Exhibit 10.13

 

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PERFORMANCE STOCK UNIT AWARD AGREEMENT

PURSUANT TO

THE AES CORPORATION 2003 LONG TERM COMPENSATION PLAN

The AES Corporation, a Delaware corporation (the “Company”), grants to the
Employee named below, pursuant to The AES Corporation 2003 Long Term
Compensation Plan, as amended (the “Plan”), and this 2013 Performance Stock Unit
Award Agreement (this “Agreement”), this Award of Performance Stock Units
(“PSUs”) upon the terms and conditions set forth herein. Capitalized terms not
otherwise defined herein will each have the meaning assigned to them in the
Plan.

 

1. This Award of PSUs is subject to all terms and conditions of this Agreement
and the Plan, the terms of which are incorporated herein by reference:

 

Name of Employee:               Fidelity System ID:               Grant Date:  
            Grant Price:               Total Number of PSUs Granted:    

 

2. Each PSU represents a right to receive one Share on the Payment Date (as
defined below) in accordance with the terms of this Agreement.

 

3. Unless otherwise determined by the Committee, each PSU shall also represent a
right to receive an additional amount, payable in cash, equal to the accumulated
cash dividends paid by the Company on the PSU between the Grant Date and payout
of the PSU (if any). The additional dividend amounts that are accumulated
subject to a PSU will be subject to the same terms and conditions (including,
without limitation, any applicable vesting requirements and forfeiture
provisions) as the PSU to which they relate under the Award. Any payment due to
the Employee under this Agreement shall be made promptly following the date
vested PSUs become earned and payable under paragraph 5(a), paragraph 6 or
paragraph 7 of this Agreement, as applicable (the “Payment Date”), but in no
event later than March 15th of the calendar year following the calendar year
containing the Payment Date.

 

4. A PSU (i) carries no voting rights and (ii) the holder will not have an
equity interest in the Company or any of such shareholder rights, unless the
vesting and performance conditions of the PSU are met and the PSU is paid out.

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5. This Award of PSUs will vest, in accordance with and subject to the terms of
this Agreement, in three equal installments on December 31, 2013, December 31,
2014,and December 31, 2015 (each a “Vesting Date”), provided, however, that if:

 

  (a) the Employee Separates from Service prior to the end of the Performance
Period by reason of the Employee’s death or a Separation from Service on account
of Disability, all PSUs that have not previously vested shall vest and the
Employee’s PSUs referenced in the chart above shall be paid to the Employee at
the rate of one Share for each PSU;

 

  (b) if (i) the Employee Separates from Service prior to the Payment Date by
reason of a Separation from Service by the Company for cause (as determined by
the Committee in its sole discretion) or (ii) the Employee Separates from
Service prior to the final Vesting Date by reason of a voluntary Separation from
Service by the Employee (including any retirement other than a Qualified
Retirement (as defined below)), this Award of PSUs (including any vested
portion) shall immediately upon such termination be cancelled and forfeited
without payment or further obligation by the Company; and

 

  (c) if the Employee Separates from Service for any other reason, including,
but not limited to, on account of a Qualified Retirement, by reason of a death
or Disability subsequent to the end of the Performance Period, or by reason of a
Separation from Service by the Company without cause (other than for cause,
voluntarily by the Employee not as part of a Qualified Retirement or by reason
of death or Disability as provided in paragraphs 5(a) and 5(b)), the Employee
will be eligible to receive the value of his or her vested PSUs on the Payment
Date in accordance with and subject to the terms set forth in paragraph 6 below.
Any PSUs that have not vested prior to the date that an Employee Separates from
Service for any reason (other than by reason of death or Disability), (i) will
not subsequently vest; and (ii) will be immediately cancelled and forfeited
without payment or further obligation by the Company or any Affiliate. In
addition, the Employee’s right to receive Shares in respect of vested PSUs that
have not been forfeited will be paid on the Payment Date if, and only if, all
relevant performance conditions are met, in accordance with the terms and
conditions of this Agreement and the Plan. For purposes of this Agreement,
“Qualified Retirement” means the Employee’s retirement at a time when such
Employee is at least 60 years of age and has had at least seven years of service
as an employee of the Company and/or one or more of its Affiliates.

