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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-12
SEMCO ENERGY, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[SEMOCO ENERGY LOGO]
March 8, 2001
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
TO BE HELD ON APRIL 17, 2001
To the Common Shareholders of SEMCO ENERGY, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of SEMCO
Energy, Inc. (the Company) will be held at the McMorran Auditorium, 701 McMorran
Boulevard, Port Huron, Michigan (see map on back), on Tuesday, April 17, 2001 at
2:00 p.m. (EDT), for the following purposes:
1. To elect three members to the Board of Directors.
2. To transact any other business which properly comes before the
meeting.
Only Common Shareholders of record at the close of business on February 20,
2001 may vote at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU CAN ENSURE YOUR SHARES
ARE REPRESENTED AT THE MEETING BY PROMPTLY COMPLETING, SIGNING, DATING AND
RETURNING YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR YOU MAY
SUBMIT YOUR PROXY WITH VOTING INSTRUCTIONS BY TELEPHONE IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE ACCOMPANYING PROXY CARD. TO PREVENT DUPLICATION, PLEASE DO
NOT SUBMIT YOUR PROXY BOTH BY MAIL AND BY PHONE. IF YOU DO ATTEND THE MEETING,
YOU MAY VOTE IN PERSON WHETHER OR NOT YOU HAVE SUBMITTED YOUR PROXY.
By order of the Board of Directors
Sherry L. Abbott, Secretary
405 Water Street P.O. Box 5026 Port Huron, Michigan 48061-5026 (810) 987-2200
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TABLE OF CONTENTS
Notice of Annual Meeting of Stockholders.................... 1
Proxy Statement............................................. 3
Stock Outstanding and Voting Rights......................... 3
Item 1 -- Election of Directors............................. 5
Information About Directors and Executive Officers.......... 6
Committees of the Board of Directors and Meeting
Attendance................................................ 8
Certain Business Relationships of Directors................. 9
Compensation of Directors and Executive Officers............ 9
Summary compensation table................................ 9
Option grants in 2000..................................... 10
Options outstanding at December 31, 2000.................. 10
Employment and related agreements......................... 10
Employee pension plan..................................... 11
Supplemental pension plan for executives.................. 11
Total pension benefits.................................... 11
Deferred compensation agreements for executives........... 12
Director compensation..................................... 12
Compensation Committee Report on Executive Compensation..... 13
Performance Graph........................................... 14
Report of the Audit Committee............................... 14
Independent Public Accountants.............................. 15
Shareholder Proposals....................................... 15
Other Business.............................................. 15
Appendix -- Charter of the Audit Committee.................. A-1
Back
Meeting Location Map........................................ Cover
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[SEMCO ENERGY LOGO]
405 Water Street, Port Huron, MI 48060
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of SEMCO Energy,
Inc. (the Company) for use at the Annual Meeting of Shareholders on Tuesday,
April 17, 2001, at 2:00 p.m., to be held at the McMorran Auditorium, 701
McMorran Boulevard, Port Huron, Michigan, and any adjournments thereof. These
proxy materials are being mailed to shareholders on or about March 8, 2001.
A Shareholder giving the enclosed proxy may revoke it any time before it is
voted by executing a subsequent proxy, by written notice to the Company, or by
voting in person at the meeting.
The Company will bear the cost of soliciting proxies, including charges and
expenses of brokerage firms and others for forwarding proxy material to
beneficial owners of stock. In addition to mailings, proxies may be solicited by
personal interview, telephone or otherwise by employees. The Company may also
retain outside organizations to assist in soliciting proxies.
A copy of the Company's 2000 Annual Report is enclosed.
STOCK OUTSTANDING AND VOTING RIGHTS
Only Common Shareholders of record at the close of business on February 20,
2001 (the record date) may vote at the meeting.
The Company had approximately 18,000,000 shares of Common Stock (Common
Shares) outstanding on the record date. A majority of the Common Shares
constitutes a quorum.
To the Company's knowledge, the following person is the only person who
owns beneficially more than 5% of the Common Shares as of the record date.
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NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
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Jimmy C. Foster 905,202 5.01%
2 Northpoint Drive
Houston, TX 77060
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The following table reflects ownership, as of February 20, 2001, of the
number of Common Shares beneficially owned by each director, current executive
officer and all directors and current officers as a group.
(B) COLUMNS
(A) EXERCISABLE STOCK A AND B
NAME COMMON SHARES(1) OPTIONS(2) COMBINED
---- ---------------- ----------------- --------
John M. Albertine.................................... 1,339 1,668 3,007
Daniel A. Burkhardt.................................. 14,886(3) 4,101 18,987(3)
Sebastian Coppola.................................... 4,231 9,667 13,898
Edward J. Curtis..................................... 15,317(3) 4,101 19,418(3)
John T. Ferris....................................... 72,280 4,101 76,381
Michael O. Frazer.................................... 7,850 4,101 11,951
Barrett Hatches...................................... 1,794 14,669 16,463
Marcus Jackson....................................... 1,595(3) 2,001 3,596(3)
William L. Johnson................................... 17,678 120,196 137,874
Harvey I. Klein...................................... 20,228(3) 4,101 24,329(3)
Jon A. Kosht......................................... 7,640 11,018 18,658
Frederick S. Moore................................... 13,078(3) 4,101 17,179(3)
John E. Schneider.................................... 5,132 11,668 16,800
Edith A. Stotler..................................... 4,819 4,101 8,920
Donald W. Thomason................................... 14,698(3) 4,101 18,799(3)
All directors and current executive officers as a
group (21 persons including those named above)..... 226,286(4) 229,826 456,112(4)
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(1) Each person has sole power to vote and sell Common Shares shown, except
Shares held jointly with spouses or directly by spouses, minor children, or
certain other relatives, and except as described in (3) below.
(2) This column includes Common Shares which may be acquired within 60 days of
February 20, 2001 pursuant to stock options.
