Document:

exv10w2

Exhibit 10.2

RETENTION INCENTIVE AGREEMENT

     This Retention Incentive Agreement (the “Agreement”) dated April 11, 2010, by and among RRI
Energy, Inc. (“Parent”), RRI Energy Corporate Services, LLC (“Employer”) and Mark M. Jacobs (the
“Executive”).

     WHEREAS, on the date hereof, Parent, RRI Energy Holdings, Inc. and Mirant Corporation
(“Mirant”) are entering into an Agreement and Plan of Merger (as it may be amended from time to
time, the “Merger Agreement”), pursuant to which Mirant will become a wholly-owned subsidiary of
Parent effective as of the Closing (as that term is defined in the Merger Agreement (the
“Closing”));

     WHEREAS, it is contemplated that the present Chief Executive Officer of Mirant, Edward R.
Muller (“Mr. Muller”), will become the Chairman and Chief Executive Officer of Parent, and the
Executive will become the President and Chief Operating Officer of Parent, effective as of the
Closing;

     WHEREAS, it is contemplated that the Executive will become the Chief Executive Officer of
Parent effective upon the third anniversary of the Closing or on such earlier date that Mr. Muller
ceases to be the Chief Executive Officer of Parent for any reason;

     WHEREAS, Parent, Employer and the Executive entered into a Change in Control Agreement
effective as of December 31, 2008, as amended as of the date hereof (the “CIC Agreement”), and the
Executive has agreed to waive certain important rights that he previously enjoyed under the CIC
Agreement;

     WHEREAS, as the current Chief Executive Officer of Parent, the Executive has unique experience
regarding the operation of Parent and its affiliates that will be critical to the success of the
transactions contemplated by the Merger Agreement;

     WHEREAS, the Executive is expected to have expanded obligations following the Closing in light
of the need to continue operations of the combined organization while at the same time facilitating
the integration of Parent, Mirant and their respective affiliates;

     WHEREAS, the continued service of Executive is expected to induce other employees of Parent
and its affiliates to continue employment with the combined organization and thereby help ensure
the success of the transactions contemplated by the Merger Agreement;

     WHEREAS, Parent and Employer accordingly wish to induce the Executive to remain employed by
Parent and Employer following the Closing, and the Executive wishes to continue such employment,
subject to the provisions of this Agreement; and

     WHEREAS, Parent and Employer believe that the payments contemplated by this Agreement are
reasonable in light of the foregoing considerations.

 

 

     NOW, THEREFORE, in light of the foregoing and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, Parent, Employer and the Executive hereby agree as
follows:

     1. Not later than thirty (30) days following the Closing, Parent shall grant to the Executive
a number of shares of common stock, par value $0.001 per share, of Parent (“Common Stock”), or
alternatively cash or stock settled units in respect thereof or a mix of any such vehicles, with a
value, based on the closing trading price of Common Stock on the date of Closing, equal to two
times the sum of the Executive’s annual rate of base salary and annual target bonus as in effect
immediately before the Closing, subject to the forfeiture provisions described below in this
Agreement (the “Restricted Stock”). The grant will be made under and subject to the terms of the
Parent’s 2002 Long-Term Incentive Plan or other applicable equity incentive compensation plan and
the terms of this Agreement and shall be in addition to, and not in lieu of, any annual or other
equity grant to which the Executive shall be entitled.

     2. Subject to the additional provisions of this Agreement, (i) the restrictions on the
Restricted Stock shall lapse, and the Restricted Stock shall vest, in two equal tranches on the
first and second anniversaries of the Closing, respectively, and (ii) upon termination of his
employment with Parent, Employer and their affiliates, the Executive shall forfeit any unvested
Restricted Stock that is not then vested. The Executive shall possess dividend rights in respect
of the unvested Restricted Stock and, to the extent of issuance of actual Common Stock in lieu of
units in respect thereof, voting rights and shall possess all incidents of ownership in respect of
vested Restricted Stock.

