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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
THE AES CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
Common Stock, par value $0.01 per share
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
Not Applicable
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(4) Proposed maximum aggregate value of transaction:
Not Applicable
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(5) Total fee paid:
None
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, APRIL 18, 2000
March 23, 2000
The Annual Meeting of Stockholders of The AES Corporation (the "Company")
will be held on Tuesday, April 18, 2000, at 9:30 a.m. in the Company's corporate
offices at 1001 North 19th Street, Arlington, Virginia. Doors to the meeting
will open at 8:30 a.m.
The meeting will be conducted:
- To elect a board of nine directors;
- To consider and vote on a proposal to ratify the appointment of
Deloitte & Touche LLP as independent auditors of the Company for the year
2000 (approved by the Board of Directors and set forth in the following
Proxy Statement);
- To consider and vote on a proposal to amend and restate the Company's
Amended and Restated Certificate of Incorporation to increase the number
of shares of Common Stock that the Company is authorized to issue from
500,000,000 to 1,200,000,000; and
- To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 2, 2000 will be
entitled to notice of and to vote at this meeting.
William R. Luraschi
Vice President and Secretary
EACH STOCKHOLDER IS REQUESTED TO EXECUTE AND PROMPTLY RETURN THE ENCLOSED
PROXY. A PREPAID ENVELOPE IS ENCLOSED FOR RETURNING PROXIES. (SEE DIRECTIONS ON
PROXY CARD).
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PROXY STATEMENT
March 23, 2000
The accompanying proxy is solicited by the Board of Directors of The AES
Corporation (the "Company" or "AES") for use at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, April 18, 2000 at 9:30 a.m.
at the Company's corporate offices at 1001 North 19th Street, Arlington,
Virginia 22209, or at any adjournment of such meeting. This Proxy Statement and
accompanying proxy are first being sent or given to stockholders on or about
March 23, 2000.
If the proxy is properly executed and returned by mail, the shares it represents
will be voted at the meeting in accordance with the instructions noted thereon.
If no instructions are specified, the shares will be voted for the election of
the directors and in accordance with the Board of Directors' recommendations as
set forth herein. Any stockholder executing a proxy has the power to revoke it
at any time before it is voted by filing with the Company a written notice of
revocation, by delivering a duly executed proxy bearing a later date, or by
attending the Annual Meeting of Stockholders and voting in person. Proxies
marked as abstentions, or to withhold a vote from a nominee as a director in the
case of the election of directors, will have the effect of a negative vote.
Broker non-votes (where a nominee holding shares for a beneficial owner has not
received voting instructions from the beneficial owner with respect to a
particular matter and such nominee does not possess or choose to exercise his
discretionary authority with respect thereto) will be considered as present at
the meeting but not entitled to vote with respect to the particular matter and
will therefore have no effect.
The only securities of the Company entitled to be voted are shares of Common
Stock, and only holders of record of Common Stock at the close of business on
March 2, 2000 are entitled to notice of and to vote at the meeting. Holders of
Common Stock are entitled to one vote per share. There were 207,234,949 shares
of Common Stock outstanding at the close of business on March 2, 2000. The
Company's Annual Report for the fiscal year ended December 31, 1999 is being
delivered concurrently with this Proxy Statement.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is comprised of nine members, seven of whom are not
officers of, or otherwise employed by, the Company. In 1999, the Board of
Directors met 13 times, including 9 telephonic meetings. Directors are to be
elected to hold office until the next Annual Meeting of Stockholders and until
their respective successors have been elected and qualified. Directors shall be
elected by a majority of the votes of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting of Stockholders, at which a
quorum is present.
ROGER W. SANT co-founded AES with Dennis Bakke in 1981. He has been Chairman of
the Board and a director of AES since its inception and he held the office of
President through 1986 and Chief Executive Officer through December 31, 1993. He
currently is Chairman of the Boards of Directors of The Summit Foundation and
World Wildlife Fund U.S., a Trustee of the World Wide Fund for Nature, and
serves on the Board of Directors of Marriott International, Inc., and the
National Symphony Orchestra. He was Assistant Administrator for Energy
Conservation and the Environment of the Federal Energy Administration ("FEA")
from 1974 to 1976 and the Director of
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the Energy Productivity Center, an energy research organization affiliated with
The Mellon Institute at Carnegie-Mellon University, from 1977 to 1981.
DENNIS W. BAKKE co-founded AES with Roger Sant in 1981 and has been a director
of AES since 1986. He has been President of AES since 1987 and Chief Executive
Officer since January 1, 1994. From 1987 to 1993, he served as Chief Operating
Officer of AES; from 1982 to 1986, he served as Executive Vice President of AES;
and from 1985 to 1986, he also served as Treasurer of AES. He served with
Mr. Sant as Deputy Assistant Administrator of the FEA from 1974 to 1976 and as
Deputy Director of the Energy Productivity Center from 1978 to 1981. He is a
trustee of the Rivendell School and a member of the Board of Directors of
MacroSonix Corporation.
ALICE F. EMERSON has been a director of AES since 1993. She is a Senior Advisor
at The Andrew W. Mellon Foundation, was President of Wheaton College in
Massachusetts from 1975 to 1991, and prior to that served as Dean of Students at
the University of Pennsylvania. She is a member of the Boards of Directors of
the World Resources Institute, the FleetBoston Financial Corporation, Champion
International Corporation, Eastman Kodak Company, Salzburg Seminar, and the MGH
Institute of Health Professions.
ROBERT F. HEMPHILL, JR. has been a director of AES since June 1996. He served as
Executive Vice President of AES from 1982 to June 1996. He currently is the
Managing Director of Toucan Capital Corporation (an international venture
capital firm). He also serves on the Boards of the National Museum of American
History, and the Pacific International Center for High Technology Research, and
is a member of the Advisory Board of Venture House, an internet investment
company.
