Exhibit 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
This is an Amendment dated August 10, 2001, to that certain Employment
Agreement ("Employment Agreement") by and between Southeastern Michigan Gas
Enterprises, Inc., a Michigan corporation, (the "Company") and Xxxxxxx X.
Xxxxxxx (the "Executive"), dated as of the 10th day of October, 1996, EXHIBIT A
hereto. Company's name has been changed to SEMCO Energy, Inc.
Effective June 1, 2001, executive will continue to serve as Chairman of the
Board of the Company, and Executive will no longer serve as President and CEO of
the Company. Executive and the Company desire to provide for the continued
services of Executive as Chairman of the Board of the Company and Executive's
retirement on February 28, 2002.
NOW, THEREFORE, the Employment Agreement is hereby amended as follows:
1. The Employment Period shall end on February 28, 2002, which shall be
Executive's retirement date.
2. From June 1, 2001, until February 28, 2002:
a. Executive shall serve only as Chairman of the Board of the Company,
and perform other duties as reasonably requested by the Board of Directors of
the Company; and
b. Executive shall continue to receive his present salary of $406,000
and shall continue to be eligible for his current benefits.
3. Executive shall continue to be eligible for a bonus with respect to 2001
in accordance with the Company's Short Term Incentive Plan.
4. Executive's Supplemental Executive Retirement Plan Executive Security
Agreement dated February 12, 1997, as amended April 14, 2000, EXHIBIT B hereto,
shall be amended as shown in the Amendment, EXHIBIT C hereto, to provide as
follows:
a. The monthly Retirement Benefit provided for in Article 2.1(a) shall:
i. Commence March 1, 2002, and continue for 180 months;
ii. For the payments from March 1, 2002, to December 1, 2002, be
equal to $16,667 per month; and
iii. For payments subsequent to December, 2002, be equal to
$16,667 per month less Executive's monthly benefit paid or payable under the
Company's qualified pension plan of one of the following, as elected by
Executive:
(1) Single Life Annuity at Age 60 ($921.08), or
(2) Joint and Survivor 50% at Age 60 ($851.72)
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b. The Company's contribution to an Executive Security Trust ("Rabbi
Trust") under the Executive Security Trust Agreement, EXHIBIT D HERETO, in
accordance with Article 8.2(1) of the Executive Security Agreement shall be made
March 1, 2002, regardless of whether a Change of Control shall have occurred, in
an amount needed to fully fund the amounts described in paragraph 4.a., above,
in accordance with the Amendment to Executive Security Trust Agreement,
substantially in the form of EXHIBIT E hereto. Further, in the event Company
amends the Executive Security Trust Agreement or enters into another similar
agreement with a successor trustee to the effect that the Trustee or successor
trustee shall maintain a separate account or record indicating the percentage of
the trust that may be allocated ("Account") for each Plan Participant, then a
separate Account will be established for each participant in the Rabbi Trust,
including Executive.
5. All rights of the Company and Executive with respect to the Split Dollar
Life Insurance funding the Pre-Retirement Death Benefit under the Executive
Security Agreement shall be determined in accordance with the Split Dollar
Agreement, EXHIBIT F hereto, and policies issued in connection with that Split
Dollar Agreement.
6. The provisions of paragraph 4, above, shall not diminish Executive's
rights under the Company's qualified pension plan.
7. The Company shall amend its retiree medical plan to allow retirement at
age 59 with at least five years of service, coverage to begin immediately upon
retirement for persons retiring at age 59 and their surviving spouses.
8. Executive's existing stock option agreements are amended as of the date
hereof in accordance with the Amendment to Stock Option Agreements of even date
herewith, EXHIBIT G, to provide that
a. all of Executive's stock options will be exercisable ("vested") as
of February 28, 2002; and
b. the options and all rights thereunder, to the extent not exercised
as of February 28, 2002, shall terminate as of February 28, 2005.
EXHIBIT G hereto also contains a schedule of Executive's existing stock
options.
9. Executive's Change of Control Employment Agreement dated March 1, 2000,
EXHIBIT H hereto, shall be modified, as shown in EXHIBIT I hereto, to provide as
follows:
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a. The Change of Control Period, as defined in Section 1(b) thereof,
and the Employment Period, as defined in Section 3 thereof, shall end on
February 28, 2002; and
b. Executive's retirement on February 28, 2002 shall be a voluntary
termination in accordance with Section 6(d) thereof.
10. If, prior to February 28, 2002, the Company enters into a definitive
agreement providing for a transaction constituting a Change of Control, which,
by its terms will not be consummated until after February 28, 2002, and Company
desires Executive's services in connection with such transaction, Executive
shall provide such services as requested by the Board of Directors or the
President and CEO of Company for a fee to be agreed upon.
11. This Amendment and the Company's obligations hereunder are subject to
the condition that Executive enter into the Retirement Agreement in the form of
EXHIBIT J hereto on or about February 28, 2002.
12. This Amendment has been approved by the Company's Board of Directors, as
evidenced by the resolutions approving and implementing this Amendment, copies
of which are EXHIBIT K hereto.
Terms capitalized and not defined herein have the meaning given them in the
Employment Agreement. All other terms and conditions of the Employment
Agreement continue in full force and effect.
Witness Company
/s/Xxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxxxx
Its Lead Director
Witness Executive
/s/Xxxxxx X. Xxxxx, Xx. /s/Xxxxxxx X. Xxxxxxx
C:\SEMCO\Xxxx Xxxxxxx\Retirement\Final docs\Amendment to Employment Agreement
Final2.wpdTJuly24, 2001
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Exhibits to Amendment to Employment Agreement
Exhibit A Employment Agreement
Exhibit B Supplemental Executive Retirement Plan Executive
Security Agreement
Exhibit C Amendment to Executive Security Agreement
Exhibit D Executive Security Trust Agreement
Exhibit E Amendment to Executive Security Trust Agreement
Exhibit F Split Dollar Agreement
Exhibit G Amendment of Stock Option Agreements and Schedule
of Existing Stock Options
Exhibit H Change of Control Employment Agreement
Exhibit I Amendment to Change of Control Employment Agreement
Exhibit J Retirement Agreement
Exhibit K Board of Directors Resolutions
C:\SEMCO\Xxxx Xxxxxxx\Retirement\Final docs\Amendment to Employment Agreement
Final2.wpdTJuly24, 2001