     3. If the Executive’s termination of employment is treated as a Covered Termination under the
CIC Agreement, a fraction of any then unvested Restricted Stock shall vest, with the numerator of
such fraction equal to the number of full and partial months of employment since the first or
second anniversary of the Closing, as the case may be, and the denominator equal to twenty-four
(24) in the case of a termination before the first anniversary of the Closing and twelve (12) in
the case of a later termination (such that, in any event, he vests in 1/24th of the
Restricted Stock for each full month of employment).

     4. This Agreement shall be of no force or effect if the Merger Agreement terminates before the
Closing occurs or if the Executive remains the Chief Executive Officer of Parent effective as of
the Closing.

     5. This Agreement (i) shall inure to the benefit of and is enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees and (ii) shall be binding upon and inures to the benefit of Parent and
Employer and their respective successors and assigns.

     6. 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.

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     7. 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 other than the CIC Agreement.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
set forth above.

	 	 	 	 	 

	 	 	RRI ENERGY, INC.
	 
	 
	 	/s/ Mike Jines 
	 	 	 
	 

	 	By:	 	Mike Jines 
	 

	 	Its:	 	EVP 
	 
	 	 	 	 
	 
	 	 	RRI ENERGY CORPORATE SERVICES, LLC
	 
	 
	 	/s/ Karen D. Taylor 
	 	 	 
	 

	 	By:	 	Karen D. Taylor 
	 

	 	Its:	 	Vice President 
	 
	 	 	 	 
	 
	 	 	/s/
Mark M. Jacobs
	 	 	 
	 	 	MARK M. JACOBS

3exv10w3

Exhibit 10.3

AMENDMENT TO CHANGE IN CONTROL AGREEMENT

     This Amendment (the “Amendment”) dated April 11, 2010, by and among RRI Energy, Inc.
(“Parent”), RRI Energy Corporate Services, LLC (“Employer”) and Mark M. Jacobs (the “Executive”).

     WHEREAS, Parent, Employer and the Executive entered into a Change in Control Agreement
effective as of December 31, 2008 (the “CIC Agreement”);

     WHEREAS, on the date hereof, Parent, RRI Energy Holdings, Inc. and Mirant Corporation
(“Mirant”) are entering into an Agreement and Plan of Merger (as it may be amended from time to
time, the “Merger Agreement”), pursuant to which Mirant will become a wholly-owned subsidiary of
Parent effective as of the Closing (as that term is defined in the Merger Agreement (the
“Closing”));

     WHEREAS, the Closing will constitute a Change in Control within the meaning of the CIC
Agreement;

     WHEREAS, it is contemplated that the present Chief Executive Officer of Mirant, Edward R.
Muller (“Mr. Muller”), will become the Chairman and Chief Executive Officer of Parent, and the
Executive will become the President and Chief Operating Officer of Parent, effective as of the
Closing;

     WHEREAS, it is contemplated that the Executive will become the Chief Executive Officer of
Parent effective upon the third anniversary of the Closing or on such earlier date that Mr. Muller
ceases to be the Chief Executive Officer of Parent for any reason;

     WHEREAS, the Executive’s failure to remain the Chief Executive Officer of Parent effective as
of the Closing would constitute “Good Reason” within the meaning of the CIC Agreement; and

     WHEREAS, Parent and Employer wish to induce the Executive to remain employed by Parent and
Employer following the Closing, and the Executive wishes to continue such employment, subject to
the provisions of this Amendment.

     NOW, THEREFORE, in light of the foregoing and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, Parent, Employer and the Executive hereby agree as
follows:

     1. The Executive will not assert that his failure to remain Chief Executive Officer of Parent
as of the Closing, the reduction in his duties or responsibilities from those applicable to Chief
Executive Officer of Parent as of the Closing, his becoming President and Chief Operating Officer
of Parent as of the Closing or the assignment to him of duties reasonably consistent with the
position of President and Chief Operating Officer constitute a “material reduction in the duties or
responsibilities of Executive” within the meaning of subsection (a) of the Good Reason definition
in the CIC Agreement.

 

 

     2. If the Executive shall not be appointed Chief Executive Officer of Parent on the earlier of
(i) the third anniversary of the Closing or (ii) within ten (10) business days following the first
date after the Closing on which Mr. Muller ceases to serve as Chief Executive Officer of Parent,
any termination of employment by the Executive within ninety (90) days following such anniversary
or the end of such ten (10) business day period shall be treated for all purposes as a Covered
Termination within the meaning of the CIC Agreement.

