Exhibit 10.23

 

MIRANT CORPORATION

 

DEFERRED COMPENSATION PLAN

 

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MIRANT CORPORATION
DEFERRED COMPENSATION PLAN

 

TABLE OF CONTENTS

 

Preamble

 

1

 

 

 

 

 

ARTICLE 1
REFERENCES, CONSTRUCTION AND DEFINITIONS

 

 

 

 

 

 

 

1.1

 

Account

 

2

1.2

 

Adjustment Date

 

2

1.3

 

Affiliate

 

2

1.4

 

Annual Bonus

 

2

1.5

 

Authorized Leave of Absence

 

2

1.6

 

Beneficiary

 

2

1.7

 

Board

 

2

1.8

 

Code

 

2

1.9

 

Committee

 

2

1.10

 

Company

 

2

1.11

 

Compensation

 

2

1.12

 

Deferral Election

 

2

1.13

 

Deferrals

 

3

1.14

 

Director

 

3

1.15

 

Director Fees

 

3

1.16

 

Effective Date

 

3

1.17

 

Employee

 

3

1.18

 

ERISA

 

3

1.19

 

Participant

 

3

1.20

 

Participating Company

 

3

1.21

 

Performance-Based Compensation

 

3

1.22

 

Plan

 

3

1.23

 

Plan Administrator

 

4

1.24

 

Plan Year

 

4

1.25

 

Salary

 

4

1.26

 

Service

 

4

1.27

 

Termination of Service

 

4

 

 

 

 

 

ARTICLE 2
ELIGIBILITY AND PARTICIPATION

 

 

 

 

 

 

 

2.1

 

Eligibility

 

4

2.2

 

Participation

 

4

2.3

 

Duration of Participation

 

4

 

 

 

 

 

ARTICLE 3
ACCUMULATION OF PLAN BENEFITS

 

 

 

 

 

 

 

3.1

 

Deferral Elections

 

5

3.2

 

Deferral Investments and Deemed Earnings

 

6

 

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ARTICLE 4
DISTRIBUTION OF BENEFITS

 

 

 

 

 

 

 

4.1

 

Termination Benefit

 

7

4.2

 

Specified Plan Year Benefit

 

8

4.3

 

Subsequent Elections

 

8

4.4

 

Death

 

9

4.5

 

Distributions to Key Employees

 

9

4.6

 

Reemployment

 

9

4.7

 

Facility of Payment

 

9

 

 

 

 

 

ARTICLE 5
UNFORESEEABLE EMERGENCY PAYMENTS

 

 

 

 

 

 

 

5.1

 

Unforeseeable Emergency Payments

 

9

 

 

 

 

 

ARTICLE 6
ADJUSTMENTS

 

 

 

 

 

 

 

6.1

 

Accounts

 

10

6.2

 

Adjustments to Account

 

10

 

 

 

 

 

ARTICLE 7
FORFEITURE

 

 

 

 

 

 

 

7.1

 

Forfeiture

 

10

 

 

 

 

 

ARTICLE 8
ADMINISTRATION OF THE PLAN

 

 

 

 

 

 

 

8.1

 

Designation of Committee

 

10

8.2

 

Powers and Duties of the Committee

 

10

8.3

 

Agents

 

11

8.4

 

Instructions for Payments

 

11

8.5

 

Claims for Benefits

 

11

8.6

 

Hold Harmless

 

12

8.7

 

Service of Process

 

13

 

 

 

 

 

ARTICLE 9
DESIGNATION OF BENEFICIARIES

 

 

 

 

 

 

 

9.1

 

Beneficiary Designation

 

13

9.2

 

Failure to Designate Beneficiary

 

13

 

 

 

 

 

ARTICLE 10
WITHDRAWAL OF PARTICIPATING COMPANY

 

 

 

10.1

 

Withdrawal of Participating Company

 

13

10.2

 

Effect of Withdrawal

 

14

 

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ARTICLE 11
AMENDMENT OR TERMINATION OF THE PLAN

 

11.1

 

Right to Amend or Terminate the Plan

 

14

11.2

 

Notice

 

14

 

 

 

 

 

ARTICLE 12
GENERAL PROVISIONS AND LIMITATIONS

 

 

 

 

 

12.1

 

No Right to Continued Employment

 

14

12.2

 

Payment of Behalf of Payee

 

14

12.3

 

Nonalienation

 

15

12.4

 

Missing Payee

 

15

12.5

 

Required Information

 

15

12.6

 

Binding Effect

 

15

12.7

 

Merger or Consolidation

 

15

12.8

 

Trust

 

16

12.9

 

Electronic Communication

 

16

12.10

 

Entire Plan

 

16

 

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MIRANT CORPORATION
DEFERRED COMPENSATION PLAN

 

PREAMBLE

 

The primary purpose of this Mirant Corporation Deferred Compensation Plan
(“Plan”) is to allow certain members of management and members of the Board of
Directors of Mirant Corporation (“Company”) and Participating Companies to defer
the receipt of a portion of their compensation.

 

This Plan is intended to comply with the requirements of Section 409A of the
Internal Revenue Code and the regulations and other guidance issued thereunder,
as in effect from time to time. To the extent a provision of the Plan is
contrary to or fails to address the requirements of Code Section 409A, the Plan
shall be construed and administered as necessary to comply with such
requirements until this Plan is appropriately amended to comply with such
requirements.

 

The Company establishes this Plan, to further the economic interests of the
Company and its affiliates by providing deferred compensation incentives to
selected management members and members of its Board of Directors. This Plan is
intended to enhance the long-term performance and retention of the directors and
management members selected to participate in this Plan.

