10-Q

QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

ý
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2002 or

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                              to                             .

Commission file number: 1-3368

THE EMPIRE DISTRICT ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

Kansas	44-0236370
(State of Incorporation)	(I.R.S. Employer Identification No.)
602 Joplin Street, Joplin, Missouri	64801
(Address of principal executive offices)	(zip code)

Registrant's telephone number: (417) 625-5100

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Common stock outstanding as of May 1, 2002: 19,823,247 shares.

THE EMPIRE DISTRICT ELECTRIC COMPANY

INDEX

		Page Number
Part I—Financial Information:
Item 1.	Consolidated Financial Statements:
	a.    Consolidated Statement of Income (Loss)	3
	b.    Consolidated Statement of Comprehensive Income	5
	c.    Consolidated Statement of Common Shareholder's Equity	5
	d.    Consolidated Balance Sheet	6
	e.    Consolidated Statement of Cash Flows	7
	f.    Notes to Consolidated Financial Statements	8
	Forward Looking Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9
	Results of Operations	9
	Liquidity and Capital Resources	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Part II—Other Information:
Item 1.	Legal Proceedings—(none)
Item 2.	Changes in Securities and Use of Proceeds—(none)
Item 3.	Defaults Upon Senior Securities—(none)
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits and Reports on Form 8-K	16
Signatures		17

PART I.    FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

EMPIRE DISTRICT ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED)

			Three Months Ended March 31,
			2002			2001
Operating revenues:
	Electric		$	64,561,547		$	60,294,475
	Water			257,895			257,462
				64,819,442			60,551,937
Operating revenue deductions:
	Operating expenses:
		Fuel		14,280,552			9,198,378
		Purchased power		14,756,176			21,483,935
		Other		10,119,562			8,867,796
		Merger related expenses		1,524,355			1,264,586
	Total operating expenses			40,680,645			40,814,695
	Maintenance and repairs			6,085,937			3,136,218
	Depreciation and amortization			6,363,602			7,194,971
	Benefit from income taxes			(75,115	)		(44,476	)
	Merger-related income tax benefit			—			(2,323,982	)
	Other taxes			3,788,827			3,456,964
				56,843,896			52,234,390
Operating income				7,975,546			8,317,547
Other income and deductions:
		Allowance for equity funds used during construction		29,116			224,413
		Interest income		—			84,841
	Benefit from other income taxes			161,471			871
		Other—net		(701,324	)		(9,644	)
				(510,737	)		300,481
Income before interest charges				7,464,809			8,618,028
Interest charges:
		Long-term debt—other		6,596,748			6,585,656
		Trust preferred distributions by subsidiary holding solely parent debentures		1,062,500			354,167
		Commercial paper		140,034			857,570
		Allowance for borrowed funds used during construction		(100,768	)		(1,639,473	)
		Other		302,839			252,907
				8,001,353			6,410,827
Net (loss) income applicable to common stock			$	(536,544	)	$	2,207,201
Weighted average number of common shares outstanding				19,784,887			17,607,705
Basic and diluted (loss) earnings per weighted average share of common stock			$	(0.03	)	$	0.13
Dividends per share of common stock			$	0.32		$	0.32

See accompanying Notes to Consolidated Financial Statements.

3

EMPIRE DISTRICT ELECTRIC COMPANY

CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED)

			Twelve Months Ended March 31,
			2002			2001
Operating revenues:
	Electric		$	267,456,578		$	265,431,267
	Water			1,065,780			1,093,737
				268,522,358			266,525,004
Operating revenue deductions:
	Operating expenses:
		Fuel		61,605,544			48,266,368
		Purchased power		55,656,193			72,907,765
		Other		37,977,947			33,183,841
		Merger Related Expenses		1,651,442			1,723,680
	Total operating expenses			156,891,126			156,081,654
	Maintenance and repairs			22,044,455			14,701,124
	Depreciation and amortization			28,624,082			28,153,939
	Provision for income taxes			3,970,515			10,439,830
	Merger-related income tax benefit			—			(2,323,982	)
	Other taxes			13,890,300			13,315,312
				225,420,478			220,367,877
Operating income				43,101,880			46,157,127
Other income and deductions:
	Allowance for equity funds used during construction			345,549			2,237,542
	Interest income			143,723			478,375
	Loss on plant disallowance			(4,087,066	)		—
	Provision for other income taxes			1,837,772			15,851
	Other—net			(2,081,700	)		(576,967	)
				(3,841,722	)		2,154,801
Income before interest charges				39,260,158			48,311,928
Interest charges:
	Long-term debt—other			26,395,402			26,351,308
	Trust preferred distributions by subsidiary holding solely parent debentures			4,250,000			354,167
	Commercial paper			1,511,679			2,105,260
	Allowance for borrowed funds used during construction			(1,502,593	)		(4,543,361	)
	Other			946,500			591,487
				31,600,988			24,858,861
Net income applicable to common stock			$	7,659,170		$	23,453,067
Weighted average number of common shares outstanding				18,314,288			17,557,195
Basic and diluted earnings per weighted average share of common stock			$	0.42		$	1.34
Dividends per share of common stock			$	1.28		$	1.28

See accompanying Notes to Consolidated Financial Statements.

4

EMPIRE DISTRICT ELECTRIC COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

				March 31, 2002
	Current Quarter			12 Months Ended
Net income (loss)	$	(536,544	)	$	7,659,170
Net change in unrealized gain/(loss) on derivative instruments:		4,175,836			2,594,526
Comprehensive Income	$	3,639,292		$	10,253,696

CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY (UNAUDITED)

	March 31, 2002		Dec. 31, 2001			March 31, 2001
Common stock—$1 par value	$	19,747,799	$	19,703,837		$	17,556,527
Preference stock purchase rights		63,194		55,761			52,765
Capital in excess of par value		208,730,152		207,756,805			166,447,966
Accumulated other comprehensive income (loss)		2,594,526		(1,581,310	)		—
Installments received on common stock		652,243		466,395			717,289
Retained earnings		35,039,279		41,906,483			50,689,783
Total Common Shareholders' Equity	$	266,827,193	$	268,307,971		$	235,464,329

See accompanying Notes to Consolidated Financial Statements.

5

EMPIRE DISTRICT ELECTRIC COMPANY

CONSOLIDATED BALANCE SHEET (UNAUDITED)

				March 31, 2002		December 31, 2001
ASSETS
	Utility plant, at original cost:
		Electric		$	1,079,792,235	$	1,072,289,259
		Water			7,838,313		7,810,754
		Construction work in progress			27,459,791		20,136,645
					1,115,090,339		1,100,236,658
		Accumulated depreciation			356,298,219		349,743,785
					758,792,120		750,492,873
	Current assets:
		Cash and cash equivalents			7,665,290		11,440,275
		Accounts receivable—trade, net			21,661,542		19,621,889
		Accrued unbilled revenues			8,909,294		10,986,746
		Accounts receivable—other			5,031,933		7,231,772
		Fuel, materials and supplies			20,162,121		20,094,559
		Prepaid expenses			899,035		1,063,195
					64,329,215		70,438,436
	Deferred charges:
		Regulatory assets			37,207,190		37,743,107
		Unamortized debt issuance costs			5,058,967		5,180,243
		Gain in fair value of derivatives			4,256,720		—
		Other			19,620,546		18,639,293
					66,143,423		61,562,643
			Total Assets	$	889,264,758	$	882,493,952
CAPITALIZATION AND LIABILITIES:
	Common stock, $1 par value, 19,810,993 and 19,759,598 shares issued and outstanding, respectively			$	19,810,993	$	19,759,598
	Capital in excess of par value				209,382,395		208,223,200
	Retained earnings (Note 2)				35,039,279		41,906,483
	Accumulated other comprehensive income (loss) (net)				2,594,526		(1,581,310	)
			Total common stockholders' equity		266,827,193		268,307,971
Long-term Debt
	Company obligated manditorily redeemable trust preferred securities of subsidiary holding solely parent debentures				50,000,000		50,000,000
	Obligations under capital lease				548,149		567,315
	Other				308,067,262		308,047,363
					358,615,411		358,614,678
	Current liabilities:
		Accounts payable and accrued liabilities			28,996,565		34,520,862
		Commercial paper			56,000,000		55,500,000
		Customer deposits			4,189,511		4,127,061
		Interest accrued			10,071,712		5,091,240
		Taxes accrued, including income taxes			—		—
		Current maturities—mortgage bonds			37,500,000		37,500,000
		Obligations under capital lease			179,562		158,329
		Loss in fair value of derivatives			72,000		2,547,300
					137,009,350		139,444,792
	Noncurrent liabilities and deferred credits:
		Regulatory liability			12,618,829		12,915,456
		Deferred income taxes			87,280,821		84,625,946
		Unamortized investment tax credits			6,689,926		6,681,000
		Postretirement benefits other than pensions			5,740,942		4,884,161
		Other			14,482,286		7,019,948
					126,812,804		116,126,511
			Total Capitalization and Liabilities	$	889,264,758	$	882,493,952

See accompanying Notes to Consolidated Financial Statements.

6

EMPIRE DISTRICT ELECTRIC COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

				Three Months Ended March 31,
				2002			2001
Operating activities:
	Net income			$	(536,544	)	$	2,207,201
	Adjustments to reconcile net income to cash flows:
		Depreciation and amortization			7,344,948			8,111,396
		Pension income			(895,445	)		(940,750	)
		Deferred income taxes, net			(112,615	)		(20,065	)
		Investment tax credit, net			8,926			6,144
		Allowance for equity funds used during construction			(29,116	)		(224,413	)
		Issuance of common stock for stock purchase and reinvest. plans			375,883			304,130
		Cash flows impacted by changes in:
			Accounts receivable and accrued unbilled revenues		2,237,638			4,352,253
			Fuel, materials and supplies		(67,562	)		(706,690	)
			Prepaid expenses and deferred charges		236,562			1,970,332
			Accounts payable and accrued liabilities		(5,524,297	)		(11,903,269	)
			Customer deposits, interest and taxes accrued		5,042,922			7,235,652
			Other liabilities and other deferred credits		8,319,119			15,310,426
Net cash provided by operating activities					16,400,419			25,702,347
Investing activities:
		Construction expenditures			(15,181,545	)		(38,097,399	)
		Allowance for equity funds used during construction			29,116			224,413
Net cash used in investing activities					(15,152,429	)		(37,872,986	)
Financing activities:
		Proceeds from issuance of common stock			834,707			203,703
		Proceeds from issuance of trust preferred securities			—			50,000,000
		Trust preferred securities issuance costs			—			(1,768,906	)
		Net proceeds (repayments) from short-term borrowings			500,000			(29,500,000	)
		Dividends			(6,330,660	)		(5,634,710	)
		Repayment of long-term debt			(27,022	)		—
Net cash provided by (used in) financing activities					(5,022,975	)		13,300,087
Net increase (decrease) in cash and cash equivalents					(3,774,985	)		1,129,448
Cash and cash equivalents at beginning of period					11,440,275			2,490,580
Cash and cash equivalents at end of period				$	7,665,290		$	3,620,028

See accompanying Notes to Consolidated Financial Statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1—Summary of Significant Accounting Policies

        The accompanying interim financial statements do not include all disclosures included in the annual financial statements and therefore should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

        The information furnished reflects all adjustments, consisting only of normal recurring adjustments, which are in our opinion necessary to present fairly the results for the interim periods presented. Certain reclassifications have been made to prior year information to conform with current year presentation.

Note 2—Retained Earnings

				First Quarter 2002
Balance at January 1, 2002				$	41,906,483
	Changes January 1 through March 31:
		Net loss			(536,544	)
		Quarterly cash dividends on common stock:
			—$0.32 per share		(6,330,660	)
Total changes January 1 through March 31					(6,867,204	)
Balance at March 31, 2002				$	35,039,279

FORWARD LOOKING STATEMENTS

        Certain matters discussed in this quarterly report are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address or may address future plans, objectives, expectations and events or conditions concerning various matters such as capital expenditures, earnings, competition, litigation, our construction program, our financing plans, rate and other regulatory matters, liquidity and capital resources and accounting matters. Forward-looking statements may contain words like "anticipate," "believe," "expect," "project," "objective" or similar expressions to identify them as forward-looking statements. Factors that could cause actual results to differ materially from those currently anticipated in such statements include: the amount and timing of rate relief we are currently seeking and related matters; the cost and availability of purchased power and fuel, and the results of our activities (such as hedging) to reduce the volatility of such costs; electric utility restructuring, including ongoing state and federal activities; weather, business and economic conditions; and other factors which may impact customer growth; operation of our generation facilities; legislation; regulation, including environmental regulation (such as NOx regulation); competition; the impact of deregulation on off-system sales and our becoming a participant in a Regional Transmission Organization; changes in accounting requirements; other circumstances affecting anticipated rates, revenues and costs, including our cost of funds; the revision of our construction plans and cost estimates; the performance of projects undertaken by our non-regulated businesses; the success of efforts to invest in and develop new opportunities; and costs and effect of legal and administrative proceedings, settlements, investigations and claims. All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond our control. New factors emerge from time to time and it is not possible for management to predict all such factors or to assess the impact of each such factor on us. Any forward-looking statement speaks only as of the date on which such statement is made, and we do

8

not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

        The following discussion analyzes significant changes in the results of operations for the three-month and twelve-month periods ended March 31, 2002, compared to the same periods ended March 31, 2001.

On-System Transactions

        Of our total electric operating revenues during the first quarter of 2002, approximately 44% were from residential customers, 27% from commercial customers, 15% from industrial customers, 4.5% from wholesale on-system customers, 4.5% from wholesale off-system transactions and 5% from miscellaneous sources such as late payment fees and transmission services. The percentage changes from the prior year in kilowatt-hour ("Kwh") sales and revenue by major customer class were as follows:

		Kwh Sales				Revenue
		First Quarter		Twelve Months Ended		*First Quarter		*Twelve Months Ended
Residential		(5.0	)%	(5.8	)%	4.8	%	(1.0	)%
Commercial		(1.7	)	0.4		5.1		3.9
Industrial		(1.6	)	(1.6	)	4.4		2.8
Wholesale On-System		(5.4	)	(0.4	)	(9.6	)	0.8
	Total On-System	(3.4	)	(2.5	)	4.0		1.3

*

Revenues excluding portion of the Interim Energy Charge that may be refundable to customers. See discussion below.

        Residential and commercial Kwh sales were down during the first quarter of 2002 compared to the first quarter of 2001 due mainly to milder temperatures as compared to unusually cold temperatures during the same period of 2001. Although total heating degree days (the number of degrees that the average temperature for that period was below 65° F) for the first quarter of 2002 were 8.2% more than the 20-year average, they were 2.6% less than the same period last year. Residential and commercial revenues increased during the first quarter of 2002 reflecting the October 2001 Missouri rate increase discussed below.

        Industrial Kwh sales, although not particularly weather sensitive, were also down for the first quarter of 2002 as compared to 2001 due to a general slowdown in economic activity. Industrial revenues increased, also reflecting the October 2001 Missouri rate increase.

        On-system wholesale Kwh sales and revenues decreased during the first quarter of 2002 reflecting the weather conditions described above. Revenues associated with these sales decreased more than the corresponding Kwh sales as a result of the operation of the fuel adjustment clause applicable to these FERC regulated sales.

        For the twelve months ended March 31, 2002, Kwh sales and revenues to our residential customers decreased, reflecting mild temperatures during the third and fourth quarters of 2001 as well as the first quarter of 2002. Commercial Kwh sales during the twelve month period increased slightly while revenues increased more, reflecting the October 2001 Missouri rate increase. Industrial sales decreased, reflecting an economic slowdown, while revenues increased also due to the October 2001 Missouri rate

9

increase. On-system wholesale Kwh sales decreased slightly while revenues for the twelve months ended March 31, 2002 increased reflecting the operation of the fuel adjustment clause applicable to these FERC regulated sales.

        On November 3, 2000, we filed a request with the Missouri Public Service Commission for a general annual increase in rates for our Missouri electric customers in the amount of $41,467,926, or 19.36%. The Missouri Commission issued a final order on September 20, 2001 granting us an annual increase in rates of approximately $17.1 million, or 8.4%, effective October 2, 2001. In addition, the order approved an annual Interim Energy Charge (IEC) of approximately $19.6 million effective October 1, 2001 and expiring two years later. This IEC is $0.0054 per kilowatt hour of customer usage and is collected subject to refund at the end of the two year period to the extent money is collected from customers above the greater of the actual and prudently incurred costs or the base cost of fuel and purchased power set in rates. Any excess money collected will be refunded to customers with interest equal to the current prime rate at that time.

        At March 31, 2002, we had recorded a liability of approximately $8.8 million of the IEC collected in the fourth quarter of 2001 and the first quarter of 2002 as a provision for rate refunds and are not recognizing that revenue in total electric operating revenue. In an effort to manage our fuel costs, we utilize forward physical contracts and financial instruments to manage our gas commodity market risk. As of April 22, 2002, approximately 82% of our anticipated volume of natural gas usage for the remainder of year 2002 is hedged at an average price of $2.93 per Dekatherm (Dth) while approximately 65% of our anticipated volume of natural gas usage for the year 2003 is hedged at an average price of $3.24 per Dth.

        On March 8, 2002, we filed a request with the Missouri Public Service Commission for an annual increase in base rates for our Missouri electric customers in the amount of $19,779,916 and also asked to have the IEC that was granted in the last rate case reconfigured to reflect a decrease of $9,994,888 in the amount billed to customers. The reconfigured IEC would remain subject to refund with interest. This request seeks to recover new operating costs and obligations and reflects the actual and proposed changes in our capital structure since the rate increase in October 2001. Any rate increase approved as a result of the filing would not become effective until early 2003. Also on March 8, 2002, we filed an interim rate case for an annual increase in base rates of $3,562,983, the amount that was erroneously omitted from our previous rate case. This amount is included in the $19,779,916 mentioned above. We have requested that the Missouri Commission approve the interim rates as soon as practical. We cannot predict the amount or timing of any increases which might be granted as a result of these filings.

        On December 28, 2001, we filed a request with the Kansas Corporation Commission for an annual increase in base rates for our Kansas electric customers in the amount of $3,239,744, or 22.81%. This request seeks to recover costs associated with our investment in State Line Unit No. 1, State Line Unit No. 2 and the State Line Combined Cycle Unit as well as significant additions to the transmission and distribution systems and operating cost increases which have occurred since our last rate increase in September 1994. A hearing is scheduled for late June 2002. Any rate increase approved as a result of the filing would not become effective until the third quarter of 2002. We cannot predict the amount or timing of any increase which might be granted as a result of this filing.

Off-System Transactions

        In addition to sales to our own customers, we also sell power to other utilities as available and provide transmission service through our system for transactions between other energy suppliers. During the first quarter of 2002, revenues from such off-system transactions were approximately $4.0 million as compared to approximately $2.0 million in the first quarter of 2001. For the twelve months ended March 31, 2002, revenues from such off-system transactions were approximately $9.5 million as compared to $10.9 million for the twelve months ended March 31, 2001. The increase in

10

revenues during the first quarter of 2002 resulted from the availability of competitively priced power from our recently completed State Line Combined Cycle Unit and a five-month term purchase of firm energy and capacity which, when not required to meet our own customers' needs, we could sell in the wholesale market. The decrease in revenues for the twelve months ended March 31, 2002 resulted primarily from wholesale spot power prices being substantially lower during the summer of 2001 as compared to 2000.

        We are a member of the Southwest Power Pool (SPP), a regional division of the North American Electric Reliability Council, and have been participating with other utility members in an effort to restructure the SPP to make it a regional transmission organization (RTO). After the FERC rejected several attempts by the SPP to seek RTO status, the SPP and MISO agreed in October 2001 to consolidate and form an RTO. In December 2001, the FERC approved the MISO as the first RTO. The agreement to consolidate was completed in February 2002 and MISO filed the necessary documents with the FERC on March 29, 2002 to allow the consolidation to proceed. A closing is anticipated this summer. MISO is in discussions with respect to consolidating its operations with other similar organizations.

        This new organization will operate our system as part of an interconnected transmission system encompassing over 120,000 megawatts of generation capacity located in 20 U.S. states and one Canadian province. MISO will collect revenues attributable to the use of each member's transmission system and each member will be able to transmit power purchased, generated for sale or bought for resale in the wholesale market throughout the entire MISO system. We intend to file with the FERC and the utility commissions in the four states in which we operate to transfer control over the operation of our transmission facilities to MISO. Reference is made to our Annual Report on Form 10-K for the year ended December 31, 2001 under Item 1, "Business—Electric Generating Facilities and Capacity" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Competition" for further information.

Operating Revenue Deductions

        During the first quarter of 2002, total operating expenses decreased approximately $0.1 million (0.3%) compared with the same period last year. Merger related expenses (which include expenses related to severance benefits) increased approximately $0.3 million (20.5%). Purchased power costs decreased approximately $6.7 million (31.3%) but were offset by a $5.1 million (55.3%) increase in fuel costs during the first quarter of 2002. The significant decrease in purchased power costs was primarily due to decreased demand resulting from milder temperatures in the first quarter of 2002 as well as increased generation due to the availability of the State Line Combined Cycle Unit which became operational in June 2001. It was more economical at times to utilize our own generation than to purchase power. Total fuel costs increased during the first quarter of 2002 because of increased generation and the need to use our higher-cost gas-fired turbines as a replacement for our lower-cost coal units during the period. Iatan began a 10-week planned boiler overhaul outage in January 2002 while generation from the Asbury units has been limited to only 70-80% of budgeted kilowatt hours during the first quarter of 2002 in order to comply with opacity regulations. Other operating expenses increased approximately $1.3 million (14.1%) during the period due mainly to increased transmission expense and administrative and general expense.

