AGREEMENT
Exhibit
10(i)
THIS
AGREEMENT, effective as of _______________, ____, is made by and between PPL
Corporation, a Pennsylvania corporation and _______________ (the
"Executive").
WHEREAS,
the Company considers it essential to the best interests of its shareowners
to
xxxxxx the continued employment of key management personnel; and
WHEREAS,
the Board of Directors of the Company (the "Board") recognizes that, as is
the
case with many publicly-held corporations, the possibility of a Change in
Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareowners; and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce
and
encourage the continued attention and dedication of members of management,
including the Executive, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of
a
Change in Control;
WHEREAS,
the Executive and the Company have entered into a Severance Agreement effective
as of __________________ (the “Prior Severance Agreement”), which the Executive
and the Company desire to terminate, in its entirety, effective as of the date
hereof, and in lieu thereof enter into this Agreement;
NOW
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1.
Defined
Terms.
The
definitions of capitalized terms used in this Agreement are provided in the
last
Section hereof.
2.
Term
of Agreement.
The
Term of this Agreement shall commence on the date hereof and shall continue
in
effect through December 31, 2008; provided, however, that commencing on January
1, 2008 and each January 1 thereafter, the Term shall automatically be
extended for one additional year unless, either the Company or the Executive
gives at least 15 months advance notice of termination by, not later than
September 30 of the year preceding the year in which the Term is then scheduled
to expire, giving notice not to extend the Term; and further provided, however,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than thirty-six (36) months beyond the month in which such
Change in Control occurred. Notwithstanding the foregoing, and subject to any
extensions pursuant to Section 7.3, in the event that prior to the occurrence
of
a Change in Control or Potential Change in Control, the Executive's employment
is terminated for any reason then this Agreement shall terminate as of the
date
that the Executive's employment is terminated.
3.
Company's
Covenants Summarized.
In
order to induce the Executive to remain in the employ of the Company and in
consideration of the Executive's covenants set forth in Section 4 hereof, the
Company agrees, under the conditions described herein, to pay the Executive
the
Severance Payments and the other payments and benefits described herein. Except
as provided in Section 9.1 hereof, no Severance Payments shall be payable under
this Agreement unless there shall have been (or, under the terms of the second
sentence of Section 6.1 hereof, there shall be deemed to have been) a
termination of the Executive's employment with the Company following a Change
in
Control and during the Term. This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed
to
in writing between the Executive and the Company, the Executive shall not have
any right to be retained in the employ of the Company.
4.
The
Executive's Covenants.
The
Executive agrees that, subject to the terms and conditions of this Agreement,
in
the event of a Potential Change in Control during the Term, the Executive will
remain in the employ of the Company until the earliest of (i) the last day
of
the Potential Change in Control Period, (ii) the date of a Change in Control,
(iii) the date of termination by the Executive of the Executive's employment
for
Good Reason or by reason of death, Disability or Retirement, or (iv) the
termination by the Company of the Executive's employment for any
reason.
5.
Compensation
Other Than Severance Payments.
5.1
Following a Change in Control and during the Term, during any period that the
Executive fails to perform the Executive's full-time duties with the Company
as
a result of incapacity due to physical or mental illness, the Company shall
pay
the Executive's full salary to the Executive at the rate in effect at the
commencement of any such period, together with all compensation and benefits
payable to the Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period (other
than
any disability plan), until the Executive's employment is terminated by the
Company for Disability.
5.2
If the
Executive's employment shall be terminated for any reason following a Change
in
Control and during the Term, the Company shall pay to the Executive (i) the
Executive's full base salary through the Date of Termination at the rate in
effect immediately prior to the Date of Termination, or if higher, the rate
in
effect immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, together with all compensation and benefits payable
to
the Executive through the Date of Termination under the terms of the Company's
compensation or benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination, or if more favorable to the Executive, as
in
effect immediately prior to the first occurrence of an event or circumstance
constituting Good Reason,
(ii)
the value of any annual bonus or cash incentive plan payment that would have
been paid for service in the final calendar year of employment, as if 100%
of
target goals were achieved, but prorated by multiplying by a fraction equal
to
the number of full calendar months of service completed divided by 12, and
(iii)
the value of any Restricted Stock Units that would have been awarded for service
in the final calendar year of employment, as if 100% of target goals were
achieved, but prorated by multiplying by a fraction equal to the number of
full
calendar months of service completed divided by 12.
