Exhibit 10(n)
RETENTION AGREEMENT
THIS RETENTION AGREEMENT, effective as of May 24, 2000, is made and
entered into between PPL Corporation ("PPL") and Xxxx X. Xxxxxxxxx (the
"Executive").
WHEREAS, PPL recognizes the need to develop and retain the Executive;
and
WHEREAS, PPL has determined that certain steps should be taken to
encourage the Executive to remain with PPL;
NOW THEREFORE in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound, PPL and the
Executive agree as follows:
SECTION 1. DEFINITIONS.
The following definitions are applicable to this Retention Agreement:
1.1 "Affiliated Company" or "Affiliated Companies" means any parent
or majority or 50% owned subsidiaries of PPL (or companies, limited liability
companies or other legal entities under common control with PPL) including
entities that are members of the same controlled group of corporations (within
the meaning of Section 1563(a) of the Code) as PPL.
1.2 "Board" means the Board of Directors of PPL.
1.3 "Change in Control" means the occurrence of any one of the
following events: (i) any change in the control of PPL of a nature that would be
required to be reported in response to Item 1 (a) of Form 8-K under the Exchange
Act; (ii) during any period of not more than two consecutive years, individuals
who at the beginning of such period constitute the Board and, any new director
(other than a director designated by a Person who has entered into an agreement
with PPL to effect a transaction described in clause (i), (iii) or (iv) of this
paragraph) whose election by the Board or nomination for election by PPL'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 at the beginning
of the period or whose election or nomination for election was previously so
approved or recommended, cease for any reason to constitute at least a majority
thereof; (iii) any Person becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of PPL
representing 20% or more of the combined voting power of PPL's then outstanding
securities entitled to vote generally in the election of directors; (iv) the
approval by the shareowners of PPL of any merger or consolidation of PPL or any
direct or indirect subsidiary with any other corporation or a plan of complete
liquidation of PPL or the sale or other disposition of all or substantially all
of the assets of PPL to any other person or persons unless, after
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giving effect thereto, (a) holders of PPL's then outstanding securities entitled
to vote generally in the election of directors will own a majority of the
outstanding stock entitled to vote generally in the election of directors of the
continuing, surviving or transferee corporation or any parent (within the
meaning of Rule 12b-2 under the Exchange Act) thereof and (b) the incumbent
members of the Board as constituted immediately prior thereto shall constitute
at least a majority of the directors of the continuing, surviving or transferee
corporation and any parent thereof; or (v) the Board adopts a resolution to the
effect that a "Change in Control" has occurred or is anticipated to occur.
1.4 "Code" means the Internal Revenue Code of 1986, as may be amended
from time to time.
1.5 "Committee" means two or more non-employee directors, unless
otherwise determined by the Board, who have been designated by the Board to act
as the Committee and qualify as non-employee directors under the Exchange Act.
1.6 "Common Stock" means the common stock of PPL.
1.7 "Disability', or "Disabled" means the inability of the Executive to
perform each and every duty pertaining to the Executive's regular occupation by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than six months.
1.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. Reference in this Retention Agreement to any section of the
Exchange Act shall be deemed to include any amendments or successor provisions
to such section and any rules promulgated thereunder.
1.9 "Fair Market Value" means the average of the high and low sale
prices of the Common Stock as reflected in the New York Stock Exchange Composite
Transactions on the date as of which Fair Market Value is being determined or,
if no Common Stock is traded on the date as of which Fair Market Value is being
determined, Fair Market Value shall be the average of the high and low sale
prices of the Common Stock as reflected in the New York Stock Exchange Composite
Transactions on the next preceding day on which the Common Stock was traded.
1.10 "Good Reason" for termination of the Executive's employment with
PPL or an Affiliated Company by such Executive means the occurrence (without the
Executive's express written consent) after a Change in Control of any one of the
following acts or failures to act, by PPL or an Affiliated Company:
(i) a reduction by PPL or an Affiliated Company of the Executive's annual
base salary as in effect immediately prior to the date the Change in Control
occurs or as the same may be increased from time to time, except that across-
the-board decreases uniformly affecting management, key employees and salaried
employees of PPL or an
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Affiliated Company, or the business unit in which the Executive is then
employed, shall not be treated as Good Reason;
(ii) the failure by PPL or an Affiliated 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 PPL or an Affiliated 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 PPL or an Affiliated Company, or the business unit in which the Executive is
then employed;
(iii) the failure by PPL or an Affiliated 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 PPL
or Affiliated 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;
(iv) the failure by PPL or an Affiliated Company to continue to provide
the Executive with benefits substantially similar to those enjoyed by the
Executive under any of PPL's or an Affiliated Company's pension, retirement,
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 action by PPL or an Affiliated
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 immediately prior to a Change in Control, or the failure by PPL or an
Affiliated 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
PPL or an Affiliated Company in accordance with PPL's or an Affiliated Company's
normal vacation policy in effect at the time of the Change in Control; or
(v) any purported termination of the Executive's employment that is not
effected in the manner required by any severance agreement between the Executive
and PPL or an Affiliated Company.
