Exhibit 10.33
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by
and among Mirant Corporation ("Mirant"), Mirant Services LLC (the "Company") and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Executive") (hereinafter collectively referred to as the
"Parties") is effective as of the execution date of this Agreement unless
otherwise provided herein.
W I T N E S S E T H:
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WHEREAS, Executive serves as Senior Vice President of the Company,
which serves as the employer with respect to assets held by Mirant;
NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following
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terms shall have the following meanings:
(a) "Annual Compensation" shall mean Executive's highest
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annual base salary rate in effect during the twelve (12) month period
immediately preceding the date of the Change in Control, plus
Executive's target annual bonus for the year in which the Change in
Control occurred, or if such target annual bonus had not been set for
such year, Executive's target annual bonus for the next previous year.
(b) "Board" shall mean the board of directors of Mirant.
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(c) "Change in Control" shall have the meaning of such term as
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set forth in the Change in Control Benefit Plan Determination Policy.
However, any amendment to the Policy which causes the definition of
"Change in Control" to be more restrictive than such definition in
effect on the Effective Date shall not be taken into account for
purposes of this Agreement, unless approved by the Board or a
compensation committee thereof and agreed to in writing by Executive.
(d) "Change in Control Benefit Plan Determination Policy"
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shall mean the Mirant Change in Control Benefit Plan Determination
Policy, as approved by the Board, as such policy may be amended from
time to time in accordance with the provisions therein.
(e) "COBRA Coverage" shall mean any continuation coverage to
which Executive or his dependents may be entitled pursuant to Code
Section 4980B.
(f) "Code" shall mean the Internal Revenue Code of 1986,
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as amended.
(g) "Company" shall mean Mirant Services LLC, its
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successors and assigns.
(h) "Effective Date" shall mean the date of execution of
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this Agreement, unless otherwise provided herein.
(i) "Executive Outplacement Program" shall mean the program
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established by the Company from time to time for the purpose of
assisting executive officers of the Company in finding employment
outside of the Company which provides for the following services:
(i) self-assessment, career decision and goal setting;
(ii) job market research and job sources;
(iii) networking and interviewing skills;
(iv) planning and implementation strategy;
(v) resume writing, job hunting methods and salary
negotiation; and
(vi) office support and job search resources.
(j) "Good Reason" shall mean, without Executive's express
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written consent, after written notice to the Company, and after a
thirty (30) day opportunity for the Company to cure, the continuing
occurrence of any of the following events:
(i) Inconsistent Duties. A meaningful and
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detrimental alteration in Executive's position or in thenature
or status of his responsibilities from those in effect
immediately prior to the Change in Control;
(ii) Reduced Salary. A reduction of five percent (5%)
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or more by the Company in either of the following: (a)
Executive's highest annual base salary rate as in effect at
any time during the twelve (12) month period immediately
preceding the date of the Change in Control ("Base Salary")
(except for a less than ten percent (10%), across-the-board
base salary rate reduction similarly affecting at least
ninety-five percent (95%) of all Executive Employees of the
Company); or (b) the sum of Executive's Base Salary plus
target bonus under the Company's short term bonus plan, as in
effect immediately prior to the Change in Control (except for
a less than ten percent (10%), across-the-board reduction of
base salary plus target bonus under such short term plan
similarly affecting at least ninety-five percent (95%) of all
Executive Employees of the Company);
(iii) Pension and Compensation Plans. The failure by
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the Company to continue in effect any "pension plan or
agreement" or "compensation plan or agreement" in which
Executive participates or is a party as of the date of the
Change in Control or the elimination of Executive's
participation therein (except for across-the-board plan
changes or terminations similarly affecting at least
ninety-five percent (95%) of all Executive Employees of the
Company). For purposes of this subsection (iii), a "pension
plan or agreement" shall mean any written arrangement executed
by an authorized officer of the Company which provides for
payments upon retirement; and a "compensation plan or
agreement" shall mean any written arrangement executed by an
authorized officer of the Company which provides for periodic,
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non-discretionary compensatory payments to employees in the
nature of bonuses;
(iv) Relocation. A change in Executive's work
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location to a location more than fifty (50) miles from the
facility where Executive was located immediately prior to the
Change in Control, unless such new work location is within
fifty (50) miles from Executive's principal place of residence
at the time of the Change in Control. The acceptance, if any,
by Executive of employment by the Company at a work location
which is outside the fifty (50) mile radius set forth in this
Section 1(j)(iv) shall not be a waiver of Executive's right to
refuse subsequent transfer by the Company to a location that
is more than fifty (50) miles from Executive's principal place
of residence at the time of the Change in Control, and such
subsequent, unconsented transfer shall be "Good Reason" under
this Agreement; or
(v) Benefits and Perquisites. The taking of any
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action by the Company that would directly or indirectly
materially reduce the benefits enjoyed by Executive under the
Company's retirement, life insurance, medical, health and
accident, disability, deferred compensation or savings plans
in which Executive was participating immediately prior to the
Change in Control, or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive is entitled on the basis of years of service with
the Company in accordance with the Company's normal vacation
policy in effect immediately prior to the Change in Control
(except for across-the-board plan or vacation policy changes
or plan terminations similarly affecting at least ninety-five
percent (95%) of all employees of the Company).
