Document:

EX-10.2

 

Exhibit 10.2

NRG Energy, Inc.

Executive & Key Management

Change-in-Control

and General Severance Plan

(Amended and Restated April 25, 2007)

 

 

Contents

	 	 	 	 	 
	 
	Article 1. Establishment and Term of the Plan
	 	 	1	 
	 
	 	 	 	 
	Article 2. Definitions
	 	 	2	 
	 
	 	 	 	 
	Article 3. Severance Benefits
	 	 	5	 
	 
	 	 	 	 
	Article 4. Confidentiality and Noncompetition
	 	 	8	 
	 
	 	 	 	 
	Article 5. Excise Tax Equalization Payment
	 	 	11	 
	 
	 	 	 	 
	Article 6. Legal Fees and Notice
	 	 	11	 
	 
	 	 	 	 
	Article 7. Successors and Assignment
	 	 	12	 
	 
	 	 	 	 
	Article 8. Miscellaneous
	 	 	12	 

 

 

NRG Energy, Inc.

Executive & Key Management Change-in-Control

and General Severance Plan

Article 1. Establishment and Term of the Plan

     1.1 Establishment of the Plan. NRG Energy, Inc. (hereinafter referred to as the
“Company”) hereby establishes a severance plan to be known as the “NRG Energy, Inc. Executive
Change-in-Control and General Severance Plan” (the “Plan”). The Plan provides severance benefits to
certain employees of the Company (“Executives”) upon certain terminations of employment from the
Company.

     The Company considers the establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company and its stockholders. In
this connection, the Company recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control may arise 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.

     Accordingly, 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 circumstances arising from the possibility of a Change in
Control of the Company.

     1.2 Initial Term. This Plan will commence on May 24, 2006 (the “Effective Date”) and shall
continue in effect for a period of three (3) years (the “Initial Term”).

     1.3 Successive Periods. The term of this Plan shall automatically be extended for one (1)
additional year at the end of the Initial Term, and then again after each successive one (1) year
period thereafter (each such one (1) year period following the Initial Term is referred to as a
“Successive Period”). However, the Committee may terminate this Plan at the end of the Initial
Term, or at the end of any Successive Period thereafter, by giving the Executives written notice of
intent to terminate the Plan, delivered at least six (6) months prior to the end of such Initial
Term or Successive Period. If such notice is properly delivered by the Company, this Plan, along
with all corresponding rights, duties, and covenants, shall automatically expire at the end of the
Initial Term or Successive Period then in progress.

     1.4 Change-in-Control Renewal. Notwithstanding the provisions of Section 1.3 above, in the
event that a Change in Control of the Company occurs during the Initial Term or any Successive
Period, upon the effective date of such Change in Control, the term of this Plan shall
automatically and irrevocably be renewed for a period of two (2) years from the effective date of
such Change in Control. Further, this Plan may be assigned to the successor in such Change in
Control, as further provided in Article 8 herein. This Plan shall thereafter automatically
terminate following such two (2) year Change-in-Control renewal period.

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Article 2. Definitions

     Whenever used in this Plan, the following terms shall have the meanings set forth below
and, when the meaning is intended, the initial letter of the word is capitalized.

	 	(a)	 	“Base Salary” means the greater of the Executive’s annual rate of salary, whether or
not deferred, at: (i) the Effective Date of Termination or (ii) at the date of the Change
in Control.
	 
	 	(b)	 	“Beneficiary” means the persons or entities designated or deemed designated by the
Executive pursuant to Section 8.5 herein.
	 
	 	(c)	 	“Board” means the Board of Directors of the Company.
	 
	 	(d)	 	“Cause” shall mean one or more of the following:

	 	(i)	 	The conviction of, or an agreement to a plea of nolo contendere to,
any felony or other crime involving moral turpitude; or
	 
	 	(ii)	 	The Executive’s willful and continuing refusal to substantially
perform duties as reasonably directed by the Board under this or any other
agreement (after receipt of written notice from the Board setting forth such
duties and responsibilities to be performed); or
	 
	 	(iii)	 	In carrying out the Executive’s duties, the Executive engages in
conduct that constitutes willful gross neglect or willful gross misconduct which,
in either case, results in demonstrable harm to the business, operations,
prospects, or reputation of the Company; or
	 
	 	(iv)	 	Any other material breach of Article 4 of this Plan which is not
cured to the Board’s reasonable satisfaction within fifteen (15) days after
written notice thereof to the Executive.
	 
