Exhibit 10.1

THE AES CORPORATION

2003 LONG TERM COMPENSATION PLAN

As Amended and Restated on April 22, 2010

(Originally Effective Date: 2/12/03)

1. PURPOSE. The 2003 Long Term Compensation Plan, as amended and restated, (the
“Plan”) has been established by The AES Corporation (the “Company”) to (a)
reward Employees and Directors by means of appropriate incentives for achieving
long-range Company goals; (b) provide incentive compensation opportunities that
are competitive with those of other similar companies, (c) further match
Employees’ and Directors’ financial interests with those of the Company’s other
Stockholders through compensation that is based on the Company’s common stock
and thereby enhance the long-term financial interest of the Company and its
Affiliates, including through the growth in the value of the Company’s equity
and enhancement of long-term Stockholders return and (d) facilitate recruitment
and retention of outstanding personnel eligible to participate in the Plan. The
Plan as amended and restated is intended to comply with Section 409A.

2. DEFINITIONS. Except as otherwise specified by the Committee in an Agreement,
capitalized terms used in this Plan have the meanings set forth below. Except
when otherwise indicated by the context, reference to the masculine gender shall
include, when used, the feminine gender and any term used in the singular shall
also include the plural.

(a) “Affiliate” means (i) any Subsidiary of the Company, (ii) any entity or
Person or group of Persons that, directly or through one or more intermediaries,
is controlled by the Company and (iii) any entity or Person or group of Persons
in which the Company has a significant equity interest, as determined by the
Committee, including any Affiliates which become such after adoption of this
Plan.

(b) “Agreement” means any written agreement, contract, policy, program or other
instrument or document evidencing any Award granted under the Plan, which may,
but need not, be executed or acknowledged by a Participant.

(c) “Award” means any Option, award of Restricted Stock or Restricted Stock
Units, Other Stock-Based Award or Performance Award granted under the Plan.

(d) “Board” or “Board of Directors” means the Board of Directors of the Company.

(e) “Change in Control” means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company to any Person or group (as that term is used in Section 13(d) (3) of
the Exchange Act) of Persons, (ii) a Person or group (as so defined) of Persons
(other than management of the Company on the date of the adoption of this Plan
or their Affiliates) shall have become the beneficial owner of more than 35% of
the outstanding voting stock of the Company, or (iii) during any one-year
period, individuals who at the beginning of such period constitute the Board
(together with any new Director whose election or nomination was approved by a
majority of the Directors then in office who were either Directors at the
beginning of such period or who were previously so approved, but excluding under
all circumstances any such new Director whose initial assumption of office
occurs as a result of an actual or threatened election contest or other actual
or threatened solicitation of proxies or consents by or on behalf of any
individual, corporation, partnership or other entity or group) cease to
constitute a majority of the Board. Notwithstanding the foregoing or any
provision of this Plan to the contrary, if an Award is subject to Section 409A
(and not excepted therefrom) and a Change of Control is a distribution event for
purposes of an Award, the foregoing definition of Change in Control shall be
interpreted, administered and construed in manner necessary to ensure that the
occurrence of any such event shall result in a

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Change of Control only if such event qualifies as a change in the ownership or
effective control of a corporation, or a change in the ownership of a
substantial portion of the assets of a corporation, as applicable, within the
meaning of Treas. Reg. § 1.409A-3(i)(5).

(f) “Code” means the Internal Revenue Code of 1986, as amended and in effect
from time to time, or any successor statute.

(g) “Committee” means the Compensation Committee of the Board, or any successor
committee thereto, and/or such other committee of the Board as is appointed or
designated by the Board to administer the Plan (or any part hereof) or is
otherwise identified in the Company’s corporate governance documents as being
responsible for determining the compensatory arrangements of certain
Participants.

(h) “Covered Person” means an individual who is expected by the Committee to be
both (i) a “covered employee” as defined in Section 162(m) of the Code for the
tax year of the Company with regard to which a deduction in respect of such
person’s Award would be allowed and (ii) the recipient of compensation (other
than “qualified performance based compensation” as defined in Section 162(m)) in
excess of $1,000,000 for such tax year.

(i) “Director” means a member of the Board of Directors of the Company.

(j) “Disability” means the disability of a Participant (i) such that the
Participant is considered disabled under any long term disability plan of the
Company, or (ii) as otherwise determined by the Committee.

(k) “Employee” means any full-time or part-time employee (including an Officer
or Director who is also an employee) of the Company or an Affiliate. “Employee”
shall also include any individual or individuals to whom an offer of employment
has been extended. References in this Plan to “employment” and related terms
shall include the provision of services in any such capacity.

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Fair Market Value” means the closing sale price of the Shares, as reported
on the composite tape of New York Stock Exchange issues, or any other reporting
system selected by the Committee on the relevant dates, or, if no sale of Shares
is reported for that date, on the date or dates that the Committee determines,
in its sole discretion, to be appropriate for purposes of the valuation.

