Exhibit 10.1


 


November 15, 2007


 


Confirmation of Forward Stock Sale Transaction


 


	
  To:

  	
   

  	
  Westar Energy, Inc.

  
	
   

  	
   

  	
  818 South Kansas
  Avenue,

  
	
   

  	
   

  	
  Topeka, Kansas 66612

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  UBS AG, London Branch

  
	
   

  	
   

  	
  c/o UBS Securities LLC

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10171

  
	
   

  	
   

  	
  Tel: 212-821-2100

  
	
   

  	
   

  	
  Fax: 212-821-7031

  





 





 


Dear Sir/Madam:


 


The purpose of this
letter agreement (this “Confirmation”) is to confirm the terms and conditions
of the Transaction entered into between UBS AG, London Branch (“Party A” or
“UBS”) and Westar Energy, Inc. (“Party B”) on the Trade Date specified below
(the “Transaction”).  This confirmation
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.


 


The definitions
and provisions contained in the 2002 ISDA Equity Derivatives Definitions (as
published by the International Swaps and Derivatives Association, Inc.
(“ISDA”)) (the “Equity Definitions”) are incorporated into this
Confirmation.  In the event of any
inconsistency between the Equity Definitions and this Confirmation, this
Confirmation will govern.  Any reference
to a currency shall have the meaning contained in Annex A to the 1998 ISDA FX
and Currency Option Definitions, as published by ISDA.


1.       
This Confirmation evidences a complete and binding
agreement between Party A and Party B as to the terms of the Transaction to
which this Confirmation relates.  This
Confirmation shall supplement, form a part of, and be subject to an agreement
in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Party A and
Party B had executed an agreement in such form on the Trade Date (but without
any Schedule except for the election of the laws of the State of New York as
the governing law), and provided that
in no event shall Party B be required to pay an additional amount to Party A
under Section 2(d)(i)(4) of the Agreement in respect of any distribution or
deemed distribution with respect to Shares. 
In the event of any inconsistency between provisions of that Agreement
and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. 
The parties hereby agree that no Transaction other than the Transaction
to which this Confirmation relates shall be governed by the Agreement.  For purposes of the Equity Definitions, the
Transaction is a Share Forward Transaction.


2.       
The terms of the particular Transaction to which this
Confirmation relates are as follows:


 


GENERAL TERMS:


 


	
  Trade Date:

  	
   

  	
  November 16, 2007

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  November 21, 2007

  
	
   

  	
   

  	
   

  
	
  Base Shares:

  	
   

  	
  7,600,000 Shares, as
  shall be increased by the number of shares purchased by the Underwriters (as
  defined in the Underwriting Agreement) from Party A pursuant to Section 3(e)
  of the Underwriting Agreement (as defined below). On each Settlement Date,
  the Base Shares shall be reduced by the number of Settlement Shares for such
  Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Maturity Date:

  	
   

  	
  November 21, 2008 (or,
  if such date is not a Scheduled Trading Day, the next

  



 


 

















 


 


	
   

  	
   

  	
  following Scheduled
  Trading Day), subject to extension if a Settlement Date on such date is
  deferred as provided below in clause (ii) of the proviso to the definition of
  Settlement Date; provided that if the Maturity Date is a Disrupted Day, then
  the Maturity Date shall be the first succeeding Scheduled Trading Day that is
  not a Disrupted Day.

  
	
   

  	
   

  	
   

  
	
  Forward Price:

  	
   

  	
  On the Effective Date,
  the Initial Forward Price, and on any other day, the Forward Price as of the
  immediately preceding calendar day multiplied by the sum of (i) 1 plus (ii)
  the Daily Rate for such day; provided that on each Forward Price Reduction
  Date, the Forward Price in effect on such date shall be the Forward Price
  otherwise in effect on such date minus the Forward Price Reduction Amount for
  such Forward Price Reduction date; provided further that if the Underwriters
  purchase any Borrowed Optional Securities (as defined in the Underwriting
  Agreement) from Party A pursuant to Section 3(e) of the Underwriting
  Agreement, on the Optional Closing Date (as defined in the Underwriting
  Agreement), the Forward Price on such date shall be the Initial Forward Price
  if the Optional Closing Date is the Effective Date, or if the Optional
  Closing Date occurs after the Effective Date, the Forward Price on such date
  shall be as a result of the following formula:

  



 


	
   

  	
  [BA’ X FP X (1 + DR)] + (OS X IFP)

  
	
   

  	
   

  	
  BA’’

  	
   

  



 


	
  where:

  	
   

  
	
   

  	
   

  	
   

  
	
  BA’

  	
  =

  	
  the Base Shares prior
  to increase thereof as described opposite the caption “Base Shares” above;

  
	
  FP

  	
  =

  	
  the Forward Price on
  the date immediately preceding such Optional Closing Date;

  
	
  DR

  	
  =

  	
  the Daily Rate for such
  day;

  
	
  OS

  	
  =

  	
  the number of Borrowed
  Optional Securities so purchased from Party A;

  
	
  IFP

  	
  =

  	
  the Initial Forward
  Price (as such Initial Forward Price may be reduced by the Forward Reduction
  Amount on any Forward Reduction Date that occurs on or prior to the Optional
  Closing Date); and

  
	
  BA’’

  	
  =

  	
  the Base Shares after
  increase thereof as described above opposite the caption “Base Shares” above.

  



 


	
  Initial Forward Price:

  	
   

  	
  USD 24.36625 per Share

  
	
   

  	
   

  	
   

  
	
  Daily Rate:

  	
   

  	
  For any day, (i)(A)
  USD-Federal Funds Rate for such day minus (B) the Spread divided by (ii) 360.

