Document:

Summary of Director Compensation

    

    

     

    Exhibit
      10.51

     

    PUGET
      ENERGY, INC. & PUGET SOUND ENERGY, INC.

     

    DIRECTOR
      COMPENSATION EFFECTIVE MARCH 1, 2007

    

    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 Independent Director Retainer

            	
              $ 
                 3,750

            
	
              Quarterly
                Board Member Retainer(a)

            	
              20,000

            
	
              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

            
	
              Fee
                for Each Board and Board Committee Meeting Attended

            	
              1,600

            
	
              Fee
                for Each Telephonic Meeting Attended Lasting 60 Minutes or Less
                

            	
              800

            

    

     

    
      	(a)  	
              100%
                of the quarterly retainer fees are to be 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 Non-Employee 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
      non-employee 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 Non-employee 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.Summary of Severance Benefit for CFO

    Exhibit
      10.55

     

    

     

    Summary
      of Severance Benefit For

    Bertrand
      Valdman, Senior Vice President and Chief Financial Officer

     

    Pursuant
      to Mr. Valdman's employment offer letter, if there is a change in the Puget
      Sound Energy President and Chief Executive Officer and due to that change Mr.
      Valdman's employment is terminated or there is a significant decrease in the
      role, scope and compensation structure for his employment that is not otherwise
      covered by a change in control agreement, Mr. Valdman is entitled to receive
      the
      following benefits:

     

    
      	·  	
              a
                severance payment equal to one year's base
                salary;

            

    

     

    
      	·  	
              a
                pro-rata share of the annual incentive at 100%
                target;

            

    

     

    
      	·  	
              a
                relocation allowance not to exceed $50,000;
                and

            

    

     

    
      	·  	
              the
                vested
                portion of the restricted stock granted at the time of his
                employment.

            

    

     

    To
      receive these benefits, Mr. Valdman will be required to sign a waiver and
      release agreement in a form to be provided by Puget Sound Energy.Restricted Stock Award Agreement with CFO

     

    Exhibit
      10.56

     

    PUGET
      ENERGY, INC.

     

    RESTRICTED
      STOCK AWARD AGREEMENT

     

    

    TO: Bertrand
      A. Valdman

     

    

    We
      are
      pleased to inform you that you have been awarded by Puget Energy, Inc., a
      Washington corporation (the "Company"), a restricted stock award (the
      "Restricted Stock Award").

     

    The
      terms
      of the Restricted Stock Award are as set forth in this Restricted Stock Award
      Agreement (this "Agreement"). The Restricted Stock Award is granted under the
      Company's Amended and Restated 1995 Long-Term Incentive Compensation Plan (the
      "Plan") and, except as expressly provided otherwise herein, is limited by and
      subject to the express terms and conditions of the Plan. Capitalized terms
      that
      are not defined in this Agreement but defined in the Plan have the meanings
      given to them in the Plan. 

    

    The
      basic
      terms of the Restricted Stock Award are summarized as follows:

     

    
      	1.  	
              Number
                of Shares: 10,000

            

    

     

    
      	2.  	
              Grant
                Date: December
                4, 2003

            

    

     

    
      	3.  	
              Fair
                Market Value Per Share: $23.42

            

    

     

    
      	4.  	
              Vesting

            

    

    

    The
      Restricted Stock Award is subject to forfeiture upon varying circumstances
      relating to your termination of employment with the Company. The restrictions
      on
      the shares will lapse and no longer be subject to forfeiture according to the
      following schedule: 

    

    
      	
                     
                Date on Which Portion of Restricted 

              Stock
                Award Is No Longer Subject 

              to
                Forfeiture

            	
                     
                % of Restricted Stock 

              Award
                No Longer 

              Subject
                to Forfeiture

            
	
               

              One
                year from Grant Date

            	
               

              20%

            
	
               

              Two
                years from Grant Date

            	
               

              40%

            
	
               

              Three
                years from Grant Date

            	
               

              60%

            
	
               

              Four
                years from Grant Date

            	
               

              80%

            
	
               

              Five
                years from Grant Date

            	
               

              100%

            

    

    

    Shares
      that have vested and are no longer subject to forfeiture according to the above
      schedule are referred to herein as "Vested Shares." Shares that are not vested
      and remain subject to forfeiture under the preceding schedule are referred
      to
      herein as "Unvested Shares." The Unvested Shares will vest (and to the extent
      so
      vested cease to be Unvested Shares remaining subject to forfeiture) in
      accordance with the above schedule. Collectively, the Unvested Shares and the
      Vested Shares are referred to herein as the "Shares."

