Exhibit 10.5
PUGET ENERGY, INC. & PUGET SOUND ENERGY, INC.
DIRECTOR COMPENSATION EFFECTIVE MAY 10, 2005
The following table provides information on the compensation of Puget Energy, Inc. and Puget Sound Energy, Inc (the "Company") nonemployee directors. The Company also reimburses nonemployee directors for the out-of-pocket expenses of attending meetings. Directors who are employed by the Company do not receive any compensation for their Board activities.
DIRECTOR COMPENSATION | |
| Quarterly Lead Director retainer | $ 5,000 |
Quarterly Board Member retainer(1) | 15,000 |
| Additional quarterly retainer for Audit Committee Chair | 2,500 |
| Additional quarterly retainer for Audit Committee Members | 1,000 |
| Additional quarterly retainer for Compensation and Leadership Development Committee Chair | 2,000 |
| Additional quarterly retainer for Governance and Public Affairs Committee Chair | 1,500 |
| Additional quarterly retainer for Finance and Budget Committee Chair | 1,500 |
| Additional quarterly retainer for Systems Integrity Committee Chair | 1,500 |
| Fee for each Board and Committee meeting attended | 1,250 |
| Fee for each telephonic meeting attended lasting 60 minutes or less | 625 |
__________________________
| (1) | 100% of the quarterly retainer fee is paid in the form of Puget Energy shares until a director owns a number of Puget Energy shares equal in value to two years of retainer fees. After meeting this ownership requirement, under the terms of the Nonemployee Director Plan as currently in effect, a portion of the quarterly retainer payable to a director for a fiscal quarter is payable in a number of shares of Puget Energy stock determined by dividing two-thirds of the quarterly retainer payable by the fair market value of Puget Energy’s common stock on the last business day of that fiscal quarter. |
A nonemployee director may elect to receive up to 100% of the quarterly retainer in Puget Energy shares and may elect to defer the issuance of shares as compensation under the Nonemployee Director Plan in accordance with the terms of the plan.
In addition to the compensation listed in the table above, the Company's nonemployee directors are eligible to participate in Puget Sound Energy’s Deferred Compensation Plan for Nonemployee Directors. Directors annually may elect to defer all or a part of their fees payable in cash. Deferred compensation may be allocated in one or more "measurement funds" (which currently includes an interest crediting fund, an equity index fund, a bond index fund and a Puget Energy common stock fund). Changes in "measurement funds" allocations are allowed quarterly.