Exhibit 10.13
MOSINEE PAPER CORPORATION
1994 STOCK OPTION PLAN
As last amended effective
March 4, 1999
MOSINEE PAPER CORPORATION
1994 EXECUTIVE STOCK OPTION PLAN
Mosinee Paper Corporation, a corporation with its principal place of
business located in Mosinee, Wisconsin (the "Company"), hereby adopts the
Mosinee Paper Corporation 1994 Stock Option Plan (the "Plan"), as set
forth herein.
Section 1. PURPOSE. The Plan is intended to attract and retain key
employees and directors by permitting key employees of the Company or any
parent or subsidiary of the Company and directors of the Company to
acquire authorized and unissued, or reacquired, shares of common stock of
the Company pursuant to purchase options. The availability of the options
and grants thereof will furnish additional inducements to such employees
to continue employment with the Company, or any parent or subsidiary of
the Company, and such directors to continue serving as directors of the
Company, and encourage them, by giving them an opportunity to acquire a
greater stake in the Company's success, to increase their efforts to
promote the best interests of the Company and its stockholders.
It is the express intent of the Company that, subject to Section
6.2(h) hereof, all options granted hereunder designated "Incentive Stock
Options" shall meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor section or
sections. It is the further intent of the Company that options granted
hereunder designated "Non-Qualified Stock Options" shall not meet the
requirements of Section 422 of the Code. A key employee or director may
be granted and may hold one or more options under this Plan.
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Section 2. NUMBER OF SHARES AVAILABLE FOR OPTIONS. The aggregate
number of shares of common stock, no par value, of the Company (the
"Shares") which may be issued under options granted pursuant to the Plan
shall be 346,667.
Section 3. ADMINISTRATION OF THE PLAN.
Section 3.1 GENERAL. The Plan shall be administered by such committee
(the "Committee") as shall be designated by the Board of Directors of
Wausau-Mosinee Paper Corporation, which such committee shall have at least
two members who are not officers or employees of the Company or a parent
or subsidiary thereof and who otherwise satisfy the definition of a "Non-
Employee Director" in Rule 16b-3(b)(3) promulgated under Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act") and the definition of
an "Outside Director" in the regulations under Section 162(m) of the Code.
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 3.2 AUTHORITY OF COMMITTEE. The Committee shall have full
and complete authority to grant options to such eligible key employees on
such terms, which need not be the same as to all Employee Optionees, as
will, in its discretion and subject only to the specific limitations
elsewhere contained in the Plan, carry out the purpose of the Plan. The
Committee shall also have full and complete authority to interpret the
Plan and adopt rules governing the administration of the Plan. The
Committee's decision on any matter with respect to the Plan shall be
final.
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Section 3.3 INDEMNIFICATION OF COMMITTEE. To the extent permitted by
applicable law, the members of the Committee and each of them shall be
indemnified and saved harmless by the Company from any liability or claim
of liability which may arise from the administration of the Plan if the
acts giving rise to such liability or claim of liability were taken in
good faith and without negligence.
Section 4. ELIGIBLE EMPLOYEES AND DIRECTORS.
Section 4.1 KEY EMPLOYEES. Key employees (who may also be officers
or directors) of the Company (or any parent or subsidiary of the Company)
shall be eligible to be granted options pursuant to Section 5 of the Plan.
For purposes of the Plan, the term "key employee" shall include all
employees of all participating employers employed in management,
administrative or professional capacities.
Section 4.2 DIRECTORS. Directors of the Company (who may also be key
employees or officers of the Company (or any parent or subsidiary of the
Company)) shall be eligible to be granted options pursuant to Section 7 of
the Plan. Directors of the Company who are not also employees of the
Company (or any parent or subsidiary of the Company) shall not be eligible
to be granted options under Section 5 of the Plan.
Section 5. GRANTING OF OPTIONS TO KEY EMPLOYEES. Options to purchase
Shares shall be granted to such key employees who are eligible to
participate in the Plan as the Committee may, from time to time and at any
time, select. Membership in a class of eligible key employees shall not,
without specific Committee action, entitle a key employee to receive an
option to purchase Shares. Eligible key employees selected by the
Committee shall be referred to herein as "Employee Optionees."
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Section 6. TERMS AND CONDITIONS OF THE KEY EMPLOYEE OPTIONS.
