Document:

EXHIBIT 10.1

 

12 December 2005

 

Mr. Tom Wu

1A Ardmore Park

#18-02 Ardmore Point

Singapore, 259945

 

Offer Letter and Temporary Expatriate Assignment
to Singapore

 

Dear Tom:

 

I am pleased to take this
opportunity to confirm our offer to you for an international assignment with
ESI as Vice President Worldwide Sales currently based in Singapore, reporting
directly to me, with an estimated start date of Monday, January 16, 2006
or earlier, if possible.

 

The terms and conditions
of your assignment are set forth in this letter and in the Company’s relevant
policies.  Such policies may be revised
from time to time as legal requirements may dictate or if the Company adopts
new practices or for any other reasons solely at the discretion of ESI.

 

SALARY:  Your base salary in this position will be
$260,000 USD per year.  Your base salary
will be subject to review by me and the Board of Directors on an annual basis.

 

Your salary and other
regular compensation will continue to be paid in US dollars by the US payroll
system and is subject to appropriate taxation.

 

STOCK
OPTIONS:  As part of
employment with ESI you will be eligible for non-qualified stock options of ESI
stock in the amount of 80,000 shares issued under the terms and conditions of
ESI’s 2004 Stock Option Incentive Plan and subject to Board of Director’s
approval.  The option price will be the
market closing price on your first day of employment.  For information about the non-qualified stock
option incentive plan, refer to the enclosed 2004 Stock Option Incentive Plan
Prospectus.  Such options will be
immediately vested but have a restricted sale period as follows: one-fourth
after (1) year of service and an additional one-fourth after each
subsequent year of service to the end of four (4) years of compensable service.

 

ESI will not tax equalize
stock option income.

 

Future options and shares
may be offered in accordance with the Executive Compensation Program determined
by the Compensation Committee and approved by the ESI Board of Directors on an
annual basis.  This in no way guarantees
or promises any additional stock options after this initial grant.

 

1

 

EXECUTIVE
BONUS PLAN:  You will
be eligible to participate in the Executive Bonus Program with an annual target
payout of 60% with the potential, based upon the bonus factors as assessed by
ESI of individual performance, company revenue and profit for up to 120% of
your base salary.  Your bonus for ESI
fiscal year 2006 will be pro-rated based on 11/12ths of a year and will encompass your service from your start
date through May 31, 2006.  It will
be paid in or near August of 2006. 
ESI’s fiscal year begins on June 1 and ends on May 31of the
following calendar year.

 

As a regular full-time
employee, you are eligible to participate in ESI’s employee benefit
program.  The benefits available to you
are defined in plan documents and may change from time to time.  Your performance and salary will be reviewed
in accordance with ESI’s employment policies.

 

On your first day of
employment and even though you will be working in Singapore you will be
required to complete various employment documents.  The Immigration Reform and Control Act of
1986 require all employers to verify eligibility for employment in the United
States.  Therefore, this offer is
contingent upon proof of your eligibility to work indefinitely in the United
States (via Federal Form I-9 and supporting documents).  On your first day of employment these
documents can be signed and completed in front of an authorized ESI
representative and sent via an express mail service to Ellen Raim at ESI’s
address in Portland, Oregon.

 

NON-COMPETITION
AND CONFIDENTIALITY AGREEMENTS:  As a condition of this offer you will be
required to sign a non-competition agreement at the outset of employment.  This agreement will limit your ability to
compete with ESI’s business competitors for a period of one year after the
termination of your employment with ESI regardless of the circumstances of the
termination.

 

Should you have a non-competition
agreement in effect with your current employer which prevents you from fully
meeting the requirements of this position this offer will be considered null
and void.

 

Signing an ESI
Confidentiality agreement is also a condition of this offer.  The Confidentiality Agreement requires you
maintain the confidentiality of any and all information regarding ESI’s
practices, products, research and strategic plans for the duration of your
employment and thereafter.

