Exhibit
10.1.a
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is
entered into as of the ___ day of ____________, 2006, between Great
Plains Energy Incorporated, a Missouri corporation ("Great Plains
Energy"), and Michael J. Chesser ("Executive").
WHEREAS, Executive is the Chairman of the Board
and Chief Executive Officer of Great Plain Energy and a valued
employee of Great Plains Energy or a subsidiary thereof (the
"Company"); and
WHEREAS, the Board (as defined herein) believes
that it is in the best interests of the Company and its
shareholders (i) to provide assurance that the Company will have
the continued service of Executive notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined in Section
1), (ii) to diminish the distraction to Executive that may arise by
virtue of the personal uncertainties and risks created by such a
threatened or pending Change in Control, and (iii) to encourage
Executive's full attention and dedication to the Company currently
and in the event of a threatened or pending Change in Control;
and
WHEREAS, the Board and Executive previously
entered into a severance agreement dated October 1, 2003, the
"Prior Severance Agreement" whereby Great Plains Energy agreed to
provide Executive with certain compensation and perquisites
following Executive's termination or constructive termination of
employment with the Company in connection with a change in control
or potential change in control of Great Plains Energy;
and
WHEREAS, the Board and Executive agree that, in
connection with both parties entering into this Agreement, the
Prior Severance Agreement shall be terminated, rendered null and
void, and all duties and rights conferred upon the parties thereto
extinguished, and that such Prior Severance Agreement is replaced
in its entirety with the benefits, duties, terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises
and the mutual agreements contained herein, the parties hereto
agree as follows:
1. Certain Definitions . As used in this Agreement, unless otherwise
defined herein or unless the context otherwise requires, the
following terms shall have the following meanings:
(a) Agreement . "Agreement" means this Change in Control
Severance Agreement as amended from time to time.
(b) Beneficial Owner . "Beneficial Owner" shall have the same
meaning as set forth in Rule 13d-3 of the Exchange Act.
(c) Board . "Board" means the Board of Directors of Great
Plains Energy.
(d) Cause . "Cause" means (i) the material
misappropriation of any of the Company's funds, Confidential
Information or property; (ii) the conviction of, or the entering of
a guilty plea or plea of no contest with respect to, a felony, or
the equivalent thereof; (iii) commission of act of willful damage,
willful misrepresentation, willful dishonesty, or other willful
conduct that can reasonably be expected to have a material adverse
effect on the business, reputation, or financial situation of the
Company; or (iv) gross negligence or willful misconduct in
performance of Executive's duties; provided, however, "cause" shall
not exist under clause (iv), above, with respect to an act or
failure to act unless (A) Executive has been provided written
notice describing in sufficient detail the acts or failure to act
giving rise to the Company's assertion of such gross negligence or
misconduct, (B) been provided a reasonable period to remedy any
such occurrence and (C) failed to sufficiently remedy the
occurrence.
(e) Change in Control . "Change in Control" means the occurrence of
one of the following events, whether in a single transaction or a
series of related transactions:
(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Great Plains Energy (not
including in the securities beneficially owned by such Person any
securities acquired directly from Great Plains Energy or its
affiliates other than in connection with the acquisition by Great
Plains Energy or its affiliates of a business) representing 35% or
more of either the then outstanding shares of common stock of Great
Plains Energy or the combined voting power of Great Plains Energy's
then outstanding securities; or
(ii) the following individuals cease for any reason
to constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of Great Plains Energy, as
such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) whose appointment or election by the Board or
nomination for election by Great Plains Energy's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof
or whose appointment, election or nomination for election was
previously so approved; or
(iii) the consummation of a merger, consolidation,
reorganization or similar corporate transaction of Great Plains
Energy, whether or not Great Plains Energy is the surviving
corporation in such transaction, other than (A) a merger,
consolidation, or reorganization that would result in the voting
securities of Great Plains Energy outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity
or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, at least 60% of the combined voting
power of the voting securities of Great Plains Energy or such
surviving entity or any parent thereof outstanding immediately
after such merger, consolidation or reorganization, or (B) a
merger, consolidation or reorganization effected to implement a
recapitalization of Great Plains Energy (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of Great Plains Energy (not including in
the securities Beneficially Owned by such Person any securities
acquired directly from Great Plains Energy or its affiliates other
than in connection with the acquisition by Great Plains Energy or
its affiliates of a business) representing 20% or more of either
the then outstanding shares of common stock of Great Plains Energy
or the combined voting power of Great Plains Energy's then
outstanding securities; or
(iv) the occurrence of, or the stockholders of Great
Plains Energy approve a plan of, a complete liquidation or
dissolution of Great Plains Energy or an agreement for the sale or
disposition by Great Plains Energy of all or substantially all of
Great Plains Energy's assets, other than a sale or disposition of
all or substantially all of Great Plains Energy's assets to an
entity, at least 60% of the combined voting power of the voting
securities of which are owned by Persons in substantially the same
proportions as their ownership of Great Plains Energy immediately
prior to such sale.
