Document:

Exhibit 10.2

 

RELIANT ENERGY, INC.

2002 LONG TERM INCENTIVE PLAN

LONG TERM INCENTIVE AWARD

 

AWARD AGREEMENT

 

Pursuant to
this award agreement (“Agreement”), as of November 1, 2007. Reliant Energy,
Inc. (the “Company”) hereby grants to Rick J. Dobson
(the “Participant”), 9,700
Restricted Stock Units and rights (the “Nonqualified Stock Options” or “Options”)
to purchase from the Company 24,000 shares
of Common Stock of the Company at $26.955 per
share. The number of units and shares is subject to adjustment as provided in
Section 15 of the Reliant Energy, Inc. 2002 Long-Term Incentive Plan (the “Plan”),
subject to the terms, conditions and restrictions described in the Plan and in
this Agreement.

 

1.                                      Relationship
to the Plan; Definitions.

 

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

 

(b)                                 Except as defined
herein, capitalized terms have the same meanings as under the Plan.

 

Disability
means a physical or mental impairment of sufficient severity such that the
Participant is receiving benefits under the Company’s long-term disability
plan.

 

Employment
means employment with the Company or any of its subsidiaries.

 

Options mean
Nonqualified Stock Options.

 

Option
Period means the period beginning on the date of this
Agreement and ending on the date the Options expire pursuant to Section 4.

 

Option
Shares means shares of Common Stock which the
Participant may have the right to purchase under this Agreement.

 

1

 

Restricted
Stock Unit means a Stock Award with restrictions and
subject to a vesting condition as described in this Agreement.

 

Retirement
means termination of Employment on or after attainment
of age 55 with at least five years of service with the Company.

 

2.                                       Account.  The Awards
granted pursuant to this Agreement will be implemented by a credit to a
bookkeeping account maintained by the Company evidencing the accrual in favor
of the Participant of the unfunded and unsecured right to receive the
Restricted Stock Units and the Options granted. Except as provided in Section
9, the Awards credited to the bookkeeping account may not be sold, assigned,
transferred, pledged or otherwise encumbered until the Participant has been
registered as the holder of shares of Common Stock representing the Restricted
Stock Units or exercised Options.

 

3.                                       Vesting.  Unless earlier forfeited as described
below, the Awards will vest as follows:

 

(i)                                     The
Options will vest and become exercisable in three cumulative annual
installments as follows:

 

8,000 Option Shares
exercisable on November 1, 2008;

 

an additional 8,000 Option Shares exercisable on November 1,
2009;

 

and the remaining 8,000 Option  Shares exercisable on November 1, 2010.

 

The Participant must be continuously employed by the Company through
the date of exercisability of each installment for the Options to become
exercisable with respect to additional shares of Common Stock on such date.

 

(ii)                                  The
Restricted Stock Units will vest on November 1, 2010.

 

The Participant must be continuously employed by the Company through
the date of vesting for the Restricted Stock Units to vest.

 

2

 

4.                                       Expiration of Option Period. The Option Period will expire
on October 31, 2017 except as follows:

 

(i)                                     Upon termination
of Employment of the Participant due to death or Disability, (a) the unvested
portion of the Options will expire immediately and (b) the vested Options,
if any, will expire upon the earlier of (I) one year following the date of
termination of Employment or (II) the expiration of the Option Period.

 

(ii)                                  Upon termination of
Employment of the Participant because of Retirement, (a) the unvested portion
of the Options will expire immediately and (b) the vested Options, if any, will
expire upon the earlier of (I)  three years following the date of termination of
Employment or (II) the expiration of the Option Period.

 

(iii)                               Upon termination of
Employment of the Participant by the Company or any of its subsidiaries for any
reason or due to voluntary resignation by the Participant, (a) the unvested
portion of the Options will expire immediately and (b) the vested Options, if
any, will expire upon the earlier of (I) one year following the date of
termination of Employment or (II) the expiration of the Option Period.

 

(iv)                              Notwithstanding anything
herein to the contrary, in the event the Participant dies following termination
of Employment but prior to the expiration of the Option Period pursuant to this
Section 4, the portion of the Option exercisable upon the Participant’s death
will expire one year following the date of the Participant’s death or, if
earlier, upon the expiration of the Option Period.

