Exhibit 99.02
LOUISVILLE GAS AND ELECTRIC COMPANY
AND
KENTUCKY UTILITIES COMPANY
DIRECTOR AND OFFICER INFORMATION
The outstanding stock of Louisville Gas and Electric Company ("LG&E")
is divided into three classes: Common Stock, Preferred Stock (without par
value), and Preferred Stock, par value $25 per share. At the close of business
on April 22, 2002, the following shares of each were outstanding:
Common Stock, without par value............................................... 21,294,223 shares
Preferred Stock, par value $25 per share, 5% Series........................... 860,287 shares
Preferred Stock, without par value, $5.875 Series............................. 250,000 shares
Auction Series A (stated value $100 per share)................................ 500,000 shares
The outstanding stock of Kentucky Utilities Company ("KU") is divided
into three classes: Common Stock, without par value, Preferred Stock, without
par value, and Preference Stock, without par value. As of the close of business
on April 20, 2000, the following shares of each were outstanding
Common Stock, without par value............................................... 37,817,878 shares
Preferred Stock, without par value (stated value $200 per share)
4.75% Series.................................................................. 200,000 shares
6.53% Series.................................................................. 200,000 shares
All of the outstanding LG&E Common Stock and KU Common Stock is owned
by LG&E Energy Corp. ("LG&E Energy"). Based on information contained in a
Schedule 13G originally filed with the Securities and Exchange Commission in
October 1998, AMVESCAP PLC, a parent holding company, reported certain holdings
in excess of five percent of LG&E's Preferred Stock. AMVESCAP PLC, with offices
at 1315 Peachtree Street, N.W., Atlanta, Georgia 30309, and certain of its
subsidiaries reported sole voting and dispositive power as to no shares and
shared voting and dispositive power as to 43,000 shares of LG&E Preferred Stock,
without par value, $5.875 Series, representing 17.2% of that class of Preferred
Stock. The reporting companies indicated that they hold the shares on behalf of
other persons who have the right to receive or the power to direct the receipt
of dividends or the proceeds of sales of the shares. No other persons or groups
are known by management to be beneficial owners of more than five percent of
LG&E's Preferred Stock.
As of April 22, 2002, all directors, nominees for director and executive
officers of LG&E and KU as a group beneficially owned no shares of LG&E
Preferred Stock or KU Preferred Stock.
On December 11, 2000, Powergen plc, a public limited company with registered
offices in England and Wales ("Powergen") completed its acquisition of LG&E
Energy, the parent corporation of LG&E and KU. In connection with such
transaction, certain officers and directors of Powergen were appointed to fill
vacancies in the Board of Directors of LG&E and KU occurring by resignation of
prior directors
On April 9, 2001, E.ON AG ("E.ON") announced a conditional offer to purchase all
the common shares of Powergen plc, the indirect corporate parent of LG&E and KU.
The transaction is subject to a number of conditions precedent, including the
receipt of regulatory approvals from European and United States governmental
bodies, in form satisfactory to the parties. The parties anticipate that the
remaining approvals may be received by early 2002 to permit completion of the
transaction in during the first half of 2002. However, there can be no assurance
that such approvals will be obtained in form or timing sufficient for such
dates.
INFORMATION ABOUT DIRECTORS
On December 11, 2000, upon the closing of the merger transaction
involving Powergen and LG&E Energy, all members of the LG&E Board of Directors,
with the exception of Roger W. Hale, resigned, and the size of the Board of
Directors was fixed at nine. Six Powergen directors, Paul Myners, Sir Frederick
Crawford, Sydney Gillibrand, Edmund Wallis, Dr. David K-P Li, and Roberto
Quarta, and one Powergen officer, David Jackson, were appointed to fill all but
one of the vacancies created by the above resignations.
In January 2001, Roger W. Hale announced his resignation as director of
Powergen and an officer and director of LG&E Energy, LG&E and KU, effective
April 30, 2001. Victor A. Staffieri and Peter Hickson were appointed to fill the
LG&E and KU vacancies created by the resignation of Mr. Hale and the
previously-existing vacancy. In August 2001, Paul Myners and Roberto Quarta
announced their resignations from the Boards of Directors of Powergen, LG&E and
KU and Peter Hickson resigned from the Boards of Directors of LG&E and KU.
Nicholas Baldwin, Chief Executive Officer of Powergen was then appointed to fill
the vacancy of Mr. Hickson.
Messrs. Baldwin, Staffieri, Crawford, Gillibrand, Wallis and Dr. Li are
presently directors of Powergen. Messrs. Baldwin, Staffieri and Jackson are
presently directors of LG&E Energy.
