Document:

exh1011.htm

     

    Exhibit
      10.11

    INTEGRYS
      ENERGY GROUP, INC.

    NONQUALIFIED
      STOCK OPTION
      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 “Optionee”).  This Agreement sets forth the terms, rights and
      obligations of the parties with respect to the grant of an option to the
      Optionee.  This option shall not become effective until the Optionee
      signs and returns the “Acknowledgement Form” attached hereto.

     

    The
      option is
      granted under, and is 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 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
      Option.  Subject to the terms of this Agreement, the Company
      grants to the Optionee the right and option (the “Option”) to purchase ______
      shares of Common Stock of the Company, par value $1.00 (the “Optioned Shares”)
      from the Company, at an option price per share equal to $48.36 (the closing
      sales price of a share of Common Stock of the Company as reported on the New
      York Stock Exchange Composite Transaction reporting system on February 14,
      2008).

     

    In
      the event of
      certain corporate transactions described in Section 12 of the Plan, the number
      of Optioned Shares and the per share option price 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. Vesting
      of
      Option.  The Optioned Shares will vest in accordance with the
      following schedule:

     

    Percentage
      of Optioned
      Shares
      Vested                     Date
      of Vesting

    

    25%                                                      
      1st anniversary of Grant Date

    An
      additional
      25%                                2nd
      anniversary of Grant Date

    An
      additional
      25%                               
3rd anniversary of Grant Date

    The
      final
      25%                                       
4th anniversary of Grant Date

    

    provided,
      however, that, in
      the event of the Optionee’s termination of employment from the Company and its
      Affiliates for any reason,  any Optioned Shares not vested as of the
      date of such termination will be cancelled, except as otherwise provided in
      this
      Section 2..

     

    If
      the Optionee’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), (1) if the Optionee’s termination occurs on or after December
      31 of the calendar year in which occurs the Grant Date, the Optioned Shares
      will
      become fully vested on the Optionee’s date of termination, or (2) if the
      Optionee’s termination occurs prior to December 31 of the calendar year in which
      occurs the Grant Date, the Optionee will become partially vested on the date
      of
      termination, and the remaining Optioned Shares will be cancelled.  The
      Optionee’s partially vested interest will be equal to the product obtained by
      multiplying the total number of Optioned Shares 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 occurs the Grant Date and the denominator
      of
      which is twelve (12).  If the foregoing calculation results in vesting
      of a factional Optioned Share, the number of Optioned Shares that become vested
      will be rounded to the next higher whole number of shares.

    

    If
      the Optionee’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)
      (“Retirement”), (1) if the Optionee’s retirement occurs on or after December 31
      of the calendar year in which occurs the Grant Date, the Optioned Shares will
      continue to vest, subject to the terms of the Plan, on the same schedule as
      would have applied had the Optionee continued employment, and (2) if the
      Optionee’s retirement occurs prior to December 31 of the calendar year in which
      occurs the Grant Date, a portion of the Optioned Shares will be immediately
      forfeited, and the remainder of the Optioned Shares will continue to vest,
      subject to the terms of the Plan, on the same schedule as would have applied
      had
      the Optionee continued employment.  The portion of the Optioned
      Shares that
      are immediately forfeited will be equal to the product obtained by multiplying
      the total number of Optioned Shares by a fraction, the numerator of which is
      twelve (12) minus the number of full months of service that the Optionee
      completed during the calendar year in which occurs the Grant Date and the
      denominator of which is twelve (12).  If the foregoing calculation
      results in vesting of a factional Optioned Share, the number of Optioned Shares
      that become vested will be rounded to the next higher whole number of
      shares.  The number of Optioned Shares available for exercise on or
      after each vesting date will be reduced by a pro rata portion of the total
      number of forfeited Optioned Shares.

    

    Notwithstanding
      the
      vesting schedule described above, the Committee may extend the date(s) of
      vesting to a later date to take into account any period of the Optionee’s leave
      of absence, unless prohibited by law.

     

    3. Exercise
      of
      Option.  The Option, to the extent vested in accordance with
      Paragraph 2, may be exercised during the period beginning on the vesting
      date  and ending on the earlier of:

     

    
      	
              a.  

            	
              on
                the first
                anniversary of the date the Optionee’s employment with the Company and its
                Affiliates terminates for any reason other than Retirement, death
                or
                disability (as determined by the Committee based on the definition
                set
                forth  in the Company’s long-term disability plan);
                or

            

    

     

    
      	
              b.  

            	
              in
                any other
                case, February 14, 2018.

            

    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    During
      the life of
      the Optionee, this Option may be exercised only by the Optionee (or if the
      Optionee is incapacitated, by the Optionee’s legal
      representative).  If the Optionee dies before exercising all of the
      vested Option, the executor of the Optionee’s estate (or by such person as the
      executor of the estate certifies as inheriting the Option as a result of the
      operation of the Optionee’s last will and testament or as a result of the laws
      of interstate succession) may exercise all or any portion of the vested Option
      that has not been exercised, during the exercise periods described above.

     

    4. Change
      in
      Control.  Upon the occurrence of a Change of Control (as
      defined in the Plan), the Option, to the extent then outstanding and
      unexercised, will become fully vested (if not previously vested) but shall
      otherwise be subject to the terms of the Plan with respect to such Change in
      Control.

     

    5. Manner
      of Exercise and
      Payment.  In order to exercise this Option, the Optionee (or
      such other person entitled to exercise the Option as provided in Paragraph
      3)
      must provide a written notice to the Company stating that the Optionee would
      like to exercise all or a portion of the Option and specifying the number of
      vested Optioned Shares which are being purchased.  The exercise notice
      must be delivered (in person or by mail or by facsimile) to the Secretary of
      the
      Company.

     

    The
      written notice
      must be, in the case of clauses (a), (b) and (c) below, accompanied by payment
      equal to the number of Optioned Shares being purchased multiplied by the option
      price or, in the case of clause (d) below, accompanied by the documents
      specified in such clause (d), which will result in payment to the Company on
      the
      settlement date (i.e., T+3) equal to the number of Optioned Shares being
      purchased multiplied by the option price.  Subject to such rules and
      restrictions as the Committee may prescribe, payment may be made, at the
      Optionee’s election:  (a) in cash or by certified check payable to the
      Company; (b) by delivering previously acquired shares of Common Stock, duly
      endorsed in blank or accompanied by stock powers duly endorsed in blank, with
      a
      fair market value at the time of exercise, as determined by the Committee,
      equal
      to the required payment amount; (c) by any combination of (a) and (b); or (d)
      by
      delivering to the Company or its designated agent an executed irrevocable option
      exercise form together with irrevocable instructions to a broker-dealer to
      sell
      or margin a sufficient portion of the Optioned Shares to be exercised and to
      deliver the sale or margin proceeds directly to the Company to pay the option
      price.

     

    Option
      exercise
      notices postmarked (if mailed) or received by the Secretary of the Company
      (if
      by facsimile or hand-delivery) prior to 11:59 p.m. (central time) of the date
      specified in Paragraph 3 shall be given effect.  Any notice postmarked
      or received after such time shall be null and void.

     

    6. Tax
      Withholding.  Upon exercise of all or any part of the Option,
      the Company may satisfy its withholding obligations in any manner determined
      by
      the Committee, including by withholding a portion of the Optionee’s compensation
      or, in the case of a “cashless” exercise, by withholding a number of the
      Optioned Shares being purchased that have a fair market value, as determined
      by
      the Committee, equal to the amount required to be withheld.  The fair
      market 

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

       

    

    value
      of fractional
      shares of Stock remaining after the withholding requirements are satisfied
      will
      be paid to the Optionee in cash.  The Company may also require the
      Optionee to deliver a check for the Company’s withholding tax obligation prior
      to effecting the exercise of the option or delivering the shares issuable upon
      exercise.

     

    7. Miscellaneous.

     

    (a) The
      Optionee (or
      his legal representative) shall not be deemed to be a shareholder of the Company
      with respect to any of the Optioned Shares being purchased until such shares
      are
      paid for in full, and the Company’s withholding tax liability is satisfied, to
      the Committee’s satisfaction.

     

    (b) The
      Option shall
      not be transferable by the Optionee; provided that, following the Optionee’s
      death,  the Option, to the extent exercisable in accordance with the
      terms of the Plan and this Agreement, may be exercised by the executor of the
      Optionee’s estate (or by such person as the executor of the estate certifies as
      inheriting the Option as a result of the operation of the Optionee’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 Optionee’s employment at any time nor confer upon the Optionee any right to
      continue in the employ of the Company or any Affiliate.

     

    (d) As
      a condition of
      the granting of this Option, the Optionee agrees, for himself, 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 Optionee, his legal
      representatives, the executor of his estate and his heirs.  The
      Optionee, 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 this Option at any time.  However, no modification, extension
      or renewal shall (i) confer on the Optionee any right or benefit which he would
      not be entitled to if a new option was granted under the Plan at such time
      or
      (ii) alter, impair or adversely affect this Option or the Agreement without
      the
      written consent of the Optionee; provided that the Committee need not obtain
      written consent of the Optionee for a modification of the Option 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 Option are then traded, or to preserve favorable
      accounting or tax treatment of the Option for the Company.

     

    (f) No
      individual may
      exercise the Option and no shares will be issued under this Agreement unless
      and
      until the Company has determined to its satisfaction that such 

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

       

    

    exercise
      and
      issuance comply with all relevant provisions of applicable law, including the
      requirements of any stock exchange on which the shares may then be
      traded.

     

    8. 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.

     

    9. 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.

     

    10. 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

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

        
           

        

      

    

    ACKNOWLEDGEMENT
      FORM

    

    

    I
      have read the
      terms of the Integrys Energy group, Inc. Nonqualified Stock Option 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.

    

    

    _____________________________________________

    Optionee

    

    Print
      name:____________________________________

    

    

    PLEASE
      DETACH THIS
      ACKNOWLEDGEMENT FORM FROM THE OPTION AGREEMENT AND RETURN IT TO THE GREEN BAY
      HUMAN RESOURCES DEPARTMENT.  YOUR OPTION WILL NOT BECOME EFFECTIVE
      UNTIL THE COMPANY RECEIVES THIS ACKNOWLEDGMENT FORM.exh1014.htm

    Exhibit
      10.14

    
 

    INTEGRYS
      ENERGY GROUP, INC.

    DEFERRED
      COMPENSATION PLAN

    

    As
      Amended and
      Restated Effective April 1, 2008

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    

    
      	 	
               TABLE
                OF
                CONTENTS

            	 
	 	 	
               Page

            
	 	 	 
	
               ARTICLE
                I. DEFINITIONS
                AND CONSTRUCTION

            	
               2

            
	
               

            	
               Section
                1.01.
                Definitions.

            	
               2

            
	 	
               Section
                1.02.
                Construction and Applicable
                Law.

            	
               5

            
	
               

            	 	 
	
               ARTICLE
                II.
                PARTICIPATION 

            	
               6

            
	 	
               Section
                2.01.
                Eligibility.

            	
               6

            
	 	 	 
	
               ARTICLE
                III. EMPLOYEE
                DEFERRED COMPENSATION 

            	
               7

            
	 	
               Section
                3.01.
                Application.

            	
               7

            
	 	
               Section
                3.02. Deferrals
                Of Base Compensation.

            	
               7

            
	
               

            	
               Section
                3.03. Deferrals
                of Annual Bonus Awards.

            	
               8

            
	 	
               Section
                3.04. Deferral
                of LTIP Share Awards.

            	
               8

            
	 	
               Section
                3.05. Matching
                Contribution Credits. 

            	
               9

            
	 	
               Section
                3.06. Defined
                Contribution Restoration Credits. 

            	
               10

            
	 	
               Section
                3.07. Defined
                Contribution SERP Credits.

            	
               11

            
	 	
               Section
                3.08. Other
                Deferrals and Credits.

            	
               12

            
	 	
               Section
                3.09.
                Involuntary Termination of Deferral
                Elections.

            	
               12

            
	 	 	 
	
               ARTICLE
                IV. DIRECTOR
                DEFERRED COMPENSATION 

            	
               13

            
	 	
               Section
                4.01.
                Application.

            	
               13

            
	 	
               Section
                4.02. Deferrals
                Of Director Fees. 

            	
               13

            
	 	
               Section
                4.03. Director
                Deferred Stock Units. 

            	
               14

            
	 	
               Section
                4.04.
                Involuntary Termination of Deferral
                Elections.

            	
               14

            
	 	 	 
	 ARTICLE
              V. PARTICIPANT
              ACCOUNTS, RESERVE ACCOUNT A, RESERVE ACCOUNT B, AND STOCK UNITS
              ACCOUNTS	
               15

            
	 	
              Section
                5.01.
                Participant Accounts. 

            	
              15

            
	 	
              Section
                5.02. Reserve
                Account A.

            	 15
	 	
              Section
                5.03. Reserve
                Account B.

            	 16
	 	
              Section
                5.04. Integrys
                Stock Units. 

            	 17
	 	
              Section
                5.05. Special
                Rules Applicable to Restricted Stock
                Deferrals. 

            	
              20

            
	 	
               

            	 
	
              ARTICLE
                VI. ACCOUNTING AND
                HYPOTHETICAL INVESTMENT ELECTIONS 

            	22 
	 	
              Section
                6.01. Hypothetical
                Investment of Participant Accounts. 

