**Exhibit 10.46**

 

 

**LG&E ENERGY LLC**

**NONQUALIFIED**

**SAVINGS PLAN**

**(Effective January 1, 2005)**

 

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**TABLE OF CONTENTS**

 
| **ARTICLE 1: PURPOSE AND  EFFECTIVE DATE**                              | 1 |
|------------------------------------------------------------------------------|---|
| **Section 1.1  – Title**                                           | 1 |
| **Section 1.2  – Purpose**                                         | 1 |
| **Section 1.3  – Effective Date**                                  | 1 |
| **ARTICLE 2: DEFINITIONS AND  CONSTRUCTION OF THE PLAN DOCUMENT**       | 2 |
| **Section 2.1  – Beneficiary**                                     | 2 |
| **Section 2.2  – Board of Directors**                              | 2 |
| **Section 2.3  – Bookkeeping Account**                             | 2 |
| **Section 2.4  - Committee**                                            | 2 |
| **Section 2.4  - Committee**                                            | 2 |
| **Section 2.5  –**  **Company**                               | 2 |
| **Section 2.6  – Compensation**                                    | 2 |
| **Section 2.7  – Deferral Agreement**                              | 2 |
| **Section 2.8  – Deferred Compensation**                           | 2 |
| **Section 2.9  – Election Date**                                   | 2 |
| **Section 2.10  – Executive**                                      | 2 |
| **Section 2.11  – Participant**                                    | 3 |
| **Section 2.12  – Plan**                                           | 3 |
| **Section 2.13  – Plan Year**                                      | 3 |
| **Section 2.14  – Qualified Plan**                                 | 3 |
| **Section 2.15  – Retirement**                                     | 3 |
| **Section 2.16  – Termination of Service**                         | 3 |
| **Section 2.17  – Valuation Date**                                 | 3 |
| **Section 2.18  – Gender and Number**                              | 3 |
| **Section 2.19  – Titles**                                         | 3 |
| **ARTICLE 3: ELIGIBILITY AND  PARTICIPATION**                           | 4 |
| **Section 3.1  – Eligibility**                                     | 4 |
| **Section 3.2  – Participation**                                   | 4 |
| **ARTICLE 4: DEFERRAL OF  COMPENSATION**                                | 5 |
| **Section 4.1  – Basic Deferral**                                  | 5 |
| **Section 4.2  – Company Matching Contribution to Basic Deferral** | 5 |
| **Section 4.3  – Additional Deferrals**                            | 5 |
| **Section 4.4  – Company Contribution to Additional Deferrals.**   | 5 |
| **Section 4.4  – Company Contribution to Additional Deferrals**    | 5 |
| **Section 4.5  – Duration of Deferral Agreement**                  | 5 |
| **ARTICLE 5: DEFERRAL ACCOUNT  AND CREDITING**                          | 6 |
| **Section 5.1  – Bookkeeping Account**                             | 6 |
| **Section 5.2  – Crediting of Contributions**                      | 6 |
| **Section 5.3  – Crediting of Interest**                           | 6 |
| **ARTICLE 6: DISTRIBUTION**                                             | 7 |
| **Section 6.1  – Distribution of Account Balance**                 | 7 |
| **Section 6.2  – Permissible Forms of Distribution**               | 7 |
| **Section 6.3  – Nonforfeitable Right to Employee Contributions**  | 8 |

 