	 	 	 	For purposes of this Plan, there shall be no termination for Cause pursuant to
subsections (i) through (iv) above, unless a written notice, containing a
detailed description of the grounds constituting Cause hereunder, is delivered to
the Executive stating the basis for the termination. Upon receipt of such notice,
the Executive shall be given thirty (30) days to fully cure and remedy the
neglect or conduct that is the basis of such claim. If the Executive fails to
fully cure and remedy such neglect or misconduct within such thirty (30) day
period, the Executive shall have an opportunity to be heard before the full
Board. After such hearing, a termination for Cause shall only occur if there is a
vote of three-quarters (3/4) of the Board to terminate the Executive for Cause.

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	 	(e)	 	“Change in Control” shall mean the first to occur of any of the following events:

	 	(i)	 	Any “person” (as that term is used in Sections 13 and 14(d)(2) of the
Securities Exchange Act of 1934 (“Exchange Act”)) becomes the “Beneficial Owner”
(as that term is used in Section 13(d) of the Exchange Act), directly or
indirectly, of fifty percent (50%) or more of the Company’s capital stock entitled
to vote in the election of directors, excluding any “person” who becomes a
“beneficial owner” in connection with a Business Combination (as defined in
paragraph (iii) below) which does not constitute a Change in Control under said
paragraph (iii); or
	 
	 	(ii)	 	Persons who on the Effective Date constitute the Board (the
“Incumbent Directors”) cease for any reason, including without limitation, as a
result of a tender offer, proxy contest, merger, or similar transaction, to
constitute at least a majority thereof, provided that any person becoming a
director of the Company subsequent to the Effective Date shall be considered an
Incumbent Director if such person’s election or nomination for election was
approved by a vote of at least two-thirds (2/3) of the Incumbent Directors; but
provided further, that any such person whose initial assumption of office is in
connection with an actual or threatened election contest relating to the election
of members of the Board or other actual or threatened solicitation of proxies or
consents by or on behalf of a “person” (as defined in Sections 13(d) and 14(d) of
the Exchange Act) other than the Board, including by reason of agreement intended
to avoid or settle any such actual or threatened contest or solicitation, shall
not be considered an Incumbent Director; or
	 
	 	(iii)	 	Consummation of a reorganization, merger, consolidation, or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination, all or substantially all of the individuals and entities who were the
beneficial owners of outstanding voting securities of the Company immediately
prior to such Business Combination beneficially own, directly or indirectly, more
than fifty percent (50%) of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the
case may be, of the company resulting from such Business Combination (including,
without limitation, a company which, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the outstanding
voting securities of the Company; or
	 
	 	(iv)	 	The stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.

	 	(f)	 	“Code” means the United States Internal Revenue Code of 1986, as amended, and any
successors thereto.

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	 	(g)	 	“Committee” means the Compensation Committee of the Board or any other committee
appointed by the Board to perform the functions of the Compensation Committee.
	 
	 	(h)	 	“Company” means NRG Energy, Inc., a Delaware corporation, or any successor thereto as
provided in Section 7 herein.
	 
	 	(i)	 	“Disability” shall mean the Executive’s inability to perform the essential duties,
responsibilities, and functions of his position with the Company and its affiliates as a
result of any mental or physical disability or incapacity even with reasonable
accommodations of such disability or incapacity, provided by the Company and its
affiliates, or if providing such accommodations would be unreasonable, for a period of
twelve (12) months. The Executive shall cooperate in all respects with the Company if a
question arises as to whether he has become disabled (including, without limitation,
submitting to an examination by a medical doctor or other health care specialists selected
by the Company and reasonably acceptable to the Executive and authorizing such medical
doctor or such other health care specialist to discuss the Executive’s condition with the
Company).
	 
	 	(j)	 	“Effective Date” means the commencement date of this Plan as specified in Section
1.2 of this Plan.
	 
	 	(k)	 	“Effective Date of Termination” means the date on which a Qualifying Termination
occurs, as defined hereunder, which triggers the payment of Severance Benefits hereunder.
	 
	 	(l)	 	“Former Parent Company” means Xcel Energy, Inc., a Minnesota corporation, or any
successor thereto.
	 
