Exhibit 10.2

MGE ENERGY, INC.

 

2013 DIRECTOR INCENTIVE PLAN1

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1 As amended.  Reflects amendment adopted February 17, 2017.

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MGE ENERGY, INC.

2013 DIRECTOR INCENTIVE PLAN

1.

Purpose; Effective Date

The purpose of the 2013 Director Incentive Plan (the “Plan”) of MGE Energy, Inc.
(the “Company”) is to align the interests of the Company’s shareholders and the
recipients of Awards (as defined below) under this Plan by increasing the
interest of such recipients in the Company’s growth and success.  This Plan is
effective December 20, 2013.  Capitalized terms not defined herein shall have
the meanings ascribed to them in Section 2 below.

2.

Definitions

The following terms used in the Plan shall have the meanings set forth below:

“Administrator” means the person or persons, if any, to whom the Committee has
delegated authority to administer the Plan.

“Award” means an award of Units made to a Participant.

“Award Agreement” means a written agreement setting forth the terms and
conditions of an Award made under the Plan.

“Board” means the Company’s Board of Directors.

“Committee” means the Compensation Committee appointed by the Board to
administer the Plan pursuant to the provisions of Section 3 of the Plan.

“Director” means any non-employee member of the Company’s Board from time to
time.

"Disability” means the Participant’s inability, due to mental or physical
incapacity, to substantially perform the duties of the Participant’s service on
the Board for 180 consecutive days, and which impairment is determined to be
total and permanent by a physician selected by Company and reasonably acceptable
to the Participant or the Participant’s legal representative.

“Dividend Equivalent” means a right, granted under this Plan, to receive the
cash equivalent of all of the dividends declared and paid with respect to one
share of the Company’s Stock during the Vesting Period that applies to an Award.
 The Dividend Equivalent amount shall be calculated based upon the dividend rate
in effect on the last day of the Vesting Period that applies to an award of
Units.  Dividend Equivalents shall not be deemed reinvested in the Company’s
Stock, and shall be paid to the Participants on the appropriate Settlement Date.

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“Fair Market Value” means the fair market value of Stock as determined in good
faith by the Committee or under procedures established by the Committee.  Unless
otherwise determined by the Committee, the Fair Market Value of Stock shall be
the officially-quoted closing selling price of the stock, or if no selling price
is quoted the bid price, on the Nasdaq Stock Market or other principal stock
exchange or market on which Stock is traded on the day immediately preceding the
day as of which such value is being determined or, if there is no sale on that
day, then on the last previous day on which a sale was reported.

“Grant Date” means the date upon which an Award is granted to a Participant.

“Participant” shall have the meaning assigned to that term in Section 4.

“Plan” means this MGE Energy, Inc. 2013 Director Incentive Plan.

“Retirement” means a Participant’s retirement from the Board (i) in accordance
with the guidelines regarding Board member selection and retirement approved
from time to time by the Board or (ii) as recognized and permitted as such by
the Board.

“Settlement Date” means the date upon which cash is paid to a Participant in
full settlement of vested Units for which the relevant Vesting Period has been
completed.  The Committee shall ensure that the Settlement Date occurs no later
than March 15th of the calendar year following the calendar year in which
completion of the relevant Vesting Period occurs.

“Stock” means the Company’s common stock, par value $1.00 per share as traded on
the Nasdaq Stock Market or other principal stock exchange or market on which
such common stock is traded.

“Termination” means a Participant ceasing to be a Director.

“Termination Date” means, with respect to a Participant, the final date of the
Participant’s service as a Director.

“Unit” means a right granted to a Participant to receive a cash settlement equal
to the Unit Value, as determined by the Committee.

“Unit Value” means, as calculated on the measurement date, the sum of (i) the
Fair Market Value of the Company’s Stock, plus (ii) an amount equal to the
aggregate value of all Dividend Equivalents declared on the Stock during the
relevant Vesting Period.

“Vesting Period” means the duration of time ending on December 31 of a calendar
year over which an Award becomes 100% vested.

3.

Administration

3.1

Committee Authority.  Unless otherwise determined by the Board and subject to
the provisions of the Plan, the Committee and the Administrator (subject to the
Committee’s ability to restrict the Administrator) shall have the authority and
full discretionary power to:  (i) designate eligible Participants, and make
Awards; (ii) determine the size of Awards as specified herein; (iii) administer,
construe and interpret the Plan; (iv) prescribe, amend and rescind rules and
regulations, agreements, terms, and notices hereunder (but not unilateral
modifications to existing Awards without the affected Participant’s written
consent); and (v) make all other determinations necessary

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or advisable in its discretion for the administration of the Plan.  Any actions
of the Committee with respect to the Plan shall be conclusive and binding upon
all persons interested in the Plan.  The Committee and Administrator may each
appoint agents and delegate authority as advisable to administer the Plan.

