Exhibit 10

WESTAR ENERGY, INC.

LONG TERM INCENTIVE AND SHARE AWARD PLAN

AS AMENDED AND RESTATED

JANUARY 1, 2011

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WESTAR ENERGY, INC.

LONG TERM INCENTIVE AND SHARE AWARD PLAN

(Originally Effective January 1, 1996)

(Amended and Restated Effective January 1, 2011)

 

 

The Westar Energy, Inc. Long Term Incentive and Share Award Plan (“Plan”) is
amended and restated by Westar Energy, Inc. (“Company”) this 1st day of May,
2008, to be effective January 1, 2011.

WHEREAS, the Plan was originally established by the Company effective January 1,
1996;

WHEREAS, the Plan has been amended by amendments effective June 30,
1999, October 1, 2000, February 9, 2001, March 1, 2008 and January 1, 2009; and

WHEREAS, the Company intends to amend and restate the Plan in order to increase
the number of shares subject to the Plan and to make certain other amendments.

NOW, THEREFORE, the Company hereby amends and restates the Plan as follows:

1.    Purposes.   The purposes of the 1996 Long Term Incentive and Share Award
Plan are to advance the interests of Westar Energy, Inc. and its shareholders by
providing a means to attract, retain, and motivate employees and directors of
the Company and certain of its Subsidiaries and Affiliates upon whose judgment,
initiative and efforts the continued success, growth and development of the
Company is dependent.

2.    Definitions.  For purposes of the Plan, the following terms shall be
defined as set forth below unless a different meaning is plainly required by the
context:

(a)      “Affiliate” means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a participating
employer under the Plan, provided that the Company directly or indirectly owns
at least 50% of the combined voting power of all classes of stock of such entity
or at least 50% of the ownership interests in such entity.

(b)      “Award” means any Option, SAR, Restricted Share, Restricted Share Unit,
Performance Share, Performance Unit, Dividend Equivalent, or Other Share-Based
Award granted to an Eligible Employee under the Plan.

(c)      “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.

(d)      “Beneficiary” means the person, persons, trust or trusts which have
been designated by such Participant in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Participant, or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive
such benefits.

(e)      “Board” means the Board of Directors of the Company.

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(f)      “Code” means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

(g)      “Committee” means the Human Resources Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan;
provided, however, that the Committee shall consist of two or more directors of
the Company, each of whom is a “disinterested person” within the meaning of Rule
16b-3 under the Exchange Act and an “outside director” within the meaning of
Section 162(m)(4)(c) of the Code.

(h)      “Company” means Westar Energy, Inc., a corporation organized under the
laws of the state of Kansas, or any successor corporation.

(i)      “Director” means a non-employee member of the Board.

(j)      “Director’s Share” means a share granted to a Director under Section 7.

(k)      “Dividend Equivalent” means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis pursuant to the 2005 Deferred Compensation
Plan, if applicable.

(l)      “Eligible Employee” means an employee of the Company or its
Subsidiaries and Affiliates, including any director who is an employee, who is
responsible for or contributes to the management, growth and/or profitability of
the business of the Company, its Subsidiaries or Affiliates.

(m)      “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.

(n)      “Fair Market Value” means, with respect to Shares or other property,
the fair market value of such Shares or other property determined by such
methods or procedures as shall be established from time to time by the
Committee. If the shares are listed on any established stock exchange or on a
national market system, unless otherwise determined by the Committee in good
faith, the Fair Market Value of Shares shall mean the mean between the high and
low selling prices per Share on the immediately preceding date (or, if the
Shares were not traded on that day, the next preceding day that the Shares were
traded) on the principal exchange on which the Shares are traded, as such prices
are officially quoted on such exchange.

(o)      “ISO” means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.

(p)      “NQSO” means any Option that is not an ISO.

(q)      “Option” means a right, granted under Section 5(b), to purchase Shares.

(r)      “Other Share-Based Award” means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.

 

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(s)      “Participant” means an Eligible Employee or Director who has been
granted an Award or Director’s Shares under the Plan.

(t)      “Performance Share” means a performance share granted under
Section 5(f).

(u)      “Performance Unit” means a performance unit granted under Section 5(f).

(v)      “Plan” means this 1996 Long Term Incentive and Share Award Plan.

(w)      “Restricted Shares” means an Award of Shares under Section 5(d) that
may be subject to certain restrictions and to a risk of forfeiture.

(x)      “Restricted Share Unit” means a right granted under Section 5(e), to
receive Shares or cash at the end of a specified restricted period.

(y)      “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

(z)      “SAR” or “Share Appreciation Right” means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

(aa)    “Shares” means common stock, $5.00 par value per share, of the Company.

(bb)    “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 100% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

(cc)    “2005 Deferred Compensation Plan” means the Westar Energy, Inc. 2005
Deferred Compensation Plan, a copy of which is attached as Exhibit A and
incorporated herein.

3.    Administration.

(a)    Authority of the Committee.  Except as provided in subsection (e) of this
Section 3, the Plan shall be administered by the Committee, and the Committee
shall have full and final authority to take the following actions, in each case
subject to and consistent with the provisions of the Plan:

 

  (i) to select Eligible Employees to whom Awards may be granted;

 

  (ii) to designate Affiliates;

 

  (iii) to determine the type or types of Awards to be granted to each Eligible
Employee;

 

  (iv)

to determine the type and number of Awards to be granted, the number of Shares
to which an Award may relate, the terms and conditions of any Award granted
under the Plan (including, but not limited to, any exercise price, grant price,
or purchase price, and any bases for adjusting such exercise, grant or purchase
price, any restriction or condition, any schedule for lapse of restrictions or
conditions relating to transferability or forfeiture, exercisability, or
settlement of an Award,

 

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and waiver or accelerations thereof, and waivers of performance conditions
relating to an Award, based in each case on such considerations as the Committee
shall determine), and all other matters to be determined in connection with an
Award;

 

  (v) to determine whether, to what extent, and under what circumstances an
Award may be settled, or the exercise price of an Award may be paid, in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
exchanged, or surrendered;

 

  (vi) [reserved]

 

  (vii) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;

 

  (viii) to adopt, amend, suspend, waive, and rescind such rules and regulations
and appoint such agents as the Committee may deem necessary or advisable to
administer the Plan;

 

  (ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder,

 

  (x) to accelerate the exercisability or vesting of all or any portion of any
Award or to extend the period during which an Award is exercisable; and

 

  (xi) to make all other decisions and determinations as may be required under
the terms of the Plan or as the Committee may deem necessary or advisable for
the administration of the Plan.

 

(b)      Mannerof Exercise of Committee Authority.  The Committee shall have
sole discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible
Employees, any person claiming any rights under the Plan from or through any
Eligible Employee, and shareholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to officers or managers of the Company or any Subsidiary or Affiliate
the authority, subject to such terms as the Committee shall determine, to
perform administrative functions and, with respect to Awards granted to persons
not subject to Section 16 of the Exchange Act, to perform such other functions
as the Committee may determine, to the extent permitted under Rule 16b-3 (if
applicable) and applicable law.

 

(c)      Limitationof Liability.  Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him or her by any officer or other employee of the Company or any Subsidiary or
Affiliate, the Company’s independent certified public accountants, or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Committee, nor any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.

 

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(d)    Limitation on Committee’s Discretion.  Anything in this Plan to the
contrary notwithstanding, in the case of any Award which is intended to qualify
as “performance-based compensation” within the meaning of Section 162(m)(4)(C)
of the Code, the Committee shall have no discretion to increase the amount of
compensation payable under the Award to the extent such an increase would cause
the Award to lose its qualification as such performance-based compensation.

(e)    Administration of Directors’ Portion.  Anything in this Plan to the
contrary notwithstanding, the portion of this Plan relating to Directors shall
be administrated by the full board. Since grants to Directors are either
automatic or based on the elections of Directors, this function will be limited
to interpretation and general administrative oversight.

