Exhibit 10.26

AMENDED AND RESTATED SENIOR OFFICER EMPLOYMENT

AND NON-COMPETE AGREEMENT

 

THIS AMENDED AGREEMENT is made as of December 30, 2008 between WISCONSIN ENERGY
CORPORATION (the "Company") and Allen Leverett (the "Executive").

WHEREAS, the Executive is currently employed by the Company as its Chief
Financial Officer;

WHEREAS, the Executive and the Company originally entered into a Senior Officer
Employment and Non-compete Agreement dated as of June 20, 2003;

WHEREAS, the parties now desire to amend and restate the Agreement solely to
comply with Section 409A of the Internal Revenue Code of 1986, as amended, with
such changes effective January 1, 2005.

NOW, THEREFORE, in consideration of their mutual promises, the parties agree as
follows:

Defined Terms. All of the capitalized terms not otherwise defined in this
Agreement are defined in the attached Appendix.

Employment. Effective as of July 1, 2003 (the "Employment Starting Date"), the
Company employed the Executive as the Chief Financial Officer and the Executive
accepted and hereby again accepts such employment with the Company and agrees to
serve in such position and to perform such other executive duties and serve in
such other executive capacities not inconsistent with the position of Chief
Financial Officer as the Board of Directors of the Company may request. The
Executive's employment is not for any fixed term and the Executive acknowledges
that he is an employee at-will. Further:

Base Salary, Signing Bonus and Bonus Opportunity. Effective as of the Employment
Starting Date, the Executive's annual base salary was initially established at
an annual rate of $460,000. The Executive received a special lump sum signing
bonus of $250,000, with $150,000 of this amount paid promptly after the
Employment Starting Date and the balance of $100,000 paid six months later. The
Executive's target bonus opportunity for 2003 under the Company's Short-Term
Performance Plan (the "STPP") was fixed at 80% of base salary, with a minimum
guaranteed bonus of $368,000 for 2003 and a maximum bonus opportunity of 160% of
base salary. The Executive's target bonus opportunity under the STPP for 2004
and subsequent years will not be less than 80% of base salary, except under
circumstances described in the next sentence. Circumstances under which an
adjustment below the 80% target could take place would be limited to a general
"Board Action" resulting in the lowering of targets for the entire senior
executive group.

Stock Based Incentives. Effective as of the Employment Starting Date, the
Executive received a grant of non-qualified options for 200,000 shares of the

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Company's common stock (the "Stock") at an exercise price per share equal to the
average of the lowest and highest reported sale prices for the Stock on the
Employment Starting Date, and on other terms and conditions as specified for
other senior officers in the grants made to such officers in January of 2003.
Additionally, effective as of the Employment Starting Date, the Executive was
granted an award of restricted Stock, with the number of shares awarded
determined by dividing $750,000 by the lower of the average of the lowest and
highest reported sale prices for the Stock on such date, or $26.00, and then
rounding the number of shares to the nearest 10. Two-thirds of such restricted
Stock (rounded to the nearest whole share) vested on the second anniversary of
the Employment Starting Date, with the remainder vesting at the rate of 20% for
each year of service thereafter (i.e., starting with second anniversary of the
Employment Starting Date) until 100% vesting of such remainder occurs on the
seventh anniversary of the Employment Starting Date, provided further that 100%
vesting of all such restricted Stock shall occur upon the Executive's death or
disability while in the Company's employ.

Other Benefits and Special Additional Pension Benefit. The Executive will be
entitled to five weeks of vacation per year, to participate in all retirement
and welfare benefit plans and programs generally available to employees in
accordance with the terms of such plans and programs and to participate on a
basis commensurate with other senior officers of the Company in any benefit
plans and programs available to such officers, including the opportunity to
participate in the Company's Executive Deferred Compensation Plan (the "EDCP")
or such successor plan, as amended from time to time. Additionally, the
Executive shall be entitled to (i) participate in the Company's Supplemental
Pension Plan ("SPP") or such successor plan, as amended from time to time, with
respect to "SERP Benefit A," which is designed to make up for any limitations
imposed on the amount of Executive's accrued benefit under the Company's
tax-qualified defined benefit plan (the "Retirement Account Plan") because of
statutory or regulatory limits relating to the Internal Revenue Code and shall
vest in "SERP Benefit A" concurrent with vesting in the Retirement Account Plan,
and (ii) receive a special additional pension benefit. Such special additional
pension benefit, provided the Executive's retirement occurs at or after age 60,
will be equal to the difference between (a) and (b) below, less the monthly
lifetime retirement benefits payable to the Executive from all qualified and
non-qualified defined benefit pension plans of previous employers of the
Executive, calculated as if starting on the same date as the special additional
pension benefit, where (a) and (b) are as follows:

equals the monthly lifetime retirement benefit payable from the Company's
Retirement Account Plan, plus any amount payable as "SERP Benefit A" under the
SPP, and

equals the monthly lifetime retirement benefit that would have been payable from
the Management Employees' Retirement Plan of the Company as in effect on
December 31, 1995 (the "1995 Management Plan") had the defined benefit formula
then in effect continued until the Executive's retirement, calculated without
regard to Internal Revenue

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Code limits, and as if the Executive had started participation in the 1995
Management Plan on January 1, 1989 and as if any deferrals elected by the
Executive under the EDCP and any bonuses were all included in the Executive's
compensation base for calculating benefits under the 1995 Management Plan.

