Document:

exhibit10rr.htm

Exhibit 10(rr)

RETENTION AGREEMENT

THIS RETENTION AGREEMENT, effective as of December 1, 2010 is made and entered into between PPL Corporation (“PPL”) and Victor A. Staffieri (the “Executive”).

WHEREAS, PPL recognizes the need to develop and retain the Executive; and

WHEREAS, PPL has determined that certain steps should be taken to encourage the Executive to remain with PPL;

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound, PPL and the Executive agree as follows:

SECTION 1.  DEFINITIONS.

The following definitions are applicable to this Retention Agreement:

1.1  Affiliated Company or Affiliated Companies means any parent or majority or 50% owned subsidiaries of PPL (or companies, limited liability companies or other legal entities under common control with PPL) including entities that are members of the same controlled group of corporations (within the meaning of Section 1563(a) of the Code) as PPL.

1.2  Board means the Board of Directors of PPL.

1.3  Code means the Internal Revenue Code of 1986, as may be amended from time to time.

1.4  Committee means two or more non-employee directors, unless otherwise determined by the Board, who have been designated by the Board to act as the Committee and qualify as non-employee directors under the Exchange Act.

1.5  Common Stock means the common stock of PPL.

1.6  Disability or Disabled means the inability of the Executive to perform each and every duty pertaining to the Executive's regular occupation by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than six months.

1.7  Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.  Reference in this Retention Agreement to any section of the Exchange Act shall be deemed to include any amendments or successor provisions to such section and any rules promulgated thereunder.

1.8  Fair Market Value means the closing price of the Common Stock as reflected in the New York Stock Exchange Composite Transactions on the date as of which Fair Market Value is being determined or, if no Common Stock is traded on the date as of which Fair Market Value is being determined, Fair Market Value shall be the closing price of the Common Stock as reflected in the New York Stock Exchange Com­posite Transactions on the next preceding day on which the Common Stock was traded.

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

1.10  Termination for Cause means the termination by PPL or an Affiliated Company of the Executive’s employment upon a finding by PPL’s Board that Executive has (i) repeatedly and willfully either violated any policy of PPL or an Affiliated Company (including PPL’s Standards of Conduct and Integrity or any successor thereto) or violated any lawful direction of PPL or an Affiliated Company, or (ii) that Executive has committed a felony in the performance of his duties of employment.  No act, or failure to act, by Executive shall be deemed to be “repeated” unless the Executive shall have received a written notice from PPL setting forth in detail the particulars of the act, or the failure to act, which PPL contends would constitute Cause when repeated and the Executive then repeats such act or failure to act and does not resolve or otherwise cure such behavior within thirty days of receipt of such notice.

SECTION 2.  RESTRICTED STOCK UNIT AWARD

2.1  In order to induce the Executive to remain in the employ of PPL or an Affiliated Company, the Committee has authorized an award under Section 11 of the PPL Corporation Incentive Compensation Plan (the “Award”) to the Executive of 80,940 Restricted Stock Units (“RSUs”) with a restriction period that will lapse, unless the restrictions lapse sooner pursuant to Section 2.2 of this Retention Agreement, and provided the Executive has remained in continuous employment with PPL or an Affiliated Company, on December 1, 2012 (“Lapse Date”).

        (a)  The Executive hereby agrees that, upon instruction from the Chief Executive Officer of PPL, the Executive will promptly execute and timely deliver on behalf of LG&E and KU Energy LLC (f/k/a “E.ON US LLC”)(hereafter “LG&E LLC”) to all employees of LG&E LLC, and its subsidiaries or affiliates, in possession of any employment, retention, severance protection, change-in-control protection or similar agreement entered into by LG&E LLC or its subsidiaries and affiliates, excluding Executive and John R. McCall, a written notice of non-renewal of such agreements in a form directed by PPL.”

 

(b) The Executive hereby acknowledges and agrees that the granting of this Award compensates the Executive for, among other things, the loss of certain fringe benefits and perquisites previously provided by LG&E LLC, including specifically the (i) elimination of all tax gross-up payments on all fringe benefits and perquisites effective as of January 1, 2011; (ii) termination of employer-paid country club membership; and (iii) termination of employer-paid use of air transportation (i.e., NetJets) for any non-business purpose.  The Executive hereby acknowledges and agrees that the forbearance of these fringe benefits and perquisites does not constitute Good Reason under Section 8(c) of his Employment and Severance Agreement dated October 29, 2010 with LG&E LLC and that Exhibit A of such agreement is hereby amended, restated and replaced in its entirety with the Exhibit A attached hereto.

