Document:

exh106.htm

     

    Exhibit
      10.6

    INTEGRYS
      ENERGY GROUP, INC.

    PERFORMANCE
      STOCK RIGHT AGREEMENT

     

    

    THIS
      AGREEMENT is entered into as of
      February 14, 2008,  (the “Grant Date”), by and between INTEGRYS ENERGY
      GROUP, INC. (the “Company”), and __________________ ____________________ (the
“Participant”).  This Agreement sets forth the terms, rights and
      obligations of the parties with respect to the grant of Performance Stock Rights
      to the Participant.  This agreement shall not become effective until
      the Participant signs and returns the “Acknowledgement Form” attached
      hereto.

     

    The
      Performance Stock Rights are granted
      under, and are subject to, the terms of the Integrys Energy Group, Inc. 2007
      Omnibus Incentive Compensation Plan (the “Plan”), which are specifically
      incorporated by reference in this Agreement.  Any capitalized terms
      used in this Agreement which are not defined shall have the meaning set forth
      in
      the Plan.

     

    The
      parties to this Agreement covenant
      and agree as follows:

     

    1. Grant
      of
      Performance Stock Rights.  (a)  Subject
      to the terms of this
      Agreement, the Company grants to the Participant Performance Stock Rights
      representing the right to receive ______ shares (“Target Award”), of the common
      stock of the Company, par value $1.00 (“Stock”), in the event certain
      Performance Goals specified herein are satisfied.  The Participant
      obtains no ownership interest in the Company and will not be considered a
      shareholder of the Company by virtue of the grant of Performance Stock Rights
      hereunder until such time as Stock may be issued to the Participant as a Final
      Award.

     

    (b) In
      the event of certain corporate
      transactions described in Section 12 of the Plan, the number of Performance
      Stock Rights will be adjusted by the Compensation Committee of the Board of
      Directors of the Company (the “Committee”).  The Committee’s
      determination as to any adjustment shall be final.

     

    2. Performance
      Period. Subject to the
      provisions of Section 7, the period from January 1, 2008 to December 31,
      2010.

     

    3. Performance
      Measures.

     

    (a) Total
      Shareholder Return (“TSR”).  The quotient obtained
      by
      dividing (1) the Shareholder Return with respect to a share of common stock
      of
      the Company, by (2) the Beginning Market Price of a share of common stock of
      the
      Company.  For this purpose:

     

    (1) The
      Shareholder Return means the
      cash dividends paid on a share of common stock during the Performance Period,
      increased by (if positive) or reduced by (if negative) the change in stock
      price
      from the Beginning Market Price of a share of common stock to the Ending Market
      Price of a share of common stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (2) The
      Beginning Market Price of a
      share of common stock is the average closing market price of a share of common
      stock for the 30 trading days immediately preceding the first day of the
      Performance Period as reported by the securities exchange on which such stock
      is
      principally traded.

     

    (3) The
      Ending Market Price of a share
      of common stock is the average closing market price of a share of common stock
      for the 30 trading days immediately preceding the last day of the Performance
      Period as reported by the securities exchange on which such stock is principally
      traded.

     

    (b) Comparison
      Group.  All of
      the companies included in the Towers Perrin database of publicly traded utility
      companies.

     

    4. Determination
      of Final Awards.

     

    (a) Presumptive
      Award.  As soon
      as practicable following the completion of the Performance Period, the Committee
      will determine the TSR of the Company and of each company in the Comparison
      Group. The Committee’s determination will be final and binding on all
      persons.  The Participant’s presumptive award shall be determined in
      accordance with the following table; provided that any fractional share of
      Stock
      that would otherwise result from the foregoing calculation shall be
      disregarded.

     

    
      	
              Company
                TSR In Relation to

              TSR
                of All Comparison Group

              Companies 

            	
              Presumptive
                Award Equal to

              the
                Following Percentage of

              the
                Target Award*

            
	
              90thPercentile
                or Greater

              75thPercentile

              50thPercentile

              25thPercentile

              Below
                the 25thPercentile

            	
               
                200%

               
                150%

               
                100%

               
                50%

               
                0%

            

    

    

    *
      The Presumptive Award for performance
      between points on the payout schedule would be interpolated.  If the
      formula produces an award of a fractional share, the Presumptive Award will
      be
      rounded to the next higher whole number of shares.

