Exhibit 10.46

PERFORMANCE UNIT AWARD AGREEMENT

This instrument is issued as of the 18th day of January, 2007, by ONEOK, Inc.,
an Oklahoma corporation, (hereinafter referred to as “Corporation”), to
«Officer_Name» (hereinafter referred to as “Grantee”), an employee of the
Corporation or a division or subsidiary thereof, pursuant to the terms of the
ONEOK, Inc. Equity Compensation Plan, effective February 17, 2005, (hereinafter
referred to as the “Plan”).

1. Performance Unit Award. This instrument and that certain Notice of
Performance Unit Award and Agreement, dated January 18, 2007, a copy of which is
attached hereto and incorporated herein by reference (the “Notice of Performance
Unit Award and Agreement”), constitute evidence of the issuance and grant of a
Performance Unit Award (hereinafter referred to as “Award”) of
«No_of_Perf_Units» Performance Units to the Grantee by the Corporation that
shall entitle the Grantee to receive shares of the Corporation’s Common Stock
(hereinafter also referred to as “Common Stock”) or cash, all pursuant and
subject to the terms, provisions, and conditions of this instrument (including,
without limitation, the conditions, restrictions and limitations stated in
paragraph 5, below) and the terms and provisions of the Plan, which are
incorporated herein by reference. This instrument, when executed by the Grantee,
together with the Notice of Performance Unit Award and Agreement constitute an
agreement between the Corporation and the Grantee. Notwithstanding the
foregoing, should there be any inconsistency between the provisions of this
instrument and the terms and provisions of the Award stated in the resolutions
and records of the Board of Directors of the Corporation providing for the Award
or provisions of the Plan, the provisions of such resolutions and records and of
the Plan shall control. The grant of such Performance Units to the Grantee shall
be effective in the manner and to the extent provided in this instrument and the
Plan as to all or any part of the shares of Common Stock subject to the grant
from time to time during the period stated herein.

2. Plan. The Award is made to the Grantee pursuant to the terms and provisions
of the Plan, as approved by the Shareholders of the Corporation, which Plan
provides that a specific aggregate number of shares of Common Stock of the
Corporation may be issued or transferred pursuant to Stock Incentives under the
Plan. The Plan specifies the authority of the Corporation, its Board of
Directors, and a committee of the Board of Directors to select employees to be
granted Stock Incentives under the Plan. The Executive Compensation Committee of
the Board of Directors (hereinafter referred to as the “Committee”) is
authorized to administer the Plan with respect to this instrument and the grant
of the Award made to the Grantee pursuant to the Plan. Except where expressly
stated or clearly indicated otherwise by the terms of this instrument, all
terms, words and phrases used herein shall have the same meaning and effect as
stated in the Plan. The Grantee has been provided a complete copy of the Plan
with this instrument.

3. Grantee’s Agreement Concerning Award and Employment. In consideration of the
Corporation’s granting of the Award of Performance Units and entitlement to
shares of Common Stock, as incentive compensation to Grantee pursuant to this
instrument, the Grantee, by acceptance thereof, and signing this instrument
evidencing its terms, agrees to such terms and to continue to contribute and
perform service in the employ of the Corporation or a division or subsidiary
thereof at the direction, will and pleasure of the Corporation and the Board of

 

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Directors. Provided, however, neither the foregoing agreement of the Grantee in
this paragraph 3, nor any other provision in this instrument shall confer on the
Grantee any right to continue in the employ of the Corporation (or a division or
Subsidiary thereof), or interfere in any way with the right of the Corporation
(or such division or Subsidiary) to terminate the Grantee’s employment at any
time.

4. Registration of Stock; Grantee’s Representation With Respect To Acquiring for
Investment. It is intended by the Corporation that the Plan and the shares of
Common Stock covered by the Award issued and granted to the Grantee referred to
in paragraph 1, above, are to be registered under the Securities Act of 1933, as
amended, prior to the date of the grant; provided, that in the event such
registration is for any reason not made effective for such shares, the Grantee
agrees, for the Grantee, and for the Grantee’s permissible assignees, heirs and
legal representatives by inheritance or bequest, that all shares acquired
pursuant to the grant will be acquired for investment and not with a view to, or
for sale or tender in connection with the distribution of any part thereof,
including any transfer or distribution of such shares by the Grantee pursuant to
the grant and this instrument or as otherwise allowed by the Plan.

