DTE ENERGY COMPANY
DEFERRED STOCK COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
The DTE Energy
Company Deferred Stock Compensation Plan (the “Plan”)
was originally established by DTE Energy Company (the
“Company”) effective as of January 1, 1999. This
amendment and restatement of the Plan is effective January 1,
2005, unless another effective date is specified for a particular
Plan provision.
The Plan is
being amended and restated effective January 1, 2005 to comply
with the requirements of Code Section 409A exclusively with
respect to benefits accrued and vested after December 31,
2004. It is intended that all Plan benefits accrued and vested as
of December 31, 2004 are not subject to Code
Section 409A. Only Plan benefits accrued and vested after
January 1, 2005 are subject to Code Section 409A. Any
inconsistency or ambiguity in this amended and restated Plan
document is to be construed consistent with this
paragraph.
As permitted by
the Treasury Regulations promulgated under Code Section 409A
and guidance issued by the Internal Revenue Service, the Plan has
been administered in compliance with applicable guidance under Code
Section 409A in effect after December 31, 2004 before the
adoption of this amended and restated Plan document.
The purpose of
the Plan is to further the growth, development and financial
success of the Company by providing incentives to Directors (as
defined below) and to assist the Company in attracting and
retaining Directors by offering Directors an opportunity to earn
Company Common Stock.
Any Director of
the Company who is not a Company employee or an employee of any
Affiliate (a “Director”) shall become a participant in
the Plan as of the later of January 1, 1999 or the January
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occurring on or next following the
date he or she becomes a Director. For purposes of the Plan,
“Affiliate” shall mean any entity in which the Company
directly or indirectly beneficially owns more than 50% of the
voting securities.
SECTION III
ANNUAL AWARDS
Each Director
participating in the Plan who is a Director on the first business
day of a calendar year beginning on or after January 1, 2008
shall receive automatically on such date as a credit to an unfunded
deferred stock account established for the Director under
Section IV below, the number of hypothetical shares of Company
Common Stock approved for that calendar year by the Corporate
Governance Committee of the Company’s Board of
Directors.
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SECTION IV
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ESTABLISHMENT AND ADMINISTRATION OF
DEFERRED STOCK ACCOUNT
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(A) The
annual amount of hypothetical Company Common Stock awarded to a
Director under Section III shall be credited to a deferred
stock account maintained by the Company. Such account shall remain
a part of the general funds of the Company, and nothing contained
in this Plan shall be deemed to create a trust or fund of any kind
or create any fiduciary relationship.
(B) The
deferred stock account for each Director who is a participant in
the Plan is divided into two subaccounts:
(1) The
“Pre-2005 Subaccount” is the portion of a
participant’s deferred stock account attributable to
hypothetical shares of Company Common Stock awarded to the Director
under Section III before January 1, 2005, and adjustments
to the director’s deferred stock account made under this
Section IV attributable to the hypothetical shares of Company
Common Stock awarded to the Director before January 1,
2005.
(2) The
“Post-2004 Subaccount” is the portion of a
participant’s deferred stock account attributable to
hypothetical shares of Company Common Stock awarded to the Director
under Section III after December 31, 2004, and
adjustments to the director’s deferred stock account made
under this Section IV attributable to the hypothetical shares
of Company Common Stock awarded to the Director after
December 31, 2004.
(C) As of
the last day of each month for each Director participating in this
Plan and until all amounts in a Director’s deferred stock
account are distributed to the Director, the deferred stock account
for such Director shall be adjusted as follows:
(1) The
account shall first be charged with any distributions made during
the month as of the date made.
(2) Next,
the account shall be credited with the amount, if any, of
hypothetical Company Common Stock awarded during that month under
Section III, with such credit to be made as of the date
provided in Section III.
(3) Finally, the account shall be adjusted
to reflect the number of hypothetical shares of Company Common
Stock allocated to the account during the month to reflect
reinvested cash dividends. The number of such hypothetical shares
of Company Common Stock allocated to reflect reinvested cash
dividends shall be equal to the number of shares of Company Common
Stock that would have been allocated to the account as of any date
if cash dividends paid on the equivalent number of shares of
Company Common Stock treated as allocated to the account were
automatically reinvested in the Company Common Stock at Fair Market
Value on the trading day that is coincident with or next following
the applicable dividend payment date. For purposes of the Plan,
“Fair Market Value” means, before January 1, 2009,
the average of the high and low sales prices of Company Common
Stock or, after December 31, 2008, the closing sales price of
Company Common Stock on the New York Stock Exchange (or any
exchange on which
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Company Common
Stock is listed if at any time Company Common Stock is not listed
on the New York Stock Exchange) on the specified date.
