Document:

nicorgasannualincentofficers.htm

    Nicor Inc.

    Form 10-K

    Exhibit
10.51

     

    NICOR GAS ANNUAL INCENTIVE
COMPENSATION PLAN FOR OFFICERS

    

    
      Nicor Gas
(the “Company”) has established the Nicor Gas Annual Incentive Compensation Plan
for Officers (the “Plan”) to link participant incentive compensation to the
accomplishment of corporate and operating unit financial performance as well as
to non-financial measures of operating performance across the Company and
operating units.  It ties the pay an individual receives to Company
performance and non-financial goals.  This plan is intended to provide
a framework for a performance-based bonus program for Nicor Gas, and is
effective January 1, 2008.

    

     

    Purpose

    The
purpose of this Plan is to provide meaningful annual incentive award opportunity
to the participants.  Awards will be directly tied to the achievement
of corporate financial and operating goals and non-financial
objectives.  The Plan has been structured to encourage teamwork among
business units and encourage the achievement of both shareholder and ratepayer
oriented goals.

     

    Eligible
Group

    Officers
of Nicor Gas in Salary Bands 1 or higher are eligible for
participation.  As such, participation is limited to employees in
positions which enable them to make significant contributions to the performance
and growth of the Company.

    

    Compensation
Objective

    Base
Salary + Bonus Target = Short-Term Compensation Objective

    

    An
individual's short-term compensation objective will be based on salary plus a
bonus, expected to be earned if established performance targets are
met.  Short-term compensation above (or below) target levels may be
paid in the event performance exceeds (or falls short of) goals.

    

    Base
Salary

    Standards
for base salaries will be targeted to the 50th
percentile of the appropriate industry survey data.  Base salaries are
reviewed annually by the Compensation Committee of the Board of Directors (the
“Compensation Committee”).

    

    Bonus
Targets

    The bonus
target amount varies according to pay, job responsibilities and ability to
impact the organization and is consistent with the bonus opportunity ranges set
by officer salary bands.  Higher responsibility and impact levels
result in greater dollars at risk.

    

    Performance
Targets

    Performance
criteria focus on the achievement of established and documented strategic
goals.  Performance targets may include measures of corporate
financial and operating performance, defined group objectives or individual
performance

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    objectives.  Each
particular performance target will be assigned weighting reflected as a
percentage of bonus target.

    

    Goal Setting
Guidelines

    The most
important aspect of this Plan will be the establishment of effective
goals.  In addition to measures of corporate financial and operating
performance, other non-financial measures of performance will also be
established.  The goals should be realistic and measurable wherever
possible by quantifiable performance criteria.  It is recognized that
measurement of some goals will require subjective assessments of
performance.  Goals must be consistent with the longer-term strategic
plan.

    

    A set of
guidelines will be devised by the Nicor Human Resources Department to aid in
this process.  These guidelines will provide direction as to the
formulation and reporting of non-financial goals.

    

    Amount of
bonus payment for financial/budget related goals can vary above and below target
based upon results achieved.  For targets met, bonus amount will be
100% of bonus target.  When targets are exceeded or are not reached,
bonus will be proportionately more or less than the target.

    

    The
Compensation Committee may make appropriate upward or downward adjustments if,
after taking into consideration all of the facts and circumstances of the
performance period, it determines that adjustments are warranted.

    

    Plan Schedule and Bonus
Payment

    The Plan
runs on a calendar year basis, with the strategic planning cycle and budgeting
process serving as the primary link to performance and bonus
targets.  The Accounting Department is responsible for the
determination of actual financial results.  Performance will be
reviewed at least twice a year to monitor progress and adjust
accruals.

    

    Year-end
results should be available and evaluated as early as possible in the following
year.  No bonus shall be paid until the Compensation Committee
approves such payment.

    

    Subject
to the provisions of the “Bonus Deferral” section below, bonuses will be paid to
participants in a single lump sum.  Payment will be made between
January 1 and March 15 of the calendar year following the calendar year in which
the services were performed (or, in the event that payment is not made by March
15, no later than December 31 of such calendar year).  Bonus payments
under this Plan are intended to satisfy either the short-term deferral exemption
under Treas. Reg. Sec. 1.409A-1(b)(4) or be compliant with Section 409A of the
Internal Revenue Code.  All awards will be paid in cash, except as
provided below.