	 	(m)	 	“Good Reason” shall mean without the Executive’s express written consent the
occurrence of any one or more of the following:

	 	(i)	 	The Company materially reduces the amount of the Executive’s then
current Base Salary or the target for his annual bonus; or
	 
	 	(ii)	 	A material reduction in the Executive’s benefits under or relative
level of participation in the Company’s employee benefit or retirement plans,
policies, practices, or arrangements in which the Executive participates as of
the Effective Date of this Plan; or
	 
	 	(iii)	 	A material diminution in the Executive’s title, authority, duties,
or responsibilities or the assignment of duties to the Executive which are
materially inconsistent with his position; or
	 
	 	(iv)	 	The failure of the Company to obtain in writing the obligation to
perform or be bound by the terms of this Plan by any successor to the Company or a
purchaser

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	 	 	 	of all or substantially all of the assets of the Company within fifteen (15)
days after a merger, consolidation, sale, or similar transaction.

	 	 	 	For purposes of this Plan, the Executive is not entitled to assert that his termination
is for Good Reason unless the Executive gives the Board written notice of the event or
events which are the basis for such claim within ninety (90) days after the event or
events occur, describing such claim in reasonably sufficient detail to allow the Board
to address the event or events and a period of not less than thirty (30) days after to
cure or fully remedy the alleged condition.
	 
	 	(n)	 	“Key Employee” means any Eligible Employee described in section 409A(a)(2)(B)(i) of
the Code.
	 
	 	(o)	 	“Notice of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Plan relied upon, and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.
	 
	 	(p)	 	“Qualifying Termination” means:

	 	(i)	 	If such event occurs within twenty-four (24) months immediately
following a Change in Control:

	 	(A)	 	An involuntary termination of the Executive’s
employment by the Company for reasons other than Cause pursuant to a Notice
of Termination delivered to the Executive by the Company; or
	 
	 	(B)	 	A voluntary termination by the Executive for Good
Reason pursuant to a Notice of Termination delivered to the Company by the
Executive; or

	 	(ii)	 	If such event occurs at any other time:

	 	(A)	 	An involuntary termination of the Executive’s
employment by the Company for reasons other than Cause pursuant to a Notice
of Termination delivered to the Executive by the Company.

	 	(q)	 	“Retirement” shall have the meaning ascribed to such term in the Company’s
tax-qualified retirement plan or under the successor or replacement of such retirement
plan if it is then no longer in effect.
	 
	 	(r)	 	“Severance Benefits” means the payment of Change-in-Control or General (as
appropriate) Severance compensation as provided in Article 3 herein.

Article 3. Severance Benefits

     3.1 Right to Severance Benefits.

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	 	(a)	 	Change-in-Control Severance Benefits. The Executive shall be entitled
to receive from the Company Change-in-Control Severance Benefits, as described in
Section 3.2 herein, if a Qualifying Termination of the Executive’s employment has
occurred within twenty-four (24) months immediately following a Change in Control
of the Company.
	 
	 	(b)	 	General Severance Benefits. The Executive (other than any Tier III
Executive) shall be entitled to receive from the Company General Severance
Benefits, as described in Section 3.3 herein, if a Qualifying Termination of the
Executive’s employment has occurred other than during the twenty-four (24) months
immediately following a Change in Control.
	 
	 	(c)	 	No Severance Benefits. The Executive shall not be entitled to receive
Severance Benefits if the Executive’s employment with the Company ends for reasons
other than a Qualifying Termination.
	 
	 	(d)	 	General Release and Acknowledgement of Restrictive Covenants. As a
condition to receiving Severance Benefits under either Section 3.2 or 3.3 herein,
the Executive shall be obligated to execute a general release of claims in favor of
the Company, its current and former affiliates and stockholders, and the current
and former directors, officers, employees, and agents of the Company in a form
acceptable to the Company. The Executive must also execute a notice acknowledging
the restrictive covenants in Article 4.
	 
	 	(e)	 	No Duplication of Severance Benefits. If the Executive becomes entitled
to Change-in-Control Severance Benefits, the Severance Benefits provided for under
Section 3.2 hereunder shall be in lieu of all other Severance Benefits provided to
the Executive under the provisions of this Plan and any other Company-related or
Former Parent Company-related severance plans, programs, or agreements including,
but not limited to, the Severance Benefits under Section 3.3 herein. Likewise, if
the Executive becomes entitled to General Severance Benefits, the Severance
Benefits provided under Section 3.3 hereunder shall be in lieu of all other
Severance Benefits provided to the Executive under the provisions of this Plan and
any other Company-related severance plans, programs, or other agreements including,
but not limited to, the Severance Benefits under Section 3.2 herein.

