Exhibit 10(a)
SERVICE AGREEMENT
AGREEMENTdated the 16th day of March 2015
BETWEEN
| (1) | WESTERN POWER DISTRIBUTION (SOUTH WEST) plc("theCompany")whoseregistered office is at Avonbank, Feeder Road Bristol BS2 0TB |
and
| (2) | ROBERT ARTHUR SYMONS("theDirector") whose address is Trevear Farm, St Issey, Wadebridge, Cornwall PL27 7RQ |
This Agreement is intended to consolidate and replace the Director’s Service Contract dated 29 February 2000 and amendments to such Service Contract by letters dated 31 January 2002, 11 May 2006, and 10 December 2013 between the two parties.
References inthisAgreementto"Group"shallmeantheCompanyandanyholding company of the Company or any subsidiary or subsidiary undertaking of the Company or the Company's holding companyasdefinedintheCompanies Act2006andanyreference tothe Companyshall, wherethecontextsorequires or implies, includea reference to anycompany which controls the Company or which the Company controls or any subsidiary or any subsidiary undertaking.
NOWITISHEREBYAGREED:
1.AppointmentandTerm
| (a) | TheDirector isappointedtoservetheCompanyasChief Executivein accordance withthetermsandconditionsofthisAgreement fromthethirty first dayof March 2000 (the "Employment"). The Director's employment with theCompany and bya former Electricity Board (as defined in the Electricity Act1989) from the 6 September 1971will betreated as continuous with this Employment.The Employment will continue until: |
(i) itisdeterminedinaccordancewithClause14;or
| (ii) | theexpiryof6months'noticetoterminatethisAgreementgivenbythe CompanytotheDirector or 6months' notice toterminate thisAgreement given bythe Directortothe Company |
| (b) | TheCompanymaywithoutpriornoticesuspendand/orexcludetheDirectorfromall oranypremisesof the Companyorthe Groupfor any period not exceeding 6 months provided that throughoutsuchperiod theDirector's salary and other contractual benefits shall continue to be paid and the Director shallkeep himself available for work notwithstanding thatthe Company shallnot be obligedto provide anyworkfor the Director during suchperiod. |
2.Duties
DuringtheEmployment,theDirectormust:
| (a) | inrelationtotheGroupperformthedutiesandexercisethefunctionsasmayfrom timetotimereasonablybeassigned toor vested in him by theChairman of the Company, |
| (b) | wellandfaithfullyservetheCompanytothebestofhisknowledge,powerandability andusehisutmost endeavourstopromote theinterestsand welfareofthe Group; and |
| (c) | complywithalllawfulandreasonablerequests,instructionsandregulationsmadeby theChairmanorbyanyoneauthorisedby him and promptly providesuch explanations, information and assistance as tohis activities in the business of the Groupasare reasonable. |
3.PlaceandTime of Work
(a) TheCompany'shoursofworkarefrom8.30amto5.00pmMondaytoFriday.
HowevertheDirectorwillberequiredandexpectedto devotetotheaffairsofthe Groupthewholeofhis time andattention duringnormal businesshours andat such other times as hisduties may reasonably require.
| (b) | TheDirectorshallperformhisdutiesattheheadofficeoftheCompanyoratsuch otherplaceasthe Company shallreasonably requirefrom timetotime. IftheDirector isrequiredsubsequently torelocatethe Companyshall payall reasonable expenses in accordance withthe Company's relocation scheme in forcefromtime totime. |
4.ConflictsofInterest
TheDirectormust:
| (a) | notduringhisEmploymenthereunder(exceptintheproperperformanceofhisduties orwiththepriorwrittenconsentoftheCompany)be directlyor indirectly engaged, concerned orinterested inany other business oractivity(where suchengagement concern or interest mayreasonablybe expected to interfere withthe performance of his duties in the Employment) provided that this provision shallnot inhibit the holding (directly or through nominees) of quotedinvestments aslong as not morethan5per cent ofthe sharesor stock of anyclassof any onecompany shall beso held; |
| (b) | complywiththeCompany'sCodeofEthicsasapprovedbytheCompanyandasmay bemodifiedfrom timeto time. |
5.Remuneration
| (a) | AsremunerationforhisservicesintheEmploymenttheDirectorshall(unlessand untilotherwise agreed) receive a base salary at the rate of £535,000 per annum as of the date of this Agreement which shall accrue from day to day and be payable in instalments monthly, such salary being inclusive of any fees to which the Director may be entitled as a Director of any companyintheGroup. |
| (b) | TheCompanyshallreviewtheDirector'ssalaryasprovidedforinthesub-clause aboveannuallyandanychangesconsequentupon the said reviewshall take effect from 1st April of the same year. |
| (c) | Inadditiontothesalaryreferredtoabove,theDirectorshallbeeligibletoparticipateat theCompany'sdiscretioninany bonus orincentive schemes for senior executives and/or directorsthat theCompany may operate fromtimeto timesubjecttoand in accordance withthe rules of such schemes.Any awards made to the Director under any bonus or incentive scheme, prior to the date of this Agreement, shall be unaffected by entering into this agreement. |
6.Expenses
TheDirectorshallbereimbursedsuchexpensesasare properlyandreasonably incurredbyhimintheperformanceofhisdutiesand aredetailed inthe Company's policy onexpensesfrom time to time. The Director shall producesuch vouchersand receiptsif practical asmay be required.
7.Pension
The Director was a participant in the Electricity Supply Pension Scheme (“ESPS”) until 6 April 2006, at which time he ceased to accrue any benefits under the ESPS. The Director elected to begin drawing on his pension benefits under the ESPS as of 20 March 2012. The Director’s pension benefits determined by the ESPS and the enhanced benefits provided to the Director from time to time shall not be affected by the entering into of this Agreement and shall continue to be governed by the rules of the ESPS.
Given the Director is drawing pension benefits while in Service with the Company, the Company procures that if the Director dies thereafter while in service with the Company, a lump sum benefit will be payable from either a policy of life insurance that satisfies the conditions below, or directly by the Company. The lump sum shall be £4.75 million indexed on each policy anniversary in line with the index of retail prices. The conditions to be satisfied are that the policy does not constitute a registered pension scheme; is not issued, or held in connection with, nor forms an agreement under, a registered pension scheme; and the provision of this benefit does not otherwise prejudice the Director’s enhanced protection.
8.Car
The Director shall be entitled to car usership benefits and private fuel benefits in accordance with the Company's Executive User Car Scheme as published and varied from time to time. In addition, the Director shall be entitled to Chauffer services as needed in performance of his duties.
The total value of the Director’s Car benefits under this paragraph shall be capped at an amount of £20,000 annually. The Director shall reimburse the Company at the end of each year for any benefits received in excess of £20,000.
9.PrivateMedicalInsurance
TheDirector,hiswifeanddependentchildrenuptoage21,oruptoage25ifinfull timeeducation,shallbeentitled toparticipate ina privatemedical insurance scheme to be providedbyand at theexpense oftheCompany.