  
	
   

  	
   

  	
   

  
	
  USD-Federal Funds Rate:

  	
   

  	
  For any day, the rate
  set forth for such day opposite the caption “Federal funds”, as such rate is
  displayed on the page “FedsOpen <Index> <GO>“ on the BLOOMBERG
  Professional Service, or any successor page; provided that if no rate appears
  on any day on such page, the rate for the immediately preceding day on which
  a rate appears shall be used for such day.

  
	
   

  	
   

  	
   

  
	
  Spread:

  	
   

  	
  0.60%

  
	
   

  	
   

  	
   

  
	
  Forward Price Reduction
  Date:

  	
   

  	
  Each of December 5,
  2007, March 5, 2008, June 5, 2008 and September 5, 2008.

  
	
   

  	
   

  	
   

  
	
  Forward Price Reduction
  Amount:

  	
   

  	
  For each Forward Price
  Reduction Date, the Forward Price Reduction Amount set forth opposite such
  date on Schedule I.

  



 


2

















 


 


	
  Shares:

  	
   

  	
  Common stock, $5.00 par
  value per share, of Westar Energy, Inc. (the “Issuer”) (Exchange identifier:
  “WR”).

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  New York Stock Exchange

  
	
   

  	
   

  	
   

  
	
  Related Exchange(s):

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  Clearance System:

  	
   

  	
  Depository Trust
  Company (or its successor)

  
	
   

  	
   

  	
   

  
	
  Calculation Agent:

  	
   

  	
  Party A. The
  Calculation Agent shall provide Party A and Party B with a schedule of all
  calculations, adjustments and determinations in reasonable detail and in a
  timely manner.

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  Party A

  
	
   

  	
   

  	
   

  
	
  Exchange Act:

  	
   

  	
  The Securities Exchange
  Act of 1934, as amended from time to time.

  
	
   

  	
   

  	
   

  
	
  SETTLEMENT TERMS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Settlement Date:

  	
   

  	
  Subject to the
  provisions under “Acceleration Events” and “Termination Settlement” below,
  any Scheduled Trading Day following the Effective Date and up to, and
  including, the Maturity Date, as designated by Party B in a written notice (a
  “Settlement Notice”) that satisfies the Settlement Notice Requirements and
  that (a) if related to any Cash Settlement or Net Share Settlement, is
  delivered to Party A at least 30 Scheduled Trading Days prior to such
  Settlement Date and (b) if related to Physical Settlement, may be delivered
  at any time and settlement will be completed as promptly as practicable
  thereafter; provided that (i) subject to clause (ii) below, the Maturity Date
  shall be a Settlement Date if on such date the Base Shares is greater than
  zero; (ii) if Cash Settlement or Net Share Settlement applies, any Settlement
  Date, including a Settlement Date on the original Maturity Date, shall, if
  Party A is unable to completely unwind its hedge during the Unwind Period due
  to (A) the restrictions of Rule 10b-18 under the Exchange Act, (B) the
  existence of any Suspension Day or Disrupted Day, or (C) the inability of
  Party A, in its commercially reasonable judgment, to unwind its hedge during
  the Unwind Period, be deferred until the third Scheduled Trading Day
  following the date on which Party A is able to completely unwind its hedge,
  provided that such deferral shall not extend beyond the 45th Scheduled
  Trading Day after the Settlement Date designated in the Settlement Notice,
  such 45th Scheduled Trading Day being a Settlement Date to which (x) Cash
  Settlement or Net Share Settlement, as applicable, will apply with respect to
  the portion of such Settlement Shares as to which Party A reasonably
  determines that it has unwound its hedge during the Unwind Period, and (y)
  Physical Settlement will apply with respect to the remainder of such
  Settlement Shares, and (iii) no more than six Settlement Dates other than the
  Maturity Date may be designated by Party B; provided further that if Party A
  shall fully unwind its hedge during an Unwind Period by a date that is more
  than three Scheduled Trading Days prior to a Settlement Date specified above,
  Party A may, by written notice to Party B, specify any Scheduled Trading Day
  prior to such original Settlement Date as the Settlement Date; provided
  further that if any Settlement Date specified above is not a Scheduled
  Trading Day, the Settlement Date shall instead be the next Scheduled Trading
  Day.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Party A will be deemed
  to have completely unwound its hedge upon such time

  



 


3

















 


 


	
   

  	
   

  	
  that Party A shall have
  acquired a number of Shares (i) in the case of Cash Settlement, equal to the
  number of Settlement Shares, and (ii) in the case of Net Share Settlement,
  that has an aggregate purchase price equal to (1) the product of (A) the
  number of Settlement Shares and (B) the Forward Price as of the first day of
  the applicable Unwind Period minus (2) the product of (A) the Forward Price
  Reduction Amount for any Forward Price Reduction Date that occurs during such
  Unwind Period and (B) the number of Shares with respect to which Party A has
  not unwound its hedge as of such Forward Price Reduction Date.

  
	
   

  	
   

  	
   

  
	
  Settlement Shares:

  	
   

  	
  Subject to the
  provisions under “Acceleration Events” and “Termination Settlement” below,
  with respect to any Settlement Date, a number of Shares, not to exceed the
  Base Shares, designated as such by Party B in the related Settlement Notice;
  provided that, on the Maturity Date, the number of Settlement Shares shall be
  equal to the Base Shares on such date; provided further that if a Settlement
  Date has been specified for a number of Shares equal to the Base Shares on or
  prior to the Maturity Date and such Settlement Date has been deferred as
  described above until a date later than the original Maturity Date, the
  number of Settlement Shares on the original Maturity Date shall be zero.

