SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or
or Rule 14a-12
KANSAS CITY POWER AND LIGHT COMPANY
- ----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WESTERN RESOURCES, INC.
- ----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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1) Amount Previously Paid:
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4) Date Filed:
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/x/ Filing fee paid with preliminary filing.
On May 4, 1996, Western Resources, Inc. issued the following Press Release:
Western Resources Mails Proxy Materials To KCPL Shareholders
Shareholders Urged To Vote "AGAINST" On The Blue Proxy Card
In Order To Have Chance To Consider Western Offer
Western Resources late Friday filed definitive proxy materials with the
Securities and Exchange Commission (SEC) in Washington, D.C., with respect
to its solicitation of proxies AGAINST the proposed
UtiliCorp/KCPL merger. The proxy and a preliminary prospectus describing
Western Resources' proposed exchange offer for shares of Kansas City
Power & Light Company (KCPL) is being mailed to all KCPL shareholders
today.
"We are now able to deliver directly to KCPL shareholders the full
details of our proposed offer for KCPL announced in April," said John E.
Hayes, Jr., Western Resources chairman of the board and chief executive
officer. "Unfortunately, we believe that until now, KCPL shareholders
have been inundated with misleading information from KCPL and
UtiliCorp."
Hayes said KCPL shareholders soon will receive a proxy statement
asking them to vote AGAINST the proposed UtiliCorp/KCPL merger so that
they can consider the Western Resources offer. A preliminary prospectus
explaining the offer is included with the proxy. Once the SEC has
declared the Western Resources' registration statement effective,
Western Resources will commence an offer to KCPL shareholders to
exchange their shares for Western Resources' shares.
Even if KCPL shareholders have previously voted on the
UtiliCorp/KCPL merger proposal, they are entitled to vote again with the
blue proxy card included with the proxy materials. A vote AGAINST the
UtiliCorp/KCPL merger by KCPL shareholders will give them time for a
more thorough review of the Western Resources offer. The most recently
dated proxy card is the vote that matters.
Hayes reminded shareholders that a vote AGAINST the UtiliCorp/KCPL
merger is not a vote FOR a Western Resources offer. Instead, the AGAINST
vote simply allows KCPL shareholders more time to review Western
Resources offering materials, which may not be mailed in final form
until after the UtiliCorp/KCPL shareholder meeting scheduled for May 22.
"Timing is everything in giving KCPL shareholders a choice," said
Hayes. "A vote AGAINST today gives shareholders the chance to make a
well-informed choice based on fact, not on what we believe to be
misleading statements from other sources. I'm satisfied that once KCPL
shareholders get those facts about the Western Resources offer -- a
higher premium, higher dividend, lower rates, a stronger community --
they will vote AGAINST the UtiliCorp/KCPL merger on the blue proxy
card."
Western Resources (NYSE:WR) is a diversified energy company. Its
utilities, KPL and KGE, operating in Kansas and Oklahoma, provide natural
gas service to approximately 650,000 customers and electric service to
approximately 600,000 customers. Through its subsidiaries, Westar Business
Services, Westar Consumer Services, Westar Capital, and The Wing Group,
energy-related products and services are developed and marketed in the
continental U.S., and offshore. For more information about Western
Resources and its operating companies, visit us on the Internet at
http://www.wstnres.com.
A registration statement relating to the Western Resources securities
referred to in these materials has been filed with the Securities and
Exchange Commission but has not yet become effective. Such securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. These materials shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration and
qualification under the securities laws of any such state.
On May 4, 1996, Western Resources, Inc. issued the following Employee
Update:
Western Resources Mails Proxy Materials To KCPL Shareholders
Shareholders Urged To Vote "AGAINST" On The Blue Proxy Card
In Order To Have Chance To Consider Western Offer
Western Resources late Friday filed definitive proxy materials with the
Securities and Exchange Commission (SEC) in Washington, D.C., with
respect to its solicitation of proxies AGAINST the proposed
UtiliCorp/KCPL merger. The proxy and a preliminary prospectus describing
Western Resources' proposed exchange offer for shares of Kansas City
Power & Light Company (KCPL) is being mailed to all KCPL shareholders
today.
"We are now able to deliver directly to KCPL shareholders the full
details of our proposed offer for KCPL announced in April," said John E.
Hayes, Jr., Western Resources chairman of the board and chief executive
officer. "Unfortunately, we believe that until now, KCPL shareholders
have been inundated with misleading information from KCPL and
UtiliCorp."
Hayes said KCPL shareholders soon will receive a proxy statement
asking them to vote AGAINST the proposed UtiliCorp/KCPL merger so that
they can consider the Western Resources offer. A preliminary prospectus
explaining the offer is included with the proxy. Once the SEC has
declared the Western Resources' registration statement effective,
Western Resources will commence an offer to KCPL shareholders to
exchange their shares for Western Resources' shares.
Even if KCPL shareholders have previously voted on the
UtiliCorp/KCPL merger proposal, they are entitled to vote again with the
blue proxy card included with the proxy materials. A vote AGAINST the
UtiliCorp/KCPL merger by KCPL shareholders will give them time for a
more thorough review of the Western Resources offer. The most recently
dated proxy card is the vote that matters.
