clearwayllcex10410-q2022






  272895471v.6  _______________________________________  CLEARWAY ENERGY, INC. ANNUAL INCENTIVE PLAN  _______________________________________  ARTICLE I     PURPOSE OF THE PLAN  This Plan shall be known as the Clearway Energy, Inc. Annual Incentive Plan (the “Plan”).   Clearway Energy, Inc. (the “Company”) originally adopted the Plan effective January 1, 2018.   The Plan was amended and restated by the Company as of January 1, 2020 and was most recently  amended and restated effective as of January 1, 2022.  The Plan will remain in effect until  terminated by the Board of Directors of the Company (the “Board”), the Compensation Committee  of the Board (the “Committee”).  The Plan is designed to attract, motivate, and retain in its employ  persons of high competence by providing certain employees of the Company, and any applicable  Affiliates, an opportunity to earn an annual Award through the achievement of specific pre- established Company and, where applicable, individual performance goals.  Capitalized terms and  phrases not otherwise defined herein shall have the meanings ascribed thereto in ARTICLE II  hereof.  ARTICLE II     DEFINITIONS  For purposes of the Plan, the following terms shall have the meanings set forth below:  Section 2.1 “Affiliate” means (a) any subsidiary corporation of the Company (or its  successors), (b) any corporation, trade or business (including, without limitation, a partnership or  limited liability company) which is directly or indirectly controlled fifty percent (50%) or more  (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by  the Company (or its successors), or (c) any other entity (including its successors) which is  designated as an Affiliate by the Board.   Section 2.2 “Award” means an award provided for under the Plan entitling a Participant  to receive an amount payable in cash for a particular performance period on such terms and  conditions determined by the Committee in its sole discretion in accordance with the terms hereof  and the terms of any such Award.  Section 2.3 “Board” shall have the meaning set forth in ARTICLE I hereof.  Section 2.4 “Cause” means, as to any Participant (a) “Cause”, as defined in any  employment, consulting or similar agreement between the Participant and the Company or an  Affiliate in effect at the time of the Participant’s separation, or (b) in the absence of any such  employment, consulting or similar agreement (or the absence of any definition of “Cause”  contained therein), the occurrence of any of the following:  





 






 2    272895471v.6  (i) the Participant’s willful misconduct or gross negligence in the performance  of the Participant’s duties to the Company or an Affiliate that has or could  reasonably be expected to have an adverse effect on the Company or an  Affiliate;  (ii) the Participant’s willful failure to perform the Participant’s duties to the  Company or an Affiliate (other than as a result of death or a physical or  mental incapacity);  (iii) the Participant’s indictment for, conviction of, or pleading of guilty or nolo  contendere to, a felony or any crime involving moral turpitude;  (iv) the Participant’s performance of any material act of theft, fraud,  malfeasance or dishonesty in connection with the performance of the  Participant’s duties to the Company or an Affiliate; or  (v) the Participant’s breach of any written agreement between the Participant  and the Company or an Affiliate, or the Participant’s violation of the  Company’s code of conduct or other written policy.  For purposes of the Plan, no such termination for Cause may be made pursuant to  subsections (i), (ii) and (v) above, until the Participant has been given written notice detailing the  specific Cause event and a period of thirty (30) days following receipt of such notice to cure such  event (if susceptible to cure); provided that, the Participant’s right to cure shall not apply if there  are egregious, habitual or repeated breaches by the Participant.  Section 2.5 “Code Section 409A” means Section 409A of the Internal Revenue Code of  1986, as amended, and the Department of Treasury regulations and other official guidance  promulgated thereunder.  Section 2.6 “Committee” shall have the meaning set forth in ARTICLE I hereof.  Section 2.7 “Company” shall have the meaning set forth in ARTICLE I hereof.  Section 2.8 “Detrimental Activity” means a Participant’s: (a) disclosure to anyone  outside the Company or any of its Affiliates, or the use in any manner other than in the furtherance  of the Company’s or any of its affiliates’ business, without written authorization from the  Company, of any confidential information or proprietary information, relating to the business of  the Company or any of its affiliates that is acquired by a Participant prior to the Participant’s  termination; (b) activity while employed or performing services that results, or if known could  result, in the Participant’s termination of employment that is classified by the Company as a  termination for Cause; (c) attempt, directly or indirectly, to solicit, induce or hire (or the  identification for solicitation, inducement or hiring of) any employee of the Company or any of its  affiliates to be employed by, or to perform services for, the Participant or any Person with which  the Participant is associated (including, but not limited to, due to the Participant’s employment by,  consultancy for, equity interest in, or creditor relationship with such Person) or any Person from  which the Participant receives direct or indirect compensation or fees as a result of such  solicitation, inducement or hire (or the identification for solicitation, inducement or hire) without,  