 

This Plan is a “top-hat” plan within the meaning of Sections 201(2), 301(a)(3),
and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended
(ERISA). As such, this Plan is subject to limited ERISA reporting and disclosure
requirements, and is exempt from all other ERISA requirements. This Plan shall
be unfunded for tax purposes and for purposes of Title I of ERISA. Distributions
required or contemplated by this Plan or actions required to be taken under this
Plan shall not be construed as creating a trust of any kind or a fiduciary
relationship between the Company and any Participant, any Participant’s
designated beneficiary, or any other person.

 

ARTICLE 1
REFERENCES, CONSTRUCTION AND DEFINITIONS

 

Unless otherwise indicated, all references to Articles, Sections, and
subsections shall be to the Plan as set forth in this document. The Plan and all
rights thereunder shall be construed and enforced in accordance with ERISA and,
to the extent that state law is applicable, the laws of the State of Georgia.
The Article titles and the captions preceding Sections and subsections have been
inserted solely as a matter of convenience and in no way define or limit the
scope or intent of any provision. When the context so requires, the singular
includes the plural. Whenever used herein and capitalized, the following terms
have the respective meanings indicated unless the context plainly requires
otherwise.

 

1.1                               “Account” means, with respect to each
Participant’s Deferrals, the separate bookkeeping account adjusted as of each
Adjustment Date as provided in Section 6.2. The Account may also be referred to
as the Termination Benefit or the Specified Plan Year Benefit. Subaccounts shall
be maintained within each Participant’s Account.

 

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1.2                               “Adjustment Date” means each business day, and
any other date upon or as of which accounts are adjusted as set forth in
Article 6.

 

1.3                               “Affiliate” means any corporation or trade or
business which is a member of a controlled group of corporations or a group of
businesses under common control (within the meaning of Sections 414(b) and
(c) of the Code) of which the Company is a member, and any other entity required
to be aggregated with the Company pursuant to Section 409A(d)(6) of the Code and
the regulations (or similar guidance) thereunder.

 

1.4                               “Annual Bonus” means an annual variable bonus,
which may or may not qualify as Performance-Based Compensation, which is awarded
and is payable by the Participating Company to the Employee for Service
performed during a Plan Year.

 

1.5                               “Authorized Leave of Absence” means, with
respect to an Employee, either (a) a leave of absence authorized by the
Participating Company provided that the Employee returns within the period
specified; or (b) an absence required to be considered an Authorized Leave of
Absence by applicable law.

 

1.6                               “Beneficiary” means the beneficiary or
beneficiaries designated by a Participant pursuant to Article 9 to receive the
benefits, if any, payable on behalf of the Participant under the Plan after the
death of such Participant, or, when there has been no such designation or an
invalid designation, the individual or entity, or the individuals or entities,
who will receive such amount.

 

1.7                               “Board” means the Board of Directors of Mirant
Corporation.

 

1.8                               “Code” means the Internal Revenue Code of
1986, as now in effect or as hereafter amended. All citations to Sections of the
Code are to such Sections as they may from time to time be amended or
renumbered.

 

1.9                               “Committee” means the Committee appointed by
the Company and responsible for administering the Plan as provided in Article 8.

 

1.10                        “Company” means Mirant Corporation and, where the
context indicates, any Participating Company that adopts the Plan. The term
Company also includes any successor corporation or firm of the Company which
shall, by written agreement, assume the obligations of this Plan.

 

1.11                        “Compensation” means (i) with respect to an
Employee, Salary, Annual Bonuses and Performance-Based Compensation payable by
the Participating Company to the Employee for Service, and (ii) with respect to
a Director, Director Fees. Compensation does not include stock options, stock
appreciation rights, restricted stock or stock unit awards.

 

1.12                        “Deferral Election” means (i) with respect to an
Employee, an annual irrevocable election, made in accordance with Section 3.1 in
such form (electronic or otherwise) as approved and provided by the Plan
Administrator, to defer the receipt of a designated amount of Salary, Annual
Bonus and/or Performance-Based Compensation, and (ii) with respect to a
Director, an annual irrevocable election, made in accordance with Section 3.1 in
such form (electronic or otherwise) as approved and provided by the Plan

 

2

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Administrator, to defer the receipt of a designated amount of Director Fees.
Amounts so deferred are called “Deferrals.”

 

1.13                        “Deferrals” means amounts of Compensation deferred
pursuant to a Deferral Election.

 

1.14                        “Director” means a member of the Board of Directors
of the Company who is not an employee of the Company or of any Participating
Company.

 

1.15                        “Director Fees” means, with respect to a Director,
cash meeting fees and the annual or any supplemental retainer fee payable by the
Company to the Director for Service as a Director of the Company.

 

1.16                        “Effective Date” means April 1, 2006.

 

1.17                        “Employee” means a person who is a common law
employee of a Participating Company.

 

1.18                        “ERISA” means the Employee Retirement Income
Security Act of 1974, as now in effect or as hereafter amended. All citations to
Sections of ERISA are to such Sections as they may from time to time be amended
or renumbered.

 

1.19                        “Participant” means any individual who commenced
participation in the Plan as provided in Article 2 and who is either (a) an
Employee, (b) a former Employee who is eligible for a benefit under the Plan,
(c) a Director, or (d) a former Director who is eligible for a benefit under the
Plan.

