EXHIBIT 10.1

Form of

PERFORMANCE UNIT AWARD AGREEMENTS

AMENDMENT

MGE Energy, Inc. (the “Company”) and _______________ (the “Participant”) desire
to amend, effective as of__________, 2011, the outstanding Performance Unit
Award Agreement or Agreements, as applicable, held by Participant as of such
date and issued under the MGE Energy, Inc. 2006 Performance Unit Plan (each, an
“Agreement”), in accordance with Section 9 of each such Agreement, in the
following respects:

1.

Section 4(a) of each Agreement shall be amended in its entirety to read as
follows:

 (a)

Death, Disability or Bona Fide Retirement.

(i)

If the Participant’s employment with the Company is terminated due to the
Participant’s death, Disability or bona fide Retirement, the Participant’s Units
shall continue to vest in accordance with the schedule set forth in Section 2(b)
of this Agreement as if the Participant had remained in employment with the
Company following such death, Disability or bona fide Retirement through the
applicable vesting period, and all Units shall be settled in accordance with the
Plan on the appropriate Settlement Date following the conclusion of the full
Vesting Period; provided, however, that the Participant remains on a bona fide
Retirement or subject to a Disability, as applicable, through such Settlement
Date.

(ii)

For purposes of this Section 4(a), “bona fide Retirement” shall mean the
Participant’s Retirement during which the Participant does not:

(A)

directly, or indirectly through another, act as an officer, director, partner or
employee of or consultant to or act in any managerial capacity with any entity
that is engaged in the sale of electricity or gas to retail customers, or the
provision of transmission services related thereto, in the State of Wisconsin;
or

(B)

act in any full-time position with any other entity, if such position requires
duties and responsibilities similar to the duties and responsibilities of the
Participant with the Company prior to Retirement;

each as determined by the Company in its sole and absolute discretion; provided,
however, that the Participant’s Retirement shall constitute a bona fide
Retirement only if:

(1)

the Participant is age 65 or older on the date of such Retirement;

 

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(2)

the Participant is 55 or older on, and has completed at least 10 years of
service as an officer of the Company as of, the date of such Retirement; or

 

(3)

the Participant is 55 or older on the date of such Retirement and such
Retirement is approved as a bona fide Retirement by the Board.

If the Participant’s employment with the Company is terminated due to the
Participant’s Retirement, and such Retirement does not constitute a bona fide
Retirement, as determined by the Company in its sole and absolute discretion,
then the Participant’s rights with respect to the Units following termination
shall be determined in accordance with Section 4(b) below.

2.

Section 6 of each Agreement shall be amended by inserting the following new
sentence at the end thereof:

Notwithstanding the foregoing, Units shall be transferrable by will, the laws of
descent and distribution or pursuant to beneficiary designation procedures
established by the Company form time to time in its sole and absolute
discretion.    

ACCEPTED AND AGREED to this

 day of ______________, 2011.

MGE ENERGY, INC.

PARTICIPANT

by:

         Gary J. Wolter

Chairman, President and CEO

         

Date

         

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