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| **Section 6.4  – Vesting of Company Contributions**       | 8  |
|---------------------------------------------------------------------|----|
| **Section 6.5  – Form of Distribution.**             | 8  |
| **ARTICLE 7:**  **BENEFICIARY**                           | 9  |
| **Section 7.1  – Beneficiary Designation**                | 9  |
| **Section 7.2  – Proper Beneficiary**                     | 9  |
| **Section 7.3  – Minor or Incompetent Beneficiary**       | 9  |
| **ARTICLE 8:**  **ADMINISTRATION OF THE PLAN**            | 10 |
| **Section 8.1  – Majority Vote**                          | 10 |
| **Section 8.2  – Finality of Determination**              | 10 |
| **Section 8.3  – Certificates and Reports**               | 10 |
| **Section 8.4  – Indemnification and Exculpation**        | 10 |
| **Section 8.5  – Expenses**                               | 10 |
| **ARTICLE 9: CLAIMS PROCEDURE**                                | 11 |
| **Section 9.1  – Written Claim**                          | 11 |
| **Section 9.2  – Denied Claim**                           | 11 |
| **Section 9.3  – Review Procedure**                       | 11 |
| **Section 9.4  – Committee Review**                       | 11 |
| **ARTICLE 10: NATURE OF  COMPANY’S OBLIGATION**           | 12 |
| **Section 10.1  – Company’s Obligation**             | 12 |
| **Section 10.2**– **Creditor Status**                     | 12 |
| **ARTICLE 11: MISCELLANEOUS**                                  | 13 |
| **Section 11.1  – Written Notice**                        | 13 |
| **Section 11.2  – Change of Address**                     | 13 |
| **Section 11.3  – Merger, Consolidation, or Acquisition** | 13 |
| **Section 11.4**  – **Amendment and Termination**         | 13 |
| **Section 11.5  – Nontransferability**                    | 13 |
| **Section 11.6  – Legal Fees**                            | 13 |
| **Section 11.7  – Tax Withholding**                       | 13 |
| **Section 11.8  – Acceleration of Payment**               | 13 |
| **Section 11.9  – Applicable Law**                        | 13 |

 

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**ARTICLE 1: PURPOSE AND EFFECTIVE DATE**

 

**Section 1.1– Title.**This Plan shall be known as the LG&E Energy LLCNonqualified Savings Plan (“Plan”).

 

**Section 1.2– Purpose**. The purpose of the Plan is to permit officers andsenior managers of the Company to defer current compensation.

 

**Section 1.3–  Effective Date**. Theeffective date of this Plan shall be January 1, 2005.

 

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**ARTICLE 2: DEFINITIONS AND CONSTRUCTION OFTHE PLAN DOCUMENT**

 

**Section 2.1–  Beneficiary**. “Beneficiary”means the person or persons or the estate of a Participant designated by the Participant.

 

**Section 2.2–  Board of Directors**. The“Board of Directors” means the Board of Directors of LG&E Energy LLC, orits successor.

 

**Section 2.3– Bookkeeping Account**. A “Bookkeeping Account” will beestablished only as a bookkeeping record for each Participant who elects todefer compensation under this Plan and may, at the discretion of the Committee,include one or more sub-accounts to reflect amounts credited to a participantunder the various terms of this Plan.

 

**Section 2.4- Committee**. “Committee” means the Benefits Committee for theQualified Plan which shall manage and administer the Plan.

 

**Section 2.5–****Company**. “Company”means LG&E Energy LLC, and any subsidiary or affiliated companiesauthorized by the Committee to participate in this Plan.

 

**Section 2.6– Compensation**. “Compensation” means, for any Plan Year, basecompensation paid to an Employee by an Employer increased by (i) amountsdeferred pursuant to Code Sections 125 (flexible benefit plans), 402(g)(8) (salaryredirection), and 402(h)(1)(B) (simplified employee plans), (ii) incentiveawards, (iii) amounts deferred under this plan, (iv) cost-of-livingadjustments, and (v) commissions, and excluding any long term incentivecompensation paid by the Employer. In the Plan Year during which an Employeebecomes a Participant, only remuneration paid in the portion of the Plan Yearin which he was a Participant shall be considered Compensation.

 

**Section 2.7– Deferral Agreement**. “Deferral Agreement” means the written form whichis submitted to the Company before the relevant Election Date which indicateswhether the Executive wishes to defer a portion of his Compensation andindicates the portion of Compensation to be deferred. No Deferral Agreementshall be effective until acknowledged by the Company. An Executive who receivesCompensation from more than one Company shall enter into a separate DeferralAgreement applicable to Compensation from each such Company.

 

**Section 2.8– Deferred Compensation**. “Deferred Compensation” means theportion of a Participant’s Compensation for any calendar year, or part thereof,that has been deferred pursuant to the Plan.

