Exhibit 10.12
THE AES CORPORATION
2001 STOCK OPTION PLAN
ARTICLE 1
PURPOSE
The AES Corporation desires to encourage and promote the growth and
prosperity of the Company by allowing certain employees of the Company and its
Affiliates to continue to share in the stock ownership of the Company pursuant
to The AES Corporation 2001 Stock Option Plan.
ARTICLE 2
DEFINITIONS
SECTION 2.01 . DEFINITIONS. Whenever used in this Plan, the words and
phrases set forth below shall have the following meanings:
(a) "AFFILIATES" shall mean, with respect to any entity, those entities
directly or indirectly controlling, controlled by, or under common control with
the Company; PROVIDED that no securityholder of the Company shall be deemed an
"Affiliate" of any other securityholder of the Company solely by reason of any
investment in the Company; and PROVIDED FURTHER that "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), when used with respect to any entity, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise.
(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.
(c) "CHANGE OF CONTROL" shall mean the first to occur of:
(i) an individual, corporation, partnership, group, associate or other
entity or "person", as such term is defined in Section 14(d) of the
Exchange Act of 1934, other than the Company or any employee benefit
plan(s) sponsored by the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
30% or more of the combined voting power of the Company's outstanding
securities ordinarily having the right to vote at elections of directors;
(ii) individuals who constitute the Board of Directors on the
Effective Date (the "INCUMBENT BOARD") cease for any reason to constitute
at least a majority thereof; PROVIDED that any Approved Director
(as hereinafter defined) shall be, for purposes of this subsection (ii),
considered as though such person were a member of the Incumbent Board. An
"Approved Director", for purposes of this subsection (ii), shall mean any
person becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Company's stockholders, was approved by a
vote of at least three-quarters of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee of the Company for
director), but shall not include any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or "person" other than the
Board of Directors; or
(iii) the approval by the stockholders of the Company of a plan or
agreement providing for a merger or consolidation of the Company other than
with a wholly-owned subsidiary and other than a merger or consolidation
that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 51% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation, or for a sale, exchange or other disposition of
all or substantially all of the assets of the Company. If any of the events
enumerated in this subsection (iii) occurs, the Committee shall determine
the effective date of the Change of Control resulting therefrom for
purposes of this Plan.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" shall mean a committee of the Board designated by the Board
of Directors to administer this Plan. Unless otherwise determined by the Board
of Directors, the Compensation Committee of the Board of Directors shall be the
Committee under this Plan.
(f) "COMPANY" shall mean The AES Corporation, a Delaware corporation, or
its successor.
(g) "EFFECTIVE DATE" shall mean January l, 2001; provided, however, no
stock option grants are granted to executive officers until approved by
stockholders.
(h) "EMPLOY" or "EMPLOYMENT" shall mean the absence of any interruption or
termination of employment by the Company or an Affiliate. Employment shall not
be considered interrupted in the case of transfers between
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payroll locations of the Company and/or an Affiliate or in the case of such
leave or any other leave of absence approved by the Company.
(i) "EMPLOYEE" shall mean any person who is a common law employee of the
Company or an Affiliate.
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "INCENTIVE STOCK OPTION" shall mean an Option granted under Article 5,
which is designated by the Board of Directors as an Incentive Stock Option.
(l) "NYSE" shall mean the New York Stock Exchange, Inc.
(m) "NONQUALIFIED OPTION" shall mean an option granted under Article 5,
which is designated by the Board of Directors as a Nonqualified Option.
(n) "OFFICER" shall mean any officer of the Company or of a subsidiary of
the Company whose office or duties subject him to the reporting, "short swing"
transaction and other provisions of Section 16 of the Exchange Act.
(o) "OPTION" shall mean the right to purchase stock granted to an Employee
under this Plan.
(p) "OPTIONEE" shall mean any person who has the right to purchase stock
pursuant to an Option granted under this Plan.
(q) "PLAN" shall mean The AES Corporation 2001 Stock Option Plan.