For purposes of this Section 1(j), the term "Executive
Employee" shall mean employees of the Company whose annual base salary
is $140,000 or more.
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good
Reason hereunder. The fact that Executive may be eligible for
Retirement shall not prevent him from resigning for Good Reason
provided an event of Good Reason shall have occurred. Any dispute as to
whether an event of Good Reason shall have occurred or been cured on a
timely basis shall be resolved by arbitration as provided in Section 6
hereof.
(k) "Group Health Plan" shall mean the group health plan
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covering Executive, as such plan may be amended from time to time.
(l) "Group Life Insurance Plan" shall mean the group life
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insurance program covering Executive, as such plan may be amended from
time to time.
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(m) "Mirant" shall mean Mirant Corporation, a Delaware
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corporation, its successors and assigns.
(n) "Mirant Subsidiary" shall mean any corporation or other
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entity Controlled by Mirant. The term "Controlled" shall have the
meaning of such term as set forth in the Change in Control Benefit Plan
Determination Policy.
(o) "Month of Service" shall mean any calendar month during
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which Executive has worked at least one (1) hour or was on approved
leave of absence while in the employ of the Company or any other Mirant
Subsidiary.
(p) "Pension Plan" shall mean the Mirant Services LLC Pension
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Plan, or any successor thereto, as such plan may be amended from time
to time.
(q) "Termination for Cause" or "Cause" shall mean the
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termination of Executive's employment by the Company uponthe occurrence
of any of the following:
(i) The willful and continued failure by Executive
substantially to perform his duties with the Company (other
than any such failure resulting from Executive's Total
Disability or from Executive's retirement or any such actual
or anticipated failure resulting from termination by Executive
for Good Reason) after a written demand for substantial
performance is delivered to him by the Board, which demand
specifically identifies the manner in which the Board believes
that he has not substantially performed his duties; or
(ii) The willful engaging by Executive in conduct
that is demonstrably and materially injurious to Mirant or the
Company, monetarily or otherwise, including, but not limited
to any of the following:
(A) any willful act involving fraud or
dishonesty in the course of Executive's employment by
the Company;
(B) the willful carrying out of any activity
or the making of any statement which would materially
prejudice or impair the good name and standing of the
Company, Mirant, or any Mirant Subsidiary or would
bring the Company, Mirant, or any Mirant Subsidiary
into contempt or ridicule, or would reasonably shock
or offend any community in which the Company, Mirant
or such Mirant Subsidiary is located;
(C) attendance at work in a state of
intoxication or otherwise being found in possession
at his workplace of any prohibited drug or substance,
possession of which would amount to a criminal
offense;
(D) assault or other act of violence against
any person during the course of employment; or
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(E) conviction of any felony or any
misdemeanor involving moral turpitude.
No act or failure to act by Executive shall be deemed
"willful" unless done, or omitted to be done, by Executive not in good
faith and without reasonable belief that his action or omission was in
the best interest of the Company.
Notwithstanding the foregoing, Executive shall not be deemed
to have been terminated for Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than three quarters of the entire
membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to Executive and an opportunity
for him, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in clause (i) or (ii) of this Section 1(q) and
specifying the particulars thereof in detail.
(r) "Termination Date" shall mean the date on which
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Executive's employment with the Company is terminated.
(s) "Total Disability" shall mean Executive's total
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disability within the meaning of the Pension Plan.
(t) "Waiver and Release" shall mean the Waiver and Release
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Agreement attached hereto as Exhibit A.