     3.2 Description of Change-in-Control Severance Benefits. In the event the Executive becomes
entitled to receive Change-in-Control Severance Benefits, as provided in Section 3.1(a) herein, the
Company shall provide the Executive with the following:

	 	(a)	 	A lump-sum amount paid within forty-five (45) calendar days of the
Effective Date of Termination equal to the Executive’s unpaid Base Salary, accrued
vacation pay, unreimbursed business expenses, and all other items earned by and
owed to the Executive through and including the Effective Date of Termination.

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	 	(b)	 	A benefit amount equal to: (i) two and ninety-nine one-hundredths
(2.99) for Tier I Executives (as identified in Appendix A), or (ii) two (2) for
Tier II Executives (as identified in Appendix A) times the sum of the following:
(A) the Executive’s Base Salary and (B) the Executive’s annual target bonus
opportunity in the year of termination. A Tier III Executive (as identified in
Appendix A) shall be entitled to a benefit amount equal to (i) one and one-half
(1.5) for Tier III-Level 1 Executives (as identified on Appendix A), (ii) one
(i) for Tier III-Level 2 Executives (as identified on Appendix A) times the
Executive’s Base Salary. Unless otherwise determined by the Board, and at the
Board’s discretion, such benefit amount shall be paid out over a period of: (i)
thirty-six (36) months for Tier I Executives (as identified in Appendix A), (ii)
twenty-four (24) months for Tier II Executives (as identified in Appendix A), (iii)
eighteen (18) months for Tier III-Level 1 Executives (as identified on Appendix A),
or (iv) twelve (12) months for Tier IV-Level 2 Executives (as identified on
appendix A) in accordance with the payroll procedures of the Company, to commence
on the next regularly scheduled payroll cycle immediately following the date on
which the Executive’s general release becomes effective and irrevocable.
	 
	 	(c)	 	In the case of Tier I and Tier II Executives only, a lump-sum amount,
paid within forty-five (45) calendar days of the Effective Date of Termination,
equal to the Executive’s then current target bonus opportunity established under
the bonus plan in which the Executive is then participating, for the plan year in
which a Qualifying Termination occurs, adjusted on a pro rata basis based on the
number of days the Executive was actually employed during the bonus plan year in
which the Qualifying Termination occurs.
	 
	 	(d)	 	In the case of Tier I and Tier II Executives only, continuation for
eighteen (18) months of the Executive’s medical and dental coverage.
	 
	 	 	 	These benefits shall be provided by the Company to the Executive beginning
immediately upon the Effective Date of Termination. Such benefits shall be
provided to the Executive at the same coverage level and cost to the Executive as
in effect immediately prior to the Executive’s Effective Date of Termination.
	 
	 	 	 	Notwithstanding the above, these medical benefits shall be discontinued prior to
the end of the stated continuation period in the event the Executive receives
substantially similar benefits from a subsequent employer, as determined solely
by the Committee in good faith. For purposes of enforcing this offset provision,
the Executive shall be deemed to have a duty to keep the Company informed as to
the terms and conditions of any subsequent employment and the corresponding
benefits earned from such employment, and shall provide, or cause to provide, to
the Company in writing correct, complete, and timely information concerning the
same.
	 
	 	(e)	 	Treatment of outstanding long-term incentives shall be in accordance
with the governing plan document and award agreements, if any.

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	 	(f)	 	Notwithstanding anything herein to the contrary, in the case of any Key
Employee such Change in Control Severance Benefits shall be paid as soon as
practicable following the date six months after the Effective Date of Termination;
provided, the foregoing shall only apply to the extent the Company determines such
delay is required under section 409A of the Code.

     3.3 Description of General Severance Benefits. Only Tier I and Tier II Executives shall be
eligible to receive General Severance Benefits under the Plan; Tier III Executives shall not be
eligible to receive General Severance Benefits under the Plan (but may be eligible to receive
benefits under the Company’s generally applicable severance plan, as may be in effect from time to
time). In the event the Executive becomes entitled to receive General Severance Benefits as
provided in Section 3.1(b) herein, the Company shall provide the Executive with the following:

	 	(a)	 	A lump-sum amount, paid within forty-five (45) calendar days of the
Effective Date of Termination, equal to the Executive’s unpaid Base Salary, accrued
vacation pay, unreimbursed business expenses, and all other items earned by and
owed to the Executive through and including the Effective Date of Termination.
	 