5.3
If the
Executive's employment shall be terminated for any reason following a Change
in
Control and during the Term, the Company shall pay to the Executive the
Executive's normal post-termination compensation and benefits due the Executive
as such payments become due. Such post-termination compensation and benefits
shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or,
if
more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
6.
Severance
Payments.
6.1
The
Company shall pay the Executive the payments, and provide the Executive the
benefits, described in this Section 6.1 (the "Severance Payments") upon the
termination of the Executive's employment following a Change in Control and
during the Term, in addition to the payments and benefits described in Section
5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death, Disability or Retirement, or (iii) by the Executive without Good
Reason. For purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason if (A) the Executive's
employment is terminated by the Company without Cause prior to a Change in
Control (whether or not a Change in Control ever occurs) and such termination
was at the request or direction of a Person who has entered into an agreement
with the Company the consummation of which would constitute a Change in Control
or (B) if the Executive terminates his employment for Good Reason prior to
a
Change in Control (whether or not a Change in Control ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, or (C) the Executive's employment is terminated by
the
Company without Cause or by the Executive for Good Reason and such termination
or the circumstance or event which constitutes Good Reason is otherwise in
connection with or in anticipation of a Change in Control (whether or not a
Change in Control ever occurs). For purposes of any determination regarding
the
applicability of the immediately preceding sentence, any position taken by
the
Executive shall be presumed to be correct unless the Company establishes to
the
Board by clear and convincing evidence that such position is not
correct.
(A)
In lieu
of any further salary payments to the Executive for periods subsequent to the
Date of Termination and in lieu of any severance benefit otherwise payable
to
the Executive including any payments under the Separation Policy (GP401) or
any
similar plan, policy or procedure or arrangement, if eligible, or the
Executive’s Prior Severance Agreement or any employment agreement or arrangement
between the Executive and the Company, to the extent provided in Section 11
of
this Agreement, the Company shall pay to the Executive a lump sum severance
payment, in cash, equal to three times the sum of (i) the Executive's base
salary as in effect immediately prior to the Date of Termination or, if higher,
in effect immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, and (ii) the highest annual bonus earned by the
Executive pursuant to any annual bonus or incentive plan maintained by the
Company in respect of any of the last three fiscal years ending immediately
prior to the fiscal year in which occurs the Date of Termination or, if higher,
immediately prior to the fiscal year in which occurs the first event or
circumstance constituting Good Reason (including as an amount so paid any amount
that would have been so paid but for the Executive's request that the amount
not
be paid), less (iii) the sum of the values on the date of the termination of
Executive's employment, of the shares subject to the Retention Agreement entered
into between the parties effective [enter date] ("Retention Agreement") that
become nonforfeitable as a result of such termination of employment and any
amounts designated under any other agreement or agreements with Executive as
"Retention Agreement Amounts" for purposes of this Agreement. For purposes
of
determining the value of the annual bonus earned by the Executive in any
calendar year, the value of any restricted stock awards or stock options earned
by the Executive in any such year shall not be included in the value of the
annual bonus for such year;
(B)
For the
thirty-six (36) month period immediately following the Date of Termination,
the
Company shall arrange to provide the Executive and his dependents, life,
disability, accident and health insurance benefits substantially similar to
those provided to the Executive and his dependents immediately prior to the
Date
of Termination (without giving effect to any reduction in such benefits
subsequent to a Change in Control which reduction constitutes Good Reason)
or,
if more favorable to the Executive, those provided to the Executive and his
dependents immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, at no greater after-tax cost to the Executive than
the
after-tax cost to the Executive immediately prior to such date or occurrence;
provided, however, that, unless the Executive consents to a different method
(after taking into account the effect of such method on the calculation of
"parachute payments" pursuant to Section 6.2 hereof), such health insurance
benefits shall be provided through a third-party insurer. Benefits otherwise
receivable by the Executive pursuant to this Section 6.1(B) shall be reduced
to
the extent benefits of the same type are received by or made available to the
Executive during the thirty-six (36) month period following the Date of
Termination (and any such benefits received by or made available to the
Executive shall be reported to the Company by the Executive); provided,
however,
that
the Company shall reimburse the Executive for the excess, if any, of the cost
of
such benefits to the Executive over such cost immediately prior to the Date
of
Termination or, if more favorable to the Executive, the first occurrence of
an
event or circumstance constituting Good Reason.