        Maintenance and repairs expense increased approximately $2.9 million (94.1%) as compared to the same period last year primarily due to new expenditures for maintenance contracts, which serve to levelize maintenance costs over time, entered into in July 2001 for the newly commissioned State Line Combined Cycle as well as the Energy Center and State Line Unit No. 1. Maintenance costs associated with the Iatan outage also contributed to this increase. Depreciation and amortization expenses decreased approximately $0.8 million (11.6%) during the quarter due to lower depreciation rates put into effect during the fourth quarter of 2001 as a result of the October 2001 Missouri rate increase.

11

The provision for income taxes was approximately $2.3 million (96.8%) more during the first quarter of 2002 as compared to the same period in 2001 when approximately $6.1 million in merger related expenses, not tax deductible when incurred by us, became deductible as a result of the termination of our merger with UtiliCorp. This deduction was taken in January 2001, decreasing income tax expense by approximately $2.3 million. Other taxes increased approximately $0.3 million (9.6%) during the first quarter of 2002 due mainly to increased property taxes.

        During the twelve months ended March 31, 2002, total operating expenses increased approximately $0.8 million (0.5%) compared to the year ago period. Total purchased power costs decreased approximately $17.3 million (23.7%) during the twelve months ended March 31, 2002 as compared to the year ago period but were offset by a $13.3 million (27.6%) increase in fuel costs during the same period. The significant decrease in purchased power costs was primarily due to decreased demand in the third and fourth quarters of 2001 and the first quarter of 2002 resulting from milder temperatures as well as the increased generating capability due to the availability of competitively priced power from the new State Line Combined Cycle Unit. Total fuel costs increased during the twelve months ended March 31, 2002 primarily reflecting the higher cost of natural gas, increased generation from the new Combined Cycle Unit in the third and fourth quarters and less coal generation. Our Asbury Plant was out of service for scheduled and unscheduled repairs and maintenance during 13 weeks late in 2001 and the Iatan plant had a 10-week scheduled outage during the first quarter of 2002. Natural gas costs were 15.5% higher during the twelve months ended March 31, 2002 as compared to the same period in 2001.

        Other operating expenses increased approximately $4.8 million (14.5%) during the twelve months ended March 31, 2002, compared to the same period last year due primarily to decreased income from the pension fund caused by a decline in the value of invested funds, additions to our bad debt reserve during the fourth quarter of 2001 and increased transmission expense. Merger related expenses decreased approximately $0.1 million (4.2%) during the twelve months ended March 31, 2002 as compared to the same period in 2001.

        Maintenance and repairs expenses increased approximately $7.3 million (50.0%) during the twelve months ended March 31, 2002, compared to the year ago period. This increase was primarily due to new expenditures for maintenance contracts, which serve to levelize maintenance costs over time, entered into in July 2001 for the new State Line Combined Cycle Unit, the Energy Center and State Line Unit No. 1, as well as increased transmission and distribution maintenance costs. Depreciation and amortization expense increased approximately $0.5 million (1.7%) due to increased levels of plant and equipment placed in service partially offset by lower depreciation rates put into effect during the fourth quarter of 2001 as a result of the October 2001 Missouri rate increase. Provision for income taxes decreased $4.1 million (51.1%) reflecting lower taxable income during the current period while other taxes increased approximately $0.6 million (4.3%).

Nonoperating Items

        Total allowance for funds used during construction ("AFUDC") decreased substantially during each of the periods presented, reflecting the completion of the State Line Combined Cycle Unit in June 2001.

        Other-net deductions increased $0.7 million for the first quarter of 2002 mainly due to increased nonutility operations. Other-net deductions increased $1.5 million for the twelve-month period ended March 31, 2002 as compared to the same period in 2001 mainly due to nonutility operations and also reflecting a loss in the second and third quarters of 2001 caused by the marking to market of option contracts entered into in connection with our hedging activities that did not qualify for hedge accounting. Interest income decreased for both periods, reflecting the lower balances of cash available for investment.

12

        A one-time write-down of $4.1 million was taken in the third quarter of 2001 for disallowed capital costs related to the construction of the State Line Combined Cycle Unit. The net effect on twelve months ended March 31, 2002 earnings after considering the tax effect on this write-down was $2.5 million.

        Interest charges on long-term debt increased $0.7 million (10.4%) during the first quarter of 2002 and $3.9 million (14.8%) for the twelve months ended March 31, 2002 when compared to the corresponding periods ended last year due to the interest related to our Trust Preferred Securities issued on March 1, 2001. Commercial paper interest decreased $0.7 million (83.7%) during the first quarter of 2002 as compared to the first quarter of 2001 and decreased $0.6 million (28.2%) for the twelve months ended March 31, 2002 as compared to the prior year period. These decreases in commercial paper interest reflect the completion of the State Line Combined Cycle Unit in June 2001 which we financed in part on an interim basis using short-term debt.

Earnings

        For the first quarter of 2002, loss per share of common stock was $(0.03) compared to earnings of $0.13 during the first quarter of 2001. Although revenues increased in the first quarter of 2002 due to the October increase in Missouri rates, earnings per share were down primarily due to comparatively milder temperatures during the first quarter of 2002, significantly lower AFUDC due to the completion of the State Line Combined Cycle Unit and increased maintenance costs. Earnings in the first quarter of 2001 were also positively impacted by the one-time $2.3 million income tax benefit resulting from the $6.1 million in merger costs that became tax deductible upon termination of the merger in the first quarter of 2001. Excluding merger costs and the one-time income tax benefit, earnings per share for the first quarter of 2002 would have been $0.02 compared to $0.04 for the same period in 2001.

        Earnings per share for the twelve months ended March 31, 2002, were $0.42 compared to $1.34 for the twelve months ended a year earlier. The decrease was primarily due to mild temperatures during the third and fourth quarters of 2001 and the first quarter of 2002 as well as the one-time non-cash charge of $2.5 million, net of related income taxes, or $0.14 per share, from the write-down of the State Line construction expenditures. Excluding merger costs and the one-time non-cash charge, earnings per share for the twelve-months ended March 31, 2002 would have been $0.61. Excluding merger costs and the one-time income tax benefit discussed above, earnings per share for the twelve-months ended March 31, 2001 would have been $1.26.

LIQUIDITY AND CAPITAL RESOURCES

        Our construction-related expenditures totaled $14.7 million during the first quarter of 2002, compared to $23.7 million for the same period in 2001. Approximately $5.0 million of these expenditures during 2002 was related to additions to our distribution and transmission systems and approximately $4.0 million was related to the Energy Center aero units discussed below. Approximately $1.8 million was related to major inspections at the State Line Power Plant, and $0.9 million was related to our investment in fiber optics cable and equipment. During the first quarter of 2002, approximately 66.3% of construction expenditures were satisfied internally from operations. The remainder was satisfied from short-term borrowings and from the proceeds of our sale of common stock in an underwritten public offering on December 10, 2001.

        In October 2001, we entered into an agreement with P2 Energy to purchase two Twin Pac aero units to be installed at the Empire Energy Center with generating capacity of 50 megawatts each. An initial payment of $3.4 million was made at that time. The first unit is scheduled to be delivered in October 2002 and to be operational by April 2003. The second unit is scheduled to be delivered in October 2003 and to be operational by April 2004. Contracts with other vendors have been entered into for construction and installation of the units.

13

        We estimate that our construction expenditures will total approximately $72.2 million in 2002, including approximately $18.8 million for additions to our distribution system and approximately $19.2 million for the two Twin Pac aero units. We currently expect that internally generated funds will provide approximately 62% of the funds required for the remainder of our 2002 construction expenditures.

        As in the past, we intend to utilize short-term debt to finance the additional amounts needed for such construction and repay such borrowings with the proceeds of sales of public offerings of long-term debt or common stock (including common stock sold pursuant to our Employee Stock Purchase Plan and our Dividend Reinvestment and Stock Purchase Plan) and from internally-generated funds. We currently plan to sell $50 million of our common stock in an underwritten public offering in May, subject to market and other conditions. We will continue to utilize short-term debt as needed to support normal operations or other temporary requirements.

        On May 7, 2002 we entered into a new 370-Day $100,000,000 unsecured revolving credit facility. This credit facility replaced all of our existing lines of credit. The facility will be used for working capital, general corporate purposes and to back-up our use of commercial paper. This facility requires our total Indebtedness (which does not include our Trust Preferred Securities) to be less than 62.5% of our total capitalization at the end of each fiscal quarter and our EBITDA (defined as net income plus interest, taxes, depreciation, amortization and certain other non-cash charges) to be at least two times our interest charges (which includes distributions on our Trust Preferred Securities) for the trailing four fiscal quarters at the end of each fiscal quarter. Failure to maintain these ratios will result in an event of default under the credit facility and will prohibit us from borrowing funds thereunder.We are currently in compliance with these ratios. This credit facility is also subject to cross-default with our other indebtedness (in excess of $50,000,000 in the aggregate).

        In addition, restrictions in our mortgage bond indenture could also affect our liquidity. The Mortgage contains a requirement that for new first mortgage bonds to be issued, our net earnings (as defined in the Mortgage) for any twelve consecutive months within the fifteen months preceding issuance must be two times the annual interest requirements (as defined in the Mortgage) on all first mortgage bonds then outstanding and on the prospective issue of new first mortgage bonds. The Mortgage provides an exception from this earnings requirement in certain instances, relating to the issuance of new first mortgage bonds against first mortgage bonds which have been, or are to be, retired. Our earnings for the twelve months ended March 31, 2002 do not permit us to issue new first mortgage bonds based on this test. However, we have not financed with bonds since 1998 and have used unsecured long-term debt rather than first mortgage bonds.

        On March 1, 2001, we sold two million 8¹/2% Trust Preferred Securities in a public underwritten offering. This issuance generated proceeds of $50.0 million and issuance costs of $1.8 million. The net proceeds of this offering were added to our general funds and were used to repay short-term indebtedness.

        On December 10, 2001, we sold to the public in an underwritten offering 2,012,500 newly issued shares of our common stock for approximately $41 million. Proceeds from the sale of the common stock were added to our general funds and used to repay short-term debt, including debt incurred in connection with our construction program.

        We have an effective shelf registration covering up to $200 million of common stock and debt securities.

        Moody's Investors Service currently rates our first mortgage bonds (other than the pollution control bonds) Baa1 and our senior unsecured debt Baa2. Standard & Poor's has rated our bonds A- (other than the pollution control bonds) and our senior unsecured debt BBB+, with downward

14

implications. In July 2001, Moody's adjusted the credit rating of our Trust Preferred Securities from Baa1 to Baa3 due to technical changes in Moody's methodology for rating this classification of security.

        These ratings indicate the agencies' assessment of our ability to pay interest, distributions, dividends and principal on these securities. The lower the rating the higher the cost of the securities when they are sold. Ratings below investment grade may also impair our ability to issue short-term debt as described above, commercial paper of other securities or make the marketing of such securities more difficult.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        Market risk is the exposure to a change in the value of a physical asset or financial instrument, derivative or non-derivative, caused by fluctuations in market variables such as interest rates or commodity prices. We handle market risk in accordance with established policies, which may include entering into various derivative transactions.

        Interest Rate Risk.    We are exposed to changes in interest rates as a result of significant financing through our issuance of commercial paper. We manage our interest rate exposure by limiting our variable-rate exposure to a certain percentage of total capitalization, as set by policy, and by monitoring the effects of market changes in interest rates. If market interest rates average 1% more in 2002 than in 2001, our interest expense would increase, and income before taxes would decrease by approximately $555,000. This amount has been determined by considering the impact of the hypothetical interest rates on our commercial paper balances as of December 31, 2001. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in such an environment. In the event of a significant change in interest rates, management would likely take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our financial structure.

        Commodity Price Risk.    We are exposed to the impact of market fluctuations in the price and transportation costs of coal, natural gas, and electricity and employ established policies and procedures to manage the risks associated with these market fluctuations.

PART II.    OTHER INFORMATION

Item 4.    Submission of Matters to a Vote of Security Holders.

(a)

The annual meeting of Common Stockholders was held on April 25, 2002.

(b)

The following persons were re-elected Directors of Empire to serve until the 2005 Annual Meeting of Stockholders:

M. F. Chubb (16,766,306 votes for; 322,699 withheld authority).
R. L. Lamb (16,620,893 votes for; 468,112 withheld authority).

The following person was elected Director of Empire to serve until the 2005 Annual Meeting of Stockholders:

W. L. Gipson (16,833,038 votes for; 255,967 withheld authority).

The term of office as Director of the following other Directors continued after the meeting: F. E. Jeffries, J. S. Leon, R. D. Hammons, R. C. Hartley, J. R. Herschend, M. W. McKinney and M. M. Posner.

Item 5.    Other Information.

        At March 31, 2002, our ratio of earnings to fixed charges was 1.30x. See Exhibit (12) hereto.

15

Item 6.    Exhibits and Reports on Form 8-K.

(a)

Exhibits.

(3)	By-laws of Empire as amended April 25, 2002.
(4)	370-Day $100,000,000 Unsecured Credit Agreement, dated as of May 7, 2002, among Empire, UMB Bank, N.A., as arranger and administrative agent, Bank of America, N.A., as syndication agent, and the lenders named therein.
(10)(a)	First Amendment to Stock Unit Plan for Directors.
(10)(b)	First Amendment to Employees' Disability Benefit Plan.
(10)(c)	First Amendment to Employees' Disability Benefit Policy.
(12)	Computation of Ratios of Earnings to Fixed Charges.

(b)

Reports on Form 8-K.

(1)

In a current report dated February 25, 2002, Empire furnished, under Item 9. "Regulation FD Disclosure," Empire's Quarterly Report for the 4th quarter of 2001.

(2)

In a current report dated March 21, 2002, Empire filed, under Item 5. "Other Events," certain corrections to Empire's Annual Report on Form 10-K for the year ended December 31, 2001 and 2001 Annual Report to the Shareholders, as well as Exhibit 12, Ratio of Earnings to Fixed Charges, to our Form 10-K.

16

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE EMPIRE DISTRICT ELECTRIC COMPANY Registrant
	By	/s/  G. A. KNAPP G. A. Knapp Vice President—Finance
	By	/s/  D. L. COIT D. L. Coit Controller, Assistant Treasurer and Assistant Secretary
May 8, 2002

17

QuickLinks

THE EMPIRE DISTRICT ELECTRIC COMPANY INDEX
PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

EMPIRE DISTRICT ELECTRIC COMPANY CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED)
EMPIRE DISTRICT ELECTRIC COMPANY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY (UNAUDITED)
EMPIRE DISTRICT ELECTRIC COMPANY CONSOLIDATED BALANCE SHEET (UNAUDITED)
EMPIRE DISTRICT ELECTRIC COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.

SIGNATURES

EX-3

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT (3)

BY-LAWS

OF

THE EMPIRE DISTRICT ELECTRIC COMPANY

(As Amended April 25, 2002)

Principal Office in Joplin, Missouri

INDEX

		Page
ARTICLE I	LOCATION OF OFFICES	1
ARTICLE II	MEETINGS OF STOCKHOLDERS	1
ARTICLE III	DIRECTORS	2
ARTICLE IV	OFFICERS	3
ARTICLE V	INDEMNIFICATION	6
ARTICLE VI	CAPITAL STOCK	9
ARTICLE VII	MISCELLANEOUS	10
ARTICLE VIII	EMERGENCIES—PROVISIONS GOVERNING	11

i

THE EMPIRE DISTRICT ELECTRIC COMPANY

BY-LAWS

ARTICLE I

LOCATION OF OFFICES

        SECTION 1—REGISTERED OFFICE.    The registered office in Kansas of The Empire District Electric Company (the "Company") shall be in Topeka.

        SECTION 2—PRINCIPAL AND OTHER OFFICES.    The principal office or place of business of the Company shall be in Joplin, Missouri. The Company may also have an office or offices in any other place or places, either within or without the State of Kansas.

ARTICLE II

MEETINGS OF STOCKHOLDERS

        SECTION 1—ANNUAL MEETINGS.    The annual meeting of stockholders for the election of directors and the transaction of such other business as may come before the meeting shall be held at such place, either within or without the State of Kansas, as may be designated by resolution of the Board of Directors, on the third Thursday in April of each year or, if that be a legal holiday, on the next succeeding day not a legal holiday, at 9:30 A.M. (Joplin Time), or at such other time and on such other day as may be fixed by resolution of the Board of Directors.

        SECTION 2—SPECIAL MEETINGS.    Special meetings of the stockholders, which may be held either within or without the State of Kansas, may be called at any time by the Board of Directors or by the President or a Vice President.

        SECTION 3—LIST OF STOCKHOLDERS.    The Secretary or any other officer who shall have charge of the stock ledger of the Company shall prepare and make, at least ten (10) days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held; and such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        SECTION 4—VOTING.    Unless it shall be otherwise provided in the Articles of Incorporation of the Company, each stockholder shall be entitled at every meeting of the stockholders to one vote in person or by proxy for each share of the capital stock of the Company held by such stockholder; but no proxy shall be voted after three (3) years from its date, unless said proxy provides for a longer period. Except where the transfer books of the Company shall have been closed or a date shall have been fixed as a record date for the determination of the stockholders of the Company entitled to vote, no share of stock shall be voted at any election for directors which shall have been transferred on the books of the Company within twenty (20) days next preceding such election of directors.

        SECTION 5—NOTICE.    Notice stating the place, time and purposes of all meetings of stockholders shall be mailed by the Secretary of the Company to each stockholder of record entitled to notice at his or her last known post office address not less than ten (10) nor more than fifty (50) days prior thereto.

        SECTION 6—QUORUM.    Subject to the provisions of the General Corporation Code of the State of Kansas and the Articles of Incorporation of the Company, the holders of a majority of the

1

shares of the capital stock of the Company having voting power shall be present in person or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business; but the holders of a smaller number of shares may adjourn from time to time without further notice other than by announcement at the meeting until a quorum shall be obtained.

        SECTION 7—CONTROL SHARE ACQUISITIONS.    Kansas Statutes Annotated 17-1286 through 17-1298 shall not apply to control share acquisitions (as defined therein) of the Company's capital stock.

ARTICLE III

DIRECTORS

        SECTION 1—FUNCTION.    The business of the Company shall be managed by its Board of Directors.

        SECTION 2—QUORUM.    A majority of the total number of directors shall constitute a quorum for the transaction of business, except as may be otherwise provided by these By-laws, in the Articles of Incorporation of the Company or in the General Corporation Code of the State of Kansas; but from time to time a smaller number of directors may adjourn a meeting without any notice other than by announcement at the meeting until a quorum shall be obtained. A record shall be made of each such adjournment.

        SECTION 3—PLACE OF MEETING.    Subject to the provisions of this Article, meetings of the Board of Directors may be held at any place within or without the State of Kansas. Unless otherwise restricted by the Articles of Incorporation or these By-laws, members of the Board of Directors or of any committee thereof may participate in a meeting of the Board of Directors or Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this second sentence of Section 3 shall constitute presence in person at such meeting.

        SECTION 4—EFFECTIVE ACTION.    Except as may otherwise be provided by law, the Articles of Incorporation of the Company or these By-laws, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. In addition, unless otherwise restricted by the Articles of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

        SECTION 5—MEETINGS.    All regular meetings of the Board of Directors shall be held within or without the State of Kansas and at such time, date and place as may from time to time be fixed by resolution of the Board; provided, however, that the Chairman of the Board, or the President or a Vice President may, with the concurrence of a majority of the Board of Directors, change the time, date or place of any regular meeting, provided that oral, telegraphic or written notice is duly served on or sent or mailed to each director not less than two days before any such meeting. Except as otherwise provided for in the immediately preceding sentence, no notice of regular meetings as set by the Board of Directors need be given. Special meetings of the Board of Directors may be held at any time, date and place upon call of the Chairman of the Board of Directors, or the President, or any three of the other directors or a Vice President, by oral, telegraphic or written notice, duly served on or sent or mailed to each director not less than two days before any such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Any

2

meeting may be held without notice if all of the directors are present at the meeting, or if all of the directors sign a waiver thereof in writing.

        SECTION 6—COMMITTEES, GENERAL.    By resolution or resolutions passed by a majority of the whole Board of Directors, the Board may create and designate, various committees, which committees shall

(i)

consist of two or more of the directors of the Company,



(ii)

have and may exercise the powers of the Board of Directors in the management of the business or affairs of the Company to the extent provided in such resolution or resolutions, these By-laws or in the Articles of Incorporation of the Company,



(iii)

have power to authorize the seal of the Company to be affixed to all papers which may require it, and



(iv)

have such name or names as may be stated in the Articles of Incorporation of the Company, or these By-laws, or as may be determined from time to time by resolution adopted by the Board of Directors.

Any such committee shall meet at such stated times and places or on such call or notice, keep such minutes or other records, make such reports, adopt or follow such rules of procedure and have such quorum as may be prescribed by, or pursuant to, resolution or resolutions of the Board of Directors; but unless and until any such resolution or resolutions shall have been adopted, any such committee shall adopt its own rules and regulations for the calling and holding of its meetings, the making of reports and the keeping of records.