10.Holidays
| (a) | Inadditiontotheusualbankandpublicholidays,theDirectorshallbeentitledto25 workingdays'holidayineach Company HolidayYear (1st April to 31stMarch)to be takenat a time or timesagreedwithhimby theChairman of the Company.Accrued but untakenholiday will lapseat the endof the Holiday Year in which theentitlement arises and may notbecarriedforwardforuse in the next HolidayYear unless otherwise agreed with the Chairman. |
(b) UpontheterminationoftheEmploymentforwhateverreasontheDirector:
| (i) | shallbeentitledtopaymentinlieuofaccruedbutuntakenholidayentitlement forthecurrentHolidayYear,and |
| (ii) | mayberequiredtorepaytheCompanyanysalaryreceivedinrespectof holidaytakeninexcessofhis proportionate holiday entitlement. |
11.Illness
| (a) | ShouldtheDirectorbepreventedby sickness,injuryorotherincapacityfromproperly performinghisdutiesintheEmploymentheshall report thefactdirectly or indirectly to theChairman oftheCompanyas soon as is reasonably practicable. |
| (b) | Forsickness,injuryorotherincapacityofsevendaysorless,uponhisreturntowork, the Director shallcomplete an Absence Self-Certificate. For sickness, injury or other incapacity ofeightdaysor more the Directormustobtainadoctor'sstatement which he shallsubmit to the Company at appropriate intervals. |
| (c) | ProvidedtheDirectorcomplieswithsub-clauses(a)and(b)aboveheshallbeentitled toreceivehis full basicrate of remuneration (to include any statutorysick payor socialsecurity benefits payable) forthe first twentysix weeks of any sickness, injury or other incapacity in any oneyearof employment under this Agreement (whether suchweeksareconsecutive or in aggregate). For the next twenty six weekperiod payment shallbe athalf the Director's basic rate of remuneration for so much of the nexttwentysix weekperiod astheDirector suffers sickness, injury or other incapacity m any oneyear. |
| (d) | Foranyinjuryorillnessinexcessofeightdaysorinthecaseofpersistentorrecurring injuryorillnessthe Companyshall beentitledtoapproach the Director's own doctor having obtained oneach occasion the Director'sspecific prior consent and/or to requiretheDirector to attend a medical examinationwith a doctor nominated by the CompanyattheCompany's expense. |
12.Confidentiality
TheDirectormustnotatanytimewithouttheprevious consentin writingofthe Company,otherthaninthe courseof his duties,divulge or make knownto anyone any secrets or any technical, commercial, financial orotherinformation ofa confidential nature relatingto thebusiness orcustomersoftheGroupsavetotheextentthat such informationhas becomeamatterof public record. All papersand documents usedby the Directorin the courseofthis Employment areand will remainthepropertyofthe Company andmustbedeliveredupto the Companyon termination ofthe Agreement. This clause operates independently oftheexistence of the Agreement.
13.Non-Solicitation
By accepting this Employment and continuing to be employed by the Company the Director undertakes and covenants with the Company that unless otherwise agreed and consented to by the Company the Director shall not during this Employment nor for a period of twelve months it has come to an end solicit, entice, procure or endeavour to persuade any other director, officer, manager, supervisor or senior technical or sales employee of the Company or the Group with whom the Director shall have had personal contact or dealings during the course of his employment to leave the employment of the Group.
14.SummaryTermination
Withoutprejudicetoanyremedywhichit mayhaveagainsttheDirectorforbreachor non-performanceofanyoftheprovisionsof this AgreementtheCompany mayby noticein writing to theDirectorforthwith determine this Agreementif he:
| (a) | becomesbankruptormakesanycompositionorentersintoanydeedofarrangement withhiscreditors;or |
(b) is preventedby lawfromholdingtheofficeofdirector;or
(c) isguiltyof;
(i) anygrossmisconduct;or
(ii) grossnegligenceintheperformanceofhisduties;or
(iii) anybreachofanyfundamentaltermofthisAgreement;or
| (iv) | persistent neglect of his duties or persistent non-observance of any condition of this Agreement (provided that in each case the Company shall first have given due written warning of such neglect or non-observance as the case may be). |
15.Change of Control
The Director shall be entitled to certain benefits related to a change in control of the Company.For the purposes of this clause,
(a) Relevant Event means either;
| (i) | the giving of notice by the Company or the termination of the Director's employment (other than for reason of gross misconduct or material breach of contract on the Director's part (an "excluded reason"); or |
| (ii) | without a Director's express written consent, after written notice to his Employing Company, and after a thirty (30) day opportunity for the Employing Company to cure, the continuing occurrence of any of the following events: |
a.Inconsistent Duties. A meaningful and detrimental alteration in the Director's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control;
b.Reduced Salary. A reduction of five percent (5%) or more by the Employing Company in either of the following: (i) the Director's highest annual base salary rate as in effect at any time during the twelve (12) month period immediately preceding the date of the Change in Control ("Base Salary") (except for a less than ten percent (10%), across-the-board Base Salary rate reduction similarly affecting at least ninety five percent (95%) of all Employees of the Employing Company); or (ii) the sum of the Director's Base Salary plus target bonus under the Employing Company's short term bonus plan, as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board reduction of Base Salary plus target bonus under such short term plan similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company);
c.Pension and Compensation Plans. The failure by the Employing Company to continue in effect any "pension plan or agreement" or "compensation plan or agreement" in which the Director participates as of the date of the Change in Control or the elimination of the Director's participation in any such plan (except for across-the board plan changes or terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company). For purposes of this subsection (c), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Employing Company which provides for payments upon retirement; and a "compensation plan or agreement" shall mean any written arrangement executed by an authorized officer of the Employing Company which provides for periodic, non-discretionary compensatory payments to employees in the nature of bonuses;
d.Relocation. A change in the Director's work location to a location more than fifty (50) miles from the facility where the Director was located immediately prior to the Change in Control, unless such new work location is within fifty (50) miles from the Director's principal place of residence at the time of the Change in Control. The acceptance, if any, by the Director by an Employing Company at a work location which is outside the fifty (50) mile radius set forth in this Section shall not be a waiver of the Director's right to refuse subsequent transfer by the Employing Company to a location which is more than fifty (50) miles from the Director's principal place of residence at the time of the Change in Control, and such subsequent, unconsented transfer shall be "Relevant Event" under this Policy; or
e.Benefits and Perquisites. The taking of any action by the Employing Company that would directly or indirectly materially reduce the benefits enjoyed by the Director under the Employing Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which the Director was participating immediately prior to the Change in Control, or the failure by the Employing Company to provide the Director with the number of paid vacation days to which the Director is entitled on the basis of years of service with the Employing Company in accordance with the Employing Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company).
Relevant Event shall not include the Director's Death or Disability. The fact that the Director may be eligible for Retirement shall not prevent him from resigning for a Relevant Event provided a Relevant Event shall have occurred. Any dispute as to whether a Relevant Event shall have occurred or been cured on a timely basis shall be resolved by the PPL Corporation Board of Directors. Any such resolution by the PPL Board of Directors shall be binding on the Employing Company and the Director.