Such special additional pension benefit will be paid at the time and in the form
provided under the terms of the SPP (including, if any, the Executive's last
completed and timely filed payment election under the SPP and the SPP provision
requiring a six-month delay in payment to a "specified employee" upon a
"separation from service," both within the meaning of Code Section 409A).

Additional Preretirement Spouse's Benefit. In the event of the Executive's death
while in the Company's employ, the Company will pay to the Executive's surviving
spouse, if any, a monthly benefit equal to the difference between (a) and (b)
below, but reduced as provided below to reflect the vested value of all
qualified and nonqualified defined benefit pension plans of previous employers
of the Executive, where (a) and (b) are as follows:

equals the monthly spouse's benefit that is payable from the Retirement Account
Plan of the Company, plus any monthly amount payable under "SERP Benefit A"
under the SPP, and

equals the monthly spouse's benefit that would have been payable from the 1995
Management Plan had the defined benefit formula in effect on December 31, 1995
continued until the Executive's death, calculated on all the same assumptions as
set forth in Section 3(b) above.

The spouse's benefit will be paid in a monthly annuity for her life and will
begin as soon as administratively practicable following the Executive's death,
but no later than December 31 of the calendar year in which the Executive dies
or, if later, the 15th day of the third month following the Executive's death.
Notwithstanding the foregoing, on or before December 31, 2008, the Executive may
elect to have such benefit paid to the spouse in a lump sum.

The reduction attributable to plans of previous employers as referenced above in
the event the additional preretirement spouse's benefit becomes payable is to be
applied by reducing the monthly surviving spouse benefit calculation as above
set forth by one-half of the dollar amount of offset attributable to the plans
of previous employers that would have resulted under the third sentence of
Section 3 above if Section 3 were applicable.

For the life of the spouse, the spouse shall be entitled to coverage under the
Company's retiree medical and dental program upon the same terms as generally
available to surviving spouses of retirees of the Company. To the extent that
the medical and dental benefits for the spouse described in the preceding
sentence cannot be provided pursuant to the retiree medical and dental program
maintained by the Company or its affiliates, the Company

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shall provide such benefits outside the program at no cost (including, without
limitation, tax cost) to the spouse.

Covered Termination Not Associated with a Change in Control. In the event of a
Covered Termination Not Associated with a Change in Control, then the Company
shall provide the Executive with the following compensation and benefits:

General Compensation and Benefits. The Company shall pay the Executive's full
salary to the Executive from the time notice of termination is given through the
date of Termination of Employment at the rate in effect at the time such notice
is given or, if higher, at an annual rate not less than twelve times the
Executive's highest monthly base salary for the twelve-month period immediately
preceding the month in which the Effective Date occurs, together with all
compensation and benefits payable to the Executive through the date of
Termination of Employment under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period. Such
payments shall be made in a lump sum not later than ten business days after such
termination. The Company shall also pay the Executive's normal post-termination
compensation and benefits to the Executive as such payments become due, except
that any normal cash severance benefits shall be superseded and replaced
entirely by the benefits provided under this Agreement. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements most favorable to the Executive in effect at
any time during the 180-day period immediately preceding the Effective Date or,
if more favorable to the Executive, those provided generally at any time after
the Effective Date to executives of the Company of comparable status and
position to the Executive.

Incentive Compensation. Notwithstanding any provision of any cash bonus or
incentive compensation plan of the Company, the Company shall pay to the
Executive, within ten business days after the Executive's Termination of
Employment, a lump sum amount, in cash, equal to the sum of (i) any bonus or
incentive compensation which has been allocated or awarded to the Executive for
a fiscal year or other measuring period under the plan that ends prior to the
date of Termination of Employment, but which has not yet been paid, and (ii) a
pro rata portion of the Highest Bonus Amount for all uncompleted periods under
any bonus or incentive compensation plan.

Special Compensation. The Company shall pay to the Executive a lump sum equal to
two times the sum of (a) the highest per annum base rate of salary in effect
with respect to the Executive during the three-year period immediately prior to
the Termination of Employment plus (b) the Highest Bonus Amount. Such lump sum
shall be paid by the Company to the Executive within ten business days after the

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Executive's Termination of Employment, unless the provisions of Section 5(f)
below apply. Notwithstanding the foregoing, in the event of the Executive's
voluntary Termination of Employment without Good Reason, as described in Section
(c)(iv) of the Appendix to this Agreement, payment shall occur on the first day
of the seventh month following the Executive's Termination of Employment, unless
the provisions of Section 5(f) below apply. The amount of the aggregate lump sum
provided by this Section 5(c) shall not be counted as compensation for purposes
of any other benefit plan or program applicable to the Executive.

