WPS RESOURCES CORPORATION

2001 OMNIBUS INCENTIVE COMPENSATION PLAN

 

Section 1. PURPOSE AND DEFINITIONS

        (a) Purpose. The purpose of the WPS ResourcesCorporation 2001 Omnibus Incentive Compensation Plan is to promote the interestsof the Company and its shareholders by (a) attracting and retaining executivesand other key employees of outstanding training, experience and ability; (b)motivating them, by means of performance-related incentives, to achieveperformance goals; and (c) enabling them to participate in the growth andfinancial success of the Company. It is intended that this purpose be effectedvia performance-based incentives and through awards or grants of stock optionsand various other rights with respect to shares of the Company's common stock,as provided herein, to such eligible employees (as defined in subsection (b)below).

        (b) Definitions. The following terms shall have thefollowing respective meanings unless the context requires otherwise:

           (1) An "Affiliate" of, or a person"affiliated" with, a specified person is a person that directly, orindirectly through one or more intermediaries, controls, or is controlled by, oris 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-ownedsubsidiary of the registrant) of which such person is an officer or partner oris, directly or indirectly, the beneficial owner of 10 percent or more of anyclass of equity securities, (ii) any trust or other estate in which such personhas a substantial beneficial interest or as to which such person serves astrustee or in a similar fiduciary capacity, and (iii) any relative or spouse ofsuch person, or any relative of such spouse, who has the same home as suchperson or who is a director or officer of the registrant or any of its parentsor subsidiaries.

           (2) The term "Annual Performance Right" shall meanthe right to receive up to the amount of compensation described in theParticipant's award agreement, taking into account the Target Award and thePerformance Formula, upon the attainment of one or more specified PerformanceGoals, subject to the terms and conditions of the award agreement and the Plan.

           (3) A person shall be deemed to be the "BeneficialOwner" of any securities:

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(A) which such Person or any of such Person's            Affiliates or Associates has the right to acquire (whether such            right is exercisable immediately or only after the passage of time)            pursuant to any agreement, arrangement, arrangement or            understanding, or upon the exercise of conversion rights, exchange            rights, rights, warrants or options, or otherwise; provided, however,            that a Person shall not be deemed the Beneficial Owner of, or to            beneficially own, (A) securities tendered pursuant to a tender or            exchange offer made by or on behalf of such Person or any of such            Person's Affiliates or Associates until such tendered securities are            accepted for purchase or (B) securities issuable upon exercise of            Rights pursuant to the terms of the Company's Rights Agreement with            Firstar Trust Company, dated as of December 12, 1996, as amended            from time to time (or any successor to such Rights Agreement) at any            time before the issuance of such securities;

(B) which such Person or any of such Person's            Affiliates or Associates, directly or indirectly, has the right to            vote or dispose of or has "beneficial ownership" of (as            determined pursuant to Rule 13d-3 of the General Rules and            Regulations under the Act), including pursuant to any agreement,            arrangement or understanding; provided, however, that            a Person shall not be deemed the Beneficial Owner of, or to            beneficially own, any security under this subparagraph (ii) as a            result of an agreement, arrangement or understanding to vote such            security if the agreement, arrangement or understanding: (A) arises            solely from a revocable proxy or consent given to such Person in            response to a public proxy or consent solicitation made pursuant to,            and in accordance with, the applicable rules and regulations under            the Act and (B) is not also then reportable on a Schedule 13D under            the Act (or any comparable or successor report); or

(C) which are beneficially owned, directly or            indirectly, by any other Person with which such Person or any of            such Person's Affiliates or Associates has any agreement,            arrangement or understanding for the purpose of acquiring, holding,            voting (except pursuant to a revocable proxy as described in Section            paragraph (B) above) or disposing of any voting securities of the            Company.

           (4) The term "Board" shall mean the Board ofDirectors of the Company.

           (5) The term "Change in Control" shall mean theoccurrence of any one of the following:

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(A) any Person (other than any employee benefit            plan of the Company or of any subsidiary of the Company, any Person            organized, appointed or established pursuant to the terms of any            such benefit plan or any trustee, administrator or fiduciary of such            a plan) is or becomes the Beneficial Owner of securities of the            Company representing at least 30% of the combined voting power of            the Company's then outstanding securities;

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

(C) there shall be consummated any merger,            consolidation, or reorganization of the Company with any other            corporation as a result of which less than 50% of the outstanding            voting securities of the surviving or resulting entity are owned by            the former shareholders of the Company other than a shareholder who            is an Affiliate or Associate of any party to such consolidation or            merger;

(D) there shall be consummated any merger of the            Company or share exchange involving the Company in which the Company            is not the continuing or surviving corporation other than a merger            of the Company in which each of the holders of the Company's Common            Stock immediately prior to the merger have the same proportionate            ownership of common stock of the surviving corporation immediately            after the merger;

(E) there shall be consummated any sale, lease,            exchange or other transfer (in one transaction or a series of            related transactions) of all, or substantially all, of the assets of            the Company to a Person which is not a wholly owned subsidiary of            the Company; or

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

           (6) The term "Code" shall mean the Internal RevenueCode of 1986, or any successor thereto, as the same may be amended and in effectfrom time to time.

           (7) The term "Committee" shall mean the committeeappointed pursuant to Section 2 to administer the Plan.

           (8) The term "Company" shall mean WPS ResourcesCorporation, or any successor thereto.

           (9) The term "Continuing Director" shall mean (i)any member of the Board of Directors of the Company who was a member of suchBoard on May 1, 1997, (ii) any successor of a Continuing Director who isrecommended to succeed a Continuing Director by a majority of the ContinuingDirectors then on such Board, and (iii) additional directors elected by amajority of the Continuing Directors then on such Board.

           (10) The term "Covered Executive" shall mean, withrespect to each taxable year of the Company, an individual who, on the last dayof the taxable year, is the Chief Executive Officer of the Company or among thefour highest compensated officers of the Company or any Subsidiary (other thanthe Chief Executive Officer), as determined pursuant to the executivecompensation disclosure rules under the Exchange Act.