(n) “Incentive Stock Option” means an Option granted under Section 6 that meets
the requirements of Section 422 of the Code, or any successor provision thereto.

(o) “Non-Qualified Stock Option” means an Option granted under Section 6 that is
not an Incentive Stock Option.

(p) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

(q) “Other Stock-Based Award” means any right granted under Section 8.

(r) “Participant” means an Employee or non-employee Director to whom an Award
has been made.

(s) “Performance Award” means an Award to a Covered Person under Section 9.

(t) “Person” means any individual, corporation, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

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(u) “Plan” means this 2003 Long Term Compensation Plan, as amended and in effect
from time to time.

(v) “Restricted Stock” means any Share underlying an Award granted under
Section 7.

(w) “Restricted Stock Unit” means a contractual right underlying an Award
granted under Section 7 that is denominated in Shares, which Unit represents a
right to receive the value of a Share (or a percentage of such value, which
percentage may be higher than 100%) upon the terms and conditions set forth in
the Plan and the applicable Agreement.

(x) “Retirement” means retirement of a Participant (i) as defined under any
retirement plan of the Company or any Affiliate which is qualified under
Section 401 of the Code in which the Participant participates, or (ii) as
determined by the Committee.

(y) “Section 409A” shall mean Section 409A of the Code, the regulations and
other binding guidance promulgated thereunder.

(z) “Separation from Service” and “Separate from Service” shall mean the
Participant’s death, retirement or other termination of employment with the
Company (including all persons treated as a single employer under Section 414(b)
and 414(c) of the Code) that constitutes a “separation from service” (within the
meaning of Section 409A). For purposes hereof, the determination of controlled
group members shall be made pursuant to the provisions of Section 414(b) and
414(c) of the Code; provided that the language “at least 50 percent” shall be
used instead of “at least 80 percent” in each place it appears in
Section 1563(a)(1),(2) and (3) of the Code and Treas. Reg. § 1.414(c)-2;
provided, further, where legitimate business reasons exist (within the meaning
of Treas. Reg. § 1.409A-1(h)(3)), the language “at least 20 percent” shall be
used instead of “at least 80 percent” in each place it appears.

(aa) “Specified Employee” means a key employee (as defined in Section 416(i) of
the Code without regard to paragraph (5) thereof) of the Company as determined
in accordance with Section 409A and the procedures established by the Company.

(bb) “Share” means a share of Stock.

(cc) “Stock” means the common stock, $.01 par value per share (as such par value
may be adjusted from time to time), of the Company.

(dd) “Subsidiary” means any entity in which the Company owns or otherwise
controls, directly or indirectly, stock or other ownership interests having the
voting power to elect a majority of the Board, or other governing group having
functions similar to a board of Directors, as determined by the Committee.

(ee) “Substitute Award” means an Award granted in assumption of, or in
substitution for, an outstanding award previously granted by a company acquired
by the Company or with which the Company combines.

(ff) “Successor” with respect to a Participant means the legal representative of
an incompetent Participant and, if the Participant is deceased, the legal
representative of the estate of the Participant or the person or persons who
may, by bequest or inheritance, or under the terms of an Award or of forms
submitted by the Participant to the Committee, acquire the right to receive cash
and/or Shares issuable in satisfaction of an Award.

3. ADMINISTRATION. Subject to the provisions of the plan, the authority to
control and manage the operation and administration of the Plan shall be vested
in the Committee; provided, however, that the Board (and/or such other committee
designated by the Board shall approve and/or ratify any Awards to the Company’s
non-employee Directors.

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(a) The Committee shall have power to make Awards, to determine when and to whom
Awards will be granted, the types of Awards and the number of Shares covered by
the Awards, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards and, subject to the terms of
the Plan, to cancel or suspend Awards. In making such Award determinations, the
Committee may take into account the nature of services rendered by the
Participant, the Participant’s present and potential contribution to the
Company’s success and such other factors as the Committee deems relevant.

(b) Subject to the provisions of the Plan, the Committee will have the authority
and discretion to determine the extent to which Awards under the Plan will be
structured to conform to the requirements applicable to performance-based
compensation as described in Section 162(m) of the Code, and to take such
action, establish such procedures, and impose such restrictions at the time such
Awards are granted as the Committee determines to be necessary or appropriate to
conform to such requirements.

(c) The Committee shall have the authority and discretion to establish terms and
conditions of Awards as the Committee determines to be necessary or appropriate
to conform to applicable requirements or practices of jurisdictions outside of
the United States.

(d) The Committee may determine whether, to what extent and under what
circumstances Awards may be settled, paid or exercised in cash, Shares or other
Awards or other property, or canceled, forfeited or suspended.

(e) The Committee shall have the authority to interpret the Plan and any Award
or Agreement made under the Plan, to establish, amend, waive and rescind any
rules and regulations relating to the administration of the Plan, to determine
the terms and provisions of any Agreements entered into hereunder (not
inconsistent with the Plan), and to make all other determinations necessary or
advisable for the administration of the Plan.

