Document:

EX-10.22

 

Exhibit 10.22

PARTICIPATION AGREEMENT

UNDER THE

PIEDMONT NATURAL GAS COMPANY, INC.

SHORT-TERM INCENTIVE PLAN (STIP)

     Piedmont
Natural Gas Company, Inc. (the “Company”) and ____________ (“Participant”) hereby
enter into this Participation Agreement as of
____________, 20___ under the Piedmont Natural Gas Company,
Inc. Short-Term Incentive Plan (STIP) for the fiscal year 20___, approved by the Board of Directors
on ____________, 20___.

1. Designation as a Participant. You have been designated as a Participant under the Plan
for the fiscal year 20___. Exhibit A attached hereto identifies the target award applicable
to you. The award is a cash payment. Subject to Stock Ownership Guidelines, a participant who
does not meet their stock ownership goal due to stock sales will be required to use a minimum of
25% (net of applicable taxes) of any short-term incentive award to purchase Piedmont stock until
the applicable ownership level is achieved. As a participant, you shall be subject to all the
terms and conditions of the Plan, which are hereby incorporated by reference, and this
Participation Agreement.

2. Performance Period. The fiscal year 20___Plan performance period begins November 1,
20___and ends October 31, 20___.

3. Performance Goals. The fiscal year 20___Plan performance goals are established by the
Board of Directors. The table below identifies the performance/payment relationship for the fiscal
year 20___ Plan.

	 	 	 	 	 	 
	 
	 	 	 	 	Payout as a Percent of Incentive	 
	 	Performance Against EPS Goal	 	 	Opportunity	 
	 	> = 105% of Goal (> = $x.xx)
	 	 	150%	 
	 	100% of Goal ($x.xx)
	 	 	100%	 
	 	95% of Goal ($x.xx)
	 	 	50%	 
	 	< 95% of Goal (< = $x.xx)
	 	 	0%	 
	 

     Payouts for performance between 95% and 105% of goal will be subject to mathematical
interpolation.

4. Tax Withholding. The Company will withhold any required taxes for any target awards
distributed to you in compliance with tax withholding regulations.

5. Change of Employment Status. Changes in position during fiscal year 20___which create
revised target awards, or hires/promotion into STIP participation will be prorated based on the
number of months of actual participation.

 

 

     Unless otherwise determined by the Board, any resignation or termination of the participant
prior to the end of the fiscal year 20___performance period immediately terminates participation
and causes a forfeiture and cancellation of all Plan benefits and awards.

     In the event of a participant’s death, disability or retirement prior to the date the award is
paid, the following shall apply: (i) In the event of the participant’s death or disability before
the end of the performance period, the Company will be assumed to have achieved a target
performance level for the performance period in which the death or disability occurs for purposes
of determining the award. In the event of the participant’s death or disability after the end of
the performance period, but before the date the award is paid, the participant’s award shall be
payable based on the actual performance criteria for the entire period. (ii) In the event of a
participant’s retirement, the participant’s award shall be determined and payable following the end
of the performance period based on the actual performance criteria for the entire period. (iii)
The amount of the award shall be prorated as necessary to reflect the period of time during which
the individual was employed in the performance period.

     This Notice of participation is subject to all terms and conditions of the Short-Term
Incentive Plan as interpreted by the Company’s Board of Directors.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written
above.

	 	 	 	 	 
	 

	 	Piedmont Natural Gas Company, Inc.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	ParticipantEX-10.26

 

Exhibit 10.26

Piedmont Natural Gas Company, Inc.

Restricted Stock Award Agreement

Piedmont Natural Gas Company, Inc. hereby grants you, Thomas E. Skains (the “Employee”), a
grant of time-vested restricted stock pursuant to and subject to the provisions of the Piedmont
Natural Gas Company, Inc. Incentive Compensation Plan (the “Plan”) and to the terms and
conditions set forth on the following pages. The intention of this grant is to support the
Company’s strategy to retain the current Chairman, President and Chief Executive Officer. This
grant of restricted stock is not intended to replace any current benefit or incentive programs in
which the Employee currently participates.

The date of this Restricted Stock Award Agreement (this “Agreement”) is September 1, 2006
(the “Grant Date”).

The initial grant of Restricted Stock is 65,000 shares of Common Stock of the Company (the
“Shares”).

