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                                                                  Exhibit 10.108

                 POWERGEN LONG-TERM INCENTIVE PLAN - ROGER HALE



                           EFFECTIVE 11 DECEMBER 2000



                 ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION

         1.1. ESTABLISHMENT OF THE PLAN. Powergen plc (hereinafter referred to
as the "Parent"), an English public limited company establishes as of the date
set forth above the Powergen Long-Term Incentive Plan - Roger Hale (hereinafter
referred to as the "Plan"), which permits the grant of Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Units and
Performance Shares to Roger Hale (the "Participant"). The Plan was approved by
the Board of Directors of the Parent on 7 December 2000.



         1.2. PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success of the Parent, LG&E Energy Corp. (hereinafter referred to as the
"Company") and their Subsidiaries by providing incentives to the Participant
that will link his personal interests to the long-term financial success of the
Parent and its Subsidiaries and to growth in shareholder value. The Plan is
designed to provide flexibility to the Parent and the Company in their ability
to motivate, and retain the services of, the Participant.



         1.3. DURATION OF THE PLAN. The Plan commenced on 11 December 2000, as
described in Section 1.1 herein. The Plan shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 13 herein, until all Shares subject to it shall have been purchased or
acquired according to the provisions herein.



                     ARTICLE 2. DEFINITIONS AND CONSTRUCTION



         2.1. DEFINITIONS. Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:


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         (a)      "Award" means, individually or collectively, a grant under
                  this Plan of Nonqualified Stock Options, Stock Appreciation
                  Rights, Restricted Stock, Performance Units, or Performance
                  Shares.

         (b)      "Beneficial Owner" shall have the meaning ascribed to such
                  term in Rule 13d-3 of the General Rules and Regulations under
                  the Exchange Act.

         (c)      "Board" or "Board of Directors" means the Board of Directors
                  of the Parent.

         (d)      "Cause" shall mean the occurrence of any one of the following:

                  (i)      The wilful and continued failure by the Participant
                           to substantially perform his duties (other than any
                           such failure resulting from the Participant's
                           disability), after a written demand for substantial
                           performance is delivered to the Participant that
                           specifically identifies the manner in which the
                           Parent or any of its Subsidiaries, as the case may
                           be, believes that the Participant has not
                           substantially performed his duties, and the
                           Participant has failed to remedy the situation within
                           ten (10) business days of receiving such notice; or

                  (ii)     the Participant's conviction for committing a felony
                           in connection with the employment relationship; or

                  (iii)    the wilful engaging by the Participant in gross
                           misconduct materially and demonstrably injurious to
                           the Parent or any of its Subsidiaries. However, no
                           act, or failure to act, on the Participant's part
                           shall be considered "willful" unless done, or omitted
                           to be done, by the Participant not in good faith and
                           without reasonable belief that his action or omission
                           was in the best interest of the Company or any of its
                           Subsidiaries.

         (e)      "Change in Control" shall be deemed to have occurred if the
                  conditions set forth in any one of the following paragraphs
                  shall have been satisfied:

                  (i)      An acquisition (other than directly from the Parent)
                           of any securities of the Parent entitled generally to
                           vote on the election of directors (the "Voting
                           Stock") by any "Person" (as the term person is used
                           for purposes of Section 13(d) or 14(d) of the
                           Securities Exchange Act of 1934, as amended (the
                           "1934 Act")) immediately after which such Person has
                           "Beneficial Ownership" (within the meaning of Rule
                           13d-3 promulgated under the 1934 Act) of fifteen
                           percent (15%) or more of the combined voting power of
                           the Parent's then outstanding Voting Stock; PROVIDED,
                           HOWEVER, in determining whether a Change in Control
                           has occurred, Voting Stock which is acquired in a
                           "Non-Control Acquisition" (as hereinafter defined)
                           shall not constitute


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                           an acquisition which would cause a Change in Control.
                           A "Non-Control Acquisition" shall mean an acquisition
                           by (1) an employee benefit plan (or a trust forming a
                           part thereof) maintained by (a) the Parent or (b) any
                           corporation or other Person of which a majority of
                           its voting power or its equity securities or equity
                           interest is owned directly and indirectly by the
                           Parent (a "Subsidiary") or (2) the Parent or any
                           Subsidiary.

