MOSINEE PAPER CORPORATION
1988 STOCK APPRECIATION RIGHTS PLAN
As amended March 4, 1999
MOSINEE PAPER CORPORATION
1988 STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE.
The purpose of the Mosinee Paper Corporation 1988 Stock
Appreciation Rights Plan (the "Plan") is to attract and retain
outstanding individuals as officers and key employees of Mosinee Paper
Corporation (the "Corporation") and its subsidiaries, and to furnish
incentives to such individuals through rewards based upon the
performance of the common stock of the Corporation. To this end,
the Committee hereinafter designated may grant stock appreciation
rights to officers and other key employees of the Corporation and its
subsidiaries, on the terms and subject to the conditions set forth in
this Plan.
2. PARTICIPANTS.
Participants in the Plan shall consist of such officers and
other key employees of the Corporation and its subsidiaries as the
Committee in its sole discretion may select from time to time to
receive stock appreciation rights.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a Committee (the
"Committee") of at least three members appointed by the Board of
Directors of the Corporation from among its members. No person shall
be appointed a member of the Committee if, during the one year prior to
the date on which such person's service as a member of the Committee is
to commence, such person was granted or awarded equity securities of
the Corporation (within the meaning of Securities and Exchange
Commission Rule 16a-1(d)) under the Plan or any other plan of the
Corporation or any subsidiary of the Corporation. Subject to the
provisions of the Plan, the Committee shall
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have authority (i) to determine which employees of the Corporation and
its subsidiaries shall be eligible for participation in the Plan; (ii)
to select employees to receive grants under the Plan; (iii) to
determine the number of stock appreciation rights subject to the grant,
the time and conditions of exercise or vesting, the fair market value
of the common stock of the Corporation for purposes of the Plan, and
all other terms and conditions of any grant; and (iv) to prescribe the
form of agreement, certificate or other instrument evidencing the
grant. The Committee shall also have authority to interpret the Plan
and to establish, amend and rescind rules and regulations for the
administration of the Plan, and all such interpretations, rules and
regulations shall be conclusive and binding on all persons, provided,
however, that the Committee shall not exercise such authority in a
manner adversely and significantly affecting rights previously granted
unless the action taken is required to comply with any applicable law
or regulation.
4. EFFECTIVE DATE AND TERM OF PLAN.
The Plan shall become effective on June 16, 1988, the date of
its approval by the Board of Directors of the Corporation. The Plan
shall terminate ten years after it becomes effective, unless terminated
sooner by action of the Board of Directors. No further grants may be
made under the Plan after its termination, but the termination of the
Plan shall not affect the rights of any participant under, or the
authority of the Committee with respect to, any grants made prior to
termination.
5. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in paragraph 7 hereof, the
aggregate number of shares of common stock of the Corporation with
respect to which stock appreciation rights may be granted under the
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Plan shall not exceed 350,000. Whenever a stock appreciation right
granted under the Plan can no longer under any circumstances be
exercised, the shares, if any, then remaining subject to such stock
appreciation right shall thereupon be released from such stock
appreciation right and shall thereafter be available for additional
grants of stock appreciation rights under the Plan.
6. STOCK APPRECIATION RIGHTS.
(a) GRANTS. Stock appreciation rights entitling the grantee
to receive cash equal to the sum of (i) the appreciation in value of
and (ii) the value of the reinvested cash dividends which would have
been paid with respect to a stated number of shares of common stock of
the Corporation between the date of grant and the date of exercise (the
"hypothetical reinvested cash dividends") may be granted from time to
time to such officers and other key employees of the Corporation and
its subsidiaries as may be selected by the Committee.
(b) TERMS OF GRANT. Stock appreciation rights shall be
exercisable in whole or in such installments and at such times as may
be determined by the Committee, provided that no stock appreciation
right shall be exercisable more than twenty years after the date of
grant. The Committee may at the time of grant or at any time
thereafter impose such additional terms and conditions on the exercise
of stock appreciation rights as it deems necessary or desirable for
compliance with Section 16(a) or 16(b) of the Securities Exchange Act
of 1934 and the rules and regulations thereunder.
(c) TERMINATION OF EMPLOYMENT OR DEATH. If a grantee ceases
to be employed by the Corporation and any of its subsidiaries for any
reason other than death or attaining his Retirement Date, any stock
appreciation right held by such grantee may be exercised for a period
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ending on thee arlier of the 90th day following the date of such
cessation of employment or the date of expiration of such stock
appreciation right, but only with respect to that number of shares of
common stock for which such right was exercisable immediately prior to
the date of cessation of employment.
If a grantee ceases to be employed by the Corporation or any of
its subsidiaries by reason of death prior to his Retirement Date, or
dies within 90 days after termination of his employment by the
Corporation or any of its subsidiaries prior to his having attained
his Retirement Date, any stock appreciation right held by such grantee
may be exercised, with respect to all or any part of the common stock
of the Corporation with respect to which such stock appreciation right
was exercisable by the grantee immediately prior to his death, for a
period ending on the first anniversary of the date of such grantee's
death.