           (11) The term "Employee" shall mean an employee ofthe Company or any Subsidiary. The term "Employee" shall also bedeemed to include any person who is an employee of any joint venture corporationor partnership, or comparable entity, in which the Company or Subsidiary has asubstantial equity interest.

           (12) The term "Exchange Act" shall mean theSecurities Exchange Act of 1934, or any successor thereto, as the same may beamended and in effect from time to time.

           (13) The term "Fair Market Value" shall mean theaverage of the highest and lowest sale prices at which a share of Stock shallhave been sold regular way on the New York Stock Exchange on the date of grantof any Option or Stock Appreciation Right or other relevant valuation date. Inthe event that any Option or Stock Appreciation Right shall be granted, or otherrelevant valuation date shall occur, on a date on which there were no such salesof Stock on the New York Stock Exchange, the Fair Market Value of a share ofStock shall be deemed to be the average of the highest and lowest sale prices onthe next preceding day on which there were such sales.****
           (14) The term "Final Award" shall mean the amountof compensation or the number of shares of Stock to be awarded finally to theParticipant who holds an Annual Performance Right or a Performance Stock Right,as determined by the Committee taking into account the extent to which theParticipant has achieved the Performance Goals.

           (15) The term "Option" or "Options" shallmean the option to purchase Stock in accordance with Section 6 and such otherterms and conditions as may be prescribed by the Committee. An Option may beeither an "incentive stock option", as such term is defined in theCode, or shall otherwise be designated as an option entitled to favorabletreatment under the Code ("ISO") or a "nonqualified stockoption" ("NQO"). ISOs and NQOs are individually called an"Option" and collectively called "Options".

           (16) The term "Other Stock-Based Awards" shall meanawards of Stock or other rights made in accordance with Section 7.

           (17) The term "Participant" shall mean an Employeewho has been designated for participation in the Plan.

           (18) The term "Performance Goals" shall mean, withrespect to any Annual Performance Right or Performance Stock Right granted to aParticipant who is a Covered Executive, a performance measure that is based uponone or more of the following objective business criteria established by theCommittee with respect to the Company and/or any Subsidiary, division, businessunit or component thereof: asset charge, asset turnover, return on sales,capital employed in the business, capital spending, cash flow, cost structureimprovements, complexity reductions, customer loyalty, diversity, earningsgrowth, earnings per share, economic value-added, environmental health, safety,increase in customer base, market share, net cash balance, net income, netincome margin, net operating cash flow, operating profit margin, operations andmaintenance reduction, productivity, response time, profits before tax,quality/customer satisfaction, return on assets, return on capital, return onequity, return on net operating assets, return on sales, revenue growth, salesmargin, sales volume, system reliability, total shareholder return, variablemargin and working capital. With respect to any Annual Performance Right orPerformance Stock Right granted to a Participant who is not a Covered Executive,performance goals may be based on one or more of the business criteria describedabove or any other criteria based on individual, business unit, Subsidiary,group or Company performance selected by the Committee. The Performance Goalsmay be expressed in absolute terms or relate to the performance of othercompanies or to an index.

           (19) The term "Performance Formula" shall mean aformula to be applied in relation to the Performance Goals in determining thepercentage, not to exceed 200%, of the Target Award earned by the Participantwith respect to a Plan Award.

           (20) The term "Performance Period" shall mean theperiod of time for which performance with respect to one or more PerformanceGoals with respect to any Annual Performance Right or Performance Stock Right isto be measured, with such period commencing not earlier than 90 days prior tothe date of grant of such Annual Performance Right or Performance Stock Right.

           (21) The terms "Performance Stock Rights" or"Performance Shares" shall mean the right to receive, without paymentto the Company, up to the number of shares of Stock described in theParticipant's award agreement, taking into account the Target Award and thePerformance Formula, upon the attainment of one or more specified PerformanceGoals, subject to the terms and provisions of the award agreement and the Plan.

           (22) The term "Person" shall mean any individual,firm, partnership, corporation or other entity, including any successor (bymerger or otherwise) of such entity, or a group of any of the foregoing actingin concert.

           (23) The term "Plan" shall mean the WPS ResourcesCorporation 2001 Omnibus Incentive Compensation Plan as the same may be amendedand in effect from time to time.

           (24) The term "Plan Awards" shall mean awards orgrants of incentive compensation, whether in cash or in the form of stockoptions or various other rights with respect to shares of Stock.

           (25) The term "Right" shall mean an AnnualPerformance Right or a Performance Stock Right, as required by the context.

           (26) The term "Stock Appreciation Right" shall meanthe right to receive, without payment to the Company, an amount of cash or Stockas determined in accordance with Section 6, based on the amount by which theFair Market Value of a share of Stock on the relevant valuation date exceeds thegrant price.

           (27) The term "Subsidiary" shall mean (A) anycorporation a majority of the voting stock of which is owned directly orindirectly by the Company or (B) any limited liability company a majority of themembership interest of which is owned, directly or indirectly, by the Company.

           (28) The term "Stock" shall mean shares of theCompany's common stock, par value $1.00 per share.

           (29) The term "Target Award" shall mean the amountof compensation or the number of shares of Stock, subject to adjustment pursuantto Section 12, to be earned by a Participant under an Annual Performance Rightor a Performance Stock Right if all of the Performance Goals are achieved.
**Section 2. ADMINISTRATION**
        (a) Committee. The Plan shall be administered by theCompensation and Nominating Committee of the Board consisting of not less thantwo (2) members of the Board who meet the "outside" directorrequirements of Section 162(m) of the Code and the "non-employeedirector" requirements of Rule 16b-3(b)(3) under the Exchange Act, or byany other committee appointed by the Board, provided the members of suchcommittee meet such requirements. The Committee shall administer the Plan andperform such other functions as are assigned to it under the Plan. The Committeeis authorized, subject to the provisions of the Plan, from time to time, toestablish such rules and regulations as it may deem appropriate for the properadministration of the Plan, and to make such determinations under, and suchinterpretations of, and to take such steps in connection with, the Plan and thePlan Awards as it may deem necessary or advisable, in each case in its solediscretion. The Committee's decisions and determinations under the Plan need notbe uniform and may be made selectively among Participants, whether or not theyare similarly situated. Any authority granted to the Committee may also beexercised by the Board, except to the extent that the grant or exercise of suchauthority would cause any qualified performance-based award to cease to qualifyfor exemption under Section 162(m) of the Code. To the extent that any permittedaction taken by the Board conflicts with any action taken by the Committee, theBoard action shall control.