                  (ii)     The individuals who, as of the date this Agreement
                           was approved by the Board, are members of the Board
                           (the "Incumbent Board"), cease for any reason to
                           constitute at least two-thirds of the Board;
                           provided, however, that if the election, or
                           nomination for election by the Parent's stockholders,
                           of any new director was approved by a vote of at
                           least two-thirds of the Incumbent Board, such new
                           director shall, for purposes of the Agreement, be
                           considered as a member of the Incumbent Board; or

                  (iii)    Approval by stockholders of the Parent of:

                           (a)      A merger, consolidation or reorganization
                                    involving the Parent; unless

                                    (1)      the stockholders of the Parent
                                             immediately before such merger,
                                             consolidation or reorganization,
                                             own, directly or indirectly
                                             immediately following such merger,
                                             consolidation or reorganization, at
                                             least seventy-five percent (75%) of
                                             the combined voting power of the
                                             outstanding voting securities of
                                             the corporation resulting from such
                                             merger or consolidation or
                                             reorganization (the "Surviving
                                             Corporation") in substantially the
                                             same proportion to each other as
                                             their ownership of the Voting
                                             Securities immediately before such
                                             merger, consolidation or
                                             reorganization, and

                                    (2)      the individuals who were members of
                                             the Incumbent Board immediately
                                             prior to the execution of the
                                             agreement providing for such
                                             merger, consolidation or
                                             reorganization constitute at least
                                             two-thirds of the members of the
                                             board of directors of the Surviving
                                             Corporation;

                           (b)      A complete liquidation or dissolution of the
                                    Parent or the Company ; unless, in the case
                                    of the Company, the Parent continues to own
                                    directly or indirectly all or substantially
                                    all of the Company's assets;


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                  (c)      An agreement for the sale or other disposition of all
                           or substantially all of the assets of the Parent or
                           the Company to any Person (other than a transfer to a
                           Subsidiary);

                  (d)      A merger or other combination involving the Company
                           as a result of which the Parent ceases to
                           beneficially own more than 50% of the outstanding
                           Voting Stock of the successor to the Company, unless
                           the Parent continues to own directly or indirectly
                           all or substantially all of the Company's assets; or

                  (e)      Any Person acquires Beneficial Ownership of a greater
                           percentage of the Voting Stock of the Company than
                           the percentage of such Voting Stock then held,
                           directly or indirectly, by the Parent.

         Notwithstanding the foregoing clauses, a Change in Control shall not be
         deemed to occur solely because any Person (the "Subject Person")
         acquired Beneficial Ownership of more than the permitted amount of the
         outstanding Voting Stock as a result of the acquisition of Voting Stock
         by the Parent which, by reducing the number of Voting Stock
         outstanding, increases the proportional number of shares Beneficially
         Owned by the Subject Person, provided that if a Change in Control would
         occur (but for the operation of this sentence) as a result of the
         acquisition of Voting Stock by the Parent, and after such share
         acquisition by the Parent, the Subject Person or entity becomes the
         Beneficial Owner of any additional Voting Stock which increases the
         percentage of the then outstanding Voting Stock Beneficially Owned by
         the Subject Person, then a Change in Control shall occur.

                  (f)      [INTENTIONALLY BLANK]

                  (g)      "Committee" means the committee appointed by the
                           Board to administer the Plan pursuant to Article 3
                           herein.

                  (h)      "Company" means LG&E Energy Corp., a Kentucky
                           corporation, or any successor thereto as provided in
                           Article 15 herein.

                  (i)      "Converted Options" means those options granted
                           pursuant to the terms of the merger agreement between
                           LG&E Energy Corp. and the Parent and pursuant to
                           Section 6.11 herein.

                  (j)      "Exchange Act" means the Securities Exchange Act of
                           1934, as amended from time to time.

                  (k)      "Fair Market Value" means the average of the highest
                           price and lowest price at which the Stock was traded
                           on the relevant date, or on the most recent date on
                           which the Stock was traded prior to such date, as
                           reported on the composite tape of the New York Stock
                           Exchange.


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                  (l)      [INTENTIONALLY BLANK]

                  (m)      [INTENTIONALLY BLANK]

                  (n)      "Nonqualified Stock Option" or "NQSO" means an option
                           to purchase Stock, granted under Article 6 herein,
                           which is not intended to be an Incentive Stock
                           Option.

                  (o)      "Option" means a Nonqualified Stock Option.

                  (p)      "the Parent" means Powergen plc an English public
                           limited company, or any successor thereto as provided
                           in Article 15 herein.

                  (q)      "Participant" means Roger Hale.

                  (r)      "Performance Share" means an Award, designated as a
                           performance share, granted to a Participant pursuant
                           to Article 9 herein.

                  (s)      "Performance Unit" means an Award, designated as a
                           performance unit, granted to a Participant pursuant
                           to Article 9 herein.

