Exhibit 10.11

INTEGRYS ENERGY GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
 

THIS AGREEMENT is entered into as of February 14, 2008 (the “Grant Date”), by
and between INTEGRYS ENERGY GROUP, INC. (the “Company”), and __________________
____________________ (the “Optionee”).  This Agreement sets forth the terms,
rights and obligations of the parties with respect to the grant of an option to
the Optionee.  This option shall not become effective until the Optionee signs
and returns the “Acknowledgement Form” attached hereto.
 
The option is granted under, and is subject to, the terms of the Integrys Energy
Group, Inc. 2007 Omnibus Incentive Compensation Plan (the “Plan”), which are
specifically incorporated by reference in this Agreement.  Any terms used in
this Agreement which are not defined shall have the meaning set forth in the
Plan.
 
The parties to this Agreement covenant and agree as follows:
 
1. Grant of Option.  Subject to the terms of this Agreement, the Company grants
to the Optionee the right and option (the “Option”) to purchase ______ shares of
Common Stock of the Company, par value $1.00 (the “Optioned Shares”) from the
Company, at an option price per share equal to $48.36 (the closing sales price
of a share of Common Stock of the Company as reported on the New York Stock
Exchange Composite Transaction reporting system on February 14, 2008).
 
In the event of certain corporate transactions described in Section 12 of the
Plan, the number of Optioned Shares and the per share option price will be
adjusted by the Compensation Committee of the Board of Directors of the Company
(the “Committee”).  The Committee’s determination as to any adjustment shall be
final.
 
2. Vesting of Option.  The Optioned Shares will vest in accordance with the
following schedule:
 
Percentage of Optioned Shares Vested                     Date of Vesting

25%                                                       1st anniversary of
Grant Date
An additional 25%                                2nd anniversary of Grant Date
An additional 25%                                3rd anniversary of Grant Date
The final 25%                                        4th anniversary of Grant
Date

provided, however, that, in the event of the Optionee’s termination of
employment from the Company and its Affiliates for any reason,  any Optioned
Shares not vested as of the date of such termination will be cancelled, except
as otherwise provided in this Section 2..
 
If the Optionee’s employment or service terminates as a result of death or
disability (as determined by the Committee based upon the definition set forth
in the Company’s
 
 
 

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long-term disability plan), (1) if the Optionee’s termination occurs on or after
December 31 of the calendar year in which occurs the Grant Date, the Optioned
Shares will become fully vested on the Optionee’s date of termination, or (2) if
the Optionee’s termination occurs prior to December 31 of the calendar year in
which occurs the Grant Date, the Optionee will become partially vested on the
date of termination, and the remaining Optioned Shares will be cancelled.  The
Optionee’s partially vested interest will be equal to the product obtained by
multiplying the total number of Optioned Shares by a fraction, the numerator of
which is the number of full months of service that the Participant completed
during the calendar year in which occurs the Grant Date and the denominator of
which is twelve (12).  If the foregoing calculation results in vesting of a
factional Optioned Share, the number of Optioned Shares that become vested will
be rounded to the next higher whole number of shares.

If the Optionee’s employment or service terminates as a result of retirement on
or after age fifty-five (55) with ten (10) or more years of service, or
retirement on or after age sixty-two (62) (“Retirement”), (1) if the Optionee’s
retirement occurs on or after December 31 of the calendar year in which occurs
the Grant Date, the Optioned Shares will continue to vest, subject to the terms
of the Plan, on the same schedule as would have applied had the Optionee
continued employment, and (2) if the Optionee’s retirement occurs prior to
December 31 of the calendar year in which occurs the Grant Date, a portion of
the Optioned Shares will be immediately forfeited, and the remainder of the
Optioned Shares will continue to vest, subject to the terms of the Plan, on the
same schedule as would have applied had the Optionee continued employment.  The
portion of the Optioned Shares that are immediately forfeited will be equal to
the product obtained by multiplying the total number of Optioned Shares by a
fraction, the numerator of which is twelve (12) minus the number of full months
of service that the Optionee completed during the calendar year in which occurs
the Grant Date and the denominator of which is twelve (12).  If the foregoing
calculation results in vesting of a factional Optioned Share, the number of
Optioned Shares that become vested will be rounded to the next higher whole
number of shares.  The number of Optioned Shares available for exercise on or
after each vesting date will be reduced by a pro rata portion of the total
number of forfeited Optioned Shares.