4.     Shares Subject to the Plan.

(a) Subject to adjustment as provided in Section 4(c) hereof, the total number
of Shares reserved for issuance in connection with Awards and Director’s Shares
under the Plan shall be 8,250,000. No Award or Director’s Shares may be granted
if the number of Shares to which such Award or Director’s Share relates, when
added to the number of Shares previously issued under the Plan, exceeds the
number of Shares reserved under the preceding sentence. If any Awards or
Director’s Shares are forfeited, canceled, terminated, exchanged or surrendered
or such Award or Director’s Shares is settled in cash or otherwise terminates
without a distribution of Shares to the Participant, any Shares counted against
the number of Shares reserved and available under the Plan with respect to such
Award or Director’s Shares shall, to the extent of any such forfeiture,
settlement, termination, cancellation, exchange or surrender, again be available
for Awards or Director’s Shares under the Plan. Upon the exercise of any Award
granted in tandem with any other Awards, such related Awards shall be canceled
to the extent of the number of Shares as to which the Award is exercised.
Subject to adjustment as provided in Section 4(c) hereof, the maximum number of
Shares with respect to which Options or SARs may be granted during a calendar
year to any Eligible Employee under this Plan shall be 350,000 Shares or with
respect to Performance Shares, Performance Units, Restricted Shares and
Restricted Share Units intended to qualify as performance-based compensation
within the meaning of Section 162(m)(4)(C) of the Code, the equivalent of
1,000,000 shares during a calendar year to any Eligible Employee, without
respect to associated dividend equivalents. To the extent that any cash award
made pursuant to Section 5(h) does not otherwise constitute a share-based award
subject to the foregoing 1,000,000 share per calendar year limitation, in no
event shall such cash award exceed 500% of the Eligible Employee’s base salary
(up to a maximum base salary of $2,000,000) as of the first day of such calendar
year (or, if later, as of the date on which the Eligible Employee becomes an
employee of the Company or a subsidiary thereof); provided, however, that if the
Performance Period applicable to such cash award exceeds twelve months, the 500%
limit shall apply to each 12-month period in the Performance Period.

(b) Any Shares distributed pursuant to an Award or Director’s Shares may
consist, in whole or in part, of authorized and unissued Shares, treasury Shares
or Shares acquired by purchase in the open market or in private transactions.

(c) In the event that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Employees under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect of
outstanding Awards, and (iii) the exercise price, grant price, or purchase price
relating to any Award; provided, however, in each case that, with

 

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respect to ISOs, such adjustment shall be made in accordance with Section 424(h)
of the Code, unless the Committee determines otherwise. In addition, the
Committee is authorized to make adjustments in the terms and conditions of, and
the criteria and performance objectives included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events described
in the preceding sentence) affecting the Company or any Subsidiary or Affiliate
or the financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles;
provided, however, that, if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as performance-based compensation for purposes of
Section 162(m)(4)(C) of the Code and the regulations thereunder.

(d) Anything in this Plan to the contrary notwithstanding, except in connection
with a corporate transaction involving the Company or any Subsidiary or
Affiliate (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), in no
event may the Committee (i) grant Options or SARs in replacement of Options or
SARs previously granted under this Plan or any other compensation plan of the
Company, or amend outstanding Options or SARs (including amendments to adjust an
exercise price), in each case with a lower exercise price than that of the
replaced or outstanding Option or SAR, (ii) cancel outstanding Options or SARs
in exchange for a cash payment or for a grant of replacement Options or SARs or
(iii) engage in any transaction that would be deemed a repricing under the
applicable rules of the New York Stock Exchange or other governing body, in each
case (i), (ii) or (iii) without first obtaining the approval of the Company’s
shareholders.

5.    Specific Terms of Awards.

(a)     General.  Awards may be granted on the terms and conditions set forth in
this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms regarding forfeiture
of Awards or continued exercisability of Awards in the event of termination of
employment by the Eligible Employee.

(b)     Options.  The Committee is authorized to grant Options, which may be
NQSOs or ISOs, to Eligible Employees on the following terms and conditions:

 

  (i)   Exercise Price. The exercise price per Share purchasable under an Option
shall be determined by the Committee, and the Committee may, without limitation,
set an exercise price that is based upon achievement of performance criteria if
deemed appropriate by the Committee.

 

  (ii)   Time and Method of Exercise. The Committee shall determine at the date
of grant or thereafter the time or times at which an Option may be exercised in
whole or in part (including, without limitation, upon achievement of performance
criteria if deemed appropriate by the Committee), the methods by which such
exercise price may be paid or deemed to be paid (including, without limitation,
broker-assisted exercise arrangements), the form of such payment (including,
without limitation, cash, Shares, notes or other property), and the methods by
which Shares will be delivered or deemed to be delivered to Eligible Employees.

 

  (iii)   ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, including but not
limited to the requirement that the ISO shall be granted within ten years from
the earlier of the date of adoption or shareholder approval of the Plan.

 

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(c)  SARs.  The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Employees on the following terms and conditions:

 

  (i) Right to Payment. An SAR shall confer on the Eligible Employee to whom it
is granted a right to receive with respect to each Share subject thereto, upon
exercise thereof, the excess of (1) the Fair Market value of one Share on the
date of exercise (or if the Committee shall so determine in the case of any such
right, the Fair Market Value of one Share at any time during a specified period
before or after the date of exercise) over (2) the exercise price of the SAR as
determined by the Committee as of the date of grant of the SAR (which, in the
case of an SAR granted in tandem with an Option, shall be equal to the exercise
price of the underlying Option).

 

  (ii) Other Terms. The Committee shall determine, at the time of grant or
thereafter, the time or times at which an SAR may be exercised in whole or in
part, the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Employees, whether or not an SAR shall be in tandem with
any other Award, and any other terms and conditions of any SAR. Unless the
Committee determines otherwise, a SAR (1) granted in tandem with an NQSO may be
granted at the time of grant of the related NQSO or at any time thereafter, and
(2) granted in tandem with an ISO may only be granted at the time of grant of
the related ISO.

(d)  Restricted Shares.  The Committee is authorized to grant Restricted Shares
to Eligible Employees on the following terms and conditions:

 

  (i) Issuance and Restrictions. Restricted Shares shall be subject to such
restrictions on transferability and other restrictions, if any, as the Committee
may impose at the date of grant or thereafter, which restrictions may lapse
separately or in combination at such times, under such circumstances (including,
without limitation, upon achievement of performance criteria if deemed
appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award
Agreement relating to the Restricted Shares, an Eligible Employee granted
Restricted Shares shall have all of the rights of a shareholder including,
without limitation, the right to vote Restricted Shares and the right to receive
dividends thereon. The Committee must certify in writing prior to the lapse of
restrictions conditioned on achievement of performance criteria that such
performance criteria were in fact satisfied. If the lapse of restrictions is
conditioned on the achievement of performance criteria, the Committee shall
select the criterion or criteria from the list of criteria set forth in
Section 5(f)(i).

 

  (ii)

Forfeiture. Except as otherwise determined by the Committee, at the date of
grant or thereafter, upon termination of employment during the applicable
restriction period, Restricted Shares and any accrued but unpaid dividends or
Dividend Equivalents that are at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may provide, by rule or

 

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regulation or in any Award Agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Shares will be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Shares.

 

  (iii) Certificates for Shares. Restricted Shares granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Shares are registered in the name of the Eligible
Employee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Shares, and
the Company shall retain physical possession of the certificate.

 

  (iv) Dividends. Dividends paid on Restricted Shares shall be either paid at
the dividend payment date or deferred for payment pursuant to the 2005 Deferred
Compensation Plan, if applicable, in cash or in unrestricted Shares having a
Fair Market Value equal to the amount of such dividends. Shares distributed in
connection with a Share split or dividend in Shares, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to which
such Shares or other property has been distributed.

(e)  Restricted Share Units.  The Committee is authorized to grant Restricted
Share Units to Eligible Employees, subject to the following terms and
conditions:

 

  (i) Award and Restrictions. Delivery of Shares or cash, as the case may be,
will occur not later than sixty (60) days after expiration of the restricted
period specified for Restricted Share Units by the Committee (or, if permitted
by the Committee, as elected by the Eligible Employee) or deferred for payment
pursuant to the 2005 Deferred Compensation Plan, if applicable. In addition,
Restricted Share Units shall be subject to such restrictions as the Committee
may impose, if any (including, without limitation, the achievement of
performance criteria if deemed appropriate by the Committee), at the date of
grant or thereafter, which restrictions may lapse at the expiration of the
restricted period or at earlier or later specified times, separately or in
combination, in installments or otherwise, as the Committee may determine. The
Committee must certify in writing prior to the lapse of restrictions conditioned
on the achievement of performance criteria that such criteria were in fact
satisfied. If the lapse of restrictions is conditioned on the achievement of
performance criteria, the Committee shall select the criterion or criteria from
the list of criteria set forth in Section 5(f)(i).

