Document:

Exhibit 10.2

WPS RESOURCES CORPORATION

2005 OMNIBUS INCENTIVE COMPENSATION PLAN

 

 

 

Section 1. PURPOSE AND DEFINITIONS

        (a) Purpose. The purpose of the WPS Resources
Corporation 2005 Omnibus Incentive Compensation Plan is to promote the interests
of the Company and its shareholders by (a) attracting and retaining executives
and other key employees of outstanding training, experience and ability; (b)
motivating them, by means of performance-related incentives, to achieve
performance goals; and (c) enabling them to participate in the growth and
financial success of the Company. It is intended that this purpose be effected
via performance-based incentives and through awards or grants of stock options
and various other rights with respect to shares of the Company's common stock,
as provided herein, to such eligible employees (as defined in subsection (b)
below).

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

           
(1) An "Affiliate" of, or a person
"affiliated" with, a specified person is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified and the term
"Associate" used to indicate a relationship with any person, means (i)
any corporation or organization (other than the registrant or a majority-owned
subsidiary of the registrant) of which such person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of equity securities, (ii) any trust or other estate in which such person
has a substantial beneficial interest or as to which such person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such person, or any relative of such spouse, who has the same home as such
person or who is a director or officer of the registrant or any of its parents
or subsidiaries.

 

<PAGE>

 

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

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

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

            (B) which such Person or any of such Person's
            Affiliates or Associates, directly or indirectly, has the right to
            vote or dispose of or has "beneficial ownership" of (as
            determined pursuant to Rule 13d-3 of the General Rules and
            Regulations under the Act), including pursuant to any agreement,
            arrangement or understanding; provided, however, that
            a Person shall not be deemed the Beneficial Owner of, or to
            beneficially own, any security under this subparagraph (ii) as a
            result of an agreement, arrangement or understanding to vote such
            security if the agreement, 

   

-2-

<PAGE>

   

             arrangement or understanding: (A) arises
            solely from a revocable proxy or consent given to such Person in
            response to a public proxy or consent solicitation made pursuant to,
            and in accordance with, the applicable rules and regulations under
            the Act and (B) is not also then reportable on a Schedule 13D under
            the Act (or any comparable or successor report); or

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

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

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

  
            (A) any Person (other than any employee benefit
            plan of 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 WPS
            Resources Corporation'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 WPS Resources Corporation with
            any other corporation as a result of which less than 50% of the
            outstanding voting securities of 

     

    -3-

  

<PAGE>

  
     

             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;

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

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

  

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

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

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

           
(9) The term "Continuing Director" shall mean (i)
any member of the Board of Directors of 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 

 

-4-

<PAGE>

 

 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.

           
(10) The term "Covered Executive" shall mean, with
respect to each taxable year of the Company, an individual who, on the last day
of the taxable year, is the Chief Executive Officer of the Company or among the
four highest compensated officers of the Company and its subsidiaries (other
than the Chief Executive Officer), as determined pursuant to the executive
compensation disclosure rules under the Exchange Act.

           
(11) The term "Employee" shall mean an employee of
the Company or any Subsidiary. The term "Employee" shall also be
deemed to include any person who is an employee of any joint venture corporation
or partnership, or comparable entity, in which the Company or Subsidiary has a
substantial equity interest.

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

           
(13) The term "Fair Market Value" shall mean the
average of the highest and lowest sale prices at which a share of Stock shall
have been sold regular way on the New York Stock Exchange on the date of grant
of any Option or Stock Appreciation Right or other relevant valuation date. In
the event that any Option or Stock Appreciation Right shall be granted, or other
relevant valuation date shall occur, on a date on which there were no such sales
of Stock on the New York Stock Exchange, the Fair Market Value of a share of
Stock shall be deemed to be the average of the highest and lowest sale prices on
the next preceding day on which there were such sales.

           
(14) The term "Final Award" shall mean the amount
of compensation or the number of shares of Stock to be awarded finally to the
Participant who holds an Annual Performance Right or a Performance Stock Right,
as determined by the Committee taking into account the extent to which the
Participant has achieved the Performance Goals.

           
(15) The term "Option" or "Options" shall
mean the option to purchase Stock in accordance with Section 6 and such other
terms and conditions as may be prescribed by the Committee. An Option may be
either an "incentive stock option", as such term is defined in 

 

-5-

<PAGE>

 

 the
Code, or shall otherwise be designated as an option entitled to favorable
treatment under the Code ("ISO") or a "nonqualified stock
option" ("NQO"). ISOs and NQOs are individually called an
"Option" and collectively called "Options".

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

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

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

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

 

-6-

<PAGE>

 

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

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

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

           
(23) The term "Plan" shall mean the WPS Resources
Corporation 2005 Omnibus Incentive Compensation Plan as the same may be amended
and in effect from time to time.

           
(24) The term "Plan Awards" shall mean awards or
grants of incentive compensation, whether in cash or in the form of Options,
Stock Appreciation Rights, Performance Shares, Restricted Stock, or Other Stock
Based Awards.

           
(25) The term "Restricted Stock" or
"Restricted Shares" shall mean shares of Stock delivered to (or held
in escrow or in a book account for the benefit of) a Participant, subject to
such restrictions on the Participant's right to retain the shares as the
Committee shall, in its discretion, determine.

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

           
(27) The term "Stock Appreciation Right" shall mean
the right to receive, without payment to the Company, an amount of cash or Stock
as determined in 

 

-7-

<PAGE>

 

 accordance with Section 6, based on the amount by which the
Fair Market Value of a share of Stock on the relevant valuation date exceeds the
grant price.

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

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

           
(30) The term "Target Award" shall mean the amount
of compensation or the number of shares of Stock, subject to adjustment pursuant
to Section 12, to be earned by a Participant under an Annual Performance Right
or a Performance Stock Right if all of the Performance Goals are achieved.

Section 2. ADMINISTRATION

        (a) Committee. The Plan shall be administered by the
Compensation Committee of the Board consisting of not less than two (2) members
of the Board who meet the "outside" director requirements of Section
162(m) of the Code, the independence standards of the New York Stock Exchange
and the "non-employee director" requirements of Rule 16b-3(b)(3) under
the Exchange Act, or by any other committee appointed by the Board, provided
the members of such committee meet such requirements. The Committee shall
administer the Plan and perform such other functions as are assigned to it under
the Plan. The Committee is authorized, subject to the provisions of the Plan,
from time to time, to establish such rules and regulations as it may deem
appropriate for the proper administration of the Plan, and to make such
determinations under, and such interpretations of, and to take such steps in
connection with, the Plan and the Plan Awards as it may deem necessary or
advisable, in each case in its sole discretion. The Committee's decisions and
determinations under the Plan need not be uniform and may be made selectively
among Participants, whether or not they are similarly situated. Any authority
granted to the Committee may also be exercised by the Board, except to the
extent that the grant or exercise of such authority would cause any qualified
performance-based award to 

 

-8-

<PAGE>

 

 cease to qualify for exemption under Section 162(m)
of the Code. To the extent that any permitted action taken by the Board
conflicts with any action taken by the Committee, the Board action shall
control.

        (b) Delegation of Authority. The Committee may
delegate any or all of its powers and duties under the Plan, including, but not
limited to, its authority to make awards under the Plan or to grant waivers
pursuant to Section 9, to one or more of its members or to one or more officers
of the Company as it shall appoint, and with any such delegation to be subject
to such conditions or limitations as the Committee may establish; provided,
however, that the Committee shall not delegate its authority to (1) act
on matters affecting any Participant who is subject to the reporting
requirements of Section 16(a) of the Exchange Act, or the liability provisions
of Section 16(b) of the Exchange Act (any such Participant being called a
"Section 16 Person") or (2) amend or modify the Plan pursuant to the
provisions of Section 15(b). Further, no person to whom authority has been
delegated shall grant a Plan Award to himself or herself or otherwise administer
or interpret a Plan Award that has been previously granted to such person. To
the extent of any such delegation, the term "Committee" when used
herein shall mean and include (except for purposes of subsection (c) below) any
such delegate.

        (c) Eligibility of Committee Members. No person while
a member of the Committee shall be eligible to hold or receive a Plan Award.

Section 3. ANNUAL PERFORMANCE RIGHTS AND FINAL AWARDS

        (a) Grant of Annual Performance Rights. The Committee,
at any time and from time to time while the Plan is in effect, may grant or
authorize the granting of, Annual Performance Rights to such officers of the
Company and any Subsidiary, and other Employees, whether or not members of the
Board, as it may select and in such amount as it shall designate, subject to the
provisions of this Section 3.

        (b) Maximum Awards. The maximum amount that may be
granted to a Covered Executive as a Final Award with respect to one or more
Annual Performance Rights during any calendar year during any part of which the
Plan is in effect, whether such Final Award is payable in cash or credited to
the Covered Executive's account under the WPS 

 

-9-

<PAGE>

 

 Resources Corporation Deferred
Compensation Plan in accordance with subsection (d) below, shall be $2 million.

        (c) Terms and Provisions of Annual Performance Rights.
Prior to the grant of any Annual Performance Right, the Committee shall
determine the terms and provisions of such Right, including, without limitation
(1) the Target Award; (2) one or more Performance Goals to be used to measure
performance under such Right, and the Performance Formula to be applied against
the Performance Goals in determining the amount of compensation earned under
such Right as a percentage of the Target Award; (3) the Performance Period, and
(4) the effect of the Participant's termination of employment or death. Within
90 days of commencement of a Performance Period, the Committee may establish a
minimum threshold objective for any Performance Goal for such Performance Period
which, if not met, would result in no Final Award being made to any Participant
with respect to such Performance Goal for such Performance Period. During and
after the Performance Period, but prior to the Committee's final determination
of the Participant's Final Award as provided in subsection (d), the Committee
may adjust the Performance Goals, Performance Formula and Target Award and
otherwise modify the terms and provisions of a Right granted to a Participant
who is not a Covered Executive, subject to the terms and conditions of the Plan.
Each Right shall be evidenced by an award agreement in such form as the
Committee may determine.

        (d) Final Awards.

