SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2005
THE AES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 001-12291 54-1163725
(State or other jurisdiction) (Commission file number) (I.R.S. employer
of incorporation) identification no.)
4300 Wilson Boulevard, Suite 1100
Arlington VA. 22203
(Address of principal executive offices) (Zip Code)
(703) 522-1315
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (
17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4c))
Item 1.01 Entry into a Material Definitive Agreement.
This Form 8-K is to describe ordinary course named executive officer
compensation actions taken by the Compensation Committee (the "Committee") of
the Board of Directors of The AES Corporation (the "Board") as ratified and
approved by the Board.
On February 24, 2005, the Committee took the following actions with respect to
the compensation of the Company's named executive officers (as defined in
Regulation S-K item 402(a)(3)) and such actions were approved by the Board and
effective as of February 25, 2005:
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
2005 2005
Restricted Long-Term
Stock Unit 2005 Option Performance
Executive Officer 2005 Salary 2004 Bonus2 Grant3 Grant4 Units Grant5
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
Paul T. Hanrahan $871,000 $1,500,000 73,617 97,977 2,250,000
President and Chief Executive Officer
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
Barry J. Sharp 520,0001 600,000 31,083 41,376 950,000
Executive Vice President and
Chief Financial Officer
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
John R. Ruggirello 480,000 500,000 26,175 34,843 800,000
Executive Vice President and
Chief Operating Officer
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
Joseph C. Brandt 480,000 700,000 29,856 39,743 912,500
Executive Vice President and
Chief Operating Officer
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
William R. Luraschi 430,000 470,000 24,539 32,666 750,000
Executive Vice President and General
Counsel
------------------------------------------------ --------------- ---------------- -------------- ---------------- ----------------
1. No increase for 2005.
2. Annual bonuses to be paid to named executive officers in 2005 for
performance during 2004 were based on 2004 performance in the following
areas: 40 percent on business or corporate cash flow targets, 25% on
performance improvement targets, 25% on achievement of individual
objectives and 10% on safety performance.
3. Pay out will occur if the Total Stockholder Return ("TSR") on AES
common stock exceeds the TSR of the Standard and Poor's 500 ("S&P 500")
over the three-year measurement period beginning on January 1, 2005 and
ending on December 31, 2007. If this criterion were met, the actual
payout of the Restricted Stock Units would occur in 2010. In situations
where the TSR of both AES and the S&P 500 exhibit a gain over the
measurement period, the Compensation Committee has the discretion under
certain circumstances, but is not required, to waive the requirement
that the TSR of AES stock exceed the TSR of the S&P 500.
4. Each stock option has an exercise price of $16.81 representing the
closing price of a share of AES common stock on the NYSE composite tape
on the date of grant. The options will vest in three-equal installments
on each anniversary following the date of grant.
5. On February 25, 2005, the Board approved Long-Term Performance Unit
awards to the named executive officers. Each Long Term Performance Unit
will have an initial value of $1 and will be valued at the end of the
three year performance period beginning on January 1, 2005 and ending
on December 31, 2007 from $0 to $2.00 depending upon the Company's
actual performance over the performance period as measured by "Cash
Value Added" ("CVA"). Any pay out of the Long Term Performance Units
will be paid in cash to the holder. CVA is equal to the sum of
subsidiary operating cash flow minus a charge for incremental capital
used by AES businesses, adjusted for subsidiary ownership percentage.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE AES CORPORATION
Date: March 3, 2005 By: __________________________
Name: Brian A. Miller
Title: Deputy General Counsel