 

5.                                       Payment of Restricted Stock Units. Upon the vesting of the
Participant’s right to receive Restricted Stock Units, a number of shares of
Common Stock equal to the number of vested Restricted Stock Units will be
registered in the Participant’s name and issued or distributed to him as soon
as practicable after the vesting date, but in no event later than March 15th of
the year immediately following the year during which the vesting date occurs. The Company will have the right to withhold
applicable taxes from any such payment or from other compensation payable to
the Participant at the time of such vesting and delivery pursuant to Section 12
of the Plan.

 

6.                                       Exercise of Options. Subject to the limitations set forth
herein and in the Plan, the Options may be exercised pursuant to the procedures
established by the Committee. Unless otherwise permitted by the Committee, upon
exercise the Participant must provide to the Company or its designated
representative, cash, check or money order payable to the Company equal to the
full amount of the purchase price for any shares of Common Stock being acquired
or, at the election of the Participant, Common Stock held by the Participant
for at least six months equal in value to the full amount of the purchase price
(or any combination of cash, check, money order or such Common Stock). For
purposes of determining 

 

3

 

the amount, if any, of the purchase price satisfied by payment in
Common Stock, the Common Stock will be valued at its Fair Market Value on the
date of exercise. Any Common Stock delivered in satisfaction of all or a
portion of the purchase price must be appropriately endorsed for transfer and
assignment to the Company. The Company will have the right to withhold
applicable taxes from compensation otherwise payable to the Participant at the
time of exercise pursuant to Section 12 of the Plan.

 

7.                                       Cash Payment Upon a Change of Control. Notwithstanding
anything herein to the contrary, upon or immediately prior to the occurrence of
any Change of Control of the Company prior to one or more of the vesting dates
provided for under this Agreement, (i) the Participant’s right to receive
Restricted Stock Units will vest and will be settled by a cash payment to the
Participant equal to the product of (A) the Fair Market Value per share of
Common Stock on the date immediately preceding the date on which the Change of
Control occurs and (B) the total number of Restricted Stock Units granted, and
(ii) the Participant’s right to receive the Options (unless previously expired
pursuant to Section 4) shall be settled by a cash payment to the Participant
equal to the product of (A) the difference between (1) the Fair Market Value
per share of Common Stock on the date immediately preceding the date on which
the Change in Control occurs and (2) the exercise price of the Options and (B)
the total number of unexercised Option Shares, regardless of whether such
Option Shares have become exercisable under Section 3, with such payments under
clauses (i) and (ii) above in no event made later than March 15th of the year
immediately following the year during which the date immediately prior to the
date of the Change of Control occurs. Such cash payment will satisfy the rights
of the Participant and the obligations of the Company under this Agreement in
full.

 

8.                                       Notices. For purposes of this Agreement, notices and all
other communications must be in writing and will be deemed to have been given
when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
Company at 1000 Main St., Houston, TX 77002, and to the Participant at the
address on record for the Participant in the Company’s human resources
department or to such other address as either party may furnish to the other in
writing in accordance with this Section 8.

 

9.                                       Successors and Assigns. This Agreement is binding upon and
inures to the benefit of  the
Participant, the Company and their respective permitted successors and assigns.
Notwithstanding anything herein to the contrary, the Restricted Stock Units
and/or Options are transferable by the Participant to Immediate Family Members,
Immediate Family Member Trusts and Immediate Family Member Partnerships
pursuant to Section 14 of the Plan.

 

10.                                 No Employment Guaranteed. Nothing in this Agreement gives
the Participant any rights to (or imposes any obligations for) continued
Employment by the 

 

4

 

Company or any
Subsidiary thereof or successor thereto, nor does it give those entities any rights
(or impose any obligations) with respect to continued performance of duties by
the Participant.

 

11.                                 Shareholder Rights. The Participant shall have no rights of
a shareholder with respect to the Restricted Stock Units or the Options unless
and until the Participant is registered as the holder of shares of Common Stock
representing the Restricted Stock Units and/or the Option Shares on the records
of the Company.