FRANK JUNGERS was an advisor to the Board of AES from 1982 to 1983 and has been
a director of AES since 1983. He has been consultant to various companies since
prior to 1994. Mr. Jungers is the retired Chairman of the Board and Chief
Executive Officer of the Arabian American Oil Company. He currently serves on
the Boards of Directors of Thermo Electron Corporation, Thermo Ecotek
Corporation, Esco Corporation, Donaldson, Lufkin & Jenrette, Inc., and Statia
Terminals. He is also Chairman of the Advisory Board of Common Sense Partners,
L.P. He is also Trustee of the Board of Trustees, The American University in
Cairo and serves as a Trustee to the High Desert Museum, and Oregon Health
Sciences University Foundation.
JOHN H. MCARTHUR has been a director of AES since January 1997. He is the
retired Dean of the Harvard Business School, and has been a private business
consultant and active investor in various companies since prior to 1994. He
serves as Senior Advisor to the President of the World Bank Group. He is also a
member of the Boards of Directors of BCE Inc., Cabot Corporation, the
Columbia/HCA Healthcare Corporation, Glaxo Wellcome plc, Rohm & Haas
Corporation, Springs Industries, Inc., and KOC Holdings, A.S. Istanbul. He also
serves in various capacities with non-profit health, government, and education
organizations in America, Canada, Europe, and Asia.
HAZEL R. O'LEARY has been a director of AES since April 1997. Mrs. O'Leary
previously served on AES's Board of Directors from September 1988 to June 1989.
Mrs. O'Leary was the seventh Secretary of the United States Department of Energy
from 1993 to 1997. She is consultant and attorney to a diverse group of domestic
and international energy and sustainable development firms. Prior to serving as
U.S. Secretary of Energy, she served
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as president of the natural gas subsidiary of Northern States Power Company, and
before that as Executive Vice President of Northern States Power Company. She
also serves on the Board of the Kaiser Group International and UAL, Corporation,
the parent company of United Airlines. In addition, Mrs. O'Leary serves on the
non-profit Boards of Morehouse College, the Andrew Young Center of International
Development, the World Wildlife Fund, and the Keystone Center.
THOMAS I. UNTERBERG has been a director of AES since 1984 and from 1982 to 1983.
He has been a Managing Director of C.E. Unterberg, Towbin (an investment banking
firm) since 1989, having been a Managing Director of Shearson Lehman
Brothers Inc., from 1987 through 1988. He currently serves on the Boards of
Directors of Electronics for Imaging, Inc., Systems and Computer Technology
Corporation, ECCS, Inc., Centrax Corporation, Inc., and Club One, LLC.
During 1999, Unterberg Harris, an affiliate of C.E. Unterberg, Towbin, the
investment banking firm in which Mr. Unterberg is a Managing Director, acted as
a co-managing underwriter for a financial offering of the Company which included
the October 7, 1999 offering of 14 million shares of Common Stock, par value
$0.01 per share.
ROBERT H. WATERMAN, JR. was an advisor to the Board of AES from 1983 to 1985 and
has been a director of AES since 1985. He is the founder and has been the Chief
Executive Officer of The Waterman Group, Inc. (a business consulting firm) since
1985. His business includes research and writing, consulting and venture
management. He is a co-author of IN SEARCH OF EXCELLENCE, and the author of THE
RENEWAL FACTOR, ADHOCRACY--THE POWER TO CHANGE and WHAT AMERICA DOES RIGHT, each
of which is a book on business management. He currently is Chairman of the Board
of University ProNet, Inc., and serves on the boards of several non-profit
organizations including the World Wildlife Fund and the Restless Legs Syndrome
Foundation.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS, AND EXECUTIVE OFFICERS
The following table sets forth, as of February 4, 2000, the beneficial ownership
of the Company's Common Stock by (a) each director and named executive officer,
(b) all directors and executive officers as a group and (c) all persons who own
more than five percent (5%) of the Company's Common Stock. Unless otherwise
indicated, each of the persons and group listed below has sole voting and
dispositive power with respect to the shares shown.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
POSITION HELD BENEFICIALLY % OF
NAME AGE WITH THE COMPANY OWNED(1)(2) CLASS(1)(2)
---- --- ---------------- -------------- -----------
<S> <C> <C> <C> <C>
SHARES BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
Roger W. Sant.................... 68 Chairman of the Board and Director 20,763,347(3) 9.94
Dennis W. Bakke #................ President, Chief Executive Officer
54 and 17,275,149(4) 8.31
Director
Alice F. Emerson +@.............. 68 Director 47,746 *
Robert F. Hemphill, Jr. %+....... 56 Director 1,668,620(5) *
Frank Jungers +@................. 73 Director 1,076,732(6) *
John H. McArthur %+.............. 66 Director 15,937 *
Hazel R. O'Leary +%.............. 62 Director 16,077 *
Thomas I. Unterberg %+........... 69 Director 1,268,181(7) *
Robert H. Waterman, Jr. +@#...... 63 Director 635,437(8) *
Barry J. Sharp................... 40 Senior Vice President and CFO 405,669(9)
John R. Ruggirello............... 49 Executive Vice President 231,607 *
Kenneth R. Woodcock.............. 56 Senior Vice President 4,046,879(10) *
Thomas A. Tribone................ 47 Executive Vice President 512,526
All directors and executive
officers as a group (28 persons) 51,319,847 24.66
SHARES BENEFICIALLY OWNED BY
OTHERS:
FMR Corporation.................. Address: 82 Devonshire Street 15,300,318(11) 7.39
Boston, MA 02109
</TABLE>
- ------------------
% Member of the Financial Audit Committee.
+ Member of the Environmental, Safety and Social Responsibility Committee.
@ Member of the Compensation Committee.
# Member of the Nominating Committee.
* Shares held represent less than 1% of the total number of outstanding shares
of Common Stock of the Company.
(1) Shares beneficially owned and deemed to be outstanding include Common Stock
of the Company issued or issuable, on or before April 4, 2000, (a) upon
exercise of outstanding options, (b) upon exercise of warrants, (c) under
the Deferred Compensation Plan for Executive Officers, (d) under the
Deferred Compensation Plan for Directors, (e) under The AES Corporation
Profit Sharing and Stock Ownership Plan and the Employee Stock Ownership
Plan, and (f) under the Supplemental Retirement Plan.
