Exhibit 10.1

 

 

MIRANT CORPORATION
STOCK OPTION AWARD AGREEMENT

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This Stock Option Award (this “Award”) is made as of January 13, 2006, by MIRANT
CORPORATION, a US corporation, (the “Company”) to [EXECUTIVENAME] (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company entered into an employment agreement with Executive, dated
as of [DATE] (the “Agreement”) providing for the grant to Executive of options
to purchase the common stock (“Common Stock”) of the Company (“Stock Options”)
upon the Company’s emergence from bankruptcy protection; and

 

WHEREAS, pursuant to the terms of the Agreement, the Compensation Committee of
the Board of Directors of the Company (the “Board”) has granted to Executive an
award of Stock Options to promote Executive’s long-term interests in the success
of the Company;

 

NOW THEREFORE, the Company awards Stock Options to Executive pursuant to the
following terms and conditions:

 

1.             Stock Option Award.  Subject to the terms and conditions
contained herein and in the Agreement, the Company hereby grants to the
Executive under the Mirant Corporation 2005 Omnibus Incentive Compensation Plan
(the “Plan”) an award of [NUMBER OF OPTIONS] Stock Options, at an exercise price
of [FMV STOCK PRICE] (the “Exercise Price”).  The Stock Options are not intended
to qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended.  Each such Stock Option shall entitle Executive to
purchase, upon payment of the Exercise Price, one share of Common Stock. 
Capitalized terms used, but not otherwise defined, shall have the meaning set
forth in the Plan and the Agreement.

 

2.             Vesting.  Except as provided in Section 5 below, the Stock
Options shall vest and become transferable as follows:

 

a.     [VEST PERCENTAGE 1] of the Stock Options shall vest on [VEST DATE 1];

 

a.     [VEST PERCENTAGE 2] of the Stock Options shall vest on [VEST DATE 2];

 

b.     [VEST PERCENTAGE 3] of the Stock Options shall vest on [VEST DATE 3];

 

c.     [VEST PERCENTAGE 5] of the Stock Options shall vest on [VEST DATE 4].

 

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3.             Term.  The Stock Options shall expire on the earlier of 10 years
from the date of grant or the date specified for termination of such Stock
Options, as provided in Section 5(c).

 

4.             Exercise, Payment and Other Conditions.  The Stock Options may be
exercised in whole or in part to the extent vested.  The Executive may exercise
the Stock Options by delivery to the Company of written notice providing: 
(i) the name of Executive; (ii) the address to which Common Stock certificates
are to be mailed; and (iii) the number of shares of Common Stock subject to the
Stock Options to be exercised.  Prior to the delivery to Executive of any stock
certificates, the Executive shall have paid to the Company the Exercise Price of
all shares of Common Stock purchased pursuant to such exercise of the Stock
Options as provided in this Award.  Payment of the exercise price shall be in
(a) cash, (b) shares of Common Stock previously acquired by Executive, which
have been held by Executive for such period of time, if any, as necessary to
avoid the recognition of an expense under generally accepted accounting
principles as a result of the exercise of the Stock Options, (c) withholding of
shares subject to the Stock Option, but only if such withholding would not
result in the recognition of an expense under generally accepted accounting
principles as a result of the exercise of the Stock Options, or (d) any
combination thereof.  The value of shares surrendered or withheld for this
purpose shall be the Fair Market Value as of the last trading day immediately
prior to the exercise date.  To the extent permitted under Regulation T of the
Federal Reserve Board, and subject to applicable securities laws and any
limitations as may be applied from time to time by the Committee (which need not
be uniform), the Stock Options may be exercised through a broker in a so-called
“cashless exercise” whereby the broker sells shares on behalf of Executive and
delivers cash sales proceeds to the Company in payment of the exercise price.

 

The Stock Options shall be considered exercised on the date the notice and
payment are received by the Chairman of the Compensation Committee of the Board
(“Compensation Committee”).  As promptly as practicable after receipt of such
notice and payment, the Company shall deliver to Executive a certificate or
certificates for the number of shares of Common Stock with respect to which the
Stock Options have been so exercised, issued in Executive’s name.  Such delivery
shall be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificate or certificates in the United
States mail, addressed to Executive, at the address specified in the notice.

