**Exhibit 99.02**

 

**LOUISVILLE GAS AND ELECTRIC COMPANY****AND****KENTUCKYUTILITIES COMPANY****DIRECTORAND OFFICER INFORMATION**

 

The outstanding stock of Louisville Gas and ElectricCompany (“LG&E”) is divided into three classes: Common Stock, PreferredStock (without par value), and Preferred Stock, par value **$**25 per share. At the closeof business n February 28, 2003, the following shares of each were outstanding:

 
| Common Stock,  without par value                         |   | 21,294,223 shares |   |
|----------------------------------------------------------|--------|-------------------|--------|
| Preferred Stock,  par value **$**25 per share, 5% Series |   | 860,287 shares    |   |
| Preferred Stock,  without par value, **$**5.875 Series   |   | 250,000 shares    |   |
| Auction Series A  (stated value **$**100 per share)      |   | 500,000 shares    |   |

 

The outstanding stock of Kentucky Utilities Company(“KU”) is divided into three classes: Common Stock, without par value,Preferred Stock, without par value, and Preference Stock, without par value. Asof the close of business on February 28, 2003, the following shares of eachwere outstanding:

 
| Common Stock,  without par value                                      |   | 37,817,878 shares |   |
|-----------------------------------------------------------------------|--------|-------------------|--------|
| Preferred Stock,  without par value (stated value **$**200 per share) |   |              |   |
| 4.75% Series                                                          |   | 200,000 shares    |   |
| 6.53% Series                                                          |   | 200,000 shares    |   |

 

All of theoutstanding LG&E Common Stock and KU Common Stock is owned by LG&EEnergy Corp. (“LG&E Energy”). Based on information contained in a Schedule13G originally filed with the Securities and Exchange Commission in October1998, AMVESCAP PLC, a parent holding company, reported certain holdings inexcess of five percent of LG&E’s Preferred Stock. AMVESCAP PLC, with officesat 1315 Peachtree Street, N.W., Atlanta, Georgia 30309, and certain of itssubsidiaries reported sole voting and dispositive power as to no shares andshared voting and dispositive power as to 43,000 shares of LG&E PreferredStock, without par value, **$**5.875 Series, representing 17.2% of thatclass of Preferred Stock. The reporting companies indicated that they hold theshares on behalf of other persons who have the right to receive or the power todirect the receipt of dividends or the proceeds of sales of the shares. Noother persons or groups are known by management to be beneficial owners of morethan five percent of LG&E’s Preferred Stock

 

As of February 28,2003, all directors, nominees for director and executive officers of LG&Eand KU as a group beneficially owned no shares of LG&E Preferred Stock orKU Preferred Stock.

 

On December 11,2000, then Powergen plc, a public limited company with registered offices inEngland and Wales (“Powergen”) completed its acquisition of LG&E Energy,the parent corporation of LG&E and KU for cash of approximately **$**3.2billion, or **$**24.85 per share of LG&E Energy common stock. Inconnection with such transaction, certain officers and directors of Powergenwere appointed to fill vacancies in the Board of Directors of LG&E and KUoccurring by resignation of prior directors. In January 2003, Powergen was reregistered as Powergen Limited.

 

On July 1, 2002,E.ON AG, a German corporation (“E.ON”), completed the acquisition of Powergenfor cash of approximately 8.1 billion euros or 7.65 British pounds per Powergenordinary share (equal to 30.60 British pounds per Powergen ADS.) In connectionwith such transaction, certain officers or directors of E.ON and Powergen wereappointed to fill vacancies in the Board of Directors of LG&E and KUoccurring by resignation of prior directors.

 

In October 2001,the Board of Directors of LG&E and KU authorized the delisting ofLG&E’s 5% Preferred Stock from the NASDAQ Small Capitalization Market, andKU’s 4.75% Preferred Stock from the Philadelphia Stock Market, which delistingswere completed in April and May 2002, respectively, following applications tothe relevant exchanges. Delisting does not constitute a change in the terms andconditions of the preferred stock nor the rights and

 

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privileges of itsshareholders.  Delisting enabledLG&E and KU (collectively, the “Companies”) to realize certainadministrative and corporate governance efficiencies.

 

**INFORMATIONABOUT DIRECTORS**

 

The number of members of the Board of Directors ofLG&E and KU is currently fixed at nine, pursuant to the Companies’ bylawsand resolutions adopted by the Boards of Directors. The directors areclassified into three classes, as nearly equal in number as possible, withrespect to the time for which they are to hold office. Generally, one class ofdirectors is elected at each year’s Annual Meeting to serve for three-yearterms and to continue in office until their successors are elected andqualified.

 

In connection withthe completion of the E.ON-Powergen acquisition, Sir Frederick Crawford, Dr.David K-P Li and Messrs. Nicholas P. Baldwin, Sydney Gillibrand and David J.Jackson resigned as directors of LG&E and KU, effective July 1, 2002.Messrs. Victor A. Staffieri and Edmund A. Wallis continued as directors and Mr.Michael Soehlke was appointed to fill one vacancy, resulting in a board ofthree persons and six vacancies. At this time, the Boards of Directors alsoapproved proposed future amendments to the Companies’ Articles of Incorporationand Bylaws to enable reduction of LG&E’s and KU’s board sizes to threemembers and recommended it for eventual shareholder vote.

 

Therefore it isanticipated that LG&E and KU will, in the near future, seek shareholderapproval of the board size of three persons, without staggered terms. In thisregard, for the interim, the three current serving directors have been electedto and are serving parallel one year terms.

 

The following contains certain information as ofFebruary 28, 2003 concerning the directors of LG&E and KU:

 

**Directors with Terms Expiring at the2003 Annual Meeting of Shareholders**

 

***Victor A. Staffieri* (Age 47):**    Mr. Staffieri is Chairman, President andChief Executive Officer of LG&E Energy, LG&E and KU, serving from April2001 to the present. He served as President and Chief Operating Officer ofLG&E Energy, LG&E and KU from February 1999 to April 2001; ChiefFinancial Officer of LG&E Energy and LG&E, May 1997 to February 2000;Chief Financial Officer of KU, May 1998 to February 2000. President,Distribution Services Division of LG&E Energy, December 1995 to May 1997;Senior Vice President, General Counsel and Public Policy of LG&E Energy andLG&E from November 1992 to December 1993. Mr. Staffieri has been a directorof Powergen, LG&E Energy, LG&E and KU since April 2001.

