Document:

EXHIBIT 4.51

 

 

 

Supplemental Indenture

 

Dated September 1, 2002

 

 

KENTUCKY UTILITIES
COMPANY

 

TO

 

U.S. BANK NATIONAL
ASSOCIATION

AND RICHARD PROKOSCH,

AS TRUSTEES

 

 

(SUPPLEMENTAL TO THE
INDENTURE OF MORTGAGE OR DEED OF TRUST DATED

MAY 1, 1947, AS AMENDED, HERETOFORE EXECUTED BY KENTUCKY UTILITIES

COMPANY TO CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY

OF CHICAGO AND EDMOND B. STOFFT, AS TRUSTEES.)

 

 

(PROVIDING
FOR FIRST MORTGAGE BONDS,

POLLUTION CONTROL SERIES NO. 16

DUE OCTOBER 1, 2032)

 

 

 

 

THIS SUPPLEMENTAL INDENTURE, dated September 1, 2002, made and entered
into by and between KENTUCKY UTILITIES COMPANY, a corporation organized and
existing under the laws of the Commonwealths of Kentucky and Virginia
(hereinafter commonly referred to as the “Company”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association having its office or place of
business in the City of Chicago, Cook County, State of Illinois, formerly named
First Trust of Illinois, National Association, successor to Bank of America
Illinois, formerly named Continental Bank, National Association and Continental
Illinois National Bank and Trust Company of Chicago (hereinafter commonly
referred to as the “Trustee”), and Richard Prokosch (successor Co-Trustee), of
the City of St. Paul, County of Ramsey, State of Minnesota, as Trustees under
the Indenture of Mortgage or Deed of Trust dated May 1, 1947, as modified and
amended by the several indentures supplemental thereto heretofore executed by
and between the Company and the Trustees from time to time under said Indenture
of Mortgage or Deed of Trust; said Indenture of Mortgage or Deed of Trust, as
so modified and amended, being hereinafter commonly referred to as the
“Indenture”; and said Trustees under the Indenture being hereinafter commonly
referred to as the “Trustees” or the “Trustees under the Indenture”;
Witnesseth:

 

WHEREAS, the Company, by resolution of its Board of Directors or the
Pricing Committee thereof duly adopted, has determined to issue forthwith an
additional series of its bonds to be secured by the Indenture, as hereby
modified and amended, such bonds to be known and designated as First Mortgage
Bonds, Pollution Control Series No. 16 (hereinafter sometimes referred to as
the “bonds of Series No. 16” or the “bonds of said Series”), and to be
authorized, authenticated and issued only as registered bonds without coupons;
and

 

WHEREAS, the County of Carroll in the Commonwealth of
Kentucky (the “County”) has agreed to issue $96,000,000 in principal amount of
its Pollution Control Revenue Bonds, 2002 Series C (Kentucky Utilities Company
Project) (the “Revenue Bonds”), which will be issued pursuant to the provisions
of the Indenture of Trust dated as of July 1, 2002 (the “County Indenture”),
between the County and Deutsche Bank Trust Company Americas, as Trustee, Paying
Agent and Bond Registrar (said Trustee or any successor trustee under the
County Indenture dated as of July 1, 2002, hereinafter mentioned, being
hereinafter referred to as the “County Trustee”); and

 

WHEREAS, the proceeds of the
Revenue Bonds (other than any accrued interest, if any, thereon) will be loaned
by the County to the Company pursuant to the provisions of the Loan Agreement,
dated as of July 1, 2002, between the County and the Company (the “Agreement”),
to pay and discharge $96,000,000 in outstanding principal amount of
“County of Carroll, Kentucky, Collateralized Pollution Control Revenue Bonds,
(Kentucky Utilities Company Project), 1992 Series A” (the “Refunded
Bonds”) on or prior to the date of issuance of the Revenue Bonds.  The Refunded Bonds were issued to refinance
the cost of construction of certain
air, solid waste and water pollution control facilities at the Ghent Generating
Station of the Company, which facilities
are hereinafter sometimes referred to as the “Project,” which

 

 

Project is located in the County
and which Project is more fully described in Exhibit A to the Agreement; and

 

WHEREAS, payments by the Company under and pursuant to
the Agreement have been assigned by the County to the County Trustee in order
to secure the payment of the Revenue Bonds; and in order to further secure the
payment of the Revenue Bonds, the Company desires to issue its bonds of Series
No. 16 to the County Trustee as provided in the Agreement; and

 

WHEREAS, the Company desires, in accordance with the provisions of
Article I, Section 6(e) of Article II and Article XVI of the Indenture, to
execute this supplemental indenture for the purpose of creating and authorizing
its bonds of Series No. 16 and modifying
or amending certain provisions of the Indenture in the particulars and to the
extent hereinafter in this supplemental indenture specifically provided; and

 

WHEREAS, the execution and delivery by the Company of this supplemental
indenture have been duly authorized by the Board of Directors of the Company or
the Pricing Committee thereof, and the Company has requested, and hereby
requests, the Trustees to enter into and join with the Company in the execution
and delivery of this supplemental indenture; and

 

WHEREAS, the bonds of Series No. 16
are to be authorized, authenticated and issued only in the form of registered
bonds without coupons, and each of such bonds shall be substantially in the
following form, to wit:

 

(Form of face of bond of Series No. 16)

 

This bond is nontransferable except as may be required
to effect a transfer to any successor trustee under the Indenture of Trust
dated as of July 1, 2002, hereinafter referred to.

 

	
  No.                       

  	
   

  	
  $                       

  

 

Kentucky Utilities
Company

First Mortgage Bond, Pollution Control Series No. 16

Due October 1, 2032

 

Kentucky Utilities Company, a Kentucky and Virginia corporation
(hereinafter referred to as the “Company”), for value received, hereby promises
to pay to Deutsche Bank Trust Company Americas, as Trustee under the Indenture
of Trust (the “County Indenture”) dated July 1, 2002, from the County of
Carroll, Kentucky, (the “County”) to Deutsche Bank Trust Company Americas or
any successor trustee under the County Indenture (the “County Trustee”), the
principal sum of Ninety-Six Million Dollars on the Demand Redemption Date,
as hereinafter defined, and to pay on the Demand Redemption Date to the County
Trustee interest on said sum from the Initial Interest Accrual Date, as hereinafter
defined, to the Demand Redemption Date, at the interest rate or rates
determined for the “Interest Rate Mode” (as described in Section 2.02 of the
County Indenture) applicable to the Revenue Bonds referred to on the reverse
hereof as

 

2

 

selected from time to time by the Company, subject to
the provisions hereinafter set forth in the event of a rescission of a
Redemption Demand, as hereinafter defined. 
Both the principal of and the interest on this bond shall be payable at
the office or agency of the Company in Chicago, Illinois, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

 

The provisions of this bond are continued on the reverse side hereof
and such continued provisions shall have the same effect, for all purposes, as
though fully set forth at this place. 
This bond shall not be valid or become obligatory for any purpose unless
and until it shall have been authenticated by the execution by the Trustee or
its successor in trust under the Indenture of the Trustee’s Certificate
endorsed hereon.

 

IN WITNESS WHEREOF, Kentucky Utilities Company has caused this bond to
be executed in its name by the manual or facsimile signature of its President
or one of its Vice-Presidents, and its corporate seal or a facsimile thereof to
be hereto affixed or imprinted hereon and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.

 

	
  Dated as of

  	
   

  
	
   

  	
   

  
	
   

  	
  Kentucky
  Utilities Company

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  

 

(Form of reverse side of
bond of Series No. 16)

 

This bond is one of the bonds of the Company issued and to be issued
from time to time under and in accordance with and all secured by the indenture
of mortgage or deed of trust dated May 1, 1947, executed and delivered by the
Company to U.S. Bank National Association, successor to Bank of America
Illinois (formerly Continental Bank, National Association and formerly
Continental Illinois National Bank and Trust Company of Chicago and hereinafter
referred to as the “Trustee”) and Edmond B. Stofft, as Trustees, and the
indentures supplemental thereto heretofore executed and delivered by the
Company to the Trustees under said indenture of mortgage, including the
indenture supplemental thereto dated September 1, 2002, executed and delivered
by the Company to said U.S. Bank National Association and Richard Prokosch
(successor Co-Trustee), as Trustees (collectively the “Trustees”), prior to the
authentication of this bond (said indenture of mortgage and said supplemental
indentures being hereinafter referred to, collectively, as the
“Indenture”).  Reference to the Indenture
and to all supplemental indentures, if any, hereafter executed pursuant to the
Indenture is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security and the rights of the holders
and registered owners of said bonds and of the Trustees and of the Company in
respect

 

3

 

of such security. 
By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest, redemption provisions, medium of payment and in other respects as in
the Indenture provided.

 

This bond is one of a series of bonds of the Company issued under the
Indenture and designated as First Mortgage Bonds, Pollution Control Series No.
16 (hereinafter called the “bonds of Series No. 16” or the “bonds of said
Series”).  The bonds of Series No. 16
have been issued to the County Trustee under the County Indenture to secure
payment of the Pollution Control Revenue Bonds, 2002 Series C (Kentucky
Utilities Company Project) (the “Revenue Bonds”), issued by the County under
the County Indenture, the proceeds of which (other than any accrued interest
thereon) have been loaned to the Company pursuant to the provisions of the Loan
Agreement dated as of July 1, 2002 (the “Agreement”), between the Company and
the County.

