AES
CORPORATION
INTERNATIONAL RETIREMENT PLAN
Effective January 1,
2007
The AES Corporation (the
“Sponsor”) hereby establishes the AES Corporation
International Retirement Plan (the “Plan”), effective
January 1, 2007. The purpose of this Plan is to provide
certain employees of the Sponsor and Affiliates with retirement
benefits.
This Plan is an unfunded plan
intended to be a nonqualified deferred compensation plan.
This Plan will be subject to section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) for United States
taxpayers. The amounts that may be payable under this Plan
shall constitute general, unsecured obligations of the Sponsor,
payable solely out of the general assets of the Sponsor, and no
Participant shall have any rights to any specific assets of the
Sponsor. Balances under this Plan represent mere promises to pay
amounts in the future. In the event the Sponsor becomes
subject to an insolvency or bankruptcy proceeding, a Participant in
the Plan shall only have the rights of a general, unsecured
creditor of the Sponsor for any Balances due under the
Plan.
ARTICLE 1 -
DEFINITIONS
1.1
“Account Earnings Rate” means the Moody’s Aa
corporate bond yield rate as of the last business day of the
immediately preceding calendar month plus one (1) percent or such
other investment benchmark as may be determined by the Committee,
in its sole discretion, form time to time.
1.2
“Affiliate” means (i) any subsidiary of the Sponsor,
(ii) any entity or person or group of persons that, directly or
through one or more intermediaries, is controlled by the Sponsor
and (iii) any entity or person or group of persons in which the
Sponsor has a significant equity interest, as determined by the
Committee.
1.3
“Annual Bonus” means the bonus compensation payable to
a Participant under an Employer’s annual bonus plan (not
excluding any pre-tax salary reduction amounts).
1.4
“Balance” of a Deferral Account means the total amount
which has been credited to such Deferral Account, from time to
time, after the adjustments are made for all intervening debits and
credits. The initial Balance of a Deferral Account is
zero.
1.5
“Base Salary” shall mean the Employee’s total
annual base salary (not excluding any pre-tax salary reduction
amounts).
1.6
“Beneficiary” means
the person or persons designated by the Participant on the
Participant’s Beneficiary Designation Form to receive
distributions of a Participant’s Deferral Account Balance
under this Plan at the Participant’s death in accordance with
Article 5.
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1.7
“Beneficiary Designation
Form” means a form available to Participants on which a
Participant may designate the Participant’s Beneficiary in
accordance with Section 5.1.
1.8
“Board” means the
Board of Directors of the Sponsor.
1.9
“Claimant” means a Participant or Beneficiary who makes
a claim for a benefit under the Plan.
1.10
“Code” means the Internal Revenue Code of 1986, as
amended. A reference to a section of the Code shall include a
reference to any regulations or other guidance issued under such
section.
1.11
“Committee” means the International Retirement Plan
Administrative Committee as designated by the Sponsor.
1.12
“Compensation” means the sum of the Participant’s
Base Salary and Annual Bonus for the Plan Year. In addition
to such amounts as may be designated by the Committee, in its sole
discretion, from time to time, any assignment related allowances
are not eligible for benefit purposes under this Plan and shall not
be included in the definition of Compensation. Long Term
Compensation (as defined in The AES Corporation 2003 Long Term
Compensation Plan or any successor long term compensation plan)
shall not be included in the definition of Compensation.
1.13
“Company Matching Contribution” means the annual
notional company matching contribution which is credited to the
Participant’s Deferral Account for the Plan Year.
1.14
“Deferral Account” means a bookkeeping account created
for each Participant that may be credited with Deferral Amounts
under Section 3.1, Company Matching Contributions under Section
3.2, Profit-Sharing Contributions under Section 3.3, and earnings
credits under Section 3.4, and debited for any distributions under
Article 4. The Committee may maintain separate sub-accounts
with respect to each Participant with regard to the
Participant’s Deferral Amounts, Company Matching
Contributions, and Profit-Sharing Contributions in order to
properly track such amounts. If this is the case, references
to a Participant’s “Deferral Account” shall be
deemed to refer to the total of all such sub-accounts as necessary
to properly implement the Plan.
