10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

Commission	Registrant; State of Incorporation		IRS Employer
File Number	Address; and Telephone Number		Identification No.
001-09057	WISCONSIN ENERGY CORPORATION		39-1391525
		(A Wisconsin Corporation)
		231 West Michigan Street
		P.O. Box 2949
		Milwaukee, WI 53201
		(414) 221-2345

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that each Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]    No [  ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes [X]    No [  ]

Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of the latest practicable date (June 30, 2003):

Common Stock, $.01 Par Value, 117,143,313 shares outstanding.

		WISCONSIN ENERGY CORPORATION
		FORM 10-Q REPORT FOR THE QUARTER ENDED JUNE 30, 2003
		TABLE OF CONTENTS
Item			Page
	Introduction ............................................................................................................................		3
	Part I -- Financial Information
1.	Financial Statements
	Consolidated Condensed Income Statements ...................................................................		4
	Consolidated Condensed Balance Sheets ...........................................................................		5
	Consolidated Condensed Statements of Cash Flows ..........................................................		6
	Notes to Consolidated Condensed Financial Statements ....................................................		7
2.	Management's Discussion and Analysis of
	Financial Condition and Results of Operations ...................................................................		15
3.	Quantitative and Qualitative Disclosures About Market Risk ..................................................		38
4.	Controls and Procedures .........................................................................................................		38
	Part II -- Other Information
1.	Legal Proceedings ..................................................................................................................		39
4.	Submission of Matters to a Vote of Security Holders .............................................................		40
5.	Other Information ..................................................................................................................		41
6.	Exhibits and Reports on Form 8-K .........................................................................................		42
	Signatures ..............................................................................................................................		44

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INTRODUCTION

Wisconsin Energy Corporation is a diversified holding company, which conducts its operations primarily in three operating segments: a utility energy segment, a non-utility energy segment and a manufacturing segment. Unless qualified by their context when used in this document, the terms "Wisconsin Energy" or the "Company" refer to Wisconsin Energy Corporation and all of its subsidiaries. The Company's primary subsidiaries are Wisconsin Electric Power Company ("Wisconsin Electric"), Wisconsin Gas Company ("Wisconsin Gas") and WICOR Industries, Inc. ("WICOR Industries").

Utility Energy Segment:   The utility energy segment consists of: Wisconsin Electric, which serves electric customers in Wisconsin and the Upper Peninsula of Michigan, natural gas customers in Wisconsin and steam customers in metro Milwaukee, Wisconsin; Wisconsin Gas, which serves natural gas customers in Wisconsin and water customers in suburban Milwaukee, Wisconsin; and Edison Sault Electric Company ("Edison Sault"), which serves electric customers in the Upper Peninsula of Michigan. Wisconsin Electric and Wisconsin Gas operate under the trade name "We Energies".

Non-Utility Energy Segment:   The non-utility energy segment consists of: W.E. Power, LLC ("We Power"), which is designing, constructing and will own the new generating capacity included in the Company's Power the Future strategy; and Wisvest Corporation ("Wisvest"), which owns approximately $273 million of non-utility energy assets.

Manufacturing Segment:   The manufacturing segment consists of WICOR Industries, an intermediary holding company, and its three primary subsidiaries, Sta-Rite Industries, Inc. ("Sta-Rite"), SHURflo Pump Manufacturing Co. ("SHURflo") and Hypro Corporation ("Hypro"), which are manufacturers of pumps, water treatment products and fluid handling equipment with manufacturing, sales and distribution facilities in the United States and several other countries.

Other:   Other non-utility operating subsidiaries of Wisconsin Energy include primarily Minergy Corp. ("Minergy"), which has approximately $61 million of assets and develops and markets recycling technologies, and Wispark LLC ("Wispark"), which has approximately $159 million of assets and develops and invests in real estate.

The unaudited interim financial statements presented in this Form 10-Q have been prepared by Wisconsin Energy pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Wisconsin Energy's financial statements should be read in conjunction with the financial statements and notes thereto included in Wisconsin Energy's 2002 Annual Report on Form 10-K.

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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WISCONSIN ENERGY CORPORATION
CONSOLIDATED CONDENSED INCOME STATEMENTS
(Unaudited)
				Three Months Ended June 30		Six Months Ended June 30
				2003	2002	2003	2002
				(Millions of Dollars, Except Per Share Amounts)
	Operating Revenues			$914.3	$870.9	$2,143.5	$1,856.9
	Operating Expenses
		Fuel and purchased power		138.5	142.2	277.7	290.5
		Cost of gas sold		143.6	98.5	538.6	298.3
		Cost of goods sold		151.8	141.7	283.5	255.7
		Other operation and maintenance		260.4	274.9	533.3	522.2
		Depreciation, decommissioning
			and amortization	83.4	79.0	164.6	157.1
		Property and revenue taxes		20.3	22.3	41.4	45.0
		Asset valuation charges		-	-	-	141.5
	Total Operating Expenses			798.0	758.6	1,839.1	1,710.3
	Operating Income			116.3	112.3	304.4	146.6
	Other Income, Net			13.4	16.3	21.0	39.8
	Financing Costs			55.5	57.4	106.9	115.9
	Income Before Income Taxes			74.2	71.2	218.5	70.5
	Income Taxes			24.9	25.8	77.2	29.3
	Net Income			$49.3	$5.4	$141.3	$41.2
				====	====	=====	======
	Earnings Per Share
			Basic	$0.42	$0.39	$1.21	$0.36
			Diluted	$0.42	$0.39	$1.20	$0.35
	Weighted Average Common
		Shares Outstanding (Millions)
			Basic	116.7	115.3	116.4	115.2
			Diluted	117.9	116.4	117.4	116.2
	Dividends Per Share of Common Stock			$0.20	$0.20	$0.40	$0.40
	The accompanying Notes to Consolidated Condensed Financial Statements are an integral part
		of these financial statements.

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WISCONSIN ENERGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
				(Unaudited)
				June 30, 2003	December 31, 2002
				(Millions of Dollars)
Assets
Property, Plant and Equipment
	In Service			$8,329.9	$7,958.7
	Accumulated depreciation			(3,642.1)	(4,007.4)
				4,687.8	3,951.3
	Construction work in progress			291.0	274.0
	Leased facilities, net			107.4	110.3
	Nuclear fuel, net			69.0	63.2
			Net Property, Plant and Equipment	5,155.2	4,398.8
Investments				914.1	856.6
Current Assets
	Cash and cash equivalents			38.2	43.6
	Accounts receivable			517.0	479.2
	Accrued revenues			107.0	209.1
	Materials, supplies and inventories			449.6	455.1
	Prepayments and other assets			160.1	152.7
			Total Current Assets	1,271.9	1,339.7
Deferred Charges and Other Assets
	Deferred regulatory assets			752.8	650.6
	Goodwill, net			835.2	833.1
	Other			294.3	286.1
			Total Deferred Charges and Other Assets	1,882.3	1,769.8
Total Assets				$9,223.5	$8,364.9
				======	======
Capitalization and Liabilities
Capitalization
	Common equity			$2,261.0	$2,139.4
	Preferred stock of subsidiary			30.4	30.4
	Company-obligated mandatorily redeemable
		preferred securities of subsidiary trust
		holding solely debentures of the Company		200.0	200.0
	Long-term debt			3,370.5	3,030.5
			Total Capitalization	5,861.9	5,400.3
Current Liabilities
	Long-term debt due currently			88.3	40.3
	Short-term debt			558.5	953.1
	Accounts payable			317.0	317.6
	Accrued liabilities			164.0	189.4
	Other			166.8	125.5
			Total Current Liabilities	1,294.6	1,625.9
Deferred Credits and Other Liabilities
	Asset retirement obligations			707.7	-
	Accumulated deferred income taxes			571.2	568.0
	Other			788.1	770.7
			Total Deferred Credits and Other Liabilities	2,067.0	1,338.7
Total Capitalization and Liabilities				$9,223.5	$8,364.9
				======	======
The accompanying Notes to Consolidated Condensed Financial Statements are an integral part
	of these financial statements.

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WISCONSIN ENERGY CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
				Six Months Ended June 30
				2003	2002
				(Millions of Dollars)
Operating Activities
	Net income			$141.3	$41.2
	Reconciliation to cash
		Depreciation, decommissioning and amortization		189.8	179.1
		Nuclear fuel expense amortization		13.6	14.7
		Equity in earnings of unconsolidated affiliates		(11.9)	(16.9)
		Asset valuation charges		-	141.5
		Deferred income taxes and investment tax credits, net		(10.9)	(100.9)
		Change in -	Accounts receivable and accrued revenues	64.3	18.0
			Other accounts receivable	-	116.4
			Inventories	5.5	31.6
			Other current assets	4.2	(2.1)
			Accounts payable	(0.6)	(32.3)
			Accrued Income Taxes	(19.2)	55.8
			Other current liabilities	35.2	39.6
		Other		2.3	(40.6)
Cash Provided by Operating Activities				413.6	445.1
Investing Activities
	Capital expenditures			(326.9)	(256.0)
	Acquisitions and investments			(4.0)	(14.9)
	Proceeds from asset sales, net			12.6	51.5
	Nuclear fuel			(16.8)	(9.5)
	Nuclear decommissioning funding			(8.8)	(8.8)
	Other			(19.5)	(12.3)
Cash Used in Investing Activities				(363.4)	(250.0)
Financing Activities
	Issuance of common stock			29.3	26.3
	Repurchase of common stock			(6.8)	(41.1)
	Dividends paid on common stock			(46.6)	(46.2)
	Issuance of long-term debt			840.8	28.5
	Retirement of long-term debt			(456.7)	(128.4)
	Change in short-term debt			(394.6)	(32.7)
	Other			(21.0)	-
Cash Used in Financing Activities				(55.6)	(193.6)
Change in Cash and Cash Equivalents				(5.4)	1.5
Cash and Cash Equivalents at Beginning of Period				43.6	47.0
Cash and Cash Equivalents at End of Period				$38.2	$48.5
				======	======
Supplemental Information - Cash Paid For
	Interest (net of amount capitalized)			$97.1	$118.0
	Income taxes (net of refunds)			$107.5	$77.3
The accompanying Notes to Consolidated Condensed Financial Statements are an integral part
	of these financial statements.

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WISCONSIN ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1. GENERAL INFORMATION

The accompanying unaudited consolidated condensed financial statements for Wisconsin Energy Corporation should be read in conjunction with Item 8, Financial Statements and Supplementary Data, in Wisconsin Energy's 2002 Annual Report on Form 10-K. In the opinion of management, all adjustments, normal and recurring in nature, necessary to a fair statement of the results of operations, cash flows and financial position of Wisconsin Energy, have been included in the accompanying income statements, statements of cash flows and balance sheets. The results of operations for the three and six months ended June 30, 2003 are not necessarily indicative of the results which may be expected for the entire fiscal year 2003 because of seasonal and other factors.

2. ACCOUNTING POLICIES

Asset Retirement Obligations:   The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 143, Accounting for Asset Retirement Obligations, effective January 1, 2003. Under SFAS 143, entities are required to record the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred. When a new liability is recorded, the entity capitalizes the costs of the liability by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. At retirement, an entity settles the obligation for its recorded amount or incurs a gain or loss.

The following table presents pro forma information as if SFAS 143 had been adopted at the beginning of fiscal 2002.

	June 30, 2003	December 31, 2002
	(Millions of Dollars)
Asset Retirement Obligations
Reported	$707.7	$  -
Pro forma	$707.7	$675.4

During the second quarter of 2003, Wisconsin Electric signed an agreement to lease the site of its existing coal-based Port Washington Power Plant to We Power, which would construct and own a new gas-fired generating station at the site as part of the Company's Power the Future program. The terms of the lease call for Wisconsin Electric to raze the existing facilities at the site by the spring of 2006. As such, Wisconsin Electric recorded an asset retirement obligation and corresponding plant asset in the amount of $14.9 million in the second quarter of 2003.

The following table presents the details of the Company's asset retirement obligations which are included on the Consolidated Condensed Balance Sheets in "Deferred Credits and Other Liabilities".

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	Balance at	Initial	Liabilities	Liabilities		Cash flow	Balance at
	12/31/02	Adoption	Incurred	Settled	Accretion	revisions	6/30/03
	(Millions of Dollars)
Wisconsin Energy	$  -	$675.4	$14.9	$  -	$17.4	$  -	$707.7

The regulated operations of the Company also collect removal costs in rates for certain assets that do not have associated legal asset retirement obligations. As of June 30, 2003, the Company estimates that it has approximately $570 million related to removal costs recorded in Accumulated Depreciation.

Debt Redemption Costs:   As permitted by regulatory authorities, the Company is accounting for certain debt redemption costs under the revenue neutral method of accounting. Under the revenue neutral method of accounting, the Company defers the costs associated with the redemption of utility debt, to the extent that the redeemed debt is refinanced with other utility debt. The redemption costs are amortized based upon the difference between the interest expense of the new and redeemed debt. Wisconsin Electric's $485 million of optional debt redemptions in June and August 2003 are being accounted for using the revenue neutral method of accounting. During 2003, the Company expects to defer as regulatory assets approximately $24.9 million of debt redemption costs and amortize these costs over approximately 24 months.

Financial Instruments with Characteristics of both Liabilities and Equity:   The Company adopted SFAS 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, on July 1, 2003. SFAS 150, which was issued by the Financial Accounting Standards Board in May 2003, requires an issuer to classify outstanding freestanding financial instruments within its scope as a liability on its balance sheets even though the instruments have characteristics of equity. The Company's Trust Preferred Securities, previously separately classified in the capitalization section of its balance sheets, fall within the scope of SFAS 150. Effective for the quarterly period ending September 30, 2003, the Company will begin classifying its $200 million of outstanding Trust Preferred Securities as long-term debt on its balance sheets. In addition, the Company will prospectively begin classifying associated dividends ($13.7&nb sp;million on an annualized basis) as interest expense on its income statements and cash paid for interest on its statements of cash flows.

Variable Interest Entities:   In January 2003, the Financial Accounting Standards Board issued Interpretation 46, Consolidation of Variable Interest Entities ("FIN 46"). This standard will require an enterprise that is the primary beneficiary of a variable interest entity to consolidate that entity. As a result of adopting FIN 46, the Company expects to begin consolidating its existing interests in the Wisconsin Electric Fuel Trust in the third quarter of 2003. The Wisconsin Electric Fuel Trust's sole business is to own and lease back to Wisconsin Electric the nuclear fuel used at Point Beach Nuclear Plant. Because Wisconsin Electric has historically accounted for this nuclear fuel leasing arrangement as a capital lease, the Company does not expect adoption of FIN 46 to have a significant impact on the Company's balance sheets or on its results of operations. The Company does not expect to consolidate any other existing interests in unconsolidated en tities as a result of FIN 46.

3. BUSINESS COMBINATIONS AND GOODWILL

The Company accounts for goodwill and other intangibles under SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS 142, goodwill and other intangibles with indefinite lives are not subject to amortization. However, goodwill and other intangibles are subject to fair value-based rules for measuring impairment, and resulting write-downs, if any, are to be reflected in operating expense.

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The following table presents the details of the Company's intangible assets that are included on the Consolidated Condensed Balance Sheets in "Deferred Charges and Other Assets".

		Accumulated
	Gross Value	Amortization	Net Book Value
	(Millions of Dollars)
June 30, 2003
Total amortizable intangible assets	$21.5	$7.0	$14.5
Total non-amortizable intangible assets	54.7	2.1	52.6
Total intangible assets	$76.2	$9.1	$67.1
	===	===	===
December 31, 2002
Total amortizable intangible assets	$21.3	$6.2	$15.1
Total non-amortizable intangible assets	54.7	2.1	52.6
Total intangible assets	$76.0	$8.3	$67.7
	===	===	===

The amount of intangible amortization expense included in operating income was $0.4 million and $0.8 million for the six months ended June 30, 2003 and 2002, respectively. The estimated future annual intangible amortization expense for each of the five succeeding fiscal years and the remainder of fiscal 2003 is estimated to be $0.8 million for 2003, and $1.7 million in 2004 trending down to $1.3 million in 2008.

The following table presents the changes in goodwill during the first six months of fiscal 2003:

	Balance at			Balance at
Reporting Unit	12/31/02	Acquired	Adjustments (a)	6/30/03
	(Millions of Dollars)
Utility Energy	$442.9	$  -	$ -	$442.9
Manufacturing	390.2	-	2.1	392.3
	$833.1	$ -	$2.1	$835.2
	====	====	====	====

(a) The adjustment to the manufacturing reporting unit includes $1.6 million of purchase accounting adjustments and $0.5 million of currency translation adjustments.

4. ASSET VALUATION CHARGES AND NON-UTILITY ENERGY ASSETS

In the first quarter of 2002, the Company recorded a non-cash impairment charge of $141.5 million ($92.0 million after tax or $0.79 per share). The impairment charge primarily related to two non-utility energy assets previously classified as Held for Sale: the Company's Wisvest-Connecticut, LLC power plants and costs associated with a 500 megawatt power island consisting of gas turbine generators and related equipment. The Company sold the Wisvest-Connecticut plants in the fourth quarter of 2002.

Non-Utility Energy Assets:   The Company has a 49.5% ownership interest in Androscoggin LLC ("Androscoggin"), which owns a co-generation power plant in Maine. This investment is accounted for under the equity method of accounting and had a book value of approximately $26 million at June 30, 2003.

9

Androscoggin has an energy services agreement with a company that receives steam from the co-generation plant. The steam customer filed a lawsuit against Androscoggin alleging breach of contract under the energy services agreement. In November 2002, a federal judge awarded partial summary judgment to the steam customer. This lawsuit is scheduled to go to a jury trial for the determination of damages, if any, in late 2003 or early 2004.

The bank-lending group, which provides non-recourse financing to Androscoggin, has implemented monthly reviews of its financial performance and outlook before extending credit facilities. Androscoggin's cash flow forecast indicates the continuing need for outside capital to meet its operating cash requirements. During 2003, another investor in Androscoggin has continued to fund cash shortfalls with subordinated debt. The ultimate value of this investment is dependent upon a satisfactory resolution of the litigation, the ability of Androscoggin to obtain long-term financing and the continued infusion of additional capital.

5. COMMON EQUITY

Comprehensive Income:   Comprehensive Income includes all changes in equity during a period except those resulting from investments by and distributions to owners. Wisconsin Energy had the following total Comprehensive Income during the six months ended June 30, 2003 and 2002:

	Six Months Ended June 30
Comprehensive Income	2003	2002
	(Millions of Dollars)
Net Income	$141.3	$41.2
Other Comprehensive Income (Loss)
Currency Translation Adjustments	3.9	1.6
Hedging Gains (Losses)	1.0	(2.7)
Other	0.4	-
Total Other Comprehensive Income (Loss)	5.3	(1.1)
Total Comprehensive Income	$146.6	$40.1
	====	====

Common Stock Repurchase Plan:   The Board of Directors approved a common stock repurchase plan, which, as extended, authorized the Company to purchase up to $400 million of its shares of common stock through December 31, 2004. During the first six months of 2003, Wisconsin Energy purchased 0.3 million shares of common stock for $6.8 million, all of which were purchased in the first quarter. From the date of inception, the Company has purchased approximately 13.4 million shares of common stock for $293.6 million. The Company retires the stock that is purchased.

During the first six months of 2003, Wisconsin Energy issued approximately 1.4 million new shares of common stock totaling $29.3 million related to the Company's dividend reinvestment plan, other benefit plans and the exercise of stock options.

Stock-Based Compensation:   The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock option plans and has adopted the disclosure-only provisions of SFAS 123, Accounting for Stock-Based Compensation, as amended by SFAS 148, Accounting for Stock-Based Compensation - Transition and Disclosure - and amendment of SFAS 123. The following table illustrates the effect on net income and earnings per share as if the fair value method had been applied to all outstanding and unvested awards in each period. The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model. Had the Company expensed stock-based compensation under SFAS 123, the Company's

10
diluted earnings would have been reduced by $0.02 per share and $0.03 per share for the three and six months ended June 30, 2003, respectively.

	Three Months Ended June 30		Six Months Ended June 30
	2003	2002	2003	2002
	(Millions of Dollars, Except Per Share Amounts)
Net Income
As reported	$49.3	$45.4	$141.3	$41.2
Pro forma	$47.5	$44.1	$137.7	$38.7
Basic Earnings Per Common Share
As reported	$0.42	$0.39	$1.21	$0.36
Pro forma	$0.41	$0.38	$1.18	$0.34
Diluted Earnings Per Common Share
As reported	$0.42	$0.39	$1.20	$0.35
Pro forma	$0.40	$0.38	$1.17	$0.33

6. DERIVATIVE INSTRUMENTS

The Company follows SFAS 133, Accounting for Derivative Instruments and Hedging Activities, which requires that every derivative instrument be recorded on the balance sheet as an asset or liability measured at its fair value and that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. For any electric-related contracts in Wisconsin Energy's regulated electric operations that qualify as derivatives under SFAS 133, the Public Service Commission of Wisconsin ("PSCW") allows the effects of the fair market value accounting to be offset to regulatory assets and liabilities.

Wisvest-Connecticut, LLC, formerly a wholly-owned subsidiary of Wisvest, which was sold in December 2002, had fuel oil contracts utilized to mitigate the commodity risk associated with generation costs. These contracts were defined as derivatives under SFAS 133 and did not qualify or were not designated for hedge accounting treatment. During the three and six months ended June 30, 2002, the Company recorded non-cash, after tax income of $1.9 million or $ 0.02 per share and $14.2 million or $0.12 per share, respectively, to reflect the increase in fuel oil prices and the settlement of transactions.

7. GUARANTEES

Wisconsin Energy and certain subsidiaries enter into various guarantees to provide financial and performance assurance to third parties on behalf of affiliates. As of June 30, 2003, Wisconsin Energy and subsidiaries had the following guarantees:

	Maximum Potential Future Payments	Outstanding at June 30, 2003	Liability Recorded at June 30, 2003
	(Millions of Dollars)
Wisconsin Energy Guarantees
Joint venture (Energy Affiliates)	$61.9	$20.2	$  -
Other	2.0	2.0	-
Wisconsin Electric Guarantees	274.9	-	-
Other Subsidiary Guarantees	14.2	13.2	-
Total	$353.0	$35.4	$  -
	====	====	====

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Wisconsin Energy had provided a $60 million guarantee in support of construction period financing for WICOR's one-third interest in the Guardian Pipeline project. The pipeline went into commercial operation in December 2002, and Wisconsin Energy received a complete release of its obligations under this guarantee from the project's lenders in May 2003.

The Wisconsin Energy guarantees issued in support of energy related affiliates are for obligations under commodity contracts and credit agreements between the affiliates and third parties. Failure of the affiliates to fulfill their obligations under the agreements would require Wisconsin Energy 's performance under the guarantees. The majority of these guarantees are ongoing, terminating upon prior Wisconsin Energy notice to the third party. The remaining guarantees terminate during 2003.

Other Wisconsin Energy guarantees support obligations of affiliates to third parties under loan agreements. In the event the affiliates fail to perform under the loan agreements, Wisconsin Energy would be responsible for the obligations.

Wisconsin Electric guarantees support the commercial paper and line of credit borrowings for the Wisconsin Electric Fuel Trust. Effective July 1, 2003, in compliance with adoption of FIN 46, the Wisconsin Electric Fuel Trust is expected to become a consolidated entity of Wisconsin Electric. Wisconsin Electric will no longer reflect this affiliated guarantee on a consolidated basis. Wisconsin Electric also guarantees the potential retrospective premiums that could be assessed under Wisconsin Electric's nuclear insurance program.

Other subsidiary guarantees support loan obligations between affiliates and third parties. In the event the loan obligations are not performed, the subsidiary would be responsible for the obligations.

Postemployment benefits:   Postemployment benefits provided to former or inactive employees are recognized when an event occurs. The estimated liability for such benefits has not changed significantly from the $8 million accrual recorded by the Company as of December 31, 2002.

8. SEGMENT INFORMATION

Summarized financial information concerning Wisconsin Energy's reportable operating segments for the three and six month periods ended June 30, 2003 and 2002 is shown in the following table. Information for the six month period ended June 30, 2002 includes a non-cash impairment charge of $141.5 million ($92.0 million after tax), primarily related to the Non-Utility Energy Segment (See Note 4), and is not comparable to the same period in 2003.

				Corporate and
	Reportable Operating Segments			Other (a) &
Wisconsin	Energy			Reconciling	Total
Energy Corporation	Utility	Non-Utility	Manufacturing	Eliminations	Consolidated
	(Millions of Dollars)
Three Months Ended
June 30, 2003
Operating Revenues (b)	$693.4	$5.7	$206.1	$9.1	$914.3
Operating Income (Loss)	$91.4	($2.5)	$23.7	$3.7	$116.3
Net Income (Loss)	$45.8	($4.1)	$11.2	($3.6)	$49.3
Capital Expenditures	$133.6	$43.8	$2.8	$7.4	$187.6

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				Corporate and
	Reportable Operating Segments			Other (a) &
Wisconsin	Energy			Reconciling	Total
Energy Corporation	Utility	Non-Utility	Manufacturing	Eliminations	Consolidated
	(Millions of Dollars)
Three Months Ended
June 30, 2002
Operating Revenues (b)	$634.6	$38.7	$192.6	$5.0	$870.9
Operating Income (Loss)	$98.2	($1.4)	$21.9	($6.4)	$112.3
Net Income (Loss)	$49.3	($3.4)	$10.2	($10.7)	$45.4
Capital Expenditures	$99.2	$35.2	$4.1	$4.3	$142.8
Six Months Ended
June 30, 2003
Operating Revenues (b)	$1,735.6	$6.8	$383.9	$17.2	$2,143.5
Operating Income (Loss)	$271.0	($8.5)	$38.9	$3.0	$304.4
Net Income (Loss)	$147.9	($12.2)	$17.5	($11.9)	$141.3
Capital Expenditures	$214.8	$91.1	$5.2	$15.8	$326.9
Total Assets	$7,471.3	$427.8	$947.6	$376.8	$9,223.5
June 30, 2002
Operating Revenues (b)	$1,416.3	$82.1	$343.5	$15.0	$1,856.9
Operating Income (Loss)	$270.3	($130.2)	$28.4	($21.9)	$146.6
Net Income (Loss)	$139.0	($79.4)	$11.2	($29.6)	$41.2
Capital Expenditures	$170.6	$60.5	$8.6	$16.3	$256.0
Total Assets	$6,344.3	$626.0	$937.0	$331.7	$8,239.0

(a)	Other includes all other non-utility activities, primarily non-utility real estate investment and development by Wispark and non-utility investment in recycling technology by Minergy as well as interest on corporate debt.
(b)	Intersegment revenues are not material. Eliminations for intersegment revenues in the amounts of $0.8 million and $1.0 million are included in Operating Revenues for the three months ended June 2003 and 2002, respectively and in the amounts of $0.9 million and $1.1 million for six months ended June 2003 and 2002, respectively.

9. COMMITMENTS AND CONTINGENCIES

Environmental Matters:   The Company periodically reviews its exposure for remediation costs as evidence becomes available indicating that its remediation liability has changed. Given current information, management believes that future costs in excess of the amounts accrued and/or disclosed on all presently known and quantifiable environmental contingencies will not be material to the Company's financial position or results of operations.

EPA Information Requests:   Wisconsin Electric received a request for information in December 2000 from the United States Environmental Protection Agency ("EPA") regional offices pursuant to Section 114(a) of the Clean Air Act and a supplemental request in December 2002. In April 2003, Wisconsin Electric and EPA announced that a consent decree had been reached which resolved all issues related to this matter. Under the consent decree, Wisconsin Electric will significantly reduce its air emissions from its coal-fired generating facilities. The reductions will be achieved between now and 2013 through a combination of installing new pollution control equipment, upgrading existing equipment, and retiring certain older units. The capital cost of implementing this agreement is estimated to be approximately $600 million over 10 years. Under the agreement with EPA, Wisconsin Electric will

13
spend between $20 million and $25 million to conduct a research project at its Presque Isle facility, in cooperation with U.S. Department of Energy, to test new mercury reduction technologies. These steps and the associated costs are consistent with the Company's cost projections for implementing its Wisconsin Multi-Emission Cooperative Agreement and Power the Future plan. Wisconsin Electric also agreed to pay a civil penalty of $3.2 million. This agreement is open to public comment and subject to federal court approval. On July 10, 2003, the state of Michigan and the EPA filed a joint motion with the court to allow Michigan to become a party to the agreement between the EPA and Wisconsin Electric. The court granted the motion on July 21, 2003.

Giddings & Lewis, Inc./City of West Allis Lawsuit:   As previously reported, Wisconsin Electric entered into Settlement Agreements and Releases during 2002 with Giddings & Lewis, Inc. and the City of West Allis in a lawsuit alleging that Wisconsin Electric had deposited contaminated wastes at two sites owned by the plaintiffs in West Allis, Wisconsin. In September 2002, Wisconsin Electric filed a lawsuit against its insurance carriers to recover those costs and expenses associated with this matter. In the second quarter of 2003, Wisconsin Electric recovered amounts totaling approximately $9.1 million from several insurance carriers, which has been recorded as a reduction of other operation and maintenance expenses. The Company is continuing to pursue litigation against the remaining insurance carriers.

Nuclear Insurance:   The Price-Anderson Act limits the total public liability for damages arising from a nuclear incident at a nuclear power plant to approximately $9.4 billion, of which $300 million is covered by liability insurance purchased from private sources. The remaining $9.1 billion is covered by an industry retrospective loss sharing plan whereby in the event of a nuclear incident resulting in damages exceeding the private insurance coverage, each owner of a nuclear plant would be assessed a deferred premium of up to $88.1 million per reactor (Wisconsin Electric owns two) with a limit of $10 million per reactor within one calendar year. Effective August 20, 2003, the deferred premium increases to a maximum of $99.2 million per reactor. As the owner of Point Beach, Wisconsin Electric would be obligated to pay its proportionate share of any such assessment.

Wisconsin Electric, through its membership in Nuclear Electric Insurance Limited ("NEIL"), carries decontamination, property damage and decommissioning shortfall insurance covering losses of up to $2.0 billion at Point Beach. Under policies issued by NEIL, the insured member is liable for a retrospective premium adjustment in the event of catastrophic losses exceeding the full financial resources of NEIL. Wisconsin Electric's maximum retrospective liability under its policies is $14.8 million.

Wisconsin Electric also maintains insurance with NEIL covering business interruption and extra expenses during any prolonged accidental outage at Point Beach, where such outage is caused by accidental property damage from radioactive contamination or other risks of direct physical loss. Wisconsin Electric's maximum retrospective liability under this policy is $10.0 million.

It should not be assumed that, in the event of a major nuclear incident, any insurance or statutory limitation of liability would protect Wisconsin Electric from material adverse impact.

14

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS

Cautionary Factors:   Certain statements contained herein are "Forward Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward Looking Statements may be identified by reference to a future period or periods or by the use of forward looking terminology such as "may," "intends," "anticipates," "believes," "estimates," "expects," "forecasts," "objectives," "plans," "possible," "potential," "project" or similar terms or variations of these terms. Actual results may differ materially from those set forth in Forward Looking Statements as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, equity and bond market fluctuations, varying weather conditions, governmental regulation and supervision, as well as other risks and uncertainties detailed from time to time in filings with the Securities and Exchange Commission ("SEC") including factors described throughout this document and below in "Factors Affecting Results, Liquidity and Capital Resources".

RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 2003

CONSOLIDATED EARNINGS

The following table compares Wisconsin Energy's operating income by business segment during the second quarter of 2003 with similar information during the second quarter of 2002 including favorable (better ("B")) or unfavorable (worse ("W")) variances.

		Three Months Ended June 30
		2003		B (W)	2002
	(Millions of Dollars, Except per Share Amounts)
Contribution to Operating Income
Utility Energy Segment	$91.4		($6.8)		$98.2
Manufacturing Segment	23.7		1.8		21.9
Non-Utility Energy Segment	(2.5)		(1.1)		(1.4)
Corporate and Other	3.7		10.1		(6.4)
Total Operating Income	116.3		4.0		112.3
Other Income, net	13.4		(2.9)		16.3
Financing Costs	55.5		1.9		57.4
Income Before Income Taxes	74.2		3.0		71.2
Income Taxes	24.9		0.9		25.8
Net Income	$49.3		$3.9		$45.4
	====		====		====
Diluted Earnings Per Share	$0.42		$0.03		$0.39
	====		====		====

A more detailed analysis of financial results by segment follows.

UTILITY ENERGY SEGMENT CONTRIBUTION TO OPERATING INCOME

The utility energy segment contributed $91.4 million to operating income during the second quarter of 2003, a decrease of $6.8 million or 6.9% over the prior year second quarter. The decrease in operating income is largely due to unseasonably cool weather during spring and early summer 2003 and higher fuel and purchased power costs, both of which reduced electric margins between the comparative periods. An increase in benefit and bad debt expenses also contributed to the decline in operating income. A March 2003 rate increase associated with fuel and purchased power expenses and slightly higher gas

15
margins between the comparative periods partially mitigated the decline in utility operating income. The following table summarizes the operating income of this segment between the comparative quarters.

	Three Months Ended June 30
Utility Energy Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues
Electric	$478.0	$11.0	$467.0
Gas	210.7	47.8	162.9
Other	4.7	-	4.7
Total Operating Revenues	693.4	58.8	634.6
Fuel and Purchased Power	138.3	(16.0)	122.3
Cost of Gas Sold	143.6	(45.1)	98.5
Gross Margin	411.5	(2.3)	413.8
Other Operating Expenses
Other Operation and Maintenance	221.7	(2.4)	219.3
Depreciation, Decommissioning
and Amortization	78.9	(2.4)	76.5
Property and Revenue Taxes	19.5	0.3	19.8
Operating Income	$91.4	($6.8)	$98.2
	====	====	====

A more detailed analysis of financial results for the utility energy segment follows.

Presque Isle Power Plant Flooding:   In May 2003, the Company experienced a flood at its Presque Isle Power Plant in the Upper Peninsula of Michigan. As a result of the flood, the Company expects to incur an estimated $12 million to $15 million of costs to repair and restore the plant. These costs are being deferred pending future recovery. In addition, the Company incurred additional fuel and purchased power costs of approximately $7 million due to the unavailability of the plant. The Company has insurance, which is expected to cover most of the repair and the restoration of the plant. The Company is also pursuing other options to recover increased costs and lost revenues not covered by insurance associated with this event.

Electric Utility Revenues, Gross Margin and Sales

The following table compares Wisconsin Energy's total electric utility operating revenues and gross margin during the second quarter of 2003 with similar information for the second quarter of 2002.

	Three Months Ended June 30
Electric Utility Operations	2003	B (W)	2002
	(Millions of Dollars)
Electric Operating Revenues	$478.0	$11.0	$467.0
Fuel and Purchased Power
Fuel	64.3	4.2	68.5
Purchased Power	72.6	(20.8)	51.8
Total Fuel and Purchased Power	136.9	(16.6)	120.3
Gross Margin	$341.1	($5.6)	$346.7
	====	====	====

During the second quarter of 2003, total electric utility operating revenues increased by $11.0 million or 2.4% when compared with the second quarter of 2002 primarily due to the impact of rate increases related to fuel and purchased power costs and to a surcharge related to transmission costs. In March 2003, Wisconsin Electric received an interim increase in rates to recover increased fuel and purchased power costs. On an annual basis, the increase was $55.0 million. On a quarter to quarter basis, the fuel

16
surcharge resulted in $12.6 million of additional revenue. The Company also implemented a PSCW approved surcharge in October 2002 for recovery of increased annual transmission costs associated with American Transmission Company LLC ("ATC") which increased second quarter 2003 revenues by approximately $11.3 million, while the impact of unseasonably cool weather during the spring and early summer of 2003 significantly reduced operating revenues compared to the prior year. As measured by cooling degree days, the second quarter of 2003 was 68.9% cooler than the second quarter of 2002 and 59.2% cooler than normal.