 

EXPATRIATE
PACKAGE:  In
recognition of your Singapore location you will receive a consolidated
expatriate package to provide you with purchasing power generally equivalent to
that in the U.S. at your current salary level. 
You will receive this package until the end of August 2007 when you
will be expected to continue your ESI employment at our Portland, Oregon
headquarters.

 

The total annual cost to
ESI including taxes of this expatriate package (including expatriate benefits,
cost-of-living allowance, travel and immigration documents, tax equalization
and tax return preparation) will not exceed US$ 200,000.  Any costs incurred above this amount will be

 

2

 

your financial
responsibility to bear.  ESI will assume
no responsibility for costs incurred beyond this fixed limit.

 

The expatriate benefits
indicated below will be limited to the lesser of the actual expense incurred or
the annual maximum amount indicated below. 
Payment of these benefits will be based on receipts submitted by you to
ESI for reimbursement or by ESI making the payment directly to a third party
provider on your behalf.

 

	
  EXPATRIATE BENEFITS

  	
   

  	
  ANNUAL MAXIMUM

  	
   

  
	
  •

  	
   

  	
  Host Housing
  Rental

  	
   

  	
  US$

  	
  62,000

  	
   

  
	
  •

  	
   

  	
  Host Utilities

  	
   

  	
  US$

  	
  5,400

  	
   

  
	
  •

  	
   

  	
  Car Lease

  	
   

  	
  US$

  	
  16,800

  	
   

  
	
  •

  	
   

  	
  Car Petrol

  	
   

  	
  US$

  	
  2,250

  	
   

  
	
  •

  	
   

  	
  Children
  Education Costs (including fees and transportation)

  	
   

  	
  US$

  	
  40,000

  	
   

  
	
  •

  	
   

  	
  U.S. Household
  Goods Storage (including insurance)

  	
   

  	
  US$

  	
  3,500

  	
   

  
	
  •

  	
   

  	
  Annual Home
  Leave Airfare (yourself and family)

  	
   

  	
  US$

  	
  8,000

  	
   

  

 

The annual maximum
amounts are fixed for the entire length of your Singapore assignment and will
not change.

 

The expatriate benefits
above will terminate immediately upon your repatriation to the U.S or your
voluntary or involuntary termination at any time during your overseas
assignment.

 

COST-OF-LIVING
ALLOWANCE

You will receive an
annual cost-of-living allowance in the amount of US$15,000,
to offset the differences in the cost of living between the home and host
country locations.  This will be paid as
part of your bi-monthly U.S. payroll. 
Generally, the purpose of the differential is to cover the excess cost
of personal expenditures in the host country. 
These costs include items such as food at home and away from home,
furnishings and household operations, clothing, medical and personal care, as
well as recreation.  This amount is fixed
for the entire length of your Singapore assignment and will not change.

 

The cost-of-living
allowance will terminate immediately upon your repatriation to the U.S or your
voluntary or involuntary termination at any time during your overseas
assignment.

 

HOME PURCHASE IN SINGAPORE

There may be significant
tax consequence associated with the purchase of housing in a host country.  Accordingly, purchasing of housing in the
host country is strongly discouraged and if you choose to purchase housing
in the host country:

 

•                 No
host housing benefit (as described above) will be provided;

 

•                 No
assistance will be provided for the purchase, sale, or operation of such
housing;

 

•                 Any
costs arising from such home ownership will be borne entirely by you (including
closing costs of either purchase or sale);

 

3

 

•                 The
ESI recognizes no responsibility for losses on such housing (whether those
losses are a result of market conditions, exchange rate fluctuations, taxes or
any other cause); and

 

•                 Should
the purchase or sale of the housing increase your tax liability in either the
host or home country, you will also be responsible for this increased cost.

 

TRAVEL AND IMMIGRATION DOCUMENTS

It is
your responsibility to ensure that you, your spouse and your children have
valid passports during the length of your assignment. ESI will sponsor
employment and travel visas as required to be compliant with all applicable
laws and regulations.  ESI will pay for
the cost of obtaining all necessary travel and immigration documents for you
and your family members.