Special Retirement Plans Lump Sum. The Company shall pay to the Executive an
aggregate lump sum equal to the total of the amounts described in (a) and (b)
herein. Amount (a) is a lump sum equal to the difference between (i) the
actuarial equivalent of the benefit under the Retirement Account Plan, the SPP
"SERP Benefit A" and the special additional pension benefit provided under
Section 3 above, which the Executive would receive if his employment continued
for a two-year period following Termination of Employment, assuming that the
Executive's compensation during such two-year period would have been equal to
the Executive's salary as in effect immediately before the termination or, if
higher, as in effect at any time during the 180-day period immediately preceding
the termination date, and the Highest Bonus Amount, and (ii) the actuarial
equivalent of the Executive's actual benefit (paid or payable) under the
Retirement Account Plan, the SPP "SERP Benefit A" and the special additional
pension benefit under Section 3 above. Actuarial equivalency for this purpose
shall be determined using an interest rate equal to a 36 consecutive month (or
shorter period, as explained in the next sentence) average, using the rates as
of the last business day of each month starting with January 31, 2002 (the
"Month End Rate") of the five year United States Treasury Note yields (the "36
Month Average Rate") in effect ending with the Month End Rate immediately prior
to the Effective Date, as such yield is reported in the Wall Street Journal or
comparable publication, and the mortality table used for purposes of determining
lump sum amounts then in use under the Retirement Account Plan. Prior to January
31, 2004, the 36 Month Average Rate shall mean only the average of the Month End
Rates which have occurred since January 31, 2002, even though less than 36.
Amount (b) is a lump sum equal to the total of (i) the additional contributions
which would have been made to the Executive's account under the Company's
tax-qualified 401(k) plan, plus (ii) the additional contributions which would
have been credited to the bookkeeping account balance of the Executive
attributable to the 401(k) match feature of the EDCP, had the Executive
continued in employment for a two-year period following Termination of
Employment and assuming that the Executive's compensation would have been the
same as set forth above and that the Executive had made maximum utilization of
the pre-tax and after-tax opportunity in the qualified 401(k) plan and

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obtained the maximum matching contributions in such plan. The amount of the
aggregate lump sum under this Section 5(d) shall be paid by the Company to the
Executive within ten business days after the Executive's Termination of
Employment, unless the provisions of Section 5(f) below apply. Notwithstanding
the foregoing, in the event of the Executive's voluntary Termination of
Employment without Good Reason, as described in Section (c)(iv) of the Appendix
to this Agreement, payment shall occur on the first day of the seventh month
following the Executive's Termination of Employment, unless the provisions of
Section 5(f) below apply. The amount of the lump sum provided by this Section
5(d) shall not be treated as compensation for purposes of any other benefit plan
or program applicable to the Executive.

Special Additional Monthly Pension Benefit. The Company shall pay to the
Executive an additional monthly pension benefit equal to the difference between
(i) the pension benefits the Executive would have received under all qualified
and non-qualified defined benefit pension plans of his former employer
immediately prior to his employment with the Company had he remained with such
former employer until age 60, calculated as if his pay with such employer had
continued at its 2003 level, increased by 3% annually thereafter, and (ii) the
sum of the pension benefits actually payable to the Executive under the
Retirement Account Plan and under Section 3 above, which will become vested upon
the Executive's termination under this Section 5 without regard to the
Executive's age, plus the actuarial equivalent (calculated as provided in
subsection (d) above) of the special retirement plans lump sum benefit provided
in subsection (d) above, provided that the benefit calculated under (i) above is
greater than the benefit calculated under (ii) above. Such additional monthly
pension benefit shall be calculated as of the first day of the month following
the Executive's Termination of Employment and be payable in the form of a
monthly annuity for the Executive's life. Payment of the annuity shall commence
on the first day of the seventh month following the Executive's Termination of
Employment. The first payment shall also include a lump sum payment equal to the
aggregate of the monthly payments otherwise scheduled to be made pending such
six-month delay. No interest shall be payable on any amounts delayed due to the
Participant's status as a specified employee for purposes of implementing the
foregoing six-month delay.

Election Pursuant to Section 409A Transition Relief. Notwithstanding any other
provision of this Agreement, on or before December 31, 2008, the Executive may
elect to have all or part of the special compensation provided by Section 5(c)
and the special retirement plans lump sum otherwise provided for in Section 5(d)
paid pursuant to his election filed under the EDCP that relates to amounts
deferred in 2009. The amounts to which the election applies shall be credited
with earnings in the manner as elected by the Executive

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under the terms of the EDCP. EDCP provisions shall apply to such amounts except
that (i) any provisions for a mandatory lump sum payment upon separation from
service following a "Change in Control" as defined in the EDCP shall not apply
to deferrals made hereunder and (ii) the entire amount subject to the election
made under this Section 5(f) shall be paid in a lump sum by the Company
immediately prior to the occurrence of a Change in Control to such grantor or
"rabbi" trust as the Company shall have established as a vehicle to hold such
amount pending payment, but with such trust designed so that the Executive's
rights to payment of such benefits are no greater than those of an unsecured
creditor.

