Document:

Exhibit 4(c)-4

 

[Form of LKE 2020 Exchange Note]

 

THIS IS A GLOBAL NOTE HELD BY OR ON BEHALF OF THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2(a) OF PART II OF THE OFFICER’S CERTIFICATE ESTABLISHING THIS SERIES OF NOTES UNDER THE INDENTURE AND (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 309 OF THE INDENTURE.

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

	
No.
    	
 
    	
CUSIP   No.
    

 

Principal Amount of $

 

LG&E AND KU ENERGY LLC

 

SENIOR NOTE, 3.750% SERIES DUE 2020

 

LG&E AND KU ENERGY LLC, a limited liability company duly organized and existing under the laws of the Commonwealth of Kentucky (herein referred to as the “Company”, which term includes any successor Corporation under the Indenture referred to below), for value received, hereby promises to pay to Cede & Co. or to its registered assigns, the principal sum of                                            ($                      ) Dollars or such principal amount as is set forth in Schedule of Exchanges of Interest in the Global Note attached hereto on November 15, 2020 (the “Stated Maturity Date”), and to pay interest on said principal sum semi-annually in arrears on May 15 and November 15 of each year (each, an “Interest Payment Date”), at the rate of 3.750% per annum until the principal hereof is paid or made available for payment.  The first Interest Payment Date for the Securities of this series shall be May 15, 2011, and interest on the Securities of this series will accrue from and including November 12, 2010, to and excluding the first Interest Payment Date, and thereafter will accrue from and including the last Interest Payment Date to which interest on the Securities of this series has been paid or duly provided for.  No interest will accrue on the Securities of this series with respect to the day on which the Securities are paid.

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
Date   of Authentication:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

In the event that any Interest Payment Date is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of such delay) with the same force and effect as if made on the Interest Payment Date. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the May 1 or November 1, whether or not a Business Day (each such date, a “Regular Record Date”), immediately preceding such Interest Payment Date, except that interest payable at Maturity will be payable to the Person to whom principal shall be paid.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a

 

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Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture referred to herein.  Interest on this Security will be computed on the basis of a 360-day year of twelve 30-day months.

 

Payment of the principal of and premium, if any, and interest at Maturity on this Security shall be made upon presentation of this Security at the corporate trust office of The Bank of New York Mellon in New York, New York, or at such other office or agency as may be designated for such purpose by the Company from time to time, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, and payment of interest, if any, on this Security (other than interest payable at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, provided that if such Person is a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee and such Person.

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and issuable in one or more series under an Indenture, dated as of November 1, 2010 (herein called the “Original Indenture” and, together with any amendments or supplements thereto and the Officer’s Certificate establishing the terms of the Securities of this series, the “Indenture,” which term shall have the meaning assigned to it in the Original Indenture), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture, including Supplemental Indenture No. 1 thereto, for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  The acceptance of this Security by the Holder hereof shall be deemed to constitute the consent and agreement by such Holder to all of the terms and provisions of the Indenture.  This Security is one of the series designated on the face hereof.

 

Prior to August 15, 2020, this Security is subject to redemption at the option of the Company, in whole at any time or in part from time to time, at a redemption price equal to the greater of:

 

(a)                                  100% of the principal amount of this Security to be so redeemed; and

 

(b)                                 as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the principal amount of this Security to be so redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 25 basis points,

 

plus, in either of the above cases, accrued and unpaid interest to the date of redemption.

 

Promptly after the calculation thereof, the Company shall give the Trustee written notice of the redemption price for the foregoing redemption.  The Trustee shall have no responsibility for any such calculation.

 

On or after August 15, 2020, this Security is subject to redemption at the option of the Company, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of this Security to be so redeemed, plus accrued and unpaid interest to the date of redemption.

 

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As used herein:

 

“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term to the Stated Maturity Date of this Security that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of this Security.

 

“Comparable Treasury Price” means, with respect to any redemption date:

 

a)                                      the average of five Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or

 

b)                                     if the Quotation Agent obtains fewer than five Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.

 

“Quotation Agent” means one of the Reference Treasury Dealers appointed by the Company.

 

“Reference Treasury Dealer” means:

 

c)                                      each of Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer; and

 

d)                                     any other Primary Treasury Dealers selected by the Company (after consultation with the Quotation Agent).

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount), as provided to the Quotation Agent by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.