	 	(b)	 	A benefit amount equal to one and one-half (1.5) for Tier I and Tier II
Executives (as identified in Appendix A) times the Executive’s Base Salary. Such
benefit amount shall be paid out over a period of eighteen (18) months in
accordance with the payroll procedures of the Company, to commence on the next
regularly scheduled payroll cycle immediately following the date on which the
Executive’s general release becomes effective and irrevocable.
	 
	 	(c)	 	Continuation for eighteen (18) months of the Executive’s medical and
dental insurance coverage.
	 
	 	 	 	These benefits shall be provided by the Company to the Executive beginning
immediately upon the Effective Date of Termination. Such benefits shall be
provided to the Executive at the same coverage level and cost to the Executive as
in effect immediately prior to the Executive’s Effective Date of Termination.
	 
	 	 	 	Notwithstanding the above, these medical insurance benefits shall be discontinued
prior to the end of the stated continuation period in the event the Executive
receives substantially similar benefits from a subsequent employer, as determined
solely by the Committee in good faith. For purposes of enforcing this offset
provision, the Executive shall be deemed to have a duty to keep the Company
informed as to the terms and conditions of any subsequent employment and the
corresponding benefits earned from such employment, and shall provide, or cause
to provide, to the Company in writing correct, complete, and timely information
concerning the same.
	 
	 	(d)	 	Treatment of outstanding long-term incentives shall be in accordance
with the governing plan document and award agreements, if any.

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	 	(e)	 	Notwithstanding anything herein to the contrary, in the case of any Key
Employee such General Severance Benefits shall be paid as soon as practicable
following the date six months after the Effective Date of Termination; provided,
the foregoing shall only apply to the extent the Company determines such delay is
required under section 409A of the Code.

Article 4. Confidentiality and Noncompetition

     In the event the Executive becomes entitled to receive Change-in-Control Severance
Benefits as provided in Section 3.2 herein or General Severance Benefits as provided in Section 3.3
herein, the following shall apply:

	 	(a)	 	Confidential Information. The Executive acknowledges that the information,
observations, and data (including trade secrets) obtained by him while employed by the
Company concerning the business or affairs of the Company or any of its affiliates
(“Confidential Information”) are the property of the Company or such affiliate. Therefore,
except in the course of the Executive’s duties to the Company or as may be compelled by
law or appropriate legal process, the Executive agrees that he shall not disclose to any
person or entity or use for his own purposes any Confidential Information or any
confidential or proprietary information of other persons or entities in the possession of
the Company and its affiliates (“Third Party Information”), without the prior written
consent of the Board, unless and to the extent that the Confidential Information or Third
Party Information becomes generally known to and available for use by the public other
than as a result of the Executive’s acts or omissions. Except in the course of the
Executive’s duties to Company or as may be compelled by law or appropriate legal process,
the Executive will not, during his employment with the Company, or permanently thereafter,
directly or indirectly use, divulge, disseminate, disclose, lecture upon, or publish any
Confidential Information, without having first obtained written permission from the Board
to do so. As of the Effective Date of Termination, the Executive shall deliver to the
Company, or at any other time the Company may reasonably request, all memoranda, notes,
plans, records, reports, computer files, disks and tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to Third Party Information,
Confidential Information, or the business of the Company, or its affiliates which he may
then possess or have under his control.
	 
	 	(b)	 	Intellectual Property, Inventions, and Patents. The Executive acknowledges that all
discoveries, concepts, ideas, inventions, innovations, improvements, developments,
methods, trade secrets, designs, analyses, drawings, reports, patent applications,
copyrightable work and mask work (whether or not including any confidential information),
and all registrations or applications related thereto, all other proprietary information
and all similar or related information (whether or not patentable) which may relate to the
Company’s or any of its affiliates’ actual or anticipated business, research and
development, or existing or future products or services and which are conceived,
developed, or made by the Executive (whether alone or jointly with others) while employed
by the Company and its affiliates (“Work Product”), belong to the Company or such
affiliate. The Executive shall promptly disclose such Work Product to the Board

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	 	 	 	and, at the Company’s expense, perform all actions reasonably requested by the Board
(whether during or after the Executive’s employment with the Company) to establish and
confirm such ownership (including, without limitation, assignments, consents, powers of
attorney, and other instruments). The Executive acknowledges that all applicable Work
Product shall be deemed to constitute “works made for hire” under the U.S. Copyright Act
of 1976, as amended. To the extent any Work Product is not deemed a work made for hire,
then the Executive hereby assigns to the Company or such affiliate all right, title, and
interest in and to such Work Product, including all related intellectual property
rights.
	 
