Exhibit 10.3
NATIONAL FUEL GAS COMPANY
EXECUTIVE ANNUAL CASH INCENTIVE PROGRAM
     NATIONAL FUEL GAS COMPANY (the “Company”) hereby establishes this NATIONAL
FUEL GAS COMPANY EXECUTIVE ANNUAL CASH INCENTIVE PROGRAM (the “Program”) as of
the 1st day of October, 2008, and as further revised this 10th day of December,
2009, in accordance with the terms provided herein.
     Section 1. Incentive Program Purpose. The purposes of the Program are to
enable the Company and its majority-owned subsidiaries (the “Subsidiaries”) to
attract, retain, motivate and reward officers and key employees by providing
them with short-term incentive opportunities directly linked to the Company’s
and the individual’s performance.
     Section 2. Eligibility. Except for those executive officers who are
participating for the same period in the National Fuel Gas Company Annual At
Risk Compensation Incentive Plan, each officer of the Company and its
Subsidiaries who has been designated by the Board as an “executive officer” for
purposes of the Securities Exchange Act of 1934, as amended, shall participate
in this Program (each, an “Executive Participant”). In addition, the Chief
Executive Officer of the Company (the “CEO”), at his sole discretion, may select
other officers or key employees of the Company and its Subsidiaries to
participate in the Program (each, a “Designated Participant”).
     Section 3. Performance Periods and Target Incentives. With respect to each
Executive Participant and each Designated Participant (each, a “Participant”),
the CEO shall establish a target incentive opportunity (the “Target Incentive”)
applicable to such Participant with respect to any Performance Period, which
shall be a percentage of base salary; provided that, the Target Incentive with
respect to each Executive Participant shall be subject to the approval of the
Compensation Committee of the Company of the Board of Directors (the
“Committee”). A “Performance Period” shall be the then-current fiscal year of
the Company. In the event that an employee becomes an officer or an executive
officer after the commencement of any Performance Period (including by reason of
having first been hired after the commencement of the Performance Period), the
CEO shall determine the basis, if any, on which such person shall be permitted
to participate in the Program for such Performance Period (including, but not
limited to, whether the Participant’s Target Incentive will be pro-rated to
reflect his or her eligibility for only a portion of the Performance Period). In
the event that the work responsibilities of a Participant changes during the
Performance Period, the CEO may change one or more of the Performance Conditions
and/or the Target Incentive associated with said Performance Period; provided
however, that any such change with respect to an Executive Participant is
subject to the approval of the Committee.
     Section 4. Performance Conditions and Performance Levels.
     (a) Establishment of Performance Conditions. No later than ninety days
following the beginning of the Performance Period, the CEO shall establish the
performance objectives (the “Performance Conditions”) which must be achieved for
a Participant to receive payment in respect of his or her Target Incentive (or a
specified multiple thereof) for that Performance Period;

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provided that the Performance Conditions and the levels of achievement for an
Executive Participant shall be approved by the Committee. The Performance
Conditions may be based on the performance of the Company or one or more of its
Subsidiaries, either on an absolute or comparative basis, and/or upon individual
performance criteria established for the Participant or a class of Participants.
The Performance Conditions need not be the same for each Participant, or for the
same Participant with respect to different Performance Periods. Where more than
one Performance Condition is established, the Performance Conditions shall
allocate the Target Incentive among the Performance Conditions, provided that,
for this purpose, multiple Performance Conditions may be combined and treated as
a single Performance Condition. At least seventy-five percent (75%) of a
Participant’s Target Incentive will be dependent on objective Performance
Conditions. Twenty-five percent (25%) of a Participant’s Target Incentive may be
designated as discretionary.
     (b) Threshold, Target and Maximum Performance Levels. With respect to each
Performance Period, the CEO shall establish, at a minimum, a threshold level of
performance (or the portion thereof allocable to a particular Performance
Condition or Conditions (the “Allocable Portion”)) at which 100% of the Target
Incentive shall be payable and a maximum level of performance at which 200% of
the Target Incentive will be payable, subject in each case to the CEO’s
discretion to reduce the amount payable to any Participant based on such factors
as the CEO shall determine. For performance levels between two established
performance levels, the percent of Target Incentive (or any Allocable Portion)
payable will be determined by mathematical interpolation, where appropriate.
