Document:

exhibit.htm

    Exhibit 10.1

    

      INTEGRYS
        ENERGY GROUP, INC.

       

      PENSION
        RESTORATION AND

       

      SUPPLEMENTAL
        RETIREMENT PLAN

       

       

      

      As
        Amended and
        Restated Effective April 1, 2008

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      INTEGRYS
        ENERGY GROUP, INC.

       

      PENSION
        RESTORATION AND

       

      SUPPLEMENTAL
        RETIREMENT PLAN

      

      

      The
        Integrys Energy
        Group, Inc. Pension Restoration and Supplemental Retirement Plan (the “Plan”)
        was originally adopted effective January 1, 2001 as the WPS Resources
        Corporation Pension Restoration and Supplemental Retirement Plan.  The
        Plan name has been changed to reflect the change in the name of the plan
        sponsor
        from WPS Resources Corporation to Integrys Energy Group, Inc.
        (“Company”).   The Plan is intended to promote the best interests
        of the Company and its stockholders by attracting and retaining key management
        employees possessing a strong interest in the successful operation of the
        Company and its affiliates and by encouraging their continued loyalty, service
        and counsel to the Company and its affiliates.

      

      The
        Plan is amended
        and restated effective April 1, 2008, as set forth herein.

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      ARTICLE
        I.  DEFINITIONS
        AND CONSTRUCTION

      

      

      Section
        1.01.  Definitions.  The
        following
        terms have the meanings indicated below unless the context in which the term
        is
        used clearly indicates otherwise:

      

      (a)           
        Actuarial Equivalent or Actuarially Equivalent: A benefit of equivalent
        actuarial value, determined by assuming payment made or commencing on the
        Calculation Date and determined on the basis of the following interest and
        mortality assumptions:

      

      (1)       Pension
        Restoration Benefit.

      

      
        	
                 

              	
                (A)

              	
                For
                  purposes
                  of converting from a single sum payment to a single life annuity
                  without
                  survivor benefits (“SLA”), or from a SLA to a single sum payment, the
                  interest rate and mortality table specified under Part A or C of
                  the
                  Retirement Plan (whichever is applicable to the Participant) that
                  is
                  determined pursuant to Code Section 417(e)(3) and that is used
                  under the
                  Retirement Plan for purposes of converting a SLA into a single
                  sum benefit
                  amount or a single sum benefit amount into a SLA (the “417(e)(3) Rates”).
                  

              

      

      

      
        	
                 

              	
                (B)

              	
                For
                  purposes
                  of converting from a SLA to a one hundred eighty (180) month period
                  certain installment benefit, a seven percent (7%) interest rate
                  and the
                  1983 Group Annuity Mortality Table (Unisex).

              

      

      

      
        	
                 

              	
                (C)

              	
                For
                  purposes
                  of converting from a SLA to a joint and fifty percent (50%) surviving
                  Spouse annuity or to any optional form of annuity distribution
                  that is
                  

              

      

      
 

      
        
          
          

        

        
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                    available
                      to
                      the Participant, the interest, mortality or other factors that
                      would be
                      used for such purposes if the Pension Restoration Benefit were
                      being paid
                      under Part A or Part C of the Retirement Plan (whichever is
                      applicable to
                      the Participant. 

                  

          

           

        

      

      (2)       Supplemental
        Retirement Benefit.

      

      
        	
                 

              	
                (A)

              	
                For
                  purposes
                  of calculating the offset under Section 4.03(a)(2)(B), the 417(e)(3)
                  Rates. 

              

      

      

      
        	
                 

              	
                (B)

              	
                For
                  purposes
                  of converting from the one hundred eighty (180) month period certain
                  installment benefit to a single sum benefit, the interest rate
                  component
                  of the 417(e)(3) Rates, but with no mortality assumption or adjustment.
                  

              

      

      

      
        	
                 

              	
                (C)

              	
                For
                  purposes
                  of converting from the one hundred eighty (180) month period certain
                  installment benefit to an annuity benefit, or for purposes of the
                  early
                  commence reduction described in Section 6.02(a)(2)(B), a seven
                  percent
                  (7%) interest rate and the 1983 Group Annuity Mortality Table (Unisex).
                  

              

      

      

      (3)      Defined
        Contribution Restoration and SERP Benefit.

      

      
        	
                 

              	
                (A)

              	
                For
                  purposes
                  of converting from a single sum benefit to a SLA, the 417(e)(3)
                  Rates.
                  

              

      

      

      
        	
                 

              	
                (B)

              	
                For
                  purposes
                  of converting from a SLA to another form of annuity payment or
                  to a one
                  hundred eighty (180) month period certain installment benefit,
                  a
                  

              

      

       

       

      
        
          
          

        

        
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                  seven
                    percent
                    (7%) interest rate and the 1983 Group Annuity Mortality Table
                    (Unisex).
                    

                

        

         

      

      (b)           
        Affiliate: For all purposes of the Plan other than Article VI, a corporation,
        trade or business that, with the Company, constitutes a controlled group
        of
        corporations or a group of trades or businesses under common control within
        the
        meaning of Code Section 414(b) and (c); provided that Code Section 414(b)
        and
        (c) shall be applied by substituting “at least fifty percent (50%)” for “at
        least eighty percent (80%)” each place it appears therein.

      

      (c)           
        Applicable Account Balance: The Participant’s qualified and non-qualified plan
        balances, as of the Calculation Date applicable to the Participant, that
        are
        attributable to Employer Retirement Contributions and Special Defined
        Contribution Credits allocated to the Participant with respect to the 2013
–
2017 plan years, in all cases including any actual or deemed investment gains
        or
        losses on such contributions or credits.

      

      (d)           
        Beneficiary: The person or entity designated by a Participant to be his or
        her
        beneficiary for purposes any death benefit that may become payable under
        Sections 3.06 or 4.07. If a Participant designates his or her Spouse as a
        beneficiary, such beneficiary designation (to the extent it relates to the
        Spouse) shall become null and void on the date the Human Resources Department
        of
        the Company obtains actual notice of the Participant’s divorce or legal
        separation from such Spouse.  If a valid designation of beneficiary is
        not in effect at the time of the Participant’s death, the estate of the
        Participant is deemed to be the sole beneficiary.  If a beneficiary
        dies while entitled to receive distributions, any remaining payments shall
        be
        paid to the contingent beneficiary designated by the Participant.  If
        payments have been made to a beneficiary or beneficiaries following the
        Participant’s death and all beneficiaries and contingent beneficiaries
        designated by the Participant die prior to receiving all of the
        benefits
        payable on behalf of the Participant, any remaining payments due in accordance
        with the terms of the Plan shall be paid to the estate of the beneficiary
        or
        contingent beneficiary who last received payments under the Plan.  If
        all beneficiaries and contingent beneficiaries designated by the Participant
        die
        prior to receiving any payments
        from the
        Plan, any benefits payable on behalf of the Participant shall be paid to
        the
        estate of the Participant.  Beneficiary designations shall be in

       

      
        
          
          

        

        
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      writing,
        filed with
        the Committee, and in such form as the Committee may prescribe for this
        purpose.

      

      (e)           
        Board: The Board of Directors of the Company.

      

      (f)           
        Calculation Date: The first day of the month following the month in which
        occurs
        the Participant’s Separation from Service.

      

      (g)           
        Code: The Internal Revenue Code of 1986, as interpreted by regulations and
        rulings issued pursuant thereto, all as amended and in effect from time to
        time.
        Any reference to a specific provision of the Code shall be deemed to include
        a
        reference to any successor provision thereto.

      

      (h)           
        Committee: The Compensation Committee of the Board.

      

      (i)           
        Company: Integrys Energy Group, Inc., or any successor corporation.

      

      (j)           
        Credited Service: A Participant’s credited service for benefit accrual purposes
        that (1) with respect to periods prior to January 1, 2013, is recognized
        under
        the Retirement Plan for purposes of calculating the amount of the Participant’s
        benefit under that plan, and (2) with respect to periods after December 31,
        2012
        and before January 1, 2018, would have been recognized under the Retirement
        Plan
        if the Retirement Plan had continued to recognize benefit accrual
        service.  Employment after December 31, 2017 will not be recognized as
        Credited Service for purposes of this Plan.

      

      (k)           
        Employee: A common law employee of the Company or an Affiliate who is a
        management or highly compensated employee, as those terms are defined for
        purposes of the “top-hat” rules of ERISA.

      

      (l)           
        Employer Retirement Contributions: The non-elective contributions that are
        made
        by the Company or an Affiliate to a qualified defined contribution plan and
        that
        are not contingent upon the Participant having made contributions to such
        plan.

       

      
        
          
          

        

        
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      (m)           
        ERISA: The Employee Retirement Income Security Act of 1974, as interpreted
        by
        regulations and rulings issued pursuant thereto, all as amended and in effect
        from time to time. Any reference to a specific provision of ERISA shall be
        deemed to include a reference to any successor provision thereto.

      

      (n)           
        Participant: An Employee who has been designated by the Committee as being
        eligible to participate in the Integrys Energy Group, Inc. Nonqualified Deferred
        Compensation Plan (or any successor plan thereto); provided that the
        Supplemental Retirement Benefit component of the Plan is limited to those
        Employees who were designated for participation for that component prior
        to
        April 1, 2008. Effective April 1, 2008, no additional Employees will become
        Participants in the Supplemental Retirement Benefit component of the Plan.
        An
        Employee who has been designated as being eligible to participate in the
        Plan
        shall commence participation in the Plan or applicable component of the Plan
        on
        the first day of the first month that commences at least sixty (60) days
        following the date of the Committee meeting at which the Employee is designated
        as being eligible to participate in the Plan, or such later date as the
        Committee may prescribe when designating the Employee for participation,
        provided that the Employee is still employed in an eligible employment position
        by the Company or an Affiliate on the date on which participation is scheduled
        to commence.

      

      (o)           
        Payment Date: The last business day of the seventh month following the month
        in
        which the Participant’s Separation from Service occurs.  This is the
        date on which payment of a Participant’s vested benefit is made (if paid as a
        single sum) or commences (if paid in installments or as a monthly
        annuity).  All benefits are paid on the last business day of the
        month.

      

      (p)           
        Pension Restoration Benefit: The benefit described in Article III.

      

      (q)           
        Plan: The Integrys Energy Group, Inc. Pension Restoration and Supplemental
        Retirement Plan, as from time to time amended and in effect.

      

      (r)           
        Regular Monthly Payment: A Participant’s normal monthly installment or annuity
        payment amount determined as of the Calculation Date in accordance with the
        terms of 

       

      
        
          
          

        

        
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      the
        Plan, without
        regard to the Retroactive Benefit Payment or interest on the Retroactive
        Benefit
        Payment.

      

      (s)           
        Retirement Plan: Part A or C (whichever is applicable to the Participant)
        of the
        Wisconsin Public Service Corporation Retirement Plan, or any successor
        thereto.

      

      (t)           
        Retroactive Benefit Payment: The sum of the Regular Monthly Payments that
        would
        have been made, if monthly benefit payments had commenced with a payment
        on the
        last day of the month in which occurs the Calculation Date, during the period
        beginning with the month in which occurs the Calculation Date and ending
        with
        the month preceding the month in which occurs the Payment Date.

      

      (u)           
        Separation from Service: The date on which a Participant terminates employment
        from the Company and all Affiliates, provided that (1) such termination
        constitutes a separation from service for purposes of Code Section 409A,
        and (2)
        the facts and circumstances indicate that the Company (or the Affiliate)
        and the
        Participant reasonably believed that the Participant would perform no further
        services (either as an employee or as an independent contractor) for the
        Company
        (or the Affiliate) after the Participant’s termination date, or believed that
        the level of services the Participant would perform for the Company (or the
        Affiliate) after such date (either as an employee or as an independent
        contractor) would permanently decrease such that the Participant would be
        providing insignificant services to the Company or an Affiliate.  For
        this purposes, a Participant is deemed to provide insignificant services
        to the
        Company or an Affiliate, and thus to have incurred a bona fide Separation
        from
        Service, if the Participant provides services at an annual rate that is less
        than twenty percent (20%) of the services rendered by such individual, on
        average, during the immediately preceding thirty-six (36) months of employment
        (or his or her actual period of employment if less).  Notwithstanding
        the foregoing, if a Participant takes a leave of absence from the Company
        or an
        Affiliate for purposes of military leave, sick leave or other bona fide leave
        of
        absence, the Participant’s employment will be deemed to continue for the first
        six (6) months of the leave of absence, or if longer, for so long as the
        Participant’s right to reemployment is provided either by statute or by
        contract; provided that if the leave of absence is due to a medically
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      physical
        or mental
        impairment that can be expected to result in death or last for a continuous
        period
        of not less than six (6) months, where such impairment causes the Employee
        to be
        unable to perform the duties of his or her position of employment or any
        substantially similar position of employment, the leave may be extended for
        up
        to twenty-nine (29) months without causing a Separation from
        Service.

      

      (v)           
        Special Defined Contribution Credits: The defined contribution restoration
        and/or supplemental retirement credits made to a Participant’s account under a
        non-qualified deferred compensation plan with respect to the 2013-2017 plan
        years, that represent (1) amounts that would have been contributed as Employer
        Retirement Contributions on the Participant’s behalf to a qualified defined
        contribution plan were it not for the limitations of Code Section 401(a)(17)
        and
        415, or (2) other supplemental retirement credits that are not contingent
        upon
        the Participant having deferred compensation under such plan.

      

      (w)           
        Spouse: A person of the opposite sex to whom the Participant is legally
        married.

      

      (x)           
        Supplemental Retirement Benefit: The benefit described in Article
        IV.

      

      (y)           
        Trust: The Integrys Energy Group, Inc. Deferred Compensation Trust, which
        was
        formerly known as the WPS Resources Corporation Deferred Compensation Trust,
        or
        other funding vehicle which may from time to time be established, as amended
        and
        in effect from time to time.