  
	
   

  	
   

  	
   

  
	
  Settlement:

  	
   

  	
  Subject to the
  provisions under “Settlement Date” above and “Acceleration Events” and
  “Termination Settlement” below, Physical, Cash, or Net Share, at the election
  of Party B as set forth in a Settlement Notice that satisfies the Settlement
  Notice Requirements; provided that Physical Settlement shall apply if no
  Settlement Method is selected.

  
	
   

  	
   

  	
   

  
	
  Settlement Notice
  Requirements:

  	
   

  	
  Notwithstanding any
  other provisions hereof, a Settlement Notice delivered by Party B that
  specifies Cash Settlement or Net Share Settlement will not be effective to
  establish a Settlement Date or require Cash Settlement or Net Share
  Settlement (as applicable) unless Party B delivers to Party A with such
  Settlement Notice a representation signed by Party B substantially in the
  following form: “As of the date of this Settlement Notice, Westar Energy,
  Inc. is not aware of any material nonpublic information concerning itself or
  the Shares, and is designating the date contained herein as a Settlement Date
  in good faith and not as part of a plan or scheme to evade compliance with
  the federal securities laws.”

  
	
   

  	
   

  	
   

  
	
  Unwind Period:

  	
   

  	
  The period from, and
  including, the first Scheduled Trading Day following the date on which Party
  B elects Cash Settlement or Net Share Settlement in respect of a Settlement
  Date through the third Scheduled Trading Day preceding such Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Unwind Daily Share
  Amount:

  	
   

  	
  On each Scheduled
  Trading Day during the Unwind Period, other than a Suspension Day or a
  Disrupted Day, Party A will, in accordance with the principles of best
  execution, purchase a number of Shares equal to the lesser of (i) 100% of the
  applicable volume limitation of Rule 10b-18 for the Shares on such Scheduled
  Trading Day, without reference to any block purchases, (ii) 25% of the daily
  trading volume for the Shares on the Exchange on such Scheduled Trading Day,
  and (iii) the number of Shares necessary to complete the purchases required
  to calculate the Cash Settlement Amount or the Net Share Settlement Shares, as
  the case may be.

  
	
   

  	
   

  	
   

  
	
  Physical Settlement:

  	
   

  	
  On any Settlement Date
  in respect of which Physical Settlement applies, Party B shall deliver to
  Party A a number of Shares equal to the Settlement Shares for such Settlement
  Date, and Party A shall deliver to Party B, by wire transfer of immediately
  available funds to an account designated by Party B, an amount in cash equal
  to the Physical Settlement Amount for such Settlement Date, on a delivery
  versus payment basis.

  



.


 


4

















 


 


	
  Physical Settlement
  Amount:

  	
   

  	
  For any Settlement Date
  in respect of which Physical Settlement applies, an amount in cash equal to
  the product of the Forward Price on such Settlement Date and the number of
  Settlement Shares for such Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Cash Settlement:

  	
   

  	
  On any Settlement Date
  in respect of which Cash Settlement applies, if the Cash Settlement Amount is
  a positive number, Party A will pay the Cash Settlement Amount to Party B. If
  the Cash Settlement Amount is a negative number, Party B will pay the
  absolute value of the Cash Settlement Amount to Party A. Such amounts shall
  be paid on the Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Cash Settlement Amount:

  	
   

  	
  For any Settlement Date
  in respect of which Cash Settlement applies, an amount determined by the
  Calculation Agent equal to: (1) the product of (i) (A) the Forward Price as
  of the first day of the applicable Unwind Period minus (B) the weighted
  average price at which Party A is able to purchase Shares during the Unwind
  Period applicable to Cash Settlement to unwind its hedge in compliance with
  Rule 10b-18 under the Exchange Act as if it applied to Party A during the
  Unwind Period and (ii) the number of Settlement Shares for such Settlement
  Date minus (2) the product of (i) the Forward Price Reduction Amount for any
  Forward Price Reduction Date that occurs during such Unwind Period and (ii)
  the number of Settlement Shares with respect to which Party A has not unwound
  its hedge as of such Forward Price Reduction Date.

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement:

  	
   

  	
  On any Settlement Date
  in respect of which Net Share Settlement applies, if the number of Net Share
  Settlement Shares is a (i) positive number, Party A shall deliver a number of
  Shares to Party B equal to the Net Share Settlement Shares, and (ii) negative
  number, Party B shall deliver a number of Shares to Party A equal to the
  absolute value of the Net Share Settlement Shares; provided that if Party A
  determines in its good faith judgment that it would be required to deliver
  Net Share Settlement Shares to Party B, Party A may elect to deliver a
  portion of such Net Share Settlement Shares on one or more dates prior to the
  applicable Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement
  Shares:

  	
   

  	
  On any Settlement Date
  in respect of which Net Share Settlement applies, an amount equal to (A) the
  number of Shares acquired in the Unwind Period applicable to Net Share
  Settlement for such Settlement Date minus (B) the number of Settlement Shares
  for such Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Settlement Currency:

  	
   

  	
  USD

  
	
   

  	
   

  	
   

  
	
  Failure to Deliver:

  	
   

  	
  Not Applicable

  



 


SUSPENSION OF CASH
OR NET SHARE SETTLEMENT:


 


	
  Suspension Day:

  	
   

  	
  Any day on which Party
  A determines based on the written advice of counsel that Cash or Net Share
  Settlement may violate applicable securities laws. Party A shall notify Party
  B if it receives such written advice from its counsel.

  
	
   

  	
   

  	
   

  
	
  ADJUSTMENTS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent
  Adjustment. Notwithstanding anything in the Equity Definitions to the
  contrary, the Calculation Agent may make an adjustment pursuant to Calculation
  Agent Adjustment to any one or more of the Base Shares, the Forward Price and
  any other variable relevant to the settlement or payment terms of the
  Transaction.