Notwithstanding the foregoing, no "Change in
Control" shall be deemed to have occurred if there is consummated
any transaction or series of integrated transactions immediately
following which the record holders of the common stock of Great
Plains Energy immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the
assets of Great Plains Energy immediately following such
transaction or series of transactions.
(f) Change in Control Period . "Change in Control Period" means the period
commencing on the date hereof and ending on the second anniversary
of such date; provided, however, that commencing on a date one year
after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof being hereinafter
referred to as the "Renewal Date"), the Change in Control Period
shall be automatically extended so as to terminate two years from
such Renewal Date, unless at least 60 days prior to the Renewal
Date the Company shall give notice to Executive that the Change in
Control Period shall not be so extended; provided, further that
during any period of time when the Board or the governing body of
Great Plains Energy has knowledge that any person has taken steps
reasonably calculated to effect a Change in Control, the Change in
Control Period shall automatically be extended (and may not
terminate) until, in the opinion of the Board, such person has
abandoned or terminated its efforts to effect a Change in
Control.
(g) Company . "Company" means, except as the context
requires otherwise, references to Great Plains Energy Incorporated,
a Missouri corporation, its successors and assigns, and/or any
subsidiary thereof, as applicable.
(h) Confidential Information . "Confidential Information" means (1) any and
all trade secrets concerning the business and affairs of the
Company, product specifications, data, know-how, formulae,
algorithms, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned
manufacturing or distribution methods and processes, customer
lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and programs
(including object code and source code), computer software and
database technologies, systems, structures, and architectures; (2)
information concerning the business and affairs of the Company
(which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key
personnel, personnel training and techniques and materials); and
(3) notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Company containing or based, in
whole or in part, or any information included in the foregoing,
whether reduced to writing or not and which has not become publicly
known or made generally available through no wrongful act of
Executive or others who were under confidentiality obligations as
to the item or items involved.
(i) Date of Termination . "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Cause, or
by Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date permitted to be specified therein, as
the case may be, (ii) if Executive's employment is terminated by
the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies
Executive of such termination, (iii) if Executive's employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the
Disability Effective Date (as defined in Section 2(a)), as the case
may be and (iv) if Executive's employment is terminated by
Executive for other than Good Reason, the Date of Termination shall
be the date on which Executive notifies the Company in writing of
such termination or any later date permitted to be specified
therein, as the case may be.
(j) Disability or Disabled . The term "Disability" or "Disabled" shall mean
an individual (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits
for a period of not less than 3 months under a Company sponsored
accident or health plan.
(k) Effective Date . "Effective Date" means the first date on which
a Change in Control occurs during the Change in Control
Period.
(l) Exchange Act. "Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time.
(m) Good Reason . "Good Reason" means, without Executive's
written consent any of the following:
(i) Any material and adverse reduction or material
and adverse diminution in Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities held, exercised or assigned at any time during the
90-day period immediately preceding the commencement of the Pre-CIC
Protected Period;
(ii) Any reduction in Executive's annual base salary
as in effect immediately preceding the commencement of the Pre-CIC
Protected Period or as the same may be increased from time to
time;
(iii) Any reduction in benefits received by Executive
under Company Plans (as defined below) to less than the most
favorable benefits provided to Executive by the Company under
Company Plans at any time during the 90-day period immediately
preceding the commencement of the Pre-CIC Protected Period.