     

    
      	5.  	
              Termination
                of Employment; Change of
                Control

            

    

     

    
      	5.1  	
              Termination
                of Employment

            

    

    

    Except
      as
      provided in Sections 5.2 and 5.3 below, the portion of the Restricted Stock
      Award subject to forfeiture shall be forfeited by you to the Company upon the
      termination of your employment for any reason, including without limitation,
      termination by the Company for Cause (as defined in the Agreement), voluntary
      resignation by you or the occurrence of your death or Disability (as defined
      in
      the Agreement). 

     

    
      	5.2  	
              Change
                of Control

            

    

    

    Upon
      a
      Change of Control (as defined below) of the Company, the vesting of your
      Restricted Stock Award will accelerate and become fully vested. 

    

    A
      Change
      of Control shall mean the occurrence of any one of the following actions or
      events:

     

    
      	 	
              (i)

            	
              The
                acquisition by any individual, entity or group of beneficial ownership
                (within the meaning of Rule 13d-3 promulgated under the Securities
                Exchange Act) of  20% or more of either (A) the Company's
                outstanding common stock or (B) the Company's outstanding voting
                securities; provided, however, that the following acquisitions shall
                not
                constitute a Change of Control: (x) any acquisition of securities by
                the Company, (y) any acquisition of securities by any employee
                benefit plan (or related trust) sponsored or maintained by the Company
                or
                any corporation controlled by the Company, or (z) any acquisition by
                any corporation pursuant to a business combination, if, following
                such
                business combination, the conditions described in clauses (1), (2)
                and (3) of subsection (iii) of this Section 6.2 are satisfied;
                or

            

    

     

    
      	 	
              (ii)

            	
              A
                "Board Change" that shall have occurred if a majority of the seats
                on the
                Board are occupied by individuals who were neither (1) nominated by a
                majority of the Incumbent Directors nor (2) appointed by directors so
                nominated ("Incumbent Director" means a member of the Board who has
                been
                either (x) nominated by a majority of the directors of the Company
                then in office or (y) appointed by directors so nominated, but
                excluding, for this purpose, any such individual whose initial assumption
                of office occurs as a result of either an actual or threatened election
                contest (as such terms are used in Rule 14a-11 of Regulation 14A
                promulgated under the Securities Exchange Act) or other actual or
                threatened solicitation of proxies or consents by or on behalf of
                a Person
                other than the Board); or

            

    

     

    
      	 	
              (iii)

            	
              Approval
                by the shareholders of the Company of a Business Combination (which
                means
                (A) a reorganization, exchange of securities, merger, consolidation
                or
                other business combination involving the Company or (B) the sale
                or other
                disposition of all or substantially all the assets of the Company
                or Puget
                Sound Energy) unless after giving effect to such Business Combination
                and
                any equity financing completed or contemplated in connection with
                or as a
                result of such Business Combination, (1) more than 66-2/3% of,
                respectively, the then outstanding shares of common stock of the
                corporation resulting from or effecting such Business Combination
                and the
                combined voting power of the then outstanding voting securities of
                such
                corporation entitled to vote generally in the election of directors
                is
                then beneficially owned, directly or indirectly, by all or substantially
                all the individuals and entities who were the beneficial owners,
                respectively, of the outstanding common stock of the Company and
                outstanding voting securities of the Company immediately prior to
                such
                Business Combination in substantially the same proportion as their
                ownership, immediately prior to such Business Combination, of the
                outstanding common stock of the Company and outstanding voting securities,
                as the case may be, (2) no Person (excluding the Company and any
                employee benefit plan (or related trust) of the Company or its affiliates)
                beneficially owns, directly or indirectly, 20% or more of, respectively,
                the then outstanding shares of common stock of the corporation resulting
                from or effecting such Business Combination or the combined voting
                power
                of the then outstanding voting securities of such corporation entitled
                to
                vote generally in the election of directors, and (3) at least a
                majority of the members of the board of directors of the Company
                resulting
                from or effecting such Business Combination were Incumbent Directors
                at
                the time of the execution of the initial agreement or action of the
                Board
                providing for such Business
                Combination.