3.2

Administrator.  An Administrator may be appointed by, shall remain in office at
the will of, and may be removed with or without reason by, the Committee.  The
Administrator may resign at any time.  The Administrator shall not be entitled
to act on or decide any matter relating solely to himself or herself or any of
his or her rights or benefits under the Plan.  The Administrator shall not
receive any special compensation for serving in his or her capacity as
Administrator but shall be reimbursed for any reasonable expenses incurred in
connection therewith.  No bond or other security need be required of the
Administrator in any jurisdiction.

3.3

Limitation of Liability.  In the exercise of authority under the Plan, each
Committee member (or Administrator) shall be entitled in good faith to rely or
act upon any report or other information furnished to him or her by any employee
of the Company, the Company’s independent certified public accountants, or any
executive compensation consultant, legal counsel, or other professional retained
by the Company to assist in the administration of the Plan.  No Committee
member, Administrator, or executive shall be personally liable to the Company or
to any participant in the Plan for any action, determination, or interpretation
taken or made in good faith with respect to the administration of this Plan, and
each such person shall be fully indemnified by the Company and the Company and
the participants in the Plan waive their rights with respect to any such
liability.

4.

Participation

An individual must be a Director to be eligible to participate in the Plan
(“Participants”).  

5.

Awards

5.1

General.  Awards may be granted on the terms and conditions set forth in this
Section 5.  In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter, such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine, including terms requiring forfeiture of Awards in the event of
a Participant’s Termination.  The Committee shall retain full power and
discretion with respect to any term or condition of an Award that is not
mandatory under the Plan.  

5.2

Award Agreements.  Each Award shall be evidenced by an Award Agreement signed by
the Participant and an authorized Company representative.  Each Award shall be
subject to the terms and conditions of the Plan and to such other terms and
conditions as may be established by the Committee in the Award Agreements.

5.3

Unit Vesting.  Unless otherwise determined in the Award Agreement, Units shall
vest according to the following schedule:

Year

Vesting

  1

33-1/3%   

  2

33-1/3%

  3

33-1/3%

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5.4

 Settlement of Units;  Other Terms.  Units shall be settled based on their Unit
Value in a cash lump sum no later than March 15th of the calendar year following
the calendar year in which completion of the relevant Vested Period occurs.
 Vested Awards shall not be settled until the conclusion of the full Vesting
Period to which such Award relates.

6.

Termination Events

 Unless otherwise provided in the applicable Award Agreement, the following
shall apply to all Units held by a Participant upon any Termination.

6.1

Death, Disability or Retirement.  If a Participant's Termination is due to the
Participant’s death, Disability or Retirement, all unvested Units (determined as
of the Termination Date) shall become immediately vested and all of the
Participant’s Units shall be settled in accordance with the Plan on the
appropriate Settlement Date following conclusion of the full Vesting Period.

6.2

Termination For Any Other Reason.  If the Participant’s Termination is not due
to the Participant’s death, Disability or Retirement, all unvested Units
(determined as of the Termination Date) shall be immediately forfeited and all
of the Participant’s vested Units shall be settled in accordance with the Plan
on the appropriate Settlement Date following conclusion of the full Vesting
Period.

7.

Change in Control

 The Committee may set forth in any Award Agreement the effect, if any, that a
change in control or other, similar transaction shall have on any awards granted
under this Plan.

8.

Claims; Arbitration

8.1

 Claims.  Any individual who makes a claim for benefits under the Plan shall
file the claim in writing with the Committee.  Written notice of the disposition
of the claim shall be delivered to the claimant within 60 days after filing.  If
the claim is denied, the general reasons shall be set forth in a statement
delivered to the claimant.  Thereafter, the claimant may request arbitration in
accordance with Section 8.2.  The filing of a claim in accordance with this
Section 8.1 shall be a condition precedent to the prosecution of any dispute.

8.2

Arbitration.  Any dispute between the Company and an individual claiming a
benefit under the Plan that is not resolved between the Company and the claimant
shall, if either party wishes to pursue further resolution of the dispute, be
submitted to binding arbitration in accordance with the rules of Commercial
Arbitration of the American Arbitration Association.  Any such arbitration shall
take place in Madison, Wisconsin.  The arbitrator shall be a person experienced
in employment and compensation of corporate business executives who is mutually
acceptable to the Company and the claimant.  If an arbitrator cannot be agreed
upon within 15 days after a dispute is submitted to arbitration, the parties
shall each select one representative who is not and has never been associated
with the Company or the Board, and who is not and never has been associated with
the claimant, and these two representatives shall choose a neutral arbitrator
with the qualifications described above.  If the representatives cannot reach
agreement, one arbitrator with the qualifications described above shall be
selected by the Madison, Wisconsin office of the American Arbitration
Association.  All actions and proceedings under this Section 8 shall be kept
confidential and neither party shall divulge any part thereof to third parties
without the prior written consent of the other party.  Each party to an
arbitration under this Section 8 shall pay his or her own expenses,

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including without limitation, fees of counsel, and each of the parties shall
bear one-half of the fees and costs of the arbitrators.