Hayes reminded shareholders that a vote AGAINST the UtiliCorp/KCPL
merger is not a vote FOR a Western Resources offer. Instead, the AGAINST
vote simply allows KCPL shareholders more time to review Western
Resources offering materials, which may not be mailed in final form
until after the UtiliCorp/KCPL shareholder meeting scheduled for May 22.
"Timing is everything in giving KCPL shareholders a choice," said
Hayes. "A vote AGAINST today gives shareholders the chance to make a
well-informed choice based on fact, not on what we believe to be
misleading statements from other sources. I'm satisfied that once KCPL
shareholders get those facts about the Western Resources offer -- a
higher premium, higher dividend, lower rates, a stronger community --
they will vote AGAINST the UtiliCorp/KCPL merger on the blue proxy
card."
A registration statement relating to the Western Resources securities
referred to in these materials has been filed with the Securities and
Exchange Commission but has not yet become effective. Such securities
may not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. These materials shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration and
qualification under the securities laws of any such state.
Advertisement published on May 6, 1996:
ATTENTION KCPL SHAREHOLDERS
WE BELIEVE
THE BLUE PROXY CARD
[PICTURE]
IS YOUR FREEDOM
OF CHOICE.
Sometimes it's good to vote against something to get what you are for. All
KCPL shareholders will soon receive a proxy statement and a blue proxy
card. When you vote against the UtiliCorp/KCPL merger with the blue proxy
card, you are voting for freedom to choose Western Resources' merger offer.
And you are voting against someone else deciding that the UtiliCorp merger
offer is best for you.
VOTE THE TRUE BLUE PROXY CARD.
Vote AGAINST the UtiliCorp/KCPL merger.
[LOGO]
Western Resources
Western Resources has filed exchange offer materials with the Securities
and Exchange Commission and intends to make its offer directly to
shareholders of KCPL as soon as its registration statement has been
declared effective by the S.E.C.
Western Resources believes its offer is financially superior to the
proposed merger between UtiliCorp United and KCPL which you will be asked
to vote upon at the KCPL shareholders meeting on May 22, 1996. We intend
to solicit proxies from KCPL shareholders in opposition to the UtiliCorp
merger vote.
SHARES OF KANSAS CITY POWER & LIGHT COMPANY ("KCPL")
COMMON STOCK HELD BY WESTERN RESOURCES, INC. ("WESTERN RESOURCES"), ITS
DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES, OTHER
REPRESENTATIVES OF WESTERN RESOURCES AND CERTAIN OTHER PERSONS WHO MAY
SOLICIT PROXIES, AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND KCPL
Western Resources may solicit proxies against the KCPL/UtiliCorp
United Inc. merger. The participants in this solicitation may include
Western Resources, the directors of Western Resources (Frank J.
Becker, Gene A. Budig, C.Q. Chandler, Thomas R. Clevenger, John C.
Dicus, John E. Hayes, Jr., David H. Hughes, Russell W. Meyer, Jr.,
John H. Robinson, Louis W. Smith, Susan M. Stanton, Kenneth J. Wagnon
and David C. Wittig), and the following executive officers and
employees of Western Resources or its subsidiaries: Steven L. Kitchen
(E.V.P. and C.F.O.), Carl M. Koupal, Jr. (E.V.P. and CAO), John K.
Rosenberg (E.V.P. and G.C.), Jerry D. Courington (Controller), James
T. Clark (V.P.), William G. Eliason (V.P.), Thomas L. Grennan (V.P.),
Richard M. Haden (E.V.P.), Norman E. Jackson (E.V.P.), James A. Martin
(V.P.), Hans E. Mertens (V.P.), Carl A. Ricketts (V.P.), David E. Roth
(V.P.), Mark A. Ruelle (V.P.), Edward H. Schaub (V.P.), Thomas E. Shea
(Treasurer), Richard D. Terrill (Secretary), William B. Moore
(President, KGE), Steven A. Millstein (President, Westar Consumer),
Rita A. Sharpe (V.P., Westar Business), Kenneth T. Wymore (President,
Westar Business), C. Bob Cline (President, Westar Capital), Fred M.
Bryan (President, KPL), Roderick S. Donovan (V.P., Westar Gas
Marketing), Catherine A. Forbes, Hal L. Jensen, Lisa A. Walsh, Donald
W. Bartling, Michael L. Faler, Clyde R. Hill, Leroy P. Wages, David R.
Phelps, Wayne Kitchen, Glen A. Scott, Jr., Kelly B. Harrison, Marcus
J. Ramirez, Anita J. Hunt, Ira W. McKee, Jr., Michael D. Clark
(Controller, Westar Business), Douglas J. Henry, Annette M. Beck, C.W.
Underkofler, Carol E. Deason, James N. Wishart, Gregory M. Wright,
Richard D. Kready, Michel' J. Philipp, Greg A. Greenwood, Carolyn A.