            

    

     

    
      	6.  	
              Securities
                Law Compliance

            

    

    

    Notwithstanding
      any other provision of this Letter Agreement, you may not sell the Shares unless
      they are registered under the Securities Act or, if such Shares are not then
      so
      registered, the Company has determined that such sale would be exempt from
      the
      registration requirements of the Securities Act. The sale of the Shares must
      also comply with other applicable laws and regulations governing the Shares,
      and
      you may not sell the Shares if the Company determines that such sale would
      not
      be in material compliance with such laws and regulations.

     

    
      	7.  	
              Transfer
                Restrictions

            

    

    

    Any
      sale,
      transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust,
      gift, transfer by bequest, devise or descent, or other transfer or disposition
      of any kind, whether voluntary or by operation of law, directly or indirectly,
      of Unvested Shares shall be strictly prohibited and void; however, such
      restrictions on transfer will not apply to a gratuitous transfer of the Shares;
      provided, that you obtain the Company's prior written consent to such
      transfer.

     

    
      	8.  	
              Section 83(b)
                Election for Restricted Stock Award

            

    

    

    You
      understand that under Section 83(a) of the Code, the excess of the fair
      market value of the Unvested Shares on the date the forfeiture restrictions
      lapse over the amount paid for such Shares on the Grant Date will be taxed,
      on
      the date such forfeiture restrictions lapse, as ordinary income subject to
      payroll and withholding tax and tax reporting, as applicable. For this purpose,
      the term "forfeiture restrictions" means the right of the Company to receive
      back any Unvested Shares upon termination of your employment with the Company.
      You understand that you may elect under Section 83(b) of the Code to be
      taxed at ordinary income rates on the fair market value of the Unvested Shares
      at the time they are acquired, rather than when and as the Unvested Shares
      cease
      to be subject to the forfeiture restrictions. Such election (an "83(b)
      Election") must be filed with the Internal Revenue Service within
      30 days
      from the
      Grant Date of the Restricted Stock Award. 

    You
      understand that (a) you will not be entitled to a deduction for any ordinary
      income previously recognized as a result of the 83(b) Election if the Unvested
      Shares are subsequently forfeited to the Company and (b) the 83(b) Election
      may
      cause you to recognize more compensation income than you would have otherwise
      recognized if the value of the Unvested Shares subsequently
      declines.

    

    THE
      FORM FOR MAKING AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT
      B.
      YOU UNDERSTAND THAT FAILURE TO FILE SUCH AN ELECTION WITHIN THE 30-DAY PERIOD
      MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME BY YOU AS THE FORFEITURE
      RESTRICTIONS LAPSE.
      

    

    You
      further understand that an additional copy of such election form should be
      filed
      with your federal income tax return for the calendar year in which the date
      of
      this Agreement falls. You acknowledge that the foregoing is only a summary
      of
      the federal income tax laws that apply to the award of the Shares under this
      Agreement and does not purport to be complete. 

    

    YOU
      FURTHER ACKNOWLEDGE THAT THE COMPANY HAS DIRECTED YOU TO SEEK INDEPENDENT ADVICE
      REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY
      MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH YOU MAY RESIDE, AND THE TAX
      CONSEQUENCES OF YOUR DEATH.

    

    You
      agree
      to execute and deliver to the Company with this Agreement a copy of the
      Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the
      "Acknowledgment") attached hereto as Exhibit A. You further agree that you
      will execute and deliver to the Company with this Agreement a copy of the 83(b)
      Election attached hereto as Exhibit B if you choose to make such an
      election.

     

    
      	9.  	
              Assignment
                Separate From Certificate

            

    

    

    As
      security for the faithful performance of this Agreement, you agree, upon
      execution of this Agreement, to deliver a stock power in the form attached
      as
      Exhibit C, executed by you and your spouse, if any (with
      the transferee, certificate number, date and number of Shares left
      blank),
      along
      with any certificate(s) evidencing shares issued to you, to the Secretary of
      the
      Company or its designee ("Escrow Holder"), who is hereby appointed to hold
      such
      stock power and any such certificate(s) in escrow and to take all such actions
      and to effectuate all such transfers and/or releases of such Shares as are
      in
      accordance with the terms of this Agreement. You and the Company agree that
      Escrow Holder shall not be liable to any party to this Agreement (or to any
      other party) for any actions or omissions unless Escrow Holder is grossly
      negligent relative thereto. Escrow Holder may rely on any letter, notice or
      other document executed by any signature purported to be genuine and may rely
      on
      advice of counsel and obey any order of any court with respect to the
      transactions contemplated in this Agreement. The Shares may be released from
      escrow as they cease to be Unvested Shares.

