EXHIBIT 10.38

 

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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