(r) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(s) "STOCK" shall mean the Common Stock of the Company, par value $.01 per
share.
(t) "STOCK OPTION ADMINISTRATOR" shall mean one or more persons, who may be
employees of the Company and/or Optionees, who is or are selected by the Company
from time to time to be responsible for the day-to-day operations of this Plan.
(u) "SUBSTITUTE OPTION" shall mean an Option granted in assumption of, or
in substitution for, an outstanding option previously granted by a company
acquired by the Company or an Affiliate or with which the Company or an
Affiliate combines.
SECTION 2.02 . WORD USAGE. Wherever used in this Plan, any word denoting
the masculine shall include the feminine, and any word denoting the plural shall
include the singular and vice versa unless the context indicates
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otherwise. As used in this Plan, the words "herein," "hereafter," or
"hereunder," or any other compound of the words "here" shall refer to this Plan
in its entirety and not to any subpart, unless the context indicates otherwise.
Any reference in this Plan to a statute or a provision of a statute shall
include any successor statute or provision thereto and any regulations
promulgated thereunder.
ARTICLE 3
THE COMMITTEE
SECTION 3.01. THE COMMITTEE. This Plan shall be administered by the
Committee. The Committee shall consist of not less than the minimum number of
persons from time to time required by Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code, each of whom, to the extent necessary to comply with
such Rule 16b-3 and Section 162(m) only, is a "Non-Employee Director" and an
"Outside Director" within the meaning of such Rule 16b-3 and Section 162(m),
respectively. The Board may designate one or more directors as alternate members
of the Committee who may replace any absent or disqualified member at any
meeting of the Committee. No member or alternate member of the Committee shall
be eligible, while a member or alternate member, for participation in this Plan.
The Committee, subject to the provisions of this Plan and subject to such
restrictions as the Board of Directors may make from time to time, shall have
authority to prescribe, amend and rescind rules and regulations relating to this
Plan, to construe all Plan provisions and to determine any and all questions
arising under this Plan. The Committee shall determine the manner, timing and
amount of any Options granted pursuant to this Plan. The determination of the
Committee shall be binding and conclusive on all persons.
SECTION 3.02. ACTION BY COMMITTEE. A majority of the members of the
Committee constitute a quorum for the transaction of business. Any determination
or action of the Committee may be made or taken by a majority of the members of
the Committee present (either in person or by telephone) at any meeting of the
Committee, or without a meeting by resolution or instrument in writing signed by
a majority of the members of the Committee.
SECTION 3.03. DELEGATION OF POWERS. The Committee may delegate its powers
set forth in Section 3.01 and Section 4.01 to each of the Chairman of the Board
of Directors and the President of the Company in respect of determinations of
Options to be granted to Employees who are not (a) Officers, (b) directors of
the Company or (c) beneficial owners of more than 10% of the Stock or of any
other class of equity security of the Company registered under Section 12 of the
Exchange Act; PROVIDED, HOWEVER, that any such delegation shall conform with the
requirements of the General Corporation Law of the State of Delaware.
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ARTICLE 4
ELIGIBILITY
SECTION 4.01. ELIGIBILITY. (a) All Employees shall be eligible to receive
an Option. The Committee shall determine which Employees shall receive an
Option. In making this determination, the Committee may take into account the
nature and length of service rendered by the Employee, his past, present and
potential contributions to the success of the Company and such other factors
that the Committee, in its sole discretion, shall deem relevant.
(b) Holders of options granted by a company acquired by the Company or with
which the Company combines are eligible for grants of Substitute Options under
this Plan.
ARTICLE 5
GRANT OF OPTIONS
SECTION 5.01. GRANT OF OPTIONS. Each Incentive Stock Option and
Nonqualified Option shall be in writing and shall specify the number of shares
of Stock which may be purchased pursuant to the Option, the purchase price, the
period during which the Option may be exercised and other conditions, if any,
under which the Option has been granted. Unless the Committee shall determine
otherwise, such writing shall also provide for any vesting of the Option.