           
(1) As soon as practicable following the completion of the
Performance Period relating to any Annual Performance Right, but not later than
12 months following such completion, the Committee shall determine the extent to
which the Participant achieved the Performance Goals and the amount of
compensation to be awarded as a Final Award to the Participant who holds such
Right. In making such determination, the Committee shall apply the applicable
Performance Formula for the Participant for the Performance Period against the
accomplishment of the related Performance Goals. The Committee may, in its sole
discretion, reduce the amount of any Final Award that otherwise would be awarded
to any Participant for any Performance Period. In addition, the Committee may,
in its sole discretion, increase the amount of any Final Award that otherwise
would be awarded to any Participant who 

 

-10-

<PAGE>

 

 is not a Covered Executive. Any such
determination shall take into account (A) the extent to which the Performance
Goals provided in such Right were, in the Committee's sole opinion, achieved,
(B) the individual performance of such Participant during the related
Performance Period and (C) such other factors as the Committee may deem
relevant, including, without limitation, any change in circumstances or
unforeseen events, relating to the Company, the economy or otherwise, since the
date of grant of such Right. The Committee shall notify such Participant of such
Participant's Final Award as soon as practicable following such determination.

           
(2) Following the determination of each Final Award, unless
the Participant has elected to defer all or a portion of the Final Award in
accordance with the procedures set forth in the WPS Resources Corporation
Deferred Compensation Plan, the Final Award will be payable to the Participant
in cash.

Section 4. STOCK AVAILABLE FOR PLAN AWARDS

        (a) Stock Subject to Plan. The Stock issued under the
Plan in satisfaction of Plan Awards may be either authorized and unissued or
held in the treasury of the Company.

           
(1) Aggregate Share Limit. The maximum number of
shares of Stock that may be issued under the Plan in satisfaction of Plan
Awards, subject to adjustment in accordance with the provisions of Section 12,
shall be equal to one million six hundred thousand (1,600,000) shares. Upon this
Plan being approved by the Company's shareholders in accordance with Section 23,
no further Plan Awards shall be granted under or pursuant to the WPS Resources
Corporation 2001 Omnibus Incentive Compensation Plan ("2001 Plan"); provided,
that the 2001 Plan will continue to operate in accordance with its terms
with respect to Plan Awards previously granted.

           
(2) Limit on Full-Value Awards. Of the shares of Stock
authorized for issuance under Section 4(a)(1) above, no more than four hundred
thousand (400,000) of such shares shall be granted as Performance Shares,
Restricted Stock or Other Stock-Based Awards.

 

-11-

<PAGE>

 

           
(3) Limits on Plan Awards to Covered Executives. In
addition to the aggregate share limitations sets forth in Section 4(a)(1) and
4(a)(2) above, the following individual limitations shall apply with respect to
Plan Awards granted to any Covered Executive:

  
            (A) The maximum number of shares subject to
            Options, with or without any related Stock Appreciation Rights, or
            Stock Appreciation Rights (not related to Options) that may be
            granted pursuant to Section 6 to any Covered Executive during any
            calendar year during any part of which the Plan is in effect shall
            be 250,000, subject to adjustment in accordance with the provision
            of Section 12; and

            (B) The maximum number of shares of Stock that
            may be granted as Final Awards pursuant to Section 5 or as Code
            Section 162(m) performance-based awards under Section 7 to any
            Covered Executive during any calendar year during any part of which
            the Plan is in effect shall be 50,000, subject to adjustment in
            accordance with the provision of Section 12.

  

        (b) Computation of Stock Available for Plan Awards.
For the purpose of computing the total number of shares of Stock remaining
available for Plan Awards at any time while the Plan is in effect, there shall
be debited against the total number of shares determined to be available
pursuant to this Section 4, (1) the maximum number of shares of Stock subject to
Options or Stock Appreciation Rights granted under this Plan, (2) the maximum
number of shares of Stock issuable under Performance Stock Rights granted under
this Plan, and (3) the number of shares of Stock related to Other Stock-Based
Awards granted under this Plan, as determined by the Committee in each case as
of the dates on which such Plan Awards were granted.

        (c) Terminated, Expired, Unearned or Forfeited Plan Awards.
The shares involved in the unexercised or undistributed portion of any
terminated, expired, unearned or forfeited Plan Award shall be reinstated to the
pool of available shares and shall be made available for further Plan Awards.
Notwithstanding the foregoing, in the event any Option or Stock Appreciation
Right granted to a Covered Executive is canceled, the number of shares of 

 

-12-

<PAGE>

 

 Stock
subject to such canceled Option or Stock Appreciation Right shall continue to
count against the individual limit specified in subsection (a)(3), in accordance
with the requirements of Code Section 162(m).

Section 5. PERFORMANCE STOCK RIGHTS AND FINAL AWARDS

        (a) Grant of Performance Stock Rights. The Committee,
at any time and from time to time while the Plan is in effect, may grant, or
authorize the granting of, Rights to such officers of the Company and any
Subsidiary, and other key salaried Employees, whether or not members of the
Board, as it may select and for such numbers of shares as it shall designate,
subject to the provisions of this Section 5 and Section 4.

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

 

-13-

<PAGE>

 

        (c) Dividend Equivalents on Stock Performance Rights.

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

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

        (d) Final Awards.

As soon as practicable following the completion of the
Performance Period relating to any Right, but not later than 12 months following
such completion, the Committee shall determine the extent to which the
Participant achieved the Performance Goals and the number of shares of Stock to
be awarded as a Final Award to the Participant who holds such Right. Each Final
Award shall represent only full shares of Stock, and any fractional share that
would otherwise result from such Final Award calculation shall be disregarded.
In making such determination, the Committee shall apply the applicable
Performance Formula for the Participant for the Performance Period against the
accomplishment of the related Performance Goals. The Committee may, in its sole
discretion, reduce the amount of any Final Award that otherwise 

 

-14-

<PAGE>

 

 would be awarded
to any Participant for any Performance Period. In addition, the Committee may,
in its sole discretion, increase the amount of any Final Award that otherwise
would be awarded to any Participant who is not a Covered Executive. Any such
determination shall take into account (A) the extent to which the Performance
Goals provided in such Right were, in the Committee's sole opinion, achieved,
(B) the individual performance of such Participant during the related
Performance Period and (C) such other factors as the Committee may deem
relevant, including, without limitation, any change in circumstances or
unforeseen events, relating to the Company, the economy or otherwise, since the
date of grant of such Right. The Committee shall notify such Participant of such
Participant's Final Award as soon as practicable following such determination.

           
(1) Following the determination of each Final Award, unless
the Participant has elected to defer all or a portion of the Final Award in
accordance with the procedures set forth in the WPS Resources Corporation
Deferred Compensation Plan or unless the Committee has directed an alternate
form of distribution, the Company shall issue or cause to be issued certificates
for the number of shares of Stock representing such Final Award, registered in
the name of the Participant who received such Final Award. Such Participant
shall thereupon become the holder of record of the number of shares of Stock
evidenced by such certificates, entitled to dividends, voting rights and other
rights of a holder thereof, subject to the terms and provisions of the Plan,
including, without limitation, the provisions of this subsection (d) and
Sections 9, 10 and 12. The Committee may require that such certificates bear
such restrictive legend as the Committee may specify and be held by the Company
in escrow or otherwise pursuant to any form of agreement or instrument that the
Committee may specify. If the Committee has determined that deferred dividend
equivalents shall be payable to a Participant with respect to any Right pursuant
to subsection (c) of this Section 5, then concurrently with the issuance of such
certificates, the Company shall deliver to such Participant a cash payment or
additional shares of Stock in settlement of such dividend equivalents.

 

-15-

<PAGE>

 

Section 6. OPTIONS AND STOCK APPRECIATION RIGHTS

        (a) Grant of Options.

           
(1) The Committee, at any time and from time to time while
the Plan is in effect, may authorize the granting of Options to such officers of
the Company and any Subsidiary, and other key salaried Employees, whether or not
members of the Board, as it may select, and for such numbers of shares as it
shall designate, subject to the provisions of this Section 6 and Section 4.
Each Option granted pursuant to the Plan shall be a NQO unless designated by the
Committee at the time of grant as an ISO.

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

        (b) Price. In the case of each Option granted under
the Plan the option price shall be the Fair Market Value of Stock on the date of
grant of such Option; provided, however, that the Committee may in
its discretion fix an option price in excess of (but not lower than) the Fair
Market Value of Stock on such date.

        (c) Grant of Stock Appreciation Rights.

           
(1) The Committee, at any time and from time to time while
the Plan is in effect, may authorize the granting of Stock Appreciation Rights
to such officers of the Company and any Subsidiary, and other key salaried
Employees, whether or not members of the Board, as it may select, and for such
numbers of shares as it shall designate, subject to the provisions of this
Section 6 and Section 4. Each Stock Appreciation Right may relate to all or
a portion of a specific Option granted under the Plan and may be granted
concurrently with the Option to which it relates or at any time prior to the
exercise, termination or expiration of such Option (a "Tandem SAR"),
or may be granted independently of any Option, as determined by the Committee.
If the Stock Appreciation Right is granted independently of an Option, the grant
price of such Stock Appreciation Right shall be the Fair Market Value of Stock
on the date of grant; provided, however, that the Committee may,
in its discretion, fix a grant price in excess of (but not less than) the Fair
Market Value of Stock on such grant date.

 

-16-

<PAGE>

 

           
(2) Upon exercise of a Stock Appreciation Right that is not a
Fixed Term Stock Appreciation Right (as defined below), the Participant will be
entitled to receive, without payment to the Company, that number of shares of
Stock determined by dividing (i) the total number of shares of Stock subject to
the Stock Appreciation Right being exercised by the Participant, multiplied by
the amount by which the Fair Market Value of a share of Stock on the day the
right is exercised exceeds the grant price, by (ii) the Fair Market Value of a
share of Stock on the exercise date; provided, however, that, in
the case of a Tandem SAR, the total number of shares which may be received upon
exercise of a Stock Appreciation Right for Stock shall not exceed the total
number of shares subject to the related Option or relevant portion thereof.
Except as may be permitted without causing the Stock Appreciation Right to
constitute "deferred compensation" subject to Code Section 409A, a
Stock Appreciation Right that is not a Fixed Term Stock Appreciation Right (as
defined below) will be settled solely in Stock (together with cash for any
fractional share). A Fixed Term Stock Appreciation Right means a Stock
Appreciation Right under which the Participant is not able to control the
exercise date, but under which the Stock Appreciation Right establishes a fixed
term (mandatory exercise date) at which time the Stock Appreciation Right will
be valued and any payment to the Participant made. A Fixed Term Stock
Appreciation Right may be settled in Stock or cash, as determined by the
Committee in its discretion.

        (d) Terms and Conditions.

           
(1) Each Option and Stock Appreciation Right granted under
the Plan shall be exercisable on such date or dates, during such period, for
such number of shares and subject to such further conditions as shall be
determined pursuant to the provisions of the award agreement with respect to
such Option and Stock Appreciation Right; provided, however, that a
Tandem SAR shall not be exercisable prior to or later than the time the related
Option could be exercised; and provided, further, that in any event no
Option or Stock Appreciation Right shall be exercised beyond ten years from the
date of grant.