"Company Plans" means (1) all incentive, savings and retirement
plans, practices, policies and programs sponsored or maintained by
the Company, (2) all welfare benefit plans, practices, policies and
programs (including medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) sponsored or
maintained by the Company, (3) expense reimbursement by the
Company for all reasonable out-of-pocket employment expenses
incurred by Executive, (4) the provision of fringe benefits, and
(5) the provision of paid vacation time by the Company;
(iv) Executive being required by the Company to be
based at any office or location that is more than 70 miles from the
location where Executive was employed immediately preceding the
commencement of the Pre-CIC Protected Period; or
(v) Any failure by the Company to require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place, or any failure by any such successor
after ten (10) days notice from Executive to so perform under this
Agreement.
Provided,
however, notwithstanding the occurrence of any of the events set
forth above in this Section 1(m), Good Reason shall not include for
the purpose of this definition (1) an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by
Executive, or (2) if occurring within the Pre-CIC Protected Period,
any reduction in Executive's base annual salary or reduction in
benefits received by Executive where such reduction is in
connection with a company-wide reduction in salaries or
benefits.
(n) Notice of Termination . "Notice of Termination" means a written notice
of termination which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and (iii)
if the Date of Termination is other than the date of receipt of
such notice, specifies the termination date (which date shall be
not more than fifteen (15) days after the giving of such notice),
unless another date is mutually agreed upon between Executive and
the Company.
(o) Person . "Person" has the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include (1)
Great Plains Energy or any of its subsidiaries, (2) a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or any of its subsidiaries, (3) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (4) a corporation owned, directly, or indirectly, by
the stockholders of Great Plains Energy in substantially the same
proportions as their ownership of stock of Great Plains
Energy.
(p) Post-Effective Period . "Post-Effective Period" means the period
commencing on the Effective Date and ending on the earlier of (i)
the second anniversary of such date or (ii) Executive's 70
th birthday.
(q) Pre-CIC Protected Period . "Pre-CIC Protected Period" means the period
that is within the Change in Control Period and begins when (A)
Great Plains Energy enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control; (B)
Great Plains Energy or any Person publicly announces an intention
to take or to consider taking actions which, if consummated, would
constitute a Change in Control; (C) any Person becomes the
Beneficial Owner, directly or indirectly, of voting securities of
Great Plains Energy representing 10% or more of the combined voting
power of Great Plains Energy's then outstanding voting securities;
or (D) the Board, the members or the stockholders of Great Plains
Energy adopts a resolution approving any of the foregoing or
approving any Change in Control, and ends upon the date the Change
in Control transaction is either consummated, abandoned or
terminated (for this purpose, the Board shall have the sole and
absolute discretion to determine that a proposed transaction has
been abandoned).
2. Termination of Employment During the
Post-Effective Period .
(a) Death or Disability . Executive's employment shall terminate
automatically upon Executive's death or, with written notice by the
Company of its intention to terminate Executive's employment, upon
Executive's Disability. In such event, Executive's employment with
the Company shall terminate effective on the 90th day after receipt
of such notice by Executive (the "Disability Effective Date"),
provided that within the 90 days after such receipt Executive shall
not have returned to full-time performance of Executive's
duties.
(b) Cause . The Company may terminate Executive's
employment at any time for Cause or without Cause. Notwithstanding
the foregoing, Executive shall not be deemed to have been
terminated for Cause without (i) reasonable notice to Executive
setting forth the reasons for the Company's intention to terminate
for Cause, (ii) an opportunity for Executive, together with his
counsel, to be heard before the Board within fifteen (15) days of
such notice, and (iii) delivery to Executive of a Notice of
Termination from the Board finding that, in the good faith opinion
of the Board, that Executive was guilty of conduct set forth in
Section 1(d), and specifying the particulars thereof in reasonable
detail.
(c) Executive Resignation . Executive's employment may be terminated at
any time by Executive for Good Reason or without Good
Reason.