Without limiting the generality of the foregoing, unless specifically provided
to the contrary in an award or other instrument evidencing an Option, upon a
Change of Control, all Options shall become fully vested and exercisable.
SECTION 5.02. LIMITATIONS ON INCENTIVE STOCK OPTIONS. The terms of any
Incentive Stock Option shall comply in all respects with the provisions of
Section 422 of the Code.
SECTION 5.03. MAXIMUM SHARES AUTHORIZED UNDER THIS PLAN. (a) The total
number of shares of Stock for which Options can be granted pursuant to this Plan
shall be 15,000,000 shares, subject to adjustment as provided in Article 7. The
Company shall reserve, either from authorized but heretofore unissued Stock or
from Stock reacquired by the Company and held in its treasury, the full number
of shares of Stock necessary to satisfy all Options that may be granted under
this Plan.
(b) Subject to adjustment as provided in Article 7, no Employee may receive
Options in any calendar year that relate to more than one million shares of
Stock.
(c) Any shares of Stock underlying a Substitute Option shall not be counted
against the shares of Stock available for Options under this Plan.
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ARTICLE 6
EXERCISE OF OPTIONS
SECTION 6.01. PROCEDURE FOR EXERCISING OPTIONS. (a) Any Option may be
exercised at any time during the period commencing with either the date the
Option is granted or the first date permitted under a vesting schedule
established by the Committee and ending with the expiration date of the Option;
PROVIDED, HOWEVER, that any Option granted to (a) an Officer, (b) a director of
the Company or (c) a beneficial owner of 10% or more of the Stock or of any
other class of equity security of the Company registered pursuant to Section 12
of the Exchange Act cannot be exercised until at least six months and one day
after the date the Option is granted. An Optionee may exercise his Option for
all or part of the number of shares of Stock which he is eligible to exercise
under the terms of the Option.
(b) The exercise of an Option shall be effective only upon delivery to the
Stock Option Administrator of (i) written notice of such exercise in the form
prescribed by the Committee and (ii) payment of the full purchase price of
shares of stock in respect of which notice of exercise is given. The notice
shall specify the number of shares to be exercised and shall be signed by the
Optionee. The full purchase price of the shares of Stock as to which an Option
is exercised shall be paid to the Company in full, or adequate provision for
such payment made, at the time of exercise at the election of the Optionee in
cash. Notwithstanding the foregoing, if shares of Stock are listed on the NYSE
or on any national securities exchange, the requirement of the payment in cash
will be deemed satisfied if the Optionee makes arrangements that are
satisfactory to the Company with a broker that is satisfactory to the Company to
sell a sufficient number of shares of Stock which are being purchased pursuant
to the exercise, so that the net proceeds of the sale transaction will at least
equal the amount of the aggregate purchase price of such shares plus any amounts
required to be withheld, and pursuant to which the broker undertakes to deliver
to the Company such amount not later than the date on which the sale transaction
will settle in the ordinary course of business.
SECTION 6.02. ISSUANCE OF SHARES. Until such time as the issuance of shares
of Stock in the name of the Optionee is registered on the stockholders ledger of
the Company, the Optionee shall have no rights of a stockholder of the Company,
including without limitation the right to vote any such shares or to receive any
dividends which are attributable to such shares.
SECTION 6.03. DISABILITY. Unless the Committee shall determine otherwise,
in the event an Optionee becomes "permanently and totally disabled" (as defined
in Section 22(e)(3) of the Code) while in the continuous employment of the
Company or an Affiliate, all Options held by such Optionee shall become fully
vested and exercisable and shall expire on the earlier of (a) the date the
Option would have expired had the Optionee continued in such employment and (b)
one (1) year after the date such employment ceases because of such disability.