           
(2) The Committee may impose such conditions as it may deem
appropriate upon the exercise of an Option or a Stock Appreciation Right,
including, without 

 

-17-

<PAGE>

 

 limitation, a condition that the Stock Appreciation Right may
be exercised only in accordance with rules and regulations adopted by the
Committee from time to time.

           
(3) With respect to Options issued with Tandem SARs, the
right of a Participant to exercise the Tandem SAR shall be cancelled if and to
the extent the related Option is exercised, and the right of a Participant to
exercise an Option shall be cancelled if and to the extent that shares covered
by such Option are used to calculate the consideration received upon exercise of
the Tandem SAR.

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

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

        (f) Payment for Option Shares.

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

           
(2) Unless the Committee shall provide otherwise in any award
agreement, any payment for shares of Stock purchased upon exercise of an Option
granted hereunder may be made in cash, by delivery of shares of Stock
beneficially owned by the Participant, or by a combination of cash and Stock, at
the election of the Participant; provided, however, that any
shares of Stock so delivered shall have been beneficially owned by the
Participant for a period of not less than six months prior to the date of
exercise. Any such shares of Stock so delivered shall be valued at their Fair
Market Value on the date of such exercise. The Committee shall determine whether
and if so the extent to which actual delivery of share certificates to the
Company shall be required.

 

-18-

<PAGE>

 

Section 7. OTHER STOCK-BASED AWARDS

        (a) Grants of Other Stock-Based Awards. The Committee,
at any time and from time to time while the Plan is in effect, may grant Other
Stock-Based Awards to such officers of the Company and its Subsidiaries, and
other key salaried Employees, whether or not members of the Board, as it may
select. Such Plan Awards pursuant to which Stock is or may in the future be
acquired, or Plan Awards valued or determined in whole or part by reference to,
or otherwise based on, Stock, may include, but are not limited to, awards of
Restricted Stock or Plan Awards denominated in the form of "stock
units", grants of so-called "phantom stock" and options
containing terms or provisions differing in whole or in part from Options
granted pursuant to Section 6. Other Stock-Based Awards may be granted either
alone, in addition to, in tandem with or as an alternative to any other kind of
Plan Award, grant or benefit granted under the Plan or under any other employee
plan of the Company, including a plan of any acquired entity.

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

        (c) Consideration for Other Stock-Based Awards. In the
discretion of the Committee, any Other Stock-Based Award may be granted as a
Stock bonus for no consideration other than services rendered.

Section 8. CASH AWARDS TO EMPLOYEES OF FOREIGN SUBSIDIARIES
OR BRANCHES OR JOINT VENTURES

    In order to facilitate the granting of Plan Awards to
Participants who are foreign nationals or who are employed outside of the United
States of America, the Committee may provide for such special terms and
conditions, including without limitation substitutes for Plan Awards, as the
Committee may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. Such substitutes for Plan Awards may include a
requirement that the 

 

-19-

<PAGE>

 

 Participant receive cash, in such amount as the Committee
may determine in its sole discretion, in lieu of any Plan Award or share of
Stock that would otherwise have been granted to or delivered to such Participant
under the Plan. The Committee may approve any supplements to, or amendments,
restatements or alternative versions of the Plan as it may consider necessary or
appropriate for purposes of this Section 8 without thereby affecting the terms
of the Plan as in effect for any other purpose, and the Secretary or other
appropriate officer of the Company may certify any such documents as having been
approved and adopted pursuant to properly delegated authority; provided, however,
that no such supplements, amendments, restatements or alternative versions
shall include any provision that is inconsistent with the terms of the Plan as
then in effect. Participants subject to the laws of a foreign jurisdiction may
request copies of, or the right to view, any materials that are required to be
provided by the Company pursuant to the laws of such jurisdiction.

Section 9. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON

        (a) Effect of Competitive Activity. Anything contained
in the Plan to the contrary notwithstanding, if the employment of any
Participant shall terminate, for any reason other than death, while any Plan
Award granted to such Participant is outstanding hereunder, and such Participant
has not yet received the compensation or Stock covered by such Plan Award or
otherwise received the full benefit of such Plan Award, such Participant, if
otherwise entitled thereto, shall receive such Stock or compensation or benefit
only if, during the entire period from the date of such Participant's
termination to the date of such receipt, such Participant shall have (1) made
himself or herself available, upon request, at reasonable times and upon a
reasonable basis, to consult with, supply information to and otherwise cooperate
with the Company or any Subsidiary with respect to any matter that shall have
been handled by him or her or under his or her supervision while he or she was
in the employ of the Company or of any Subsidiary, and (2) refrained from
engaging in any activity that is directly or indirectly in competition with any
activity of the Company or any Subsidiary.

        (b) Nonfulfillment of Competitive Activity Conditions:
Waivers Under the Plan. In the event of a Participant's non-fulfillment of
any condition set forth in subsection (a) of this Section 9, such Participant's
rights under any Plan Award shall be forfeited and cancelled 

 

-20-

<PAGE>

 

 forthwith; provided,
however, that the nonfulfillment of such condition may at any time
(whether before, at the time of or subsequent to termination of employment) be
waived in the following manner:

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

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

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

        (d) Tax and Other Withholding. Prior to any
distribution of cash, Stock or Other Stock-Based Awards (including payments
under Section 5(c)) to any Participant, appropriate arrangements (consistent
with the Plan and any rules adopted hereunder) shall be made for the payment of
any taxes and other amounts required to be withheld by federal, state or local
law.

        (e) Substitution. The Committee, in its sole
discretion, may substitute a Plan Award (except ISOs) for another Plan Award or
Plan Awards of the same or different type.

Section 10. NON-TRANSFERABILITY OF PLAN AWARDS; RESTRICTIONS
ON DISPOSITION AND EXERCISE OF PLAN AWARDS

        (a) Restrictions on Transfer of Rights or Final Awards.
No Right or, until the expiration of any restriction period imposed by the
Committee, no shares of Stock covered by any Final Award, shall be transferred,
pledged, assigned or otherwise disposed of by a 

 

-21-

<PAGE>

 

 Participant, except as permitted
by the Plan, without the consent of the Committee, otherwise than by will or the
laws of descent and distribution; provided, however, that the
Committee may permit, on such terms as it may deem appropriate, use of Stock
included in any Final Award as partial or full payment upon exercise of an
Option under the Plan or a stock option under any other stock option plan of the
Company prior to the expiration of any restriction period relating to such Final
Award.

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

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

        (d) Attachment and Levy. No Plan Award shall be
subject, in whole or in part, to attachment, execution or levy of any kind, and
any purported transfer in violation hereof shall be null and void. Without
limiting the generality of the foregoing, no domestic relations order purporting
to authorize a transfer of a Plan Award, or to grant to any person other than
the Participant the authority to exercise or otherwise act with respect to a
Plan Award, shall be recognized as valid.

Section 11. DESIGNATION OF BENEFICIARIES

    Any benefits due and payable to a Participant following the
Participant's death shall be paid to the executor or administrator of the
Participant's estate (or to such person as the executor or administrator of the
estate may certify as being eligible to receive such award as a result of the
operation of the Participant's last will and testament or the application of the
laws of intestate succession), and upon any such payment, the Company, the Plan,
the Committee and the 

 

-22-

<PAGE>

 

 members thereof shall not be under any further liability
to anyone. Notwithstanding the foregoing, the Committee may, but need not,
permit a Participant to file with the Company a written designation of a
beneficiary or beneficiaries under the Plan, subject to such limitations as to
the classes and number of beneficiaries and contingent beneficiaries and such
other limitations as the Committee from time to time may prescribe. A
Participant may from time to time revoke or change any such designation of
beneficiary. Any designation of a beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the
entitlement of any such beneficiary to receive any Right, Final Award, Option,
Stock Appreciation Right or Other Stock-Based Award, or if applicable law
requires the Company to do so, the Committee may recognize only the legal
representative of such Participant as the sole beneficiary, in which case the
Company, the Plan, the Committee and the members thereof shall not be under any
further liability to anyone. In the event of the death of any Participant, the
term "Participant" as used in the Plan shall thereafter be deemed to
refer to the person entitled to payment pursuant to this Section 11 unless the
context otherwise requires.

Section 12. MERGER, CONSOLIDATION, STOCK DIVIDENDS, ETC.

        (a) Adjustments. In the event of any merger,
consolidation, reorganization, stock split, stock dividend or other event
affecting Stock, an appropriate adjustment shall be made in the total number of
shares available for Plan Awards and in all other provisions of the Plan that
include a reference to a number of shares, and in the numbers of shares covered
by, and other terms and provisions (including, but not limited to the grant or
exercise price of any Plan Award) of outstanding Plan Awards.

        (b) Committee Determinations. The foregoing
adjustments and the manner of application of the foregoing provisions shall be
determined by the Committee in its sole discretion. Any such adjustment may
provide for the elimination of any fractional share which might otherwise become
subject to a Plan Award.

 

-23-

<PAGE>

 

Section 13. ACCELERATION OF PAYMENT OR MODIFICATION OF PLAN
AWARDS

        (a) Acceleration and Modification. The Committee, in
the event of the death of a Participant or in any other circumstance, may
accelerate distribution of any Plan Award in its entirety or in a reduced
amount, or modify or terminate any Plan Award, including the cancellation of an
outstanding Plan Award that is not subject to Code Section 409A in exchange for
a cash payment, in each case on such basis and in such manner as the Committee
may determine in its sole discretion; provided, however, that in
no event shall the Committee "re-price" an Option or Stock
Appreciation Right to provide for a grant price that is less than the Fair
Market Value of the Stock on the date on which the Option or Stock Appreciation
Right was originally granted..

