Document:

exh10-1.htm

EXHIBIT 10.1

 

 

 

PERFORMANCE SHARE UNIT AWARD AGREEMENT

Helix Energy Solutions Group, Inc.

2005 Long-Term Incentive Plan

(As Amended and Restated Effective May 9, 2012)

 

 

This Performance Share Unit Award Agreement (the “Agreement”) is made by and between Helix Energy Solutions Group, Inc. (the “Company” or “Helix”) and ____________ (the “Employee”) effective as of_______, 20___ (“Grant Date”), pursuant to the Helix Energy Solutions Group, Inc. 2005 Long-Term Incentive Plan (As Amended and Restated Effective May 9, 2012) (the “Plan”), which is incorporated by reference herein in its entirety.

 

WHEREAS, the Company desires to grant to the Employee the performance share units specified herein (the “Units”), subject to the terms and conditions of the Plan and the terms and conditions of this Agreement; and

 

WHEREAS, the Employee desires to be granted the Units subject to the terms and conditions of this Agreement and the Plan;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.           The Plan.  The Plan, a copy of which has been made available to the Employee, is incorporated by reference and made a part of this Agreement as if fully set forth herein. This Agreement uses a number of defined terms that are defined in the Plan or in the body of this Agreement. These defined terms are capitalized wherever they are used.

 

2.           Award.

 

(a) The Compensation Committee of the Board of Directors of the Company (the “Committee”) has awarded to the Employee, and on the Grant Date, the Company hereby grants to the Employee, _____ Units, which constitute Restricted Stock Units under the Plan and which are subject to the terms and conditions of this Agreement and the Plan.  The Employee has the opportunity to earn up to 200% of the _______ Units granted hereby based upon the performance criteria described in Section 2(c) and subject to satisfaction of the Threshold Goal described in Section 2(b).

 

(b) None of the Units granted hereby shall vest, and all such Units shall be cancelled and forfeited, unless the Company has positive EBITDA (as defined below) for any calendar quarter occurring during the Performance Period (as defined below), and with respect to the calendar quarter in which the Grant Date occurs, no more than 25% of such quarter has elapsed prior to the Grant Date (the “Threshold Goal”).  If the Committee, in its sole discretion, determines that the Company has attained the Threshold Goal, the Committee shall certify such achievement in writing as soon as reasonably practicable but no later than the [Date] 

 

  

  

  

 

immediately following the end of the Performance Period.  For purposes of this Agreement, “EBITDA” means, for the relevant period, net income from continuing operations plus income taxes, depreciation and amortization expense, and net interest expense and other.  Provided that the Threshold Goal has been attained, depending on the Company’s achievement of the performance goals specified in Section 2(c) during the three-year period beginning________, 20__ and ending ____________, 20__ (the “Performance Period”), the Employee shall be entitled to a payment equal to the value of the Units determined pursuant to Section 2(d) if, except as otherwise provided in Section 3, the Employee remains actively employed with the Company and/or its Affiliate(s) through the end of the Performance Period.

 

(c)           The amount paid with respect to the Units shall be based upon the Company’s total shareholder return relative to the total shareholder return of the Company’s “Peer Group” listed on Schedule A attached hereto (“Relative TSR”).  The top and bottom performer shall be excluded from the group.  The remaining peers shall then be grouped into quintiles as follows:

 

	
Helix’s Percentile

Rank

	
Payout as % of Target Award

	
Highest quintile

	
200%

	
Second highest quintile

	
150%

	
Middle quintile

	
100%

	
Second lowest quintile

	
50%

	
Lowest Quintile

	
0%

 

and compared against the Company.

 

“Total Shareholder Return” or “TSR” = (Ending Stock Price – Beginning Stock Price + Dividends, if any, paid over the Performance Period)/Beginning Stock Price.

 

Ending and Beginning Stock Price = the average Stock Price for the 20 trading days prior to the ending and beginning dates of the Performance Period.

 

Stock Price = the closing price for the day as reported on the applicable exchange or market.

