Document:

Exhibit 10.2

    Nicor
      Inc.

    Form
      8-K

    Exhibit
      10.2

    RESTRICTED
      STOCK AGREEMENT

    NICOR
      INC. 1997 LONG-TERM INCENTIVE PLAN

    

    THIS
      AGREEMENT, entered into as of the 16th
      day of
      March, 2006 (the “Agreement Date”), by and between «First_Name» «Middle_Initial» «Last_Name»
      (the
“Employee”), and Nicor Inc., an Illinois corporation (the
“Company”),

    

    

    WITNESSETH
      THAT:

    

    WHEREAS,
      the Company maintains the Nicor Inc. 1997 Long-Term Incentive Plan (the “Plan”),
      which is incorporated into and forms a part of this Agreement, for the benefit
      of key executive and management employees of the Company and any related
      company; and

    

    WHEREAS,
      the Employee has been selected by the Compensation Committee of the Board of
      Directors of the Company (the “Committee”) to receive a Restricted Stock award
      under the Plan;

    

    NOW,
      THEREFORE, IT IS AGREED, by and between the Company and the Employee, as
      follows:

    

    1. Award.
      Subject to the terms of this agreement and the Plan, the Employee is hereby
      awarded «RS»
      shares
      of Stock (“Restricted Stock”).

    

    2. Limit
      on Alienation. Shares of Restricted Stock may not be sold, assigned,
      transferred (except as defined in Paragraph 8), pledged or otherwise encumbered
      during the Restricted Period (as defined in Paragraph 6).

    

    3. Dividends.
      The Employee shall not be prevented from receiving dividends paid on shares
      of
      Restricted Stock merely because those shares are subject to the restrictions
      imposed by this Agreement and the Plan; provided, however, that no dividends
      shall be payable to or for the benefit of the Employee with respect to record
      dates for such dividends occurring on or after the date, if any, on which the
      Employee has forfeited the Restricted Stock.

    

    4. Deposit
      of Shares of Restricted Stock. Each certificate issued in respect of shares
      of Restricted Stock awarded under this Agreement shall be registered in the
      name
      of the Employee and shall in the discretion of the Committee be deposited in
      a
      bank or with such other depository or escrow as the Committee may
      determine.

    

    5. Transfer
      and Forfeiture of Shares. Except as otherwise determined by the Committee in
      its sole discretion, the Employee shall forfeit the portion of Restricted Stock
      awarded under this Agreement as of the date, if any, on which the Employee’s
      employment with the Company and all Related Companies terminates for any reason
      prior to the end of the Restricted Period. If the Employee is continuously
      employed during the period beginning on the Agreement Date, and ending on the
      last day of the Restricted Period, then, at the end of the Restricted Period,
      the shares of Restricted Stock shall be transferred to the Employee free of
      all
      restrictions.

    

    6. Restricted
      Period. For purposes of this Agreement, the “Restricted Period” is the
      period beginning on the Agreement Date and ending on the fourth anniversary
      of
      the Agreement Date; provided, however, that the Committee may, in its
      discretion, adjust the Restricted Period to account for individual circumstances
      of the Employee or a group of employees, except that in no case shall such
      adjustment by the Committee result in the Restricted Period being less than
      one
      year. Notwithstanding the foregoing provisions of this Paragraph 6, the
      Restricted Period shall end not later than the earliest to occur of: (a) the
      date on which a Change in Control occurs; (b) the date of the Employee’s death;
      or (c) the date on which the Employee becomes disabled.

    

    7. Heirs
      and Successors. This Agreement shall be binding upon, and inure to the
      benefit of, the Company and its successors and assigns, and upon any person
      acquiring, whether by merger, consolidation, purchase of assets or otherwise,
      all or substantially all of the Company’s assets and business. Subject to the
      terms of the Plan, any benefits payable to the Employee under this Agreement
      that are not paid at the time of the Employee’s death shall be paid at the time
      and in the form determined in accordance with the foregoing provisions of this
      Agreement, to the beneficiary designated by the Employee in writing filed with
      the Committee in such form and at such time as the Committee shall require.
      If a
      deceased Employee fails to designate a beneficiary, or if the designated
      beneficiary of the deceased Employee dies before the Employee or before complete
      payment of the amounts distributable under this Agreement, the Committee shall,
      in its discretion, direct that amounts to be paid under this Agreement be paid
      to:

    

    (a) one
      or
      more of the Employee’s relatives by blood, adoption or marriage and in such
      proportion as the Committee decides; or

    

    (b) the
      legal
      representative or representatives of the estate of the last to die of the
      Employee and his beneficiary.

