Exhibit
10.63


 


First Amendment to the


Employment and Severance Agreement


of


John R. McCall


 


 


WHEREAS,
John R. McCall (the “Executive”) and LG&E Energy Corp., a Kentucky
corporation (the “Company”) and Powergen, plc, a United Kingdom public limited
company (the “Parent”) entered into an Employment and Severance Agreement,
dated February 25, 2000 (the “Agreement”);


 


WHEREAS,
Parent, Company, a Delaware corporation to be formed as an
indirect wholly owned subsidiary of Parent (“US Subholdco 2”) and a Kentucky corporation
to be formed as a direct wholly owned subsidiary of US Subholdco 2 (“Merger
Sub”), have executed a merger agreement (the “Merger Agreement”) which will
become effective at the Effective Time (as defined in the Merger Agreement);


 


WHEREAS,
Company and the Parent have determined that it is desirable
to amend the Agreement to provide greater retention incentives to the Executive
as a further inducement for the Executive to remain in the employment of the
Company;


 


WHEREAS,
An  amendment to the Merger Agreement has
necessitated a corresponding amendment to the Agreement; and


 


WHEREAS,
the parties wish to correct the definition of a Change in Control contained in
the Agreement.


 


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


 


1.               Section 1.1 shall
be deleted and replaced in its entirety to read as follows:


 


“This Agreement shall become effective at the Effective Time, provided
the Company employs the Executive on that date.  As of the Effective Time, the Change-in-Control Agreement shall,
except as otherwise provided herein, terminate and become null and void.  In consideration of the services rendered by
the Executive to the Company prior to the Effective Time, the Executive’s
willingness to enter into this Agreement which provides additional retention
value to the Company, and the satisfaction of all of the Company’s obligations
under the Change-in-Control Agreement, the Company shall pay the Executive in
cash $650,000 on the Effective Date, if said time occurs prior to January 1,
2001. Additionally, if the Effective Time occurs prior to January 1, 2001 the
Company shall pay the Executive in cash the following: $405,000 on the six
month anniversary of the Effective Time, $405,000 on the twelve month
anniversary of the Effective Time, and $455,944 on the eighteen month
anniversary of the Effective Time, collectively the “Retention Payments”, so
long as the Executive is still employed by the Company on


 

















 


such dates.  The Retention Payments
shall be credited to Executive’s account under the Deferred Compensation Plan
of the Company (or such other plan or arrangement as may be mutually agreed
upon by the parties hereto) at the Effective Time and shall be payable in a
lump sum cash payment (including adjustment for any increases or decreases in
Executive’s account under the Deferred Compensation Plan), if the Executive so
elects, within ten (10) days after the earliest to occur of (i) a termination
of employment, other than a termination by the Executive without Good Reason,
which occurs at any time during the eighteen consecutive months immediately
following the Effective Time (the “Transition Period”), (ii) a Change in
Control that occurs during the Transition Period, so long as the Executive is
still employed by the Company immediately prior to the Change in Control, and
(iii) the scheduled six, twelve, and eighteen month anniversaries.  In the event that Executive elects not to
receive the foregoing lump sum payments, Executive may otherwise elect to defer
receipt of such payments and have such payments continue to be held in his
Deferred Compensation Plan account (which account shall continue to be adjusted
in accordance with the terms of the Deferred Compensation Plan, or such other plan
or arrangement as may be mutually agreed upon by the parties hereto).  If the Effective Date occurs on or after
January 1, 2001, the Company shall pay the Executive in cash 60% of the amount
calculated and payable under Sections 3.1(b) and 6 of the Change-in-Control
Agreement (the “Initial Change-in-Control Payment”) within 10 days following
the Effective Time conditioned upon delivery by the Executive of an executed
form of release of all claims against the Company with respect to the
Change-in-Control Agreement (other than with respect to Section 6 of such
Agreement) (on a form to be provided by the Company).  Additionally, if the Effective Date Occurs on or after January 1,
2001, the balance of the amount calculated under Sections 3.1(b) and 6 of the
Change-in-Control Agreement (the “Deferred Change-in-Control Payment”) shall be
credited to Executive’s account under the Deferred Compensation Plan of the
Company (or such other plan or arrangement as may be mutually agreed upon by
the parties hereto) and shall be payable in a lump sum cash payment (including
adjustment for any increases or decreases in Executive’s account under the
Deferred Compensation Plan), if the Executive so elects, within ten (10) days
after the earliest to occur of (i) a termination of employment, other than a
termination by the Executive without Good Reason, which occurs at any time
during the eighteen consecutive months immediately following the Effective Time
(the “Transition Period”), (ii) a Change in Control that occurs during the
Transition Period, so long as the Executive is still employed by the Company
immediately prior to the Change in Control, and (iii) the end of the Transition
Period, so long as the Executive is still employed on such date.  In the event that Executive elects not to
receive the foregoing lump sum payment, Executive may otherwise elect to defer
receipt of such payment and have such payment continue to be held in his
Deferred Compensation Plan account (which account shall continue to be adjusted
in accordance with the terms of the Deferred Compensation Plan, or such other
plan or arrangement as may be mutually agreed upon by the parties hereto).