 

12.                                 Section 409A of the Code. It is intended that this Agreement
and any Awards under this Agreement satisfy the short-term deferral exclusion
from Section 409A of the Code.

 

 

	
   

  	
  RELIANT ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen D.
  Taylor

  
	
   

  	
   

  	
  Karen D. Taylor

  
	
   

  	
   

  	
  Senior Vice President-Human Resources

  

 

5Exhibit 10.3

 

CHANGE IN CONTROL AGREEMENT

 

This Change in Control
Agreement (“Agreement”) is by and between Reliant Energy, Inc. (the “Company”),
Reliant Energy Corporate Services, LLC (the “Employer”) and Rick J. Dobson (“Executive”).

 

The Company and the
Employer consider it essential to the interests of the Company’s stockholders
to secure the continued employment of key management personnel. The Board of
Directors of the Company recognizes that the possibility of a Change in Control
(as defined below) exists and that the uncertainty this raises may result in
the departure or distraction of management personnel to the detriment of the
Company and its stockholders. In order to encourage the continued attention and
dedication of key management personnel, this Agreement is being entered into by
the Company, the Employer and Executive.

 

The Company, the Employer
and Executive agree as follows:

 

1.                                       DEFINITIONS:  Capitalized  terms are defined in Exhibit A.

 

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 Covered Termination, and (c) does not revoke such Waiver and
Release within the time period prescribed in the Waiver and Release, then
Executive will be entitled to receive from the Employer the following severance
benefits:

 

(a)                                  Severance Payment Based on Salary. An
amount equal to the sum of 3 times Salary plus 3 times the Executive’s target
award under the AICP for the year in which the Covered Termination occurs.

 

(b)                                 Severance Payment Based on Bonus.

 

(1)                                  Current Performance Year.  An amount equal to the
product of (A) the Salary and (B) the Target Bonus Percentage, with the product
of (A) and (B) prorated based on the number of days Executive was employed
during the bonus year in which Executive’s employment terminated.

 

(2)                                  Prior Performance Year.  An Executive whose termination date occurs
before the date on which awards under the AICP are paid out for the prior
calendar year, or the date on which the Company announces that awards under the
AICP will not be paid, will be entitled to an amount equal to the product of
(A) the Salary and (B) the Target Bonus Percentage (or, if greater, the actual
amount of

 

1

 

the bonus determined under the AICP for such prior
calendar year). Any prepayments of AICP awards made during the prior calendar
year will be deducted from the amount calculated under the preceding sentence
of Section 2(b)(2).

 

The severance benefits provided for in Sections 2(a)
and 2(b) above will be paid in one lump sum payment as soon as practicable
after the expiration of the Waiver and Release revocation period (subject to
any delay required to comply with the requirements of Section 409A of the
Code).

 

(c)                                  Welfare Benefit Coverage.

 

(1)                                  Active
Coverage.  The Employer will provide, or will cause to be
provided, continued Welfare Benefit Coverage (as in effect from time to time
for similarly situated active employees) for Executive and Executive’s eligible
dependents at the active employee rate for a period of 2 years following the
date of Executive’s Covered Termination.

 

(2)                                  Post Retirement Coverage.

 

If Executive would be entitled to post-retirement
medical coverage within 2 years following termination of employment, if
Executive had remained employed, the Company or the Employer will provide the
coverage as follows:

 

(A)                              the
coverage provided will be the coverage in effect immediately before the Covered
Termination; and

 

(B)                                coverage
will begin on the later of (i) the date on which the post-retirement coverage
would have become available or (ii) the date on which the benefits under
Section 2(c)(1) end.

 

(3)                                  Reduction for Other Coverage.  Benefits
otherwise receivable by Executive pursuant to this Section 2(c) will 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
or cause to be provided outplacement services for a period of 12 months in
connection with Executive’s efforts to obtain new employment. Executive must
notify the Employer or the outplacement firm designated by the Employer, in
writing, within 180 days of termination of employment if the Executive wishes
to utilize this outplacement benefit.

 

2

 

(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 the Covered Termination.

 

3.                                       CHANGE IN CONTROL EQUITY-BASED BENEFITS:  Immediately
upon any Change in Control, Executive will be entitled to receive benefits with
respect to any equity-based compensation in accordance with the applicable
plans and agreements.