(3) Includes Common Shares held in a Directors' Deferred Compensation Plan
Account as follows:
DIRECTORS DEFERRED
NAME COMPENSATION SHARES
---- -------------------
Daniel A. Burkhardt......................................... 6,618
Edward J. Curtis............................................ 11,714
Marcus Jackson.............................................. 1,595
Harvey I. Klein............................................. 11,737
Frederick S. Moore.......................................... 13,055
Donald W. Thomason.......................................... 3,124
Stock in this Account may not be voted by the individual directors, but may
be voted by the full Board.
(4) The directors and current executive officers as a group beneficially own
1.25% of outstanding Common Shares. Including options exercisable within 60
days of February 20, 2001, the same group beneficially owns 2.53% of
outstanding Common Shares. Each individual holds less than one percent of
outstanding Common Shares. In 1999, the Board established new stock
ownership guidelines for directors and officers. Within five years each
non-employee director is expected to own Common Shares equal in value to
five times the director's annual retainer. Each officer is expected to own
Common Shares equal in value to a multiple of the officer's salary. The
multiple is 4.3 for the Chief Executive Officer, 3.0 for the next highest
paid officer, and 2.3 for all other officers.
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ITEM 1 -- ELECTION OF DIRECTORS
Common Shareholders are entitled to cumulative voting for directors. Each
Common Shareholder may cast a number of votes equal to the number of Common
Shares owned multiplied by the number of directors to be elected. Votes may be
cast for a single nominee or distributed among nominees. Shareholders may vote
their shares cumulatively at the meeting by indicating on the ballot how the
votes are to be distributed among the directors.
The Articles of Incorporation provide for three classes of directors. The
term of office of each class is three years and the term of one class expires
each year. The Bylaws provide for a Board with eleven members. Approximately
one-third of the Board will be elected at each Annual Meeting of Shareholders. A
vacancy can be filled by a vote of the shareholders or by the Board.
Three directors are to be elected at this Annual Meeting. Each of the three
persons receiving the highest number of votes will be elected. Proxies are being
solicited to vote for the election of the following persons who are currently
serving as directors:
John M. Albertine
William L. Johnson
Donald W. Thomason
The Board does not expect that any nominee will become unavailable to serve
as a director. Should that occur, however, proxies will be voted for another
person selected by the Board.
The persons named in the enclosed proxy reserve the right to vote proxies
cumulatively to the extent not inconsistent with shareholder direction. As shown
on the proxy, shareholders may direct that their shares be voted for less than
all three of the above-named nominees.
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INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
NAME, POSITION* AND DIRECTOR
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AGE SINCE
------------------------------------------ --- --------
NOMINEES (TERMS EXPIRING 2004)
- ------------------------------------------------------------
JOHN M. ALBERTINE........................................... 56 2000
Since 1990, Chairman and Chief Executive Officer of
Albertine Enterprises, Inc., an economic forecasting,
public policy, and full-service mergers and acquisitions
firm based in Washington, D.C. Chief Executive Officer of
Jam Shoe Concepts, Inc. Jam Shoe Concepts, Inc. owns 100%
of the assets of The Shoebilee Corporation, a retail
family shoe chain with 46 stores in the midwest. Mr.
Albertine holds a Ph.D. in economics from the University
of Virginia. Mr. Albertine is also the largest individual
shareholder in Jam Shoe Concepts, Inc. Director of
Intermagnetics General Corporation.
WILLIAM L. JOHNSON.......................................... 58 1996
Chairman of the Board of Directors since December 1997.
Chief Executive Officer since May 1996. President from
August 2000 and between May 1996 and September 1999. Chief
Executive Officer of Northern Pipeline Construction
Company, Kansas City, Missouri, from 1994 to May 1996.
DONALD W. THOMASON.......................................... 57 1995
Lead Director of the Company since November 1998. Retired
in 1999 from the Kellogg Company as Executive Vice
President Services/Technology. Director of Triple S
Plastics, Inc.
OTHER DIRECTORS (TERMS EXPIRING 2002)
- ------------------------------------------------------------
DANIEL A. BURKHARDT......................................... 53 1993
Associated with Edward Jones, a securities brokerage firm,
since 1978. Principal in Investment Banking Department of
Jones. Member of Jones' Investment Policy Committee.
EDWARD J. CURTIS............................................ 58 1995
President of E.J. Curtis Associates, Inc., a professional
management consulting firm.
MARCUS JACKSON.............................................. 49 1999
Executive Vice President of Kansas City Power & Light
Company (KCPL) since November 1996. Since May 2000,
President of KCPL Power, a wholly-owned subsidiary of
KCPL. Since October 1995, Chairman of the Board of KLT
Power, Inc., a second-tier subsidiary of KCPL. He has also
held the following positions at KCPL during the past five
years: Chief Financial Officer from January 1999 to
December 2000, Chief Operating Officer from November 1996
to January 1999, and Senior Vice President of Power Supply
from July 1994 to November 1996.
HARVEY I. KLEIN............................................. 61 1993
President of Global Strategies Group L.C., a private
consulting firm, since 1995.
OTHER DIRECTORS (TERMS EXPIRING 2003)
- ------------------------------------------------------------
JOHN T. FERRIS.............................................. 50 1994
Senior Partner in law firm of Ferris & Schwedler, P.C. in
Bad Axe, Michigan.
MICHAEL O. FRAZER........................................... 62 1986
Attorney practicing in Battle Creek, Michigan.
FREDERICK S. MOORE.......................................... 62 1995
Chairman and President of DSLT Inc., a holding company
with subsidiaries engaging in the real estate development
business. Since 1999, Chairman of Mardale Specialty Foods,
LLC. Chairman of Diamond Crystal Specialty Foods, Inc.
(Diamond Crystal), which was a subsidiary of DSLT Inc.
until Diamond Crystal's sale in November 1998.
EDITH A. STOTLER............................................ 54 1987
Partner, Stotler Grain Company. President, S&I Grain
Company (formerly Homer Grain Company).
