO EXECUTE THIS WAIVER AND RELEASE.

                  In exchange for the payment to me of the Benefits, which is in
addition to any remuneration or benefits to which I am already entitled, (1)1
agree not to sue in any local, state or federal court regarding or relating in
any way to my employment with or separation from the Company, the Employer or
any member of the Corporate Group, and (2) I knowingly and voluntarily waive all
claims and release the Corporate Group from any and all claims, demands,
actions, liabilities, and damages, whether known or unknown, arising out of or
relating in any way to my employment with or separation from the Company, the
Employer or any member of the Corporate Group, except to the extent that my
rights are vested under the terms of employee benefit plans sponsored by the
Corporate Group, rights described in the Agreement, claims for indemnity from
the Corporate Group arising as a result of being an officer or fiduciary of the
Corporate Group, and except with respect to such rights or claims as may arise
after the date this Waiver and Release is executed. Except for the matters
identified above that are not the subject of this Waiver and Release, this
Waiver and Release includes, but is not limited to, claims and causes of action
under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended, including the Older
Workers Benefit Protection Act of 1990; the Civil Rights Act of 1866, as
amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of
1990; the Energy Reorganization Act, as amended, 42 U.S.C. Section 5851; the
Workers Adjustment and Retraining Notification Act of 1988; the Pregnancy

                                      - 1 -
<PAGE>

Discrimination Act of 1978; the Employee Retirement Income Security Act of 1974,
as amended; the Family and Medical Leave Act of 1993; the Fair Labor Standards
Act; the Occupational Safety and Health Act; the Texas Labor Code Section 21.001
et. seq.; the Texas Labor Code; the Sarbanes-Oxley Act of 2002; claims in
connection with workers' compensation or "whistle blower" statutes; and claims
for breach of contract (whether written or oral, expressed or implied), tort,
personal injury, defamation, negligence or wrongful termination; and any other
claims under the statutory, regulatory, administrative, constitutional or common
law of any nation, state, locality or any other jurisdiction.

                  Further, I expressly represent that no promise or agreement
which is not expressed in this Waiver and Release has been made to me in
executing this Waiver and Release, and that I am relying on my own judgment in
executing this Waiver and Release, and that I am not relying on any statement or
representation of any member of the Corporate Group or any of their agents. I
agree that this Waiver and Release is valid, fair, adequate and reasonable, is
with my full knowledge and consent, was not procured through fraud, duress or
mistake and has not had the effect of misleading, misinforming or failing to
inform me. I acknowledge and agree that the Company or the Employer, as
applicable, will withhold any taxes required by federal or state law from the
Benefits otherwise payable to me.

                  I understand that for a period of seven calendar days
following the Company's receipt of this Waiver and Release executed by me, I may
revoke my acceptance of the offer of the Benefits by delivering a written
statement to the Company's General Counsel, by hand or by registered-mail, in
which case the Waiver and Release will not become effective. In the event I
revoke my acceptance of this offer, the Company and the Employer shall have no
obligation to provide me the Benefits. I understand that failure to revoke my
acceptance of the offer within seven days after the date I sign this Waiver and
Release will result in this Waiver and Release being permanent and irrevocable.

                  I agree that the terms of this Waiver and Release are
CONFIDENTIAL and that any disclosure to anyone for any purpose whatsoever except
as required by law by me or my agents, representatives, heirs, spouse, employees
or spokespersons shall be a breach of this Waiver and Release.

                  I agree that this Waiver and Release is valid. I agree that
this Waiver and Release is fair, adequate and reasonable. I agree that my
consent to this Waiver and Release was with my full knowledge and was not
procured through fraud, duress or mistake.

                  I acknowledge that payment of the Benefits is not an admission
by any member of the Corporate Group that they engaged in any wrongful or
unlawful act or that any member of the Corporate Group violated any law or
regulation. I understand that nothing in this Waiver and Release is intended to
prohibit, restrict or otherwise discourage me from engaging in any activity
related to matters of public or employee health or safety, specifically to
include activity protected under 42 U.S.C. Section 5851 and 10 C.F.R. Section
50.7, including, but not limited to, providing information to the Nuclear
Regulatory Commission ("NRC") regarding nuclear safety or quality concerns,
potential violations or other matters within the NRC's jurisdiction. Similarly,
nothing herein is intended to prohibit, restrict or otherwise discourage me or
any other individual from making reports of unsafe, wrongful or illegal conduct
to any agency or branch of the local, state

<PAGE>

or federal government, including law enforcement authorities, public utility
commissions, energy regulatory commissions or any other lawful authority.

                  I understand and agree that in the event of any breach of the
provisions of Sections 6 or 8 of the Agreement, or threatened breach, by me, the
Company or the Employer, in their discretion, may initiate appropriate action as
provided in those Sections and may recover all lawful damages which it may prove
by a preponderance of the evidence in accordance with the law specified in those
Sections.

                  I acknowledge that this Waiver and Release set forth the
entire understanding and agreement between me, the Company and the Employer
concerning the subject matter of this Waiver and Release and supersedes any
prior or contemporaneous oral and/or written agreements or representations, if
any, between me, the Company, the Employer or any other member of the Corporate
Group. The invalidity or enforceability of any provisions hereof shall in no way
affect the validity or enforceability of any other provision.

