Exhibit 10.41


 


THE AES
CORPORATION


PERFORMANCE INCENTIVE PLAN

(As Amended and Restated  March 13, 2008)


 


1.             Purpose of the Plan


 


The purpose of the The AES Corporation Performance Incentive Plan (the “Plan”)
is to advance the interests of the Company and its shareholders by providing
incentives to key employees with significant responsibility for achieving
performance goals critical to the success and growth of the Company. The Plan
is designed to: (i) promote the attainment of the Company’s significant
business objectives; (ii) encourage and reward management teamwork across
the entire Company; and (iii) assist in the attraction and retention of
employees vital to the Company’s long-term success.  The Plan has been amended and restated solely
to comply with Section 409A.


 


2.             Definitions


 


For the purpose of the Plan,
the following definitions shall apply:


 


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


 


(b)           “Code” means the
Internal Revenue Code of 1986, as amended, including any successor law thereto.


 


(c)           “Committee”
means the Compensation Committee of the Board, or such other committee as is
appointed or designated by the Board to administer the Plan, in each case which
shall be comprised solely of two or more “outside directors” (as defined under Section 162(m) of
the Code and the regulations promulgated thereunder).


 


(d)           “Company” means The
AES Corporation and any subsidiary entity or affiliate thereof, including
subsidiaries or affiliates which become such after adoption of the Plan.


 


(e)           “Forfeit,”
“Forfeiture,” “Forfeited” means the loss by a Participant of any and
all rights to an award granted under the Plan, including the loss to any
payment of compensation by the Company under the Plan or any award granted
thereunder.


 


(f)            “Participant”
means any person: (1) who satisfies the eligibility requirements set forth
in Paragraph 4; (2) to whom an award has been made by the Committee; and (3) whose
award remains outstanding under the Plan.


 


(g)           “Performance Goal”
means, in relation to any Performance Period, the level of performance that
must be achieved with respect to a Performance Measure.


 


(h)           “Performance Measures”
means any one or more of the following performance criteria, either
individually, alternatively or in any combination, and subject to such
modifications or


 

















 


variations
as specified by the Committee, applied to either the Company as a whole or to a
business unit or subsidiary entity thereof, either individually, alternatively
or in any combination, and measured over a period of time including any portion
of a year, annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years’ results or to
a designated comparison group, in each case as specified by the Committee: cash
flow; cash flow from operations; earnings (including, but not limited to,
earnings before interest, taxes, depreciation, and amortization or some
variation thereof); earnings per share, diluted or basic; earnings per share
from continuing operations; net asset turnover; inventory turnover; capital
expenditures; debt; debt reduction; working capital; return on investment;
return on sales; net or gross sales; market share; economic value added; cost
of capital; change in assets; expense reduction levels; productivity; delivery
performance; safety record and/or performance; stock price; return on equity;
total stockholder return; return on capital; return on assets or net assets;
revenue; income or net income; operating income or net operating income; operating
income adjusted for management fees and depreciation, and amortization; operating
profit or net operating profit; gross margin, operating margin or profit
margin; and completion of acquisitions, business expansion, product
diversification, new or expanded market penetration and other non-financial
operating and management performance objectives.


 


To the extent consistent with Section 162(m) of the Code and
the regulations promulgated thereunder, the Committee may determine that
certain adjustments shall apply, in whole or in part, in such manner as
specified 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; 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 separately
identified in the financial statements and/or notes thereto in accordance with
generally accepted accounting principles.


 


(i)            “Performance
Period” means, in relation to any award, the calendar year or other
period of 12 months or less for which a Participant’s performance is being
calculated, with each such period constituting a separate Performance Period.


 


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


 


(k)           “Retirement”
means retirement of an employee as determined and authorized by the Committee.


 


(l)            Total and Permanent
Disability” means: (1) if the Participant is insured under a
long-term disability insurance policy or plan which is paid for by the Company,
the Participant is totally disabled under the terms of that policy or plan; or (2) if
no such policy or plan exists, the Participant shall be considered to be
totally disabled as determined by the Committee.


 


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3.             Administration
of the Plan


 


(a)           The
management of the Plan shall be vested in the Committee; provided, however,
that all acts and authority of the Committee pursuant to this Plan shall be
subject to the provisions of the Committee’s Charter, as amended from time to
time, and such other authority as may be delegated to the Committee by the
Board. The Committee may, with respect to Participants whom the Committee
determines are not likely to be subject to Section 162(m) of the
Code, delegate such of its powers and authority under the Plan to the Company’s
officers as it deems necessary or appropriate. In the event of such delegation,
all references to the Committee in this Plan shall be deemed references to such
officers as it relates to those aspects of the Plan that have been delegated.