Electric gross margin decreased 1.6% between the comparative periods as higher total fuel and purchased power costs more than offset the growth in electric operating revenues. Total fuel and purchased power expenses grew due to a significant increase in the volume and price of purchased power. The volume of purchased energy used in the second quarter of 2003 increased 33% due to the lower availability of the Company's generating units, including the Presque Isle Power Plant which was forced off-line from mid-May through mid-June 2003 due to flooding. The per unit cost of purchased power was 10.5% higher than during the second quarter of 2002 primarily due to higher natural gas costs. Of the $16.6 million total increase in fuel and purchased power costs, approximately $7 million was attributable to the flood at Presque Isle. Overall, the combined cost of fuel and purchased power increased 19.4% on a cost per megawatt hour basis between the second quarter of 2002 and the second quarter of 200 3.

The following table compares Wisconsin Energy's electric utility operating revenues and electric utility megawatt-hour sales by customer class during the second quarter of 2003 with similar information for the second quarter of 2002.

		Operating Revenues			Megawatt-Hour Sales
		Three Months Ended June 30			Three Months Ended June 30
Electric Utility Operations		2003	B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)			(Thousands)
Customer Class
Residential		$160.0	($5.0)	$165.0	1,774.9	(170.6)	1,945.5
Small Commercial/Industrial		157.3	5.4	151.9	2,077.1	(54.8)	2,131.9
Large Commercial/Industrial		129.5	6.9	122.6	2,689.8	(139.1)	2,828.9
Other-Retail/Municipal		20.8	1.6	19.2	526.4	21.7	504.7
Resale-Utilities		3.2	(0.2)	3.4	107.7	(17.4)	125.1
Other-Operating Revenues		7.2	2.3	4.9	-	-	-
Total		$478.0	$11.0	$467.0	7,175.9	(360.2)	7,536.1
		====	====	====	=====	=====	=====
Weather -- Degree Days (a)
Cooling (184 Normal)					75	(166)	241
(a)	As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.

Total electric megawatt-hour sales decreased by 4.8% during the second quarter of 2003 compared to the same period in 2002. Residential sales were down 8.8% reflecting cooler spring and early summer weather. Residential customers contribute higher margins than other customer classes and are particularly sensitive to fluctuations in weather. Sales to Wisconsin Electric's largest customers, two iron ore mines, decreased by 104.9 thousand megawatt-hours or 19.3% between the comparative periods primarily due to the outage at Presque Isle Power Plant. The Company was required to temporarily curtail electric sales to the mines until Presque Isle was returned to service. Excluding these two mines, Wisconsin Energy's total electric energy sales fell 3.7% and sales volumes to the remaining large commercial/industrial customers were down 1.5% between the comparative periods.

17

Gas Utility Revenues, Gross Margin and Therm Deliveries

A comparison follows of Wisconsin Energy's gas utility operating revenues, gross margin and gas deliveries for the second quarter of 2003 and the second quarter of 2002. Gross margin is a better performance indicator than revenues because changes in the cost of gas sold flow through to revenue under gas cost recovery mechanisms. Due primarily to a significant increase in the delivered cost of natural gas between the comparative periods, gas operating revenues increased by $47.8 million or 29.3% offset by a $45.1 million or 45.8% increase in purchased gas costs.

	Three Months Ended June 30
Gas Utility Operations	2003	B (W)	2002
	(Millions of Dollars)
Gas Operating Revenues	$210.7	$47.8	$162.9
Cost of Gas Sold	143.6	(45.1)	98.5
Gross Margin	$67.1	$2.7	$64.4
	====	====	====

Gas margins increased $2.7 million or 4.2% between the comparative periods due primarily to recognition of $3.3 million of increased gas cost incentive revenues during the second quarter of 2003 compared with the second quarter of 2002 under the Company's gas cost recovery mechanisms.

The following table compares Wisconsin Energy's gas utility gross margins and natural gas therm deliveries by customer class during the second quarter of 2003 with similar information for the second quarter of 2002.

		Gross Margin				Therm Deliveries
			Three Months Ended June 30			Three Months Ended June 30
Gas Utility Operations		2003		B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)				(Millions)
Customer Class
Residential		$40.4		($0.4)	$40.8	128.0	(2.8)	130.8
Commercial/Industrial		11.4		(0.1)	11.5	71.5	(1.2)	72.7
Interruptible		0.4		-	0.4	5.5	(0.7)	6.2
Total Gas Sold		52.2		(0.5)	52.7	205.0	(4.7)	209.7
Transported Gas		8.9		(0.3)	9.2	171.8	(9.6)	181.4
Other-Operating		6.0		3.5	2.5	-	-	-
Total		$67.1		$2.7	$64.4	376.8	(14.3)	391.1
		====		===	====	===	===	===
Weather -- Degree Days (a)
Heating (947 Normal)						1,158	94	1,064
(a)	As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.

Other Operation and Maintenance Expenses

Other operation and maintenance expenses increased by $2.4 million or 1.1% during the second quarter of 2003 when compared with the second quarter of 2002. The increase was primarily attributable to approximately $11.3 million of higher electric transmission expenses, which were offset by increased revenues resulting from a surcharge that became effective in October of 2002. Pension and benefit costs increased by $5.4 million and bad debt expenses increased by $1.0 million during 2003. Insurance recoveries of approximately $9.1 million in the second quarter of 2003 compared to associated settlement costs of $8.7 million in the second quarter of 2002, both related to the Giddings & Lewis/City of West Allis litigation, offset much of the increase in other operation and maintenance expenses.

18

Depreciation, Decommissioning and Amortization

Depreciation, Decommissioning and Amortization expenses increased by $2.4 million or 3.1% during the second quarter of 2003 primarily due to a higher base of depreciable assets between the comparative periods.

MANUFACTURING SEGMENT CONTRIBUTION TO OPERATING INCOME

The manufacturing segment contributed operating income of $23.7 million during the second quarter of 2003 compared with $21.9 million during the second quarter of 2002. This $1.8 million increase in operating income primarily resulted from strong sales in the Water Systems market. The following table identifies the key components of operating income for Wisconsin Energy's manufacturing segment between the comparative periods.

	Three Months Ended June 30
Manufacturing Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues
Domestic	$147.4	$0.9	$146.5
International	58.7	12.6	46.1
Total Operating Revenues	206.1	13.5	192.6
Cost of Goods Sold	151.8	(10.1)	141.7
Gross Margin	54.3	3.4	50.9
Operating Expenses	30.6	(1.6)	29.0
Operating Income	$23.7	$1.8	$21.9
	====	====	====

Manufacturing operating revenues for the second quarter of 2003 were $206.1 million, an increase of $13.5 million or 7.0% compared to the same period in 2002. Acquisitions completed in 2002 contributed $3.9 million of additional sales during the second quarter of 2003. The Company experienced a 5.0% growth in its base manufacturing business between the comparative periods. Overall for the quarter, sales in all markets of the manufacturing business were at or above the prior year with the exception of the Beverage and Food segment. The largest growth was seen in the Water Systems market (excluding acquisitions), which increased 11.3% due to wet conditions in the Northeastern and Midwestern sections of the United States as well as to increased export and international sales. During the second quarter of 2003, international sales were 27.3% ahead of the same period in 2002, with half due to continued international growth and half relating to foreign currency translation adjustments relat ed to a weaker U.S. dollar.

The gross margin increased to $54.3 million for the second quarter of 2003 from $50.9 million for the same period in 2002, which is flat for the same period year over year as a percentage of sales. For the second quarter of 2003, operating expenses as a percentage of sales decreased to 14.8% from 15.1% for the second quarter of 2002.

NON-UTILITY ENERGY SEGMENT CONTRIBUTION TO OPERATING INCOME

The operations of the non-utility energy segment have been significantly reduced from the prior year due to the sale of Wisvest-Connecticut in December 2002. The following table compares the operating losses of Wisconsin Energy's non-utility energy segment between the second quarter of 2003 and the second quarter of 2002.

19

	Three Months Ended June 30
Non-Utility Energy Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues	$5.7	($33.0)	$38.7
Fuel and Purchased Power	0.2	19.7	19.9
Gross Margin	5.5	(13.3)	18.8
Other Operating Expenses
Other Operation and Maintenance	5.6	11.6	17.2
Depreciation, Decommissioning
and Amortization	1.8	(1.0)	0.8
Property and Revenue Taxes	0.6	1.6	2.2
Operating Loss	($2.5)	($1.1)	($1.4)
	====	====	====

The increase in the operating loss primarily relates to the sale of Wisvest-Connecticut, which had positive operating income during the second quarter of 2002, and to increased depreciation expenses at Wisvest associated with the Calumet gas-based power plant in Chicago, Illinois, which began operation in June 2002.

CORPORATE AND OTHER CONTRIBUTION TO OPERATING INCOME

Corporate and other affiliates operating income increased $10.1 million in the second quarter of 2003 compared to the same period in 2002, primarily due to improved operating results by Minergy and to the timing of real estate asset sales by Wispark. Minergy's results improved primarily due to higher revenues and lower fuel costs at its Minergy-Neenah recycling facility. Also, Wisconsin Energy reduced other operation and maintenance expenses by $3.1 million during the second quarter of 2003. In connection with the Power the Future Port Washington lease that was entered into and approved by the PSCW in the second quarter of 2003, Wisconsin Electric will reimburse We Power for the $3.1 million of previously incurred costs. Wisconsin Electric received approval from the PSCW to defer certain Port Washington costs billed by We Power for recovery in future rates. The following table identifies the components of operating income (loss) of Wisconsin Energy's corporate and other affiliat es between the second quarter of 2003 and the second quarter of 2002.

	Three Months Ended June 30
Corporate and Other Affiliates	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues	$9.1	$4.1	$5.0
Operating Expenses
Other Operation and Maintenance	3.3	6.7	10.0
Depreciation, Decommissioning
and Amortization	1.9	(0.7)	1.2
Property and Revenue Taxes	0.2	-	0.2
Operating Income (Loss)	$3.7	$10.1	($6.4)
	===	===	===

CONSOLIDATED OTHER INCOME AND DEDUCTIONS

Net consolidated other income and deductions decreased by $2.9 million in the second quarter of 2003 compared to the second quarter of 2002. This decrease is primarily due to a $3.2 million civil penalty the Company agreed to pay pursuant to the terms of an EPA consent decree. (See Note 9 in the Notes to Consolidated Condensed Financial Statements in Item 1 of Part I of this report for more information.)

20

The Company recorded a gain of $3.0 million in the second quarter of 2003 that related to the prior receipt of stock from the demutualization of two life insurance companies in which the Company was a policy holder. Also in the second quarter of 2003, the Company recorded a charitable contribution expense of $3.0 million when it contributed the stock to the Wisconsin Energy Corporation Foundation.

CONSOLIDATED FINANCING COSTS

Total financing costs decreased by $1.9 million in the three months ended June 30, 2003 compared to the same period in 2002. This decline was primarily due to lower interest rates and lower debt levels.

CONSOLIDATED INCOME TAXES

For the second quarter of 2003, the Company's effective tax rate was 33.6%, which was less than the annual rate of 38.8% for 2002. This reduction in the effective income tax rate was primarily due to tax credits associated with rehabilitation projects, a lower effective rate for state income taxes, and the favorable settlement of tax contingencies. The Company expects the annual effective income tax rate for 2003 to be between 36% and 37%.

RESULTS OF OPERATIONS -- SIX MONTHS ENDED JUNE 30, 2003

CONSOLIDATED EARNINGS

The following table compares Wisconsin Energy's operating income by business segment during the first six months of 2003 with similar information during the first six months of 2002 including favorable (better ("B")) or unfavorable (worse ("W")) variances.

		Six Months Ended June 30
		2003		B (W)	2002
			(Millions of Dollars, Except per Share Amounts)
Contribution to Operating Income
Utility Energy Segment		$271.0		$0.7	$270.3
Manufacturing Segment		38.9		10.5	28.4
Non-Utility Energy Segment (a)		(8.5)		121.7	(130.2)
Corporate and Other (b)		3.0		24.9	(21.9)
Total Operating Income		304.4		157.8	146.6
Other Income, net		21.0		(18.8)	39.8
Financing Costs		106.9		9.0	115.9
Income Before Income Taxes		218.5		148.0	70.5
Income Taxes		77.2		(47.9)	29.3
Net Income		$141.3		$100.1	$41.2
		====		====	====
Diluted Earnings Per Share		$1.20		$0.85	$0.35
		====		====	====
(a)	During 2002, non-utility energy segment operating income includes a non-cash impairment charge of $125.2 million.
(b)	During 2002, corporate and other operating income includes a non-cash impairment charge of 16.3 million.

A more detailed analysis of financial results by segment follows.

21

UTILITY ENERGY SEGMENT CONTRIBUTION TO OPERATING INCOME

The utility energy segment contributed $271.0 million to operating income during the first six months of 2003, basically unchanged when compared with the same period in the prior year. The following table summarizes the comparative operating income of this segment.

	Six Months Ended June 30
Utility Energy Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues
Electric	$965.9	$56.1	$909.8
Gas	755.7	262.4	493.3
Other	14.0	0.8	13.2
Total Operating Revenues	1,735.6	319.3	1,416.3
Fuel and Purchased Power	277.3	(38.1)	239.2
Cost of Gas Sold	538.6	(240.3)	298.3
Gross Margin	919.7	40.9	878.8
Other Operating Expenses
Other Operation and Maintenance	452.4	(36.6)	415.8
Depreciation, Decommissioning
and Amortization	156.5	(4.3)	152.2
Property and Revenue Taxes	39.8	0.7	40.5
Operating Income	$271.0	$0.7	$270.3
	====	====	====

A more detailed analysis of financial results for the utility energy segment follows.

Electric Utility Revenues, Gross Margin and Sales

The following table compares Wisconsin Energy's total electric utility operating revenues and gross margin during the first six months of 2003 with similar information for the first six months of 2002.

	Six Months Ended June 30
Electric Utility Operations	2003	B (W)	2002
	(Millions of Dollars)
Electric Operating Revenues	$965.9	$56.1	$909.8
Fuel and Purchased Power
Fuel	135.1	(4.1)	131.0
Purchased Power	138.6	(34.5)	104.1
Total Fuel and Purchased Power	273.7	(38.6)	235.1
Gross Margin	$692.2	$17.5	$674.7
	====	====	====

During the first six months of 2003, total electric utility operating revenues increased by $56.1 million or 6.2% when compared with the first six months of 2002 primarily due to the impact of rate increases related to fuel and purchased power costs and to a surcharge related to transmission costs. In March 2003, Wisconsin Electric received an interim increase in rates to recover increased fuel and purchased power costs. On an annual basis, the increase was $55.0 million. On a year-to-date basis, the fuel surcharge resulted in $14.9 million of additional revenue. The Company also implemented a PSCW approved surcharge in October 2002 for recovery of increased annual transmission costs associated with ATC, which increased year-to-date 2003 revenues by approximately $23.1 million. Non-fuel Operation and Maintenance costs increased by a similar amount, so there was little impact to Operating Income as a

22
result of the transmission surcharge. The impact of favorable weather on heating load during the first quarter of 2003 was offset by the impact of unfavorable weather on cooling load during the second quarter of 2003, thereby reducing electric operating revenues by an estimated $7.7 million between the comparative periods.

Electric gross margin increased 2.6% between the comparative periods primarily due to the higher revenues as discussed, which more than offset an increase in fuel and purchased power costs. Total fuel and purchased power expenses grew mostly due to a significant increase in natural gas prices, the primary fuel source for Wisconsin Energy's purchased power, resulting in a 24.5% increase in the cost per megawatt hour of purchased power. Average commodity gas prices were $5.23 for the first half of 2003 compared to $2.90 for the first half of 2002 on a per dekatherm basis. Fuel and purchased power costs also increased by approximately $7 million due to the need for replacement power caused by a flood that temporarily shut down the Company's Presque Isle Power Plant during the second quarter of 2003. Overall, the combined cost of fuel and purchased power increased 13.3% on a cost per megawatt hour basis between the first six months of 2002 and the first six months of 2003.

The following table compares Wisconsin Energy's electric utility operating revenues and electric utility megawatt-hour sales by customer class during the first six months of 2003 with similar information for the first six months of 2002.

		Operating Revenues			Megawatt-Hour Sales
		Six Months Ended June 30			Six Months Ended June 30
Electric Utility Operations		2003	B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)			(Thousands)
Customer Class
Residential		$339.7	$7.5	$332.2	3,851.9	(76.0)	3,927.9
Small Commercial/Industrial		310.1	18.3	291.8	4,247.0	53.4	4,193.6
Large Commercial/Industrial		251.8	21.8	230.0	5,459.6	214.8	5,244.8
Other-Retail/Municipal		42.8	6.4	36.4	1,146.5	191.5	955.0
Resale-Utilities		9.3	2.8	6.5	256.9	17.0	239.9
Other-Operating Revenues		12.2	(0.7)	12.9	-	-	-
Total		$965.9	$56.1	$909.8	14,961.9	400.7	14,561.2
		=====	=====	=====	=====	=====	=====
Weather -- Degree Days (a)
Heating (4,202 Normal)					4,705	623	4,082
Cooling (185 Normal)					75	(166)	241
(a)	As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.

Total electric megawatt-hour sales increased by 2.8% during the first half of 2003. Residential sales fell 1.9% because the impact of unfavorable weather conditions on cooling load during the second quarter of 2003 offset the impact of favorable weather conditions on heating load during the first quarter of 2003. Residential customers contribute higher margins than other customer classes and are particularly sensitive to fluctuations in weather. Despite a temporary curtailment of electric sales in the second quarter of 2003 as a result of a flood-related outage at the Company's Presque Isle Power Plant, sales to Wisconsin Electric's largest customers, two iron ore mines, increased by 154.2 thousand megawatt-hours or 18.3% between the comparative periods because one of the mines had an extended outage in the first quarter of 2002. Excluding these two mines, Wisconsin Energy's total electric energy sales increased by 1.8% and sales volumes to the remaining large commercial/industrial customers impr oved by 1.4% between the comparative periods. Sales to municipal utilities, the Other Retail/Municipal customer

23
class, increased 20.1% between the periods due to a higher off-peak demand from municipal wholesale power customers.

Gas Utility Revenues, Gross Margin and Therm Deliveries

A comparison follows of Wisconsin Energy's gas utility operating revenues, gross margin and gas deliveries for the first six months of 2003 and the first six months of 2002. Gross margin is a better performance indicator than revenues because changes in the cost of gas sold flow through to revenue under gas cost recovery mechanisms. Due primarily to a significant increase in the delivered cost of natural gas between the comparative periods, gas operating revenues increased by $262.4 million or 53.2% offset by a $240.3 million or 80.5% increase in purchased gas costs.

	Six Months Ended June 30
Gas Utility Operations	2003	B (W)	2002
	(Millions of Dollars)
Gas Operating Revenues	$755.7	$262.4	$493.3
Cost of Gas Sold	538.6	(240.3)	298.3
Gross Margin	$217.1	$22.1	$195.0
	====	====	====

Gas margins increased $22.1 million or 11.3% between the comparative periods primarily due to a favorable weather-related increase in therm deliveries, especially to residential customers who are more weather sensitive and contribute higher margins per therm than other customer classes. As measured by heating degree days, the first half of 2003 was 15.3% colder than the first half of 2002 and 12.0% colder than normal. A $3.3 million increase in gas cost incentive revenues during the second quarter of 2003 under the Company's gas cost recovery mechanism also contributed to the increased gross margin between the comparative periods.

The following table compares Wisconsin Energy's gas utility gross margins and natural gas therm deliveries by customer class during the first six months of 2003 with similar information for the first six months of 2002.

		Gross Margin				Therm Deliveries
			Six Months Ended June 30			Six Months Ended June 30
Gas Utility Operations		2003		B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)				(Millions)
Customer Class
Residential		$141.1		$12.6	$128.5	546.1	58.3	487.8
Commercial/Industrial		43.5		5.0	38.5	310.1	40.1	270.0
Interruptible		1.1		-	1.1	15.2	0.7	14.5
Total Gas Sold		185.7		17.6	168.1	871.4	99.1	772.3
Transported Gas		22.6		0.2	22.4	428.4	(0.1)	428.5
Other-Operating		8.8		4.3	4.5	-	-	-
Total		$217.1		$22.1	$195.0	1,299.8	99.0	1,200.8
		=====		=====	=====	=====	=====	=====
Weather -- Degree Days (a)
Heating (4,202 Normal)						4,705	623	4,082
(a)	As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.

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Other Operation and Maintenance Expenses

Other operation and maintenance expenses increased by $36.6 million or 8.8% during the first six months of 2003 when compared with the first six months of 2002. The increase was primarily attributable to approximately $23.1 million of higher electric transmission expenses which were offset by increased revenues recorded due to a surcharge that became effective in October of 2002. Pension and benefit costs increased by $10.4 million during 2003 and bad debt expenses increased by $7.4 million in large part due to higher gas bills. Insurance recoveries of approximately $9.1 million in the second quarter of 2003 compared to associated settlement costs of $8.7 million in the second quarter of 2002, both related to the Giddings & Lewis/City of West Allis litigation, offset some of the increase in other operation and maintenance expenses.

Depreciation, Decommissioning and Amortization

Depreciation, Decommissioning and Amortization expenses increased by $4.3 million or 2.8% during the first six months of 2003 primarily due to a higher base of depreciable assets between the comparative periods.

MANUFACTURING SEGMENT CONTRIBUTION TO OPERATING INCOME

The manufacturing segment contributed operating income of $38.9 million during the first six months of 2003 compared with $28.4 million during the first six months of 2002. The following table identifies the key components of operating income for Wisconsin Energy's manufacturing segment between the comparative periods.

	Six Months Ended June 30
Manufacturing Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues
Domestic	$275.9	$19.2	$256.7
International	108.0	21.2	86.8
Total Operating Revenues	383.9	40.4	343.5
Cost of Goods Sold	283.5	(27.8)	255.7
Gross Margin	100.4	12.6	87.8
Operating Expenses	61.5	(2.1)	59.4
Operating Income	$38.9	$10.5	$28.4
	====	====	====

Manufacturing operating revenues for the six months ended June 30, 2003 were $383.9 million, an increase of $40.4 million or 11.8% compared to the same period in 2002. Acquisitions completed in 2002 contributed $10.4 million of sales during the first six months of 2003. The Company experienced an 8.7% growth in its base manufacturing business between the comparative periods. Overall for the first half of 2003, sales in all markets of the manufacturing business were at or above the prior year with the exception of the Beverage and Food segment. The largest growth was seen in the Water Systems market, which increased $36.2 million or 26.1%, due to wet conditions in the Northeastern and Midwestern sections of the United States, coupled with the impact of a 2002 second quarter acquisition. The RV, Agriculture and Industrial markets also saw significant growth over the prior year sales levels. During the first half of 2003, international sales were 24.4% ahead of the same period in 2002, with half due to continued international growth and half relating to currency translation effects.

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The gross profit margins increased to 26.2% for the first six months of 2003 from 25.6% for the same period in 2002. The increase in gross margins is due to changes in the customer/product mix, continued cost reduction efforts, as well as efficiencies gained through the consolidation of facilities in 2002. For the first six months of 2003, operating expenses as a percentage of sales decreased to 16.0% from 17.3% for the first six months of 2002. During 2002, the manufacturing segment recorded $4.5 million of charges related to relocation and closing/severance payments that did not recur in 2003. Excluding these charges, operating expenses as a percentage of sales were flat year over year for the period.

NON-UTILITY ENERGY SEGMENT CONTRIBUTION TO OPERATING INCOME

The operations of the non-utility energy segment have been significantly reduced from the prior year due to the sale of Wisvest-Connecticut in December 2002. The following table compares the operating losses of Wisconsin Energy's non-utility energy segment between the first six months of 2003 and the first six months of 2002.

	Six Months Ended June 30
Non-Utility Energy Segment	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues	$6.8	($75.3)	$82.1
Fuel and Purchased Power	0.4	50.9	51.3
Gross Margin	6.4	(24.4)	30.8
Other Operating Expenses
Other Operation and Maintenance	10.1	20.8	30.9
Depreciation, Decommissioning
and Amortization	3.7	(2.5)	1.2
Property and Revenue Taxes	1.1	2.6	3.7
Valuation Charge	-	125.2	125.2
Operating Loss	($8.5)	$121.7	($130.2)
	=====	====	====

The decrease in the operating loss primarily relates to a $125.2 million asset valuation charge recorded in the first quarter of 2002 and to the sale of Wisvest-Connecticut in December 2002.

CORPORATE AND OTHER CONTRIBUTION TO OPERATING INCOME

Corporate and other affiliates operating income increased $24.9 million in the first six months of 2003 compared to the same period in 2002 primarily due to a $16.3 million asset valuation charge recorded in the first quarter of 2002. In addition, Minergy's results improved primarily due to higher revenues and lower fuel costs at its Minergy-Neenah recycling facility. Also, Wisconsin Energy reduced other operation and maintenance expenses by $3.1 million during the second quarter of 2003. In connection with the Power the Future Port Washington lease that was entered into and approved by the PSCW in the second quarter of 2003, Wisconsin Electric will reimburse We Power for the $3.1 million of previously incurred costs. Wisconsin Electric received approval from the PSCW to defer certain Port Washington costs billed by We Power for recovery in future rates. The following table identifies the components of operating income (loss) of Wisconsin Energy's corporate and other affili ates between the six months ended June 30, 2003 and the six months ended June 30, 2002.

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	Six Months Ended June 30
Corporate and Other Affiliates	2003	B (W)	2002
	(Millions of Dollars)
Operating Revenues	$17.2	$2.2	$15.0
Operating Expenses
Other Operation and Maintenance	10.6	6.5	17.1
Depreciation, Decommissioning
and Amortization	3.1	(0.4)	2.7
Property and Revenue Taxes	0.5	0.3	0.8
Valuation Charge	-	16.3	16.3
Operating Income (Loss)	$3.0	$24.9	($21.9)
	===	====	====

CONSOLIDATED OTHER INCOME AND DEDUCTIONS

Net consolidated other income and deductions decreased by $18.8 million in the first six months of 2003 compared to the first six months of 2002. This decrease is primarily due to $23.6 million in SFAS 133 gains recognized in 2002 on fuel oil contracts at Wisvest-Connecticut's two power plants, which were sold in December 2002. Also in 2002, the Company recorded $5.3 million of costs associated with bond redemptions.

CONSOLIDATED FINANCING COSTS

Total financing costs decreased by $9.0 million in the six months ended June 30, 2003 compared to the same period in 2002. This decline was primarily due to lower interest rates and lower debt levels.

CONSOLIDATED INCOME TAXES

For the first six months of 2003, the Company's effective tax rate was 35.3%, which was less than the annual rate of 38.8% for 2002. This reduction in the effective income tax rate was primarily due to tax credits associated with rehabilitation projects, a lower effective rate for state income taxes, the favorable settlement of tax contingencies, and the Company's ability to recognize almost $3 million of state net operating loss carryforwards in the manufacturing segment.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

The following summarizes Wisconsin Energy's cash flows during the first six months of 2003 and 2002:

	Six Months Ended June 30
Wisconsin Energy Corporation	2003	2002
	(Millions of Dollars)
Cash Provided by (Used in)
Operating Activities	$413.6	$445.1
Investing Activities	($363.4)	($250.0)
Financing Activities	($55.6)	($193.6)

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Operating Activities

Cash provided by operating activities decreased to $413.6 million during the first six months of 2003 compared with $445.1 million during the same period in 2002. This decrease was primarily due to a $116 million refund in the first quarter of 2002 from a favorable court ruling in the Giddings & Lewis/City of West Allis litigation offset in part by lower working capital requirements between the comparative periods due to the impact of unseasonably cool spring and early summer weather in 2003.

Investing Activities

During the first six months of 2003, Wisconsin Energy invested a total of $363.4 million, an increase of $113.4 million over the prior year, primarily due to the Power the Future initiative, to costs for construction of the Ixonia natural gas lateral, and to reduced asset sales. In the first half of 2003, the Company had capital expenditures of $214.8 million for utility plant, $91.1 million for non-utility energy projects ($90.4 million of which is attributable to Power the Future), $5.2 million for manufacturing and $15.8 million for other non-utility activities. Between the comparative periods, Wisconsin Energy had $38.9 million less of asset sales and spent $7.3 million more on nuclear fuel due to the timing of purchases related to scheduled outages at Point Beach Nuclear Plant.

Financing Activities

During the six months ended June 30, 2003, the Company used $55.6 million for financing activities compared with using $193.6 million for financing activities during the first six months of 2002. The Company reduced short-term debt by $394.6 million and retired $456.7 million of long-term debt during 2003, reducing its debt to total capital ratio to 61.7% from 62.9% at the end of 2002.

In March 2003, Wisconsin Energy sold $200 million of unsecured 6.20% Senior Notes due April 1, 2033. These securities were issued under an existing shelf registration statement filed with the SEC. The proceeds of the offering were used to repay a portion of the Company's outstanding commercial paper as it matured.

In May 2003, Wisconsin Electric sold $635 million of unsecured Debentures ($300 million of ten-year 4.50% Debentures due 2013 and $335 million of thirty-year 5.625% Debentures due 2033) under an existing $800 million shelf registration statement filed with the SEC. Wisconsin Electric used a portion of the proceeds from the Debentures to repay short-term debt, which was originally incurred to retire debt that matured in December 2002. The balance of the proceeds were used to redeem $425 million of Wisconsin Electric's debt securities in June 2003 and will be used for the optional redemption in August 2003 of another $60 million debt issue that has been called.

The debt refinancings in June and August 2003 are being accounted for using the revenue neutral method of accounting pursuant to PSCW authorization, whereby net debt extinguishment costs in the amount of approximately $24.9 million are being deferred and will be amortized over an approximately two year period based upon the level of interest savings achieved.

During the first six months of 2003, Wisconsin Energy purchased approximately 0.3 million shares of common stock for $6.8 million, all of which were purchased in the first quarter, under a $400 million board-approved repurchase program that was initiated in 2000. Also during the first six months of 2003, Wisconsin Energy issued approximately 1.4 million new shares of common stock aggregating $29.3 million related to the Company's dividend reinvestment plan, other benefit plans and the exercise of stock options.

28

CAPITAL RESOURCES AND REQUIREMENTS

Capital Resources

Cash requirements during the remaining six months of 2003 are expected to be met through a combination of internal sources of funds from operations, asset sales, short-term borrowings and existing lines of credit supplemented, if necessary, through the sale of debt securities and the issuance of common stock under the Company's stock plans.

Depending on market conditions and other factors including receipt of required regulatory approvals, Wisconsin Gas anticipates issuing $100 million of unsecured long-term debt during the fourth quarter of 2003.

The Company has access to outside capital markets and has been able to generate funds internally and externally to meet its capital requirements. Wisconsin Energy's ability to attract the necessary financial capital at reasonable terms is critical to the Company's overall strategic plan. Wisconsin Energy believes that it has adequate capacity to fund its operations for the foreseeable future through its borrowing arrangements and internally generated cash.

Wisconsin Energy had approximately $1 billion of available unused lines of bank back-up credit facilities on a consolidated basis as of June 30, 2003. The Company had approximately $559 million of total consolidated short-term debt outstanding on such date.

Wisconsin Energy and its subsidiaries review their bank back-up credit facility needs on an ongoing basis and expect to be able to maintain adequate credit facilities to support their operations. The following table summarizes such facilities at June 30, 2003:

Company	Total Facility	Drawn	Credit Available	Facility Maturity	Facility Term
	(Millions of Dollars)
Wisconsin Energy	$300.0	$  -	$300.0	Apr-2004	364 day
Wisconsin Energy	$300.0	$  -	$300.0	Apr-2006	3 year
Wisconsin Electric	$250.0	$  -	$250.0	Jun-2004	364 day
Wisconsin Gas	$200.0	$  -	$200.0	Jun-2004	364 day

On April 8, 2003, Wisconsin Energy entered into an unsecured 364 day $300 million bank back-up credit facility to replace a $300 million credit facility that was expiring. The credit facility may be extended for an additional 364 days, subject to lender agreement. On April 8, 2003, Wisconsin Energy also entered into an unsecured three year $300 million bank back-up credit facility to replace a $500 million credit facility that was expiring. This facility will expire in April 2006.

On June 25, 2003, Wisconsin Electric entered into an unsecured 364 day $250 million bank back-up credit facility to replace a $230 million credit facility that was expiring. The credit facility may be extended for an additional 364 days, subject to lender agreement.

On June 25, 2003, Wisconsin Gas entered into an unsecured 364 day $200 million bank back-up credit facility to replace a $185 million credit facility that was scheduled to expire on December 10, 2003. The credit facility may be extended for an additional 364 days, subject to lender agreement.

29

The following table shows Wisconsin Energy's consolidated capitalization structure at June 30, 2003 and at December 31, 2002:

Capitalization Structure	June 30, 2003		December 31, 2002
	(Millions of Dollars)
Common Equity	$2,261.0	34.7%	$2,139.4	33.5%
Preferred Stock of Subsidiaries	30.4	0.5%	30.4	0.5%
Trust Preferred Securities (a)	200.0	3.1%	200.0	3.1%
Long-Term Debt (including
current maturities)	3,458.8	53.1%	3,070.8	48.0%
Short-Term Debt	558.5	8.6%	953.1	14.9%
Total	$6,508.7	100.0%	$6,393.7	100.0%
	=====	=====	=====	=====
(a) Effective with the adoption of SFAS 150 on July 1, 2003, the Company will       reclassify its Trust Preferred Securities as Long-Term Debt. For further       information, see Note 2 in the Notes to Consolidated Condensed Financial       Statements in Part I, Item 1 of this report.

Access to capital markets at a reasonable cost is determined in large part by credit quality. The following table summarizes the current ratings of the debt securities of Wisconsin Energy and its subsidiaries by Standard & Poor's Ratings Services ("S&P"), Moody's Investors Service ("Moody's") and Fitch Ratings ("Fitch").

	S&P	Moody's	Fitch
Wisconsin Energy Corporation
Commercial Paper	A-2	P-1	F1
Unsecured Senior Debt	BBB+	A2	A
Wisconsin Electric Power Company
Commercial Paper	A-2	P-1	F1+
Secured Senior Debt	A-	Aa2	AA
Unsecured Debt	A-	Aa3	AA-
Preferred Stock	BBB	A2	AA-
Wisconsin Gas Company
Commercial Paper	A-2	P-1	F1+
Unsecured Senior Debt	A-	Aa2	AA-
Wisconsin Energy Capital Corporation
Unsecured Debt	BBB+	A2	A
WEC Capital Trust I
Trust Preferred Securities	BBB-	A3	A-

In February 2003, Moody's placed under review for possible downgrade the security ratings of Wisconsin Energy and Wisconsin Energy Capital Corporation. Moody's also placed under review for possible downgrade the long-term security ratings of Wisconsin Electric and Wisconsin Gas and confirmed the commercial paper rating of Wisconsin Electric and Wisconsin Gas.

S&P's and Fitch's current outlook for Wisconsin Energy and its subsidiaries is stable.

30

Wisconsin Energy believes these security ratings should provide a significant degree of flexibility in obtaining funds on competitive terms. However, these security ratings reflect the views of the rating agencies only. An explanation of the significance of these ratings may be obtained from each rating agency. Such ratings are not a recommendation to buy, sell or hold securities, but rather an indication of creditworthiness. Any rating can be revised upward or downward or withdrawn at any time by a rating agency if it decides that the circumstances warrant the change. Each rating should be evaluated independently of any other rating.

Capital Requirements

Capital requirements during the remainder of 2003 are expected to be principally for capital expenditures. Wisconsin Energy's 2003 annual consolidated capital expenditure budget is approximately $693 million.