______________________________________
Name

______________________________________
Social Security Number

______________________________________
Signature Date<PAGE>

                                                                    EXHIBIT 10.5

                               SEVERANCE AGREEMENT

                  THIS SEVERANCE AGREEMENT ("Agreement") is made and effective
as of the 14th day of January, 2003, by and between RELIANT RESOURCES, INC., a
Delaware corporation having its principal place of business in Houston, Harris
County, Texas, and Thomas C. Livengood, an individual currently residing in
Harris County, Texas ("Executive").

                  WHEREAS, the Company considers it essential to the best
interests of its stockholders to foster the continued employment of key
management personnel; and

                  WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change of Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and

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

                  NOW, THEREFORE, the Company and Executive have entered into
this Agreement, on the terms and conditions hereinafter stated.

         1.       DEFINITIONS: The following terms shall have the meanings set
forth below.

                  "Affiliate" means any company controlled by, controlling or
under common control with the Company within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code").

                  "BOARD" means the board of directors of the Company.

                  "CAUSE" means Executive's (a) gross negligence in the
performance of Executive's duties, (b) intentional and continued failure to
perform Executive's duties, (c) intentional engagement in conduct which is
materially injurious to the Company or its Affiliates (monetarily or otherwise)
or (d) conviction of a felony, which, in the case of clauses (a), (b) or (c) has
not been cured within 30 days after a written demand for substantial performance
is delivered to Executive by the Board, which demand specifically identifies the
conduct which the Board asserts to constitute Cause. For purposes of the
definition of Cause, an act or failure to act on the part of Executive will be
deemed "intentional" only if done or omitted to be done by Executive not in good
faith and without reasonable belief that his/her action or omission was in the
best interest of the Company, and no act or failure to act on the part of
Executive will be deemed "intentional" if it was due primarily to an error in
judgment or negligence.

                  A "CHANGE OF CONTROL" shall be deemed to have occurred upon
the occurrence of any of the following events:

                                       -1-
<PAGE>

                  (a)      30% OWNERSHIP CHANGE: Any Person, other than an
         ERISA-regulated pension plan established by the Company or an
         Affiliate, makes an acquisition of Outstanding Voting Stock and is,
         immediately thereafter, the beneficial owner of 30% or more of the then
         Outstanding Voting Stock, unless such acquisition is made directly from
         the Company in a transaction approved by a majority of the Incumbent
         Directors; or any group is formed that is the beneficial owner of 30%
         or more of the Outstanding Voting Stock; or

                  (b)      BOARD MAJORITY CHANGE: Individuals who are Incumbent
         Directors cease for any reason to constitute a majority of the members
         of the Board; or

                  (c)      MAJOR MERGERS AND ACQUISITIONS: Consummation of a
         Business Combination unless, immediately following such Business
         Combination, (i) all or substantially all of the individuals and
         entities that were the beneficial owners of the Outstanding Voting
         Stock immediately prior to such Business Combination beneficially own,
         directly or indirectly, more than 70% of the then outstanding shares of
         voting stock of the parent corporation resulting from such Business
         Combination in substantially the same relative proportions as their
         ownership, immediately prior to such Business Combination, of the
         Outstanding Voting Stock, (ii) if the Business Combination involves the
         issuance or payment by the Company of consideration to another entity
         or its shareholders, the total fair market value of such consideration
         plus the principal amount of the consolidated long-term debt of the
         entity or business being acquired (in each case, determined as of the
         date of consummation of such Business Combination by a majority of the
         Incumbent Directors) does not exceed 50% of the sum of the fair market
         value of the Outstanding Voting Stock plus the principal amount of the
         Company's consolidated long-term debt (in each case, determined
         immediately prior to such consummation by a majority of the Incumbent
         Directors), (iii) no Person (other than any corporation resulting from
         such Business Combination) beneficially owns, directly or indirectly,
         30% or more of the then outstanding shares of voting stock of the
         parent corporation resulting from such Business Combination and (iv) a
         majority of the members of the board of directors of the parent
         corporation resulting from such Business Combination were Incumbent
         Directors of the Company immediately prior to consummation of such
         Business Combination; or

                  (d)      MAJOR ASSET DISPOSITIONS: Consummation of a Major
         Asset Disposition unless, immediately following such Major Asset
         Disposition, (i) individuals and entities that were beneficial owners
         of the Outstanding Voting Stock immediately prior to such Major Asset
         Disposition beneficially own, directly or indirectly, more than 70% of
         the then outstanding shares of voting stock of the Company (if it
         continues to exist) and of the entity that acquires the largest portion
         of such assets (or the entity, if any, that owns a majority of the
         outstanding voting stock of such acquiring entity) and (ii) a majority
         of the members of the board of directors of the Company (if it
         continues to exist) and of

                                       -2-
<PAGE>

         the entity that acquires the largest portion of such assets (or the
         entity, if any, that owns a majority of the outstanding voting stock of
         such acquiring entity) were Incumbent Directors of the Company
         immediately prior to consummation of such Major Asset Disposition.

