Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 2010
GENON ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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1-16455
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76-0655566 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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1000 Main Street
Houston, Texas
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77002 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (832) 357-3000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
In this Current Report on Form 8-K and in the exhibits included as part of this report,
GenOn Energy refers to GenOn Energy, Inc., and we, us and our refer to GenOn Energy and its
consolidated subsidiaries.
Item 2.02. Results of Operations and Financial Condition.
On May 9, 2011, we issued an earnings release announcing our financial results for quarter
ended March 31, 2011. The earnings release is furnished as Exhibit 99.1 to this Form 8-K and
incorporated by reference herein. This Form 8-K and the earnings release are available at
www.genon.com in the investor relations section.
In our earnings release, we use certain non-GAAP financial measures. We think that these
non-GAAP financial measures provide meaningful representations of our consolidated operating and
financial performance and are useful to us and investors, analysts, rating agencies, banks and
other parties in facilitating the analysis of our results of operations from one period to another
and comparing our performance to our peers and providing a more complete understanding of factors
and trends affecting our business. This includes presenting certain non-GAAP measures on a pro
forma basis for the three months ended March 31, 2010. However, our non-GAAP financial measures may
not be comparable to similarly titled non-GAAP financial measures used by other companies. The
non-GAAP financial measures have limitations as analytical tools and should not be considered in
isolation or as a substitute for GAAP financial measures. Investors should review our consolidated
financial statements and publicly filed reports in their entirety and not rely on any single
financial measure.
These non-GAAP financial measures include adjusted income (loss) from continuing operations,
adjusted EBITDA and total debt excluding unamortized debt discounts and adjustments to fair value
of debt. We discuss these non-GAAP financial measures in Exhibit 99.2, including the reasons that
we think that these measures provide useful information and the additional purposes for which these
measures are used. Reconciliations of these non-GAAP financial measures to the most directly
comparable GAAP financial measure can be found in our earnings release.
Item 3.03 Material Modification to Rights of Security Holders.
On May 5, 2011, we filed a Certificate of Amendment to our Third Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware (the Protective Charter
Amendment), which is designed to prevent certain transfers of our common stock that could result
in an ownership change under Section 382 of the Internal Revenue Code (IRC) and, therefore,
significantly inhibit our ability to use our net operating losses (NOLs) to reduce our future
income tax liability. As described below under Item 5.07 of this Current Report on Form 8-K, the
Protective Charter Amendment was approved by the stockholders at GenOn Energys 2011 Annual Meeting
of Stockholders. The following is a summary of the material terms of the Protective Charter
Amendment:
Restricted Transfers. The Protective Charter Amendment generally will restrict any direct or
indirect transfer (such as transfers of our stock that result from the transfer of interests in
other entities that own our stock) if the effect would be to:
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increase the direct or indirect ownership of our stock by any Person
(as defined below) from less than 4.99% to 4.99% or more of our common
stock, as determined under Section 382 of the IRC; or |
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increase the percentage of our common stock owned directly or
indirectly by a Person owning or deemed to own 4.99% or more of our
common stock, as determined under Section 382 of the IRC. |
Person means any individual, firm, corporation or other legal entity, including persons
treated as an entity pursuant to Treasury Regulation § 1.382-3(a)(1)(i), and includes any successor
(by merger or otherwise) of such entity.
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Restricted transfers include sales to Persons whose resulting percentage ownership
(direct or indirect) of our common stock would exceed the 4.99% thresholds discussed above, or to
Persons whose direct or indirect ownership of our common stock would by attribution cause another
Person to exceed such threshold. Complicated common stock ownership rules prescribed by the IRC
(and regulations promulgated thereunder) will apply in determining whether a Person is a 4.99%
stockholder under the Protective Charter Amendment. A transfer from one
member of a public group (as determined under Section 382) to another member of the same
public group does not increase the percentage of our common stock owned directly or indirectly by
the public group and, therefore, such transfers are not restricted. For purposes of determining the
existence and identity of, and the amount of our common stock owned by, any stockholder, we will be
entitled to rely on the existence or absence of certain public securities filings as of any date,
subject to our actual knowledge of the ownership of our common stock. The Protective Charter
Amendment includes the right to require a proposed transferee, as a condition to registration of a
transfer of our common stock, to provide all information reasonably requested regarding such
persons direct and indirect ownership of our common stock.
Consequences of Restricted Transfers. Upon adoption of the Protective Charter Amendment, any
direct or indirect transfer attempted in violation of the Protective Charter Amendment would be
void as of the date of the restricted transfer as to the purported transferee (or, in the case of
an indirect transfer, the ownership of the direct owner of our common stock would terminate
simultaneously with the transfer), and the purported transferee (or in the case of any indirect
transfer, the direct owner) would not be recognized as the owner of the shares owned in violation
of the Protective Charter Amendment for any purpose, including for purposes of voting and receiving
dividends or other distributions in respect of such common stock, or in the case of options,
receiving our common stock in respect of their exercise. In this Current Report on Form 8-K, our
common stock purportedly acquired in violation of the Protective Charter Amendment is referred to
as excess stock.
