EXHIBIT 10.2


                KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT


       THIS AGREEMENT,  made and entered into as of the 29th day of March,  1999
by and between Interstate Energy Corporation (d/b/a Alliant Energy Corporation),
a  Wisconsin  corporation  (hereinafter  referred  to  as  the  "Company"),  and
Erroll B. Davis, Jr. (hereinafter referred to as "Executive").

                               W I T N E S S E T H

        WHEREAS, the Executive is employed by the Company and/or a subsidiary of
the Company  (hereinafter  referred to  collectively as the "Employer") in a key
executive  capacity and the Executive's  services are valuable to the conduct of
the business of the Company;

        WHEREAS, the Company desires to continue to attract and retain dedicated
and  skilled  management  employees  in  a  period  of  industry  consolidation,
consistent  with  achieving the best possible  value for its  shareowners in any
change in control of the Company;

        WHEREAS,  the Company recognizes that circumstances may arise in which a
change in control of the  Company  occurs,  through  acquisition  or  otherwise,
thereby causing a potential conflict of interest between the Company's needs for
the Executive to remain focused on the Company's  business and for the necessary
continuity  in management  prior to and  following a change in control,  and the
Executive's  reasonable  personal concerns  regarding future employment with the
Employer  and  economic  protection  in the  event  of loss of  employment  as a
consequence of a change in control;


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        WHEREAS,  the Company and the  Executive  are desirous that any proposal
for a change in control or  acquisition of the Company will be considered by the
Executive  objectively  and with  reference  only to the best  interests  of the
Company and its shareowners;

        WHEREAS,  the  Executive  will be in a better  position to consider  the
Company's  best  interests  if the  Executive  is afforded  reasonable  economic
security,  as  provided  in  this  Agreement,   against  altered  conditions  of
employment which could result from any such change in control or acquisition;

        WHEREAS,  the Executive possesses intimate knowledge of the business and
affairs of the Company and has acquired  certain  confidential  information  and
data with respect to the Company; and

        WHEREAS,  the Company  desires to insure,  insofar as possible,  that it
will continue to have the benefit of the Executive's services and to protect its
confidential information and goodwill.

        NOW,  THEREFORE,  in  consideration  of the  foregoing and of the mutual
covenants and agreements  hereinafter  set forth,  the parties  hereto  mutually
covenant and agree as follows:


        1.      Definitions.

        (a) Act.  For  purposes  of this  Agreement,  the term  "Act"  means the
Securities Exchange Act of 1934, as amended.


        (b) Affiliate and Associate.  For purposes of this Agreement,  the terms
"Affiliate" and "Associate" shall have the respective  meanings ascribed to such
terms in Rule l2b-2 of the General Rules and Regulations under the Act.

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        (c) Beneficial Owner. For purposes of this Agreement,  a Person shall be
deemed to be the "Beneficial Owner" of any securities:

                (i) which  such  Person or any of such  Person's  Affiliates  or
        Associates  has the right to acquire  (whether such right is exercisable
        immediately  or  only  after  the  passage  of  time)  pursuant  to  any
        agreement,  arrangement  or  understanding,  or  upon  the  exercise  of
        conversion  rights,  exchange rights,  rights,  warrants or options,  or
        otherwise;  provided,  however,  that a Person  shall not be deemed  the
        Beneficial  Owner of, or to  beneficially  own, (A) securities  tendered
        pursuant  to a tender  or  exchange  offer  made by or on behalf of such
        Person or any of such  Person's  Affiliates  or  Associates  until  such
        tendered  securities  are  accepted  for  purchase,  or  (B)  securities
        issuable  upon  exercise of Rights  issued  pursuant to the terms of the
        Company's  Rights  Agreement,  dated as of  January  20,  1999,  between
        Interstate  Energy  Corporation  and Firstar Bank  Milwaukee,  N.A.,  as
        amended from time to time (or any  successor to such Rights  Agreement),
        at any time before the issuance of such securities;

                (ii) which such  Person or any of such  Person's  Affiliates  or
        Associates,  directly or indirectly, has the right to vote or dispose of
        or has "beneficial  ownership" of (as determined  pursuant to Rule l3d-3
        of the General Rules and Regulations under the Act),  including pursuant
        to any agreement, arrangement or understanding;  provided, however, that
        a Person shall not be deemed the Beneficial Owner of, or to beneficially
        own,  any  security  under  this  Subsection  1 (c)  as a  result  of an
        agreement,  arrangement  or  understanding  to vote such security if the
        agreement, arrangement


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        or  understanding:  (A) arises solely from a revocable  proxy or consent
        given  to  such  Person  in  response  to  a  public  proxy  or  consent
        solicitation  made pursuant to, and in accordance  with,  the applicable
        rules and regulations  under the Act and (B) is not also then reportable
        on a Schedule l3D under the Act (or any comparable or successor report);
        or


                (iii) which are beneficially owned,  directly or indirectly,  by
        any  other  Person  with  which  such  Person  or any of  such  Person's
        Affiliates or Associates has any agreement, arrangement or understanding
        for the purpose of  acquiring,  holding,  voting  (except  pursuant to a
        revocable proxy as described in Subsection 1(c) (ii) above) or disposing
        of any voting securities of the Company.


        (d) Cause.  "Cause" for  termination by the Employer of the  Executive's
employment  in  connection  with a Change in Control of the Company  shall,  for
purposes of this  Agreement,  be limited to (i) the engaging by the Executive in
intentional  conduct not taken in good faith which has caused  demonstrable  and
serious  financial injury to the Employer,  as evidenced by a determination in a
binding and final judgment,  order or decree of a court or administrative agency
of competent jurisdiction,  in effect after exhaustion or lapse of all rights of
appeal,   in  an  action,   suit  or  proceeding,   whether   civil,   criminal,
administrative  or  investigative;  (ii) conviction of a felony (as evidenced by
binding  and  final   judgment,   order  or  decree  of  a  court  of  competent
jurisdiction,  in  effect  after  exhaustion  of all  rights  of  appeal)  which
substantially   impairs  the  Executive's  ability  to  perform  his  duties  or
responsibilities; and (iii) continuing willful and unreasonable refusal by the


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Executive  to  perform  the  Executive's  duties  or  responsibilities   (unless
significantly changed without the Executive's consent).

