Exhibit 10.10

 



WPS RESOURCES CORPORATION

DEFERRED COMPENSATION PLAN


As Amended and Restated Effective January 1, 2005

 

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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 and non-employee
directors 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, 2005 as set forth herein
to reflect, among other things, the requirements of the American Jobs Creation
Act of 2004 and for the purpose of presenting the Plan to the Company's
shareholders for approval with respect to the number of shares of WPS Resources
Stock authorized for issuance under the Plan.

    Except as expressly provided herein, the Plan, as herein amended and restated
effective January 1, 2005, applies to (i) those employees who are actively
employed by the Company or a Participating Employer on January 1, 2005, and who
have been designated for participation by the Committee, and (ii) non-employee
directors of the Company and designated subsidiaries and affiliates. Except as
expressly provided herein, distribution of benefits to an employee who retired
from or terminated employment with the Company prior to January 1, 2005, or a
director who terminated from service with the Company prior to January 1, 2005,
shall be governed by the terms of the Plan (or predecessor plan) as in effect on
the date of the employee's or director's retirement or termination of
employment or service.

 

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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. To the extent relevant with
respect to any Participant, the Participant's overall Account shall include
the subaccounts and balances identified in Section 5.01, and may consist of such
other 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) Affiliate: A corporation, trade or business that, with the
Company, forms part of a controlled group of corporations, group of trades or
businesses under common control, or affiliated service group within the meaning
of Code Section 414(b), (c) or (m).


    (d) Annual Bonus Deferral: See Section 1.01(m)(iii).


    (e) Available Investment Option: See Section 6.01(a).


    (f) Base Compensation: The base salary or wage payable by a
Participating Employer to an Eligible Employee for services performed prior to
reduction for contributions by the Eligible Employee to this Plan or pre-tax or
after-tax contributions by the Eligible Employee 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, or the value of
employer-provided fringe 

 

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 benefits or coverage, all as determined in accordance
with such uniform rules, regulations or standards as may be prescribed by the
Committee.


    (g) Base Compensation Deferral: See Section 1.01(m)(i).


    (h) Beneficiary: The person or entity designated by a Participant to
be his or her beneficiary for purposes of this Plan. If a Participant designates
his or her 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 that beneficiary. Beneficiary designations shall be in writing, filed
with the Committee, and in such form as the Committee may prescribe for this
purpose.


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


    (j) 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.


    (k) Committee: The Compensation Committee of the Board (with respect
to Eligible Employee participation) or the Governance Committee of the Board
(with respect to Director participation).


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


    (m) 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. Deferrals
made after June 30, 2001 include the following:


            
            (i) Base Compensation Deferral: A Deferral of all or a
            portion of an Eligible Employee's Base Compensation in accordance
            with Section 3.02.



 

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            (ii) Director Deferral. A Deferral by a Director of all or
            a portion of his or her Director Fees in accordance with Section
            4.02.

            
            (iii) Annual Bonus Deferral: A Deferral of all or a
            portion of an Eligible Employee's annual bonus award in accordance
            with Section 3.03.

            
            (iv) LTIP Deferral: A Deferral of all or a portion of the
            performance shares or other stock-based compensation awarded to an
            Eligible Employee under the Omnibus Plan, in accordance with Section
            3.04.




    (n) Director: A non-employee member of the Board, a non-employee
member of the board of directors of an Affiliate who is designated for
participation by the Board, and where the context so requires, a former director
entitled to receive a benefit hereunder


    (o) Director Deferral: See Section 1.01(m)(ii).


    (p) Director Fees: Those fees, other than fees designated for the
Deferred Stock Unit Account, payable to a Director for services rendered on the
Board (including attendance fees and fees for serving as a committee chair) or
for service on the board of directors of an Affiliate.


    (q) Disability: The inability of a Participant to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, as determined by the
Committee.


    (r) Eligible Employee: 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) 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 

 

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 time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.


    (t) 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.


    (u) Investment Options: The hypothetical investment accounts described
in Article V 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).


    (v) LTIP Deferral: See Section 1.01(m)(iv).


    (w) Omnibus Plan: The WPS Resources Corporation 2001 Omnibus Incentive
Compensation Plan or the WPS Resources Corporation 2005 Omnibus Incentive
Compensation Plan, as required by the context.


    (x) Participant: A Director and/or an Eligible Employee, as required
by the context.


    (y) Participating Employer: The Company and each Affiliate that, with
the consent of the Committee, participates in the Plan for the benefit of one or
more Participants.


    (z) "Pre-2005 Account: See Section 5.01(a).


    (aa) "Post-2004 Account: See Section 5.01(b).


    (bb) Stock Unit Accounts: The Incentive Stock Unit Account described
in Section 5.04, the Deferred Stock Unit Account described in Section 5.05, the
Base Stock Unit Account described in Section 5.06, and the Prior Plan WPS Stock
Unit Account described in Section 5.07.


    (cc) 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.

 

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    (dd) Valuation Date: See Section 6.01(e).


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


    (ff) WPS Resources Stock Units: The hypothetical shares of WPS
Resources Stock that are credited to the Stock Unit Accounts in accordance with
Sections 5.04, 5.05, 5.06 and 5.07.


   
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.

 

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ARTICLE II. PARTICIPATION


    Section  2.01. Eligibility.


    (a) A Director shall be eligible to participate in the Plan.


    (b) An employee shall be eligible to participate in the Plan only if
the employee is employed by a Participating Employer and if the employee has
been designated as an Eligible Employee by the Committee. When designating an
employee as an Eligible Employee, the Committee, in its sole discretion, may
designate the employee for participation in the entire Plan or any part thereof.


   
Section  
2.02. Certain
Transfers of Employment.

    If determined by the Committee to be consistent with the requirements of Code
Section 409A and 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 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 Articles
VII and VIII; 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.

 

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ARTICLE III. EMPLOYEE DEFERRED COMPENSATION


    Section  3.01. Application.
This Article III applies to Participants other than Directors.


   
Section  
3.02. Deferrals
Of Base Compensation.


    (a) Amount. 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 100%
or such lesser amount or percentage as may be established by the Committee, or
as may be necessary in order to comply with applicable withholding obligations,
whether attributable to withholdings required under applicable law or other
authorized withholdings) of the Participant's Base Compensation that the
Participant wishes to defer.