            	22 
	 	
              Section
                6.02. Accounts are For
                Record Keeping Purposes Only. 

            	24 
	 	 	 
	
              ARTICLE
                VII. DISTRIBUTION OF
                PRE-2005 ACCOUNT  

            	25 
	 	
              Section
                7.01. Distribution
                Election. 

            	25 
	 	
              Section
                7.02. Modified
                Distribution Election. 

            	26 
	 	
              Section
                7.03. Calculation of
                Annual Distribution Amount.  

            	26 

    

     

    
      
        i

      

      
         

        
          

        

      

      
         

      

       

      
      

      
        	 	 Section
                7.04. Time of Distribution.	
                 27

              
	 	 Section
                7.05. Single
                Sum Distribution at the Committee’s Option.	
                27

              
	 	 	 
	 ARTICLE
                VIII.
                DISTRIBUTION OF POST-2004 ACCOUNT 	
                 29

              
	 	 Section
                8.01.
                Distribution Election. 	
                 29

              
	
                 

              	 Section
                8.02. Modified
                Distribution Election.	
                 30

              
	 	 Section
                8.03.
                Calculation of Annual Distribution Amount. 	
                 30

              
	 	 Section
                8.04. Time of
                Distribution.	
                 31

              
	 	 Section
                8.05. Automatic
                Single Sum Distribution. 	
                 31

              
	 	 Section
                8.06.
                Distributions For Employment Tax Obligations.	
                 32

              
	 	 	 
	 ARTICLE
                IX. RULES WITH
                RESPECT TO INTEGRYS STOCK AND INTEGRYS STOCK UNITS 	
                 33

              
	 	 Section
                9.01. Shares
                Authorized. 	
                 33

              
	 	 Section
                9.02.
                Transactions Affecting Integrys Stock.	
                 33

              
	 	 Section
                9.03. No
                Shareholder Rights With Respect to Integrys Stock Units. 	
                 33

              
	 	 	 
	 ARTICLE
                X. SPECIAL RULES
                APPLICABLE IN THE EVENT OF A CHANGE IN CONTROL OF THE
                COMPANY 	
                 34

              
	 	 Section
                10.01.
                Definitions.	
                 34

              
	 	 Section
                10.02.
                Amendments in Connection with a Change in Control. 	
                 36

              
	 	 Section
                10.03. Maximum
                Payment Limitation.	
                 38

              
	 	 Section
                10.04.
                Resolution of Disputes.	
                 39

              
	 	 	 
	 ARTICLE
                XI. GENERAL
                PROVISIONS 	
                 40

              
	 	 Section
                11.01.
                Administration.	
                 40

              
	 	 Section
                11.02.
                Restrictions to Comply with Applicable Law.	
                 40

              
	 	 Section
                11.03. Claims
                Procedures.	
                 41

              
	 	 Section
                11.04.
                Participant Rights Unsecured. 	
                 42

              
	 	 Section
                11.05. Income
                Tax Withholding.	
                 42

              
	 	 Section
                11.06. Amendment
                or Termination of Plan.	
                 43

              
	 	 Section
                11.07.
                Administrative Expenses.	
                 45

              
	 	 Section
                11.08. Effect on
                Other Employee Benefit Plans.	
                 45

              
	 	 Section
                11.09.
                Successors and Assigns.	
                 45

              
	 	 Section
                11.10. Right of
                Offset. 	
                 45

              
	 	 Section
                11.11. Amounts
                Accumulated Under Peoples Energy Corporation Plans.	
                 45

              
	 	 Section
                11.12.
                Miscellaneous Distribution Rules. 	
                 46

              

      

    

    

    
      
        ii

      

      
        
        

        
          

        

      

      
        
        

      

    

    INTEGRYS
      ENERGY GROUP, INC.

    DEFERRED
      COMPENSATION PLAN

    

    The
      Integrys Energy
      Group, Inc. Deferred Compensation Plan (the “Plan”), which was previously known
      as the WPS Resources Corporation Deferred Compensation Plan, has been adopted
      to
      promote the best interests of Integrys Energy Group, Inc. (the “Company”) and
      the stockholders of the Company by attracting and retaining key management
      employees and non-employee directors possessing a strong interest in the
      successful operation of the Company and its subsidiaries or affiliates and
      encouraging their continued loyalty, service and counsel to the Company and
      its
      subsidiaries or affiliates.  The Plan is amended and restated
      effective April 1, 2008 as set forth herein.

     

    Except
      as expressly
      provided herein, the Plan, as herein amended and restated, applies to (i) those
      employees who are actively employed by the Company or a Participating Employer
      on or after January 1, 2005 (the effective date of Internal Revenue Code Section
      409A), and who have been designated for participation by the Committee, and
      (ii)
      non-employee directors of the Company and designated subsidiaries and affiliates
      with service as a director on or after January 1, 2005.  Except
      as expressly provided herein, distribution of benefits to an employee who
      retired from or terminated employment with the Company and its Affiliates prior
      to January 1, 2005, or a director whose service with the Company and its
      Affiliates terminated prior to January 1, 2005, shall be governed by the terms
      of the Plan (or predecessor plan) as in effect on the date of the employee’s or
      director’s retirement or termination of employment or service.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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) Account:  The
      record keeping account or accounts maintained to record the interest of each
      Participant under Section 5.01 of the Plan.

     

    (b) Act:  The
      Securities Act of 1933, as interpreted by regulations and rules issued pursuant
      thereto, all as amended and in effect from time to time.  Any
      reference to a specific provision of the Act shall be deemed to include
      reference to any successor provision thereto.

     

    (c) Affiliate:  A
      corporation, trade or business that, with the Company, forms part of a
      controlled group of corporations or 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..

     

    (d) Annual
      Bonus
      Deferral:  A deferral of all or a portion of an Eligible Employee’s
      annual bonus award in accordance with Section 3.03.

     

    (e) Base
      Compensation:  The base salary or wage payable by a Participating
      Employer to an Eligible Employee for services performed prior to reduction
      for
      contributions by the Eligible Employee to this Plan or pre-tax or after-tax
      contributions by the Eligible Employee to any other  employee benefit
      plan maintained by a Participating Employer, but exclusive of extraordinary
      payments such as overtime, bonuses, meal allowances, reimbursed expenses,
      termination pay, moving pay, commuting expenses, severance pay, non-elective
      deferred compensation payments or accruals, stock options or other equity grants
      or awards, or the value of employer-provided fringe benefits or coverage, all
      as
      determined in accordance with such uniform rules, regulations or standards
      as
      may be prescribed by the Committee.

     

    (f) Base
      Compensation
      Deferral:  A deferral of all or a portion of an Eligible Employee’s
      Base Compensation in accordance with Section 3.02.

     

    (g) Beneficiary:  The
      person or entity designated by a Participant to be his or her beneficiary for
      purposes of this Plan.  If a Participant designates his or her spouse
      as a beneficiary, such beneficiary designation automatically shall become null
      and void, with respect to any undistributed portion of the Participant’s
      Account, on the date that the Committee obtains actual knowledge 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 from the Plan, any remaining payments shall be paid to the estate
      of that beneficiary.  Beneficiary designations shall be in writing,
      filed with the Committee, and in such form as the Committee may prescribe for
      this purpose.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

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

     

    (i) 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
      reference to any successor provision thereto.

     

    (j) Committee:  The
      Compensation Committee of the Board (with respect to Eligible Employee
      participation) or the Governance Committee of the Board (with respect to
      Director participation), or such other committee as may be appointed by the
      Board and that satisfies the requirements of Section 11.01.

     

    (k) Company:  Integrys
      Energy Group, Inc. or any successor corporation.  Prior to February
      21, 2007, the Company was known as WPS Resources Corporation.

     

    (l) Director:  A
      non-employee member of the Board, a non-employee member of the board of
      directors of an Affiliate who is designated for participation by the Board,
      and
      where the context so requires, a former director entitled to receive a benefit
      hereunder.

     

    (m) Director
      Deferral:  A deferral by a Director of all or a portion of his or her
      Director Fees in accordance with Section 4.02.

     

    (n) Director
      Fees:  Those fees, other than fees that are automatically credited to
      the Director in the form of Stock Units pursuant to Section 4.03, that are
      payable in cash to a Director for services rendered on the Board (including
      attendance fees and fees for serving as a committee chair) or for service on
      the
      board of directors of an Affiliate.

     

    (o) Disability:  The
      inability of a Participant to engage in any substantial gainful activity by
      reason of a medically determinable physical or mental impairment which can
      be
      expected to result in death or can be expected to last for a continuous period
      of not less than 12 months, as determined by the Committee.

     

    (p) Eligible
      Employee:  A common law employee of a Participating Employer who has
      been designated by the Committee as being eligible to participate in this Plan
      and, where the context so requires, a former employee entitled to receive a
      benefit hereunder.

     

    (q) 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 reference to any successor provision thereto.

     

    (r) Exchange
      Act:  The Securities Exchange Act of 1934, as interpreted by
      regulations and rules issued pursuant thereto, all as amended and in effect
      from
      time to time.  Any reference to a specific provision of the Exchange
      Act shall be deemed to include reference to any successor provision
      thereto.

     

    (s) Integrys
      Stock:  The common stock, $1.00 par value, of the
      Company.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (t) Integrys
      Stock
      Units or Stock Units:  The hypothetical shares of Integrys Stock that
      are credited to a Participant’s Stock Unit Account in accordance with Section
      5.04.  A Participant’s Stock Units are further classified as Locked
      Stock Units or Discretionary Stock Units, in accordance with Section
      5.04.

     

    (u) Investment
      Options:  The hypothetical investment accounts described in Article V
      and such other investment options as the Committee may from time to time
      determine (which may, but need not, be based upon one or more of the investment
      options available under a defined contribution plan sponsored by the Company
      or
      an Affiliate).

     

    (v) LTIP
      Deferral:  A deferral of all or a portion of the performance shares,
      restricted stock or other stock-based compensation awarded to an Eligible
      Employee under the Omnibus Plan, in accordance with Section 3.04.

     

    (w) Omnibus
      Plan:  The Integrys Energy Group, Inc. 2007 Omnibus Incentive
      Compensation Plan, the Integrys Energy Group, Inc. 2005 Omnibus Incentive
      Compensation Plan (previously known as the WPS Resources Corporation 2005
      Omnibus Incentive Compensation Plan), or the Integrys Energy Group, Inc. 2001
      Omnibus Incentive Compensation Plan (previously known as the WPS Resources
      Corporation 2001 Omnibus Incentive Compensation Plan), as required by the
      context.

     

    (x) Participant:  A
      Director and/or an Eligible Employee, as required by the context.

     

    (y) Participating
      Employer:  The Company and each Affiliate that, with the consent of
      the Committee, participates in the Plan for the benefit of one or more
      Participants.

     

    (z) Pre-2005
      Account:  See Section 5.01.

     

    (aa) Post-2004
      Account:  See Section 5.01.

     

    (bb) 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 by either 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    by
      statute or by
      contract; provided that if the leave of absence is due to a medically
      determinable 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 Executive 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.

     

    (cc) Stock
      Unit
      Account:  The portion of a Participant’s overall Account that is
      deemed to be invested in Stock Units, as described in Section 5.04.

     

    (dd) Trust:  The
      Integrys Energy Group, Inc. Deferred Compensation Trust (which was previously
      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.

     

    (ee) Valuation
      Date:  See Section 6.01(c).

     

    
      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.

     

    (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 state laws
      are
      not preempted by federal law.  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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    ARTICLE
      II. 
PARTICIPATION

     

    
      Section
        2.01. 
Eligibility.

    

     

    (a) A
      Director shall be
      eligible to participate in the Plan immediately upon becoming a member of the
      Board.

     

    (b) An
      employee shall
      be eligible to participate in the Plan only if the employee is employed by
      a
      Participating Employer and if the employee has been designated as an Eligible
      Employee by the Committee.  When designating an employee as an
      Eligible Employee, the Committee, in its sole discretion, may designate the
      employee for participation in the entire Plan or any part thereof.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    ARTICLE
      III.  EMPLOYEE DEFERRED COMPENSATION

    
      Section
        3.01. 
Application.

    

     

    This
      Article III
      applies to Participants other than Directors.

     

    
      Section
        3.02. 
Deferrals
        Of Base
        Compensation.

    

     

    (a) Amount.  A
      Participant may elect, in such form and manner as the Committee may prescribe,
      to defer payment of a portion of the Base Compensation that would otherwise
      be
      paid to the Participant.  A Participant’s election shall specify the
      percentage (in increments of 1% to a maximum of 100% or such lesser amount
      or
      percentage as may be established by the Committee or as may be consistent with
      Code Section 409A and necessary in order to comply with applicable withholding
      obligations, whether attributable to withholdings required under applicable
      law
      or other authorized withholdings) of the Participant’s Base Compensation that
      the Participant wishes to defer.