	 	 	 	The Executive is hereby advised that the above paragraph regarding the Company’s and its
affiliates’ ownership of Work Product does not apply to any invention for which no
equipment, supplies, facilities, or trade secret information of the Company or any
affiliate was used and which was developed entirely on the Executive’s own time, unless:
(i) the invention relates to the business of the Company or any affiliate or to the
Company’s or any affiliate’s actual or demonstrably anticipated research or development,
or (ii) the invention results from any work performed by the Executive for the Company
or any affiliate.
	 
	 	(c)	 	Noncompete. In further consideration of the compensation to be paid to the Executive
hereunder, the Executive acknowledges that during the course of his employment with the
Company and its affiliates he shall become familiar with the Company’s trade secrets and
with other Confidential Information concerning the Company and its affiliates and that his
services shall be of special, unique, and extraordinary value to the Company and its
affiliates, and therefore, the Executive agrees that, during the Executive’s employment
with the Company and for one (1) year thereafter (the “Noncompete Period”), the Executive
shall not directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, be employed in an executive, managerial, or
administrative capacity by, or in any manner engage in any company engaged in the business
of wholesale power generation which competes with the businesses of the Company or its
affiliates, as such businesses exist or are in process during the Executive’s employment
with the Company, within any geographical area in which the Company or its affiliates
engage or have definitive plans to engage in such businesses. Nothing herein shall
prohibit the Executive from being a passive owner of not more than two percent (2%) of the
outstanding stock of any class of a corporation which is publicly traded, so long as the
Executive has no active participation in the business of such corporation. Notwithstanding
the foregoing, the provisions of this Article 4(c) shall not apply in the case of
termination of the Executive’s employment pursuant to any material breach of the Company’s
obligations under Article 3 which remains uncured for more than twenty (20) days after
notice is received from the Executive of such breach, which such notice shall include a
detailed description of the grounds constituting such breach.
	 
	 	(d)	 	Nonsolicitation. During the Noncompete Period, the Executive shall not directly or
indirectly through another person or entity: (i) induce or attempt to induce any employee
of the Company or any of its affiliates to leave the employ of the Company or such
affiliate, or in any way interfere with the relationship between the Company or any
affiliate and any employee thereof; (ii) hire any person who was an employee of the

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	 	 	 	Company or any affiliate during the last six (6) months of the Executive’s employment
with the Company; or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee, or other business relation of the Company or any affiliate to
cease doing business with the Company or such affiliate, or in any interfere with the
relationship between any such customer, supplier, licensee, or business relation and the
Company or any affiliate (including, without limitation, making any negative or
disparaging statements or communications regarding the Company or its affiliates).
	 
	 	(e)	 	Duration, Scope, or Area. If, at the time of enforcement of this Article 4, a court
shall hold that the duration, scope, or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum duration, scope, or
area reasonable under such circumstances shall be substituted for the stated duration,
scope, or area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope, and area permitted by law.
	 
	 	(f)	 	Company Enforcement. In the event of a breach or a threatened breach by the Executive
of any of the provisions of this Article 4, the Company would suffer irreparable harm, and
in addition and supplementary to other rights and remedies existing in its favor, the
Company shall be entitled to specific performance and/or injunctive or other equitable
relief from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security). In
addition, in the event of a breach or violation by the Executive of Article 4(c), the
Noncompete Period shall be automatically extended by the amount of time between the
initial occurrence of the breach or violation and when such breach or violation has been
duly cured.