        (b) Delegation of Authority. The Committee maydelegate any or all of its powers and duties under the Plan, including, but notlimited to, its authority to make awards under the Plan or to grant waiverspursuant to Section 9, to one or more other committees (including a committeeconsisting of two or more corporate officers) as it shall appoint, pursuant tosuch conditions or limitations as the Committee may establish; *provided,however*, that the Committee shall not delegate its authority to (1) act onmatters affecting any Participant who is subject to the reporting requirementsof Section 16(a) of the Exchange Act, or the liability provisions of Section16(b) of the Exchange Act (any such Participant being called a "Section 16Person") or (2) amend or modify the Plan pursuant to the provisions ofSection 15(b). To the extent of any such delegation, the term"Committee" when used herein shall mean and include any such delegate.****
        (c) Eligibility of Committee Members. No person whilea member of the Committee shall be eligible to hold or receive a Plan Award.
**Section 3. ANNUAL PERFORMANCE RIGHTS AND FINAL AWARDS**
        (a) Grant of Annual Performance Rights. The Committee,at any time and from time to time while the Plan is in effect, may grant orauthorize the granting of, Annual Performance Rights to such officers of theCompany and any Subsidiary, and other Employees, whether or not members of theBoard, as it may select and in such amount as it shall designate, subject to theprovisions of this Section 3.

        (b) Maximum Awards. The maximum amount that may begranted to a Covered Executive as a Final Award with respect to one or moreAnnual Performance Rights during any calendar year during any part of which thePlan is in effect, whether such Final Award is payable in cash or credited tothe Covered Executive's account under the WPS Resources Corporation DeferredCompensation Plan in accordance with subsection (d) below, shall be $1 million.

        (c) Terms and Provisions of Annual Performance Rights.Prior to the grant of any Annual Performance Right, the Committee shalldetermine the terms and provisions of such Right, including, without limitation(1) the Target Award; (2) one or more Performance Goals to be used to measureperformance under such Right, and the Performance Formula to be applied againstthe Performance Goals in determining the amount of compensation earned undersuch Right as a percentage of the Target Award; (3) the Performance Period, and(4) the effect of the Participant's termination of employment or death. Within90 days of commencement of a Performance Period, the Committee may establish aminimum threshold objective for any Performance Goal for such Performance Periodwhich, if not met, would result in no Final Award being made to any Participantwith respect to such Performance Goal for such Performance Period. During andafter the Performance Period, but prior to the Committee's final determinationof the Participant's Final Award as provided in subsection (d), the Committeemay adjust the Performance Goals, Performance Formula and Target Award andotherwise modify the terms and provisions of a Right granted to a Participantwho is not a Covered Executive, subject to the terms and conditions of the Plan.Each Right shall be evidenced by an award agreement in such form as theCommittee may determine.

        (d) Final Awards.

           (1) As soon as practicable following the completion of thePerformance Period relating to any Annual Performance Right, but not later than12 months following such completion, the Committee shall determine the extent towhich the Participant achieved the Performance Goals and the amount ofcompensation to be awarded as a Final Award to the Participant who holds suchRight. In making such determination, the Committee shall apply the applicablePerformance Formula for the Participant for the Performance Period against theaccomplishment of the related Performance Goals. The Committee may, in its solediscretion, reduce the amount of any Final Award that otherwise would be awardedto any Participant for any Performance Period. In addition, the Committee may,in its sole discretion, increase the amount of any Final Award that otherwisewould be awarded to any Participant who is not a Covered Executive. Any suchdetermination shall take into account (A) the extent to which the PerformanceGoals provided in such Right were, in the Committee's sole opinion, achieved,(B) the individual performance of such Participant during the relatedPerformance Period and (C) such other factors as the Committee may deemrelevant, including, without limitation, any change in circumstances orunforeseen events, relating to the Company, the economy or otherwise, since thedate of grant of such Right. The Committee shall notify such Participant of suchParticipant's Final Award as soon as practicable following such determination.****
           (2) Following the determination of each Final Award, unlessthe Participant has elected to defer all or a portion of the Final Award inaccordance with the procedures set forth in the WPS Resources CorporationDeferred Compensation Plan, the Final Award will be payable to the Participantin cash.
**Section 4. STOCK AVAILABLE FOR PLAN AWARDS**
        (a) Stock Subject to Plan. The Stock to be subject toor related to Plan Awards may be either authorized and unissued or held in thetreasury of the Company. The maximum number of shares of Stock with respect towhich Plan Awards may be granted under the Plan, subject to adjustment inaccordance with the provisions of Section 12, shall be two million(2,000,000) shares; (2) the maximum number ofshares subject to Options, with or without any related Stock AppreciationRights, or Stock Appreciation Rights (not related to Options) that may begranted pursuant to Section 6 to any Covered Executive during any calendar yearduring any part of which the Plan is in effect shall be 150,000 subject toadjustment in accordance with the provision of Section 12; and (3) the maximumnumber of shares of Stock that may be granted as Final Awards pursuant toSection 5 to any Covered Executive during any calendar year during any part ofwhich the Plan is in effect shall be 50,000, subject to adjustment in accordance with theprovision of Section 12.
    (b) Computation of Stock Available for Plan Awards.For the purpose of computing the total number of shares of Stock remainingavailable for Plan Awards at any time while the Plan is in effect, there shallbe debited against the total number of shares determined to be availablepursuant to subsections (a) and (c) of this Section 4, (1) the maximum number ofshares of Stock subject to issuance upon exercise of Options or StockAppreciation Rights granted under this Plan, (2) the maximum number of shares ofStock issuable under Performance Stock Rights granted under this Plan, and (3)the number of shares of Stock related to Other Stock-Based Awards granted underthis Plan, as determined by the Committee in each case as of the dates on whichsuch Plan Awards were granted.