In addition to a restricted transfer being void as of the date it is attempted, upon demand,
the purported transferee must transfer the excess stock to our agent along with any dividends or
other distributions paid with respect to such excess stock. Our agent is required to sell such
excess stock in an arms-length transaction (or series of transactions) that would not constitute a
violation under the Protective Charter Amendment. The net proceeds of the sale, together with any
other distributions with respect to such excess stock received by our agent, after deduction of all
costs incurred by the agent, will be distributed first to the purported transferee in an amount, if
any, up to the cost (or in the case of gift, inheritance or similar transfer, the fair market value
of the excess stock on the date of the restricted transfer) incurred by the purported transferee to
acquire such excess stock, and the balance of the proceeds, if any, will be distributed to a
charitable beneficiary. If the excess stock is sold by the purported transferee, such person will
be treated as having sold the excess stock on behalf of the agent, and will be required to remit
all proceeds to our agent, except to the extent we grant written permission to the purported
transferee to retain an amount not to exceed the amount such person otherwise would have been
entitled to retain had our agent sold such shares.
With respect to any restricted transfer that does not involve a transfer of our securities
within the meaning of the Delaware General Corporation Law but that does involve a transfer for
purposes of Section 382 of the IRC, such as an indirect transfer of our securities, the following
procedure will apply in lieu of those described above: In such case, such stockholder and/or any
person whose ownership of our securities is attributed to such stockholder will be deemed to have
disposed of (and will be required to dispose of) sufficient securities, simultaneously with the
transfer, to cause such holder not to be in violation of the Protective Charter Amendment, and such
securities will be treated as excess stock to be disposed of through the agent under the provisions
summarized above, with the maximum amount payable to such stockholder or such other person that was
the direct holder of such excess stock from the proceeds of sale by the agent being the fair market
value of such excess stock at the time of the restricted transfer.
Public Groups. In order to facilitate sales by stockholders into the market, the Protective
Charter Amendment permits otherwise restricted transfers of our common stock where the transferee
is a public group. These permitted transfers include transfers to new public groups that would be
created by the transfer and would be treated as a 4.99% stockholder.
Waiver. In addition, the Board has the discretion to approve a transfer of our common stock
that would otherwise violate the transfer restrictions if it determines that the transfer is in our
and our stockholders best interests. If the Board decides to permit such a transfer, that transfer
or later transfers may result in an ownership change that could limit our use of our NOLs. The
Board may request relevant information from the acquirer and/or selling party in order to determine
compliance with the Protective Charter Amendment or the status of our federal income tax benefits,
including an opinion of counsel selected by the Board (the cost of which will be borne by the
transferor and/or the transferee) that the transfer will not result in a limitation on the use of
the NOLs under Section
382 of the IRC. If the Board decides to grant a waiver, it may impose conditions on the
acquirer or selling party.
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The Protective Charter Amendment expires on the earliest of (i) the close of business on May
3, 2014, (ii) the date on which the Board determines that the Protective Charter Amendment is no
longer necessary or desirable for the preservation of our NOLs or other tax benefits because of the
repeal of Section 382 of the IRC or any successor statute, (iii) the date on which the Board
determines that none of our NOLs or other tax benefits may be carried forward, and (iv) such date
as the Board otherwise determines that the Protective Charter Amendment is no longer necessary or
desirable.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
May 3, 2011, the Compensation Committee of the Board of Directors approved a severance plan that will provide
severance benefits under certain circumstances to our named executive officers upon expiration of the agreements currently
providing for their individual severance arrangements. In particular, under the new severance plan,
each participant is generally entitled to receive severance benefits upon the participants
involuntarily termination of employment that did not result from death, disability or termination
for cause or that did not follow a change in control. If a
participant is deemed eligible, the plan provides for a cash
severance payment equal to (i) a multiple of the sum of base
salary and annual short-term incentive award at target (1.5 in the
case of Senior Vice Presidents and Executive Vice Presidents and two in the case of the Chief
Executive Officer and the President and Chief Operating Officer); (ii) a pro-rated target annual short-term
incentive award based on the number of days the participant was employed during the year in which
his or her employment was terminated, or actual annual short-term incentive award if the employment
was terminated after December 1; and (iii) continued health and welfare benefits coverage (medical,
dental and vision) through a defined period following the severance.
Item 5.07 Submission of Matters to a Vote of Security Holders.