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Article 5. Excise Tax Equalization Payment

     In the event that any payment or benefit made or provided to or for the benefit of a
Tier I or Tier II Executive in connection with this Plan or his employment with the Company or the
termination thereof (a “Payment”) is determined to be subject to any excise tax (“Excise Tax”)
imposed by Section 4999 of the Code (or any successor to such Section), the Company shall pay to
such Executive, prior to the time any Excise Tax is payable with respect to such Payment (through
withholding or otherwise), an additional amount (a “Gross-Up Payment”) which, after the imposition
of all income, employment, excise and other taxes, penalties and interest thereon, is equal to the
sum of: (i) the Excise Tax on such Payment, plus (ii) any penalty and interest assessments
associated with such Excise Tax. The determination of whether any Payment is subject to an Excise
Tax and, if so, the amount and time of any Gross-Up Payment pursuant to this Article 5 shall be
made by an independent auditor (the “Auditor”) jointly selected by the parties and paid by the
Company. Unless the Executive agrees otherwise in writing, the Auditor shall be a nationally
recognized United States public accounting firm that has not, during the two (2) years preceding
the date of its selection, acted in any way on behalf of the Company or any of its affiliates. If
the parties cannot agree on the firm to serve as the Auditor, then the parties shall each select
one (1) accounting firm and those two (2) firms shall jointly select the accounting firm to serve
as the Auditor. The parties shall cooperate with each other in connection with any Proceeding,
defined as any threatened or actual action, suit, or proceeding, whether civil, criminal,
administrative, investigative, appellate, or other, or Claim, defined as any claim, demand,
request, investigation, dispute, controversy, threat, discovery request, or request for testimony
or information, relating to the existence or amount of any liability for Excise Tax. All expenses
relating to any such Proceeding or Claim (including attorneys’ fees and other expenses incurred by
the Executive in connection therewith) shall be paid by the Company promptly upon demand by the
Executive, and any such payment shall be subject to a Gross-Up Payment under this Article 5 in the
event that the Executive is subject to Excise Tax on such payment. This Article 5 shall apply
irrespective of whether a Change in Control has occurred.

Article 6. Legal Fees and Notice

     6.1 Payment of Legal Fees. Except as otherwise agreed to by the parties, the Company
shall pay the Executive for costs of litigation or other disputes including, without limitation,
reasonable attorneys’ fees incurred by the Executive in asserting any claims or defenses under this
Plan, except that the Executive shall bear his own costs of such litigation or disputes (including,
without limitation, attorneys’ fees) if the court (or arbitrator) finds in favor of the Company
with respect to any claims or defenses asserted by the Executive.

     6.2 Notice. Any notices, requests, demands, or other communications provided for by this Plan
shall be sufficient if in writing and if sent by registered or certified mail to the Executive at
the last address he or she has filed in writing with the Company or, in the case of the Company, at
its principal offices.

12

 

Article 7. Successors and Assignment

     7.1 Successors to the Company. The Company shall require any successor (whether direct
or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) of all or a significant portion of the assets of the Company by
agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to
perform under this Plan in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Regardless of whether such agreement is
executed, the terms of this Plan shall be binding upon any successor in accordance with the
operation of law and such successor shall be deemed the “Company” for purposes of this Plan.

     7.2 Assignment by the Executive. This Plan shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive dies while any amount would still be payable
to him or her hereunder had he or she continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the Executive’s
Beneficiary. If the Executive has not named a Beneficiary, then such amounts shall be paid to the
Executive’s devisee, legatee, or other designee, or if there is no such designee, to the
Executive’s estate.

Article 8. Miscellaneous

     8.1 Employment Status. Except as may be provided under any other agreement between the
Executive and the Company, the employment of the Executive by the Company is “at will” and may be
terminated by either the Executive or the Company at any time, subject to applicable law.

     8.2 Entire Plan. This Plan supersedes any prior agreements or understandings, oral or written,
between the parties hereto, with respect to the subject matter hereof, and constitutes the entire
agreement of the parties with respect thereto. Without limiting the generality of the foregoing
sentence, this Plan completely supersedes any and all prior employment agreements entered into by
and between the Company and the Executive, and all amendments thereto, in their entirety.

     8.3 Severability. In the event that any provision or portion of this Plan shall be determined
to be invalid or unenforceable for any reason, the remaining provisions of this Plan shall be
unaffected thereby and shall remain in full force and effect.

     8.4 Tax Withholding. The Company may withhold from any benefits payable under this Plan all
federal, state, city, or other taxes as may be required pursuant to any law or governmental
regulation or ruling.

     8.5 Beneficiaries. The Executive may designate one (1) or more persons or entities as the
primary and/or contingent beneficiaries of any amounts to be received under this Plan. Such
designation must be in the form of a signed writing acceptable to the Board or the Board’s
designee. The Executive may make or change such designation at any time.