                  (t)      "Period of Restriction" means the period during which
                           the transfer of Shares of Restricted Stock is
                           restricted, during which the Participant is subject
                           to a substantial risk of forfeiture, pursuant to
                           Article 8 herein.

                  (u)      "Person" shall have the meaning ascribed to such term
                           in Section 3(a)(9) of the Exchange Act and used in
                           Sections 13(d) and 14(d) thereof, including a "group"
                           as defined in Section 13(d) thereof.

                  (v)      "Plan" means this Powergen Long-Term Incentive Plan -
                           Roger Hale, as herein described and as hereafter from
                           time to time amended.

                  (w)      "Restricted Stock" means an Award of Stock granted to
                           a Participant pursuant to Article 8 herein.

                  (x)      "Subsidiary" shall mean any corporation of which more
                           than 50% (by number of votes) of the Voting Stock at
                           the time outstanding is owned, directly or
                           indirectly, by the Parent.

                  (y)      "Stock" or "Shares" means the ordinary shares of 50p
                           each in the capital of the Parent.

                  (z)      "Stock Appreciation Right" or "SAR" means an Award,
                           designated as a Stock appreciation right, granted to
                           a Participant pursuant to Article 7 herein.


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                           (aa)     "Voting Stock" shall mean securities of any
                                    class or classes of stock of a corporation,
                                    the holders of which are ordinarily, in the
                                    absence of contingencies, entitled to elect
                                    a majority of the corporate directors.

         2.2. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.



         2.3. SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.



                            ARTICLE 3. ADMINISTRATION



         3.1. THE COMMITTEE. The Plan shall be administered by the Remuneration
Committee of the Board of the Parent (the "Committee") or such delegatees as
permitted by law and Article 3.5 delegated by the Committee to administer the
Plan. To the extent required to comply with Rule 16b-3 under the Exchange Act,
each member of the Committee and any delegates shall qualify as a "disinterested
person" as defined in Rule 16b-3 or any successor definition adopted by the
Securities and Exchange Commission.



         3.2. AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan,
the Committee and any delegates shall have full power to construe and interpret
the Plan; to establish, amend or waive rules and regulations for its
administration; to accelerate the exercisability of any Award or the end of a
performance period or the termination of any Period of Restriction or any award
agreement, or any other instrument relating to an Award under the Plan; and
(subject to the provisions of Article 13 herein) to amend the terms and
conditions of any outstanding Option, Stock Appreciation Right or other Award to
the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Also notwithstanding the foregoing, no action of the
Committee (other than pursuant to Section 4.3 hereof or Section 9.4 hereof) may,
without the consent of the person or persons entitled to exercise any
outstanding Option or Stock Appreciation Right or to receive payment of any
other outstanding Award, adversely affect the rights of such person or persons.



         3.3. GRANT OF AWARDS TO PARTICIPANT. The Committee shall have the
authority to grant Awards under the Plan, from time to time, to the Participant
but shall be under no obligation to do so (even if the Participant has
previously been granted an Award).


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         3.4. DECISIONS BINDING. All determinations and decisions made by the
Committee and any delegates pursuant to the provisions of the Plan and all
related orders or resolutions of the Board of Directors shall be final,
conclusive and binding on all persons, including the Company and its
Subsidiaries, its shareholders, employees, and Participants and their estates
and beneficiaries, and such determinations and decisions shall not be
reviewable.



         3.5. NO POWER TO DELEGATE RESPONSIBILITIES. The Committee may not
delegate to an officer or officers of the Parent or the Company or any other
person the administration of the Plan under this Article 3.



         3.6. PROCEDURES OF THE COMMITTEE. All determinations of the Committee
or any delegates shall be made by not less than a majority of members present at
any meeting (in person or otherwise) at which a quorum is present. A majority of
the entire Committee or the number of delegates at a given time shall constitute
a quorum for the transaction of business. Any action required or permitted to be
taken at a meeting of the Committee or the delegates may be taken without a
meeting if a unanimous written consent, which sets forth the action, is signed
by each member of the Committee and filed with the minutes for proceedings of
the Committee or delegates.



         3.7. AWARD AGREEMENTS. Each Award under the Plan shall be evidenced by
an award agreement which shall be signed by an authorized officer of the Parent
and by the Participant, and shall contain such terms and conditions as may be
approved by the Committee or the delegates. Such terms and conditions need not
be the same in all cases.



