NRG GENERATING (U.S.) INC.
1998 STOCK OPTION PLAN
GRANT OF EMPLOYEE NONQUALIFIED STOCK OPTION
DATE OF GRANT: ______________________
THIS GRANT, dated as of the date of grant first stated above (the "Date
of Grant"), is delivered by NRG Generating (U.S.) Inc. (the "Company") to
_____________________ (the "Grantee"), who is an Employee of the Company or a
Subsidiary.
WHEREAS, the Board of Directors of the Company (the "Board") on April
20, 1998, adopted the NRG Generating (U.S.) Inc. 1998 Stock Option Plan (the
"Plan") effective as of that date;
WHEREAS, the Plan provides for the granting of Nonqualified Stock
Options by the Committee to directors of the Company, officers and key
employees of the Company and its Subsidiaries and certain other individuals
who have the capability of making or who have made a substantial contribution
to the Company to purchase shares of the Common Stock of the Company (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers Grantee to be a person who is eligible
for a grant of Nonqualified Stock Options under the Plan, and has determined
that it would be in the best interest of the Company to grant the
Nonqualified Stock Options documented herein.
NOW THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set forth, the Company,
with the approval and at the direction of the Committee, hereby grants to
Grantee, as of the Date of Grant, an option to purchase up to __________
shares of Stock at a price of $___________ per share. The shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred to
as the "Option Shares." The Option is intended by the parties hereto to be,
and shall be treated as, a Nonqualified Stock Option which is not subject to
the provisions of Code Section 422.
2. INSTALLMENT EXERCISE.
Subject to such further limitations as are provided herein, the Option
shall become exercisable in three (3) installments, Grantee having the right
hereunder to purchase from the Company the following number of Option Shares
upon exercise of the Option, on and after the following dates, in cumulative
fashion:
(i) on and after the first anniversary of the Date of Grant up to
one-third (ignoring fractional shares) of the total number of Option Shares;
(ii) on and after the second anniversary of the Date of Grant, up to an
additional one-third (ignoring fractional shares) of the total number of
Option Shares; and
(iii) on and after the third anniversary of the Date of Grant, the
remaining Option Shares.
Exhibit 10.35.3
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate and become
null and void after the expiration of ten (10) years from the Date of Grant
(the "Option Term").
(b) Upon the occurrence of Grantee's ceasing for any reason to be
employed by the Company, the Option, to the extent not previously exercised,
shall terminate and become null and void, subject to the further provisions
of this Section 3(b), which shall apply based upon the circumstances of such
termination of employment. Upon termination of Grantee's employment by
reason of Disability or death, all unexercised portions of the Option shall
become immediately exercisable and the Option may be exercised during the
period beginning upon such termination and ending one year after such date.
In the event of any other termination of Grantee's employment, the Option may
be exercised during the three-month period following the date of termination,
but only to the extent that the Option was outstanding and exercisable on the
date of such termination. In no event, however, shall any such period extend
beyond the Option Term.
(c) In the event of Grantee's death, the Option may be exercised by
Grantee's legal representative(s) as and to the extent that the Option would
otherwise have been exercisable by Grantee, subject to the provisions of
Section 3(b) hereof.
(d) A transfer of Grantee's employment between the Company, its Parents,
Subsidiaries or affiliates, shall not be deemed to be a termination of
Grantee's employment.
(e) Notwithstanding any other provisions set forth herein or in the
Plan, if Grantee shall: (i) commit any act of malfeasance or wrongdoing
affecting the Company, its Parents or Subsidiaries, (ii) breach any covenant
not to compete, or employment contract, with the Company, its Parents or
Subsidiaries, or (iii) engage in conduct that would warrant Grantee's
discharge for cause (excluding general dissatisfaction with the performance
of Grantee's duties, but including any act of disloyalty or any conduct
clearly tending to bring discredit upon the Company, its Parents or
Subsidiaries), any unexercised portion of the Option shall immediately
terminate and be void.
4. EXERCISE OF OPTIONS.
(a) Grantee may exercise the Option with respect to all or any part of
the number of Option Shares that are exercisable hereunder by giving the
Secretary of the Company written notice of intent to exercise. The notice of
exercise shall specify the number of Option Shares as to which the Option is
to be exercised and date of exercise thereof, which date shall be at least
five (5) days after the signing of such notice unless an earlier time shall
have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by Grantee of the Option Price for
Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash or as the Company may otherwise
permit as further set forth in the Plan. On the exercise date specified in
Grantee's notice or as soon thereafter as is practicable, the Company shall
cause to be delivered to Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued Stock or
reacquired Stock, as the Company may elect) upon full payment for such Option
Shares. The obligation of the Company to deliver Stock shall, however, be
subject to the condition that if at any time the Committee shall determine in
its discretion that the listing, registration or qualification of the Option
or the Option Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the
Option or the issuance or purchase of Stock thereunder, the Option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Committee.
