Document:

Exhibit 10.1

Exhibit 10.1

PERFORMANCE AWARD AGREEMENT

THIS PERFORMANCE AWARD AGREEMENT (this “Agreement”) is made as of the 4th day of March, 2009,
between DYNEGY INC., a Delaware corporation (“Dynegy”), and all of its Affiliates (collectively,
the “Company”), and                                          (“Employee”). A copy of the Dynegy Inc. 2000 Long Term
Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part of this
Agreement as if fully set forth herein. Unless the context otherwise requires, all terms that are
not defined herein but which are defined in the Plan shall have the same meaning given to them in
the Plan when used herein.

1. The Grant. The Compensation and Human Resources Committee of the Board of
Directors (the “Committee”) granted to Employee on March 4, 2009 (“Effective Date”), a Performance
Award of                      performance units, each of which has a designated value of $100 and represents
the right to receive an amount payable in the form of cash or shares of Dynegy’s Class A Common
Stock (a “Share” or “Shares”), as determined in the discretion of the Committee. Employee
acknowledges receipt of a copy of the Plan, and agrees that this Performance Award shall be subject
to all of the terms and provisions of the Plan, including future amendments thereto, if any,
pursuant to the terms thereof, and to all of the terms and conditions of this Agreement. If it is
subsequently determined by the Committee, in its sole discretion, that the terms and conditions of
this Agreement and/or the Plan are not compliant with Code Section 409A, or any Treasury
regulations or Internal Revenue Service guidance promulgated thereunder, this Agreement and/or the
Plan may be amended accordingly.

2. Performance Period and Performance Goals. Subject to the provisions of Section 5
of this Agreement, the performance period for purposes of determining whether the Performance Award
will be paid shall be March 4, 2009 through March 4, 2012 (the “Performance Period”). The
performance goals for purposes of determining whether, and the extent to which, the Performance
Award will be paid are set forth in Exhibit 1 to this Agreement, which Exhibit is made a
part of this Agreement. Notwithstanding the foregoing, the Committee shall have discretion to
adjust the performance goals to reflect actions undertaken in the best interest of the Company and
its shareholders, including, but not limited to, strategic transactions affecting the performance
goals as well as recapitalizations, reorganizations, mergers, consolidations, split-ups,
split-offs, spin-offs, exchanges or other relevant changes in capitalization or structure of the
Company.

3. Payment. Subject to the provisions of Sections 4 and 5 of this Agreement, after
the Performance Period, the Performance Award shall be paid as soon as practicable after the
Committee determines whether and to what extent the performance goals have been achieved for the
Performance Period in accordance with the terms set forth in Exhibit 1 to this Agreement;
provided, however, that any such payment shall be made no later than December 31, 2012.

 

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

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

(1) death,

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

(3) Involuntary Termination (as defined in the Dynegy Inc. Executive Severance
Pay Plan, as amended and restated effective January 1, 2008), or

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

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

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

For purposes of this Agreement, the term “Cause” shall mean, and hence arise where, as
determined by the Committee in its sole discretion, Employee (i) has been convicted of a
misdemeanor involving moral turpitude or a felony; (ii) has failed to substantially perform the
duties of such Employee to the Company (other than such failure resulting from Employee’s
incapacity due to physical or mental condition) which results in a materially adverse effect upon
the Company, financial or otherwise; (iii) has refused without proper legal reason to perform
Employee’s duties and responsibilities to the Company; or (iv) has breached any material corporate
policy maintained and established by the Company that is applicable to Employee, provided such
breach results in a materially adverse effect upon the Company, financial or otherwise. In
addition, the term “Change in Control Termination” shall mean Employee’s employment is terminated
by the Company (or a successor thereto) without Cause, or by Employee following: (A) a significant
diminution in Employee’s responsibilities, authority or duties; (B) a material reduction in
Employee’s base salary; or (C) relocation of Employee’s principal place of employment by 50 miles
or more, all as determined by the Committee in its sole discretion.

