UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996
or
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 1-7297
NICOR Inc.
(Exact name of registrant as specified in its charter)
Illinois 36-2855175
(State of incorporation) (I.R.S. Employer
Identification No.)
1844 Ferry Road
Naperville, Illinois 60563-9600
(Address of principal (Zip Code)
executive offices)
(630) 305-9500
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Shares of common stock, par value $2.50 outstanding, at October 31, 1996,
were 49,812,109.
NICOR Inc. Page i
Table of Contents
Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited) 1
Consolidated Statement of Income -
Three, Nine and Twelve Months Ended
September 30, 1996 and 1995 2
Consolidated Statement of Cash Flows -
Nine and Twelve Months Ended
September 30, 1996 and 1995 3
Consolidated Balance Sheet -
September 30, 1996 and 1995, and
December 31, 1995 4
Notes to the Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II. Other Information
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
Exhibit Index 16
Selected terms:
Ill.C.C. - Illinois Commerce Commission.
Mcf, Bcf - Thousand cubic feet, billion cubic feet.
TEU - Twenty-foot equivalent unit.
Degree days -Number of degrees by which the daily
mean temperature falls below 65 degrees
Fahrenheit.
NICOR Inc. Page 1
PART I -Financial Information
Item 1.Financial Statements
The following condensed unaudited financial statements of
NICOR Inc. have been prepared by the company pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC).
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
SEC rules and regulations. The condensed financial statements
should be read in conjunction with the financial statements and the
notes thereto included in the company's latest Annual Report on
Form 10-K.
The information furnished reflects, in the opinion of the company,
all adjustments (consisting only of normal recurring adjustments)
necessary for a fair statement of the results for the interim
periods presented. Because of seasonal and other factors, the
results for the interim periods presented are not necessarily
indicative of the results to be expected for the full fiscal year.
<TABLE>
NICOR Inc. Page 2
Consolidated Statement of Income (Unaudited)
(Millions, except per share data)
<CAPTION>
Three months ended Nine months ended Twelve months ended
September 30 September 30 September 30
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Operating revenues $ 220.4 $ 157.1 $1,257.8 $1,013.8 $1,724.1 $1,409.3
Operating expenses
Cost of gas 75.8 46.3 677.8 527.4 937.6 737.2
Operating and maintenance 80.4 67.9 233.5 204.2 316.5 275.5
Depreciation 16.5 14.6 87.2 78.6 120.4 109.9
Taxes, other than income taxes 12.4 10.5 89.9 77.6 116.3 101.3
185.1 139.3 1,088.4 887.8 1,490.8 1,223.9
Operating income 35.3 17.8 169.4 126.0 233.3 185.4
Other income (expense)
Interest income .3 .5 1.2 2.6 1.7 3.1
Other, net (.1) .4 (1.8) .8 .4 3.1
.2 .9 (.6) 3.4 2.1 6.2
Income before interest on debt
and income taxes 35.5 18.7 168.8 129.4 235.4 191.6
Interest on debt, net of
amounts capitalized 11.9 9.4 34.2 30.3 45.7 42.1
Income before income taxes 23.6 9.3 134.6 99.1 189.7 149.5
Income taxes 8.5 3.2 48.6 35.0 67.9 50.7
Income from continuing operations 15.1 6.1 86.0 64.1 121.8 98.8
Income from discontinued operations,
net of income taxes - - 15.0 - 15.0 -
Net income 15.1 6.1 101.0 64.1 136.8 98.8
Dividends on preferred stock .1 .1 .3 .3 .5 .4
Earnings applicable to
common stock $ 15.0 $ 6.0 $ 100.7 $ 63.8 $ 136.3 $ 98.4
Average shares of common
stock outstanding 50.0 50.4 50.1 50.8 50.2 51.1
Earnings per average share
of common stock
Continuing operations $ .30 $ .12 $ 1.71 $ 1.26 $ 2.42 $ 1.93
Discontinued operations - - .30 - .30 -
$ .30 $ .12 $ 2.01 $ 1.26 $ 2.72 $ 1.93
Dividends declared per share
of common stock $ .33 $ .32 $ .99 $ .96 $ 1.31 $ 1.275
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
NICOR Inc. Page 3