 

***Michael Soehlke* (Age 43):**    Mr. Soehlke was appointed a director andChief Financial Officer of Powergen on July 1, 2002. He was previously Head ofCorporate Planning and Controlling at E.ON AG. Prior to that, he was Head ofControlling and Accounting at PreussenElektra AG (which merged into E.ONEnergie AG). Prior to joining the E.ON group, he worked nearly ten years infinance positions of the German subsidiary of Solvay S.A., Brussels.  He is also a director of Powergen UK plc andPowergen International Limited.  Mr.Soehlke has been a director of LG&E Energy, LG&E and KU since July2002.

 

***Edmund A. Wallis* (Age 63):**    Mr. Wallis is Chief Executive Officer andDeputy Chairman of Powergen. He was appointed to the Powergen Board on October22, 1998, serving as Chairman of such Board from that date until July 2002. Hewas also Chief Executive of Powergen until February 21, 2001. He had been ChiefExecutive of Powergen UK plc since March 1990 and Chairman from July 1996 untilFebruary 2001. He is a director of Powergen International Limited.  Mr. Wallis is a non-executive director ofMerrill Lynch European Investment Trust plc, and MEPSEC LTD and a non-executivedirector of London Regional Transport and Chairman of London UndergroundLimited. Mr. Wallis has been on the Board of Directors of LG&E and KU sinceDecember 2000.

 

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**INFORMATIONCONCERNING THE BOARD OF DIRECTORS**

 

The Boards of Directors of LG&E and KU contain thesame members.  Certain members are alsodirectors of Powergen or LG&E Energy, as described above.

 

During 2002, therewere a total of 12 meetings or consents of the LG&E and KU Boards. Alldirectors attended 75% or more of the total number of meetings or consents ofthe Board of Directors and committees of the Board on which they served.

 

**Compensation of Directors**

 

Directors who are also officers of Powergen, LG&EEnergy or its subsidiaries receive no compensation in their capacities as directorsof LG&E and KU.

 

During 2002, certain non-employee directors who werealso directors of Powergen received aggregate annual salaries or fees rangingfrom approximately 12,500 to 15,000 Pounds for their service on the Powergenboard but received no separate compensation for their service on the LG&Eand KU Board. The compensation of these non-employee directors was determinedby the Powergen Board and consisted of a basic sum plus an additional paymentfor specific duties in respect of committee work.  Non-employee directors do not receive Powergen pensioncontributions and do not have service contracts with Powergen or any of itssubsidiaries.

 

**Committees**

 

There arecurrently no committees of the Boards of Directors of the Companies.  Until July 2002, the Boards of Directors ofLG&E and KU included an Audit Committee and a Remuneration Committee andthe directors who were members of the various committees served in the samecapacities for purposes of both the LG&E and KU Boards.

 

In July 2002, upon completion of the E.ON-Powergenacquisition, the structures of the LG&E and KU Boards were changed torecognize practical and administrative efficiencies. The LG&E and KU Boardsand LG&E Energy Board, respectively, adopted resolutions providing that (i)the functions of the former Audit Committee would be performed by the LG&Eand KU Boards as a whole and (ii) certain functions of the former RemunerationCommittee under certain LG&E Energy executive compensation plans would beperformed by Dr. Stefan Vogg, an executive of E.ON.

 

Prior to July 2002, the former Remuneration Committeewas composed of Dr. David K-P Li, a non-employee director, and performedcertain duties in connection with the compensation of the executive officers ofLG&E and KU, including making recommendations regarding benefits providedto executive officers and the establishment of various employee benefit plans.The Remuneration Committee met 3 times during 2002.

 

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**REPORTREGARDING REMUNERATION**

 

Following the July 1, 2002 completion of E.ON’sacquisition of Powergen, the Remuneration Committee of the Boards of Directorsof LG&E and KU was terminated.  Asstated above, the LG&E Energy Board adopted resolutions providing thatcertain functions of the former Remuneration Committee under certain executivecompensation plans would be performed by Dr. Stefan Vogg, an executive of E.ONAG.  This report describes thecompensation policies applicable to the Companies’ executive officers for thelast completed fiscal year.

 

Prior to completion of the E.ON-Powergen merger inJuly 2002, the former Remuneration Committee set base pay for 2002, establishedincentive targets and conducted administration of the Powergen Long-TermIncentive Plan (the “Powergen Long-Term Plan”) as applicable to LG&E and KUexecutive officers.  Thereafter, Dr.Vogg, in consultation with certain officers of E.ON AG, Powergen, LG&EEnergy, LG&E and KU (collectively, the “Compensation Group”), arrived atdecisions regarding the compensation of LG&E’s and KU’s executive officers,including the administration and determination of payments under the Short-TermIncentive Plan (the “Short-Term Plan”) as applicable to LG&E and KU.

 

The Companies’ executive compensation program and thetarget awards and opportunities for executives are designed to be competitivewith the compensation and pay programs of comparable companies, includingutilities, utility holding companies and companies in general industrynationwide. The executive compensation program has been developed andimplemented over time through consultation with, and upon the recommendationsof, recognized executive compensation consultants. The Compensation Group andthe Board of Directors have continued access to such consultants as desired,and are provided with independent compensation data for their review.

 

Set forth below is a report addressing LG&E’s andKU’s compensation policies during 2002 for their officers, including theexecutive officers named in the following tables. In many cases, the executiveofficers also serve in similar capacities for affiliates of LG&E and KU,including LG&E Energy. For each of the executive officers of LG&E andKU, the policies and amounts discussed below are for all services to LG&E,KU and their affiliates, during the relevant period.

 

**CompensationPhilosophy**

 

During 2002,LG&E’s and KU’s executive compensation program had three major components:(1) base salary; (2) short-term or annual incentives; and (3) long-termincentives. The Companies developed their executive compensation program tofocus on both short-term and long-term business objectives that are designed toenhance overall shareholder value. The short-term and long-term incentives werepremised on the belief that the interests of executives should be closelyaligned with those of the Companies’ shareholders. Based on this philosophy,these two portions of each executive’s total compensation package were linkedto the accomplishment of specific results that were designed to benefit the Companies’shareholders in both the short-term and long-term.

