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Phantom Stock Purchase Agreement

This is an actual contract by Semco Energy.

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Sectors: Energy
Governing Law: Michigan, View Michigan State Laws
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Deferred Compensation and Phantom Stock Purchase Agreement dated ___________________, between Southeastern Michigan Gas Enterprises, 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 100% of the annual compensation (being the monthly retainer and Board and Committee meeting fees), which would otherwise be payable to the Director in calendar year _____. 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 prior to the date within 30 days after eligibility (i.e. becoming a Director) and must relate only to services performed by the Director in his (her) capacity as such after such election.


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 or such shorter period if the Payment Period begins on a date other than January 1 pursuant to 3(b) below in an amount equal to the Average Balance times the Average Prime Rate 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 phantom shares of Company common stock at the price, at the time and otherwise in the manner actual shares of common stock would be


2 purchased if such Deferred Compensation were invested in the Company's Dividend Reinvestment and Common Stock Purchase Plan ("DRIP") at the earliest DRIP investment date after the amount is credited to the Account. The Account will be credited with further phantom 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 phantom
stock.


_____ (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) 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 the unrestricted assets of the Company, subject to the claims of its general creditors, and will at all times be available for the Company's use for whatever purpose it desire
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