        SECTION 7—EXECUTIVE COMMITTEE.    If there shall be an Executive Committee, it shall not have authority to make, alter or amend the By-laws; but unless the Board of Directors shall otherwise prescribe from time to time, the Executive Committee may exercise between meetings of the Board of Directors all other powers of the Board of Directors except

(i)

the power to fill vacancies in the Board of Directors itself,



(ii)

the power to fill vacancies in the membership of the Executive Committee or any other standing committee of the Board of Directors (which vacancies in standing committees shall be filled by the Board of Directors),



(iii)

the power to close the stock transfer books or fix record dates as provided in Section 4 of Article VI of these By-laws,



(iv)

powers which these By-laws provide shall be exercised only by a majority of the whole Board of Directors, and



(v)

powers which by law must be exercised by the Board itself.

        SECTION 8—COMPENSATION.    Directors and members of standing committees thereof shall receive such compensation as the Board may prescribe from time to time.

ARTICLE IV

OFFICERS

        SECTION 1—REQUIRED AND OPTIONAL, ELECTION.    At the first meeting of the Board of Directors of the Company following each annual election of directors, a majority of the whole Board of Directors shall choose a President, one or more Vice Presidents, a Secretary and a Treasurer; and at such meetings or at any other meeting, a majority of the whole Board of Directors may choose a Chairman of the Board, one or more Assistant Secretaries, one or more Assistant Treasurers, any other

3

officers which such majority may deem to be necessary; and shall designate from among the officers so chosen a Principal Financial Officer and a Principal Accounting Officer who may be the same person. At any meeting a majority of the whole Board of Directors may designate any Vice President as the Executive Vice President.

        SECTION 2—QUALIFICATION, COMBINING OFFICES, REQUIRING BOND.    The Chairman of the Board, if any there be, and the President shall be chosen from among the directors and may be the same person. The Secretary and the Treasurer may be the same person. If deemed advisable by the Board of Directors a Vice President may hold the office of Vice President and Treasurer or Vice President and Secretary, but not the offices of Vice President, Secretary and Treasurer. The Board of Directors shall require the Treasurer, and may require other officers, to give such bond indemnifying the Company against fraud or dishonesty as it shall deem advisable.

        SECTION 3—TERM.    The officers of the Company shall hold their offices until their successors are chosen and qualified unless the respective term of office has been terminated by resignation in writing duly filed in the office of the Secretary of the Company; but a majority of the whole Board of Directors at any meeting thereof may remove any officer with or without cause.

        SECTION 4—VACANCIES.    A majority of the whole Board of Directors shall fill any vacancy in the office of the President, the Secretary or the Treasurer and may fill the vacancies occurring in other offices.

        SECTION 5—CHAIRMAN.    Unless the Board of Directors determines otherwise, the Chairman of the Board shall not be considered an officer or employee of the Company. In the event that a Chairman of the Board shall be included among the officers elected, he or she shall be a member ex officio of any committee of the Board other than any audit committee, and may call meetings thereof, and shall preside at all meetings of the Board and, unless the Board shall designate another Director as Chair of any such standing committee, of any standing committee thereof at which he or she shall be present; provided that the Chair of any audit committee shall be selected by the Board or the Executive Committee. In the event that the offices of the Chairman of the Board and the President are separately held, the Chairman of the Board shall preside at any meeting of stockholders and shall act in an advisory capacity to the President or to any other officer who shall be performing the duties of the President in his or her absence or in the event of his or her inability to act, and may act in an advisory capacity to any other officer of the Company; but the Chairman of the Board shall not be required to perform any executive duties. When authorized by the Board of Directors or the Executive Committee, the Chairman of the Board shall have power to sign and execute on behalf of the Company contracts, agreements, deeds, leases or other conveyances, indentures, mortgages, bonds, notes or other evidences of indebtedness, stock or other certificates, powers, assignments, reports, statements and records and other instruments and documents; and may affix or authorize to be affixed thereto the corporate seal of the Company; and he or she shall also have such special powers and perform such special duties as may be prescribed by the Board of Directors or by the Executive Committee.

        SECTION 6—PRESIDENT.    The President of the Company shall be its chief executive officer. If there be no Chairman of the Board or in the Chairman's absence, the President shall preside at any meeting of stockholders and all meetings of the Board of Directors. If the Board has not designated a Chairman of any standing committee of the Board and (i) if the officers of the Company shall not include a Chairman of the Board, the President shall preside at all meetings of any standing committee of the Board of Directors other than any audit committee, and (ii) if the officers of the Company do include a Chairman of the Board, the President shall preside at all such meetings in the absence of such Chairman. Ex officio, the President shall be a member of any standing committee of the Board of Directors other than any audit committee, and may call meetings thereof. Subject to the supervision and direction of the Board of Directors and the Executive Committee, the President shall have general

4

and active management of the business of the Company and shall see to it that all orders and resolutions of the Board of Directors and any standing committees thereof are carried into effect. The President shall have supervision and direction of the other officers of the Company and shall see that their duties are properly performed. The President may execute on behalf of the Company contracts, agreements, deeds, leases or other conveyances, indentures, mortgages, bonds, notes or other evidences of indebtedness, stock or other certificates, powers, assignments, reports, statements and records and other instruments and documents; and may affix or authorize to be affixed thereto the corporate seal of the Company. The President shall have the general duties and powers of management and supervision usually vested in the office of the President and shall perform such special duties and shall have such special powers as the Board of Directors or the Executive Committee may assign to him or her from time to time.

        SECTION 7—EXECUTIVE VICE PRESIDENT.    If the Board of Directors shall designate one of the Vice Presidents of the Company as the Executive Vice President, the Vice President so designated shall have the general and active management of the business subject to the supervision and direction of the President, the Executive Committee and the Board of Directors. In the absence of the President or in the event of the President's inability to act, the Executive Vice President shall perform the duties and may exercise any of the powers of the President. The Executive Vice President shall have power coordinate with the like power of the President to execute instruments and documents on behalf of the Company. The Executive Vice President shall have such special powers and perform such special duties as may be prescribed by the President, the Executive Committee or the Board of Directors.

        SECTION 8—VICE PRESIDENT(S).    The Vice President or Vice Presidents shall have the power coordinate with the like power of the President to execute instruments and documents on behalf of the Company, and any instrument or document so signed by a Vice President shall be as valid and binding as if signed by the President. If there be no Executive Vice President, or if the Executive Vice President be absent or disabled, any Vice President may perform any of the duties of the President and exercise any of his or her powers in his or her absence or in the event of his or her inability to act. The Vice President or Vice Presidents shall perform such other duties as the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors may prescribe from time to time.

        SECTION 9—SECRETARY.    The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders; and the Secretary shall record all facts and minutes of all such proceedings in books to be kept for that purpose. The Secretary shall perform like duties for the Executive Committee and any other standing committee of the Board of Directors, when requested so to do. The Secretary shall give or cause to be given notice of all meetings of the stockholders and of special meetings of the Board of Directors and of any change in the time, date or place at which a particular regular meeting is to be held. The Secretary shall notify in writing each director and officer of his or her election and each member of a standing committee of the Board of Directors of his or her appointment thereto. The Secretary shall have the custody of the corporate seal of the Company, and shall affix and attest the same when authorized by a Vice President, the President, the Executive Committee or the Board of Directors or, if the officers of the Company include a Chairman of the Board, when authorized by such Chairman pursuant to authorization of the Executive Committee or the Board of Directors. The Secretary shall be the custodian of all papers brought before the stockholders or the Board of Directors for action or ordered on file, of all written contracts, deeds, leases or other instruments of transfer, insurance policies, records and evidences of title to real estate and other property (except moneys and securities) owned, held or controlled by the Company. The Secretary shall keep the stock ledger of the Company and such lists of the stockholders of the Company as may be required by law. The Secretary shall also prepare and make out, before the payment of any dividend on shares of the capital stock of the Company and at least ten (10) days

5

before any stockholders' meeting, a true and correct list, in alphabetical order, of the names of all persons in whose name or names any stock shall stand on the books of the Company at the time of the close of the transfer books, or at the close of business on a record date fixed by these By-laws or by the Board of Directors for the determination of stockholders to whom dividends are to be paid, or who are entitled to vote at such meeting, and enter opposite each name the number of shares held by each. The Secretary shall certify such list for use at such stockholders' meeting or, in case of dividend payments, for the use of the Treasurer. The Secretary shall perform such other duties as may be assigned to him or her by the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors.

        SECTION 10—TREASURER.    The Treasurer shall have custody of the moneys or funds and the securities of the Company, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the Company with such depositaries as may be designated by the Board of Directors. Except as may be otherwise directed by the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors, the Treasurer shall disburse the funds of the Company when it shall be necessary or in his or her judgment proper so to do, taking proper vouchers for such disbursements; and upon request, the Treasurer shall render to the Executive Vice President if there be one, the President, the Board of Directors or any standing committee thereof an account of his or her transactions as Treasurer and of the financial condition of the Company and the results of its operations. The Treasurer shall have power, whenever authorized by the Board of Directors or the Executive Committee, to borrow money on such terms as shall be deemed proper; and the Treasurer shall keep himself or herself advised with respect to the finances of the Company. The Treasurer shall perform such other duties as the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors may prescribe from time to time.

        SECTION 11—ASSISTANT SECRETARIES.    Any Assistant Secretary shall have such powers and perform such duties as the Secretary, the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors shall give or assign to him or her. In the event of the absence of the Secretary or his or her inability to act, any Assistant Secretary shall have all the powers and may perform any of the duties of the Secretary.

        SECTION 12—ASSISTANT TREASURER.    Any Assistant Treasurer shall have such powers and perform such duties as the Treasurer, the Executive Vice President if there be one, the President, the Executive Committee or the Board of Directors shall give or assign to him or her. In the event of the absence of the Treasurer or his or her inability to act, any Assistant Treasurer shall have all the powers and may perform any of the duties of the Treasurer.

ARTICLE V

INDEMNIFICATION

        SECTION 1—Each person who is or was made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (hereinafter a "proceeding"), by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director, officer, employee or agent of the Company or is or was serving at the request of the Company, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall be indemnified and held harmless by the Company to the fullest extent authorized by the Kansas General Corporation Code, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) actually and

6

reasonably incurred by such person in connection therewith; provided, however, that, except as provided in Section 2 of this Article V with respect to proceedings seeking to enforce rights to indemnification, the Company shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by a two-thirds vote of the Continuing Directors, as that term is defined in Article V, Section 5(f) of the Company's Restated Articles of Incorporation, as amended ("Continuing Directors"), of the Company. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Company the expenses incurred in defending or prosecuting any such proceeding in advance of its final disposition; provided, however, that, if the Kansas General Corporation Code requires, the payment of such expenses incurred by a director or officer in such person's capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Company of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article V or otherwise.

        SECTION 2—If a claim under Section 1 of this Article V is not paid in full by the Company within thirty days after a written claim has been received by the Company, except in the case of a claim for expenses incurred in defending a proceeding in advance of its final disposition in which case the applicable period shall be ten days, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. The claimant shall be presumed to be entitled to indemnification under this Article V upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where any required undertaking has been tendered to the Company), and thereafter the Company shall have the burden of proof to overcome the presumption that the claimant is not so entitled. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Company) that the claimant has not met the standards of conduct which make it permissible under the Kansas General Corporation Code for the Company to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Company. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in the Kansas General Corporation Code, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

        SECTION 3—The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquired under any statute, provision of the Articles of Incorporation or By-law, agreement, vote of stockholders or disinterested directors or otherwise both as to action in such person's official capacity and as to action in another capacity while holding such office.

        SECTION 4—The Company may enter into contracts in such form as may be approved by the Board of Directors or one or more officers designated by the Board with any director, officer, employee or agent of the Company or any subsidiaries providing indemnification to the full extent authorized or permitted by the Kansas General Corporation Code and may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and other similar arrangements) to ensure the payment of such amounts as may become necessary to

7

effect indemnification pursuant to such contracts or otherwise. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of this Article V.

        SECTION 5—The Company's indemnity of any person who was or is serving at its request as a director, officer, employee or agent of another partnership, joint venture, trust or corporation, other enterprise shall be reduced by any amounts such person may collect as indemnification from such other corporation, partnership, joint venture, trust or other enterprise.

        SECTION 6—The Company may, by action of its Board of Directors, authorize one or more officers to grant rights to advancement of expenses to employees or agents of the Company on such terms and conditions as such officer or officers deem appropriate under the circumstances. The Company may, by action of its Board of Directors, grant rights to indemnification and advancement of expenses to employees or agents or groups of employees or agents of the Company with the same scope and effect as the provisions of this Article V with respect to the indemnification and advancement of expenses of directors and officers of the Company; provided, however, that an undertaking shall be made by an employee or agent only if required by the Board of Directors.

        SECTION 7—Anything in this Article V to the contrary notwithstanding, no elimination of this By-law, and no amendment of this By-law adversely affecting the right of any person to indemnification or advancement of expenses hereunder shall be effective until the sixtieth day following notice to such indemnified person of such action, and no elimination of or amendment to this By-law shall deprive any such person of such person's rights hereunder arising out of alleged or actual occurrences, acts or failures to act which had their origin prior to such sixtieth day.

        SECTION 8—In case any provision in this Article V shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

        SECTION 9—For purposes of this Article V, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Company."

        SECTION 10—The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall, unless otherwise provided when authorized, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

        SECTION 11—For purposes of this Article V, references to "the Company" shall include any subsidiary of the Company and shall also include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to

8

indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent Company as a director, officer, employee or agent of another Company, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

ARTICLE VI

CAPITAL STOCK

        SECTION 1—CERTIFICATES.    Certificates for shares of the capital stock of the Company shall be in such form not inconsistent with the provisions of the General Corporation Code of the State of Kansas, as the same is now constituted or as it may be amended, or of the Articles of Incorporation of the Company as shall be approved by the Board of Directors of the Company, and shall contain the recitals required by said Code. Such certificates shall be

(i)

signed by, or in the name of the Company by the President or a Vice President and either the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company, and



(ii)

sealed with the seal of the Company;

provided, however, that where any such certificate is signed by a transfer agent or an assistant transfer agent, or by a transfer clerk acting on behalf of the Company and a registrar, the signature of such President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary and the seal of the Company may be facsimile. In case any officer or officers of the Company who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers of the Company, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Company, such certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures, shall have been used thereon had not ceased to be such officer or officers of the Company. Such certificates shall evidence the fact that the person named therein is the owner of the share or shares therein described and certify the number of shares owned by such person. Such certificates shall be numbered; and the name of the person, individual, firm, corporation or association owning the shares represented by each such certificate, with the number of shares and date of issue, shall be entered in the Company's books. All certificates surrendered to the Company shall be canceled. No new certificates to represent previously issued shares shall be issued until a former certificate or certificates for the same number of shares shall have been surrendered and canceled, except as hereinafter in this Section provided. The Company may issue a new certificate in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed; and the directors of the Company may require, in their discretion, the owner of the lost or destroyed certificate, or the owner's legal representatives, to give to the Company a bond sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss of any such certificate. A new certificate may be issued without requiring any bond when in the judgment of the directors it is proper to do so.

        SECTION 2—TRANSFER, GENERAL.    Except as otherwise provided in the General Corporation Code of Kansas, transfers of the capital stock of the Company and the certificates of stock which represent the stock shall be governed by Article 8 of the Uniform Commercial Code.

        SECTION 3—RECORD HOLDINGS.    The Company shall be entitled to treat the owner or holder of record of any share or shares of stock as the owner or holder in fact thereof and, accordingly,

9

shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof save as expressly provided by the laws of the State of Kansas.

        SECTION 4—CLOSING TRANSFER BOOKS AND RECORD DATES, GENERAL.    The Board of Directors of the Company shall have power to close the stock transfer books of the Company for a period not exceeding sixty (60) nor less than ten (10) days preceding the date of

A.    any meeting of stockholders, or
B.    any payment of any dividends, or
C.    any allotment of rights, or
D.    any effective date of change or conversion or exchange of capital stock;

provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors of the Company may fix in advance a date, not exceeding sixty (60) nor less than ten (10) days preceding the effective date of any of the above-enumerated transactions, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to receive notice of any such transactions, or to participate in any such transactions, notwithstanding any transfer of any stock on the books of the Company after such record date fixed as aforesaid.

        SECTION 5—RECORD DATES, DIVIDENDS AND MEETINGS.    Unless and until the Board of Directors of the Company shall have otherwise provided by resolution, the stock transfer books of the Company shall not be closed for any period for or preceding the payment of dividends or for, preceding or in connection with, any meeting of stockholders.

        SECTION 6—EXCHANGES OF CERTIFICATES.    While the transfer books are closed, no transfer of shares of the capital stock of the Company shall be made; but this shall not prevent the issuance on the application of any stockholder of certificates of smaller denominations in lieu of certificates of larger denominations, or vice versa, provided the amount of shares standing in such stockholder's name shall not thereby be increased or diminished.

        SECTION 7—RULES AND REGULATIONS.    The Board of Directors may at any time adopt such additional and further rules and regulations (not inconsistent with law, the Articles of Incorporation of the Company or these By-laws) relating to the issuance, transfer and safety of stock certificates as it may deem advisable.

        SECTION 8—INSPECTION OF BOOKS AND RECORDS.    Any stockholder, in person or by attorney or other agent, upon written demand under oath stating the purpose thereof, shall have the right during the usual hours for business to inspect for any proper purpose the Company's By-laws, stock register, a list of its stockholders, books of accounts, records of the proceedings of the stockholders and directors, and the Company's other books and records, and to make copies or extract therefrom. In every instance where an attorney or other agent shall be the person who seeks the right of inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on the behalf of the stockholder.

ARTICLE VII

MISCELLANEOUS

        SECTION 1—FISCAL YEAR.    The fiscal year of the Company shall begin on the first day of January in each year.

        SECTION 2—NEGOTIABLE INSTRUMENTS.    Except as may be otherwise from time to time prescribed or determined by, or pursuant to authorization of, the Board of Directors of the Company with respect to the payment of money out of agent's funds of the Company or other similar funds of

10

the Company maintained on an imprest basis and limited in amount, all checks, notes drafts, bills, acceptances, warrants or orders for the payment of money shall be signed and countersigned by such persons as the Board of Directors or the Executive Committee of the Company may designate from time to time for such purpose.

        SECTION 3—SEAL.    The seal of the Company shall be in the form of a circle and shall bear the name of the Company and of the State in which it was incorporated, and the year of its incorporation.

        SECTION 4—WAIVER OF NOTICE.    Any notice required by the By-laws or the Articles of Incorporation of the Company or by any provision of law or otherwise of the time, date, place and purpose of any meeting of stockholders of the Company or of its Board of Directors may be dispensed with if every stockholder entitled to vote at such meeting shall either attend in person or be represented thereat by proxy, or if every director shall attend in person, or if every absent stockholder entitled to vote at such meeting or every absent director shall file in writing with the records of the meeting, either before or after the holding thereof, waiver of such notice.

ARTICLE VIII

EMERGENCIES—PROVISIONS GOVERNING

        SECTION 1—CALL OF SPECIAL BOARD MEETING.    In the event of warlike damage to the area in which the Company operates, any officer of the Company who is able to reach the head office or temporary head office of the Company, or communicate therewith, shall call a special meeting of the Board of Directors (i) if in his or her judgment there has been such loss of life or personal injury, such damage to property or such disruption of transportation or communications that the provisions of this Article should be put into effect, and (ii) if no regular or special meeting of the Board would otherwise take place before a meeting called by him or her could be convened.

        SECTION 2—DECLARATION OF EMERGENCY, QUORUM.    If, within seventy-two (72) hours of the call of such a special meeting of the Board of Directors of the Company, or of the date of a regular meeting thereof, a majority of the whole Board of Directors cannot be present as a result of a national disaster due to enemy action, one-third (¹/3) of the whole Board of Directors shall constitute a quorum for the transaction of any business of such meeting, and may declare an emergency; and for any subsequent meeting of the Board of Directors convened during such an emergency so declared, one-third (¹/3) of the whole Board of Directors likewise shall constitute a quorum for the transaction of any business.

        SECTION 3—DURATION OF EMERGENCY.    If, pursuant to the authorization contained in Section 2 of this Article VIII, the Board of Directors of the Company shall declare the existence of an emergency, such emergency so declared shall be deemed to continue until a meeting of the stockholders (whether special or annual) can be convened; and the Board of Directors shall arrange for the holding of a meeting of the stockholders as soon as, in its judgment, it shall be practicable to do so.

        SECTION 4—FILLING VACANCIES.    During such emergency so declared, vacancies in the Board of Directors of the Company may be filled in accordance with and pursuant to the authorization contained in Section 3 of Article VI of the Articles of Incorporation of the Company.

        SECTION 5—CHIEF EXECUTIVE OFFICER.    If, at the meeting at which the Board of Directors shall have declared the existence of an emergency, the President of the Company shall not have survived the disaster or shall have been disabled or shall be unable to communicate with any of the directors who shall be present at said meeting, the Board shall appoint as chief executive officer the highest ranking officer of the Company who shall have survived, and shall not have been disabled and who shall be able to communicate with a director present at said meeting; and if the President shall not have survived the disaster, the Board shall choose at such meeting the person whom it shall have

11

appointed the chief executive officer as President, and elect him or her to the vacancy in the Board of Directors caused by the death of the former President.