Section 6.1 WRITTEN INSTRUMENT. Each option to purchase Shares
granted under Section 5 of the Plan shall be evidenced by a written option
agreement signed on behalf of the Company and the Employee Optionee which
sets forth the name of the Employee Optionee, the date granted, the price
at which the Shares subject to the option may be purchased (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. The Committee may at the time of grant or at any time
thereafter impose such additional terms and conditions on the exercise of
such option as it deems necessary or desirable for compliance with Section
16 of the Exchange Act and the regulations promulgated thereunder. Such
option agreement shall incorporate by reference all applicable terms,
conditions and limitations set forth in the Plan.
Section 6.2 TERMS AND CONDITIONS OF THE KEY EMPLOYEE OPTIONS. In
addition to any other limitations, terms and conditions specified in the
Plan, each option granted under Section 5 of the Plan shall, as to each
Employee Optionee, satisfy the following requirements:
(a) DATE OF GRANT. Options must be granted on or before
October 19, 2004.
(b) EXPIRATION. No Incentive Stock Option shall be exercisable
after the expiration of ten years from the date such option is granted.
No Non-Qualified Stock Option shall be exercisable after the expiration of
twenty years from the date such option is granted.
(c) PRICE. The option price as to any Share subject to either an
Incentive Stock Option or Non-Qualified Stock option granted under Section 5
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of the Plan will be not less than one hundred percent of the fair market
value of the Share on the date the option is granted. For purposes of the
Plan, the fair market value of a Share means:
(i) The mean between the high and the low prices at which the
Shares were traded if the Shares were then listed for
trading on a national or regional securities exchange or
were then traded on a bona fide over-the-counter market; or
(ii)If the Shares were not traded on an exchange or a bona
fide over-the-counter market, a value determined by an
appraiser selected by the Committee.
In the event that the date on which the fair market value of a Share is to
be determined is a date on which there is no trading of the Shares on a
national or regional securities exchange or on the over-the-counter
market, such fair market value shall be determined by referring to the
next preceding business day on which trading occurs.
(d) TRANSFERABILITY.
(i) No Incentive Stock Option shall be transferable by an
Employee Optionee otherwise than by will or the laws of
descent and distribution nor can it be exercised by anyone
other than the Employee Optionee during the Employee
Optionee's lifetime.
(ii)The Committee may, in its discretion, authorize all or a
portion of any Non-Qualified Stock Options to be granted
to an Employee Optionee under Section 5 of the Plan or
which were granted to any Employee Optionee on or before
October 31, 1996, to permit transfer by the Employee
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Optionee to (A) the spouse, children or grandchildren of
the Employee Optionee ("Immediate Family"), (B) a trust for
the exclusive benefit of the Employee Optionee or the
Employee Optionee's Immediate Family, (C) a partnership in
which the Employee Optionee or the Employee Optionee's
Immediate Family are the only partners, or (D) to a former
spouse of the Employee Optionee pursuant to a domestic
relations order within the meaning of Rule 16a-12
promulgated under Section 16 of the Exchange Act;
provided, however, that (X) there may not be consideration
for any such transfer, (Y) the written option agreement
required by Section 6.1, or any amendment thereof approved
by the Committee, must expressly provide for transferability
of the option evidenced in such agreement in a manner
consistent with this Section 6.2(d), and (Z) once
transferred pursuant to the preceding provisions of this
Section 6.2(d)(ii), no subsequent transfer of any options
shall be permitted except a transfer by will or the laws of
descent and distribution. In authorizing all or any portion
of an option to be transferred, the Committee may impose any
conditions on exercise, prescribe a holding period for the
Shares acquired upon such exercise and/or impose any other
conditions or limitations it deems desirable or necessary in
order to carry out the purposes and requirements
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of the Plan. Following transfer, the terms and conditions
of the Plan and the written option agreement relating to
such option shall continue to be applicable in all respects
to the Employee Optionee making such transfer and each
transferred option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to
transfer as if such option had not been transferred,
including, but not limited to, the terms and conditions with
respect to the lapse and termination of such option.
Neither the Company, the Committee or any Employee Optionee
shall have any obligation to inform any transferee of the
termination or lapse of any option for any reason.
Notwithstanding any other provision of the Plan, (YY)
following the termination of employment of an Employee
Optionee, a transferred option shall be exercisable by the
transferee only to the extent, and for the periods specified
in Section 6(e) as if such option had not been transferred
and (ZZ) no option granted prior to October 31, 1996, may be
transferred until such option has been held by the Employee
Optionee for a period of not less than six months after the
date on which such option was granted.
