Exhibit 10.76

 

 

SECOND AMENDMENT TO THE

EMPLOYMENT AND SEVERANCE AGREEMENT

OF

JOHN R. MCCALL

 

                This Second Amendment to the Employment and Severance Agreement
of John R. McCall (“Second Amendment”) is made and entered into this 20 day of
May, 2002 by and among (i) LG&E Energy Corp., a Kentucky corporation
(“Company”), (ii) Powergen, plc, a United Kingdom public limited company
(“Parent”), (iii) E.ON AG, an aktiengesellschaft formed under the Federal
Republic of Germany (“German Parent”), and (iv) John R. McCall (“Executive”),
collectively referred to as the “Parties”.

 

                WHEREAS, the Executive, the Company and the Parent entered into
an Employment and Severance Agreement, dated February 25, 2000 (“Agreement”);

 

                WHEREAS, the Agreement was previously amended by the Executive,
the Company and the Parent in a document dated December 8, 2000 (“First
Amendment”);

 

                WHEREAS, the Parent and German Parent have agreed to the terms
of a recommended pre-conditional cash offer, whereby German Parent or its
subsidiary will acquire ownership of the Parent;

 

                WHEREAS, the Parent and the German Parent have determined that
the acquisition of the Parent by the German Parent shall be completed by way of
a scheme of arrangement, whereby the acquisition will become effective in
accordance with the terms of the scheme (“Acquisition Date”); and

 

                WHEREAS, the Parties have determined that it is now desirable to
amend the Agreement to reflect certain changes resulting from the German
Parent’s acquisition of the Parent.

 

AGREEMENT:

 

                NOW THEREFORE, in consideration of the respective agreements of
the parties contained herein, it is agreed as follows:

 

                 1.            A new Section 1.4 shall be added to the end of
Article 1 to read as follows:

 

 

“1.4         If the Executive is (i) employed on the day following the second
anniversary of the Acquisition Date by the Company, the Parent, the German
Parent, or any subsidiary of the Company, the Parent or the German Parent,
hereinafter referred to as the

 

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“Employer”, or (ii) terminated from employment prior to expiration of the
twenty-four (24) month period following the Acquisition Date for any reason
other than a termination by an Employer for Cause or a termination by the
Executive without Good Reason (as hereinafter defined), the Employer shall pay
to the Executive on such an anniversary or within 10 days of such termination
date a lump sum cash payment in an amount equal to (i) the Executive’s Salary
Amount (as hereinafter defined), and (ii) the Executive’s Target Annual
Incentive Amount (as hereinafter defined).  For purposes of this Agreement,
“Salary Amount” shall mean the Executive’s annual base salary from an Employer
in effect at the time of payment, including all amounts of base salary that are
deferred under any qualified or non-qualified employee benefit plan of an
Employer; provided however, if an Employer has reduced the Executive’s annual
base salary, the Salary Amount shall be the annual base salary in effect prior
to the reduction.  For purposes of this Agreement, “Target Annual Incentive
Amount” shall mean the target annual bonus of the Executive under the annual
incentive plan of the Employer at the time of payment; provided however, that if
an Employer has reduced the target annual bonus of the Executive, the Target
Annual Incentive Amount shall be the target annual bonus in effect prior to the
reduction.”

 

2.             Section 2 shall be deleted and replaced in its entirety to read
as follows:

 

“2. TERM OF AGREEMENT.  This Agreement shall commence as of the Effective Time,
and shall continue in effect until the second anniversary of the Effective Time;
provided, however, that commencing on the second anniversary of the Effective
Time, and on each anniversary of the Effective Time thereafter, the term of this
Agreement shall automatically be extended for one (1) year unless the Company or
the Executive shall have given written notice to the other at least ninety days
prior thereto (if such notice is given following the second anniversary of the
Effective Time, otherwise such notice period shall be one hundred and eighty
days) that the term of this Agreement shall not be so extended; and provided,
further, however, that notwithstanding any such notice by the Company not to
extend, the term of this Agreement shall not expire prior to the expiration of
the later of (i) twenty-four (24) months after any Change in Control which
occurs while this Agreement is in effect, or (ii) forty-eight (48) months after
the Acquisition Date.”

 

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3.                                       Section 3.4 shall be deleted and
replaced in its entirety to read as follows:

 

“3.4.        The Executive will perform his services at the Company’s
headquarters in Louisville, Kentucky, with the understanding that he will be
required to travel as reasonably required (including travel to the United
Kingdom and Germany) for the performance of his duties under this Agreement.”

