Exhibit 99.6
EMPLOYMENT AGREEMENT
This Employment Agreement
(“Agreement”) is made as of September 14, 1999
(the “Effective Date”) by Flint Construction
Company, Georgia corporation , (“Employer”),
SEMCO Energy, Inc., a Michigan corporation
(“SEMCO”), and Robert J. Good, an individual
residing at 1601 Old Fountain Road, Lawrenceville, Georgia
30043 (“Executive”)
This Agreement is entered
into in connection with and as an integral part of the
purchase by SEMCO of all the outstanding capital stock of
Employer under that certain Stock Purchase Agreement dated
September 14, 1999. SEMCO and Employer desire
Executive’s continued employment with Employer, and
Executive wishes to accept such continued employment, upon
the terms and conditions set forth in this Agreement. The
execution of this Agreement is a condition to and an
inducement to SEMCO for consummating the transactions under
the Stock Purchase Agreement.
The parties, intending to
be legally bound, agree as follows:
1.
DEFINITIONS
For
the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section
1.
“Basic
Compensation” shall mean Salary and
Benefits.
“Board
of Directors” shall mean the board of directors of
Employer.
“Confidential
Information” shall mean any and all:
(a)
trade secrets concerning the business and affairs of Employer,
product specifications, data, know- how, formulae,
compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and
planned manufacturing or distribution methods and processes,
customer lists, current and anticipated customer requirements,
price lists, market studies, business plans, computer software
and programs (including object code and source code), computer
software and database technologies, systems, structures, and
architectures (and related formulae, compositions, processes,
improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, and methods), and any other
information, however documented, that is a trade secret;
and
(b)
information concerning the business and affairs of Employer
(which includes historical financial statements, financial
projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds
of key personnel, personnel training and techniques and
materials, and pricing), however documented; and
(c)
notes, analysis, compilations, studies, summaries, and other
material prepared by or for Employer containing or based, in
whole or in part, on any information included in the
foregoing.
“Employee
Invention” shall mean any idea, invention, technique,
modification, process, or improvement (whether patentable or
not), any industrial design (whether registerable or not), and
any work of authorship (whether or not copyright protection
may be obtained for it) created, conceived, or
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developed
by Executive, either solely or in conjunction with others,
during the Employment Period, or a period that includes a
portion of the Employment Period, that relates in any way to,
or is useful in any manner in, the business then being
conducted or proposed to be conducted by Employer, and any
such item created by Executive, either solely or in
conjunction with others, following termination of
Executive’s employment with Employer, that is based upon
or uses Confidential Information.
“Employment
Period” shall mean the term of Executive’s
employment under this Agreement.
“GAAP”
shall mean generally accepted accounting principles as
currently interpreted by the public accounting profession in
the United States of America.
“Person”
shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership,
limited liability company, joint venture, estate, trust,
association, organization, or governmental body.
“Incentive
Compensation” shall mean additional compensation paid to
Executive in the form of Bonus or Stock Options, or
both.
“Return
on Assets” (“ROA”) shall mean the result
obtained by dividing Earnings Before Interest and Taxes for
the 12 month period ending on the last day of the
Employer’s fiscal year (which is currently a calendar
year) by Total Assets.
“Total
Assets” shall mean the average of the calculations for
each month during the fiscal year of the sum of the Current
Assets plus Fixed Assets (including Goodwill recorded on the
books of SEMCO in connection with the acquisition of the
common stock of the Employer, less accumulated depreciation
and amortization), all as reflected on Employer’s books,
and determined by Employer in accordance with
GAAP.
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(b)
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“Earnings
Before Interest and Taxes” (“EBIT”) shall mean
Employer’s revenue from ordinary business operations, less
expenses, and other charges (including amortization of goodwill
recorded on the books of SEMCO as a result of the acquisition of
the common stock of the Employer), before deducting interest and
Federal and state income taxes, all as reflected on
Employer’s books. The EBIT will be determined by the Employer
in accordance with GAAP.
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2.
EMPLOYMENT TERMS AND DUTIES
2.1
EMPLOYMENT
Employer
hereby employs Executive, and Executive hereby accepts
employment by Employer, upon the terms and conditions set
forth in this Agreement.
2.2
TERM
Subject
to the provisions of Section 6, the term of Executive’s
employment under this Agreement will be three (3) years,
beginning on the Effective Date and ending on August 31,
2002.