    (b) Initial Deferral Election. In the case of a Participant who
has been designated for participation for the first time and who completes a
Deferral election within 30 days of becoming eligible to participate in the
Plan, the Participant's validly executed Deferral election shall become
effective with respect to services to be performed subsequent to the election or
on such later date as determined by the Committee for reasons of administrative
convenience. If the Participant does not submit a Deferral election during the
initial 30 day election period, the Participant may thereafter elect to defer
payment of Base Compensation by submitting a validly executed Deferral election
to the Committee, but the election shall become effective and shall apply only
to Base Compensation for services performed on or after January 1 of the
calendar year following the calendar year during which the 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 (c) below or otherwise
revoked in accordance with Plan rules.


    (c) Revised Deferral Election. Except to the extent that the
Committee is permitted to give earlier effect to a Participants revocation or
revision to his or her Deferral election in accordance with regulations
promulgated by the Secretary of the Treasury under Code Section 409A, a
Participant's Deferral election, once effective with respect to a calendar
year, may not be revoked or modified with respect to Base Compensation for
services performed in that calendar 

 

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 year. A Participant may modify his or her
then current Deferral election by filing a revised Deferral election form,
properly completed and signed, with the Committee. However, except to the extent
that the Committee is permitted to give earlier effect to a Participant's
revised election in accordance with regulations promulgated by the Secretary of
the Treasury under Code Section 409A, the revised election will be effective
only with respect to Base Compensation for services performed on or after
January 1 of the calendar year following the calendar year during which the
revised 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 (c) or otherwise revoked in accordance with Plan rules.


   
Section  
3.03. Deferrals
of Annual Bonus Awards.

    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, or as may be necessary in order to comply with
applicable withholding obligations, whether attributable to withholdings
required under applicable law or other authorized withholdings) of the
Participant's annual cash bonus that the Participant wishes to defer. In the
case of any award that is not performance-based compensation for purposes of
Code Section 409A, a validly executed Deferral election shall be effective only
if the Deferral election is received and accepted by the Committee prior to the
last day of the calendar year preceding the calendar year for which the annual
bonus is paid, or by such other time as provided in regulations promulgated by
the Secretary of the Treasury. In the case of any award that is
performance-based compensation for purposes of Code Section 409A, a validly
executed Deferral 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
at least 6 months prior to the end of the (calendar year) performance period for
the bonus, or by such earlier (but not later) date 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 

 

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 year. Notwithstanding the foregoing, a Participant's
election to defer all or a portion of an award shall not be effective with
respect to an award paid after the Participant's termination of employment if
distribution to the Participant in accordance with Article VII or Article VIII
has commenced.


   
Section  
3.04. Deferral
of LTIP 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 share or other
stock-based compensation awarded to the Participant under the Omnibus Plan. A
Participant's election shall specify the whole number of shares (up to 100% of
such shares or such lesser number or percentage as may be established by the
Committee, or as may be necessary in order to comply with applicable withholding
obligations, whether attributable to withholdings required under applicable law
or other authorized withholdings) of the Participant's award that the
Participant wishes to defer. In the case of any award that is not
performance-based compensation for purposes of Code Section 409A, a validly
executed Deferral election shall be effective only if the Deferral election is
received and accepted by the Committee prior to the last day of the Participant's
tax year preceding the year during which the service period for the award
begins, or by such other time as provided in regulations promulgated by the
Secretary of the Treasury. In the case of any award that is performance-based
compensation for purposes of Code Section 409A, a validly executed Deferral
election shall become effective with respect to shares to be earned by the
Participant with respect to any Omnibus Plan performance period if the
Participant's Deferral election is received and accepted by the Committee at
least 6 months prior to the end of such performance period or by such earlier
(but not later) date as the Committee may establish. A Participant's election
to defer an award shall be effective only for the Omnibus Plan service period or
performance period to which the election relates, and a Participant's election
does not carry over from performance period to performance period or from
service period to service period. A Participant's LTIP Deferral will be
automatically credited to the Participant's Incentive Stock Unit Account.
Notwithstanding the foregoing, (a) a Participant's election to defer all or a
portion of an award shall not be effective with respect to an award paid after
the Participant's termination of employment if distribution to the Participant
in accordance with Article VII or Article VIII has commenced, and (b) a
Participant may defer the receipt of 

 

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 shares upon exercise of a stock option or
stock appreciation right only if and to the extent authorized by the Committee
and in accordance with procedures designated by the Committee for purposes of
complying with the requirements of Code Section 409A.


   
Section  
3.05. 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  
3.06. Other
Deferrals and Credits. The Committee, in its discretion, may, with respect
to any Participant, determine that the Participant is eligible to make Deferrals
with respect to additional components of the Participant's remuneration or
receive employer contribution credits in addition to the credits described
herein. In no event, however, shall the Committee authorize such additional
Deferrals or credits unless the Committee has first 

 

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 determined that the
Deferrals or credits have been elected or authorized in a manner that will not
result in the imposition of tax under Code Section 409A.


   
Section  
3.07. 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 accordance with the requirements of
Code Section 409A. In addition, and subject to Code Section 409A, a Participant's
Deferral election will terminate 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.


   
Section  
3.08. 2005
Transitional Rules. Notwithstanding the rules otherwise set forth in this
Article III regarding the timing of Deferral elections, and in accordance with
Internal Revenue Service Notice 2005-1:


    (a) A Participant, no later than March 1, 2005 (or such earlier date
as the Committee may prescribe), may prospectively revise (upward or downward)
his or her prior Deferral election with respect to 2005 Base Compensation that
has not been paid or become payable at the time of the revised election. This
includes the revision of a prior Deferral election (or deemed Deferral election)
in which the Participant elected not to defer any amount.


    (b) A Participant, no later than March 1, 2005 (or such earlier date
as the Committee may prescribe), may revise (upward or downward) his or her
prior Deferral election with respect to (i) the 2004 annual bonus (the
Participant's right to and amount of which is determined, and absent a
Deferral election would be payable, in 2005), (ii) the 2005 annual bonus (the
Participant's right to and amount of which is determined, and absent a
Deferral election would payable, in 2006), (iii) the 2002-2004 Omnibus Plan
bonus (the Participant's right to and the amount of which is determined, and
absent a Deferral election would be payable, in 2005), and (iv) the 2003-2005
Omnibus Plan bonus (the Participant's right to and the amount of which is
determined, and absent a Deferral election would be payable, in 2006). Each of
the foregoing 

 

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 incentive bonus amounts (if awarded) is subject to the
requirements of Code Section 409A and, absent a Deferral election, would be
payable after the latest election date established for that bonus award. The
right to revise a prior Deferral election includes the revision of a prior
Deferral election (or deemed Deferral election) in which the Participant elected
not to defer any amount.


