GENON ENERGY, INC. 2010 OMNIBUS INCENTIVE PLAN 2011 PERFORMANCE UNIT AWARD AGREEMENT
Exhibit 10.5
To: [Omnibus Incentive Plan Participant]:
Congratulations on your selection as a recipient of performance units (“Performance Units”) under
the GenOn Energy, Inc. 2010 Omnibus Incentive Plan (the “Plan”). This Award Agreement
(“Agreement”) and the Plan together govern your rights and set forth all of the conditions and
limitations affecting such rights.
Terms used in this Agreement that are defined in the Plan will have the meanings ascribed to them
in the Plan.
| (i) | Termination. A “termination” of employment with the Company includes a
termination of employment with a Subsidiary (other than a direct transfer of employment
between Subsidiaries or the Company and a Subsidiary). |
| (ii) | Retirement. “Retirement” means termination of employment other than for Cause
on or after the date when you are at least 55 years old and have at least five years of
service (based on your employment with the Company and its Subsidiaries or predecessor
companies). |
| (iii) | Cause. “Cause” means: (i) your willful and continued failure to
substantially perform your duties with the Company (other than any such failure
resulting from Disability), as determined by the Company; or (ii) willfully engaging in
conduct (other than conduct covered under (i) above) which is demonstrably and
materially injurious to the Company, monetarily or otherwise, as determined by the
Company, including, but not limited to, conviction of a felony. |
If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the
Plan’s terms will supersede and replace the conflicting terms of this Agreement.
| 1. | Terms. Pursuant to the terms and conditions of the Plan and this Agreement, you have been
granted Performance Units as outlined below: |
Grant Date:
|
February 23, 2011 | |
Number of Performance Units at Target:
|
Adjustment of Number of Performance Units: See Schedule I to this
Agreement for the manner in which your target number of Performance Units
will be adjusted based on the short-term incentive (“STI”) performance
factor for calendar year 2011. |
| 2. | Vesting. Except as provided in Section 3 below and subject to the adjustment described in
Schedule 1 to this Agreement, the Performance Units will vest and become non-forfeitable as
follows: |
33 1/3% of the Performance Units will vest on the date the Committee determines the
2011 plan year STI performance factor (“Determination Date”); |
33 1/3% of the Performance Units will vest on the first anniversary of the
Determination Date; and |
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the remainder of the Performance Units will vest on the second anniversary of the
Determination Date. |
The performance factor is typically determined during the first quarter of the
fiscal year. |
| 3. | Impact of Change in Employment Status. The Vesting Dates of your Performance Units will
change if the status of your employment with the Company changes, according to the following
table: |
| Employment Event | Treatment of Unvested Performance Units | |
Death
|
Fully vest (at Target if death occurs prior to the determination of the performance factor for 2011) | |
Termination due to Disability
|
Continue vesting as if in active employment | |
Termination due to Retirement
|
Continue vesting as if in active employment | |
Involuntary termination other
than for Cause
|
Vest in any Performance Units scheduled to vest on the Vesting Date next following termination; forfeit remainder, if any | |
Involuntary termination for Cause
|
Forfeit | |
Voluntary resignation
|
Forfeit |
| 4. | Book Entry Account. Within a reasonable time after the date of this Agreement, the Company
shall instruct its transfer agent or stock plan administrator to establish a book entry
account representing the Performance Units in your name effective as of the Grant Date,
provided that the Company shall retain control of such account until the Performance Units
have become vested in accordance with this Agreement and shares of Common Stock have been
issued in settlement of the Performance Units. The number of Performance Units credited to
your account shall be adjusted as provided in Schedule I to this Agreement. |
|
| 5. | Distribution of Shares. You shall receive one share of Common Stock in satisfaction of each
vested Performance Unit credited to your account, which shall be registered in your name and
transferable by you, on the date on which such Performance Units vest. |
|
| 6. | Stockholder Rights; Dividend Equivalents. The Performance Units do not confer on you any
rights of a stockholder of the Company unless and until shares of Common Stock are in fact
issued to you in connection with the vested Performance Units. However, if and when cash
dividends or other cash distributions are paid or distributed with respect to the Common Stock
while the Performance Units are outstanding, the dollar amount of such dividends or
distributions with respect to the number of shares of Common Stock then underlying the