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2.3
DUTIES
Executive
will have such duties as are assigned or delegated to
Executive by the Board of Directors, and will initially serve
as President of Employer. Executive will devote his entire
best efforts, time, attention and energy to the performance of
his duties hereunder and to promote and further the interests
of Employer, and will cooperate fully with the Board of
Directors in the advancement of the best interests of
Employer. Nothing in this Section 2.3, however, will prevent
Executive from engaging in additional activities in connection
with personal investments and community affairs that are not
inconsistent with Executive’s duties under this
Agreement.
3.
COMPENSATION
3.1
BASIC COMPENSATION
(A)
Salary. Executive shall be paid an annual salary of One
Hundred Twenty Thousand Dollars ($120,000), subject to
adjustment as provided below (“Salary”), which
will be payable in equal periodic installments according to
Employer’s customary payroll practices, but no less
frequently than monthly. The Salary will be reviewed by the
Board of Directors not less frequently than annually, and may
be adjusted upward in the sole discretion of the Board of
Directors, but in no event will the Salary be less than One
Hundred Twenty Thousand Dollars ($120,000).
(B)
Benefits. Executive will, during the Employment Period, be
permitted to participate in such pension, profit sharing, life
insurance, hospitalization, major medical, and other employee
benefit plans of Employer that may be in effect from time to
time, to the extent Executive is eligible under the terms of
those plans (collectively, “Benefits”). Employer
will pay the cost of Executive’s dependent health care
coverage under Employer’s plans.
(C)
Directors Fees. If Executive serves as a director of the
Employer or one of its subsidiaries, Executive will be paid
for such service in accordance with Employer’s standard
practices for such service. Executive understands that it is
not SEMCO’s practice to pay such fees for serving as a
director of SEMCO’s affiliates.
3.2
INCENTIVE COMPENSATION
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(A)
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The
Employer will pay the Executive Incentive Compensation for the
services to be rendered by Executive pursuant to this Agreement in
accordance with the following provisions. If the Employer’s
ROA, as adjusted for any partial year, for any calendar year during
the first three (3) year period after Closing is equal to the
target ROA percentages indicated in the table below, Executive
shall receive the corresponding (i) Bonus and (ii) Stock Options to
acquire the number of shares of SEMCO common stock as indicated in
the table below. The period for which a calculation respecting
incentive compensation is to be made shall be called the
“Calculation Period.”. The first Calculation Period
shall be for the period from the Effective Date until December 31,
1999. The second Calculation Period shall be the calendar year
ending December 31, 2000. The third Calculation Period shall be the
calendar year ending December 31, 2001. The final Calculation
Period shall be the eight calendar month period ending August 31,
2002. In the event this Agreement is terminated prior to August 31,
2002, the final Calculation Period shall be the period from the end
of the prior Calculation Period to the end of the month in which
the termination occurs. For the first Calculation Period the
Executive will be paid Incentive
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Compensation
equal to five percent (5%) of the Net Income of the Employer
(computed in accordance with generally accepted accounting
principals) prior to the deduction of income taxes or any
Incentive Compensation to be paid to the Executive or Mr.
Robert J. Good. Thereafter, in the event that the Calculation
Period is less than a full calendar year, the calculation
shall be made by multiplying the numbers in each column in the
table below by a fraction, the numerator of which is the
number of months in the final Calculation Period and the
denominator of which is 12.
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Actual
ROA
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Bonus
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Stock
Options
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11.00%
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$36,000
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7,000
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10.75%
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$33,600
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6,000
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10.50%
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$31,200
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5,000
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10.25%
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$28,800
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4,000
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10.00%
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$26,400
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3,000
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9.75%
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$24,000
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2,000
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9.50%
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$21,600
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1,000
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9.25%
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$19,200
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0
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9.00%
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$0
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0
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(B) In
addition to the foregoing, Employee shall receive the
following additional Incentive Compensation for each 25 basis
points Employer’s actual ROA exceeds 11 %: $2,400 in
bonus and stock options for 1,000 shares of SEMCO common
stock. For these purposes there shall be no interpolation or
no additional Incentive Compensation paid, within each 25
basis point increments of ROA. The appropriate Incentive
Compensation described herein will be paid to Executive in one
lump sum, or in a single Stock Option grant, as the case may
be, within 90 days after the end of the applicable calendar
year or fiscal period.
4.
FACILITIES AND EXPENSES
4.1
GENERAL
Employer
will furnish Executive office space, equipment, supplies, and
such other facilities and personnel as Employer deems
necessary or appropriate for the performance of
Executive’s duties under this Agreement. Employer will
pay Executive’s dues in such professional societies and
organizations, as the Board of Directors deems appropriate.
