WPS RESOURCES CORPORATION

DEFERRED COMPENSATION PLAN


As Amended and Restated Effective January 1, 2001

 

 

 


WPS RESOURCES CORPORATION

DEFERRED COMPENSATION PLAN


    The WPS Resources Corporation Deferred Compensation Plan (the
"Plan") has been adopted to promote the best interests of WPS
Resources Corporation (the "Company") and the stockholders of the
Company by attracting and retaining key management employees possessing a strong
interest in the successful operation of the Company and its subsidiaries or
affiliates and encouraging their continued loyalty, service and counsel to the
Company and its subsidiaries or affiliates. The Plan is amended and restated
effective January 1, 2001 as set forth herein.

    Except as expressly provided herein, the Plan, as herein amended and restated
effective January 1, 2001, applies to those employees who are actively employed
by the Company on January 1, 2001, and who have been designated for
participation by the Committee. Except as expressly provided herein,
distribution of benefits to an employee who retired from or terminated
employment with the Company prior to January 1, 2001, shall be governed by the
terms of the Plan as in effect on the date of the employee's retirement or
termination of employment.

    The Plan, as hereby amended and restated, is subject to shareholder approval
at the 2001 annual meeting of shareholders of the Company. In the event that
shareholder approval is not obtained, the Plan as hereby amended and restated
will be null and void, and the Plan as in effect on December 31, 2000 shall
continue.


 

ARTICLE I. DEFINITIONS AND CONSTRUCTION


     Section  1.01.
Definitions.

    The following terms have the meanings indicated below unless the context in
which the term is used clearly indicates otherwise:

    (a) Account: The record keeping account or accounts maintained to record the
interest of each Participant under the Plan. An Account is established for
record keeping purposes only and not to reflect the physical segregation of
assets on the Participant's behalf, and may consist of such subaccounts or
balances as the Committee may determine to be necessary or appropriate.

    (b) Act: The Securities Act of 1933, as interpreted by regulations and rules
issued pursuant thereto, all as amended and in effect from time to time. Any
reference to a specific provision of the Act shall be deemed to include
reference to any successor provision thereto.

    (c) Annual Bonus Deferral: See Section 1.01(l)(ii).

    (d) Available Investment Option: See Section 5.01(a).

    (e) Base Compensation: The base salary or wage payable by a Participating
Employer for services performed prior to reduction for contributions by the
Participant to this Plan or pre-tax or after-tax contributions by the
Participant to any other employee benefit plan maintained by a Participating
Employer, but exclusive of extraordinary payments such as overtime, bonuses,
meal allowances, reimbursed expenses, termination pay, moving pay, commuting
expenses, severance pay, non-elective deferred compensation payments or
accruals, stock options, the value of employer-provided fringe benefits or
coverage, all as determined in accordance with such uniform rules, regulations
or standards as may be prescribed by the Committee.

    (f) Base Compensation Deferral: See Section 1.01(l)(i).

    (g) Beneficiary: The person or entity designated by a Participant to be his
beneficiary for purposes of this Plan. If a Participant designates his spouse as
a beneficiary, such beneficiary designation automatically shall become null and
void on the date of the Participant's divorce or legal separation from such
spouse. If a valid designation of Beneficiary is not in effect at time of the
Participant's death, the estate of the Participant is deemed to be the sole
Beneficiary. If a Beneficiary dies while entitled to receive distributions from
the Plan, any remaining payments shall be paid to the estate of the Beneficiary.
Beneficiary designations shall be in writing, filed with the Committee, and in
such form as the Committee may prescribe for this purpose.

    (h) Board: The Board of Directors of the Company.

    (i) Code: The Internal Revenue Code of 1986, as interpreted by regulations
and rulings issued pursuant thereto, all as amended and in effect from time to
time. Any reference to a specific provision of the Code shall be deemed to
include reference to any successor provision thereto.

    (j) Committee: The Compensation and Nominating Committee of the Board.

    (k) Company: WPS Resources Corporation, or any successor corporation.

    (l) Deferral: An amount credited, in accordance with a Participant's
election, to the Participant's Account under the Plan in lieu of the current
payment of an equal amount of cash compensation to the Participant.


            (i) Base Compensation Deferral: A Deferral of a portion of a
            Participant's Base Compensation in accordance with Section 2.01.

            (ii) Annual Bonus Deferral: A Deferral of all or a portion of a
            Participant's annual bonus award in accordance with Section 2.02.

            (iii) LTIP Deferral: A Deferral of all or a portion of a
            Participant's performance share award under the WPS Resources
            Corporation 2001 Omnibus Incentive Compensation Plan, in accordance
            with Section 2.03.



    (m) ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.

    (n) Exchange Act: The Securities Exchange Act of 1934, as interpreted by
regulations and rules issued pursuant thereto, all as amended and in effect from
time to time. Any reference to a specific provision of the Exchange Act shall be
deemed to include reference to any successor provision thereto.

    (o) Investment Options: The hypothetical investment accounts described in
Article IV and such other investment options as the Committee may from time to
time determine (which may, but need not, be based upon one or more of the
investment options available under the Wisconsin Public Service Corporation
Administrative Employees Savings Plan).

    (p) Investment Period: See Section 5.01(e).

    (q) LTIP Deferral: See Section 1.01(l)(iii).

    (r) Participant: Subject to Section 2.02, a common law employee of a
Participating Employer who has been designated by the Committee as being
eligible to participate in this Plan and, where the context so requires, a
former employee entitled to receive a benefit hereunder.

    (s) Participating Employer: The Company and any direct or indirect subsidiary
of the Company that, with the consent of the Committee, participates in the Plan
for the benefit of one or more Participants.

    (t) Stock Unit Accounts: The Incentive Stock Unit Account described in
Section 4.03 and the Base Stock Unit Account described in Section 4.04.

    (u) Trust: The WPS Resources Corporation Deferred Compensation Trust or other
funding vehicle which may from time to time be established, as amended and in
effect from time to time.

    (v) WPS Resources Stock: The common stock, $1.00 par value, of the Company.

    (w) WPS Resources Stock Units: The hypothetical shares of WPS Resources Stock
that are credited to the Stock Unit Accounts in accordance with Sections 4.03
and 4.04.

    

Section 1.02.
Construction and Applicable Law.

    (a) Wherever any words are used in the masculine, they shall be construed as
though they were used in the feminine in all cases where they would so apply;
and wherever any words are use in the singular or the plural, they shall be
construed as though they were used in the plural or the singular, as the case
may be, in all cases where they would so apply. Titles of articles and sections
are for general information only, and the Plan is not to be construed by
reference to such items.

