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                                                                    Exhibit 10.1








                             WESTAR INDUSTRIES, INC.

           2001 LONG TERM INCENTIVE COMPENSATION AND SHARE AWARD PLAN
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                             WESTAR INDUSTRIES, INC.
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           2001 LONG TERM INCENTIVE COMPENSATION AND SHARE AWARD PLAN

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     1. Purposes. The purposes of the 2001 Long Term Incentive Compensation and
Share Award Plan are to advance the interests of Westar Industries, 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.
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     (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.

     (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 Compensation 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 "non-employee director" 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 Industries, 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.

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     (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.

     (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 closing price per Share in
consolidated trading 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 price is reported
by The Wall Street Journal or another reputable source designated by the
Committee.

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     (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.

     (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 2001 Long Term Incentive Compensation 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 deferral period.

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     (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, $.01 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 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

  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:

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     (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, 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) to determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, or other property payable with respect to an Award
will

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be deferred either automatically, at the election of the Committee, or at the
election of the Participant;

          (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) Manner of 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

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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 a separate committee appointed by the Committee 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) Limitation of 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.

     (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

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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 8,500,000. 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

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which Options or SARs may be granted during a calendar year to any Eligible
Employee under this Plan shall be 2,000,000 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 2,000,000 Shares during a
calendar year to any Eligible Employee.

     (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 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

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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.

  5. Specific Terms of Awards.

     (a) General. Awards may he 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

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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.

     (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

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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

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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 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

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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 to such date as
determined by the Committee, 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 upon expiration of the deferral period specified for Restricted
Share Units by the Committee (or, if permitted by the Committee, as elected by
the Eligible Employee). 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 deferral 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

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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 deferral
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 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

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upon 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; earnings before interest, taxes, depreciation
and/or amortization; 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/or
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. Performance Periods may overlap and
Eligible Employees may participate simultaneously with respect to Performance
Shares and Performance Units for which different Performance Periods are
prescribed.

         (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

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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.

         (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 as
soon as practicable 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.

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     (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.

     (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.

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     (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.
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.

     (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

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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. The
Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments.

     (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 or
her 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 Employee's 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

                                      -21-
<PAGE>

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.

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

                                      -22-
<PAGE>

  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
or deferred by a Participant prior to such lapse, all restrictions or
limitations (including risks of forfeiture and deferrals) 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. Anything
in this Plan to the contrary notwithstanding, if a Participant has made a
deferral election under an outstanding Award and payment under such deferral
election is scheduled to be made after the Change of Control, such deferral
election shall remain in effect. In addition, if an outstanding Award allows
deferrals to be re-deferred, in no event shall such re-deferral right be
eliminated prior to the second anniversary of the Change of Control, and any
deferral election made prior to such second anniversary of the Change of Control
shall remain in effect.

         (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

                                      -23-
<PAGE>

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.

     (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 the Effective Date (as defined in Section
     9(k)), 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 the Effective Date, 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
     Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange

                                      -24-
<PAGE>

     Act), subsequent to the Effective Date, 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 Western Resources, Inc., (C) by any
     employee benefit plan (or related trust) sponsored or maintained by the
     Company or any subsidiary, (D) by any underwriter temporarily holding
     securities pursuant to an offering of such securities, or (E) 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 75% of the total voting power of (x) the
     corporation resulting from such Business Combination (the "Surviving
     Corporation"), or (y) if applicable, the ultimate parent corporation that
     directly or indirectly has beneficial ownership of 100% of the voting
     securities eligible to elect directors of the Surviving Corporation (the
     "Parent Corporation"), is represented by Company Voting Securities that
     were outstanding immediately prior to such Business Combination (or, if
     applicable, is represented by shares into which such Company Voting
     Securities were converted pursuant to such Business Combination), and such
     voting power among the holders thereof is in substantially the same
     proportion as the voting power of such Company Voting Securities among the
     holders thereof immediately prior to the Business Combination, (B) no
     person (other than any employee benefit plan (or related trust) sponsored
     or maintained by the Surviving Corporation or the Parent Corporation) is or
     becomes the beneficial owner, directly or indirectly, of 20% or more of the
     total voting power of the outstanding voting securities eligible to elect
     directors of the Parent Corporation (or, if there is no Parent Corporation,
     the Surviving Corporation) and (C) at least a majority of the members of
     the board of directors of the Parent Corporation (or, if there is no Parent
     Corporation, the Surviving Corporation) following the consummation of the
     Business Combination were Incumbent Directors at the time of the Board's
     approval of the execution of the initial agreement providing for such
     Business Combination (any Business Combination which satisfies all of the
     criteria specified in (A), (B) and (C) above shall be deemed to be a
     "Non-Qualifying Transaction"); or

                                      -25-
<PAGE>

          (4) the stockholders of the Company approve a plan of complete
     liquidation or dissolution of the Company or a sale of all or substantially
     all of the Company's assets.

     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

                                      -26-
<PAGE>

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 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

                                      -27-
<PAGE>

be retained in the employ or service of the Company 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

                                      -28-
<PAGE>

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.

     (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.

     (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

                                      -29-
<PAGE>

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 upon
consummation of the rights offering to shareholders of Western Resources, Inc.
entitling the holders to purchase Shares (the "Effective Date"). The Plan shall
terminate as to future awards on the day preceding the tenth anniversary of the
Effective Date.

     (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.

                                      -30-