Additionally, Employer will pay on behalf of Executive (or
reimburse Executive for) reasonable expenses incurred by
Executive at the request of, or on behalf of, Employer in the
performance of Executive’s duties pursuant to this
Agreement, and in accordance with Employer’s employment
policies, including reasonable expenses incurred by Executive
in attending conventions, seminars, and other business
meetings, in appropriate business entertainment activities,
and for promotional expenses. Executive shall file expense
reports with respect to such expenses in accordance with
Employer’s policies.
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4.2
AUTOMOBILE AND OTHER BENEFITS
Employer
shall furnish to Executive at Employer’s cost, an
automobile substantially equivalent to the automobile
currently driven by Executive and otherwise in accordance with
the terms of the Employer’s company-owned automobile
policies. Such automobile shall be available for use
exclusively by Executive. The Employer shall pay, or, at
Executive’s election, shall reimburse Executive for, all
fees, taxes, costs and expenses relating to licensing,
insuring and maintaining such automobile and shall furnish
gasoline in connection with any use of such automobile by
Executive for Employer purposes. Executive shall be
responsible for all payments attributable to traffic
violations relating to Executive’s use of such
automobile (other than such payments, or the portion thereof,
covered by insurance on such automobile) and shall maintain
the automobile in saleable condition at all times. Employer
shall also furnish Executive with a pager and cell phone at
Employer’s cost.
5.
VACATIONS AND HOLIDAYS
Executive
will be entitled to four (4) weeks’ paid vacation each
Calendar year and five (5) sick days in accordance with the
vacation and sick day policies of Employer in effect for its
executive officers from time to time. Executive must take
vacation at such time or times as approved by the Chairman of
the Board. Executive will also be entitled to the paid
holidays and other paid leave set forth in Employer’s
policies. Vacation days and holidays during any Calendar year
that are not used by Executive during such Calendar year may
not be used in any subsequent Calendar year.
6.
TERMINATION
6.1
EVENTS OF TERMINATION
The
Employment Period, Executive’s Basic Compensation and
Incentive Compensation, and any and all other rights of
Executive under this Agreement or otherwise as an employee of
Employer will terminate (except as otherwise provided in this
Section 6):
(a)
upon the death of Executive;
(b)
upon the Disability of Executive (as defined in Section 6.2)
immediately upon notice from either party to the
other;
(c)
for cause (as defined in Section 6.3), immediately upon notice
from Employer to Executive, or at such later time as such
notice may specify;
(d)
for good reason (as defined in Section 6.4) upon not less than
thirty days’ prior notice from Executive to
Employer;
(e)
termination by Employer not for cause; or
(f)
termination by Executive not for good reason.
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6.2
DEFINITION OF DISABILITY
For
purposes of Section 6.1, Executive will be deemed to have a
“disability” if, for physical or mental reasons,
Executive is unable to perform Executive’s duties under
this Agreement for 120 consecutive days, or 180 days during
any twelve month period, as determined in accordance with this
Section 6.2. The disability of Executive will be determined by
a medical doctor selected by written agreement of Employer and
Executive upon the request of either party by notice to the
other. If Employer and Executive cannot agree on the selection
of a medical doctor, each of them will select a medical doctor
and the two medical doctors will select a third medical doctor
who will determine whether Executive has a disability. The
determination of the medical doctor selected under this
Section 6.2 will be binding on both parties. Executive shall
submit to a reasonable number of examinations by the medical
doctor making the determination of disability under this
Section 6.2, and Executive hereby authorizes the disclosure
and release to Employer of such determination and all
supporting medical records. If Executive is not legally
competent, Executive’s legal guardian or duly authorized
attorney-in-fact will act in Executive’s stead, under
this Section 6.2, for the purposes of submitting Executive to
the examinations, and providing the authorization of
disclosure, required under this Section 6.2.
6.3
DEFINITION OF “FOR CAUSE”
For
purposes of Section 6.1, the phrase “for cause”
means: (a) Executive’s material breach of this
Agreement; (b) Executive’s failure to perform his duties
in accord with the direction of the Board of Directors; (c)
the appropriation (or attempted appropriation) of a material
business opportunity of Employer, including attempting to
secure or securing any personal profit in connection with any
transaction entered into on behalf of Employer; (d) the
misappropriation (or attempted misappropriation) of any of
Employer&
