Severance Plan – AES Corp.
THE AES CORPORATION
SEVERANCE PLAN
(As Amended and Restated December 31, 2010)
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:
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The Eligible Employee’s voluntary resignation, including but not limited to |
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Any Separation from Service that the Employer determines (either before or |
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A Separation from Service in connection with an Eligible Employee’s failure |
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A Separation from Service for, or on account of, Cause; |
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A Disability Termination; |
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The Eligible Employee’s death; |
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The Eligible Employee declines to accept a New Job Position offered by the |
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The Sale of Business Rule set forth in Section 2.4 herein; or |
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The voluntary transfer of employment from Eligible Employee’s Employer to |
“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:
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Permanent Layoff; |
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Reduction-in-force; |
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Permanent job elimination; |
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The restructuring or reorganization of a business unit, division, department |
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Termination by Mutual Consent; or |
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Eligible Employee declines to accept a New Job Position offered by the |
“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.
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“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 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:
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Any Employee who has been hired to work on a part-time, seasonal or temporary |
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Any Employee who has been hired by the Employer to work in a job share |
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An Employee who is member of a collective bargaining unit to which this Plan |
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An Employee entitled to a severance type payment pursuant to any other plan, |
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Leased employees, including those within the meaning of section 414(n) of the |
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Nonresident aliens (other than those nonresident aliens to whom the Employer |
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Any individual who has agreed in writing that he or she waives his or her |
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Any Employee who has an enforceable right to resume employment or to be |
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:
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The Eligible Employee is employed by the new organization immediately |
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The Employer terminates the employment of an Eligible Employee who did not |
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 2 1/2 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 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.
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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
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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
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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.
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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.
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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 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 31 day of December 2010.
|
The AES Corporation |
||
|
By: |
/s/ Rita Trehan |
|
|
Rita Trehan, Vice President |
||
|
Human Resources |
||
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BENEFITS SCHEDULE
|
Title/Grade Classification |
Severance Benefits |
|
|
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 (see Appendix A for specific participant |
|
|
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’ Health Benefits (Section 4.2) |
|
|
Grades 18 and below |
Two (2) months prorated Annual Compensation plus two (2) Weeks’ Compensation 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 |
-1-
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