      

      Section
        1.02.  Construction and Applicable Law.

      

      (a)           
        Wherever any words are used in the masculine, they shall be construed as
        though
        they were used in the feminine in all cases where they would so apply; and
        wherever any words are use in the singular or the plural, they shall be
        construed as though they were used in the plural or the singular, as the
        case
        may be, in all cases where they would so apply. Titles of articles and sections
        are for general information only, and the Plan is not to be construed by
        reference to such items.

       

      
        
          
          

        

        
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      (b)           
        This Plan is intended to be a plan of deferred compensation maintained for
        a
        select group of management or highly compensated employees as that term is
        used
        in ERISA, and
        shall be
        interpreted so as to comply with the applicable requirements thereof. In
        all
        other respects, the Plan is to be construed and its validity determined
        according to the laws of the State of Illinois, without regard to the principle
        of conflict of laws, to the extent such laws are not preempted by federal
        law.
        Any action for benefits under the Plan or to enforce the terms of the Plan
        shall
        be heard in the State of Illinois by the court with jurisdiction over the
        claim.
        In case any provision of the Plan is held illegal or invalid for any reason,
        the
        illegality or invalidity will not affect the remaining parts of the Plan,
        but
        the Plan shall, to the extent possible, be construed and enforced as if the
        illegal or invalid provision had never been inserted.

       

      
        
          
          

        

        
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      ARTICLE
        II.  PAYMENT
        ELECTIONS

      

      

      Section
        2.01.  General Rules.

      

      (a)           
        Participant Payment
        Elections.  A Participant’s vested benefits are distributed
        based upon the Participant’s payment election (or deemed payment
        election).

      

      (b)           
        Coordinated
        Distribution of Pension Restoration Benefit, Supplemental Retirement Benefit
        and
        Certain Deferred Compensation Benefits.  With respect to any
        Participant who has been designated for participation in both the Pension
        Restoration Benefit and the Supplemental Retirement Benefit components of
        the
        Plan, the Participant makes a single benefit payment election (or deemed
        election) that governs the form and time of distribution of (1) the Pension
        Restoration Benefit, (2) the Supplemental Retirement Benefit, and (3) the
        portion of the Participant’s Applicable Account Balance that is attributable to
        Special Defined Contribution Credits.  The Participant is not able to
        make separate elections with respect to each of these benefits.

      

      Section
        2.02.  Participant Payment Election.

      

      (a)           
        Payment Election
        as to
        Form of Payment.  Each Participant whose participation is
        limited to the Pension Restoration Benefit Component of the Plan shall make
        a
        payment election whether to receive his or her vested Pension Restoration
        Benefit either as (1) a single sum cash payment, or (2) an annuity
        distribution.  Each Participant who participates in both the Pension
        Restoration Benefit and the Supplemental Retirement Benefit components of
        the
        Plan shall make a single payment election whether to receive his or her vested
        benefits either as (1) a single sum cash payment, (2) a one hundred eighty
        (180)
        month period certain installment payment, or (3) an annuity
        distribution.  The Participant’s single payment election will govern
        the distribution of the Participant’s vested Pension Restoration Benefit, the
        Participant’s vested Supplemental Retirement Benefit, and if the Participant has
        received Special Defined Contribution Credits, the portion of the Participant’s
        vested Applicable Account Balance that is attributable to Special Defined
        Contribution Credits.

       

      
        
          
          

        

        
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      (b)           
        Annuity
        Distribution.  A Participant who has elected (or is deemed to
        have elected) the annuity payment option is not required to elect the specific
        form of annuity at the time of making the payment election, so long as the
        available forms of annuity distribution are actuarially equivalent for purposes
        of Code Section 409A.  If the available forms of annuity distribution
        are actuarially equivalent for purposes of Code Section 409A, the Participant
        may choose the specific form of monthly annuity at any time prior to the
        Calculation Date, in accordance with rules prescribed by the
        Committee.  Additional rules regarding annuity benefit distribution
        are set forth in Sections 3.05 and 4.06.

      

      (c)           
        Date of Payment
        Election.  In the case of an Employee who becomes a Participant
        prior to January 1, 2009, the payment election must be made on or before
        December 31, 2008. The election on file (or deemed to be on file) at
        December 31, 2008 will be the Participant’s payment election.  In the
        case of an Employee who becomes a Participant after December 31, 2008, the
        payment election must be made during the period commencing on the date on
        which
        the Employee is designated for participation in the Plan and ending on the
        date
        on which the Employee becomes a Participant, or within such other period
        as is
        permitted by the Committee in accordance with Code Section 409A.  All
        payment elections must be made in such form and in accordance with such rules
        prescribed by the Committee or its delegate.

      

      (d)           
        Default Payment
        Election.  If a Participant fails to make such a payment
        election within the prescribed period, the Participant will be deemed to
        have
        elected to receive a single sum  distribution; provided that in the
        case of a Participant who participates in both the Pension Restoration Benefit
        and the Supplemental Retirement Benefit components of the Plan, the
        Participant’s benefit election on file at December 31, 2008, even if originally
        made only with respect to the Pension Restoration Benefit, shall be deemed
        to be
        the Participant’s payment election both with respect to the Pension Restoration
        Benefit and the Supplemental Retirement Benefit (and if the Participant has
        received Special Defined Contribution Credits, the portion of the Participant’s
        vested Applicable Account Balance that is attributable to Special Defined
        Contribution Credits).

       

      
        
          
          

        

        
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      (e)           
        Irrevocability
        of
        Payment Election.  A Participant’s payment election (or deemed
        payment election) is irrevocable.

       

      
        
          
          

        

        
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      ARTICLE
        III.  PENSION
        RESTORATION BENEFIT

      

      

      Section
        3.01.  Eligibility.

      

      An
        Employee is eligible for the Pension Restoration Benefit if:

      

      (a)           
        The Committee has designated the Employee for participation in the Pension
        Restoration Benefit component of the Plan and the Employee, in accordance
        with
        Section 1.01(n), has become a Participant in the Pension Restoration Benefit
        component of the Plan; and

      

      (b)           
        The Participant is covered under and has a vested entitlement to a retirement
        benefit from the Retirement Plan.

      

      Section
        3.02.  Pension Restoration Benefit Formula.

      

      The
        Pension
        Restoration Benefit accrued by an eligible Participant is determined as of
        the
        Calculation Date and, when expressed in the form of a life annuity without
        survivor benefits commencing with a payment for the month in which occurs
        the
        Calculation Date, is equal to the difference between (a) and (b)
        below:

      

      (a)           
        The monthly retirement benefit that would be payable to the Participant under
        the Retirement Plan if the benefit were determined by applying all of the
        terms
        and conditions of the Retirement Plan, except for the following modifications
        or
        assumptions:

      

      (1)           
        The benefit is paid in the form of a life annuity without survivor benefits,
        regardless of the form of benefit actually elected by the Participant under
        the
        Retirement Plan;

      

      (2)           
        The benefit is paid commencing with a payment for the month in which occurs
        the
        Calculation Date, regardless of the Participant’s actual date of benefit
        commencement under the Retirement Plan and regardless of the Payment Date
        applicable to the Participant under this Plan;

       

      
        
          
          

        

        
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      (3)           
        The benefit is calculated as if base salary and annual bonus (but not long-term
        bonus) amounts deferred by the Participant under the Integrys Energy Group,
        Inc.
        Deferred Compensation Plan had been paid to the Participant as current
        compensation in the year of the deferral;

      

      (4)           
        The benefit is calculated as if the compensation limitation of Section
        401(a)(17) of the Code and the maximum benefit limitation of Section 415
        of the
        Code did not apply.

      

      (b)           
        The monthly retirement benefit that would be payable to the Participant under
        the Retirement Plan if the benefit were determined in accordance with the
        modifications or assumptions described in Section 3.02(a)(1) and (2) above,
        but
        otherwise applying all of the terms and conditions of the Retirement Plan.
        For
        this purpose, the Participant’s benefit under the Retirement Plan shall be
        determined by attributing to the Participant any portion of the Retirement
        Plan
        benefit that is assigned to an alternate payee pursuant to a domestic relations
        order.

      

      Section
        3.03.  Distribution of Single Sum Benefits.

      

      If
        the Participant’s Pension Restoration
        Benefit is payable in a single sum, distribution will be made in accordance
        with
        the following rules:

      

      (a)           
        Time of
        Payment.  The single sum payment will be calculated as of the
        Calculation Date but paid on the Payment Date.

      

      (b)           
        Amount of Single
        Sum
        Benefit.  The single sum cash payment shall be equal to the sum
        of (1) an amount that, as of the Calculation Date, is Actuarially Equivalent
        to
        the Participant’s Pension Restoration Benefit as calculated under
        Section 3.02 above.  For a married Participant, the single sum
        benefit does not include the value of any surviving Spouse benefit that would
        be
        paid if the Participant had instead elected an annuity benefit, i.e., the
        single
        sum benefit is Actuarially Equivalent to the single life annuity with no
        survivor benefits.  The 

       

      
        
          
          

        

        
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      payment
        to be made
        on the Payment Date will equal the sum of (1) the single sum amount determined,
        as of the Calculation Date, in accordance with the preceding sentence, and
        (2)
        interest on the single sum amount from the last day of the month in which
        occurs
        the Calculation Date through the Payment Date. Interest under clause
        (2) above, for the period through the last day of the month in which occurs
        the
        six (6) month anniversary of the Participant’s Separation from Service, shall be
        determined at the 417(e)(3) Rate (first segment rate) in effect under the
        Retirement Plan for the calendar year in which occurs the Calculation
        Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 3.03 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 3.06.

      

      Section
        3.04.  Distribution of 180 Month Period Certain Installment
        Benefit.

      

      If
        the Participant’s Pension Restoration
        Benefit is payable as a one hundred eighty (180) month period certain
        installment benefit (in accordance with Section 2.02, only certain Participants
        are eligible for this form of payment), distribution will be made in accordance
        with the following rules:

      

      (a)           
        Time of
        Payment.  The one hundred eighty (180) month period certain
        installment benefit will be calculated as of the Calculation Date but paid
        beginning on the Payment Date.

      

      (b)           
        Amount of Each
        Installment.  The amount of each monthly installment shall be
        determined by converting the Participant’s Pension Restoration Benefit as
        calculated under Section 3.02 above into an Actuarially Equivalent one
        hundred eighty (180) month period certain installment benefit.  For a
        married Participant, the one hundred eighty (180) month period certain
        installment benefit does not include the value of any surviving Spouse benefit
        that would be paid if the Participant had instead elected an annuity benefit,
        i.e., the one hundred eighty (180) month period certain installment benefit
        is
        Actuarially Equivalent to the single life annuity with no survivor
        benefits.  The payment made on the Payment Date will include (1) the
        Regular Monthly Payment for the month in which occurs the Payment Date, (2)
        the
        Retroactive Benefit Payment, and (3) interest on each monthly installment
        that
        constitutes part of the Retroactive Benefit 

       

      
        
          
          

        

        
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      Payment
        for the
        period from the date on which such installment would have been paid had monthly
        payments commenced with a payment on the last day of the month that includes
        the
        Calculation Date through the Payment Date.  Following the payment on
        the Payment Date, payments to the eligible Participant in an amount equal
        to the
        Regular Monthly Payment shall continue until a total of one hundred eighty
        (180)
        monthly payments have been made; provided that for purposes of determining
        whether a total of one hundred eighty (180) monthly payments have been made,
        the
        payment made on the Payment Date will be treated as consisting of seven (7)
        payments.  Interest under clause (3) above, for the period through the
        last day of the month in which occurs the six (6) month anniversary of the
        Participant’s Separation from Service, shall be determined at the 417(e)(3)
        Rate  (first segment rate) in effect under  the Retirement
        Plan for the calendar year in which occurs the Calculation Date.  For
        example, if the Participant incurs a Separation from Service on December
        31,
        2009, the Calculation Date is January 1, 2010, the first payment would have
        been
        made on January 31, 2010 if payment had commenced with a payment for the
        month
        that includes the Calculation Date, and the Payment Date will be July 31,
        2010.  Interest on each monthly installment that constitutes part of
        the Retroactive Benefit Payment for the period from the date on which the
        monthly installment otherwise would have been paid through the Payment Date
        will
        be credited at the 2010 417(e)(3) Rate (first segment rate) in effect under
        the
        Retirement Plan.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 3.04 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 3.06.

      

      Section
        3.05.  Distribution of Annuity Benefits.

      

      If
        the Participant’s Pension Restoration
        Benefit is payable as an annuity, distribution will be made in accordance
        with
        the following rules:

      

      (a)           
        Normal Form of
        Distribution.  If the Participant has elected (or is deemed to
        have elected) an annuity form of distribution, then payment for an unmarried
        Participant will be made in accordance with subsection (a)(1) below, and
        payment
        for a married Participant, unless the 

       

      
        
          
          

        

        
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      Participant
        has
        validly elected payment in an alternate form of annuity payment in accordance
        with subsection (b) below, will be made in accordance with subsection (a)(2)
        below:

      

      (1)           
        Unmarried
        Participant.  If the Participant is not married on the
        Calculation Date, distribution will be in the form of a monthly single life
        annuity in the amount determined under Section 3.02.  Monthly
        payments will commence on the Payment Date applicable to the Participant
        and
        will continue until and including a payment for the month in which occurs
        the
        Participant’s death.

