UTILICORP UNITED INC, DEF 14A, 1998-03-13

UTILICORP UNITED INC
DEF 14A, 1998-03-13
ELECTRIC & OTHER SERVICES COMBINED

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

UTILICORP UNITED INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
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[LOGO]

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1998
------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of UtiliCorp
United Inc. will be held in the Imperial Ballroom of the Muehlebach Tower of the
Kansas City Downtown Marriott, 12th & Wyandotte on Wednesday, May 6, 1998, at
2:00 p.m. (Kansas City time), on that date and thereafter as it may from time to
time be adjourned, for the following purposes:

1. To elect three Directors of the Company to hold office for three
years, and until their successors have been duly elected and qualified.

2. To consider and act upon a proposal to amend the Amended and
Restated 1986 Stock Incentive Plan to allow the issuance of an additional
2,000,000 shares pursuant to the plan.

3. To consider and act upon a proposal to amend the UtiliCorp United
Inc. Annual and Long-Term Incentive Plan.

4. To consider and act upon a proposal to amend the Certificate of
Incorporation to increase the number of authorized shares of common stock to
200,000,000.

5. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company to allow the Board to designate voting rights
for preference stock.

6. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company to increase the number of shares required to
call a special meeting.

7. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company to eliminate cumulative voting.

8. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company to provide for removal of board members only
for cause.

9. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.

The Company's stock transfer books will not be closed for this meeting, but
in lieu thereof the Board of Directors has fixed the close of business March 9,
1998, as the record date for the determination of the stockholders entitled to
notice of and to vote at this meeting or any adjournment or postponement
thereof.

BY ORDER OF THE BOARD OF DIRECTORS

[SIGNATURE]

Dale J. Wolf

VICE PRESIDENT AND CORPORATE SECRETARY

March 16, 1998

IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL
BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
<PAGE>
UTILICORP UNITED INC.
P.O. BOX 13287
KANSAS CITY, MISSOURI 64199-3287

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

PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 6, 1998

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

GENERAL

The enclosed Proxy is solicited by the Board of Directors of UtiliCorp
United Inc. (hereinafter referred to as the "Company" or "UCU") for use at the
Annual Meeting of Stockholders to be held in the Imperial Ballroom of the
Muehlebach Tower of the Kansas City Downtown Marriott, 12th & Wyandotte at 2:00
p.m., (Kansas City time), on Wednesday, May 6, 1998, for the purposes set forth
in the foregoing Notice of Annual Meeting of Stockholders. This proxy statement
and the form of proxy will be mailed to stockholders on or about March 20, 1998.
A stockholder giving a proxy has the power to revoke it at any time prior to its
exercise by notifying the Corporate Secretary of the Company. Unless the proxy
is revoked, or unless it is received in such form as to render it invalid, the
shares represented by it will be voted in accordance with the instructions
contained therein.

On March 9, 1998, there were 53,696,839 shares of common stock, par value $1
per share (hereinafter referred to as "Common Stock"), of the Company
outstanding, each share of such stock being entitled to one vote, except that
each stockholder on the vote for nominees for election of Directors is entitled
to exercise the right of cumulative voting. Cumulative voting entitles the
stockholder to cast as many votes as shall equal the number of shares owned
multiplied by the number of Directors to be elected, and to cast all of such
votes for a single Director, or to distribute the votes among those to be voted
for. The three nominees for election as Directors who receive the greatest
number of votes cast, a quorum (the majority of the shares entitled to vote)
being present in person or by proxy, shall become Directors at the conclusion of
the tabulation of votes. The abstention or failure to vote shares so present and
broker nonvotes do not have the effect of a vote "against" a nominee or
Proposals 2 or 3 since only a plurality of votes cast (rather than of votes
present) is necessary to elect a director or pass such Proposals. The approval
of the holders of a majority of all outstanding shares entitled to vote at the
Annual Meeting is required for approval of the amendments to the Certificate of
Incorporation (Proposals 4, 5, 6, 7 and 8). Accordingly, an abstention or broker
non-vote on any of these proposals will have the same legal effect as a vote
against such proposal. The votes are counted and certified by one or more
inspectors appointed by the Company in advance of the Annual Meeting of
Stockholders in accordance with Delaware General Corporation Law. No shares of
any other class of the Company's stock are entitled to vote. The Board of
Directors has fixed March 9, 1998, as the record date for the determination of
the stockholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
<PAGE>
INFORMATION WITH RESPECT TO DIRECTORS

<TABLE>
<CAPTION>
YEAR PRINCIPAL OCCUPATION YEAR FIRST
TERM OR EMPLOYMENT AND ELECTED
NAME EXPIRES POSITION WITH THE COMPANY OR APPOINTED AGE
- -------------------------------- ----------- -------------------------------------------------- --------------- ---
<S> <C> <C> <C> <C>
Richard C. Green, Jr........... 2000 Chairman of the Board and Chief Executive Officer 1982 43
of the Company
Avis G. Tucker................. 2000 Editor and Publisher of The Daily Star-Journal, 1973 82
Warrensburg, Missouri
L. Patton Kline................ 2000 Retired Vice Chairman of Marsh & McLennan, Inc., 1986 69
New York, New York
*John R. Baker.................. 1998 Retired Vice Chairman of the Board of the Company 1971 71
*Dr. Stanley O. Ikenberry....... 1998 President of the American Council on Education, 1993 63
Washington, D.C.
*Irvine O. Hockaday, Jr......... 1998 President and Chief Executive Officer of Hallmark 1995 61
Cards, Inc., Kansas City, Missouri
Robert F. Jackson, Jr.......... 1999 Retired President of CharterCorp, Kansas City, 1981 72
Missouri
Herman Cain.................... 1999 Chairman of the Board of Godfather's Pizza, Inc., 1992 52
Omaha, Nebraska
Robert K. Green................ 1999 President and Chief Operating Officer of the 1993 36
Company
</TABLE>

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

* Nominee for election as Director at this meeting.

Richard C. Green, Jr. has served as Chairman of the Board since February
1989 and Chief Executive Officer of the Company since May 1985 and served as
President of the Company from May 1985 through February 1996. Mr. Green is a
director of BHA Group, Inc., Kansas City, Missouri and CAT, Ltd., Bermuda.

Avis G. Tucker served as Chairman of the Board of the Company from May 1982
through February 1989 and has been editor and publisher of The Daily-Star
Journal in Warrensburg, Missouri during the past five years. Mrs. Tucker
previously served as a director of United Telecommunications, Inc.

L. Patton Kline retired as Vice Chairman of Marsh & McLennan, Incorporated
(an international insurance brokerage company), a subsidiary of Marsh & McLennan
Companies, Inc., in 1988, a position he held for four years. He was President of
Marsh & McLennan Companies, Inc. from 1980 to 1985. Mr. Kline served as a
director of Marsh & McLennan Companies, Inc. from 1975 to 1988.

John R. Baker retired as Vice Chairman of the Board in December 1995, a
position he held since May 1991. He also served as Senior Vice President of the
Company from May 1985 through December 1992.

Stanley O. Ikenberry, Ph.D., is President of the American Council on
Education and Regent Professor and President Emeritus of the University of
Illinois. He previously served as President of the University from 1979 to 1995.
Dr. Ikenberry serves as a director of Pfizer, Inc. Dr. Ikenberry also serves as
a member of the Board of the Carnegie Foundation for the Advancement of
Teaching.

Irvine O. Hockaday, Jr. has served as President and Chief Executive Officer
of Hallmark Cards, Inc. since January 1986 and served as Executive Vice
President of Hallmark Cards, Inc. from 1983 through December 1985. Mr. Hockaday
serves as Trustee of the Hall Foundation and the Aspen Institute and is a
director of the Ford Motor Company and Dow Jones, Inc.

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Robert F. Jackson, Jr. retired as President of CharterCorp (a bank holding
company) in 1985. Mr. Jackson has served as a director on the boards of various
Missouri banks.

Herman Cain is Chairman of the Board of Godfather's Pizza, Inc. in Omaha,
Nebraska. He has been with Godfather's Pizza, Inc. for the past ten years. Mr.
Cain also serves as Chief Executive Officer of the National Restaurant
Association and is a director of Nabisco Holdings Corp., SUPERVALU, INC. and the
Whirlpool Corporation.

Robert K. Green has served as President of the Company since February 1996,
and earlier served as Managing Executive Vice President of the Company from
January 1993 to February 1996. He has held several executive positions at the
Company's Missouri Public Service division since 1988, including two years as
President. Mr. Green is Co-Chairman of the Kansas City Area Development Council,
President of the Heart of America Council, Boy Scouts of America and a director
of UMB Bank, n.a.

Richard C. Green, Jr. and Robert K. Green are brothers and are nephews of
Avis G. Tucker.

The Audit Committee of the Board of Directors presently consists of L.
Patton Kline, Dr. Stanley O. Ikenberry and Robert F. Jackson, Jr. The function
of the committee is to make recommendations concerning the selection each year
of independent auditors of the Company, to review the effectiveness of the
Company's internal auditing methods and procedures, to determine through
discussions with the independent auditors whether any instructions or
limitations have been placed upon them in connection with either the scope of
the audit or its implementation, to review the financial statements and related
notes with the independent auditors to ensure such statements and notes fully
disclose all material affairs of the Company and to recommend approval or
non-approval of such financial statements and related notes.

The Pension Committee consists of Avis G. Tucker, John R. Baker and Robert
K. Green. The function of the committee is to establish and administer the
Company's retirement plan and certain other related employee benefit plans.

The Compensation Committee consists of Irvine O. Hockaday, Jr., L. Patton
Kline and Herman Cain. The function of the committee is to review and make
recommendations to the Board of Directors regarding policies, practices and
procedures relating to compensation of key employees, and the establishment and
administration of compensation plans.

The Nominating Committee consists of Dr. Stanley O. Ikenberry, Avis G.
Tucker, Irvine O. Hockaday, Jr., John R. Baker and Herman Cain. The function of
the committee is to receive, review and maintain files of individuals qualified
to be recommended as nominees for election as Directors of the Company. The
Nominating Committee will consider candidates for the Board of Directors
suggested by stockholders. Stockholders desiring to suggest candidates should
advise the Secretary of the Company in writing by December 31 of the year
preceding the annual meeting of stockholders and include sufficient biographical
material to permit an appropriate evaluation.

During 1997, the Board of Directors met eight times, the Audit Committee met
two times, the Pension Committee met three times and the Compensation Committee
met two times. The Nominating Committee did not meet during 1997. All Directors
attended at least 75% of the meetings of the Board and the committees on which
they served.

Each non-employee Director receives an annual fee of $35,000. Additionally,
each non-employee Director annually receives $20,000 in shares of Company Common
Stock pursuant to the 1990 Non-Employee Director Stock Plan. Directors who are
employees receive no annual fee nor shares of Company Common Stock for serving
on the Board or any of its committees. Non-employee Directors are paid a fee of
$1,000 for each Board of Directors meeting attended plus reimbursement by the
Company for all travel expenses incurred in attending such meetings.
Non-employee Directors who are members of Board Committees receive an annual fee
of $2,500 plus reimbursement for all travel expenses. Directors may

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elect to defer all or a part of their Directors' fee under a deferred
compensation plan maintained by the Company.

VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS

Furnished below is information as to the beneficial ownership of Common
Stock as of December 31, 1997, for (a) each Director of the Company, (b) each of
the six named Executive Officers and (c) Executive Officers as a group. The
beneficial owner has sole voting and investment power over the shares shown,
unless otherwise indicated.

<TABLE>
<CAPTION>
NUMBER
NAME OF INDIVIDUAL OR GROUP OF SHARES PERCENT OF CLASS(1)
- ------------------------------------------------------ ---------- ------------------------------
<S> <C> <C>
Richard C. Green, Jr.................................. 1,933,807 3.6%(2)(4)(6)
Avis G. Tucker........................................ 40,814 --(3)(5)
L. Patton Kline....................................... 6,439 --
John R. Baker......................................... 151,707 --(4)
Dr. Stanley O. Ikenberry.............................. 3,814 --
Irvine O. Hockaday, Jr................................ 2,070 --
Robert F. Jackson, Jr................................. 19,306 --
Herman Cain........................................... 3,339 --
Robert K. Green....................................... 1,587,112 2.9%(2)(6)
Harvey J. Padewer..................................... 10,656 --(6)
James G. Miller....................................... 90,295 --(6)
Charles K. Dempster................................... 86,081 --(6)
Terry G. Westbrook.................................... 723 --(7)
Directors and Executive Officers--as a group (20
persons)............................................ 2,384,679 4.4%(2)(3)(4)(6)
</TABLE>

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

(1) Percentages are omitted for Directors and Executive Officers who own less
than 1% of Common Stock.

(2) Includes 1,411,703 shares held by the Green Family UCU Limited Partnership
of which Richard C. Green, Jr. and Robert K. Green are general partners with
shared voting power.

(3) Mrs. Tucker is a trustee of trusts which hold a part of the limited
partnership units of the Green Family UCU Limited Partnership and shares
voting and investment power with other trustees with respect to the units
held in such trusts. Such units may be voted together with other limited
partnership units to approve or disapprove any disposition of part or all of
the 1,411,703 shares of the Company's Common Stock held by the partnership
and may also be voted together with other limited partnership units to
direct the voting of such Company Common Stock on certain matters.

(4) Includes 128,726 shares held in trust for the benefit of Mrs. Tucker, of
which Mr. Richard C. Green, Jr. and Mr. Baker are trustees with voting and
investment power.

(5) Excludes 128,726 shares held in trust for the benefit of Mrs. Tucker, of
which Mr. Richard C. Green, Jr. and Mr. Baker are trustees with voting and
investment power.

(6) Includes shares which may be acquired through the exercise of vested
employee stock options as follows: Mr. Richard C. Green, Jr., 210,865
shares; Mr. Robert K. Green, 82,644 shares; Mr. Padewer, 0 shares; Mr.
Dempster, 61,432 shares; Mr. Miller, 54,472 shares; and Executive Officers
not listed in the table as a group, 76,476 shares.

