Exhibit 10.28

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

Dear William Luraschi:

 

This document, upon your signature, will constitute the Agreement between you
and The AES Corporation (together with its affiliates and related entities, the
“Company”) on the terms of your separation from the Company (the “Agreement”).

 

1.                                            Your employment is terminated
effective May 31, 2008 (the “Termination Date”). You will be paid your earned
compensation through and including the Termination Date. You have received or
will receive by separate cover information regarding your rights to continuation
of your health insurance which will cease as of the last day of the month in
which your Termination Date occurs. To the extent that you have such rights,
nothing in this Agreement will impair those rights.

 

2.                                            You have or will return to the
Company by the Termination Date:, (i) all reports, files, memoranda, records,
software, laptops, computer equipment, cellular phones, credit cards, cardkey
passes, door and file keys, computer access codes or disks and instructional
manuals, other than any Excluded Materials (as defined below); and (ii) any
other physical or personal property that you received in connection with your
employment with the Company that you then have in your possession and you shall
not retain any copies, duplicates, reproductions or excerpts thereof. The
“Excluded Materials” are (i) 2 laptop computers — an IBM T43 and an IBM X60, and
(ii) a Blackberry Pearl phone. Title to the Excluded Materials will pass to you
upon satisfaction of the following conditions: (i) satisfaction of the
conditions listed in Section 3 (i), (ii) and (iii) below; and (ii) deletion of
all confidential information of the Company from the Excluded Materials by the
Company.

 

The Company will reimburse you in accordance with its existing policies for any
legitimate expenses you incurred on Company business prior to the Termination
Date. You must submit any expense reimbursement requests by June 15, 2008.

 

3.                                            Subject to the terms of this
Agreement and in consideration for (i) your execution of this Agreement;
(ii) your satisfactory work performance through the Termination Date as
determined by Paul Hanrahan; and (iii) your return of an executed copy of this
Agreement to the Company by May 15, 2008, the Company will provide you, pursuant
to the terms and provisions of The AES Corporation Severance Plan, as amended
(“Severance Plan”), with the following (collectively, “Consideration”):

 

(a)                                       twelve (12) monthly salary
continuation benefits (based on your 2008 annualized base salary + target bonus
of USD$514,500) in equal monthly installments, each less applicable taxes and
deductions. The first of these monthly payments shall begin with the next
regular payroll period occurring after the seventh business day following your
Termination Date, and the remaining payment shall be made monthly in accordance
with the Company’s established payroll practices;

 

(b)                                      a prorated bonus for your work in 2008
equal to 41.6% of your 2008 annual target bonus, less applicable taxes and
deductions; provided that all performance conditions and other terms and
conditions applicable to such bonus and the payment thereof must be met prior to
payment. Such payment, if any, will be made to you in calendar year 2009 on or
prior to March 15, 2009;

 

(c)                                       outplacement benefits to begin after
your Termination Date;

 

(d)                                      in addition, if you are already
participating in the medical/RX, dental and/or vision benefit plans and should
you elect to continue these benefits under COBRA, the Company will pay the
portion of the

 

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premium cost of such coverage presently paid by the Company under the Company’s
plan for a twelve (12) period which period shall commence at the beginning of
the calendar month following the calendar month containing your Termination
Date; and

 

(e)                                       finally, to the extent applicable, you
will be entitled to the Excise Tax Reimbursement benefits described in Appendix
A of the Severance Plan.

 

Absent the entry of this Agreement you would not be entitled to such
Consideration.

 

Any stock options, restricted stock units and performance units of The AES
Corporation that have been previously granted to you but that have not yet
vested on or before your Termination Date, will not vest following your
Termination Date and will therefore be forfeited in their entirety. Please also
see the relevant plan and notice documents for other important provisions
triggered by your termination.

 

4.                                            The intent of this section is to
secure your promise not to sue the Company, or anyone connected with it, for any
harm you may claim to have suffered in connection with your employment or the
termination of your employment, in return for the benefits described in this
Agreement. Accordingly, in exchange for the Consideration, you hereby agree as
follows:

 

(a)                                       Except as otherwise provided in this
Section 4(a), you hereby release the Company and all of its past, present and/or
future related entities, including but not limited to parents, divisions,
affiliates, subsidiaries, officers, directors, stockholders, trustees,
employees, agents, representatives, administrators, attorneys, insurers,
fiduciaries, predecessors, successors and assigns of the Company, in their
individual and/or representative capacities (hereinafter collectively referred
to as the “Released Parties”), from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims and demands of any kind whatsoever (“Claims”)
which you or your heirs, executors, administrators, successors and assigns ever
had, now have or may have against the Released Parties, whether known or unknown
to you, and whether asserted or unasserted, (i) by reason of your employment
and/or cessation of employment with the Company, or (ii) otherwise involving
facts which occurred on or prior to the date that you sign this Agreement.