        SECTION 6—TREASURER, SECRETARY.    If, at the meeting at which the Board of Directors shall have declared the existence of an emergency, either the Treasurer or the Secretary of the Company shall not have survived the disaster or shall have been disabled thereby or shall not be able to communicate with the chief executive officer, the Board of Directors at such meeting shall appoint as Secretary or Treasurer, as the case may be, a person other than the chief executive officer who shall have survived the disaster, and shall not have been disabled thereby, and who is able to communicate with the chief executive officer.

        SECTION 7—TERM OF OFFICE.    Any person appointed as an officer pursuant to the provisions of this Article VIII shall hold office for the duration of the emergency, and until his or her successor shall be elected and qualified, unless sooner removed by a majority of the directors present and acting at a meeting of the Board of Directors at which a quorum (as defined in Section 2 of this Article VIII) shall be present.

        SECTION 8—AUTOMATIC TRANSFERS OF PRESIDENT'S DUTIES AND POWERS.    If, after forty-eight (48) hours after the date fixed for the first meeting (whether regular or special) of the Board of Directors which follows a national disaster due to enemy action, less than three (3) members of the Board of Directors are able to be present at the meeting, the duties and powers of the President shall pass automatically (without action by the Board of Directors) to the Chairman of the Board (provided the Chairman shall be an officer), if the President shall not have survived the disaster, or shall have been disabled, or shall not be able to communicate with any person at the place where the meeting was to have been held, or at the head office or temporary head office of the Company. If there be no such Chairman, or such Chairman of the Board also shall not have survived the disaster, or have been disabled, or shall not be able to communicate with any person at the place where the meeting was to have been held, or at the head office or temporary head office of the Company, the duties and powers of the President shall pass automatically (without action by the Board of Directors) to the highest ranking officer or executive of the Company who shall have survived the disaster, shall not have been disabled and shall be able to communicate as aforesaid. If the President shall have survived the disaster, but shall have been disabled or shall be unable to communicate as aforesaid, the President shall recover automatically his or her duties and powers as soon as he or she shall cease to be disabled or unable to so communicate. Likewise, if any other surviving officer or executive who shall be senior to the officer or executive to whom shall have passed automatically the duties and powers of the President, shall cease to be disabled or shall cease to be unable to communicate, the duties and powers of the President shall pass automatically to him or her, so that such duties and powers shall always belong to the highest ranking surviving officer or executive who is not disabled and is able to communicate as aforesaid. No officer or executive other than the President shall retain, by virtue of this Section 8, the duties and powers of the President after three or more directors of the Company shall be present at a meeting of the Board of Directors.

        SECTION 9—RANK OF OFFICERS.    For the purpose of Sections 5 and 8 of this Article VIII, the order of rank of the officers and executives of the Company shall be as determined from time to time by resolution of the Board of Directors.

        SECTION 10—LIABILITY.    No director, officer, or executive acting in accordance with the provisions of this Article VIII shall be liable except for fraud.

        SECTION 11—CONFLICT OF PROVISIONS.    In the event of any conflict between the provisions of the other Articles of these By-laws and this Article VIII, the provisions of this Article VIII shall prevail and govern.

12

QuickLinks

EXHIBIT (3)

INDEX
ARTICLE I LOCATION OF OFFICES
ARTICLE II MEETINGS OF STOCKHOLDERS
ARTICLE III DIRECTORS
ARTICLE IV OFFICERS
ARTICLE V INDEMNIFICATION
ARTICLE VI CAPITAL STOCK
ARTICLE VII MISCELLANEOUS
ARTICLE VIII EMERGENCIES—PROVISIONS GOVERNING

EX-4

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 4

370-DAY

$100,000,000 UNSECURED CREDIT AGREEMENT

DATED AS OF MAY 7, 2002

AMONG

THE EMPIRE DISTRICT ELECTRIC COMPANY
AS BORROWER

AND

UMB BANK, N.A.
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT

AND

BANK OF AMERICA, N.A.
INDIVIDUALLY AND AS SYNDICATION AGENT

AND

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
AS LENDERS

ARRANGED BY
UMB BANK, N.A.

THE EMPIRE DISTRICT ELECTRIC COMPANY

UNSECURED CREDIT AGREEMENT

TABLE OF CONTENTS

SECTION	1	DEFINITIONS	1
	1.1	CERTAIN DEFINITIONS	1
	1.2	INTERPRETATION	5
SECTION	2	THE REVOLVING CREDIT	6
	2.1	REVOLVING CREDIT LOANS	6
	2.2	REVOLVING CREDIT COMMITMENTS	6
	2.3	PROCEDURE FOR BORROWING	6
SECTION	3	INTEREST	7
	3.1	ELECTIONS	7
	3.2	ABR PORTIONS	7
	3.3	LIBOR PORTIONS	7
	3.4	COMPUTATION	8
	3.5	MINIMUM AMOUNTS	8
	3.6	MANNER OF RATE SELECTION	8
	3.7	LAWFUL RATE	8
SECTION	4	FEES, PREPAYMENTS, TERMINATIONS AND APPLICATION OF PAYMENTS	9
	4.1	FACILITY FEE	9
	4.2	UTILIZATION FEE	9
	4.3	UPFRONT FEE	10
	4.4	AGENT'S FEE	10
	4.5	PREPAYMENTS	10
	4.6	REVOLVING CREDIT REDUCTION	10
	4.7	PLACE AND APPLICATION OF PAYMENTS	10
	4.8	CAPITAL ADEQUACY	11
SECTION	5	CONDITIONS PRECEDENT	11
	5.1	INITIAL EXTENSION OF CREDIT	11
	5.2	EACH EXTENSION OF CREDIT	12
SECTION	6	REPRESENTATIONS AND WARRANTIES	12
	6.1	ORGANIZATION AND QUALIFICATION	12

i

	6.2	SUBSIDIARIES	12
	6.3	FINANCIAL REPORTS	12
	6.4	NO MATERIAL ADVERSE CHANGE	12
	6.5	LITIGATION; TAX RETURNS; APPROVALS	12
	6.6	REGULATION U	13
	6.7	NO DEFAULT	13
	6.8	ERISA	13
	6.9	FULL DISCLOSURE	13
	6.10	CORPORATE AUTHORITY AND VALIDITY OF OBLIGATIONS	13
	6.11	NO DEFAULT UNDER OTHER AGREEMENTS	13
	6.12	STATUS UNDER CERTAIN LAWS	14
	6.13	COMPLIANCE WITH LAWS	14
	6.14	OWNERSHIP OF PROPERTY	14
	6.15	SOLVENCY	14
	6.16	PARI PASSU	14
SECTION	7	COVENANTS	14
	7.1	MAINTENANCE OF PROPERTY	14
	7.2	TAXES	14
	7.3	MAINTENANCE OF INSURANCE	14
	7.4	FINANCIAL REPORTS	15
	7.5	INSPECTION	15
	7.6	CONSOLIDATION, MERGER AND SALE OF ASSETS	15
	7.7	LIENS	15
	7.8	NOTICE OF SUIT OR MATERIAL ADVERSE CHANGE IN BUSINESS OR DEFAULT	17
	7.9	ERISA	17
	7.10	USE OF PROCEEDS	17
	7.11	COMPLIANCE WITH LAWS	17
	7.12	FISCAL YEAR	17
	7.13	MAINTENANCE OF EXISTENCE	17
	7.14	MAXIMUM TOTAL INDEBTEDNESS TO TOTAL CAPITALIZATION RATIO	17
	7.15	MINIMUM INTEREST COVERAGE RATIO	17
SECTION	8	EVENTS OF DEFAULT AND REMEDIES	18
	8.1	EVENTS OF DEFAULT	18

ii

	8.2	REMEDIES FOR NON-BANKRUPTCY DEFAULTS	19
	8.3	REMEDIES FOR BANKRUPTCY DEFAULTS	19
SECTION	9	CHANGE IN CIRCUMSTANCES REGARDING LIBOR PORTIONS	19
	9.1	CHANGE OF LAW	19
	9.2	UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN THE ADJUSTED LIBOR RATE	20
	9.3	TAXES AND INCREASED COSTS	20
	9.4	FUNDING INDEMNITY	21
	9.5	DISCRETION OF BANK AS TO MANNER OF FUNDING	21
SECTION	10	THE ADMINISTRATIVE AGENT	21
	10.1	APPOINTMENT AND POWERS	21
	10.2	POWERS	21
	10.3	GENERAL IMMUNITY	22
	10.4	NO RESPONSIBILITY FOR LOANS, RECITALS, ETC.	22
	10.5	RIGHT TO INDEMNITY	22
	10.6	ACTION UPON INSTRUCTIONS OF REQUIRED BANKS	22
	10.7	EMPLOYMENT OF AGENTS AND COUNSEL	22
	10.8	RELIANCE ON DOCUMENTS; COUNSEL	22
	10.9	MAY TREAT PAYEE AS OWNER	22
	10.10	AGENT'S REIMBURSEMENT	22
	10.11	RIGHTS AS A BANK	23
	10.12	BANK CREDIT DECISION	23
	10.13	RESIGNATION OF AGENT	23
	10.14	DURATION OF AGENCY	23
SECTION	11	MISCELLANEOUS	23
	11.1	AMENDMENTS AND WAIVERS	23
	11.2	WAIVER OF RIGHTS	24
	11.3	SEVERAL OBLIGATIONS	24
	11.4	NON-BUSINESS DAY	24
	11.5	DOCUMENTARY TAXES	24
	11.6	REPRESENTATIONS	24
	11.7	NOTICES	24
	11.8	COSTS AND EXPENSES; INDEMNITY	25
	11.9	COUNTERPARTS	25

iii

11.10	SUCCESSORS AND ASSIGNS; GOVERNING LAW; ENTIRE AGREEMENT	25
11.11	NO JOINT VENTURE	25
11.12	SEVERABILITY	25
11.13	TABLE OF CONTENTS AND HEADINGS	26
11.14	SHARING OF PAYMENTS	26
11.15	JURISDICTION; VENUE; WAIVER OF JURY TRIAL	26
11.16	PARTICIPANTS	26
11.17	ASSIGNMENT AGREEMENTS	27
11.18	WITHHOLDING TAXES	28
11.19	CONFIDENTIALITY	29
11.20	REGISTER	30
11.21	SPCS	30
11.22	STATUTORY STATEMENT	31

EXHIBITS
A	REVOLVING CREDIT NOTE
B	PRICING SCHEDULE
C	SUBSIDIARIES OF THE COMPANY
D-1	COMPANY'S KANSAS COUNSEL'S OPINION
D-2	COMPANY'S MISSOURI COUNSEL'S OPINION
E	QUARTERLY COMPLIANCE CERTIFICATE
F	EXISTING LIENS

iv

THE EMPIRE DISTRICT ELECTRIC COMPANY

UNSECURED CREDIT AGREEMENT

        May 7, 2002

UMB Bank, N.A.
Kansas City, Missouri

Bank of America, N.A.
St. Louis, Missouri

The Other Financial Institutions Party Hereto

        The undersigned, The Empire District Electric Company, a Kansas corporation (the "Company") hereby applies to you for your several commitments, subject to all the terms and conditions hereof and on the basis of representations and warranties hereinafter set forth, to make an unsecured revolving credit (the "Revolving Credit") available to the Company, all as more fully set forth herein. Each of you is hereinafter referred to individually as "Bank" and collectively as "Banks." UMB Bank, N.A., in its individual capacity is sometimes referred to herein as "UMB", and in its capacity as Administrative Agent for the Banks is hereinafter in such capacity referred to as the "Agent." All capitalized terms not defined in the text of this Agreement are defined in Section 1 hereof.

SECTION 1. Definitions.

        Section 1.1. Certain Definitions. The terms hereinafter set forth when used herein shall have the following meanings:

        "ABR" means a fluctuating rate of interest equal to the higher of (a) the Prime Rate or (b) the sum of the Federal Funds Effective Rate most recently determined by the Agent, plus one-half percent (¹/2%) per annum.

        "ABR Portion" shall have the meaning specified in Section 3.1 hereof.

        "Adjusted LIBOR Rate" means a rate per annum determined pursuant to the following formula:

        Adjusted LIBOR Rate                        =                                     LIBOR Rate            
                                                                                                  1 - Reserve Percentage

        "Affiliate" shall mean, for any Person, any other Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, "control" means the power, directly or indirectly, to direct or cause the direction of management or policies of a Person (through ownership of voting securities, by contract or otherwise), provided that, in any event for purposes of this definition any Person that owns directly or indirectly securities having ten percent (10%) or more of the ordinary voting power for the election of directors of a corporation or ten percent (10%) or more of the partnership or other ownership interests of any other Person will be deemed to control such corporation or other Person.

        "Agent" shall have the meaning specified in the first paragraph of this Agreement.

        "Agreement" shall mean this Credit Agreement as may be supplemented and amended from time to time.

        "Applicable Margin" shall mean on any date, (a) when used to determine the interest payable on Loans comprising any LIBOR Portion or ABR Portion, the applicable number of basis points set forth in the Pricing Schedule attached hereto as Exhibit B and incorporated herein by

1

reference under the heading for "Applicable Margin for LIBOR Portions" or "Applicable Margin for ABR Portions," as the case may be, and (b) when used to determine the Facility Fee or the Utilization Fee, the applicable number of basis points set forth in such Pricing Schedule under such respective titles.

        "Bank" and "Banks" shall have the meanings specified in the first paragraph of this Agreement.

        "Borrowing" shall have the meaning set forth in Section 2.2 hereof.

        "Business Day" shall mean any day, except Saturday or Sunday, on which banks are open for business in Kansas City, Missouri or Chicago, Illinois, and, with respect to LIBOR Portions, dealing in United States dollar deposits in London, England.

        "Change of Control" shall mean the occurrence after the date of this Agreement of: (i) any Person, or two or more Persons acting in concert, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company (or other securities convertible into such securities) representing greater than thirty-three and one-third percent (33¹/3%) of the combined voting power of all securities of the Company entitled to vote in the election of directors; or (ii) any Person, or two or more Persons acting in concert, acquiring by contract or otherwise, or entering into a contract or arrangement which, upon consummation, will result in its or their acquisition of, or control over, securities of the Company (or other securities convertible into such securities) representing greater than thirty-three and one-third percent (33¹/3%) of the combined voting power of all securities of the Company entitled to vote in the election of directors.

        "Closing Date" shall mean May 7, 2002.

        "Commitment" shall mean a Revolving Credit Commitment of any Bank.

        "Commitment Percentage" shall have the meaning set forth in Section 2.2 hereof.

        "EBITDA" means, with reference to any period, Net Income for such period plus all amounts deducted in arriving at such Net Income amount in respect of (a) Interest Charges for such period, plus (b) foreign, federal, state and local income taxes of the Company, and its Subsidiaries paid or accrued for such period, plus (c) all amounts properly charged by the Company and its Subsidiaries for depreciation and amortization of intangible assets during such period plus, for fiscal year 2001 non-cash charges.

        "Environmental Laws" shall mean all federal, state and local environmental, health and safety statutes and regulations, including without limitation all statutes and regulations establishing quality criteria and standards for air, water, land and toxic or hazardous wastes and substances.

        "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

        "Event of Default" shall mean any event or condition identified as such in Section 8.1 hereof.

        "Exposure" shall mean, as to any Bank, the sum of such Bank's (a) unused Revolving Credit Commitment, if any, and (b) outstanding Revolving Credit Loans, if any.

        "Federal Funds Effective Rate" shall mean for any day, an interest rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day by the Federal Reserve Bank of New York, or if such rate is not so published for such day, the average of the quotations for such day on such transactions received by the Agent from three (3) federal funds brokers of recognized standing selected by it.

2

        "GAAP" shall mean generally accepted accounting principles as in effect on the date hereof applied by the Company on a basis consistent with the preparation of the Audit Report referred to in Section 6.3 hereof.

        "Granting Bank" shall have the meaning set forth in Section 11.21.

        "Indebtedness" shall mean as of any time the same is to be determined, the aggregate of:

        (a)  all indebtedness with respect to borrowed money;

        (b)  all reimbursement and other obligations with respect to letters of credit, banker's acceptances, customer advances and other extensions of credit whether or not representing obligations for borrowed money;

        (c)  the aggregate amount of capitalized lease obligations;

        (d)  all indebtedness secured by any lien or any security interest on any Property, whether or not the same would be classified as a liability on a balance sheet;

        (e)  all indebtedness representing the deferred purchase price of Property, but excluding all trade payables incurred in the ordinary course of business; and

        (f)    all guaranties, endorsements (other than any liability arising out of the endorsement of items for deposit or collection in the ordinary course of business) and other contingent obligations in respect of, or any obligations to purchase or otherwise acquire, any of the foregoing.

        Indebtedness of the Company shall be computed and determined, without duplication, on a consolidated basis for the Company and its Subsidiaries after the elimination of intercompany items in accordance with GAAP.

        "Interest Coverage Ratio" shall mean, as of any time the same is to be determined, the ratio of (a) EBITDA for the most recent four (4) fiscal quarters then ended to (b) Interest Charges for such four (4) fiscal quarters.

        "Interest Charges" shall mean, with reference to any period, the sum of all interest charges (including imputed interest charges with respect to capitalized lease obligations, all amortization of debt discount and expense) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

        "Interest Period" shall mean (a) with respect to any LIBOR Portion, the period used for the computation of interest commencing on the date the relevant LIBOR Portion is made, continued or effected by conversion and concluding on the date one (1) or two (2) months thereafter as selected by the Company in its notice as provided herein; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

                (i) if any Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day, unless in the case of an Interest Period for a LIBOR Portion the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

                (ii) no Interest Period may extend beyond the Revolving Credit Termination Date;

                (iii) the interest rate to be applicable to each LIBOR Portion for each Interest Period shall apply from and including the first day of such Interest Period to but excluding the last day thereof; and

3

                (iv) no Interest Period may be selected if after giving effect thereto the Company will be unable to make a principal payment scheduled to be made during such Interest Period without paying part of a LIBOR Portion on a date other than the last day of the Interest Period applicable thereto.

For purposes of determining an Interest Period, a month means a period starting on one day in a calendar month and ending on a numerically corresponding day in the next calendar month; provided, however, if an Interest Period begins on the last day of a month or if there is no numerically corresponding day in the month in which an Interest Period is to end, then such Interest Period shall end on the last Business Day of such month.

        "LIBOR Index Rate" shall mean, for any Interest Period applicable to a LIBOR Portion, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a period comparable to such Interest Period, which appears on Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day two (2) Business Days before the commencement of such Interest Period.

        "LIBOR Portion" shall have the meaning specified in Section 3.1 hereof.

        "LIBOR Rate" shall mean for each Interest Period applicable to a LIBOR Portion, (a) the LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the nearest ¹/100 of 1%) at which deposits in U.S. dollars in immediately available funds are offered to the Agent at 11:00 a.m. (London, England time) two (2) Business Days before the beginning of such Interest Period by three (3) or more major banks in the London interbank market selected by the Agent for a period equal to such Interest Period and in an amount equal or comparable to the principal amount of the LIBOR Portion scheduled to be made by the Agent during such Interest Period.

        "Loan" shall mean a Revolving Credit Loan and "Loans" shall mean any two or more of the foregoing.

        "Loan Documents" shall mean this Agreement and any and all exhibits hereto and the Note.

        "Material Adverse Effect" shall have the meaning specified in Section 6.1 hereof.

        "Mortgage" shall have the meaning specified in Section 7.7(I) hereof.

        "Net Income" shall mean, with reference to any period, the net income (or net loss) of the Company and its Subsidiaries for such period as computed on a consolidated basis in accordance with GAAP.

        "Note" shall mean a Revolving Credit Note and "Notes" shall mean any two or more of the foregoing.

        "PBGC" shall mean the Pension Benefit Guaranty Corporation.

        "Person" shall mean and include any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, entity, party or government (whether federal, state, county, city, municipal, or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

        "Plan" shall mean any employee benefit plan covering any officers or employees of the Company or any Subsidiary, any benefits of which are, or are required to be, guaranteed by the PBGC.

        "Prime Rate" means for any day the rate of interest announced by UMB from time to time as its prime commercial rate in effect on such day, with any change in the Prime Rate resulting from

4

a change in said prime commercial rate to be effective as of the date of the relevant change in said prime commercial rate, such rate not necessarily being the lowest rate charged by UMB to any customer.

        "Property" shall mean all assets and properties of any nature whatsoever, whether real or personal, tangible or intangible, including, without limitation, intellectual property.

        "Quarterly Compliance Certificate" shall have the meaning set forth in Section 7.4(c) hereof.

        "Register" shall have the meaning specified in Section 11.20 hereof.

        "Required Banks" shall mean any Bank or Banks which in the aggregate hold at least sixty-six and two-thirds percent (66²/3%) of the Total Exposure.

        "Reserve Percentage" means the daily arithmetic average maximum rate, expressed as a decimal, at which reserves (including, without limitation, any supplemental, marginal and emergency reserves) are imposed on members banks of the Federal Reserve System during the applicable Interest Period by the Board of Governors of the Federal Reserve System (or any successor) under Regulation D on "eurocurrency liabilities" (as such term is defined in Regulation D), subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto. For purposes of this definition, the LIBOR Portions shall be deemed to be eurocurrency liabilities as defined in Regulation D without benefit or credit for any prorations, exemptions or offsets under Regulation D.

        "Revolving Credit" shall have the meaning specified in the first paragraph of this Agreement.