(2) Includes (a) the following shares issuable upon exercise of options:
Mr. Sant - 876,276 shares; Mr. Bakke - 836,937 shares; Mr. Sharp - 260,829
shares; Mr. Ruggirello - 164,146 shares; Mr. Woodcock - 228,946 shares;
Mr. Tribone - 228,946 shares;
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Dr. Emerson - 31,698 shares; Mr. Hemphill - 13,472 shares; Mr. Jungers -
25,832 shares; Dr. McArthur - 13,472 shares; Ms. O'Leary - 13,472 shares;
Mr. Unterberg - 25,832 shares; Mr. Waterman - 25,832 shares; all directors
and executive officers as a group - 4,380,677 shares; (b) the following
units issuable under the Deferred Compensation Plan for Executive Officers:
Mr. Sant - 29,643 shares; all executive officers as a group - 29,643 shares;
(c) the following units issuable under the Deferred Compensation Plan for
Directors: Dr. Emerson - 7,186; Mr. Jungers - 81,450; Dr. McArthur - 2,465;
Ms. O'Leary - 2,255; Mr. Unterberg - 118,285; Mr. Waterman - 117,695; all
directors as a group 329,336; (d) the following shares held in The AES
Corporation Profit Sharing and Stock Ownership Plan and the Employee Stock
Ownership Plan: Mr. Sant - 292,924 shares; Mr. Bakke - 280,647 shares;
Mr. Hemphill - 198,712 shares; Mr. Sharp - 46,138 shares; Mr. Ruggirello -
32,324 shares; Mr. Woodcock - 164,338 shares; Mr. Tribone - 57,222 shares;
all directors and executive officers as a group - 1,484,634 shares; and
(e) the following units issuable under the Supplemental Retirement Plan:
Mr. Sant - 4,342; Mr. Bakke - 6,456; Mr. Hemphill - 1,298; Mr. Sharp -
1,360; Mr. Ruggirello - 726; Mr. Woodcock - 2,267; Mr. Tribone - 1,642; all
directors and executive officers as a group - 29,430 units.
(3) Includes 14,768,180 shares held jointly by Mr. Sant and his wife. Also
includes 122,382 shares held by his wife, 199,870 held in an IRA for the
benefit of Mr. Sant, 578,928 shares in a trust for Mr. Sant, and 129,742
shares held in an IRA for the benefit of his wife. In addition, includes
2,146,523 shares held by The Summit Foundation, of which Mr. Sant disclaims
beneficial ownership. Also includes term convertible securities, Series A
and Series B, convertible into an aggregate of 977,000 shares of common
stock held in trust for Mr. and Mrs. Sant. Mr. and Mrs. Sant can be reached
c/o The AES Corporation, 1001 N. 19th Street, Arlington, Virginia 22209.
(4) Includes 8,477,481 shares held jointly by Mr. Bakke and his wife, 63,707
shares held by his children, and 877,389 shares held by his wife, and 98,366
shares held by the Mustard Seed Foundation, of which Mr. Bakke disclaims
beneficial ownership. Mr. and Mrs. Bakke can be reached c/o The AES
Corporation, 1001 N. 19th Street, Arlington, Virginia 22209.
(5) Includes 10,652 shares held in an IRA for the benefit of Mr. Hemphill.
(6) Includes 52,781 shares held by Mr. Jungers's wife and 563,485 shares held by
FJF, Inc.
(7) Includes 9,652 shares held by Mr. Unterberg's wife, of which Mr. Unterberg
disclaims beneficial ownership.
(8) Includes 4,740 and 92 shares, held in IRAs for Mr. Waterman and his wife,
respectively, and 487,071 shares held in a family trust.
(9) Includes 86,682 shares held jointly with his wife.
(10) Includes 2,835,726 shares held jointly with his wife, and 238,402 shares
held in trust for his children, and 577,200 shares held in a family trust.
(11) Of this aggregate number, FMR Corporation reported on SEC For SC-13G filed
with the Securities Exchange Commission dated February 11, 2000, that it had
(a) sole voting power in 2,427,001 shares, (b) shared voting power on no
shares, (c) sole dispositive power on 15,300,318 shares and (d) shared
dispositive power on no shares.
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COMPENSATION OF DIRECTORS
Directors who are also officers of AES are not paid any fees or additional
compensation for service as members of AES's Board of Directors or any committee
thereof. Each director who is not employed by AES received $30,000 as annual
cash compensation for service on the Board of Directors for 1999, and $1,000 for
each board meeting attended in person and $500 for each meeting in which he or
she participated by telephone conference. For 2000, the Director's annual cash
compensation is $30,000. The directors may elect to defer this compensation
pursuant to the Deferred Compensation Plan for Directors in the form of stock
units. All directors are reimbursed for travel and other related expenses
incurred in attending Board and committee meetings. Directors who are not
employed by AES are not eligible to participate in AES's employee benefit plans
but participate in The AES Corporation Stock Option Plan for Outside Directors
which was adopted in 1992. Under the terms of the plan, the Company issues
options to purchase shares of the Company's Common Stock at a price equal to
100% of the fair market value on the date the option is granted. Directors
eligible to participate in the plan receive options annually to purchase common
stock valued at 83.3% of the annual fees payable to directors, as determined by
the Black-Scholes formula on a basis consistent with the Company's stock option
program. Beginning in 2000, the directors will receive annually options valued
at $40,000, instead of the percentage listed above. These options become
eligible for exercise in installments of 50% at the end of each of the first two
years.
COMMITTEES OF THE BOARD
The Board has four standing committees: the Financial Audit Committee, the
Environmental, Safety and Social Responsibility Committee, the Nominating
Committee, and the Compensation Committee.
The Financial Audit Committee recommends which firm will be appointed by the
Board of Directors as independent auditor to examine AES's financial statements
and to perform services related to the audit. The Financial Audit Committee
reviews the scope and results of the audit with the independent auditors,
reviews with the Company and the independent auditors AES's interim and year-end
operating results, considers the adequacy of the internal accounting and control
procedures of AES, reviews any non-audit services to be performed by the
independent auditors and considers the effect of such performance on the
auditors' independence. The Financial Audit Committee met three times in 1999.