 

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

If the amount paid in settlement of the Performance Award pursuant to the preceding paragraph
is zero, then, notwithstanding any other provision of the Performance Award, Employee shall receive
a payment equal to 100% of the amount that would have been paid had the Performance Period ended on
the date of the Change in Control and the Target set out on Exhibit I of the Performance Award had
been achieved. Such payment shall be made in the form of cash to Employee as soon as
administratively feasible but no later than the later of December 31 of the calendar year in which
the Change in Control occurs or the 15th day of the third month following the effective date of the
Change in Control.

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

 

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

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

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

 

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9. Miscellaneous.

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

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

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

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

	 	 	 	 	 	 	 
	 	 	DYNEGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Kevin Blodgett
 

Name: J. Kevin Blodgett
	 	 
	 

	 	 	 	Title: General Counsel & EVP, Administration	 	 

 

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Exhibit 1

Performance Unit Award Summary

For 2009 Long Term Incentive grants made to those at the Managing Director and above level, the
Compensation and Human Resources Committee decided to base two-thirds of the performance unit
awards on long-term stock price performance and one-third of the performance units awards on
accumulated Adjusted EBITDA, each over a three year period. The Committee believes these metrics
provide a simple, transparent and meaningful measure of Dynegy’s performance relative to its
long-term goal of creating value for stockholders. The material terms of the performance units are
summarized below:

	 	•	 	Denominated in $100 units, which are payable in the form of cash or stock, at the
Compensation and Human Resources Committee’s discretion;

	 
	 	•	 	With respect to two-thirds of the award, payment (if any) will be made in accordance
with Section 3 of the Agreement based on Dynegy’s three-year stock price performance;

	 	•	 	Starting share price is the average closing price of Dynegy’s Class A common
stock for the month February 2009 ($1.67); the Compensation and Human Resources
Committee determined the starting share price after reviewing and taking into
account various factors, including: (1) Dynegy’s share price and the total
shareholder return of similarly sized general industry companies over a three year
period from December 2005 through December 2008; (2) the underlying value of
Dynegy’s power generation portfolio based on various valuation methodologies; and
(3) potential growth opportunities that may be available to Dynegy;

	 
	 	•	 	Ending share price will be the average closing price of Dynegy’s Class A common
stock during the month of February 2012;

	 
	 	•	 	Awards are payable at threshold, target, and maximum levels as illustrated in the
table below; and

Stock Price Performance Goals for Performance Period

(March 4, 2009 — March 4, 2012)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 
	 	 	 	 
	Performance Goals
	 	Dynegy Inc.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Achieved Share	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Price*	 	$	2.50	 	 	$	4.00	 	 	$	6.00	 
	 
	 	 	 	 
	Payment Levels**
	 	% of each $100	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Performance Unit	 	 	0	%	 	 	100	%	 	 	200	%

 

 

 

	 	 	 
	*	 	Achieved Share Price shall be the ending Share price equal to the average closing
Share price for the month of February 2012 or, if applicable, the ending Share price
determined in accordance with Section 5 of the Agreement in the event of a Change in
Control.

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

	 	•	 	With respect to one-third of the award, payment (if any) will be made in accordance with
Section 3 of the Agreement based on Dynegy’s Adjusted EBITDA over the three year award
period. The starting date for this period shall be March 4, 2009 and the end date shall be
March 4, 2012.

	 	•	 	For purposes of this Agreement, the term Adjusted EBITDA shall be determined
based on the “Adjusted EBITDA” public guidance construction disclosed to the
investing community beginning in December 2008;

	 
	 	•	 	Awards are payable at threshold, target, and maximum levels as illustrated in the
table below; and

Adjusted Performance Goals for Performance Period

(March 4, 2009 — March 4, 2012)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted EBITDA
	 	$2.4 billion	 	$2.7 billion	 	$3.3 billion
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Payment Levels***
	 	 	0	%	 	 	100	%	 	 	200	%

	 	 	 
	***	 	Payment levels will be based upon the Adjusted EBITDA and will be interpolated
between Adjusted EBITDA goals.Exhibit 10.2

Exhibit 10.2

PERFORMANCE AWARD AGREEMENT

THIS PERFORMANCE AWARD AGREEMENT (this “Agreement”) is made as of the 4th day of March, 2009,
between DYNEGY INC., a Delaware corporation (“Dynegy”), and all of its Affiliates (collectively,
the “Company”), and                                          (“Employee”). A copy of the Dynegy Inc. 2000 Long Term
Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part of this
Agreement as if fully set forth herein. Unless the context otherwise requires, all terms that are
not defined herein but which are defined in the Plan shall have the same meaning given to them in
the Plan when used herein.

