EMPLOYEE PERFORMANCE SHARE UNIT AWARD AGREEMENT
Exhibit
10.9.8
SEMCO
ENERGY, INC. 2004
Stock Award and Incentive Plan
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Grantee:
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[First
Middle Last]
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Target
Grant:
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[
]
units
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Performance
Period
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_____________
through
_____________
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Grant
Date:
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_______________
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THIS
PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”) is effective as of the Grant Date
stated above, by and between SEMCO Energy, Inc. and the Grantee.
WHEREAS,
the Performance Share Units described in this Agreement have been granted
pursuant to, and are governed by, the Plan;
NOW,
THEREFORE, the Company and the Grantee hereby agree as follows:
1. Performance
Share Unit Grant.
Subject
to the terms and conditions of this Agreement, the Company hereby grants to
Grantee a Target Grant of Performance Share Units as specified
above.
2. Award
of Performance Share Units.
(a) The
Grantee will receive an award of a percentage of his Target Grant of Performance
Share Units as of the last day of the Performance Period if he remains actively
employed with the Company on such date and if the threshold level of performance
is met or exceeded with respect to at least one of the performance goals
established by the Committee for such Performance Period.
(b) Schedule
A to this Agreement sets forth ▇▇▇▇▇▇▇’s performance goals, the portion of the
Target Grant that will be available for an award with respect to each
performance goal (the “Performance Target”) and the percentage of that
Performance Target that will be awarded based upon the actual performance level
achieved with respect to such performance goal during the Performance Period.
The total Performance Share Units awarded pursuant to this Agreement shall
equal
the sum of the Performance Share Units awarded with respect to each performance
goal.
3. Awards
on Certain Events.
Notwithstanding the requirement in Section 2 of this Agreement that a Grantee
be
actively employed on the last day of the Performance Period:
| a) |
Performance
Share Units shall be awarded at the end of the Performance Period
pursuant
to Section 2 to any Grantee who terminates employment during the
Performance Period:
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| (i) | on the Grantee’s Retirement Date; | |
| (ii) | on the Grantee’s Disability Retirement Date; | |
| (iii) | on the date of the Grantee’s death prior to his termination of employment from the Corporation; or | |
| (iv) | as a result of a Change in Control. |
The
number of Performance Share Units awarded pursuant to this Section 3(a) shall
equal the product of the Performance Share Units that would otherwise be awarded
had the Grantee remained employed until the last day of the Performance Period
multiplied by (1) the number of days the Grantee was employed during the
Performance Period over (2) the number of days in the Performance
Period.
| b) |
In
the event that a transaction constituting a Change in Control is
consummated, as of the date on which such a transaction is effective,
as
provided in the agreement therefore, Section 3(a)(iv) of this Agreement
is
superseded and the following shall
occur:
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2
The
performance goals established in Section 2(b) of this Agreement shall be deemed
to have been met at target, and all Performance Shares Units under this
Agreement may be adjusted by the Committee in accordance with the terms of
the
Plan including, but not limited to, its authority to do so under Section 11(c)
thereof.
4. Delivery of Shares.
Upon
certification by the Committee of the achieved performance under the established
performance goals for the Performance Period, the Performance Share Units
awarded pursuant to Section 2 shall be paid to the Grantee in shares of Stock.
Payment of such Shares shall in no event be made later than the date which
is 2
½ months after the end of the taxable year in which the Performance Period ends.
Certificates representing such shares of Stock shall be delivered to the Grantee
as soon as practicable after such payment.
5. Ownership
Rights.
Upon
certification by the Committee in accordance with Section 4 above, the Grantee
shall exercise all ownership rights (including, without limitation, the right
to
vote and the right to receive dividends) with respect to such shares, provided
that voting and dividend rights with respect to the shares will be exercisable
only if the record date for determining shareholders entitled to vote, or to
receive dividends, falls on or after the date of such certification.
6. Deferral
of Exercise or Delivery of Shares.
Notwithstanding any provision in this Agreement to the contrary, if any law
or
regulation of any governmental authority having jurisdiction in the matter
requires the Company, the Committee or the Grantee to take any action or refrain
from action in connection with the award of or delivery of Performance Share
Units or Stock under this Agreement, or to delay such award or delivery, then
the award or delivery of such shares shall be deferred until such action has
been taken or such restriction on action has been removed.
7. General
Provisions.
