Exhibit 10.16
WPS RESOURCES CORPORATION
 
2001 OMNIBUS INCENTIVE COMPENSATION PLAN
 

Section 1. PURPOSE AND DEFINITIONS
 
(a) Purpose. The purpose of the WPS Resources Corporation 2001 Omnibus Incentive
Compensation Plan is to promote the interests of the Company and its
shareholders by (a) attracting and retaining executives and other key employees
of outstanding training, experience and ability; (b) motivating them, by means
of performance-related incentives, to achieve performance goals; and (c)
enabling them to participate in the growth and financial success of the Company.
It is intended that this purpose be effected via performance-based incentives
and through awards or grants of stock options and various other rights with
respect to shares of the Company’s common stock, as provided herein, to such
eligible employees (as defined in subsection (b) below).
 
(b) Definitions. The following terms shall have the following respective
meanings unless the context requires otherwise:
 
(1) An “Affiliate” of, or a person “affiliated” with, a specified person is a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person
specified and the term “Associate” used to indicate a relationship with any
person, means (i) any corporation or organization (other than the registrant or
a majority-owned subsidiary of the registrant) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (ii) any trust or other
estate in which such person has a substantial beneficial interest or as to which
such person serves as trustee or in a similar fiduciary capacity, and (iii) any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of the registrant or
any of its parents or subsidiaries.
 
 
 

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(2) The term “Annual Performance Right” shall mean the right to receive up to
the amount of compensation described in the Participant’s award agreement,
taking into account the Target Award and the Performance Formula, upon the
attainment of one or more specified Performance Goals, subject to the terms and
conditions of the award agreement and the Plan.
 
(3) A person shall be deemed to be the “Beneficial Owner” of any securities:
 
(A) which such Person or any of such Person’s Affiliates or Associates has the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or (B) securities issuable upon
exercise of Rights pursuant to the terms of the Company’s Rights Agreement with
Firstar Trust Company, dated as of December 12, 1996, as amended from time to
time (or any successor to such Rights Agreement) at any time before the issuance
of such securities;
 
(B) which such Person or any of such Person’s Affiliates or Associates, directly
or indirectly, has the right to vote or dispose of or has “beneficial ownership”
of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this
subparagraph (ii) as a result of an agreement,
 
 
 
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arrangement or understanding to vote such security if the agreement, arrangement
or understanding: (A) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations under the Act
and (B) is not also then reportable on a Schedule 13D under the Act (or any
comparable or successor report); or
 
(C) which are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in Section paragraph
(B) above) or disposing of any voting securities of the Company.
 
(4) The term “Board” shall mean the Board of Directors of the Company.
 
(5) The term “Change in Control” shall mean the occurrence of any one of the
following:
 
(A) any Person (other than any employee benefit plan of the Company or of any
subsidiary of the Company, any Person organized, appointed or established
pursuant to the terms of any such benefit plan or any trustee, administrator or
fiduciary of such a plan) is or becomes the Beneficial Owner of securities of
the Company representing at least 30% of the combined voting power of the
Company’s then outstanding securities;
 
(B) one-half or more of the members of the Board are not Continuing Directors;
 
(C) there shall be consummated any merger, consolidation, or reorganization of
the Company with any other corporation as a result of which less than 50% of the
outstanding voting securities of the surviving
 
 
 
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or resulting entity are owned by the former shareholders of the Company other
than a shareholder who is an Affiliate or Associate of any party to such
consolidation or merger;
 
(D) there shall be consummated any merger of the Company or share exchange
involving the Company in which the Company is not the continuing or surviving
corporation other than a merger of the Company in which each of the holders of
the Company’s Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger;
 
(E) there shall be consummated any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Company to a Person which is not a wholly owned
subsidiary of the Company; or
 
(F) the shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.
 
(6) The term “Code” shall mean the Internal Revenue Code of 1986, or any
successor thereto, as the same may be amended and in effect from time to time.
 
(7) The term “Committee” shall mean the committee appointed pursuant to Section
2 to administer the Plan.
 
(8) The term “Company” shall mean WPS Resources Corporation, or any successor
thereto.
 
(9) The term “Continuing Director” shall mean (i) any member of the Board of
Directors of the Company who was a member of such Board on May 1, 1997, (ii) any
successor of a Continuing Director who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on such Board, and (iii)
additional directors elected by a majority of the Continuing Directors then on
such Board.
 
 
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(10) The term “Covered Executive” shall mean, with respect to each taxable year
of the Company, an individual who, on the last day of the taxable year, is the
Chief Executive Officer of the Company or among the four highest compensated
officers of the Company and its subsidiaries (other than the Chief Executive
Officer), as determined pursuant to the executive compensation disclosure rules
under the Exchange Act.
 
(11) The term “Employee” shall mean an employee of the Company or any
Subsidiary. The term “Employee” shall also be deemed to include any person who
is an employee of any joint venture corporation or partnership, or comparable
entity, in which the Company or Subsidiary has a substantial equity interest.
 
(12) The term “Exchange Act” shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same may be amended and in effect from time to
time.
 
(13) The term “Fair Market Value” shall mean the average of the highest and
lowest sale prices at which a share of Stock shall have been sold regular way on
the New York Stock Exchange on the date of grant of any Option or Stock
Appreciation Right or other relevant valuation date. In the event that any
Option or Stock Appreciation Right shall be granted, or other relevant valuation
date shall occur, on a date on which there were no such sales of Stock on the
New York Stock Exchange, the Fair Market Value of a share of Stock shall be
deemed to be the average of the highest and lowest sale prices on the next
preceding day on which there were such sales. 
 
(14) The term “Final Award” shall mean the amount of compensation or the number
of shares of Stock to be awarded finally to the Participant who holds an Annual
Performance Right or a Performance Stock Right, as determined by the Committee
taking into account the extent to which the Participant has achieved the
Performance Goals.
 