  



 


5

















 


 


	
  EXTRAORDINARY EVENTS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Extraordinary Events:

  	
   

  	
  In lieu of the
  applicable provisions contained in Article 12 of the Equity Definitions, the
  consequences of any applicable Extraordinary Event shall be as specified in
  “Acceleration Events” and “Termination Settlement” hereunder.

  
	
   

  	
   

  	
   

  
	
  Tender Offer:

  	
   

  	
  Not Applicable.

  
	
   

  	
   

  	
   

  
	
  ACCOUNT DETAILS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Payments to Party A:

  	
   

  	
  To be advised under
  separate cover or telephone confirmed prior to each Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Payments to Party B:

  	
   

  	
  To be advised under
  separate cover or telephone confirmed prior to each Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Delivery of Shares to
  Party A:

  	
   

  	
  To be advised

  
	
   

  	
   

  	
   

  
	
  Delivery of Shares to
  Party B:

  	
   

  	
  To be advised

  



 


3.       
Other Provisions:


 


Conditions to
Effectiveness:


 


The effectiveness of this
Confirmation on the Effective Date shall be subject to (i) the condition that
the representations and warranties of Party B contained in Section 3(a) of the
Agreement and the Underwriting Agreement dated the date hereof between Party B
and UBS Securities LLC and J.P. Morgan Securities Inc., as representatives of
the underwriters, and the other underwriters named therein (the “Underwriting
Agreement”), and any certificate delivered pursuant to the Underwriting
Agreement by Party B be true and correct on the Effective Date as if made as of
the Effective Date, (ii) the condition that the representations and warranties
of Party A contained in Section 3(a) of the Agreement be true and correct on
the Effective Date as if made as of the Effective Date, (iii) the condition
that Party B have performed all of the obligations required to be performed by
it under the Underwriting Agreement on or prior to the Effective Date, (iv)
delivery by Party A to Party B of a properly executed Internal Revenue Service
Form W-8BEN or similar documentation establishing an exemption from backup
withholding under the Internal Revenue Code of 1986, as amended, and (v) the
satisfaction of all of the conditions set forth in Section 5 of the Standard
Provisions to the Underwriting Agreement. 
In addition, if Party A (or its affiliate), in Party A’s commercially
reasonable judgment, is unable to borrow and deliver for sale a number of
Shares equal to the Base Shares on the Effective Date or if, in Party A’s
commercially reasonable judgment, borrowing such number of Shares would entail
a stock loan cost of more than 60 basis points per annum with respect to all or
any portion of such Shares, the effectiveness of this Confirmation shall be
limited to the number of Shares Party A (or its affiliate) may borrow on the
Effective Date at a cost of not more than 60 basis points per annum.


 


Additional
Representations and Warranties of Party B: Party B hereby represents and warrants to Party A
(each of such representations to be deemed part of Section 3(a) of the
Agreement) as of the date hereof and on the Effective Date, and, in the case of
clause (b), on such dates and on the Settlement Date, that:


 


(a)          
The execution, delivery and the performance by Party B
of this Confirmation (including, without limitation, the issuance and delivery
of Shares on any Settlement Date) and compliance by Party B with its
obligations hereunder (i) has been duly authorized by all necessary corporate
action and does not and will not result in any violation of the provisions of
the articles of incorporation or by-laws of Party B or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any 


 


6

















 


government instrumentality or court, domestic or
foreign, having jurisdiction, over Party B or any of its assets, properties or
operations and (ii) will not conflict with or result in a breach or any of the
terms or provisions of, or constitute a default under, (I) any material
indenture, mortgage, deed of trust or other material agreement or instrument,
in each case, filed as an exhibit to Party B’s most recent 10-K or Party
B’s 8-K’s dated as of April 12, 2007, May 16, 2007, August 14, 2007,
August 27, 2007 or October 19, 2007 to which Party B or any of its subsidiaries
is a party or by which Party B or any of its subsidiaries or any of their
respective properties is bound.


(b)          
No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the execution,
delivery and performance by Party B of this Confirmation and the consummation
of the Transaction (including, without limitation, the issuance and delivery of
Shares on any Settlement Date) except (i) such as have been obtained under the
Securities Act of 1933, as amended (the “Securities Act”) and (ii) as may be
required to be obtained under state securities law.


(c)          
Party B is as of the date hereof, and after giving
effect to the transactions contemplated hereby will be, Solvent. As used in
this paragraph, the term “Solvent” means, with respect to a particular date,
that on such date (A) the present fair market value (or present fair saleable
value) of the assets of Party B is not less than the total amount required to
pay the liabilities of Party B on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured,
(B) Party B is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (C) assuming consummation of the
transactions as contemplated by this Agreement, Party B is not incurring debts
or liabilities beyond its ability to pay as such debts and liabilities mature,
(D) Party B is not engaged in any business or transaction, and does not
propose to engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which Party B is engaged and (E) Party B
is not a defendant in any civil action that could reasonably be expected to
result in a judgment that Party B is or would become unable to satisfy.


(d)          
Neither Party B nor any “affiliated purchaser” of
Party B (as defined in Rule 10b-18 under the Exchange Act) shall take any
action that would cause any purchases of Shares by Party A during any Unwind
Period relating to any Cash Settlement or Net Share Settlement of the
Transaction not to comply with Rule 10b-18 under the Exchange Act.


(e)          
Party B is an “eligible contract participant” (as such
term is defined in Section 1a(12) of the Commodity Exchange Act, as amended)
and the Transaction was subject to individual negotiation.


(f)           
The representations and warranties of Party B
contained in the Underwriting Agreement and any certificate delivered pursuant
thereto by Party B shall be true and correct on the Effective Date as if made
as of the Effective Date.


