PERFORMANCE CASH UNIT AGREEMENT NICOR INC. 2007 LONG-TERM INCENTIVE PROGRAM
NICOR
INC. 2007 LONG-TERM INCENTIVE PROGRAM
THIS
AGREEMENT,
entered into as of ______ ____, 2007 (the "Agreement Date"), by and between
«First_Name» «MiName» «Last_Name» (the "Employee"), and Nicor Inc., an Illinois
corporation (the "Company");
WITNESSETH
THAT:
WHEREAS, the Company maintains the Nicor Inc. 2007 Long‑Term Incentive Program
(the "Program"), which is part of the Nicor Inc. 2006 Long-Term Incentive Plan
(the “Plan”) and which is incorporated into and form a part of this Agreement,
for the benefit of key executive and management employees of the Company and
any
Related Company; and
WHEREAS,
the Employee has been selected by the Compensation Committee of the Board of
Directors of the Company (the "Committee") to receive a Performance Cash Unit
award;
NOW,
THEREFORE, IT IS AGREED, by and between the Company and the Employee, as
follows:
1.
Award. The Employee is
hereby awarded «PU» Performance Cash Units,
effective as of the Agreement Date.
2.
Amount of Payment. Subject to the provisions of this Agreement, the
Program and the Plan, the Company shall distribute to the Employee, for each
Performance Cash Unit awarded under this Agreement, an amount equal to one
dollar times the product of, (1) the number of Performance Cash Units MULTIPLIED
BY (2) the Total Shareholder Return Performance Factor (as defined below) for
the Performance Period (as defined below).
3.
Time of Payment. Amounts due under paragraph 2 with respect to
Performance Cash Units shall be paid as a lump sum cash payment as soon as
practicable after the end of the Performance Period; provided, however, if
payment is not made by 2 ½ months following the end of the Performance Period,
payment will be made no later than December 31 of the calendar year following
the end of the Performance Period.
4.
Total Shareholder Return. For purposes of this Agreement, the Total
Shareholder Return (TSR) is defined as the three-year total shareholder return
of the Company calculated with dividends reinvested, for all shares of common
stock of the Company (“Company Stock”) reported for the New York Stock Exchange
- Composite Transactions ending on the last day of the Performance Period (or,
if Company Stock is not traded on that date, on the next preceding date on
which
Company Stock is traded). For purposes of calculating the TSR: (i) the
starting stock price will be an average of the closing prices for the 20 trading
days ending on December 31, 2006 and (ii) the ending stock price will be an
average of the closing prices for the 20 trading days ending on December 31,
2009.
5. Performance Period. For purposes of this Agreement,
the Performance Period shall be the period beginning January 1, 2007, and ending
December 31, 2009.
6.
Performance Factors. For purposes of this Agreement, the term
"Total
Shareholder
Return Performance Factor" for the Performance Period shall be determined in
accordance with Exhibit 1 to this Agreement.
7.
Vesting. The Employee shall be vested in and entitled to payment of
benefits under this Agreement only if the requirements of either paragraph
(a)
or paragraph (b) next below are satisfied:
(a)
The Employee is continuously employed by the Company and the Related Companies
during the period beginning on the Agreement Date and ending on December 31,
2009.
(b) The Employee is continuously employed by the Company and the Related
Companies through the first anniversary of the Agreement Date, and such
employment terminates before January 1, 2010 by reason of his Retirement (as
defined below) or death.
The
Employee shall not be vested in or entitled to payment of benefits under this
Agreement unless the requirements of paragraph (a) or paragraph (b) next above
are satisfied. Nothing in this paragraph 7 shall be deemed to increase the
amount of benefits (if any) payable under this Agreement, as determined without
regard to this paragraph 7.
8.
Heirs and Successors. This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets
or
otherwise, all or substantially all of the Company's assets and business.
Subject to the terms of the Plan, any benefits payable to the Employee under
this Agreement that are not paid at the time of the Employee's death shall
be
paid at the time and in the form determined in accordance with the provisions
of
this Agreement, to the beneficiary designated by the Employee in writing filed
with the Committee in such form and at such time as the Committee shall
require. If a deceased Employee fails to designate a beneficiary, or if
the designated beneficiary of the deceased Employee dies before the Employee
or
before complete payment of the amounts distributable under this Agreement,
the
Committee shall, in its discretion, direct that amounts to be paid under this
Agreement be paid to:
(a)
one or more of the Employee's relatives by blood, adoption or marriage and
in
such proportion as the Committee decides; or
(b)
the
legal
representative or representatives of the estate of the last to die of the
Employee and his beneficiary.