     

    (b) Initial
      Deferral
      Election.  In the case of a Participant who has been designated
      for participation for the first time (and who has not previously been designated
      as being eligible for participation in another deferred compensation plan that
      is required to be aggregated with this Plan for purposes of Code Section 409A)
      and who completes a deferral election within 30 days of becoming eligible to
      participate in the Plan, the Participant’s validly executed deferral election
      shall become effective with respect to services to be performed subsequent
      to
      the election, or as soon thereafter as practicable.  If the
      Participant does not submit a deferral election during the initial 30 day
      election period, the Participant may thereafter elect to defer payment of Base
      Compensation by submitting a validly executed deferral election to the
      Committee, but the election shall become effective and shall apply only to
      Base
      Compensation for the calendar year following the calendar year during which
      the
      election is received and accepted by the Committee, or as soon thereafter as
      practicable.  A Participant’s deferral election, once effective, shall
      remain in effect until modified by the Participant in accordance with subsection
      (c) below or otherwise revoked in accordance with Plan rules.

     

    (c) Revised
      Deferral
      Election.  Except to the extent that the Committee is permitted
      (and elects) to give earlier effect to a Participant’s revocation or revision to
      his or her deferral election in accordance with regulations promulgated by
      the
      Secretary of the Treasury under Code Section 409A, a Participant’s deferral
      election, once effective with respect to a calendar year, may not be revoked
      or
      modified with respect to Base Compensation for that calendar year.  A
      Participant may modify his or her then current deferral election by filing
      a
      revised deferral election form, properly completed and signed, with the
      Committee.  However, except to the extent that the Committee is
      permitted (and elects) to give earlier effect to a Participant’s revised
      election in accordance with regulations promulgated by the Secretary of the
      Treasury under Code Section 409A, the revised election will be effective only
      with respect to Base Compensation for  the calendar year following the
      calendar year during which the revised election is received and accepted by
      the
      Committee, or as soon thereafter as practicable.  A Participant’s
      revised deferral 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    election,
      once
      effective, shall remain in effect until again modified by the Participant under
      this subsection (c) or otherwise revoked in accordance with Plan
      rules.

     

    (d) Base
      Compensation Paid
      Following Year End For the Payroll Period That Includes December
      31.  For purposes of applying a Participant’s deferral
      election, Base Compensation paid after December 31 of a calendar year that
      is
      attributable solely to services performed during the payroll period that
      includes December 31, if paid in accordance with the normal timing arrangement
      by which a Participating Employer compensates employees for services rendered,
      is treated as Base Compensation for services performed in the subsequent
      calendar year, even though part or all of the Participant’s services might have
      been performed in the prior calendar year.

     

    
      Section
        3.03. 
Deferrals
        of Annual Bonus
        Awards.

    

     

    A
      Participant may elect, in such form and manner as the Committee may prescribe,
      to defer payment of a portion of the annual cash bonus that is awarded and
      that
      would otherwise be paid to the Participant with respect to any
      year.  A Participant’s election shall specify the percentage (in
      increments of 1% to a maximum of 100% or such lesser amount or percentage as
      may
      be established by the Committee or as may be consistent with Code Section 409A
      and necessary in order to comply with applicable withholding obligations,
      whether attributable to withholdings required under applicable law or other
      authorized withholdings) of the Participant’s annual cash bonus that the
      Participant wishes to defer.  In the case of any award that is not
      performance-based compensation for purposes of Code Section 409A, a validly
      executed deferral election shall be effective only if the deferral election
      is
      received and accepted by the Committee prior to the last day of the calendar
      year preceding the calendar year for which the annual bonus is paid, or by
      such
      other time as provided in regulations promulgated by the Secretary of the
      Treasury.  In the case of any award that is performance-based
      compensation for purposes of Code Section 409A, a validly executed deferral
      election shall become effective with respect to the annual bonus that may be
      awarded to the Participant with respect to a calendar year if the Participant’s
      deferral election is received and accepted by the Committee at least 6 months
      prior to the end of the (calendar year) performance period for the bonus, or
      by
      such earlier (but not later) date as the Committee may establish.  A
      Participant’s election to defer part or all of an annual bonus award becomes
      irrevocable at the end of the permitted elected period, and the Participant
      may
      not thereafter revoke or modify his or her election.  A Participant’s
      election to defer part or all of an annual bonus award shall be effective only
      for the annual bonus to which the election relates, and shall not carry over
      from year to year or from bonus to bonus.

     

    
      Section
        3.04. 
Deferral
        of LTIP Share
        Awards.

    

     

    A
      Participant may elect, in such form and manner as the Committee may prescribe,
      to defer payment of a portion of any performance share, restricted stock or
      other stock-based compensation awarded to the Participant under the Omnibus
      Plan.  A Participant’s election shall specify the whole number of
      shares (up to 100% of such shares or such lesser number or percentage as may
      be
      established by the Committee or as may be consistent with Code Section 409A
      and necessary in order to comply with applicable withholding obligations,
      whether attributable to withholdings required under applicable law or other
      authorized withholdings) of 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    the
      Participant’s
      award that the Participant wishes to defer.  In the case of any award
      that is not performance-based compensation for purposes of Code Section 409A,
      a
      validly executed deferral election shall be effective only if the deferral
      election is received and accepted by the Committee in accordance with rules
      established by the Committee pursuant to Code Section 409A.  In
      the case of any award that is performance-based compensation for purposes of
      Code Section 409A, a validly executed deferral election shall become effective
      with respect to shares to be earned by the Participant with respect to any
      Omnibus Plan performance period if the Participant’s deferral election is
      received and accepted by the Committee at least 6 months prior to the end of
      such performance period or by such earlier (but not later) date as the Committee
      may establish.  A Participant’s election to defer part or all of an
      LTIP share award becomes irrevocable at the end of the permitted elected period,
      and the Participant may not thereafter revoke or modify his or her
      election.  A Participant’s election to defer an award shall be
      effective only for the Omnibus Plan award, service period or performance period
      to which the election relates, and a Participant’s election does not carry over
      from award to award, performance period to performance period or from service
      period to service period.

     

    
      Section
        3.05. 
Matching
        Contribution
        Credits.

    

     

    (a) Allocation
      of
      Credits.  A Participant who is a participant in a defined
      contribution 401(k) savings plan maintained by the Company or an Affiliate
      (“Savings Plan”), and who makes Base Compensation Deferrals and/or Annual Bonus
      Deferrals under this Plan, shall be entitled to a matching contribution credit,
      determined as of December 31 of each year, equal to the difference (if any)
      between:

     

    
      	
              (i)  

            	
              The
                value of
                the matching contribution that the Participant would have received
                for the
                calendar year under or with respect to the Savings Plan in which
                the
                Participant is eligible, if Base Compensation Deferrals and Annual
                Bonus
                Deferrals made by the Participant under this Plan were instead treated
                as
                “compensation” under the Savings Plan for purposes of applying the
                Participant’s deferral election under the Savings Plan; provided that all
                limits and restrictions otherwise imposed under the Savings Plan,
                including the maximum compensation limit under Section 401(a)(17) of
                the Code, shall continue to apply;
                and

            

    

     

    
      	
              (ii)  

            	
              The
                value of
                the matching contribution actually received by the Participant for
                that
                year under the Savings Plan.

            

    

     

    (b) Investment
      of
      Credits.  Matching contribution credits with respect to periods
      prior to January 1, 2008 will be credited to the Participant in the form of
      Locked Stock Units under Section 5.04(b).  Matching contribution
      credits with respect to periods after December 31, 2007 shall be credited to
      the
      Participant’s Account in accordance with the Participant’s investment direction
      under Section 6.01(a).

     

    (c) No
      Duplication.  The credit under this Section shall not duplicate
      any credit to which the Participant is entitled under Section 3.06
      below.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      Section
        3.06. 
Defined
        Contribution
        Restoration Credits.

    

     

    (a) Eligibility.  Unless
      the Committee determines otherwise, a Participant who is hired on or after
      January 1, 2008 (other than a Participant whose employment contract or agreement
      excludes the Participant from receiving pension restoration, supplemental
      retirement or similar restoration benefits or credits) and who is eligible
      to
      make contributions to a qualified defined contribution retirement plan
      maintained by the Company or an Affiliate (“Defined Contribution Plan”) may be
      eligible to receive an additional credit to his or her Account for each year,
      in
      accordance with the rules of this Section.  Effective January 1, 2013,
      unless the Committee determines otherwise, all Participants (other than a
      Participant whose employment contract or agreement excludes the Participant
      for
      receiving pension restoration, supplemental retirement or similar restoration
      benefits or credits) may be eligible to receive an additional credit to his
      or
      her Account for each year, in accordance with the rules of this
      Section.

     

    (b) Amount
      of Additional
      Credit.  The additional credit for any year shall
      be:

     

    
      	
              (i)  

            	
              Matching
                Contribution
                Credit.  If the Participant for any year is eligible to
                make elective deferral or other contributions to the Defined Contribution
                Plan and to receive a matching contribution with respect to such
                amounts,
                the Participant shall receive an additional credit under this Plan
                equal
                to five percent (5%) of the Participant’s compensation for the year that
                is in excess of the Code Section 401(a)(17) limitation in effect
                for such
                year.  For this purposes, the Participant’s compensation shall
                be the Participant’s compensation as defined in the Defined Contribution
                Plan, except that Base Compensation Deferrals and Annual Bonus Deferrals
                made by the Participant under this Plan shall be treated as if they
                had
                been paid to the Participant in cash.  This credit is to
                approximately reflect the matching contribution that the Participant
                could
                have received under the Defined Contribution Plan if the Participant
                had
                been permitted to make contributions to the Defined Contribution
                without
                being subject to the limitations under Code Sections 401(a)(17),
                402(g),
                415 or any limitation under the
                Code.

            

    

     

    
      	
              (ii)  

            	
              Non-Elective
                Contribution Credit.  If the Participant for any year is
                eligible for an employer non-elective (non-matching) contribution
                under
                the Defined Contribution Plan and if the Participant’s allocation under
                the Defined Contribution Plan is limited because of the limitations
                of
                Code Section 401(a)(17) or 415, the Participant shall receive an
                additional credit under this Plan equal to the difference between
                (A) the
                employer non-elective contribution that would have been allocated
                to the
                

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              Participant
                for the year under the Defined Contribution Plan if the Code Section
                401(a)(17) and 415 limitations did not apply and if Base Compensation
                and
                Annual Bonus Deferrals made by the Participant under this Plan are
                treated
                as if they had been paid to the Participant in cash, and (B) the
                employer
                non-elective contribution to which the Participant is actually entitled
                for such year under the Defined Contribution
                Plan.

            

    

     

    (c) Vesting.  A
      Participant will have a vested and non-forfeitable right to the credits made
      under this Section, and any deemed investment gains or losses, if the
      Participant terminates employment with the Company and its Affiliates after
      having completed at least three (3) years of service.  If the
      Participant terminates employment prior to completing three (3) years of
      service, the Participant’s credits under this Section, together will all deemed
      investment gains or losses, shall be forfeited.

     

    
      Section
        3.07. 
Defined
        Contribution SERP
        Credits.

    

     

    (a) Eligibility.  This
      Section is limited to Participants who have been specifically selected by the
      Committee to receive SERP Credits under this Section with respect to periods
      on
      and after April 1, 2008 (with respect to periods on and after January 1, 2013
      in
      the case of a Participant who is covered under a qualified defined benefit
      plan).  Even though the Committee may have designated an employee as
      being generally eligible for the Plan, the employee shall not be eligible for
      the Defined Contribution SERP credits described in this Section unless the
      Committee has specifically designated the employee as being
      eligible.

     

    (b) Amount
      of SERP
      Credit.  The SERP Credit shall be calculated and credited
      following the conclusion of each calendar year.  If the Committee has
      designated a Participant as being eligible to receive a SERP credit under this
      Section, the Committee shall also designate the percentage of the Participant’s
      base salary and annual incentive that is to be credited to the Participant’s
      Account as a SERP Credit; provided that if the Committee designates a
      Participant as being eligible to receive a SERP Credit under this Section but
      the Committee does not affirmatively designated the applicable percentage of
      the
      Participant’s base salary and annual incentive to be credited, the applicable
      percentage shall be twelve percent (12%) until the Committee affirmatively
      designates a different percentage.  For this purpose, any Base
      Compensation and Annual Bonus Deferrals made by the Participant under this
      Plan
      are treated as if they had been paid to the Participant in cash.  The
      Committee may from time to time change that amount of the SERP Credit applicable
      to any Participant, and the fact that a Participant receives a SERP Credit
      for
      any year (or portion of a year) does not provide the Participant with any right
      or entitlement to a SERP Credit with respect to any other period.  Any
      changes in the SERP Credit to which a Participant receives shall be made in
      accordance with the requirements of Code Section 409A.

     

    (c) Vesting.  A
      Participant will have a vested and non-forfeitable right to the credits made
      under this Section, and any deemed investment gains or losses, if the
      Participant terminates employment with the Company and its Affiliates after
      having completed at least five (5) years of service.  If the
      Participant terminates employment prior to completing five (5) years of service,
      

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    the
      Participant’s
      credits under this Section, together will all deemed investment gains or losses,
      shall be forfeited.

     

    
      Section
        3.08. 
Other
        Deferrals and
        Credits.

    

     

    The
      Committee, in
      its discretion, may, with respect to any Participant, determine that the
      Participant is eligible to make deferrals with respect to additional components
      of the Participant’s remuneration or receive employer contribution credits in
      addition to the credits described herein.  In no event, however, shall
      the Committee authorize such additional deferrals or credits unless the
      Committee has first determined that the deferrals or credits have been elected
      or authorized in a manner that will not result in the imposition of tax under
      Code Section 409A.

