Document:

Exhibit 10.17

 

THE AES CORPORATION

SEVERANCE PLAN

(As Amended and Restated December 29, 2008)

 

 

ARTICLE I

GENERAL PROVISIONS

 

1.1                                                                                 Establishment
and Purpose.

 

The purpose of the
AES Corporation Severance Plan, as amended (the “Plan”) is to provide eligible
employees who are involuntarily terminated from employment in certain limited
circumstances with severance and welfare benefits as set forth in this
Plan.  Benefits payable under this Plan
are not, and should not be construed as vested benefits, and are generally
intended for employees who are involuntarily terminated without cause.  This Plan constitutes a welfare plan under
ERISA and will be interpreted in accordance with the terms of ERISA. This Plan
supersedes any prior severance plans, policies, guidelines, arrangements,
agreements, letters and/or other communication, whether formal or informal,
written or oral sponsored by the Employer and/or entered into by any
representative of the Employer.  The Plan
was originally established June 1, 2006,

 

1.2                                                                                 Definitions.

 

Except as may
otherwise be specified or as the context may otherwise require, for purposes of
the Plan, the following terms shall have the respective meaning ascribed
thereto.

 

“Administrator”
means the Health and Welfare Benefits Plan LLC or such other committee or
persons designated by it to assume the duties of the Administrator.

 

“Affiliated
Employer” mean any corporation which is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) which
includes the Company; any trade or business (whether or not incorporated) which
is under common control (as defined in Section 414(c) of the Code)
with the Company; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Section 414(m) of
the Code) which includes the Company; and any other entity required to be
aggregated with the Company pursuant to regulations under Section 414(o) of
the Code.

 

“Annual
Compensation” means (i) an Eligible Employee’s annualized base salary
as in effect as of the Eligible Employee’s Termination Date or (ii) in the
event that an Eligible Employee is an hourly employee, the person’s cumulative
base earnings (excluding bonuses) for the previous completed calendar year
prior to the Eligible Employee’s Terminate Date.  Unless otherwise provided on a Benefits
Schedule, Annual Compensation shall: (i) include pre-tax employee
contributions under any qualified defined contribution retirement plan, salary
deferrals under any unfunded nonqualified deferred compensation plan, and
amounts deferred (to include employee premiums) under a flexible spending
account established pursuant to section 125 of the Code; and (ii) exclude
any amounts contributed by the Employer to any plan established pursuant to section 125
of the Code, overtime pay, bonuses, shift differential, annual incentive
payments, long-term incentive awards (including but not limited to stock
options, restricted stock and performance unit awards), and any other form of
supplemental compensation.

 

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“Benefit
Schedule” means any schedule attached to the Plan which sets forth the
benefits of specified groups of Eligible Employees, as approved by the Company
and updated by the Administrator from time to time.

 

“Board”
means the Board of Directors of the Company.

 

“Bonus”
means an Eligible Employee’s annual target bonus compensation as established by
the Employer and in effect on the Eligible Employee’s Termination Date.

 

“Cause”
means Separation from Service by action of the Employer, or resignation in lieu
of such Separation from Service, on account of the Eligible Employee’s
dishonesty; insubordination; continued and repeated failure to perform the
Eligible Employee’s assigned duties or willful misconduct in the performance of
such duties; intentionally engaging in unsatisfactory job performance; failing
to make a good faith effort to bring unsatisfactory job performance to an
acceptable level; violation of the Employer’s policies, procedures, work rules or
recognized standards of behavior; misconduct related to the Eligible Employee’s
employment; or a charge, indictment or conviction of, or a plea of guilty or nolo contendere to, a felony, whether or not in connection
with the performance by the Eligible Employee of his or her duties or
obligations to the Employer.

 

“Change in
Control”  means the occurrence of one
or more of the following events: (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company to any Person or group (as that
term is used in Section 13(d) (3) of the Securities Exchange Act
of 1934) of Persons, (ii) a Person or group (as so defined) of Persons
(other than management of the Company on the date of the adoption of this Plan
or their Affiliates) shall have become the beneficial owner of more than 35% of
the outstanding voting stock of the Company, or (iii) during any one-year
period, individuals who at the beginning of such period constitute the Board of
Directors (together with any new director whose election or nomination was
approved by a majority of the directors then in office who were either
directors at the beginning of such period or who were previously so approved,
but excluding under all circumstances any such new director whose initial
assumption of office occurs as a result of an actual or threatened election
contest or other actual or threatened solicitation of proxies or consents by or
on behalf of any individual, corporation, partnership or other entity or group)
cease to constitute a majority of the Board of Directors.   For purposes of this definition, “Affiliate”
means: (i) any Subsidiary of the Company; (ii) any entity or Person
or group of Persons that, directly or through one or more intermediaries, is
controlled by the Company; and (iii) any entity or Person or group of
Persons in which the Company has a significant equity interest, as determined
by the Company.

