WAUSAU-MOSINEE PAPER CORPORATION
2000 STOCK OPTION PLAN
WAUSAU-MOSINEE PAPER CORPORATION
2000 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan has been adopted to enable the
Company to attract and retain management-level employees and directors
and to link stock-based individual participant incentives directly to
the Company's financial performance and increases in shareholder value.
SECTION 2. CERTAIN DEFINITIONS. As used in this Plan, and in
addition to any terms elsewhere defined in this Plan, the following
terms, when capitalized, shall have the meanings set forth in this
Section 2.
SECTION 2.1. "BOARD" means the Board of Directors of the Company.
SECTION 2.2. "CAUSE" means, with respect to any Optionee and unless
otherwise provided by the Committee, (a) "Cause" as defined in any
Option Agreement for the benefit of the Optionee, or (b) if there is no
definition of "Cause" in the Optionee's Option Agreement, then with
respect to such Optionee, Cause means: (i) an intentional failure to
perform assigned duties; (ii) willful misconduct in the course of the
Optionee's employment; (iii) breach of a fiduciary duty involving
personal profit or acts or omissions of personal dishonesty,
including, but not limited to, commission of any crime of theft,
embezzlement, or misapplication of funds; (iv) any intentional,
reckless, or negligent act or omission to act which results in the
violation by the Optionee of any policy established by the Company or a
Subsidiary which is intended to insure compliance with applicable
securities, environmental, employment discrimination, or other laws or
which causes or results in the Company's or a Subsidiary's violation of
such laws, except any act done by the Optionee in good faith, as
determined in the reasonable discretion of the Committee, or which
results in a violation of such policies or laws which is, in the
reasonable sole discretion of such Committee, immaterial; or (v) any of
the foregoing which results in material loss to the Company or any of
its Subsidiaries. The Committee shall have the sole discretion to
determine whether Cause exists, and the Committee's determination shall
be final.
SECTION 2.3. "CHANGE IN CONTROL" has the meaning set forth in
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Section 8.2.
SECTION 2.4. "CODE" means the Internal Revenue Code of 1986, as
amended. The reference to any specific section of the Code or any
regulation promulgated thereunder shall include any successor section
or sections or regulation or regulations, as the case may be.
SECTION 2.5. "COMMITTEE" means, subject to the provisions of
Section 4, the Option and SAR Committee of the Board.
SECTION 2.6. "COMMON STOCK" means the common stock, no par value,
of the Company.
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SECTION 2.7. "COMPANY" means Wausau-Mosinee Paper Corporation, a
Wisconsin corporation.
SECTION 2.8. "DIRECTOR" means a member of the Board, and includes
all such members who are also employees of the Company.
SECTION 2.9. "DISABILITY" means (a) a physical or mental condition
which qualifies as a total and permanent disability under the terms of
any plan or policy maintained by the Company or a Subsidiary and for
which the Optionee is eligible to receive benefits under such plan or
policy, or (b) if the Optionee does not participate in a disability
plan or is not covered by a disability policy of the Company or a
Subsidiary, Disability means the permanent and total inability of the
Optionee by reason of mental or physical infirmity, or both, to perform
the work customarily assigned to him or her, if a medical doctor
selected or approved by the Committee, and knowledgeable in the field
of such infirmity, advises the Committee either that it is not possible
to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of
said Optionee's lifetime.
SECTION 2.10. "EFFECTIVE DATE" means June 22, 2000.
SECTION 2.11. "EMPLOYED," and any variation thereof such as
"EMPLOYMENT," means, as appropriate, employed by or employment with any
of the Company or any present or future Subsidiary.
SECTION 2.12. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended. The reference to any specific section of the
Exchange Act or any regulation promulgated thereunder shall include any
successor section or sections or regulation or regulations, as the case
may be.
SECTION 2.13. "FAIR MARKET VALUE" of a share of Common Stock as of
any date means the price per Share as determined in accordance with the
following:
(A) EXCHANGE. If the principal market for the Common Stock
is a national securities exchange, "Fair Market Value" means the
average of the highest and lowest reported sale prices of the Common
Stock on the New York Stock Exchange Composite Tape if the Common Stock
is then listed for trading on such exchange, otherwise, the average of
the highest and lowest reported sales prices of the Common Stock in any
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transaction reported on the principal exchange on which the Common
Stock is then listed for trading.
(B) OVER-THE-COUNTER. If the principal market for the Common
Stock is an over-the-counter market, "Fair Market Value" means the
average of the highest bid and lowest ask prices of the Common Stock
reported in the Nasdaq National Stock Market, or if the Common Stock is
not then listed for trading in such market, the average of the highest
bid and lowest ask prices reported on any other bona fide
over-the-counter stock market selected in good faith by the Committee.
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(C) DATE. If the date on which Fair Market Value is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the
next preceding business day for which transactions were reported.
(D) OTHER DETERMINATION. If subparagraphs (a) and (b) are
not applicable, Fair Market Value shall mean such amount as may be
determined by the Committee by whatever means or method as the
Committee, in the good faith exercise of its discretion, shall at such
time deem appropriate.