The Executive's right to terminate his or her employment with PPL or an
Affiliated 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.
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1.11 "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
provided, however, a Person shall not include (i) PPL or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of PPL or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the stockholders of PPL in
substantially the same proportions as their ownership of stock of PPL.
1.12 "Termination for Cause" means
(i) if a Change in Control has occurred, the termination by the Company of
the Executive's employment due to
(a) 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 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
(b) 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
(a) and (b) of this definition, (x) no act, or failure to act, on
the Executives 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 (y) 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.
(ii) If a Change in Control has not occurred, the termination by the
Company of the Executive's employment due to the willful violation of any
Company policy (including PPL's Standards of Conduct and Integrity or any
successor thereto), violation of any lawful direction of PPL or an Affiliated
Company, gross negligence in the performance of duties or commission of a
felony.
SECTION 2. RESTRICTED STOCK AWARDS
2.1 In order to induce the Executive to remain in the employ of PPL
or an Affiliated Company, the Committee has authorized an award under Section 11
of the PP&L, Inc. Incentive Compensation Plan (the "Award") to the Executive of
30,000 shares of Common Stock ("Shares") with a restriction period that will
lapse, unless the restrictions lapse sooner pursuant to Section 2.2, 2.3 or 2.4
of this Retention
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Agreement, on May 23, 2018 (the "Lapse Date"), provided the Executive has
remained in continuous employment with PPL or an Affiliated Company until such
date.
2.2 In the event of the Executive's death or Disability while in the
employ of PPL or an Affiliated Company prior to the Lapse Date, the Award will
be prorated by multiplying the amount of shares that would have been free of
restriction at the Lapse Date by a fraction, the numerator of which will be the
years of actual service of the Executive from the date of the Award up to the
date of death or Disability, and the denominator of which will be the number of
years of service the Executive would have had if the Executive had maintained
active employment from the date of the Award until the Lapse Date.
2.3 In the event of a Change in Control, the restriction on the Award
shall lapse and the entire Award will be payable if and when
a) the Executive's employment with PPL or an Affiliated Company
is terminated by the acquiring company other than for cause as that term is
defined in the Executive's change in control agreement with PPL or in a
Termination for Cause as defined in this Retention Agreement if the Executive is
not a party to a Change in Control Agreement with PPL; or
b) the Executive terminates his employment with PPL or an
Affiliated Company for Good Reason within three years after the Change in
Control occurs.
2.4 As a condition of receiving the Award, the Executive shall agree
in writing to notify PPL within 30 days of the date of execution of this
Retention Agreement whether the Executive has made an election under Section
83(b) of the Code to report the value of the Shares as income on the date of the
grant. An Award of Shares shall be restricted as provided herein. The Shares
shall be issued without the payment of consideration by the Executive. The
certificates for the Shares shall be issued in the name of the Executive to whom
the Award is made, shall be retained, by PPL on behalf of the Executive
(together with a stock power endorsed in blank) and shall bear a restrictive
legend prohibiting the sale, transfer, pledge or hypothecation of the Shares
until the Lapse Date. The Committee may also impose such other restrictions and
conditions on the Shares as it deems appropriate.
On the Lapse Date, if all conditions in this Retention Agreement have
been met, all restrictions on the Award will expire and new certificates
representing the Shares will be issued without the restrictive legend described
in Section 4.11. As a condition precedent to the receipt of these new
certificates, the Executive (or the Executive's designated beneficiary or
personal representative) will agree to make payment to PPL or an Affiliated
Company of the amount of any federal, state or local taxes, payable by the
Executive, which are required to be withheld by PPL or an Affiliated Company
with respect to the Award.
SECTION 3. FORFEITURE OF AWARD
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3.1 Subject to Section 2.3(b) of this Retention Agreement, the
Executive shall forfeit all rights to the Award if the Executive retires or
resigns employment with PPL or an Affiliated Company prior to the Lapse Date,
unless, in the case of a resignation, the Executive resigns to immediately
assume, and does assume, another position with PPL or an Affiliated Company.
3.2 If the Executive's employment ends as a result of a Termination
for Cause, the Executive shall forfeit all rights to the Award.
3.3 Any Shares which are forfeited hereunder will be transferred to
PPL.
SECTION 4. MISCELLANEOUS PROVISIONS.
4.1 Nontransferability. No benefit or right provided under this
Retention Agreement shall be subject to alienation or assignment by an Executive
(or by any person entitled to such benefit pursuant to the terms of the
Retention Agreement) or subject to attachment or other legal process of whatever
nature. Any attempted alienation, assignment or attachment shall be void and of
no effect. Payment shall be made only to the Executive entitled to receive the
same or to the Executive's authorized legal representative. PPL and all
Affiliated Companies will observe the terms of this Retention Agreement unless
and until ordered to do otherwise by a state or federal court. As a condition of
participation, each Executive agrees to hold PPL and all Affiliated Companies
harmless from any claim that arises out of PPL's or an Affiliated Company's
obeying any such order whether such order affects a judgment of such court or is
issued to enforce a judgment or order of another court.