Financial Instruments:   Wisconsin Energy is a party to various financial instruments with off-balance sheet risk as a part of its normal course of business, including financial guarantees and letters of credit which support construction projects, commodity contracts and other payment obligations. As of June 30, 2003, the Company's estimated maximum exposure under such agreements has not changed significantly compared to December 31, 2002. The Company continues to believe that the likelihood is remote that material payments will be required under these agreements. For information regarding guarantees the Company has entered into, see Note 7 in the Notes to Consolidated Condensed Financial Statements in Item 1 of Part I of this report.

Contractual Obligations/Commercial Commitments:   The Company's total contractual obligations and other commercial commitments as of June 30, 2003 increased compared with December 31, 2002 due to Wisconsin Energy's sale of $200 million of unsecured Senior Notes and Wisconsin Electric's sale of $635 million of unsecured Debentures. These obligations were offset by the optional redemptions of $425 million of debt securities in June 2003 and customary periodic payments, along with reductions during the first six months of 2003 in obligations and commitments made in the ordinary course of business.

FACTORS AFFECTING RESULTS, LIQUDITY AND CAPITAL RESOURCES

MARKET RISKS AND OTHER SIGNIFICANT RISKS

Commodity Price Risk:   Wisconsin's retail electric fuel cost adjustment procedure mitigates some of Wisconsin Electric's risk of electric fuel cost fluctuation. On a prospective basis, if cumulative fuel and purchased power costs for electric utility operations deviate from a prescribed range when compared to the costs projected in the most recent retail rate proceeding, retail electric rates may be adjusted, subject to risks associated with the regulatory approval process. The PSCW has authorized the inclusion of price risk management financial instruments for the management of the Company's electric fuel-related costs. The PSCW has authorized dollar for dollar recovery for the majority of natural gas costs for the gas utility operations of Wisconsin Electric and Wisconsin Gas through gas cost recovery mechanisms, which mitigate most of the risk of gas cost variations.

Independent Power Project Market Risk:As of June 30, 2003, the Company had approximately $273 million of non-utility energy assets, excluding those held by We Power. Based upon projections of the expected undiscounted cash flows over the useful life of these assets, the Company has concluded that it will recover its costs. However, the values that could be realized if the Company immediately disposed of certain assets are believed to be less than their carrying amounts.

31

Construction Risk:   In December 2002, the PSCW issued a written order granting We Power a Certificate of Public Convenience and Necessity ("CPCN") to commence construction of two 545 megawatt natural gas-based combined cycle generating units on the site of Wisconsin Electric's existing Port Washington, Wisconsin generating station. The order approves key financial terms of leased generation contracts between We Power and Wisconsin Electric including fixed construction costs of the two Port Washington units at $309.6 million and $280.3 million (2001 dollars) subject to escalation at the GDP inflation rate and force majeure and excused events provisions. Project management is subject to a number of risks over which the Company will have limited or no control and which might adversely affect project costs and completion time. These risks include but are not limited to shortages of, or the inability to obtain, labor or materials, the inability o f the general contractor or subcontractors to perform under their contracts, strikes, adverse weather conditions and changes in applicable laws or regulations. If final costs for the construction of the Port Washington generating station exceed the fixed costs allowed in the PSCW order it is unlikely that such excess could be recovered from Wisconsin Electric or its customers.

Credit Rating Risk:   Wisconsin Energy and its subsidiaries do not have any credit agreements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade. Wisconsin Energy and its subsidiaries do have certain agreements in the form of purchased power contracts, energy services contracts and employee benefit plans that could require collateral or termination payments in the event of a credit ratings change to below investment grade. At June 30, 2003, the Company estimates that the potential payments under such agreements that could result from credit rating downgrades totaled approximately $56 million.

UTILITY RATES AND REGULATORY MATTERS

Wisconsin

Fuel Cost Adjustment Procedure:   In February 2003, Wisconsin Electric completed a power supply cost analysis which included updated natural gas cost projections for 2003. Based upon this analysis, the Company determined that projected costs had deviated outside of a range prescribed by the PSCW when compared to fuel and purchased power costs authorized in current rates. As a result, the Company filed a request with the PSCW in February 2003 to increase Wisconsin retail electric rates by $55.0 million annually to recover the forecasted increases in fuel and purchased power costs. Wisconsin Electric received an interim order from the PSCW authorizing an increase of $55.0 million in electric rates in March 2003, subject to refund to the extent the final order authorizes recovery of a lesser amount. The interim order is subject to PSCW audit and final order.

Proceedings on the final order have been concluded. The Company anticipates a final order in the third quarter of 2003. The final order is expected to reflect both actual costs incurred plus a reflection of changes in natural gas prices. Under the fuel rules, Wisconsin Electric would have to refund to customers any over recoveries of fuel costs plus interest at the Company's current authorized rate of return on common equity of 12.2% should the final order be for less than the interim order.

Limited Rate Adjustment Request:   Under the conditions of the PSCW Order authorizing Wisconsin Energy's acquisition of WICOR, Inc., the Company is authorized to seek rate reviews with the PSCW during a five-year rate restriction period that began January 1, 2001 limited to changes in revenue requirements as a result of:

• Governmental mandates;
• Abnormal levels of capital additions required to maintain or improve reliable electric service; and


32

• Major gas lateral projects associated with approved natural gas pipeline construction projects.

On July 2, 2003, the Company filed an application with the PSCW for $90.3 million of total rate adjustments for anticipated 2004 revenue deficiencies associated with (1) costs for the new Port Washington Generating Station being constructed as part of the Power the Future strategy, (2) increased costs linked to changes in Wisconsin's public benefits legislation, (3) costs for construction of the Ixonia Lateral further described below, and (4) costs related to steam utility operations. The filing identifies anticipated revenue deficiencies in 2004 attributable to Wisconsin in the amount of $63.5 million (3.5%) for the electric operations of Wisconsin Electric, $26.2 million (3.9%) for the gas operations of Wisconsin Gas, and $0.6 million (3.9%) for Wisconsin Electric's steam operations. The filing also includes an additional anticipated 2005 Wisconsin revenue deficiency in the amount of $0.4 million (2.6%) for Wisconsin Electric's steam operations. The Company expects to update its filing with the PSCW at the end of 2003 to reflect additional anticipated 2005 revenue deficiencies associated with the Oak Creek Generating Units that are contemplated as part of the Power the Future strategy. The Company anticipates an order from the PSCW on this request in early 2004.

Request for Deferral of Uncollectible Accounts Receivable:   Due to a combination of unusually high natural gas prices, the soft economy within its utility service territories, and limited governmental assistance available to low-income customers, the Company has seen a significant increase in uncollectible accounts receivable. Because of this, the Company sent a letter to the PSCW on July 23, 2003 requesting authority to defer for future rate recovery all bad debt expenses incurred during 2003 in excess of amounts included in current utility rates. The Company estimates such amount to be $21.4 million during 2003. In the letter, the Company stated its intention to suggest a mechanism for recovery of these costs, and to prevent such circumstances from occurring in the future. It is unknown when the PSCW will rule on this request.

Ixonia Lateral:   In April 2003, Wisconsin Gas started construction on the 35-mile Ixonia Lateral, which will connect the Wisconsin Gas distribution system to the Guardian Pipeline. The Ixonia Lateral is expected to provide substantial gas cost savings as well as critical additional pipeline capacity. Wisconsin Gas expects to complete and place the Ixonia Lateral in service in time to allow Wisconsin Gas to access its full contract capacity from Guardian Pipeline in the fourth quarter of 2003. In the event that the Ixonia Lateral is not completed prior to November 2003, Wisconsin Gas would incur additional operating costs for gas to be delivered into its service territory.

On August 24, 2001, Neighbors Standing United, a landowner group, and an individual landowner, filed petitions for review of the PSCW order dated July 25, 2001, which approved Wisconsin Gas' application to construct and operate the Ixonia Lateral. The Jefferson County Circuit Court on November 5, 2002 rendered a decision denying the petitions for review of the PSCW order and request for injunctive relief with one modification by the Court which narrowed the approved pipeline corridor from 800 to 200 feet. In December 2002, the landowner filed a notice of appeal of the Court decision to the Wisconsin Court of Appeals. On June 24, 2003, the Wisconsin Court of Appeals dismissed the landowner's appeal of the Circuit Court decision.

Power the Future - Port Washington:   After receiving approval from the PSCW for the Port Washington project, We Power entered into binding contracts with third parties to secure necessary engineering, design and construction services and major equipment components for the Port Washington Generating Station Unit 1. We Power began construction of the new facility in July 2003 and expects to complete construction by the end of the second quarter of 2005. We Power began collecting certain costs from Wisconsin Electric in the third quarter of 2003 as provided for in leased generation contracts that were signed in May 2003. In January 2003, Wisconsin Electric filed a request with the PSCW to defer costs for recovery in future rates. The PSCW approved the request at an open meeting in April 2003. (See "Limited Rate Adjustment Request" above for further information.) Before beginning

33
construction of Port Washington Generating Station Unit 2, the order from the PSCW authorizing the Port Washington project requires that an updated demand and energy forecast be filed with the PSCW to document market demand for additional generating capacity. The Company intends to file an application with the Federal Energy Regulatory Commission ("FERC") seeking authorization to transfer certain FERC jurisdictional assets from Wisconsin Electric to We Power.

Associated with construction of the Port Washington Generating Station under the Company's Power the Future strategy, Wisconsin Gas received a CPCN from the PSCW in January 2003 authorizing construction of a 16.8 mile gas lateral that will connect the plant to the ANR Pipeline. It will also improve reliability for the natural gas distribution system in the area. The Company received a Chapter 30 wetland permit from the Wisconsin Department of Natural Resources ("WDNR") on July 3, 2003 approving construction of this lateral. The WDNR permitted construction of substantially the entire lateral consistent with the planned route previously approved by the PSCW, with certain exceptions. The Company has modified the planned route pursuant to the WDNR's request and will submit a request to the PSCW, if necessary, for re-approval of the modified route. Including the requested changes, the Company estimates the total cost of the project to be $39.5 million, subject to PSCW appro val. Construction of the lateral is scheduled to begin in spring 2004 and to be completed by late 2004.

Power the Future - Oak Creek:   Implementation of phase two of the Company's Power the Future strategy is subject to a number of regulatory approvals. The Company's application seeking the issuance of a CPCN for the construction of additional generating units at the Company's existing Oak Creek Power Plant site was deemed complete by the PSCW on November 15, 2002. In January 2003, certain intervenors filed with the PSCW a petition for review of the completeness determination seeking its reversal. The PSCW denied the intervenors' petition in April 2003 and established a time schedule for the Oak Creek CPCN hearings. Such intervenors subsequently filed a petition for judicial review of the PSCW's denial on May 16, 2003 in Dane County Circuit Court. Wisconsin Energy believes that the petition has no merit and filed a notice of appearance and statement of position requesting that the petition be dismissed. On June 25, 2003, the Circuit Court dismissed the intervenors' petition and denied the requested injunction to delay the start of the Oak Creek CPCN hearings.

Testimony in connection with the Oak Creek CPCN hearings is being filed pursuant to a schedule set by the Administrative Law Judge. Hearings are scheduled to begin in late August and are scheduled to be completed in September 2003. Wisconsin Energy anticipates receiving a decision from the PSCW on the Oak Creek site no later than November 2003. In April 2003, the PSCW and the WDNR issued a draft joint environmental impact statement on the proposed generating units to be located in Oak Creek. It is anticipated that their final environmental impact study will be issued in early August 2003.

In March 2003, the City of Oak Creek announced that it had entered into an environmental and economic agreement with Wisconsin Energy covering the Company's expansion plans for the Oak Creek Power Plant site. Under such agreement, the City of Oak Creek will receive annual community-impact mitigation payments for each additional generating unit constructed on the Oak Creek site. Such payments are subject to prior approval by the PSCW. Wisconsin Energy's direct obligations under such agreement are not expected to have a material impact on its financial condition or results of operations. In June 2003, the City of Oak Creek issued a conditional use permit allowing new generating station construction activities on the existing Oak Creek site. Wisconsin Energy continues to work with the PSCW and the WDNR to obtain all required permits and project approvals.

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Michigan

Wisconsin Electric:   On March 26, 2003, a group of consumer advocacy groups led by the Michigan Environmental Council (collectively, "MEC") filed a Formal Complaint and Request to Open a Formal Proceeding (the "Complaint") with the Michigan Public Service Commission ("MPSC") naming Wisconsin Electric and four other utilities operating in Michigan as defendants. MEC claims that Wisconsin Electric improperly collects revenues for used nuclear fuel storage and disposal. The amounts of such revenues claimed by MEC to be collected from Michigan customers is between $2.3 million and $11.4 million. MEC requested that the MPSC open a contested case and review the rate making mechanisms for these used nuclear fuel revenues, as well as prospective remedies including ratepayer reductions, long-term mechanisms to ensure that used nuclear fuel revenues do not become stranded and performance or surety bonds to protect Michigan ratepayers. On April 18, 2003, the MPSC certified the Complaint. Wisconsin Electric filed a notice of intent to file claim with the Michigan Court of Claims on May 5, 2003 and a motion to dismiss the complaint with the MPSC on May 30, 2003. MEC filed its answer to Wisconsin Electric's motion to dismiss on July 11, 2003. Wisconsin Electric's management believes that the revenues are properly collected as the collection of such revenues is authorized by the MPSC. The resolution of this matter is not expected to have a material impact on the financial condition or results of operations of the Company or Wisconsin Electric.

ENVIRONMENTAL MATTERS

Mercury Emission Control Rulemaking:   As required by the 1990 amendments to the Federal Clean Air Act, the EPA issued a regulatory determination in December 2000 that utility mercury emissions should be regulated. The EPA is expected to develop draft rules by December 2003 and issue final rules by December 2004. In June 2001, the WDNR independently developed draft mercury emission control rules that would affect electric utilities in Wisconsin. On May 23, 2003, the WDNR released a final draft of the proposed rules, which include mercury emission reductions of 40% by 2010 and 80% by 2015. The rules provide for a multi-emission alternative approach for compliance, but it is not clear if this would apply to the second phase of reductions. On June 25, 2003, the Natural Resources Board approved the rules and will send them to the Wisconsin Legislature. The Company is currently unable to predict the ultimate rules that will be developed and adopted by the EPA or the WDNR, nor is it able to predict the impacts, if any, that the EPA's and WDNR's mercury emission control rulemakings might have on the operations of its existing coal-based generating facilities.

NUCLEAR OPERATIONS

Point Beach Nuclear Plant:   Wisconsin Electric owns two 517-megawatt electric generating units at Point Beach Nuclear Plant in Two Rivers, Wisconsin which are operated by Nuclear Management Company, LLC ("NMC").

On February 11, 2003, the United States Nuclear Regulatory Commission ("NRC") issued an order establishing interim inspection requirements for reactor vessel heads at pressurized water reactors such as Point Beach. The order formally establishes requirements for licensees to implement the provisions of NRC Bulletin 2002-02, Reactor Pressure Vessel Head Penetration Nozzle Inspection Programs, issued on August 9, 2002. The Company plans to replace both reactor vessel heads during the 2005 refueling outages as an alternative to incurring the additional time and costs of these examinations and filed such an application with the PSCW on June 6, 2003. Total capital expenditures to replace the two reactor vessel heads are estimated at approximately $54 million.

35

On April 2, 2003, the NRC issued the results of two special inspections conducted in late 2002 in response to problems identified by Point Beach with the performance of the auxiliary feedwater ("AFW") system recirculation lines. The NRC determined that a potential common mode failure of the AFW pumps due to a loss of instrument air is a "red" finding that will not be treated as an old design issue. The NRC inspections identified that corrective actions did not prevent subsequently identified problems related to AFW design, including the potential for plugging of recirculation orifices. The NRC has also preliminarily determined that this issue is a "red" finding. NMC attended a regulatory conference with the NRC in June 2003 to provide additional information and discuss the significance of the findings. The NRC plans to conduct a supplemental inspection at Point Beach in three phases to occur from July through September 2003 to determine further follow-up actions, if any. The Company is currentl y unable to estimate the additional impact that may result.

CAUTIONARY FACTORS

This report and other documents or oral presentations contain or may contain forward-looking statements made by or on behalf of Wisconsin Energy. Such statements are based upon management's current expectations and are subject to risks and uncertainties that could cause Wisconsin Energy's actual results to differ materially from those contemplated in the statements. Readers are cautioned not to place undue reliance on the forward-looking statements. When used in written documents or oral presentations, the terms "anticipate," "believe," "estimate," "expect," "forecast," "objective," "plan," "possible," "potential," "project" and similar expressions are intended to identify forward-looking statements. In addition to the assumptions and other factors referred to specifically in connection with such statements, factors that could cause Wisconsin Energy's actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following:

• Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related or terrorism-related damage; availability of electric generating facilities; unscheduled generation outages, or unplanned maintenance or repairs; unanticipated changes in fossil fuel, nuclear fuel, purchased power, gas supply or water supply costs or availability due to higher demand, shortages, transportation problems or other developments; nonperformance by electric energy or natural gas suppliers under existing power purchase or gas supply contracts; nuclear or environmental incidents; resolution of used nuclear fuel storage and disposal issues; electric transmission or gas pipeline system constraints; unanticipated organizational structure or key personnel changes; collective bargaining agreements with union employees or work stoppages; inflation rates; or demographic and economic factors affecting the utility service territories or operating environment.

• Regulatory factors such as unanticipated changes in rate-setting policies or procedures; unanticipated changes in regulatory accounting policies and practices; industry restructuring initiatives; transmission system operation and/or administration initiatives; recovery of costs of previous investments made under traditional regulation; recovery of costs associated with adoption of changed accounting standards; required changes in facilities or operations to reduce the risks or impacts of potential terrorist activities; required approvals for new construction; changes in the United States Nuclear Regulatory Commission's regulations related to Point Beach Nuclear Plant or a permanent repository for used nuclear fuel; changes in the United States Environmental Protection Agency's regulations as well as regulations from the Wisconsin or Michigan Departments of Natural Resources, including but not limited to, regulations relating to the release of emissions from fossil-fueled power plants such as carbon dioxi de, sulfur dioxide, nitrogen oxide, small particulates or mercury; the siting approval process for new generation and transmission facilities; or changes in the regulations from the Wisconsin Department of Natural Resources related to the siting approval process for new pipeline construction.

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• Unexpected difficulties or unanticipated effects of the qualified five-year electric and gas rate freeze ordered by the Public Service Commission of Wisconsin as a condition of its approval in 2000 of the merger of Wisconsin Energy Corporation and WICOR, Inc.

• The changing electric and gas utility environment as market-based forces replace strict industry regulation and other competitors enter the electric and gas markets resulting in increased wholesale and retail competition.

• Consolidation of the industry as a result of the combination and acquisition of utilities in the Midwest, nationally and globally.

• Restrictions imposed by various financing arrangements and regulatory requirements on the ability of its subsidiaries to transfer funds to Wisconsin Energy in the form of cash dividends, loans or advances.

• Factors which impede execution of Wisconsin Energy's Power the Future strategy, including receipt of necessary state and federal regulatory approvals; local opposition to siting of new generating facilities; obtaining the investment capital from outside sources necessary to implement the strategy; and risk associated with construction of the Power the Future facilities on time and within budget.

• Changes in social attitudes regarding the utility and power industries.

• Customer business conditions including demand for their products or services and supply of labor and material used in creating their products and services.

• The cost and other effects of legal and administrative proceedings, settlements, investigations and claims, and changes in those matters, including the final outcome of litigation with insurance carriers to recover costs and expenses associated with the Giddings & Lewis Inc. / City of West Allis lawsuit against Wisconsin Electric.

• Factors affecting the availability or cost of capital such as changes in interest rates; the Company's capitalization structure; market perceptions of the utility industry, the Company or any of its subsidiaries; or security ratings.

• Federal, state or local legislative factors such as changes in tax laws or rates; changes in trade, monetary and fiscal policies, laws and regulations; electric and gas industry restructuring initiatives; changes in the Price-Anderson Act; or changes in environmental laws and regulations.

• Authoritative generally accepted accounting principle or policy changes from such standard setting bodies as the Financial Accounting Standards Board and the Securities and Exchange Commission.

• Unanticipated technological developments that result in competitive disadvantages and create the potential for impairment of existing assets.

• Possible risks associated with non-utility diversification, such as general economic conditions; competition; operating risks; dependence upon certain suppliers and customers; the cyclical nature of property values that could affect real estate investments; unanticipated changes in environmental or energy regulations; timely regulatory approval without onerous conditions of potential acquisitions or divestitures; risks associated with minority investments, where there is a limited ability to control the development, management or operation of the project; and the risk of higher interest costs associated with potentially reduced securities ratings by independent rating agencies as a result of these and otherfactors.

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• Legislative or regulatory restrictions or caps on non-utility acquisitions, investments or projects, including the state of Wisconsin's amended public utility holding company law.

• Factors affecting foreign operations, including foreign governmental actions; foreign economic and currency risks; political instability; and unanticipated changes in foreign environmental regulations.

• Other business or investment considerations that may be disclosed from time to time in Wisconsin Energy's Securities and Exchange Commission filings or in other publicly disseminated written documents.

Wisconsin Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

*****

For certain other information which may impact Wisconsin Energy's future financial condition or results of operations, see Item 1, Financial Statements -- "Notes to Consolidated Condensed Financial Statements," in Part I of this report as well as Item 1, Legal Proceedings, in Part II of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information concerning commodity price risk, independent power project market risk, credit rating risk and construction risk at Wisconsin Energy Corporation, see Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations -- "Factors Affecting Results, Liquidity and Capital Resources -- Market Risks and Other Significant Risks" in Part I of this report and Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations -- "Factors Affecting Results, Liquidity and Capital Resources -- Market Risks and Other Significant Risks" in Part I of Wisconsin Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2003. For information concerning other market risk exposures, see Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations -- "Factors Affecting Results, Liquidity and Capital Resources - Market Risks and Other Significant Risks," in Part I I of Wisconsin Energy's 2002 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures:   The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

Internal Control Over Financial Reporting:   There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under

38
the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The following should be read in conjunction with Item 3, Legal Proceedings, in Part I of Wisconsin Energy's 2002 Annual Report on Form 10-K and Item 1, Legal Proceedings, in Part II of Wisconsin Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2003.

In addition to those legal proceedings discussed in its reports to the SEC, the Company is currently, and from time to time, subject to claims and suits arising in the ordinary course of business. Although the results of such legal proceedings cannot be predicted with certainty, the Company's management, after consultation with legal counsel, believes that the ultimate resolution of these proceedings will not have a material adverse effect on the financial statements of the Company and its subsidiaries.

ENVIRONMENTAL MATTERS

Columbia Propane Lawsuit:   In 1999, Wisconsin Gas was sued by Columbia Propane LP in the Circuit Court of Wood County, Wisconsin for an estimated $5 million in clean up costs related to a manufactured gas plant site in Marshfield, Wisconsin. The gas plant was owned and operated by People's Gas until 1960 when Wisconsin Gas acquired the assets of People's Gas subject to the terms of an Asset Purchase Agreement. In 1962, Wisconsin Gas sold the site to Columbia Propane. Columbia Propane asserted in the lawsuit that Wisconsin Gas stood in the shoes of People's Gas and was liable for environmental liabilities. Wisconsin Gas contested the liability and filed a motion for summary judgment contending that as a matter of law it was not liable for the clean up costs. The judge granted Wisconsin Gas' motion for summary judgment and dismissed the complaint, but on December 28, 2001, the Wisconsin Court of Appeals reversed the trial court and remanded the matter back for trial on the issue as to whether the parties intended tort liability to be assumed by Wisconsin Gas under the terms of the Asset Purchase Agreement. In April 2002, the Wisconsin Supreme Court granted a Petition for Review filed by Wisconsin Gas, and oral arguments were held on January 15, 2003. On May 13, 2003, the Wisconsin Supreme Court reversed the Court of Appeals' decision. The Supreme Court determined that the trial court correctly dismissed the lawsuit against Wisconsin Gas.

EPA Information Requests:   Wisconsin Electric received requests between 2000 and 2002 for information from the EPA regional offices pursuant to Section 114(a) of the Clean Air Act. For further information, see "Note 9 -- Commitments and Contingencies" in the Notes to Consolidated Condensed Financial Statements in Item 1 of Part I of this report.

UTILITY RATES AND REGULATORY MATTERS

Power the Future:   See Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations - "Factors Affecting Results, Liquidity and Capital Resources" in Part I of this report for information concerning recent PSCW actions related to the Company's Power the Future strategy.

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See Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations - "Factors Affecting Results, Liquidity and Capital Resources" in Part I of this report for information concerning rate matters in the jurisdictions where Wisconsin Electric, Wisconsin Gas and Edison Sault do business and for information concerning nuclear operations at Wisconsin Electric's Point Beach Nuclear Plant.

OTHER MATTERS

Lorenzo Peterson vs. Sta-Rite:   On September 4, 2001, a lawsuit was commenced against Sta-Rite in the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County, Florida. Lorenzo Peterson, a minor, is seeking damages for the personal injuries he sustained when he was trapped under water after placing his hand in the main drain on the bottom of a pool. Trial commenced on July 21, 2003 and is ongoing. The amount of damages the plaintiff will seek is not yet determinable, but may be substantial. However, the Company is vigorously defending the plaintiff's claims and believes that it has adequate insurance to cover a judgment against Sta-Rite. The Company is currently unable to determine the impact, if any, that may result.

Stray Voltage:    In recent years, several actions by dairy farmers have been commenced or claims made against Wisconsin Electric for loss of milk production and other damages to livestock allegedly caused by stray voltage resulting from the operation of its electrical system. Two such actions are currently pending.

On July 11, 1996, the PSCW issued its final order regarding the stray voltage policies of Wisconsin's investor-owned utilities. The order clarified the definition of stray voltage, affirmed the level at which utility action is required, and appropriately placed some of the responsibility for this issue in the hands of the customer. Additionally, the order established a uniform stray voltage tariff which delineates utility responsibility and provides for the recovery of costs associated with unnecessary customer demanded services.

On June 25, 2003, the Wisconsin Supreme Court upheld a Court of Appeals decision that affirmed a jury's verdict against Wisconsin Electric awarding $1.2 million to the plaintiffs in a stray voltage lawsuit. The Wisconsin Supreme Court rejected the argument that if a utility company's measurement of stray voltage is below the PSCW "level of concern," such company cannot be found negligent in stray voltage cases. The Supreme Court decision held that PSCW regulations regarding stray voltage were only minimum standards to be considered by a jury in stray voltage litigation. However, the Supreme Court remanded back to the trial court its requirement imposed on Wisconsin Electric to replace a cable with an ungrounded distribution line.

The claims made against Wisconsin Electric in these matters are not expected to have a significant impact on the financial statements of the Company and its subsidiaries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At Wisconsin Energy's 2003 Annual Meeting of Stockholders held on April 30, 2003, shareholders voted on the following items with the following results:

Item 1 -- Election of Directors for Terms Expiring in 2006:   The Board of Directors' nominees named below were elected as directors by the indicated votes and percentages cast for each nominee. Directors are elected by a plurality of the votes cast by the shares entitled to vote. Any shares not voted, whether

40
by withheld authority, broker non-votes or otherwise, have no effect in the election of directors. There was no solicitation in opposition to the nominees proposed in the Proxy Statement.

Name of Nominee	For		Withheld
John F. Bergstrom	70,275,037	(70.6%)	29,316,888	(29.4%)
Barbara L. Bowles	70,426,349	(70.7%)	29,165,576	(29.3%)
Willie D. Davis	70,307,533	(70.6%)	29,284,392	(29.4%)

Of 116,157,282 voting shares outstanding as of the February 21, 2003 record date for the annual meeting, 99,591,925 shares (85.7% of the shares outstanding) were represented at the meeting.

Further information concerning these matters, including the names of Directors whose terms as a director continued after the meeting, is contained in Wisconsin Energy's Proxy Statement dated March 12, 2003 with respect to the 2003 Annual Meeting of Stockholders.

ITEM 5. OTHER INFORMATION

2004 ANNUAL MEETING DATE; DEADLINES FOR SHAREHOLDER PROPOSALS

Wisconsin Energy Corporation's 2004 Annual Meeting of Stockholders will be held on May 5, 2004.

• Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the deadline for submitting shareholder proposals for inclusion in Wisconsin Energy's proxy statement and form of proxy for the 2004 Annual Meeting is November 13, 2003.

• The date after which notice of a shareholder proposal submitted outside of the processes of Rule 14a-8 is considered untimely is February 25, 2004. Under Wisconsin Energy's advance notice bylaw, such a proposal must be received no earlier than January 26, 2004 (100 days before the May 5, 2004 scheduled date of the Annual Meeting) and no later than February 25, 2004 (70 days before such scheduled date).

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a. EXHIBITS

The following Exhibits are filed or furnished with or incorporated by reference in this Form 10-Q report:

Exhibit No.

4	Instruments defining the rights of security holders, including indentures
4.1	Securities Resolution No. 5 of Wisconsin Electric Power Company, dated as of May 1, 2003, under the Indenture for Debt Securities, dated as of December 1, 1995, between Wisconsin Electric Power Company and U.S. Bank National Association (successor to Firstar Trust Company), as Trustee. (Incorporated herein by reference to Exhibit 4.47 filed with Post-Effective Amendment No. 1 to Wisconsin Electric Power Company's Registration Statement on Form S-3 (File No. 333-101054) filed May 6, 2003).
10	Material Contracts
10.1	Executive Deferred Compensation Plan of Wisconsin Energy Corporation, effective January 1, 2001, and as amended and restated as of January 1, 2002, and as further amended on March 1, 2002 and April 29, 2003.
10.2	Directors' Deferred Compensation Plan of Wisconsin Energy Corporation, effective January 1, 1987, and as restated as of January 1, 1996 and as further amended as of April 29, 2003.
10.3	Senior Officer Employment and Non-Compete Agreement between Wisconsin Energy Corporation and Allen L. Leverett, effective July 1, 2003.
10.4	Letter Agreement by and between Richard R. Grigg and Wisconsin Energy Corporation dated July 23, 2003.
10.5	Senior Officer Employment and Non-Compete Agreement between Wisconsin Energy Corporation and Gale E. Klappa, effective April 14, 2003. (Incorporated herein by reference to Exhibit 10.1 to Wisconsin Energy Corporation's 3/31/03 Form 10-Q.)
10.6	Letter Agreement by and between Paul Donovan and Wisconsin Energy Corporation dated April 27, 2003. (Incorporated herein by reference to Exhibit 10.2 to Wisconsin Energy Corporation's 3/31/03 Form 10-Q.)
31	Rule 13a-14(a) / 15d-14(a) Certifications
31.1	Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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Exhibit No.

32	Section 1350 Certifications
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b. REPORTS ON FORM 8-K

A Current Report on Form 8-K dated as of April 28, 2003 was filed by Wisconsin Energy on April 28, 2003 to report that Paul Donovan, Executive Vice President and Chief Financial Officer for Wisconsin Energy Corporation, Wisconsin Electric Power Company and Wisconsin Gas Company, has decided to retire in early 2004 relinquishing as of June 30, 2003 all positions he has held with Wisconsin Energy and its subsidiaries and will remain with the Company as a special advisor to the Chief Executive Officer until his retirement.

A Current Report on Form 8-K dated as of April 29, 2003 was filed by Wisconsin Energy on April 29, 2003 with a copy of a press release announcing that Wisconsin Electric had entered into an agreement with the United States Environmental Protection Agency and United States Department of Justice to significantly reduce air emissions from its coal-fired generating facilities.

A Current Report on Form 8-K dated as of April 30, 2003 was furnished by Wisconsin Energy pursuant to Item 12, Results of Operations and Financial Condition, with a copy of the press release announcing its financial results for the first quarter of 2003.

A Current Report on Form 8-K dated as of May 15, 2003 was filed by Wisconsin Energy on May 22, 2003 announcing that Wisconsin Electric's Presque Isle Power Plant in Michigan's Upper Peninsula was forced into a controlled shut down as a result of flooding that occurred at the plant.

A Current Report on Form 8-K dated as of June 20, 2003 was filed by Wisconsin Energy on June 20, 2003, with a copy of the press release announcing that Allen L. Leverett was named Chief Financial Officer of Wisconsin Energy Corporation, Wisconsin Electric Power Company and Wisconsin Gas Company effective July 1, 2003.

No other reports on Form 8-K were filed by Wisconsin Energy during the quarter ended June 30, 2003.

A Current Report on Form 8-K dated as of July 25, 2003 was filed by Wisconsin Energy on July 25, 2003 to report that Richard R. Grigg has decided to retire effective March 1, 2004 relinquishing as of July 31, 2003 the titles of President of Wisconsin Electric Power Company and President and Chief Operating Officer of Wisconsin Gas Company and all directorships with Wisconsin Energy Corporation and its subsidiaries, remaining as Executive Vice President of Wisconsin Energy and Chief Operating Officer of Wisconsin Electric Power Company.

A Current Report on Form 8-K dated as of July 31, 2003 was furnished by Wisconsin Energy pursuant to Item 12, Results of Operations and Financial Condition, with a copy of the press release announcing its financial results for the second quarter of 2003.

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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 thereunto duly authorized.

	WISCONSIN ENERGY CORPORATION
	(Registrant)
	/s/STEPHEN P. DICKSON
Date: August 1, 2003	Stephen P. Dickson, Controller, Chief Accounting Officer and duly authorized officer

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EX-10

                                	Exhibit 10.1








                  WISCONSIN ENERGY CORPORATION



              EXECUTIVE DEFERRED COMPENSATION PLAN
                          PLAN DOCUMENT



          Originally Effective January 1, 2001, and as
           Amended and Restated as of January 1, 2002
           and as Further Amended as of April 29, 2003



                        TABLE OF CONTENTS

                                                             Page

            PURPOSE

ARTICLE 1   DEFINITIONS

ARTICLE 2   SELECTION, ENROLLMENT, ELIGIBILITY
     2.1     Selection by Committee
     2.2     Enrollment Requirements
     2.3     Eligibility; Commencement of Participation
     2.4     Termination of Participation and/or Deferrals

ARTICLE 3   DEFERRAL COMMITMENTS/COMPANY
            MATCHING/CREDITING/TAXES
     3.1     Maximum Deferral
     3.2     Election to Defer; Effect of Election Form
     3.3     Withholding of Annual Deferral Amounts
     3.4     Annual Company Contribution Amount
     3.5     Annual Company Matching Amount
     3.6     Stock Option Amount
     3.7     Restricted Stock Amount
     3.8     Rollover Amount
     3.9     Investment of Trust Assets
     3.10    Sources of Stock
     3.11    Vesting
     3.12    Crediting/Debiting of Account Balances
     3.13    FICA and Other Taxes
     3.14    Distributions

ARTICLE 4   IN SERVICE PAYOUT; UNFORESEEABLE FINANCIAL
            EMERGENCIES; WITHDRAWAL ELECTION
     4.1     In Service Payout
     4.2     Other Benefits Take Precedence Over In Service
     4.3     Withdrawal Payout/Suspensions for Unforeseeable
             Financial Emergencies
     4.4     Withdrawal Election

ARTICLE 5   RETIREMENT BENEFIT
     5.1     Retirement Benefit
     5.2     Payment of Retirement Benefit
     5.3     Death Prior to Completion of Retirement Benefit
     5.4     Special "Make Whole" Benefits

ARTICLE 6   PRE-RETIREMENT SURVIVOR BENEFIT
     6.1     Pre-Retirement Survivor Benefit
     6.2     Payment of Pre-Retirement Survivor Benefit

ARTICLE 7   TERMINATION BENEFIT
     7.1     Termination Benefit
     7.2     Payment of Termination Benefit

ARTICLE 8   DISABILITY WAIVER AND BENEFIT
     8.1     Disability Waiver
     8.2     Continued Eligibility; Disability Benefit

ARTICLE 9   BENEFICIARY DESIGNATION
     9.1     Beneficiary
     9.2     Beneficiary Designation; Change
     9.3     Acknowledgment
     9.4     No Beneficiary Designation
     9.5     Doubt as to Beneficiary
     9.6     Discharge of Obligations

ARTICLE 10  LEAVE OF ABSENCE
     10.1    Paid Leave of Absence
     10.2    Unpaid Leave of Absence

ARTICLE 11  TERMINATION, AMENDMENT OR MODIFICATION
     11.1    Termination
     11.2    Amendment
     11.3    Effect of Payment

ARTICLE 12  ADMINISTRATION
     12.1    Committee Duties
     12.2    Administration Upon Change In Control
     12.3    Agents
     12.4    Binding Effect of Decisions
     12.5    Indemnity of Committee
     12.6    Employer Information
     12.7    Coordination with Other Benefits

ARTICLE 13  CLAIMS PROCEDURES
     13.1    Presentation of Claim
     13.2    Notification of Decision
     13.3    Review of a Denied Claim
     13.4    Decision on Review
     13.5    Legal Action

ARTICLE 14  TRUST
     14.1    Establishment of the Trust
     14.2    Interrelationship of the Plan and the Trust
     14.3    Distributions From the Trust

ARTICLE 15  MISCELLANEOUS
     15.1    Status of Plan
     15.2    Unsecured General Creditor
     15.3    Employer's Liability
     15.4    Nonassignability
     15.5    Not a Contract of Employment
     15.6    Furnishing Information
     15.7    Terms
     15.8    Captions
     15.9    Governing Law
     15.10   Notice
     15.11   Successors
     15.12   Validity
     15.13   Incompetent
     15.14   Court Order
     15.15   Distribution in the Event of Taxation
     15.16   Insurance
     15.17   Legal Fees To Enforce Rights After Change in Control
     15.18   Payout Under Special Circumstances



		   WISCONSIN ENERGY CORPORATION

              EXECUTIVE DEFERRED COMPENSATION PLAN

                    Effective January 1, 2001
       (and as Amended and Restated as of January 1, 2002
          and as Further Amended as of April 29, 2003)

                             Purpose

     The purpose of this Plan is to provide specified benefits to
a select group of management and highly compensated Employees who
contribute materially to the continued growth, development and
future business success of Wisconsin Energy Corporation, a
Wisconsin corporation, and its subsidiaries, if any, that sponsor
this Plan.  This Plan shall be unfunded for tax purposes and for
purposes of Title I of ERISA.