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* Other than Mr. Johnson, each director's and nominee's principal employment is
and has been with a company not affiliated with SEMCO.
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EXECUTIVE OFFICERS
Information about Mr. Johnson is included with the nominees above. Below is
information (age, present position with the Company and business experience
during the past five years) about the other Executive Officers who are included
in the Summary Compensation Table in the section entitled Compensation of
Directors and Executive Officers.
SEBASTIAN COPPOLA (age 49) -- Senior Vice President and Chief Financial Officer
since January 1999. Treasurer from June 2000 and during the period from January
1999 to September 1999. Senior Vice President of Finance, Treasurer and Investor
Relations Officer of MCN Energy Group, Inc. from September 1994 to December
1998.
BARRETT HATCHES (age 45) -- President of ENSTAR Natural Gas Co. (a division of
SEMCO) since January 2000. Senior Vice President of Human Resources and Public
Affairs for SEMCO from February 1999 to December 1999. Vice President of Human
Resources and Public Affairs for SEMCO from February 1997 to February 1999. Vice
President of V. Robinson & Company, Inc., Kansas City, Missouri, from 1996 to
February 1997. Director of Logistics and Chief Operating Officer -- H & N
Railroad of North American Salt Company, Overland Park, Kansas, from 1995 to
1996.
JON A. KOSHT (age 61) -- President and Chief Operating Officer of SEMCO Energy
Gas Company (a division of SEMCO) since September 1999. Vice President of Gas
Supply and Rates and Regulatory Affairs from 1995 to September 1999.
JOHN E. SCHNEIDER (age 52) -- Senior Vice President of Corporate Development
since September 1999. Senior Vice President of SEMCO Energy Ventures, Inc. (a
subsidiary of SEMCO) from May 1998 to September 1999. Prior to joining the
Company, he was self-employed as a management and business consultant from 1994
to May 1998.
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COMMITTEES OF THE BOARD OF DIRECTORS
AND MEETING ATTENDANCE
Participation in Committees of the Board of Directors is as follows:
NOMINATING AND
NAME AUDIT COMPENSATION FINANCE CORPORATE GOVERNANCE
---- ----- ------------ ------- --------------------
John M. Albertine................................ x x
Daniel A. Burkhardt.............................. x x
Edward J. Curtis................................. x xx
John T. Ferris................................... x xx
Michael O. Frazer................................ x x
Marcus Jackson................................... x x
Harvey I. Klein.................................. x x
Frederick S. Moore............................... xx x
Edith A. Stotler................................. x xx
Donald W. Thomason............................... x
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x Member.
xx Chair.
The Board held 8 meetings during 2000. Each director attended more than 75%
of the total number of meetings of the Board and Committees on which he or she
served in 2000.
The Audit Committee reviews the independent public accountants' reports and
audit findings, the scope and plans for future audit programs, independence of
the independent accountants, annual financial statements, accounting, financial
and internal controls of the Company, information systems, risk management and
compliance with codes of conduct. The Audit Committee also recommends the choice
of independent public accountants to the full Board. Three Audit Committee
meetings were held in 2000. During the year, the Board examined the composition
of the Audit Committee in light of the adoption by the New York Stock Exchange
of new rules governing audit committees and confirmed that all members of the
Audit Committee are "independent" within the meaning of the Exchange's new
rules. IN COMPLIANCE WITH SEC RULES, THE CHARTER OF THE AUDIT COMMITTEE IS
INCLUDED IN THE APPENDIX BEGINNING AT PAGE A-1.
The Compensation Committee held 6 meetings in 2000. The Compensation
Committee reviews the Company's general compensation strategy and recommends
compensation of executive officers and directors to the full Board. The
Compensation Committee monitors the CEO's officer succession plan and recommends
the election of officers to the full Board.
The Finance Committee serves as liaison between management and the Board on
important financial transactions and financial policy matters. The Committee
reviews and approves the capital budget, financing plan, and significant
securities offerings, prior to Board review. The Finance Committee has approval
power for certain categories of acquisitions and capital projects that are
consistent with the Board approved Strategic Plan. The Finance Committee held 9
meetings in 2000.
The Nominating and Corporate Governance Committee held 3 meetings in 2000.
The Nominating and Corporate Governance Committee recommends directors to serve
on Board committees, candidates for Board membership, personal qualifications
criteria for Board membership, general criteria regarding committee composition,
and changes to Board and Company policies. Recommendations by shareholders of
candidates for Board membership will be considered and should be sent to the
Nominating and Corporate Governance Committee, c/o Ms. Sherry L. Abbott,
Corporate Secretary, 405 Water Street, Port Huron, Michigan 48060.
During 2000 the Board created a special purpose committee called the
Oversight Committee to oversee the assessment of the Company's strategic
alternatives. The Oversight Committee met three times in 2000 and was dissolved
upon the completion of the strategic alternatives review. The committee members
were Donald W. Thomason, Chairman, Edward J. Curtis, Harvey I. Klein and Edith
A. Stotler.
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CERTAIN BUSINESS RELATIONSHIPS OF DIRECTORS
Mr. Burkhardt is a Principal of Edward D. Jones & Co., L.P. ("Jones")
Investment Banking Department and a member of Jones' Investment Policy
Committee. In April 2000, Jones served as an underwriter of an offering by the
Company of $30,000,000 principal amount of 8% Senior Notes due 2010. Jones may
serve as an underwriter of future securities offerings by the Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
of the Chief Executive Officer and the following named executive officers.