        (e)  Change in  Control  of the  Company.  A "Change  in  Control of the
Company"  shall be deemed to have  occurred  if an event set forth in any one of
the following paragraphs shall have occurred:

                (i)  any  Person  (other  than  (A)  the  Company  or any of its
        subsidiaries,  (B) a trustee or other fiduciary holding securities under
        any employee benefit plan of the Company or any of its subsidiaries, (C)
        an underwriter temporarily holding securities pursuant to an offering of
        such securities or (D) a corporation owned,  directly or indirectly,  by
        the shareowners of the Company in substantially  the same proportions as
        their  ownership  of stock in the Company  ("Excluded  Persons"))  is or
        becomes the Beneficial Owner,  directly or indirectly,  of securities of
        the Company (not including in the securities  beneficially owned by such
        Person  any  securities  acquired  directly  from  the  Company  or  its
        Affiliates after November 18, 1998, pursuant to express authorization by
        the Board that  refers to this  exception)  representing  20% or more of
        either the then outstanding shares of common stock of the Company or the
        combined  voting  power  of  the  Company's  then   outstanding   voting
        securities; or

                (ii)  the  following   individuals   cease  for  any  reason  to
        constitute  a majority of the number of  directors  of the Company  then
        serving:  (A)  individuals  who, on November 18, 1998,  constituted  the
        Board and (B) any new  director  (other  than a director  whose  initial
        assumption of

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<PAGE>


        office is in connection with an actual or threatened  election  contest,
        including  but not  limited to a consent  solicitation,  relating to the
        election of  directors  of the  Company,  as such terms are used in Rule
        14a-11 of Regulation 14A under the Act) whose appointment or election by
        the Board or nomination  for election by the Company's  shareowners  was
        approved by a vote of at least  two-thirds  (2/3) of the directors  then
        still in office who either were directors on November 18, 1998, or whose
        appointment,  election or  nomination  for  election was  previously  so
        approved (collectively the "Continuing Directors");  provided,  however,
        that  individuals  who are  appointed  to the  Board  pursuant  to or in
        accordance  with  the  terms  of  an  agreement  relating  to a  merger,
        consolidation, or share exchange involving the Company (or any direct or
        indirect  subsidiary of the Company)  shall not be Continuing  Directors
        for purposes of this Agreement  until after such  individuals  are first
        nominated  for  election by a vote of at least  two-thirds  (2/3) of the
        then Continuing Directors and are thereafter elected as directors by the
        shareowners  of the Company at a meeting of  shareowners  held following
        consummation  of such merger,  consolidation,  or share  exchange;  and,
        provided  further,  that in the event the  failure  of any such  persons
        appointed to the Board to be Continuing Directors results in a Change in
        Control of the Company, the subsequent  qualification of such persons as
        Continuing  Directors  shall not alter the fact that a Change in Control
        of the Company occurred; or



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                (iii)  the   shareowners  of  the  Company   approve  a  merger,
        consolidation   or  share   exchange  of  the  Company  with  any  other
        corporation or approve the issuance of voting  securities of the Company
        in  connection  with a merger,  consolidation  or share  exchange of the
        Company (or any direct or indirect  subsidiary of the Company)  pursuant
        to  applicable  stock  exchange  requirements,  other than (A) a merger,
        consolidation  or  share  exchange  which  would  result  in the  voting
        securities of the Company outstanding  immediately prior to such merger,
        consolidation  or share  exchange  continuing  to  represent  (either by
        remaining  outstanding or by being  converted into voting  securities of
        the surviving entity or any parent thereof) at least 50% of the combined
        voting power of the voting  securities of the Company or such  surviving
        entity or any parent thereof outstanding  immediately after such merger,
        consolidation or share exchange, or (B) a merger, consolidation or share
        exchange  effected to  implement a  recapitalization  of the Company (or
        similar  transaction) in which no Person (other than an Excluded Person)
        is  or  becomes  the  Beneficial  Owner,  directly  or  indirectly,   of
        securities of the Company (not including in the securities  beneficially
        owned by such Person any securities  acquired  directly from the Company
        or  its  Affiliates  after  November  18,  1998,   pursuant  to  express
        authorization  by the Board that refers to this exception)  representing
        20% or more of either the then outstanding shares of common stock of the
        Company or the combined  voting power of the Company's then  outstanding
        voting securities; or


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<PAGE>

                (iv) the  shareowners of the Company  approve a plan of complete
        liquidation  or  dissolution of the Company or an agreement for the sale
        or  disposition  by  the  Company  of all  or  substantially  all of the
        Company's assets (in one transaction or a series of related transactions
        within  any  period  of 24  consecutive  months),  other  than a sale or
        disposition by the Company of all or substantially  all of the Company's
        assets to an entity at least  75% of the  combined  voting  power of the
        voting  securities  of which are owned by Persons in  substantially  the
        same proportions as their ownership of the Company  immediately prior to
        such sale.


Notwithstanding  the  foregoing,  no "Change in Control of the Company" shall be
deemed to have occurred if there is  consummated  any  transaction  or series of
integrated  transactions  immediately  following which the record holders of the
common stock of the Company  immediately  prior to such transaction or series of
transactions continue to own, directly or indirectly, in the same proportions as
their ownership in the Company,  an entity that owns all or substantially all of
the  assets or voting  securities  of the  Company  immediately  following  such
transaction or series of transactions. 

        (f) Code.  For  purposes of this  Agreement,  the term "Code"  means the
Internal Revenue Code of 1986, including any amendments thereto or successor tax
codes thereof.

        (g) Covered Termination. Subject to Subsection 2(b) hereof, for purposes
of this Agreement,  the term "Covered  Termination" means any termination of the
Executive's  employment  during  the  Employment  Period  where  the  Notice  of
Termination is delivered on or the Termination Date is any date prior to the end
of the Employment Period.

        (h) Employment  Period.  Subject to Subsection 2(b) hereof, for purposes
of this Agreement, the term "Employment Period" means a period commencing on the


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date of a Change in Control  of the  Company,  and ending at 11:59 p.m.  Central
Time on the  earlier of the third  anniversary  of such date or the  Executive's
Normal Retirement Date.

        (i) Good Reason.  For purposes of this  Agreement,  the Executive  shall
have "Good Reason" for  termination of employment in connection with a Change in
Control of the Company in the event of:

                (i) any  breach of this  Agreement  by the  Employer,  including
        specifically  any breach by the Employer of the agreements  contained in
        Sections 4, 5, and 6 hereof,  other than an isolated,  insubstantial and
        inadvertent  failure  not  occurring  in bad  faith  that  the  Employer
        remedies   promptly  after  receipt  of  notice  thereof  given  by  the
        Executive;

                (ii) any reduction in the Executive's base salary, percentage of
        base salary available as incentive  compensation or bonus opportunity or
        benefits, in each case relative to those most favorable to the Executive
        in effect at any time during the 180-day  period  prior to the Change in
        Control  or, to the extent more  favorable  to the  Executive,  those in
        effect at any time during the Employment Period;

                (iii) the  removal  of the  Executive  from,  or any  failure to
        reelect or reappoint the  Executive  to, any of the positions  held with
        the  Employer on the date of the Change in Control of the Company or any
        other   positions  with  the  Employer  to  which  the  Executive  shall
        thereafter be elected,  appointed or assigned,  except in the event that
        such  removal  or  failure  to  reelect  or  reappoint  relates  to  the
        termination by the Employer of

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<PAGE>


the  Executive's  employment  for Cause or by reason of  disability  pursuant to
Section 12 hereof;

                (iv) a good faith  determination by the Executive that there has
        been a  significant  adverse  change,  without the  Executive's  written
        consent,  in the  Executive's  working  conditions  or  status  with the
        Employer relative to the most favorable working  conditions or status in
        effect  during the 180-day  period prior to the Change in Control of the
        Company,  or, to the extent more  favorable to the  Executive,  those in
        effect at any time  during  the  Employment  Period,  including  but not
        limited  to (A) a  significant  change  in the  nature  or  scope of the
        Executive's authority, powers, functions, duties or responsibilities, or
        (B) a  significant  reduction in the level of support  services,  staff,
        secretarial and other  assistance,  office space and  accoutrements  but
        excluding for this purpose an isolated,  insubstantial  and  inadvertent
        event not  occurring  in bad faith that the Employer  remedies  promptly
        after receipt of notice thereof given by the Executive;

                (v) failure by the Company to obtain the  Agreement  referred to
        in Section 17(a) hereof as provided therein; or

                (vi) any  voluntary  termination  of employment by the Executive
        where  the  Notice  of  Termination  is  delivered  during  the 30  days
        following the first anniversary of the Change in Control of the Company.

