Exhibit 10.4

 
INTEGRYS ENERGY GROUP, INC.
2010 OMNIBUS INCENTIVE COMPENSATION PLAN
RESTRICTED STOCK UNIT AWARD

[Name]

You have been granted a Restricted Stock Unit (“RSU”) award with respect to
shares of common stock of Integrys Energy Group, Inc. (the “Company”) under the
Integrys Energy Group, Inc. 2010 Omnibus Incentive Compensation Plan (the
“Plan”) with the following terms and conditions.  The common stock of the
Company is referred to in this Agreement as the Common Stock.  Your award will
not become effective until you sign and return this Restricted Stock Unit Award
Agreement to Human Resources.
 
Grant Date:
 
_______, 2011
 
Number of Restricted
Stock Units:
 
_______ Stock Units
 
Vesting Schedule:
Twenty-five percent (25%) of your RSUs will vest on each of the first four
anniversaries of the Grant Date (each, a “Vesting Date”), provided that you are
continuously employed by the Company or an Affiliate from the Grant Date through
such Vesting Date, as shown on  the following schedule:       Amount Vesting
Date  
25% of the RSUs
First anniversary of Grant Date
 
25% of the RSUs
Second anniversary of Grant Date
  25% of the RSUs
Third anniversary of Grant Date
  25% of the RSUs
Fourth anniversary of Grant Date
         If application of the vesting schedule on any Vesting Date would result
in vesting of a fractional RSU, the number of RSUs that become vested on that
Vesting Date will be rounded to the next higher whole number of RSUs.      
 [Standard Paragraph #1 – For use with regular grants made in February or March
of each year.] If your employment or service terminates prior to a Vesting Date
as a result of death or you become disabled (as determined by the Committee
based upon the definition set forth in the Company’s long term disability plan
and provided that you are also disabled based o the definition set forth

 

 
 

--------------------------------------------------------------------------------

 

 

  in Internal Revenue Code Section 409A), (1) if your termination or disability
occurs on or after December 31 of the calendar year in which occurs the Grant
Date, the RSUs will become fully vested on your date of termination or
disability, and (2) if your termination or disability occurs prior December 31
of the calendar year in which occurs the Grant Date, you will become partially
vested on your date of termination or disability, and the remaining RSUs will be
forfeited.  Your partially vested interest will be equal to the product obtained
by multiplying the total number of your RSUs by a fraction, the numerator of
which is the number of full months of service that you have 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 fractional
RSU, the number of RSUs that become vested will be rounded to the next higher
whole number of RSUs.

[Alternate Paragraph #1 – For use in mid-year special grants where proration
based on the calendar year might result in substantial vesting shortly following
the Grant Date.  Under the alternate paragraph, proration is based on the number
of months of employment completed during the one year period from the first day
of the month in which occurs the Grant Date.] If your employment or service
terminates prior to a Vesting Date as a result of death or you become disabled
(as determined by the Committee based upon the definition set forth in the
Company’s long term disability plan and provided that you are also disabled
based o the definition set forth in Internal Revenue Code Section 409A), (1) if
your termination or disability occurs on or after the first day of the twelfth
(12th) month following the month in which occurs the Grant Date, the RSUs will
become fully vested on your date of termination or disability, and (2) if your
termination or disability occurs prior to the first day of the twelfth (12th)
month following the month in which occurs the Grant Date, you will become
partially vested on your date of termination or disability, and the remaining
RSUs will be forfeited.  Your partially vested interest will be equal to the
product obtained by multiplying the total number of your RSUs by a fraction, the
numerator of which is the number of full months of service that you have
completed during the twelve (12) month period that begins on the first day of
the month in which occurs the Grant Date, and the denominator of which is twelve
(12).  If the foregoing calculation results in vesting of a fractional RSU, the
number of RSUs that become vested will be rounded to the next higher whole
number of RSUs.