COMMON
NAME AND PRINCIPAL OTHER ANNUAL SHARE ALL OTHER
POSITION(1) YEAR SALARY BONUS COMPENSATION(2) OPTIONS(3) COMPENSATION(4)
------------------ ---- ------ ----- --------------- ---------- ---------------
WILLIAM L. JOHNSON............. 2000 $383,385 $ 0 $10,950 30,000 $ 6,800
Chairman, President and CEO 1999 $317,154 $129,000 $ 8,641 20,000 $ 6,400
1998 $295,931 $ 50,000 $ 8,289 25,000 $ 2,248(5)
BARRETT HATCHES................ 2000 $212,132 $ 0 $23,633(6) 8,000 $137,966(7)
President, ENSTAR Natural Gas 1999 $132,617 $ 33,828 $ 6,326 7,000 $ 32,032(8)
Company Division 1998 $106,635 $ 15,200 $ 5,781 3,486 $ 23,652(9)
SEBASTIAN COPPOLA.............. 2000 $208,269 $ 0 $ 7,406 8,000 $ 6,800
Senior Vice President and CFO 1999 $186,346 $107,000(10) $ 7,144 10,500 $ 6,400
JOHN E. SCHNEIDER.............. 2000 $177,227 $ 0 $ 7,399 7,000 $ 6,800
Senior Vice President of 1999 $166,442 $ 41,400 $ 7,150 7,000 $ 53,603(11)
Corporate Development 1998 $ 89,423 $ 70,000(10) $ 1,936 7,000 $ 16,119(12)
JON A. KOSHT................... 2000 $175,187 $ 0 $ 8,254 4,000 $ 6,800
President, SEMCO Energy Gas 1999 $120,025 $ 24,282 $ 6,917 3,500 $ 5,642
Company Division 1998 $115,193 $ 15,627 $ 6,803 3,500 $ 6,392(13)
CARL W. PORTER................. 2000 $154,694 $ 0 $ 4,096 20,000 $459,338(14)
President and COO 1999 $181,879 $ 55,545 $ 7,159 7,000 $ 6,400
1998 $171,008 $ 21,876 $ 6,799 6,979 $ 5,843(15)
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(1) Messrs. Coppola and Schneider joined the Company in January 1999 and May
1998, respectively. Mr. Porter resigned effective July 31, 2000.
(2) Includes the premium and income tax gross up for a life insurance policy.
Also includes monthly stipends in lieu of salary and in lieu of use of
company-provided auto. The monthly stipend ranged from $3,500 to $6,000 in
2000 for the named officers.
(3) Number of Common Shares underlying stock-option awards granted in the
respective year.
(4) Includes Company matching contribution to 401(k) plan and to non-qualified
deferred compensation plan.
(5) Includes premium of $2,248 paid for term life insurance.
(6) Includes a travel allowance of $17,143.
(7) Includes moving expenses of $133,488 and term life insurance premium of
$549.
(8) Includes home sale costs, etc., related to relocation to Michigan of
$38,876.
(9) Includes moving expenses of $23,486 and term life insurance premium of
$166.
(10) Includes a signing bonus of $50,000.
(11) Includes moving expenses of $47,203.
(12) Includes moving expenses of $12,888 and health insurance premium of $1,324.
(13) Includes term life insurance premium of $831.
(14) Includes severance compensation of $452,538 paid or to be paid.
(15) Includes term life insurance premium of $513.
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OPTION GRANTS IN 2000
VALUE WHEN OPTIONS
EXPIRE IF 5% OR 10%
ANNUAL STOCK PRICE
% OF TOTAL APPRECIATION FROM DATE
NUMBER OF COMMON OPTIONS GRANTED EXERCISE OF GRANT
SHARES UNDERLYING TO EMPLOYEES PRICE EXPIRATION ----------------------
NAME OPTIONS GRANTED IN 2000 ($/SH.)(1) DATE(2) 5%(3) 10%(3)
---- ----------------- --------------- ---------- ---------- ----- ------
William L. Johnson....... 30,000 19.8% $11.94 3/1/10 $225,223 $570,759
Sebastian Coppola........ 8,000 5.3% $11.94 3/1/10 $ 60,059 $152,202
Barrett Hatches.......... 8,000 5.3% $11.94 3/1/10 $ 60,059 $152,202
John Schneider........... 7,000 4.6% $11.94 3/1/10 $ 52,552 $133,177
Jon A. Kosht............. 4,000 2.6% $11.94 3/1/10 $ 30,030 $ 76,101
- ---------------------
(1) The exercise price for all stock options granted by the Company is the
market price of the Common Shares at the time options were granted.
(2) One-third of the options become exercisable each of the three years
following the date granted. Each option expires ten years after it was
granted.
(3) These two columns show what the value of the options would be after ten
years if the market price of the Common Shares increased 5% or 10% each year
for the ten years from the date the options were granted until the options
expired. This table is required by the Securities and Exchange Commission
and does not mean that the Company predicts that these options will have any
such value nor that the market price of Common Shares will increase by any
specific amount. The actual value that these options will have depends
entirely on increases or decreases in the market price of Common Shares and
when the options are exercised.
OPTIONS OUTSTANDING AT DECEMBER 31, 2000
NUMBER OF OPTIONS AT VALUE OF OPTIONS AT
DECEMBER 31, 2000(1) DECEMBER 31, 2000(2)
----------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
William L. Johnson............................. 94,779 52,083 $9,864 $108,750
Barrett Hatches................................ 8,449 13,886 $ 0 $ 29,000
Jon A. Kosht................................... 7,292 7,558 $ 0 $ 14,500
John E. Schneider.............................. 7,001 13,999 $ 0 $ 25,375
Sebastian Coppola.............................. 3,500 15,000 $ 0 $ 29,000
- ---------------------
(1) No options were exercised in 2000.
(2) Option values are based on the difference between the grant prices of all
options adjusted for stock dividends and the closing price for the Company's
stock of $15.56 per share on December 31, 2000.
EMPLOYMENT AND RELATED AGREEMENTS
Mr. Johnson's employment agreement, which is for a term of five years
ending April 30, 2001, provides for an annual base salary of not less than
$210,000 and eligibility for an annual bonus not to exceed 40% of annual base
salary payable upon attainment of specific targets. The agreement also provides
for a severance payment if the Company terminates his employment other than for
"cause" or "disability" or if Mr. Johnson resigns due to a required relocation
of personal residence or a demotion in position, authority, etc. The severance
amount will equal Mr. Johnson's annual salary. The Company will also continue
insurance and similar benefit plans for twelve months, subject to certain
limitations.