 

1.20                        “Participating Company” means the Company or an
Affiliate which, by action of its board of directors or equivalent governing
body and with the written consent of the Board, has adopted the Plan; provided
that the Board may, subject to the foregoing provision, waive the requirement
that such board of directors or equivalent governing body effect such adoption.
By its adoption of or participation in the Plan, a Participating Company shall
be deemed to appoint the Company its exclusive agent to exercise on its behalf
all of the power and authority conferred by the Plan upon the Company and accept
the delegation to the Committee of all the power and authority conferred upon it
by the Plan. The authority of the Company to act as such agent shall continue
until the Plan is terminated as to the Participating Company. The term
“Participating Company” shall be construed as if the Plan were solely the Plan
of such Participating Company, unless the context plainly requires otherwise.

 

1.21                        “Performance-Based Compensation” has the meaning
given such term in Code Section 162(m) and applicable regulations (and other
guidance), which generally means cash or equity-based compensation where the
amount of, or entitlement to, the compensation is contingent on the satisfaction
of preestablished organizational or individual performance criteria relating to
a performance period of at least 12 consecutive months in which the Employee
performs services; provided, however, that for purposes of this Plan,
Performance-Based Compensation shall not include any equity-based compensation.

 

1.22                        “Plan” means the Mirant Corporation Deferred
Compensation Plan as contained herein and as it may be amended from time to time
hereafter.

 

3

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1.23                        “Plan Administrator” means the Committee.

 

1.24                        “Plan Year” means the initial short plan year from
the Effective Date to the next December 31. Thereafter, Plan Year means the
calendar year ending on each December 31st.

 

1.25                        “Salary” means, with respect to an Employee, cash
base salary payable by the Participating Company to the Employee for Service
with the Participating Company. Notwithstanding any provision in this Plan to
the contrary, Salary shall not include Annual Bonuses or Performance-Based
Compensation, but shall include any amount which would have been included in
cash base salary but for the Participant’s election to defer payment of such
amount under any provision of the Code, including, but not limited to, Sections
125, 132(f), 402(e)(3), 402(h)(1), 409A, or 457(b) of the Code.

 

1.26                        “Service” means (i) with respect to an Employee,
actual employment with the Participating Company or any Affiliate, including
service recognized by the Committee for periods prior to such actual employment,
and (ii) with respect to a Director, service as a member of the Board of
Directors of the Company.

 

1.27                        “Termination of Service” means a separation from
service with a Participating Company or an Affiliate as determined by the
Committee in accordance with the requirements of Section 409A of the Code and
the regulations (or similar guidance) thereunder, and in accordance with
reasonable standards and policies adopted by the Committee; provided, however,
that with respect to an Employee, the transfer of the Employee from employment
by one Participating Company or an Affiliate to employment by another
Participating Company or Affiliate shall not constitute a Termination of
Service.

 

ARTICLE 2
ELIGIBILITY AND PARTICIPATION

 

2.1                               Eligibility. The following individuals are
eligible to become Participants in the Plan:

 

(a)                                  Employees who are members of the
Participating Company’s “select group of management or highly compensated
employees,” as defined in Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, as
amended, and who are designated in writing by the Committee as eligible; and

 

(b)                                  Directors of the Company.

 

2.2                               Participation. An Employee or Director who is
eligible under Section 2.1 to become a Participant shall become a Participant
upon the execution and delivery of a Deferral Election under this Plan. No
Deferral Election shall be valid until accepted by the Committee in the exercise
of its sole and absolute discretion.

 

2.3                               Duration of Participation. A Participant shall
continue to be a Participant until the date the Participant is no longer
entitled to a benefit under this Plan. However, the Committee may, in its sole
and absolute discretion, determine that a Participant will cease to be eligible
to make subsequent year Deferral Elections after becoming a Participant under
this Article 2.

 

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ARTICLE 3
ACCUMULATION OF PLAN BENEFITS

 

3.1                               Deferral Elections. A Director or an eligible
Employee shall be eligible to make Deferral Elections as provided below.

 

(a)                                  Procedures. The Committee, in the exercise
of its discretion, may decide with respect to each Plan Year whether to offer
Directors and eligible Employees the option of making a Deferral Election. For
each Plan Year with respect to which Deferral Elections are permitted, the
following procedures shall apply:

 

(i)                                    First Year of Participation. A Director
or an Employee shall have 30 days following the date such individual first
becomes eligible to participate in this Plan in which to execute and deliver to
the Committee a Deferral Election by which he or she elects to defer a
designated percentage of Compensation to be earned during the portion of the
Plan Year remaining after the Deferral Election is made and which, but for such
Deferral Election, would be paid to the Participant.

 

(ii)                                Subsequent Years of Participation.

 

(a)                                  Compensation other than Performance-Based
Compensation. A Participant shall have until December 31 of each year to execute
and deliver to the Committee a Deferral Election providing for the Deferral of a
designated percentage of Compensation (other than Performance-Based
Compensation) to be earned during the next Plan Year and which, but for such
Deferral Election, would be paid to the Participant. If the Participant fails to
deliver a new Deferral Election with respect to such Compensation prior to
December 31 of the then-current Plan Year indicating an election to change or
cease deferrals for the next Plan Year, the Participant’s Deferral Election in
effect during the then-current Plan Year shall become irrevocable as of
December 31 of that Plan Year and continue in effect during the next Plan Year.