        (b) Change in Control. Notwithstanding any other
provision of the Plan, unless the Committee determines otherwise at the time of
grant, upon the occurrence of a Change in Control:

           
(1) any Options or Stock Appreciation Rights outstanding as
of the date of the Change in Control shall become fully vested (if not
previously vested) and shall be subject to the terms of the sale, merger,
consolidation or other agreement (the "Agreement") governing the
transaction the consummation of which results in the Change in Control. Such
Agreement shall provide for one of the following:

  
            (A) The continuation of such outstanding Options
            and Stock Appreciation Rights by the Company (if the Company is the
            surviving corporation);

            (B) The assumption of the Plan and such
            outstanding Options and Stock Appreciation Rights by the surviving
            corporation or an affiliate of the surviving corporation;

            (C) The substitution by the surviving corporation
            or its parent of options and stock appreciation rights with
            substantially the same terms 

     

    -24-

  

<PAGE>

  
     

             and conditions for such outstanding
            Options and Stock Appreciation Rights;

            (D) The full exercisability of such outstanding
            Options and Stock Appreciation Rights, followed by the cancellation
            of such Options and Stock Appreciation Rights at the conclusion of
            the exercise period provided in the Agreement; or

            (E) The cancellation of such outstanding Options
            and Stock Appreciation Rights (whether or not then exercisable) and,
            in the case of an Option, payment in Stock, cash or cash equivalent,
            or in the case of a Stock Appreciation Right, a payment in Stock or,
            if permitted without causing the Stock Appreciation Right to
            constitute "deferred compensation" under Code Section
            409A, Stock, cash or cash equivalent, in either case followed by the
            cancellation of such Options and Stock Appreciation Rights.

  

           
(2) Any other Plan Award outstanding as of the date of such
Change in Control, and that are not then vested:

  
            (A) shall become fully vested if vesting is based
            solely upon length of the employment relationship, or shall become
            fully vested at the Target Level (or if greater, the then projected
            Final Award) prorated for the portion of the Performance Period that
            has been completed as of the date of the Change in Control;

            (B) any restrictions or other conditions
            applicable to the Plan Award shall lapse, and such Plan Award shall
            become free of all restrictions and conditions; and

            (C) such Plan Award shall be immediately paid to
            the Participant.

     

    -25-

  

<PAGE>

  
     

  

Section 14. RIGHTS AS A SHAREHOLDER

    A Participant shall not have any rights as a shareholder with
respect to any Stock covered by any Plan Award until such Participant shall have
become the holder of record of such Stock.

Section 15. TERM, AMENDMENT, MODIFICATION AND TERMINATION OF
THE PLAN AND AGREEMENTS

        (a) Term. No Plan Award shall be granted under the
Plan after December 31, 2014 or such earlier date on which the Plan is
terminated pursuant to subsection (b) below.

        (b) Amendment, Modification and Termination of Plan.
The Board may, from time to time, amend or modify the Plan or any outstanding
Plan Award, including without limitation, to authorize the Committee to make
Plan Awards payable in other securities or other forms of property of a kind to
be determined by the Committee, and such other amendments as may be necessary or
desirable to implement such Plan Awards, or may terminate the Plan or any
provision thereof; provided, however, that no such action of the
Board, without approval of the shareholders of the Company, may (1) increase the
total number of shares of Stock with respect to which Plan Awards may be granted
under the Plan or increase the limits specified in Section 4, (2) extend the
term of the Plan as set forth in subsection (a) of this Section 15, (3) permit
any person while a member of the Committee or any other committee of the Board
administering the Plan to be eligible to receive or hold a Plan Award, or (4)
permit the Company to decrease the grant price of any outstanding Option or
Stock Appreciation Right to an amount less than the Fair Market Value of the
Stock on the date on which the Option or Stock Appreciation Right was granted.

        (c) Limitation and Survival. The Committee's authority
to act and to apply the terms of the Plan with respect to any Plan Award granted
prior termination of the Plan, and a Participant's ability to exercise an
outstanding Plan award granted prior to termination of the Plan and not
otherwise cancelled by the Board, shall survive termination of the Plan.

        (d) Amendments for Changes in Law. Notwithstanding
anything to the contrary herein, the Board shall have the authority to amend
outstanding Plan Awards and the Plan to take into account changes in law and tax
and accounting rules as well as other 

 

-26-

<PAGE>

 

 developments, and to grant Plan Awards
that qualify for beneficial treatment under such rules, without shareholder
approval.

Section 16. INDEMNIFICATION AND EXCULPATION

        (a) Indemnification. Each person who is or shall have
been a member of the Board, the Committee, or of any other committee of the
Board administering the Plan or of any committee appointed by the foregoing
committees, shall be indemnified and held harmless by the Company against and
from any and all loss, cost, liability or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting from any
claim, action, suit or proceeding to which such person may be or become a party
or in which such person may be or become involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts paid
by such person in settlement thereof (with the Company's written approval) or
paid by such person in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding of
such person's lack of good faith; subject, however, to the
condition that, upon the institution of any claim, action, suit or proceeding
against such person, such person shall in writing give the Company an
opportunity, at its own expense, to handle and defend the same before such
person undertakes to handle and defend it on such person's behalf. The foregoing
right of indemnification shall not be exclusive of any other right to which such
person may be entitled as a matter of law or otherwise, or any power that the
Company may have to indemnify or hold such person harmless.

        (b) Exculpation. Each member of the Board, the
Committee, or of any other committee of the Board administering the Plan or any
committee appointed by the foregoing committees, and each officer and employee
of the Company, shall be fully justified in relying or acting in good faith upon
any information furnished in connection with the administration of the Plan by
any appropriate person or persons other than such person. In no event shall any
person who is or shall have been a member of the Board, the Committee, or of any
other committee of the Board administering the Plan or of any committee
appointed by the foregoing committees, or an officer or employee of the Company,
be held liable for any determination made or other action taken or any omission
to act in reliance upon any such information, or for any action (including the
furnishing of information) taken or any failure to act, if in good faith.

 

-27-

<PAGE>

 

Section 17. EXPENSES OF PLAN

    The entire expense of offering and administering the Plan
shall be borne by the Company and its participating Subsidiaries; provided, that
the costs and expenses associated with the redemption or exercise of any Plan
Award, including but not limited to commissions charged by any agent of the
Company, may be charged to the Participants.

Section 18. FINALITY OF DETERMINATIONS

    Each determination, interpretation, or other action made or
taken pursuant to the provisions of the Plan by the Board, the Committee or any
committee of the Board administering the Plan or any committee appointed by the
foregoing committees, shall be final and shall be binding and conclusive for all
purposes and upon all persons, including, but without limitation thereto, the
Company, the shareholders, the Committee and each of the members thereof, and
the directors, officers, and employees of the Company and its Subsidiaries, the
Participants, and their respective successors in interest.

Section 19. NO RIGHTS TO CONTINUED EMPLOYMENT OR TO PLAN AWARD

        (a) No Right to Employment. Nothing contained in this
Plan, or in any booklet or document describing or referring to the Plan, shall
be deemed to confer on any Participant the right to continue as an Employee or
director of the Company or Subsidiary, whether for the duration of any
Performance Period, the duration of any vesting period under a Plan Award, or
otherwise, or affect the right of the Company or Subsidiary to terminate the
employment of any Participant for any reason.

        (b) No Right to Award. No Employee or other person
shall have any claim or right to be granted a Plan Award under the Plan. Having
received an Award under the Plan shall not give a Participant or any other
person any right to receive any other Plan Award under the Plan. A Participant
shall have no rights in any Plan Award, except as set forth herein and in the
applicable award grant.

 

-28-

<PAGE>

 

Section 20. GOVERNING LAW AND CONSTRUCTION

    The Plan and all actions taken hereunder shall be governed
by, and the Plan shall be construed in accordance with the laws of the State of
Wisconsin without regard to the principle of conflict of laws. Titles and
headings to Sections are for purposes of reference only, and shall in no way
limit, define or otherwise affect the meaning or interpretation of the Plan.

Section 21. SECURITIES AND STOCK EXCHANGE REQUIREMENTS

        (a) Restrictions on Resale. Notwithstanding any other
provision of the Plan, no person who acquires Stock pursuant to the Plan may,
during any period of time that such person is an affiliate of the Company
(within the meaning of the rules and regulations of the Securities Exchange
Commission) sell or otherwise transfer such Stock, unless such offer and sale or
transfer is made (1) pursuant to an effective registration statement under the
Securities Act of 1933 ("1933 Act"), which is current and includes the
Stock to be sold, or (2) pursuant to an appropriate exemption from the
registration requirements of the 1933 Act, such as that set forth in Rule 144
promulgated pursuant thereto.

        (b) Registration, Listing and Qualification of Shares of
Common Stock. Notwithstanding any other provision of the Plan, if at any
time the Committee shall determine that the registration, listing or
qualification of the Stock covered by a Plan Award upon any securities exchange
or under any foreign, federal, state or local law or practice, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Plan Award or the
purchase or receipt of Stock in connection therewith, no Stock may be purchased,
delivered or received pursuant to such Plan Award unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Committee. Any
person receiving or purchasing Stock pursuant to a Plan Award shall make such
representations and agreements and furnish such information as the Committee may
request to assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any
certificate or certificates for Stock under the Plan prior to the Committee's
determination that all related requirements have been fulfilled. The Company
shall in no event be obligated to register any securities pursuant to the 1933
Act or applicable state or 

 

-29-

<PAGE>

 

 foreign law or to take any other action in order to
cause the issuance and delivery of such certificates to comply with any such
law, regulation, or requirement.

Section 22. EFFECTIVE DATE

    Subject to Section 23 below, the Plan shall become effective
January 1, 2005.

Section 23. VOTE REQUIRED

    The affirmative vote of the holders of a majority of the
total votes cast on the proposal to approve the Plan at the 2005 annual meeting
of shareholders of the Company will be required for approval of the Plan, provided,
that the total votes cast on the proposal represents over fifty percent (50%) of
all shares entitled to vote on the proposal.

 

 

-30-

<PAGE>Exhibit 4(a)

     

    Exhibit
      4(a)

    
      

       

     

    PPL
      ELECTRIC UTILITIES CORPORATION

    (formerly
      PP&L, Inc. and Pennsylvania Power & Light Company)

     

    TO

     

    DEUTSCHE
      BANK TRUST COMPANY AMERICAS

     

    (formerly
      Bankers Trust Company, 

    successor
      to Morgan Guaranty Trust Company of New York,

    formerly
      Guaranty Trust Company of New York)

    

    

    

    As
      Trustee under PPL Electric Utilities Corporation’s

    Mortgage
      and Deed of Trust,

    Dated
      as of October 1, 1945

     

    _____________________________

     

    Seventy-third
      Supplemental Indenture

    

    

    

    Providing
      among other things for

    First
      Mortgage Bonds, 4.75% Pollution Control Series due 2027

     

    

     

    _____________________________

     

    Dated
      as of May 1, 2005

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    Seventy-third
      Supplemental Indenture

     

    SEVENTY-THIRD SUPPLEMENTAL
      INDENTURE, dated as of the lst day
      of
      May, 2005 made and entered into by and between PPL ELECTRIC UTILITIES
      CORPORATION (formerly PP&L, Inc. and Pennsylvania Power & Light
      Company), a corporation of the Commonwealth of Pennsylvania, whose address
      is
      Two North Ninth Street, Allentown, Pennsylvania 18101 (hereinafter sometimes
      called the Company), and DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly Bankers
      Trust Company), a corporation of the State of New York, whose address is 60
      Wall
      Street, New York, New York 10005 (hereinafter sometimes called the Trustee),
      as
      Trustee under the Mortgage and Deed of Trust, dated as of October 1,
      1945
      (hereinafter called the Mortgage and, together with any indentures supplemental
      thereto, hereinafter called the Indenture), which Mortgage was executed and
      delivered by Pennsylvania Power & Light Company to secure the payment of
      bonds issued or to be issued under and in accordance with the provisions of
      the
      Mortgage, reference to which said Mortgage is hereby made, this instrument
      (hereinafter called the Seventy-third Supplemental Indenture) being supplemental
      thereto.