    

    (b) Final
      Award.  The
      Presumptive Award is used as a guideline for the Committee in determining the
      Final Award to be made to the Participant, and the Participant obtains no rights
      as a result of the determination of the Presumptive Award.  In
      determining the Final Award to be made to the Participant, the Committee, in
      its
      sole discretion, may increase or decrease the amount of the Presumptive Award;
      provided that the Committee will not increase the amount of the Presumptive
      Award applicable to the Participant if the Final Award is intended to comply
      with Section 162(m) of the Internal Revenue Code and if the Participant is
      a
      Covered 

     

    
      
         

      

      
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    Executive
      (as defined in the Plan) for
      purposes of Section 162(m) of the Internal Revenue Code.  Except with
      respect to the portion (if any) of the Final Award payment of which is deferred
      in accordance with the Integrys Energy Group, Inc. Deferred Compensation Plan,
      the Final Award will be distributed to the Participant by March 15 of the
      calendar year following the calendar year in which the Performance Period
      ends.

     

    5. Dividend
      Equivalents.  The
      Participant shall not receive any cash or other consideration to reflect
      dividends that would have been paid or accrued had the Performance Stock Rights
      been actual shares of Stock during the Performance Period.

     

    6. Effect
      of
      Termination of Employment.

     

    (a)       Except
      as set forth in subsections (b)
      and (c) below and Section 7 below, or as otherwise determined by the Committee,
      the Performance Stock Rights will be cancelled immediately and without notice
      to
      the Participant, and no Final Award will be made, in the event of the
      Participant’s termination of employment from the Company and its Affiliates
      prior to the last day of the Performance Period.

     

    (b)           
      If the Participant’s employment or service terminates as a result of death or
      disability (as determined by the Committee based upon the definition set forth
      in the Company’s long-term disability plan), the Participant’s Performance Stock
      Rights will not be cancelled upon termination of employment, and (1) if the
      Participant’s termination occurs on or after December 31 of the calendar year in
      which the Performance Period begins, the Participant (or the Participant’s
      estate) may be eligible to receive a Final Award, determined in accordance
      with
      Section 4 and this Section 6, following the conclusion of the Performance
      Period, or (2) if the Participant’s termination occurs prior to December 31 of
      the calendar year in which the Performance Period begins, the Participant (or
      the Participant’s estate) may be eligible to receive a pro-rated Final Award,
      determined in accordance with Section 4 and this Section 6, following the
      conclusion of the Performance Period.  The pro-rated award shall be
      equal to the Final Award to which the Participant otherwise would have been
      entitled if employment had not terminated, multiplied by a fraction, the
      numerator of which is the number of full months of service that the Participant
      completed during the calendar year in which the Performance Period begins and
      the denominator of which is twelve (12).  If the foregoing calculation
      results in vesting of a factional share, the number of shares included in the
      Participant’s Final Award will be rounded to the next higher whole number of
      shares.  Except with
      respect to the portion (if any) of the Final Award payment of which is deferred
      in accordance with the Integrys Energy Group, Inc.  Deferred
      Compensation Plan, the Final Award will be distributed to the Participant by
      March 15 of the calendar year following the calendar year in which the
      Performance Period ends.