    (c) Terminated, Expired or Forfeited Plan Awards. Theshares involved in the unexercised or undistributed portion of any terminated,expired or forfeited Plan Award shall be made available for further Plan Awards.Any shares of Stock made available for Plan Awards pursuant to this subsection(c) shall be in addition to the shares available pursuant to subsection (a) ofthis Section 4. Notwithstanding the foregoing, in the event any Option or StockAppreciation Right granted to a Covered Executive is canceled, the number ofshares of Stock subject to such canceled Option or Stock Appreciation Rightshall continue to count against the individual limit specified in subsection(a), in accordance with the requirements of Code Section 162(m).
**Section 5. PERFORMANCE STOCK RIGHTS AND FINAL AWARDS**
    (a) Grant of Performance Stock Rights. The Committee,at any time and from time to time while the Plan is in effect, may grant, orauthorize the granting of, Rights to such officers of the Company and anySubsidiary, and other key salaried Employees, whether or not members of theBoard, as it may select and for such numbers of shares as it shall designate,subject to the provisions of this Section 5 and Section 4.

    (b) Terms and Provisions of Performance Stock Rights.Prior to the grant of any Right, the Committee shall determine the terms andprovisions of each Right, including, without limitation (1) the Target Award;(2) one or more Performance Goals to be used to measure performance under suchRight, and the Performance Formula to be applied against the Performance Goalsin determining the number of shares of Stock earned under such Right as apercentage of the Target Award; (3) the Performance Period; (4) the period oftime, if any, during which the disposition of shares of Stock issuable undersuch Right shall be restricted as provided in subsection (a) of Section 10, *provided,however*, that the Committee may establish restrictions applicable to anyRight at the time of or at any time prior to the granting of the related FinalAward rather than at the time of granting such Right; and (5) the effect of theParticipant's termination of employment or death. Within 90 days of commencementof a Performance Period, the Committee may establish a minimum thresholdobjective for any Performance Goal for such Performance Period which, if notmet, would result in no Final Award being made to any Participant with respectto such Performance Goal for such Performance Period. During and after thePerformance Period, but prior to the Committee's final determination of theParticipant's Final Award as provided in subsection (d), the Committee mayadjust the Performance Goals, Performance Formula and Target Award and otherwisemodify the terms and provisions of a Right granted to a Participant who is not aCovered Executive, subject to the terms and conditions of the Plan. Each Rightshall be evidenced by an award agreement in such form as the Committee maydetermine.

    (c) Dividend Equivalents on Stock Performance Rights.

        (1) If the Committee shall determine, each Participant towhom a Right is granted shall be entitled to receive payment of the same amountof cash that such Participant would have received as cash dividends if, on eachrecord date during the Performance Period relating to such Right, suchParticipant had been the holder of record of a number of shares of Stock equalto 100% of the related Target Award (as adjusted pursuant to Section 12). Anysuch payment may be made at the same time as a dividend is paid or may bedeferred until the date that a Final Award is determined, as determined by theCommittee in its sole discretion. Such cash payments are hereinafter called"dividend equivalents".

        (2) Notwithstanding the provisions of subsection (c)(1), theCommittee may determine that, in lieu of receiving all or any portion of anysuch dividend equivalent in cash, a Participant shall receive an award of fullshares of Stock having a Fair Market Value approximately equal to the portion ofsuch dividend equivalent that was not paid in cash. Certificates for shares ofStock so awarded may be issued as of the payment date for the related cashdividend or may be deferred until the date that the Final Award is determined,and the shares of Stock covered thereby may be subject to the terms andconditions of the Right to which it relates (including but not limited to theattainment of the Performance Goals) and the terms and conditions of the Plan(including but not limited to Sections 5, 9, 10 and 12), all as determined bythe Committee in its sole discretion.

        (d) Final Awards.

        As soon as practicable following the completion of thePerformance Period relating to any Right, but not later than 12 months followingsuch completion, the Committee shall determine the extent to which theParticipant achieved the Performance Goals and the number of shares of Stock tobe awarded as a Final Award to the Participant who holds such Right. Each FinalAward shall represent only full shares of Stock, and any fractional share thatwould otherwise result from such Final Award calculation shall be disregarded.In making such determination, the Committee shall apply the applicablePerformance Formula for the Participant for the Performance Period against theaccomplishment of the related Performance Goals. The Committee may, in its solediscretion, reduce the amount of any Final Award that otherwise would be awardedto any Participant for any Performance Period. In addition, the Committee may,in its sole discretion, increase the amount of any Final Award that otherwisewould be awarded to any Participant who is not a Covered Executive. Any suchdetermination shall take into account (A) the extent to which the PerformanceGoals provided in such Right were, in the Committee's sole opinion, achieved,(B) the individual performance of such Participant during the relatedPerformance Period and (C) such other factors as the Committee may deemrelevant, including, without limitation, any change in circumstances orunforeseen events, relating to the Company, the economy or otherwise, since thedate of grant of such Right. The Committee shall notify such Participant of suchParticipant's Final Award as soon as practicable following such determination.****
            (1) Following the determination of each Final Award, unlessthe Participant has elected to defer all or a portion of the Final Award inaccordance with the procedures set forth in the WPS Resources CorporationDeferred Compensation Plan or unless the Committee has directed an alternateform of distribution, the Company shall issue or cause to be issued certificatesfor the number of shares of Stock representing such Final Award, registered inthe name of the Participant who received such Final Award. Such Participantshall thereupon become the holder of record of the number of shares of Stockevidenced by such certificates, entitled to dividends, voting rights and otherrights of a holder thereof, subject to the terms and provisions of the Plan,including, without limitation, the provisions of this subsection (d) andSections 9, 10 and 12. The Committee may require that such certificates bearsuch restrictive legend as the Committee may specify and be held by the Companyin escrow or otherwise pursuant to any form of agreement or instrument that theCommittee may specify. If the Committee has determined that deferred dividendequivalents shall be payable to a Participant with respect to any Right pursuantto subsection (c) of this Section 5, then concurrently with the issuance of suchcertificates, the Company shall deliver to such Participant a cash payment oradditional shares of Stock in settlement of such dividend equivalents.