Starkey, Bruce A. Akin, James J. Ludwig, Bruce R. Burns, Kelly D.
Foley, Robin D. Brown, Rechell L. Smith, Shari L. Gentry, Gay V.
Crawford, Susan K. Reese, Don W. Whitlock, Denise A Schumaker, Duane
D. Goertz, Robert J. Knott, Judith A. Wilt and Lori A. Finney.
As of April 19, 1996, Western Resources had no security holdings in
KCPL. Robert L. Rives, a person who will solicit proxies, is the
beneficial owner of 500 shares of common stock, no par value, of KCPL
(the "KCPL Common Stock"). Western Resources director Susan M.
Stanton serves as co-trustee of two trusts, which beneficially own
7,900 shares of KCPL Common Stock. No trading activity has occurred
with respect to any of such stock during the last two years. Western
Resources director C.Q. Chandler is Chairman of the board of directors
of INTRUST Financial Corporation. INTRUST Bank, a subsidiary of
INTRUST Financial Corporation, holds in ten trust accounts an
aggregate of 5,468 shares of KCPL Common Stock. Wayne Kitchen is the
beneficial owner of 400 shares of KCPL Common Stock.
Other than as set forth, herein, as of the date of this news
release, neither Western Resources nor any of its directors, executive
officers or other representatives or employees of Western Resources,
or other persons known to Western Resources, who may solicit proxies
has any security holdings in KCPL. Western Resources disclaims
beneficial ownership of any securities of KCPL held by any pension
plan of Western Resources or by any affiliate of Western Resources.
Although Salomon Brothers Inc, financial advisors to Western
Resources, do not admit that they or any of their directors, officers,
employees or affiliates are a "participant," as defined in Schedule
14A promulgated under the Securities Exchange Act of 1934 by the
Securities and Exchange Commission, or that such Schedule 14A requires
the disclosure of certain information concerning Salomon Brothers Inc,
Gregg S. Polle (Managing Director), Arthur H. Tildesley, Jr.
(Director), Terence G. Kawaja (Vice President) and Anthony R.
Whittemore (Associate), in each case of Salomon Brothers Inc, may
assist Western Resources in such a solicitation. Salomon Brothers Inc
engages in a full range of investment banking, securities trading,
market-making and brokerage services for institutional and individual
clients. In the normal course of their business, Salomon Brothers Inc
may trade securities of KCPL for their own account and the account of
their customers and, accordingly, may at any time hold a long or short
position in such securities. As of April 19, 1996, Salomon Brothers
Inc did not hold any securities of KCPL.
Except as disclosed above, to the knowledge of Western Resources,
none of Western Resources, the directors or executive officers of
Western Resources or the employees or other representatives of Western
Resources named above has any interest, direct or indirect, by
security holdings or otherwise, in KCPL.
A registration statement relating to the Western Resources
securities referred to in this news release has been filed with the
Securities and Exchange Commission but has not yet become effective.
Such securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This
news release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of these securities in
any state in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of
any such state.
[PICTURE]
[PICTURE]
In our employees' future. "There will be no layoffs of Western Resources
or KCPL employees in our offer."--John E. Hayes, Jr., Chairman of the Board
and Chief Executive Officer.
"I believe that promise is something the people at KCPL can count on. When
KGE and KPL merged in 1992 the company promised no layoffs and kept its
promise."--Emil P. Nobile, Business Manager of Electrical Workers (IBEW)
Local 1523.
[PICTURE]
In the future of our environment. The employee directed Green Team
reclaims land, protects and replenishes wildlife, and makes life better for
us all. This Western Resources group has won many environmental awards.
Most recently the Green Team was awarded the National Conservation
Achievement Award for Corporate Leadership.
[PICTURE]
In supporting the communities we serve. With time and money, Western
Resources supports beneficial community activities including Operation
Prepair, Project DESERVE, Treasures of the Czars, United Way, Big Brothers
& Big Sisters, and many more.
We are a company of our word. We believe in the future and our commitment
to the environment and the people we serve. Our merger offer to KCPL
benefits customers, shareholders, and employees, and it continues our firm
commitment for generations to come.
Vote AGAINST the UtiliCorp/KCPL merger on the blue proxy card. This is the
only way you will get an opportunity to choose.
The following information was released to analysts on May 6, 1996:
What's in it for Drue Jennings
A. A Compensation increase of at least 109% from $573,700 to $1,198,995
per year only if the UtiliCorp deal closes, as soon as the deal closes.
B. A Termination Agreement worth more than $6.3 million only if the
UtiliCorp deal closes.
KCPL/UtiliCorp Joint Proxy Statement p. 53
" The Employment Agreements with Messrs. Jennings and Green provide
that each will receive an annual base salary, short-term and long-term
incentive compensation and supplemental retirement benefits no less than
they received before the Effective Time."