(7) Mr. Westbrook resigned from the Company on May 19, 1997.

4
<PAGE>
Richard C. Green, Jr., Robert K. Green, Avis G. Tucker, members of their
family and trusts for the benefit of members of the Green family owned as of
December 31, 1997, 2,190,000 shares or approximately 4.0% of the outstanding
shares of Common Stock of the Company. This number includes shares held by the
Green Family UCU Limited Partnership.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The primary role of the Company's Compensation Committee (the "Committee")
is to determine and oversee the administration of compensation for the Company's
executive officers. In this capacity, the Committee is dedicated to ensuring
that the Company's compensation policies and practices are used effectively to
support the achievement of the Company's short-and long-term business
objectives.

To preserve objectivity in the achievement of its goals, the Committee is
comprised of three independent, non-employee directors who have no
"interlocking" relationships as defined by the Securities and Exchange
Commission (the "SEC"). It is the Committee's overall goal to develop executive
compensation policies that are consistent with, and linked to, strategic
business objectives and Company values. The Committee approves the design of,
assesses the effectiveness of, and administers executive compensation programs
in support of compensation policies. The Committee also reviews and approves all
salary arrangements and other remuneration for executives, evaluates executive
performance and considers related matters.

On October 15, 1992, the SEC amended the proxy statement rules regarding the
disclosure of executive compensation. The new rules require a report on
executive compensation to be submitted by the compensation committee of the
Board of Directors. The purpose of the report is to inform shareholders of the
Committee's compensation policies for executive officers and the rationale for
compensation paid to the Chief Executive Officer (the "CEO"). This report,
submitted by the Compensation Committee, follows:

COMPENSATION PHILOSOPHY

The Company's overall compensation philosophy is to remain competitive with
comparable companies while focusing on performance-based compensation. This
philosophy is premised on the fact that the Company must compete with a wide
variety of utilities and energy companies (and often well beyond that) in order
to attract and develop a pool of talented employees. The philosophy also
recognizes the need to focus on the Company's financial performance. The
Company's compensation philosophy is premised on the following factors:

- - Pay competitively with significant focus on incentive compensation;

- - Design programs that support the Company's business strategy;

- - Develop plans which more closely tie the compensation of the Company's
executives to the Company's performance;

- - Design compensation programs which more closely tie the compensation of
executives to the interests of the Company's stockholders; and

- - Have programs that can attract new talent and retain key people.

To further establish a close link between the Company's executives and its
shareholders, the Company has established an objective for senior executives to
own at least one to five times their annual base salary in Company stock.

As part of its overall compensation philosophy, the Committee has determined
appropriate target levels for base salary, annual incentives, and long-term
compensation. The Committee has determined that base salaries should be targeted
at the 50th percentile of the market and that individual pay determinations

5
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will be based on individual responsibilities and contributions. Annual
incentives will be targeted at the 75th percentile of market with opportunities
to attain the 90th percentile as a maximum for superior performance. Long-Term
compensation will generally consist of a mix of stock options and performance
units with the level of aggregate awards to be at the 75th percentile of market
when performance targets are achieved. Total compensation (base salary, annual
incentives, and long-term compensation) will consist of a mix of the components
with a strong emphasis on variable pay. The Committee believes these targeted
levels are consistent with the Company's overall compensation philosophy.

Competitive market data is provided by an independent compensation
consultant. The data provided compares the Company's compensation practices to a
group of comparator companies. The Company's market for compensation comparison
purposes is comprised of a group of companies which tend to have similar
business operations, revenues, market capitalizations, employment levels, and
lines of business. The Committee reviews and approves the selection of companies
used for compensation comparison purposes.

The companies chosen for the comparator group used for compensation purposes
generally are not the same companies which comprise the peer group index in the
Performance Graph included in this proxy statement. The Committee believes that
the Company's most direct competitors for executive talent are not necessarily
all of the companies that would be included in a peer group established for
comparing shareholder returns.

ELEMENTS OF COMPENSATION

The key elements of the Company's executive compensation are base salary,
annual incentives, long-term compensation, and benefits. These key elements are
addressed separately below. In determining compensation, the Committee considers
all elements of an executive officer's total compensation package, including
severance plans, insurance, and other benefits.

BASE SALARIES

The Committee regularly reviews each executive officer's base salary. Base
salaries are targeted at market levels. Base salaries for executive officers are
initially determined by evaluating executives' levels of responsibility, prior
experience, breadth of knowledge, internal equity issues, and external pay
practices.

Base salaries offer security to executives and allow the Company to attract
competent executive talent and maintain a stable management team. They also
allow executives to be rewarded for individual performance based on the
Company's evaluation process which encourages the development of executives. Pay
for individual performance rewards executives for achieving goals which may not
be immediately evident in common financial measurements.

Increases to base salaries are driven primarily by individual performance.
Individual performance is evaluated based on sustained levels of individual
contribution to the Company. When evaluating individual performance, the
Committee considers the executive's efforts in promoting Company values;
continuing educational and management training; improving project quality;
developing relationships with customers, strategic partners, and employees;
demonstrating leadership abilities among coworkers; and other goals. Overall,
executive base salaries were increased in 1997 at a rate comparable to the
increases provided at other companies and are near market levels.

ANNUAL INCENTIVES

The annual incentive plan is the second major compensation element for
executive officers. The incentive plan provides three levels of award
opportunities. The award is based on a target dollar amount that is at the 75th
percentile of the comparator companies as established annually in consultation
with the independent compensation consultant. The performance target is based on
earnings per share. The award, if any, is paid in cash.

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<PAGE>
In the event an executive elects to take part of the annual incentive award
in restricted stock of the Company, the executive receives a bonus of 33 percent
of the value of shares taken in restricted stock and the bonus shares awarded
are also in restricted stock. EXAMPLE: Executive receives an incentive award of
$50,000 and elects to take $20,000 in restricted stock. The executive receives a
"bonus" of additional restricted stock worth $6,600 ($20,000 times 33 percent).

LONG-TERM INCENTIVES

Long-term incentives are provided pursuant to the Company's Long-Term
Incentive Plan. When awarding long-term incentives, the Compensation Committee
considers executives' levels of responsibility, prior experience, historical
award data, various performance criteria, and compensation practices at
comparator companies. Participation in the Long-Term Incentive Plan is limited
to executives who have a continuing corporate-wide impact on the Company.

Long-term incentives are generally provided through a combination of
performance units, stock options, and restricted stock. The Committee has
determined to provide annual long-term incentive value through a combination of
performance units (75 percent) and stock options (25 percent). The Committee's
objective is to provide executives with total annual long-term incentive award
opportunities that are at the 75th percentile of the comparator companies. In
its discretion, the Committee may grant restricted stock to recognize special
performance or for retention purposes.

PERFORMANCE UNITS

The Company's performance units are designed to tie executive's long-term
compensation directly to specific corporate performance measures. The cycles for
the years 1996-1998 and 1997-1999 are based on a combination of economic value
added ("EVA") and earnings available for common shareholders. The cycle for the
years 1998-2000 is based on the Company's total shareholder return ranking
relative to a specified peer group of companies. For the 1995-1997 cycle of the
long-term plan, the actual earnings available under the plan and threshold
return on equity warranted payment on the performance units in accordance with
the provisions of the plan.

Any payments made under the three year performance cycle awards are
restricted stock until such time that the executive has accumulated
shareholdings of the Company from any source, excluding unexercised stock
options, of at least one to five times his or her annual base salary. At such
time that the executive has exceeded the targeted share ownership, compensation,
if any, from this plan will be paid in cash. If payments are made in cash, the
employee may elect to take any portion of his/her cash award in restricted stock
and said stock will receive a bonus of 25 percent in restricted stock along the
terms outlined above under annual incentive plan.

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<PAGE>
STOCK OPTIONS

Stock options are granted annually under the Long-Term Incentive Plan at an
option price not less than the fair market value of the Common Stock on the date
of grant. Accordingly, stock options have value only if the stock price
appreciates from the date the options are granted. This design focuses
executives on the creation of shareholder value over the long term. The option
grants have a vesting schedule in which 25 percent vests on the second
anniversary of the grant, an additional 25 percent vests on the third
anniversary of the grant, and the final 50 percent vests on the fourth
anniversary of the grant. This vesting schedule is intended to help provide a
meaningful retention mechanism.

To foster long-term success, the Company also issues stock options to select
executives not participating in the long-term incentive plan described above.
The number of shares granted are based on the executive's level of
responsibility and targeted value of the stock if assumptions about the growth
of the Company's stock are realized. Options are granted at 100 percent of fair
market value on the date of grant, and can be exercised (following a one-year
holding period) at any time over a ten-year period. Executives who are eligible
for the long-term incentive plan may also receive new stock option grants under
the Company plan.

BENEFITS

Benefits offered to key executives serve a different purpose than do the
other elements of compensation. In general, they provide a safety net of
protection against financial catastrophes that can result from illness,
disability, or death. Benefits offered to key executives are generally those
offered to the general employee population with some variation to promote tax
efficiency and replacement of benefit opportunities lost to regulatory limits.

CHIEF EXECUTIVE OFFICER COMPENSATION

It is the policy of the Committee to review the Chief Executive Officer's
base salary each year in relation to comparable positions of responsibility at
the comparator companies. This does not assure an increase in salary. At the
present time, Richard Green's salary is slightly above the median level of
compensation for the comparator companies. Mr. Green's base salary effective
February 1, 1998 has been increased to $750,000 reflecting economic adjustments
for chief executive officers.

Annual incentive awards are based on actual Company results and quality of
management. The actual earnings per share were $2.26. The incentive payment of
$767,040 has been authorized by the Committee to Mr. Green according to the
earnings per share and growth goals set by the Committee for 1997. Mr. Green
elected to take his incentive payment in the form of restricted stock. Pursuant
to the terms of the plan, he received an additional bonus of 33 percent of the
value of the shares, which was also paid in restricted stock.

Mr. Green was awarded performance units under the long-term incentive plan
for the period 1995-1997. The minimum performance levels under the long-term
incentive plan for earnings available and return on equity at the end of the
1995-1997 cycle were met and, accordingly, Mr. Green received a payment of
$459,319. Mr. Green elected to take his incentive payment in the form of
restricted stock. Pursuant to the terms of the plan, he received an additional
bonus of 25 percent of the value of the shares, which was also paid in
restricted stock.

In addition to the performance units, Mr. Green was granted 90,000 stock
options at a price of $35.344 per share. Stock option grants under the long-term
incentive plan have the following vested schedule: 25 percent vests on the
second anniversary of the grant, an additional 25 percent vests on the third
anniversary of the grant, and the final 50 percent vests on the fourth
anniversary of the grant.

A new three-year performance cycle was started in 1996 and will extend
through 1998. These grants were determined based on the market data targeting a
payout equal to the 75th percentile for long-term

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<PAGE>
incentive compensation for chief executive officers of comparator companies. If
the minimum performance target is not met under this plan, no payments will be
made.

A new three-year performance cycle was started in 1997 and will extend
through 1999. These grants were determined based on the market data targeting
payout equal to the 75th percentile for long-term incentive compensation for
chief executive officers of comparator companies. If the minimum performance
targets are not met under this plan, no payments will be made.

During 1996, the Committee discussed and approved the terms of an employment
contract with the Chief Executive Officer. For a description of the arrangement
agreed to by the Committee, see "Severance and Employment Agreements" on page
10.

INTERNAL REVENUE CODE 162(M) CONSIDERATIONS

Section 162(m) of the Internal Revenue Code provides that executive
compensation in excess of $1 million will not be deductible for purposes of
corporate income taxes unless it is performance-based compensation and is paid
pursuant to a plan meeting certain requirements of the Code. The Committee
intends to continue increased reliance on performance-based compensation
programs. Such programs will be designed to fulfill, in the best possible
manner, future corporate business objectives. To the extent consistent with this
goal, the Committee currently anticipates that such programs will also be
designed to satisfy the requirements of Section 162(m) with respect to the
deductibility of compensation paid. The Committee believes that compensation
actually paid in respect of 1997 was deductible.

CONCLUSION

The Committee believes these executive compensation policies and programs
serve the interests of shareholders and the Company effectively. The various pay
vehicles offered are appropriately balanced to provide increased motivation for
executives to contribute to the Company's overall future successes, thereby
enhancing the value of the Company for the shareholder's benefit.

We will continue to monitor the effectiveness of the Company's total
compensation program to meet the current needs of the Company.

Irvine O. Hockaday, Jr. L. Patton Kline Herman Cain

9
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
OTHER
NAME ANNUAL RESTRICTED
AND COMPEN- STOCK STOCK LONG-TERM
PRINCIPAL SATION AWARD(S) OPTIONS INCENTIVE ALL OTHER
POSITION YEAR SALARY($) BONUS($) ($) (1)($) (#) PLAN ($) COMPENSATION
- -- ---- --------- -------- ------- ---------- ------- --------- ----------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Richard 1997 675,192 0 13,821 1,020,163 90,000 574,148 60,262(3)(4)(5)(6)
C. 1996 618,057 0 15,423 796,009 141,400 0 35,968
Green, 1995 495,000 0 53,730 330,010 120,565 550,017 46,810
Jr. ....
Chairman
& CEO

Robert 1997 507,115 0 20,893 765,122 72,000 278,384 61,895(4)(5)(6)
K. 1996 466,731 0 10,764 756,493 113,120 0 54,741
Green .... 1995 306,054 0 55,025 177,778 74,194 266,537 42,533
President
& COO

Harvey 1997 255,191 217,738 14,827 0 35,000 64,476 30,961(3)(4)(5)(6)
J. 1996 203,845 144,182 5,402 250,000 25,500 0 26,042
Padewer .... 1995 103,153 60,768 0 0 21,700 9,235 8,572
Senior
Vice
President

James 1997 241,538 212,712 22,356 0 35,000 62,088 30,238(3)(4)(5)(6)
G. 1996 215,576 141,634 4,543 0 29,600 0 24,000
Miller .... 1995 208,550 267,016 7,454 0 25,222 44,379 21,978
Senior
Vice
President

Charles 1997 269,861 92,675 16,366 123,258 35,000 80,595 251,396(3)(4)(5)(6)(7)
K. 1996 283,683 0 3,285 399,523 34,100 0 67,270
Dempster .... 1995 240,185 276,672 0 28,968 29,032 20,460 26,446
Chairman
and
Chief
Executive
Officer,
UtiliCorp
U.K.,
Inc.