 **Section 6. OPTIONS AND STOCK APPRECIATION RIGHTS**
        (a) Grant of Options.

           (1) The Committee, at any time and from time to time whilethe Plan is in effect, may authorize the granting of Options to such officers ofthe Company and any Subsidiary, and other key salaried Employees, whether or notmembers of the Board, as it may select, and for such numbers of shares as itshall designate, subject to the provisions of this Section 6 and Section 4.Each Option granted pursuant to the Plan shall be a NQO unless designated by theCommittee at the time of grant as an ISO.

           (2) The date on which an Option shall be granted shall be thedate of authorization of such grant or such later date as may be determined bythe Committee at the time such grant is authorized. Any individual may hold morethan one Option.

        (b) Price. In the case of each Option granted underthe Plan the option price shall be the Fair Market Value of Stock on the date ofgrant of such Option; *provided, however*, that the Committee may in itsdiscretion fix an option price in excess of the Fair Market Value of Stock onsuch date.

        (c) Grant of Stock Appreciation Rights.

           (1) The Committee, at any time and from time to time whilethe Plan is in effect, may authorize the granting of Stock Appreciation Rightsto such officers of the Company and any Subsidiary, and other key salariedEmployees, whether or not members of the Board, as it may select, and for suchnumbers of shares as it shall designate, subject to the provisions of thisSection 6 and Section 4. Each Stock Appreciation Right may relate to all ora portion of a specific Option granted under the Plan and may be grantedconcurrently with the Option to which it relates or at any time prior to theexercise, termination or expiration of such Option (a "Tandem SAR"),or may be granted independently of any Option, as determined by the Committee.If the Stock Appreciation Right is granted independently of an Option, the grantprice of such Stock Appreciation Right shall be the Fair Market Value of Stockon the date of grant; *provided, however*, that the Committee may, in itsdiscretion, fix a grant price in excess of the Fair Market Value of Stock onsuch grant date.

           (2) Upon exercise of a Stock Appreciation Right, theParticipant shall be entitled to receive, without payment to the Company, either(A) that number of shares of Stock determined by dividing (i) the total numberof shares of Stock subject to the Stock Appreciation Right being exercised bythe Participant, multiplied by the amount by which the Fair Market Value of ashare of Stock on the day the right is exercised exceeds the grant price (suchamount being hereinafter referred to as the "Spread"), by (ii) theFair Market Value of a share of Stock on the exercise date; or (B) cash in anamount determined by multiplying (i) the total number of shares of Stock subjectto the Stock Appreciation Right being exercised by the Participant, by (ii) theamount of the Spread; or (C) a combination of shares of Stock and cash, inamounts determined as set forth in clauses (A) and (B) above, as determined bythe Committee in its sole discretion; *provided, however*, that, in thecase of a Tandem SAR, the total number of shares which may be received uponexercise of a Stock Appreciation Right for Stock shall not exceed the totalnumber of shares subject to the related Option or portion thereof, and the totalamount of cash which may be received upon exercise of a Stock Appreciation Rightfor cash shall not exceed the Fair Market Value on the date of exercise of thetotal number of shares subject to the related Option or portion thereof.

        (d) Terms and Conditions.

           (1) Each Option and Stock Appreciation Right granted underthe Plan shall be exercisable on such date or dates, during such period, forsuch number of shares and subject to such further conditions as shall bedetermined pursuant to the provisions of the award agreement with respect tosuch Option and Stock Appreciation Right; *provided, however*, that aTandem SAR shall not be exercisable prior to or later than the time the relatedOption could be exercised; and *provided, further*, that in any event noOption or Stock Appreciation Right shall be exercised beyond ten years from thedate of grant.

           (2) The Committee may impose such conditions as it may deemappropriate upon the exercise of an Option or a Stock Appreciation Right,including, without limitation, a condition that the Stock Appreciation Right maybe exercised only in accordance with rules and regulations adopted by theCommittee from time to time.

           (3) With respect to Options issued with Tandem SARs, theright of a Participant to exercise the Tandem SAR shall be cancelled if and tothe extent the related Option is exercised, and the right of a Participant toexercise an Option shall be cancelled if and to the extent that shares coveredby such Option are used to calculate shares or cash received upon exercise ofthe Tandem SAR.

           (4) If any fractional share of Stock would otherwise bepayable to a Participant upon the exercise of an Option or Stock AppreciationRight, the Participant shall be paid a cash amount equal to the same fraction ofthe Fair Market Value of the Stock on the date of exercise.

        (e) Award Agreement. Each Option and StockAppreciation Right shall be evidenced by an award agreement in such form andcontaining such provisions not inconsistent with the provisions of the Plan asthe Committee from time to time shall approve.

        (f) Payment for Option Shares.

           (1) Payment for shares of Stock purchased upon exercise of anOption granted hereunder shall be made in such manner as is provided in theapplicable award agreement, which may include payment through a cash-lessexercise executed through a broker.

           (2) Unless the Committee shall provide otherwise in any awardagreement, any payment for shares of Stock purchased upon exercise of an Optiongranted hereunder may be made in cash, by delivery of shares of Stockbeneficially owned by the Participant, or by a combination of cash and Stock, atthe election of the Participant; *provided, however*, that any shares ofStock so delivered shall have been beneficially owned by the Participant for aperiod of not less than six months prior to the date of exercise. Any suchshares of Stock so delivered shall be valued at their Fair Market Value on thedate of such exercise. The Committee shall determine whether and if so theextent to which actual delivery of share certificates to the Company shall berequired.
**Section 7. STOCK AND OTHER STOCK-BASED AWARDS**
        (a) Grants of Other Stock-Based Awards. The Committee,at any time and from time to time while the Plan is in effect, may grant OtherStock-Based Awards to such officers of the Company and its Subsidiaries, andother key salaried Employees, whether or not members of the Board, as it mayselect. Such Plan Awards pursuant to which Stock is or may in the future beacquired, or Plan Awards valued or determined in whole or part by reference to,or otherwise based on, Stock, may include, but are not limited to, awards ofrestricted Stock or Plan Awards denominated in the form of "stockunits", grants of so-called "phantom stock" and optionscontaining terms or provisions differing in whole or in part from Optionsgranted pursuant to Section 6. Other Stock-Based Awards may be granted eitheralone, in addition to, in tandem with or as an alternative to any other kind ofPlan Award, grant or benefit granted under the Plan or under any other employeeplan of the Company, including a plan of any acquired entity.

