EXHIBIT 10.41

MGE ENERGY, INC.

2006 PERFORMANCE UNIT PLAN

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MGE ENERGY, INC.

2006 PERFORMANCE UNIT PLAN

1.

Purpose; Effective Date

The purpose of the 2006 Performance Unit Plan (the “Plan”) of MGE Energy, Inc.
and its subsidiaries and affiliates (the “Company”) is to attract, retain and
motivate key employees by providing those employees incentives and reward for
performance at the Company. This Plan is effective January 1, 2007, the first
date on which any Awards (as defined below) were issued under the Plan, and
amends and restates in its entirety the version of the Plan originally adopted
by the Company on December 29, 2006. 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 Performance Units made to a Participant.

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

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

“Cause” means “cause” as defined in the Participant’s employment agreement, or
in the absence of such definition, shall mean the Participant’s: (i) continued
failure to obey reasonable instructions of the person(s) to whom the Participant
reports; (ii) continued neglect of duties and responsibilities; (iii) willful
misconduct or other actions in bad faith which are to the Company’s detriment;
(iv) breach of any material covenant with the Company by which employee is
bound, including without limitation any confidentiality, intellectual property
or non-solicitation agreements with the Company (including without limitation
the provisions contained herein), or (v) violation of any provision of the
Company’s written code of conduct.

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

"Disability” means the definition of Disability in the Company’s Long-Term
Disability Plan, or in the absence of such a definition, the Participant’s
inability, due to mental or physical incapacity, to substantially perform the
duties of the Participant’s employment for 180 consecutive days, and which
impairment is determined to be total and permanent by a physician selected by
Company or its insurers and reasonably acceptable to the Participant or the
Participant’s legal representative.

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“Dividend Equivalent” means a right, granted under this Plan, to receive the
cash equivalent of all or a specified portion of the dividends declared and paid
with respect to one share of the Company’s Stock during the Vesting Period which
applies to an award of Performance 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.

“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 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 of Performance Units are granted
to a Participant.

“Performance Period” means any relevant period designated by the Committee with
respect to any Award.

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

“Plan” means this MGE 2006 Performance Unit Plan.

“Retirement” means any normal (or approved early retirement) by a Participant
pursuant to the terms of any pension, profit sharing or 401(k) plan, or Company
policy applicable to a Participant on the Termination Date.

“Settlement Date” means the date upon which cash is paid to a Participant in
full settlement of vested Performance Units for which the relevant Vesting
Period has been completed. The Committee shall ensure that the Settlement Date
occurs within 90 days following the completion of the relevant Vesting Period.

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

“Termination Date” means, with respect to a Participant, the final date of the
Participant’s employment with the Company.

“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 a Performance Award becomes 100% vested.

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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) establish 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 Participant’s written consent); and
(v) make all other determinations necessary 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 and the Company and the participants in
the Plan waive their rights with respect to any such liability.

4.

Participation

Participants must be Company employees to be eligible to participate in the Plan
(“Participants”). The Committee shall have sole discretion to designate eligible
employees who may participate in the Plan, which shall be determined based on a
Participant’s performance against goals established by the Committee and the CEO
for the immediately preceding year. Participation in this Plan in one
Performance Period neither guarantees nor precludes participation in any
subsequent Performance Period.

5.

Performance 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
termination of employment or service by the Participant and terms permitting a
Participant to make elections relating to his or her Award. 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. The Committee shall require the
payment of lawful consideration for an Award to the extent necessary to satisfy
the requirements of applicable corporate law of the State of Wisconsin.

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5.2

Size of Awards; Limitation. Awards shall be targeted at 20% of a Participant’s
base salary, as determined by the Committee using the Fair Market Value of the
Company’s Stock on the Grant Date. With respect to Awards for any Performance
Period, the maximum Award made to any Participant shall not exceed 30% of that
Participant’s base salary, as measured on the Grant Date.

5.3

Award Agreements. The Committee may grant an Award to a Participant with respect
to any Performance Period. 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 Agreements.

5.4

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

Year

Vesting

1

0%

2

0%

3

60%

4

80%

5

100%

5.5

 Settlement of Performance Awards; Other Terms. Performance Awards shall be
settled in a cash lump sum within 90 days following completion of the relevant
Vested Period. 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 Performance Units held by a Participant upon any termination of
employment with the Company.

6.1

Death, Disability or Retirement. If a Participant's employment with the Company
is terminated due to the Participant’s death, Disability or Retirement, the
Participant shall receive an additional year of vesting credit with respect to
the Units, and all vested Units shall be settled in accordance with the Plan on
the appropriate Settlement Date following the conclusion of the full Vesting
Period. Specifically, such a Participant shall receive, as applicable, (i) if
the Participant’s Termination Date occurs prior to December 31 of a calendar
year, vesting credit with respect to such calendar year or (ii) if the
Participant’s Termination Date occurs on December 31 of a calendar year, vesting
credit with respect to the calendar year immediately following the calendar year
which includes such Termination Date.

