<PAGE>


                                                                    Exhibit 10.2

                             UTILICORP UNITED INC.

                      ANNUAL AND LONG-TERM INCENTIVE PLAN

INTRODUCTION:   The following sets forth the Annual and Long-Term Incentive
                Plan for UtiliCorp United Inc. which amends and restates the
                Annual Incentive Plan effective January 1, 1986 and expands
                it to include the Long-Term Incentive Plan, effective as of
                January 1, 1994.

(A)   Plan Purposes

      The key purposes of the Plan are as set forth below.

      1.    To encourage and reward both annual and long-term sustained
            performance above the level of performance that would be expected
            at a fully competent level, thereby enabling the Company to
            continue to provide outstanding service to its ratepayers and
            other customers while enhancing the value of the Company for
            its stockholders.

      2.    Further, to provide competitive levels of cash compensation for
            key employees to assure the Company of the necessary talent for
            future success, and to directly link a significant portion of
            such compensation to those performance results most directly
            impacted by such key employees.

      3.    Further, to permit the payment of a significant portion of the
            Plan awards on a deferred basis with appropriate vesting
            requirements to assist the Company in retaining the services
            of key employees and, by using Restricted Stock for such deferral,
            to enhance the ownership interest of key employees for the benefit
            of Company stockholders.

(B)   Definitions

      1.    "Annual Award" shall mean the payment received annually by a Plan
            Participant whether paid in cash or shares of Restricted Stock as
            described in Section (F) below.

      2.    "Award" shall mean the payment of an Annual Award or Long-Term
            Award.

      3.    "Board" shall mean the Board of Directors of the Company.

      4.    "Committee" shall mean the Compensation Committee of the Board.

      5.    "Company" shall mean UtiliCorp United Inc., and its divisions,
            subsidiaries and affiliated organizations approved for
            participation.


<PAGE>


      6.    "Designated Beneficiary" shall mean the person, or persons as
            elected by the Participant (or designated by the Company in
            the absence of such election) to receive any payments, whether
            in cash or shares of Restricted Stock due from the Plan in the
            event of a Participant's death.

      7.    "Discretionary Annual Award" shall have the meaning described
            in Section (F), below.

      8     "Discretionary Annual Award Pools" shall have the meaning set out
            in Section (F), below.

      9.    "Long-Term Award" shall mean the payment received hereunder,
            either in cash and/or shares of Restricted Stock following
            completion of a Long-Term Award Cycle.

      10.   "Long-Term Award Cycle" shall mean a period of three or more
            consecutive calendar years during which cumulative Performance
            Awards are set.

      11.   "Effective Date" shall mean January 1, 1994.

      12.   "Participant" or "Plan Participant" shall mean a key managerial,
            professional or technical employee approved for Plan membership
            by the Board (or the Committee) with respect to any Plan Year.

      13.   "Performance Goals" shall have the meaning set forth in
            Paragraphs (F) and (H) below.

      14.   "Plan" shall mean the UtiliCorp United Inc. Annual and Long-Term
            Incentive Plan as described herein or amended hereafter.

      15.   "Plan Year" shall mean January 1 through December 31, the calendar
            year, which corresponds with the Company's fiscal year.

      16.   "Restricted Stock" shall mean shares of the Company's common stock
            awarded to Participants under the UtiliCorp United Inc. 1986 Stock
            Incentive Plan or any successor plan providing for the grant of
            Restricted Stock.

(C)   Plan Administration

      1.    The Company shall be responsible for the general administration
            of the Plan.

      2.    The Board or, at the Board's direction, the Committee shall be
            responsible for monitoring the ongoing use of the Plan and shall:

            (a)    review Company recommendations with respect to all
                   necessary actions;


<PAGE>


            (b)    review Company recommendations for any amendments to the
                   Plan; and

            (c)    approve all Annual Awards and Long-Term Awards under
                   the Plan and monitor the use of Discretionary Annual
                   Award Pools.

(D)   Board (or Committee) Powers

      1.    The Board, acting upon the advice and counsel of the Committee,
            or the Committee itself if so empowered by the Board, shall have
            the following powers with respect to the Plan.

            (a)    Annual approval of: Participants; opportunity levels;
                   the basis of Awards; and the method of payment for
                   such Awards including the use and content of written
                   agreements for Restricted Stock Awards.

            (b)    The right to review, amend, and authorize any
                   Performance Goals or other factors used to determine
                   Annual Awards, Long-Term Awards and the Discretionary
                   Annual Award Pools for any division or unit of the
                   Company as described in Section (F) below.

            (c)    The right to retroactively adjust any aspect of the Plan
                   for an already completed or ongoing Plan Year if in the
                   Board's (or Committee's) judgment significant events
                   outside of the control of Plan Participants have occurred
                   which require such adjustment if the Plan is to effectively
                   serve its purposes.

            (d)    The right to receive an annual summary of all Awards paid
                   for each Plan Year and pertinent information with respect
                   to all Restricted Stock Awards, plus such other information
                   as it may reasonably request.

