UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

December 3, 2015


Commission
 
Registrant; State of Incorporation
 
IRS Employer
File Number
 
Address; and Telephone Number
 
Identification No.
001-09057
 
WEC ENERGY GROUP, INC.
 
39-1391525
 
 
(A Wisconsin Corporation)
 
 
 
 
231 West Michigan Street
 
 
 
 
P.O. Box 1331
 
 
 
 
Milwaukee, WI 53201
 
 
 

414-221-2345
 
 


The name and address of the registrant have not changed since the last report.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Performance Measures for Annual Incentive Compensation

On December 3, 2015, pursuant to the terms of the Short-Term Performance Plan of Wisconsin Energy Corporation, amended and restated effective as of January 1, 2010 (the "STPP"), the Compensation Committee of WEC Energy Group, Inc.’s Board of Directors (the "Compensation Committee") established overall performance goals for the upcoming 2016 plan year. For WEC Energy officers, the 2016 annual incentive under the STPP will be primarily dependent upon financial achievement determined by WEC Energy’s performance against targets for earnings from continuing operations (75% weight) and cash flow (25% weight). Awards can be increased or decreased by up to 10% based upon performance in the operational areas of customer satisfaction (5%), safety (2.5%) and supplier and workforce diversity (2.5%) for the entire family of WEC Energy companies.

For those officers whose positions primarily relate to utility operations in Wisconsin, the 2016 annual incentive under the STPP will be primarily dependent upon financial achievement determined by WEC Energy’s performance against targets for earnings from continuing operations (25% weight) and cash flow (25% weight), as well as against targets for the aggregate net income of WEC Energy’s Wisconsin utility operations (50% weight). Awards for these officers can be increased or decreased by up to 10% based upon performance in the operational areas of customer satisfaction (5%), safety (2.5%) and supplier diversity (1.25%) for WEC Energy’s Wisconsin utility operations, as well as workforce diversity (1.25%) for the entire family of WEC Energy companies.

For those officers whose positions primarily relate to utility operations in Illinois, the 2016 annual incentive under the STPP will be primarily dependent upon financial achievement determined by WEC Energy’s performance against targets for earnings from continuing operations (25% weight) and cash flow (25% weight), as well as against targets for the aggregate net income of WEC Energy’s Illinois utility operations (50% weight). Awards for these officers can be increased or decreased by up to 10% based upon performance in the operational areas of customer satisfaction (5%), safety (2.5%) and supplier diversity (1.25%) for WEC Energy’s Illinois utility operations, as well as workforce diversity (1.25%) for the entire family of WEC Energy companies.

All of the actual performance targets will be established in the near future.

Performance Measures for Short-Term Dividend Equivalents

Under the STPP, certain officers and employees are eligible to receive short-term dividend equivalents in an amount equal to the number of performance units awarded under the Wisconsin Energy Corporation Performance Unit Plan, amended and restated effective as of January 1, 2015, at the target 100% rate held by each such officer and employee on the dividend declaration date multiplied by the amount of cash dividends paid by WEC Energy on a share of its common stock on such date. The short-term dividend equivalents vest at the end of each year if WEC Energy achieves the performance target or targets for that year established by the Compensation Committee. The Compensation Committee determined that, for 2016, the short-term dividend equivalents awarded under the STPP related to performance units awarded in 2014 and 2015 will vest at the end of 2016 if WEC Energy achieves the performance target for earnings from continuing operations, which will be established in the near future.




Amendment of the Performance Unit Plan

On December 3, 2015, the Compensation Committee amended and restated the Wisconsin Energy Corporation Performance Unit Plan effective January 1, 2016, to provide for short-term dividend equivalents. The Compensation Committee also adopted several administrative amendments, including changing the plan’s name to the WEC Energy Group Performance Unit Plan to reflect the company’s new name.