     3. If the Executive shall be removed from or not nominated for re-election to the Board of
Directors of Parent other than for “Cause,” or shall cease to be member of the Board of Directors
of Parent because of his failure to be re-elected other than for “Cause,” in any event before the
third anniversary of the Closing, any termination of employment by the Executive within ninety (90)
days following such removal or failure to be nominated or re-elected shall be treated for all
purposes as a Covered Termination within the meaning of the CIC Agreement.

     4. If the Executive’s employment by Parent or Employer is terminated without Cause (within the
meaning of the CIC Agreement) before the third anniversary of the Closing, such termination shall
be treated for all purposes as a Covered Termination within the meaning of the CIC Agreement (such
that a termination of employment without Cause will be treated as a Covered Termination even if it
occurs during the third year following a Change in Control within the meaning of the CIC
Agreement).

     5. The final sentence of each of Section 4(a) and 4(b) shall be deleted.

     6. Section 5 of the CIC Agreement shall be amended to read in its entirety as follows:

“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
being hereinafter referred to as the “Total Payments”) will be subject to the tax under
Section 4999 of the Code (the “Excise Tax”), a reduction shall be made from the severance
amounts in Section 2(a) and (b) above so that the amount of the Total Payments is equal to
the largest amount that would result in no portion of the Total Payments being subject to
the Excise Tax, but only if (A) the net amount of such Total Payments, as so reduced (and
after subtracting the net amount of federal, state and local income taxes on such reduced
Total Payments and after taking into account the phase out of itemized deductions and
personal exemptions attributable to such reduced Total Payments) is greater than or equal to
(B) the net amount of such Total Payments without such reduction (but after subtracting the
net amount of federal, state and local income taxes on such Total Payments and the amount of
Excise Tax to which Executive would be subject in respect of such unreduced Total Payments
and after taking into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments), provided that Executive may elect to have
the noncash severance amounts reduced (or eliminated) prior to any reduction of the cash
severance amounts.

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“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 (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 this Section 5, Executive shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar year in which the
applicable Total Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of Executive’s residence in the calendar
year in which the applicable Total Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and local taxes
and except to the extent that Executive otherwise notifies the Company, Executive shall 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.

“At the time that payments are made under this Agreement, the Company shall provide
Executive with a written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation, any opinions
or other advice the Company has received from Tax Counsel, the Auditor or other advisors or
consultants (and any such opinions or advice which are in writing shall be attached to the
statement). If Executive objects to the Company’s calculations, the Company shall pay to
the Executive such portion of the Total Payments (up to 100% thereof) as the Executive
determines is necessary to result in the proper application of this Section 5.”

     7. This Amendment shall be of no force or effect if the Merger Agreement terminates before the
Closing occurs or if the Executive remains the Chief Executive Officer of Parent effective as of
the Closing.

     8. This Amendment (i) shall inure to the benefit of and is enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees and (ii) shall be binding upon and inures to the benefit of Parent and
Employer and their respective successors and assigns.

3

 

     9. The validity, interpretation, construction and performance of this Amendment 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.

     10. This Amendment 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 other than the Retention Incentive Agreement by and among Parent, Employer
and the Executive dated as of even date hereof.

     11. Except as modified by the foregoing provisions of this Amendment, the CIC Agreement shall
remain in force in accordance with its terms.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first
set forth above.

	 	 	 	 	 

	 	 	RRI ENERGY, INC.
	 
	 
	 	/s/ Mike Jines 
	 	 	 
	 

	 	By:	 	Mike Jines 
	 

	 	Its:	 	EVP 
	 
	 	 	 	 
	 
	 	 	RRI ENERGY CORPORATE SERVICES, LLC
	 
	 
	 	/s/ Karen D. Taylor 
	 	 	 
	 

	 	By:	 	Karen D. Taylor 
	 

	 	Its:	 	Vice President 
	 
	 	 	 	 
	 
	 	 	/s/
Mark M. Jacobs
	 	 	 
	 	 	MARK M. JACOBS

4

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