EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("AGREEMENT") is made and entered into as of this
14 day of APRIL 2004 by and between Mirant Corporation (hereinafter "MIRANT"),
and M. Xxxxxxx Xxxxx (hereinafter "EXECUTIVE").
W I T N E S S E T H:
WHEREAS, Mirant desires to secure the services of Executive as an executive of
Mirant; and
WHEREAS, Executive desires to be employed by Mirant in this capacity; and
WHEREAS, Mirant and Executive wish to enter into this Employment Agreement
setting forth the terms and conditions of such employment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereby agree as follows:
1. EMPLOYMENT DUTIES.
(a) Mirant hereby agrees to employ Executive (i) as its Executive
Vice President and (ii) effective upon the effective date of the
resignation of Mirant's current Chief Financial Officer, as Mirant's Chief
Financial Officer, and Executive hereby agrees to accept such employment
upon the terms and conditions set forth in this Agreement. Executive will
have such additional titles as determined by Mirant's Board of Directors
(the "BOARD") and the powers, duties, and responsibilities from time to
time assigned to her by the Board or Mirant's Chief Executive Officer, and
Executive will report directly to the Chief Executive Officer of Mirant.
(b) During the Term (as defined in Section 2), Executive agrees to
be a full-time employee of Mirant and devote her full and exclusive
business time, energy and skill to the business and affairs of Mirant. She
shall perform all of her duties properly and faithfully in the best
interest of Mirant and will not intentionally become involved in any
personal matters which adversely affect or reflect on Mirant. Executive may
(i) engage in community, charitable, and educational activities, (ii)
manage personal investments, (iii) serve on those corporate boards or
committees that she disclosed in writing to Mirant as of the Effective
Date, provided that such activities do not materially conflict or interfere
with the performance of Executive's obligations under this Agreement, and
(iv) serve on those additional corporate boards or committees as the Board
in its sole discretion shall approve.
2. TERM. The term of this Agreement will commence on such date,
following the date an order of the United States Bankruptcy Court for the
Northern District of Texas (Fort Worth Division (the "BANKRUPTCY COURT"))
approving this Agreement becomes final and nonappealable, as may be agreed to by
the parties, but in no event later than May 3, 2004 (the
"EFFECTIVE DATE"), and shall continue for a period of three (3) years after the
Effective Date; PROVIDED that the term of employment hereunder shall be
automatically extended for two successive one-year renewal periods commencing on
the third and fourth anniversaries of the Effective Date, respectively, unless
either party shall have given notice to the other party that such party does not
desire to extend the term of this Agreement, such notice to be given at least
ninety (90) days prior to the third anniversary or fourth anniversary of the
Effective Date, respectively, in which case the term of employment hereunder
shall terminate as of the third anniversary of the Effective Date or the fourth
anniversary of the Effective Date, respectively (the term of employment
hereunder, including any such extensions in accordance with this Section 2,
shall be referred to herein as the "TERM"). Notwithstanding the foregoing, the
Term may be earlier terminated by either party hereto in accordance with the
provisions of Section 5 of this Agreement. At the end of the Term, if it has not
been terminated earlier pursuant to Section 5, Executive will become an at-will
employee of Mirant.
3. COMPENSATION.
(a) SALARY. As of the commencement of this Agreement, during the
Term, Mirant shall pay Executive a salary of $600,000 per year ("ANNUAL
BASE SALARY"), paid in equal installments every two weeks. Mirant shall
evaluate the compensation provided to Executive on an annual basis and
shall make such adjustments as Mirant deems appropriate, with the
understanding that Executive's Annual Base Salary will not be reduced
during the Term without her consent.
(b) ANNUAL CASH BONUS. Mirant shall pay Executive a cash bonus with
respect to her first calendar year of employment (without any proration
whatsoever) of at least 75% of her Annual Base Salary (the "2004 TARGET
BONUS"), payable in accordance with Mirant's normal practices, provided
that Executive shall be eligible to receive a cash bonus for such year of
up to two times the 2004 Target Bonus. Thereafter, with respect to
subsequent calendar years of the Term, the terms of her cash bonus will be
tied to the same goals as those of other senior Mirant executives;
provided, however, that (i) the target for such cash bonus (the "TARGET
BONUS") shall be no less than 75% of Executive's then-current Annual Base
Salary, and (ii) the amount of such cash bonus for which Executive is
eligible shall be from zero to 2 times the Executive's Target Bonus. Such
cash bonuses shall be determined and paid at such times and under such
terms and conditions as cash bonuses are determined and paid to other
senior Mirant executives.