For purposes of the foregoing definition,

                  (1)      the term "Person" means an individual, entity or
         group;

                  (2)      the term "group" is used as it is defined for
         purposes of Section 13(d)(3) of the Securities Exchange Act of 1934
         (the "Exchange Act");

                  (3)      the term "beneficial owner" is used as it is defined
         for purposes of Rule 13d-3 under the Exchange Act;

                  (4)      the term "Outstanding Voting Stock" means outstanding
         voting securities of the Company entitled to vote generally in the
         election of directors; and any specified percentage or portion of the
         Outstanding Voting Stock (or of other voting stock) shall be determined
         based on the combined voting power of such securities;

                  (5)      the term "Incumbent Director" means a director of the
         Company (x) who was a director of the Company on January 1, 2003 or (y)
         who becomes a director subsequent to such date and whose election, or
         nomination for election by the Company's shareholders, was approved by
         a vote of a majority of the Incumbent Directors at the time of such
         election or nomination, except that any such director shall not be
         deemed an Incumbent Director if his or her initial assumption of office
         occurs as a result of an actual or threatened election contest or other
         actual or threatened solicitation of proxies by or on behalf of a
         Person other than the Board;

                  (6)      the term "election contest" is used as it is defined
         for purposes of Rule 14a-11 under the Exchange Act;

                  (7)      the term "Business Combination" means (x) a merger or
         consolidation involving the Company or its stock or (y) an acquisition
         by the Company, directly or through one or more subsidiaries, of
         another entity or its stock or assets;

                  (8)      the term "parent corporation resulting from a
         Business Combination" means the Company if its stock is not acquired or
         converted in the Business Combination and otherwise means the entity
         which as a result of such Business Combination owns the Company or all
         or substantially all the Company's assets either directly or through
         one or more subsidiaries; and

                                       -3-
<PAGE>

                  (9)      the term "Major Asset Disposition" means the sale or
         other disposition in one transaction or a series of related
         transactions of 70% or more of the assets of the Company and its
         subsidiaries on a consolidated basis; and any specified percentage or
         portion of the assets of the Company shall be based on fair market
         value, as determined by a majority of the Incumbent Directors.

                  "COMPANY" means Reliant Resources, Inc., and, except for
purposes of determining whether a Change of Control has occurred, any successor
thereto.

                  "COVERED TERMINATION" means any termination of Executive's
employment with the Company or any Affiliate thereof during the term of this
Agreement that does not result from any of the following:

                           (i)      death;

                           (ii)     disability entitling Executive to benefits
                  under the Company's long-term disability plan;

                           (iii)    termination for Cause; or

                           (iv)     termination by Executive.

Notwithstanding the foregoing, a Covered Termination shall also include a
termination by Executive for Good Reason that occurs following a Change of
Control.

                  "GOOD REASON" shall mean any one or more of the following
which occurs following a Change of Control:

                  (a)      a significant reduction in the duties or
         responsibilities of Executive from those applicable to him/her
         immediately prior to the date on which a Change of Control occurs;

                  (b)      a reduction by the Company in Executive's annual base
         salary as in effect on the date hereof or as the same may be increased
         from time to time;

                  (c)      the failure by the Company to continue in effect any
         compensation plan in which Executive participates immediately prior to
         the Change of Control which is material to Executive's total
         compensation, unless an equitable arrangement (embodied in an ongoing
         substitute or alternative plan) has been made with respect to such
         plan, or the failure by the Company to continue Executive's
         participation therein (or in such substitute or alternative plan) on a
         basis not materially less favorable, both in terms of the amount or
         timing of payment of benefits provided and the level of Executive's
         participation relative to other participants, as existed immediately
         prior to the Change of Control;

                  (d)      the failure by the Company to continue to provide
         Executive with benefits substantially similar to those enjoyed by
         Executive under any of the

                                       -4-
<PAGE>

         Company's pension, savings, life insurance, medical, health and
         accident, or disability plans in which Executive was participating
         immediately prior to the Change of Control, the taking of any other
         action by the Company which would directly or indirectly materially
         reduce any of such benefits or deprive Executive of any material fringe
         benefit enjoyed by Executive at the time of the Change of Control or
         the failure by the Company to provide Executive with paid vacation on
         the same basis as was applicable to Executive immediately prior to the
         Change of Control; or

                  (e)      a change in the location of Executive's principal
         place of employment with the Company by more than 50 miles from the
         location where Executive was principally employed immediately prior to
         the date on which a Change of Control occurs or the Company requiring
         Executive to be based in a location other than that of the Company's
         principal executive offices.

                  "PERFORMANCE SHARES" means an award issued to the Executive
under the Company's Long-Term Incentive Plan or any successor plan, in the form
of shares of common stock of the Company or any successor, or units denominated
in shares of Common Stock of the Company or any successor the vesting of which
is subject to the attainment of one or more performance objectives.