 

“COBRA Coverage”
means medical, dental and vision coverage which is required to be offered to
terminated employees under section 4980B of the Code and section 606
of ERISA; provided, however, that no provision of this Plan shall be construed
to require the Employer to contribute on behalf of an Eligible Employee towards
continuation coverage for a health spending account.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

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“Company”
(or “AES”) means The AES Corporation, a Delaware corporation.

 

“Disability
Termination” means a Separation from Service: (a) on account of the
Eligible Employee’s failure to return to full-time employment following
exhaustion of short-term disability benefits provided by the Employer; (b) following
the date the Eligible Employee is determined to be eligible for: (i) long-term
disability benefits under any long-term disability insurance policy or plan
maintained by the Employer; or (ii) disability pension or retirement
benefits under any qualified retirement plan maintained by the Employer; or (c) due
to a physical or mental condition that substantially restricts the Eligible
Employee’s ability to perform his or her usual duties, as determined by the
Employer.

 

“Eligible
Employee” means any Employee of the Employer who: (i) is not an
Ineligible Employee (within the meaning of Section 2.2); and (ii) who
has completed one Year-of-Service as a full-time Employee.

 

“Employee”
means any person who is listed as an employee on the payroll records of the
Employer as a full-time employee.  Any
person hired by the Employer as a consultant or independent contractor and any
other individual whom the Employer does not treat as its employee for federal
income tax purposes shall not be an Employee for purposes of this Plan, even if
it is subsequently determined by a Court or administrative agency that such
individual should be, or should have been, properly classified as a common law
employee of the Employer.

 

“Employer”
means the Company and any Affiliated Employer that participates in the Plan
with the consent of the Company.  The
Administrator shall maintain a list of participating Employers.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Ineligible
Termination” means an Eligible Employee’s Separation from Service on
account of:

 

·                                          The
Eligible Employee’s voluntary resignation, including but not limited to the
Eligible Employee’s unilateral Separation from Service at any time prior to the
Termination Date established by the Employer;

 

·                                          Any
Separation from Service that the Employer determines (either before or after
the Separation from Service and whether or not any notice is given to the
employee) the payment of benefits under the Plan in connection with such
Separation from Service would be inconsistent with the intent and purpose of
the Plan;

 

·                                          A
Separation from Service in connection with an Eligible Employee’s failure to
return to work immediately following the conclusion of an approved
leave-of-absence.

 

·                                          A
Separation from Service for, or on account of, Cause;

 

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·                                          A
Disability Termination;

 

·                                          The
Eligible Employee’s death;

 

·                                          The
Eligible Employee declines to accept a New Job Position offered by the Employer
that is located within 50 miles of the Eligible Employee’s then assigned work
site of the Employer;

 

·                                          The
Sale of Business Rule set forth in Section 2.4 herein; or

 

·                                          The
voluntary transfer of employment from Eligible Employee’s Employer to another
AES related entity, irrespective whether the Eligible Employee is required to
relocate or whether the AES related entity qualifies as an Affiliated Employer.

 

“Involuntary Termination” means an Eligible
Employee’s involuntary Separation from Service that is (i) not an
Ineligible Termination and (ii) by action of the Employer on account of:

 

·                                          Permanent
Layoff;

 

·                                          Reduction-in-force;

 

·                                          Permanent
job elimination;

 

·                                          The
restructuring or reorganization of a business unit, division, department or
other segment;

 

·                                          Termination
by Mutual Consent; or

 

·                                          Eligible
Employee declines to accept a New Job Position offered by the Employer that
requires the Eligible Employee to relocate to a work site location that is
located greater than 50 miles from the Employee’s then assigned work
site of the Employer; provided, however, that except as provided in Section 2.4
or in connection with a Separation from Service following a Change in Control,
an Eligible Employee who functions at or above a Group Manager position (or its
equivalent) shall not incur an Involuntary Termination if such Eligible
Employee declines a New Job Position (regardless of its location) at a time
when the Eligible Employee’s existing job position is being eliminated.

 

“Layoff”
means a special program of workforce reduction approved in advance in writing
by the Employer and that is designated as a “Layoff” for purposes of this
Plan.  Notwithstanding the foregoing, a
Layoff must result in a permanent elimination of a job resulting from an
internal reorganization of the Employer.