 

**Section 2.9– Election Date**. “Election Date” means a date prior to thecalendar year in which the services giving rise to the Compensation areperformed, or any other permissible date established by law or regulation andadopted by the Committee.

 

**Section 2.10– Executive**. “Executive” means any officer or senior managerof the Company.

 

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**Section 2.11– Participant**. “Participant” means an Executive who hasdeferred a portion of Compensation pursuant to the terms of this Plan, andwhose account balance has not yet been distributed.

 

**Section 2.12– Plan**. “Plan” means the LG&E Energy LLC NonqualifiedSavings Plan as described in this instrument and as amended from time to time.

 

**Section 2.13– Plan Year**. The “Plan Year” is the same as the calendaryear.

 

**Section 2.14– Qualified Plan**. “Qualified Plan” shall mean the LG&EEnergy LLCSavings Plan, as amended from time to time.

 

**Section 2.15– Retirement**. “Retirement” means a Participant’s normal,early, deferred or disability retirement as provided under the terms of theQualified Plan.

 

**Section 2.16– Termination of Service**. “Termination of Service,” orsimilar expression, means the termination of the Participant’s employment as aregular employee of the Company and any division, subsidiary or affiliatethereof, other than Retirement.

 

**Section 2.17– Valuation Date**. “Valuation Date” means any date the NewYork Stock Exchange is open for business.

 

**Section 2.18– Gender and Number.**Whenever the context so requires,masculine pronouns include the feminine, and singular words shall include theplural.

 

**Section 2.19– Titles.**Titles of the Articles of this Plan are includedfor ease of reference only and are not to be used for the purpose of construingany portion or provision of this plan document.

 

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**ARTICLE 3: ELIGIBILITY AND PARTICIPATION**

 

**Section 3.1– Eligibility**. Any employee of the Company who is newly hiredas an Executive or who is promoted to an executive position shall be eligibleto participate in the Plan as of the first day of each calendar monthcoincident with or following the latter of (i) his employment as anExecutive or promotion to an Executive position and (ii) the completion ofsix (6) months of continuous employment with the Company as an Executiveor non-Executive.

 

**Section 3.2– Participation**. An Executive shall, as a condition to participation,complete and return to the Company a duly executed Deferral Agreement on orbefore the applicable Election Date.

 

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**ARTICLE 4: DEFERRAL OF COMPENSATION**

 

**Section 4.1– Basic Deferral**. Each Participant in the Plan may havea percentage of his Compensation from each Company deferred in accordance withthe terms and conditions of this Plan up to a maximum of six percent (6%).

 

**Section 4.2–  Company Matching Contribution to BasicDeferral**. With respect to amounts deferred under Section 4.1,the Company shall add an amount equal to fifty percent (50%) of the amountdeferred under 4.1, provided that the Participant is not eligible for matchingcontributions in the Qualified Plan at the time the deferred compensation wouldhave otherwise been paid to the Participant.

 

**Section 4.3– Additional Deferrals**. Each Participant making the maximumdeferral under Section 4.1 may also defer up to an additionalforty-four percent (44%) of his Compensation.

 

**Section 4.4– Company Contribution to Additional Deferrals.**Any amountsdeferred by a Participant under Section 4.3 shall not be subject to anyadditional Company contribution. However, for all other purposes of this Plan,deferrals made by a Participant under Section 4.3 shall be treated thesame as those made under Section 4.1.

 

**Section 4.4– Company Contribution to Additional Deferrals.**Any amountsdeferred by a Participant under Section 4.3 shall not be subject to anyadditional Company contribution. However, for all other purposes of this Plan,deferrals made by a Participant under Section 4.3 shall be treated thesame as those made under Section 4.1.

 

**Section 4.5– Duration of Deferral Agreement**. Deferral Agreements remainin effect for the calendar year following the year of election, unlessotherwise provided by law or regulation.

 

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**ARTICLE 5: DEFERRAL ACCOUNT AND CREDITING**

 

**Section 5.1– Bookkeeping Account**. Compensation deferred by a Participantunder a written Deferral Agreement and matching Company contributions shall becredited in a dollar amount to a separate Bookkeeping Account for eachParticipant. Compensation deferred under subsequent written Deferral Agreementsby a Participant shall be added to his Bookkeeping Account. SeparateBookkeeping Accounts shall be established by each Company, or its designee, foreach Participant employed thereby.

