ACCELERATED SHARE REPURCHASE
AGREEMENT
NRG Energy,
Inc.
211 Carnegie Center
Princeton, NJ 08540
Credit Suisse
First Boston Capital LLC
Eleven Madison Avenue
New York, NY 10010
THIS AGREEMENT
(this “ Agreement ”) is made as of this
11 th
day of August, 2005, among CREDIT
SUISSE FIRST BOSTON CAPITAL LLC (“ Seller ”),
NRG Energy, Inc., a Delaware corporation (Symbol: “
NRG ”) (“ Buyer ”), and CREDIT
SUISSE FIRST BOSTON LLC, as agent (in such capacity, the “
Agent ”) hereunder.
WHEREAS, Buyer
wishes to purchase, and Seller wishes to sell, shares of common
stock, par value U.S. $ 0.01 per share, of Buyer (including any
security entitlements in respect thereof, “ Shares
”) on the terms set forth herein (the “
Transaction ”);
WHEREAS, certain
terms used herein have the meanings set forth in
Article 3;
NOW, THEREFORE, in
consideration of their mutual covenants herein contained, the
parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
ARTICLE 1
Sale and
Purchase
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On the Trade
Date, Seller will deliver to Buyer a number of Shares (the “
Purchased Shares ”) equal to 6,346,788 (the “
Number of Shares ”) and Buyer will pay Seller cash in
immediately available funds in an amount equal to USD 250,000,000
(the product of USD 39.39 per Share (the “ Initial
Price ”) and the Number of Shares) on a
delivery-versus-payment basis.
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ARTICLE 2
Purchase Price
Adjustment
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If Buyer has
not elected Cash Settlement in accordance with the provisions
opposite “Settlement Method” below, Buyer will deliver
to Seller on the Settlement Date a number of Shares equal to 100.7%
of the Final Settlement Amount if the Final Settlement Amount is
positive; provided that Buyer shall
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not be required
to deliver more than the Maximum Deliverable Number of
Shares.
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If Buyer has
elected Cash Settlement in accordance with the provisions opposite
“Settlement Method” below and the Final Settlement
Amount is positive, Buyer will pay to Seller on the Cash Settlement
Date an amount in cash equal to the product of (x) the Final
Settlement Amount and (y) the Cash Settlement
Price.
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If Buyer has
not elected Cash Settlement in accordance with the provisions
opposite “Settlement Method” below, Seller will deliver
to Buyer on the Settlement Date a number of shares equal to the
absolute value of the Final Settlement Amount if the Final
Settlement Amount is negative.
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If Buyer has
elected Cash Settlement in accordance with the provisions opposite
“Settlement Method” below and the Final Settlement
Amount is negative, Seller will pay to Buyer on the Cash Settlement
Date an amount in cash equal to the product of (x) the
absolute value of the Final Settlement Amount and (y) the Cash
Settlement Price.
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Buyer or Seller
shall make the Buyer Delivery or Seller Delivery, as the case may
be, pursuant to Article 2 on the Settlement Date unless Buyer
has notified Seller no later than the 5 th Scheduled Trading Day immediately preceding the
Scheduled Final Valuation Date that “Cash Settlement”
shall apply, in which case Buyer shall be deemed to have
represented to Seller that Buyer is not aware of any material
non-public information regarding Buyer or the Shares at the time of
such notice, and which notice shall be irrevocable.
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ARTICLE 3
Certain Terms and
Definitions
Section 3.01.
As used herein, the following words and phrases shall have the
following meanings:
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August 11,
2005
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The date that
immediately follows the last Valuation Date by 3 Clearance System
Business Days.
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Clearance
System Business Day:
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Any day on
which the Clearance System is open (or, but for an event beyond the
control of the parties as a result of which the Clearance System
cannot clear the transfer of the Shares, would have been open) for
the acceptance and execution of settlement instructions.
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The Depository
Trust Company, New York, New York, and any successor
thereto.
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The sum of all
Daily Net Share Amounts for all Valuation Dates.
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Each of the
Scheduled Trading Days commencing on the Trade Date to and
including the date on which the sum of all Daily Reference Share
Amounts for such date and all previous Valuation Dates equals the
Number of Shares (which is currently expected, in the absence of
suspensions or reductions of the Daily Reference Share Amount, to
occur on February 13, 2006 (the “Scheduled Final
Valuation Date”)).
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Any day on
which the Exchange and each Related Exchange are scheduled to be
open for their respective regular trading sessions.