     Section 5. Performance Achievement. Payment of any compensation under the
Program is expressly contingent upon achievement, in whole or in part, of the
Performance Conditions for such Performance Period. The amount payable to a
Participant with respect to his or her Target Incentive (or the Allocable
Portion) with respect to any Performance Conditions will be determined based on
the assessment of achievement against such Performance Conditions with respect
to such Performance Period. To the extent that any Performance Condition is
based on the individual performance of a Participant that is not otherwise
objectively determinable by application of a formula or other mathematical or
statistical measure, the level of achievement of such Performance Condition
shall be determined based on the CEO’s subjective determination of the
individual’s performance.
     Section 6. Payment of Cash. Except as provided in Section 8, any amount
payable to a Participant in respect of any Performance Period shall be paid to
the Participant (or, where applicable, the Participant’s beneficiary or legal
representative) in a single lump sum cash amount not later than 21/2 months
after the end of the calendar year in which the relevant Performance Period
ends.
     Section 7. Employment Conditions to Payment.
     (a) Full Award Requires Service for Entire Performance Period. To be
entitled to payment in full of any amount payable in respect of any Target
Incentive, a Participant must be in the continuous employ of the Company or a
Subsidiary from the date he or she is selected as a Participant through the last
day of the applicable Performance Period. Except as provided in

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Section 7(b), if a Participant’s employment terminates for any reason during a
Performance Period (including, but not limited to, the Participant’s voluntary
resignation), such Participant shall be entitled to receive payment of the
amount, if any, determined pursuant to Section 7(c).
     (b) Termination for Cause or Termination Before Six Months of the
Performance Period Have Passed. If a Participant’s employment is terminated
(i) for “Cause” at any time prior to payment of any amount in respect of any
Target Incentive under Section 6, or (ii) for any other reason and fewer than
six months of the Performance Period have passed, then such Participant shall
forfeit any right to receive any payment in respect of his or her Target
Incentive for that Performance Period (regardless of whether the Performance
Period shall have been completed and an amount would otherwise have been payable
to the Participant in respect of his or her Target Incentive). For purposes of
this Plan, the term “Cause” means (i) the Participant’s failure to follow or
comply with a reasonable and lawful written directive of the Board of Directors
or the CEO, (ii) the Participant’s failure to perform the substantial
responsibilities of his or her position, (iii) any act of dishonesty, gross
negligence, or misconduct by the Participant, including any violation of a
material Company policy or breach of fiduciary duty owed by the Participant to
the Company (even if no harm results from such act), (iv) the Participant’s
conviction of or entering a plea of guilty or nolo contendere to a crime
constituting a felony or the Participant’s willful violation of any law, rule or
regulation, or (v) the Participant engages in, or is interested in, (as owner,
partner, shareholder, employee, director, agent, consultant or otherwise), any
business which is a “competitor” of the Company. “Competitor” of the Company is
any corporation, sole proprietorship, partnership, joint venture, syndicate,
trust or any other form of organization or parent, subsidiary or division of any
of the foregoing, which is engaged in the transportation, purchase, brokering,
marketing or trading of natural gas or other energy products or services which
are competitive to the Company’s products or services, any of which is engaged
in within 50 miles of the geographic area in which the Company is engaged in
such competitive business, provided that a present or future investment in the
securities of companies listed on a national securities exchange or traded on
the over-the-counter market to the extent such investments do not exceed 2% of
the total outstanding shares of such company will not constitute engagement or
interest in a “competitor.”