(d) Notice of Termination . Any termination by the Company for Cause, or
by Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto. The failure by Executive or
the Company to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
3. Obligations of the Company Upon Termination of
Employment .
(a) Post-Effective Period Terminations Other Than
for Cause, Death or Disability; Post-Effective Period Executive
Resignation . If, during
the Post-Effective Period, the Company shall terminate Executive's
employment other than (I) for Cause or (II) on account of
Executive's death or Disability, or Executive shall terminate
employment for Good Reason, the Company shall pay to Executive, in
a lump-sum cash payment made within 30 days following the Date of
Termination, as compensation for services rendered to the Company,
an amount equal to the aggregate of the following amounts set forth
below in Sections 3(a)(i), (ii), (iii), and (iv), and provide to
Executive the benefits provided in Section 3(a)(v).
(i) A cash amount equal to the sum of (A)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (B) a bonus in an amount at least equal to
the average annualized incentive awards paid or payable pursuant to
any Company-sponsored annual incentive compensation plan, including
by reason of any deferral under a Company-sponsored deferred
compensation program, to Executive by the Company and its
affiliated companies during the five fiscal years of the Company
(or if Executive shall have performed services for the Company and
its affiliated companies for four fiscal years or less, the years
during which Executive performed services) immediately preceding
the fiscal year in which the Change in Control (or if benefits are
payable pursuant to Section 3(c), the Date of Termination) occurs,
multiplied by a fraction, the numerator of which is the number of
days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is 365
or 366, as applicable, to the extent not theretofore paid, (C) any
amount credited to Executive's CAP Excess Benefits Account pursuant
to the Great Plains Energy Incorporated Nonqualified Deferred
Compensation Plan and any other compensation previously deferred by
Executive (together with any interest and earnings thereon), in
each case to the extent not theretofore paid, and (D) any accrued
unpaid vacation pay;
(ii) a cash amount equal to (A) three (3) times
Executive's highest annual base salary from the Company and its
affiliated companies in effect during the twelve (12)-month period
prior to the Date of Termination, plus (B) three (3) times
Executive's average annualized annual incentive compensation
awards, paid, or, but for a deferral under a Company-sponsored
deferred compensation program, would have been paid, to Executive
by the Company and its affiliated companies during the five fiscal
years of the Company (or if Executive shall have performed services
for the Company and its affiliated companies for four fiscal years
or less, the years during which Executive performed services)
immediately preceding the fiscal year in which the Change in
Control (or if benefits are payable pursuant to Section 3(c), the
Date of Termination) occurs; provided, however, that in the event
there are fewer than thirty-six (36) whole months remaining from
the Date of Termination to the date of Executive's 70th birthday,
the amount calculated in accordance with this Section 3(a)(ii)
shall be reduced by multiplying such amount by a fraction the
numerator of which is the number of months, including a partial
month (with a partial month being expressed as a fraction the
numerator of which is the number of days remaining in such month
and the denominator of which is the number of days in such month),
so remaining and the denominator of which is thirty-six (36)
months; provided further that any amount paid pursuant to this
Section 3(a)(ii) shall be paid in lieu of any other amount of
severance pay to be received by Executive upon termination of
employment of Executive under any severance plan, policy or
arrangement of the Company;
(iii) a cash amount equal to the excess of (A) the
actuarial equivalent value of the monthly accrued benefits payable
to Executive at age 65 under the Great Plains Energy Incorporated
Management Pension Plan (the "Pension Plan") as in effect on the
date of this Agreement and the benefits provided under the
Supplemental Executive Retirement Plan in respect of the Pension
Plan as in effect on the date of this Agreement, assuming (1) that
benefits have accrued thereunder and Executive is entitled to such
benefits, (2) each such benefit shall be computed as if Executive
had two Years of Credited Service for every one actual Year of
Credited Service earned under the Pension Plan, plus six additional
Years of Credited Service earned under the Pension Plan and (3)
Executive were fully vested in such hypothetical benefits, over (B)
the actuarial equivalent value of Executive's vested accrued
benefits under the Pension Plan and benefits payable
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