 

  (ii)

Forfeiture. Except as otherwise determined by the Committee, at the date of
grant or thereafter, upon termination of employment (as determined under
criteria established by the Committee) during the applicable restricted period
or portion thereof to which forfeiture conditions apply (as provided in the
Award Agreement evidencing the Restricted Share Units), or upon failure to
satisfy any other conditions precedent to the delivery of Shares or cash to
which such Restricted Share Units relate, all Restricted Share Units that are at
that time subject to deferral or restriction shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any Award
Agreement, or

 

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may determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in part, in the
event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted Share Units.

(f)  Performance Shares and Performance Units.  The Committee is authorized to
grant Performance Shares or Performance Units or both to Eligible Employees on
the following terms and conditions:

 

  (i) Performance Period and Criteria. The Committee shall determine a
performance period (the “Performance Period”) of one or more years and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Employee to
Eligible Employee and shall be based upon such one or more of the following
performance criteria as the Committee may deem appropriate: total shareholder
return, earnings per share, operating income, net income, pro forma net income,
return on shareholders’ equity, return on designated assets, shareholder value
added, revenues, capital gains, expenses, operating profit margin, operating
cash flow, net profit margin, and achievement of operational strategies in terms
of control of accidents, lost time and customer satisfaction. The performance
objectives may be determined by reference to the performance of the Company, or
of a Subsidiary or Affiliate, or of a division or unit of any of the foregoing.

 

  (ii) Award Value. At the beginning of a Performance Period, the Committee
shall determine for each Eligible Employee or group of Eligible Employees with
respect to that Performance Period the range of number of Shares, if any, in the
case of Performance Shares, and the range of dollar values, if any, in the case
of Performance Units, which may be fixed or may vary in accordance with such
performance or other criteria specified by the Committee, which shall be paid to
an Eligible Employee as an Award if the relevant measure of Company performance
for the Performance Period is met.

 

  (iii) Significant Events. If during the course of a Performance Period there
shall occur significant events as determined by the Committee which the
Committee expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided, however, that,
if an Award Agreement so provides, the Committee shall not have any discretion
to increase the amount of compensation payable under the Award to the extent
such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.

 

  (iv) Forfeiture. Except as otherwise determined by the Committee, at the date
of grant or thereafter, upon termination of employment during the applicable
Performance Period, Performance Shares and Performance Units for which the
Performance Period was prescribed shall be forfeited; provided, however, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in an individual case, that restrictions or forfeiture conditions
relating to Performance Shares and Performance Units will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Performance Shares and Performance Units.

 

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  (v) Payment. Each Performance Share or Performance Unit may be paid in whole
Shares, or cash, or a combination of Shares and cash either as a lump sum
payment or in installments, all as the Committee shall determine, at the time of
grant of the Performance Share or Performance Unit or otherwise, commencing not
later than sixty (60) days after the end of the relevant Performance Period. The
Committee must certify in writing prior to payment of any Performance Share or
Performance Unit that the performance objectives and any other material items
were in fact satisfied.

(g)  Dividend Equivalents.  The Committee is authorized to grant Dividend
Equivalents to Eligible Employees. The Committee may provide, at the date of
grant or thereafter, that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents) shall be subject to
all conditions and restrictions of the underlying Awards to which they relate.

(h)  Other Share-Based Awards.  The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Employees such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a “bonus” and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).

6.    Certain Provisions Applicable to Awards.

  (a)    Stand Alone, Additional, Tandem and Substitute Awards.  Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Employees either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Employee to receive payment from
the Company or any Subsidiary or Affiliate. Awards may be granted in addition to
or in tandem with such other Awards or awards, and may be granted either at the
same time as or a different time from the grant of such other Awards or awards.
Subject to Section 4(d), the per Share exercise price of any Option, grant price
of any SAR, or purchase price of any other Award conferring a right to purchase
Shares which is granted, in connection with the substitution of awards granted
under any other plan or agreement of the Company or any Subsidiary or Affiliate
or any business entity to be acquired by the Company or any Subsidiary or
Affiliate shall be determined by the Committee, in its discretion.

 

10

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  (b)  Terms of Awards.  The term of each Award granted to an Eligible Employee
shall be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any ISO or an SAR granted in tandem
therewith exceed a period of ten years from the date of its grant (or such
shorter period as may be applicable under Section 422 of the Code).

  (c)  Form of Payment Under Awards.  Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award may be made in
such forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Shares, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis
pursuant to the 2005 Deferred Compensation Plan, if applicable.

  (d)  Nontransferability.  Unless otherwise set forth by the Committee in an
Award Agreement, Awards (except for vested shares) shall not be transferable by
an Eligible Employee except by will or the laws of descent and distribution
(except pursuant to a Beneficiary designation) and shall be exercisable during
the lifetime of an Eligible Employee only by such Eligible Employee or his
guardian or legal representative. An Eligible Employee’s rights under the Plan
may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall
not be subject to claims of the Eligible Employees creditors.

7.    Directors’ Fees.

  (a)  Grant of Shares and Other Awards.  Each Director Participant shall
receive such portion of his/her Director fees in such number of Shares and/or in
such number and type of other Awards as shall be established from time to time
by the Board by grants made pursuant to this Plan, with the remainder of such
Director fees to be payable in cash or in Shares as elected by the Director
Participant in accordance with Section 7(b) below. The Board shall have the same
authority to establish the terms and conditions of any Awards granted pursuant
to this Section 7(a) as the Committee has with respect to Awards granted under
Section 5 of the Plan. Any Awards granted pursuant to this Section 7(a) shall be
considered Awards for all purposes of this Plan (notwithstanding that they are
granted to Directors rather than Eligible Employees) except that the Board shall
exercise all powers otherwise exercisable by the Committee with respect to such
Awards.

  (b)  Election to Determine Percentage or Amount of Compensation to be Paid in
Stock.  Each Director Participant shall have an opportunity to elect to have the
remaining portion of his/her Director fees paid in cash or shares, or a
combination thereof. Except for the initial election following adoption of the
plan or the Director’s election to the Board, any such election shall be made in
writing and must be made at least six months before the services are rendered
giving rise to such compensation, and may not be changed thereafter except as to
compensation for services rendered at least six months after any such election
to change is made in writing. In the absence of such an election, such remaining
portion of the Director’s fees shall be paid entirely in cash. Nothing contained
in this Section 7(b) shall be interpreted in such a manner as would disqualify
the Plan from treatment as a “formula plan” under Rule 16b-3.

  (c)  Amount and Date of Payment for Stock Compensation.

 

   (i)

For any Plan Year in which a Director is a Participant for the full Plan Year,
any Stock compensation due a Director Participant pursuant to Sections 7(a)
shall be payable at the beginning of such plan year, and with respect to
Section 7(b) above shall be payable on a quarterly basis, with the first such
quarterly distribution being made on April 1 and succeeding quarterly
distributions being made on July 1, October 1, and January 1. The amount of
stock to be distributed

 

11

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to a Director Participant shall be determined by dividing the Director
Participant’s required and elected dollar amount of stock compensation by the
Fair Market Value of the Shares.\

 

  (ii) Notwithstanding the foregoing, for purposes of the 1996 Plan Year, no
stock distributions shall be made prior to receipt of all requisite approvals;
provided, however, that once the requisite approvals of the Plan are received,
the stock distributions shall be made as soon as practicable thereafter and
shall include any stock distributions which would have been made had the
requisite approvals been obtained on the Effective Date. The stock distributions
to be made in accordance with this Section 7(c)(2) shall be valued in accordance
with the provisions of Section 7(c)(1).

8.     Change of Control Provisions.

 

      (a)   Acceleration of Exercisability and Lapse of Restrictions; Cash-Out
of Awards. In the event of a Change of Control, the following acceleration and
cash-out provisions shall apply unless otherwise provided by the Committee at
the time of the Award grant.

 

     (i) All outstanding Awards pursuant to which the Participant may have
rights the exercise of which is restricted or limited, shall become fully
exercisable; unless the right to lapse of restrictions or limitations is waived
by a Participant prior to such lapse, all restrictions or limitations (including
risks of forfeiture) on outstanding Awards subject to restrictions or
limitations under the Plan shall lapse; and all performance criteria and other
conditions to payment of Awards under which payments of cash, Shares or other
property are subject to conditions shall be deemed to be achieved or fulfilled
and shall be waived by the Company.