     (c) Termination for Any Other Reason and the Passing of Six or More Months
of the Performance Period. Subject to the last sentence of this Section 7(c), if
a Participant’s employment terminates during a Performance Period for any reason
other than Cause and six or more months of the Performance Period have passed,
the amount payable to the Participant in respect of the Participant’s Target
Incentive for any Performance Period shall be equal to the product of (x) the
amount that would have been payable in respect of the Participant’s Target
Incentive had such Participant been employed for the entire Performance Period
(as determined in accordance with Section 5 based on the CEO’s assessment of the
achievement of the Performance Conditions for the Performance Period) multiplied
by (y) the Participant’s Pro-Rata Fraction. With respect to any Participant, the
“Pro-Rata Fraction” is a fraction, the numerator of which is the number of days
in the Performance Period completed prior to and including the date of
Participant’s termination of employment, and the denominator of which is the
total number of days in the Performance Period. To the extent a Participant
becomes entitled to receive any payment as provided in this Section 7(c), such
payment shall be made not later than 2 1/2 months after the end of the calendar
year in which the relevant Performance Period ends. Any payment to a Participant

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pursuant to this Section 7(c) shall be subject to the CEO’s discretion described
in Section 4(b), as well as such terms and conditions (including, but not
limited to, the execution of a release and/or certain restrictive covenants in
favor of the Company) as the CEO shall determine not later than the date of such
Participant’s termination of employment.
     Section 8. Change of Control. In the event of a Change of Control, all then
in progress Performance Periods shall be deemed to have ended as of the end of
the last fiscal quarter of the Company ended prior to the occurrence of such
Change of Control and the rights of each Participant to receive payment in
respect of any outstanding Target Incentive shall be determined in the following
manner: (i) the Performance Period shall be deemed to have ended as of the end
of the fiscal quarter ended coincident with or immediately prior to the
occurrence of such Change of Control; (ii) the CEO, as determined immediately
prior to such Change of Control, shall certify the amount payable with respect
to each Target Incentive based on achievement of the Performance Conditions
through the end of the truncated Performance Period, but annualizing the
performance for the then current fiscal year and subject to such other
adjustments, if any, specified by the Committee at the time such Performance
Conditions are first established; and (iii) the amount payable to each
Participant shall be equal to the product of (A) the amount determined pursuant
to subclause (ii) and (B) a fraction, the numerator of which is the number of
days in the Performance Period completed prior to, and including, the Change of
Control and the denominator of which is the total number of days in the
Performance Period.
     For purposes of this Plan, a “Change in Control” shall mean:
     (i) either (a) receipt by the Company of a report on Schedule 13D, or an
amendment to such a report, filed with the Securities and Exchange Commission
(the “SEC”) pursuant to Section 13(d) of the 1934 Act disclosing that any person
(as such term is used in Section 13(d) of the 1934 Act) (“Person”), is the
beneficial owner, directly or indirectly, of twenty (20) percent or more of the
outstanding stock of the Company or (b) actual knowledge by the Company of
facts, on the basis of which any Person is required to file such a report on
Schedule 13D, or to make an amendment to such a report, with the SEC (or would
be required to file such a report or amendment upon the lapse of the applicable
period of time specified in Section 13(d) of the 1934 Act) disclosing that such
Person is the beneficial owner, directly or indirectly, of twenty (20) percent
or more of the outstanding stock of the Company;
     (ii) purchase by any Person, other than the Company, a Subsidiary or any
employee benefit plan of the Company or any Subsidiary, of shares pursuant to a
tender or exchange offer to acquire any stock of the Company (or securities
convertible into stock) for cash, securities or any other consideration,
provided that, after consummation of the offer, such Person is the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
twenty (20) percent or more of the outstanding stock of the Company (calculated
as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of
rights to acquire stock);
     (iii) consummation of (a) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant to
which shares of stock of the Company would be converted into cash, securities or
other property, other than

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a consolidation or merger of the Company in which holders of its stock
immediately prior to the consolidation or merger have substantially the same
proportionate ownership of common stock of the surviving corporation immediately
after the consolidation or merger as immediately before, or (b) any
consolidation or merger in which the Company is the continuing or surviving
corporation but in which the common shareholders of the Company immediately
prior to the consolidation or merger do not hold at least a majority of the
outstanding common stock of the continuing or surviving corporation (except
where such holders of common stock hold at least a majority of the common stock
of the corporation which owns all of the common stock of the Company), or (c)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the Company; or
     (iv) a change in the majority of the members of the Board of Directors
within a 24-month period unless the election or nomination for election by the
Company’s shareholders of each new director was approved by the vote of at least
two-thirds of the directors then still in office who were in office at the
beginning of the 24-month period.
