Nicor Inc.
Form 8-K
Exhibit 10.4

TROPICAL SHIPPING COMPANY
LONG-TERM PERFORMANCE INCENTIVE PLAN

Purpose

The Tropical Shipping Company Long-Term Performance Incentive Plan (“Plan”) is
designed to:

A.  
Provide an incentive to optimize long-term shareholder value through increasing
the underlying value of Tropical Shipping and Construction Company Limited, a
Cayman Islands company (“Tropical Shipping”).

B.  
Balance the impact of short-term incentives on annual operating decision-making
with incentives for the accomplishment of long-term objectives and strategy
requirements.

C.  
Reward for achieving high performance levels.

D.  
Provide an opportunity to earn income which can be accumulated to supplement
retirement.

E.  
Retain the services of the participant.

Effective Date

The effective date of this Plan is January 1, 2008.  The program shall continue
in effect unless terminated or amended by the Compensation Committee of the
Board of Directors of Nicor Inc. (“Committee”).

Administration

The Plan will be administered by the Committee.  The Committee shall, subject to
the provisions of the Plan, have sole and complete authority and discretion to
interpret the Plan and make all determinations necessary or advisable for the
administration of the Plan.

Eligibility

The Plan is reserved for the President of Tropical Shipping.

 
 

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Target Incentive Award

The target incentive award is an award for which the participant may receive
value at the end of a Performance Period.  The value of the target incentive
award is contingent on the level of achievement of performance objectives which
are established at the time of the initial award.

Terms and Conditions of Awards

The Committee will determine the timing and size of the target incentive award;
the performance objectives used for determining whether the target incentive
award is earned; the performance period during which the performance objectives
apply; and the relationship between the level of achievement of the performance
objectives and the degree to which the target incentive award is
earned.  Prorating shall occur between each incremental step within the index.

Payment

After completion of the performance period, the Committee will compare the
actual performance to the established performance objectives for the performance
period and determine the value of the incentive award earned.

Subject to the provisions of the “Incentive Payment Deferral” section below,
incentive awards will be paid to the participant in a single lump sum.  Payment
will be made no later than the date two and one-half (2 ½) months after the end
of the performance period in which the services were performed (or, in the event
that payment by such date is administratively impracticable, no later than
December 31).  Incentive payments under this Plan are intended to satisfy the
short-term deferral exemption under Treas. Reg. Sec. 1.409A-1(b)(4).  All awards
will be paid in cash, except as provided below.
 
 
Incentive Payment Deferral
Deferral under the Nicor Stock Deferral Plan.  A participant in the Nicor Stock
Deferral Plan may elect to defer up to 50% of his incentive award into that
plan.  All such elections must be made in accordance with the terms of the Nicor
Stock Deferral Plan in order to be effective.  In the event of conflict between
the terms of the Nicor Stock Deferral Plan and this Plan, the terms of the Nicor
Stock Deferral Plan shall control.  Appropriate taxes for the entire incentive
award amount will be withheld from the portion of the incentive award being paid
in cash.
 
Deferral under this Plan.  Notwithstanding anything contained herein to the
contrary, if any portion of any incentive award which would otherwise be payable
to a “covered individual” (within the meaning of Section 162(m) of the Code) is
not deductible by reason of Section 162(m) of the Code, such portion shall
automatically be deferred under this Plan.  All such deferred amounts shall be
credited with compounded interest equal to the prime rate, applied on the last
day of each calendar quarter.  The deferred incentive award amounts and interest
shall be paid to the covered individual in a lump sum on the first regularly
scheduled payroll date of
 

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Tropical Shipping following the six month anniversary of the covered
individual’s separation from service.

 
Retirement, Death or Termination

The participant whose employment with the Company terminates by reason of
retirement, death or disability during a performance period shall be entitled to
the prorated value of the earned incentive for that performance period
determined by the Committee at the conclusion of the defined performance
period.  The proration will be based on the ratio of the calendar months
employed during the period to the total months of the performance period.

If the participant separates from service with the Company during a performance
period for any reason other than retirement, death or disability, no target
incentive award will be made to the participant for that performance period,
unless otherwise determined by the Committee in its sole discretion.  The
Company will have no further obligation to the employee under the terms of this
Plan, other than for any previously deferred amounts and related interest in
accordance with the provisions in the “Deferral under this Plan” section above.

Taxes

Under current tax laws, the participant will be liable to pay income tax at
ordinary income tax rates at the time he receives a payment under the Plan.

Plan Amendments and Administration

The Plan may be amended or terminated at any time by the Committee except that
no such change shall affect any target incentive award earned in part or in
total but not yet distributed.

Notwithstanding the foregoing, in its sole discretion, the Committee may change
the performance objectives for any performance period at any time during the
performance period, under such circumstances as the Committee determines,
including, but not limited to, the following:

1.  
Recapitalizations.

2.  
Changes in laws, regulations and accounting practices which distort the
relationship between actual performance and established performance objectives.

3.  
Changes which result from significant changes in strategy compared to the
business and financial plan on which the Plan is based, such as size or mix of
capital expenditures, or a major acquisition or certain reserve adjustments, and
which are deemed necessary or desirable to carry out the intent of the Plan by
the Committee.

 

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General Provisions

The general provisions of the Plan are as follows:
1.  
The grant of a long-term performance target incentive award shall not affect
Tropical Shipping’s right to terminate the participant’s employment at any time
with or without cause.

2.  
The participant’s right under the grant of a long-term performance target
incentive award shall not be assignable.

3.  
The Participant shall be permitted to designate, in a manner and form prescribed
by the Committee, a beneficiary who will receive the prorated award and any
deferred amounts and related interest in the event of the participant’s death.

4.  
The grant of a long-term performance target incentive award in any year shall
not imply a right to participate in the Long-Term Performance Incentive Plan in
future years.

 
5.  
All determinations of the Committee shall be final and binding on the
participant and Tropical Shipping. 

 
 
 

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