                            ARTICLE 1

                           Definitions

     For purposes of this Plan, unless otherwise clearly apparent
from the context, the following phrases or terms shall have the
following indicated meanings:

1.1  "Account Balance" shall mean, with respect to a Participant,
     a credit on the records of the Employer equal to the sum of
     (i) the Deferral Account balance, (ii) the vested Company
     Contribution Account balance, (iii) the Company Matching Account
     balance, (iv) the Stock Option Account balance, (v) the
     Restricted Stock Account balance and (vi) the Rollover Account
     balance.  The Account Balance, and each other specified account
     balance, shall be a bookkeeping entry only and shall be utilized
     solely as a device for the measurement and determination of the
     amounts to be paid to a Participant, or his or her designated
     Beneficiary, pursuant to this Plan.

1.2  "Annual or Long-Term Performance Award" shall mean any
     compensation, in addition to Base Annual Salary relating to
     services performed during any calendar year, whether or not paid
     in such calendar year or included on the form W-2 for such
     calendar year, payable to a Participant as an Employee under any
     Employer's annual performance award and cash incentive plans,
     including any long-term incentive plans as may be in existence
     from time to time, but excluding Severance Payments, stock
     options, restricted stock and SERP Payments.

1.3  "Annual Company Contribution Amount" shall mean, for any one
     Plan Year, the amount determined in accordance with Section 3.4.

1.4  "Annual Company Matching Amount" for any one Plan Year shall
     be the amount determined in accordance with Section 3.5.

1.5  "Annual Deferral Amount" shall mean that portion of a
     Participant's Base Annual Salary, Annual or Long-Term Performance
     Award, Severance Payments and/or SERP Payments that a Participant
     elects to have, and is deferred, in accordance with Article 3,
     for any one Plan Year.  Except with respect to Severance Payments
     and SERP Payments, in the event of a Participant's Retirement,
     Disability (if deferrals cease in accordance with Section 8.1),
     death or a Termination of Employment prior to the end of a Plan
     Year, such year's Annual Deferral Amount shall be the actual
     amount withheld prior to such event.

1.6  "Annual Installment Method" shall be an annual installment
     payment over the number of years selected by the Participant, not
     to exceed 20, in accordance with this Plan, as set forth below.
     In each case for purposes of determining the amount of the
     installment payment to be made, the Account Balance of the
     Participant shall be valued as of the close of business on the
     last business day of the year preceding the year for which the
     payment is to be made.  Each annual installment, regardless of
     the method selected, shall be payable within 60 days after
     February 1st of each year.  The alternative methods allowable are
     as follows:

     (a)  Fractional Method.  The annual installment shall be
          calculated by multiplying this balance by a fraction, the
          numerator of which is one, and the denominator of which is the
          remaining number of annual payments due the Participant.  By way
          of example, if the Participant elects a 10 year Annual
          Installment Method, the first payment shall be 1/10 of the
          Account Balance, calculated as described in this definition.  The
          following year, the payment shall be 1/9 of the Account Balance,
          calculated as described in this definition.

     (b)  Percentage or Fixed Dollar Method.  The annual installment
	  shall be calculated by multiplying this balance in the case of
	  the percentage method, by the percentage selected by the
	  Participant and paying out the resulting amount, or in the case
	  of the fixed dollar method, by paying out the fixed dollar amount
	  selected by the Participant, for the number of years selected by
	  the Participant.  However, in the event the dollar amount
	  selected is greater than the Account Balance in any given year,
	  the entire Account Balance will be distributed.  Further,
	  regardless of the method selected by the Participant, the final
	  installment payment will include 100% of the then remaining
	  Account Balance.

     (c)  Special Installment Method.  Under this alternative method,
	  the Participant selects both the number of years and a specified
	  interest rate, which is then used to calculate a level fixed
	  dollar amount of annual payouts which would exhaust the Account
	  Balance over such number of years, if actual performance of the
	  elected Measurement Funds were identical to the specified
	  interest rate.  However, in recognition of the fact that such
	  exact conformity is unlikely, in the event the calculated level
	  fixed dollar amount is greater than the Account Balance in any
	  given year, the entire Account Balance will be distributed.
	  Further, the final installment payment will include 100% of the
	  then remaining Account Balance.

1.7  "Annual Restricted Stock Amount" shall mean, with respect to
     a Participant for any one Plan Year, the value of unvested
     restricted stock under any Company stock incentive plan, deferred
     in accordance with Section 3.7 of this Plan.

1.8  "Annual Stock Option Amount" shall mean, with respect to a
     Participant for any one Plan Year, the amount of Qualifying Gains
     deferred on Eligible Stock Option exercise in accordance with
     Section 3.6 of this Plan, calculated using the average of the
     reported high and low prices for the Stock as of the day of
     exercise (if a business day) or as of the next following business
     day.

1.9  "Base Annual Salary" shall mean the annual cash compensation
     relating to services performed during any calendar year, whether
     or not paid in such calendar year or included on the form W-2 for
     such calendar year, excluding Severance Payments, SERP Payments,
     performance awards, bonuses, commissions, overtime, fringe
     benefits, stock options, relocation expenses, incentive payments,
     non-monetary awards, directors fees and other fees, automobile
     and other allowances paid to a Participant for employment
     services rendered (whether or not such allowances are included in
     the Employee's gross income).  Base Annual Salary shall be
     calculated before reduction for compensation voluntarily deferred
     or contributed by the Participant pursuant to all qualified or
     non-qualified plans of any Employer and shall be calculated to
     include amounts not otherwise included in the Participant's gross
     income under Code Sections 125, 402(e)(3), 402(h), or 403(b)
     pursuant to plans established by any Employer; provided, however,
     that all such amounts will be included in compensation only to
     the extent that, had there been no such plan, the amount would
     have been payable in cash to the Employee.

1.10 "Beneficiary" shall mean one or more persons, trusts,
     estates or other entities, designated in accordance with
     Article 9, that are entitled to receive benefits under this Plan
     upon the death of a Participant.

1.11 "Beneficiary Designation Form" shall mean the form
     established from time to time by the Committee that a Participant
     completes, signs and returns to the Committee to designate one or
     more Beneficiaries.

1.12 "Board" shall mean the board of directors of the Company.

1.13 "Change in Control" with respect to the Company shall mean
     the occurrence of any one of the events set forth below:

     (a)  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 affiliates)
          representing 20% or more of the combined voting power of the
          Company's then outstanding securities, excluding any Person who
          becomes such a Beneficial Owner in connection with a transaction
          described in clause (i) of paragraph (c) below; or

     (b)  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

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

     (d)  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

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


    For purposes of this Change in Control definition, the terms
    set forth below shall have the following meanings:

          "Beneficial Owner" shall have the meaning set forth in
          Rule 13d-3 under the Exchange Act.

          "Exchange Act" shall mean the Securities Exchange Act
          of 1934, as amended from time to time.

          "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 affiliates, (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.

1.14 "Chief Executive Officer or CEO" shall mean the Chief
     Executive Officer of the Company.

1.15 "Claimant" shall have the meaning set forth in Section 13.1.

1.16 "Code" shall mean the Internal Revenue Code of 1986, as it
     may be amended from time to time.

1.17 "Committee" shall mean an internal administrative committee
     appointed by the CEO to administer the Plan described in
     Article 12.

1.18 "Company" shall mean Wisconsin Energy Corporation, a
     Wisconsin corporation, and any successor to all or substantially
     all of the Company's assets or business.

1.19 "Company Contribution Account" shall mean (i) the sum of the
     Participant's Annual Company Contribution Amounts, plus (ii)
     amounts credited in accordance with all the applicable crediting
     provisions of this Plan that relate to the Participant's Company
     Contribution Account, less (iii) all distributions made to the
     Participant or his or her Beneficiary pursuant to this Plan that
     relate to the Participant's Company Contribution Account.

1.20 "Company Matching Account" shall mean (i) the sum of all of
     a Participant's Annual Company Matching Amounts, plus (ii)
     amounts credited in accordance with all the applicable crediting
     provisions of this Plan that relate to the Participant's Company
     Matching Account, less (iii) all distributions made to the
     Participant or his or her Beneficiary pursuant to this Plan that
     relate to the Participant's Company Matching Account.

1.21 "Deduction Limitation" shall mean the following described
     limitation on a benefit that may otherwise be distributable
     pursuant to the provisions of this Plan.  Except as otherwise
     provided, this limitation shall be applied to all distributions
     that are "subject to the Deduction Limitation" under this Plan.
     If an Employer determines in good faith prior to a Change in
     Control that there is a reasonable likelihood that any
     compensation paid to a Participant for a taxable year of the
     Employer would not be deductible by the Employer solely by reason
     of the limitation under Code Section 162(m), then to the extent
     deemed necessary by the Employer to ensure that the entire amount
     of any distribution to the Participant pursuant to this Plan
     prior to the Change in Control is deductible, the Employer may
     defer all or any portion of a distribution under this Plan.  Any
     amounts deferred pursuant to this limitation shall continue to be
     credited/debited with additional amounts in accordance with
     Section 3.13 below, even if such amount is being paid out in
     installments.  The amounts so deferred and amounts credited
     thereon shall be distributed to the Participant or his or her
     Beneficiary (in the event of the Participant's death) at the
     earliest possible date, as determined by the Employer in good
     faith, on which the deductibility of compensation paid or payable
     to the Participant for the taxable year of the Employer during
     which the distribution is made will not be limited by Section
     162(m), or if earlier, the effective date of a Change in Control.
     Notwithstanding anything to the contrary in this Plan, the
     Deduction Limitation shall not apply to any distributions made
     after a Change in Control.

1.22 "Deferral Account" shall mean (i) the sum of all of a
     Participant's Annual Deferral Amounts, plus (ii) amounts credited
     in accordance with all the applicable crediting provisions of
     this Plan that relate to the Participant's Deferral Account, less
     (iii) all distributions made to the Participant or his or her
     Beneficiary pursuant to this Plan that relate to his or her
     Deferral Account.

1.23 "Disability" shall mean a period of disability during which
     a Participant is unable to perform the material duties of his or
     her job, as determined by the Committee in its sole discretion.

1.24 "Disability Benefit" shall mean the benefit set forth in
     Article 8.

1.25 "Election Form" shall mean the form established from time to
     time by the Committee that a Participant completes, signs and
     returns to the Committee to make an election under the Plan.  To
     the extent authorized by the Committee, such form may be
     electronic or set forth in some other media and need not be
     signed by a Participant.

1.26 "Eligible Stock Option" shall mean one or more non-qualified
     stock option(s) selected by the Committee in its sole discretion
     and exercisable under a plan or arrangement of any Employer
     permitting a Participant under this Plan to defer gain with
     respect to such option.

1.27 "Employee" shall mean a person who is an employee of any
     Employer.

1.28 "Employer(s)" shall mean the Company and/or any of its
     subsidiaries (now in existence or hereafter formed or acquired)
     that have been selected by the Board to participate in the Plan
     and have adopted the Plan as a sponsor.

1.29 "ERISA" shall mean the Employee Retirement Income Security
     Act of 1974, as amended from time to time.

1.30 "In Service Payout" shall mean the payout set forth in
     Section 4.1.

1.31 "Inactive Participant" shall mean an individual who at one
     point was a Participant in the Plan or a predecessor
     non-qualified deferred compensation plan and has an undistributed
     Account Balance, but is no longer eligible to make deferral
     elections under the Plan by reason of such individual's removal
     under Section 2.4 hereof or otherwise.

1.32 "401(k) Plan" shall refer to all tax-qualified profit
     sharing plans maintained by an Employer that incorporate
     provisions for elective deferral contributions by participating
     employees in accordance with Section 401(k) of the Code.

1.33 "Participant" shall mean any Employee or Retired Employee of
     any Employer (i) who is selected to participate in the Plan and
     who has not been removed, and (ii) who commences participation in
     the Plan.  A spouse or former spouse of a Participant shall not
     be treated as a Participant in the Plan or have an account
     balance under the Plan, even if he or she has an interest in the
     Participant's benefits under the Plan as a result of applicable
     law or property settlements resulting from legal separation or
     divorce.

1.34 "Plan" shall mean the Company's Executive Deferred
     Compensation Plan.

1.35 "Plan Year" shall mean a period beginning on January 1 of
     each calendar year and continuing through December 31 of such
     calendar year.

1.36 "Pre-Retirement Survivor Benefit" shall mean the benefit set
     forth in Article 6.

1.37 "Qualifying Gain" shall mean the value accrued upon exercise
     of an Eligible Stock Option (i) using a Stock-for-Stock payment
     method and (ii) having an aggregate fair market value in excess
     of the total Stock purchase price necessary to exercise the
     option.  In other words, the Qualifying Gain upon exercise of an
     Eligible Stock Option equals the total market value of the shares
     (or share equivalent units) acquired minus the total stock
     purchase price.  For example, assume a Participant elects to
     defer the Qualifying Gain accrued upon exercise of an Eligible
     Stock Option to purchase 1000 shares of Stock at an exercise
     price of $20 per share, when Stock has a current fair market
     value of $25 per share.  Using the Stock-for-Stock payment
     method, the Participant would deliver 800 shares of Stock (worth
     $20,000) to exercise the Eligible Stock Option and receive, in
     return, 800 shares of Stock plus a Qualifying Gain (in this case,
     in the form of an unfunded and unsecured promise to pay money or
     property in the future) equal to $5,000 (i.e., the current value
     of the remaining 200 shares of Stock).

1.38 "Restricted Stock" shall mean unvested shares of restricted
     stock selected by the Committee in its sole discretion and
     awarded to the Participant under any Company stock incentive
     plan.

1.39 "Restricted Stock Account" shall mean (i) the sum of the
     Participant's Annual Restricted Stock Amounts, plus (ii) amounts
     credited/debited in accordance with all the applicable
     crediting/debiting provisions of this Plan that relate to the
     Participant's Restricted Stock Account, less (iii) all
     distributions made to the Participant or his or her Beneficiary
     pursuant to this Plan that relate to the Participant's Restricted
     Stock Account.

1.40 "Restricted Stock Amount" shall mean, for any grant of
     Restricted Stock, the amount of such Restricted Stock deferred in
     accordance with Section 3.7 of this Plan, calculated using the
     average of the reported high and low prices for the Stock as of
     the day such Restricted Stock would otherwise vest (if a business
     day) or as of the next following business day.

1.41 "Retirement", "Retire(s)" or "Retired" shall mean, with
     respect to an Employee, severance from employment from all
     Employers for any reason other than a leave of absence, death or
     Disability on or after the attainment of age fifty-five (55).

1.42 "Retirement Benefit" shall mean the benefit set forth in
     Article 5.

1.43 "Rollover Account" shall mean a Participant's Rollover
     Amount, plus amounts credited/debited in accordance with all the
     applicable crediting/debiting provisions of this Plan that relate
     to the Participant's Rollover Account, less all distributions
     made to the Participant or his or her Beneficiary pursuant to
     this Plan that relate to the Participant's Rollover Account.

1.44 "Rollover Amount" shall mean the amount determined in
     accordance with Section 3.8.

1.45 "Severance Payments" shall mean any post-termination amounts
     due a Participant in any calendar year under the Company's
     Special Executive Severance Policy or Executive Severance Policy
     or under any change in control contract between the Company and
     an Employee, on account of his or her Termination of Employment,
     whether or not paid in such calendar year or included on the form
     W-2 for such calendar year.

1.46 "SERP Payments" shall mean any distributions due a
     Participant in any calendar year resulting from his or her
     participation in the Wisconsin Energy Corporation Supplemental
     Executive Retirement Plan, whether or not paid in such calendar
     year or included on the form W-2 for such calendar year.

1.47 "Stock" shall mean Wisconsin Energy Corporation common
     stock.

1.48 "Stock Option Account" shall mean the sum of (i) the
     Participant's Annual Stock Option Amounts, plus (ii) amounts
     credited/debited in accordance with all the applicable
     crediting/debiting provisions of this Plan that relate to the
     Participant's Stock Option Account, less (iii) all distributions
     made to the Participant or his or her Beneficiary pursuant to
     this Plan that relate to the Participant's Stock Option Account.

1.49 "Stock Option Amount" shall mean, for any Eligible Stock
     Option, the amount of Qualifying Gains deferred in accordance
     with Section 3.6 of this Plan, calculated using the average of
     the reported high and low prices for the Stock as of the day of
     exercise (if a business day) or as of the next following business
     day.

1.50 "Termination Benefit" shall mean the benefit set forth in
     Article 7.

1.51 "Termination of Employment" shall mean the severing of
     employment with all Employers, voluntarily or involuntarily, for
     any reason other than Retirement, Disability, death or an
     authorized leave of absence.  However, if an Employee leaves
     employment with all Employers in connection with such Employee's
     immediate transfer to and acceptance of employment with another
     employer which is providing services essential to the utilities
     business conducted by the Company or an Employer, then such
     Employee will not be considered to have incurred a Termination of
     Employment.  Instead, such Employee will be deemed to be
     continuing in the employ of an Employer for purposes of the Plan
     for so long as such Employee remains in the employ of such other
     employer and such employer continues to provide such services.

1.52 "Trust" shall mean the Wisconsin Energy Corporation Rabbi
     Trust Agreement dated December 1, 2000 between the Company and
     The Northern Trust Company, and as amended from time to time.

1.53 "Unforeseeable Financial Emergency" shall mean an
     unanticipated emergency that is caused by an event beyond the
     control of the Participant that would result in severe financial
     hardship to the Participant resulting from (i) a sudden and
     unexpected illness or accident of the Participant or a dependent
     of the Participant, (ii) a loss of the Participant's property due
     to casualty, or (iii) such other extraordinary and unforeseeable
     circumstances arising as a result of events beyond the control of
     the Participant, all as determined in the sole discretion of the
     Committee.

			     ARTICLE 2

               Selection, Enrollment, Eligibility

2.1  Selection by Committee.  Participation in the Plan shall be
     limited to a select group of management and highly compensated
     Employees of the Employers, as determined by the Committee.  From
     that group, the Committee shall select Employees to participate
     in the Plan.

2.2  Enrollment Requirements.  As a condition to participation,
     each selected Employee shall complete, execute and return to the
     Committee an Election Form and any other relevant forms within
     such time periods as the Committee may prescribe.  In addition,
     the Committee shall establish from time to time such other
     enrollment requirements as it determines in its sole discretion
     are necessary.

2.3  Eligibility; Commencement of Participation.  Provided an
     Employee selected to participate in the Plan has met all
     enrollment requirements set forth in this Plan and required by
     the Committee, including returning all required documents to the
     Committee within the specified time period, that Employee shall
     commence participation in the Plan on the first day of the month
     following the month in which the Employee completes all
     enrollment requirements.

2.4  Termination of Participation and/or Deferrals.  If the
     Committee determines in good faith that a Participant no longer
     qualifies as a member of a select group of management or highly
     compensated employees, as membership in such group is determined
     in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of
     ERISA, the Committee shall have the right, in its sole
     discretion, to take any or all of the following actions:
     (i) terminate any deferral election the Participant has made for
     the remainder of the Plan Year in which the Participant's
     membership status changes, (ii) prevent the Participant from
     making future deferral elections and/or (iii) immediately
     distribute the Participant's then Account Balance as a
     Termination Benefit and terminate the Participant's participation
     in the Plan.  The Committee may also remove a Participant from
     continuing participation in the Plan at any time in its sole
     discretion and such individual shall become an Inactive
     Participant to the extent he or she still has an undistributed
     Account Balance.

                            ARTICLE 3

      Deferral Commitments/Company Matching/Crediting/Taxes

3.1  Maximum Deferral.

     (a)  Base Annual Salary, Annual or Long-Term Performance Award,
          Severance Payments SERP Payments and/or Make Whole Pension
          Supplements.  For each Plan Year, a Participant may elect to
          defer, as his or her Annual Deferral Amount, Base Annual Salary,
          Annual or Long-Term Performance Award, Severance Payments, SERP
          Payments and/or Make Whole Pension Supplements (as referenced in
          Section 5.4(d)) up to the following maximum percentages for each
          deferral elected:

                      Deferral                		Maximum
                                            	       Percentage
            Base Annual Salary                 		  100%
            Annual or Long-Term Performance Award	  100%
            Severance Payments                		  100%
            SERP Payments                    		  100%
            Make Whole Pension Supplements     		  100%

          Notwithstanding the foregoing, the Participant may
          change his or her election with respect to the Base
          Annual Salary portion of the Annual Deferral Amount on
          a monthly basis, by timely delivering to the Committee
          in accordance with its rules and procedures, before the
          end of the month preceding the month for which the
          election will be effective, a new Election Form for
          such purpose.  Notwithstanding any other provision of
          this Plan, any Election form or revocation will be
          given prospective effect only and may not affect prior
          deferrals.

     (b)  For each Eligible Stock Option, a Participant may elect to
          defer, as his or her Stock Option Amount, up to 100% of the
          Qualifying Gain with respect to exercise of the Eligible Stock
          Option.  Stock Option Amounts may also be limited by other terms
          or conditions set forth in the stock option plan or agreement
          under which such options are granted.

     (c)  A Participant may elect to defer up to 100% of his or her
          Restricted Stock.

3.2  Election to Defer; Effect of Election Form.

     (a)  Base Annual Salary.  A Participant's Election Form with
          respect to Base Annual Salary shall be filed with the Committee
          in accordance with its rules, but in no event later than the end
          of the month preceding the month for which the election will be
          effective.  As noted above in Section 3.1(a), a Participant may
          subsequently change or revoke his or her election with respect to
          Base Annual Salary, but only with prospective effect only, to
          take effect as of the first day of the month immediately
          following receipt of the new Election Form by the Committee.
          Therefore, any Election Form shall be irrevocable with respect to
          the portion of Base Annual Salary deferral during the period of
          time covered by such Form.

     (b)  Annual or Long-Term Performance Award.  A Participant's
          Election Form with respect to Annual Performance Award shall be
	  filed with the Committee in accordance with its rules, but in no
	  event later than November 30th of any calendar year with respect
	  to all or any part of an Annual Performance Award that might
	  otherwise become payable on account of a Participant's services
 	  during such calendar year and in all events prior to the time
	  that the Participant has earned an absolute and unconditional
	  right to payment.  Any such Election Form which is on file with
	  the Committee on November 30th of a calendar year shall become
	  irrevocable as of such date.  When and as a Long-Term Performance
	  Award program is put into place, the Committee will establish
	  rules for a Participant's Election Form similar to the above, and
	  providing that such Election Form must be filed in all events
	  prior to the time that the Participant has earned an absolute and
	  unconditional right to payment and that such Election Form may
	  not be revoked by the Participant once the filing deadline date
	  has passed.

     (c)  Severance Payments.  A Participant's Election Form with
	  respect to Severance Payments shall be filed with the Committee
	  in accordance with its rules and the rules for a prior deferral
	  election set forth in the documents or contracts providing for
	  Severance Payments.

     (d)  SERP Payments.  A Participant's Election Form with respect
	  to SERP Payments shall be filed with the Committee in accordance
	  with its rules and any rules for a prior deferral election set
 	  forth in the SERP.  However, notwithstanding any contrary
	  provisions in the SERP, a Participant who is a participant in the
	  SERP shall be allowed to both elect that a lump sum method of
	  payment be made to such Participant at the time when payments are
	  to commence under the terms of the SERP (the "SERP Starting
	  Date") for the SERP "A" or "B" benefits or that such a lump sum
	  be determined and then credited to such Participant's Account
	  Balance under this Plan as of the SERP Starting Date with such
	  Participant to be treated as having then "Retired" for purpose of
	  this Plan (so that the Participant's election for a method of
	  payout under Article 5 shall govern), provided that such an
	  Election Form filed by the Participant with regard to the SERP is
	  submitted to the Committee at least one year prior to the SERP
	  Starting Date.

     (e)  Make Whole Pension Supplements.  Section 5.4(d) provides the
	  rules applicable to Election Forms regarding Make Whole Pension
	  Supplements.

     (f)  Stock Option Deferral.  For an election to defer gain upon
	  an Eligible Stock Option exercise to be valid:  (i) a separate
	  Election Form must be completed and signed by the Participant
	  with respect to the Eligible Stock Option; (ii) the Election Form
	  must be timely delivered to the Committee and accepted by the
	  Committee at least six (6) months prior to the date the
	  Participant elects to exercise the Eligible Stock Option; and
	  (iii) the Eligible Stock Option must be exercised using an actual
	  or phantom Stock-for-Stock payment method.

     (g)  Restricted Stock.  For an election to defer Restricted Stock
 	  Amounts to be valid:  (i) a separate irrevocable Election Form
	  must be completed and signed by the Participant, with respect to
	  such Restricted Stock; and (ii) such Election Form must be timely
	  delivered to the Committee and accepted by the Committee at least
	  six (6) months prior to the date such Restricted Stock vests
	  under the terms of the Company's stock incentive plan.

3.3  Withholding of Annual Deferral Amounts.  For each Plan Year,
     the Base Annual Salary portion of the Annual Deferral Amount
     shall be withheld from each regularly scheduled Base Annual
     Salary payroll in equal amounts, as adjusted from time to time
     for increases and decreases in Base Annual Salary.  The Annual or
     Long-Term Performance Award, Severance Payments and SERP Payments
     portion of the Annual Deferral Amount shall be withheld at the
     time the Annual or Long-Term Performance Award, Severance
     Payments and/or SERP Payments are or otherwise would be paid to
     the Participant, whether or not this occurs during the Plan Year
     itself.

3.4  Annual Company Contribution Amount.  For each Plan Year, an
     Employer, in its sole discretion, may, but is not required to,
     credit any amount it desires to any Participant's Company
     Contribution Account under this Plan, which amount shall be for
     that Participant the Annual Company Contribution Amount for that
     Plan Year.  The amount so credited to a Participant may be
     smaller or larger than the amount credited to any other
     Participant, and the amount credited to any Participant for a
     Plan Year may be zero, even though one or more other Participants
     receive an Annual Company Contribution Amount for that Plan Year.
     The Annual Company Contribution Amount, if any, shall be credited
     as of the last day of the Plan Year, unless the Employer in its
     sole discretion determines otherwise.  If a Participant is not
     employed by an Employer as of the last day of a Plan Year other
     than by reason of his or her Retirement or death while employed,
     any Annual Company Contribution Amount previously credited for
     that Plan Year shall be forfeited and become zero, unless the
     Employer in its sole discretion determines otherwise.

3.5  Annual Company Matching Amount.  A Participant's Annual
     Company Matching Amount for any Plan Year shall be made for any
     Participant who elects some deferral of Base Annual Salary into
     this Plan.  Prior to January 1, 2002, the Annual Company Matching
     Amount will depend on the structure of the relevant Employer's
     401(k) Plan which applies to the Participant.  To determine the
     Annual Company Matching Amount, it is necessary to identify the
     relevant Employer 401(k) Plan matching rate (the "Matching Rate")
     and the percentage of compensation subject to such matching rate
     (the "Eligible Compensation Percentage").  From and after
     January 1, 2002, the Annual Company Matching Amount will be
     determined by using the Matching Rate and the Eligible
     Compensation Percentage that applies to the Wisconsin Energy
     Corporation Employee Retirement Savings Plan, regardless of the
     actual 401(k) plan, if any, that applies to the Participant.  In
     the Wisconsin Energy Corporation Employee Retirement Savings
     Plan, the Matching Rate is 50% and the Eligible Compensation
     Percentage is 6%.  The formula for a Participant's Annual Company
     Matching Amount is:  the Matching Rate multiplied times "X",
     where X is the difference between the Eligible Compensation
     Percentage times the Participant's gross compensation eligible
     for matching under the relevant Employer 401(k) Plan before any
     reduction for deferrals of Base Annual Salary under this Plan and
     without regard to any Code limitations, and the Participant's
     "Deemed Maximum Elective Deferral ("DMED").  The DMED for any
     Participant is equal to the Eligible Compensation Percentage
     multiplied by such Participant's gross compensation eligible for
     matching under the relevant Employer 401(k) Plan, reduced by
     deferrals of Base Annual Salary under this Plan [but limited to
     the maximum compensation that can be considered under Code
     Section 401(a)(17) ($200,000 for 2002)], provided that the result
     must be limited to the maximum allowable elective deferral
     permitted under Code Section 402(g) ($11,000 for 2002) plus the
     maximum allowable catch-up contribution under Code Section 414(v)
     ($1,000 for 2002).

     For example, assume 2 Participants, A, who is age 50 or
     older and eligible for catch-up contributions, and B, who is
     under 50, with gross Annual Base Salary of $300,000 and
     $150,000, who each choose to defer 6% into this Plan.  Both
     are covered or deemed to be covered by the Wisconsin Energy
     Corporation Employee Retirement Savings Plan.  The Annual
     Company Matching Amount for each under this Plan is
     calculated as follows:

            Matching Rate 50% Eligible Compensation Percentage 6%

  DMED for A is 6% x $200,000 or $12,000
  DMED for B is 6% x [$150,000 - 9,000] or $8,460
  Annual Matching Amount for A is 50% of "X,"
          where "X" is 6% x $300,000 or  	$18,000
                           less DMED of  	 12,000
						-------
						 $6,000
  Therefore A's Annual Matching Amount is
	  50% x $6,000 or  $3,000

  Annual Matching Amount for B is 50% of "X,"
          where "X" is 6% of $150,000 or	 $9,000
                            less DMED of  	  8,460
           					 ------
  						    540
  Therefore B's Annual Matching Amount is
          50% x $540 or $270

     For the year 2001 only, notwithstanding any other provision
     of this Plan, a Participant will automatically receive a
     Company Matching Amount equal to X times Y, where X equals
     the Matching Rate multiplied by the Eligible Compensation
     Percentage, and Y equals the amount of any Annual
     Performance Award, without regard to whether any part of the
     same is deferred under this Plan.

     If in any case the relevant 401(k) Plan does not operate on
     the calendar year, the Committee in its sole discretion
     shall determine how the Participant's Annual Company
     Matching Amount shall be determined for any Participant who
     elects some deferral of Base Annual Salary into this Plan.
     The Committee may modify the method of calculating the
     Annual Matching Amount to take into account periodic credits
     rather than annual calculations, consistent with the
     principles expressed herein.

3.6  Stock Option Amount.  Subject to any terms and conditions
     imposed by the Committee Participants may elect to defer, under
     the Plan, Qualifying Gains attributable to an Eligible Stock
     Option exercise.  Stock Option Amounts shall be credited/debited
     to the Participant on the books of the Employer at the time Stock
     would otherwise have been delivered to the Participant pursuant
     to the Eligible Stock Option exercise, but for the election to
     defer.

3.7  Restricted Stock Amount.  Subject to any terms and
     conditions imposed by the Committee, Participants may elect to
     defer, under the Plan, Restricted Stock Amounts.  Restricted
     Stock Amounts shall be credited to the Participant on the books
     of the Employer in connection with such an election at the time
     the Restricted Stock would otherwise vest under the terms of the
     Company's stock incentive plan, but for the election to defer.

3.8  Rollover Amount.  If a Participant or an individual was a
     participant in the Company's Executive Deferred Compensation
     Plan, the Wisconsin Gas Company Restoration Plan or any other
     non-qualified deferred compensation plan of the Company or its
     affiliates (the "Prior Plans") and had an undistributed account
     balance in such plans as of a relevant determination date, and
     such person has become a Participant or Inactive Participant in
     this Plan, then such account balance, determined as of that date,
     shall be transferred on such date to and be added to the
     Participant's or Inactive Participant's Account Balance under
     this Plan, and shall thereafter, subject to any necessary
     consents due to the terms of the Prior Plans, be governed by the
     terms and conditions of this plan, and shall be referred to as
     the "Rollover Amount."  However, notwithstanding any other
     provisions of this Plan, the Account Balance of any Inactive
     Participant (or beneficiary thereof) who was not a continuing
     employee of an Employer on or after January 1, 2001 shall
     continue to be administered and distributed as provided under the
     terms of the relevant Prior Plan (unless and to the extent
     otherwise determined by the Committee in its sole discretion in a
     manner consistent with the terms of the relevant Prior Plan).
     Further, the Account Balance of any individual who was a
     participant in any Prior Plan who continues as an employee of an
     employer on or after January 1, 2001 and has become a Participant
     or Inactive Participant in this Plan will remain subject to the
     distribution method elected under the relevant Prior Plan unless
     and until a new distribution method has been elected under this
     Plan and become effective.

3.9  Investment of Trust Assets.  The Trustee of the Trust shall
     be authorized, upon written instructions received from the
     Committee or investment manager appointed by the Committee, to
     invest and reinvest the assets of the Trust in accordance with
     the applicable Trust Agreement, including the disposition of
     Stock and reinvestment of the proceeds in one or more investment
     vehicles designated by the Committee.

3.10 Sources of Stock.  If Stock is credited under the Plan in
     the Trust in connection with an Eligible Stock Option exercise or
     in connection with a deferral of Restricted Stock, the shares so
     credited shall be deemed to have originated, and shall be counted
     against the number of shares reserved, under such other plan,
     program or arrangement.

3.11 Vesting.

     (a)  A Participant shall at all times be 100% vested in his or
          her Deferral Account, Stock Option Account, Restricted Stock
          Account, Company Matching Account and Rollover Account.

     (b)  A Participant shall be vested in his or her Company
	  Contribution Account in accordance with the vesting schedule, if
	  any, contained in his or her Election Form.

     (c)  In the event of a Change in Control, a Participant's Company
	  Contribution Account shall immediately become 100% vested.

     (d)  Notwithstanding subsection (c), the vesting schedule for a
	  Participant's Company Contribution Account shall not be
	  accelerated to the extent that the Committee determines that such
	  acceleration would cause the deduction limitations of Section
	  280G of the Code to become effective.  In the event that all of a
	  Participant's Company Contribution Account is not vested pursuant
	  to such a determination, the Participant may request independent
	  verification of the Committee's calculations with respect to the
	  application of Section 280G.  In such case, the Committee must
	  provide to the Participant within 15 business days of such a
	  request an opinion (which need not be unqualified) of the
	  Company's independent auditors which opinion shall state that any
	  limitation in the vested percentage hereunder is necessary to
	  avoid the limits of Section 280G and contain supporting
	  calculations.  The cost of such opinion shall be paid for by the
	  Company.