(f) The Committee shall determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically, or at the election of the holder thereof, or of the
Committee.

(g) The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent it
shall deem desirable. The determinations of the Committee in the administration
of the Plan, as described herein, shall be final, binding and conclusive.

(h) In controlling and managing the operation and administration of the Plan,
the Committee shall act by a majority of its then members, by meeting or by
writing filed without a meeting. The Committee shall maintain and keep adequate
records concerning the Plan and concerning its proceedings and acts in such form
and detail as the Committee may decide.

(i) Except to the extent prohibited by applicable law or regulation, the
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. The
Committee may revoke any such allocation or delegation at any time.

(j) The Company and any Affiliate shall furnish the Committee with such data and
information as may be required for it to discharge its duties. The records of
the Company and any Affiliate as to an Employee’s or Participant’s employment,
or other provision of services, termination of employment, or cessation of the
provision of services, leave of absence, reemployment and compensation shall be
conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefit under the Plan must furnish the Committee such
evidence, data or information as the Committee considers desirable to carry out
the terms of the Plan.

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(k) To the fullest extent permitted by law, each member and former member of the
Board and the Committee and each person to whom the Board and the Committee
delegates or has delegated authority under this Plan shall be entitled to
indemnification by the Company against and from any loss, liability, judgment,
damage, cost and reasonable expense incurred by such member, former member or
other person by reason of any action taken, failure to act or determination made
in good faith under or with respect to this Plan.

4. SHARES AVAILABLE FOR AWARDS.

(a) Subject to adjustment as provided in Section 4(e), the maximum number of
Shares that may be delivered pursuant to Awards granted under the Plan is
38,000,000. Notwithstanding the foregoing and subject to adjustment as provided
in Section 4(e), no Participant may receive Options and stock appreciation
rights under this Plan in any calendar year that relate to more than 1,000,000
Shares.

(b) Shares to be issued under the Plan may be made available from authorized but
unissued Stock, Stock held by the Company in its treasury, or Stock purchased by
the Company on the open market or otherwise. During the term of the Plan, the
Company will at all times reserve and keep available the number of shares of
Stock that shall be sufficient to satisfy the requirements of the Plan.

(c) If any Shares covered by an Award other than a Substitute Award, or to which
such an Award relates, terminate, lapse or are forfeited or cancelled, or such
an Award is otherwise settled without the delivery of the full number of Shares
underlying the Award, then the Shares covered by such Award, or to which such
Award relates, to the extent of any such forfeiture, termination, lapse,
cancellation, etc., shall again be, or shall become available for issuance under
the Plan; provided, however, that Shares (i) delivered in payment of the
exercise price of an Option, (ii) not issued upon the net settlement or net
exercise of stock appreciation rights, or (iii) delivered to or withheld by the
Company to pay withholding taxes related to an Option or stock appreciation
right, shall become available again for issuance under this Plan.

(d) Shares underlying Substitute Awards shall not reduce the number of Shares
available for delivery under this Plan.

(e) In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, share split, reverse share split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or other
securities or property) which thereafter may be made the subject of Awards,
including without limitation the individual limit set forth in Section 4(a),
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant, purchase, or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, however, that the
number of Shares subject to any Award shall always be a whole number; provided,
further, with respect to any Award intended to qualify as performance-based
compensation under Section 162(m) of the Code or any Award intended to comply
with, or qualify for an exception to, Section 409A, any such adjustment shall be
authorized only to the extent that such adjustment would not cause the Award to
fail to comply with Section 162(m) or Section 409A, or an exception thereto.

5. ELIGIBILITY. All Employees and non-employee Directors are eligible to
participate in this Plan and receive Awards hereunder. Holders of equity-based
awards issued by a company acquired by the Company or with which the Company
combines are eligible to receive Substitute Awards hereunder.

6. OPTIONS. The Committee is hereby authorized to grant Options to Participants
with the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine:

(a) The purchase price per Share under an Option shall be determined by the
Committee; provided, however, that, except in the case of Substitute Awards,
such purchase price shall not be less than the Fair Market Value of a Share on
the date of grant of such Option.

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(b) The term of each Option shall be fixed by the Committee and the effect
thereon, if any, of the termination of employment of the Participant shall be
determined by the Committee and set forth in the applicable Agreement.
Notwithstanding, the term of an Option shall not exceed ten (10) years.

(c) Any Option may be exercised at any time during the period commencing with
either the date that Option is granted or the first date permitted under a
vesting schedule established by the Committee and ending with the expiration
date of the Option. A Participant may exercise his Option for all or part of the
number of Shares which he is eligible to exercise under terms of the Option. The
Committee shall determine the method or methods by which, and the form or forms
in which, including, without limitation, cash, Shares, other Awards, or other
property, or any combination thereof, having a Fair Market Value on the exercise
date equal to the relevant exercise price, payment of the exercise price with
respect thereto may be made or deemed to have been made.

(d) The terms of any Incentive Stock Option granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, or any successor
provision thereto, and any regulations promulgated thereunder.