 

     (ii) For a period of up to 60 days following a Change in Control, the
Participant may elect to surrender any outstanding Award and to receive, in full
satisfaction therefor, a cash payment equal to the value of such Award
calculated on the basis of the Change of Control Price of any Shares or the Fair
Market Value of any property other than Shares relating to such Award; provided,
however, that in the case of an Incentive Stock Option, or a Stock Appreciation
Right granted in tandem therewith, the cash payment shall be based upon the Fair
Market Value of Shares on the date of exercise. In the event that an Award is
granted in tandem with another Award such that the Participant’s right to
payment for such Award is an alternative to payment of another Award, the
Participant electing to surrender any such tandem Award shall surrender all
alternative Awards related thereto and receive payment for the Award which
produces the highest payment to the Participant. Except as provided in
Section 8(a)(iii), in no event will an Award be surrendered or a Participant
have the right to receive cash under this Section 8(a)(ii) with respect to an
Award if the Participant is subject to Section 16 of the Exchange Act and at
least six months shall not have elapsed from the date on which the Participant
was granted the Award before the date of the Change of Control (unless this
restriction is not at such time required under Rule 16b-3).

 

     (iii)

In the event that any Award is subject to limitations under Section 8(a)(ii) at
the time of a Change of Control, then, solely for the purpose of determining the
rights of the Participant with respect to such Award, a Change of Control shall
be

 

12

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deemed to occur at the close of business on the first business day following the
date on which the Award could be sold without liability under Section 16 of the
Exchange Act.

(b)    Definitions of Certain Terms.  For purposes of this Section 8, the
following definitions, in addition to those set forth in Section 2, shall apply:

(i)    “Change of Control” means the occurrence of any one of the following
events:

 

  (1) 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;

 

  (2) 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 (2) shall not be deemed to be a Change of 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, or (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (3));

 

  (3)

the consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company (a ‘Business Combination’),
unless immediately following 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

 

13

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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

 

  (4) the consummation of a plan of complete liquidation or dissolution of the
Company or a sale of all or substantially all of the Company’s assets.

 

    For purposes of this definition, ‘subsidiary’ shall mean 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% or more of the assets
upon liquidation or dissolution.

 

  (ii) “Change of Control Price” means, with respect to a Share, the higher of
(a) the highest reported sales price of Shares on the New York Stock Exchange
during the 30 calendar days preceding a Change of Control, or (b) the highest
price paid or offered in a transaction which either (i) results in a Change of
Control, or (ii) would be consummated but for another transaction which results
in a Change of Control and, if it were consummated, would result in a Change of
Control. With respect to clause (b) in the preceding sentence, the “price paid
or offered” will be equal to the sum of (i) the face amount of any portion of
the consideration consisting of cash or cash equivalents and (ii) the fair
market value of any portion of the consideration consisting of real or personal
property other than cash or cash equivalents, as established by an independent
appraiser selected by the Committee.

 

  (iii) “Related Party” means (a) a wholly-owned subsidiary of the Company; or
(b) an employee or group of employees of the Company or any wholly-owned
subsidiary of the Company; or (c) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any wholly-owned
subsidiary of the Company; or (d) a corporation owned directly or indirectly by
the shareholders of the Company in substantially the same proportion as their
ownership of Voting Securities.

 

  (iv) “Voting Securities or Security” means any securities of the Company which
carry the right to vote generally in the election of directors.

9.    General Provisions.

  (a)    Compliance with Legal and Trading Requirements.  The Plan, the granting
and exercising of Awards or Director’s Shares thereunder, and the other
obligations of the Company under the Plan and

 

14

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any Award Agreement, shall be subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency as may be required. The Company, in its discretion, may postpone the
issuance or delivery of Shares under any Award or Director’s Share until
completion of such stock exchange or market system listing or registration or
qualification of such Shares or other required action under any state or federal
law, rule or regulation as the Company may consider appropriate, and may require
any Participant to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of Shares
in compliance with applicable laws, rules and regulations. No provisions of the
Plan shall be interpreted or construed to obligate the Company to register any
Shares under federal or state law.

(b)    No Right to Continued Employment or Service.  Neither the plan nor any
action taken thereunder shall be construed as giving any employee or director
the right to be retained in the employ or service of the Company or any or any
of its Subsidiaries or Affiliates, nor shall it interfere in any way with the
right of the Company or any of its Subsidiaries or Affiliates to terminate any
employee’s or director’s employment or service at any time.

(c)    Taxes.  The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Employee, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and Eligible
Employees to satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Employee’s tax obligations.

(d)    Changes to the Plan and Awards.  The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company’s shareholders to the extent such shareholder approval is required
(i) in order to insure that Awards granted under the Plan are exempt under Rule
16b-3 or (ii) under Section 422 of the Code; provided, however, that, without
the consent of an affected Participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may impair the rights or, in any
other manner, adversely affect the rights of such Participant under any Award or
Director’s Shares theretofore granted to him or her. Notwithstanding the other
provisions of this paragraph, Section 7 and the other provisions of this Plan
applicable to Director’s Shares may not be amended more than once every six
months other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder.

(e)    No Rights to Awards; No Shareholder Rights.  No Eligible Employee or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Employees and
employees. No Award shall confer on any Eligible Employee any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Employee in accordance with the terms of the Award.

(f)    Unfunded Status of Awards.  The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award or Director’s Shares, nothing
contained in the Plan or any Award or Director’s Share shall give any such
Participant any rights that are greater than those of a general creditor of the
Company; provided, however, that the Committee may authorize the creation of
trusts or make other arrangements to meet the Company’s obligations under the
Plan to deliver cash, Shares, other Awards, or other property pursuant to any
Award, which trusts or other arrangements shall be consistent with the
“unfunded” status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant.

 

15

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(g)    Nonexclusivity of the Plan.  Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.

(h)    Not Compensation for Benefit Plans.  No Award payable under this Plan
shall be deemed salary or compensation for the purpose of computing benefits
under any benefit plan or other arrangement of the Company for the benefit of
its employees or directors unless the Company shall determine otherwise.

(i)    No Fractional Shares.  No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award or Director’s Option. Cash shall be paid in
lieu of such fractional shares.

(j)    Governing Law.  The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of Kansas without giving effect to
principles of conflict of laws.

(k)    Effective Date; Plan Termination.  The Plan shall become effective as of
January 1, 1996, (the “Effective Date”) upon approval by the affirmative votes
of the holders of a majority of voting securities of the Company voting upon the
adoption of the plan. The Plan shall terminate as to future awards on June 30,
2019.

(l)    Titles and Headings.  The titles and headings of the sections in the Plan
are for convenience of reference only. In the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.

IN WITNESS WHEREOF, the Company hereby adopts the foregoing amended and restated
Long Term Incentive and Share Award Plan the date first above written, to be
effective January 1, 2011.

 

    WESTAR ENERGY, INC.    

 

    Mark A. Ruelle     Executive Vice President and     Chief Financial Officer

 

    Dated    

 

16

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ATTACHMENT A

Westar Energy, Inc.

2005 Deferred Compensation Plan

January 1, 2005

--------------------------------------------------------------------------------

WESTAR ENERGY, INC.

2005 DEFERRED COMPENSATION PLAN

The WESTAR ENERGY, INC. 2005 DEFERRED COMPENSATION PLAN (“Plan”) is adopted
effective January 1, 2005. The Plan is established and maintained by WESTAR
ENERGY, INC. solely for the purpose of permitting certain of its senior
management employees to defer a portion of their base salary, bonus and
incentive compensation from current income taxation and receive such deferred
amounts at a future date.

Accordingly, WESTAR ENERGY, INC. hereby adopts the Plan pursuant to the terms
and provisions set forth below:

ARTICLE I

DEFINITIONS

Wherever used herein the following terms shall have the meanings hereinafter set
forth:

1.1      “Account” means the account maintained by Company under Plan for a
Participant that is credited with amounts contributed under Section 3.1 of Plan
and any gains and losses on such amounts as required to be credited or debited
by Article IV. A Participant’s Account shall contain subaccounts, if applicable,
as follows: (1) Cash Deferral Account and (2) Stock Deferral Account.

1.2      “Beneficiary” means the person or persons designated by a Participant,
on a form made available by Committee for such purpose (a copy of which is
attached hereto as Exhibit A) to receive any amounts credited to a Participant’s
Account under this Plan that remain undistributed at Participant’s death.

1.3      “Board” means the Board of Directors of Company.