    

    (c)           
      If the Participant’s employment or
      service terminates as a result of retirement on or after age fifty-five (55)
      with ten (10) or more years of service, or retirement on or after age sixty-two
      (62), the Participant’s Performance Stock Rights will not be cancelled
      upon termination of employment, and (1) if the Participant’s retirement
      occurs on or after 

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

       

    

    December
      31 of the calendar year in
      which the Performance Period begins, the Participant may be eligible to
      receive a Final Award, determined in accordance with Section 4 and this Section
      6, following the conclusion of the Performance Period, and (2) if the Participant’s
      termination occurs prior to December 31 of the calendar year in which the
      Performance Period begins, the Participant may be eligible to receive a
      pro-rated Final Award, determined in accordance with Section 4 and this Section
      6, following the conclusion of the Performance Period.  The pro-rated
      award shall be equal to the Final Award to which the Participant otherwise
      would
      have been entitled if employment had not terminated, multiplied by a fraction,
      the numerator of which is the number of full months of service that the
      Participant completed during the calendar year in which the Performance Period
      begins and the denominator of which is twelve (12).  If the foregoing
      calculation results in vesting of a factional share, the number of shares
      included in the Participant’s Final Award will be rounded to the next higher
      whole number of shares.  Except with respect to the portion
      (if
      any) of the Final Award payment of which is deferred in accordance with the
      Integrys Energy Group, Inc.  Deferred Compensation Plan, the Final
      Award will be distributed to the Participant by March 15 of the calendar year
      following the calendar year in which the Performance Period ends.

    

    7. Change
      in
      Control.  Upon
      the occurrence of a Change of Control (as defined in the Plan), the Performance
      Period shall be terminated, and the Participant will be entitled to a Final
      Award based upon the Target Award (or, if greater, the then projected Final
      Award) prorated for the portion of the Performance Period that has been
      completed as of the date of the Change in Control. Except with respect to the
      portion (if any) of the Final Award payment of which is deferred in accordance
      with the Integrys Energy Group, Inc. Deferred Compensation Plan, distribution
      will be made as soon as is administratively practicable following the Change
      of
      Control; but in no event later than the fifteenth (15th)
      day of the third month following
      the month in which occurs the Change of Control.

     

    8. Tax
      Withholding.  Upon the issuance of
      Stock
      pursuant to a Final Award, the Company may satisfy its withholding obligations
      in any manner determined by the Committee, including by withholding a portion
      of
      the Participant’s compensation or by withholding a number of the shares of Stock
      included in any Final Award that have a Fair Market Value, as determined by
      the
      Committee, equal to the amount required to be withheld.  The Fair
      Market Value of fractional shares of Stock remaining after the withholding
      requirements are satisfied will be paid to the Participant in
      cash.  The Company may also require the Participant to deliver a check
      for the Company’s withholding tax obligation prior to effecting the transfer of
      shares pursuant to a Final Award.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    9. Miscellaneous.

     

    (a) The
      Participant (or his legal
      representatives, the executor of his estate or his heirs) shall not be deemed
      to
      be a shareholder of the Company with respect to any of the Performance Stock
      Rights until shares of Stock have been issued pursuant to a Final Award and
      the
      Company’s withholding tax liability has been satisfied, to the Committee’s
      satisfaction.

     

    (b) The
      Performance Stock Rights shall
      not be transferable by the Participant; provided that following the
      Participant’s death, any Final Award made with respect to the Participant will
      be paid to the Participant’s estate or to such person as the executor of the
      estate certifies as being entitled to such payment as a result of the operation
      of the Participant’s last will and testament or as a result of the laws of
      intestate succession.

     

    (c) It
      is fully understood that
      nothing contained in this Agreement or the Plan shall interfere with or limit
      in
      any way the right of the Company or any Affiliate to terminate the Participant’s
      employment at any time nor confer upon the Participant any right to continue
      in
      the employ of the Company or any Affiliate.

     

    (d) As
      a condition of the granting of
      Performance Stock Rights under this Agreement, the Participant agrees, for
      himself and his legal representatives, the executor of his estate, and his
      heirs, that the Plan and this Agreement shall be subject to discretionary
      interpretation by the Committee and that any interpretation by the Committee
      of
      the terms of the Plan and this Agreement shall be final, binding and conclusive
      on the Participant, his legal representatives, the executor of his estate and
      his heirs.  The Participant, his legal representatives, the executor
      of his estate and his heirs shall not challenge or dispute the Committee’s
      decisions.