 

Notice of redemption shall be given by mail to Holders of Securities, not less than 30 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.  As provided in the Indenture, notice of redemption at the election of the Company as aforesaid may state that such redemption shall be conditional upon the receipt by the applicable Paying Agent or Agents of money sufficient to pay the principal of and premium, if any, and interest, on this Security on or prior to the date fixed for such redemption; a notice of redemption so conditioned shall be of no force or effect if such money is not so received and, in such event, the Company shall not be required to redeem this Security.

 

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In the event of redemption of this Security in part only, a new Security or Securities of this series of like tenor representing the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.

 

If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance with certain conditions set forth in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture permits the Company and the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities.  The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless (a) such Holder shall have previously given the Trustee written notice of a continuing Event of Default; (b) the Holders of 25% in aggregate principal amount of the Outstanding Securities in respect of which an Event of Default shall have occurred and be continuing, considered as one class, shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity; (c) the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, a direction inconsistent with such request; and (d) shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of

 

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and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

The Securities of this series are issuable only in registered form without coupons, and in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument or transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, shall be issued to the designated transferee or transferees.

 

As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series and Tranche are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Security or Securities to be exchanged at the office or agency of the Company for such purpose.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

The Company shall not be required to execute and the Security Registrar shall not be required to register the transfer of or exchange of (a) Securities of this series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities of this series called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes (subject to Sections 305 and 307 of the Indenture), whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable and except to the extent that the law of the any other jurisdiction shall mandatorily govern.

 

As used herein, “Business Day,” means any day, other than a Saturday or Sunday, that is not a day on which banking institutions or trust companies in The City of New York, New York, or other city in which a paying agent for this Security is located, are generally authorized or required by law, regulation or executive order to remain closed.  All other terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

As provided in the Indenture, no recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be

 

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incurred by, any incorporator, stockholder, member, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities.

 

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Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
Date   of Security:
    	
 
    
	
 
    	
 
    
	
 
    	
LG&E   AND KU ENERGY LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

The following exchanges of a part of this Global Note for an interest in another Global Note, or exchanges of a part of another Global Note for an interest in this Global Note, have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of
   decrease in
   Principal
   Amount of this
   Global Note
    	
 
    	
Amount of
   increase in
   Principal
   Amount of this
   Global Note
    	
 
    	
Principal
   Amount of this
   Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or Note
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

 

[please insert social security or other identifying number of assignee]

 

 

[please print or typewrite name and address of assignee]

 

 

the within Security of LG&E AND KU ENERGY LLC and does hereby irrevocably constitute and appoint                                          , Attorney,  to transfer said Security on the books of the within-mentioned Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    

 

[signature of assignee]

 

Notice:  The signature to this assignment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatsoever.

 

SIGNATURE GUARANTEE

 

 

(Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)Exhibit 10(f)

 

AMENDED AND RESTATED
 EMPLOYMENT AND SEVERANCE AGREEMENT

 

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) is dated as of October 29, 2010, by and between E.ON U.S. LLC, a Kentucky limited liability company (the “Company”), and John R. McCall (“Executive”).

 

SECTION 1.           Effectiveness of Agreement.  This Agreement shall become effective on the date of the Closing (the “Effective Date”), provided that on such date Executive is employed by the Company or any subsidiary of the Company (collectively referred to in this Agreement as “Employer”).  In the event that the Purchase Agreement is terminated prior to the occurrence of the Closing, this Agreement shall be null and void and shall have no force and effect.  Upon Closing, Executive will receive a divestiture bonus in the amount equal to $1,142,775.00, less applicable withholding.

 

SECTION 2.           Term of Agreement.  The term of this Agreement (“Term”) shall commence on the Effective Date, and shall continue in effect, except as otherwise provided herein, until the second anniversary of the Effective Date; provided, however, that commencing on the second anniversary of the Effective Date, and on each successive anniversary of the Effective Date, the Term shall automatically be extended for one year unless Employer has given written notice to Executive at least ninety days prior to such second anniversary or such other anniversary date, as applicable, that the Term shall not be so extended; and provided  further, however, that notwithstanding any such notice by Employer, the Term shall not expire prior to the date that is 24 months after the occurrence of a Change in Control while this Agreement is in effect.