 

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“New Job
Position” means: (i) with respect to an Eligible Employee who has
demonstrated inadequate or unsatisfactory performance, as determined by the
Employer, any job position offered by the Employer; or (ii) with respect
to all other Eligible Employees, a full-time job position offered by the
Employer that does not result in a reduction of the Employee’s Annual
Compensation.

 

“Participant”
has the meaning set forth in Section 2.1.

 

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

 

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

 

“Separation
From Service” shall mean an Eligible Employee’s termination of employment
with the Company and all of its controlled group members within the meaning of Section 409A
of the Code.  For purposes hereof, the
determination of controlled group members shall be made pursuant to the
provisions of Section 414(b) and 414(c) of the Code; provided
that the language “at least 50 percent” shall be used instead of “at least 80
percent” in each place it appears in Section 1563(a)(1),(2) and (3) of
the Code and Treas. Reg. § 1.414(c)-2; provided, further, where legitimate
business reasons exist (within the meaning of Treas. Reg. § 1.409A-1(h)(3)),
the language “at least 20 percent” shall be used instead of “at least 80
percent” in each place it appears. 
Whether an Employee has a Separation from Service will be determined
based on all of the facts and circumstances and in accordance with the guidance
issued under Section 409A.

 

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

 

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

 

“Termination by
Mutual Consent” means an involuntary Separation from Service pursuant to
which the Company agrees, in its sole discretion, that benefits are payable
under this Plan.

 

“Termination
Date” means the date of the Eligible Employee’s Separation of Service (or
scheduled date of Separation from Service, as applicable).

 

“Week’s
Compensation” means one fifty-second (1/52) of an Eligible Employee’s
Annual Compensation.

 

“Year-of-Service”
means each twelve-month period measured from the Eligible Employee’s first day
of employment with an Employer, as reduced to reflect breaks in service 

 

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and/or services performed during such period the Eligible Employee was
otherwise ineligible to participate in the Plan, as determined under the rules promulgated
by the Administrator.  Service with a
predecessor employer (that was not an Affiliated Employer) shall be recognized
to the extent such service is recognized under The AES Corporation Retirement
Savings Plan. Service shall also include services performed prior to the
effective date of the Plan.  In the event
an Eligible Employee’s Separation from Service and the Eligible Employee is
subsequently reemployed by the Employer, the Eligible Employee’s service for
calculation of any severance benefits under Article IV of the Plan shall
be based on only upon the Eligible Employee’s service credited since the most
recent date of employment with the Employer.

 

ARTICLE II 

PARTICIPATION

 

2.1                                                                                 Eligibility.

 

Except as otherwise
provided in this Article II or a Benefit Schedule, an Eligible Employee
shall, upon execution of the Release in the form specified in Article III
of this Plan in the time and manner prescribed by the Administrator, be
eligible for the severance benefits provided under Article IV of this Plan
if the Eligible Employee’s Separation from Service is by reason of an
Involuntary Termination.  An Eligible
Employee who fails to execute the Release in the time and manner prescribed by
the Administrator or who subsequently revokes execution of the Release in
accordance with its terms shall not be entitled to receive benefits under this
Plan.  An Eligible Employee who satisfies
all of the terms and conditions specified in this Plan and who becomes entitled
to receive benefits hereunder shall be referred to herein as a “Participant.”

 

2.2                                                                                 Ineligible
Employees. Notwithstanding any provision of this Plan to the contrary, the
following Employees (“Ineligible Employees”) are not eligible to participate in
the Plan:

 

·                                          Any
Employee who has been hired to work on a part-time, seasonal or temporary basis
or who is classified as a part-time, seasonal or temporary Employee, or a
student intern on the Employer’s records;

 

·                                          Any
Employee who has been hired by the Employer to work in a job share position
(provided that such Employee is not otherwise employed on a full-time basis);

 

·                                          An
Employee who is member of a collective bargaining unit to which this Plan has
not been specifically extended by a collective bargaining agreement;

 

·                                          An
Employee entitled to a severance type payment pursuant to any other plan,
policy, arrangement, agreement, letter or other communication sponsored by, or
entered into with, or maintained by the Employer, including but not limited to
an employment agreement;

 

·                                          Leased
employees, including those within the meaning of section 414(n) of
the Code;

 

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·                                          Nonresident
aliens (other than those nonresident aliens to whom the Employer has extended
participation in the Plan with the written consent of the Company);

 

·                                          Any
individual who has agreed in writing that he or she waives his or her
eligibility to receive benefits under the Plan; and

 

·                                          Any
Employee who has an enforceable right to resume employment or to be recalled to
employment with the Employer.