 

5.             Change in Employment Status.

 

a.             Termination Without Cause, Non-Renewal, for Good Reason, Death or
Disability.  In the event of Executive’s termination of employment with the
Company (regardless of whether such termination is in connection with a Change
in Control (as defined in the Agreement)) (i) by the Company without Cause (as
defined in the Agreement)), (ii) by reason of the failure of the Company to
offer to renew the Agreement (as provided in the Agreement), (iii) by Executive
for Good Reason (as defined in the Agreement) or (iv) as a result of Executive’s
death or Disability (as defined in the Agreement), all Stock Options that have
not already vested, as of the date of such termination shall vest immediately
and become nonforfeitable.

 

b.             Termination for Cause, Voluntary Resignation Without Good
Reason.  In the event that of Executive’s termination of employment with the
Company (i) by the Company for Cause or (ii) by reason of Executive’s
resignation from the Company for any

 

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reason other than Good Reason, all Stock Options that have not already vested as
of the date of such termination shall be immediately forfeited by Executive and
Executive shall have no further right or interest therein.

 

c.             Post-Termination Exercise. Upon termination of Executive’s
employment as described in subsection (b) above, Executive shall have thirty (30
days from the date of termination to exercise any vested Stock Options, subject
to earlier expiration of the Stock Option as provided in Section 3.  Upon
termination of Executive’s employment for any reason other than that described
in subsection (b) above, Executive shall have one year from the date of
termination to exercise any Stock Options that are vested or become vested as of
the date of Executive’s termination of employment, subject to earlier expiration
of the Stock Option as provided in Section 3.

 

6.             Stockholder Rights.  Executive shall not have any of the rights
of a stockholder with respect to the Stock Options, including the right to vote
the Common Stock that will be issued upon the exercise of the Stock Options or
to receive dividends or other distributions paid or made available with respect
to Common Stock of the Company, unless and until such Stock Options are
exercised and shares of Common Stock are issued to Executive.

 

7.             Withholding.  Executive shall pay all applicable federal, state
and local income and employment taxes (including taxes of any foreign
jurisdiction), which the Company is required to withhold at any time with
respect to the Stock Options.  Such payment shall be made in full, at
Executive’s election, in cash or check, by withholding from Executive’s next
normal payroll check, or by the tender of shares of Common Stock previously
owned by Executive.  Shares tendered as payment of required withholding shall be
valued at the closing price per share of Common Stock on the date such
withholding obligation arises.  Without limiting the foregoing, Executive may
elect that any such withholding requirement be satisfied, in whole or in part,
by having the Company withhold from the shares to be issued upon exercise of the
Stock Options a number of shares of Common Stock having a Fair Market Value on
the date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Company establishes.

 

8.             Transferability.  Except as otherwise provided in this Section 8,
the Stock Options shall not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner, whether by the operation of law or
otherwise.  The Committee may, in its sole discretion, permit Executive to
transfer the Stock Options, in whole or in part, to a spouse or lineal
descendant (a “Family Member”), a trust for the exclusive benefit of Executive
and/or Family Members, a partnership or other entity in which all the beneficial
owners are Executive and/or Family Members, or any other entity affiliated with
Executive that may be approved by the Compensation Committee (a “Permitted
Transferee”).  Subsequent transfers of the Stock Options shall be prohibited
except in accordance with this Section 8.  All terms and conditions of the Stock
Options, including provisions relating to the termination of Executive’s
employment with the Company, shall continue to apply following a transfer made
in accordance with this Section 8.  Any attempted transfer of the Stock Options
prohibited by this Section 8 shall be null and void.

 

9.             Adjustments.  In the event that the outstanding shares of Common
Stock are subject to a stock split or changed into or exchanged for a different
number or kind of shares or other securities of the Company or other corporation
by reason of a merger, consolidation, reorganization, recapitalization,
reclassification, combination of

 

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shares or a dividend payable in capital stock, or a similar corporate structural
change, then the rights of the Executive shall be appropriately adjusted as to
the number of shares of Common Stock subject to the Stock Options and/or as to
the Exercise Price.  The granting of the Stock Options pursuant to this Award
shall not affect in any way the right or power of the Company to make
adjustments, reorganizations, reclassifications, or changes of its capital or
business structure or to merge, consolidate, dissolve, liquidate, or sell or
transfer all or any part of its business or assets.