 

Except as provided in the next succeeding paragraph, in the event of a
default under Section 9.1 of the Agreement or in the event of a default in the
payment of the principal of, premium, if any, or interest (and such default in
the payment of interest continues for the full grace period, if any, permitted
by the County Indenture and the Revenue Bonds) on the Revenue Bonds, whether at
maturity, by tender for purchase, by acceleration, by sinking fund, redemption
or otherwise, as and when the same becomes due, the bonds of Series No. 16
shall be redeemable in whole upon receipt by the Trustee of a written demand
(hereinafter called a “Redemption Demand”) from the County Trustee stating that
there has been such a default, stating that it is acting pursuant to the
authorization granted by Section 9.02(c) of the County Indenture, specifying
the last date to which interest on the Revenue Bonds has been paid (such date
being hereinafter referred to as the “Initial Interest Accrual Date”) and
demanding redemption of the bonds of Series No. 16.  The Trustee shall, within 10 days after receiving such Redemption
Demand, mail a copy thereof to the Company marked to indicate the date of its
receipt by the Trustee.  Promptly upon
receipt by the Company of such copy of a Redemption Demand, the Company shall
fix a date on which it will redeem the bonds of Series No. 16 so demanded to be
redeemed (hereinafter called the “Demand Redemption Date”).  Notice of the date fixed as and for the
Demand Redemption Date shall be mailed by the Company to the Trustee at least
30 days prior to such Demand Redemption Date. 
The date to be fixed by the Company as and for the Demand Redemption Date
may be any date up to and including the earlier of (i) the 120th day after
receipt by the Trustee of the Redemption Demand or (ii) October 1, 2032,
provided that if the Trustee shall not have received such notice fixing the
Demand Redemption Date within 90 days after receipt by it of the Redemption
Demand, the Demand Redemption Date shall be deemed to be the earlier of (i) the
120th day after receipt by the Trustee of the Redemption Demand or (ii) October
1, 2032.  The Trustee shall mail notice
of the Demand Redemption Date (such notice being hereinafter called the “Demand
Redemption Notice”) to the County Trustee not more than 10 nor less than five
days prior to the Demand Redemption Date. 
Notwithstanding the foregoing, if a default to which this paragraph is
applicable is existing on October 1, 2032, such date shall be deemed to be the
Demand Redemption Date without further action (including actions specified in
this paragraph) by the County Trustee, the Trustee or the Company.  The bonds of Series No. 16 shall be redeemed
by the Company on the Demand Redemption Date, upon surrender thereof by the
County Trustee to the Trustee, at a redemption price equal to the principal
amount thereof plus accrued interest thereon at the rate or rates then 

 

4

 

applicable to the Revenue Bonds or determined under
the provisions of the County Indenture from the Initial Interest Accrual Date
to the Demand Redemption Date.  If a
Redemption Demand is rescinded by the County Trustee by written notice to the
Trustee prior to the Demand Redemption Date, no Demand Redemption Notice shall
be given, or, if already given, shall be automatically annulled, and interest
on the bonds of Series No. 16 shall cease to accrue, all interest accrued
thereon shall be automatically rescinded and cancelled and the Company shall
not be obligated to make any payments of principal of or interest on the bonds
of said Series; but no such rescission shall extend to or affect any subsequent
default or impair any right consequent thereon.

 

In the event that all of the bonds outstanding under the Indenture
shall have become immediately due and payable, whether by declaration or
otherwise, and such acceleration shall not have been annulled, the bonds of
Series No. 16 shall bear interest at the rate or rates applicable to the
Revenue Bonds from the Initial Interest Accrual Date, as specified in a written
notice to the Trustee from the County Trustee, and the principal of and
interest on the bonds of said Series from the Initial Interest Accrual Date
shall be payable in accordance with the provisions of Article X of the
Indenture.

 

Upon payment of the principal of and premium, if any, and interest on
the Revenue Bonds, whether at maturity or prior to maturity by redemption or
otherwise, and the surrender thereof to and cancellation thereof by the County
Trustee (other than any Revenue Bond that was cancelled by the County Trustee
and for which one or more other Revenue Bonds were delivered and authenticated
pursuant to the County Indenture in lieu of or in exchange or substitution for
such cancelled Revenue Bond), or upon provision for the payment thereof having
been made in accordance with the County Indenture, bonds of Series No. 16 in a
principal amount equal to the principal amount of the Revenue Bonds so
surrendered and cancelled or for the provision for which payment has been made
shall be deemed fully paid and the obligations of the Company thereunder shall
be terminated, and such bonds of Series No. 16 shall be surrendered by the
County Trustee to the Trustee and shall be cancelled by the Trustee.  From and after the Release Date (as defined
below), the bonds of Series No. 16 shall be deemed fully paid, satisfied and
discharged and the obligations of the Company hereunder and thereunder shall be
terminated.  The Release Date shall be
the date that the Bond Insurer (as such term is defined in the County
Indenture), at the request of the Company, consents to the release of the bonds
of this Series, as security for the Revenue Bonds, provided that in no event
shall that date be later than the date as of which all bonds issued under the
Indenture prior to the date of initial issuance of this bond (and excluding
bonds of Series No. 11, 12, 13, 14, 15 and 16 have been retired through
payment, redemption or otherwise (including those bonds “deemed to be paid”
within the meaning of that term as used in Article XII of the Indenture) at,
before or after the maturity thereof. 
On the Release Date, the bonds of Series No. 16 shall be surrendered by
the County Trustee to the Trustee whereupon the bonds of Series No. 16 so
surrendered shall be cancelled by the Trustee.

 

No recourse shall be had for the payment of the principal of or
interest on this bond, or for any claim based hereon, or otherwise in respect
hereof or of the Indenture or any indenture supplemental thereto, to or against
any incorporator, stockholder, officer or director, past, present or future, of
the Company, or of any predecessor or successor corporation, either directly or
through the Company or such predecessor or successor corporation, under any
constitution or

 

5

 

statute or rule of law, or by the enforcement of any
assessment or penalty, or otherwise, all such liability of incorporators, stockholders,
directors and officers being waived and released by the registered owner hereof
by the acceptance of this bond and being likewise waived and released by the
terms of the Indenture.

 

This bond is nontransferable except as may be required to effect a
transfer to any successor trustee under the County Indenture.  Any such transfer may be made by the
registered owner hereof, in person or by attorney duly authorized, at the
principal office or place of business of the Trustee under the Indenture, upon
the surrender and cancellation of this bond and the payment of any stamp tax or
other governmental charge, and upon any such transfer a new registered bond or
bonds without coupons, of the same series and for the same aggregate principal
amount, will be issued to the transferee in exchange herefor.

 

AND WHEREAS, there is to be endorsed on each of the bonds of Series No.
16 (whether in temporary or definitive form) a certificate of the Trustee
substantially in the following form, to-wit:

 

Trustee’s Certificate

 

This bond is one of the bonds of the series designated therein,
described in the within mentioned Indenture.

 

	
   

  	
  U.S.
  Bank National Association

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

NOW, THEREFORE, in consideration of the premises and of the sum of One
Dollar ($1.00) duly paid by the Trustee to the Company, and of other good and
valuable considerations, the receipt whereof is hereby acknowledged, and for
the purpose of further assuring to the Trustees under the Indenture their title
to, or lien upon, the property hereinafter described, under and pursuant to the
terms of the Indenture and for the purpose of further securing the due and
punctual payment of the principal of and interest and the premium, if any, on
all bonds which have been heretofore or shall be hereafter issued under the
Indenture and indentures supplemental thereto and which shall be at any time
outstanding thereunder and secured thereby, and for the purpose of securing the
faithful performance and observance of all the covenants and conditions set
forth in the Indenture and/or in any indenture supplemental thereto, the
Company has given, granted, bargained, sold, transferred, assigned, pledged,
mortgaged, warranted the title to and conveyed, and by these presents does
give, grant, bargain, sell, transfer, assign, pledge, mortgage, warrant the
title to and convey unto U.S. BANK NATIONAL ASSOCIATION AND RICHARD PROKOSCH,
as Trustees under the Indenture as therein provided, and the successors in the
trusts thereby created, and to their assigns, all the right, title and interest
of the Company in and to any and all premises, plants, property, leases and
leaseholds, franchises, permits, rights and powers, of every kind and
description, real and personal (1) which have been acquired by the

 

6

 

Company through construction, purchase, consolidation
or merger, or otherwise, and which at the date hereof are owned by the Company,
and (2) which shall be acquired by the Company, through construction, purchase,
consolidation, merger, or otherwise, on or subsequent to the date hereof,
together, in each case, with the rents, issues, products and profits therefrom,
excepting, however, and there is hereby expressly reserved
and excluded from the lien and effect of the Indenture and of this supplemental
indenture, all right, title and interest of the Company, now owned,
or hereinafter acquired, in and to (a) all cash, bonds, shares of stock,
obligations and other securities not deposited with the Trustee or Trustees
under the Indenture, and (b) all accounts and bills receivable, judgments
(other than for the recovery of real property or establishing a lien or charge
thereon or right therein) and choses in action not specifically assigned to and
pledged with the Trustee or Trustees under the Indenture, and (c) all lamps and
supplies, machinery, appliances, goods, wares, merchandise, commodities,
equipment, apparatus, materials and/or supplies acquired or held by the Company
for sale, lease, rental or consumption in the ordinary course of business, and
(d) the last day of each of the demised terms created by any lease of property
leased to the Company and under each and every renewal of any such lease, the
last day of each and every such demised term being hereby expressly reserved to
and by the Company, and (e) all gas, oil, ore, copper and other minerals now or
hereafter existing upon, within or under any real estate of the Company subject
to, or hereby subjected to, the lien of the Indenture.