    (c) On or before December 31, 2005, the Committee may (but need not)
permit a Participant who has made a Deferral election with respect to one or
more of the compensation categories described in subsections (a) and (b) above,
to cancel any such Deferral election, in whole or in part, in accordance with
Code Section 409A.

 

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ARTICLE IV. DIRECTOR DEFERRED COMPENSATION


    Section  4.01. Application.
This Article IV applies only to Directors.


   
Section
 
4.02. Deferrals
Of Director Fees.


    (a) Amount. A Director may elect, in such form and manner as
the Committee may prescribe, to defer payment of all or a portion of the
Director Fees that would otherwise be paid to the Director. A Director'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, or
as may be necessary in order to comply with applicable withholding obligations,
whether attributable to withholdings required under applicable law or other
authorized withholdings) of the Director Fees that the Director wishes to defer.


    (b) Initial Deferral Election. In the case of a Director who
has become eligible for participation for the first time, and who completes a
Deferral election within 30 days of becoming eligible to participate in the
Plan, the Director's validity executed Deferral election shall become
effective with respect to services to be performed subsequent to the election or
on such later date as determined by the Committee for reasons of administrative
convenience. If the Director does not submit an initial Deferral election during
the initial 30 day election period, the Director may thereafter elect to defer
the payment of Director Fees by submitting a validly executed Deferral election
to the Committee, but the election shall become effective and shall apply only
to Directors Fees for services performed on or after January 1 of the calendar
year following the calendar year in which the election is received and accepted
by the Committee, or as soon thereafter as practicable. A Director's Deferral
election, once effective, shall remain in effect until modified by the Director
in accordance with subsection (c) below or otherwise revoked in accordance with
Plan rules.


    (c) Revised Deferral Election. Except to the extent that the
Committee is permitted to give earlier effect to a Director's revocation or
revision to his or her Deferral election in accordance with regulations
promulgated by the Secretary of the Treasury under Code Section 409A, a Director's
Deferral election, once effective with respect to a calendar year, may not be
modified or revoked with respect to Director Fees for services performed in that
calendar year. A Director may modify his or her then current Deferral election
by filing a revised Deferral 

 

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 election form, properly completed and signed, with
the Committee. However, except to the extent that the Committee is permitted to
give earlier effect to a Participants revision to his or her Deferral election
in accordance with regulations promulgated by the Secretary of the Treasury
under Code Section 409A, the revised election will be effective with respect to
Director Fees for services performed on or after January 1 of the calendar year
following the calendar year during which the revised election is received and
accepted by the Committee, or as soon thereafter as practicable. A Director's
revised Deferral election, once effective, shall remain in effect until again
modified by the Director in accordance with this subsection (c) or otherwise
revoked in accordance with Plan rules.


   
Section

 
4.03. Deferred
Stock Units.


    The Board may from time to time direct that a portion of the remuneration to
be earned by a Director for service on the Board shall be credited under this
Plan in the form of Deferred Stock Units. Except to the extent that the
Committee is permitted to give earlier effect to a direction in accordance with
regulations promulgated by the Secretary of the Treasury under Code Section
409A, any such direction shall be effective with respect to remuneration to be
earned by the Director on and after January 1 of the calendar year following the
date of such direction, and shall continue in effect through December 31 of the
calendar year in which modified or revoked by a subsequent direction of the
Board. The Board's direction may provide either for the direct credit of
Deferred Stock Units or for the mandatory deferral of a prescribed amount of
cash remuneration that will be converted into WPS Stock Units in accordance with
Section 5.05(b) below.


    
Section  
4.04. Involuntary
Termination of Deferral Elections.

    A Director's Deferral elections shall be automatically revoked upon the
Director's termination of service with the Participating Employers, unless the
Committee determines otherwise in accordance with Code Section 409A. In
addition, and subject to Code Section 409A, a Director's Deferral election
will terminate if the Committee determines that the Director is no longer
eligible to participate in the Plan.

 

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Section  
4.05. 2005
Transitional Rules. Notwithstanding the rules otherwise set forth in this
Article IV regarding the timing of Deferral elections, and in accordance with
Internal Revenue Service Notice 2005-1:


    (a) A Director, no later than March 1, 2005 (or such earlier date as
the Committee may prescribe), may prospectively revise (upward or downward) his
or her prior Deferral election with respect to 2005 Director Fees that has not
been paid or become payable at the time of the revised election. This includes
the revision of a prior Deferral election (or deemed Deferral election) in which
the Director elected not to defer any amount.


    (b) On or before December 31, 2005, the Committee may (but need not)
permit a Director who has made a Deferral election with respect to 2005 Director
Fees, to cancel such Deferral election, in whole or in part.

 

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ARTICLE V. ACCOUNTS AND HYPOTHETICAL INVESTMENT OPTIONS


    Section  5.01. Participant
Accounts.

    To the extent relevant, a Participant's Account shall consist of the
following subaccounts or balances:


    (a) The "Pre-2005 Account", to record the Participant's
interest with respect to Deferrals or contribution credits made prior to January
1, 2005, together with any earnings or loss thereon through the date of
distribution from the Plan, and which shall consist of the following:


            
            (i) "Reserve Account A", reflecting the
            Participant's entire interest in Reserve Account A;

            
            (ii) "Pre-July 1, 2001 Reserve Account B",
            reflecting the portion of the Participant's balance in Reserve
            Account B that is attributable to Deferrals made through June 30,
            2001, together with all credits of interest equivalent on such
            Deferrals through the date of distribution from the Plan;

            
            (iii) "July 1, 2001 Through December 31, 2004 Reserve
            Account B", reflecting the portion of the Participant's
            balance in Reserve Account B that is attributable to Deferrals made
            after June 30, 2001 and through December 31, 2004, together with all
            credits of interest equivalent on such Deferrals through the date of
            distribution from the Plan;

            
            (iv) "Pre-2005 Incentive Stock Unit Account",
            reflecting the portion of the Participant's balance in the
            Incentive Stock Unit Account that is attributable to Annual Bonus
            Deferrals, LTIP Deferrals and matching contribution credits made
            after June 30, 2001 and through December 31, 



 

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             2004, together with
            earnings or loss thereon through the date of distribution from the
            Plan;

            
            (v) "Pre-2005 Deferred Stock Unit Account",
            reflecting the portion of the Participant's Deferred Stock Unit
            Account that is attributable to Deferred Stock Units allocated to a
            Director through December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan;

            
            (vi) "Pre-2005 Base Stock Unit Account",
            reflecting the portion of the Participant's balance in the Base
            Stock Unit Account that is attributable to Deferrals made after June
            30, 2001 and through December 31, 2004, and any earnings or loss
            thereon through the date of distribution from the Plan;

            
            (vii) "Prior Plan WPS Stock Unit Account",
            reflecting the Participant's entire interest in the Prior Plan WPS
            Stock Unit Account; and

            
            (viii) Pre-2005 Other Investments Account",
            reflecting the Participant's balance in any other Investment
            Option that is attributable to Deferrals made after June 30, 2001
            and through December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan.