 

The executive compensation program also recognizedthat the Companies’ compensation practices must be competitive not only withutilities and utility holding companies, but also with companies in generalindustry to ensure that a stable and successful management team can berecruited and retained. As the Companies’ most direct competitors for executivetalent are not limited to the utilities, the various compensation peer groupsas discussed below, are not the same as the utility industry index in theComparison of Five-Year Total Return graph included in any applicable proxystatement.

 

Pursuant to this competitivemarket positioning philosophy, in establishing compensation levels for allexecutive positions for 2002, the former Remuneration Committee reviewedcompetitive compensation information for United States general industrycompanies with revenue of approximately $3 billion (the “Survey Group”) andestablished targeted total direct compensation (base salary plus short-termincentives and long-term incentives) for each executive for 2002 to generallyapproach the 50th percentile of the competitive range from the SurveyGroup.   Salaries, short-term incentivesand long-term incentives for 2002 are described below.  (The utilities and utility holding companiesthat were in the Survey Group were not necessarily the same as those in theStandard & Poor’s Utility Index used in the Company Performance Graph inany applicable proxy statement.)

 

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The 2002 compensation information set forth in othersections of this document, particularly with respect to the tabular informationpresented, reflects the considerations set forth in this report. The Base Salary,Short-Term Incentives, and Long-Term Incentives sections that follow addressthe compensation philosophy for 2002 for all executive officers except thoseserving as Chief Executive Officer. (See “Chief Executive OfficerCompensation”).

 

**Base Salary**

 

The base salaries for LG&E and KU executiveofficers for 2002 were designed to be competitive with the Survey Group atapproximately the 50th percentile of the base salary range for executives insimilar positions with companies in the Survey Group. Actual base salaries weredetermined based on individual performance and experience.

 

**Short-Term Incentives**

 

The Short-Term Plan provided for Company PerformanceAwards and Individual Performance Awards, each of which is expressed as apercentage of base salary and each of which is determined independent of theother. The former Remuneration Committee established the performance goals forthe Company Performance Awards and Individual Performance Awards at thebeginning of the 2002 performance year. Payment of Company Performance Awardsfor executive officers was based on varying performance measures tied to eachofficer’s responsible areas. These measures and goals included, among others,Powergen earnings per share targets, LG&E Energy operating profit targets andLG&E/KU operating profits targets The Committee retains discretion toadjust the measures and goals as deemed appropriate. Payment of IndividualPerformance Awards was based 100% on Management Effectiveness. As stated, theawards varied within the executive officer group based upon the nature of eachindividual’s functional responsibilities.

 

For 2002 the Company Performance Award targets fornamed executive officers ranged from 18% to 30% of base salary, and theIndividual Performance Award targets ranged from 12% to 20% of base salary.Both awards were established to be competitive with the 50th percentile of suchawards granted to comparable executives employed by companies in the SurveyGroup. The individual officers were eligible to receive from 0% to 175% oftheir targeted amounts, dependent upon Company performance as measured by therelevant performance goals, with regard to Company Performance Awards, and wereeligible to receive from 0% to 175% of their targeted amounts dependent uponindividual performance as measured by management effectiveness, with regard toIndividual Performance Awards.

 

Using the relevant Powergen, LG&E Energy,LG&E/KU and other subsidiaries’ performance against goals in 2002 andmaking adjustments for unusual financial events, including the continuedeconomic crisis in Argentina, certain accounting effects of the completion ofthe E.ON-Powergen merger and limited commitments regarding guaranteed levels ofbonus compensation for 2002 in connection with the E.ON-Powergen merger, theCompensation Group determined relative annual performance against targets forCompany Performance Awards. Based upon this determination, Company PerformanceAwards for 2002 to the named executive officers were paid ranging from 16% to34%, of base salary. Payouts for Individual Performance Awards to the namedexecutive officers ranged from 17% to 35%, of base salary.

 

**Long-Term Incentives**

 

Prior to July 2002, a Powergen Long-Term Plan wasadministered by the former Remuneration Committee. The Long-Term Plan providedfor the grant of any or all of the following types of awards: stock options,stock appreciation rights, restricted stock, performance units and performanceshares. In 2002, the former Remuneration Committee chose to award onlyperformance units to executive officers.

 

The former Remuneration Committee determined thecompetitive long-term grants to be awarded for each executive based on thelong-term awards for the 50th percentile of the Survey Group. The aggregateexpected value of the awards was intended to approach the expected value oflong-term incentives payable to executives in similar positions with companiesin the 50th percentile of the Survey Group, depending upon achievement oftargeted Company performance.

 

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Performance units were granted to executive officersand senior management during the first quarter of 2002.  The number of performance units granted wasdetermined by taking the amount of the executive’s long-term award to bedelivered in performance units, as determined above, and dividing that amountby the fair market value of Powergen American Depositary Shares (“ADS’s”) onthe date of the grant. The future value of the 2002 grants of performance unitswas substantially dependent upon the changing value of Powergen ADS’s in themarketplace as well as the anticipated accelerated payment of such performanceunits anticipated at the completion of the E.ON-Powergen merger during 2002.Each executive officer was entitled to receive from 0% to 150% of theperformance units contingently awarded to the executive based on corporateperformance measured in terms of the achievement of certain cash flow targetsby LG&E Energy during a three-year performance period.

 

No regular payoutsof awards under the Long-Term Plan occurred during 2002 as no three-yearperformance periods had been completed since the establishment of the plan inDecember 2000 following Powergen’s acquisition of LG&E Energy. However,pursuant to the change in control provisions of the Long-Term Plan, payouts ofthe two open performance period awards under the Long-Term Plan occurred inApril 2002 upon Powergen shareholder approval of the prospective E.ONtransaction. These payouts were based on the greater of LG&E Energy’sperformance through that time for each of the partially completed 2001-2003 and2002-2004 performance periods, respectively, or the award value on date ofgrant.  Based upon LG&E Energy’sperformance through the change in control date, payouts of performance unitswere made using their value as of grant date.