(g)          
Party B is not and has not been the subject of any
civil proceeding of a judicial or administrative body of competent jurisdiction
that could reasonably be expected to impair materially Party B’s ability to
perform its obligations hereunder.


 


Covenants
of Party B:  Party B
hereby agrees that, so long as either party has or may have any obligation
under this Transaction, that:


 




	
  (a)

  	
   

  	
  Any Shares, when issued
  and delivered in accordance with the terms of the Transaction, will be duly
  authorized and validly issued, fully paid and nonassessable, and the issuance
  thereof will not be subject to any preemptive or similar rights.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Party B has reserved
  and will keep available, free from preemptive rights, out of its authorized
  but unissued Shares, solely for the purpose of issuance upon settlement of
  the Transaction as herein provided, the full number of Shares as shall then
  be issuable upon settlement of the Transaction.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Prior to any Settlement
  Date, the Settlement Shares with respect to that Settlement Date shall have
  been approved for listing or quotation on the Exchange, subject to official
  notice of issuance.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Party B agrees not to
  repurchase any Shares if, immediately following such repurchase, the Base
  Shares would be equal to or greater than 15% of the number of
  then-outstanding Shares.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Party B will not engage
  in any “distribution” (as defined in Regulation M under the Exchange Act) 

  






 


7

















 


other than distribution permitted under Rule 102 (c)
of Regulation M under the Exchange Act during any Unwind Period.


 


(f)        In
addition to any other requirements set forth herein, Party B agrees not to
elect Cash Settlement or Net Share Settlement if such settlement would result
in a violation of the U.S. federal securities laws or any other federal or
state law or regulation applicable to Party B.


 


(g)       Party B
will, by the fifth succeeding Exchange Business Day, notify Party A upon
obtaining knowledge of the occurrence of any event that would constitute an
Event of Default, a Potential Event of Default or a Potential Adjustment Event.


 


(h)       The
parties acknowledge and agree that any Shares delivered by Party B to Party A
on any Settlement Date will be newly issued Shares and when delivered by Party
A (or an affiliate of Party A) to securities lenders from whom Party A (or an
affiliate of Party A) borrowed Shares in connection with hedging its exposure
to the Transaction will be freely saleable without further registration or
other restrictions under the Securities Act in the hands of those securities
lenders, irrespective of whether such stock loan is effected by Party A or an
affiliate of Party A to hedge Party A’s exposure under the Transaction.
Accordingly, Party B agrees that the Settlement Shares that it delivers to
Party A on each Settlement Date shall not bear a restrictive legend and that
such Settlement Shares will be deposited in, and the delivery thereof shall be
effected through the facilities of, the Clearance System.


 


Covenants
and Representation of Party A:


(a)          
Party A shall use any Settlement
Shares delivered by Party B to Party A to return to securities lenders to close
out borrowings created by Party A (or an affiliate of Party A) in connection
with its hedging activities related to exposure under the Transaction. 


 


(b)          
In connection with bids and
purchases of Shares in connection with any Cash Settlement or Net Share
Settlement of the Transaction, Party A shall comply, or cause compliance, with
the provisions of Rule 10b-18 under the Exchange Act, as if such provisions
were applicable to such purchases.


 


(c)          
Party A is an “eligible contract
participant” (as such term is defined in Section 1a(12) of the Commodity
Exchange Act, as amended) and the Transaction was subject to individual
negotiation.


 


Acceleration
Events: An Acceleration Event shall occur
if:


 


(a)          
Stock Borrow Events.
Notwithstanding any other provision hereof, if in its commercially reasonable
judgment Party A (or its affiliate) is unable to hedge Party A’s exposure to
the Transaction (a “Stock Borrow Event”) because (i) of the lack of sufficient
Shares being made available for Share borrowing by lenders or (ii) it (or its
affiliate) would incur a stock loan cost of more than 60 basis points per
annum, Party A shall have the right to designate any Scheduled Trading Day to
be a Settlement Date on at least three Scheduled Trading Days’ notice, and to
select the number of Settlement Shares for such Settlement Date; provided that (x) prior to the effectiveness of the
designation of a Stock Borrow Event under this paragraph (a), Party B may refer
Party A to a lending party reasonably acceptable to Party A that will lend
Party A (or its affiliate) Shares within such three Scheduled Trading Day
period, on terms reasonably acceptable to Party A and at a stock loan cost of
no more than 60 basis points per annum and (y) the number of Settlement Shares
for any Settlement Date so designated by Party A shall not exceed the number of
Shares as to which such inability to, or cost limitation with respect to,
borrow exists; or


(b)          
Dividends and Other
Distributions. Notwithstanding any other provision hereof, if on any day
occurring after the Trade Date Party B declares a distribution, issue or
dividend to existing holders of the Shares of (i) any cash dividend to the
extent all cash dividends having an ex-dividend date during the period from and
including any Forward Price Reduction Date (with each of the Trade Date and the
Maturity Date being a Forward Price Reduction Date for purposes of this clause
(c) only) to but excluding the next subsequent Forward Price Reduction Date
exceeds, on a per Share basis, the Forward Price Reduction Amount set forth
opposite the first date of any such period on Schedule I or (ii) share capital
or securities of another issuer acquired or owned (directly or indirectly) by
Party B as a result of a spin-off or other similar transaction or (iii) any
other type of securities (other than Shares), rights or warrants or other
assets, which distribution, issue or dividend has a record date on or prior to 


 


8
















 


the final Settlement Date, then Party A shall have the
right to designate any Scheduled Trading Day to be a Settlement Date for the
entire Transaction on at least three Scheduled Trading Day’s notice, and to
select the number of Shares for such Settlement Date; or