The Relevant Event occurs if the Director's employment is involuntarily terminated by the Employing Company at any time during the two (2) year period following a Change in Control for any reason other than for Cause or who shall voluntarily terminate his employment with his Employment Company for a Relevant Event at any time during the two (2) year period following a Change of Control. Notwithstanding anything to the contrary above, a Relevant Event does not occur if the Director:
w. is on leave of absence as of his Termination Date, unless such Director is capable of returning to work within twelve (12) weeks of such leave of absence from work;
x. voluntarily terminates his employment with the Employing Company other than for a Relevant Event;
y. has his employment terminated by the Employing Company for Cause; or
z. terminates from employment by reason of his Death or Disability.
| (b) | Change of Control means where; |
| (i) | the Company comes under the control of any person or persons acting in concert (as those terms are defined for the time being in the City Code on Takeovers and Mergers) not having control of the Company at the date of this agreement; or |
| (ii) | the person or persons having the right to control, directly or indirectly, a majority of the votes which may ordinarily be cast at general meetings of the Company or the right to control the composition of the Board, cease to have those rights, |
Change of control does not occur where PPL maintains at least 50% equity or voting interest.
| (c) | To the extent that terms used in this clause are not defined elsewhere in this Agreement, the definitions set out in clause 46 of the Electricity Supply Pension Scheme shall apply. |
| (d) | If a Relevant Event occurs the Company shall |
| (i) | pay to the Director within 7 days of the termination of his employment a sum equal to two times his taxable pay (as would fall to be included in the amount shown on the annual forms P 60 and PllD) received from the Company during the twelve months immediately preceding the Change of Control; |
| (ii) | procure that the Director's benefits under the Electricity Supply Pension Scheme which have accrued at the date of termination of employment are augmented by crediting him with two additional years' Pensionable Service subject to the Director contributing 6% of his Pensionable Salary to the pension scheme and the Company shall make such additional contributions to the Electricity Supply Pension Scheme as are necessary to secure that augmentation and, if this is not possible, due to Inland Revenue limits, procure the payment of such cash sum as is of equivalent value; |
| (iii) | procure the payment of pension benefits to the Director by the Electricity Supply Pension Scheme in accordance with the provisions of the letter from the Company to him dated 23 March 2000 on the basis of his termination of employment being caused by reorganisation, such benefits to include the augmentation described in above. |
| (e) | Subject to any rights accrued at the date of termination of the Director's employment under the provisions of any pension scheme of the Company, any payment by the Company pursuant to this clause shall be made in full and final settlement of all and any claims arising from or in connection with the Director's employment or its termination or his office of Director and its loss in each case in respect of the Company or the Group. |
| (f) | All payments to be made pursuant to this clause shall be paid less any necessary withholdings. |
| (g) | The Director hereby agrees that he shall not bring any claim before any court or employment tribunal relating to his employment and/or its termination except in so far as such claim is brought solely to enforce the provisions of this clause. The Director agrees to enter into an agreed form of compromise agreement on or around the date of termination of his employment to give effect to this clause. |
| (h) | The Director is also entitled to certain benefits related to a change in control of the Company as set forth in the Agreement dated 11 May 2006 by and between PPL Corporation and the Director, which is attached to this Agreement as Attachment A. |
16.Resignation from Directorships Following Termination of Employment
UponterminationofthisEmploymentforwhateverreasontheDirectormustforthwith tenderhisresignationasa Director of any Group company without compensation.
TheDirectorherebyirrevocablyauthorisestheCompanytoappointsomepersoninhis nameandonhisbehalftosign anydocuments anddo anythings necessary togive effectthereto,if the Directorshallfailtosign ordothe samehimself The Director shall alsopromptly return all Company property, equipment anddocuments(including all copies) to the Company.
17.Effect of Termination of this Agreement
TheexpiryorterminationofthisAgreementhowsoeverarisingshallnotoperateto affectanyoftheprovisionshereofwhichare expressed tooperate orhave effect thereafter and shall not prejudice the exercise of any right to remedy ofeither party accrued beforehand.
18.Disciplinary and Grievance Procedure
IftheDirectorisdissatisfiedwithany disciplinaryactionorhasanygrievance concerningthisEmploymentheshouldraisethe matter with the Chairman.
19.Patents, Secrets, Processes and Improvements
| (a) | Anydiscoveryorinventionorsecretprocessorimprovementinproceduremadeor discovered bytheDirector whilein the serviceof the Companywhetherbeforeorafter the dateof this Agreement with orin any wayaffectingorrelating to the businessof the Companyor ofany company inthe Group or capable of being used or adapted for usetherein or in connectiontherewithshall forthwithbe disclosed to the Company and shall belongtoand bethe absolute property of the Company. |
| (b) | TheDirectorshall,ifandwheneverrequiredsotodoby theCompanyattheexpense oftheCompany,apply tojoin with the Companyin applyingfor letterspatent orother equivalent protectionintheUnitedKingdom and in any partofthe world for any such discovery, invention, processorimprovement asaforesaid and shallat the expense of theCompany execute anddo allinstruments andthingsnecessary for vestingthesaid letters patent or other equivalent protection whenobtained and all rights, title to,and interest in the samein theCompany absolutely and as solebeneficial owner or in such other personasthe Companymay specify. TheDirector hereby irrevocably appoints the Company to be hisattorney in his name and on hisbehalf toexecuteandtodoany such instrument orthingand generally tousehisname for thepurpose ofgivingtothe Company the full benefit of the provisions of this clausebutnototherwisein favour of any third party a certificate in writing signed byany Director or the Secretary of the Company that any instrument oract falls within theauthorityhereby conferred shall be conclusiveevidence that such isthecase. |
| 20. | Governing Law |
| ThisAgreementandtheEmploymentshallbegovernedbyandconstruedin accordancewithEnglishlawinallrespects.The partiesagree that theEnglish Courts and Tribunalsshall haveexclusive jurisdiction to determineany disputes or claims arising underor in connection withthis Agreement, the Employment or the termination ofeitherorboth of them. |
21.Notices
Anynoticetobegivenhereundershallbewriting.NoticetotheDirectorshallbe sufficientlyservedby being delivered personallytohimorby being sent byfirst class postaddressed tohimat hisusualorlastknown place ofabode.Anynoticeif so posted shallbe deemed served upon the firstdayfollowing thaton which it was posted. Noticeto theCompany shallbe sufficiently servedbybeing deliveredto the Company Secretary attheRegistered OfficeoftheCompany.
SIGNEDonbehalfof the Company by R L Klingensmith, Chairman in the presence of: |
……………………………………………...
|
Witness signature Name (block capitals) Address | …………………………………………….. …………………………………………….. …………………………………………….. …………………………………………….. |
SIGNED by the Director R A Symons in the presence of:
| …………………………………………….. |
Witness signature Name (block capitals) Address | …………………………………………….. …………………………………………….. …………………………………………….. …………………………………………….. |
ATTACHMENT A
AGREEMENT
THIS AGREEMENT, effectiveas of May 11, 2006 ismadebyandbetweenPPL Corporation,aPennsylvania corporationand RobertA. Symons(the"Executive").
WHEREAS,theCompany considersitessential tothe bestinterestsofitsshareownersto fosterthecontinuedemploymentofkeymanagementpersonnel by the Company or any Group Company;
WHEREAS,theBoardofDirectorsoftheCompany(the"Board")recognizesthat,asisthe casewithmanypublicly-heldcorporations,thepossibility of aChange in Control (as defined in the last Section hereof) existsandthatsuchpossibility, andtheuncertainty and questions which itmayraise amongmanagement,may result inthedeparture ordistraction of management personnelemployed by the Company orany Group Company tothe detriment of the Company and itsshareowners;
WHEREAS,theBoardhasdeterminedthatappropriatestepsshouldbetakentoreinforceand encouragethecontinuedattentionanddedicationofmembers ofmanagement, including the Executive, totheir assigned dutieswithoutdistractionin theface ofpotentiallydisturbing circumstancesarising from the possibilityof a Change inControl; and
WHEREAS,theExecutiveisemployedbyWestern PowerDistribution(SouthWest)plc(a GroupCompany)andaccordinglyitisintendedthat any entitlementsarising under the arrangements applying in respect of his employment by Western Power Distribution(South West)plc, shall not be prejudicedby any termsofthisAgreement, and shall be set off against the entitlements of the Executive under this Agreement.
