Exhibit 10.20
The AES Corporation
Restoration Supplemental Retirement Plan
As Amended and Restated on March 13, 2008
The AES Corporation
Restoration Supplemental Retirement Plan
As
Amended and Restated on March 13, 2008
The AES Corporation hereby establishes The AES Restoration Supplemental Retirement Plan (the “Plan”) on the terms and conditions hereinafter set forth. The Plan is designed primarily for the purpose of providing benefits for a select group of management and highly compensated employees of the Company and its Subsidiaries and is intended to qualify as a “top hat” plan under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is amended and restated as set forth herein to comply with Section 409A.
“Bonus Compensation” means, as determined in the sole discretion of the Committee, such annual bonus or other bonus Compensation paid to a Participant.
“Beneficiary” means the person or persons designated by a Participant as his beneficiary hereunder in accordance with the provisions of Article V.
“Board” means the Board of Directors of the Company.
“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 Exchange Act) 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 (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. Notwithstanding the foregoing or any provision of this Plan to the contrary, the foregoing definition of Change in Control shall be interpreted, administered and construed in manner necessary to ensure that the occurrence of any such event shall result in a Change of Control only if such event qualifies as a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation, as applicable, within the meaning of Treas. Reg. § 1.409A-3(i)(5).
1
“Code” means the Internal Revenue Code of 1986, as amended, and any successor code or law.
“Committee” means the Compensation Committee of the Board, or such other committee designated by the Board to discharge the duties of the Committee hereunder.
“Company” means The AES Corporation, a Delaware Corporation, or any successor thereto.
“Company Match” means the employer matching contributions contributed to the Participant’s account under the Qualified Plan for the Plan Year.
“Compensation” shall, unless otherwise determined by the Committee, have the meaning assigned thereto in the Qualified Plan (determined without regard to any amounts voluntarily deferred under the terms of this Plan to the extent necessary to carry out the terms and intent of this Plan); provided, however, with respect to a Participant’s first-year of eligible participation, any such election shall only apply to applicable Compensation paid for services performed after the election. Accordingly, if a Deferral Election is made in the first-year of eligibility but after the beginning of the specified performance period (e.g., annual bonus compensation), the Deferral Election shall only apply to the total amount of such Compensation multiplied by the ratio of (i) the number of days remaining in the performance period after the election to (ii) the total number of days in the performance period.
“Deferral Account” means the bookkeeping account(s) established on behalf of a Participant to track the Participant’s deferred compensation benefits under the Plan.
“Deferral Election” means an election by a Participant to defer Compensation in accordance with the provisions of Section 2.2 of the Plan.
“Deferrals” shall have the meaning ascribed thereto in Section 2.2(b) hereof.
“Disability” means a Participant who: (1) 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 to last for a continuous period of not less than 12 months; or (2) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan of the Company or its Subsidiaries or (3) is determined to be totally disabled by the Social Security Administration.
“Disability Date” means the date on which a Participant Separates from Service due to Disability.
“Distribution Date” means the date on which distributions to a Participant are to commence. Distribution Dates are determined according to each Participant’s Deferral Account elections or as otherwise provided under the terms of the Plan.
“Distribution Option” means the form in which payments to a Plan Participant are to be paid. Distribution Options are determined according to each Participant’s Deferral Account elections or as otherwise provided under the terms of the Plan.
2
“Earnings” shall have the meaning ascribed thereto in Section 2.4(b) of the Plan.
“Insolvency” means, with respect to the Company: (1) an adjudication of bankruptcy; (2) the assignment for the benefit of creditors of or by the Company; (3) a material part of all of the property of the Company becomes subject to the control and direction of a receiver, which receivership is not dismissed within sixty (60) days of such receiver’s appointment; or (4) the filing by the Company of a petition for relief under any federal or other bankruptcy or other insolvency law or for an arrangement with creditors.
“Key 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 Section 409A and the procedures established by the Company.
“Participant” means any employee who has satisfied the eligibility requirements set forth in Section 1.4 of the Plan.
“Person” means any individual, corporation, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Plan Year” means the twelve-month period beginning each January 1.
“Profit Sharing Contribution” means the annual discretionary employer profit sharing contribution allocated to the accounts of participants under the Qualified Plan for a Plan year.
“Qualified Plan” means The AES Corporation Profit Sharing and Stock Ownership Plan, as amended, or such other plan as designated by the Committee.
“Retirement” means a Participant’s Separation From Service on or after the date such Participant attains age fifty-nine and a half (59½).
“Section 409A” shall mean Section 409A, the regulations and other binding guidance promulgated thereunder.
“Separation From Service” and “Separate from Service” shall mean a Participant’s death, retirement or other 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 a Participant 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. For this purpose, a Participant will be presumed to have experienced a Separation from Service when the level of bona fide services performed permanently decreases to a level less than twenty percent (20%) of the
3
average level of bona fide services performed during the immediately preceding thirty-six (36) month period or such other applicable period as provided by Section 409A.
“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 Committee.