     

    (e) The
      Committee may modify the
      Performance Stock Rights at any time.  However, no modification,
      extension or renewal shall (i) confer on the Participant any right or benefit
      which he would not be entitled to if new Performance Stock Rights were granted
      under the Plan at such time or (ii) alter, impair or adversely affect the
      Performance Stock Rights or this Agreement without the written consent of the
      Participant; provided that the Committee need not obtain written consent of
      the
      Participant for a modification of the Performance Stock Right to the extent
      that
      the Plan specifically permits the Committee action or to the extent that the
      Committee deems such modification necessary to comply with any applicable law,
      the listing requirements of any principal securities exchange or market on
      which
      the shares underlying the Performance Stock Right are then traded, or to
      preserve favorable accounting or tax treatment of the Performance Stock Right
      for the Company; and provided further, that unless the Committee determines
      that
      a Performance Stock Right is not intended to comply with the requirements of
      Section 162(m) of the Internal Revenue Code, the Committee shall not take any
      such action with respect to a Participant who is a Covered Executive (as defined
      in the Plan) if such action would cause any Final Award granted to the
      Participant to cease to qualify as “qualified performance-based compensation”
for purposes of Section 162(m) of the Internal Revenue Code.

     

    (f) No
      shares of Stock will be issued
      pursuant to a Final Award unless and until the Company has determined to its
      satisfaction that such issuance complies with all 

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

       

    

    relevant
      provisions of applicable law,
      including the requirements of any stock exchange on which the Stock may then
      be
      traded.

     

    10. Governing
      Law.  This
      Agreement shall be governed by the internal laws of the State of Illinois,
      without regard to the principle of conflict of laws, as to all matters,
      including, but not limited to, matters of validity, construction, effect,
      performance and remedies.  No legal action or proceeding may be
      brought with respect to this Agreement more than one year after the later of
      (a)
      the last date on which the act or omission giving rise to the legal action
      or
      proceeding occurred; or (b) the date on which the individual bringing such
      legal
      action or proceeding had knowledge (or reasonably should have had knowledge)
      of
      such act or omission.  Any such action or proceeding must be commenced
      and prosecuted in its entirety in the federal or state court having jurisdiction
      over Brown County, Wisconsin, or Cook County, Illinois, and each individual with
      any interest
      hereunder agrees to submit to the personal jurisdiction thereof, and agrees
      not
      to raise the objection that such courts are not a convenient
      forum.   Such action or other legal proceeding shall be heard
      pursuant to a bench trial, and the parties to such proceeding shall waive their
      rights to a trial by jury.

     

    11. Severability.  In
      the event any provision
      of the Agreement is held illegal or invalid for any reason, the illegality
      or
      invalidity will not affect the remaining provisions of the Agreement, and the
      Agreement shall be construed and enforced as if the illegal or invalid provision
      had not been included.

     

    12. Terms
      of
      Plan Govern.  All
      parties acknowledge that this option is granted under and pursuant to the Plan,
      which shall govern all rights, interests, obligations and undertakings of both
      the Company and the Participant.

     

    INTEGRYS
      ENERGY GROUP, INC.

    

    

    

    

    By:   __________________________                                                                   
      

    Title:  Senior
      VP & Chief HR Officer

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    ACKNOWLEDGEMENT
      FORM

    

    I
      have read the terms of the Integrys
      Energy Group, Inc. Performance Stock Right Agreement, dated February 14,
      2008,  and I hereby declare that I understand and agree to be bound by
      the terms and conditions of the Agreement.

    

    ______________________________________

    Participant

    

    Print
      name:_____________________________     

    

    PLEASE
      DETACH THIS ACKNOWLEDGEMENT FORM
      FROM THE PERFORMANCE STOCK RIGHT AGREEMENT AND RETURN IT TO THE GREEN BAY HUMAN
      RESOURCES DEPARTMENT.  YOUR PERFORMANCE STOCK RIGHT WILL NOT BECOME
      EFFECTIVE UNTIL THE COMPANY RECEIVES THIS ACKNOWLEDGMENT FORM.exh108.htm

     

    Exhibit
      10.8

     

    
      INTEGRYS
        ENERGY GROUP,
        INC.