Consolidated Statement of Cash Flows (Unaudited)
(Millions)
<CAPTION>
Nine months ended Twelve months ended
September 30 September 30
1996 1995 1996 1995
Operating activities
<S> <C> <C> <C> <C>
Net income $ 101.0 $ 64.1 $ 136.8 $ 98.8
Less income from discontinued operations 15.0 - 15.0 -
Income from continuing operations 86.0 64.1 121.8 98.8
Adjustments to reconcile income from continuing operations
to net cash flow provided from continuing operations:
Depreciation 87.2 78.6 120.4 109.9
Deferred income tax expense (benefit) (16.6) (10.8) (9.0) (19.8)
Change in working capital items and other:
Receivables, less allowances 119.6 124.3 (47.7) 5.8
Gas in storage (72.0) 11.1 (76.1) 32.6
Deferred/accrued gas costs (33.7) 17.4 (25.2) (2.5)
Accounts payable (71.3) .5 (20.8) 22.9
Gas refunds due customers (24.2) 40.2 (42.5) 39.3
Other 33.2 (16.6) 54.8 11.4
Net cash flow provided from continuing operations 108.2 308.8 75.7 298.4
Net cash flow provided from (used for) discontinued
operations 1.3 (2.3) .9 (5.5)
Net cash flow provided from operating activities 109.5 306.5 76.6 292.9
Investing activities
Capital expenditures (78.3) (107.1) (128.1) (163.3)
Short-term investments 12.3 13.0 7.5 6.9
Other (2.8) .4 (1.1) .8
Net cash flow used for investing activities (68.8) (93.7) (121.7) (155.6)
Financing activities
Net proceeds from issuing long-term debt 74.3 22.5 123.8 22.5
Disbursements to retire long-term debt (50.0) (62.5) (50.0) (62.5)
Short-term borrowings (repayments), net 3.3 (103.2) 58.9 10.0
Dividends paid (49.5) (49.0) (65.7) (65.5)
Disbursements to reacquire stock (21.1) (31.9) (22.8) (47.2)
Other 4.7 .7 6.2 1.0
Net cash flow provided from (used for) financing
activities (38.3) (223.4) 50.4 (141.7)
Net increase (decrease) in cash and cash equivalents 2.4 (10.6) 5.3 (4.4)
Cash and cash equivalents, beginning of period 6.8 14.5 3.9 8.3
Cash and cash equivalents, end of period $ 9.2 $ 3.9 $ 9.2 $ 3.9
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
NICOR Inc. Page 4
Consolidated Balance Sheet (Unaudited)
(Millions)
<CAPTION>
September 30 December 31 September 30
Assets 1996 1995 1995
Current assets
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 9.2 $ 6.8 $ 3.9
Short-term investments, at cost which
approximates market 7.3 19.6 14.8
Receivables, less allowances of $6.8,
$5.8 and $5.1, respectively 142.1 261.7 94.4
Gas in storage, at last-in, first-out cost 135.0 63.0 58.9
Deferred gas costs 42.4 8.7 17.2
Other 28.4 30.0 45.3
364.4 389.8 234.5
Property, plant and equipment, at cost
Gas distribution 2,946.3 2,886.2 2,840.0
Shipping 234.2 223.8 224.2
Other 1.0 .4 .4
3,181.5 3,110.4 3,064.6
Less accumulated depreciation 1,410.8 1,331.1 1,300.7
1,770.7 1,779.3 1,763.9
Other assets 92.2 90.0 80.8
$ 2,227.3 $ 2,259.1 $ 2,079.2
Liabilities and Capitalization
Current liabilities
Long-term obligations due within one year $ 25.2 $ 50.0 $ 50.0
Short-term borrowings 202.1 198.8 143.2
Accounts payable 235.9 308.4 257.6
Gas refunds due customers - 24.2 42.5
Other 31.3 44.3 28.9
494.5 625.7 522.2
Deferred credits and other liabilities
Deferred income taxes 192.0 210.0 207.2
Regulatory income tax liability 84.5 86.5 87.6
Unamortized investment tax credits 49.2 50.8 51.2
Other 157.5 120.9 114.8
483.2 468.2 460.8
Capitalization
Long-term debt 518.4 468.7 419.1
Preferred stock
Redeemable 8.6 8.8 8.7
Nonredeemable .1 .1 .1
Common equity
Common stock 124.5 125.8 125.8
Paid-in capital 34.6 49.6 49.9
Retained earnings 563.4 512.2 492.6
1,249.6 1,165.2 1,096.2
$ 2,227.3 $ 2,259.1 $ 2,079.2
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
NICOR Inc. Page 5
Notes To The Consolidated Financial Statements (Unaudited)
ACCOUNTING POLICIES
Depreciation for the gas distribution segment is calculated using a
straight-line method for the calendar year. For interim periods,
depreciation is allocated based on gas deliveries. In April 1996, the gas
distribution plant composite depreciation rate increased to 4.1 percent from
3.7 percent.