“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, a beneficiary, or a dependent (as determined under Section 152(a) of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)) of the Participant; the need to pay for the funeral expenses of a spouse, beneficiary or dependent (as defined above); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
4
5
6
7
The Distribution Option for Deferral Accounts shall be determined in accordance with such election procedures as are established by the Committee and distributions shall, at the Participant’s option, be paid in the form of a lump sum or in annual installments over a period of 2-to-15 years; provided, however, that the Distribution Option must be established at the time of initial deferral. In the event that no valid and timely Distribution Option has been made, benefits will be paid in a lump sum. All payments under the Plan shall be made in cash. For purposes of Section 409A and the Plan: (i) the right to installment payments shall be treated as the right to a single payment; 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. Except as specified in Section 3.1(a) and 3.3(a), a Participant shall have no right to designate the date of any payment under the Plan.
8
Notwithstanding the foregoing provisions, in the event a Participant Separates From Service for any reason (other than death) prior to the Participant reaching Retirement eligibility, the Participant will receive a lump sum payment of all amounts credited to the Participant’s Deferral Accounts. Such payments will be made on the 6-month anniversary of the date of Separation from Service (or, if earlier, the date of death of the Participant). .
The Committee may, upon request of the Participant, cause to be paid to such Participant an amount equal to all or any part of the amounts credited to such Participant’s Deferral Accounts if the Committee determines, in its absolute discretion based on such reasonable evidence that it shall require, that such a payment or payments is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency occurring with respect to the Participant. The amounts distributed with respect to an Unforeseeable Emergency may not exceed the amount necessary to satisfy the emergency plus amounts necessary to pay taxes on the distribution, after taking into account the extent to which the hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent liquidation would not itself cause severe financial hardship).
Notwithstanding the foregoing provisions, upon a Change in Control the Participant will receive a lump sum payment of all of the amounts credited to the Participant’s Deferral Accounts. Such payment will be paid in a lump sum within thirty (30) days of the Change in Control.
The Beneficiary or Beneficiaries of a Participant shall be entitled to receive the unpaid balance of the Participant’s Deferral Accounts to which the Participant was entitled at his death, payable according to the Participant’s elections, if the Participant dies on or after age 59½. In the event of a Participant’s death prior to obtaining Retirement eligibility, the value of the Participant’s Deferral Accounts will be paid to the Participant’s beneficiary in a lump sum as soon as administratively practicable. If the Beneficiary is the Participant’s estate, then the unpaid balance of the Participant’s Deferral Accounts will be paid in a lump sum to the Participant’s estate as soon as administratively practicable (regardless of whether the Participant obtained Retirement age). The Participant shall designate his Beneficiary in accordance with the provisions of Article V.
9
If the Company, in its sole discretion, elects to invest in a life insurance, disability or annuity policy on the life of Participant to assist it with the informal funding of its obligations under this Plan, Participant shall assist the Company, from time to time, promptly upon the request of the Company, in obtaining such insurance policy by supplying any information necessary to obtain such policy as well as submitting to any physical examinations required therefore. The Company shall be responsible for the payment of all premiums with respect to any whole life, variable, or universal life insurance policy purchased in connection with this Plan unless otherwise expressly agreed.
A designation of a Beneficiary hereunder may be made only by an instrument (in form acceptable to the Committee) signed by the Participant and filed with the Committee prior to the Participant’s death. In the absence of such a designation and at any other time when there is no existing Beneficiary designated hereunder, the unpaid value of the Participant’s Deferral Accounts to which the Participant was entitled at his death shall be distributed to the Participant’s estate. A Beneficiary who dies or which ceases to exist shall not be entitled to any part of any payment thereafter to be made to the Participant’s Beneficiary unless the Participant’s designation specifically provides to the contrary. If two or more persons designated as a Participant’s Beneficiary are in existence with respect to a single Deferred Compensation Benefit, the amount of any payment to the Beneficiary
10
under this Plan shall be divided equally among such persons, unless the Participant’s designation specifically provides to the contrary. The Beneficiary Designations must be the same for all Deferral Accounts under the Plan.
A Participant may, at any time and from time to time, change a Beneficiary designation hereunder without the consent of any existing Beneficiary or any other person. Any change in Beneficiary shall be made only by an instrument (in form acceptable to the Committee) signed by the Participant, and any change shall be effective only if received by the Committee prior to the death of the Participant.
The Committee shall determine the rights of any Participant to any deferred compensation benefits hereunder. Any Participant who believes that he has not received the deferred compensation benefits to which he is entitled under the Plan may file a claim in writing with the Committee. The Committee shall, no later than 90 days after the receipt of a claim (plus an additional period of 90 days if required for processing, provided that notice of the extension of time is given to the claimant within the first 90-day period), either allow or deny the claim in writing. If a claimant does not receive written notice of the Committee’s decision on his claim within the above-mentioned period, the claim shall be deemed to have been denied in full.