         3.8. RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of
the Plan, the Board or the Committee may impose such conditions on any Award
(including, without limitation, the right of the Board or the Committee to limit
the time of exercise to specified periods) as may be required to satisfy the
requirements of Rule 16b-3 (or any successor rule), under the Exchange Act
("Rule 16b-3").



         Notwithstanding any other provisions of the Plan, all Awards under this
Plan shall be subject to the following conditions, as and to the extent required
by Rule 16b-3:

                  (i)      Except in the case of disability or death, no SAR,
                           NQSO or other option granted pursuant to Article 6
                           shall be exercisable for at least six months after
                           its grant; and


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                  (ii)     Except in the case of disability or death, no
                           Restricted Stock, Performance Unit or Performance
                           Share (or a Share issued in payment thereof) shall be
                           sold for at least six months after its acquisition.

                      ARTICLE 4. STOCK SUBJECT TO THE PLAN

         4.1. NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3
herein, the aggregate number of Shares that may be delivered under the Plan at
any time shall not exceed 4,000,000 Shares. No more than one-half of such
aggregate number of such Shares shall be transferred as Restricted Stock under
Article 8 of the Plan. No new Shares may be issued for the purposes of the Plan.
The exercise of a Stock Appreciation Right, whether paid in cash or Stock, shall
be deemed to be an issuance of Stock under the Plan. The payment of Performance
Shares or Performance Units shall not be deemed to constitute an issuance of
Stock under the Plan unless payment is made in Stock, in which case only the
number of Shares issued in payment of the Performance Share or Performance Unit
Award shall constitute an issuance of Stock under the Plan.



         4.2. LAPSED AWARDS. If any Award (other than Restricted Stock) granted
under this Plan terminates, expires, or lapses for any reason, any Stock subject
to such Award again shall be available for the grant of an Award under the Plan,
subject to Section 7.2 herein.



         4.3. ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, Stock
dividend, split-up, share combination, or other change in the corporate
structure of the Parent affecting the Stock, such adjustment shall be made in
the number and class of shares which may be delivered under the Plan, and in the
number and class of and/or price of shares subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares, and
Performance Units granted under the Plan, as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of shares subject to any
Award shall always be a whole number.


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                             ARTICLE 5. ELIGIBILITY



         5.1. ELIGIBILITY. Only the Participant is eligible to receive Awards
under the Plan.



                            ARTICLE 6. STOCK OPTIONS



         6.1. GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to the Participant at any time and from time to time as
shall be determined by the Committee. The maximum number of Shares subject to
Options granted to any individual Participant in any calendar year shall be one
million (1,000,000) Shares. The Committee shall have the sole discretion,
subject to the requirements of the Plan, to determine the actual number of
Shares subject to Options granted to any Participant. The Committee may grant
any type of Option to purchase Stock that is permitted by law at the time of
grant including, but not limited to, NQSOs. Nothing in this Article 6 shall be
deemed to prevent the grant of NQSOs in excess of the maximum established by
Section 422 of the Code. Unless otherwise expressly provided at the time of
grant, Options granted under the Plan will be NQSOs.



         6.2. OPTION AGREEMENT. Each Option grant shall be evidenced by an
Option agreement that shall specify the type of Option granted, the Option
price, the duration of the Option, the number of Shares to which the Option
pertains, and such other provisions as the Committee shall determine. The Option
agreement shall specify whether the Option is a Nonqualified Stock Option whose
grant is not intended to be subject to the provisions of Code Section 422.



         6.3. OPTION PRICE. The purchase price per share of Stock covered by an
Option shall be determined by the Committee but shall not be less than 100% of
the Fair Market Value of such Stock at the time the option is granted.



         6.4. DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant.



         6.5. EXERCISE OF OPTIONS. Subject to Section 3.8 herein, Options
granted under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve.


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         6.6. PAYMENT. Options shall be exercised by the delivery of a written
notice to the Company setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the Shares. The
Option price upon exercise of any Option shall be payable to the Company in full
either (a) in cash or its equivalent, (b) by tendering shares of previously
acquired Stock having a Fair Market Value at the time of exercise equal to the
total Option price, (c) by foregoing compensation under rules established by the
Committee, or (d) by a combination of (a), (b), or (c). The proceeds from such a
payment shall be added to the general funds of the Company and shall be used for
general corporate purposes. As soon as practicable, after receipt of written
notification and payment, the Company shall deliver to the Participant Stock
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.



         6.7. RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable securities law, under the requirements of any
stock exchange upon which such Shares are then listed.