(15) The term “Option” or “Options” shall mean the option to purchase Stock in
accordance with Section 6 and such other terms and conditions as may be
prescribed by the Committee. An Option may be either an “incentive stock
option”, as such term is defined in the Code, or shall otherwise be designated
as an option entitled to favorable treatment under the
 
 
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Code (“ISO”) or a “nonqualified stock option” (“NQO”). ISOs and NQOs are
individually called an “Option” and collectively called “Options”.
 
(16) The term “Other Stock-Based Awards” shall mean awards of Stock or other
rights made in accordance with Section 7.
 
(17) The term “Participant” shall mean an Employee who has been designated for
participation in the Plan.
 
(18) The term “Performance Goals” shall mean, with respect to any Annual
Performance Right or Performance Stock Right granted to a Participant who is a
Covered Executive, a performance measure that is based upon one or more of the
following objective business criteria established by the Committee with respect
to the Company and/or any Subsidiary, division, business unit or component
thereof: asset charge, asset turnover, return on sales, capital employed in the
business, capital spending, cash flow, cost structure improvements, complexity
reductions, customer loyalty, diversity, earnings growth, earnings per share,
economic value-added, environmental health, safety, increase in customer base,
market share, net cash balance, net income, net income margin, net operating
cash flow, operating profit margin, operations and maintenance reduction,
productivity, response time, profits before tax, quality/customer satisfaction,
return on assets, return on capital, return on equity, return on net operating
assets, return on sales, revenue growth, sales margin, sales volume, system
reliability, total shareholder return, variable margin and working capital. With
respect to any Annual Performance Right or Performance Stock Right granted to a
Participant who is not a Covered Executive, performance goals may be based on
one or more of the business criteria described above or any other criteria based
on individual, business unit, Subsidiary, group or Company performance selected
by the Committee. The Performance Goals may be expressed in absolute terms or
relate to the performance of other companies or to an index.
 
(19) The term “Performance Formula” shall mean a formula to be applied in
relation to the Performance Goals in determining the percentage, not to exceed
200%, of the Target Award earned by the Participant with respect to a Plan
Award.
 
 
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(20) The term “Performance Period” shall mean the period of time for which
performance with respect to one or more Performance Goals with respect to any
Annual Performance Right or Performance Stock Right is to be measured, with such
period commencing not earlier than 90 days prior to the date of grant of such
Annual Performance Right or Performance Stock Right.
 
(21) The terms “Performance Stock Rights” or “Performance Shares” shall mean the
right to receive, without payment to the Company, up to the number of shares of
Stock described in the Participant’s award agreement, taking into account the
Target Award and the Performance Formula, upon the attainment of one or more
specified Performance Goals, subject to the terms and provisions of the award
agreement and the Plan.
 
(22) The term “Person” shall mean any individual, firm, partnership, corporation
or other entity, including any successor (by merger or otherwise) of such
entity, or a group of any of the foregoing acting in concert.
 
(23) The term “Plan” shall mean the WPS Resources Corporation 2001 Omnibus
Incentive Compensation Plan as the same may be amended and in effect from time
to time.
 
(24) The term “Plan Awards” shall mean awards or grants of incentive
compensation, whether in cash or in the form of stock options or various other
rights with respect to shares of Stock.
 
(25) The term “Right” shall mean an Annual Performance Right or a Performance
Stock Right, as required by the context.
 
(26) The term “Stock Appreciation Right” shall mean the right to receive,
without payment to the Company, an amount of cash or Stock as determined in
accordance with Section 6, based on the amount by which the Fair Market Value of
a share of Stock on the relevant valuation date exceeds the grant price.
 
 
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(27) The term “Subsidiary” shall mean (A) any corporation a majority of the
voting stock of which is owned directly or indirectly by the Company or (B) any
limited liability company a majority of the membership interest of which is
owned, directly or indirectly, by the Company.
 
(28) The term “Stock” shall mean shares of the Company’s common stock, par value
$1.00 per share.
 
(29) The term “Target Award” shall mean the amount of compensation or the number
of shares of Stock, subject to adjustment pursuant to Section 12, to be earned
by a Participant under an Annual Performance Right or a Performance Stock Right
if all of the Performance Goals are achieved.
 
Section 2. ADMINISTRATION
 
(a) Committee. The Plan shall be administered by the Compensation and Nominating
Committee of the Board consisting of not less than two (2) members of the Board
who meet the “outside” director requirements of Section 162(m) of the Code and
the “non-employee director” requirements of Rule 16b-3(b)(3) under the Exchange
Act, or by any other committee appointed by the Board, provided the members of
such committee meet such requirements. The Committee shall administer the Plan
and perform such other functions as are assigned to it under the Plan. The
Committee is authorized, subject to the provisions of the Plan, from time to
time, to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan, and to make such determinations under, and
such interpretations of, and to take such steps in connection with, the Plan and
the Plan Awards as it may deem necessary or advisable, in each case in its sole
discretion. The Committee’s decisions and determinations under the Plan need not
be uniform and may be made selectively among Participants, whether or not they
are similarly situated. Any authority granted to the Committee may also be
exercised by the Board, except to the extent that the grant or exercise of such
authority would cause any qualified performance-based award to cease to qualify
for exemption under Section 162(m) of the Code. To the extent that any permitted
action taken by the Board conflicts with any action taken by the Committee, the
Board action shall control.
 
 
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(b) Delegation of Authority. The Committee may delegate any or all of its powers
and duties under the Plan, including, but not limited to, its authority to make
awards under the Plan or to grant waivers pursuant to Section 9, to one or more
other committees (including a committee consisting of two or more corporate
officers) as it shall appoint, pursuant to such conditions or limitations as the
Committee may establish; provided, however, that the Committee shall not
delegate its authority to (1) act on matters affecting any Participant who is
subject to the reporting requirements of Section 16(a) of the Exchange Act, or
the liability provisions of Section 16(b) of the Exchange Act (any such
Participant being called a “Section 16 Person”) or (2) amend or modify the Plan
pursuant to the provisions of Section 15(b). To the extent of any such
delegation, the term “Committee” when used herein shall mean and include any
such delegate.  
 