    (b) The "Post-2004 Account", to record the Participant's
interest with respect to Deferrals or contribution credits made after December
31, 2004, together with any earnings or loss thereon through the date of
distribution from the Plan, and which shall consist of the following:


            
            (i) "Post-2004 Reserve Account B", reflecting
            the portion of the Participant's balance in Reserve Account B that
            is attributable to Deferrals made after December 31, 2004, 



 

18

<PAGE>

 

             


             together
            with all credits of interest equivalent on such Deferrals through
            the date of distribution from the Plan;

            
            (ii) "Post-2004 Incentive Stock Unit Account",
            reflecting the portion of the Participant's balance in the
            Incentive Stock Unit Account that is attributable to Annual Bonus
            Deferrals, LTIP Deferrals and matching contribution credits made
            after December 31, 2004, and any earnings or loss thereon through
            the date of distribution from the Plan;

            
            (iii) "Post-2004 Deferred Stock Unit Account",
            reflecting the portion of the Participant's Deferred Stock Unit
            Account that is attributable to Deferred Stock Units allocated to a
            Director after December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan;

            
            (iv) "Post-2004 Base Stock Unit Account",
            reflecting the portion of the Participant's balance in the Base
            Stock Unit Account that is attributable to Deferrals made after
            December 31, 2004, and any earnings or loss thereon through the date
            of distribution from the Plan; and

            
            (v) "Post-2004 Other Investments Account",
            reflecting the Participant's balance in any other Investment
            Option that is attributable to Deferrals made after December 31,
            2004, and any earnings or loss thereon through the date of
            distribution from the Plan.




   
Section  
5.02. Reserve
Account A.


    (a) Limited Purpose Account. Reserve Account A is limited to
compensation or director fees deferred by a Participant prior to January 1,
1996, together with attributed earnings on such deferrals. 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.

 

19

<PAGE>

 


    (b) Crediting of Interest Equivalent. Reserve Account A will be
credited with an interest equivalent on the balance in the account from time to
time during the year. Unless the Committee prescribes an alternate method, the
annual interest equivalent rate (on a non-compounded basis) will be the greater
of:


            
            (i) six percent (6.0%); or

            
            (ii) a rate equal to 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
            Participant following termination of employment if the Participant's
            termination of employment with the Company and its Affiliates occurs
            prior to attainment of age 55 and prior to the occurrence of a
            Change in Control (as defined in Section 10.01). 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 February 28 (or 29) 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 August 31.




    (c) Revised Rate. Subject to Article X, 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.

 

20

<PAGE>

 


    
Section  
5.03. Reserve
Account B.


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


    (b) Crediting of Interest Equivalent. Reserve Account B will be
credited with an interest equivalent on the balance in the account from time to
time during the year. Unless the Committee prescribes an alternate method, the
annual interest equivalent rate (on a non-compounded basis) will be the greater
of:


            
            (i) six percent (6.0%); or

            
            (ii) a rate equal to seventy percent (70%) 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 Participant following termination of employment if the
            Participant's termination of employment with the Company and its
            Affiliates occurs prior to attainment of age 55 and prior to the
            occurrence of a Change in Control (as defined in
            Section 10.01). 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 February 28 (or 29) 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 August 31.



 

21

<PAGE>

 


    (c) Revised Rate. Subject to Article X, 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  
5.04. 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 are made after June 30, 2001 pursuant to Section 3.03 and that
the Participant elects to be credited to the Incentive Stock Unit Account in
accordance with Section 6.01(c), (ii) LTIP Deferrals made after June 30, 2001
pursuant to Section 3.04, and (iii) matching contribution credits made after
June 30, 2001 pursuant to Section 3.05.


    (b) Conversion to WPS Stock Units. All eligible Deferrals made
by or on behalf of a Participant and allocated to the Incentive Stock Unit
Account and all of a Participant's matching contribution credits under Section
3.05 (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 closing price of a share of WPS Resources Stock on the
date on which the Deferral or credit would otherwise have been paid to the
Participant, as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing. 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 closing price of a share of WPS Resources
Stock on the dividend date.


   
Section
 
5.05. Deferred
Stock Unit Account.


    (a) Limited Purpose "Buy Only" Account. A Director's
Deferred Stock Unit Account is a "buy only" account limited to
Deferred Stock Units allocated to the Director in 

 

22

<PAGE>

 

 accordance with Section 4.03.
The Director is not able to exercise investment discretion with respect to his
or her Deferred Stock Unit Account.


    (b) Conversion to WPS Stock Units. All Deferred Stock Unit
amounts directed by the Board in accordance with Section 4.03 shall be credited
to the Director's Deferred Stock Unit Account. If the Board directs that a
Director be credited with a prescribed number of WPS Resources Stock Units, the
number of units so prescribed shall be credited to the Director's Deferred
Stock Unit Account. If the Board directs that a Director be credited with WPS
Resources Stock Units with a prescribed value, the value to be credited (the
"Deferred Stock Unit Convertible Amount") will be 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 Director's Deferred Stock Unit Convertible
Amount by the closing price of a share of WPS Resources Stock on the effective
date of the grant, as reported in the Wall Street Journal's New York Stock
Exchange Composite Transactions listing. Any dividends that would have been
payable on the WPS Resources Stock Units credited to a Director's Deferred
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 purchase price at which shares of WPS
Resources Stock were purchased under the WPS Resources Corporation Stock
Investment Plan on the purchase date that is coincident with or closest to the
dividend date.