     

    
      Section
        3.09. 
Involuntary
        Termination of
        Deferral Elections.

    

     

    A
      Participant’s deferral elections shall be automatically revoked upon the
      Participant’s termination of employment from the Participating Employers, unless
      the Committee determines otherwise in accordance with the requirements of Code
      Section 409A.  In addition, and subject to Code Section 409A, a
      Participant’s deferral election will terminate if the Committee determines that
      the Participant is no longer eligible to participate in the Plan or that
      revocation of a Participant’s eligibility is necessary or desirable in order for
      the Plan to qualify under ERISA as a plan of deferred compensation for a select
      group of management or highly compensated employees.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    ARTICLE
      IV.  DIRECTOR
      DEFERRED COMPENSATION

    
      Section
        4.01. 
Application.

    

     

    This
      Article IV
      applies only to Directors.

     

    
      Section
        4.02. 
Deferrals
        Of Director
        Fees.

    

     

    (a) Amount.  A
      Director may elect, in such form and manner as the Committee may prescribe,
      to
      defer payment of all or a portion of the Director Fees that would otherwise
      be
      paid in cash  to the Director.  A Director’s election shall
      specify the percentage (in increments of 1% to a maximum of 100% or such lesser
      amount or percentage as may be established by the Committee or as may be
      consistent with Code Section 409A and necessary in order to comply with
      applicable withholding obligations, whether attributable to withholdings
      required under applicable law or other authorized withholdings) of the Director
      Fees that the Director wishes to defer.

     

    (b) Initial
      Deferral
      Election.  In the case of a Director who has become eligible
      for participation in the Plan for the first time (and who has not previously
      been designated as being eligible for participation in another deferred
      compensation plan that is required to be aggregated with this Plan for purposes
      of Code Section 409A), and who completes a deferral election within 30 days
      of
      becoming eligible to participate in the Plan, the Director’s validity executed
      deferral election shall become effective with respect to services to be
      performed subsequent to the election, or as soon thereafter as
      practicable.  If the Director does not submit an initial deferral
      election during the initial 30 day election period, the Director may thereafter
      elect to defer the payment of Director Fees by submitting a validly executed
      deferral election to the Committee, but the election shall become effective
      and
      shall apply only to Directors Fees for the calendar year following the calendar
      year in which the election is received and accepted by the Committee, or as
      soon
      thereafter as practicable.  A Director’s deferral election, once
      effective, shall remain in effect until modified by the Director in accordance
      with subsection (c) below or otherwise revoked in accordance with Plan
      rules.

     

    (c) Revised
      Deferral
      Election.  Except to the extent that the Committee is permitted
      (and elects) to give earlier effect to a Director’s revocation or revision to
      his or her deferral election in accordance with regulations promulgated by
      the
      Secretary of the Treasury under Code Section 409A, a Director’s deferral
      election, once effective with respect to a calendar year, may not be modified
      or
      revoked with respect to Director Fees for that calendar year.  A
      Director may modify his or her then current deferral election by filing a
      revised deferral election form, properly completed and signed, with the
      Committee.  However, except to the extent that the Committee is
      permitted (and elects) to give earlier effect to a Participants revision to
      his
      or her deferral election in accordance with regulations promulgated by the
      Secretary of the Treasury under Code Section 409A, the revised election will
      be
      effective with respect to Director Fees for the calendar year following the
      calendar year during which the revised election is received and accepted by
      the
      Committee, or as soon thereafter as practicable.  A Director’s revised
      deferral

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    election,
      once
      effective, shall remain in effect until again modified by the Director in
      accordance with this subsection (c) or otherwise revoked in accordance with
      Plan
      rules.

     

    (d) Director
      Fees Paid Following
      Year End For the Period That Includes December 31.  For
      purposes of applying a Director’s deferral election, Director Fees paid after
      December 31 of a calendar year that are attributable solely to services
      performed during the a period that includes December 31, if paid in accordance
      with the normal timing arrangement by which a Participating Employer compensates
      Directors for services rendered, is treated as Director Fees for services
      performed in the subsequent calendar year, even though part or all of the
      Director’s services might have been performed in the prior calendar
      year.

     

    
      Section
        4.03. 
Director
        Deferred Stock
        Units.

    

     

    The
      Board may from
      time to time direct that a portion of the remuneration to be earned by a
      Director for service on the Board shall be credited under this Plan in the
      form
      of Stock Units.  Except to the extent that the Committee is permitted
      (and elects) to give earlier effect to a direction in accordance with
      regulations promulgated by the Secretary of the Treasury under Code Section
      409A, any such direction shall be effective with respect to remuneration to
      be
      earned by the Director on and after January 1 of the calendar year following
      the
      date of such direction, and shall continue in effect through December 31 of
      the
      calendar year in which modified or revoked by a subsequent direction of the
      Board.  The Board’s direction may provide either for the direct credit
      of Stock Units or for the mandatory deferral of a prescribed amount of cash
      remuneration that will be converted into Stock Units in accordance with Section
      5.04.

     

    
      Section
        4.04. 
Involuntary
        Termination of
        Deferral Elections.

    

     

    A
      Director’s deferral elections shall be automatically revoked upon the Director’s
      termination of service with the Participating Employers, unless the Committee
      determines otherwise in accordance with Code Section 409A.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    ARTICLE
      V.  PARTICIPANT
      ACCOUNTS, RESERVE ACCOUNT A, RESERVE ACCOUNT B, AND STOCK UNITS
      ACCOUNTS

     

    
      Section
        5.01. 
Participant
        Accounts.

    

     

    A
      record keeping Account will be maintained to record the interest of each
      Participant under the Plan.  An Account is established for record
      keeping purposes only and not to reflect the physical segregation of assets
      on
      the Participant’s behalf.  A Participant’s Account will consist of
      separate balances to record a Participant’s interest in each of the Investment
      Options, and to record the portion of a Participant’s overall Account that is
      attributable to deferrals and contribution credits made and vested prior to
      January 1, 2005, together with any earnings or loss thereon through the date
      of
      distribution from the Plan (the “Pre-2005 Account”), and the portion of the
      Participant’s overall Account that is attributable to deferrals and contribution
      credits made or vested after December 31, 2004, together with any earnings
      or
      loss thereon through the date of distribution from the Plan (the “Post-2004
      Account”).  Further, a Participant’s Account will consistent of
      separate balances to record the portion of a Participant’s overall Account that
      is attributable to credits under Sections 3.06, 3.07 or 5.05, or any other
      credits, that are subject to a vesting schedule.  The Committee (or
      its delegate) may direct that a Participant’s Account include such additional
      sub-accounts and balances as the Committee (or its delegate) may determine
      to be
      necessary or appropriate.

     

    
      Section
        5.02. 
Reserve
        Account
        A.

    

     

    (a) Limited
      Purpose
      Account.  Reserve Account A is limited to compensation or
      director fees attributable to employment or service with Wisconsin Public
      Service Corporation and that were deferred by a Participant prior to January
      1,
      1996, together with attributed earnings on such deferrals.  Except for
      attributed earnings as described below, no further deferrals, contributions
      or
      credits of any kind will be made to this account on behalf of a Participant,
      nor
      may a Participant transfer amounts from another Investment Option to Reserve
      Account A.  A Participant may transfer amounts credited to Reserve
      Account A to another available Investment Option, but the transferred amount
      may
      not subsequently be transferred back to Reserve Account A.

     

    (b) Crediting
      of Interest
      Equivalent.  Reserve Account A will be credited with an
      interest equivalent on the balance in the account from time to time during
      the
      year.  Unless the Committee prescribes an alternate method, the annual
      interest equivalent rate (on a non-compounded basis) will be the greater
      of:

     

    
      	
              (i)  

            	
              six
                percent
                (6.0%); or

            

    

     

    
      	
              (ii)  

            	
              a
                rate equal
                to the consolidated return on common shareholders’ equity  of
                the Company and all consolidated subsidiaries (ROE); provided, however,
                that unless the Committee determines otherwise, this Paragraph (ii)
                will
                not apply to a Participant following termination of
                

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              employment
                if
                the Participant’s termination of employment with the Company and its
                Affiliates occurs prior to attainment of age fifty-five (55) and
                prior to
                the occurrence of a Change in Control (as defined in Section
                10.01).  For the months of April through September, ROE means
                the consolidated return on equity of the Company and all consolidated
                subsidiaries for the twelve (12) months ended on the preceding February
                28
                (or 29) as calculated pursuant to the Company’s standard accounting
                procedure for financial reporting to shareholders.  For the
                months October through March, ROE means return on equity as described
                above for the twelve (12) months ended on the preceding August
                31.

            

    

     

    (c) Revised
      Rate.  Subject to Article X, the Committee may revise the
      interest equivalent rate or the manner in which it is calculated, but in no
      event shall the rate be less than six percent (6%) per annum.  Any
      such revised rate shall be effective with the calendar month following such
      action by the Committee.

     

    
      Section
        5.03. 
Reserve
        Account
        B.

    

     

    (a) Availability.  Reserve
      Account B is an available Investment Option only with respect to eligible
      deferrals or contribution credits made prior to April 1,
      2008.  Effective April 1, 2008, Reserve Account B is closed to new
      deferrals, contribution credits, or transfers from another Investment
      Option.  A Participant may transfer amounts credited to Reserve
      Account B to another available Investment Option, but the transferred amount
      may
      not subsequently be transferred back to Reserve Account B.

     

    (b) Crediting
      of Interest
      Equivalent.  Reserve Account B will be credited with an
      interest equivalent on the balance in the account from time to time during
      the
      year.  Unless the Committee prescribes an alternate method, the annual
      interest equivalent rate (on a non-compounded basis) will be the greater
      of:

     

    
      	
              (i)  

            	
              six
                percent
                (6.0%); or

            

    

     

    
      	
              (ii)  

            	
              a
                rate equal
                to seventy percent (70%) of the consolidated return on common shareholders
                equity of the Company and all consolidated subsidiaries (ROE); provided,
                however, that unless the Committee determines otherwise, this Paragraph
                (ii) will not apply to a Participant following termination of employment
                if the Participant’s termination of employment with the Company and its
                Affiliates occurs prior to attainment of age fifty-five (55) and
                prior to
                the occurrence of a Change in Control (as defined in
                Section 10.01).  For the months of April through September,
                ROE means the consolidated return on equity of the Company and all
                consolidated subsidiaries for the 

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
                

            	
              twelve
                (12)
                months ended on the preceding February 28 (or 29) as calculated pursuant
                to the Company’s standard accounting procedure for financial reporting to
                shareholders.  For the months October through March, ROE means
                return on equity as described above for the twelve (12) months ended
                on
                the preceding August 31.

            

    

     

    (c) Revised
      Rate.  Subject to Article X, the Committee may revise the
      interest equivalent rate or the manner in which it is calculated, but in no
      event shall the rate be less than six percent (6%) per annum.  Any
      such revised rate shall be effective with the calendar month following such
      action by the Committee.

     

    
      Section
        5.04. 
Integrys
        Stock
        Units.

    

     

    (a) Locked
      and Discretionary
      Stock Units.  For purposes of the Plan, the term “Locked Stock
      Units” refers to the portion of a Participant’s Account that has been credited
      to the Plan in the form of Integrys Stock Units with respect to which the
      Participant is not able to exercise investment discretion or otherwise cause
      such amounts to be transferred to an alternate Investment Option.  The
      term “Discretionary Stock Units” refers to the portion of a Participant’s
      Account that, at any point in time, in deemed to be invested in Integrys Stock
      Units, but the Participant is permitted, in accordance with the rules of the
      Plan, to exercise investment discretion with respect to such amounts or to
      cause
      such amounts to be transferred to an alternate Investment Option.  The
      Locked Stock Units are described in subsection (b) below.  The
      Discretionary Stock Units are all  Stock Units credited to the
      Participant’s Account, other than the Locked Stock Units.

     

    (b) Locked
      Stock
      Units.  The following are Locked Stock Units, meaning that the
      Participant is not able to exercise investment discretion, either with respect
      to the Stock Units that may be credited to the Participant’s Account from these
      sources, or with respect to any additional Stock Units that are credited as
      a
      result of the deemed payment of dividends or other distributions on such Stock
      Units:

     

    
      	
              (i)  

            	
              Stock
                Units
                attributable to deferrals or contribution credits made prior to June
                30,
                2001 that, at the time of the deferral or contribution credits, were
                allocated to a Stock Unit Account (“Prior Plan Stock
                Units”).

            

    

     

    
      	
              (ii)  

            	
              Stock
                Units
                attributable to Annual Bonus Deferrals made after June 30, 2001 and
                prior
                to April 1, 2008, if the Participant received the five percent (5%)
                premium for Annual Bonus Awards irrevocably directed to a Stock Unit
                Account (“Incentive Stock Units”).

            

    

     

    
      	
              (iii)  

            	
              Stock
                Units
                attributable to deferral of Omnibus Plan performance shares the final
                award for which was made after June 30, 2001 and prior to April 1,
                2008
                (“Incentive Stock Units”).

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	
              (iv)  

            	
              Stock
                Units
                attributable to deferral of Omnibus Plan restricted stock that became
                vested prior to April 1, 2008 (“Restricted Stock
                Units”).