Welfare Benefits. Subject to Section 5(h) below, for a two-year period following
Termination of Employment, the Company shall provide the Executive (and his
family) with health, life and other welfare benefits (but excluding disability
benefits) substantially similar to the benefits received by the Executive (and
his family) pursuant to welfare benefit programs of the Company or its
affiliates as in effect immediately during the 180 days preceding the Effective
Date (or, if more favorable to the Executive, as in effect at any time
thereafter until the Termination of Employment); provided, however, that no
compensation or benefits provided hereunder shall be treated as compensation for
purposes of any of the programs or shall result in the crediting of additional
service thereunder. For purposes of determining the amount of such welfare
benefits, any part of which shall be based on compensation, the Executive's
compensation during the relevant two-year period shall be deemed to be equal to
the Executive's salary as in effect immediately before the Termination of
Employment or, if higher, as in effect at any time during the 180-day period
immediately preceding the termination date, and the Highest Bonus Amount. To the
extent that any of the welfare benefits covered by this Section 5(g) cannot be
provided pursuant to the plan or program maintained by the Company or its
affiliates, the Company shall provide such benefits outside the plan or program
at no additional cost (including, without limitation, tax cost) to the Executive
and his family. The Executive shall be entitled to be covered by a retiree
medical and dental program at the end of the relevant two-year period, at a cost
to the Executive not to exceed the lesser of the cost, if any, charged to other
retirees or the COBRA continuation premium charged to terminees who elect to
continue in the Company's health plan at their expense under applicable law. The
Company shall become obligated to continue such benefits for the remainder of
the Executive's life and that of his surviving spouse, notwithstanding any
contrary provision or power of amendment or termination reserved to the Company
in any otherwise applicable document.

To the extent that the period during which the continued provision of medical
and dental benefits falls within the applicable COBRA continuation period, such
continued provision of medical and dental

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benefits is exempt from Code Section 409A under Treasury Regulation Section
1.409A-1(b)(9)(v)(B). To the extent that the period during which the continued
provision of medical and dental benefits extends beyond the applicable COBRA
continuation period, the following shall apply: (i) the premiums for continued
medical and dental coverage shall be paid on a monthly basis; (ii) any amounts
paid to or on behalf of the Executive as reimbursement for medical and/or dental
expenses shall be paid on or before the last day of the year following the year
in which such expense was incurred; (iii) any amounts paid to or on behalf of
the Executive as reimbursement for medical and/or dental expenses during one
year will not affect the Executive's eligibility for amounts paid to or on
behalf of the Executive as reimbursement for medical and/or dental expenses
during any other year; and (iv) the right to continued coverage beyond the
applicable COBRA continuation period is not subject to liquidation or exchange
for another benefit. This paragraph shall be administered and interpreted
consistent with Treasury Regulation Section 1.409A-3(i)(1)(iv).

New Employment. If the Executive secures new employment during the two-year
period following Termination of Employment, the level of any benefit being
provided pursuant to Section 5(g) hereof shall be reduced to the extent that any
such benefit is being provided by the Executive's new employer. The Executive,
however, shall be under no obligation to seek new employment and, in any event,
no other amounts payable pursuant to this Agreement shall be reduced or offset
by any compensation received from new employment or by any amounts claimed to be
owed by the Executive to the Company or its affiliates.

Equity Incentive Awards. Notwithstanding the provisions in any Stock option
award, restricted Stock award or other equity incentive compensation award (the
"Awards"), the Executive shall become fully vested in all outstanding Awards and
all otherwise applicable restrictions shall lapse and for purposes of
determining the length of time the Executive has to exercise rights, if
applicable under any such Award, the Executive shall be treated as if he had
retired from the service of the Company at or after age 55 and completion of ten
years of service.

Outplacement and Financial Planning. The Company shall, at its sole expense as
incurred, provide the Executive with reasonable outplacement services, the scope
and provider of which shall be selected by the Executive in his sole discretion
(but at a cost to the Company of not more than $30,000) for a period of one
year. The Company shall also continue to provide the Executive with financial
planning counseling benefits through the third anniversary of the date of the
Executive's Termination of Employment, on the same terms and conditions as were
in effect immediately before the termination. The

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Executive shall be eligible to seek reimbursement for such benefits up to a
fixed dollar amount that is at least equal to the amount in effect for the year
before the Executive's Termination of Employment, unless the Company decides a
higher amount. Any unused amounts remaining in one year may not be carried over
for use in another year. To the extent the Company reimburses the Executive for
financial planning expenses incurred pursuant to this paragraph (j), such
reimbursement shall occur on or before the last day of the calendar year
following the year in which the expense was incurred.

Obligation of the Company on a Covered Termination of Employment Associated with
a Change in Control of the Company. In the event of a Covered Termination of
Employment Associated with a Change in Control of the Company, then the Company
shall provide the Executive with the same compensation and benefits and subject
to the same terms and conditions as are specified in Section 5 above; provided,
however that (i) the special compensation provided for in Section 5(c) shall be
three times (rather than two times) the sum of the amounts specified in
subsection (a) and (b) of Section 5(c), (ii) the special retirement plans lump
sum provided for in Section 5(d) shall be calculated as if the Executive's
employment has continued for a three-year period (rather than a two-year period)
following his Termination of Employment and (iii) the welfare benefits provision
of Section 5(f) shall be provided for a three-year period (rather than a
two-year period). In addition, the tax gross-up provisions of Section 7 hereof
shall apply. Further, the transition election for the Executive described in
Section 5(f) above shall apply, but only if the written irrevocable transition
election form is filed in accordance with the procedures set forth in that
election form by December 31, 2008.

Certain Additional Payments by the Company.

    Anything in this Agreement to the contrary notwithstanding, and whether or
    not a Covered Termination of Employment occurs, in the event it shall be
    determined that any payment or distribution by the Company to or for the
    benefit of the Executive (whether paid or payable or distributed or
    distributable pursuant to the terms of this Agreement or otherwise, but
    determined without regard to any additional payments required under this
    Section 7) (a "Payment") would be subject to the excise tax imposed by
    Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
    or any interest or penalties are incurred by the Executive with respect to
    such excise tax (such excise tax, together with any such interest and
    penalties, are hereinafter collectively referred to as the "Excise Tax"),
    then the Executive shall be entitled to receive an additional payment (a
    "Gross-Up Payment") in an amount such that after payment by the Executive of
    all taxes (including any interest or penalties imposed with respect to such
    taxes), including, without limitation, any income taxes (and any interest
    and penalties imposed with respect thereto) and Excise Tax imposed on the
    Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
    equal to the Excise Tax imposed upon the Payments.