3.12 Crediting/Debiting of Account Balances.  Subject to Section
     3.12(f) and (g) below, and accordance with, and subject to, the
     rules and procedures that are established from time to time by
     the Committee in its sole discretion, amounts shall be credited
     or debited to a Participant's Account Balance in accordance with
     the following rules:

     (a)  Election of Measurement Funds.  Subject to Section 3.12(f)
          and (g) below, a Participant, in connection with his or her
          initial deferral election in accordance with Section 3.2 above,
          shall elect, on the Election Form, one or more Measurement
          Fund(s) (as described in Section 3.12(c) below) to be used to
          determine the additional amounts to be credited to his or her
          Account Balance, unless changed in accordance with the next
          sentence.  Subject to Section 3.12(f) and (g) below, commencing
          with the Participant's commencement of participation in the Plan
          and continuing thereafter, the Participant may (but is not
          required to) elect, by submitting an Election Form to the
          Committee that is accepted by the Committee, to add or delete one
          or more Measurement Fund(s) to be used to determine the
          additional amounts to be credited to his or her Account Balance,
          or to change the portion of his or her Account Balance allocated
          to each previously or newly elected Measurement Fund.  If an
          election is made in accordance with the previous sentence, it
          shall apply thereafter in accordance with the rules of the
          Committee for all subsequent periods in which the Participant
          participates in the Plan, unless changed in accordance with the
          previous provisions.

     (b)  Proportionate Allocation.  In making any election described
	  in Section 3.12(a) above, the Participant shall specify on the
	  Election Form, in increments of one percentage point (1%), the
	  percentage of his or her Account Balance to be allocated to a
	  Measurement Fund (as if the Participant was making an investment
	  in that Measurement Fund with that portion of his or her Account
	  Balance).

     (c)  Measurement Funds.  Subject to Section 3.12(f) and (g)
	  below, the Participant may elect one or more of the following
	  measurement funds (the "Measurement Funds"), for the purpose of
	  crediting additional amounts to his or her Account Balance:  (i)
	  any Measurement Fund selected by the WEC Investment Trust Policy
	  Committee from time to time; (ii) Prime Rate Fund (described as a
	  mutual fund 100% invested in a hypothetical debt instrument which
	  earns interest at an annualized interest rate equal to the "Prime
	  Rate" as reported each business day by the Wall Street Journal,
	  with interest deemed reinvested in additional units of such
	  hypothetical debt instrument); or (iii) a Company Stock
	  Measurement Fund (described as a mutual fund 100% invested in
	  shares of Company Stock, with dividends deemed reinvested in
	  additional shares of Company Stock).

          Subject to Section 3.13(f) and (g) below, as necessary,
          the WEC Investment Trust Policy Committee may, in its
          sole discretion, discontinue, substitute or add a
          Measurement Fund, subject to such advance notice to
          Participants as it determines.

     (d)  Crediting or Debiting Method.  The performance of each
          elected Measurement Fund (either positive or negative) will be
          determined by the Committee, in its reasonable discretion, based
          on the performance of the Measurement Funds themselves.  A
          Participant's Account Balance shall be credited or debited on a
          periodic basis based on the performance of each Measurement Fund
          selected by the Participant, as determined by the Committee in
          its sole discretion.  The Participant's Annual Company Matching
          Amount shall be credited to his or her Company Matching Account
          for purposes of this Section 3.12(d) no later than the end of the
          month following the month to which such amount relates.  The
          Participant's Annual Stock Option Amount(s) shall be credited to
          his or her Stock Option Account no later than the close of
          business on the first business day after the day on which the
          Eligible Stock Option was exercised or otherwise disposed of.
          The Participant's Annual Restricted Stock Amount shall be
          credited to his or her Restricted Stock Account no later than the
          close of business on the first business day after the day on
          which the Participant would have become vested in and received
          the Restricted Stock, but for the election to defer.

     (e)  No Actual Investment.  Notwithstanding any other provision
	  of this Plan that may be interpreted to the contrary, the
	  Measurement Funds are to be used for measurement purposes only,
	  and a Participant's election of any such Measurement Fund, the
	  allocation to his or her Account Balance thereto, the calculation
	  of additional amounts and the crediting or debiting of such
	  amounts to a Participant's Account Balance shall not be
	  considered or construed in any manner as an actual investment of
	  his or her Account Balance in any such Measurement Fund.  In the
	  event that the Company or the Trustee (as that term is defined in
	  the Trust), in its own discretion, decides to invest funds in any
	  or all of the Measurement Funds, no Participant shall have any
	  rights in or to such investments themselves.  Without limiting
	  the foregoing, a Participant's Account Balance shall at all times
	  be a bookkeeping entry only and shall not represent any
	  investment made on his or her behalf by the Company or the Trust;
	  the Participant shall at all times remain an unsecured creditor
 	  of the Company.

     (f)  Special Rule for Stock Option Account and Restricted Stock
	  Account.  Notwithstanding any provision of this Plan that may be
	  construed to the contrary, the Participant's Stock Option Account
	  and Restricted Stock Account must be deemed invested in the
 	  Company Stock Measurement Fund at all times prior to distribution
	  from this Plan.  Further, the Participant's Stock Option Account
	  and the Restricted Stock Account must be distributed from this
	  Plan in the form of cash.

     (g)  Special Considerations for Participants Subject to
	  Section 16 of the Securities Exchange Act of 1934.  Prior to
	  March 1, 2002, different rules pertained with respect to amounts
	  allocated to the Company Stock Measurement Fund. The Company
	  Matching Account had to be deemed invested in the Company Stock
	  Measurement Fund at all times prior to distribution from the
 	  Plan.  Such restriction was dropped from the Plan effective as of
	  March 1, 2002.  In order that any election by a Participant who
	  is an officer or director subject to the reporting requirements
	  and trading restrictions of Section 16 of the Securities Exchange
	  Act of 1934 ("Section 16") will conform to Section 16, such a
	  Participant should consult with the designated individual at the
	  Company responsible for Section 16 reporting and compliance prior
	  to making any election to move any part of his or her Account
	  Balance into or out of the Company Stock Measurement Fund.  In
	  general, compliance with Section 16 will require that:

          (i)  Any election to move any part of an Account Balance into or
               out of the Company Stock Measurement Fund (including any election
               to receive a payout in service under Section 4.1, in the event of
               Unforeseeable Financial Emergency under Section 4.3, or under the
               10% withdrawal penalty rules of Section 4.4), which elections
               will be deemed made for purposes of these provisions only as of
               the date of such deemed investment transfers or proposed payouts,
               should only be effected if made at least six (6) months following
               the date of the most recent "opposite way" election (as explained
               below) made by such Participant with respect to this Plan or any
               plan of the Company or its affiliates that also constituted a
               "discretionary transaction" within the meaning of
               Rule 16b-3(b)(1) under Section 16.

	  (ii) An "opposite way" election means (x) in case of an election
	       by a Participant to move any part of an Account Balance into the
	       Company Stock Measurement Fund, an election that was a
	       disposition of Company Stock or an interest in a phantom Company
	       Stock fund or similar security, or (y) in case of any election by
	       a Participant to move any part of an Account Balance out of the
	       Company Stock Measurement Fund, an election that was an
	       acquisition of Company Stock or an interest in a phantom Company
	       Stock fund or similar security.

	 (iii) Any change of election to an alternative payout period
	       made under Section 5.2 or 7.2 by such a Participant may only be
	       given effect if it is approved by the Compensation Committee or
	       the Board of Directors of the Company.

     The Company reserves the right to impose such restrictions as it determines
     to be appropriate, in is sole discretion, on any elections, dispositions or
     other matters under this Plan relating to the Company Stock Measurement
     Fund in order to comply with or qualify for exemption under Section 16.

3.13 FICA and Other Taxes.

     (a)  Annual Deferral Amounts.  For each Plan Year in which an
          Annual Deferral Amount is being withheld from a Participant or an
          Annual Company Matching Amount is Credited to a Participant, the
          Participant's Employer(s) shall withhold from that portion of the
          Participant's non-deferred compensation, in a manner determined
          by the Employer(s), the Participant's share of FICA and other
          employment taxes on such amounts.  If necessary, the Committee
          may reduce the Annual Deferral Amount in order to comply with
          this Section 3.13.

    (b)  Company Contribution Amounts.  When a participant becomes
	 vested in a portion of his or her Company Contribution Account,
	 the Participant's Employer(s) shall withhold from the
	 Participant's non-deferred compensation, in a manner determined
	 by the Employer(s), the Participant's share of FICA and other
	 employment taxes.  If necessary, the Committee may reduce the
	 vested portion of the Participant's Company Contribution Account
	 in order to comply with this Section 3.13.

    (c)  Annual Stock Option Amounts and Annual Restricted Stock
	 Amounts.  For each Plan Year in which an Annual Stock Option
	 Amount or Annual Restricted Stock Amount is being first credited
	 to a Participant's Account Balance, the Participant's Employer(s)
	 shall withhold from that portion of the Participant's
	 non-deferred compensation, in a manner determined by the
	 Employer(s), the Participant's share of FICA and other employment
	 taxes on such Annual Stock Option Amount or Annual Restricted
	 Stock Amount.  If necessary, the Committee may reduce the Annual
	 Stock Option Amount and/or Annual Restricted Stock Amount in
	 order to comply with this Section 3.13.

3.14 Distributions.  The Participant's Employer(s), or the
     trustee of the Trust, shall withhold from any payments made to a
     Participant under this Plan all federal, state and local income,
     employment and other taxes required to be withheld by the
     Employer(s), or the trustee of the Trust, in connection with such
     payments, in amounts and in a manner to be determined in the sole
     discretion of the Employer(s) and the trustee of the Trust.  All
     lump sum payments and final payments of the remaining balance of
     any Account Balance shall be calculated based upon the value of
     the Account Balance determined (unless and until the Company
     chooses another ending valuation date) as of the last business
     day of the calendar year quarter immediately preceding the date
     of payment (the "Ending Valuation Date").  All rights on the part
     of a Participant or any other person to elect or change the
     Measurement Funds under Section 3.12 shall be deemed to have
     ceased as of such Ending Valuation Date and no adjustment in the
     value of an Account Balance shall be considered for any purpose
     under the Plan after such Ending Valuation Date.

                             ARTICLE 4

     In Service Payout; Unforeseeable Financial Emergencies;
                       Withdrawal Election

4.1  In Service Payout.  In connection with and at the time of
     each election to defer an Annual Deferral Amount, a Participant
     may irrevocably elect, on a prospective basis only, to receive a
     future "In Service Payout" from the Plan with respect to such
     Annual Deferral Amount.  Subject to the Deduction Limitation, the
     In Service Payout shall be a lump sum payment in an amount that
     is expressed either as a fixed dollar amount or as a percentage
     of the Annual Deferral Amount plus amounts credited or debited
     thereto, determined at the time that the In Service Payout
     becomes payable (rather than the date of a Termination of
     Employment).  Subject to the Deduction Limitation and the other
     terms and conditions of this Plan, each In Service Payout elected
     shall be paid out during a 90 day period commencing immediately
     after the last day of any Plan Year designated by the Participant
     that is at least two Plan Years after the Plan Year in which the
     Annual Deferral Amount is actually deferred.  By way of example,
     if a two year In Service Payout is elected with respect to an
     Annual Performance Award relating to services in 2002 that would
     otherwise be payable in 2003 but is actually deferred in 2003,
     the two year In Service Payout would become payable during a 90
     day period commencing January 1, 2006.

4.2  Other Benefits Take Precedence Over In Service.  Should an
     event occur that triggers a benefit under Article 5, 6, 7 or 8,
     any Annual Deferral Amount, plus amounts credited or debited
     thereon, that is subject to a In Service Payout election under
     Section 4.1 shall not be paid in accordance with Section 4.1 but
     shall be paid in accordance with the other applicable Article.

4.3  Withdrawal Payout/Suspensions for Unforeseeable Financial
     Emergencies.  If the Participant experiences an Unforeseeable
     Financial Emergency, the Participant may petition the Committee
     to (i) suspend any deferrals required to be made by a Participant
     and/or (ii) subject to the Deduction Limitation, receive a
     partial or full payout from the Plan.  The payout shall not
     exceed the lesser of the Participant's Account Balance,
     calculated as if such Participant were receiving a Termination
     Benefit, or the amount reasonably needed to satisfy the
     Unforeseeable Financial Emergency.  If, subject to the sole
     discretion of the Committee, the petition for a suspension and/or
     payout is approved, suspension shall take effect upon the date of
     approval and any payout shall be made within 90 days of the date
     of approval.

4.4  Withdrawal Election.  Subject to the Deduction Limitation, a
     Participant (or, after a Participant's death, his or her
     Beneficiary) may elect, at any time, to withdraw part or all of
     his or her Account Balance, calculated as if there had occurred a
     Termination of Employment as of the day of the election, less a
     withdrawal penalty equal to 10% of such amount (the net amount
     shall be referred to as the "Withdrawal Amount").  This election
     can be made at any time, before or after Retirement, Disability,
     death or Termination of Employment, and whether or not the
     Participant (or Beneficiary) is in the process of being paid
     pursuant to an installment payment schedule.  If made before
     Retirement, Disability or death, a Participant's Withdrawal
     Amount shall be calculated based on his or her Account Balance as
     if there had occurred a Termination of Employment as of the day
     of the election.  Any partial withdrawal must be at least equal
     to $25,000, or such higher amount as the Committee may establish
     from time to time.  The Participant (or his or her Beneficiary)
     shall make this election by giving the Committee advance written
     notice of the election in a form determined from time to time by
     the Committee.  The Participant (or his or her Beneficiary) shall
     be paid the Withdrawal Amount within 90 days of his or her
     election.

                            ARTICLE 5

                       Retirement Benefit

5.1  Retirement Benefit.  Subject to the Deduction Limitation, a
     Participant who Retires shall receive, as a Retirement Benefit,
     his or her Account Balance.

5.2  Payment of Retirement Benefit.  A Participant, in connection
     with his or her commencement of participation in the Plan, shall
     elect on an Election Form to receive the Retirement Benefit in a
     lump sum or pursuant to An Annual Installment Method.  The
     Participant may annually change his or her election to an
     allowable alternative payout period by submitting a new Election
     Form to the Committee, provided that any such Election Form is
     submitted at least 1 year prior to the Participant's Retirement
     and is accepted by the Committee in its sole discretion.  Any
     change to an alternative payout is also subject to the rules in
     Section 3.12(g)(iii).  The Election Form most recently accepted
     by the Committee shall govern the payout of the Retirement
     Benefit.  If a Participant does not make any election with
     respect to the payment of the Retirement Benefit, then such
     benefit shall be payable in a lump sum.  The lump sum payment
     shall be made, or installment payments shall commence, no later
     than 90 days after the last day of the Plan Year in which the
     Participant Retires.  Any payment made shall be subject to the
     Deduction Limitation.

5.3  Death Prior to Completion of Retirement Benefit.  If a
     Participant dies after Retirement but before the Retirement
     Benefit is paid in full, the Participant's unpaid Retirement
     Benefit payments shall continue and shall be paid to the
     Participant's Beneficiary (a) over the remaining number of years
     and in the same amounts as that benefit would have been paid to
     the Participant had the Participant survived, or (b) in a lump
     sum, if requested by the Beneficiary and allowed in the sole
     discretion of the Committee, that is equal to the Participant's
     unpaid remaining Account Balance.

5.4  Special "Make Whole" Benefits.

     (a)  "Make Whole" Pension Benefit With Respect to Deferrals of
          Base Annual Salary.  Base Annual Salary which is deferred
          pursuant to this Plan cannot be included in the compensation base
          for calculating retirement income under the qualified defined
          benefit pension plans of the Company and its affiliates (the
          "Pension Plans").  Therefore, a "make whole" benefit will be paid
          from this Plan as a pension supplement to or with respect to a
          Participant whose deferrals of Base Annual Salary result in a
          lesser pension payment under the Pension Plans.  Such pension
          supplement shall equal the amount by which such Participant's
          pension under the Pension Plans (calculated for this purpose
          without regard to any limitation or benefits imposed by Section
          415 of the Code, or any limitation on annual compensation imposed
          by Section 401(a)(17) of the Code; hereinafter, the "IRS
          Limitations") was less because deferrals of Base Annual Salary
          under this Plan were not taken into account in the calculation of
          such participant's pension (but the amount of any supplemental
          pension benefit "A" applicable to the Participant under the
          Company's SERP shall be taken into account to avoid any
          duplication of the pension supplement provided hereunder).  This
          section applies to all forms of pension payable under the Pension
          Plans, including pre-retirement death benefits.

     (b)  "Make Whole" Pension Benefit With Regard to Performance and
	  Incentive Awards.  Performance awards under the Company
	  Short-Term Performance Plan and incentive awards made under a
	  former incentive plan of the Company known as the Executive
	  Incentive Compensation Plan are excluded from the compensation
	  base under the Retirement Account Plan, a tax qualified defined
	  benefit plan of Wisconsin Electric Power Company (the "Retirement
	  Account Plan").  Similarly, special awards made from time to time
	  as determined by the Board are likewise excluded.  A "make whole"
	  pension supplement was provided for under the terms of Article
	  IX(2) of the prior Wisconsin Energy Corporation Executive
	  Deferred Compensation Plan as amended and restated as of
	  January 1, 1994 (the "Prior Company Plan") for any Participant in
	  that plan whose pension benefit under the Retirement Account Plan
	  would have been greater had such performance awards, incentive
	  awards or special awards been included in the compensation base
	  of the Retirement Account Plan, calculated without regard to the
	  IRS limitations.  As with Section 5.4(a) above, supplemental
	  pension benefit "A" shall be considered in order to avoid
	  duplication.  It is the intent of this Section to continue to
   	  provide such "make whole" pension supplement and the provisions
	  of such Article IX(2) of the Prior Company Plan are incorporated
	  by reference and continue to apply hereunder, except as modified
	  by other provisions of this Section 5.4.
     (c)  "Make Whole" Long-Term Disability Benefit.  It is the intent
	  of this Plan that a Participant not suffer any loss with respect
	  to a disability benefit under the disability benefit applicable
	  to employees of the Company and its affiliates, if the
	  Participant is eligible for and participating in the long-term
	  disability benefit plan of an Employer (the "LTD" Plan) because
	  of either the exclusion of Base Annual Salary deferred under this
	  Plan from the compensation base under the LTD Plan (the "Salary
	  Deferral Limit") or the special limitation on annual compensation
	  which can be taken into account under the LTD Plan imposed by
	  Section 505(b)(7) of the Code (the "IRS Special Limit").
	  Therefore, in the event such a Participant becomes eligible for
	  and begins to receive a disability benefit from the LTD Plan and
	  the amount of such disability benefit is limited because of the
	  application of the Salary Deferral Limit or the IRS Special
	  Limit, a "make whole" disability benefit shall be paid from this
	  Plan as a supplement to the disability limit paid from the LTD
	  Plan.  Such LTD supplement shall equal the monthly amount by
	  which such Participant's disability benefit under the LTD Plan
	  was less because of the application of the Salary Deferral Limit
	  and the IRS Special Limit.  Such LTD supplement shall commence at
	  the same time as the disability benefit paid under the LTD Plan
	  and continue for so long as such disability benefit is paid.
	  Such LTD supplement shall be paid out of general corporate assets
	  or out of a grantor trust, but not out of any voluntary
	  employees' beneficiary association or trust covered by Section
	  501(c)(9) of the Code.
     (d)  Form of Payment and Deferral Option.  The "make whole"
	  pension supplements provided for in this Section 5.4(a) and (b)
	  shall be payable in lump sum form at the same time as the benefit
	  becomes payable to or with respect to the Participant under the
	  relevant Pension Plan (as to the Section 5.4(a) supplement) or
	  under the Retirement Account plan (as to the Section 5.4(b)
	  supplement).  The terms and conditions of the relevant Pension
	  Plan or the Retirement Account Plan shall provide the governing
	  principles as to the calculation of the pension supplements
	  arising under this Section 5.4.  Notwithstanding the above, a
	  Participant who becomes entitled to a pension supplement pursuant
	  to Section 5.4(a) or (b) will be allowed to elect that the
	  relevant lump sum payment be determined and then credited to such
	  Participant's Account Balance under this Plan as of the date the
	  same would have otherwise been paid (the "Supplement Payment
	  Date") (with such Participant to be treated as having then
	  "Retired" for purposes of this Plan, so that the Participant's
	  election for a method of payout under Article 5 shall govern),
	  provided that such an Election Form filed by the Participant with
	  regard to such pension supplement(s) is submitted to the
	  Committee at least one year prior to the Supplemental Payment
	  Date.
                            ARTICLE 6

                 Pre-Retirement Survivor Benefit

6.1  Pre-Retirement Survivor Benefit.  Subject to the Deduction
     Limitation, the Participant's Beneficiary shall receive a
     Pre-Retirement Survivor Benefit equal to the Participant's
     Account Balance if the Participant dies before he or she Retires,
     experiences a Termination of Employment or suffers a Disability.

6.2  Payment of Pre-Retirement Survivor Benefit.  A Participant,
     in connection with his or her commencement of participation in
     the Plan, shall elect on an Election Form whether the
     Pre-Retirement Survivor Benefit shall be received by his or her
     Beneficiary in a lump sum or pursuant to an Annual Installment
     Method.  The Participant may annually change this election to an
     allowable alternative payout period by submitting a new Election
     Form to the Committee, which form is accepted by the Committee in
     its sole discretion.  The Election Form most recently accepted by
     the Committee prior to the Participant's death shall govern the
     payout of the Participant's Pre-Retirement Survivor Benefit.  If
     a Participant does not make any election with respect to the
     payment of the Pre-Retirement Survivor Benefit, then such benefit
     shall be paid in a lump sum.  Despite the foregoing, if the
     Participant's Account Balance at the time of his or her death is
     less than $25,000, payment of the Pre-Retirement Survivor Benefit
     may be made, in the sole discretion of the Committee, in a lump
     sum.  The lump sum payment shall be made, or installment payments
     shall commence, no later than 90 days after the last day of the
     Plan Year in which the Committee is provided with proof that is
     satisfactory to the Committee of the Participant's death.  Any
     payment made shall be subject to the Deduction Limitation.

                            ARTICLE 7

                       Termination Benefit

7.1  Termination Benefit.  Subject to the Deduction Limitation,
     the Participant shall receive a Termination Benefit, which shall
     be equal to the Participant's Account Balance if a Participant
     experiences a Termination of Employment prior to his or her
     Retirement, death or Disability.

7.2  Payment of Termination Benefit.  A Participant, in
     connection with his or her participation in the Plan, shall elect
     on an Election Form to receive the Termination Benefit in a lump
     sum or over a period of 5 years in annual installments using the
     Fractional Method specified in Section 1.6.  The Participant may
     annually change his or her election to an allowable alternative
     by submitting a new Election Form to the Committee, provided that
     any such Election Form is submitted at least one year prior to
     the Participant's Termination of Employment and is accepted by
     the Committee in its sole discretion.  Any change to an
     alternative payout is also subject to the rules in Section
     3.12(g)(iii).  However, notwithstanding a Participant's election,
     if the Participant's Account Balance at the time of his or her
     Termination of Employment is less than $25,000, payment of his or
     her Termination Benefit shall be paid in a lump sum.  The lump
     sum payment shall be made, or installment payments shall
     commence, no later than 90 days after the last day of the Plan
     Year in which the Participant experiences the Termination of
     Employment.  Any payment made shall be subject to the Deduction
     Limitation.

                            ARTICLE 8

                  Disability Waiver and Benefit

8.1  Disability Waiver.

     (a)  Waiver of Deferral.  A Participant who is determined by the
          Committee to be suffering from a Disability shall be (i) excused
          from fulfilling that portion of the Annual Deferral Amount
          commitment that would otherwise have been withheld from a
          Participant's Base Annual Salary, Annual or Long-Term Performance
          Award, Severance Payments and/or SERP Payments for the Plan Year
          during which the Participant first suffers a Disability and (ii)
          excused from fulfilling any existing unvested Restricted Stock
          Amount or unexercised Stock Option Amount commitments.  During
          the period of Disability, the Participant shall not be allowed to
          make any additional deferral elections, but will continue to be
          considered a Participant for all other purposes of this Plan.

     (b)  Return to Work.  If a Participant returns to employment
	  after a Disability ceases, the Participant may elect to defer an
	  Annual Deferral Amount, Stock Option Amount and Restricted Stock
	  Amount for the Plan Year following his or her return to
	  employment or service and for every Plan Year thereafter while a
	  Participant in the Plan; provided such deferral elections are
	  otherwise allowed and an Election Form is delivered to and
	  accepted by the Committee for each such election in accordance
	  with Section 3.2 above.

8.2  Continued Eligibility; Disability Benefit.  A Participant
     suffering a Disability shall, for benefit purposes under this
     Plan, continue to be considered to be employed and shall be
     eligible for the benefits provided for in Articles 4, 5, 6 or 7
     in accordance with the provisions of those Articles.
     Notwithstanding the above, the Committee shall have the right to,
     in its sole and absolute discretion and for purposes of this Plan
     only, to deem the Participant to have experienced a Termination
     of Employment at any time.  Further, in the case of a Participant
     who is otherwise eligible to Retire, the Committee shall treat
     such Participant as having Retired as soon as practicable after
     such Participant is determined to be suffering a Disability.  In
     either case the Participant shall receive a Disability Benefit
     equal to his or her Account Balance at the time of the
     Committee's determination; provided, however, that should the
     Participant otherwise have been eligible to Retire, he or she
     shall be paid in accordance with Article 5.  If the Disability
     Benefit is not payable in accordance with Article 5, it shall be
     paid in a lump sum within 90 days of the Committee's exercise of
     such right.  Any payment made shall be subject to the Deduction
     Limitation.

                            ARTICLE 9

                     Beneficiary Designation

9.1  Beneficiary.  Each Participant shall have the right, at any
     time, to designate his or her Beneficiary(ies) (both primary as
     well as contingent) to receive any benefits payable under the
     Plan to a beneficiary upon the death of a Participant.  The
     Beneficiary designated under this Plan may be the same as or
     different from the Beneficiary designation under any other plan
     of an Employer in which the Participant participates.

9.2  Beneficiary Designation; Change.  A Participant shall
     designate his or her Beneficiary by completing and signing the
     Beneficiary Designation Form, and returning it to the Committee
     or its designated agent.  A Participant shall have the right to
     change a Beneficiary by completing, signing and otherwise
     complying with the terms of the Beneficiary Designation Form and
     the Committee's rules and procedures, as in effect from time to
     time.  Upon the acceptance by the Committee of a new Beneficiary
     Designation Form, all Beneficiary designations previously filed
     shall be canceled.  The Committee shall be entitled to rely on
     the last Beneficiary Designation Form filed by the Participant
     and accepted by the Committee prior to his or her death.

9.3  Acknowledgment.  No designation or change in designation of
     a Beneficiary shall be effective until received and acknowledged
     in writing by the Committee or its designated agent.

9.4  No Beneficiary Designation.  If a Participant fails to
     designate a Beneficiary as provided in Sections 9.1, 9.2 and 9.3
     above or, if all designated Beneficiaries predecease the
     Participant or die prior to complete distribution of the
     Participant's benefits, then the Participant's designated
     Beneficiary shall be deemed to be his or her surviving spouse.
     If the Participant has no surviving spouse, but was survived by a
     designated Beneficiary who was receiving or was entitled to
     receive distribution but died prior to a complete distribution of
     the Participant's benefits, the benefits remaining shall be
     payable to such designated Beneficiary's estate.  If the
     Participant leaves no surviving spouse and was not survived by a
     designated Beneficiary as provided in the foregoing sentence, the
     benefits remaining shall be payable to the Participant's estate.

9.5  Doubt as to Beneficiary.  If the Committee has any doubt as
     to the proper Beneficiary to receive payments pursuant to this
     Plan, the Committee shall have the right, exercisable in its
     discretion, to cause the Participant's Employer to withhold such
     payments until this matter is resolved to the Committee's
     satisfaction.

9.6  Discharge of Obligations.  The payment of benefits under the
     Plan to a Beneficiary shall fully and completely discharge all
     Employers and the Committee from all further obligations under
     this Plan with respect to the Participant, and that Participant's
     Election Form(s) shall terminate upon such full payment of
     benefits.

                           ARTICLE 10

                        Leave of Absence

10.1 Paid Leave of Absence.  If a Participant is authorized by
     the Participant's Employer for any reason to take a paid leave of
     absence from the employment of the Employer, the Participant
     shall continue to be considered employed by the Employer and the
     Annual Deferral Amount shall continue to be withheld during such
     paid leave of absence in accordance with Section 3.2.

10.2 Unpaid Leave of Absence.  If a Participant is authorized by
     the Participant's Employer for any reason to take an unpaid leave
     of absence from the employment of the Employer, the Participant
     shall continue to be considered employed by the Employer and the
     Participant shall be excused from making deferrals until the
     earlier of the date the leave of absence expires or the
     Participant returns to a paid employment status.  Upon such
     expiration or return, deferrals shall resume for the remaining
     portion of the Plan Year in which the expiration or return
     occurs, based on the deferral election, if any, made for that
     Plan Year.  If no election was made for that Plan Year, no
     deferral shall be withheld.

                           ARTICLE 11

             Termination, Amendment or Modification

11.1 Termination.  Although each Employer anticipates that it
     will continue the Plan for an indefinite period of time, there is
     no guarantee that any Employer will continue the Plan or will not
     terminate the Plan at any time in the future.  Accordingly, each
     Employer reserves the right to discontinue its sponsorship of the
     Plan and/or to terminate the Plan at any time with respect to all
     of its participating Employees, by action of its Board of
     Directors or Compensation Committee.  Upon the termination of the
     Plan with respect to any Employer, the Election Form(s) of the
     affected Participants who are employed by that Employer shall
     terminate.  The terminating Employer may decide that the Account
     Balances of its participating Employees shall continue to be held
     under the provisions of this Plan (but with no further deferrals
     to be made after termination of the Plan by such Employer as to
     its participating Employees) until an event occurs which would
     otherwise cause a payout to be made hereunder.  Any Company
     Contribution amounts which are not fully vested may continue to
     be so held under the Plan, even if other amounts in the Account
     Balances are not so held.  Alternatively, the Employer may
     determine to proceed with distribution of Account Balances of the
     affected Participants determined as if they had experienced a
     Termination of Employment on the date of Plan termination or, if
     Plan termination occurs after the date upon which a Participant
     was eligible to Retire, then with respect to that Participant as
     if he or she had Retired on the date of Plan termination.
     However, if an Employer terminates the Plan as to its
     participating Employees after a Change in Control, the Employer
     shall be required to pay such benefits in a lump sum, except as
     otherwise provided in Section 15.18.  The termination of the Plan
     shall not adversely affect any Participant or Beneficiary who has
     become entitled to the payment of any benefits under the Plan as
     of the date of termination; provided however, that the Employer
     shall have the right to accelerate installment payments without a
     premium or prepayment penalty by paying the Account Balance in a
     lump sum or using fewer years (provided that the present value of
     all payments that will have been received by a Participant at any
     given point of time under the different payment schedule shall
     equal or exceed the present value of all payments that would have
     been received at that point in time under the original payment
     schedule).

11.2 Amendment.  The Company has the sole right to amend or
     modify the Plan and may do so at any time, in whole or in part,
     by the action of its Board of Directors, Compensation Committee
     or the Committee referred to in Article 12 below; provided,
     however, that:  (i) no amendment shall be effective to decrease
     the value of a Participant's Account Balance in existence at the
     time the amendment or modification is made, and (ii) no amendment
     shall adversely affect any Participant or Beneficiary who has
     become entitled to benefits as of the date of the amendment.
     Further, during the pendency of a Potential Change in Control (as
     defined below) and at all times following a Change in Control, no
     amendment or modification may be made which in any way adversely
     affects the interests of any Participant with respect to amounts
     credited to such Participant's Account Balance as of the date of
     the amendment.  A "Potential Change in Control" shall be deemed
     to have occurred if the event set forth in any one of the
     following paragraphs shall have occurred:

     (a)  the Company enters into an agreement, the consummation of
          which would result in the occurrence of a Change in Control;

     (b)  the Company or any Person publicly announces an intention to
	  take or to consider taking actions which, if consummated, would
	  constitute a Change in Control;

     (c)  any Person becomes the Beneficial Owner, directly or
	  indirectly, of securities of the Company representing 15% or more
	  of either the then outstanding shares of common stock of the
	  Company or the combined voting power of the Company's then
	  outstanding securities (not including in the securities
	  beneficially owned by such Person any securities acquired
	  directly from the Company or its affiliates); or

     (d)  the Board adopts a resolution to the effect that, for
	  purposes of this Agreement, a Potential Change in Control has
	  occurred.

     The capitalized terms in the above definition have the same
     meaning as in the "Change in Control" definition set forth
     in Section 1.13 of the Plan.

11.3 Effect of Payment.  The full payment of the applicable
     benefit under any provision of the Plan shall completely
     discharge all obligations to a Participant and his or her
     designated Beneficiaries under this Plan and the Participant's
     Election Form(s) shall terminate.

                           ARTICLE 12

                         Administration

12.1 Committee Duties.  Except as otherwise provided in this
     Article 12, this Plan shall be administered by the Committee.
     Members of the Committee may be Participants under this Plan.
     The Committee (or the Chief Executive Officer if such individual
     chooses to so act) shall also have full and complete
     discretionary authority to (i) make, amend, interpret, and
     enforce all appropriate rules and regulations for the
     administration of this Plan and (ii) decide or resolve any and
     all questions including interpretations of this Plan, as may
     arise in connection with the claims procedures set forth in
     Article 13 or otherwise with regard to the Plan.  Any individual
     serving on the Committee who is a Participant shall not vote or
     act on any matter relating solely to himself or herself.  The
     Chief Executive Officer may not act on any matter involving such
     officer's own participation in the Plan.  All references to the
     Committee shall be deemed to include reference to the Chief
     Executive Officer.  When making a determination or calculation,
     the Committee shall be entitled to rely on information furnished
     by a Participant or the Company.  Notwithstanding any other
     provision of this Plan, the Committee shall have the power, in
     its sole and absolute discretion, to grant or deny a request from
     any Participant, Inactive Participant or Beneficiary for
     acceleration in payment of any Account Balance held with respect
     to such person.  This discretionary power shall reside with the
     Committee under this Section 12.1 and with Administrator under
     Section 12.2.

12.2 Administration Upon Change In Control.  For purposes of this
     Plan, the Company shall be the "Administrator" at all times prior
     to the occurrence of a Change in Control.  Upon and after the
     occurrence of a Change in Control, the "Administrator" shall be
     an independent third party selected by the individual who, at any
     time prior to such event, was the Company's Chief Executive
     Officer or, if there is no such officer or such officer does not
     act, by the Company's then highest ranking officer (the
     "Appointing Officer").  Upon the occurrence of a Change in
     Control, the Administrator shall have full and complete
     discretionary power to determine all questions arising in
     connection with the administration of the Plan and the
     interpretation of the Plan and Trust including, but not limited
     to benefit entitlement determinations.  Upon and after the
     occurrence of a Change in Control, the Company must:  (1) pay all
     reasonable administrative expenses and fees of the Administrator;
     (2) indemnify the Administrator against any costs, expenses and
     liabilities (including, without limitation, attorney's fees) of
     whatsoever kind and nature which may be imposed on, asserted
     against or incurred by the Administrator in connection with the
     performance of the Administrator hereunder, except with respect
     to matters resulting from the gross negligence or willful
     misconduct of the Administrator or its employees or agents; and
     (3) supply full and timely information to the Administrator on
     all matters relating to the Plan, the Trust, the Participants and
     their Beneficiaries, the Account Balances of the Participants,
     including the dates of Retirement, Disability, death or
     Termination of Employment of the Participants, and such other
     pertinent information as the Administrator may reasonably
     require.  Upon and after a Change in Control, the Administrator
     may be terminated (and a replacement appointed) only by either
     individual who was or could have been an Appointing Officer.
     Upon and after a Change in Control, the Administrator may not be
     terminated by the Company.