A performance unit granted under this plan entitles the grantee to receive a cash payment based upon WEC Energy's total stockholder return (stock price appreciation plus dividends) over a three-year performance period as compared to the total stockholder return of a custom peer group of companies. Performance units may vest in an amount between 0% and 175% of the target award. Pursuant to the amendments to the performance unit plan, beginning with the 2016 awards, WEC Energy will increase the number of unvested performance units as of any date that it declares a cash dividend on its common stock by the amount of the short-term dividend equivalents. Short-term dividend equivalents are calculated by multiplying (a) the number of unvested performance units held by a plan participant as of the related dividend declaration date by (b) the number of shares of WEC Energy common stock that represent an amount equal to the cash dividend paid on a share of common stock. In effect, short-term dividend equivalents will be credited and accumulated as reinvested dividends on each performance unit so that the performance units and accumulated dividends will be paid out at the end of the three year performance period, rather than paying out the dividend equivalents annually on unearned performance units.

Short-term dividend equivalents will be treated as additional unvested performance units and will be subject to the same vesting, forfeiture, payment, termination and other terms and conditions as the original performance units to which they relate. In addition, outstanding short-term dividend equivalents will be treated as unvested performance units for purposes of calculating future short-term dividend equivalents.

Amendment of the Short-Term Performance Plan

In light of the amendments to the performance unit plan, on December 3, 2015, the Compensation Committee amended and restated the Wisconsin Energy Corporation Short-Term Performance Plan effective as of January 1, 2016, to eliminate short-term dividend equivalents on future awards of performance units under WEC Energy’s performance unit plan. The Compensation Committee also adopted several administrative amendments, including changing the plan’s name to the WEC Energy Group Short-Term Performance Plan to reflect the company’s new name.



I TEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

10 Material Contracts

10.1
WEC Energy Group Performance Unit Plan, amended and restated effective as of January 1, 2016.

10.2
WEC Energy Group Short-Term Performance Plan, as amended and restated effective as of January 1, 2016.





SIGNATURES
 
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
WEC ENERGY GROUP, INC.
 
  (Registrant)
 
 
 
/s/ William J. Guc
Date: December 9, 2015
William J. Guc – Vice President and Controller




Exhibit 10.1
WEC ENERGY GROUP

PERFORMANCE UNIT PLAN
(amended and restated effective as of January 1, 2016)


1.
Purpose. The Plan was established effective January 1, 2005 and is known as the "WEC Energy Group Performance Unit Plan" (the "Plan"). Prior to January 1, 2016, the Plan was known as the Wisconsin Energy Corporation Performance Unit Plan. The purposes of the Plan are to enhance the long‑term stockholder value of WEC Energy Group, Inc. (the "Company") by reinforcing the incentives of key executives to achieve long‑term performance goals of the Company; to link a significant portion of executives' compensation to total shareholder return; to attract and motivate executives and to encourage their continued employment on a competitive basis. The purposes of the Plan are to be achieved by the grant of Performance Units.
 
Capitalized terms used in the Plan shall have the meanings set forth in Section 2 of this Plan, unless the context clearly indicates otherwise. The Plan was amended and restated effective as of October 11, 2007 and again as of January 1, 2010. The Plan was further amended and restated effective as of January 1, 2015 to reflect modifications relating to adjustments to the percentile rank, vesting upon change in control, and other administrative changes. Effective January 1, 2016, the Plan is amended and restated to reflect the change in the name of the Company and the crediting of short-term dividend equivalents.
 
2.
Definitions. For Plan purposes, except where the context clearly indicates otherwise, the following terms shall have the meanings set forth below:

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

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

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

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

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

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




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

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

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

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

(f)
" Company " shall mean WEC Energy Group, a Wisconsin corporation, and any successor to all or substantially all of the Company's assets or business. Prior to June 29, 2015, the Company was known as Wisconsin Energy Corporation.

(g)
" Company Stock " shall mean WEC Energy Group, Inc. Common Stock. Prior to June 29, 2015, Company Stock was Wisconsin Energy Corporation Common Stock.