 

6. The Company will issue and deliver Shares in satisfaction of vested PSUs
subject to and conditioned upon the attainment of the performance conditions set
forth below, as approved by the Committee at the time of grant; provided,
however, notwithstanding the performance level achieved, the Committee may
reduce the number of PSUs earned or terminate this Award of PSUs altogether, but
in no event may the Committee increase the value of a PSU underlying this Award
beyond the performance levels achieved. For purposes of this Agreement, the
“Performance Period” is the period beginning on January 1, 2012 and ending on
December 31, 2014.

 

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  (i) Total Shareholder Return (50% weighted)

The value of fifty percent (50%) of the Employee’s vested PSUs will depend upon
the performance of the Total Shareholder Return on AES common stock (“AES-TSR”)
against the Total Shareholder Return on the S&P 500 Utilities Sector Index (“S&P
Utilities Index—TSR”), in each case, as measured over the Performance Period, as
set forth below:

 

ACTUAL AES-TSR COMPARED TO

S&P Utilities Index—TSR FOR THE

PERFORMANCE PERIOD

  

SHARES EARNED

Below 30th Percentile    None (0%) Equal to the 30th Percentile   

50%

(0.5 x 50% of number of vested PSUs)

Equal to the 50th Percentile   

100%

(1.0 x 50% of number of vested PSUs)

Equal to or greater than 70th

Percentile

  

150%

(1.5 x 50% of number of vested PSUs)

Equal to or greater than 90th

Percentile

  

200%

(2.0 x 50% of number of vested PSUs)

For AES-TSR levels achieved greater than the 30th percentile and less than the
50th percentile, greater than 50th percentile and less than 70th percentile, and
greater than the 70th percentile and less than the 90th percentile, the number
of Shares eligible for vesting will be determined based on straight-line
interpolation. The maximum value of a PSU is 2 Shares.

All PSUs subject to this paragraph 6(i) shall be forfeited and will cease to be
outstanding as of the end of the Performance Period if the AES-TSR over the
Performance Period is below the 30th percentile of the S&P Utilities Index -TSR.

 

  (ii) Adjusted EBITDA1 (50% weighted)

The value of the remaining fifty percent (50%) of the Employee’s vested PSUs
will depend upon the Company’s actual Adjusted EBITDA1 over the Performance
Period as compared to the performance target, as set forth below.

 

ACTUAL ADJUSTED EBITDA OVER THE

PERFORMANCE PERIOD

  

SHARES EARNED

Below 75% of Performance Target =    None (0%) Equal to 87.5% of Performance
Target =   

50%

(0.5 x 50% of number of vested PSUs)

Equal to 100% of Performance Target =   

100%

(1.0 x 50% of number of vested PSUs)

Equal to or greater than 125% of

Performance Target =

  

200%

(2.0 x 50% of number of vested PSUs)

 

 

1  Proportional-Adjusted EBITDA (defined as Earnings Before Income Taxes,
Depreciation and Amortization); Addback: Interest; Subtract: Mandatory CapEx
(defined as Maintenance & Environmental Capital Expenditures, excluding
Environmental Capital Expenditures with Tracker Returns).

 

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All PSUs subject to this paragraph 6(ii) shall be forfeited and will cease to be
outstanding as of the end of the Performance Period if the Adjusted EBITDA for
the Performance Period is below 75% of the Performance Target.

For Adjusted EBITDA levels achieved greater than 75% and less than 87.5% of
performance target, greater than 87.5% and less than 100% of performance target,
and greater than 100% and less than 125% of performance target, the value will
be determined based on straight line interpolation. The maximum value of a PSU
is 2 Shares.