 

You are also required to
obtain a Singapore driver’s license.  If
you have not already done so, ESI will reimburse you up to $500 for the cost of
obtaining a Singapore driver’s license for both you and your spouse.

 

TAX EQUALIZATION

While on assignment, you
will be governed by ESI’s tax equalization philosophy.  It is ESI’s intent that differences in income
tax expense due to your foreign assignment should not result in a significant
advantage or disadvantage to you.  This
philosophy behind tax equalization is that you bear an income tax burden
approximately equal to what your income tax would have been had you remained
employed in the U.S. during the assignment period.  The company-designated representative, KPMG
LLP, will discuss this philosophy and its implications with you during your tax
briefing session.

 

INCOME
NOT COVERED BY TAX EQUALZIATION

The following income
elements will not be tax equalized by ESI.

•                 ESI
incentive stock plan income (stock options, stock grants, etc.)

•                 Non-ESI
employment income.

•                 Spousal
and dependant children’s employment income.

•                 Gains
from the sale of real property outside of the U.S.

 

TAX BRIEFING

You are required to meet
with the ESI-designated tax consultant, KPMG LLP, for an initial review of ESI’s
tax philosophy and practices.  KPMG LLP
will also provide you with an opportunity to understand the tax issues related
to your international assignment.

 

TAX RETURN PREPARATION

It is ESI’s policy that
you comply fully with all applicable laws and regulations relating to filing
procedures and payment of taxes. 
Therefore, ESI provides you with the services of a company-designated
tax consultant, KPMG LLP, to assist in preparing home and host country tax
returns for the duration of the assignment and, if necessary, the year after
repatriation.  You are responsible for
complying with all requirements regarding personal tax filings and payments to
each taxing authority to which any such requirement exists.  If you fail to provide required tax
information, any resulting penalties or interest will be borne by you.

 

4

 

TAX
EQUALIZATION SETTLEMENT CALCULATIONS

Once your U.S. income tax
returns have been completed, KPMG LLP will prepare a tax settlement calculation
to establish the amount of income taxes you would have paid had you been
employed in the U.S.  The calculations
will also include a tax settlement calculation to establish any payments either
due to ESI from you or due to you from ESI. 
If it is determined you owe ESI funds, you agree to reimburse ESI within
30 days of receiving notification from KPMG LLP.

 

HOUSEHUNTING
AND ACCLIMATION TRIP: 
You, your spouse and your children will be eligible for one round trip
business class from Singapore to Portland, Oregon within the first six months
of your employment.  The purpose of this
trip is to provide an opportunity for your family to observe and acclimate to
your future change of duty station to ESI Headquarters, Portland, Oregon in
2007.

 

RELOCATION
TO PORTLAND, OR:  You
are eligible for a relocation package that will facilitate your move to
Portland.  The relocation benefit is
subject to the attached relocation guidelines. 
In order to receive this benefit, you will need to sign an agreement
similar to the attached relocation agreement which details the package and
repayment terms.

 

EMERGENCY
LEAVE:  In the event of
the serious illness or death of a family member, ESI will provide you and your
family a direct route, economy class flight back to Portland, Oregon or another
location but only up to the same cost as a return to Portland.  Family members include children, grandchildren,
parents, brothers, sisters, grandparents, brothers-in-law and sisters-in-law.

 

PAID TIME
OFF (PTO) AND HOLIDAY PAY: 
You will accrue paid time off at the established rate based on your ESI
service.  You will observe Singapore
holidays during your assignment and be paid accordingly.  A holiday is defined as a day designated by
the local national government in which government services, most local services
and schools are closed and business difficult to conduct.  See the ESI PTO policy inserted below:

 

Paid Time Off (PTO)

 

Paid Time Off can be
utilized for vacation, illness, personal time off, family emergencies, etc.
Eligible full-time employees are granted their full allotment at the beginning
of each calendar year.  Employees who are
hired mid-year receive a pro-rated allotment in their year of hire.