6.2

Voluntarily by the Participant or by Company without Cause. If the Participant
voluntarily terminates employment with the Company or the Company terminates the
Participant without Cause, in either case prior to the conclusion of the full
Vesting Period, 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.

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6.3

Termination by Company for Cause. If the Participant’s employment with the
Company is terminated for Cause, all vested and unvested Units shall be
immediately forfeited without settlement or payment of value.

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.

Restrictive Covenants

8.1

 Non-disclosure. No Participant shall disclose to anyone, without the Company’s
prior written consent (except in good faith in the ordinary course of business
to a person who will be advised by the Participant to keep such information
confidential) or make use of any Confidential Information (as defined below),
except in the performance of the Participant’s duties on the Company’s behalf or
when required to do so by legal process, any governmental agency having
supervisory authority over the Company’s business, or any administrative or
legislative body (including a Committee thereof) that requires the Participant
to divulge, disclose or make accessible such information. In the event that the
Participant is so required, he or she shall give the Company prompt written
notice to allow the Company the opportunity to object to or otherwise resist
such order. “Confidential Information” shall mean (i) all information concerning
the Company’s business of a confidential or proprietary nature relating to any
of its assets, product development, pricing, customers, suppliers, trade
secrets, owners, investors, finances, transactions (present and contemplated)
and business plans and strategies, and (ii) information regarding the names,
titles, status, compensation, benefits and other proprietary employment-related
aspects of the Company’s employees and employment practices, provided that
“Confidential Information” does not include information that is or properly
becomes part of the public domain.

8.2

Return of the Company Materials. Upon any termination of employment or service,
each Participant agrees to deliver any documents, notes, drawings,
specifications, computer software, data and other materials of any nature
pertaining to any Confidential Information in the Participant’s possession or
over which the Participant has control, and will not take any of the foregoing,
or any reproduction of any of the foregoing, that is embodied in any tangible
medium of expression, provided that the foregoing shall not prohibit a
Participant from retaining his or her personal phone directories and rolodexes.

9.

Forfeiture

9.1

Forfeiture of Performance Award Settlement and Repayment. Unless otherwise
determined by the Committee, upon a violation by the Participant of any of the
restrictive covenants contained in Section 8 (excluding unintentional or
non-material violations of Section 8.2)(each a “Forfeiture Event”), the
Participant shall forfeit his or her entitlement to any payment pursuant to this
Plan and shall be obligated to repay to the Company, in cash, within five
business days after demand is made therefore by the Company, all amounts paid to
the Participant by the Company pursuant to this Plan within 12 months of the
date of such Forfeiture Event.

9.2

Committee Discretion. The Committee may, in its discretion, waive in whole or in
part the Company’s right to forfeiture under this Section, but no such waiver
shall be effective unless evidenced in writing.

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10.

Claims; Arbitration

10.1

 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 reasons shall be set forth in a statement delivered to the
claimant. Thereafter the claimant may request arbitration in accordance with
Section 10.2. The filing of a claim in accordance with this Section 10.1 shall
be a condition precedent to the prosecution of any dispute.

10.2

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 further pursue 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 10 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 10 shall pay his or her own expenses, including
without limitation, fees of counsel, and each of the parties shall bear one-half
of the fees and costs of the arbitrators.

11.

Miscellaneous

11.1

No Employment or Equityholder Rights. Neither the Plan nor any Performance
Awards granted under the Plan shall give any Participant a right to remain
employed by the Company. The Company reserves the right to terminate the
employment or service of any Participant at any time, and for any reason,
subject to applicable laws, employee manuals (as may be revised from time to
time) and any employment or other agreement. 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.

11.2

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

11.3

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.

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11.4

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.

11.5

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.

11.6

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 Performance Units as
described herein.  

11.7

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, (including without
limitation amounts payable in connection with an Award, as wages or benefits or
other form of compensation), 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 11.7.

11.8

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 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 bankruptcy or other event happening
at any such time such amount would be made subject to his debts or liabilities
or would otherwise not be enjoyed by him, 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.

11.9

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.

11.10

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.

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11.11

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

11.12

Other Plans. The adoption of this Plan shall not affect any other compensation
or incentive plans in effect for the Company. 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 employees.

11.13

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

11.14

Section 409A Compliance. This Plan is intended to comply with 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.

IN WITNESS WHEREOF, and as evidence of the adoption of this amendment and
restatement of the Plan effective January 1, 2007, the Company has caused this
instrument to be executed by its duly authorized officer this 9th day of
December, 2008.

By:

/s/ Gary J. Wolter_______________

Gary J. Wolter

Chairman, President and Chief Executive Officer

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