Exhibit 10.4
ADMINISTRATIVE RULES WITH RESPECT TO
AT RISK AWARDS UNDER THE 1997 AWARD AND OPTION PLAN
(AMENDED AND RESTATED AS OF DECEMBER 13, 2001 and SEPTEMBER 8, 2005)

1.   DEFINITIONS

     As used with respect to At Risk Awards, the following terms shall have the
following meanings:
     (a) “At Risk Award” means an award granted by the Committee to a
Participant under the 1997 Plan, and entitling the Participant to a cash payment
based upon the extent to which specified Performance Goals are attained for a
specified Performance Period, pursuant to such terms and conditions as the
Committee may establish in an Award Notice. No Eligible Employee may receive
more than one At Risk Award under the 1997 Plan in any fiscal year. In no event
will the maximum value of any At Risk Award to any Eligible Employee in any
fiscal year exceed the lower of (i) twice that employee’s base salary for that
fiscal year, or (ii) two million dollars. An At Risk Award may be granted
singly, in combination or in the alternative with other Awards granted under the
1997 Plan or other Company benefit plans.
     (b) “Committee” means the Compensation Committee of the Board, or such
other committee designated by the Board as authorized to administer the 1997
Plan with respect to At Risk Awards. The Committee shall consist of not less
than two members, each of whom shall be “outside directors” as defined by
Section 162(m) of the Code and the rules, regulations and interpretations
promulgated thereunder, as amended from time to time.
     (c) “Eligible Employee” means those employees of the Company or its
Subsidiaries who are expected to constitute “covered employees” within the
meaning of Section 162(m) of the Code for the applicable fiscal year(s), and any
other Key Management Employee to whom an At Risk Award has been granted by the
Committee.
     (d) “Performance Period” means the period established by the Committee in
the Award Notice, for measurement of the extent to which a Performance Goal has
been satisfied.
     (e) “Performance Goal” means the performance objectives of earnings per
share, Subsidiary net income and customer service/other goals, established by
the Committee for each Eligible Employee who receives an At Risk Award.
     (f) “1997 Plan” means the National Fuel Gas Company 1997 Award and Option
Plan as approved by the stockholders at the 1997 Annual Meeting of Stockholders,
as amended from time to time.

 

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2.   ADMINISTRATION

     Within the limits of the 1997 Plan, with respect to At Risk Awards the
Committee is given full authority to (a) make reasonable, good faith
interpretations of the Plan and of Section 162(m) of the Code, to the extent not
addressed by regulation, proposed regulation or publicly available
interpretation of the Internal Revenue Service; (b) determine who shall be
Eligible Employees and select Eligible Employees to receive At Risk Awards; (c)
determine all the other terms and conditions of an At Risk Award, including the
time or times of making At Risk Awards to Eligible Employees, the Performance
Period, Performance Goals, and levels of At Risk Awards to be earned in relation
to levels of achievement of the Performance Goals, and such other measures as
may be necessary or desirable to achieve the purposes of the 1997 Plan; (d)
determine whether At Risk Awards are to be granted singly, in combination or in
the alternative with other Awards under the 1997 Plan or awards under other
Company benefit plans; (e) grant waivers of 1997 Plan terms and conditions,
provided that any such waiver shall not be inconsistent with Section 162(m) of
the Code and the rules, regulations and interpretations promulgated thereunder,
as amended from time to time; and (f) accelerate the vesting, exercise or
payment of any At Risk Award or the Performance Period of an At Risk Award as
long as (1) any such action would not cause compensation paid or payable under
such At Risk Award to cease to be deductible by the Company for federal income
tax purposes and (2) any such action would not result in the imposition of an
additional tax under Section 409A of the Code on an Eligible Employee holding an
At Risk Award. The Committee shall also have the authority to grant At Risk
Awards in replacement of Awards previously granted under the 1997 Plan or awards
under any other executive compensation or stock option plan of the Company or a
Subsidiary.
     All determinations of the Committee shall be made by a majority of its
members, and its determinations shall be final, binding and conclusive. The
Committee, in its discretion, may delegate its authority and duties under the
1997 Plan with respect to At Risk Awards to the Company’s Chief Executive
Officer or to other senior officers of the Company, but only to the extent, if
any, permitted by Section 162(m) of the Code and notwithstanding any other
provision of the 1997 Plan or an Award Notice, under such conditions as the
Committee may establish. For the avoidance of doubt, neither the Committee nor
any delegate thereof shall take any action under these Administrative Rules,
including, without limitation under Section 2 hereof, with respect to an At Risk
Award which would result in the imposition of an additional tax under
Section 409A of the Code on any Eligible Employee.

3.   GRANT OF AT RISK AWARDS

     At Risk Awards may be made for each of the fiscal years of the Company
commencing with the 2000 fiscal year; provided, however, that At Risk Awards for
a fiscal year may only be made within the time allowed under Section 162(m) of
the Code and the rules, regulations and interpretations promulgated thereunder,
as amended from time to time, applicable to such fiscal year.

