Nicor Inc. Form 10-Q Exhibit 10.02
NICOR ANNUAL INCENTIVE COMPENSATION PLAN FOR OFFICERS
A. The 2004 Nicor Annual Incentive Compensation Plan for Officers is designed to link participant incentive
compensation to the accomplishment of important objectives--both financial goals and defined strategic plans. It
ties the pay an individual receives to his performance and that of the company. This plan is intended to provide a
flexible framework for a performance bonus program for Nicor.
B. Purpose The purpose of this Plan is to provide an annual incentive plan which supports the longer-term
strategic planning process. This is done by linking pay to the performance of tasks which focus on objectives of
C. Eligible Group Officers of Nicor are eligible for participation. Participation should be limited to those
employees in positions which enable them to make significant contributions to the performance and growth of the
D. Components of Plan Compensation Objective
Goal Setting Guidelines
Form of Payment
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
agreed-upon performance targets are met. Under certain conditions, short-term compensation above or below
targets may be paid.
Base salaries will be managed at the appropriate blend of general and industry average which will be determined
annually by survey data. Bonus targets will be set based on the individual's job responsibilities and compensation
objective, such that total compensation objectives are managed at the level as determined by the Compensation
Committee of the Board of Directors to remain competitive.
The bonus target amount varies according to pay, job responsibilities and ability to impact the organization. The
higher responsibility and impact leve