 

SECTION 3.           Retention Agreement.  In consideration for Executive’s continued service to the Company, the Company or one of its affiliates shall, no later than 60 days following the Effective Date, provide Executive with a separate retention agreement (the “Retention Agreement”).

 

SECTION 4.           Employment.  Executive shall serve as Executive Vice President, General Counsel, and Corporate Secretary of the Company and shall report to the Chief Executive Officer of the Company (the “CEO”) during the Term.  Executive agrees to devote his full working time and efforts, to the best of his ability, experience and talent, to the performance of services, duties and responsibilities in connection with his position, and shall perform such duties and exercise such powers, commensurate with his position, as the CEO shall from time to time delegate to him on such terms and conditions and subject to such restrictions as the CEO and the Board of Directors of the Company (the “Board”) may reasonably from time to time impose.  Nothing in this Agreement shall preclude Executive from (a) engaging in charitable and community affairs so long as, in the reasonable determination of the Company, such activities do not interfere with his duties and responsibilities hereunder, (b) managing any passive investment made by him in publicly traded equity securities or other property (provided that no such investment may exceed five percent of the equity of any entity, without the prior approval of the Company, which approval shall not be unreasonably withheld) or (c) serving, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, as a member of boards of directors or as a trustee of any other corporation, association or entity.  Executive will

 

 

perform his services at the Company’s headquarters in Louisville, Kentucky, with the understanding that he will be required to travel as reasonably required for the performance of his duties under this Agreement.

 

SECTION 5.           Compensation.

 

(a)           Base Salary.  Employer shall pay Executive an annual base salary of not less than the amount Executive is receiving at the Effective Date (“Base Salary”).  The Base Salary shall be payable in accordance with Employer’s ordinary payroll practices.  The Base Salary shall be reviewed by the Board in January of each year, or such other date as agreed to by Executive, and may be increased (but not decreased) in the discretion of the Board at any time and, as so increased, shall constitute “Base Salary” under the Agreement.

 

(b)           Annual Bonus.  In addition to his Base Salary, Executive shall be eligible to participate in any annual incentive plan or program maintained by Employer in which other senior executives of the Company participate (the “Bonus Plan”).  Such participation shall be on terms commensurate with Executive’s position and level of responsibility.  Executive’s target bonus under the Bonus Plan shall be not less than 50 percent of Base Salary.  Except as set forth in the preceding sentence, nothing in this Section 5(b) will guarantee to Executive any specific amount of incentive compensation, or prevent the Board (or its Compensation Committee) from establishing reasonable performance goals and compensation targets, after consultation with Executive, applicable only to Executive.

 

(c)           Compensation Plans and Programs.  Executive shall be eligible to participate in any compensation plan or program maintained by Employer in which other senior executives of the Company participate on terms commensurate with his position and level of responsibility, and to receive equity-based incentive awards based upon achievement of performance goals based partially upon PPL Corporation’s and partially on the Company’s performance.  Executive’s long-term incentive plan participation target level shall not be less than 100% of Base Salary.

 

(d)           Other Compensation.  Nothing in this Section 5 will preclude the Board from authorizing such additional compensation to Executive, in cash or in property, as the Board may determine in its sole discretion to be appropriate.

 

SECTION 6.           Employee Benefits.

 

(a)           Employee Benefit Programs, Plans and Practices.  Employer shall provide Executive during the Term with coverage under all employee pension and welfare benefit programs, plans and practices including, but not limited to, those specified in Exhibit A attached hereto (commensurate with his positions and level of responsibility in the Company and to the extent permitted under any employee benefit plan) in accordance with the terms thereof, which the Company makes available to its senior executives.

 

(b)           Vacation and Fringe Benefits.  Executive shall be eligible to participate in the Company’s vacation plan; provided, however, that in no event shall Executive receive fewer vacation days than Executive is entitled to receive under the Company’s vacation policy as in

 

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effect immediately prior to the Effective Time.  In addition, Executive shall be entitled to perquisites and other fringe benefits set forth on Exhibit A.

 

(c)           Expenses.  Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this Agreement, including, without limitation, expenses for travel and similar items related to such duties and responsibilities.  Employer will reimburse Executive for all such expenses upon presentation by Executive from time to time of appropriately itemized and approved (consistent with the Company’s policy) accounts of such expenditures.

 

SECTION 7.           Termination Payments.

