Form of 2004 Performance Shares Award.



 Exhibit 10.5 
  
 PERFORMANCE SHARES AWARD AGREEMENT 
  
 This instrument is issued as of the      day of
                , 2004, by ONEOK, Inc., an Oklahoma corporation, (hereinafter referred to as “Corporation”), to
                                       
  (hereinafter referred to as “Grantee”),
                                         a
key employee of the Corporation or a division or subsidiary thereof, pursuant to the terms of the Corporation’s Long-Term Incentive Plan, as amended (hereinafter referred to as the “Plan”); 
  
 1. Performance Shares Award. This instrument and that certain Notice
of Performance Shares Award and Agreement, dated                     , 2004, a copy of which is attached hereto and incorporated herein by
reference (the “Notice of Performance Shares Award and Agreement”), constitute evidence of the issuance and grant of a Performance Shares Award (hereinafter referred to as “Award”) of
                     Performance Share 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”), 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 Shares Award and Agreement
constitute one 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 Share 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 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 amended, and 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 key 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 Share Units and entitlement to Performance Shares, as incentive compensation to Grantee pursuant to this instrument, the Grantee, by acceptance thereof,
and signing this instrument evidencing its terms, agrees to such 
  

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 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 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 Purchase 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, 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 Share 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 Share Units granted to the Grantee shall be subject to the Award during the period beginning
                    , 2004, the date of the grant thereof (hereinafter referred to as “Grant Date”) and ending on
                    , 2007, (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 Share 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: 
  
 (1) One (1) share of Common Stock for each Performance Share Unit with respect to two-thirds (2/3) of the
Performance Share Units that become 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; and 
  
 (2) Cash equal to the Fair Market Value (as defined in
Section 2(k) of the Plan) of a share of Common Stock on the date of the expiration of the Performance Period for each Performance Share Unit with respect to the remaining one-third (1/3) of 
  

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 the Performance Share Units that become earned by and vested in the Grantee pursuant to the Award.

  
 (d) No dividends or any similar amounts shall be payable or
paid with respect to Performance Share Units, Common Stock earned under the Award, or the Award during or for the Performance Period. 
  
 (e) 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 Share Units earned by the Grantee to the extent provided for herein. 
  
 (f) The cash and Common Stock to which the Grantee becomes entitled shall be paid and transferred to the Grantee only upon the determination of the
Performance Share Units earned by the Grantee at the expiration of the Performance Period. The payment and transfer of such cash and Common Stock 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. 
  
 (g) The Performance Share Units or any cash or Common Stock 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. 
  
 (h) The Grantee shall become entitled to receive Performance Share Units earned, and shall become owner of the cash and shares of Common Stock 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 Share Units and the terms and conditions imposed by the Award shall partially cease to apply in events to the extent described in paragraph 6.(d), below. 
  
 (i) 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 Share Units; and
the Grantee shall forfeit such right, title and interest in the Performance Share 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 wholly owned subsidiary of the Corporation. Upon a forfeiture the Performance Share Units forfeited shall be cancelled for all
purposes. 
  
 (j) 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 Shares Award granted under the Award during the Performance Period, and prior to the transfer of Common
Stock to the Grantee pursuant to the Award. 
  

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 6. Transferability of Performance Share Units; Termination of Employment. 
  
 (a) Except as provided in subparagraph (b) of this paragraph 6, below, the
Award, the Grantee’s rights and obligations thereunder and the Performance Share 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 Share 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 not receive any consideration for the transfer. In the event of any such transfer, Performance Share 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 applicable to the Performance Share Units), all rights and interest of the Grantee in the Performance Share 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 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 Share Units shall be allowed as provided in this paragraph (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 Share Units earned in
the Performance Period following such retirement, Total Disability or death. The award shall be a prorated amount of Performance Share Units equal to the total of Performance Share 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 elapse 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 
  

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 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. 
  
 (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 Shares 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
Share 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 Section 11, and other 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 the cash and Common Stock that would otherwise be paid and
transferred to the Grantee, with any shares so withheld to be valued at the Fair Market Value (as defined in Section 2(k) of 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 of the Corporation 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 provided in paragraph 5.(a), 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 Share Units provided for under the Award and stated in Section 1 of this instrument, the number of Performance Share Units equal to the number of Performance Share Units which would have been granted
to the Grantee had the 
  

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 Grantee been the fully vested and unrestricted owner of the number of Performance Share Units then provided for under the
Award granted, but not theretofore received without restriction; provided, however, that the additional Performance Share Units shall be subject to all terms and provisions of this instrument (including, without limitation, the restrictions 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
Share Units to which the Grantee may be entitled by reason of such adjustment at the adjusted grant. 
  