      2007
        OMNIBUS INCENTIVE COMPENSATION
        PLAN

      RESTRICTED
        STOCK AWARD

       

       

       

      You have been granted a Restricted Stock
        award
        for shares of common stock of Integrys Energy Group, Inc. (the “Company”) under
        the Integrys Energy Group, Inc. 2007 Omnibus Incentive Compensation Plan
        (the
“Plan”) with the following terms and conditions.  Your award will not
        become effective until you sign and return this Restricted Stock Award agreement
        to Human Resources.

       

       

      	
              Grant
                Date:       

               

            	
              May 17, 2007

               

            
	
              Number of Restricted 

              Shares:

            	
              _______ Shares

               

               

               

            

       

      Vesting Schedule:

       

      Twenty-five percent (25%) of your Restricted Shares will vest on each
        of
        the first four anniversaries of the Grant Date, provided that you are
        continuously employed by the Company or an Affiliate from the Grant Date
        through
        such vesting date, as shown as the following schedule:

       

      	
              Amount

            	
              Vesting Date

            
	
              25% of the Restricted Shares

            	
              First anniversary of Grant
                Date

            
	
              25% of the Restricted Shares

            	
              Second anniversary of Grant
                Date

            
	
              25% of the Restricted Shares

            	
              Third anniversary of Grant
                Date

            
	
              25% of the Restricted Shares

            	
              Fourth anniversary of Grant
                Date

            

       

      If application of the vesting schedule on
        any
        vesting date would result in vesting of a fractional shares, the number of
        Restricted Shares that become vested on that vesting date will be rounded
        to the
        next higherwhole number of Restricted Shares.

       

      If your employment or service terminates
        as a
        result of death, disability (as determined by the Committee based upon the
        definition set forth in the Company’s long-term disability plan), or 
retirement on or after age sixty-two (62) with ten (10) or more years of
        service
        (provided that you have given the Company six months advance notice of your
        intent to retire), and if the Grant Date of such Restricted Shares was at
        least
        twelve (12) months

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        prior to the date of your termination,
          your
          Restricted Shares will become fully vested on the date of such
          termination.

         

        Upon the occurrence of a Change of Control
          (as
          defined in the Plan) during your employment, the Restricted Shares will
          become
          fully vested, even if not otherwise vested in accordance with the vesting
          schedule above.

         

        Except to the extent prohibited by law,
          in the
          event of an approved leave of absence from the Company or an Affiliate,
          or a
          period of absence attributable to sickness or incapacity, the Committee,
          in its
          sole discretion, may extend the vesting dates to take into account the
          period or
          periods during which you were not actively at work. 

         

        Upon any other termination of employment
          or
          service, you will forfeit the Restricted Shares that have not yet vested.

         

        Escrow:

         

        Your Restricted Shares will be held in escrow by the Company, as escrow
          agent.  The Company will give you a receipt for the Shares held in escrow
          that will state that the Company holds such Shares in escrow for your account,
          subject to the terms of this Award, and you will give the Company a stock
          power
          for such Shares duly endorsed in blank which will be used in the event
          such
          Shares are forfeited in whole or in part.  As soon as practicable after
          each vesting date, the Restricted Shares that have become vested will cease
          to
          be held in escrow, and certificate(s) for such number of Shares will be
          delivered to you or, in the case of your death, to your estate.  No Shares
          will be issued unless and until the Company has determined to its satisfaction
          that such issuance complies with all relevant provisions of applicable
          law,
          including the requirements of any stock exchange on which the Shares may
          then be
          traded.

         

        
          Transferability of Restricted Shares:

           

          You may not sell, transfer or otherwise
            alienate or hypothecate any of your Restricted Shares until they are
            vested.  In addition, by accepting this Award, you agree not to sell any
            Shares acquired under this Award at a time when applicable laws (including
            securities laws), Company policies or an agreement between the Company
            and its
            underwriters or other terms and conditions of the Plan prohibit a sale.