(a)                      ISDA
Early Termination Date. Notwithstanding anything to the contrary herein, in
the Agreement or in the Definitions, if Party A has the right to designate an
Early Termination Date pursuant to Section 6 of the Agreement Party A shall
have the right to designate any Scheduled Trading Day to be a Settlement Date
for the entire Transaction on at least three Scheduled Trading Days’ notice; or


(b)                     Board
Approval of Merger. Notwithstanding any other provision hereof, if on any
day occurring after the Trade Date the board of directors of Party B votes to
approve, or there is a public announcement of, in either case any action that,
if consummated, would constitute a Merger Event (as defined in the Equity
Definitions), Party B shall notify Party A of any such vote or announcement
within three Scheduled Trading Days (and, in the case of any such vote, Party B
also covenants and agrees to publicly announce the occurrence of such vote
within three Scheduled Trading Days thereof). Thereafter, Party A shall have
the right to designate any Scheduled Trading Day to be a Settlement Date for
the entire Transaction on at least three Scheduled Trading Days’ notice; or


(c)                      Other
Events. Notwithstanding anything to the contrary herein, in the Agreement
or in the Equity Definitions, if an Insolvency, an Insolvency Filing, a
Nationalization, a Delisting (as provided further in the next sentence) or a
Change in Law (other than as specified in clause (Y) of the definition thereof)
occurs, Party A shall have the right to designate any Scheduled Trading Day to
be a Settlement Date for the entire Transaction on at least three Scheduled
Trading Days’ notice and Party A shall be the Determining Party. In addition to
the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also
constitute a Delisting if the Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any of the New
York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market
or the NASDAQ Global Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange, such
exchange shall be deemed to be the Exchange.


 


Termination Settlement:


 


If a Settlement Date is specified following an
Acceleration Event (a “Termination Settlement Date”), Physical Settlement shall
apply with respect to such Termination Settlement Date as set forth above,
subject to the provisions described under “Limit on Beneficial Ownership”
below.  If, upon designation of a
Termination Settlement Date by Party A, Party B fails to deliver the Settlement
Shares relating to such Termination Settlement Date when due or otherwise fails
to perform its obligations in connection therewith, it shall be an Event of
Default with respect to Party B and Section 6 of the Agreement shall
apply.  If an Acceleration Event occurs
during an Unwind Period relating to a number of Settlement Shares to which Cash
Settlement or Net Share Settlement applies, then on the Termination Settlement
Date relating to such Acceleration Event, notwithstanding any election to the
contrary by Party B, Cash Settlement or Net Share Settlement shall apply to the
portion of the Settlement Shares relating to such Unwind Period as to which
Party A has unwound its hedge and Physical Settlement shall apply in respect of
(x) the remainder (if any) of such Settlement Shares and (y) the Settlement
Shares designated by Party A in respect of such Termination Settlement Date.


 


Rule 10b5-1:


 


It is the intent of Party
A and Party B that the purchase of Shares by Party A during any Unwind Period
comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act and
that this Confirmation shall be interpreted to comply with the requirements of
Rule 10b5-1(c).


 


Party B acknowledges
that, except as otherwise provided herein, (i) during any Unwind Period Party B
does not have, and shall not attempt to exercise, any influence over how, when
or whether to effect purchases of Shares by Party A (or its agent or affiliate)
in connection with this Confirmation and (ii) Party B is entering into the
Agreement and this Confirmation in good faith and not as part of a plan or
scheme to evade compliance with federal securities laws including, without
limitation, Rule 10b-5 promulgated under the Exchange Act.


 


9

















 


Party B hereby agrees
with Party A that during any Unwind Period Party B shall not communicate,
directly or indirectly, any Material Non-Public Information (as defined herein)
to any Equity Personnel (as defined below). 
For purposes of this Transaction, “Material Non-Public Information”
means information relating to Party B or the Shares that (a) has not been
widely disseminated by wire service, in one or more newspapers of general
circulation, by communication from Party B to its shareholders or in a press
release, or contained in a public filing made by Party B with the Securities
and Exchange Commission and (b) a reasonable investor might consider to be of importance
in making an investment decision to buy, sell or hold Shares.  For the avoidance of doubt and solely by way
of illustration, information should be presumed “material” if it relates to
such matters as dividend increases or decreases, earnings estimates, changes in
previously released earnings estimates, significant expansion or curtailment of
operations, a significant increase or decline of orders, significant merger or
acquisition proposals or agreements, significant new products or discoveries, extraordinary
borrowing, major litigation, liquidity problems, extraordinary management
developments, purchase or sale of substantial assets, or other similar
information.  For purposes of this
Transaction, “Equity Personnel” means any employee in the Equities Trading
Division of UBS Securities LLC but does not include members of the Equity
Capital Markets Group or the Investment Banking Division.


 


Interpretive Letter:


 


The
parties intend for this Confirmation to constitute a “Contract” as described in
the letter dated October 6, 2003 submitted by Robert W. Reeder and Leslie N.
Silverman to Paula Dubberly of the staff of the Securities and Exchange
Commission (the “Staff”) to which the Staff responded in an interpretive letter
dated October 9, 2003.


 


Restricted Shares:


 


If
Party B is unable to comply with clause (h) of “Covenants of Party B” above in
this Section 3 because of a change in law or a change in interpretation or the
policy of the Securities and Exchange Commission or its staff, or Party A
otherwise determines in its reasonable, good faith opinion based on the advice
of outside counsel that any Shares to be delivered to Party A by Party B may
not be freely returned by Party A to securities lenders as described in clause
(h) of “Covenants of Party B” above in this Section 3, then the Calculation
Agent may, in consultation with Party B, make adjustments to the terms of the
Transaction to preserve the economic intent of the parties, including
adjustments to the Forward Price to reflect any lack of liquidity in restricted
Shares, and the parties shall work together in good faith to effect settlement
of the Transaction in a commercially reasonable manner and in compliance with
applicable law and regulations.