NOWTHEREFORE,inconsiderationofthepremisesandthemutualcovenantsherein contained,theCompanyandthe Executivehereby agree as follows:
1. DefinedTerms
Thedefinitions ofcapitalizedtermsused inthisAgreementareprovidedinthelast
Sectionhereof.
2. EffectofAgreement
| 2.1 | ThepartiesacknowledgeandagreethatnothinginthisAgreementshalldisapply, replace,prejudiceorotherwiseaffecttheExecutive'sentitlementsunder the WPD EmploymentContractand nor shall thisAgreement be interpreted as a guarantee by the Company of anysuch entitlements. |
| 2.2 | SaveinrespectoftheobligationreferredtoinSection6.1(c)belowwherethe circumstances thatgiverisetoany entitlement of the Executiveunder theterms of this Agreement also give rise to an entitlement ofthe Executive under the WPD Employment Contract,the obligationof theCompany tomake any paymentorprovide anybenefit under this Agreementshall belimitedsolely tothe extent that such |
payment orbenefitdueunderthisAgreementshallexceedtheExecutive'sentitlement to a corresponding type or descriptionofpaymentorbenefitundertheWPD EmploymentContract. For the avoidance ofdoubt an entitlement to abenefit of a particulartype ordescription under the WPD Employment Contract shall only beset off againstthe corresponding type or description of benefit provided for under this Agreement. In respect of the obligation referred to in Section6.l(c) below, the obligation of theCompany tomakea payment orprovide a benefit shallbe limitedto the extent that such paymentor benefit shallexceed the value of any augmentation payable under clause 14.A.2(b)of theWPD Employment Contract (orsuch clause as shallhave replaced such clause).
| 2.3 | Theprovisionsofthissection2overrideanytermsofthisAgreementwhichare inconsistentwiththese provisions and the parties confirmthat their intention is that the Executive's entitlements under this Agreement are cumulative to the extent they exceed any entitlement toacorresponding type or description of benefitunderthe WPD Employment Contract. |
3. TermofAgreement
TheTermofthisAgreementshallcommenceonthedatehereof andshallcontinuein effectthroughDecember 31,2007;provided, however, thatcommencing on January1,
2007andeachJanuary1thereafter,theTermshallautomaticallybeextendedforone additionalyearunless,eitherthe CompanyortheExecutive gives at least15 months advance notice oftermination by, not later thanSeptember 30 of the year precedingthe yearin which theTerm isthen scheduled to expire, giving notice not to extend the Term; andfurther provided,however, that ifa Change in Control shall have occurred during the Term, the Term shallexpire no earlier than thirty-six (36) months beyond themonthinwhich such Changein Control occurred. Notwithstanding theforegoing in the event that (a) prior to the occurrence of a Change in Control orPotential Change in Control, the Executive's Employment is terminatedfor anyreason ortheExecutive is no longer VicePresident- United Kingdom, PPL Global,LLC , or(b) following the occurrence ofaPotential Change inControl but prior tothe occurrence of aChange in Control, theExecutiveis no longer VicePresident- United Kingdom,PPL Global, LLC, and such change does notconstitute Good Reason under the circumstances described inclauses(B)and(C) ofthesecond sentence of Section 6.1 hereof (treating all references in paragraphs(i) through (vi) ofthe definition ofGoodReason to a "ChangeinControl" as references to a "Potential Changein Control") thenthis Agreement shall terminate as of the date that the Executive's Employment is terminated, orthe Executive's position or title has been so changed,as the case may be.
4. Company's CovenantsSummarized
InordertoinducetheExecutivetoremainintheEmploymentandinconsiderationof theExecutive'scovenants setforth in Section 5 hereof, theCompany agrees, under the conditions described herein (and subject to Section 2.2 above), to paythe Executive the Severance Payments and theother payments and benefits described herein.Except asprovided inSection 8.1 hereof,no SeverancePayments shall be payable under this Agreement unless there shallhavebeen (or,under the terms of thesecond sentenceof Section 6.1 hereof, there shall bedeemedto havebeen) a termination of the
Executive'sEmploymentfollowingaChange inControlandduringtheTerm.This Agreementshallnotbeconstrued ascreatingan expressorimplied contract of employmentwith the Company and,except asotherwiseagreed to inwriting between theExecutive and the Company, the Executiveshall not have any right to beretained in the employofthe Company.
5. TheExecutive's Covenants
TheExecutiveagreesthat,subjecttothetermsandconditionsofthisAgreement,in theeventofa PotentialChange in Controlduring the Term, the Executive will remain in the Employmentuntil the earliest of (i) a datewhich is six (6) monthsafter the date of such Potential Changeof Control, (ii)thedate of a Change in Control, (iii) the date of termination by the Executive of the Executive's Employment forGood Reasonor by reason of death, Disability orRetirement, or (iv) the terminationof the Executive's Employment for anyreason.
6. SeverancePayments
6.1 SubjecttoSections2.2,6.2,6.5and6.6hereof,theCompanyshallpaytheExecutivethepayments,andprovide the Executive thebenefits, described in this Section 6.1(the "Severance Payments")upon the termination of theExecutive's Employment followingaChangein Control andduring theTerm, unlesssuch termination is (i) for Cause, (ii)byreason of death, Disability or Retirement, or (iii) bythe Executivewithout Good Reason. For purposes of thisAgreement, the Executive's Employment shallbe deemed to have been terminated following a Change in Control without Cause orby the Executive with Good Reason if(A)the Executive's Employment is terminated withoutCause prior to a Change in Control (whether ornot aChange inControlever occurs) andsuchterminationwas at the request or directionof a Person who has entered into an agreement withthe Company the consummation of which would constituteaChange in Controlor(B)ifthe Executiveterminateshis Employmentfor Good Reason prior to aChange in Control(whether or not a ChangeinControlever occurs)and the circumstance orevent which constitutes Good Reason occurs at the request ordirection of such Person, or (C) the Executive's Employment isterminated without Causeor bythe Executive forGood Reason and such terminationor the circumstance or event which constitutes GoodReason 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 applicabilityof the immediately preceding sentence,any position taken by theExecutive shall be presumed to be correctunless the Company establishesto the Board by clear and convincing evidence that such position is not correct.