(c) EMERGENCE BONUS. Within five (5) business days after Mirant's
emergence from bankruptcy (or the first paydate thereafter, pursuant to
Mirant's payroll policy, if later), Mirant shall pay an emergence bonus
("EMERGENCE BONUS") to Executive in a cash lump sum equal to not less than
200% of Executive's then-current Annual Base Salary, provided that
Executive has been continuously employed by Mirant through the date of such
emergence. For purposes of this Agreement, "emergence" shall occur when a
plan of reorganization that is confirmed by the Bankruptcy Court becomes
effective, as a result of which the business of Mirant is maintained on an
ongoing basis, whether maintained by Mirant, the reorganized debtor or by
an entity that has acquired all or substantially all of Mirant's or the
debtor in possession's assets. Executive shall also be
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eligible to receive an additional cash payment in an amount equal to
Executive's then-current Annual Base Salary subject to the same terms and
conditions as are applicable to Mirant's Chief Executive Officer and
Management Council for receipt of bonuses under Mirant's Key Employee
Retention Program as may be approved by the Bankruptcy Court.
(d) RETENTION BONUS. If Executive has been continuously employed by
Mirant through April 1, 2006, within five (5) business days thereafter,
Mirant will pay Executive a lump sum amount in cash equal to $500,000 (the
"FIRST RETENTION BONUS"). If Executive has been continuously employed by
Mirant through April 1, 2007, within five (5) business days thereafter,
Mirant will pay Executive a lump sum amount in cash equal to $500,000 (the
"SECOND RETENTION BONUS"; the First Retention Bonus together with the
Second Retention Bonus, collectively, the "RETENTION BONUSES")).
(e) MAKE-WHOLE PAYMENTS. Within five (5) business days after the
Effective Date, Mirant will pay Executive a lump sum amount in cash equal
to $1,500,000 (the "FIRST MAKE-WHOLE PAYMENT"). If Executive has been
continuously employed by Mirant through April 1, 2005, within five (5)
business days thereafter, Mirant will pay Executive a lump sum amount in
cash equal to $1,000,000 (the "SECOND MAKE-WHOLE PAYMENT"). If Executive
has been continuously employed by Mirant through April 1, 2006, within five
(5) business days thereafter, Mirant will pay Executive a lump sum amount
in cash equal to $500,000 (the "THIRD MAKE-WHOLE PAYMENT;" the First
Make-Whole Payment, the Second Make-Whole Payment and the Third Make-Whole
Payment, collectively, the "MAKE-WHOLE PAYMENTS")).
(f) EQUITY AWARDS. In addition to the Emergence Bonus in Section
3(c) above, on and after the date of Mirant's emergence from bankruptcy,
Mirant shall grant to Executive long-term incentive compensation awards on
the same, or a not less favorable, basis and with the same, or not less
favorable, terms and conditions (including vesting schedules and
acceleration provisions, if any) generally applicable to grants of such
awards made to other similarly situated senior executives of Mirant. The
Board may approve any additional equity awards for Executive that the Board
determines in its sole discretion.
(g) EXPENSE REIMBURSEMENT. Mirant will reimburse Executive for all
reasonable expenditures incurred by Executive in the course of her
employment or in promoting the interests of Mirant, consistent with
Mirant's requirements that supporting documentation be provided, including,
without limitation, expenditures for (i) transportation, lodging, and meals
during overnight business trips, (ii) business meals and entertainment,
(iii) supplies and business equipment, (iv) long-distance telephone calls
and cell phone usage, and (v) membership dues for business and professional
associations, publications, and any other association of which Executive
becomes a member in connection with the performance of her duties.
(h) COUNTRY CLUB. Mirant will pay on behalf of Executive the
initiation fee (in an amount not to exceed $50,000) for an individual
membership at a country club of her choice, consistent with Mirant's
requirements that supporting documentation be provided.
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(i) PERQUISITE ALLOWANCE. During the Term, for the purpose of
reimbursing Executive for certain perquisites not otherwise provided by
Mirant, Mirant will provide Executive with a perquisite allowance of
$18,000 per year, consistent with Mirant's requirements that supporting
documentation be provided, which for years beginning in 2005, shall be
pro-rated based on the number of days Executive was employed by Mirant
during each calendar year. For 2004, the $18,000 perquisite allowance shall
not be pro-rated.
4. EMPLOYEE BENEFITS.
(a) BENEFIT AND PERQUISITE PROGRAMS. Executive shall be entitled,
during the Term, to participate in all employee benefit and perquisite
programs maintained by Mirant for the benefit of its employees, including
benefits and perquisites available to senior officers of Mirant and/or
Mirant's Management Council, according to the terms of such plans. During
the Term, Mirant shall make available coverage for Executive's domestic
partner and dependent children either through its existing medical and
dental plan, through the purchase of one or more insurance policies, or
through a self-insured medical and dental reimbursement plan. If Mirant
elects to make such coverage available through the purchase of insurance or
through the use of a self-insured reimbursement plan, such insurance or
self-insured reimbursement plan shall provide benefits that are
substantially similar to those of Mirant's highest cost medical and dental
options. The relative rates of the cost of such coverage paid by Executive
and Mirant shall be comparable to the relative rates of the cost paid by
similarly situated employees and Mirant for similar coverage for
dependents. Mirant shall also gross-up any applicable premiums relating to
such coverage for tax purposes so that the economic benefit to Executive is
the same as if such coverage was provided on a non-taxable basis.