The composition of the Boards of Directors of LG&E and KU following the
completion of E.ON's acquisition of Powergen is not known, but such Boards are
likely to contain at least one current officer or director of LG&E Energy.
Accordingly, certain of the directors of LG&E Energy, LG&E or Ku may cease to
serve as directors of LG&E and KU in the event the E.ON-Powergen transaction is
completed.
The following contains certain information as of April 22, 2002
concerning the directors of LG&E and KU:
DIRECTORS WITH TERMS EXPIRING AT THE 2002 ANNUAL MEETING OF SHAREHOLDERS
SYDNEY GILLIBRAND CBE (Age 67). Mr. Gillibrand was appointed a director of
Powergen plc on May 31, 1999. He is chairman of AMEC plc and TAG Aviation (UK)
and a non-executive director of ICL, and Messier-Dowty. He was previously
vice-chairman of British Aerospace plc. Mr. Gillibrand has been a director of
LG&E and KU since December 2000.
NICHOLAS P. BALDWIN (Age 49). Chief Executive of Powergen since February 21,
2001. Mr. Baldwin was appointed a director of Powergen plc on October 22, 1998,
having been a director of Powergen UK plc since February 1998. Until his
appointment as Chief Executive in February 2001, he was previously Executive
Director, UK Operations of Powergen. He joined the CEGB, the predecessor of
Powergen in 1980. In the United Kingdom, he is also a director of the
Electricity Association and a Director and Trustee of Midlands Excellence and is
a representative on the IEA's Coal Industry Advisory Board. Mr. Baldwin has been
a director of LG&E Energy, LG&E and KU since August 2001.
VICTOR A. STAFFIERI (Age 47). Chairman, President and Chief Executive Officer of
LG&E Energy, LG&E and KU, April 2001 to present. He served as President and
Chief Operating Officer of LG&E Energy, LG&E and KU from February 1999 to April
2001; Chief Financial Officer of Energy and LG&E, May 1997 to February 2000;
Chief Financial Officer of Kentucky Utilities May 1998 to February 2000.
President, Distribution Services Division of Energy December 1995 to May 1997;
Senior Vice President, General Counsel and Public Policy of Energy and LG&E From
November 1992 to December 1993. Mr. Staffieri has been a director of Powergen,
LG&E Energy, LG&E and KU since April 2001.
DIRECTORS WITH TERMS EXPIRING AT THE 2003 ANNUAL MEETING OF SHAREHOLDERS
EDMUND A. WALLIS (Age 62). Mr. Wallis is Chairman of Powergen plc. He was
appointed to the Powergen Board on October 22, 1998, serving as Chairman of such
Board since that date. He was also Chief Executive of Powergen until February
21, 2001. He had been Chief Executive of Powergen UK plc since March 1990 and
Chairman since July 1996. He is a non-executive director of Mercury European
Privatisation Trust plc and a non-executive director of London Transport. He was
also formerly non-executive chairman of LucasVarsity plc. Mr. Wallis has been on
the Board of Directors of LG&E and KU since December 2000.
DR. DAVID K-P LI (Age 63). Dr. Li was appointed a director of Powergen plc on
October 22, 1998, having been a non-executive director of Powergen UK plc since
January 1998. He is chairman and chief executive of The Bank of East Asia
Limited, having been a director since 1977, and holds directorships of numerous
companies in the Far East and elsewhere, including The Hong Kong and China Gas
Company Limited. Dr. Li has been a director of LG&E and KU since December 2000.
DIRECTORS WITH TERMS EXPIRING AT THE 2004 ANNUAL MEETING OF SHAREHOLDERS
SIR FREDERICK CRAWFORD (Age 70). Sir Frederick was appointed to the Powergen plc
Board on October 22, 1998, having been a non-executive director of Powergen UK
plc since June 1990. He is chairman of the Criminal Cases Review Commission and
a Fellow of the Royal Academy of Engineering. He has held appointments as
Professor of Electrical Engineering at Stanford University, and as
Vice-Chancellor of Aston University for 16 years. He was formerly a
non-executive director of Legal and General Group plc and Rexam plc. Mr.
Crawford has been a director of LG&E and of KU since December 2000.
DAVID J. JACKSON (Age 49). Mr. Jackson is General Counsel and Company Secretary
of Powergen plc. He has served on the Board of Directors of LG&E Energy, LG&E
and KU since December 2000.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Boards of Directors of LG&E and KU contain the same members.
Certain members are also directors of Powergen or LG&E Energy, as described
above. The committees of the Board of Directors of LG&E and KU include an Audit
Committee and a Compensation Committee. During 2001, the directors who are
members of these committees served in the same capacity for purposes of the LG&E
and KU Boards of Directors.