      

      (2)           
        Married
        Participant.  If the Participant is married on the Calculation
        Date, distribution will be in the form of a joint and fifty percent (50%)
        survivor annuity with the Participant’s Spouse as of the Calculation Date as the
        sole contingent annuitant.  Monthly payments under the joint and fifty
        percent (50%) survivor annuity will commence on the Payment Date applicable
        to
        the Participant and will continue until and including a payment for the month
        in
        which occurs the Participant’s death.  If the Participant predeceases
        the Spouse to whom he or she was married on the Calculation Date, fifty percent
        (50%) of the Regular Monthly Payment Amount applicable to the Participant
        during
        his or her lifetime shall continue during the remaining lifetime of such
        Spouse.  The Regular Monthly Payment Amount payable to the Participant
        during his or her lifetime will be the amount determined under Section 3.02
        reduced, in order to reflect the cost of the survivor benefit, in the same
        manner as the benefit would be reduced under Part A or Part C of the Retirement
        Plan (whichever is applicable to the Participant) if the benefit were being
        paid
        under the Retirement Plan.

       

      
        
          
          

        

        
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      (b)           
        Alternate Forms
        of
        Annuity Distribution.  In lieu of the normal form of payment
        applicable under subsection (a) above, a Participant who participates in
        Part A
        of the Retirement Plan, who is married on the Calculation Date, and who has
        in
        effect an election of the annuity payment method, may elect, in accordance
        with
        such conditions as may be established by the Committee, to receive payment
        in an
        alternate form of annuity that would be available to the Participant under
        Part
        A of the Retirement Plan if the Pension Restoration Benefit were being paid
        under Part A of the Retirement Plan rather than under this Plan.  In
        lieu of the normal form of payment applicable under subsection (a) above,
        a
        Participant who participates in Part C of the Retirement Plan and who has
        in
        effect an election of the annuity payment method, may elect, in accordance
        with
        such conditions as may be established by the Committee, to receive payment
        in an
        alternate form of annuity that would be available to the Participant under
        Part
        C of the Retirement Plan if the Pension Restoration Benefit were being paid
        under Part C of the Retirement Plan rather than under this Plan. The alternate
        form of annuity distribution shall be calculated by converting the monthly
        benefit amount determined under Section 3.02 into a payment in such alternate
        annuity form, with the conversion accomplished by using the adjustment factors
        that would be used under the Retirement Plan for purposes of converting from
        the
        normal form of benefit to an alternate form of annuity if the Pension
        Restoration Benefit were being paid under Part A of Part C of the Retirement
        Plan, whichever is applicable to the Participant.  If the Participant
        elects payment in an alternate form of annuity that provides surviving Spouse
        benefits following the Participant’s death, the surviving Spouse benefits will
        be paid to the Spouse to whom the Participant is married on the Calculation
        Date.  The Participant’s election of an alternate form of annuity must
        be made prior to the Calculation Date, and becomes irrevocable on the
        Calculation Date; provided that if the Participant is covered under Part
        A of
        the Retirement Plan and is not married on the Calculation Date, any prior
        election of payment in an alternate form of annuity shall be null and
        void.

      

      (c)           
        Regular Monthly
        Payments and the Retroactive Benefit Payment. The payment made on the
        Payment Date will include (1) the Regular Monthly Payment for the month in
        which
        occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest
        on each monthly installment that constitutes part of the Retroactive Benefit
        Payment for the period from the date 

       

      
        
          
          

        

        
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      on
        which such installment would have been paid had monthly payments commenced
        with
        a payment on the last day of the month that includes the Calculation Date
        through the Payment Date.  Each subsequent monthly payment to the
        Participant will be an amount equal to the Regular Monthly
        Payment.  Interest under clause (3) above, for the period through the
        last day of the month in which occurs the six (6) month anniversary of the
        Participant’s Separation from Service, shall be determined at the 417(e)(3) Rate
        (first segment rate) in effect under the Retirement Plan for the calendar
        year
        in which occurs the Calculation Date.

      

      (d)           
        Death Prior to
        Payment
        Date.  This Section 3.05 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 3.06.

      

      Section
        3.06.  Death Benefits.

      

      The
        form and time of benefit distribution is
        irrevocably established at the earlier to occur of (1) the Payment Date (which,
        in accordance with Section 1.409A-3(b) of the Income Tax Regulations, is
        an
        objectively determinable and nondiscretionary date that is based upon the
        Participant’s Separation from Service and that is fixed at the time of the
        Participant’s Separation from Service), and (2) the date of the Participant’s
        death.

      

      (a)           
        Death Prior to
        Payment
        Date.  If a Participant who is eligible for a Pension
        Restoration Benefit dies prior to the Payment Date (including a Participant
        who
        is eligible for a Pension Restoration Benefit who dies during employment),
        the
        Participant’s Beneficiary will receive a single sum payment equal to the single
        sum payment to which the Participant would have been entitled to as of the
        Calculation Date if the Participant had in effect a single sum payment election
        under Article II (regardless of the election actually made by the Participant),
        together with interest, at the 417(e)(3) Rate (first segment rate) from the
        last
        day of the month in which occurs the Calculation Date through the last day
        of
        the month preceding the month in which payment to the Beneficiary is
        made.

       

      
        
          
          

        

        
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      (b)           
        Death on or After
        the
        Payment Date.

      

      (1)           
        Death After
        Commencement of Installment Payments.  If the Participant’s
        benefit is being distributed as a one hundred eighty (180) month period certain
        installment benefit and the Participant dies on or after the Payment Date,
        i.e.,
        on or after the date on which installment distributions to the Participant
        have
        begun, but prior to the date on which one hundred eighty (180) payments have
        been made, monthly installment distributions to the Beneficiary (at the same
        time as payments to the Participant would have been made) shall continue
        until
        the total number of monthly installments paid to the Beneficiary, when
        aggregated with the number of monthly installments paid to the Participant
        prior
        to his or her death, equals one hundred eighty (180).

      

      (2)           
        Death After
        Commencement of Annuity Payments.  If the Participant’s benefit
        is being distributed as an annuity and the Participant dies on or after the
        Payment Date, i.e., on or after the date on which payment of Plan benefits
        has
        actually begun, the only benefits payable following the Participant’s death
        shall be those (if any) payable under the form of annuity distribution in
        which
        the Participant’s benefit was being paid.  Thus, for example, if the
        Participant was receiving payments in the form of a single life annuity,
        no
        further benefits are payable following the Participant’s
        death.  Similarly, if the Participant was receiving benefits in the
        form of a joint and fifty percent (50%) surviving Spouse annuity, the only
        benefits payable following the Participant’s death shall be those payable
        pursuant to the fifty percent (50%) survivor feature of the annuity benefit,
        to
        the Spouse (if still living) to whom the Participant was married on the
        Calculation Date.  There is no guarantee that the total amount of

       

      
        
          
          

        

        
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      benefits
        received
        by the Participant (and if applicable, the Participant’s surviving Spouse) under
        an annuity form of distribution will be at least equal to the amount that
        would
        have been paid to the Participant if the Participant had elected distribution
        in
        a single sum or in installments.

       

      
        
          
          

        

        
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      ARTICLE
        IV.  SUPPLEMENTAL
        RETIREMENT BENEFIT

      

      

      Section
        4.01.  Eligibility.  Except
        as
        provided in Section 6.02(c), an Employee is eligible for the Supplemental
        Retirement Benefit if:

      

      (a)           
        The Committee, prior to April 1, 2008, has designated the Employee for
        participation in the Supplemental Retirement Benefit component of the Plan,
        and
        the Employee, in accordance with Section 1.01(n), has become a Participant
        in
        the Supplemental Retirement Benefit component of the Plan; and

      

      (b)           
        Except as provided in Section 4.07 with respect to a Participant whose
        Separation from Service is caused by the Participant’s death, the Participant’s
        Separation from Service occurs after the Participant has attained fifty-five
        (55) years of age and after the Participant has completed at least ten (10)
        years of Credited Service.

      

      Section
        4.02.  Final Average Earnings.

      

      (a)           
        For purposes of calculating a Participant’s Supplemental Retirement Benefit,
“Final Average Earnings” means one thirty-sixth (1/36th) of the base salary and
        annual (but not long-term) bonus, determined prior to reduction for
        contributions made at the Participant’s election to a plan or arrangement under
        Section 125 or 401(k) of the Code and prior to reduction for elective deferral
        contributions under the Integrys Energy Group, Inc. Deferred Compensation
        Plan,
        paid to the Participant by the Company or a participating Affiliate during
        whichever of the following periods produces the higher average:

      

      (1)           
        The month during which occurs the Participant’s Separation from Service and the
        immediately preceding thirty-five (35) months; or

      

      (2)           
        the three calendar years preceding the calendar year in which occurs the
        Participant’s Separation from Service.

       

      
        
          
          

        

        
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      (b)           
        Notwithstanding subsection (a), the Committee, in its sole discretion, may
        adjust a Participant’s Final Average Earnings if the Committee determines that
        such action is necessary or desirable in order to effectuate the intent of
        this
        Plan, including, without limitation, an adjustment to exclude one or more
        annual
        bonus payments from the calculation of the Participant’s Final Average Earnings
        where application of the foregoing definition would result in the Participant
        receiving credit for more than three annual bonus awards in the calculation
        of
        Final Average Earnings as a result of differences in the timing of payments
        of
        such awards.

      

      (c)           
        Notwithstanding subsections (a) and (b), for any Participant who continues
        to be
        employed by the Company or a participating Affiliate on and after December
        31,
        2017, the Participant’s Final Average Earnings will be determined as of December
        31, 2017 as if the Participant had incurred a Separation from Service on
        that
        date.  Salary, bonus or other compensation paid to the Participant
        after December 31, 2017 will not be recognized.

      

      Section
        4.03.  Supplemental Retirement Benefit Formula.

      

      (a)           
        Participants With
        15
        or More Years of Credited Service.  The Supplemental Retirement
        Benefit for a Participant who satisfies the eligibility requirements of Section
        4.01 and who has fifteen (15) or more years of Credited Service as of the
        date
        of Separation from Service is determined as of the Calculation Date and,
        when
        expressed in the form of a one hundred eighty (180) month period certain
        installment benefit, is equal to the difference between (1) and (2)
        below:

      

      (1)           
        Sixty percent (60%) of the Participant’s Final Average Earnings,
        minus

      

      (2)           
        The sum of (A) and (B):

      

      
        	
                 

              	
                (A)

              	
                The
                  monthly
                  aggregate annuity benefit (not including any temporary Pension
                  Supplement)
                  that the Participant is or would be entitled to receive under the
                  Retirement Plan and the Pension 

              

      

       

       

      
        
          
          

        

        
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                  Restoration
                    Benefit component of this Plan if such benefits were paid, commencing
                    with
                    a payment for the month in which occurs the Calculation Date,
                    in the form
                    of a single life annuity without survivor benefits, i.e.,
                    the
                    Participant’s actual benefit election, and the form in which and time at
                    which those benefits under those plans are actually payable,
                    shall be
                    disregarded.  For purposes of this paragraph (A), the monthly
                    aggregate annuity benefit that the Participant is or would be
                    entitled to
                    receive under the Retirement Plan and the Pension Benefit Restoration
                    component of this Plan shall be determined by attributing to
                    the
                    Participant any portion of the benefit that is assigned to an
                    alternate
                    payee pursuant to a domestic relations order; and
                    

                

        

         

      

      
        	
                 

              	
                (B)

              	
                The
                  monthly
                  annuity benefit that could be purchased if the Participant’s Applicable
                  Account Balance is converted into an Actuarially Equivalent single
                  life
                  annuity, without survivor benefits, commencing with a payment for
                  the
                  month in which occurs the Calculation Date.  For purposes of
                  this paragraph (B), the monthly annuity benefit that could be purchased
                  with the Participant’s Applicable Account Balance shall be determined by
                  attributing to the Participant any portion of the Applicable Account
                  Balance that is assigned to an alternate payee pursuant to a domestic
                  relations order. 

              

      

      

      
        
          
          

        

        
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      (b)           
        Participants With
        10
        But Less Than 15 Years of Credited Service.  The Supplemental
        Retirement Benefit of a Participant who satisfies the eligibility requirements
        of Section 4.01 and who has at least ten (10) but less than fifteen (15)
        years
        of Credited Service shall be determined in accordance with subsection (a)
        above,
        with the exception that the benefit percentage used in subsection (a)(1)
        above
        shall be reduced from sixty percent (60%) to the percentage determined in
        accordance with the following schedule:

       

      
        	
                
                

                Full
                  Years of Credited
                  Service

              	
                
                

                Applicable
                  Benefit
                  Percentage

              
	
                14 
                  

                13 
                  

                12 
                  

                11 
                  

                10

              	
                 56%
                   

                 52% 
                  

                48% 
                  

                44% 
                  

                40%

              

      

       

      (c)           
        Reduction for
        Early
        Commencement.  If the Calculation Date applicable to the
        Participant’s Supplemental Retirement Benefit is prior to the Participant’s
        attainment of age sixty-two (62), the monthly benefit as calculated under
        this
        Section 4.03 shall be reduced by one quarter of one percent (0.25%) for each
        month by which the Calculation Date precedes the month in which the Participant
        will attain sixty-two (62) years of age.

      

      Section
        4.04.  Distribution of Single Sum Benefits.

      

      If
        the Participant’s Supplemental Retirement
        Benefit is payable in a single sum, distribution will be made in accordance
        with
        the following rules:

      

      (a)           
        Time of
        Payment.  The single sum payment will be calculated as of the
        Calculation Date but paid on the Payment Date.

       

      
        
          
          

        

        
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      (b)           
        Amount of Single
        Sum
        Benefit.  The single sum cash payment shall be equal to the sum
        of (1) an amount that, as of the Calculation Date, is Actuarially Equivalent
        to
        the Participant’s one hundred eighty (180) month period certain installment
        Supplemental Retirement Benefit as calculated under Section 4.03
        above.  The payment to be made on the Payment Date will equal the sum
        of (1) the single sum amount determined, as of the Calculation Date, in
        accordance with the preceding sentence, and (2) interest on the single sum
        amount from the last day of the month in which occurs the Calculation Date
        through the Payment Date. Interest under clause
        (2) above, for the period through the last day of the month in which occurs
        the
        six (6) month anniversary of the Participant’s Separation from Service, shall be
        determined at the 417(e)(3) Rate (first segment rate) in effect under the
        Retirement Plan for the calendar year in which occurs the Calculation
        Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 4.04 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 4.07.