         6.8. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
In the event the employment of the Participant is terminated by reason of death,
any of the Participant's outstanding Options shall become immediately
exercisable at any time prior to the expiration date of the Options or within
one year after such date of termination of employment, whichever period is
shorter, by such person or persons as shall have acquired the Participant's
rights under the Option pursuant to Article 10 hereof or by will or by the laws
of descent and distribution. In the event the employment of the Participant is
terminated by reason of disability (as defined under the then established rules
of the Company or any of its Subsidiaries, as the case may be), any of the
Participant's outstanding Options shall become immediately exercisable, at any
time prior to the expiration date of the Options or within one year after such
date of termination of employment, whichever period is shorter. In the event the
employment of the Participant is terminated by reason of retirement, any of such
Participant's outstanding Options shall become immediately exercisable (subject
to Section 3.8 herein) at any time prior to the expiration date of the Options.



         6.9. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of
the Participant shall terminate for any reason other than death, disability,
retirement or for Cause, the Participant shall have the right to exercise the
Participant's outstanding Options within the 90 days after the date of his
termination, but in no event beyond the expiration of the term of the Options
and only to the extent that the Participant was entitled to exercise the Options
at the date of his termination of employment. In its sole discretion, the
Committee may extend the 90 days to up to one year but, however, in no event
beyond the expiration date of the Option.


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         If the employment of the Participant shall terminate for Cause, all of
the Participant's outstanding Options shall be immediately forfeited back to the
Company.



         6.10. NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution.
Further, all Options granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.



                      ARTICLE 7. STOCK APPRECIATION RIGHTS



         7.1. GRANT OF STOCK APPRECIATION RIGHTS. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to the
Participant, at the discretion of the Committee, in any of the following forms:

         (a)      In lieu of Options;

         (b)      In addition to Options;

         (c)      Independent of Options; or

         (d)      In any combination of (a), (b), or (c).

The maximum numbers of Shares subject to SARs granted to the Participant in any
calendar year shall be one million (1,000,000) Shares. Subject to the
immediately preceding sentence, the Committee shall have the sole discretion,
subject to the requirements of the Plan, to determine the actual number of
Shares subject to SARs granted to the Participant.



         7.2. EXERCISE OF SARS IN LIEU OF OPTIONS. SARs granted in lieu of
Options may be exercised for all or part of the Shares subject to the related
Option upon the surrender of the related Options representing the right to
purchase an equivalent number of Shares. The SAR may be exercised only with
respect to the Shares of Stock for which its related Option is then exercisable.
Option Stock with respect to which the SAR shall have been exercised may not be
subject again to an Award under the Plan.



         7.3. EXERCISE OF SARS IN ADDITION TO OPTIONS. SARs granted in addition
to Options shall be deemed to be exercised upon the exercise of the related
Options. The deemed exercise of SARs granted in addition to Options shall not
necessitate a reduction in the number of related Options.


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         7.4. EXERCISE OF SARS INDEPENDENT OF OPTIONS. Subject to Section 3.8
herein and Section 7.5 herein, SARs granted independently of Options may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon the SARs, including, but not limited to, a
corresponding proportional reduction in previously granted Options.



         7.5. PAYMENT OF SAR AMOUNT. Upon exercise of the SAR, the holder shall
be entitled to receive payment of an amount determined by multiplying:

         (a)      The difference between the Fair Market Value of a Share on the
                  date of exercise over the price fixed by the Committee at the
                  date of grant (which price shall not be less than 100% of the
                  market price of a Share on the date of grant) ("the Exercise
                  Price"); by

         (b)      The number of Shares with respect to which the SAR is
                  exercised.



         7.6. FORM AND TIMING OF PAYMENT. Payment to a Participant, upon SAR
exercise, will be made in cash or stock, at the discretion of the Committee,
within ten calendar days of the exercise.



         7.7. TERM OF SAR. The term of an SAR granted under the Plan shall not
exceed ten years.



         7.8. TERMINATION OF EMPLOYMENT. In the event the employment of a
Participant is terminated by reason of death, disability, retirement, or any
other reason, the exercisability of any outstanding SAR granted in lieu of or in
addition to an Option shall terminate in the same manner as its related Option
as specified under Sections 6.8 and 6.9 herein. The exercisability of any
outstanding SARs granted independent of Options also shall terminate in the
manner provided under Sections 6.8 and 6.9 hereof.



         7.9. NONTRANSFERABILITY OF SARS. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to the Participant under the Plan shall be exercisable during his
lifetime only by the Participant.