 

4.                                       SPECIAL INTERNAL REVENUE CODE
REQUIREMENTS:
  It is the intent of the Company that the provisions of this
Agreement comply with Section 409A of the Code and related regulations and
Department of the Treasury pronouncements. Accordingly, notwithstanding any
provision in this Agreement to the contrary, this Agreement will be interpreted,
applied and to the minimum extent necessary, unilaterally amended by the
Company in its sole discretion, without the consent of Executive, as the
Company deems appropriate for the Agreement to satisfy the requirements of
Section 409A.

 

5.                                       CERTAIN ADDITIONAL PAYMENTS:  Whether or not
Executive becomes entitled to the payments or benefits pursuant to Section 2 of
this Agreement, if any of the payments or benefits received or to be received
by Executive (including any payment or benefit received or to be received in
connection with a Change in Control or Executive’s termination of employment,
whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement) (all such payments and benefits, excluding the Gross-Up Payment
described below, being hereinafter referred to as the “Total Payments”) will be
subject to the tax under Section 4999 of the Code (the “Excise Tax”), the
Company will pay to the Executive an additional amount (the “Gross-Up Payment”)
such that the net amount retained by the Executive, after deduction of any
Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to the Gross-Up Payment, is equal to the Total Payments. In the
event that the amount of the Total Payments does not exceed 110% of the largest
amount that would result in no portion of the Total Payments being subject to the
Excise Tax (the “Safe Harbor”), then the preceding provisions of this Section
will not apply and any noncash payments or benefits will first be reduced ( if
necessary, to zero), and any cash payments will thereafter be reduced (if
necessary, to zero) so that the amount of the Total Payments is equal to the
Safe Harbor; provided, however, that the Executive may elect to
have the cash payments reduced (or eliminated) before any reduction of the
noncash payments or benefits.

 

For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments will be treated as “parachute payments” (within
the meaning of Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
(“Tax Counsel”) reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change in Control, the
Company’s independent auditor (the “Auditor”), such payments or benefits

 

3

 

(in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all “excess
parachute payments” within the meaning of Section 280G(b)(l) of the Code will
be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the base amount allocable to such
reasonable compensation (within the meaning of Section 280G of the Code), or
are otherwise not subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit will be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, (1) the Executive
will be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive’s residence on the date of
the Covered Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes and (2)
Executive will be deemed to be subject to the loss of itemized deductions and
personal exemptions to the maximum extent provided by the Code for each dollar
of incremental income.

 

In the event that
the Excise Tax is finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment, Executive must repay to
the Company, within five (5) business days following the time that the amount
of such reduction in the Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income and employment taxes imposed on the Gross-Up Payment being repaid by
Executive), to the extent that such repayment results in a reduction in the
Excise Tax and a dollar-for-dollar reduction in Executive’s taxable income and
wages for purposes of federal, state and local income and employment taxes,
plus interest on the amount of such repayment at 120% of the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in calculating the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company
will make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of
such excess is finally determined. Executive and the Company must each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.

 

6.                                       CONFIDENTIALITY:  Executive
agrees that he will not, while employed by the Company or the Employer or an
Affiliate 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 are required in the performance of his duties hereunder
or as may otherwise be required by law or legal process (in which case
Executive must notify the

 

4

 

Company of such legal or judicial proceeding as soon
as practicable, and permit the Company to seek to protect its interests and
information).

 

7.                                       RETURN OF PROPERTY:  Executive
agrees that at the time of leaving his or her 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,
regardless of whether such items were prepared by Executive.

 

8.                                       NON-SOLICITATION:  Executive
agrees that while employed by the Company or the Employer or an Affiliate and
for one year following a Covered Termination, he will not, without the prior
written consent of the Company, directly or indirectly, hire or induce, entice
or solicit (or attempt to induce entice or solicit) any employee of the Company
or any of its Affiliates to leave the employment of the Company or any of its
Affiliates.

 

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

 

	
   

  	
  If to Company or
  the Employer:

  	
  Reliant Energy,
  Inc.