5. Terms and Conditions of Award; Transfer of Stock to Grantee. The issue and
grant of the Award of Performance Units to the Grantee stated in paragraph 1,
above, shall be subject to the following terms and conditions:

(a) The right to ownership and transfer of the Performance Units granted to the
Grantee shall be subject to the Award during the period beginning January 18,
2007, the date of the grant thereof (hereinafter referred to as “Grant Date”)
and ending on January 18, 2010, (which period is hereinafter referred to as
“Performance Period”), as herein provided.

(b) The Grantee shall earn and become entitled to receive a percentage of the
number of Performance Units granted under paragraph 1, above, at the expiration
of the Performance Period as provided for in Table A and Table B, attached
hereto, based upon the Corporation’s ranking for Total Stockholder Return in the
ONEOK Peer Group listed in Table C attached hereto, all as determined by the
Committee, in its sole discretion.

(c) Upon expiration of the Performance Period, the Grantee shall be entitled to
receive one (1) share of Common Stock for each Performance Unit that becomes
earned by and vested in the Grantee pursuant to the Award; provided, no
fractional shares shall be issued and any fractional shall be paid to the
Grantee in cash.

(d) The Grantee shall not be entitled to vote any shares of Common Stock of the
Corporation, or otherwise have any right or interest as a Common Stock
shareholder by reason of the Performance Unit Award granted under the Award
during the Performance Period, and prior to the actual transfer of Common Stock
to the Grantee pursuant to the Award.

(e) No dividends or any similar amounts shall be payable or paid with respect to
Performance Units, Common Stock earned under the Award, or the Award during or
for the Performance Period.

 

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(f) The Grantee shall have no right to receive cash or acquire shares of Common
Stock of the Corporation under the Award other than the cash and Common Stock
attributable to the Performance Units earned by the Grantee to the extent
provided for herein.

(g) The Common Stock or cash to which the Grantee becomes entitled shall be paid
and transferred to the Grantee only upon the determination of the Performance
Units earned by the Grantee at the expiration of the Performance Period. The
payment and transfer of such Common Stock or cash to the Grantee shall be made
as soon as reasonably practicable after the expiration of the Performance
Period, as determined and directed by the Committee, in its sole discretion.

(h) The Performance Units or any Common Stock or cash to be paid or transferred
to Grantee pursuant to the Award may not be sold, assigned, transferred,
pledged, encumbered or otherwise disposed of by Grantee or any other person
except as provided in the Award and the Plan until the expiration of the
Performance Period and payment and transfer of Common Stock or cash pursuant to
the Agreement and Plan.

(i) The Grantee shall become entitled to receive Performance Units earned, and
shall become owner of the shares of Common Stock or cash paid and transferred to
the Grantee pursuant to the Award free and clear of all terms, conditions and
restrictions imposed by the Award if the Grantee’s employment by the Corporation
does not terminate during the Performance Period; provided, that the Grantee
shall become entitled to a prorated amount of Performance Units and the terms
and conditions imposed by the Award shall partially cease to apply in certain
events to the extent described in paragraph 6(d), below.

(j) If the Grantee’s employment with the Corporation (or a division or
Subsidiary thereof) terminates prior to the end of the Performance Period other
than by reason of retirement, Total Disability or death, the Grantee shall
forfeit all of the Grantee’s right, title or interest in the Performance Units;
and the Grantee shall forfeit such right, title and interest in the Performance
Units regardless of the reason for such termination of employment. Any such
termination of employment of the Grantee described in the preceding sentence
shall not be deemed to occur by reason of transfer of employment of the Grantee
by or between the Corporation and any division or Subsidiary of the Corporation.
Upon a forfeiture the Performance Units forfeited shall be cancelled for all
purposes.

6. Transferability of Performance Units; Termination of Employment.

(a) Except as provided in subparagraph (b) of this paragraph 6, below, the
Award, the Grantee’s rights and obligations hereunder and the Performance Units
granted hereunder shall not be transferable by the Grantee otherwise than by
will or the laws of descent and distribution which apply to the Grantee’s
estate.