 

2.3                                                                                 Transfer
of Employment.

 

If an Eligible
Employee transfers to a location of AES to which this Plan has not been
extended, such Employee shall cease to be eligible to participate in this Plan
unless the Eligible Employee’s prior Employer has agreed in writing to continue
to extend participation in the Plan to the Employee with the consent of the
Company.

 

2.4                                                                                 Sale
of Business Rule.

 

An Eligible
Employee shall not be eligible to benefits under the Plan if the Eligible
Employee’s Separation from Service is in connection with the sale of the stock
or other ownership interests of the Employer or other related entity, or the
sale, lease, or other transfer of the assets, products, services or operations
of the Employer or other related entity to another organization if either of
the following occurs:

 

·                                          The
Eligible Employee is employed by the new organization immediately following the
sale, transfer or lease or is so employed within a time period specified in an
agreement between the Employer and the new organizations; or

 

·                                          The
Employer terminates the employment of an Eligible Employee who did not accept
an offer of employment from the new organization when the new organization
offered a compensation and benefits package that was, in the aggregate,
generally comparable to the compensation and benefits provided by the Employer;
provided that such Eligible Employee  was
not required to relocate to a work site location that is located greater than
50 miles from the Employee’s then assigned work site of the Employer.

 

Notwithstanding
the foregoing, this section 2.4 shall not apply if an Eligible Employee’s
Separation from Service occurs in connection with a Change of Control and, as
such, any such Separation from Service will not be an Ineligible Termination
solely on the basis of the Sale of Business Rule.

 

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ARTICLE III

RELEASES

 

3.1                                                                                 Release.

 

Notwithstanding
anything in this Plan to the contrary, no benefits of any sort or nature (other
than as provided in section 3.3) shall be due or paid under this Plan to any
Eligible Employee unless the Eligible Employee executes a written release and
covenant not to sue, in form and substance satisfactory to the Employer, in its
sole discretion, within
the time stated in the release; provided, however, that in all cases such
release must become final, binding and irrevocable within sixty (60) days
following the Eligible Employee’s Termination Date.  The written release shall waive any and all
claims against the Employer and all related parties including, but not limited
to, claims arising out of the Eligible Employee’s employment by the Employer,
the Eligible Employee’s Separation from Service and claims relating to the
benefits paid under this Plan.  At the
sole discretion of the Employer, the release shall also include such
noncompetition, nonsolicitation and nondisclosure provisions as the Employer
considers necessary or appropriate.

 

3.2                                                                                 Revocation.

 

The release
described in Section 3.1 must be executed and binding on the Eligible
Employee within the timeframe specified by the Company before benefits are due
or paid.  An Eligible Employee who
revokes execution of the release in accordance with the terms of the release
shall not be entitled to receive benefits under the Plan.

 

3.3                                                                                 Outplacement
Services.

 

Notwithstanding the
foregoing provisions of this Article III, the Outplacement Services set
forth under Section 4.3 herein may or may not be provided, at the
discretion of the Employer, to an Eligible Employee prior to the execution of a
release under this Plan.

 

ARTICLE IV

SEVERANCE BENEFITS

 

4.1                                                                                 Separation
Payment.

 

4.1.1                        A
Participant shall be entitled to receive a separation payment as set forth on
the applicable Benefit Schedule.  The
separation payment will be paid at least monthly in substantially equal
installments as salary continuation in accordance with the Employer’s
established payroll policies and practices over the same time period upon which
the separation payment is based.

 

4.1.2                        The
separation payments will commence on the Employer’s next normal pay date occurring
after the date the Eligible Employee’s release becomes final, binding and
irrevocable.

 

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4.1.3                        For
purposes of Section 409A: (i) the right to salary continuation
installment payments shall be treated as the right to a series of separate
payments; and (ii) a payment shall be treated as made on the scheduled
payment date if such payment is made at such date or a later date in the same
calendar year or, if later, by the 15th day of the third calendar month
following the scheduled payment date.  A
Participant shall have no right to designate the date of any payment under the
Plan.  For purposes of the Plan, each
salary continuation installment payment is intended to be excepted from Section 409A
to the maximum extent provided under Section 409A as follows: (i) each
salary continuation installment payment that is scheduled to be made on or
before March 15th of the calendar year following the calendar year
containing the Termination Date is intended to be excepted under the short-term
deferral exception as specified in Treas.
Reg. § 1.409A-1(b)(4); and (ii) each salary continuation
installment payment that is not otherwise excepted under the short-term
deferral exception is intended to be excepted under the involuntary pay
exception as specified in Treas. Reg. §
1.409A-1(b)(9)(iii).

 

4.2                                                                                 Continuation
of Certain Welfare Benefits.