    
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 a. Subject to the provisions of paragraph (c) of this Section 7, all
    determinations required to be made under this Section 7, including whether
    and when a Gross-Up Payment is required and the amount of such Gross-Up
    Payment and the assumptions to be utilized in arriving at such
    determination, shall be made by a certified public accounting firm
    designated by the Executive (the "Accounting Firm"), which shall provide
    detailed supporting calculations both to the Company and the Executive
    within fifteen business days of the receipt of notice from the Executive
    that there has been a Payment, or such earlier time as is requested by the
    Company. In the event that the Accounting Firm is serving as accountant or
    auditor for the individual, entity or group effecting the Change in Control,
    the Executive shall appoint another nationally recognized accounting firm to
    make the determinations required hereunder (which accounting firm shall then
    be referred to as the Accounting Firm hereunder). All fees and expenses of
    the Accounting Firm shall be borne solely by the Company. Any Gross-Up
    Payment, as determined pursuant to this Section 7, shall be paid by the
    Company to the Executive within five days of the receipt of the Accounting
    Firm's determination. Any determination by the Accounting Firm shall be
    binding upon the Company and the Executive. As a result of the uncertainty
    in the application of Section 4999 of the Code at the time of the initial
    determination by the Accounting Firm hereunder, it is possible that Gross-Up
    Payments which will not have been made by the Company should have been made
    ("Underpayment"), consistent with the calculations required to be made
    hereunder. In the event that the Company exhausts its remedies pursuant to
    paragraph (c) of this Section 7 and the Executive thereafter is required to
    make a payment of any Excise Tax, the Accounting Firm shall determine the
    amount of the Underpayment that has occurred and any such Underpayment shall
    be promptly paid by the Company to or for the benefit of Executive.
    Notwithstanding the foregoing, if the Executive is a "specified employee"
    (within the meaning of Code Section 409A) as of the date of the Executive's
    Termination of Employment, the Company shall pay any Gross-Up Payment and
    any Underpayment no earlier than the first day following the six-month
    anniversary of the Executive's Termination of Employment and no later than
    December 31 of the calendar year following the calendar year in which the
    Executive pays the Excise Tax.

    

    The Executive shall notify the Company in writing of any claim by the
    Internal Revenue Service that, if successful, would require the payment by
    the Company of the Gross-Up Payment. Such notification shall be given as
    soon as practicable but no later than ten business days after the Executive
    is informed in writing of such claim and shall apprise the Company of the
    nature of such claim and the date on which such claim is requested to be
    paid. The Executive shall not pay such claim prior to the expiration of the
    thirty-day period following the date on which he gives such notice to the
    Company (or such shorter period ending on the date that any payment of taxes
    with respect to such claim is due). If the Company notifies the Executive in
    writing prior to the expiration of such period that it desires to contest
    such claim, the Executive shall:
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    give the Company any information reasonably requested by the Company
    relating to such claim,
    
    take such action in connection with contesting such claim as the Company
    shall reasonably request in writing from time to time, including, without
    limitation, accepting legal representation with respect to such claim by an
    attorney reasonably selected by the Company,
    
    cooperate with the Company in good faith in order effectively to contest
    such claim, and
    
    permit the Company to participate in any proceedings relating to such claim;

    provided, however, that the Company shall bear and pay directly all costs
    and expenses (including additional interest and penalties) incurred in
    connection with such contest and shall indemnify and hold the Executive
    harmless, on an after-tax basis, for any Excise Tax or income tax (including
    interest and penalties with respect thereto) imposed as a result of such
    representation and payment of costs and expenses. Without limitation on the
    foregoing provisions of this paragraph (c) of Section 7, the Company shall
    control all proceedings taken in connection with such contest and, at its
    sole option, may pursue or forego any and all administrative appeals,
    proceedings, hearings and conferences with the taxing authority in respect
    of such claim and may, at its sole option, either direct the Executive to
    pay the tax claimed and sue for a refund or contest the claim in any
    permissible manner, and the Executive agrees to prosecute such contest to a
    determination before any administrative tribunal, in a court of initial
    jurisdiction and in one or more appellate courts, as the Company shall
    determine; provided, however, that if the Company directs the Executive to
    pay such claim and sue for a refund, the Company shall advance the amount of
    such payment to the Executive, on an interest-free basis and shall indemnify
    and hold the Executive harmless, on an after-tax basis, from any Excise Tax
    or income tax (including interest or penalties with respect thereto) imposed
    with respect to such advance or with respect to any imputed income with
    respect to such advance; and provided, further, that any extension of the
    statute of limitations relating to payment of taxes for the taxable year of
    the Executive with respect to which such contested amount is claimed to be
    due is limited solely to such contested amount. Furthermore, the Company's
    control of the contest shall be limited to issues with respect to which a
    Gross-Up Payment would be payable hereunder and the Executive shall be
    entitled to settle or contest, as the case may be, any other issue raised by
    the Internal Revenue Service or any other taxing authority.