1.15
“Deferral Agreement” means the agreement between an
Employer or the Committee and a Participant, including any
amendments thereto, which specifies the Deferral Amount to be
withheld on behalf of a Participant, subject to any procedures
established by the Committee. Each Deferral Agreement or
amendment thereto shall be made or confirmed in writing under
procedures established by the Committee.
1.16
“Deferral Amount” means, for the 2007 Plan Year, the
whole percentage, up to 50%, by which a Participant’s Base
Salary plus the whole percentage, up to 80%, by which the Annual
Bonus is reduced on account of a Participant’s Deferral
Agreement. The Committee may, in its sole discretion, change
the Deferral Amount for subsequent Plan Years.
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1.17
“Disability” means (a) the Participant is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (b) the
Participant, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months, is receiving income replacement benefits for a period of
not less than three months under an accident and health plan
covering employees of an Employer.
1.18
“Effective Date” means January 1, 2007.
1.19
“Eligible Employee” means an Employee who is designated
for participation in the Plan by the Committee and listed in
Appendix A hereto (which Appendix A shall be updated from time to
time by the Committee). An Employee will know that he or she
is an Eligible Employee if the employee is informed by the Sponsor
in writing that he or she is eligible for the Leadership
Development Expatriate Program. The Committee may, at its
sole discretion, add or delete an Eligible Employee from Appendix A
at any time and participation in the Plan by an employee for one
Plan Year shall not guarantee participation in the Plan for
subsequent Plan Years. Such amendment of Appendix A shall not
affect an Eligible Employee’s Deferral Agreement for the
current Plan Year.
1.20
“Employee” means an individual who is employed by the
Sponsor or an Affiliate.
1.21
“Employer” means the Sponsor and any
Affiliate.
1.22
“Former Participant” means any Eligible Employee or
former Eligible Employee who has ceased to be a Participant and on
whose behalf a Deferral Account continues to be maintained by the
Plan.
1.23
“Participant” means an Eligible Employee who becomes a
Participant in accordance with Section 2.1.
1.24
“Plan” means the AES Corporation International
Retirement Plan.
1.25
“Plan Year” means the 12-month period ending on the
last day of the fiscal year of the Sponsor, which shall be December
31 of each calendar year. The first Plan Year begins on
January 1, 2007.
1.26
“Profit-Sharing Contribution” means the annual
discretionary notional Profit-Sharing Contribution which may be
added to the Participant’s Deferral Account for a Plan
Year.
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1.27
“Sponsor” means The AES Corporation, a Delaware
Corporation, or any successor thereto.
1.28
“Termination of Employment” means a separation from
service (as defined in section 409A(a)(2)(A)(i) of the Code) from
an Employer.
1.29
“Unforeseeable Emergency” means a severe financial
hardship to the Participant, as more fully described in section
409A(a)(2)(B)(ii)(I) of the Code.
ARTICLE 2 - ELIGIBILITY AND
PARTICIPATION
2.1
Commencement of Participation
An Eligible Employee shall
become a Participant as of the date he is designated as an Eligible
Employee by the Committee. A Participant may contribute a
Deferral Amount by completing a Deferral Agreement in accordance
with the procedures set forth by the Committee. The Deferral
Agreement shall set forth the whole percentage of a
Participant’s Base Salary or Annual Bonus that shall be
deferred for the applicable Plan Year or portion thereof, subject
to such limits as the Committee may establish.
A Participant’s
Deferral Agreement for a Plan Year shall continue in effect from
Plan Year to Plan Year unless the Participant completes a new
Deferral Agreement (or cancels his Deferral Agreement) in a timely
manner in accordance with the procedures set forth by the
Committee.
2.2
Time Limita