(b) Notwithstanding the foregoing, the Grantee may transfer any part or all of
the Grantee’s rights in and to the Performance Units to members of the Grantee’s
immediate family, or to one or more trusts for the benefit of such immediate
family members, or partnerships in which such immediate family members are the
only partners if the Grantee does

 

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not receive any consideration for the transfer. In the event of any such
transfer, Performance Units shall continue to be subject to the same terms and
conditions otherwise applicable hereunder and under the Plan immediately prior
to its transfer, except that this stock shall not be further transferable by the
transferee inter vivos, except for transfer back to the original Grantee. For
any such transfer to be effective, the Grantee must provide prior written notice
thereof to the Committee, unless otherwise authorized and approved by the
Committee, in its sole discretion; and the Grantee shall furnish to the
Committee such information as it may request with respect to the transferee and
the terms and conditions of any such transfer. For purposes of transfer of this
grant under this subparagraph (b), “immediate family” shall mean the Grantee’s
spouse, children and grandchildren.

(c) Notwithstanding anything to the contrary expressed or implied herein
(including without limitation, the restrictions stated in paragraph 5, above,
applicable to the Performance Units), all rights and interest of the Grantee in
the Performance Units shall become invalid and wholly terminated and forfeited
upon the termination of the Grantee’s employment with the Corporation (or a
division or Subsidiary), during the Performance Period other than a termination
by reason of retirement, Total Disability or death of the Grantee.

(d) Notwithstanding the foregoing provisions, in the event of termination of the
Grantee’s employment with the Corporation (or a division or Subsidiary) during
the Performance Period by reason of (i) the retirement of the Grantee, (ii) the
Total Disability of the Grantee, or (iii) the Grantee’s death while still
employed by the Corporation (or a division or Subsidiary), then an adjusted and
prorated entitlement to Performance Units shall be allowed as provided in this
paragraph 6(d). The Grantee shall become vested in and entitled receive, in the
event of any such retirement or Total Disability, and the legatees, or personal
representatives or heirs of the Grantee shall be vested in and entitled to
receive, in the event of the Grantee’s death, a prorated award of Performance
Units earned in the Performance Period following such retirement, Total
Disability or death. The award shall be a prorated amount of Performance Units
equal to the total of Performance Units earned under the Award at the end of the
Performance Period for the Grantee, multiplied by a fraction of which the
numerator shall be the number of full months which have elapsed under the
Performance Period at the time of such termination of employment by reason of
retirement, Total Disability or death, and the denominator of which shall be the
total number of months in the Performance Period. The Grantee, or personal
representatives or heirs of the Grantee, as the case may be, shall become
entitled to receive such prorated award at the expiration of the Performance
Period and following application of the performance criteria as provided in the
Award and determined by the Committee.

(e) The Grantee may designate a Beneficiary to receive any rights of the Grantee
which may become vested in the event of the death of the Grantee under
procedures and in the form established by the Committee; and in the absence of
such designation of a Beneficiary, any such rights shall be deemed to be
transferred to the estate of the Grantee.

 

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(f) For purposes of the Award and this instrument, “Total Disability” shall mean
that the Grantee is permanently and totally disabled and unable to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve
(12) months, and has established such disability to the extent and in the manner
and form as may be required under the provisions of Section 22(e) of the
Internal Revenue Code of 1986, as amended (or corresponding section of any
future federal tax code), and regulations thereunder.

7. Administration of Performance Unit Award. The grant of the Award shall be
subject to such other rules and requirements as the Committee, in its sole
discretion, may determine to be appropriate with respect to administration
thereof and the terms and conditions made applicable to the Grantee and the
Performance Units during the Performance Period. The Award, this instrument, and
the rights and obligations of the parties thereto shall be subject to
interpretation and construction by the Committee to the same extent and with the
same effect as the Committee actions under pertinent provisions of the Plan. The
Grantee shall take all actions and execute and deliver all documents as may from
time to time be requested by the Committee in connection with such restrictions
and in furtherance hereof. The Grantee agrees to pay to the Corporation any
applicable federal, state, or local income, employment, social security,
medicare, or other withholding tax obligation arising in connection with the
grant of the Award to the Grantee; and the Corporation shall have the right,
without the Grantee’s prior approval or direction, to satisfy such withholding
tax by withholding all or any part of the shares of Common Stock or cash that
would otherwise be paid and transferred to the Grantee, with any shares of
Common Stock so withheld to be valued at the Fair Market Value (as defined in
the Plan) on the date of such withholding. The Grantee, with the consent of the
Corporation, may satisfy such withholding tax by delivery and transfer to the
Corporation of shares of Common Stock previously owned by the Grantee, with any
shares so delivered and transferred to be valued at the Fair Market Value on the
date of such delivery.