 

(b)                                  Performance-Based Compensation. A Deferral
Election with respect to Performance-Based Compensation may be made by a
Participant no later than the date that is six (6) months before the end of the
applicable performance period and in no event after such Performance-Based
Compensation has become both substantially certain to he paid and readily
ascertainable. A Deferral Election with respect to Performance-Based
Compensation other than Annual Bonus shall be effective only for one performance
period and shall not apply to future performance periods. A Deferral Election
with respect to Annual Bonus that constitutes Performance-Based Compensation
will continue in effect during the next Plan Year if the Participant fails to
deliver a new Deferral Election with respect to Annual Bonus prior to
December 31 of the then-current Plan Year indicating an election to change or
cease deferrals for the next Plan Year, the Participant’s Deferral Election in
effect during the then-current

 

5

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Plan Year shall become irrevocable as of December 31 of that Plan Year and
continue in effect during the next Plan Year.

 

(iii)                            Payment Method and Time of Distribution. A
Participant shall designate in his or her Deferral Election the method for which
such Deferrals plus deemed income allocations on such amounts will be paid, and
whether such payment(s) will begin following the Participant’s Termination of
Service or in a specified Plan Year, each as further described in Article 4.

 

(b)                                  Maximum Deferrals. An eligible Employee
may make Deferrals of up to 100% of his or her Salary and/or Annual Bonus and up
to 100% of other eligible forms of Compensation in any Plan Year (subject to the
Company’s obligation to withhold FICA taxes with respect to such amounts). A
Director may make Deferrals of up to 100% of his or her Director Fees in any
Plan Year.

 

3.2                               Deferral Investments and Deemed Earnings. The
amount of all Deferrals shall be reflected in each Participant’s Account as an
account payable of the applicable Participating Company. Each Account shall be
credited on each Adjustment Date with the amount of deemed income or loss as
provided herein.

 

Subject to such limitations as may from time to time be required by law, imposed
by the Company, or contained elsewhere in the Plan, and subject to such
operating rules and procedures as may be imposed from time to time by the
Company, prior to and effective for each Adjustment Date, each Participant
may communicate to the Company a direction as to how his or her Account should
be deemed to be invested among such categories of deemed investments as shall be
determined and made available hereunder by the Committee. Such direction shall
designate the percentage (in any whole percent multiples) of each portion of the
Participant’s Account that is requested to be deemed to be invested in such
categories of deemed investments and shall be subject to the following rules:

 

(a)                                  Any initial or subsequent deemed investment
direction shall be made in such form (electronic or otherwise) as designated by
the Committee from time to time and shall be effective as soon as practical
after receipt.

 

(b)                                  All amounts credited to the Participant’s
Account shall be deemed to be invested in accordance with the then effective
deemed investment direction, and, as of the effective date of any new deemed
investment direction, all or a portion of the Participant’s Account at that date
shall be reallocated among the designated deemed investment funds according to
the percentages specified in the new deemed investment direction unless and
until a subsequent deemed investment direction shall be filed and become
effective. A Participant may make changes to his or her deemed investment
elections in the form and manner designated by the Committee. An election
concerning deemed investment choices shall continue indefinitely as provided in
the Participant’s most recent investment election or other form specified by the
Company.

 

(c)                                  If the Company receives an initial or
revised deemed investment direction that it determines to be incomplete,
unclear, or improper, the Participant’s investment direction then in effect
shall remain in effect (or, in the case of a deficiency in an

 

6

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initial deemed investment direction, the Participant shall be deemed to have
filed no deemed investment direction) until the next Adjustment Date, unless the
Company provides for, and permits the application of, corrective action prior
thereto.

 

(d)                                  If the Company possesses at any time
directions as to the deemed investment of less than all of a Participant’s
Account, the Participant shall be deemed to have directed that the undesignated
portion of his or her Account be deemed to be invested in a money market fund
made available under the Plan as determined by the Company in its discretion.

 

(e)                                  Each Participant hereunder, as a condition
to his or her participation hereunder, agrees to indemnify and hold harmless the
Company and its agents and representatives from any losses or damage of any kind
relating to the deemed investment of the Participant’s Account hereunder.

 

(f)                                    The fact that an amount has been credited
to a Participant’s Account, as provided above, will not operate to vest in the
Participant any right, title or interest in or to any benefit under the Plan.
Vesting of such benefits shall occur only as herein set forth.

 

(g)                                 Each reference in this Section to a
Participant shall be deemed to include, where applicable, a reference to a
Beneficiary.

 

ARTICLE 4
DISTRIBUTION OF BENEFITS

 

4.1                               Termination Benefit

 

(a)                                  Eligibility. Upon a Participant’s
Termination of Service, the Participating Company shall pay the Participant the
“Termination Benefit” described in this Section 4.1.

 

(b)                                  Payment Method and Timing. A Participant
may elect in his or her annual Deferral Election, in the manner and
form required by the Committee, to receive payment of such Plan Year’s Deferrals
plus deemed income allocations thereon either in a single lump sum payment or in
annual installment payments not to exceed ten (10). If elected, the annual
installment payments with respect to any year’s Deferrals shall be determined by
dividing the balance of the Participant’s Deferrals for such Plan Year by the
remaining number of years in the original installment period.