CASH FLOW INFORMATION
Income taxes paid, net of refunds, and interest paid, net of amounts
capitalized, for the periods ended September 30 were (millions):
Nine months Twelve months
1996 1995 1996 1995
Income taxes paid $55.8 $44.1 $64.6 $56.1
Interest paid 39.7 38.0 43.3 42.5
REGULATORY MATTERS
On April 3, 1996, the Ill.C.C. granted Northern Illinois Gas a $33.7 million
general rate increase, of which $12 million relates to the change in the
company's composite depreciation rate noted above. The order, effective
April 11, 1996, allows the company a rate of return on original-cost rate
base of 9.67 percent, which reflects an 11.13 percent cost of common equity.
The new rate structure will allow Northern Illinois Gas to recover a larger
proportion of its fixed costs during warmer months. The overall result is
that the company's earnings will be less sensitive to the effects of weather
and the seasonal variations in quarterly earnings will be reduced.
In May 1996, the Ill.C.C. denied requests for rehearing filed by several
parties including Northern Illinois Gas. The company and other parties have
subsequently appealed certain aspects of the Ill.C.C.'s order to the Third
District Appellate Court of Illinois.
On August 15, 1996, Northern Illinois Gas filed a performance-based rate
plan with the Ill.C.C. for gas supply costs. The filing was in response to
a recent amendment to the Illinois Public Utilities Act which allows
utilities to propose programs consisting of alternatives to traditional cost
of service regulation. Currently, natural gas supply costs are recovered
from customers without mark-up. Under the proposed program, Northern
Illinois Gas would compare its total annual gas supply costs against a
market-based benchmark, and any difference would be shared between Northern
Illinois Gas and its customers. The Ill.C.C. has up to 11 months to hold
hearings and act on the request.
LONG-TERM DEBT
On August 6, Northern Illinois Gas sold $75 million of 6.45% First Mortgage
Bonds due in 2001. The net proceeds from the sale of the bonds replenished
corporate funds which were used for the March 1996 maturity of $50 million
of 4-1/2% First Mortgage Bonds and for general corporate purposes.
NICOR Inc. Page 6
Notes To The Consolidated Financial Statements (Unaudited)
(Continued)
DISCONTINUED OPERATIONS
In the second quarter of 1996, the company made a positive adjustment of $15
million after-tax to its reserve for discontinued operations. Factors
contributing to the adjustment include the settlement of certain
contingencies at terms more favorable than originally anticipated and
revisions in management's estimate of the remaining discontinued costs
related to contract drilling, oil and gas, inland barging and extractive
operations. The balance of the reserve will continue to be evaluated as the
remaining environmental, legal, tax and other contingencies are resolved.
CONTINGENCIES
The company is involved in legal or administrative proceedings before
various courts and agencies with respect to rates, taxes and other matters.
Current environmental laws require treatment of certain waste materials on
sites owned by NICOR that may have been generated by two barge-cleaning
facilities previously owned and operated by certain discontinued businesses
of the company. NICOR remediated one site in accordance with the approved
closure plan and began the three-year post-closure monitoring period in
1995. The cost of evaluation and cleanup of the other site is currently
estimated to range from $5 million to $15 million. The company is
evaluating whether any of these costs will be recoverable from insurance or
other sources.
Until the early 1950s, manufactured gas facilities were operated in the
Northern Illinois Gas service territory. Manufactured gas is now known to
have created various by-products that may still be present at these sites.
Current environmental laws may require cleanup of these former manufactured
gas plant sites. The company has identified up to 40 properties in its
service territory believed to be the location of such sites. Of these 40
properties, Northern Illinois Gas currently owns 15 and formerly owned or
leased 13. The remaining properties were never owned or leased by the
company. Information has been presented to the Illinois Environmental
Protection Agency regarding preliminary reviews of the company's currently
owned and formerly owned or leased properties. More detailed investigations
are either currently in progress or planned at many of these sites. At
certain sites, the current owners are seeking to allocate cleanup costs to
former owners or lessees, including Northern Illinois Gas.
