Exhibit 10.38
Amendment Number Two to
Employment Agreement
Between Mirant Corporation and
Thomas Legro
This Amendment is made as of
July 17, 2007 between Mirant Corporation (the
“Company”), Mirant Services, LLC
(“Services”) and Thomas E. Legro
(“Executive”).
Whereas, the Company, Services and
Executive desire to amend the Employment Agreement between the
Company, Services and Executive dated as of December 1, 2005,
as amended as of October 31, 2006 (the “Employment
Agreement”) to comply with requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”);
In consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, Services and Executive agree to amend
the Employment Agreement as follows:
1. Section 3(b) of the
Employment Agreement is amended by adding the following sentence to
the end of such section:
The amount of reasonable business
expenses eligible for reimbursement in any taxable year of
Executive shall not affect the amount of reasonable business
expenses eligible for reimbursement in any other taxable year of
Executive.
2. Sections 5(a) through 5(g) of
the Employment Agreement are deleted and the provisions below are
substituted for such sections of the Employment
Agreement:
5. Severance
.
(a) Termination Without Cause,
Non-Renewal or for Good Reason . In the event of
Executive’s termination of employment with the Company
(1) by the Company without Cause (as defined herein),
(2) by reason of the failure of the Company to offer to renew
the Agreement on terms and conditions at least equal to the terms
and conditions set forth in the Employment Agreement executed on
December 1, 2005, which shall be deemed to include a Base
Salary and Target Bonus at least equal to the Executive’s
Base Salary and Target Bonus at such time, or (3) by Executive
for Good Reason (as defined herein), subject to execution of a
Release substantially in the form attached as Exhibit D within
30 days following Executive’s termination of employment with
the Company, Executive shall be entitled to the benefits set forth
below in this Section 5(a).
(i) The Company shall pay
Executive an amount equal to the sum of (A) 1.0 times
Executive’s Base Salary, plus (B) 1.0 times
Executive’s Target Bonus (as in effect on the date of
Executive’s termination), plus (C) 1.0 times the
Company’s annual cost for life insurance and long-term
disability
insurance provided to Executive
immediately prior to his termination of employment (calculated by
multiplying the monthly cost for such coverage at the time of
Executive’s termination of employment by 12), plus
(D) 1.0 times the sum of (1) the annual matching
contribution which Executive received under the Employee Savings
Plan and Supplemental Benefit Plan for the year immediately
preceding the year in which Executive’s employment with the
Company terminates, plus (2) the fixed profit sharing and
discretionary profit sharing contributions which Executive received
under the Employee Savings Plan and Supplemental Benefit Plan for
the year immediately preceding the year in which Executive’s
employment with the Company terminates. The severance amount
described in the previous sentence shall be paid in a lump sum on
the date that is six months and one day after Executive experiences
a “separation from service” (within the meaning of
Section 409A(a)(2)(A)(i) of the Code) with the
Company.
(ii) The Executive LTIP shall
be governed by the terms of the applicable LTIP Award
Agreements.
(iii) The Company shall pay
Executive the amounts described in Section 5(e) within 14 days
after the date of termination of Executive’s employment. In
addition, the Company shall pay Executive a pro rata portion of
Executive’s Target Bonus for the fiscal year in which
Executive’s termination of employment occurs, based on the
number of days in such fiscal year during which Executive was
employed. The pro rata bonus payment described in the previous
sentence shall be paid in a lump sum on the date that is six months
and one day after Executive experiences a “separation from
service” with the Company.
(iv) During the period of 12
months following Executive’s termination of employment in
accordance with Section 5(a), the Company shall provide to
Executive continued coverage under the medical, dental and other
group health benefits and plans in effect for senior executives of
the Company, as in effect on the date of Executive’s
termination of employment (or substantially comparable coverage)
for Executive and, where applicable, Executive’s spouse,
dependents and beneficiaries, at the same contribution or premium
rate as may be charged from time to time to senior executives of
the Company generally, as if Executive had continued in employment
during such period.
(v) The Company shall provide a
release substantially in the form attached hereto as
Exhibit G. If the Company does not provide the release
required pursuant to this subsection (v), the Release by the
Executive shall be null, void and without effect, and Executive
shall still receive all of the payments and benefits described in
subsections (i) through (iv) above.
(b) Termination for Cause or
Voluntary Resignation . In the event that
Executive’s employment with the Company is terminated
(i) by the Board for Cause or (ii) by Executive’s
resignation from the Company for any reason other than Good Reason
or Disability (as defined herein), subject to applicable law, the
Company agrees to the following:
(i) The Executive LTIP shall be
governed by the terms of the applicable LTIP Award
Agreements.
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(ii) The Company shall pay Executive
the amounts described in Section 5(e) within 14 days after the
date of termination of Executive’s employment.
For purposes of this Agreement,
Executive’s retirement shall be considered Executive’s
resignation from the Company without Good Reason.
(c) Death . In the event
that Executive’s employment with the Company is terminated as
a result of Executive’s death, the Company agrees to the
following:
(i) The Company shall pay
Executive’s estate a lump sum amount equal to his target
Annual Bonus for the year of termination prorated for the number of
days during such year that Executive was employed by the Company.
Such payment shall be made 30 days after termination of
Executive’s employment as a result of Executive’s death
or, if such day is not a business day, on the first business day of
the Company which is at least 30 days after Executive’s
death.
(ii) The Executive LTIP shall be
governed by the terms of the applicable LTIP Award
Agreements.
(iii) The Company shall pay
Executive’s estate the amounts described in Section 5(e)
within 14 days after the date of Executive’s
death.
(d) Disability . In the
event that Executive’s employment with the Company is
terminated as a result of Executive’s Disability, the Company
agrees to the following:
(i) The Company shall pay
Executive (or his legal re