 

(a)           Accrued Payments.  Upon termination of Executive’s employment for any reason, Executive shall be entitled to receive all amounts earned or accrued for or on behalf of Executive through the date of termination, but not paid as of such date, including (i) any earned but unpaid base salary as of the date of termination, together with any earned, but unpaid vacation pay and (ii) reimbursement for reasonable and necessary expenses incurred on behalf of the Company during the period ending on the date of termination (together, the “Accrued Payments”).

 

(b)           Severance Payment.  If Executive’s employment is terminated by Employer for any reason (other than for Cause and other than by reason of Executive’s death or Disability), including as a result of the Company’s notice not to extend the term of this Agreement, or by Executive for Good Reason, then, in addition to the Accrued Payments and any amounts due under and in accordance with the Retention Agreement, Employer shall pay to Executive within 30 days following the date of Executive’s termination a lump-sum cash payment (the “Severance Payment”) in the following applicable amount (without duplication):

 

(i)            If Executive’s employment is so terminated on or prior to the second anniversary of the Effective Date, the amount equal to 2.99 times the sum of the Base Amount and Bonus Amount;

 

(ii)           If Executive’s employment is so terminated on or following the occurrence of a Change in Control (excluding the transactions contemplated by the Purchase Agreement), but not later than the second anniversary of such Change in Control, 2.99 times the sum of the Base Amount and Bonus Amount; or

 

(iii)          If Executive’s employment is so terminated in any circumstance not described in clauses (i) or (ii) above, the amount equal to two times the sum of the Base Amount and Bonus Amount.

 

In addition, within 30 days following the date of any such termination of Executive’s employment, Employer shall provide Executive an amount to be used for outplacement services equal to 20 percent of the Base Amount.  For purposes of this Agreement, the term “Base Amount” shall mean Executive’s Base Salary (defined above) in effect at the time of payment, including amounts of Base Salary that are deferred under any qualified or nonqualified employee benefit plan of Employer.  The term “Bonus Amount” shall mean the greater of (a) the most recent annual bonus paid or payable to Executive, (b) the annual bonus paid or payable to

 

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Executive under the Bonus Plan for the full fiscal year ended prior to the fiscal year during which the Effective Date, or the Change in Control, as applicable, occurred or (c) Executive’s target award under the Bonus Plan for the full fiscal year ended prior to the fiscal year during which the Effective Date, or the Change in Control, as applicable, occurred.

 

(c)           Benefit Continuation.  (i) If Executive’s employment is terminated under the circumstances described in Section 7(b)(iii), then following the date of termination for a period of 24 months or (ii) if Executive’s employment is terminated under the circumstances described in Sections 7(b)(i) or 7(b)(ii), 36 months (the “Continuation Period”), Employer shall at its expense continue on behalf of Executive and his dependents and beneficiaries (to the same extent provided to the dependents and beneficiaries prior to Executive’s termination) the life insurance, disability, medical, dental, and hospitalization benefits provided (x) to Executive by Employer at any time within 90 days preceding the Effective Date, or at any time thereafter, or (y) to other similarly situated executives who continue in the employ of Employer during the Continuation Period.  The coverage and benefits (including deductibles and costs) provided in this Section 7(c) during the Continuation Period shall be no less favorable to Executive and his dependents and beneficiaries, than the most favorable of such coverages and benefits set forth in clauses (x) and (y) above.  Notwithstanding any of the foregoing provisions of this Section 7(c), if Executive obtains any such benefits pursuant to a subsequent employer’s benefit plans, Employer may reduce the coverage of any benefits it is required to provide Executive hereunder as long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to Executive than the coverages and benefits otherwise required to be provided hereunder.  This Section 7(c) shall not be interpreted so as to limit any benefits to which Executive or his dependents may be entitled under any of the employee benefit plans, programs or practices of Employer following Executive’s termination of employment, including without limitation, retiree medical and life insurance benefits.

 

(d)           Death and Disability.  If the Executive’s employment is terminated as a result of Executive’s death or Disability, then, in addition to the Accrued Payments and any amounts due under and in accordance with the Retention Agreement, Employer shall pay to Executive (or to Executive’s estate, as applicable) within 30 days following the date of Executive’s termination a lump-sum cash payment equal to the Bonus Amount, plus the payment any long-term incentive award granted to Executive at the target level, prorated for Executive’s actual period of service.

