Document:

ex10_3.htm

Exhibit 10.3

Great Plains Energy Incorporated (Great Plains Energy)

Long-Term Incentive Plan

Awards Standards and Performance Criteria

Effective as of January 1, 2012

Objective

The purpose of the Great Plains Energy Long-Term Incentive Plan (“Plan”) is to encourage officers and other key employees to acquire a proprietary and vested interest in the growth and performance of Great Plains Energy (the “Company”); to generate an increased incentive to enhance the value of the Company for the benefit of its customers and shareholders; and to aid in the attraction and retention of the qualified individuals upon whom the Company’s success largely depends.  The Plan provides equity incentives for the achievement of increased shareholder value over a multi-year period.

Eligible employees include officers and other key employees of Great Plains Energy, Kansas City Power & Light (“KCP&L”), and KCP&L Greater Missouri Operations Company (“GMO”) (“participants”), as approved by the Compensation and Development Committee (“Committee”) of the Board of Directors.

Awards

Awards generally are recommended by the Committee and approved by the independent members of the Board of Directors and set as a percentage of the participant’s base salary.  Percentages will vary based on level of responsibility, market data, and internal comparisons.  Awards generally will be based on a dollar amount which will then be converted to shares of restricted stock, performance shares, or a combination of both as determined by the independent members of the Board of Directors, using the Fair Market Value as of the grant date.

Performance Criteria

The amount of an individual participant’s performance share award will be determined based on performance against the specific objectives and performance levels approved by the independent members of the Board of Directors.  Each participant will receive an award agreement including, among other things, the applicable objectives and performance levels.  These objectives and performance levels will also be attached as an appendix to this document.

Payment and Awards

Time-based restricted stock will be payable in shares of Company common stock unless otherwise determined by the Committee.  Dividends accrued on the restricted stock will be reinvested during the period under the Company’s Dividend Reinvestment and Direct Stock Purchase Plan (DRIP) and will also be paid in stock at the end of the period.  Restricted stock is issued in the name of the participant; consequently, the participant will have the right to vote the restricted stock during the period.

Performance shares will be paid with a combination of cash sufficient, in combination with the cash dividend equivalents, to satisfy withholding taxes, with the remainder of the payment in shares of Company common stock, unless otherwise determined by the Committee.  Dividend equivalents over the performance period will be calculated on the actual number of performance shares earned and paid in cash.

Earned performance share awards will be payable to each participant as soon as practicable after the end of the performance period, subject to Committee verification of performance.  To the extent practicable, performance share payments shall occur during an “open window” period.

Additional Terms and Conditions

All awards will be subject to additional requirements and conditions, including, but not limited to, provisions relating to applicable tax withholding, potential recoupment of compensation in the event of financial error, accounting misstatements or accounting restatements, or any other requirements, terms or conditions set forth in the applicable award agreement.

Administration

The Committee has the full power and authority to administer, and interpret the provisions of, the Plan.  The Committee has the power and authority to add, delete and modify the provisions of this document at any time.  This document does not replace or change the provisions or terms of the Plan; in the event of conflicts between this document and the Plan, the Plan is controlling.

Adopted by the independent members of

the Board of Directors on February 7, 2012

By:______________________________

Robert H. West, Lead Director

Appendix

2012 – 2014 Performance Criteria

	
Objective

	
Weighting

(Percent)

	
Threshold

(50%)

	
Target

(100%)

	
Stretch

(150%)

	
Superior

(200%)

	  
	  	  	  	  	  	  
	
1.2014 FFO to Total Adjusted Debt 1

	
50%

	
15.5%

	
16.5%

	
18.0%

	
19.5%

	  	  	  	  	  	  	  
	
2.Total Shareholder Return (TSR) versus EEI Index 2

	
50%

	  	
See Below

	  	  

  

1 S&P calculation of FFO to total adjusted debt. This is a financial measure that is not calculated in accordance with generally accepted accounting principles ("GAAP").