(c) Eligibility of Committee Members. No person while a member of the Committee
shall be eligible to hold or receive a Plan Award.
 
Section 3. ANNUAL PERFORMANCE RIGHTS AND FINAL AWARDS
 
(a) Grant of Annual Performance Rights. The Committee, at any time and from time
to time while the Plan is in effect, may grant or authorize the granting of,
Annual Performance Rights to such officers of the Company and any Subsidiary,
and other Employees, whether or not members of the Board, as it may select and
in such amount as it shall designate, subject to the provisions of this Section
3.
 
(b) Maximum Awards. The maximum amount that may be granted to a Covered
Executive as a Final Award with respect to one or more Annual Performance Rights
during any calendar year during any part of which the Plan is in effect, whether
such Final Award is payable in cash or credited to the Covered Executive’s
account under the WPS Resources Corporation Deferred Compensation Plan in
accordance with subsection (d) below, shall be $1 million.
 
(c) Terms and Provisions of Annual Performance Rights. Prior to the grant of any
Annual Performance Right, the Committee shall determine the terms and provisions
of such Right, including, without limitation (1) the Target Award; (2) one or
more Performance Goals to
 
 
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be used to measure performance under such Right, and the Performance Formula to
be applied against the Performance Goals in determining the amount of
compensation earned under such Right as a percentage of the Target Award; (3)
the Performance Period, and (4) the effect of the Participant’s termination of
employment or death. Within 90 days of commencement of a Performance Period, the
Committee may establish a minimum threshold objective for any Performance Goal
for such Performance Period which, if not met, would result in no Final Award
being made to any Participant with respect to such Performance Goal for such
Performance Period. During and after the Performance Period, but prior to the
Committee’s final determination of the Participant’s Final Award as provided in
subsection (d), the Committee may adjust the Performance Goals, Performance
Formula and Target Award and otherwise modify the terms and provisions of a
Right granted to a Participant who is not a Covered Executive, subject to the
terms and conditions of the Plan. Each Right shall be evidenced by an award
agreement in such form as the Committee may determine.
 
(d) Final Awards.
 
(1) As soon as practicable following the completion of the Performance Period
relating to any Annual Performance Right, but not later than 12 months following
such completion, the Committee shall determine the extent to which the
Participant achieved the Performance Goals and the amount of compensation to be
awarded as a Final Award to the Participant who holds such Right. In making such
determination, the Committee shall apply the applicable Performance Formula for
the Participant for the Performance Period against the accomplishment of the
related Performance Goals. The Committee may, in its sole discretion, reduce the
amount of any Final Award that otherwise would be awarded to any Participant for
any Performance Period. In addition, the Committee may, in its sole discretion,
increase the amount of any Final Award that otherwise would be awarded to any
Participant who is not a Covered Executive. Any such determination shall take
into account (A) the extent to which the Performance Goals provided in such
Right were, in the Committee’s sole opinion, achieved, (B) the individual
performance of such Participant during the related Performance Period and (C)
such other factors as the Committee may deem relevant, including, without
limitation, any change in circumstances or unforeseen events, relating to the
Company, the
 
 
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economy or otherwise, since the date of grant of such Right. The Committee shall
notify such Participant of such Participant’s Final Award as soon as practicable
following such determination. 
 
(2) Following the determination of each Final Award, unless the Participant has
elected to defer all or a portion of the Final Award in accordance with the
procedures set forth in the WPS Resources Corporation Deferred Compensation
Plan, the Final Award will be payable to the Participant in cash.
 
Section 4. STOCK AVAILABLE FOR PLAN AWARDS
 
(a) Stock Subject to Plan. The Stock to be subject to or related to Plan Awards
may be either authorized and unissued or held in the treasury of the Company.
The maximum number of shares of Stock with respect to which Plan Awards may be
granted under the Plan, subject to adjustment in accordance with the provisions
of Section 12, shall be two million (2,000,000) shares of which a maximum of
five hundred thousand (500,000) shares shall be granted as Performance Stock
Rights, Performance Shares or Other Stock-Based Awards; (2) the maximum number
of shares subject to Options, with or without any related Stock Appreciation
Rights, or Stock Appreciation Rights (not related to Options) that may be
granted pursuant to Section 6 to any Covered Executive during any calendar year
during any part of which the Plan is in effect shall be 150,000 subject to
adjustment in accordance with the provision of Section 12; and (3) the maximum
number of shares of Stock that may be granted as Final Awards pursuant to
Section 5 to any Covered Executive during any calendar year during any part of
which the Plan is in effect shall be 50,000, subject to adjustment in accordance
with the provision of Section 12.
 
(b) Computation of Stock Available for Plan Awards. For the purpose of computing
the total number of shares of Stock remaining available for Plan Awards at any
time while the Plan is in effect, there shall be debited against the total
number of shares determined to be available pursuant to subsections (a) and (c)
of this Section 4, (1) the maximum number of shares of Stock subject to issuance
upon exercise of Options or Stock Appreciation Rights granted under this Plan,
(2) the maximum number of shares of Stock issuable under Performance
 
 
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Stock Rights granted under this Plan, and (3) the number of shares of Stock
related to Other Stock-Based Awards granted under this Plan, as determined by
the Committee in each case as of the dates on which such Plan Awards were
granted.
 
(c) Terminated, Expired or Forfeited Plan Awards. The shares involved in the
unexercised or undistributed portion of any terminated, expired or forfeited
Plan Award shall be made available for further Plan Awards. Any shares of Stock
made available for Plan Awards pursuant to this subsection (c) shall be in
addition to the shares available pursuant to subsection (a) of this Section 4.
Notwithstanding the foregoing, in the event any Option or Stock Appreciation
Right granted to a Covered Executive is canceled, the number of shares of Stock
subject to such canceled Option or Stock Appreciation Right shall continue to
count against the individual limit specified in subsection (a), in accordance
with the requirements of Code Section 162(m).
 