The results of continued testing and analysis should determine to what
extent remediation is necessary and may provide a basis for estimating any
additional future costs which, based on industry experience, could be
significant. Costs are currently being recovered pursuant to Ill.C.C.
authorization.
On December 20, 1995, Northern Illinois Gas filed suit in the Circuit Court
of Cook County against certain insurance carriers. This suit seeks to
declare the insurance carriers liable under policies in effect primarily
between the years 1954 and 1985 for costs incurred or to be incurred for
environmental cleanup of former manufactured gas plant sites. Presently,
NICOR Inc. Page 7
Notes To The Consolidated Financial Statements (Unaudited)
(Concluded)
CONTINGENCIES (Concluded)
management cannot predict the timing or outcome of this lawsuit. Any
recoveries from such litigation or other sources will be flowed back to the
company's customers.
Although unable to determine the outcome of these contingencies, management
believes that appropriate accruals have been recorded. Final disposition of
these matters is not expected to have a material impact on the company's
financial condition or results of operations.
NICOR Inc. Page 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
OVERVIEW
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the NICOR Inc. 1995 Annual Report on
Form 10-K.
Income from continuing operations for the three-, nine- and twelve-month
periods ended September 30, 1996, rose $9 million to $15.1 million,
$21.9 million to $86 million and $23 million to $121.8 million,
respectively, from the corresponding 1995 periods. Earnings per common
share from continuing operations were $.30, $1.71 and $2.42 compared with
$.12, $1.26 and $1.93, respectively. The increase in each period was due
primarily to higher operating results in the gas distribution segment.
In the second quarter of 1996, NICOR made a positive adjustment of $15
million to its reserve for discontinued operations. Including this
adjustment, NICOR's 1996 net income for the nine- and twelve-month periods
ended September 30, 1996, was $101 million and $136.8 million, respectively.
Earnings per common share were $2.01 and $2.72, respectively. For further
information on this adjustment, see Discontinued Operations on page 6.
Operating income (loss) for the periods ended September 30 by business
segment was (millions):
Three months Nine months Twelve months
1996 1995 1996 1995 1996 1995
Gas distribution $ 31.9 $ 14.3 $155.3 $113.5 $212.5 $166.8
Shipping 4.5 4.5 17.0 15.2 25.1 22.3
Other (1.1) (1.0) (2.9) (2.7) (4.3) (3.7)
$ 35.3 $ 17.8 $169.4 $126.0 $233.3 $185.4
The following summarizes operating income comparisons by business segment:
- - Gas distribution operating income for the three-, nine- and twelve-
month periods increased $17.6 million, $41.8 million and
$45.7 million, respectively. For the three-month period, the
increase was due to the impact of the April 1996 rate case
which included a 2.8 percent general rate increase and rate design
changes which shift certain revenues and earnings from cold-weather
months to warm-weather months. For the nine- and twelve-month
periods, the increase was a result of the rate case and an increase in
deliveries of natural gas, partially offset by higher depreciation.
The positive impact of the rate case and higher deliveries on
the twelve-month period was also partially offset by higher
operating and maintenance expenses.
- - Shipping operating income for the three-month period was unchanged
from a year ago as increased operating revenues relating to an
increase in volumes shipped were offset by higher operating
expenses. For the nine- and twelve-month periods, shipping
NICOR Inc. Page 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
OVERVIEW (Concluded)
operating income increased $1.8 million and $2.8 million,
respectively, as higher revenues, attributable to an increase in
volumes shipped, more than offset higher operating expenses.
Factors contributing to the increase in volumes shipped in each
period include improved economic conditions and market growth in the
Eastern Caribbean and the Virgin Islands, as well as expansion to
new destinations.
RESULTS OF OPERATIONS
Details of various financial and operating information by segment can be
found in the tables on pages 12 and 13. The following summarizes the major
changes in NICOR's revenues and expenses.