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SECTION 6.04. DEATH. Unless the Committee shall determine otherwise, in the
event of the death of an Optionee while in the continuous employment of the
Company or an Affiliate, all Options held by such Optionee shall become fully
vested and exercisable and shall automatically expire on the earlier of (a) the
date the Option would have expired had the Optionee continued in such employment
and (b) one (1) year after such death. Any such Option may be exercised by the
personal representative of the deceased Optionee's estate or by the person or
persons to whom his rights under such Option have passed either by will or by
the laws of descent and distribution. Any such Option is exercisable in the same
manner and subject to the same conditions (other than the expiration date) which
would have applied if the Optionee had exercised such Option before he died.
SECTION 6.05. INCAPACITY. Unless the Committee shall determine otherwise,
in the event that an Optionee is adjudged to be mentally incompetent while in
the continuous employment of Company or an Affiliate or during a period of
permanent and total disability which commenced while in such employment, the
Optionee's guardian, conservator or legal representative shall have the right to
exercise on behalf of the Optionee any Options granted to the Optionee.
SECTION 6.06. TERMINATION OF EMPLOYMENT. Unless the Committee shall
determine otherwise, in the event that an Optionee's employment with the Company
or an Affiliate terminates for any reason other than the death or disability of
such Optionee, all Options held by such Optionee shall automatically expire on
the earlier of (a) the date the Option would have expired had the Optionee
continued in such employment and (b) one hundred and eighty (180) days after the
date that such Optionee's employment ceases, except that any Incentive Stock
Option shall automatically expire on the earlier of clause (a) above and three
(3) months after the date that such Optionee's employment with the Company or an
Affiliate ceases.
SECTION 6.07. TRANSFER OF OPTIONS. Except to the extent that an Option may
be transferred by will or by the laws of descent and distribution as provided
for in Section 6.04, no Option granted under this Plan shall be sold, assigned,
transferred, conveyed, pledged or otherwise disposed of by the Optionee or by
any other person having or claiming to have any rights thereto or therein, and
no Option shall be subject to bankruptcy proceedings, claims of creditors,
attachment, garnishment, execution, levy or other legal process against the
Optionee or any such other person or their property.
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ARTICLE 7
ADJUSTMENTS UPON RECAPITALIZATIONS AND OTHER CORPORATE EVENTS
SECTION 7.01. RECAPITALIZATIONS. In the event of any stock split, reverse
stock split, stock dividend or other subdivision or combination of the Stock or
other securities of the Company, the following shall be adjusted
proportionately:
(a) the number of shares of Stock (or number and kind of other securities
or property) with respect to which Options may thereafter be granted, including
the aggregate and individual limits specified in Section 5.03;
(b) the number of shares of Stock or such other securities (or number kind
of other securities or property) subject to outstanding Options; and
(c) the grant, purchase or exercise price with respect to any Option;
PROVIDED, HOWEVER, that the number of shares subject to any Option shall always
be a whole number.
Section 7.02. OTHER CORPORATE EVENTS. In the event of any merger,
consolidation, split-up, spin-off, combination or exchange of shares or other
recapitalization or change in capitalization or other similar corporate
transaction or event that affects the Stock or other securities of the Company
(other than any corporate event described in Section 7.01 or Section 7.03) and
the Committee determines that an adjustment is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under this Plan, the Committee shall, in such manner as it may
deem equitable, adjust any or all of:
(a) the number of shares of Stock (or number and kind of other securities
or property) with respect to which Options may thereafter be granted, including
the aggregate and individual limits specified in Section 5.03
(b) the number of shares of Stock or such other securities (or number and
kind of other securities or property) subject to outstanding Options; and
(c) the grant, purchase or exercise price with respect to any Option;or, if
deemed appropriate, make provision for a cash payment to an Optionee; PROVIDED,
HOWEVER, that the number of shares subject to any Option shall always be a whole
number.
Section 7.03. TERMINATION UPON LIQUIDATION. A liquidation or dissolution of
the Company shall cause all Options, to the extent not previously exercised, to
terminate, unless the plan or agreement of liquidation or dissolution provides
otherwise.