(b) VACATION. Executive will be entitled to four (4) weeks' paid
vacation annually. Consistent with Mirant's vacation policy, unused
vacation time not exceeding forty (40) hours will accumulate and carry over
to subsequent years. Any unused vacation at the date of termination of this
Agreement for any reason will be paid to Executive at the time of
termination.
(c) CONTINUED WELFARE BENEFITS. Notwithstanding anything else
contained in this Agreement, after termination or expiration of Executive's
employment for any reason other than Cause (as defined in Section 5(b),
below), Executive and her domestic partner and dependent children (if then
covered) will, for a twenty-four (24) month period from the date of
termination, be entitled to remain on any medical and dental plans on the
same basis as during her employment (including payment by Mirant of the
costs and expenses associated with such programs on the same terms as when
Executive was employed with Mirant). In meeting its obligations under this
provision, Mirant and Executive will take all actions which may be
necessary or appropriate to comply with criteria set forth by Mirant's
insurance carriers and other program providers.
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5. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. In the event of Executive's death or total
disability, this Agreement shall terminate immediately. Executive shall be
deemed totally disabled if she is eligible to receive long-term disability
benefits under Mirant's then existing long-term disability plan. In the
event of her death or total disability, Executive or her estate will be
entitled to such benefits, if any, as are provided under the terms of
various Mirant health insurance, life insurance, pension and disability
plans. In addition, Mirant shall pay to Executive (or her estate) all
Accrued Obligations (as defined below) in a lump sum in cash within thirty
(30) days after the date of termination. "ACCRUED OBLIGATIONS" shall mean,
as of the date of termination, the sum of (A) Executive's Annual Base
Salary through the date of termination to the extent not theretofore paid,
(B) except as otherwise previously requested by Executive, the amount of
any bonus, incentive compensation, deferred compensation and other cash
compensation accrued by Executive as of the date of termination to the
extent not theretofore paid, and (C) any vacation pay, expense
reimbursements and other cash entitlements accrued by Executive as of the
date of termination to the extent not theretofore paid. In addition, the
Executive (or her estate) will be paid the Retention Bonuses and Make-Whole
Payments, in each case to the extent not previously paid to Executive, and
all of Executive's then-outstanding equity awards shall immediately become
fully vested (with stock option exercisability continuing until the later
of one year following the Executive's death or total disability or the end
of any extended exercise period relating to death or disability provided
for under the terms of the applicable equity plan). Except as otherwise set
forth in this Section 5(a) or this Agreement, in the event of a termination
pursuant to this Section 5(a), Executive will not be entitled to any
further benefits or compensation under this Agreement except to the extent
mandated by law.
(b) TERMINATION FOR CAUSE. Mirant may terminate this Agreement and
Executive's employment immediately hereunder for Cause (as hereinafter
defined). In the event this Agreement terminates by reason of the
termination of Executive's Employment by Mirant for Cause, Mirant shall pay
to Executive all Accrued Obligations in a lump sum in cash within thirty
(30) days after the date of termination. "CAUSE" shall mean that: (i)
Executive has been convicted of (or pleads guilty or nolo contendere) to a
felony, other than one involving Limited Vicarious Liability (as
hereinafter defined), (ii) Executive has engaged in conduct that
constitutes gross neglect or gross misconduct with respect to her
employment duties which results in material harm to Mirant, or (iii)
Executive has materially breached this Agreement and failed to cure such
breach (if susceptible to cure) within thirty (30) days after receipt by
Executive of written notice from Mirant of such breach. For purposes of
this Agreement, "LIMITED VICARIOUS LIABILITY" shall mean any liability
which is (1) based on acts of Mirant for which Executive is responsible
solely as a result of her office(s) with Mirant and (2) provided that (A)
she was not involved in such acts and either had no prior knowledge of such
actions or promptly acted reasonably and in good faith to attempt to
prevent the acts causing such liability or (B) she did not have a
reasonable basis to believe that a law was being violated by such acts. The
foregoing notwithstanding, Mirant may not terminate
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Executive's employment for Cause unless: (x) a determination that Cause
exists is made and approved by three-quarters (3/4) of the Board (excluding
Executive, if she is then a member of the Board), (y) Executive is given at
least five (5) days' prior written notice of the Board meeting called to
make such determination, and (z) Executive and her legal counsel are given
the opportunity to address such meeting prior to a vote of the Board.