    (b) This Plan is intended to be a plan of deferred compensation maintained
for a select group of management or highly compensated employees as that term is
used in ERISA, and shall be interpreted so as to comply with the applicable
requirements thereof. In all other respects, the Plan is to be construed and its
validity determined according to the laws of the State of Wisconsin to the
extent such laws are not preempted by federal law. In case any provision of the
Plan is held illegal or invalid for any reason, the illegality or invalidity
will not affect the remaining parts of the Plan, but the Plan shall, to the
extent possible, be construed and enforced as if the illegal or invalid
provision had never been inserted.


 

ARTICLE II. PARTICIPATION


     Section  2.01.
Eligibility.

    A Participant shall be eligible to participate in the Plan only if the
Participant is employed by a Participating Employer and if the Participant has
been designated for participation by the Committee.

    

Section 2.02.
Certain Transfers of Employment.

    If directed by the Committee, a Participant whose employment is transferred
to a corporation or other entity (the "Transferee Employer") that is
not a Participating Employer, but in which the Company or an affiliate of the
Company holds an ownership interest, then until the earliest to occur of (a) the
date on which the Participant ceases to be employed by such Transferee Employer,
(b) the date on which the Company or an affiliate of the Company no longer holds
an ownership interest in the Transferee Employer, or (c) such other date
determined by the Committee, the Participant shall be treated as if he or she
were still actively employed by a Participating Employer. The foregoing rule
shall apply only for the purpose of determining whether the Participant has
terminated employment for purposes of the distribution provisions of Article VI;
it shall not apply, and the Participant shall not be entitled to make additional
Deferrals, with respect to remuneration attributable to services rendered with
the Transferee Employer. The Committee may promulgate such additional rules as
may be necessary or desirable in connection with any such transfer of
employment.


 

ARTICLE III. DEFERRALS OF COMPENSATION


     Section  3.01.
Deferrals Of Base Compensation.

    (a) Initial Deferral Election. A Participant may elect, in such form
and manner as the Committee may prescribe, to defer payment of a portion of the
Base Compensation that would otherwise be paid to the Participant. A
Participant's election shall specify the percentage (in increments of 1% to a
maximum of 75% or such lesser amount or percentage as may be established by the
Committee) of the Participant's Base Compensation that the Participant wishes to
defer. A validly executed election shall become effective with respect to Base
Compensation earned by the Participant in the first payroll period that
commences on or after the date on which the Participant's deferral election is
received and accepted by the Committee, or as soon thereafter as practicable. A
Participant's deferral election, once effective, shall remain in effect until
modified by the Participant in accordance with subsection (b) below or otherwise
revoked in accordance with Plan rules.

    (b) Revised Deferral Election. A Participant may modify his then
current deferral election by filing a revised election form, properly completed
and signed, with the Committee. A validly executed revised election will be
effective with respect to Base Compensation earned by the Participant with the
first payroll period commencing on or after the date on which the Participant's
revised deferral election is received and accepted by the Committee, or as soon
thereafter as practicable. A Participant's revised deferral election, once
effective, shall remain in effect until again modified by the Participant under
this subsection (b) or otherwise revoked in accordance with Plan rules.

    

Section 3.02.
Deferrals of Annual Bonus Awards.

    (a) Election of Bonus Deferrals. A Participant may irrevocably elect,
in such form and manner as the Committee may prescribe, to defer payment of a
portion of the annual cash bonus that is awarded and that would otherwise be
paid to the Participant with respect to any year. A Participant's election shall
specify the percentage (in increments of 1% to a maximum of 100% or such lesser
amount or percentage as may be established by the Committee) of the
Participant's annual cash bonus that the Participant wishes to defer. A validly
executed election shall become effective with respect to the annual bonus that
may be awarded to the Participant with respect to a calendar year if the
Participant's deferral election is received and accepted by the Committee on or
before April 1 of that calendar year or within such other period as the
Committee may establish; provided that the Participant's deferral election with
respect to the 2001 annual bonus (that would otherwise be paid in 2002) may be
submitted within 45 days following the date on which shareholders of the Company
approve the Plan at the Company's 2001 annual meeting, or within such other
period as the Committee may establish. A Participant's election to defer an
annual bonus award shall be effective only for the year to which the election
relates, and shall not carry over from year to year.

    

Section 3.03.
Deferral of LTIP Performance Share Awards.

    A Participant may irrevocably elect, in such form and manner as the Committee
may prescribe, to defer payment of a portion of any performance shares awarded
to the Participant under the WPS Resources Corporation 2001 Onmibus Incentive
Compensation Plan. A Participant's election shall specify the whole number of
performance shares (up to 100% of such shares or such lesser number or
percentage as may be established by the Committee) of the Participant's award
that the Participant wishes to defer. A validly executed election shall become
effective with respect to performance shares to be earned by the Participant
with respect to any performance period under the WPS Resources Corporation 2001
Omnibus Incentive Compensation Plan if the Participant's deferral election is
received and accepted by the Committee on or before April 1 of the calendar year
in which the performance period begins, or within such other period as the
Committee may establish; provided that the Participant's deferral election with
respect to the performance period that begins in 2001 may be submitted within 45
days following the date on which shareholders of the Company approve the Plan at
the Company's 2001 annual meeting, or within such other period as the Committee
may establish. A Participant's election to defer a performance share award shall
be effective only for the performance period to which the election relates, and
a Participant's election does not carry over from performance period to
performance period. A Participant's LTIP Deferral will be automatically credited
to the Participant's Incentive Stock Unit Account.

    

Section 3.04.
Matching Contribution Credits.

    (a) Allocation of Credits. A Participant who is a participant in the
Wisconsin Public Service Corporation Administrative Employees' Savings Plan
("Savings Plan") and who makes Base Compensation Deferrals and/or
Annual Bonus Deferrals under this Plan shall be entitled to a matching
contribution credit, determined as of December 31 of each year, equal to the
difference (if any) between:


            (i) The value of the matching contribution that the Participant
            would have received under the Savings Plan, if Base Compensation
            Deferrals and Annual Bonus Deferrals made by the Participant under
            this Plan were instead treated as "compensation" under the
            Savings Plan for purposes of applying the Participant's deferral
            election under the Savings Plan; provided that all limits and
            restrictions otherwise imposed under the Savings Plan, including the
            maximum compensation limit under Section 401(a)(17) of the Code,
            shall continue to apply; and

            (ii) The value of the matching contribution actually received by
            the Participant for that year under the Savings Plan.



    (b) Investment of Credits. A Participant's matching contribution
credit will be automatically credited to the Participant's Incentive Stock Unit
Account.

    

Section 3.05.
Involuntary Termination of Deferral Elections.