 


(b)           Subject to the terms of the Plan, the
Committee shall, among other things, have full authority and discretion to
determine eligibility for participation in the Plan, make awards under the
Plan, establish the terms and conditions of such awards (including the
Performance Goal(s) and Performance Measure(s) to be utilized) and
determine whether the Performance Goals applicable to any Performance Measures
for any awards have been achieved. The Committee’s determinations under the
Plan need not be uniform among all Participants, or classes or categories of
Participants, and may be applied to such Participants, or classes or categories
of Participants, as the Committee, in its sole and absolute discretion,
considers necessary, appropriate or desirable. The Committee is authorized to
interpret the Plan, to adopt administrative rules, regulations, and guidelines
for the Plan, and may correct any defect, supply any omission or reconcile any
inconsistency or conflict in the Plan or in any award. All determinations by
the Committee shall be final, conclusive and binding on the Company, the
Participant and any and all interested parties.


 


(c)           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. Notwithstanding
any provision of the Plan to the contrary, if an award under this Plan is
intended to qualify as performance-based compensation under Section 162(m) of
the Code and the regulations issued thereunder and a provision of this Plan
would prevent such award from so qualifying, such provision shall be
administered, interpreted and construed to carry out such intention (or
disregarded to the extent such provision cannot be so administered, interpreted
or construed).


 


(d)           The benefits provided under the Plan
are intended to be excepted from coverage under Section 409A and the
regulations promulgated thereunder and shall be construed accordingly.  Notwithstanding any provision of the Plan to
the contrary, if any benefit provided under this Plan is subject to the
provisions of Section 409A and the regulations issued thereunder (and not
excepted therefrom), the provisions of the Plan shall be administered,
interpreted and construed in a manner necessary to comply with Section 409A
and the regulations issued thereunder (or disregarded to the extent such
provision cannot be so administered, interpreted, or construed.)


 


4.             Participation
in the Plan


 


Officers
and key employees of the Company shall be eligible to participate in the Plan.
No employee shall have the right to participate in the Plan, and participation
in the Plan in any one Performance Period does not entitle an individual to
participate in future Performance Periods.


 


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5.             Incentive
Compensation Awards


 


(a)           The Committee may, in its discretion,
from time to time make awards to persons eligible for participation in the Plan
pursuant to which the Participant will earn cash compensation. The amount of a
Participant’s award may be based on a percentage of such Participant’s salary
or such other methods as may be established by the Committee. Each award shall
be communicated to the Participant, and shall specify, among other things, the
terms and conditions of the award and the Performance Goals to be achieved. The
maximum amount of an award that may be earned under the Plan by any Participant
for any Performance Period shall not exceed USD $5,000,000.


 


(b)           With respect to awards that are
intended to be performance-based compensation under Section 162(m) of
the Code, each award shall be conditioned upon the Company’s achievement of one
or more Performance Goal(s) with respect to the Performance Measure(s) established
by the Committee. No later than ninety (90) days after the beginning of the
applicable Performance Period, the Committee shall establish in writing the
Performance Goals, Performance Measures and the method(s) for computing
the amount of compensation which will be payable under the Plan to each
Participant if the Performance Goals established by the Committee are attained;
provided however, that for a Performance Period of less than one 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 an award, the Committee, in
its 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.


 


(c)           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 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) comparisons 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 award that is intended to be
performance-based compensation under Section 162(m) of the Code.


 


6.             Payment
of Individual Incentive Awards


 


(a)           After the end of the Performance
Period, the Committee shall certify in writing the extent to which the
applicable Performance Goals and any other material terms have been
achieved.  Subject to the provisions of
the Plan, earned Awards shall be paid in the first calendar year immediately
following the end of the Performance Period on or before March 15th of
such calendar year (“Payment Date”).  For
purposes of this provision, and for so long as the Code permits, the approved
minutes of the Committee meeting in which the certification is made may be
treated as written certification.


 


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(b)           Unless otherwise determined by the
Committee, Participants who have terminated employment with the Company prior
to the end of a Performance Period for any reason other than death, Retirement
or Total and Permanent Disability, shall Forfeit any and all rights to payment
under any awards then outstanding under the terms of the Plan and shall not be
entitled to any cash payment for such period. If a Participant’s employment
with the Company should terminate during a Performance Period by reason of
death, Retirement or Total and Permanent Disability or the Committee determines
that an award is not Forfeited, the Participant’s award shall be prorated to
reflect the period of service prior to his/her termination, death, Retirement
or Total and Permanent Disability, and shall be paid either to the Participant
or, as appropriate, the Participant’s estate, subject to the Committee’s
certification that the applicable Performance Goals and other material terms
have been met.


