Exhibit 10.1
Description of long-term performance incentives under the National Fuel Gas
Company Performance Incentive Program
On December 21, 2009, the Compensation Committee of the Board of Directors of
National Fuel Gas Company (the “Company”) established long-term performance
incentives under the National Fuel Gas Company Performance Incentive Program
(the “Program”) for a performance period of October 1, 2009 to September 30,
2012. The Compensation Committee established levels of performance at which 50%,
100%, 150% and 200% of the target incentive will be payable, as described below.
For performance levels between established levels, a portion of the target
incentive will be payable as determined by mathematical interpolation.
The performance condition for the October 1, 2009 to September 30, 2012
performance period is the Company’s total return on capital as compared to the
same metric for peer companies in the Natural Gas Distribution and Integrated
Natural Gas Companies group as calculated and reported in the Monthly Utility
Reports of AUS, Inc., a leading industry consultant (“AUS”). In determining the
Company’s total return on capital for purposes of this comparison, the
Compensation Committee may adjust the AUS calculation of the Company’s total
return on capital so as to include any gains realized by the Company on the sale
of operations that were reported under Generally Accepted Accounting Principles
as discontinued operations.
Payment will be made in accordance with the Program if the Company achieves
certain levels of performance relative to the peer group. For example, if the
Company achieves a rank, as a percentile of the peer group, of 60%, then 100% of
the target incentive will be paid. Other performance levels may result in
payments ranging from 0% to 200% of the target incentive.
For the October 1, 2009 to September 30, 2012 performance period, the
Compensation Committee established the following target incentives for the
following named executive officers of the Company: David F. Smith, $700,000;
Ronald J. Tanski, $400,000; Matthew D. Cabell, $300,000; Anna Marie Cellino,
$225,000; and John R. Pustulka, $120,000.