Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.3

KREIDO BIOFUELS, INC.

BOARD OF DIRECTORS OUTSIDE DIRECTOR COMPENSATION PROGRAM

July 26, 2007

 

The Outside Directors’ Compensation Program set forth below is subject to modification by the Company’s Board and
the Company’s Shareholders.

 

a. Annual Retainer. Each Outside Director will be paid an Annual Retainer for services as a
Director of the Company and any subsidiary of the Company, if applicable, of $20,000, which will be paid in
quarterly payments of $5,000. The Chair of the Audit Committee shall receive additional annual compensation of
$5,000, which will be paid in quarterly payments of $1,250, and the Chairs of other committees each shall receive
additional annual compensation of $1,000, which will be paid in quarterly payments of $250. The Chair of the
Board, in recognition of the duties and responsibilities attendant with such a position, shall receive additional
annual compensation of an amount to be determined by the Board. The Annual Retainer and all other Director
compensation paid to Outside Directors shall be prorated for partial years of service. These amounts will be
paid in gross and Outside Directors will be responsible for reporting and paying all applicable taxes.

 

b. Meeting Fees. Each Outside Director shall receive $1,000 for each Board meeting attended in
person physically and $500 for each Board meeting attended telephonically. In addition, each Outside Director
shall receive $500 for each committee or subsidiary Board meeting attended in person physically and $250 for each
committee or subsidiary Board meeting attended telephonically. The total compensation for such board and
committee meetings shall not exceed $1,000 if multiple meetings are attended in person physically on any given
day and shall not exceed $500 if multiple meetings are attended telephonically on any given day. No fees will be
paid for telephone calls other than board and committee meetings as set forth above, nor for meeting preparation
or other time spent on Board business.

 

 

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c. Stock Grant and Options. Each Outside Director shall receive a grant of 2,500 shares of Company
stock upon his/her election or appointment to the Board after the adoption of this Outside Director Compensation
Director Program. In addition, each Outside Director shall be entitled to participate in the Kreido Biofuels
2006 Equity Incentive Plan (“Plan”) as described in this Paragraph (c). The Outside Director’s participation in
the Plan shall be governed by the terms and conditions set forth in the applicable Plan documents. Capitalized
words not defined in this paragraph (c) but used here shall have the meanings ascribed to them in the Plan. Upon
his/her first appointment or election to the Board, each Outside Director shall receive options to purchase
25,000 shares of the Company’s common stock (“Grant”) at a strike price equal to the closing bid price on the
date on which the Grant is made. On October 15 of each calendar year beginning in 2007, each Outside Director
shall receive options to purchase 25,000 shares of the Company’s common stock less the number of shares covered
by Grants made to such Outside Director during the 12-month period immediately preceding the applicable October
15 grant date (also a “Grant”). All Grants shall vest 50% six months after the date of grant and 50% twelve
months after the date of grant. The Term of the Option shall be ten years from the date of grant.

d. Expense Reimbursements. Reasonable out-of-pocket expenses incurred by an Outside Director
related to the performance of the Outside Director’s duties will be reimbursed to him/her. Requests for
reimbursement of expenses shall be documented by the Outside Director and transmitted to the Corporate Secretary,
who will authorize payment by the CFO, subject to review by the Board Audit Committee.

 

2Northern Illinois Gas Company Directors Deferred Compensation Plan

    Nicor
      Inc.

    Form
      10-Q

    Exhibit
      10.01

    

     

    NORTHERN
      ILLINOIS GAS COMPANY

    DIRECTORS’
      DEFERRED COMPENSATION PLAN

     

    (As
      Amended and Restated Effective as of January 1, 2008)

     

    SECTION
      1.  Name. Northern
      Illinois Gas Company previously established “Northern Illinois Gas Company
      Directors’ Deferred Compensation Plan”, which is herein referred to as the
“Plan”. The following provisions constitute an amendment and restatement of the
      Plan, effective as of January 1, 2008, except as otherwise specifically provided
      herein. The provisions of this Plan as amended and restated shall apply to
      all
      deferrals and earnings made under the Plan (whether or not made before or after
      January 1, 2008) for each individual who was a director (a “Director”) of
      Northern Illinois Gas Company (the “Company”) on January 1, 2008.

     

    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)
      any
      combination of (i)-(ii) 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 retainers or fees 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

     

    
      
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    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, 2007, 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, 2007; provided, no
      such
      election may accelerate payment of any deferrals into 2007. Notwithstanding
      any
      deferral election in existence to the contrary, no retainers or 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.

     

    SECTION
      3. Method
      of Deferment. 
      Compensation deferred by a Director under Section 2 shall be credited and paid
      in the following manner:

     

    
      	 	
              3.1
                

            	
              The
                Company shall accrue such deferred compensation to a deferred compensation
                account on its books, such accruals to commence as of the respective
                date
                payments of such amounts would have been made by the Company. The
                establishment of such deferred compensation account is solely for
                bookkeeping purposes, and shall not represent assets held in trust
                or as a
                segregation of the assets of the Company, or any other form of funding
                of
                the deferred compensation.