    A Participant's deferral elections shall be automatically revoked upon the
Participant's termination of employment from the Participating Employers, unless
the Committee determines otherwise. In addition, if the Committee determines
that the Participant is no longer eligible to participate in the Plan or that
revocation of a Participant's eligibility is necessary or desirable in order for
the Plan to qualify under ERISA as a plan of deferred compensation for a select
group of management or highly compensated employees.


ARTICLE IV. HYPOTHETICAL INVESTMENT OPTIONS


     Section  4.01.
Reserve Account A.

    (a) Limited Purpose Account. Reserve Account A is limited to
compensation deferred by a Participant prior to January 1, 1996, together with
attributed earnings on such deferrals through December 31, 2000. Except for
attributed earnings as described below, no further deferrals, contributions or
credits of any kind will be made to this account on behalf of a Participant.

    (b) Crediting of Interest Equivalent. As of the end of each Plan Year,
the Account will be credited with an interest equivalent on the balance in the
account from time to time during the year. The annual interest equivalent will
be the sum (on a non-compounded basis) of the attributed earnings for each month
during the year based on the account balance as of the last day of the month.
Unless modified by the Committee, the interest equivalent rate for any month
will be the greater of:


            (i) one-half of one percent (0.5%); or

            (ii) one-twelfth (1/12) of the consolidated return on common
            shareholders' equity of the Company and all consolidated
            subsidiaries (ROE); provided, however, that unless the Committee
            determines otherwise, this Paragraph (ii) will not apply to a former
            Participant who terminates employment with a Participating Employer
            prior to attainment of age 55 and prior to the occurrence of a
            Change in Control (as defined in Section 8.01). For the months of
            April through September, ROE means the consolidated return on equity
            of the Company and all consolidated subsidiaries for the twelve (12)
            months ended on the preceding March 31 as calculated pursuant to the
            Company's standard accounting procedure for financial reporting to
            shareholders. For the months October through March, ROE means return
            on equity as described above for the twelve (12) months ended on the
            preceding September 30.



    (c) Revised Rate. Subject to Article VIII, the Committee may revise
the interest equivalent rate or the manner in which it is calculated, but in no
event shall the rate be less than six percent (6%) per annum. Any such revised
rate shall be effective with the calendar month following such action by the
Committee.

    

Section 4.02.
Reserve Account B.

    (a) Availability. Reserve Account B is an Available Investment Option
with respect to the deemed investment of Base Compensation Deferrals and Annual
Bonus Deferrals. It is credited with earnings equivalent based upon a percentage
of the Company's return on equity for the year.

    (b) Crediting of Interest Equivalent. As of the end of each calendar
quarter, the account will be credited with an interest equivalent on the balance
in the account from time to time during the year. The quarterly interest
equivalent will be the sum (on a non-compounded basis) of the attributed
earnings for each month during the quarter based on the account balance as of
the last day of each month. Unless modified by the Committee, the interest
equivalent rate for any month will be the greater of:


            (i) one-half of one percent (0.5%); or

            (ii) seventy percent (70%) of one-twelfth (1/12) of the
            consolidated return on common shareholders equity of the Company and
            all consolidated subsidiaries (ROE); provided, however, that unless
            the Committee determines otherwise, this Paragraph (ii) will not
            apply to a former Participant who terminates employment with a
            Participating Employer prior to attainment of age 55 and prior to
            the occurrence of a Change in Control (as defined in
            Section 8.01). For the months of April through September, ROE
            means the consolidated return on equity of the Company and all
            consolidated subsidiaries for the twelve (12) months ended on the
            preceding March 31 as calculated pursuant to the Company's standard
            accounting procedure for financial reporting to shareholders. For
            the months October through March, ROE means return on equity as
            described above for the twelve (12) months ended on the preceding
            September 30.



    (c) Revised Rate. Subject to Article VIII, the Committee may revise
the interest equivalent rate or the manner in which it is calculated, but in no
event shall the rate be less than six percent (6%) per annum. Any such revised
rate shall be effective with the calendar month following such action by the
Committee.

    

Section 4.03.
Incentive Stock Unit Account.

    (a) Limited Purpose "Buy Only" Account. The Incentive Stock
Unit Account is a "buy only" account limited to (i) Annual Bonus
Deferrals that the Participant elects to be credited to the Incentive Stock Unit
Account in accordance with Section 5.01(c), (ii) LTIP Deferrals pursuant to
Section 3.03, and (iii) matching contribution credits pursuant to Section 3.04.

    (b) Conversion to WPS Stock Units. As of the end of each month, all
eligible Deferrals made by or on behalf of a Participant during that month and
allocated to the Incentive Stock Unit Account and, for the month of December,
all of a Participant's matching contribution credits under Section 3.04 (the
"Incentive Stock Unit Convertible Amount") are converted, for record
keeping purposes, into whole and fractional WPS Resources Stock Units, with
fractional units calculated to four decimal places. The conversion shall be
accomplished by dividing each Participant's Incentive Stock Unit Convertible
Amount by the average purchase price of all shares of WPS Resources Stock
purchased during that month by or on behalf of the Trust and the WPS Resources
Corporation Stock Investment Plan. Likewise, any dividends that would have been
payable on the WPS Resources Stock Units credited to a Participant's Incentive
Stock Unit Account had such Units been actual shares of WPS Resources Stock
shall be converted, for record keeping purposes, into whole and fractional WPS
Resources Stock Units based on the average purchase price of all shares of WPS
Resources Stock purchased by or on behalf of the Trust and the WPS Resources
Corporation Stock Investment Plan during the month in which the dividend is
paid. Notwithstanding the foregoing, if for any month there are no open-market
purchases by or on behalf of the Trust and the WPS Resources Corporation Stock
Investment Plan, the conversion shall be accomplished based upon the closing
price of a share of WPS Resources Stock on the last date on the applicable month
on which a share of WPS Resources Stock was traded, as reported in the Wall
Street Journal's New York Stock Exchange Composite Transaction listing.

    

Section 4.04.
Base Stock Unit Account.

    (a) Availability. The Base Stock Unit Account is an Available
Investment Option with respect to the deemed investment of Base Compensation
Deferrals.