12.3 Agents.  In the administration of this Plan, the Committee
     may, from time to time, employ agents and delegate to them such
     administrative duties as it sees fit (including acting through a
     duly appointed representative) and may from time to time consult
     with counsel who may be counsel to any Employer.

12.4 Binding Effect of Decisions.  The decision or action of the
     Administrator with respect to any question arising out of or in
     connection with the administration, interpretation and
     application of the Plan and the rules and regulations promulgated
     hereunder shall be final and conclusive and binding upon all
     persons having any interest in the Plan.

12.5 Indemnity of Committee.  All Employers shall indemnify and
     hold harmless the members of the Committee, and any other
     Employee to whom the duties of the Committee may be delegated,
     and the Administrator against any and all claims, losses,
     damages, expenses or liabilities arising from any action or
     failure to act with respect to this Plan, except in the case of
     willful misconduct by the Committee, any of its members, any such
     Employee or the Administrator.

12.6 Employer Information.  To enable the Committee and/or
     Administrator to perform its functions, the Company and each
     Employer shall supply full and timely information to the
     Committee and/or Administrator, as the case may be, on all
     matters relating to the compensation of its Participants, the
     dates of the Retirement, Disability, death or Termination of
     Employment of its Participants, and such other pertinent
     information as the Committee or Administrator may reasonably
     require.

12.7 Coordination with Other Benefits.  The benefits provided for
     a Participant and Participant's Beneficiary under the Plan are in
     addition to any other benefits available to such Participant
     under any other plan or program for employees of the
     Participant's Employer.  The Plan shall supplement and shall not
     supersede, modify or amend any other such plan or program except
     as may otherwise be expressly provided.

                           ARTICLE 13

                        Claims Procedures

13.1 Presentation of Claim.  Any Participant or Beneficiary of a
     deceased Participant (such Participant or Beneficiary being
     referred to below as a "Claimant") may deliver to the Committee a
     written claim for a determination with respect to the amounts
     distributable to such Claimant from the Plan.  If such a claim
     relates to the contents of a notice received by the Claimant, the
     claim must be made within 90 days after such notice was received
     by the Claimant.  All other claims must be made within 180 days
     of the date on which the event that caused the claim to arise
     occurred.  The claim must state with particularity the
     determination desired by the Claimant.

13.2 Notification of Decision.  The Committee shall consider a
     Claimant's claim within a reasonable time, and shall notify the
     Claimant in writing:

     (a)  that the Claimant's requested determination has been made,
          and that the claim has been allowed in full; or

     (b)  that the Committee has reached a conclusion contrary, in
	  whole or in part, to the Claimant's requested determination, and
	  such notice must set forth in a manner calculated to be
	  understood by the Claimant:

          (i)   the specific reason(s) for the denial of the claim, or any
                part of it;

          (ii)  specific reference(s) to pertinent provisions of the Plan
                upon which such denial was based;

          (iii) 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

          (iv)  an explanation of the claim review procedure set forth in
                Section 13.3 below.

13.3 Review of a Denied Claim.  A Claimant is entitled to request
     a review of any claim that has been denied in whole or in part.
     However, in order to obtain such review, the Claimant must submit
     a written request for review with the Committee within 60 days
     after receiving a notice from the Committee that a claim has been
     denied, in whole or in part.  Absent receipt by the Committee of
     a written request for review within such 60-day period, the claim
     will be deemed to be conclusively denied.  After the timely
     filing of a request for review, but not later than 30 days after
     the review procedure began, the Claimant (or the Claimant's duly
     authorized representative):

     (a)  may review pertinent documents;

     (b)  may submit written comments or other documents; and/or

     (c)  may request a hearing, which the Committee, in its sole
          discretion, may grant.

13.4 Decision on Review.  The Committee shall render its decision
     on review promptly, and not later than 60 days after the filing
     of a written request for review of the denial, unless a hearing
     is held or other special circumstances require additional time,
     in which case the Committee's decision must be rendered within
     120 days after such date.  Such decision must be written in a
     manner calculated to be understood by the Claimant, and it must
     contain:

     (a)  specific reasons for the decision;

     (b)  specific reference(s) to the pertinent Plan provisions upon
	  which the decision was based; and

     (c)  such other matters as the Committee deems relevant.

13.5 Legal Action.  Any final decision by the Committee shall be
     binding on all parties.  A Claimant's compliance with the
     foregoing provisions of this Article 13 is a mandatory
     prerequisite to a Claimant's right to commence any legal action
     with respect to any claim for benefits under this Plan.  If a
     final determination of the Committee is challenged in court, such
     determination shall not be subject to de novo review and shall
     not be overturned unless proven to be arbitrary and capricious
     based on the evidence considered by the Committee at the time of
     such determination.

                           ARTICLE 14

                              Trust

14.1 Establishment of the Trust.  The Company shall establish the
     Trust, and each Employer shall at least annually transfer over to
     the Trust such assets as the Employer determines, in its sole
     discretion, are necessary to provide, on a present value basis,
     for its respective future liabilities created with respect to the
     Annual Deferral Amounts, Annual Company Contribution Amounts,
     Company Matching Amounts, Annual Stock Option Amounts and Annual
     Restricted Stock Amounts for such Employer's Participants for all
     periods prior to the transfer, as well as any debits and credits
     to the Participants' Account Balances for all periods prior to
     the transfer, taking into consideration the value of the assets
     in the trust at the time of the transfer.

14.2 Interrelationship of the Plan and the Trust.  The provisions
     of the Plan shall govern the rights of a Participant to receive
     distributions pursuant to the Plan.  The provisions of the Trust
     shall govern the rights of the Employers, Participants and the
     creditors of the Employers to the assets transferred to the
     Trust.  Each Employer shall at all times remain liable to carry
     out its obligations under the Plan.

14.3 Distributions From the Trust.  Each Employer's obligations
     under the Plan may be satisfied with Trust assets distributed
     pursuant to the terms of the Trust, and any such distribution
     shall reduce the Employer's obligations under this Plan.

                           ARTICLE 15

                          Miscellaneous

15.1 Status of Plan.  The Plan is intended to be a plan that is
     not qualified within the meaning of Code Section 401(a) and that
     "is unfunded and is maintained by an employer primarily for the
     purpose of providing deferred compensation for a select group of
     management or highly compensated employees" within the meaning of
     ERISA.  The Plan shall be administered and interpreted to the
     extent possible in a manner consistent with that intent.

15.2 Unsecured General Creditor.  Participants and their
     Beneficiaries, heirs, successors and assigns shall have no legal
     or equitable rights, interests or claims in any property or
     assets of an Employer.  For purposes of the payment of benefits
     under this Plan, any and all of an Employer's assets shall be,
     and remain, the general, unpledged unrestricted assets of the
     Employer.  An Employer's obligation under the Plan shall be
     merely that of an unfunded and unsecured promise to pay money in
     the future.

15.3 Employer's Liability.  An Employer's liability for the
     payment of benefits shall be defined only by the Plan and any
     Election Form(s), as entered into between the Employer and a
     Participant.  An Employer shall have no obligation to a
     Participant under the Plan except as expressly provided in the
     Plan.

15.4 Nonassignability.  Neither a Participant nor any other
     person shall have any right to commute, sell, assign, transfer,
     pledge, anticipate, mortgage or otherwise encumber, transfer,
     hypothecate, alienate or convey in advance of actual receipt, the
     amounts, if any, payable hereunder, or any part thereof, which
     are, and all rights to which are expressly declared to be,
     unassignable and non-transferable to the maximum extent allowed
     by law.  No part of the amounts payable shall, prior to actual
     payment, be subject to seizure, attachment, garnishment or
     sequestration for the payment of any debts, judgments, alimony or
     separate maintenance owed by a Participant or any other person,
     nor shall any part of the same, to the maximum extent allowed by
     law, be transferable by operation of law in the event of a
     Participant's or any other person's bankruptcy or insolvency or
     be transferable to a spouse as a result of a property settlement
     or otherwise.

15.5 Not a Contract of Employment.  The terms and conditions of
     this Plan shall not be deemed to constitute a contract of
     employment between any Employer and the Participant.  Such
     employment is hereby acknowledged to be an "at will" employment
     relationship that can be terminated at any time for any reason,
     or no reason, with or without cause, and with or without notice,
     unless expressly provided in a written employment agreement.
     Nothing in this Plan shall be deemed to give a Participant the
     right to be retained in the service of any Employer as an
     Employee, or to interfere with the right of any Employer to
     discipline or discharge the Participant at any time.

15.6 Furnishing Information.  A Participant or his or her
     Beneficiary will cooperate with the Committee by furnishing any
     and all information requested by the Committee and take such
     other actions as may be requested in order to facilitate the
     administration of the Plan and the payments of benefits
     hereunder, including but not limited to taking such physical
     examinations as the Committee may deem necessary.

15.7 Terms.  Whenever any words are used herein in the masculine,
     they shall be construed as though they were in the feminine in
     all cases where they would so apply; and whenever any words are
     used herein in the singular or in 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.

15.8 Captions.  The captions of the articles, sections and
     paragraphs of this Plan are for convenience only and shall not
     control or affect the meaning or construction of any of its
     provisions.

15.9 Governing Law.  Subject to ERISA, the provisions of this
     Plan shall be construed and interpreted according to the internal
     laws of the State of Wisconsin without regard to its conflicts of
     laws principles.

15.10 Notice.  Any notice or filing required or permitted to
     be given to the Committee under this Plan shall be sufficient if
     in writing and hand-delivered, or sent by registered or certified
     mail, to the address below:

                        Corporate Secretary
                        Wisconsin Energy
                        Corporation
                        231 W. Michigan Street
                        Milwaukee, Wisconsin
                        53203

     Such notice shall be deemed given as of the date of delivery
     or, if delivery is made by mail, as of the date shown on the
     postmark on the receipt for registration or certification.

     Any notice or filing required or permitted to be given to a
     Participant under this Plan shall be sufficient if in
     writing and hand-delivered, or sent by mail, to the last
     known address of the Participant.

15.11 Successors.  The provisions of this Plan shall bind and
     inure to the benefit of the Participant's Employer and its
     successors and assigns and the Participant and the Participant's
     designated Beneficiaries.

15.12 Validity.  In case any provision of this Plan shall be
     illegal or invalid for any reason, said illegality or invalidity
     shall not affect the remaining parts hereof, but this Plan shall
     be construed and enforced as if such illegal or invalid provision
     had never been inserted herein.

15.13 Incompetent.  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.

15.14 Court Order.  The Committee is authorized to make any
     payments directed by court order in any action in which the Plan
     or the Committee has been named as a party.  In addition, if a
     court determines that a spouse or former spouse of a Participant
     has an interest in the Participant's benefits under the Plan in
     connection with a property settlement or otherwise, the Committee
     in its sole discretion, shall have the right, notwithstanding any
     election made by a Participant, to immediately distribute the
     spouse's or former spouse's interest in the Participant's
     benefits under the Plan to that spouse or former spouse.

15.15 Distribution in the Event of Taxation.

     (a)  In General.  If, for any reason, all or any portion of a
          Participant's benefits under this Plan becomes taxable to the
          Participant prior to receipt, a Participant may petition the
          Committee before a Change in Control, or the third party
          administrator after a Change in Control, for a distribution of
          that portion of his or her benefit that has become taxable.  Upon
          the grant of such a petition, which grant shall not be
          unreasonably withheld (and, after a Change in Control, shall be
          granted), a Participant's Employer shall distribute to the
          Participant immediately available funds in an amount equal to the
          taxable portion of his or her benefit (which amount shall not
          exceed a Participant's unpaid Account Balance under the Plan).
          If the petition is granted, the tax liability distribution shall
          be made within 90 days of the date when the Participant's
          petition is granted.  Such a distribution shall affect and reduce
          the benefits to be paid under this Plan.

     (b)  Trust.  If the Trust terminates in accordance with its terms
	  and benefits are distributed from the Trust to a Participant in
	  accordance therewith, the Participant's benefits under this Plan
	  shall be reduced to the extent of such distributions.

15.16 Insurance.  The Employers, on their own behalf or on
     behalf of the trustee of the Trust, and, in their sole
     discretion, may apply for and procure insurance on the life of
     the Participant, in such amounts and in such forms as the Trust
     may choose.  The Employers or the trustee of the Trust, as the
     case may be, shall be the sole owner and beneficiary of any such
     insurance.  The Participant shall have no interest whatsoever in
     any such policy or policies, and at the request of the Employers
     shall submit to medical examinations and supply such information
     and execute such documents as may be required by the insurance
     company or companies to whom the Employers have applied for
     insurance.  The Participant may elect not to be insured.

15.17 Legal Fees To Enforce Rights After Change in Control.
     The Company and each Employer is aware that upon the occurrence
     of a Change in Control, the Company Board or the board of
     directors of a Participant's Employer (which might then be
     composed of new members) or a shareholder of the Company or the
     Participant's Employer, or of any successor corporation might
     then cause or attempt to cause the Company, the Participant's
     Employer or such successor to refuse to comply with its
     obligations under the Plan and might cause or attempt to cause
     the Company or the Participant's Employer to institute, or may
     institute, litigation seeking to deny Participants the benefits
     intended under the Plan.  In these circumstances, the purpose of
     the Plan could be frustrated.  Accordingly, if, following a
     Change in Control, it should appear to any Participant that the
     Company, the Participant's Employer or any successor corporation
     has failed to comply with any of its obligations under the Plan
     or any agreement thereunder or, if the Company, such Employer or
     any other person takes any action to declare the Plan void or
     unenforceable or institutes any litigation or other legal action
     designed to deny, diminish or to recover from any Participant the
     benefits intended to be provided, then the Company and the
     Participant's Employer irrevocably authorize such Participant to
     retain counsel of his or her choice at the expense of the Company
     and the Participant's Employer (who shall be jointly and
     severally liable for all reasonable fees of such counsel) to
     represent such Participant in connection with the initiation or
     defense of any litigation or other legal action, whether by or
     against the Company, the Participant's Employer or any director,
     officer, shareholder or other person affiliated with the Company,
     the Participant's Employer or any successor thereto in any
     jurisdiction.

15.18 Payout Under Special Circumstances.  Notwithstanding
     any other provision of this Plan, upon the happening of either of
     the following events, the Account Balances of all Participants,
     Inactive Participants and Beneficiaries shall be forthwith paid
     in a single lump sum, except in the case of an event constituting
     a Change in Control for any individual who has previously filed a
     special written irrevocable deferral election form under the
     SERP, or under a special written contract with the Company
     (including, without limitation, the senior officer change in
     control, severance and non-compete agreements currently in
     effect) electing not to receive such an immediate lump sum but to
     instead be paid on another basis:

     (a)  the occurrence of a Change in Control; or

     (b)  should at any time Moody's or Standard & Poor's investment
	  rating services classify the senior debt obligations of the
	  Company as less than "investment grade" (which term shall mean
	  senior debt obligations of the Company which are assigned to the
	  top four grades, which as of the date of this document are AAA,
	  AA, A and BBB by Standard & Poor's and Aaa, Aa, A and Baa by
	  Moody's.

EX-10

					Exhibit 10.2










                  WISCONSIN ENERGY CORPORATION



              DIRECTORS' DEFERRED COMPENSATION PLAN
                          PLAN DOCUMENT


           Amended and Restated as of July 1, 2002 and
             As Further Amended as of April 29, 2003



			TABLE OF CONTENTS

								Page
ARTICLE 1   DEFINITIONS

ARTICLE 2   ELECTION FORM FOR DEFERRAL OF DIRECTOR FEES
     2.1     Deferral of Fees
     2.2     Termination of Deferral of Fees

ARTICLE 3   DEFERRAL COMMITMENTS/CREDITING/TAXES
     3.1     Stock Option Deferral
     3.2     Withholding of Fee Deferral Amounts
     3.3     Stock Option Amount
     3.4     Account Balances of Inactive Participants and
             other Participants as of July 1, 2002.
     3.5     Investment of Trust Assets
     3.6     Sources of Stock
     3.7     Vesting
     3.8     Crediting/Debiting of Account Balances
     3.9     Distributions

ARTICLE 4   IN SERVICE PAYOUT; UNFORESEEABLE FINANCIAL
            EMERGENCIES; WITHDRAWAL ELECTION
     4.1     In Service Payout
     4.2     Other Benefits Take Precedence Over In Service
     4.3     Withdrawal Payout/Suspensions for Unforeseeable
             Financial Emergencies
     4.4     Withdrawal Election

ARTICLE 5   RETIREMENT BENEFIT
     5.1     Retirement Benefit
     5.2     Payment of Retirement Benefit
     5.3     Death Prior to Completion of Retirement Benefit

ARTICLE 6   PRE-RETIREMENT SURVIVOR BENEFIT
     6.1     Pre-Retirement Survivor Benefit
     6.2     Payment of Pre-Retirement Survivor Benefit

ARTICLE 7   BENEFICIARY DESIGNATION
     7.1     Beneficiary
     7.2     Beneficiary Designation; Change
     7.3     Acknowledgment
     7.4     No Beneficiary Designation
     7.5     Doubt as to Beneficiary
     7.6     Discharge of Obligations

ARTICLE 8   TERMINATION, AMENDMENT OR MODIFICATION
     8.1     Termination
     8.2     Amendment
     8.3     Effect of Payment

ARTICLE 9   ADMINISTRATION
     9.1     Committee Duties
     9.2     Administration Upon Change In Control
     9.3     Agents
     9.4     Binding Effect of Decisions
     9.5     Indemnity of Committee
     9.6     Company and Participating Subsidiary Information
     9.7     Coordination with Other Benefits

ARTICLE 10  CLAIMS PROCEDURES
     10.1    Presentation of Claim
     10.2    Notification of Decision
     10.3    Review of a Denied Claim
     10.4    Decision on Review
     10.5    Legal Action

ARTICLE 11  TRUST
     11.1    Establishment of the Trust
     11.2    Interrelationship of the Plan and the Trust
     11.3    Distributions From the Trust

ARTICLE 12  MISCELLANEOUS
     12.1    Unsecured General Creditor
     12.2    Liability
     12.3    Nonassignability
     12.4    Furnishing Information
     12.5    Terms
     12.6    Captions
     12.7    Governing Law
     12.8    Notice
     12.9    Successors
     12.10   Validity
     12.11   Incompetent
     12.12   Court Order
     12.13   Distribution in the Event of Taxation
     12.14   Insurance
     12.15   Legal Fees To Enforce Rights After Change in Control
     12.16   Payout Under Special Circumstances




                  WISCONSIN ENERGY CORPORATION

              DIRECTORS' DEFERRED COMPENSATION PLAN

         (As Amended and Restated as of July 1, 2002 and
            as Further Amended as of April 29, 2003)


                            Purpose

     The purpose of the Wisconsin Energy Corporation Directors'
Deferred Compensation Plan (the "Plan") is to establish a method
of paying directors' compensation which will aid Wisconsin Energy
Corporation and its subsidiaries in attracting and retaining as
members of their Boards of Directors persons whose abilities,
experience and judgment can contribute to the continued progress
of the Company and its subsidiaries.  The Plan is hereby amended
and restated effective as of May 1, 2003.

                            ARTICLE 1

                           Definitions

     For purposes of this Plan, unless otherwise clearly apparent
from the context, the following phrases or terms shall have the
following indicated meanings:

1.1  "Account Balance" shall mean, with respect to a Participant,
     a credit on the records of the Company equal to the sum of
     (i) the Deferral Account balance and (ii) the Stock Option
     Account balance.  The Account Balance shall be a bookkeeping
     entry only and shall be utilized solely as a device for the
     measurement and determination of the amounts to be paid to a
     Participant, or his or her designated Beneficiary, pursuant to
     this Plan.

1.2  "Deferral Amount" shall mean that portion of a Participant's
     fees for services as a Director a Participant elects to have, and
     is deferred, in accordance with Article 2.

1.3  "Annual Installment Method" shall be an annual installment
     payment over the number of years selected by the Participant, not
     to exceed 20, in accordance with this Plan, as set forth below.
     In each case, the Account Balance of the Participant shall be
     calculated as of the close of business on the last business day
     of the year.  Each annual installment, regardless of the method
     selected, shall be payable within 60 days after February 1st of
     each year.  The alternative methods allowable are as follows:
     (a)  Fractional Method.  The annual installment shall be
          calculated by multiplying this balance by a fraction, the
          numerator of which is one, and the denominator of which is the
          remaining number of annual payments due the Participant.  By way
          of example, if the Participant elects a 10 year Annual
          Installment Method, the first payment shall be 1/10 of the
          Account Balance, calculated as described in this definition.  The
          following year, the payment shall be 1/9 of the Account Balance,
          calculated as described in this definition.

     (b)  Percentage or Fixed Dollar Method.  The annual installment
	  shall be calculated by multiplying this balance in the case of
	  the percentage method, by the percentage selected by the
	  Participant and paying out the resulting amount, or in the case
	  of the fixed dollar method, by paying out the fixed dollar amount
	  selected by the Participant, for the number of years selected by
	  the Participant.  However, in the event the dollar amount
	  selected is greater than the Account Balance in any given year,
	  the entire Account Balance will be distributed.  Further,
	  regardless of the method selected by the Participant, the final
	  installment payment will include 100% of the then remaining
	  Account Balance.

     (c)  Special Installment Method.  Under this alternative method,
	  the Participant selects both the number of years and a specified
	  interest rate, which is then used to calculate a level fixed
	  dollar amount of annual payouts which would exhaust the Account
	  Balance over such number of years, if actual performance of the
	  elected Measurement Funds were identical to the specified
	  interest rate.  However, in recognition of the fact that such
	  exact conformity is unlikely, in the event the calculated level
	  fixed dollar amount is greater than the Account Balance in any
	  given year, the entire Account Balance will be distributed.
	  Further, the final installment payment will include 100% of the
	  then remaining Account Balance.

1.4  "Annual Stock Option Amount" shall mean, with respect to a
     Participant for any one Plan Year, the amount of Qualifying Gains
     deferred on Eligible Stock Option exercise in accordance with
     Section 3.1 of this Plan, calculated using the average of the
     reported high and low prices for the Stock as of the day of
     exercise (if a business day) or as of the next following business
     day.

1.5  "Beneficiary" shall mean one or more persons, trusts,
     estates or other entities, designated in accordance with
     Article 7, that are entitled to receive benefits under this Plan
     upon the death of a Participant.

1.6  "Beneficiary Designation Form" shall mean the form
     established from time to time by the Committee that a Participant
     completes, signs and returns to the Committee to designate one or
     more Beneficiaries.

1.7  "Board" shall mean the board of directors of the Company and
     the Board of any subsidiary of the Company that the Company has
     authorized to participate in the plan.

1.8  "Change in Control" with respect to the Company shall mean
     the occurrence of any one of the events set forth below:
     (a)  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 affiliates)
          representing 20% or more of the combined voting power of the
          Company's then outstanding securities, excluding any Person who
          becomes such a Beneficial Owner in connection with a transaction
          described in clause (i) of paragraph (c) below; or

     (b)  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

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

     (d)  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

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


     For purposes of this Change in Control definition, the terms
     set forth below shall have the following meanings:

          "Beneficial Owner" shall have the meaning set forth in
          Rule 13d-3 under the Exchange Act.

          "Exchange Act" shall mean the Securities Exchange Act
          of 1934, as amended from time to time.

          "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 affiliates, (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.

1.9  "Chairman" shall mean the Chairman of the Board of the
     Company.

1.10 "Claimant" shall have the meaning set forth in Section 10.1.

1.11 "Committee" shall mean an internal administrative committee
     appointed by the Chairman to administer the Plan described in
     Article 9.

1.12 "Company" shall mean Wisconsin Energy Corporation, a
     Wisconsin corporation, and any successor to all or substantially
     all of the Company's assets or business

1.13 "Deferral Account" shall mean (i) the sum of all of a
     Participant's Deferral Amounts, plus (ii) amounts credited in
     accordance with all the applicable crediting provisions of this
     Plan that relate to the Participant's Deferral Account, less
     (iii) all distributions made to the Participant or his or her
     Beneficiary pursuant to this Plan that relate to his or her
     Deferral Account.

1.14 "Director" solely for purposes of this Plan shall mean any
     director of the Company or a participating subsidiary who is not
     also an officer or employee of the Company or any of its
     subsidiaries.  This plan is solely for "outside" Directors.

1.15 "Election Form" shall mean the form established from time to
     time by the Committee that a Participant completes, signs and
     returns to the Committee to make an election under the Plan.  To
     the extent authorized by the Committee, such form may be
     electronic or set forth in some other media and need not be
     signed by a Participant.

1.16 "Eligible Stock Option" shall mean one or more non-qualified
     stock option(s) selected by the Committee in its sole discretion
     and exercisable under a plan or arrangement of any Company
     permitting a Participant under this Plan to defer gain with
     respect to such option.

1.17 "In Service Payout" shall mean the payout set forth in
     Section 4.1.

1.18 "Inactive Participant" shall mean an individual who at one
     point was a Participant in the Plan or a predecessor
     non-qualified deferred compensation plan and has an undistributed
     Account Balance, but is no longer eligible to make deferral
     elections under the Plan.

1.19 "Participant" shall mean any Director who chooses to
     participate in the Plan.  A spouse or former spouse of a
     Participant shall not be treated as a Participant in the Plan or
     have an account balance under the Plan, even if he or she has an
     interest in the Participant's benefits under the Plan as a result
     of applicable law or property settlements resulting from legal
     separation or divorce.

1.20 "Plan" shall mean the Company's Directors' Deferred
     Compensation Plan.

1.21 "Plan Year" shall mean a period beginning on January 1 of
     each calendar year and continuing through December 31 of such
     calendar year.

1.22 "Pre-Retirement Survivor Benefit" shall mean the benefit set
     forth in Article 6.

1.23 "Qualifying Gain" shall mean the value accrued upon exercise
     of an Eligible Stock Option (i) using a Stock-for-Stock payment
     method and (ii) having an aggregate fair market value in excess
     of the total Stock purchase price necessary to exercise the
     option.  In other words, the Qualifying Gain upon exercise of an
     Eligible Stock Option equals the total market value of the shares
     (or share equivalent units) acquired minus the total stock
     purchase price.  For example, assume a Participant elects to
     defer the Qualifying Gain accrued upon exercise of an Eligible
     Stock Option to purchase 1000 shares of Stock at an exercise
     price of $20 per share, when Stock has a current fair market
     value of $25 per share.  Using the Stock-for-Stock payment
     method, the Participant would deliver 800 shares of Stock (worth
     $20,000) to exercise the Eligible Stock Option and receive, in
     return, 800 shares of Stock plus a Qualifying Gain (in this case,
     in the form of an unfunded and unsecured promise to pay money or
     property in the future) equal to $5,000 (i.e., the current value
     of the remaining 200 shares of Stock).

1.24 "Retirement", "Retire(s)" or "Retired" shall mean, with
     respect to a Director and solely for the purposes of this Plan,
     the date when the Director's service as a director for the
     Company and all of the Company's subsidiaries has ceased for any
     reason other than death.

1.25 "Retirement Benefit" shall mean the benefit set forth in
     Article 5.

1.26 "Stock" shall mean Wisconsin Energy Corporation common
     stock.

1.27 "Stock Option Account" shall mean the sum of (i) the
     Participant's Annual Stock Option Amounts, plus (ii) amounts
     credited/debited in accordance with all the applicable
     crediting/debiting provisions of this Plan that relate to the
     Participant's Stock Option Account, less (iii) all distributions
     made to the Participant or his or her Beneficiary pursuant to
     this Plan that relate to the Participant's Stock Option Account.

1.28 "Stock Option Amount" shall mean, for any Eligible Stock
     Option, the amount of Qualifying Gains deferred in accordance
     with Section 3.1 of this Plan, calculated using the average of
     the reported high and low prices for the Stock as of the day of
     exercise (if a business day) or as of the next following business
     day.

1.29 "Trust" shall mean the Wisconsin Energy Corporation Rabbi
     Trust Agreement dated December 1, 2000 between the Company and
     The Northern Trust Company, and as amended from time to time.

1.30 "Unforeseeable Financial Emergency" shall mean an
     unanticipated emergency that is caused by an event beyond the
     control of the Participant that would result in severe financial
     hardship to the Participant resulting from (i) a sudden and
     unexpected illness or accident of the Participant or a dependent
     of the Participant, (ii) a loss of the Participant's property due
     to casualty, or (iii) such other extraordinary and unforeseeable
     circumstances arising as a result of events beyond the control of
     the Participant, all as determined in the sole discretion of the
     Committee.

                            ARTICLE 2

           Election Form for Deferral of Director Fees

2.1  Deferral of Fees.  The annual fees payable to a Director for
     any calendar year are currently payable in lump sum in January of
     each calendar year.  All or any portion of such fees may be
     deferred, provided the Director elects to do so on an Election
     Form filed with the Committee no later than December 31st of the
     calendar year prior to the calendar year for which such annual
     fees otherwise become payable.  All or any portion of any
     additional meeting or other fees for a Director's services which
     have not yet been earned by the performance of such service may
     be deferred by a Director on an Election Form filed with the
     Committee, with any such Form to become effective on the first
     day of the calendar month following receipt of the form.

2.2  Termination of Deferral of Fees.  A Director may revoke or
     change his or her election with request to deferral of fees by
     timely delivering to the Committee in accordance with its rules
     and procedures a new Election Form before the end of the month
     preceding the month for which the election will be effective.
     Notwithstanding any other provision of this Plan, any Election
     Form or revocation will be given prospective effective only and
     may not affect prior deferrals.


                            ARTICLE 3
              Deferral Commitments/Crediting/Taxes


3.1  Stock Option Deferral.

     (a)  For each Eligible Stock Option, a Participant may elect to
          defer as provided in (b) below, as his or her Stock Option
          Amount, up to 100% of the Qualifying Gain with respect to
          exercise of the Eligible Stock Option.  Stock Option Amounts may
          also be limited by other terms or conditions set forth in the
          stock option plan or agreement under which such options are
          granted.

     (b)  Stock Option Deferral.  For an election to defer gain upon
          an Eligible Stock Option exercise to be valid:  (i) a separate
	  Election Form must be completed and signed by the Participant
	  with respect to the Eligible Stock Option; (ii) the Election Form
	  must be timely delivered to the Committee and accepted by the
	  Committee at least six (6) months prior to the date the
	  Participant elects to exercise the Eligible Stock Option; and
	  (iii) the Eligible Stock Option must be exercised using an actual
	  or phantom Stock-for-Stock payment method.

3.2  Withholding of Fee Deferral Amounts.  For each Plan Year,
     the amount of fees deferred shall be withheld and credited to the
     Participants Account Balance as of the date or dates the deferred
     fees would otherwise have been payable.

3.3  Stock Option Amount.  Subject to any terms and conditions
     imposed by the Committee, Participants may elect to defer, under
     the Plan, Qualifying Gains attributable to an Eligible Stock
     Option exercise.  Stock Option Amounts shall be credited/debited
     to the Participant on the books of the Company at the time Stock
     would otherwise have been delivered to the Participant pursuant
     to the Eligible Stock Option exercise, but for the election to
     defer.

3.4  Account Balances of Inactive Participants and other
     Participants as of July 1, 2002. Notwithstanding any other
     provisions of this Plan, the Account Balance of any Inactive
     Participant (or beneficiary thereof) who is no longer a Director
     as of July 1, 2002, and whose Account Balance is in pay status
     under the terms of this Plan as it existed prior to July 1, 2002
     (the "Prior Plan") shall continue to be administered and
     distributed as provided under the terms of the Prior Plan (unless
     and to the extent otherwise determined by the Committee in its
     sole discretion in a manner consistent with the terms of the
     relevant Prior Plan).  Further, the Account Balance of any
     Director who was a participant in the Prior Plan and who
     continues as a Director on or after July 1, 2002 will remain
     subject to the distribution method elected under the Prior Plan
     unless and until a new distribution method has been elected under
     this Plan and become effective.

3.5  Investment of Trust Assets.  The Trustee of the Trust shall
     be authorized, upon written instructions received from the
     Committee or investment manager appointed by the Committee, to
     invest and reinvest the assets of the Trust in accordance with
     the applicable Trust Agreement, including the disposition of
     Stock and reinvestment of the proceeds in one or more investment
     vehicles designated by the Committee.

3.6  Sources of Stock.  If Stock is credited under the Plan in
     the Trust in connection with an Eligible Stock Option exercise,
     the shares so credited shall be deemed to have originated, and
     shall be counted against the number of shares reserved, under
     such other plan, program or arrangement.

3.7  Vesting.  A Participant shall at all times be 100% vested in
     his or her Deferral Account and Stock Option Account.

3.8  Crediting/Debiting of Account Balances.  Subject to Section
     3.8(f) and (g) below, and accordance with, and subject to, the
     rules and procedures that are established from time to time by
     the Committee in its sole discretion, amounts shall be credited
     or debited to a Participant's Account Balance in accordance with
     the following rules:

     (a)  Election of Measurement Funds.  Subject to Section 3.8(f)
          and (g) below, a Participant, in connection with his or her
          initial deferral election in accordance with Section 3.2 above,
          or in connection with the restatement of this Plan effective as
          of July 1, 2002, shall elect, on the Election Form, one or more
          Measurement Fund(s) (as described in Section 3.8(c) below) to be
          used to determine the additional amounts to be credited to his or
          her Account Balance, unless changed in accordance with the next
          sentence.  Subject to Section 3.8(f) and (g) below, commencing
          with the Participant's commencement of participation in the Plan
          and continuing thereafter, the Participant may (but is not
          required to) elect, by submitting an Election Form to the
          Committee that is accepted by the Committee, to add or delete one
          or more Measurement Fund(s) to be used to determine the
          additional amounts to be credited to his or her Account Balance,
          or to change the portion of his or her Account Balance allocated
          to each previously or newly elected Measurement Fund.  If an
          election is made in accordance with the previous sentence, it
          shall apply thereafter in accordance with the rules of the
          Committee for all subsequent periods in which the Participant
          participates in the Plan, unless changed in accordance with the
          previous provisions.

     (b)  Proportionate Allocation.  In making any election described
	  in Section 3.8(a) above, the Participant shall specify on the
	  Election Form, in increments of one percentage point (1%), the
	  percentage of his or her Account Balance to be allocated to a
	  Measurement Fund (as if the Participant was making an investment
	  in that Measurement Fund with that portion of his or her Account
	  Balance).

     (c)  Measurement Funds.  Subject to Section 3.8(f) and (g) below,
	  the Participant may elect one or more of the following
	  measurement funds (the "Measurement Funds"), for the purpose of
	  crediting additional amounts to his or her Account Balance:  (i)
	  any Measurement Fund selected by the WEC Investment Trust Policy
	  Committee from time to time; (ii) Prime Rate Fund (described as a
	  mutual fund 100% invested in a hypothetical debt instrument which
	  earns interest at an annualized interest rate equal to the "Prime
	  Rate" as reported each business day by the Wall Street Journal,
	  with interest deemed reinvested in additional units of such
	  hypothetical debt instrument); or (iii) a Company Stock
	  Measurement Fund (described as a mutual fund 100% invested in
	  shares of Company Stock, with dividends deemed reinvested in
	  additional shares of Company Stock).
          Subject to Section 3.8(f) and (g) below, as necessary,
          the WEC Investment Trust Policy Committee may, in its
          sole discretion, discontinue, substitute or add a
          Measurement Fund, subject to such advance notice to
          Participants as it determines.