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4.   PAYMENT OF AT RISK AWARDS

     Each At Risk Award granted to an Eligible Employee shall entitle such
Eligible Employee to receive a cash payment based upon the extent to which such
Eligible Employee’s Performance Goals for a particular Performance Period are
attained, as specified by the Committee in the Award Notice and certified in
writing by the Committee that such Eligible Employee’s Performance Goals have
been attained. Payment of earned At Risk Awards shall be made in cash promptly
after such certification, and in any event no later than the day that is 2 1/2
months following the end of the Eligible Employee’s taxable year in which the
applicable Performance Period ends.

5.   TERMINATION OF EMPLOYMENT, RETIREMENT, OR DEATH OF PARTICIPANT

     (a) General Rule. Subject to Section 13 of the 1997 Plan, if an Eligible
Employee’s employment with the Company or a Subsidiary terminates for a reason
other than death, disability, retirement, or any approved reason, all unearned
or unpaid At Risk Awards shall be canceled or forfeited as the case may be,
unless otherwise provided in this Section or in the Eligible Employee’s Award
Notice.
     (b) In the event of the disability, retirement or termination for an
approved reason of an Eligible Employee during a Performance Period, his
participation shall be deemed to continue to the end of the Performance Period,
and he shall be paid a percentage of the amount earned, if any, according to the
terms of the At Risk Award, proportionate to his period of active service during
that Performance Period.
     (c) In the event of the death of an Eligible Employee during a Performance
Period, the Eligible Employee’s designated beneficiary (or if none, then the
Eligible Employee’s estate) shall be paid an amount proportionate to the period
of active service during the Performance Period, based upon the maximum amount
which could have been earned under the At Risk Award.

6.   AMENDMENTS TO AT RISK AWARDS

     The Committee may, at any time, unilaterally amend any unearned or unpaid
At Risk Award, including At Risk Awards earned but not yet paid, to the extent
it deems appropriate; provided, however, that any such amendment which is
adverse to the Eligible Employee shall require the Eligible Employee’s consent;
and provided further, however, that the Committee shall have no authority to
make any amendment which would cause compensation paid or payable under the At
Risk Award to cease to be deductible by the Company for federal income tax
purposes. Notwithstanding the foregoing, the Committee may not amend an At Risk
Award in any manner that would result in the imposition of an additional tax
under section 409A of the Code on the Eligible Employee holding such At Risk
Award.

7.   AMENDMENT TO RULES

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     Subject to the stockholder approval requirements of Section 162(m) of the
Code, the Committee may, from time to time, amend these Administrative Rules
with respect to At Risk Awards in any manner. Notwithstanding the foregoing, the
Board may not amend these Administrative Rules in any manner that would result
in the imposition of an additional tax under section 409A of the Code on any
Eligible Employee.

8.   CHANGE IN CONTROL AND CHANGE IN OWNERSHIP

     If an Eligible Employee holding an At Risk Award is eligible for treatment
under Section 22 of the 1997 Plan, the provisions of this paragraph shall
determine the manner in which such At Risk Award shall be paid to him. For
purposes of making such payment, each “current performance period” (defined to
mean a Performance Period which period has commenced but not yet ended), shall
be treated as terminating upon the Acceleration Date, and for each such “current
performance period” and each “completed performance period” (defined to mean a
Performance Period which has ended but for which the Committee has not, on the
Acceleration Date, made a determination as to whether and to what degree the
Performance Goals for such period have been attained), it shall be assumed that
the Performance Goals have been attained at a level of 100% or the equivalent
thereof. If the Eligible Employee is participating in one or more “current
performance periods,” he shall be considered to have earned and, therefore, to
be entitled to receive, a prorated portion of the At Risk Awards previously
granted to him for each such Performance Period. Such prorated portion shall be
determined by multiplying 100% of the At Risk Award granted to the Eligible
Employee by a fraction, the numerator of which is the total number of whole and
partial years (with each partial year being treated as a whole year) that have
elapsed since the beginning of the Performance Period, and the denominator of
which is the total number of years in such Performance Period. An Eligible
Employee in one or more “completed performance periods” shall be considered to
have earned and, therefore, be entitled to receive 100% of the At Risk Awards
previously granted to him during each Performance Period. Notwithstanding
Section 22(e) of the 1997 Plan to the contrary, any payment in respect of an At
Risk Award payable to an Eligible Employee as a result of the application of
this Section 8 of these Administrative Rules shall be paid as soon as
practicable but in no event later than the day that is 2 1/2 months following
the end of the Eligible Employee’s taxable year in which the Acceleration Date
occurs.

9.   SAVINGS PROVISION

     These Administrative Rules with respect to At Risk Awards are intended to
comply with all the applicable conditions of Section 162(m) of the Code, so that
compensation paid or payable hereunder shall constitute qualified
“performance-based compensation” thereunder. To the extent any provision of
these Administrative Rules with respect to At Risk Awards or any action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law.

10.   EFFECTIVE DATE

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     Upon approval by the stockholders of the Company as required by Section
162(m) of the Code, these Administrative Rules with respect to At Risk Awards
shall become effective as of December 8, 1999.

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