“Cash Deferral Account” means the subaccount established and maintained by the
Company for specified deferrals of cash compensation by a Participant, as
described in Article III. A Cash Deferral Account will be maintained solely as a
bookkeeping entry by Company to evidence unfunded obligations of Company.

1.4      “Change of Control Event” means any one of events (a), (b) or (c):

  (a)        Change in the Ownership of Company.

  Any one person, or more than one person acting as a group (as defined below in
(d)) acquires ownership of stock of Company that, together with stock held by
such person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of Company.

  (b)        Change in the Effective Control of Company.

  Either (i) any one person, or more than one person acting as a group (as
defined below in (d)), acquire (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of Company possessing 35 percent or more of the total voting
power of the stock of Company; or (ii) a majority of members of

--------------------------------------------------------------------------------

Company’s Board is replaced during any 12-month period by directors whose
apportionment or election is not endorsed by a majority of the members of
Company’s Board prior to the date of the appointment or election.

  (c)        Change in the Ownership of a Substantial Portion of Company’s
Assets.

  Any one person, or more than one person acting as a group (as defined below in
(d)), acquires (or has acquired during the 12-month period ending on the date of
the most recent acquisition by such person or persons) assets from Company that
have a total gross fair market value (“gross fair market value” means the value
of the assets of Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets) equal
to or more than 40 percent of the total gross fair market value of all of the
assets of Company immediately prior to such acquisition or acquisitions.

  (d)        Persons Acting as a Group.

  Persons will not be considered to be acting as a group solely because they
purchase or own stock, or purchase assets, of the same corporation at the same
time, or as a result of the same public offering. However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock or assets,
or similar business transaction with the corporation. If a person, including an
entity or entity shareholder, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock or assets, or similar
transaction, such shareholder is considered to be acting as a group with other
shareholders in a corporation (only with respect to the ownership in that
corporation in the case of a change in the Effective Control of a Company or
only to the extent of the ownership in that corporation in the case of a Change
in the Ownership of a Substantial Portion of a Company’s Assets) prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

1.6      “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations relating thereto.

1.7      “Committee” means the Nominating and Corporate Governance Committee of
the Board to administer Plan. The Committee shall be the Plan Administrator.

1.8      “Company” means WESTAR ENERGY, INC., a Kansas corporation, and any
affiliated company which Westar Energy, Inc. authorizes to be a participating
employer hereunder.

1.9      “Compensation” means the aggregate compensation paid to a Participant
by Company during a Plan Year, including salary, commissions, bonuses, Incentive
Compensation and all other items that constitute wages within the meaning of
Code Section 3401(a) or are required to be reported under Code Sections 6041(d),
6051(a)(3) or 6052. Compensation also includes Compensation Reduction
Contributions under this Plan and any elective deferrals under cash-or-deferred
arrangements or cafeteria plans that are not includable in gross income by
reason of Code Section 125 or Code Section 402(e)(3), but does not include any
other amounts contributed pursuant to, or received under, Plan or any other plan
of deferred compensation. Compensation excludes all compensatory income received
by a participant with respect to the exercise of stock options or the delivery
of option shares following the exercise of such options, compensatory income
attributable to the vesting of restricted stock granted to a Participant under
Company’s compensatory stock plan, relocation reimbursements paid by Company,
and automobile allowances.

 

2

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1.10      “Compensation Reduction Agreement” means the written compensation
reduction agreement entered into by a Participant with Company in the form
attached hereto as Exhibit A in any Plan Year.

1.11      “Disability” means a Participant (a) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (b) is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than 3 months under an accident and health plan covering employees of
Company.

1.12      “Dividend Equivalents” has the meaning given in Section 4.2 hereof.

1.13      “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations relating thereto.

1.14      “Incentive Compensation” means any payment under the Westar Energy,
Inc. Long Term Incentive and Share Award Plan.

1.15      “Participant” means an employee of Company who is designated by the
Board as being one of a select group of management or highly compensated
employees within the meaning of Sections 201, 301 and 401 of the Employee
Retirement Income Security Act of 1974 (“ERISA”) with respect to whom
contributions may be made under this Plan.

1.16      “Plan” means the Westar Energy, Inc. 2005 Deferred Compensation Plan.

1.17      “Plan Year” means the calendar year.

1.18      “Prime Rate” means the prime rate of interest in effect on the first
business day of the applicable calendar year as such rate is reported by the
Wall Street Journal (or, if no longer reported by the Wall Street Journal, such
other nationally recognized publication as selected by the Administrator).

1.19      “Separation from Service” means a Participant’s death, retirement or
other termination of employment with Company. A Separation from Service shall
not occur if a Participant is on military leave, sick leave or other bona fide
leave of absence (such as temporary employment by the government) if the period
of such leave does not exceed six months, or if longer, as long as the
Participant has a right (either by contract or by statute) to reemployment with
Company.

1.20      “Stock” means the common stock of Company or such other securities or
rights economically related to the common stock or other capital stock or
securities of Company as may be designated by the Committee, including
restricted shares of Company’s common stock and restricted share units.

1.21      “Stock Deferral Account” means the subaccount established and
maintained by Company for specified deferrals of Stock compensation by a
Participant, as described in Article III. A Stock Deferral Account will be
maintained solely as a bookkeeping entry by Company to evidence unfunded
obligations of Company.

 

3

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1.22      Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.

ARTICLE II

ELIGIBILITY

A senior management employee of Company is eligible to become a Participant in
Plan for a particular Plan Year provided such employee has been designated in
writing as a Participant for such Plan Year by the Board.

ARTICLE III

PLAN CONTRIBUTIONS

3.1      Compensation Reduction Contributions.

  (a)      Any Participant may elect to defer the receipt of a portion of the
Compensation otherwise payable to Participant by Company in any Plan Year. The
amount deferred pursuant to this Section 3.1(a) shall be a Compensation
Reduction Contribution allocated to the Account maintained for the Participant
for such Plan Year which Account shall have the following subaccounts, if
applicable: (1) Cash Deferral Account and (2) Stock Deferral Account.

  (b)      Notwithstanding Section 3.1(a), a Participant may not make
Compensation Reduction Contributions to this Plan during any period for which
contributions must be suspended in accordance with Treasury Regulations
Section 1.401(k)-1(d)(2)(iv)(B)(4) as a condition of such Participant’s receipt
of a hardship withdrawal from any plan of Company which includes a qualified
cash or deferred arrangement under Code Section 401(k), if any.

3.2      Compensation Reduction Agreement.  As a condition to Company’s
obligation to make a Compensation Reduction Contribution for the benefit of a
Participant pursuant to Section 3.1, Participant must execute a Compensation
Reduction Agreement and Beneficiary Designation in the form attached hereto as
Exhibit A. Any deferral election made by a Participant shall be irrevocable with
respect to the Plan Year covered by such election. A Compensation Reduction
Agreement for any Plan Year shall be made and delivered to Company before the
beginning of the Plan Year in which services relating to the Compensation for
such Plan Year to be deferred are performed and shall remain in full force and
effect for subsequent Plan Years unless revoked by a Participant by written
instrument delivered to Company prior to the beginning of the Plan Year in which
such revocation is to be effective; PROVIDED, that for the Plan Year in which a
Participant first becomes eligible to participate in Plan, and has not in the
past two years been eligible to participate in any other nonqualified deferred
compensation plan which would be aggregated with Plan pursuant to Treasury
Regulation Section 1.409A-1, such election may be made with respect to services
to be performed subsequent to the election within 30 days after the date
Participant becomes eligible to participate in Plan; PROVIDED FURTHER, that in
the case of any deferral from performance-based compensation, such election must
be filed with Company no later than June 30 of the performance period for which
a Participant receives such performance-based compensation; PROVIDED FURTHER,
that an election to defer any award of Incentive Compensation that is subject to
a forfeiture condition requiring the Participant’s continued services for a
period of at least 12 months from the date of the award must be made (1) on or
before the 30th day after the award date and (2) at least 12 months in advance
of the earliest date at which the forfeiture condition could lapse.

 

4

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ARTICLE IV

EARNINGS ON CONTRIBUTIONS

4.1      Cash Deferral Account.  Amounts credited to a Cash Deferral Account
shall earn interest at a rate, with respect to any Plan Year, equal to the Prime
Rate plus one (1%) percent, and such interest will be credited to the Cash
Deferral Account from time to time; PROVIDED, HOWEVER, that during the time
period that installment payments are being made from a Cash Deferral Account,
any balance of the Cash Deferral Account shall earn interest at a rate, with
respect to any Plan Year, equal to the Prime Rate, and such accrued interest
will be paid together with the next distribution from the Account.