 

Such released Claims include, without limitation, any and all Claims under Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1871, the Civil
Rights Act of 1991, the Fair Labor Standards Act, the Family and Medical Leave
Act of 1993, the Age Discrimination in Employment Act of 1967, as amended by the
Older Workers’ Benefit Protection Act of 1990, the Americans With Disabilities
Act, the Employee Retirement Income Security Act of 1974 (including, without
limitation, any claim for severance pay), the Virginia Human Rights Law and any
and all other federal, state or local laws, statutes, rules and regulations
pertaining to employment (each as amended) including but not limited to the laws
of the United States and any other country to the extent applicable; any and all
Claims under state contract or tort law; any and all Claims based on the design
or administration of any Company employee benefit plan or program or arising
under any Company policy, procedure, or employee benefit plan, including, but
not limited to, the Severance Plan; any and all Claims for wages, commissions,
bonuses, continued employment with the Company in any position, and
compensatory, punitive or liquidated damages; and any and all Claims for
attorneys’ fees and costs. Notwithstanding the foregoing, nothing contained
herein shall interfere with or waive your right to enforce this Agreement in a
court of competent jurisdiction;

 

(b)                                      If you commence, continue, join in, or
in any other manner attempt to assert any Claim released herein against any
Released Party or otherwise breach the promises made in this Agreement, you
shall reimburse the Released Parties for all attorneys’ fees incurred by the
Released Parties in defending against such a Claim and the Company shall have a
right to the return of all Consideration paid to you pursuant to this Agreement,
together with interest thereon, and to cease furnishing to you any further
Consideration

 

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described in this Agreement; provided that this right of return of such
Consideration and the cessation of payment of further Consideration is without
prejudice to the Released Parties’ other rights hereunder, including any right
to obtain an agreement and release of any and all claims against the Released
Parties; and

 

(c)                                       You agree (i) that you will not bring
any lawsuits or claims of any kind against the Company, any of its related
entities or any Released Party; (ii) that you will not accept the benefits of
any lawsuits or claims of any kind brought on your behalf against the Company,
any of its related entities or any Released Party; and (iii) that if you are
nevertheless awarded any such benefits you will pay them to the Company.

 

5.                                            The Company is providing you with
the benefits described in this Agreement solely to ease the impact of your
separation from employment with the Company. The fact that the Company is
offering these benefits to you should not be understood as nor is it intended to
be an admission that the Company, any of its related entities or any Released
Party has violated your rights (or the rights of anyone else) in any manner
whatsoever.

 

6.                                            You will not, unless (i) required
by law, or (ii) the information in question has been disclosed by the Company in
a proxy statement filed with the U.S. Securities and Exchange Commission,
disclose to anyone other than members of the Arlington Legal Group and the
Arlington Human Resources Group any information regarding the following:

 

(a)                                       Any information regarding the
practices, procedures, trade secrets, inventions, technology, customer lists, or
product marketing of the Company or any of its related entities or any Released
Party.

 

(b)                                      The terms of this Agreement, the
benefits being paid under it or the fact of such payment, except that you may
disclose this information to your attorney, accountant or other professional
advisor to whom you must make the disclosure in order for them to render
professional services to you. You will instruct them, however, to maintain the
confidentiality of this information just as you must. In addition, you will not
make, or cause to be made, any statements, observations or opinions, or
communicate any information (whether oral or written) (collectively
“Statements”) including Statements to the press, media, Company employees,
clients, customer, contractors or any other party, that disparage or are likely
in any way to harm the reputation of the Company, any of its related entities or
any Released Party. Breach of this provision shall be considered material.

 

7.                                            In the event that you breach any
of your obligations under this Agreement, including but not limited to the
provisions of Sections 3, 4, 6, 8, 10, 11, 12, 13 or 14 of this Agreement, or as
otherwise imposed by law, the Company will be entitled to recover the benefits
paid under this Agreement and to obtain all other relief provided by law or
equity.

 

8.                                            By executing this Agreement, you
agree and acknowledge that except for the payments, benefits and promises
described in this Agreement, you shall not to be entitled to any further
payments, benefits, or promises from the Company. This Agreement shall be
governed by Virginia law and you hereby submit to and agree that the exclusive
jurisdiction for any suit, action or proceeding involving this Agreement will be
any federal or state court located in Virginia. If any provision of this
Agreement is deemed to be unenforceable, it shall not affect the enforceability
of the remaining provisions of this Agreement. This document contains the entire
agreement between you and the Company concerning the subject matter contained
herein.

 

9.                                            The parties acknowledge and agree
that any amount paid to you pursuant to this Agreement may at the Company’s sole
discretion be set off against any amount or sum for which the Company is (or at
any time

 

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may be) held liable to pay you with respect to or in connection with the
relationship between you and the Company.

 

10.                                      You covenant and agree that you shall
not voluntarily cooperate with, encourage or instigate any third party, person
or entity in threatening, preparing, commencing or prosecuting any legal action
or proceeding against any Released Party by consulting or meeting with any such
third party, person or entity or any attorney or representative thereof, or
providing any assistance, information, documents, testimony or representation to
or for the benefit of any such third party, person or entity or any attorney or
representative thereof. Provided, however, that this paragraph shall not be
interpreted to limit your ability to respond to questions or otherwise provide
information to or cooperate with the Arlington Legal Group and the Arlington
Human Resources Group. Breach of this provision shall be considered material.