Terry 1997(2) 361,575 0 13,628 0 0 0 12,038(3)(4)(6)
G. 1996 262,500 216,125 5,822 0 109,786 0 17,147
Westbrook .... 1995(2) -- -- -- -- -- -- --
Senior
Vice
President
& CFO
</TABLE>

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

(1) Restrictions lapse at various times following the third anniversary of the
grant. Dividends are paid on restricted stock awards at the same rate as
paid to all stockholders. On December 31, 1997, Mr. Richard C. Green, Jr.
held 58,549 shares of restricted stock having a market value of $2,272,433;
Mr. Robert K. Green held 62,100 shares of restricted stock having a market
value of $2,412,196; Mr. Harvey J. Padewer held 9,009 shares of restricted
stock having a market value of $349,661; Mr. James G. Miller held 1,887
shares of restricted stock having a market value of $73,239; and Mr.
Dempster held 20,228 shares of restricted stock having a market value of
$785,099. All market values are determined as of December 31, 1997. Grants
made on March 13, 1998 for 1997 service are included in the market value
totals described in the "Restricted Stock Award(s)" column above for the
year 1997.

(2) Mr. Westbrook was not an officer of the Company in 1995, and resigned from
the Company on May 19, 1997.

(3) Consists of employer contributions to the UtiliCorp United Restated Savings
Plan. Mr. Richard C. Green, Jr., $14,300; Mr. Padewer, $9,580; Mr. Miller,
$9,730; Mr. Dempster, $9,684; and Mr. Westbrook, $9,000.

(4) Lump-sum payment of prerequisite allowance for 1997. Mr. Richard C. Green,
Jr., $38,499; Mr. Robert K. Green, $28,874; Mr. Padewer, $9,443; Mr. Miller,
$9,625; Mr. Dempster, $9,766; and Mr. Westbrook, $2,625.

(5) Consists of employer contributions to the Supplemental Contributory
Retirement Plan. Mr. Richard C. Green, Jr., $4,004; Mr. Robert K. Green,
$30,427; Mr. Padewer, $10,565; Mr. Miller, $9,561; and Mr. Dempster, $7,816.

(6) Premium paid for term life insurance equivalent to three times salary. Mr.
Richard C. Green, Jr., $3,459; Mr. Robert K. Green, $2,594; Mr. Padewer,
$1,373; Mr. Miller, $1,322; Mr. Dempster, $1,373; and Mr. Westbrook, $413.

(7) Includes payment made to Mr. Dempster of $222,757 for foreign assignments.

SEVERANCE AND EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with Mr. Richard C.
Green, Jr. and Mr. Robert K. Green (the "Employment Agreements") which provide
for, among other things, a base salary in an amount not less than $680,000 for
Mr. Richard C. Green, Jr. and not less than $510,000 for Mr. Robert K. Green;
the continuation of Mr. Richard C. Green, Jr.'s employment as Chairman and Chief
Executive Officer of the Company and Mr. Robert K. Green's employment as
President of the Company during the continuation of employment under their
respective Employment Agreements; and participation

10
<PAGE>
in the Company's benefit and incentive plans. Each Employment Agreement provides
that in the event of termination without cause or by the employee for good
reason, the Company will continue salary payments at the minimum annual base
salary rate for three years following the date of termination and pay a lump sum
equal to three times the maximum incentive compensation benefit that would be
paid to the employee for the year during which the termination occurs if all the
targeted goals in effect on the date of termination were exceeded, along with
payment of certain other amounts.

The Company has entered into severance agreements with the individuals named
in the Summary Compensation Table, other than Mr. Richard C. Green, Jr. and Mr.
Robert K. Green. These agreements are intended to provide for continuity of
management in the event of a change in control of UCU. The agreements provide
that covered executives would be entitled to certain severance benefits
following a change of control of UCU. If, following a change of control, the
executive's employment with UCU is terminated for any reason, then the executive
is entitled to a severance payment that will be 2.99 times the executive's
average annual compensation for the five years preceding the change in control,
unless such termination is as a result of death, disability, retirement, for
cause or if such executive terminates employment for other than good reason (as
this term is defined in the agreement). The severance payment is made in the
form of a lump sum cash payment. Mr. Westbrook's severance agreement was
terminated at the time of his resignation.

Effective as of January 1, 1996, Mr. Dempster entered into a three-year
employment agreement with the Company whereby he serves as Chairman and Chief
Executive Officer of UtiliCorp U.K., Inc. The employment agreement provides Mr.
Dempster with an annual salary of not less than $252,000, a maximum bonus
opportunity at 45% of base salary at target and 70% of base salary at maximum,
participation in the Company's long-term incentive program and participation in
other employee benefit plans of the Company. The employment agreement also
provides various benefits to Mr. Dempster as a result of his assignment in the
U.K. In the event of involuntary termination, Mr. Dempster will receive a lump
sum payment equal to 2.99 times the average of his last five years' base salary.

The Company and Mr. Westbrook entered into a Transition Agreement pursuant
to which he agreed to cooperate in the orderly transition of management
following his resignation from the Company. The agreement provided for the
continuation of his annual salary of approximately $336,000 per year for 1997 as
well as certain other benefits.

11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS GRANT DATE
OPTIONS GRANTED TO EXERCISE OR PRESENT
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION VALUE(1)
NAME (#)(2) FISCAL YEAR ($/SH) DATE $
- ---------------------------------------- -------- ------------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
Richard C. Green, Jr. .................. 90,000 10% 35.344 2/3/08 325,800
Chairman and CEO
Robert K. Green ........................ 72,000 8% 35.344 2/3/08 260,640
President and COO
Harvey J. Padewer ...................... 35,000 4% 35.344 2/3/08 126,700
Senior Vice President
James G. Miller ........................ 35,000 4% 35.344 2/3/08 126,700
Senior Vice President
Charles K. Dempster .................... 35,000 4% 35.344 2/3/08 126,700
Chairman and CEO,
UtiliCorp U.K., Inc.
Terry G. Westbrook ..................... 0 0 -- -- --
Senior Vice President and CFO
</TABLE>

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

(1) BLACK SCHOLES ASSUMPTION
The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the above table include the following:

- An exercise price on the option of $35.344, equal to the fair market value
of the underlying stock on the date of grant.

- An option term of 10 years.

- An interest rate of 5.54 percent that represents the interest rate on a
U.S. Treasury security on the date of grant with a maturity date
corresponding to that of the option term.

- Volatility of 16.218 percent calculated using daily stock prices for
one-year period prior to the grant date.

- Dividends at the rate of $1.80 per share representing the annualized
dividends paid with respect to a share of common stock at the date of
grant.

- Reductions of approximately 16.62 percent to reflect the probability of
forfeiture due to termination prior to vesting, and approximately 6.65
percent to reflect the probability of a shortened option term due to
termination of employment prior to the option expiration date.

The ultimate values of the options will depend on the future market price of
the Company's Common Stock, which cannot be forecast with reasonable
accuracy. The actual value, if any, an optionee will realize upon exercise
of an option will depend on the excess of the market value of the Company's
Common Stock over the exercise price on the date the option is exercised.

(2) Options were granted February 2, 1998 and have the following vesting
schedule: 25% vests on the second anniversary of the grant, an additional
25% vests on the third anniversary and the final 50% vests on the fourth
anniversary of the grant.

12
<PAGE>
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE FY-END (#) FY-END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------ ----------- ----------- ---------------------- -------------------

<S> <C> <C> <C> <C>
Richard C. Green, Jr. .................... 0 0 210,865/ 2,314,145/
Chairman and CEO 141,400 1,564,238

Robert K. Green .......................... 0 0 82,644/ 955,462/
President and COO 113,120 1,251,390

Harvey J. Padewer ........................ 21,744 156,285 0/ 0/
Senior Vice President 25,500 282,094

James G. Miller .......................... 0 0 54,472/ 612,398/
Senior Vice President 29,600 327,450

Charles K. Dempster ...................... 0 0 61,432/ 641,267/
Chairman and CEO, 34,100 377,231
UtiliCorp U.K., Inc.

Terry G. Westbrook ....................... 0 0 (1) (1)
Senior Vice President and CFO
</TABLE>

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

(1) All options were canceled upon his resignation.

LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER
NUMBER OF PERIOD
SHARES, UNITS UNTIL
OR OTHER RIGHTS MATURATION THRESHOLD TARGET
NAME (#) OR PAYOUT ($) ($) MAXIMUM ($)
- --------------------------------------------------- --------------- ----------- ----------- --------- -----------

<S> <C> <C> <C> <C> <C>
Richard C. Green, Jr. ............................. 1 12-31-99 239,250 471,250 942,500
Chairman and CEO

Robert K. Green ................................... 1 12-31-99 193,050 380,250 760,500
President and COO

Harvey J. Padewer ................................. 1 12-31-99 54,000 101,250 202,500
Senior Vice President

James G. Miller ................................... 1 12-31-99 52,000 97,500 195,000
Senior Vice President

Charles K. Dempster ............................... 1 12-31-99 54,000 101,250 202,500
Chairman and Chief Executive Officer,
UtiliCorp U.K., Inc.

Terry G. Westbrook ................................ 0 -- -- -- --
Senior Vice President and CFO
</TABLE>

The long-term awards are expressed as a percentage of current base salary;
Messrs. Green, 20% - Threshold; 65% - Target and 130% - Maximum; Messrs.
Padewer, Dempster and Miller, 20% - Threshold; 37.5% - Target and 75% -Maximum.
The actual amounts paid will be a percentage of their base salary in effect at
the end of the performance cycle.

13
<PAGE>
The value of long-term incentive awards is a targeted amount annually based
on competitive survey data from billion dollar revenue companies, in
consultation with the Company's independent compensation consultant. The awards
for the 1997 to 1999 cycle are determined based on targeted amounts in earnings
available at the end of the cycle and a threshold for return on equity. The
targeted amount will produce a payout equal to the 75th percentile for long-term
bonus awards of billion dollar revenue companies.

RETIREMENT PLAN

The Company maintains the UtiliCorp United Inc. Restated Retirement Income
Plan (the "Retirement Plan") a non-contributory defined benefit retirement plan.
Final average compensation is defined in this Retirement Plan as total base
salary excluding overtime payments, bonuses, amounts deferred to non-qualified
deferred income plans and any other extraordinary compensation, but including
employee contributions made to the UtiliCorp United Inc. Savings Plan and the
flexible spending arrangement maintained by the Company, and corresponds to
salary in the summary compensation table. This amount is computed using the
career high four consecutive years.

Benefits payable from the Retirement Plan are limited by provisions of the
Internal Revenue Code. The Company maintains an unfunded supplemental retirement
plan to provide for the payment of retirement benefits calculated in accordance
with the Retirement Plan which would otherwise be limited by the provisions of
the Internal Revenue Code.

The years of credited service for each officer named in the Summary
Compensation Table are as follows: Mr. Richard C. Green, Jr., 19 years; Mr.
Robert K. Green, 9 years; Mr. Padewer, 3 years; Mr. Miller, 14 years; Mr.
Dempster, 5 years and Mr. Westbrook, 2 years.

The following table sets forth the estimated annual benefits payable to
persons in specified remuneration and service classifications assuming
retirement in 1998 at age 62:

ESTIMATED TOTAL ANNUAL RETIREMENT BENEFITS UNDER THE UTILICORP UNITED INC.
RESTATED RETIREMENT INCOME PLAN AND THE UTILICORP UNITED INC.
RESTATED EXCESS BENEFIT PLAN

<TABLE>
<CAPTION>
YEARS OF PENSION SERVICE
FINAL AVERAGE ----------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40
- ------------- ---------- ---------- ---------- ---------- ---------- ----------

These benefits are applicable to employees retiring after December 31, 1997
at age 62 and have been computed on the basis of a straight-life annuity.

The Company also maintains a supplemental retirement agreement with James G.
Miller generally providing for the payment of an annual retirement benefit of
$40,000 in addition to the benefit provided in the above table.

14
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
UTILICORP UNITED INC., EDISON ELECTRIC INSTITUTE
COMBINATION GAS AND ELECTRIC UTILITIES INDEX & S&P 500 INDEX

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
UTILICORP S & P EEI

<S> <C> <C> <C>
Total Fund 500 Index Index
12/92 $100.00 $100.00 $100.00
12/93 121.28 110.08 111.66
12/94 107.51 111.52 97.28
12/95 126.65 153.43 123.91
12/96 123.88 188.66 123.13
12/97 189.20 251.61 159.17
</TABLE>

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

* Assumes that the value of the investment in UCU stock and each index was $100
on January 1, 1993 and that all dividends were reinvested.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The firm of Arthur Andersen LLP was retained by the Company as independent
public accountants for the year 1997. Arthur Andersen LLP has performed the
audit of the Company's financial statements since May 1992.

Representatives of Arthur Andersen LLP are expected to be present at the
annual meeting and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions.

The Audit Committee of the Board of Directors will make its recommendations
with respect to retention of an independent public accounting firm for the year
1998 at the annual meeting of the Board of Directors.

OTHER BUSINESS

Management does not know of any matters to be presented at the meeting other
than those specifically referred to in the Notice of Meeting. However, if any
other matters shall properly come before the meeting, it is the intention of the
persons named in the proxy to vote them in accordance with their judgment.