 


Parent shall, or shall cause the Company to pay to the Executive a lump
sum cash payment in an amount equal to $172,028 if the closing occurs prior to
January 1, 2001 or an amount equal to 25% of the Deferred Change-in-Control
Payment if the closing occurs on or after January 1, 2001 (without adjustment
for any increases or decreases in Executive’s account under the Deferred
Compensation Plan) in either event (the


 


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“Premium Payment”) within ten (10) days after the earliest to occur of
(i) the date that Executive’s employment is terminated by the Company without
Cause, by Executive for Good Reason, or as a result of Executive’s death or
Disability, at any time during the eighteen consecutive months immediately
following the Effective Time (the “Transition Period”), (ii) a Change in
Control that occurs during the Transition Period, so long as the Executive is
still employed by the Company immediately prior to the Change in Control, and
(iii) the end of the Transition Period, so long as the Executive is still
employed on such date.  In the event
that Executive elects not to receive the foregoing lump sum payment, Executive
may otherwise elect to defer receipt of such payment and have such payment
continue to be held in his Deferred Compensation Plan account (which account
shall continue to be adjusted in accordance with the terms of the Deferred
Compensation Plan, or such other plan or arrangement as may be mutually agreed
upon by the parties hereto).”


 


2.               Section 4.5 shall
be deleted and replaced in its entirety to read as follows:


 


“4.5  EXISTING STOCK
OPTIONS.  In accordance with the Merger
Agreement and any amendments thereto, Executive may elect in writing delivered
to Parent to convert each Company stock option he holds (each, a “Company
Option”), whether vested or unvested, into an option to acquire, on the same terms
and conditions as were applicable under such Company Option, the number of
ADS’s, equal to the result (rounded down to the nearest whole ADS) of
multiplying the number of shares subject to the Company Option immediately
prior to the Effective Time by the Conversion Ratio (as defined in the Merger
Agreement), at an exercise price per share equal to the result (rounded up to
the nearest whole cent) of dividing the per share exercise price of such
Company Option immediately prior to the Effective Time by the Conversion Ratio
(it being understood that the exercise price shall be converted into dollars at
the rate prevailing at the close of business on the business day prior to the
Effective Time).  If Executive makes such
election and holds the Company Option or the ADS’s acquired upon the exercise
of such Company Option for two years after the Effective Time, then upon the
later of (i) the end of the 24th month after the Effective Time, or (ii) the
exercise of such Company Option, the Parent shall issue Executive one
additional ADS for every 4 ADS’s acquired as a result of such exercise; provided,
however in the event that either (i) a Change in Control occurs within
the two years after the Effective Time and the Executive is still employed by
the Company immediately prior to the Change in Control, immediately prior to
such time, the Executive shall receive one additional ADS for every 4 ADS’s (A)
acquired by the Executive as a result of the exercise of any Company Option
during the period prior to such Change in Control and (B) underlying each
unexercised Company Option held by the Executive immediately prior to such
Change in Control or (ii) the Executive’s employment is terminated for any
reason (other than by the Company for Cause or by the Executive without Good
Reason (other than as a result of death or Disability)) at any time during the
two years after the Effective Time and prior to any Change in Control, the
Executive shall receive, within 10 days after the termination of employment,
one additional ADS for every 4 ADS’s (A) acquired by the Executive as a result
of the exercise of any Company Option during the period prior to such
termination of


 


3

















 


employment and (B) underlying each unexercised Company Option held by
the Executive immediately prior to such termination of employment.”


3.Section 6.3(c)(5) shall be deleted and replaced in its entirety to
read as follows:


 


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


 


4.               A new Section
6.3(d) shall be added to read as follows:


 


“6.3 (d)  Notwithstanding the foregoing clauses (a),
(b), and (c), 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 Securities as a result of the
acquisition of Voting Securities by Parent which, by reducing the number of
Voting Securities 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 Securities by Parent, and after such share acquisition by Parent, the
Subject Person or entity becomes the Beneficial Owner of any additional Voting
Securities which increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.”


 


5.  Section 6.3(d) of the existing Agreement
shall be renumbered as Section 6.3(e) to read as follows:


 


“6.3(e) 
Notwithstanding anything contained in this Agreement to the contrary, if
the Executive’s employment is terminated during the term of this Agreement and
the Executive reasonably demonstrates that such termination (i) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a
Change in Control (a “Third Party”) or (ii) otherwise occurred in connection
with, or in anticipation of, a Change in Control which actually occurs, then
for all purposes of this Agreement, the date of a Change in Control with
respect to the Executive shall mean the date immediately prior to the date of
such termination of the Executive’s employment.”


 


	
   

  	
  /s/ John R. McCall

  
	
   

  	
  John R. McCall

  
	
   

  	
   

  
	
   

  	
  12/11/00

  
	
   

  	
  Date

  
	
   

  	
   

  
	
   

  	
  LG&E Energy Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Powergen,plc

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


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