A denial of a claim by the Committee, wholly or partially, shall be written in a manner calculated to be understood by the claimant and shall include:
A claimant whose claim is denied (or his duly authorized representative) may within 60 days after receipt of denial of a claim file with the Committee a written request for a review of such claim. If the claimant does not file a request for review of his claim within such 60-day period, the claimant shall be deemed to have acquiesced in the original decision of the Committee on his claim, the decision shall become final and the claimant will not be entitled to bring a civil action under Section 502(a) of
11
ERISA.. If such an appeal is so filed within such 60-day period, the Company (or its delegate) shall conduct a full and fair review of such claim. During such review, the claimant (or the claimant’s authorized representative) shall be given the opportunity to review all documents that are pertinent to his claim and to submit issues and comments in writing.
The Company shall mail or deliver to the claimant a written decision on the matter based on the facts and the pertinent provisions of the Plan within 60 days after the receipt of the request for review (unless special circumstances require an extension of up to 60 additional days, in which case written notice of such extension shall be given to the claimant prior to the commencement of such extension). Such decision shall be written in a manner calculated to be understood by the claimant, shall state the specific reasons for the decision and the specific Plan provisions on which the decision was based and shall, to the extent permitted by law, be final and binding on all interested persons. If the decision on review is not furnished to the claimant within the above-mentioned time period, the claim shall be deemed to have been denied on review. 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 Company. In addition, any such state or federal judicial or administrative proceeding must be filed within six (6) months after the Company’s final decision. In addition, 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.
The Company shall have the right to withhold from any deferred compensation benefits payable under the Plan or other wages payable to a Participant an amount sufficient to satisfy all federal, state and local tax withholding requirements, if any, arising from or in connection with the Participant’s receipt or vesting of deferred compensation benefits under the Plan.
Nothing in this Plan shall be construed as guaranteeing future employment to any Participant. Without limiting the generality of the preceding sentence, except as otherwise set forth in a written agreement, a Participant continues to be an employee of the Company solely at the will of the
12
Company subject to discharge at any time, with or without cause. The benefits provided for herein for a Participant shall not be deemed to modify, affect or limit any salary or salary increases, bonuses, profit sharing or any other type of compensation of a Participant in any manner whatsoever. Nothing contained in this Plan shall affect the right of a Participant to participate in or be covered by or under any qualified or nonqualified pension, profit sharing, group, bonus or other supplemental compensation, retirement or fringe benefit Plan constituting any part of the Company’s compensation structure whether now or hereinafter existing.
If a benefit payable hereunder is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Committee may require such proof of incompetency, minority, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Company from all liability with respect to such benefit.
No right or interest under this Plan of any Participant or Beneficiary shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of the Participant or Beneficiary.
If any provision of this Plan or the application thereof to any circumstance(s) or person(s) is held to be invalid by a court of competent jurisdiction, the remainder of the Plan and the application of such provision to other circumstances or persons shall not be affected thereby.
The Company may at any time (without the consent of any Participant) modify, amend or terminate any or all of the provisions of this Plan; provided, however, that no modification, amendment or termination of this Plan shall adversely affect the rights of a Participant under the Plan without the consent of such Participant. Notwithstanding the foregoing or any provision of the Plan to the contrary, the Company 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 to conform the provisions of the Plan with Section 409A regardless of whether such modification, amendment or termination of this Plan or other action shall adversely affect the rights of a Participant under the Plan. Termination of this Plan shall not be a distribution event under the Plan unless otherwise permitted under Section 409A.
13
The Company shall indemnify and hold harmless the members of the Committee from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act, or omission to act, in connection with the performance of such person’s duties, responsibilities and obligations under the Plan, other than such liabilities, costs and expenses as may result from the gross negligence, willful misconduct, and/or criminal acts of such persons.
In further consideration of the benefits available to each Participant under this Plan, each Participant shall agree that, except as such may be disclosed in financial statements and tax returns, or in connection with estate planning, all terms and provisions of this Plan, and any agreement between the Company and the Participant entered into pursuant this Plan, are and shall forever remain confidential until the death of Participant; and the Participant shall not reveal the terms and conditions contained in this Plan or any such agreement at any time to any person or entity, other than his respective financial and professional advisors unless required to do so by a court of competent jurisdiction or as otherwise may be required by law.
The Company may, in its sole discretion, permit a Participant to take a leave of absence for a period not to exceed six months, or if longer, so long as the Participant retains a right to reemployment under any applicable statute or by contract. Any such leave of absence must be approved by the Company. During this time, the Participant will still be considered to be in the employ of the Company for purposes of this Plan.
For purposes of interpreting the provisions of this Plan, the masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, and the singular shall include the plural unless otherwise clearly required by the context.
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.
The effective date of the Plan is generally January 1, 2005; provided, however, that the effective date of the Plan for purposes of determining contributions under Section 2.1 of the Plan shall be January 1, 2004.
14
This amendment and restatement of The AES Corporation Restoration Supplemental Retirement Plan has been duly executed by the undersigned and is effective this 13 day of March 2008.
|
|
The AES Corporation |
||
|
|
|
||
|
|
|
||
|
|
By: |
/s/ |
|
|
|
Jay L. Kloosterboer, Executive Vice |
||
|
|
|
President, Business Excellence |
|
15