 

**Section 5.2– Crediting of Contributions**. Deferred Compensation andmatching Company contributions, since the preceding Valuation Date, shall becredited to the Bookkeeping Account of each Valuation Date or, in the case of aTermination of Service or Retirement, as of the date of the Participant’sTermination of Service or Retirement.

 

**Section 5.3– Crediting of Interest**. As of each Valuation Date, theamount in the Participant’s Bookkeeping Account shall be credited with interestat an annual rate equal to the Prime Interest Rate reset as of the immediatelypreceding March 31, June 30, September 30, and December 31.Interest shall be calculated by applying such rate to the balance in theParticipant’s Bookkeeping Account as of each Valuation Date.

 

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**ARTICLE 6: DISTRIBUTION**

 

**Section 6.1– Distribution of Account Balance.**At the time of completionof the Deferral Agreement, the Participant shall elect the commencement date ofthe distribution and the manner of distribution of his Bookkeeping Accounts onsuch forms as the Committee, or its designee, shall provide. The Participant(or the Participant’s Beneficiary, if the Participant is deceased) shall beentitled to the receive the value of any Bookkeeping Account established forhim at the time and in the manner elected. After completion of the DeferralAgreement, the time and manner of distribution cannot be changed unless:

 

(a)                                  Therequested change in time or form of distribution:

 

(i)            Does nottake effect for a period of at least 12 months,

(ii)           Is made bythe Participant at least twelve (12) months prior to the scheduled paymentdate, and

(iii)          Resultsin a deferral for a period of an additional five (5) years from the dateof the original elected commencement of payment, or

 

(b)                                 Therequested change in time or form of distribution:

 

(i)            Occursafter the Participant’s death,

(ii)           Occursafter the Participant’s Disability, as defined by Section 409A of theInternal Revenue Code and related Treasury Regulations, or

(iii)          Occursas a result of an unforeseeable emergency, as defined by Section 409A ofthe Internal Revenue Code and related Treasury Regulations, or

 

(c)                                  Therequested change in time of form of distribution is permitted pursuant to Section 409Aof the Internal Revenue Code and related Treasury Regulations, as a result of achange in the ownership or effective control of the corporation, or in theownership of a substantial portion of the assets of the company.

 

**Section 6.2– Permissible Forms of Distribution.**The Deferral Agreementand any permitted changes as defined in Section 6.1 shall provide for theParticipant’s election of the form of distribution. The available forms ofdistribution under the Plan shall be either:

 

(a)                                  Alump sum payment in the year of the Participant’s Termination of Service,Retirement or specified date; or

 

(b)                                 Annualinstallment payments for a period of not less than two (2) years and notmore than ten (10) years, as selected by the Participant or Beneficiary,beginning in the year of the Participant’s Termination of Service, Retirementor specified date.

 

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Notwithstandingthe foregoing, distribution elections must be consistent with the provisions ofSection 409A of the Internal Revenue Code and related TreasuryRegulations, including provisions related to “Key Employees” as defined therein.

 

**Section 6.3– Nonforfeitable Right to Employee Contributions.**TheParticipant shall have a nonforfeitable right to the value of his BookkeepingAccount attributable to his contributions under Section 4.1 and 4.3hereof, plus interest under the terms of this Plan.

 

**Section 6.4– Vesting of Company Contributions.**The Participant shallhave a nonforfeitable right to any Company contributions under Section 4.2,plus interest thereon.

 

**Section 6.5– Form of Distribution.**All distributions of aParticipant’s Bookkeeping Account shall be made in cash only.

 

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**ARTICLE 7:****BENEFICIARY**

 

**Section 7.1– Beneficiary Designation.**A Participant shall designate hisBeneficiary to receive benefits under the Plan by completing the appropriatespace in the Deferral Agreement. If more than one Beneficiary is named, theshares and/or precedence of each Beneficiary shall be indicated. A Participantshall have the right to change the Beneficiary by submitting to the Company aChange of Beneficiary form. However, no change of beneficiary shall beeffective until acknowledged in writing by the Company.