4.2      Stock Deferral Account.  A Participant is deemed to receive “dividends”
on the shares of Stock credited to the Participant’s Stock Deferral Account
equal to the dividends paid on the Stock and such other dividend rights related
to Stock, if any, whether vested or unvested, granted to the Participant as such
rights are approved by the Committee (“Dividend Equivalents”). The notional
dollar amount of the Dividend Equivalents will be converted into additional
share credits of Stock, including fractional share credits, and credited to the
Participant’s Stock Deferral Account by dividing (x) the notional dollar amount
of the Dividend Equivalents by (y) the average of the highest and lowest sales
price of Company’s Stock for the three (3) trading days immediately preceding
the dividend payment date, unless the Committee determines that another
procedure for determining conversion would be more appropriate; PROVIDED,
HOWEVER, that during the time period that installment distributions are being
made from a Stock Deferral Account, the notional dollar amount of Dividend
Equivalents earned on the balance of the Stock Deferral Account shall be paid
together with the next distribution from the Account.

The Stock Deferral Account will be adjusted for any stock dividends, stock
splits or like events as determined by the Committee.

ARTICLE V

DISTRIBUTIONS

5.1      Distribution – General Rule.  All amounts credited to a Participant’s
Account, including gains/losses credited/debited in accordance with Article IV
of the Plan, shall be distributed to or with respect to a Participant only upon
Participant’s Separation from Service with Company and all affiliates thereof
for any reason including retirement, death or Disability; provided, however, if
a Participant is a “Specified Employee” as defined in Code section 409A(a)(2)(A)
(that is, a “Key Employee” as defined in Code section 416(i) without regard to
paragraph (5) thereof), no distribution may be made before the date which is 6
months after the date of Participant’s Separation from Service from Company (or,
if earlier, the date of death or Disability of Participant). All amounts
distributable under Plan shall be distributed in the form of a single lump-sum
payment; PROVIDED, HOWEVER, Participant may elect at the time of his initial
Compensation Reduction Agreement that instead of receiving a single lump-sum
payment, he will receive payment under Plan in installments over a period not to
exceed ten (10) years.

If a Participant should die before distribution of the full amount of his
Account has been made to him, any remaining amounts shall be distributed to the
Participant’s Beneficiary in the manner and at the time heretofore prescribed.
If Participant has not designated a Beneficiary, or if no designated Beneficiary
is living on the date of distribution, such amount shall be distributed to the
Participant’s estate in the manner and at the time heretofore prescribed.

5.2      Distribution – Special Rule.  In addition to or in lieu of the
distribution set forth in Section 5.1, a Participant may elect to allocate, in
whole or in part, amounts to be credited to his Account

 

5

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to a “Fixed Period Subaccount” which shall be distributed as follows: All
amounts credited to a Fixed Period Subaccount, including gains/losses
credited/debited in accordance with Article IV hereof, shall be distributed to
Participant in the form of a single lump-sum payment within thirty (30) days
after January 1 of the Plan Year selected for payment by such Participant;
PROVIDED, HOWEVER, Participant may elect at the time of his initial Compensation
Reduction Agreement that instead of receiving a single-sum payment, he will
receive payment under Section 5.2 in installments over a period not to exceed
ten (10) years. The minimum initial deferral period for each Subaccount shall be
five (5) years. The election to allocate amounts to be credited to a Fixed
Period Subaccount shall be made on the Compensation Reduction Agreement and
Beneficiary Designation (see Exhibit A) and in accordance with Section 3.2
hereof. A Participant may not modify, alter, amend or revoke such allocation for
a Plan Year after such Plan Year begins. Furthermore, amounts in one Fixed
Period Subaccount cannot be transferred to another Fixed Period Subaccount.

If a Participant should die before distribution of the full amount of his
Account which has been allocated to any Fixed Period Subaccount, any remaining
amount shall be distributed to Beneficiary in the manner and at the time
heretofore prescribed. If a Participant has not designated a Beneficiary, or no
designated Beneficiary is living on the date of the distribution, such amount
shall be distributed to Participant’s estate in the manner and at the time
heretofore prescribed.

5.3      Unforeseeable Emergency.  The Committee shall have the sole and
absolute discretion to grant a Participant’s request to withdraw all or any
amount credited to his Account to the extent reasonably needed to satisfy an
emergency need created by an Unforeseeable Emergency. An “Unforeseeable
Emergency” is a severe financial hardship to Participant resulting from an
illness or accident of Participant, Participant’s spouse or a dependent (as
defined in Code section 152) of Participant, loss of Participant’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of Participant. The
circumstances that will constitute an Unforeseeable Emergency will depend on the
facts of each case, but in any case, the amount distributed with respect to an
emergency shall not exceed the amounts necessary to satisfy such emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such hardship is or
may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

5.4      Change in Control Event.  Upon a Change in Control Event as defined in
Section 1.5, all amounts credited to a Participant’s Account, including
gains/losses credited/debited in accordance with Article IV of Plan, shall be
distributed to each Participant in a single lump sum payment not later than
thirty (30) days following such Change in Control Event.

5.5      Subsequent Election.  A Participant may elect to defer payment, or
change the form of payment, of his Account pursuant to his initial election
under Section 5.1 or 5.2, provided (a) the subsequent election is not effective
until 12 months after the date on which the subsequent election is made; (b) the
first payment with respect to which such subsequent election is made shall be
deferred for a period of not less than 5 years from the date such payment would
otherwise have been made; and (c) in the case of an initial election under
Section 5.2 of Plan, any subsequent election shall be made not less than 12
months prior to the date of the first scheduled payment pursuant to the initial
election under Section 5.2 of Plan.

5.6      Special Election Permitted by Notice 2005-1.  There shall be permitted
pursuant to this Plan, a special election under Notice 2005-1, Q&A 21, with
respect to the deferrals of amounts that are subject to IRC 409A which relate
all or in part to services performed on or before December 31, 2005. The
requirements of IRC 409A(a)(4)(B) relating to the timing of elections will not
be applicable to any election made on or before March 15, 2005.

 

6

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ARTICLE VI

ADMINISTRATION OF THE PLAN

6.1      The Administrative Committee.  The Plan is administered by the
Committee, which shall be the Plan Administrator for purposes of ERISA. The
Committee may adopt such rules and appoint such subcommittees as it deems
desirable for the conduct of its affairs and the administration of Plan.

6.2      Powers of the Committee.  In carrying out its duties with respect to
the general administration of Plan, the Committee has, in addition to any other
powers conferred by Plan or by law, the following powers:

  (a)      to determine all questions relating to eligibility to participate in
Plan;

  (b)      to compute the amount and kind of distributions payable to
Participants and their Beneficiaries;

  (c)      to maintain all records necessary for the administration of Plan that
are not maintained by Company;

  (d)      to interpret the provisions of Plan and to make and publish such
rules for the administration of Plan as are not inconsistent with the terms
thereof;

  (e)      to establish and modify the method of accounting for Plan;

  (f)      to employ counsel, accountants, record keepers, and other consultants
to aid in exercising its powers and carrying out its duties hereunder; and

  (g)      to perform any other acts necessary and proper for the administration
of Plan.

  (h)      total and complete discretion to interpret and construe Plan and to
determine all questions arising in the administration, interpretation and
application of Plan. Any determination Committee makes under Plan is final and
binding upon any affected person.

6.3      Indemnification.

  (a)      Indemnification of Members of the Committee by Company.  Company
agrees to indemnify and hold harmless each member of the Committee against any
and all expenses and liabilities arising out of a member’s action or failure to
act in such capacity, excepting only expenses and liabilities arising out of a
member’s own willful misconduct. This right of indemnification is in addition to
any other rights to which any member of the Committee may be entitled.

  (b)      Liabilities for which members of the Committee are
indemnified.  Liabilities and expenses against which a member of the Committee
is indemnified hereunder include, without limitation, the amount of any
settlement or judgment, costs, counsel fees and related charges reasonably
incurred in connection with a claim asserted or a proceeding brought against him
or the settlement thereof.

 

7

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  (c)        Company’s right to settle claims. Company may, at its own expense,
settle any claim asserted or proceeding brought against any member of the
Committee when such settlement appears to be in the best interests of Company.