Operating revenues increased $63.3 million, $244 million and $314.8 million
for the three-, nine- and twelve-month periods, respectively, from the
corresponding 1995 periods due primarily to higher revenues in the gas
distribution segment. For the three-month period, the increase in the gas
distribution segment was due to higher natural gas supply costs, which are
recovered from customers, and the impact of the rate case. For the
nine- and twelve-month periods, the increase in the gas distribution segment
was due to an increase in deliveries, higher gas costs and the impact of the
rate case. Higher deliveries were attributable to the positive impact
of colder weather, demand growth among existing customers and customer
additions.
Gas distribution margin, defined as operating revenues less cost of gas and
revenue taxes, is shown in the following table for the periods ended
September 30. The improvement in each period's margin was due in large part
to the positive effect of the rate case. The impact of higher
deliveries also contributed to the increase in margin for the nine- and
twelve-month periods. Margin per Mcf delivered for each period rose
primarily as a result of the rate case.
Three months Nine months Twelve months
1996 1995 1996 1995 1996 1995
Gas distribution
margin (Millions) $ 84.1 $ 64.4 $359.8 $306.2 $495.9 $429.6
Margin per Mcf
delivered 1.35 1.00 .93 .86 .89 .86
Operating and maintenance expense increased $12.5 million, $29.3 million and
$41 million for the three-, nine- and twelve-month periods, respectively,
due principally to higher costs in the shipping segment caused primarily by
increased volume-related shore and vessel costs. The twelve-month period
was also impacted by higher administrative and general costs and a higher
bad debt provision in the gas distribution segment.
NICOR Inc. Page 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
RESULTS OF OPERATIONS (Concluded)
Depreciation expense increased in each period due to the change in
the gas distribution plant composite depreciation rate and gas plant
additions. For further information on the change in the plant composite
depreciation rate, see Accounting Policies on page 5.
Other income decreased in each period due to the combined effect of higher
interest on income tax adjustments and the impact of lower investment levels
on interest income.
Interest on debt increased in each period due primarily to higher borrowing
levels.
The effective income tax rate rose to 36 percent from 34.3 percent for the
three-month period. The third quarter 1995 effective tax rate was unusually
low due mainly to adjustments related to prior interim periods. For the
twelve-month period, the effective income tax rate rose to 35.8 percent from
33.9 percent due in large part to a higher state tax provision and less
excess deferred taxes turning around.
FINANCIAL CONDITION
Net cash flow from continuing operations decreased $200.6 million and
$222.7 million for the nine- and twelve-month periods, respectively, due to
increased gas in storage, the timing of gas cost recoveries, a 1995 gas
pipeline refund and a return to normal levels of customer advance payments
in the gas distribution segment. These factors were partially offset by a
favorable $35 million income tax settlement in the second quarter of 1996.
Net cash flow from operations may fluctuate widely from one interim period to
another due to the seasonal nature of NICOR's businesses.
The company generally relies on short-term financing to meet temporary
working capital needs.
NICOR and its gas distribution subsidiary maintain short-term credit
agreements with major domestic and foreign banks. At September 30, 1996,
these agreements, which serve as backup for the issuance of commercial
paper, totaled $278 million, and the company had $202.1 million of
commercial paper outstanding. At September 30, 1996, the unused lines of
credit under these credit agreements were $75.9 million.
On August 6, 1996, Northern Illinois Gas sold $75 million of 6.45% First
Mortgage Bonds due in 2001. The net proceeds from the sale of the bonds
replenished corporate funds which were used for the March 1996 maturity of
$50 million of 4-1/2% First Mortgage Bonds and for general corporate
purposes.
In March 1996, the company completed the $50 million common stock buyback
program initiated in October 1994. During the first quarter of 1996, NICOR
purchased and retired approximately 160,000 common shares at an aggregate
cost of $4.4 million.
NICOR Inc. Page 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
FINANCIAL CONDITION (Concluded)
In June 1996, NICOR announced another stock repurchase program having an
aggregate market value of up to $50 million. The purchases are being made
as market conditions permit through open market transactions. At the end of
the third quarter, NICOR had purchased and retired 357,000 common shares at
an aggregate cost of $11.1 million.
Effective with the dividend paid on May 1, 1996, NICOR's quarterly dividend
on common stock was increased 3.1 percent to 33 cents per share. This
payment represents an annual rate of $1.32 per share, a four-cent increase
over the $1.28 per share established with the May 1, 1995 dividend.