      

      Section
        4.05.  Distribution of 180 Month Period Certain Installment
        Benefit.

      

      If
        the Participant’s Supplemental Retirement
        Benefit is payable as a one hundred eighty (180) month period certain
        installment benefit, distribution will be made in accordance with the following
        rules:

      

      (a)           
        Time of
        Payment.  The one hundred eighty (180) month period certain
        installment benefit will be calculated as of the Calculation Date but paid
        beginning on the Payment Date.

      

      (b)           
        Amount of Each
        Installment.  The amount of each monthly installment shall be
        the amount determined under Section 4.03 above.  The payment made on
        the Payment Date will include (1) the Regular Monthly Payment for the month
        in
        which occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3)
        interest on each monthly installment that constitutes part of the Retroactive
        Benefit Payment for the period from the date on which such installment would
        have been paid had monthly payments commenced with a payment on the last
        day of
        the month that includes the Calculation Date through the Payment
        Date.  Following the payment on 

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      the
        Payment Date,
        payments to the eligible Participant in an amount equal to the Regular Monthly
        Payment shall continue until a total of one hundred eighty (180) monthly
        payments have been made; provided that for purposes of determining whether
        a
        total of one hundred eighty (180) monthly payments have been made, the payment
        made on the Payment Date will be treated as consisting of seven (7)
        payments.  Interest under clause (3) above, for the period through the
        last day of the month in which occurs the six (6) month anniversary of the
        Participant’s Separation from Service, shall be determined at the 417(e)(3) Rate
        (first segment rate) in effect under the Retirement Plan for the calendar
        year
        in which occurs the Calculation Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 4.05 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 4.07.

      

      Section
        4.06.  Distribution of Annuity Benefits.

      

      If
        the Participant’s Supplemental Retirement
        Benefit is payable as an annuity, distribution will be made in accordance
        with
        the following rules:

      

      (a)           
        Calculation of
        Monthly
        Annuity Amount.  The amount of the monthly annuity benefit is
        determined, as of the Calculation Date, by converting the one hundred eighty
        (180) month period certain installment benefit under Section 4.03 into an
        Actuarially Equivalent annuity benefit in the form of annuity applicable
        to the
        Participant (the same form of annuity in which the Participant’s Pension
        Restoration Benefit will be distributed).  If the Participant is
        married and receiving payment in the form of a joint and survivor annuity,
        the
        Supplemental Retirement Plan survivor benefit is not actuarially subsidized,
        even though the Participant may receive an actuarial subsidy with respect
        to the
        Pension Restoration Benefit survivor benefit.

      

      (b)           
        Regular Monthly
        Payments and the Retroactive Benefit Payment. The payment made on the
        Payment Date will include (1) the Regular Monthly Payment for the month in
        which
        occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest
        on each monthly installment that constitutes part of the Retroactive Benefit
        Payment for the period from the date on which such installment would have
        been
        paid had monthly payments commenced with a 

       

      
        
          
          

        

        
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      payment
        on the last
        day of the month that includes the Calculation Date through the Payment
        Date.  Each subsequent monthly payment to the Participant will be an
        amount equal to the Regular Monthly Payment.  Interest under clause
        (3) above, for the period through the last day of the month in which occurs
        the
        six (6) month anniversary of the Participant’s Separation from Service, shall be
        determined at the 417(e)(3) Rate (first segment rate) in effect
        under  the Retirement Plan for the calendar year in which occurs the
        Calculation Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 4.06 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 4.07.

      

      Section
        4.07.  Death Benefits.

      

      The
        form and time of benefit distribution is
        irrevocably established at the earlier to occur of (1) the Payment Date (which,
        in accordance with Section 1.409A-3(b) of the Income Tax Regulations, is
        an
        objectively determinable and nondiscretionary date that is based upon the
        Participant’s Separation from Service and that is fixed at the time of the
        Participant’s Separation from Service), and (2) the date of the Participant’s
        death.

      

      (a)           
        Death Prior to
        Payment
        Date.  If a Participant who has been designated for
        participation in the Supplemental Retirement Benefit component of the Plan
        dies
        prior to the Payment Date (including a Participant who dies during employment)
        but after having completed ten (10) or more years of Credited Service, the
        Participant’s Beneficiary will receive a single sum payment equal to the single
        sum payment to which the Participant would have been entitled to as of the
        Calculation Date if the Participant had in effect a single sum payment election
        under Article II (regardless of the election actually made by the Participant),
        together with interest, at the 417(e)(3) Rate (first segment rate), from
        the
        last day of the month in which occurs the Calculation Date through the last
        day
        of the month preceding the month in which payment to the Beneficiary is
        made.  If a Participant who has been designated for participation in
        the Supplemental Retirement Benefit component of the Plan dies prior to the
        Payment Date (including a Participant who dies during employment) and prior
        to
        completing ten (10) or more years of Credited Service, no benefit is
        payable.

       

      
        
          
          

        

        
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      (b)           
        Death on or After
        the
        Payment Date.

      

      (1)           
        Death After
        Commencement of Installment Payments.  If the Participant’s
        benefit is being distributed as a one hundred eighty (180) month period certain
        installment benefit and the Participant dies on or after the Payment Date,
        i.e.,
        on or after the date on which installment distributions to the Participant
        have
        begun, but prior to the date on which one hundred eighty (180) payments have
        been made, monthly installment distributions to the Beneficiary (at the same
        time as payments to the Participant would have been made) shall continue
        until
        the total number of monthly installments paid to the Beneficiary, when
        aggregated with the number of monthly installments paid to the Participant
        prior
        to his or her death, equals one hundred eighty (180).

      

      (2)           
        Death After
        Commencement of Annuity Payments.  If the Participant’s benefit
        is being distributed as an annuity and the Participant dies on or after the
        Payment Date, i.e., on or after the date on which payment of Plan benefits
        has
        actually begun, the only benefits payable following the Participant’s death
        shall be those (if any) payable under the form of annuity distribution in
        which
        the Participant’s benefit was being paid.  Thus, for example, if the
        Participant was receiving payments in the form of a single life annuity,
        no
        further benefits are payable following the Participant’s
        death.  Similarly, if the Participant was receiving benefits in the
        form of a joint and fifty percent (50%) surviving Spouse annuity, the only
        benefits payable following the Participant’s death shall be those payable
        pursuant to the fifty percent (50%) survivor feature of the annuity benefit,
        to
        the Spouse (if still living) to whom the Participant was married on the
        Calculation Date.  There is no guarantee that the total amount of

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

         

      

      benefits
        received
        by the Participant (and if applicable, the Participant’s surviving Spouse) under
        an annuity form of distribution will be at least equal to the amount that
        would
        have been paid to the Participant if the Participant had elected distribution
        in
        a single sum or installments.

       

      
        
          
          

        

        
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      ARTICLE
        V.  SPECIAL
        DEFINED CONTRIBUTION CREDITS

      

      

      Section
        5.01.  Distribution In Accordance With This Plan.

      

      If
        a Participant has a vested benefit
        attributable to Special Defined Contribution Credits, that benefit will be
        distributed in accordance with the terms of this Plan and the Participant’s
        payment election (or deemed payment election) under this Plan, even though
        the
        Special Defined Contribution Credits are, for record-keeping purposes, credited
        under the Integrys Energy Group, Inc. Deferred Compensation Plan.

      

      Section
        5.02.  Distribution of Single Sum Benefits.

      

      If
        the Participant’s vested account balance
        that is attributable to Special Defined Contribution Credits is payable in
        a
        single sum, distribution will be made in accordance with the following
        rules:

      

      (a)           
        Time of
        Payment.  The single sum payment will be calculated as of the
        Calculation Date but paid on the Payment Date.

      

      (b)           
        Amount of Single
        Sum
        Benefit.  The single sum cash payment shall be equal to the
        Participant’s vested account balance under the Integrys Energy Group, Inc.
        Deferred Compensation Plan that is attributable to Special Defined Contribution
        Credits.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 5.02 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 5.05.

      

      Section
        5.03.  Distribution of 180 Month Period Certain Installment
        Benefit.

      

      If
        the Participant’s vested account balance
        that is attributable to Special Defined Contribution Credits is payable as
        a one
        hundred eighty (180) month period certain installment benefit, distribution
        will
        be made in accordance with the following rules:

       

      
        
          
          

        

        
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      (a)           
        Time of
        Payment.  The one hundred eighty (180) month period certain
        installment benefit will be calculated as of the Calculation Date but paid
        beginning on the Payment Date.

      

      (b)           
        Amount of Each
        Installment.  The amount of the monthly annuity benefit is
        determined, as of the Calculation Date, by converting the Participant’s vested
        account balance, as of the Calculation Date, under the Integrys Energy Group,
        Inc. Deferred Compensation Plan that is attributable to Special Defined
        Contribution Credits, into an Actuarially Equivalent one hundred eighty (180)
        month period certain installment benefit.  The actuarial conversion
        shall be accomplished by first converting the Participant’s vested account
        balance into a single life annuity without survivor benefits, and then
        converting the single life annuity into a one hundred eighty (180) month
        period
        certain installment benefit.  The payment made on the Payment Date
        will include (1) the Regular Monthly Payment for the month in which occurs
        the
        Payment Date, (2) the Retroactive Benefit Payment, and (3) interest on each
        monthly installment that constitutes part of the Retroactive Benefit Payment
        for
        the period from the date on which such installment would have been paid had
        monthly payments commenced with a payment on the last day of the month that
        includes the Calculation Date through the Payment Date.  Following the
        payment on the Payment Date, payments to the eligible Participant in an amount
        equal to the Regular Monthly Payment shall continue until a total of one
        hundred
        eighty (180) monthly payments have been made; provided that for purposes
        of
        determining whether a total of one hundred eighty (180) monthly payments
        have
        been made, the payment made on the Payment Date will be treated as consisting
        of
        seven (7) payments.  Interest under clause (3) above, for the period
        through the last day of the month in which occurs the six (6) month anniversary
        of the Participant’s Separation from Service, shall be determined at the
        417(e)(3) Rate (first segment rate) in effect under the Retirement Plan for
        the
        calendar year in which occurs the Calculation Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 5.03 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 5.05.

       

      
        
          
          

        

        
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      Section
        5.04.  Distribution of Annuity Benefits.

      

      If
        the Participant’s vested account balance
        that is attributable to Special Defined Contribution Credits is payable as
        an
        annuity, distribution will be made in accordance with the following
        rules:

      

      (a)           
        Calculation of
        Monthly
        Annuity Amount.  The amount of the monthly annuity benefit is
        determined, as of the Calculation Date, by converting the Participant’s vested
        account balance, as of the Calculation Date, under the Integrys Energy Group,
        Inc. Deferred Compensation Plan that is attributable to Special Defined
        Contribution Credits into an Actuarially Equivalent annuity benefit in the
        form
        of annuity applicable to the Participant (the same form of annuity in which
        the
        Participant’s Pension Restoration Benefit will be distributed).  The
        actuarial conversion shall be accomplished by first converting the Participant’s
        vested account balance into a single life annuity without survivor benefits,
        and
        then, if the Participant’s benefit is being paid in a form of annuity other than
        a single life annuity without survivor benefits, converting the single life
        annuity into such other form of annuity in which the Participant’s benefit will
        be paid.  If the Participant is married and receiving payment in the
        form of a joint and survivor annuity, the Supplemental Retirement Plan survivor
        benefit is not actuarially subsidized, even though the Participant may receive
        an actuarial subsidy with respect to the Pension Restoration Benefit survivor
        benefit.

      

      (b)           
        Regular Monthly
        Payments and the Retroactive Benefit Payment. The payment made on the
        Payment Date will include (1) the Regular Monthly Payment for the month in
        which
        occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest
        on each monthly installment that constitutes part of the Retroactive Benefit
        Payment for the period from the date on which such installment would have
        been
        paid had monthly payments commenced with a payment on the last day of the
        month
        that includes the Calculation Date through the Payment Date.  Each
        subsequent monthly payment to the Participant will be an amount equal to
        the
        Regular Monthly Payment.  Interest under clause (3) above, for the
        period through the last day of the month in which occurs the six (6) month
        anniversary of the Participant’s Separation from 

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

         

      

      Service,
        shall be
        determined at the 417(e)(3) Rate (first segment rate) in effect under the
        Retirement Plan for the calendar year in which occurs the Calculation
        Date.

      

      (c)           
        Death Prior to
        Payment
        Date.  This Section 5.04 applies only if the Participant is
        alive on the Payment Date.  If the Participant dies prior to the
        Payment Date, the benefits (if any) payable following the Participant’s death
        shall be determined in accordance with Section 5.05.

      

      Section
        5.05.  Death Benefits.

      

      The
        form and time of benefit distribution is
        irrevocably established at the earlier to occur of (1) the Payment Date (which,
        in accordance with Section 1.409A-3(b) of the Income Tax Regulations, is
        an
        objectively determinable and nondiscretionary date that is based upon the
        Participant’s Separation from Service and that is fixed at the time of the
        Participant’s Separation from Service), and (2) the date of the Participant’s
        death.

      

      (a)           
        Death Prior to
        Payment
        Date.  If a Participant who has a vested benefit attributable
        to Special Defined Contribution Credits dies prior to the Payment Date
        (including a Participant who is eligible for such benefits and who dies during
        employment), the Participant’s Beneficiary will receive a single sum payment
        equal to the single sum payment to which the Participant would have been
        entitled to if the Participant had in effect a single sum payment election
        under
        Article II (regardless of the election actually made by the
        Participant).