During 2001, there were a total of twelve meetings of the LG&E and KU
Boards. All directors attended 75% or more of the total number of meetings of
the Board of Directors and committees of the Board on which they served.
COMPENSATION OF DIRECTORS
Directors who are also officers of Powergen, LG&E Energy or its
subsidiaries receive no compensation in their capacities as directors of LG&E
and KU.
As noted earlier, since the completion of the Powergen-LG&E Energy
merger, certain members of the LG&E and KU boards serve on the Board of
Directors of Powergen plc. In that capacity, these members received or will
receive certain compensation. Information regarding such compensation is
incorporated by reference from
Powergen's Annual Report on Form 20-F for the year ended December 31, 2001 to be
filed with the Securities and Exchange Commission.
AUDIT COMMITTEE
The Audit Committee of the Board is composed of Mr. Sydney Gillibrand
and Sir Frederick Crawford, with one vacancy. During 2001, the Audit Committee
maintained direct contact with the independent auditors and LG&E's and KU's
Internal Auditor to review the following matters pertaining to LG&E and KU: the
adequacy of accounting and financial reporting procedures; the adequacy and
effectiveness of internal accounting controls; the scope and results of the
annual audit and any other matters relative to the audit of these companies'
accounts and financial affairs that the Committee, the Internal Auditor, or the
independent auditors deemed necessary. The Audit Committee met two times during
2001.
REMUNERATION COMMITTEE
The Remuneration Committee, composed of non-employee directors,
performs certain in connection with the compensation of the executive officers
of LG&E and KU. The Committee also makes recommendations regarding benefits
provided to executive officers and the establishment of various employee benefit
plans. Dr. David K-P Li is the current member of the Remuneration Committee. The
Remuneration Committee met two times during 2001.
REPORT OF THE REMUNERATION COMMITTEE
The Remuneration Committee was comprised wholly of non-employee
directors of LG&E and KU and made all decisions regarding the compensation of
LG&E's and KU's executive officers, including the setting of base pay and the
administration of the Powergen Long-Term Incentive Plan (the "Long-Term Plan")
and Short-Term Incentive Plan (the "Short-Term Plan") as applicable to LG&E and
KU. The LG&E and KU Remuneration Committee generally conducted its deliberations
in parallel with the Remuneration Committee of Powergen.
The Companies' executive compensation program and the target awards and
opportunities for executives are designed to be competitive with the
compensation and pay programs of comparable companies, including utilities,
utility holding companies and companies in general industry nationwide. The
executive compensation program has been developed and implemented over time
through consultation with, and upon the recommendations of, recognized executive
compensation consultants. The Remuneration Committee and the Board of Directors
have continued access to such consultants as desired, and are provided with
independent compensation data for their review.
Set forth below is a report addressing LG&E's and KU's compensation
policies during 2001 for their officers, including the executive officers named
in the following tables. In many cases, the executive officers also serve in
similar capacities for affiliates of LG&E and KU, including LG&E Energy. For
each of the executive officers of LG&E and KU, the policies and amounts
discussed below are for all services to LG&E, KU and their affiliates, during
the relevant period.
COMPENSATION PHILOSOPHY
During 2001, LG&E's and KU's executive compensation program had three
major components: (1) base salary; (2) short-term or annual incentives; and (3)
long-term incentives. The Companies developed their executive compensation
program to focus on both short-term and long-term business objectives that are
designed to enhance overall shareholder value. The short-term and long-term
incentives were premised on the belief that the interests of executives should
be closely aligned with those of the Companies' SHAREHOLDERS. Based on this
philosophy, these two portions of each executive's total compensation package
were linked to the accomplishment of specific results that were designed to
benefit the Companies' shareholders in both the short-term and long-term.
The executive compensation program also recognized that the Companies'
compensation practices must be competitive not only with utilities and utility
holding companies, but also with companies in general industry to ensure that a
stable and successful management team can be recruited and retained. As the
Companies' most direct competitors for executive talent are not limited to the
utilities, the various compensation peer groups as discussed below, are not the
same as the utility industry index in the Comparison of Five-Year Total Return
graph included in any applicable proxy statement.
Pursuant to this competitive market positioning philosophy, in
establishing compensation levels for all executive positions for 2001, the
Remuneration Committee reviewed competitive compensation information for United
States general industry companies with revenue between $2 - $3 billion (the
"Survey Group") and established targeted total direct compensation (base salary
plus short-term incentives and long-term incentives) for each executive for 2001
to approach the 50th percentile of the competitive range from the Survey Group.