(e) Options shall be granted to non-employee Directors in accordance with the
policies established from time to time by the Committee, including the terms and
conditions of any such award, number of shares (if any) to be subject to each
such Option and the time(s) at which such Options shall be granted.

7. RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS. The Committee is hereby
authorized to grant Awards of Restricted Stock and/or Restricted Stock Units to
Participants.

(a) The Awards granted under this Section 7 shall be subject to such
restrictions as the Committee may impose (including, without limitation, any
limitation on the right to vote Shares underlying Restricted Stock Awards or the
right to receive any dividend, other right or property), which restrictions may
lapse separately or in combination at such time or times, in such installments
or otherwise, as the Committee may deem appropriate. If the vesting conditions
applicable to an Award of Restricted Stock or Restricted Stock Units relate
exclusively to the passage of time and continued employment or provision of
services, or refraining therefrom, the last vesting date of all or a portion of
such Award shall occur no less than 36 months following the date of such Award,
except that the foregoing restriction shall not apply to such Awards if they
(i) are made in satisfaction of Company obligations to Participants that would
otherwise be paid in cash, (ii) are issued in connection with the exercise of an
Option or other Award hereunder, or (iii) are Substitute Awards.

(b) Any Award of Restricted Stock or Restricted Stock Units may be evidenced in
such manner as the Committee may deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of Shares
underlying a Restricted Stock Award, such certificate shall be registered in the
name of the Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Shares.

8. OTHER STOCK-BASED AWARDS. The Committee is hereby authorized to grant to
Participants such other Awards (including, without limitation, stock units,
stock appreciation rights and rights to dividends and dividend equivalents) that
are denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares) as are deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan, the
Committee shall determine the terms and conditions of such Awards.
Notwithstanding, the term of a stock appreciation right shall not exceed ten
(10) years. Shares or other securities delivered pursuant to a purchase right
granted under this Section 8 shall be purchased for such consideration, which
may be paid by such method or methods and in such form or forms, including,
without limitation, cash, Shares, other securities, the deferral of
compensation, other Awards, or other property, or any combination thereof, as
the Committee shall determine, the

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value of which consideration, as established by the Committee, shall, except in
the case of Substitute Awards or the deferral of compensation, not be less than
the Fair Market Value of such Shares or other securities as of the date such
purchase right is granted. Full-value awards granted hereunder to Employees will
have a standard vesting schedule, in one or more increments, over a service
period of no less than (3) three years; provided, however, that (i) up to five
(5%) percent of the shares authorized for issuance under the Plan may be granted
without this restriction, and (ii) this limitation will not adversely affect a
participant’s rights under another plan or agreement with AES or its
subsidiaries.

9. PERFORMANCE AWARDS.

(a) The Committee is hereby authorized to grant Performance Awards to Covered
Persons, with a minimum performance period of at least one (1) year to be
applicable to awards granted hereunder, if the Committee intends that such
Awards shall qualify as “qualified performance based compensation” under
Section 162(m) of the Code. Unless otherwise determined by the Committee, any
such Performance Award shall be evidenced by an Agreement containing the terms
of the Performance Award, including but not limited to, the performance criteria
and such terms and conditions as may be determined, from time to time, by the
Committee, in each case, not inconsistent with this Plan.

(b) Performance Awards shall become earned and payable if performance goals
relating to one or more of the following performance measures are achieved
during a performance period or periods, as determined by the Committee: (i) Cash
Value Added, (ii) Total Stockholder Return, (iii) Return on Equity, (iv) Revenue
Growth, (v) Return on Net Assets, (vi) Earnings Per Share, (vii) EBITDA,
(viii) Return on Invested Capital, (ix) Parent Operating Cash Flow,
(x) Consolidated Free Cash Flow or (xi) Cash Return on Investment (CRI), each as
hereinafter defined. To the extent consistent with Section 162(m) of the Code,
the Committee may determine, at the time the performance goals are established,
that certain adjustments shall apply, in whole or in part, in such manner as
determined by the Committee, to exclude the effect of any of the following
events that occur during a performance period: the impairment of tangible or
intangible assets; litigation or claim judgments or settlements; the effect of
changes in tax law, accounting principles or other such laws or provisions
affecting reported results, business combinations, reorganizations and/or
restructuring programs, including, but not limited to, reductions in force and
early retirement incentives; currency fluctuations; and any extraordinary,
unusual, infrequent or non-recurring items, including, but not limited to, such
items described in management’s discussion and analysis of financial condition
and results of operations or the financial statements and notes thereto
appearing in the Company’s annual report for the applicable period.