    

    8. Transferability.
      Restricted Stock awarded under this Agreement is not transferable except as
      designated by the Employee by will or by the laws of descent and distribution.
      Notwithstanding the foregoing, the Committee may permit Restricted Stock awarded
      under this Agreement to be transferred by a participant for no consideration
      to
      or for the benefit of the participant’s immediate family (including a trust for
      the benefit of a participant’s immediate family or to a partnership for members
      of a participant’s immediate family), subject to such limits as the Committee
      may establish, and the transferee shall remain subject to all terms and
      conditions applicable to such award prior to such transfer. Immediate family
      is
      defined as the participant’s spouse, children, stepchildren and adoptive
      relationships.

    

    9.
       Employment.
      This Agreement does not constitute a contract of employment, and does not confer
      on the Employee the right to be retained in the employ of the Company or any
      Related Company. 

    

    10. Adjustment
      to Number of Shares Subject to Agreement. In the event of any change in the
      outstanding shares of Company Stock by reason of any stock dividend, split,
      spin-off, recapitalization, merger, consolidation, combination, exchange of
      shares or other similar change, the terms of this Agreement and the number
      of
      Restricted Stock Shares subject to this Agreement may be equitably adjusted
      by
      the Committee in its sole discretion to preserve the intent of this
      Agreement.

    

    11. Definitions.
      Except where the context clearly implies or indicates the contrary, a word,
      term, or phrase used in the Plan is similarly used in this
      Agreement.

    

    12. Administration.
      The authority to manage and control the operation and administration of this
      Agreement shall be vested in the Committee, and the Committee shall have all
      powers with respect to this Agreement as it has with respect to the Plan. Any
      interpretation of the Agreement by the Committee and any decision made by it
      with respect to the Agreement is final and binding on all persons.

    

    13. Plan
      Governs. Notwithstanding anything in this Agreement to the contrary, the
      terms of this Agreement shall be subject to the terms of the Plan, a copy of
      which may be obtained by the Employee from the office of the Secretary of the
      Company.

    

    14. Amendment.
      This Agreement may be amended by written Agreement of the Employee and the
      Company, without the consent of any other person.

    

    IN
      WITNESS WHEREOF, the Employee has hereunto set his hand, and the Company has
      caused these presents to be executed in its name and on its behalf, and its
      corporate seal to be affixed hereto, all as of the Agreement Date.

    

    

    ____________________________________    

    «First_Name» «Middle_Initial» «Last_Name»

    

    Nicor
      Inc.

    

    By:_______________________________     

    Russ
      Strobel 

    Chairman,
      President and

    Chief
      Executive Officer

    ATTEST:

    

    _____________________ 

    Assistant
      SecretaryExhibit 10.3

    Nicor
      Inc.

    Form
      8-K

    Exhibit
      10.3

    PERFORMANCE
      CASH UNIT AGREEMENT

    NICOR
      INC. 2006 LONG-TERM INCENTIVE PROGRAM

    

    THIS
      AGREEMENT, entered into as of March 16th
      2006
      (the "Agreement Date"), by and between «First_Name» «MiName» «Last_Name»
      (the
      "Employee"), and Nicor Inc., an Illinois corporation (the
      "Company");

    WITNESSETH
      THAT:

     

    WHEREAS,
      the Company maintains the Nicor Inc. 2006 Long-Term Incentive Program (the
      "Program"), which is part of the Nicor Inc. 1997 Long-Term Incentive Plan (the
      “Plan”) and which are incorporated into and form a part of this Agreement, for
      the benefit of key executive and management employees of the Company and any
      related company; and

    

    WHEREAS,
      the Employee has been selected by the Compensation Committee of the Board of
      Directors of the Company (the "Committee") to receive a Performance Cash Unit
      award;

    

    NOW,
      THEREFORE, IT IS AGREED, by and between the Company and the Employee, as
      follows:

    

    1.
      Award.
      The
      Employee is hereby awarded «PU»
      Performance Cash Units, effective as of the Agreement Date.

    

    2.
      Amount
      of Payment.
      Subject
      to the provisions of this Agreement, the Program and the Plan, the Company
      shall
      distribute to the Employee, for each Performance Cash Unit awarded under this
      Agreement, an amount equal to one dollar times the sum of, (1) the number of
      Performance Cash Units MULTIPLIED BY (2) the Total Shareholder Return
      Performance Factor (as defined below) for the Performance Period (as defined
      below).