15
<PAGE>
PROPOSALS OF SECURITY HOLDERS

Proposals of security holders intended to be presented at the next annual
meeting scheduled for May 5, 1999, must be received by the Company no later than
November 20, 1998, in order to be considered for inclusion in the proxy
statement and form of proxy relating to that meeting. It is anticipated that the
proxy statement and form of proxy relating to that meeting will be mailed to
stockholders on or before March 24, 1999.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 required the Company's
directors and executive officers to file with the Securities and Exchange
Commission reports of ownership and changes in ownership of the Company's common
stock, and the Company is required to identify any of those persons who fail to
file such reports on a timely basis. All such filings were filed on a timely
basis except for the Form 3 for James Brook and one Form 4 for Dale J. Wolf,
Harvey Padewer, James Brook and John R. Baker, each relating to one transaction.

SOLICITATION OF PROXIES

The Company will bear the cost of solicitation of proxies, which will be
principally conducted by the use of the mails; however, certain officers,
employees and friends of the Company may also solicit by telephone, telegram or
personal interview and the Company may reimburse brokerage firms and others for
their expenses in forwarding soliciting material to the beneficial owners. The
Company has retained Morrow & Co. to assist in the solicitation of proxies from
brokers, nominees, fiduciaries and other custodians at a fee of $50,000, plus
reimbursement of out-of-pocket expenses.

PROPOSAL 1
ELECTION OF DIRECTORS

Three Directors of the Company are to be elected, in "Class A," to hold
office for three years. The following persons have been designated as nominees
for the office: John R. Baker, Dr. Stanley O. Ikenberry and Irvine O. Hockaday,
Jr. It is the intention of the persons named in the enclosed proxy to vote such
proxy for the election of the said nominees unless otherwise specified.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH OF THE
FOREGOING NOMINEES FOR DIRECTOR.

PROPOSAL 2
PROPOSAL TO AMEND THE AMENDED AND RESTATED
1986 STOCK INCENTIVE PLAN TO ALLOW THE
ISSUANCE OF AN ADDITIONAL 2,000,000 SHARES
PURSUANT TO THE PLAN

PURPOSE

The Company's Amended and Restated 1986 Stock Incentive Plan (the "Plan") is
intended to foster in its participants a strong incentive to put forth maximum
effort for the continued success and growth of the Company and its subsidiaries,
to aid in retaining individuals who put forth such efforts and to assist in
attracting the best available individuals in the future.

16
<PAGE>
SHARES SUBJECT TO THE PLAN

There are 267,214 shares of the Company's Common Stock authorized for
non-qualified and incentive stock option grants and restricted stock awards
which remain unissued under the Plan. The Company proposes to authorize an
additional 2,000,000 shares of the Company's Common Stock under the Plan. All
such shares are subject to adjustment in the event of stock splits, stock
dividends and other situations.

EMPLOYEE PARTICIPANTS

Participants in the Plan ("Participants") are selected by the Compensation
Committee and consist of key employees. Currently, there are approximately 68
persons participating in the Plan.

DELIVERY OF SHARES IN LIEU OF CASH INCENTIVE AWARDS

The Plan provides that any Participant who is eligible to receive a cash
bonus or incentive payment from the Company under any management bonus or
incentive plan of the Company or entitled to receive a cash payment for services
rendered as a director, may be permitted by the Compensation Committee to
receive shares of Common Stock under the Plan in lieu of such payments.

ADMINISTRATION

The Plan is administered by the Company's Compensation Committee, which
consists of at least three persons appointed by the Board. The Board may fill
vacancies and may from time to time remove or add members. All members of the
Compensation Committee must be disinterested persons as defined in Rule 16b-3
under the Exchange Act.

The Compensation Committee may periodically adopt rules and regulations for
carrying out the Plan, and for making amendments thereto, as desired without
further action by the Company's stockholders except as required by applicable
law.

TERMINATION

The Plan will continue in effect until all shares of stock available for
grant have been acquired through exercise of options or restricted stock awards,
or until September 1, 2005, whichever is earlier. The Plan may be terminated at
such earlier time as the Company's Board may determine.

TERMS OF STOCK OPTIONS

Stock option awards under the Plan consist of non-qualified and incentive
stock options. Options granted pursuant to the Plan need not be identical.

The purchase price under each option is established by the Compensation
Committee but in no event will the option price be less than 100% of the fair
market value of Common Stock on the date of grant. The closing price per share
of the Company's Common Stock as reported on the New York Stock Exchange on
March 9, 1998 was $37.0625. The option price must be paid in full at the time of
exercise. The price may be paid in cash or by the surrender of shares of Common
Stock owned by the participant exercising the option and having a fair market
value on the date of exercise equal to the option price, or by any combination
of the foregoing equal to the option price.

Options granted must be exercised within a period of not more than 10 years
from the grant date and the aggregate fair market value of shares as to which
incentive stock options ("ISOs") are exercisable for the first time by a grantee
during any calendar year shall not exceed $100,000. Options will have such terms
and be exercisable in such manner and at such times as the Compensation
Committee may determine. ISOs are also subject to further restrictions under the
Internal Revenue Code of 1986, as amended (the "Code") as set forth in the Plan.
Subject to the Code's restrictions on ISOs, the Compensation Committee

17
<PAGE>
may provide for accelerated exercisability of options, or lapse of options, in
the event of the employee's death, disablement or termination or certain change
in control as set forth in the Plan.

Each option is transferable only by will or the law of descent and
distribution and may only be exercisable by the Participant during his or her
lifetime.

FEDERAL INCOME TAX CONSEQUENCES

The following discussion of the federal income tax consequences of the Plan
is intended to be a summary of applicable federal law. State and local tax
consequences may differ.

ISOs and NSOs are treated differently for federal income tax purposes. ISOs
are intended to comply with the requirements of Section 422 of the Code. NSOs
need not comply with such requirements.

An optionee is not taxed for regular income tax purposes on the grant or
exercise of an ISO. The difference between the exercise price and the fair
market value of the shares on the exercise date will, however, be a preference
item for purposes of the alternative minimum tax. If an optionee holds the
shares acquired upon the exercise of an ISO for at least two years following
grant and at least one year following exercise, the optionee's gain, if any,
upon a subsequent disposition of such shares is long-term capital gain. The
measure of the gain is the difference between the proceeds received on
disposition and the optionee's basis in the shares (which generally equals the
exercise price). If an optionee disposes of stock acquired pursuant to exercise
of an ISO before satisfying the one- and two-year holding periods described
above, the optionee will recognize ordinary income in the year of disposition.
The amount of the ordinary income will be the lesser of (i) the amount realized
on disposition less the optionee's adjusted basis in the stock (usually the
option price) or (ii) the difference between the fair market value of the stock
on the exercise date and the option price. The excess, if any, of the amount
received on disposition of the stock over its fair market value on the exercise
date will be treated as either long-term or short-term capital gain, depending
on the holding period of the stock after exercise. The Company is not entitled
to an income tax deduction on the grant or exercise of an ISO or on the
optionee's disposition of the shares after satisfying the holding period
requirement described above. If the holding periods are not satisfied, the
Company will be entitled to a deduction in the year the optionee disposes of the
shares, in an amount equal to the ordinary income recognized by the optionee.

An optionee is not taxed on the grant of an NSO. On exercise, however, the
optionee recognizes ordinary income equal to the difference between the option
price and the fair market value of the shares on the date of exercise. The
Company is entitled to an income tax deduction in the year of exercise in the
amount recognized by the optionee as ordinary income. Any gain on subsequent
disposition of the shares is long-term capital gain if the shares are held for
at least one year following exercise. The Company does not receive a deduction
for this gain.

A Participant who is granted a restricted stock award is not required to
include the value of such stock award in taxable income until the first year in
which such Participant's rights in the stock award are transferable or are not
subject to substantial risk of forfeiture, whichever occurs earlier, unless such
Participant timely files a Code Section 83(b) election to be taxed on the
receipt of the stock award. In either case, the amount of taxable income
recognized will be equal to the excess of the fair market value of the stock
award at the time the income is recognized over the amount (if any) paid for the
stock award. The Company receives a deduction in the amount of the taxable
income recognized by the Participant, in the taxable year in which the
Participant recognizes such income.

TERMS OF RESTRICTED STOCK AWARDS

Like stock options granted under the Plan, restricted stock awards need not
be identical. The number of shares and other terms and conditions of any
restricted stock award, including the period for which the shares awarded will
be subject to forfeiture and restrictions on transfer or on the ability of the
grantee to

18
<PAGE>
make Code Section 83(b) elections without the consent of the Compensation
Committee, shall be determined by the Compensation Committee. No such
restrictions shall lapse earlier than the first, or later than the tenth,
anniversary of the date on which the award was granted, provided that the
Compensation Committee may provide for the lapse of such restrictions on the
employee's death or termination.

The Compensation Committee, in its sole discretion, may impose performance
restrictions on restricted stock awards as it may deem advisable or appropriate
in accordance with the Plan and Section 162(m) of the Code.

AMENDED PLAN BENEFITS

The Compensation Committee has full discretion to determine the number and
amount of options to be granted to key employees under the Plan, subject to an
annual limitation on the total number of options that may be granted to any key
employee. Therefore, the benefits and amounts that will be received by each of
the named executive officers, the executive officers as a group and all other
key employees under the Plan are not presently determinable. Details on stock
options and restricted stock awards granted during the last three years to
certain executive officers are presented in the table entitled "Summary
Compensation Table." Additional information with respect to options granted
during 1997 is presented in the table entitled "Option Grants in Last Fiscal
Year."

REQUIRED APPROVAL

The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voting at the Meeting is required to approve the Plan.
Unless marked to the contrary, proxies received will be voted FOR approval of
the Plan.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 2.

PROPOSAL 3
APPROVAL OF AMENDMENT TO THE UTILICORP UNITED INC.
ANNUAL AND LONG-TERM INCENTIVE PLAN

The Company has a cash-based executive compensation plan in place. This Plan
is the Annual and Long-Term Incentive Plan (the "Plan") previously approved by
stockholders of the Company in 1995.

Under a tax law which took effect on January 1, 1994, the Company cannot
deduct compensation paid to its Chief Executive Officer and the other four named
executive officers (the "Covered Employees"), to the extent such compensation
exceeds $1 million per person in any year. Amounts paid under
"performance-based" plans are excluded and can be deducted even if they cause
total compensation to exceed $1 million. Plans are "performance-based" if they
meet certain criteria and are approved by stockholders. The Plan was therefore
submitted for stockholder approval in 1995 and thus is an approved "performance-
based" plan since it received the affirmative vote of the holders of a majority
of the voting power of the voting shares present and entitled to vote at that
meeting.

SUMMARY OF THE PLAN

The purpose of the annual portion of the Plan is to provide key executives
with financial incentives which will motivate and reward performance within
established business criteria on which the performance goal is based.
Participants in the Plan are key managerial, professional or technical
employees, and include the Company's Chief Executive Officer and the other four
executives named in the Summary Compensation Table. The Performance Goals are
measured over a calendar year and are set no later than April 1 of each year.

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The purpose of the long-term portion of the Incentive Plan is to further the
growth and profitability of the Company by offering key executives the
opportunity to receive incentive awards based on the successful achievement of
certain long-range Company goals.

The Compensation Committee administers the Plan and has discretion to
identify individual employees who will be eligible to participate in this Plan
based on the committee's determination that such employees' performance may have
a significant impact on the annual and long-term success of the Company.

Under the long-term portion of the Plan, incentive awards are paid to
participants on the basis of the Company's performance over a rolling
three-year, or longer, cycle. For the 1998-2000 cycle, performance is measured
based on the Company's total shareholder return ranking relative to a specific
peer group of companies. In addition, a minimum return on equity is required in
order for payments to be made under this Plan. Additional performance measures
that may be used are those described below.

The Compensation Committee of the Board of Directors administers the Plan
and approves both the annual and long-term awards if the achievement of certain
goals based on business criteria is met, either over one year or long-term
cycles, as the case may be. The performance objectives may vary from participant
to participant, but with respect to Covered Employees such business criteria to
establish a Performance Goal is currently measured by 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 Compensation Committee may deem appropriate. In
addition, the criteria selected by the Committee includes a minimum performance
standard below which no payment will be made and a maximum performance level
above which no increase in payment will be made. Under the current terms of the
Plan an annual award or a long-term award paid under the Plan will not exceed
200% of the annual base salary of a Covered Employee on January 1 for the year
in which payment is made. The Plan calls for the Compensation Committee to at
all times administer the Plan with respect to Covered Employees so that
compensation paid thereunder will be subject to tax deductibility as
performance-based compensation.

While the Plan also permits Discretionary Awards to be made to employees
(other than the Chief Executive Officer), such discretionary payment will be
outside of the definition of "performance-based" compensation and thus will
count toward the $1 million per person compensation limit which may be deducted
in any year.

While the amount of the annual or long-term award that may be awarded to a
Covered Employee for any Plan Year cannot be determined, payments under the
annual portion of the Plan for the preceding three years are included in the
Summary Compensation Table and potential awards under the long-term portion of
the Plan are reported in the table titled "Long-Term Incentive Plans-- Awards in
Last Fiscal Year."

PROPOSED AMENDMENTS TO THE PLAN

Subject to stockholder approval the Compensation Committee and the Board of
Directors have approved an amendment affecting two provisions of the Plan. The
first adds a performance criteria which permits any of the existing performance
goals to be compared to the performance of a published or special index, as
determined by the Compensation Committee, including, but not limited to, the
Standard & Poor's 500 Stock Index or a group of comparator companies. The second
increases the maximum annual award or long-term award which may be paid to a
Covered Employee in any year to 400% of the annual base pay for that year.

The first amendment to add this additional performance goal recognizes that
comparing the performance of the Company to a group of other companies would in
many cases more clearly recognize the true increase in shareholder value than
looking at a particular measure in isolation. The second amendment recognizes
that for superior performance the maximum payout may result in the current
maximum limit being exceeded.

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REQUIRED APPROVAL

The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voting at the meeting is required to approve the
amendments to the Plan.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 3.