6.4      Claims procedure.  The Claims Procedure is set forth in Exhibit B
attached hereto.

6.5      Expenses of the Committee.  All expenses of the Committee are paid by
Company.

6.6      Expenses of the Plan.  The expenses of administering Plan shall be paid
by Company.

ARTICLE VII

AMENDMENT OR TERMINATION

7.1      Amendment or Termination.  Company intends Plan to be permanent but,
subject to the provisions of Code Section 409A and the regulations thereunder,
reserves the right to amend or terminate Plan when, in the sole opinion of
Company, such amendment or termination is advisable. Any such amendment or
termination shall be made pursuant to a resolution of the Board and shall be
effective as of the date of such resolution.

7.2      Effect of Amendment or Termination.  No amendment or termination of
Plan shall directly or indirectly reduce the balance of any Account held
hereunder as of the effective date of such amendment or termination. Upon
termination of Plan, distribution of amounts in each Account shall be made to
the Participant or Beneficiary in the manner and at the time described in
Section 5.1 or 5.2 of Plan as elected by Participant under his initial
Compensation Reduction Agreement, or as changed by a subsequent election under
Section 5.5 hereof. Except as allowed in compliance with Code Section 409A and
the regulations promulgated thereunder, there shall be no acceleration of
distributions in the event Plan is terminated. No additional credits of
Compensation Reduction Contributions shall be made to the Account of a
Participant after termination of Plan, but Company shall continue to
credit/debit gains/losses to Accounts pursuant to Article IV until the balance
of each such Account has been fully distributed to the Participant or
Beneficiary.

ARTICLE VIII

GENERAL PROVISIONS

8.1      Participant’s Rights Unsecured.  Plan at all times shall be entirely
unfunded and no provision shall at any time be made with respect to segregating
any assets of Company for payment of any distributions hereunder. The right of a
Participant or Beneficiary to receive a distribution hereunder shall be an
unsecured claim against the general assets of Company, and neither a Participant
nor a Beneficiary shall have any rights in or against any specific assets of
Company. All amounts credited to an Account shall constitute general assets of
Company and may be disposed of by Company at such time and for such purposes as
it may deem appropriate.

8.2      No Guarantee of Benefits.  Nothing contained in Plan shall constitute a
guaranty by Company or any other person or entity that the assets of Company
will be sufficient to pay any benefit hereunder.

8.3      No Enlargement of Employee Rights.  No Participant shall have any right
to receive a distribution of contributions made under Plan except in accordance
with the terms of Plan. Establishment of Plan shall not be construed to give any
Participant the right to be retained in the service of Company.

 

8

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8.4      Spendthrift Provision.  No interest of any person or entity in, or
right to receive a distribution under, Plan shall be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment, or other alienation
or encumbrance of any kind; nor may such interest or right to receive a
distribution be taken, either voluntarily or involuntarily for the satisfaction
of the debts of, or other obligations or claims against, such person or entity,
including claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.

8.5      Applicable Law.  Plan shall be construed and administered under the
laws of the State of Kansas.

8.6      Incapacity of Recipient.  If any person entitled to a distribution
under Plan is deemed by Company to be incapable of personally receiving and
giving a valid receipt for such payment, then, unless and until claim therefor
shall have been made by a duly appointed guardian or other legal representative
of such person, Company may provide for such payment or any part thereof to be
made to any other person or institution then contributing toward or providing
for the care and maintenance of such person. Any such payment shall be a payment
for the account of such person and a complete discharge of any liability of
Company and Plan therefor.

8.7      Unclaimed Benefit.  Each Participant shall keep Company informed of his
current address and the current address of any Beneficiary. Company shall not be
obligated to search for the whereabouts of any person. If the location of a
Participant is not made known to Company within three (3) years after the date
on which payment of the Participant’s Account may first be made, payment may be
made as though Participant had died at the end of the three-year period. If,
within one additional year after such three-year period has elapsed, or, within
three years after the actual death of Participant, Company is unable to locate
any Beneficiary of Participant, then Company shall have no further obligation to
pay any benefit hereunder to such Participant or Beneficiary and such benefit
shall be irrevocably forfeited.

8.8      Limitations on Liability.  Notwithstanding any of the preceding
provisions of Plan, neither Company nor any individual acting as employee or
agent of Company shall be liable to any Participant, former Participant or other
person for any claim, loss, liability or expense incurred in connection with
Plan.

8.9      Department of Labor Notice.  Company shall be responsible for filing
with the Department of Labor a notice in the form attached hereto as Exhibit C,
not later than 120 days after the adoption of this Plan.

IN WITNESS WHEREOF, Company has caused this Plan to be executed by a duly
authorized officer this      day of                         , 2006.

 

WESTAR ENERGY, INC. By:  

 

 

9

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EXHIBIT A

COMPENSATION REDUCTION AGREEMENT

AND

BENEFICIARY DESIGNATION

As a condition of receiving a Compensation Reduction Contribution under the
Westar Energy, Inc. 2005 Deferred Compensation Plan, the undersigned agrees as
follows:

1.        The cash Compensation otherwise payable to me by Westar Energy, Inc.
for any calendar year commencing with the year which begins on January 1, 2006,
shall be reduced by              % and the amount of such reduction shall be
allocated as a Compensation Reduction Contribution made for my benefit pursuant
to the Westar Energy, Inc. 2005 Deferred Compensation Plan for such year to my
Cash Deferral Account.

2.        The restricted share units (RSUs) granted to me under an RSU award by
Wester Energy, Inc. dated                         , which shall vest on
                                    , shall not be paid on such vesting date(s),
but instead shall be deferred and allocated as a Compensation Reduction
Contribution to my Stock Deferral Account made for my benefit pursuant to the
Westar Energy, Inc. 2005 Deferred Compensation Plan for such year(s).
(IMPORTANT: an election under this paragraph 2 must be made no later than 30
days after the award date for the RSUs.)

3.        All dividend equivalents paid with respect to the RSUs referred to in
item 2 above shall not be paid when normally paid, but instead shall be
reinvested in RSUs, which shall not be then paid, but instead shall be deferred
and allocated as a Compensation Reduction Contribution to my Stock Deferral
Account made for my benefit pursuant to the Westar Energy, Inc. 2005 Deferred
Compensation Plan for each such year that dividend equivalent would otherwise be
paid.

4.        Optional Election to Allocate Contributions to a Fixed Period
Subaccount (Plan Section 5.2). I wish to allocate contributions to be made
pursuant to paragraphs 1, 2 or 3 above as follows:

    (a)        Rather than receive distribution of contributions made to the
Plan pursuant to the general rule stated in Plan Section 5.1, I wish to create a
“Fixed Period Subaccount” which shall be payable January 1 of the following
year:                          (insert the year which for an initial deferral
must be at least five (5) years after the Plan Year the election is effective).

    (b)        Further, I wish to allocate the following percentage of
Compensation Reduction Contributions made on my behalf to the account created in
(a) above:         %

5.        Optional Election to Receive Distribution in Installments Over a
Period Not To Exceed Ten (10) Years. Rather than receive distribution of
contributions made to the Plan in a lump sum, I wish distribution in equal
monthly payments of          years (not to exceed ten (10) years).

6.        These elections shall be irrevocable with respect to the Plan Year
covered by this election prior to the date I revoke the elections by written
instrument delivered to Westar Energy, Inc. With the exception of changes to
beneficiary designation, no written instrument shall be effective during the
Plan Year if delivered after the start of the Plan Year (or, if I am a new
Participants, the effective date of my enrollment in the Westar Energy, Inc.
2005 Deferred Compensation Plan).

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7.        I hereby designate the following person or persons as primary and
secondary beneficiaries of my Account under the Plan payable by reason of my
death:

 

Primary Beneficiary(ies) [include address and relationship]

 

 

 

 

Contingent Beneficiary(ies) [include address and relationship]:

 

 

 

I RESERVE THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION. I HEREBY
REVOKE ALL PRIOR DESIGNATIONS (IF ANY) OF PRIMARY BENEFICIARIES AND CONTINGENT
BENEFICIARIES.

All sums payable under the Plan by reason of my death shall be paid to the
primary beneficiary, if he or she survives me, and if no primary beneficiary
survives me, then to the contingent beneficiary, and if no named beneficiary
survives me, then all amounts shall be paid in accordance with the Plan. I
understand that, unless I have provided otherwise above, all sums payable to
more than one beneficiary will be paid equally to the living beneficiaries.