(u) "Year of Service" shall mean Executive's Months of Service
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divided by twelve (12) rounded to the nearest whole year, rounding up
if the remaining number of months is seven (7) or greater and rounding
down if the remaining number of months is less than seven (7). If
Executive has a break in his service with the Company, he will receive
credit under this Agreement for service prior to the break in service
only if the break in service is less than five (5) years.
2. Severance Benefits.
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(a) Eligibility. Except as otherwise provided in this Section
2(a), if Executive's employment is involuntarily terminated by the
Company at any time during the two-year period following a Change in
Control for reasons other than Cause, or if Executive voluntarily
terminates his employment with the Company for Good Reason at any time
during the two-year period following a Change in Control, Executive
shall be entitled to receive the benefits described in this Agreement
upon the Company's receipt of an effective Waiver and Release.
Notwithstanding anything to the contrary herein, Executive shall not be
eligible to receive benefits under this Agreement if Executive:
(i) voluntarily terminates his employment with the
Company other than for Good Reason;
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(ii) has his employment terminated by the Company
for Cause;
(iii) terminates employment by reason of his death or
Total Disability.
Any termination by the Company for Cause, or by Executive for Good
Reason, shall be communicated by written notice of termination to the other
party hereto given in accordance with Section 7(g) of this Agreement. Such
notice shall (i) indicate the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of Executive's employment under the provision so indicated
and (iii) specify the termination date. The failure by Executive or the
Company to set forth in the notice of termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of Executive or the Company, respectively, hereunder or preclude
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing Executive's or the Company's rights hereunder.
(b) Severance Benefits. If Executive meets the eligibility
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requirements of Section 2(a) hereof, he shall be entitled to a cash
severance benefit in an amount equal to three (3) times his Annual
Compensation (the "Severance Amount").
(c) Welfare Benefits. If Executive meets the eligibility
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requirements of Section 2(a) hereof and is not otherwise eligible to
receive retiree medical and life insurance benefits provided to certain
retirees pursuant to the terms of the Group Health Plan and the Group
Life Insurance Plan, or other plans providing such benefits to
similarly situated employees who retire, he shall be entitled to the
benefits set forth in this Section 2(c).
(i) Executive shall be eligible to participate in the
Company's Group Health Plan for a period of six (6) months for
each of Executive's Years of Service, not to exceed a period
of five (5) years, beginning on the first day of the first
month following Executive's Termination Date unless otherwise
specifically provided under such plan, upon payment of both
the Company's and his monthly premium under such plan. If
Executive elects to receive this extended medical coverage, he
shall also be entitled to elect coverage under the Group
Health Plan for his dependents who were participating in the
Group Health Plan on Executive's Termination Date (and for
such other dependents as may be entitled to coverage under the
provisions of the Health Insurance Portability and
Accountability Act of 1996) for the duration of Executive's
extended medical coverage under this Section 2(c)(i) to the
extent such dependents remain eligible for dependent coverage
under the terms of the Group Health Plan.
(A) The extended medical coverage afforded
to Executive pursuant to Section 2(c)(i), as well as
the premiums to be paid by Executive in connection
with such coverage shall be determined in accordance
with the terms of the Group Health Plan and shall be
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subject to any changes in the terms and conditions of
the Group Health Plan as well as any future increases
in premiums under the Group Health Plan. The premiums
to be paid by Executive in connection with this
extended coverage shall be due on the first day of
each month; provided, however, that if he fails to
pay his premium within thirty (30) days of its due
date, such extended coverage shall be terminated.
(B) Any Group Health Plan coverage provided
under Section 2(c)(i) shall be in lieu of and not in
addition to any COBRA Coverage which Executive or his
dependent may elect. Executive or his dependents must
waive COBRA coverage under the Group Health Plan as a
condition precedent to receiving extended medical
coverage pursuant to this Section 2(c). In the event
that Executive or his dependents become eligible to
be covered, by virtue of re-employment or otherwise,
by any employer-sponsored group health plan or is
eligible for coverage under any government-sponsored
health plan during the above period, coverage under
the Company's Group Health Plan available to
Executive or his dependents by virtue of the
provisions of Section 2(c)(i) shall terminate, except
as may otherwise be required by law, and shall not be
renewed.
(ii) Regardless of whether Executive elects the
extended coverage described in Section 2(c)(i) hereof, he
shall be entitled to receive cash in an amount equal to the
Company's and Executive's cost of premiums for three (3) years
of coverage under the Group Health Plan and Group Life
Insurance Plan in accordance with the terms of such plans as
of the date of the Change in Control.