 

TSR of the Company or any member of the Peer Group shall be equitably adjusted to reflect any spin off, stock split, reverse stock split, stock dividend, recapitalization, or reclassification or other similar change in the number of outstanding shares of common stock.

 

(d)           The amount payable to the Employee pursuant to this Agreement, if any, shall be paid in shares of Stock of the Company, unless the Committee determines to make such payment in whole or in part in cash.  Any Units payable to the Employee shall be calculated by multiplying the number of Units awarded to the Employee by the Performance Percentage set forth above for the level of achievement of the performance criteria set forth in Section 2(c).  By way of example, if the Company’s TSR was most closely aligned to those peers in the middle quintile, 100% of the Units would be payable to the Employee.  The cash value payable shall be 

 

  

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determined by multiplying the number of Units payable by the Fair Market Value of a share of Stock on the date determined by the Committee.

 

(e)           Except as provided in Section 3(b), payment of amounts due shall be made on the March 15 immediately following the end of the Performance Period.  

3.           Early Termination; Change of Control.

 

(a)           In the event of the Employee’s termination of employment prior to the end of the Performance Period due to (i) death, (ii) disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) (“Disability”), or (iii) Retirement (as hereinafter defined), the Employee shall vest in a number of Units determined by

multiplying the number of Units granted by a fraction, the numerator of which is the number of full months between the beginning of the Performance Period and the date of termination due to death, Disability or Retirement and the denominator of which is thirty-six (36).  The Committee shall determine the number of Units vested and the amount to be paid to the Employee or his estate in accordance with Section 2(e) based on the Relative TSR performance criteria for the entire Performance Period.  As used herein, “Retirement” is defined as the voluntary termination of employment at or after age 55 with at least five years of service and the Employee not, at any time on or before the date that is two years following termination of employment, accepting employment with, acquiring a 5% or more equity or participation interest in, serving as a consultant, advisor, director or agent of, directly or indirectly soliciting or recruiting any employee of the Company who was employed at any time during Employee’s service with the Company, or otherwise assisting in any other capacity or manner any company or enterprise that is directly or indirectly in competition with or acting against the interests of the Company or any of its lines of business, except for any service or assistance that is provided at the request or with the written permission of the Company. Any accelerated vesting pursuant to this Section 3(a) (i) due to the Employee’s Retirement shall be contingent upon achievement of the Threshold Goal, and (ii) shall not affect the time of payment under this Agreement.

 

(b)           In the event of a Change of Control during the Performance Period, the Employee shall vest in all of the Units granted to the Employee under this Agreement. The amount paid with respect to the Units will be determined based on the Relative TSR performance criteria as set forth in Section 2(c); however, the total shareholder return of the Company and the Peer Group will be determined over an adjusted performance period, defined as the period beginning on the original beginning date of the Performance Period and ending on the effective date of the Change of Control.  If the award is payable in cash, the cash value payable shall be determined by multiplying the number of Units payable by the Fair Market Value of a share of Stock on the date of the Change of Control.  Payment shall be made to the Employee upon the date of the Change of Control.  Notwithstanding the foregoing, if the Change of Control does not qualify as a “change in control event” under Department of Treasury Regulation section 1.409A-3(i)(5)(i), then payment shall be made at the time specified in Section 2(e).

 

(c)           The Units may also vest under circumstances provided in any employment agreement between the Employee and the Company or other severance arrangements established by the Company.  If the Employee is a party to an employment and/or severance agreement with the

 

  

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Company or a participant in a severance plan of the Company that provides for accelerated vesting of restricted stock units that were scheduled to vest within a specified period, the Units will remain subject to achievement of the Threshold Goal and will be treated as scheduled to vest within such specified period if the Performance Period for such Units is scheduled to end within such specified period and the Relative TSR for the Performance Period results in a payout for the Units.  By way of example, if an Employee’s employment is terminated by the Company under circumstances that would entitle the Employee to the acceleration of vesting of restricted stock units that are scheduled to vest within the next twelve months and the Employee holds Units with a Performance Period ending within the next twelve months with respect to which the Threshold Goal (if any) has been achieved, the Employee would receive a payout for those Units in accordance with the terms of this Agreement based on the Company’s Relative TSR for the Performance Period. Any accelerated vesting pursuant to this Section 3(c) shall not affect the time of payment under this Agreement.