(c) Performance goals relating to the performance measures set forth above shall
be pre-established in writing by the Committee, and achievement thereof
certified in writing prior to payment of the Award, as required by
Section 162(m) and regulations promulgated thereunder, and such performance
goals may relate to the Company as a whole, or to one or more units thereof, and
may be measured over such periods, as the Committee shall determine. All such
performance goals shall be established in writing no later than ninety (90) days
after the beginning of the applicable performance period; provided, however,
that for a performance period of less than one (1) year, the Committee shall
take any such actions prior to the lapse of 25% of the performance period. In
addition to establishing minimum performance goals below which no compensation
shall be payable pursuant to a Performance Award, the Committee, in its sole
discretion, may create a performance schedule under which an amount less than or
more than the target award may be paid so long as the performance goals have
been achieved. The Committee, in its sole discretion, may also establish such
additional restrictions or conditions that must be satisfied as a condition
precedent to the payment of all or a portion of any Performance Awards. Such
additional restrictions or conditions need not be performance-based and may
include, among other things, the receipt by a Participant of a specified annual
performance rating, the continued employment by the Participant and/or the
achievement of specified performance goals by the Company, business unit or
Participant. Furthermore and notwithstanding any provision of this Plan to the
contrary, the Committee, in its sole discretion, may reduce the amount of any
award to a Participant if it concludes that such reduction is necessary or
appropriate based upon: (i) an evaluation of such Participant’s performance;
(ii) comparison with compensation received by other similarly situated
individuals working within the Company’s industry; (iii) the Company’s financial
results and conditions; or (iv) such other factors or conditions that the
Committee deems relevant. Notwithstanding any provision of this Plan to the
contrary, the Committee shall not use its discretionary authority to increase
any Performance Award that is intended to be performance-based compensation
under Section 162(m) of the Code.

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(d) The maximum value of (i) Performance Awards (denominated in cash) which may
be awarded to a Participant under the Plan in any one calendar year of the
Company is $10,000,000, and (ii) Performance Awards (denominated in Stock) which
may be awarded to a participant under the Plan in any one calendar year of the
Company is 1,000,000 Shares.

(e) For purposes of this Plan, the following terms shall have the meanings set
forth below. Each of the financial variables of which the respective measures
are a function shall be determined in accordance with GAAP, as applicable, in a
manner consistent with the Company’s audited financial statements for the
relevant period.

(i) “Cash Return on Investment (CRI)” means (A) consolidated cash flow from
operations less mandatory capital expenditures, divided by (B) gross investment
(where gross investment equals gross property), plant and equipment, plus
working capital.

(ii) “Cash Value Added” means (A) operating profit after taxes, adjusted for
minority interests, plus depreciation and amortization expenses and other
material non-cash charges (if any) minus (B) a charge reflecting the cost
(including replacement) of new capital.

(iii) “Consolidated Free Cash Flow” means consolidated cash flow from operations
less mandatory capital expenditures (adjusted for minority interests).

(iv) “Earnings Before Income Taxes, Depreciation and Amortization (EBITDA)”
means net income from continuing operations plus (1) provision for income taxes
and (2) depreciation and amortization expenses.

(v) “Earnings Per Share” for a period means diluted earnings per common share
from continuing operations before extraordinary items.

(vi) “Return on Equity” for a period means net income divided by average
Stockholders’ equity (adjusted for accumulated other comprehensive losses).

(vii) “Return on Invested Capital” for a period means (A) net operating profits
after taxes divided by (B) total liabilities plus amounts, if any, attributable
to minority interests, preferred stock and average Stockholders’ equity
(adjusted for accumulated other comprehensive losses).

(viii) “Return on Net Assets” for a period means net income less preferred stock
dividends divided by the difference of average total assets less average
non-debt liabilities, with average defined as the sum of assets or liabilities
at the beginning and ending of the period divided by two.

(ix) “Revenue Growth” means the percentage change in revenue (as defined in
Statement of Financial Accounting Concepts No. 6, published by the Financial
Accounting Standards Board) from one period to another.

(x) “Total Stockholder Return” means the sum of the appreciation in the
Company’s stock price and dividends paid on the common stock of the Company over
a given period of time.

(xi) “Parent Operating Cash Flow” means “Parent Operating Cash Flow” as defined
in the Company’s annual report filed on Form 10-K.

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10. TERMINATION OF EMPLOYMENT OR SERVICE. Except as otherwise determined by the
Committee or provided by the Committee in an applicable Agreement and to the
extent not inconsistent with Section 14(k) hereof, in case of termination of
employment or service, the following provisions shall apply:

(a) Upon termination of employment or cessation of provision of services by the
Participant for reason of death or Disability:

(i) any Award (other than Options) then held by such Participant shall be
immediately accelerated and become fully vested, exercisable and payable, and

(ii) any Option then held by such Participant shall be immediately accelerated
and become fully vested, exercisable and payable and shall expire on the earlier
of (1) the date the Option would have expired had the Participant continued in
such employment or service, and (2) one year after the date such Participant’s
employment or service ceases.