(C)
Notwithstanding any provision of any annual or long-term incentive plan to
the
contrary, the Company shall pay to the Executive a lump sum amount, in cash,
equal to the sum of (i) any unpaid incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination under any such plan and
which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date, and (ii) to the extent not
otherwise paid or deferred at the Executive's election, pursuant to the terms
of
the applicable plan, a pro rata portion to the Date of Termination of the
aggregate value of all contingent incentive compensation awards to the Executive
for all then uncompleted periods under any such plan, calculated as to each
such
award by multiplying the award that the Executive would have earned on the
last
day of the performance award period, assuming the achievement, at the level
that
would produce the maximum award, of the individual and corporate performance
goals established with respect to such award, by the fraction obtained by
dividing the number of full months and any fractional portion of a month during
such performance award period through the Date of Termination by the total
number of months contained in such performance award period.
(D)
In
addition to the retirement benefits to which the Executive may be entitled
under
each Pension Plan, if any, or any successor plan thereto, the Company shall
pay
the Executive a lump sum amount, in cash, equal to the excess of (i) the
actuarial equivalent of the aggregate retirement pension (taking into account
any early retirement subsidies associated therewith and determined as a straight
life annuity commencing at the date (but in no event earlier than the third
anniversary of the Date of Termination) as of which the actuarial equivalent
of
such annuity is greatest) which the Executive would have accrued under the
terms
of all Pension Plans (without regard to any amendment to any Pension Plan made
subsequent to a Change in Control and on or prior to the Date of Termination,
which amendment adversely affects in any manner the computation of retirement
benefits thereunder), determined as if the Executive were fully vested
thereunder and had accumulated after the Date of Termination thirty-six (36)
additional months of service credit thereunder (and if any Pension Plan imposes
a maximum number of months for purposes of accrual of benefits thereunder,
such
thirty-six (36) additional months shall be reduced, but not below zero, to
the
extent necessary so that the total number of months of service credited
thereunder, including the number of months credited pursuant to this Section
6.1(D), does not exceed such maximum number of months) and had been credited
under each Pension Plan during such period with compensation equal to the
Executive's compensation (as defined in such Pension Plan) during the twelve
(12) months immediately preceding the Date of Termination or, if higher, during
the twelve months immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, over (ii) the actuarial equivalent of
the
aggregate retirement pension (taking into account any early retirement subsidies
associated therewith and determined as a straight life annuity commencing at
the
date (but in no event earlier than the Date of Termination) as of which the
actuarial equivalent of such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the Pension Plans as of the Date of
Termination. For purposes of this Section 6.1(D), "actuarial equivalent" shall
be determined using the same assumptions utilized under the PPL Supplemental
Executive Retirement Plan or any successor plan, immediately prior to the Date
of Termination, or, if more favorable to the Executive, immediately prior to
the
first occurrence of an event or circumstance constituting Good
Reason.
(E)
If the
Executive would have become entitled to benefits under the Company's
post-retirement health care or life insurance plans, as in effect immediately
prior to the Date of Termination or, if more favorable to the Executive, as
in
effect immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, had the Executive's employment terminated at any
time
during the period of thirty-six (36) months after the Date of Termination,
the
Company shall provide such post-retirement health care or life insurance
benefits to the Executive and the Executive's dependents commencing on the
later
of (i) the date on which such coverage would have first become available and
(ii) the date on which benefits described in subsection (B) of this Section
6.1
terminate.
(F)
The
Company shall provide the Executive with outplacement services suitable to
the
Executive's position for a period of three years or, if earlier, until the
first
acceptance by the Executive of an offer of employment.
6.2 (A)
Whether or not the Executive becomes entitled to the Severance Payments, if
any
of the payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of employment
(whether pursuant to the terms of this Agreement, the Retention Agreement,
or
any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person) (such payments or benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments") will be subject to the
Excise Tax, the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up Payment,
and
after taking into account the phase out of itemized deductions and personal
exemptions attributable to the Gross-Up Payment, shall be equal to the Total
Payments.