           

          Voting and Dividends:

           

          While the Restricted Shares are subject
            to
            forfeiture, you may exercise full voting rights.  Dividends  and other
            distributions paid with respect to non-vested and non-deferred Restricted
            Shares, so long as the applicable record date occurs after the Grant
            Date and

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

             

          

          before you forfeit such Shares, will
            be
            retained by the Company and you will be credited with additional Restricted
            Shares that will be subject to the same risk of forfeiture, restrictions
            on
            transferability and other terms of this Restricted Stock Award agreement
            as are
            the Restricted Shares with respect to which the dividend or distribution
            was
            paid.  In the case of any dividend or distribution other than a dividend or
            distribution that is paid in Shares, the number of additional Restricted
            Shares
            will be determined by dividing the dividend or distribution amount retained
            by
            the Company by the closing share price of a share of the Company’s common stock,
            as reported on the New York Stock Exchange, on the dividend payment date;
            provided that the Company may distribute cash in lieu of a fraction of
            share. In
            the case of any such   dividend or distribution that is paid in
            Shares, the number of Shares received as a result of such dividend or
            distribution will constitute additional Restricted
            Shares.     You will have no right to dividends or
            distributions paid with respect to Restricted Shares where the record
            date
            occurs on or after the date on which you have forfeited the Restricted
            Shares.

           

          Tax Withholding:

           

          To the extent that the receipt or the
            vesting
            of the Restricted Shares, or dividends and other distributions paid with
            respect
            to the Restricted Shares, results in income to you for Federal, state
            or local
            income tax purposes or results in “wages” to you for FICA or other employment
            tax purposes, the Company has the right and the authority to deduct or
            withhold
            from other compensation payable to you an amount sufficient to satisfy
            its
            withholding obligations under applicable tax laws or regulations. 
Alternatively, the Company may require that you deliver to the Company
            at the
            time the Company is obligated to withhold taxes in connection with such
            receipt
            or vesting, as the case may be, such amount as the Company requires to
            meet its
            withholding obligation under applicable tax laws or regulations.  If you do
            not make an election under Section 83(b) of the Internal Revenue Code
            of 1986,
            as amended, in connection with this Award, you may satisfy the withholding
            requirement, in whole or in part, by electing to have the Company withhold
            for
            its own account that number of Restricted Shares otherwise deliverable
            to you
            from escrow hereunder on the date the tax is to be determined having
            an
            aggregate Fair Market Value on the date the tax is to be
            determined equal to the minimum statutory total tax that the Company must
            withhold in connection with the vesting of such Shares.  Your election must
            be irrevocable, in writing, and submitted to the Secretary of the Company
            before
            the applicable vesting date.  The Fair Market Value of any fractional Share
            not used to satisfy the withholding obligation (as determined on the

           

          
            
              
              

            

            
              3

              
                

              

            

            
              
              

            

          

           

          date the tax is determined) will be paid
            to you
            in cash.

           

          Powers of Company Not Affected:

           

          The existence of this Agreement or the
            Restricted Shares herein granted shall not affect in any way the right
            or power
            of the Company or its shareholders to make or authorize any or all adjustments,
            recapitalizations, reorganizations or other changes in the Company’s capital
            structure or its business, or any merger or consolidation of the Company,
            or any
            issuance of bonds, debentures, preferred, or prior preference stock ahead
            of or
            affecting the Restricted Shares or the rights thereof, or dissolution
            or
            liquidation of the Company, or any sale or transfer of all or any part
            of its
            assets or business, or any other corporate act or proceeding, whether
            of a
            similar character or otherwise.

           

          Employment:

           

          The granting of Restricted Shares under
            this
            Agreement shall not be construed as granting to you any right with respect
            to
            continued employment by the Company or an Affiliate.

           

          Interpretation: 

           

          As a condition of the granting of this
            Award,
            you agree, for yourself and your legal representatives or guardians,
            the
            executor of your estate, and your heirs, that this Agreement shall be
            interpreted by the Committee and that any interpretation by the Committee
            of the
            terms of this Agreement or the Plan and any determination made by the
            Committee
            pursuant to this Agreement shall be final, binding and conclusive. 