Salaries, short-term incentives and long-term incentives for 2001 are described
below.
The 2001 compensation information set forth in other sections of this
document, particularly with respect to the tabular information presented,
reflects the considerations set forth in this report. The Base Salary,
Short-Term
Incentives, and Long-Term Incentives sections that follow address the
compensation philosophy for 2001 for all executive officers except those serving
as Chief Executive Officer. (See "Chief Executive Officer Compensation").
BASE SALARY
The base salaries for LG&E and KU executive officers for 2000 were
designed to be competitive with the Survey Group at approximately the 50th
percentile of the base salary range for executives in similar positions with
companies in the Survey Group. Actual base salaries were determined based on
individual performance and experience.
SHORT-TERM INCENTIVES
The Short-Term Plan provided for Company Performance Awards and
Individual Performance Awards, each of which is expressed as a percentage of
base salary and each of which is determined independent of the other. The
Remuneration Committee established the performance goals for the Company
Performance Awards and Individual Performance Awards at the beginning of the
2001 performance year. Payment of Company Performance Awards for executive
officers was based on varying performance measures tied to each officer's
responsible areas. These measures and goals included, among others, Powergen
earnings per share targets, LG&E Energy operating profit targets and LG&E/KU
operating profits targets, with any adjustments deemed appropriate by the
Committee. Payment of Individual Performance Awards was based 100% on Management
Effectiveness, which includes a customer satisfaction element for certain
participants. As stated, the awards varied within the executive officer group
based upon the nature of each individual's functional responsibilities.
For 2001 the Company Performance Award targets for named executive
officers ranged from 29% to 31% of base salary, and the Individual Performance
Award targets ranged from 19% to 20% of base salary. Both awards were
established to be competitive with the 50th percentile of such awards granted to
comparable executives employed by companies in the Survey Group. The individual
officers were eligible to receive from 0% to 150% of their targeted amounts,
dependent upon Company performance as measured by the relevant performance
goals, with regard to Company Performance Awards, and were eligible to receive
from 0% to 175% of their targeted amounts dependent upon individual performance
as measured by management effectiveness ,with regard to Individual Performance
Awards.
Using the relevant Powergen, LG&E Energy, LG&E/KU and other
subsidiaries' performance against goals in 2001, the Remuneration Committee
determined relative annual performance against targets for Company Performance
Awards. Based upon this determination, Company Performance Awards for 2001 to
the named executive officers were paid ranging from 34% to 43%, of base salary.
Payouts for Individual Performance Awards to the named executive officers ranged
from 22% to 29%, of base salary.
LONG-TERM INCENTIVES
During 2001, the Long-Term Plan was administered by the Remuneration
Committee. The Long-Term Plan provides for the grant of any or all of the
following types of awards: stock options, stock appreciation rights, restricted
stock, performance units and performance shares. In 2001, the Remuneration
Committee chose to award stock options and performance units to executive
officers.
The Remuneration Committee determined the competitive long-term grants
to be awarded for each executive based on the long-term awards for the 50th
percentile of the Survey Group. The aggregate expected value of the stock
options and performance units (delivered approximately 40% in the form of
performance units and 60% in the form of nonqualified stock options in 2001) was
intended to approach the expected value of long-term incentives payable to
executives in similar positions with companies in the 50th percentile of the
Survey Group, depending upon
achievement of targeted Company performance.
Stock options were granted to executive officers and senior management
during the first quarter of 2001 at an exercise price equal to the fair market
value at the time of grant and were subject to a one-year vesting requirement.
During the year, newly hired or promoted officers were also eligible to receive
pro-rated stock option grants under the Long-Term Plan. Since options were
granted with an exercise price equal to the market value of Powergen's American
Depositary Shares ("ADS's") at the time of grant, they provide no value unless
Powergen's ADS price increases after the grants are awarded. Once the options
vest, they are exercisable over a nine-year term. These awards are thus tied to
ADS price appreciation in excess of the ADS's value at time of grant, rewarding
executives as if they shared in the ownership of Powergen. The estimated number
of ADS subject to options was determined by taking the expected value to be
provided in options, as determined above, and dividing that amount by the
estimated current value of an option using a variation of the Black-Scholes
option pricing methodology provided by the outside compensation consultant.
Prior awards were not considered when making new grants. The actual number of
options granted were then determined by approximating the average by officer
level within LG&E Energy.
The number of performance units granted was determined by taking the
amount of the executive's long-term award to be delivered in performance units
(adjusted on a present value basis), as determined above, and dividing that
amount by the fair market value of Powergen ADS's on the date of the grant. The
future value of the performance units was substantially dependent upon the
changing value of Powergen ADS's in the marketplace. Each executive officer was
entitled to receive from 0% to 150% of the performance units contingently
awarded to the executive based on corporate performance measured in terms of the
achievement of certain cash flow targets by LG&E Energy during a three-year
performance period.