  
	
   

  	
  1000 Main Street

  
	
   

  	
  Houston, Texas
  77002

  
	
   

  	
  ATTENTION:
  General Counsel

  
	
   

  	
   

  
	
   

  	
  If to Executive:

  	
  Rick J. Dobson

  
	
   

  	
  7800 Northeast 75th Court

  
	
   

  	
  Kansas City, Missouri 64158

  
	
   

  	
   

  

 

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

 

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, but
without giving effect to the principles of conflict of laws of such State.

 

11.                                 SEVERABILITY:  If any provision of this Agreement
is determined to be invalid or unenforceable, then the invalidity or
unenforceability of that provision will not affect the validity or
enforceability of any other provision of this Agreement and all other
provisions will remain in full force and effect.

 

5

 

12.                                 WITHHOLDING OF TAXES:  The Company or the
Employer, as applicable, may withhold from any payments under this Agreement
all federal, state, local 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 under this Agreement will not be assignable or
transferable, whether by pledge, creation of 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 or Employer will have no liability to pay any amount so attempted to be
assigned or transferred. This Agreement inures to the benefit of and is
enforceable by Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

This Agreement is binding upon and inures to the
benefit of the Company and the Employer and their respective 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 are absolute and unconditional and may 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 Executive or anyone else. All amounts
payable or arrangements to be made hereunder by the Company or the Employer
(including their Affiliates) must be paid or made without notice or demand. Executive
may not be obligated to sign an agreement not to compete with the Company or
its Affiliates 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 will not 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 will 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 will include the plural, the plural will include the singular, and the
masculine gender will 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.

 

6

 

17.                                 AMENDMENT AND WAIVER: No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by any party hereto at any time
of any breach by the other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be performed by any other party
will be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

 

18.                                 COUNTERPARTS:  This
Agreement may be executed in several counterparts, each of which will be deemed
to be an original but all of which together will constitute one and the same
instrument.

 

19.                                 TERM:  The effective date of the Agreement is October
29, 2007. Upon the occurrence of a Change in Control, the term will be
automatically extended to a date which is two years from the date upon which
the Change in Control occurs. If Executive’s employment is terminated before
the occurrence of a Change in 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 6, 7 and 8) will survive.

 

	
  RELIANT ENERGY, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mark M. Jacobs

  	
   

  
	
   

  	
  Mark M. Jacobs

  	
   

  
	
   

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  November 6, 2007

  	
   

  
	
   

  	
   

  	
   

  
	
  RELIANT ENERGY CORPORATE SERVICES,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mark M. Jacobs

  	
   

  
	
   

  	
  Mark M. Jacobs

  	
   

  
	
   

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  November 6, 2007

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTIVE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Rick J. Dobson

  	
   

  
	
  Rick J. Dobson

  	
   

  	
   

  
	
   

  
	
  Date:

  	
  November 6, 2007

  	
   

  
								

 

7

 

Exhibit A

 

DEFINITIONS

 

The following terms have the meanings set forth below.

 

“Affiliate”
means an Affiliate within the meaning of Rule 12b-2 promulgated under Section
12 of the Exchange Act.

 

“AICP”
means the Reliant Energy, Inc. Annual Incentive Compensation Plan (or any
successor plan).

 

“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 that materially injures the Company, the
Employer, or its Affiliates (monetarily or otherwise) or (d) being charged
with, indicted for or convicted of a felony. For purposes of the definition of
Cause, an act or failure to act by Executive is “intentional” only if done or
omitted to be done by Executive in bad faith and without reasonable belief that
Executive’s action or omission was in the best interest of the Company and its
Affiliates, and no act or failure to act by Executive is “intentional” if it
was due primarily to an error in judgment or negligence.

 

A “Change in
Control” will be deemed to have occurred upon the occurrence of any
of the following:

 

(a)                                  30% Ownership Change:  Any
Person, other than an ERISA-regulated pension plan established by the Company,
the Employer, 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
before 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 before such 

 

8

 

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 before 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 before 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 before 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 (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 before
consummation of such Major Asset Disposition.

