SEVERANCE COMPENSATION AGREEMENT

Exhibit 10(a)(30)

SEVERANCE COMPENSATION AGREEMENT

        This Agreement is effective as of the date it is signed by both AQUILA, INC., a Delaware corporation (the "Company"), and Christopher M. Reitz ("Executive").

        WHEREAS, the Company's Board of Directors has determined that it is appropriate to reinforce and encourage the continued attention and dedication of members of the Company's management, including Executive, to their assigned duties without distraction in potentially disturbing circumstances arising from the possibility of a Change of Control; and

        WHEREAS, this Agreement sets forth the severance compensation to which Executive will be entitled upon certain conditions if Executive's employment with the Company terminates following a Change of Control.

        NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and agreements set forth below, it is hereby agreed as follows:

        1.     Term.     This Agreement shall terminate, except to the extent that any obligation of the Company hereunder remains unpaid as of such time, upon the earliest of: (i) two (2) years from the date hereof if a Change in Control has not occurred within such 2-year period; provided that the term of this Agreement shall be automatically extended for an additional month upon each monthly anniversary of the date hereof until a party provides notice to the other party prior to the end of any month that such automatic extension shall cease, in which case this Agreement shall terminate at the end of the then existing 2-year term; (ii) the termination of Executive's employment for any reason, including by reason of death, Disability or Retirement, prior to a Change of Control; (iii) the termination of Executive's employment for Cause following a Change of Control; (iv) the termination of Executive's employment for any reason other than for Good Reason following a Change of Control; or (v) two (2) years from the date of a Change in Control.

        2.     Severance upon Termination of Employment.     

•         (a)     Events Giving Rise to Benefits.     Executive shall be entitled to payments and other benefits as set forth in Sections 2(b) and 2(c) if within two (2) years following a Change in Control, the Company shall terminate Executive's employment other than for Disability, Retirement, or Cause, or, within such 2-year period, Executive shall terminate his or her employment for Good Reason. Except as specifically provided in this Section 2, Executive shall have no right to receive compensation under this Agreement. Termination of employment due to death shall not give rise to any rights to compensation under this Agreement.

          (b)     Severance Pay.     The Company shall pay a lump sum cash amount, no later than the fifth (5 ^th ) business day following Executive's Date of Termination, equal 2 times the sum of A plus B, where

  •         "A" equals Executive's annual base salary (including all amounts of such salary that are deferred under any qualified and non-qualified plans of the Company) determined at the greater of the rate in effect as of the date of such termination or the highest rate in effect at any time during the 90 day period prior to the Change of Control; and

            "B" equals Executive's target annual incentive opportunity for the calendar year in which such Change in Control occurs, or if greater, the average (50 ^th percentile) target annual incentive opportunity for a select group of comparable companies as determined by an independent consulting firm selected by the Board of Directors of the Company.

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          (c)     Other Benefits.     In addition to compensation set forth in Section 2(b) hereof, and subject to the provisions and limitations set forth below, Executive shall be entitled to the following benefits:

  •           (i)  Commencing on the Date of Termination and continuing for a period of three (3) months thereafter, Executive may exercise all stock options granted to Executive pursuant to the Company's equity incentive plan(s). Such stock options shall be exercisable whether or not: (i) a period of one year has elapsed from the date of grant to the date of exercise; or (ii) any installment exercise terms as stipulated in any agreement issued under such plan(s) have been satisfied. However, in no event shall Executive exercise any stock option after the expiration of the option period as stipulated in an agreement issued under such plan(s).

             (ii)  Effective as of the Date of Termination, any restrictions relating to stock awards granted under the Company's equity incentive plan(s) shall lapse.

            (iii)  No later than the fifth (5 ^th ) business day following Executive's Date of Termination, Executive shall receive a lump sum cash amount equal to Executive's target annual and long-term incentive opportunity for the incentive period in which Executive's employment terminates times a fraction, the numerator of which is the number of days in such incentive period ending on the Date of Termination and the denominator of which is the total number of days in such incentive period.

            (iv)  Effective as of the Date of Termination and continuing for a period of three years after the Date of Termination, the Company will provide Executive with health insurance coverage at the same cost to Executive and at materially the same level of coverage for Executive as the coverage in effect immediately prior to the Date of Termination. The Company shall, at its option, contribute amounts it is required to contribute on behalf of Executive pursuant to this paragraph either to: (A) plans maintained for the Company's employees; or (B) private insurance plans. The health insurance continuation benefits paid for hereunder shall be deemed to be a part of Executive's COBRA coverage. All such health benefits shall be in addition to any other benefits relating to health or medical care benefits that are available under the Company's policies to Executive following termination of employment; provided, however, that in the event Executive becomes covered under substitute health plans of another employer with materially the same level of coverage as that provided by the Company during this period, subject to the applicable requirement of COBRA, the Company will no longer provide health coverage under this paragraph.

             (v)  Effective as of the Date of Termination, Executive shall be entitled to the services of a national executive outplacement firm, the aggregate cost to the Company of which shall not exceed the outplacement benefits comparable to the Aquila Workforce Transition Plan that is in effect as of the date of termination.