        (b) Terms and Conditions. Subject to the provisions ofthe Plan, the Committee shall have the authority to determine the time or timesat which Other Stock-Based Awards shall be made, the number of shares of Stockor stock units and the like to be granted or covered pursuant to such PlanAwards (subject to the provisions of Section 4) and all other terms andconditions of such Plan Awards, including, but not limited to, whether such PlanAwards shall be payable or paid in cash, Stock or otherwise.

        (c) Consideration for Other Stock-Based Awards. In thediscretion of the Committee, any Other Stock-Based Award may be granted as aStock bonus for no consideration other than services rendered.
**Section 8. CASH AWARDS TO EMPLOYEES OF FOREIGN SUBSIDIARIESOR BRANCHES OR JOINT VENTURES**
        In order to facilitate the granting of Plan Awards toParticipants who are foreign nationals or who are employed outside of the UnitedStates of America, the Committee may provide for such special terms andconditions, including without limitation substitutes for Plan Awards, as theCommittee may consider necessary or appropriate to accommodate differences inlocal law, tax policy or custom. Such substitutes for Plan Awards may include arequirement that the Participant receive cash, in such amount as the Committeemay determine in its sole discretion, in lieu of any Plan Award or share ofStock that would otherwise have been granted to or delivered to such Participantunder the Plan. The Committee may approve any supplements to, or amendments,restatements or alternative versions of the Plan as it may consider necessary orappropriate for purposes of this Section 8 without thereby affecting the termsof the Plan as in effect for any other purpose, and the Secretary or otherappropriate officer of the Company may certify any such documents as having beenapproved and adopted pursuant to properly delegated authority; *provided,however,*that no such supplements, amendments, restatements or alternativeversions shall include any provision that is inconsistent with the terms of thePlan as then in effect. Participants subject to the laws of a foreignjurisdiction may request copies of, or the right to view, any materials that arerequired to be provided by the Company pursuant to the laws of suchjurisdiction.
**Section 9. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON**
        (a) Effect of Competitive Activity. Anything containedin the Plan to the contrary notwithstanding, if the employment of anyParticipant shall terminate, for any reason other than death, while any PlanAward granted to such Participant is outstanding hereunder, and such Participanthas not yet received the compensation or Stock covered by such Plan Award orotherwise received the full benefit of such Plan Award, such Participant, ifotherwise entitled thereto, shall receive such Stock or compensation or benefitonly if, during the entire period from the date of such Participant'stermination to the date of such receipt, such Participant shall have (1) madehimself or herself available, upon request, at reasonable times and upon areasonable basis, to consult with, supply information to and otherwise cooperatewith the Company or any Subsidiary with respect to any matter that shall havebeen handled by him or her or under his or her supervision while he or she wasin the employ of the Company or of any Subsidiary, and (2) refrained fromengaging in any activity that is directly or indirectly in competition with anyactivity of the Company or any Subsidiary.

        (b) Nonfulfillment of Competitive Activity Conditions:Waivers Under the Plan. In the event of a Participant's non-fulfillment ofany condition set forth in subsection (a) of this Section 9, such Participant'srights under any Plan Award shall be forfeited and cancelled forthwith; *provided,however*, that the nonfulfillment of such condition may at any time (whetherbefore, at the time of or subsequent to termination of employment) be waived inthe following manner:

           (1) with respect to any such Participant who at any timeshall have been a Section 16 Person, such waiver may be granted by theCommittee upon its determination that in its sole judgment there shall not havebeen and will not be any substantial adverse effect upon the Company or anySubsidiary by reason of the nonfulfillment of such condition; and

           (2) with respect to any other such Participant, such waivermay be granted by the Committee (or any delegate thereof) upon its determinationthat in its sole judgment there shall not have been and will not be any suchsubstantial adverse effect.

        (c) Effect of Inimical Conduct. Anything contained inthe Plan to the contrary notwithstanding, all rights of a Participant under anyPlan Award shall cease on and as of the date on which it has been determined bythe Committee that such Participant at any time (whether before or subsequent totermination of such Participant's employment) acted in a manner inimical to thebest interests of the Company or any Subsidiary.

        (d) Tax and Other Withholding. Prior to anydistribution of cash, Stock or Other Stock-Based Awards (including paymentsunder Section 5(c)) to any Participant, appropriate arrangements (consistentwith the Plan and any rules adopted hereunder) shall be made for the payment ofany taxes and other amounts required to be withheld by federal, state or locallaw.

        (e) Substitution. The Committee, in its solediscretion, may substitute a Plan Award (except ISOs) for another Plan Award orPlan Awards of the same or different type.
**Section 10. NON-TRANSFERABILITY OF PLAN AWARDS; RESTRICTIONSON DISPOSITION AND EXERCISE OF PLAN AWARDS**
        (a) Restrictions on Transfer of Rights or Final Awards.No Right or, until the expiration of any restriction period imposed by theCommittee, no shares of Stock covered by any Final Award, shall be transferred,pledged, assigned or otherwise disposed of by a Participant, except as permittedby the Plan, without the consent of the Committee, otherwise than by will or thelaws of descent and distribution; *provided, however*, that the Committeemay permit, on such terms as it may deem appropriate, use of Stock included inany Final Award as partial or full payment upon exercise of an Option under thePlan or a stock option under any other stock option plan of the Company prior tothe expiration of any restriction period relating to such Final Award.