[Standard Paragraph #2 – For use with regular grants made in

 
 
2

--------------------------------------------------------------------------------

 
 
 

 
February or March of each year.] If your employment or service terminates prior
to a Vesting Date 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 your Retirement occurs on or after December 31 of the
calendar year in which occurs the Grant Date, your RSUs will continue to vest,
subject to the terms of the Plan, on the same schedule as would have applied had
you continued your employment, and (2) if your Retirement occurs prior to
December 31 of the calendar year in which occurs the Grant Date, a portion of
your RSUs will be immediately forfeited, and the remainder of your RSUs will
continue to vest,  subject to the terms of the Plan, on the same schedule as
would have applied had you continued your employment; provided that under both
clause (1) and (2), any RSUs that have not been forfeited will be immediately
vested if you die after Retirement but prior to the scheduled Vesting Date or if
you become entitled to settlement of your vested RSUs as a result of termination
of your employment or service by reason of Retirement within two (2) years
following the occurrence of a “change in control event” within the meaning of
Internal Revenue Code Section 409A.  The portion of your RSUs that are
immediately forfeited will be equal to the product obtained by multiplying the
total number of your RSUs by a fraction, the numerator of which is twelve (12)
minus the number of full months of service that you have 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 forfeiture of a fractional
RSU, the number of RSUs that are forfeited will be rounded down to the next
lower  whole number of RSUs.  The number of RSUs available on each Vesting Date
will be reduced by a pro rata portion of the total number of forfeited RSUs.

[Alternate Paragraph #2 – For use in mid-year special grants where proration
based on the calendar year might result in substantial vesting shortly following
the Grant Date.  Under the alternate paragraph, proration is based on the number
of months of employment completed during the one year period from the first day
of the month in which occurs the Grant Date.] If your employment or service
terminates prior to a Vesting Date 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 your Retirement occurs on or
after the first day of the twelfth (12th) month following the month in which
occurs the Grant Date, your RSUs will continue to vest, subject to the terms of
the Plan, on the same schedule as would

 

 
3

--------------------------------------------------------------------------------

 

 

 
have applied had you continued your employment, and (2) if your Retirement
occurs prior to the first day of the twelfth (12th) month following the month in
which occurs the Grant Date, a portion of your RSUs will be immediately
forfeited, and the remainder of your RSUs will continue to vest,  subject to the
terms of the Plan, on the same schedule as would have applied had you continued
your employment; provided that under both clause (1) and (2), any RSUs that have
not been forfeited will be immediately vested if you die after Retirement but
prior to the scheduled Vesting Date or if you become entitled to settlement of
your vested RSUs as a result of termination of your employment or service by
reason of Retirement within two (2) years following the occurrence of a “change
in control event” within the meaning of Internal Revenue Code Section 409A.  The
portion of your RSUs that are immediately forfeited will be equal to the product
obtained by multiplying the total number of your RSUs by a fraction, the
numerator of which is twelve (12) minus the number of full months of service
that you have completed during the twelve (12) month period that begins on the
first day of the month in which occurs the Grant Date, and the denominator of
which is twelve (12).  If the foregoing calculation results in forfeiture of a
fractional RSU, the number of RSUs that are forfeited will be rounded down to
the next lower  whole number of RSUs.  The number of RSUs available on each
Vesting Date will be reduced by a pro rata portion of the total number of
forfeited RSUs.

In general, any RSUs that have not previously been forfeited will become fully
vested, even if not otherwise vested in accordance with the vesting schedule
above; if (1) a Change in Control (as defined in the Plan) has occurred and (2)
your employment with the Company and its Affiliates has been involuntarily
terminated for any reason other than Cause (or, if you have in effect with the
Company or an Affiliate an employment, retention, change in control, severance
or similar agreement that provides for “good reason” termination and, in
accordance with such agreement, you terminate employment or service for “good
reason”) within two years following the date of the Change in Control.  The
vesting of your RSUs following a Change in Control will be governed by the terms
of the Plan.  

Upon any other termination of employment or service, you will forfeit the RSUs
that have not yet vested.

 
Settlement of
Vested RSUs:
Settlement of any RSUs that have become vested will occur on the earliest of the
following dates:
 

 
 
4

--------------------------------------------------------------------------------

 
 
 

 
1.  The Vesting Date applicable to the RSUs if (a) you are continuously employed
by the Company or an Affiliate from the Grant Date through the Vesting Date or
(b) you would have been continuously employed by the Company or an Affiliate
from the Grant Date through the Vesting Date except for your Retirement.
 
2.  As soon as practicable (and not more than ninety (90) days) following your
date of death.
 
3.  Six (6) months following the date you become disabled (as defined above).
 
4.  In the case of any termination of your employment or service in which you
have vested RSUs (other than as a result of disability or death), the date that
would have been the latest Vesting Date applicable to any of the RSUs if you had
remained continuously employed by the Company or an Affiliate from the Grant
Date through the Vesting Date (but not sooner than six (6) months from the
termination of your employment or service); provided, that distribution of all
vested RSUs shall be made six (6) months following termination of your
employment or service, if such termination occurs within two (2) years following
the occurrence of a “change in control event” within the meaning of Internal
Revenue Code Section 409A.
 