     

    Bonus
Deferral

    Deferral
under the Stock Deferral Plan or Salary Deferral Plan.  A participant
in the Stock Deferral Plan may elect to defer up to 50% of his bonus award into
that plan 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and a
participant in the Salary Deferral Plan may elect to defer 10% to 20% of his
bonus award into that plan.  All such elections must be made in
accordance with the terms of the Stock Deferral Plan and/or Salary Deferral Plan
in order to be effective.  In the event of conflict between the terms
of the Stock Deferral Plan or the Salary Deferral Plan and this Plan, the terms
of the Stock Deferral Plan or the Salary Deferral Plan, as applicable, shall
control.  Appropriate taxes for the entire award amount will be
withheld from the portion of the award being paid in cash.

     

    Integration with Existing
Programs

    Base
salaries will be managed with range bands at the appropriate blend of general
and industry data for comparable positions, with total compensation objectives
to be managed at a level appropriate with the performance of the company, as
determined by the Compensation Committee.  Salaries will be monitored
each year and increases granted based on merit and range bands.  Bonus
targets will be set as a percentage of base salary. A change, other than the
annual salary review, in the compensation objective will customarily occur
during the year only through promotion to various levels, at which time the base
salary and bonus target are also likely to change.

    

    Promotion
of an employee during the year or reassignment to responsibilities in which new
performance objectives apply will result in proration of the existing
performance objectives and bonus target and assignment of new performance
objectives and if appropriate, a new bonus target as determined by the
Compensation Committee.  Promotion into an Executive Salary Band would
create eligibility for bonus at a prorated amount, based on the effective date
of the promotion.

    

    If a
participant voluntarily terminates or is terminated for cause prior to the end
of the performance period, then no award shall be granted.  In the
event a participant shall die, become disabled, or retire before the end of the
performance period, then the Compensation Committee will authorize payment of an
award to the participant, or beneficiary, in such other amount as the Committee
deems appropriate.

     

    Responsibility

    The Human
Resources Department will be responsible for the administration of the process
for the company.  This will include:

    

    1.       monitoring
market salary and total compensation levels;

     

    2.      
recommending
structural changes in base salary and compensation objective
adjustments;

    

    3.       assisting
the Nicor Gas CEO in progress and exception reporting to the Compensation
Committee;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.       assist
the Nicor Gas CEO in monitoring financial performance targets throughthe
Accounting Department and communicating progress reports to
theparticipants;

    

    5.       monitoring
compliance with related financial controls; and

    

    6.       maintaining
the accuracy of the plan document(s) governing the plan.

    

    The Nicor
Gas CEO shall be responsible for:

     

    1.      
reviewing
market salary and compensation levels and approving recommendations before
presentation to the Compensation Committee;

    

    
      2.      
approving
structural changes in base salary and compensation objective adjustments before
presentation to the Compensation Committee;

    

    

    
      3.     
 recommending
eligibility, performance targets and goals to the Compensation
Committee;

    

    

    
      4.      
monitoring
performance targets through the Accounting Department and other sources of
necessary documentation;

    

    

    
      5.      
communicating
progress reports to the participants; and,

    

    

    
      6.     
 reporting
performance results and making award recommendations to the Compensation
Committee.

    

    

    The Plan
and changes to its performance targets and measurement criteria will be reviewed
and approved by the Compensation Committee.

    

    In
determining the actual bonus awards to be made, the Compensation Committee may
take into account all of the facts and circumstances which exist during the year
and may make appropriate upward or downward revisions in performance criteria,
add or delete objectives, or change the relative percentages assigned to the
various performance objectives.

    

    
      Amendment and
Termination

    

    The
Compensation Committee may amend or terminate the Plan at any time without the
consent of the participants.  No such amendment or termination shall
negatively impact any participant's amount which accrued under the Plan prior to
the calendar year in which the amendment is made.firstamendnicordirectdefcomp.htm

    Nicor Inc.