Mr. Johnson's change-of-control employment agreement has parallel
provisions to his employment agreement except that the severance amount equals
2.99 times his annual base salary and average bonus. All named current executive
officers have change-of-control employment agreements parallel to Mr. Johnson's.
The agreements also provide for the grossed-up payment of any Federal excise
taxes due from the executive officers as a result of any payments received under
the agreements and provide up to three years of continued participation in the
Company's benefit programs.
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EMPLOYEE PENSION PLAN
Each named executive officer above participates in an Employee Pension
Plan. All but one of the named executive officers participate in the Michigan
Pension Plan. Mr. Hatches participated in the Michigan Pension Plan until his
transfer to Enstar; he now participates in the Alaska Pension Plan. Both Pension
Plans are available to non-union employees generally.
At age 65, a Michigan Pension Plan participant can receive an annual
pension equal to 1.4% of his average five-year adjusted compensation multiplied
by his years of service. At age 65, an Alaska Pension Plan participant can
receive an annual pension equal to 2% of his average five-year adjusted
compensation multiplied by his first ten years of service and 1% of such average
compensation for years of service in excess of ten. Thus, after 25 years, both
Pension Plans provide a benefit based on 35% of such average compensation.
Adjusted compensation includes salary and bonus, but excludes fringe benefits,
expense reimbursements, bonuses to pay taxes on fringe benefits, and similar
types of compensation. These benefits are not subject to any deduction for
Social Security or other offset.
As of January 1, 2001, years of service earned was as follows: Mr.
Johnson -- 4.6 years, Mr. Kosht -- 13.6 years, Mr. Hatches -- 3.9 years, Mr.
Schneider -- 2.6 years, and Mr. Coppola -- 2 years.
SUPPLEMENTAL PENSION PLAN FOR EXECUTIVES
Each named executive officer above is a party to the Supplemental Executive
Retirement Plan ("SERP"), which provides for additional retirement benefits for
fifteen years after five years of service. If the executive officer retires at
age 65, yearly payments will equal 50% of his last base salary. An executive
officer retiring before age 65, but after 55, can receive from 30% (age 55) to
48% (age 64) of base salary.
The SERP also provides pension benefits which could not be provided by an
Employee Pension Plan because of the limit on compensation ($170,000 in 2000).
In addition, the SERP provides protection for the named officers in the event of
a Change in Control by requiring the funding of a Rabbi Trust (under certain
circumstances) and vesting of benefits (under other circumstances) before age 55
and before 5 years of service.
TOTAL PENSION BENEFITS
The following table sets forth the estimated annual benefits payable at
normal retirement age (65) under the Michigan Pension Plan and SERP combined.
Benefits under the SERP are paid for 15 years. Benefits under an Employee
Pension Plan last for the life of the executive.
FINAL BASE
SALARY* YEARS OF SERVICE
- ---------- -------------------------------------
5 10 15 20
- -- -- --
150,000 85,500 96,000 106,500 117,000
200,000 114,000 128,000 142,000 156,000
250,000 142,500 160,000 177,500 195,000
300,000 171,000 192,000 213,000 234,000
350,000 199,500 224,000 248,500 273,000
400,000 228,000 256,000 284,000 312,000
450,000 256,500 288,000 319,500 351,000
500,000 285,000 320,000 355,000 390,000
- ---------------------
* Final Base Salary means the base salary for the executive at time of
retirement. The SERP benefit is based on final base salary. The smaller
benefit from an Employee Pension Plan is based on five-year average
compensation (salary plus bonus). This table assumes that an executive's final
base salary will approximate his five-year average compensation.
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DEFERRED COMPENSATION AGREEMENTS FOR EXECUTIVES
Each named executive officer above is eligible to participate in the
Company's Deferred Compensation Plan. This Plan is open only to certain
management and executive employees. This Plan allows participants to defer up to
50% of base salary and up to 100% of the bonus paid pursuant to the Company's
Short-Term Incentive Plan in each year.
Benefits are normally paid after termination of employment and can be paid
in a lump sum or over a 15-year period. Participants may also elect to receive a
distribution once a year while still employed. However, participants suffer a
penalty of 6% of any such distribution and cannot defer compensation in the
following year.
Each participant receives interest annually based on one of four formulas.
The participant must choose the formula applicable for a given year before the
year begins. Formula one provides for interest equal to the return on the
Standard & Poors 500 stock index for that year. Formula two provides for
interest equal to 115% of the return on short-term Treasury Bills for that year.
Formula three provides for interest equal to the average of Formulas one and
two. Formula four provides for interest equal to the return that an investor
would have received by purchasing the Company's Common Shares through the
Company's Direct Stock Purchase and Dividend Reinvestment Plan.
During the previous year, Messrs. Coppola and Kosht deferred compensation
pursuant to this Plan.
DIRECTOR COMPENSATION
Annual Compensation
For their services on the Board, non-employee directors are paid a retainer
of $1,000 per month. The Chairmen of the Audit, Compensation, Finance, and
Nominating and Corporate Governance Committees each receive an additional
retainer of $200 per month. The Lead Director receives an additional retainer of
$1,250 per month. Each non-employee director receives $700 per meeting attended.
The Chairmen of the Audit, Compensation, Finance, and Nominating and Corporate
Governance Committees each receive an additional $175 per meeting chaired.
Directors are reimbursed for expenses incurred in attending Board and Committee
meetings.
In addition to the Board and Committee meetings, the Board held 3 strategic
planning sessions during 2000 for which they were compensated as though regular
Board meetings.
Non-employee directors who were members of the Board prior to 1996 may
participate in the Company's medical program. Directors who join the Board after
1995 cannot participate in the medical program. Directors who do not participate
in the Company's medical program receive a grant of $3,850 worth of Common
Shares each year.