(e) EMPLOYMENT. Except as otherwise provided in the next
sentence, no option shall be exercisable unless the Optionee shall have
been employed by the Company (or any present or future parent or
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subsidiary of the Company) during the period beginning on the date the
option is granted and ending on a date ninety days before the date of
exercise (and subject to Section 12 herein); provided, however, that in
the event an Optionee dies while in the employ of the Company (or any
present or future parent or subsidiary of the Company) or within ninety
days after such employment had terminated, the employment period
requirement described above shall be deemed to have been satisfied. In
the event an Optionee has attained his Retirement Date (as defined
herein), (i) the provisions of the preceding sentence shall not be
applicable to such Optionee's Non-Qualified Stock Options and (ii) such
Optionee's Non-Qualified Stock Options shall not be exercisable after the
second anniversary of such Optionee's Retirement Date. For purposes of
this Plan, the term "Retirement Date" shall mean the date on which the
Optionee's employment with the Company (and any parent or subsidiary of
the Company) terminates (including termination because of death) if the
Optionee had then attained age 55 and completed ten calendar years of
service with the Company (or any parent or subsidiary of the Company).
(f) MINIMUM HOLDING PERIOD. No option granted prior to November
1, 1996, may be exercised before the date which is six months after the
date on which such option was granted. Each option granted under Section
5 of the Plan shall contain such additional or other restriction or
restrictions with respect to the stated percentage of Shares covered by
such option as to which such option may be exercised as the Committee may
deem desirable or necessary in order to carry out the purposes and
requirements of the Plan.
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(g) LIMITATION ON OPTION GRANTS. No Employee Optionee may be
granted options under Section 5 of the Plan in any calendar year with
respect to more than 50,000 Shares.
(h) ADDITIONAL RESTRICTIONS RELATING TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate fair market value (determined as of the
time the option is granted) of the Shares for which Incentive Stock
Options are exercisable for the first time by an individual during any
calendar year (under this Plan or any other plan of the Company or any of
its subsidiaries) exceeds $100,000 (or such other individual limit as may
be in effect under the Code on the date of grant), such options shall not
be Incentive Stock Options. No Incentive Stock Option shall be granted to
an employee who, at the time such option is granted, owns stock possessing
more than ten percent of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company within the
meaning of Section 422(b)(6) of the Code unless: (i) at the time the
option is granted, the option price is at least one hundred ten percent 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 granted.
Section 7. GRANTING OF OPTIONS TO DIRECTORS. On January 1, 1997 Non-
Qualified Stock Options to purchase that number of Shares equal to the
product of 1,000 and the number of years (determined by treating any
partial year as a whole year) then remaining in the term for which the
director has been elected, reelected or appointed shall be granted to each
director of the Company. Such options shall be expressly conditioned upon
the approval of the amendments to the Plan providing for the granting of
options to directors pursuant to this Section 7 and increasing the number
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of Shares which may be issued under options granted pursuant to the Plan
by the Company's stockholders at the next annual meeting of the Company's
stockholders, and such options shall not be effective if such amendments
are not so approved. On June 1, 1997 and on each June 1 thereafter Non-
Qualified Stock Options to purchase that number of Shares equal to the
product of 1,000 and the number of years (determined by treating any
partial year as a whole year) in the term for which the director has been
elected, reelected or appointed shall be granted to each director of the
Company who was elected, reelected or appointed to the board of directors
of the Company during the previous twelve months. Directors of the
Company who have been granted Non-Qualified Stock Options pursuant to this
Section 7 shall be referred to herein as "Director Optionees".
Section 8. TERMS AND CONDITIONS OF THE DIRECTOR OPTIONS.
Section 8.1 WRITTEN INSTRUMENT. Each option to purchase Shares
granted under Section 7 of the Plan shall be evidenced by a written option
agreement signed on behalf of the Company and the Director Optionee which
sets forth the name of the Director Optionee, the date granted, the option
price, the number of Shares subject to the option and the other terms and
conditions set forth below. Such option agreement shall incorporate by
reference all applicable terms, conditions and limitations set forth in
the Plan.
Section 8.2 TERMS AND CONDITIONS OF THE OPTIONS. In addition to any
other limitations, terms and conditions specified in the Plan, each option
granted under Section 7 of the Plan shall, as to each Director Optionee,
satisfy the following requirements:
(a) DATE OF GRANT. Options must be granted on or before
October 19, 2004.
