Exhibit 10.16
DEFERRED COMPENSATION
AND
STOCK PURCHASE AGREEMENT
FOR OUTSIDE DIRECTORS FOR 1999
Deferred Compensation and Stock Purchase Agreement for
Outside Directors for 1999 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 1999. 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,
______.
OR
____ (iii) Within thirty days after the earlier of
the date described in (b)(i) and
(b)(ii) above. Note: If this option
is chosen, the year in (b)(ii) above
must be filled in.
OR
____ (iv) Within thirty days after the later of
the date described in (b)(i) and
(b)(ii) above. Note: If this option
is chosen, the year in (b)(ii) above
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