SECTION 2.14. "INCENTIVE STOCK OPTION" means an Option granted
pursuant to the terms of the Plan which is intended by the Committee to
meet the requirements of an "incentive stock option" within the meaning
of Section 422 of the Code; provided, however, that to the extent an
Incentive Stock Option is exercised after the expiration of any
limitation on the time of exercise applicable under Section 422 of the
Code, or such Option does not meet the qualifications of an "incentive
stock option" within the meaning of such Section 422, such Option shall
thereafter be a Non-Qualified Option.
SECTION 2.15. "NON-QUALIFIED OPTION" means (a) an Option granted
pursuant to the terms of the Plan which the Committee intends shall not
meet the requirements of an "incentive stock option" within the meaning
of Section 422 of the Code, and (b) any Option intended to be an
Incentive Stock Option which does not satisfy the terms, or is not
exercised in accordance with the requirements of, Section 422 of the
Code.
SECTION 2.16. "OPTION" means an option to purchase Shares awarded
pursuant to the provisions of Section 6.
SECTION 2.17. "OPTION AGREEMENT" means the written document which
evidences an award of Options, whether or not such document requires
the signature of the Optionee.
SECTION 2.18. "OPTIONEE" means an eligible individual, as
determined in accordance with Section 5, who has been granted an
Option.
SECTION 2.19. "OPTION PRICE" means, with respect to each Option,
the price per Share at which such Option may be exercised and the
Shares subject to such Option purchased.
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SECTION 2.20. "PLAN" means the Wausau-Mosinee Paper Corporation
2000 Stock Option Plan as set forth herein or as hereafter amended.
SECTION 2.21. "RETIREMENT" means, with respect to an Optionee who
is Employed, the Termination of Service by the Optionee on or after the
date on which the Optionee had attained age fifty-five and completed
ten calendar years of service with the Company, including service with
any Subsidiary, and, with respect to a Director who is not Employed,
the Termination of Service by the Director on or after the completion
of not less than five calendar years of service as a Director.
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SECTION 2.22. "SHARE" means a share of Common Stock.
SECTION 2.23. "SUBSIDIARY" means any corporation, partnership, or
other entity in which the Company owns, directly or indirectly, at
least a 50% interest in the voting rights or profits.
SECTION 2.24. "TERMINATION OF SERVICE" means, (a) with respect to
an Employed Optionee, the Optionee's termination of Employment, and (b)
with respect to a Director who is not Employed, the termination of such
Optionee's service as a Director. An Optionee Employed by a Subsidiary
shall also be deemed to incur a Termination of Service if the
Subsidiary ceases to be such a Subsidiary and the Optionee does not
immediately thereafter become an employee of the Company or another
Subsidiary. Temporary absences from Employment because of illness,
vacation, or leave of absence and transfers among the Company and its
Subsidiaries shall not be considered Terminations of Service. For
purposes of the Plan, the Optionee's Termination of Service shall be
deemed to have occurred at the close of business on the day preceding
the first date on which he or she is no longer for any reason
whatsoever Employed, or, in the case of a Director, the first date on
which he or she is no longer a Director.
SECTION 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
SECTION 3.1. SHARES SUBJECT. The aggregate number of Shares which
may be delivered under Options awarded pursuant to the Plan shall be
equal to the sum of (a) 3,000,000 and (b) any Shares available for
future awards under all prior stock option plans of the Company (the
"Prior Plans") as of the Effective Date, including any Shares with
respect to which options awarded under any Prior Plans are hereafter
forfeited, expire, or are canceled without delivery of Shares.
SECTION 3.2. UNDELIVERED SHARES. To the extent any Shares subject
to an Option are not delivered to the Optionee (or the estate or other
transferee of such Optionee) because the Option is forfeited, expires,
or otherwise becomes unexercisable, or the Shares are not delivered
because the Shares are used to satisfy the applicable tax withholding
obligation of the Optionee, such Shares shall be deemed not to have
been delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
SECTION 3.3. EXERCISE USING SHARES. If the Option Price of any
Option awarded under the Plan or any Prior Plan is satisfied by
tendering Shares to the Company (by actual delivery or attestation),
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only the number of Shares issued to the Optionee (or the estate or
other transferee of such Optionee), net of the Shares tendered, shall
be deemed delivered for purposes of determining the maximum number of
Shares available for delivery under the Plan.
SECTION 3.4. STOCK DIVIDENDS, ETC. If the Company shall, after
the Effective Date, change the Common Stock into a greater or lesser
number of Shares through a stock dividend, stock split-up, or
combination of Shares, then (a) the number of Shares then subject to
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the Plan, but which are notthen subject to any outstanding Option, (b)
the number of Shares subject to each then outstanding Option (to the
extent not previously exercised), and (c) the price per Share payable
upon exercise of each then outstanding Option, shall all be
proportionately increased or decreased as of the record date for such
stock dividend, stock split-up, or combination of Shares in order to
give effect thereto. Notwithstanding any such proportionate increase
or decrease, no fraction of a Share shall be issued upon the exercise
of an Option or the Shares subject to an Option shall be rounded to the
nearest whole Share and the Option Price shall be rounded to the
nearest full cent.