2.2  In the event of the Executive's death or  termination of Executive’s employment by PPL or an Affiliated Company as a result of Disability while in the employ of PPL or an Affiliated Company prior to the Lapse Date referenced above, the Award will be prorated by multiplying the number of RSUs that would have been free of restriction at the Lapse Date referenced above by a fraction, the numerator of which will be the number of full months of actual service of the Executive from the date of the Award up to the date of death or such termination as a result of Disability, and the denominator of which will be the number of full months of service during the vesting period that the Executive would have had if the Executive had maintained active employment from the date of the Award until the Lapse Date referenced above.  The date of such death of such termination shall constitute the Lapse Date.

2.3  Delivery of the Common Stock upon the lapse of restrictions on the RSUs shall be made on a date selected by PPL within 30 days following  the Lapse Date in accordance with the terms and conditions of the PPL Incentive Compensation Plan  including tax withholding requirements; provided that no delivery of  Common Stock under this Agreement shall be made unless PPL has received from the Executive (or from Executive’s estate),  an executed Release of Liability Agreement in the form attached hereto as Addendum A prior to the 30TH day after the Lapse Date.  Failure of Executive (or Executive’s estate) to timely provide the executed Release of Liability Agreement shall result in the forfeiture in full of the Common Stock.

SECTION 3.   FORFEITURE OF AWARD

3.1  The Executive shall forfeit all rights to any remaining RSUs if the Executive retires or resigns employment with PPL or an Affiliated Company prior to the Lapse Date in Section 2.1, unless, in the case of a resignation, the Executive resigns to immediately assume, and does assume, another position with PPL or an Affiliated Company.

3.2  If the Executive's employment ends as a result of a Termination for Cause, the Executive shall forfeit all rights to the Award.

SECTION 4.  MISCELLANEOUS PROVISIONS.

4.1 Nontransferability.  No benefit or right provided under this Retention Agreement shall be subject to alienation or assignment by an Executive (or by any person entitled to such benefit pursuant to the terms of the Retention Agreement) or subject to attachment or other legal process of whatever nature.  Any attempted alienation, assignment or attach­ment shall be void and of no effect.  Payment shall be made only to the Executive entitled to receive the same or to the Executive's authorized legal representative.  PPL and all Affiliated Companies will observe the terms of this Retention Agreement unless and until ordered to do otherwise by a state or federal court.  As a condi­tion of participation, each Executive agrees to hold PPL and all Affiliated Companies harmless from any claim that arises out of PPL's or an Affiliated Company's obeying any such order whether such order affects a judgment of such court or is issued to enforce a judgment or order of another court.

4.2  No Employment Right; No Stockholder Right.  Neither this Retention Agreement nor any action taken hereunder shall be construed as giving any right to be retained as an employee of PPL or any Affiliated Company.  The Executive shall have no rights as a stockholder of PPL in respect of the Common Stock until such Common Stock is paid following the Lapse Date, including any right to transfer any interest in the Common Stock, receive dividends or other distributions in respect of the Common Stock or exercise any voting right in respect of the Common Stock.

4.3  Government and Other Regulations.  The obligation of PPL to make payment for the Award shall be subject to all applicable laws, rules and regulations, and to such approvals by any government agencies.

4.4  Changes in Capital Structure.  In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, combination or exchange of shares or other similar changes in the Common Stock, appropriate adjustments shall be made to the number and/or kind of RSUs awarded under the Award, as may be determined by the Committee in its sole discretion.  Such adjustments shall be conclusive and binding for all purposes.  Additional RSUs issued to the Executive as the result of any such change shall bear the same restrictions as the RSUs to which they relate. Without limiting the generality of the foregoing, in connection with a change in capital structure, the Committee may provide, in its sole discretion, for the cancella­tion of any outstanding Awards in exchange for payment in cash or other property of the Fair Market Value (on the date of such exchange) of the RSUs covered by such Awards.