Our Annual Meeting of Stockholders was held on May 4, 2011 in Houston, Texas. The following
matters were submitted to a vote of our stockholders:
(1) Votes regarding the election of the directors to serve until the next annual meeting of
stockholders were as follows:
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Director |
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For |
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Against |
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Abstain |
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Broker Non-Votes |
E. William Barnett
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585,781,800
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5,377,602
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6,385,061
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95,579,915 |
Terry G. Dallas
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591,194,663
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4,333,943
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2,015,857
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95,579,915 |
Mark M. Jacobs
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586,312,745
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5,870,090
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5,361,628
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95,579,915 |
Thomas H. Johnson
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583,405,065
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6,494,247
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7,645,151
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95,579,915 |
Steven L. Miller
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586,058,662
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5,117,669
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6,368,132
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95,579,915 |
Edward R. Muller
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577,428,592
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12,641,716
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7,474,155
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95,579,915 |
Robert C. Murray
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590,927,339
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4,375,735
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2,241,389
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95,579,915 |
Laree E. Perez
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586,390,980
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5,373,812
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5,779,671
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95,579,915 |
Evan J. Silverstein
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586,645,273
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4,876,736
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6,022,454
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95,579,915 |
William L. Thacker
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589,715,534
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4,685,069
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3,143,860
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95,579,915 |
(2) Votes regarding ratification of the Audit Committees selection of KPMG LLP as our independent
auditors for fiscal year 2011 were as follows:
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For |
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Against |
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Abstain |
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Broker Non-Votes |
687,544,456
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3,761,669
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1,818,253
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(3) Votes regarding the Protective Charter Amendment were as follows:
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For |
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Against |
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Abstain |
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Broker Non-Votes |
673,497,135
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15,854,130
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3,773,113
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(4) Votes regarding the stockholder rights plan, adopted by the Board on January 15, 2001, as
amended November 23, 2010 were as follows:
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For |
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Against |
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Abstain |
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Broker Non-Votes |
515,332,922
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80,498,865
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1,712,676
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95,579,915 |
(5) Votes regarding an advisory vote on the compensation of our named executive officers were as
follows:
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For |
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Against |
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Abstain |
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Broker Non-Votes |
570,429,152
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24,656,961
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2,458,350
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95,579,915 |
(6) Votes regarding an advisory vote on the frequency of conducting future advisory votes on the
compensation of our named executive officers were as follows:
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One Year |
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Two Years |
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Three Years |
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Abstain |
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Broker Non-Votes |
524,339,894
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1,916,047
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68,456,396
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2,883,087
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95,579,915 |
(7) Votes regarding the stockholder proposal described in the proxy materials were as follows:
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For |
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Against |
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Abstain |
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Broker Non-Votes |
89,208,590
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443,054,796
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65,281,077
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95,579,915 |
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
3.1 |
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Certificate of Amendment of Third
Restated Certificate of Incorporation of GenOn Energy, Inc., dated
May 5, 2011 |
99.1 |
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Press Release dated May 9, 2011 |
99.2 |
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Explanation of Non-GAAP Financial Measures |
INFORMATION FURNISHED
The information in Item 2.02 and in Exhibits 99.1 and 99.2 are being furnished, not filed.
Accordingly, the information will not be incorporated by reference into any filing or report by us
with the Securities and Exchange Commission, whether made before or after the date hereof, unless
specifically identified as being incorporated by reference therein.
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This document contains statements, estimates or projections that constitute forward-looking
statements as defined under U.S. federal securities laws. In some cases, one can identify
forward-looking statements by terminology such as will, expect, estimate, think,
forecast, guidance, outlook, plan, lead, project or other comparable terminology.
Forward-looking statements are subject to certain risks and uncertainties that could cause actual
results to differ materially from our historical experience and our present expectations or
projections. These risks include, but are not limited to: (i) legislative and regulatory
initiatives or changes in
regulations affecting the electric industry; (ii) changes in, or changes in the application
of, environmental or other laws and regulations; (iii) failure of our generating facilities to
perform as expected, including due to outages for unscheduled maintenance or repair; (iv) changes
in market conditions or the entry of additional competition in our markets; (v) the ability to
integrate successfully the businesses following the merger and realize cost savings and any other
synergies; and (vi) those factors contained in our periodic reports filed with the SEC, including
in the Risk Factors section of our most recent Annual Report on Form 10-K. The forward-looking
information in this document is given as of the date of the particular statement, and we assume no
duty to update this information. Our filings and other important information are also available on
the Investor Relations page of our web site at www.genon.com.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENON ENERGY, INC.
(Registrant)
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Date: May 9, 2011 |
By: |
/s/ Thomas C. Livengood
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Thomas C. Livengood |
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Senior Vice President and Controller |
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EXHIBIT INDEX
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Exhibit |
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Exhibit Description |
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3.1
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Certificate of Amendment of Third Restated Certificate of Incorporation of GenOn Energy,
Inc., dated May 5, 2011 |
99.1
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Press Release dated May 9, 2011 |
99.2
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Explanation of Non-GAAP Financial Measures |