(d) Incentive Plans. If Executive meets the eligibility
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requirements of Section 2(a) hereof, he shall be entitled to the
benefits under the Company's incentive plans as provided under the
Change in Control Benefit Plan Determination Policy for "Severed
Employees," in addition to any other benefits to which he would
otherwise be entitled under such Policy.
(e) Payment of Benefits. The amounts due under Section 2(b)
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and 2(c)(ii) of this Agreement shall be paid in one (1) lump sum
payment as soon as administratively practicable following the later of:
(i) Executive's Termination Date, or (ii) upon Executive's tender of an
effective Waiver and Release to the Company and the expiration of any
applicable revocation period for such waiver. In the event of a dispute
with respect to liability or amount of any benefit due hereunder, an
effective Waiver and Release shall be tendered at the time of final
resolution of any such dispute when payment is tendered by the Company.
If the Company fails or refuses to make payments under the Agreement,
Executive may have the right to obtain payment by Mirant pursuant to
the terms of the "Guarantee Agreement Concerning Mirant Services LLC
Compensation and Benefit Arrangements" entered into by the Company and
Mirant. Executive's right to payment is not increased as a result of
this Guarantee. He has the same right to payment from Mirant as he
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would have from the Company. Any demand to enforce this Guarantee
should be made in writing and should reasonably and briefly specify the
manner and the amount the Company has failed to pay. Such writing given
by personal delivery or mail shall be effective upon actual receipt.
Any writing given by telegram or telecopier shall be effective upon
actual receipt if received during Mirant's normal business hours, or at
the beginning of the next business day after receipt, if not received
during Mirant's normal business hours. All arrivals by telegram or
telecopier shall be confirmed promptly after transmission in writing by
certified mail or personal delivery.
(f) Benefits in the Event of Death. In the event of
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Executive's death prior to the payment of all amounts due under this
Agreement, Executive's estate shall be entitled to receive as due any
amounts not yet paid under this Agreement upon the tender by the
executor or administrator of the estate of an effective Waiver and
Release.
(g) Executive Outplacement Services. Executive shall be
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eligible to participate in the Executive Outplacement Program, which
program shall not be less than six (6) months duration measured from
Executive's Termination Date.
3. Possible Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that
any payment or distribution in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) by the Company to or for the
benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under
this Section 3) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Company shall
pay to Executive an additional payment (a "Gross-Up Payment") in an
amount such that, after payment by Executive of all taxes (including
any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 3(a),
if the Parachute Value (as defined below) of all Payments does not
exceed 110% of Executive's Safe Harbor Amount (as defined below), then
the Company shall not pay Executive a Gross-Up Payment, and the
Payments due under this Agreement shall be reduced so that the
Parachute Value of all Payments, in the aggregate, equals the Safe
Harbor Amount; provided, that if even after all Payments due under this
Agreement are reduced to zero, the Parachute Value of all Payments
would still exceed the Safe Harbor Amount, then no reduction of any
Payments shall be made and the Gross -Up Payment shall be made. The
reduction of the Payments due hereunder, if applicable, shall be made
by first reducing the Severance Payments under Section 2(b), unless an
alternative method of reduction is elected by Executive, and in any
event shall be made in such a manner as to maximize the economic
present value of all Payments actually made to Executive, determined by
the accounting firm serving as the Company's auditors immediately prior
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to the change of control (the "Accounting Firm") as of the date of the
change of control for purposes of Section 280G of the Code using the
discount rate required by Section 280G(d)(4) of the Code. For purposes
of this Section 3, the "Parachute Value" of a Payment means the present
value as of the date of the change of control for purposes of Section
280G of the Code of the portion of such Payment that constitutes a
"parachute payment" under Section 280G(b)(2) of the Code, as determined
by the Accounting Firm for purposes of determining whether and to what
extent the Excise Tax will apply to such Payment. For purposes of this
Section 3, Executive's "Safe Harbor Amount" means one dollar less than
three times Executive's "base amount" within the meaning of Section
280G(b)(3) of the Code.