Except as otherwise set forth in this Section 5(b), in the event of a
termination pursuant to this Section 5(b), Executive will not be entitled
to any further benefits or compensation under this Agreement except to the
extent mandated by law. Termination pursuant to this Section 5(b) shall be
deemed a termination for Cause.
(c) TERMINATION BY MIRANT WITHOUT CAUSE. Mirant shall have the
additional right to terminate this Agreement and Executive's employment
without Cause, and not due to Executive's total disability or death, by
giving Executive written notice of termination. Such termination shall be
effective immediately upon receipt of notice by Executive. In the event of
a termination (x) pursuant to this Section 5(c) or (y) by reason of
delivery by Mirant of a notice that Mirant does not desire to extend the
term of this Agreement beyond the third or fourth anniversary of the
Effective Date as provided in Section 2 above, prior to the fifth
anniversary of the Effective Date, Mirant shall pay to Executive, not later
than thirty (30) days following the date of termination, (i) a lump sum
payment in cash (the "SEPARATION PAYMENT") equal to the product of (A)
times (B), where (A) is the sum of Executive's then-current Annual Base
Salary immediately prior to the date of termination, plus her Target Bonus
for the fiscal year in which the date of termination occurs, or the 2004
Target Bonus, whichever is applicable to the calendar year of termination,
and (B) is 2 (the "SEVERANCE MULTIPLIER"); (ii) the Accrued Obligations;
and (iii) the Retention Bonuses and Make-Whole Payments, in each case to
the extent not previously paid to Executive. In addition, all of
Executive's then-outstanding equity awards shall immediately become fully
vested (with stock option exercisability continuing until the end of the
originally stated term of such options).
(d) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may resign
for Good Reason on thirty (30) days' written notice to Mirant, provided she
previously notified Mirant in writing of the circumstances forming the
basis for "Good Reason" as set forth below and Mirant failed to cure such
circumstances within thirty (30) days of receiving such notice. In the
event of a termination pursuant to this Section 5(d) prior to the fifth
anniversary of the Effective Date, Executive will be entitled to all of the
severance compensation and benefits set forth in Section 5(c) above,
subject to the terms set forth in Section 5(c) above. For purposes of this
Agreement, "GOOD REASON" shall mean, without Executive's written consent:
(i) Assignment to Executive of any duties inconsistent in
any material respect with Executive's position (including titles and
reporting relationships), authority, duties or responsibilities as
contemplated by this Agreement, or any other action by Mirant which
results in a significant diminution in such position, authority,
duties or responsibilities; provided, however, that (A) the
consummation of a chapter 11 plan or plans for Mirant Americas
Generation LLC and its direct and indirect subsidiaries (collectively,
"MAG"); (B) the sale of
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substantially all of the assets or stock of MAG; (C) any other
separation of the assets and business of MAG from the management and
control of Mirant; or (D) the appointment of a trustee pursuant to
Chapter 11 of the Bankruptcy Code for Mirant or MAG shall not
constitute Good Reason within the meaning of this Section 5(d)(i);
(ii) Any failure by Mirant to comply with any of the
provisions of this Agreement regarding Executive's Annual Base Salary,
bonus, equity incentive, benefits and perquisites, and other benefits
and amounts payable to Executive under this Agreement;
(iii) Executive being required to relocate to a principal
place of employment more than fifty (50) miles from her principal
place of employment with Mirant in Atlanta, Georgia, as of the
Effective Date; or
(iv) Any purported termination by Mirant of Executive's
employment otherwise than as expressly permitted by this Agreement.
(e) TERMINATION BY EXECUTIVE FOR OTHER THAN GOOD REASON. Executive
may resign for other than Good Reason on sixty (60) days' written notice to
Mirant. During such sixty (60) day notice period, Mirant may relieve
Executive of her duties, but this shall not relieve Mirant of its
obligations to pay Executive her entire Annual Base Salary for the entire
notice period. At the conclusion of such notice period, she will not be
entitled to any further compensation or benefits hereunder, other than the
Accrued Obligations, previously accrued, vested benefits or as otherwise
provided for in this Agreement.