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

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

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

(k)
" Fair Market Value " shall mean:

(i)
for purposes of determining the amount payable pursuant to paragraph 5(c), the closing price for a share of Company Stock on the last day in the performance period on which the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is open for active trading; and

(ii)
for purposes of determining the amount payable pursuant to paragraphs 5(d) and (e), the closing price for a share of Company Stock on the date the Performance Units become vested pursuant to such paragraph. If the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is not open for active trading on such date, then the nearest date before such date on which the New York Stock Exchange (or such other exchange or over the counter on which Company Stock is listed) is open shall be used.

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


2

(m)
" Performance Units " shall have the meaning set forth in Section 5(a) of the Plan.

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

(o)
" Plan " shall mean the WEC Energy Group Performance Unit Plan including any amendments adopted hereto. Prior to January 1, 2016, the Plan was known as the Wisconsin Energy Corporation Performance Unit Plan.

(p)
" Retirement " shall mean separation from the service of the Company or a subsidiary at or after age 60.

(q)
" Short-Term Dividend Equivalents " shall have the meaning set forth in Section 5(b) of the Plan.

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

(s)
" Unvested Performance Units " shall mean the number of Performance Units granted to a Participant at the Target 100% rate, plus any Short-Term Dividend Equivalents attributable to such Performance Units.

3.
Administration. The Plan shall be administered by the Compensation Committee of the Company's Board of Directors. Subject to the provisions of the Plan, the Committee shall have full and final authority to:

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

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

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

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

(e)
interpret the provisions of the Plan.

All decisions of the Committee shall be final and binding upon all parties including the Company, its stockholders and Employees.

4.
Eligibility and Participation. Key employees of the Company and/or its subsidiaries are designated for participation in the Plan by the Committee. The Committee shall also designate the number of Performance Units to be granted to the Employee at the Target 100% rate.

5.
Performance Units.

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

(b)
Short-Term Dividend Equivalents. Effective for Performance Units awarded on or after January 1, 2016, the Company will increase the number of Unvested Performance Units as of any date that the Company declares a cash dividend on its shares of Common Stock by the amount of the "Short-Term Dividend Equivalents." Short-Term Dividend Equivalents shall be calculated by multiplying:

(i)
the number of Unvested Performance Units held by the Participant as of the related dividend declaration date; times

3


(ii)
the number of shares that represent an amount equal to the cash dividend paid by the Company on a share of Common Stock.

Short-Term Dividend Equivalents shall be treated as additional Unvested Performance Units and shall be subject to the same vesting, forfeiture, payment, termination and other terms, conditions and restrictions as the original Performance Units to which they relate. Short-Term Dividend Equivalents shall also be treated as Unvested Performance Units for purposes of calculating future Short-Term Dividend Equivalents. Short-Term Dividend Equivalents shall not be granted with respect to any Performance Units which, as of the declaration date, have either been paid or terminated.

(c)
Regular Vesting Of Performance Units. The Performance Units are subject to forfeiture until they vest. Except as otherwise provided in paragraph (d) or (e) below, the vesting percentage of an Employee's Unvested Performance Units shall be based upon the Company's rank in Total Shareholder Return over the three‑year performance period, relative to selected benchmark electric utilities with similar long‑term strategies. The regular vesting schedule for the Unvested Performance Units is as set forth in the following schedule:
Percentile Rank
 
Vesting %
<25 th  Percentile
 
0%
25 th  Percentile
 
25%
Target (50th Percentile)
 
100%
75 th  Percentile
 
125%
90 th  Percentile or above
 
175%

The calculation of the Employee's vesting percentage shall be subject to the following rules:

(i)
The Committee shall select the benchmark electric utilities at the beginning of the three‑year performance period.

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

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

(d)
Special Vesting Of Performance Units. Unvested Performance Units shall become immediately vested upon the occurrence of any of the following events (the "Special Vesting Events"):

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

(ii)
the occurrence of a Change in Control of the Company while the Employee is employed by the Company or a subsidiary, provided, however, that effective for Performance Units awarded on or after January 1, 2015, Unvested Performance Units shall not become immediately vested unless, following a Change in Control, the Employee's employment with the Company, or any successor thereto, is terminated by the Company without Cause or by the Employee for Good Reason, in each case prior to completion of the three-year performance period.