        (b) Restrictions on Transfer of Options or StockAppreciation Rights. Unless the Committee determines otherwise, no Option orStock Appreciation Right shall be transferable by a Participant otherwise thanby will or the laws of descent and distribution, and during the lifetime of aParticipant the Option or Stock Appreciation Right shall be exercisable only bysuch Participant or such Participant's guardian or legal representative.

        (c) Restrictions on Transfer of Certain Other Stock-BasedAwards. Unless the Committee determines otherwise, no Other Stock-BasedAward shall be transferable by a Participant otherwise than by will or the lawsof descent and distribution, and during the lifetime of a Participant any suchOther Stock-Based Award shall be exercisable only by such Participant or suchParticipant's guardian or legal representative.

        (d) Attachment and Levy. No Plan Award shall besubject, in whole or in part, to attachment, execution or levy of any kind, andany purported transfer in violation hereof shall be null and void. Withoutlimiting the generality of the foregoing, no domestic relations order purportingto authorize a transfer of a Plan Award, or to grant to any person other thanthe Participant the authority to exercise or otherwise act with respect to aPlan Award, shall be recognized as valid.
**Section 11. DESIGNATION OF BENEFICIARIES**
    Anything contained in the Plan to the contrarynotwithstanding, a Participant may file with the Company a written designationof a beneficiary or beneficiaries under the Plan, subject to such limitations asto the classes and number of beneficiaries and contingent beneficiaries and suchother limitations as the Committee from time to time may prescribe. AParticipant may from time to time revoke or change any such designation ofbeneficiary. Any designation of a beneficiary under the Plan shall becontrolling over any other disposition, testamentary or otherwise; *provided,however*, that if the Committee shall be****in doubt as to theentitlement of any such beneficiary to receive any Right, Final Award, Option,Stock Appreciation Right or Other Stock-Based Award, or if applicable lawrequires the Company to do so, the Committee may recognize only the legalrepresentative of such Participant, in which case the Company, the Committee andthe members thereof shall not be under any further liability to anyone. In theevent of the death of any Participant, the term "Participant" as usedin the Plan shall thereafter be deemed to refer to the beneficiary designatedpursuant to this Section 11 or, if no such designation is in effect, theexecutor or administrator of the estate of such Participant, unless the contextotherwise requires.
**Section 12. MERGER, CONSOLIDATION, STOCK DIVIDENDS, ETC.**
        (a) Adjustments. In the event of any merger,consolidation, reorganization, stock split, stock dividend or other eventaffecting Stock, an appropriate adjustment shall be made in the total number ofshares available for Plan Awards and in all other provisions of the Plan thatinclude a reference to a number of shares, and in the numbers of shares coveredby, and other terms and provisions (including, but not limited to the grant orexercise price of any Plan Award) of outstanding Plan Awards.

        (b) Committee Determinations. The foregoingadjustments and the manner of application of the foregoing provisions shall bedetermined by the Committee in its sole discretion. Any such adjustment mayprovide for the elimination of any fractional share which might otherwise becomesubject to a Plan Award.
**Section 13. ACCELERATION OF PAYMENT OR MODIFICATION OF PLANAWARDS**
        (a) Acceleration and Modification. The Committee, inthe event of the death of a Participant or in any other circumstance, mayaccelerate distribution of any Plan Award in its entirety or in a reducedamount, or modify any Plan Award, in each case on such basis and in such manneras the Committee may determine in its sole discretion.

        (b) Change in Control. Notwithstanding any otherprovision of the Plan, unless the Committee determines otherwise at the time ofgrant, upon the occurrence of a Change in Control, (1) any Plan Awardsoutstanding as of the date of such Change in Control, and that are not thenvested, shall become fully vested if vesting is based solely upon length of theemployment relationship, or shall become fully vested at the Target Level (or ifgreater, the then projected Final Award) prorated for the portion of thePerformance Period that has been completed as of the date of the Change inControl, (2) any restrictions or other conditions applicable to any outstandingAwards shall lapse, and such Plan Awards shall become free of all restrictionsand conditions; and (3) any such Plan Awards shall be immediately paid to theParticipant.
**Section 14. RIGHTS AS A STOCKHOLDER**
    A Participant shall not have any rights as a stockholder withrespect to any Stock covered by any Plan Award until such Participant shall havebecome the holder of record of such Stock.
**Section 15. TERM, AMENDMENT, MODIFICATION AND TERMINATION OFTHE PLAN AND AGREEMENTS**
        (a) Term. Unless terminated earlier pursuant tosubsection (b), the Plan shall terminate on December 31, 2010.

        (b) Amendment, Modification and Termination of Plan.The Board may, from time to time, amend or modify the Plan or any outstandingPlan Award, including without limitation, to authorize the Committee to makePlan Awards payable in other securities or other forms of property of a kind tobe determined by the Committee, and such other amendments as may be necessary ordesirable to implement such Plan Awards, or may terminate the Plan or anyprovision thereof; *provided, however*, that no such action of the Board,without approval of the stockholders, may (1) increase the total number ofshares of Stock with respect to which Plan Awards may be granted under the Planor the individual limits specified in Section 4(a), (2) extend the term of thePlan as set forth in paragraph (a) of this Section 15, (3) permit any personwhile a member of the Committee or any other committee of the Boardadministering the Plan to be eligible to receive or hold a Plan Award, or (4)permit the Company to decrease the grant price of any outstanding Option orStock Appreciation Right.

        (c) Limitation and Survival. No amendment to ortermination of the Plan or any provision hereof, and no amendment orcancellation of any outstanding Plan Award, by the Board or the stockholders ofthe Company, shall, without the written consent of the affected Participant,adversely affect any outstanding Plan Award. The Committee's authority to actwith respect to any outstanding Plan Award, and a Participant's ability toexercise an outstanding Plan award, shall survive termination of the Plan.