 

4.2.1                        Medical/Dental/Vision.  For the period set forth below in Section 4.2.3
and beginning in the calendar month following the calendar month in which the
Termination Date occurs, the Participant shall be eligible to participate in
the Employer’s medical, dental and vision employee welfare benefit plans
applicable to the Participant on his Termination Date.  To receive such benefits, the Participant
must properly enroll in COBRA coverage, and must also pay such premiums and
other costs for such coverage as generally applicable to the Employer’s active
employees.  The Employer will continue to
pay its share of the applicable premiums under the medical, dental and vision
plans for the same level and type of coverage in which the Participant is
enrolled as of the Termination Date.

 

If a Participant
has elected the “no benefit coverage” option under the medical, dental or
vision plans as of his actual Termination Date, the Participant shall not be
entitled to continuation coverage or cash in lieu thereof.  Following expiration of coverage under this Section 4.2.1,
a Participant may, to the extent eligible, continue to participate in such
plans for the remainder of the COBRA continuation period, if any.

 

4.2.2                  Concurrent
COBRA Period.  The continuation
period for medical, dental and vision coverage under this Plan shall be deemed
to run concurrent with the continuation period federally mandated by COBRA
(generally 18 months), or any other legally mandated and applicable federal,
state, or local coverage period for benefits provided to terminated employees
under the health care plan.  The
continuation period will be deemed to commence on the first day of the calendar
month following the month in which the Termination Date falls.  Notwithstanding the foregoing, COBRA Coverage
will only be available if the Participant is eligible for and timely elects
COBRA Coverage, and timely remits payment of the premiums for COBRA Coverage.

 

4.2.3                  Length
of Benefits.  Benefits under this Section 4.2
shall be for the same time period upon which the separation payment was based;
provided, however that in no event will the time period exceed 18 months. Post-termination medical benefits are
intended to be excepted from Section 409A under the medical benefits
exceptions as specified in Treas. Reg. § 1.409A-1(b)(9)(v)(B).

 

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4.3                                                                                Outplacement
Services.

 

As set forth on
the applicable Benefit Schedule, a Participant shall be eligible for such
outplacement services typically provided to employees of the same job
classification or level.  Outplacement
services may be provided by an independent agency or by the Employer.  Notwithstanding the foregoing, the
availability, duration, and appropriateness of outplacement services shall be
determined by the Administrator in its sole discretion; provided, however, that
outplacement expenses must be reasonable, must be actually incurred by the
Participant and may not extend beyond the December 31 of the second
calendar year following the calendar year in which the Termination Date
occurred (or such shorter period as specified by the Employer).  Any such reimbursement shall be as soon as
administratively feasible, but in no event later than December 31st of the
third calendar year following the calendar year in which the Termination Date
occurred.
Post-termination outplacement benefits are intended to be excepted from Section 409A
under the separation payment benefits exceptions as specified in Treas. Reg.
§ 1.409A-1(b)(9)(v)(A).

 

4.4                                                                                Bonus
Compensation.

 

As set forth on
the applicable Benefits Schedule and subject to any deferral election that the
Participant has made with respect to such amounts, a Participant will be
eligible for (i) a prorated Bonus; and (ii) any accrued but unpaid
bonus compensation for completed performance periods.  The prorated Bonus specified in Section 4.4(i) will
be prorated based on the amount of time the Participant was actively at work on
a full-time basis in the calendar year in which the Participant’s Termination
Date falls, and will be paid within the applicable 21⁄2 month period specified in
Treas. Reg. § 1.409A-1(b)(4).  The bonus
compensation specified in Section 4.4(ii) shall be paid no later than
the time that such amounts are paid to similarly situated employees in
accordance with the applicable plan terms. . 
Notwithstanding the foregoing, with respect to bonuses paid in
accordance with the terms of The AES Corporation Performance Incentive Plan (or
any successor plan, the “Performance Incentive Plan”), any such bonus
compensation shall be paid only to the extent earned in accordance with the
terms of the Performance Incentive Plan and on the payment date specified
therein.

 

4.5                                                                                Enhanced
Benefits.

 

To the extent
provided under the Benefits Schedule, in the event the Participant was
Involuntarily Terminated within two years following a Change in Control, or in
the event the Participant was Involuntarily Terminated under circumstances that
constitute a Layoff, the separation payment under Section 4.1 will be
multiplied by 2.0.  In addition, the
length of time for which benefits under Section 4.2 will be provided will
also be multiplied by 2.0; provided, however, that this time period will never
exceed 18 months as set forth in section 4.2.3.