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New York Stock
Exchange
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Each exchange
or quotation system where trading has a material effect (as
determined by the Calculation Agent) on the overall market for
futures or options contracts relating to the Shares.
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Daily Reference
Share Amount:
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For any
Valuation Date, 49,584, except that for the first Valuation Day the
Daily Reference Share Amount shall be 49,620.
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For any
Valuation Date, the quotient obtained by dividing the Daily
Difference for such Valuation Date by the Daily Reference Price for
such Valuation Date. For the avoidance of doubt, the Daily Net
Share Amount may be a positive or negative amount.
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For any
Valuation Date, the product of (i) (A) the Daily Reference
Price for such Valuation Date minus (B) the Initial
Price, multiplied by (ii) the Daily Reference Share
Amount for such Valuation Date. For the avoidance of doubt, the
Daily Difference may be a positive or negative amount.
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For any
Valuation Date, (i) the VWAP Price on such Valuation Date, or,
if such VWAP Price would be greater than the Maximum Price, the
Maximum Price, or, if such VWAP Price would be less than the
Minimum Price, the Minimum Price, plus (ii) USD 0.03
per Share.
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For any
Valuation Date or Cash Settlement Averaging Date, the
volume-weighted average price per Share at which the Shares trade
on any exchange on which the Shares are traded on such day,
excluding trades (i) that do not settle regular way,
(ii) opening trades (regular way) reported in the consolidated
system, (iii) trades effected during the 10 minutes before the
scheduled close of trading on the Exchange and 10 minutes before
the scheduled close of the primary trading session in the market
where the trade is effected and (iv) trades on such day that
do not satisfy the requirements of Rule 10b-18(b)(3) under the
Exchange Act, as determined by the Calculation Agent by reference
to Bloomberg Page [“AQR”] (or any successor thereto)
for Buyer.
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USD 40.5717 per
Share
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USD 38.2083 per
Share
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Maximum
Deliverable Number:
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670,000,
subject to adjustment pursuant to Section 7.01.
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The period
starting on the first Valuation Date and ending on the last
Valuation Date.
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The date that
immediately follows the last Cash Settlement Averaging Date by 3
Business Days.
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Any day that is
not a Saturday, a Sunday or a day on which banking institutions or
trust companies in The City of New York are authorized or obligated
by law or executive order to close.
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Cash Settlement
Averaging Dates:
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Each of the 10
Scheduled Trading Days immediately following the Valuation
Period.
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With respect to
a Buyer Payment, the average of the VWAP Price for each Cash
Settlement Averaging Date; and, with respect to a Seller Payment,
the average of the “Volume Weighted Average Price” per
Share on each Cash Settlement Averaging Date as determined by the
Calculation Agent by reference to Bloomberg Page “AQR”
(or any successor thereto) for the Buyer with respect to the period
from 9:30 a.m. to 4:00 p.m. (New York City time) on each such
day.
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Cash Settlement
Averaging Period:
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The period
starting on the first Cash Settlement Averaging Date and ending on
the last Cash Settlement Averaging Date.
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Credit Suisse
First Boston Capital LLC.
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The Securities
Exchange Act of 1934, as amended.
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The Guarantee,
dated May 16, 2001, made by Credit Suisse First Boston Capital
(USA), Inc. in favor of each and every Buyer to financial
transactions with its wholly-owned subsidiary, Credit Suisse First
Boston Capital LLC.
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Rule 10b-18 under the Exchange
Act.
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The Securities
Act of 1933, as amended.
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Section 3.02.
In addition, the following terms shall have the meanings set forth
in the Sections indicated below:
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Section 8.04
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Section 7.02(h)
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Section 5.02(k)
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“
Relevant CSFB Personnel ”
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Section 6.01(e)
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Section 4.01(b)
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Section 4.01(a)
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Section 7.02
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Section 7.02
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Section 7.02
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Section 7.02
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ARTICLE 4
Purchases And Hedging by
Seller
Section 4.01
. Seller Purchases and Hedging. (a) The parties
acknowledge that the Purchased Shares may be sold short to Buyer
and that during the Valuation Period and, if the Final Settlement
Amount is positive and Buyer has elected Cash Settlement in
accordance with Article 2, during the Cash Settlement
Averaging Period, Seller may purchase Shares in connection with the
Transaction, which Shares may be used to cover all or a portion of
such short sale (any such purchases, collectively, “
Seller Purchases ” (it being understood that such term
does not include any purchases made by Seller in connection with
hedging of Seller’s exposure to any optionality arising under
the Transaction)).