            

    

     

    
      	
              (v)  

            	
              Stock
                Units
                attributable to deferral of Omnibus Plan restricted stock with vesting
                dates after March 31, 2008, but only until the date on which the
                Participant becomes vested in such Stock Units.  When the
                Participant’s interest in the Stock Units becomes vested, such Stock Units
                will become Discretionary Stock
                Units.

            

    

     

    
      	
              (vi)  

            	
              Stock
                Units
                attributable to matching contribution credits made with respect to
                periods
                prior to January 1, 2008 under Section 3.05 (“Matching Contribution Stock
                Units”).

            

    

     

    
      	
              (vii)  

            	
              Stock
                Units
                attributable to the portion of a Director’s compensation that, in
                accordance with Section 4.03, is automatically deemed to be invested
                in
                Stock Units with no ability on a part of an individual Director to
                elect
                an alternate form of deemed investment (“Director Stock
                Units”).

            

    

     

    
      	
              (viii)  

            	
              Any
                amounts
                credited in the form of Stock Units under a predecessor deferred
                compensation plan (including, without limitation, the deferred
                compensation plans of Peoples Energy Corporation), if the Participant
                did
                not have the right, under such predecessor plan, to direct that the
                amount
                be transferred to an alternate deemed
                investment.

            

    

     

    
      	
              (ix)  

            	
              Any
                other
                Stock Units that the Committee directs be treated as Locked Stock
                Units or
                that are required to be treated as Locked Stock Units pursuant to
                the
                terms of the employment contract, incentive program or other plan
                that
                sets forth the Participant’s entitlement to be credited with Stock Units
                under the Plan.

            

    

     

    (c) Crediting
      of Stock
      Units.

     

    
      	
              (i)  

            	
              Awards
                or Credits
                Already Expressed in the Form of Integrys Stock.  With
                respect to any amount that is being credited under the Plan in the
                form of
                Stock Units and that, immediately prior to being credited to the
                Participant’s Stock Unit Account, is already expressed as an award of
                shares of Integrys Stock, e.g., Omnibus Plan performance shares or
                restricted stock awards, the Participant will be credited, on a
                one-for-one basis, with a number of Stock

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

       

    

    
      	
                

            	
              Units
                equal
                to the number of shares of Integrys Stock that are being deferred
                or
                credited under the Plan.

            

    

     

    
      	
              (ii)  

            	
              Conversion
                of Other
                Awards or Credits to Stock Units.  With respect to any
                amount that is being credited under the Plan in the form of Stock
                Units
                and that, immediately prior to being credited to the Participant’s Stock
                Unit Account, is not expressed in the form of shares of Integrys
                Stock,
                the amount of the deferral or credit shall be converted, for
                record-keeping purposes, into whole and fractional Stock Units, with
                fractional units calculated to four decimal places.  Except as
                provided in subparagraph (iii) below with respect to Director Stock
                Units
                under Section 4.03, the conversion shall be accomplished by dividing
                the
                amount of the deferral or credit by the closing price of a share
                of
                Integrys Stock on the date on which the deferral or credit would
                otherwise
                have been paid to the Participant, as reported in the Wall Street
                Journal’s New York Stock Exchange Composite Transaction
                listing.

            

    

     

    
      	
              (iii)  

            	
              Special
                Rule for
                Certain Director Stock Units.  All Stock Unit amounts
                directed by the Board in accordance with Section 4.03, for which
                the
                Director is not able to elect an alternate form of deemed investment,
                shall be credited to the Director’s Account in the form of Stock
                Units.  If the Board directs that a Director be credited with a
                prescribed number of Stock Units, the number of units so prescribed
                shall
                be credited to the Director’s Account as of January 1 of the calendar year
                following the date of the Board’s direction or at such other time as the
                Board may prescribe consistent with Code Section 409A.  If the
                Board directs that the Director be credited with Stock Units with
                a
                prescribed value, the amount or value prescribed by the Board will
                be
                converted, for record keeping purposes, into whole and fractional
                Stock
                Units as of January 1 of the calendar year following the date of
                the
                Board’s direction, or at such other time as the Board may prescribe
                consistent with Code Section 409A, with fractional units calculated
                to
                four decimal places.  The conversion shall be accomplished by
                dividing the amount or value designated by the Board by the closing
                price
                of a share of Integrys Stock on the business day immediately preceding
                the
                January 1 crediting date, as reported in the Wall Street Journal’s New
                York Stock Exchange Composite Transactions listing; provided that
                if the
                Board directs, consistent with Code Section 409A, that the Stock
                Units
                should be determined as of a date other than January 1, the conversion
                of
                the amount or 

            

    

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

       

      
        	
                  

              	
                value
                  designated by the Board shall be determined based upon the closing
                  price
                  of a share of Integrys Stock on the date designated by the Board,
                  or if
                  that date is not a business day, on the immediately preceding business
                  day.

              

      

    

     

    (d) Crediting
      of Additional
      Stock Units For Deemed Dividends and Similar
      Distributions.  Any dividends (or similar distribution) that
      would have been payable on the Stock Units credited to a Participant’s Stock
      Unit Account had such Stock Units been actual shares of Integrys Stock, if
      not
      already expressed in the form of shares of Integrys Stock or shares in another
      entity, shall be converted, for record keeping purposes, into whole and
      fractional Stock Units, with fractional units calculated to four decimal
      places.  The conversion shall be accomplished by dividing the amount
      of the dividend or distribution by the closing price of a share of Integrys
      Stock on the payment date for the dividend or distribution.

     

    (e) Conversion
      from Stock Units
      to Another Investment Option.  If a Participant elects under
      Section 6.01(d) to transfer all or any portion of his or her Discretionary
      Stock
      Units to an alternate Investment Option, the Stock Units to which such election
      relates shall be converted, for record keeping purposes, from Stock Units into
      an amount that is equal to the product obtained by multiplying the number of
      such Stock Units that are being transferred by the closing price of a share
      of
      Integrys Stock, on the effective date of such investment transfer, as reported
      in the Wall Street Journal’s New York Stock Exchange Composite Transaction
      listing.

     

    (f) Securities
      Law
      Restrictions.  Notwithstanding anything to the contrary herein,
      all transfer elections under Section 6.01(d) by a Participant who is subject
      to
      Section 16 of the Exchange Act  are subject to review by the Committee
      prior to implementation.  Further, the following transfer transactions
      under Section 6.01(d) by a Participant who is subject to Section 16 of the
      Exchange Act are prohibited: (i) elections to transfer the deemed investment
      of
      the affected Participant’s Account into Stock Units within six (6) months of an
      election to reallocate deemed investments out of Stock Units; and (ii) elections
      to transfer the deemed investment of the affected Participant’s Account out of
      Stock Units within six (6) months of an election to reallocate deemed
      investments into Stock Units (collectively, “Prohibited
      Transactions”).  All Prohibited Transactions are void.  In
      accordance with Section 11.02, the Committee may restrict additional
      transactions, or impose other rules and procedures, to the extent deemed
      desirable by the Committee in order to comply with the Exchange Act, including,
      without limitation, application of the review and approval provisions of this
      Section 5.04(f) to Participants who are not subject to Section 16 of the
      Exchange Act.

     

    
      Section
        5.05. 
Special
        Rules Applicable to
        Restricted Stock Deferrals.

    

     

    Unless
      otherwise determined by the Committee,
      the Participant’s interest in Stock Units attributable to a deferral of an
      Omnibus Plan restricted stock award shall be subject to the same vesting or
      forfeiture conditions to which the Participant would have been subject if the
      Participant had received the restricted stock directly rather than electing
      to
      defer delivery of such shares.  Similarly, except with respect to
      dividend (or other distribution) credits that the Committee has determined
      are
      at all times fully vested and therefore are to be credited to a special
      Restricted Stock Dividend Account, the dividend (or distribution) credit shall
      be credited to the Participant in the form of additional Stock Units, in
      accordance with Section 5.04(d), and 

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

       

    

    such
      additional
      Stock Units shall be subject to the same vesting or forfeiture conditions as
      apply with respect to the underlying Integrys Stock Units on which the dividend
      (or distribution) credit is based.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI.  ACCOUNTING
      AND HYPOTHETICAL INVESTMENT ELECTIONS

    
      Section
        6.01. 
Hypothetical
        Investment of
        Participant Accounts.

    

     

    (a) Deemed
      Investment of All
      Deferrals and Contribution Credits Other Than Deferrals of Restricted
      Stock.

     

    
      	
              (i)  

            	
              In
                accordance
                with uniform rules prescribed by the Committee, each Participant
                shall
                designate, in writing or in such other manner as the Committee may
                prescribe, how deferrals and other authorized contribution credits
                made
                while the designation is in effect, other than deferrals of restricted
                stock, are credited among the Investment Options.  When
                selecting more than one Investment Option, the Participant shall
                designate, in whole multiples of 1% or such other percentage determined
                by
                the Committee, the percentage to be credited to each of the available
                Investment Options.  If the Participant fails to make a timely
                and complete investment designation, the deferrals or other contribution
                credits for which there is not a valid investment election shall
                be
                credited to the same “lifecycle” fund that is or would be the default
                investment option for the Participant under the qualified defined
                contribution plan in which the Participant is eligible, or is such
                other
                Investment Option specified by the Committee for this
                purpose.

            

    

     

    
      	
              (ii)  

            	
              For
                purposes
                of crediting a Participant’s deferral of an Omnibus Plan performance share
                award, or other award that is expressed in shares of Integrys Stock,
                among
                the Investment Options, the following rules shall apply.  With
                respect to the portion of the award that the Participant allocates
                into
                Stock Units, the Participant will be credited with Stock Units, on
                a
                one-for-one basis, in accordance with Section 5.04(c)(i).  With
                respect to the portion of the award that the Participant allocates
                to
                Investment Option(s) other than Stock Units, the amount to be credited
                to
                each Investment Option other than Stock Units will be determined
                by
                multiplying the number of shares of Integrys Stock that corresponds
                to the
                portion of the award that the Participant has allocated to that Investment
                Option by the closing price of a share of Integrys Stock on the date
                on
                which the deferral or credit would otherwise have been paid to the
                Participant, as reported in the Wall Street Journal’s New York Exchange
                Composite Transaction listing.

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

       

    

    
      	
              (iii)  

            	
              A
                Participant’s investment election or deemed investment election shall
                become effective for deferrals and other contribution credits beginning
                with the first payroll period commencing or payment date occurring
                on or
                after the date on which the election is received and accepted by
                the
                Committee, or such other date established by the Committee for this
                purpose, and shall remain in effect for all future deferrals and
                contribution credits unless and until modified by a subsequent election
                that becomes effective in accordance with the rules of this
                subsection.  The Participant’s election under this Section
                6.01(a) governs the deemed investment of deferrals and contribution
                credits made while the Participant’s election is in effect.  A
                Participant’s ability to transfer amounts that are deemed to be invested
                in one Investment Option to another Investment Option is governed
                by
                Section 6.01(d).

            

    

     

    (b) Deemed
      Investment of
      Restricted Stock Deferrals.  Restricted stock deferrals are
      credited to the Plan in the form of Locked Stock Units until vested, at which
      time such Stock Units will become Discretionary Stock Units.  The
      Participant is not permitted to make an investment election with respect to
      Locked Stock Units or to cause Locked Stock Units to be transferred to an
      alternate Investment Option.  A Participant may transfer Discretionary
      Stock Units to an alternate Investment Option in accordance with Section
      6.01(d).

     

    (c) Allocation
      of Deemed
      Investment Gain or Loss.  On each day that the New York Stock
      Exchange is open for business, or at such other times as the Committee may
      prescribe (the “Valuation Date”), the Account of each Participant will be
      credited (or charged) based upon the investment gain (or loss) that the
      Participant would have realized with respect to his or her Account since the
      immediately preceding Valuation Date had the Account been invested in accordance
      with the terms of the Plan and where applicable, the Participant’s
      election.  Subject to the special rules set forth in Article V with
      respect to Reserve Account A, Reserve Account B, and Integrys Stock Units,
      the
      credit (or charge) shall be the sum, separately calculated for each of the
      Investment Options, of the product obtained by multiplying (i) the portion
      (if
      any) of the Participant’s Account as of the immediately prior Valuation Date
      that is deemed to have been invested in each Investment Option, and (ii) the
      rate of return experienced by that Investment Option since the immediately
      preceding Valuation Date.  The Committee, in its discretion, may
      prescribe alternate rules for the valuation of Participant Accounts, including,
      without limitation, the application of unit accounting principles.

     

    (d) Reallocation
      of
      Account. Subject to such restrictions as may be in effect or implemented
      pursuant to Section 5.04(f), and in accordance with rules prescribed by the
      Committee (which may include limitations on the timing or frequency of
      reallocation transactions initiated by some or all Participants), each
      Participant may elect to reallocate his or her Account (other than Locked Stock
      Units) among the available Investment Options; provided that no amounts may
      be
      allocated to Reserve Account A or Reserve Account B.  When selecting
      more than one Investment Option, the Participant shall designate, in whole
      multiples of 1% or such other percentage determined by the Committee, the
      percentage of his or her available 

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    Account
      that is
      deemed to be invested in each available Investment Option after the investment
      reallocation is given effect.  Once effective, a Participant’s
      reallocation shall remain in effect unless and until modified by a subsequent
      election that becomes effective in accordance with the rules prescribed by
      the
      Committee.  Other than a reallocation of a Participant’s Account
      pursuant to a revised investment election submitted by the Participant, the
      deemed investment allocation of a Participant will not be adjusted to reflect
      differences in the relative investment return realized by the various
      hypothetical Investment Options that the Participant has
      designated.