        (j) Normal  Retirement  Date. For purposes of this  Agreement,  the term
"Normal  Retirement  Date"  means  "Normal  Retirement  Date" as  defined in the
primary qualified defined  benefit pension

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plan  applicable to the  Executive,  or any successor  plan, as in effect on the
date of the Change in Control of the Company. 

        (k) Person. For purposes of this Agreement, the term "Person" shall mean
any individual,  firm, partnership,  corporation or other entity,  including any
successor  (by merger or  otherwise)  of such  entity,  or a group of any of the
foregoing acting in concert.

        (l)  Termination  Date.  For  purposes  of  this  Agreement,  except  as
otherwise  provided in Subsection 2(b),  Subsection  10(b), and Subsection 17(a)
hereof, the term "Termination  Date" means (i) if the Executive's  employment is
terminated by the Executive's  death, the date of death; (ii) if the Executive's
employment is terminated by reason of voluntary early  retirement,  as agreed in
writing by the Employer  and the  Executive,  the date of such early  retirement
which  is set  forth  in  such  written  agreement;  (iii)  if  the  Executive's
employment is terminated  for purposes of this Agreement by reason of disability
pursuant  to Section 12 hereof,  the  earlier of thirty days after the Notice of
Termination is given or one day prior to the end of the Employment Period;  (iv)
if the Executive's  employment is terminated by the Executive voluntarily (other
than for Good Reason),  the date the Notice of Termination is given;  and (v) if
the  Executive's  employment is terminated by the Employer (other than by reason
of  disability  pursuant  to Section 12  hereof)  or by the  Executive  for Good
Reason,  the earlier of thirty days after the Notice of  Termination is given or
one  day  prior  to the  end  of  the  Employment  Period.  Notwithstanding  the
foregoing,


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              (1) If termination  is for Cause pursuant to Subsection  1(d)(iii)
       of this Agreement and if the Executive has cured the conduct constituting
       such Cause as  described  by the  Employer  in its Notice of  Termination
       within such thirty-day or shorter period, then the Executive's employment
       hereunder  shall continue as if the Employer had not delivered its Notice
       of Termination.

                (2) If the  Executive  shall  in good  faith  give a  Notice  of
        Termination for Good Reason and the Employer notifies the Executive that
        a dispute  exists  concerning  the  termination  within the  fifteen-day
        period  following  receipt  thereof,  then the  Executive  may  elect to
        continue his or her employment  during such dispute and the  Termination
        Date shall be  determined  under this  paragraph.  If the  Executive  so
        elects and it is thereafter  determined that Good Reason did exist,  the
        Termination  Date  shall be the  earliest  of (i) the date on which  the
        dispute is finally determined, either (x) by mutual written agreement of
        the parties or (y) in accordance  with Section 22 hereof,  (ii) the date
        of the  Executive's  death  or  (iii)  one day  prior  to the end of the
        Employment  Period.  If the  Executive  so elects  and it is  thereafter
        determined  that Good Reason did not exist,  then the  employment of the
        Executive  hereunder shall continue after such  determination  as if the
        Executive  had not delivered the Notice of  Termination  asserting  Good
        Reason  and  there  shall be no  Termination  Date  arising  out of such
        Notice. In either case, this Agreement continues,  until the Termination
        Date,  if any,  as if the  Executive  had not  delivered  the  Notice of
        Termination  except that, if it is finally  determined  that Good Reason
        did  exist,  the  Executive  shall  in no case be  denied  the  benefits
        described  in  Subsection  8(b)  and  Section  9  hereof   (including  a
        Termination


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        Payment)  based on events  occurring  after the Executive  delivered his
        Notice of Termination.

                (3) Except as provided in Subsection 1(l)(2) above, if the party
        receiving  the Notice of  Termination  notifies  the other  party that a
        dispute exists concerning the termination  within the appropriate period
        following  receipt thereof and it is finally  determined that the reason
        asserted in such Notice of Termination  did not exist,  then (i) if such
        Notice was delivered by the  Executive,  the Executive will be deemed to
        have  voluntarily  terminated his employment  and the  Termination  Date
        shall be the  earlier  of the date  fifteen  days  after  the  Notice of
        Termination  is  given  or one day  prior  to the end of the  Employment
        Period and (ii) if delivered by the Company,  the Company will be deemed
        to have  terminated  the  Executive  other  than  by  reason  of  death,
        disability or Cause.

        2.      Termination or Cancellation Prior to Change in Control.

        (a) Subject to  Subsection  2(b) hereof,  the Employer and the Executive
shall each retain the right to terminate the  employment of the Executive at any
time prior to a Change in Control of the  Company.  Subject to  Subsection  2(b)
hereof, in the event the Executive's  employment is terminated prior to a Change
in Control of the Company,  this Agreement shall be terminated and cancelled and
of no further force and effect,  and any and all rights and  obligations  of the
parties hereunder shall cease.

        (b) Anything in this  Agreement to the  contrary  notwithstanding,  if a
Change in Control of the Company occurs and if the  Executive's  employment with
the Employer is terminated (other than a termination due to the Executive's


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death or as a result of the  Executive's  disability)  during  the period of 180
days prior to the date on which the Change in Control of the Company occurs, and
if it is reasonably  demonstrated  by the  Executive  that such  termination  of
employment  (i)  was at the  request  of a  third  party  who  has  taken  steps
reasonably  calculated  to effect a Change in  Control  of the  Company  or (ii)
otherwise  arose in connection with or in anticipation of a Change in Control of
the  Company,  then for all  purposes  of this  Agreement  such  termination  of
employment  shall be deemed a "Covered  Termination,"  "Notice  of  Termination"
shall be deemed to have been given, and the "Employment  Period" shall be deemed
to have begun on the date of such  termination  which  shall be deemed to be the
"Termination  Date" and the date of the  Change of Control  of the  Company  for
purposes of this Agreement.