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                           ARTICLE 8. RESTRICTED STOCK



         8.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock under the Plan to the Participant in such amounts and subject
to such conditions as it shall determine. It is contemplated that Restricted
Stock grants will be made only in extraordinary situations of performance,
promotion, retention, or recruitment.



         8.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or periods, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.



         8.3. TRANSFERABILITY. Except as provided in this Article 8 or in
Section 3.8 herein, the Shares of Restricted Stock granted hereunder may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the termination of the applicable Period of Restriction or for such period
of time as shall be established by the Committee and as shall be specified in
the Restricted Stock Agreement, or upon earlier satisfaction of other conditions
(including any performance goals) as specified by the Committee in its sole
discretion and set forth in the Restricted Stock Agreement. All rights with
respect to the Restricted Stock granted to the Participant under the Plan shall
be exercisable during his lifetime only by such Participant.



         8.4. OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable securities laws, and the Committee may legend certificates
representing Restricted Stock to give appropriate notice of such restrictions.



         8.5. CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 8.4 herein, each certificate representing
Shares of Restricted Stock granted pursuant to the Plan shall bear the following
legend:

         "The sale or other transfer of the shares of stock represented by this
         certificate, whether voluntary, involuntary, or by operation of law, is
         subject to certain restrictions on transfer set forth in the Powergen
         Long-Term Incentive Plan - Roger Hale, in the rules and administrative
         procedures adopted pursuant to such Plan, and in a Restricted Stock
         Agreement dated __________. A copy of the Plan,


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         such rules and procedures, and such Restricted Stock Agreement may be
         obtained from the Secretary of Powergen."



         8.6. REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Article, Shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the Participant after the
last day of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 8.5 removed from his Stock certificate.



         8.7. VOTING RIGHTS. During the Period of Restriction, if the
Participant holds Shares of Restricted Stock granted hereunder he may exercise
full voting rights with respect to those Shares.



         8.8. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, if the Participant holds Shares of Restricted Stock granted
hereunder he shall be entitled to receive all dividends and other distributions
paid with respect to those Shares while they are so held. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability as the Shares of Restricted Stock with respect
to which they were paid.



         8.9. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event that the
Participant terminates his employment with the Company or any of its
Subsidiaries because of normal retirement (as defined under the then established
rules of the Company or any of its Subsidiaries, as the case may be), any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Section 8.3 hereof shall automatically terminate and, except as otherwise
provided in Section 8.4 or Section 3.8 hereof, the Shares of Restricted Stock
shall thereby be free of restrictions and be freely transferable. In the event
that the Participant terminates his employment with the Company or any of its
Subsidiaries because of early retirement (as defined under the then established
rules of the Company or any of its Subsidiaries, as the case may be), the
Committee in its sole discretion (subject to Section 3.8 herein) may waive the
restrictions remaining on any or all Shares of Restricted Stock pursuant to
Section 8.3 herein and add such new restrictions to those Shares of Restricted
Stock as it deems appropriate.



         8.10. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the
event the Participant's employment is terminated because of death or disability
(as defined under the then established rules of the Company or any of its
Subsidiaries, as the case may be) during the Period of Restriction, any
remaining Period of Restriction

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<PAGE>

applicable to the Restricted Stock pursuant to Section 8.3 herein shall
automatically terminate and, except as otherwise provided in Section 8.4 herein,
the shares of Restricted Stock shall thereby be free of restrictions and be
fully transferable.



         8.11. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that
the Participant terminates his employment with the Company or any of its
Subsidiaries for any reason other than for death, disability, or retirement, as
set forth in Sections 8.9 and 8.10 herein, during the Period of Restriction,
then any shares of Restricted Stock still subject to restrictions as of the date
of such termination shall automatically be forfeited and returned to the
Company; provided, however, that in the event of an involuntary termination of
the employment of the Participant by the Company or any of its Subsidiaries
other than for Cause, the Committee, in its sole discretion (subject to Section
3.8 herein), may waive the automatic forfeiture of any or all such Shares and
may add such new restrictions to such Shares of Restricted Stock as it deems
appropriate.



               ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES



         9.1. GRANT OF PERFORMANCE UNITS OR PERFORMANCE SHARES. Subject to the
terms and provisions of the Plan, Performance Units or Performance Shares may be
granted to the Participant at any time and from time to time as shall be
determined by the Committee or any delegates who shall have complete discretion
in determining the number of Performance Units or Performance Shares granted to
the Participant.