    Form 10-K

    Exhibit
10.54

    

     

    FIRST
AMENDMENT

    TO

    NICOR
INC.

    DIRECTORS’ DEFERRED
COMPENSATION PLAN

    

    WHEREAS,
NICOR Inc. (the “Company”) previously established the NICOR Inc. Directors’
Deferred Compensation Plan, as amended and restated effective as of January 1,
2008 (the “Plan”); and

    WHEREAS,
the Company desires to amend the Plan in certain respects effective as of
January 1, 2008.

    NOW
THEREFORE, the Plan is hereby amended as follows:

    

    I.  Section
2 of the Plan is deleted in its entirety and the following new Section 2 is
substituted in lieu thereof:

    “SECTION
2.  Participation.  A
Director of the Company may elect to defer the payment or portion thereof owed
for the:

     

    (i)            retainers;
or

     

    (ii)           meeting
fees; or

     

    (iii)          awards
under the NICOR Inc. Directors Stock Value Plan made after January 1, 2008;
or

     

    (iv)          any
combination of (i)-(iii) above.

     

    Such
election must be communicated to the Company in writing prior to December 31 of
the year prior to the term for which the Director may be
reelected.  For a Director first elected or appointed to the Board,
such election shall be communicated to the Company in writing within thirty (30)
days of the date the Director is first elected or appointed to the Board;
provided such deferment shall apply only to the compensation earned after such
written election is communicated to the Company.  Once made an
election shall continue in force with respect to succeeding terms of the
Director’s service unless the Director shall advise the Company in writing prior
to December 31 of the year prior to the year of reelection that he or she elects
to terminate or change the terms of such 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    deferment
effective with such reelection.  In addition, such election shall
specify the manner and date on which the Director elects to receive payment of
the deferred amount under Subsection 3.1 below.  Directors who were
Directors on January 1, 2008, shall file an election as to the time and form of
payment of all their deferrals, whether made prior to or after such date by
December 31, 2008; provided, no such election may accelerate payment of any
deferrals into 2008.  Notwithstanding any deferral election in
existence to the contrary, no meeting fees paid after the Director’s Separation
from Service (whether or not earned prior to such Separation from Service) may
be deferred under this Plan.”

    

    II.  Subsection
3.4 of the Plan is deleted in its entirety and the following new Subsection 3.4
is substituted in lieu thereof:

    

    
      	
               
      

            	
              “3.4

            	
              As
      an alternative to an interest equivalent, a Director may elect to have all
      or any portion of his or her compensation converted into share units, each
      reflecting a share of the Company’s common stock.  If this
      alternative is elected, the Director’s deferred account will be credited
      with an amount per share unit equal to the per share dividends and
      distributions paid on the Company’s common stock during the period the
      share unit is in the deferred account, which amount shall in turn be
      converted into share units.  The Director’s right to the
      dividend equivalent shall accrue on the date the dividend is
      declared.  However, the number of share units credit to a
      Director’s account for (i) deferred payment of retainers, meeting fees and
      awards made during 2008 under the Nicor Inc. Directors’ Stock Value Plan
      (the “Stock Value Plan”) and dividend equivalents on all deferred
      compensation shall be determined on the basis of the closing market
      composite price for the Company’s common stock as reported on the New York
      Stock Exchange Composite Transactions on the last trading day preceding
      the deferred compensation or dividend payment date and (ii) deferred
      

            

    

     

    
      
        
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              payment
      of any award made after 2008 under the Stock Value Plan shall be based on
      the closing market composite price for the Company’s common stock as
      reported on the New York Stock Exchange Composite Transactions on the
      applicable award date specified for that award under the Stock Value
      Plan.  For Separations from Service occurring on and after July
      26, 2007, the share units in the Director’s account shall be converted to
      a cash equivalent based on the closing market composite price for the
      Company’s common stock as reported on the New York Stock Exchange
      Composite Transactions on the first trading day after the date the
      Director incurs a Separation from
Service.”

            

    

     

     

     

    

    
      
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