        "Revolving Credit Commitment" and "Revolving Credit Commitments" shall have the meanings specified in Section 2.2 hereof.

        "Revolving Credit Loan" and "Revolving Credit Loans" shall have the meanings specified in Section 2.1 hereof.

        "Revolving Credit Note" or "Revolving Credit Notes" shall have the meanings specified in Section 2.2 hereof.

        "Revolving Credit Termination Date" shall have the meaning set forth in Section 2.1 hereof.

        "SPC" shall have the meaning set forth in Section 11.21.

        "Subsidiary" shall mean, for any Person, any corporation or other entity of which more than fifty percent (50%) of the outstanding stock or comparable equity interests having ordinary voting power for the election of the Board of Directors of such corporation or similar governing body in the case of a non-corporate entity (irrespective of whether or not, at the time, stock or other equity interests of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned by such Person or by one or more of its Subsidiaries

        "Syndication Agent" means Bank of America, N.A.

        "Total Assets" means all assets of the Company as shown on its most recent quarterly or annual consolidated balance sheet, as determined in accordance with GAAP.

        "Total Exposure" shall mean the aggregate Exposure for all Banks.

        "UMB" shall have the meaning specified in the first paragraph of this Agreement.

        Section 1.2.    Interpretation.    Capitalized terms defined elsewhere in this Agreement shall, unless otherwise specified, have the meanings so ascribed to them in all provisions of this Agreement. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined.

5

All references to time of day herein are references to Kansas City, Missouri time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.

SECTION 2. THE REVOLVING CREDIT.

        Section 2.1.    Revolving Credit Loans.    Subject to all of the terms and conditions hereof, the Banks agree to extend the Revolving Credit to the Company which may be borrowed by the Company in its discretion from time to time, be repaid and borrowed again, during the period from the Closing Date to and including May 12, 2003 (the "Revolving Credit Termination Date"). The Revolving Credit may be utilized by the Company in the form of loans (individually a "Revolving Credit Loan" and collectively the "Revolving Credit Loans"), provided that the aggregate amount of the Revolving Credit Loans outstanding at any one time shall not exceed the Revolving Credit Commitments, as in effect from time to time.

        Section 2.2.    Revolving Credit Commitments.    The respective maximum aggregate principal amounts of the Revolving Credit at any one time outstanding and the percentage of the Revolving Credit available at any time which each Bank agrees to make available to the Company (its "Commitment Percentage") are as follows (collectively, the "Revolving Credit Commitments" and individually, a "Revolving Credit Commitment"):

UMB Bank, N.A.	$	20,000,000	20	%
Bank of America, N.A.	$	20,000,000	20	%
M&I Marshall & Ilsley Bank	$	15,000,000	15	%
LASALLE BANK NATIONAL ASSOCIATION	$	15,000,000	15	%
Wells Fargo Bank, N.A.	$	15,000,000	15	%
Comerica Bank	$	15,000,000	15	%
Total	$	100,000,000	100	%

        The obligations of the Banks hereunder are several and not joint and no Bank shall under any circumstances be obligated to extend credit under the Revolving Credit in excess of its Revolving Credit Commitment or its Commitment Percentage of credit outstanding under the Revolving Credit.

        All Revolving Credit Loans made by the Banks on the same date are hereinafter referred to as a "Borrowing". Each Borrowing shall be in a minimum amount as provided in Section 3.5 hereof and shall be made pro rata by the Banks in accordance with their respective Commitment Percentages. All Revolving Credit Loans made by each Bank under the Revolving Credit shall be evidenced by a Revolving Credit Note of the Company (individually a "Revolving Credit Note" and collectively the "Revolving Credit Notes") payable to the order of such Bank in the amount of its Revolving Credit Commitment, each Revolving Credit Note to be in the form (with appropriate insertions) attached hereto as Exhibit A. Without regard to the face principal amount of each Revolving Credit Note, the actual principal amount at any time outstanding and owing by the Company on account thereof during the period ending on the Revolving Credit Termination Date shall be the sum of all advances then or theretofore made thereon less all principal payments actually received thereon during such period.

        Section 2.3.    Procedure For Borrowing.    The Company shall notify the Agent (which may be written or oral, but which must be given prior to 11:00 a.m. Kansas City time) of the date (which may, subject to the immediately preceding parenthetical and Section 3 hereof, be the date on which such notice is given) upon which it requests that any advance be made to it under the Revolving Credit Commitments, and the Agent shall promptly (but in any event not later than 2:00 p.m. Kansas City time) notify each Bank in writing of its receipt of each such notice. Subject to all of the terms and conditions hereof, each Bank shall make available to the Agent its share of each advance, and the

6

proceeds of each advance, to the extent received by the Agent from the Banks, shall be made available to the Company at the office of the Agent in Kansas City and in funds there current. Each Loan from each Bank shall initially constitute part of an ABR Portion except to the extent the Company has otherwise timely elected a LIBOR Portion, all as provided in Section 3 hereof. Unless the Agent shall have been notified by a Bank prior to the date a Loan is to be made by such Bank hereunder that such Bank does not intend to make its pro rata share of such Loan available to the Agent, the Agent may assume that such Bank has made such share available to the Agent on such date and the Agent may in reliance upon such assumption (but shall not be required to) make available to the Company a corresponding amount. If such corresponding amount is not in fact made available to the Agent by such Bank and the Agent has made such amount available to the Company, the Agent shall be entitled to receive such amount from such Bank forthwith upon its demand (or, if such Bank fails to pay such amount forthwith upon such demand, to recover such amount, together with interest thereon at the rate otherwise applicable thereto under Section 3 hereof, from the Company), together with interest thereon in respect of each day during the period commencing on the date such amount was made available to the Company and ending on but excluding the date the Agent recovers such amount at the Federal Funds Effective Rate for each day as determined by the Agent (or in the case of a day which is not a Business Day, then for the preceding Business Day). Nothing in this Section 2.3 shall be deemed to permit any Bank to breach its obligations to make Loans under this Agreement or to limit the Company's claims against any Bank for such breach.

SECTION 3. INTEREST.

        Section 3.1.    Elections.    Subject to all of the terms and conditions of this Section 3, portions of the principal indebtedness evidenced by the Notes (all of the indebtedness evidenced by the Notes bearing interest at the same rate for the same period of time being hereinafter referred to as a "Portion") may, at the election of the Company, bear interest with reference to the ABR (the "ABR Portions") or with reference to the Adjusted LIBOR Rate ("LIBOR Portions"), and Portions may be converted from time to time from one basis to the other. All of the indebtedness evidenced by the Notes which is not part of a LIBOR Portion shall constitute a single ABR Portion. All of the indebtedness evidenced by the Notes which bears interest with reference to a particular Adjusted LIBOR Rate for a particular Interest Period shall constitute a single LIBOR Portion. The Company promises to pay interest on each Portion at the rates and times specified in this Section 3. Each Bank holding a Note shall have a ratable interest in each Portion evidenced thereby.

        Section 3.2.    ABR Portions.    Each ABR Portion shall bear interest (which the Company promises to pay at the times herein provided), at the rate per annum equal to the ABR as in effect from time to time plus the Applicable Margin, as determined from time to time under the Pricing Schedule set forth in Exhibit B attached hereto and hereby incorporated by reference, provided that upon the occurrence of an Event of Default hereunder such Portion shall, upon written notice from the Agent, bear interest (which the Company promises to pay at the times hereinafter provided), whether before or after judgment, for the period from the date such Event of Default occurred and during the continuation thereof, at the rate per annum determined by adding two percent (2%) to the interest rate which would otherwise be applicable thereto from time to time. Interest on the ABR Portions shall be payable in arrears on the last day of each calendar quarter in each year, upon prepayment of any ABR Portion and at maturity of the applicable Notes and default interest shall be due and payable upon demand.

        Section 3.3.    LIBOR Portions.    Each LIBOR Portion shall bear interest (which the Company promises to pay at the times herein provided) for each Interest Period selected therefor at a rate per annum equal to the Adjusted LIBOR Rate for such Interest Period plus the Applicable Margin, as determined from time to time under the Pricing Schedule set forth in Exhibit B attached hereto, provided that upon the occurrence of an Event of Default hereunder such Portion shall, upon written notice from the Agent, bear interest (which the Company promises to pay at the times hereinafter

7

provided) whether before or after judgment, for the period from the date such Event of Default occurred and during the continuation thereof, through the end of the Interest Period then applicable thereto at the rate per annum determined by adding two percent (2%) to the interest rate otherwise applicable thereto, and effective at the end of such Interest Period such LIBOR Portion shall automatically be converted into and added to the applicable ABR Portion and shall thereafter bear interest at the interest rate applicable to the applicable ABR Portion after default. Interest on each LIBOR Portion shall be due and payable on the last day of each Interest Period applicable thereto and, at maturity of the applicable Notes, and default interest shall be due and payable upon demand. The Company shall notify the Agent on or before 11:00 a.m. (Kansas City time) on the third Business Day preceding the end of an Interest Period applicable to a LIBOR Portion whether such LIBOR Portion (or any portion thereof) is to continue as a LIBOR Portion, in which event the Company shall notify the Agent of the new Interest Period selected therefor, and in the event the Company shall fail to so notify the Agent, such LIBOR Portion shall automatically be converted into and added to the applicable ABR Portion as of and on the last day of such Interest Period. The Agent shall promptly notify each Bank of each notice received from the Company pursuant to the foregoing provisions. Anything contained herein to the contrary notwithstanding, the obligation of the Banks to create, continue or effect by conversion any LIBOR Portion shall be conditioned upon the fact that at such time no Event of Default shall have occurred and be continuing.

        Section 3.4.    Computation.    Interest on the LIBOR Portions and all fees, charges and commissions due hereunder shall be computed on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. All other interest on the Notes shall be computed on the basis of a year of 365/366 days for the actual number of days elapsed unless otherwise specifically provided in this Agreement.

        Section 3.5.    Minimum Amounts.    Each ABR Portion shall be in a minimum amount of $1,000,000 or such greater amount which is an integral multiple of $250,000. Each LIBOR Portion shall be in a minimum amount of $5,000,000 or such greater amount which is an integral multiple of $1,000,000.

        Section 3.6.    Manner of Rate Selection.    The Company shall notify the Agent by 11:00 a.m. (Kansas City time) at least three (3) Business Days prior to the date upon which it requests that any LIBOR Portion be created or continued or that any part of a ABR Portion be converted into a LIBOR Portion (such notice to specify in each instance the amount thereof and the Interest Period selected therefor) and the Agent shall promptly advise each Bank of each such notice. If any request is made to convert a LIBOR Portion into an ABR Portion, such conversion shall only be made so as to become effective as of the last day of the Interest Period applicable thereto. All requests for the creation, continuance or conversion of Portions under this Agreement shall be irrevocable. Such requests may be written or oral and the Agent is hereby authorized to honor telephonic requests for creations, continuances and conversions received by it from any person purporting to be a person authorized to act on behalf of the Company hereunder, the Company hereby indemnifying the Agent and the Banks from any liability or loss ensuing from so acting.

        Section 3.7.    Lawful Rate.    All agreements between the Company, the Agent and each of the Banks, whether now existing or hereafter arising and whether written or oral, are expressly limited so that in no event whatsoever, whether by reason of demand or acceleration of the maturity of any of the indebtedness hereunder or otherwise, shall the amount contracted for, charged, received, reserved, paid or agreed to be paid to the Agent or each Bank for the use, forbearance, or detention of the funds advanced hereunder or otherwise, or for the performance or payment of any covenant or obligation contained in any Loan Document, exceed the highest lawful rate permissible under applicable law (the "Highest Lawful Rate"), it being the intent of the Company, the Agent and each of the Banks in the execution hereof and of the Loan Documents to contract in strict accordance with any applicable usury laws, if any. If, as a result of any circumstances whatsoever, performance by the Company of any

8

provision hereof or of any of such documents, at the time performance of such provision shall be due, shall involve exceeding the limits of applicable usury laws or result in the Agent or any Bank having or being deemed to have contracted for, charged, reserved or received interest (or amounts deemed to be interest) in excess of the maximum, lawful rate or amount of interest allowed by applicable law to be so contracted for, charged, reserved or received by the Agent or such Bank, then the obligation to be performed by the Company shall be reduced to the legal limit of such performance, and if, from any such circumstance, the Agent or such Bank shall ever receive interest or anything of value which might be deemed interest under applicable law which would exceed the Highest Lawful Rate, such amount which would be unlawful interest shall be refunded to the Company or, if permitted by applicable law and such unlawful interest does not exceed the unpaid principal balance of the Notes and the amounts owing on other obligations of the Company to the Agent or any Bank under any Loan Document such unlawful interest may be applied to the reduction of the principal amount owing on the Notes or the amounts owing on other obligations of the Company to the Agent or any Bank under any Loan Document. All interest paid or agreed to be paid to the Agent or any Bank shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full period of the indebtedness hereunder until payment in full of the principal of the indebtedness hereunder (including the period of any renewal or extension thereof) so that the interest on account of the indebtedness hereunder for such full period shall not exceed the highest amount permitted by applicable law. This Section 3.7 shall control all agreements between the Company, the Agent and the Banks.

SECTION 4. FEES, PREPAYMENTS, TERMINATIONS AND APPLICATION OF PAYMENTS.

        Section 4.1.    Facility Fee.    For the period from the Closing Date to and including the Revolving Credit Termination Date, or such earlier date on which the Revolving Credit is terminated in whole pursuant to Section 4.6 or any other provision hereof, the Company shall pay to the Agent for the account of the Banks, a facility fee with respect to the Revolving Credit at the rate per annum as determined from time to time under the Pricing Schedule set forth in Exhibit B attached hereto, multiplied by the aggregate amount of the Revolving Credit Commitments (calculated in each case after giving effect to any reductions thereof as specified in Section 4.6 hereof and as if no Loans are outstanding hereunder). Such fee shall be payable in arrears on the last day of July, October, January and April commencing July 31, 2002, and on the Revolving Credit Termination Date, unless the Revolving Credit is terminated in whole on an earlier date, in which event the fees for the period from the date of the last payment made pursuant to this Section 4.1 through the effective date of such termination in whole shall be paid on the date of such earlier termination in whole.

        Section 4.2.    Utilization Fee.    For the period from the Closing Date to and including the Revolving Credit Termination Date, or such earlier date on which the Revolving Credit is terminated in whole pursuant to Section 4.6 or any other provision hereof, the Company shall pay to the Agent for the account of the Banks a utilization fee with respect to the Revolving Credit at the rate per annum as determined from time to time under the Pricing Schedule set forth in Exhibit B attached hereto, multiplied by the aggregate amount of the Revolving Credit Commitments (calculated after giving effect to any reductions thereof as specified in Section 4.6 hereof and as if no Loans are outstanding hereunder) on any date on which the outstanding Revolving Credit Loans for all the Banks are greater than thirty-three percent (33%) of the total Revolving Credit Commitments. Such fee shall be payable in arrears on the last day of each July, October, January and April commencing on July 31, 2002, and on the Revolving Credit Termination Date, unless the Revolving Credit is terminated in whole on an earlier date, in which event the fees for the period from the date of the last payment made pursuant to this Section 4.2 through the effective date of such termination in whole shall be paid on the date of such earlier termination in whole.

9

        Section 4.3.    Upfront Fee.    The Company shall pay on the date hereof to the Agent for the ratable account of the Banks an upfront fee equal to 0.20% of the Revolving Credit Commitment of each of the Banks as of the date hereof (whether or not then in use or available).

        Section 4.4.    Agent's Fee.    The Company shall pay to and for the sole account of the Agent such fees as the Company and the Agent may agree upon in writing from time to time. Such fees shall be in addition to any fees and charges the Agent may be entitled to receive under the other Loan Documents.

        Section 4.5.    Prepayments.    (a) Optional Prepayments of ABR Portions. The Company shall have the privilege of prepaying without premium or penalty and in whole or in part (but if in part, then in a minimum principal amount of $1,000,000) the ABR Portion of any Loan at any time upon prior telecopy or telephonic notice from the Company to the Agent on or before 11:00 a.m. (Kansas City time) on the Business Day immediately preceding such prepayment.

        (b)  Optional Prepayments of LIBOR Portions. The Company may prepay any LIBOR Portion, upon written or telephonic notice (which telephonic notice shall be promptly confirmed in writing by facsimile communication, telex or telegraph) by no later than 11:00 a.m. (Kansas City time) on the third Business Day immediately preceding the date of such prepayment from the Company to the Agent, such prepayment to be made by the payment of the principal amount to be prepaid and accrued interest thereon and any compensation required by Section 9.4 hereof, if applicable; provided, however, that any such prepayment in part shall be in a principal amount of no less than $5,000,000 or such greater amount which is an integral multiple of $1,000,000.

        (c)  Mandatory Prepayments of Excess Borrowings. If the outstanding principal amount of all Revolving Credit Loans shall ever exceed the aggregate amount of all Revolving Credit Commitments in effect from time to time for any reason, the Company shall immediately prepay Revolving Credit Loans in such amount as shall be necessary to eliminate such excess.

        Section 4.6.    Revolving Credit Reduction.    The Company shall have the right at any time upon ten (10) Business Days' prior notice to the Agent, which shall promptly give notice to the Banks, to reduce the Revolving Credit in whole or in part (but if in part, in a minimum principal amount of $5,000,000 or such greater amount which is an integral multiple of $5,000,000); provided, however, that the Company may not reduce any portion of the Revolving Credit which represents outstanding Revolving Credit Loans. Each such reduction in part shall automatically terminate each Bank's Revolving Credit Commitment by an amount equal to its Commitment Percentage of the amount of the reduction of the Revolving Credit.

        Section 4.7.    Place and Application of Payments.    All payments by the Company hereunder shall be made to the Agent at its office at 1010 Grand Boulevard, Kansas City, Missouri 64106 and in immediately available funds, prior to 2:00 p.m. (Kansas City time) on the date of such payment. Subject to Section 11.18 of this Agreement, all such payments shall be made without setoff or counterclaim and without reduction for, and free from, any and all present and future levies, imposts, duties, fees, charges, deductions withholdings, restrictions or conditions of any nature imposed by any government or any political subdivision or taxing authority thereof. Any payments received after 2:00 p.m. (Kansas City time) shall be deemed received upon the following Business Day. The Agent shall remit to each Bank its proportionate share of each payment of principal, interest and fees, owed to it, received by the Agent by 2:00 p.m. (Kansas City time) on the same day of its receipt and its proportionate share of each such payment received by the Agent after 2:00 p.m. (Kansas City time) on the Business Day following its receipt by the Agent. In the event the Agent does not remit any amount to any Bank when required by the preceding sentence, the Agent shall pay to such Bank interest on such amount until paid at a rate per annum equal to the Federal Funds Effective Rate. Should the Company be late in making any required payment hereunder, the Company hereby authorizes the Agent to automatically debit any of its accounts with UMB for any principal, interest and fees when due under the Notes or

10

this Agreement and to transfer the amount so debited from such account to the Agent for application as herein provided. The Agent shall notify the Company by telephonic notice confirmed in writing of any such debit.

        Section 4.8.    Capital Adequacy.    If, after the Closing Date, any Bank or the Agent shall have determined in good faith that the adoption after such date of any applicable law, rule or regulation regarding capital adequacy, or any change therein (including, without limitation, any revision in the Final Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other applicable capital rules heretofore adopted and issued by any governmental authority), or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such bank's capital, or on the capital of any corporation controlling such Bank, in each case as a consequence of its obligations hereunder, to a level below that which such Bank would have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within thirty (30) days after demand by such Bank (with a copy to the Agent), the Company shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction.

SECTION 5. CONDITIONS PRECEDENT.

        The obligation of the Banks to make any Loan pursuant hereto shall be subject to the following conditions precedent:

        Section 5.1.    Initial Extension of Credit.    Prior to, or substantially concurrently with, the initial Loan hereunder:

        (a)  the Company shall have delivered to the Agent for the benefit of the Banks in sufficient counterparts for distribution to the Banks duly executed originals of the following:

        (i)    the Notes;

        (ii)  good standing certificates for the Company and each Subsidiary issued by its state of organization, issued not more than thirty (30) days before the date of this Agreement;

        (iii)  copies of the Articles or Certificate of Incorporation, and all amendments thereto, of the Company and each Subsidiary, certified by the Secretary of State of its state of incorporation not more than thirty (30) days before the date of this Agreement;

        (iv)  copies of the By-Laws, and all amendments thereto, of the Company and each Subsidiary, certified as true, correct and complete on the Closing Date by the Secretary or Assistant Secretary of the Company or such Subsidiary, as the case may be;

        (v)  copies, certified as true, correct and complete by the Secretary or Assistant Secretary of the Company of resolutions regarding the transactions contemplated by this Agreement, duly adopted by the Board of Directors of the Company and reasonably satisfactory in form and substance to the Agent;

        (vi)  an incumbency and signature certificate for the Company satisfactory in form and substance to the Agent;

        (b)  Prior to the initial Loan hereunder, the Agent shall have received the favorable written opinion of Anderson, Byrd, Richeson, Flaherty & Heinrichs, Kansas counsel to the Company, substantially in the form of Exhibit D-1 attached hereto and the favorable written opinion of

11

Spencer, Scott & Dwyer, P.C., Missouri counsel to the Company, substantially in the form of Exhibit D-2 attached hereto;

        (c)  The Agent, the Syndication Agent and each of the other Banks shall have received all fees due and payable to each of them at closing in connection with the execution and delivery of this Agreement and the transactions contemplated hereby.