 

Upon Termination of Service, the Participant’s Deferrals with respect to a Plan
Year shall be distributed to the Participant in a single lump sum payment or in
annual installments not to exceed ten (10) years as elected by the Participant;
provided, however that, regardless of any contrary election, if a Participant’s
total Deferrals, including all sub-accounts, upon Termination of Service is
$25,000 or less, the balance will be paid in a single lump sum payment on or
before the later of December 31 of the calendar year in which the Termination of
Service occurred, or the 15th day of the third month following the Termination
of Service. Except as provided in the foregoing sentence, payment of the
Termination

 

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Benefit will be made or will begin as soon as practicable after the
Participant’s Termination of Service; provided, however, that with respect to
any Participant who is a “specified employee” as determined in accordance with
Section 409A of the Code and related guidance, payment of the Termination
Benefit will be made or will begin no earlier than the date that is six
(6) months following the date of the Participant’s Termination of Service.

 

4.2                               Specified Plan Year Benefit

 

(a)                                  General Rule. In lieu of receiving a
Termination Benefit with respect to Deferrals for a Plan Year as described in
Section 4.1, each Participant may irrevocably elect in his or her annual
Deferral Election, in the manner and form required by the Committee, to receive
payment of such Plan Year’s Deferrals plus deemed income allocations thereon, in
a single lump sum payment or in annual installment payments not to exceed four
(4) on or about July 1 of the Plan Year(s) specified by the Participant;
provided, however that, regardless of any contrary election to receive a
Specified Plan Year Benefit in annual installment payments, if a Participant’s
total Deferrals covered by such Specified Plan Year Benefit election as of the
date on which the first installment payment would be payable is $10,000 or less,
the balance will be paid in a single lump sum payment on such date.

 

(b)                                  Intervening Termination of Service. In the
event a Participant has elected to receive a Specified Plan Year Benefit for
some or all of his or her Deferrals and the Participant incurs a Termination of
Service prior to the beginning of the calendar year in which such Specified Plan
Year Benefit was scheduled to commence in accordance with Section 4.2(a), the
Specified Plan Year Benefit shall instead be distributed as a lump sum payment
as soon as practicable after the Participant’s Termination of Service; provided,
however, that with respect to any Participant who is a “specified employee” as
determined in accordance with Section 409A of the Code and related guidance,
payment of the Specified Plan Year Benefit in that case will be made no earlier
than the date that is six (6) months following the date of the Participant’s
Termination of Service.

 

4.3                               Subsequent Elections. Notwithstanding the
preceding, a Participant may, with the approval of the Committee, elect (i) to
change the method of distribution with respect to a Termination Benefit under
Section 4.1 or a Specified Plan year Benefit under Section 4.2 from lump sum to
annual installment payments, or (ii) to delay the timing of any distribution
with respect to a Termination Benefit under Section 4.1 or a Specified Plan Year
Benefit under Section 4.2. Such subsequent election shall not take effect for at
least twelve (12) months after it is made, and the first payment with respect to
such subsequent election must be deferred for at least five (5) years from the
date such payment would otherwise have been made. Further, any subsequent
election with respect to a Specified Plan Year Benefit under Section 4.2 may not
be made less than twelve (12) months prior to the date of the scheduled payment
to which it relates.

 

Notwithstanding anything to the contrary in the Plan, this Section 4.3 shall be
construed so as to comply with the requirements of Section 409A(a)(2)(A)(iv) and
409A(a)(4)(C) of the Code and the regulations (or similar guidance) issued
thereunder.

 

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4.4                               Death. If a Participant dies before beginning
distributions, or dies after beginning distributions but before receiving
distribution of his entire Termination Benefit or Specified Plan Year Benefit,
if applicable, the Participant’s Termination Benefit or Specified Plan Year
Benefit elected for each Plan Year’s Deferrals will be paid to the Participant’s
Beneficiary(ies) according to the payment method(s) and at the time(s) elected
by the Participant.

 

4.5                               Distributions to Key Employees.
Notwithstanding any other provision of this Plan to the contrary, for purposes
of Section 409A(a)(2)(A)(i) of the Code, in the case of a key employee as
determined in accordance with Section 409A of the Code and related guidance, in
no event shall a benefit payment payable as a result of the Participant’s
Termination of Service begin earlier than the date that is six (6) months
following the date of the Participant’s Termination of Service.

 

4.6                               Reemployment. If a Participant who has
incurred a Termination of Service again becomes an Employee, such reemployment
shall not change, suspend, delay, or otherwise affect payment of the
Participant’s Termination Benefit.

 

4.7                               Facility of Payment. If, in the Committee’s
opinion, a Participant or other person entitled to benefits under the Plan is
under a legal disability or is in any way incapacitated so as to be unable to
manage his financial affairs, payment will be made to the conservator or other
person legally charged with the care of his person or his estate or, if no such
legal conservator will have been appointed, then to any individual (for the
benefit of such Participant or other person entitled to benefits under the Plan)
whom the Committee may from time to time approve.

 

ARTICLE 5
UNFORESEEABLE EMERGENCY PAYMENTS

 

5.1                               Unforseeable Emergency Payments. In the event
a Participant incurs a financial hardship as a result of an “unforeseeable
emergency” (as such term is defined below), the Participant may apply to the
Committee for the distribution of all or a portion of the Participant’s Account.
The application shall provide such information and be in such form as the
Committee shall require. The Committee, in the exercise of its sole and absolute
discretion, may approve or deny the request in whole or in part, and shall
direct the Participating Company accordingly. The term “unforeseeable emergency”
means a severe financial hardship to the Participant resulting from an illness
or accident of the Participant, the Participant’s spouse, or a dependent (as
defined in Section 152(a) of the Code) of the Participant, loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. In no event may the amounts distributed with respect to an
unforeseeable emergency exceed the amounts necessary to satisfy such emergency
plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such hardship is or
may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Participant’s assets (to the extent the liquidation of
such assets would not itself cause severe financial hardship). If a Participant
receives a distribution of all or a portion of the Participant’s Account
pursuant to this Section 5.1, any Deferral Election in effect for the
Participant shall be cancelled, and the Participant shall make no additional
Deferrals for the remainder of the current Plan Year, The Participant may make
Deferrals in future Plan Years by delivering a new Deferral Election in
accordance

 

9

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with Section 3.1(a)(ii). Notwithstanding any provision in the Plan to the
contrary, any payment made pursuant to this Section 5.1 shall comply with
Section 409A(a)(2)(A)(vi) of the Code and the regulations (or similar guidance)
promulgated thereunder (or any successor provisions).