Section 5. PERFORMANCE STOCK RIGHTS AND FINAL AWARDS
 
(a) Grant of Performance Stock Rights. The Committee, at any time and from time
to time while the Plan is in effect, may grant, or authorize the granting of,
Rights to such officers of the Company and any Subsidiary, and other key
salaried Employees, whether or not members of the Board, as it may select and
for such numbers of shares as it shall designate, subject to the provisions of
this Section 5 and Section 4.
 
(b) Terms and Provisions of Performance Stock Rights. Prior to the grant of any
Right, the Committee shall determine the terms and provisions of each Right,
including, without limitation (1) the Target Award; (2) one or more Performance
Goals to be used to measure performance under such Right, and the Performance
Formula to be applied against the Performance Goals in determining the number of
shares of Stock earned under such Right as a percentage of the Target Award; (3)
the Performance Period; (4) the period of time, if any, during which the
disposition of shares of Stock issuable under such Right shall be restricted as
provided in subsection (a) of Section 10, provided, however, that the Committee
may establish restrictions applicable to any Right at the time of or at any time
prior to the granting of the related Final Award rather than at the time of
granting such Right; and (5) the effect of the Participant’s
 
 
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termination of employment or death. Within 90 days of commencement of a
Performance Period, the Committee may establish a minimum threshold objective
for any Performance Goal for such Performance Period which, if not met, would
result in no Final Award being made to any Participant with respect to such
Performance Goal for such Performance Period. During and after the Performance
Period, but prior to the Committee’s final determination of the Participant’s
Final Award as provided in subsection (d), the Committee may adjust the
Performance Goals, Performance Formula and Target Award and otherwise modify the
terms and provisions of a Right granted to a Participant who is not a Covered
Executive, subject to the terms and conditions of the Plan. Each Right shall be
evidenced by an award agreement in such form as the Committee may determine.
 
(c) Dividend Equivalents on Stock Performance Rights.
 
(1) If the Committee shall determine, each Participant to whom a Right is
granted shall be entitled to receive payment of the same amount of cash that
such Participant would have received as cash dividends if, on each record date
during the Performance Period relating to such Right, such Participant had been
the holder of record of a number of shares of Stock equal to 100% of the related
Target Award (as adjusted pursuant to Section 12). Any such payment may be made
at the same time as a dividend is paid or may be deferred until the date that a
Final Award is determined, as determined by the Committee in its sole
discretion. Such cash payments are hereinafter called “dividend equivalents”.
 
(2) Notwithstanding the provisions of subsection (c)(1), the Committee may
determine that, in lieu of receiving all or any portion of any such dividend
equivalent in cash, a Participant shall receive an award of full shares of Stock
having a Fair Market Value approximately equal to the portion of such dividend
equivalent that was not paid in cash. Certificates for shares of Stock so
awarded may be issued as of the payment date for the related cash dividend or
may be deferred until the date that the Final Award is determined, and the
shares of Stock covered thereby may be subject to the terms and conditions of
the Right to which it relates (including but not limited to the attainment of
the Performance Goals) and the terms and conditions of the Plan (including but
not limited to Sections 5, 9, 10 and 12), all as determined by the Committee in
its sole discretion.
 
 
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(d) Final Awards.
 
As soon as practicable following the completion of the Performance Period
relating to any Right, but not later than 12 months following such completion,
the Committee shall determine the extent to which the Participant achieved the
Performance Goals and the number of shares of Stock to be awarded as a Final
Award to the Participant who holds such Right. Each Final Award shall represent
only full shares of Stock, and any fractional share that would otherwise result
from such Final Award calculation shall be disregarded. In making such
determination, the Committee shall apply the applicable Performance Formula for
the Participant for the Performance Period against the accomplishment of the
related Performance Goals. The Committee may, in its sole discretion, reduce the
amount of any Final Award that otherwise would be awarded to any Participant for
any Performance Period. In addition, the Committee may, in its sole discretion,
increase the amount of any Final Award that otherwise would be awarded to any
Participant who is not a Covered Executive. Any such determination shall take
into account (A) the extent to which the Performance Goals provided in such
Right were, in the Committee’s sole opinion, achieved, (B) the individual
performance of such Participant during the related Performance Period and (C)
such other factors as the Committee may deem relevant, including, without
limitation, any change in circumstances or unforeseen events, relating to the
Company, the economy or otherwise, since the date of grant of such Right. The
Committee shall notify such Participant of such Participant’s Final Award as
soon as practicable following such determination. 
 
(1) Following the determination of each Final Award, unless the Participant has
elected to defer all or a portion of the Final Award in accordance with the
procedures set forth in the WPS Resources Corporation Deferred Compensation Plan
or unless the Committee has directed an alternate form of distribution, the
Company shall issue or cause to be issued certificates for the number of shares
of Stock representing such Final Award, registered in the name of the
Participant who received such Final Award. Such Participant shall thereupon
become the holder of record of the number of shares of Stock evidenced by such
certificates, entitled to dividends, voting rights and other rights of a holder
thereof, subject to the terms and provisions of the Plan, including, without
limitation, the provisions of this subsection (d) and
 
 
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Sections 9, 10 and 12. The Committee may require that such certificates bear
such restrictive legend as the Committee may specify and be held by the Company
in escrow or otherwise pursuant to any form of agreement or instrument that the
Committee may specify. If the Committee has determined that deferred dividend
equivalents shall be payable to a Participant with respect to any Right pursuant
to subsection (c) of this Section 5, then concurrently with the issuance of such
certificates, the Company shall deliver to such Participant a cash payment or
additional shares of Stock in settlement of such dividend equivalents.
 
Section 6. OPTIONS AND STOCK APPRECIATION RIGHTS
 
(a) Grant of Options.
 