REGULATORY MATTERS
On April 3, 1996, the Ill.C.C. granted Northern Illinois Gas a $33.7
million, 2.8 percent general rate increase effective April 11, 1996. On
August 15, 1996, the company filed a performance-based rate plan with the
Ill.C.C. for gas supply costs. For further information relating to these
items, see Regulatory Matters on page 5.
<TABLE>
NICOR Inc. Page 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
OPERATING STATISTICS
Gas Distribution
Changes in weather can materially affect operating results. Operating revenues, deliveries, weather statistics
and other data are presented below.
<CAPTION>
Three months ended Nine months ended Twelve months ended
September 30 September 30 September 30
1996 1995 1996 1995 1996 1995
Operating revenues (Millions):
Sales
<S> <C> <C> <C> <C> <C> <C> <C>
Residential $ 104.7 $ 72.0 $ 703.9 $ 571.5 $ 982.2 $ 803.6
Commercial 23.9 15.6 187.2 148.2 256.9 210.4
Industrial 3.4 1.6 33.9 24.6 45.1 34.6
132.0 89.2 925.0 744.3 1,284.2 1,048.6
Transportation
Commercial 7.8 6.2 38.7 34.0 55.0 45.8
Industrial 10.7 12.8 40.4 45.3 57.6 58.7
18.5 19.0 79.1 79.3 112.6 104.5
Revenue taxes and other 10.5 9.3 94.2 72.2 118.4 94.0
$ 161.0 $ 117.5 $1,098.3 $ 895.8 $1,515.2 $1,247.1
Deliveries (Bcf):
Sales
Residential 15.5 15.4 166.3 148.5 249.3 210.6
Commercial 3.7 3.6 44.8 38.9 65.2 55.7
Industrial .6 .4 8.9 6.9 12.4 9.8
19.8 19.4 220.0 194.3 326.9 276.1
Transportation
Commercial 6.3 6.4 51.4 40.8 74.6 56.9
Industrial 36.1 38.6 114.9 121.8 158.7 165.4
42.4 45.0 166.3 162.6 233.3 222.3
62.2 64.4 386.3 356.9 560.2 498.4
Gas cost per Mcf sold $ 3.27 $ 2.12 $ 2.94 $ 2.61 $ 2.75 $ 2.58
Weather statistics:
Degree days 84 93 4,088 3,785 6,414 5,562
Percent colder (warmer) than normal (5) 2 4 (4) 5 (9)
Customers at end of period (Thousands):
Sales
Residential 1,670.3 1,641.1
Commercial 139.1 139.1
Industrial 11.4 11.4
1,820.8 1,791.6
Transportation
Commercial 17.9 16.4
Industrial 2.7 2.4
20.6 18.8
1,841.4 1,810.4
</TABLE>
<TABLE>
NICOR Inc. Page 13
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
OPERATING STATISTICS (Concluded)
Shipping
<CAPTION>
Three months ended Nine months ended Twelve months ended
September 30 September 30 September 30
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenues (Millions) $ 50.4 $ 38.5 $ 141.4 $ 115.5 $ 189.5 $ 158.9
Operating income (Millions) $ 4.5 $ 4.5 $ 17.0 $ 15.2 $ 25.1 $ 22.3
TEUs shipped (Thousands)
Southbound 25.6 18.4 70.5 54.2 92.5 75.6
Northbound 4.0 4.0 10.8 11.7 14.8 15.7
Interisland 2.0 1.0 5.2 2.9 7.3 4.0
31.6 23.4 86.5 68.8 114.6 95.3
Revenue per TEU $ 1,517 $ 1,566 $ 1,553 $ 1,593 $ 1,575 $ 1,585
Ports served 28 23
Vessels owned 14 14
</TABLE>
NICOR Inc. Page 14
PART II - Other Information
Item 1. Legal Proceedings
For information concerning legal proceedings, see Regulatory
Matters and Contingencies in Notes to the Consolidated Financial
Statements beginning on page 5, which are incorporated herein by
reference.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 16 filed herewith.
(b) The company did not file a report on Form 8-K during the third
quarter of 1996.
NICOR Inc. Page 15
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NICOR Inc.
Date November 13, 1996 By DAVID L. CYRANOSKI
David L. Cyranoski
Senior Vice President,
Secretary and Controller
NICOR Inc. Page 16
Exhibit Index
Exhibit
Number Description of Document
10.01 NICOR Stock Deferral Plan.
10.02 NICOR 1995 Directors Stock Plan.
27.01 Financial Data Schedule.
NICOR Inc.