 

During 2002,certain executive officers of the Companies were invited to participate in theE.ON AG Stock Option Program (the “E.ON SAR Plan.”), Fourth Tranche(2002-2008), which is a stock appreciation rights plan   The E.ON SAR Plan is anticipated to be avehicle pursuant to which long-term incentives are provided to the Companies’executive officers.  For 2002, namedexecutive officers received initial grants under the E.ON SAR Plan as shown inthe Option/SAR Grants Table in this document. The grant amounts were established by the Compensation Group and variedper individual officer.

 

**Other**

 

In connection with the LG&E Energy-Powergenmerger, Messrs. Staffieri and McCall entered into employment and severanceagreements in exchange for waiver of potential rights under prior agreements.These agreements are discussed under “Employment Contracts and Termination ofEmployment Arrangements and Change in Control Provisions”. Following the changein control event relating to the Powergen shareholder approval of the E.ONtransaction, these officers received payments under these agreements, whichpayments are described in that section. In connection with the E.ON-Powergenmerger, Messrs. Staffieri and McCall entered into amendments to theiremployment and severance agreements in exchange for waiver of potential rightsunder their existing agreements. Certain of these payments are included in the “All Other Compensation”column in the Summary Compensation Table.

 

**Chief Executive Officer Compensation**

 

Mr. Victor A. Staffieri wasappointed Chief Executive Officer of LG&E and KU effective May 1, 2001. Mr.Staffieri’s compensation was governed by the terms of an Employment andSeverance Agreement entered into on February 25, 2000 as amended (includingupon his appointment as Chief Executive Officer) (the “2000 Agreement”). The2000 Agreement is for an initial term of two years commencing on December 11,2000, with automatic annual extensions thereafter unless the Companies or Mr.Staffieri give notice of non-renewal.

 

The 2000 Agreementestablished the minimum levels of Mr. Staffieri’s base compensation, althoughthe Chairman of E.ON AG retains discretion to increase such compensation. Inearly 2002, the former Remuneration Committee established Mr. Staffieri’scompensation and long-term awards using comparisons to relevant officers ofcompanies in the Survey Group, including utilities, and survey data fromvarious compensation consulting firms. Mr. Staffieri also received Companycontributions to the savings plan, similar to those of other officers andemployees. Details of Mr. Staffieri’s 2002 compensation are set forth below.

 

***Base Salary***.    Mr. Staffieri was paid a total base salary of **$**630,000during 2002, as provided in the 2000 Agreement, as amended. The formerRemuneration Committee, in determining Mr. Staffieri’s 2002 annual salary,

 

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including the minimum, considered his individual performance in the priorgrowth of LG&E Energy, the comparative compensation data described aboveand the compensation provided to other Powergen, LG&E Energy, LG&E andKU officers.

 

***Short-Term Incentives***.    Mr. Staffieri’s target short-termincentive award as Chief Executive Officer was 70% of his 2002 base salary. Aswith other executive officers receiving short-term incentive awards, Mr.Staffieri was eligible to receive more or less than the targeted amount, basedon Company performance and individual performance. His 2001 short-termincentive payouts were based 60% on achievement of Company Performance Awardtargets and 40% on achievement of Individual Performance Award targets.

 

For 2002, the Company Performance Award payout for Mr.Staffieri was 54% of his 2002 base salary and the Individual Performance Awardpayout was 49% of his 2002 base salary. Mr. Staffieri’s Company PerformanceAward targets were based on measures including Powergen’s corporate centreperformance goals and LG&E Energy operating profit goals and his CompanyPerformance Award was calculated based upon annual Company performance all asdescribed under the heading “Short-Term Incentives,” including adjustments forunusual financial events, such as the continued economic crisis in Argentinaand certain accounting effects of the completion of the E.ON-Powergenmerger.  In determining the IndividualPerformance Award, the Remuneration Committee considered Mr. Staffieri’seffectiveness in several areas including the financial and operationalperformance of LG&E Energy, LG&E, KU and other subsidiaries, customersatisfaction ratings, Company growth and other measures.

 

***Long-Term Incentive Grant***.    In 2002, Mr. Staffieri received 25,278performance units for the 2002-2004 performance period under the Powergen Long-TermPlan. These amounts were determined in accordance with the terms of his 2000Agreement, as amended, with expected value representing approximately 175% ofhis base salary. The terms of the performance units (including the manner inwhich performance units are earned) for Mr. Staffieri are the same as for otherexecutive officers, as described under the heading “Long-Term Incentives.”  During 2002, Mr. Staffieri also was invitedto participate in the E.ON SAR Plan and received an initial grant of 6,250stock appreciation rights in November 2002, under the same circumstances andupon the same terms as for other executive officers, as described under theheading “Long-Term Incentives.”

 

***Long-Term Incentive Payout***.    As with other executive officers, noregular payouts of awards under the Long-Term Plan occurred in 2002 as nothree-year performance periods had yet been completed.  As with other executive officers, pursuantto the change in control provisions of the Long-Term Plan, payouts of the twoopen performance period awards occurred in April 2002 upon Powergen shareholderapproval of the prospective E.ON transaction. Mr. Staffieri’s CompanyPerformance Awards were paid out at the value at grant date for the partiallycompleted 2001-2003 and 2002-2004 periods, as described under the heading“Long-Term Incentives.”

 

***Other***.    During 2002, under the terms of the 2000 Agreement, as amended,Mr. Staffieri became entitled to a retention payment upon completion of theE.ON-Powergen merger in the amount of **$**851,094. Additionally, Mr. Staffieri became entitled to certain premium paymentsin the amount of $262,835 and in the form of 9,722 Powergen ADS’s.  Mr. Staffieri also received a bonus inconnection with a 2002 amendment to his employment and severance agreement inthe amount of $800,570.