The
Grantee acknowledges that he has read, understands and agrees with all of the
provisions in this Agreement and the Plan, including (but not limited to) the
following:
3
(a) Authority
of Committee.
The
Committee shall have all the authority set forth in the Plan including, but
not
limited to, the authority to administer the Agreement and the Plan; to make
all
determinations with respect to the construction and application of the
Agreement, the Plan, and the resolutions of the Board of Directors establishing
the Plan; to adopt and revise rules relating to the Agreement and the Plan;
and
to make other determinations which it believes are necessary or advisable for
the administration of the Agreement and the Plan. Any dispute or disagreement
which arises under this Agreement or the Plan shall be resolved by the Committee
in its absolute discretion. Any such determination, interpretation, resolution,
or other action by the Committee shall be final, binding and conclusive with
respect to the Grantee and all other persons affected thereby.
(b) Notices.
Any
notice which is required or permitted under this Agreement shall be in writing
(unless otherwise specified in the Agreement or in writing from the Company
to
the Grantee), and delivered personally or by mail, postage prepaid, addressed
as
follows: (i) if to the Company, at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. A, Port Huron,
Michigan 48060, Attention: Corporate Secretary, or at such other address as
the
Company by notice to the Grantee may have designated from time to time; (ii)
if
to the Grantee, at the address indicated in the Grantee's then-current personnel
records, or at such other address as the Grantee by notice to the Company may
have designated from time to time. Such notice shall be deemed given upon
receipt.
(c) Taxation.
The
Grantee shall be responsible for all applicable income and withholding taxes
and
the employee share of FICA taxes with respect to any compensation income
generated upon the award of his vested Performance Shares under this Agreement.
The Company may reduce the number of Performance Share Units awarded (and shares
of Stock delivered) to the Grantee to pay the applicable FICA withholding taxes
on the vested Performance Share Units and any federal and state income tax
withholdings related to such FICA amount.
(d) Non-transferability.
This
Agreement and the Performance Share Units granted to the Grantee shall be
nontransferable and shall not be sold, hypothecated or otherwise assigned or
conveyed by the Grantee to any other person, except as specifically permitted
in
this Agreement. No assignment or transfer of this Agreement or the rights
represented thereby, whether voluntary or involuntary, or by operation of law
or
otherwise, shall vest in the assignee or transferee any interest or right
whatsoever, except as specifically permitted in this Agreement. The Agreement
shall terminate, and be of no force or effect, immediately upon any attempt
to
assign or transfer the Agreement or any of the Performance Share Units to which
the Agreement applies.
4
(e) Designation
of Beneficiary. Notwithstanding
anything in Section 7(d) to the contrary, the Grantee may designate a person
or
persons to receive, in the event of his death, any rights to which he would
be
entitled under this Agreement. Such a designation shall be filed with the
Company in accordance with uniform procedures specified by the Committee. The
Grantee may change or revoke a Beneficiary designation at any time by filing
a
written statement of such change or revocation with the Company in accordance
with uniform procedures specified by the Committee. No Beneficiary designation
or change of Beneficiary designation will be effective until notice thereof
is
received. If ▇▇▇▇▇▇▇ fails to designate a Beneficiary or if the Beneficiary
predeceases the Grantee, the legal representative of ▇▇▇▇▇▇▇'s estate shall
be
deemed to be his Beneficiary for purposes of this Agreement. The Grantee is
not
required to obtain spousal consent to designate someone other than the spouse
as
beneficiary.
(f) No
Shareholder Rights.
Except
as otherwise specifically provided in Section 5 of this Agreement, the Grantee
shall have no rights as a shareholder of the Company and shall not be deemed
to
be a shareholder of the Company for any purpose.
(g) Not
an Employment Contract.
This
Agreement shall not be deemed to limit or restrict the right of the Company
to
terminate the Grantee's employment at any time, for any reason, with or without
cause, or to limit or restrict the right of the Grantee to terminate his
employment with the Company at any time.
(h) Fractional
Shares.
Notwithstanding anything in this Agreement to the contrary, in the event that
any adjustment to the Target Grant or an award of Performance Share Units or
the
calculation of an award pursuant to this Agreement would otherwise result in
the
creation of a fractional share interest, the affected Target Grant or
Performance Share Unit award shall be rounded up to the nearest whole
share.
5
(i) Amendment
or Termination.