 

To Have And To
Hold  all said property, right and interests hereinabove described or
referred to and conveyed, assigned, pledged or mortgaged, or intended to be
conveyed, assigned, pledged or mortgaged, together with the rents, issues,
products and profits therefrom unto said U.S. BANK NATIONAL ASSOCIATION AND
RICHARD PROKOSCH, as Trustees under the Indenture, as hereby modified and
amended, and unto their successor or successors in trust forever, But In Trust Nevertheless, upon the trusts, for the purposes and
subject to all the terms, conditions, provisions and restrictions of the
Indenture, as hereby modified and amended.

 

And upon the considerations and for the purposes aforesaid, and in
order to provide, pursuant to the terms of the Indenture, for the issuance
under the Indenture, as hereby modified and amended, of bonds of Series No. 16
and to fix the terms, provisions and characteristics of the bonds of said
Series, and to modify and amend the Indenture in the particulars and to the
extent hereinafter in this supplemental indenture specifically provided, the
Company hereby covenants and agrees with the Trustees as follows:

 

ARTICLE I.

 

Section
1.  A series of bonds issuable under the
Indenture, as hereby modified and amended, and to be known and designated as
“First Mortgage Bonds, Pollution Control Series No. 16 ‘‘ (hereinafter
sometimes referred to as the “bonds of Series No. 16” or the “bonds of said
Series”), and which shall be executed, authenticated and issued only in the
form of registered bonds without coupons, in denominations of $5,000 and
integral multiples thereof, is hereby created and authorized.  The bonds of said Series shall be payable as
provided in Section 3 of this Article and shall be substantially in the form
thereof hereinbefore recited.  Each bond
of said Series shall be issued to and registered in the name of the County
Trustee and shall be nontransferable except as required to effect any transfer
of bonds of said Series to any successor

 

7

 

trustee under the
County Indenture.  Each bond of said
Series shall be dated as of the date of issuance of the Revenue Bonds.

 

Section
2.  The bonds of Series No. 16 shall
bear interest, and the principal thereof and interest thereon shall be payable,
only to the extent and in the manner provided in Section 3 of this
Article.  The bonds of said Series shall
mature on October 1, 2032.  The bonds of
said Series shall be payable, both as to principal and interest, at the office
or agency of the Company in Chicago, Illinois in any coin or currency of the
United States of America which at the time of payment is legal tender for
public and private debts.

 

The bonds of said Series shall be deemed fully paid, and the
obligations of the Company thereunder shall be terminated, to the extent and in
the manner provided in Section 4 of this Article.

 

Section
3.  (a)  Except as provided in paragraph (b) of this
Section 3, in the event of a default under Section 9.1 of the Agreement or in
the event of a default in the payment of the principal of, premium, if any, or
interest (and such default in the payment of interest continues for the full
grace period, if any, permitted by the County Indenture and the Revenue Bonds)
on the Revenue Bonds, whether at maturity, by tender for purchase, by
acceleration, by sinking fund, redemption or otherwise, as and when the same
becomes due, the bonds of Series No. 16 shall be redeemable in whole upon
receipt by the Trustee of a written demand (hereinafter in this Article called
a “Redemption Demand”) from the County Trustee stating that there has been such
a default, stating that it is acting pursuant to the authorization granted by
Section 9.02(c) of the County Indenture, specifying the last date to which
interest on the Revenue Bonds has been paid (such date being hereinafter
referred to in this Article as the “Initial Interest Accrual Date”) and
demanding redemption of the bonds of Series No. 16.  The Trustee shall, within 10 days after receiving such Redemption
Demand, mail a copy thereof to the Company marked to indicate the date of its
receipt by the Trustee.  Promptly upon
receipt by the Company of such copy of a Redemption Demand, the Company shall
fix a date on which it will redeem the bonds of Series No. 16 so demanded to be
redeemed (hereinafter in this Article called the “Demand Redemption
Date”).  Notice of the date fixed as and
for the Demand Redemption Date shall be mailed by the Company to the Trustee at
least 30 days prior to such Demand Redemption Date.  The date to be fixed by the Company as and for the Demand
Redemption Date may be any date up to and including the earlier of (i) the
120th day after receipt by the Trustee of the Redemption Demand or (ii) October
1, 2032, provided that if the Trustee shall not have received such notice fixing
the Demand Redemption Date within 90 days after receipt by it of the Redemption
Demand, the Demand Redemption Date shall be deemed to be the earlier of (i) the
120th day after receipt by the Trustee of the Redemption Demand or (ii) October
1, 2032.  The Trustee shall mail notice
of the Demand Redemption Date (such notice being hereinafter in this Article
called the “Demand Redemption Notice”) to the County Trustee not more than 10
nor less than five days prior to the Demand Redemption Date.  Notwithstanding the foregoing, if a default
to which this paragraph is applicable is existing on October 1, 2032, such date
shall be deemed to be the Demand Redemption Date without further action
(including actions specified in this paragraph) by the County Trustee, the
Trustee or the Company.  The bonds of
Series No. 16 shall be redeemed by the Company on the Demand Redemption Date,
upon surrender thereof by the County Trustee to the Trustee, at a redemption
price equal to the principal amount thereof, plus accrued interest

 

8

 

thereon at the
rate or rates then applicable to the Revenue Bonds or determined under the
provisions of the County Indenture from the Initial Interest Accrual Date to
the Demand Redemption Date.  If a
Redemption Demand is rescinded by the County Trustee by written notice to the
Trustee prior to the Demand Redemption Date, no Demand Redemption Notice shall
be given, or, if already given, shall be automatically annulled, and interest
on the bonds of Series No. 16 shall cease to accrue, all interest accrued
thereon shall be automatically rescinded and cancelled and the Company shall
not be obligated to make any payments of principal of or interest on the bonds
of this Series; but no such rescission shall extend to or affect any subsequent
default or impair any right consequent thereon.

 

(b)           In the event that
all of the bonds outstanding under the Indenture shall have become immediately
due and payable, whether by declaration or otherwise, and such acceleration
shall not have been annulled, the bonds of Series No. 16 shall bear interest at
the rate or rates applicable to the Revenue Bonds from the Initial Interest
Accrual Date, as specified in a written notice to the Trustee from the County
Trustee, and the principal of and interest on the bonds of said Series from the
Initial Interest Accrual Date shall be payable in accordance with the
provisions of Article X of the Indenture.

 

(c)           Anything herein
contained to the contrary notwithstanding, the Trustee is not authorized to
take any action pursuant to a Redemption Demand or a rescission thereof or a
written notice required by paragraph (b) of this Section 3, and such Redemption
Demand, rescission or notice shall be of no force or effect, unless it is executed
in the name of the County Trustee by one of its Vice-Presidents.

 

Section
4.  Upon payment of the principal of and
premium, if any, and interest on the Revenue Bonds, whether at maturity or
prior to maturity by redemption or otherwise, and the surrender thereof to and
cancellation thereof by the County Trustee, or upon provision for the payment
thereof having been made in accordance with Article VIII of the County
Indenture, bonds of Series No. 16 in a principal amount equal to the principal
amount of the Revenue Bonds so surrendered and cancelled shall be surrendered
by the County Trustee to the Trustee, whereupon the bonds of said Series so
surrendered shall be deemed fully paid and the obligations of the Company
thereunder shall be terminated, and such bonds of said Series shall be
cancelled and destroyed by the Trustee by shredding, compacting or other
suitable means and a certificate of such cancellation and destruction shall be
delivered to the Company.  From and
after the Release Date (as defined below), the bonds of Series No. 16 shall be
deemed fully paid, satisfied and discharged and the obligations of the Company
hereunder and thereunder shall be terminated. 
The Release Date shall be the date that the Bond Insurer (as such term
is defined in the County Indenture), at the request of the Company, consents to
the release of the bonds of this Series, as security for the Revenue Bonds,
provided that in no event shall that date be later than the date as of which all bonds issued under the Indenture prior to the
date of initial issuance of the bonds of said Series (and excluding bonds of
said Series and First Mortgage Bonds, Pollution Control Series No. 11, No. 12,
No. 13, No. 14 and No. 15) have been retired through payment, redemption
or otherwise (including those Bonds “deemed to be paid” within the meaning of
that term used in Article XII of the Indenture) at, before or after the
maturity thereof.  On the Release Date,
the bonds of said Series shall be surrendered by the County Trustee to the
Trustee whereupon the bonds of Series No. 16 so surrendered shall be cancelled
by the Trustee.

 

9

 

ARTICLE II.