Notwithstanding the foregoing, in the event of your Retirement prior to the
occurrence of a “change in control event” within the meaning of Internal Revenue
Code Section 409A, any RSUs not previously forfeited will be vested and settled
as soon as practicable (and not more than ninety (90) days) following the
occurrence of such “change in control event”.
 
For purposes of this Agreement, your employment or service will be terminated if
the Committee determines that you have incurred a “separation from service” as
such term is defined for purposes of Section 409A of the Internal Revenue Code,
taking into account, in the case of an absence from service for disability, the
maximum leave periods permitted under Section 409A for disability leaves of
absence.
 
Except as provided below or in the Plan, your vested RSUs will be settled by
delivery to you or, in the case of your death, to your estate, of a
certificate(s) or credit in book entry form, for the number of shares of Common
Stock equal to the number of RSUs that are vested and that are to be settled on
that date.  Settlement will be made on or as soon as practicable following the
specified

 
 
5

--------------------------------------------------------------------------------

 
 
 
settlement date.
 
The Fair Market Value of any fractional RSU, including any fractional RSU
remaining after the satisfaction of withholding obligation (as determined on the
date the tax is determined) will be paid to you in cash at the time your RSUs
are settled.
 
Notwithstanding anything to the contrary, settlement at the foregoing times is
subject to any deferral election that you have made, if eligible.
   

Nature of RSUs:
Your RSUs are not actual shares of Common Stock. Each RSU represents the right
to receive a share of Common Stock upon satisfaction of the terms and conditions
of the Award, but the RSU is not itself Common Stock.    No shares of Common
Stock will be issued unless and until the Company has determined to its
satisfaction that such issuance complies with all relevant provisions of
applicable law, including the requirements of any stock exchange on which the
shares may then be traded.
   
Transferability of
RSUs:
You may not sell, transfer or otherwise alienate or hypothecate any of your
RSUs.   In addition, by accepting this Award, you agree not to sell any shares
of Common Stock delivered to you in connection with this Award at a time when
applicable laws (including securities laws), Company or Affiliate policies or an
agreement between the Company and its underwriters or other terms and conditions
of the Plan prohibit a sale.
   
Voting and Dividends:
Since the RSUs are not actual shares of Common Stock, you may not exercise
voting rights, or receive dividends or other distributions paid with respect to
Common Stock, until such time as you become vested and receive actual shares of
Common Stock in settlement of your Award.  However, you will receive a credit
equivalent to any dividends or other distributions paid with respect to the
Common Stock that you would have received had your RSUs been actual shares of
Common Stock, so long as the applicable record date for such dividend or
distribution occurs after the Grant Date and before you forfeit such RSUs. This
credit will be made in the form of additional RSUs that will be subject to the
same risk of forfeiture, restrictions on transferability, settlement and other
terms of this Restricted Stock Unit Award Agreement as apply to the RSUs with
respect to which the dividend or distribution credit was granted.  In the case
of any dividend or distribution other than a dividend or distribution that is
paid in shares of Common Stock, the number of additional RSUs  will be
determined by dividing the dividend or distribution credit

 
6

--------------------------------------------------------------------------------

 

 

  by the closing share price of a share of Common Stock, as reported on the New
York Stock Exchange, on the dividend or distribution payment date. In the case
of any such dividend or distribution that is paid in shares of Common Stock, the
number of shares of Common Stock that you would have received as a result of
such dividend or distribution had your RSUs been actual shares of Common Stock
will constitute an equal number of additional RSUs. You will have no right to
dividend or distribution credits that are paid with respect to Common Stock
where the record date occurs on or after the date on which the RSUs have been
settled or the date on which you have forfeited the RSUs.    
Tax Withholding:
To the extent that the receipt or the vesting of the RSUs, or dividend and other
distribution credits made with respect to the RSUs, or the transfer of Common
Stock in settlement of your RSU Award, results in income to you for Federal,
state or local income tax purposes or results in “wages” to you for FICA or
other employment tax purposes, the Company has the right and the authority to
deduct or withhold from any compensation payable to you an amount sufficient to
satisfy its withholding obligations under applicable tax laws or
regulations.  Alternatively, the Company may require that you deliver to the
Company at the time the Company is obligated to withhold taxes in connection
with such receipt or vesting, as the case may be, such amount as the Company
requires to meet its withholding obligation under applicable tax laws or
regulations.  The Company may also satisfy the withholding requirement, in whole
or in part, by withholding for its own account that number of shares of Common
Stock otherwise deliverable to you, or by reducing the number of RSUs credited
to you, on the date the tax is to be determined having an aggregate Fair Market
Value on the date the tax is to be determined equal to the minimum statutory
total tax that the Company must withhold.
   