 

ARTICLE 6
ADJUSTMENTS

 

6.1                               Accounts. The Committee shall establish and
cause to be maintained with respect to each Participant’s Deferrals and income
allocations separate subaccounts as part of the Participant’s Account, and as of
each Adjustment Date shall adjust each subaccount as provided in this Article 6.

 

6.2                               Adjustments to Account. As of each Adjustment
Date, the Committee shall adjust each Account by the following:

 

(a)                                  Unforeseeable Emergency Payments. The
Account shall be reduced by the amount of Deferrals distributed pursuant to
Article 5 and allocable to the account.

 

(b)                                  Income Allocations. Deemed income or loss
allocations for the period since the last Adjustment Date shall be credited or
debited to the Account, as the case may be.

 

(c)                                  Deferrals. Deferrals, if any, made since
the last Adjustment Date and allocable to the account shall be added to the
Account.

 

ARTICLE 7
FORFEITURE

 

7.1                               Forfeiture. Notwithstanding any provision in
this Plan to the contrary, no benefit whatsoever shall be paid to or on behalf
of any Participant under this Plan if the Participant defrauds a Participating
Company or an Affiliate or embezzles money or property of a Participating
Company or an Affiliate.

 

ARTICLE 8
ADMINISTRATION OF THE PLAN

 

8.1                               Designation of Committee. For purposes of this
Plan, the Committee shall be the Mirant Benefits Committee, unless a different
committee is appointed by the Board to be responsible for administering the
Plan.

 

8.2                               Powers and Duties of the Committee. The
Committee shall have general responsibility for the administration of the Plan
(including but not limited to complying with reporting and disclosure
requirements (if any), and establishing and maintaining Plan records). In the
exercise of its sole and absolute discretion, the Committee shall interpret the
Plan’s provisions and determine the eligibility of individuals for benefits. The
Committee shall, to the best of its ability, interpret the Plan in such a way as
to meet the requirements of Section 409A of the Code and any regulations and
guidance issued thereunder.

 

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8.3                               Agents. The Committee may engage such legal
counsel, certified public accountants and other advisers and service providers,
who may be advisers or service providers for the Participating Company or an
Affiliate, and make use of such agents and clerical or other personnel, as it
shall require or may deem advisable for purposes of the Plan. The Committee
may rely upon the written opinion of any legal counsel or accountants engaged by
the Committee, and may delegate to any such agent or to any subcommittee or
member of the Committee its authority to perform any act hereunder, including,
without limitation, those matters involving the exercise of discretion, provided
that such delegation shall be subject to revocation at any time at the
discretion of the Committee.

 

8.4                               Instructions for Payments. All requests of or
directions to the Participating Company for payment or disbursement shall be
signed by a member of the Committee or such other person or persons as the
Committee may from time to time designate. This person shall cause to be kept
full and accurate accounts of payments and disbursements under the Plan.

 

8.5                               Claims for Benefits.

 

(a)                                  Initial Claims. Any Employee, Beneficiary,
or his duly authorized representative may file a claim for a benefit to which
the claimant believes that he is entitled. Such a claim must be in writing and
delivered to the Committee in person or by mail, postage paid. Within ninety
(90) days after receipt of such claim, the Committee shall send to the claimant,
by mail, postage prepaid, notice of the granting or denying, in whole or in
part, of such claim, unless special circumstances require an extension of time
for processing the claim. In no event may the extension exceed ninety (90) days
from the end of the initial period. If such extension is necessary, the claimant
will be given a written notice to this effect prior to the expiration of the
initial 90-day period. The Committee shall have full discretion to deny or grant
a claim in whole or in part. If notice of the denial of a claim is not furnished
in accordance with this Section 8.5(a), the claim shall be deemed denied and the
claimant shall be permitted to exercise his right to review pursuant to
subsections (c) and (d).

 

(b)                                  Requirement for Written Notice of Claim.
The Committee shall provide a written notice to every claimant who is denied a
claim for benefits under this Article. Such written notice shall set forth in a
manner calculated to be understood by the claimant, the following information:

 

(i)                                    The specific reason or reasons for the
adverse determination.

 

(ii)                                Reference to the specific Plan provisions on
which the determination was based.

 

(iii)                            A description of any additional material or
information necessary for the Participant to perfect the claim and an
explanation of why such material or information is necessary.

 

(iv)                               A description of the Plan’s review
procedures, incorporating any voluntary appeal procedures offered by the Plan,
and the time limits applicable to such procedures, including a statement of the
Participant’s right to bring a

 

11

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civil action under Section 502 of ERISA following an adverse benefit
determination on review.

 

(v)                                   A statement that the Participant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim.

 

(c)                                  Appeals. Within sixty (60) days after the
receipt by the claimant of written notification of the denial (in whole or in
part) of his claim, the claimant or his duly authorized representative may make
a written application to the Committee, in person or by certified mail, postage
prepaid, to be afforded a review of such denial; may review pertinent documents;
and may submit issues and comments in writing.