 

Section
1.  The bonds of Series No. 16 shall be
executed on behalf of the Company and sealed with the corporate seal of the
Company, all in the manner provided in or permitted by Section 6 of Article I
of the Indenture, as follows:

 

(a)           bonds of said Series executed on
behalf of the Company by its President or a Vice-President and by its Secretary
or an Assistant Secretary may be so executed by the manual or facsimile
signature of such President or Vice-President and of such Secretary or
Assistant Secretary, as the case may be, of the Company, or of any person or
persons who shall have been such officer or officers, as the case may be, of
the Company on or subsequent to the date of this supplemental indenture,
notwithstanding that he or they may have ceased to be such officer or officers
of the Company at the time of the actual execution, authentication, issue or
delivery of any of such bonds, and any such manual or facsimile signature or
signatures of such officer or officers of the Company, as above provided, on
any such bonds shall constitute execution of such bonds on behalf of the
Company by such officer or officers of the Company for the purposes of the
Indenture, as hereby modified and amended, and shall be valid and effective for
all purposes, provided that all bonds of said Series shall always be
executed on behalf of the Company by the manual or facsimile signature of its
President or a Vice-President and of its Secretary or an Assistant Secretary,
as above provided, and provided, further, that none of such
bonds shall be executed on behalf of the Company by the manual or facsimile
signature of the same officer or person acting in more than one capacity; and

 

(b)           such corporate seal of the Company
may be facsimile, and the bonds of said Series on which such facsimile seal of
the Company shall be affixed, impressed, imprinted or reproduced shall be deemed
to be sealed with the corporate seal of the Company for the purposes of the
Indenture as hereby modified and amended, and such facsimile seal shall be
valid and effective for all purposes.

 

ARTICLE III.

 

Section 10 of Article III of the Indenture is hereby further amended to
provide that the Company agrees to observe and comply with the provisions of
said section as so amended hereby so long as the bonds of Series No. 16 are
outstanding.  The bonds outstanding on
the date hereof to which said Section 10 applies are No. 8, Series P, Series Q,
Nos. 9, 10 and 11, Series R, Series S, and Nos. 12, 13, 14 and 15.

 

No covenant to provide a maintenance and renewal fund is made in
respect of the bonds of Series No. 16. 
The absence of such a covenant shall not, however, limit the right of
the Company to use, apply or certify bonds of Series No. 16 to comply with, or
to satisfy its obligations under, any provision of the Indenture (including,
without limitation, the provisions of Section 1 of Article VII of the Indenture).

 

The bonds of Series No. 16 are intended to be used as collateral for
and to secure payment of the Revenue Bonds, as hereinabove provided, and,
accordingly, the bonds of Series

 

10

 

No. 16 shall be dated as of the date of issuance of
the Revenue Bonds and shall bear interest from the Initial Interest Accrual
Date, as hereinabove provided, notwithstanding anything to the contrary
contained in the Indenture with respect to the dating of bonds and the date
from which interest on bonds shall accrue.

 

ARTICLE IV.

 

Section
1.  Capitalized terms used in this
Article IV and not otherwise defined in this Indenture shall have the meanings
set forth in the County Indenture.

 

Section
2.  Subsequent to the issuance of the
Revenue Bonds, the Company shall not be required to establish compliance with
the net earnings requirements of Section 5 of Article II of the Indenture in
connection with any Conversion of Interest Rate Mode on the Revenue Bonds or
any change in length of Long Term Rate Period. 
So long as the Revenue Bonds operate in any Interest Rate Mode other
than the Long Term Rate where the Long Term Rate Period ends on the day prior
to the final maturity of the Revenue Bonds, the Company shall include, for purposes
of any required calculation of such net earnings requirement (as such
requirement shall then be in effect), interest on the bonds of said Series at
an annual rate of 14%.  If at any time
the interest rate on the Revenue Bonds is a Long Term Rate where the Long Term
Rate Period ends on the day prior to the final maturity of the Revenue Bonds,
the Company may include, for purposes of any calculation of such net earnings
requirement, interest on the bonds of said Series at the Long Term Rate then
borne by the Revenue Bonds.

 

ARTICLE V.

 

Section
1.  The provisions of this supplemental
indenture shall be effective from and after the execution hereof; and the
Indenture, as hereby modified and amended, shall remain in full force and
effect.

 

Section
2.  Each holder or registered owner of a
bond of any series not now outstanding which shall be authenticated by the
Trustee and issued by the Company under the Indenture (as hereby amended)
subsequent to the execution of this supplemental indenture and of any coupon
pertaining to any such bond, by the acquisition, holding or ownership of such
bond and coupon, thereby consents and agrees to, and shall be bound by, the
provisions of this supplemental indenture.

 

Section
3.  Each reference in the Indenture, or
in this supplemental indenture, to any article, section, term or provision of
the Indenture shall mean and be deemed to refer to such article, section, term
or provision of the Indenture, as hereby modified and amended, except where the
context otherwise indicates.

 

Section
4.  All the covenants, provisions,
stipulations and agreements in this supplemental indenture contained are and
shall be for the sole and exclusive benefit of the parties hereto, their
successors and assigns, and of the holders and registered owners from time to
time of the bonds and of the coupons issued and outstanding from time to time
under and secured by the Indenture, as hereby modified and amended.

 

11

 

This supplemental indenture has been executed in a number of identical
counterparts, each of which so executed shall be deemed to be an original.

 

At the time of the execution of this supplemental indenture, the
aggregate principal amount of all indebtedness outstanding, or to be
outstanding, under and secured by the Indenture, as hereby modified and amended, is $580,830,000, consisting of and
represented by First Mortgage Bonds, Pollution Control Series No. 8, Series P,
Series Q, Pollution Control Series No. 9 and 10, Series R, Series S and Series
No. 11, No. 12, No. 13, No. 14, No. 15 and No. 16 of the Company, as follows:

 

	
  Series

  	
   

  	
  Interest

  Rate

  	
   

  	
  Maturity Date

  	
   

  	
  Principal

  Amount

  	
   

  
	
  No. 8

  	
   

  	
  7.45

  	
   

  	
  September 15, 2016

  	
   

  	
  96,000,000

  	
  (a)

  
	
  P

  	
   

  	
  7.92

  	
   

  	
  May 15, 2007

  	
   

  	
  53,000,000

  	
   

  
	
   

  	
   

  	
  8.55

  	
   

  	
  May 15, 2027

  	
   

  	
  33,000,000

  	
   

  
	
  Q

  	
   

  	
  6.32

  	
   

  	
  June 15, 2003

  	
   

  	
  62,000,000

  	
   

  
	
  No. 9

  	
   

  	
  5 3⁄4

  	
   

  	
  December 1, 2023

  	
   

  	
  50,000,000

  	
   

  
	
  No. 10

  	
   

  	
  Variable

  	
   

  	
  November l, 2024

  	
   

  	
  54,000,000

  	
   

  
	
  R

  	
   

  	
  7.55

  	
   

  	
  June 1, 2025

  	
   

  	
  50,000,000

  	
   

  
	
  S

  	
   

  	
  5.99

  	
   

  	
  January 15, 2006

  	
   

  	
  36,000,000

  	
   

  
	
  No. 11

  	
   

  	
  Variable

  	
   

  	
  May 1, 2023

  	
   

  	
  12,900,000

  	
   

  
	
  No. 12

  	
   

  	
  Variable

  	
   

  	
  February 1, 2032

  	
   

  	
  20,930,000

  	
   

  
	
  No. 13

  	
   

  	
  Variable

  	
   

  	
  February 1, 2032

  	
   

  	
  2,400,000

  	
   

  
	
  No. 14

  	
   

  	
  Variable

  	
   

  	
  February 1, 2032

  	
   

  	
  7,200,000

  	
   

  
	
  No. 15

  	
   

  	
  Variable

  	
   

  	
  February 1, 2032

  	
   

  	
  7,400,000

  	
   

  
	
  No. 16

  	
   

  	
  Variable

  	
   

  	
  October 1, 2032

  	
   

  	
  96,000,000

  	
  (b)

  

 

(a)                        To be paid and discharged not more than 90 days
after issuance of Pollution Control Series No. 16

 

(b)                       To be presently issued by the Company under the
Indenture, as hereby modified and amended.

 

All of said bonds of Series P, Series Q, Series R and Series S,
respectively, were sold by the Company to, and upon the issue thereof were
owned and held by, the corporations and partnerships whose names and residences
are stated in the Supplemental Indentures dated

 

12

 

May 15, 1992, June 15, 1993, June 1, 1995 and
January 15, 1996, respectively, executed by the Company to the Trustees under
said Indenture as heretofore modified and amended.

 

All of said bonds of Series No. 8 were heretofore issued and delivered
by the Company to, and upon the issuance thereof were held by, First Security
National Bank and Trust Company, One First Security Plaza, Lexington, Fayette
County, Kentucky 40507, as trustee (now succeeded by Bank One, Kentucky, N.A.).

 

All of said bonds of Series No. 9, and Series No. 10 were heretofore
issued and delivered by the Company to, and upon the issuance thereof were held
by, Bank One, Kentucky, N.A., 201 East Main Street, Lexington, Fayette County,
Kentucky 40507, as trustee.