(a) TheCompanyshallpaytotheExecutivealumpsumseverancepayment,in cash,equaltotwotimesthesumof(i) the Executive's base salary as in effect immediately priortothe Dateof Termination or, ifhigher, in effect immediately priortothe first occurrence of an eventorcircumstance constituting Good Reason; (ii)the Executive'sannual rate of Pension Compensation Adjustment as in effect immediately prior to the Date of Termination or, if higher,in effect immediatelypriorto the firstoccurrence of an event or circumstance constitutingGood Reason; and (iii) the highest annual bonus earned by the Executive pursuant to any annual bonusorincentive plan
| maintainedinrelationtotheEmployment inrespectofanyofthelastthree fiscalyearsendingimmediately prior tothefiscalyearinwhichoccurs the Date of Termination or, if higher, immediatelyprior 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, for example where the Executive requests to exchange some or all of any annual bonus forgrants of restricted stock awards or stock options in accordance withthe Company's Cash Incentive Premium Exchange Programme). For purposes of determining the value of the annual bonus earned by the Executive in any calendar year, the value of any other restricted stock awards or stock options earned bythe Executiveinanysuch year shall not be included inthevalue of the annual bonus for such year; | ||
| (b) | TheExecutive isnoteligibleforPPLCorporation's orPPLGlobal, LLC'slife, disability, accident, andhealth insurance benefits, andthereforethere isno provisionforanyextensionofsuch benefits after theDate ofTermination. | |
| (c) | Inadditiontotheretirementbenefits towhichtheExecutivemaybeentitled undereachPensionPlan,ifany,oranysuccessorplanthereto, the Company shall pay the Executive a lump sum amount, in cash, equal to the actuarial equivalent value of twentyfour (24) additionalmonthsof service credit under thePensionPlan (calculated as if theExecutivewas an activemember of the PensionPlan at the Date of Termination) less (i) the value of the Pension Compensation Adjustment that would have been received by the Executive during the said twenty fourmonthperiod (assuming he had continued in employment that entitled him to payment of the Pension Compensation Adjustment) basedonthe level of annual compensation/remuneration paid to himat the Date ofTermination; (ii) thevalue ofthe contributions that would havebeen paid by the Executiveduringthe said twenty four month period if he had' been an activemember of the Pension Plan; (iii) interestin respect of(i) and (ii) above. For purposes of this Section6.l(c), "actuarial equivalent" shall be determined using the same assumptions utilized under the PPL Supplemental ExecutiveRetirement Plan or anysuccessorplan,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. | |
| (d) | The Executive isnoteligiblefor PPL Corporation's orPPLGlobal,LLC's post-retirementhealthcareorlifeinsuranceplans, and therefore there is no provision for any extension of such benefits after theDate of Termination. | |
| (e) | TheCompanyshallprovidetheExecutive withoutplacementservicessuitable | |
| totheExecutive'spositionforaperiodoftwoyearsor,ifearlier,untilthefirst | ||
| acceptancebytheExecutiveofanofferofemployment. | ||
| 6.2 | ||
| (a) | Notwithstanding anyotherprovisions ofthisAgreement,intheeventthatany | |
| paymentorbenefitreceivedorto bereceivedbytheExecutiveinconnection | ||
withaChangeinControlortheterminationoftheExecutive'sEmployment (whetherpursuanttothetermsofthisAgreementorany other plan, arrangementor agreement with the Company, any Person whose actions result in a Change inControl or any Personaffiliated withthe Company or such Person) (allsuch payments and benefits, includingthe Severance Payments, being hereinafter called "Total Payments") would be subject (inwhole or part), tothe Excise Tax, then the cash Severance Payments shall be reduced (if necessary to zero) to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (aftertaking into account any reduction in the Total Payments providedbyreasonof section280G of the Code in such other plan, arrangement or agreement)and all other SeverancePayments shall thereafterbereduced (if necessary,to zero) so that noportion oftheTotal Payments is subjecttothe Excise Tax, if (i) the net amount ofsuch Total Payments, as soreduced, (and after deduction ofthenetamount offederal, state and local income tax on such reduced Total Payments)is greater than (ii) theexcess of(x)the netamount of such Total Payments,without reduction (but after deduction of the net amount of federal, state and local income tax on suchTotalPayments), over (y)theamount of Excise Tax to which the Executivewould be subject in respectof suchTotal Payments.
(b) ForpurposesofdeterminingwhetherandtheextenttowhichtheTotal PaymentswillbesubjecttotheExciseTax, (i)no portion ofthe Total Payments the receiptor enjoyment ofwhich theExecutiveshallhave waived at such timeand in such manneras not to constitutea "payment"withinthe meaning of section 280G(b) of theCode shallbe taken into account, (ii) no portion ofthe TotalPayments shall betakeninto account which, in the opinion of tax counsel selected by theaccountingfirmthat was, immediatelypriorto the Change in Control, the Company'sindependent auditor (the "Auditor"), does not constitutea "parachute payment" within the meaning ofsection
280G(b)(2)oftheCode,(includingbyreasonofsection280G(b)(4)(A)ofthe
Code)and,incalculatingtheExciseTax,noportionofsuchTotalPayments shallbetakenintoaccountwhichconstitutesreasonable compensation for servicesactuallyrendered, within the meaningofsection 280G(b)(4)(B) of the Code, in excessof theBase Amount allocableto such reasonable compensation, and(iii) the valueof any non-cash benefit orany deferred payment or benefitincludedin the Total Payments shall be determined by the Auditorinaccordance with theprinciples of sections 280G(d)(3) and(4) ofthe Code. Priorto the payment date setforth in Section 6.3 hereof, theCompany shall provide the Executive with itscalculation ofthe amounts referredto in thisSectionand suchsupporting materials asare reasonably necessary for the Executive to evaluatethe Company's calculations. Ifthe Executiveobjects to the Company's calculations, the Company shall pay to the Executive such portion oftheSeverance Payments (up to 100%thereof) as the Executive determinesis necessary to result inthe Executive receiving the greater of clauses (i) and (ii) ofSection 6.2(a) hereof.
(c) IfitisestablishedpursuanttoafinaldeterminationofacourtoranInternal RevenueServiceproceedingthat, notwithstanding the goodfaithofthe Executiveand the Companyin applyingthe terms of this Section6.2, theTotal
PaymentspaidtoorfortheExecutive'sbenefitareinanamountthatwould resultinanyportionof suchTotal Paymentsbeing subjecttothe ExciseTax, then, ifsuchrepaymentwouldresult in(i)no portionof the remainingTotal Paymentsbeing subject to the Excise Tax and (ii) a dollar-for-dollar reduction in the Executive'staxable income andwages for purposes offederal, stateand local income and employment taxes,theExecutive shallhavean obligation to pay the Company upon demandanamount equal to the sum of (i) the excess of theTotalPayments paid to or for the Executive's benefit over the Total Payments thatcould have beenpaid toorfor theExecutive's benefit without any portion of suchTotalPayments being subject tothe ExciseTax; and (ii) intereston the amount set forthin clause (i) of this sentenceat the rate providedin section 1274(b)(2)(B) of the Code from the date of the Executive's receipt of such excess until the dateof such payment.