4.2 No Employment Right. Neither this Retention Agreement nor any
action taken hereunder shall be construed as giving any right to be retained as
an employee of PPL or any Affiliated Company.
4.3 Tax Withholding. PPL may require, as a condition of delivery of
the Award, that the Executive remit an amount sufficient to satisfy all federal,
state and local tax withholding requirements related thereto. In addition, PPL
may deduct from any salary or other payment due to such Executive, an amount
sufficient to satisfy all federal, state and local tax withholding requirements
related to the Award. Without limiting the generality of the foregoing, the
Executive may elect to satisfy all or part of the foregoing withholding
requirements by delivery of unrestricted shares of Common Stock owned by the
Executive for at least six months (or such other period as PPL may determine),
having a Fair Market Value (determined as of the date of such delivery by
Executive) equal to all or part of the amounts to be so withheld. As a condition
of accepting such delivery, PPL may require the Executive to furnish an opinion
of counsel acceptable to PPL to the effect that such delivery will not result in
the Executive incurring any liability under Section 16(b) of the Exchange Act.
Alternatively, PPL may permit any such delivery to be made by withholding
certain shares of the Award from the shares otherwise issuable pursuant to the
Award giving rise to the tax withholding
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obligation (in which event the shares shall be valued at their Fair Market Value
on the date when the withholding taxes are otherwise due).
4.4 Government and Other Regulations. The obligation of PPL to make
payment for the Award shall be subject to all applicable laws, rules and
regulations, and to such approvals by any government agencies.
4.5 Changes in Capital Structure. In the event of any change in the
outstanding shares of Common Stock by reason of any stock dividend or split,
recapitalization, combination or exchange of shares or other similar changes in
the Common Stock, appropriate adjustments shall be made to the number and/or
kind of shares awarded under the Award, as may be determined by the Committee in
its sole discretion. Such adjustments shall be conclusive and binding for all
purposes. Additional Shares issued to the Executive as the result of any such
change shall bear the same restrictions as the shares of Common Stock to which
they relate. Without limiting the generality of the foregoing, in connection
with a change in capital structure, the Committee may provide, in its sole
discretion, for the cancellation of any outstanding Awards in exchange for
payment in cash or other property of the Fair Market Value (on the date of such
exchange) of the Shares covered by such Awards.
4.6 Company Successors. In the event PPL becomes a party to a merger,
consolidation, sale of substantially all of its assets or any other corporate
reorganization in which PPL will not be the surviving corporation or in which
the holders of the Common Stock will receive securities of another corporation,
then such other corporation shall assume the rights and obligations of PPL under
this Retention Agreement.
4.7 Governing Law. All matters relating to this Retention Agreement
and to the Award granted hereunder shall be governed by the laws of the
Commonwealth of Pennsylvania without regard to its conflict of laws principles.
4.8 Relationship to Other Benefits. The Award shall not be taken into
account in determining any benefits under any pension, retirement, profit
sharing, disability or group insurance plan of PPL or any Affiliated Company
except as may be required by federal tax law and regulation or to meet other
applicable legal requirements.
4.9 Dividends and Voting Rights. Subject to the restrictions set
forth in this Retention Agreement, the Executive shall possess all incidents of
ownership of the Shares granted hereunder, including the right to receive
dividends with respect to such Shares and the right to vote such Shares.
4.10 Administration. The Committee shall have final authority to
interpret and construe this Retention Agreement and to make any and all
determinations thereunder, and its decision shall be binding and conclusive upon
the Executive and his legal representative in respect of any questions arising
under this Retention Agreement.
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The Committee shall have the authority to delegate any and all of its authority
under this Retention Agreement to any employee or group of employees of PPL or
Affiliated Company.
4.11 Certificate; Restrictive Legend. The Executive agrees that any
certificate issued for Shares prior to the lapse of any outstanding restrictions
relating thereto shall be inscribed with the following legend:
This certificate and the shares of stock
represented hereby are subject to the terms and
conditions, including forfeiture provisions and
restrictions against transfer (the "Restrictions"),
contained in the Retention Agreement entered into
between the registered owner and PPL. Any attempt to
dispose of these shares in contravention of the
Restrictions, including by way of sale, assignment,
transfer, pledge, hypothecation or otherwise, shall be
null and void and without effect.
4.12 Entire Agreement. This Retention Agreement contains the entire
agreement and understanding of the parties hereto with respect to the subject
matter contained herein and therein and supersedes all prior communications,
representations and negotiations in respect thereto.
4.13 Titles and Headings. The titles and headings of the sections in
this Retention Agreement are for convenience of reference only, and in the event
of any conflict, the text of the Retention Agreement, rather than such titles or
headings, shall control.
PPL CORPORATION
________________________________ By:______________________________________
Xxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxx
President & Chief Executive Officers
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