(b) Subject to the provisions of Section 3(c), all
determinations required to be made under this Section 3, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment, whether and in what manner any Payments are to be
reduced pursuant to the second paragraph of Section 3(a), and the
assumptions to be used in arriving at such determinations, shall be
made by the Accounting Firm, and shall be binding on the Company and
Executive, except to the extent the Internal Revenue Service or a court
of competent jurisdiction makes a final and binding determination
inconsistent therewith. The Accounting Firm shall provide detailed
supporting calculations both to the Company and Executive within 15
business days after receiving notice from Executive that there has been
a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change in Control,
Executive shall appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment that becomes due pursuant to this Section
3 shall be paid by the Company to Executive within the later of (i)
five business days prior to the due date for the payment of the Excise
Tax or (ii) five days after the receipt of the Accounting Firm's
determination. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Accounting Firm determines that there
has been an Underpayment or the Company exhausts its remedies pursuant
to Section 3(c) and Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment (or an additional Gross-Up
Payment). Such notification shall be given as soon as practicable but
no later than ten business days after Executive is informed in writing
of such claim. Executive shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid.
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Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income
tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses.
Without limitation of the foregoing provisions of this Section 3(c),
the Company shall control all proceedings taken in connection with such
contest and, in its sole discretion, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, in its sole
discretion, either direct Executive to pay the tax claimed and ▇▇▇ for
a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs Executive to pay such claim and
▇▇▇ for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
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(d) If, at any time after receiving a Gross-Up Payment or an
advance pursuant to Section 3(c), Executive receives any refund of the
associated Excise Tax, Executive shall (subject to the Company's having
complied with the requirements of Section 3(c), if applicable) promptly
pay to the Company the amount of such refund (together with any
interest paid or credited thereon net of all taxes applicable thereto).
If, after Executive receives an advance by the Company pursuant to
Section 3(c), a determination is made that Executive is not entitled to
any refund with respect to such claim and the Company does not notify
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid, and
the amount of any Gross-Up Payment owed to Executive shall be reduced
(but not below zero) by the amount of such advance.
(e) Notwithstanding any other provision of this Section 3, the
Company may, in its sole discretion, withhold and pay over to the
Internal Revenue Service or any other applicable taxing authority, for
the benefit of Executive, all or any portion of any Gross-Up Payment,
and Executive hereby consents to such withholding.
4. Transfer of Employment. In the event that Executive's employment by
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the Company is terminated during the two-year period following a Change in
Control and Executive accepts employment by Mirant, a Mirant Subsidiary, or any
employer that succeeds to all or substantially all of the assets of Mirant or
any Mirant Subsidiary, the Company shall assign this Agreement to Mirant, such
Mirant Subsidiary, or successor employer, Mirant shall accept such assignment or
cause such Mirant Subsidiary or successor employer to accept such assignment,
and such assignee shall become the "Company" for all purposes hereunder.
5. No Mitigation. If Executive is otherwise eligible to receive
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benefits under Section 2 of this Agreement, he shall have no duty or obligation
to seek other employment following his Termination Date and, except as otherwise
provided in Section 2(c)(i)(B) hereof, the amounts due Executive hereunder shall
not be reduced or suspended if Executive accepts such subsequent employment.
6. Arbitration.
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(a) Any dispute, controversy or claim arising out of or
relating to the Company's obligations to pay severance benefits under
this Agreement, or the breach thereof, shall be settled and resolved
solely by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA") except as
otherwise provided herein. The arbitration shall be the sole and
exclusive forum for resolution of any such claim for severance benefits
and the arbitrators' award shall be final and binding. Any such claim
for arbitration must be brought within one (1) year after Executive's
Termination Date. The provisions of this Section 6 are not intended to
apply to any other disputes, claims or controversies arising out of or
relating to Executive's employment by the Company or the termination
thereof.
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(b) Arbitration shall be initiated by serving a written notice
of demand for arbitration to Executive, in the case of the Company, or
to the Board, in the case of Executive.
(c) The arbitration shall be held in Atlanta, Georgia. The
arbitrators shall apply the law of the State of Georgia, to the extent
not preempted by federal law, excluding any law which would require the
application of the law of another state.
(d) The parties shall appoint arbitrators within fifteen (15)
business days following service of the demand for arbitration. The
number of arbitrators shall be three. One arbitrator shall be appointed
by Executive, one arbitrator shall be appointed by the Company, and the
two arbitrators shall appoint a third. If the arbitrators cannot agree
on a third arbitrator within thirty (30) business days after the
service of demand for arbitration, the third arbitrator shall be
selected by the AAA.
(e) The arbitration filing fee shall be paid by Executive. All
other costs of arbitration shall be borne equally by Executive and the
Company, provided, however, that the Company shall reimburse Executive
for such fees and costs, plus reasonable legal fees actually incurred
by Executive, in the event any material issue in such dispute is
finally resolved in Executive's favor.