(b) Upon termination of employment or cessation of provision of services by the
Participant for reason of Retirement:

(i) any Award (other than Options) then held by such Participant shall be
immediately accelerated and become fully vested, exercisable and payable, and

(ii) any Option then held by such Participant shall automatically expire on the
earlier of (1) the date the Option would have expired had the Participant
continued in such employment or service, and (2) one hundred and eighty days
after the date such Participant’s employment or service ceases, except that any
Incentive Stock Option shall automatically expire on the earlier of the date set
forth in clause (1) above and three months after the date that such
Participant’s employment or service ceases.

(c) Upon termination of employment by the Company for cause (as determined by
the Committee in its sole discretion), or under other circumstances provided by
the Committee in its discretion in the applicable Agreement:

(i) any Award then held by such Participant whose restrictions have not lapsed,
which is not exercisable or which is not payable will automatically be forfeited
in full and canceled by the Company upon such termination of employment or
service, and

(ii) any Option then held by such Participant, to the extent exercisable, shall
automatically expire on the earlier of (1) the date the Option would have
expired had the Participant continued in such employment or service, and (2) and
three months after the date that such Participant’s service ceases.

(d) Upon termination of employment or cessation of provision of services by the
Participant for any reason other than death, Disability, Retirement or
termination of employment or service by the Company for cause (as determined by
the Committee in its sole discretion), or under other circumstances provided by
the Committee in its discretion in the applicable Agreement:

(i) any Award (other than Performance Awards) then held by such Participant
whose restrictions have not lapsed, which is not exercisable or which is not
payable will automatically be forfeited in full and canceled by the Company upon
such termination of employment or service,

(ii) any Option then held by such Participant, to the extent exercisable, shall
automatically expire on the earlier of (1) the date the Option would have
expired had the Participant continued in such employment or service, and (2) one
hundred and eighty days after the date the such Participant’s service ceases,
except that any Incentive Stock Option shall automatically expire on the earlier
of clause (i) above and three months after the date that such Participant’s
service ceases, and

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(iii) any Performance Award then held by such Participant which is not then
payable will be paid in accordance with its terms at the time the Performance
Award would have been payable if the termination of employment or service had
not occurred, and the payment shall be prorated based on the number of days in
the performance period that occurred prior to the termination of employment or
service.

11. DURATION. The Plan shall be effective as of February 1, 2003, subject to its
approval by the Stockholders of the Company. No Award shall be granted under the
Plan after the tenth anniversary of the last date upon which the Company
obtained Stockholder approval of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Agreement, any Award theretofore
granted may extend beyond such date, and the authority of the Committee to
administer the Plan and to amend, alter, adjust, suspend, discontinue, or
terminate any such Award, or to waive any conditions or rights under any such
Award, and the authority of the Board to amend the Plan, shall extend beyond
such date.

12. AMENDMENT, MODIFICATION AND TERMINATION.

(a) Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Agreement or in the Plan, the Board may amend, alter,
suspend, discontinue, or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, alteration, suspension,
discontinuation or termination shall be made without (i) Stockholder approval if
such approval is necessary to comply with any tax or regulatory requirement for
which or with which the Board deems it necessary or desirable to qualify or
comply or (ii) the consent of the affected Participant, if such action would
adversely affect the rights of such Participant under any outstanding Award.
Notwithstanding anything to the contrary herein, the Committee may amend the
Plan in such manner as may be necessary to enable the Plan to achieve its stated
purposes in any jurisdiction outside the United States in a tax-efficient manner
and in compliance with local rules and regulations. Notwithstanding the
foregoing or any provision of the Plan or an Award to the contrary, (i) the
Committee may at any time (without the consent of any Participant) modify or
amend any or all of the provisions of the Plan or an Award to the extent
necessary to conform the provisions of the Plan or an Award with Section 162(m),
Section 409A, the regulations issued thereunder or an exception thereto, or
other applicable law, regardless of whether such modification or amendment of
the Award shall adversely affect the rights of a Participant, and (ii) the
Committee may not, without Stockholder approval, reduce the exercise price of
any Option or stock appreciation right, exchange any underwater Option or stock
appreciation right for a cash payment, or take any other action with respect to
outstanding Options or stock appreciation rights that is treated as a repricing
of such Options or stock appreciation rights under generally accepted accounting
principles (unless otherwise permitted by applicable listing standards).

(b) The Committee may waive any conditions or rights under, amend any terms of,
or amend, alter, suspend, discontinue or terminate, any Award theretofore
granted, prospectively or retroactively, without the consent of any Participant
or holder or beneficiary of an Award, provided, however, that no such action
shall impair the rights of a Participant or holder or beneficiary under any
Award theretofore granted under the Plan.

(c) With respect to Participants who reside or work outside the United States of
America, the Committee may, in its sole discretion, amend, or otherwise modify,
without Board or Stockholder approval, the terms of the Plan or Awards with
respect to such Participant in order to conform such terms with the provisions
of local law; provided that such amendment or other modification shall not
increase the total number of Shares reserved for purposes of the Plan without
the approval of the Stockholders of the Company.

(d) The Committee shall be authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, an event affecting the
Company, or the financial statements of the Company, or of changes in applicable
laws, regulations or accounting principles), whenever the Committee determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.