   
Section  
5.06. 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, Director Deferrals and Annual Bonus Deferrals that are made after
June 30, 2001 and that the Participant elects to have credited to the Base Stock
Unit Account in accordance with Section 6.01(b) and (c).


    (b) Conversion to WPS Stock Units. All eligible Deferrals made
by or on behalf of a Participant 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 closing 

 

23

<PAGE>

 

 price of a share of WPS Resources Stock on the date on which the
Deferral would otherwise have been paid to the Participant, as reported in the
Wall Street Journal's New York Stock Exchange Composite Transaction listing.
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
closing price of a share of WPS Resources Stock on the dividend date.


    (c) Conversion from WPS Stock Units. If a Participant elects
under Section 6.01(f) to reallocate all or any portion of his or her 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 effective date of such
reallocation, 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 reallocation elections under Section 6.01(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 6.01(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 11.02, 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, including, without limitation,
application of the review and approval provisions of this Section 5.06(d) to
Participants who are not subject to Section 16 of the Exchange Act.

 

24

<PAGE>

 


   
Section  
5.07. Prior
Plan WPS Stock Unit Account.


    (a) Limited Purpose Account. The Prior Plan WPS Stock Unit
Account is limited to WPS Resources Stock Units credited to a Participant under
the Plan (or a predecessor plan) through June 30, 2001, together with such
additional WPS Resources Stock Units as are credited in accordance with
subsection (b) below based on deemed dividends on such WPS Resources Stock
Units.


    (b) Dividend Credits. Any dividends that would have been
payable on the WPS Resources Stock Units credited to a Participant's Prior
Plan WPS 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, and shall be credited to the Prior Plan WPS Stock
Unit Account, based on the closing price of a share of WPS Resources Stock on
the dividend date.

 

25

<PAGE>


 


ARTICLE VI. ACCOUNTING AND HYPOTHETICAL INVESTMENT
ELECTIONS


    Section  6.01. Hypothetical
Investment of Participant Accounts.


    (a) Available Investment Options.


            
            (i) For purposes of directing the deemed investment of
            Base Compensation Deferrals and Director 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, the Prior Plan WPS Stock Unit Account,
            the Incentive Stock Unit Account and the Deferred 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, the Prior Plan WPS Stock Unit Account and the
            Deferred Stock Unit Account.




    (b) Deemed Investment of Base Compensation Deferrals and Director
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 or Director 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 1% or such other
percentage determined by the Committee, the percentage of his or her Base
Compensation Deferrals or Director 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 or Director Deferrals be credited to
Reserve Account B or such other of the Available Investment Options specified by
the Committee for this purpose. A 

 

26

<PAGE>

 

 Participant's investment election or deemed
investment election shall become effective beginning with the first payroll
period commencing or payment date occurring on or after the date on which the
election is received and accepted by the Committee, or such other date
established by the Committee for this purpose, 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 1% 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 investment election or deemed investment 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 3.04 and matching contribution credits under Section 3.05 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 each day
that the New York Stock Exchange is open for business, or at such other times as
the Committee may prescribe (the 

 

27

<PAGE>

 

 "Valuation Date"), 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 since the immediately preceding Valuation Date had the Account been
invested in accordance with the terms of the Plan and where applicable, the
Participant's election. Subject to the special rules set forth in Article V
with respect to Reserve Account A, Reserve Account B, the Incentive Stock Unit
Account, the Deferred Stock Unit Account, the Base Stock Unit Account and the
Prior Plan WPS 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 immediately prior Valuation Date that is deemed to have been invested
in each Investment Option, and (ii) the rate of return experienced by that
Investment Option since the immediately preceding Valuation Date. 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 5.06(d), and in
accordance with rules prescribed by the Committee (which may include limitations
on the timing or frequency of reallocation transactions initiated by some or all
Participants), each Participant may elect to reallocate his or her Account
(other than the portion deemed to be invested in Reserve Account A, the Pre-July
1, 2001 Reserve Account B, the Prior Plan WPS Stock Unit Account, the Incentive
Stock Unit Account and the Deferred Stock Unit Account) among the Available
Investment Options. When selecting more than one Investment Option, the
Participant shall designate, in whole multiples of 1% or such other percentage
determined by the Committee, the percentage of his or her available Account that
is deemed to be invested in each Available Investment Option after the
investment reallocation is given effect. Once effective, a Participant's
reallocation shall remain in effect unless and until modified by a subsequent
election that becomes effective in accordance with the rules prescribed by the
Committee. 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.

 

28

<PAGE>

 


   
Section  
6.02. 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 and/or contribute to the Trust
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 held by the Company or the Trust shall be and remain the sole
property of the Company or the Trust, as applicable, 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.

 

29

<PAGE>

 


 


ARTICLE VII. DISTRIBUTION OF PRE-2005 ACCOUNT


    Section  7.01. Distribution
Election.


    (a) Election. A Participant, at the time he or she commenced
participation in the Plan, made a distribution election with respect to his or
her Pre-2005 Account. The election specified the distribution commencement date,
the distribution period, and the distribution method applicable following the
Participant's death. Any such election was required to be consistent with the
following rules (or if the Participant failed to make a selection with respect
to a particular item, 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 Pre-2005 Account will commence either (A) within 60
            days following the end of the calendar year in which the Participant
            terminates employment or service from the Company and all
            Affiliates, or (B) if determined by the Committee to be consistent
            with the "grand-father" rules of Code Section 409A and if
            directed by the Committee for purposes of creating administratively
            consistency between the distribution provisions of Articles VII and
            VIII, within 60 days following the end of the calendar year in which
            occurs the 6 month anniversary of the date on which the Participant
            terminates employment or service from the Company and all
            Affiliates. 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 



 

30

<PAGE>

             


             Employer
            contributes, unless otherwise determined by the Committee.

            
            (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 Participant's Beneficiary in accordance with
            the distribution election (single sum payment or installments)
            elected by the Participant. If the Participant had elected 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 had elected an installment distribution, (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 7.02 below or otherwise revoked in accordance with Plan rules.


   
Section  
7.02. Modified
Distribution Election.

    A Participant may from time to time modify his or her distribution election
by filing a revised distribution election, properly completed and signed, with
the Committee. However, a 

 

31

<PAGE>

 

 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  
7.03. Calculation
of Annual Distribution Amount.


    (a) Pre-2001 Retirees. For any Participant who retired or
terminated employment or service 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 or service.