    (b) Conversion to WPS Stock Units. As of the end of each month, all
eligible Deferrals made by or on behalf of a Participant during that month and
allocated to the Base Stock Unit Account (the "Base Stock Unit Convertible
Amount") are converted, for record keeping purposes, into whole and
fractional WPS Resources Stock Units, with fractional units calculated to four
decimal places. The conversion shall be accomplished by dividing each
Participant's Base Stock Unit Convertible Amount by the average purchase price
of all shares of WPS Resources Stock purchased during that month by or on behalf
of the Trust and the WPS Resources Corporation Stock Investment Plan. Likewise,
any dividends that would have been payable on the WPS Resources Stock Units
credited to a Participant's Base Stock Unit Account had such Units been actual
shares of WPS Resources Stock shall be converted, for record keeping purposes,
into whole and fractional WPS Resources Stock Units based on the average
purchase price of all shares of WPS Resources Stock purchased by or on behalf of
the Trust and the WPS Resources Corporation Stock Investment Plan during the
month in which the dividend is paid. Notwithstanding the foregoing, if for any
month there are no open-market purchases by or on behalf of the Trust and the
WPS Resources Corporation Stock Investment Plan, the conversion shall be
accomplished based upon the closing price of a share of WPS Resources Stock on
the last date on the applicable month on which a share of WPS Resources Stock
was traded, as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing.

    (c) Conversion from WPS Stock Units. If a Participant elects under
Section 5.01(f) to reallocate all or any portion of his Base Stock Unit Account
among the other Available Investment Options, the WPS Resources Stock Units to
which such election relates shall be converted, for record keeping purposes,
into an amount equal to the product of such units and the closing price of a
share of WPS Resources Stock, on the most recent date prior to the effective
date of such reallocation on which a share of WPS Resources Stock was traded, as
reported in the Wall Street Journal's New York Stock Exchange Composite
Transaction listing.

    (d) Securities Law Restrictions. Notwithstanding anything to the
contrary herein, all elections under Section 5.01(f) by a Participant who is
subject to Section 16 of the Exchange Act are subject to review by the Committee
prior to implementation. Further, the following reallocation transactions under
Section 5.01(f) by a Participant who is subject to Section 16 of the Exchange
Act are prohibited: (i) elections to reallocate the deemed
investment of the affected Participant's Account into WPS Resources Stock Units
within six (6) months of an election to reallocate deemed investments out of WPS
Resources Stock Units; and (ii) elections to reallocate the deemed investment of
the affected Participant's Account out of WPS Resources Stock Units within six
(6) months of an election to reallocate deemed investments into WPS Resources
Stock Units (collectively, "Prohibited Transactions"). All Prohibited
Transactions are void. In accordance with Section 9.02, the Committee may
restrict additional transactions, or impose other rules and procedures, to the
extent deemed desirable by the Committee in order to comply with the Exchange
Act.


 

ARTICLE V. ACCOUNTING AND HYPOTHETICAL INVESTMENT ELECTIONS


     Section  5.01.
Hypothetical Investment of Participant Accounts.

    (a) Available Investment Options.


            (i) For purposes of directing the deemed investment of Base
            Compensation Deferrals under subsection (b) below and for purposes
            of reallocating the deemed investment of the Participant's Account
            under subsection (f) below, the Available Investment Options shall
            be all of the Investment Options other than Reserve Account A and
            the Incentive Stock Unit Account.

            (ii) For purposes of directing the deemed investment of Annual
            Bonus Deferrals under subsection (c) below, the Available Investment
            Options shall be all of the Investment Options other than Reserve
            Account A and the Base Stock Unit Account.



    (b) Deemed Investment of Base Compensation Deferrals. In accordance
with uniform rules prescribed by the Committee, each Participant shall
designate, in writing or in such other manner as the Committee may prescribe,
how Base Compensation Deferrals made while the designation is in effect are
credited among the Available Investment Options. When selecting more than one
Available Investment Option, the Participant shall designate, in whole multiples
of 10% or such other percentage determined by the Committee, the percentage of
his or her Base Compensation Deferrals to be credited to each Available
Investment Option. If the Participant fails to make a timely and complete
investment designation, he or she shall be deemed to have elected that 100% of
his or her Base Compensation Deferrals be credited to Reserve Account B or such
other of the Available Investment Options specified by the Committee for this
purpose. A Participant's election or deemed election shall become effective
beginning with the first payroll period commencing on or after the date on which
the election is received and accepted by the Committee, and shall remain in
effect unless and until modified by a subsequent election that becomes effective
in accordance with the rules of this subsection.

    (c) Deemed Investment of Annual Bonus Deferrals. In accordance with
uniform rules prescribed by the Committee, each Participant shall designate, in
writing or in such other manner as the Committee may prescribe, how Annual Bonus
Deferrals made while the designation is in effect are credited among the
Available Investment Options. When selecting more than one Available Investment
Option, the Participant shall designate, in whole multiples of 10% or such other
percentage determined by the Committee, the percentage of his or her Annual
Bonus Deferrals to be credited to each Available Investment Option; provided,
that with respect to any portion of the Annual Bonus Deferral that the
Participant allocates to the Incentive Stock Unit Account, the amount allocated
to such account will be 105% of the amount designated by the Participant for
deferral into the Incentive Stock Unit Account. If the Participant fails to make
a timely and complete investment designation, he or she shall be deemed to have
elected that 100% of his or her Annual Bonus Deferral be credited to Reserve
Account B or such other Investment Option specified by the Committee for this
purpose. A Participant's election or deemed election shall become effective with
respect to annual bonus amounts awarded on or after the date on which the
election is received and accepted by the Committee, and shall remain in effect
unless and until modified by a subsequent election that becomes effective in
accordance with the rules of this subsection. 

    (d) Deemed Investment of LTIP Deferrals. LTIP Deferrals under Section
3.03 and matching contribution credits under Section 3.04 are credited to the
Incentive Stock Unit Account. The Participant is not permitted to make an
investment election with respect to LTIP Deferrals and matching contribution
credits.

    (e) Allocation of Deemed Investment Gain or Loss. On a quarterly basis
or such other basis as the Committee may prescribe (the "Investment
Period"), the Account of each Participant will be credited (or charged)
based upon the investment gain (or loss) that the Participant would have
realized with respect to his or her Account had the Account been invested in
accordance with the terms of the Plan and where applicable, the Participant's
written election. Subject to the special rules set forth in Article IV with
respect to Reserve Account A, Reserve Account B, the Incentive Stock Unit
Account and the Base Stock Unit Account, the credit (or charge) shall be the
sum, separately calculated for each of the Investment Options, of the product
obtained by multiplying (i) the portion (if any) of the Participant's Account as
of the first day of the Investment Period that is deemed to have been invested
in each Investment Option, and (ii) the rate of return experienced by that
Investment Option during the Investment Period.  The Committee, in its
discretion, may prescribe alternate rules for the valuation of Participant
Accounts, including, without limitation, the application of unit accounting
principles.