 






 3    272895471v.6  in all cases, written authorization from the Company; (d) attempt, directly or indirectly, to solicit  in a competitive manner any current or prospective customer of the Company or any of its affiliates  without, in all cases, written authorization from the Company; (e) making of negative comments  regarding, or otherwise disparaging (or inducing others to do so), the Company, its subsidiaries or  parents, or any of their respective officers, directors, employees, shareholders, members, agents or  products; (f) without written authorization from the Company, rendering of services for any  organization, or engaging, directly or indirectly, in any business, which is competitive with the  Company or its affiliates, or rendering of services to such organization or business if such  organization or business is otherwise prejudicial to or in conflict with the interests of the Company  or any of its affiliates; provided, however, that competitive activities shall only be those  competitive with any business unit or affiliate of the Company with regard to which the Participant  performed services at any time within the two (2) years prior to the Participant’s termination of  employment; or (g) material breach of any agreement between the Participant and the Company  or any of its Affiliates (including, without limitation, any employment agreement or any  noncompetition, nonsolicitation or other restrictive covenants agreement).  Section 2.9 “Disability” means a disability that entitles the Participant to payment of  monthly disability payments under any Company long-term disability plan.    Section 2.10 “Participant” means any service provider of the Company or an Affiliate  who is selected to participate in the Plan in accordance with ARTICLE IV hereof.  Section 2.11 “Person” means an individual, a partnership, a corporation, a limited  liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated  organization or a governmental entity or any department, agency or political subdivision thereof.  Section 2.12 “Plan” shall have the meaning set forth in ARTICLE I hereof.    Section 2.13 “Qualified Retirement” means, unless otherwise determined by the  Committee, (a) termination of service after at least ten (10) years of service by such employee and  (b) attaining at least fifty-five (55) years of age.   Section 2.14 “Severance Eligible Termination” means the involuntary termination of a  Participant’s employment by the Company or an Affiliate in a manner that makes the Participant  eligible to participate in a severance plan sponsored by the Company or an Affiliate.  The  Committee shall have the authority to determine which, if any, severance plans of the Company  or its Affiliates apply toward the existence of a Severance Eligible Termination.  ARTICLE III     ADMINISTRATION  Section 3.1 General.  Subject to the provisions of the Plan, the Committee shall be  authorized to (a) select Participants, (b) determine the target payment amount of Awards granted  to Participants under the Plan, (c) determine the conditions and restrictions, if any, subject to which  the payment of Awards will be made, (d) certify that the conditions and restrictions applicable to  the payment of any Award have been met, (e) construe and interpret the Plan or any Award, and  (f) adopt, amend, or rescind such rules and regulations, and make such other determinations, for  





 