        (d) Amendments for Changes in Law. Notwithstanding theforegoing provisions, the Board shall have the authority to amend outstandingPlan Awards and the Plan to take into account changes in law and tax andaccounting rules as well as other developments, and to grant Plan Awards thatqualify for beneficial treatment under such rules, without stockholder approval.
**Section 16. INDEMNIFICATION AND EXCULPATION**
        (a) Indemnification. Each person who is or shall havebeen a member of the Board, the Committee, or of any other committee of theBoard administering the Plan or of any committee appointed by the foregoingcommittees, shall be indemnified and held harmless by the Company against andfrom any and all loss, cost, liability or expense that may be imposed upon orreasonably incurred by such person in connection with or resulting from anyclaim, action, suit or proceeding to which such person may be or become a partyor in which such person may be or become involved by reason of any action takenor failure to act under the Plan and against and from any and all amounts paidby such person in settlement thereof (with the Company's written approval) orpaid by such person in satisfaction of a judgment in any such action, suit orproceeding, except a judgment in favor of the Company based upon a finding ofsuch person's lack of good faith; *subject, however*, to the conditionthat, upon the institution of any claim, action, suit or proceeding against suchperson, such person shall in writing give the Company an opportunity, at its ownexpense, to handle and defend the same before such person undertakes to handleand defend it on such person's behalf. The foregoing right of indemnificationshall not be exclusive of any other right to which such person may be entitledas a matter of law or otherwise, or any power that the Company may have toindemnify or hold such person harmless.

        (b) Exculpation. Each member of the Board, theCommittee, or of any other committee of the Board administering the Plan or anycommittee appointed by the foregoing committees, and each officer and employeeof the Company, shall be fully justified in relying or acting in good faith uponany information furnished in connection with the administration of the Plan byany appropriate person or persons other than such person. In no event shall anyperson who is or shall have been a member of the Board, the Committee, or of anyother committee of the Board administering the Plan or of any committeeappointed by the foregoing committees, or an officer or employee of the Company,be held liable for any determination made or other action taken or any omissionto act in reliance upon any such information, or for any action (including thefurnishing of information) taken or any failure to act, if in good faith.
**Section 17. EXPENSES OF PLAN**
    The entire expense of offering and administering the Planshall be borne by the Company and its participating Subsidiaries; *provided,*thatthe costs and expenses associated with the redemption or exercise of any PlanAward, including but not limited to commissions charged by any agent of theCompany, may be charged to the Participants.
**Section 18. FINALITY OF DETERMINATIONS**
    Each determination, interpretation, or other action made ortaken pursuant to the provisions of the Plan by the Board, the Committee or anycommittee of the Board administering the Plan or any committee appointed by theforegoing committees, shall be final and shall be binding and conclusive for allpurposes and upon all persons, including, but without limitation thereto, theCompany, the stockholders, the Committee and each of the members thereof, andthe directors, officers, and employees of the Company and its Subsidiaries, theParticipants, and their respective successors in interest.
**Section 19. NO RIGHTS TO CONTINUED EMPLOYMENT OR TO PLAN AWARD**
        (a) No Right to Employment. Nothing contained in thisPlan, or in any booklet or document describing or referring to the Plan, shallbe deemed to confer on any Participant the right to continue as an Employee ordirector of the Company or Subsidiary, whether for the duration of anyPerformance Period, the duration of any vesting period under a Plan Award, orotherwise, or affect the right of the Company or Subsidiary to terminate theemployment of any Participant for any reason.

        (b) No Right to Award. No Employee or other personshall have any claim or right to be granted a Plan Award under the Plan. Havingreceived an Award under the Plan shall not give a Participant or any otherperson any right to receive any other Plan Award under the Plan. A Participantshall have no rights in any Plan Award, except as set forth herein and in theapplicable award grant.
**Section 20. GOVERNING LAW AND CONSTRUCTION**
    The Plan and all actions taken hereunder shall be governedby, and the Plan shall be construed in accordance with the laws of the State ofWisconsin without regard to the principle of conflict of laws. Titles andheadings to Sections are for purposes of reference only, and shall in no waylimit, define or otherwise affect the meaning or interpretation of the Plan.

 **Section 21. SECURITIES AND STOCK EXCHANGE REQUIREMENTS**
        (a) Restrictions on Resale. Notwithstanding any otherprovision of the Plan, no person who acquires Stock pursuant to the Plan may,during any period of time that such person is an affiliate of the Company(within the meaning of the rules and regulations of the Securities ExchangeCommission) sell or otherwise transfer such Stock, unless such offer and sale ortransfer is made (1) pursuant to an effective registration statement under theSecurities Act of 1933 ("1933 Act"), which is current and includes theStock to be sold, or (2) pursuant to an appropriate exemption from theregistration requirements of the 1933 Act, such as that set forth in Rule 144promulgated pursuant thereto.

    (b) Registration, Listing and Qualification of Shares ofCommon Stock. Notwithstanding any other provision of the Plan, if at anytime the Committee shall determine that the registration, listing orqualification of the Stock covered by a Plan Award upon any securities exchangeor under any foreign, federal, state or local law or practice, or the consent orapproval of any governmental regulatory body, is necessary or desirable as acondition of, or in connection with, the granting of such Plan Award or thepurchase or receipt of Stock in connection therewith, no Stock may be purchased,delivered or received pursuant to such Plan Award unless and until suchregistration, listing, qualification, consent or approval shall have beeneffected or obtained free of any condition not acceptable to the Committee. Anyperson receiving or purchasing Stock pursuant to a Plan Award shall make suchrepresentations and agreements and furnish such information as the Committee mayrequest to assure compliance with the foregoing or any other applicable legalrequirements. The Company shall not be required to issue or deliver anycertificate or certificates for Stock under the Plan prior to the Committee'sdetermination that all related requirements have been fulfilled. The Companyshall in no event be obligated to register any securities pursuant to the 1933Act or applicable state or foreign law or to take any other action in order tocause the issuance and delivery of such certificates to comply with any suchlaw, regulation, or requirement.
**Section 22. EFFECTIVE DATE**
    Subject to Section 23 below, the Plan shall become effectiveJanuary 1, 2001.**Section 23. **VOTE REQUIRED**
    The affirmative vote of the holders of a majority of thetotal votes cast on the proposal to approve the Plan at the 2001 annual meetingof shareholders of the Company will be required for approval of the Plan.**