    (f) Reallocation of Account. Subject to Section 4.04(d), and in
accordance with rules prescribed by the Committee, each Participant may elect to
reallocate his or her Account (other than the portion deemed to be invested in
Reserve Account A or the Incentive Stock Unit Account) among the Available
Investment Options. When selecting more than one Investment Option, the
Participant shall designate, in whole multiples of 10% or such other percentage
determined by the Committee, the percentage of his or her Account (other than
the portion that is deemed to be invested in Reserve Account A or the Incentive
Stock Unit Account) that is deemed to be invested in each Available Investment
Option after the investment reallocation is given effect. A Participant's
reallocation election made in any Investment Period shall become effective on
the first day of the next Investment Period, or as soon thereafter as is
practicable, and shall remain in effect unless and until modified by a
subsequent election that becomes effective in accordance with the rules of this
subsection. Other than a reallocation of a Participant's Account pursuant to a
revised investment election submitted by the Participant, the deemed investment
allocation of a Participant will not be adjusted to reflect differences in the
relative investment return realized by the various hypothetical Investment
Options that the Participant has designated.

    (g) The foregoing provisions of this Section shall be effective on the first
day of the month coincident with or next following the date on which
shareholders of the Company approve the Plan as hereby amended and restated, or
as soon thereafter as is practicable. Prior to implementation of the terms and
conditions of this Section, a Participant's Account shall be credited with
hypothetical investment gain or loss in accordance with the terms of the Plan as
in effect on December 31, 2000.

    

Section 5.02.
Accounts are For Record Keeping Purposes Only.

    Plan Accounts and the record keeping procedures described herein serve solely
as a device for determining the amount of benefits accumulated by a Participant
under the Plan, and shall not constitute or imply an obligation on the part of a
Participating Employer to fund such benefits. In any event, a Participating
Employer may, in its discretion, set aside assets equal to part or all of such
account balances and invest such assets in Company stock, life insurance or any
other investment deemed appropriate. Any such assets, including WPS Resources
Stock and any other assets held under the Trust, shall be and remain the sole
property of the Company and except to the extent that the Trust authorizes a
Participant to direct the trustee with respect to the voting of WPS Resources
Stock held in the Trust, a Participant shall have no proprietary rights of any
nature whatsoever with respect to such assets.


 

ARTICLE VI. DISTRIBUTION OF ACCOUNTS


     Section  6.01.
Distribution Election.

    (a) Election. A Participant, at the time he commences participation in
the Plan, shall make a distribution election with respect to his Account. The
election shall be in such form as the Committee may prescribe, and shall specify
the distribution commencement date, the distribution period, and the
distribution method applicable following the Participant's death. Any such
election shall be consistent with the following rules (or where the Participant
fails to make a selection, in accordance with the default rules set forth
below):


            (i) Distribution Commencement Date. Unless the Participant
            has selected a later commencement date (which in no event shall be
            later than the first distribution period following the Participant's
            attainment of age 72), distribution of a Participant's Accounts will
            commence within 60 days following the end of the calendar year in
            which the Participant terminates employment or service from all
            Participating Employers. For purposes of this Plan, a Participant
            who is disabled shall be deemed to have retired or terminated at the
            conclusion of benefits under all disability income plans sponsored
            by a Participating Employer or to which a Participating Employer
            contributes, unless otherwise determined by the Committee. Further,
            a Participant who ceases employment with a Participating Employer in
            connection with an early retirement (reduction in force) program
            sponsored by the Participating Employer shall, if a participant in
            the Wisconsin Public Service Administrative Employees Retirement
            Plan, be deemed to have retired upon commencement of retirement
            benefits under such plan.

            (ii) Distribution Period. Distributions will be made in 1
            to 15 annual installments, as elected by the Participant.

            (iii) Distribution of Remaining Account Following
            Participant's Death. In the event of the Participant's death,
            the Participant's remaining undistributed interest will be
            distributed to the Beneficiary designated by the Participant in
            either a single sum payment or in installments, as elected by the
            Participant. If the Participant has elected that death benefits be
            paid in a single sum, the payment shall be made no later than March
            1 following the calendar year in which occurs the Participant's
            death. If the Participant has elected that death benefits be paid in
            installments, (A) any installments previously commenced to the
            Participant shall continue to the Beneficiary and (B) if installment
            distributions had not commenced as of the date of the Participant's
            death, payments over the installment period elected by the
            Participant shall commence to the Beneficiary no later than March 1
            following the calendar year in which occurs the Participant's death.



    (b) Effectiveness of Election. A distribution election shall be deemed
made only when it is received and accepted as complete by the Committee, and
shall remain in effect until modified by the Participant in accordance with
Section 6.02 below or otherwise revoked in accordance with Plan rules.

    

Section 6.02.
Modified Distribution Election.

    A Participant may from time to time modify his distribution election by
filing a revised distribution election, properly completed and signed, with the
Committee. However, a revised distribution election will be given effect only if
the Participant remains employed by a Participating Employer for twelve (12)
consecutive months following the date that the revised election is received and
accepted as complete by the Committee.

    

Section 6.03.
Calculation of Annual Distribution Amount.

    (a) Pre-2001 Retirees. For any Participant whose retirement or
termination date is prior to January 1, 2001, distribution of the Participant's
Account will be calculated and made under the distribution provisions of the
Plan applicable to the Participant on the date of the Participant's retirement
or termination of employment.

    (b) Post-2000 Retirees. For a Participant who retires or terminates
employment after December 31, 2000, the annual distribution amount, unless the
Committee specifies a different or alternate method, shall be calculated as
follows:


            (i) The annual distribution amount for the Participant's Account,
            other than the portion of the Account that is deemed to be invested
            in the Stock Unit Accounts (the "Distributable Account"),
            shall be determined by dividing (A) the aggregate balance in the
            Distributable Account as of January 1 of the year for which the
            distribution is being made, by (B) the number of installment
            payments remaining to be made under the distribution period selected
            by the Participant. Distributions shall be made in cash. The amount
            of any distribution under this Paragraph (i) will be charged
            pro-rata against the Participant's interest in each Investment
            Option comprising the Distributable Account. Notwithstanding the
            foregoing, the last installment payment of the Distributable Account
            shall be adjusted to take into account deemed investment gains or
            losses for the period between the January 1 valuation date and
            the date of actual payment according to such methods and procedures
            adopted by the Committee.

