Nicor Inc. Form 10-K Exhibit 10.26
1999 LONG-TERM INCENTIVE PROGRAM
At the March 1999 meeting of the Compensation Committee, the Committee approved the 1999 Long-Term
Incentive Program, participants and awards. Shown below is a full description of the Long-Term Program for
Summary of 1999 Long-Term Incentive Program
Combination of Stock Options (SOs) and Dividend Performance Units (DPUs).
- Annual grants of both, generally on a one-for-one basis.
- Nothing prevents the Committee from granting either freestanding stock options or dividend performance units.
SOs have a ten-year term and would vest after three years.
DPUs would accumulate dividend equivalents over at least a three-year period, and would pay out based on total
shareholder return over the period.
SOs and DPUs would be freestanding.
The company will also continue to make selected use of restricted stock.
Description of Stock Options
Option exercise price set at fair market value on date of grant.
Options vest after three years (100% in year three).
Options expire ten years from date of grant.
Options can be NQSOs or ISOs; Nicor plans to grant NQSOs in 1999.
Description of Dividend Performance Units
Each dividend performance unit accumulates all of the dividends paid on one share of Nicor stock during the
three-year period. As an example, if Nicor's annual dividend grows at $0.08 per year from its current level of
$1.48, each unit would be worth $4.86 at the end of three years:
This Document Constitutes Part of a Prospectus Covering Securities That Have Been Registered under the
Securities Act of 1933.
Accrued dividend equivalents are not reinvested in company stock, nor is any interest paid on accrued dividends.
Dividend performance units accumulate no additional value after the end of the three-year period.
Annual Dividend Cumulative
Year As of May Dividend Unit Value
1998 $1.48 --