NEW PLAN BENEFITS

The following table sets forth certain benefits related to Proposals 2 and
3. Future awards under the Amended and Restated 1986 Stock Incentive Plan
("SIP") and the Annual and Long-Term Incentive Plan ("ALTIP") are not
determinable because specific awards are made at the discretion of the
Compensation Committee, depending upon a variety of factors. See "Compensation
Committee Report on Executive Compensation." For information concerning awards
made under the SIP and the ALTIP to the Company's Chief Executive Officer and
other five most highly compensated officers, see "Summary Compensation Table."
The following table sets forth additional information with respect to 1997
awards under the SIP and the ALTIP.

<TABLE>
<CAPTION>
SIP
--------------------------------------- ALTIP
NUMBER OF SHARES OF ------------
NUMBER OF OPTIONS RESTRICTED STOCK PAYMENTS
------------------ ------------------- ------------
<S> <C> <C> <C>
All executives (13 persons)................................ 357,000 111,820 $ 2,791,610
------- ------- ------------
All employees, as a group, excluding executives............ 523,200 50,087 $ 7,152,444
------- ------- ------------
------- ------- ------------
</TABLE>

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

(1) Stock options were granted to 12 executives, Restricted Stock was awarded to
12 executives and bonuses under the ALTIP were awarded to 12 executives.

PROPOSAL 4
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

The Board of Directors has approved, subject to approval of the stockholders
at the Annual Meeting, an increase in the number of shares of authorized Common
Stock (par value $1.00 per share) from 100 million shares to 200 million shares
by adopting an amendment (the "Amendment") to the Certificate of Incorporation
of the Company. It is intended that, unless otherwise directed by stockholders,
proxies will be voted for approval of the Amendment.

The purpose of increasing the number of authorized shares of Common Stock is
to provide additional authorized stock which may be issued for such corporate
purposes as the Board of Directors may determine to be desirable including,
without limitation, future financings, investment opportunities, acquisitions,
stock splits, stock dividends and other distributions, employee benefit plans or
for other corporate purposes. The approximately 28 million shares of Common
Stock currently available for issuance does not provide the Board of Directors
needed flexibility for such corporate purposes. In addition, authorization for
such additional shares will enable the Company, as the need may arise, to take
timely advantage of market conditions and availability of favorable
opportunities without the delay and expense associated with holding a special
meeting of its stockholders.

The stockholders of the Company have no preemptive rights to subscribe for,
or purchase, any additional shares of the Company's Common Stock which may be
issued. The issuance of shares of Common Stock by the Company in any type of
stock issuance which is made, other than to existing

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<PAGE>
stockholders on a pro rata basis, would reduce the relative voting power of
existing stockholders and could result in a dilution of their equity interest in
the Company. It is anticipated that any future issuance of Common Stock by the
Company will be made upon authorization by the Board of Directors, without any
further consent or approval of the stockholders, unless otherwise specifically
required by applicable law.

The Company's Certificate of Incorporation contains provisions which are
designed to discourage attempts to obtain control of the Company in a
transaction not approved by the Board of Directors. These provisions are as
follows: (a) an 80% stockholder vote requirement to remove the entire Board of
Directors; (b) an 80% stockholder vote requirement to amend provisions of the
Bylaws relating to the Company's classified Board of Directors; (c) an 80%
stockholder vote requirement for approval of certain business transactions,
unless certain minimum price conditions are met or the Board of Directors
approves the transaction; and (d) an 80% stockholder vote requirement to amend
the foregoing provisions. See also "Introduction to Proposals 5, 6, 7 and 8" on
page 22 of this Proxy Statement for a description of additional existing
defenses.

An increase in the authorized Common Stock might be considered as having the
effect of discouraging attempts to take over control of the Company. Although
the Board has no intention of doing so, shares of authorized but unissued Common
Stock could (within the limits imposed by applicable law) be issued to a holder
who would thereby have sufficient voting power to assure that any proposal by
stockholders to remove directors and fill the vacancies created thereby with
their own nominees, to accomplish certain business combinations opposed by the
incumbent Board, or alter, amend or repeal certain of the provisions of the
Certificate of Incorporation of the Company would not receive the required vote
of 80% of the combined voting power of stockholders. The issuance of such shares
could also be used to dilute the stock ownership of persons seeking to obtain
control (since the holders of Common Stock do not have preemptive rights to
purchase new shares issued by the Company) and could increase the cost for any
such person seeking to obtain control. However, this is not the purpose of this
proposal.

The affirmative vote of the holders of at least a majority of the shares of
the Company's outstanding Common Stock is required to adopt the Amendment.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 4.

INTRODUCTION TO PROPOSALS 5, 6, 7 AND 8

The Board of Directors has unanimously approved and recommends that
stockholders of the Company authorize the amendments (the "Amendments") to the
Company's Certificate of Incorporation described in Proposals 5 through 8 set
forth below.

The Amendments are designed to promote conditions of continuity and
stability in the Company's management and policies. Although the Amendments may
have certain anti-takeover effects, Proposals 5 through 8 are not in response to
any effort, of which the Company is aware, to accumulate the Company's Common
Stock or to obtain control of the Company. The Board of Directors, however, has
observed an increase in corporate takeover activity in recent years and the use
of certain takeover tactics, including proxy fights, hostile takeover attempts,
and partial tender offers, which have become relatively common in corporate
takeover practice. The Board believes that these tactics can place undue
pressure on boards of directors and stockholders to act hastily and on
incomplete information, and therefore can be highly disruptive to a company and
can result in unfair differences in treatment of some stockholders who act
immediately in response to announcement of takeover activity and those who
choose to act later, if at all.

The overall effect of the proposals would be to render more difficult the
accomplishment of a merger or the assumption of control by a principal
stockholder, and thus to make more difficult the removal of management. The
Board of Directors does not presently intend to propose other anti-takeover
measures in future proxy solicitations.

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<PAGE>
Under Delaware law, each of the proposed Amendments to the Certificate of
Incorporation described in Proposals 5 through 8 requires the affirmative vote
of the holders of a majority of the outstanding shares of Common Stock of the
Company entitled to vote at the meeting. All of the proposals are permitted by
law and are consistent with the rules of the New York, Pacific and Toronto Stock
Exchanges on which the Company's shares of Common Stock are listed. If
stockholders approve any of the Amendments, the Company will cause such
amendments to be filed with the Secretary of State of the State of Delaware as
soon as practicable after such approval is final. Each Amendment adopted by
stockholders will become effective regardless of whether any of the other
Amendments to be acted upon at the meeting are adopted.

EXISTING DEFENSES.

CERTIFICATE OF INCORPORATION. The Company's Certificate of Incorporation
authorizes the issuance of 100,000,000 shares of Common Stock (approval of
Proposal 4 would increase the number of authorized to 200,000,000 shares),
20,000,000 shares of Class A Common Stock and 10,000,000 shares of Preference
Stock, not all of which have been issued or reserved. The Board of Directors may
designate the terms, rights and preferences of any series of the Class A Common
Stock and the Preference Stock, except that the Preference Stock is designated
as non-voting until such time as dividends are in arrears in an amount equal to
1 1/2 times the annual dividend. This authorized and unissued stock could
(within the limits imposed by applicable law and the rules of the relevant stock
exchanges) be issued by the Company and used to discourage a change in control
of the Company. In addition, shares of Common Stock and Preference Stock may be
issued in the event that the rights issued in connection with the Company's
Stockholder Rights Plan (described below) are exercised. Furthermore, under
certain circumstances, shares of Class A Common Stock or Preference Stock could
be used either to create voting impediments or to frustrate persons seeking to
effect a takeover or otherwise gain control of the Company.

The Company's Certificate of Incorporation currently contains provisions
which are designed to discourage attempts to obtain control of the Company in a
transaction not approved by the Board of Directors. These provisions are as
follows: (a) an 80% stockholder vote requirement to remove the entire Board of
Directors; (b) an 80% stockholder vote requirement to amend provisions of the
Certificate and Bylaws relating to the Company's classified Board of Directors;
(c) an 80% stockholder vote requirement for approval of certain business
transactions, unless certain minimum price conditions are met or the Board of
Directors approves the transaction; (d) an 80% stockholder vote requirement to
amend the foregoing provisions; and (e) a requirement that stockholder action
may be taken only at an annual or special meeting.

BYLAWS. The Company's Bylaws contain certain provisions that may have an
anti-takeover effect. Those provisions (i) impose advance notice requirements
for stockholder nominations to the Board of Directors and stockholder proposals,
and (ii) require that nominating stockholders provide information comparable to
that which would be required of the Company under applicable federal securities
laws. These Bylaw provisions could enable the Company to delay undesirable
stockholder actions to give the Company necessary time and information to
adequately respond.

SEVERANCE AGREEMENTS. In late 1995, the Company entered into severance
agreements with certain management employees. The severance agreements provide
for payment of certain benefits if the employees are terminated without good
cause or resign for good reason (all as defined in the agreements) within three
years after a change of control of the Company. The agreements also provide for
benefits under certain circumstances following a spin-off of a business unit of
the Company. The benefits under the agreements are subject to reduction in
certain circumstances to avoid imposition of "golden parachute" taxes under the
Federal tax laws.

STOCKHOLDER RIGHTS PLAN. On November 6, 1996, the Board of Directors
adopted a stockholder rights plan (the "Stockholder Rights Plan") pursuant to
which the Company distributed a dividend of one right (a "Right") for each
outstanding share of Common Stock. Each Right entitles the registered holder to

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<PAGE>
purchase from the Company one one-thousandth of a share of Series A
Participating Cumulative Preference Stock at an exercise price of $115, subject
to certain adjustments. The description and terms of the Rights are set forth in
a Rights Agreement, dated as of December 31, 1996, between the Company and First
Chicago Trust Company of New York, as rights agent, a copy of which has been
filed in substantially final form with the Securities and Exchange Commission as
an exhibit to the Company's 10-Q for the quarter ending September 30, 1996.

The Rights are not exercisable until the occurrence of the earlier of the
tenth business day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution) after (i) the first date of public
announcement by the Company that a person (an "Acquiring Person") has acquired
beneficial ownership of 15% of the Common Stock of the Company, or (ii) the date
of commencement of a tender or exchange offer which, if consummated, would
result in the acquiror becoming an Acquiring Person (the earlier of such dates
being hereinafter called the "Distribution Date"). The definition of "Acquiring
Person" excludes (i) persons who inadvertently acquire more than 15% of the
outstanding Common Stock if the acquiror promptly decreases ownership below 15%
and (ii) any third party which acquires shares directly from the Company
pursuant to an agreement with the Company stating that such person is not
intended to become an Acquiring Party as a result of such acquisition. Until the
Distribution Date (or earlier redemption or expiration of the Rights), each
share of Common Stock issued subsequent to the date of the original distribution
of the Rights will be issued with an associated Right. On the Distribution Date,
the Rights separate from the Common Stock, trade separately and become
exercisable. The Rights will expire on December 31, 2006 (the "Expiration Date")
unless earlier redeemed or exchanged by the Company as described below.

In the event that any person or group of related persons becomes an
Acquiring Person (a "Flip-In Event"), then each holder of a Right, other than
Rights that are or were owned beneficially by the Acquiring Person (which will
be void), will thereafter have the right to receive, upon exercise thereof at
the then current exercise price of the Right, that number of shares of Common
Stock (or, under certain circumstances, economically equivalent securities of
the Company) having a market value of two times the exercise price of the Right.

If, following a Flip-In Event, the Company is involved in a merger or other
business combination entered into while the Acquiring Person is in control of
the Board of Directors of the Company in which 50% or more of the Company's
assets or assets representing 50% or more of the Company's revenue or cash flow
are transferred to an Acquiring Person or affiliate thereof, the Company shall
take such action as necessary to ensure that the Rights will "flip-over" and
entitle each holder of a Right to purchase common shares of the acquiring
corporation having a market value of twice the exercise price of the Right.

At any time after a Flip-In Event and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the outstanding shares
of Common Stock, the Board of Directors may elect to exchange each Right (other
than Rights owned by the Acquiring Person) for shares of Common Stock of the
Company at an exchange ratio of one share of Common Stock per Right.

The Company may redeem the Rights in whole, but not in part, at a price of
$0.01 per Right (the "Redemption Price"), subject to adjustment, at any time
prior to the close of business on the earlier of (i) the date upon which a
person becomes an Acquiring Person and (ii) the Expiration Date. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.

The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
without Board approval. The Rights will not interfere with any merger or other
business combination with a third party approved by the Board of Directors of
the Company since the Board of Directors may, at its option, at any time prior
to any person becoming an Acquired Person, redeem all but not less than all of
the then outstanding Rights as described above.

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<PAGE>
ACCELERATION OF VESTING UNDER STOCK INCENTIVE PLAN. Under the Company's
Stock Incentive Plan, the agreement currently utilized in the granting of stock
options and restricted stock awards provides that such options will become fully
exercisable and restricted stock will vest upon the effective time of a merger
or similar corporate event where the Company is not the surviving entity. These
provisions, as well as the ability of the Company to issue such awards, could
have an anti-takeover effect.

DESCRIPTION OF THE PROPOSED AMENDMENTS

The full text of each Amendment for which approval is sought in Proposals 5
through 8 is set forth in Exhibit A to this Proxy Statement. The following
description of the Amendments is qualified in its entirety by reference to
Exhibit A. Stockholders are urged to read carefully Exhibit A and the following
description and discussion of the proposals before voting on the proposals.

PROPOSAL 5
ALLOW BOARD TO DESIGNATE VOTING RIGHTS FOR PREFERENCE STOCK

This proposal would amend Article Four of the Company's Certificate of
Incorporation to allow the Board of Directors to determine the voting rights of
the Company's Preference Stock.

Article Four of the Certificate currently authorizes the Board of Directors
to issue the Preference Stock in series with such designations, preferences,
redemption price, dividend terms, conversion rights and liquidation rights as
the Board may determine. Article Four, however, sets forth particular rights
with respect to all Preference Stock, including a provision that the Preference
Stock shall only have voting rights after such time as the dividends are in
arrears in an amount equal to 1 1/2 times the annual dividend. At that time, the
Preference Stock voting as a class would have the right to elect two directors.

