Exhibit 10.75
CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT made this DATE, by and between LG&E ENERGY CORP. (the
"Company") and NAME (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the occurrence of a Change in Control can result in significant
distractions of its key management personnel because of the uncertainties
inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to retain the services of the
Executive in the event of a Change in Control and to ensure his continued
dedication and efforts in such event without undue concern for his personal
financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company or a Subsidiary (as hereinafter defined), as the case may be,
particularly in the event of a threat or the occurrence of a Change in Control,
the Company desires to enter into this Agreement with the Executive to provide
the Executive with certain benefits in the event his employment is terminated as
a result of, or in connection with, a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of the _____ day
of _________________, 1998, and shall continue in effect until SAME MONTH/DAY,
2000, provided, however, that commencing on SAME MONTH/DAY, 2000, and on SAME
MONTH/DAY thereafter, the term of this Agreement shall automatically be extended
for one (1) year unless either the Company or the Executive shall have given
written notice to the other at least ninety (90) days prior thereto 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 the later to occur of: (i) any Change in Control which occurs while
this Agreement is in effect or (ii) the Effective Time.
2. DEFINITIONS.
2.1 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 and its Subsidiaries (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 Change in Control, 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 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, (b) the annual bonus
paid or payable to the Executive under the Short Term Incentive Plan for the
full fiscal year ended prior to the fiscal year during which a Change in
Control occurred or (c) the Executive's target award under the Short Term
Incentive Plan for the full fiscal year ended prior to the fiscal year during
which a Change in Control occurred.
2.2 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 that (i) there has been repeated
gross negligence by the Executive in performing the reasonably assigned
duties on behalf of an Employer required by and in accordance with his
employment by such Employer, or (ii) the Executive has committed 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 seventy-five percent
(75%) of the Board 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.
2.3 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:
(a) An acquisition (other than directly from the Company) of any
securities of the Company entitled generally to vote on the election of
directors (the "Voting Securities") by any "Person" (as the term person in
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 0000 Xxx) of fifteen percent (15%) or more of the combined voting power
of the Company'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) the
Company or (b) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly
and indirectly by the Company (a "Subsidiary") or (2) the Company or any
Subsidiary.
(b) The individuals who, as of the date this Agreement was
approved by the Board, are members of the Board (the "Incumbent Board"),
cease for any reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for election by the
Company'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;
PROVIDED FURTHER, HOWEVER, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result
of either an actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the 0000 Xxx) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
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(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization involving the
Company; unless
(i) the stockholders of the Company 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 as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, and
(ii) 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 the Company; or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing clauses (a), (b), and (c), a Change in Control
shall not be deemed to occur solely because any Person (the "Subject Person")
acquired Beneficial Ownership of more than the permitted amount of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company, the
Subject Person 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.
(d) 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.
2.4 DISABILITY. For purposes of this Agreement, "Disability" shall mean
(i) a physical or mental infirmity which has been determined to be total and
permanent disability under and in accordance with the provisions of the
Company's Long Term Disability Plan for Employees of
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Louisville Gas and Electric Company who are not members of a Bargaining Unit
or (ii) in the event the Company does not maintain such plan at the time of
the determination of the Executive's Disability, a physical or mental
infirmity which impairs the Executive's ability to substantially perform his
duties with an Employer which continues for a period of at least one hundred
eighty (180) consecutive days.
2.5 AN EMPLOYER. For the purposes of this Agreement, "an Employer" shall
mean: (i) in the event the Executive is an officer of the Company and not of any
of its Subsidiaries at the time of a Change in Control, the Company; (ii) in the
event the Executive is an officer of one or more Subsidiaries of the Company,
but not of the Company, at the time of a Change in Control, any such Subsidiary;
and (iii) in the event the Executive is an officer of the Company and one or
more Subsidiaries at the time of a Change in Control, any such entity of which
the Executive is an officer at the time of the Change in Control.
2.6 GOOD REASON.
(a) For purposes of this Agreement, "Good Reason" shall mean the
occurrence after a Change in Control of any of the events or conditions
described in subsections (1) through (11) hereof:
(1) a reduction by an Employer in the Executive's base salary in
effect immediately prior to the Change in Control or any failure to pay the
Executive any compensation or benefits to which the Executive is entitled within
five days of the due date;
(2) an Employer requires the Executive to be relocated anywhere
in excess of fifty (50) miles of his present office location, except for
required travel on an Employer's business to an extent substantially consistent
with his present business travel obligations;
(3) a failure by the Company and its Subsidiaries to maintain
plans providing benefits at least as beneficial 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 at the time of a Change
in Control, or if the Company or any Subsidiary 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 at the time of the Change in Control, or if the
Company or any Subsidiary has failed to provide him with the number of paid
vacation days to which he would be entitled in accordance with the Company's or
the Subsidiary's normal vacation policy in effect at the time of the Change in
Control;
(4) Prior to the Effective Time, an Employer reduces in any
manner which the Executive considers important the Executive's title, job
authorities or responsibilities as in effect immediately prior to the Change
in Control;
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(5) On the Effective Time, Executive shall not be TITLE of
COMPANY(IES) with the authorities and responsibilities typically associated
with such positions;
(6) After the Effective Time, an Employer reduces in any
manner which the Executive considers important the Executive's title, job
authorities or responsibilities as in effect on the Effective Time;
(7) the Company fails to obtain the assumption of the
obligations contained in this Agreement by any successor as contemplated in
Section 7 hereof;
(8) any purported termination of the Executive's employment by
an Employer which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 4 below; and, for purposes of this Agreement, no
such purported termination shall be effective;
(9) any material breach by the Company of any provision of this
Agreement;
(10) any purported termination of the Executive's employment for
Cause by an Employer which does not comply with the terms of Section 2.2 of this
Agreement; or
(11) the insolvency or the filing (by any party, including an
Employer) of a petition for bankruptcy of an Employer, which petition is not
dismissed within 60 days.
