Exhibit 10.12
DEFERRED COMPENSATION
AND
STOCK PURCHASE AGREEMENT
FOR NON-EMPLOYEE DIRECTORS FOR 2001
-----------------------------------
Deferred Compensation and Stock Purchase Agreement for Non-Employee
Directors for 2001 dated _____________________, between SEMCO ENERGY, INC. (the
"Company") and ________________________________ (the "Director"), who agree as
follows:
1. ELECTION OF AMOUNT OF DEFERRED COMPENSATION. The Company and the
Director agree to irrevocably defer payment of the below delineated annual
compensation, which would otherwise be payable to the Director in calendar year
2001. The amounts so deferred are hereinafter referred to as "Deferred
Compensation."
THIS AGREEMENT MUST BE SIGNED BY THE DIRECTOR, AND A COPY DELIVERED TO
THE SECRETARY OF THE COMPANY, PRIOR TO JANUARY 1 OF THE YEAR FOR WHICH IT IS
APPLICABLE. Provided, however, in the case of a new Director, such signing and
delivery must occur no later than 30 days after becoming a Director and must
relate only to services performed by the Director in his (her) capacity as such
after such election.
Compensation to be deferred:
(a) Monthly retainer:
____ All ____ None ____ The first $_________
(b) Board & Committee Meeting Fees:
____ All ____ None ____ The first $_________
(c) ____ Compensation in Lieu of Medical Plan Participation
(this amount is to be invested in common shares only).
2. DEFERRED COMPENSATION ACCOUNT.
(a) The Company shall establish a bookkeeping account (the
"Account") to evidence the Company's liability to the Director under this
Agreement. The Account shall be credited with an amount equal to the Deferred
Compensation otherwise payable.
(b) If the Director checks the appropriate box below, interest on
the Account shall accrue and be credited to the Account at the end of the
calendar year (and at the beginning of the Payment Period described in 3(b)
below) in an amount equal to the Average Balance times the Average Prime Rate
times the portion of the year represented by the operative period where:
(i) "Average Balance" equals the sum of the Account balances
on each day during the operative period, divided by the number of days in the
operative period; and
(ii) "Average Prime Rate" equals the sum of the rates
announced by Michigan National Bank as its prime rate each day during the
operative period, divided by the number of such days.
(c) If the Director checks the appropriate box below, he (she)
will be deemed to have waived interest as described in subparagraph (b) above.
In lieu of such interest, all Deferred Compensation credited to such account
will be used to purchase shares of Company common stock at the price, at the
time and otherwise in the manner actual shares of common stock would be
purchased if such Deferred Compensation were invested in the Company's Direct
Stock Purchase and Dividend Reinvestment Plan ("DRIP") at the earliest DRIP
investment date after the amount is credited to the Account. The Account will
be credited with further shares at the time and otherwise in the manner that an
equal number of actual shares would be credited to a DRIP account for which
dividends are reinvested.
____ (i) I elect to have my Account invested in common stock
(stock issued will be restricted to the extent
required by law).
____ (ii) I elect to have interest paid on my Account at the
Average Prime Rate as described above.
On or before March 31 of each year, the Company will notify the
director in writing of the value of his Account as of the preceding December 31.
(d) Other than for common stock, as described above, the Company
is not required to earmark any assets for payment of, or make any investment
with respect to, the Account. Any assets allocated to pay the Account will at
all times remain subject to the claims of the Company's general creditors, and
will at all times be available for the Company's use for whatever purpose it
desires. The Company shall have, in general, the power to do and perform any
and all acts with respect to any such assets in the same manner and to the same
extent as an individual might or could do with respect to his own property
including the voting of common stock. Except for the common stock, as described
above, the Company may invest in any and all types of property, whether real or
personal, without regard to its location, including stock, securities, and
property of the Company and any business entity controlling, controlled by or
under common control with the Company. No enumeration of specific powers herein
made shall be construed as a limitation upon the foregoing general power, nor
shall any of the powers herein conferred upon the Company be exhausted by the
use thereof, but each shall be continuing.
(e) The Director shall have no property interest whatsoever in any
assets or investments of the Company whether or not any assets are earmarked to
pay the Account. The Director has the status of a general unsecured creditor of
the Company. This Agreement constitutes a mere promise by the Company to make
benefit payments in the future. No trust shall be created by the Company to
hold assets related to this Agreement and this Agreement is intended to be, and
shall be, unfunded for tax purposes and for purposes of Title 1 of ERISA.