Exhibit 10.35.3 2
(c) If Grantee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, Grantee's right to purchase
such Option Shares may be terminated by the Company or the exercise of the
Option may be ignored, as the Committee in its sole discretion may determine.
The date specified in Grantee's notice as the date of exercise shall be
deemed the date of exercise of the Option, provided that payment in full for
the Option Shares to be purchased upon such exercise shall have been received
by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK.
In the event of a reorganization, recapitalization, change of shares,
stock split, spin-off, stock dividend, reclassification, subdivision, or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure of shares of capital stock of the Company,
the Committee shall appropriately adjust the number and kind of shares of
Stock subject to the Option and such option price; provided, however, that no
such adjustment shall give Grantee any additional benefits under the Option.
In the event of any Corporate Transaction or an event giving rise to a
Change in Control, the Option shall be fully vested, nonforfeitable and
become exercisable as of the date of the Change in Control or Corporate
Transaction or as otherwise determined in accordance with Section 5.5(c) of
the Plan. However, in the case of a Corporate Transaction, the Committee may
determine that the Option will not be so accelerated if and to the extent (i)
such Option is either to be assumed by the successor or parent thereof or to
be replaced with a comparable Option to purchase shares of the capital stock
of the successor corporation or parent thereof, or (ii) such Option is to be
replaced with a cash incentive program of the successor corporation that
preserves the option spread existing at the time of the Corporate Transaction
and provides for subsequent payment in accordance with the same vesting
schedule applicable to such Option. In the event of a Corporate Transaction
described in clauses (i) or (ii) of Section 5.5(b) of the Plan, the Committee
may, upon no less than 60 days notice to the optionee (an "Acceleration
Notice") determine that such optionee's Options will terminate as of the
effective date of such Corporate Transaction, in which event such Options
shall be fully vested, nonforfeitable and become exercisable immediately as
of the date of such Acceleration Notice. In the event of a Change in Control
or Corporate Transaction described in clauses (a)(i), (a)(ii) and (b)(iii) of
Section 5.5 of the Plan or in the event the Acceleration Notice is not timely
given, the Option shall remain exercisable for the remaining term of the
Option notwithstanding the provisions of Article V of the Plan, subject to
any limitations thereto which may be applicable to Incentive Stock Options.
In the event of a Corporate Transaction described in clauses (a)(iii), (b)(i)
or (b)(ii) of Section 5.5 of the Plan, which is preceded by a timely
Acceleration Notice, the Option shall terminate as of the effective date of
the Corporate Transaction described therein. In no event shall the Option be
exercised after the expiration of the Option Term.
6. NO RIGHTS AS SHAREHOLDERS.
Grantee shall have no rights as a shareholder with respect thereto unless
and until certificates for shares of Common Stock are issued to him or her.
7. NON-TRANSFERABILITY OF OPTION.
During Grantee's lifetime, this Option shall be exercisable only by
Grantee or his or her guardian or legal representative.
8. EMPLOYMENT NOT AFFECTED.
The grant of the Option hereunder shall not be construed as conferring on
Grantee any right to continued employment, and Grantee's employment may be
terminated without regard to the effect which such action might have upon him
as a holder of this Option.
9. AMENDMENT OF OPTION.
The Option may be amended by the Committee at any time (i) if the
Committee determines, in its sole discretion, that amendment is necessary or
advisable in light of any addition to or change in the Code or in the
regulations issued thereunder, or any federal or state securities law or
other law of regulation, which change occurs after the Date of Grant and by
Exhibit 10.35.3 3
its terms applies to the Option; or (ii) other than in the circumstances
described in clause (i), with the consent of Grantee.
10. NOTICE.
Any notice to the Company provided for in this instrument shall be
addressed to it in care of its Secretary at its executive offices and any
notice to Grantee shall be addressed to Grantee at the current address shown
on the payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered or
certified mail, postage prepaid.
11. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the Plan, the terms and definitions of
which are incorporated herein by reference, and the Option shall in all
respects by interpreted in accordance with the Plan.
12. GOVERNING LAW.
To the extent that federal law shall not be held to have preempted local
law, this Option shall be governed by the laws of the State of Delaware. If
any provision of the Option shall be held invalid or unenforceable, the
remaining provisions hereof shall continue in full force and effect.
Exhibit 10.35.3 4
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Grant of Nonqualified Stock Option, and Grantee has placed
his or her signature hereon, effective as of the Date of Grant.
NRG GENERATING (U.S.) INC.
By:
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Timothy P. Hunstad
Vice President and Chief Financial
Officer
GRANTEE
Signature
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Name:
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(Print)
Address:
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Exhibit 10.35.3 5