(1) The Committee, at any time and from time to time while the Plan is in
effect, may authorize the granting of Options to such officers of the Company
and any Subsidiary, and other key salaried Employees, whether or not members of
the Board, as it may select, and for such numbers of shares as it shall
designate, subject to the provisions of this Section 6 and Section 4. Each
Option granted pursuant to the Plan shall be a NQO unless designated by the
Committee at the time of grant as an ISO.
 
(2) The date on which an Option shall be granted shall be the date of
authorization of such grant or such later date as may be determined by the
Committee at the time such grant is authorized. Any individual may hold more
than one Option.
 
(b) Price. In the case of each Option granted under the Plan the option price
shall be the Fair Market Value of Stock on the date of grant of such Option;
provided, however, that the Committee may in its discretion fix an option price
in excess of the Fair Market Value of Stock on such date.
 
(c) Grant of Stock Appreciation Rights.
 
(1) The Committee, at any time and from time to time while the Plan is in
effect, may authorize the granting of Stock Appreciation Rights to such officers
of the Company and any Subsidiary, and other key salaried Employees, whether or
not members of the
 
 
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Board, as it may select, and for such numbers of shares as it shall designate,
subject to the provisions of this Section 6 and Section 4. Each Stock
Appreciation Right may relate to all or a portion of a specific Option granted
under the Plan and may be granted concurrently with the Option to which it
relates or at any time prior to the exercise, termination or expiration of such
Option (a “Tandem SAR”), or may be granted independently of any Option, as
determined by the Committee. If the Stock Appreciation Right is granted
independently of an Option, the grant price of such Stock Appreciation Right
shall be the Fair Market Value of Stock on the date of grant; provided, however,
that the Committee may, in its discretion, fix a grant price in excess of the
Fair Market Value of Stock on such grant date.
 
(2) Upon exercise of a Stock Appreciation Right, the Participant shall be
entitled to receive, without payment to the Company, either (A) that number of
shares of Stock determined by dividing (i) the total number of shares of Stock
subject to the Stock Appreciation Right being exercised by the Participant,
multiplied by the amount by which the Fair Market Value of a share of Stock on
the day the right is exercised exceeds the grant price (such amount being
hereinafter referred to as the “Spread”), by (ii) the Fair Market Value of a
share of Stock on the exercise date; or (B) cash in an amount determined by
multiplying (i) the total number of shares of Stock subject to the Stock
Appreciation Right being exercised by the Participant, by (ii) the amount of the
Spread; or (C) a combination of shares of Stock and cash, in amounts determined
as set forth in clauses (A) and (B) above, as determined by the Committee in its
sole discretion; provided, however, that, in the case of a Tandem SAR, the total
number of shares which may be received upon exercise of a Stock Appreciation
Right for Stock shall not exceed the total number of shares subject to the
related Option or portion thereof, and the total amount of cash which may be
received upon exercise of a Stock Appreciation Right for cash shall not exceed
the Fair Market Value on the date of exercise of the total number of shares
subject to the related Option or portion thereof.
 
(d) Terms and Conditions.
 
(1) Each Option and Stock Appreciation Right granted under the Plan shall be
exercisable on such date or dates, during such period, for such number of shares
and subject to such further conditions as shall be determined pursuant to the
provisions of the award
 
 
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agreement with respect to such Option and Stock Appreciation Right; provided,
however, that a Tandem SAR shall not be exercisable prior to or later than the
time the related Option could be exercised; and provided, further, that in any
event no Option or Stock Appreciation Right shall be exercised beyond ten years
from the date of grant.
 
(2) The Committee may impose such conditions as it may deem appropriate upon the
exercise of an Option or a Stock Appreciation Right, including, without
limitation, a condition that the Stock Appreciation Right may be exercised only
in accordance with rules and regulations adopted by the Committee from time to
time.
 
(3) With respect to Options issued with Tandem SARs, the right of a Participant
to exercise the Tandem SAR shall be cancelled if and to the extent the related
Option is exercised, and the right of a Participant to exercise an Option shall
be cancelled if and to the extent that shares covered by such Option are used to
calculate shares or cash received upon exercise of the Tandem SAR.
 
(4) If any fractional share of Stock would otherwise be payable to a Participant
upon the exercise of an Option or Stock Appreciation Right, the Participant
shall be paid a cash amount equal to the same fraction of the Fair Market Value
of the Stock on the date of exercise.
 
(e) Award Agreement. Each Option and Stock Appreciation Right shall be evidenced
by an award agreement in such form and containing such provisions not
inconsistent with the provisions of the Plan as the Committee from time to time
shall approve.
 
(f) Payment for Option Shares.
 
(1) Payment for shares of Stock purchased upon exercise of an Option granted
hereunder shall be made in such manner as is provided in the applicable award
agreement, which may include payment through a cash-less exercise executed
through a broker.
 
(2) Unless the Committee shall provide otherwise in any award agreement, any
payment for shares of Stock purchased upon exercise of an Option granted
 
 
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hereunder may be made in cash, by delivery of shares of Stock beneficially owned
by the Participant, or by a combination of cash and Stock, at the election of
the Participant; provided, however, that any shares of Stock so delivered shall
have been beneficially owned by the Participant for a period of not less than
six months prior to the date of exercise. Any such shares of Stock so delivered
shall be valued at their Fair Market Value on the date of such exercise. The
Committee shall determine whether and if so the extent to which actual delivery
of share certificates to the Company shall be required.
 
Section 7. STOCK AND OTHER STOCK-BASED AWARDS
 
(a) Grants of Other Stock-Based Awards. The Committee, at any time and from time
to time while the Plan is in effect, may grant Other Stock-Based Awards to such
officers of the Company and its Subsidiaries, and other key salaried Employees,
whether or not members of the Board, as it may select. Such Plan Awards pursuant
to which Stock is or may in the future be acquired, or Plan Awards valued or
determined in whole or part by reference to, or otherwise based on, Stock, may
include, but are not limited to, awards of restricted Stock or Plan Awards
denominated in the form of “stock units”, grants of so-called “phantom stock”
and options containing terms or provisions differing in whole or in part from
Options granted pursuant to Section 6. Other Stock-Based Awards may be granted
either alone, in addition to, in tandem with or as an alternative to any other
kind of Plan Award, grant or benefit granted under the Plan or under any other
employee plan of the Company, including a plan of any acquired entity.
 