      

      (b)           
        Death on or After
        the
        Payment Date.

      

      (1)           
        Death After
        Commencement of Installment Payments.  If the Participant’s
        benefit is being distributed as a one hundred eighty (180) month period certain
        installment benefit and the Participant dies on or after the Payment Date,
        i.e.,
        on or after the date on which installment distributions to the Participant
        have
        begun, but prior to the date on which one hundred eighty (180) payments have
        been made, monthly installment distributions to the Beneficiary (at the same
        time as payments to the Participant would 

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

         

      

      have
        been made)
        shall continue until the total number of monthly installments paid to the
        Beneficiary, when aggregated with the number of monthly installments paid
        to the
        Participant prior to his or her death, equals one hundred eighty
        (180).

       

      (2)           
        Death After
        Commencement of Annuity Payments.  If the Participant’s benefit
        is being distributed as an annuity and the Participant dies on or after the
        Payment Date, i.e., on or after the date on which payment of Plan benefits
        has
        actually begun, the only benefits payable following the Participant’s death
        shall be those (if any) payable under the form of annuity distribution in
        which
        the Participant’s benefit was being paid.  Thus, for example, if the
        Participant was receiving payments in the form of a single life annuity,
        no
        further benefits are payable following the Participant’s
        death.  Similarly, if the Participant was receiving benefits in the
        form of a joint and fifty percent (50%) surviving Spouse annuity, the only
        benefits payable following the Participant’s death shall be those payable
        pursuant to the fifty percent (50%) survivor feature of the annuity benefit,
        to
        the Spouse (if still living) to whom the Participant was married on the
        Calculation Date.  There is no guarantee that the total amount of
        benefits received by the Participant (and if applicable, the Participant’s
        surviving Spouse) under an annuity form of distribution will be at least
        equal
        to the amount that would have been paid to the Participant if the Participant
        had elected distribution in a single sum or in installments.

       

      
        
          
          

        

        
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      ARTICLE
        VI.  SPECIAL
        RULES APPLICABLE IN THE EVENT OF A CHANGE IN CONTROL OF THE COMPANY

      

      

      Section
        6.01.  Definitions.  For purposes of this Article VI,
        the following terms shall have the following respective meanings:

      

      (a)           
        The “Act” means the Securities Exchange Act of 1934, as amended.

      

      (b)           
        An “Affiliate” of, or a person “affiliated” with, a specified person is a person
        that directly, or indirectly through one or more intermediaries, controls,
        or is
        controlled by, or is under common control with, the person specified and
        the
        term “Associate” used to indicate a relationship with any person, means (1) any
        corporation or organization (other than the registrant or a majority-owned
        subsidiary of the registrant) of which such person is an officer or partner
        or
        is, directly or indirectly, the beneficial owner of 10 percent or more of
        any
        class of equity securities, (2) any trust or other estate in which such person
        has a substantial beneficial interest or as to which such person serves as
        trustee or in a similar fiduciary capacity, and (3) any relative or Spouse
        of
        such person, or any relative of such Spouse, who has the same home as such
        person or who is a director or officer of the registrant or any of its parents
        or subsidiaries.

      

      (c)           
        A person shall be deemed to be the “Beneficial Owner” of any
        securities:

      

      (1)           
        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, 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

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

         

      

      or
        (B) securities assumable upon exercise of Rights pursuant to the terms of
        the
        Company’s Rights Agreement with American Stock Transfer & Trust Company,
        originally dated as of December 12, 1996 between the Company and Firstar
        Trust
        Company, and amended on October 9, 2002, as the same may be further amended
        from
        time to time (or any successor to such Rights Agreement).

      

      (2)           
        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 13d-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 subparagraph (2) as a result of an agreement, arrangement
        or
        understanding to vote such security if the agreement, arrangement 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 13D under the Act
        (or
        any comparable or successor report); or

      

      (3)           
        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 Section 6.01(c)(2)
        above) or disposing of any voting securities of the Company.

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

      

      (d)           
        A “Change in Control of the Company” shall be deemed to have occurred
        if:

      

      (1)           
        any Person (other than any employee benefit plan of the Company or of any
        subsidiary of the Company, any Person organized, appointed or established
        pursuant to the terms of any such benefit plan or any trustee, administrator
        or
        fiduciary of such a plan) is or becomes the Beneficial Owner of securities
        of
        the Company representing at least 30% of the combined voting power of the
        Company’s then outstanding securities;

      

      (2)           
        one-half or more of the members of the Board are not Continuing
        Directors;

      

      (3)           
        there shall be consummated any merger, consolidation, or reorganization of
        the
        Company with any other corporation as a result of which less than 50% of
        the
        outstanding voting securities of the surviving or resulting entity are owned
        by
        the former shareholders of the Company other than a shareholder who is an
        Affiliate or Associate of any party to such consolidation or
        merger;

      

      (4)           
        there shall be consummated any merger of the Company or share exchange involving
        the Company in which the Company is not the continuing or surviving corporation
        other than a merger of the Company in which each of the holders of the Company’s
        Common Stock immediately prior to the merger have the same proportionate
        ownership of common stock of the surviving corporation immediately after
        the
        merger;

      

      (5)           
        there shall be consummated any sale, lease, exchange or other transfer (in
        one
        transaction or a series of related transactions) of all, or substantially
        all,
        of the assets of the 

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

       

      Company
        to a Person
        which is not a wholly owned subsidiary of the Company; or

      

      (6)           
        the shareholders of the Company approve any plan or proposal for the liquidation
        or dissolution of the Company.

      

      (e)           
        “Continuing Directors” means (1) any member of the Board of Directors of
        the Company who was a member of such Board on May 18, 2007, (2) any
        successor of a Continuing Director who is recommended to succeed a Continuing
        Director by a majority of the Continuing Directors then on such Board, and
        (3) additional directors elected by a majority of the Continuing Directors
        then on such Board.

      

      (f)           
        “Person” means 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; provided that in the case of a merger,
        consolidation or reorganization of the Company with any other corporation
        or a
        share exchange involving the Company, the shareholder of the other corporation
        that is a party to the merger, consolidation, reorganization or share exchange
        shall not be considered to be acting in concert for purposes of applying
        subsection (d)(1).

      

      Section
        6.02.  Special Provisions Following Change in
        Control.

      

      Upon
        and following
        the occurrence of a Change in Control of the Company, the provisions of this
        Section 6.02 shall be operative, notwithstanding any provision of the Plan
        to
        the contrary.

      

      (a)           
        A Participant who (1) has been designated as being eligible to participate
        in
        the Supplemental Retirement Benefit component of the Plan, but (2) terminates
        employment from the Company and its Affiliates prior to becoming eligible
        for a
        Supplemental Retirement Benefit under Article IV, shall nevertheless be entitled
        to a Supplemental Retirement Benefit if (1) the Participant has a vested
        benefit
        entitlement under the Retirement Plan, (2) the Participant has completed
        five
        (5) or more years of Credited Service as of the date of his or her Separation
        from 

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

         

      

      Service,
        and (3)
        the Participant’s Separation from Service occurs within three (3) years
        following the date of the Change in Control of the Company.

      

      (1)           
        If the Participant has attained age fifty-five (55) as of the date of his
        or her
        Separation from Service, the benefit shall be calculated and paid as described
        in Articles II and IV, with the exception that with respect to any
        Participant who has completed at least five (5) but fewer than ten (10) years
        of
        Credited Service, the applicable benefit percentage for purposes of Section
        4.03(a)(1) shall be determined in accordance with the schedule set forth
        in
        subparagraph (3) below.

      

      (2)           
        If the Participant has not attained age fifty-five (55) as of the date of
        his or
        her Separation from Service, the benefit shall be calculated and paid as
        described in Articles II and IV, with the exception that:

      

      
        	
                 

              	
                (A)

              	
                With
                  respect
                  to any Participant who has completed at least five (5) but fewer
                  than ten
                  (10) years of Credited Service, the applicable benefit percentage
                  for
                  purposes of Section 4.03(a)(1) shall be determined in accordance
                  with the
                  schedule set forth in subparagraph (3) below;

              

      

      

      
        	
                 

              	
                (B)

              	
                In
                  addition
                  to the early commencement reduction specified in Section 4.03(c)
                  that
                  applies between the ages of fifty-five (55) and sixty-two (62),
                  the
                  benefit calculated under Section 4.03 shall be further reduced
                  to an
                  Actuarially Equivalent amount to reflect benefit commencement prior
                  to the
                  Participant’s attainment of age fifty-five (55).  This is the
                  benefit amount if the benefit is paid in the

              

      

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

         

      

      
        
          	
                   

                	
                   

                	
                   form
                    of
                    a one hundred eighty (180) month period certain installment benefit;
                    and
                    

                

        

         

      

      
        	
                 

              	
                (C)

              	
                If
                  the
                  benefit is paid other than as a one hundred eighty (180) month
                  period
                  certain installment benefit, the benefit shall be further adjusted
                  to
                  convert the one hundred eighty (180) month period certain installment
                  benefit into an Actuarial Equivalent benefit is the form of distribution
                  applicable to the Participant under Article II.

              

      

      

      (3)           
        If the Participant has completed at least five (5) but less than ten (10)
        years
        of Credited Service as of the date of his or her termination of employment,
        the
        applicable benefit percentage for purposes of Section 4.03(a)(1) shall be
        determined in accordance with the following schedule:

      
        	
                
                

                Full
                  Years of Credited
                  Service

              	
                
                

                Applicable
                  Benefit
                  Percentage

              
	
                9

                8

                7

                6

                5

              	
                36%

                32%

                28%

                24%

                20%

                
                

              

      

      (4)           
        For purposes of applying Section 4.07, the reference to “ten (10) years of
        Credited Service” shall be replaced with the phrase “five (5) years of Credited
        Service” each place it appears.

      

      (b)           
        The Board may at any time amend the Plan consistent with Section 6.05 to
        modify
        the terms and conditions applicable to (or otherwise eliminate) benefits
        that
        would otherwise accrue on or after the Amendment Date.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      

      (c)           
        Prior to the occurrence of a Change in Control, the Board may exercise its
        authority under Section 7.05 to amend or terminate the Plan. This may include,
        without limitation, the passage of a resolution that terminates the Plan,
        regardless of whether such resolution is adopted in anticipation of a Change
        in
        Control. On or after the date on which a Change in Control, any amendment
        to the
        Plan or action to terminate the Plan that is not described in subsection
        (b)
        above shall be effective only with the written consent of the Participant
        (or in
        the case of a deceased Participant, the Participant’s Beneficiary).

      

      (d)           
        The term “Amendment Date” means the date on which an amendment to the Plan is
        validly adopted or the date on which the amendment is or purports to be
        effective, whichever is later.

      

      Section
        6.03.  Maximum Payment Limitation.

      

      (a)           
        Except as provided in subsection (b) below, if any portion of the payments
        or
        benefits described in this Plan or under any other agreement with or plan
        of the
        Company (in the aggregate, “Total Payments”), would constitute an “excess
        parachute payment”, then the Total Payments to be made to the Participant shall
        be reduced such that the value of the aggregate Total Payments that the
        Participant is entitled to receive shall be one dollar ($1) less than the
        maximum amount which the Participant may receive without becoming subject
        to the
        tax imposed by Section 4999 of the Code (or any successor provision) or which
        the Company may pay without loss of deduction under Section 280G(a) of the
        Code
        (or any successor provision).  The terms “excess parachute payment”
and “parachute payment” shall have the meanings assigned to them in Section 280G
        of the Code (or any successor provision), and such “parachute payments” shall be
        valued as provided therein.  Present value shall be calculated in
        accordance with Section 280G(d)(4) of the Code (or any successor
        provision).  Within forty (40) days following delivery of notice by
        the Company to the Participant of its belief that there is a payment or benefit
        due the Participant which will result in an excess parachute payment as defined
        in Section 280G of the Code (or any successor provision), the Participant
        and
        the Company, at the Company’s expense, shall obtain the opinion (which need not
        be unqualified) of nationally recognized tax counsel selected by the Company’s
        independent auditors and 

       

      
        
          
          

        

        
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      acceptable
        to the
        Participant (which may be regular outside counsel to the Company), which
        opinion
        sets forth (A) the amount of the Base Period Income, (B) the amount and present
        value of Total Payments and (C) the amount and present value of any excess
        parachute payments determined without regard to the limitations of this
        Section.  As used in this Section, the term “Base Period Income” means
        an amount equal to the Participant’s “annualized includible compensation for the
        base period” as defined in Section 280G(d)(1) of the Code (or any successor
        provision).  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 Sections 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
        Participant.  Such opinion shall be addressed to the Company and
        the  Participant and shall be binding upon the Company and the
        Participant.  If such opinion determines that there would be an excess
        parachute payment, the payments hereunder that are includible in Total Payments
        or any other payment or benefit determined by such counsel to be includible
        in
        Total Payments shall be reduced or eliminated as specified by the Participant
        in
        writing delivered to the Company within thirty days of his or her receipt
        of
        such opinion or, if the Participant fails to so notify the Company, then
        as the
        Company shall reasonably determine, so that under the basis of calculations
        set
        forth in such opinion there will be no excess parachute payment.  If
        such legal counsel so requests in connection with the opinion required by
        this
        Section, the Participant and the Company shall obtain, at the Company’s expense,
        and the legal counsel may rely on in providing the opinion, the advice of
        a firm
        of recognized executive compensation consultants as to the reasonableness
        of any
        item of compensation to be received by the Participant.  If the
        provisions of Sections 280G and 4999 of the Code (or any successor provisions)
        are repealed without succession, then this Section shall be of no further
        force
        or effect.

