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**Exhibit10.76**

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**SECOND AMENDMENT TO THE**

**EMPLOYMENT AND SEVERANCE AGREEMENT**

**OF**

# **JOHN R. McCALL**

 

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

 

**                WHEREAS,******theExecutive, the Company and the Parent entered into an Employment and SeveranceAgreement, 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 (“FirstAmendment”);

 

**                WHEREAS,**the Parent and German Parent have agreed to the termsof a recommended pre-conditional cash offer, whereby German Parent or itssubsidiary will acquire ownership of the Parent;

 

**                WHEREAS,**the Parent and the German Parent have determined thatthe acquisition of the Parent by the German Parent shall be completed by way ofa scheme of arrangement, whereby the acquisition will become effective in accordancewith the terms of the scheme (“Acquisition Date”); and

 

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

** **

**AGREEMENT:**

 

**                NOWTHEREFORE****,**in consideration of the respective agreements of theparties contained herein, it is agreed as follows:

 

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

 

 

“1.4         If the Executive is (i) employed on theday following the second anniversary of the Acquisition Date by the Company,the Parent, the German Parent, or any subsidiary of the Company, the Parent orthe 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 atermination by an Employer for Cause or a termination by the Executive withoutGood Reason (as hereinafter defined), the Employer shall pay to the Executiveon such an anniversary or within 10 days of such termination date a lump sumcash payment in an amount equal to (i) the Executive’s Salary Amount (ashereinafter defined), and (ii) the Executive’s Target Annual Incentive Amount(as hereinafter defined).  For purposesof this Agreement, “Salary Amount” shall mean the Executive’s annual basesalary from an Employer in effect at the time of payment, including all amountsof base salary that are deferred under any qualified or non-qualified employeebenefit plan of an Employer; provided however, if an Employer has reduced theExecutive’s annual base salary, the Salary Amount shall be the annual basesalary in effect prior to the reduction. For purposes of this Agreement, “Target Annual Incentive Amount” shallmean the target annual bonus of the Executive under the annual incentive planof the Employer at the time of payment; provided however, that if an Employerhas reduced the target annual bonus of the Executive, the Target AnnualIncentive Amount shall be the target annual bonus in effect prior to thereduction.”

 

2.             Section2 shall be deleted and replaced in its entirety to read as follows:

 

“**2.****TERM OF AGREEMENT**.  This Agreement shall commence as of theEffective Time, and shall continue in effect until the second anniversary ofthe Effective Time; provided, however, that commencing on the secondanniversary of the Effective Time, and on each anniversary of the EffectiveTime thereafter, the term of this Agreement shall automatically be extended forone (1) year unless the Company or the Executive shall have given writtennotice to the other at least ninety days prior thereto (if such notice is givenfollowing the second anniversary of the Effective Time, otherwise such noticeperiod shall be one hundred and eighty days) that the term of this Agreementshall not be so extended; and provided, further, however, that notwithstandingany such notice by the Company not to extend, the term of this Agreement shallnot expire prior to the expiration of the later of (i) twenty-four (24) monthsafter 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 replacedin its entirety to read as follows:

 

“3.4.        TheExecutive will perform his services at the Company’s headquarters inLouisville, Kentucky, with the understanding that he will be required to travelas reasonably required (including travel to the United Kingdom and Germany) forthe performance of his duties under this Agreement.”

 

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

 

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

 

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

 

                (2)           GermanParent, Parent or the Company require the Executive to be relocated anywhere inexcess of fifty (50) miles of his present office location, except for (i)required travel on German Parent, Parent or Company business consistent withhis business travel obligations as in effect prior to the Effective Time and asprovided in Section 3.4 of this Agreement; or (ii) a relocation resulting fromappointment of Executive to the highest ranking legal position (whether ChiefLegal Officer, General Counsel or similar title) of the United States entityprimarily responsible for the management of the German Parent’s participationin the United States’ energy industry;

 

                (3)           afailure by Parent or the Company to maintain plans providing benefits at leastas beneficial in the aggregate as those provided by any benefit or compensationplan, retirement or pension plan, stock option plan, bonus plan, long-termincentive plan, life insurance plan, health and accident plan or disabilityplan in which the

 

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Executive isparticipating prior to the Effective Time, the Change in Control, or thisSecond Amendment, as applicable, or if the Company or Parent has taken anyaction which would adversely affect the Executive’s participation in ormaterially reduce the Executive’s benefits under any of such plans or deprivehim 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 theCompany or Parent has failed to provide him with the number of paid vacationdays to which he would be entitled in accordance with the Company’s normalvacation policy immediately prior to the Effective Time, the Change in Control,or this Second Amendment as applicable;

 

                (4)           Parent or the Company materiallyreduces, individually or in the aggregate, the Executive’s title, jobauthorities or responsibilities as in effect prior to such reduction;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“7.1.        Ifduring the Term of this Agreement, the Executive’s employment with the Companyshall be terminated within the later of (i) twenty-four months after theeffective time of any Change in Control, or (ii) forty-eight months of theAcquisition Date, then the Executive shall be entitled to the followingcompensation and benefits:”

 

5.             Theintroduction to Section 7.2 shall be deleted and replaced in its entirety toread as follows:

 

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

 

6.             Section7.2(c)(ii) shall be deleted and replaced in its entirety to read as follows:

 

“7.2(c)(ii)                TheCompany shall pay, as a severance amount to the Executive after the TerminationDate, an amount equal to the Executive’s (i) Salary Amount, and (ii) TargetAnnual Incentive Amount;”

 

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

 

 

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be effective as of the later of (i) the Acquisition Date, provided theCompany employs Executive on that date, or (ii) the date the Executive executesa release in the form attached hereto. Except as provided herein, nothing contained in this Second Amendmentshall 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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