Form 10-Q
Exhibit 10.01
NICOR Inc.
STOCK DEFERRAL PLAN
SECTION 1. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. Purpose, History and Effective Date . . . . . . . . .1
1.2. Gender, Number and Defined Terms. . . . . . . . . . .1
1.3. Participation . . . . . . . . . . . . . . . . . . . .1
1.4. Administration. . . . . . . . . . . . . . . . . . . .2
1.5. Additional Terms and Conditions of the Plan . . . . .2
1.6. Employment and Shareholder Status . . . . . . . . . .2
1.7. Source of Payments. . . . . . . . . . . . . . . . . .2
1.8. Nonassignment . . . . . . . . . . . . . . . . . . . .3
1.9. Elections . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Elections to Receive Stock in Lieu of Eligible Cash Awards . . .3
2.1. Election to Receive Stock . . . . . . . . . . . . . .3
2.2. Rules for Stock Payment Elections . . . . . . . . . .3
2.3. Revocation and Cancellation of Stock Payment
Elections . . . . . . . . . . . . . . . . . . . . . .4
2.4. Election Period . . . . . . . . . . . . . . . . . . .4
SECTION 3. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Dividend Equivalents and Deferred Stock Account. . . . . . . . .5
3.1. Dividend Equivalents. . . . . . . . . . . . . . . . .5
3.2. Crediting and Adjustment of Deferred Stock
Accounts. . . . . . . . . . . . . . . . . . . . . . .5
3.3. Number of Stock Units . . . . . . . . . . . . . . . .6
SECTION 4. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Distribution and Deferral. . . . . . . . . . . . . . . . . . . .6
4.1. Distribution and Deferral Elections . . . . . . . . .6
4.2. Changes to a Deferral Election. . . . . . . . . . . .7
4.3. Payment of Deferred Stock Account . . . . . . . . . .7
4.4. Installment Payments. . . . . . . . . . . . . . . . .7
4.5. Payments to Beneficiaries In the Event of Death . . .8
4.6. Termination Date. . . . . . . . . . . . . . . . . . 10
SECTION 5. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Amendment and Termination. . . . . . . . . . . . . . . . . . . 10
APPENDIX A
EXHIBIT A
SECTION 1
General
1.1. Purpose, History and Effective Date. NICOR Inc. (the
"Company") maintains NICOR Inc. 1989 Long-Term Incentive Plan
(the "1989 Plan") which provides certain benefits to key
executives and managerial employees of the Company and its
Subsidiaries (as described in subsection 1.2). The Company and
its Subsidiaries also maintain, and anticipate maintaining in the
future, incentive compensation plans, other than the 1989 Plan,
which provide cash payments of specified dollar amounts to
eligible key executives and managerial employees of the Company
and its Subsidiaries upon the achievement of specified
performance goals during a performance period of at least three
years (a "Long-Term Plan") or a calendar year (an "Annual Plan")
(such Long-Term Plans and Annual Plans being referred to below
collectively as the "Incentive Plans" and individually as an
"Incentive Plan"). In order to further identify the interests of
key executives and managerial employees with those of the
Company's shareholders by increasing such employees' ownership of
Company Stock, the Company has established NICOR INC. STOCK
DEFERRAL PLAN (the "Plan") as set forth herein to permit key
executives and managerial employees who are eligible for a cash
payment under a Long-Term Plan or an Annual Plan to elect to
receive a portion of such payment in Company Stock, in lieu of
cash, and to defer receipt of such stock, all on the terms and
conditions set forth herein. The Plan shall be effective
immediately upon approval of the Compensation Committee of the
Company's Board of Directors (the "Committee"), and the date on
which the Plan is effective shall be referred to herein as the
"Effective Date." The Incentive Plans in effect on the Effective
Date are set forth in Exhibit A.
1.2. Gender, Number and Defined Terms. Where the context
admits, words in any gender shall include any other gender, words
in the singular shall include the plural and the plural shall
include the singular. Except as otherwise specifically provided
herein, or unless the context clearly implies or indicates the
contrary, a word, term or phrase used in the Plan with initial
capital letters shall have the same meaning as when such word,
term or phrase is used in the 1989 Plan. Appendix A contains an
alphabetical listing of all defined terms and the subsections of
the Plan in which they are defined to the extent that they are
not defined by reference to the 1989 Plan.