 

4.           Tax Withholding.  To the extent that the receipt or payout of the Units results in income to the Employee for federal, state or local income or employment tax purposes with respect to which the Company or any of its Affiliates has a withholding obligation, if the payment is in cash the Company or the Affiliate, as applicable, shall withhold all applicable tax from any cash payable for the Units, or if payment is in shares of Stock of the Company, you shall deliver to the Company at the time of receipt such amount of money as the Company may require to meet its or its Affiliate’s obligation under applicable tax laws or regulations, and if you fail to do so, the Company is authorized to withhold from any shares issued under this Agreement sufficient to satisfy the withholding obligation based on the last per share sales price of the Company’s common stock for the trading day immediately preceding the date that the withholding obligation arises.

 

5.           Employment Relationship.  For purposes of this Agreement, the Employee shall be considered to be in the employment of the Company and its Affiliates as long as the Employee has an employment relationship with the Company and its Affiliates. The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination shall be final and binding on all persons.

 

6.           Not an Employment Agreement.  This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between the Employee and the Company and its Affiliates or guarantee the right to remain employed by the Company and its Affiliates for any specified term.

 

7.           Notices.  Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, or by courier or delivery service, addressed to the Company at the then current address of the Company’s Principal Corporate Office, and to the Employee at the Employee’s address indicated beneath the Employee’s signature on the execution page of this Agreement, or at such other address and number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given

 

  

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when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested.

 

8.           Amendment and Waiver.  This Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Employee. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company other than the Employee. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner effect the right to enforce the same. No waiver by any party of any term or condition, or the breach of any term or condition contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other condition, or the breach of any other term or condition.

 

9.           Governing Law and Severability.  This Agreement shall be governed by the laws of the State of Texas, without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

 

10.           Successors and Assigns.  This Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and subject to Section 3(a), to the Employee, the Employee’s permitted assigns, executors, administrators, agents, legal and personal representatives.

 

11.           Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument.

 

12.           Section 409A.  This Agreement shall be construed and interpreted to be exempt from or to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and any regulations or other guidance promulgated thereunder (“Section 409A”).  Neither the Company nor the members of the Committee shall be liable for any determination or action taken or made with respect to this Agreement or the Units granted thereunder.

 

13.           Non-Transferability.  Neither this Agreement nor the rights of Employee hereunder shall be transferable by the Employee during his or her life other than by will or pursuant to applicable laws of descent and distribution, subject to Section 3(a) herein. No rights or privileges of the Employee in connection herewith shall be transferred, assigned, pledged or hypothecated by Employee or by any other person in any way, whether by operation of law, or otherwise, and shall not be subject to execution, attachment, garnishment or similar process. In the event of any such occurrence, this Agreement shall automatically be terminated and shall thereafter be null and void.

 

  

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14.           Entire Agreement.  The Plan and this Agreement contain the entire agreement between the parties with respect to the subject matter contained herein and may not be modified, except as provided herein or in the Plan or as it may be amended from time to time by a written document signed by each of the parties hereto. Any oral or written agreements, representations, warranties, written inducements, or other communications with respect to the subject matter contained herein made prior to the execution of the Agreement shall be void and ineffective for all purposes.

 

15.           Unsecured Promise to Pay.  The Company’s obligation under the Plan and this Agreement is an unsecured and unfunded promise to pay benefits that may be earned in the future.  The Company shall have no obligation to set aside, earmark or invest any fund or money with which to pay its obligations under this Agreement. The Employee or any successor in interest shall be and remain a general creditor of the Company in the same manner as any other creditor having a general claim for matured and unpaid compensation.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized representative, and the Employee has executed this Agreement, all effective as of the date first above written.