No payouts of awards under the Long-Term Plan occurred during 2001 as
no three-year performance periods had been completed since the establishment of
the plan in December 2000 following Powergen's acquisition of LG&E Energy.
However, pursuant to the change in control provisions of the Long-Term Plan,
payouts of the two open performance period awards under the Long-Term Plan
occurred in April 2002 upon Powergen shareholder approval of the prospective
E.ON transaction. These payouts were based on LG&E Energy's performance through
that time for each of the partially completed 2001-2003 and 2002-2004
performance periods, respectively. For such periods, pursuant to the plan and
based upon LG&E Energy's performance through the change in control date, payouts
of performance units were made based upon their value as of grant date.
OTHER
In connection with the LG&E Energy-Powergen merger, Messrs. Staffieri,
McCall and Newton entered into revised employment and severance agreements.
These agreements are discussed under "Employment Contracts and Termination of
Employment Arrangements and Change in Control Provisions". Pursuant to these
agreements and the relevant plans and following the change in control event
relating to the Powergen shareholder approval of the E.ON transaction, the
officers received payments described in that section. Certain of these payments
occurring in 2001 are included in the "All Other Compensation" column in the
Summary Compensation Table.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Roger W. Hale served as Chief Executive Officer of LG&E and KU
during January-April 2001. The 2001 compensation of Mr. Hale is set forth in the
Summary Compensation Table, in the "Termination of Employment Agreements and
Change in Control Provisions" and in other sections of this document. Upon Mr.
Hale's retirement effective April 30, 2001, Mr. Victor A. Staffieri was
appointed Chief Executive Officer of LG&E and KU. Mr. Staffieri's compensation
was governed by the terms of an Employment and Severance Agreement entered into
on February 25, 2000 as amended (including upon his appointment as Chief
Executive Officer on April 30, 2001) (the
2000 Agreement. The 2000 Agreement is for an initial term of two years, with
automatic annual extensions thereafter unless the Companies or Mr. Staffieri
give notice of non-renewal.
The 2000 Agreement established the minimum levels of Mr. Staffieri's
2001 compensation, although the Remuneration Committee retains discretion to
increase such compensation. Upon his appointment as Chief Executive Officer in
April 2001, the Remuneration Committee established Mr. Staffieri's compensation
and long-term awards using comparisons to relevant officer of companies in the
Survey Group, including utilities, and survey data from various compensation
consulting firms. Mr. Staffieri also received Companies' contributions to the
savings plan, similar to those of other officers and employees. Details of Mr.
Staffieri's 2001 compensation are set forth below.
BASE SALARY. Mr. Staffieri was paid a total base salary of $555,769 during
2001. This amount was based upon the $600,000 minimum salary amount provided in
the 2000 Agreement during his service as Chief Executive Officer commencing in
April 2001. The Remuneration Committee, in determining Mr. Staffieri's annual
salary, including the minimum, considered his individual performance in the
prior growth of LG&E Energy, the comparative compensation data described above
and the compensation provided to other Powergen, LG&E Energy, LG&E and KU
officers
SHORT-TERM INCENTIVES. Mr. Staffieri's target short-term incentive award was
70% of his 2001 base salary. As with other executive officers receiving
short-term incentive awards, Mr. Hale was eligible to receive more or less than
the targeted amount, based on Company performance and individual performance.
His 2001 short-term incentive payouts were based 60% on achievement of Company
Performance Award targets and 40% on achievement of Individual Performance Award
targets.
For 2001, the Company Performance Award payout for Mr. Staffieri was
42% of his 2001 base salary and the Individual Performance Award payout was 45%
of his 2000 base salary. As with the other executive officers, Mr. Staffieri's
Company Performance targets were based on measures including Powergen earnings
per share goals and LG&E Energy operating profit goals and his Company
Performance Award was calculated based upon annual Company performance all as
described under the heading "Short-Term Incentives." In determining the
Individual Performance Award, the Remuneration Committee considered Mr.
Staffieri's effectiveness in several areas including the financial and
operational performance of LG&E Energy, LG&E, KU and other subsidiaries,
customer satisfaction ratings, Company growth and other measures.
LONG-TERM INCENTIVE GRANT. In 2001, Mr. Staffieri received 51,011 options and
9,710 performance units for the 2001-2003 performance period. These amounts were
determined in accordance with the terms of his 2000 Agreement, as amended, with
expected value representing approximately 175% of his base salary. The terms of
the options and performance units (including the manner in which performance
units are earned) for Mr. Staffieri are the same as for other executive
officers, as described under the heading "Long-Term Incentives."