The Environmental, Safety and Social Responsibility Committee monitors the
environmental and safety compliance, respectively, of the Company and its
subsidiaries and reviews and approves the scope of the Company's internal
environmental and safety compliance audit programs to consider the adequacy and
appropriateness of the programs being planned and performed, as well as
periodically reviews the Company's commitment to, and implementation of, its
principle to act in a socially responsible way. The Environmental, Safety and
Social Responsibility Committee met twice in 1999.
The Nominating Committee provides recommendations for potential nomination for
election of new members of the Board of Directors. The Nominating Committee
considers potential nominations provided by stockholders and submits suggested
nominations, when appropriate, to the Board of Directors for approval. The
Nominating Committee did not meet in 1999. Stockholders
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wishing to recommend persons for consideration by the Nominating Committee as
nominees for election to the Company's Board of Directors can do so by writing
to the Secretary of the Company at 1001 North 19th Street, Arlington, Virginia
22209, giving each such person's name, biographical data and qualifications. Any
such recommendation should be accompanied by a written statement from the person
recommended of his or her consent to be named as a nominee and, if nominated and
elected, to serve as a director. The Company's By-Laws also contain a procedure
for stockholder nomination of directors. (See "Submission of Stockholder
Proposals and Nominations" below.)
The Compensation Committee establishes rates of salary, bonuses, profit sharing
contributions, grants of stock options, retirement and other compensation for
all directors and officers of AES and for such other people as the Board may
designate. All of the members of this committee are "disinterested persons"
under the provisions of Rule 16b-3 adopted under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Compensation Committee's primary
responsibility is to formulate and maintain the compensation program of the
Company in order to develop, retain (and attract, when necessary) people
important to the Company's performance. This committee specifically acts to
evaluate the performance and set the total compensation for the executive
officers of the Company, including the CEO, in accordance with the guidelines
discussed below. This committee has delegated to the CEO the power to set
compensation for the non-executive officers. The Compensation Committee met once
in 1999.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee's (the "Committee") guidelines for compensation of
executive officers are designed to provide fair and competitive levels of total
compensation while integrating pay with performance. Executive officers,
including the CEO, are evaluated annually on the basis of both individual
responsibilities and contributions, as well as Company-wide results in two
related areas: (i) corporate culture (or principles) and (ii) business or
functional area performance.
There are three elements in the Company's executive officer compensation, which
is consistent with how most people who work for the Company are compensated.
These elements are base salary, annual incentive compensation, and stock option
program. Beginning in 1999, Mr. Bakke's compensation was granted exclusively in
stock options. See below for a more complete description. Certain executive
officers may be compensated similarly in the future.
Base salary is adjusted annually by the Committee to account for general
economic and cost of living changes. Adjustments are also made periodically to
recognize significant new or additional responsibilities of individual executive
officers. The Committee's guidelines are to provide base salary compensation
generally consistent with its interpretation of industry averages for
individuals with similar responsibility levels.
Annual incentive compensation is based upon both objective and subjective
measures in the areas of corporate culture and business or functional area
performance, and generally takes the form of bonuses payable after year-end.
With respect to corporate culture, the Company's shared principles of fairness,
integrity, fun and social responsibility are integral to its operations
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and serve as its founding principles. These principles apply equally to the
internal activities of the Company as well as its external relationships. Each
executive officer's individual contribution to demonstrating and nurturing these
shared values is reviewed and considered as a factor in determining annual
incentive compensation. Evaluations by the Committee in this area are inherently
subjective.
The second area considered in the determination of annual incentive compensation
is the individual executive officer's performance with respect to his or her
related business responsibilities and/or functional area. Although all aspects
of an individual's responsibilities are considered in determining annual
incentive compensation, several quantitative measures of annual performance are
considered significant, including operating margin improvements, operating
reliability, earnings per share contributions, environmental performance, and
plant and Company-wide safety. The qualitative factors considered significant
include business and project development progress, effective strategic planning
and implementation, Company-wide support, understanding of and adherence to the
Company's values, and community relations and people development.
Important strategic successes or failures can take several years to translate
into objectively measurable results. The Committee does not compute annual
incentive compensation using a mathematical formula of pre-determined
performance goals and objective criteria. As a result, the Committee's ultimate
determination of the amount, if any, of annual incentive compensation is made at
the end of each year based on a subjective evaluation of several quantitative
and qualitative factors, with primary emphasis given this year to those factors
listed in the preceding paragraph. There are no targeted, minimum or maximum
levels of annual incentive compensation, and such compensation does not
necessarily bear any consistent relationship to salary amounts or total
compensation.
The Company's stock option program is used to reward people for the corporate
responsibilities they undertake, their performance of those duties and to help
them to think and act like owners. All executive officers and approximately 51%
of the total people in the Company located in the United States (approximately
3% of AES people worldwide) participate in this program. Historically, because
of differing legal environments in many countries, options had been primarily
granted to U.S. people. However, the Company has taken steps to incorporate
those people who reside outside of the United States into this program by
qualifying its stock option plan in each country where AES people currently
reside or work, and the Company expects the total participation to increase in
the future. Stock options are usually granted annually at the fair market value
on the date of grant and provide vesting periods to reward people for continued
service to the Company. The Committee's determination of the number of options
to be granted to executive officers is based upon the same factors as such
officer's annual incentive compensation discussed above with additional
consideration given to the number of options previously granted.
Since 1994, the Company has participated in an annual survey conducted by an
outside consulting firm which encompasses over 400 public companies. Based in
part on the survey results, the Committee established guidelines for suggested
ranges of option grants to executive officers as well as the rest of the people
in the Company. Based on the survey, the Committee established guideline ranges
for eligible participants between the 50th and 90th percentile of similar
companies. As with annual incentive compensation, the determination of an
individual's grant is subjective and although
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the Committee has established suggested guidelines, the grants are not formula
based.