The proposed amendment would allow the Board of Directors to determine the
voting rights of each series of Preference Stock, but would not affect the
rights of any existing holders of Preference Stock.

ADVANTAGES OF THE AMENDMENT. Allowing the Board to set the voting rights of
the Preference Stock provides the Board with additional flexibility to structure
future transactions in a way that is most beneficial for the Company, including,
without limitation, financings, acquisitions, investments, stock dividends or
other distributions, or for other corporate purposes. The Board does not
perceive this amendment as having a significant impact because the Board
currently has similar power to designate the voting rights of the Class A Common
Stock and could effect the same result by providing the holders of Class A
Common Stock with the right to approve or disapprove a change in control.

DISADVANTAGES OF THE AMENDMENT. The proposed amendment could inhibit a
takeover attempt by allowing the Board to create voting impediments to a
would-be acquiror. The Board could authorize holders of Preference Stock to vote
as a class, either separately or with the holders of Common Stock, on any
merger, sale or exchange of assets by the Company or any other extraordinary
corporate transaction. Also, any of the shares of Preference Stock could be
privately placed with purchasers who might side with the Board in opposing a
hostile takeover bid. The Board of Directors is unaware of any attempt to
acquire control of the Company.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 5.

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<PAGE>
PROPOSAL 6
INCREASE NUMBER OF SHARES REQUIRED TO CALL A SPECIAL MEETING

This proposal would amend Article Nine, Section 2 of the Company's
Certificate of Incorporation to increase the number of outstanding shares
required for stockholders to call a special meeting. Article Nine, Section 2 of
the Company's Certificate of Incorporation currently provides that special
meetings of stockholders may be called by the President, by the Board of
Directors or by the holders of not less than one-fifth of the outstanding shares
entitled to vote at such meeting. The proposed amendment would increase to a
majority the percentage of outstanding shares required to call a special
stockholder meeting.

ADVANTAGES OF THE AMENDMENT. The proposed amendment would prevent a small
number of stockholders from calling a special meeting for the purpose of making
proposals that could be disruptive to the continuity and stability of the
Company. The proposed amendment would ensure that holders of at least the
minimum number of shares required to take action at a meeting are in favor of
calling a special meeting.

DISADVANTAGES OF THE AMENDMENT. The proposed amendment would make calling a
special meeting more difficult. As a result, stockholders would need to control
substantially more shares before such stockholders could call a special meeting
for the purpose of considering a merger or other takeover proposal.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 6.

PROPOSAL 7
ELIMINATION OF CUMULATIVE VOTING

This proposal would amend the Company's Certificate of Incorporation to
eliminate the requirement of cumulative voting in the election of directors. The
Delaware General Corporation Law ("GCL") provides that the certificate of
incorporation of a Delaware corporation may provide for cumulative voting at
elections of directors or under other specified circumstances. Article Nine,
Section 3 of the Company's Certificate of Incorporation currently provides that
at the election of directors each share of Common Stock shall entitle the holder
to as many votes as the number of shares held multiplied by the number of
directors to be elected and that such holder may cast all such votes for a
single director or distribute them among two or more candidates. Cumulative
voting is not required by the GCL.

The elimination of cumulative voting will enable the holders of a majority
of the shares entitled to vote in an election of directors to elect all of the
directors being elected at that time and consequently, will make it more
difficult for a minority stockholder of the Company to obtain representation on
the Board of Directors. The elimination of cumulative voting might also, under
certain circumstances, render more difficult, or discourage, a merger, tender
offer or proxy contest, the assumption of control by a holder of a large block
of the Company's securities, or the removal of incumbent management.

ADVANTAGES OF ELIMINATING CUMULATIVE VOTING. The Board of Directors
believes that the potential disadvantages of cumulative voting far outweigh the
benefits due to the increase in takeover activity and the use of abusive
takeover tactics in recent years. Cumulative voting may allow a minority of
stockholders to obtain representation on a company's board of directors to
further objectives which may be contrary to those of the majority of the
stockholders. Furthermore, cumulative voting may enable a minority to elect a
director who represents interests intent on a takeover of the Company or similar
action on terms not equally beneficial to all stockholders. For a board of
directors to work effectively for all of the stockholders, each director should
feel a responsibility to the stockholders as a whole and not to any special
group of

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<PAGE>
minority stockholders. If the proposed amendment is passed, it is unlikely any
director will be elected by any special interest group of minority stockholders.

DISADVANTAGES OF ELIMINATING CUMULATIVE VOTING. The proposed amendment to
eliminate cumulative voting in the election of directors may render more
difficult and discourage the removal of incumbent directors and management. In
addition, if a board of directors is unwilling to nominate or appoint to the
board a representative of a substantial minority of its stockholders, cumulative
voting might permit that minority to obtain board representation. Elimination of
cumulative voting, particularly where a board of directors is large in number,
substantially increases the percentage of shares required to gain representation
on the board. In the case of the Company, under the present cumulative voting
provision, assuming that 52,300,000 shares of Common Stock were outstanding and
were voted at a meeting of stockholders held for the election of directors, a
minimum of 13,075,001 shares would be required to assure a stockholder's ability
to elect one Director if the Board of Directors were classified into staggered
terms and a class of three Directors was up for election. If cumulative voting
were eliminated, based on the above assumptions, over 26,150,000 shares would be
required to ensure election of one director.

The removal of cumulative voting could discourage accumulations of large
blocks of the Company's Common Stock by purchasers seeking representation on the
Board of Directors. Consequently, the adoption of this amendment could tend to
reduce temporary fluctuations in the market price of shares of the Company's
Common Stock which might be caused by such accumulations. Accordingly,
stockholders could be deprived of certain opportunities to sell shares at a
temporarily higher market price.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 7.

PROPOSAL 8
PROVIDE FOR REMOVAL OF BOARD MEMBERS ONLY FOR CAUSE

This proposal is to approve an amendment to Article Nine, Section 4 of the
Company's Certificate of Incorporation to provide that individual directors may
be removed from office by stockholders only for cause and to clarify the
language dealing with removal of the entire Board of Directors.

Article Nine, Section 4 currently allows the stockholders to remove
individual directors with or without cause "unless the votes cast against
removal would be sufficient to elect such director at an election of the class
of directors of which he is a part." Allowing removal of directors without cause
is included today in the Company's Certificate of Incorporation as a result of
the Company's prior incorporation as a Missouri corporation and prior to the
Company's reincorporation in Delaware in 1987. Missouri corporate law provided
that a director may be removed without cause by a stockholder vote, provided
that the shares voted against such removal would not be sufficient to elect a
director under cumulative voting rules. Under Delaware law, unless the
corporation's certificate of incorporation otherwise provides: (i) a director of
a corporation with cumulative voting may be removed without cause by a
stockholder vote, provided that the shares voted against such removal would not
be sufficient to elect a director under cumulative voting rules, and (ii) a
director of a corporation with a classified board of directors (such as the
Company) may be removed only for cause.

At the time of the Company's reincorporation in Delaware, the Company
retained cumulative voting and also retained the same provisions regarding the
removal of directors as were provided under the Company's Missouri Articles of
Incorporation. The Company's former Missouri Articles provided for removal with
or without cause, but required the affirmative vote of 80% or more of the shares
entitled to vote to remove the entire Board of Directors. However, individual
directors still had some protection from unwarranted removal because of the
cumulative voting provision. The Board of Directors has recommended elimination
of cumulative voting. Therefore, the proposed amendment providing for removal of

27
<PAGE>
individual directors only "for cause" conforms the Company's Certificate with
the Delaware GCL removal protection for a director on a staggered board.

The proposed amendment to Article Nine, Section 4 specifically retains the
provisions of Article Six, Section 3 dealing with the right of the stockholders
to remove the entire Board of Directors with or without cause, upon approval by
80% or more of the shares entitled to vote to remove the entire Board of
Directors. Article Six, Section 3 of the Certificate provides in relevant part
that "notwithstanding any other provisions of the Certificate . . . , the entire
Board of Directors may be removed at any time but only with the affirmative vote
of the holders of 80% or more of the outstanding shares of capital stock of the
Company." The proposed amendment clarifies that Article Six, Section 3 is the
governing provision if the entire Board of Directors is to be removed. The Board
of Directors believes that no substantive change is made by this part of the
proposed amendment.

The proposed amendment further provides that future amendment or repeal of
Article Nine, Section 4 would require the affirmative vote of 80% of the
outstanding shares.

ADVANTAGES OF ALLOWING REMOVAL ONLY FOR CAUSE. The primary purpose of this
amendment is to preclude the removal of any director or directors by a takeover
bidder or otherwise, unless removal is warranted for reasons other than control
of the Board. For a takeover bidder to obtain effective control of the Company,
the bidder presently would need to control at least a majority of the Board
votes. One popular method for a takeover bidder to obtain control is to acquire
a majority of the outstanding shares of a company through a tender offer or open
market purchases and to use that voting power to remove the existing directors
and replace them with persons chosen by the takeover bidder. Requiring cause in
order to remove a director would defeat this strategy, thereby encouraging
potential takeover bidders to obtain the cooperation of the existing Board
before attempting a takeover. The proposal is not being made as a result of any
prior effort to remove a director. These amendments are consistent with, and
supportive of, the concept of a classified board in that they tend to moderate
the pace of change in the Board of Directors. The Board believes that the
amendment will properly condition a director's continued service upon such
director's ability to serve rather than such director's position relative to a
dominant stockholder.

The purpose of requiring approval of 80% of the outstanding shares to amend
or repeal this provision is to prevent a stockholder or group of stockholders
with a majority, but less than 80%, of the outstanding voting stock from
amending the Certificate to delete the protections granted to the Board members.
This is also consistent with the 80% approval required by Article Six, Section
Three for removal of the entire Board of Directors.

DISADVANTAGES TO PROVISIONS CONCERNING REMOVAL OF DIRECTORS. The amendment
will make the removal of any director more difficult, even if such removal is
believed by the stockholders to be in their best interests, and will eliminate
the stockholders' ability to remove a Director at will. Since the amendment will
make the removal of Directors more difficult, it will increase the Directors'
security in their positions and, since the Board has the power to retain and
discharge management, could perpetuate incumbent management.

The proposed amendment permits removal of directors only for "cause." While
what constitutes "cause" has not been conclusively established by the Delaware
courts, actions such as embezzlement, disclosure of trade secrets, or other
violations of fiduciary duty have been found to constitute cause for removal.
Courts have indicated that the desire to take over management of a company or
the failure to cooperate in management's plans for a company do not constitute
cause for removal. One effect of the proposed amendment may be to make it more
difficult for the holders of a majority of the shares of the Company to remove
directors, should they deem it to be in their best interests to do so. The
proposed amendment would render more difficult, and may discourage, an attempt
to acquire control of the Company without the approval of the Company's
management. Stockholders seeking to remove a director for cause could be forced
to initiate a lawsuit to clarify the exact meaning of "cause," which could be
costly and time-consuming. Stockholders should recognize that the amendment will
make more difficult the

28
<PAGE>
removal of a director in circumstances which do not constitute a takeover
attempt and where, in the opinion of the holders of a majority of the Company's
outstanding shares, cause for such removal may exist. Moreover, the proposed
amendment may have the effect of delaying an ultimate change in existing
management which might be desired by a majority of the stockholders.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR PROPOSAL 8.

UTILICORP UNITED INC.

[SIGNATURE]

RICHARD C. GREEN, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Dated: March 16, 1998
Kansas City, Missouri

29
<PAGE>
EXHIBIT A
PROPOSED AMENDMENTS TO THE CERTIFICATE OF INCORPORATION

PROPOSAL 5

1. Article Four, Section 2A(1) would be amended to read in its entirety as
follows:

(1) SERIES AND VARIATIONS BETWEEN SERIES. The Preference Stock may be
divided into and issued in series. The Board of Directors is hereby
expressly authorized to cause such shares to be issued from time to time in
series, and, by resolution adopted prior to the issue of shares of a
particular series, to fix and determine the following with respect to such
series, as to which matters the shares of a particular series may vary from
those of any or all other series:

(a) the distinctive serial designation of the shares of such series;

(b) the dividend rate thereof;

(c) the date from which dividends on shares issued prior to the date
for payment of the first dividend thereon shall be cumulative;

(d) the redemption price or prices and the terms of redemption
(except as fixed in this Division A);

(e) the terms and amount of any sinking fund for the purchase or
redemption thereof;

(f) the terms and conditions, if any, under which said shares may be
converted;

(g) the amounts payable thereon upon the involuntary liquidation,
dissolution or winding up of the corporation; and

(h) the voting rights, full or limited, or the voting power, if any,
of shares of such series.

Except as the shares of a particular series may vary from those of any
or all other series in the foregoing respects, all of the shares of the
Preference Stock, regardless of series, shall in all respects be equal and
shall have the preferences, rights, privileges and restrictions herein
fixed.

2. Article Four, Section 2A(5) would be amended to read in its entirety as
follows:

(5) VOTING RIGHTS. Any particular series of Preference Stock shall
have such voting rights as shall be designated in a resolution passed by the
Board of Directors establishing such series.

PROPOSAL 6

Article Nine, Section 2 would be amended to read in its entirety as follows:

Section 2. Special meetings of the stockholders may be called by the
President, by the Board of Directors, by the holders of not less than a
majority of all outstanding shares entitled to vote at such meetings or by
such other officers or persons as may be provided in the Bylaws.