If a grantee attains his Retirement Date, any stock appreciation
right held by such grantee may be exercised for a period ending on the
second anniversary of such Retirement Date, but only with respect to
that number of shares of common stock for which such right was
exercisable immediately prior to the date of cessation of employment.
Notwithstanding any other provision of this Section 6(c), no stock
appreciation right shall be exercisable after the first to occur of (1)
the date specified in Section 6(b) or (2) the date specified by the
Committee in the grant evidencing such rights.
For purposes of this Plan, the term "Retirement Date" shall mean
the date on which the grantee's employment with the Corporation (and
any parent or subsidiary of the Corporation) terminates (including
termination because of death) if the Optionee had then attained age 55
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and completed ten calendar years of service with the Corporation (or
any parent or subsidiary of the Corporation).
(d) PAYMENT ON EXERCISE. Upon exercise of a stock
appreciation right the grantee shall be paid within five business days
an amount in cash equal to the sum of (i) the amount by which the fair
market value of one share of the Corporation's common stock on the date
of exercise exceeds the date of grant value thereof multiplied by the
number of shares in respect of which the stock appreciation right is
being exercised and (ii) the value of the hypothetical reinvested cash
dividends associated therewith. The value of the hypothetical
reinvested cash dividends associated with a share in respect of which
the stock appreciation right is being exercised (the "exercised share")
shall be equal to the fair market value on the date of exercise of the
number of additional shares (or fraction thereof) of the Corporation's
common stock the grantee would have owned if it is assumed (1) that
cash dividends which would have been paid with respect to the exercised
share if the exercised share had been outstanding from the time of
grant had been paid in cash to the grantee and then immediately
reinvested by the grantee in the Corporation's common stock at the fair
market value thereof on the applicable dividend payment date, and (2)
that, once assumed issued, hypothetical shares resulting from assumed
dividend reinvestment themselves paid cash dividends (at the same time
and in the same amount as shares of the Corporation's outstanding
common stock) which were reinvested in a similar manner.
For purposes of this paragraph, the fair market value of a
share of common stock of the Corporation means:
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(A) The mean between the high and low prices at which
the common stock of the Corporation was traded if the common stock
of the Corporation was then listed for trading on a national or regional
securities exchange; or
(B) The mean between the published high and low prices
of the common stock of the Corporation if the common stock of the
Corporation was then traded on a bona fide over-the-counter market;
or (C) If the common stock of the Corporation was not traded
on an exchange or on a bona fide over-the-counter market, a value
determined by an appraiser selected by the Committee.
In the event that the date of the exercise of a stock appreciation
right is a date on which there is no trading of the common stock of the
Corporation on a national or regional securities exchange or is a date
for which there is no published bid and asked prices if the stock is
traded 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 or on which published prices are available.
(e) ADDITIONAL TERMS AND CONDITIONS. The agreement or
instrument evidencing the grant of stock appreciation rights may
contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Committee in its sole
discretion.
7. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION, ETC.
Stock appreciation rights shall be subject to adjustment by
the Committee in its sole discretion as to the number, kind and date
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of grant value of shares or other consideration subject to such
grants in the event of changes in the outstanding common stock by
reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or
other relevant changes in corporate structure or capitalization
occurring after the date of the grant of any stock appreciation right,
provided that if the Corporation shall change its common stock into a
greater or lesser number of shares through a stock dividend, stock
split-up, or combination of shares, outstanding rights shall be
adjusted proportionately, consistent with existing law and regulation,
to prevent inequitable results.
8. EFFECT OF LIQUIDATION, MERGER, CONSOLIDATION OR OTHER EVENTS.
Nothing contained in the Plan or in any stock appreciation
right granted under the Plan shall in any way prohibit the Corporation
from merging with or consolidating into another corporation, or from
selling or transferring all or substantially all of its assets, or from
distributing all or substantially all of its assets to its stockholders
in liquidation, or from dissolving and terminating its corporate
existence; and in any such event, all outstanding stock appreciation
rights granted under the Plan shall be deemed to have been exercised at
the time of any such merger, consolidation, sale or transfer of assets,
liquidation, or dissolution, except to the extent that any agreement or
undertaking of any party to such merger, consolidation, or sale or
transfer of assets, or any plan pursuant to which such liquidation or
dissolution is effected, shall make specific provision to continue such
stock appreciation rights and the rights of such person or persons
entitled to exercise such stock appreciation rights.
9. AMENDMENT AND TERMINATION OF PLAN.
The Plan may be amended or terminated by the Board of
Directors of the Corporation in any respect, provided, however, that
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the Board shall not exercise such authority in a manner adversely and
significantly affecting rights previously granted unless the action
taken is required to comply with any applicable law or regulation.
10. MISCELLANEOUS.
(a) NO RIGHT TO A GRANT. Neither the adoption of the Plan
nor any action of the Board of Directors or of the Committee shall be
deemed to give any employee any right to be selected as a participant
or to be granted a stock appreciation right.