     (d)  Crediting or Debiting Method.  The performance of each
          elected Measurement Fund (either positive or negative) will be
          determined by the Committee, in its reasonable discretion, based
          on the performance of the Measurement Funds themselves.  A
          Participant's Account Balance shall be credited or debited on a
          periodic basis based on the performance of each Measurement Fund
          selected by the Participant, as determined by the Committee in
          its sole discretion.  The Participant's Annual Stock Option
          Amount(s) shall be credited to his or her Stock Option Account no
          later than the close of business on the first business day after
          the day on which the Eligible Stock Option was exercised or
          otherwise disposed of.

     (e)  No Actual Investment.  Notwithstanding any other provision
	  of this Plan that may be interpreted to the contrary, the
	  Measurement Funds are to be used for measurement purposes only,
	  and a Participant's election of any such Measurement Fund, the
	  allocation to his or her Account Balance thereto, the calculation
	  of additional amounts and the crediting or debiting of such
	  amounts to a Participant's Account Balance shall not be
	  considered or construed in any manner as an actual investment of
	  his or her Account Balance in any such Measurement Fund.  In the
	  event that the Company or the Trustee (as that term is defined in
	  the Trust), in its own discretion, decides to invest funds in any
	  or all of the Measurement Funds, no Participant shall have any
	  rights in or to such investments themselves.  Without limiting
	  the foregoing, a Participant's Account Balance shall at all times
	  be a bookkeeping entry only and shall not represent any
	  investment made on his or her behalf by the Company or the Trust;
	  the Participant shall at all times remain an unsecured creditor
	  of the Company.

     (f)  Special Rule for Stock Option Account.  Notwithstanding any
          provision of this Plan that may be construed to the contrary, the
	  Participant's Stock Option Account must be deemed invested in the
 	  Company Stock Measurement Fund at all times prior to distribution
	  from this Plan.  Further, the Participant's Stock Option Account
	  must be distributed from this Plan in the form of cash.

     (g)  Special Considerations for Participants Subject to
	  Section 16 of the Securities Exchange Act of 1934.  Prior to July
	  1, 2002, different rules pertained with respect to amounts
	  allocated to the Company Stock Measurement Fund.  Any amounts so
	  allocated could not be moved out of such Fund at any time prior
	  to distribution.  Such restriction was dropped from the Plan
	  effective as of July 1, 2002.  In order that any election by a
	  Participant who is a director subject to the reporting
	  requirements and trading restrictions of Section 16 of the
	  Securities Exchange Act of 1934 ("Section 16") will conform to
	  Section 16, such a Participant should consult with the designated
	  individual at the Company responsible for Section 16 reporting
	  and compliance prior to making any election to move any part of
	  his or her Account Balance into or out of the Company Stock
	  Measurement Fund.  In general, compliance with Section 16 will
	  require that:

          (i)  Any election to move any part of an Account Balance into or
               out of the Company Stock Measurement Fund (including any election
               to receive a payout in service under Section 4.1, in the event of
               Unforeseeable Financial Emergency under Section 4.3, or under the
               10% withdrawal penalty rules of Section 4.4), which elections
               will be deemed made for purposes of these provisions only as of
               the date of such deemed investment transfers or proposed payouts,
               should only be effected if made at least six (6) months following
               the date of the most recent "opposite way" election (as explained
               below) made by such Participant with respect to this Plan or any
               plan of the Company or its affiliates that also constituted a
               "discretionary transaction" within the meaning of
               Rule 16b-3(b)(1) under Section 16.

          (ii) An "opposite way" election means (x) in case of an election
	       by a Participant to move any part of an Account Balance into the
	       Company Stock Measurement Fund, an election that was a
	       disposition of Company Stock or an interest in a phantom Company
	       Stock fund or similar security, or (y) in case of any election by
	       a Participant to move any part of an Account Balance out of the
	       Company Stock Measurement Fund, an election that was an
	       acquisition of Company Stock or an interest in a phantom Company
	       Stock fund or similar security.

         (iii) Any change of election to an alternative payout period
	       made under Section 5.2 by such a Participant may only be given
	       effect if it is approved by the Chairman (or if such change is
	       requested by the Chairman at any time when the Chairman is also a
               Director participating in this Plan, such change may be given
	       effect only if it is approved by the Compensation Committee of
	       the Board, excluding the Chairman).

     The Company reserves the right to impose such restrictions
     as it determines to be appropriate, in is sole discretion,
     on any elections, dispositions or other matters under this
     Plan relating to the Company Stock Measurement Fund in order
     to comply with or qualify for exemption under Section 16.

3.9  Distributions.  Any applicable tax withholding or reporting
     requirements with regard to amounts verified under and paid from
     this Plan shall be satisfied as determined by the Company in its
     sole discretion.  All lump sum payments and final payments of the
     remaining balance of any Account Balance shall be calculated
     based upon the value of the Account Balance determined (unless
     and until the Company chooses another ending valuation date) as
     of the last business day of the calendar year quarter immediately
     preceding the date of payment (the "Ending Valuation Date").  All
     rights on the part of a Participant or any other person to elect
     or change the Measurement Funds under Section 3.8 shall be deemed
     to have ceased as of such Ending Valuation Date and no adjustment
     in the value of an Account Balance shall be considered for any
     purpose after such Ending Valuation Date.

                            ARTICLE 4

     In Service Payout; Unforeseeable Financial Emergencies;
                       Withdrawal Election

4.1  In Service Payout.  In connection with and at the time of
     each election to defer a Deferral Amount, a Participant may
     irrevocably elect, on a prospective basis only, to receive a
     future "In Service Payout" from the Plan with respect to such
     Deferral Amount.  The In Service Payout shall be a lump sum
     payment in an amount that is expressed either as a fixed dollar
     amount or as a percentage of the Deferral Amount plus amounts
     credited or debited thereto, determined at the time that the In
     Service Payout becomes payable (rather than the date of a
     Retirement).  Subject to the other terms and conditions of this
     Plan, each In Service Payout elected shall be paid out during a
     90 day period commencing immediately after the last day of any
     Plan Year designated by the Participant that is at least two Plan
     Years after the Plan Year in which the Deferral Amount is
     actually deferred.  By way of example, if a two year In Service
     Payout is elected for Deferral Amounts that are deferred in the
     Plan Year commencing January 1, 2003, the two year In Service
     Payout would become payable during a 90 day period commencing
     January 1, 2006.

4.2  Other Benefits Take Precedence Over In Service.  Should an
     event occur that triggers a benefit under Article 5, 6, or 8, any
     Deferral Amount, plus amounts credited or debited thereon, that
     is subject to a In Service Payout election under Section 4.1
     shall not be paid in accordance with Section 4.1 but shall be
     paid in accordance with the other applicable Article.

4.3  Withdrawal Payout/Suspensions for Unforeseeable Financial
     Emergencies.  If the Participant experiences an Unforeseeable
     Financial Emergency, the Participant may petition the Committee
     to (i) suspend any deferrals required to be made by a Participant
     and/or (ii) receive a partial or full payout from the Plan.  The
     payout shall not exceed the lesser of the Participant's Account
     Balance, calculated as if such Participant were receiving a
     Retirement Benefit, or the amount reasonably needed to satisfy
     the Unforeseeable Financial Emergency.  If, subject to the sole
     discretion of the Committee, the petition for a suspension and/or
     payout is approved, suspension shall take effect upon the date of
     approval and any payout shall be made within 90 days of the date
     of approval.

4.4  Withdrawal Election.  A Participant (or, after a
     Participant's death, his or her Beneficiary) may elect, at any
     time, to withdraw part or all of his or her Account Balance,
     calculated as if there had occurred a Retirement as of the day of
     the election, less a withdrawal penalty equal to 10% of such
     amount (the net amount shall be referred to as the "Withdrawal
     Amount").  This election can be made at any time, before or after
     Retirement or death, and whether or not the Participant (or
     Beneficiary) is in the process of being paid pursuant to an
     installment payment schedule.  If made before Retirement, or
     death, a Participant's Withdrawal Amount shall be calculated
     based on his or her Account Balance as if there had occurred a
     Retirement as of the day of the election.  Any partial withdrawal
     must be at least equal to $25,000, or such higher amount as the
     Committee may establish from time to time.  The Participant (or
     his or her Beneficiary) shall make this election by giving the
     Committee advance written notice of the election in a form
     determined from time to time by the Committee.  The Participant
     (or his or her Beneficiary) shall be paid the Withdrawal Amount
     within 90 days of his or her election.

                            ARTICLE 5

                       Retirement Benefit

5.1  Retirement Benefit.  A Participant who Retires shall
     receive, as a Retirement Benefit, his or her Account Balance.

5.2  Payment of Retirement Benefit.  A Participant, in connection
     with his or her commencement of participation in the Plan, shall
     elect on an Election Form to receive the Retirement Benefit in a
     lump sum or pursuant to an Annual Installment Method, provided
     that any such Election Form is submitted at least 1 year prior to
     the Participant's Retirement.  Any change to an alternative
     payout is also subject to the rules in Section 3.8(iii).  The
     Election Form most recently accepted shall govern the payout of
     the Retirement Benefit.  If a Participant does not make any
     election with respect to the payment of the Retirement Benefit,
     then such benefit shall be payable in a lump sum.  The lump sum
     payment shall be made, or installment payments shall commence, no
     later than 90 days after the last day of the Plan Year in which
     the Participant Retires.

5.3  Death Prior to Completion of Retirement Benefit.  If a
     Participant dies after Retirement but before the Retirement
     Benefit is paid in full, the Participant's unpaid Retirement
     Benefit payments shall continue and shall be paid to the
     Participant's Beneficiary (a) over the remaining number of years
     and in the same amounts as that benefit would have been paid to
     the Participant had the Participant survived, or (b) in a lump
     sum, if requested by the Beneficiary and allowed in the sole
     discretion of the Committee, that is equal to the Participant's
     unpaid remaining Account Balance.

                            ARTICLE 6

                 Pre-Retirement Survivor Benefit

6.1  Pre-Retirement Survivor Benefit.  The Participant's
     Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
     to the Participant's Account Balance if the Participant dies
     before he or she Retires.

6.2  Payment of Pre-Retirement Survivor Benefit.  A Participant,
     in connection with his or her commencement of participation in
     the Plan, shall elect on an Election Form whether the
     Pre-Retirement Survivor Benefit shall be received by his or her
     Beneficiary in a lump sum or pursuant to an Annual Installment
     Method.  The Participant may annually change this election to an
     allowable alternative payout period by submitting a new Election
     Form to the Committee, which form is accepted by the Committee in
     its sole discretion.  The Election Form most recently accepted by
     the Committee prior to the Participant's death shall govern the
     payout of the Participant's Pre-Retirement Survivor Benefit.  If
     a Participant does not make any election with respect to the
     payment of the Pre-Retirement Survivor Benefit, then such benefit
     shall be paid in a lump sum.  Despite the foregoing, if the
     Participant's Account Balance at the time of his or her death is
     less than $25,000, payment of the Pre-Retirement Survivor Benefit
     may be made, in the sole discretion of the Committee, in a lump
     sum.  The lump sum payment shall be made, or installment payments
     shall commence, no later than 90 days after the last day of the
     Plan Year in which the Committee is provided with proof that is
     satisfactory to the Committee of the Participant's death.

                              ARTICLE 7

                         Beneficiary Designation

7.1  Beneficiary.  Each Participant shall have the right, at any
     time, to designate his or her Beneficiary(ies) (both primary as
     well as contingent) to receive any benefits payable under the
     Plan to a beneficiary upon the death of a Participant.  The
     Beneficiary designated under this Plan may be the same as or
     different from the Beneficiary designation under any other plan
     of a Company in which the Participant participates.

7.2  Beneficiary Designation; Change.  A Participant shall
     designate his or her Beneficiary by completing and signing the
     Beneficiary Designation Form, and returning it to the Committee
     or its designated agent.  A Participant shall have the right to
     change a Beneficiary by completing, signing and otherwise
     complying with the terms of the Beneficiary Designation Form and
     the Committee's rules and procedures, as in effect from time to
     time.  Upon the acceptance by the Committee of a new Beneficiary
     Designation Form, all Beneficiary designations previously filed
     shall be canceled.  The Committee shall be entitled to rely on
     the last Beneficiary Designation Form filed by the Participant
     and accepted by the Committee prior to his or her death.

7.3  Acknowledgment.  No designation or change in designation of
     a Beneficiary shall be effective until received and acknowledged
     in writing by the Committee or its designated agent.

7.4  No Beneficiary Designation.  If a Participant fails to
     designate a Beneficiary as provided in Sections 7.1, 7.2 and 7.3
     above or, if all designated Beneficiaries predecease the
     Participant or die prior to complete distribution of the
     Participant's benefits, then the Participant's designated
     Beneficiary shall be deemed to be his or her surviving spouse.
     If the Participant has no surviving spouse, but was survived by a
     designated Beneficiary who was receiving or was entitled to
     receive distribution but died prior to a complete distribution of
     the Participant's benefits, the benefits remaining shall be
     payable to such designated Beneficiary's estate.  If the
     Participant leaves no surviving spouse and was not survived by a
     designated Beneficiary as provided in the foregoing sentence, the
     benefits remaining shall be payable to the Participant's estate.

7.5  Doubt as to Beneficiary.  If the Committee has any doubt as
     to the proper Beneficiary to receive payments pursuant to this
     Plan, the Committee shall have the right, exercisable in its
     discretion, to cause the Company or the participating subsidiary
     to withhold such payments until this matter is resolved to the
     Committee's satisfaction.

7.6  Discharge of Obligations.  The payment of benefits under the
     Plan to a Beneficiary shall fully and completely discharge the
     Company and any participating subsidiary and the Committee from
     all further obligations under this Plan with respect to the
     Participant, and that Participant's Election Form(s) shall
     terminate upon such full payment of benefits.

                            ARTICLE 8

             Termination, Amendment or Modification

8.1  Termination.  Although the Company anticipates that it will
     continue the Plan for an indefinite period of time, there is no
     guarantee that the Company will continue the Plan or will not
     terminate the Plan at any time in the future.  Accordingly, the
     Company reserves the right to discontinue its sponsorship of the
     Plan and/or to terminate the Plan at any time or to exclude any
     participating subsidiary from further participation at any time,
     by action of the Company's Board of Directors or Compensation
     Committee.  Upon the termination of the Plan by the Company or
     exclusion of any participating subsidiary, the Election Form(s)
     of the affected Participants shall terminate.  The Company may
     decide that the Account Balances of the affected participants
     shall continue to be held under the provisions of this Plan (but
     with no further deferrals to be made by the affected
     Participants) until an event occurs which would otherwise cause a
     payout to be made hereunder.  Alternatively, the Company may
     determine to proceed with distribution of Account Balances of the
     affected Participants determined as if they had experienced a
     Retirement on the date of Plan termination or, if Plan
     termination occurs after the date upon which a Participant was
     eligible to Retire, then with respect to that Participant as if
     he or she had Retired on the date of Plan termination.  However,
     if the Company terminates the Plan after a Change in Control, the
     Company shall be required to pay such benefits in a lump sum,
     except as otherwise provided in Section 12.16.  The termination
     of the Plan shall not adversely affect any Participant or
     Beneficiary who has become entitled to the payment of any
     benefits under the Plan as of the date of termination; provided
     however, that the Company shall have the right to accelerate
     installment payments without a premium or prepayment penalty by
     paying the Account Balance in a lump sum or using fewer years
     (provided that the present value of all payments that will have
     been received by a Participant at any given point of time under
     the different payment schedule shall equal or exceed the present
     value of all payments that would have been received at that point
     in time under the original payment schedule).

8.2  Amendment.  The Company has the sole right to amend or
     modify the Plan and may do so at any time, in whole or in part,
     by the action of its Board of Directors or Compensation
     Committee; provided, however, that:  (i) no amendment shall be
     effective to decrease the value of a Participant's Account
     Balance in existence at the time the amendment or modification is
     made, and (ii) no amendment shall adversely affect any
     Participant or Beneficiary who has become entitled to benefits as
     of the date of the amendment.  Further, during the pendency of a
     Potential Change in Control (as defined below) and at all times
     following a Change in Control, no amendment or modification may
     be made which in any way adversely affects the interests of any
     Participant with respect to amounts credited to such
     Participant's Account Balance as of the date of the amendment.  A
     "Potential Change in Control" shall be deemed to have occurred if
     the event set forth in any one of the following paragraphs shall
     have occurred:

     (a)  the Company enters into an agreement, the consummation of
          which would result in the occurrence of a Change in Control;

     (b)  the Company or any Person publicly announces an intention to
	  take or to consider taking actions which, if consummated, would
	  constitute a Change in Control;

     (c)  any Person becomes the Beneficial Owner, directly or
	  indirectly, of securities of the Company representing 15% or more
	  of either the then outstanding shares of common stock of the
	  Company or the combined voting power of the Company's then
	  outstanding securities (not including in the securities
	  beneficially owned by such Person any securities acquired
	  directly from the Company or its affiliates); or

     (d)  the Board adopts a resolution to the effect that, for
	  purposes of this Agreement, a Potential Change in Control has
	  occurred.

     The capitalized terms in the above definition have the same
     meaning as in the "Change in Control" definition set forth
     in Section 1.8 of the Plan.

8.3  Effect of Payment.  The full payment of the applicable
     benefit under any provision of the Plan shall completely
     discharge all obligations to a Participant and his or her
     designated Beneficiaries under this Plan and the Participant's
     Election Form(s) shall terminate.

                            ARTICLE 9

                         Administration

9.1  Committee Duties.  Except as otherwise provided in this
     Article 9, this Plan shall be administered by the Committee.
     Members of the Committee may be Participants under this Plan.
     The Committee (or the Chairman, if such individual chooses to so
     act) shall also have full and complete discretionary authority to
     (i) make, amend, interpret, and enforce all appropriate rules and
     regulations for the administration of this Plan and (ii) decide
     or resolve any and all questions including interpretations of
     this Plan, as may arise in connection with the claims procedures
     set forth in Article 10 or otherwise with regard to the Plan.
     Any individual serving on the Committee who is a Participant
     shall not vote or act on any matter relating solely to himself or
     herself.  The Chairman may not act on any matter involving such
     individual's own participation in the Plan.  All references to
     the Committee shall be deemed to include reference to the
     Chairman.  When making a determination or calculation, the
     Committee shall be entitled to rely on information furnished by a
     Participant or the Company.  Notwithstanding any other provision
     of this Plan, the Committee shall have the power, in its sole and
     absolute discretion, to grant or deny a request from any
     Participant, Inactive Participant or Beneficiary for acceleration
     in payment of any Account Balance held with respect to such
     person.  This discretionary power shall reside with the Committee
     under this Section 9.1 and with Administrator under Section 9.2.

9.2  Administration Upon Change In Control.  For purposes of this
     Plan, the Company shall be the "Administrator" at all times prior
     to the occurrence of a Change in Control.  Upon and after the
     occurrence of a Change in Control, the "Administrator" shall be
     an independent third party selected by the individual who, at any
     time prior to such event, was the Company's Chief Executive
     Officer or, if there is no such officer or such officer does not
     act, by the Company's then highest ranking officer (the
     "Appointing Officer").  Upon the occurrence of a Change in
     Control, the Administrator shall have full and complete
     discretionary power to determine all questions arising in
     connection with the administration of the Plan and the
     interpretation of the Plan and Trust including, but not limited
     to benefit entitlement determinations.  Upon and after the
     occurrence of a Change in Control, the Company must:  (1) pay all
     reasonable administrative expenses and fees of the Administrator;
     (2) indemnify the Administrator against any costs, expenses and
     liabilities (including, without limitation, attorney's fees) of
     whatsoever kind and nature which may be imposed on, asserted
     against or incurred by the Administrator in connection with the
     performance of the Administrator hereunder, except with respect
     to matters resulting from the gross negligence or willful
     misconduct of the Administrator or its employees or agents; and
     (3) supply full and timely information to the Administrator on
     all matters relating to the Plan, the Trust, the Participants and
     their Beneficiaries, the Account Balances of the Participants,
     including the dates of Retirement or death of the Participants,
     and such other pertinent information as the Administrator may
     reasonably require.  Upon and after a Change in Control, the
     Administrator may be terminated (and a replacement appointed)
     only by either individual who was or could have been an
     Appointing Officer.  Upon and after a Change in Control, the
     Administrator may not be terminated by the Company.

9.3  Agents.  In the administration of this Plan, the Committee
     may, from time to time, employ agents and delegate to them such
     administrative duties as it sees fit (including acting through a
     duly appointed representative) and may from time to time consult
     with counsel who may be counsel to any Company.

9.4  Binding Effect of Decisions.  The decision or action of the
     Administrator with respect to any question arising out of or in
     connection with the administration, interpretation and
     application of the Plan and the rules and regulations promulgated
     hereunder shall be final and conclusive and binding upon all
     persons having any interest in the Plan.

9.5  Indemnity of Committee.  The Company and each participating
     subsidiary shall indemnify and hold harmless the members of the
     Committee, and any other person who is an employee of the Company
     or a participating subsidiary and to whom the duties of the
     Committee may be delegated, and the Administrator against any and
     all claims, losses, damages, expenses or liabilities arising from
     any action or failure to act with respect to this Plan, except in
     the case of willful misconduct by the Committee, any of its
     members, any such employee or the Administrator.

9.6  Company and Participating Subsidiary Information.  To enable
     the Committee and/or Administrator to perform its functions, the
     Company and each participating subsidiary shall supply full and
     timely information to the Committee and/or Administrator, as the
     case may be, on all matters relating to the compensation of its
     Participants, the dates of the Retirement or death of its
     Participants, and such other pertinent information as the
     Committee or Administrator may reasonably require.

9.7  Coordination with Other Benefits.  The benefits provided for
     a Participant and Participant's Beneficiary under the Plan are in
     addition to any other benefits available to such Participant
     under any other plan or program available to them.  The Plan
     shall supplement and shall not supersede, modify or amend any
     other such plan or program except as may otherwise be expressly
     provided.

                           ARTICLE 10

                        Claims Procedures

10.1 Presentation of Claim.  Any Participant or Beneficiary of a
     deceased Participant (such Participant or Beneficiary being
     referred to below as a "Claimant") may deliver to the Committee a
     written claim for a determination with respect to the amounts
     distributable to such Claimant from the Plan.  If such a claim
     relates to the contents of a notice received by the Claimant, the
     claim must be made within 90 days after such notice was received
     by the Claimant.  All other claims must be made within 180 days
     of the date on which the event that caused the claim to arise
     occurred.  The claim must state with particularity the
     determination desired by the Claimant.

10.2 Notification of Decision.  The Committee shall consider a
     Claimant's claim within a reasonable time, and shall notify the
     Claimant in writing:

     (a)  that the Claimant's requested determination has been made,
          and that the claim has been allowed in full; or

     (b)  that the Committee has reached a conclusion contrary, in
	  whole or in part, to the Claimant's requested determination, and
	  such notice must set forth in a manner calculated to be
	  understood by the Claimant:

	  (i)  the specific reason(s) for the denial of the claim, or any
               part of it;

          (ii) specific reference(s) to pertinent provisions of the Plan
               upon which such denial was based;

          (iii) 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

          (iv) an explanation of the claim review procedure set forth in
               Section 10.3 below.

10.3 Review of a Denied Claim.  A Claimant is entitled to request
     a review of any claim that has been denied in whole or in part.
     However, in order to obtain such review, the Claimant must submit
     a written request for review with the Committee within 60 days
     after receiving a notice from the Committee that a claim has been
     denied, in whole or in part.  Absent receipt by the Committee of
     a written request for review within such 60-day period, the claim
     will be deemed to be conclusively denied.  After the timely
     filing of a request for review, but not later than 30 days after
     the review procedure began, the Claimant (or the Claimant's duly
     authorized representative):

     (a)  may review pertinent documents;

     (b)  may submit written comments or other documents; and/or

     (c)  may request a hearing, which the Committee, in its sole
	  discretion, may grant.

10.4 Decision on Review.  The Committee shall render its decision
     on review promptly, and not later than 60 days after the filing
     of a written request for review of the denial, unless a hearing
     is held or other special circumstances require additional time,
     in which case the Committee's decision must be rendered within
     120 days after such date.  Such decision must be written in a
     manner calculated to be understood by the Claimant, and it must
     contain:

     (a)  specific reasons for the decision;

     (b)  specific reference(s) to the pertinent Plan provisions upon
          which the decision was based; and

     (c)  such other matters as the Committee deems relevant.

10.5 Legal Action.  Any final decision by the Committee shall be
     binding on all parties.  A Claimant's compliance with the
     foregoing provisions of this Article 10 is a mandatory
     prerequisite to a Claimant's right to commence any legal action
     with respect to any claim for benefits under this Plan.  If a
     final determination of the Committee is challenged in court, such
     determination shall not be subject to de novo review and shall
     not be overturned unless proven to be arbitrary and capricious
     based on the evidence considered by the Committee at the time of
     such determination.

                           ARTICLE 11

                              Trust

11.1 Establishment of the Trust.  The Company shall establish the
     Trust, and the Company and each participating subsidiary shall at
     least annually transfer over to the Trust such assets as the
     Company determines, in its sole discretion, are necessary to
     provide, on a present value basis, for their respective future
     liabilities created with respect to the Deferral Amounts and
     Annual Stock Option Amounts for all periods prior to the
     transfer, taking into consideration the value of the assets in
     the trust at the time of the transfer.

11.2 Interrelationship of the Plan and the Trust.  The provisions
     of the Plan shall govern the rights of a Participant to receive
     distributions pursuant to the Plan.  The provisions of the Trust
     shall govern the rights of the Company and any participating
     subsidiary , Participants and the creditors of the Company and
     each participating subsidiary to the assets transferred to the
     Trust.  The Company and each participating subsidiary shall at
     all times remain liable to carry out their obligations under the
     Plan.

11.3 Distributions From the Trust.  The obligations of the
     Company and each participating subsidiary under the Plan may be
     satisfied with Trust assets distributed pursuant to the terms of
     the Trust, and any such distribution shall reduce their
     obligations under this Plan.

                           ARTICLE 12

                          Miscellaneous

12.1 Unsecured General Creditor.  Participants and their
     Beneficiaries, heirs, successors and assigns shall have no legal
     or equitable rights, interests or claims in any property or
     assets of the Company and each participating subsidiary.  For
     purposes of the payment of benefits under this Plan, any and all
     of the assets of the Company and each participating subsidiary
     shall be, and remain, the general, unpledged unrestricted assets
     of each.  The obligation of the Company and each participating
     subsidiary under the Plan shall be merely that of an unfunded and
     unsecured promise to pay money in the future.

12.2  Liability.  The liability of the Company and each
     participating subsidiary for the payment of benefits shall be
     defined only by the Plan and any Election Form(s), as entered
     into between the Company and a Participant.  Neither the Company
     nor any participating subsidiary shall have any obligation to a
     Participant under the Plan except as expressly provided in the
     Plan.

12.3 Nonassignability.  Neither a Participant nor any other
     person shall have any right to commute, sell, assign, transfer,
     pledge, anticipate, mortgage or otherwise encumber, transfer,
     hypothecate, alienate or convey in advance of actual receipt, the
     amounts, if any, payable hereunder, or any part thereof, which
     are, and all rights to which are expressly declared to be,
     unassignable and non-transferable to the maximum extent allowed
     by law.  No part of the amounts payable shall, prior to actual
     payment, be subject to seizure, attachment, garnishment or
     sequestration for the payment of any debts, judgments, alimony or
     separate maintenance owed by a Participant or any other person,
     nor shall any part of the same, to the maximum extent allowed by
     law, be transferable by operation of law in the event of a
     Participant's or any other person's bankruptcy or insolvency or
     be transferable to a spouse as a result of a property settlement
     or otherwise.

12.4 Furnishing Information.  A Participant or his or her
     Beneficiary will cooperate with the Committee by furnishing any
     and all information requested by the Committee and take such
     other actions as may be requested in order to facilitate the
     administration of the Plan and the payments of benefits
     hereunder, including but not limited to taking such physical
     examinations as the Committee may deem necessary.

12.5 Terms.  Whenever any words are used herein in the masculine,
     they shall be construed as though they were in the feminine in
     all cases where they would so apply; and whenever any words are
     used herein in the singular or in 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.

12.6 Captions.  The captions of the articles, sections and
     paragraphs of this Plan are for convenience only and shall not
     control or affect the meaning or construction of any of its
     provisions.

12.7 Governing Law.  The  provisions of this Plan shall be
     construed and interpreted according to the internal laws of the
     State of Wisconsin without regard to its conflicts of laws
     principles.

12.8 Notice.  Any notice or filing required or permitted to be
     given to the Committee under this Plan shall be sufficient if in
     writing and hand-delivered, or sent by registered or certified
     mail, to the address below:

                        Corporate Secretary
                        Wisconsin Energy
                        Corporation
                        231 W. Michigan Street
                        Milwaukee, Wisconsin
                        53203

     Such notice shall be deemed given as of the date of delivery
     or, if delivery is made by mail, as of the date shown on the
     postmark on the receipt for registration or certification.

     Any notice or filing required or permitted to be given to a
     Participant under this Plan shall be sufficient if in
     writing and hand-delivered, or sent by mail, to the last
     known address of the Participant.

12.9 Successors.  The provisions of this Plan shall bind and
     inure to the benefit of the Company and each participating
     subsidiary and their successors and assigns and the Participant
     and the Participant's designated Beneficiaries.

12.10 Validity.  In case any provision of this Plan shall be
     illegal or invalid for any reason, said illegality or invalidity
     shall not affect the remaining parts hereof, but this Plan shall
     be construed and enforced as if such illegal or invalid provision
     had never been inserted herein.

12.11 Incompetent.  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.

12.12 Court Order.  The Committee is authorized to make any
     payments directed by court order in any action in which the Plan
     or the Committee has been named as a party.  In addition, if a
     court determines that a spouse or former spouse of a Participant
     has an interest in the Participant's benefits under the Plan in
     connection with a property settlement or otherwise, the Committee
     in its sole discretion, shall have the right, notwithstanding any
     election made by a Participant, to immediately distribute the
     spouse's or former spouse's interest in the Participant's
     benefits under the Plan to that spouse or former spouse.

12.13 Distribution in the Event of Taxation.

     (a)  In General.  If, for any reason, all or any portion of a
          Participant's benefits under this Plan becomes taxable to the
          Participant prior to receipt, a Participant may petition the
          Committee before a Change in Control, or the third party
          administrator after a Change in Control, for a distribution of
          that portion of his or her benefit that has become taxable.  Upon
          the grant of such a petition, which grant shall not be
          unreasonably withheld (and, after a Change in Control, shall be
          granted), the Company and each participating subsidiary shall
          distribute to the Participant immediately available funds in an
          amount equal to the taxable portion of his or her benefit (which
          amount shall not exceed a Participant's unpaid Account Balance
          under the Plan).  If the petition is granted, the tax liability
          distribution shall be made within 90 days of the date when the
          Participant's petition is granted.  Such a distribution shall
          affect and reduce the benefits to be paid under this Plan.

     (b)  Trust.  If the Trust terminates in accordance with its terms
	  and benefits are distributed from the Trust to a Participant in
	  accordance therewith, the Participant's benefits under this Plan
	  shall be reduced to the extent of such distributions.

12.14 Insurance.  The Company and any participating
     subsidiary, on their own behalf or on behalf of the trustee of
     the Trust, and, in their sole discretion, may apply for and
     procure insurance on the life of the Participant, in such amounts
     and in such forms as the Trust may choose.  The Company and each
     participating subsidiary or the trustee of the Trust, as the case
     may be, shall be the sole owner and beneficiary of any such
     insurance.  The Participant shall have no interest whatsoever in
     any such policy or policies, and at the request of the Company or
     a participating subsidiary shall submit to medical examinations
     and supply such information and execute such documents as may be
     required by the insurance company or companies to whom the
     Company or any participating subsidiary has applied for
     insurance.  The Participant may elect not to be insured.

12.15 Legal Fees To Enforce Rights After Change in Control.
     The Company and each participating subsidiary is aware that upon
     the occurrence of a Change in Control, the Company Board or the
     board of directors of a Participant's participating subsidiary
     (which might then be composed of new members) or a shareholder of
     the Company or any successor corporation might then cause or
     attempt to cause the Company, a participating subsidiary  or such
     successor to refuse to comply with its obligations under the Plan
     and might cause or attempt to cause the Company or a
     participating subsidiary to institute, or may institute,
     litigation seeking to deny Participants the benefits intended
     under the Plan.  In these circumstances, the purpose of the Plan
     could be frustrated.  Accordingly, if, following a Change in
     Control, it should appear to any Participant that the Company, a
     participating subsidiary or any successor corporation has failed
     to comply with any of its obligations under the Plan or any
     agreement thereunder or, if the Company, such a participating
     subsidiary or any other person takes any action to declare the
     Plan void or unenforceable or institutes any litigation or other
     legal action designed to deny, diminish or to recover from any
     Participant the benefits intended to be provided, then the
     Company and such participating subsidiary irrevocably authorize
     such Participant to retain counsel of his or her choice at the
     expense of the Company and such participating subsidiary (who
     shall be jointly and severally liable for all reasonable fees of
     such counsel) to represent such Participant in connection with
     the initiation or defense of any litigation or other legal
     action, whether by or against the Company, the participating
     subsidiary or any director, officer, shareholder or other person
     affiliated with the Company, the participating subsidiary or any
     successor thereto in any jurisdiction.

12.16 Payout Under Special Circumstances.  Notwithstanding
     any other provision of this Plan, upon the happening of either of
     the following events, the Account Balances of all Participants,
     Inactive Participants and Beneficiaries shall be forthwith paid
     in a single lump sum, except in the case of an event constituting
     a Change in Control for any individual who has previously filed a
     special written irrevocable deferral election form with the
     Company electing not to receive such an immediate lump sum but to
     instead be paid on another basis:

     (a)  the occurrence of a Change in Control; or

     (b)  should at any time Moody's or Standard & Poor's investment
	  rating services classify the senior debt obligations of the
	  Company as less than "investment grade" (which term shall mean
	  senior debt obligations of the Company which are assigned to the
	  top four grades, which as of the date of this document are AAA,
	  AA, A and BBB by Standard & Poor's and Aaa, Aa, A and Baa by
	  Moody's).

EX-10

                                                  EXHIBIT 10.3


       SENIOR OFFICER EMPLOYMENT AND NON-COMPETE AGREEMENT


THIS  AGREEMENT  is  made as of June 20, 2003  between  WISCONSIN
ENERGY  CORPORATION  (the  "Company")  and  Allen  Leverett  (the
"Executive").

WHEREAS, the Company wishes to employ the Executive as its  Chief
Financial  Officer  and  the  Executive  wishes  to  accept  such
employment  on  the  terms  and  conditions  provided   in   this
Agreement;

NOW,  THEREFORE, in consideration of their mutual  promises,  the
parties agree as follows:

1.   Defined  Terms.  All of the capitalized terms not  otherwise
     defined in this Agreement are defined in the attached Appendix.

2.   Employment.   Effective as of July 1, 2003 (the  "Employment
     Starting Date"), the Company employs the Executive as the Chief
     Financial  Officer  and the Executive  hereby  accepts  such
     employment with the Company and agrees to serve in such position
     and to perform such other executive duties and serve in such
     other executive capacities not inconsistent with the position of
     Chief Financial Officer as the Board of Directors of the Company
     may request.  The Executive's employment is not for any fixed
     term  and  the Executive acknowledges that he is an employee
     at-will.  Further:

     (a)  Base Salary, Signing Bonus and Bonus Opportunity.  Effective
          as of the Employment Starting Date, the Executive's annual base
          salary is hereby established at an annual rate of $460,000.  The
          Executive will receive a special lump sum signing bonus of
          $250,000, with $150,000 of this amount payable promptly after the
          Employment Starting Date and the balance of $100,000 payable six
          months later, provided the Executive then remains in the
          Company's employ.  The Executive's target bonus opportunity for
          2003 under the Company's Short-Term Performance Plan (the "STPP")
          is fixed at 80% of base salary, with a minimum guaranteed bonus
          of $368,000 for 2003 and a maximum bonus opportunity of 160% of
          base salary. The Executive's target bonus opportunity under the
          STPP for 2004 and subsequent years will not be less than 80% of
          base salary, except under circumstances described in the next
          sentence.  Circumstances under which an adjustment below the 80%
          target could take place would be limited to a general "Board
          Action" resulting in the lowering of targets for the entire
          senior executive group.