     Section 9. Administration. The CEO (or such other officer or officers to
whom the CEO shall delegate such responsibility (each, a “Delegate”)) shall
administer and interpret the Plan. The CEO shall establish the Performance
Conditions for any Performance Period in accordance with Section 4 and determine
whether such Performance Conditions have been obtained with respect to such
Performance Period in accordance with Section 5. Any determination made by the
CEO under the Plan shall be final and conclusive. The CEO (or any Delegate) may
employ such legal counsel, consultants and agents (including counsel or agents
who are employees of the Company or a Subsidiary) as it may deem desirable for
the administration of the Plan and may rely upon any opinion received from any
such counsel or consultant or agent and any computation received from such
consultant or agent. All expenses incurred in the administration of the Plan,
including, without limitation, for the engagement of any counsel, consultant or
agent, shall be paid by the Company. Neither the CEO nor any Delegate shall be
liable for any action or determination made in good faith under the Program or
with respect to any Target Incentive awarded or payable thereunder.
     Section 10. Nonassignment. A Participant shall not be permitted to assign,
alienate or otherwise transfer any interest in his or her Target Incentive and
any attempt to do so shall be void. A Participant’s interests under this Plan
shall not be subject to garnishment or execution or levy of any kind, and any
attempt to cause any benefits to be so subjected shall not be recognized. This
Plan shall be an unfunded plan and a Participant shall have only the rights of a
general creditor of the Company with respect to such Participant’s interest
under this Plan.
     Section 11. Impact on Benefit Plans. Payments under the Program shall be
considered as earnings for purposes of any of the Company’s employee benefit
plans, programs or arrangements, including, but not limited to, its qualified
retirement plans or non-qualified retirement plans or for any other retirement
or benefit plan, unless otherwise excluded under the terms of any such plan.
Nothing herein shall prevent the Company from maintaining additional
compensation plans and arrangements, provided however that no payments shall be
made under such plans and arrangements if the effect thereof would be the
payment of compensation otherwise

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payable under this Program regardless of whether the applicable Performance
Condition was attained.
     Section 12. Successors. The obligation of the Company under the Program
shall be binding upon the successors and assigns of the Company.
     Section 13. Applicable Law. This Program shall be governed by and construed
under the laws of the State of New York without regard to its conflict of law
provisions.
     Section 14. Severability. In the event that any one or more of the
provisions of this Program shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
     Section 15. Tax Withholding. The Company shall have the power to withhold
from any amount payable hereunder an amount sufficient to satisfy federal, state
and local or non-U.S. withholding tax requirements on any amount payable under
this Program.
     Section 16. No Voluntary Election to Defer. Unless and to the extent
expressly permitted by the Company on such terms and conditions as it shall deem
necessary or appropriate, no amount payable under the Program may be electively
deferred by a Participant past the date as of which such amount would otherwise
be paid hereunder. Notwithstanding the foregoing, the Company may defer payment
of any amount payable in respect of any Target Incentive if and to the extent
such payment would, if made at the time otherwise required under the Program,
not be deductible by the Company or any Subsidiary by reason of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding
anything in this Program to the contrary, any deferral of payment permitted or
required in accordance with this Section 16 shall at all times comply with the
applicable provisions of Section 409A of the Code and all determinations with
respect thereto shall be made in a manner intended to avoid the imposition on
any Participant of the additional taxes set forth in such Section 409A.
     Section 17. No Guarantee of Employment. Nothing in this Plan shall
interfere with or limit in any way the right of the Company or a Subsidiary to
terminate any Participant’s employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company or a Subsidiary.
     Section 18. Headings. The descriptive headings of the Sections of this
Program are inserted for convenience of reference only and shall not constitute
a part of this Program. Except when otherwise indicated by the context, the
singular shall be read and interpreted as the plural (when appropriate), and the
plural shall include the singular.
     Section 19. Amendment or Termination of this Program. This Program may be
amended, suspended or terminated by the Company at any time upon approval by the
Compensation Committee of the Board of Directors (or such other committee of
that the Board shall authorize to take such action). Notwithstanding the
foregoing, no amendment, suspension or termination shall adversely affect a
Participant’s rights with respect to any Target Incentive previously
established, except as provided herein.

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