 

For purposes of the
definition of a “Change in Control”,

 

(1)                                  “Person” means an individual, entity or group;

 

(2)                                  “group” is used as it is defined for purposes of
Section 13(d)(3) of the Exchange Act;

 

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

 

(4)                                  “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

 

9

 

Outstanding Voting Stock (or of other voting stock) is
determined based on the combined voting power of such securities;

 

(5)                                  “Incumbent Director” means a director of the Company (x) who
was a director of the Company on the effective date of this Agreement or
(y) who becomes a director after 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 will 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)                                  “election contest” is used as it is defined for purposes of
Rule 14a-11 under the Exchange Act;

 

(7)                                  “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)                                  “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

 

(9)                                  “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 will be
based on fair market value, as determined by a majority of the Incumbent
Directors.

 

“Code” means the Internal Revenue Code of 1986, as
amended.

 

“Company”
means Reliant Energy, Inc., and, except for purposes of determining whether a
Change in Control has occurred, any successor thereto.

 

“Confidential
Information” means any and all information, data and
knowledge that has been created, discovered, developed or otherwise become
known to the Company or any of its

 

10

 

Affiliates or in which
property rights have been assigned or otherwise conveyed to the Company or any
of its Affiliates, 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 Affiliate’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.

 

“Covered
Termination” means a termination of Executive’s employment
(such that Executive ceases to be employed by the Employer, the Company or an
Affiliate) following a Change in Control during the term of this Agreement as
follows:

 

(a)                                  an
involuntary termination that does not result from any of the following:

 

(1)                                  death;

 

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

 

(3)                                  termination
for Cause;

 

(b)                                 a
termination by the Executive for Good Reason; or

 

(c)                                  a
termination initiated by the Employer, the Company or an Affiliate and mutually
agreed upon by Executive and the Employer.

 

“Employer”
means Reliant Energy Corporate Services, LLC, and any successor thereto.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.

 

“Good
Reason” means
any one or more of the following which occurs following a Change in Control:

 

(a)                                  a
significant reduction in the duties or responsibilities of Executive from those
applicable immediately before the date on which a Change in Control occurs;

 

(b)                                 a
reduction in Executive’s annual base salary as in effect on the effective date
of this Agreement 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 before the

 

11

 

Change in Control which is material to Executive’s
total compensation, unless a comparable 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, as existed immediately before the Change in Control, unless the
action by the Company or the Employer applies to all similarly situated employees;

 

(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 or their
respective Affiliates’) pension, savings, life insurance, medical, health and
accident, or disability plans in which Executive was participating immediately
before the Change in 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 in 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 before the Change in Control, unless
the action by the Company or the Employer applies to all similarly situated
employees; 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 before the Change in Control 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 before the termination
of Executive’s employment or, if higher, the base salary in effect immediately
before the first event or circumstance constituting Good Reason.

 

“Target
Bonus Percentage” means Executive’s target incentive award
opportunity under the AICP in effect immediately before the termination of
Executive’s employment or, if higher, immediately before the first event or
circumstance constituting Good Reason.

 

“Waiver
and Release” means a legal document substantially in the form
attached as Exhibit B.

 

“Welfare
Benefit Coverage” shall mean medical, dental and vision
benefits.

 

12

 

Exhibit B

 

WAIVER
AND RELEASE

 

In exchange for the payment to me of the severance
benefits described in Section 2 of the Change in Control Agreement between
Reliant Energy, Inc. (the “Company”), Reliant Energy Corporate Services, LLC
(the “Employer”) and me effective as of                 ,
(the ”Agreement”) and of other remuneration and consideration provided for
in the Agreement (collectively, 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) 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, 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. § 5851; the Workers Adjustment
and Retraining Notification Act of 1988; the Pregnancy

 

13

 

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 §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, state or
local 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 will 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 will 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. 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 or federal government, including
law enforcement authorities, public utility commissions, energy regulatory
commissions or any other lawful authority. I agree that if called upon to serve
as a

 

14

 

witness or
consultant in or with respect to any actual or potential litigation or
administrative proceeding, I will truthfully cooperate with the Company and the
Employer to the full extent permitted by law.

 

I understand and agree that in the event of any breach
or threatened breach of the provisions of Sections 6, 7 or 8 of the Agreement
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 or they may prove by a preponderance of the evidence in
accordance with the law specified in those Sections.

 

I acknowledge that this Waiver and Release sets 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

  	
   

  

 

 

15

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