Total compensation is reviewed to determine whether amounts are competitive with
other companies whose operations are similar in type, size and complexity with
those of the Company, as well as a broad range of similarly sized companies.
Comparisons are made with published amounts, where available, and, from time to
time, the Company also participates in various industry-sponsored compensation
surveys in addition to the public-company survey described above. The Committee
also has, in the past, engaged an independent compensation consultant to
specifically review the level and appropriateness of executive officer
compensation. Other than as described above, the Company uses the results of
surveys, when available, for informational purposes only and does not target
individual elements of or total compensation to any specific range of survey
results (i.e., high, low or median) other than the Committee's suggested
guidelines for stock option grants as discussed in the previous paragraph.
Because each individual's compensation is determined, in part, by experience and
performance, actual compensation generally varies from industry averages.
Executive officers also participate in the Company's profit sharing plan (or
deferred compensation plan for executive officers) on the same terms as all
other people in the Company, subject to any legal limitations on amounts that
may be contributed or benefits that may be payable under the plan. Matching
contributions and annual profit sharing contributions are made with the common
stock of the Company to further encourage long-term performance. In addition,
certain individuals of the Company participate in the Company's supplemental
retirement plan, which provides supplemental retirement benefits to "highly
compensated employees" (as defined in the Internal Revenue Code) of any amount
which would be contributed on such individual's behalf under the profit sharing
plan (or the deferred compensation plan for executive officers) but is not so
contributed because of the limitations contained in the Internal Revenue Code.
In most cases, the Committee has taken steps to qualify income paid to any
officer as a deductible business expense pursuant to regulations issued by the
Internal Revenue Service pursuant to Section 162(m) of the Internal Revenue Code
with respect to qualifying compensation paid to executive officers in excess of
$1 million. Compensation earned pursuant to the exercise of options granted
under the Company's former stock option plan (which was discontinued in 1991) is
not considered for purposes of the $1 million aggregate limit, and exercises
under the 1991 Plan are similarly excluded. The Committee will continue to
consider the implications to the Company of qualifying all compensation as a
deductible expense under Section 162 (m), but retains the discretion to pay
bonuses commensurate with an executive officer's contributions to the success of
the Company, irrespective of whether such amounts are entirely deductible.
MR. BAKKE'S 1999 COMPENSATION
Mr. Bakke's compensation for 1999 was reviewed and approved by the Committee
utilizing the guidelines discussed above. Specifically, the following primarily
positive factors considered were:
- - Strong adherence, understanding, and awareness by the people in the Company to
its shared principles of integrity, fairness, social responsibility and fun,
as indicated by the Company's internal values survey, with particular emphasis
made on excellent progress made at the Company's foreign subsidiaries.
9
<PAGE>
- - Significant development of new project and business opportunities, including:
- The acquisition of the 3,960MW Drax generating station located in the
United Kingdom
- The acquisition of Tiete, a generating company in Brazil
- The acquisition of 51% of the Central Electricity Supply Company of Orissa
- The acquisition of a controlling interest in Electronet, a Brazilian
telecom venture
- The acquisition of 50% of Ede Este, a distribution company in the
Dominican Republic
- The acquisition of New Energy Venture, a retail trading company
- The acquisition of two generating stations totaling 966 MW in Australia
- Numerous project financing and refinancings totaling over $10.3 billion
- - Successful corporate issuance of approximately $1.3 billion of common equity,
$518 million convertible trust preferreds, $750 million aggregate principal
amount of senior notes, $250 million of trust preferred securities, and
$750 million of short-term bank facilities.
- - An increase in the price of the Company's common stock of 58%.
- - An exceptional year in plant reliability and availability.
- - Continued excellent environmental performance below permitted levels (on
average).
- - An increase in total net megawatts in operation, construction or under
advanced development from approximately 27,000 to 43,000.
The following primarily negative factors considered were:
- - While the Company's overall safety record continued to improve in 1999,
several very serious injuries occurred, including nineteen (eight amongst the
Company's contractors) that resulted in loss of life.
- - Net income and diluted earnings per share decreased 27% and 31% respectively.
Net income and diluted earnings per share increased 9% and 2%, respectively,
before taking into account foreign currency transactions and extraordinary
items.
The Committee decided that, beginning in 1999, Mr. Bakke would no longer receive
cash as part of his overall compensation. Mr. Bakke was compensated solely by
the grant of stock options (in lieu of a cash salary and cash bonus). The
Committee believes that this method of compensation will align Mr. Bakke's
compensation more closely with the financial interests of the Company's other
shareholders.
Mr. Bakke's total 1999 cash compensation decreased from $500,000 in 1998 to $0
in 1999. Mr. Bakke's total 1999 compensation (including the cash value
associated with option grants derived from the Black-Scholes formula) increased
31% over his 1998 compensation.
Frank Jungers, Chairman
Alice F. Emerson
Robert H. Waterman, Jr.
10
<PAGE>
- --------------------------------------------------------------------------------
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the five most highly
compensated executive officers for the three years ended December 31, 1999,
adjusted through February 4, 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------- --------------------------------------
SECURITIES
SALARY OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) COMPENSATION ($) OPTIONS (#) (1) COMPENSATION ($) (2)
- --------------------------- -------- -------- --------- ---------------- --------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
DENNIS W. BAKKE 1999 -0- -0- 18,161 98,948 -0-
Chief Executive 1998 500,000 -0- 11,924 160,000 56,000
Officer and President 1997 450,000 1,300,000 9,699 55,209 61,250
BARRY J. SHARP 1999 240,000 350,000 324 18,948 30,800
Senior Vice President, 1998 225,000 500,000 264 16,667 28,500
Chief Financial Officer 1997 200,000 650,000 3,553 13,542 32,500
JOHN R. RUGGIRELLO 1999 220,000 325,000 2,750 13,895 28,900
Executive Vice President 1998 190,000 450,000 1,770 15,556 25,000
1997 165,000 300,000 1,502 12,500 21,309
KENNETH R. WOODCOCK 1999 225,000 300,000 13,507 12,632 29,375
Senior Vice President 1998 220,000 300,000 6,620 13,333 30,000
1997 215,000 220,000 25,257 12,500 34,225
THOMAS A. TRIBONE 1999 250,000 250,000 528 9,895 31,750
Executive Vice President 1998 235,000 425,000 696 20,000 29,500
1997 200,000 800,000 2,920 16,667 32,500
</TABLE>
- ------------------------------
(1) The number of options shown as compensation as of December 31, 1999 were for
services rendered for 1999. Those stock options were awarded by the
Compensation Committee of the Board in February 2000.