PROPOSAL 7

Article Nine, Section 3 would be amended to read in its entirety as follows:

Section 3. At all elections of directors of the Corporation, each
stockholder shall be entitled to one vote per share as to each director to
be elected and no shareholder shall have the right to cast votes in the
aggregate or to cumulate votes for the election of any director; provided,
however, that at any special meeting of stockholders called at the request
of any holder of the Preference Stock entitled to make such a request
pursuant to the provisions of Section 2A of Article Four and at the next and
succeeding annual meetings of stockholders until termination of the voting
powers of the

30
<PAGE>
Preference Stock, the holders of the Preference Stock, voting separately as
a class, shall be entitled to elect two directors of the Corporation and the
holders of the Common Stock shall be entitled to elect the remaining
directors of the Corporation in accordance with this Section.

PROPOSAL 8

Article Nine, Section 4 would be amended to read as follows:

Section 4. At a meeting called expressly for that purpose, directors
may be removed in the manner provided in this Section. Such meeting shall be
held at the registered office or principal business office of the
Corporation in this state or in the city or county of the state in which the
principal business office of the Corporation is located. The entire Board of
Directors may be removed as provided in Section 3 of Article Six of this
Certificate of Incorporation. If less than the entire Board is to be
removed, no one of the Directors may be removed without cause. Whenever the
holders of the shares of any class or series are entitled to elect one or
more directors by the provisions of this Certificate of Incorporation, the
provisions of this section shall apply, in respect of the removal of a
director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. This Section may not be repealed or amended
in any respect, unless such action is approved by the affirmative vote of
the holders of not less than 80% of the outstanding shares of Voting Stock
(as defined in Article Eight) of the Corporation.

31
<PAGE>
APPENDIX 1

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.

6. "Designated Beneficiary" shall mean the person, or persons as
elected by the

<PAGE>

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.

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

<PAGE>

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

<PAGE>

(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 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

<PAGE>

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

<PAGE>

(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.

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.(1) 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%(2) 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

______________________
(1) Language in italics is proposed to be added following approval at the
1998 Stockholders' Meeting.

(2) Proposed to be added following approval at the 1998 Stockholders' Meeting.

<PAGE>

Employee unless the 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.

<PAGE>
APPENDIX 2

UTILICORP UNITED INC.
AMENDED AND RESTATED
1986 STOCK INCENTIVE PLAN

1. PURPOSE

The UtiliCorp United Inc. Amended and Restated 1986 Stock Incentive Plan
is designed to enable qualified executive, managerial, supervisory and
professional personnel of UtiliCorp United Inc. to acquire or increase their
ownership of the $1.00 par value common stock of the Company on reasonable
terms. The opportunity so provided is intended to foster, in participants, a
strong incentive to put forth maximum effort for the continued success and
growth of the Company and its Subsidiaries, to aid in retaining individuals
who put forth such efforts, and to assist in attracting the best available
individuals in the future.

2. DEFINITIONS

When used herein, the following terms shall have the meaning set forth
below:

2.1 "Award" shall mean an Option or a Restricted Stock Award.

2.2 "Board" means the Board of Directors of UtiliCorp United Inc.

2.3 "Committee" means the members of the Board's Compensation
Committee, which shall consist solely of two or more directors who are both
(a) "non-employee directors" under Rule 16b-3(b)(3) promulgated under Section
16 of the Exchange Act, or any successor provision thereto and (b) "outside
directors" under Section 162(m) of the Code.

2.4 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

2.5 "Company" means UtiliCorp United Inc., a Delaware corporation.

2.6 "Fair Market Value" means, with respect to the Company's Shares,
the mean between the high and low prices of Shares on the New York Stock
Exchange Composite Tape on, as applicable: (a) the day on which an Award is
granted; (b) the day all restrictions lapse for a Restricted Stock Award; or
(c) the day Shares are delivered in lieu of current cash compensation as
permitted by the Plan or, if there should be no sale on that date, on the
next preceding day on which there was a sale.

2.7 "Grantee" means a person to whom an Award is made.

2.8 "Incentive Stock Option" or "ISO" means an Option awarded under the
Plan which meets the terms and conditions established by Section 422 of the
Code and applicable regulations.

<PAGE>

2.9 "Non-Qualified Stock Option" or "NQSO" means an Option awarded under
the Plan other than an ISO.

2.10 "Option" means the right to purchase a number of Shares, at a price,
for a term, under conditions, and for cash or other considerations fixed by the
Committee and expressed in the written instrument evidencing the Option. An
Option may be either an ISO or NQSO.

2.11 "Plan" means the Company's Amended and Restated 1986 Stock Incentive
Plan.

2.12 "Restricted Stock Award" means the grant of a right to receive a
number of Shares at a time or times fixed by the Committee in accordance with
the Plan and subject to such limitations and restrictions as the Plan and the
Committee impose, all as expressed in the written instrument evidencing the
Restricted Stock Award.

2.13 "Right of First Refusal" means the right of the Company to be given
the opportunity to purchase Shares issued pursuant to Awards under the Plan at
their then Fair Market Value, in the event the holder of such Shares desires to
sell the Shares to any other person. This right may apply to any Shares awarded
under the Plan under terms and conditions established by the Committee at the
time of Award and included in the written instrument evidencing the Award, and
shall apply to sales by the Grantee or the Grantee's guardian, legal
representative, joint tenant, tenant in common, heir or successors.

2.14 "Shares" means shares of the Company's $1.00 par value common stock
or, if by reason of the adjustment provisions hereof any rights under an Award
under the Plan pertain to any other security, such other security.

2.15 "Subsidiary" means any business, whether or not incorporated, in which
the Company, at the time an Award is granted to an employee thereof, or in other
cases, at the time of reference, owns directly or indirectly not less than 50
percent of the equity interest except that with respect to an ISO the term
"Subsidiary" shall have the meaning set forth in Section 425(f) of the Code.

2.16 "Successor" means the legal representative of the estate of a deceased
Grantee or the person or persons who shall acquire the right to exercise an
Option, or to receive Shares issuable in satisfaction of a Restricted Stock
Award, by bequest, inheritance or permitted transfer as provided in accordance
with Section 8 hereof, or by reason of the death of the Grantee, as provided in
accordance with Section 9 hereof.

2.17 "Term" means the period during which a particular Option may be
exercised or the period during which the restrictions placed on a Restricted
Stock Award are in effect.

3. ADMINISTRATION OF THE PLAN

<PAGE>

3.1 The Plan shall be administered by the Committee.

3.2 Subject to the provisions of the Plan, the Committee shall have the
sole authority to determine:

(i) the employees of the Company and its Subsidiaries to whom Awards
shall be granted;

(ii) the number of Shares to be covered by each Award;

(iii) the price to be paid for the Shares upon the exercise of
each Option;

(iv) the Term within which each Option may be exercised;

(v) the terms and conditions of each Option, which may include
provisions for payment of the option price in Shares at the Fair
Market Value of such Shares on the day of their delivery for such
purpose;

(vi) the restrictions on transfer and forfeiture conditions with
respect to the Award; and

(vii) any other terms and conditions of the Award.

3.3 The Committee may construe and interpret the Plan, reconcile
inconsistencies thereunder and supply omissions therefrom. Any decision or
action taken by the Committee in the exercise of such powers or otherwise,
arising out of or in connection with the construction, administration,
interpretation and effect of the Plan and of its rules and regulations shall be
conclusive and binding upon all Grantees, and any other person claiming under or
through any Grantee.

3.4 The Committee shall designate one of its members as Chairman. It
shall hold its meetings at such times and places as may be determined. All
determinations of the Committee shall be made by a majority of its members at
the time in office. Any determination reduced to writing and signed by a
majority of the members of the Committee at the time in office shall be fully as
effective as if it had been made at a meeting duly called and held. The
Committee may appoint a Secretary, who need not be a member of the Committee,
and may establish and amend such rules and regulations for the conduct of its
business and the administration of the Plan as it shall deem advisable.

3.5 No member of the Committee shall be liable, in the absence of bad
faith, for any act or omission with respect to his service on the Committee.
Service on the Committee is hereby specifically declared to constitute service
as a Director of the Company, to the end that the members of the Committee
shall, in respect of their acts and omissions as such, be entitled to the
limitation of liability, indemnification and reimbursement as Directors of the
Company pursuant to its Certificate of Incorporation, Bylaws and to the benefits
of any insurance policy

<PAGE>

maintained by the Company providing coverage with respect to acts or omission
of Directors of the Company.

3.6 The Committee shall regularly inform the Board as to its actions under
the Plan in such manner, at such times, and in such form as the Board may
request.

3.7 Notwithstanding the foregoing, in the event the Committee shall not
exist at any time during the term of this Plan, the Plan shall be administered
by the Board of Directors.

4. ELIGIBILITY

Awards may be made under the Plan only to the class of employees of the
Company or of a Subsidiary, including officers, consisting of those employees
who have executive, managerial, supervisory or professional responsibilities
("Eligible Employees"). A Director who is not an employee shall not be eligible
to receive an Award. Awards may be made to Eligible Employees whether or not
they have received prior Awards under the Plan or under any other plan, and
whether or not they are participants in other benefit plans of the Company.

5. SHARES SUBJECT TO PLAN

2,262,644(1) Shares are hereby reserved for issuance in connection with
Awards under the Plan and the issuance of Shares pursuant to Section 19, below.
The Shares so used may be Shares held in the treasury, however acquired, or
Shares which are authorized but unissued. Any Shares subject to Options which
lapse unexercised, and any Shares forming part of a Restricted Stock Award which
do not vest in the Grantee, shall once again be available for grant of Awards.

6. GRANTING OF OPTIONS

6.1 Subject to the terms of the Plan, the Committee may from time to time
grant Options to Eligible Employees.

6.2 Pursuant to the Code and applicable regulations, the aggregate Fair
Market Value (determined at the time the Option is granted) of Shares as to
which ISOs are exercisable for the first time by a Grantee during any calendar
year (under all Plans of the Grantee's employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000. No ISO shall be granted to
a Grantee who, at the time the ISO is granted, owns (within the meaning of
Section 422(b)(6) of the Code) stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Grantee's employer
corporation or of its parent or subsidiary corporation unless, at the time the
ISO is granted, the Option price is at least 110 percent of the Fair Market
Value of the stock subject to the ISO, and the ISO by its terms is not
exercisable after the expiration of five years from the date the

_______________________________
(1) 262,644 Shares remain unissued under the 1986 Stock Incentive Plan and
2,000,000 additional Shares have been added to the Plan hereunder.

<PAGE>

ISO is granted.

6.3 The purchase price of each Share subject to an Option shall be fixed
by the Committee, but shall not be less than the greater of the par value of the
Share or 100 percent of the Fair Market Value of the Share on the date the
Option is granted, except as otherwise provided in Section 6.2 with respect to a
10 percent stockholder.

6.4 Each Option shall expire and all rights to purchase Shares thereunder
shall terminate on the date fixed by the Committee and expressed in the written
instrument evidencing the Option, which date in the case of ISOs shall not be
after the expiration of ten years from the date the Option is granted, except as
otherwise provided in Section 6.2 with respect to a 10 percent stockholder.

6.5 Subject to the terms of the Plan each Option shall become exercisable
at the time, and for the number of Shares, fixed by the Committee and expressed
in the written instrument evidencing the Option; provided, however, that during
any fiscal year of the Company, no Grantee shall be granted Options covering
more than 150,000 Shares. Except to the extent otherwise provided in or
pursuant to Sections 9 and 10, no Option shall become exercisable as to any
Shares prior to the first anniversary of the date on which the Option was
granted.

6.6 Subject to the terms of the Plan, the Committee may at the time of the
Award make all or any portion of Option Shares subject to a Right of First
Refusal for any period of time designated by the Committee in the written
instrument evidencing the Awards.

7. RESTRICTED STOCK AWARDS

7.1 Subject to the terms of the Plan, the Committee may also grant
Eligible Employees Restricted Stock Awards.

7.2 The number of Shares covered thereby and other terms and conditions of
any such Restricted Stock Award, including the period for which and the
conditions on which the Shares included in the Award will be subject to
forfeiture and restrictions on transfer or on the ability of the Grantee to make
elections with respect to the taxation of the Award without the consent of the
Committee, shall be determined by the Committee and expressed in the written
instrument evidencing the Award; provided, however, that during any fiscal year
of the Company, no Grantee shall receive Restricted Stock Awards covering more
than 150,000 Shares. Except as provided in or pursuant to Sections 9 and 10, no
such restrictions shall lapse earlier than the first, or later than the tenth,
anniversary of the date on which the Award was granted.

7.3 Subject to the terms of the Plan, the Committee may at the time of the
Award make all or portion of the Shares awarded under a Restricted Stock Award
subject to a Right of First Refusal for any period of time designated by the
Committee and expressed in the written instrument evidencing the Award.

<PAGE>

7.4 The Committee, in its sole discretion, may impose performance
restrictions on Restricted Stock Awards as it may deem advisable or appropriate
in accordance with this Section 7.4.

7.4.1 The Committee may set restrictions based upon (a) the
achievement of specific performance objectives (Company-wide, divisional or
individual), (b) applicable Federal or state securities laws, or (c) any
other basis determined by the Committee in its sole discretion.

7.4.2 For purposes of qualifying Restricted Stock Awards as
"performance-based compensation" under Section 162(m) of the Code, the
Committee, in its sole discretion, may set restrictions based upon the
achievement of performance goals. The performance goals shall be set by
the Committee on or before the latest date permissible to enable the
Restricted Stock Awards to qualify as "performance-based compensation"
under Section 162(m) of the Code. In granting Restricted Stock Awards that
are intended to qualify under Code Section 162(m), the Committee shall
follow any procedures determined by it in its sole discretion from time to
time to be necessary, advisable or appropriate to ensure qualification of
the Restricted Stock Awards under Code Section 162(m) (e.g., in determining
the performance goals).

8. NON-TRANSFERABILITY OF RIGHTS

Except for certain transfers of Non-Qualified Stock Options to family
members, trusts and charities, or pursuant to domestic relations orders, which
the Committee in its sole discretion may permit, no Option and no rights under
any Restricted Stock Award shall be transferable by the Grantee otherwise than
by will or the laws of descent and distribution, and, except for permitted
transferees, each Option may be exercised during the lifetime of the Grantee
only by him.