     

    WHEREAS,
      said Mortgage was or is to be recorded in various Counties in the Commonwealth
      of Pennsylvania, which Counties include or will include all Counties in which
      this Seventy-third Supplemental Indenture is to be recorded; and

     

    WHEREAS,
      by amendment to its Articles of Incorporation filed in the Office of the
      Secretary of State of Pennsylvania on September 12, 1997, the Company
      changed its name to PP&L, Inc.; and

     

    WHEREAS,
      by an amendment to its Articles of Incorporation filed with the Office of the
      Secretary of State of Pennsylvania on February 14, 2001, the Company
      changed its name to PPL Electric Utilities Corporation; and

     

    WHEREAS,
      an instrument, dated August 5, 1994, was executed by the Company appointing
      Bankers Trust Company as Trustee in succession to said Morgan Guaranty Trust
      Company of New York (resigned) under the Indenture, and by Bankers Trust Company
      accepting said appointment, which instrument was or is to be recorded in various
      Counties in the Commonwealth of Pennsylvania; and

     

    WHEREAS,
      by an amendment to its Articles of Incorporation filed in the office of the
      Secretary of State of New York, effective April 15, 2002, the Trustee changed
      its name to Deutsche Bank Trust Company Americas; and 

     

    WHEREAS,
      by the Mortgage the Company covenanted that it would execute and deliver such
      supplemental indenture or indentures and such further instruments and do such
      further acts as might be necessary or proper to carry out more effectually
      the
      purposes of the Indenture and to make subject to the lien of the Indenture
      any
      property thereafter acquired and intended to be subject to the lien thereof;
      and

     

    WHEREAS,
      the Company executed and delivered as supplements to the Mortgage, the following
      supplemental indentures:

     

    
      	
              Designation

               

            	
              Dated
                as of

               

            
	
              First
                Supplemental Indenture

            	
              July
                1, 1947

            
	
              Second
                Supplemental Indenture

            	
              December
                1, 1948

            
	
              Third
                Supplemental Indenture

            	
              February
                1, 1950

            
	
              Fourth
                Supplemental Indenture

            	
              March
                1, 1953

            
	
              Fifth
                Supplemental Indenture

            	
              August
                1, 1955

            
	
              Sixth
                Supplemental Indenture

            	
              December
                1, 1961

            
	
              Seventh
                Supplemental Indenture

            	
              March
                1, 1964

            
	
              Eighth
                Supplemental Indenture

            	
              June
                1, 1966

            
	
              Ninth
                Supplemental Indenture

            	
              November
                1, 1967

            
	
              Tenth
                Supplemental Indenture

            	
              December
                1, 1967

            
	
              Eleventh
                Supplemental Indenture

            	
              January
                1, 1969

            
	
              Twelfth
                Supplemental Indenture

            	
              June
                1, 1969

            
	
              Thirteenth
                Supplemental Indenture

            	
              March
                1, 1970

            
	
              Fourteenth
                Supplemental Indenture

            	
              February
                1, 1971

            
	
              Fifteenth
                Supplemental Indenture

            	
              February
                1, 1972

            
	
              Sixteenth
                Supplemental Indenture

            	
              January
                1, 1973

            
	
              Seventeenth
                Supplemental Indenture

            	
              May
                1, 1973

            
	
              Eighteenth
                Supplemental Indenture

            	
              April
                1, 1974

            
	
              Nineteenth
                Supplemental Indenture

            	
              October
                1, 1974

            
	
              Twentieth
                Supplemental Indenture 

            	
              May
                1, 1975

            
	
              Twenty-first
                Supplemental Indenture

            	
              November
                1, 1975

            
	
              Twenty-second
                Supplemental Indenture

            	
              December
                1, 1976

            
	
              Twenty-third
                Supplemental Indenture

            	
              December
                1, 1977

            
	
              Twenty-fourth
                Supplemental Indenture

            	
              April
                1, 1979

            
	
              Twenty-fifth
                Supplemental Indenture

            	
              April
                1, 1980

            
	
              Twenty-sixth
                Supplemental Indenture

            	
              June
                1, 1980

            
	
              Twenty-seventh
                Supplemental Indenture

            	
              June
                1, 1980

            
	
              Twenty-eighth
                Supplemental Indenture

            	
              December
                1, 1980

            
	
              Twenty-ninth
                Supplemental Indenture

            	
              February
                1, 1981

            
	
              Thirtieth
                Supplemental Indenture

            	
              February
                1, 1981

            
	
              Thirty-first
                Supplemental Indenture

            	
              September
                1, 1981

            
	
              Thirty-second
                Supplemental Indenture

            	
              April
                1, 1982

            
	
              Thirty-third
                Supplemental Indenture

            	
              August
                1, 1982

            
	
              Thirty-fourth
                Supplemental Indenture

            	
              October
                1, 1982

            
	
              Thirty-fifth
                Supplemental Indenture

            	
              November
                1, 1982

            
	
              Thirty-sixth
                Supplemental Indenture

            	
              February
                1, 1983

            
	
              Thirty-seventh
                Supplemental Indenture

            	
              November
                1, 1983

            
	
              Thirty-eighth
                Supplemental Indenture

            	
              March
                1, 1984

            
	
              Thirty-ninth
                Supplemental Indenture

            	
              April
                1, 1984

            
	
              Fortieth
                Supplemental Indenture

            	
              August
                15, 1984

            
	
              Forty-first
                Supplemental Indenture

            	
              December
                1, 1984

            
	
              Forty-second
                Supplemental Indenture

            	
              June
                15, 1985

            
	
              Forty-third
                Supplemental Indenture

            	
              October
                1, 1985

            
	
              Forty-fourth
                Supplemental Indenture

            	
              January
                1, 1986

            
	
              Forty-fifth
                Supplemental Indenture

            	
              February
                1, 1986

            
	
              Forty-sixth
                Supplemental Indenture

            	
              April
                1, 1986

            
	
              Forty-seventh
                Supplemental Indenture

            	
              October
                1, 1986

            
	
              Forty-eighth
                Supplemental Indenture

            	
              March
                1, 1988

            
	
              Forty-ninth
                Supplemental Indenture

            	
              June
                1, 1988

            
	
              Fiftieth
                Supplemental Indenture

            	
              January
                1, 1989

            
	
              Fifty-first
                Supplemental Indenture

            	
              October
                1, 1989

            
	
              Fifty-second
                Supplemental Indenture

            	
              July
                1, 1991

            
	
              Fifty-third
                Supplemental Indenture

            	
              May
                1, 1992

            
	
              Fifty-fourth
                Supplemental Indenture

            	
              November
                1, 1992

            
	
              Fifty-fifth
                Supplemental Indenture

            	
              February
                1, 1993

            
	
              Fifty-sixth
                Supplemental Indenture

            	
              April
                1, 1993

            
	
              Fifty-seventh
                Supplemental Indenture

            	
              June
                1, 1993

            
	
              Fifty-eighth
                Supplemental Indenture

            	
              October
                1, 1993

            
	
              Fifty-ninth
                Supplemental Indenture

            	
              February
                15, 1994

            
	
              Sixtieth
                Supplemental Indenture

            	
              March
                1, 1994

            
	
              Sixty-first
                Supplemental Indenture

            	
              March
                15, 1994

            
	
              Sixty-second
                Supplemental Indenture

            	
              September
                1, 1994

            
	
              Sixty-third
                Supplemental Indenture

            	
              October
                1, 1994

            
	
              Sixty-fourth
                Supplemental Indenture

            	
              August
                1, 1995

            
	
              Sixty-fifth
                Supplemental Indenture

            	
              April
                1, 1997

            
	
              Sixty-sixth
                Supplemental Indenture

            	
              May
                1, 1998

            
	
              Sixty-seventh
                Supplemental Indenture

            	
              June
                1, 1999

            
	
              Sixty-eighth
                Supplemental Indenture

            	
              August
                1, 2001

            
	
              Sixty-ninth
                Supplemental Indenture

            	
              January
                1, 2002

            
	
              Seventieth
                Supplemental Indenture

            	
              February
                1, 2003

            
	
              Seventy-first
                Supplemental Indenture

            	
              May
                1, 2003

            
	
              Seventy-second
                Supplemental Indenture

            	
              February
                1, 2005

            

    

    

     

    which
      supplemental indentures were or are to be recorded in various Counties in the
      Commonwealth of Pennsylvania; and

     

    WHEREAS,
      the Company executed and delivered its Supplemental Indenture, dated July 1,
      1954, creating a security interest in certain personal property of the Company,
      pursuant to the provisions of the Pennsylvania Uniform Commercial Code, as
      a
      supplement to the Mortgage, which Supplemental Indenture was filed in the Office
      of the Secretary of the Commonwealth of Pennsylvania on July 1, 1954, and all
      subsequent supplemental indentures were so filed; and

     

    WHEREAS,
      in addition to the property described in the Mortgage, as heretofore
      supplemented, the Company has acquired certain other property, rights and
      interests in property; and

     

    WHEREAS,
      the Company has heretofore issued, in accordance with the provisions of the
      Mortgage, as supplemented, the following series of First Mortgage
      Bonds:

     

    

     

    
      	
              Series

            	
              Principal

              Amount

              Issued

            	
              Principal

              Amount

              Outstanding

            
	 	 	 
	
              3%
                Series due 1975

            	
              $93,000,000

            	
              None

            
	
              2-3/4%
                Series due 1977

            	
              20,000,000

            	
              None

            
	
              3-1/4%
                Series due 1978

            	
              10,000,000

            	
              None

            
	
              2-3/4%
                Series due 1980

            	
              37,000,000

            	
              None

            
	
              3-1/2%
                Series due 1983

            	
              25,000,000

            	
              None

            
	