                  "RESTRICTED SHARES" means an award issued to the Executive
under the Company's Long-Term Incentive Plan, the 1994 Houston Industries
Incorporated Long-Term Incentive Compensation Plan, as amended, the Reliant
Energy, Incorporated Long-Term Incentive Plan, the Reliant Resources, Inc.
Transition Stock Plan or any successor plan in the form of shares of common
stock of the Company or of CenterPoint Energy, Incorporated or any successor or
units denominated in shares of Common Stock of the Company or of CenterPoint
Energy, Incorporated or any successor that is subject to a time-based vesting
schedule.

                  "SALARY" means Executive's base salary as in effect
immediately prior to the termination of his employment or, if higher, the base
salary in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.

                  "STOCK OPTION" means a right to purchase a specified number of
shares of common stock of the Company or of Reliant Energy, Incorporated at a
specified price issued to Executive under the 1994 Houston Industries
Incorporated Long-Term Incentive Compensation Plan, as amended, the Company's
2001 and 2002 Long-Term Incentive Plans, the Company's 2002 Stock Plan, the
Reliant Energy, Incorporated Long-Term Incentive Plan, or any successor plan.

                  "TARGET BONUS PERCENTAGE" means Executive's target incentive
award opportunity under the Reliant Resources, Inc. Annual Incentive
Compensation Plan (or any successor plan) in effect immediately prior to the
termination of his employment or, if higher, immediately prior to the first
event or circumstance constituting Good Reason.

                                       -5-
<PAGE>

                  "WAIVER AND RELEASE" means a legal document, in the form
attached hereto as Exhibit A or such other form as may be prescribed by the
Company, but which form may not be altered, amended or modified after execution
of a binding agreement to effect a Change of Control without the consent of the
Executive.

                  "WELFARE BENEFIT COVERAGE" shall mean each of life insurance,
medical, dental and vision benefits.

         2.       SEVERANCE BENEFITS: If Executive (a) experiences a Covered
Termination, (b) executes and returns to the Company a Waiver and Release within
the time period prescribed in the Waiver and Release following the date of
Executive's Covered Termination, and (c) does not revoke such Waiver and Release
within the time period prescribed in the Waiver and Release, then Executive
shall be entitled to receive, as additional compensation for services rendered
to the Company (including its Affiliates), the following severance benefits:

                  (a)      CASH SEVERANCE PAYMENTS: Executive will receive an
         amount equal to the product of (1) two and (2) the sum of (a) the
         Salary and (b) the product of the Salary multiplied by the Target Bonus
         Percentage, in one lump sum payment, within 15 days after the
         expiration of the Waiver and Release revocation period.

                  (b)      PRO RATED BONUS: Executive will receive an amount
         equal to the product of (1) the Salary and (2) the Target Bonus
         Percentage, with the product of (1) and (2) prorated based on the
         number of days Executive was employed during the bonus year in which
         his employment terminated. Such bonus shall be paid within 15 days
         after the expiration of the Waiver and Release revocation period.

                  (c)      WELFARE BENEFIT COVERAGE: Continued Welfare Benefit
         Coverage for Executive and his/her eligible dependents at the active
         employee rate for a period of (1) 3 years following the date of
         Executive's Covered Termination which occurs following a Change of
         Control or (2) 18 months following any other Covered Termination. Such
         entitlement shall apply only to those Welfare Benefit Coverages that
         the Company has in effect from time to time for active employees. If
         Executive's employment is terminated following a Change of Control and
         Executive would have become entitled to benefits under the Company's
         post-retirement health care or life insurance plans, as in effect
         immediately prior to the termination or of his employment (or, if more
         favorable to Executive, as in effect immediately prior to the first
         occurrence of an event or circumstance constituting Good Reason), had
         the Executive's employment terminated at any time during the period of
         three years following the date upon which Executive's employment was
         terminated, the Company shall provide such post-retirement health care
         or life insurance benefits to Executive and Executive's dependents
         commencing on the later of (i) the date on which such coverage would
         have first become available and (ii) the date on which benefits
         described in the first sentence of this paragraph 2(c) terminate.
         Benefits otherwise receivable by Executive pursuant to this Section

                                       -6-
<PAGE>

         2(c) shall be reduced to the extent Executive becomes eligible to
         receive benefits pursuant to a government-sponsored health insurance or
         health care program.

                  (d)      OUTPLACEMENT: Reimbursement for fees incurred for
         outplacement services within eighteen months of the date of Executive's
         Covered Termination in connection with Executive's efforts to obtain
         new employment, up to a maximum of $50,000.

                  (e)      FINANCIAL PLANNING: Continued access, for the
         remainder of the calendar year in which the Covered Termination occurs
         or for 60 days (if greater), to the financial planning services
         available to executive employees at the time of Covered Termination.

         3.       CHANGE OF CONTROL EQUITY-BASED BENEFITS: Immediately upon any
Change of Control or, if earlier, immediately upon a Covered Termination,
Executive shall be entitled to receive, as additional compensation for services
rendered to the Company (including its Affiliates), benefits with respect to any
equity based compensation in accordance with the applicable plans and
agreements.