(B)
For
purposes of determining whether any of the Total Payments will be subject to
the
Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments
shall be treated as "parachute payments" (within the meaning of section
280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the accounting firm
which
was, immediately prior to the Change in Control, the Company's independent
auditor (the "Auditor"), such payments or benefits (in whole or in part) do
not
constitute parachute payments, including by reason of section 280G(b)(4)(A)
of
the Code, (ii) all "excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless,
in
the opinion of Tax Counsel, such excess parachute payments (in whole or in
part)
represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount
(within the meaning of Section 280G(b)(3) of the Code) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and
(iii) the value of any noncash benefits or any deferred payment or benefit
shall
be determined by the Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, (x) the Executive shall be deemed to pay federal income tax
at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at
the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or if there is no Date of Termination,
then the date on which the Gross-Up Payment is calculated for purposes of this
Section 6.2), net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes, and (y) the Executive
shall be deemed to be subject to the loss of itemized deductions and personal
exemptions to the maximum extent provided by the Code for each dollar of
incremental income.
(C)
In
the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, within five (5) business days following the time
that the amount of such reduction in the Excise Tax is finally determined,
the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income and employment taxes imposed on the Gross-Up Payment
being repaid by the Executive, to the extent that such repayment results in
a
reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state and local income and
employment taxes, plus interest on the amount of such repayment at 120% of
the
rate provided in section 1274(b)(2)(B) of the Code). In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder
in
calculating the Gross-Up Payment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in respect
of
such excess (plus any interest, penalties or additions payable by the Executive
with respect to such excess) within five (5) business days following the time
that the amount of such excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
6.3
The
payments provided in subsection 6.1(A), (C) and (D) hereof and Section 6.2
hereof shall be made not later than the fifth day following the Date of
Termination (or if there is no Date of Termination, then the date on which
the
Gross-Up Payment is calculated for purposes of Section 6.1 hereof); provided,
however, that if the amounts of such payments cannot be finally determined
on or
before such day, the Company shall pay to the Executive on such day an estimate,
as determined in good faith by the Executive, or, in the case of payments under
Section 6.2 hereof, in accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly entitled and shall pay the
remainder of such payments (together with interest on the unpaid remainder
(or
on all such payments to the extent the Company fails to make such payments
when
due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as
soon
as the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been
due,
such excess shall constitute a loan by the Company to the Executive, payable
on
the fifth (5th) business day after demand by the Company (together with interest
at 120% of the rate provided in section 1274(b)(2)(B) of the Code). At the
time
that payments are made under this Agreement, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants (and any such opinions
or
advice which are in writing shall be attached to the statement).
6.4
The
Company also shall pay to the Executive all legal fees and expenses incurred
by
the Executive in disputing in good faith any issue hereunder relating to the
termination of the Executive's employment hereunder or in seeking in good faith
to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder. Such payments shall be made within five (5) business days after
delivery of the Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may
require.
7.
Termination
Procedures and Compensation During Dispute.
7.1 Notice
of Termination.
After a
Change in Control and during the Term, any purported termination of the
Executive's employment (other than by reason of death) shall be communicated
by
written Notice of Termination from one party hereto to the other party hereto
in
accordance with Section 10 hereof. For purposes of this Agreement, a "Notice
of
Termination" shall mean a notice which shall indicate 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. Further, a Notice
of
Termination for Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board which was called and held
for
the purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.
7.2 Date
of Termination.
"Date
of Termination", with respect to any purported termination of the Executive's
employment after a Change in Control and during the Term, shall mean (i) if
the
Executive's employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of the Executive's duties during such
thirty (30) day period), and (ii) if the Executive's employment is terminated
for any other reason, the date specified in the Notice of Termination (which,
in
the case of a termination by the Company, shall not be less than thirty (30)
days (except in the case of a termination for Cause) and, in the case of a
termination by the Executive, shall not be less than fifteen (15) days nor
more
than sixty (60) days, respectively, from the date such Notice of Termination
is
given).
7.3 Dispute
Concerning Termination.
If
within fifteen (15) days after any Notice of Termination is given, or, if later,
prior to the Date of Termination (as determined without regard to this Section
7.3), the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of Termination shall
be extended until the earlier of (i) the date on which the Term ends or (ii)
the
date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or
with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be
extended by a notice of dispute given by the Executive only if such notice
is
given in good faith and the Executive pursues the resolution of such dispute
with reasonable diligence.
7.4 Compensation
During Dispute.
