NRG GENERATING (U.S.) INC.
1998 STOCK OPTION PLAN
GRANT OF NONEMPLOYEE DIRECTOR
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 a director of the Company who
is not 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 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
Exhibit 10.35.4
(iii) on and after the third anniversary of the Date of Grant, the
remaining Option Shares.
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) When the Grantee ceases to be a director of the Company, the
Option, to the extent not previously exercised, shall terminate and become
null and void immediately upon the Separation Date, except in a case where
the Grantee's service as a director of the Company ceases by reason of
Disability or death or otherwise as follows. If the Grantee ceases to be a
director of the Company 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 no event, however, shall any such period extend
beyond the Option Term. If the Participant's service as a director of the
Company terminates for any other reason prior to the exercise of all portions
of the Option, the Participant shall have the right within three (3) months
of his Separation Date, but not beyond the expiration date of the Option, to
exercise such unexercised portions of the Option.
(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) 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, or (ii) engage in conduct
that would warrant Grantee's removal 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.
(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
Exhibit 10.35.4 2
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)(i)(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. 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 its terms applies to the
Option; or (ii) other than in the circumstances described in clause (i), with
the consent of Grantee.
Exhibit 10.35.4 3
9. 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 address below. Any
notice shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
10. 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.
11. 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 10.35.4 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 10.35.4 5