(f) TERMINATION IN CONNECTION WITH CHANGE IN CONTROL. In the event
that a Change in Control occurs during the Term and Executive's employment
thereafter terminates within one (1) year of such Change in Control by
reason of the discharge of Executive by Mirant other than for Cause, and
not due to death, total disability or expiration of the Term, or by reason
of the resignation of Executive for Good Reason, or in the event
Executive's employment is terminated by Mirant (other than for Cause, and
not due to death, total disability or expiration of the Term) prior to a
Change in Control but at the request of any third party participating in or
causing the Change in Control, Executive will be entitled to all of the
severance compensation and benefits set forth in Section 5(c) above;
provided, however, that if the Change in Control occurs by reason of the
occurrence of the circumstances described in clause (iv) of this Section
5(f) before Mirant and its subsidiaries emerge from bankruptcy, Executive
shall receive the Emergence Bonus in lieu of the Separation Payment;
provided further, however, that Executive shall receive all change in
control benefits provided to Mirant's Chief Executive Officer under the
Chief Executive Officer's individual employment agreement with Mirant to
the extent that the benefits under such agreement are more favorable to
Executive than, and not duplicative of, the severance compensation and
benefits to which Executive is entitled as set forth above. Any stock
options or other equity-based awards that were outstanding immediately
prior to the Change in Control shall, to the extent not
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then vested, fully vest and become exercisable prior to the Change in
Control. "CHANGE IN CONTROL" shall mean the first to occur of any of the
following events:
(i) Any "person" (as defined in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")),
excluding for this purpose, (i) Mirant or any subsidiary of Mirant, or
(ii) any employee benefit plan of Mirant or any subsidiary of Mirant,
or any person or entity organized, appointed or established by Mirant
for or pursuant to the terms of any such plan which acquires
beneficial ownership of voting securities of Mirant, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly of securities of Mirant representing more than
20% of the combined voting power of Mirant's then outstanding
securities; provided, however, that no Change in Control will be
deemed to have occurred as a result of (v) a change in ownership
percentage resulting solely from an acquisition of securities by
Mirant; (w) the consummation of a chapter 11 plan or plans for MAG;
(x) the sale of substantially all of the assets or stock of MAG; (y)
any other separation of the assets and business of MAG from the
management and control of Mirant; or (z) the appointment of a trustee
pursuant to Chapter 11 of the Bankruptcy Code for Mirant or MAG; or
(ii) The Incumbent Directors (as hereinafter defined) cease
for any reason, including without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Board, provided that any person becoming a
director of Mirant subsequent to the Effective Date shall be
considered an Incumbent Director if such person's election or
nomination for election was approved by a vote of at least two-thirds
(2/3) of the Incumbent Directors; but provided further, that any such
person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a "person" (as defined in
Section 13(d) and 14(d) of the Exchange Act) other than the Board,
including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered
an Incumbent Director; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of Mirant (a "BUSINESS COMBINATION"), in each case,
unless, following such Business Combination, all or substantially all
of the individuals and entities who were the beneficial owners of
outstanding voting securities of Mirant immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 80% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the company resulting from such Business
Combination (including, without limitation, a company which, as a
result of such transaction, owns Mirant or all or substantially all of
Mirant's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business
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Combination, of the outstanding voting securities of Mirant; provided,
however, that (w) the consummation of a chapter 11 plan or plans for
MAG; (x) the sale of substantially all of the assets or stock of MAG;
(y) any other separation of the assets and business of MAG from the
management and control of Mirant; or (z) the appointment of a trustee
pursuant to Chapter 11 of the Bankruptcy Code for Mirant or MAG shall
not constitute a Business Combination for purposes of this Agreement;
or
(iv) Approval by the stockholders of Mirant of a complete
liquidation or dissolution of Mirant.
For purposes of this Agreement, "INCUMBENT DIRECTORS" shall mean: (x)
for periods subsequent to the Effective Date and before the date of
the emergence of Mirant and its subsidiaries from bankruptcy, persons
who, as of the Effective Date, constitute the Board, and (y) for
periods on and after the date of the emergence of Mirant and its
subsidiaries from bankruptcy, persons who, as of the date of the
emergence of Mirant and its subsidiaries from bankruptcy, constitute
the Board.
(g) MITIGATION AND OFFSET. In no event shall Executive be obligated
to seek other employment or take any other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this
Agreement, nor shall earnings of Executive offset or otherwise reduce the
amounts to which Executive may be entitled hereunder.
(h) RELEASE. As a condition of receiving any Separation Payment for
which she otherwise qualifies under this Section 5, Executive agrees to
execute, deliver and not revoke (within the time period permitted by
applicable law) a general release of claims arising out of Executive's
employment with, and termination of employment from, Mirant, in the form
attached hereto as EXHIBIT A (adjusted as necessary to conform to then
existing legal requirements). Executive acknowledges and agrees that,
except as specifically described in this Section 5 or in Section 4(c), all
of her rights to any compensation (other than salary earned through the
date of termination of employment), benefits, bonuses or severance from
Mirant or its subsidiaries or affiliates shall cease upon termination of
her employment with Mirant; provided, however, such release shall in no way
limit or release Mirant from or delay Mirant's obligation to pay or
distribute amounts, or provide other benefits, required to be paid,
distributed or provided under this Section 5, whether before or after
execution of such release.