The Shares shall vest and no longer be subject to forfeiture or restriction in accordance with the
following schedule:

	 	 	 	 	 
	Year	Number of Vested Shares	 
	September 1, 2007
	 	 	0	 
	September 1, 2008
	 	 	0	 
	September 1, 2009
	 	 	13,000	 
	September 1, 2010
	 	 	19,500	 
	September 1, 2011
	 	 	32,500	 

During the period when the Shares are not vested (the “Vesting Period”) but prior to
vesting or forfeiture of the Shares, any dividends paid on the Shares will be accrued and converted
into additional Shares which additional Shares will be subject to the same restrictions on
transferability and forfeitability as the original Shares with respect to which they were
distributed.

Your signature below indicates your agreement and understanding to the terms and conditions of this
Agreement.

	 	 	 
	Piedmont Natural Gas Company, Inc.

	 	Employee
	 
	 	 
	/s/ John W. Harris

	 	/s/ Thomas E. Skains
	 

	 	 
	John W. Harris

	 	Thomas E. Skains
	Chair, Compensation Committee

	 	Chairman, President and CEO
	Board of Directors
	 	 

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TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT

1. Definitions. Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to such terms in the Plan.

2. Grant. The Company hereby grants to the Employee, subject to all of the terms and
conditions set forth in the Plan and in this Agreement, the Shares indicated on Page 1.

3. Shares Held in Escrow. As of the Grant Date, the Shares will be issued in the name of
the Employee and held by the Secretary of the Company as escrow agent (the “Escrow Agent”),
and will not be sold, transferred or otherwise disposed of, and will not be pledged or otherwise
hypothecated until the Shares are vested in accordance with this Agreement. The Company may
instruct the transfer agent for its Common Stock to place a legend on the certificates representing
the Shares or otherwise note its record as to the restrictions on transfer set forth in this
Agreement. Subject to Section 15, at the time the Shares have vested and all other terms and
conditions in this Agreement have been satisfied, the certificate or certificates representing such
Shares will be delivered by the Escrow Agent to the Employee.

4. Vesting Schedule. As of the Grant Date, the Shares shall be “Unvested Shares”
and fully forfeitable. Except as provided in Section 5, and subject to Section 6, the Unvested
Shares shall become “Vested Shares” in accordance with the vesting schedule specified on
page 1. Vesting actually will occur only if the Company or a Subsidiary employs the Employee
through the applicable vesting date.

5. Board Discretion on Vesting. The Board, in its discretion, may accelerate the vesting
of the balance, or some lesser portion of the balance, of the Unvested Shares at any time. If so
accelerated, such Shares will be considered as having vested as of the date specified by the Board.

6. Forfeiture. Notwithstanding any contrary provision of this Agreement, if the Employee’s
employment with the Company terminates for any reason prior to the Unvested Shares becoming Vested
Shares in accordance with Section 4 or Section 5, Employee shall forfeit all of Employee’s right,
title and interest in and to the Unvested Shares as of the date of Employee’s termination of
employment, and such Unvested Shares shall automatically revert to the Company at no cost to the
Company immediately following the event of forfeiture. The Employee hereby appoints the Escrow
Agent with full power of substitution, as the Employee’s true and lawful attorney-in-fact with
irrevocable power and authority in the name and on behalf of the Employee to take any action and
execute all documents and instruments, including, without limitation, stock powers which may be
necessary to transfer the certificate or certificates evidencing such Unvested Shares to the
Company upon such forfeiture.

7. Death of Employee. Any distribution or delivery to be made to the Employee under this
Agreement will, if the Employee is then deceased, be made to the Employee’s designated beneficiary,
or if no beneficiary survives the Employee, to the administrator or executor of the Employee’s
estate. Any such transferee must furnish the Company with (a) written notice of his or her status
as transferee, and (b) evidence satisfactory to the Company to establish the validity

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of the transfer and compliance with any laws or regulations pertaining to said transfer.

8. Payment and Withholding of Taxes. Notwithstanding any contrary provision of this
Agreement, no certificate representing the Shares may be released from the escrow established
pursuant to Section 3 unless and until satisfactory arrangements (as determined by the Committee)
have been made by the Employee with respect to the payment of income and employment taxes which the
Company determines must be withheld with respect to such Shares. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time, may permit the
Employee to satisfy such tax withholding obligation, in whole or in part by (a) electing to have
the Company withhold otherwise deliverable Vested Shares, or (b) delivering to the Company already
vested and owned shares of Company stock having a Fair Market Value equal to the minimum amount
required to be withheld.