    

    3.
      Time
      of Payment.
      Amounts
      due under paragraph 2 with respect to Performance Cash Units shall be paid
      as a
      lump sum cash payment as soon as practicable after the end of the Performance
      Period; provided, however, if payment is not made by 2 1⁄2 months following the
      end of the Performance Period, payment will be made no later than December
      31 of
      the calendar year following the end of the Performance Period.

    

    4.
      Total
      Shareholder Return.
      For
      purposes of this Agreement, the Total Shareholder Return (TSR) is defined as
      the
      three-year total shareholder return of the Company calculated with dividends
      reinvested, for all shares of common stock of the Company (“Company Stock”)
      reported for the New York Stock Exchange - Composite Transactions ending on
      the
      last day of the Performance Period (or, if Company Stock is not traded on that
      date, on the next preceding date on which Company Stock is traded). For purposes
      of calculating the TSR: (i) the starting stock price will be an average of
      the
      closing prices for the 20 trading days ending on December 31, 2005 and (ii)
      the
      ending stock price will be an average of the closing prices for the 20 trading
      days ending on December 31, 2008.

    

    5. Performance
      Period.
      For
      purposes of this Agreement, the Performance Period shall be the period beginning
      January 1, 2006, and ending December 31, 2008.

    

    6.
      Performance
      Factors.
      For
      purposes of this Agreement, the term "Total Shareholder
      Return Performance Factor" for the Performance Period shall be determined in
      accordance with Exhibit 1 to this Agreement.

     

    7.
      Vesting.
      The
      Employee shall be vested in and entitled to payment of benefits under this
      Agreement only if the requirements of either paragraph (a) or paragraph (b)
      next
      below are satisfied: 

    

    
      	 	
              (a)

            	
              The
                Employee is continuously employed by the Company and the Related
                Companies
                during the period beginning on the Agreement Date and ending on December
                31, 2008.

            

    

    

    
      	 	 	
              (b)

            	
              The
                Employee is continuously employed by the Company and the Related
                Companies
                during the period beginning on the Agreement Date and ending on March
                16,
                2007, and such employment terminates on or after March 16, 2007 and
                before
                January 1, 2009 by reason of his Retirement (as defined below) or
                death.

            

    

    

    The
      Employee shall not be vested in or entitled to payment of benefits under this
      Agreement unless the requirements of paragraph (a) or paragraph (b) next above
      are satisfied. Nothing in this paragraph 7 shall be deemed to increase the
      amount of benefits (if any) payable under this Agreement, as determined without
      regard to this paragraph 7.

    

    8.
      Heirs
      and Successors.
      This
      Agreement shall be binding upon, and inure to the benefit of, the Company and
      its successors and assigns, and upon any person acquiring, whether by merger,
      consolidation, purchase of assets or otherwise, all or substantially all of
      the
      Company's assets and business. Subject to the terms of the Plan, any benefits
      payable to the Employee under this Agreement that are not paid at the time
      of
      the Employee's death shall be paid at the time and in the form determined in
      accordance with the provisions of this Agreement, to the beneficiary designated
      by the Employee in writing filed with the Committee in such form and at such
      time as the Committee shall require. If a deceased Employee fails to designate
      a
      beneficiary, or if the designated beneficiary of the deceased Employee dies
      before the Employee or before complete payment of the amounts distributable
      under this Agreement, the Committee shall, in its discretion, direct that
      amounts to be paid under this Agreement be paid to:

    

    
      	 	
              (a)

            	
              one
                or more of the Employee's relatives by blood, adoption or marriage
                and in
                such proportion as the Committee decides;
                or

            

    

    

    
      	 	
              (b)

            	
              the
                legal representative or representatives of the estate of the last
                to die
                of the Employee and his
                beneficiary.

            

    

    

    9.
      Retirement.
      For
      purposes of this Agreement, the term "Retirement" means: (a) termination of
      employment because the Employee has reached normal retirement age of 65 years;
      (b) termination of employment because the Employee becomes Disabled; or (c)
      termination of employment before age 65 because of early retirement pursuant
      to
      any plan of the Company or a Related Company that covers the Employee and that
      is qualified under section 401(a) of the Internal Revenue Code. For purposes
      of
      this Agreement, the term "Disabled" means the inability of the Employee, by
      reason of a medically determinable physical or mental impairment, to engage
      in
      any substantial gainful activity, which condition, in the opinion of a physician
      selected by the Committee, is expected to be total and permanent during the
      remainder of the Employee's lifetime.