 

(e)           No Mitigation.  Executive shall not be required to mitigate the amount of any payments or benefits provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment, except as otherwise expressly set forth in this Agreement.

 

SECTION 8.           Meaning of Certain Terms.

 

(a)           Cause.  For purposes of this Agreement, a termination for “Cause” is a termination evidenced by a resolution adopted in good faith by at least seventy-five percent (75%) of the Board that (i) there has been repeated willful misconduct by Executive in performing the reasonably assigned duties on behalf of the Company required by and in

 

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accordance with his employment by the Company, or (ii) Executive has been convicted of a felony in the course of performing those duties.  Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by Executive after a Notice of Termination (as hereinafter defined) is given by Executive shall constitute Cause for purposes of this Agreement.  No act, or failure to act, on Executive’s part shall be deemed to be “repeated” unless the Executive shall have received a written notice from the Company setting forth in detail the particulars of the act, or the failure to act, which the Company contends would constitute Cause when repeated and Executive then repeats such act or failure to act and does not resolve or otherwise cure such behavior within thirty (30) days of receipt of such notice.

 

(b)           Change in Control.  For purposes of this Agreement, the term “Change in Control” means the occurrence after the Effective Date of any one of the following events:

 

(i)            any Person becomes the “Beneficial Owner” (as defined Rule 13d-3 under the Securities and Exchange Act of 1934, as modified), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors, unless PPL Corporation and its affiliates continue also to be the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s voting securities;

 

(ii)           there is consummated a merger or consolidation of the Company or any direct or indirect parent (excluding PPL Corporation or any parent of PPL Corporation from time to time) or subsidiary of the Company with any other corporation or other entity, other than (A) a merger or consolidation which would result in the voting securities of the Company or such direct or indirect parent of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary or parent of the Company, at least 50% of the combined voting power of the securities of the Company or at least 50% of the combined voting power of the securities of such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (excluding in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its affiliates) representing more than 50% of the combined voting power of the Company’s then outstanding securities;

 

(iii)          the shareowners of the Company approve a plan of complete liquidation or dissolution of the Company, unless PPL Corporation and its affiliates continue to be the Beneficial Owner, directly or indirectly, of securities of the successor(s) to the assets and liabilities of the Company representing more than 50% of the combined voting power of such successor(s)’ then outstanding securities entitled to vote generally in the election of directors; or

 

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(iv)          the sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to any Person, excluding in connection with a transaction in which all or substantially all of the assets of PPL Corporation and its subsidiaries, taken as a whole, are sold or disposed.

 

“Person” shall have the meaning given in Section 3(a)(9) of the Securities and Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, a Person shall not include (i) PPL Corporation or any of its affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of PPL Corporation or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of PPL Corporation in substantially the same proportions as their ownership of stock of PPL Corporation.

 

(c)           Good Reason.  For purposes of this Agreement, the term “Good Reason” shall mean (i) Executive’s base salary, annual target bonus percentage, or long term target bonus percentage is reduced, (ii) Executive’s present place of employment is relocated in excess of 50 miles, (iii) Executive’s authorities, duties, responsibilities or reporting are materially reduced from those in effect immediately prior to the Effective Date or (iv) the occurrence of any other action or inaction that constitutes a material breach by Employer of the Agreement; provided, however, that prior to any termination by Executive for Good Reason Executive shall within 90 days of the occurrence of the foregoing have provided notice to Employer of the existence of Good Reason and, following which Employer shall have had a period to cure the existence of Good Reason of not less than 30 days.

 

(d)           Disability.  For purposes of this Agreement, the term “Disability” shall mean (i) a physical or mental infirmity which has been determined to be total and permanent disability under and in accordance with the provisions of the group long-term disability policy of Employer in which Executive is eligible for benefits or (ii) in the event the Company does not maintain such plan at the time of the determination of Executive’s Disability, a physical or mental infirmity which impairs Executive’s ability to substantially perform his duties with an Employer which continues for a period of at least 180 consecutive days.

 

(e)           Purchase Agreement.  For purposes of this Agreement, the terms “Closing” and “Purchase Agreement” shall have the meanings given to them in that certain Purchase and Sale Agreement, dated as of April 28, 2010, by and between E.ON US Investments Corp., PPL Corporation and E.ON AG (solely for purposes of Articles VI, IX and X thereof).