1. The Grant. The Compensation and Human Resources Committee of the Board of
Directors (the “Committee”) granted to Employee on March 4, 2009 (“Effective Date”), a Performance
Award of                      performance units, each of which has a designated value of $100 and represents
the right to receive an amount payable in the form of cash or shares of Dynegy’s Class A Common
Stock (a “Share” or “Shares”), as determined in the discretion of the Committee. Employee
acknowledges receipt of a copy of the Plan, and agrees that this Performance Award shall be subject
to all of the terms and provisions of the Plan, including future amendments thereto, if any,
pursuant to the terms thereof, and to all of the terms and conditions of this Agreement. If it is
subsequently determined by the Committee, in its sole discretion, that the terms and conditions of
this Agreement and/or the Plan are not compliant with Code Section 409A, or any Treasury
regulations or Internal Revenue Service guidance promulgated thereunder, this Agreement and/or the
Plan may be amended accordingly.

2. Performance Period and Performance Goals. Subject to the provisions of Section 5
of this Agreement, the performance period for purposes of determining whether the Performance Award
will be paid shall be March 4, 2009 through March 4, 2012 (the “Performance Period”). The
performance goals for purposes of determining whether, and the extent to which, the Performance
Award will be paid are set forth in Exhibit 1 to this Agreement, which Exhibit is made a
part of this Agreement. Notwithstanding the foregoing, the Committee shall have discretion to
adjust the performance goals to reflect actions undertaken in the best interest of the Company and
its shareholders, including, but not limited to, strategic transactions affecting the performance
goals as well as recapitalizations, reorganizations, mergers, consolidations, split-ups,
split-offs, spin-offs, exchanges or other relevant changes in capitalization or structure of the
Company.

3. Payment. Subject to the provisions of Sections 4 and 5 of this Agreement, after
the Performance Period, the Performance Award shall be paid as soon as practicable after the
Committee determines whether and to what extent the performance goals have been achieved for the
Performance Period in accordance with the terms set forth in Exhibit 1 to this Agreement;
provided, however, that any such payment shall be made no later than December 31, 2012.

 

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

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

(1) death,

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

(3) Involuntary Termination (as defined in the Dynegy Inc. Executive Severance
Pay Plan, as amended and restated effective January 1, 2008), or

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

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

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

For purposes of this Agreement, the term “Cause” shall mean, and hence arise as a result of,
as determined by the Committee in its sole discretion, the Employee’s (A) refusal to implement or
adhere to lawful policies or lawful directives of the Board; (B) engaging in conduct which is
materially injurious (monetarily or otherwise) to the Company (including, without limitation,
misuse of the Company’s funds or other property); (C) misconduct or dishonesty directly related to
the performance of the Employee’s duties for the Company or gross negligence in the performance of
the Employee’s duties for the Company; (D) conviction (or entering into a plea bargain admitting
criminal guilt) in any criminal proceeding involving a felony or a crime of moral turpitude; (E)
drug or alcohol abuse; or (F) continued failure to perform Employee’s duties which is not cured
within 10 days after written notice is provided to Employee by the Company. In addition, the term
“Change in Control Termination” shall mean Employee’s employment is terminated by the Company (or a
successor thereto) without Cause, or by Employee following: (A) a significant diminution in
Employee’s responsibilities, authority or duties; (B) a material reduction in Employee’s base
salary; or (C) relocation of Employee’s position outside the Houston, Texas metropolitan area, all
as determined by the Committee in its sole discretion.