    (b) Post-2000 Retirees. For a Participant who retires or
terminates employment or service after December 31, 2000, the annual
distribution amount for the Pre-2005 Account, unless the Committee specifies a
different or alternate method and such different or alternate method does not
result in the imposition of tax under Code Section 409A, shall be calculated as
follows:


            
            (i) The annual distribution amount for the Participant's
            Pre-2005 Account, other than the portion of the Pre-2005 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 



 

32

<PAGE>

 

             


             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 the portion of the
            Participant's Pre-2005 Account that is credited to 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 9.02), by (B) the number of installment payments
            remaining to be made under the distribution period selected by the
            Participant. The Participant will receive shares of WPS Resources
            Stock equal to the annual distribution amount, subject only to the
            distribution of cash in lieu of any fractional WPS Resources Stock
            Unit. The cash payment for any fractional WPS Resources Stock Unit
            shall be determined based upon the closing price of a share 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 distribution will be made
            based upon the closing price as reported for the immediately
            preceding business day.




    
Section  
7.04. Time
of Distribution.

    Subject to the provisions of Sections 9.02 and 10.02, each distribution
of WPS Resources Stock made to a Participant (or Beneficiary) shall be
distributed on January 22 (or if January 22 

 

33

<PAGE>

 

 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
 
7.05. Single
Sum Distribution at the Committee's Option.


    (a) In the case of a Participant whose employment with the Company and
its Affiliates is involuntarily terminated by the Company or an Affiliate, or
whose employment with the Company and its Affiliates is mutually terminated in
accordance with a separation agreement and release between the Company or an
Affiliate and such Participant, the Committee may (but need not) direct that the
Participant's Pre-2005 Account be distributed in the form of a single sum
payment in lieu of distribution over any installment distribution period that
would otherwise apply. If so directed by the Committee, the single sum
distribution shall be made in cash and/or shares of WPS Resources Stock (as
determined in accordance with Section 7.03) and shall be made at the time
specified in Section 7.04.


    (b) In the case of any other Participant or Beneficiary whose Pre-2005
Account and Post-2005 Account, in the aggregate, has a value of $100,000 or less
as of the valuation date that immediately precedes the date on which
distribution would first be made to the Participant or Beneficiary, the
Committee may (but need not) direct that the Participant's Pre-2005 Account be
distributed in the form of a single sum payment in lieu of any installment
distribution period that would otherwise apply. If so directed by the Committee,
the single sum distribution shall be made in cash and/or shares of WPS Resources
Stock (as determined in accordance with Section 7.03) and shall be made at the
time specified in Section 7.04.

 

34

<PAGE>

 


 ARTICLE VIII. DISTRIBUTION OF POST-2004 ACCOUNT


    Section  8.01. Distribution
Election.


    (a) Election. A Participant, on or before December 31, 2005 or
if later, at the time he or she commences participation in the Plan, shall make
a distribution election with respect to his or her Post-2004 Account. The
election shall be in such form as the Committee shall 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 if the Participant
fails to make a selection with respect to a particular item, in accordance with
the default rules set forth below):


            
            (i) Distribution Commencement Date. Unless the
            Participant has selected a later commencement date, distribution of
            a Participant's Post-2004 Account will commence within 60 days
            following the end of the calendar year in which occurs the 6 month
            anniversary of the date on which the Participant terminates
            employment or service from the Company and all Affiliates. 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 the Company or an Affiliate
            or to which the Company or an Affiliate contributes.

            
            (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 in his
            or her Post-2004 Account will be distributed to the Participant's
            Beneficiary in accordance with the distribution election 



 

35

<PAGE>

 

             


             (single sum
            payment or installments) elected by the Participant. If the
            Participant had elected 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 had elected an installment
            distribution, (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 8.02 below or otherwise revoked in accordance such circumstances as the
Plan is permitted to accept without resulting in the imposition of tax under
Code Section 409A.


   
Section  
8.02. Modified
Distribution Election.

    A Participant may from time to time modify his or her distribution election
with respect to his or her Post-2004 Account by filing a revised distribution
election, properly completed and signed, with the Committee. However, except to
the extent permitted under regulations promulgated by the Secretary of the
Treasury under Code Section 409A, a revised distribution election must comply
with the following rules:


    (a) The revised distribution election may not accelerate either the
time or form of payment. For example, the revised distribution election may not
change from an installment payment to a single sum payment, or from a longer
installment period to a shorter installment period. Similarly, the revised
distribution election may not elect a distribution commencement date earlier
than the distribution commencement date applicable under the Participant's
prior 

 

36

<PAGE>

 

 distribution election. A revised election that does not comply with these
rules will be null and void, and will be disregarded by the Plan.


    (b) The revised distribution election may (i) change the form of
payment from a single sum payment to installment distributions, (ii) change the
form of payment from a shorter installment period to a longer installment
period, or (iii) defer the distribution commencement date, and such a revised
election will be given effect 12 months after the date on which the election is
made, but only if (i) in the case of an election related to payment at a
specified time, the revised election is made at least 12 months prior to the
date on which payment would be made or commence in the absence of the revised
election, and (ii) in the case of any election other than one related to payment
on account of Disability or death, the first payment that is made pursuant to
the revised election is deferred for at least 5 years from the date payment
would otherwise have been made. A revised election that does not comply with
these rules will be null and void, and will be disregarded by the Plan.


   
Section  
8.03. Calculation
of Annual Distribution Amount.

    The annual distribution amount for the Post-2004 Account shall be calculated
as follows:


    (a) The annual distribution amount for the Participant's Post-2004
Account, other than the portion of the Post-2004 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 subsection (a) 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.

 

37

<PAGE>

 


    (b) The annual distribution amount for the portion of the Participant's
Post-2004 Account that is credited to each of the Post-2004 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 9.02), by (B) the number of installment payments remaining to
be made under the distribution period selected by the Participant. The
Participant will receive shares of WPS Resources Stock equal to the annual
distribution amount, subject only to the distribution of cash in lieu of any
fractional WPS Resources Stock Unit. The cash payment for any fractional WPS
Resources Stock Unit shall be determined based upon the closing price of a share
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
distribution will be made based upon the closing price as reported for the
immediately preceding business day.


    
Section  
8.04. Time
of Distribution.