 

SECTION 9.           Certain Additional Payments.

 

(a)           Notwithstanding anything in this Agreement to the contrary, in the event that it is determined (as hereafter provided) that any payment or distribution by Employer to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (individually and collectively a “Payment”), would be subject to the excise tax imposed by Section 4999 (or any successor provision thereto) of the

 

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Internal Revenue Code of 1986, as amended (the “Code”) by reason of being considered “contingent on a change in ownership or control” of the Company or Parent within the meaning of Section 280G of the Code (or any successor provision thereto), or to any similar tax imposed by state or local law, or any interest or penalties with respect to any such taxes (such taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive an additional payment or payments (individually and collectively, a “Gross Up Payment”).  The Gross-Up Payment with respect to any Payment shall be in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

 

(b)           Subject to the provisions of Section 9(f), all determinations required to be made under this Section 9, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid to the Executive and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by Executive in his sole discretion.   Executive shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both Employer and Executive within 30 calendar days after the date of Executive’s termination of employment, if applicable, and any such other time or times as may be requested by Executive or Employer.  If the Accounting Firm determines that any Excise Tax is payable by Executive, Employer shall pay or cause to be paid the required Gross-Up Payment in cash to Executive within five business days after receipt of such determination and calculations with respect to any Payment to Executive.  If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall, at the same time as it makes such determination, furnish Employer and Executive an opinion that Executive has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return.  As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) at the time of any determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment (or portion thereof) which will not have been made by Employer should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder.  In the event that Employer exhausts or fails to pursue its remedies pursuant to Section 9(f)  and Executive thereafter is required to make a payment of any Excise Tax, Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both Employer and Executive as promptly as possible.  Any such Underpayment shall be promptly paid by Employer in cash to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.

 

(c)           Employer and Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of Employer or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 9(b).  Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding on Employer and Executive.

 

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(d)           The federal, state, and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive.  Executive will make proper payment of the amount of any Excise Payment and, at the request of Employer, provide to Employer true and correct copies (with any amendments) of Executive’s federal income tax return as filed with the Internal Revenue Service (“IRS”) and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by Employer, evidencing such payment.  If prior to the filing of Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to Employer the amount of such reduction.

 

(e)           The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 9(b) shall be borne by Employer.  If such fees and expenses are initially paid by Executive, Employer shall reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefor and reasonable evidence of his payment thereof.

 

(f)            Executive shall notify Employer in writing of any claim by the IRS or any other taxing authority that, if successful, would require the payment by Employer of a Gross-Up Payment.  Such notification shall be given as promptly as practicable but no later than ten business days after Executive actually receives notice of such claim and Executive shall further apprise Employer of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive).  Executive shall not pay such claim prior to the earlier of (i) the expiration of the 30 calendar-day period following the date on which he gives such notice to Employer and (ii) the date that any payment of amount with respect to such claim is due.  If Employer notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

 

(i)            provide Employer with any written records or documents in his possession relating to such claim reasonably requested by Employer;

 

(ii)           take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by Employer;

 

(iii)          cooperate with Employer in good faith in order effectively to contest such claim; and

 

(iv)          permit Employer to participate in any proceedings relating to such claim;

 

provided, however, that Employer shall bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and shall indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of this Section

 

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9(f), Employer shall control all proceedings taken in connection with the contest of any claim contemplated by this Section 9(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Employer shall determine; provided, however, that if Employer directs Executive to pay the tax claimed and sue for a refund, Employer shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, Employer’s control of any such contested claim shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or any other taxing authority.

 

(g)           If, after the receipt by Executive of an amount advanced by Employer pursuant to Section 9(f), Executive receives any refund with respect to such claim, Executive shall (subject to Employer’s complying with the requirements of Section 9(f)) promptly pay Employer the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto).  If, after the receipt by Executive of an amount advanced by Employer pursuant to Section 9(f), a determination is made that Executive shall not be entitled to any refund with respect to such claim and Employer does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by to Executive pursuant to this Section 9.

 

SECTION 10.         Nonsolicitation and Confidential Information.