KCPL/Utilicorp Joint Proxy (Employment Agreement of Drue Jennings attached
as Exhibit H, pg H-2)
3. COMPENSATION. The Executive shall receive the following
compensation for his services hereunder to the Company:
(a) SALARY. During the Employment Period, the Executive's annual
base salary (the "Annual Base Salary"), payable in accordance with the
Company's general payroll practices, in effect from time to time, shall
be at the annual rate established by the Board, but in no event less than
the greater of his annual base salary with KCPL as in effect as of the
day before the Effective Date and the annual base salary of any other
senior executive officer of the Company or its subsidiaries. The Board
may from time to time direct such upward adjustments in Annual Base Salary
as the Board deems to be necessary or desirable, including, without
limitation, adjustments in order to reflect increases in the cost of
living. The Annual Base Salary shall not be reduced after any increase
thereof. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation of the Company under this Agreement.
b) INCENTIVE COMPENSATION. During the Employment Period, the
Executive shall participate in short-term incentive compensation plans
and long-term incentive compensation plans (the latter to consist of
plans offering stock options, restricted stock and other long-term
incentive compensation) providing him with the opportunity to earn, on a
year-by-year basis, short-term and long-term incentive compensation
(the "Incentive Compensation") at least equal to the greater of (i) the
amounts that he had the opportunity to earn under the comparable plans
of KCPL as in effect immediately before the Effective Time, or (ii) the
amounts that any other senior executive officer of the Company has the
opportunity to earn under the plans of the Company and its subsidiaries for
that year.
Calculation:
Green Jennings Difference
Annual Base Salary $ 495,000(1) $ 403,000(3) $ 92,000
Short Term Incentive 263,995(2) 132,062(3) 131,933
Long Term Incentive 440,000(2) 38,638(4) 401,362
Total $1,198,995 $ 573,700 $ 625,295
(1) KCPL/UtiliCorp Joint Proxy pg 118
Submitted by the Compensation Committee of the UCU Board:
L. Patton Kline Dr. Stanley O. Ikenberry Herman Cain
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG-TERM COMPENSATION AWARDS
-------------------------------- -----
- -----------------------------------------------------
OTHER ANNUAL
RESTRICTED STOCK LONG-TERM ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK
AWARD(S) OPTIONS INCENTIVE PLAN COMPENSATION
POSITION YEAR ($) ($) ($)
(1)($) (#) (2)($) (2)($)
------- ------- --------- ------------ -----
- --------- ------- -------------- ---------------
Richard C. Green, Jr., 1995 495,000 0 53,730(3)
330,010 120,565 550,017 46,810(4)(5)(6)
Chairman and Chief 1994 495,000 0 38,766
511,312 0 0 13,500
Executive Officer 1993 445,000 0 75,120
482,376 0 0 16,069
(2)KCPL/UtiliCorp Joint Proxy pg. 117
"Annual incentive awards are based on actual UCU results and
quality of management. For 1995, the actual earnings per share were
$1.72. This level of earnings per share was impacted by an accounting
charge associated with FASB 121. The impact of the FASB charge was
$.43 per share. The Compensation Committee has decided that annual
incentives will be paid as if the FASB 121 charge did not take place in
1995 and the incentive payment of $263,995 has been authorized by the
Compensation Committee to Mr. Green according to the earnings per share
goals set by the Compensation Committee for 1995.
Mr. Green was awarded 6,861 performance units under the Long-Term
Incentive Plan for the period 1993 to 1995. For the 1993, 1994 and 1995
cycle, the actual growth in earnings per share and the Return on
Equity was impacted by an accounting charge associated with FASB 121,
and the Compensation Committee has decided that annual incentives will
be paid as if the FASB 121 charge did not take place in 1995. A long-
term incentive payment of $440,000 has been authorized by the
Compensation Committee to Mr. Green according to the provisions of
the plan for the years 1993, 1994 and 1995."
(3) KCPL/UtiliCorp Joint Proxy (pg 111 and 112)
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
----------------
ANNUAL
COMPENSATION SECURITIES
--------------
- ------ UNDERLYING ALL OTHER
SALARY
BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)
($)(1) (#) ($)(2)
- ------------------------------------------------ --------- --------- ---
- ------ ---------------- -------------
A. Drue Jennings................................ 1995 403,000
132,062 13,750 shares 57,307
Chairman of the Board, 1994 390,000
120,710 13,750 shares 36,657
President and Chief 1993 375,000
113,750 13,750 shares 26,151
Executive Officer
(4)KCPL/UtiliCorp Joint Proxy (pg 117)
OPTIONS AND STOCK APPRECIATION RIGHTS
OPTION/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF
SECURITIES PERCENT OF
TOTAL
UNDERLYING
OPTIONS/SARS EXERCISE GRANT DATE
OPTIONS/SARS GRANTED
TO OR BASE PRESENT
INDIVIDUAL GRANTS GRANTED EMPLOYEES
IN PRICE EXPIRATION VALUE
NAME (#)(1) FISCAL
YEAR ($/SH) DATE ($)(2)