 4    272895471v.6  carrying out the Plan as it may deem appropriate.  Decisions of the Committee on all matters  relating to the Plan shall be in the Committee’s sole discretion and shall be conclusive and binding  upon the Participants, the Company and all other parties.  The validity, construction, and effect of  the Plan and the rules and regulations relating to the Plan shall be determined in accordance with  applicable federal and state laws, rules and regulations promulgated pursuant thereto.  Section 3.2 Plan Expenses.  The expenses of the Plan shall be borne by the Company.  Section 3.3 Unfunded Arrangement.  Neither the Company nor its Affiliates shall be  required to establish any special or separate fund or make any other segregation of assets to assume  the payment of any Award under the Plan.  The Plan shall be “unfunded” for all purposes and  Awards hereunder shall be paid out of the general assets of the Company as and when the Awards  are payable under the Plan.  All Participants shall be solely unsecured general creditors of the  Company.  If the Company decides in its sole discretion to establish any advance accrued reserve  on its books against the future expense of the Awards payable hereunder, or if the Company  decides in its sole discretion to fund a trust from which benefits under the Plan may be paid from  time to time, such reserve or trust shall not under any circumstance be deemed to be an asset of  the Plan.  Section 3.4 Accounts and Records.  The Committee shall maintain such accounts and  records regarding the fiscal and other transactions of the Plan and such other data as may be  required to carry out its functions under the Plan and to comply with all applicable laws.  Section 3.5 Retention of Professional Assistance.  The Committee may employ such  legal counsel, accountants and other persons as may be required in carrying out its duties in  connection with the Plan.  ARTICLE IV     PARTICIPATION; PAYMENT OF AWARDS  Section 4.1 Participation.  Participation in the Plan shall be as determined by the  Committee and/or the President and Chief Executive Officer of the Company and set forth in an  Award; provided that, in no event shall any such determination of the President and Chief  Executive Officer relate to an individual who is “executive officer” under the Securities Exchange  Act of 1934, as amended.  For the avoidance of doubt and notwithstanding an Award, no service  provider of the Company who is not an employee of the Company or an Affiliate shall have any  right to be selected as a Participant.  Nothing in the Plan shall interfere with or limit in any way  any right of the Company or any of its Affiliates to terminate any Participant’s employment or  service relationship at any time and for any reason (or no reason), nor confer upon any Participant  any right to continued service with the Company or any of its Affiliates for any period of time or  to continue such Participant’s present (or any other) rate of compensation.  No Participant who is  provided the opportunity to receive an Award under the Plan shall have any right to an opportunity  to receive future Awards under the Plan.  By accepting any payment under the Plan, each  Participant and each Person claiming under or through such Participant shall be conclusively  deemed to have indicated such Person’s acceptance and ratification of, and consent to, any action  taken under the Plan by the Company or the Committee.  Determinations made by the Committee  





 






 5    272895471v.6  or the Company under the Plan need not be uniform and may be made selectively among eligible  individuals under the Plan, whether or not such individuals are similarly situated.    Section 4.2 Design of Awards.  Awards provided under the Plan shall be denominated  by reference to performance metrics of the Company, such as EBITDA, free cash flow, and any  other factors, as determined by the Committee, and shall represent the right to receive a payment  or payments on any terms and conditions as may be determined by the Committee in its sole  discretion.  Section 4.3 Vesting of Awards.  The Committee may, in its sole discretion, impose such  vesting or other restrictions on Awards provided under the Plan as it determines, and may impose  vesting conditions on any Award or accelerate the vesting of any Award granted hereunder at any  time.  The requirements for vesting of an Award may be based on the continued service of the  Participant with the Company or its Affiliates for a specified time period (or periods) and/or on  the attainment of a specified performance goal (or goals) established by the Committee in its sole  discretion.  Section 4.4 Payment of Awards.  (a) General.  Awards under the Plan shall be paid in a single lump sum cash  payment at such time or times as determined by the Committee in its sole  discretion taking into account the requirements of Code Section 409A.  (b) Release.  Upon acceptance of payment of any amount pursuant to an Award  hereunder, the Participant shall be deemed to have unconditionally released  and discharged the Company and any and all of the Company’s parent  companies, partners, Affiliates, successors and assigns and any and all of  its and their past and/or present officers, directors, members, partners,  agents, employees and representatives from any and all claims in  connection with, or in any manner related to or arising under, the Plan with  respect to such Award, including the determination of the amount payable  under such Award and any other matter associated therewith.  Section 4.5 No Entitlement to an Award Unless Employed on Date Payment is Made.   Unless otherwise determined by the Committee in an Award, a Participant is not entitled to any  payment pursuant to an Award unless the Participant is employed by the Company or any of its  Affiliates on the date such Award is paid or otherwise settled.  Section 4.6 Impact of Termination of Employment due to death, Disability, and  Qualified Retirement.  If a Participant’s employment terminates due to such Participant’s death or  Disability, the Participant or his or her estate (in the case of death) may be paid, at the discretion  of the Committee, a prorated portion of the target Award based upon the Participant’s period of  service.  Payments of an Award to a Participant (or his or her estate) who terminates employment  due to death or Disability shall be made during the next administratively feasible payroll period  following termination of employment (but in no event longer than 2 1⁄2 months after the end of the  calendar year in which the Participant’s termination of employment occurs).  If a Participant’s  employment terminates due to such Participant’s Qualified Retirement prior to the payment date  