 

 

HELIX ENERGY SOLUTIONS GROUP, INC.

 

 

By:

 

 

EMPLOYEE:

 

___________________________________

Name:

Address:

 

 

 

 

 

 

 

  

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Schedule A

 

 

 

PEER GROUP COMPANIES

 

FMC Technologies, Inc.

Oceaneering International, Inc.

Diamond Offshore Drilling, Inc.

Oil States International, Inc.

Forum Energy Technologies, Inc.

Rowan Companies plc

Tidewater, Inc.

Atwood Oceanics, Inc.

Hercules Offshore, Inc.

Tetra Technologies, inc.

Hornbeck Offshore Services

GulfMark Offshore, Inc.

.

 

 

If any Peer Group company’s Relative TSR shall cease to be publicly available (due to a business combination, receivership, bankruptcy or other event) or if any such company is no longer publicly held, the Committee shall exclude that company from the Peer Group and select a substitute Peer Group company if required for the peer group to consist of 12 companies. 

 

Once a company is removed from the Peer Group as described above, that company shall be treated as having been removed from the Peer Group for the entire Performance Period and the substitute Peer Group company shall be treated as included in the Peer Group for the entire Performance Period.

 

 

 

 

 

  

7WEC-WE EX 10.1

Exhibit 10.1

Wisconsin Energy Corporation 
Performance Unit Plan 
(amended and restated effective as of January 1, 2015)
		
	1.
	Purpose.  The purposes of the Wisconsin Energy Corporation Performance Unit Plan (the "Plan") are to enhance the long‐term stockholder value of Wisconsin Energy Corporation (the "Company") by reinforcing the incentives of key executives to achieve long‐term performance goals of the Company; to link a significant portion of executives' compensation to total shareholder return; to attract and motivate executives and to encourage their continued employment on a competitive basis.  The purposes of the Plan are to be achieved by the grant of Performance Units.  Capitalized terms used in the Plan shall have the meanings set forth in Section 8 of this Plan, unless the context clearly indicates otherwise.  The Plan was originally effective January 1, 2005.  The Plan was amended and restated effective as of October 11, 2007 and was further amended and restated effective as of January 1, 2010.  The Plan is hereby amended and restated effective as of January 1, 2015.

		
	2.
	Administration.  The Plan shall be administered by the Compensation Committee of the Company's Board of Directors.  Subject to the provisions of the Plan, the Committee shall have full and final authority to:

		
	(a)
	designate the employees to whom Performance Units shall be granted;

		
	(b)
	determine the number of Performance Units to be granted to each employee;

		
	(c)
	impose such limitations, restrictions and conditions upon any such Performance Units as the Committee shall deem appropriate;

		
	(d)
	waive in whole or in part any limitations, restrictions or conditions imposed upon any such Performance Units as the Committee shall deem appropriate; and

		
	(e)
	interpret the provisions of the Plan.

All decisions of the Committee shall be final and binding upon all parties including the Company, its stockholders and Employees,
		
	3.
	Eligibility and Participation.  Key employees of the Company and/or its subsidiaries are designated for participation in the Plan by the Committee.  The Committee shall also designate the number of Performance Units to be granted to the Employee at the Target 100% rate.

		
	4.
	Performance Units.

		
	(a)
	Performance Unit Defined.  A Performance Unit is a right to receive a cash payment from the Company that is based upon the value of shares of Company Stock and is contingent on the Company's Total Shareholder Return during a three‐year performance period.  The Committee may establish the three‐year performance periods.  The Performance Units granted under this Plan will be reflected in a book account maintained by the Company for each Employee until they have become vested or have been forfeited.

