Non-Employee Directors Compensation and Stock Equivalent Plan Summary
This document outlines the compensation structure for non-employee directors of the company, including annual retainers, meeting fees, and additional retainers for committee chairs. It also describes the Stock Equivalent Plan, which awards stock equivalent units to align directors' interests with shareholders. These units are payable in company stock upon a director's disability or departure. The document notes changes to deferred compensation plans to comply with tax law, freezing participation for new deferrals after January 1, 2005, but maintaining existing awards under prior terms.
Directors’ Compensation
The following table provides information on our compensation and reimbursement practices for non-employee directors. Mr. Kelly, who is employed by us, does not receive any compensation for his Board activities.
| Annual Director Retainer |
| $ | 35,000 |
|
| Board Meeting Attendance Fees (per meeting) |
| $ | 1,500 |
|
| Telephonic Meeting Attendance Fees (per meeting) |
| $ | 650 |
|
| Committee Meeting Attendance Fees (per meeting) |
| $ | 1,500 |
|
| Additional Retainer for Committee Chair: |
|
|
| |
| Governance, Compensation & Nominating Committee |
| $ | 5,000 |
|
| Operations, Nuclear & Environmental Committee |
| $ | 5,000 |
|
| Audit Committee |
| $ | 10,000 |
|
| Finance Committee |
| $ | 5,000 |
|
| Stock Equivalent Units |
| $ | 64,000 |
|
We have a Stock Equivalent Plan for Non-Employee Directors to more closely align directors’ interests with those of our shareholders. Under this Stock Equivalent Plan, which is filed as Exhibit 10.16 to this Form 10-K, directors may receive an annual award of stock equivalent units with each unit having a value equal to one share of our common stock. Stock equivalent units do not entitle a director to vote and are only payable as a distribution of whole shares of the Company’s common stock upon a director’s disability or termination of service. The stock equivalent units fluctuate in value as the value of our common stock fluctuates. Additional stock equivalent units are accumulated upon the payment of, and at the same value as, dividends declared on our common stock.
On May 26, 2005, each non-employee director of the Company received an award of 2,916 stock equivalent units representing approximately $52,800 in cash value. Mr. Richard H. Truly was elected to the board of directors in September 2005 and, in October 2005, Mr. Truly received a pro-rated portion of stock equivalent units valued at approximately $37,100 or 2,053 units. Additional stock equivalent units were accumulated during 2005 as dividends were paid on our common stock.
Prior to 2005, directors were able to participate in a deferred compensation plan that provided for deferral of director retainer and meeting fees until after retirement from the Board. A director could defer director retainer and meeting fees into the Stock Equivalent Plan. A director who elected to defer compensation under this plan may receive a premium of 20% of the compensation that is deferred. In December 2004, the Board amended a number of executive and director compensation plans, including the Stock Equivalent Plan for Non-Employee Directors and the Non-Employee Directors Deferred Compensation Plan, in part to comply with deferred compensation requirements of new Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as added by Section 885 of the American Jobs Creation Act of 2004, and other legislation. As a result of the amendments, participation in the Stock Equivalent Plan for Non-Employee Directors and the Non-Employee Directors Deferred Compensation Plan was frozen. The plans will continue to operate in accordance with their terms with respect to amounts deferred and/or awarded prior to January 1, 2005. It is expected that the plans will be amended in 2006 in order to achieve compliance with the new deferred compensation requirements.
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