Notwithstanding the vesting schedule described above, the Committee may extend
the date(s) of vesting to a later date to take into account any period of the
Optionee’s leave of absence, unless prohibited by law.
 
3. Exercise of Option.  The Option, to the extent vested in accordance with
Paragraph 2, may be exercised during the period beginning on the vesting
date  and ending on the earlier of:
 
a.  
on the first anniversary of the date the Optionee’s employment with the Company
and its Affiliates terminates for any reason other than Retirement, death or
disability (as determined by the Committee based on the definition set forth  in
the Company’s long-term disability plan); or

 
b.  
in any other case, February 14, 2018.

 
 
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During the life of the Optionee, this Option may be exercised only by the
Optionee (or if the Optionee is incapacitated, by the Optionee’s legal
representative).  If the Optionee dies before exercising all of the vested
Option, the executor of the Optionee’s estate (or by such person as the executor
of the estate certifies as inheriting the Option as a result of the operation of
the Optionee’s last will and testament or as a result of the laws of interstate
succession) may exercise all or any portion of the vested Option that has not
been exercised, during the exercise periods described above.
 
4. Change in Control.  Upon the occurrence of a Change of Control (as defined in
the Plan), the Option, to the extent then outstanding and unexercised, will
become fully vested (if not previously vested) but shall otherwise be subject to
the terms of the Plan with respect to such Change in Control.
 
5. Manner of Exercise and Payment.  In order to exercise this Option, the
Optionee (or such other person entitled to exercise the Option as provided in
Paragraph 3) must provide a written notice to the Company stating that the
Optionee would like to exercise all or a portion of the Option and specifying
the number of vested Optioned Shares which are being purchased.  The exercise
notice must be delivered (in person or by mail or by facsimile) to the Secretary
of the Company.
 
The written notice must be, in the case of clauses (a), (b) and (c) below,
accompanied by payment equal to the number of Optioned Shares being purchased
multiplied by the option price or, in the case of clause (d) below, accompanied
by the documents specified in such clause (d), which will result in payment to
the Company on the settlement date (i.e., T+3) equal to the number of Optioned
Shares being purchased multiplied by the option price.  Subject to such rules
and restrictions as the Committee may prescribe, payment may be made, at the
Optionee’s election:  (a) in cash or by certified check payable to the Company;
(b) by delivering previously acquired shares of Common Stock, duly endorsed in
blank or accompanied by stock powers duly endorsed in blank, with a fair market
value at the time of exercise, as determined by the Committee, equal to the
required payment amount; (c) by any combination of (a) and (b); or (d) by
delivering to the Company or its designated agent an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to sell
or margin a sufficient portion of the Optioned Shares to be exercised and to
deliver the sale or margin proceeds directly to the Company to pay the option
price.
 
Option exercise notices postmarked (if mailed) or received by the Secretary of
the Company (if by facsimile or hand-delivery) prior to 11:59 p.m. (central
time) of the date specified in Paragraph 3 shall be given effect.  Any notice
postmarked or received after such time shall be null and void.
 
6. Tax Withholding.  Upon exercise of all or any part of the Option, the Company
may satisfy its withholding obligations in any manner determined by the
Committee, including by withholding a portion of the Optionee’s compensation or,
in the case of a “cashless” exercise, by withholding a number of the Optioned
Shares being purchased that have a fair market value, as determined by the
Committee, equal to the amount required to be withheld.  The fair market
 
 
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value of fractional shares of Stock remaining after the withholding requirements
are satisfied will be paid to the Optionee in cash.  The Company may also
require the Optionee to deliver a check for the Company’s withholding tax
obligation prior to effecting the exercise of the option or delivering the
shares issuable upon exercise.
 
7. Miscellaneous.
 
(a) The Optionee (or his legal representative) shall not be deemed to be a
shareholder of the Company with respect to any of the Optioned Shares being
purchased until such shares are paid for in full, and the Company’s withholding
tax liability is satisfied, to the Committee’s satisfaction.
 