 

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

If the amount paid in settlement of the Performance Award pursuant to the preceding paragraph
is zero, then, notwithstanding any other provision of the Performance Award, Employee shall receive
a payment equal to 100% of the amount that would have been paid had the Performance Period ended on
the date of the Change in Control and the Target set out on Exhibit I of the Performance Award had
been achieved. Such payment shall be made in the form of cash to Employee as soon as
administratively feasible but no later than the later of December 31 of the calendar year in which
the Change in Control occurs or the 15th day of the third month following the effective date of the
Change in Control.

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

 

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

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

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

 

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9. Miscellaneous.

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

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

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

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

	 	 	 	 	 	 	 
	 	 	DYNEGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ J. Kevin Blodgett 

Name: J. Kevin Blodgett
	 	 
	 

	 	 	 	Title: General Counsel & EVP, Administration	 	 

 

5

 

Exhibit 1

Performance Unit Award Summary

For 2009 Long Term Incentive grants made to those at the Managing Director and above level, the
Compensation and Human Resources Committee decided to base two-thirds of the performance unit
awards on long-term stock price performance and one-third of the performance units awards on
accumulated Adjusted EBITDA, each over a three year period. The Committee believes these metrics
provide a simple, transparent and meaningful measure of Dynegy’s performance relative to its
long-term goal of creating value for stockholders. The material terms of the performance units are
summarized below:

	 	•	 	Denominated in $100 units, which are payable in the form of cash or stock, at the
Compensation and Human Resources Committee’s discretion;

	 
	 	•	 	With respect to two-thirds of the award, payment (if any) will be made in accordance
with Section 3 of the Agreement based on Dynegy’s three-year stock price performance;

	 	•	 	Starting share price is the average closing price of Dynegy’s Class A common
stock for the month February 2009 ($1.67); the Compensation and Human Resources
Committee determined the starting share price after reviewing and taking into
account various factors, including: (1) Dynegy’s share price and the total
shareholder return of similarly sized general industry companies over a three year
period from December 2005 through December 2008; (2) the underlying value of
Dynegy’s power generation portfolio based on various valuation methodologies; and
(3) potential growth opportunities that may be available to Dynegy;

	 
	 	•	 	Ending share price will be the average closing price of Dynegy’s Class A common
stock during the month of February 2012;

	 
	 	•	 	Awards are payable at threshold, target, and maximum levels as illustrated in the
table below; and

Stock Price Performance Goals for Performance Period

(March 4, 2009 — March 4, 2012)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 
	 	 	 	 
	Performance Goals
	 	Dynegy Inc.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Achieved Share	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Price*	 	$	2.50	 	 	$	4.00	 	 	$	6.00	 
	 
	 	 	 	 
	Payment Levels**
	 	% of each $100	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Performance Unit	 	 	0	%	 	 	100	%	 	 	200	%

 

 

 

	 	 	 
	*	 	Achieved Share Price shall be the ending Share price equal to the average closing
Share price for the month of February 2012 or, if applicable, the ending Share price
determined in accordance with Section 5 of the Agreement in the event of a Change in
Control.

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

	 	•	 	With respect to one-third of the award, payment (if any) will be made in accordance with
Section 3 of the Agreement based on Dynegy’s Adjusted EBITDA over the three year award
period. The starting date for this period shall be March 4, 2009 and the end date shall be
March 4, 2012.

	 	•	 	For purposes of this Agreement, the term Adjusted EBITDA shall be determined
based on the “Adjusted EBITDA” public guidance construction disclosed to the
investing community beginning in December 2008;

	 
	 	•	 	Awards are payable at threshold, target, and maximum levels as illustrated in the
table below; and

Adjusted Performance Goals for Performance Period

(March 4, 2009 — March 4, 2012)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 
	 	 	 	 
	Adjusted EBITDA
	 	$2.4 billion	 	$2.7 billion	 	$3.3 billion
	 
	 	 	 	 
	Payment Levels***
	 	 	0	%	 	 	100	%	 	 	200	%

	 	 	 
	***	 	Payment levels will be based upon the Adjusted EBITDA and will be interpolated
between Adjusted EBITDA goals.

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