        Section 5.2.    Each Extension of Credit.    As of the time of the making of each Loan hereunder (including the initial Loan):

        (a)  no Event of Default shall have occurred and be continuing;

        (b)  with respect to any requested Revolving Credit Loan, after giving effect thereto the aggregate principal amount of all outstanding Revolving Credit Loans shall not exceed the aggregate Revolving Credit Commitments; and

        (c)  the request by the Company for any Loan pursuant hereto shall be and constitute a warranty to the effect set forth in (a) and (b), above.

SECTION 6. REPRESENTATIONS AND WARRANTIES.

        As of the date of this Agreement and upon delivery of each Quarterly Compliance Certificate, the Company represents and warrants to the Agent and the Banks as to itself and, where the following representations and warranties apply to Subsidiaries, as to each of its Subsidiaries, as follows:

        Section 6.1.    Organization and Qualification.    The Company is a corporation duly organized and existing and in good standing under the laws of the State of Kansas, has full and adequate corporate power to carry on its business as now conducted, and is duly licensed or qualified in all jurisdictions wherein the nature of its activities requires such licensing or qualification and in which the failure to be so licensed or qualified would have a material adverse effect upon the business, operations or financial condition of the Company and its Subsidiaries taken as a whole, a "Material Adverse Effect."

        Section 6.2.    Subsidiaries.    Each Subsidiary is duly organized and existing under the laws of the jurisdiction of its organization, has full and adequate corporate power to carry on its business as now conducted and is duly licensed or qualified in all jurisdictions wherein the nature of its business requires such licensing or qualification and the failure to be so licensed or qualified would have a Material Adverse Effect. The only Subsidiaries of the Company are listed on Exhibit C hereto.

        Section 6.3.    Financial Reports.    The Company has heretofore delivered to the Banks a copy of the Audit Report as of December 31, 2001 of the Company and its Subsidiaries (the "Audit Report"). The financial statements contained in such Audit Report have been prepared in accordance with GAAP on a basis consistent, except as otherwise noted therein, with that of the previous fiscal year and fairly present, in all material respects, the financial position of the Company and its Subsidiaries as of the date thereof, and the results of its operations for the period covered thereby. As of December 31, 2001, the Company and its Subsidiaries had no material contingent liabilities other than as indicated on said financial statements.

        Section 6.4.    No Material Adverse Change.    Since December 31, 2001, there has been no material adverse change in the business, operations or financial condition of the Company and its Subsidiaries taken as a whole that has not been disclosed in writing to the Banks prior to the date of this Agreement.

        Section 6.5.    Litigation; Tax Returns; Approvals.    There is no litigation nor governmental proceeding pending, nor to the knowledge of the Company threatened, against the Company or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect. All federal and state income tax returns and all other material tax returns for the Company required to be filed have been filed on a timely basis and all amounts required to be paid as shown by said returns have been

12

paid, except such amounts, if any, as are being contested in good faith and by appropriate proceedings. There are no pending or, to the best of the Company's knowledge, threatened objections to or controversies in respect of the income tax returns of the Company for any fiscal year which could reasonably be expected to have a Material Adverse Effect. Except as have already been obtained, no authorization, consent, license, exemption or filing or registration with any court or governmental department, agency or instrumentality, is necessary for the valid execution, delivery or performance by the Company of the Loan Documents.

        Section 6.6.    Regulation U.    Neither the Company nor any Subsidiary is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any Loan made hereunder will be used to purchase or carry any margin stock or to extend credit to others for such a purpose.

        Section 6.7.    No Default.    As of the date of this Agreement, the Company is materially in compliance with all of the terms and conditions of this Agreement, and no Event of Default exists under this Agreement.

        Section 6.8.    ERISA.    With respect to each of the Plans, the Company and its Subsidiaries are in compliance with ERISA to the extent applicable to them, other than such noncompliance that would not reasonably be expected to result in a Material Adverse Effect and have received no notice to the contrary from the PBGC or any other governmental entity agency.

        Section 6.9.    Full Disclosure.    The written statements and information furnished to the Agent and the Banks in connection with the negotiation of this Agreement and the other Loan Documents and the commitments by the Banks to provide the financing contemplated hereby do not contain any untrue statements of a material fact or omit a material fact necessary to make the material statements contained herein or therein not misleading, the Agent and the Banks acknowledging that as to any projections furnished to the Agent and the Banks, the Company only represents that the same were prepared on the basis of information and estimates the Company believed to be reasonable.

        Section 6.10. Corporate Authority and Validity of Obligations. The Company has full corporate power and authority to enter into this Agreement and the other Loan Documents, to make the Borrowings herein provided for, to issue its Notes in evidence thereof, and to perform all of its obligations hereunder and under the other Loan Documents. The Loan Documents delivered by the Company have been duly authorized, executed and delivered by the Company and constitute valid and binding obligations of the Company enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally and general principles of equity. This Agreement and the other Loan Documents do not, nor does the performance or observance by the Company of any of the matters and things herein or therein provided for, (a) contravene or constitute a default under (i) any provision of law or any judgment, injunction, order or decree binding upon the Company or any provision of the charter, articles of incorporation or by-laws of the Company or (ii) any material covenant, indenture or agreement of or affecting the Company or any of its Properties, except in the case of this clause (ii) for any such contravention or default which could not be reasonably expected to result in a Material Adverse Effect or (b) result in the creation or imposition of any lien, security interest or other encumbrance on any Property of the Company.

        Section 6.11. No Default Under Other Agreements. Neither the Company nor any Subsidiary is in default with respect to any note, indenture, loan agreement, mortgage, lease, deed or other agreement to which it is a party or by which it or its Property is bound, which default might adversely affect the repayment of the Indebtedness, obligations and liabilities under the Loan Documents, or any Bank's or the Agent's rights under the Loan Documents or which could reasonably be expected to have a Material Adverse Effect.

13

        Section 6.12. Status Under Certain Laws. Neither the Company nor any of its Subsidiaries is an "investment company" or a person directly or indirectly controlled by or acting on behalf of an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

        Section 6.13. Compliance with Laws. The Company and its Subsidiaries each are in compliance with the requirements of all federal, state and local laws, rules and regulations applicable to or pertaining to their Properties or business operations, including, without limitation, the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, and Environmental Laws, non-compliance with which could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received notice to the effect that its operations are not in compliance with any of the requirements of applicable federal, state or local Environmental Laws, health and safety statutes and regulations or are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

        Section 6.14. Ownership of Property. The Company and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of their respective businesses except for such defects in title or interests as could not, individually or in the aggregate, have a Material Adverse Effect.

        Section 6.15. Solvency. The Company and each of its Subsidiaries existing as of the date of this Agreement: (a) own, on a consolidated basis, assets, the fair saleable value of which are (i) greater than the total amount of their liabilities (including contingent liabilities) and (ii) greater than the amount that will be required to pay their liabilities when they become due; (b) have, on a consolidated basis, capital that is not unreasonably small in relation to their respective business as presently conducted or after giving effect to any contemplated transaction; and (c) do not intend to incur and do not believe that they will incur debts beyond their ability to pay such debts as they become due.

        Section 6.16. Pari Passu. All Loans of the Company incurred under or pursuant to this Agreement shall rank pari passu with all other senior unsecured Indebtedness of the Company.

SECTION 7. COVENANTS.

        It is understood and agreed that so long as any credit is in use or available under this Agreement or any amount remains unpaid on any Note except to the extent compliance in any case or cases is waived in writing by the Required Banks:

        Section 7.1. Maintenance of Property. The Company will, and will cause each Subsidiary to, keep and maintain all of its Properties necessary or useful in its business in good condition, and make all necessary renewals, replacements, additions and improvements thereto, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

        Section 7.2. Taxes. The Company will, and will cause each Subsidiary to, duly pay and discharge all material taxes, rates, assessments, fees and governmental charges upon or against the Company or any Subsidiary or against its Properties in each case before the same becomes delinquent and before penalties accrue thereon unless and to the extent that the same is being contested in good faith and by appropriate proceedings.

        Section 7.3. Maintenance of Insurance. The Company will, and will cause each Subsidiary to, maintain insurance with insurers recognized as financially sound and reputable by prudent business persons in such forms and amounts and against such risks as is usually carried by companies engaged in similar business and owning similar Properties in the same general areas in which the Company or such Subsidiary operates. The Company shall provide the Agent with copies of all insurance policies maintained by it upon the Agent's request.

14

        Section 7.4. Financial Reports. The Company will, and will cause each Subsidiary to, maintain a system of accounting in accordance with sound accounting practice and will furnish promptly to each of the Banks and their duly authorized representatives such information respecting the business and financial condition of the Company and its Subsidiaries as may be reasonably requested by the Agent or any Bank and, without any request, will furnish to the Agent in sufficient number for distribution to each Bank:

        (a) as soon as available, and in any event within forty-five (45) days after the close of each fiscal quarter other than the fourth fiscal quarter of the Company commencing with the fiscal quarter ending March 31, 2002, a copy of the unaudited consolidated balance sheets, income statements and cash flow statements for the Company and its Subsidiaries for such quarterly period and the fiscal year to date and for the corresponding periods of the preceding fiscal year, all in reasonable detail, prepared by the Company (it being understood that delivery to the Agent of the Company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission shall meet the requirements of this Section 7.4(a)) and certified by the chief financial officer of the Company;

        (b) as soon as available, and in any event within ninety (90) days after the close of each fiscal year of the Company, a copy of the audit report (including an unqualified opinion of the Company's auditors) for such year and accompanying financial statements, including consolidated balance sheets, statements of stockholder equity, statements of income and statements of cash flow for the Company and its Subsidiaries showing in comparative form the figures for the previous fiscal year of the Company and its Subsidiaries, all in reasonable detail, prepared and certified by Pricewaterhouse Coopers LLP or other independent certified public accountants of nationally recognized standing selected by the Company and reasonably satisfactory to the Required Banks (it being understood that delivery to the Agent of the Company's annual report on Form 10-K filed with the Securities and Exchange Commission shall meet the requirements of this Section 7.4(b)); and

        (c) no later than forty-five (45) days after the close of each fiscal quarter, a Compliance Certificate in the form of Exhibit E attached hereto (the "Quarterly Compliance Certificate") prepared and signed by the chief financial officer of the Company.

        Section 7.5. Inspection. Upon reasonable notice and during normal business hours, the Company shall, and shall cause each Subsidiary to, permit each of the Banks, by their representatives and agents, to inspect any of the Properties, corporate books and financial records of the Company and each Subsidiary, to examine and make copies of the books of accounts and other financial records of the Company and each Subsidiary and to discuss the affairs, finances and accounts of the Company and each Subsidiary with, and to be advised as to the same by, its officers and employees at such times and intervals as each Bank may reasonably request. The Company shall reimburse the Agent for any reasonable costs and expenses incurred by it in connection with any such inspections.

        Section 7.6. Consolidation, Merger and Sale of Assets. The Company will not, and will not permit any Subsidiary with assets valued at greater than Fifteen Million Dollars ($15,000,000) to, consolidate with or merge into any Person, or permit any other Person to merge into it or sell or otherwise dispose of all or substantially all of their respective Property, except that any Subsidiary may merge with and into any other Subsidiary. The Company shall give written notice to the Banks of any such merger contemporaneously with its consummation.

        Section 7.7. Liens. The Company will not and will not permit any Subsidiary with assets valued at greater than Fifteen Million Dollars ($15,000,000) to, pledge, mortgage or otherwise encumber or subject to or permit to exist upon or be subjected to any lien, charge or security interest of any kind (including any conditional sale or other title retention agreement and any lease in the nature thereof),

15

on any of its Properties of any kind or character at any time owned by the Company or any Subsidiary (collectively "Liens"), other than:

        (a) Liens, pledges or deposits for workers' compensation, unemployment insurance, old age benefits or social security obligations, taxes, assessments, statutory obligations or other similar charges, good faith deposits made in connection with tenders, contracts or leases to which the Company or a Subsidiary is a party or other deposits required to be made in the ordinary course of business, provided in each case the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate proceedings and adequate reserves have been provided therefor in accordance with GAAP and that the obligation is not for borrowed money, customer advances, trade payables, or obligations to agricultural producers;

        (b) Liens securing an appeal or stay or discharge in the course of any legal proceedings, provided that the aggregate amount of liabilities of the Company or a Subsidiary so secured by a pledge of Property permitted under this subsection (b) including interest and penalties thereon, if any, shall not be in excess of $5,000,000 at any one time outstanding;

        (c) Liens not otherwise permitted hereunder in an amount not in excess of $15,000,000 at any time the same is to be determined;

        (d) Liens (and any replacements thereof without increase) existing on the date hereof and disclosed in Exhibit F hereto;

        (e) Liens securing Indebtedness incurred to finance, or which represents, the purchase price of Property, provided (a) such Liens attach only to the Property financed with such Indebtedness and (b) the amount of such secured Indebtedness does not exceed the purchase price of such Property plus any reasonable related fees and costs;

        (f) the filing of financing statements solely as a precautionary measure in connection with operating leases or other Liens permitted under this Agreement;

        (g) Liens with respect to judgments which do not constitute Events of Default pursuant to this Agreement;

        (h) any interest of a lessor in any Property subject to any lease entered into by the Company in an amount not in excess of $1,500,000 at any time the same is to be determined;

        (i) Liens securing Indebtedness under that certain Indenture of Mortgage and Deed of Trust, dated as of September 1, 1944, as and to be amended and supplemented, among the Company, The Bank of New York and State Street Bank and Trust Company of Missouri, N.A. (the "Mortgage");

        (j) any Lien on Property of any Person existing at the time such Person is merged or consolidated with or into the Company and not created in contemplation of such event;

        (k) any Lien existing on any Property prior to the acquisition thereof by the Company and not created in contemplation of such acquisition;

        (l) Liens incurred in connection with or related to the construction of utility Property;

        (m) the replacement, extension or renewal of any Lien permitted by clauses (e), (j) or (k) above upon or in the same Property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Indebtedness secured thereby;

        (n) Liens securing the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons for labor, materials, supplies or rentals incurred in the ordinary course of the Company's business, but only if the payment thereof is not at the time past due or is

16

being contested in good faith and by appropriate proceedings with adequate reserves maintained in accordance with GAAP; and

        (o) reservations, exceptions, easements, rights of way, and other similar encumbrances affecting real property, provided that they do not individually or in the aggregate detract from the marketability of said properties or materially interfere with their use in the ordinary course of the Company's business as permitted under the Mortgage.

        Section 7.8. Notice of Suit or Material Adverse Change in Business or Default. The Company shall, as soon as possible, and in any event within fifteen (15) days after it learns of the following, give written notice to the Banks of (a) any proceeding(s) being instituted or threatened to be instituted by or against the Company or any Subsidiary in any federal, state or local court or before any commission or other regulatory body (federal, state or local) which could reasonably be expected to have a Material Adverse Effect and (b) the occurrence of any Event of Default.

        Section 7.9. ERISA. The Company will, and will cause each Subsidiary to, promptly pay and discharge all obligations and liabilities arising under ERISA of a character which if unpaid or unperformed is likely to result in the imposition of a Lien against any of its Property, and will promptly notify the Agent of (a) the occurrence of any reportable event (as defined in ERISA) for which the notice requirement has not been waived by the PBGC and which is reasonably likely to result in the termination by the PBGC of any Plan, (b) receipt of any notice from PBGC of its intention to seek termination of any such Plan or appointment of a trustee therefor, and (c) its intention to terminate or withdraw from any Plan, other than a "standard termination" meeting the requirements of Section 4041(b) of ERISA. The Company will not, and will not permit any Subsidiary to, terminate any such Plan or withdraw therefrom unless it shall be in compliance with all of the terms and conditions of this Agreement after giving effect to any liability to PBGC resulting from such termination or withdrawal.

        Section 7.10. Use of Proceeds. The Company shall use the proceeds of the Loans hereunder for working capital, general corporate purposes and to back up the Company's use of commercial paper.

        Section 7.11. Compliance with Laws. The Company will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, including Environmental Laws, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

        Section 7.12. Fiscal Year. The Company shall not change its fiscal year.

        Section 7.13. Maintenance of Existence. The Company shall maintain its corporate existence except for mergers permitted by Section 7.6 hereof.

        Section 7.14. Maximum Total Indebtedness to Total Capitalization Ratio. The Company will maintain as of the last day of each fiscal quarter of the Company a ratio of Total Indebtedness to Total Capitalization of not more than 0.625 to 1. For purposes of this Section 7.15, "Total Indebtedness" shall mean all Indebtedness of the Company and its Subsidiaries on a consolidated basis but shall exclude all accounts payable and expenses incurred in the ordinary course of the Company's and its respective Subsidiaries' businesses and also shall exclude all obligations of the Company and its Subsidiaries related to the issuance in 2001 of Trust Preferred Securities by Empire District Electric Trust I; and "Total Capitalization" shall mean the sum of Total Indebtedness and stockholders' equity, preferred and preference stock and other securities included on the consolidated balance sheet of the Company and its Subsidiaries including the Trust Preferred Securities issued in 2001 by Empire District Electric Trust I.

        Section 7.15. Minimum Interest Coverage Ratio. The Company will maintain an Interest Coverage Ratio of not less than 2.0 to 1 as of the last day of each fiscal quarter of the Company.

17

SECTION 8. EVENTS OF DEFAULT AND REMEDIES.

        Section 8.1. Events of Default. Any one or more of the following shall constitute an Event of Default:

        (a) (i) Default in the payment when due of any principal of any Note whether at the stated maturity thereof or at any other time provided in this Agreement, or (ii) default in the payment when due of any interest on any Note or any fee or other amount payable pursuant to this Agreement which default shall continue unremedied for one (1) Business Day.

        (b) Default in the observance or performance of any covenant set forth in Sections 7.3, 7.5, 7.6, 7.7, 7.8, 7.10, 7.13, 7.14 and 7.15 hereof;

        (c) Default in the observance or performance of the covenants set forth in Section 7.4 and such default shall continue for ten (10) days after the earlier of (i) the date on which such default first became known to a responsible officer of the Company or (ii) written notice thereof to the Company by the Agent;

        (d) Default in the observance or performance of any other covenant, condition, agreement or provision hereof or any of the other Loan Documents and such default shall continue for thirty (30) days after the earlier of (i) the date on which such default first became known to a responsible officer of the Company or (ii) written notice thereof to the Company by the Agent;

        (e) Default shall occur under any evidence of Indebtedness in a principal amount exceeding $5,000,000 issued, assumed or guaranteed by the Company or any Subsidiary, or under any mortgage, agreement or other similar instrument under which the same may be issued or secured and such default shall continue for a period of time sufficient to permit the acceleration of maturity of any Indebtedness evidenced thereby or outstanding or secured thereunder;

        (f) Any representation or warranty made by the Company herein or in any Loan Document or in any statement or certificate furnished by it pursuant hereto or thereto, proves untrue in any material respect as of the date made or deemed made pursuant to the terms hereof;

        (g) Any judgment or judgments, writ or writs, or warrant or warrants of attachment, or any similar process or processes in an aggregate amount in excess of $5,000,000 which is not covered by insurance issued by an insurer that has acknowledged its liability thereon shall be entered or filed against the Company, or any Subsidiary or against any of their respective Property or assets and remain unpaid, unbonded, unstayed and undischarged for a period of sixty (60) days from the date of its entry;

        (h) (i) Any reportable event (as defined in Section 4043 of ERISA and for which the notice requirement has not been waived pursuant to any applicable regulations promulgated thereunder) which results in the PBGC instituting proceedings to terminate any Plan of the Company or (ii) the appointment by the appropriate United States District Court of a trustee to administer or liquidate any such Plan shall have been made pursuant to Title IV of ERISA and continues for thirty (30) days after written notice to such effect shall have been given to the Company by the Agent or (iii) any such Plan shall be terminated other than in a "standard termination" meeting the requirements of Section 4041(b) of ERISA;

        (i) The Company shall (i) have entered involuntarily against it an order for relief under the Bankruptcy Code of 1978, as amended, (ii) admit in writing its inability to pay or not pay, its debts generally as they become due (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, conservator, liquidator or similar official for it or any substantial part of its Property or, (v) file a petition seeking relief or institute any proceeding seeking to have entered against it an order for relief under the Bankruptcy Code of 1978, as amended, to adjudicate it insolvent, or seeking dissolution,

18

winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors;

        (j) (1) A custodian, receiver, trustee, conservator, liquidator or similar official shall be appointed for the Company or any substantial part of its Property, (2) a final order of condemnation shall be entered in a court of appropriate jurisdiction against any substantial amount of the Company's Property, the loss of the use of which would have a Materially Adverse Effect, or (3) a proceeding described in Section 8.1(h)(v) shall be instituted against the Company and such appointment continues undischarged or any such proceeding continues undismissed or unstayed for a period of sixty (60) days;

        (k) A Change of Control shall occur; or

        (l) The revocation or other loss after all available appeals have been taken or administrative proceedings have been completed of any permit or other governmental authority the revocation or loss of which would have a Materially Adverse Effect.