Non-employee directors also accrue $3,000 per year under a non-qualified
defined contribution plan, which is payable after leaving the Board. Interest
accrues at 8% per annum.
Deferred Compensation
Under Deferred Compensation and Common Stock Purchase Agreements for
non-employee directors, directors' cash compensation may be deferred for each
upcoming year. If deferred, compensation accrues interest at the prime rate or
is invested in newly issued Common Shares with dividends reinvested through the
dividend reinvestment plan. Six directors deferred some or all cash compensation
for 2000, which was used to purchase Common Shares. Six directors have chosen to
purchase Common Shares by deferring some or all cash compensation for 2001.
Stock Options
Each non-employee director also receives an annual grant of non-qualified
stock options exercisable at fair market value on date of grant to acquire 1,000
shares of Company Common Shares under the Long-Term Incentive Plan. Upon joining
the Board, new non-employee directors also receive such a grant. Thus, a
non-employee director joining the Board prior to the date options are granted to
all directors for the year will receive two grants within the same year.
However, no grant of stock options will be made to directors who are known to be
leaving the Board within six months after the grant date. Such
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stock options become exercisable one-third each year for three years and expire
ten years from the date of grant.
In 2000, non-employee Board members also received stock options exercisable
at $11.84 to acquire 3,000 shares of Company Common Shares.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") is responsible for recommending to
the full Board the compensation of Executive Officers. The Committee is composed
of five non-employee directors. The Committee intends to provide salary and
other non-incentive compensation for an executive, equal to the average of that
paid to executives with similar experience, responsibilities and authority in a
peer group including other utility companies (Peer Group). Incentive plans
provide each executive with an opportunity for above-average total compensation,
if financial targets or other performance goals are exceeded.
All base salaries of officers, including those shown in the "Salary" column
of the above Compensation Table, were approved by the Committee.
Under the Company's Short-Term Incentive Plan, Mr. Johnson is eligible for
a cash bonus of up to 40% of his base salary if the Company meets target
earnings for the year. If the Company achieves 108% or more of target earnings,
Mr. Johnson is eligible for a cash bonus of up to a maximum of 72% of his base
salary. Bonuses for Mr. Johnson are based on the Company's performance (80%) and
on his individual performance (20%). Bonuses for other Executive Officers range
from 25% of base salary if the Company achieves target earnings to 63% of base
salary if the Company achieves at least 108% of target earnings. Bonuses for
other Executive Officers are based on the Company's performance, their
individual performance and a discretionary amount.
Also, the Board may make incentive awards in lieu of bonuses under the
Short-Term Incentive Plan in unusual circumstances. Only unusual circumstances
outside the control of executive officers are considered. Such circumstances may
include, for example, significantly warmer than normal weather.
Under the Long-Term Incentive Plan (LTIP), Mr. Johnson may be granted stock
options for up to 30,000 shares each year if the Company's performance and his
performance are outstanding. The LTIP was approved by the shareholders at the
Annual Meeting held April 15, 1997. Awards to Mr. Johnson and other Executive
Officers are based primarily on Company performance. However, business unit
performance and individual performance are also considered. Maximum awards of
stock options to other Executive Officers under the LTIP range from 5,250 to
10,500 shares.
In addition, stock options may be granted to Executive Officers under the
Stock Option Plan of 2000 (SOP) to the extent deemed appropriate by the
Committee. The SOP allows stock options to be granted in excess of the LTIP
maximum number. However, no single person may be issued SOP stock options
relating to more than 1% of outstanding stock at the time of grant and no more
than 5% of outstanding stock may be issued pursuant to exercises of options
granted under the SOP.
Further detail regarding compensation is shown under "Compensation of
Directors and Executive Officers."
All decisions of the Committee regarding executive compensation are
reviewed by the full Board.
COMPENSATION COMMITTEE
John T. Ferris, Chairman
Edward J. Curtis
Marcus Jackson
Harvey I. Klein
Donald W. Thomason
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PERFORMANCE GRAPH
The following graph compares cumulative total returns (assuming
reinvestment of dividends). The stock price performance shown is not necessarily
indicative of future price performance. The graph assumes the investment of $100
in the Company's stock, the stocks representing the Edward Jones (EJ) index and
the stocks representing the S&P 500 index on December 31, 1995. The Company's
stock closed at $15.56 per share on December 31, 2000.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG STOCK OF SEMCO ENERGY, INC.,
S&P 500 INDEX AND
EDWARD JONES NATURAL GAS DIVERSIFIED COMPANY INDEX
[PERFORMANCE GRAPH]
YEAR END SEMCO ENERGY, INC. EJ INDEX S&P 500 INDEX
- -------- ------------------ -------- -------------
1995 100 100 100
1996 113 126 123
1997 121 158 164
1998 120 146 211
1999 92 149 255
2000 129 205 232
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors has oversight responsibility
for the Company's financial reporting processes and the quality of its financial
reporting. The specific responsibilities are outlined in the Audit Committee
Charter. In connection with the December 31, 2000, financial statements, the
Audit Committee: (1) reviewed and discussed the audited financial statements
with management, (2) discussed with the auditors the matters required by
Statement on Auditing Standards No. 61, and (3) received the written disclosures
and the letter from the auditors required by Independence Standards Board
Statement No. 1 and discussed with the auditors the auditors' independence.
Based upon these reviews and discussions, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-K filed with the SEC.
AUDIT COMMITTEE
Frederick S. Moore, Chairman
John M. Albertine
John T. Ferris
Marcus Jackson
Edith A. Stotler
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP (Arthur Andersen) has been the principal auditor for
the Company and its predecessor for over forty-five (45) years and has been
appointed by the Board of Directors to continue in that capacity during 2001.