 






 6    272895471v.6  for an Award, the Participant shall be paid a prorated portion of his or her outstanding Award  based upon the Participant’s completed period of service during the period that relates to such  Award and satisfaction of the underlying performance goals (if any).  Payments of Awards to  Participants who terminate as a result of Qualified Retirement shall be paid at the same time such  Awards would have been paid in the absence of such termination and based upon satisfaction of  the underlying performance goal (or goals) (but in no event longer than 2 1⁄2 months after the end  of the calendar year in which the Participant’s termination of employment occurs).    Section 4.7 Impact of Termination of Employment due to Severance Eligible  Termination.  A Participant who has involuntarily terminated employment with the Company  through a Severance Eligible Termination may be paid, at the discretion of the Committee, a  prorated portion of the Award based upon the Participant’s period of service.  No Participant (or  his or her estate) may receive payment under the Plan under this Section 4.7 without first executing  and delivering to the Company a complete general release of all claims, known or unknown,  against the Company and its affiliates, including employment-related claims and all rights to  payments under the Plan within the release or revocation period provided by the Company (or as  applicable, an affiliate).  Payments of Awards to Participants under this Section 4.7 shall be made  following the completion of the general release of claims referenced in this Section 4.7; provided  that, in the event that the forty-five (45)-day period spans two calendar years, payment shall be  made in the second calendar year.    Section 4.8 Detrimental Activity.  Unless otherwise determined by the Company, (i) in  the event that a Participant engages in a Detrimental Activity, all unpaid Awards (whether vested  or unvested) that were previously provided to the Participant shall be immediately forfeited  without any further action by the Company; and (ii) as a condition to receiving any payment in  respect of any Award hereunder, the Participant may be required to certify (or shall be deemed to  have certified) at the time of payment in a manner acceptable to the Company that the Participant  is in compliance with the terms and conditions of the Plan and that the Participant has not engaged  in, and does not intend to engage in, any Detrimental Activity.  Section 4.9 Changes in Capital Structure.  In the event that any dividend or other  distribution (whether in the form of cash, shares, other securities, or other property),  recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up,  spin-off, combination, repurchase, change in control or exchange of shares or other securities of  the Company, or other corporate transaction or event affects an Award, the Committee may, in its  sole discretion, take such action as it deems appropriate, including, but not limited to, (a) canceling  any outstanding Award, (b) replacing Awards with substitute awards on such terms and conditions  as the Committee determines.  Any actions or determinations of the Committee under this Section  4.9 need not be uniform as to all outstanding Awards, nor treat all Participants identically.  ARTICLE V     MISCELLANEOUS  Section 5.1 Successors.  For purposes of the Plan, the Company shall include any and  all successors or assignees, whether direct or indirect, by purchase, merger, consolidation or  otherwise, to all or substantially all of the business or assets of the Company and such successors  





 