 

	
  Years of

  Service

  	
   

  	
  Annual

  Allotment

  (hours)

  	
   

  
	
  0 - 6

  	
   

  	
  160

  	
   

  
	
  Over 6

  	
   

  	
  200

  	
   

  

 

On January 1 of the
year in which you achieve 7 years of service you begin receiving PTO at the
next higher rate.

 

Unused PTO is not paid
out at termination and may not be used to extend the termination date, unless
otherwise required by law.

 

5

 

ESI BUSINESS TRAVEL POLICY:  All your business travel for ESI will be
subject to the company’s travel policy a copy of which is included in this
package.  However, until August 2007,
when you will be based in Singapore, you may fly on all international flights
business class. After your relocation to Portland, you will be subject to the
standard travel policy effective for the VPs, according to which the standard
class for short international flights is coach.

 

OUTSTANDING
BALANCES:  Upon
termination of your overseas assignment or termination of your employment with
ESI any such amounts due to the Company (ESI) will be deducted from any monies
due to you.  By signing acceptance of
this offer, you authorize the Company to withhold any such monies from your
final pay.

 

TERMINATION
or REPATRIATION:  All
expatriate benefits and allowances are discontinued immediately upon
termination or repatriation.  When you
begin work in Portland Oregon in August of 2007, or if you voluntarily
resign or are involuntarily terminated for any reason, ESI will reimburse a
direct route, one way, economy class airfare to Phoenix, Arizona for each
family member and only those costs mandated by law.  You will be responsible for any additional
tax liabilities.

 

Upon termination, the
Company will pay for the shipping by airfreight of 1500 lbs of household goods
and furniture and a single (1) forty (40) foot shipping container from
Singapore to Portland, Oregon.

 

NOT AN
EMPLOYMENT AGREEMENT: 
You understand that this agreement does not constitute an employment
contract and your employment – like that of all other ESI employees is, “at-will”.  This means you do not have a contract of
employment for any particular duration or that this assignment in no way limits
the grounds for your termination in any way. 
You are free to resign at any time. 
Similarly, the Company is free to terminate your employment at any time
for any reason or to direct a change of duty station for your position at any
time and for any reason.  Should ESI
direct a change-of-duty station and you decline to accept a change of duty
assignment you will be considered to have voluntarily resigned your employment
with ESI.

 

You further understand
that while personnel policies, programs and procedures may exist and be changed
from time to time, the only time your at-will status could be changed is if you
were to enter into an express written contract with the Company explicitly
promising you job security, containing the words “This is an express contract
of employment” and signed by an officer of the Company.  The above language contains our entire
agreement about your at-will status and there are no oral or side agreements of
any kind.

 

This offer is contingent
upon signing the ‘Certification & Release Authorization on the ESI
Employment Application form and returning it promptly to fax number:
503.671.5454.

 

The
application has a “Certification & Release Authorization” which
provides in particular that you:

authorize investigation
of all information provided during the application process and any references
to give [ESI] any and all information concerning your previous employment and
any pertinent information they may have, personal or otherwise, and release
from all liability or

 

6

 

responsibility this
company, its agents and all persons, companies or corporations providing
information to the company about you.

 

You
further acknowledge that this offer is contingent upon receipt of information
from these checks that is acceptable to ESI.

 

We look forward to
receiving your signed fax very soon.

 

Congratulations, we look
forward to you joining ESI and a productive future together.  This offer of employment is extended to you
through the end of business, December 12, 2005.  If you agree that this letter is correct in
all aspects and you accept our offer of employment, please sign and return one
copy of this letter and both copies of the enclosed Confidentiality Agreement
and the Application for Employment prior to your start date.

 

I look forward to your
employment at ESI.  Welcome!