 

**Section 7.2– Proper Beneficiary.**If the Company has any doubt as to theproper Beneficiary to receive payments hereunder, the Company shall have theright to withhold such payments until the matter is finally adjudicated. However,any payment made by the Company, in good faith and in accordance with thisPlan, shall fully discharge the Company from all further obligations withrespect to that payment.

 

**Section 7.3– Minor or Incompetent Beneficiary.**In making any payments toor for the benefit of any minor or an incompetent Beneficiary, the Committee,in its sole and absolute discretion, may make a distribution to a legal ornatural guardian or other relative of a minor or court appointed committee ofsuch incompetent. The Committee may, in its sole and absolute discretion, makea payment to any adult with whom the minor or incompetent temporarily orpermanently resides. The receipt by a guardian, committee, relative, or otherperson shall be a complete discharge to the Company. Neither the Committee northe Company shall have any responsibility to see to the proper application ofany payments so made.

 

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**ARTICLE 8:****ADMINISTRATION OF THE PLAN**

 

**Section 8.1– Majority Vote.**All resolutions or other actions taken bythe Committee shall be by vote of a majority of those present at a meeting atwhich a majority of the members are present, or in writing by all the membersat the time in office if they act without a meeting.

 

**Section 8.2– Finality of Determination.**Subject to the Plan, theCommittee shall, from time to time, establish rules, forms, and procedures forthe administration of the Plan. Except as herein otherwise expressly provided,the Committee shall have the exclusive right to interpret the Plan and todecide any and all matters arising thereunder or in connection with theadministration of the Plan, and it shall endeavor to act, whether by general rules orby particular decisions, so as not to discriminate of or against any person. Thedecisions, actions, and records of the Committee shall be conclusive andbinding upon the Company and all persons having or claiming to have any right orinterest in or under the Plan.

 

**Section 8.3– Certificates and Reports.**The members of the Committee andthe officers and directors of the Company shall be entitled to rely on allcertificates and reports made by any duly appointed accountants, and on allopinions given by any duly appointed legal counsel, which legal counsel may becounsel for the Company.

 

**Section 8.4– Indemnification and Exculpation.**LG&E Energy LLC shallindemnify and hold harmless each member of the Committee against any and allexpenses and liabilities arising out of his membership on the Committee. Expensesagainst which a member of the Committee shall be indemnified hereunder shallinclude, without limitation, the amount of any settlement or judgment, costs,counsel fees, and related charges reasonably incurred in connection with aclaim asserted, or a proceeding brought or settlement thereof. The foregoingright of indemnification shall be in addition to any other rights to which anysuch member of the Committee may be entitled as a matter of law.

 

**Section 8.5– Expenses.**The expenses of administering the Plan shall beborne by the Company.

 

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**ARTICLE 9: CLAIMS PROCEDURE**

 

**Section 9.1– Written Claim.**Benefits shall be paid in accordance withthe provisions of this agreement. The Participant, or a designated recipient orany other person claiming through the Participant shall make a written requestfor benefits under this agreement. This written claim shall be reviewed by theCommittee or its delegate.

 

**Section 9.2– Denied Claim.**If the claim is denied, in full or in part,the Committee shall provide a written notice within ninety (90) days settingforth the specific reasons for denial, and any additional material orinformation necessary to perfect the claim, and an explanation of why suchmaterial or information is necessary, and appropriate information andexplanation of the steps to be taken if a review of the denial is desired.

 

**Section 9.3– Review Procedure.**If the claim is denied and a review isdesired, the Participant (or beneficiary) shall notify the Committee in writingwithin sixty (60) days (a claim shall be deemed denied if the Committee doesnot take any action within the aforesaid ninety (90) day period) after receiptof the written notice of denial. In requesting a review, the Participant or hisBeneficiary may request a review of the Plan Document or other pertinentdocuments with regard to the employee benefit plan created under thisagreement, may submit any written issues and comments, may request anextension of time for such written submission of issues and comments, and may requestthat a hearing be held, but the decision to hold a hearing shall be within thesole discretion of the Committee.