 

Members of the Companies’ Boards of Directors

 

Victor A. StaffieriMichael SoehlkeEdmund A. Wallis

 

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**EXECUTIVECOMPENSATION AND OTHER INFORMATION**

 

The following table shows the cash compensation paidor to be paid by LG&E, KU or LG&E Energy, as well as certain othercompensation paid or accrued for those years, to the Chief Executive Officerand the next four highest compensated executive officers of LG&E and KU whowere serving as such at December 31, 2002, as required, in all capacities inwhich they served LG&E Energy or its subsidiaries during 2000, 2001 and2002:

 

# **SUMMARYCOMPENSATION TABLE**

** **
|                                           |    |                    |   |              |   |                  |   | **Long-Term  Compensation** |   |        |   |
|------------------------------------------------|---------|-------------------------|--------|-------------------|--------|-----------------------|--------|-----------------------------|--------|-------------|--------|
|                                           |    |                    |   |              |   |                  |   | **Awards**                  |   | **Payouts** |   |   |   |
|                                           |    | **Annual Compensation** |   | **Other  Annual** |   | **Restricted  Stock** |   | **Securities  Underlying**  |   | **LTIP**    |   | **All Other  Compen-** |   |
|                                           |    |                    |   | **Salary**        |   | **Bonus**             |   | **Comp.**                   |   | **Awards**  |   | **Options/SAR** |   | **Payouts** |   | **Sation** |   |
| **Principal Position**                         |    | **Year**                |   | **($)**           |   | **($)**               |   | **($)**                     |   | **($) (1)** |   | **(#) (2)** |   | **($) (3)** |   | **($)** |   |
|                                           |    |                    |   |              |   |                  |   |                        |   |        |   |   |   |   |   |   |   |
| Victor A. Staffieri                            |    | 2002                    |   | 630,001           |   | 650,101               |   | 24,282                      |   | —      |   | 6,250 |   | 1,483,377 |   | 2,433,735 | (4) |
| Chairman of the Board,                         |    | 2001                    |   | 555,769           |   | 529,330               |   | 45,704                      |   | —      |   | 51,011 |   | 0 |   | 1,811,703 | (5) |
| President and Chief Executive Officer          |    | 2000                    |   | 460,000           |   | 388,277               |   | 24,247                      |   | 262,880     | (1)    | 90,000 |   | 1,051,694 |   | 640,160 |   |
|                                           |    |                    |   |              |   |                  |   |                        |   |        |   |   |   |   |   |   |   |
| John R. McCall                                 |    | 2002                    |   | 363,975           |   | 251,543               |   | 144,756                     | (6)    | —      |   | 3,611 |   | 401,580 |   | 1,390,557 | (4) |
| Executive Vice President,                      |    | 2001                    |   | 338,365           |   | 242,104               |   | 8,732                       |   | —      |   | 14,786 |   | 0 |   | 463,793 | (5) |
| General Counsel and Corporate Secretary        |    | 2000                    |   | 325,000           |   | 228,605               |   | 18,177                      |   | 172,028     | (1)    | 40,000 |   | 570,565 |   | 677,097 |   |
|                                           |    |                    |   |              |   |                  |   |                        |   |        |   |   |   |   |   |   |   |
| Richard Aitken-Davies                          |    | 2002                    |   | 273,336           | (7)    | 111,049               | (7)    | 369,300                     | (7)    | —      |   | 2,792 | (7) | — | (7) | 11,738 | (7) |
| Chief Financial Officer (7)                    |    | 2001                    |   | 229,490           |   | 102,735               |   | 319,910                     | (7)    | —      |   | — |   | — |   | — |   |
|                                           |    |                    |   |              |   |                  |   |                        |   |        |   |   |   |   |   |   |   |
| Paul W. Thompson                               |    | 2002                    |   | 262,497           |   | 147,944               |   | 8,106                       |   | —      |   | 2,604 |   | 290,000 |   | 440,486 | (4) |
| Senior Vice President - Energy Services        |    | 2001                    |   | 245,193           |   | 142,650               |   | 9,970                       |   | —      |   | 10,714 |   | 0 |   | 436,152 | (5) |
|                                           |    | 2000                    |   | 221,000           |   | 144,401               |   | 8,345                       |   | —      |   | 21,000 |   | 264,153 |   | 420,839 |   |
|                                           |    |                    |   |              |   |                  |   |                        |   |        |   |   |   |   |   |   |   |
| S. Bradford Rives                              |    | 2002                    |   | 280,019           |   | 180,145               |   | 6,616                       |   | —      |   | 2,877 |   | 204,450 |   | 486,491 | (4) |
| Senior Vice President - Finance and Controller |    | 2001                    |   | 235,000           |   | 131,342               |   | 6,595                       |   | —      |   | 7,554 |   | 0 |   | 390,335 | (5) |
| 2000                                           | 221,000 | 144,401                 | 9,095  | —            | 21,000 | 262,339               | 15,606 |                        |

 

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(1)                                  Amountshown represents the dollar value of restricted Powergen ADS awards, determinedby multiplying the number of ADSs in each award by the closing market price asof the effective date of the LG&E Energy-Powergen merger on December 11,2000.  Pursuant to the terms of thenamed executives’ employment agreements, the restricted Powergen ADS’s did notvest until the occurrence of the change in control event associated with thePowergen shareholders’ approval of the E.ON transaction in April 2002.  Dividends on the restricted ADS’s were payableupon vesting, without interest.  In July2002, upon completion of the E.ON-Powergen merger, all Powergen ADS, includingrestricted ADS’s, were exchanged for E.ON’s cash consideration amount,resulting in the following payments, including dollar amounts representingaccrued dividends, in respect of restricted ADS’s: Mr. Staffieri 7,688 ADS’s ($371,052) and Mr. McCall 5,032 ADS’s ($ 242,814).

 

(2)                                  Amountsfor year 2002 reflect E.ON SAR Plan grants. Amounts for year 2001 reflect options for Powergen ADS’s.  Amounts for year 2000 represent options forLG&E Energy common stock.

 

(3)                                  Noregular payouts under the Powergen Long-Term Plan were made during year 2002 asno three-year performance periods had yet been completed.  As described in the “Report onCompensation,” all open performance periods were accelerated during 2002 uponthe change in control event resulting from the Powergen shareholders’ approvalof the E.ON transaction.  Amounts foryear 2000 reflect acceleration of all open performance periods upon the changein control event as a result of the LG&E Energy-Powergen merger.