9. DEATH OR TERMINATION OF EMPLOYMENT

9.1 Subject to the provisions of the Plan, the Committee may make and
include in the written instrument evidencing an Option such provisions
concerning exercise or lapse of the Option on death or termination of employment
as it shall in its discretion determine.

9.2 No ISO shall be exercisable after the date which is three months
following the Grantee's termination of employment for any reason other than
death or disability, unless (a) the Grantee dies during such three-month period,
and (b) the written instrument evidencing the Award or the Committee permits
later exercise. No ISO may be exercised more than one year after the Grantee's
termination of employment on account of disability, unless (a) the Grantee dies
during such one-year period and (b) the written instrument evidencing the Award
or the Committee permits later exercise.

9.3 The effect of death or termination of employment on Shares issuable or

<PAGE>

deliverable pursuant to any Restricted Stock Awards shall be as stated in the
written instrument evidencing the Award.

9.4 A transfer of employment between the Company and a Subsidiary, or
between Subsidiaries, shall not constitute a termination of employment for
purposes of the Award and the Plan.

10. PROVISIONS RELATING TO TERMINATION OF THE COMPANY'S SEPARATE EXISTENCE

The Committee may provide that in the event that the Company is to be
wholly or partially liquidated, or agrees to participate in a merger,
consolidation or reorganization in which it or any entity controlled by it is
not the surviving entity, any or all Options granted under the Plan shall be
immediately exercisable in full and the restrictions relating to any or all
Restricted Stock Awards made under the Plan shall immediately lapse.

11. WRITINGS EVIDENCING AWARDS

Each Award granted under the Plan shall be evidenced by a writing which
may, but need not be, in the form of an agreement to be signed by the Grantee.
The writing shall set forth the nature and size of the Award, its Term, the
other terms and conditions thereof, and such other matters as the Committee
directs. Acceptance of any benefits of an Award by the Grantee shall be an
assent to the terms and conditions set forth therein, whether or not the writing
is in the form of an agreement signed by the Grantee.

12. EXERCISE OF RIGHTS UNDER AWARDS

12.1 A person entitled to exercise an Option may do so only by delivery of
a written notice to that effect specifying the number of Shares with respect to
which the Option is being exercised and any other information which the
Committee has previously prescribed and of which such person has been notified.

12.2 Such a notice shall be accompanied by payment in full of the purchase
price of any Shares to be purchased thereunder, with such payment being made in
cash or Shares having a Fair Market Value on the date of exercise of the Option
equal to the purchase price payable under the Option, or a combination of cash
and Shares, and no Shares shall be issued upon exercise of an Option until full
payment has been made therefor; provided that the Committee may disapprove any
payment in part or full by the transfer of Shares to the Company.

12.3 Upon exercise of an Option or after grant of a Restricted Stock Award
under which a Right of First Refusal has been required with respect to some or
all of the Shares subject to such Option, or included in the Restricted Stock
Award, the Grantee shall be required to acknowledge, in writing, his or her
understanding of such Right of First Refusal and the legend which shall be
placed on the certificates for such Shares in respect thereof.

<PAGE>

12.4 All notices or requests by a Grantee provided for herein shall be
delivered to the Secretary of the Company.

13. EFFECTIVE DATE OF THE PLAN AND DURATION

The Plan shall be effective as of September 1, 1995, and no Awards may be
granted under the Plan after September 1, 2005, although the terms of any Award
may be amended at any time prior to the expiration of the Award in accordance
with the Plan.

14. DATE OF AWARD

The date of an Award shall be the date on which the Committee's
determination to grant the same is final, or such latter date as shall be
specified by the Committee in connection with such determination.

15. STOCKHOLDER STATUS

No person shall have any rights as a stockholder by virtue of the grant of
an Award under the Plan except with respect to Shares actually issued to that
person.

16. POSTPONEMENT OF EXERCISE

The Committee may postpone any exercise of an Option or the delivery of any
Shares pursuant to a Restricted Stock Award for such period as the Committee in
its discretion may deem necessary in order to permit the Company (i) to effect
or maintain registration of the Plan or the Shares issuable upon the exercise of
an Option or distributable in satisfaction of a Restricted Stock Award under the
Securities Act of 1933, as amended, or the securities laws of any applicable
jurisdiction, (ii) to permit any action to be taken in order to comply with
restrictions or regulations incident to the maintenance of a public market for
its Shares or to list the Shares thereon; or (iii) to determine that such Shares
and the Plan are exempt from such registration or that no action of the kind
referred to in (ii) above need be taken; and the Company shall not be obligated
by virtue of any terms and conditions of any Award or any provision of the Plan
to permit the exercise of an Option to sell or deliver Shares in violation of
the Securities Act of 1933 or other applicable law. Any such postponement shall
not extend the Term of an Option nor shorten the Term of a restriction
applicable under any Restricted Stock Award; and neither the Company nor its
directors or officers or any of them shall have any obligation or liability to
the Grantee of an Award, to any Successor of a Grantee or to any other person
with respect to any Shares as to which an Option shall lapse because of such
postponement or as to which issuance under a Restricted Stock Award was thereby
delayed.

17. TERMINATION, SUSPENSION OR MODIFICATION OF PLAN

The Board may at any time terminate, suspend or modify the Plan, except
that the Board shall not, without authorization of the stockholders of the
Company, effect any change

<PAGE>

(other than through adjustment for changes in capitalization as herein
provided) which increases the aggregate number of Shares for which Awards may
be granted or sold, materially amends the formula for determining the
purchase price of Shares on which Options may be granted, changes the class
of employees eligible to receive Awards, extends the period during which
Awards may be granted or removes the restrictions set forth in this sentence.

No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Grantee or any Successor under an Award granted
before the date of such termination, suspension or modification unless such
Grantee or Successor shall consent thereto. Adjustments for changes in
capitalization or corporate transactions as provided for herein shall not,
however, be deemed to adversely affect such right.

18. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION AND CORPORATE TRANSACTIONS

Any change in the number of outstanding shares of the Company occurring
through stock splits, combination of shares, recapitalization, or stock
dividends after the adoption of the Plan shall be appropriately reflected in an
increase or decrease in the aggregate number of Shares then available for the
grant of Awards under the Plan, or to become available through the termination,
surrender or lapse of Awards previously granted and in the numbers of Shares
subject to Restricted Stock Awards then outstanding; and appropriate adjustments
shall be made in the per Share option price and/or number of Shares subject to
the Option as to any outstanding Options. No fractional Shares shall result
from such adjustments. Similar adjustments shall be made in the event of
distribution of other securities in respect of outstanding Shares or in the
event of a reorganization, merger, consolidation or any other change in the
corporate structure or Shares of the Company, if and to the extent that the
Committee deems such adjustments appropriate.

19. DELIVERY OF SHARES IN LIEU OF CASH INCENTIVE AWARDS OR DIRECTOR'S FEES

(a) Any employee otherwise eligible for an Award under the Plan who is
eligible to receive a cash bonus or incentive payment from the Company under any
management bonus or incentive plan of the Company or entitled to receive a cash
payment for services rendered as a Director, may make application to the
Committee in such manner as may be prescribed from time to time by the Committee
to receive Shares available under the Plan in lieu of all or any portion of such
cash payment. Such an application may be made by, and approved with respect to,
a member of the Committee.

(b) The Committee may in its discretion honor such application by
delivering Shares available under the Plan to such employee, equal in Fair
Market Value on the delivery date to that portion of the cash payment otherwise
payable to the employee under such bonus or incentive plan, or for services
rendered as a Director, for which a Share delivery is to be made in lieu of cash
payment.

<PAGE>

(c) Any Shares delivered to an employee under this Section shall reduce
the aggregate number of Shares authorized for issuance and delivery under the
Plan.

(d) Such applications and such delivery of Shares shall not be permitted
after the expiration of ten years from the effective date of the Plan. Delivery
of such Shares shall be deemed to occur on the date certificates therefor are
sent by United States mail or hand-delivered to the recipient.

20. NON-UNIFORM DETERMINATION PERMISSIBLE

The Committee's determination under the Plan including, without limitation,
determinations as to the persons to receive Awards, the form, amount and type of
Awards (i.e., ISOs, NQSOs or Restricted Stock Awards), the terms and provisions
of Awards, the written instruments evidencing such Awards, and the granting or
rejecting of applications for delivery of Shares in lieu of cash bonus or
incentive payments or compensation of a Director need not be uniform as among
persons similarly situated and may be made selectively among otherwise eligible
employees or Directors, whether or not such employees or Directors are similarly
situated.

21. TAXES

(a) The Company shall be entitled to withhold the amount of any
withholding tax payable with respect to any Awards or Shares delivered in lieu
of cash payments. The person entitled to receive Shares pursuant to the Award
will be given notice as far in advance as practicable to permit such cash
payment to be made to the Company. The Company may defer making delivery of
Shares until indemnified to its satisfaction with respect to any such
withholding tax.

(b) Notwithstanding the foregoing, at any time when a Grantee is required
to pay to the Company an amount required to be withheld under applicable income
tax laws, the Grantee may satisfy this obligation in whole or in part by
electing (the "Election") to have the Company withhold Shares having a value
equal to the amount required to be withheld. The value of the Shares to be
withheld shall be based on the closing price of the Shares on the New York Stock
Exchange on the date that the amount of tax to be withheld shall be determined
("Tax Date"). Each Election must be made on or prior to the Tax Date. The
Committee may disapprove any Election or may suspend or terminate the right to
make Elections. An Election is irrevocable.

22. TENURE

An employee's right, if any, to continue in the employ of the Company or a
Subsidiary shall not be affected by the fact that he is a participant under this
Plan; and the Company or Subsidiary shall retain the right to terminate his
employment without regard to the effect such termination may have on any rights
he may have under the Plan.

<PAGE>

23. APPLICATION OF PROCEEDS

The proceeds received by the Company from sale of its Shares pursuant to
Options granted under the Plan shall be used for general corporate purposes.

24. OTHER ACTIONS

Nothing in the Plan shall be construed to limit the authority of the
Company to exercise all of its corporate rights and powers, including, by way of
illustration and not by way of limitation, the right to grant Options for proper
corporate purposes otherwise than under the Plan to any employee or any other
person, firm, corporation, association or other entity, or to grant Options to,
or assume Options of, any person in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of all or any part of the business or
assets of any person, firm, corporation, association or other entity.

<PAGE>

UTILICORP UNITED INC.
PROXY/VOTING INSTRUCTION CARD

PROXY

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY for the
Annual Meeting on May 6, 1998. The undersigned hereby constitutes and appoints
Robert F. Jackson, Avis G. Tucker and Robert K. Green and each of them, true and
lawful agents and proxies with full power of substitution in each, to represent
and to vote, as designated below, all of the shares of common stock of UtiliCorp
United Inc. held of record by the undersigned on March 9, 1998, at the Annual
Meeting of Stockholders to be held in the Imperial Ballroom of the Muehlebach
Tower of the Kansas City Marriott Downtown 12th & Wyandotte on Wednesday, May 6,
1998, at 2:00 p.m. (Kansas City time) and at any adjournments thereof, on all
matters coming before said meeting. IF NO DIRECTION AS TO THE MANNER OF VOTING
THE PROXY IS MADE, THE PROXY WILL BE VOTED FOR THE PROPOSALS.

Election of Directors, Nominees: COMMENTS
----------------------------
John R. Baker ----------------------------
Dr. Stanley O. Ikenberry ----------------------------
Irvine O. Hockaday, Jr. ----------------------------
(if you have written in the above space,
please mark the corresponding box on the
reverse side of this card)

You are encouraged to specify your choices by marking the appropriate boxes (SEE
REVERSE SIDE) but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. However, the Proxies cannot vote
your shares unless you sign and return this card.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

UTILICORP UNITED INC.
ANNUAL
MEETING OF
SHAREHOLDERS

MAY 6, 1998, 2:00 P.M.
IMPERIAL BALLROOM OF THE
MUEHLEBACH TOWER OF THE
KANSAS CITY MARRIOTT
DOWNTOWN 12TH & WYANDOTTE

<PAGE>

/x/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS.

WITHHOLD
AUTHORITY
TO VOTE FOR ALL
1. Election of Directors FOR NOMINEES
(except as withheld below) / / / /

For, except vote withheld from the following nominee(s):

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

FOR AGAINST ABSTAIN
2. To amend the Certificate of Incorporation
to increase the number of authorized shares / / / / / /
of Common Stock to 200,000,000.

3. To amend the Amended and Restated 1986 / / / / / /
Stock Incentive Plan to allow the issuance
of an additional 2,000,000 shares pursuant
to the plan.

4. To approve an amendment to the Utilicorp / / / / / /
United Inc. Annual and Long-Term Incentive
Plan.

5. To amend the Company's Certificate of / / / / / /
Incorporation to allow the Board to
designate voting rights for Preference
Stock:

6. To amend the Company's Certificate of / / / / / /
Incorporation to increase the number of
shares required to call a special meeting:

7. To amend the Company's Certificate of / / / / / /
Incorporation to eliminate cumulative
voting:

8. To amend the Company's Certificate of / / / / / /
Incorporation to provide for removal of
Board members only for cause.

SIGNATURE(S) DATE
------------------------------------ --------------------
NOTE: Please sign exactly as name appears on this form. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

Your vote is important to us!

Please follow these steps to ensure that your proxy is properly executed and
returned in time to be counted:

1. Mark your vote for Proposal 1 in one of the two boxes to the right of
Proposal 1. If you wish to withhold authority to vote for any individual
nominee, write the name of each such nominee on the lines provided.

2. Mark your vote for Proposals 2, 3, 4, 5, 6, 7 and 8 in one of the three boxes
to the right of each Proposal.

3. Sign at bottom left in the space provided, exactly as your name appears on
the form. Joint owners should each sign. Also enter the date.

4. Tear off at perforation and mail the completed card with signature(s) in the
enclosed reply envelope to:

UtiliCorp United Inc.
P.O. Box 8621
Edison, NJ 08818-9128