| 6.3 | Thepaymentsprovidedinsubsection6.1(a)and(c)hereofshallbemadenotlaterthan thefifth dayfollowing theDate of Termination; provided,however, that ifthe amounts of such payments,andthe limitationon such payments set forthin Section |
6.2hereof,cannotbefinallydeterminedonorbeforesuch day,theCompany shallpay totheExecutiveonsuchdayan estimate, as determinedingood faith by the Company, of the minimum amount of such payments to whichthe Executive isclearly entitled and shall pay the remainder of such payments (togetherwithinterest on theunpaid remainder (or on such payments tothe extent the Company fails tomake such payments when due)at 120% of the rateprovided in section 1274(b)(2)(B) of the Code)assoon as theamount thereof canbe determined but in no event later thanthe thirtieth (30th) day after the Date of Termination.In theevent that theamount of the estimated payments exceeds theamount subsequently determined to havebeen due, suchexcess shall constitute a loan by the Company tothe Executive,payable on the fifth (5th) business day after demand by the Company(together with interest at 120% of the rateprovidedin section 1274(b)(2)(B) of the Code). At thetime that payments are made under thisAgreement, theCompany shall provide the Executive with a writtenstatement setting forth the mannerin which such payments werecalculated and the basis for such calculations including, withoutlimitation, any opinions or other advice the Companyhas receivedfromTax Counsel, the Auditor or other advisors or consultants(and any such opinions oradvice which are inwriting shallbeattached to the statement).
| 6.4 | TheCompanyalsoshallpaytotheExecutivealllegal feesandexpensesincurredby theExecutivein disputing in goodfaith any issuehereunder or in seeking in good faith toobtainorenforce any benefitor right providedby this Agreement or in connection withanytaxaudit or proceeding totheextent attributable to the applicationof section |
4999oftheCodetoanypaymentorbenefitprovidedhereunder.Suchpaymentsshall bemadewithin five (5) businessdays afterdelivery of the Executive's writtenrequests for payment accompanied with such evidenceof feesandexpenses incurred as the Companyreasonably may require.
| 6.5 | Thepaymentand/orprovisionoftheSeverancePaymentsdescribedinSection6.1 shallbeconditionalupontheExecutive first having entered into a compromise agreementin a form tobe determinedby the Company (the"Compromise Agreement")with: |
(a)theCompany;and/or
(b)anyGroupCompany;and/or
(c)anySuccessor
underthetermsofwhichtheExecutiveshallwaiveanyclaim,right,entitlement,or liabilityowing,whetherundercontractorstatute,in connection withhis Employment and/or the termination of such Employment but excluding anyclaim, right, entitlement orliability owing under contract that theExecutive may haveagainst WPD South Westunderthe terms of the WPDEmployment Contract orany righthemay have underthe PensionPlan.
| 6.6 | IftheExecutiveisawardedanycompensationordamagesbyacourtortribunal pursuanttoanyaction, claimor proceedings inany courtor tribunal in theUnited Kingdom against the Company, any GroupCompany,any Successor, or any of its or theirofficers, employees oragents in respect of any matter that is the subject of the waiver containedin the Compromise Agreement ("Proceedings"), the Executive shall repay tothe Company or such Group Company as thecase may be, immediatelyupon demand, the SeverancePayments or such amount of the Severance Payments as shall be equivalent tothe total amount of the compensationor damages (including interest) awarded, togetherwiththe full amount of any legal fees incurred bythe Company or suchGroup Company or Successor in defending such Proceedings. Any part of the Severance Payments which remains outstanding shall cease tobe payableunder this Agreement with effect from the date ofcommencement of Proceedings. |
7. NoMitigation
TheCompanyagreesthat,iftheExecutive'sEmploymentterminatesduringtheTerm, theExecutiveisnotrequiredtoseekother employment or toattempt in any way to reduce any amounts payableto the Executive by the Company pursuantto Section 6 hereof. Further, the amountof any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by the Executiveasthe result of employment by another employer,by retirementbenefits, by offset againstany amount claimed to be owed by the Executive totheCompany, or otherwise.
8. Successors; Binding Agreement
| 8.1 | InadditiontoanyobligationsimposedbylawuponanysuccessortotheCompanyor PPLGlobal, LLC, the Company willrequireanysuccessor (whetherdirect or indirect, by purchase, merger, consolidation or otherwise) to all or substantially allof the businessand/or assetsofthe Company orPPL Global, LLCto expressly assume and agree toperform thisAgreement in the same mannerand to thesame extentthat the Company would be requiredto perform itif no such successionhadtakenplace. Failure of the Company to obtainsuch assumptionandagreement prior tothe effectiveness of anysuch successionshall be a breach of thisAgreementand shall entitle theExecutive to compensation from the Companyin the same amount and on the same terms as the Executivewould beentitledto hereunderiftheExecutive were to terminate the Executive'sEmployment for GoodReason aftera Change inControl, |
exceptthat,forpurposesofimplementingtheforegoing,thedateonwhichanysuch successionbecomeseffectiveshallbedeemed the Date of Termination.
8.2 ThisAgreement shallinuretothebenefit ofandbeenforceable bythe Executive'spersonal orlegalrepresentatives,executors,administrators,successors,heirs, distributees, devisees andlegatees.If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amountswhich,bytheir terms, terminate upon the death of the Executive) ifthe Executive hadcontinued tolive, all suchamounts, unless otherwise provided herein,shallbe paid in accordancewiththe terms of thisAgreement to the executors, personal representatives or administratorsof theExecutive'sestate.
9. Notices
ForthepurposeofthisAgreement,noticesandallothercommunicationsprovidedfor intheAgreement shallbeinwritingand shall be deemed tohave been duly given when deliveredormailed by United States registered mail, return receipt requested, postage prepaid, addressed, to the Executive at the last known address maintainedin the Company'spersonnel records, and totheCompany, to the address set forth below, or tosuch otheraddressas either party may have furnished to theother inwritinginaccordanceherewith, exceptthat notice ofchange of address shall beeffective only uponactual receipt:
TotheCompany: PPLCorporation
TwoNorth9thStreet
Allentown,Pennsylvania 18101
Attention:CorporateSecretary
10. Miscellaneous
Noprovision ofthisAgreementmaybemodified,waivedordischargedunlesssuch waiver,modificationordischargeisagreedtoinwriting and signed by theExecutive and such officer as maybe specifically designated by the Board. Nowaiver by either party heretoatany time of any breach by the otherpartyhereto of, or anylackof compliance with, anycondition or provisionof this Agreementtobe performed by such other party shallbedeemed a waiver of similar or dissimilar provisions or conditionsatthe same orat any prior or subsequenttime. 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. The validity, interpretation,constructionand performanceofthis Agreement shall be governedby the laws of the Commonwealth of Pennsylvania. All references to sections oftheExchangeAct or the Code shall be deemed also to refer to any successor provisionsto such sections. Anypaymentsprovided for hereunder shall be paid net of any applicablewithholding requiredunder federal, state or local law and any additionalwithholdingto which the Executivehas agreed.The obligations of the Company andthe Executiveunder this Agreement that by their naturemay require
eitherpartialortotalperformanceaftertheexpirationoftheTerm (including,without limitation,thoseunderSection6hereof)shall survive such expiration.
11. Validity; Pooling
TheinvalidityorunenforceabilityofanyprovisionofthisAgreementshallnotaffect thevalidityorenforceabilityofany other provision of thisAgreement, which shall remainin full force and effect. Inthe event that the Company is party to atransaction that is otherwise intended to qualify for"pooling of interests" accounting treatment then (a) this Agreementshall, to the extent practicable, be interpreted so as topermit suchaccounting treatment, and (b) to the extent that the application of clause (a)of this Section 11 doesnot preserve the availability of such accounting treatment, then,to the extent that any provisionof thisAgreement disqualifiesthetransactionas a "pooling" transaction(including,ifapplicable, the entire Agreement),such provision shall be null and voidas ofthedatehereof.All determinationsunder thisSection 11 shall be made by the accounting firm whoseopinion with respect to "pooling of interests" is requiredas a condition to theconsummationof suchtransaction.