    

    10.
      Transferability.
      Performance Cash Units awarded under this Agreement are not transferable except
      as designated by the Employee by will or by the laws of descent and
      distribution. Notwithstanding the foregoing, the Committee may permit
      Performance Cash Units awarded under this Agreement to be transferred by a
      participant for no consideration to or for the benefit of the participant's
      immediate family (including a trust for the benefit of a participant's immediate
      family or to a partnership for members of a participant's immediate family),
      subject to such limits as the Committee may establish, and the transferee shall
      remain subject to all terms and conditions applicable to such award prior to
      such transfer. Immediate family is defined as the participant's spouse,
      children, stepchildren and adoptive relationships.

    

    11.
      Employment.
      This
      Agreement does not constitute a contract of employment, and does not confer
      on
      the Employee the right to be retained in the employ of the Company or any
      Related Company. 

    

    12.
      Change
      in Control.
      In the
      event that a change in control (within the meaning of the Plan) occurs prior
      to
      the end of the Performance Period, Performance Cash Units may be paid out in
      such manner and amounts as determined by the Committee.

    

    13.
      Plan
      Governs.
      Notwithstanding anything in this Agreement to the contrary, the terms of this
      Agreement shall be subject to the terms of the Program and of the Plan, copies
      of which may be obtained by the Employee from the office of the Secretary of
      the
      Company. 

    

    14.
      Administration.
      The
      authority to manage and control the operation and administration of this
      Agreement shall be vested in the Committee, and the Committee shall have all
      powers with respect to this Agreement as it has with respect to the Program
      and
      the Plan. Any interpretation of the Agreement by the Committee and any decision
      made by it with respect to the Agreement is final and binding on all
      persons.

    

    15.
      Amendment.
      This
      Agreement may be amended by written agreement of the Employee and the Company,
      without the consent of any other person. Notwithstanding the foregoing, the
      Company may in its sole discretion, amend the this Agreement, the Program or
      the
      Plan in such manner as it may determine is necessary or desirable either
      for the Performance Cash Units to be exempt from the application of
      Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or to
      satisfy the requirements of Section 409A of the Code, provided that no such
      amendment may change the Program's "performance goals," within the meaning
      of Section 162(m) of the Code, with respect to any person who is a "covered
      employee," within the meaning of Section 162(m) of the Code.

    

    IN
      WITNESS WHEREOF, the Employee has hereunto set his hand, and the Company has
      caused these presents to be executed in its name and on its behalf, and its
      corporate seal to be affixed hereto, all as of the Agreement Date.

    

    _____________________________

    «First_Name» «MiName» «Last_Name»

     

    Nicor
      Inc.

       Nicor
      Inc.

    By:
      __________________

    Russ
      Strobel

    Chairman,
      President and

    Chief
      Executive Officer

    

    

    

    ATTEST:

    

    ____________________ 

    Assistant
      Secretary

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      I

    

    

    PERFORMANCE
      CASH UNIT AGREEMENT

    NICOR
      INC. 2006 LONG-TERM INCENTIVE PROGRAM

    

    

    Performance
      Factor

    

    The
      following Schedule shall be used to determine the Performance
      Factor.

    

     

    
      	
              If
                the Nicor Total

              Shareholder
                Return Is:

            	
              The
                Performance

              Factor
                Shall Be:

            
	 	 
	
              At
                or above the 90th
                percentile

            	
              2.00

            
	
              At
                the 75th
                percentile

            	
              1.50

            
	
              At
                the 60th
                percentile

            	
              1.00

            
	
              At
                the 50th
                percentile

            	
              0.75

            
	
              At
                the 40th
                percentile

            	
              0.50

            
	
              At
                the 25th
                percentile

            	
              0.25

            
	
              Less
                than the 25th
                percentile

            	
              0.00

            

    

    

    For
      purposes of this Exhibit 1, the percentile of the Nicor Total Shareholder Return
      shall be the three year total shareholder return of the Company for the
      Performance Period, as compared to the companies in the Standard and Poor's
      utility group for the Performance Period. If the Standard and Poor's utility
      group is not available for the entire Performance Period, the Committee shall
      apply such other measure as it determines to be appropriate to preserve the
      intent of this Agreement. For results between performance levels, the
      Performance Factor will be interpolated.

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