     (b)  Stock Based Incentives.  Effective as of the Employment
          Starting Date, the Executive will receive a grant of non-
          qualified options for 200,000 shares of the Company's common
          stock (the "Stock") at an exercise price per share equal to the
          average of the lowest and highest reported sale prices for the
          Stock on the Employment Starting Date, and on other terms and
          conditions as specified for other senior officers in the grants
          made to such officers in January of 2003.  Additionally,
          effective as of the Employment Starting Date, the Executive will
          be granted an award of restricted stock, with the number of
          shares awarded to be determined by dividing $750,000 by the lower
          of the average of the lowest and highest reported sale prices for
          the Stock on such date, or $26.00, and then rounding the number
          of shares to the nearest 10.  Two-thirds of such restricted stock
          (rounded to the nearest whole share) will vest on the second
          anniversary of the Employment Starting Date and the remainder
          will vest at the rate of 20% for each year of service thereafter
          (i.e., starting with second anniversary of the Employment
          Starting Date) until 100% vesting of such remainder occurs on the
          seventh anniversary of the Employment Starting Date, provided
          further that 100% vesting of all such restricted Stock shall
          occur upon the Executive's death or disability while in the
          Company's employ.

3.   Other Benefits and Special Additional Pension Benefit.   The
     Executive will be entitled to five weeks of vacation per year, to
     participate in all retirement and welfare benefit plans  and
     programs generally available to employees in accordance with the
     terms of such plans and programs and to participate on a basis
     commensurate with other senior officers of the Company in any
     benefit plans and programs available to such officers, including
     the  opportunity  to participate in the Company's  Executive
     Deferred Compensation Plan (the "EDCP").  Additionally,  the
     Executive shall be entitled to (i) participate in the Company's
     Supplemental Executive Retirement Plan (the "SERP") with respect
     to monthly benefit "A," which is designed to make up for any
     limitations imposed on the amount of Executive's accrued benefit
     under the Company's tax-qualified defined benefit plan  (the
     "Retirement Account Plan") because of statutory or regulatory
     limits relating to the Internal Revenue Code and shall vest in
     monthly benefit "A" concurrent with vesting in the Retirement
     Account  Plan, and (ii) receive a special additional pension
     benefit.  Such special additional pension benefit, provided the
     Executive's retirement occurs at or after age 60, will be equal
     to the difference between (a) and (b) below, less the monthly
     lifetime retirement benefits payable to the Executive from all
     qualified and non-qualified defined benefit pension plans of
     previous employers of the Executive, calculated as if starting on
     the same date as the special additional pension benefit, where
     (a) and (b) are as follows:

          a)   equals the monthly lifetime retirement benefit payable from
               the Company's Retirement Account Plan, plus any amount payable
               under the SERP monthly benefit "A", and

          b)   equals  the  monthly  lifetime retirement  benefit
               that  would  have been payable from the Management
               Employees'  Retirement Plan of the Company  as  in
               effect  on December 31, 1995 (the "1995 Management
               Plan")  had  the defined benefit formula  then  in
               effect continued until the Executive's retirement,
               calculated without regard to Internal Revenue Code
               limits,  and  as  if  the  Executive  had  started
               participation  in  the  1995  Management  Plan  on
               January 1, 1989 and as if any deferrals elected by
               the  Executive under the EDCP and any bonuses were
               all  included in the Executive's compensation base
               for   calculating   benefits    under   the   1995
               Management Plan.

4.   Additional Preretirement Spouse's Benefit.  In the event  of
     the Executive's death while in the Company's employ, the Company
     will pay to the Executive's surviving spouse, if any, a monthly
     benefit equal to the difference between (a) and (b) below, but
     reduced as provided below to reflect the vested value of all
     qualified and nonqualified defined benefit pension plans  of
     previous employers of the Executive, where (a) and (b) are as
     follows:

          a)   equals  the  monthly  spouse's  benefit  that   is
               payable  from the Retirement Account Plan  of  the
               Company,  plus  any amount payable  under  monthly
               benefit "A" of the SERP, and

          b)   equals  the  monthly spouse's benefit  that  would
               have  been  payable from the 1995 Management  Plan
               had  the  defined  benefit formula  in  effect  on
               December  31, 1995 continued until the Executive's
               death,  calculated on all the same assumptions  as
               set forth in Section 3(b)above.

          The   reduction  attributable  to  plans  of   previous
          employers   as  referenced  above  in  the  event   the
          additional   preretirement  spouse's  benefit   becomes
          payable  is  to  be  applied by  reducing  the  monthly
          surviving spouse benefit calculation as above set forth
          by one-half of the dollar amount of offset attributable
          to  the  plans  of previous employers that  would  have
          resulted under the third sentence of Section 3 above if
          Section 3 were applicable.

5.   Covered Termination Not Associated with a Change in Control.
     In the event of a Covered Termination Not Associated with  a
     Change in Control, then the Company shall provide the Executive
     with the following compensation and benefits:

          a)   General Compensation and Benefits.  The Company shall pay
               the Executive's full salary to the Executive from the time notice
               of termination is given through the date of termination of
               employment at the rate in effect at the time such notice is given
               or, if higher, at an annual rate not less than twelve times the
               Executive's highest monthly base salary for the twelve-month
               period immediately preceding the month in which the Effective
               Date occurs, together with all compensation and benefits payable
               to the Executive through the date of termination of employment
               under the terms of any compensation or benefit plan, program or
               arrangement maintained by the Company during such period.  Such
               payments shall be made in a lump sum not later than ten business
               days after such termination.  The Company shall also pay the
               Executive's normal post-termination compensation and benefits to
               the Executive as such payments become due, except that any normal
               cash severance benefits shall be superseded and replaced entirely
               by the benefits provided under this Agreement.  Such
               post-termination compensation and benefits shall be determined
               under, and paid in accordance with, the Company's retirement,
               insurance and other compensation or benefit plans, programs and
               arrangements most favorable to the Executive in effect at any
               time during the 180-day period immediately preceding the
               Effective Date or, if more favorable to the Executive, those
               provided generally at any time after the Effective Date to
               executives of the Company of comparable status and position to
               the Executive.

          b)   Incentive Compensation.  Notwithstanding any provision of
               any cash bonus or incentive compensation plan of the Company, the
               Company shall pay to the Executive, within ten business days
               after the Executive's termination of employment, a lump sum
               amount, in cash, equal to the sum of (i) any bonus or incentive
               compensation which has been allocated or awarded to the Executive
               for a fiscal year or other measuring period under the plan that
               ends prior to the date of termination of employment, but which
               has not yet been paid, and (ii) a pro rata portion of the Highest
               Bonus Amount for all uncompleted periods under any bonus or
               incentive compensation plan.

          c)   Special Compensation.  The Company shall pay to the
               Executive a lump sum equal to two times the sum of (a) the
               highest per annum base rate of salary in effect with respect to
               the Executive during the three-year period immediately prior to
               the termination of employment plus (b) the Highest Bonus Amount.
               Such lump sum shall be paid by the Company to the Executive
               within ten business days after the Executive's termination of
               employment, unless the provisions of Section 5 (f) below apply.
               The amount of the aggregate lump sum provided by this Section 5
               (c), whether paid immediately or deferred, shall not be counted
               as compensation for purposes of any other benefit plan or program
               applicable to the Executive.

          d)   Special Retirement Plans Lump Sum.  The Company shall pay to
               the Executive an aggregate lump sum equal to the total of the
               amounts described in (a) and (b) herein.  Amount (a) is a lump
               sum equal to the difference between (i) the actuarial equivalent
               of the benefit under the Retirement Account Plan, the SERP
               monthly benefit "A" and the special additional pension benefit
               provided under Section 3 above, which the Executive would receive
               if his employment continued for a two-year period following
               termination of employment, assuming that the Executive's
               compensation during such two-year period would have been equal to
               the Executive's salary as in effect immediately before the
               termination or, if higher, as in effect at any time during the
               180-day period immediately preceding the termination date, and
               the Highest Bonus Amount, and (ii) the actuarial equivalent of
               the Executive's actual benefit (paid or payable) under the
               Retirement Account Plan, the SERP monthly benefit "A" and the
               special additional pension benefit under Section 3 above.
               Actuarial equivalency for this purpose shall be determined using
               an interest rate equal to a 36 consecutive month (or shorter
               period, as explained in the next sentence) average, using the
               rates as of the last business day of each month starting with
               January 31, 2002 (the "Month End Rate") of the five year United
               States Treasury Note yields (the "36 Month Average Rate") in
               effect ending with the Month End Rate immediately prior to the
               Effective Date, as such yield is reported in the Wall Street
               Journal or comparable publication, and the mortality table used
               for purposes of determining lump sum amounts then in use under
               the Retirement Account Plan.  Prior to January 31, 2004, the 36
               Month Average Rate shall mean only the average of the Month End
               Rates which have occurred since January 31, 2002, even though
               less than 36.  Amount (b) is a lump sum equal to the total of (i)
               the additional contributions which would have been made to the
               Executive's account under the Company's tax-qualified 401(k)
               plan, plus (ii) the additional contributions which would have
               been credited to the bookkeeping account balance of the Executive
               attributable to the 401(k) match feature of the EDCP, had the
               Executive continued in employment for a two-year period following
               termination of employment and assuming that the Executive's
               compensation would have been the same as set forth above and that
               the Executive had made maximum utilization of the pre-tax and
               after-tax opportunity in the qualified 401(k) plan and obtained
               the maximum matching contributions in such plan.  The amount of
               the aggregate lump sum under this Section 5(d) shall be paid by
               the Company to the Executive within ten business days after the
               Executive's termination of employment, unless the provisions of
               Section 5(e) below apply.  The amount of the lump sum provided by
               this Section 5(d) shall not be treated as compensation for
               purposes of any other benefit plan or program applicable to the
               Executive.

          e)   Special Additional Monthly Pension Benefit.  The Company
               shall pay to the Executive an additional monthly pension benefit
               equal to the difference between (i) the pension benefits the
               Executive would have received under all qualified and non-
               qualified defined benefit pension plans of his former employer
               immediately prior to his employment with the Company had he
               remained with such former employer until age 60, calculated as if
               his pay with such employer had continued at its 2003 level,
               increased by 3% annually thereafter, and (ii) the sum of the
               pension benefits actually payable to the Executive under the
               Retirement Account Plan and under Section 3 above, which will
               become vested upon the Executive's termination under this Section
               5 without regard to the Executive's age, plus the actuarial
               equivalent (calculated as provided in subsection (d) above) of
               the special retirement plans lump sum benefit provided in
               subsection (d) above, provided that the benefit calculated under
               (i) above is greater than the benefit calculated under (ii)
               above.

          f)   Deferral Option.  Notwithstanding any other provision of
               this Agreement, the Executive may file a written irrevocable
               deferral election form with the Company both prior to the
               expiration of thirty days from the date this Agreement is signed
               by the Executive and prior to the Executive's termination of
               employment electing to defer all or part of the special
               compensation provided by Section 5(c) and the special retirement
               plans lump sum otherwise provided for in Section 5(d).  Such form
               shall irrevocably specify a method of payment for such
               compensation from among the methods allowable under the  EDCP.
               Any deferred amounts shall be credited with earnings in the
               manner as elected by the Executive under the terms of the EDCP
               and the EDCP provisions shall apply to deferrals made hereunder
               except that (i) any provisions for a mandatory lump sum payment
               upon a "Change in Control" as defined in the EDCP shall not apply
               to deferrals made hereunder, (ii) any amounts which become
               payable under this Section 5(f) shall be deemed for purposes of
               the EDCP to have become payable on account of the Executive's
               "retirement," and (iii) the entire amount deferred under this
               Section 5(f) shall be paid in a lump sum by the Company
               immediately prior to the occurrence of a Change in Control to
               such grantor or "rabbi" trust as the Company shall have
               established as a vehicle to hold such amount pending payment, but
               with such trust designed so that the Executive's rights to
               payment of such benefits are no greater than those of an
               unsecured creditor.

          g)   Welfare Benefits.  Subject to Section 3(h) below, for a
               two-year period following termination of employment, the Company
               shall provide the Executive (and his family) with health, life
               and other welfare benefits (but excluding disability benefits)
               substantially similar to the benefits received by the Executive
               (and his family) pursuant to welfare benefit programs of the
               Company or its affiliates as in effect immediately during the 180
               days preceding the Effective Date (or, if more favorable to the
               Executive, as in effect at any time thereafter until the
               termination of employment); provided, however, that no
               compensation or benefits provided hereunder shall be treated as
               compensation for purposes of any of the programs or shall result
               in the crediting of additional service thereunder.  For purposes
               of determining the amount of such welfare benefits, any part of
               which shall be based on compensation, the Executive's
               compensation during the relevant two-year period shall be deemed
               to be equal to the Executive's salary as in effect immediately
               before the termination of employment or, if higher, as in effect
               at any time during the 180-day period immediately preceding the
               termination date, and the Highest Bonus Amount.  To the extent
               that any of the welfare benefits covered by this Section 3(g)
               cannot be provided pursuant to the plan or program maintained by
               the Company or its affiliates, the Company shall provide such
               benefits outside the plan or program at no additional cost
               (including, without limitation, tax cost) to the Executive and
               his family.

          h)   New Employment.  If the Executive secures new employment
               during the two-year period following termination of employment,
               the level of any benefit being provided pursuant to Section 3(g)
               hereof shall be reduced to the extent that any such benefit is
               being provided by the Executive's new employer.  The Executive,
               however, shall be under no obligation to seek new employment and,
               in any event, no other amounts payable pursuant to this Agreement
               shall be reduced or offset by any compensation received from new
               employment or by any amounts claimed to be owed by the Executive
               to the Company or its affiliates.

          i)   Equity Incentive Awards.  Notwithstanding the provisions in
               any stock option award, restricted stock award or other equity
               incentive compensation award (the "Awards"), the Executive shall
               become fully vested in all outstanding Awards and all otherwise
               applicable restrictions shall lapse and for purposes of
               determining the length of time the Executive has to exercise
               rights, if applicable under any such Award, the Executive shall
               be treated as if he had retired from the service of the Company
               at or after age 55 and completion of ten years of service.

          j)   Outplacement and Financial Planning.  The Company shall, at
               its sole expense as incurred, provide the Executive with
               outplacement services, the scope and provider of which shall be
               selected by the Executive in his sole discretion (but at a cost
               to the Company of not more than $30,000) or, at the Executive's
               option, the use of office space, office supplies and equipment
               and secretarial services for a period not to exceed one year.
               The Company shall also continue to provide the Executive with
               financial planning counseling benefits through the third
               anniversary of the date of the Executive's termination of
               employment, on the same terms and conditions as were in effect
               immediately before the termination or, if more favorable, on the
               Effective Date.

6.   Obligation  of  the  Company on  a  Covered  Termination  of
     Employment Associated with a Change in Control of the Company.
     In the event of a Covered Termination of Employment Associated
     with a Change in Control of the Company, then the Company shall
     provide the Executive with the same compensation and benefits and
     subject to the same terms and conditions as are specified in
     Section  5  above; provided, however that  (i)  the  special
     compensation provided for in Section 5(c) shall be three times
     (rather than two times) the sum of the amounts specified  in
     subsection  (a)  and (b) of Section 5(c), (ii)  the  special
     retirement plans lump sum provided for in Section 5(d) shall be
     calculated as if the Executive's employment has continued for a
     three-year period (rather than a two-year period) following his
     termination  of  employment and (iii) the  welfare  benefits
     provision of Section 5(f) shall be provided for a three-year
     period (rather than a two-year period).  In addition, the tax
     gross-up provisions of Section 7 hereof shall apply.  Further,
     the deferral election for the Executive described in Section 5(f)
     above shall apply, but only if the written irrevocable deferral
     form is filed with the Company prior to the  first date on which
     a change in Control of the Company occurs.

7.   Certain Additional Payments by the Company.

     (a)  Anything in this Agreement to the contrary notwithstanding,
          and whether or not a Covered Termination of Employment occurs, in
          the event it shall be determined that any payment or distribution
          by the Company to or for the benefit of the Executive (whether
          paid or payable or distributed or distributable pursuant to the
          terms of this Agreement or otherwise, but determined without
          regard to any additional payments required under this Section 7)
          (a "Payment") would be subject to the excise tax imposed by
          Section 4999 of the Internal Revenue Code of 1986, as amended
          (the "Code") or any interest or penalties are incurred by the
          Executive with respect to such excise tax (such excise tax,
          together with any such interest and penalties, are hereinafter
          collectively referred to as the "Excise Tax"), then the Executive
          shall be entitled to receive an additional payment (a "Gross-Up
          Payment") in an amount such that after payment by the Executive
          of all taxes (including any interest or penalties imposed with
          respect to such taxes), including, without limitation, any income
          taxes (and any interest and penalties imposed with respect
          thereto) and Excise Tax imposed on the Gross-Up Payment, the
          Executive retains an amount of the Gross-Up Payment equal to the
          Excise Tax imposed upon the Payments

     (b)  Subject to the provisions of paragraph (c) of this Section
          7, all determinations required to be made under this Section 7,
          including whether and when a Gross-Up Payment is required and the
          amount of such Gross-Up Payment and the assumptions to be
          utilized in arriving at such determination, shall be made by a
          certified public accounting firm designated by the Executive (the
          "Accounting Firm"), which shall provide detailed supporting
          calculations both to the Company and the Executive within fifteen
          business days of the receipt of notice from the Executive that
          there has been a Payment, or such earlier time as is requested by
          the Company.  In the event that the Accounting Firm is serving as
          accountant or auditor for the individual, entity or group
          effecting the Change in Control, the Executive shall appoint
          another nationally recognized accounting firm to make the
          determinations required hereunder (which accounting firm shall
          then be referred to as the Accounting Firm hereunder).  All fees
          and expenses of the Accounting Firm shall be borne solely by the
          Company.  Any Gross-Up Payment, as determined pursuant to this
          Section 7, shall be paid by the Company to the Executive within
          five days of the receipt of the Accounting Firm's determination.
          Any determination by the Accounting Firm shall be binding upon
          the Company and the Executive.  As a result of the uncertainty in
          the application of Section 4999 of the Code at the time of the
          initial determination by the Accounting Firm hereunder, it is
          possible that Gross-Up Payments which will not have been made by
          the Company should have been made ("Underpayment"), consistent
          with the calculations required to be made hereunder.  In the
          event that the Company exhausts its remedies pursuant to
          paragraph (c) of this Section 7 and the Executive thereafter is
          required to make a payment of any Excise Tax, the Accounting Firm
          shall determine the amount of the Underpayment that has occurred
          and any such Underpayment shall be promptly paid by the Company
          to or for the benefit of Executive.

     (c)  The Executive shall notify the Company in writing of any
          claim by the Internal Revenue Service that, if successful, would
          require the payment by the Company of the Gross-Up Payment.  Such
          notification shall be given as soon as practicable but no later
          than ten business days after the Executive is informed in writing
          of such claim and shall apprise the Company of the nature of such
          claim and the date on which such claim is requested to be paid.
          The Executive shall not pay such claim prior to the expiration of
          the thirty-day period following the date on which he gives such
          notice to the Company (or such shorter period ending on the date
          that any payment of taxes with respect to such claim is due).  If
          the Company notifies the Executive in writing prior to the
          expiration of such period that it desires to contest such claim,
          the Executive shall:

          (i)  give the Company any information reasonably requested by the
               Company relating to such claim,

          (ii) take such action in connection with contesting such claim as
               the Company shall reasonably request in writing from time to
               time, including, without limitation, accepting legal
               representation with respect to such claim by an attorney
               reasonably selected by the Company.

          (iii)     cooperate with the Company in good faith in order
               effectively to contest such claim, and

          (iv) permit the Company to participate in any proceedings
               relating to such claim;

          provided, however, that the Company shall bear and  pay
          directly  all costs and expenses (including  additional
          interest  and  penalties) incurred in  connection  with
          such contest and shall indemnify and hold the Executive
          harmless, on an after-tax basis, for any Excise Tax  or
          income  tax  (including  interest  and  penalties  with
          respect   thereto)  imposed  as  a   result   of   such
          representation  and  payment  of  costs  and  expenses.
          Without limitation on the foregoing provisions of  this
          paragraph  (c) of Section 7, the Company shall  control
          all  proceedings taken in connection with such  contest
          and,  at its sole option, may pursue or forego any  and
          all  administrative appeals, proceedings, hearings  and
          conferences  with the taxing authority  in  respect  of
          such  claim and may, at its sole option, either  direct
          the  Executive  to pay the tax claimed and  sue  for  a
          refund  or contest the claim in any permissible manner,
          and the Executive agrees to prosecute such contest to a
          determination before any administrative tribunal, in  a
          court  of  initial  jurisdiction and  in  one  or  more
          appellate  courts,  as  the  Company  shall  determine;
          provided,  however,  that if the  Company  directs  the
          Executive  to pay such claim and sue for a refund,  the
          Company shall advance the amount of such payment to the
          Executive,   on  an  interest-free  basis   and   shall
          indemnify  and  hold  the  Executive  harmless,  on  an
          after-tax  basis,  from any Excise Tax  or  income  tax
          (including interest or penalties with respect  thereto)
          imposed with respect to such advance or with respect to
          any  imputed  income with respect to such advance;  and
          provided, further, that any extension of the statute of
          limitations  relating  to  payment  of  taxes  for  the
          taxable  year  of the Executive with respect  to  which
          such  contested amount is claimed to be due is  limited
          solely  to  such  contested amount.   Furthermore,  the
          Company's  control of the contest shall be  limited  to
          issues  with respect to which a Gross-Up Payment  would
          be   payable  hereunder  and  the  Executive  shall  be
          entitled to settle or contest, as the case may be,  any
          other  issue raised by the Internal Revenue Service  or
          any other taxing authority.

     (d)  If, after the receipt by the Executive of an amount advanced
          by the Company pursuant to paragraph (c) of this Section 7, the
          Executive becomes entitled to receive any refund with respect to
          such claim, the Executive shall (subject to the Company's
          complying with the requirements of paragraph (c) of this Section
          7) promptly pay to the Company the amount of such refund
          (together with any interest paid or credited thereon after taxes
          applicable thereto).  If after the receipt by the Executive of an
          amount advanced by the Company pursuant to paragraph (c) of this
          Section 7, a determination is made that the Executive shall not
          be entitled to any refund with respect to such claim and the
          Company does not notify the Executive in writing of its intent to
          contest such denial of refund prior to the expiration of thirty
          days after such determination, then such advance shall be
          forgiven and shall not be required to be repaid and the amount of
          such advance shall offset, to the extent thereof, the amount of
          Gross-Up Payment required to be paid.

8.   Termination of Employment.  The Company shall be entitled to
     terminate the Executive's employment on account of Disability
     pursuant to the procedures set forth in Section (e)  of  the
     Appendix, for Cause pursuant to the procedures set forth  in
     Section (a) of the Appendix, or without Cause by giving written
     notice to the Executive of such termination.  The Executive may
     terminate his employment for Good Reason by giving the Company
     written notice of the termination, setting forth in reasonable
     detail the specific conduct of the Company that constitutes Good
     Reason.  A termination of employment by the Executive for Good
     Reason shall be effective on the fifth business day following the
     date such notice is given, unless the notice sets forth a later
     date (which date shall in no event be later than thirty days
     after the notice is given).  In the event of a dispute regarding
     whether the Executive's voluntary termination qualifies as a
     termination for Good Reason, no claim by the Company that the
     same does not constitute a termination for Good Reason shall be
     given  effect  unless the Company establishes by  clear  and
     convincing evidence that such termination does not constitute a
     termination for Good Reason.  The Executive may also terminate
     his employment without Good Reason by giving the Company written
     notice of such termination.

9.   Obligations of the Company on Termination of Employment  for
     Death, Disability, for Cause or by the Executive Other than for
     Good Reason.  If the Executive's employment is terminated by
     reason  of  his  death  or Disability  (but  not  under  the
     circumstances covered by paragraph (c)(iv) of the Appendix), or
     if such employment is terminated by the Company for Cause or by
     the Executive other than for Good Reason, the Company will pay to
     the  Executive's estate or legal representative  or  to  the
     Executive, as the case may be, all accrued but unpaid base salary
     and  all other benefits and amounts which may become due  in
     accordance  with the terms of any applicable  benefit  plan,
     contract, agreement or practice, including amounts which may have
     become due under the terms of Sections 3 and 4 of this Agreement,
     but no other compensation or benefits will be paid under this
     Agreement.

10.  Non-Compete Agreement.  In consideration of this  Agreement,
     the Executive agrees that he will not, for a period of one year
     from the date of his or her termination of employment with the
     Company, directly or indirectly own, manage, operate,  join,
     control,  be  employed by, or participate in the  ownership,
     management, operation or control of, or be connected in  any
     manner, including but not limited to, holding the position of
     shareholder,  director,  officer,  consultant,   independent
     contractor, executive partner, or investor with any "Competing
     Enterprise."   For purposes of this paragraph, a  "Competing
     Enterprise"  means any entity, firm or person engaged  in  a
     business within the State of Wisconsin or the upper peninsula
     area of the State of Michigan (the "Territory") which is  in
     competition with any of the businesses of the Company or any of
     its  subsidiaries within the Territory as of  the  date  the
     Executive's termination of employment, and whose aggregate gross
     revenues, calculated for the most recently completed fiscal year
     of the Competing Enterprise, derived from all such competing
     activities within the Territory during such fiscal year, equal at
     least 10% or more of such Enterprise's consolidated net revenues
     for such fiscal year.  If the Executive notifies the Company in
     writing of any employment or opportunity which the Executive
     proposes to undertake during the one year non-compete period, and
     supplies the Company with any additional information which the
     Company may reasonably request, the Company agrees to promptly
     notify the Executive within thirty days after all information
     reasonably requested by it has been provided, whether the Company
     considers the proposed employment or opportunity to be prohibited
     by these provisions and, if so, whether the Company is willing to
     waive the same.  Notwithstanding anything in this Section 10, the
     Executive shall not be prohibited from acquiring or holding up to
     2% of the common stock of an entity that is traded on a national
     securities exchange or a nationally recognized over-the-counter
     market.

11.  Relocation Benefit.  The Company will provide the  Executive
     with the same relocation benefits for his move from his current
     residence to a residence near the Company's principal office in
     Milwaukee,  Wisconsin as are provided on the  date  of  this
     Agreement to the Company's President.

12.  Successors and Binding Agreements.

     (a)  The Company shall require any successor (whether direct or
          indirect, by purchase, merger, consolidation, reorganization or
          otherwise) to all or substantially all of the business and/or
          assets of the Company expressly to assume and to agree to perform
          this Agreement in the same manner and to the same extent the
          Company would be required to perform if no succession had taken
          place.  This Agreement shall be binding upon and inure to the
          benefit of the Company and any such successor, and such successor
          shall thereafter be deemed the "Company" for the purposes of this
          Agreement.

     (b)  This  Agreement shall inure to the benefit  of  and  be
          enforceable by the Executive's respective personal or legal
          representative, executor, administrator, successor, heirs,
          distributees and/or legatees.

     (c)  Neither the Company nor the Executive may assign, transfer
          or delegate this Agreement or any rights or obligations hereunder
          except as expressly provided in this Section.  Without limiting
          the generality of the foregoing, the Executive's right to receive
          payments hereunder shall not be assignable or transferable,
          whether by pledge, creation of a security interest or otherwise,
          other than by a transfer by will or the laws of descent and
          distribution.  In the event the Executive attempts any assignment
          or transfer contrary to this Section, the Company shall have no
          liability to pay any amount so attempted to be assigned or
          transferred.

13.  Notices.  All communications provided for herein shall be in
     writing  and  shall be deemed to have been duly  given  when
     delivered or five business days after having been mailed  by
     United  States registered or certified mail, return  receipt
     requested, postage prepaid, addressed to the Company (to the
     attention  of the Secretary of the Company) at its principal
     executive office and to the Executive at his principal residence,
     or to such other address as any party may have furnished to the
     other in writing in accordance herewith, except that notices of a
     change of address shall be effective only upon receipt.

14.  Governing  Law.  The validity, interpretation,  construction
     and performance of this Agreement shall be governed by the laws
     of the State of Wisconsin without giving effect to the principles
     of conflict of laws of such state, except that Section 15 shall
     be construed in accordance with the Federal Arbitration Act.

15.  Resolution  of  Disputes.   The parties  shall  endeavor  to
     resolve any dispute arising out of or relating to this Agreement
     by  mediation  in Milwaukee, Wisconsin, under the  Mediation
     Procedure of the Center for Public Resources ("CPR").  Unless the
     parties agree otherwise, the mediator will be selected from the
     CPR Panels of Distinguished Neutrals.  Any such dispute which
     remains unresolved 45 days after appointment of a mediator, shall
     be finally resolved by arbitration in Milwaukee, Wisconsin, by a
     sole  arbitrator  in  accordance  with  the  CPR  Rules  for
     Non-Administered Arbitration, and judgment  upon  the  award
     rendered by the arbitrator may be entered by any court having
     jurisdiction thereof.  The Company will pay any fees and costs of
     the mediator in connection with the mediation, but the parties
     agree  to  each pay one-half of the fees and  costs  of  the
     arbitrator in connection with the arbitration.

16.  Validity.   The  invalidity  or  unenforceability   of   any
     provision of this Agreement shall not affect the validity or
     enforceability of any other provision of this Agreement which
     shall remain in full force and effect.  If any provision of this
     Agreement shall be held invalid or unenforceable in part, the
     remaining portion of such provision, together with all other
     provisions of this Agreement, shall remain valid and enforceable
     and  continue in full force and effect to the fullest extent
     consistent with law.

17.  Entire  Agreement;  Amendments.  This Agreement  constitutes
     the  entire understanding and agreement of the parties  with
     respect to the matters discussed herein and supersedes all other
     prior agreements and understandings, written or oral, between the
     parties with respect thereto.  There are no representations,
     warranties or agreements of any kind relating thereto that are
     not set forth in this Agreement.  This Agreement may not  be
     amended or modified except by a written instrument signed by the
     parties  hereto  or  their respective successors  and  legal
     representatives.

18.  Withholding.   The  Company may withhold  from  any  amounts
     payable under this Agreement all federal, state and other taxes
     as shall be legally required.

19.  Certain Limitations.  Nothing in this Agreement shall  grant
     the Executive any right to remain an executive, director  or
     employee of the Company or of any of its subsidiaries for any
     period of time.

IN  WITNESS WHEREOF, the parties have executed this Agreement  on
the day and date first written above.

                                 WISCONSIN ENERGY CORPORATION


/s/Allen L. Leverett                   By: /s/Richard A. Abdoo
____________________                       ___________________
ALLEN L. LEVERETT

EX-10

Exhibit 10.4

To: Richard Abdoo

Dear Mr. Abdoo,

This letter will confirm our previous discussions where I informed you of my intent to retire and will serve as an addendum ("the Addendum") to the May 1, 2002 Amended and Restated Senior Officer Employment, Change in Control, Severance and Non-Compete Agreement ("the Agreement"). The following will set forth the terms for my retirement and my future assistance in support of our "Power the Future" initiative:

1.     I will announce on July 24, 2003 my intention to retire as an employee effective March 1, 2004. I am resigning all officer titles with the Company and its subsidiaries except those of President and CEO of We Generation, COO of Wisconsin Electric Power Co., and Executive Vice President of WEC effective July 31, 2003. In addition, I will resign all of my director positions and responsibilities that I currently hold in connection with my employment with the Company effective July 31, 2003.

2.     Until my retirement on March 1, 2004 ("the Interim Period") or such time as a successor(s) to me is named, I will continue to function as President and CEO of We Generation, COO of Wisconsin Electric Power Co. (including my work with EPRI and AEIC) and Executive Vice President of WEC. Should a successor(s) to me be named prior to my retirement on March 1, 2004, I will remain employed by the Company in the capacity of Special Advisor to the WEC President. Until my retirement, I will be active and engaged in matters appropriate to my titles and will report to Gale Klappa. I will continue to serve as the employee member of the WEC Nuclear Oversight Committee if the Company so desires.

3.     My retirement shall be treated as a "Good Reason" termination of employment under the Agreement and the Company agrees not to contest my resignation as qualifying as such under the Agreement, nor my right to all related payments and benefits.

4.     The Company may replace me prior to March 1, 2004, at its election, but in the event the Company terminates me for a reason not constituting "Cause" as defined in the Agreement, it will continue to pay my salary and all benefits through March 1, 2004, in addition to all other benefits provided under the Agreement and this Addendum. If, during the Interim Period, the Company terminates my employment for reasons constituting "Cause," the Company will be relieved of any further obligation to pay my salary or bonus through March 1, 2004. However in such case, since the Company has already accepted my resignation for "Good Reason," the Company shall remain obligated to pay me all benefits I would have received for a "Good Reason" termination under the Agreement effective as of July 31, 2003. In the event of my death during the Interim Period, the Company shall pay to my spouse, or such other beneficiaries as designated, all compensation and benefits I would have received unde r the Agreement and the Addendum as if my retirement had occurred on March 1, 2004.

5.     During the Interim Period, my base salary will not be adjusted nor will I receive additional equity or equity-linked awards. I will continue to be eligible to participate in other executive benefit plans on a basis commensurate with other senior officers of the Company.

6.     The Company agrees to pay my SERP "A" and "B" benefits in a single lump sum promptly after my separation from the Company. The Company shall pay all nonqualified pension benefits as provided in the June 9, 2003 letter from Towers Perrin projecting benefits as of March 1, 2004.

7.     The Company will pay 100% of my 80% target bonus for 2003, plus an additional lump sum award of $30,000, on or before February 29, 2004. The Company will also pay me a prorated bonus through March 1, 2004, based upon 100% of my 80% target bonus.

8.     The Company recognizes my vested status as a participant in the Directors' Charitable Award program and will continue to honor its commitments under the program on a basis commensurate with other retired directors of Wisconsin Energy Corporation.

9.     I agree to assist the Company with my testimony and best efforts regarding our "Power the Future" initiative until March 1, 2004.

Please confirm your agreement with this Addendum by signing below and returning a copy to me no later than July 24, 2003.

Sincerely,

/s/  RICHARD R. GRIGG         
      Richard R. Grigg

Accepted:

Date:    7/23/2003 4:22pm CDT  

Wisconsin Energy Corporation

By: /s/  RICHARD A. ABDOO   
            Richard A. Abdoo

EX-31

Exhibit 31.1

Certification Pursuant to
Rule 13a-14(a) or 15d-14(a),
as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard A. Abdoo, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Wisconsin Energy Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)      Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:         August 1, 2003

                  /s/ Richard A. Abdoo           
                  Richard A. Abdoo
                  Chief Executive Officer

EX-31

Exhibit 31.2

Certification Pursuant to
Rule 13a-14(a) or 15d-14(a),
as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Allen L. Leverett, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Wisconsin Energy Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)      Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:          August 1, 2003

                  /s/ Allen L. Leverett      
                  Allen L. Leverett
                  Chief Financial Officer

EX-32

Exhibit 32.1

Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Wisconsin Energy Corporation (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on August 1, 2003 (the "Report"), I, Richard A. Abdoo, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

        (1)     The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

        (2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard A. Abdoo      
Richard A. Abdoo
Chief Executive Officer
August 1, 2003

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Wisconsin Energy Corporation and will be retained by Wisconsin Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32

Exhibit 32.2

Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Wisconsin Energy Corporation (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on August 1, 2003 (the "Report"), I, Allen L. Leverett, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

        (1)     The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

        (2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Allen L. LeverettAllen L. Leverett
Chief Financial Officer
August 1, 2003

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Wisconsin Energy Corporation and will be retained by Wisconsin Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.