        Section 8.2. Remedies for Non-Bankruptcy Defaults. When any Event of Default, other than an Event of Default described in subsections (i) and (j) of Section 8.1 hereof, has occurred and is continuing, the Agent, if directed by the Required Banks, shall give notice to the Company and take any or all of the following actions: (a) terminate the remaining Commitments hereunder on the date (which may be the date thereof) stated in such notice, (b) declare the principal of and the accrued interest on the Notes to be forthwith due and payable and thereupon the Notes including both principal and interest, shall be and become immediately due and payable without further demand, presentment, protest or notice of any kind, and (c) take any action or exercise any remedy under any of the Loan Documents or exercise any other action, right, power or remedy permitted by law. Any Bank may exercise the right of set off with regard to any deposit accounts or other accounts or investments maintained by the Company with such Bank upon the occurrence and continuation of an Event of Default if notice thereof is given by the Agent to the Company upon the direction of the Required Banks.

        Section 8.3. Remedies for Bankruptcy Defaults. When any Event of Default described in subsections (h) or (i) of Section 8.1 hereof has occurred and is continuing, then the Notes shall immediately become due and payable without presentment, demand, protest or notice of any kind, and the obligation of the Banks to extend further credit pursuant to any of the terms hereof shall immediately terminate.

SECTION 9. CHANGE IN CIRCUMSTANCES REGARDING LIBOR PORTIONS.

        Section 9.1. Change of Law. Notwithstanding any other provisions of this Agreement or any Note to the contrary, if with respect to LIBOR Portions, any Bank shall determine in good faith that any change in applicable law or regulation or in the interpretation thereof at any time after the Closing Date makes it unlawful for such Bank to create or continue to maintain any LIBOR Portion or to give effect to its obligations to create, continue or convert LIBOR Portions as contemplated hereby, such Bank shall promptly give notice thereof to the Company and to the Agent to such effect, and such Bank's obligation to create, continue or convert any such affected LIBOR Portions under this Agreement shall terminate until it is no longer unlawful for such Bank to create or maintain such affected Portion. The Company shall prepay the outstanding principal amount of any such affected LIBOR Portion made to it, together with all interest accrued thereon and all other amounts due and payable to such Bank under Section 9.4 of this Agreement, on the earlier of the last day of the Interest Period applicable thereto and the first day on which it is illegal for such Bank to have such LIBOR Portion outstanding; provided, however, the Company may convert the affected LIBOR Portions into an ABR Portion, subject to all of the terms and conditions of this Agreement.

19

        Section 9.2. Unavailability of Deposits or Inability to Ascertain the Adjusted LIBOR Rate. Notwithstanding any other provision of this Agreement or any Note to the contrary, if prior to the commencement of any Interest Period any Bank shall determine (a) that deposits in the amount of any LIBOR Portion scheduled to be outstanding are not available to them in the relevant market or (b) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate, then such Banks shall give telephonic or telex notice thereof to the Company, the Agent and the other Banks (such notice to be confirmed in writing), and the obligation of the Banks to create, continue or convert any such LIBOR Portion in such amount and for such Interest Period shall terminate until deposits in such amount and for the Interest Period selected by the Company shall again be readily available in the relevant market and adequate and reasonable means exist for ascertaining the Adjusted LIBOR Rate. Upon the giving of such notice, the Company shall elect to either (i) pay or prepay, as the case may be, such affected Portion or (ii) convert the affected LIBOR Portion into an ABR Portion, subject to all terms and conditions of this Agreement.

        Section 9.3. Taxes and Increased Costs. (a) With respect to the LIBOR Portions, if any Bank shall determine in good faith that any change in any applicable law, treaty, regulation or guideline (including, without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or any new law, treaty, regulation or guideline, or any interpretation of any of the foregoing by any governmental authority charged with the administration thereof or any central bank or other fiscal, monetary or other authority having jurisdiction over such Bank or the LIBOR Portions contemplated by this Agreement (whether or not having the force of law) ("Change in Law") shall:

        (i) impose, modify or deem applicable any reserve, special deposit or similar requirements against assets held by, or deposits in or for the account of, or loans by, or any other acquisition of funds or disbursements by, such Bank (other than reserves included in the determination of the Adjusted LIBOR Rate);

        (ii) subject such Bank, any LIBOR Portion or any Note to any tax (including, without limitation, any United States interest equalization tax or similar tax however named applicable to the acquisition or holding of debt obligations and any interest or penalties with respect thereto), duty, charge, stamp tax, fee, deduction or withholding in respect of this Agreement, any LIBOR Portion or any Note except such taxes (x) as may be measured by the overall net income of such Bank and imposed by the jurisdiction, or any political subdivision or taxing authority thereof, in which such Bank's principal executive office is located, and (y) any U.S. Taxes (as defined in Section 11.18(c) hereof) that are deductible or otherwise directly payable by the Company, which shall be governed exclusively by Section 11.18 hereof;

        (iii) change the basis of taxation of payments of principal and interest due from the Company to such Bank hereunder or under any Note (other than by a change in taxation of the overall net income of such Bank); or

        (iv) impose on such Bank any penalty with respect to the foregoing or any other condition regarding this Agreement, any LIBOR Portion or any Note;

and such Bank shall determine that the result of any of the foregoing is to increase the cost (whether by incurring a cost or adding to a cost) to such Bank of making or maintaining any LIBOR Portion hereunder or to reduce the amount of principal or interest received by such Bank, in either case by an amount determined by such Bank to be material, then the Company shall pay to such Bank from time to time as specified by such Bank such additional amounts as such Bank shall reasonably determine are sufficient to compensate and indemnify it for such increased cost or reduced amount. If any Bank makes such a claim for compensation, it shall provide to the Company a certificate setting forth such increased cost or reduced amount as a result of any event mentioned herein specifying such Change in Law, and such certificate shall be conclusive and binding on the Company as to the amount thereof, absent manifest error.

20

        (b) In the event any Bank requires payment under Section 4.8 or 11.18 hereof, delivers a certificate pursuant to subsection (a) above or gives notice under Section 9.1 that it will not fund or maintain LIBOR Portions, the Company may require, at its expense, such Bank to assign (in accordance with Section 11.17 hereof) all its interests, rights and obligations hereunder (including all of its Commitment and the Loans at the time owing to it, and the Notes held by it), to one or more financial institutions specified by the Company (each a "Substitute Bank"), provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other governmental agency or instrumentality, (ii) the Agent shall assist the Company in finding a Substitute Bank that is reasonably acceptable to the Company and the Agent and (iii) the Company shall have paid to the assigning Bank all monies then due to it under the Loan Documents (including pursuant to this Section 9.3 and Sections 4.8 and 11.18) with the Substitute Bank purchasing all accrued but not yet due indebtedness, obligations and liabilities of the Company owed such assigning Bank.

        Section 9.4. Funding Indemnity. (a) In the event any Bank shall incur any loss, cost, expense or premium (including, without limitation, any loss, cost, expense or premium incurred by reason of the liquidation or re-employment of deposits or other funds acquired by such Bank to fund or maintain any LIBOR Portion or the relending or reinvesting of such deposits or amounts paid or prepaid to such Bank) as a result of:

        (i) any conversion, payment or prepayment of a LIBOR Portion on a date other than the last day of the then-applicable Interest Period; or

        (ii) any failure by the Company to borrow, continue or convert any LIBOR Portion on the date specified in the notice given pursuant to Sections 3.3 or 3.6 hereof, then, upon the demand of such Bank, the Company shall pay to such Bank such amount as will reimburse such Bank for such loss, cost or expense.

        (b) If any Bank makes a claim for compensation under this Section 9.4, it shall provide to the Company a certificate setting forth the amount of such loss, cost or expense in a reasonable detail and such certificate shall be conclusive and binding on the Company as to the amount thereof, absent manifest error.

        Section 9.5. Discretion of Bank as to Manner of Funding. Notwithstanding any provision of this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood however, that for the purposes of this Agreement, all determinations hereunder shall be made as if the Banks had actually funded and maintained each LIBOR Portion during each Interest Period for such LIBOR Portion through the purchase of deposits in the relevant interbank market having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Adjusted LIBOR Rate, for such Interest Period.

SECTION 10. THE ADMINISTRATIVE AGENT.

        Section 10.1. Appointment and Powers. UMB is hereby appointed by the Banks as Administrative Agent (the "Agent") under the Loan Documents, and each of the Banks irrevocably authorizes the Agent to act as the agent of such Bank. The Agent agrees to so act as such upon the express conditions contained in this Agreement.

        Section 10.2. Powers. The Agent shall have and may exercise such powers hereunder as are specifically delegated to the Agent by the terms of the Loan Documents, together with such powers as are incidental thereto. The Agent shall have no implied duties to the Banks nor any obligation to the Banks to take any action under the Loan Documents except any action specifically provided by the Loan Documents to be taken by the Agent, and in no event shall the Agent have any fiduciary responsibilities to any Bank.

21

        Section 10.3. General Immunity. Neither the Agent nor any of its directors, officers, agents, representatives, consultants, advisors, counsel or employees shall be liable to the Banks or any Bank for any action taken or omitted to be taken by it or them under the Loan Documents or in connection therewith except for its or their own gross negligence or willful misconduct.

        Section 10.4. No Responsibility for Loans, Recitals, etc. The Agent shall not (a) be responsible to the Banks for any recitals, reports, statements, warranties or representations made by the Company contained in the Loan Documents or furnished pursuant thereto, (b) be responsible for any Loans of the other Banks hereunder, or (c) be bound to ascertain or inquire as to the performance or observance of any of the terms of the Loan Documents. In addition, neither the Agent nor its counsel shall be responsible to the Banks for the enforceability or validity of any of the Loan Documents.

        Section 10.5. Right to Indemnity. The Banks hereby indemnify the Agent for any actions taken in accordance with this Section 10, and the Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be indemnified to its satisfaction by the Banks pro rata in accordance with their respective Exposures against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action, other than any liability which may arise out of the Agent's gross negligence or willful misconduct.

        Section 10.6. Action Upon Instructions of Required Banks. The Agent agrees, upon the written request of the Required Banks, to take any action of the type specified in the Loan Documents as being within the Agent's rights, duties, powers or discretion. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with written instructions signed by the Required Banks (or all of the Banks, if the Loan Documents specifically require the consent of all of the Banks), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Banks and on all holders of the Notes. In the absence of a request by the Required Banks, the Agent shall have authority, in its sole discretion, to take or not to take any action, unless the Loan Documents specifically require the consent of the Required Banks or all of the Banks.

        Section 10.7. Employment of Agents and Counsel. The Agent may execute any of its duties as Agent hereunder by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Banks, except as to money or securities actually received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it in good faith and with reasonable care. The Agent shall be entitled to act upon the advice and opinion of legal counsel concerning all matters pertaining to the duties of the agencies hereby created.

        Section 10.8. Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of legal counsel selected by the Agent.

        Section 10.9. May Treat Payee as Owner. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed pursuant to Section 11.20 hereof with the Agent. Any request, authority or consent of any person, firm or corporation who at the time of making such request or giving such authority or consent is the holder of any such Note shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note issued in exchange therefor.

        Section 10.10. Agent's Reimbursement. Each Bank agrees to reimburse the Agent pro rata in accordance with its Exposure for any reasonable out-of-pocket expenses (including fees and charges for record inspections) not reimbursed by the Company (a) for which the Agent is entitled to reimbursement by the Company under the Loan Documents and (b) for any other reasonable expenses

22

incurred by the Agent on behalf of the Banks, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents.

        Section 10.11. Rights as a Bank. With respect to its commitment, Loans made by it and the Notes issued to it, the Agent shall have the same rights and powers hereunder as any Bank and may exercise the same as though it were not the Agent, and the term "Bank" or "Banks" shall, unless the context otherwise indicates, include the Agent in its individual capacity. Any of the Banks, including the Agent as if it were not the Agent for the Banks, may accept deposits from, lend money to, and generally engage in any kind of banking or trust business with the Company.

        Section 10.12. Bank Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank and based on the financial statements referred to in Section 6.3 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into the Loan Documents. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents.

        Section 10.13. Resignation of Agent. Subject to the appointment of a successor Agent, the Agent may resign as Agent for the Banks under this Agreement and the other Loan Documents at any time upon thirty (30) days' notice in writing to the Banks. Such resignation shall take effect upon appointment of such successor. The Required Banks, with the consent of the Company (unless an Event of Default shall have occurred and be continuing, in which event the Company's consent shall not be required) shall have the right to appoint a successor Agent who shall be entitled to all of the rights of, and vested with the same powers as, the original Agent under the Loan Documents. In the event a successor Agent shall not have been appointed within the sixty (60) day period following the given of notice by the Agent, the Agent may appoint its own successor. Resignation by the Agent shall not affect or impair the rights of the Agent under Sections 10.5 and 10.10 hereof with respect to all matters preceding such resignation. Any successor Agent must be a national banking association or a bank chartered in any State of the United States, in each case having capital and surplus of not less than $500,000,000, or one of the Banks.

        Section 10.14. Duration of Agency. The agency established by Section 10.1 hereof shall continue, and Sections 10.1 through and including this Section 10.14 shall remain in full force and effect, until the Notes and all other amounts due hereunder and thereunder shall have been paid in full and the Banks' commitments to extend credit to or for the benefit of the Company shall have terminated or expired.

SECTION 11. MISCELLANEOUS.

        Section 11.1. Amendments and Waivers. Any term, covenant, agreement or condition of this Agreement and the other Loan Documents may be amended only by a written amendment executed by the Company, the Required Banks and, if the rights or duties of the Agent are affected thereby, the Agent, or compliance therewith only may be waived (either generally or in a particular instance and either retroactively or prospectively), if the Company shall have obtained the consent in writing of the Required Banks and, if the rights or duties of the Agent are affected thereby, the Agent, provided, however, that

        (a) without the consent in writing of the holders of all outstanding Notes, or all Banks if no Notes are outstanding, no such amendment or waiver shall (i) change the amount or postpone the date of payment of any scheduled payment or required prepayment of principal of the Notes at a time that the Company would not be able to obtain a Loan or reduce the rate or extend the time of payment of interest on the Notes, or reduce the amount of principal thereof, or modify any of the provisions of the Notes with respect to the payment or prepayment thereof, (ii) amend the

23

definition of Required Banks, (iii) alter, modify or amend the provisions of this Section 11.1, (iv) change the amount or term of any of the Banks' Revolving Credit Commitments or the fees required under Section 4 hereof or increase the aggregate amount of all of the Banks' Commitments, (v) alter, modify or amend any Bank's right hereunder to consent to any action, make any request or give any notice, or (vi) alter, modify or amend the provisions of Section 5 of this Agreement; and

        (b) without the consent of the Agent, no such amendment or waiver shall affect the rights of the Agent under Section 10 hereof; and

        (c) except to the extent provided in Sections 11.16 and 11.17, no such amendment or waiver shall amend Section 2.2 hereof without the consent of UMB;

Any such amendment or waiver shall apply equally to all Banks and the holders of the Notes and shall be binding upon them, upon each future holder of any Note and upon the Company, whether or not such Note shall have been marked to indicate such amendment or waiver. No such amendment or waiver shall extend to or affect any obligation not expressly amended or waived.

        Section 11.2. Waiver of Rights. No delay or failure on the part of the Agent or any Bank or on the part of the holder or holders of any Note in the exercise of any power or right shall operate as a waiver thereof, nor as an acquiescence in any Event of Default, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof, or the exercise of any other power or right, and the rights and remedies hereunder of the Agent, the Banks and of the holder or holders of any Notes are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have.

        Section 11.3. Several Obligations. The commitments of each of the Banks hereunder shall be the several obligations of each Bank and the failure on the part of any one or more of the Banks to perform hereunder shall not affect the obligation of the other Banks hereunder, provided that nothing herein contained shall relieve any Bank from any liability for its failure to so perform. In the event that any one or more of the Banks shall fail to perform its commitment hereunder, all payments thereafter received by the Agent on the principal of Loans hereunder, shall be distributed by the Agent to the Banks making such additional Loans ratably as among them in accordance with the principal amount of additional Loans made by them until such additional Loans shall have been fully paid and satisfied. All payments on account of interest shall be applied as among all the Banks ratably in accordance with the amount of interest owing to each of the Banks as of the date of the receipt of such interest payment.

        Section 11.4. Non-Business Day. If any payment of principal or interest on any Loan shall fall due on a day which is not a Business Day, interest at the rate such Loan bears for the period prior to maturity shall continue to accrue on such principal from the stated due date thereof to and including the next succeeding Business Day on which the same is payable.

        Section 11.5. Documentary Taxes. The Company agrees to pay any documentary or similar taxes, if any, with respect to the Loan Documents, including interest and penalties, in the event any such taxes are assessed irrespective of when such assessment is made and whether or not any credit is then in use or available hereunder.

        Section 11.6. Representations. All representations and warranties made herein or in certificates given pursuant hereto shall survive the execution and delivery of this Agreement and of the Notes, and shall continue in full force and effect with respect to the date as of which they were made and as reaffirmed by Quarterly Compliance Certificates as long as any credit is in use or available hereunder.

        Section 11.7. Notices. Unless otherwise expressly provided herein, all communications provided for herein shall be in writing or by telecopy and shall be deemed to have been given or made when served personally, when confirmation of receipt is received in the case of notice by telecopy, when actually

24

delivered by a reputable courier service or five (5) Business Days after the date when deposited in the United States mail (registered, if to the Company) addressed, if to the Company to 602 Joplin Street; Joplin, Missouri 64801; Attention: Gregory A. Knapp (Telephone number (417) 626-6595, Telecopy number (417) 625-5153); if to the Agent or UMB at 1010 Grand Boulevard; Kansas City, Missouri 64106; Attention: Charles J. Wolf (Telephone number (816) 860-7130, Telecopy number (816) 860-7143); and, if to any of the Banks, at the address for each Bank set forth under its signature hereon; or at such other address as shall be designated by any party hereto in a written notice to each other party pursuant to this Section 11.7.

        Section 11.8. Costs and Expenses; Indemnity. (a) The Company agrees to pay on demand (i) all reasonable costs and expenses of the Agent incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, the Notes and any other instruments and documents to be delivered hereunder or in connection with the transactions contemplated hereby, including the reasonable fees and expenses of Spencer Fane Britt & Browne LLP, counsel to the Agent; (ii) all reasonable costs and expenses of the Agent (including reasonable attorneys' fees) incurred in connection with any consents or waivers hereunder or amendments hereto; and (iii) all reasonable costs and expenses (including reasonable attorneys' fees), if any, incurred by the Agent, the Banks or any other holders of a Note in connection with the enforcement of this Agreement or the Notes and any other instruments and documents to be delivered hereunder. The Company agrees to indemnify and save harmless the Banks and the Agent from any and all liabilities, losses, costs and expenses incurred by the Banks or the Agent in connection with any action, suit or proceeding brought against the Agent or any Bank by any Person which arises out of the transactions contemplated hereby or by the Notes, or out of any action or inaction by the Agent or any Bank hereunder or thereunder, except for such thereof as is caused by the gross negligence or willful misconduct of the party indemnified.

                (b) The provisions of this Section 11.8 and the protective provisions of Section 9.4 hereof shall survive payment of the Notes and the termination of the Banks' Commitments hereunder.

        Section 11.9. Counterparts. This Agreement may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement shall become effective as and when the Agent, all of the Banks and the Company have executed this Agreement or a counterpart thereof and delivered, except in the case of the Agent, the same to the Agent.

        Section 11.10. Successors and Assigns; Governing Law; Entire Agreement. This Agreement shall be binding upon each of the Company, the Agent and the Banks and their respective successors and assigns, and shall inure to the benefit of the Company, the Agent and each of the Banks and the benefit of their respective successors and assigns, including any subsequent holder of any Note (in the case of the Banks and their respective successors and assigns, to the extent provided in Sections 11.16 and 11.17 hereof). This Agreement and the rights and duties of the parties hereto shall be construed and determined in accordance with the laws of the State of Missouri, except conflict of laws principles. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and any prior agreements, whether written or oral, with respect to the subject matter hereof are superseded hereby. The Company may not assign any of its rights or obligations hereunder without the written consent of the Banks.

        Section 11.11. No Joint Venture. Nothing contained in this Agreement shall be deemed to create a partnership or joint venture among the parties hereto.

        Section 11.12. Severability. In the event that any term or provision hereof is determined to be unenforceable or illegal, it shall be deemed severed herefrom to the extent of the illegality and/or unenforceability and all other provisions hereof shall remain in full force and effect.

25

        Section 11.13. Table of Contents and Headings. The table of contents and section headings in this Agreement are for reference only and shall not affect the construction of any provision hereof.

        Section 11.14. Sharing of Payments. Each Bank agrees with each other Bank that if such Bank shall receive and retain any payments, whether by set-off or application of deposit balances or otherwise ("Set-Off"), on any Loan or other amount outstanding under this Agreement or the other Loan Documents in excess of its ratable share of payments on all Loans and other amounts then outstanding to the Banks, then such Bank shall purchase for cash at face value, but without recourse (except for defects in title), ratably from each of the other Banks such amount of the Loans held by each such other Bank (or interest therein) as shall be necessary to cause such Bank to share such excess payment ratably with all the other Banks; provided, however, that if any such purchase is made by any Bank, and if such excess payment or part thereof is thereafter recovered from such purchasing Bank, the related purchases from the other Banks shall be rescinded ratably and the purchase price restored as to the portion of such excess payment so recovered, but without interest. Each Bank's ratable share of any such Set-Off shall be determined by the proportion that the aggregate principal amount of Loans and other amounts then due and payable to such Bank bears to the total aggregate principal amount of Loans and other amounts then due and payable to all the Banks.