9.
Retirement. For purposes of this Agreement, the term "Retirement"
means: (a) termination of employment because the Employee has reached
normal retirement age of 65 years; (b) termination of employment because the
Employee becomes Disabled; or (c) termination of employment because the employee
has attained at least age 55 and has at least 10 years of employment with the
Company or any Related Companies. For purposes of this Agreement, the term
"Disabled" means the inability of the Employee, by reason of a medically
determinable physical or mental impairment, to engage in any substantial gainful
activity, which condition, in the opinion of a physician selected by the
Committee, is expected to result in death or can be expected to last for a
continuous period of not less than 12 months.
10. Transferability. Performance Cash Units awarded under
this Agreement are not transferable except as designated by the Employee by
will
or by the laws of descent and distribution. Notwithstanding the foregoing,
the Committee may permit Performance Cash Units awarded under this Agreement
to
be transferred by the Employee for no consideration to or for the benefit of
the
Employee’s Immediate Family, subject to such limits as the Committee may
establish, and the transferee shall remain subject to all terms and conditions
applicable to such award prior to such transfer.
11.
Employment. This Agreement does not constitute a contract of
employment, and does not confer on the Employee the right to be retained in
the
employ of the Company or any Related Company.
12.
Change in Control. In the event that a Change in Control
occurs prior to the end of the Performance Period, Performance Cash Units may
be
paid out in such manner and amounts as determined by the Committee.
13. Plan
Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of this Agreement shall be subject to the terms of the Program and
of
the Plan, copies of which may be obtained by the Employee from the office of
the
Secretary of the Company. In the event of any conflict between any terms
of this Agreement and the terms of the Plan, the terms of the Plan shall
govern.
14.
Administration. The authority to manage and control the operation
and administration of this Agreement shall be vested in the Committee, and
the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Program and the Plan. Any interpretation of the Agreement
by the Committee and any decision made by it with respect to the Agreement
is
final and binding on all persons.
15.
Amendment. This Agreement may be amended by written agreement of
the Employee and the Company, without the consent of any other person.
Notwithstanding the foregoing, the Company may in its sole discretion, amend
the
this Agreement, the Program or the Plan in such manner as it may determine
is necessary or desirable either for the Performance Cash Units to be
exempt from the application of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) or to satisfy the requirements of Section 409A of
the Code, provided that no such amendment may change the Program's "performance
goals," within the meaning of Section 162(m) of the Code, with respect to
any person who is a "covered employee," within the meaning of Section
162(m) of the Code.
IN WITNESS WHEREOF, the
Employee has hereunto set his hand, and the Company has caused these presents
to
be executed in its name and on its behalf, and its corporate seal to be affixed
hereto, all as of the Agreement Date.
__
_________________
«First_Name»«MiName»«Last_Name»
By: __________________
Xxxx
X. Xxxxxxx
Chairman, President and
Chief Executive Officer
ATTEST:
____________________
Assistant Secretary
Exhibit
I
NICOR
INC. 2007 LONG-TERM INCENTIVE
PROGRAM
Performance
Factor
The following Schedule shall be used to determine the Performance Factor.
If the Nicor Total
The Performance
Shareholder
Return
Is:
Factor Shall Be:
At
or above the 90th
percentile
2.00
At
the 75th
percentile
1.50
At
the 60th
percentile
1.00
At
the 50th
percentile
0.75
At
the 40th
percentile
0.50
At
the 25th
percentile
0.25
Less
than the 25th
percentile
0.00
For
purposes of this Exhibit I, the percentile of the Nicor Total Shareholder Return
shall be the three year total shareholder return of the Company for the
Performance Period, as compared to the companies in the Standard and Poor's
utility group for the Performance Period. If the Standard and Poor's
utility group is not available for the entire Performance Period, the Committee
shall apply such other measure as it determines to be appropriate to preserve
the intent of this Agreement. For results between performance levels, the
Performance Factor will be interpolated.