 

All of said bonds of Series No. 11 were heretofore issued and delivered
by the Company to, and upon the issuance thereof were held by, The Bank of New
York, 101 Barclay Street, 21st Floor, New York, New York 10286.

 

All of said bonds of Series No. 12, No. 13, No. 14 and No. 15,
respectively, were heretofore issued and delivered by the Company to, and upon
the issuance thereof were held by, Deutsche Bank Trust Company Americas,
Corporate Trust & Agency Services, c/o DB Services New Jersey, Inc., 100
Plaza One, 6th Floor, Jersey City, New Jersey 07310, as trustee.

 

The Ninety-Six Million Dollars ($96,000,000) in principal amount of
bonds of Series No. 16 proposed to be issued by the Company under the Indenture
as hereby modified and amended, are to be issued and delivered by the Company
to, and upon the issuance thereof held by, Deutsche Bank Trust Company
Americas, Corporate Trust & Agency Services, c/o DB Services New Jersey,
Inc., 100 Plaza One, 6th Floor, Jersey City, New Jersey 07310, as County
Trustee.

 

13

 

IN WITNESS WHEREOF, said Kentucky Utilities Company has caused this
instrument to be executed in its corporate name by its President,
Vice-President or its Treasurer and its corporate seal to be hereunto affixed
and to be attested and countersigned by its Executive Vice President, General
Counsel and Corporate Secretary, and said U.S. Bank National Association, for
the purpose of entering into and joining with the Company in the execution of this
supplemental indenture, has caused this instrument to be executed in its
corporate name by one of its Assistant Vice-Presidents and to be attested by
one of its
                       ,
and said Richard Prokosch for the purpose of entering into and joining with the
Company in the execution of this supplemental indenture, has signed this
instrument; all as of the day and year first above written.

 

	
   

  	
  KENTUCKY UTILITIES COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Daniel K. Arbough

  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
  John R. McCall

  Executive Vice President,

  General Counsel and

  Corporate Secretary

  	
   

  	
   

  
	
   

  	
  (Corporate Seal)

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Julie Eddington

  Assistant
  Vice  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  RICHARD PROKOSCH

  	
   

  
							

 

14

 

	
  Commonwealth of Kentucky

  	
  }

  	
  SS:

  
	
   

  	
  }

  	
   

  
	
  County of Jefferson

  	
  }

  	
   

  

 

I,
                         ,
a Notary Public in and for said County in the Commonwealth aforesaid, do hereby
certify that Daniel K. Arbough, Treasurer of Kentucky Utilities Company, a
Kentucky and Virginia corporation, and John R. McCall, Executive Vice
President, General Counsel and Corporate Secretary of said corporation, who are
both personally known to me to be the same persons whose names are subscribed
to the foregoing instrument as such officers of said corporation, and who are
both personally known to me to be such officers, appeared before me this day in
person and severally acknowledged before me that they signed, sealed and delivered
said instrument as their free and voluntary act as such officers, and as the
free and voluntary act and deed of said corporation, for the uses and purposes
therein set forth; and said Daniel K. Arbough, upon oath, acknowledged himself
to be Treasurer of said corporation and that, as such officer, being authorized
so to do, he executed said instrument for the purposes therein contained, by
signing the name of said corporation thereto by himself as such officer.

 

Given under my hand and official seal this          
day of
              ,
2002.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission
  expires:                       

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Notarial Seal)

  	
   

  

 

15

 

	
  State of Minnesota

  	
  }

  	
  SS:

  
	
   

  	
  }

  	
   

  
	
  County of Ramsey

  	
  }

  	
   

  

 

I,
                                              ,
a Notary Public in and for said County in the State aforesaid, do hereby
certify that:

 

(a)           Julie Eddington, an
Assistant Vice President of U.S. Bank National Association, a national banking
association, and Frank Leslie, a Vice President of said corporation, who are
both personally known to me to be the same persons whose names are subscribed
to the foregoing instrument as such Assistant Vice President and Vice President
of said corporation, and who are both personally known to me to be such
officers, appeared before me this day in person and severally acknowledged
before me that they signed and delivered said instrument as their free and
voluntary act as such officers, and as the free and voluntary act and deed of
said corporation, for the uses and purposes therein set forth; and said Julie
Eddington upon oath, acknowledged herself to be an Assistant Vice President of
said corporation and that, as such officer, being authorized so to do, she
executed said instrument for the purposes therein contained, by signing the
name of said corporation thereto by herself as such officer; and

 

(b)           Richard Prokosch,
personally known to me to be the same person described in, and whose name is
subscribed to, the foregoing instrument, appeared before me this day in person
and acknowledged before me that he executed, signed and delivered said
instrument as his free and voluntary act and deed, for the uses and purposes
therein set forth.

 

Given under my
hand and official seal this
           day of
               ,
2002.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Notarial Seal)

  
	
   

  	
   

  

 

 

	
  This instrument prepared by:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  James Dimas, Esq.

  	
   

  
	
  220 West Main Street

  	
   

  
	
  Louisville, Kentucky 40202

  	
   

  

 

16Exhibit
10.54

 

EXECUTION
COPY

 

EMPLOYMENT AND SEVERANCE AGREEMENT

 

 

THIS AGREEMENT
made February 25, 2000, by and between LG&E Energy Corporation, a Kentucky
corporation (the “Company”), Powergen, plc, a United Kingdom public limited
company (“Parent”), and John R. McCall (the “Executive”).

 

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

 

WHEREAS, the
Merger will constitute a “Change in Control” for purposes of the Change-in-Control
Agreement between the Company and the Executive dated January 5, 1998 (the
“Change-In-Control Agreement”);

 

WHEREAS, Parent
and the Company have determined that it is essential and in the best interest
of Parent, the Company and their stockholders to retain the services of the
Executive as [ TITLE ] of the Company on and after the Effective Time, and
provide the Executive with compensation and other benefits on the terms and
conditions set forth in this Agreement, and to ensure his continued dedication
and efforts in such event without undue concern for his personal financial and
employment security in the event of a Change in Control after the Merger; and

 

WHEREAS, the
Executive is willing to accept such employment and perform services for the
Company on the terms and conditions hereinafter set forth;

 

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

 

1.                                       EFFECTIVENESS;
EFFECT ON PRIOR AGREEMENTS; ADDITIONAL PAYMENTS.

 

1.1.                              This
Agreement shall become effective at the Effective Time, provided the Executive
is employed by the Company on that date. 
As of the Effective Time, the Change-in-Control Agreement shall, except
as otherwise provided herein, terminate and become null and void.  In consideration of the services rendered by
the Executive to the Company prior to the Effective Time, the Executive’s
willingness to enter into this Agreement, and the satisfaction of all of the
Company’s obligations under the Change-in-Control Agreement, the Company shall
pay the Executive in cash 60% of the amount calculated and payable under
Sections 3.1(b) and 6 of the Change-in-Control Agreement

 

 

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

 

1.2.                              Parent
shall, or shall cause the Company to pay to the Executive a lump sum cash
payment in an amount equal to 25% of the Deferred Change-in-Control Payment
(without adjustment for any increases or decreases in Executive’s account under
the Deferred Compensation Plan)(the “Premium Payment”) within ten (10) days
after the earliest to occur of (i) the date that Executive’s employment is
terminated by the Company without Cause, by Executive for Good Reason, or as a
result of Executive’s death or Disability, at any time during the eighteen
consecutive months immediately following the Effective Time (the “Transition
Period”), (ii) a Change in Control that occurs during the Transition Period, so
long as the Executive is still employed by the Company immediately prior to the
Change in Control, and (iii) the end of the Transition Period, so long as the
Executive is still employed on such date. 
In the event that Executive elects not to receive the foregoing lump sum
payment, Executive may otherwise elect to defer receipt of such payment and
have such payment continue to be held in his Deferred Compensation Plan account
(which account shall continue to be adjusted in accordance with the terms of
the Deferred Compensation Plan, or such other plan or arrangement as may be
mutually agreed upon by the parties hereto).

 

1.3.                              As
of the Effective Time, Parent shall grant to the Executive the number of
American Depository Shares of Parent, each of which represents four Ordinary
Shares of

 

2

 

the Parent (the “ADS’s”), that are equivalent in value, as of the
Effective Time, to the amount of the Premium Payment (the “Premium ADS’s”),
which shall be subject to a risk of forfeiture and in which the Executive shall
become vested upon the earliest to occur of (i) the date that Executive’s
employment is terminated by the Company without Cause, by Executive for Good
Reason, or as a result of Executive’s death or Disability, at any time during
the Transition Period, (ii) a Change in Control that occurs during the
Transition Period, so long as the Executive is still employed immediately prior
to the Change in Control, and (iii) the end of the Transition Period, so long
as the Executive is still employed on such date.  In addition, in the event that during the Transition Period,
Parent pays dividends in respect of ADS’s (or Ordinary Shares, as applicable)
to its holders thereof, the Executive shall have a right, subject to the
Executive’s ultimate vesting in the Premium ADS’s pursuant to the preceding
sentence, to receive a payment, in cash or ADS’s (as the Executive shall
elect), equal to the amount of any dividends actually paid on the number of
Premium ADS’s (or Ordinary Shares, as applicable) held by the Executive.