(i) GROSS-UP PAYMENT FOR EXCESS PARACHUTE TAXES. In the event that
the aggregate of all payments or benefits made or provided to, or that may
be made or provided to, Executive under this Agreement or otherwise (the
"AGGREGATE PAYMENT") is determined to constitute an "excess parachute
payment," as such term is defined in Section 280G(b) of the Internal
Revenue Code, Mirant shall pay to Executive prior to the time any excise
tax imposed by Section 4999 of the Internal Revenue Code ("EXCISE TAX") is
payable with respect to such Aggregate Payment, an additional amount which,
after the imposition of all income and excise taxes thereon, is equal to
the Excise Tax on
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the Aggregate Payment. The determination of whether the Aggregate Payment
constitutes an excess parachute payment and, if so, the amount to be
provided to Executive and the time of payment pursuant to this Section 5(i)
shall be made by an independent auditor (the "AUDITOR") selected jointly by
Mirant and Executive and paid by Mirant. The Auditor shall be a nationally
recognized United States public accounting firm which has not, during the
two (2) years preceding the date of its selection, acted in any way on
behalf of Mirant or any affiliate thereof. If Executive and Mirant cannot
agree on the firm to serve as the Auditor, then Executive and Mirant shall
each select one accounting firm and those two firms shall jointly select
the accounting firm to serve as the Auditor. Notwithstanding the foregoing,
in the event that the amount of Executive's Excise Tax liability is
subsequently determined to be greater than the Excise Tax liability with
respect to which any initial payment to Executive under this Section 5(i)
has been made (and such determination is confirmed by the Auditor), Mirant
shall pay to Executive an additional amount (grossed up for all taxes) with
respect to such additional Excise Tax (and any interest and penalties
thereon) at the time and in the amount reasonably determined by the
Auditor. Similarly, if the amount of Executive's Excise Tax liability is
subsequently determined to be less than the Excise Tax liability with
respect to which any prior payment to Executive has been made under this
Section 5(i) (and such determination is confirmed by the Auditor),
Executive shall refund to Mirant the excess amount received, after
reduction for any nonrefundable tax, penalties and/or interest incurred by
Executive in connection with the receipt of such excess, and such refund
shall be paid promptly after Executive has received any corresponding
refund of excess Excise Tax paid to the Internal Revenue Service. Executive
and Mirant shall cooperate with each other in connection with any
proceeding or claim relating to the existence or amount of liability for
Excise Tax, and all reasonable expenses incurred by Executive in connection
therewith shall be paid by Mirant promptly upon notice of demand from
Executive.
6. COVENANT NOT TO SOLICIT.
(a) NON-SOLICITATION OF EMPLOYEES. Throughout the Term, and for a
period of two (2) years thereafter, Executive shall not solicit or attempt
to solicit, directly or indirectly by assisting others, any employees of
Mirant in order to induce such employees to leave Mirant or become employed
or affiliated with any other person, company or entity.
(b) INJUNCTIVE RELIEF. Executive acknowledges that the covenant not
to solicit is a reasonable means of protecting and preserving Mirant's
investment in its business and in Executive's employment. Executive agrees
that any breach of this covenant will result in irreparable damage and
injury to Mirant and that Mirant will be entitled to injunctive relief in
any court of competent jurisdiction without the necessity of posting any
bond.
(c) ENFORCEABILITY OF COVENANT. Mirant and Executive agree that
Executive's obligation under the covenant not to solicit is separate and
distinct from other provisions of this Agreement, and the failure or
alleged failure of Mirant to perform its obligations
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under any other provisions of this Agreement shall not constitute a defense
to the enforceability of this covenant not to solicit. As provided in this
Section 6 above, the parties also agree that the covenant not to solicit
survives the expiration or termination of this Agreement.
7. NONDISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.
(a) TRADE SECRETS DEFINED. As used in this Agreement, the term
"Trade Secret" shall mean any and all information which is not commonly
known by or available to the general public and which information (i)
derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain
its secrecy. Such information shall include, but not be limited to, any
customer lists, customer billing information, technical information
regarding Mirant products sold by Mirant, sales techniques and information
concerning personnel assignments, and matters concerning the financial
affairs and management of Mirant.
(b) NONDISCLOSURE OF TRADE SECRETS. Throughout the Term and at all
times following the expiration or termination of this Agreement, Executive
shall not directly or indirectly transmit or disclose any trade secret of
Mirant to any person, concern or entity. The obligations under this Section
7(b) shall remain in effect as long as the information constitutes a trade
secret under applicable law.
(c) CONFIDENTIAL INFORMATION DEFINED. As used in this Agreement,
the term "Confidential Information" shall mean all information that is not
a trade secret and that Mirant generally considers or would generally
consider to be confidential.
(d) NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Throughout the Term
and for a period of two (2) years thereafter, Executive shall not, either
directly or indirectly, use, transmit or disclose any Confidential
Information to any person, concern or entity except as necessary to perform
Executive's duties under this Agreement or otherwise with the prior written
consent of Mirant.