    Subject to the provisions of Sections 9.02 and 10.02, 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  
8.05. Automatic
Single Sum Distribution. In the case of any Participant or Beneficiary whose
Pre-2005 Account and Post-2004 Account, in the aggregate, has a value of
$100,000 or less as of the valuation date that immediately precedes the date on
which distribution would first be made to the Participant or Beneficiary, the
Participant's Post-2004 

 

38

<PAGE>

 

 Account will be distributed in the form of a single
sum payment on the date on which distributions would otherwise commence, and
such single sum payment shall be in lieu of any installment distribution period
that would otherwise apply; provided that the Post-2004 Account will be so
distributed only if the Participant's Pre-2005 Account is distributed in
accordance with Section 7.05. Unless otherwise directed by the Committee, the
single sum distribution shall be made in cash and/or shares of WPS Resources
Stock (as determined in accordance with Section 8.03).

 

 

39

<PAGE>

 


ARTICLE IX. RULES WITH RESPECT TO WPS RESOURCES STOCK

AND WPS RESOURCES STOCK UNITS


    Section  9.01. Shares
Authorized.


    (a) Subject to adjustment as provided in Section 9.02 below, the total
number of shares of WPS Resources Stock which may be distributed to Participants
or Beneficiaries pursuant to the Plan shall be seven hundred fifty thousand
(750,000), which includes two hundred fifty thousand (250,000) shares that were
previously approved by shareholders in connection with employee and director
deferred compensation plans, and five hundred thousand (500,000) shares for
which shareholder approval will be sought at the Company's 2005 annual
meeting.


            
            (i) The two hundred fifty thousand (250,000) shares, as
            adjusted as provided in Section 9.02 below ,that were previously
            approved by shareholders and to the extent not heretofore utilized,
            may be used to satisfy any obligation under the Plan.

            
            (ii) Of the five hundred thousand (500,000) shares for
            which shareholder approval will be sought at the Company's 2005
            annual meeting, no more than two hundred thousand (200,000) shares,
            subject to adjustment as provided in Section 9.02 below, will be
            issued to satisfy obligations with respect to (i) the five percent
            (5%) premium on Annual Bonus Deferrals that are allocated to the
            Incentive Stock Unit Account in accordance with Section 6.01(c), or
            (ii) employer contribution credits under Sections 3.05 and 3.06 of
            this Plan (or under the provisions of any predecessor plan) that are
            granted to a Participant without the requirement that the
            Participant execute a Deferral



 

40

<PAGE>

 

             


             election to forego an equal amount of
            cash compensation as a condition of receiving such credits.




    (b) The number of available shares shall not be reduced by or as a
result of (i) any cash distributions pursuant to the Plan or (ii) by
distributions of shares of WPS Resources Stock that are attributable to LTIP
Deferrals that relate to an award that was made under the Omnibus Plan and
either has been or will be charged against the pool of available shares under
the Omnibus Plan, i.e., the plan under which the share award was originally
granted and the plan from which the share award would have been paid except for
the Participant's election to defer delivery of the shares.


   
Section  
9.02. 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  
9.03. 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 the Participant or his or her guardian or legal representative.

 

41

<PAGE>

 


 


ARTICLE X. SPECIAL RULES APPLICABLE IN THE EVENT OF A
CHANGE IN CONTROL OF THE COMPANY


    Section  10.01.
Definitions.

    For purposes of this Article X, 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 



 

42

<PAGE>

 

             


             pursuant to the terms of the Company's Rights Agreement
            with American Stock Transfer & Trust Company, originally dated
            as of December 12, 1996 between the Company and Firstar Trust
            Company, as the same may be 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 



 

43

<PAGE>

 

             


             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
            WPS Resources Corporation or of any subsidiary of WPS Resources
            Corporation, 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 WPS Resources Corporation representing at least 30% of
            the combined voting power of the WPS Resources Corporation'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 WPS Resources Corporation 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 WPS Resources Corporation
            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 WPS
            Resources Corporation or share exchange involving WPS Resources
            Corporation in which WPS Resources Corporation is not the continuing
            or surviving corporation other than a merger of WPS Resources
            Corporation in which each of the holders of WPS Resources
            Corporation's Common Stock 



 

44

<PAGE>

 

             


             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 WPS
            Resources Corporation to a Person which is not a wholly owned
            subsidiary of WPS Resources Corporation; or

            
            (vi) the shareholders of WPS Resources Corporation approve
            any plan or proposal for the liquidation or dissolution of WPS
            Resources Corporation.




    (d) "Continuing Directors" means (i) any member of the
Board of Directors of WPS Resources Corporation 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  
10.02.
Amendments in Connection with a Change in Control.


    (a) Board Authority to Amend Plan. Prior to the occurrence of a
Change in Control, the Board may exercise its authority under Section 11.06 to
amend the Plan, including, to the extent deemed necessary or desirable by the
Board in anticipation of a Change in Control, to 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 5.06(c))
to be reallocated to Reserve Account B. The term "Amendment Date"
means the date on which an amendment to

 

45

<PAGE>

 

the Plan is validly adopted or the date
on which the amendment is or purports to be effective, whichever is later.


    (b) Automatic Amendments. 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,
            or (B) a rate equal to two (2) percentage points above the prime
            lending rate at US Bank Milwaukee, Milwaukee, Wisconsin (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,
            or (B) a rate equal to two (2) percentage points above the prime
            lending rate at US Bank Milwaukee, Milwaukee, Wisconsin (or any
            successor thereto) as of the 

 

46

<PAGE>

 

             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 (including
            for this purpose any successor corporation or entity that is the
            survivor of a merger with the Company), or by any subsidiary or
            affiliate of the Company or such successor, on such date.




    (c) Prohibition on Certain Amendments. Notwithstanding the
foregoing, on or after a Change in Control, the Board or Company (including for
this purpose any successor corporation or entity that is the survivor of a
merger with the Company or to which sponsorship of the Plan is transferred
following a Change in Control, or the board of directors or other managing body
of any such entity)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 6.01(e)
            less frequently than quarterly; or

            
            (iii) Impair or otherwise limit a Participant's rights
            to reallocate his or her Accounts under Section 6.01(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;



 

47

<PAGE>

 

             


            
            (v) Eliminate or reduce the distribution options made
            available under Articles VII and VIII or otherwise terminate any
            distribution elections then in effect; or

            
            (vi) Modify the provisions of Sections 10.03 and 10.04 in
            a manner detrimental or potentially detrimental to a Participant (or
            Beneficiary), except and only to the extent that modification is
            necessary to comply with applicable law.




