EXHIBIT 10(h)
WAUSAU PAPER MILLS COMPANY
1991 EMPLOYEE STOCK OPTION PLAN
Wausau Paper Mills Company, a Wisconsin corporation (the "Company"),
hereby adopts the Wausau Paper Mills Company 1991 Employee Stock Option
Plan (the "Plan"), as set forth herein.
Section 1. PURPOSE. The Plan has been adopted for the purpose of
recognizing and rewarding the job performance of key employees of the
Company and to enable the Company to attract and retain superior
management-level employees by increasing the personal interest of all such
employees in the growth and success of the Company. It is the express
intent of the Company that, subject to Section 6(g) 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.
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 250,000.
Section 3. ADMINISTRATION OF THE PLAN.
Section 3.1 GENERAL. The Plan shall be administered by a committee
(the "Committee") consisting of at least two members designated by the
Board of Directors of the Company from among those of its members who are
not officers or employees of the Company or a parent or subsidiary of the
Company 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"). 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 employees on such
terms, which need not be the same as to all 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.
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.
Section 4.1 DEFINITION OF ELIGIBLE EMPLOYEES. Subject to the
limitations of Section 4.2, key employees of the Company and its
subsidiary corporations shall be eligible to participate in 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 LIMITATIONS ON ELIGIBILITY. No person who is serving as
a member of the Committee shall be eligible to receive an option;
provided, however, that options outstanding prior to an Optionee's
becoming a member of the Committee shall remain in effect.
Section 5. GRANTING OF OPTIONS. Subject to the limitations of
Section 4.2, 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
"Optionees."
Section 6. TERMS AND CONDITIONS OF THE OPTIONS.
Section 6.1 WRITTEN INSTRUMENT. Each option to purchase Shares
granted under the Plan shall be evidenced by a written option agreement
signed on behalf of the Company and the optionee which sets forth the name
of the 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 terms, conditions and limitations set forth
in the Plan.
Section 6.2 TERMS AND CONDITIONS OF THE OPTIONS. In addition to any
other limitations, terms and conditions specified in the Plan, each option
granted hereunder shall, as to each Optionee, satisfy the following
requirements:
(a) DATE OF GRANT. Options must be granted on or before June
18, 2001.
(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 an
Incentive Stock Option will be not less than one hundred percent of
the fair market value of the Share on the date the option is granted.
The option price as to any Share subject to a Non-Qualified Stock
Option will be not less than fifty 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 the Optionee
otherwise 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.
(ii) The Committee may, in its discretion, authorize all or a portion
of any options to be granted to an Optionee or which were granted
to any Optionee on or before December 16, 1996 to permit transfer
by the Optionee to (A) the spouse, children or grandchildren of
the Optionee ("Immediate Family"), (B) a trust for the exclusive
benefit of the Optionee or the Optionee's Immediate Family, (C) a
partnership in which the Optionee or the Optionee's Immediate
Family are the only partners, or (D) to a former spouse of the
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 be not
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 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 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. For purposes of Section 7, the
transferee of an option shall be deemed an "Optionee". Neither
the Company, the Committee or any 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 Optionee, a transferred Non-Qualified 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 Non-Qualified Stock Option
granted prior to November 1, 1996 may be transferred until such
option has been held by the Optionee for a period of not less
than six months after the date on which such option was granted.
(e) EMPLOYMENT. No option shall be exercisable unless the
Optionee shall have been employed by the Company (or any present or
future parent or 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; 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.
(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 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.
(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 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. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares 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 payment of the option price (plus required
tax withholding). 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 pre-paid and addressed to such officer at the
Company's home office. Notwithstanding the fact that an option has been
transferred pursuant to Section 6.2(d)(ii), the grantee of such option
shall remain liable for any required tax withholding.
Section 7.2 PAYMENT FOR SHARES. Payment of the option price (plus
required tax withholding) may be made by (a) tendering cash (in the form
of a check or otherwise) in such amount, or (b) tendering Shares with a
fair market value on the date of exercise equal to such amount, or (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 grantee of
such option shall remain liable for any required tax withholding.
Section 8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If any option
is exercised in whole or in part subsequent to any stock dividend, stock
split, recapitalization, reorganization, merger or other change in the
corporate structure of the Company as a result of which (a) shares of any
class or classes of the Company shall be issued in respect of the Shares
or (b) the Shares shall be changed into the same or a different number of
shares of the same or another class or classes of the Company or another
corporation, the Optionee so exercising the option shall receive, for the
aggregate option price payable upon such exercise, the aggregate number
and class or classes of shares equal to the number and class or classes of
shares such Optionee would have had on the date of actual exercise if the
Optionee had purchased on the date the option was granted the Shares as to
which the option is so exercised and the Shares so purchased had not been
disposed of as of the date of such actual exercise, taking into
consideration such stock dividend, stock split, recapitalization,
reorganization, merger or other change in the corporate structure of the
Company.
Section 9. 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 Stock Option Agreement, (b) the applicable date
set forth in Section 6.2(b), or (c) the date which is ninety days after
the date on which the Optionee's employment with the Company or any
present or future parent or subsidiary of the Company terminated;
provided, however, that in the event of an Optionee's death while in the
employ of the Company or a parent or subsidiary of the Company or, if the
Optionee is no longer so employed, in the event of the Optionee's death
within ninety days after such employment had terminated, an option may be
exercised, to the extent exercisable by the Optionee immediately prior to
his death, in whole or in part by the Optionee's estate or his designee by
will, or, if applicable, the transferee of such option pursuant to Section
6.2(d)(ii), 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)
the date which is twelve months after the date of the Optionee's death.
Section 10. AMENDMENT AND TERMINATION OF PLAN.
Section 10.1 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
class of eligible employees, 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 10.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) June 18, 2001 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 11. EFFECTIVE DATE. The Effective Date of the Plan shall be
June 19, 1991, the date of approval by the Board of Directors of the
Company; provided, however, that neither the Plan nor grants made under
the Plan shall be effective unless the adoption of the Plan is approved at
the annual meeting of the Company's shareholders next following such date
by the majority of the shares entitled to vote at such meeting.
Section 12. 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 participating employee and assignee in interest of the employee
accordingly represents, as a condition of participation in the Plan, that
Shares which are unregistered under the Act are being acquired for the
Optionee's (or his 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 13. 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 is executed by the Optionee and (b) a copy of
each subsequent annual report, on or about the same date as such 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 14. CONDITIONS OF EMPLOYMENT. 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 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, as if the
Plan and any options granted pursuant to it were not in effect.
IN WITNESS WHEREOF, the Company has caused the Plan, as amended
December 16, 1996, to be executed by its duly authorized officers as of
the 16th day of December, 1996.
WAUSAU PAPER MILLS COMPANY
By: DANIEL D. KING
Daniel D. King, President
and Chief Executive Officer
ATTEST:
By: STEVEN A. SCHMIDT
Steven A. Schmidt,
Vice President, Finance,
Secretary and Treasurer