(e)
Prorated Vesting upon Retirement . A prorated number of the Unvested Performance Units shall become vested upon the termination of the Employee's employment with the Company or a subsidiary by reason of Retirement prior to the end of the three‑year performance period. The number of Unvested Performance Units becoming vested shall be determined by multiplying the number of Unvested Performance Units by a fraction, with the numerator of the fraction being the number of completed calendar months between Employee's Retirement date and the beginning of the performance period and the denominator being thirty‑six (36). Therefore, if Employee retires on September 15 of the second year in the three‑year performance period, the number of Unvested Performance Units becoming vested as a result of Employee's Retirement shall be equal to the number of Unvested Performance Units times 20/36.

4


(f)
Forfeiture of Performance Units . Except as provided in paragraphs (d) and (e) above, any Unvested Performance Units are immediately forfeited upon the Employee's cessation of employment with the Company or a subsidiary prior to the completion of the three-year performance period.

(g)
Settlement Of Performance Units. As soon as practicable after the Performance Units become vested pursuant to paragraph  (c), (d) or (e) above, the Company shall pay to the Employee an amount in cash determined by multiplying (i) the number of Performance Units which have become vested (after application of the vesting schedules in paragraph (c), (d) or (e) above), by (ii) the Fair Market Value of the Company Stock. For this purpose, the Fair Market Value of the Company Stock shall be determined as of the date the Performance Units become vested. In no event shall payment be made later than March 15 of the taxable year following the taxable year in which such Performance Units vest pursuant to paragraph (c), (d) or (e) above.

6.
Shareholder Rights; Voting. An Employee shall not, by reason of any Performance Units granted hereunder, have any rights of a shareholder of the Company and shall have no voting rights with respect to any Performance Units.

7.
Non‑transferability. No right or interest of any Participant in the Plan shall be assignable or transferable, or subject to any lien, directly, by operation of law, or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge, and bankruptcy.

8.
Beneficiary Designation. Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant dies before receiving any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company and will be effective only when submitted to the Company during the Participant's lifetime. To the extent authorized by the Committee, the designation may be made electronically or set forth in some other media or format. In the absence of any such designation, or if the beneficiary predeceases the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's surviving spouse, if none, to the Participant's descendants by right of representation or, if none, to the Participant's next of kin determined pursuant to the laws of the state in which the Company's principal place of business is located as if the Participant had died unmarried and intestate. In the event of a Participant's divorce, any designation of the Participant's former spouse as a beneficiary shall be void unless after the divorce the Participant completes a new designation naming such former spouse as a beneficiary.

9.
Adjustments. Notwithstanding any other provision herein, in the event of any merger, reorganization, consolidation, recapitalization, liquidation, stock dividend, split‑up, share combination, or other change in the corporate structure of the Company affecting the Company Stock, such adjustment shall be made in the number of Performance Units granted to Employees as may be determined by the Committee, in its sole discretion, to be appropriate and equitable to prevent dilution or enlargement of rights.

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

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

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

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


5

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

15.
Code Section 409A .

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

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


6


Exhibit 10.2
WEC ENERGY GROUP

SHORT‑TERM PERFORMANCE PLAN
As Amended and Restated Effective as of January 1, 2016


WEC ENERGY GROUP
SHORT‑TERM PERFORMANCE PLAN


The Plan was established effective January 1, 1992 and is known as the "WEC Energy Group Short‑Term Performance Plan" (the "Plan"). Prior to January 1, 2016, the Plan was known as the Wisconsin Energy Corporation Short‑Term Performance Plan. The Plan was amended and restated effective as of August 15, 2000. The Plan was further amended and restated effective as of January 1, 2005 to (1) preserve certain pension make‑whole benefits derived from compensation paid and credited before January 1, 2005 provided the benefits were otherwise vested as of December 31, 2004 and therefore exempt from section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and (2) specify payment of Plan awards pursuant to the short‑term deferral rules of Treasury Regulation section 1.409A‑1(b)(4). The Plan was further amended and restated effective as of January 1, 2010 to provide for the accrual and payment of short‑term dividend equivalents pursuant to section 6. Effective January 1, 2016, the Plan is again amended and restated to reflect a change in the name of the Company, to remove short-term dividend equivalents and to reflect administrative changes.
1.
Purpose and Objectives