Performance Units shall be reflected in your account. Any such cash dividends or other cash
distributions shall vest and be paid in cash if and at such times the underlying Performance
Units are vested and paid. |
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| 7. | Transferability. No rights granted under this Agreement can be assigned or transferred,
whether voluntarily or involuntarily, by operation of law or otherwise, except by will or the
laws of descent and distribution. In the event of any transfer or assignment of rights
granted under this Agreement in accordance with this Section 7, the person or persons, if any,
to whom such rights are transferred by will or by the laws of descent and distribution shall
be treated after your death the same as you under this Agreement. Any attempted transfer or
assignment of rights under this Agreement prohibited under this Section 7 shall be null and
void. |
|
| 8. | Change in Control. Upon a Change in Control, the Performance Units will become fully vested
and nonforfeitable as of the date of the Change in Control. If a Change in Control occurs
prior to the determination of the STI performance factor for 2011, the number of Performance
Units that become fully vested and nonforfeitable is the target number reflected in this
Agreement. |
|
| 9. | Withholding; Code Section 409A. The Company has the right to deduct applicable taxes from
any payment under this Agreement and withhold, at the time of vesting of shares of Common
Stock, an appropriate number of shares of Common Stock for payment of required withholding
taxes or to take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes. The Fair Market Value of the shares of
Common Stock withheld for payment of required withholding taxes must equal no more than the
required minimum withholding taxes. The Performance Units granted under this Agreement are
intended to comply with or be exempt from Code Section 409A, and ambiguous provisions of this
Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. |
|
| 10. | Notice. Any written notice required or permitted by this Agreement shall be mailed,
certified mail (return receipt requested) or hand-delivered. Notice to the Company shall be
addressed to the Company’s General Counsel at 0000 Xxxx Xx., Xxxxxxx, XX 00000. Notice to you
shall be addressed to you at your most recent home address on record with the Company.
Notices are effective upon receipt. |
|
| 11. | Requirements of Law. The granting of Performance Units and the issuance of shares of Common
Stock under the Plan will be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as may be
required. |
|
| 12. | Miscellaneous. |
| a. | Limitation of Rights. The granting of this Award shall not give you any rights
to similar grants in future years or any right to be retained in the employ or service
of the Company or its Subsidiaries or interfere in any way with the right of the
Company or any such Subsidiary to terminate your services at any time, or your right to
terminate your services at any time. |
| b. | Severability. If any term, provision, covenant or restriction contained in
this Agreement is held by a court or a federal regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions contained in this Agreement shall remain in full
force and effect, and shall in no way be affected, impaired or invalidated. |
| c. | Governing Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware. |
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| 13. | Acceptance of Award. You are deemed to accept this Award and to agree that it is subject to
the terms and conditions set forth in this Agreement and the Plan unless you provide the
Company written notification not later than 30 days after the Grant Date of your rejection of
this Award (in which case your Award will be forfeited and you shall have no further right or
interest therein as of the Grant Date). |
| GENON ENERGY, INC. |
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| /s/ Xxxxx X. Xxxxxx | ||||
| Xxxxx X. Xxxxxx | ||||
| Senior Vice President, Human Resources and Administration | ||||
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SCHEDULE I
GENON ENERGY, INC.
2010 OMNIBUS INCENTIVE PLAN
2010 OMNIBUS INCENTIVE PLAN
2011 PERFORMANCE UNIT AWARD AGREEMENT
The Performance Units are adjusted based on the 2011 short-term incentive (“STI”) performance
factor approved by the Compensation Committee. The STI performance factor as determined for 2011
establishes the multiplier applied to the total Performance Unit grant. Payouts may range from 0
to 200 percent of your target Performance Unit Award.
Example: 1,000 Performance Units are granted in 2011. STI performance factor as determined during
the first quarter of 2012 is 120%.
1,000 Performance Units x 120% = 1,200 units
400 Performance Units vest on the Determination Date in 2012
400 Performance Units vest on the first anniversary of the Determination Date in 2013
400 Performance Units vest on the second anniversary of the Determination Date in 2014
Vested Performance Units will settle in Company stock.
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