Exhibit 10(a)

 

November 1, 2003

 

Mr. James S. Haines, Jr.

Westar Energy, Inc.

818 S. Kansas Avenue, 11th Floor

Topeka, KS 66612

 

Dear Jim:

 

This letter sets forth the terms of the employment agreement between you and
Westar Energy, Inc. (the “Company”).

 

1. Terms of Employment and Duties. The Company agrees to employ you as its Chief
Executive Officer for a period (the “Term”) of four years from December 6, 2002
(the “Start Date”), unless your employment is sooner terminated by you or the
Company. You will devote your full business time and attention to your duties as
Chief Executive Officer, provided you may devote up to two weeks each year to
teaching at the University of Texas at El Paso. You will report directly to the
Chairman of the Board of Directors and will comply with all reasonable
instructions of the Board of Directors.

 

2. Base Salary and Benefits. During the Term, the Company will provide you the
following salary and benefits: (a) an annual base salary of $750,000; (b) a
signing bonus in the amount of $50,000; (c) an award of 250,000 restricted share
units and associated dividend equivalents which will vest in one-fourth annual
increments if you are employed by the Company on each applicable anniversary
date; (d) participation in all of the Company’s employee benefit plans and
programs from time to time in effect for the benefit of senior executives,
provided you will not be eligible to receive any additional cash or stock based
compensation in any form (other than stock based compensation related to your
participation in the Company’s Employee Stock Purchase Plan); (e) within 60 days
after the Start Date, the Company will make charitable contributions up to
$200,000 to qualified charitable organizations designated by you, provided the
Company will have the right to approve the designated organizations, you will
represent to the Company that you will not personally benefit from such
contributions, such contributions will be paid directly to the designated
organizations, and you will match such contributions from your personal funds;
(f) six weeks of vacation which shall not include up to two weeks each year
devoted to teaching at the University of Texas at El Paso; (g) 180 days of sick
leave as of the Start Date; (h) reimbursement of all reasonable expenses
incurred in the conduct of the Company’s business (including costs associated
with a membership in a country club if such membership is determined by the
Board of Directors to be necessary to the conduct of the Company’s business and
affairs), provided you properly account for expenses in accordance with the
Company’s policies; (i) for up to eight months following the Start Date,
reimbursement for the costs of temporary housing, including rent and utilities,
for you and your spouse in Topeka, Kansas, and for the costs of travel for you
and your spouse to and from Topeka, Kansas and El Paso, Texas; (j) the Company
will purchase the two residences owned by you and your spouse located in El
Paso, Texas at your request at any time prior to the end of the Term for a price
equal to your purchase price plus the cost of all improvements and all other
costs and expenses incurred by you in connection with such sale, provided the
aggregate price paid by the Company will not exceed $500,000; and (k)
reimbursement of moving expenses related to the relocation of you and your
spouse from your residences and offices to Kansas.

 

3. Payments Upon Termination. (a) If your employment terminates pursuant to a
Qualifying Termination (as defined below), then the Company shall provide to
you: (1) within 30 days following the date of termination, a lump-sum cash
amount equal to the sum of your base salary through the date of termination,
your base salary for the remainder of the Term and any accrued vacation pay, in
each case to the extent not theretofore paid; (2) each restricted share unit
(and related dividend equivalent) provided for in this letter which has not
vested prior to the Qualifying Termination will become fully vested; and (3)
continuation for you (and your dependents, if applicable) of the same level of
medical and dental benefits for the life of you and your eligible dependents
upon

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Mr. James S. Haines, Jr.

November 1, 2003

Page 2

 

substantially the same terms and conditions (including contributions required by
you for such benefits) provided at the beginning of the Term; provided, that, if
you cannot continue to participate in the Company plans providing such benefits
or the Company shall modify or terminate any such plans, the Company will
otherwise provide such benefits on the same after-tax basis as if continued
participation had been permitted.

 

(b) If your employment terminates under any circumstances not qualifying as a
Qualifying Termination, including but not limited to death, disability, or
retirement, then the Company will provide to you (or your dependents, if
applicable): (1) within ten days following the date of termination, a lump-sum
cash amount equal to the sum of your base salary through the date of termination
and any accrued vacation pay, in each case to the extent not theretofore paid;
and (2) the benefits described above in Section 3(a)(3).