      

      (b)           
        The provisions of subsection (a) above shall not apply to a Participant whose
        employment is governed by an employment contract that provides for Total
        Payments in excess of the limitation described in subsection (a)
        above.

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      

      Section
        6.04.  Resolution of Disputes.

      

      If,
        after a Change
        in Control, (1) a dispute arises with respect to the enforcement of the
        Participant’s rights under the Plan, or (2) any legal proceeding shall be
        brought to enforce or interpret any provision contained in the Plan or to
        recover damages for breach of the Plan, in either case so long as the
        Participant is not acting in bad faith or otherwise pursuing a course of
        action
        that a reasonable person would determine to be frivolous, the Participant
        shall
        recover from the Company any reasonable attorneys’ fees and necessary costs and
        disbursements incurred as a result of such dispute or legal proceeding
        (“Expenses”), and prejudgment interest on any money judgment obtained by the
        Participant calculated at the rate of interest announced by US Bank Milwaukee,
        Milwaukee, Wisconsin (or any successor thereto), from time to time as its
        prime
        or base lending rate from the date that payments to the Participant should
        have
        been made under this Plan.  Within ten (10) days after the
        Participant’s written request therefore and reasonable substantiation that such
        expenses have been incurred (but in no event later than the end of the calendar
        year following the calendar year in which such Expense is incurred), the
        Company
        shall pay to the Participant, or such other person or entity as the Participant
        may designate in writing to the Company, the Participant’s
        Expenses.  The reimbursement shall be made even though a final
        disposition or conclusion of the dispute or legal proceeding has not been
        entered.  In the case of a deceased Participant, this Section shall
        apply with respect to the Participant’s Beneficiary or estate.

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      

      ARTICLE
        VII.  GENERAL
        PROVISIONS

      

      

      Section
        7.01.  Administration.

      

        The
        Committee shall administer and interpret the Plan and supervise preparation
        of
        Participant elections, forms, and any amendments thereto.  If at any
        time the Committee shall not be in existence, then all determinations affecting
        Participants who are subject to Section 16 of the Securities Exchange Act
        of
        1934 shall be made by the full Board, and all determinations affecting other
        Participants shall be made by the full Board or an officer appointed by the
        Board.  The Committee may, in its discretion, delegate any or all of
        its authority and responsibility.  To the extent of any such
        delegation, any references herein to the Committee shall be deemed references
        to
        such delegee. Interpretation of the Plan shall be within the sole discretion
        of
        the Committee and shall be final and binding upon each Participant and
        Beneficiary.  The Committee may adopt and modify rules and regulations
        relating to the Plan as it deems necessary or advisable for the administration
        of the Plan.  If any delegee of the Committee shall also be an
        eligible Participant or Beneficiary, any determinations affecting the delegee’s
        participation in the Plan shall be made by the Committee.

      

      Section
        7.02.  Claims Procedures.

      

      (a)           
        If a Participant, Spouse or Beneficiary (the “claimant”) believes that he is
        entitled to a benefit under the Plan that is not provided, the claimant or
        his
        or her legal representative shall file a written claim for such benefit with
        the
        Committee no later than ninety (90) days after the first payment is made
        (or
        should have been made) in accordance with the terms of the Plan or under
        Regulations issued by the Secretary of the Treasury under Code Section
        409A.  If the Committee denies the claim, it shall deliver to the
        claimant, within one hundred thirty-five (135) days of the date the first
        payment to the Participant was made (or should have been made) in accordance
        with the terms of the Plan or under Regulations issued by the Secretary of
        the
        Treasury under Code Section 409A, a written notice to the claimant of such
        denial.  The written notice shall include the specific reason(s) for
        the denial; reference to specific Plan provisions upon which the denial is
        based; a description of any additional material or information necessary
        for the
        claimant to perfect the claim and an explanation of why such material or
        information is necessary; and a description of the Plan’s review procedures (as
        set forth in subsection (b)) and 

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

         

      

      the
        time limits
        applicable to such procedures, including a statement of the claimant’s right to
        bring a civil action under section 502(a) of ERISA following an adverse
        determination upon review.

      

      (b)           
        The claimant has the right to appeal the Committee’s decision by filing a
        written appeal with the Committee.  Notice of the appeal must be
        received by the Committee no later than one hundred eighty (180) days after
        the
        first payment is made (or should have been made) in accordance with the terms
        of
        the Plan or under Regulations issued by the Secretary of the Treasury under
        Code
        Section 409A.  The claimant will have the opportunity, upon request
        and free of charge, to have reasonable access to and copies of all documents,
        records and other information relevant to the claimant’s appeal.  The
        claimant may submit written comments, documents, records and other information
        relating to his or her claim with the appeal.  The Committee will
        review all comments, documents, records and other information submitted by
        the
        claimant relating to the claim, regardless of whether such information was
        submitted or considered in the initial claim determination.  The
        Committee shall make a determination on the appeal within sixty (60) days
        after
        receiving the claimant’s written appeal; provided that the Committee may
        determine that an additional sixty (60)-day extension is necessary due to
        circumstances beyond the Committee’s control, in which event the Committee shall
        notify the claimant prior to the end of the initial period that an extension
        is
        needed, the reason therefore and the date by which the Committee expects
        to
        render a decision. If the claimant’s appeal is denied in whole or part, the
        Committee shall provide written notice to the claimant of such
        denial.  The written notice shall include the specific reason(s) for
        the denial; reference to specific Plan provisions upon which the denial is
        based; a statement that the claimant is entitled to receive, upon request
        and
        free of charge, reasonable access to and copies of all documents, records,
        and
        other information relevant to the claimant’s claim; and a statement of the
        claimant’s right to bring a civil action under section 502(a) of
        ERISA.

      

      (c)           
        Notwithstanding anything in the Plan to the contrary, and as a condition
        of
        participating in the Plan, a Participant agrees, on behalf of the Participant
        and all persons or entities that may claim through the Participant, that
        (1) any
        claim for benefits or other legal action or legal proceeding concerning the
        Plan
        may be brought more than one (1) year after the 

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

         

      

      later
        of (A) the
        last date on which the act or omission giving rise to the claim, legal action
        or
        other legal proceeding occurred, or (B) the date the individual or entity
        bringing such claim, legal action or other legal proceeding had knowledge
        (or
        reasonably should have had knowledge) of the act or omission, and (2) that
        any
        legal action or legal proceeding concerning the Plan may only be heard in
        a
“bench” trial and that any right to a jury trial is waived.

      

      Section
        7.03.  Participant Rights Unsecured.

      

      (a)           
        The right of a Participant or his or her Beneficiary to receive a distribution
        hereunder shall be an unsecured claim, and neither the Participant nor any
        Beneficiary shall have any rights in or against any amount credited to his
        or
        her Account or any other specific assets of the Company or an Affiliate.
        The
        right of a Participant or Beneficiary to the payment of benefits under this
        Plan
        shall not be assigned, encumbered, or transferred, except by will or the
        laws of
        descent and distribution. The rights of a Participant hereunder are exercisable
        during the Participant’s lifetime only by the Participant or the Participant’s
        guardian or legal representative.

      

      (b)           
        The Company may set aside assets in the Trust or authorize the creation of
        another trust or other arrangements to assist in meeting the obligations
        created
        under the Plan, subject to the restrictions on funding imposed on such trusts
        by
        Code § 409A(b)(3).  However, any liability to any person with
        respect to the Plan shall be based solely upon any contractual obligations
        that
        may be created pursuant to the Plan.  No obligation of the Company or
        an Affiliate shall be deemed to be secured by any pledge of, or other
        encumbrance on, any property of the Company or an Affiliate.  Nothing
        contained in this Plan and no action taken pursuant to its terms shall create
        or
        be construed to create a trust of any kind, or a fiduciary relationship between
        the Company or an Affiliate and any  Participant or Beneficiary, or
        any other person.

      

      Section
        7.04.  Tax
        Withholding.  The
        Participant shall pay or make arrangements satisfactory to the Committee
        regarding the payment or withholding of, any Federal, state, local or foreign
        taxes of any kind required by law to be withheld with respect to such
        amount.  In addition, if prior to the date of distribution of any
        amount hereunder, the Federal Insurance Contributions Act (FICA) tax imposed
        under Code Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes
        due, the Company may direct that the Participant’s benefit be 

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

         

      

      reduced
        by an
        Actuarially Equivalent amount to reflect the amount needed to pay the
        Participant’s portion of such tax.

      

      Section
        7.05.  Amendment or Termination of Plan.

      

      (a)           
        There shall be no time limit on the duration of the Plan.

      

      (b)           
        Except as otherwise limited pursuant to Section 6.02, the Board may at any
        time amend the Plan, including but not limited to modifying the terms and
        conditions applicable to (or otherwise eliminating) benefit accruals on or
        after
        the Amendment Date (as defined in Section 6.02); provided, however, that
        no
        amendment or termination may reduce or eliminate any benefit accrued to the
        date
        of such amendment.

      

      (c)           
        Subject to Section 6.02, the Board may terminate the Plan in accordance with
        and
        subject to the following provisions. Upon termination of the Plan, future
        accrual of benefits shall cease.

      

      (1)           
        The Board terminates the Plan within twelve (12) months of a corporate
        dissolution taxed under Code Section 331, or with the approval of a bankruptcy
        court pursuant to 11 U.S.C. §503(b)(1)(A),  and  the amounts
        accrued under the Plan but not yet paid are distributed to the Participants,
        Spouses or beneficiaries, as applicable, in a single sum payment, regardless
        of
        any distribution election then in effect, by the latest of: (A) the last
        day of
        the calendar year in which the Plan termination and liquidation occurs, (B)
        the
        last day of the calendar year in which the amount is no longer subject to
        a
        substantial risk of forfeiture, or (C) the last day of the first calendar
        year
        in which payment is administratively practicable.

      

      (2)           
        The Board terminates the Plan at any time during the period that begins thirty
        (30) days prior and ends twelve (12) 

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

         

      

      months
        following a
        Change of Control Event (as defined for purposes of Code Section 409A), provided that all
        arrangements required to be aggregated with this Plan under Code Section
        409A
        are terminated and liquidated with respect to each Participant that experienced
        the Change in Control Event, so that all participants under similar arrangements
        are required to receive all amounts of compensation deferred under the
        terminated arrangements within twelve (12) months of the date of termination
        of
        the arrangements.

      

      (3)           
        The Board terminates the Plan at any other time, provided that such termination
        does not occur proximate to a downturn in the financial health of the Company
        or
        an Affiliate. In such event, all amounts accrued under the Plan but not yet
        paid
        will be distributed to all Participants, Spouses or beneficiaries, as
        applicable, in a single sum payment no earlier than twelve (12) months (and
        no
        later than twenty-four (24) months) after the date of termination, regardless
        of
        any distribution election then in effect. This provision shall not be effective
        unless all other plans required to be aggregated with this Plan under Code
        Section 409A are also terminated and liquidated. Notwithstanding the foregoing,
        any payment that would otherwise be paid during the twelve (12)-month period
        beginning on the Plan termination date pursuant to the terms of the Plan
        shall
        be paid in accordance with such terms. In addition, the Company or any Affiliate
        shall be prohibited from adopting a similar arrangement within three (3)
        years
        following the date of the Plan’s termination, unless any individual who was a
        Participant under this Plan is excluded from participating thereunder for
        such
        three (3) year period.

      

      (4)           
        Except as provided in Paragraphs (1), (2) and (3) above or as otherwise
        permitted in regulations promulgated by the 

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

         

      

      Secretary
        of the
        Treasury under Code Section 409A, any action that purports to terminate the
        Plan
        shall instead be construed as an amendment to discontinue further benefit
        accruals, but the Plan will continue to operate, in accordance with its terms
        as
        from time to time amended in accordance with Sections 6.02 and 7.05, and in
        accordance with applicable Participant elections, with respect to the
        Participant’s benefit accrued through the date of termination, and in no event
        shall any such action purporting to terminate the Plan form the basis for
        accelerating distributions to Participants and Beneficiaries.

      

      (5)           
        If single sum payments are made in accordance with this Section 7.05, the
        single
        sum distribution amount applicable to Participant’s Pension Restoration Benefit
        and Supplemental Retirement Benefit shall be determined in accordance with
        Sections 3.03 and 4.04 as if the date on which the Plan will make the single
        sum
        distributions is the Calculation Date (and the single sum distribution amount
        attributable to the Participant’s Special Defined Contribution Credits will be
        equal to the value of the Participant’s account immediately prior to
        distribution).

      

      Section
        7.06.  Administrative
        Expenses.  Costs
        of
        establishing and administering the Plan will be paid by the Company and its
        Affiliates.

      

      Section
        7.07.  Effect
        on Other Employee
        Benefit Plans.  Benefits
        accrued by a Participant under this Plan shall not be considered “compensation”
for the purpose of computing benefits under any employee benefit plan maintained
        by the Company or an Affiliate.

      

      Section
        7.08.  Successor
        and
        Assigns. 
        Plan shall be
        binding upon and inure to the benefit of the Company and its Affiliates,
        their
        successors and assigns and the Participants and their heirs, executors,
        administrators, and legal representatives.

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

      

      Section
        7.09.  Additional Section 409A Provisions.

      

      (a)           
        Accelerated
        Distribution Following Section 409A Failure.  If an amount
        under this Plan is required to be included in a Participant’s income under Code
        Section 409A prior to the date such amount is actually distributed, the
        Participant shall receive a distribution, in a lump sum, within ninety (90)
        days
        after the date it is finally determined that the Plan fails to meet the
        requirements of Code Section 409A.  The distribution shall equal the
        amount required to be included in the Participant’s income as a result of such
        failure.