            (ii) The annual distribution amount for each of the Stock Unit
            Accounts shall be determined on a share basis by dividing (A) the
            number of WPS Resources Stock Units credited to the relevant Stock
            Unit Account as of January 1 of the year for which the distribution
            is being made (subject to subsequent adjustment under
            Section 7.01), by (B) the number of installment payments
            remaining to be made under the distribution period selected by the
            Participant, and then rounding the quotient obtained for all but the
            final installment to the next lowest whole number of WPS Resources
            Stock Units. The Committee will then direct that the Participant
            receive shares of WPS Resources Stock and/or cash equal to the
            annual distribution amount. For any portion of the distribution that
            the Committee directs be satisfied by making a cash payment to the
            Participant, the cash payment shall be determined by multiplying the
            annual distribution amount (or the portion of the annual
            distribution amount being satisfied in cash) by the closing price of
            WPS Resources Stock on January 21 of the year in which the
            distribution is being made, as such share price is reported in the
            Wall Street Journal's New York Stock Exchange Composite Transactions
            listing. If January 21 falls on a Saturday, Sunday or holiday, the
            calculation of the cash portion of the distributions will be made
            based upon the closing price as reported for the immediately
            preceding business day. The amount of any distribution under this
            Paragraph (ii) will be charged pro-rata against the Participant's
            interest in the Incentive Stock Unit Account and the Base Stock Unit
            Account.



    

Section 6.04.
Time of Distribution.

    Subject to the provisions of Sections 7.01 and 8.02, each distribution
of WPS Resources Stock made to a Participant (or Beneficiary) shall be
distributed on January 22 (or if January 22 falls on a Saturday, Sunday or
holiday, the immediately following business day). For distribution and tax
reporting purposes, the value of WPS Resources Stock distributed shall equal the
number of shares distributed multiplied by the closing price of WPS Resources
Stock on January 21 (or if January 21 falls on a Saturday, Sunday or holiday,
the immediately preceding business day) of the year in which the distribution is
being made as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing. The cash portion of any distribution will be made
no later than March 1 of the year for which the distribution is being made.

    

Section 6.05.
Other Distribution Rules.

    (a) Limit on Shares. Subject to adjustment as provided in subsection
(c) below, the total number of authorized but previously unissued shares of WPS
Resources Stock which may be distributed to Participants or Beneficiaries
pursuant to the Plan shall be one hundred fifty thousand (150,000), which number
shall not be reduced by or as a result of (i) any cash distributions pursuant to
the Plan or (ii) the distribution to Participants or Beneficiaries pursuant to
the Plan of any outstanding shares of WPS Resources Stock purchased by or on
behalf of the Trust.

    (b) Tax Withholding. The amount actually distributed to the
Participant will be reduced by applicable income tax withholding. Unless the
Participant has made a contrary election, income tax on the entire annual
distribution amount will be withheld from the cash portion of the distribution,
and WPS Resources Stock will be used to satisfy withholding obligations only to
the extent that the cash portion of the distribution is insufficient for this
purpose.

    (c) Adjustments to Stock. In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock dividend,
split-up, share combination or other change in the corporate structure of the
Company or a Participating Employer affecting WPS Resources Stock, such
adjustment shall be made in the number and class of shares which may be
distributed pursuant to the Plan as may be determined to be appropriate and
equitable by the Committee in its sole discretion.


 

ARTICLE VII. RULES WITH RESPECT TO WPS RESOURCES STOCK

AND WPS RESOURCES STOCK UNITS


     Section  7.01.
Transactions Affecting WPS Resources Stock.

    In the event of any merger, share exchange, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in corporate
structure of the Company or a Participating Employer affecting WPS Resources
Stock, the Committee may make appropriate equitable adjustments with respect to
the WPS Resources Stock Units (if any) credited to the Stock Unit Accounts of
each Participant, including without limitation, adjusting the date as of which
such units are valued and/or distributed, as the Committee determines is
necessary or desirable to prevent the dilution or enlargement of the benefits
intended to be provided under the Plan.

    

Section 7.02.
No Shareholder Rights With Respect to WPS Resources Stock Units.

    Participants shall have no rights as a stockholder pertaining to WPS
Resources Stock Units credited to their Accounts. No WPS Resources Stock Unit
nor any right or interest of a Participant under the Plan in any WPS Resources
Stock Unit may be assigned, encumbered, or transferred, except by will or the
laws of descent and distribution. The rights of a Participant hereunder with
respect to any WPS Resources Stock Unit are exercisable during the Participant's
lifetime only by him or his guardian or legal representative.


 

ARTICLE VIII. SPECIAL RULES APPLICABLE IN THE EVENT OF A
CHANGE IN

 CONTROL OF THE COMPANY


     Section  8.01.
Definitions.

    For purposes of this Article VIII, the following terms shall have the
following respective meanings:

    (a) 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.

    (b) A person shall be deemed to be the "Beneficial Owner" of any
securities:


            (i) 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, or under-standing, or upon the
            exercise of conversion rights, exchange rights, or other 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;

            (ii) 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,
            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

            (iii) 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 Paragraph (ii) above)
            or disposing of any voting securities of the Company.



    (c) A "Change in Control" shall be deemed to have occurred if:


            (i) 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;

            (ii) one-half or more of the members of the Board are not
            Continuing Directors;

            (iii) 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 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;

            (iv) 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;

            (v) 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

            (vi) the shareholders of the Company approve any plan or proposal
            for the liquidation or dissolution of the Company.



    (d) "Continuing Directors" means (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.

    (e) "Person" means 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.

    

Section 8.02.
Amendments in Connection with a Change in Control.

    (a) Board Authority to Amend or Terminate Plan. Prior to the
occurrence of a Change in Control, the Board may exercise its authority under
Section 9.06, including, to the extent deemed necessary or desirable by the
Board in anticipation of a Change in Control, any of the following actions:


            (i) The Board may amend the Plan to eliminate WPS Resources
            Stock Units and cause the value of such units as of the Amendment
            Date (such value to be determined under Section 4.04(c)) to be
            reallocated to Reserve Account B. The term "Amendment
            Date" means the date on which an amendment to the Plan is
            validly adopted or the date on which the amendment is or purports to
            be effective, whichever is later.

            (ii) The Board may terminate the Plan and require that all
            benefits accrued to the date of termination (or such later date as
            the Board specifies) be distributed to Participants (or
            Beneficiaries), in a single sum regardless of a Participant's prior
            election as to the form and timing of benefit payments.