LONG-TERM INCENTIVE PAYOUT. As with other executive officers, no payouts of
awards under the Long-Term Plan occurred in 2001 as no three-year performance
periods had yet been completed. As with other executive officers, pursuant to
the change in control provisions of the Long-Term Plan, payouts of the two open
performance period awards occurred in April 2002 upon Powergen shareholder
approval of the prospective E.ON transaction. Mr. Staffieri's Company
Performance Awards were paid out at value at grant date for the partially
completed 2001-2003 and 2002-2004 periods, respectively, as described under the
heading "Long-Term Incentives."
OTHER. During 2001, under the terms of the 2000 Agreement, Mr. Staffieri became
entitled to retention payments at six month intervals of $833,111 and $886,772,
which amounts were credited to his deferred compensation plan.
MEMBER OF THE REMUNERATION COMMITTEE
Dr. David K-P Li
<Page>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows the cash compensation paid or to be paid by
LG&E, KU or LG&E Energy, as well as certain other compensation paid or accrued
for those years, to the Chief Executive Officer and the next four highest
compensated executive officers of LG&E and KU who were serving as such at
December 31, 2001, as required, in all capacities in which they served LG&E
Energy or its subsidiaries during 1999, 2000 and 2001:
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
AWARDS PAYOUTS
------ ---------------------
ANNUAL COMPENSATION OTHER RESTRICTED SECURITIES ALL OTHER
------------------- ANNUAL STOCK UNDERLYING LTIP COMPEN-
NAME AND SALARY BONUS COMP. AWARDS OPTIONS/SARS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (1) (#) (2) ($) (3) ($)
------------------ ---- ------ ----- --- ------- ------- ------- ------------
Victor A. Staffieri 2001 555,769 529,330 45,704 -- 51,011 0 1,811,703(4)
Chairman of the Board, 2000 460,000 388,277 24,247 262,880(1) 90,000 1,051,694 640,160
President and Chief 1999 400,000 324,600 22,730 -- 53,050 0 20,604
Executive Officer
John R. McCall 2001 338,365 242,104 8,732 -- 14,786 0 463,793(4)
Executive Vice President, 2000 325,000 228,605 18,177 172,028(1) 40,000 570,565 677,097
General Counsel and 1999 300,000 204,930 7,171 -- 31,830 0 17,252
Corporate Secretary
Frederick J. Newton III 2001 285,342 185,749 4,485 -- 12,214 0 238,927(4)
Senior Vice President 2000 272,000 191,325 14,970 143,974(1) 30,000 356,334 814,961
and Chief Administrative 1999 255,000 171,641 6,731 -- 12,219 0 8,712
Officer
Paul W. Thompson 2001 245,193 142,650 9,970 -- 10,714 0 30,292(4)
Senior Vice President -
Energy Services
S. Bradford Rives 2001 235,000 131,342 6,595 -- 7,554 0 390,335(4)
Senior Vice President -
Finance and Controller
Roger W. Hale 2001 301,523 255,582 109,142 -- 76,519 0 565,524(4)
Former Chairman of the 2000 816,200 803,761 3,546,581(6) -- 190,000 3,870,758 5,085,473
Board and Chief Executive 1999 770,000 703,800 47,599 2,919,489(7) 102,122 0 55,596
Officer (5)
</Table>
<Page>
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(1) Amounts for year 2000 represents the dollar value of restricted
Powergen ADS awards, determined by multiplying the number of ADSs in
each award by the closing market price as of the effective date of
the LG&E Energy-Powergen merger.. Pursuant to the terms of the named
executives' employment agreements, the restricted Powergen ADS's
vested upon occurrence of the change in control event associated
with the Powergen shareholders' approval of the E.ON transaction in
April 2002. Dividends on the restricted ADS's were payable upon
vesting, without interest. Income tax was payable upon the awards at
the time of vesting. At December 31, 2001, the restricted ADS
holdings were Mr. Staffieri 7,688 ADS's ($335,581), Mr. McCall
5,031ADS's ($219,603) and Mr. Newton 4,211 ADS's ($183,810),
respectively.
(2) Amounts for year 2001 reflect options for Powergen ADS's. Amounts for
years 2000 and 1999 represent options for former LG&E Energy common
stock.