8. Adjustment Provisions. It is understood that, prior to the expiration of the
Performance Period certain changes in capitalization of the Corporation may
occur. It is, therefore, understood and agreed with respect to changes in
capitalization that:

(a) If a stock dividend is declared on the Common Stock of the Corporation,
there shall be added to the number of Performance Units provided for under the
Award and stated in paragraph 1 of this instrument, the number of Performance
Units equal to the number of Performance Units which would have been granted to
the Grantee had the Grantee been the fully vested and unrestricted owner of the
number of Performance Units then provided for under the Award granted, but not
theretofore received without restriction; provided, however, that the additional
Performance Units shall be subject to all terms and provisions of this
instrument (including, without limitation, the terms and conditions stated in
paragraph 5, above), and in making such adjustments, no fractional units,
shares, or scrip certificates in lieu thereof, shall be granted or issuable by
the Corporation, and the Grantee shall be entitled to only the number of full
Performance Units to which the Grantee may be entitled by reason of such
adjustment at the adjusted grant.

 

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(b) In the event of an increase in the outstanding shares of Common Stock of the
Corporation, effectuated for the purpose of acquiring properties or securities
of another corporation or business enterprise, there shall be no increase in the
number of Performance Units which are the subject matter of the Award under this
instrument as a result of such acquisition.

(c) In the event of an increase or decrease in the number of outstanding shares
of Common Stock of the Corporation through recapitalization, reclassification,
stock split-ups, consolidation of shares, changes in par value and the like, an
appropriate adjustment shall be made in the number of Performance Units provided
for under the Award and stated in Section 1 of this instrument, by increasing or
decreasing the number of Performance Units, as may be required to enable the
Grantee to acquire the same proportionate stockholdings as the grant of the
Award would originally have provided. Provided, however, that any additional
Performance Units shall be subject to all terms and provisions of this
instrument (including, without limitation, the restrictions stated in paragraph
5, above), and that in making such adjustments, no fractional Performance Units
shall be awarded, and the Grantee shall be entitled to receive only the number
of full Performance Units to which the Grantee may be entitled by reason of such
adjustment.

(d) Notwithstanding any provision to the contrary stated herein, to the extent
Performance Units are still not vested in Grantee at the time of a Change in
Control with respect to the Corporation, then pursuant to the provisions of the
Plan, they shall become fully vested and completely free and clear of any
conditions or restrictions stated herein at that time; provided, that if such
Change in Control occurs less than six (6) months after the date of the grant of
the Award hereunder to the Grantee, then Performance Units shall become fully
vested and completely free and clear of any conditions or restrictions stated
herein at the time of such Change in Control only if the Grantee agrees in
writing, if requested by the Corporation in writing, to remain in the employ of
the Corporation or a division or subsidiary of the Corporation at least through
the date which is six (6) months after the date the grant was made with
substantially the same title, duties, authority, reporting relationships, and
compensation as on the day immediately preceding the Change in Control. The
provisions of this subparagraph (d) shall be applied in addition to, and shall
not reduce, modify, or change any other obligation or right of the Grantee
otherwise provided for in paragraph 3, above, concerning the Grantee’s continued
employment with the Corporation or the termination thereof. If the Performance
Units become subject to this subparagraph (d), they shall become fully vested in
the Grantee and nonforfeitable. The Performance Units are subject to the
provisions of the Plan authorizing the Corporation, or a committee of its Board
of Directors, to provide in advance or at the time of a Change in Control for
cash to be paid in actual settlement of the shares of Common Stock for earned
Performance Units, all subject to such terms and conditions as the Corporation
or the Committee, in its sole discretion, may determine and impose. For purposes
of this subparagraph (d), the term “Change in Control” shall have the same
meaning as provided in the definition of that term stated in the Plan, including
any amendments thereof which may be made from time to time in the future
pursuant to the provisions of the Plan, with any amended definition of such term
to apply to all events thereafter coming within the amended meaning.