 

4.6                                                                                Delay
in Payment.

 

Notwithstanding
any provision of this Plan to the contrary, to the extent that a payment
hereunder is subject to Section 409A (and not excepted therefrom), such
payment shall be delayed for a period of six months after the Termination Date
(or, if earlier, the death of the Participant)  for
any Participant that is a Specified Employee. 
Any payment that would otherwise 

 

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have been due or owing during such six-month period will be paid on the first business day of the seventh
month following the date of Termination Date.

 

ARTICLE V

PLAN
ADMINISTRATION

 

5.1                                                                                Operation
of the Plan.

 

The Administrator
shall be the named fiduciary responsible for carrying out the provisions of the
Plan.  The Administrator may delegate any
and all of its powers and responsibilities hereunder or appoint agents to carry
out such responsibilities, and any such delegation or appointment may be
rescinded at any time.  The Administrator
shall establish the terms and conditions under which any such agents
serve.  The Administrator shall have the
full and absolute authority to employ and rely on such legal counsel, actuaries
and accountants (which may also be those of the Employer) as it may deem
advisable to assist in the administration of the Plan.

 

5.2                                                                                Administration
of the Plan.

 

To the extent that
the Administrator in its sole discretion deems necessary or desirable, the
Administrator may establish rules for the administration of the Plan,
prescribe appropriate forms, and adopt procedures for handling claims and the
denial of claims.  The Administrator
shall have the exclusive authority and discretion to interpret, construe, and
administer the provisions of the Plan and to decide all questions concerning
the Plan and its administration.  Without
limiting the foregoing, the Administrator shall have the authority to determine
the level of an Employee, to determine eligibility for and the amount of any
benefits due in accordance with the attached Benefit Schedule, to make factual
determinations, to correct deficiencies, and to supply omissions, including
resolving any ambiguity or uncertainty arising under or existing in the terms
and provisions of the Plan or any Benefits Schedule.  Any and all such determinations of the
Administrator shall be final, conclusive, and binding on the Employer, the Employee
and any and all interested parties.

 

5.3                                                                                Funding.

 

The Plan shall be
unfunded and all payments hereunder and expenses incurred in connection with
this Plan shall be from the general assets of the Employer. Benefits will be
paid directly by the Employer employing the Participant, and no other Employer
or Affiliated Employer will be responsible for any benefits hereunder.

 

5.4                                                                                Code
section 409A.

 

Notwithstanding
any provision of the Plan to the contrary, if any benefit provided under this
Plan is subject to the provisions of Section 409A of the Code and the
regulations issued thereunder, the provisions of the Plan will be administered,
interpreted and construed in a manner necessary to comply with Section 409A
or an exception thereto (or disregarded to the extent such provision cannot be
so administered, interpreted, or construed). 
With respect to
payments subject to Section 409A of the Code: (i) it is
intended that distribution events 

 

11

 

authorized under the Plan
qualify as permissible distribution events for purposes of Section 409A of
the Code; and (ii) the
Company and each Employer reserve the right to accelerate and/or defer any
payment to the extent permitted and consistent with Section 409A.  Notwithstanding
any provision of the Plan to the contrary, in no event shall the Administrator,
the Company, an Affiliated Employer or Subsidiary (or their 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.

 

ARTICLE VI

CLAIMS

 

6.1                                                                                General.

 

If an Employee believes that he or she is eligible for
benefits under the Plan and has not been so notified, an Employee should submit
a written request for benefits to the Administrator.  Any claim for benefits must be made within six
months of an Employee’s Termination Date, or the Employee will be forever
barred from pursuing a claim.  For
purposes of this Article VI, an Employee making a claim for benefits under
the Plan shall be referred to as a “claimant”. 
The claimant shall file the claim with and in the manner prescribed by
the Administrator.  The Administrator
shall make the initial determination concerning rights to and amount of
benefits payable under this Plan.

 

6.2                                                                                Claim
Evaluation.

 

A properly filed
claim will be evaluated and the claimant will be notified of the approval or
the denial of the claim within ninety (90) days after the receipt of the claim,
unless special circumstances require an extension of time for processing.  Written notice of the extension will be
furnished to the claimant prior to the expiration of the initial ninety-day
(90-day) period, and will specify the special circumstances requiring an
extension and the date by which a decision will be reached (provided the claim
evaluation will be completed within one hundred and twenty (180) days after the
date the claim was filed).

 

6.3                                                                                Notice
of Disposition.

 

A claimant will be given a written notice in
which the claimant will be advised as to whether the claim is granted or
denied, in whole or in part.  If a claim
is denied, in whole or in part the notice will contain: (i) the specific
reasons for the denial; (ii) references to pertinent Plan provisions upon
which the denial is based; (iii) a
description of any additional material or information necessary to perfect the
claim and an explanation of why such material or information is necessary; and (iv) the
claimant’s rights to seek review of the denial.