(b) Terms and Conditions. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the time or times at which Other
Stock-Based Awards shall be made, the number of shares of Stock or stock units
and the like to be granted or covered pursuant to such Plan Awards (subject to
the provisions of Section 4) and all other terms and conditions of such Plan
Awards, including, but not limited to, whether such Plan Awards shall be payable
or paid in cash, Stock or otherwise.
 
 
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(c) Consideration for Other Stock-Based Awards. In the discretion of the
Committee, any Other Stock-Based Award may be granted as a Stock bonus for no
consideration other than services rendered.
 
Section 8. CASH AWARDS TO EMPLOYEES OF FOREIGN SUBSIDIARIES OR BRANCHES OR JOINT
VENTURES
 
In order to facilitate the granting of Plan Awards to Participants who are
foreign nationals or who are employed outside of the United States of America,
the Committee may provide for such special terms and conditions, including
without limitation substitutes for Plan Awards, as the Committee may consider
necessary or appropriate to accommodate differences in local law, tax policy or
custom. Such substitutes for Plan Awards may include a requirement that the
Participant receive cash, in such amount as the Committee may determine in its
sole discretion, in lieu of any Plan Award or share of Stock that would
otherwise have been granted to or delivered to such Participant under the Plan.
The Committee may approve any supplements to, or amendments, restatements or
alternative versions of the Plan as it may consider necessary or appropriate for
purposes of this Section 8 without thereby affecting the terms of the Plan as in
effect for any other purpose, and the Secretary or other appropriate officer of
the Company may certify any such documents as having been approved and adopted
pursuant to properly delegated authority; provided, however, that no such
supplements, amendments, restatements or alternative versions shall include any
provision that is inconsistent with the terms of the Plan as then in effect.
Participants subject to the laws of a foreign jurisdiction may request copies
of, or the right to view, any materials that are required to be provided by the
Company pursuant to the laws of such jurisdiction.
 
Section 9. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON
 
(a) Effect of Competitive Activity. Anything contained in the Plan to the
contrary notwithstanding, if the employment of any Participant shall terminate,
for any reason other than death, while any Plan Award granted to such
Participant is outstanding hereunder, and such Participant has not yet received
the compensation or Stock covered by such Plan Award or otherwise received the
full benefit of such Plan Award, such Participant, if otherwise entitled
thereto, shall receive such Stock or compensation or benefit only if, during the
entire period from
 
 
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the date of such Participant’s termination to the date of such receipt, such
Participant shall have (1) made himself or herself available, upon request, at
reasonable times and upon a reasonable basis, to consult with, supply
information to and otherwise cooperate with the Company or any Subsidiary with
respect to any matter that shall have been handled by him or her or under his or
her supervision while he or she was in the employ of the Company or of any
Subsidiary, and (2) refrained from engaging in any activity that is directly or
indirectly in competition with any activity of the Company or any Subsidiary.
 
(b) Nonfulfillment of Competitive Activity Conditions: Waivers Under the Plan.
In the event of a Participant’s non-fulfillment of any condition set forth in
subsection (a) of this Section 9, such Participant’s rights under any Plan Award
shall be forfeited and cancelled forthwith; provided, however, that the
nonfulfillment of such condition may at any time (whether before, at the time of
or subsequent to termination of employment) be waived in the following manner:
 
(1) with respect to any such Participant who at any time shall have been a
Section 16 Person, such waiver may be granted by the Committee upon its
determination that in its sole judgment there shall not have been and will not
be any substantial adverse effect upon the Company or any Subsidiary by reason
of the nonfulfillment of such condition; and
 
(2) with respect to any other such Participant, such waiver may be granted by
the Committee (or any delegate thereof) upon its determination that in its sole
judgment there shall not have been and will not be any such substantial adverse
effect.
 
(c) Effect of Inimical Conduct. Anything contained in the Plan to the contrary
notwithstanding, all rights of a Participant under any Plan Award shall cease on
and as of the date on which it has been determined by the Committee that such
Participant at any time (whether before or subsequent to termination of such
Participant’s employment) acted in a manner inimical to the best interests of
the Company or any Subsidiary.
 
(d) Tax and Other Withholding. Prior to any distribution of cash, Stock or Other
Stock-Based Awards (including payments under Section 5(c)) to any Participant,
appropriate arrangements (consistent with the Plan and any rules adopted
hereunder) shall be
 
 
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made for the payment of any taxes and other amounts required to be withheld by
federal, state or local law.
 
(e) Substitution. The Committee, in its sole discretion, may substitute a Plan
Award (except ISOs) for another Plan Award or Plan Awards of the same or
different type.
 
Section 10. NON-TRANSFERABILITY OF PLAN AWARDS; RESTRICTIONS ON DISPOSITION AND
EXERCISE OF PLAN AWARDS
 
(a) Restrictions on Transfer of Rights or Final Awards.  No Right or, until the
expiration of any restriction period imposed by the Committee, no shares of
Stock covered by any Final Award, shall be transferred, pledged, assigned or
otherwise disposed of by a Participant, except as permitted by the Plan, without
the consent of the Committee, otherwise than by will or the laws of descent and
distribution; provided, however, that the Committee may permit, on such terms as
it may deem appropriate, use of Stock included in any Final Award as partial or
full payment upon exercise of an Option under the Plan or a stock option under
any other stock option plan of the Company prior to the expiration of any
restriction period relating to such Final Award.
 