 

11.                                      Nothing contained in this Agreement
shall be deemed to preclude you from providing truthful testimony or information
pursuant to a valid court order or similar legal process; provided, however,
that prior to making any such disclosure, you will promptly notify the Company
of such request or requirement so that the Company, if it so chooses, will have
sufficient opportunity to seek to avoid or minimize the required disclosure
and/or to obtain an appropriate protective order or other appropriate relief. In
any such case, you will use your reasonable efforts to cooperate with the
Company in its efforts to avoid or minimize the required disclosure and/or to
obtain such protective order or other relief.

 

12.                                      You agree to provide reasonable
cooperation at mutually agreeable times and places to the Released Parties in
connection with matters with which you were involved, including, but not limited
to, the defense of any and all Claims, which are asserted by any person or
entity other than you concerning or related to any matter that arises out of
events or occurrences during your involvement in the business and affairs of the
Company, and you will be reimbursed for reasonable out of pocket expenses
incurred in connection therewith. Except as otherwise required pursuant to
applicable law or court order, or as permitted under Section 11, and in each
such case, provided that you comply with the provisions of Section 11, you
further agree to maintain in strict confidence any information or knowledge you
have regarding Claims against the Released Parties. You agree to communicate
with any party adverse to the Released Parties, or with a representative, agent
or legal counsel for any such Claims solely through legal counsel for the
Released Parties, although you may at your own expense retain your own counsel
in connection with any such matter.

 

13.                                      You agree that while you are receiving
severance payments from the Company pursuant to Section 3(a) above, you will not
(i) be employed by or provide services or advice to any competitor of the
Company or any Released Party or (ii) otherwise compete with the Company or any
Released Party. For avoidance of doubt the parties hereto acknowledge and agree
that this non-compete provision includes a prohibition on you: (i) attempting to
or actually hiring or contracting for services from, or inducing or encouraging
anyone else to hire or contract for services from, any employees or contractors
working for or at the Company; or (ii) attempting to or actually inducing or
encouraging any employees or contractors working for or at the Company to leave
the Company; in each case without the prior approval of the Company.

 

14.                                      You acknowledge (i) that you have not
been forced or pressured in any manner whatsoever to sign this Agreement;
(ii) that you have agreed to all of its terms voluntarily; (iii) that you have
read this Agreement in its entirety and understand the terms of the Agreement;
and (iv) that you have been given at least twenty-one (21) days to consider all
of its terms and to consult with counsel of your choice. You may revoke your
acceptance of this Agreement by sending written notice of your intent to revoke
your acceptance within seven (7) days of your execution of this Agreement, to
the Company, with such written notice addressed to the Company at the following
address: 4300 Wilson Boulevard, Arlington, Virginia 22203. If you do not revoke
your acceptance, your acceptance and this Agreement will become effective on the
eighth

 

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day after the date on which it is signed (the “Effective Date”). You further
agree that in the event that you revoke your acceptance of this Agreement prior
to the eighth (8th) day after execution of this Agreement, this Agreement and
the promises contained herein shall automatically be deemed null and void.

 

To accept this Agreement, please date and sign this document and return it to
me. An extra copy for your files is enclosed. We wish you success in your future
endeavors.

 

Very truly yours,

 

The AES Corporation

 

By:

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Name:

Paul Hanrahan

 

Title:

President and Chief Executive Officer

 

BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE (i) THAT I HAVE NOT BEEN FORCED OR
PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT; (ii) THAT I HAVE HAD
AT LEAST 21 DAYS TO CONSIDER ALL OF THE TERMS OF THIS AGREEMENT WITH COUNSEL OF
MY CHOICE; (iii) THAT I HAVE READ THIS AGREEMENT IN ITS ENTIRETY AND UNDERSTAND
THE TERMS OF THE AGREEMENT; AND (iv) THAT I VOLUNTARILY AGREE TO THEM. I FURTHER
UNDERSTAND THAT I MAY REVOKE MY ACCEPTANCE OF THIS AGREEMENT BY SENDING WRITTEN
NOTICE OF MY INTENT TO REVOKE MY ACCEPTANCE ADDRESSED TO THE COMPANY AT THE
FOLLOWING ADDRESS: 4300 WILSON BOULEVARD, ARLINGTON, VIRGINIA, 22203 WITHIN
SEVEN DAYS AFTER THIS AGREEMENT HAS BEEN EXECUTED AND RETURNED BY ME. IF I HAVE
NOT REVOKED MY ACCEPTANCE, THIS AGREEMENT WILL BECOME EFFECTIVE ON THE EIGHTH
DAY AFTER IT IS EXECUTED AND RETURNED TO THE COMPANY (THE “EFFECTIVE DATE”).

 

By:

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William Luraschi

 

Agreed to this 14th day of May 2008

 

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