              3-3/8%
                Series due 1985

            	
              25,000,000

            	
              None

            
	
              4-5/8%
                Series due 1991

            	
              30,000,000

            	
              None

            
	
              4-5/8%
                Series due 1994

            	
              30,000,000

            	
              None

            
	
              5-5/8%
                Series due 1996

            	
              30,000,000

            	
              None

            
	
              6-3/4%
                Series due 1997

            	
              30,000,000

            	
              None

            
	
              6-1/2%
                Series due 1972

            	
              15,000,000

            	
              None

            
	
              7%
                Series due 1999

            	
              40,000,000

            	
              None

            
	
              8-1/8%
                Series due June 1, 1999

            	
              40,000,000

            	
              None

            
	
              9%
                Series due 2000

            	
              50,000,000

            	
              None

            
	
              7-1/4%
                Series due 2001

            	
              60,000,000

            	
              None

            
	
              7-5/8%
                Series due 2002

            	
              75,000,000

            	
              None

            
	
              7-1/2%
                Series due 2003

            	
              80,000,000

            	
              None

            
	
              Pollution
                Control Series A

            	
              28,000,000

            	
              None

            
	
              9-1/4%
                Series due 2004

            	
              80,000,000

            	
              None

            
	
              10-1/8%
                Series due 1982

            	
              100,000,000

            	
              None

            
	
              9-3/4%
                Series due 2005

            	
              125,000,000

            	
              None

            
	
              9-3/4%
                Series due November 1, 2005

            	
              100,000,000

            	
              None

            
	
              8-1/4%
                Series due 2006

            	
              150,000,000

            	
              None

            
	
              8-1/2%
                Series due 2007

            	
              100,000,000

            	
              None

            
	
              9-7/8%
                Series due 1983-1985

            	
              100,000,000

            	
              None

            
	
              15-5/8%
                Series due 2010

            	
              100,000,000

            	
              None

            
	
              11-3/4%
                Series due 1984

            	
              30,000,000

            	
              None

            
	
              Pollution
                Control Series B

            	
              70,000,000

            	
              None

            
	
              Pollution
                Control Series C

            	
              20,000,000

            	
              None

            
	
              14%
                Series due December 1, 1990

            	
              125,000,000

            	
              None

            
	
              15%
                Series due 1984-1986

            	
              50,000,000

            	
              None

            
	
              14-3/4%
                Series A due 1986

            	
              30,000,000

            	
              None

            
	
              14-3/4%
                Series B due 1986

            	
              20,000,000

            	
              None

            
	
              16-1/2%
                Series due 1987-1991

            	
              $52,000,000

            	
              None

            
	
              16-1/8%
                Series due 1992

            	
              100,000,000

            	
              None

            
	
              16-1/2%
                Series due 1986-1990

            	
              92,500,000

            	
              None

            
	
              13-1/4%
                Series due 2012

            	
              100,000,000

            	
              None

            
	
              Pollution
                Control Series D

            	
              70,000,000

            	
              None

            
	
              12-1/8%
                Series due 1989-1993

            	
              50,000,000

            	
              None

            
	
              13-1/8%
                Series due 2013

            	
              125,000,000

            	
              None

            
	
              Pollution
                Control Series E

            	
              37,750,000

            	
              None

            
	
              13-1/2%
                Series due 1994

            	
              125,000,000

            	
              None

            
	
              Pollution
                Control Series F

            	
              115,500,000

            	
              None

            
	
              12-3/4%
                Series due 2014

            	
              125,000,000

            	
              None

            
	
              Pollution
                Control Series G

            	
              55,000,000

            	
              None

            
	
              12%
                Series due 2015

            	
              125,000,000

            	
              None

            
	
              10-7/8%
                Series due 2016

            	
              125,000,000

            	
              None

            
	
              9-5/8%
                Series due 1996

            	
              125,000,000

            	
              None

            
	
              9%
                Series due 2016

            	
              125,000,000

            	
              None

            
	
              9-1/2%
                Series due 2016

            	
              125,000,000

            	
              None

            
	
              9-1/4%
                Series due 1998

            	
              125,000,000

            	
              None

            
	
              9-5/8%
                Series due 1998

            	
              125,000,000

            	
              None

            
	
              10%
                Series due 2019

            	
              125,000,000

            	
              None

            
	
              9-1/4%
                Series due 2019

            	
              250,000,000

            	
              None

            
	
              9-3/8%
                Series due 2021

            	
              150,000,000

            	
              None

            
	
              7-3/4%
                Series due 2002

            	
              150,000,000

            	
              None

            
	
              8-1/2%
                Series due 2022

            	
              150,000,000

            	
              None

            
	
              Pollution
                Control Series H

            	
              90,000,000

            	
              None

            
	
              6-7/8%
                Series due 2003

            	
              100,000,000

            	
              None

            
	
              7-7/8%
                Series due 2023

            	
              200,000,000

            	
              None

            
	
              5-1/2%
                Series due 1998

            	
              150,000,000

            	
              None

            
	
              6-1/2%
                Series due 2005

            	
              125,000,000

            	
              69,434,000

            
	
              6%
                Series due 2000

            	
              125,000,000

            	
              None

            
	
              6-3/4%
                Series due 2023

            	
              150,000,000

            	
              None

            
	
              Pollution
                Control Series I

            	
              53,250,000

            	
              53,250,000

            
	
              6.55%
                Series due 2006

            	
              150,000,000

            	
              146,000,000

            
	
              7.30%
                Series due 2024

            	
              150,000,000

            	
              None

            
	
              6-7/8%
                Series due 2004

            	
              150,000,000

            	
              None

            
	
              7-3/8%
                Series due 2014

            	
              100,000,000

            	
              10,290,000

            
	
              Pollution
                Control Series J

            	
              115,500,000

            	
              None

            
	
              7.70%
                Series due 2009

            	
              200,000,000

            	
              325,000

            
	
              Pollution
                Control Series K

            	
              55,000,000

            	
              55,000,000

            
	
              Short-Term
                Series A

            	
              800,000,000

            	
              None

            
	
              6
                1/8% REset Put Securities Series due 2006

            	
              200,000,000

            	
              None

            
	
              Short-Term
                Series B

            	
              600,000,000

            	
              None

            
	
              5-7/8%
                Series due August 15, 2007

            	
              300,000,000

            	
              254,866,000

            
	
              6-1/4%
                Series due August 15, 2009

            	
              500,000,000

            	
              485,785,000

            
	
              3.125%
                Pollution Control Series due 2008

            	
              90,000,000

            	
              90,000,000

            
	
              4.30%
                Collateral Series due 2013

            	
              100,000,000

            	
              100,000,000

            
	
              4.70%
                Pollution Control Series due 2029

            	
              115,500,000

            	
              115,500,000

            

    

    

     

    which
      bonds are also sometimes called bonds of the First through Eightieth Series,
      respectively; and

     

    WHEREAS,
      Section 8 of the Mortgage provides that the form of each series of bonds (other
      than the First Series) issued thereunder shall be established by Resolution
      of
      the Board of Directors of the Company and that the form of such series, as
      established by said Board of Directors, shall specify the descriptive title
      of
      the bonds and various other terms thereof, and may also contain such provisions
      not inconsistent with the provisions of the Indenture as the Board of Directors
      may, in its discretion, cause to be inserted therein expressing or referring
      to
      the terms and conditions upon which such bonds are to be issued and/or secured
      under the Indenture; and

     

    WHEREAS,
      Section 120 of the Mortgage provides, among other things, that any power,
      privilege or right expressly or impliedly reserved to or in any way conferred
      upon the Company by any provision of the Indenture, whether such power,
      privilege or right is in any way restricted or is unrestricted, may be in whole
      or in part waived or surrendered or subjected to any restriction if at the
      time
      unrestricted or to additional restriction if already restricted, and the Company
      may enter into any future covenants, limitations or restrictions for the benefit
      of any one or more series of bonds issued thereunder, or the Company may cure
      any ambiguity contained therein or in any supplemental indenture or may
      establish the terms and provisions of any series of bonds other than said First
      Series, by an instrument in writing executed and acknowledged by the Company
      in
      such manner as would be necessary to entitle a conveyance of real estate to
      record in all of the States in which any property at the time subject to the
      lien of the Indenture shall be situated; and

     

    WHEREAS,
      the Company now desires to create a new series of bonds and to add to its
      covenants and agreements contained in the Mortgage, as heretofore supplemented,
      certain other covenants and agreements to be observed by it and to alter and
      amend in certain respects the covenants and provisions contained in the
      Mortgage; and

     

    WHEREAS,
      the execution and delivery by the Company of this Seventy-third Supplemental
      Indenture, and the terms of the bonds of the Eighty-first Series, hereinafter
      referred to, have been duly authorized by the Board of Directors of the Company
      by appropriate Resolutions of said Board of Directors;

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH: That PPL Electric Utilities Corporation,
      in consideration of the premises and of One Dollar to it duly paid by the
      Trustee at or before the ensealing and delivery of these presents, the receipt
      whereof is hereby acknowledged, and in further evidence of assurance of the
      estate, title and rights of the Trustee and in order further to secure the
      payment both of the principal of and interest and premium, if any, on the bonds
      from time to time issued under the Indenture, according to their tenor and
      effect and the performance of all the provisions of the Indenture (including
      any
      modification made as in the Mortgage provided) and of said bonds, hereby grants,
      bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges,
      sets
      over and confirms (subject, however, to Excepted Encumbrances as defined in
      Section 6 of the Mortgage) unto Deutsche Bank Trust Company Americas, as Trustee
      under the Indenture, and to its successor or successors in said trust, and
      to
      said Trustee and its successors and assigns forever, all property, real,
      personal and mixed, of the kind or nature specifically mentioned in the
      Mortgage, as heretofore supplemented, or of any other kind or nature, acquired
      by the Company after the date of the execution and delivery of the
      Seventy-second Supplemental Indenture (except any herein or in the Mortgage,
      as
      heretofore supplemented, expressly excepted and except any which may not
      lawfully be mortgaged or pledged under the Indenture), now owned or, subject
      to
      the provisions of Section 87 of the Mortgage, hereafter acquired by the Company
      (by purchase, consolidation, merger, donation, construction, erection or in
      any
      other way) and wheresoever situated, including (without in anywise limiting
      or
      impairing by the enumeration of the same the scope and intent of the foregoing)
      all lands, power sites, flowage rights, water rights, water locations, water
      appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways,
      dams, dam sites, aqueducts, and all other rights or means for appropriating,
      conveying, storing and supplying water; all rights of way and roads; all plants
      for the generation of electricity by steam, water and/or other power; all power
      houses, gas plants, street lighting systems, standards and other equipment
      incidental thereto, telephone, radio and television systems, air-conditioning
      systems and equipment incidental thereto, water works, water systems, steam
      heat
      and hot water plants, substations, lines, service and supply systems, bridges,
      culverts, tracks, ice or refrigeration plants and equipment, offices, buildings
      and other structures and the equipment thereof; all machinery, engines, boilers,
      dynamos, electric, gas and other machines, regulators, meters, transformers,
      generators, motors, electrical, gas and mechanical appliances, conduits, cables,
      water, steam heat, gas or other pipes, gas mains and pipes, service pipes,
      fittings, valves and connections, pole and transmission lines, wires, cables,
      tools, implements, apparatus, furniture and chattels; all municipal and other
      franchises, consents or permits; all lines for the transmission and distribution
      of electric current, gas, steam heat or water for any purpose including towers,
      poles, wires, cables, pipes, conduits, ducts and all apparatus for use in
      connection therewith; all real estate, lands, easements, servitudes, licenses,
      permits, franchises, privileges, rights of way and other rights in or relating
      to real estate or the occupancy of the same and (except as herein or in the
      Mortgage, as heretofore supplemented, expressly excepted) all the right, title
      and interest of the Company in and to all other property of any kind or nature
      appertaining to and/or used and/or occupied and/or enjoyed in connection with
      any property hereinbefore or in the Mortgage, as heretofore supplemented,
      described;

