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                                                                  Exhibit 10.1


                              AMENDMENT NO. 1 TO
                   ASSET ALLOCATION AND SEPARATION AGREEMENT

         THIS AMENDMENT NO. 1 dated as of May 2, 2001 (this "Amendment") to the
                                                             ---------
Asset Allocation and Separation Agreement, dated as of November 8, 2000 (the
"Allocation Agreement"), by and between Western Resources, Inc., a Kansas
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corporation ("Western"), and Westar Industries, Inc., a Kansas corporation
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("Westar").
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         Capitalized terms used but not defined in this Amendment shall
have the meaning given such terms in the Allocation Agreement.

                             W I T N E S S E T H :
                              - - - - - - - - - -

         WHEREAS, Western and Westar desire to amend certain terms of the
Allocation Agreement as provided herein;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

         Section 1.   Amendment to the Allocation Agreement. Section 2.02 of the
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Allocation Agreement is hereby amended by deleting the first sentence of the
first paragraph of such section in its entirety and substituting the following
sentences in its place:

                 Section 2.02. Intercompany Transfers and Settlement of
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         Intercompany Debt. After the date hereof and until the earlier of the
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         Cut Off Date or the secured debt of Western's electric utility
         operations receiving an investment grade rating from Moody's and
         Standard & Poor's Westar shall (a) pay to Western the net cash proceeds
         of any sale by Westar of its ownership interest in ONEOK, Inc. and
         Western Resources, whether presently owned or hereafter acquired
         (including common stock or preference stock of Western Resources issued
         to Westar after the date hereof as a result of the conversion of the
         Intercompany Receivable as provided herein), (b) pay to Western the net
         cash proceeds of any borrowings by Westar secured by a pledge of or
         security interest in any of the assets described in the foregoing
         clause (a), and (c) pay to Western the net cash proceeds of the Rights
         Offering. All such payments shall be for the purposes and subject to
         the limits provided in Section 3.2(a)(i) of the Merger Agreement, or to
         acquire indebtedness of Western. Net cash proceeds as used herein shall
         mean cash proceeds of a sale transaction received by Westar after
         deduction of expenses, commission, etc., tax payments for local,
         federal or state entities, and any debt owed on the asset sold. Westar
         may convert any outstanding amount of the
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         Intercompany Receivable as provided in Section 3.2(a)(ii) of the Merger
         Agreement, provided any remaining balance of the Intercompany
         Receivable that has not been converted on or before the Merger
         Effective Time shall be so converted at the Effective Time, and Westar
         shall provide written notice to Western of its choice of conversion
         options on or prior to the Cut Off Date. Western shall use all proceeds
         received from Westar as provided above or from the exercise by Westar
         of its rights under the Westar Option to reduce or minimize its debt.
         This amendment may be terminated if (x) the Kansas Corporation
         Commission (the "Commission") issues an order with respect to the
         restructuring of Western's assets, debt or the matters covered by this
         Section 2.02 which is inconsistent with this amendment, or (y) the
         Commission staff (the "Staff") on its own or others initiate a docket
         with respect to the restructuring of Western's assets, debt or the
         matters covered by this Section 2.02 which is inconsistent with this
         amendment and which causes the Rights Offering to be terminated prior
         to the successful completion of said Rights Offering or Western and
         Westar do not issue the rights contemplated by the Rights Offering or
         the Rights Offering is not successfully completed. This amendment may
         also be terminated if after successful completion of the Rights
         Offering, the Kansas Corporation Commission issues an Order or Orders
         attempting to set aside or materially alter this Agreement or the
         Rights Offering. If this amendment is terminated, the terms of this
         Section 2.02 as in effect prior to this amendment shall automatically
         be reinstated and be in full force and effect.

                  If the Merger is terminated, Western will meet with the Staff
         within 60 days following such termination to discuss the appropriate
         level of debt for Western. If agreement cannot be reached, Western or
         the Staff may submit the matter to the Commission for a hearing and an
         order. If the Merger is terminated, Western will reduce its total debt
         by at least $100 million per year, until its debt level reaches the
         agreed upon debt level, or until it reaches the debt level established
         by a final, non-appealable Commission order. Western will raise the
         funds needed to make this debt reduction by the following options,
         including, but not be limited to, (i) selling Westar stock, (ii)
         selling Western stock , (iii) converting the outstanding balance of the
         Intercompany Receivable (expected to be approximately $291 million at
         the Cut Off Date) to common stock or preference stock of Western, (iv)
         selling assets of Westar presently owned or hereafter acquired by
         Westar, or (v) taking other actions providing for an orderly reduction
         of such debt. The parties acknowledge that multiple methodologies may
         be appropriate to achieve such reduction in debt and the methodologies
         utilized will be governed by the events existing at the time of the
         discussions.

                  Western and Westar further agree that prior to the Merger,
         Western will not sell more than 19.9% of the stock of Westar, and if
         the Merger is terminated Western will continue as owner of at least
         80.1% of Westar's stock, unless Western first provides not less than 30
         days advance notice to the Commission.
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         Western agrees that other than as allowed in the Merger Agreement, it
         will not dividend Westar Industries, Inc. to Western's shareholders
         until Western or the Staff will have resolved their issues as herein
         provided or will have submitted their issues to the Commission as
         provided in this Agreement, or the Commission and the Parties hereto
         shall have otherwise agreed.

                  Western agrees that from the date of this Amendment, excluding
         the existing credit facilities between Westar and Protection One ($155
         Million Dollar credit facility), it will not incur additional
         indebtedness or pledge utility assets for additional indebtedness, for
         its unregulated business entities until the issues set forth herein are
         resolved pursuant to the Agreement.

         Section 2.  Representations and Warranties. Each party hereto hereby
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represents and warrants that (i) it has the power and authority and the legal
right to make, deliver and perform this Amendment, (ii) it has taken all
necessary actions to authorize the execution, delivery and performance of this
Amendment, and (iii) this Amendment is legal, valid and binding on, and
enforceable against, such party.

         Section 3.  Continuing Effect. Except as expressly waived or otherwise
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agreed hereby, the Allocation Agreement shall continue to be and shall remain in
full force and effect in accordance with its terms. This Amendment shall not
constitute a waiver or amendment of any other term, condition or provision of
the Allocation Agreement.

         Section 4.  Governing Law.  This Amendment shall be governed by,
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and construed and interpreted in accordance with, the laws of the State of New
York.

         Section 5.  Counterparts.  This Amendment may be executed by the
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parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

         Section 6.  Successors and Assigns. The provisions of this Agreement
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shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that neither party may assign,
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delegate or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party, which consent
shall not be unreasonably withheld, and unless the Merger Agreement shall have
been terminated in accordance with its terms, any such assignment shall require
the written consent of Parent. If any party or any of its successors or assigns
(i) shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provisions shall be made so that the
successors and assigns of such party shall assume all of the obligations of such
party under each of the Split-Off Documents.
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         IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the date and year first above written.


                                WESTERN RESOURCES, INC.


                                By: /s/ David C. Wittig
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                                    Name: David C. Wittig
                                    Title: Chairman, Chief Executive Officer and
                                           President


                               WESTAR INDUSTRIES, INC.


                               By: /s/ Paul R. Geist
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                               Name: Paul R. Geist
                               Title: President