Powers of Company Not Affected: The existence of this Agreement or the
RSUs  herein granted shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or any
issuance of bonds, debentures, preferred, or prior preference stock ahead of or
affecting the Common Stock  or the rights thereof, or dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

 
 
7

--------------------------------------------------------------------------------

 
 
 

Employment: The granting of RSUs under this Agreement shall not be construed as
granting to you any right with respect to continued employment by the Company or
an Affiliate.     Interpretation: As a condition of the granting of this Award,
you agree, for yourself and your legal representatives or guardians, the
executor of your estate, and your heirs, that this Agreement shall be
interpreted by the Committee and that any interpretation by the Committee of the
terms of this Agreement or the Plan and any determination made by the Committee
pursuant to this Agreement shall be final, binding and conclusive.    
 Assignment of Agreement:
You may not assign this Agreement, and any attempted assignment shall be null
and void and of no legal effect.
    Amendment or Modification: No term or provision of this Agreement may be
amended, modified or supplemented orally.  Amendment, modification or
supplementation can be accomplished only (a) by an instrument in writing signed
by the party against whom or which the enforcement of the amendment,
modification or supplement is sought, or (b) as otherwise provided in the Plan.
    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 trial by
jury.    
Certain Corporate
Transactions
Notwithstanding anything in the Plan or this Agreement to the contrary, if at
the time of a Change in Control, or at any other time, your RSUs are cancelled
and converted to a cash value, and if such cancellation and conversion occurs
prior to the date on which

 
 
8

--------------------------------------------------------------------------------

 
 
 
 
vested amounts are to be settled under this Agreement, the cash value of your
cancelled and converted RSUs will accrue interest equivalent at the prime rate
of interest from the cancellation and conversion date to the settlement date.
    Severability: In the event any provision of this Restricted Stock Unit Award
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.    
Counterparts:
This Agreement may be executed in counterparts.    

Terms of Plan Govern:
This Restricted Stock Unit Award is granted under and, except as specifically
identified in this Agreement, governed by the terms and conditions of the Plan
as amended and in effect from time to time.  Additional provisions regarding
your Award and definitions of capitalized terms used and not defined in this
Award can be found in the Plan.  If you are eligible for and make a timely
election to defer the delivery of shares of Common Stock that otherwise would be
deliverable to you in accordance with this Agreement, the shares of Common Stock
that would otherwise be delivered  to you under this Agreement but that you are
eligible to and have elected to defer will continue to be held (even after you
have become vested) as stock units  that will be credited under and distributed
in accordance with the terms of the Deferred Compensation Plan; provided that
the vesting and forfeiture provisions set forth in this Agreement, and other
terms and conditions of the Plan affecting outstanding Plan awards, will
continue to apply to such stock units (and to any additional  stock units that
may be credited to you as a result of deemed dividends or other distributions)
to the same extent as such provisions, terms and conditions apply to the RSUs.

INTEGRYS ENERGY GROUP, INC.

 
 
By:                                                                     
Title:  Vice President – Human Resources
 
 
9

--------------------------------------------------------------------------------

 
 
 

ACKNOWLEDGEMENT FORM

I have read the terms of the Integrys Energy Group, Inc. Restricted Stock Unit
Agreement, dated ______________, and I hereby declare that I understand and
agree to be bound by the terms and conditions of that Agreement.
 

 
                                                                      

______________________________________
 
Print name:                                                                     

PLEASE SIGN AND DETACH THIS ACKNOWLEDGEMENT FORM FROM THE RESTRICTED STOCK UNIT
AWARD AGREEMENT AND RETURN IT TO THE GREEN BAY HUMAN RESOURCES DEPARTMENT.  YOUR
RESTRICTED STOCK UNIT AWARD WILL NOT BECOME EFFECTIVE UNTIL THE COMPANY RECEIVES
THIS SIGNED ACKNOWLEDGMENT FORM.

 

 
10

--------------------------------------------------------------------------------