    If, after the receipt by the Executive of an amount advanced by the Company
    pursuant to paragraph (c) of this Section 7, the Executive becomes entitled
    to receive any refund with respect to such claim, the Executive shall
    (subject to the Company's complying with the requirements of paragraph (c)
    of this
    
    
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    Section 7) promptly pay to the Company the amount of such refund (together
    with any interest paid or credited thereon after taxes applicable thereto).
    If after the receipt by the Executive of an amount advanced by the Company
    pursuant to paragraph (c) of this Section 7, a determination is made that
    the Executive shall not be entitled to any refund with respect to such claim
    and the Company does not notify the Executive in writing of its intent to
    contest such denial of refund prior to the expiration of thirty days after
    such determination, then such advance shall be forgiven and shall not be
    required to be repaid and the amount of such advance shall offset, to the
    extent thereof, the amount of Gross-Up Payment required to be paid.

Termination of Employment. The Company shall be entitled to terminate the
Executive's employment on account of Disability pursuant to the procedures set
forth in Section (e) of the Appendix, for Cause pursuant to the procedures set
forth in Section (a) of the Appendix, or without Cause by giving written notice
to the Executive of such termination. The Executive may terminate his employment
for Good Reason by giving the Company written notice of the termination, setting
forth in reasonable detail the specific conduct of the Company that constitutes
Good Reason. A Termination of Employment by the Executive for Good Reason shall
be effective on the fifth business day following the date such notice is given,
unless the notice sets forth a later date (which date shall in no event be later
than thirty days after the notice is given). In the event of a dispute regarding
whether the Executive's voluntary termination qualifies as a termination for
Good Reason, no claim by the Company that the same does not constitute a
termination for Good Reason shall be given effect unless the Company establishes
by clear and convincing evidence that such termination does not constitute a
termination for Good Reason. The Executive may also terminate his employment
without Good Reason by giving the Company written notice of such termination.

Obligations of the Company on Termination of Employment for Death, Disability,
for Cause or by the Executive Other than for Good Reason. If the Executive's
employment is terminated by reason of his death or Disability (but not under the
circumstances covered by paragraph (c)(iv) of the Appendix), or if such
employment is terminated by the Company for Cause or by the Executive other than
for Good Reason, the Company will pay to the Executive's estate or legal
representative or to the Executive, as the case may be, all accrued but unpaid
base salary and all other benefits and amounts which may become due in
accordance with the terms of any applicable benefit plan, contract, agreement or
practice, including amounts which may have become due under the terms of
Sections 3 and 4 of this Agreement, but no other compensation or benefits will
be paid under this Agreement.

Non-Compete Agreement. In consideration of this Agreement, the Executive agrees
that he will not, for a period of one year from the date of his or her
Termination of Employment with the Company, directly or indirectly own, manage,
operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner, including
but not limited to, holding the position of shareholder, director, officer,
consultant, independent contractor, executive partner, or investor with any
"Competing Enterprise." For purposes of this paragraph, a "Competing Enterprise"
means any entity, firm or person engaged in a

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business within the State of Wisconsin or the upper peninsula area of the State
of Michigan (the "Territory") which is in competition with any of the businesses
of the Company or any of its subsidiaries within the Territory as of the date
the Executive's Termination of Employment, and whose aggregate gross revenues,
calculated for the most recently completed fiscal year of the Competing
Enterprise, derived from all such competing activities within the Territory
during such fiscal year, equal at least 10% or more of such Enterprise's
consolidated net revenues for such fiscal year. If the Executive notifies the
Company in writing of any employment or opportunity which the Executive proposes
to undertake during the one year non-compete period, and supplies the Company
with any additional information which the Company may reasonably request, the
Company agrees to promptly notify the Executive within thirty days after all
information reasonably requested by it has been provided, whether the Company
considers the proposed employment or opportunity to be prohibited by these
provisions and, if so, whether the Company is willing to waive the same.
Notwithstanding anything in this Section 10, the Executive shall not be
prohibited from acquiring or holding up to 2% of the common stock of an entity
that is traded on a national securities exchange or a nationally recognized
over-the-counter market.

Relocation Benefit. The Company provided the Executive with the same relocation
benefits for his move from his previous residence to a residence near the
Company's principal office in Milwaukee, Wisconsin as were provided on the date
of the original Agreement to the Company's President.

Successors and Binding Agreements.

The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and to agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no succession had taken
place. This Agreement shall be binding upon and inure to the benefit of the
Company and any such successor, and such successor shall thereafter be deemed
the "Company" for the purposes of this Agreement.

This Agreement shall inure to the benefit of and be enforceable by the
Executive's respective personal or legal representative, executor,
administrator, successor, heirs, distributees and/or legatees.

Neither the Company nor the Executive may assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
this Section. Without limiting the generality of the foregoing, the Executive's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than by a
transfer by will or the laws of descent and distribution. In the event the
Executive attempts any assignment or transfer contrary to this Section, the
Company shall have no liability to pay any amount so attempted to be assigned or
transferred.
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Notices. All communications provided for herein shall be in writing and shall be
deemed to have been duly given when delivered or five business days after having
been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office and to the Executive
at his principal residence, or to such other address as any party may have
furnished to the other in writing in accordance herewith, except that notices of
a change of address shall be effective only upon receipt.