            (e)    The right to amend or discontinue the Plan at any time if
                   such action is deemed to be in the best interests of the
                   Company, its ratepayers and its stockholders. In such event
                   an appropriate and equitable resolution of Awards in the
                   process of being earned during a Plan Year shall be made.

(E)   Plan Participation

      1.    Each Plan Year all full-time employees shall be eligible to
            participate in the Plan with respect to the receipt of
            Discretionary Annual Awards pursuant to Section (F) below.

      2.    With respect to Annual Awards and Long-Term Awards pursuant to
            Section (F) below, participation shall be limited to those
            managerial, professional, or 


<PAGE>


            technical employees who are key employees approved for
            participation by the Committee.

      3.    To the extent separate incentive arrangements are established
            for various divisions or units of the Company, participation
            may include the eligibility for an Annual Award or Long-Term Award
            from one or more of such separate arrangements as the Board
            (or Committee) may determine.

      4.    Participation for an Annual Award or Long-Term Award in one Plan
            Year does not automatically qualify an employee for participation
            in subsequent years nor does participation in a separate incentive
            arrangement for one division or unit automatically qualify an
            employee for participation in any other such arrangements.

      5.    Subject to special action by the Board (or Committee) pursuant to
            subsection (6) below, participation for otherwise eligible employees
            whose status changes during a Plan Year shall be determined by the
            Chief Executive Officer of the Company, in accordance with
            the following.

            (a)    Voluntary Termination of Employment, or Termination at the
                   Request of the Company. In such event a Participant shall
                   forfeit all rights to any Award from the Plan for the Plan
                   Year in which such termination occurs.

            (b)    Death, Retirement, or Total Disability. In such event a
                   Participant (or his or her estate) shall be entitled to a
                   pro-rata Award, if any, for the Plan Year in which such
                   event occurs.

                   (i)    Such Awards shall be determined when all other Awards
                          are determined for the applicable Plan Year.

                   (ii)   "Pro-rata" shall mean the Award for the entire Plan
                          Year multiplied by a fraction the numerator of which
                          is the Participant's days of full-time active
                          employment (counting any days on short-term
                          disability or salary continuation) during the
                          Plan Year and denominator of which is 365.

                   (iii)  "Total Disability" shall mean the date of
                          commencement of payments under the Company's
                          long-term disability plan applicable to the
                          Participant.

                   (iv)   "Retirement" shall mean the cessation of active
                          employment and the effective date of normal, later,
                          or early Retirement under the Company's retirement
                          or pension plan applicable to the


<PAGE>


                          Participant but not a termination of employment with
                          vested rights under any such plan.

            (c)    Hire or Promotion During a Plan Year. Provided such event
                   occurs within the first nine months of any Plan Year
                   participation may be authorized for a pro-rata Annual Award
                   or Long-Term Award subject to Board (or Committee) approval
                   with respect to the opportunity levels and Performance
                   Goals.

                   Actions taken by the Chief Executive Officer of the
                   Company in accordance with the above do not require Board
                   (or Committee) approval.

      6.    Based upon the recommendation of the Company the Board
            (or Committee) may authorize actions other than those set forth
            in subsection (5) above to address unusual circumstances.

      7.    Regardless of any other provision of the Plan a Participant
            whose personal, individual, performance for any Plan Year is
            determined to be unsatisfactory shall forfeit all rights to an
            Award for such Plan Year. This determination shall be made by
            the Chief Executive Officer of the Company with respect to
            employees not assigned to a specific unit or division and by
            the chief executive officer of the Participant's division or
            unit in all other cases, subject to the approval of the Chief
            Executive Officer of the Company.

(F)   Types of Awards

      1.    There are three types of Awards payable under the Plan:
            a Annual Award, a Long-Term Award and a Discretionary
            Annual Award.

      2.    Annual Awards and Long-Term Awards are available only to key
            employees specifically approved as eligible for such Awards
            and payment with respect thereto shall be based on the
            achievement of specific Performance Goals established for
            each Participant.

            (a)    Performance Goals may be set for the Company as a whole,
                   for each division or unit, or for individual performance
                   criteria.

            (b)    Such Performance Goals can be established on the basis of
                   specific numeric standards (e.g. return on net assets) or
                   as one or more objectives or results for which performance
                   achievements shall be determined on a discretionary,
                   subjective basis by an appropriate individual, subject to
                   Section (H), below.

            (c)    For any Plan Year the Annual Award or Long-Term Award for
                   any Participant shall have a set maximum amount,
                   expressed as a percentage 


<PAGE>


                   of annual salary and/or a dollar amount, as approved by
                   the Board (or Committee); and set Award amounts may also
                   be established at other performance levels such as
                   threshold and par with or without provision for
                   pro-ration.

            (d)    Specific Board (or Committee) approval is required annually
                   for the payment of Awards.

            (e)    As approved by the Board (or Committee) for any Plan Year the
                   Annual Award or Long-Term Award payable may be subject to
                   either or both of the criteria set forth below.

                   (i)    A "Stockholder (or Corporate) Protection Trigger"
                          which establishes a minimum level of performance,
                          or otheraction (e.g. the distribution of a level
                          of dividends), which must be achieved before any
                          Awards are payable for a Plan Year.