		
	(b)
	Regular Vesting Of Performance Units.  Except as otherwise provided in paragraph (c) below, the vesting percentage of an Employee's Performance Units shall be based upon the Company's rank in Total Shareholder Return over the three‐year performance period, relative to selected benchmark electric utilities with similar long‐term strategies.  The regular vesting schedule for the Performance Units is as set forth in the following schedule:

	
		
	Percentile Rank
	Vesting %

	<25th Percentile
	0%

	25th Percentile
	25%

	Target (50th Percentile)
	100%

	75th Percentile
	125%

	90th Percentile or above
	175%

The calculation of the Employee's vesting percentage shall be subject to the following rules:
		
	(i)
	The Committee shall select the benchmark electric utilities at the beginning of the three‐year performance period.

		
	(ii)
	The Committee shall make appropriate changes to the percentile rank calculations to reflect corporate transactions, or other events or circumstances outside the ordinary course of business, affecting the benchmark electric utilities (e.g., corporate mergers).  The Committee's determination regarding such changes shall be binding upon the Company and Employees.

		
	(iii)
	In the event that the Company's percentile rank is between the benchmarks identified in the left hand column, the vesting percentage shall be determined by interpolating the appropriate vesting percentage.  For example, if the Company ranks 12th best of 30 benchmark electric utilities (or 60th percentile), the vesting percentage would be 110%, and if the Company ranks 6th best of the 30 benchmark electric utilities (or 80th percentile), the vesting percentage would be 141.66%.

Except as provided in paragraph (c) below, any unvested Performance Units are immediately forfeited upon the Employee's cessation of employment with the Company or a subsidiary prior to the completion of the three‐year performance period.
		
	(c)
	Special Vesting Of Performance Units.  The Performance Units shall become immediately vested at the Target 100% rate upon the occurrence of any of the following events (the "Special Vesting Events"):

		
	(i)
	the termination of the Employee's employment with the Company or a subsidiary by reason of Disability or death, or

		
	(ii)
	the occurrence of a Change in Control of the Company while the Employee is employed by the Company or a subsidiary, provided, however, that effective for Performance Units awarded on or after January 1, 2015, Performance Units shall not become immediately vested at the Target 100% rate unless, following a Change in Control as defined below,  the Employee's employment with the Company, or 

	
			
	 
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any successor thereto, is terminated by the Company without Cause or by the Employee for Good Reason, in each case prior to completion of the three-year performance period.
Further, a prorated number of the Performance Units shall become vested upon the termination of the Employee's employment with the Company or a subsidiary by reason of Retirement prior to the end of the three‐year performance period.  The number of Performance Units becoming vested shall be determined by multiplying the number of Performance Units at the Target 100% rate by a fraction, with the numerator of the fraction being the number of completed calendar months between Employee's Retirement date and the beginning of the performance period and the denominator being thirty‐six (36).  Therefore, if Employee retires on September 15 of the second year in the three‐year performance period, the number of Performance Units becoming vested as a result of Employee's Retirement shall be equal to the number of Performance Units at the Target 100% rate times 20/36.
		
	(d)
	Cash Dividend Adjustment.  Whenever the Company declares a cash dividend on Company Stock, an Employee who is employed on the dividend declaration date shall be entitled to receive a cash amount determined by multiplying (a) the number of Performance Units at the Target 100% rate on the dividend declaration date, times (b) the amount of the cash dividend paid by the Company on a share of Company Stock.  The deemed dividend equivalent shall be paid to the Employee within a reasonable period of time after the dividends are paid to Company stockholders.

Notwithstanding the foregoing, no deemed dividend equivalents shall accrue or be paid with respect to any Performance Units awarded on or after January 1, 2010.
		
	(e)
	Settlement Of Performance Units.  As soon as practicable after the Performance Units become vested pursuant to paragraph (b) or (c) above, the Company shall pay to the Employee an amount in cash determined by multiplying (i) the number of Performance Units which have become vested (after application of the vesting schedules in paragraph (b) or (c) above), by (ii) the Fair Market Value of the Company Stock.  For this purpose, the Fair Market Value of the Company Stock shall be determined as of the date the Performance Units become vested.  In no event shall payment be made later than March 15 of the taxable year following the taxable year in which such Performance Units vest pursuant to paragraph (b) or (c) above.