4.5   Company Successors.  In the event PPL becomes a party to a merger, consolidation, sale of substantially all of its assets or any other corporate reorganization in which PPL will not be the surviving corporation or in which the holders of the Common Stock will receive securities of another corporation, then such other corporation shall assume the rights and obligations of PPL under this Retention Agreement.

4.6   Governing Law.  All matters relating to this Retention Agreement and to the Award granted hereunder shall be governed by the laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

4.7  Relationship to Other Benefits.  The Award shall not be taken into account in determining any benefits under any pension, retirement, profit sharing, disability or group insurance plan of PPL or any Affiliated Company except as may be required by federal tax law and regulation or to meet other applicable legal requirements.

4.8   Administration.  This Retention Agreement and the Award are subject to the terms and conditions of the PPL Incentive Compensation Plan and shall be interpreted in accordance with the provisions thereof.

4.9   Entire Agreement. This Retention Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersedes all prior communications, representa­tions and negotiations in respect thereto.

4.10  Titles and Headings.  The titles and headings of the sections in this Retention Agreement are for convenience of reference only, and in the event of any conflict, the text of the Retention Agreement, rather than such titles or headings, shall control.

[signature page follows]

  

  

  

PPL CORPORATION

	
By _________________________________

	
___________________________

	
James H. Miller

	
Date

	
Chairman, President and

	  
	
Chief Executive Officer

	  
	  	  
	  	  
	  	  
	
____________________________________

	
___________________________

	
Victor A. Staffieri

	
Date

  

  

  

Exhibit A

Automobile Allowance

Financial Planning

Tax Preparation

Company Paid Reserved Parking

Executive Physical Examination

Supplemental Life Insurance - $2,000,000

Vacation - 5 weeks

LG&E LLC (or similar) Savings Plan

LG&E LLC (or similar) Nonqualified Savings Plan

LG&E LLC (or similar) Retirement Plan

LG&E LLC (or similar) Supplemental Executive Retirement Plan

 

  

  

  

ADDENDUM  A

RELEASE OF LIABILITY

AGREEMENT BETWEEN

Victor A. Staffieri and PPL Corporation

This Release of Liability Agreement (“Release”) is entered into by and between Victor a. Staffieri (“Executive”), and PPL Corporation, a Pennsylvania corporation, by and for itself and its Affiliated Companies, as defined below (“PPL”).

Whereas, Executive has become entitled to PPL Corporation Restricted Stock Units pursuant to the terms of a Retention Agreement effective as of December 1, 2010 between PPL Corporation and Executive (“Retention Agreement”)(attached hereto as Exhibit A); and

Whereas, Pursuant to the terms of the Retention Agreement, Executive has agreed to Release certain claims as a condition to the delivery of the common stock under the terms of the Retention Agreement.

Now, Therefore, It is hereby agreed as follows:

1.           Executive agrees unconditionally to release and discharge PPL Corporation and all Affiliated Companies, as the term “Affiliated Companies” is defined in the Retention Agreement (“Releasees”), from any and all actions, causes of action, suits, claims, liabilities, obligations, or damages and expenses (including attorneys’ fees and costs actually incurred), known or unknown of any nature arising from any agreements between Executive and LG&E and KU Energy, LLC (formerly “E.ON U.S. LLC”) dated prior to November 1, 2010, or those, known or unknown, arising under the Age Discrimination in Employment Act of 1967, as amended, and all other laws, statutes, rules and regulations arising out of or relating to employment (hereinafter, “Claims”) except for those agreements relating to former operations in Argentina listed on Attachment 1 ("Excluded Agreements").

2.           Executive represents and certifies that he has carefully read and fully understands all provisions and effects of this Release, and that he has had the opportunity to discuss all aspects of this Release with his attorney or other trusted advisor, that he is voluntarily entering into this Release intending to be bound by its terms, and neither Releasees nor their agents, representatives or attorneys have made any representations or promises other than as set forth herein.

 3.           This Release shall in all respects be interpreted, enforced and governed under the laws of Pennsylvania. The language of all parts of this Release shall in all cases be interpreted as a whole, according to its fair meaning, and not strictly for or against any of the Parties.