 

**Section 9.4– Committee Review.**The decision on the review of the deniedclaim shall be rendered by the Committee within sixty (60) days after thereceipt of the request for review (if no hearing is held) or within sixty (60)days after the hearing if one is held. The decision shall be written and shallstate the specific reasons for the decision, including reference to specificprovisions of this Plan on which the decision is based.

 

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**ARTICLE 10: NATURE OF COMPANY’S OBLIGATION**

 

**Section 10.1– Company’s Obligation.**Each Company’s obligations under thisPlan shall be an unfunded and unsecured promise to pay. No Company shall beobligated under any circumstances to fund its financial obligations under thisPlan.

 

**Section 10.2**– **Creditor Status.**Anyassets which the Company may acquire or set aside to help cover itsfinancial liabilities are and must remain general assets of the Company subjectto the claims of its creditors. Neither the Company nor this Plan gives theParticipant any beneficial ownership interest in any asset of the Company. Allrights of ownership in any such assets are and remain in the Company.

 

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**ARTICLE 11: MISCELLANEOUS**

 

**Section 11.1– Written Notice.**Any notice which shall be or may begiven under the Plan or a Deferral Agreement shall be in writing and shall bemailed by United States mail, postage prepaid. If notice is to be given to theCompany, such notice shall be addressed to the Company marked for the attentionof the Committee, or if notice to an Executive, addressed to the address shownon such Executive’s Deferral Agreement or subsequent new address as provided bythe Executive.

 

**Section 11.2– Change of Address.**Any party may, from time to time, changethe address to which notices shall be mailed by giving written notice of suchnew address.

 

**Section 11.3– Merger, Consolidation, or Acquisition.**The plan shall bebinding upon the Company, its assigns, and any successor company, which shallsucceed to substantially all of its assets and business through merger,acquisition, or consolidation, and upon an Executive, his Beneficiary, assigns,heirs, executors, and administrators.

 

**Section 11.4**– **Amendment and Termination.**LG&EEnergy LLC, by action of its Board of Directors, retains the sole andunilateral right to terminate, amend, notify, or supplement this Plan, in wholeor in part, at any time. This right includes the right to make retroactiveamendments. However, no Company action under this right shall reduce theBookkeeping Account of any Participant or his Beneficiary.

 

**Section 11.5– Nontransferability.**Except insofar as prohibited byapplicable law, no sale, transfer, alienation, assignment, pledge,collateralization, or attachment of any benefits under this Plan shall be validor recognized by the Company. Neither the Participant, his spouse, ordesignated Beneficiary shall have any power to hypothecate, mortgage, commute,modify, or otherwise encumber in advance of any of the benefits payable hereunder,not shall any of said benefits be subject to seizure for the payment of anydebts, judgments, alimony maintenance, owed by the Participant or hisBeneficiary, or be transferable by operation of law in the event of bankruptcy,insolvency, or otherwise.

 

**Section 11.6– Legal Fees.**All reasonable legal fees incurred by anyParticipant (or former Participant) to successfully enforce his valid rightsunder this Plan shall be paid by the Company in addition to sums due under thisPlan.

 

**Section 11.7– Tax Withholding.**The Company may withhold from apayment any federal, state, or local taxes required by law to be withheld withrespect to such payment and such sum as the Company may reasonablyestimate as necessary to cover any taxes for which the Company may beliable and which may be assessed with regard to such payment.

 

**Section 11.8– Acceleration of Payment.**The company reserves the right toaccelerate the payment of any benefits payable under this Plan at any timewithout the consent of the Participant, his estate, his Beneficiary, or anyother person claiming through the Participant.

 

**Section 11.9– Applicable Law.**This Plan shall be governed by the laws ofthe Commonwealth of Kentucky.

 

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INWITNESS WHEREOF, the Company has caused this Plan to be executed as of the 1stday of January 2005.

 

 
|   | LG&E ENERGY  LLC |
|--------|----------------------|
|   |                 |
|   |                 |
|   | By:                  |   |   |
|   | Title:               |   |   |

 

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