 


(c)           The Committee shall determine
whether, to what extent, and under what additional circumstances amounts
payable with respect to an award under the Plan shall be deferred either
automatically, at the election of the Participant, or by the Committee.  All deferrals under The AES Corporation
Restoration Supplemental Retirement Plan shall be made in accordance with terms
and procedures of such plan.


 


7.             Amendment
or Termination of the Plan


 


While
the Company intends that the Plan shall continue in force from year to year,
the Company reserves the right to amend, modify or terminate the Plan, at any
time; provided, however, that no such modification, amendment or termination
shall, without the consent of the Participant, materially adversely affect the
rights of such Participant to any payment that has been determined by the Committee
to be due and owing to the Participant under the Plan but not yet paid. Any and
all actions permitted under this Section 7 may be authorized and performed
by the Committee in its sole and absolute discretion.


 


Notwithstanding
the foregoing or any provision of the Plan to the contrary, the Committee may
at any time (without the consent of the Participant) modify, amend or terminate
any or all of the provisions of this Plan to the extent necessary to conform
the provisions of the Plan with Section 409A or Section 162(m) of
the Code, the regulations promulgated thereunder or an exception thereto regardless
of whether such modification, amendment, or termination of the Plan shall
adversely affect the rights of a Participant under the Plan.  Notwithstanding, (i) Section 409A
may impose upon the Participant certain taxes or other charges for which the
Participant is and shall remain solely responsible, and nothing contained in
this Plan shall be construed to obligate the Company for any such taxes or
other charges, and (ii) in no event shall the Committee or Board (or any
member thereof), or the Company (or its employees, officers, directors or
affiliates) have any liability to any Participant (or any other person) due to
the failure of the Plan to satisfy the requirements of Section 409A or any
other applicable law.


 


8.             Rights
Not Transferable


 


A Participant’s rights under
the Plan may not be assigned, pledged, or otherwise transferred except, in the
event of a Participant’s death, to the Participant’s designated beneficiary, or
in the absence of such a designation, by will or by the laws of descent and
distribution.


 


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9.             Funding/Payment


 


The Plan is not funded and all awards payable
hereunder shall be paid from the general assets of the Company. No provision
contained in this Plan and no action taken pursuant to the provisions of this
Plan shall create a trust of any kind or require the Company to maintain or set
aside any specific funds to pay benefits hereunder. To the extent a Participant
acquires a right to receive payments from the Company under the Plan, such
right shall be no greater than the right of any unsecured general creditor of
the Company.  If any earned Award is not
paid by the Payment Date due to administrative impracticability, such earned
Award will be paid, without earnings, as soon as administratively practicable
thereafter.


 


10.          Withholdings


 


The Company shall have the
right to withhold from any awards payable under the Plan or other wages payable
to a Participant such amounts sufficient to satisfy federal, state and local
tax withholding obligations arising from or in connection with the Participant’s
participation in the Plan and such other deductions as may be authorized by the
Participant or as required by applicable law.


 


11.          No
Employment or Service Rights


 


Nothing
contained in the Plan shall confer upon any Participant any right with respect
to continued employment with the Company (or any of its affiliates) nor shall
the Plan interfere in any way with the right of the Company (or any of its
affiliates) to at any time reassign the Participant to a different job, change
the compensation of the Participant or terminate the Participant’s employment
for any reason.


 


12.          Other
Compensation Plans


 


Nothing contained in this
Plan shall prevent the Corporation from adopting other or additional
compensation arrangements for employees of the Corporation, including
arrangements that are not intended to comply with Section 162(m) of
the Code.


 


13.          Governing
Law


 


The
Plan shall be governed by and construed in accordance with the laws of the State
of Delaware, without giving effect to its conflict of law provisions.


 


14.          Effective
Date


 


The
Plan’s material terms have been approved by the Company’s shareholders.  This amendment and restatement of The AES
Corporation Performance Incentive Plan has been duly executed by the undersigned
and is effective this 13th day of March 2008.


 


	
   

  	
  The AES Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Jay L. Kloosterboer,
  Executive Vice

  
	
   

  	
   

  	
  President, Business
  Excellence

  
				



 


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