 


Maximum Share Delivery:


 


Notwithstanding any other
provision of this Confirmation, in no event will Party B be required to deliver
on any Settlement Date, whether pursuant to Physical Settlement, Net Share
Settlement or Termination Settlement, more than the number of Base Shares to
Party A, subject to reduction by the aggregate number of Shares delivered by
Party B on all prior Settlement Dates.


 


Assignment:


 


Party A may assign or
transfer any of its rights or delegate any of its duties hereunder to any
affiliate of Party A without the prior written consent of Party B, so long as
the senior unsecured debt rating (“Credit Rating”) of such affiliate (or any
guarantor of its obligations under the Transaction) is equal to or greater than
the Credit Rating of Party A, as specified by Standard and Poor’s Rating Services
or Moody’s Investor Service, Inc., at the time of such assignment or
transfer.  In connection with any
assignment or transfer pursuant to the immediately preceding sentence, the
guarantee of any guarantor of the relevant transferee’s obligation shall
constitute a Credit Support Document under the Agreement.  Notwithstanding any other
provision of this Confirmation to the contrary requiring or allowing Party A to
purchase or receive any Shares from Party B, Party A may designate any of its
affiliates to purchase or receive such Shares or otherwise to perform Party A’s



 


10

















 


obligations in respect of
the Transaction and any such designee may assume such obligations, and Party A
shall be discharged of its obligations to Party B only to the extent of any
such performance.


 


Matters Relating
to Agent: 


 


UBS Securities shall act as “agent” (the “Agent”) for Party A and Party
B within the meaning of Rule 15a-6 under the Exchange Act in connection with
the Transaction.  Each party agrees and
acknowledges that (i) the Agent acts solely as agent on a disclosed basis with
respect to the transactions contemplated hereunder, and (ii) the Agent has no
obligation, by guaranty, endorsement or otherwise, with respect to the
obligations of either Party B or Party A hereunder, either with respect to the
delivery of cash or Shares, either at the beginning or the end of the
transactions contemplated hereby.  In
this regard, each of Party A and Party B acknowledges and agrees to look solely
to the other for performance hereunder, and not to the Agent.


Indemnity:


 


Party B agrees to indemnify Party A and its affiliates and their
respective directors, officers, agents and controlling parties (Party A and
each such affiliate or person being an “Indemnified Party”) from and against
any and all losses, claims, damages and liabilities, joint and several,
incurred by or asserted against such Indemnified Party arising out of, in
connection with, or relating to, any breach of any covenant or representation
made by Party B in this Confirmation or the Agreement.  In addition, Party B will reimburse any
Indemnified Party for all reasonable expenses (including reasonable legal fees
and reasonable expenses) in connection with the investigation of, preparation
for, or defense of any pending or threatened claim or any action or proceeding
arising therefrom (whether or not such Indemnified Party is a party thereto) at
the time, and only to the extent that the relevant loss, claim, damage,
liability or expense is found in a final and nonappealable judgment by a court
of competent jurisdiction to have resulted from a breach of a covenant or
representation made by Party B in this Confirmation or the Agreement.  For the avoidance of doubt, Party B will not
be liable under this Indemnity paragraph to the extent that any loss, claim,
damage, liability or expense is found in a final and nonappealable judgment by
a court of competent jurisdiction to have resulted from Party A’s gross
negligence, fraud, bad faith and/or willful misconduct or a breach of any
representation or covenant of Party A contained in this Confirmation or
Agreement.


Miscellaneous:


Non-Reliance:                                                                                                                                                                                                                     Applicable


 


Additional Acknowledgements:                                                                                                                       Applicable


 


Agreements and
Acknowledgments Regarding


Hedging Activities:                                                                                                                                                                                        Applicable


 


4.     The Agreement is further supplemented by
the following provisions:


 


Agreement
Regarding Set-off and Collateral:


 


Notwithstanding
Section 6(f) or any other provision of the Agreement or any other agreement
between the parties to the contrary, the obligations of Party B hereunder are
not secured by any collateral. 
Obligations under the Transaction shall not be set off against any other
obligations of the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties hereto, by
operation of law or otherwise, and no other obligations of the parties shall be
set off against obligations under the Transaction, whether arising under the
Agreement, this Confirmation, under any other agreement between the parties
hereto, by operation of law or otherwise, and each party hereby waives any such
right of setoff.  In calculating any
amounts under Section 6(e) of the Agreement, notwithstanding anything to the
contrary in the Agreement, (a) separate amounts shall be calculated as set
forth in such Section 6(e) with respect to (i) the Transaction and (ii) all
other Transactions, and (b) such separate amounts shall be payable pursuant to
Section 6(d)(ii) of the Agreement.


 


11

















 


Status
of Claims in Bankruptcy:


 


Party
A acknowledges and agrees that this confirmation is not intended to convey to
Party A rights with respect to the transactions contemplated hereby that are
senior to the claims of common stockholders in any U.S. bankruptcy proceedings
of Party B; provided, however,
that nothing herein shall limit or shall be deemed to limit Party A’s right to
pursue remedies in the event of a breach by Party B of its obligations and
agreements with respect to this Confirmation and the Agreement; and provided
further, that nothing herein shall limit or shall be deemed to limit Party A’s
rights in respect of any transaction other than the Transaction.