 

10.           Change in Control.  Subject to the provisions of Section 5 of this
Award, the Compensation Committee, in its sole discretion, may at any time prior
to, coincident with or after the time of a Change in Control:

 

(i)            provide for the acceleration of any vesting conditions relating
to the exercise of the Stock Option or that the Stock Option may be exercised in
full on or before a date fixed by the Committee;

 

(ii)           provide for the purchase of the Stock Option, upon Executive’s
request, for an amount of cash equal to the amount, as determined by the
Compensation Committee in its sole discretion, which could have been realized
upon the exercise of the Stock Options had the option been currently
exercisable; or

 

(iii)          cause the Stock Options then to be assumed, or new rights
substituted therefore, by the surviving corporation in such Change in Control.

 

Any such actions shall be authorized by the Compensation Committee, whose
determination as to what actions shall be taken and the extent thereof, shall be
final.

 

11.           Agreement Provisions.  In addition to the terms and conditions set
forth herein, this Award is subject to and governed by the terms and conditions
set forth in the Agreement and in the Plan, which are incorporated herein by
reference.  In the event of any conflict between the provisions of this Award or
the Plan and the Agreement, the Agreement shall control.

 

12.           Notice.  Any written notice required or permitted by this Award
shall be mailed, certified mail (return receipt requested) or hand-delivered,
addressed to Company’s Senior Vice President – Administration at Company’s North
American headquarters at 1155 Perimeter Center West, Atlanta, Georgia 30338 and
to Executive at his most recent home address on record with the Company, with a
copy to [NAME AND ADDRESS].  Notices are effective upon receipt.

 

13.           Miscellaneous.

 

(a)           Limitation of Rights.  The granting of this Award shall not give
Executive any rights to similar grants in future years or any right to be
retained in the employ or service of the Company or its subsidiary or interfere
in any way with the right of the Company or any such subsidiary to terminate
Executive’s services at any time, or the right of Executive to terminate his
services at any time.

 

(b)           Severability.  If any term, provision, covenant or restriction
contained in this Award is held by a court or a federal regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions contained in this Award shall
remain in full force and effect, and shall in no way be affected, impaired or
invalidated.

 

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(c)           Controlling Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Award shall be
governed by, and construed in accordance with, the laws of the State of Georgia.

 

(d)           Arbitration.  Any dispute or controversy arising under or in
connection with the Agreement or this Award or otherwise in connection with the
Executive’s employment by the Company that cannot be mutually resolved by the
parties to the Agreement or this Award and their respective advisors and
representatives shall be settled exclusively by arbitration in Atlanta, Georgia
in accordance with the rules of the American Arbitration Association before one
arbitrator of exemplary qualifications and stature, who shall be selected
jointly by an individual to be designated by the Company and an individual to be
selected by Executive, or if such two individuals cannot agree on the selection
of the arbitrator, who shall be selected by the American Arbitration
Association.  The Company shall reimburse Executive’s reasonable legal fees if
he prevails on a material issue in an arbitration.

 

(e)           Construction.  This Award contains the entire understanding
between the parties and supersedes any prior understanding and agreements
between them representing the subject matter hereof, except that this Award
shall be subject to the terms and conditions set forth in the Agreement.  There
are no other representations, agreements, arrangements or understandings, oral
or written, between and among the parties hereto relating to the subject matter
hereof which are not fully expressed herein.

 

(f)            Headings.  Section and other headings contained in this Award are
for reference purposes only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Award or any provision
hereof.

 

IN WITNESS WHEREOF, the undersigned Chairman and Chief Executive Officer
executes this Award on behalf of the Company as of the day and year first set
forth above.

 

 

MIRANT CORPORATION

 

 

 

 

 

By:

 

Its: Chairman and Chief Executive Officer

 

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