Document:

Exhibit 10.4

    Nicor
      Inc.

    Form
      8-K

    Exhibit
      10.4

    2006
      LONG-TERM INCENTIVE PROGRAM

     

    The
      2006
      Long-Term Incentive Program will be approved at the March 2006 meeting of the
      Compensation Committee, along with the program participants and awards.

     

    Shown
      below is a full description of the 2006 Long-Term Incentive Program. The company
      will make use of a combination of performance units, restricted stock and
      deferred restricted stock. The company may also provide awards of stock options
      in select circumstances. Grants of performance units, restricted stock, deferred
      restricted stock and stock options for the 2006 Long-Term Incentive Program
      will
      be made from the 1997 Long Term Incentive Plan.

     

    Description
      of Restricted Stock and Deferred Restricted Stock 

     

    	·  	
            Restricted
              Stock - actual shares of common stock, which are subject to restrictions
              on receipt and transfer and are forfeitable in the event the employee
              leaves the company prior to vesting. The participant holding restricted
              stock shall have all of the rights of a common shareholder, including
              the
              right to vote the shares and receive all dividends paid on such
              shares.

          

     

    	·  	
            Deferred
              Restricted Stock - Deferred restricted stock gives the employee the
              right
              to receive shares of stock at a designated time or event in the future.
              The participant holding deferred restricted stock will have the right
              to
              receive dividend equivalent rights, which are equal to the amount of
              dividends that would be paid on the restricted shares, as if such shares
              were outstanding. 

          

     

    	·  	
            Restricted
              stock and deferred restricted stock will vest at the end of four years
              of
              employment from the date of grant. 

          

     

    Description
      of Performance Units

     

    	·  	
            Each
              performance unit equals $1.00 and total units are a percentage of base
              salary at the time of the award. 

          

     

    	·  	
            Performance
              units pay out based on total shareholder return over a three-year
              performance period.

          

     

    	·  	
            Performance
              units will pay out in cash, unless a participant in the Stock Deferral
              Plan elects to defer up to 50% of their payout into that plan. Deferral
              elections must meet the guidelines and timing of the Stock Deferral
              Plan
              to be effective.

          

     

    How
      Performance Unit Payouts are Determined

     

    	·  	
            All
              performance units pay out at the end of a three-year performance period.
              Payouts generally will be made as soon as practicable following the
              end of
              the performance period, but not later than December 31 of the
              calendar year following the end of the performance period.
              

          

     

    	·  	
            The
              payout is based on a measure of relative total shareholder return (TSR).
              Nicor’s TSR will be measured as the change in share price over the
              three-year period plus dividends granted over that period. For the
              measurement of Nicor share price, rather than focusing on a single-day’s
              price, the average of the closing share prices over a 20-day period
              will
              be used for the base and ending TSRs.

          

     

    	·  	
            The
              performance measure and multiplier (described below) is based on the
              Nicor
              TSR over the performance period, as compared to the performance of
              the
              companies in a utility industry peer group (S&P utility
              group).

          

     

    	·  	
            The
              following schedule shows the proposed performance unit
              multiplier:

          

     

    Performance
      Unit Multiplier Schedule

     

    
      	
              Nicor
                TSR*

            	
              Payout
                Multiple

            
	
              90th
                Percentile or higher

            	
              200%

            
	
              75th
                Percentile

            	
              150%

            
	
              60th
                Percentile

            	
              100%

            
	
              50th
                Percentile

            	
              75%

            
	
              40th
                Percentile

            	
              50%

            
	
              25th
                Percentile

            	
              25%

            
	
              Below
                25th
                Percentile

            	
              0%

            

    

    

    *
      Values
      between the data points will be interpolated.

     

    Description
      of Stock Options (granted under special circumstances
      only)

     

    	·  	
            Option
              exercise price set at the fair market value on date of
              grant.

          

     

    	·  	
            Options
              vest after one year and are generally exercisable at the end of three
              years.

          

     

    	·  	
            Options
              expire ten years from date of grant.

          

     

    	·  	
            Options
              will be non-qualified stock options. 

          

     

    Transferability

     

    With
      Committee approval, restricted stock, deferred restricted stock, performance
      units and stock options may be transferred for no consideration to or for the
      benefit of the participant’s immediate family as defined in the plan. All terms
      and conditions remain applicable after transfer.

     

    Termination
      Provisions

     

    In
      the
      case of death, disability or retirement:

     

    	·  	
            Unvested
              performance units held for more than one year (as of the date of death,
              disability or retirement) will be eligible for payout at the end of
              the
              performance period based on the normal per-unit performance/pay out
              guidelines. The award will not be
              prorated.

          

     

    	·  	
            Unvested
              restricted stock held for more than one year from date of grant will
              vest
              upon death or disability, but not retirement.

          

     

    	·  	
            Unvested
              restricted stock at retirement will be forfeited, unless the Committee
              chooses to exercise discretion and accelerate vesting for all or part
              of
              the unvested award held for more than one year after
              grant.

          

     

    	·  	
            Unvested
              deferred restricted stock held for more than one year from date of
              grant
              will vest and be paid out immediately in full upon death, disability
              or
              retirement. Deferred restricted stock held less than one year will
              be
              forfeited.

          

     

    	·  	
            All
              stock options held for more than one year (as of the date of death,
              disability or retirement) will be immediately exercisable. Stock options
              held less than one year will be
              forfeited.

          

     

    	·  	
            Stock
              options will remain exercisable for ten years after the date of
              grant.

          

     

    In
      the
      case of termination of employment for any other reason, unvested awards will
      be
      forfeited unless the Compensation Committee chooses to override this
      policy:

    

    	·  	
            Unvested
              restricted stock or deferred restricted stock held for less than four
              years are immediately forfeited.

          

    

    	·  	
            Stock
              options held less than one year are immediately forfeited.
              

          

    

    	·  	
            Performance
              units held less than three years are immediately forfeited.
              

          

    

    	·  	
            Stock
              options held for one year or longer will be exercisable, with the
              remaining term limited to three months after the date of termination.
              After this date, all unexercised options will expire and be immediately
              cancelled. 

          

    

    

    

    

    

    

    

    Nicor
      Human Resources

    March
      2006Exhibit 10.5

    Nicor
      Inc.

    Form
      8-K

    Exhibit
      10.5

    THIRD
      AMENDMENT TO

    NICOR
      INC. 1997

    LONG-TERM
      INCENTIVE PLAN

     

    

     

    This
      Third Amendment to the Nicor Inc. 1997 Long-Term Incentive Plan (the “Plan”) is
      effective as of March 1, 2006, by amending the Plan by substituting the
      following for Section 6.11:

     

    “6.11 Agreement
      With Company.
      At the
      time of an Award to a Participant under the Plan, the Committee may require
      a
      Participant to enter into an agreement with the Company (the “Agreement”) in a
      form specified by the Committee, agreeing to the terms and conditions of the
      Plan and to such additional terms and conditions, not inconsistent with the
      Plan
      except to the extent necessary to comply with Code Section 409A, as the
      Committee may, in its sole discretion, prescribe.”

     

    

     

    *
      * * * *
      * *

     

    I,
      Paul
      C. Gracey, Jr., Secretary of Nicor Inc., do hereby certify that the terms of
      this Third Amendment were approved at a meeting of the Board of Directors of
      the
      Company on March 16, 2006.

     

    

    Dated:
      March
      16, 2006                s/
      PAUL C. GRACEY, JR. 

    Paul
      C.
      Gracey, Jr.

    Secretary
      as Aforesaid

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]