- ----------------------------------------------- ------------- -----------
- ------ --------- ---------- -----------
A. Drue Jennings............................... 13,750
20% 23.0625 6/7/05 38,638
B. Termination Agreement - Worth more than $6.3 million.
NewCo Agreement - $6,352,838
KCPL/UtiliCorp Joint Proxy pg H-4
(ii) in the event of Termination other than by reason of the
Executive's death, then (A) the Company shall pay to the Executive a lump
sum amount, in cash, equal to the present value of the Annual Base Salary
and the Incentive Compensation benefit described in Section 3(b) of
this
Agreement payable through the end of the Employment Period or, if longer,
for a period of three years (the "Continuation Period"), each, at the
rate, in effect at the time Notice of Termination is given, and, with
respect to the Incentive Compensation, assuming the full achievement of
all target performance goals in effect at the time that Notice of
Termination is given, such amount to be paid within 30 days of such Date
of Termination; (B) except with respect to the benefits provided pursuant
to clause (d) below, the Company shall pay to the Executive the value of
all benefits to which the Executive would have been entitled under
Sections 3(d) and (f) had he remained in employment with the Company
until the end of the Continuation Period; (C) the Company shall pay the
value of all deferred compensation amounts (together with any accrued
interest or earnings thereon) and all executive life insurance benefits
whether or not then vested or payable; and (D) the Company shall continue
medical and welfare benefits to the Executive and/or the Executive's
family at least equal to those which would have been provided had the
Executive remained in employment to the end of the Continuation Period
(excluding benefits to which the Executive has waived his rights in
writing), such benefits to be in accordance with the most favorable medical
and welfare benefit plans, practices, programs or policies (the "M&W
Plans") of the Company as in effect and applicable to any senior executive
officer of the Company and his or her family during the 90-day period
immediately preceding the Date of Termination or, if more favorable to the
Executive, as in effect at any time thereafter with respect to any senior
executive officer of the Company (but on a prospective basis only unless
and then only to the extent, such more favorable M&W Plans are by their
terms retroactive); PROVIDED, HOWEVER, that if the Executive becomes
employed with another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the benefits under
the M&W Plans shall be secondary to those provided under such other plan
during such applicable period of eligibility.
KCPL/UtiliCorp Joint Proxy pg H-3
(d) INSURANCE. During the Employment Period, the Company shall provide
the Executive with life insurance coverage providing a death benefit to
such beneficiary or beneficiaries as the Executive may designate of not
less than three times his Annual Base Salary.
(f) FRINGE BENEFITS. During the Employment Period and so long as the
Executive is employed by the Company, he shall be entitled to receive
fringe benefits in accordance with the plans, practices, programs and
policies of the Company from time to time in effect, commensurate with his
position and at least the same as those received by any senior executive
officer of the Company.
Calculation
(1)Base Salary and Incentives
(1,198,995 x 5) $5,994,975
(2)Insurance (3 x Base Salary)
($5.76 x [495 x 3 - 50] x 5) 41,328
(3)Medical Benefits
($500 x 12 x 5) 30,000
(4)Other Fringe Benefits
($57,307 x 5) 286,535
Total $6,352,838
ANNEX H
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the day of , 199 , by
and between (the "Company"), a Delaware corporation, and A. Drue
Jennings (the "Executive");
WHEREAS, the Executive is currently serving as Chairman, President and
Chief Executive Officer of Kansas City Power & Light Company, a Missouri
corporation ("KCPL"), and the Company desires to secure the continued
employment of the Executive in accordance herewith;
WHEREAS, KCPL has entered into a severance agreement (the "Severance
Agreement") with the Executive as of May 7, 1993, as amended on January 15,
1996;
WHEREAS, pursuant to the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of January 19, 1996, among KCPL, UtiliCorp United
Inc., a Delaware corporation ("UCU") and the Company, the parties thereto
have agreed to merge pursuant to the terms thereof;
WHEREAS, the Executive is willing to commit himself to be employed by the
Company on the terms and conditions herein set forth and thus to forego
opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement, as of the
Effective Date, as hereinafter defined, setting forth the terms and
conditions for the employment relationship of the Executive with the
Company during the Employment Period (as hereinafter defined).
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. EMPLOYMENT AND TERM.
(a)EMPLOYMENT. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the
terms and provisions of this Agreement during the term thereof (as
described below).
(b)TERM. The term of this Agreement shall commence as of the Closing Date
(the "Effective Date") of the merger (the "Merger") contemplated by the
Merger Agreement and shall continue until the fifth anniversary of the
Effective Date (such term being referred to hereinafter as the "Employment
Period"); and FURTHER PROVIDED, HOWEVER, that if the Merger Agreement is
terminated, then, at the time of such termination, this Agreement shall be
deemed cancelled and of no force or effect. As a condition to the Merger,
the parties hereto agree that the Company shall be responsible for all of
the premises, covenants and agreements set forth in this Agreement.