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(b) EXPIRATION. Each option granted under Section 7 of the Plan
shall cease to be exercisable after the expiration of twenty years from
the date such option is granted.
(c) PRICE. The option price as to any Share subject to an
option granted under Section 7 of the Plan will be one hundred percent of
the fair market value of the Share on the date the option is granted. For
purposes of the Plan, the fair market value of a Share means:
(i) The mean between the high and the low prices at which the
Shares were traded if the Shares were then listed for trading
on a national or regional securities exchange or were then
traded on a bona fide over-the-counter market; or
(ii) If the Shares were not traded on an exchange or a bona fide
over-the-counter market, a value determined by an appraiser
selected by the Committee.
In the event that the date on which the fair market value of a Share is to
be determined is a date on which there is no trading of the Shares on a
national or regional securities exchange or on the over-the-counter
market, such fair market value shall be determined by referring to the
next preceding business day on which trading occurs.
(d) TRANSFERABILITY. Options granted under Section 7 of the
Plan may be transferred by the Director Optionee to (A) the spouse,
children or grandchildren of the Director Optionee ("Immediate Family"),
(B) a trust for the exclusive benefit of the Director Optionee or the
Director Optionee's Immediate Family, (C) a partnership in which the
Director Optionee or the Director Optionee's Immediate Family are the only
partners, or (D) to a former spouse of the Director Optionee pursuant to a
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domestic relations order within the meaning of Rule 16a-12 promulgated
under Section 16 of the Exchange Act; provided, however, that (X) there
may not be consideration for any such transfer, and (Y) once transferred
pursuant to the preceding provisions of this Section 8.2(d), no subsequent
transfer of any options shall be permitted except a transfer by will or
the laws of descent and distribution. Following transfer, the terms and
conditions of the Plan and the written option agreement relating to such
option shall continue to be applicable in all respects to the Director
Optionee making such transfer and each transferred option shall continue
to be subject to the same terms and conditions as were applicable
immediately prior to transfer as if such option had not been transferred,
including, but not limited to, the terms and conditions with respect to
the lapse and termination of such option. Neither the Company, the
Committee or any Director Optionee shall have any obligation to inform any
transferee of the termination or lapse of any option for any reason.
Notwithstanding any other provision of the Plan, following the termination
of a Director Optionee's membership on the board of directors of the
Company (including for this purpose membership as a director emeritus of
the Company) a transferred option shall be exercisable by the transferee
only to the extent, and for the periods specified in Section 8.2(e) as if
such option had not been transferred.
(e) BOARD MEMBERSHIP. No option granted under Section 7 of the
Plan shall be exercisable unless the Director Optionee shall have been a
member of the board of directors of the Company (including for this
purpose membership as a director emeritus of the Company) during the
period beginning on the date the option is granted and ending on a date
ninety days before the date of exercise (and subject to Section 12
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herein); provided, however, that in the event a Director Optionee dies
while a member of the board of directors of the Company (including for
this purpose membership as a director emeritus of the Company) or within
ninety days after such membership had terminated, the board membership
period requirement described above shall be deemed to have been satisfied.
(f) LIMITATION ON OPTION GRANTS. No Director Optionee may be
granted options in any calendar year with respect to more than 4,000
Shares.
Section 9. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 9.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares by delivery of an irrevocable 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 payment of
the option price (plus minimum required tax withholding for options held
by Employee Optionees). The date of exercise shall be the date such
written notice and payment have been delivered to the Secretary of the
Company either in person or by depositing said notice and payment in the
United States mail, postage prepaid and addressed to such officer at the
Company's home office. No option may be exercised with respect to a
fractional share of stock. Notwithstanding the fact that an option has
been transferred pursuant to Section 6.2(d)(ii), the Employee Optionee
granted such option shall remain liable for any required tax withholding.
Section 9.2 PAYMENT FOR SHARES. Payment of the option price (plus
minimum required tax withholding for options held by an Employee Optionee
may be made by (a) tendering cash (in the form of a check or otherwise) in
such amount, or (b) with the consent of the Committee, tendering Shares
with a fair market value on the date of exercise equal to such amount, or
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(c) 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. Notwithstanding the fact
that an option has been transferred pursuant to Section 6.2(d)(ii), the
Employee Optionee granted such option shall remain liable for any required
tax withholding.