SECTION 3.5. OTHER CHANGES. If, after the Effective Date, there
shall be any change in the Common Stock or other change in the
capitalization of the Company other than through a stock dividend,
stock split-up, or combination of Shares, including, but not limited
to, a change which results from a merger, consolidation, spin-off, or
other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization is within the
meaning of Section 368 of the Code), or any partial or complete
liquidation of the Company, then if, and only if, the Committee shall
determine that such change equitably requires an adjustment in the
number or kind of Shares then subject to an Option, the Option Price
with respect to an Option, or the number of Shares or class of stock
remaining subject to the Plan, such adjustment as the Committee shall
determine is equitable and as shall be approved by the Board shall be
made and shall be effective and binding for all purposes of such Option
and the Plan. If any member of the Board shall, at the time of such
approval, be an Optionee, he shall not participate in any action in
connection with such adjustment.
SECTION 4. ADMINISTRATION OF THE PLAN.
SECTION 4.1 THE COMMITTEE.
(A) MEMBERSHIP QUALIFICATIONS. Except as provided in this
Section 4.1, at all times the Committee shall consist of not less than
three members designated by the Board from among those Directors who
are not officers or employees of the Company or a Subsidiary and each
of whom is (a) a "non-employee director" within the meaning of Rule
16b-3 under the Exchange Act (a "Non-Employee Director") and (b) an
"outside director" within the meaning of Section 162(m) of the Code (an
"Outside Director"); provided, however, that in addition to the Board's
general authority to amend the Plan as provided for in Section 9.1, the
Board shall have the specific authority to modify or eliminate the
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foregoing qualifications or adopt such other qualifications as are
reasonably intended to result in (x) the award of Options, and
transactions with respect to the award or exercise of such Options,
satisfying an exemption from Section 16(b) of the Exchange Act, or any
successor thereto, and (y) compensation recognized by Optionees
qualifying as a deductible expense of the Company under the
"performance-based compensation" exception to compensation deduction
limits which would otherwise be imposed on the Company under Section
162(m) of the Code.
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(B) APPOINTMENT OF OTHER MEMBERS. In the event that one or
more members of the Committee shall fail to meet the qualifications set
forth in Section 4.1(a), the Board shall remove such member or members
and appoint a successor or successors who satisfy such qualifications.
The Board shall act in a reasonably prompt manner to fill any vacancy
on the Committee from among such of its members who are both
Non-Employee Directors and Outside Directors.
(C) VALIDITY OF GRANTS. Notwithstanding the qualifications
for members of the Committee established in Section 4.1(a), any award
of Options made by the Committee in good faith and without the
knowledge that one or more of its members did not satisfy such
qualifications, shall be valid and enforceable by the Optionee even
though the members of the Committee did not, at the time of such award,
satisfy such qualifications.
SECTION 4.2 AUTHORITY OF COMMITTEE. The Plan shall be
administered by the Committee. The Committee shall, subject to the
terms of the Plan (including, specifically, Section 6.1), have the
authority to, in its sole discretion, (a) select eligible individuals
to receive an award of one or more Options and to participate in the
Plan, (b) determine the number of Shares subject to each award and the
Option Price associated therewith, (c) establish terms and conditions
concerning the time of, and conditions precedent to, the exercisability
of each award (including, without limitation, conditions with respect
to the passage of time, financial performance of the Company,
satisfaction of performance or other goals of the Optionee,
restrictions on competitive employment or satisfaction of Company
policies, increase in Fair Market Value of the Common Stock, and any
other conditions which the Committee deems reasonably related to the
satisfaction of the purposes of the Plan), (d) determine the form of
each Option Agreement and all terms and conditions thereof with respect
to each award, including adoption of a formula providing for the award
of Options to Directors at specified intervals, (e) interpret the Plan
and the application thereof and establish such rules and regulations
as it deems necessary or desirable for the administration of the Plan,
(f) modify or cancel any Option or take such action to cause the
vesting or exercisability of any or all outstanding Options to become
exercisable in part or in full for any reason at any time, subject to
the limitation of Section 9.1, and (g) exercise such other authority as
is reasonably related to the administration of and/or the fulfillment
of the purpose of the Plan. All actions, interpretations, rules,
regulations, and conditions taken or established by the Committee shall
be final, binding, and conclusive upon the Company and all Optionees.
SECTION 4.3 ACTIONS BY THE COMMITTEE. A majority of the members
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of the Committee shall constitute a quorum. In the absence of specific
rules to the contrary, action by the Committee shall require the
consent of a majority of the members of the Committee, expressed either
orally at a meeting of the Committee or in writing in the absence of a
meeting.
SECTION 4.4 LIMITATION ON LIABILITY AND INDEMNIFICATION OF BOARD.
No Director, no executive officer or other employee of the Company, and
no other agent or representative of the Company shall be liable for any
act, omission, interpretation, construction, or determination made in
connection with the Plan in good faith, and all such persons shall be
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entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage, or expense (including attorneys fees)
arising therefrom to the full extent permitted by law, except as
otherwise may be provided in the Company's articles of incorporation
and/or bylaws, and under any directors' and officers' liability
insurance that may be in effect from time to time.