(b) Any event or condition described in this Section 2.6(a)(1)
through (11) above, which occurs prior to a Change in Control but which the
Executive reasonably demonstrates (i) was at the request of a Third Party, or
(ii) otherwise arose in connection with or in anticipation of a Change in
Control which actually occurs, shall constitute Good Reason for purposes of
this Agreement notwithstanding that it occurred prior to the Change in
Control.
(c) Until the Executive's Disability, the Executive's rights to
terminate his employment pursuant to this Section 2.6 shall not be affected
by his incapacity due to physical or mental illness.
2.7 EFFECTIVE TIME. For purposes of this Agreement, "Effective Time"
shall have the meaning ascribed to such term by Section 1.3 of the Agreement and
Plan of Merger, dated May 20, 1997, by and between LG&E Energy Corp. and KU
Energy Corp.
3. TERMINATION OF EMPLOYMENT.
3.1 If, during the term of this Agreement, the Executive's employment
with an Employer shall be terminated within twenty-four (24) months following
the later of: (i) a Change in Control or (ii) the Effective Time, then the
Executive shall be entitled to the following compensation and benefits:
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(a) If the Executive's employment with an Employer shall be
terminated (1) by an Employer for Cause or Disability, (2) by reason of the
Executive's death, or (3) by the Executive other than for Good Reason, the
Company shall pay the Executive all amounts earned or accrued for or on
behalf of the Company or any of its Subsidiaries 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 or any Subsidiary during
the period ending on the Termination Date and (iii) vacation pay
(collectively, "Accrued Compensation").
(b) If the Executive's employment with an Employer shall be
terminated for any reason other than as specified in clause (1) or (2) of
Section 3.1(a) or if the Executive's employment is terminated by the Executive
for Good Reason, 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 after the Termination Date, an amount equal to 2.99 times the sum
of (a) the Base Amount and (b) the Bonus Amount;
(iii) For a number of months equal to the lesser of (a)
twenty-four (24) or (b) the number of months remaining until the Executive's
65th birthday (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 and/or
its Subsidiaries at any 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 or its Subsidiaries
during the Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 3.1(b)(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 (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
(iv) The Company shall provide to the Executive an amount
equal to twenty percent (20%) of the Base Amount to be used for out-placement
services.
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(c) The amounts provided for in Section 3.1(a) and 3.1(b)(i) and
(ii) shall be paid in a lump sum within thirty (30) days after the
Executive's Termination Date.
(d) 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 Section 3.1(b)(iii).
3.2 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 A 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, as previously amended, which agreement (as
stated in Section 15 hereof) is superseded by this Agreement.
4. NOTICE OF TERMINATION. Any purported termination by an Employer 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.
5. 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:
(a) If the Executive's employment is terminated by an Employer 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
(b) 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 the Employer.
6. CERTAIN ADDITIONAL PAYMENTS
(a) Notwithstanding anything in the Agreement to the contrary, in
the event that a Change in Control occurs and 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
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pursuant to or by reason of any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing
(individually and collectively a "Payment"), would be subject to the excise
tax imposed by Section 4999 (or any successor provision thereto) of the
Internal Revenue Code of 1986, as amended (the "Code") by reason of being
considered "contingent on a change in ownership or control" of the Company or
the 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.
(b) Subject to the provisions of Section 6(f) hereof, all
determinations required to be made under this Section 6, 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 6(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
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.
(c) 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 cooperative with
the Accounting Firm in connection with the preparation and issuance of the
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determinations and calculations contemplated by Section 6(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.
(d) 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.
(e) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Section 6(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.
(f) 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 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
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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 6(f), the Company shall control all proceedings taken in connection
with the contest of any claim contemplated by this Section 6(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 xxx 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 xxx 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 contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(g) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 6(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 6(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 6(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 6.
7. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and, at the time of any
such succession or assignment, the Company 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 the Company would be required to
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perform it if no such succession or assignment had taken place. The term "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.
8. 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 as they become due as a result of (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; provided,
however, that the circumstances set forth in clauses (a) and (b) (other than as
a result of the Executive's termination of employment under circumstances
described in Section 2.3(d)) occurred on or after a Change in Control.
9. 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 an Employer shall be directed to the
attention of the Board with a copy to the Secretary of such Employer. 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.
10. 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 or any of
its Subsidiaries 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 or any of its Subsidiaries. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any of its Subsidiaries shall be
payable in accordance with such plan or program.
11. 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 or any of its Subsidiaries may have against the Executive or others.
12. 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 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
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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.
13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Kentucky.
14. 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.
15. 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.
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.
LG&E ENERGY CORP.
____________________________________
XXXXX X. XXXX
Chairman and Chief Executive Officer
____________________________________
NAME
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EXHIBIT A
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 Retirement Income Plan for Employees Who Are Not Members of a
Bargaining Unit
6. LG&E Supplemental Executive Retirement Plan
13