      

      (b)           
        Permitted Delay
        in
        Payment.  If a distribution required under the terms of this
        Plan would jeopardize the ability of the Company or of an Affiliate to continue
        as a going concern, the Company or the Affiliate shall not be required to
        make
        such distribution.  Rather, the distribution shall be delayed until
        the first date that making the distribution does not jeopardize the ability
        of
        the Company or of an Affiliate to continue as a going
        concern.  Further, if any distribution pursuant to the Plan will
        violate the terms of Section 16(b) of the Securities Exchange Act of 1934
        or
        other Federal securities laws, or any other applicable law, then the
        distribution shall be delayed until the earliest date on which making the
        distribution will not violate such law.

      

      (c)           
        Compliance With
        Section 409A Transition Rules.  With respect to a Participant
        whose benefit is paid or commences to be paid on or before December 31, 2008,
        taking into account the required six month delay in the payment commencement
        date under Code Section 409A(a)(2)(B), the form and time of distribution
        applicable to the Participant shall be determined in accordance with the
        terms
        of the Plan as in effect on March 31, 2008, i.e., in accordance with the
        Internal Revenue Service transition rules under Code Section 409A, the April
        1,
        2008 amendment and restatement of the Plan shall not affect the form and
        time of
        distribution for a Participant whose benefit is paid (or commences to be
        paid)
        in 2008.

      

      Section
        7.10.  Offset.

      

      The
        Company shall
        have the right to offset, without the requirement of obtaining the consent
        of
        the Participant (or his Spouse or Beneficiary, in the event of the Participant’s
        death),  

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

         

      

      from
        the benefits
        payable hereunder any amount (up to the maximum amount that may be deducted
        without violating Code Section 409A) that the Participant owes to the Company
        or
        any Affiliate.

      

      INTEGRYS
        ENERGY GROUP, INC.

      

      By:______________________________                                                                           
        

      

      Title:______________________________                                                                                      
        

      

      Date:______________________________                                                                                      
        

      
        
          
          

        

        
          52Exhibit 10.1

Separation Agreement and General Release

Bruce P. Nolop 

1170 Fifth Avenue 

New York, New York 10029-6527

Dear Bruce:

This letter agreement (the “Agreement”) is by and between you and Pitney Bowes Inc. and/or its parent, subsidiaries, affiliates, divisions, related business entities, and with respect to each of them, their
predecessors, successors, and assigns, employee benefit plans or funds, and with respect to each such entity, all of its or their past, present and/or future directors, officers, attorneys, fiduciaries, representatives, shareholders, agents,
employees, heirs, personal representatives, benefit plans, trustees, administrators and assigns, whether acting on behalf of a company entity or in their individual capacities (collectively the “Company Entities”). Your Benefit
Information, regardless of whether you sign this Agreement, is provided in a separate document. 

Because of the subject of this letter, its tone necessarily is formal. However, on behalf of the Company Entities, I want to express our sincere appreciation for the contributions you have made during your employment. I also
want to convey to you our best wishes for your future. 

This Agreement supersedes any and all previous agreements, either signed or unsigned, except that you specifically agree to continue to be bound by any patent or intellectual property provisions; any restrictive covenant
provisions regarding, without limitation, non-competition, non-solicitation and non-disclosure; any non-disparagement provisions; and any Proprietary Interest Protection Agreement, all of which shall specifically survive and continue in full force
and effect.

1.    SEPARATION DATE:

  Your last day of work for Pitney
      Bowes Inc. (the “Company”) will be April
      15, 2008. Your Separation Date will
      be April 16, 2008.

    

5

	
2.    	
SEVERANCE TERMS AND CONDITIONS:

  
	 
	 	
a.   	
Base Severance. Under the Company’s Severance Pay Plan, you are eligible to receive one (1) week of Base Severance for each year of service (or fraction
thereof) but no less than two (2) weeks pay at your base salary rate of $606,500.00 in effect as of your Separation Date. You will have 8.25 year(s) of service as of your Separation Date. Therefore, you will be
eligible to receive 8.5 weeks of Base Severance, which in total is equal to the gross sum of $99,139.42 less
applicable withholdings and deductions. You are eligible to receive Base Severance even if you do not sign this Agreement. Because you are considered a “key employee” as defined under Internal Revenue Code Sections 416 and 409A, your
Base Severance, to which you are entitled under the Severance Pay Plan, will be aggregated with the portion of the Enhanced Severance payable in a stream as provided in Paragraph 2.b. and that aggregated balance will be paid to you in a stream of
payments as described in Paragraph 2.b. below. As used in this Agreement, the term Base Severance Period means the period from your Separation Date through to the end of the period in which you are receiving Base Severance.

  
	 
	 	
b.   	
Enhanced Severance. If you sign this Agreement and comply with all of its terms, you also will be eligible to receive Enhanced Severance in the amount of
$2,530,044.51, less applicable withholdings and deductions. Of that sum, $736,903.93, less applicable withholdings and deductions shall be paid in a lump sum as soon as practicable
after your last day worked. The balance of your Enhance Severance, $1,793,140.58, will be aggregated with your Base Severance, $99,139.42, and the aggregated balance will be paid to you in a stream of approximately equal installments, less
applicable withholding and deductions, on regular paydays over a period beginning six months after your Separation Date and ending on April 15, 2010. As used in this Agreement, the term Enhanced Severance Period means the period from the date the
Base Severance ends to April 15, 2010.

  
	 
	 	
c.   	
By operation of the Pitney Bowes Pension Plan and the Pitney Bowes Pension Restoration Plan your Base Severance and, if you sign this Agreement, $2,238,669.51 of your Enhanced Severance will be used as
pensionable earnings in calculating your pension benefit under the Pension Plan or the Pension Restoration Plan, as the case may be.

  
	 
	 	
e.   	
You will be paid for any earned and unused vacation pay in a lump sum as soon as practicable after your last day worked.

  
	 
	 	
f.   	
You agree that any money you owe the Company may be deducted from any Severance paid, subject to applicable law.

  
	 
	 	
g.   	
Any Flex Dollars and Life Anniversary Dollars will cease upon your Separation Date. If you sign this Agreement and comply with all of its terms, your Flex Dollars will continue through the period during
which you are entitled to the active employee rate.

  
	 

6

	 	
h.   	
Payment of any Severance is contingent upon your performance of your job responsibilities at acceptable levels through your Separation Date.
  
	 
	 	
i   	
For purposes of this Agreement, the term Severance Period means the period from your Separation Date through to the end of the period in which you are receiving any severance payments.
  
	 
	
3.   	
PENSION PLAN AND RETIREE MEDICAL PLAN COVERAGE:

  
	 
	 	
a.   	
You are fully vested in the Pitney Bowes Pension Plan (“Pension Plan”). In order to qualify for early retirement under the Pension Plan, however, you need Credited Service until January 10, 2010. Although you currently are not eligible for early retirement under the Pension Plan, if you sign this Agreement, the Pension Plan and the Pension Restoration Plan, as the case
may be, provide that the entire Severance Period counts for purposes of bridging service to an Early Retirement eligibility date, in your case January 10, 2010. As your Severance
Period extends from your Separation Date to April 14, 2010, you will have sufficient Credited Service for Early Retirement under the Pension Plan and Pension Restoration Plan, if you sign this Agreement.

  
	 
	 	
b.   	
If you sign this Agreement, you will be eligible to continue to participate in the Pitney Bowes medical, prescription, and dental plans on the same basis as active employees during your Severance Period.
The active employee rate is subject to change annually effective January 1st. You will be eligible to participate in benefit plans for retirees, including medical,
prescription drug and/or dental coverage, after your Severance Period ends. Alternatively, you may elect coverage under COBRA when your active coverage ceases at the end of your Severance Period. Shortly after the end of your Severance Period,
Hewitt Associates LLC will mail a kit containing COBRA information to your home.

  
	 
	 	 	
You will be direct billed for this coverage on a monthly basis. Hewitt administers the active employee rate coverage through its COBRA system. You should read the COBRA notice carefully and make the
appropriate election for active medical coverage. You must make that election to activate your coverage. This election will not negate the fact that you will be eligible for COBRA coverage for the full COBRA period when your active coverage ceases.
At that time you will also be eligible for retiree medical coverage.

  
	 
	 	
c.   	
If you do not sign this Agreement, your current active-employee medical, prescription drug and dental coverage elections and related costs will continue until the end of the month in which your employment
terminates. Thereafter, you have the right to elect to continue your Pitney Bowes medical, prescription drug and/or dental coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) generally for up to 18 months after your coverage as
an active employee ends at the full COBRA rate. Shortly after your Separation Date, Hewitt Associates will mail a kit containing COBRA information to your home. You will be required to submit your COBRA election
form and payment directly to Hewitt Associates (through the Pitney Bowes Services

  
	 

7

	 	Center) to continue your
          coverage at the full COBRA
          rate. Failure
          to provide payment may result in a lapse of coverage. 

     Coverage may cease before the
        end of the COBRA period if certain events take place (please refer to “Your
        Benefits Information Handbook” for more information). When the
        COBRA period has ended you may be offered coverage under your provider's
        individual coverage conversion provision, if offered by the Provider.
        The individual coverage offered may not be the same coverage offered
    under the active or COBRA plan.  

	 	 
	
4.   	
LIFE INSURANCE COVERAGE:
  
	 
	 	
If you sign this Agreement and comply with all its terms, you will receive Company- provided term life insurance coverage equal to one year of your base salary in effect as of your Separation Date for the
full term of your Severance Period (the “Extended Coverage Period”). There is no employee-paid monthly premium for this life insurance coverage but you will have imputed income based on this coverage pursuant to tax law to the extent the
coverage exceeds $50,000. If, however, at any time during the Extended Coverage Period, you accept new employment and become eligible for life insurance coverage from your new employer, or if you retire, your Extended Coverage Period will
immediately terminate.

  
	 
	
5.    	
TRANSITIONAL SUPPORT:
  
	 
	 	
If you sign this Agreement and comply with all of its terms, you will be eligible to receive transitional support for a period of up to six months or, if sooner, until such time as you commence other
employment (“Transitional Support Period”). Transitional support expenses will not exceed $40,000. You agree to be available for consultation with respect to Company business during the Transitional Support Period.

  
	 
	
6.    	
EXECUTIVE FINANCIAL COUNSELING:
  
	 
	 	
If you sign this Agreement and comply with all of its terms, you shall continue to be provided with professional financial counseling and tax preparation services at the Company’s sole expense for a
period of 24 months following the Effective Date up to an amount not to exceed $21,000.00 per calendar year (or pro rata portion for a partial calendar year) or such higher amount established by the Company on a uniform basis for similarly situated
executives.

  
	 
	
7.    	
CASH INCENTIVE UNITS:
  
	 
	 	
The Company shall pay you a prorated payout of outstanding Cash Incentive Units (“CIUs”) pursuant to the KEIP at the close of each respective cycle in accordance with the terms of KEIP. The
payout of CIUs shall be based on your total number of completed months of active service with the Company during each 36-month CIU cycle and on the achievement of performance-based targets associated with the CIUs. For purposes of this prorated
calculation, the targeted payout shall be multiplied by a fraction, the

  
	 

8

	 	
numerator of which is your total number of completed months of active service with the Company through the Separation Date during the particular CIU cycle and the denominator of which is 36.

  
	 
	
8.    	
STOCK OPTIONS AND RESTRICTED STOCK:
  
	 
	 	
If you sign this Agreement, in accordance with the terms of Pitney Bowes Severance Policy – Treatment of Stock Options and your Award Agreement, stock options granted to you before your Separation
Date that are at least partially vested as of your Separation Date will continue to vest after your Separation Date until January 10, 2010 when all outstanding unvested stock options will vest and remain exercisable until the award expiration date
set forth in the respective Stock Option Award Agreement. Any stock options granted to you for which no vesting has occurred as of your Separation Date (generally within one year of your Separation Date) are automatically forfeited on your
Separation Date. The restricted stock award issued to you on October 7, 2004 will forfeit on your Separation Date. If you have any outstanding incentive stock options (“ISOs”) outstanding for more than one year on your Separation Date,
you must exercise those options within 90 days of your Separation Date, in order to receive the favorable tax treatment accorded to ISOs. Exercising ISOs after that period will result in the options being treated as nonqualified stock options for
tax purposes.

  
	 
	 	
If you wish to arrange for a “cashless exercise” of your stock options, the necessary exercise forms must be properly completed and submitted to ComputerShare no later than 2:30 p.m. (E.S.T.) on
the expiration date (or 11:30 a.m. of the expiration date if on that day the New York Stock Exchange is closing at 1:00 p.m.). If your expiration date falls on a weekend or holiday, you must submit your exercise form not later than the time
specified above on the last business day before the expiration date. You can fax your exercise form to ComputerShare at 201-222-4737. If you fail to follow this procedure relating to your exercise deadline, you will not be permitted to exercise your
options and your options will be forfeited and they will not be reinstated. Contact ComputerShare at 1(888) 44-PITNEY if you have questions regarding exercise procedures.

  
	 
	
9.    	
RETURN OF PROPERTY:
  
	 
	 	You agree that you have returned or will return
    by your Separation Date all property belonging or licensed to the Company
    or Company Entities, including but not limited to, office equipment, computers,
    laptops, peripherals, hardware, software, manuals, databases, computerized
    data, pagers, cellular phones, blackberries or similar devices, keys, identification
    cards, card access to Company or customer buildings and any documents and
    files, regardless of format, provided to or created by you in the course
    of your employment by the Company. Notwithstanding the above, you may keep
    the Company-provided laptop and docking station, if applicable, assigned
    to you once the Company proprietary information on the laptop is deleted
    by desktop support. Please coordinate with Bruce Donatuti two weeks prior
    to your Separation Date to have the computer scrubbed by desktop support.
    In addition as you will be available for

	 	 

9

	 	
consultation with Company representatives, you may keep your company issued cell phone and the Company will reimburse your monthly usage during your Transitional Support Period.