 

2.                                       TERM
OF AGREEMENT.  This Agreement shall
commence as of the Effective Time, and shall continue in effect until the
second anniversary of the Effective Time; provided, however, that commencing on
the second anniversary of the Effective Time, and on each anniversary of the
Effective Time thereafter, the term of this Agreement shall automatically be
extended for one (1) year unless the Company or the Executive shall have given
written notice to the other at least ninety days prior thereto (if such notice
is given following the second anniversary of the Effective Time, otherwise such
notice period shall be one hundred and eighty days) that the term of this
Agreement shall not be so extended; and provided, further, however, that
notwithstanding any such notice by the Company not to extend, the term of this
Agreement shall not expire prior to the expiration of twenty-four (24) months
after any Change in Control which occurs while this Agreement is in effect.

 

3.                                       EMPLOYMENT.

 

0.1.                              The
Company agrees to employ Executive, and Executive agrees to serve  during the term hereof as Executive Vice
President, General Counsel, and Corporate Secretary of the Company.  Executive shall report to the Chief
Executive Officer of the Company (the “CEO”).

 

0.2.                              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 the position named above.  Executive shall perform such duties and
exercise such powers, commensurate with his position, as the CEO and the Board
of Directors of the Company (the “Board”) shall from time to time assign to him
on such terms and conditions and subject to such

 

3

 

restrictions as the CEO and the Board may reasonably from time to time
impose.

 

0.3.                              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 5% 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.

 

0.4.                              The
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 (including travel to the United Kingdom) for the
performance of his duties under this Agreement .

 

1.                                       COMPENSATION.

 

1.1.                              SALARY.  The Company shall pay Executive a base
salary (“Base Salary”) of not less than the rate in effect immediately prior to
the Effective Time.  The Base Salary
shall be payable in accordance with the ordinary payroll practices of the Company.  The Base Salary shall be reviewed by the
Board as of July 1 of each year during the term of this Agreement and may be
increased in the discretion of the Board and, as so increased, shall constitute
“Base Salary” hereunder.  At no time
shall the Board be able to decrease the Base Salary.

 

1.2.                              ANNUAL
BONUS.  In addition to his Base Salary,
Executive shall be eligible to participate in any annual incentive plan or
program maintained by the Company 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. 
The Executive’s target bonus under the Bonus Plan in respect of each
twelve-month period of the term of this Agreement (as provided for in Section
2)(each, a “Contract Year”) shall be not less than the target bonus opportunity
to which the Executive is entitled as of the date hereof  (50% of the Base Salary); provided, however,
that with respect to the first and second Contract Years, Executive’s annual
bonus amount shall not be less than 75% of the Executive’s target bonus for
each such Contract Year.  Except as set
forth in the preceding sentence, nothing in this Section 4.2 will guarantee to
the Executive any specific amount of incentive compensation, or prevent a
Remuneration Committee appointed by the Board of Directors of Parent from

 

4

 

establishing reasonable performance goals and compensation targets,
after consultation with the Executive, applicable only to the Executive.

 

1.3.                              COMPENSATION
PLANS AND PROGRAMS. Executive shall be eligible to participate in any
compensation plan or program maintained by the Company 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 Parent’s and
partially on the Company’s performance in accordance with the general terms of
the long-term incentive plan contained on Exhibit A.

 

1.4.                              OTHER
COMPENSATION.  Nothing in this Section 4
will preclude the Board from authorizing such additional compensation to the
Executive, in cash or in property, as the Board may determine in its sole
discretion to be appropriate.

 

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

 

5

 

employment, one additional ADS for every 4 ADS’s (A) acquired by the
Executive as a result of the exercise of any Company Option during the period
prior to such termination of employment and (B) underlying each unexercised
Company Option held by the Executive immediately prior to such termination of
employment.

 

2.                                       EMPLOYEE
BENEFITS.

 

2.1.                              EMPLOYEE
BENEFIT PROGRAMS, PLANS AND PRACTICES. 
The Company shall provide Executive during the term of his employment
hereunder with coverage under all employee pension and welfare benefit
programs, plans and practices including, but not limited to, those specified in
Exhibit B 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.

 

2.2.                              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 perquisites and other fringe benefits
that are comparable to those perquisites and fringe benefits to which Executive
is entitled immediately prior to the Effective Time.

 

2.3.                              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.  The
Company 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.

 

4.                                       DEFINITIONS.

 

4.1.                              BASE
AMOUNT; BONUS AMOUNT.  For purposes of
this Agreement, “Base Amount” shall mean the greater of the Executive’s annual
base salary from the Company (a) at the rate in effect on the Termination Date
(as hereinafter defined) or (b) at the highest rate in effect at any time during
the ninety (90) day period prior to the Effective Time or the Change in
Control, as applicable, and shall include all amounts of base salary that are
deferred under any qualified and non-qualified employee benefits plans of the
Company or any Subsidiary (as hereinafter defined) or under any other agreement
or arrangement.  For purposes of this
Agreement; “Bonus Amount” shall mean the greater of (a) the most recent annual
bonus paid or payable to the Executive (which may include a bonus amount paid
or payable in respect of any Contract Year), (b) the

 

6

 

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

 

4.2.                              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 of Directors of
the Company that (i) there has been repeated willful misconduct by the
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) the
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 the Executive after a Notice of Termination (as
hereinafter defined) is given by the 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.

 

2.4.                              CHANGE
IN CONTROL.  For purposes of this
Agreement, a “Change in Control” shall mean the occurrence during the term of
this Agreement of any of the following events:

 

(1)                                  An
acquisition (other than directly from Parent) of any securities of Parent
entitled generally to vote on the election of directors (the “Voting Securities”)
by any “Person” (as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”))
immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of fifteen percent
(15%) or more of the combined voting power of Parent’s then outstanding Voting
Securities; PROVIDED, HOWEVER, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a “Non-Control Acquisition”
(as hereinafter defined) shall not constitute an acquisition which would cause
a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by
(1) an employee benefit plan (or a trust forming a part thereof) maintained by
(a) Parent or (b) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly and
indirectly by Parent (a “Subsidiary”) or (2) Parent or any Subsidiary.

 

7

 

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

 

(3)                                  Approval
by stockholders of Parent of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

4.3.                              DISABILITY.  For purposes of this Agreement, “Disability”
shall mean a physical or mental infirmity which impairs the Executive’s ability
to substantially perform his duties with the Company which continues for a
period of at least one hundred eighty (180) consecutive days.

 

4.4.                              GOOD
REASON.

 

(1)                                  For
purposes of this Agreement, “Good Reason” shall mean the occurrence of any of
the events or conditions described in subsections (1) through (8) hereof:

 

(1)                                  a
reduction by the Company in the Executive’s Base Salary or annual target bonus
opportunity as in effect prior to such reduction or any failure to pay the
Executive any compensation or benefits to which the Executive is entitled
within thirty days of the applicable due date, provided that the Company may
correct such reduction or failure within thirty (30) days of its commission;

 

(2)                                  Parent
or the Company require the Executive to be relocated anywhere in excess of
fifty (50) miles of his present office location, except for required travel on
Parent or Company business consistent with his business travel

 

9

 

obligations as in effect prior to the Effective Time and as provided in
Section 3.4 of this Agreement;

 

(3)                                  a
failure by Parent or the Company to maintain plans providing benefits at least
as beneficial in the aggregate as those provided by any benefit or compensation
plan, retirement or pension plan, stock option plan, bonus plan, long-term
incentive plan, life insurance plan, health and accident plan or disability
plan in which the Executive is participating prior to the Effective Time, or
the Change in Control, as applicable, or if the Company or Parent has taken any
action which would adversely affect the Executive’s participation in or
materially reduce the Executive’s benefits under any of such plans or deprive
him of any material fringe benefit enjoyed by him prior to the Effective Time,
or the Change in Control, as applicable, or if the Company or Parent has failed
to provide him with the number of paid vacation days to which he would be
entitled in accordance with the Company’s normal vacation policy immediately
prior to the Effective Time, or the Change in Control, as applicable;

 

(3)                                  Parent
or the Company materially reduces, individually or in the aggregate, the
Executive’s title, job authorities or responsibilities as in effect prior to
such reduction;

 

(4)                                  Parent
or the Company fails to obtain the assumption of the obligations contained in
this Agreement by any successor as contemplated in Section 11 hereof;

 

(5)                                  any
purported termination of the Executive’s employment by Parent or the Company
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 8 below; and, for purposes of this Agreement, no
such purported termination shall be effective;

 

(6)                                  any
material breach by Parent or the Company of any provision of this Agreement;

 

(7)                                  any
purported termination of the Executive’s employment for Cause by Parent or the
Company which does not comply with the terms of Section 6.2 of this Agreement;
or

 

(2)                                  Until
the Executive’s Disability, the Executive’s rights to terminate his employment
pursuant to this Section  6.5 shall not be affected by his incapacity due
to physical or mental illness.