 

4.                                       Subsection 6.5(a) shall be deleted and
replaced in its entirety to read as follows:

 

“(a)         For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the events or conditions described in subsections (1)
through (10) hereof:

 

                (1)           a reduction by the Company in the Executive’s Base
Salary or annual target bonus opportunity as in effect prior to such reduction
or any failure to pay the Executive any compensation or benefits to which the
Executive is entitled within thirty days of the applicable due date, provided
that the Company may correct such reduction or failure within thirty (30) days
of its commission;

 

                (2)           German Parent, Parent or the Company require the
Executive to be relocated anywhere in excess of fifty (50) miles of his present
office location, except for (i) required travel on German Parent, Parent or
Company business consistent with his business travel obligations as in effect
prior to the Effective Time and as provided in Section 3.4 of this Agreement; or
(ii) a relocation resulting from appointment of Executive to the highest ranking
legal position (whether Chief Legal Officer, General Counsel or similar title)
of the United States entity primarily responsible for the management of the
German Parent’s participation in the United States’ energy industry;

 

                (3)           a failure by Parent or the Company to maintain
plans providing benefits at least as beneficial in the aggregate as those
provided by any benefit or compensation plan, retirement or pension plan, stock
option plan, bonus plan, long-term incentive plan, life insurance plan, health
and accident plan or disability plan in which the

 

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Executive is participating prior to the Effective Time, the Change in Control,
or this Second Amendment, as applicable, or if the Company or Parent has taken
any action which would adversely affect the Executive’s participation in or
materially reduce the Executive’s benefits under any of such plans or deprive
him of any material fringe benefit enjoyed by him prior to the Effective Time,
the Change in Control, or this Second Amendment, as applicable, or if the
Company or Parent has failed to provide him with the number of paid vacation
days to which he would be entitled in accordance with the Company’s normal
vacation policy immediately prior to the Effective Time, the Change in Control,
or this Second Amendment as applicable;

 

                (4)           Parent or the Company materially reduces,
individually or in the aggregate, the Executive’s title, job authorities or
responsibilities as in effect prior to such reduction;

 

                (5)           Parent or the Company fails to obtain the
assumption of the obligations contained in this Agreement by any successor as
contemplated in Section 11 hereof;

 

                (6)           any purported termination of the Executive’s
employment by Parent or the Company which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 8, hereof; and, for
purposes of this Agreement, no such purported termination shall be effective;

 

                (7)           any material breach by Parent or the Company of
any provision of this Agreement;

 

                                                                                               
                (8)           any purported termination of the Executive’s
employment for Cause by Parent or the Company which does not comply with the
terms of Section 6.2 of this Agreement;

 

                                                                                               
                (9)           any removal of the Executive from the position of
Executive Vice President, General Counsel, and Corporate Secretary of the
Company, except for Cause; or

 

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                (10)         any failure to appoint Executive to the highest
ranking legal position (whether Chief Legal Officer, General Counsel or similar
title) of the United Sates entity primarily responsible for the management of
the German Parent’s participation in the United States’ energy industry.”

 

        4.     The introduction to Section 7.1 shall be deleted and replaced in
its entirety to read as follows:

 

“7.1.        If during the Term of this Agreement, the Executive’s employment
with the Company shall be terminated within the later of (i) twenty-four months
after the effective time of any Change in Control, or (ii) forty-eight months of
the Acquisition Date, then the Executive shall be entitled to the following
compensation and benefits:”

 

5.             The introduction to Section 7.2 shall be deleted and replaced in
its entirety to read as follows:

 

“7.2.        If during the Term of this Agreement, the Executive’s employment
with the Company shall be terminated following the later of (i) twenty-four
months after the effective time of any Change in Control, or (ii) forty-eight
months of the Acquisition Date, then the Executive shall be entitled to the
following compensation and benefits:”

 

6.             Section 7.2(c)(ii) shall be deleted and replaced in its entirety
to read as follows:

 

“7.2(c)(ii)                The Company shall pay, as a severance amount to the
Executive after the Termination Date, an amount equal to the Executive’s (i)
Salary Amount, and (ii) Target Annual Incentive Amount;”

 

            IN WITNESS WHEREOF, the Company, the German Parent and the Parent
have caused this Second Amendment to be executed by its duly authorized
representative and the Executive has executed this Second Amendment as of the
date set forth below, but which shall

 

 

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be effective as of the later of (i) the Acquisition Date, provided the Company
employs Executive on that date, or (ii) the date the Executive executes a
release in the form attached hereto.  Except as provided herein, nothing
contained in this Second Amendment shall alter the terms and conditions of the
Agreement or the First Amendment.

 

E. ON. AG

 

 

By:

/s/ Ulrich Hartmann

 

 

Name

 

 

 

Title

 

 

 

 

Date:

 

 

 

 

 

 

LG&E ENERGY CORP.

 

 

By:

/signed/

 

 

Name

 

 

 

Title

 

 

 

 

Date:

 

 

 

 

 

 

POWERGEN, plc

 

 

By:

/signed/

 

 

Name

 

 

 

Title

 

 

 

 

Date:

 

 

 

 

 

 

EXECUTIVE

 

 

 

/s/ John R. McCall

 

 

John R. McCall

 

 

 

Date

20 May 2002

 

 

 

 

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