  
	 
	
10.    	
WAIVER & RELEASE:
  
	 
	 	
a.   	
By signing this Agreement, you agree
    that in exchange for the payments and other benefits and consideration contained
    in this Agreement to which you are not otherwise entitled, you, on behalf
    of your heirs,  executors, administrators, trustees, legal representatives
    and assigns, forever release and discharge the Company Entities from any
    and all claims, actions, suits, demands, obligations, losses, liabilities,
    debts, obligations for damages (including  but not limited to compensatory,
    exemplary and punitive damages), expenses, back pay, reinstatement, attorneys’ fees
    and costs whether known or unknown, against any of the Company Entities,
    arising up to and including the date you sign this  Agreement, including
    but not limited to claims arising under Title VII of the Civil Rights Act
    of 1964; the Civil Rights Act of 1991; the Equal Pay Act of 1963, the Age
    Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
     Act of 1990, the Americans With Disabilities Act of 1990; the Employee Retirement
    Income Security Act of 1974; the Sarbanes-Oxley Act of 2002; the Worker Adjustment
    and Retraining Notification Act of 1988; the National Labor Relations Act;
    42 U.S.C.
§1981; the Connecticut Fair Employment Practices Act; the Connecticut Family
and Medical Leave Law; the Connecticut Age Discrimination and Employee Insurance
Benefits Law; the Connecticut Smokers’ Rights Law; the New York State Human
 Rights Law; the New York City Human Rights Law; and the New York Labor Law and
any and all other claims arising under or out of any other federal, state, or
local statute, law, constitution, ordinance or regulation or any other claims
sounding in  tort or contract, including but not limited to claims relating to
express or implied contracts, public policy, negligence, personal injury, emotional
distress, invasion of privacy, detrimental reliance, promissory estoppel, common
law claims or any  other claims arising out of or relating to your employment
with the Company. Specifically, and without limitation, you waive any rights
that you may have under the Pitney Bowes Incentive Program and the Key Incentive
Program and agree that no additional cash incentives or payments are owed to
you, except as provided herein.
  
	 
	 	
b.   	
Without detracting in any respect from any other provision of this Agreement, you, in consideration of the payments and benefits provided to you in this Agreement, agree and acknowledge that this Agreement
constitutes a knowing and voluntary waiver of all rights or claims you have or may have against the Company Entities as set forth herein, including, but not limited to, all rights or claims arising under the Age Discrimination in Employment Act of
1967 (“ADEA”), as amended, including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA.
  
	 
	 	
c. 

  	You affirm that you have been paid for
  all hours worked, for all accrued vacation or other accrued time off, except
  for any accrued vacation payable as soon as practicable after your last day
  of work, and have not suffered any on-the-job personal injury for which you
  have not already filed a claim. You further affirm that as of the date you
  sign this

	 

10

	 	
 

  	Agreement you have been allowed to take
  all leave and afforded all other rights to which you are entitled under the
  Family and Medical Leave Act (FMLA) and under any applicable state Family
  and Medical Leave Acts and affirm that the Company has not in any way interfered
  with, restrained or denied your exercise of (or attempt to exercise) any
  federal and/or state FMLA rights, nor terminated or otherwise discriminated
  against you for exercising (or attempting to exercise) any such rights.

	 
	 	
d.   	
To the fullest extent of the law and subject to the provisions of paragraph (e) below you represent and affirm that (i) you have not filed or caused to be filed, on your behalf, or are not aware of any
lawsuit, complaint or claim for relief against any of the Company Entities, and you will not file or cause a filing on your behalf any lawsuit, complaint or claim for relief against any of the Company Entities; and (ii) you have no knowledge of any
purported improper, unethical or illegal conduct or activities and have not reported any such conduct or activities to any supervisor, manager, department head, Human Resources representative, Corporate Compliance representative, agent or other
representative of the Company, to any member of the Company’s legal or compliance departments, to PB Resolve, or to the Ethics Hotline.
  
	 
	 	
e.   	
Nothing in this Agreement shall prohibit or restrict you from (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any
investigation or proceeding brought by any federal or state regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s legal or compliance departments; or (iii) testifying, participating in or
otherwise assisting in a proceeding relating to an alleged violation of the Sarbanes- Oxley Act or any federal, state or municipal law relating to fraud or any rule or regulation of the Securities and Exchange Commissioner, or any self-regulatory
organization.
  
	 
	
11.    	
NON-WAIVER OF VESTED OR LEGAL RIGHTS:
  
	 
	 	
By signing this Agreement you are not releasing any rights or claims which cannot be released by law including: (1) any and all accrued
or vested benefits subject to the terms of applicable Company benefit plans and COBRA (for example, vested pension rights, COBRA rights to continued coverage for medical, prescription and dental, and conversion to individual coverage for life
insurance); (2) claims that may arise after the date that you sign this Agreement; (3) workers’ compensation claims; or (4) your right to file a charge with an administrative agency such as the Equal Employment Opportunity Commission; however
you are waiving all rights to recover money in connection with any such charge.

  
	 
	
12.    	
COOPERATION:
  
	 
	 	
You agree to cooperate fully with reasonable requests in the handling or investigation of any administrative charges, government inquires or lawsuits involving Pitney Bowes and its subsidiaries that relate
to matters that arose while you were an employee of Pitney Bowes. The Company will reimburse you for any reasonable out-of-pocket expenses

  
	 

11

  you incur by reason of such cooperation,
      including any loss of income. Pitney Bowes will make reasonable efforts
      to minimize any interruption to your life in connection with your cooperation
      in such matters as provided for in this paragraph.

13.   POST
        EMPLOYMENT OBLIGATIONS:

	
a.     	
You have certain post-employment obligations set forth in the PIP that you previously signed. This PIP survives this Agreement and is incorporated herein by reference. A copy of the PIP is
attached.
  
	 
	
b.   	
Given your position with the Company, you had access to proprietary information which is information not made available to the public and is maintained as confidential by the Company including, but not
limited to, Company procedures, scientific or technical knowledge or production information; business information of the Company including, but not limited to, marketing and business plans and strategies; customer identities, lists, needs or current
or proposed product usage; current or proposed product and equipment costs, specifications and pricing, licensing arrangements, and internal financial information, personnel information including personnel lists, resumes, performance evaluations and
organization structures; and, passwords or access codes to Company data bases. You agree that you hold and will hold all such information (including information as to the termination of your employment hereunder) in a fiduciary capacity for the
benefit of the Company, and will not disclose to any third party or use for your benefit or that of any third party, any proprietary information other than what is reasonably appropriate in connection with your securing other employment or
engagements.
  
	 
	
c.   	
You agree that neither you nor anyone
    acting at your direction shall at any time denigrate, through adverse or
    disparaging communication, written or oral, whether true or not, the operations
    or business of  the Company or its current or former employees, including,
    without limitation, the expression of personal views, opinions or judgments.
    Further, following the Separation Date, you shall refrain from making any
    statement, communication or publication that disseminates or publicizes confidential
    information about, places in a false light, defames, disparages or holds
    up to ridicule the Company or its past or present officers, management or
    employees.
  
	 
	 	
The provisions of this paragraph shall not apply to any truthful statement required to be made by you only as a result of a subpoena or other legal compulsion in any court proceeding of government or
regulatory investigation. You further agree to notify the Company’s Office of the General Counsel within three (3) working days of your receiving any such legal process, which refers to the Company.

  
	 
	
d.   	
You further acknowledge that your breach of the Agreement will result in irreparable and continuing damage to the Company for which monetary damages would be an inadequate remedy. In the event of any such
breach or threatened breach by you, the Company shall be entitled to insist upon specific performance of this Agreement, and the Company shall be entitled to preliminary and permanent injunctive relief.
  
	 
	
e.   	
Separately, if you should violate any of the provisions of this Agreement, particularly your Post-Employment Obligations, the Company shall have the right, as allowed by
  
	 

12

	 	
law, to terminate any Enhanced Severance, benefit, including benefit subsidization, and any other consideration that is conditioned on you signing this Agreement. The Company shall also be entitled to, as
allowed by law, disgorgement of any payments made to you while you were in violation of your Post-Employment Obligations.

  
	 
	
14.   	
ENFORCEABILITY/NON-ADMISSION:

  
	 
	 	
If one or more provisions or terms of this Agreement shall be ruled unenforceable, you understand that the Company may elect to enforce this Agreement or cancel it.

  
	 
	
15.    	
MATERIAL BREACH:

  
	 
	 	
The Company at any time during the period of this Agreement, at its sole discretion, reserves the right to cancel any additional pay, benefits or additional considerations beyond statutory mandates, if it
is discovered that you have willfully failed to comply with any material provisions of this Agreement.

  
	 
	
16.   	
TAXATION:

  
	 
	 	
Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by
applicable laws and regulations. Notwithstanding anything to the contrary, the Company does not guarantee the tax treatment of any payments and benefits under this Agreement, including without limitation pursuant to the Internal Revenue Code
(“Code”) or any other applicable federal, state or local law and any guidance issued there under.

  
	 
	 	
You acknowledge that you have been advised by this writing to consult with counsel of your own choosing on all issues relating to this Agreement, including the tax treatment of all payments and benefits and
Code Section 409A.

  
	 
	
17.    	
FOR TOP 50 PAID “KEY EMPLOYEES”

  
	 
	 	
Notwithstanding anything in this Agreement to the contrary, it is the intention of the Company and you that, to the extent applicable, this Agreement comply with Code Section 409A and any guidance issued
thereunder, and this Agreement and the payment of any benefits hereunder shall be interpreted, operated and administered accordingly. The Company and you agree to cooperate and negotiate in good faith to adjust this Agreement (if necessary) and the
payments and benefits hereunder to comply with Code Section 409A and such guidance (but without additional consideration being provided to you) so as to avoid the imposition of any additional taxes, penalties or costs.

  
	 

13

	
18.    	
TIME TO CONSIDER AGREEMENT AND EFFECTIVE DATE:
  
	 
	 	
a.   	
Acceptance:
  
	 	
Please review this Agreement carefully with the person of your choice, including an attorney, before signing it. You have twenty-one (21) days to consider this Agreement.

  
	 
	 	
b.   	
Revocation:
  
	 
	 	
After signing this Agreement, you still have seven (7) calendar days to revoke this Agreement by written notice to the Company (the “Revocation Period”). If you chose to revoke this Agreement,
your written notice of revocation must be received by the Company by 9:00 a.m. on the eighth day after you sign this Agreement. You may fax your notice of revocation to Pitney Bowes Business Operations at (203)
207-8569 or mail it to Pitney Bowes, Attention: Business Operations, 27 Waterview Drive, MSC #2C 750, Shelton, CT 06484.

  
	 
	 	
If you revoke your Agreement, the terms of this Agreement shall become null and void.

  
	 
	 	
c.   	
Effective Date:
  
	 
	 	
  If you do not timely revoke it,
      this Agreement shall become effective automatically upon the expiration
      of the Revocation Period (the “Effective Date”), which is the
      eighth (8th)
      calendar day after it is executed.

	 
	
19.    	
NO ORAL RELIANCE OR UNILATERAL MODIFICATION:
  
	 
	 	
You agree that you have relied only on the terms set forth in this Agreement and not on any representation or statement made by a Company employee, agent or representative, in accepting this Agreement. The
Agreement will not be effective or accepted if modified by you unilaterally without the consent and agreement of the Company. This Agreement may be modified or changed only if in
writing signed by you and the Company or its successors in interest.

  
	 
	
20.    	
NO ADMISSION:
  
	 
	 	
This Agreement does not constitute an admission by the Company of any liability whatsoever, or as an admission by the Company of any violation of your rights, or violation of any order, law, statute, duty,
or contract liability to you on the part of the Company, its employees or agents or related companies or their employees or agents.

  
	 

14

	
21.    	
STATE LAW:
  
	 
	 	
This Agreement will be governed by and construed and interpreted in accordance with the laws of the State of Connecticut without regard to principles of conflicts of law. You specifically consent to the
exclusive jurisdiction and venue in the state and federal courts of Connecticut.

  
	 
	
22.    	
ACKNOWLEDGMENTS:
  
	 
	 	
You acknowledge that you: (a) have carefully read this Agreement in its entirety; (b) have had the opportunity to consider the terms of this Agreement for at least 21 calendar days; (c) are and have been
advised by the Company, in this writing, to consult with an attorney of your choice before signing this Agreement; (d) fully understand the significance of all of the terms and conditions of this Agreement, have no physical or mental impairment of
any kind that has interfered with your ability to read and understand the meaning of this Agreement or its terms, and have discussed them with an attorney of your choice, or have had a reasonable opportunity to do so; and (e) are signing this
Agreement voluntarily and of your own free will and agree to abide by all of the terms and conditions contained herein.

  
	 
	 	
Very truly yours,

  
	 
	 
	 	  /s/ Johnna Torsone  

    Johnna Torsone 

    SVP and Chief Human Resources Officer

    

    

      /mm: 

 

 

 

 

15

	SEPARATION AGREEMENT AND GENERAL RELEASE

I have read this SEPARATION AGREEMENT AND GENERAL RELEASE and I understand all of its terms. I enter into and sign this AGREEMENT knowingly and voluntarily, with full knowledge of what it means. 

  	         /s/
      Bruce P. Nolop 

	Bruce P.
      Nolop 

 

 

 

  	      April
      14, 2008                                    
	                   (Date) 

 

	
STATE OF_______ Connecticut _____________  
	
                     )ss  
	
COUNTY OF _________ Fairfiled _________  

 

On this      14th                          day
  of        April               2008         , before me personally came                          Bruce
    P. Nolop                               to
      me known and known to me to be the individual described in, and who executed
      the foregoing Separation Agreement and General Release, and duly acknowledged
      to me that he executed the  same. 

 

 

  	                /s/
          Mary E. Burke 
	Notary Public 

 

 

16

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