         4.       CERTAIN ADDITIONAL PAYMENTS: Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 4 (a "Payment")) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment (whether through
withholding at the source or otherwise) by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto), employment taxes and Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.

                  Subject to the provisions of this Section 4, all
determinations required to be made under this Section 4, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Deloitte & Touche (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 4, shall be paid by the Company to

                                       -7-
<PAGE>

Executive within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by Executive, it shall furnish Executive with a written opinion that failure to
report the Excise Tax on Executive's applicable federal income tax return would
not result in the imposition of negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to the following provisions of this Section 4 and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive.

                  Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:

                  (a)      give the Company any information reasonably requested
         by the Company relating to such claim;

                  (b)      take such action in connection with contesting such
         claim as the Company shall reasonably request in writing from time to
         time, including, without limitation, accepting legal representation
         with respect to such claim by an attorney reasonably selected by the
         Company;

                  (c)      cooperate with the Company in good faith in order to
         effectively contest such claim; and

                  (d)      permit the Company to participate in any proceedings
         relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax, employment tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 4, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and

                                       -8-
<PAGE>

may, at its sole option, either direct Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Executive, on an interest-free basis and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax, employment tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

                  If, after the receipt by Executive of an amount advanced by
the Company pursuant to the foregoing provisions of this Section 4, Executive
becomes entitled to receive any refund with respect to such claim, Executive
shall (subject to the Company complying with the requirements of this Section 4)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Executive of an amount advanced by the Company pursuant to the
foregoing provisions of this Section 4, a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

                  If the Company is obligated to provide the Executive with one
or more Welfare Benefit Coverages pursuant to Section 2(c), and the amount of
such benefits or the value of such benefit coverage (including without
limitation any insurance premiums paid by the Company to provide such benefits)
is subject to any income, employment or similar tax imposed by federal, state or
local law, or any interest or penalties with respect to such tax (such tax or
taxes, together with any such interest and penalties, being hereafter
collectively referred to as the "Income Tax") because such benefits cannot be
provided under a nondiscriminatory health plan described in Section 105 of the
Code or for any other reason, the Company will pay to the Executive an
additional payment or payments (collectively, an "Income Tax Payment"). The
Income Tax Payment will be in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), the Executive retains an amount of the Income Tax Payment equal
to the Income Tax imposed with respect to such welfare benefits or such welfare
benefit coverage.

         5.       LEGAL FEES AND EXPENSES: It is the intent of the Company that
Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Executive's rights
under this Agreement by litigation or otherwise

                                       -9-
<PAGE>

because the cost and expense thereof would detract from the benefits intended to
be extended to Executive hereunder. Accordingly, if it should appear to
Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or proceeding designed to deny, or
to recover from, the Executive the benefits provided or intended to be provided
to Executive hereunder, the Company irrevocably authorizes the Executive from
time to time to retain counsel of Executive's choice, at the expense of the
Company as hereafter provided, to advise and represent Executive in connection
with any such interpretation, enforcement or defense, including without
limitation the initiation or defense of any litigation or other legal action,
whether by or against the Company or any director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to Executive entering into an
attorney-client relationship with such counsel, and in that connection the
Company and Executive agree that a confidential relationship will exist between
Executive and such counsel. Without regard to whether Executive prevails, in
whole or in part, in connection with any of the foregoing, the Company will pay
and be solely financially responsible for any and all attorneys' fees and
related expenses incurred by Executive in connection with any of the foregoing
except to the extent that a final judgment no longer subject to appeal finds
that a claim or defense asserted by Executive was frivolous. In such a case, the
portion of such fees and expenses incurred by Executive as a result of such
frivolous claim or defense shall become Executive's sole responsibility and any
funds advanced by the Company or by a trust created to secure such payment shall
be repaid.

                  In the event a Change of Control occurs, the performance of
the Company's obligations under this Section 5 will be funded by amounts
deposited or which may be deposited in trust pursuant to certain trust
agreements to which the Company may be a party providing that the fees and
expenses of counsel selected from time to time by Executive pursuant to this
Section 5 will be paid, or reimbursed to Executive if paid by Executive, either
in accordance with the terms of such trust agreements, or, if not so provided,
on a regular, periodic basis upon presentation by Executive to the Company or to
the trustee of a statement or statements prepared by such counsel in accordance
with its customary practices. In order to be eligible for payment of expenses
directly from the Company, Executive must first exhaust all rights to payment
under the trust agreements, if any, contemplated immediately above. The pendency
of a claim by the Company that a claim or defense of Executive is frivolous or
otherwise lacking merit shall not excuse the Company (or the trustee of a Trust
contemplated by this Section 5) from making periodic payments of legal fees and
expenses until a final judgment is rendered as hereinabove provided. Any failure
by the Company to satisfy any of its obligations under this Section 5 will not
limit the rights of Executive hereunder. Subject to the foregoing, Executive
will have the status of a general unsecured creditor of the Company and will
have no right to, or security interest in, any assets of the Company or any
Affiliate.