 

(c) The term “Qualifying Termination” means a termination of your employment
prior to the end of the Term (1) by the Company other than for Cause (as defined
below), (2) by you for Good Reason (as defined below), (3) or by you during the
90 day period after a Change in Control (as defined in the Company’s 1996 Long
Term Incentive and Share Award Plan). Termination of your employment on account
of death, disability or retirement will not be treated as a Qualifying
Termination. The term “Cause” means your conviction of a felony or crime
involving moral turpitude, your commission of a willful act of fraud or
dishonesty with respect to the Company, your willful and repeated failure to
perform substantially your material duties with the Company, your engaging in
significant activity that is materially harmful to the reputation of the
Company, or your breach of your fiduciary responsibilities to the Company or its
shareholders. The term “Good Reason” means any change in your duties or
responsibilities (including reporting responsibilities) that is inconsistent in
any material and adverse respect with your current position(s), duties,
responsibilities or status with the Company (including any adverse diminution of
such duties or responsibilities), the failure to reappoint or reelect you to the
Board of Directors or as the Company’s Chief Executive Officer without your
consent, a reduction by the Company in your base salary, any requirement of the
Company that you be required to relocate outside the Company’s retail electric
service area in Kansas, or the taking of any action by the Company which would
materially and adversely affect your participation in or reduce your benefits
under any employee benefit plan or welfare benefit plan.

 

4. Indemnity. The Company will indemnify you against any and all expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by you 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 you are, were or at any time become a party, or are
threatened to be made a party, by reason of the fact that you are, were or at
any time become a director, officer, employee or agent of Company, or are, or
were serving, or at any time serve 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 you by the Company under the nonexclusivity provisions of Article XVIII of
the Restated Articles of Incorporation and Kansas law.

 

5. Executive Stock Sales. During the period of your employment under this
letter, except to pay taxes due under applicable federal, state, local or other
law as a result of the vesting of restricted share units granted by the Company
to you, you will not sell any shares of the Company’s common stock or preferred
stock owned by you without the prior approval of a majority of the entire Board
of Directors (excluding you and any member of the Board of Directors who is an
employee of the Company), which approval shall not be unreasonably withheld.

 

6. Continuing Covenants. (a)(1) During the Term and for three years following
your date of termination, you will not, directly or indirectly, disclose or use
any of the Company’s 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; (2)
you agree to return all confidential information to the Company at any time upon
request of the Chairman of the Board of Directors and upon the termination of
your employment for any reason; (3) should you leave the Company for any reason
prior to December 6, 2006, you will 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 $100,000 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, you or any other person or entity by whom you are
employed; and (4) you agree that you

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Mr. James S. Haines, Jr.

November 1, 2003

Page 3

 

will not make any oral or written statements or reveal any information to any
person, company or agency concerning the business of the Company which is
untrue. The Company agrees that neither it nor any of its subsidiaries and
affiliates will make any oral or written statements or reveal any information to
any person, company or agency concerning you which is untrue.

 

(b) Each of the Company and you acknowledges that a breach of the applicable
undertakings in subsection (a) would cause irreparable damage to the other
party, the exact amount of which will be difficult to ascertain, and that
remedies at law for any such breach would be inadequate. Each of the Company and
you agrees that, if the other party breaches or attempts or threatens to breach
any of the applicable undertakings in subsection (a), then the other party will
be entitled to injunctive relief without posting bond or other security, in
addition to any other remedy or remedies available to the other party at law or
in equity.

 

7. Resolution of Disputes. Any dispute or controversy arising under or in
connection with this letter will 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 arbitrators shall
determine the allocation of the costs and expenses arising in connection with
any arbitration proceeding pursuant to this Section based on the arbitrators’
assessment of the merits of the positions of the parties. If any dispute shall
arise involving your right to benefits hereunder following a Change in Control,
the Company will reimburse you on a current basis for all legal fees and
expenses incurred in connection with such dispute regardless of the result
thereof.

 

8. General. This letter is entered into by you and the Company on November 1,
2003, but is effective as of the Start Date. This letter will inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. The respective obligations and benefits afforded to the Company and
you as provided in Sections 3, 4, 6, 7 and 8 will survive the termination of
this letter. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS LETTER
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 LETTER SHALL
NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS LETTER,
WHICH OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT. No provision of
this letter may be modified or waived unless such modification or waiver is
agreed to in writing and signed by you and by a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this letter
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 you or the Company to insist upon strict compliance with any
provision of this letter or to assert any right you or the Company may have
hereunder shall not be deemed to be a waiver of such provision or right or any
other provision or right of this letter. You will not be obligated to seek other
employment or take other action by way of mitigation of the amounts payable to
you under any of the provisions of this letter and such amounts shall not be
reduced whether or not you obtain other employment.

 

Please confirm the agreements contained in this letter by signing this letter in
the space provided below.

 

WESTAR ENERGY, INC.

By:

 

/s/ Charles Q. Chandler, IV

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Name: Charles Q. Chandler, IV

Title: Chairman of the Board

 

/s/ James S. Haines, Jr.

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James S. Haines, Jr.