Exhibit 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 th