         6.       CONFIDENTIALITY: Executive acknowledges that pursuant to this
Agreement, the Company agrees to provide to him Confidential Information
regarding the Company and the Company's business and has previously provided him
other such Confidential Information. In

                                      -10-
<PAGE>

return for this and other consideration provided under this Agreement, Executive
agrees that he will not, while employed by the Company and thereafter, disclose
or make available to any other person or entity, or use for his own personal
gain, any Confidential Information, except for such disclosures as required in
the performance of his duties hereunder as may otherwise be required by law or
legal process (in which case Executive and shall notify the Company of such
legal or judicial proceeding as soon as practicable following his receipt of
notice of such a proceeding, and permit the Company to seek to protect its
interests and information). For purposes of this Agreement, "Confidential
Information" shall mean any and all information, data and knowledge that has
been created, discovered, developed or otherwise become known to the Company or
any of its affiliates or ventures or in which property rights have been assigned
or otherwise conveyed to the Company or any of its affiliates or ventures, which
information, data or knowledge has commercial value in the business in which the
Company is engaged, except such information, data or knowledge as is or becomes
known to the public without violation of the terms of this Agreement. By way of
illustration, but not limitation, Confidential Information includes business
trade secrets, secrets concerning the Company's plans and strategies, nonpublic
information concerning material market opportunities, technical trade secrets,
processes, formulas, know-how, improvements, discoveries, developments, designs,
inventions, techniques, marketing plans, manuals, records of research, reports,
memoranda, computer software, strategies, forecasts, new products, unpublished
financial information, projections, licenses, prices, costs, and employee,
customer and supplier lists or parts thereof.

         7.       RETURN OF PROPERTY: Executive agrees that at the time of
leaving the Company's employ, he will deliver to the Company (and will not keep
in his possession, recreate or deliver to anyone else) all Confidential
Information as well as all other devices, records, data, notes, reports,
proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, customer or client lists or information, or any
other documents or property (including all reproductions of the aforementioned
items) belonging to the Company or any of its affiliates or ventures, regardless
of whether such items were prepared by Executive.

         8.       NON-SOLICITATION AND NON-COMPETITION:

                  (a)      For consideration provided under this Agreement,
         including but not limited to the Company's agreement to provide
         Executive with Confidential Information regarding the Company and the
         Company's business, Executive agrees that while employed by the Company
         and for one year following a Covered Termination that does not occur
         following a Change of Control, he shall not, without the prior written
         consent of the Company, directly or indirectly, (i) hire or induce,
         entice or solicit (or attempt to induce entice or solicit) any employee
         of the Company or any of its affiliates or ventures to leave the
         employment of the Company or any of its affiliates or ventures or (ii)
         solicit or attempt to solicit the business of any customer or
         acquisition prospect of the Company or any of its affiliates or
         ventures with whom Executive had any actual contact while employed at
         the Company.

                  (b)      Additionally, for consideration provided under this
         Agreement, including but not limited to the Company's agreement to
         provide Executive with

                                      -11-
<PAGE>

         Confidential Information regarding the Company and the Company's
         business, Executive agrees that while employed by the Company and for
         one year following a Covered Termination that does not occur following
         a Change of Control, he will not, without the prior written consent of
         the Company, acting alone or in conjunction with others, either
         directly or indirectly, engage in any business that is in competition
         with the Company or accept employment with or render services to such a
         business as an officer, agent, employee, independent contractor or
         consultant, or otherwise engage in activities that are in competition
         with the Company.

                  (c)      The restrictions contained in this Paragraph 8 are
         limited to a 50-mile radius around any geographical area in which the
         Company engages (or has definite plans to engage) in operations or the
         marketing of its products or services at the time of a Covered
         Termination.

                  (d)      Executive acknowledges that these restrictive
         covenants under this Agreement, for which Executive received valuable
         consideration from the Company as provided in this Agreement, including
         but not limited to the Company's agreement to provide Executive with
         Confidential Information regarding the Company and the Company's
         business are ancillary to otherwise enforceable provisions of this
         Agreement that the consideration provided by the Company gives rise to
         the Company's interest in restraining Executive from competing and that
         the restrictive covenants are designed to enforce Executive's
         consideration or return promises under this Agreement. Additionally,
         Executive acknowledges that these restrictive covenants contain
         limitations as to time, geographical area, and scope of activity to be
         restrained that are reasonable and do not impose a greater restraint
         than is necessary to protect the goodwill or other legitimate business
         interests of the Company, including but not limited to the Company's
         need to protect its Confidential Information.

         9.       NOTICES: For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly 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 Resources, Inc.
                                        1111 Louisiana
                                        Houston, Texas 77002
                                        ATTENTION: Chairman of the Board

                  If to Executive:      Thomas C. Livengood
                                        5405 Huckeberry Lane
                                        Houston, Texas 77056-2715

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

                                      -12-
<PAGE>

         10.      APPLICABLE LAW: The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Texas, including the Texas statute of
limitations, but without giving effect to the principles of conflict of laws of
such State.

         11.      SEVERABILITY: If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.

         12.      WITHHOLDING OF TAXES: The Company may withhold from any
payments payable under this Agreement all federal, state, city or other taxes as
may be required pursuant to any law or governmental regulation or ruling.