                   (ii)   A "Ratepayer Protection Feature" which establishes
                          a schedule of absolute or relative performance
                          relating to the quality or cost of service provided
                          by the Company (or division or unit) against which
                          actual results will be compared for the Plan Year
                          with the resulting comparison used to modify, or
                          eliminate, Total Awards otherwise payable for such
                          Plan Year.

            (f)    Each Participant approved for an Award shall receive a
                   written description of his or her opportunity and
                   applicable Performance Goals.

      3.    "Discretionary Awards" are available to any full-time employee
            of the Company except the Chief Executive Officer of the Company.

            (a)    Such Discretionary Awards shall be payable from a
                   Discretionary Award Pool established annually for each
                   division or unit and the sum of such Awards for the
                   employees in any unit or division for any Plan Year cannot
                   exceed the pool approved by the Board (or Committee) for
                   such division or unit. The pool established for employees
                   not assigned to a division or unit shall be used for any
                   Discretionary Award payable to the respective chief
                   executive officers of the Company's participating divisions
                   or units. The minimum Discretionary Award, if any, is $500
                   and the maximum Discretionary Award is ten percent of the
                   employee's then existing annual base salary rate.

            (b)    Discretionary Awards shall be determined subjectively
                   by the chief executive officer or each division or unit,
                   subject to the approval of the Chief Executive Officer of
                   the Company and shall be used to recognize outstanding
                   individual performance, the accomplishment of a specific


<PAGE>


                   task in an exemplary manner, or for individuals who made an
                   inordinately significant contribution to overall divisional,
                   unit or Company-wide results.

            (c)    The total Discretionary Award Pool authorized for any
                   division or unit need not be spent for any Plan Year.
                   Unallocated Pool funds are not carried forward for
                   subsequent Plan Years.

(G)   Payment of Awards

      1.    Discretionary Awards shall be payable in cash.

      2.    Annual Awards and Long-Term Awards shall be payable in cash,
            Restricted Stock, or any combination thereof as approved by the
            Board (or Committee) for any individual Participant in any Plan
            Year; provided that payment in the form of Restricted Stock shall
            be approved by the Committee.

(H)   Compliance with Section 162(m) Requirements.

      Subject to the discretion of the Board (or the Committee) to determine
      that it would be in the best interests of the shareholders to do
      otherwise, the Plan shall at all times be administered to ensure that
      any Award under the Plan to the Company's Chief Executive Officer and
      the four highest compensated officers (determined pursuant to the
      executive compensation disclosure rules under the Securities Exchange
      Act of 1934) (each a "Covered Employee") will be tax deductible. In
      furtherance of this goal, with respect to Awards payable under the Plan
      for Covered Employees, the Performance Goals established by the
      Committee may vary from one Covered Employee to another, and will be
      limited to certain business criteria measured by one or more of the
      following: revenues, units sold, operating income, operating company
      contribution, cash flow, income before taxes, net income, earnings
      available per share, return on equity, return on assets, Economic Value
      Added (EVA) or total return to stockholders, whether applicable to the
      Company or any relevant subsidiary or business unit, or combination
      thereof, as the Committee may deem appropriate, or any of the above
      goals as compared to the performance of a published or special index
      deemed appropriate by the Committee, including, but not limited to, the
      Standard & Poor's 500 Stock Index or a group of comparator companies.
      The criteria selected by the Committee shall include a minimum
      performance standard below which no payments will be made and a maximum
      performance level above which no increased payment will be made.
      Notwithstanding the foregoing, in no event may any Performance Goals be
      established which would permit a Covered Employee to receive a single
      Annual Award or a Long-Term Award of more than 400% of such Covered
      Employee's base annual compensation as of January 1 for the year in
      which an Award is paid. No payment of any Award may be made to any
      Covered Employee unless the

<PAGE>


      material terms of the Performance Goal under which the compensation is 
      to be paid have been approved by shareholders of the Company and the 
      Committee has certified in writing that the Performance Goals and any 
      other material terms of the Award were in fact satisfied.

(I)   Miscellaneous and Administrative Provisions

      1.    All Participants shall be entitled to receive a copy of the
            Plan and any amendments made subsequent to its Effective Date.

      2.    The Plan shall be binding upon and inure to the benefit of the
            Participants (and their personal representatives), the Company
            and any successor organization or organizations which shall
            succeed to substantially all of the business and property of
            the Company, whether by means of merger, consolidation,
            acquisition of substantially all of the assets of the Company
            or otherwise, including by operation of law.

      3.    All amounts used for Plan purposes shall be rounded to the
            nearest whole dollar.

      4.    Awards whether in cash or Restricted Stock shall not be subject
            to assignment, pledge, lien, or encumbrances of any kind.

      5.    Participation in the Plan does not guarantee employment by the
            Company.

      6.    Awards shall not be used for any purposes for any employee
            benefit plan of the Company.

      7.    The Plan shall be interpreted under the laws of the State of
            Missouri.