     

    
      Section
        6.02. 
Accounts
        are For Record
        Keeping Purposes Only.

    

     

    Plan
      Accounts and
      the record keeping procedures described herein serve solely as a device for
      determining the amount of benefits accumulated by a Participant under the Plan,
      and shall not constitute or imply an obligation on the part of a Participating
      Employer to fund such benefits.  In any event, a Participating
      Employer may, in its discretion, set aside assets and/or contribute to the
      Trust
      assets equal to part or all of such account balances and invest such assets
      in
      Integrys Stock, life insurance or any other investment deemed
      appropriate.  Any such assets held by a Participation Employer or the
      Trust  shall be and remain the sole property of the Participating
      Employer or the Trust, as applicable, and except to the extent that the Trust
      authorizes a Participant to direct the trustee with respect to the voting of
      Integrys Stock held in the Trust, a Participant shall have no proprietary rights
      of any nature whatsoever with respect to such assets.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII.  DISTRIBUTION OF PRE-2005 ACCOUNT

    
      Section
        7.01. 
Distribution
        Election.

    

     

    (a) Election.  A
      Participant, at the time he or she commenced participation in the Plan, made
      a
      distribution election with respect to his or her Pre-2005
      Account.  The election specified the distribution commencement date,
      the distribution period, and the distribution method applicable following the
      Participant’s death.  Any such election was required to be consistent
      with the following rules (or if the  Participant failed to make a
      selection with respect to a particular item, in accordance with the default
      rules set forth below):

     

    
      	
              (i)  

            	
              Distribution
                Commencement Date.  Unless the Participant has selected a
                later commencement date, which in no event shall be later than the
                first
                distribution period following the Participant’s attainment of age 72,
                distribution of a Participant’s Pre-2005 Account will commence either (A)
                within 60 days following the end of the calendar year in which the
                Participant terminates employment or service from the Company and
                all
                Affiliates, or (B) if determined by the Committee to be consistent
                with
                the “grand-father” rules of Code Section 409A and if directed by the
                Committee for purposes of creating administratively consistency between
                the distribution provisions of Articles VII and VIII, within 60 days
                following the end of the calendar year in which occurs the 6 month
                anniversary of the date on which the Participant terminates employment
                or
                service from the Company and all Affiliates.  For purposes of
                this Plan, a Participant who is Disabled shall be deemed to have
                retired
                or terminated at the conclusion of benefits under all disability
                income
                plans sponsored by a Participating Employer or to which a Participating
                Employer contributes, unless otherwise determined by the
                Committee.

            

    

     

    
      	
              (ii)  

            	
              Distribution
                Period.  Distributions will be made in 1 to
                15  annual installments, as elected by the
                Participant.

            

    

     

    
      	
              (iii)  

            	
              Distribution
                of
                Remaining Account Following Participant’s Death.  In the
                event of the Participant’s death, the Participant’s remaining
                undistributed interest will be distributed to the Participant’s
                Beneficiary in accordance with the distribution election (single
                sum
                payment or installments) elected by the Participant.  If
                the  Participant had elected a single sum, the payment shall be
                made no later than March 1 following the calendar year in which occurs
                the
                Participant’s death.  If the Participant had
                

            

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

       

    

    
      	
                

            	
              elected
                an
                installment distribution, (A) any installments previously commenced
                to the
                Participant shall continue to the Beneficiary and (B) if installment
                distributions had not commenced as of the date of the Participant’s death,
                payments over the installment period elected by the Participant shall
                commence to the Beneficiary no later than March 1 following the calendar
                year in which occurs the Participant’s
                death.

            

    

     

    (b) Effectiveness
      of
      Election.  A distribution election shall be deemed made only
      when it is received and accepted as complete by the Committee, and shall remain
      in effect until modified by the Participant in accordance with Section 7.02
      below or otherwise revoked in accordance with Plan rules.

     

    
      Section
        7.02. 
Modified
        Distribution
        Election.

    

     

    A
      Participant may from time to time modify his or her distribution election by
      filing a revised distribution election, properly completed and signed, with
      the
      Committee.  However, a revised distribution election will be given
      effect only if the Participant remains employed by a Participating Employer
      for
      twelve (12) consecutive months following the date that the revised election
      is
      received and accepted as complete by the Committee.

     

    
      Section
        7.03. 
Calculation
        of Annual
        Distribution Amount.

    

     

    (a) Pre-2001
      Retirees.  For any Participant who retired or terminated
      employment or service prior to January 1, 2001, distribution of the
      Participant’s Account will be calculated and made under the distribution
      provisions of the Plan applicable to the Participant on the date of the
      Participant’s retirement or termination of employment or service.

     

    (b) Post-2000
      Retirees.  For a Participant who retires or terminates
      employment or service after December 31, 2000, the annual distribution amount
      for the Pre-2005 Account, unless the Committee specifies a different or
      alternate method and such different or alternate method does not result in
      the
      imposition of tax under Code Section 409A, shall be calculated as
      follows:

     

    
      	
              (i)  

            	
              The
                annual
                distribution amount for the Participant’s Pre-2005 Account, other than the
                portion of the Pre-2005 Account that is deemed to be invested in
                Stock
                Units (the “Distributable Account”), shall be determined by dividing (A)
                the aggregate balance in the Distributable Account as of January
                1 of the
                year for which the distribution is being made, by (B) the number
                of
                installment payments remaining to be made under the distribution
                period
                selected by the Participant.  Distributions shall be made in
                cash.  The amount of any distribution under this Paragraph (i)
                will be charged pro-rata against the Participant’s interest in each
                

            

    

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

       

    

    
      	
                

            	
              Investment
                Option comprising the Distributable Account.  Notwithstanding
                the foregoing, the last installment payment of the Distributable
                Account
                shall be adjusted to take into account deemed investment gains or
                losses
                for the period between the January 1 valuation date and the date of
                actual payment according to such methods and procedures adopted by
                the
                Committee.

            

    

     

    
      	
              (ii)  

            	
              The
                annual
                distribution amount for the portion of the Participant’s Pre-2005 Account
                that is credited in the form of Stock Units shall be determined on
                a share
                basis by dividing (A) the number of Integrys Stock Units as of January
                1
                of the year for which the distribution is being made (subject to
                subsequent adjustment under Section 9.02), by (B) the number of
                installment payments remaining to be made under the distribution
                period
                selected by the Participant. The Participant will receive shares
                of
                Integrys Stock equal to the annual distribution amount, subject only
                to
                the distribution of cash in lieu of any fractional Integrys Stock
                Unit.  The cash payment for any fractional Integrys Stock Unit
                shall be determined based upon the closing price of a share of Integrys
                Stock on January 21 of the year in which the distribution is being
                made,
                as such share price is reported in the Wall Street Journal’s New York
                Stock Exchange Composite Transactions listing.  If January 21
                falls on a Saturday, Sunday or holiday, the calculation of the cash
                portion of the distribution will be made based upon the closing price
                as
                reported for the immediately preceding business
                day.

            

    

     

    
      Section
        7.04. 
Time
        of
        Distribution.

    

     

    Subject
      to the
      provisions of Sections 9.02 and 10.02, each distribution of Integrys Stock
      made to a Participant (or Beneficiary) shall be distributed on January 22 (or
      if
      January 22 falls on a Saturday, Sunday or holiday, the immediately following
      business day).  For distribution and tax reporting purposes, the value
      of Integrys Stock distributed shall equal the number of shares distributed
      multiplied by the closing price of Integrys Stock on January 21 (or if January
      21 falls on a Saturday, Sunday or holiday, the immediately preceding business
      day) of the year in which the distribution is being made as reported in the
      Wall
      Street Journal’s New York Stock Exchange Composite Transaction
      listing.  The cash portion of any distribution will be made no later
      than March 1 of the year for which the distribution is being made.

     

    
      Section
        7.05. 
Single
        Sum Distribution at
        the Committee’s Option.

    

     

    (a) In
      the case of a
      Participant whose employment with the Company and its Affiliates is
      involuntarily terminated by the Company or an Affiliate, or whose employment
      with 

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

       

    

    the
      Company and its
      Affiliates is mutually terminated in accordance with a separation agreement
      and
      release between the Company or an Affiliate and such Participant, the Committee
      may (but need not) direct that the Participant’s Pre-2005 Account be distributed
      in the form of a single sum payment in lieu of distribution over any installment
      distribution period that would otherwise apply.  If so directed by the
      Committee, the single sum distribution shall be made in cash and/or shares
      of
      Integrys Stock (as determined in accordance with Section 7.03) and shall be
      made
      at the time specified in Section 7.04.

     

    (b) In
      the case of any
      other Participant or Beneficiary whose Pre-2005 Account has a value of $100,000
      or less as of the valuation date that immediately precedes the date on which
      distribution would first be made to the Participant or Beneficiary, the
      Committee may (but need not) direct that the Participant’s Pre-2005 Account be
      distributed in the form of a single sum payment in lieu of any installment
      distribution period that would otherwise apply.  If so directed by the
      Committee, the single sum distribution shall be made in cash and/or shares
      of
      Integrys Stock (as determined in accordance with Section 7.03) and shall be
      made
      at the time specified in Section 7.04.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    ARTICLE
      VIII. 
DISTRIBUTION OF POST-2004 ACCOUNT

     

    
      Section
        8.01. 
Distribution
        Election.

    

     

    (a) Election.  A
      Participant, on or before December 31, 2008 or if later, at the time he or
      she
      commences participation in the Plan, shall make a distribution election with
      respect to his or her Post-2004 Account.  The election shall be in
      such form as the Committee shall prescribe, and shall specify the distribution
      commencement date, the distribution period, and the distribution method
      applicable following the Participant’s death.  Any such election shall
      be consistent with the following rules (or if the  Participant fails
      to make a selection with respect to a particular item, in accordance with the
      default rules set forth below):

     

    
      	
              (i)  

            	
              Distribution
                Commencement Date.  Unless the Participant has selected a
                later commencement date, distribution of a Participant’s Post-2004 Account
                will commence within 60 days following the end of the calendar year
                in
                which occurs the 6 month anniversary of the Participant’s Separation from
                Service.

            

    

     

    
      	
              (ii)  

            	
              Distribution
                Period.  Distributions will be made in 1 to
                15  annual installments, as elected by the
                Participant.  The default is 10 annual installments. For
                purposes of applying the rules of Code Section 409A, a Participant’s
                election of annual installments is treated as an election of a single
                form
                of payment rather than an election of multiple separate
                payments.

            

    

     

    
      	
              (iii)  

            	
              Distribution
                of
                Remaining Account Following Participant’s Death.  In the
                event of the Participant’s death, the Participant’s remaining
                undistributed interest in his or her Post-2004 Account will be distributed
                to the Participant’s Beneficiary in accordance with the distribution
                election (single sum payment or installments) elected by the
                Participant.  If the  Participant had elected a single
                sum, the payment shall be made no later than March 1 following the
                calendar year in which occurs the Participant’s death.  If the
                Participant had elected an installment distribution, (A) any installments
                previously commenced to the Participant shall continue to the Beneficiary
                and (B) if installment distributions had not commenced as of the
                date of
                the Participant’s death, payments over the installment period elected by
                the Participant shall commence to the Beneficiary no later than March
                1
                following the calendar year in which occurs the Participant’s
                death.

            

    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

       

    

    (b) Effectiveness
      of
      Election.  A distribution election shall be deemed made only
      when it is received and accepted as complete by the Committee, and shall remain
      in effect until modified by the Participant in accordance with Section 8.02
      below or otherwise revoked in accordance such circumstances as the Plan is
      permitted (and elects) to accept without resulting in the imposition of tax
      under Code Section 409A.

     

    
      Section
        8.02. 
Modified
        Distribution
        Election.

    

     

    A
      Participant may from time to time modify his or her distribution election with
      respect to his or her Post-2004 Account by filing a revised distribution
      election, properly completed and signed, with the Committee.  However,
      except to the extent permitted under regulations promulgated by the Secretary
      of
      the Treasury under Code Section 409A, a revised distribution election must
      comply with the following rules:

     

    (a) The
      revised
      distribution election may not accelerate the time of payment in violation of
      Code Section 409A.  For example, a  revised distribution
      election may not elect a distribution commencement date earlier than the
      distribution commencement date applicable under the Participant’s prior
      distribution election.   A revised election that does not comply
      with these rules will be null and void, and will be disregarded by the
      Plan.

     

    (b) The
      revised
      distribution election may (i) change the form of payment from a single sum
      payment to installment distributions, (ii) from installment distributions to
      a
      single sum distribution, (iii) from one installment period to a different
      installment period, or (iv) defer the distribution commencement date, and such a
      revised election will be given effect 12 months after the date on which the
      election is made, but only if (i) the revised election is made at least 12
      months prior to the date on which payment would be made or commence in the
      absence of the revised election, and (ii) in the case of any election other
      than
      one related to payment on account of Disability or death, the first payment
      that
      is made pursuant to the revised election is deferred for at least 5 years from
      the date payment would otherwise have been made.  For purposes of Code
      Section 409A, the installment payment option is considered to be a single
      form of payment rather than a series of independent payments.  A
      revised election that does not comply with these rules will be null and void,
      and will be disregarded by the Plan.