If a
purported termination occurs following a Change in Control and during the Term
and the Date of Termination is extended in accordance with Section 7.3 hereof,
the Company shall continue to pay the Executive the full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, salary) and continue the Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the Date of Termination,
as
determined in accordance with Section 7.3 hereof. Amounts paid under this
Section 7.4 are in addition to all other amounts due under this Agreement (other
than those due under Section 5.2 hereof) and shall not be offset against or
reduce any other amounts due under this Agreement.
8.
No
Mitigation.
The
Company agrees that, if the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek other employment or
to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 6 or Section 7.4 hereof. Further, the amount of any payment
or benefit provided for in this Agreement (other than in Section 6.1(B) hereof)
shall not be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits, by offset against
any
amount claimed to be owed by the Executive to the Company, or
otherwise.
9.
Successors;
Binding Agreement.
9.1
In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company 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 perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness
of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were
to
terminate the Executive's employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which
any
such succession becomes effective shall be deemed the Date of Termination.
9.2
This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than amounts which,
by
their terms, terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall
be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
10.
Notices.
For the
purpose of this Agreement, notices and all other communications provided for
in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, to the Executive at the last known
address maintained in the Company's personnel records, and to the Company,
to
the address set forth below, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice
of
change of address shall be effective only upon actual receipt:
To
the
Company:
PPL
Corporation
Xxx
Xxxxx
Xxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxx 00000
Attention:
Corporate Secretary
11.
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 such officer as may be specifically designated by the Board.
No
waiver by either party hereto at any time of any breach by the other party
hereto of, or any lack of 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. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof, which have been made by either party, including but
not
limited to, the Prior Severance Agreement; provided, however, that this
Agreement shall supersede any agreement setting forth the terms and conditions
of the Executive's employment with the Company only in the event that the
Executive's employment with the Company is terminated on or following a Change
in Control, by the Company other than for Cause or by the Executive for Good
Reason. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Pennsylvania.
All
references to sections of the Exchange Act or the Code shall be deemed also
to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
this Agreement that by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.
12.
Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
13.
Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
14.
Settlement
of Disputes; Arbitration.
The
Board shall make all determinations as to the Executive's right to benefits
under this Agreement. Any denial by the Board of a claim for benefits under
this
Agreement shall be stated in writing and delivered or mailed to the Executive
and such notice shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon, and shall be written in
a
manner that may be understood without legal or actuarial counsel. In addition,
the Board shall afford a reasonable opportunity to the Executive for a review
of
the decision denying the Executive's claim and, in the event of continued
disagreement, the Executive may appeal within a period of 60 days after receipt
of notification of denial. Failure to perfect an appeal within the 60-day period
shall make the decision conclusive. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Philadelphia, Pennsylvania in accordance with the rules of the
American Arbitration Association then in effect; provided, however, that the
evidentiary standards set forth in this Agreement shall apply. Judgment may
be
entered on the arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary, the Executive
shall be entitled to seek specific performance of the Executive's right to
be
paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
15.
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12
of
the Exchange Act.
(B) "Base
Amount" shall have the meaning set forth in section 280G(b)(3) of the
Code.
(C) "Beneficial
Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
(D) "Board"
shall mean the Board of Directors of the Company.
(E) "Cause"
for termination by the Company of the Executive's employment shall mean (i)
the
willful and continued failure by the Executive to substantially perform the
Executive's duties with the Company (other than any such failure resulting
from
the Executive's incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.1 hereof) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that
the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, (a) no
act,
or failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the best
interest of the Company, and (b) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.
(F) "Change
in Control" means the occurrence of any one of the following events:
(I)
the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individ-uals who, on the date hereof,
constitute the Board and any new direc-tor (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of direc-tors of the Company) whose appointment or election by the
Board or nomination for election by the Company's shareowners was approved
or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previ-ously so approved or
recommended;
(II)
any
Person becomes the Beneficial Owner, directly or indirectly, of securities
of
the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the election
of directors;
(III)
there is consummated a merger or consolidation of the Company or any direct
or
indirect subsidiary of the Company with any other corporation or other entity,
other than (I) a merger or con-solidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation contin-uing to represent (either by remaining outstanding or
by
being con-verted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 60% of the combined voting power of the
securities of the Company or at least 60% of the combined voting power of the
securities of such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation; or (II) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (excluding in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 20% or more of the combined
voting power of the Company's then outstanding securities;
(IV)
the
shareowners of the Company approve a plan of complete liquidation or dissolution
of the Company; or
(V)
the
Board adopts a resolution to the effect that a "Change in Control" has occurred
or is anticipated to occur.