        3. Employment  Period. If a Change in Control of the Company occurs when
the Executive is employed by the Employer, the Employer will continue thereafter
to employ the Executive  during the  Employment  Period,  and the Executive will
remain in the employ of the Employer in accordance with and subject to the terms
and provisions of this Agreement.  Any termination of the Executive's employment
during the Employment Period,  whether by the Company or the Employer,  shall be
deemed a termination by the Company for purposes of this Agreement.

 4. Duties. During the Employment Period,
the Executive  shall, in the same capacities and positions held by the Executive
at the time of the Change in Control of the Company or in such other  capacities
and  positions as may be agreed to by the Employer and the Executive in writing,
devote the Executive's  best efforts and all of the  Executive's  business time,
attention  and  skill to the  business  and  affairs  of the  Employer,  as such
business  and  affairs now exist and as they may  hereafter  be  conducted.  The
services which are to be performed by the Executive hereunder are to be rendered
in the same metropolitan area in which the Executive was employed at the date


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of such  Change in Control of the  Company,  or in such other place or places as
shall be mutually  agreed upon in writing by the Executive and the Employer from
time to time.  Without  the  Executive's  consent,  the  Executive  shall not be
required  to be  absent  from  such  metropolitan  area more than 45 days in any
fiscal year of the Company.

        5.  Compensation.  During the Employment  Period, the Executive shall be
compensated as follows:

        (a) The Executive shall receive,  at reasonable  intervals (but not less
often than monthly) and in accordance  with such standard  policies as may be in
effect immediately prior to the Change in Control of the Company, an annual base
salary in cash equivalent of not less than twelve times the Executive's  highest
monthly base salary for the twelve-month period immediately  preceding the month
in which the Change in Control of the Company occurs or, if higher,  annual base
salary at the rate in effect  immediately  prior to the Change in Control of the
Company  (which base salary  shall,  unless  otherwise  agreed in writing by the
Executive,  include the current  receipt by the Executive of any amounts  which,
prior to the Change in Control of the  Company,  the  Executive  had  elected to
defer, whether such compensation is deferred under Section 401(k) of the Code or
otherwise),  subject to  adjustment as  hereinafter  provided in Section 6 (such
salary amount as adjusted  upward from time to time is hereafter  referred to as
the "Annual Base Salary").

        (b) The Executive  shall receive fringe benefits at least equal in value
to the highest  value of such  benefits  provided for the  Executive at any time
during  the  180-day  period  immediately  prior to the Change in Control of the
Company or, if more favorable to the Executive,  those provided generally at any
time  during  the  Employment  Period  to  any  executives  of the  Employer  of
comparable  status and position to the Executive;  and shall be  reimbursed,  at
such intervals and in accordance with

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such  standard  policies that are most  favorable to the Executive  that were in
effect at any time during the 180-day period  immediately prior to the Change in
Control of the Company,  for any and all monies  advanced in connection with the
Executive's  employment for reasonable  and necessary  expenses  incurred by the
Executive  on  behalf  of the  Employer,  including  travel  expenses. 

        (c) The Executive  and/or the  Executive's  family,  as the case may be,
shall be included,  to the extent eligible  thereunder (which  eligibility shall
not be conditioned on the Executive's  salary grade or on any other  requirement
which  excludes  persons  of  comparable  status to the  Executive  unless  such
exclusion was in effect for such plan or an  equivalent  plan at any time during
the 180-day period  immediately  prior to the Change in Control of the Company),
in any and all plans providing benefits for the Employer's salaried employees in
general,  including  but not limited to group life  insurance,  hospitalization,
medical, dental, profit sharing and stock bonus plans; provided, that, (i) in no
event  shall the  aggregate  level of  benefits  under  such  plans in which the
Executive is included be less than the aggregate  level of benefits  under plans
of the  Employer of the type  referred to in this  Subsection  5(c) in which the
Executive was  participating  at any time during the 180-day period  immediately
prior to the  Change in Control of the  Company  and (ii) in no event  shall the
aggregate level of benefits under such plans be less than the aggregate level of
benefits under plans of the type referred to in this Subsection 5(c) provided at
any time  after the Change in Control  of the  Company to any  executive  of the
Employer of comparable status and position to the Executive.

        (d) The Executive shall annually be entitled to not less than the amount
of paid vacation and not fewer than the highest number of paid holidays to which
the  Executive  was  entitled  annually at any time  during the  180-day  period
immediately prior to the Change in Control


                                      -16-
<PAGE>

of the  Company  or such  greater  amount of paid  vacation  and  number of paid
holidays as may be made available  annually to other  executives of the Employer
of  comparable  status and  position  to the  Executive  at any time  during the
Employment Period.

        (e) The Executive  shall be included in all plans  providing  additional
benefits to executives of the Employer of comparable  status and position to the
Executive, including but not limited to deferred compensation, split-dollar life
insurance,  supplemental  retirement,  stock option,  stock appreciation,  stock
bonus and similar or comparable plans; provided, that, (i) in no event shall the
aggregate level of benefits under such plans be less than the highest  aggregate
level of benefits  under plans of the  Employer of the type  referred to in this
Subsection 5(e) in which the Executive was  participating at any time during the
180-day period  immediately prior to the Change in Control of the Company;  (ii)
in no event shall the aggregate  level of benefits under such plans be less than
the  aggregate  levels of benefits  under plans of the type  referred to in this
Subsection  5(e) provided at any time after the Change in Control of the Company
to any  executive  of the  Employer  comparable  in status and  position  to the
Executive; and (iii) the Employer's obligation to include the Executive in bonus
or incentive compensation plans shall be determined by Subsection 5(f) hereof.

        (f) To  assure  that the  Executive  will  have an  opportunity  to earn
incentive  compensation after a Change in Control of the Company,  the Executive
shall be  included  in a bonus plan of the  Employer  which  shall  satisfy  the
standards described below (such plan, the "Bonus Plan"). Bonuses under the Bonus
Plan shall be payable with respect to  achieving  such  financial or other goals
reasonably  related  to the  business  of the  Employer  as the  Employer  shall
establish  (the "Goals"),  all of which Goals shall be attainable,  prior to the
end of the Employment Period,  with approximately the same degree of probability
as the most attainable goals under the


                                      -17-
<PAGE>

Employer's  bonus  plan or plans as in effect  at any time  during  the  180-day
period immediately prior to the Change in Control of the Company (whether one or
more,  the  "Company  Bonus  Plan") and in view of the  Employer's  existing and
projected  financial  and business  circumstances  applicable  at the time.  The
amount of the bonus (the "Bonus  Amount") that the Executive is eligible to earn
under the Bonus Plan shall be no less than the amount of the Executive's maximum
award provided in such Company Bonus Plan (such bonus amount herein  referred to
as the "Targeted Bonus"),  and in the event the Goals are not achieved such that
the entire  Targeted  Bonus is not payable,  the Bonus Plan shall  provide for a
payment of a Bonus Amount equal to a portion of the  Targeted  Bonus  reasonably
related to that portion of the Goals which were  achieved.  Payment of the Bonus
Amount shall not be affected by any circumstance occurring subsequent to the end
of the Employment Period, including termination of the Executive's employment.