         13.      NO ASSIGNMENT; SUCCESSORS: Executive's right to receive
payments or benefits hereunder shall not be assignable or transferable, whether
by pledge, creation or a security interest or otherwise, whether voluntary,
involuntary, by operation of law or otherwise, other than a transfer by will or
by the laws of descent or distribution, and in the event of any attempted
assignment or transfer contrary to this Section 13 the Company shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                  This Agreement shall be binding upon and inure to the benefit
of the Company, its successors and assigns (including, without limitation, any
company into or with which the Company may merge or consolidate).

         14.      PAYMENT OBLIGATIONS ABSOLUTE: Except for the requirement of
the Executive to execute and return to the Company the Waiver and Release in
accordance with Section 2, the Company's obligation to pay (or cause one of its
Affiliates to pay) Executive the amounts and to make the arrangements provided
herein shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off, counter-claim,
recoupment, defense or other right which the Company (including its Affiliates)
may have against him/her or anyone else. All amounts payable by the Company
(including its Affiliates hereunder) shall be paid without notice or demand.
Executive shall not be obligated to sign an agreement not to compete with the
Company or to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Agreement, and the obtaining of
any other employment shall in no event effect any reduction of the Company's
obligations to make (or cause to be made) the payments and arrangements required
to be made under this Agreement.

         15.      NUMBER AND GENDER: Wherever appropriate herein, words used in
the singular shall include the plural and the plural shall include the singular.
The masculine gender where appearing herein shall be deemed to include the
feminine gender.

                                      -13-
<PAGE>

         16.      CONFLICTS: Except as otherwise provided in Exhibit B to this
Agreement, this Agreement constitutes the entire understanding of the parties
with respect to its subject matter and supercedes any other agreement or other
understanding, whether oral or written, express or implied, between them
concerning, related to or otherwise in connection with, the subject matter
hereof.

         17.      TERM: The effective date of the Agreement is January 14, 2003.
The term of this Agreement shall be for a period of three years after such
effective date; provided, however, upon each anniversary of the effective date,
the term shall be extended automatically for an additional one-year period
unless the Company shall have delivered to Executive written notice of
non-renewal prior to the applicable anniversary. Upon the occurrence of a Change
of Control, the term shall be automatically extended to a date which is three
years from the date upon which the Change of Control occurs. If Executive's
employment is terminated prior to the occurrence of a Change of Control this
Agreement shall immediately terminate, except that terms of this Agreement,
which must survive the termination this Agreement in order to be effectuated
(including the provisions of Sections 2, 5, 6, 7 and 8) shall survive.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered this 3rd day of February 2003, but effective as of the
day and year first above written.

                                        RELIANT RESOURCES, INC.

                                        By -s- R. Steve Letbetter
                                           ---------------------------------
                                          R. Steve Letbetter
                                          Chairman and Chief Executive Officer

                                        EXECUTIVE

                                        -s- Thomas C. Livengood
                                        ------------------------------------
                                        Thomas C. Livengood

                                      -14-
<PAGE>

                                    EXHIBIT A

                               WAIVER AND RELEASE

                  In exchange for the payment to me of the severance benefits
described in Section 2 of the Severance Agreement between Reliant Resources,
Inc. (the "Company") and me effective as of_______, 200__(the "Agreement") and
of other remuneration and consideration provided for in the Agreement (the
"Benefits"), which is in addition to any remuneration or benefits to which I am
already entitled, I agree not to sue and to release and forever discharge the
Company and all of its parents, subsidiaries, affiliates and unincorporated
divisions, and its or their respective officers, directors, agents, servants,
employees, successors, assigns, insurers, employee benefit plans and
fiduciaries, and agents of any of the foregoing (collectively, the "Corporate
Group") from any and all damages, losses, causes of action, expenses, demands,
liabilities, and claims on behalf of myself, my heirs, executors,
administrators, and assigns with respect to all matters relating to or arising
out of my employment with or separation from the Company, under any employee
benefit plan or claims for indemnity arising as a result of my being an officer
or fiduciary of the Corporate Group. The release does not apply to claims or
causes of action accruing after the date hereof.

                  I ACKNOWLEDGE THAT SIGNING THIS WAIVER AND RELEASE IS AN
IMPORTANT LEGAL ACT AND THAT I HAVE BEEN ADVISED IN WRITING TO CONSULT AN
ATTORNEY PRIOR TO EXECUTION. I ALSO UNDERSTAND THAT, IN ORDER TO BE ELIGIBLE FOR
THE BENEFITS, I MUST SIGN AND RETURN THIS WAIVER AND RELEASE TO THE COMPANY'S
GENERAL COUNSEL. I ACKNOWLEDGE THAT I HAVE BEEN GIVEN AT LEAST 21 DAYS TO
CONSIDER WHETHER TO EXECUTE THIS WAIVER AND RELEASE.