(e) To the extent not inconsistent with Section 14(k) hereof, in connection with
a Change in Control or an event described in Section 4(e), the Committee may, in
its discretion (i) cancel any or all outstanding

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Awards under the Plan in consideration for payment to the holder of each such
cancelled Award of an amount equal to the portion of the consideration that
would have been payable to such holder pursuant to such transaction if such
Award had been fully vested and exercisable, and had been fully exercised,
immediately prior to such transaction, less the exercise price if any that would
have been payable therefore, or (ii) if the net amount referred to in clause
(i) would be negative, cancel such Award for no consideration or payment of any
kind. Payment of any amount payable pursuant to the preceding sentence may be
made in cash and/or securities or other property in the Committee’s discretion.

13. CHANGE IN CONTROL. Except as otherwise expressly provided in the applicable
Agreement and to the extent not inconsistent with Section 14(k) hereof, upon the
consummation of a Change in Control, all outstanding Options under this Plan
shall become fully exercisable and all outstanding Awards (other than Options)
under this Plan shall become fully vested and payable.

14. MISCELLANEOUS.

(a) Nothing in the Plan or in any Agreement shall confer upon any Participant
the right to continue in the service or employment of the Company or any
Affiliate or affect any right which the Company or any Affiliate may have to
terminate or modify the employment or provision of service of the Participant
with or without cause.

(b) The Company shall have a right to withhold from any payment of cash or Stock
to a Participant or other person under the Plan an amount sufficient to cover
any required withholding taxes, including the Participant’s social security and
Medicare taxes (FICA) and federal, state, local income tax or such other
applicable taxes (“Taxes”) with respect to income arising from payment of the
Award. The Company shall have the right to require the payment of any Taxes
before issuing any Stock pursuant to the Award. The Committee may, if it deems
appropriate in the case of a Participant, withhold such Taxes through a
reduction of the number of Shares delivered to such individual, or allow the
Participant to elect to cover all or any part of the required withholdings, and
to cover any additional withholdings up to the amount needed to cover the Taxes
with respect to income arising from payment of the Award, through a reduction of
the number of Shares delivered to such individual or a subsequent return to the
Company of Shares held by the Participant or other person, in each case valued
in the same manner as used in computing the withholding taxes under the
applicable laws. Notwithstanding the foregoing or any provisions of the Plan to
the contrary, any broker-assisted cashless exercise shall comply with the
requirements for equity classification of Paragraph 35 of FASB Statement
No. 123(R) and any withholding satisfied through a net-settlement shall be
limited to the minimum statutory withholding requirements.

(c) Awards received by a Participant under this Plan shall not be deemed a part
of a Participant’s regular, recurring compensation for purposes of any
termination, indemnity or severance pay laws and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company or an
Affiliate, unless expressly so provided by such other plan, contract or
arrangement, or unless the Committee so determines. No provision of the Plan
shall prevent the Company from adopting or continuing in effect other or
additional compensation arrangements, including incentive arrangements providing
for the issuance of options and stock, and awards that do not qualify under
Section 162(m) of the Code, and such arrangements may be generally applicable or
applicable only in specific cases.

(d) Subject to the provisions of the Plan, (i) no Award and no right under any
Award shall be assignable, alienable, saleable or transferable by a Participant
otherwise than by will or by the laws of descent and distribution; provided,
however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any property
distributable, with respect to any Award upon the death of the Participant;
(ii) each Award, and each right under any Award, shall be exercisable during the
Participant’s lifetime only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative; and
(iii) no Award and no right under any such Award, may be pledged, alienated,
attached, or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable against the
Company. The provisions of this paragraph shall not apply to any Award which has
been fully exercised, earned or paid, as the case may be, and shall not preclude
forfeiture of an Award in accordance with the terms thereof.

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(e) This Plan shall be unfunded and the Company shall not be required to
segregate any assets that may at any time be represented by Awards under this
Plan. Neither the Company, its Affiliates, the Committee, nor the Board shall be
deemed to be a trustee of any amounts to be paid under this Plan nor shall
anything contained in this Plan or any action taken pursuant to its provisions
create or be construed to create a fiduciary relationship between the Company
and/or its Affiliates, and a Participant or Successor. To the extent any person
acquires a right to receive an Award under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company.

(f) Any liability of the Company to any Participant with respect to an Award
shall be based solely upon contractual obligations created by this Plan and the
applicable Agreement. Except as may be required by law, neither the Company nor
any member or former member of the Board or of the Committee, nor any other
person participating (including participation pursuant to a delegation of
authority under Sections 3(c) and 3(i) hereof) in any determination of any
question under this Plan, or in the interpretation, administration or
application of this Plan, shall have any liability to any party for any action
taken, or not taken, under this Plan.

(g) No certificate for Shares distributable pursuant to this Plan shall be
issued and delivered unless the issuance of such certificate complies with all
applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as
amended and in effect from time to time or any successor statute, the Exchange
Act and the requirements of the exchanges on which the Company’s Shares may, at
such time be listed.