     

    TOGETHER
      with all and singular the tenements, hereditaments, prescriptions, servitudes,
      and appurtenances belonging or in anywise appertaining to the aforesaid property
      or any part thereof, with the reversion and reversions, remainder and remainders
      and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
      revenues, issues, earnings, income, product and profits thereof, and all the
      estate, right, title and interest and claim whatsoever, at law as well as in
      equity, which the Company now has or may hereafter acquire in and to the
      aforesaid property and franchises and every part and parcel
      thereof;

     

    IT
      IS
      HEREBY AGREED by the Company that, subject to the provisions of Section 87
      of
      the Mortgage and to the extent permitted by law, all the property, rights,
      and
      franchises acquired by the Company (by purchase, consolidation, merger,
      donation, construction, erection or in any other way) after the date hereof,
      except any herein or in the Mortgage, as heretofore supplemented, expressly
      excepted, shall be and are as fully granted and conveyed hereby and as fully
      embraced within the lien hereof and the lien of the Indenture, as if such
      property, rights and franchises were now owned by the Company and were
      specifically described herein and conveyed hereby; and

     

    IT
      IS
      HEREBY DECLARED by the Company that all the property, rights and franchises
      now
      owned or hereafter acquired by the Company have been, or are, or will be owned
      or acquired with the intention to use the same in carrying on the business
      or
      branches of business of the Company, and it is hereby declared that it is the
      intention of the Company that all thereof, except any herein or in the Mortgage,
      as heretofore supplemented, expressly excepted, shall (subject to the provisions
      of Section 87 of the Mortgage and to the extent permitted by law) be embraced
      within the lien of this Seventy-third Supplemental Indenture and the lien of
      the
      Indenture;

     

    PROVIDED
      that the following are not and are not intended to be now or hereafter granted,
      bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
      set over or confirmed hereunder and are hereby expressly excepted from the
      lien
      and operation of this Seventy-third Supplemental Indenture and from the lien
      and
      operation of the Indenture, viz:
      (1)
      cash, shares of stock, bonds, notes and other obligations and other securities
      not hereafter specifically pledged, paid, deposited, delivered or held under
      the
      Indenture or covenanted so to be; (2) goods, wares, merchandise, equipment,
      apparatus, materials, or supplies held for the purpose of sale or other
      disposition in the usual course of business; fuel, oil and similar materials
      and
      supplies consumable in the operation of any of the properties of the Company;
      construction equipment acquired for temporary use; all aircraft, rolling stock,
      trolley coaches, buses, motor coaches, automobiles and other vehicles and
      materials and supplies held for the purposes of repairing or replacing (in
      whole
      or part) any of the same; all timber, minerals, mineral rights and royalties;
      (3) bills, notes and accounts receivable, judgments, demands and choses in
      action, and all contracts, leases and operating agreements not specifically
      pledged under the Indenture or covenanted so to be; the Company’s contractual
      rights or other interest in or with respect to tires not owned by the Company;
      (4) the last day of the term of any lease or leasehold which may be or become
      subject to the lien of the Indenture; (5) electric energy, gas, steam, ice,
      and
      other materials or products generated, manufactured, produced or purchased
      by
      the Company for sale, distribution or use in the ordinary course of its business
      and (6) any property released from the lien of the Mortgage pursuant to Sections
      58, 59, 60, 62 or 63 of the Mortgage; provided, however, that the property
      and
      rights expressly excepted from the lien and operation of the Indenture in the
      above subdivisions (2) and (3) shall (to the extent permitted by law) cease
      to
      be so excepted in the event and as of the date that the Trustee or a receiver
      or
      trustee shall enter upon and take possession of the Mortgaged and Pledged
      Property in the manner provided in Article XIII of the Mortgage by reason of
      the
      occurrence of a Default as defined in Section 65 thereof, as supplemented by
      the
      provisions of this Seventy-third Supplemental Indenture;

     

    TO
      HAVE
      AND TO HOLD all such properties, real, personal and mixed, granted, bargained,
      sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over
      or
      confirmed by the Company as aforesaid, or intended so to be, unto Deutsche
      Bank
      Trust Company Americas, as Trustee, and its successors and assigns
      forever;

     

    IN
      TRUST
      NEVERTHELESS for the same purposes and upon the same terms, trusts and
      conditions and subject to and with the same provisos and covenants as are set
      forth in the Mortgage, as heretofore supplemented, this Seventy-third
      Supplemental Indenture being supplemental to the Mortgage;

     

    AND
      IT IS
      HEREBY COVENANTED by the Company that all the terms, conditions, provisos,
      covenants and provisions contained in the Mortgage, as heretofore supplemented,
      shall affect and apply to the property hereinbefore described and conveyed
      and
      to the estate, rights, obligations and duties of the Company and the Trustee
      and
      the beneficiaries of the trust with respect to said property, and to the Trustee
      and its successors as Trustee of said property in the same manner and with
      the
      same effect as if the said property had been owned by the Company at the time
      of
      the execution of the Mortgage, and had been specifically and at length described
      in and conveyed to the Trustee by the Mortgage as a part of the property therein
      stated to be conveyed.

     

    The
      Company further covenants and agrees to and with the Trustee and its successors
      in said trust under the Indenture, as follows:

     

    ARTICLE
      I.  

     

    Eighty-first
      Series of Bonds

     

    SECTION
      1.  There
      shall be a series of bonds designated “First Mortgage Bonds, 4.75% Pollution
      Control Series due 2027” (herein sometimes referred to as the “Eighty-first
      Series”), each of which shall also bear the descriptive title First Mortgage
      Bonds, and the form thereof, which shall be established by Resolution of the
      Board of Directors of the Company, shall contain suitable provisions with
      respect to the matters hereinafter in this Section specified. Bonds of the
      Eighty-first Series shall be limited to $108,250,000 in aggregate principal
      amount, except as provided in Section 16 of the Mortgage, and shall be issued
      as
      fully registered bonds in denominations of One Thousand Dollars and in any
      multiple or multiples of One Thousand Dollars; each bond of the Eighty-first
      Series shall mature on February 15, 2027, shall bear interest at the rate of
      4.75% per annum, payable semi-annually on February 15 and August 15 of each
      year; the principal of and interest on each said bond to be payable at the
      office or agency of the Company in the Borough of Manhattan, The City of New
      York, and interest on each said bond to be also payable at the office of the
      Company in the City of Allentown, Pennsylvania, in such coin or currency of
      the
      United States of America as at the time of payment is legal tender for public
      and private debts. Bonds of the Eighty-first Series shall be dated as in Section
      10 of the Mortgage provided.

     

    The
      bonds
      of the Eighty-first Series shall be issued by the Company, registered in the
      name of and delivered to JPMorgan Chase Bank, N.A., as trustee (the “2001
      Trustee”) under an Indenture dated as of August 1, 2001 (the “2001 Indenture”),
      to provide for the payment when due (whether at maturity, by acceleration or
      otherwise) of the principal and interest of the Securities (as defined in the
      2001 Indenture) to be issued from time to time under the 2001
      Indenture.

     

    The
      bonds
      of the Eighty-first Series shall not be transferable by the 2001 Trustee, except
      to a successor trustee under the 2001 Indenture. Bonds of the Eighty-first
      Series so transferable to a successor trustee under the 2001 Indenture may
      be
      transferred at the principal office of the Trustee in the Borough of Manhattan,
      The City of New York. 

     

    Any
      payment by the Company under the 2001 Indenture of the principal of or premium,
      if any, or interest, if any on the securities (the “4.75% Securities”) which
      shall been authenticated and delivered under the 2001 Indenture on the basis
      of
      the issuance and delivery to the 2001 Trustee of bonds of the Eighty-first
      Series (other than by the application of the proceeds of a payment in respect
      of
      such bonds) shall, to the extent hereof, be deemed to satisfy and discharge
      the
      obligation of the Company, if any, to make a payment of principal of, or
      premium, or interest on such bonds, as the case may be, which is then
      due.

     

    The
      Trustee may conclusively presume that the obligation of the Company to pay
      the
      principal of or interest on the bonds of the Eighty-first Series as the same
      shall become due and payable shall have been fully satisfied and discharged
      unless and until it shall have received a written notice from the 2001 Trustee,
      signed by an authorized officer thereof, stating that the principal of or
      interest on specified bonds of the Eighty-first Series has become due and
      payable and has not been fully paid, and specifying the amount of funds required
      to make such payment.

     

    (I)
      Each
      holder of a bond of the Eighty-first Series consents that the bonds of the
      Eighty-first Series may be redeemable at the option of the Company or pursuant
      to the requirements of the Mortgage in whole at any time, or in part from time
      to time, prior to maturity, without notice provided in Section 52 of the
      Mortgage, at the principal amount of the bonds to be redeemed, in each case,
      together with accrued interest to the date fixed for redemption by the Company
      in a notice delivered on or before the date fixed for redemption by the Company
      to the Trustee and to the holders of the bonds to be redeemed.