(b)
Any Seller Purchases and any other hedging or trading by Seller or
its affiliates in connection with the Transaction (“
Seller Hedging ”) will be conducted independently of
Buyer. The timing of any Seller Purchases or Seller Hedging, the
number of Shares thus purchased or sold on any day, the price paid
or received per Share for any Seller Purchases or relating to any
Seller Hedging and the manner in which any Seller Purchases are
made or Seller Hedging is conducted, including without limitation
whether such purchases or transactions are made on any securities
exchange or privately, shall be within the sole discretion of
Seller.
Section 4.02.
Suspension of Seller Purchases or Seller Hedging .
(a) Without limiting the generality of the foregoing, if at
any time Seller determines in good faith and a commercially
reasonable manner that (i) any Seller Purchases or Seller
Hedging may raise material risks under applicable securities laws,
(ii) it is necessary or advisable to limit Seller Purchases or
Seller Hedging in light of market conditions or a market disruption
at such time or (iii) a Hedging Disruption has occurred,
Seller (or its agent or affiliate) may, in its discretion,
(x) if such event occurs during the Valuation Period, suspend
any or all of such Seller Purchases or Seller Hedging, as the case
may be, and may elect that the Daily Reference Share Amount on the
affected Valuation Date or Valuation Dates for such day be reduced
to zero or any other amount determined by Seller, or (y) if
such event occurs during the Cash Settlement Averaging Period,
suspend any or all of such Seller Purchases or Seller Hedging, as
the case may be, and may elect that the affected Cash Settlement
Averaging Date or Cash Settlement Averaging Dates be postponed, in
each case as appropriate with regard to the relevant securities
laws, market conditions or disruptions, and Seller shall notify
Buyer of such suspension of Seller Purchases or Seller Hedging.
Upon resuming Seller Purchases during the Valuation Period, Seller
may adjust the Daily Reference Share Amount for any subsequent
Valuation Date.
ARTICLE 5
Representations and
Warranties
Section 5.01.
Representations and Warranties of Buyer and Seller . Each
party hereto makes to the other party hereto the representations
and warranties contained in Sections 3(a) and
3(c) of the
1992 ISDA Master Agreement (Multicurrency – Cross Border), as
published by the International Swap Dealers Association, Inc., and
each reference therein to “a Transaction” shall be
deemed to be a reference to the Transaction, each reference therein
to “this Agreement” shall be deemed to be a reference
to this Agreement and any reference therein to any “Credit
Support Document” shall be deemed to have been deleted with
respect to Buyer and shall be deemed to be a reference to the
Guarantee with respect to Seller.
Section 5.02.
Representations, Warranties and Agreements of Buyer . Buyer
represents and warrants to Seller that:
(a)
No Termination Event has occurred and is continuing and no such
event or circumstance would occur as a result of its entering into
or performing its obligations under this Agreement.
(b)
All reports and other documents filed by Buyer with the Securities
and Exchange Commission pursuant to the Exchange Act, when
considered as a whole (with the most recent such reports and
documents deemed to amend inconsistent statements contained in any
earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact
required to be stated herein or necessary to make the statements
therein, in the light of the circumstances in which they were made,
not misleading.
(c)
Buyer has publicly announced its entry into the Transaction, and
Buyer agrees to comply with all applicable disclosure requirements
relating to the Transaction including, without limitation,
Item 703 of Regulation S-K under the Securities
Act.
(d)
Any Shares, when issued and delivered by Buyer in accordance with
the terms of the Transaction, will be duly authorized and validly
issued, fully paid and nonassessable, and the issuance thereof will
not be subject to any preemptive or similar rights.
(e)
Buyer has reserved and will keep available, free from preemptive
rights, out of its authorized but unissued Shares, solely for the
purpose of issuance upon settlement of the Transaction as herein
provided, the full number of Shares as shall then be issuable upon
settlement of the Transaction; subject to the limitation set forth
in Article 2.
(f)
Prior to the Settlement Date, any Shares to be delivered on the
Settlement Date by Buyer shall have been approved for listing on
the Exchange, subject to official notice of issuance (it being
understood that nothing herein shall create any obligation of Buyer
to register any Shares under the Securities Act).
(g)
Buyer is not entering into this Agreement to create actual or
apparent trading activity in the Shares (or any security
convertible into or exchangeable for Shares), to raise or depress
or otherwise manipulate the price of the Shares (or any security
convertible into or exchangeable for Shares), to facilitate a
distribution of the Shares (or any security convertible into or
exchangeable for Shares) or in connection with a future issuance of
securities.