2. DUTIES AND POWERS OF EXECUTIVE.
(a) POSITION; LOCATION.During the Employment Period, the Executive shall
serve from the Effective Date until the date of the annual meeting of
stockholders of the Company that occurs in 2002, as the Chairman of the
Board of Directors of the Company (the "Board") with such authority, duties
and responsibilities with respect to such position as set forth on Annex A
attached hereto, and thereafter the Executive shall serve as the Vice
Chairman of the Board with such authority, duties and responsibilities with
respect to such position as set forth on Annex A attached hereto. The
titles, authority, duties and responsibilities set forth in Annex A
attached hereto may be changed from time to time but only with the mutual
written agreement of the Executive and the Company. The Executive's
services shall be performed primarily at the Company's headquarters which
shall be located in the Kansas City metropolitan area.
(b)BOARD MEMBERSHIP. The Executive shall be a member of the Board on the
first day of the Employment Period, and the Board shall propose the
Executive for re-election to the Board throughout the Employment Period.
(c) ATTENTION. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
shall devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive under this
Agreement, use the Executive's reasonable best efforts to carry out such
responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Executive to serve on corporate,
industry, civic or charitable boards or committees, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance
with this Agreement.
3. COMPENSATION.The Executive shall receive the following compensation for
his services hereunder to the Company:
(a)SALARY. During the Employment Period, the Executive's annual base salary
(the "Annual Base Salary"), payable in accordance with the Company's
general payroll practices, in effect from time to time, shall be at the
annual rate established by the Board, but in no event less than the greater
of his annual base salary with KCPL as in effect as of the day before the
Effective Date and the annual base salary of any other senior executive
officer of the Company or its subsidiaries. The Board may from time to time
direct such upward adjustments in Annual Base Salary as the Board deems to
be necessary or desirable, including, without limitation, adjustments in
order to reflect increases in the cost of living. The Annual Base Salary
shall not be reduced after any increase thereof. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation of the
Company under this Agreement.
(b) INCENTIVE COMPENSATION. During the Employment Period, the Executive
shall participate in short-term incentive compensation plans and long-term
incentive compensation plans (the latter to consist of plans offering stock
options, restricted stock and other long-term incentive compensation)
providing him with the opportunity to earn, on a year-by-year basis, short-
term and long-term incentive compensation (the "Incentive Compensation") at
least equal to the greater of (i) the amounts that he had the opportunity
to earn under the comparable plans of KCPL as in effect immediately before
the Effective Time, or (ii) the amounts that any other senior executive
officer of the Company has the opportunity to earn under the plans of the
Company and its subsidiaries for that year.
(c) RETIREMENT, INCENTIVE AND WELFARE BENEFIT PLANS.In addition to 3(b),
during the Employment Period and so long as the Executive is employed by
the Company, he shall be eligible to participate in all other incentive,
stock option, restricted stock, performance unit, savings, retirement and
welfare plans, practices, policies and programs applicable generally to
employees and/or senior executive officers of the Company and its
subsidiaries, except with respect to any benefits under any plan, practice,
policy or program to which the Executive has waived his rights in writing.
Notwithstanding anything in this Agreement to the contrary, and in addition
to any other payments or benefits provided hereunder, for all periods
following the termination of the Executive's employment (i) for any reason
during the term of this Agreement but after the Executive has satisfied the
requirements for early retirement under any retirement plans or
arrangements maintained by KCPL, as in effect on the Effective Date or by
the Company after the Effective Date (the "Plans") or (ii) at any other
time upon the consent of the Board, the Company shall provide the Executive
(and, if elected by the Executive pursuant to the following sentence, his
designated beneficiary) with retirement income, in addition to any benefits
provided under the Plans, in an amount each year during the Executive's
life (and, if elected by the Executive pursuant to the following sentence,
the life of his designated beneficiary) equal to the excess, if any, of (i)
sixty percent (60%) of the Executive's Annual Base Salary in effect
immediately prior to his termination of employment (reduced based upon the
actuarial assumptions set forth in the Company's tax-qualified defined
benefit retirement plan (the "Qualified Plan") if the Executive elects a
form of benefit payment other than a straight life annuity pursuant to the
following sentence) over (ii) the aggregate amount of retirement income, if
any, that would have been paid to the Executive under the Plans during such
year had the Executive elected to receive his benefits thereunder in the
same form as he elects to receive his benefits hereunder pursuant to the
following sentence. The Executive may elect to receive the amounts payable
pursuant to the preceding sentence in any form permitted under the
Qualified Plan. Such election must be made not less than 90 days preceding
the payment of any such benefits. In addition, the Company shall assume and
continue the Severance Agreement.
(d) INSURANCE. During the Employment Period, the Company shall provide the
Executive with life insurance coverage providing a death benefit to such
beneficiary or beneficiaries as the Executive may designate of not less
than three times his Annual Base Salary.
(e)EXPENSES.The Company shall reimburse the Executive for all expenses,
including those for travel and entertainment, properly incurred by him in
the performance of his duties hereunder in accordance with policies
established from time to time by the Board.
(f) FRINGE BENEFITS. During the Employment Period and so long as the
Executive is employed by the Company, he shall be entitled to receive
fringe benefits in accordance with the plans, practices, programs and
policies of the Company from time to time in effect, commensurate with his
position and at least the same as those received by any senior executive
officer of the Company.