     

    
      Section
        8.03. 
Calculation
        of Annual
        Distribution Amount.

    

     

    The
      annual
      distribution amount for the Post-2004 Account shall be calculated as
      follows:

     

    (a) The
      annual
      distribution amount for the Participant’s Post-2004 Account, other than the
      portion of the Post-2004 Account that is deemed to be invested in Stock Units
      (the “Distributable Account”), shall be determined by dividing (A) the aggregate
      balance in the Distributable Account as of January 1 of the year for which
      the
      distribution is being made, by (B) the number of installment payments remaining
      to be made under the distribution period selected by the
      Participant.  Distributions shall be made in cash.  The
      amount of any distribution under this subsection (a) will be charged pro-rata
      against the Participant’s interest in each Investment Option comprising the
      Distributable Account.  Notwithstanding the foregoing, the last
      installment payment of the Distributable Account shall be adjusted to take
      into
      account deemed 

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

       

    

    investment
      gains or
      losses for the period between the January 1 valuation date and the date of
      actual payment according to such methods and procedures adopted by the
      Committee.

     

    (b) The
      annual
      distribution amount for the portion of the Participant’s Post-2004 Account that
      is credited in the form of Stock Units shall be determined on a share basis
      by
      dividing (A) the number of Integrys Stock Units as of January 1 of the year
      for
      which the distribution is being made (subject to subsequent adjustment under
      Section 9.02), by (B) the number of installment payments remaining to be
      made under the distribution period selected by the Participant. The Participant
      will receive shares of Integrys Stock equal to the annual distribution amount,
      subject only to the distribution of cash in lieu of any fractional Integrys
      Stock Unit.  The cash payment for any fractional Integrys Stock Unit
      shall be determined based upon the closing price of a share of Integrys Stock
      on
      January 21 of the year in which the distribution is being made, as such share
      price is reported in the Wall Street Journal’s New York Stock Exchange Composite
      Transactions listing.  If January 21 falls on a Saturday, Sunday or
      holiday, the calculation of the cash portion of the distribution will be made
      based upon the closing price as reported for the immediately preceding business
      day.

     

    
      Section
        8.04. 
Time
        of
        Distribution.

    

     

    Subject
      to the
      provisions of Sections 9.02 and 10.02, each distribution of Integrys Stock
      made to a Participant (or Beneficiary) shall be distributed on January 22 (or
      if
      January 22 falls on a Saturday, Sunday or holiday, the immediately following
      business day).  For distribution and tax reporting purposes, the value
      of Integrys Stock distributed shall equal the number of shares distributed
      multiplied by the closing price of Integrys Resources Stock on January 21 (or
      if
      January 21 falls on a Saturday, Sunday or holiday, the immediately preceding
      business day) of the year in which the distribution is being made as reported
      in
      the Wall Street Journal’s New York Stock Exchange Composite Transaction
      listing.  The cash portion of any distribution will be made no later
      than March 1 of the year for which the distribution is being made.

     

    
      Section
        8.05. 
Automatic
        Single Sum
        Distribution.

    

     

    In
      the case of any Participant or Beneficiary whose Post-2004 Account has a value
      equal to or less than the applicable dollar amount under Code
      Section 402(g)(1)(B), e.g., $15,500 for 2008, the Participant’s Post-2004
      Account will be distributed in the form of a single sum payment on the date
      on
      which distributions would otherwise commence, and such single sum payment shall
      be in lieu of any installment distribution period that would otherwise
      apply.  Unless otherwise directed by the Committee, the single sum
      distribution shall be made in cash and/or shares of Integrys Stock (as
      determined in accordance with Section 8.03).  The foregoing rule
      shall apply only if (1) the payment results in the termination of liquidation
      of
      the Participant’s entire interest in his or her Post-2004 Account and his or her
      entire interest in all other plans, programs or arrangements that are required
      to be aggregated with the Participant’s Post-2004 Account for purposes of Code
      Section 409A, and (2) the payment is not greater than the applicable dollar
      amount under Code Section 402(g)(1)(B).

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

       

    

    
      Section
        8.06. 
Distributions
        For Employment
        Tax Obligations.

    

     

    (a) Notwithstanding
      the
      time or schedule of payments otherwise applicable to the Participant, the
      Committee may direct that distribution from a Participant’s Account be made (i)
      to pay the Federal Insurance Contributions Act (“FICA”) tax imposed under Code
      Sections 3101, 3121(a) and 3121(v)(2) with respect to compensation deferred
      under the Plan, (ii) to pay the income tax at source on wages imposed under
      Code
      Section 3401 or the corresponding withholding provisions of applicable
      state, local, or foreign tax laws as a result of the payment of FICA taxes,
      and
      (iii) to pay the additional income tax at source on wages attributable to the
      “pyramiding” of Code Section 3401 wages and taxes; provided that the total
      amount distributed under this provision must not exceed the aggregate of the
      FICA tax and the income tax withholding related to such FICA tax.  In
      addition or in the alternative, the Committee may direct that all FICA taxes
      owed in connection with any allocation hereunder be withheld from other
      compensation owed to the Participant.

     

    (b) The
      amount actually
      distributed to the Participant in accordance with the time or schedule of
      payments applicable to the Participant will be reduced by applicable tax
      withholding except to the extent such withholding requirements previously were
      satisfied in accordance with subsection (a) above.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      IX.  RULES WITH
      RESPECT TO INTEGRYS STOCK

    AND
      INTEGRYS STOCK UNITS

     

    
      Section
        9.01. 
Shares
        Authorized.

    

     

    (a) Subject
      to
      adjustment as provided in Section 9.02 below, the total number of shares of
      Integrys Stock which may be distributed to Participants or Beneficiaries
      pursuant to the Plan shall be one million four hundred fifty thousand
      (1,450,000).

     

    (b) The
      number of
      available shares shall not be reduced by or as a result of (i) any cash
      distributions pursuant to the Plan or (ii) by distributions of shares of
      Integrys Stock that are attributable to LTIP Deferrals that relate to an award
      that was made under the Omnibus Plan and either has been or will be charged
      against the pool of available shares under the Omnibus Plan, i.e., the plan
      under which the share award was originally granted and the plan from which
      the
      share award would have been paid except for the Participant’s election to defer
      delivery of the shares.

     

    
      Section
        9.02. 
Transactions
        Affecting
        Integrys Stock.

    

     

    In
      the event of any merger, share exchange, reorganization, consolidation,
      recapitalization, stock dividend or stock split involving Integrys Stock, or
      other event in which Integrys Stock is subdivided or combined, or a cash
      dividend the amount of which, on a per share basis, exceeds, fifteen percent
      (15%) of the fair market value of a share of Integrys Stock at the time the
      dividend is declared, or the Company shall effect any other dividend or other
      distribution of Integrys Stock that the Board determines by resolution is
      extraordinary  or special in nature or that is in connection with a
      transaction that the Company characterizes publicly as a recapitalization or
      reorganization of Integrys Stock or words of similar import, or any other event
      shall occur, which, in the judgment of the Committee necessitates an adjustment
      to prevent dilution or enlargement of the benefits or potential benefits
      intended to be made available under this Plan, the Committee shall make
      appropriate equitable adjustments with respect to the Integrys Stock Units
      (if
      any) credited to the Account of each Participant.  The nature of any
      such adjustment shall be determined by the Committee, in its
      discretion.

     

    
      Section
        9.03. 
No
        Shareholder Rights With
        Respect to Integrys Stock Units.

    

     

    Participants
      shall
      have no rights as a stockholder pertaining to Integrys Stock Units credited
      to
      their Accounts.  No Integrys Stock Unit nor any right or interest of a
      Participant under the Plan in any Integrys Stock Unit may be assigned,
      encumbered, or transferred, except by will or the laws of descent and
      distribution.  The rights of a Participant hereunder with respect to
      any Integrys Stock Unit are exercisable during the Participant’s lifetime only
      by the Participant or his or her guardian or legal
      representative.

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

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

     

    
      Section
        10.01. 
Definitions.

    

     

    For
      purposes of
      this Article X, the following terms shall have the following respective
      meanings:

     

    (a) 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 (i) 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, (ii) 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 (iii) 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.

     

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

     

    
      	
              (i)  

            	
              which
                such
                Person or any of such Person’s Affiliates or Associates has the right to
                acquire (whether such right is exercisable immediately or only after
                the
                passage of time) pursuant to any agreement, arrangement, or
                under-standing, or upon the exercise of conversion rights, exchange
                rights, or other rights, warrants or options, or otherwise; provided,
however,
                that a
                Person shall not be deemed the Beneficial Owner of, or to beneficially
                own, (A) securities tendered pursuant to a tender or exchange offer
                made
                by or on behalf of such Person or any of such Person’s Affiliates or
                Associates until such tendered securities are accepted for purchase
                or (B)
                securities issuable upon exercise of Rights 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, as the same may be amended from time to time
                (or
                any successor to such Rights Agreement) at any time before the issuance
                of
                such securities;

            

    

     

    
      	
              (ii)  

            	
              which
                such
                Person or any of such Person’s Affiliates or Associates, directly or
                indirectly, has the right to vote or dispose of or has “beneficial
                ownership” of (as determined pursuant to Rule 13d-3 of the General Rules
                and 

            

    

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

       

    

    
      	
                

            	
              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 (ii) 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

            

    

     

    
      	
              (iii)  

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

            

    

     

    (c) A
“Change
      in
      Control” shall be deemed to have occurred if:

     

    
      	
              (i)  

            	
              any
                Person
                (other than any employee benefit plan of the Company or an Affiliate,
                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;

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

            	
              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;

            

    

     

    
      	
              (iv)  

            	
              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
                

            

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    
      	
                

            	
              holders
                of
                the Company’s Stock immediately prior to the merger have the same
                proportionate ownership of common stock of the surviving corporation
                immediately after the merger;

            

    

     

    
      	
              (v)  

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

            

    

     

    
      	
              (vi)  

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

            

    

     

    (d) “Continuing
      Directors” means (i) any member of the Board of Directors of the Company
      who was a member of such Board on May 18, 2007, (ii) 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
      (iii) additional directors elected by a majority of the Continuing
      Directors then on such Board.

     

    (e) “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 shareholders 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 Section
      10.01(c)(i).

     

    
      Section
        10.02. 
Amendments
        in Connection
        with a Change in Control.

    

     

    (a) Board
      Authority to Amend
      Plan.  Prior to the occurrence of a Change in Control, the
      Board may exercise its authority under Section 11.06 to amend the Plan,
      including, to the extent deemed necessary or desirable by the Board in
      anticipation of a Change in Control, to amend the Plan to eliminate
      Integrys Stock Units and cause the value of such units as of the Amendment
      Date
      (such value to be determined under Section 5.04(e)) to be reallocated to an
      alternate Investment Option that is then available for new investments and
      that
      is most similar to a fixed income fund.  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.

     

    (b) Automatic
      Amendments.  The Plan shall automatically be amended upon a
      Change in Control to provide that:

     

    
      	
              (i)  

            	
              the
                rate of
                interest equivalent to be credited with respect to Reserve Account
                A for
                each month following the Change in Control shall be the greater of
                (A) the
                rate of interest equivalent otherwise applicable with respect to
                Reserve
                

            

    

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    
      	
                

            	
              Account
                A if
                such amount were calculated based upon the consolidated return on
                common
                shareholders equity of the Company (including for this purpose any
                successor corporation that is the survivor of a merger with the Company
                or
                any successor to that corporation) and all
                consolidated  subsidiaries, or (B) a rate equal to two (2)
                percentage points above the prime lending rate at US Bank Milwaukee,
                Milwaukee, Wisconsin (or any successor thereto) as of the last business
                day of that month; and

            

    

     

    
      	
              (ii)  

            	
              the
                rate of
                interest equivalent to be credited with respect to Reserve Account
                B for
                each month following the Change in Control shall be the greater of
                (A) the
                rate of interest equivalent otherwise applicable with respect to
                Reserve
                Account B if such amount were calculated based upon the consolidated
                return on common shareholders equity of the Company (including for
                this
                purpose any successor corporation that is the survivor of a merger
                with
                the Company or any successor to that corporation) and all consolidated
                subsidiaries, or (B) a rate equal to two (2) percentage points above
                the
                prime lending rate at US Bank Milwaukee, Milwaukee, Wisconsin (or
                any
                successor thereto) as of the last business day of that
                month.  The minimum rate of interest equivalent under clause (B)
                shall cease to apply on the third anniversary of the Change in Control
                in
                the event that the Participant is actively employed by the Company
                (including for this purpose any successor corporation or entity that
                is
                the survivor of a merger with the Company), or by any subsidiary
                or
                affiliate of the Company or such successor, on such
                date.