12. Counterparts
ThisAgreementmaybeexecutedinseveralcounterparts,eachofwhichshallbe deemedtobe anoriginalbut allof whichtogether will constitute oneand the same instrument.
13. SettlementofDisputes;Arbitration
TheBoardshallmakealldeterminationsastotheExecutive's righttobenefitsunder thisAgreement.Anydenialby the Board of a claimforbenefitsunderthisAgreement shall bestated in writingand deliveredor mailed to the Executive andsuchnotice shall setforththe specificreasons forthedenial and the specific provisions of this Agreement reliedupon, and shallbe written in amanner that may beunderstood without legal oractuarial counsel. In addition, theBoard shall afford areasonable opportunity to the Executive for a review of the decision denying the Executive's claim and, inthe event of continued disagreement, the Executive mayappealwithin a period of 60days after receipt of notification of denial. Failure to perfect an appeal within the
60-dayperiodshallmakethedecisionconclusive.Anyfurtherdisputeorcontroversy arisingunderorinconnectionwiththisAgreementshallbe settledexclusively by arbitration inPhiladelphia, 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'saward in any court having jurisdiction.
14. Definitions
ForpurposesofthisAgreement, thefollowingtermsshallhavethemeaningsindicated below:
(a) "Base Amount" shall havethemeaning setforthinsection 280G(b)(3) ofthe
Code.
(b) "BeneficialOwner"shallhavethemeaningsetforthinRule13d-3underthe
ExchangeAct.
(c) "Board"shallmeantheBoardofDirectorsoftheCompany.
(d) "Cause"forterminationoftheExecutive'sEmploymentshallmean(i)the willfulandcontinuedfailure bytheExecutivetosubstantiallyperformthe Executive'sduties (otherthan 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 aNotice of Termination for Good Reason by the Executive) after awritten demand for substantial performanceis delivered to the Executive, which demand specifically identifies themannerinwhich the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in conduct whichisdemonstrably and materially injuriousto theCompany oritssubsidiaries, monetarily or otherwise.For purposesofclauses (i) and(ii)of thisdefinition, (x) no act,or failure to act, ontheExecutive's part shallbedeemed "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief thatthe Executive's act, or failure to act, wasin the best interest of the Companyor anyGroupCompany, and(y) intheeventof a dispute concerning the application of this provision, no claim bythe Company that Cause exists shallbe given effect unless theCompanyestablishesto theBoard by clearand convincing evidence that Cause exists.
(e) "ChangeinControl"meanstheoccurrenceofanyoneof thefollowingevents:
(i) thefollowingindividualsceaseforanyreasontoconstituteamajority ofthenumberofdirectorsthen serving:individualswho, on thedate hereof, constitute the Board and any new director(other than a director whoseinitial assumption of office is in connection with an actual or threatenedelection contest, includingbut not limited to a consent solicitation,relating to theelection of directors of the Company) whose appointment orelection bytheBoard or nomination for election by the Company'sshareowners wasapproved or recommended bya vote ofat least two-thirds (2/3) of thedirectors then still in office who either were directorson thedate hereof or whose appointment, election or nomination for election was previously so approved or recommended;
(ii) any Person becomesthe Beneficial Owner,directly or indirectly,of securitiesoftheCompanyrepresenting20%ormoreofthecombined votingpoweroftheCompany's thenoutstandingsecuritiesentitledto votegenerally in theelection of directors;
(iii) thereisconsummatedamergerorconsolidationoftheCompanyor PPLGlobal,LLC,otherthan(I)amergerorconsolidation whichwould result in thevoting securities of theCompany and PPL Global, LLC outstanding immediately prior to such merger or consolidation continuingto represent (either byremaining outstanding or by being converted into votingsecurities of the survivingentity orany parent thereof),in combination with the ownership of any trustee or other
fiduciaryholdingsecuritiesunderanemployeebenefitplanofthe CompanyoranysubsidiaryoftheCompany,atleast 60% ofthe combined voting power of the securities oftheCompany and atleast
60%ofthecombinedvotingpowerofthesecuritiesofPPLGlobal, LLC,oratleast60% of the combined votingpower of thesecurities of suchsurviving entity orany parent thereof outstandingimmediately aftersuch merger or consolidation; or (II) a merger or consolidation effectedto implementa recapitalization of the Company (orsimilar transaction) in whichno Person isorbecomesthe Beneficial Owner, directly or indirectly, of securitiesoftheCompany(excludingin the securities Beneficially Owned by such Person anysecurities acquired directly from the Company or its Affiliates) representing 20%or more of the combinedvotingpowerof the Company's then outstanding securities;
(iv) the shareowners ofthe Company approve a plan of complete liquidationordissolutionoftheCompany;
(v) theBoardadoptsaresolutiontotheeffectthata"ChangeinControl" hasoccurredorisanticipatedto occur;
(vi) allorsubstantiallyalloftheassetsofsubsidiariesofPPLGlobal,LLC thatarelocatedintheUnitedKingdomaresold, or allor substantially all of the United Kingdom assets of the subsidiaries of PPL Global, LLC are transferredtothe ownership ofone or morebusiness entities thathavelessthan 50%of their ownershipinterestsattributable to PPL Global, LLC and its subsidiariesafter such transfer andPPLGlobal, LLC does not exercise active operationalcontrol of such entity or entities;
(vii) either(a)WPDSouthWestcomesunderthecontrolofanypersonor personsactinginconcert(asthosetermsare defined for the timebeing in the City CodeonTakeoversand Mergersof theUnited Kingdom) nothaving controlof WPD SouthWest at thedate of this Agreement, or (b) thepersonor persons having the right to control, directly or indirectly, a majority of thevotes which mayordinarily be cast at general meetings ofWPD South West or the right to control the compositionof theBoard of Directorsof WPD SouthWest,ceaseto havethose rights, provided,under (a) or(b), the Company does not maintainan equity or votinginterestof at least50%.
(f) "Code"shallmeantheInternalRevenue Codeof1986,asamendedfromtime totime.
(g) "Company"shallmean PPLCorporationand,exceptindetermining,under Section14(e)hereof,whetherornotanyChangeinControlof the Company has occurred in connection with such succession, shall include its subsidiaries and any successor to itsbusiness and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.
(h) "Date of Termination" shall mean thedate on which theEmployment terminates.
(i) "Disability"shallbedeemedthereasonfortheterminationoftheExecutive's Employment,if,asaresultofthe Executive's incapacity duetophysical or mental illness, the Executive shall have been absent from the full-time performanceof the Executive's duties for a periodof six (6) consecutive months, the Executive shall have been given aNoticeofTermination for Disability, and, within thirty (30)days after such Notice of Termination is given, theExecutive shall not havereturned to the full-time performance of the Executive'sduties.
(j) "Employment" shallmeanthe employment oftheExecutivebyWPDSouth Westorbyanyother GroupCompany (orSuccessor)asshallemploythe Executive atthe relevant time.
(k) "ExchangeAct"shallmeantheSecurities ExchangeActof1934,asamended fromtimetotime.
(1) "Excise Tax"shallmeananyexcise taximposedundersection4999ofthe
Code.
(m) "Executive" shall meantheindividual namedinthefirstparagraphofthis
Agreement.