(b) Restrictions on Transfer of Options or Stock Appreciation Rights. Unless the
Committee determines otherwise, no Option or Stock Appreciation Right shall be
transferable by a Participant otherwise than by will or the laws of descent and
distribution, and during the lifetime of a Participant the Option or Stock
Appreciation Right shall be exercisable only by such Participant or such
Participant’s guardian or legal representative.
 
(c) Restrictions on Transfer of Certain Other Stock-Based Awards. Unless the
Committee determines otherwise, no Other Stock-Based Award shall be transferable
by a Participant otherwise than by will or the laws of descent and distribution,
and during the lifetime of a Participant any such Other Stock-Based Award shall
be exercisable only by such Participant or such Participant’s guardian or legal
representative.
 
(d) Attachment and Levy. No Plan Award shall be subject, in whole or in part, to
attachment, execution or levy of any kind, and any purported transfer in
violation hereof
 
 
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shall be null and void. Without limiting the generality of the foregoing, no
domestic relations order purporting to authorize a transfer of a Plan Award, or
to grant to any person other than the Participant the authority to exercise or
otherwise act with respect to a Plan Award, shall be recognized as valid.
 
Section 11. DESIGNATION OF BENEFICIARIES
 
Any benefits due and payable to a Participant following the Participant’s death
shall be paid to the executor or administrator of the Participant’s estate (or
to such person as the executor or administrator of the estate may certify as
being eligible to receive such award as a result of the operation of the
Participant’s last will and testament or the application of the laws of
intestate succession), and upon any such payment, the Company, the Plan, the
Committee and the members thereof shall not be under any further liability to
anyone. Notwithstanding the foregoing, the Committee may, but need not, permit a
Participant to file with the Company a written designation of a beneficiary or
beneficiaries under the Plan, subject to such limitations as to the classes and
number of beneficiaries and contingent beneficiaries and such other limitations
as the Committee from time to time may prescribe. A Participant may from time to
time revoke or change any such designation of beneficiary. Any designation of a
beneficiary under the Plan shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Committee shall be in
doubt as to the entitlement of any such beneficiary to receive any Right, Final
Award, Option, Stock Appreciation Right or Other Stock-Based Award, or if
applicable law requires the Company to do so, the Committee may recognize only
the legal representative of such Participant as the sole beneficiary, in which
case the Company, the Plan, the Committee and the members thereof shall not be
under any further liability to anyone. In the event of the death of any
Participant, the term “Participant” as used in the Plan shall thereafter be
deemed to refer to the person entitled to payment pursuant to this Section 11
unless the context otherwise requires.
 
 
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Section 12. MERGER, CONSOLIDATION, STOCK DIVIDENDS, ETC.
 
(a) Adjustments. In the event of any merger, consolidation, reorganization,
stock split, stock dividend or other event affecting Stock, an appropriate
adjustment shall be made in the total number of shares available for Plan Awards
and in all other provisions of the Plan that include a reference to a number of
shares, and in the numbers of shares covered by, and other terms and provisions
(including, but not limited to the grant or exercise price of any Plan Award) of
outstanding Plan Awards.
 
(b) Committee Determinations. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined by the Committee in
its sole discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to a Plan Award.
 
Section 13. ACCELERATION OF PAYMENT OR MODIFICATION OF PLAN AWARDS
 
(a) Acceleration and Modification. The Committee, in the event of the death of a
Participant or in any other circumstance, may accelerate distribution of any
Plan Award in its entirety or in a reduced amount, or modify any Plan Award, in
each case on such basis and in such manner as the Committee may determine in its
sole discretion.
 
(b) Change in Control. Notwithstanding any other provision of the Plan, unless
the Committee determines otherwise at the time of grant, upon the occurrence of
a Change in Control, (1) any Plan Awards outstanding as of the date of such
Change in Control, and that are not then vested, shall become fully vested if
vesting is based solely upon length of the employment relationship, or shall
become fully vested at the Target Level (or if greater, the then projected Final
Award) prorated for the portion of the Performance Period that has been
completed as of the date of the Change in Control, (2) any restrictions or other
conditions applicable to any outstanding Awards shall lapse, and such Plan
Awards shall become free of all restrictions and conditions; and (3) any such
Plan Awards shall be immediately paid to the Participant.
 
 
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Section 14. RIGHTS AS A STOCKHOLDER
 
A Participant shall not have any rights as a stockholder with respect to any
Stock covered by any Plan Award until such Participant shall have become the
holder of record of such Stock.
 
Section 15. TERM, AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN AND
AGREEMENTS
 
(a) Term. Unless terminated earlier pursuant to subsection (b), the Plan shall
terminate on December 31, 2010.
 
(b) Amendment, Modification and Termination of Plan. The Board may, from time to
time, amend or modify the Plan or any outstanding Plan Award, including without
limitation, to authorize the Committee to make Plan Awards payable in other
securities or other forms of property of a kind to be determined by the
Committee, and such other amendments as may be necessary or desirable to
implement such Plan Awards, or may terminate the Plan or any provision thereof;
provided, however, that no such action of the Board, without approval of the
stockholders, may (1) increase the total number of shares of Stock with respect
to which Plan Awards may be granted under the Plan or the individual limits
specified in Section 4(a), (2) extend the term of the Plan as set forth in
paragraph (a) of this Section 15, (3) permit any person while a member of the
Committee or any other committee of the Board administering the Plan to be
eligible to receive or hold a Plan Award, or (4) permit the Company to decrease
the grant price of any outstanding Option or Stock Appreciation Right.
 
(c) Limitation and Survival. No amendment to or termination of the Plan or any
provision hereof, and no amendment or cancellation of any outstanding Plan
Award, by the Board or the stockholders of the Company, shall, without the
written consent of the affected Participant, adversely affect any outstanding
Plan Award. The Committee’s authority to act with respect to any outstanding
Plan Award, and a Participant’s ability to exercise an outstanding Plan award,
shall survive termination of the Plan.
 