The purpose of this Plan is to provide an annual incentive compensation plan which permits the awarding of annual cash bonuses to eligible employees of WEC Energy Group, Inc. (the "Company") (Prior to June 29, 2015, the Company was known as Wisconsin Energy Corporation) and/or its subsidiaries, based on the achievement of pre‑established performance goals which promote the achievement of shareholder, customer and employee‑focused objectives while recognizing individual performance.

2.
Eligibility
(a)
Definition of a "Participant"

The term "Participant" as used in this Plan refers to any key employee of the Company and/or its subsidiaries who is designated for participation in the Plan annually by the Chief Executive Officer of the Company, the Company's Board of Directors (the "Board") or the Compensation Committee of the Board (the "Committee"). Employees designated as Participants of the Plan shall be so notified in writing, and shall be apprised of the performance goals and related target awards for the relevant Plan Year. For purposes of the Plan, the "Plan Year" is the calendar year.

(b)
Partial Plan Year Participation
Generally, Participants will be in the active employ of the Company prior to the first day of any Plan Year, but an individual who becomes employed after that date may be designated as a Participant.

In that event, such Participant's final award shall be prorated based upon the number of full calendar months of eligibility during such Plan Year. The Chief Executive Officer, the Board or the Committee shall have full discretion to determine the proper calculation for such proration, or adjust the target and/or performance awards.


33055013v2


3.
Award Determination

(a)
Target Award Level

Prior to the beginning of each Plan Year or as soon as practicable thereafter, the Chief Executive Officer, the Board or the Committee shall approve a target award for each Participant. The established target award shall vary in relation to the Participant's responsibilities and influence on achievement of short‑term goals. In the event a Participant's responsibilities change during a Plan Year, the Participant's target award may be adjusted to reflect the level of responsibility at the end of the Plan Year.

(b)
Performance Goals

Prior to the beginning of each Plan Year, or as soon as practicable thereafter, performance goals for that Plan Year shall be established with the approval of the Chief Executive Officer, the Board or the Committee. The goals may be based on any combination of corporate, subsidiary, divisional, and/or individual goals. More than one performance goal may be established, and multiple goals may have the same or different weightings. Various achievement levels of performance for each performance goal may be established.

The Chief Executive Officer, the Board or the Committee may also establish one or more Company‑wide performance goals which must be achieved for any Participant to receive an award for that Plan Year.

(c)
Adjustment of Performance Goals

The Chief Executive Officer, the Board or the Committee may make an adjustment to the performance goals and the target awards (either up or down) during a Plan Year if they determine that external changes or other unanticipated business conditions have materially affected the fairness of the goals and have unduly influenced the Company's ability to meet them. Further, in the event of a Plan Year of less than 12 months, the Chief Executive Officer, the Board or the Committee may make an adjustment to the performance goals and the target awards accordingly, at their discretion.

(d)
Final Award Determinations

At the end of each Plan Year, final awards shall be computed for each Participant as approved by the Chief Executive Officer, the Committee or the Board. Final award amounts may vary above or below the target awards, based on achievement of the pre‑established corporate, subsidiary, divisional, and/or individual performance goals.

(e)
Award Cap

The Chief Executive Officer, the Committee or the Board may establish guidelines governing the maximum final awards that may be earned by Participants (either in the aggregate, by employee groups established for this purpose, or among individual Participants) in each Plan Year. The guidelines may be expressed as a percentage of Company‑wide goals or financial measures, or such other measures.