  

2 TSR is compared to an industry peer group of the Edison Electric Institute (EEI) index of electric companies during the three-year measurement period from 2012-2014. At the end of the three-year measurement period, the Company will assess its total shareholder return compared to the EEI index. Depending on how the Company ranks, the executive will receive a percentage of the performance share grants according to the following table:

 

	
Percentile Rank

	
Payout Amount

(Percent of Target)

	  	  
	
75th and above

	
200%

	
60th to 74th

	
150%

	
40th to 59th

	
100%

	
25th to 39th

	
50%

	
24th and below

	
0%ex10_4.htm

Exhibit 10.4

Great Plains Energy Incorporated

Kansas City Power & Light Company

KCP&L Greater Missouri Operations Company

Annual Incentive Plan

Amended effective as of January 1, 2012

Objective

The Great Plains Energy Incorporated (“Great Plains Energy” or the “Company”), Kansas City Power & Light Company (“KCP&L”), and Greater Missouri Operations Company (“GMO”) Annual Incentive Plan (“Plan”) is designed to motivate and reward senior management to achieve specific key financial and business goals and to also reward individual performance.  By providing market-competitive target awards, the Plan supports the attraction and retention of senior executive talent critical to achieving Great Plains Energy’s strategic business objectives.

Eligible participants shall be those officers of Great Plains Energy, KCP&L and/or GMO (“participants”), as approved by the Compensation and Development Committee (“Committee”) of the Board of Directors.

Awards

Awards are recommended by the Committee and approved by the independent members of the Board of Directors, and set as a percentage of the participant’s base salary.  Percentages will vary based on level of responsibility, market data and internal comparisons.

Plan Year and Incentive Objectives

The fiscal year (“Plan Year”) of the Plan will be the fiscal year beginning on January 1 and ending on December 31.  Within the first 90 days of the Plan Year, the Committee will recommend for approval by the independent members of the Board of Directors specific annual objectives and performance levels that are applicable to each participant.  The amount of an individual participant’s award will be determined based on performance against the specific objectives and performance levels approved by the independent members of the Board of Directors.  Objectives and performance levels for each Plan Year will be fixed for the Plan Year and will be changed only upon the approval of the independent members of the Board of Directors.  Each participant will be provided a copy of the applicable objectives and performance levels within the first 90 days of the year, which will also be attached as an appendix to this document.

Payment of Awards

Earned awards will be payable to each participant after the completion of the Plan Year, following the determination by the Committee of the achievement level for each of the relevant objectives and the date payment will be made.  The awards will be paid, in the sole discretion of the Committee, in cash, Company stock (in the form of "Bonus Shares" under the Company’s Long-Term Incentive Plan, as may be amended or restated), or a combination of cash and stock, except to the extent receipt of payment is properly deferred under the Deferred Compensation Plan.

An award for a person who becomes a participant during a Plan Year will be prorated unless otherwise determined by the Committee.  A participant who retires during a Plan Year will receive a prorated award unless otherwise determined by the Committee.  Prorated awards will be payable in the event of death or disability of the participant.  Proration shall be calculated using the number of months elapsed in the year prior to the event, based on the following conventions: If the event occurs between the first and fifteenth day of a month, it shall be deemed to have occurred on the first of the month; and if the event occurs

 

subsequent to the fifteenth day of a month, it shall be deemed to have occurred on the first day of the following month.  A participant who terminates employment with the Company prior to the date awards are paid shall forfeit all awards unless otherwise determined by the Committee in its sole discretion.

The Company may deduct from the cash portion of the award all applicable withholding and other taxes applicable to the entire award. No Company common stock will be paid under an award until the participant (or the participant’s successor) has paid to the Company the amount that must be withheld under federal, state and local income and employment tax laws or the participant and the Company have made satisfactory provision for the payment of such taxes. As an alternative to making a cash payment to satisfy the applicable withholding taxes, the participant or the participant’s successor may elect to have the Company retain that number of shares (valued at their Fair Market Value, as that term is defined in the Company’s Long-Term Incentive Plan, as may be amended or restated) that would satisfy the applicable withholding taxes, subject to the Committee’s continuing authority to require cash payment notwithstanding participant’s election.

To the extent the participant elects to have shares withheld to cover the applicable minimum withholding requirements, and has not already done so, the participant must complete a withholding election on the form provided by the Corporate Secretary of the Company and return it to the designated person set forth on the form no later than the date specified thereon (which shall in no event be more than thirty days from the grant date of the award).  The participant may elect on such form to deliver additional shares for withholding above the minimum required withholding rate, but not to exceed the participant’s individual marginal tax rate.  To the extent no withholding election is made before the date specified, the participant is required to pay the Company the amount of federal, state and local income and employment tax withholdings by cash or check at the time the participant recognizes income with respect to such shares, or must make other arrangements satisfactory to the Company to satisfy the tax withholding obligations after which the Company will release or deliver, as applicable, to the participant the full number of shares.