(d) Amendments for Changes in Law. Notwithstanding the foregoing provisions, the
Board shall have the authority to amend outstanding Plan Awards and the Plan to
 
 
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take into account changes in law and tax and accounting rules as well as other
developments, and to grant Plan Awards that qualify for beneficial treatment
under such rules, without stockholder approval.
 
Section 16. INDEMNIFICATION AND EXCULPATION
 
(a) Indemnification. Each person who is or shall have been a member of the
Board, the Committee, or of any other committee of the Board administering the
Plan or of any committee appointed by the foregoing committees, shall be
indemnified and held harmless by the Company against and from any and all loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
such person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be or become a party or in which such person
may be or become involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by such person in
settlement thereof (with the Company’s written approval) or paid by such person
in satisfaction of a judgment in any such action, suit or proceeding, except a
judgment in favor of the Company based upon a finding of such person’s lack of
good faith; subject, however, to the condition that, upon the institution of any
claim, action, suit or proceeding against such person, such person shall in
writing give the Company an opportunity, at its own expense, to handle and
defend the same before such person undertakes to handle and defend it on such
person’s behalf. The foregoing right of indemnification shall not be exclusive
of any other right to which such person may be entitled as a matter of law or
otherwise, or any power that the Company may have to indemnify or hold such
person harmless.
 
(b) Exculpation. Each member of the Board, the Committee, or of any other
committee of the Board administering the Plan or any committee appointed by the
foregoing committees, and each officer and employee of the Company, shall be
fully justified in relying or acting in good faith upon any information
furnished in connection with the administration of the Plan by any appropriate
person or persons other than such person. In no event shall any person who is or
shall have been a member of the Board, the Committee, or of any other committee
of the Board administering the Plan or of any committee appointed by the
foregoing committees, or an officer or employee of the Company, be held liable
for any determination made or other action
 
 
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taken or any omission to act in reliance upon any such information, or for any
action (including the furnishing of information) taken or any failure to act, if
in good faith.
 
Section 17. EXPENSES OF PLAN
 
The entire expense of offering and administering the Plan shall be borne by the
Company and its participating Subsidiaries; provided, that the costs and
expenses associated with the redemption or exercise of any Plan Award, including
but not limited to commissions charged by any agent of the Company, may be
charged to the Participants.
 
Section 18. FINALITY OF DETERMINATIONS
 
Each determination, interpretation, or other action made or taken pursuant to
the provisions of the Plan by the Board, the Committee or any committee of the
Board administering the Plan or any committee appointed by the foregoing
committees, shall be final and shall be binding and conclusive for all purposes
and upon all persons, including, but without limitation thereto, the Company,
the stockholders, the Committee and each of the members thereof, and the
directors, officers, and employees of the Company and its Subsidiaries, the
Participants, and their respective successors in interest.
 
Section 19. NO RIGHTS TO CONTINUED EMPLOYMENT OR TO PLAN AWARD
 
(a) No Right to Employment. Nothing contained in this Plan, or in any booklet or
document describing or referring to the Plan, shall be deemed to confer on any
Participant the right to continue as an Employee or director of the Company or
Subsidiary, whether for the duration of any Performance Period, the duration of
any vesting period under a Plan Award, or otherwise, or affect the right of the
Company or Subsidiary to terminate the employment of any Participant for any
reason.
 
(b) No Right to Award. No Employee or other person shall have any claim or right
to be granted a Plan Award under the Plan. Having received an Award under the
Plan shall not give a Participant or any other person any right to receive any
other Plan Award under the Plan. A Participant shall have no rights in any Plan
Award, except as set forth herein and in the applicable award grant.
 
 
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Section 20. GOVERNING LAW AND CONSTRUCTION
 
The Plan and all actions taken hereunder shall be governed by, and the Plan
shall be construed in accordance with the laws of the State of Wisconsin without
regard to the principle of conflict of laws. Titles and headings to Sections are
for purposes of reference only, and shall in no way limit, define or otherwise
affect the meaning or interpretation of the Plan.
 
Section 21. SECURITIES AND STOCK EXCHANGE REQUIREMENTS
 
(a) Restrictions on Resale. Notwithstanding any other provision of the Plan, no
person who acquires Stock pursuant to the Plan may, during any period of time
that such person is an affiliate of the Company (within the meaning of the rules
and regulations of the Securities Exchange Commission) sell or otherwise
transfer such Stock, unless such offer and sale or transfer is made (1) pursuant
to an effective registration statement under the Securities Act of 1933 (“1933
Act”), which is current and includes the Stock to be sold, or (2) pursuant to an
appropriate exemption from the registration requirements of the 1933 Act, such
as that set forth in Rule 144 promulgated pursuant thereto.
 
(b) Registration, Listing and Qualification of Shares of Common Stock.
Notwithstanding any other provision of the Plan, if at any time the Committee
shall determine that the registration, listing or qualification of the Stock
covered by a Plan Award upon any securities exchange or under any foreign,
federal, state or local law or practice, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such Plan Award or the purchase or receipt of
Stock in connection therewith, no Stock may be purchased, delivered or received
pursuant to such Plan Award unless and until such registration, listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Committee. Any person receiving or
purchasing Stock pursuant to a Plan Award shall make such representations and
agreements and furnish such information as the Committee may request to assure
compliance with the foregoing or any other applicable legal requirements. The
Company shall not be required to issue or deliver any certificate or
certificates for Stock under the Plan prior to the Committee’s determination
that all related requirements have been fulfilled. The Company shall
 
 
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in no event be obligated to register any securities pursuant to the 1933 Act or
applicable state or foreign law or to take any other action in order to cause
the issuance and delivery of such certificates to comply with any such law,
regulation, or requirement.
 
Section 22. EFFECTIVE DATE
 
Subject to Section 23 below, the Plan shall become effective January 1, 2001.
 
Section 23. VOTE REQUIRED
 
The affirmative vote of the holders of a majority of the total votes cast on the
proposal to approve the Plan at the 2001 annual meeting of shareholders of the
Company will be required for approval of the Plan.
 
 
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