SECTION 5. INDIVIDUALS ELIGIBLE TO BECOME OPTIONEES. Subject to
the provisions of Section 6.1(b), (a) salaried employees of the Company
and any Subsidiary who function in management, administrative, or
professional capacities, (b) prospective salaried employees who have
accepted offers of employment from the Company or a Subsidiary and will
function in a management, administrative, or professional capacity, and
(c) Directors shall be eligible to be selected, in the sole discretion
of the Committee, to participate in, and receive an award of one or
more Options pursuant to, the Plan.
SECTION 6. AWARDING OF OPTIONS.
SECTION 6.1. OPTIONEES.
(A) AWARDS BY COMMITTEE. Options shall be awarded to such
eligible individuals, as determined by the provisions of Section 5, as
the Committee may, from time to time and at any time, select.
Membership of an employee or a prospective employee in a class of
management, administrative, or professional employees or election as a
Director shall not, without specific Committee action and except as
provided in Section 6.1(b), entitle such person to receive an Option
award.
(B) INITIAL AWARDS TO DIRECTORS. On August 7, 2000, each
person who was a Director on such date shall be granted a Non-Qualified
Option to purchase 15,000 shares of Common Stock at an Option Price
equal to the Fair Market Value of the Common Stock on the Effective
Date.
SECTION 6.2 OPTION AGREEMENT. Each Option shall be evidenced by
an Option Agreement, the terms of which may differ from other Option
Agreements. Each Option Agreement evidencing an award of an Option by
the Committee pursuant to Section 6.1(a) shall be signed on behalf of
the Company and, if so provided by the Committee, the Optionee, and
shall set forth with respect to the Option awarded therein, the name of
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the Optionee, the date awarded, the Option Price, whether the Option is
an Incentive Stock Option or a Non-Qualified Stock Option, the number
of Shares subject to the Option, and such other terms and conditions
consistent with the Plan as determined by the Committee. Each Option
Agreement evidencing a Non-Qualified Option awarded pursuant to Section
6.1(b) shall be signed on behalf of the Company and shall set forth
with respect to the Option awarded therein, the name of the Optionee,
the date awarded, the Option Price, the number of Shares subject to the
Option, and shall be in such form as the Committee deems appropriate.
The Committee may at the time of award or at any time thereafter impose
such additional terms and conditions on the exercise of such Option as
it deems necessary
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or desirable for such Option, or the exercise thereof, to be exempt
under Section 16(b) of the Exchange Act, and the regulations
promulgated thereunder, and to qualify as "performance-based
compensation" under Section 162(m) of the Code, and the regulations
promulgated thereunder. Each Option Agreement shall be entered into
subject to, and shall incorporate by reference, all terms, conditions,
and limitations set forth in the Plan.
SECTION 6.3 TERMS AND CONDITIONS OF THE OPTIONS. In addition to
any other terms, conditions, and limitations specified in the Plan,
each Option awarded hereunder shall, as to each Optionee, satisfy the
following requirements:
(A) DATE OF AWARD. Options must be awarded on or before June
21, 2010.
(B) EXPIRATION. No Incentive Stock Option shall be
exercisable after the expiration of ten years from the date such Option
is awarded. No Non-Qualified Stock Option shall be exercisable after
the expiration of twenty years from the date such Option is awarded.
(C) PRICE. The Option Price as to any Share subject to an
Option may not be less than the Fair Market Value of the Share on the
date the Option is awarded.
(D) LIMITATIONS ON TRANSFERABILITY. No Option shall be
transferable by the Optionee other than by will or the laws of descent
and distribution, nor can it be exercised by anyone other than the
Optionee during the Optionee's lifetime. No Option may be sold,
transferred, assigned, pledged, hypothecated, encumbered, or otherwise
disposed of (whether by operation of law or otherwise), or be subject
to execution, attachment, or similar process. Upon any attempt to so
sell, transfer, assign, pledge, hypothecate, encumber, or otherwise
dispose of any such award, such award and all rights thereunder shall
immediately become null and void.
(E) EXERCISE. Except as otherwise permitted by the
Committee, or as provided in Section 6.4, or as elsewhere provided in
this Section 6.3(e), Options must be exercised, or shall be forfeited,
in accordance with the following time limitations:
(I) TERMINATION BY REASON OF DEATH. If the Optionee
incurs a Termination of Service by reason of death, any Option held by
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such Optionee on the Optionee's date of death may thereafter be
exercised, to the extent it was exercisable on the date of the
Optionee's death, for a period of one year from the date of death or
until the expiration of the stated term of such Option, whichever
period is shorter.
(II) TERMINATION BY REASON OF DISABILITY. If the
Optionee incurs a Termination of Service by reason of Disability, any
Option then held by such Optionee may thereafter be exercised to the
extent it was exercisable on the date of such Termination of Service
for a period of one year from the date of such Termination of Service
or until the expiration of the stated term of such Option, whichever
period is shorter.