		
	5.
	Shareholder Rights; Voting.  An Employee shall not, by reason of any Performance Units granted hereunder, have any rights of a shareholder of the Company and shall have no voting rights with respect to any Performance Units.

		
	6.
	Non‐transferability.  No right or interest of any Participant in the Plan shall be assignable or transferable, or subject to any lien, directly, by operation of law, or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge, and bankruptcy.

		
	7.
	Beneficiary Designation.  Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company and will be effective only when submitted to the Company 

	
			
	 
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during the Participant's lifetime. To the extent authorized by the Committee, the designation may be made electronically or set forth in some other media or format. In the absence of any such designation, or if the beneficiary predeceases the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's surviving spouse, if none, to his issue per stirpes or, if none, to his next of kin determined pursuant to the laws of the state in which the Company's principal place of business is located as if the Participant had died unmarried and intestate. In the event of a Participant's divorce, any designation of the Participant's former spouse as a beneficiary shall be void unless after the divorce the Participant completes a new designation naming such former spouse as a beneficiary.
		
	8.
	Adjustments.  Notwithstanding any other provision herein, in the event of any merger, reorganization, consolidation, recapitalization, liquidation, stock dividend, split‐up, share combination, or other change in the corporate structure of the Company affecting the Company Stock, such adjustment shall be made in the number of Performance Units granted to Employees as may be determined by the Committee, in its sole discretion, to be appropriate and equitable to prevent dilution or enlargement of rights.

		
	9.
	Definitions.  For Plan purposes, except where the context clearly indicates otherwise, the following terms shall have the meanings set forth below:

		
	(a)
	"Beneficial Owner" shall have the meaning set forth in Rule 13d‐3 under the Exchange Act.

		
	(b)
	"Board" shall mean the Board of Directors of the Company

		
	(c)
	"Cause" means (1) the willful and continued failure of the Employee to substantially perform his or her duties (other than a failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Employee by the Board, the Committee or an elected officer of the Company which specifically identifies the manner in which the Board, the Committee or the elected officer believes that the Employee has not substantially performed the Employee's duties, or (2) the willful engaging by the Employee in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company; however, no act, or failure to act, on the Employee's part shall be considered "willful" unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that the Employee's action or omission was in the best interest of the Company.

		
	(d)
	"Change in Control" shall be deemed to have occurred if the event set forth in any one of the following subparagraphs shall have occurred:

		
	(i)
	any person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 20% or more of the combined voting power of the Company's then outstanding securities, excluding any person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (iii) below; or

	
			
	 
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	(ii)
	the following individuals cease for any reason to constitute a majority of the number of directors then serving individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's shareholders was approved or recommended by a vote of at least two‐thirds of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

		
	(iii)
	there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation immediately following which the directors of the Company immediately prior to such merger or consolidation continue to constitute at least a majority of the board of directors of the Company, the surviving entity or any parent thereof or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 20% or more of the combined voting power of the Company's then outstanding securities; or

		
	(iv)
	the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement (or series of related agreements) for the sale or disposition by the Company of all or substantially all of the Company's assets, disregarding any sale or disposition to a company at least a majority of the directors of which were directors of the Company immediately prior to such sale or disposition; or

		
	(v)
	the Committee determines in its sole and absolute discretion that there has been a Change in Control of the Company.

		
	(e)
	"Committee" means the Compensation Committee of the Company's Board.

		
	(f)
	"Company" means Wisconsin Energy Corporation, or any successor thereto.

		
	(g)
	"Company Stock" shall mean the common stock of the Company, and such other stock and securities as may be substituted therefor.

		
	(h)
	"Disability" means separation from the service of the Company or a subsidiary because of such illness or injury as renders the Employee unable to perform the material duties of the Employee's job.

		
	(i)
	"Employee" shall mean an employee who has been selected to participate in the Plan by the Committee.

	
			
	 
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	(j)
	"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.