 

(a)           Nonsolicitation.  Executive hereby covenants and agrees that, at all times during the period of his employment and during the period of one year immediately following termination for any reason (unless such termination occurs after a Change in Control), Executive shall not, without the prior written consent of the Board:

 

(i)            solicit or take any action to willfully and intentionally cause the solicitation of any person who as of that date is a client or customer of Parent or the Company or any of their subsidiaries (“Client”) to transact any business with a Competitive Enterprise (as hereinafter defined) or discontinue business, in whole or in part with Parent or the Company;

 

(ii)           willfully or intentionally interfere with or damage any relationship between a Client and Parent or the Company; or

 

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(iii)          solicit any person employed at that time by Parent, the Company or any of their subsidiaries to apply for or accept employment with a Competitive Enterprise or otherwise encourage or entice such person to leave his position with Parent, the Company or any of their subsidiaries.

 

For purposes of this Agreement, the term “Competitive Enterprise” shall mean any business which is in competition with a business engaged in by Parent, the Company or any of its subsidiaries or affiliates in any state of the United States or in any foreign country in which any of them are engaged in business at the time of such termination of employment for as long as they carry on a business therein.  Notwithstanding the foregoing, Executive shall not be prohibited from owning less than five percent of any publicly traded corporation. It is the intention of the parties hereto that the restrictions contained in this Section 10(a) be enforceable to the fullest extent permitted by applicable law.  Therefore, to the extent any court of competent jurisdiction shall determine that any portion of the foregoing restrictions is excessive, such provision shall not be entirely void, but rather shall be limited or revised only to the extent necessary to make it enforceable.  Specifically, if any court of competent jurisdiction should hold that any portion of the foregoing description is overly broad as to one or more states of the United States or one or more foreign jurisdictions, then that state or states or foreign jurisdiction or jurisdictions shall be eliminated from the territory to which the restrictions of clause (i) of this Section 10(a) applies and the restrictions shall remain applicable in all other states of the United States and foreign jurisdictions.

 

(b)           Confidential Information.  Executive agrees to keep secret and retain in the strictest confidence all confidential matters which relate to Parent, the Company, its subsidiaries and affiliates, including, without limitation, customer lists, client lists, trade secrets, pricing policies and other business affairs of Parent, the Company, its subsidiaries and affiliates learned by him from Parent, the Company or any such subsidiary or affiliate or otherwise before or after the Effective Date, and not to disclose any such confidential matter to anyone outside Parent, the Company or any of its subsidiaries or affiliates, whether during or after his period of service with the Company, except (i) as such disclosure may be required or appropriate in connection with his work as an employee of the Company or (ii) when required to do so by a court of law, by any governmental agency having supervisory authority over the business of Parent or the Company or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order him to divulge, disclose or make accessible such information.  Executive agrees to give Parent and the Company advance written notice of any disclosure pursuant to clause (ii) of the preceding sentence and to cooperate with any efforts by Parent or the Company to limit the extent of such disclosure.  Upon request by Parent, Executive agrees to deliver promptly to Parent or the Company upon termination of his services for the Company, or at any time thereafter as Parent, the Company may request, all Parent, Company, subsidiary or affiliate memoranda, notes, records, reports, manuals, drawings, designs, computer files in any media and other documents (and all copies thereof) relating to Parent or the Company’s or any subsidiary’s or affiliate’s business and all property of Parent or the Company or any subsidiary or affiliate associated therewith, which he may then possess or have under his direct control, other than personal notes, diaries, rolodexes and correspondence.

 

(c)           Remedy.  Should Executive engage in or perform, either directly or indirectly, any of the acts prohibited by Section 10(a) or (b) , it is agreed that Parent and the

 

10

 

Company shall be entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining Executive and each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative acts.  The foregoing remedy available to Parent and the Company shall not be deemed to limit or prevent the exercise by Parent or the Company of any or all further rights and remedies which may be available to Parent or the Company hereunder or at law or in equity.

 

SECTION 11.         Notices.  Any notice or communication given by either party hereto to the other shall be in writing and personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the following addresses:

 

If to the Company:

 

E.ON U.S. LLC

220 West Main Street

Louisville, KY 40202-1377

Attention:  Chief Executive Officer

 

If to Executive:

 

John R. McCall

220 West Main Street

Louisville, KY 40202

 

Any notice shall be deemed given when actually delivered to such address, or two days after such notice has been mailed or sent by Federal Express, whichever comes earliest.  Any person entitled to receive notice may designate in writing, by notice to the other, such other address to which notices to such person shall thereafter be sent.