 


Limit
on Beneficial Ownership:


 


Notwithstanding
any other provisions hereof, Party A shall not be entitled to receive Shares or
any other class of voting securities of Party B hereunder (whether in
connection with the purchase of Shares on any Settlement Date or any
Termination Settlement Date or otherwise) to the extent (but only to the
extent) that such receipt would result in the ultimate parent entity of Party A
directly or indirectly beneficially owning (as such term is defined for
purposes of Section 13(d) of the Exchange Act) at any time in excess of 4.9% of
the outstanding Shares or any other class of voting securities of Party B.  Any purported delivery hereunder shall be
void and have no effect to the extent (but only to the extent) that such
delivery would result in the ultimate parent entity of Party A directly or
indirectly so beneficially owning in excess of 4.9% of the outstanding Shares
or any other class of voting securities of Party B.  If any delivery owed to Party A hereunder is
not made, in whole or in part, as a result of this provision, Party B’s
obligation to make such delivery shall not be extinguished and Party B shall
make such delivery as promptly as practicable after, but in no event later than
one Clearance System Business Day after, Party A gives notice to Party B that
such delivery would not result in the ultimate parent entity of Party A
directly or indirectly so beneficially owning in excess of 4.9% of the
outstanding Shares or any other class of voting securities of Party B.  If Net Share Settlement would result in the
ultimate parent entity of Party A beneficially owning more than 4.9% of the
outstanding Shares in connection with closing out its hedge position, Party A
shall be allowed to partially settle the Transaction based on its purchase of
that amount of Shares, and then to purchase the amount or amounts of additional
Shares necessary to settle the remainder of the Transaction, and to make the
associated deliveries at such times as determined by the Calculation Agent.


 


Severability:  


 


If
any term, provision, covenant or condition of this Confirmation, or the
application thereof to any party or circumstance, shall be held to be invalid
or unenforceable in whole or in part for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in full force and
effect as if this Confirmation had been executed with the invalid or
unenforceable provision eliminated, so long as this Confirmation as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Confirmation and the deletion of such
portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement; provided,
however, that this severability provision shall not be applicable if
any provision of Section 2, 5, 6 or 13 of the Agreement (or any definition or
provision in Section 14 to the extent that it relates to, or is used in or in
connection with any such Section) shall be so held to be invalid or
unenforceable.


 


 


Miscellaneous:


 


(a)                      Addresses for
Notices. For the purpose of Section 12(a) of the Agreement:


 


                Address for notices or
communications to Party A:


 


	
  Address:

  	
   

  	
  UBS AG, London Branch

  
	
   

  	
   

  	
  c/o UBS Securities LLC

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10171

  
	
  Attention:

  	
   

  	
  Paul Stowell

  



 


12

















 


	
  Telephone No.:

  	
   

  	
  212-821-2100

  
	
  Facsimile No.:

  	
   

  	
  212-821-4610

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Equities Legal Department

  
	
   

  	
   

  	
  677 Washington Boulevard

  
	
   

  	
   

  	
  Stamford, CT 06901

  
	
  Attention:

  	
   

  	
  David Kelly and Gordon Kiesling

  
	
  Telephone No.:

  	
   

  	
  203-719-0268

  
	
  Facsimile No.:

  	
   

  	
  203-719-5627

  



 


                Address for notices or
communications to Party B:


 


	
  Address:

  	
  Westar
  Energy, Inc.

  
	
   

  	
  818
  South Kansas Avenue,

  
	
   

  	
  Topeka,
  Kansas 66612

  
	
   

  	
   

  
	
   

  	
  Attn:
  General Counsel

  
	
   

  	
  Tel: 785-575-1625

  
	
   

  	
  Fax: 785-575-8136

  
	
   

  	
   

  
	
   

  	
  Party
  B payment instructions:

  
	
   

  	
   

  
	
   

  	
  To
  Be Advised.

  



 


(b)                     Waiver
of Right to Trial by Jury. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to this Confirmation or any Agreement. Each party (i)
certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party would not, in the
event of such a suit action or proceeding, seek to enforce the foregoing waiver
and (ii) acknowledges that it and the other party have been induced to enter
into this Confirmation by, among other things, the mutual waivers and
certifications in this Section.


 


London
Branch:


 


Party
A is entering into this Confirmation and the Agreement through its London
branch.  Notwithstanding the foregoing,
Party A represents to Party B that the obligations of Party A are enforceable
against it to the same extent as if it had entered into this Confirmation and
the Agreement through its head or home office in Zurich.


 


13

















 


 


Please
confirm that the foregoing correctly sets forth the terms of our agreement by
signing and returning this Confirmation.


 


	
   

  	
   

  
	
   

  	
  Yours
  faithfully,

  
	
   

  	
   

  
	
   

  	
  UBS
  AG, LONDON BRANCH

  
	
   

  	
   

  
	
  By:

  	
   /s/ Paul Stowell

  
	
   

  	
  Name:
  Paul Stowell

  
	
   

  	
  Title:
  Associate Director, Equity Risk Management

  
	
   

  	
   

  
	
  By:

  	
   /s/ Dmitriy Mandel

  
	
   

  	
  Name:
  Dmitriy Mandel

  
	
   

  	
  Title:
  Executive Director, Equity Risk Management

  



 


 


Confirmed
as of the date first written above:


 


	
  WESTAR
  ENERGY, INC.

  
	
   

  	
   

  
	
  By:

  	
   /s/ Mark A. Ruelle

  
	
   

  	
  Name:
  Mark A. Ruelle

  
	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
  Accepted
  and Agreed by:

  
	
   

  	
   

  
	
  UBS
  SECURITIES LLC, as agent

  
	
   

  	
   

  
	
  By:

  	
   /s/ Paul Stowell

  
	
   

  	
  Name:
  Paul Stowell

  
	
   

  	
  Title:
  Associate Director, Equity Risk Management

  
	
   

  	
   

  
	
  By:

  	
   /s/ Dmitriy Mandel 

  
	
   

  	
  Name:
  Dmitriy Mandel

  
	
   

  	
  Title:
  Executive Director, Equity Risk Management

  



 


14