         9.2. VALUE OF PERFORMANCE UNITS AND PERFORMANCE SHARES. The Committee
shall set performance goals over certain periods to be determined in advance by
the Committee or its delegates ("Performance Periods"). Prior to each grant of
Performance Units or Performance Shares, the Committee or its delegates shall
establish an initial value for each Performance Unit and an initial number of
Shares for each Performance Share granted to each Participant for that
Performance Period. Prior to each grant of Performance Units or Performance
Shares, the Committee or its delegates also shall set the performance goals that
will be used to determine the extent to which the Participant receives a payment
of the value of the Performance Units or number of Shares for the Performance
Shares awarded for such Performance Period. These goals will be based on the
attainment, by Parent, the Company or its Subsidiaries, of certain objective
performance measures, which shall include one or more of the following: total
shareholder return, return on equity, return on capital, earnings per share,
market share, stock price, sales, costs, net income, cash flow, retained
earnings, results of customer satisfaction surveys, aggregate product price and
other product price measures, safety record, service reliability, demand-side
management (including conservation and load management), operating and
maintenance cost management, energy production availability


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<PAGE>

performance measures or any other measures determined by the Committee on its
delegates. Such performance goals also may be based upon the attainment of
specified levels of performance of the Parent Company or one or more
Subsidiaries under one or more of the measures described above relative to the
performance of other corporations. With respect to each such performance measure
utilized during a Performance Period, the Committee or its delegates shall
assign percentages to various levels of performance which shall be applied to
determine the extent to which the Participant shall receive a payout of the
values of Performance Units and number of Performance Shares awarded.



         9.3. PAYMENT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Share shall be entitled to receive the value thereof as determined by the
Committee or its delegates. The Committee or its delegates shall make this
determination by first determining the extent to which the performance goals set
pursuant to Section 9.2 have been met. It will then determine the applicable
percentage (which may exceed 100%) to be applied to, and will apply such
percentage to, the value of Performance Units or number of Performance Shares to
determine the payout to be received by the Participant.



         9.4. DISCRETION TO ADJUST AWARDS. The Committee or its delegates shall
have the authority to modify, amend or adjust the terms and conditions of any
Performance Unit award or Performance Share award, at any time or from time to
time, including but not limited to the performance goals.



         9.5. FORM AND TIMING OF PAYMENT. The payment described in Section 9.3
herein shall be made in cash, Stock, or a combination thereof as determined by
the Committee or its delegates. Payment may be made in a lump sum or
installments as prescribed by the Committee or its delegates. If any payment is
to be made on a deferred basis, the Committee or its delegates may provide for
the payment of dividend equivalents or interest during the deferral period. Any
stock issued in payment of a Performance Unit or Performance Share shall be
subject to the restrictions on transfer in Section 3.8 herein.



         9.6. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
In the case of death, disability, or retirement (each of disability and
retirement as defined under the established rules of the Company or any of its
Subsidiaries, as the case may be), the holder of a Performance Unit or
Performance Share shall receive a prorated payment based on the Participant's
number of full months of service during the Performance Period, further adjusted
based on the achievement of the performance goals during the entire Performance
Period, as


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<PAGE>

computed by the Committee. Payment shall be made at the time payments are made
to Participants who did not terminate service during the Performance Period.



         9.7. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that the
Participant terminates employment with the Parent of the or for any reason other
than death, disability, or retirement, all Performance Units and Performance
Shares shall be forfeited; provided, however, that in the event of an
involuntary termination of the employment of the Participant by the Company or
any other than for Cause, the Committee or its delegates in its sole discretion
may waive the automatic forfeiture provisions and pay out on a prorata basis.



         9.8. NONTRANSFERABILITY. No Performance Units or Performance Shares
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution until the termination of the applicable Performance Period. All
rights with respect to Performance Units and Performance Shares granted to the
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.



                       ARTICLE 10. BENEFICIARY DESIGNATION



         The Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively and who may include
a trustee under a will or living trust) to whom any benefit under the Plan is to
be paid in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation or if all designated beneficiaries predecease
the Participant, benefits remaining unpaid at the Participant's death shall be
paid to the Participant's estate.



                          ARTICLE 11. EMPLOYMENT RIGHTS



         11.1. EMPLOYMENT. Nothing in the Plan shall interfere with or limit in
any way the right of the Company or any of its Subsidiaries to terminate the
Participant's employment at any time, nor confer upon the Participant any right
to continue in the employ of the Company or any of its Subsidiaries.


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<PAGE>

         11.2.    [INTENTIONALLY BLANK]



         11.3. NO IMPLIED RIGHTS; RIGHTS ON TERMINATION OF SERVICE. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving
the Participant, beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Committee in accordance with the terms and provisions of
the Plan. Except as expressly provided in this Plan, neither the Company nor any
of its Subsidiaries shall be required or be liable to make any payment under the
Plan.



         11.4. NO RIGHT TO COMPANY ASSETS. Neither the Participant nor any other
person shall acquire, by reason of the Plan, any right in or title to any
assets, funds or property of the Company or any of its Subsidiaries whatsoever
including, without limiting the generality of the foregoing, any specific funds,
assets, or other property which the Company or any of its Subsidiaries, in its
sole discretion, may set aside in anticipation of a liability hereunder. Any
benefits which become payable hereunder shall be paid from the general assets of
the Company or the applicable subsidiary. The Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company or any of its Subsidiaries. Nothing contained in the Plan
constitutes a guarantee by the Company or any of its Subsidiaries that the
assets of the Company or the applicable subsidiary shall be sufficient to pay
any benefit to any person.



                          ARTICLE 12. CHANGE IN CONTROL



         12.1. STOCK BASED AWARDS. Notwithstanding any other provisions of the
Plan, in the event of a Change in Control, all Stock based awards granted under
this Plan shall immediately vest 100% in the Participant (subject to Section 3.8
herein), including, Nonqualified Stock Options, Stock Appreciation Rights, and
Restricted Stock.



         12.2. PERFORMANCE BASED AWARDS. Notwithstanding any other provisions of
the Plan, in the event of a Change in Control, all performance based awards
granted under this Plan shall be immediately paid out in cash, including
Performance Units and Performance Shares. The amount of the payout shall be
based on the higher of: (i) the extent, as determined by the Committee or its
delegates, to which performance goals, established for the Performance Period
then in progress have been met up through and including the effective date of
the Change in Control or (ii) 100% of the value on the date of grant of the
Performance Units or number of Performance Shares.


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<PAGE>

              ARTICLE 13. AMENDMENT, MODIFICATION, AND TERMINATION



         13.1. AMENDMENT, MODIFICATION, AND TERMINATION. At any time and from
time to time, the Committee may terminate, amend, or modify the Plan. However,
without the approval of the shareholders of the Company if such approval is
required by law, no such termination, amendment, or modification may:

         (a)      Increase the total amount of Stock which may be issued under
                  this plan, except as provided in Section 4.3 herein; or

         (b)      Make any person other than the Participant eligible to
                  participate in the Plan; or

         (c)      Materially increase the cost of the Plan or materially
                  increase the benefits to the Participant; or

         (d)      Extend the maximum period after the date of grant during which
                  Options or Stock Appreciation Rights may be exercised.



         13.2. AWARDS PREVIOUSLY GRANTED. No termination, amendment or
modification of the Plan other than pursuant to Section 4.3 hereof shall in any
manner adversely affect any Award theretofore granted under the Plan, without
the written consent of the Participant.



                             ARTICLE 14. WITHHOLDING



         14.1. TAX WITHHOLDING. The Parent, the Company and any of its
Subsidiaries shall have the power and the right to deduct or withhold, or
require the Participant to remit to the Company or any of its Subsidiaries, an
amount sufficient to satisfy taxes (including the Participant's FICA obligation)
required by law to be withheld with respect to any grant, exercise, or payment
made under or as a result of this Plan.



         14.2. STOCK DELIVERY OR WITHHOLDING. With respect to withholding
required upon the exercise of Nonqualified Stock Options, or upon the lapse of
restrictions on Restricted Stock, participants may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by tendering to the Company shares of previously acquired Stock or by
having the Company withhold Shares of Stock, in each such case in an amount
having a Fair Market Value equal to the amount required to be withheld to
satisfy the tax withholding obligations described in Section 14.1. The value of
the Shares to be tendered or withheld is to be


                                       19

<PAGE>

based on the Fair Market Value of the Stock on the date that the amount of tax
to be withheld is to be determined. All Stock withholding elections shall be
irrevocable and made in writing, signed by the Participant on forms approved by
the Committee in advance of the day that the transaction becomes taxable.



         Stock withholding elections made by the Participant if he is subject to
the short-swing profit restrictions of Section 16 of the Exchange Act must
comply with the additional restrictions of Section 16 and Rule 16b-3 in making
their elections.



                             ARTICLE 15. SUCCESSORS



         All obligations of the Parent under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Parent, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Parent.




                         ARTICLE 16. REQUIREMENTS OF LAW



         16.1. REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares of Stock under this Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.



         16.2. GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of England.

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