        6. Annual  Compensation  Adjustments.  During the Employment Period, the
Board of Directors of the Company (or an  appropriate  committee  thereof)  will
consider and appraise, at least annually,  the contributions of the Executive to
the Company,  and in accordance with the Company's  practice prior to the Change
in  Control  of the  Company,  due  consideration  shall be given to the  upward
adjustment  of the  Executive's  Annual  Base  Salary,  at least  annually,  (i)
commensurate  with increases  generally given to other executives of the Company
of comparable status and position to the Executive, and (ii) as the scope of the
Company's operations or the Executive's duties expand.

        7.  Termination For Cause or Without Good Reason.  If there is a Covered
Termination for Cause or due to the Executive's  voluntarily  terminating his or
her employment  other than for Good Reason (any such  terminations to be subject
to the procedures set forth in

                                      -18-
<PAGE>


Section 13 hereof), then the Executive shall be entitled to receive only Accrued
Benefits pursuant to Section 9(a) hereof.

        8. Termination Giving Rise to a Termination  Payment.  (a) If there is a
Covered  Termination  by the Executive for Good Reason,  or by the Company other
than by reason of (i) death,  (ii) disability  pursuant to Section 12 hereof, or
(iii) Cause (any such  terminations to be subject to the procedures set forth in
Section 13 hereof),  then the  Executive  shall be entitled to receive,  and the
Company shall promptly pay, Accrued Benefits and, in lieu of further base salary
for periods following the Termination Date, as liquidated damages and additional
severance pay and in consideration of the covenant of the Executive set forth in
Subsection  14(a) hereof,  the Termination  Payment  pursuant to Subsection 9(b)
hereof.

        (b) If there is a Covered  Termination  and the Executive is entitled to
Accrued Benefits and the Termination Payment,  then the Company shall provide to
the Executive the following additional benefits:

                (i) The Executive shall receive,  at the expense of the Company,
        outplacement  services, on an individualized basis at a level of service
        commensurate  with the Executive's  status with the Company  immediately
        prior to the date of the  Change  in  Control  of the  Company  (or,  if
        higher,   immediately  prior  to  the  termination  of  the  Executive's
        employment),  provided by a nationally  recognized  executive  placement
        firm  selected by the Company;  provided that the cost to the Company of
        such  services  shall not  exceed  10% of the  Executive's  Annual  Base
        Salary.

                (ii) Until the  earlier of the end of the  Employment  Period or
        such time as the Executive has obtained new employment and is covered by
        benefits which in the aggregate are at least equal in value to the


                                      -19-
<PAGE>
                                      

 
following  benefits,  the Executive shall continue to be covered, at the expense
of the  Company,  by the same or  equivalent  life  insurance,  hospitalization,
medical  and dental  coverage  as was  required  hereunder  with  respect to the
Executive  immediately  prior to the date the  Notice of  Termination  is given.


(iii) The Company shall cause the Executive to be fully and  immediately  vested
in his accrued benefit under any supplemental  executive  retirement plan of the
Employer  providing  benefits for the Executive  (the "SERP") and in any defined
contribution  retirement  plan of the Employer.  In addition,  the Company shall
cause the Executive to be deemed to have  satisfied any minimum years of service
requirement under the SERP for subsidized early retirement  benefits  regardless
of the Executive's age and service at the Termination Date;  provided,  however,
that SERP benefits  will be based on service to date with no  additional  credit
for service or age beyond such  Termination  Date.  

                (iv) The Company  shall  cause all  restrictions  on  restricted
        stock awards made to the  Executive to lapse such that the  Executive is
        fully and immediately vested in his or her restricted stock.

                (v) The  Company  shall cause all stock  options  granted to the
        Executive  pursuant to the  Company's  stock option  plan(s) to be fully
        vested.

                (vi) The Company shall cause all performance plan awards granted
        to the Executive pursuant to any long-term  incentive plan 


                                      -20-
<PAGE>

        maintained  by  the  Company  to be  paid  out  at  target,  as  if  all
        performance  requirements had been satisfied,  on a pro rata basis based
        on the  completed  portion of each award cycle;  provided,  however,  no
        payment of plan  awards will occur from any award cycle that has been in
        effect less than six (6) months.

                (vii)  The  Company  shall  reimburse  the  Executive  for up to
        $15,000 in tax preparation assistance fees for the tax year in which the
        Termination Payment is made.


 9. Payments  Upon  Termination. 

        (a) Accrued  Benefits.  For purposes of this Agreement,  the Executive's
"Accrued  Benefits"  shall include the following  amounts,  payable as described
herein:  (i) all base  salary for the time period  ending  with the  Termination
Date; (ii)  reimbursement for any and all monies advanced in connection with the
Executive's  employment for reasonable  and necessary  expenses  incurred by the
Executive  on  behalf  of the  Employer  for the  time  period  ending  with the
Termination  Date;  (iii) any and all other cash earned through the  Termination
Date and deferred at the  election of the  Executive or pursuant to any deferred
compensation  plan  then in  effect;  (iv) a lump sum  payment  of the  bonus or
incentive  compensation  otherwise  payable to the Executive with respect to the
year in which termination occurs under all bonus or incentive  compensation plan
or plans in which the Executive is a participant; and (v) all other payments and
benefits to which the Executive (or in the event of the Executive's  death,  the
Executive's   surviving  spouse  or  other   beneficiary)  may  be  entitled  as
compensatory  fringe  benefits  or under the terms of the  Employment  Agreement
dated as of March 29, 1999 between the Company and the  Executive or any benefit
plan of the Employer,  excluding severance payments under any Employer severance
policy, practice or


                                      -21-
<PAGE>

agreement in effect  immediately  prior to the Change in Control of the Company.
Payment  of Accrued  Benefits  shall be made  promptly  in  accordance  with the
Company's  prevailing  practice with respect to Subsections 9(a)(i) and (ii) or,
with respect to Subsections  9(a)(iii),  (iv) and (v),  pursuant to the terms of
the benefit plan or practice establishing such benefits.

        (b) Termination Payment.


                (i) The Termination  Payment shall be an amount equal to (A) the
        Executive's  Annual Base Salary (determined as of the time of the Change
        in Control of the Company or, if higher,  immediately  prior to the date
        the  Notice of  Termination  is given)  plus (B) an amount  equal to the
        greater  of the  Executive's  target  bonus  for the year in  which  the
        Termination Date occurs or the bonus the Executive  received in the year
        prior to the Change in Control of the Company (the aggregate  amount set
        forth in (A) and (B) hereof  shall  hereafter  be referred to as "Annual
        Cash Compensation"), times (C) the number of years or fractional portion
        thereof  remaining  in  the  Employment  Period  determined  as  of  the
        Termination Date; provided,  however, that such amount shall not be less
        than the  greater  of (i) the  amount  of the  Executive's  Annual  Cash
        Compensation or (ii) the severance benefits to which the Executive would
        have been entitled under the Company's  severance policies and practices
        in effect immediately prior to the Change in Control of the Company. The
        Termination  Payment shall be paid to the  Executive in cash  equivalent
        ten (10) business days after the Termination Date. Such lump sum payment
        shall not be reduced by any  present  value or similar  factor,  and the
        Executive shall not be required to

                                      -22-
<PAGE>

        mitigate  the  amount  of the  Termination  Payment  by  securing  other
        employment or otherwise, nor will such Termination Payment be reduced by
        reason  of the  Executive  securing  other  employment  or for any other
        reason.  The Termination  Payment shall be in lieu of, and acceptance by
        the  Executive  of  the   Termination   Payment  shall   constitute  the
        Executive's  release of any rights of Executive to, any other  severance
        payments under any Company severance policy, practice or agreement.  The
        Company  shall bear up to $10,000 in the  aggregate of fees and expenses
        of  consultants  and/or  legal or  accounting  advisors  engaged  by the
        Executive  to  advise  the  Executive  as to  matters  relating  to  the
        computation of benefits due and payable under this Subsection 9(b).