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(III) TERMINATION BY REASON OF RETIREMENT. If the
Optionee incurs a Termination of Service by reason of Retirement, any
Option held by such Optionee may thereafter be exercised, to the extent
it was exercisable on the date of the Optionee's Termination of
Service, for a period of two years from the date of such Termination of
Service or until the expiration of the stated term of such Option,
whichever period is shorter.
(IV) OTHER TERMINATION. Unless otherwise determined by
the Committee, if the Optionee incurs a Termination of Service for
Cause, all Options then held by such Optionee shall terminate and may
not be exercised from and after the effective date of such Termination
of Service. If an Optionee incurs a Termination of Service for any
reason other than death, Disability, Retirement, or Cause, any Option
then held by the Optionee, to the extent it was exercisable on the date
of such Termination of Service, may be exercised for a period of three
months from the date of such Termination of Service or until the
expiration of the stated term of such Option, whichever period is
shorter.
(V) DEATH AFTER TERMINATION. If the Optionee dies
subsequent to a Termination of Service for any reason other than Cause,
then, notwithstanding any other limitation on the exercise of the
Optionee's Option set forth in subparagraphs (i), (ii), (iii), or (iv),
any Option held by such Optionee on the Optionee's date of death may
thereafter be exercised, to the extent it was exercisable on such date,
for a period of one year from the date of death or until the expiration
of the stated term of such Option, whichever period is shorter.
(VI) CHANGE IN CONTROL. Notwithstanding any other
provision of this Plan to the contrary, in the event the Optionee
incurs a Termination of Service other than for Cause during the
twelve-month period following a Change in Control, any Option held by
such Optionee may thereafter be exercised by the Optionee, to the
extent it was exercisable at the time of such Termination of Service,
for (A) the longer of (1) one year from the date of such Termination of
Service or (2) such other period as may be provided in the Plan from
such Termination of Service, or (B) until expiration of the stated term
of such Option, whichever period is shorter.
Notwithstanding any other provisions of this Section 6.3(e), the
exercisability of any Option shall be determined in regard to the
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status of the Optionee to which the grant was attributable. Options
granted to an Optionee by reason of his Employment shall be exercisable
in accordance with the foregoing provisions of subparagraphs (i)-(v)
with respect to the later of his Termination of Service as an Employee
or, if such Employee is also a Director, his Termination of Service as
a Director. Options granted by reason of the Optionee's status as a
Director shall be exercisable in accordance with the foregoing
provisions of subparagraphs (i)-(v) only with respect to his
Termination of Service as a Director. If an Incentive Stock Option is
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exercised after the expiration of the post-termination exercise periods
that apply for purposes of Section 422 of the Code, such Incentive
Stock Option will thereafter be treated as a Non-Qualified Stock Option.
(F) MINIMUM HOLDING PERIOD. No Option may be exercised
before the date which is six months after the later of (i) the date on
which the Plan is approved by the shareholders of the Company, or (ii)
the date on which such Option was awarded.
(G) ADDITIONAL RESTRICTIONS RELATING TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value
(determined as of the time the Option is awarded) of the Shares for
which Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under the Plan, any Prior Plans, or
any other plan of the Company or a Subsidiary) exceeds $100,000 (or
such other individual limit as may be in effect with regard to
incentive stock options under the Code on the date of award), such
Options shall not be Incentive Stock Options. No Incentive Stock
Option shall be awarded to a Director or to an Optionee who, at the
time such Option is awarded, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or
any Subsidiary within the meaning of Section 422(b)(6) of the Code
unless (i) at the time the Option is awarded, the Option Price is at
least 110% of the Fair Market Value of the Shares subject to the
Option, and (ii) such Option by its terms is not exercisable after
the expiration of five years from the date such Option is awarded.
(H) LIMITATION ON OPTION AWARDS. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
500,000 Shares.
SECTION 6.4. TERMINATION OR LAPSE OF OPTIONS. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date
set forth in the applicable Option Agreement, (b) the date on which the
Option is deemed to be forfeited or terminated under the terms of the
Plan or an Option Agreement, (c) the applicable date set forth in
Section 6.3(b), or (d) the date which is the day next following the
last day such Option could be exercised under Section 6.3(e).
SECTION 7. EXERCISE AND PAYMENT OF OPTION PRICE.
SECTION 7.1 EXERCISE OF OPTIONS. Each Option shall be exercised
as to all or a portion of the Shares subject to the Option by written
notice to the Company setting forth the exact number of Shares as to
which the Option is being exercised and including with such notice
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payment of the Option Price (plus the minimum required tax
withholding). The date of exercise shall be the date such written
notice and payment have been delivered (in cash or in such other manner
as provided in Section 7.2) to the Secretary of the Company either in
person or by depositing said notice and payment in the United States
mail, postage pre-paid and addressed to such officer at the Company's
principal office.