4. TERMINATION OF EMPLOYMENT.
(a) DEATH.The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period.
(b) BY THE COMPANY FOR CAUSE. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean the conviction of the Executive for the
commission of a felony which, at the time of such commission, has a
materially adverse effect on the Company.
(c)BY THE COMPANY WITHOUT CAUSE. Notwithstanding any other provision of
this Agreement, the Company may terminate the Executive's employment other
than by a termination for Cause during the Employment Period, but only upon
the affirmative vote of two-thirds of the membership of the Board.
(d)BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate his
employment during the Employment Period for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the reduction in the Executive's Annual Base Salary as specified in
Section 3(a) of this Agreement, the Executive's Incentive Compensation
benefit as specified in Section 3(b) of this Agreement, or any other
benefit or payment described in Section 3 of this Agreement;
(ii) the change without the Executive's consent of the Executive's title,
authority, duties or responsibilities as specified in Section 2(a) of this
Agreement;
(iii) the Company's requiring the Executive without his consent to be based
at any office or location other than the Company's headquarters which shall
be located in the Kansas City metropolitan area; or
(iv) any breach by the Company of any other material provision of this
Agreement;
PROVIDED, HOWEVER, that during the 30-day period commencing on the third
anniversary of the Effective Date, the termination by the Executive for any
reason shall constitute a termination by the Executive of his employment
for Good Reason.
(e) NOTICE OF TERMINATION.Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
10(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice 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 the Executive's employment
under the provision so indicated, and (iii) if the Date of Termination (as
defined in Section 4(f)) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 30 days
after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the Executive
or the Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(f) DATE OF TERMINATION."Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for
Good Reason, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause, the Date of
Termination shall be the date on which the Company notifies the Executive
of such termination and (iii) if the Executive's employment is terminated
by reason of death, the Date of Termination shall be the date of death.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) TERMINATION OTHER THAN FOR CAUSE. During the Employment Period, if the
Company shall terminate the Executive's employment (other than in the case
of a termination for Cause), the Executive shall terminate his employment
for Good Reason or the Executive's employment shall terminate by reason of
death (termination in any such case being referred to as a "Termination"):
(i) the Company shall pay to the Executive a lump sum amount in cash equal
to the sum of (A) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (B) an amount equal to the
Incentive Compensation benefit described in Section 3(b) of this Agreement
for the fiscal year that includes the Date of Termination multiplied by a
fraction the numerator of which shall be the number of days from the
beginning of such fiscal year to and including the Date of Termination and
the denominator of which shall be 365, and (C) any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid. (The amounts specified in clauses (A), (B) and (C) shall
be hereinafter referred to as the "Accrued Obligations".) The amounts
specified in this Section 5(a)(i) shall be paid within 30 days after the
Date of Termination; and
(ii) in the event of Termination other than by reason of the Executive's
death, then (A) the Company shall pay to the Executive a lump sum amount,
in cash, equal to the present value of the Annual Base Salary and the
Incentive Compensation benefit described in Section 3(b) of this Agreement
payable through the end of the Employment Period or, if longer, for a
period of three years (the "Continuation Period"), each, at the rate, in
effect at the time Notice of Termination is given, and, with respect to the
Incentive Compensation, assuming the full achievement of all target
performance goals in effect at the time that Notice of Termination is
given, such amount to be paid within 30 days of such Date of Termination;
(B) except with respect to the benefits provided pursuant to clause (d)
below, the Company shall pay to the Executive the value of all benefits to
which the Executive would have been entitled under Sections 3(d) and (f)
had he remained in employment with the Company until the end of the
Continuation Period; (C) the Company shall pay the value of all deferred
compensation amounts (together with any accrued interest or earnings
thereon) and all executive life insurance benefits whether or not then
vested or payable; and (D) the Company shall continue medical and welfare
benefits to the Executive and/or the Executive's family at least equal to
those which would have been provided had the Executive remained in
employment to the end of the Continuation Period (excluding benefits to
which the Executive has waived his rights in writing), such benefits to be
in accordance with the most favorable medical and welfare benefit plans,
practices, programs or policies (the "M&W Plans") of the Company as in
effect and applicable to any senior executive officer of the Company and
his or her family during the 90-day period immediately preceding the Date
of Termination or, if more favorable to the Executive, as in effect at any
time thereafter with respect to any senior executive officer of the Company
(but on a prospective basis only unless and then only to the extent, such
more favorable M&W Plans are by their terms retroactive); PROVIDED,
HOWEVER, that if the Executive becomes employed with another employer and
is eligible to receive medical or other welfare benefits under another
employer-provided plan, the benefits under the M&W Plans shall be secondary
to those provided under such other plan during such applicable period of
eligibility.
(b) TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE OTHER THAN FOR
GOOD REASON. Subject to the provisions of Section 6 of this Agreement, if
the Executive's employment shall be terminated for Cause during the
Employment Period, or if the Executive terminates employment during the
Employment Period other than a termination for Good Reason, the Company
shall have no further obligations to the Executive under this Agreement
other than the obligation to pay to the Executive the Annual Base Salary
through the Date of Termination plus the amount of any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon), in each case to the extent theretofore unpaid.