(b) RIGHTS AS STOCKHOLDER. No person shall have any rights
as a stockholder of the Corporation with respect to any shares covered
by a stock appreciation right.
(c) EMPLOYMENT. Nothing contained in this Plan shall be
deemed to confer upon any employee any right of continued employment
with the Corporation or any of its subsidiaries or to limit or
diminish in any way the right of the Corporation or any such subsidiary
to terminate his or her employment at any time with or without cause.
(d) TAXES. The Corporation shall be entitled to deduct from
any payment under the Plan the amount of any tax required by law to be
withheld with respect to such payment or may require any participant to
pay such amount to the Corporation prior to and as a condition of
making such payment.
(e) NONTRANSFERABILITY. No stock appreciation right shall be
transferable except by will or the laws of descent and distribution.
During the holder's lifetime, stock appreciation rights shall be
exercisable only by such holder.
11. CHANGE IN CONTROL.
(a) Definition of "Change in Control." For purposes of the
Plan, a "Change in Control" means the happening of any of the following
events:
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(i) 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 (A) the then outstanding shares of common stock (the
"Outstanding Company Common Stock") of Wausau-Mosinee Paper
Corporation (the "Company") or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (1) any
acquisition directly from the Company 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
Company, (2) any acquisition by the Company, (3) any acquisition by
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the Company,
(4) any acquisition pursuant to a transaction which complies with
clauses (A), (B), and (C) of paragraph (iii) of this Section 11(a),
(5) except as provided in paragraphs (iv) and (v), any acquisition
by any of the Woodson Entities or any of the Smith Entities, or (6)
any increase in the proportionate number of shares of Outstanding
Company Common Stock or Outstanding Company 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 Company Common Stock or
Outstanding Company Voting Securities by the Company; provided,
however, that this clause (6) shall not apply to any acquisition of
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Outstanding Company Common Stock or Outstanding Company Voting
Securities not described in clauses (1), (2), (3), (4), or (5) of
this paragraph (i) by the Person acquiring such shares which occurs
after such Person had become the beneficial owner of 20% or more of
either the Outstanding Company Common Stock or Outstanding Company
Voting Securities by reason of share purchases by the Company; or
(ii) A change in the composition of the Board of Directors of
the Company (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 Company'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
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(iii) Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially
all of the assets of the Company or the acquisition of the assets
or securities of any other entity (a "Corporate Transaction");
excluding, however, such a Corporate Transaction pursuant to which
(A) all or substantially all of the individuals and entities who
are the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company 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 Company or all or substantially all of the Company'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 Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no
Person (other than the Company, any employee benefit plan (or
related trust) of the Company, any Woodson Entity, any Smith
Entity, or such Resulting Corporation) will beneficially own,
directly or indirectly, 20% or more of,
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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
Company prior to the Corporate Transaction, and (C) 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
(iv) The Woodson Entities acquire beneficial ownership of more
than 35% of the Outstanding Company Common Stock or Outstanding
Company 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
(v) The Smith Entities acquire beneficial ownership of more
than 35% of the Outstanding Company Common Stock or Outstanding
Company 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
(vi) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
For purposes of this Section 11(a), 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 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 Company (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(a), 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
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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 Company (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).
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For purposes of this Section 11(a), 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.
(b) Effects of Change in Control.
(i) In the event of a Change in Control,
(A) all stock appreciation rights ("SARs") 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
(B) each grantee may elect, with respect to each SAR held by
such grantee on the Change in Control Date (the grantee's "Election
Right"), to surrender such SAR for an immediate lump sum cash
payment in an amount equal to the product of (1) the number of
shares of common stock of the Company ("Shares") then subject to
the SAR as to which the election is being exercised, multiplied by
(2) the excess, if any, of (a) the greater of (i) the Change in
Control Price or (ii) the highest Fair Market Value of a Share on
any day in the 60-day period ending on the Change in Control Date,
over (b) the date of grant value of such SAR. Upon exercise of a
grantee's Election Right,the value of all hypothetical reinvested
cash dividends associated with such SAR shall also be determined by
the greater of (i) theChange in Control Price or (ii) the highest
Fair Market Value of a Share on any day in the 60-day period ending
on the Change in Control Date. For purposes of this Section
11(b), 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
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11(a)(iii), the highest price per Share paid in such tender or
exchange offer or Corporate Transaction. 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.
(ii) The exercise of an Election Right must be in writing,
specify the SAR or SARs 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.
(iii) All payments due an grantee pursuant to the provisions
of this Section 11(b) shall be made by the Company on or before the
first to occur of (A) the date provided in this Plan for payment
upon exercise of an SAR and (B) the 5th business day following the
date on which the grantee's election has been delivered to the
Company pursuant to Section 11(b)(ii).
(iv) Notwithstanding any other provision of this Section
11(b), if the grant or the exercise of a grantee's Election Right
or payment of cash provided for in this Section 11(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, would otherwise be
eligible for such pooling-of-interests accounting treatment, the
Committee shall have
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the right and authority to modify, eliminate, or terminate the
Election Right to the extent necessary to preserve such pooling-of-
interests accounting treatment.
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