During fiscal year 2000, Arthur Andersen was retained to provide services in the
following categories and amounts:
AUDIT FEES.................................................. $354,000
Financial Information and Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees.............................................. $222,000(a)
- ---------------------
(a) The Audit Committee has considered whether the provision of non-audit
services by the Company's principal auditor is compatible with maintaining
auditor independence and has determined that auditor independence has not
been compromised.
A member of Arthur Andersen will be available at the Shareholders Meeting
to make a statement if he so desires and to answer appropriate questions.
SHAREHOLDER PROPOSALS
A shareholder's proposal to be included in the proxy statement and proxy
for the year 2002 annual meeting of shareholders must be received at the
Company's principal executive office no later than November 8, 2001.
For any shareholder proposal that is not submitted for inclusion in next
year's proxy statement, but is instead sought to be presented at the 2002 annual
meeting, SEC rules will permit management to vote proxies in its discretion if
the Company: (1) receives notice of the proposal before the close of business on
January 22, 2002, and advises shareholders in the 2002 proxy statement about the
nature of the matter and how management intends to vote on such matter; or (2)
does not receive notice of the proposal prior to the close of business on
January 22, 2002.
Proposals and notices of intention to present proposals should be addressed
to: Ms. Sherry L. Abbott, Corporate Secretary, 405 Water Street, Port Huron,
Michigan 48060.
OTHER BUSINESS
Management knows of no matters (other than those listed on page 1) which
are to be brought before the meeting. However, if any other matters are
presented for action, it is the intention of the persons named in the enclosed
proxy to vote in accordance with their judgment.
It is important that proxies be returned promptly to avoid unnecessary
expenses. Therefore, all Common Shareholders (even those planning to attend the
meeting) are urged, regardless of the number of Common Shares owned, to sign,
date and return the enclosed proxy in the business-reply envelope, also
enclosed, or submit proxy voting instructions by telephone in accordance with
the instructions on the enclosed proxy card. Shareholders attending in person
may withdraw their proxies and vote in person.
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APPENDIX
SEMCO ENERGY, INC.
CHARTER OF THE
AUDIT COMMITTEE
PURPOSE
The primary purpose of the Audit Committee of SEMCO Energy, Inc. (the "Company")
is to assist the Board of Directors in fulfilling its responsibility to oversee
(i) management's conduct of the Company's financial reporting process, including
oversight of financial reports and other financial information provided by the
Company to any governmental or regulatory body, the public or other users
thereof, (ii) the Company's systems of internal accounting and financial
controls, (iii) the annual independent audit of the Company's financial
statements and (iv) the Company's legal compliance and ethics programs as
established by management and the Board.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention, with full access to all books, records,
facilities and personnel of the Company. The Board and the Committee are in
place to represent the Company's shareholders; accordingly, the outside auditors
are ultimately accountable to the Board and the Committee.
I. MEMBERSHIP
The membership of the Audit Committee shall be comprised of not less
than four Directors, and the Committee's composition shall meet the
requirements of the Audit Committee Policy of the New York Stock
Exchange. Accordingly, all of the members shall be directors: (i) who
have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
(ii) who are financially literate or who become financially literate
within a reasonable period of time after appointment to the Committee.
In addition, at least one member of the Committee shall have
accounting or related financial management expertise. Three members
must be present at each meeting to constitute a quorum. In the absence
of a member, the Chairperson may select an alternate member from the
Board who is an outside director to attend with full voting power.
Members of the Audit Committee shall be appointed annually by the
Board. No voting member may serve more than nine consecutive years.
II. COMMITTEE CHAIRPERSON
Annually, the Committee will appoint one of the Committee's members as
Chairperson. No Chairperson shall serve more than three consecutive
years. The Chairperson presides over the meetings of the Committee and
reports to the Board.
III. ADMINISTRATIVE SECRETARY
The Corporate Secretary of the Company shall be responsible, with the
Chairperson of the Committee, for preparation of agendas for and
minutes of Committee meetings.
IV. VACANCIES
If a vacancy occurs among the membership of the Committee, the Board of
Directors may appoint a Director to fill such vacancy for the remaining
term.
V. RESPONSIBILITIES
It is the responsibility of the Audit Committee to understand and
assess the financial reporting and internal controls of the Company.
The Committee's job is one of oversight. It recognizes that the
Company's management is responsible for preparing the Company's
financial statements and that the outside auditors are responsible for
auditing those statements. Additionally, the Committee recognizes that
financial management, as well as outside auditors, have more time,
knowledge and more detailed information regarding the Company than do
Committee members. Consequently, in carrying out its oversight
responsibilities, the Committee is not providing any
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expert or special assurance as to the Company's financial statements or
any professional certification as to the outside auditors' work. This
responsibility entails the following:
A. Assessing the Company's accounting policies and reporting and
control procedures.
B. Evaluating the rationale for financial information presented to
shareholders and others, including principles followed, amounts
determined and disclosures made.
C. Overseeing the internal audit function.
D. Overseeing the adequacy and security of the Company's information
systems as they relate to the financial integrity of the Company.
E. Evaluating risk identification and management in the Company.
F. Overseeing compliance with legal, regulatory and other requirements
and Company policies.
G. Providing the NYSE with written certification on an annual basis (or
upon a change in the composition of the Audit Committee) that:
1. Addresses any determination that the Board of Directors has made
concerning the independence of Committee members;
2. Affirms the financial literacy of all Committee members;
3. Affirms the accounting or related financial management expertise
of one Committee member; and
4. Affirms the annual review and reevaluation of the adequacy of the
Committee Charter.
H. Requesting from the outside auditors annually a formal written
statement delineating all relationships between the auditors and the
Company consistent with Independence Standards Board Standard Number
1; discussing with the outside auditors any such disclosed
relationships and their impact on the outside auditors'
independence; and recommending that the Board take appropriate
action in response to the outside auditors' report to satisfy itself
of the auditors' independence.