 

6.4                                                                                Appeals.

 

If
a claim is denied, in whole or in part, the claimant, or his duly authorized
representative, has the right to (i) request that the Administrator review
the denial, (ii) review pertinent documents, and (iii) submit issues
and comments in writing, provided that the claimant files a written appeal with
the Administrator within sixty (60) days after the date the claimant 

 

12

 

received
written notice of the denial.  Within
sixty (60) days after an appeal is received, the review will be made and the
claimant will be advised in writing of the decision, unless special
circumstances require an extension of time for reviewing the appeal, in which
case the claimant will be given written notice within the initial sixty-day
(60-day) period specifying the reasons for the extension and when the review
will be completed (provided the review will be completed within one hundred and
twenty (120) days after the date the appeal was filed).  The decision on appeal will be forwarded to
the claimant in writing and will include specific reasons for the decision and
references to the Plan provisions upon which the decision is based.  A decision on appeal will be final and
binding on all persons for all purposes. 
If a claimant’s claim for benefits is denied in whole or in part, the
claimant may file suit in a state or federal court. Notwithstanding the aforementioned,
before the claimant may file suit in a state or federal court, the claimant must
exhaust the Plan’s administrative claims procedure set forth in this Article VI.  If any such state or federal judicial or
administrative proceeding is undertaken, the evidence presented will be
strictly limited to the evidence timely presented to the Administrator.  In addition, any such state or federal judicial
or administrative proceeding must be filed within six (6) months after the
Administrator’s final decision. Any
such state or federal judicial or administrative proceeding relating to this
Plan shall only be brought in the Circuit Court for Arlington County, Virginia
or in the United States District Court for the Eastern District of Virginia,
Alexandria Division.  If any such action or proceeding is brought in any
other location, then the filing party expressly consents to the transfer of
such action to the Circuit Court for Arlington County, Virginia or the United
States District Court for the Eastern District of Virginia, Alexandria
Division.  Nothing in this clause shall be deemed to prevent any party
from removing an action or proceeding to enforce or interpret this Plan from
the Circuit Court for Arlington County, Virginia to the United States District
Court for the Eastern District of Virginia, Alexandria Division.

 

ARTICLE VII

PLAN AMENDMENTS

 

7.1                                                                                Amendment
Authority.

 

The Board may, at
any time and in its sole discretion, amend, modify or terminate the Plan,
including any Benefit Schedule, as the Board, in its judgment shall deem
necessary or advisable.  The Board may
delegate its amendment authority to the Administrator or such other persons as
the Board considers appropriate. 
Notwithstanding the foregoing or any provision of the Plan to the
contrary, the Board (or its designee) may at any time (in its sole discretion
and without the consent of any Participant) modify, amend or terminate any or
all of the provisions of this Plan  or
take any other action, to the extent necessary or advisable to conform the
provisions of the Plan with Section 409A of the Code, the regulations
issued thereunder or an exception thereto, regardless of whether such modification,
amendment or termination of this Plan or other action shall adversely affect
the rights of an Eligible Employee or Participant under the Plan. Termination
of this Plan  shall not be a distribution
event under the Plan unless otherwise permitted under Section 409A.

 

13

 

ARTICLE VIII

MISCELLANEOUS

 

8.1                                                                                Summary
Plan Description.

 

To the extent the
summary plan description or any other writing communication to an Employee
conflicts with this Plan, the Plan document shall control.

 

8.2                                                                                Impact
on Other Benefits.

 

Except as
otherwise provided herein, any amounts paid to a Participant under this Plan
shall have no effect on the Participant’s rights or benefits under any other
employee benefit plan sponsored by the Employer; provided, however, that in no
event shall any Participant be entitled to any payment or benefit under the
Plan which duplicates a payment or benefit received or receivable by the
Participant under any severance plan, policy, guideline, arrangement,
agreement, letter and/or other communication, whether formal or informal,
written or oral sponsored by the Employer or an affiliate thereof and/or
entered into by any representative of the Employer and/or any affiliate
thereof.  Further, any such amounts shall
not be used to determine eligibility for or the amount of any benefit under any
employee benefit plan, policy, or arrangement sponsored by the Employer or any
affiliate thereof.

 

8.3                                                                                Tax
Withholding.

 

The Employer shall
have the right to withhold from any benefits payable under the Plan or any
other wages payable to a Participant an amount sufficient to satisfy federal,
state and local tax withholding requirements, if any, arising from or in
connection with the Participant’s receipt of benefits under the Plan.