(h) To the extent that federal laws do not otherwise control, this Plan and all
determinations made and actions taken pursuant to this Plan shall be governed by
the laws of Delaware and construed accordingly.

(i) In the event that any provision of this Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

(j) No fractional shares shall be issued or delivered pursuant to this Plan or
any Agreement, and the Committee shall determine whether cash, other securities,
or other property shall be paid or transferred in lieu of any fractional shares,
or whether such fractional Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.

(k) Notwithstanding any provision of the Plan or an Agreement to the contrary,
if any Award or benefit provided under this Plan is subject to the provisions of
Section 409A, the provisions of the Plan and any applicable Agreement shall be
administered, interpreted and construed in a manner necessary to comply with
Section 409A or an exception thereto (or disregarded to the extent such
provision cannot be so administered, interpreted or construed). The following
provisions shall apply, as applicable:

(i) If a Participant is a Specified Employee and a payment subject to
Section 409A (and not excepted therefrom) to the Participant is due upon
Separation from Service, such payment shall be delayed for a period of six
(6) months after the date the Participant Separates from Service (or, if
earlier, the death of the Participant). Any payment that would otherwise have
been due or owing during such six-month period will be paid immediately
following the end of the six-month period in the month following the month
containing the 6-month anniversary of the date of termination unless another
compliant date is specified in the applicable Agreement.

(ii) For purposes of Section 409A, and to the extent applicable to any Award or
benefit under the Plan, it is intended that distribution events qualify as
permissible distribution events for purposes of Section 409A and shall be
interpreted and construed accordingly. With respect to payments subject to
Section 409A, the Company reserves the right to accelerate and/or defer any
payment to the extent permitted and consistent with Section 409A. Whether a
Participant has Separated from Service or employment will be determined based on
all of the facts and circumstances and, to the extent applicable to any Award or
benefit, in accordance with the guidance issued under Section 409A. For this
purpose, a Participant will be presumed to have experienced a Separation from
Service when the level of bona fide services performed permanently decreases to
a level less than twenty percent (20%) of the average level of bona fide
services performed during the immediately preceding thirty-six (36) month period
or such other applicable period as provided by Section 409A.

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(iii) The Committee, in its discretion, may specify the conditions under which
the payment of all or any portion of any Award may be deferred until a later
date. Deferrals shall be for such periods or until the occurrence of such
events, and upon such terms and conditions, as the Committee shall determine in
its discretion, in accordance with the provisions of Section 409A, the
regulations and other binding guidance promulgated thereunder; provided,
however, that no deferral shall be permitted with respect to Options and other
stock rights subject to Section 409A. An election shall be made by filing an
election with the Company (on a form provided by the Company) on or prior to
December 31st of the calendar year immediately preceding the beginning of the
calendar year (or other applicable service period) to which such election
relates (or at such other date as may be specified by the Board to the extent
consistent with Section 409A) and shall be irrevocable for such applicable
calendar year (or other applicable service period).

(iv) The grant of Non-Qualified Stock Options and other stock rights subject to
Section 409A shall be granted under terms and conditions consistent with Treas.
Reg. § 1.409A-1(b)(5) such that any such Award does not constitute a deferral of
compensation under Section 409A. Accordingly, any such Award may be granted to
Participants of the Company and its subsidiaries and affiliates in which the
Company has a controlling interest. In determining whether the Company has a
controlling interest, the rules of Treas. Reg. § 1.414(c)-2(b)(2)(i) shall
apply; provided that the language “at least 50 percent” shall be used instead of
“at least 80 percent” in each place it appears; provided, further, where
legitimate business reasons exist (within the meaning of Treas. Reg. §
1.409A-1(b)(5)(iii)(E)(i)), the language “at least 20 percent” shall be used
instead of “at least 80 percent” in each place it appears. The rules of Treas.
Reg. §§ 1.414(c)-3 and 1.414(c)-4 shall apply for purposes of determining
ownership interests.

(v) Notwithstanding anything to the contrary contained herein and with respect
to Options that were earned and vested under the Plan prior to January 1, 2005
(as determined under Section 409A, “Grandfather Options”), such Grandfathered
Options are intended to be exempt from Section 409A and shall be administered
and interpreted in a manner intended to ensure that any such Grandfathered
Option remains exempt from Section 409A. No amendments or other modifications
shall be made to such Grandfathered Options except as specifically set forth in
a separate writing thereto, and no amendment or modification to the Plan shall
be interpreted or construed in a manner that would cause a material modification
(within the meaning of Section 409A, including Treas. Reg. § 1.409A-6(a)(4)) to
any such Grandfathered Options.

(vi) In no event shall any member of the Board, the Committee or the Company (or
its employees, Officers or Directors) have any liability to any Participant (or
any other Person) due to the failure of an Award to satisfy the requirements of
Section 409A.

 

The AES Corporation By:  

/s/ Rita Trehan

  Rita Trehan, Vice President, Human Resources