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SECTION 7.2 PAYMENT FOR SHARES. Payment of the Option Price (plus
required tax withholding) attributable to the exercise of an Option or
any portion thereof may be made (a) by tendering cash (in the form of a
check or otherwise) in such amount, (b) with the consent of the
Committee, by tendering, by either actual delivery of Shares owned by
the Optionee or by attestation, Shares with a Fair Market Value on the
date of exercise equal to such amount, (c) with the consent of the
Committee, by instructing the Committee to withhold a number of Shares
having a Fair Market Value on the date of exercise equal to the
aggregate exercise price of such Option, (d) by delivering a properly
executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the sale or loan proceeds
equal to such amount, or (e) any combination of (a), (b), (c), and (d);
provided, however, that any Shares delivered in payment of the Option
Price pursuant to clause (b) shall have been purchased on the open
market and held by the Optionee for at least six months at the time of
exercise of the Option.
SECTION 7.3 TAX WITHHOLDING. The delivery of Shares to an
Optionee or any other person under the Plan is subject to withholding
of all applicable taxes, and the Committee may condition the delivery
of any Shares or other benefits on satisfaction of applicable
withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit withholding obligations to
be satisfied through cash payment by the Optionee or other person
exercising an Option, through the surrender of Shares which the
Optionee or other person already owns, or through the surrender of
Shares to which the Optionee or other person is otherwise entitled
under the Plan.
SECTION 7.4 ISSUANCE OF SHARES. No certificates representing
Shares shall be issued until full payment therefor has been made. An
Optionee shall have all of the rights of a shareholder of the Company
holding the Common Stock that is subject to such Option (including, if
applicable, the right to vote the Shares and the right to receive
dividends) when the Optionee has given written notice of exercise, has
paid in full for such Shares, has, if requested, given the
representation described in Section 12.2, and a certificate
representing the Shares have been issued by the registrar and transfer
agent for the Common Stock. Notwithstanding any other provision of the
Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for Shares
under the Plan prior to fulfillment of all of the following conditions:
(a) Listing or approval for listing upon notice of issuance
of such Shares on the exchange or over-the-counter market as may at the
time be the principal market for the Common Stock;
<PAGE>
(b) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
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(c) Obtaining any other consent, approval, or permit from any
state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to
be necessary or advisable.
SECTION 8. CHANGE IN CONTROL.
SECTION 8.1 ADJUSTMENT OF OPTIONS.
(A) VESTING AND CASH PAYMENT. In the event of a Change in
Control,
(i) all Options outstanding on the date on which such
Change in Control has occurred (the "Change in Control Date")
shall, to the extent not then exercisable or vested, immediately
become exercisable in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on the
Change in Control Date to surrender such Option for an immediate
lump sum cash payment in an amount equal to the product of (A) the
number of Shares then subject to the Option as to which the
election is being exercised multiplied by (B) the excess, if any,
of (1) the greater of (a) the Change in Control Price or (b) the
highest Fair Market Value of a Share on any day in the 60-day
period ending on the Change in Control Date, over (2) the Option
Price of such Option. For purposes of this Section 8.1(a), the
"Change in Control Price" shall mean, if the Change in Control is
the result of a tender or exchange offer or a Corporate
Transaction (as defined in Section 8.2(c)), the highest price per
Share paid in such tender or exchange offer or Corporate
Transaction, and, to the extent that the consideration paid in any
such transaction consists all or in part of securities or other
noncash consideration, the value of such securities or other
noncash consideration shall be determined in the sole discretion
of the Committee.
(B) ELECTION. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the
Secretary of the Company either in person or by depositing said notice
and payment in the United States mail, postage pre-paid and addressed
to such officer at the Company's home office on or before the 60th day
following the Change in Control Date.
(C) PAYMENT DATE. All payments due an Optionee pursuant to
the provisions of this Section 8.1 shall be made by the Company on or
before the 5th business day following the date on which the Optionee's
election has been delivered to the Company pursuant to Section 8.1(b).
<PAGE>
(D) POOLING CONSIDERATIONS. Notwithstanding any other
provision of this Section 8.1, if the grant or the exercise of an
Optionee's Election Right or payment of cash provided for in this
Section 8.1 would make a Change in Control transaction ineligible for
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pooling-of-interests accounting treatment under APB No. 16, that, but
for the nature of such grant or exercise of Election Rights or payment
of cash, would otherwise be eligible for such pooling-of-interests
accounting treatment, the Committee shall have the right and authority
to substitute for the cash payments to be made to the Optionee pursuant
to Section 8.1(a), Common Stock with a Fair Market Value, determined as
of the date of delivery of such Shares, equal to the cash that would
otherwise be payable to such Optionee in connection with the exercise
of an Optionee's Election Right hereunder or, to the extent necessary
to preserve such pooling-of-interests accounting treatment, to
otherwise modify, eliminate, or terminate such Election Right.