                (ii)  Notwithstanding any other provision of this Agreement,  if
        any  portion of any  payment  under this  Agreement,  or under any other
        agreement  with  or  plan  of the  Employer  (in  the  aggregate  "Total
        Payments"),  would constitute an "excess parachute payment," the Company
        shall pay Executive an additional  amount (the "Gross-Up  Payment") such
        that the net amount  retained by Executive after deduction of any excise
        tax imposed  under  Section 4999 of the Code,  any  interest  charges or
        penalties in respect of the  imposition  of such excise tax (but not any
        federal,  state or local  income  tax, or  employment  tax) on the Total
        Payments,  and any federal,  state and local income tax, employment tax,
        and  excise  tax  upon  the  payment  provided  for by  this  Subsection
        9(b)(ii),  shall  be  equal  to the  Total  Payments.  For  purposes  of
        determining the amount of the Gross-Up


                                      -23-
<PAGE>

        Payment,  Executive  shall  be  deemed  to pay  federal  income  tax and
        employment  taxes at the  highest  marginal  rate of federal  income and
        employment  taxation in the calendar year in which the Gross-Up  Payment
        is to be made and state and local income  taxes at the highest  marginal
        rate of taxation in the state and locality of  Executive's  domicile for
        income tax purposes on the date the Gross-Up Payment is made, net of the
        maximum  reduction in federal income taxes that may be obtained from the
        deduction of such state and local taxes.


                (iii)  For  purposes  of  this  Agreement,   the  terms  "excess
        parachute  payment"  and  "parachute  payments"  shall have the meanings
        assigned  to them  in  Section  280G of the  Code  and  such  "parachute
        payments"  shall be  valued  as  provided  therein.  Present  value  for
        purposes  of this  Agreement  shall be  calculated  in  accordance  with
        Section  1274(b)(2) of the Code (or any successor  provision).  Promptly
        following  a  Covered  Termination  or  notice  by  the  Company  to the
        Executive  of its belief  that  there is a payment  or  benefit  due the
        Executive which will result in an excess parachute payment as defined in
        Section  280G  of the  Code,  the  Executive  and  the  Company,  at the
        Company's  expense,   shall  obtain  the  opinion  (which  need  not  be
        unqualified)  of  nationally   recognized  tax  counsel  ("National  Tax
        Counsel") selected by the Company's  independent auditors and reasonably
        acceptable to the Executive (which may be regular outside counsel to the
        Company),  which  opinion  sets forth (i) the amount of the Base  Period
        Income, (ii) the amount and present value of Total Payments,


                                      -24-
<PAGE>

        (iii) the amount and present value of any excess parachute payments, and
        (iv) the amount of any Gross-Up Payment. As used in this Agreement,  the
        term  "Base  Period  Income"  means an amount  equal to the  Executive's
        "annualized  includible  compensation for the base period" as defined in
        Section 280G(d)(1) of the Code. For purposes of such opinion,  the value
        of any noncash  benefits  or any  deferred  payment or benefit  shall be
        determined by the Company's  independent auditors in accordance with the
        principles of Section  280G(d)(3)  and (4) of the Code (or any successor
        provisions),  which determination shall be evidenced in a certificate of
        such auditors addressed to the Company and the Executive. The opinion of
        National Tax Counsel shall be addressed to the Company and the Executive
        and  shall  be  binding  upon the  Company  and the  Executive.  If such
        National Tax Counsel so requests in connection with the opinion required
        by this  Subsection  9(b) of Section 9, the  Executive  and the  Company
        shall obtain, at the Company's expense, and the National Tax Counsel may
        rely on,  the  advice  of a firm of  recognized  executive  compensation
        consultants as to the  reasonableness  of any item of compensation to be
        received  by the  Executive  solely  with  respect to its  status  under
        Section 280G of the Code and the regulations thereunder. Within five (5)
        days after the National Tax Counsel's opinion is received by the Company
        and the  Executive,  the  Company  shall  pay (or  cause  to be paid) or
        distribute  (or  cause  to be  distributed)  to or for  the  benefit  of
        Executive  such  amounts  as  are  then  due  to  Executive  under  this
        Agreement.

                                      -25-
<PAGE>

                (iv) In the event  that upon any audit by the  Internal  Revenue
        Service, or by a state or local taxing authority,  of the Total Payments
        or Gross-Up  Payment,  a change is finally  determined to be required in
        the amount of taxes paid by Executive,  appropriate adjustments shall be
        made under this  Agreement  such that the net amount which is payable to
        the Executive  after taking into account the  provisions of Section 4999
        of the Code shall reflect the intent of the parties as expressed in this
        Section 9, in the manner determined by the National Tax Counsel.

                (v) The Company agrees to bear all costs associated with, and to
        indemnify  and hold  harmless,  the National Tax Counsel of and from any
        and all claims,  damages, and expenses resulting from or relating to its
        determinations  pursuant  to this  Subsection  9(b),  except for claims,
        damages  or  expenses  resulting  from the gross  negligence  or willful
        misconduct of such firm.

        10.  Death.  (a) Except as provided in Subsection  10(b) hereof,  in the
event of a Covered  Termination  due to the Executive's  death,  the Executive's
estate,  heirs and  beneficiaries  shall  receive  all the  Executive's  Accrued
Benefits through the Termination Date.

        (b) In the event the  Executive  dies after a Notice of  Termination  is
given  (i) by the  Company  or  (ii)  by the  Executive  for  Good  Reason,  the
Executive's  estate,  heirs and beneficiaries  shall be entitled to the benefits
described in  Subsection  10(a) hereof and,  subject to the  provisions  of this
Agreement, to such Termination Payment as the Executive would have been entitled
to had  the  Executive  lived.  For  purposes  of  this  Subsection  10(b),  the
Termination Date shall be the earlier of thirty days following the giving of the
Notice of Termination, subject to

                                      -26-
<PAGE>

extension pursuant to Subsection 1(l) hereof, or one day prior to the end of the
Employment Period.