        Section 11.15. Jurisdiction; Venue; Waiver of Jury Trial. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI AND OF ANY MISSOURI COURT SITTING IN KANSAS CITY, MISSOURI, FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY, THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATIVE TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

        Section 11.16. Participants. Each Bank shall have the right at its own cost to grant participations (to be evidenced by one or more agreements or certificates of participation) in the Loans made and Commitments held by such Bank at any time and from time to time to other financial institutions; provided that (a) no such participation shall relieve any Bank of any of its obligations under this Agreement (b) no such participant shall have any direct rights under this Agreement except as provided in this Section 11.16, and the Agent shall not have any obligation or responsibility to such participant. Any agreement pursuant to which such participation is granted shall provide that the granting Bank shall retain the sole right and responsibility to enforce the obligations of the Company under this Agreement and the other Loan Documents including, without limitation, the right to approve any amendment, modification or waiver of any provision of the Loan Documents, except that such agreement may provide that such Bank will not agree to any modification, amendment or waiver of the Loan Documents that would reduce the amount of or postpone any fixed date for payment of any obligation in which such participant has an interest. Any party to which such a participation has been granted shall have the benefits of Section 9.3 and Section 9.4 hereof, up to an amount not exceeding the amount that would otherwise have been payable to the Bank who sold the participation interest to such party. Subject to the provisions of Section 11.19 hereof, the Company authorizes each Bank to disclose to any participant or prospective participant under this Section 11.16 any financial or other information pertaining to the Company. Notwithstanding the foregoing, in no event may a participation be granted to any entity which is not a financial institution without the express prior written consent of the Company

26

        Section 11.17. Assignment Agreements.

                (a) Assignments. Each Bank may, at its own expense, from time to time, assign to other financial institutions part of its rights and obligations under this Agreement (including without limitation the Indebtedness evidenced by the Notes then owned by such assigning Bank, together with an equivalent proportion of its obligation to make loans and advances) pursuant to written agreements executed by such assigning Bank, such assignee lender or lenders, the Company and the Agent, which agreements shall specify in each instance the portion of the Indebtedness evidenced by the Notes which is to be assigned to each such assignee lender and the portion of the Commitments of the assigning Bank to be assumed by it (the "Assignment Agreements"); provided, however, that unless the Agent, the Company, the assignor Bank and the assignee lender, in writing, agree to the contrary, (i) the aggregate amount of the Exposure of the assigning Bank being assigned to such assignee lender pursuant to each such assignment (determined as of the effective date of the relevant Assignment Agreement) shall in no event be less than the lesser of $5,000,000 or the assignor Bank's unused Revolving Credit Commitment; (ii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register pursuant to Section 11.20 hereof, an Assignment Agreement, together with any Notes subject to such assignment, (iii) the Agent and (except for an assignment made during the continuance of any Event of Default) the Company must each consent, which consents shall not be unreasonably withheld, to each such assignment to (provided no such consent is required for any assignment to any Affiliate of the assigning Bank), and (iv) except in connection with any assignment by a Bank to any of its Affiliates, the assignee lender must pay to the Agent a processing and recordation fee of $4,000 and any out-of-pocket attorneys' fees incurred by the Agent in connection with such Assignment Agreement. Upon the execution of each Assignment Agreement by the assigning Bank thereunder, the assignee lender thereunder, the Company and the Agent, satisfaction of all of the conditions set forth above and payment to such assigning Bank by such assignee lender of the purchase price for the portion of the Exposure being acquired by it, (i) such assignee lender shall thereupon become a "Bank" for all purposes of this Agreement with an Exposure in the amounts set forth in such Assignment Agreement and with all the rights, powers and obligations afforded a Bank hereunder, (ii) such assigning Bank shall have no further liability for funding the portion of any of its Commitments assumed by such other Bank, and (iii) the address for notices to such assignee Bank shall be as specified in the Assignment Agreement executed by it. Concurrently with the execution and delivery of such Assignment Agreement executed by it, the Company shall execute and deliver new Notes to the assignee Bank in the amount of its applicable Commitment or Loan and new Notes to the assigning Bank in the amounts of its applicable Commitment or Loan after giving effect to the reduction occasioned by such assignment, such new Notes to constitute "Notes" for all purposes of this Agreement. Notwithstanding the foregoing, in no event may any assignment be made pursuant to this Section 11.17(a) to any entity which is not a financial institution without the express prior written consent of the Company.

                (b) Pledges. Any Bank may at any time pledge or grant a security interest in all or any portion of its rights under this Agreement to secure obligations of such Bank, including any such pledge or grant to a Federal Reserve Bank, and Section 11.17(a) shall not apply to any such pledge or grant of a security interest; provided that no such pledge or grant of a security interest shall release a Bank from any of its obligations hereunder or substitute any such pledgee or secured party for such Bank as a party hereto; provided further, however, the right of any such pledgee or grantee (other than any Federal Reserve Bank) to further transfer all or any portion of the rights pledged or granted to it, whether by means of foreclosure or otherwise, shall be at all times subject to the terms of this Agreement.

27

        Section 11.18. Withholding Taxes.

                (a) U.S. Withholding Tax Exemptions. Each Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the "Code")) shall submit to the Company and the Agent on or before the date the initial Borrowing is made hereunder or, if later, the date such Bank becomes a Bank hereunder, two (2) properly completed and duly executed copies of (i) either Internal Revenue Service Form W-8 ECI (certifying the Bank's status as a beneficial owner and entitlement to complete exemption from withholding on all amounts to be received by such Bank, including fees, pursuant to this Agreement and the Loans as effectively connected with the conduct of a U.S. trade or business) or W-8 BEN (certifying the Bank's status as beneficial owner and entitlement to a complete exemption from withholding on all amounts to be received by such Bank, including fees, pursuant to this Agreement and the Loans, or any successor form as shall be adopted from time to time by the Internal Revenue Service; or (ii) solely if such Bank is claiming exemption from United States withholding tax under Section 871(h) or 881(c)(3)(A) of the Code with respect to payments of "portfolio interest", Internal Revenue Service Form W-8 BEN, and a certificate representing that such Bank is not a bank for purposes of Section 881(c) of the Code, is not a ten percent (10%) shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a controlled foreign corporation related to the Company (within the meaning of Section 864(d)(4) of the Code) (or in the case of any such form, such successor form as shall be adopted from time to time by the Internal Revenue Service. Thereafter and from time to time, each such Bank shall submit to the Company and the Agent such additional properly completed and duly executed copies of one of such Forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may be (i) notified by the Company or Agent to such Bank and (ii) required under then-current United States law or regulations to establish an available exemption from United States withholding taxes on payments in respect of all amounts to be received by such Bank, including fees, pursuant to this Agreement or the Loans. Upon the request of the Company or Agent, each Bank that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Company two accurate and complete signed copies of Internal Revenue Service Form W-9 or any successor thereto, as appropriate.

                (b) Inability of Bank to Submit Forms. If any Bank determines, as a result of any change in applicable law, regulation or treaty, or in any official application or interpretation thereof, that it is unable to submit to the Company any form or certificate that such Bank is obligated to submit pursuant to subsection (a) of this Section 11.18, or that such Bank is required to withdraw or cancel any such form or certificate previously submitted or any such form or certificate otherwise becomes ineffective or inaccurate, such Bank shall promptly notify the Company and Agent of such fact and the Bank shall to that extent not be obligated to provide any such form or certificate and will be entitled to withdraw or cancel any affected form or certificate, as applicable.

                (c) Payment of Additional Amounts. If, as a result of any change in applicable law, regulation or treaty, or in any official application or interpretation thereof after the date of this Agreement or, if later, the date a bank becomes a Bank hereunder, the Company is required by law or regulation to make any deduction, withholding or backup withholding of any taxes, levies, imposts, duties, fees, liabilities or similar charges of the United States of America, any possession or territory of the United States of America (including the Commonwealth of Puerto Rico) or any area subject to the jurisdiction of the United States of America ("U.S. Taxes") from any payments to a Bank in respect of Loans then or thereafter outstanding, or other amounts owing hereunder, the amount payable by the Company will be increased to the amount which, after deduction from such increased amount of all U.S. Taxes required to be withheld or deducted therefrom, will yield the amount required under this Agreement to be payable with respect thereto; provided that the

28

Company shall not be required to pay any additional amount pursuant to this subsection (c) to any Bank that (i) is not, on the date this Agreement is executed by such Bank or, if later, the date such Bank became a Bank hereunder, either (x) entitled to submit Form W-8 BEN relating to such Bank and entitling it to a complete exemption from withholding on all amounts to be received by such Bank, including fees, pursuant to this Agreement and the Loans, Form W-8 BEN relating to all amounts to be received by such Bank, including fees, pursuant to this Agreement and the Loans or Form W-8 BEN relating to such Bank and entitling it to a complete exemption from withholding on all amounts to be received by such Bank, including fees, pursuant to this Agreement and the Loans (or, in any such case, such successor forms as shall be adopted from time to time by the Internal Revenue Service), or (y) a U.S. person (as such term is defined in Section 7701(a)(30) of the Code), or (ii) has failed to submit any form or certificate that it was required to file pursuant to subsection (a) of this Section 11.18 and entitled to file under applicable law, or (iii) is no longer entitled to submit Form W-8 BEN or Form W-8 ECI as a result of any change in circumstances other than a change in applicable law, regulation or treaty or in any official application or the account of any Bank pursuant to this subsection (c), then such Bank will agree to use reasonable efforts to change the jurisdiction of its applicable lending office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Bank, is not otherwise disadvantageous to such Bank. Within thirty (30) days after the Company's payment of any such U.S. Taxes, the Company shall deliver to the Agent, for the account of the relevant Bank(s), originals or certified copies of official tax receipts evidencing such payment thereof or other evidence of payment reasonably satisfactory to the Agent. The obligations of the Company under this subsection (c) shall survive the payment in full of the Loans and the termination of the Commitments. If any Bank or the Agent determines it has received or been granted a refund, credit against, relief or remission for, or repayment of, any taxes paid or payable by it because of any U.S. Taxes paid by the Company and evidenced by such a tax receipt, such Bank or Agent shall, to the extent it can do so without prejudice to the retention of the amount of such refund, credit, relief, remission or repayment, pay to the Company such amount as such Bank or Agent determines is attributable to such deduction or withholding and which will leave such Bank or Agent (after such payment) in no better or worse position than it would have been in if the Company had not been required to make such deduction or withholding. Nothing in this Agreement shall interfere with the right of each Bank and the Agent to arrange its tax affairs in whatever manner it deems fit nor oblige any Bank or the Agent to disclose any information relating to its tax affairs or any computations in connection with such taxes.

        Section 11.19. Confidentiality. The Agent and each Bank will keep confidential any non-public information concerning the Company and its Subsidiaries furnished by the Company (which is designated by the Company as confidential at the time such information is furnished to the Agent or such Bank) or obtained by the Agent or such Bank through its inspections pursuant to Section 7.5 hereof and known by such Bank to be confidential, except that the Agent or any Bank may disclose such information (a) to regulatory authorities having jurisdiction, (b) pursuant to subpoena or other legal process, (c) to the Agent's and such Bank's counsel and auditors in connection with matters concerning this Agreement, (d) to the Agent and such Bank's consultants in connection with negotiations concerning this Agreement or the other Loan Documents and (e) to prospective participants and participants in the credit extended hereunder, provided that any Persons described in clauses (d) and (e) shall be bound to comply with the terms of this Section 11.19. In the situations described above (except where the Company is a party or where disclosure is made during the course of a regulatory examination of a Bank), the Agent or the relevant Bank shall notify the Company as promptly as practicable of the receipt of a request for such disclosure and furnish it with a copy of such subpoena or other legal process (to the extent the Agent or such Bank is legally permitted to do so). The provisions of this Section shall survive the payment of the Notes and the termination of this Agreement.

29

        Section 11.20. Register. The Agent, on behalf of the Company, shall maintain at its address referred to in Section 11.7 a copy of each assignment and acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Banks and each Commitment of, and principal amount of the Loans owing to, each Bank from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Company, the Agent and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice. Upon its receipt of an assignment and acceptance executed by an assigning Bank, an assignee and the Company, if required, the Agent shall, if such assignment and acceptance has been completed and is acceptable to the Agent in form and substance, (a) accept such assignment and acceptance, (b) record the information contained therein in the Register and (c) give prompt notice thereof to the Company.

        Section 11.21. SPCs. Notwithstanding anything to the contrary contain herein, any Bank except the Agent, (a "Granting Bank") may grant to a special purpose funding vehicle (an "SPC") the option to fund all or any part of any Loan that such Granting Bank would otherwise be obligated to fund pursuant to this Agreement; provided, that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Bank shall be obligated to fund such Loan pursuant to the terms hereof, (iii) no SPC shall have any voting rights pursuant to Section 11.1 (all such voting rights shall be retained by the Granting Bank) and (iv) with respect to notices, payments and other matters hereunder, the Borrower the Agent and the Banks shall not be obligated to deal with an SPC, but may limit their communications and other dealings relevant to such SPC to the applicable Granting Bank. The funding of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Bank to the same extent that, and as if, such Loan were funded by such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Granting Bank provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreements shall survive termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any state thereof. Notwithstanding anything to the contrary contained in this Agreement, any SPC may disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or guarantee to such SPC. The grant of an option pursuant to this Section shall not be deemed either an assignment or a participation pursuant to Section 11.16 or 11.17, respectively, and shall not reduce the Commitment of the Granting Bank. This Section 11.21 may not be amended without the prior written consent of each Granting Bank, all or any part of whose Loan is being funded by an SPC at the time of such amendment.

        [THE REST OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK.]

30

        Section 11.22. STATUTORY STATEMENT MADE PURSUANT TO MO. REV. STAT. §432.045. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING PAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU, THE COMPANY, AND US, THE BANKS, FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND THE DOCUMENTS REFERRED TO HEREIN, WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENTS OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

        Upon your acceptance hereof in the manner hereinafter set forth, this Agreement shall be a contract between us for the purposes hereinabove set forth.

        Dated as of May 7, 2002.

THE EMPIRE DISTRICT ELECTRIC COMPANY

By: _________________________________
Its: _________________________________

        Accepted and Agreed to as of the day and year last above written.

UMB BANK, N.A., individually and as
Administrative Agent

By: _________________________________
Its: _________________________________
Address:    1010 Grand Boulevard
                  Kansas City, MO 64106
Attention:  Charles J. Wolf

Bank of America, N.A.,
individually and as Syndication Agent

By: _________________________________
Its: _________________________________
Address: ____________________________
              ____________________________
Attention: ___________________________
Telephone No.: ______________________
Telecopy No.: _______________________

M & I MARSHALL & ILSLEY BANK,
individually

By: _________________________________
Its: _________________________________
Address: ____________________________
              ____________________________
Attention: ___________________________
Telephone No.: ______________________
Telecopy No.: _______________________

31

LASALLE BANK NATIONAL ASSOCIATION,
individually

By: _________________________________
Its: _________________________________
Address: ____________________________
              ____________________________
Attention: ___________________________
Telephone No.: ______________________
Telecopy No.: _______________________

WELLS FARGO BANK, N.A., individually

By: _________________________________
Its: _________________________________
Address: ____________________________
              ____________________________
Attention: ___________________________
Telephone No.: ______________________
Telecopy No.: _______________________

COMERICA BANK, individually

By: _________________________________
Its: _________________________________
Address: ____________________________
              ____________________________
Attention: ___________________________
Telephone No.: ______________________
Telecopy No.: _______________________

32

QuickLinks

EXHIBIT 4

THE EMPIRE DISTRICT ELECTRIC COMPANY UNSECURED CREDIT AGREEMENT TABLE OF CONTENTS
THE EMPIRE DISTRICT ELECTRIC COMPANY
UNSECURED CREDIT AGREEMENT

EX-10.A

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT (10)(a)

FIRST AMENDMENT TO

STOCK UNIT PLAN FOR DIRECTORS

OF THE EMPIRE DISTRICT ELECTRIC COMPANY

        The Stock Unit Plan for Directors of The Empire District Electric Company is hereby amended, effective as of January 1, 2002, in the following respects:

1.

Section 7(c)(i) is amended to read as follows:

"(i)

the Director's Annual Retainer Fees as in effect on such January 1^st or, if the Committee establishes a fixed amount for the Annual Credit for the applicable calendar year, such fixed amount,"

2.

Section 7(d)(i) is amended to read as follows:

"(i)

the amount of the Eligible New Director's Retainer Fees (excluding meeting and committee fees) for the balance of the calendar year of his or her initial election as a Director (computed as a percentage of the Annual Retainer Fees as in effect on the date of his or her initial election) or, if the Committee establishes a fixed amount for the Annual Credit for that calendar year pursuant to Section 7(c)(i) above, the amount of the Annual Credit set by the Committee divided by twelve and multiplied by the number of whole months remaining for the balance of such year"

        IN WITNESS WHEREOF, the Employer has caused this First Amendment to the Stock Unit Plan for Directors of The Empire District Electric to be executed by its duly authorized representative on this 31st day of January 2002.

	THE EMPIRE DISTRICT ELECTRIC COMPANY
	By:
	Its President
ATTEST

By

Its Secretary

QuickLinks

EXHIBIT (10)(a)

EX-10.B

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT (10)(b)

FIRST AMENDMENT TO

THE EMPIRE DISTRICT ELECTRIC COMPANY

EMPLOYEES' DISABILITY BENEFIT PLAN

WHEREAS, The Board of Directors of The Empire District Electric Company adopted an Employee's Disability Benefit Plan (the "Plan") at its meeting held on October 23, 1986; and

WHEREAS, the Employer reserved the right to amend the Plan in Section 1.2; and

WHEREAS, The Board of Directors desire to amend the Plan and give oversight of determining the eligibility of any Employee and the amount of disability benefits payable to such employee to the Retirement Committee of the Board of Directors;

NOW THEREFORE, The Plan is hereby amended effective as of April 25, 2002 in the following manner:

1.

The first paragraph of Subsection 1.2 of the Plan is hereby amended to read as follows:

        The Board of Directors of Empire reserves the right to change, amend or terminate this Policy at any time, and its establishment and maintenance shall create no vested right in any Employee either before or after he becomes eligible for a disability benefit hereunder, and does not affect the tenure of employment of any Employee. The Retirement Committee of the Board of Directors shall have discretionary authority to interpret the provisions of this Policy and to determine the eligibility of any Employee and the amount of disability benefits payable to such Employee hereunder.

IN WITNESS WHEREOF, the Employer has caused this First Amendment to The Empire District Electric Company Employees' Disability Benefit Plan to be executed by its duly authorized representative on this 25^th day of April 2002.

	THE EMPIRE DISTRICT ELECTRIC COMPANY
	By:
	Its President
ATTEST

By

Its Secretary

QuickLinks

EXHIBIT (10)(b)

EX-10.C

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT (10)(c)

FIRST AMENDMENT TO

THE EMPIRE DISTRICT ELECTRIC COMPANY

EMPLOYEES' DISABILITY BENEFIT POLICY

WHEREAS, The Board of Directors of The Empire District Electric Company adopted an amended Employees' Disability Benefit Policy (the"Policy") at its meeting held on January 1, 1983; and

WHEREAS, the Employer reserved the right to amend the Policy in Section 1.2; and

WHEREAS, The Board of Directors desire to amend the Policy and give oversight of determining the eligibility of any Employee and the amount of disability benefits payable to such employee to the Retirement Committee of the Board of Directors;

NOW THEREFORE, The Policy is hereby amended effective as of April 25, 2002 in the following manner:

2.

The first paragraph of Subsection 1.2 of the Policy is hereby amended to read as follows:

        The Board of Directors of Empire reserves the right to change, amend or terminate this Policy at any time, and its establishment and maintenance shall create no vested right in any Employee either before or after he becomes eligible for a disability benefit hereunder, and does not affect the tenure of employment of any Employee. The Retirement Committee of the Board of Directors shall have discretionary authority to interpret the provisions of this Policy and to determine the eligibility of any Employee and the amount of disability benefits payable to such Employee hereunder.

IN WITNESS WHEREOF, the Employer has caused this First Amendment to The Empire District Electric Company Employees' Disability Benefit Policy to be executed by its duly authorized representative on this 25^th day of April 2002.

	THE EMPIRE DISTRICT ELECTRIC COMPANY
	By:
	Its President
ATTEST

By

Its Secretary

QuickLinks

EXHIBIT (10)(c)

EX-12

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT (12)

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

	Twelve Months Ended March 31, 2002
Income before provision for income taxes and fixed charges (Note A)	$	42,914,700
Fixed charges:
Interest on first mortgage bonds	$	17,393,820
Amortization of debt discount and expense less premium		1,101,846
Interest on short-term debt		1,511,679
Interest on long-term debt		7,899,736
Interest on trust preferred distributions by subsidiary holding solely parent debentures		4,250,000
Other interest		946,500
Rental expense representative of an interest factor (Note B)		19,205
Total fixed charges		33,122,786
Ratio of income before provision for incomes taxes to net income		1.278	x
Ratio of earnings to fixed charges		1.30	x

NOTE A:	For the purpose of determining earnings in the calculation of the ratio, net income has been increased by the provision for income taxes, non-operating income taxes and by the sum of fixed charges as shown above.
NOTE B:	One-third of rental expense (which approximates the interest factor).

QuickLinks

EXHIBIT (12)