Section 10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the
Company shall, after the Effective Date, change its common stock into a
greater or lesser number of shares through a stock dividend, stock split-
up or combination of shares, then
(i) the number of Shares then subject to the plan but which
are not then subject to any outstanding option;
(ii) the number of Shares subject to each then outstanding
option (to the extent not previously exercised); and
(iii)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. If any split-up or combination of shares shall involve a
change of par value, the Shares subject to options theretofore or
thereafter granted shall be the Shares as so changed.
If, after the Effective Date, there shall be any change in the stock
of the Company other than through a stock dividend, stock split-up or
combination of shares, or other change listed in Section 11 herein, then
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if (and only if) the Committee shall determine that such change equitably
requires an adjustment in the number or kind or option price of Shares
then subject to an option, or the number or kind of Shares 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.
Section 11. CHANGE IN CONTROL.
Section 11.1 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 the "Outstanding Corporation Common Stock")of
Wausau-Mosinee Paper Corporation(the "Corporation") 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
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paragraph (c) of this Section 15.1, (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 Securities by reason of
share purchases by the Corporation; or
(b) A change in the composition of the Board of Directors of the
Corporation (for purposes of this Section 11, 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 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,
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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%
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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 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
(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 11.1, 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
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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 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 11.1, 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 foregoing transfers or may
transfer securities of the Corporation (including any beneficiary or
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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 11.1, 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.
Section 11.2 EFFECTS OF CHANGE IN CONTROL.
(a) 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, with respect to each option held by such
Optionee on the Change in Control Date (the Optionee's "Election
Right"), to surrender such option for an immediate lump sum cash
payment in an amount equal to the product of (A) the number of
shares of common stock of the Corporation (for purposes of this
Section 11.2, "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 11.2, 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 11.1(c), the highest price per Share paid in such tender or
exchange offer
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or Corporate Transaction; provided, however, that in the case of
Incentive Stock Options, the Change in Control Price shall be in all
cases the fair market value of the Shares on the date such Incentive
Stock Option is exercised. 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) 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 Corporation
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
Corporation's home office on or before the 60th day following the Change
in Control Date.
(c) All payments due an Optionee pursuant to the provisions of this
Section 11.2 shall be made by the Corporation on or before the 5th
business day following the date on which the Optionee's election has been
delivered to the Corporation pursuant to Section 11.2(b).
(d) Notwithstanding any other provision of this Section 11.2, if the
grant or the exercise of an Optionee's Election Right or payment of cash
provided for in Section 11.2(b) would make a Change in Control transaction
ineligible for 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
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substitute for the cash payments to be made to the Optionee pursuant to
Section 11.2(a), Shares 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 12. TERMINATION OR LAPSE OF OPTIONS. Each option granted
under Section 5 of the Plan shall terminate or lapse upon the first to
occur of (a) the expiration date set forth in the applicable stock option
agreement, (b) the applicable date set forth in Section 6.2(b), (c) the
date of the Employee Optionee's voluntary resignation or termination for
cause, or (d) the date which is ninety days after the date of the Employee
Optionee's other termination of employment with the Company or any present
or future parent or subsidiary of the Company; provided, however, that in
the event of an Employee Optionee's death while in the employ of the
Company or a parent or subsidiary of the Company or, if the Employee
Optionee is no longer so employed, in the event of the Employee Optionee's
death within ninety days after such employment had terminated, an option
may be exercised, to the extent exercisable by the Employee Optionee
immediately prior to his death, in whole or in part by the Employee
Optionee's estate or designee by will, or, if applicable, the transferee
of such option pursuant to Section 6.2(d), but only if the date of
exercise is on or before the first to occur of (i) the expiration date set
forth in the applicable stock option agreement, (ii) the applicable date
set forth in Section 6.2(b), or (iii)(A) for options subject to the first
sentence of Section 6.2(e), the date which is twelve months after the date
of the Optionee's death, and (B) for options subject to the second
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sentence of Section 6.2(e), the second anniversary of the deceased
Optionee's Retirement Date.