(G) "Code"
shall mean the Internal Revenue Code of 1986, as amended from time to
time.
(H) "Company"
shall mean PPL Corporation and, except in determining, under Section 15(E)
hereof, whether or not any Change in Control of the Company has occurred in
connection with such succession, shall include its subsidiaries and any
successor to its business and/or assets which assumes and agrees to perform
this
Agreement by operation of law, or otherwise. For purposes of this Agreement,
the
Executive's employment by (including termination of such employment) and
compensation from any subsidiary of the Company shall be deemed employment
by
and compensation from the Company.
(I) "Date
of
Termination" shall have the meaning set forth in Section 7.2
hereof.
(J) "Disability"
shall be deemed the reason for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity due to physical or
mental illness, the Executive shall have been absent from the full-time
performance of the Executive's duties with the Company for a period of six
(6)
consecutive months, the Company shall have given the Executive a Notice of
Termination for Disability, and, within thirty (30) days after such Notice
of
Termination is given, the Executive shall not have returned to the full-time
performance of the Executive's duties.
(K) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended from time to
time.
(L) "Excise
Tax" shall mean any excise tax imposed under section 4999 of the
Code.
(M) "Executive"
shall mean the individual named in the first paragraph of this
Agreement.
(N) "Good
Reason" for termination of the Executive's employment with the Company by such
Executive shall mean the occurrence (without the Executive's express written
consent which specifically references this Agreement) after a Change in Control,
or prior to a Change in Control under the circumstances described in clauses
(B)
and (C) of the second sentence of Section 6.1 hereof (treating all references
in
paragraphs (I) through (VII) below to a "Change in Control" as references to
a
"Potential Change in Control"), of any one of the following acts by the Company,
or failures by the Company to act, unless, in the case of any act or failure
to
act described in paragraph (I), (V), (VI), or (VII) below, such act or failure
to act is corrected prior to the Date of Termination specified in the Notice
of
Termination given in respect thereof:
(I)
the
assignment to the Executive of any duties inconsistent with the Executive's
status as an executive officer or key employee of the Company or a substantial
adverse alteration in the nature or status of the Executive's responsibilities
from those in effect immediately prior to the Change in Control;
(II)
a
reduction by the Company of the Executive's annual base salary as in effect
on
the date of this Agreement, or as the same may be increased from time to time,
except for across-the-board decreases uniformly affecting management, key
employees and salaried employees of the Company or the business unit in which
the Executive is then employed;
(III)
the
relocation of the Executive's principal work location to a location more than
30
miles from the vicinity of such work location immediately prior to a Change
in
Control or the Company's requiring the Executive to be based anywhere other
than
such principal place of employment (or permitted relocation thereof) except
for
required travel on the Company's business to an extent substantially consistent
with the Executive's present business travel obligations;
(IV)
the
failure by the Company to pay to the Executive any portion of the Executive's
current compensation or to pay to the Executive any portion of an installment
of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due, except for
across-the-board compensation deferrals uniformly affecting management, key
employees and salaried employees of the Company or the business unit in which
the Executive is then employed;
(V)
the
failure by the Company to continue in effect any compensation or benefit plan
in
which the Executive participates immediately prior to a Change in Control which
is material to the Executive's total compensation, or any substitute plans
adopted prior to a Change in Control, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect to
such
plan, or the failure by the Company to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount or timing of payment of benefits
provided and the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(VI)
the
failure by the Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the
Company's pension, savings, life insurance, medical, health and accident, or
disability plans in which the Executive was participating immediately prior
to a
Change in Control, except for across-the-board changes to any such plans
uniformly affecting all participants in such plans, the taking of any other
action by the Company which would directly or indirectly materially reduce
any
of such benefits or deprive the Executive of any material fringe benefit enjoyed
by the Executive at the time of the Change in Control, or the failure by the
Company to provide the Executive with the number of paid vacation days to which
the Executive is entitled on the basis of years of service with the Company
in
accordance with the Company's normal vacation policy at the time of the Change
in Control; or
(VII)
any
purported termination of the Executive's employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section
7.1
hereof. For purposes of this Agreement, no such purported termination shall
be
effective.