(b) The Option shall not be transferable by the Optionee; provided that,
following the Optionee’s death,  the Option, to the extent exercisable in
accordance with the terms of the Plan and this Agreement, may be exercised by
the executor of the Optionee’s estate (or by such person as the executor of the
estate certifies as inheriting the Option as a result of the operation of the
Optionee’s last will and testament or as a result of the laws of intestate
succession).
 
(c) It is fully understood that nothing contained in this Agreement or the Plan
shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate the Optionee’s employment at any time nor confer upon the
Optionee any right to continue in the employ of the Company or any Affiliate.
 
(d) As a condition of the granting of this Option, the Optionee agrees, for
himself, his legal representatives, the executor of his estate, and his heirs,
that the Plan and this Agreement shall be subject to discretionary
interpretation by the Committee and that any interpretation by the Committee of
the terms of the Plan and this Agreement shall be final, binding and conclusive
on the Optionee, his legal representatives, the executor of his estate and his
heirs.  The Optionee, his legal representatives, the executor of his estate and
his heirs shall not challenge or dispute the Committee’s decisions.
 
(e) The Committee may modify this Option at any time.  However, no modification,
extension or renewal shall (i) confer on the Optionee any right or benefit which
he would not be entitled to if a new option was granted under the Plan at such
time or (ii) alter, impair or adversely affect this Option or the Agreement
without the written consent of the Optionee; provided that the Committee need
not obtain written consent of the Optionee for a modification of the Option to
the extent that the Plan specifically permits the Committee action or to the
extent that the Committee deems such modification necessary to comply with any
applicable law, the listing requirements of any principal securities exchange or
market on which the shares underlying the Option are then traded, or to preserve
favorable accounting or tax treatment of the Option for the Company.
 
(f) No individual may exercise the Option and no shares will be issued under
this Agreement unless and until the Company has determined to its satisfaction
that such
 
 
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exercise and issuance comply with all relevant provisions of applicable law,
including the requirements of any stock exchange on which the shares may then be
traded.
 
8. Governing Law.  This Agreement shall be governed by the internal laws of the
State of Illinois, without regard to the principle of conflict of laws, as to
all matters, including, but not limited to, matters of validity, construction,
effect, performance and remedies.  No legal action or proceeding may be brought
with respect to this Agreement more than one year after the later of (a) the
last date on which the act or omission giving rise to the legal action or
proceeding occurred; or (b) the date on which the individual bringing such legal
action or proceeding had knowledge (or reasonably should have had knowledge) of
such act or omission.  Any such action or proceeding must be commenced and
prosecuted in its entirety in the federal or state court having jurisdiction
over Brown County, Wisconsin or Cook County, Illinois, and each individual with
any interest hereunder agrees to submit to the personal jurisdiction thereof,
and agrees not to raise the objection that such courts are not a convenient
forum.  Such action or other legal proceeding shall be heard pursuant to a bench
trial and, the parties to such proceeding shall waive their rights to a trial by
jury.
 
9. Severability.  In the event any provision of the Agreement is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining provisions of the Agreement, and the Agreement shall be construed and
enforced as if the illegal or invalid provision had not been included.
 
10. Terms of Plan Govern.  All parties acknowledge that this option is granted
under and pursuant to the Plan, which shall govern all rights, interests,
obligations and undertakings of both the Company and the Participant.
 
INTEGRYS ENERGY GROUP, INC.

By:   ___________________________________                                                                   
Title:  Senior VP & Chief HR Officer

 
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ACKNOWLEDGEMENT FORM

I have read the terms of the Integrys Energy group, Inc. Nonqualified Stock
Option Agreement, dated February 14, 2008, and I hereby declare that I
understand and agree to be bound by the terms and conditions of the Agreement.

_____________________________________________
Optionee

Print name:____________________________________

PLEASE DETACH THIS ACKNOWLEDGEMENT FORM FROM THE OPTION AGREEMENT AND RETURN IT
TO THE GREEN BAY HUMAN RESOURCES DEPARTMENT.  YOUR OPTION WILL NOT BECOME
EFFECTIVE UNTIL THE COMPANY RECEIVES THIS ACKNOWLEDGMENT FORM.

 
 

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