(h)
Before and after giving effect to the Transaction, Buyer has
complied with all applicable law, rules and regulations in
connection with disclosure of all material information with respect
to its business, operations or condition (financial or otherwise);
and as of the date hereof and as of each day hereon forth until the
Settlement Date, Buyer is not and will not be prohibited by law,
contract or otherwise from purchasing Shares.
(i)
Buyer is entering into this Agreement in good faith and not as part
of plan or scheme to evade compliance with the federal securities
laws including, without limitation, Rule 10b-5 of the Exchange
Act. Buyer has not entered into or altered any hedging transaction
relating to the Shares corresponding to or offsetting the
Transaction.
(j)
During the Valuation Period and the Cash Settlement Averaging
Period, if any, Buyer does not have, and shall not attempt to
exert, any influence over how, when, whether or at what price to
effect any purchase or sale of Shares by Seller (or its agent or
affiliate).
(k)
Buyer is not engaged in a “distribution”, as such term
is used in Regulation M, that would preclude purchases by
Buyer of Shares.
(l)
Buyer is an “eligible contract participant” as such
term is defined in Section 1(a)(12) of the Commodity Exchange
Act, as amended.
(m)
Buyer is not and, after giving effect to the Transaction, will not
be an “investment company” as such term is defined in
the Investment Company Act of 1940, as amended.
(n)
Buyer is, and shall be as of the date of any payment or delivery by
Buyer hereunder, solvent and able to pay its debts as they come
due, with assets having a fair value greater than liabilities and
with capital sufficient to carry on the businesses in which it
engages.
(o)
Buyer (i) has timely filed, caused to be timely filed or will
timely file or cause to be timely filed all material tax returns
that are required to be filed by it as of the date hereof and
(ii) has paid all material taxes shown to be due and payable
on said returns or on any assessment made against it or any of its
property and all other material taxes, assessments, fees,
liabilities or other charges imposed on it or any of its property
by any governmental authority, unless in each case the same are
being contested in good faith. For purposes of determining whether
a tax return has been timely filed, any extensions shall be taken
into account.
(p)
The public disclosure of all material information relating to Buyer
is within Buyer’s control.
ARTICLE 6
Covenants of
Buyer
Section 6.01
. Covenants of Buyer. Buyer hereby agrees with Seller to the
following:
(a)
Without the prior written consent of Seller, Buyer shall not, and
shall cause its affiliates or affiliated purchasers (as defined in
Rule 10b-18) not to, directly or indirectly (including by
means of a derivative instrument) enter into any transaction to
purchase any Shares, other than purchases from employees of Buyer
that are not “Rule 10b-18 purchases” as such term
is defined in Rule 10b-18, until its obligations under the
Transaction have been satisfied in full.
(b)
Buyer shall, at least one day prior to the first day of the
Valuation Period, notify Seller of the total number of Shares
purchased in Rule 10b-18 purchases of blocks pursuant to the
once-a-week block exception contained in Rule 10b-18(b)(4) by
or for Buyer or any of its affiliated purchasers during each of the
four calendar weeks preceding the first day of the Valuation Period
and during the calendar week in which the first day of the
Valuation Period occurs (“Rule 10b-18 purchase”,
“blocks” and “affiliated purchaser” each
being used as defined in Rule 10b-18), which notice shall be
substantially in the form set forth as Annex A hereto.
(c)
Neither Buyer nor any of its affiliates shall take any action that
would cause any Seller Purchases not to meet the requirements of
the safe harbor provided by Rule 10b-18 under the Exchange Act
if such purchases were made by Buyer.
(d)
On any day prior to the second Business Day immediately following
the last day of the Valuation Period, or, if the Final Settlement
Amount is positive and Buyer has elected Cash Settlement in
accordance with Article 2, the last day of the Cash Settlement
Averaging Period, neither Buyer nor any of its affiliates or agents
shall make a distribution (as defined in Regulation M) of
Shares, or any security for which the Shares are a reference
security (as defined in
Regulation M) that would, in the view of
Seller, preclude Buyer from purchasing Shares or cause any such
purchases to violate any law, rule or regulation, unless Buyer
notifies Seller of such distribution 5 Business Days prior to the
beginning of the restricted period applicable to such distribution
under Regulation M, in which case Buyer shall be deemed to
have represented to Seller that Buyer is not aware of any material
non-public information regarding Buyer or the Shares at the time of
such notice. Buyer acknowledges that any such notice may
(x) cause the Daily Reference Share Amount on any Valuation
Date to be reduced or (y) if provided during the Cash
Settlement Averaging Period if the Final
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