 7    272895471v.6  and assignees shall perform the Company’s obligations under the Plan, in the same manner and to  the same extent that the Company would be required to perform if no such succession or  assignment had taken place.  In the event that the surviving corporation in any transaction to which  the Company is a party is a subsidiary of another corporation, the ultimate parent corporation of  such surviving corporation shall cause the surviving corporation to perform the obligations of the  Company under the Plan in the same manner and to the same extent that the Company would be  required to perform such obligations if no such succession or assignment had taken place.  In such  event, the term “Company,” as used in the Plan, shall mean the Company, as hereinbefore defined,  and any successor or assignee (including the ultimate parent corporation) to the business or assets  thereof which by reason hereof becomes bound by the terms and provisions of the Plan.  No rights  under the Plan shall be assignable by the Participant or subject to any pledge or encumbrance of  any nature.  Section 5.2 Nontransferability.  No Award or right to receive payment under the Plan  may be transferred other than by will or the laws of descent and distribution. Any transfer or  attempted transfer of an Award or a right to receive payment under the Plan contrary to this Section  5.2 shall be void.  In the event of an attempted transfer by a Participant of an Award or a right to  receive payment pursuant to the Plan contrary to this Section 5.2 hereof, the Committee may in its  sole discretion terminate such Award or right.  Section 5.3 Withholding Taxes.  The Company or any of its Affiliates shall be entitled,  if necessary or desirable, to withhold from any amount due and payable by the Company to any  Participant (or secure payment from such Participant in lieu of withholding) the amount of any  withholding or other tax due from the Company with respect to any amount payable to such  Participant under the Plan.  Section 5.4 Amendment and Termination of the Plan.  The Committee reserves the right  to amend or terminate, in whole or in part, any or all of the provisions of the Plan, including any  or all exhibits and annexes attached hereto, or any Award provided hereunder at any time, with or  without notice.  By receiving any Award pursuant to the Plan, a Participant acknowledges and  agrees that certain determinations require certain “judgment calls” by the Committee or the  Company and that such determination shall be made in the sole discretion of the Committee or the  Company, as applicable.  The Plan, together with all exhibits and annexes hereto and any Award  made pursuant to the Plan, sets forth the entire agreement of the parties hereto in respect of the  subject matter contained herein and supersedes any and all prior agreements or understandings  between a Participant and the Company with respect to the subject matter hereof.  Section 5.5 Severability.  Whenever possible, each provision of the Plan shall be  interpreted in such manner as to be effective and valid under applicable law, but if any provision  of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be  ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder  of the Plan.  Section 5.6 Titles and Headings.  The headings and titles used in the Plan are for  reference purposes only and shall not affect in any way the meaning or interpretation of the Plan.  





 






 8    272895471v.6  Section 5.7 Governing Law.  The Plan shall be construed in accordance with and  governed by the laws of the state of Delaware (without regard to the legislative or judicial conflict  of laws rules of any state), except to the extent superseded by federal law.   Section 5.8 Clawback.  If the Company, or any of its Affiliates, is required to prepare  an accounting restatement due to the material noncompliance of the Company or Affiliate with  any financial reporting requirement under the securities laws, then any Participant who has been  paid an Award under the Plan based upon or affected by the restated financial report shall be  required, at the discretion of the Committee, to reimburse the Company for all or any portion of  such Award paid to such Participant.  Section 5.9 Code Section 409A.  Although the Company makes no guarantee with  respect to the tax treatment of payments hereunder and shall not be responsible in any event with  regard to non-compliance with Code Section 409A, the Plan is intended to either comply with, or  be exempt from, the requirements of Code Section 409A.  To the extent that the Plan is not exempt  from the requirements of Code Section 409A, the Plan is intended to comply with the requirements  of Code Section 409A and shall be limited, construed and interpreted in accordance with such  intent.  Notwithstanding any provision herein to the contrary, if at the time of the Participant’s  separation from service within the meaning of Code Section 409A, the Participant is a “specified  employee” within the meaning of Code Section 409A, any payment hereunder that constitutes a  “deferral of compensation” under Code Section 409A and that would otherwise become due on  account of such separation from service shall be delayed, and payment shall be made in full upon  the earlier of (a) a date during the thirty (30)-day period commencing six (6) months and one (1)  day following such separation from service and (b) the date of the Participant’s death.   Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any  additional tax, interest, income inclusion or other penalty that may be imposed on a Participant by  Code Section 409A or for damages for failing to comply with Code Section 409A.  Section 5.10 No Acquired Rights.  All Awards are made under the Plan at the Company’s  or Committee’s discretion.  The Company assumes no obligation to a Participant under the Plan  with respect to any doctrine or principle of acquired rights or similar concept.  Section 5.11 Accounting Changes.  The Plan shall not be construed to limit or prevent  the Company from adopting or changing any accounting rules, standards, or procedures.  Section 5.12 Beneficiaries.  Unless otherwise determined by the Company or provided  in an Award, if a Participant dies while any Award is outstanding, then any amounts paid pursuant  to an Award (if any) shall be paid to the Participant’s estate.