 

10

 

5.                                       TERMINATION
OF EMPLOYMENT.

 

5.1.                              If,
during the term of this Agreement, the Executive’s employment with the Company
shall be terminated within twenty-four months after the effective time of any
Change in Control, then the Executive shall be entitled to the following
compensation and benefits:

 

(1)                                  If
the Executive’s employment with the Company shall be terminated (1) by Parent
or the Company for Cause or (2) by the Executive (other than for Good Reason or
as a result of death or Disability), the Company shall pay the Executive all
amounts earned or accrued for or on behalf of the Executive through the
Termination Date (as hereinafter defined) but not paid as of the Termination
Date, including (i) Base Salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the Executive on behalf of the Company during the period
ending on the Termination Date and (iii) vacation pay (collectively, “Accrued
Compensation”).

 

(2)                                  If
the Executive’s employment with the Company shall be terminated (1) as a result
of the Executive’s death or (2) as a result of the Executive’s Disability, the
Executive shall be entitled to the following: (i) The Company shall pay the
Executive all Accrued Compensation; (ii) the Company shall pay, as a severance
amount to the Executive (or his or her personal representative or estate, as
applicable) after the Termination Date, an amount equal to the Executive’s
annual target bonus for the year in which such Termination Date occurs; and
(iii) the Company shall provide the Executive with a cash lump sum payment of
any long-term incentive award granted to the Executive at the target level,
prorated for Executive’s actual period of service.

 

(3)                                  If  the Executive’s employment with the Company
shall be terminated (1) by the Company for any reason (including as a result of
the Company’s notice not to extend the term of this Agreement) other than as
specified in clause (1) of Section 7.1(a) or (2) by the Executive for Good
Reason, the Executive shall be entitled to the following:

 

(1)                                  The
Company shall pay the Executive all Accrued Compensation;

 

(2)                                  The
Company shall pay, as a severance amount to the Executive after the Termination
Date, an amount equal to 2.99 times the sum of (a) the Base Amount and (b) the
Bonus Amount;

 

(3)                                  For
a period of thirty-six months (the “Continuation Period”), the Company shall at
its expense continue on behalf of the Executive and his dependents and
beneficiaries (to the same extent provided to the dependents and beneficiaries
prior to the Executive’s termination) the life insurance, disability, medical,
dental, and hospitalization benefits provided (x) to the Executive by the
Company at any

 

11

 

time within ninety (90) days preceding a Change in Control or at any
time thereafter, or (y) to other similarly situated executives who continue in
the employ of the Company during the Continuation Period. The coverage and
benefits (including deductibles and costs) provided in this Section 7.1(c)
(iii) during the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries, than the most favorable of such
coverages and benefits set forth in clauses (x) and (y) above. The Company’s
obligation hereunder with respect to the foregoing benefits shall be limited to
the extent that the Executive obtains any such benefits pursuant to a
subsequent employer’s benefit plans, in which case the Company may reduce the
coverage of any benefits it is required to provide the Executive hereunder as long
as the aggregate coverages and benefits of the combined benefit plans are no
less favorable to the Executive than the coverages and benefits required to be
provided hereunder.  This
Subsection (c)(iii) shall not be interpreted so as to limit any benefits
to which the Executive or his dependents may be entitled under any of the
Company’s or any Subsidiary’s employee benefit plans, programs or practices
following the Executive’s termination of employment, including without
limitation, retiree medical and life insurance benefits; and

 

(4)                                  The
Company shall provide to the Executive an amount equal to twenty percent (20%)
of the Base Amount to be used for outplacement services.

 

5.2.                              If,
during the term of this Agreement, but prior to a Change in Control, the
Executive’s employment with the Company shall be terminated, the Executive
shall be entitled to the following:

 

(1)                                  If
the Executive’s employment with the Company shall be terminated (1) by Parent
or the Company for Cause or (2) by the Executive (other than for Good Reason or
as a result of death or Disability), the Company shall pay the Executive all
Accrued Compensation.

 

(2)                                  If
the Executive’s employment with the Company shall be terminated (1) as a result
of the Executive’s death or (2) as a result of the Executive’s Disability, the
Executive shall be entitled to the following: (i) The Company shall pay the
Executive all Accrued Compensation; (ii) the Company shall pay, as a severance
amount to the Executive (or his or her personal representative or estate, as
applicable) after the Termination Date, an amount equal to the Executive’s
annual target bonus for the year in which such Termination Date occurs.; and
(iii) the Company shall provide the Executive with a cash lump sum payment of
any long-term incentive award granted to the Executive at the target level,
prorated for Executive’s actual period of service.

 

(3)                                  If
the Executive’s employment with the Company shall be terminated (1) by the
Company for any reason (including as a result of the Company’s notice not to
extend the term of this Agreement) other than as specified in clause (1)
of

 

12

 

Section 7.2(a) or (2) by the Executive for Good Reason, the
Executive shall be entitled to the following:

 

(1)                                  The
Company shall pay the Executive all Accrued Compensation;

 

(2)                                  The
Company shall pay, as a severance amount to the Executive after the Termination
Date, an amount equal to the sum of (a) the Base Amount and (b) the Bonus
Amount, divided by twelve, the quotient of which shall be multiplied by the
greater of (x) twelve and (y) the number of months remaining in the term of
this Agreement;

 

(3)                                  For
a period of twenty-four (24) months (the “Continuation Period”), the Company
shall at its expense continue on behalf of the Executive and his dependents and
beneficiaries (to the same extent provided to the dependents and beneficiaries
prior to the Executive’s termination) the life insurance, disability, medical,
dental, and hospitalization benefits provided to other similarly situated
executives who continue in the employ of the Company during the Continuation
Period.  The Company’s obligation
hereunder with respect to the foregoing benefits shall be limited to the extent
that the Executive obtains any such benefits pursuant to a subsequent
employer’s benefit plans, in which case the Company may reduce the coverage of
any benefits it is required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit plans are no less
favorable to the Executive than the coverages and benefits required to be
provided hereunder. This Subsection (c)(iii) shall not be interpreted so
as to limit any benefits to which the Executive or his dependents may be
entitled under any of the Company’s or any Subsidiary’s employee benefit plans,
programs or practices following the Executive’s termination of employment,
including without limitation, retiree medical and life insurance benefits; and

 

(4)                                  The
Company shall provide to the Executive an amount equal to twenty percent (20%)
of the Base Amount to be used for outplacement services.

 

5.3.                              The
amounts provided for in Section 7.1(a), 7.1(b) (i) and (ii), 7.1(c) (i), (ii)
and (iv), 7.2(a),  7.2(b)(i) and (ii)
and 7.2(c) (i), (ii) and (iv) shall be paid in cash in a lump sum within thirty
(30) days after the Executive’s Termination Date.

 

5.4.                              The
Executive shall not be required to mitigate the amount of any payments 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 the Executive in any subsequent employment except as provided in
Sections 7.1(c) (iii) and 7.2(c)(iii).

 

13

 

5.5.                              The
provisions of this Agreement, and any payment provided for hereunder, shall not
reduce any amounts otherwise payable, or in any way diminish the Executive’s
existing rights, or rights which would accrue solely as a result of the passage
of time, under any benefit plan, incentive plan, or securities plan, employment
agreement or other contract, plan or arrangement with the Company, any
Subsidiary or any other party, including, but not limited to, those specified
in Exhibit B attached hereto, provided, however, the Company shall not be
required to make duplicative payments of Accrued Compensation, and provided
further that, upon execution of this Agreement, Executive shall not have any
rights under his prior Change-In-Control Agreement (other than with respect to
Section 6 of such Agreement), as previously amended, which agreement (as stated
in Sections 1 and 22 hereof) is superseded by this Agreement.

 

6.                                       NOTICE
OF TERMINATION. Any purported termination by Parent or the Company or by the
Executive shall be communicated by written Notice of Termination to the other.
For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which indicates the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated. For purposes of this Agreement, no such purported
termination shall be effective without such Notice of Termination.

 

7.                                       TERMINATION
DATE. “Termination Date” shall mean, in the case of the Executive’s death, his
date of death and, in all other cases, the date specified in the Notice of
Termination subject to the following:

 

(1)                                  If
the Executive’s employment is terminated by Parent or the Company for Cause or
due to Disability, the date specified in the Notice of Termination shall be at
least thirty (30) days from the date the Notice of Termination is given to the
Executive, provided that, in the case of Disability, the Executive shall not
have returned to the full-time performance of his duties during such period of
at least (30) days; and

 

(2)                                  If
the Executive’s employment is terminated for Good Reason, the date specified in
the Notice of Termination shall not be more than sixty (60) days from the date
the Notice of Termination is given to Parent or the Company.

 

8.                                       CERTAIN
ADDITIONAL PAYMENTS

 

(1)                                  Notwithstanding
anything in the Agreement to the contrary, in the event that it is determined
(as hereafter provided) that any payment or distribution by the Company or any
affiliates 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,

 

14

 

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 the
Executive shall be entitled to receive an additional payment or payments
(individually and collectively, a “Gross-Up Payment”). The Gross-Up Payment
shall be in an amount such that, after payment by the 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, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payment.