     

    
      	10.  	
              Legends

            

    

    

    You
      understand and agree that the Unvested Shares are subject to forfeiture and
      that
      the certificate(s) representing the Unvested Shares will bear a legend in
      substantially the following form:

    "The
      securities represented by this certificate are subject to certain restrictions
      on transfer and forfeiture restrictions and may not be sold, assigned,
      transferred, encumbered or in any way disposed of except as set forth in a
      restricted stock award agreement between the issuer and the original recipient
      of these shares, a copy of which may be obtained at the principal office of
      the
      issuer. Such transfer restrictions and forfeiture restrictions are binding
      on
      transferees of these shares."

     

    
      	11.  	
              Stop-Transfer
                Notices

            

    

    

    You
      understand and agree that, in order to ensure compliance with the restrictions
      referred to in this Agreement, the Company may issue appropriate "stop-transfer"
      instructions to its transfer agent, if any, and that, if the Company transfers
      its own securities, it may make appropriate notations to the same effect in
      its
      own records. The Company will not be required to (a) transfer on its books
      any Shares that have been sold or transferred in violation of the provisions
      of
      this Agreement or (b) treat as the owner of the Shares, or otherwise accord
      voting, dividend or liquidation rights to, any transferee to whom the Shares
      have been transferred in contravention of this Agreement.

     

    
      	12.  	
              Independent
                Tax Advice

            

    

    

    You
      acknowledge that determining the actual tax consequences to you of receiving
      or
      disposing of the Shares may be complicated. These tax consequences will depend,
      in part, on your specific situation and may also depend on the resolution of
      currently uncertain tax law and other variables not within the control of the
      Company. You are aware that you should consult a competent and independent
      tax
      advisor for a full understanding of the specific tax consequences to you of
      receiving or disposing of the Shares. Prior to executing this Agreement, you
      either have consulted with a competent tax advisor independent of the Company
      to
      obtain tax advice concerning the Shares in light of your specific situation
      or
      have had the opportunity to consult with such a tax advisor but have chosen
      not
      to do so.

     

    
      	13.  	
              Withholding
                and Disposition of Shares

            

    

    

    You
      agree
      to make arrangements satisfactory to the Company for the payment of any federal,
      state, local or foreign withholding tax obligations that arise either upon
      receipt of the Shares or as the forfeiture restrictions on any Shares lapse.
      In
      accordance with the Plan, you may use Vested Shares as a means to pay any
      applicable tax withholding obligations due hereunder.

     

    
      	14.  	
              General
                Provisions

            

    

     

    
      	14.1  	
              Notices

            

    

    

    Any
      notice required in connection with (a) the Company's forfeiture rights or
      (b) the disposition of any Shares covered thereby will be given in writing
      and will be deemed effective upon personal delivery or upon deposit in the
      U.S.
      mail, registered or certified, postage prepaid and addressed to the party
      entitled to such notice at the address indicated in this Agreement or at such
      other address as such party may designate by ten days' advance written notice
      under this Section 15.1 to all other parties to this
      Agreement.

     

    
      	14.2  	
              No
                Waiver

            

    

    

    No
      waiver
      of any provision of this Agreement will be valid unless in writing and signed
      by
      the person against whom such waiver is sought to be enforced, nor will failure
      to enforce any right hereunder constitute a continuing waiver of the same or
      a
      waiver of any other right hereunder.

     

    
      	14.3  	
              Undertaking

            

    

    

    You
      hereby agree to take whatever additional action and execute whatever additional
      documents the Company may deem necessary or advisable in order to carry out
      or
      effect one or more of the obligations or restrictions imposed on either you
      or
      the Shares pursuant to the express provisions of this Agreement.

     

    
      	14.4  	
              Entire
                Contract

            

    

    

    This
      Agreement, the Plan and the Agreement constitute the entire contract between
      the
      parties hereto with regard to the subject matter hereof. This Agreement is
      made
      pursuant to the provisions of the Plan and will in all respects be construed
      in
      conformity with the express terms and provisions of the Plan.

     

    
      	14.5  	
              Successors
                and Assigns

            

    

    

    The
      provisions of this Agreement will inure to the benefit of, and be binding on,
      the Company and its successors and assigns and you and your legal
      representatives, heirs, legatees, distributees, assigns and transferees by
      operation of law, whether or not any such person will have become a party to
      this Agreement and agreed in writing to join herein and be bound by the terms
      and conditions hereof.