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ARTICLE 8
Miscellaneous
Section 8.01. AMENDMENT AND TERMINATION OF THIS PLAN AND ANY OPTIONS. (a)
This Plan shall terminate no later than January 1, 2011. Notwithstanding the
immediately preceding sentence, the Company reserves the right, by action of its
Board of Directors, to change, amend, modify or terminate this Plan (or any
portion thereof) at any time; PROVIDED that no such change, amendment,
modification or termination shall be made without stockholder approval if such
approval is necessary to qualify for or comply with any tax or regulatory status
or requirement (including any approval requirement which is a prerequisite for
exemptive relief from Section 16(b) of the Exchange Act or Section 162(m) of the
Code) for which or with which the Board of Directors deems it necessary or
desirable to qualify or comply. Notwithstanding anything to the contrary herein,
the Committee may amend this Plan in such manner as may be necessary so as to
have this Plan conform with local rules and regulations in any jurisdiction
outside the United States. Neither the termination of this Plan (or any portion
thereof) nor any change, amendment or modification shall have the effect of
changing, amending, modifying or terminating in any way any Option which has
been granted under this Plan prior to the effective date of any such change,
amendment, modification or termination of this Plan.
(b) Subject to the terms of this Plan and applicable law, the Committee may
waive any conditions or rights under or change, amend, modify or terminate any
Option theretofore granted, prospectively or retroactively;
(c) The Board shall not amend this Plan to increase the maximum shares
authorized by Section 5.03(a) without stockholder approval, other than as set
forth in Article 7.
Section 8.02. COMPLIANCE WITH SECURITIES LAWS. Options shall not be
granted, and shares of Stock shall not be issued, unless in the discretion of
the Committee all such grants and issuances shall comply with all relevant
provisions of federal and state laws, including the Securities Act, the Exchange
Act and the requirements of any interdealer quotation system or stock exchange
upon which the Stock may then be quoted or listed. The Company may require
Optionees to deliver representations, agreements and other documents at the time
of exercise of Options, necessary to comply with any such laws, regulations and
other requirements.
Section 8.03. LEGENDS. In the event the offer and sale of the Stock issued
pursuant to this Plan has not been registered under the Securities Act, a legend
shall be placed on any certificates representing such Stock stating that such
shares have not been so registered and that the resale thereof is restricted.
Section 8.04. NO CONTRACT OF EMPLOYMENT INTENDED. Nothing in this Plan or
in any Option granted pursuant to this Plan shall confer upon any Employee
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any right to continue in the employ or other service of the Company or an
Affiliate or interfere in any way with the right of the Company or such
Affiliate to terminate such Employee's employment or service at any time.
Section 8.05. WITHHOLDING. The Company shall be authorized to withhold any
withholding taxes due in respect of an Option, its exercise, or any payment or
transfer under such Option or under this Plan and to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
the payment of such taxes.
Section 8.06. NON-EXCLUSIVITY. Nothing contained in this Plan or in an
Option shall prevent the Company from adopting or continuing in effect other or
additional compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
Section 8.07. SEVERABILITY. If any provision of this Plan or any Option is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or as to any person or Option, or would disqualify this Plan or
any Option under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of this Plan or the Option, such
provision shall be stricken as to such jurisdiction, person or Option, and the
remainder of this Plan and any such Option shall remain in full force and
effect.
Section 8.08. NO TRUST; UNSECURED STATUS. Neither this Plan nor any Option
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and an Optionee or any other person.
To the extent that any person acquires a right to receive payments from the
Company pursuant to an Option, such right shall be no greater than the right of
any unsecured general creditor of the Company.
Section 8.09. NO FRACTIONAL SHARES. No fractional shares shall be issued or
delivered pursuant to this Plan or any Option, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred in
lieu of any fractional shares, or whether such fractional shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
Section 8.10. HEADINGS NOT CONTROLLING. The titles to articles and the
headings of sections in this Plan are placed herein for convenience of reference
only and, in the case of any conflict, the text of this Plan rather than such
titles or headings shall control.
Section 8.11. EFFECTIVE DATE. This Plan shall be effective as of January 1,
2001, provided, however, no stock option grants are granted to executive
officers until approved by stockholders.
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