SECTION 8.2 DEFINITION OF "CHANGE IN CONTROL." For purposes of
the Plan, a "Change in Control" means the happening of any of the
following events:
(A) The acquisition by any individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the then outstanding shares of common stock
of the Corporation (the "Outstanding Corporation Common Stock")
or (ii) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the
election of directors (the "Outstanding Corporation Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Corporation other than an
acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired
directly from the Corporation, (B) any acquisition by the
Corporation, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any
entity controlled by the Corporation, (D) any acquisition
pursuant to a transaction which complies with clauses (i), (ii),
and (iii) of paragraph (c) of this Section 8.2, (E) except as
provided in paragraphs (d) and (e), any acquisition by any of the
Woodson Entities or any of the Smith Entities, or (F) any increase
in the proportionate number of shares of Outstanding Corporation
Common Stock or Outstanding Corporation Voting Securities
beneficially owned by a Person to 20% or more of the shares of
either of such classes of stock if such increase was solely the
result of the acquisition of Outstanding Corporation Common Stock
or Outstanding Corporation Voting Securities by the Corporation;
provided, however, that this clause (F) shall not apply to any
acquisition of Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities not described in clauses (A), (B),
(C), (D), or (E) of this paragraph (a) by the Person acquiring
such shares which occurs after such Person had become the
beneficial owner of 20% or more of either the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
<PAGE>
Securities by reason of share purchases by the Corporation; or
(B) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board; provided, however, for purposes of the Plan, that any
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individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be deemed to be and shall be
considered as though such individual were a member of the
Incumbent Board, but provided, further, that any such individual
whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall
not be so deemed or considered as a member of the Incumbent Board;
or
(C) Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or
substantially all of the assets of the Corporation or the
acquisition of the assets or securities of any other entity (a
"Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more
subsidiaries) (the "Resulting Corporation") in substantially the
same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case may be,
(ii) no Person (other than the Corporation, any employee benefit
plan (or related trust) of the Corporation, any Woodson Entity,
any Smith Entity, or such Resulting Corporation) will beneficially
own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the Resulting Corporation or
the combined voting power of the then outstanding voting
securities of such Resulting Corporation entitled to vote
generally in the election of directors except to the extent that
such ownership existed with respect to the Corporation prior to
the Corporate Transaction, and (iii) individuals who were members
<PAGE>
of the Incumbent Board will constitute at least a majority of the
members of the board of directors of the Resulting Corporation; or
(D) the Woodson Entities acquire beneficial ownership of more
than 35% of the Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities or of the outstanding
shares of common stock or the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the Resulting
Corporation; or
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(E) the Smith Entities acquire beneficial ownership of more
than 35% of the Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities or of the outstanding
shares of common stock or the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the Resulting
Corporation; or
(F) The approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
For purposes of this Section 8.2, the term "Woodson Entities"
shall mean Aytchmonde P. Woodson, Leigh Yawkey Woodson, and Alice
Richardson Yawkey, members of their respective families and their
respective descendants (the "Woodson Family"), heirs or legatees
of any of the Woodson Family members, transferees by will, laws of
descent or distribution, or by operation of law of any of the
foregoing (including any such transferees) (including any executor
or administrator of any estate of any of the foregoing), any
trust established by any of Aytchmonde P. Woodson, Leigh Yawkey
Woodson, or Alice Richardson Yawkey, whether pursuant to last will
or otherwise, any partnership, trust, or other entity established
primarily for the benefit of, or any other Person the beneficial
owners of which consist primarily of, any of the foregoing or any
Affiliates or Associates of any of the foregoing or any charitable
trust or foundation to which any of the foregoing transfers or may
transfer securities of the Corporation (including any beneficiary
or trustee, partner, manager, or director of any of the foregoing,
or any other Person serving any such entity in a similar
capacity).
For purposes of this Section 8.2, the term "Smith Entities" shall
mean David B. Smith and Katherine S. Smith, members of their
respective families and their respective descendants (the "Smith
Family"), heirs or legatees of any of the Smith Family members,
transferees by will, laws of descent or distribution, or by
operation of law of any of the foregoing (including of any such
transferees) (including any executor or administrator of any
estate of any of the foregoing), any trust established by either
of David B. Smith or Katherine S. Smith, whether pursuant to last
will or otherwise, any partnership, trust, or other entity
established primarily for the benefit of, or any other Person the
beneficial owners of which consist primarily of, any of the
foregoing or any Affiliates or Associates of any of the foregoing
or any charitable trust or foundation to which any of the
<PAGE>
foregoing transfers or may transfer securities of the Corporation
(including any beneficiary or trustee, partner, manager, or
director of any of the foregoing, or any other Person serving any
such entity in a similar capacity).
For purposes of this Section 8.2, the terms "Affiliate" and
"Associate" shall have the meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act
as in effect on the date of this Plan.
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SECTION 9. AMENDMENT AND TERMINATION OF PLAN.
SECTION 9.1 AMENDMENT OF PLAN. The Board may amend the Plan from
time to time and at any time; provided, however, that (a) except as
specifically provide herein, no amendment shall, in the absence of
written consent to the change by the affected Optionee, adversely
affect such Optionee's rights under any Option which has been awarded
prior to the amendment except to the extent such amendment is, in the
sole opinion of the Committee, required to comply with any stock
exchange rules, accounting rules, or laws applicable to the Company or
the Plan, (b) no amendment with respect to the maximum number of Shares
which may be issued pursuant to Options under the Plan or to any
individual in any calendar year made be made unless approved by a
majority of the Shares entitled to vote at a meeting of the
shareholders if such amendment would, in the absence of such approval
and in the sole opinion of the Committee, have an adverse effect on the
Company under applicable tax or securities laws or accounting rules,
and (c) no amendment shall be made without the approval of the
Company's shareholders to the extent such approval is required by
applicable law or stock exchange rules.