Indemnification. The Company will indemnify the Executive in accordance with the
Company's by-laws and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its directors and officers.

Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Wisconsin without
giving effect to the principles of conflict of laws of such state, except that
Section 16 shall be construed in accordance with the Federal Arbitration Act.

Resolution of Disputes. The parties shall endeavor to resolve any dispute
arising out of or relating to this Agreement by mediation in Milwaukee,
Wisconsin, under the Mediation Procedure of the Center for Public Resources
("CPR"). Unless the parties agree otherwise, the mediator will be selected from
the CPR Panels of Distinguished Neutrals. Any such dispute which remains
unresolved 45 days after appointment of a mediator, shall be finally resolved by
arbitration in Milwaukee, Wisconsin, by a sole arbitrator in accordance with the
CPR Rules for Non-Administered Arbitration, and judgment upon the award rendered
by the arbitrator may be entered by any court having jurisdiction thereof. The
Company will pay any fees and costs of the mediator in connection with the
mediation, but the parties agree to each pay one-half of the fees and costs of
the arbitrator in connection with the arbitration.

Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement which shall remain in full force and effect. If any provision of this
Agreement shall be held invalid or unenforceable in part, the remaining portion
of such provision, together with all other provisions of this Agreement, shall
remain valid and enforceable and continue in full force and effect to the
fullest extent consistent with law.

Entire Agreement; Amendments. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the matters discussed
herein and supersedes all other prior agreements and understandings, written or
oral, between the parties with respect thereto. There are no representations,
warranties or agreements of any kind relating thereto that are not set forth in
this Agreement. This Agreement may not be amended or modified except by a
written instrument signed by the parties hereto or their respective successors
and legal representatives.

Withholding. The Company may withhold from any amounts payable under this
Agreement all federal, state and other taxes as shall be legally required.
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Certain Limitations. Nothing in this Agreement shall grant the Executive any
right to remain an executive, director or employee of the Company or of any of
its subsidiaries for any period of time.

IN WITNESS WHEREOF, the parties have executed this Agreement on December 30,
2008.

 

 

/s/ Allen L. Leverett

ALLEN LEVERETT

WISCONSIN ENERGY CORPORATION

By: /s/ Gale E. Klappa

   

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APPENDIX

This is an appendix to the Amended Senior Officer Employment Agreement between
WISCONSIN ENERGY CORPORATION and Allen Leverett dated June 20, 2003 (the
"Agreement"), as restated January 1, 2005 for compliance with Code Section 409A.

As used in the Agreement, the terms set forth below shall have the following
meanings:

"Cause" means:

the willful and continued failure of the Executive to substantially perform the
Executive's duties (other than failure resulting from incapacity due to physical
or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board of Directors of the Company (the
"Board"), or the Compensation Committee of the Board (the "Committee") which
specifically identifies the manner in which the Board or the Committee believes
that the Executive has not substantially performed the Executive's duties, or

the willful engaging by the Executive in illegal conduct or gross misconduct
which is determined by the Board to have been materially and demonstrably
injurious to the Company. However, no act, or failure to act, on the Executive's
part shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company.

The Executive may only be terminated for Cause if the Company gives written
notice to the Executive of its intention to terminate the Executive's employment
for Cause, setting forth in reasonable detail the specific conduct of the
Executive that it considers to constitute Cause and the specific provision(s) of
this Agreement on which it relies, and stating the date, time and place of the
Special Meeting for Cause. The "Special Meeting for Cause" means a meeting of
the Board called and held specifically for the purpose of considering the
Executive's termination for Cause, that takes place not less than ten and not
more than twenty business days after the Executive receives the notice of
termination for Cause. The Executive shall be given an opportunity, together
with counsel, to be heard at the Special Meeting for Cause. The Executive's
termination for Cause shall be effective when and if a resolution is duly
adopted by the affirmative vote of at least two-thirds (⅔) of the entire
membership of the Board, excluding employee directors, at the Special Meeting
for Cause, stating that in the good faith opinion of the Board, the Executive is
guilty of the conduct described in the notice of termination for Cause and that
conduct constitutes Cause under this Agreement. In the event of a dispute
regarding whether the Executive's employment has been terminated for Cause, no
claim by the Company that Cause exists shall be given effect unless the Company
establishes by clear and convincing evidence that Cause exists.

A "Change in Control" with respect to the Company shall have the meaning set
forth in the Wisconsin Energy Corporation Executive Deferred Compensation Plan,
effective as of January 1, 2005 and as may be amended from time to time.
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"Covered Termination of Employment Associated with a Change in Control" means:

    a Termination of Employment by the Company other than because of death or
    Disability and without Cause, which occurs within a period of eighteen
    months following the Effective Date or,

    a Termination of Employment by the Company other than because of death or
    Disability and without Cause within a period of six months prior to the
    Effective Date, and it is reasonably demonstrated by the Executive that such
    Termination of Employment was at the request of a third party who has taken
    steps reasonably calculated to effect a Change in Control or otherwise arose
    in connection with or in anticipation of a Change in Control, or