 

(d)                                  Disposition of Disputed Claims. Upon
receipt of a request for review, the Committee shall make a prompt decision on
the review matter. The decision on such review shall be written in a manner
calculated to be understood by the Participant and shall include:

 

(i)                                    The specific reason or reasons for the
adverse decision;

 

(ii)                                Reference to the specific plan provisions on
which the benefit determination is based;

 

(iii)                            A statement that the Participant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the Participant’s
claim for benefits; and

 

(iv)                               A statement describing any voluntary appeal
procedures offered by the Plan and the Participant’s right to obtain the
information about such voluntary appeal procedures (if applicable), and a
statement of the Participant’s right to bring action under Section 502(a) of
ERISA.

 

The decision upon review shall be made not later than sixty (60) days after the
Committee’s receipt of a request for a review, unless special circumstances
require an extension of time for processing and the Participant is informed of
the need for the extension within the initial sixty (60) day period. When an
extension is necessary, a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of the request for review. If notice of
the decision on the review is not furnished in accordance with this
Section 8.5(d), the claim shall be deemed denied and the Participant shall be
permitted to exercise his right to a legal remedy.

 

8.6                               Hold Harmless. To the maximum extent permitted
by law, no member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on such member’s behalf
in such member’s capacity as a member of the Committee nor for any mistake of
judgment made in good faith, and the Company shall indemnify and hold harmless,
directly from its own assets (including the proceeds of any insurance policy the
premiums of which are paid from the Company’s own assets), each member of the
Committee and each other officer, Employee, or

 

12

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director of the Company or an Affiliate to whom any duty or power relating to
the administration or interpretation of the Plan against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan unless arising out of such person’s own fraud or
bad faith.

 

8.7                               Service of Process. The Secretary of the
Company or such other person designated by the Board shall be the agent for
service of process under the Plan.

 

ARTICLE 9
DESIGNATION OF BENEFICIARIES

 

9.1                               Beneficiary Designation. Every Participant
shall file with the Committee a designation in such form (electronic or
otherwise) as approved and provided by the Plan Administrator of one or more
persons as the Beneficiary who shall be entitled to receive the benefits, if
any, payable under the Plan after the Participant’s death. A Participant
may from time to time revoke or change such Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the Committee.
The last such designation received by the Committee shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall
be effective unless received by the Committee prior to the Participant’s death,
and in no event shall it be effective as of any date prior to such receipt. All
decisions of the Committee concerning the effectiveness of any Beneficiary
designation, and the identity of any Beneficiary, shall be final. If a
Beneficiary shall die after the death of the Participant and prior to receiving
the payment(s) that would have been made to such Beneficiary had such
Beneficiary’s death not occurred, then for the purposes of the Plan the
payment(s) that would have been received by such Beneficiary shall be made to
the Beneficiary’s estate.

 

9.2                               Failure to Designate Beneficiary. If no
Beneficiary designation is in effect at the time of a Participant’s death, the
benefits, if any, payable under the Plan after the Participant’s death shall be
made to the Participant’s estate. If the Committee is in doubt as to the right
of any person to receive such benefits, the Committee may direct the
Participating Company to withhold payment, without liability for any accruals
thereon, until the rights thereto are determined, or the Committee may direct
the Participating Company to pay any such amount into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the liability of
the Participating Company therefor.

 

ARTICLE 10
WITHDRAWAL OF PARTICIPATING COMPANY

 

10.1                        Withdrawal of Participating Company. A Participating
Company (other than the Company) may withdraw from participation in the Plan by
giving the Board prior written notice approved by resolution by its board of
directors or similar governing body specifying a withdrawal date, which shall be
the last day of a month at least 30 days subsequent to the date which notice is
received by the Board. The Participating Company shall withdraw from
participating in the Plan if and when it ceases to be either a division of the
Company or an Affiliate. The Board may require the Participating Company to
withdraw from the Plan, as of any withdrawal date the Board specifies.

 

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10.2                        Effect of Withdrawal. A Participating Company’s
withdrawal from the Plan shall not in any way modify, reduce, or otherwise
affect the Participating Company’s obligations incurred before the withdrawal,
as such obligations are defined under the provisions of the Plan existing
immediately before the withdrawal. Withdrawal from the Plan by any Participating
Company shall not in any way affect any other Participating Company’s
participation in the Plan.

 

ARTICLE 11
AMENDMENT OR TERMINATION OF THE PLAN

 

11.1                        Right to Amend or Terminate the Plan

 

(a)                                  The Board reserves the right at any time to
amend or terminate the Plan by corporate resolution, in whole or in part, and
for any reason and without the consent of any Participating Company,
Participant, or Beneficiary. In addition, the Board may amend the Plan
retroactively to the extent required to qualify the Plan under Section 409A of
the Code, provided that no such amendment may reduce any Participant’s Account.
Each Participating Company by its participation in the Plan shall be deemed to
have delegated this authority to the Board.

 

(b)                                  The Committee may adopt any ministerial and
nonsubstantive amendment which may be necessary or appropriate to facilitate the
administration, management, and interpretation of the Plan, provided the
amendment does not materially affect the currently estimated cost to the
Participating Companies of maintaining the Plan. Each Participating Company by
its participation in the Plan shall be deemed to have delegated this authority
to the Committee.