 

7. In the event that a Change of Control occurs prior to the end of the
Performance Period, if the PSUs described herein have not already been
previously forfeited or cancelled, such PSUs will become fully vested (for the
total amount of PSUs set forth in paragraph 1) and the Payment Date will occur
contemporaneous with the completion of the Change of Control; provided, however,
that in connection with a Change in Control and certain other events, payment of
any obligation payable pursuant to the preceding sentence may be made in cash of
equivalent value and/or securities or other property in the Committee’s
discretion.

 

8. It is intended that under current U.S. federal income tax laws, the Employee
will not be subject to income tax unless and until Shares are delivered to the
Employee on the Payment Date, at which time the Fair Market Value of the Shares
will be reportable as ordinary income, and subject to income tax withholding as
well as social security and Medicare (FICA) taxes. In accordance with
administrative procedures established by the Company, any statutory withholding
tax obligations of Employee on account of the issuance of Shares or settlement
of this Award shall be satisfied by the Company mandatorily withholding a
sufficient number of Shares to be issued to the Employee hereunder equal to such
applicable minimum statutory withholding tax obligation. The Employee should
consult his or her personal advisor to determine the effect of this Award of
PSUs on his or her own tax situation.

 

9. Notices hereunder and under the Plan, if to the Company, will be delivered to
the Plan Administrator (as so designated by the Company) or mailed to the
Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203,
attention of the Plan Administrator, or, if to the Employee, will be delivered
to the Employee, which may include electronic delivery, or mailed to his or her
address as the same appears on the records of the Company.

 

10. All decisions and interpretations made by the Board of Directors or the
Committee with regard to any question arising hereunder or under the Plan will
be binding and conclusive on all persons. Unless otherwise specifically provided
herein, in the event of any inconsistency between the terms of this Agreement
and the Plan, the Plan will govern.

 

11. By accepting this Award of PSUs, the Employee acknowledges receipt of a copy
of the Plan and the prospectus relating to this Award of PSUs, and agrees to be
bound by the terms and conditions set forth in this Agreement and the Plan, as
in effect and/or amended from time to time.

 

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The Employee further acknowledges that the Plan and related documents, which may
include the Plan prospectus, may be delivered electronically. Such means of
delivery may include the delivery of a link to a Company intranet site or the
internet site of a third party involved in administering the Plan, the delivery
of the documents via e-mail or CD-ROM or such other delivery determined at the
Plan Administrator’s discretion. The Employee acknowledges that the Employee may
receive from the Company a paper copy of any documents delivered electronically
at no cost if the Employee contacts the Human Resources department of the
Company by telephone at (703) 682-6553 or by mail to 4300 Wilson Boulevard,
Suite 1100, Arlington, Virginia 22203. The Employee further acknowledges that
the Employee will be provided with a paper copy of any documents delivered
electronically if electronic delivery fails.

 

12. This Award is intended to be excepted from coverage under Section 409A of
the Code and shall be administered, interpreted and construed accordingly. The
Employee shall have no right to designate the date of any payment under this
Agreement. Each payment under this Agreement is intended to be excepted under
the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4).
The Company may, in its sole discretion and without the Employee’s consent,
modify or amend the terms and conditions of this Award, impose conditions on the
timing and effectiveness of the issuance of the Shares, or take any other action
it deems necessary or advisable, to cause this Award to comply with Section 409A
of the Code (or an exception thereto). Notwithstanding, the Employee recognizes
and acknowledges that Section 409A of the Code may impose upon the Employee
certain taxes or interest charges for which the Employee is and shall remain
solely responsible.

 

13. Notwithstanding any other provisions in this Agreement, any PSUs subject to
recovery under any law, government regulation, stock exchange listing
requirement, or Company policy, shall be subject to such deductions, recoupment
and clawback as may be required to be made pursuant to such law, government
regulation, stock exchange listing requirement or Company policy.

 

14. This Agreement will be governed by the laws of the State of Delaware without
giving effect to its choice of law provisions.

The AES CORPORATION

By:

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Tish Mendoza

Vice President, Human Resources and

Internal Communications

 

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