Exhibit 10.1
Description of long-term performance incentives under National Fuel Gas Company
Performance Incentive Program
On February 20, 2008, the Compensation Committee approved payments under the
National Fuel Gas Company Performance Incentive Program (the “Program”) for the
performance period of October 1, 2004 to September 30, 2007. The performance
condition for that time period was the Company’s total return on capital as
compared to the total return on capital 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”), with the Company’s total return on capital adjusted to
reflect the results of discontinued operations. Based on the AUS reports for the
performance period October 1, 2004 to September 30, 2007, the Compensation
Committee approved a payout of 166.6% of the target incentive awarded to the
participants in the Program for that time period. (The calculation of future
payouts under the Program will also take into account the results of the
Company’s discontinued operations, if any.) The approved payouts are as follows
for the Company’s named executive officers: P. C. Ackerman, $874,650; D. F.
Smith, $324,870; R. J. Tanski, $99,960; and J. D. Ramsdell, $166,600. (The
Company’s other named executive officer, M. D. Cabell, was not a participant in
the Program for the performance period October 1, 2004 to September 30, 2007.)
These payouts will result in new total compensation figures for 2007 as follows:
P. C. Ackerman, $4,837,862; D. F. Smith, $2,391,242; R. J. Tanski, $1,998,679;
and J. D. Ramsdell, $972,411.
Also on February 20, 2008, the Compensation Committee approved long-term
performance incentives under the Program for a performance period of October 1,
2007 to September 30, 2010. The 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, 2007 to September 30, 2010
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. Payment will be made in accordance with the Program if the
Company achieves certain levels of performance relative to the peer group. If
the Company achieves a rank, as a percentile of the peer group, of less than
45.01%, then no payment will be made. If the Company achieves a rank of 45.01%,
then 50% of the target incentive will be paid. If the Company achieves a rank of
60%, 75% or 100%, then 100%, 150% or 200%, respectively, of the target incentive
will be paid.
For the October 1, 2007 to September 30, 2010 performance period, the Committee
approved the following target incentives for the named executive officers of the
Company: P. C. Ackerman, $1,548,000; D. F. Smith, $585,000; R. J. Tanski,
$350,000; M. D. Cabell, $225,000; and J. D. Ramsdell, $100,000.