I. Preparing a report to be included in the annual proxy statement,
stating whether or not the Committee has:
1. Reviewed and discussed the Company's audited financial statements
with management;
2. Discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards (SAS) No. 61,
Communicating With Audit Committees;
3. Received the written disclosure and letter from the independent
accountants (delineating all relationships they have with the
company) and has discussed with them their independence, as
required by Independence Standards Board ("ISB") Standard No. 1;
and
4. Recommended to the board of directors that the audited financials
be included in the Company's Annual Report on Form 10-K, based on
the review and discussions referred to above.
VI. AUTHORITY
The Committee, subject to any approval by the full Board, shall have
the ultimate authority and responsibility to select, evaluate, and,
where appropriate, replace the Company's outside auditor.
VII. ACTIVITIES OF THE COMMITTEE
The following functions shall be the common recurring activities of
the Committee in carrying out its oversight function. These functions
are set forth as a guide, with the understanding that the
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Committee may diverge from this guide as appropriate given the circumstances. In
carrying out its responsibilities, the Committee shall:
A. Review with management and the outside auditors the audited
financial statements to be included in the Company's Annual Report
on Form 10-K and Annual Report to Shareholders, and review and
consider with the outside auditors the matters required to be
discussed by Statement of Accounting Standards ("SAS") No. 61.
B. As a whole or through the Committee chair, review with the outside
auditors the Company's interim financial results to be included in
the Company's quarterly reports to be filed with the Securities and
Exchange Commission and the matters required to be discussed by SAS
No. 61. This review shall occur prior to the Company's filing of the
Form 10-Q.
C. Report to the Board the results of audits by independent outside
auditors.
D. Meet periodically with and communicate directly with the independent
outside auditors.
1. Review the reports rendered by the independent outside auditors
with particular concern for any significant exceptions noted in
their reports.
2. Discuss with the independent outside auditors any unusual or
significant matters that developed during the course of their
procedures which should be communicated to the Board.
3. Annually approve and discuss the scope of their examination of
the Company with the independent outside auditors.
E. Gain a thorough understanding of the Company's business, including
its products, services, customers, distribution channels, market
characteristics, competitive factors, regulatory constraints and
requirements and accounting issues.
F. Review and evaluate management's responses to outside and internal
audit reports.
G. Oversee the internal audit function and assess management's system
of internal controls.
1. Approve the scope of internal audit plans and budgets.
2. Meet privately with the internal auditors at least annually.
3. Instruct the internal auditors to advise the Committee of any
areas requiring special attention.
4. Review and report to the Board where appropriate significant
findings of internal audit reports.
5. Discuss with management and the outside auditors the quality and
adequacy of the Company's internal controls.
H. Require outside independent auditors to provide their professional
judgment concerning appropriate accounting principles and disclosure
practices.
I. Focus the Committee's deliberations and inquiries of management and
auditors on key risks facing the Company, including:
1. Strategic risks -- relating to doing the wrong things.
2. Operating risks -- relating to doing the right things the wrong
way.
3. Financial risks -- relating to losing financial resources or
incurring unacceptable liabilities.
4. Information risks -- relating to inaccurate or non-relevant
information, unreliable systems and inaccurate or misleading
reports.
5. Regulatory and other compliance risks.
J. Review the Company's Code of Conduct and management's program to
monitor compliance therewith and compliance with relevant laws and
regulations.
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K. Meet periodically with the Company's General Counsel to discuss
legal matters that may significantly affect the Company and its
financial statements.
L. Review the Company's income tax status and inquire as to the status
of related tax reserves.
M. Review officers' and directors' expenses, perquisites and use of
Company assets.
N. Assess the adequacy of controls over the development and use of
information technology in the Company.
O. Review and assess annually the adequacy of this Charter.
P. Monitor compliance with SEC Staff Accounting Bulletin No. 99,
Materiality.
Q. Prepare an annual Audit Committee Plan for review and approval by
the Board of Directors.
VIII. MEETINGS -- LOCATION AND NUMBER
The Committee shall meet at least three times during the year and as
otherwise scheduled by the Chairperson of the Committee or by the
Board of Directors.
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[MAP OF PORT HURON]
22
SEMCO ENERGY, INC.
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, April 17, 2001
2:00 p.m.
McMORRAN AUDITORIUM
701 McMorran Boulevard
Port Huron
- --------------------------------------------------------------------------------
[SEMCO ENERGY LOGO]
- -------------------------
405 WATER STREET, PORT HURON, MI 48060 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON APRIL 17, 2001.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEM 1.
By signing the proxy, you revoke all prior proxies and appoint Randall S.
Fernandez and Francis R. Lieder, Jr. (the Named Proxies), and each of them, with
full power of substitution, to vote your shares on the matters shown on the
reverse side and any other matters which may come before the Annual Meeting and
all adjournments.
See reverse for voting instructions.
23
COMPANY #
CONTROL #
THERE ARE TWO WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES IN THE SAME
MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
- - Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 noon (ET) on April 16, 2001. If this card relates only to
your Common Shares held in a 401(k) Plan, you may vote by telephone until
5:00 p.m. (ET) on April 12, 2001.
- - You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
- - Follow the simple instructions the Voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to SEMCO ENERGY, INC., c/o Shareowner Services(SM),
P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE, PLEASE DO NOT MAIL YOUR PROXY CARD
\/ Please detach here \/
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR ITEM 1.
1. Election of directors: 01 John M. Albertine / / Vote FOR / / Vote WITHHELD
02 William L. Johnson all nominees from all nominees
03 Donald W. Thomason (except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, --------------------------------------
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) | |
--------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED
FOR EACH PROPOSAL.
Address Change? Mark Box / /
Indicate changes below: Date
---------------------------------------
--------------------------------------------------
| |
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Signature(s) in Box
Please sign exactly as your name(s) appear on Proxy.
If held in joint tenancy, all persons must sign.
Trustees, administrators, etc., should include
title and authority. Corporations should provide
full name of corporation and title of authorized
officer signing the proxy.