                  In exchange for the payment to me of the Benefits, which is in
addition to any remuneration or benefits to which I am already entitled, (1) I
agree not to sue in any local, state or federal court regarding or relating in
any way to my employment with or separation from the Company or any member of
the Corporate Group, and (2) I knowingly and voluntarily waive all claims and
release the Corporate Group from any and all claims, demands, actions,
liabilities, and damages, whether known or unknown, arising out of or relating
in any way to my employment with or separation from the Company or any member of
the Corporate Group, except to the extent that my rights are vested under the
terms of employee benefit plans sponsored by the Corporate Group, rights
described in the Agreement, claims for indemnity from the Corporate Group
arising as a result of being an officer or fiduciary of the Corporate Group, and
except with respect to such rights or claims as may arise after the date this
Waiver and Release is executed. Except for the matters identified above that are
not the subject of this Waiver and Release, this Waiver and Release includes,
but is not limited to, claims and causes of action under: Title VII of the Civil
Rights Act of 1964, as amended; the Age Discrimination in Employment Act of
1967, as amended, including the Older Workers Benefit Protection Act of 1990;
the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990; the Energy Reorganization Act, as
amended, 42 U.S.C. Section 5851; the Workers Adjustment and Retraining
Notification Act of 1988; the Pregnancy Discrimination Act of 1978; the Employee
Retirement Income Security Act of 1974, as amended; the Family and

                                      -15-
<PAGE>

Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety
and Health Act; the Texas Labor Code Section 21.001 et. seq.; the Texas Labor
Code; the Sarbanes-Oxley Act of 2002; claims in connection with workers'
compensation or "whistle blower" statutes; and claims for breach of contract
(whether written or oral, expressed or implied), tort, personal injury,
defamation, negligence or wrongful termination; and any other claims under the
statutory, regulatory, administrative, constitutional or common law of any
nation, state, locality or any other jurisdiction.

                  Further, I expressly represent that no promise or agreement
which is not expressed in this Waiver and Release has been made to me in
executing this Waiver and Release, and that I am relying on my own judgment in
executing this Waiver and Release, and that I am not relying on any statement or
representation of any member of the Corporate Group or any of their agents. I
agree that this Waiver and Release is valid, fair, adequate and reasonable, is
with my full knowledge and consent, was not procured through fraud, duress or
mistake and has not had the effect of misleading, misinforming or failing to
inform me. I acknowledge and agree that the Company will withhold any taxes
required by federal or state law from the Benefits otherwise payable to me.

                  I understand that for a period of seven calendar days
following the Company's receipt of this Waiver and Release executed by me, I may
revoke my acceptance of the offer of the Benefits by delivering a written
statement to the Company's General Counsel, by hand or by registered-mail, in
which case the Waiver and Release will not become effective. In the event I
revoke my acceptance of this offer, the Company shall have no obligation to
provide me the Benefits. I understand that failure to revoke my acceptance of
the offer within seven days after the date I sign this Waiver and Release will
result in this Waiver and Release being permanent and irrevocable.

                  I agree that the terms of this Waiver and Release are
CONFIDENTIAL and that any disclosure to anyone for any purpose whatsoever except
as required by law by me or my agents, representatives, heirs, spouse, employees
or spokespersons shall be a breach of this Waiver and Release

                  I agree that this Waiver and Release is valid. I agree that
this Waiver and Release is fair, adequate and reasonable. I agree that my
consent to this Waiver and Release was with my full knowledge and was not
procured through fraud, duress or mistake.

                  I acknowledge that payment of the Benefits is not an admission
by any member of the Corporate Group that they engaged in any wrongful or
unlawful act or that any member of the Corporate Group violated any law or
regulation. I understand that nothing in this Waiver and Release is intended to
prohibit, restrict or otherwise discourage me from engaging in any activity
related to matters of public or employee health or safety, specifically to
include activity protected under 42 U.S.C. Section 5851 and 10 C.F.R. Section
50.7, including, but not limited to, providing information to the Nuclear
Regulatory Commission ("NRC") regarding nuclear safety or quality concerns,
potential violations or other matters within the NRC's jurisdiction. Similarly,
nothing herein is intended to prohibit, restrict or otherwise discourage me or
any other individual from

                                      -16-
<PAGE>

making reports of unsafe, wrongful or illegal conduct to any agency or branch of
the local, state or federal government, including law enforcement authorities,
public utility commissions, energy regulatory commissions or any other lawful
authority.

                  I understand and agree that in the event of any breach of the
provisions of Sections 6 or 8 of the Agreement, or threatened breach, by me, the
Company, in its discretion, may initiate appropriate action as provided in those
Sections and may recover all lawful damages which it may prove by a
preponderance of the evidence in accordance with the law specified in those
Sections.

                  I acknowledge that this Waiver and Release set forth the
entire understanding and agreement between me and the Company concerning the
subject matter of this Waiver and Release and supersede any prior or
contemporaneous oral and/or written agreements or representations, if any,
between me and Company or any other member of the Corporate Group. The
invalidity or enforceability of any provisions hereof shall in no way affect the
validity or enforceability of any other provision.

________________________________
Name

________________________________
Social Security Number

________________________________
Signature Date

                                      -17-
<PAGE>

                                    EXHIBIT B

Two weeks vacation annually in addition to vacation provided by Company policy.

                                      -18-

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