    a Termination of Employment by the Executive for Good Reason within a period
    of eighteen months following the Effective Date and also within a period of
    twelve months subsequent to the occurrence, without the Executive's written
    consent, of any event described in Section (g) after the Effective Date, or
    a Termination of Employment by the Executive within a period of six months
    prior to the Effective Date and following the occurrence without the
    Executive's consent of any event described in Section (g)(i), (ii), (iii),
    or (iv) and it is reasonably demonstrated by the Executive that such event
    occurred at the request of a third party who has taken steps reasonably
    calculated to effect a Change in Control or otherwise arose in connection or
    in anticipation of a Change in Control, or

    a voluntary Termination of Employment by the Executive without Good Reason
    following completion of one year of service after a Change in Control of the
    Company, provided that the voluntary termination must be effected by the
    Executive within six months after the completion of that one-year of
    service. Further, if the Executive gives written notice to the Company any
    time after a Change in Control of the Company but before completion of one
    year of service thereafter that the Executive intends to so voluntarily
    terminate and if the Executive should thereafter die while in the employ of
    the Company or incur a Termination of Employment because of Disability, in
    either case before completion of such one year of service, such death or
    Termination of Employment shall be treated as a Covered Termination
    Associated with a Change in Control.

    If within fifteen days after the Company notifies the Executive that it is
    terminating his employment for Cause or the Executive notifies the Company
    that he is terminating his employment for Good Reason, the party receiving
    such notice notifies the other party that a dispute exists concerning the
    termination, then for purposes of this Section (c) the date of the
    Executive's Termination of Employment shall not be deemed to have occurred
    until the earlier of (i) the date that is 18 months following the Effective
    Date or (ii) the date on which the dispute is finally resolved, either by
    mutual written agreement of the parties or by a final judgment, order or
    decree of an arbitrator or a court of competent jurisdiction (which is not
    appealable or with respect to which the time for appeal therefrom has
    expired and no appeal has been perfected); provided, however, that the date
    of termination shall be extended by a notice of dispute given by the
    Executive only if such notice is given in good faith and the Executive
    pursues the resolution of such dispute with reasonable diligence.

    
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 i. If a purported termination occurs prior to or following a Change in Control
    and the date of termination is extended in accordance with the preceding
    paragraph, the Company shall continue to pay the Executive the full
    compensation and benefits as are provided in the first sentence of Section
    5(a) of the Agreement until the date of termination, as determined in
    accordance with the preceding paragraph. Amounts paid under this Section (c)
    are in addition to all other amounts due under the Agreement and shall not
    be offset against or reduce any other amounts due under the Agreement, other
    than amounts due under the first sentence of Section 5(a) of the Agreement.
    Each payment made pursuant to this paragraph shall be treated as a separate
    payment for purposes of the short-term deferral rules under Treasury
    Regulation Section 1.409A-1(b)(4). As a result, payments made on or before
    the 15th day of the third month of the calendar year following the
    applicable year containing the date on which notice of a dispute is provided
    by either party (the "short-term deferral deadline"), as the case may be,
    are exempt from the requirements of Code Section 409A. If the short-term
    deferral deadline occurs within six months after the date on which notice of
    a dispute is provided, then payments shall be suspended as of the short-term
    deferral deadline and will resume on the 1st day of the seventh month
    following the date on which such notice is provided. Any suspended payments
    will be aggregated and paid in a lump sum on such date.

    

"Covered Termination of Employment Not Associated with a Change in Control of
the Company" means:

a Termination of Employment by the Company other than because of death or
Disability and without Cause, or

a Termination of Employment by the Executive for Good Reason subsequent to the
occurrence, without the Executive's written consent, of any event described in
Section (g)(ii), (iii) or (iv).

"Disability" means that the Executive has been unable, for a period of
180 consecutive business days, to perform the material duties of his job, as a
result of physical or mental illness or injury and that a physician selected by
the Company or its insurers and acceptable to the Executive or his legal
representative, has determined that the Executive's incapacity is total and
permanent. A termination of the Executive's employment by the Company for
Disability shall be communicated to the Executive by written notice and shall be
effective on the thirtieth day after receipt of such notice by the Executive,
unless the Executive returns to full-time performance of his duties before the
expiration of such thirty-day period.

"Effective Date" means the first date on which a Change in Control of the
Company occurs, except that if Section 5 of the Agreement applies, the term
shall mean the date immediately prior to the Executive's Termination of
Employment.

"Good Reason" means:

solely in the context of a Covered Termination Associated with a Change in
Control, a material diminution in the Executive's authority, duties or
responsibilities, or
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from and after the date of the Agreement, a material diminution in the
Executive's base compensation, or

a material change in the geographic location at which the Executive must perform
services, or

any other action or inaction that constitutes a material breach by the Company
of this Agreement.

The Executive must provide notice to the Company of the existence of one of more
of the conditions described in paragraphs (i)-(iv) within a period not to exceed
90 days of the initial existence of the condition(s). The Company has a period
of 30 days during which it may remedy the condition.

"Highest Bonus Amount" means the higher of (i) the highest dollar bonus earned
by the Executive under any cash bonus or incentive compensation plan of the
Company during either the three complete fiscal years of the Company immediately
prior to the Executive's Termination of Employment or the three complete fiscal
years of the Company immediately preceding the Change in Control of the Company,
whichever is more favorable to the Executive, or (ii) the Executive's bonus or
incentive compensation "target" for the fiscal year in which the Termination of
Employment occurs.

"Termination of Employment" means a separation from service as determined
pursuant to Treasury Regulation Section 1.409A-1(h).

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