     8.6 Payment Obligation Absolute. The Company’s obligation to make the payments provided for
herein shall be absolute and unconditional, and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or anyone else.

13

 

     Except as provided in Sections 3.2(d) and 3.3(c) of this Plan, the Executive shall not be
obligated to seek other employment in mitigation of the amounts payable or arrangements made under
any provision of this Plan, and the obtaining of any such other employment shall in no event effect
any reduction of the Company’s obligations to make the payments and arrangements required to be
made under this Plan.

     8.7 Contractual Rights to Benefits. Subject to approval and ratification by the Board of
Directors, this Plan establishes and vests in the Executive a contractual right to the benefits to
which he or she is entitled hereunder. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise
set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made
or required hereunder.

     8.8 Modification. No provision of this Plan may be modified, waived, or discharged unless such
modification, waiver, or discharge is agreed to in writing and signed by each and every Executive
then covered by the Plan and by an authorized member of the Committee, or by the respective
parties’ legal representatives and successors.

     8.9 Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine; the plural shall include the singular and the singular
shall include the plural.

     8.10 Applicable Law. To the extent not preempted by the laws of the United States, the laws of
the state of New Jersey shall be the controlling law in all matters relating to this Plan.

     IN WITNESS WHEREOF, the Company has executed this Plan on this 24th day of May
2006.

ATTEST

NRG Energy, Inc.

/S/ DAVID W. CRANE

David W. Crane

President and Chief Executive Officer

14EX-10.1

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

May 1, 2007

Atari, Inc.

417 Fifth Avenue

New York, NY 10016

 

Ladies and Gentlemen:

 

Under Section 4(a) of the Employment Agreement dated September 1, 2006 (the “Employment Agreement”) between
Atari, Inc. (“Atari”) and me, I am entitled to receive base salary at the rate of $600,000 per annum. In consideration for Atari’s paying bonuses to employees of Atari for the year ended March 31, 2007 in
accordance with recommendations I made to the Compensation Committee on April 3, 2007 (“Recommended Bonuses”), I agree as follows:

 

1.  If Atari pays, on or before May 15, 2007, Recommended Bonuses totaling approximately $250,000 with regard to the fiscal year ending March 31, 2007, (the base salary to which I will be entitled during the fiscal year ending March 31, 2008, will be at the rate of $500,000, not $600,000, with the reduction
to be reflected as nearly as possible equally in each installment of base salary that I receive. For the avoidance of doubt, after March 31, 2008, my base salary will be at the rate of $600,000 per year.

 

2.  If Atari pays Recommended Bonuses totaling approximately $250,000 with regard to the fiscal year ended March, 31, 2007, as provided in Paragraph 1 above, and during the fiscal year ending March 31, 2008, the Term (as defined therein) of the Employment Agreement and my employment by Atari are terminated, to the extent that I am entitled under Section 11 of the
Employment Agreement to receive sums from Atari, other than non-reimbursed business expenses, Atari may reduce the sums that are due to me by the amount, if any, that the reductions in my base salary
reflected in installments of base salary that I have received total less than $100,000. For the avoidance of doubt, should my employment be terminated (by either Atari or me) after March 31, 2008, any sums that are due under Section 11 of the Employment Agreement shall be based on a base salary at the rate of $600,000 per year.

 

3.  Except as specifically stated in paragraphs 1 and 2, the terms of the Employment Agreement will remain in full force and effect. Without limiting what is said in the preceding sentence, nothing in this document will affect any of my rights under Section 4(b) or (c) of the Employment Agreement or under any other provision of the Employment Agreement other than Sections 4(a) and 11.

 

Please sign a copy of this letter to acknowledge that Atari will pay Recommended Bonuses totaling approximately $250,000 with regard to the fiscal year ended March 31, 2007 on or before May 15, 2007. When this letter is signed by Atari (but not before that), this letter will constitute an amendment to the Employment Agreement and I will be bound by that amendment.

 

Very truly yours,

 

/s/ David Pierce                                            

 

DAVID PIERCE

 

1

 

Atari, Inc. agrees to pay Recommended Bonuses totaling approximately $250,000 with regard to the fiscal year ended March 31, 2007.

 

ATARI, Inc.

 

By: /s/ Arturo Rodriguez                                        
      Title: Vice President and
Controller

 

2

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