Employee Retention Agreement - Mirant Services LLC
FORM OF AMENDED AND RESTATED
EMPLOYMENT RETENTION AGREEMENT
FOR MIRANT SERVICES LLC
This Amended and Restated Employment Retention Agreement ("Agreement")
is made and entered into by and between Mirant Services LLC (the "Company") and
__________________________ (the "Employee") on ______________, 2001, to be
effective as of ______________.
W I T N E S S E T H:
WHEREAS, the Employee is an employee of the Company or another Mirant
WHEREAS, the Company and the Employee entered into an Employment
Retention Agreement (the "Original Agreement") effective as of December 9, 1999;
WHEREAS, the Company and the Employee subsequently entered into an
Amended and Restated Employment Retention Agreement on January 7, 2000 (the
"First Amended Agreement"); and
WHEREAS, in acknowledgement of the spin-off of Mirant Corporation from
Southern Company, and the conversion of awards under the former Southern Energy
Resources, Inc. Value Creation Plan into phantom units of Mirant common stock,
the Company and the Employee wish to supersede the Original Agreement and the
First Amended Agreement and any other amendments to such agreements with this
WHEREAS, the Company wishes to continue to encourage the Employee to
remain with the Company and to provide the Employee with an interest in the
Company's overall profitability.
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 terms
shall have the following meanings:
(a) "Award Amount" shall mean the retention award payable to the
Employee pursuant to Section 3 of this Agreement.
(b) "Change in Control" shall have the meaning of such term as set
forth in the Change in Control Benefit Plan Determination Policy.
(c) "Change in Control Benefit Plan Determination Policy" shall mean
the Mirant Corporation Change in Control Benefit Plan
Determination Policy, as approved by the Board of Directors of
Mirant, as such policy may be amended from time to time in
accordance with the provisions therein.
(d) "Company" shall mean Mirant Services LLC, its successors and
(e) "Disability" shall have the meaning of such term as set forth in
the Change in Control Benefit Plan Determination Policy.
(f) "Effective Date" shall mean the date of execution of this
Agreement, unless otherwise provided herein.
(g) "Fair Market Value" of the Mirant Common Stock, on any date,
means the closing sales price on the New York Stock Exchange on
such date as reported in the Wall Street Journal or, in the
absence of reported sales on such date, the closing sales price
on the immediately preceding date on which sales were reported.
(h) "Mirant" shall mean Mirant Corporation, a Delaware corporation,
its successors and assigns.
(i) "Mirant Common Stock" shall mean the $0.01 par value common stock
(j) "Mirant Subsidiary" shall have the meaning of such term as set
forth in the Change in Control Benefit Plan Determination Policy.
(k) "Mirant Stock Unit" means a hypothetical unit of value equal to
the Fair Market Value of one share of Mirant Common Stock from
time to time. Mirant Stock Units are recorded in book entry form
only, and are credited to the Employee as described in Section 2
of this Agreement.
(l) "Termination for Cause" or "Cause" shall have the meaning of such
term as set forth in the Change in Control Benefit Plan
(m) "Value Creation Plan" or "VCP" shall mean the former Southern
Energy Resources, Inc. Value Creation Plan, as in effect
immediately prior to the termination thereof.
(n) Vesting Date" shall mean the earliest of (i) January 1, 2003,
(ii) the occurrence of a Change in Control, or (iii) the
termination of Employee's employment with the Company or another
Mirant Subsidiary due to the Employee's death, Disability or
termination by the employer without Cause.
2. Conversion of Awards under the Value Creation Plan. Employee's
awards under the Value Creation Plan, as outstanding immediately prior to the
termination of the VCP, have been converted to 6,483.5 Mirant Stock Units for
purposes of calculating the Award Amount under Section 3 of this Agreement.
3. Payment of Award Amount. Provided the Employee shall have remained
as an employee of the Company or another Mirant Subsidiary from the Effective
Date to the Vesting Date, the Company shall pay to the Employee or his estate in
cash, within thirty (30) days after the Vesting Date, an amount equal to the
greater of $100,000 or the product of (i) the number of Mirant Stock Units
credited to the Employee under this Agreement, times (ii) the Fair Market Value
of one share of Mirant Common Stock as of the Vesting Date.
4. Election to Defer. If eligible and permitted under the Mirant
Corporation Deferred Compensation Plan for Directors and Select Employees, by
written election timely filed with the administrator of such plan, the Employee
may defer all or a portion of the amount payable under this Agreement in
accordance with the terms and conditions of such plan.
5. Termination for Cause or Resignation by Employee. In the event of
(i) the Employee's Termination for Cause, (ii) the Employee's resignation for
any reason, or (iii) the Employee's retirement, prior to the Vesting Date, the
Employee shall forfeit the entire Award Amount and the Company shall have no
further obligations with respect to any amount under this Agreement.
6. Confidentiality and Legal Process. The Employee represents and
agrees that he will keep the terms, amount and fact of this Agreement
confidential and that he will not hereafter disclose any information concerning
this Agreement to anyone other than his personal agents, including, but not
limited to, any past, present, or prospective employee or applicant for
employment with the Company or any Mirant Subsidiary. Notwithstanding the
foregoing, nothing in this Agreement is intended to prohibit the Employee from
performing any duty or obligation that shall arise as a matter of law.
Specifically, the Employee shall continue to be under a duty to truthfully
respond to matters of law and shall continue to be under a duty to truthfully
respond to any legal and valid subpoena or other legal process. This Agreement
is not intended in any way to proscribe the Employee's right and ability to
provide information to any federal, state or local government in the lawful
exercise of such government's governmental functions.
7. Assignability. Neither the Employee, his estate, his beneficiaries,
nor his legal representative shall have any rights to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Agreement shall be void and have no effect.
8. Unsecured General Creditor. Unless the Company shall in its
discretion determine otherwise, the benefits payable to the Employee 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
9. Guarantee of Mirant. If the Company fails or refuses to make
payments under this Agreement, the Employee 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. The Employee's right to payment is not increased as a result of this
Guarantee. The Employee has the same right to payment from Mirant as 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.
10. Amendment; Modification; Termination. Except as otherwise provided
herein, this Agreement may be amended, modified, or terminated only by a writing
executed by the parties hereto.
11. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which the Employee may be entitled or
for which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company.
12. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of the Employee.
13. Compensation. Any compensation contributed on behalf of the
Employee under this Agreement shall not be considered "compensation", as the
term is defined in the Mirant Services LLC Employee Savings Plan, or the Mirant
Services LLC Pension Plan. Payment of the Award Amount to the Employee shall not
be considered wages, salaries or compensation under any other employee benefit
14. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for Cause, the employment relationship
of the Employee and the Company.
15. Transfer of Employment to Mirant or another Mirant Subsidiary. In
the event that the Employee's employment by the Company is terminated prior to
the Vesting Date and the Employee shall become immediately re-employed by Mirant
or another Mirant Subsidiary, the Company shall assign this Agreement to Mirant
or such Mirant Subsidiary; Mirant or such Mirant Subsidiary shall accept such
assignment or cause such Mirant Subsidiary to accept such assignment; such
assignee shall become the "Company" for all purposes hereunder; and this
Agreement shall be amended to appropriately reflect the performance of such
assignee. In the event of such assignment, the expense of this Agreement shall
be the sole responsibility of the Company.
16. Governing Law. This Agreement, and all its rights under it, shall
be governed by and construed in accordance with the laws of the State of
IN WITNESS WHEREOF, this Agreement has been executed by the parties
first listed above on the date first listed above, to be effective as of the
MIRANT SERVICES LLC