 

(2)                                  Subject
to the provisions of Section 10(f) hereof, all determinations required to
be made under this Section 10, including whether an Excise Tax is payable
by the 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 the Executive in his sole discretion. The
Executive shall direct the Accounting Firm to submit its determination and
detailed supporting calculations to both the Company and the Executive within
thirty (30) calendar days after the Termination Date, if applicable, and any
such other time or times as may be requested by the Company or the Executive.
If the Accounting Firm determines that any Excise Tax is payable by the
Executive, the Company shall pay or cause to be paid the required Gross-Up
Payment in cash to the Executive within five (5) business days after receipt of
such determination and calculations with respect to any Payment to the
Executive. If the Accounting Firm determines that no Excise Tax is payable by
the Executive, it shall, at the same time as it makes such determination,
furnish the Company and the Executive an opinion that the 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 Gross-Up Payments which will not have been made by the Company should have
been made (an “Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts or fails to pursue its
remedies pursuant to Section 10(f) hereof and the Executive thereafter is
required to make a payment of any Excise Tax, the 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
the Company and the Executive as promptly as possible. Any such Underpayment

 

15

 

shall be promptly paid by the Company in cash to, or for the benefit
of, the Executive within five (5) business days after receipt of such
determination and calculations.

 

(3)                                  The
Company and the Executive shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
the 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 10(b) hereof. Any determination by the Accounting Firm as to the
amount of the Gross-Up Payment will be binding on the Company and the
Executive.

 

(4)                                  The
federal, state, and local income or other tax returns filed by the 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 the Executive. The
Executive will make proper payment of the amount of any Excise Payment and, at
the request of the Company, provide to the Company true and correct copies
(with any amendments) of the Executive’s federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of the 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, the
Executive will within five (5) business days pay to the Company the amount of
such reduction.

 

(5)                                  The
fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by Section 10(b) hereof
shall be borne by the Company. If such fees and expenses are initially paid by
the Executive, the Company shall reimburse the Executive the full amount of
such fees and expenses within five (5) business days after receipt from the
Executive of a statement therefor and reasonable evidence of his payment
thereof.

 

(6)                                  The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service or any other taxing authority that, if successful, would
require the payment by the Company of a Gross-Up Payment. Such notification
shall be given as promptly as practicable but no later than ten (10) business
days after the Executive actually receives notice of such claim and the
Executive shall further apprise the Company 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 the Executive). The Executive shall not pay such claim prior to the
earlier of (i) the expiration of the thirty (30) calendar-day period following
the date on which he gives such notice to the Company and (ii) the date that any
payment of amount with respect to such claim is due. If the Company notifies
the

 

16

 

Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:

 

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

 

(2)                                  take
such action in connection with contesting such claim as the Company 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 the
Company;

 

(3)                                  cooperate
with the Company in good faith in order effectively to contest such claim; and

 

(4)                                  permit
the Company to participate in any proceedings relating to such claim;

 

provided, however, that
the Company 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 the 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 10(f), the Company shall control all proceedings taken in
connection with the contest of any claim contemplated by this
Section 10(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 the Executive may
participate therein at his own cost and expense) and may, at its option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the 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 the Company shall
determine; provided, however, that if the Company directs the Executive to pay
the tax claimed and sue for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free basis and shall indemnify and
hold the 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
the Executive with respect to which the contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company’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 the Executive shall be entitled
to settle or

 

17

 

contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

 

(7)                                  If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 10(f) hereof, the Executive receives any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements of Section 10(f) hereof) promptly pay the Company
the amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced by the Company pursuant to Section 10(f) hereof, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial or refund prior to the expiration
of thirty (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 the Company to the Executive pursuant to this
Section 10.

 

9.                                       SUCCESSORS;
BINDING AGREEMENT.

 

(1)                                  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”, “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 the Company (including this
Agreement) whether by operation of law or otherwise.

 

(b)                               Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by the 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 the Executive’s legal personal
representative.

 

10.                                 FEES
AND EXPENSES.  The Company shall pay all legal fees and related expenses
(including the cost of experts, evidence and counsel) incurred by the Executive
involving (a) the 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) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement.

 

18

 

11.                                 NOTICE.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement (including the
Notice of Termination) shall be in writing and shall be deemed to have been
duly given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to Parent or the Company
shall be directed to the attention of the Board with a copy to the Secretary of
Parent or the Company. All notices and communications shall be deemed to have
been received on the date of delivery thereof or on the third business day
after the mailing thereof, except that notice of change of address shall be
effective only upon receipt.

 

12.                                 NON-EXCLUSIVITY
OF RIGHTS.  Nothing in this Agreement
shall prevent or limit the Executive’s continuing or future participation in
any benefit, bonus, incentive or other plan or program provided by the Company
and for which the Executive may qualify, nor shall anything herein limit or
reduce such rights as the Executive may have under any other agreements with
the Company.  Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company shall be payable in accordance with such plan or
program.

 

13.                                 SETTLEMENT
OF CLAIMS.  The Company’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 the Company may have against the Executive or others.

 

14.                                 MISCELLANEOUS.  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 the Executive, Parent 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 the Executive shall be
deemed to modify or otherwise affect the terms of this Agreement or any of the
Executive’s entitlements hereunder.

 

15.                                 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 laws.

 

19

 

16.                                 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.

 

30                                    NONSOLICITATION.

 

(0)                                  The
Executive hereby covenants and agrees that, at all times during the period of
his employment and during the Restricted Period (as hereinafter defined)
immediately following termination for any reason (unless such termination
occurs after a  Change in Control), the
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, customer,
(“Client”) of the Parent or the Company or any of their subsidiaries to
transact any business with a Competitive Enterprise (as hereinafter defined) or
discontinue business, in whole or in part with the Parent or the Company; or
(ii) willfully or intentionally interfere with or damage any relationship
between a Client and the Parent or the Company.

 

(1)                                  The
Executive hereby covenants and agrees that, at all times during the period of his
employment and during the Restricted Period immediately following the
termination thereof for any reason (unless such termination occurs after a
subsequent Change in Control), the Executive shall not, without the prior
written consent of the Board, solicit any person employed at that time by the
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 the Parent, the Company or any of their
subsidiaries.

 

(2)                                  For
purposes of this Agreement, (i) the term “Restricted Period” shall equal one
year, provided that if  Executive’s
employment is terminated within eighteen months of the Effective Time for any
reason other than a termination for Cause, the Restricted Period shall equal
six months and (ii) the term “Competitive Enterprise” shall mean any business
which is in competition with a business engaged in by the 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 preceding
sentence, the Executive shall not be prohibited from owning less than five (5%)
percent of any publicly traded corpor­ation, and if Executive’s termination of
employment shall occur within eighteen months of the Effective Time for any
reason other than a termination for Cause, “Competitive Enterprise” shall mean
any business which is in competition with a business engaged in by the Parent,
the Company or any of its subsidiaries or affiliates in any state 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 or in any state contiguous to
such state.

 

20

 

(3)                                  It
is the intention of the parties hereto that the restrictions contained in this
Section 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 paragraph (a) of this Section applies and the restrictions
shall remain applicable in all other states of the United States and foreign
jurisdictions.

 

17.                                 CONFIDENTIAL
INFORMATION

 

The Executive
agrees to keep secret and retain in the strictest confidence all confidential
matters which relate to the Parent, the Company, its subsidiaries and affiliates,
including, without limitation, customer lists, client lists, trade secrets,
pricing policies and other business affairs of the Parent, the Company, its
subsidiaries and affiliates learned by him from the Parent, the Company or any
such subsidiary or affiliate or otherwise before or after the date of this
Agreement, and not to disclose any such confidential matter to anyone outside
the 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
the 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.  The Executive agrees to give the 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
the Parent or the Company to limit the extent of such disclosure.  Upon request by the Parent or the Company,
the Executive agrees to deliver promptly to the Parent or the Company upon
termination of his services for the Company, or at any time thereafter as the
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 the
Parent or the Company’s or any subsidiary’s or affiliate’s business and all
property of the 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.

 

21

 

18.                                 REMEDY

 

Should the
Executive engage in or perform, either directly or indirectly, any of the acts
prohibited by Sections 19 or 20 hereof, it is agreed that the Parent and
the Company shall be entitled to full injunctive relief, to be issued by any
competent court of equity, enjoining and restraining the 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 the Parent and the Company
shall not be deemed to limit or prevent the exercise by the Parent or the
Company of any or all further rights and remedies which may be available to the
Parent or the Company hereunder or at law or in equity.

 

19.                                 ENTIRE
AGREEMENT.  This Agreement constitutes
the entire agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or written, between
the parties hereto with respect to the subject matter hereof, including,
without limiting the foregoing, his prior Change-In-Control Agreement, as
previously amended, which shall cease to be of any further effect.

 

22

 

IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized representative and the
Executive has executed this Agreement as of the day and year first above
written.

 

	
   

  	
  POWERGEN PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /signed/

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LG&E ENERGY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. W. Hale

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  /s/ John R. McCall

  	
   

  
	
   

  	
  John R. McCall

  
				

 

23

 

EXHIBIT B

 

TO

 

CHANGE-IN-CONTROL
AGREEMENT

 

 

1.                                       Omnibus
Long-Term Incentive Plan

 

2.                                       Short-Term
Incentive Plan

 

3.                                       Qualified
Thrift Plan

 

4.                                       Nonqualified
Thrift Plan

 

5.                                       LG&E
Energy Corporation Retirement Income Plan for Employees Who Are Not Members of
a Bargaining Unit

 

6.                                       LG&E
Energy Corporation Supplemental Executive Retirement Plan

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