 

SECTION 12.         Section 409A.

 

(a)           In General.  This Agreement is intended to meet the requirements of Section 409A(a) of the Code (“Section 409A”), with respect to amounts subject to Section 409A, and shall be interpreted and construed consistent with that intent and, furthermore, it is intended that, with respect to any right to a payment or benefit (or portion thereof) that does not otherwise provide for a deferral of compensation within the meaning of Section 409A, including, without limitation, as applicable, the Severance Payment and other payments and benefits under Section 7, the Agreement does not so provide.  For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments or benefits to the fullest extent allowed under Section 409A.

 

(b)           Reimbursements.  Except as expressly provided otherwise herein, no reimbursement payable to Executive or his dependents or beneficiaries pursuant to any provisions of this Agreement or pursuant to any plan or arrangement of Employer shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred.  No such expenses eligible for reimbursement, or in-kind benefits to be

 

11

 

provided, during any calendar year shall affect the amounts eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” as defined in Section 409A.  The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for any other benefits.

 

(c)           Six-Month Delay.  Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A, Executive shall not be entitled to any payments or benefits the right to which provides for a deferral of compensation within the meaning of Section 409A, and with respect to which the payment or provision is triggered by termination of employment (whether such payments or benefits are provided under this Agreement or under any other plan, program or arrangement of employer), including as a result of Disability, until the earlier of (i) the first business day occurring on or after the date that is six months following Executive’s “separation from service” as defined in Section 409A for any reason other than death and (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described in this Section 12(c), would be due and payable prior to such date shall be made or provided on such date.

 

SECTION 13.         Miscellaneous.

 

(a)           Entire Agreement.  This Agreement constitutes the entire agreement between the parties and their affiliates and related parties and supersedes all prior agreements, understandings and arrangements, oral or written, between such persons with respect to the subject matter of the Agreement, including, without limitation the Employment and Severance Agreement dated as of February 25, 2000, as amended, between Executive, LG&E Energy Corporation and Powergen, plc.

 

(b)           Fees and Expenses.  Employer shall pay legal fees and related expenses (including the cost of experts, evidence and counsel) incurred by Executive involving (a) Executive’s termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment), or (b) Executive seeking to obtain or enforce any right or benefit provided by this Agreement.

 

(c)           Successors; Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of Parent, the Company, their successors and assigns and, at the time of any such succession or assignment, Parent or the Company (as applicable) shall require any successor or assign to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Parent or the Company would be required to perform it if no such succession or assignment had taken place.  The terms “Parent” and “the Company” as used herein shall include such successors and assigns.  The term “successors and assigns” as used herein shall mean a corporation or other entity acquiring ownership, directly or indirectly, of all or substantially all the assets and business of Company whether by operation of law or otherwise.  Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal personal representative.

 

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(d)           Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by Employer and for which Executive may qualify, nor shall anything herein limit or reduce such rights as Executive may have under any other agreements with Parent or Employer, other than as provided for in Section 12 herein.  Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan or program shall be payable in accordance with such plan or program.

 

(e)           Settlement of Claims.  Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which Employer may have against Executive or others.

 

(f)            Amendment; Waiver.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.  No additional compensation provided under any benefit or compensation plans to Executive shall be deemed to modify or otherwise affect the terms of this Agreement or any of Executive’s entitlements hereunder.

 

(g)           Headings.  The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

(h)           Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

 

(i)            Withholding Taxes.  All payments hereunder shall be subject to any and all applicable federal, state, local and foreign withholding taxes.

 

(j)            Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Kentucky, without reference to principles of conflicts of law.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
 
    	
E.ON   U.S. LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Victor A. Staffieri
    
	
 
    	
 
    	
Name:
    	
Victor   A. Staffieri
    
	
 
    	
 
    	
Title:
    	
Chairman,   Chief Executive Officer and President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   John R. McCall
    
	
 
    	
John   R. McCall
    

 

14

 

Exhibit A

 

Automobile

Financial Planning

Tax Preparation

Luncheon Club

Company Paid Reserved Parking

Executive Physical Examination

Supplemental Life Insurance Equivalent

Vacation - 5 weeks

E.ON US LLC Savings Plan

E.ON US LLC Nonqualified Savings Plan

E.ON US LLC Retirement Plan

E.ON US LLC Supplemental Executive Retirement Plan

 

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