            

    

     

    
      	 	
              3.2
                

            	
              Commencing
                with the first day of each calendar quarter following (a) the month
                in
                which the Director shall have a Separation from Service (within the
                meaning of Treasury Regulation §1.409A-1(h)) or (b) such other date
                following Separation from Service, but in no event more than five
                years
                subsequent to Separation from Service, as may be elected by the Director,
                the Company shall pay to the Director the amount accrued to his or
                her
                account, in equal quarterly installments, the 
                number
                  of which shall be as specified in the election made by the Director
                  under
                  Section 2, but in no event shall such number exceed
                  40.

              

            

    

     

    
      
        2

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              3.3
                

            	
              An
                amount equivalent to interest on the balance from time to time accrued
                to
                the Director’s account shall be accrued quarterly. The rate of interest
                shall equal the prime interest rate as of the first day of such calendar
                quarter quoted by the Federal Reserve Bank . Interest shall be credited
                to
                the Director’s account unless payments are being made in installments
                hereunder, in which latter event such amounts shall be paid currently
                in
                cash to the Director or the beneficiary, as the case may
                be.

            

    

     

    
      	 	
              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 NICOR Inc. (“NICOR”) 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 NICOR 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 credited to a Director’s account for both the deferred compensation
                and the dividend equivalents shall be determined on the basis of
                the
                closing market composite price for the NICOR 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. For
                Separations from Service occurring on or 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

            

    

     

    
      
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              the
                NICOR common stock as reported on the New York Stock Exchange on
                the first
                trading day after the date the Director incurs a Separation from
                Service.
                

            

    

     

    SECTION
      4.  Transfer Between Cash Deferral and Stock Equivalent Deferral. As
      of the first day of the calendar quarter following the regular annual meeting
      of
      stockholders of the Company, a Director, by giving written notice to the
      Company, may switch all or any portion of the balance in his or her deferred
      compensation account between the interest equivalent option and the share unit
      option using the closing price for the NICOR common stock determined as stated
      in Section 3.4 on the last preceding trading day.

     

    SECTION
      5.  Beneficiary
      Designation.
      Upon
      the death of the Director prior to distribution to him or her of the entire
      amount accrued to the Director’s account, any such undistributed amount shall be
      paid in a lump sum to such beneficiaries and in such proportions among them
      as
      the Director shall have designated in the latest instrument in writing filed
      by
      him or her with the Company, provided, however, that the Director may elect
      in
      accordance with the election provisions of Section 2 that such undistributed
      amount shall be paid to any one beneficiary in equal quarterly installments
      commencing with the first day of the calendar quarter following the Director’s
      death, the aggregate number of which installments (including installments,
      if
      any, paid to the Director before his or her death) shall be as specified by
      the
      Director under Section 3.2. If there shall be no beneficiary designated or
      in
      existence at the Director’s death, any undistributed amount shall be paid to the
      executor or administrator of the Director’s estate. If payments are being made
      in installments to an individual beneficiary, then upon such beneficiary’s death
      any amount then undistributed shall be paid to the executor or administrator
      of
      the beneficiary’s estate.

     

    SECTION
      6. Plan
      Binding.
      This
      Plan shall be binding on the Director and his or her heirs and legal
      representatives and on the Company and its successors and assigns, whether
      by
      merger, consolidation or the sale of all or substantially all of the Company’s
      assets.

     

    SECTION
      7. Nonassignability.
      No
      Director or beneficiary shall have any power to commute, encumber, sell or
      otherwise dispose of the rights provided herein and such rights shall be
      nonassignable and nontransferable.

     

    
      
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    SECTION
      8. Counterparts.
      Any
      elections associated with this Plan may be executed in two or more counterparts,
      any one of which shall be deemed an original without reference to the
      others.

     

    SECTION
      9.   Governing
      Law.
      The
      provisions of this Plan and the rights of the participants hereunder shall
      be
      interpreted and construed in accordance with the laws of the State of
      Illinois.

     

    SECTION
      10. Amendment
      or Termination.
      This
      Plan may be amended by the Board of Directors of the Company (the “Board”) at
      any time and from time to time provided that no such amendment shall serve
      to
      (a) impair or restrict the right of any Director to receive or (b) reduce the
      amounts of compensation or equivalent interest or equivalent stock theretofore
      accrued to the account of any Director. This Plan may be terminated by the
      Board
      at any time, provided that such termination shall not affect any funds accrued
      to the account of any Director at the date of such termination. The provisions
      of this Plan shall continue to apply to any such funds until distribution
      thereof according to the Plan.

     

    
      
        5

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