(2) This column constitutes Company contributions to The AES Corporation Profit
Sharing and Stock Ownership Plan and the Employee Stock Ownership Plan of
the Company, and allocations to the Company's Supplemental Retirement Plan.
Specifically for 1999, (a) amounts contributed to The AES Profit Sharing and
Stock Ownership Plan and Employee Stock Ownership Plan: Mr. Bakke - $0;
Mr. Sharp - $18,000; Mr. Ruggirello - $18,000; Mr. Woodcock - $18,000;
Mr. Tribone - $18,000 and (b) amounts allocated to the Supplemental
Retirement Plan: Mr. Bakke - $0; Mr. Sharp - $12,800; Mr. Ruggirello -
$10,900; Mr. Woodcock - $11,375; Mr. Tribone - $13,750.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options granted for 1999 to the
named executive officers.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED
UNDERLYING TO ALL EXERCISE
OPTIONS AES PEOPLE OR BASE GRANT DATE
GRANTED FOR FISCAL PRICE EXPIRATION PRESENT VALUE
NAME (#)(1) YEAR ($/SH) DATE ($) (2)
- ---- ---------- ---------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
DENNIS W. BAKKE 98,948 3.96% 72.63 2/04/10 4,700,030
Chief Executive
Officer and President
BARRY J. SHARP 18,948 0.76% 72.63 2/04/10 900,030
Senior Vice President,
Chief Financial Officer
JOHN R. RUGGIRELLO 13,895 0.56% 72.63 2/04/10 660,013
Executive Vice
President
KENNETH R. WOODCOCK 12,632 0.51% 72.63 2/04/10 600,020
Senior Vice President
THOMAS A. TRIBONE 9,895 0.40% 72.63 2/04/10 470,013
Executive Vice
President
</TABLE>
- ------------------
(1) All options are for shares of Common Stock of the Company. Options granted
for services performed in 1999 were granted at the fair market value on the
date of grant, and vest at the rate of 50% per year through December 2001.
(2) The Black-Scholes stock option pricing model was used to value the stock
options on the grant date (February 4, 2000). The Company's assumptions
under this model include an expected volatility of 46.76%, a 6.63% risk free
rate of return, no dividends, and a vesting adjustment of 4.5%. The options
have 10 year terms and vest at 50% per year. No adjustments were made for
non-transferability or risk of forfeiture.
The use of such amounts and assumptions is not intended to forecast any
possible future appreciation of the Company's stock price or dividend
policy.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUE
The following table provides information on option exercises in 1999 by the
named executive officers and the value of such officers' unexercised options at
December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF DOLLAR OPTIONS AT OPTIONS AT
SHARES VALUE FY-END FY-END
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (1) UNEXERCISABLE UNEXERCISABLE (2)
- ---- ----------- --------- ------------- -----------------
<S> <C> <C> <C> <C>
DENNIS W. BAKKE 55,000 1,963,638 733,154/ 45,586,838/
Chief Executive Officer and President 183,783 8,031,841
BARRY J. SHARP 9,424 435,483 255,892/ 16,576,385/
Senior Vice President, 23,931 1,148,990
Chief Financial Officer
JOHN R. RUGGIRELLO 9,270 539,972 156,368/ 9,641,878/
Executive Vice President 15,556 630,018
KENNETH R. WOODCOCK 40,000 1,860,600 216,313/ 13,996,404/
Senior Vice President 19,300 929,333
THOMAS A. TRIBONE 52,578 3,199,897 251,645/ 16,104,865/
Executive Vice President 26,918 1,261,340
</TABLE>
- ------------------
(1) The amounts in this column have been calculated based upon the difference
between the fair market value of the securities underlying each stock option
on the date of exercise and its exercise price.
(2) The amounts in this column have been calculated based on the difference
between the fair market value on December 31, 1999 of $74.75 per share for
each security underlying such stock option and the per share exercise price.
13
<PAGE>
<TABLE>
<CAPTION>
THE AES CORPORATION S&P 500 PEER GROUP*
<S> <C> <C> <C>
Dollars
1994............................................ 100.00 100.00 100.00
1995............................................ 122.44 137.58 116.65
1996............................................ 238.46 169.17 165.76
1997............................................ 478.21 225.60 213.69
1998............................................ 485.90 290.08 224.93
1999............................................ 776.67 351.12 174.10
</TABLE>
PEER GROUP INDEX*
The 1999 Peer Group consists of the following publicly traded companies in the
global power generation industry: Edison International, CMS Energy Corporation,
Mid-American Energy Company, Inc., and National Power, PLC.
The 1999 Peer Group Index reflects the weighted average total return for the
entire Peer Group calculated for the period in which the Company's equity
securities were registered with the Securities and Exchange Commission pursuant
to the Exchange Act, from a base of 100. In compliance with Securities and
Exchange Commission regulations, the returns of each company in the 1999 Peer
Group Index have been weighted according to their market capitalization as of
the beginning of the period.
The Report of the Compensation Committee on Executive Compensation and The AES
Corporation Stock Price Performance Graph shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission or
subject to Regulation 14A or 14C under the Exchange Act.
- --------------
* Excludes The AES Corporation
14
<PAGE>
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on the Company's review of reports filed under Section 16(a) of the
Securities Exchange Act of 1934 and certain representations, the Company
believes that in 1999 there were no reports that were not reported on a timely
basis and no known failure to file a required form.