In the event of
any stock dividend or split, recapitalization, reclassification,
increase or decrease in the number of outstanding shares, merger,
consolidation or exchanges in shares or other similar changes in
the Company’s Common Stock, appropriate adjustments shall be
made in the hypothetical shares of Company Common Stock allocated
to each Director’s deferred stock account to reflect any such
change.
A separate
record of the deferred stock account and adjustments thereto shall
be maintained by the Company for each participant in this
Plan.
SECTION V
PAYMENT OF DEFERRED STOCK ACCOUNT
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(A)
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Pre-2005 Subaccount
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(1) The
balance of the Director’s Pre-2005 Subaccount shall be paid
to a Director or, in the event of death, to his or her designated
beneficiary in accordance with the Beneficiary Designation form
that has been filed with the Corporate Secretary of the Company,
within 15 days after the date the Director terminates his or her
service on the Board of Directors of the Company for any reason.
Payment shall be made in a lump sum in cash, or at the election of
the Director made prior to termination of service and with the
approval of the Board, in whole shares of Company Common Stock with
any fractional share being paid in cash. The amount of any cash
distribution from a Director’s Pre-2005 Subaccount shall be
made at Fair Market Value on the trading day that is coincident
with or next preceding the date of the Director’s termination
of service.
(2) In the
event a participating Director receives an assessment of income
taxes from the Internal Revenue Service which treats any amount
payable under this Plan from the Director’s Pre-2005
Subaccount as being includible in such Director’s gross
income prior to the actual payment of such amount to such Director,
the Company shall pay an amount equal to such income taxes to such
Director within 30 days after written notice from such
Director of such assessment, and such Director’s Pre-2005
Subaccount shall be reduced by an amount equal to such income
taxes.
(3) Each
payment under this Plan from the Director’s Pre-2005
Subaccount shall be reduced by any federal, state, or local taxes
which the Company determines should be withheld from such
payment.
(4) Benefits under this Plan shall be
payable solely from the general assets of the Company, provided,
however, that no provision in this Plan shall preclude the Company
from segregating assets which are intended to be a source for
payment of benefits under this Plan. Each participant in this Plan
shall have the status of a general unsecured creditor of the
Company. This Plan constitutes a promise by the Company to make
benefit payments in the future. It is intended that this Plan be
unfunded for tax purposes and that this Plan shall remain unfunded
for the entire period of its existence.
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(5) Notwithstanding the foregoing or
anything to the contrary in the Plan, the distribution of all or
any portion of a Director’s Pre-2005 Subaccount will be
delayed for a period not to exceed seven months or may be subject
to prior approval by the Board to the extent that the Corporate
Governance Committee of the Board of Directors of the Company
determines that such delay or approval is necessary or desirable to
ensure that the distribution from the Director’s Pre-2005
Subaccount under the Plan will qualify for an exemption from the
liability provisions imposed on the Director under Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any rules and
regulations issued thereunder. In the event of any such delay, the
undistributed portion of the Director’s Pre-2005 Subaccount
shall continue to be subject to adjustment as provided in
Section IV until distribution is made.
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(B)
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Post-2004 Subaccount
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(1) A
Director’s entire Post-2004 Subaccount is subject to a single
election with respect to the deferral period and the form of
distribution.
(2) The
default deferral period for hypothetical shares awarded under
Section III after December 31, 2004 is three years from
date awarded. The default form of distribution for hypothetical
shares awarded under Section III after December 31, 2004
is a single lump sum paid on the date the deferral period
ends.
(3) A
Director may elect to change the deferral period for all
hypothetical shares of Company Common Stock awarded after
December 31, 2004 to the date the Director’s service on
the Board terminates. For purposes of the Plan, a Director’s
service on the Board terminates as of the date specified by the
Company in the Company’s required filing with U.S. Securities
and Exchange Commission.
A Director who
elects to change the deferr
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