(n) "GoodReason"forterminationoftheExecutive'sEmploymentbysuch Executiveshallmeantheoccurrence(withouttheExecutive's express written consent) aftera Change inControl, or prior to a Changein Controlunder the circumstances described in clauses(B) and(C) of the second sentenceof Section 6.1hereof(treating all references in paragraphs (i) through (vi)below toa "Change in Control" as references to a "Potential Change inControl"),of any oneof thefollowing acts, orfailures to act:
(i) theassignmenttotheExecutive ofany dutiesinconsistentwiththe Executive'sstatusasanexecutiveofficerorkeyemployee ofthe Companyorasubstantialadversealterationin the nature orstatus of the Executive's responsibilities from thoseineffect immediately prior to aChange in Control;
(ii) areductionoftheExecutive'sannualbase salaryasineffectonthedate ofthisAgreement,orasthesame may be increasedfromtime totime, except for across-the-board decreases uniformly affecting management, key employeesand salaried employeesof the business unit in which the Executiveis then employed;
(iii) therelocationoftheExecutive'sprincipalworklocationtoalocation morethan30milesfromthevicinityof such work location immediately prior to a Change in Control or the Executive being required to be based anywhere other thansuch principal place of employment (or
permittedrelocationthereof)exceptforrequiredtravelonbusinessto anextentsubstantiallyconsistentwiththeExecutive'spresentbusiness travel obligations;
(iv) thefailuretopaytotheExecutiveanyportionoftheExecutive'scurrent compensationortopay to the Executiveany portion of aninstallment of deferred compensation underany deferred compensationprogram applying totheEmployment, within seven (7) days ofthedate such compensation is due, except for across-the-board compensation deferrals uniformly affecting management,keyemployees andsalaried employees of the business unit in which the Executive isthen employed;
(v) thefailuretocontinueineffectanycompensationorbenefitplanin whichtheExecutiveparticipatesimmediately priorto a Change in Control which is material to the Executive's total compensation, or any substitute plans adopted prior to a Change inControl, unlessan equitable arrangement (embodied in an ongoing substitute or alternative plan)has beenmade with respect to such plan, or the failure to continue the Executive's participation therein(or in suchsubstituteor alternative plan) ona basis notmaterially lessfavorable,both in terms of the amount or timing of paymentof benefitsprovidedand the level of the Executive's participationrelative to other participants,as existed immediately prior to theChange in Control; or
(vi) thefailuretocontinuetoprovidetheExecutivewithbenefits substantiallysimilartothoseenjoyedbytheExecutive under anyof the Company's pension, savings,life insurance,medical,health and accident, or disabilityplans in whichthe Executive was participating immediatelyprior toaChangein Control, except for across-the-board changes to anysuch plans uniformlyaffectingall participants in such plans, the takingof any other action which woulddirectly or indirectly materially reduce any of such benefits ordeprive theExecutive of any material fringebenefitenjoyedby the Executiveat the time of the Change in Control, or the failureto provide the Executivewith the numberof paidvacation daystowhich the Executive is entitledon the basisof years ofservice in accordance withthenormalvacation policy at thetime of theChange in Control.
TheExecutive'srighttoterminatehisorherEmploymentforGoodReasonshallnot beaffectedby theExecutive'sincapacity due to physical or mentalillness. The Executive's continued Employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure toact constituting Good Reason hereunder.
ForpurposesofanydeterminationregardingtheexistenceofGoodReason,anyclaim bytheExecutivethatGoodReasonexists shallbe presumed correct unless the Company established to the Boardby clear and convincing evidence that Good Reason doesnot exist.
(o) "GroupCompany"shallmeantheCompany,PPLGlobal,LLCandany subsidiaryoftheCompanyorPPL Global, LLC.
(p) "NoticeofTermination"shallmeannoticetoterminatetheEmploymentgiven byWPDSouthWestorsuchotherGroupCompanyasshall employthe Executive at the relevant time.
(q) "Pension Compensation Adjustment" shall havethe meaningsetoutinthe WPDEmploymentContract.
(r) "PensionPlan"shallmeananytax-qualified,supplementalorexcessdefined benefitpensionplanmaintainedbyWPD South West (orany otherGroup Company) and anyother agreement entered intobetween the Executive and WPDSouth West (or any other GroupCompany)whichis designed to provide the Executive with supplementalretirement benefits.
(s) "Person"shallhavethemeaninggiveninSection3(a)(9)oftheExchangeAct, asmodifiedandusedinSections13(d) and14(d) thereof; provided, however, a Person shallnotinclude(i) the Companyor any ofitssubsidiaries, (ii) atrustee or otherfiduciary holdingsecurities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securitiespursuantto anofferingof suchsecurities, or(iv) a corporation owned,directly or indirectly,by theshareowners of the Company in substantially the sameproportions as theirownership of stock of theCompany.
(t) "PotentialChangeinControl"shallbedeemedtohaveoccurredifthe conditionssetforthinanyoneofthefollowingparagraphsshallhave been satisfied:
(i) theCompanyentersintoanagreement, theconsummationofwhich wouldresultintheoccurrenceofaChangeinControl;
(ii) anyPersonpubliclyannouncesanintentiontotakeorto considertaking actionswhichifconsummatedwouldconstituteaChange in Control;
(iii) anyPersonisorbecomestheBeneficialOwner,directlyorindirectly, ofsecuritiesoftheCompanyrepresenting5%ormoreof the combined voting power oftheCompany's thenoutstanding securitiesentitled to vote generally in the electionof directors; or
(iv) the Boardadoptsaresolutiontotheeffectthat,forpurposesofthis Agreement,aPotentialChangeinControlhas occurred.
(u) "Retirement" shallbedeemedthereasonfortheterminationbytheExecutive oftheExecutive'sEmploymentifsuchemploymentisterminated in accordance withthe applicableretirement policy, includingearlyretirement, generally applicable to its salaried employees.
(v) "SeverancePayments"shallhavethemeaningsetforthinSection6.1hereof.
(w) "Successor"shallmeananyperson(whetheracorporationorotherwise)who shallsucceedanyGroupCompanyastheemployer ofthe Executive in connectionwith any Change in Control.
(x) "Term"shallmeantheperiodoftimedescribedinSection3hereof(including anyextension,continuation or terminationdescribedtherein).
(y) "TotalPayments" shallmeanthosepaymentsdescribed inSection6.2hereof.
(z) "WPDEmploymentContract"shallmeanthearrangementsapplyingasatthe
dateoftherelevantChangeinControlinrespectoftheExecutive's employment byWPDSouthWest(andtotheextentapplicable atthat time, the
2002Letterandthe2006Letter)orsuchotherGroupCompanyasshallemploy theExecutiveatthattime.
(aa) "WPDSouth West" shallmeanWesternPowerDistribution (SouthWest)plc whoseregistered officeisatAvonbank,FeederRoad,BristolBS2OTB.
(bb) "2002 Letter"shallmeantheletterdated31January 2002fromWPDSouth
WesttotheExecutive(settingoutamendmentstohisservicecontractdated29
February2000).
(cc) "2006Letter"shallmeantheletterdated1March2006fromWPDSouthWest tothe Executive (setting out specialtermsin respect of his pension benefits).
PPLCORPORATION
By
WilliamF.Hecht Date
ChairmanandCEO
RobertA. Symons Date