This
Agreement may be amended or terminated at any time by the mutual agreement
and
written consent of the Grantee and the Committee, but only to the extent
permitted under the Plan.
(j) Governing
Instrument.
This
Agreement is subject to all terms and conditions of the Plan and shall at all
times be interpreted in a manner that is consistent with the intent, purposes,
and specific language of the Plan.
(k) Severability.
If any
provision of this Agreement should be held illegal or invalid for any reason
by
the Committee or court of applicable jurisdiction, such determination shall
not
affect the other provisions of this Agreement, and it shall be construed as
if
such provision had never been included herein.
(l) Headings/Gender.
Headings in this Agreement are for convenience only and shall not be construed
to be part of this Agreement. Any reference to the masculine, feminine or neuter
gender shall be a reference to other genders as appropriate.
(m) Governing
Law.
This
Agreement shall be construed, and its provisions enforced and administered,
in
accordance with the laws of the State of Michigan and, where applicable, federal
law.
8. Definitions.
All
capitalized terms shall have the meaning set forth in the Plan or, if not
defined in the Plan, shall be defined as set forth below.
(a) Change
of Control has
the
meanings specified in Section 9(c) of the Plan.
(b) Company
means
SEMCO Energy, Inc., its successors and assigns, and any other Company or other
entity, whether foreign or domestic, in which the Company has or obtains,
directly or indirectly, a proprietary interest of more than eighty percent
(80%)
by reason of stock ownership or otherwise.
6
(c) Disability
Retirement Date
means
the date of the Grantee’s termination of employment from the Company due to
Disability. For purposes of this Agreement, Disability means a “disability”
as defined under the SEMCO Energy, Inc. Long-Term Disability Plan (whether
or
not the Grantee is covered under such plan).
(d) Grant
Date
means
the date set forth on the first page of this Agreement.
(e) Grantee
means
the Eligible Person named on the first page of this Agreement.
(f) Retirement
Date
means
the Grantee’s date of termination from the Company on which ▇▇▇▇▇▇▇ is eligible
to receive an immediate annuity under the terms of the SEMCO Energy, Inc.
Retirement Plan (or any successor tax-qualified retirement plan maintained
for
salaried employees of the Company).
(g) Performance
Period means
the
period during which the performance goals established by the Committee will
be
measured to determine whether any of the Performance Share Units will be awarded
to Grantee pursuant to Section 2, which period is specified on the first page
of
this Agreement.
(h) Performance
Share Units
means
the measurement unit, representing shares of Stock, which is granted under
the
terms and conditions of this Agreement.
(i) Plan
means
the SEMCO Energy, Inc. 2004 Stock Award and Incentive Plan, as adopted by the
Board of Directors on March 12, 2004, and approved by the Company’s shareholders
on May 24, 2004, and as amended from time to time.
(j) Target
Grant means
the
number of Performance Share Units specified on the first page of this
Agreement.
7
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officers under its corporate seal, and the Grantee has executed
this Agreement, as of the day and year first above written.
| SEMCO ENERGY, INC. | ||
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| By: | ||
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| ATTEST: | ||
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| Corporate Secretary | ||
| GRANTEE | ||
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| Name: | ||
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8
Schedule
A
LTIP
Performance Cycle
Performance
Share Target(s)
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Weighting
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Performance
Target
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Determination
of Award
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Achievement
Level of Performance
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Award
as Percentage of Performance Target
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Threshold
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25.0%
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25.0%
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30.0%
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30.0%
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35.0%
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35.0%
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40.0%
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40.0%
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45.0%
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45.0%
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50.0%
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50.0%
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55.0%
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55.0%
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60.0%
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60.0%
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65.0%
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65.0%
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70.0%
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70.0%
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75.0%
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75.0%
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80.0%
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80.0%
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85.0%
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85.0%
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90.0%
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90.0%
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95.0%
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95.0%
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Target
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100%
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100%
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105.0%
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105.0%
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110.0%
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110.0%
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115.0%
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115.0%
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120.0%
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120.0%
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125.0%
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125.0%
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130.0%
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130.0%
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135.0%
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135.0%
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140.0%
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140.0%
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145.0%
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145.0%
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Maximum
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150.0%
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150.0%
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GRANTEE
ACKNOWLEDGEMENT
I,
the
undersigned, hereby affirm that I have read the Performance Share Unit Award
Agreement and this Schedule A and understand the terms and conditions of this
award.
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| Signature |