           

          Assignment of Agreement:

           

          You may not assign this Agreement, and
            any
            attempted assignment shall be null and void and of no legal effect.

           

          Amendment
            or
            Modification:

           

          No term or provision of this Agreement
            may be
            amended, modified or supplemented orally.  Amendment, modification or
            supplementation can be accomplished only (a) by an instrument in writing
            signed
            by the party against whom or which the enforcement of the amendment,
            modification or supplement is sought, or (b) as otherwise provided in
            the
            Plan.

           

          Governing
            Law:

           

          This Agreement
            shall be governed by the internal laws of the State of Illinois, without
            regard
            to the principle of conflict of laws, as to all matters, including, but
            not
            limited to, matters of validity, construction, effect, performance and
            remedies.  No legal action or proceeding may be brought with respect to
            this Agreement more than one year after the later of (a) the last date
            on which
            the act or omission giving rise to the legal action or proceeding occurred;
            or
            (b) the date on which the individual bringing such legal action or proceeding
            had knowledge (or reasonably should have had knowledge) of such act or
            omission.  Any such action or 

           

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

           

          proceeding
            must be
            commenced and prosecuted in its entirety in the federal or state court
            having
            jurisdiction over Brown County, Wisconsin or Cook County, Illinois, and
            each
            individual with any interest hereunder agrees to submit to the personal
            jurisdiction thereof, and agrees not to raise the objection that such
            courts are
            not a convenient forum.  Such action or other legal proceeding shall be
            heard pursuant to a bench trial, and the parties to such proceeding shall
            waive
            their rights to trial by jury.

           

          Severability:

           

          In the event any provision of the Restricted
            Stock Award agreement is held illegal or invalid for any reason, the
            illegality
            or invalidity will not affect the remaining provisions of the agreement,
            and the
            agreement shall be construed and enforced as if the illegal or invalid
            provision
            had not been included.

           

          Counterparts:

           

          This Agreement may be executed in
            counterparts.

           

          Term of Plan Govern:

           

          This Restricted Stock Award is granted
            under
            and governed by the terms and conditions of the Plan as amended and in
            effect
            from time to time.  Additional provisions regarding your Award and
            definitions of capitalized terms used and not defined in this Award can
            be found
            in the Plan.  [If you make a timely election to defer receipt of the
            Restricted Shares, the Shares otherwise awarded to you under this Agreement
            but
            that you are eligible to and have elected to defer will be converted
            into
            restricted stock units that will be credited under and distributed in
            accordance
            with the terms of the Deferred Compensation Plan; provided that the vesting
            and
            forfeiture provisions set forth in this Agreement, and other terms and
            conditions of the Plan affecting outstanding Plan awards, will continue
            to apply
            to such restricted stock units (and to any additional restricted stock
            units
            that may be credited to you as a result of deemed dividends or other
            distributions) to the same extent as such provisions, terms and conditions
            apply
            to the Restricted Shares.]

           

           
INTEGRYS ENERGY GROUP, INC. 

                                                                                 
                 

           

          By:
/s/
            Bud
            Treml 

          Title:  Senior VP & Chief HR Officer

           

           

           

           

           

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

           

           

          ACKNOWLEDGEMENT
            FORM

           

           

          I have
            read the terms of the
            Integrys Energy Group, Inc. Restricted Stock Agreement, dated May 17,
            2007, and
            I hereby declare that I understand and agree to be bound by the terms
            and
            conditions of the Agreement.

           

                                                                                       
            

          Participant

           

           

          Print
            name:                                                            

           

           

           

          PLEASE DETACH THIS ACKNOWLEDGEMENT FORM
            FROM
            THE RESTRICTED STOCK AGREEMENT AND RETURN IT TO THE GREEN BAY HUMAN RESOURCES
            DEPARTMENT.  YOUR RESTRICTED STOCK WILL NOT BECOME EFFECTIVE UNTIL THE
            COMPANY RECEIVES THIS ACKNOWLEDGMENT FORM.

           

           

          
            
              
              

            

            
              6

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