Each option granted under Section 7 of the Plan shall terminate or
lapse upon the first to occur at (a) the expiration date set forth in the
applicable stock option agreement, (b) the applicable date set forth in
Section 8.2(b), or (c) the date which is ninety days after the date the
Director Optionee's membership on the board of directors of the Company
(including for this purpose membership as a director emeritus of the
Company) terminated; provided, however, that in the event of a Director
Optionee's death while a member of the board of directors of the Company
(including for this purpose membership as a director emeritus of the
Company) or, if the Director Optionee Is no longer a member, in the event
of the Director Optionee's death within ninety days after such membership
had terminated, an option may be exercised, to the extent exercisable by
the Director Optionee immediately prior to his death, in whole or in part
by the Director Optionee's estate or designee by will, or, if applicable,
the transferee of such option pursuant to Section 8.2(d) but only if the
date of exercise is on or before the first to occur of (i) the expiration
date set forth in the applicable stock option agreement, (ii) the
applicable date set forth in Section 8.2(b), or (iii) the date which is
twelve months after the date of the Director Optionee's death.
Section 13. AMENDMENT AND TERMINATION OF PLAN.
Section 13.1 AMENDMENT OF PLAN. The board of directors of the
Company may amend the Plan from time to time and at any time; provided,
however, that no amendment shall adversely affect any option which has
been granted prior to the amendment and no amendment with respect to the
maximum number of Shares which may be issued pursuant to options or the
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class of eligible individuals, or which materially increases benefits
accruing to Optionees under the Plan (within the meaning of Section 162(m)
of the Code) shall be effective unless approved by a majority of the
shares entitled to vote at a meeting of shareholders.
Section 13.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) October 19, 2004 or (b) the date specified by the
board of directors of the Company 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 14. EFFECTIVE DATE. The effective date of the Plan shall be
October 20, 1994, the date of approval by the board of directors of the
Company.
Section 15. INVESTMENT INTENT. Shares acquired pursuant to the
exercise of an option, if not registered by the Company under the
Securities Act of 1933 (the "Act"), will be "restricted" stock which will
not be freely transferable by the holder after exercise of the option.
Each Employee Optionee, Director Optionee and assignee in interest of an
Optionee accordingly represents, as a condition of participation in the
Plan, that Shares which are unregistered under the Act are being acquired
for the Employee Optionee's, or Director Optionee's (or his or her
assignee's) own account for investment only and not with a view to offer
for sale or for sale in connection with the distribution or transfer
thereof.
Section 16. AVAILABILITY OF INFORMATION. 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
provided for in Section 6.1 or 8.1 is executed by the Optionee and (b) a
copy of each subsequent annual report, on or about the same date as such
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report shall be made available to shareholders of the Company. 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, copies of all reports filed by the Company
with the Securities and Exchange Commission or the commissioner of
securities of any state, 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.
Section 17. CONDITIONS OF EMPLOYMENT. Participation in or
eligibility for participation in the Plan by an Employee Optionee shall
not confer upon any Employee Optionee the right to be continued as an
employee of the Company or any present or future parent or subsidiary of
the Company and the Company and its participating subsidiaries hereby
expressly reserve the right to terminate the employment of any employee,
with or without cause, regardless of the Plan and any options granted
pursuant to it.
Section 18. MISCELLANEOUS.
(a) The transfer of an Employee Optionee from the Company to a
parent or subsidiary of the Company or from a parent or subsidiary of the
Company to the Company or another parent or subsidiary of the Company
shall not be a termination of employment or an interruption of continuous
employment for the purpose of the Plan.
(b) As used in the Plan, the term "parent" and "subsidiary"
shall have the meanings ascribed to them in Sections 421, 422 and 424 of
the Code.
Section 19. GOVERNMENT APPROVALS. 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,
registered or qualified under any applicable law, or must be accompanied
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or preceded by a prospectus or similar circular meeting the requirements
of any applicable law, the Company will use reasonable efforts to obtain
such approval, to effect such registrations and qualifications, or to
provide such prospectus or similar circular within a reasonable time, but
exercise of the options or delivery by the Company of certificates for
Shares may be deferred until such approvals, registrations or
qualifications are effected, or until such prospectus or similar circular
is available.
Section 20. Notwithstanding any other provision of this Plan or of
any option agreement relating to any option granted hereunder, the
consummation of the transactions contemplated by that certain Agreement
and Plan of Merger, dated as of August 24, 1997, by and among Wausau Paper
Mills Company, WPM Holdings, Inc. and the Company on substantially the
terms and conditions set forth therein as of August 24, 1997 shall not be
deemed to constitute a "Change in Control" or any other transaction
described in Section 11(b) of this Plan and of any corresponding or
similar provision of any such option agreement. Without limiting the
generality of the foregoing, the consummation of such transactions shall
not result in the payment of any cash to any holder of an option granted
under this Plan.
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