(3) No payouts under the Long-Term Plan were made during year 2001 as no
three-year performance periods had yet been completed. As described
in "Termination of Employment Arrangements and Change in Control
Provisions" certain amounts have been accelerated during 2002 upon
the change in control event resulting from the Powergen
shareholders' approval of the E.ON transaction. Amounts for year 2000
reflect acceleration of the 1998-2000, 1999-2001 and the 2000-2002
open cycles upon a change in control event as a result of the LG&E
Energy-Powergen merger.
(4) Includes employer contributions to 401(k) plan, nonqualified thrift
plan, employer paid life insurance premiums, and retention/termination
payments in 2001 as follows: Mr. Staffieri $5,106, $23,135, $63,579 and
$1,719,884, respectively; Mr. McCall $4,553, $29,905, $5,811 and
$423,524 respectively; Mr. Newton $3,946, $12,327, $1,556 and $221,098,
respectively; Mr. Thompson $2,365, $27,096, $830 and $0, respectively;
Mr. Rives, $2,169, $4,881, $892 and $382,393, respectively; and Mr.
Hale $4,544, $4,502, $0 and $556,478, respectively. The
retention/termination payments are discussed in "Termination of
Employment Arrangements and Change in Control Provisions".
(5) Mr. Hale retired from service effective April 30, 2001.
(6) Other Annual Compensation includes $63,693 for business spousal travel
and personal use of corporate aircraft, and $3,470,524 in tax gross-up.
(7) Amount for year 1999 represents dollar value of restricted stock
awards, determined by multiplying the number of shares by the closing
market price as of the receipt date of grant. After the effective date
of the LG&E Energy-Powergen merger, pursuant to his 2000 Agreement, Mr.
Hale's 147,382 restricted shares were converted to receive the merger
consideration of $24.85 per share payable in respect of all outstanding
shares of former LG&E Energy Common Stock. Income tax was payable upon
the awards at the time of the satisfaction of this right.
<Page>
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN 2001 FISCAL YEAR
The following table contains information at December 31, 2001, with
respect to grants of Powergen ADS options and stock appreciation rights (SARs)
to the named executive officers:
<Table>
<Caption>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
----------------- RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM
NUMBER OF PERCENT OF ---------------
SECURITIES TOTAL EXERCISE
UNDERLYING OPTIONS/SARS OR BASE
OPTIONS/SARS GRANTED TO PRICE
GRANTED EMPLOYEES IN ($/ EXPIRATION
NAME (#) (1) FISCAL YEAR SHARE) DATE 0%($) 5% ($) 10%($)
---- ------- ----------- ------ ---- ----- ------ ------
Victor A. Staffieri 40,179 15.1% 39.225 03/02/2011 0 991,151 2,511,772
Victor A. Staffieri 10,832 4.1% 41.150 04/30/2011 0 246,356 656,306
John R. McCall 14,786 5.6% 39.225 03/02/2011 0 364,747 924,340
Frederick J. Newton 12,214 4.6% 39.225 03/02/2011 0 301,300 763,553
Paul W. Thompson 10,714 4.0% 39.225 03/02/2011 0 264,297 669,781
S. Bradford Rives 7,554 2.8% 39.225 03/02/2011 0 186,345 472,235
Roger W. Hale 76,519 28.8% 39.225 03/02/2011 0 1,887,601 4,783,551
</Table>
- ---------------
(1) Powergen ADS options were awarded at fair market value at time of
grant.. The options are exercisable over a ten-year term from their
original grant date.
<Page>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN 2001 FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth information with respect to the named
executive officers concerning the exercise Powergen ADS options during 2001 and
the value of unexercised Powergen ADS options and SARs held by them as of
December 31, 2001:
<Table>
<Caption>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS/SARS AT
ACQUIRED OPTIONS/SARS FY-END
ON VALUE AT FY-END (#) ($)(1)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- --- --- ------------- -------------
Victor A. Staffieri -- -- 38,890 / 51,011 331,343 / 204,872
John R. McCall -- -- 60,235 / 14,786 616,869 / 65,428
Frederick J. Newton -- -- 27,094 / 12,214 225,220 / 54,047
Paul W. Thompson -- -- 13,244 / 10,714 106,839 / 47,409
S. Bradford Rives -- -- 26,246 / 7,554 261,879 / 33,426
Roger W. Hale -- -- 74,864 / 76,519 637,841 / 338,597
</Table>
- ---------------
(1) Dollar amounts reflect market value of Powergen ADS's at year-end,
minus the exercise price.
<Page>
LONG-TERM INCENTIVE PLAN AWARDS TABLE
LONG-TERM INCENTIVE PLAN AWARDS IN 2001 FISCAL YEAR
The following table provides information concerning awards of
performance shares made in 2001to the named executive officers under the
Long-Term Plan.