The
Executive's right to terminate his or her employment with the Company for Good
Reason shall not be affected by the Executive's incapacity due to physical
or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
For
purposes of any determination regarding the existence of Good Reason, any claim
by the Executive that Good Reason exists shall be presumed correct unless the
Company established to the Board by clear and convincing evidence that Good
Reason does not exist.
(O) "Notice
of Termination" shall have the meaning stated in Section 7.1
hereof.
(P) "Pension
Plan" shall mean any tax-qualified, supplemental or excess defined benefit
pension plan maintained by the Company and any other agreement entered into
between the Executive and the Company which is designed to provide the Executive
with supplemental retirement benefits.
(Q) "Person"
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof; provided, however, a Person shall
not include (i) the Company or any of its Affiliates, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or
any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareowners of the Company in substantially
the
same proportions as their ownership of stock of the Company.
(R) "Potential
Change in Control" shall be deemed to have occurred if the conditions or events
set forth in any one of the following paragraphs shall have been satisfied
or
shall have occurred:
(I)
the
Company enters into an agreement, the consummation of which would result in
the
occurrence of a Change in Control;
(II)
the
Company or any Person publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in
Control;
(III)
the
Board adopts a resolution to the effect that, for purposes of this Agreement,
a
Potential Change in Control has occurred.
(IV)
any
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 5% or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the election
of directors.
Notwithstanding
the foregoing, a "Potential Change of Control" shall not be deemed to occur
if
(i) a Person acquired such beneficial ownership of 5% or more of the Company's
outstanding common shares but less than 20% and such Person has reported or
is
required to report such ownership on Schedule 13G under the Exchange Act (or
any
comparable or successor report); (ii) a Person acquired such beneficial
ownership of 5% or more of the Company's outstanding common shares and such
Person has reported or is required to report such ownership under Schedule
13D
under the Exchange Act (or any comparable or successor report), which Schedule
13D does not state any intention to or reserve the right to control or influence
the management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the common
shares) and, within 10 business days of being requested by the Company to advise
it regarding the same, certifies to the Company that such Person acquired common
shares amounting to 5% or more of the Company's outstanding common shares
inadvertently and who or which, together with all Affiliates thereof, thereafter
does not acquire additional common shares while the Beneficial Owner, as such
term is defined in or used by Regulation 13D-G as promulgated under the Exchange
Act, of 5% or more of the common shares then outstanding; provided, however,
that if the Person requested to so certify fails to do so within 10 business
days, then a Potential Change of Control shall be deemed to have occurred
immediately after such 10-Business-Day period; or (iii) any Person who becomes
the Beneficial Owner of 5% or more of the common shares then outstanding due
to
the repurchase of common shares by the Company unless and until such Person,
after becoming aware that such Person has become the Beneficial Owner of 5%
or
more of the common shares then outstanding, acquires beneficial ownership of
additional common shares representing 1% or more of the common shares then
outstanding.
(S) "Potential
Change in Control Period" shall mean the period commencing on the occurrence
of
a Potential Change in Control and ending upon the occurrence of a Change in
Control or, if earlier (i) with respect to a Potential Change in Control
occurring pursuant to Section 15(R)(I), immediately upon the abandonment or
termination of the applicable agreement, (ii) with respect to a Potential Change
in Control occurring pursuant to Section 15(R)(II), immediately upon a public
announcement by the applicable party that such party has abandoned its intention
to take or consider taking actions which if consummated would result in a Change
in Control or (iii) with respect to a Potential Change in Control occurring
pursuant to Section 15(R)(III) or (IV), upon the one year anniversary of the
occurrence of such Potential Change in Control (or such earlier date as may
be
determined by the Board).
(T) "Retirement"
shall be deemed the reason for the termination by the Executive of the
Executive's employment if such employment is terminated in accordance with
the
Company's retirement policy, including early retirement, generally applicable
to
its salaried employees.
(U) "Severance
Payments" shall have the meaning set forth in Section 6.1 hereof.
(V) "Term"
shall mean the period of time described in Section 2 hereof (including any
extension, continuation or termination described therein).
(W) "Total
Payments" shall mean those payments described in Section 6.2
hereof.
|
PPL
CORPORATION
|
||||
|
By:
|
__________________________________
Xxxxx
X. Xxxxxx
Chairman/President
and CEO
|
__________________________________
Date
|
||
|
__________________________________
[Name
of Executive]
|
__________________________________
Date
|
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