     

    (II)
      The
      bonds of the Eighty-first Series shall also be redeemable, in whole at any
      time,
      or in part from time to time, prior to maturity, at a redemption price equal
      to
      the principal amount thereof, together with accrued and unpaid interest to
      the
      date of payment of such principal amount, upon receipt by the Trustee of a
      written notice from the 2001 Trustee (i) delivered to the Trustee and the
      Company, (ii) signed by its President or any Vice President, (iii)(A) stating
      that an Event of Default has occurred under the 2001 Indenture and is continuing
      and that, as a result, there then is due and payable a specified amount with
      respect to the Securities Outstanding under the 2001 Indenture, for the payment
      of which the 2001 Trustee has not received funds or (B) stating that the 4.75%
      Securities have become due and payable pursuant to the mandatory redemption
      provisions therein and in the 2001 Indenture, and the 2001 Indenture Trustee
      has
      not received funds for such payment, and (iv) specifying the principal amount
      of
      the bonds of the Eighty-first Series to be redeemed. Delivery of such notice
      shall constitute a waiver by the 2001 Trustee of notice of redemption under
      the
      Indenture.

     

    (III)
      At
      the option of the registered owner, any bonds of the Eighty-first Series, upon
      surrender thereof, for cancellation, at the office or agency of the Company
      in
      the Borough of Manhattan, The City of New York, shall be exchangeable for a
      like
      aggregate principal amount of bonds of the same series, interest rate, maturity
      and other terms of other authorized denominations. 

     

    Subject
      to the provisions of the third paragraph of this Section 1, Bonds of the
      Eighty-first Series shall be transferable, upon the surrender thereof for
      cancellation, together with a written instrument of transfer in form approved
      by
      the registrar duly executed by the registered owner or by his duly authorized
      attorney, at the office or agency of the Company in the Borough of Manhattan,
      The City of New York; provided that such transfer shall not result in any
      security being required to be registered under the Securities Act of 1933,
      as
      amended, and an opinion of counsel satisfactory to the Company to such effect
      shall have been provided to the Company.

     

    The
      bonds
      of the Eighty-first Series shall not be redeemable by the application of cash
      deposited with the Trustee pursuant to the provisions of Section
      64.

     

    Upon
      any
      transfer or exchange of bonds of the Eighty-first Series, the Company may make
      a
      charge therefor sufficient to reimburse it for any tax or taxes or other
      governmental charge, as provided in Section 12 of the Mortgage, but the Company
      hereby waives any right to make a charge in addition thereto for any exchange
      or
      transfer of bonds of the Eighty-first Series.

     

    ARTICLE
      II.  

     

    Miscellaneous
      Provisions

     

    SECTION
      2.  The
      Company reserves the right to make such amendments to the Mortgage, as
      supplemented, as shall be necessary in order to delete subsection (I) of Section
      39 of the Mortgage, and each holder of bonds of the Eighty-first Series hereby
      consents to such deletion without any other or further action by any holder
      of
      bonds of the Eighty-first Series.

     

    SECTION
      3.  The
      terms
      defined in the Mortgage, as heretofore supplemented, shall, for all purposes
      of
      this Seventy-third Supplemental Indenture, have the meanings specified in the
      Mortgage, as heretofore supplemented.

     

    SECTION
      4.  Whenever
      in this Seventy-third Supplemental Indenture either of the parties hereto is
      named or referred to, this shall, subject to the provisions of Articles XVI
      and
      XVII of the Mortgage, be deemed to include the successors and assigns of such
      party, and all the covenants and agreements in this Seventy-third Supplemental
      Indenture contained by or on behalf of the Company, or by or on behalf of the
      Trustee shall, subject as aforesaid, bind and inure to the respective benefits
      of the respective successors and assigns of such parties, whether so expressed
      or not.

     

    SECTION
      5.  So
      long
      as any bonds of the Eighty-first Series and remain Outstanding, unless this
      provision shall have been waived in writing by the holders of a majority in
      aggregate principal amount of bonds of the Eighty-first Series Outstanding
      at
      the time of such consent, subdivision (c) of Section 65 of the Mortgage shall
      read as follows:

     

    “(c)
      Failure to pay interest or premium, if any, upon or principal (whether at
      maturity as therein expressed or by declaration, or otherwise) of any
      Outstanding Qualified Lien Bonds or of any outstanding indebtedness secured
      by
      any mortgage or other lien (not included in the term Excepted Encumbrances)
      prior to the lien of this Indenture, existing upon any property of the Company
      which is subject to the lien and operation of this Indenture continued beyond
      the period of grace, if any, specified in such mortgage or Qualified Lien or
      other lien securing the same;”

     

    SECTION
      6.  A
      breach
      of a specified covenant or agreement of the Company contained in this
      Seventy-third Supplemental Indenture shall become a Default under the Indenture
      upon the happening of the events provided in Section 65(g) of the Mortgage
      with
      respect to such a covenant or agreement.

     

    SECTION
      7.  The
      Trustee hereby accepts the trusts herein declared, provided, created or
      supplemented and agrees to perform the same upon the terms and conditions herein
      and in the Mortgage, as heretofore supplemented, set forth and upon the
      following terms and conditions:

     

    The
      Trustee shall not be responsible in any manner whatsoever for or in respect
      of
      the validity or sufficiency of this Seventy-third Supplemental Indenture or
      for
      or in respect of the recitals contained herein, all of which recitals are made
      by the Company solely. Each and every term and condition contained in Article
      XVII of the Mortgage, as heretofore amended by said First through Seventy-second
      Supplemental Indentures, shall apply to and form part of this Seventy-third
      Supplemental Indenture with the same force and effect as if the same were herein
      set forth in full with such omissions, variations and insertions, if any, as
      may
      be appropriate to make the same conform to the provisions of this Seventy-third
      Supplemental Indenture.

     

    SECTION
      8.  Nothing
      in this Seventy-third Supplemental Indenture, expressed or implied, is intended,
      or shall be construed, to confer upon, or to give to, any person, firm or
      corporation, other than the parties hereto and the holders of the bonds and
      coupons Outstanding under the Indenture, any right, remedy or claim under or
      by
      reason of this Seventy-third Supplemental Indenture or by any covenant,
      condition, stipulation, promise or agreement hereof, and all the covenants,
      conditions, stipulations, promises and agreements in this Seventy-third
      Supplemental Indenture contained by or on behalf of the Company shall be for
      the
      sole and exclusive benefit of the parties hereto, and of the holders of the
      bonds and coupons Outstanding under the Indenture.

     

    SECTION
      9.  This
      Seventy-third Supplemental Indenture shall be executed in several counterparts,
      each of which shall be an original and all of which shall constitute but one
      and
      the same instrument.

     

    PPL
      ELECTRIC UTILITIES CORPORATION does hereby constitute and appoint JAMES E.
      ABEL,
      Treasurer of PPL ELECTRIC UTILITIES CORPORATION, to be its attorney for it,
      and
      in its name and as and for its corporate act and deed to acknowledge this
      Seventy-third Supplemental Indenture before any person having authority by
      the
      laws of the Commonwealth of Pennsylvania to take such acknowledgment, to the
      intent that the same may be duly recorded, and DEUTSCHE BANK TRUST COMPANY
      AMERICAS does hereby constitute and appoint Susan Johnson, a Vice President
      of
      DEUTSCHE BANK TRUST COMPANY AMERICAS, to be its attorney for it, and in its
      name
      and as and for its corporate act and deed to acknowledge this Seventy-third
      Supplemental Indenture before any person having authority by the laws of the
      Commonwealth of Pennsylvania to take such acknowledgment, to the intent that
      the
      same may be duly recorded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, PPL ELECTRIC UTILITIES CORPORATION has caused its corporate
      name to be hereunto affixed, and this instrument to be signed and sealed by
      its
      President, one of its Vice Presidents or its Treasurer, and its corporate seal
      to be attested by its Secretary or one of its Assistant Secretaries for and
      in
      its behalf, in the City of Allentown, Pennsylvania, and DEUTSCHE BANK TRUST
      COMPANY AMERICAS has caused its corporate name to be hereunto affixed, and
      this
      instrument to be signed and sealed by one of its Principals, Vice Presidents,
      Trust Officers or Associates, and its corporate seal to be attested by one
      of
      its Vice Presidents, Assistant Vice Presidents, Trust Officers or Associates,
      in
      The City of New York, as of the day and year first above written.

     

        PPL
      ELECTRIC UTILITIES CORPORATION

     

        By: ___________________________________

        Name:  James
      E. Abel

        Title:  Treasurer

     Attest:

     

    ___________________________________

    Assistant
      Secretary

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

        DEUTSCHE
      BANK TRUST COMPANY AMERICAS

     

        By: ______________________________________

        Name: Susan
      Johnson

        Title: Vice
      President

    Attest:

     

    ______________________________________

    Dorothy
      Robinson

    Vice
      President

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                COMMONWEALTH
                  OF PENNSYLVANIA

              	
                )

              
	 	
                )   
                  ss.:

              
	
                COUNTY
                  OF LEHIGH

                 

              	
                )

                 

              

      

    

     

     

    On
      this
      17th
      day of
      May, 2005, before me, a notary public, the undersigned, personally appeared
      JAMES E. ABEL, who acknowledged himself to be the Treasurer of PPL ELECTRIC
      UTILITIES CORPORATION, a corporation and that he, as such Treasurer, being
      authorized to do so, executed the foregoing instrument for the purposes therein
      contained, by signing the name of the corporation by himself as
      Treasurer.

     

    In
      witness whereof, I hereunto set my hand and official seal.

     

        ______________________________________

        Notary
      Public

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF NEW YORK

            	
              )

            
	 	
              )   
                ss.:

            
	
              COUNTY
                OF NEW YORK

               

            	
              )

               

            

    

    On
      this
      17th
      day of
      May, 2005, before me, a notary public, the undersigned, personally appeared
      Susan Johnson, who acknowledged herself to be a Vice President of DEUTSCHE
      BANK
      TRUST COMPANY AMERICAS,
      a
      corporation and that she, as such Vice President, being authorized to do so,
      executed the foregoing instrument for the purposes therein contained, by signing
      the name of the corporation by herself as Vice President.

     

    In
      witness whereof, I hereunto set my hand and official seal.

     

         ______________________________________

         Notary
      Public

     

    

     

    

     

    Deutsche
      Bank Trust Company Americas hereby certifies that its precise name and address
      as Trustee hereunder are:

     

    DEUTSCHE
      BANK TRUST COMPANY AMERICAS

    Trust
      & Securities Services

    60
      Wall
      Street, MS NYC60-2710

    New
      York,
      New York 10005

     

        DEUTSCHE
      BANK TRUST COMPANY AMERICAS

     

        By:
      ______________________________________

        Name: Susan
      Johnson 

        Title: Vice
      President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]