3. DISTRIBUTION FROM DEFERRED COMPENSATION ACCOUNT.
(a) Amount of Distribution. The Account shall be valued on the
earliest date it could be distributed pursuant to the election made in (b)
below. Common shares shall be distributed in certificate form. Fractional
shares shall be paid out at the price which would be paid for such shares
pursuant to a DRIP withdrawal effected on that date.
The Company shall have the right to withhold from any payment
made under this Agreement an amount sufficient to satisfy any federal, state or
local tax withholding requirements imposed in connection with such payment.
(b) Election of Commencement of Distribution. By INITIALING his
choice below, the Director IRREVOCABLY elects to receive payment of amounts
credited to the Account:
_____ (i) Within thirty days AFTER the date on which the
Director ceases to be a full-time Director of the
Company or any business entity controlling,
controlled by or under common control with the
Company.
OR
_____ (ii) Within thirty days AFTER January 1, ______.
Note: If this option is chosen, the year must
be filled in.
OR
_____ (iii) Within thirty days AFTER the EARLIER of
January 1, _____ or the date on which the
Director ceases to be a full-time Director of the
Company or any business entity controlling,
controlled by or under common control with the
Company. Note: If this option is chosen, the year
must be filled in.
OR
_____ (iv) Within thirty days AFTER the LATER of January
1, _______ or the date on which the Director ceases
to be a full-time Director of the Company or any
business entity controlling, controlled by or under
common control with the Company. Note: If this
option is chosen, the year must be filled in.
The above thirty-day period is referred to herein as the "Payment
Period."
(c) Date of Payment. The entire value of the Account shall be
paid to the Director on a date, selected at the discretion of the Company,
within the Payment Period elected by the Director.
(d) Selection of Beneficiary. If the Director dies prior to
distribution of the Account, payment of the Account shall be made to the Primary
Beneficiary named below, or, in the event the Primary Beneficiary has
predeceased the Director, to the Alternate Beneficiary named below. The
Director may change beneficiaries at any time by submitting written notice of
such change to the Company. If the Director dies and has not designated a
beneficiary, or if all named beneficiaries have predeceased him, payment from
the Account shall be made to the Director's estate.
The Director hereby designates the following Primary Beneficiary:
Name and Address Relationship to Director
------------------ --------------------------
The Director hereby designates the following Alternate
Beneficiary:
Name and Address Relationship to Director
------------------ --------------------------
4. RESTRICTION AGAINST ALIENATION. Neither the Director nor any
beneficiary shall have any right to sell, assign, transfer, pledge, hypothecate
or otherwise convey or encumber any right to receive any payment hereunder, and
all such payments and all rights thereto are expressly declared to be
non-assignable and non-transferable.
5. AGREEMENT NOT AN EMPLOYMENT AGREEMENT. This Agreement does not
constitute a contract for the employment of the Director by the Company. The
Company reserves the right to modify the Director's compensation.
6. PURPOSE. The purpose of this Agreement is to accomplish the
deferral of the incidence of federal income tax on a Director's deferred fees
and the earnings thereon until such time as a Director, his beneficiary or
estate actually receives payment of the same, and the Agreement shall be
construed in accordance with such purpose.
7. MISCELLANEOUS.
(a) Delivery of Notice. Notice to the Director may be given
either by personal delivery to the Director or by deposit in the United States
Mail, postage prepaid, addressed to his last known address. Notice to a
beneficiary may be given either by personal delivery to the beneficiary or by
deposit in the United States Mail, postage prepaid, addressed to the address set
forth above. Notice to the Company may be given either by delivery in person or
by deposit in the United States Mail, postage prepaid, addressed to
Attn: Corporate Secretary
(b) Governing Law. This Agreement shall be governed by the laws
and rules of the State of Michigan and any other entity whose laws or rules must
be complied with in order to achieve the purposes of this Agreement. Any
provision hereof which precludes the deferral of Deferred Compensation for
federal tax purposes shall be null and void from the start.
(c) Counterparts; Director Acknowledgment. This Agreement may be
executed in several counterparts (i.e. copies), each of which shall be an
original, but such counterparts shall together constitute but one instrument.
The Director acknowledges that he has read all parts of this Agreement and has
sought and obtained satisfactory answers to any questions as to his rights,
obligations, and potential liabilities under this Agreement prior to affixing
his signature or initials to any part of this Agreement.
(d) Immunity. So long as they act in good faith, the Company and
any of its officers, directors, agents, or employees may act pursuant to this
Agreement without any liability to the Director, any beneficiary or any other
person.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
SEMCO ENERGY, INC.
By:____________________________________
______________________________________
Director
DCAG2001.doc(sla)