(f)
Pro Rata Target Award Upon a Change in Control

Notwithstanding any other provision of this Plan, upon the occurrence of a "change in control" of the Company as defined in the Company's Omnibus Stock Incentive Plan, and as amended from time to time (which definition is hereby incorporated by reference), each Participant in the employ of the Company or a subsidiary on the effective date of such change in control shall become entitled to the target award established for such Participant for the Plan Year in which the change in control occurs, but only to the extent that such Participant is not already entitled to a special bonus payout under the provisions of any other agreement. Such target award shall be prorated based on the number of full calendar months of service completed by such Participant during such Plan Year prior to the occurrence of such change in control.


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4.
Payment of Final Awards

(a)
Form and Timing of Payments

Final award payments shall be paid no later than March 15 of the Plan Year following the Plan Year in which the award was earned.

(b)
Awards Under Benefit A ‑ Preservation of Frozen Legacy Pension Make‑Whole Benefit

The Company provides a pension make‑whole benefit for Participants who are not, nor at any time become, eligible for SERP Benefit A under the WEC Energy Group Supplemental Pension Plan (previously, the Wisconsin Energy Corporation Supplemental Pension Plan) (the "SPP"). The provisions below as well as the provisions of the 2003 Mezzanine Incentive Plan for WE Power, LLC (the "MEZ Plan") and the Legacy Wisconsin Energy Corporation Executive Deferred Compensation Plan (the "Legacy EDCP") collectively provide for a pension make‑whole benefit with respect to certain historical awards hereunder ("Benefit A" awards), MEZ Plan awards and Legacy EDCP base salary deferrals, each of which are excluded from compensation under the RAP.

The portion of the "pension make‑whole benefit" described in this section 4(b) shall be provided only in relation to those Benefit A awards earned, vested and paid before January 1, 2005 (the "Legacy Pension Make‑Whole Benefit"). The Legacy Pension Make‑Whole Benefit is not subject to Code section 409A. Benefit A awards earned and vested on or after January 1, 2005 and the Benefit A award earned in 2004, but paid in 2005 shall not be eligible for a pension make‑whole benefit hereunder; rather, such awards shall be taken into consideration in determining any pension make‑whole benefits payable pursuant to the terms of the SPP. The provisions below describe only the preserved Legacy Pension Make‑Whole Benefit.

(i)
Benefit Description . The Legacy Pension Make‑Whole Benefit takes into account compensation attributable to the Benefit A awards hereunder, which are excluded from calculating a Participant's retirement income under the WEC Energy Group Retirement Account Plan (previously, the Wisconsin Energy Corporation Retirement Account Plan) ("RAP"). The benefit provided is the pension benefit that would have accrued to the Participant's credit under the RAP, taking the Benefit A awards into account calculated without regard to any limitations imposed by the Code on benefits or compensation, less the pension benefit that actually accrued to the Participant's credit under the RAP. The terms and conditions of the RAP shall provide the governing principles as to the calculation and payment of the additional pension benefit determined hereunder.

(ii)
Vesting . Any Legacy Pension Make‑Whole Benefit is immediately vested. Notwithstanding the foregoing, if a Participant becomes eligible for and vests in SERP Benefit A, the Participant will receive SERP Benefit A in lieu of the pension make‑whole benefit.

(iii)
Time and Form of Payment . The terms and provisions of the pension make‑whole benefit set forth in the Legacy EDCP shall govern the time and form of any Legacy Pension Make‑Whole Benefit.

(c)
Unsecured Interest

No Participant or any other party claiming an interest in amounts earned under the Plan shall have any interest whatsoever in any specific asset of the Company. To the extent that any party acquires a right to receive payments under the Plan, such right shall be equivalent to that of an unsecured general creditor of the Company.


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5.
Termination of Employment

(a)
Termination of Employment Due to Death, Disability or Retirement

In the event a Participant's employment is terminated by reason of death, "Disability," or "Retirement," the final award determined in accordance with section 3(d), shall be reduced to reflect participation prior to termination only. For purposes of this Plan, "Retirement" shall have occurred if the Participant terminates service either on or after age 55 with at least 10 years of service, or at or after age 65, and "Disability" shall have the same meaning as in the Company's long‑term disability plan. The reduced award shall be determined by multiplying said final award by a fraction, the numerator of which is the number of full months of employment in the Plan Year and the denominator of which is 12. In the case of a Participant's Disability, the employment termination shall be deemed to have occurred on the date the Chief Executive Officer, the Board or the Committee determines the definition of Disability to have been satisfied.