    (b) Automatic Amendments. Unless terminated by the Board pursuant to
subsection (a)(ii), the Plan shall automatically be amended upon a Change
in Control to provide that:


            (i) the rate of interest equivalent to be credited with respect
            to Reserve Account A for each month following the Change in Control
            shall be the greater of (A) the rate of interest equivalent
            otherwise applicable with respect to Reserve Account A if such
            amount were calculated based upon the consolidated return on common
            shareholders equity of the Company (including for this purpose any
            successor corporation that is the survivor of a merger with the
            Company or any successor to that corporation) and all subsidiaries,
            and (B) a rate equal to two (2) percentage points above the prime
            lending rate at Firstar Bank, N.A. (or any successor thereto) as of
            the last business day of that month; and

            (ii) the rate of interest equivalent to be credited with respect
            to Reserve Account B for each month following the Change in Control
            shall be the greater of (A) the rate of interest equivalent
            otherwise applicable with respect to Reserve Account B if such
            amount were calculated based upon the consolidated return on common
            shareholders equity of the Company (including for this purpose any
            successor corporation that is the survivor of a merger with the
            Company or any successor to that corporation) and all subsidiaries,
            and (B) a rate equal to two (2) percentage points above the prime
            lending rate at Firstar Bank, N.A. (or any successor thereto) as of
            the last business day of that month. The minimum rate of interest
            equivalent under clause (B) shall cease to apply on the third
            anniversary of the Change in Control in the event that the
            Participant is actively employed by the Company (or any subsidiary
            or affiliate of the Company) on such date.



    (c) Prohibition on Certain Amendments. Notwithstanding the foregoing,
on or after the effective date of a Change in Control, the Board or Company may
not, without the written consent of the affected Participant (or in the case of
a deceased Participant, the Participant's Beneficiary) amend the Plan or take an
action to terminate the Plan that would:


            (i) Result in a decrease in the number of, or a change in the
            type of, Available Investment Options that were made available under
            the Plan immediately prior to the Change of Control; or

            (ii) Cause the Accounts to be valued under Section 5.01(e) less
            frequently than quarterly; or

            (iii) Impair or otherwise limit a Participant's rights to
            reallocate his Accounts under Section 5.01(f) as in effect on the
            date immediately prior to the Change in Control; or

            (iv) Decrease the interest rate credited under Reserve Account A
            or Reserve Account B as determined pursuant to subsection (b) above,
            except as specifically provided therein; or

            (v) Eliminate the distribution options made available under
            Section 6.02 or otherwise terminate any distribution elections then
            in effect.



    

Section 8.03.
Maximum Payment Limitation.

    (a) Limit on Payments. Except as provided in subsection (b) below, if
any portion of the payments or benefits described in this Plan or under any
other agreement with or plan of the Company (in the aggregate, "Total
Payments"), would constitute an "excess parachute payment", then
the Total Payments to be made to the Participant shall be reduced such that the
value of the aggregate Total Payments that the Participant is entitled to
receive shall be one dollar ($1) less than the maximum amount which the
Participant may receive without becoming subject to the tax imposed by Section
4999 of the Code or which the Company may pay without loss of deduction under
Section 280G(a) of the Code; provided that this Section shall not apply in the
case of a Participant who has in effect a valid employment contract providing
that the Total Payments to the Participant shall be determined without regard to
the maximum amount allowable under Section 280G of the Code. The terms
"excess parachute payment" and "parachute payment" shall
have the meanings assigned to them in Section 280G of the Code, and such
"parachute payments" shall be valued as provided therein. Present
value shall be calculated in accordance with Section 280G(d)(4) of the Code.
Within forty (40) days following delivery of notice by the Company to the
Participant of its belief that there is a payment or benefit due the Participant
which will result in an excess parachute payment as defined in Section 280G of
the Code, the Participant and the Company, at the Company's expense, shall
obtain the opinion (which need not be unqualified) of nationally recognized tax
counsel selected by the Company's independent auditors and acceptable to the
Participant in his sole discretion (which may be regular outside counsel to the
Company), which opinion sets forth (A) the amount of the Base Period Income, (B)
the amount and present value of Total Payments and (C) the amount and present
value of any excess parachute payments determined without regard to the
limitations of this Section. As used in this Section, the term "Base Period
Income" means an amount equal to the Participant's "annualized
includible compensation for the base period" as defined in Section
280G(d)(1) of the Code. For purposes of such opinion, the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code, which determination shall be evidenced in a certificate of
such auditors addressed to the Company and the Participant. Such opinion shall
be addressed to the Company and the Participant and shall be binding upon the
Company and the Participant. If such opinion determines that there would be an
excess parachute payment, the payments hereunder that are includible in Total
Payments or any other payment or benefit determined by such counsel to be
includible in Total Payments shall be reduced or eliminated as specified by the
Participant in writing delivered to the Company within thirty days of his
receipt of such opinion or, if the Participant fails to so notify the Company,
then as the Company shall reasonably determine, so that under the bases of
calculations set forth in such opinion there will be no excess parachute
payment. If such legal counsel so requests in connection with the opinion
required by this Section, the Participant and the Company shall obtain, at the
Company's expense, and the legal counsel may rely on in providing the opinion,
the advice of a firm of recognized executive compensation consultants as to the
reasonableness of any item of compensation to be received by the Participant. If
the provisions of Sections 280G and 4999 of the Code (or any successor
provisions) are repealed without succession, then this Section shall be of no
further force or effect.

    (b) Employment Contract Governs. The provisions of subsection (a)
above shall not apply to a Participant whose employment is governed by an
employment contract that provides for Total Payments in excess of the limitation
described in subsection (a) above.

    

Section 8.04.
Resolution of Disputes.

    If, after a Change in Control, (a) a dispute arises with respect to the
enforcement of the Participant's rights under the Plan, or (b) any legal
proceeding shall be brought to enforce or interpret any provision contained in
the Plan or to recover damages for breach of the Plan, in either case so long as
the Participant is not acting in bad faith or otherwise pursuing a course of
action that a reasonable person would determine to be frivolous, the Participant
shall recover from the Company any reasonable attorneys' fees and necessary
costs and disbursements incurred as a result of such dispute or legal proceeding
("Expenses"), and prejudgment interest on any money judgment obtained
by the Participant calculated at the rate of interest announced by Firstar Bank
Milwaukee, Milwaukee, Wisconsin (or any successor thereto), from time to time as
its prime or base lending rate from the date that payments to the Participant
should have been made under this Plan. Within ten (10) days after the
Participant's written request therefor, the Company shall pay to the
Participant, or such other person or entity as the Participant may designate in
writing to the Company, the Participant's Expenses in advance of the final
disposition or conclusion of any such dispute or legal proceeding. In the case
of a deceased Participant, this Section shall apply with respect to the
Participant's Beneficiary or estate.


 

ARTICLE IX. GENERAL PROVISIONS


     Section  9.01.
Administration.