 

(4)                                  Includesemployer contributions to 401(k) plan, nonqualified thrift plan, employer paidlife insurance premiums, and retention payments in 2002 as follows: Mr.Staffieri $5,500, $29,780, $49,285 and $2,349,170, respectively;Mr. McCall $5,185, $13,707, $18,250 and $1,346,416 respectively; Mr.Thompson $4,288, $8,366, $1,906 and $425,926, respectively; and Mr. Rives,$4,076, $8,878, $892 and $87,746, respectively.  Additionally, Mr. Rives’ figure includes $384,898 in compensationrelating to retention to which he elected to defer.  The retention payments above are discussed in the “Report onCompensation” and “Termination of Employment Arrangements and Change in ControlProvisions”.

 

(5)                                  Includesretention payments in 2001 as follows: Mr. Staffieri,  $1,719,884, Mr. McCall, $423,524, Mr. Thompson, $405,860 andMr. Rives, $382,393, respectively.

 

(6)                                  Includesfinancial planning, automobile, spouse travel, dues, overseas compensation andtax payments in 2002 as follows: $2,000, $7,586, $50,589, $240, $36,398 and $48,143, respectively.

 

(7)                                  Mr.Aitken-Davies, on assignment in the U.S. as an officer of LG&E and KU, isan employee of Powergen and ultimately receives his salary, compensation andbenefits from Powergen.  He participatesin Powergen incentive, pension and benefit schemes and, except as described inthis document, does not generally participate in LG&E Energy, LG&E orKU plans. Amounts in “Other Annual Compensation” represent financial planning,automobile, travel or spouse travel, housing allowance, overseas compensation,cost-of-living and attributed income tax payments in 2002, as follows:  $4,641, $8,214, 13,066, $23,343, $75,061,$40,097, $5,744 and $199,129, respectively. Amount for 2001 includes attributed income tax payments in 2001 of223,373.  Attributed tax payments do notrepresent in-hand compensation to Mr. Aitken-Davies, but were paid to U.S.taxing authorities.  Amounts for “AllOther Compensation” represent immigration, cost-of-living and other payments in2002 as follows:  $3,725 and $8,013,respectively, related to his service.

 

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**OPTION/SAR GRANTS TABLE**

**Option/SAR Grants in 2002 Fiscal Year**

 

The following table contains information at December 31, 2002, withrespect to grants of E.ON AG stock appreciation rights (SAR’s) to the namedexecutive officers:

 
|                   |   | **Individual  Grants** |       |              |       |         |       |           |       | **Potential**            |       |       |       |
|------------------------|--------|------------------------|------------|-------------------|------------|--------------|------------|----------------|------------|--------------------------|------------|------------|------------|
|                   |   | **Number of**          |       | **Percent of**    |       |         |       |           |       | **Realizable  Value At** |       |       |       |
|                   |   | **Securities**         |       | **Total**         |       | **Exercise** |       |           |       | **Assumed  Annual**      |       |       |       |
|                   |   | **Underlying**         |       | **Options/SARs**  |       | **Or Base**  |       |           |       | **Rates of  Stock**      |       |       |       |
|                   |   | **Options/SARs**       |       | **Granted to**    |       | **Price**    |       |           |       | **Price  Appreciation**  |       |       |       |
|                   |   | **Granted**            |       | **Employees  in** |       | **($/**      |       | **Expiration** |       | **For Option  Term**     |       |       |       |
| **Name**               |   | **(#) (1)**            |       | **Fiscal  Year**  |       | **Share)**   |       | **Date**       |       | **0%($)**                |       | **5% ($)** |       | **10%($)** |   |
|                   |   |                   | ** ** |              | ** ** |         | ** ** |           | ** ** |                     | ** ** |       | ** ** |   | ** ** |
| Victor A.  Staffieri   |   | 6,250                  |       | 16.4              | %          | 49.660       |       | 12/31/2008     |       | 0                        |       | 126,354    |       | 294,458 |   |
| John R. McCall         |   | 3,611                  |       | 9.5               | %          | 49.660       |       | 12/31/2008     |       | 0                        |       | 73,002     |       | 170,126 |   |
| Richard  Aitken-Davies |   | 2,792                  |       | 7.3               | %          | 49.660       |       | 12/31/2008     |       | 0                        |       | 56,445     |       | 131,540 |   |
| Paul W. Thompson       |   | 2,608                  |       | 6.8               | %          | 49.660       |       | 12/31/2008     |       | 0                        |       | 52,644     |       | 122,683 |   |
| S. Bradford  Rives     |   | 2,877                  |       | 7.5               | %          | 49.660       |       | 12/31/2008     |       | 0                        |       | 58,163     |       | 135,545 |   |

 

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(1)          No Powergen ADS optionsor SAR’s were awarded during the 2002 fiscal year as grants under the PowergenLong-Term Plan were made 100% in performance units.  For 2002, the named executive officers received initial grants ofSAR’s under the E.ON SAR Plan as shown in the table above.

 

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**OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE**

**Aggregated Option/SAR Exercises in 2002 Fiscal Year**

**And FY-End Option/SAR Values**

 

The following table sets forth information with respect to the namedexecutive officers concerning the exercise or cash-exchange of Powergen ADSoptions and ordinary shares during 2002 and the value of unexercised E.ON SAR’sheld by them as of December 31, 2002:

 
| **Name**               |   | **Shares  Acquired  On Exercise (#)(1)** |   | **Value  Realized  ($)** |   | **Number of  Securities  Underlying  Unexercised  Options/SARs  at FY-End (#)(2)  Exercisable/Unexercisable** |   | **Value of  Unexercised  In-The-Money  Options/SARs at FY-End  ($)(  Exercisable/Unexercisable** |   |
|------------------------|--------|------------------------------------------|--------|--------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|
|                   |   |                                     |   |                     |   |                                                                                                          |   |                                                                                             |   |
| Victor A.  Staffieri   |   | 89,901                                   |   | 825,696                  |   | 0 / 6,250                                                                                                     |   | 0 / 0                                                                                            |   |
| John R. McCall         |   | 75,021                                   |   | 923,864                  |   | 0 / 3,611                                                                                                     |   | 0 / 0                                                                                            |   |
| Richard  Aitken-Davies |   | 69,500                                   |   | 305,184                  |   | 0 / 2,792                                                                                                     |   | 0 / 0                                                                                            |   |
| Paul W. Thompson       |   | 23,958                                   |   | 231,393                  |   | 0 / 2,604                                                                                                     |   | 0 / 0                                                                                            |   |
| S. Bradford  Rives     |   | 33,800                                   |   | 404,142                  |   | 0 / 2,877                                                                                                     |   | 0 / 0                                                                                            |   |