The final award thus determined shall be paid at the time described in section 4(a).

(b)
Termination of Employment for Other Reasons

In the event a Participant's employment is terminated for any reason other than death, Disability, or Retirement, all of the Participant's rights to a final award for the Plan Year then in progress shall be forfeited. However, except in the event of an employment termination for "Cause," the Chief Executive Officer, the Board or the Committee may waive such provisions and allow payment of a prorated award for the portion of that Plan Year that the Participant was employed by the Company. In such circumstance, the Chief Executive Officer, Board or Committee, as the case may be, shall determine, in its sole discretion, the amount of such prorated award. In the event a prorated award is payable pursuant to this section 5(b), payment shall be made no later than March 15 of the Plan Year following the Plan Year in which the award was earned. The Chief Executive Officer, the Board or the Committee, as the case may be, each shall have the authority to determine whether a Participant has terminated employment for purposes of this subsection.

Cause shall be defined as:

(i)
the willful and continued failure of the Participant to substantially perform the Participant's duties (other than failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Participant by the Board, the Committee or an elected officer of the Company which specifically identifies the manner in which the Board, the Committee or the elected officer believes that the Participant has not substantially performed the Participant's duties, or

(ii)
the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. However, no act, or failure to act, on the Participant's part shall be considered "willful" unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant's action or omission was in the best interest of the Company.

6.
Short‑Term Dividend Equivalents

This section 6 does not apply to Performance Units awarded on or after January 1, 2016.

(a)
Eligibility for Short‑Term Dividend Equivalents

A Participant who has also been awarded Performance Units under the WEC Energy Group Performance Unit Plan (previously, the Wisconsin Energy Corporation Performance Unit Plan) (the "PUP") shall be eligible to receive Short‑Term Dividend Equivalents under this Plan with respect to Performance Units awarded on and after January 1, 2010 and prior to January 1, 2016, as further described in this section. For each Plan Year that the Company declares a cash dividend on Company common stock and on behalf of each such Participant, the Company shall calculate an amount by multiplying (i) the then outstanding Performance Units at the Target 100% rate for such Performance Units on each dividend declaration date, times (ii) the amount of the cash dividend paid by the Company on a share of Company common stock on such date ("Short‑Term Dividend Equivalents"). No interest or other earnings shall accrue on Short‑Term Dividend Equivalents.


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(b)
Vesting

Short‑Term Dividend Equivalents calculated for a Plan Year shall only be payable upon the attainment of performance goals established prior to the beginning of each Plan Year (or as soon as practicable thereafter) with the approval of the Chief Executive Officer, the Board or the Committee. The goals established pursuant to this section 6(b) may be the same as, or different than, those established in relation to the target award and may be adjusted pursuant to the terms of section 3(c). If the performance goals are met, then the Participant will have a vested right to the Short‑Term Dividend Equivalents. Vested Short‑Term Dividend Equivalents are payable with respect to any outstanding Performance Units for the applicable Plan Year, irrespective of the vesting and payment conditions of the Performance Units as determined under the PUP.

(c)
Payment of Short‑Term Dividend Equivalents

Vested Short‑Term Dividend Equivalents shall be paid to the Participant in a cash lump sum no later than March 15 of the Plan Year following the Plan Year in which the Short‑Term Dividend Equivalents vest. If the performance goals are met, the amount payable to the Participant shall be the value of the vested Short‑Term Dividend Equivalents accumulated on the Participant's behalf through the last day of the Plan Year.