PROPOSAL 2
APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, a firm of
independent public accountants, as auditors to examine and report to
stockholders for the year 2000. Deloitte & Touche LLP has acted as the Company's
independent auditors since 1981. The appointment was made upon the
recommendation of the Financial Audit Committee of the Board of Directors.
Representatives of Deloitte & Touche LLP will be present at the Annual Meeting
and will be given an opportunity to make a statement. They also will be
available to respond to appropriate questions.
The Board of Directors recommends that the stockholders ratify the appointment
of Deloitte & Touche LLP, and intends to introduce at the forthcoming Annual
Meeting the following resolution (designated herein as Proposal 2):
"RESOLVED, that the appointment by the Board of Directors of Deloitte &
Touche LLP as independent auditors for this Company for the year 2000 is
hereby approved, ratified and confirmed."
The affirmative vote of the holders of a majority of shares of Common Stock
entitled to notice of and to vote at the Annual Meeting of Stockholders, at
which a quorum is present, is necessary for the ratification of the appointment
of Deloitte & Touche LLP as independent auditors for the Company for the year
2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF DELOITTE AND TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
PROPOSAL 3
PROPOSED AMENDMENT TO AMEND AND RESTATE CERTIFICATE OF INCORPORATION TO INCREASE
THE AUTHORIZED NUMBER OF SHARES
The Company's Amended and Restated Certificate of Incorporation currently
authorizes 550,000,000 shares of Capital Stock, of which 500,000,000 are Common
Stock and 50,000,000 are Preferred Stock. Of the 500,000,000 shares of Common
Stock authorized as of March 2, 2000, 207,234,949 shares were outstanding,
42,900,000 were reserved for issuance under the Company's benefit plans. Of the
50,000,000 shares of Preferred Stock authorized, as of March 2, 2000, there were
no outstanding shares.
The Board of Directors has determined that it is in the best interest of the
Company's stockholders to increase the number of shares of Common Stock which
the Company is authorized to issue from 500,000,000 to 1,200,000,000 shares.
The Board of Directors believes that the proposed increase in the number of
authorized shares of Common Stock will benefit the Company by improving its
flexibility in responding to future business needs and opportunities. The
additional authorized shares could be used for possible stock splits, future
acquisitions, financings, stock dividends and other corporate purposes.
15
<PAGE>
Within the limits imposed by applicable law and the rules of the New York Stock
Exchange, described below, shares of Common Stock could be issued in one or more
transactions. Depending upon the nature and terms thereof, such a transaction or
transactions could make a takeover of the Company more difficult and therefore
less likely. An issuance of additional shares of Common Stock could have the
effect of diluting the earnings per share and book value per share of existing
shares of Common Stock and diluting the stock ownership of persons seeking to
obtain control of the Company. The Board of Directors, however, has no present
plans, understandings or agreements to issue the additional shares to be
authorized except pursuant to the Company's benefit plans.
The Board of Directors does not currently intend to propose any amendments to
the Company's Amended and Restated Certificate of Incorporation which might be
deemed to have the effect of discouraging takeover attempts, although such
amendments or other programs may be considered by the Board in future if it
believes the interests of the stockholders would be protected thereby.
The New York Stock Exchange, on which the Common Stock is listed, currently
requires stockholder approval as a prerequisite to listing shares in several
instances, including acquisition transactions where the number of shares of
Common Stock to be issued is or will be equal to or in excess of 20% of the
number of shares outstanding before such issuance.
Except for the increase of the number of authorized shares, the proposed
amendment would not change any of the provisions of the Company's Amended and
Restated Certificate of Incorporation. All shares of Common Stock or Preferred
Stock, including the additional shares of Common Stock that would be authorized
if the proposed amendment is adopted, which are not issued and outstanding would
be issueable at any time or from time to time by action of the Board of
Directors without further authorization from stockholders, except to the extent
that such further authorization is required by the rules of the New York Stock
Exchange, the terms of any series of the Company's Preferred Stock, the terms of
any agreements or securities the Company may hereafter enter into or issue or
applicable law.
The additional shares of Common Stock which would be authorized by the proposed
amendment would have the same rights and privileges as and otherwise be
identical to the shares of Common Stock currently authorized and outstanding.
The Amended and Restated Certificate of Incorporation empowers the Board of
Directors to determine the relative rights and limitation of series of Preferred
Stock, including, among other things, dividend rights, conversion prices, voting
rights, redemption prices and the preferences, if any, of such series over
shares of Common Stock as to dividends or distributions of assets of the
Company. It is possible that the future issuance of Preferred Stock having
dividend and liquidation preferences could affect amounts that might otherwise
be available to holder of Common Stock as dividends or upon liquidation. Holders
of the Company's shares have no preemptive rights and, as a result, existing
stockholders would not have any preferential right to purchase any of the
additional shares of Common Stock when issued.
In order to improve the Company's flexibility in responding to future business
needs and opportunities, and in order to allow the Company to declare a stock
split, if the Board so desires, the Company's stockholders are accordingly being
asked to adopt an amendment to the Company's Amended and Restated Certificate of
Incorporation to increase the aggregate number of shares
16
<PAGE>
which the Company is authorized to issue from 550,000,000 shares, of which
500,000,000 shares are Common Stock and 50,000,000 are Preferred Stock, to
1,250,000,000 shares, of which 1,200,000,000 shares shall be Common Stock and
50,000,000 shares shall be Preferred Stock.
The Board of Director's recommends that the stockholders approve the amendment
to the Company's Amended and Restated Certificate of Incorporation, and intends
to introduce at the forthcoming Annual Meeting the following resolution
(designated herein as Proposal 3):
"RESOLVED, that Article IV of the Amended and Restated Certificate of
Incorporation of the Company be amended to read in its entirety as
follows:
"The total number of shares of all classes of stock that the Company
shall have authority to issue is one billion, two hundred fifty million
(1,250,000,000) shares, of which one billion two hundred million
(1,200,000,000) shall be Common Stock, par value $.01 per share, and
fifty million (50,000,000) shares shall be Preferred Stock, without par
value."
The affirmative vote of holders representing a majority of the outstanding
shares of Common Stock is necessary for the adoption of Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL TO AMEND THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
NUMBER OF SHARES.