(e) INJUNCTIVE RELIEF. Executive acknowledges that these
nondisclosure covenants are a reasonable means of protecting and preserving
Mirant's interests in the confidentiality of this information. Executive
agrees that any breach of these covenants will result in irreparable damage
and injury to Mirant and that Mirant will be entitled to injunctive relief
in any court of competent jurisdiction without the necessity of posting any
bond.
(f) ENFORCEABILITY OF COVENANTS. Mirant and Executive agree that
Executive's obligations under these nondisclosure covenants are separate
and distinct from other provisions of this Agreement, and the failure or
alleged failure of Mirant to perform its obligations under any provision of
this Agreement shall not constitute a defense to the enforceability of
these nondisclosure covenants. As provided in this Section 7 above, the
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parties also agree that the nondisclosure covenants survive the expiration
or termination of this Agreement.
8. MISCELLANEOUS.
(a) WITHHOLDING TAXES. All amounts payable hereunder will be
subject to the withholding of all applicable taxes and deductions required
by any applicable law.
(b) LITIGATION COSTS. In the event of any dispute arising out of or
under this Agreement or Executive's employment with Mirant, if a court of
competent jurisdiction determines that Executive has prevailed on the
issues in the court proceeding, Mirant shall, upon presentment of
appropriate documentation, at Executive's election, pay or reimburse
Executive for all reasonable legal and other professional fees and other
reasonable expenses incurred in connection therewith by Executive.
(c) PROFESSIONAL FEES. Mirant shall promptly pay all professional
fees and expenses incurred by Executive in connection with the negotiation
and preparation of this Agreement and related agreements, including the
fees and expenses of her counsel and other professionals, up to a maximum
of $50,000. Mirant shall gross up for tax purposes any deemed income to
Executive arising pursuant to the payments provided under this Section
8(c), so that the economic benefit is the same to Executive as if such
payments were provided on a non-taxable basis to Executive.
(d) WARRANTY BY EXECUTIVE. Executive represents and warrants to
Mirant that Executive is not subject to any contract, agreement, judgment,
order or decree of any kind, or any restrictive agreement of any character,
that restricts Executive's ability to perform her obligations under this
Agreement or that would be breached by Executive upon her performance of
her duties pursuant to this Agreement.
(e) INDEMNIFICATION. Executive shall be indemnified and held
harmless to the fullest extent permitted under Mirant's Articles of
Incorporation, Bylaws, and applicable law, including the U.S. Bankruptcy
Code (11 U.S.C. Section 101 et seq.), from any and all claims, lawsuits,
losses, damages, assessments, amounts paid in settlement, penalties,
expenses, costs and liabilities of any kind or nature, including without
limitation, court costs and reasonable attorneys' fees, which Executive may
sustain directly as a result of, or in connection with, any act or omission
by Mirant or its employees or any claim, suit or other proceeding brought
or threatened by a third party (including but not limited to governmental
or regulatory agencies or bodies) in connection with Executive's employment
with Mirant or any subsidiary or affiliate thereof. Mirant shall maintain
directors' and officers' liability insurance coverage for Executive in an
amount required to satisfy such indemnification during the Term and, for
any act or omission occurring during the Term, at all times thereafter for
the duration of any period of limitations during which any action may be
brought against Executive; provided, such coverage shall not be in an
amount less than the highest amount covering members of the Board and
Mirant's officers.
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(f) WAIVER. The waiver by any party to this Agreement of a breach
of any of the provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
(g) SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
(h) ASSIGNMENT AND SUCCESSORS. This Agreement may be assigned by
Mirant without Executive's consent to an affiliated entity of Mirant,
including any survivor entity or other successor in interest, but no such
assignment shall relieve Mirant of its full responsibilities hereunder.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and upon their respective legal representatives and
successors in interest.
(i) ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties with respect to the subject matter hereof and
supersedes any prior agreements.
(j) GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Georgia, without regard to its principles of conflict of laws.
(k) NOTICE. Whenever any notice is required, it shall be given in
writing addressed as follows:
To Mirant: Mirant Corporation
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
To Executive: The most recent address on file with Mirant
Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, the next business day after deposit
with a reputable overnight courier or when actually received. Either party
may change the address to which notices shall be delivered or mailed by
notifying the other party of such change in accordance with this Section
8(k).
(l) AMENDMENTS. This Agreement may not be amended or modified
except in writing signed by both parties.
(m) TERM OF AGREEMENT. The term of this Agreement is co-extensive
with the Term of employment as set forth in Section 2. Termination shall
not affect any right or
13
obligation of any party which is accrued or vested prior to or upon such
termination or by its terms continues following the termination of the
Term.