(f) The parties agree that they will faithfully observe the
rules that govern any arbitration between them, they will abide by and
perform any award rendered by the arbitrators in any such arbitration,
including any award of injunctive relief, and a judgment of a court
having jurisdiction may be entered upon an award.
(g) The parties agree that nothing in this Section 6 is
intended to preclude any court having jurisdiction from issuing and
enforcing in any lawful manner such temporary restraining orders,
preliminary injunctions, and other interim measures of relief as may be
necessary to prevent harm to a party's interests or as otherwise may be
appropriate pending the conclusion of arbitration proceedings pursuant
to this Agreement regardless of whether an arbitration proceeding under
this Section 6 has begun. The parties further agree that nothing herein
shall prevent any court from entering and enforcing in any lawful
manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interests or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement.
7. Miscellaneous.
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(a) Funding of Benefits. Unless the Board shall in its
---------------------
discretion determine otherwise, the benefits payable to Executive under
this Agreement shall not be funded in any manner and shall be paid by
the Company out of its general assets, which assets are subject to the
claims of the Company's creditors.
(b) Withholding. There shall be deducted from the payment of
-----------
any benefit due under this Agreement the amount of any tax required by
12
any governmental authority to be withheld and paid over by the Company
to such governmental authority for the account of Executive.
(c) Assignment. Executive shall have no rights to sell,
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assign, transfer, encumber, or otherwise convey the right to receive
the payment of any benefit due hereunder, which payment and the rights
thereto are expressly declared to be nonassignable and nontransferable.
Any attempt to do so shall be null and void and of no effect.
(d) Amendment and Termination. The Agreement may be amended
--------------------------
or terminated only by a writing executed by the parties.
(e) Construction. This Agreement shall be construed in
------------
accordance with and governed by the laws of the State of Georgia, to
the extent not preempted by federal law, disregarding any provision of
law which would require the application of the law of another state.
(f) Pooling Accounting. Notwithstanding anything to the
-------------------
contrary herein, if, but for any provision of this Agreement, a Change
in Control transaction would otherwise be accounted for as a
pooling-of-interests under ▇▇▇ ▇▇.▇▇ ("Pooling Accounting") (after
giving effect to any and all other facts and circumstances affecting
whether such Change in Control transaction would use Pooling
Accounting,), such provision or provisions of this Agreement which
would otherwise cause the Change in Control transaction to be
ineligible for Pooling Accounting shall be void and ineffective in such
a manner and to the extent that by eliminating such provision or
provisions of this Agreement, Pooling Accounting would be available for
such Change in Control transaction.
(g) Notices. All notices, requests, demands and other
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communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered or three days
after mailing if mailed, first class, certified mail, postage prepaid:
To the Company: Mirant Services LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
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To Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------
----------------
----------------
Any party may change the address to which notices, requests, demands
and other communications shall be delivered or mailed by giving notice
thereof to the other party in the same manner provided herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 2nd day of April, 2001.
MIRANT CORPORATION
By: ____________________________________
MIRANT SERVICES LLC
By: ____________________________________
EXECUTIVE
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
14
Exhibit A
CHANGE IN CONTROL AGREEMENT
Waiver and Release
The attached Waiver and Release Agreement is to be executed by
Executive upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Section 2(a) of such agreement.
WAIVER AND RELEASE AGREEMENT
This Waiver and Release Agreement (the "Waiver and Release") is entered
into by and among Mirant Corporation ("Mirant"), Mirant Services, LLC (the
"Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Executive") this ________ day of ________,
20__.