		
	(k)
	"Fair Market Value" means:

		
	(i)
	for purposes of determining the amount payable pursuant to paragraph (b), the closing price for a share of Company Stock on the last day in the performance period on which the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is open for active trading; and

		
	(ii)
	for purposes of determining the amount payable pursuant to paragraph (c), the closing price for a share of Company Stock on the date the Performance Units become vested pursuant to such paragraph.  If the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is not open for active trading on such date, then the nearest date before such date on which the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is open shall be used.

		
	(l)
	"Good Reason" means the existence of one or more of the following conditions arising without the consent of the Employee:  (1) a material diminution in the Employee's base compensation; (2) a material diminution in the Employee's authority, duties or responsibilities; (3) a material diminution in the authority, duties or responsibilities of the supervisor to whom the Employee is required to report; (4) a material diminution in the budget over which the Employee retains authority; (5) a material change in the geographic location at which the Employee must perform services; or (6) any other action or inaction that constitutes a material breach by the Company of any agreement under which the Employee provides services.  Notwithstanding the foregoing, to constitute a Good Reason, the Employee must provide written notice of the existence of Good Reason to the Company within 90 days of the initial existence of the foregoing conditions.  Upon receipt of such notice, the Company shall have 30 days in which to remedy the condition.  If the Company timely and fully remedies the condition, the Employee shall not have the right to terminate employment for Good Reason based on such remedied condition.  If the Company fails to timely and fully remedy the condition, the Employee may terminate employment for Good Reason

		
	(m)
	"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company.

		
	(n)
	"Plan" means the Wisconsin Energy Corporation Performance Unit Plan.

		
	(o)
	"Retirement" means separation from the service of the Company or a subsidiary at or after age 60.

	
			
	 
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	(p)
	"Total Shareholder Return" means the calculation of total return (stock price appreciation plus reinvested dividends) for a peer electric utility based upon an initial investment of $100 and subsequent $100 investments at the end of each quarter during the three‐year performance period.

		
	10.
	Tax Withholding.  The Company shall have the right to deduct from any payment made under the Plan the amount of any federal, state or local taxes of any kind required by law to be withheld with respect to the grant, vesting, payment or settlement of an award under this Plan, or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.

		
	11.
	Governing Law.  The law of the State of Wisconsin, except its law with respect to choice of law, shall be controlling in all matters relating to the Plan.

		
	12.
	Plan Amendment and Termination.  The Committee may, in its sole discretion, amend, suspend or terminate the Plan at any time, with or without advance notice to Employees, provided that no amendment, modification or termination of the Plan may adversely affect in a material manner any right of any Employee with respect to any Performance Units theretofore granted without such Employee's written consent.

		
	13.
	Acceptance of Performance Units.  A participant must accept Performance Units granted under this Plan, including all terms and conditions of the Plan, in a time and manner as specified by the Company.  To the extent authorized by the Committee, the acceptance may be made electronically or set forth in some other media or format.

		
	14.
	Miscellaneous.  If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person.  The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

		
	15.
	Code Section 409A.  

		
	(a)
	General Compliance.  The Plan is intended to qualify for an exclusion from, or satisfy the requirements governing the deferral of compensation under Section 409A of the Internal Revenue Code and any Treasury Regulations or other Internal Revenue Service guidance promulgated thereunder (collectively, the "409A Requirements"), as applicable.  The Plan shall be interpreted and administered in a manner consistent with the 409A Requirements and all terms shall be interpreted to comply with the 409A Requirements.  Notwithstanding any other Plan provision, payments provided under the Plan may only be made upon an event and in a manner that complies with the 409A Requirements or an applicable exemption.  

	
			
	 
	7

	 

		
	(b)
	Specified Employees.  Effective for Performance Units awarded on or after January 1, 2015, and notwithstanding any other provision of the Plan, if any payment or benefit provided to an Employee in connection with his or her termination of employment is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and such Employee is determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six month anniversary of termination of employment or, if earlier, upon the Employee's death.

	
			
	 
	8

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