 

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9. Stock Reserved. The Corporation shall at all times during the term of the
Award reserve and keep available such number of shares of its Common Stock as
will be sufficient to satisfy the Award issued and granted to Grantee and the
requirements thereof as evidenced by this instrument, and shall pay all original
issue taxes, if any, on the transfer of Common Stock to the Grantee, and all
other fees and expenses necessarily incurred by the Corporation in connection
therewith.

10. Rights of Shareholder. Except as otherwise provided in the Award and this
instrument, the Grantee shall have no rights as a shareholder of the Corporation
in respect of the Performance Units or Common Stock for which the Award is
granted; and the Grantee shall not be considered or treated as a record owner of
shares with respect to the Common Stock until the Performance Units are fully
vested and no longer subject to any of the conditions, performance requirements,
or restrictions imposed under the Award, and Common Stock is actually issued and
transferred to the Grantee.

11. Entire Agreement. This instrument contains the entire terms of the Award,
and may not be changed orally or other than by a written instrument issued and
approved by the Corporation pursuant to the Plan. This instrument supersedes any
agreements or understandings that may previously have existed, and there are no
other agreements or understandings, relating to its subject matter.

12. Successors and Assigns. The Award shall inure to the benefit of and be
binding upon the heirs, legatees, legal representatives, successors, and assigns
of the parties thereto.

The Grantee hereby acknowledges receipt of this instrument, the Notice of
Performance Unit Award and a copy of the Plan, and accepts the Award under the
terms and conditions stated in this instrument, subject to all terms and
provisions of the Plan, by signing this instrument in duplicate originals, as of
the date first above written.

 

           

Date

   

«Officer_Name»

Grantee

 

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Table A

Performance Units Criteria

2007-2010 Performance Period

 

Total Stockholder Return (TSR):vs. ONEOK Peer Group    

 

ONEOK TSR Ranking vs.

ONEOK Peer Group

  

Percentage of

Performance Units Earned

90th percentile and above    200% 75th – 89th percentile    150% 50th – 74th
percentile    100% 30th – 49th percentile    50%

29th percentile and below

 

 

 

 

  

0%

 

 

 

 

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Table B

Illustration of Hypothetical 2007-2010 Performance Period

Performance Unit Award Calculation

 

Illustration assumes 1,000 Performance Units Granted in January 2007

 

Total Stockholder Return (TSR) vs. ONEOK Peer Group   Hypothetical 2007-2010
ONEOK TSR Ranking = 40th percentile  

A 40th percentile TSR ranking earns 50% (from Table A)

of PUs granted (i.e., 1,000 units) – 500 units earned

 

 

Total Performance Units Earned   TR                500 Performance Units   500
performance units earned out of 1,000 units granted = 50.0% “earn-out” [50% (500
shares) paid and distributed in the form of Common Stock as provided in section
5.c.]

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Table C

ONEOK PEER GROUP – 2007

 

 

Company Name

   Sym

AGL Resources Inc.

   ATG

ATMOS Energy

   ATO

CenterPoint Energy

   CNP

Enbridge

   ENB

KeySpan Energy Inc (Brooklyn Union)

   KSE

Kinder Morgan

   KMI

MDU Resources

   MDU

National Fuel Gas Company

   NFG

New Jersey Resources

   NJR

NICOR Inc.

   GAS

NiSource

   NI

ONEOK, Inc.

   OKE

Peoples Energy Corporation

   PGL

Piedmont Natural Gas Company

   PNY

SEMPRA (Pacific Enterprises & ENOVA)

   SRE

Southern Union

   SUG

Southwest Gas Corporation

   SWX

UGI Corporation

   UGI

Vectren

   VVC

Washington Gas Light Company

   WGL

Wisconsin Energy Corp

   WEC