 

Accepted:         Westar Energy, Inc.          

 

By:  

 

            Signature of Participant

Date:  

 

                   Date:  

 

 

2

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EXHIBIT B

CLAIMS PROCEDURES

 

I.    Initial Claim.

       A.          Submitting the Claim

Upon request, the Plan Administrator shall provide any Participant or
Beneficiary (“Claimant”) with a claim form which the Claimant can use to request
benefits. In addition, the Plan Administrator will consider any written request
for benefits under the Plan to be a claim.

       B.          Approval of Initial Claim

If a claim for benefits is approved, the Plan Administrator shall provide the
Claimant with written or electronic notice of such approval. The notice shall
include:

 

  1. The amount of benefits to which the Claimant is entitled.

 

  2. The duration of such benefit.

 

  3. The time the benefit is to commence.

 

  4. Other pertinent information concerning the benefit.

       C.          Denial of Initial Claim

If a claim for benefits is denied (in whole or in part) by the Plan
Administrator, the Plan Administrator shall provide the Claimant with written or
electronic notification of such denial within ninety (90) days (forty-five
(45) days in the case of a claim for disability benefit) after receipt of the
claim, unless special circumstances require an extension of time for processing
the claim. (See Section III for the procedures concerning extensions of time.)

The notice of denial of the claim shall include:

 

  1. The specific reason that the claim was denied.

 

  2. A reference to the specific plan provisions on which the denial was based.

 

  3. A description of any additional material or information necessary to
perfect the claim, and an explanation of why this material or information is
necessary.

 

  4. A description of the plan’s appeal procedures and the time limits that
apply to such procedures, including a statement of the Claimant’s right to bring
a civil action under ERISA Section 502(a) if the claim is denied on appeal.

 

  5. Any materials required under 29 C.F.R. § 2560.503-1(g)(1)(v).

The Claimant (or his duly authorized representative) may review pertinent
documents and submit issues and comments in writing to the Plan Administrator.
The Claimant may appeal the denial as set forth in the next section of this
procedure. IF THE CLAIMANT FAILS TO APPEAL SUCH ACTION TO THE PLAN ADMINISTRATOR
IN WRITING WITHIN THE PRESCRIBED PERIOD OF TIME DESCRIBED IN THE NEXT SECTION,
THE PLAN ADMINISTRATOR’S DENIAL OF A CLAIM SHALL BE FINAL, BINDING AND
CONCLUSIVE.

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II.    Appeal Procedures

       A.          Filing the Appeal

In the event that a claim is denied (in whole or in part), the Claimant may
appeal the denial by giving written notice of the appeal to the Plan
Administrator within 60 days (one hundred eighty (180) days in the case of a
claim for disability benefit) after the Claimant receives the notice of denial
of the claim.

At the same time the Claimant submits a notice of appeal, the Claimant may also
submit written comments, documents, records, and other information relating to
the claim. North Fork Bancorporation, Inc. (“Company”) (or its designee) shall
review and consider this information without regard to whether the information
was submitted or considered in conjunction with the initial claim.

       B.          General Appeal Procedure

Company may hold a hearing or otherwise ascertain such facts as it deems
necessary and shall render a decision which shall be binding upon both parties.

Company shall render a decision on appeal within sixty (60) days (forty-five
(45) days in the case of a claim involving disability) after the receipt by the
Plan Administrator of the notice of appeal, unless special circumstances require
an extension of time. (See Section III for the procedures concerning extensions
of time.)

The appeal decision of Company shall be provided in written or electronic form
to the Claimant. If the appeal decision is adverse to the Claimant, then the
written decision shall include the following:

 

  1. The specific reason or reasons for the appeal decision.

 

  2. Reference to the specific plan provisions on which the appeal decision is
based.

 

  3. A statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the Claimant’s claim for benefits. (Whether a
document, record, or other information is relevant to a claim for benefits shall
be determined by reference to 29 C.F.R. § 2560.503-1 (m)(8).)

 

  4. A statement describing any voluntary appeal procedures offered by the Plan
and the Claimant’s right to obtain the information about such procedures.

 

  5. A statement of the Claimant’s right to bring an action under Section 502(a)
of the Employee Retirement Income Security Act.

       C.          Special Appeal Procedure for Disability Claims.

For the purpose of any appeal of an adverse benefit determination regarding a
disability benefit, in addition to the procedures set forth in Section II.B.,
the following procedures shall also apply:

 

  1. The appeal will be conducted by an appropriate Named Fiduciary designated
by Company. The Fiduciary will be neither the individual who denied the claim
initially, nor a subordinate of such individual.

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  2. In deciding the appeal, the Fiduciary shall not give any deference to the
initial determination that was made concerning the claim.

 

  3. If the initial claim was denied based in whole or in part on a medical
judgment, then the Fiduciary shall consult with a health care professional who
has appropriate training and experience in the field of medicine involved in the
medical judgment. Any such professional shall be neither an individual who was
consulted in connection with the initial claim, nor the subordinate of any such
individual.

 

  4. If the Fiduciary obtains the advice of medical or vocational experts in
connection with the appeal, then the Fiduciary must identify the expert(s),
without regard to whether the fiduciary relied upon the advice when deciding the
appeal.

 

  5. In the event of an adverse determination on appeal if an internal rule,
guideline, protocol, or other similar criterion was relied upon in making
decision on appeal, then the written decision on appeal shall include either
(a) the specific rule, guideline, protocol, or other similar criterion, or (b) a
statement that such rule, guideline, protocol, or other similar criterion was
relied upon in making the adverse determination and that a copy of the rule,
guideline, protocol, or other similar criterion will be provided to the Claimant
free of charge upon request.

 

III.   Extensions of Time

       A.          Notice of Extension

If Company requires an extension of time, Company shall provide the Claimant
with written or electronic notice of the extension before the first day of the
extension.

The notice of the extension shall include:

 

  1. An explanation of the circumstances requiring the extension. These
circumstances must be matters beyond the control of the Plan or Company.

 

  2. The date by which the Administrator or Company expects to render a
decision.

 

  3. The standard on which the Claimant’s entitlement to a benefit is based.

 

  4. The unresolved issues, if any, that prevent a decision on the claim or on
appeal, and the information needed to resolve those issues. In the event that
such information is needed:

 

  a. The Claimant shall have at forty-five (45) days in which to provide the
specified information.

 

  b. The time for determining an initial claim shall be tolled from the date on
which the notice of extension is sent to the Claimant, until the date on which
the Claimant responds to the request for additional information.

      B.          Length of Extension

For purposes of an initial claim not involving disability, no more than one
extension of ninety (90) days shall be allowed.

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For purposes of an initial claim involving disability, no more than two
extensions of thirty (30) days each shall be allowed.

For purposes of an appeal not involving disability, no more than one extension
of sixty (60) days shall be allowed.

For purposes of an appeal involving disability, no more than one extension of
forty-five (45) days shall be allowed.

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EXHIBIT C

CERTIFIED MAIL

RETURN RECEIPT NO.                

Secretary of Labor

Top Hat Plan Exemption

Employee Benefits Security Administration

Room N-1513

U.S. Department of Labor

200 Constitution Avenue NW

Washington, DC 20210

WESTAR ENERGY, INC.

REPORTING AND DISCLOSURE COMPLIANCE STATEMENT

In compliance with Section 110 of the Employee Retirement Income Security Act of
1974 (“ERISA”) and the Regulations thereunder, found at 29 CFR 2520.104-23,
Westar Energy, Inc. is filing this Reporting and Disclosure Compliance Statement
and in connection herewith provides the following information:

 

EMPLOYER    WESTAR ENERGY, INC. ADDRESS:   

818 SOUTH KANSAS AVE.

P.O. BOX 889

TOPEKA, KS 66612

EMPLOYER IDENTIFICATION #:    48-0290150 PLAN NAME:   

WESTAR ENERGY, INC.2005 DEFERRED

COMPENSATION PLAN

NUMBER OF PLANS:    [                     ]

NUMBER OF EMPLOYEES

PARTICIPATING IN EACH

PLAN:

   [                     ]

Westar Energy, Inc. maintains the above-named unfunded Plan primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees.

Westar Energy, Inc. will provide the plan documents to the Secretary of Labor
upon request, as required by Section 104(a)(1) of ERISA.

 

WESTAR ENERGY, INC. By:  

 

Title:  

 

Date: