Exhibit 10(o)
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the _____ day of _______________,
2000 by and between Western Resources, Inc., a Kansas corporation (the
"Company"), and _________________ ("Executive"). This Agreement amends and
restates in its entirety the Letter Agreement between the Company and Executive,
dated ____________, 199__.
W I T N E S S E T H
WHEREAS, the Board (as defined in Section 1) has determined that it is
in the best interests of the Company and its stockholders to secure Executive's
continued services; and
WHEREAS, the Company recognizes that the possibility of a change in
control could arise which may result in the distraction of management to the
detriment of the Company and its shareholders. It is important that Executive be
able to advise the Board whether a proposed change in control would be in the
best interests of the Company and its shareholders and to take action regarding
such proposal as the Board directs, without being influenced by the
uncertainties of Executive's own situation.
WHEREAS, the Board has authorized the Company to enter into this
Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
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have the respective meanings set forth below:
(a) "Adjusted Base Salary" shall mean ninety percent (90%) of the
annual salary job value for the pay grade of Executive.
(b) "Base Salary" shall mean all salary paid to or deferred by
Executive for current services (excluding all bonuses, stock-based awards and
other incentive compensation), together (without duplication) with the salary
that would have been payable in cash to Executive if such compensation had not
been converted into Restricted Share Units pursuant to the Western Resources,
Inc. Executive Stock for Compensation Program.
(c) "Board" means the Board of Directors of the Company.
(d) "Bonus Amount" means the greater of (a) the highest annual
incentive bonus payable to or deferred by Executive from the Company (or its
affiliates) for the last three (3) completed fiscal years of the Company
immediately preceding Executive's Date of Termination (annualized in the event
Executive was not employed by the Company (or its affiliates) for the whole of
any such fiscal year) or (b) the Executive's target bonus amount for the year of
termination of employment.
(e) "Cause" means (i) the willful and continued failure of Executive to
perform substantially his duties with the Company (other than any such failure
resulting from Executive's incapacity due to physical or mental illness or any
such failure subsequent to Executive being delivered a Notice of Termination
without Cause by the Company or delivering a Notice of Termination for Good
Reason to the Company) after a written demand for substantial performance is
delivered to Executive by the Chairman of the Board which specifically
identifies the manner in which Executive has not substantially performed
Executive's duties, or (ii) the willful engaging by Executive in illegal conduct
which is demonstrably and materially injurious to the Company. For purposes of
this paragraph (e), no act or failure to act by Executive shall be considered
"willful" unless done or omitted to be done by Executive in bad faith and
without reasonable belief that Executive's action or omission was in, or not
opposed to, the best interests of the Company. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board, based
upon the advice of counsel for the Company or upon the instructions of the
Company's chief executive officer or another senior officer of the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Executive's attention to matters
not directly related to the business of the Company shall not provide a basis
for termination for Cause if the Company has not objected to such activity in
writing. Cause shall not exist unless and until the Company has delivered to
Executive a copy of a resolution duly adopted by three-quarters (3/4) of the
entire Board (excluding Executive if Executive is a Board member) at a meeting
of the Board called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board an event
set forth in clauses (i) or (ii) has occurred and specifying the particulars
thereof in detail.
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(f) "Change in Control" means the occurrence of any one of the
following events:
(i) individuals who, on May 17, 2000, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director
subsequent to May 17, 2000, whose election or nomination for election
was approved by a vote of at least three-fourths of the Incumbent
Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as
a nominee for director, without written objection to such nomination)
shall be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a director of the Company as a result
of an actual or threatened election contest with respect to directors
or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board
shall be deemed to be an Incumbent Director;
(ii) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then outstanding
securities eligible to vote for the election of the Board (the "Company
Voting Securities"); provided, however, that the event described in
this paragraph (ii) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (A) by the Company or any
Subsidiary, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying Transaction (as
defined in paragraph (iii)), (E) pursuant to any acquisition by
Executive or any group of persons including Executive (or any entity
controlled by Executive or any group of persons including Executive);
(iii) the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the
Company or any of its Subsidiaries (a "Business Combination"), unless
immediately following
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such Business Combination: (A) more than 60% of the total voting power
of (x) the corporation resulting from such Business Combination (the
"Surviving Corporation"), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of
100% of the voting securities eligible to elect directors of the
Surviving Corporation (the "Parent Corporation"), is represented by
Company Voting Securities that were outstanding immediately prior to
such Business Combination (or, if applicable, is represented by shares
into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of
such Company Voting Securities among the holders thereof immediately
prior to the Business Combination, (B) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation) is or becomes the
beneficial owner, directly or indirectly, of 20% or more of the total
voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of
the members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) following
the consummation of the Business Combination were Incumbent Directors
at the time of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A), (B)
and (C) above shall be deemed to be a "Non-Qualifying Transaction"); or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets.
(g) "Date of Termination" means (i) if Executive's employment is to be
terminated for Disability, 30 days after Notice of Termination is given
(provided that Executive shall not have returned to the performance of
Executive's duties on a full-time basis during such 30 day period), (ii) if
Executive's employment is to be terminated by the Company for Cause or by
Executive for Good Reason, the date specified in the Notice of Termination,
(iii) if Executive's employment is to be terminated by the Company for any
reason other than Cause, the date specified in the Notice of Termination, which
shall be 90 days
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after the Notice of Termination is given, unless an earlier date has been
expressly agreed to by Executive in writing; (iv) if Executive's employment
terminates by reason of death, the date of death of Executive; or (v) if
Executive's employment is terminated by Executive other than for Good Reason,
the date specified in Executive's Notice of Termination but not more than 30
days after the Notice of Termination is given, unless expressly agreed to by the
Company in writing.
(h) "Disability" means termination of Executive's employment by the
Company due to Executive's absence from Executive's duties with the Company on a
full-time basis for at least one hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness, unless
within 30 days after Notice of Termination is given to Executive following such
absence Executive shall have returned to the full-time performance of
Executive's duties.
(i) "Good Reason" shall mean termination within two years following a
Change in Control based on any of the following events:
(i) (A) any change in the duties or responsibilities
(including reporting responsibilities) of Executive that is
inconsistent in any material and adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
(including any adverse diminution of such duties or responsibilities)
or (B) the failure to reappoint or reelect Executive to any position
held by Executive without Executive's consent; provided, however, that
Good Reason shall not be deemed to occur upon a change in duties or
responsibilities (other than reporting responsibilities) that is solely
and directly a result of the Company no longer being a publicly traded
entity and does not involve any other event set forth in this
paragraph;
(ii) a reduction by the Company in Executive's Base Salary,
annual target bonus opportunity or targeted long-term incentive value
(including any material and adverse change in the formula for such
annual bonus target or long-term incentive target) as in effect
immediately prior to the Change in Control or as the same may be
increased from time to time thereafter;
(iii) any requirement of the Company that Executive (A) be
required to relocate more than thirty (30) miles from Executive's place
of employment immediately prior to a
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Change in Control or (B) travel on Company business to an extent
substantially greater than the travel obligations of Executive
immediately prior to the Change in Control;
(iv) the failure of the Company to (A) continue in effect any
employee benefit plan, welfare benefit plan or fringe benefit plan in
which Executive is participating immediately prior to the Change in
Control or, if more favorable to Executive, which may be available from
time to time thereafter to Executive or other comparable executives of
the Company, or the taking of any action by the Company which would
materially and adversely affect Executive's participation in or reduce
Executive's benefits under any such plan, unless Executive is permitted
to participate in other plans providing Executive with substantially
equivalent benefits (at no greater cost to Executive with respect to
welfare benefit plans), or (B) provide Executive with paid vacation and
sick leave in accordance with the most favorable policies of the
Company as in effect for Executive immediately prior to the Change in
Control or, if more favorable to Executive, as may be available for
Executive or other executives of the Company after the date thereof;
provided however, changes in any such plans which constitute in the
aggregate less than 10% of Executive's aggregate benefits under such
plans and which are applied to all employees of the Company shall not
constitute "Good Reason";
(v) any refusal by the Company to permit Executive to engage
in activities not directly related to the business of the Company which
Executive was, or other executives of the Company are, permitted to
engage in;
(vi) any purported termination of Executive's employment by
the Company which is not effectuated pursuant to Section 15(b) (and
which will not constitute a termination hereunder); or
(vii) the failure of the Company to obtain the assumption
(and, if applicable, guarantee) agreement contemplated in Section
14(b);
For purposes of this Agreement, any good faith determination of Good
Reason by Executive shall be conclusive, provided however, that an isolated,
insubstantial and inadvertent action taken in good faith and which is remedied
by the Company within ten (10) days after receipt of notice thereof given by
Executive
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shall not constitute Good Reason. Executive's right to terminate employment for
Good Reason shall not be affected by Executive's incapacities due to mental or
physical illness and Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any event or condition
constituting Good Reason; provided, however, that Executive must provide notice
of termination of employment within one hundred eighty (180) days following
Executive's knowledge of an event constituting Good Reason or such event shall
not constitute Good Reason under this Agreement.
(j) "Notice of Termination" means a written notice of termination of
employment given by one party to the other party pursuant to Section 15(b).
(k) "Qualifying Termination" means a termination of Executive's
employment within two (2) years following a Change in Control (i) by the Company
other than for Cause; or (ii) by Executive for Good Reason. Termination of
Executive's employment on account of death, Disability or Retirement shall not
be treated as a Qualifying Termination.
(l) "Retirement" means Executive's termination on or after Executive's
normal retirement date under the terms of the Western Resources, Inc. Retirement
Plan, as in effect immediately prior to Executive's termination or a Change in
Control, whichever is earlier, or in accordance with any retirement arrangement
established with respect to Executive with Executive's written consent.
(m) "Subsidiary" means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets upon liquidation or dissolution.
2. Obligation of Executive. In the event of a tender or exchange offer,
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proxy contest, or the execution of any agreement which, if consummated, would
constitute a Change in Control, Executive agrees not to voluntarily leave the
employ of the Company, other than as a result of Disability, Retirement or an
event which would constitute Good Reason, until the Change in Control occurs or,
if earlier, such tender or exchange offer, proxy contest, or agreement is
terminated or abandoned.
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3. Term of Agreement. This Agreement shall continue for a period of
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three (3) years from the date hereof provided that on each anniversary of the
Agreement, the term shall automatically be extended for one year, unless at
least 90 days prior to such date, the Company or Executive shall have given
notice to cancel this Agreement at the end of its then term.
4. Payments Upon Termination of Employment.
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(a) Qualifying Termination. If during the Term of this Agreement the
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employment of Executive shall terminate pursuant to a Qualifying Termination,
then the Company shall provide to Executive:
(i) within five days following the Date of Termination a
lump-sum cash amount equal to the sum of (A) Executive's Base Salary
through the Date of Termination and any bonus amounts which have become
payable to the extent not theretofore paid or deferred, (B) a pro rata
portion of Executive's annual bonus for the fiscal year in which
Executive's Date of Termination occurs in an amount at least equal to
(1) Executive's Bonus Amount, multiplied by (2) 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 three hundred sixty-five (365), and reduced by
(3) any amounts paid from the Company's annual incentive plan for the
fiscal year in which Executive's Date of Termination occurs, (C) any
accrued vacation pay, and (D) the cash equivalent of any accumulated
sick leave; in each case to the extent not theretofore paid;
(ii) within five days following the Date of Termination, a
lump-sum cash amount equal to the sum of (i) two (2) times [three (3)
times for certain executives] the higher of Executive's highest annual
rate of Base Salary during the 12-month period immediately prior to
Executive's Date of Termination and Executive's Adjusted Base Salary,
plus (ii) two (2) times [three (3) times for certain executives]
Executive's Bonus Amount;
(iii) the Company shall continue to provide, for a period of
two (2) years [three (3) years for certain executives] following
Executive's Date of Termination, Executive (and Executive's dependents,
if applicable) with the same level of medical, dental, accident,
disability and life insurance benefits upon substantially the same
terms
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and conditions (including contributions required by Executive for such
benefits) as existed on Executive's Date of Termination or, if more
favorable to Executive, as may exist immediately prior to the Change of
Control; provided, that, if Executive cannot continue to participate in
the Company plans providing such benefits, the Company shall otherwise
provide such benefits on the same after-tax basis as if continued
participation had been permitted. Notwithstanding the foregoing, in the
event Executive becomes reemployed with another employer and becomes
eligible to receive welfare benefits from such employer, the welfare
benefits described herein shall be secondary to such benefits during
the period of Executive's eligibility, but only to the extent that the
Company reimburses Executive for any increased cost and provides any
additional benefits necessary to give Executive the benefits provided
hereunder.
[(iv) Non-SERP Executives Only: within five days following the
Date of Termination, a lump sum cash amount equal to the actuarial
equivalent of the amount by which Executive's total vested benefits
under the Western Resources Inc. Retirement Plan, computed as if
Executive had two (2) additional years of benefit accrual service,
exceed Executive's actual pension benefits. For this computation,
Executive's final average salary shall be deemed to be the higher of
Executive's Base Salary and Executive's Base Salary in effect just
prior to the time a Notice of Termination is given and the benefit and
accrual formulas and actuarial assumptions shall be no less favorable
to Executive than those in effect at the same time;]
(v) the cost (not to exceed $20,000) of outplacement services
of a nationally recognized executive employment agency selected by
Executive and reasonably acceptable to the Company;
(vi) continuation of the Company's executive financial and
legal counseling services program as in effect on the Date of
Termination or if more favorable to Executive, as may be available to
Executive or other comparable executives of the Company immediately
prior to the Change in Control, for two (2) years [three (3) years for
certain executives] following Executive's Date of Termination;
(vii) if Executive has deferred compensation agreements with
the Company, or any of its subsidiaries or affiliates that (i) have not
fully vested or contain any restriction on
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the payment of benefits thereunder (other than the passage of time)
such benefits shall upon a Qualifying Termination become fully vested
and all such restrictions shall lapse, and/or (ii) provide for variable
interest rates thereon (which interest rates are established by the
Company, subsidiary or affiliate), such interest rates shall be fixed
for the duration of such deferral at the higher of the contract rate
and the prime rate established from time to time by Chase Manhattan
Bank, New York, New York ("Prime Rate");
(viii) each stock option granted to Executive by the Company
and outstanding immediately prior to the Qualifying Termination shall
be fully exercisable and may be exercised by Executive (or Executive's
legal representatives, legatees or distributees) at anytime prior to
the expiration date of the applicable option (determined without regard
to any earlier termination that would otherwise occur by reason of
termination of employment) and each related dividend equivalent shall
become fully vested upon such Qualifying Termination;
(ix) each restricted share granted to Executive by the Company
and still subject to restrictions immediately prior to the Qualifying
Termination shall become fully vested and all restrictions shall lapse
upon such Qualifying Termination;
(x) each restricted share unit granted to Executive by the
Company which has not vested prior to the Qualifying Termination shall
become fully vested upon such Qualifying Termination; and
(xi) each other stock or stock equivalent grant granted to
Executive by the Company which has not vested prior to the Qualifying
Termination shall become fully vested and all restrictions shall lapse
upon such Qualifying Termination.
(b) If during the Term of this Agreement the employment of Executive
shall terminate other than by reason of a Qualifying Termination, then the
Company shall pay to Executive within ten (10) days following the Date of
Termination, a lump-sum cash amount equal to the sum of (1) Executive's Base
Salary through the Date of Termination and any Bonus Amounts which have become
payable, to the extent not theretofore paid or deferred, and (2) any accrued
vacation pay and accumulated sick leave, in each case to the extent not
theretofore paid. The Company may make such
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additional payments, and provide such additional benefits, to Executive as the
Company and Executive may agree in writing.
5. Gross-Up Provision. If the payments provided by Section 4(b) hereof
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(the "Agreement Payments") become subject to the tax (the "Excise Tax") imposed
by Section 4999 of the Code as in effect on the date of this Agreement (or any
similar tax), Executive will be responsible for the Excise Tax and the Company
will not pay Executive an additional amount (the "Gross-up Payment"). If,
however, the "Agreement Payments" become subject to the Excise Tax (or any
similar tax) by virtue of changes in the Code which occur after the date of this
Agreement, the Company shall pay to Executive at the time specified in
Subsection (i) below a "Gross-up Payment" such that the net amount retained by
Executive, after deduction of any Excise Tax on the Total Payments (as
hereinafter defined), and any federal, state and local income tax and Excise Tax
upon the Gross-up Payment provided for by this section shall be equal to what
the Total Payments would have been had such changes in the Code not occurred.
For purposes of determining whether any of the Agreement Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (a) any other
payments or benefits received or to be received by Executive in connection with
a change in control or Executive's termination of employment (under this
Agreement or any other agreement with the Company or any person whose actions
result in a change of control or any person affiliated with the Company) (which,
together with the Agreement Payments, shall constitute the "Total Payments")
shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors such other payments or benefits (in whole or in part) are not subject
to the Excise Tax, (b) the amount of the Total Payments which shall be treated
as subject to the Excise Tax shall be equal to the lesser of (1) the Total
Payments or (2) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause (a), above), and (c) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the Gross-up Payment, Executive shall be
deemed to pay federal, state, and local income taxes at
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the highest applicable marginal rate for the calendar year in which the Gross-up
Payment is to be made net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. If the Excise
Tax is finally determined to be less than the amount taken into account at the
time the Gross-up Payment is made, Executive shall repay the portion
attributable to such reduction (plus the portion of the Gross-up Payment
attributable to a reduction in Excise Tax and/or a federal and state and local
income tax deduction), plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. If the Excise Tax is later
determined to exceed the amount taken into account at the time the Gross-up
Payment is made, the Company shall make an additional gross-up payment (plus any
interest payable with respect to such excess at the rate provided in Section
1274(b)(2)(B) of the code) when such excess is finally determined.
(i) The Gross-up Payment or portion thereof provided for above shall be
paid not later than the thirtieth day following payment of any amounts under
Section 4; provided, however, that if the amount of such Gross-up Payment or
portion thereof cannot be finally determined on or before such day, the Company
shall pay to Executive on such day an estimate, as determined in good faith by
the Company, of the minimum amount of such payments and shall pay the remainder
of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but
in no event later than the forty-fifth day after payment of any amounts under
Section 4. If the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by
the Company to Executive, payable on the fifth day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
(ii) In the event it shall be determined by the Company's independent
auditor that the Agreement Payments would subject Executive to the Excise Tax,
it shall also be determined whether a certain reduction in the Agreement
Payments would result in an after-tax amount with a greater net present value
than would occur without such reduction. If so, the Agreement Payments shall be
reduced by the minimum amount necessary to obtain such result.
6. Confidential Information. Executive acknowledges that: (i) the
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business of the Company and its subsidiaries and affiliates is intensely
competitive and that Executive's engagement by the Company requires that
Executive have access to and knowledge of confidential information of the
Company and its subsidiaries and
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affiliates, including, but not limited to, the identity of customers, the
identity of the representatives of customers with whom the Company and its
subsidiaries and affiliates have dealt, the kinds of services provided by the
Company and its subsidiaries and affiliates to customers and offered to be
performed for potential customers, the manner in which such services are
performed or offered to be performed, the service needs of actual or prospective
customers, pricing information, information concerning the creation, acquisition
or disposition of products and services, customer maintenance listings, computer
software applications and other programs, personnel information and other trade
secrets (the "Confidential Information"); (ii) the direct and indirect
disclosure of such Confidential Information to existing or potential competitors
of the Company and its subsidiaries and affiliates would place the Company and
its subsidiaries and affiliates at a competitive disadvantage and would do
damage, monetary or otherwise, to the business of the Company and its
subsidiaries and affiliates; and (iii) the engaging by Executive in any of the
activities prohibited by this Section 6 may constitute improper appropriation
and/or use of such information and trade secrets. Notwithstanding the foregoing,
Confidential Information shall not include information which (x) is or becomes
part of the public domain through a source other than Executive, (y) is or
becomes available to Executive from a source independent of the Company and its
subsidiaries and affiliates, or (z) constitutes general industry knowledge
possessed by Executive by virtue of Executive's employment with the Company.
Executive expressly acknowledges the trade secret status of the Confidential
Information and that the Confidential Information constitutes a protectable
business interest of the Company and its subsidiaries and affiliates.
Accordingly, the Company and Executive agree as follows:
(a) During the Term of this Agreement and for three years
following Executive's Date of Termination, Executive shall not, directly or
indirectly, whether individually, as a director, stockholder, owner, partner,
employee, principal or agent of any business, or in any other capacity, make
known, disclose, furnish, make available or use any of the
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Confidential Information, other than in the proper performance of the duties
contemplated herein or as required by law or by a court of competent
jurisdiction or other administrative or legislative body; provided, however,
that prior to disclosing any of the Confidential Information to a court or other
administrative or legislative body, Executive shall promptly notify the Company
so that the Company may seek a protective order or other appropriate remedy.
(b) Executive agrees to return all Confidential Information,
including all photocopies, extracts and summaries thereof, and any such
information stored electronically on tapes, computer disks or in any other
manner to the Company at anytime upon request of the Company and upon the
termination of Executive's employment for any reason.
7. Nonsolicitation. During the Term of this Agreement and for a period
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of two years after the Date of Termination Executive shall not, directly or
indirectly, solicit, interfere with, hire, offer to hire or induce any person
who is an employee of the Company or any of its subsidiaries or affiliates and
whose salary is in excess of $50,000 to discontinue his or her relationship with
the Company or any of its subsidiaries or affiliates and accept employment by,
or enter into a business relationship with, Executive or any other person or
entity.
8. Antidisparagement.
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(a) Unless otherwise required by a court of competent
jurisdiction or pursuant to any recognized subpoena power, Executive agrees and
promises that Executive shall not make any oral or written statements or reveal
any information to any person, company or agency which (i) is negative,
disparaging or damaging to the name, reputation or business of the Company or
any of its subsidiaries or affiliates, or any of their shareholders, directors,
officers or employees, or (ii) has or would have a negative financial impact,
whether directly or indirectly, on the Company or any of its subsidiaries and
affiliates, or any of their shareholders, directors, officers or employees.
(b) Unless otherwise required by a court of competent
jurisdiction or pursuant to any recognized subpoena power, the Company agrees
and promises that neither it nor any of its subsidiaries and affiliates shall
make any oral or written statements or reveal any information to any person,
company or agency which (i) is negative, disparaging or damaging to the name,
reputation or business of Executive or (ii) has or would have a negative
financial impact, whether directly or indirectly, on Executive.
9. Injunctive Relief.
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(a) Executive acknowledges that a breach of the undertakings
in Sections 6, 7 or 8(a) of this Agreement would cause irreparable damage to the
Company and its subsidiaries and affiliates, the exact amount of which shall be
difficult to ascertain, and that remedies at law for any such breach would be
inadequate. Executive agrees that, if Executive breaches or attempts or
threatens to breach any of the undertakings in Sections 6, 7 or 8(a) of this
Agreement, then the Company shall be entitled to injunctive relief without
posting bond or other security, in addition to any other remedy or remedies
available to the Company at law or in equity.
(b) The Company acknowledges that a breach of the undertakings
in Section 8(b) of this Agreement would cause irreparable damage to Executive,
the exact amount of which shall be difficult to ascertain, and that remedies at
law for any such breach would be inadequate. The Company agrees that, if the
Company or any of its subsidiaries or affiliates breaches or attempts or
threatens to breach any of the undertakings in Section 8(b) of this Agreement,
then Executive shall be entitled to injunctive relief, without posting bond or
other security, in addition to any other remedy or remedies available to
Executive at law or in equity.
10. Withholding Taxes. The Company may withhold from all payments due
-----------------
to Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
11. Indemnity. The Company shall hold harmless and indemnify Executive
---------
against any and all expenses (including attorneys' fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by Executive in
connection with any threatened, pending, or completed action, suit, or
proceeding whether civil, criminal, administrative, or investigative (including
an action by or in the right of the corporation) to which Executive is, was, or
at anytime becomes a party, or is threatened to be made a party, by reason of
the fact that Executive is, was, or at anytime becomes a director, officer,
employee, or agent of Company, or is, or was serving, or at anytime serves at
the request of Company as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise; or
otherwise to the fullest extent as may be provided to Executive by Company under
the nonexclusivity provisions of Article XVIII of The Articles of Incorporation
of Company and Kansas law.
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12. Reimbursement of Expenses; Mitigation. (a) If any contest or
-------------------------------------
dispute shall arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the Company
to perform fully in accordance with the terms hereof, the Company shall
reimburse Executive, on a current basis, for all legal fees and expenses, if
any, incurred by Executive in connection with such contest or dispute or
incurred by Executive in seeking advice with respect to any such matters
(regardless of the result thereof), together with interest in an amount equal to
the prime rate of Chase Manhattan Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives Executive's statement for
such fees and expenses through the date of payment thereof, regardless of
whether or not Executive's claim is upheld by an arbitration panel or court.
(b) Executive shall not be required to mitigate any payment
the Company becomes obligated to make to Executive under this Agreement.
13. Scope of Agreement. Nothing in this Agreement shall be deemed to
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entitle Executive to continued employment with the Company or its Subsidiaries;
provided, however, that any termination of Executive's employment during the
Term of this Agreement shall be subject to all of the provisions of this
Agreement.
14. Successors; Binding Agreement. (a) This Agreement shall not be
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terminated by any sale, merger or other business combination. In the event of
any such sale, merger or other business combination, the provisions of this
Agreement shall be binding upon the surviving corporation, and such surviving
corporation shall be treated as the Company hereunder.
(b) The Company agrees that in connection with the sale,
merger or other business combination, it will cause any successor entity to the
Company unconditionally to assume (and for any Parent Corporation in such
business combination to guarantee), by written instrument delivered to Executive
(or his beneficiary or estate), all of the obligations of the Company hereunder.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts
16
would be payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to such person or persons appointed in writing by
Executive to receive such amounts or, if no person is so appointed, to
Executive's estate.
15. Notice. (a) For purposes of this Agreement, all notices and other
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communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five (5) days after deposit in
the United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
If to the Company:
Western Resources, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, set 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) specify the Date of Termination. The failure by
Executive or the Company to set forth in such notice any fact or circumstance
which 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.
16. Full Settlement; Resolution of Disputes. The Company's obligation
---------------------------------------
to make any payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall be in lieu and in full settlement of all other
severance payments to Executive under any other severance or employment
agreement between Executive and the Company, and any severance plan of the
17
Company. The Company's 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 Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive obtains other
employment, except as otherwise provided in Section 4(a)(iii). Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Topeka, Kansas by three arbitrators in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators' award in any court having jurisdiction. The
Company shall bear all costs and expenses arising in connection with any
arbitration proceeding pursuant to this Section.
17. Employment with Subsidiaries. Employment with the Company for
----------------------------
purposes of this Agreement shall include employment with any Subsidiary.
18. Survival. The respective obligations and benefits afforded to the
--------
Company and Executive as provided in Sections 4 (to the extent that payments or
benefits are owed as a result of a termination of employment that occurs during
the term of this Agreement), 5, 6, 7, 8, 9, 10, 11, 12, 14, 16, and 19 shall
survive the termination of this Agreement.
19. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND
-----------------------
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF KANSAS WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT.
20. Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
21. Miscellaneous. No provision of this Agreement may be modified or
-------------
waived unless such modification or waiver is agreed to in writing and signed by
Executive and by a duly authorized officer of the Company. No waiver by either
party hereto at anytime of any breach by the other party hereto of; or
compliance
18
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. Failure by Executive or the
Company to insist upon strict compliance with any provision of this Agreement or
to assert any right Executive or the Company may have hereunder, including
without limitation, the right of Executive to terminate employment for Good
Reason, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement. Except as otherwise specifically
provided herein, the rights of, and benefits payable to, Executive, his estate
or his beneficiaries pursuant to this Agreement are in addition to any rights
of, or benefits payable to, Executive, his estate or his beneficiaries under any
other employee benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has executed
this Agreement as of the day and year first above written.
WESTERN RESOURCES, INC.
By: ______________________________
Xxxx X. Xxxxxx, Xx.
Executive Vice President,
Chief Administrative Officer
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