9. Rights as Stockholder. The Employee, as beneficial owner of the Shares, shall have all
of the rights and privileges of a stockholder of the Company in respect of any Shares deliverable
hereunder at the time certificates representing such Shares have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to the Employee or the
Escrow Agent. During the Vesting Period, any dividends paid on the Shares shall be treated as
described on the first page of this Agreement.

10. No Effect on Employment. The Employee’s employment with the Company and its
Subsidiaries is on an at-will basis only. Accordingly, the terms of the Employee’s employment with
the Company and its Subsidiaries will be determined from time to time by the Company or the
Subsidiary employing the Employee (as the case may be), and the Company or the Subsidiary will have
the right, which is hereby expressly reserved, to terminate or change the terms of the employment
of the Employee at any time for any reason whatsoever, with or without good cause, subject to the
terms of the employment agreement between the Employee and the Company dated December 1, 1999.

11. Changes in Shares. In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, share combination, or other
change in the corporate structure of the Company that affects the Shares, the Shares will be
increased, reduced or otherwise changed to the extent the Board deems any such change necessary or
appropriate to put the Employee in the same economic position as he was in immediately before such
event. If the Employee receives rights or warrants with respect to any Shares, such rights or
warrants may be held or exercised by the Employee, provided that until such exercise any such
rights or warrants and after such exercise any shares or other securities acquired by the exercise
of such rights or warrants will be considered to be Shares and will be subject to all of the
conditions and restrictions applicable to Shares pursuant to this Agreement.

12. Address for Notices. Any notice to be given to the Company under the terms of this
Agreement will be addressed to the Company, in care of Vice President — General Counsel, Corporate
Secretary and Chief Compliance Officer at Piedmont Natural Gas Company, Inc., 4720 Piedmont Row
Drive, Charlotte, NC 28210, or at such other address as the Company may hereafter designate in
writing.

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13. Grant is Not Transferable. Except to the limited extent provided in Section 7 above,
this grant and the rights and privileges conferred hereby will not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be
subject to sale under execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred
hereby, or upon any attempted sale under any execution, attachment or similar process, this grant
and the rights and privileges conferred hereby immediately will become null and void.

14. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

15. Additional Conditions to Release from Escrow. If at any time the Company determines, in
its discretion, that the listing, registration or qualification of the Shares upon any securities
exchange or under any state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the release of such Shares from
the escrow established pursuant to Section 3, such release will not occur unless and until such
listing, registration, qualification, consent or approval will have been effected or obtained free
of any conditions not acceptable to the Company. The Company will make all reasonable efforts to
meet the requirements to any such state or federal law or securities exchange and to obtain any
such consent or approval of any such governmental authority.

16. Committee Authority. The Compensation Committee of the Board, with approval from the
Board, will have the power and discretion to interpret this Agreement and to adopt such rules for
the administration, interpretation and application of the Agreement as are consistent herewith and
to interpret or revoke any such rules (including, but not limited to, the determination of whether
or not any Shares have vested). All actions taken and all interpretations and determinations made
by the Committee in good faith will be final and binding upon the Employee, the Company and all
other interested persons. No member of the Committee will be personally liable for any action,
determination or interpretation made in good faith with respect to this Agreement.

17. Captions. Captions provided herein are for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

18. Agreement Severable. In the event that any provision in this Agreement will be held
invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

19. Modifications to the Agreement. This Agreement constitutes the entire understanding of
the parties on the subjects covered. The Employee expressly warrants that he is not accepting this
Agreement in reliance on any promises, representations, or inducements other than those contained
herein. Modifications to this Agreement can be made only in an express written contract executed by
a duly authorized officer of the Company.

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20. Notice of Governing Law. Except to the extent superceded by the laws of the United
States, this Agreement will be governed by, and construed in accordance with, the laws of the State
of North Carolina without regard to principles of conflict of laws.

21. Additional Actions. The parties will execute such further instruments and take such
further action as may reasonably be necessary to carry out the intent of this Agreement.

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