 

(c)                                  In no event shall an amendment or
termination modify, reduce, or otherwise affect the Participating Company’s
obligations under the Plan made before the amendment or termination, as such
obligations are defined under the provisions of the Plan and the trust existing
immediately before such amendment or termination.

 

11.2                        Notice. Notice of any amendment or termination of
the Plan shall be given by the Board or the Committee, whichever adopts the
amendment, to the other and all Participating Companies.

 

ARTICLE 12
GENERAL PROVISIONS AND LIMITATIONS

 

12.1                        No Right to Continued Employment. Nothing contained
in the Plan shall give any Employee the right to be retained in the employment
of the Participating Company or Affiliate or affect the right of any such
employer to dismiss any Employee. The adoption and maintenance of the Plan shall
not constitute a contract between any Participating Company and Employee or
consideration for, or an inducement to or condition of, the employment of any
Employee.

 

12.2                        Payment on Behalf of Payee. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for such person’s affairs because of illness or accident, or is a minor, or
had died, then any payment due such person or

 

14

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such person’s estate (unless a prior claim therefor has been made by a duly
appointed legal representative) may, if the Committee so elects, be paid to such
person’s spouse, a child, a relative, an institute maintaining or having custody
of such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Plan and the
Participating Company therefor.

 

12.3                        Nonalienation. No interest, expectancy, benefit,
payment, claim, or right of any Participant or Beneficiary under the Plan shall
be (a) subject in any manner to any claims of any creditor of the Participant or
Beneficiary; (b) subject to the debts, contracts, liabilities or torts of the
Participant or Beneficiary; or (c) subject to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of
any kind. If any person shall attempt to take any action contrary to this
Section, such action shall be null and void and of no effect, and the Committee
and the Participating Company shall disregard such action and shall not in any
manner be bound thereby and shall suffer no liability on account of its
disregard thereof. If the Participant, Beneficiary, or any other beneficiary
hereunder shall become bankrupt or attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge any right hereunder, then such right or
benefit shall, in the discretion of the Committee, cease and terminate, and in
such event the Committee may hold or apply the same or any part thereof for the
benefit of the Participant or Beneficiary or the spouse, children, or other
dependents of the Participant or Beneficiary, or any of them, in such manner and
in such amounts and proportions as the Committee may deem proper.

 

12.4                        Missing Payee. If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due under the Plan, and if, after
five years from the date such payment is due, a notice of such payment due is
mailed to the last known address of such person, as shown on the records of the
Committee or the Participating Company, and within three months after such
mailing such person has not made written claim therefor, the Committee, if it so
elects, after receiving advice from counsel to the Plan, may direct that such
payment and all remaining payments otherwise due to such person be canceled on
the records of the Plan and the amount thereof forfeited, and upon such
cancellation, the Participating Company shall have no further liability
therefor, except that, in the event such person later notifies the Committee of
such person’s whereabouts and requests the payment or payments due to such
person under the Plan, the amounts otherwise due but unpaid as of the date
payment would have been made shall be paid to such person without accruals due
to late payment.

 

12.5                        Required Information. Each Participant shall file
with the Committee such pertinent information concerning himself or herself,
such Participant’s Beneficiary, or such other person as the Committee
may specify, and no Participant, Beneficiary, or other person shall have any
rights or be entitled to any benefits under the Plan unless such information is
filed by or with respect to the Participant.

 

12.6                        Binding Effect. Obligations incurred by the
Participating Company pursuant to this Plan shall be binding upon and inure to
the benefit of the Participating Company, its successors and assigns, and the
Participant and the Participant’s Beneficiary.

 

12.7                        Merger or Consolidation. In the event of a merger or
consolidation by the Participating Company with another corporation, or the
acquisition of substantially all of the assets or outstanding stock of the
Participating Company by another corporation, then and in such

 

15

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event the obligations and responsibilities of the Participating Company under
this Plan shall be assumed by any such successor or acquiring corporation, and
all of the rights, privileges, and benefits of the Participants and
Beneficiaries hereunder shall continue.

 

12.8                        Trust. Notwithstanding anything to the contrary in
the Plan, the Company may establish a grantor trust, which may be an irrevocable
“rabbi trust,” to assist it and other Participating Companies in funding Plan
obligations, and any payments made to a Participant or Beneficiary from such
trust shall relieve the Participating Company from any further obligations under
the Plan only to the extent of such payment. The trust shall be a domestic trust
maintained in the United States, The Company shall pay all management and other
fees associated with the administration of the trust established pursuant to
this Section. Notwithstanding any other provisions of the Plan, the assets of
the trust shall remain the property of the Company, and shall be subject to the
claims of creditors in the event of bankruptcy or insolvency, as provided in the
trust agreement.

 

12.9                        Electronic Communication. Whenever any action or
communication is required to be made in writing under the terms of the Plan,
such action or communication may be made via electronic means in such form as
approved by the Plan Administrator.

 

12.10                 Entire Plan. This document and any written amendments
hereto, the Deferral elections, and the Beneficiary designations contain all the
terms and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.

 

The foregoing is hereby acknowledged as being the Mirant Corporation Deferred
Compensation Plan as adopted by the Board of Directors on January 12, 2006.

 

 

 

MIRANT CORPORATION

 

 

 

 

 

By:

/s/ Vance N. Booker

 

 

 

 Vance N. Booker

 

 

 SVP Administration

 

 

Attest:

 

 

 

By:

/s/ Beth Chandler

 

 

 

 Beth Chandler

 

 

 Vice President and

 

 

 Corporate Secretary

 

 

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