4.           This Release sets forth the entire agreement between Executive and LGE-KU relating to Release of Claims required pursuant to the Retention Agreement.  Nothing in this Release shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by LGE-KU and for which Executive may qualify.  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. Nothing herein shall limit Executive’s rights under any indemnification rights provided by (i) LG&E and KU Energy LLC's and its affiliates' corporate governing documents relating to indemnification of officers and directors, or (ii) the Excluded Agreements.

5.           Executive understands and agrees that he has had a period of not less than 45 calendar days to consider whether to sign this Release.  Executive acknowledges that he has received the required disclosure material associated with this Release.  Executive further understands and agrees that he has a period of 7 calendar days after his execution of this Release within which to revoke his signature, which revocation must be made in writing actually delivered to Robert J. Grey, General Counsel within such 7 calendar day period in order for the revocation to be effective (the “Revocation Period”).  This Release is not effective, and PPL is under no obligation to make any payments or provide any benefits to executive which are conditioned upon Executive executing the Release under the terms of the Retention Agreement, unless and until the Revocation Period passes with Executive not having timely and effectively revoked his execution of the Release.

  

  

  

IN WITNESS WHEREOF, and intending to be legally bound hereby, Executive and PPL have executed the foregoing Release.

_________________________________________

            Victor A. Staffieri

            Executive

_________________________________________

            DATE

  

  

  

COMMONWEALTH OF ______________                )

)  SS:

COUNTY OF _______________________                 )

On this [     ] day of [            ], 2012, before me Victor A. Staffieri  personally appeared to me known, and known to me to be the same person described in and who executed the above instrument and he acknowledged to me that he executed the same.

__________________________________________

Notary Public

My Commission Expires:   ___________________

PPL Corporation

By: ______________________________________

Title: _____________________________________

Date: _____________________________________Unassociated Document

Exhibit 10(ss)

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 Victor A. Staffieri (“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 $2,129,453.00, 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 Chairman, Chief Executive Officer and President of the Company and shall report to the Chairman, President and Chief Executive Officer of PPL Corporation (“PPL CEO”) during the Term.  The Company shall (i) cause Executive to be elected as Chairman of the Board of Directors of the Company (the “Board”) and (ii) secure Executive’s election as a member of the Board, and Executive agrees to serve in such capacities.  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 PPL CEO shall from time to time delegate to him on such terms and conditions and subject to such restrictions as PPL CEO 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 Compensation Governance and Nominating Committee of the Board of Directors of Purchaser (the “CGNC”) 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 CGNC 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 75 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 CNGC 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 performance.  Executive’s long-term incentive plan participation target level shall be not less than 175% 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 effect immediately prior to the Effective Time.  In addition, Executive shall be entitled to the 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.

 

(d) Life Insurance.  Employer shall provide Executive with term life insur­ance with a benefit in an amount not less than $2,000,000.  The premiums for such life insurance shall be paid by Employer, regardless of Executive’s employment status, and Employer shall pay Executive an additional payment such that Executive retains, after payment by Executive of all taxes imposed as a result of such life insurance and such additional payment, an amount equal to the taxes imposed upon Executive as a result of such life insurance.

 

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 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: (i) if Executive’s employment is terminated as a result of Disability, Executive shall receive until age 65 a benefit equal to 60 percent of the Base Salary, less 100 percent of the Social Security disability benefit and any amounts payable pursuant to the terms of a disability insurance policy or similar arrangement which the Company maintains during the Term; and (ii) if Executive’s employment is terminated as a result of death, for a period of 36 months, Employer shall at its expense continue on behalf of Executive’s dependents and beneficiaries (to the same extent provided to the dependents and beneficiaries prior to Executive’s death) the life insurance, medical, dental and hospitalization benefits under such plans offered by Employer to active employees.

 

(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 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

 

(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 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.

 

(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 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

 

(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 or the Company, 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 or 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 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:  General Counsel

If to Executive:

Victor A. Staffieri

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 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.

 

(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.

  

  

  

 

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

 

 

	  	
E.ON U.S. LLC

 

 

 

By:______________________________________

Name:

Title:

 

 

 

 

______________________________________

Victor A. Staffieri

  

  

  

Exhibit A

 

Automobile

Country Club

Financial Planning

Tax Preparation

Company Paid Reserved Parking

Executive Physical Examination

Supplemental Life Insurance - $2,000,000

Vacation - 5 weeks

Personal Use of Company Jet

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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