 

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(1)          Amounts shown arePowergen ADS’s, except for Mr. Aitken-Davies, where Powergen ordinary sharesare shown..  In July 2002, uponcompletion of the E.ON-Powergen acquisition, pursuant to E.ON’s acquisitionagreement and upon election by option holders, existing options were cancelledand option holders received payments equal to the difference between theexercise price and the 30.60 British pounds (**$**46.87) per ADS and 7.65British Pounds ($11.72) per ordinary share consideration paid by E.ON toPowergen shareholders.

 

(2)          Amounts shown are E.ONSAR’s.

 

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**LONG-TERM INCENTIVE PLAN AWARDS TABLE****Long-TermIncentive Plan Awards in 2002 Fiscal Year**

 

The following table provides information concerning awards ofperformance shares made in 2002 to the named executive officers under thePowergen Long-Term Plan.

 
|                   |   | **Number**     |       | **Performance  or** |       |                                                                                     |       |          |       |           |       |
|------------------------|--------|----------------|------------|---------------------|------------|------------------------------------------------------------------------------------------|------------|---------------|------------|----------------|------------|
|                   |   | **of Shares,** |       | **Other  Period**   |       | **Estimated  Future Payouts under  Non-Stock Price Based Plans  (number of shares) (1)** |       |
|                   |   | **Units or**   |       | **Until**           |       |                                                                                     |
|                   |   | **Other**      |       | **Maturation**      |       |                                                                                     |
| **Name**               |   | **Rights(1)**  |       | **Or Payout**       |       | **Threshold(#)**                                                                         |       | **Target(#)** |       | **Maximum(#)** |       |
|                   |   |           | ** ** |                | ** ** |                                                                                     | ** ** |          | ** ** |           | ** ** |
| Victor A.  Staffieri   |   | 25,278         |       | 12/31/2004          |       | 12,639                                                                                   |       | 25,278        |       | 37,917         |       |
| John R. McCall         |   | 6,676          |       | 12/31/2004          |       | 3,338                                                                                    |       | 6,676         |       | 10,014         |       |
| Richard  Aitken-Davies |   | 24,375         |       | 12/31//2004         |       | 8,631                                                                                    |       | 24,375        |       | 53,552         |       |
| Paul W. Thompson       |   | 4,814          |       | 12/31/2004          |       | 2,407                                                                                    |       | 4,814         |       | 7,221          |       |
| S. Bradford  Rives     |   | 3,394          |       | 12/31/2004          |       | 1,697                                                                                    |       | 3,394         |       | 5,091          |       |

 

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(1)            Except for Mr.Aitken-Davies, amounts shown are awards of Powergen performance units under thePowergen Long-Term Plan during 2002. For Mr. Aitken-Davies, figures shown are performance shares under thePowergen UK Long Tem Incentive Plan. Pursuant to the terms of the plans, the performance periods shown andall performance share grants were accelerated upon the change in controlresulting from Powergen shareholder approval of the E.ON transaction and werepaid in cash during April 2002.

 

Each performance unit awarded under the PowergenLong-Term Plan represented the right to receive an amount payable in PowergenADS’s and/or cash on the date of payout, the latter portion being payable incash in order to facilitate the payment of taxes by the recipient. The amountof the payout was to be determined by the then-fair market value of PowergenADS’s. For awards made in 2002, the Powergen Long-Term Plan awards wereintended to reward executives on a three-year rolling basis dependent upon theachievement of certain cash flow targets by LG&E Energy, taking intoaccount, however, the anticipated acceleration of such awards upon completionof the E.ON-Powergen acquisition during 2002. As a result of the change in control event resulting from Powergenshareholder approval of the E.ON transaction, awards were accelerated and paidout in April 2002 based upon value on grant date. Payments made under theLong-Term Plan in 2002 are reported in the summary compensation table for theyear of payout.

 

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**PensionPlans**

 

The following table shows the estimated pensionbenefits payable to a covered participant at normal retirement age underLG&E Energy’s qualified defined benefit pension plans, as well asnon-qualified supplemental pension plans that provide benefits that wouldotherwise be denied participants by reason of certain Internal Revenue Codelimitations for qualified plan benefits, based on the remuneration that iscovered under the plan and years of service with LG&E Energy and itssubsidiaries:

 

**2002PENSION PLAN TABLE**

 

 