SECTION 9.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) June 21, 2010 or (b) the date specified by the
Board as the effective date of Plan termination; provided, however,
that the termination of the Plan shall not limit or otherwise affect
any Options outstanding on the date of termination.
SECTION 10. EFFECTIVE DATE. Notwithstanding any provision of this
Plan to the contrary, the Plan shall not be effective, and any Options
awarded under the Plan shall be null and void, unless the adoption of
the Plan is approved at the annual meeting of the Company's
shareholders next following the Effective Date by the majority of the
shares entitled to vote at such meeting.
SECTION 11. INVESTMENT INTENT. The Committee may require each
Optionee or other person purchasing or receiving Shares pursuant to the
exercise of an Option, to represent to and acknowledge that the Shares,
if not registered by the Company under the Securities Act of 1933 (the
"1933 Act"), may not be freely transferable by the holder after
exercise of the Option, that by acceptance of an Option or Shares that
such Optionee or other person understands that the application of the
1933 Act may restrict the transfer of such Shares, and that Shares
which are unregistered under the 1933 Act will be acquired for the
<PAGE>
account of the Optionee or other person for investment only and not
with a view to offer for sale or for sale in connection with the
distribution or transfer thereof. Certificates issued by the Company
and representing Shares acquired pursuant to the exercise of an Option
may include any legend or legends which the Company deems appropriate
to reflect any restrictions imposed under the 1933 Act.
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SECTION 12. AVAILABILITY OF INFORMATION.
SECTION 12.1. REGISTERED SHARES. If the Shares subject to an
Option have been registered pursuant to the 1933 Act, the Company shall
provide the Optionee with such information as may be required under the
applicable registration form on which such Shares were registered.
SECTION 12.2. UNREGISTERED SHARES. If the Shares subject to an
Optionee's Option are not registered or to be registered under the 1933
Act, the Company shall furnish each Optionee with (a) a copy of the
Plan and the Company's most recent annual report to its shareholders at
the time the Option Agreement is delivered to the Optionee and (b) a
copy of each subsequent annual report and proxy statement, on or about
the same date as such report shall be made available to shareholders of
the Company. Whether or not the shares are, or are to be, registered
under the 1933 Act, the Company will furnish, upon written request
addressed to the Secretary of the Company, but at no charge to the
Optionee or any duly authorized representative of the Optionee, a copy
of the Plan and copies of all reports filed by the Company with the
Securities and Exchange Commission, including, but not limited to, the
Company's annual reports on Form 10-K, its quarterly reports on Form
10-Q, and its proxy statements. Notwithstanding the foregoing
provisions of this Section 12, the Company shall not be required to
furnish any such report or statement if a copy of such report is
otherwise provided to the Optionee in connection with another plan
maintained by the Company or such Optionee's status as a shareholder
of the Company.
SECTION 13. LIMITATION OF RIGHTS.
SECTION 13.1. CONDITIONS OF SERVICE. The Plan shall not
constitute an contract of employment and participation in or
eligibility for participation in the Plan shall not confer upon any
employee the right to be continued as an employee of the Company or any
present or future Subsidiary or as a Director. The Company and each
Subsidiary hereby expressly reserves the right to terminate the
employment of any employee, with or without cause, as if the Plan and
any Options awarded pursuant to it were not in effect.
SECTION 13.2. COMPANY ASSETS. Neither the Optionee nor any other
person shall, by reason of receiving an award of an Option under the
Plan acquire any right, title, or interest in any assets of the Company
or any Subsidiary by reason of such Option or the Plan. To the extent
the Optionee or any other person shall acquire a right to receive
payments from the Company pursuant to an Option Agreement or the Plan,
such right shall be no greater than the right of any unsecured general
creditor of the Company.
<PAGE>
SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any
provision of this Plan to the contrary, if at any time the Company
shall be advised by its counsel that the exercise of any Option or the
delivery of Shares upon the exercise of an Option is required to be
approved, listed, registered, or qualified under any securities law,
that certain actions must be taken under the rules of any stock
exchange or over-the-counter market, that such exercise or delivery
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must be accompanied or preceded by a prospectus or similar circular
meeting the requirements of any applicable law, or that some other
action is required to be taken by the Company in compliance with
applicable law, the Company will use reasonable efforts to take all
actions required within a reasonable time, but exercise of the Options
or delivery by the Company of certificates for Shares may be deferred
until the Company shall be in compliance with all such requirements.
SECTION 15. GOVERNING LAW. The Plan, each Option awarded
hereunder and the related Option Agreement, and all determinations made
and actions taken pursuant thereto, to the extent not otherwise
governed by the Code or the laws of the United States, shall be
governed by the internal laws of the State of Wisconsin and construed
in accordance therewith without giving effect to the principles of
conflicts of laws applied by any state.
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