     

    
      	14.6  	
              Shareholder
                of Record

            

    

    

    You
      will
      be recorded as a shareholder of the Company and will have, subject to the
      provisions of this Agreement and the Plan, all the rights of a shareholder
      with
      respect to the Shares.

     

    
      	14.7  	
              Counterparts

            

    

    

    This
      Agreement may be executed in two or more counterparts, each of which will be
      deemed an original, but which, upon execution, will constitute one and the
      same
      instrument.

     

    
      	14.8  	
              Governing
                Law

            

    

    

    This
      Agreement will be governed by and construed in accordance with the laws of
      the
      State of Washington.

    

    

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement dated December 4,
      2003.

    

    
      	
               

              PUGET
                ENERGY, INC.

            
	
               

              By:

            	
               

              /s/
                Michelle Clements

            
	 	
              Michelle
                Clements

            
	
               

              Title:
                

            	
               

              Vice
                President, Human Resources & Labor
                Relations

            

    

     

    
      	
               

              BERTRAND
                A. VALDMAN

            

    

    
      	
              /s/
                Bertrand Valdman

            
	
              Printed
                Name:

            	
              
                Bertrand
                  Valdman

              

            

    

    
 

    By
      her
      signature below, the spouse of the recipient of the Restricted Stock Award,
      if
      he is legally married as of the date of execution of this Agreement,
      acknowledges that she has read this Agreement and the Plan and is familiar
      with
      the terms and provisions of this Agreement and the Plan, and agrees to be bound
      by all the terms and conditions of this Agreement and the Plan.

    
      	
               

              Dated:
                

            	
               

              
                12-14-03

              

            
	
               

              /s/
                Madeleine Maillet Valdman

            
	
              Spouse's
                Signature

            	 
	
               

              Madeleine
                Maillet Valdman

            
	
              Printed
                Name

            	 

    

     

    By
      his
      signature below, recipient represents that he is not legally married as of
      the
      date of executing this Agreement.

     

    

     

    Dated:
      ________________________________

     

    

     

    

     

     

    Recipient's
      Signature ______________________

     

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    EXHIBIT
      A

     

    ACKNOWLEDGMENT
      AND STATEMENT OF DECISION REGARDING SECTION 83(b)
      ELECTION

     

    The
      undersigned, a recipient of 10,000 shares of Common Stock of Puget Energy,
      Inc.,
      a Washington corporation (the "Company"), pursuant to a restricted stock award
      granted under the terms of the Company's Amended and Restated Long-Term
      Incentive Compensation Plan (the "Plan"), hereby states as follows:

     

    1. The
      undersigned acknowledges receipt of a copy of the Restricted Stock Award
      Agreement and Plan relating to the offering of such shares. The undersigned
      has
      carefully reviewed the Plan and the Restricted Stock Award Agreement pursuant
      to
      which the award was granted.

     

    2. The
      undersigned either (check
      and complete as applicable)

     

    
      	 	
              (a)
                

            	
              has
                consulted, and has been fully advised by, the undersigned's own tax
                advisor, ________________________, whose business address is
                _________________________, regarding the federal, state and local
                tax
                consequences of receiving shares under the Plan, and particularly
                regarding the advisability of making an election pursuant to
                Section 83(b) of the Internal Revenue Code of 1986, as amended (the
                "Code"), and pursuant to the corresponding provisions, if any, of
                applicable state law, or

            

    

     

    (b)
      X
      has
      knowingly chosen not to consult such a tax advisor.

     

    3. The
      undersigned hereby states that the undersigned has decided (check
      as applicable)

     

    
      	 	
              (a)
                

            	
              to
                make an election pursuant to Section 83(b) of the Code, and is
                submitting to the Company, together with the undersigned's executed
                Restricted Stock Award Agreement, an executed form entitled "Election
                Under Section 83(b) of the Internal Revenue Code of 1986",
                or

            

    

     

    (b)
      X
      not
      to
      make an election pursuant to Section 83(b) of the Code.

     

    4. Neither
      the Company nor any subsidiary or representative of the Company has made any
      warranty or representation to the undersigned with respect to the tax
      consequences of the undersigned's acquisition of shares under the Plan or of
      the
      making or failure to make an election pursuant to Section 83(b) of the Code
      or the corresponding provisions, if any, of applicable state law.