        11. Retirement.  If, during the Employment Period, the Executive and the
Employer  shall execute an agreement  providing for the early  retirement of the
Executive from the Employer,  or the Executive  shall otherwise give notice that
he is  voluntarily  choosing to retire early from the  Employer,  the  Executive
shall receive Accrued Benefits through the Termination Date;  provided,  that if
the Executive's  employment is terminated by the Executive for Good Reason or by
the Company other than by reason of death, disability or Cause and the Executive
also, in connection with such  termination,  elects voluntary early  retirement,
the Executive shall also be entitled to receive a Termination  Payment  pursuant
to Subsection 8(a) hereof.

        12.  Termination for Disability.  If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless  of whether such illness or injury is  job-related),  the  Executive
shall have been  absent from the  Executive's  duties  hereunder  on a full-time
basis for a period of six  consecutive  months and, within thirty days after the
Company  notifies the  Executive  in writing  that it intends to  terminate  the
Executive's  employment  (which  notice  shall  not  constitute  the  Notice  of
Termination  contemplated  below),  the Executive shall not have returned to the
performance  of the  Executive's  duties  hereunder  on a full-time  basis,  the
Company may terminate the Executive's  employment for purposes of this Agreement
pursuant to a Notice of Termination  given in accordance with Section 13 hereof.
If the  Executive's  employment  is  terminated  on account  of the  Executive's
disability in accordance with this Section,  the Executive shall receive Accrued
Benefits in accordance with Subsection 9(a) hereof and shall remain eligible for
all  benefits  provided by any long term  disability  programs of the Company in
effect at the time of such termination.


                                      -27-
<PAGE>

        13.  Termination  Notice and Procedure.  Any Covered  Termination by the
Company or the Executive (other than a termination of the Executive's employment
that is a Covered  Termination  by virtue of  Subsection  2(b) hereof)  shall be
communicated by a written notice of termination ("Notice of Termination") to the
Executive,  if such Notice is given by the Company,  and to the Company, if such
Notice  is  given  by  the  Executive,  all in  accordance  with  the  following
procedures and those set forth in Section 23 hereof:

        (a) If such  termination is for  disability,  Cause or Good Reason,  the
Notice  of  Termination  shall  indicate  in  reasonable  detail  the  facts and
circumstances alleged to provide a basis for such termination.

        (b) Any Notice of  Termination  by the Company shall have been approved,
prior to the giving thereof to the Executive,  by a resolution duly adopted by a
majority of the directors of the Company (or any successor  corporation) then in
office.

        (c) If the  Notice  is  given by the  Executive  for  Good  Reason,  the
Executive may cease performing his duties hereunder on or after the date fifteen
days after the  delivery of Notice of  Termination  and shall in any event cease
employment on the Termination Date. If the Notice is given by the Company,  then
the Executive may cease  performing his duties  hereunder on the date of receipt
of the Notice of Termination, subject to the Executive's rights hereunder.

        (d) The  Executive  shall have thirty days, or such longer period as the
Company may determine to be appropriate, to cure any conduct or act, if curable,
alleged to provide  grounds for  termination of the  Executive's  employment for
Cause under this Agreement pursuant to Subsection 1(d) (iii) hereof.


                                      -28-
<PAGE>

        (e) The recipient of any Notice of Termination shall personally  deliver
or mail in  accordance  with  Section 23 hereof  written  notice of any  dispute
relating to such Notice of  Termination  to the party giving such Notice  within
fifteen days after receipt thereof;  provided,  however, that if the Executive's
conduct or act  alleged to provide  grounds for  termination  by the Company for
Cause is curable, then such period shall be thirty days. After the expiration of
such period,  the contents of the Notice of  Termination  shall become final and
not subject to dispute.

        14. Further Obligations of the Executive.

        (a) Competition.  The Executive agrees that, in the event of any Covered
Termination  where  the  Executive  is  entitled  to  Accrued  Benefits  and the
Termination  Payment,  the Executive  shall not, for a period  expiring one year
after the Termination Date,  without the prior written approval of the Company's
Board of Directors,  participate in the management of, be employed by or own any
business  enterprise  at a location  within the United  States  that  engages in
substantial  competition  with  the  Company  or its  subsidiaries,  where  such
enterprise's  revenues from any competitive  activities amount to 10% or more of
such enterprise's net revenues and sales for its most recently  completed fiscal
year;  provided,  however,  that nothing in this Subsection 14(a) shall prohibit
the Executive from owning stock or other securities of a competitor amounting to
less than five percent of the outstanding capital stock of such competitor.

        (b)  Confidentiality.  During the Executive's  employment by the Company
and for a period of five (5)  years  thereafter,  the  Executive  shall  hold in
confidence and not directly or indirectly  disclose or use or copy or make lists
of any confidential  information or proprietary  data of the Company  (including
that of the Employer),  except to the extent  authorized in writing by the Board
of Directors of the Company or required by any court or  administrative  agency,
other  than to an  employee  of the  Company or a person to whom  disclosure  is
reasonably


                                      -29-
<PAGE>

necessary or appropriate in connection  with the performance by the Executive of
duties  as an  executive  of the  Company.  Confidential  information  shall not
include any  information  known  generally to the public or any information of a
type not  otherwise  considered  confidential  by  persons  engaged  in the same
business  or a business  similar to that of the  Company.  All  records,  files,
documents  and  materials,  or copies  thereof,  relating to the business of the
Company which the Executive  shall  prepare,  or use, or come into contact with,
shall be and remain  the sole  property  of the  Company  and shall be  promptly
returned to the Company upon termination of employment with the Company.

        15. Expenses and Interest. If, after a Change in Control of the Company,
(i) a dispute arises with respect to the enforcement of the  Executive's  rights
under  this  Agreement  or (ii) any  legal or  arbitration  proceeding  shall be
brought to enforce or interpret  any  provision  contained  herein or to recover
damages for breach  hereof,  in either case so long as, and to the extent  that,
the Executive prevails in such proceeding,  the Executive shall recover from the
Company the reasonable  attorneys'  fees and necessary  costs and  disbursements
incurred as a result of the dispute, legal or arbitration proceeding as to which
the Executive has prevailed ("Expenses"),  and prejudgment interest on any money
judgment or arbitration  award obtained by the Executive  calculated at the rate
of interest  announced by Firstar Bank Milwaukee,  N.A.,  Milwaukee,  Wisconsin,
from time to time at its prime or base lending rate from the date that  payments
to him or her should have been made under this Agreement.  Any dispute as to the
reasonableness  of the Expenses  incurred,  or the extent to which the Executive
has prevailed,  shall be resolved by the presiding officer (arbitrator or judge)
in the forum in which the substantive issues are finally resolved.

                                      -30-
<PAGE>

        16. Payment Obligations  Absolute.  The Company's  obligation during and
after the  Employment  Period to pay the  Executive  the amounts and to make the
benefit  and  other   arrangements   provided   herein  shall  be  absolute  and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim,  recoupment,  defense or other right which
the Company may have against him or anyone  else.  Except as provided in Section
15 of this Agreement, all amounts payable by the Company hereunder shall be paid
without  notice or demand.  Each and every payment made hereunder by the Company
shall be final, and the Company will not seek to recover all or any part of such
payment from the Executive,  or from whomsoever may be entitled thereto, for any
reason whatsoever.

