Audit Committee Charter

I. Purpose

The Committee will assist the Board in the oversight of: financial statements, financial and accounting processes, legal and regulatory requirements, proposed changes in accounting policies, appointing/ terminating/ assessing qualifications of independent accounting firm, and effectiveness of the independent public accountants and any internal audit activities (as applicable).

II. Composition

1. The committee will consist of at least two Directors who will serve one year terms.
2. Each member of the Audit Committee shall be appointed by the Board of Directors, be a member of the Board in good standing, and shall meet the NASDAQ standards for independence of Audit Committee members. The Board will appoint a Chairperson of the Committee.
3. Former employees of the Company may not serve on the Committee.
4. At least one member of the Audit Committee shall be designated as a financial expert and other member(s) will be financially literate, or must become so within a reasonable amount of time after being appointed to the Committee.
5. The members of the Committee may not be removed prior to the end of their term unless recommended by majority vote of the Board of Directors.
6. The Company will provide the Committee with support staff and other resources necessary to facilitate their meetings and to fulfill their oversight responsibilities.
7. Committee members will not accept any consulting or other fees from the Company, other than the agreed upon fees for service as a director/member of the Committee.

III. Meetings

1. The Committee shall meet at least four times per year, or more frequently as circumstances may require. The Committee may ask members of management or others to attend the meetings and provide pertinent information as necessary.
2. The Committee chairperson will preside over the meetings and will provide an oral report to the Board on each meeting. Minutes of each meeting will be recorded.
3. The Committee will conduct executive sessions with the outside auditors, CEO (chief executive officer), CFO (chief financial officer) and anyone else as desired by the committee (e.g., general counsel, outside counsel, controller).

IV. Responsibilities and Duties

1. Independent Auditors
1. Appoint independent auditors to be engaged by the Company, establish the audit fees of the independent auditors, pre-approve any non-audit services with fees exceeding $10,000.00, provided by the independent auditors, including tax services, before the services are rendered.
   1. The Company may enlist the independent auditors without advance approval of the committee for services under $2,500.00. The Company is required to notify the committee of these cases at the next audit committee meeting.
   2. The audit committee chairperson has the authority to approve arrangements with the independent auditors for which fees fall between $2,500.00 and $10,000.00.
2. Review with the independent auditors and the controller of the Company the audit scope and plan of the independent auditors.
3. Review and evaluate the performance of the independent auditors and review with the full board of directors any proposed discharge of the independent auditors.
4. Evaluate the effectiveness and ongoing adequacy of the independent auditors.
5. Consider, with management, the rationale for employing audit firms other than the principal independent auditors.
6. Ensure annual receipt from the independent auditors of a formal written statement delineating all relationships between the auditors and the Company, and discuss with the auditors any such disclosed relationships.
2. Evaluation of Results
1. Inquire of management and the independent auditors about significant risks or exposures facing the Company; assess the steps management has taken or proposes to take to minimize such risks to the Company; and periodically review compliance with such steps.
2. Review with management and the independent auditors
1. The Company’s annual financial statements and related footnotes.
2. The independent auditors’ audit of the financial statements and their report thereon.
3. The independent auditors’ judgments about the quality, not just the acceptability, of the Company’s accounting principles as applied in its financial reporting.
4. All critical accounting policies and practices used by the Company.
5. All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management of the Company, the ramifications of each alternative and the treatment preferred by the Company.
6. Any significant changes required in the independent auditors’ audit plan.
7. Matters required to be discussed by Statement on Auditing Standards (SAS) No. 61, Communication With Audit Committees (AICPA, Professional Standards, vol. 1, AU sec. 380), as amended, related to the conduct of the audit.
3. Review and resolve any serious difficulties or disputes between management and the independent auditors which arose during the audit.
4. Inquire of the CEO and CFO regarding the “quality of earnings” of the Company from a subjective as well as an objective standpoint.
5. Review with the independent auditors:
   1. The adequacy of the Company’s internal controls including computerized information system controls and security.
   2. Any related significant findings and recommendations of the independent auditors together with management’s responses thereto.
6. Review with management and the independent auditor the effect of any regulatory and accounting initiatives, as well as off-balance-sheet structures, if any.
7. Review all material written communications between the independent auditors and management, such as any management letter or schedule of unadjusted differences.
8. Review with the general counsel legal and regulatory matters that, in the opinion of management, may have a material impact on the financial statements, related Company compliance policies, and programs and reports received from regulators.
9. Periodically review the Company’s Code of Ethics to ensure that it is adequate and up-to-date.
10. Review with the Company’s general counsel (or other responsible party) the results of their review of the monitoring of compliance with the Company’s Code of Ethics.
11. The Audit Committee will review its effectiveness annually.
12. Review the Committee’s charter annually, reassess the adequacy of this charter and recommend any proposed changes to the board of directors.
3. Complaints and Concerns
1. Develop and oversee procedures for the receipt, retention, and handling of complaints regarding accounting, internal controls, and auditing matters, and the confidential submission of employee concerns.

Chair of the Audit Committee
Paul Sobel
Vice President – Internal Audit
Mirant Corporation
1155 Perimeter Circle West
Atlanta, Georgia 30338
Tel: +1.678.579.5042
E-mail: paul.sobel@mirant.com