    
      	
               

              Dated:
                12-14-03

            	
               

              /s/
                Bertrand Valdman

              Recipient

            
	 	
               

              Bertrand
                Valdman

              Print
                Name

            
	 	 
	
               

              Dated:
                12-14-03

            	
               

              /s/
                Madeleine Maillet Valdman

              Spouse
                of Recipient

            
	 	
               

              Madeleine
                Maillet Valdman

              Print
                Name

            

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    EXHIBIT
      B

     

    ELECTION
      UNDER SECTION 83(b) 

    OF
      THE INTERNAL REVENUE CODE OF 1986 

     

     

    The
      undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
      Internal Revenue Code, to include in taxpayer's gross income for the current
      taxable year the amount of any compensation taxable to taxpayer in connection
      with taxpayer's receipt of the property described below:

     

    
      	
              1.

            	
              The
                name, address, taxpayer identification number and taxable year of
                the
                undersigned are as follows:

            

    

     

    NAME
      OF
      TAXPAYER: ____________________________________

     

    NAME
      OF
      SPOUSE: _______________________________________

     

    ADDRESS:
      ______________________________________________

     

     

     

    IDENTIFICATION
      NO. OF TAXPAYER: ________________________ 

     

    IDENTIFICATION
      NO. OF SPOUSE: ___________________________

     

    TAXABLE
      YEAR: ___________

     

    
      	
              2.

            	
              The
                property with respect to which the election is made is described
                as
                follows: 50,000 shares of the Common Stock of Puget Energy, Inc.,
                a
                Washington corporation (the
                "Company").

            

    

     

    
      	
              3.

            	
              The
                date on which the property was transferred is: January 8, 2002.
                

            

    

     

    
      	
              4.

            	
              The
                property is subject to the following
                restrictions:

            

    

     

    The
      property is subject to a forfeiture right pursuant to which the Company can
      reacquire the Shares if for any reason taxpayer's services with the Company
      are
      terminated. The Company's right to receive back the shares lapses in a series
      of
      installments over a five-year period ending on January 1, 2007.

     

    
      	
              5.

            	
              The
                aggregate fair market value at the time of transfer, determined without
                regard to any restriction other than a restriction which by its terms
                will
                never lapse, of such property is: $1,137,000.00 (one million one
                hundred
                thirty seven thousand dollars)

            

    

     

    
      	
              6.

            	
              The
                amount (if any) paid for such property is:
                $0.00

            

    

     

    The
      undersigned has submitted a copy of this statement to the person for whom the
      services were performed in connection with the undersigned's receipt of the
      above-described property. The undersigned is the person performing the services
      in connection with the transfer of said property.

     

    

     

    The
      undersigned understands that the foregoing election may not be revoked except
      with the consent of the Commissioner of Internal Revenue.

     

    

    
      	
               

              Dated:
                _______________

            	
               

              ____________________

              Taxpayer

            
	
               

              Dated:
                _______________

            	
               

              /s/
                Madeleine Maillet Valdman

              Spouse
                of Taxpayer

            

    

     

    DISTRIBUTION
      OF COPIES

     

    
      	
              1.

            	
              File
                original with the Internal Revenue Service Center where the taxpayer's
                income tax return will be filed. Filing must be made by no later
                than 30
                days after the date the property was
                transferred.

            

    

     

    
      	
              2.

            	
              Attach
                one
                copy
                to the taxpayer's income tax return for the taxable year in which
                the
                property was transferred.

            

    

     

    
      	
              3.

            	
              Mail
                one copy to the Company at the following
                address:

            

    

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    EXHIBIT
      C

     

    STOCK
      POWER AND ASSIGNMENT 

    SEPARATE
      FROM CERTIFICATE

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      _____________________, _________ shares of the Common Stock of Puget Energy,
      Inc., a Washington corporation, standing in the undersigned's name on the books
      of said corporation represented by Certificate No. ___ delivered herewith,
      and does hereby irrevocably constitute the Secretary of said corporation as
      attorney-in-fact, with full power of substitution, to transfer said stock on
      the
      books of said corporation.

     

    Dated:
      ______________________________

     

    

     

    Signature:
      ___________________________

     

    Please
      print name: _____________________

     

    

     

    Spouse's
      signature, if any: _______________

     

    Please
      print name: _____________________

    

     

    Please
      see Section 10 of the Restricted Stock Award Agreement for information on
      completing this form.

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