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Nicholas
  Konidaris

  	
  Date

  
	
  Chief Executive
  Officer, ESI

  	
   

  

 

 

I have read, understand
and agree to the terms and conditions set forth above:

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Tom Wu

  	
  Date

  

 

Original to be returned
to Ellen Raim, Vice President, Human Resources, ESI

 

Enclosures:

1.               2000
Stock Option Incentive Plan Prospectus

2.               2006
Benefit Program

3.               Employee
Confidentiality and Assignment Agreement

4.               Application
for Employment

5.               ESI
Travel Policy

 

7Exhibit 10.13.A

 

FORM OF

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

PURSUANT TO

THE AES CORPORATION 2003 LONG TERM COMPENSATION PLAN

 

The AES Corporation, a Delaware corporation (the “Company”), grants to
the Employee named below, pursuant to The AES Corporation 2003 Long Term
Compensation Plan (the “Plan”) and this Nonqualified Stock Option Award
Agreement (this “Agreement”), this Award of a Nonqualified Stock Option (“Option”)
to purchase full shares of common stock of the Company (“Shares”) upon the
terms and conditions set forth herein and the terms of your current employment
agreement (your “Employment Agreement”) while it is in effect (i.e., through
and including its termination date). 
Capitalized terms not otherwise defined herein will each have the meaning
assigned to them in the Plan or your Employment Agreement while it is in
effect.

 

1.     The
Award of this Option is subject to all terms and conditions of this Agreement,
the Plan, the terms of which are herein incorporated by reference, and your
Employment Agreement, the terms of which are herein incorporated by reference
while it is in effect:

 

Name of
Employee:

 

Date of Birth:

 

AES Directory
Name:

 

Grant Date:

 

Total Number
of Shares subject to Option:

 

Option Price
per Share:

 

2.     The
Employee referenced above is hereby granted an Option representing a right to
purchase the number of Shares set forth above at the option price per Share set
forth above, upon the terms set forth herein, in the Plan and in your
Employment Agreement while it is in effect, if
and only to the extent, such Option (i) has not been
forfeited or canceled prior to its Vesting Date (as defined below) and (ii) has
vested in accordance with this Agreement.

 

3.     This
Option will expire no later than ten years from the Grant Date, provided,
however, that this Option may expire sooner pursuant to the terms set forth
herein, in the Plan and in your Employment Agreement while it is in effect.

 

4.     Subject
to the terms of your Employment Agreement while it is in effect, this Option
will vest in three equal installments on each of the first, second and third
anniversary of the Grant Date (each a “Vesting Date”); provided, however:

 

1

 

(A)    that
if the Employee’s employment is terminated or the Employee’s provision of
services is terminated, prior to the third anniversary of the Grant Date, in either case by reason of the Employee’s death or Disability,
this Option will vest and will become exercisable on such termination date and
will expire one year after such termination date;

 

(B)    that
if the Employee’s employment is terminated or the Employee’s provision of
services is terminated, prior to the third anniversary of the Grant Date, in
either case by the Company for cause (as
determined by the Committee in its sole discretion) any portion of this Option
that has vested on or before such termination date will expire three months
after such termination date, and any portion of this Option that has not vested
on or before such termination date will be forfeited in full, cancelled by the
Company, and will cease to be outstanding, upon such termination date; and

 

(C)    that
if the Employee’s employment is terminated or the Employee’s provision of
services is terminated, prior to the third anniversary of the Grant Date, for
any other reason (including voluntarily by the Employee (including
without limitation, Retirement) or by the Company other than for cause or by
reason of death or Disability), any portion of this Option that
has vested on or before such termination date will expire one hundred and
eighty days after such termination date, and any portion of this Option that
has not vested on or before such termination date will be forfeited in full,
cancelled by the Company, and will cease to be outstanding, upon such
termination date.

 

In addition, in the event that a termination
described in clause (A), clause (B) or clause (C) above occurs, on or
after the third anniversary of the Grant Date, to the extent that all or any
portion of this Option has vested but not yet expired as of such date, such
portion of this Option will expire on the earlier  of (i) the last day of the time
period described in clause (A), clause (B) or clause (C) above, as
applicable, or (ii) the date such portion of this Option would have
expired, had such employment or provision of services continued.