(n) CONFLICT. In the case of conflict between the terms of this
Agreement (the "Agreement Terms") and the provisions of any plan, policy,
or practice of Mirant, as in effect from time to time, otherwise applicable
to Executive (the "Standard Provisions"), Executive's rights or Mirant's
obligations shall be established by whichever of the Agreement Terms or
Standard Provisions would be more beneficial to Executive; PROVIDED,
HOWEVER, that, notwithstanding any other provisions of this Agreement to
the contrary, Executive shall not be entitled to participate in Mirant's
Key Employee Retention Program or any other similar plan adopted by Mirant
with respect to the period expiring on the third anniversary of the
Effective Date.
(o) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which will be deemed an original, but all of which
taken together will constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto having duly executed and delivered this
Employment Agreement as of the date first written above.
MIRANT CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx /s/ M. XXXXXXX XXXXX
---------------------------- ------------------------------
Title: Senior Vice President M. XXXXXXX XXXXX
---------------------------
EXHIBIT A
FORM OF RELEASE
GENERAL RELEASE
1. For valuable consideration, the adequacy of which is hereby acknowledged,
the undersigned ("Executive"), for herself, her spouse, heirs, administrators,
children, representatives, executors, successors, assigns, and all other persons
claiming through Executive, if any (collectively, "Releasers"), knowingly and
voluntarily releases and forever discharges Mirant Corporation, its affiliates,
subsidiaries, divisions, successors and assigns and the current, future and
former employees, officers, directors, shareholders, representatives, attorneys,
trustees and agents (collectively referred to throughout this General Release as
"Released Parties") from any and all claims, causes of action, demands, fees and
liabilities of any kind whatsoever, whether known and unknown, against any of
the Released Parties, Executive has, has ever had or may have as of the date of
execution of this General Release (hereinafter "Claims"), including, but not
limited to, any Claims for, arising out of, or under:
- the Executive's employment and termination of employment with Mirant
Corporation ("Mirant");
- The National Labor Relations Act, as amended;
- Title VII of the Civil Rights Act of 1964, as amended;
- The Civil Rights Act of 1991;
- Sections 1981 through 1988 of Title 42 of the United States Code, as
amended;
- The Civil Rights Act of 1866, as amended;
- The Equal Pay Act, as amended;
- The Employee Retirement Income Security Act of 1974, as amended;
- The Immigration Reform and Control Act, as amended;
- The Americans with Disabilities Act of 1990, as amended;
- The Age Discrimination in Employment Act of 1967, as amended;
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- The Older Workers Benefit Protection Act of 1990, as amended;
- The Worker Adjustment and Retraining Notification Act, as amended;
- The Occupational Safety and Health Act, as amended;
- The Family and Medical Leave Act of 1993, as amended;
- any other federal, state or local civil or human rights law or any other
local, state or federal law, regulation or ordinance, any applicable
Executive Order program and each of their State and local counterparts;
- any public policy, contract, tort, common law or policies and/or
practices of Mirant; and/or
- attorneys' fees, costs and other expenses.
Notwithstanding anything herein to the contrary, this General Release shall not
apply to: (i) Executive's rights of indemnification and directors and officers
liability insurance coverage to which she was entitled immediately prior to DATE
with regard to her service as an officer of Mirant (including, without
limitation, under Section 8(e) of that certain Employment Agreement between
Mirant and Executive dated as of April 1, 2004 (the "Employment Agreement"));
(ii) Executive's rights under any tax-qualified pension plan or claims for
accrued vested benefits under any other employee benefit plan, policy or
arrangement maintained by Mirant or under COBRA; (iii) Executive's rights under
the provisions of the Employment Agreement which are intended to survive
termination of employment; or (iv) Executive's rights as a stockholder. Excluded
from this General Release are any claims which cannot be waived by law.
2. Executive acknowledges and recites that:
(a) Executive has executed this General Release knowingly and
voluntarily;
(b) Executive has read and understands this General Release in its
entirety, including the waiver of rights under the Age
Discrimination in Employment Act;
(c) Executive has been advised and directed orally and in writing
(and this subparagraph (c) constitutes such written direction) to
seek legal counsel and any other advice she wishes with respect
to the terms of this General Release before executing it;
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(d) Executive has sought such counsel, or freely and voluntarily
waives the right to consult with counsel, and Executive has had
an opportunity, if she so desires, to discuss with counsel the
terms of this General Release and their meaning;
(e) Executive enters into this General Release knowingly and
voluntarily, without duress or reservation of any kind, and after
having given the matter full and careful consideration; and
(f) Executive has been offered 21 calendar days after receipt of this
General Release to consider its terms before executing it.
3. This General Release shall be governed by the internal laws (and not the
choice of law principles) of the State of Georgia, except for the application of
pre-emptive Federal law.
4. Executive shall have 7 days from the date hereof to revoke this General
Release by providing written notice of the revocation to Mirant's Chief
Executive Officer, as provided in Section 8(k) of the Employment Agreement, in
which event this General Release shall be unenforceable and null and void.
M. XXXXXXX XXXXX
--------------------------------
Date: Executive
--------------------------
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