The Company will, to the full extent permitted by law, have the discretion based on the particular facts and circumstances, to require that each participant reimburse the Company for all or any portion of any awards if and to the extent the awards reflected the achievement of financial results that were subsequently the subject of a restatement, or the achievement of other objectives that were subsequently found to be inaccurately measured, and a lower award would have occurred based upon the restated financial results or inaccurately measured objectives. The Company may, in its discretion, (i) seek repayment from the participants; (ii) reduce the amount that would otherwise be payable to the participants under current or future awards; (iii) withhold future equity grants or salary increases; (iv) pursue other available legal remedies; or (v) any combination of these actions.  The Company may take such actions against any participant, whether or not such participant engaged in any misconduct or was otherwise at fault with respect to such restatement or inaccurate measurement.  The Company will, however, not seek reimbursement with respect to any awards paid more than three years prior to such restatement or the discovery of inaccurate measurements, as applicable.

Administration

The Committee has the full power and authority to interpret the provisions of the Plan.  The independent members of the Board of Directors have the exclusive right to terminate, modify, change, or alter the plan at any time.

Adopted by the independent members of

the Board of Directors on February 7, 2012

By:______________________________

Robert H. West, Lead Director

  

  

  

Appendix

	
2012 Annual Incentive Plan Objectives and Performance Levels - Officers

	  	
Objectives

	
Weighting

	
2010

Actual

	
2011

Target

	
2011

Actual1

	
2012

Threshold

50%

	
2012

Target

100%

	
2012

Stretch

150%

	
2012

Superior

200%

	
40% of Payout

	
Financial Objectives

	
1a.  Non-fuel O&M (including Wolf Creek)

	
0%

	
$607.8M

	
$627.4M

	
$660.9M

	
Not used for 2012

	
1b. Base Capital Expense

	
0%

	
$273.1M

	
$289.8M

	
$267.7M

	
Not used for 2012

	
1c. Earning Per Share

	
20%

	
$1.53

	
$1.47

	
$1.25

	
$1.20

	
$1.30

	
$1.40

	
$1.45

	
1d. Cash Flow from Operations less Capital Expenditures ($ millions)

	
20%

	
Not used prior to 2012

	
($44)M

	
$0M

	
$35M

	
$71M

	  	
Key Business Objectives

	
40% of Payout

	
2. SAIDI (system-wide reliability in minutes)

	
10%

	
91.62

	
90.95

	
82.97

	
107.0

	
90.95

	
86.0

	
84.0

	
3a. % Equivalent Availability – coal and nuclear (plant performance)

	
0%

	
              85.0%2

	
83.3%

	
80.0%

	
Not used for 2012

	
3b. % Equivalent Availability (Coal Units, Peak Months Only – June, July, August )

	
5%

	
Not used prior to 2012

	
87.5%

	
88.9%

	
90.3%

	
92.6%

	
3c. % Equivalent Availability (Nuclear only)

	
5%

	
Not used prior to 2012

	
83.2%

	
84.3%

	
84.9%

	
85.5%

	
4. OSHA Incident Rate

	
10%

	
2.99

	
1.99

	
2.20

	
2.26

	
1.88

	
1.60

	
1.41

	
5. JD Power Customer Satisfaction Index – residential customer satisfaction

	
10%

	
Bottom Half Tier 1

	
Top Half Tier 2

	
Top Half Tier 2

	
Bottom Half Tier 2

	
Top Half Tier 2

	
Bottom Half Tier 1

	
Top Half Tier 1

	  	
Individual Performance

	
20% of Payout

	
6. Individual Performance

	
20%

	
N/A

	
N/A

	
N/A

	
Discretionary

	
Discretionary

	
Discretionary

	
Discretionary

	  	  	  	  	  	  	  	  	  	  

  

1 With the adjustment for flooding, the actual performance results for non-fuel O&M and earnings per share were $655.4 million and $1.34 per share, respectively; however, such adjustments had no impact on the payout percentages for each NEO. The adjusted performance result for equivalent availability – coal and nuclear was 81.7 percent, resulting in a payout percentage of 7.0 percent for this operational component. As a result, the adjusted subtotal under the annual incentive plan was 54.9 percent.

2 Excludes Iatan 2.

 

Note: No incentive payment will be made for the 2012 financial objectives if any of the Companies lose their investment grade rating.

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