 

8.4                                                                                No
Employment or Service Rights.

 

Nothing contained
in the Plan shall confer upon any Employee any right with respect to continued
employment with the Employer, nor shall the Plan interfere in any way with the
right of the Employer to at any time reassign an Employee to a different job,
change the compensation of the Employee or terminate the Employee’s employment
for any reason.

 

8.5                                                                                Nontransferability.

 

Notwithstanding
any other provision of this Plan to the contrary, the benefits payable under
the Plan may not be subject to voluntary or involuntary anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Participant or such other person, other than
pursuant to the laws of descent and distribution, without the consent of the
Company.

 

8.6                                                                                Successors.

 

The Company and
its affiliates shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the 

 

14

 

business or assets of the Company and its affiliates
(taken as a whole) expressly to assume and agree to perform under the terms of
the Plan in the same manner and to the same extent that the Company and its
affiliates would be required to perform it if no such succession had taken
place (provided that such a requirement to perform which arises by operation of
law shall be deemed to satisfy the requirements for such an express assumption
and agreement), and in such event the Company and its affiliates (as
constituted prior to such succession) shall have no further obligation under or
with respect to the Plan.

 

8.7                                                                                Governing
Law.

 

Except as
otherwise preempted by the laws of the United States, this 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.  If any provision of this Plan shall be held
illegal or invalid for any reason, such determination shall not affect the
remaining provisions of this Plan.

 

This amendment and
restatement of The AES Corporation Severance Plan has been duly executed by the
undersigned and is effective this 29 day of December 2008.

 

 

	
   

  	
  The AES Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay L. Kloosterboer

  
	
   

  	
   

  	
  Jay L. Kloosterboer, Executive Vice

  
	
   

  	
   

  	
  President, Business Excellence

  

 

15

 

BENEFITS SCHEDULE

 

	
  Title/Grade
  Classification

  	
   

  	
  Severance Benefits

  (Min. 1 Year-of-Service for Eligibility)

  
	
   

  	
   

  	
   

  
	
  Executive Officers
  (CEO, CFO, COO excluded because of contracts)

  	
   

  	
  One (1) times
  (Annual Compensation + Bonus) (Section 4.1)

  Health Benefits
  (Section 4.2)

  Outplacement Benefits
  (Section 4.3)

  Prorated Bonus
  (Section 4.4)

  Special Enhanced
  Benefits (Section 4.5)

  Excise Tax Reimbursement
  (Appendix A)

  
	
   

  	
   

  	
   

  
	
  Grades 24 -27

  	
   

  	
  One (1) times
  (Annual Compensation) (Section 4.1)

  Health Benefits
  (Section 4.2)

  Outplacement Benefits
  (Section 4.3)

  Prorated Bonus
  (Section 4.4)

  Special Enhanced
  Benefits (Section 4.5)

  
	
   

  	
   

  	
   

  
	
  Grades 19 -23

  	
   

  	
  Three (3) months
  prorated Annual Compensation plus two (2) Weeks’ Compensation for each
  Year-of-Service up to a maximum of thirty-nine (39) Week’s Compensation
  (Section 4.1)

  Health Benefits
  (Section 4.2)

  
	
   

  	
   

  	
   

  
	
  Grades 18 and below

  	
   

  	
  Two (2) months
  prorated Annual Compensation plus two (2) Weeks’ Compensation for each
  Year-of-Service up to a maximum of twenty-six (26) Week’s Compensation
  (Section 4.1)

  Health Benefits
  (Section 4.2)

  

 

1

 

THE AES CORPORATION SEVERANCE
PLAN

List of Participating Employers

 

[The Administrator is required to maintain a list of Participating
Employers]*

 

*(i) Individuals employed by Indianapolis Power & Light
Company and its subsidiaries and (ii) Ineligible Employees shall not be
eligible to participate in the Plan.

 

1Exhibit 10.18

 

THE AES
CORPORATION

PERFORMANCE
INCENTIVE PLAN

(As Amended and Restated  December 29, 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.

 

2

 

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.

 

3

 

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 and within the
applicable 21⁄2 month period specified in Treas. Reg. § 1.409A-1(b)(4) (“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.

 

4

 

(b)                                 Unless
otherwise determined by the Committee, Participants who have terminated
employment with the Company prior to the actual payment date of any award 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.

 

5

 

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 29 day of December 2008.

 

	
   

  	
  The AES
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay L.
  Kloosterboer

  
	
   

  	
   

  	
  Jay L. Kloosterboer, Executive Vice

  
	
   

  	
   

  	
  President, Business Excellence

  

 

6

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