Cash Payment Upon a Change of Control from Long Term Incentive Plan
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.
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 Participants 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 Participants 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.