1. General Waiver and Release: For and in consideration of the
-----------------------------
agreement of Mirant and the Company to provide Executive the severance benefits
described in that certain Change in Control Agreement, dated as of April 2,
2001, among Executive, Mirant and the Company (the "Agreement"), Executive, with
the intention of binding himself and all of his heirs, executors, administrators
and assigns, does hereby release, remise, acquit and forever discharge Mirant
and the Company, and all of their respective past and present officers,
directors, stockholders, employees, agents, parent corporations, predecessors,
subsidiaries, affiliates, estates, successors, assigns and attorneys
(hereinafter collectively referred to as "Released Parties") from any and all
claims, charges, actions, causes of action, sums of money due, suits, debts,
covenants, contracts, agreements, rights, damages, promises, demands or
liabilities (hereinafter collectively referred to as "Claims") whatsoever, in
law or in equity, whether known or unknown, suspected or unsuspected, which
Executive, individually or as a member of any class, now has, owns or holds or
has at any time heretofore ever had, owned or held against the Released Parties
including, but not by way of limitation, Claims arising out of or in any way
connected with Executive's employment with the Company or any of the Released
Parties or the termination of any such employment relationship, including, but
not by way of limitation, Claims pursuant to federal, state or local statute,
regulation, ordinance or common-law for (i) employment discrimination; (ii)
wrongful discharge; (iii) breach of contract; (iv) tort actions of any type,
including those for intentional or negligent infliction of emotional harm; and
(v) unpaid benefits, wages, compensation, commissions, bonuses or incentive
payments of any type, except as follows:
A. those obligations of the Company and its affiliates under
the Agreement, pursuant to which this Waiver and Release is being executed and
delivered; and
B. claims, if any, for Executive's accrued or vested benefits
under the retirement plans, savings plans, investment plans and employee welfare
benefit plans, if any, of the Released Parties (within the meaning of Section
3(1) of the Employee Retirement Income Security Act of 1974 ("ERISA")), as
amended; provided, however, that nothing herein is intended to or shall be
construed to require the Released Parties to institute or continue in effect any
particular plan or benefit sponsored by the Released Parties and the Company and
all other Released Parties hereby reserve the right to amend or terminate any
such plan or benefit at any time; and
C. any rights to indemnification or advancement of expenses to
which Executive may otherwise be entitled pursuant to the Articles of
16
Incorporation or Bylaws of any of the Released Parties, or by contract or
applicable law, as a result of Executive's service as an officer or director of
any of the Released Parties.
Executive further understands and agrees that he has knowingly
relinquished, waived and forever released any and all remedies arising out of
the aforesaid employment relationship or the termination thereof, including,
without limitation, claims for backpay, front pay, liquidated damages,
compensatory damages, general damages, special damages, punitive damages,
exemplary damages, costs, expenses and attorneys' fees.
2. Waiver and Release of ADEA Claims: Without limiting the generality
---------------------------------
of the foregoing, and also for and in consideration of the Company's agreement
to provide Executive Severance Benefits described in Article 3 of the Agreement,
Executive specifically acknowledges and agrees that he does hereby knowingly and
voluntarily release Mirant, the Company and all other Released Parties from any
and all claims arising under the Age Discrimination in Employment Act, 29 U.S.C.
ss. 621, et seq. ("ADEA"), which Executive ever had or now has from the
beginning of time up to the date this Waiver and Release is executed, including,
but not by way of limitation, those ADEA Claims which are in any way connected
with any employment relationship or the termination of any employment
relationship which existed between the Company or any other Released Parties and
Executive. Executive also acknowledges that he has been provided with a notice,
as required by the Older Workers Benefit Protection Act of 1990, that contains
(i) information about the individuals covered under the Agreement, (ii) the
eligibility factors for participation in the Agreement, (iii) the time limits
applicable to the Agreement, (iv) the job titles and ages of the employees
designated to participate in the Agreement, (v) and the ages of the employees in
the same job classification who have not been designated to participate in the
Agreement. (See Attachment 1). Executive further acknowledges and agrees that he
has been advised to consult with an attorney prior to executing this Waiver and
Release and that he has been given forty-five (45) days to consider this Waiver
and Release prior to its execution. Executive agrees that in the event that he
executes this Waiver and Release prior to the expiration of the forty-five (45)
day period, he shall waive the balance of said period. Executive also
understands that he may revoke this Waiver and Release of ADEA Claims at any
time within seven (7) days following its execution and that, if Executive
revokes this Waiver and Release of ADEA Claims within such seven (7) day period,
it shall not be effective or enforceable and he will not receive the
above-described consideration or any payments provided for in the Agreement that
have not been paid.
3. Covenant Not to ▇▇▇: Executive acknowledges and agrees that this
-------------------
Waiver and Release may not be revoked at any time after the expiration of the
seven (7) day revocation period and that he will not institute any suit, action,
or proceeding, whether at law or equity, challenging the enforceability of this
Waiver and Release. Should Executive ever attempt to challenge the terms of this
Waiver and Release, attempt to obtain an order declaring this Waiver and Release
to be null and void, or institute litigation against any of the Released Parties
based upon a Claim other than an ADEA Claim which is covered by the terms of
this Waiver and Release, Executive will as a condition precedent to such action
17
repay all monies paid to him under the terms of this Waiver and Release.
