FOURTH AMENDMENT TO THE
EMPLOYMENT AND SEVERANCE AGREEMENT
OF
VICTOR A. STAFFIERI
This Fourth Amendment to the Employment and Severance
Agreement of Victor A. Staffieri ("Fourth Amendment") is
made and entered into as of the 1st day of February, 2004 by
and among (i) LG&E Energy LLC, a Kentucky limited liability
company ("Company" as successor to LG&E Energy Corp.), (ii)
Powergen Limited, a United Kingdom limited company ("Parent"
formerly known as Powergen, plc), (iii) E.ON AG, an
anktiengesellschaft formed under the Federal Republic of
Germany ("German Parent"), and (iv) Victor A. Staffieri
("Executive"), collectively referred to as the "Parties".
WHEREAS, the Executive, the Company and the Parent
entered into an Employment and Severance Agreement, dated
February 25, 2000 ("Original Agreement");
WHEREAS, the Original Agreement was previously amended
by the Executive, the Company and the Parent in documents
dated December 8, 2000 ("First Amendment") and dated as of
April 30, 2001 ("Second Amendment");
WHEREAS, the Executive, the Company, the Parent and
German Parent previously amended the Original Agreement in
a document dated July 1, 2002 ("Third Amendment"), the
Original Agreement, the First Amendment, the Second
Amendment and the Third Amendment (collectively referred to
herein as "Agreement");
WHEREAS, the Company, the Parent and the German Parent
have determined that a realignment of the board of directors
of certain subsidiaries of the German Parent is appropriate;
and
WHEREAS, the Parties have determined that it is now
desirable to amend the Agreement to reflect certain changes
resulting from the German Parent's realignment of the
composition of certain boards of directors.
AGREEMENT:
NOW THEREFORE, in consideration of the respective
agreements of the Parties contained herein, it is agreed as
follows:
1. Section 3.1 shall be deleted and replaced in its
entirety to read as follows:
"3.1 The Company agrees to employ
Executive, and Executive agrees to serve
during the term hereof as Chairman and
Chief Executive Officer of the Company.
Executive shall report to Dr. Wulf
Bernotat, or his successor. In
addition, German Parent shall (i) cause
the Executive to be elected as Chairman
of the Board of Directors of the Company
(the "Board"), (ii) secure Executive's
election as a member of the Board of
Directors of E.ON US Investments Corp.
(the "Primary U.S. Board"), and (iii)
secure Executive's election as a member
of the management board or board of
directors (as applicable) of any entity
the German Parent utilizes to establish
its presence, through acquisition or
other development activity, in the
United States' energy industry ("Primary
U.S. Acquisition Board"), and Executive
agrees to serve in such capacities."
2. Section 3.2 shall be deleted and replaced in
its entirety to read as follows:
"3.2 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 Chairman and Chief Executive Officer
of the Company, as Dr. Wulf Bernotat or
his successor shall from time to time
delegate to him on such terms and
conditions and subject to such
restrictions as Dr. Wulf Bernotat or his
successor may reasonably from time to
time impose."
3. Section 4.1 shall be deleted and replaced in its
entirety to read as follows:
"4.1. SALARY. The Company shall pay
Executive an annual base salary ("Base
Salary") of not less than the amount the
Executive is receiving at the time of
this Fourth Amendment. The Base Salary
shall be payable in accordance with the
ordinary payroll practices of the
Company. The Base Salary shall be
reviewed by Dr. Wulf Bernotat or his
successor in December of each year, or
such other date as agreed to by the
Executive, during the term of this
Agreement and may be increased in the
discretion of Dr. Wulf Bernotat or his
successor at that or any other time and,
as so increased, shall constitute "Base
Salary" hereunder. At no time shall Dr.
Wulf Bernotat or his successor be able
to decrease the Base Salary
4. Subsection 6.5(a) shall be deleted and
replaced in its entirety to read as follows:
"(a) For purposes of this
Agreement, "Good Reason" shall mean
the occurrence of any of the events
or conditions described in
subsections (1) through (10)
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) German Parent, 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 German Parent,
Parent or Company business
consistent with his business travel
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, the Change in
Control, or the effective date of
this Fourth Amendment, 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, the Change in
Control, or the effective date of
this Fourth Amendment, 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, the
Change in Control, or the effective
date of this Fourth Amendment as
applicable;
(4) 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;
(5) 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;
(6) 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, hereof;
and, for purposes of this
Agreement, no such purported
termination shall be effective;
(7) any material breach by
Parent or the Company of any
provision of this Agreement;
(8) 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;
(9) any removal of the
Executive from the position of
Chairman and Chief Executive
Officer of the Company, except for
Cause; or
(10) any removal of Executive
from, the Board, the Primary U.S.
Board, or the Primary U.S.
Acquisition Board, except for
Cause."
5. The first full sentence of Section 16 shall be deleted
and replaced in its entirety to read as follows:
"16. MISCELLANEEOUS. 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,
German Parent and the Company."
IN WITNESS WHEREOF, the Company, the German Parent, and the
Parent have caused this Fourth Amendment to be executed by its
duly authorized representative and the Executive has executed
this Fourth Amendment as of the date set forth above. Except as
provided herein, nothing contained in this Fourth Amendment shall
alter the terms and conditions of the Agreement.
E. ON. AG
By: ______________________________
Name _________________________
Title __________________________
LG&E ENERGY LLC
By: ______________________________
Name _________________________
Title __________________________
POWERGEN LIMITED
By: ______________________________
Name _________________________
Title __________________________
EXECUTIVE
_____________________________
VICTOR A. STAFFIERI