        17.  Successors.  (a) If the Company sells,  assigns or transfers all or
substantially  all of its  business  and assets to any Person or if the  Company
merges into or  consolidates  or otherwise  combines (where the Company does not
survive  such  combination)  with  any  Person  (any  such  event,  a  "Sale  of
Business"),  then the Company shall assign all of its right,  title and interest
in this  Agreement as of the date of such event to such Person,  and the Company
shall cause such Person, by written  agreement in form and substance  reasonably
satisfactory to the Executive, to expressly assume and agree to perform from and
after the date of such  assignment  all of the terms,  conditions and provisions
imposed by this  Agreement  upon the  Company.  Failure of the Company to obtain
such  agreement  prior to the effective date of such Sale of Business shall be a
breach of this Agreement  constituting "Good Reason" hereunder,  except that for
purposes of implementing the foregoing the date upon which such Sale of Business
becomes  effective  shall  be  deemed  the  Termination  Date.  In  case of such
assignment  by the Company and of assumption  and  agreement by such Person,  as
used in this  Agreement,  "Company"  shall  thereafter  mean such  Person  which
executes  and delivers  the  agreement  provided for in this Section 17 or which
otherwise


                                      -31-
<PAGE>

  
becomes bound by all the terms and  provisions of this Agreement by operation of
law, and this Agreement  shall inure to the benefit of, and be  enforceable  by,
such Person.  The  Executive  shall,  in his or her  discretion,  be entitled to
proceed  against any or all of such Persons,  any Person which  theretofore  was
such a successor to the Company and the Company (as so defined) in any action to
enforce  any  rights of the  Executive  hereunder.  Except as  provided  in this
Subsection  17(a),  this Agreement shall not be assignable by the Company.  This
Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.  

        (b) This  Agreement and all rights of the  Executive  shall inure to the
benefit  of  and  be   enforceable   by  the   Executive's   personal  or  legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11, 12 and 15 hereof if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's  estate,  heirs and  representatives;  provided,  however,  that the
foregoing  shall not be construed to modify any terms of any benefit plan of the
Employer,  as such  terms are in effect on the date of the  Change in Control of
the Company,  that expressly govern benefits under such plan in the event of the
Executive's death.

        18. Severability.  The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or  unenforceable  by a  court  of  competent  jurisdiction,  the  validity  and
enforceability  of the  remainder  of such  provisions  or parts  hereof and the
applicability thereof shall not be affected thereby.

        19. Contents of Agreement;  Waiver of Rights; Amendment.  Except for the
Employment  Agreement  dated as of March 29,  1999  between  the Company and the
Executive,  this  Agreement  sets forth the  entire  understanding  between  the
parties hereto with respect to the subject matter hereof and shall  supersede in
all  respects,  and the Executive  hereby waives all rights under,  any prior or
other agreement or understanding

                                      -32-
<PAGE>


  
between the parties  with  respect to such subject  matter,  including,  but not
limited to the Key Executive Employment and Severance Agreement dated as of June
25,  1994  between  the Company and the  Executive.  This  Agreement  may not be
amended or  modified at any time  except by written  instrument  executed by the
Company and the Executive.

        20. Withholding.  The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding or
other  taxes or  charges  which it is from time to time  required  to  withhold;
provided,  that the  amount so  withheld  shall not exceed  the  minimum  amount
required  to be withheld  by law.  The  Company  shall be entitled to rely on an
opinion  of the  National  Tax  Counsel  if any  question  as to the  amount  or
requirement of any such withholding shall arise.

        21. Certain Rules of Construction. No party shall be considered as being
responsible  for the drafting of this  Agreement for the purpose of applying any
rule construing  ambiguities against the drafter or otherwise.  No draft of this
Agreement  shall be  taken  into  account  in  construing  this  Agreement.  Any
provision of this  Agreement  which  requires an  agreement in writing  shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.

        22. Governing Law; Resolution of Disputes. This Agreement and the rights
and obligations  hereunder shall be governed by and construed in accordance with
the laws of the State of Wisconsin.  Any dispute  arising out of this  Agreement
shall, at the Executive's election, be determined by arbitration under the rules
of the  American  Arbitration  Association  then in effect  (in which  case both
parties shall be bound by the arbitration  award) or by litigation.  Whether the
dispute  is to be  settled  by  arbitration  or  litigation,  the  venue for the
arbitration or litigation shall be

                                      -33-
<PAGE>

Madison, Wisconsin or, at the Executive's election, if the Executive is not then
residing or working in the Madison, Wisconsin metropolitan area, in the judicial
district encompassing the city in which the Executive resides;  provided,  that,
if the Executive is not then residing in the United States,  the election of the
Executive  with respect to such venue shall be either  Madison,  Wisconsin or in
the  judicial  district  encompassing  that city in the United  States among the
thirty cities having the largest  population  (as  determined by the most recent
United States Census data available at the Termination Date) which is closest to
the Executive's residence.  The parties consent to personal jurisdiction in each
trial  court  in  the  selected  venue  having   subject   matter   jurisdiction
notwithstanding their residence or situs, and each party irrevocably consents to
service of process in the manner provided hereunder for the giving of notices.

        23. Notice. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise  provided by Subsection  13(d) hereof,  shall be deemed
given when  actually  received  by the  Executive  or  actually  received by the
Company's  Corporate  Secretary  or any  officer of the  Company  other than the
Executive.  If mailed,  such notices shall be mailed by United States registered
or certified mail, return receipt requested, addressee only, postage prepaid, if
to  the  Company,   to  Interstate  Energy  Corporation  (d/b/a  Alliant  Energy
Corporation),  Attention: Corporate Secretary (or President, if the Executive is
then Corporate  Secretary),  222 West Washington Avenue, P.O. Box 2568, Madison,
Wisconsin 53701-2568, or if to the Executive, at the address set forth below the
Executive's  signature to this Agreement,  or to such other address as the party
to be notified shall have theretofore given to the other party in writing.

        24. No  Waiver.  No waiver by either  party at any time of any breach by
the other party of, or  compliance  with,  any  condition  or  provision of this
Agreement to be performed

                                      -34-
<PAGE>

 by the other party shall be deemed a waiver of similar or  dissimilar
provisions or conditions at the same time or any prior or subsequent  time. 

        25.  Headings.  The headings herein contained are for reference only and
shall  not  affect  the  meaning  or  interpretation  of any  provision  of this
Agreement.

        IN WITNESS  WHEREOF,  the parties have executed this Agreement as of the
day and year first above written. 

                                     INTERSTATE ENERGY CORPORATION



                                     By:              
                                         Its:         



                                     Attest:          
                                         Its:         



                                     EXECUTIVE:



                                     /s/Erroll B. Davis, Jr.              (SEAL)

                                     Address:                       


                                      -35-