Furthermore, if Executive does not prevail in an action to challenge this Waiver
and Release, to obtain an order declaring this Waiver and Release to be null and
void, or in any action against any of the Released Parties based upon a Claim
other than an ADEA Claim which is covered by the Waiver and Release set forth
herein, Executive shall pay to the Company and/or the appropriate Released
Parties all their costs and attorneys' fees incurred in their defense of
Executive's action.
Provided, however, that it is understood and agreed by the parties that
Executive shall not be required to repay the monies paid to him under the terms
of this Waiver and Release or pay the Company and/or the appropriate Released
Parties all their costs and attorneys' fees incurred in their defense of
Executive's action (except those attorneys' fees or costs specifically
authorized under federal law) in the event that Executive seeks to challenge his
Waiver and Release of Claims under the ADEA.
4. Denial of Liability: Executive acknowledges and agrees that neither
-------------------
the payment of Severance Benefits under the Agreement nor this Waiver and
Release is to be construed in any way as an admission of any liability
whatsoever by Mirant, the Company or any of the other Released Parties, by whom
liability is expressly denied.
5. Agreement Not to Seek Further Relief: Executive acknowledges and
-------------------------------------
agrees that he has not, with respect to any transaction or state of facts
existing prior to the date of execution of this Waiver and Release, filed any
complaints, charges or lawsuits against any of the Released Parties with any
governmental agency or any court or tribunal, and that he will not do so at any
time hereafter. Executive further acknowledges and agrees that he hereby waives
any right to accept any relief or recovery, including costs and attorneys' fees,
that may arise from any charge or complaint before any federal, state or local
court or administrative agency against the Released Parties.
6. Company Property: Executive agrees that he will not retain or
-----------------
destroy, and will immediately return to the Company, any and all property of the
Company in his possession or subject to his control, including, but not limited
to, keys, credit and identification cards, personal items or equipment provided
for his use, customer files and information, all other files and documents
relating to the Company and its business, together with all written or recorded
materials, documents, computer disks, plans, records or notes or other papers
belonging to the Company. Executive further agrees not to make, distribute or
retain copies of any such information or property.
7. Confidentiality Agreement: Executive acknowledges that the terms of
--------------------------
this Waiver and Release must be kept confidential. Accordingly, Executive agrees
not to disclose or publish to any person or entity, except as required by law or
as necessary to prepare tax returns, the terms and conditions or sums being paid
in connection with this Waiver and Release.
8. Acknowledgment: Executive acknowledges that he has carefully read
--------------
and fully understands the terms of this Waiver and Release and the Agreement and
that this Waiver and Release is executed by Executive voluntarily and is not
based upon any representations or statements of any kind made by Mirant, the
18
Company or any or the other Released Parties as to the merits, legal liabilities
or value of his claims. Executive further acknowledges that he has had a full
and reasonable opportunity to consider this Waiver Release and that he has not
been pressured or in any way coerced into executing this Waiver and Release.
9. Choice of Laws: This Waiver and Release and the rights and
----------------
obligations of the parties hereto shall be governed and construed in accordance
with the laws of the State of Georgia.
10. Severability: With the exception of the waiver and releases
------------
contained in Sections 1 and 2 above, if any provision of this Waiver and Release
is unenforceable or is held to be unenforceable, such provision shall be fully
severable, and this Waiver and Release and its terms shall be construed and
enforced as if such unenforceable provision had never comprised a part hereof,
the remaining provisions hereof shall remain in full force and effect, and the
court construing the provisions shall add as a part hereof a provision as
similar in terms and effect to such unenforceable provision as may be
enforceable, in lieu of the unenforceable provision. In the event that both of
the releases contained in Sections 1 and 2 above are unenforceable or are held
to be unenforceable, the parties understand and agree that the remaining
provisions of this Waiver and Release shall be rendered null and void and that
neither party shall have any further obligation under any provision of this
Waiver and Release.
11. Entire Agreement: This document contains all terms of the Waiver
-----------------
and Release and supersedes and invalidates anyprevious agreements or contracts
regarding the same subject matter. No representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein shall be of any
force or effect.
IN WITNESS WHEREOF, the undersigned acknowledges that he has read this
Waiver and Release Agreement and sets his hand and seal this ____ day of
____________, 20__.
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Sworn to and subscribed before me this _____ day of ______________, 20__.
---------------------
Notary Public
My Commission Expires:
---------------------
19
MIRANT CORPORATION
By: ________________________
MIRANT SERVICES LLC
By: ________________________
20