    The Committee shall administer and interpret the Plan and supervise
preparation of Participant elections, forms, and any amendments thereto. To the
extent necessary to comply with applicable conditions of Rule 16b-3, the
Committee shall consist of not less than two members of the Board, each of whom
is also a director of the Company and qualifies as a "non-employee
director" for purposes of Rule 16b-3. If at any time the Committee shall
not be in existence or not be composed of members of the Board who qualify as
"non-employee directors", then all determinations affecting
Participants who are subject to Section 16 of the Exchange Act shall be made by
the full Board, and all determinations affecting other Participants shall be
made by the Board or an officer of the Board. The Committee may, in its
discretion, delegate any or all of its authority and responsibility; provided
that the Committee shall not delegate authority and responsibility with respect
to non-ministerial functions that relate to the participation by Participants
who are subject to Section 16 of the Exchange Act at the time any such delegated
authority or responsibility is exercised. To the extent of any such delegation,
any references herein to the Committee shall be deemed references to such
delegee. Interpretation of the Plan shall be within the sole discretion of the
Committee and shall be final and binding upon each Participant and Beneficiary.
The Committee may adopt and modify rules and regulations relating to the Plan as
it deems necessary or advisable for the administration of the Plan. If any
delegee of the Committee shall also be a Participant or Beneficiary, any
determinations affecting the delegee's participation in the Plan shall be made
by the Committee.

    

Section 9.02.
Restrictions to Comply with Applicable Law.

    (a) General Restrictions. Notwithstanding any other provision of the
Plan, the Company shall have no liability to deliver any shares of WPS Resources
Stock under the Plan or make any payment unless such delivery or payment would
comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity. In addition, transactions under the Plan
are intended to comply with all applicable conditions of Rule 16b-3 under the
Exchange Act. The Committee shall administer the Plan so that transactions under
the Plan will be exempt from Section 16 of the Exchange Act, and shall have the
right to restrict any transaction, or impose other rules and requirements, to
the extent it deems necessary or desirable for such exemption to be met.

    (b) Restriction on Transfer. Shares of WPS Resources Stock issued
under the Plan may not be sold or otherwise disposed of except (i) pursuant to
an effective registration statement under the Act, or in a transaction which, in
the opinion of counsel for the Company, is exempt from registration under the
Act; and (ii) in compliance with state securities laws. Further, as a condition
to issuance of shares of WPS Resources Stock under the Plan, the Participant,
his Beneficiary or his heirs, legatees or legal representatives, as the case may
be, shall execute and deliver to the Company a restrictive stock transfer
agreement in such form, and subject to such terms and conditions, as shall be
reasonably determined or approved by the Committee, which agreement, among other
things, may impose certain restrictions on the sale or other disposition of any
shares of stock acquired under the Plan. The Committee may waive the foregoing
restrictions, in whole or in part, in any particular case or cases or may
terminate such restrictions whenever the Committee determines that such
restrictions afford no substantial benefit to the Company.

    (c) Additional Restrictions; Legends. All shares of WPS Resources
Stock delivered under the Plan shall be subject to such stock transfer orders
and other restrictions as the Committee may deem advisable under the Plan and
any applicable federal or state securities laws, and the Committee may cause a
legend or legends to be put on any certificates to make appropriate references
to such restrictions.

    

Section 9.03.
Claims Procedures.

    (a) If a Participant or Beneficiary believes that he or she has not received
the full benefit provided for in the Plan, the Participant or Beneficiary file a
claim for benefits with the Committee. If the Committee denies the claim, the
Committee shall deliver to the claimant a written explanation setting forth the
specific reasons for the denial, pertinent references to the Plan section on
which the denial is based, such other information as may be pertinent and a
description of the procedures to be followed by the claimant in obtaining a
review of his or her claim. For purposes of this paragraph, the claimant's claim
shall be deemed filed when presented in writing to the Committee and the
Committee's explanation shall be provided to the claimant within ninety (90)
days of the date the claim is filed.

    (b) The claimant shall be provided sixty (60) days following his or her
receipt of the denial of the claim to file a written request for appeal to the
Committee. The claimant and his or her representative may present additional
information or documents pertinent to the Committee's review. The Committee
shall decide the issue on appeal, which decision shall be final, and furnish the
claimant with a written decision of his or her claim on review within sixty (60)
days of receipt of claimant's request for appeal. The Committee's decision shall
indicate the specific reasons for the decision and the pertinent provisions of
the Plan on which the decision is based. If the Committee does not furnish a
written decision to the claimant within such sixty (60) day period, the claim
shall be deemed denied on appeal.

    

Section 9.04.
Participant Rights Unsecured.

    (a) Unsecured Claim. The right of a Participant or his Beneficiary to
receive a distribution hereunder shall be an unsecured claim, and neither the
Participant nor any Beneficiary shall have any rights in or against any amount
credited to his Account or any other specific assets of a Participating
Employer. The right of a Participant or Beneficiary to the payment of benefits
under this Plan shall not be assigned, encumbered, or transferred, except by
will or the laws of descent and distribution. The rights of a Participant
hereunder are exercisable during the Participant's lifetime only by him or his
guardian or legal representative.

    (b) Contractual Obligation. The Company may authorize the creation of
a trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual obligations that may be created
pursuant to the Plan. No obligation of a Participating Employer shall be deemed
to be secured by any pledge of, or other encumbrance on, any property of a
Participating Employer. Nothing contained in this Plan and no action taken
pursuant to its terms shall create or be construed to create a trust of any
kind, or a fiduciary relationship between a Participating Employer and any
Participant or Beneficiary, or any other person.

    

Section 9.05.
Income Tax Withholding.

    No later than the date as of which an amount first becomes includible in the
gross income of the Participant for Federal income tax purposes, the Participant
shall pay or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount.

    

Section 9.06.
Amendment or Termination of Plan.

    There shall be no time limit on the duration of the Plan. Except as otherwise
limited pursuant to Section 8.02, the Board (or where specified herein, the
Committee) may at any time amend or terminate the Plan, including but not
limited to modifying the terms and conditions applicable to (or otherwise
eliminating) Deferrals to be made on or after the amendment or termination date;
provided, however, that no amendment or termination may reduce or eliminate any
Account balance accrued to the date of such amendment or termination (except as
such Account balance may be reduced as a result of investment losses allocable
to such Account).

    

Section 9.07.
Administrative Expenses.

    Costs of establishing and administering the Plan will be paid by the
Participating Employers.

    

Section 9.08.
Effect on Other Employee Benefit Plans.

    Deferrals credited to a Participant's Account under this Plan shall not be
considered "compensation" for the purpose of computing benefits under
any qualified retirement plan maintained by a Participating Employer, but shall
be considered compensation for welfare benefit plans, such as life and
disability insurance programs sponsored by a Participating Employer, unless
otherwise specifically provided by the terms of such plan.

    

Section 9.09.
Successors and Assigns.

    This Plan shall be binding upon and inure to the benefit of the Participating
Employers, their successors and assigns and the Participants and their heirs,
executors, administrators, and legal representatives.