(d)
Termination of Employment

(i)
Termination of Employment Due to Death, Disability or Retirement

In the event a Participant's employment is terminated by reason of death, "Disability," or "Retirement," (as such terms are defined in section 5(a), upon the attainment of performance goals as described in section 6(b), such Participant shall be entitled to receive those Dividend Equivalents accrued through the Participant's employment termination date. Section 6(c) shall govern the payment of any such Short‑Term Dividend Equivalents. All of the Participant's rights to Short‑Term Dividend Equivalents accrued after the Participant's employment termination date shall be forfeited.

(ii)
Termination of Employment for Other Reasons

In the event a Participant's employment is terminated for any reason other than death, "Disability," or "Retirement" (as such terms are defined in section 5(a), all of the Participant's rights to Short‑Term Dividend Equivalents for the Plan Year then in progress shall be forfeited. However, except in the event of an employment termination for "Cause" (as defined in section 5(b)(i) the Chief Executive Officer, the Board or the Committee may waive such provisions and allow the Participant to remain entitled to those Short‑Term Dividend Equivalents accrued while employed by the Company. In such case, sections 6(b) and 6(c) shall govern the vesting and payment of any Short‑Term Dividend Equivalents accrued prior to the Participant's employment termination date. The Chief Executive Officer, the Board or the Committee, as the case may be, each shall have the authority to determine whether a Participant has terminated employment for purposes of this subsection.

7.
Rights of Participants

(a)
Employment

Nothing in the Plan shall interfere with or limit in any way the right of the Company or employing subsidiary to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or any subsidiary.

(b)
Nontransferability

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


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8.
Beneficiary Designation

Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant dies before receiving any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company and will be effective only when submitted to the Company during the Participant's lifetime. To the extent authorized by the Committee, the designation may be made electronically or set forth in some other media or format. In the absence of any such designation, or if the beneficiary predeceases the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's surviving spouse, if none, to the Participant's descendants by right of representation or, if none, to the Participant's next of kin determined pursuant to the laws of the state in which the Company's principal place of business is located as if the Participant had died unmarried and intestate. In the event of a Participant's divorce, any designation of the Participant's former spouse as a beneficiary shall be void unless after the divorce the Participant completes a new designation naming such former spouse as a beneficiary.

9.
Amendments

The Board or the Committee, in its sole discretion, without notice, at any time and from time to time, may modify or amend, in whole or in part, any or all of the provisions of the Plan, or suspend or terminate it entirely; provided, however, that no such modification, amendment, suspension, or termination may, without the consent of a Participant (or beneficiary in the case of the death of the Participant), reduce the right of a Participant (or beneficiary as the case may be) to a payment or distribution hereunder of a final award to which such individual is entitled. The Chief Executive Officer may also make amendments to the Plan at any time, consistent with the authority delegated to the Chief Executive Officer by the Board regarding such amendments.

10.
Miscellaneous

(a)
The Chief Executive Officer, the Board or the Committee may establish, amend or rescind from time to time rules and regulations which are necessary or desirable in connection with the Plan. The Chief Executive Officer may not act on any matter involving the Chief Executive Officer's own participation in this Plan. The Company shall have the right to withhold from any amounts payable under this Plan any taxes or other amounts required to be withheld by any governmental authority.

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

(c)
Participation in this Plan, or any modifications thereof, or the payment of any benefits hereunder, shall not be construed as giving to the Participant any right to be retained in the service of the Company or its subsidiaries, limiting in any way the right of the Company or its subsidiaries to terminate the Participant's employment at any time, evidencing any agreement or understanding, express or implied, that the Company or its subsidiaries will employ the Participant in any particular position or at any particular rate of compensation and/or guaranteeing the Participant any right to receive a salary increase in any year, such increase being granted only at the sole discretion of the Compensation Committee of the Board.

(d)
The Company, or its subsidiaries, or their Boards of Directors or any committees thereof, or any officer or director of the Company or its subsidiaries or any other person shall not be liable for any act or failure to act hereunder, except for fraud.

(e)
This Plan shall be governed by and construed in accordance with the laws of the State of Wisconsin, to the extent not preempted by federal law, without reference to conflicts of law principles.


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