 (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 Share 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 Share Units
provided for under the Award and stated in Section 1 of this instrument, by increasing or decreasing the number of Performance Share 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 Share 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 Share Units shall be awarded, and the Grantee shall be entitled to receive only the number of full Performance Share 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 Share 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 Section 8 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 Share 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 Share Units become subject to this subparagraph (d), they shall become fully vested in the Grantee and nonforfeitable.
The Performance Share Units are subject to the provisions of 
  

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 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 Performance Shares for earned Performance Share 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. 
  
 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 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 Share 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 Share Units are fully vested and no longer subject to any of the conditions
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 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
	 	Grantee

  

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 Table A 
 Performance Share Units Criteria 
 2004-2007 Performance Period 
  

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

	 ONEOK TSR Ranking vs.
 ONEOK Peer Group

	 	 	  	 Percentage of
 Performance Share
 Units Earned

	 
	 90th percentile and above
	 	 	  	200	%
	 75th
– 89th percentile
	 	 	  	150	%
	 50th
– 74th percentile
	 	 	  	100	%
	 30th
– 49th percentile
	 	 	  	50	%
	 29th
percentile and below
	 	 	  	0	%








 Table B 
 Illustration of Hypothetical 2004-2007 Performance Period 
 Performance Share Units Award Calculation

  
 Illustration assumes 1,000 Performance Share Units Granted in
January 2004 

 Total Stockholder Return (TSR) vs. ONEOK Peer Group 
  
 Hypothetical 2004-2007 ONEOK TSR Ranking = 40th percentile 
  
 A 40th percentile TSR
ranking earns 50% (from Table A) 
 of PSUs granted (i.e., 1,000 units) – 500 share units earned 

 Total Performance Share Units Earned 
  

TSR                500 Share Units 
  
 500 share units earned out of 1,000 units granted = 50.0%
“earn-out” [50% 
 (500 shares) paid and distributed in the form of cash and stock as 
 provided in section 5.c.] 








 Table C 
  

											
	ONEOK PEER GROUP –2004	  	 	  	 	  	 	  	 
						
	 Company Name

	  	Sym

	  	 	  	 	  	 	  	 
	 AGL Resources Inc.
	  	ATG	  	 	  	 	  	 	  	 
	 ATMOS Energy
	  	ATO	  	 	  	 	  	 	  	 
	 Energen
	  	EGN	  	 	  	 	  	 	  	 
	 Equitable Resources, Inc.
	  	EQT	  	 	  	 	  	 	  	 
	 KeySpan Energy Inc (Brooklyn Union)
	  	KSE	  	 	  	 	  	 	  	 
	 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	  	 	  	 	  	 	  	 
	 Questar
	  	STR	  	 	  	 	  	 	  	 
	 SCANA (PSNC)
	  	SCG	  	 	  	 	  	 	  	 
	 SEMPRA (Pacific Enterprises & ENOVA)
	  	SRE	  	 	  	 	  	 	  	 
	 UGI Corporation
	  	UGI	  	 	  	 	  	 	  	 
	 Vecten
	  	VVC	  	 	  	 	  	 	  	 
	 Washington Gas Light Company
	  	WGL	  	 	  	 	  	 	  	 
	 Western Gas Resources
	  	WGR	  	 	  	 	  	 	  	 
	 Wisconsin Energy Corp
	  	WEC	  	 	  	 	  	 	  	 








 ONEOK, INC. LONG-TERM INCENTIVE PLAN 
 NOTICE OF PERFORMANCE SHARES AWARD AND AGREEMENT 
  
 This instrument confirms the grant of a Performance Shares Award under the ONEOK, Inc. Long-Term Incentive Plan (“Plan”) to certain persons
designated as a participant in the Plan (“Participant”) by action of the Board of Directors of ONEOK, Inc., an Oklahoma corporation (“Corporation”), on the      day of
                , 2004, as more particularly stated in the records of the Corporation, pursuant to the terms and provisions of the Plan which shall determine the
rights and obligations of all parties under such grant. 
  
 The
Corporation delivers a true copy of this instrument to you as a Participant granted a Performance Shares Award by such action, with duplicate originals of the Performance Shares Award Agreement (“Agreement”) in the form attached hereto,
stating the specific terms of the Award granted to you as a Participant under the Plan, and which together shall constitute evidence of the grant of that Performance Shares Award and your acceptance and agreement to those terms when one duplicate
original of such Agreement is signed by you and returned to the Corporation. 
  

							
	 	 	 	 	 ONEOK, Inc.

				
	 Date
	 	  

	 	 By
	 	  


	 	 	 	 	 	 	 David L. Kyle

	 	 	 	 	 	 	 Chairman of the Board, President and

	 	 	 	 	 	 	 Chief Executive Officer