9.

Miscellaneous

9.1

No Service or Equityholder Rights.  Neither the Plan nor any Awards granted
under the Plan shall give any Participant a right to remain in the service of
the Board.  No Participant shall have any rights of an equityholder of the
Company thereof as a result of the grant of an Award or otherwise under the
Plan.

9.2

Withholding Taxes.  The Company shall withhold from the settlement of any Units
under this Plan any amount of withholding taxes due in respect of settlement of
such Units in cash.

9.3

Governing Law.  All questions pertaining to the validity, construction and
administration of the Plan and the Agreements shall be determined in accordance
with the laws of the State of Wisconsin without regard to conflicts of law
principles.

9.4

Unfunded Plan.  The Plan is intended to constitute an “unfunded” plan for
incentive and deferred compensation.  With respect to any amount payable to a
Participant under the Plan, nothing contained in the Plan (or in any Award
Agreement or other documents related thereto), nor the creation or adoption of
the Plan, the grant of any award, or the taking of any other action pursuant to
the provisions of the Plan shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided, however, that
the Committee may authorize the creation of trusts or make other arrangements to
meet the Company’s obligations under the Plan, which trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.

9.5

Severability.  In case any provision of this Plan shall be held illegal or
invalid, such illegality or invalidity shall be construed and enforced as if
said illegal or invalid provision had never been inserted herein and shall not
affect the remaining provisions of this Plan, but shall be fully severable, and
the Plan shall be construed and enforced as if any such illegal or invalid
provision were not a part hereof.

9.6

Adjustments.  In the event of any cash infusion, capital raising transaction,
reorganization, recapitalization, stock split, stock dividend, merger,
consolidation, split-up, spin-off or any other similar change in the structure
of the Company, the Committee reserves the right to make such equitable
adjustment, if any, as it may deem appropriate, in its sole and absolute
discretion, in the determination of the value of the Units as described herein.

9.7

Setoff.  The Company may, to the extent permitted by law, deduct from and set
off against its obligations to a Participant from time to time, any amounts that
the Participant owes to the Company for any reason whatsoever.  A Participant
shall remain liable for any portion of the Participant’s obligation not
satisfied by such setoff.  By accepting an Award granted hereunder, a
Participant agrees to any deduction or setoff under this Section 9.7.  

9.8

Transferability and Alienation.  Except insofar as may otherwise be required by
law, no amount payable at any time under the Plan shall be subject in any manner
to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind, nor in any manner be subject to
the debts or liabilities of any person, and any attempt to so alienate or
subject any such amount, whether presently or thereafter payable, shall be void.
 If

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any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge,
attach, charge, or otherwise encumber any amount payable under the Plan, or any
part thereof, or if by reason of his or her bankruptcy or other event happening
at any such time such amount would be made subject to his or her debts or
liabilities or would otherwise not be enjoyed by him or her, then the Committee,
if it so elects, may direct that such amount be withheld and that the same or
any part thereof be paid or applied to or for the benefit of such person, his or
her spouse, children or other dependents, or any of a Participant’s heirs, in
such manner and proportion as the Committee may deem proper.

9.9

Notices.  All notices or other communications made or given pursuant to this
Plan shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail addressed to any Participant at the
address contained in the records of the Company or to the Company at its
principal office.

9.10

Amendment; Termination.  The Board may, without the consent of the Participants
under the Plan, at any time terminate the Plan entirely, and at any time or from
time to time amend or modify the Plan, provided that no such action shall
adversely affect any Award previously granted without the Participant’s consent.

9.11

Expenses.  All expenses and costs incurred in connection with the operation of
the Plan shall be borne by the Company.

9.12

Other Plans.  The adoption of this Plan shall not affect any other compensation
or incentive plans in effect for the Company’s Directors.  Nothing in this Plan
shall be construed to limit the right of the Company to establish, alter or
terminate any other forms of incentives, benefits or compensation for Directors.

9.13

Headings.  The headings in the Plan are for reference purposes only and shall
not affect the meaning or interpretation of the Plan.

9.14

Section 409A Compliance.  This Plan is intended to be excepted from or comply
with, as applicable, the provisions of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), and shall be interpreted and construed
accordingly.  The Company shall have the discretion and authority to amend this
Plan at any time to satisfy any requirements of Section 409A of the Code or
guidance provided by the U.S. Treasury Department to the extent applicable to
this Plan.  By accepting an Award under this Plan, the Participant agrees that
no provision of this Plan or any communications related to this Plan shall be
interpreted as guaranteeing the tax consequences or treatment of any amounts
payable to the Participant under this Plan.