(c)SEVERANCE AGREEMENT.Notwithstanding the foregoing, the benefits provided
under subsections (a) and (b) of this Section 5 shall be reduced by any
amounts paid pursuant to the Severance Agreement.
6. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit,
plan, program, policy or practice provided by the Company and for which the
Executive may qualify (except with respect to any benefit to which the
Executive has waived his rights in writing), nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
other contract or agreement entered into after the Effective Date with the
Company. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any benefit, plan, policy, practice or
program of, or any contract or agreement entered into with, the Company
shall be payable in accordance with such benefit, plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
7. FULL SETTLEMENT; MITIGATION.The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts (including amounts for damages for breach)
payable to the Executive under any of the provisions of this Agreement and,
except as provided in Section 5(a)(ii)(D), such amounts shall not be
reduced whether or not the Executive obtains other employment. If there
occurs a dispute between the Executive and the Company as to the
interpretation, terms, validity or enforceability of (including any dispute
about the amount of any payment pursuant to this Agreement) this Agreement,
the Company agrees to pay all legal fees and expenses which the Executive
may reasonably incur as a result of any such dispute.
8. CONFIDENTIAL INFORMATION.The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret, confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by KCPL
and the Company or any of their affiliated companies and that shall not
have been or now or hereafter have become public knowledge (other than by
acts by the Executive or representatives of the Executive in violation of
this Agreement). During
the Employment Period, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it.
9. SUCCESSORS.
(a)ASSIGNMENT BY EXECUTIVE. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) SUCCESSORS AND ASSIGNS OF COMPANY. This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns.
(c) ASSUMPTION.The Company shall 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. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its businesses
and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law, or otherwise.
10. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, without reference to its
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom
enforcement of such amendment, modification, repeal, waiver, extension or
discharge is sought. No person, other than pursuant to a resolution of the
Board or a committee thereof, shall have authority on behalf of the Company
to agree to amend, modify, repeal, waive, extend or discharge any provision
of this Agreement or anything in reference thereto.
(b) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return-receipt requested, postage prepaid,
addressed, in either case, at the Company's headquarters or to such other
address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c) SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) TAXES.The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) NO WAIVER. The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 4(d)
of this Agreement, or the right of the Company to terminate the Executive's
employment for Cause pursuant to Section 4(b) of this Agreement shall not
be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
(f)ENTIRE AGREEMENT. Except for the Severance Agreement, which shall remain
in full force and effect and, in accordance with its terms, be assumed by
the Company as of the Effective Date, this instrument contains the entire
agreement of the Executive, the Company or any predecessor or subsidiary
thereof with respect to the subject matter hereof, and all promises,
representations, understandings, arrangements and prior agreements are
merged herein and superseded hereby.
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from
its Board of Directors, the Company have caused this Agreement to be
executed as of the day and year first above written.
[Company]
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Name:
Title:
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A. Drue Jennings
ANNEX A
TO EMPLOYMENT
AGREEMENT
CHAIRMAN OF THE BOARD
The Chairman of the Board shall be a director and shall preside at meetings
of the Board and meetings of stockholders. The Chairman shall be
responsible for (a) board and stockholder governance, (b) external
relations with industry, cities and communities, (c) economic development
initiatives, (d) oversight of issues relating to the Nuclear Regulatory
Commission and nuclear operations, (e) corporate wide business management
and (f) implementation of business plans with other team members. The
Chairman shall share with the Chief Executive Officer responsibility for
(a) implementation of the Merger, (b) external relations with the financial
community, (c) corporate governance, (d) setting the agenda for all
meetings of the Board (and committees thereof) and (e) enterprise support.
The Chairman of the Board shall be a member of the Executive Committee and
an ex officio member of all standing committees.
VICE-CHAIRMAN OF THE BOARD
The Vice-Chairman of the Board shall be a director and shall preside at
meetings of the Board and meetings of stockholders in the absence of the
Chairman of the Board or upon the inability of the Chairman of the Board to
act. The Vice-Chairman shall perform such duties as may from time to time
be assigned to him by the Board.
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer shall be a director, shall submit a report of
the operations of the Company for the fiscal year to the stockholders at
their annual meeting and from time to time shall report to the Board all
matters within his knowledge which the interests of the Company may require
be brought to their notice. The Chief Executive Officer shall be
responsible for (a) the strategic direction, development and oversight of
the Company, (b)the international growth of the Company and (c) the
deployment of strategic assets of the Company (including executive
management). The Chief Executive Officer shall share with the Chairman of
the Board responsibility for (a) implementation of the Merger, (b) external
relations with the financial community, (c) corporate governance, (d)
setting the agenda for all meetings of the Board (and committees thereof)
and (e) enterprise support. The Chief Executive Officer shall be a member
of the Executive Committee and an ex officio member of all standing
committees. The President, the Chief Operating Officer, Chief Financial
Officer and Internal Auditing Department will report directly to the Chief
Executive Officer.