            (vi)  Effective as of the Date of Termination, Executive shall be entitled to three (3) years of additional credit for both age and service under the Company's tax-qualified and non-qualified pension plans (specifically excluding any account-based plan such as a 401(k) or profit sharing plan); provided that if applicable provisions of the Internal Revenue Code prevent payment in respect of such credit under the Company's tax-qualified pension plan, such payments shall be made under the Company's non-qualified pension plan.

        3.     Tax Reimbursement.     

•         (a)     Gross-Up Payment.     Notwithstanding Anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution to or for the benefit of Executive whether paid or payable or distributed or distributable pursuant to the terms of this Agreement (other than any payment under this Section 3) or otherwise would be subject to the excise tax

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• imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code") or a similar section (such payment, a "Change in Control Payment" and such excise tax on all such Change in Control Payments, together with any interest and penalties thereon, collectively the "Excise Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount determined by the Accounting Firm such that after payment by Executive of any tax thereon, Executive retains an amount of the Gross-Up Payment equal to the amount of the Excise Tax; provided, however, that if the aggregate value (as determined under Section 280G of the Code) of such Change in Control Payments is less than 110% of the product of "3 times" the Executive's "base amount" (as defined in Section 280G(b)(3) of the Code) (such product, the "Golden Parachute Threshold"), then Executive shall not be entitled to any Gross-Up Payment and, instead, the Change in Control Payments shall be reduced so that their aggregate value (as so determined) is equal to $1.00 less than the Golden Parachute Threshold.

          For purposes of this Section 3, Executive's applicable Federal, state and local taxes shall be computed at the maximum marginal rates, taking into account the effect of any loss of personal exemptions resulting from receipt of the Gross-Up Payment.

          (b)     Determinations.     All determinations required to be made under this Section 3, including whether a Gross-Up Payment is required under Section 3(a), and the assumptions to be used in determining the Gross-Up Payment, shall be made by such accounting firm as the Company may designate in writing prior to a Change in Control (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and Executive within thirty (30) business days of the receipt of notice from Executive that there has been a Change in Control, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the Person effecting the Change in Control or is otherwise unavailable, Executive may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.

          (c)     Subsequent Redeterminations.     Unless requested otherwise by the Company, Executive agrees to use reasonable efforts to contest in good faith any subsequent determination by the Internal Revenue Service that Executive owes an amount of Excise Tax greater than the amount determined pursuant to Section 3(b), provided that Executive shall be entitled to reimbursement by the Company of all fees and expenses reasonably incurred by Executive in contesting such determination. In the event the Internal Revenue Service or any court of competent jurisdiction determines that Executive owes an amount of Excise Tax that is either greater or less than the amount previously taken into account and paid under this Section 3, the Company shall promptly reimburse Executive, or Executive shall promptly reimburse the Company, as the case may be, the amount of such excess or shortfall. In the case of any payment that the Company is required to make to Executive pursuant to the preceding sentence (a "Later Payment"), the Company shall also reimburse Executive an additional amount such that after payment by Executive of all of Executive's applicable Federal, state and local taxes, including any interest and penalties assessed by any taxing authority, on such additional amount, Executive will retain an amount equal to the total of Executive's applicable Federal, state and local taxes, including any interest and penalties assessed by any taxing authority, arising due to the Later Payment. In the case of any reimbursement of Excise Tax that Executive is required to make to the Company pursuant to the second sentence of this Section 3(c), Executive shall also reimburse the Company at the amount of any additional payment received by Executive from the Company in respect of applicable Federal, state and local taxes on such repaid Excise Tax, to the extent Executive is entitled to a refund of (or has not yet paid) such Federal, state or local taxes.

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        4.     Definitions.     As used in this Agreement, the following capitalized terms shall have the meaning set forth below:

•         (a)    "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

          (b)    "Benefit Plans" means any employee benefit plan or arrangement providing retirement benefits or any health, life, disability or similar welfare insurance. Executive perquisites are specifically excluded from this definition.

          (c)    "Cause" means:

  •           (i)  The willful and continued failure by Executive to substantially perform his or her duties of employment with Company other than any such failure resulting from Executive's incapacity due to physical or mental illness, unless Executive uses reasonable efforts to correct such failure within a reasonable time after demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes Executive has not substantially performed his or her duties;

             (ii)  The willful misconduct by Executive which materially injures the Company monetarily or otherwise; or

            (iii)  Conviction of, or entry of a plea of nolo contendere with regard to, any felony or any crime involving moral turpitude or dishonesty of or by Executive. For purposes of this paragraph, no act, or failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, by him or her not in good faith and without reasonable belief that his or her action or omission was in, or not opposed to, the best interests of the Company.

          (d)    "Change in Control" means and shall be deemed to have occurred upon the occurrence of any of the following events:

  •           (i)  Any Person is or becomes the Beneficial Owner, directly or indirectly, of 20% or more of the Voting Securities of the Company (not including in the securities beneficially owned by su