            

    

     

    (c) Prohibition
      on Certain
      Amendments.  Notwithstanding the foregoing, on or after a
      Change in Control, the Board or Company (including for this purpose any
      successor corporation or entity that is the survivor of a merger with the
      Company or to which sponsorship of the Plan is transferred following a Change
      in
      Control, or the board of directors or other managing body of any such entity)
      may not, without the written consent of the affected Participant (or in the
      case
      of a deceased Participant, the Participant’s Beneficiary) amend the Plan or take
      an action to terminate the Plan that would:

     

    
      	
              (i)  

            	
              Result
                in a
                decrease in the number of, or a change in the type of, Investment
                Options
                that were made available under the Plan immediately prior to the
                Change of
                Control; or

            

    

     

    
      	
              (ii)  

            	
              Cause
                the
                Accounts to be valued under Section 6.01(c) less frequently than
                quarterly; or

            

    

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    
      	
              (iii)  

            	
              Impair
                or
                otherwise limit a Participant’s rights to reallocate his or her Accounts
                under Section 6.01(d) as in effect on the date immediately prior
                to the
                Change in Control; or

            

    

     

    
      	
              (iv)  

            	
              Decrease
                the
                interest rate credited under Reserve Account A or Reserve Account
                B as
                determined pursuant to subsection (b) above, except as specifically
                provided therein;

            

    

     

    
      	
              (v)  

            	
              Eliminate
                or
                reduce the distribution options made available under Articles VII
                and VIII
                or otherwise terminate any distribution elections then in effect;
                or

            

    

     

    
      	
              (vi)  

            	
              Modify
                the
                provisions of Sections 10.03 and 10.04 in a manner detrimental or
                potentially detrimental to a Participant (or Beneficiary), except
                and only
                to the extent that modification is necessary to comply with applicable
                law.

            

    

     

    
      Section
        10.03. 
Maximum
        Payment
        Limitation.

    

     

    (a) Limit
      on
      Payments.  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 which the
      Company may pay without loss of deduction under Section 280G(a) of the Code;
      provided that this Section shall not apply in the case of a Participant who
      has
      in effect a valid employment contract providing that the Total Payments to
      the
      Participant shall be determined without regard to the maximum amount allowable
      under Section 280G of the Code.  The terms “excess parachute payment”
and “parachute payment” shall have the meanings assigned to them in Section 280G
      of the Code, and such “parachute payments” shall be valued as provided
      therein.  Present value shall be calculated in accordance with Section
      280G(d)(4) of the Code.  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, 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 acceptable to the Participant in his or her sole
      discretion (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.  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

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    accordance
      with the
      principles of Sections 280G(d)(3) and (4) of the Code, 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 bases 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) Employment
      Contract
      Governs.  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.

     

    
      Section
        10.04. 
Resolution
        of
        Disputes.

    

     

    If,
      after a Change
      in Control, (a) a dispute arises with respect to the enforcement of the
      Participant’s rights under the Plan, or (b) 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 Expense has 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 in advance of the final disposition or conclusion of any
      such dispute or legal proceeding.  In the case of a deceased
      Participant, this Section shall apply with respect to the Participant’s
      Beneficiary or estate.

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    ARTICLE
      XI.  GENERAL
      PROVISIONS

     

    
      Section
        11.01. 
Administration.

    

     

    The
      Committee shall
      administer and interpret the Plan and supervise preparation of Participant
      elections, forms, and any amendments thereto.  To the extent necessary
      to comply with applicable conditions of Rule 16b-3, the Committee shall consist
      of not less than two members of the Board, each of whom is also a director
      of
      the Company and qualifies as a “non-employee director” for purposes of Rule
      16b-3.  If at any time the Committee shall not be in existence or not
      be composed of members of the Board who qualify as “non-employee directors”,
      then all determinations affecting Participants who are subject to Section 16
      of
      the Exchange Act shall be made by the full Board, and all determinations
      affecting other Participants shall be made by the Board or a duly designated
      officer of the Board.  The Committee may, in its discretion, delegate
      any or all of its authority and responsibility; provided that the Committee
      shall not delegate authority and responsibility with respect to non-ministerial
      functions that relate to the participation by Participants who are subject
      to
      Section 16 of the Exchange Act at the time any such delegated authority or
      responsibility is exercised.  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 has the discretionary authority to
      adopt and modify rules and regulations relating to the Plan, interpret and
      construe the Plan and make determinations regarding eligibility and
      benefits,  as it deems necessary or advisable for the administration
      of the Plan; any such action, interpretation, construction or determination
      shall be final and binding on all Participants and Beneficiaries unless
      determined by a court of competent jurisdiction to be arbitrary and
      capricious.  If any delegee of the Committee shall also be a
      Participant or Beneficiary, any determinations affecting the delegee’s
      participation in the Plan shall be made by the Committee.

     

    
      Section
        11.02. 
Restrictions
        to Comply with
        Applicable Law.

    

     

    (a) General
      Restrictions.  Notwithstanding any other provision of the Plan,
      the Company shall have no liability to deliver any shares of Integrys Stock
      under the Plan or make any  payment unless such delivery or payment
      would comply with all applicable laws and the applicable requirements of any
      securities exchange or similar entity.  In addition, transactions
      under the Plan are intended to comply with all applicable conditions of Rule
      16b-3 under the Exchange Act.  The Committee shall administer the Plan
      so that transactions under the Plan will be exempt from Section 16 of the
      Exchange Act, and shall have the right to restrict any transaction, or impose
      other rules and requirements, to the extent it deems necessary or desirable
      for
      such exemption to be met.

     

    (b) Restriction
      on
      Transfer.  Shares of Integrys Stock issued under the Plan may
      not be sold or otherwise disposed of except (i) pursuant to an effective
      registration statement under the Act, or in a transaction which, in the opinion
      of counsel for the Company, is exempt from registration under the Act; and
      (ii)
      in compliance with state securities laws.  Further, as a condition to
      issuance of shares of Integrys Stock under the Plan, the Participant, his or
      her
      Beneficiary or his or her heirs, legatees or legal representatives, as the
      case
      may be, shall, if the 

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

     

    Committee
      deems it
      necessary, execute and deliver to the Company a restrictive stock transfer
      agreement in such form, and subject to such terms and conditions, as shall
      be
      reasonably determined or approved by the Committee, which agreement, among
      other
      things, may impose certain restrictions on the sale or other disposition of
      any
      shares of stock acquired under the Plan. The Committee may waive the foregoing
      restrictions, in whole or in part, in any particular case or cases or may
      terminate such restrictions whenever the Committee determines that such
      restrictions afford no substantial benefit to the Company.

     

    (c) Additional
      Restrictions;
      Legends.  All shares of Integrys Stock delivered under the Plan
      shall be subject to such stock transfer orders and other restrictions as the
      Committee may deem advisable under the Plan and any applicable federal or state
      securities laws, and the Committee may cause a legend or legends to be put
      on
      any certificates to make appropriate references to such
      restrictions.

     

    
      Section
        11.03. 
Claims
        Procedures.

    

     

    (a) If
      a Participant 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 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 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 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 60 days after receiving the claimant’s written appeal;
      provided that the Committee may determine that an additional 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 

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

       

    

    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 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
        11.04. 
Participant
        Rights
        Unsecured.

    

     

    (a) Unsecured
      Claim.  The right of a Participant or the Participant’s
      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 a
      Participating Employer.  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 his or her guardian
      or legal representative.

     

    (b) Contractual
      Obligation.  The Company may authorize the creation of a trust
      or other arrangements to assist it in meeting the obligations created under
      the
      Plan, subject to the restrictions on funding imposed by Code
      Section 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 a Participating
      Employer shall be deemed to be secured by any pledge of, or other encumbrance
      on, any property of a Participating Employer.  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 a
      Participating Employer and any Participant or Beneficiary, or any other
      person.

     

    
      Section
        11.05. 
Income
        Tax
        Withholding.

    

     

    The
      amount actually
      distributed to the Participant will be reduced by applicable income tax
      withholding (if any).  Unless the Participant has made a contrary
      election with the consent of the Committee, income tax on the entire annual
      distribution amount will be withheld from the cash portion of the distribution,
      and Integrys Stock will be used to satisfy withholding 

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    obligations
      only to
      the extent that the cash portion of the distribution is insufficient for this
      purpose.  No later than the date as of which an amount first becomes
      includible in the income of the Participant for employment  tax
      purposes, the Participant shall pay or make arrangements satisfactory to the
      Committee regarding the payment of any such tax.  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 reduced to reflect the amount needed to pay the
      Participant’s portion of such tax.

     

    
      Section
        11.06. 
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 10.02 on or after a Change in Control, the
      Board (or where specified herein, the Committee) may at any time amend the
      Plan,
      including but not limited to modifying the terms and conditions applicable
      to
      (or otherwise eliminating) deferrals or contribution credits to be made on
      or
      after the amendment date; provided, however, that no amendment or termination
      may reduce or eliminate any Account balance accrued to the date of such
      amendment or termination (except as such Account balance may be reduced as
      a
      result of investment losses allocable to such Account).  Further, the
      Corporation’s Chief Human Resources Officer (or any successor to such position)
      is authorized to amend the Plan to the extent that such amendment is determined
      to be necessary or desirable in order to comply or facilitate compliance with
      the requirements of Code Section 409A or other applicable law; or that is
      otherwise desirable to promote efficient Plan administration; provided that
      any
      such amendment shall not increase Plan benefits or result in non-ministerial
      action that is prohibited under Section 11.01.

     

    (c) The
      Board may
      terminate the Plan (or the Plan shall automatically terminate) in accordance
      with the following provisions.  Upon termination of the Plan, Accounts
      may be paid to Participants and Beneficiaries, but only if the following are
      met:

     

    
      	
              (i)  

            	
              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 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.

            

    

     

    
      	
              (ii)  

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

            

    

     

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              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.

            

    

     

    
      	
              (iii)  

            	
              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 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.

            

    

     

    
      	
              (iv)  

            	
              Except
                as
                provided in Paragraphs (i), (ii) and (iii) above or as otherwise
                permitted
                in regulations promulgated by the 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 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.

            

    

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

     

    
      Section
        11.07. 
Administrative
        Expenses.

    

     

    Costs
      of
      establishing and administering the Plan will be paid by the Participating
      Employers.

     

    
      Section
        11.08. 
Effect
        on Other Employee
        Benefit Plans.

    

     

    Deferrals
      credited
      to a Participant’s Account under this Plan shall not be considered
“compensation” for the purpose of computing benefits under any qualified
      retirement plan maintained by a Participating Employer, but shall be considered
      compensation for welfare benefit plans, such as life and disability insurance
      programs sponsored by a Participating Employer, unless otherwise provided by
      the
      terms of such plan.

     

    
      Section
        11.09. 
Successors
        and
        Assigns.

    

     

    This
      Plan shall be
      binding upon and inure to the benefit of the Participating Employers, their
      successors and assigns and the Participants and their heirs, executors,
      administrators, and legal representatives.

     

    
      Section
        11.10. 
Right
        of
        Offset.

    

     

    The
      Company shall
      have the right to offset from the benefits payable hereunder any amount that
      the
      Participant owes to the Company or Affiliate or other entity in which the
      Company or an Affiliate maintains an ownership interest.  The Company
      may effectuate the offset without the consent of the Participant (or the
      Participant’s spouse or Beneficiary, in the event of the Participant’s
      death).

     

    
      Section
        11.11.Amounts
        Accumulated Under
        Peoples Energy Corporation Plans.

    

     

    Notwithstanding
      anything in the Plan to the contrary, the following rules apply with respect
      to
      accounts originally established under the Peoples Energy Corporation Executive
      Deferred Compensation Plan, the Peoples Energy Corporation Directors Deferred
      Compensation Plan and/or the Peoples Energy Corporation Directors Stock and
      Option Plan (collectively, the “Peoples Plans”) and transferred to this
      Plan:

     

    (a) Amounts
      held under
      the Peoples Plans as Integrys Stock Units and transferred to this Plan will
      continue to be held as Integrys Stock Units.  The transferred Integrys
      Stock Units will be Locked Stock Units.

     

    (b) “Cash
      accounts”
transferred from the Peoples Plans shall continue to be credited with interest
      equivalent based on the rate specified in the Peoples Plan (the “Prime Rate
      Investment”), unless the Participant is offered the opportunity and elects to
      transfer such portion of the Participant’s Account to another Investment Option
      in accordance with Section 6.01(d).  If 

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    a
      Participant
      elects to transfer to an alternate Investment Option, the transferred amounts
      may not be subsequently transferred back to the Prime Rate
      Investment.

     

    (c)   Distribution
      of the portion of the Participant’s overall Account that is attributable to
      participation in the Peoples Plans will be made in accordance with the terms
      of
      the applicable Peoples Plan (and if applicable, the Participant’s distribution
      election); provided that, in accordance with Internal Revenue Service transition
      rules under Code Section 409A, on before December 31, 2008, a Participant may
      elect to have the portion of the benefit that was accrued and vested after
      December 31, 2004 distributed in accordance with the Participant’s distribution
      election under Article VIII of this Plan (Distribution of Post-2004
      Account).  An election in accordance with the Internal Revenue Service
      transition rules shall not operate to accelerate into the year in which the
      election is made amounts that would otherwise be distributed in a subsequent
      year, or to defer distribution of amounts that would otherwise be paid in the
      year in which the election is made into a subsequent year.

     

    (d) The
      shares of stock
      authorized for issuance under the predecessor Peoples Plans are not available
      for new grants under this Plan.  However, grants previously made under
      the Peoples Plan and now held under this Plan will be charged against the pool
      of available shares for the predecessor Peoples Plans.

     

    
      Section
        11.12. 
Miscellaneous
        Distribution
        Rules.

    

     

    (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.

     

    
      
        
        

      

      
        46

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]