|             |      | **Years of  Service** |   |      |   |
|------------------|-----------|-----------------------|--------|-----------|--------|
| **Remuneration** |      | **15**                |   | **20**    |   | **25** |   | **30 or more** |   |
|             |      |                  |   |      |   |   |   |   |   |
| $                | 100,000   |                  | $      | 44,080    |   | $ | 44,080 |   | $ | 44,080 |   | $ | 44,080 |   |
| $                | 200,000   |                  | $      | 108,080   |   | $ | 108,080 |   | $ | 108,080 |   | $ | 108,080 |   |
| $                | 300,000   |                  | $      | 172,080   |   | $ | 172,080 |   | $ | 172,080 |   | $ | 172,080 |   |
| $                | 400,000   |                  | $      | 236,080   |   | $ | 236,080 |   | $ | 236,080 |   | $ | 236,080 |   |
| $                | 500,000   |                  | $      | 300,080   |   | $ | 300,080 |   | $ | 300,080 |   | $ | 300,080 |   |
| $                | 600,000   |                  | $      | 364,080   |   | $ | 364,080 |   | $ | 364,080 |   | $ | 364,080 |   |
| $                | 700,000   |                  | $      | 428,080   |   | $ | 428,080 |   | $ | 428,080 |   | $ | 428,080 |   |
| $                | 800,000   |                  | $      | 492,080   |   | $ | 492,080 |   | $ | 492,080 |   | $ | 492,080 |   |
| $                | 900,000   |                  | $      | 556,080   |   | $ | 556,080 |   | $ | 556,080 |   | $ | 556,080 |   |
| $                | 1,000,000 |                  | $      | 620,080   |   | $ | 620,080 |   | $ | 620,080 |   | $ | 620,080 |   |
| $                | 1,100,000 |                  | $      | 684,080   |   | $ | 684,080 |   | $ | 684,080 |   | $ | 684,080 |   |
| $                | 1,200,000 |                  | $      | 748,080   |   | $ | 748,080 |   | $ | 748,080 |   | $ | 748,080 |   |
| $                | 1,300,000 |                  | $      | 812,080   |   | $ | 812,080 |   | $ | 812,080 |   | $ | 812,080 |   |
| $                | 1,400,000 |                  | $      | 876,080   |   | $ | 876,080 |   | $ | 876,080 |   | $ | 876,080 |   |
| $                | 1,500,000 |                  | $      | 940,080   |   | $ | 940,080 |   | $ | 940,080 |   | $ | 940,080 |   |
| $                | 1,600,000 |                  | $      | 1,004,080 |   | $ | 1,004,080 |   | $ | 1,004,080 |   | $ | 1,004,080 |   |
| $                | 1,700,000 |                  | $      | 1,068,080 |   | $ | 1,068,080 |   | $ | 1,068,080 |   | $ | 1,068,080 |   |

 

A participant’s remuneration covered by the RetirementIncome Plan (the “Retirement Income Plan”) is his or her average base salaryand short-term incentive payment (as reported in the Summary CompensationTable) for the five calendar plan years during the last ten years of theparticipant’s career for which such average is the highest. The years ofservice for each named executive employed by LG&E Energy at December 31,2002 was as follows: 10 years for Mr. Staffieri; 8 years for Mr. McCall; 11years for Mr. Thompson, and 19 years for Mr. Rives. Benefits shown are computedas a straight life single annuity beginning at age 65.

 

Current Federal law prohibits paying benefits underthe Retirement Income Plan in excess of **$**160,000 per year. Officers of LG&EEnergy, LG&E and KU with at least one year of service with any company areeligible to participate in LG&E Energy’s Supplemental Executive RetirementPlan (the “Supplemental Executive Retirement Plan”), which is an unfunded supplementalplan that is not subject to the **$**160,000 limit. Presently, participants inthe Supplemental Executive Retirement Plan consist of all of the eligibleofficers of LG&E Energy, LG&E and KU. This plan provides generally forretirement benefits equal to 64% of average current earnings during the highest36 months prior to retirement, reduced by Social Security benefits, by amountsreceived under the Retirement Income Plan and by benefits from other employers.As with all other officers, Mr. Staffieri participates in the SupplementalExecutive Retirement Plan described above.

 

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Estimated annual benefits to be received under theRetirement Income Plan and the Supplemental Executive Retirement Plan uponnormal retirement at age 65 and after deduction of Social Security benefitswill be $596,667 for Mr.Staffieri; $324,396 for Mr.McCall; $227,639 for Mr.Thompson; and $224,856 for Mr.Rives.  Mr. Aitken-Davies is eligibleand participates in retirement or pension schemes provided by his employerPowergen or by the national government in the U.K. and does not participate inLG&E Energy pension plans or supplemental plans.

 

**EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT**

**ARRANGEMENTS AND CHANGE IN CONTROL PROVISIONS**

 

In connection with the E.ON-Powergen merger, Messrs.Staffieri and McCall entered into amendments to their employment and severanceagreements.  The original agreements,effective upon the LG&E Energy-Powergen merger for two year terms, containedchange in control provisions and the benefits described below.  Pursuant to these agreements,  upon Powergen shareholder approval of theE.ON-Powergen merger. Messrs. Staffieri and McCall received retention payments,including interest, of $851,094 and $501,145, respectively,  cash premium payments of **$**262,835and **$**172,028,respectively,  and the restrictedPowergen ADS’s and dividends, all as described in the Summary CompensationTable.  Also, upon this change incontrol event, pursuant to the Powergen Long-Term Plan, outstanding performanceunits were paid out in cash.

 

In the event of termination of employment for reasonsother than cause, disability or death, or for good reason, Mr. Staffieri shallbe entitled to a severance amount equal to 2 times the sum of (1) his annualbase salary and (2) his bonus or “target” award paid or payable, or, if within24 months after a change in control event, 2.99 times the sum of (1) and(2).  In the event of termination ofemployment for reasons other than cause, disability or death, or for goodreason, Mr. McCall shall be entitled to a severance amount equal to the sum of(1) his annual base salary and (2) his bonus or “target” award paid or payable,or, if within 48 months of the date of the E.ON-Powergen merger, 2.99 times thesum of (1) and (2).

 

In 2002, Messrs. Thompsonand Rives became entitled to receive scheduled retention payments, includinginterest, of $425,926 and $355,078, respectively, pursuant to the terms ofretention agreements entered into at the time of the Powergen-LG&E Energymerger.  During 2002, in connection withthe E.ON-Powergen merger, Messrs. Thompson and Rives entered into new retentionagreements under which these officers will be entitled to a payment equal tothe sum of (1) his annual base salary and (2) his annual bonus or “target”award, in the event of their continued employment through the secondanniversary of the E.ON-Powergen merger. Messrs. Thompson and Rives have also entered into change of controlagreements which provide that, in the event of termination of employment forreasons other than cause, disability or death, or for good reason following achange in control, these officers shall be entitled to a severance amount equalto 2.99 times the sum of (1) his annual base salary and (2) his bonus or“target” award paid or payable.

 

Pursuant to the employment and change in controlagreements, payments may be made to executives which would equal or exceed anamount which would constitute a nondeductible payment pursuant to Section 280Gof the Code, if any. Additionally, executives receive continuation of certainwelfare benefits and payments in respect of accrued but unused vacation daysand for out-placement assistance. A change in control encompasses certainmerger and acquisition events, changes in board membership and acquisitions ofvoting securities.

 

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