 

5.     Subject
to the terms and conditions of the Plan, this Agreement and the terms of your
Employment Agreement while it is in effect, the Employee may exercise any
vested portion of this Option by giving appropriate written notice to the
Company, together with provision for payment (i) of the full option price
of the Shares for which such vested portion of this Option is exercised and (ii) applicable
withholding taxes.  The notice must specify
the portion of this Option to be exercised (i.e., the number of Shares) and be
signed by the Employee.  The full option
price of the shares of common stock as to which such vested portion of this
Option is exercised (including applicable withholding taxes) must be paid in
cash to the Company in full, or alternative adequate provision acceptable to
the Committee for such payment made (including an irrevocable instruction to a
broker to deliver the option price at a future date), at the time of exercise.

 

6.     In
addition, subject to the terms of your Employment Agreement while it is in
effect, in the event that a Change of Control occurs prior to the third
anniversary of the Grant Date, to the extent that all or any portion of this
Option has not already been previously forfeited or cancelled, such portion of
this Option will become fully vested and exercisable; provided, however, that
in connection with a Change of Control or certain other events, the Committee

 

2

 

may, in its discretion (i) cancel any or
all outstanding Options issued pursuant to the Plan in consideration for
payment to the holders of such cancelled Options of an amount equal to the
portion of the consideration that would have been payable to such holders
pursuant to such transaction if such Options had been fully vested and
exercisable, and had been fully exercised, immediately prior to such
transaction, less the option 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 Options for no consideration of any kind.  Payment of any obligation payable pursuant to
the preceding sentence may be made in cash of equivalent value and/or
securities or other property in the Committee’s discretion.

 

7.     Subject
to the terms of your Employment Agreement while it is in effect, the Company
and its subsidiaries and Affiliates have the right (i) to withhold any tax
required to be withheld in connection with the exercise of any portion of this
Option from Shares otherwise deliverable or from any other payment to be made
to the Employee, or (ii) to otherwise condition the Employee’s right to
exercise any portion of this Option on the Employee making arrangements
satisfactory to the Company or any of its subsidiaries or affiliates to enable
any related tax obligation of the Employee to be satisfied.  The Employee should consult his or her
personal advisor to determine the effect of this Option on his or her own tax
situation.

 

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

 

9.     Subject to the terms and
conditions of the Plan and the terms of your Employment Agreement while it is
in effect, unless the Committee determines otherwise, if an Employee is
adjudicated to be mentally incompetent while in the continuous employment of
the Company or an Affiliate or during a period of permanent and total
Disability which commenced while in such employment, the Employee’s guardian,
conservator or legal representative will have the right to exercise this Option
on behalf of the Employee.

 

10.   All
decisions and interpretations made by the Board of Directors or the Committee
with regard to any question arising hereunder or under the Plan will be binding
and conclusive on all persons.  Unless
otherwise specifically provided herein, in the event of any inconsistency
between the terms of the Plan and this Agreement, the Plan will govern.  In the event an interpretation is to be made
concerning an inconsistency between the provisions of your Employment Agreement
and the provisions of the Plan and/or this Agreement, while your Employment
Agreement is in effect, the provisions of your Employment Agreement will
govern; provided, however, that any such interpretation will not be binding on
interpretations made or actions taken following the termination date of your
Employment Agreement.

 

11.   By
accepting the Award of this Option, the Employee acknowledges receipt of a copy
of the Plan and the prospectus related to this Option and agrees to be bound by
the terms and

 

3

 

conditions set forth in this Agreement and the
Plan, as in effect and/or amended from time to time.

 

12.   This
Agreement is governed by the laws of the State of Delaware without giving
effect to its choice of law provisions.

 

 

	
   

  	
  THE AES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  

 

4

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