   
Section  
10.03.
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 or her sole discretion (which may be regular outside counsel
to the Company), which opinion sets forth (A) the amount of the Base Period 

 

48

<PAGE>

 


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 or her 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  
10.04.
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 

 

49

<PAGE>

 

 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 US 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.

 

50

<PAGE>

 


 


ARTICLE XI. GENERAL PROVISIONS


    Section  11.01.
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 a duly designated 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  
11.02.
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 

 

51

<PAGE>

 

 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 or her Beneficiary or his or her heirs, legatees or
legal representatives, as the case may be, shall, if the Committee deems it
necessary, 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  
11.03.
Claims Procedures.


    (a) If a Participant, or Beneficiary (the "claimant")
believes that he is entitled to a benefit under the Plan that is not provided,
the claimant or his or her legal representative shall file a written claim for
such benefit with the Committee. The Committee shall review the claim within 90
days following the date of receipt of the claim; provided that the Committee may
determine that an additional 90-day extension is necessary due to circumstances
beyond the Committee's control, in which event the Committee shall notify the
claimant prior to the end of the initial period that an extension is needed, the
reason therefor and the date by which the Committee expects to render a
decision. If the claimant's claim is denied in whole or part, the 

 

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 Committee
shall provide written notice to the claimant of such denial. The written notice
shall include the specific reason(s) for the denial; reference to specific Plan
provisions upon which the denial is based; a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and a description
of the Plan's review procedures (as set forth in subsection (b)) and the time
limits applicable to such procedures, including a statement of the claimant's
right to bring a civil action under section 502(a) of ERISA following an adverse
determination upon review.


    (b) The claimant has the right to appeal the Committee's decision by
filing a written appeal to the Committee within 60 days after claimant's
receipt of the decision or deemed denial. The claimant will have the
opportunity, upon request and free of charge, to have reasonable access to and
copies of all documents, records and other information relevant to the claimant's
appeal. The claimant may submit written comments, documents, records and other
information relating to his or her claim with the appeal. The Committee will
review all comments, documents, records and other information submitted by the
claimant relating to the claim, regardless of whether such information was
submitted or considered in the initial claim determination. The Committee shall
make a determination on the appeal within 60 days after receiving the claimant's
written appeal; provided that the Committee may determine that an additional
60-day extension is necessary due to circumstances beyond the Committee's
control, in which event the Committee shall notify the claimant prior to the end
of the initial period that an extension is needed, the reason therefor and the
date by which the Committee expects to render a decision. If the claimant's
appeal is denied in whole or part, the Committee shall provide written notice to
the claimant of such denial. The written notice shall include the specific
reason(s) for the denial; reference to specific Plan provisions upon which the
denial is based; a statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of all documents,
records, and other information relevant to the claimant's claim; and a
statement of the claimant's right to bring a civil action under section 502(a)
of ERISA.

 

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Section  
11.04.
Participant Rights Unsecured.


    (a) Unsecured Claim. The right of a Participant or the
Participant's 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 or her 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 the Participant or his or her 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  
11.05.
Income Tax Withholding.

    The amount actually distributed to the Participant will be reduced by
applicable income tax withholding (if any). Unless the Participant has made a
contrary election with the consent of the Committee, 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. Further, no later than the date as of which an
amount first becomes includible in the income of the Participant for employment
tax purposes, the Participant shall pay or make arrangements satisfactory to the
Committee regarding the payment of any such tax.


   
Section  
11.06.
Amendment or Termination of Plan.


    (a) There shall be no time limit on the duration of the Plan.


 

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    (b) Except as otherwise limited pursuant to Section 10.02, the
Board (or where specified herein, the Committee) may at any time amend the Plan,
including but not limited to modifying the terms and conditions applicable to
(or otherwise eliminating) Deferrals or contribution credits to be made on or
after the amendment 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).


    (c) Subject to Section 10.02, the Board may terminate the Plan in
accordance with and subject to the following rules:


            
            (i) Prior to January 1, 2006, the Board at any time may
            terminate the Plan and require that all benefits accrued be
            currently distributed to Participants and Beneficiaries in a single
            sum without regard to a Participant's prior election as to the
            form and timing of benefit payments.

            
            (ii) Effective January 1, 2006, and except as provided in
            Paragraph (iii) below or except as otherwise permitted in
            regulations promulgated by the Secretary of the Treasury under Code
            Section 409A, any action that purports to terminate the Plan shall
            instead be construed as an amendment to discontinue further
            Deferrals and contributions credits, but the Plan will continue to
            operate, in accordance with its terms as from time to time amended
            in accordance with Sections 10.02 and 11.06, and in accordance with
            applicable Participant elections, with respect to the Participant's
            Account as accumulated through the date of termination and as
            thereafter adjusted to reflect post-termination earnings or losses.
            Except as provided in Paragraph (iii) below or except as otherwise
            permitted in regulations promulgated by the Secretary of 



 

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             the
            Treasury under Code Section 409A, in no event shall any such action
            purporting to terminate the Plan form the basis for accelerating
            distributions to Participants and Beneficiaries.

            
            (iii) The Committee may (but need not) terminate the Plan
            and require that all benefits accrued be currently distributed to
            Participants and Beneficiaries in a single sum without regard to a
            Participant's prior election as to the form and timing of benefit
            payments, if such termination and distribution occurs within 12
            months of a "change in control event", or within such
            other period as permitted under regulations promulgated by the
            Secretary of the Treasury under Code Section 409A. For purposes of
            this Paragraph (iii), the term "change in control event"
            has the meaning specified by the Secretary of the Treasury for
            purposes of Code Section 409A, and a Change in Control (as defined
            in Section 10.01 does not necessarily constitute a "change in
            control event" as defined for purposes of Code Section 409A. A
            Change in Control (as defined in Section 10.01 shall be a
            permissible basis for terminating the Plan and distributing the
            value of Accounts only if such transaction or event also constitutes
            a "change in control event" as that term is defined for
            purposes of Code Section 409A.




   
Section  
11.07.
Administrative Expenses.

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

 

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Section  
11.08.
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  
11.09.
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.


   
Section  
11.10.
Right of Offset.

    The Company shall have the right to offset from the benefits payable
hereunder any amount that the Participant owes to the Company or Affiliate or
other entity in which the Company or an Affiliate maintains an ownership
interest. The Company may effectuate the offset without the consent of the
Participant (or the Participant's spouse or Beneficiary, in the event of the
Participant's death).


 

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