SUBMISSION OF STOCKHOLDER PROPOSALS AND NOMINATIONS
Any stockholder entitled to vote in the election of directors and who meets the
requirements of the proxy rules under the Exchange Act may submit to the Board
of Directors proposals to be considered for submission to the stockholders at
the Year 2001 Annual Meeting. Any such proposal should be submitted in writing
by notice delivered or mailed by first-class United States mail, postage prepaid
to the Secretary, The AES Corporation, 1001 North 19th Street, Arlington,
Virginia 22209 and must be received no later than February 13, 2001 in
compliance with new regulations promulgated by the Commission. Any such notice
shall set forth: (a) the name and address of the stockholder and the text of the
proposal to be introduced; (b) the number of shares of stock held of record,
owned beneficially and represented by proxy by such stockholder as of the date
of such notice; and (c) a representation that the stockholder intends to appear
in person or by proxy at the meeting to introduce the proposal specified in the
notice. The chairperson of the meeting may refuse to acknowledge the
introduction of any stockholder proposal not made in compliance with the
foregoing procedure.
AES's By-Laws contain a procedure for stockholder nomination of directors. The
By-Laws provide that any record owner of stock entitled to be voted generally in
the election of directors may nominate one or more persons for election as a
director at a stockholders meeting only if written notice is given to the
Secretary of AES of the intent to make such nomination. The notice must be
given, with respect to an annual meeting, not later than 90 days in advance of
such annual meeting and with respect to a special meeting, not later than the
close of business on the seventh day following the earlier of (a) the date on
which notice of such special meeting is first given to stockholders and (b) the
date on which a public announcement of such meeting is first made. Each
17
<PAGE>
notice must include (i) the name and address of each stockholder who intends to
appear in person or by proxy to make the nomination and of the person or persons
to be nominated; (ii) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons (naming
them) pursuant to which the nomination is to be made by the stockholder;
(iii) such other information regarding each nominee proposed by such stockholder
as would have been included in a proxy statement filed pursuant to Rule 14a-8
under the Exchange Act; and (iv) the consent of each nominee to serve if
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with this procedure. The
procedure for stockholder nomination of directors described above may have the
effect of precluding a nomination for election of directors at a particular
meeting if the required procedure is not followed.
SOLICITATION OF PROXIES
Proxies will be solicited by mail, telephone, or other means of
communication. The Company has retained the services of First Chicago Trust
Company, a division of EquiServe, and Corporate Investor Communications, Inc. to
assist in the solicitation of proxies from stockholders for a fee, including its
expenses, estimated at $5,000. In addition, solicitation may be made by
directors, officers, and regular employees of the Company. The Company will
reimburse brokerage firms, custodians, nominees, and fiduciaries in accordance
with the rules of the National Association of Securities Dealers, Inc., for
reasonable expenses incurred by them in forwarding materials to the beneficial
owners of shares. The entire cost of solicitation will be borne by the Company.
FORM 10-K ANNUAL REPORT
ANY STOCKHOLDER WHO DESIRES A COPY OF THE COMPANY'S 1999 ANNUAL REPORT ON
FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY OBTAIN A COPY
(EXCLUDING EXHIBITS) WITHOUT CHARGE BY ADDRESSING A REQUEST TO THE SECRETARY,
THE AES CORPORATION, 1001 NORTH 19TH STREET, ARLINGTON, VIRGINIA 22209. EXHIBITS
ALSO MAY BE REQUESTED, BUT A CHARGE EQUAL TO THE REPRODUCTION COST THEREOF WILL
BE MADE. STOCKHOLDERS MAY ALSO VISIT THE COMPANY'S WEB SITE AT
HTTP://WWW.AESC.COM
By Order of the Board Of Directors,
William R. Luraschi
Vice President and Secretary
18
<PAGE>
PROXY
The AES Corporation
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE AES CORPORATION FOR ANNUAL MEETING ON APRIL 18, 2000.
THE UNDERSIGNED hereby appoints Roger W. Sant or Dennis W. Bakke, or
either of them, and any substitute or substitutes, to be the attorneys and
proxies of the undersigned at the Annual Meeting of Stockholders of The AES
Corporation ("AES") to be held at 9:30 a.m. EST on Tuesday, April 18, 2000 at
1001 N. 19th St., Arlington, VA 22209, or at any adjournment thereof, and to
vote at such meeting the shares of common stock of AES the undersigned held of
record on the books of AES on the record date for the meeting for the election
for the nominees listed below, on Proposals 1, 2 and 3 referred to on the
reverse side and described in the Proxy Statement, and on any other business
before the meeting, with all powers the undersigned would possess if personally
present.
(change of address/comments)
ELECTION OF DIRECTORS, NOMINEES:
Roger W. Sant Dennis W. Bakke _____________________
Alice F. Emerson Hazel R. O'Leary _____________________
Robert F. Hemphill, Jr. Thomas I. Unterberg _____________________
Francis Jungers Robert H. Waterman, Jr. _____________________
John H. McArthur (If you have written
in the above space,
please mark the
corresponding box on
the reverse side of
this card)
INDEPENDENT AUDITORS
Deloitte & Touche LLP
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARE
UNLESS YOU SIGN AND RETURN THIS CARD.
- -------------------------------------------------------------------------------
<PAGE>
[ X] Please mark your votes as in this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, AND 3.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR COMPANY PROPOSALS 1, 2 AND 3.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] 2. Ratification of [ ] [ ] [ ]
Directors (see apppointment of
reverse) independent
auditors
For, except vote withheld from the
following nominees(s):
____________________________ 3. Amend and Restate [ ] [ ] [ ]
Certificate of
Incorporation To
Increase Authorized
Shares
Change of Address/
Comments on Reverse Side [ ]
All as more particularly described in
the Proxy Statement relating to such
meeting, receipt of which is hereby
acknowledged. Please sign exactly as
name appears herein. Joint owners
should each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title as such.
-------------------------------------------------------
-------------------------------------------------------
Signatures (s) Date
</TABLE>