<Table>
<Caption>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE BASED PLANS
(NUMBER OF SHARES) (1)
----------------------
NUMBER PERFORMANCE OR
OF SHARES, OTHER PERIOD
UNITS OR UNTIL
OTHER MATURATION
NAME RIGHTS OR PAYOUT(1) THRESHOLD(#) TARGET(#) MAXIMUM(#)
---- ------ ------------ ------------ --------- ----------
Victor A. Staffieri 9,710 12/31/2003 4,855 9,710 14,565
John R. McCall 2,815 12/31/2003 1,408 2,815 4,223
Frederick J. Newton 2,325 12/31/2003 1,163 2,325 3,488
Paul W. Thompson 2,040 12/31/2003 1,020 2,040 3,060
S. Bradford Rives 1,438 12/31/2003 719 1,438 2,157
Roger W. Hale 14,566 12/31/2003 7,283 14,566 21,849
</Table>
- ----------------
(1) Pursuant to the terms of the plan, the performance periods shown and
subsequent grants were accelerated upon the change in control resulting
from the Powergen shareholder approval of the E.ON transaction and were
paid in cash after April 19, 2002.
Each performance unit awarded represented the right to receive an
amount payable 50% in Powergen ADS's and 50% in cash on the date of payout, the
latter portion being payable in cash in order to facilitate the payment of taxes
by the recipient. The amount of the payout was to be determined by the then-fair
market value of Powergen ADS's. For awards made in 2001, the Long- Term Plan
awards were intended to reward executives on a three-year rolling basis
dependent upon the achievement of certain cash flow targets by LG&E Energy. The
Committee set a contingent award for each management level selected to
participate in the plan and such amount was the basis upon which incentive
compensation was to be determined. Depending on the level of achievement, the
participant would receive from zero to 150% of the contingent award amount. As a
result of the change in control event resulting from Powergen shareholder
approval of the E.ON transaction, awards were accelerated and paid out based
upon value on grant date. Payments made under the Long-Term Plan in 2001 are
reported in the summary compensation table for the year of payout.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
ARRANGEMENTS AND CHANGE IN CONTROL PROVISIONS
In connection with the LG&E Energy-Powergen merger, Messrs. Staffieri,
McCall and Newton entered into revised employment and severance agreements,
which were subsequently amended prior to the effectiveness of the merger, with
two year terms, each containing change in control provisions, which agreements
generally provide for the benefits described below. These officers of the
Companies shall be entitled to the following payments if they are terminated for
reasons other than cause or disability or death, or their employment
responsibilities are altered: (A) acceleration of any unpaid scheduled retention
payments in certain amounts, (B) a cash payment of $262,835,
<Page>
$172,028 and $143,974, respectively, and the vesting of the restricted
Powergen ADS's and dividends described in the Summary Compensation Table
contained in this document; and (C) an amount not less than the sum of (1)
his annual base salary and (2) his bonus or "target" award paid or payable,
prorated for the number of months remaining in the term of the employment
period (which payment shall be increased to 2.99 times the sum of (1) and (2)
in the event of a termination following a change in control of Powergen). In
addition, such officers would receive, upon the earlier to occur of (a) a
change in control of Powergen or (b) the 18 month anniversary of their
employment agreement, the amounts described in clauses (A) and (B) above.
During 2001, in connection with these or related arrangements, Messrs.
Staffieri, McCall, Newton and Rives received or became entitled to scheduled
retention payments of $1,719,884, $423,524, $221,098 and $382,393,
respectively. In April 2002, in connection with the change in control event
occurring upon the Powergen shareholders' approval of the E.ON transaction
during that month, Messrs. Staffieri, McCall and Newton received or became
entitled to accelerated retention payments, including interest, of $851,094,
$501,145 and $507,858, respectively and the amounts described in clause (B)
above. Further, upon this change in control event, pursuant to the Long-Term
Plan, respectively, any unvested options vested and outstanding performance
units were paid out in cash.
Payments may be made to executives which would equal or exceed an
amount which would constitute a nondeductible payment pursuant to Section 280G
of the Code, if any. Additionally, executives shall receive continuation of
certain welfare benefits and payments in respect of accrued but unused vacation
days and for out-placement assistance. A change in control encompasses certain
merger and acquisition events, changes in board membership and acquisitions of
voting securities of Powergen.
During 2001, Mr. Hale served as Chief Executive Officer of LG&E and KU
until his retirement from service on April 30, 2001. In connection therewith,
Mr. Hale qualified for a new supplemental retirement benefit in an annual amount
equal to 50% of the sum of his base salary and annual target bonus as in effect
on the date of his retirement.