1.3. Participation. Key executives and managerial
employees of the Company and its Subsidiaries who are eligible to
participate in the 1989 Plan and who are eligible to receive a
cash payment under a Long Term Plan or an Annual Plan, or both,
as such plans may be in effect from time to time on and after the
Effective Date, are eligible to become "Participants" in the Plan
by completing a Stock Payment Election (as described
in subsection 2.1).
1.4. Administration. The authority to manage and control
the operation and administration of the Plan shall be vested in
the Committee. Subject to the conditions and limitations of the
Plan, the Committee shall have the sole and complete authority
and discretion to:
(a) interpret the Plan and to adopt, amend and rescind
administrative guidelines and other rules and
regulations relating to the Plan;
(b) correct any defect or omission and to reconcile any
inconsistency in the Plan, and to remedy any error in
any payment made hereunder; and
(c) make all other determinations and take all other
actions necessary or advisable for the implementation
and administration of the Plan.
The Committee's determinations on matters within its control
shall be conclusive and binding on the Company and all other
persons. Notwithstanding the foregoing, no member of the
Committee shall act with respect to the administration of the
Plan except to the extent consistent with the exempt status of
the Plan and the 1989 Plan under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended ("Rule 16b-3").
1.5. Additional Terms and Conditions of the Plan. Stock
awards under the Plan shall be deemed to be made pursuant to the
Performance Unit provisions of the 1989 Plan, and shall be
subject to the terms, conditions and limitations of the 1989
Plan.
1.6. Employment and Shareholder Status. The Plan will not
give any person the right to remain in the employ of the Company
or any of its Subsidiaries, or any right or claim to any benefits
under the Plan unless such right or claim has specifically
accrued under the terms of the Plan. Participation in the Plan
shall not create any rights in an employee (or any other person)
as a shareholder of the Company until shares of Stock are
registered in the name of the employee (or such other person).
1.7. Source of Payments. Except for Stock actually
delivered pursuant to the Plan, the Plan constitutes only an
unfunded, unsecured promise of the Company to deliver Stock in
the future in accordance with the terms of the Plan.
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1.8. Nonassignment. Neither a Participant's nor any other
person's rights to payments or awards under the Plan are subject
in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by
creditors of the Participant or such other person.
1.9. Elections. Any notice, election or document required
to be filed with the Committee under the Plan will be effective
only if it is filed in such form and at such time as the
Committee may require, and shall be considered properly filed if
delivered or mailed by registered mail, postage prepaid, to the
Committee, in care of the Company, at the Company's principal
executive offices. The Committee may, by advance written notice
to affected persons, revise such notice procedure from time to
time. Any notice required under the Plan may be waived by the
person entitled thereto.
SECTION 2
Elections to Receive Stock in
Lieu of Eligible Cash Awards
2.1. Election to Receive Stock. Subject to the terms and
conditions of the Plan, each executive who is eligible to
participate in the Plan, by filing a written "Stock Payment
Election" with the Committee during the applicable Election
Period (as described in subsection 2.4), may elect to forego
receipt of a portion of the Eligible Cash Awards (as defined
below) to which he is entitled under any Long Term Plan or Annual
Plan, or both, and to receive in lieu thereof shares of Stock
under the Plan at the time and in the manner set forth below.
Subject to the terms and conditions of the Plan, a Participant
who has filed a Stock Payment Election with respect to any
Eligible Cash Award shall have credited to his Deferred Stock
Account (as described in subsection 3.2), at the time set forth
in subsection 3.2, the number of "Stock Units" determined in
accordance with subsection 3.3 based on the amount of the
Eligible Cash Award that he has elected to forego, and shall
receive shares of Stock equal to the number of Stock Units so
credited to him at the date determined in accordance with
Section 4. For purposes of the Plan, the term "Eligible Cash
Award" means the dollar amount payable under a Long Term Plan or
an Annual Plan at the end of the applicable performance period
under such plan, which amount would, but for a Participant's
election hereunder, be payable to the Participant in cash.
2.2. Rules for Stock Payment Elections. A Stock Payment
Election shall specify the Eligible Cash Award and the Incentive
Plan or Incentive Plans to which it applies, and shall be valid
only if it is filed with the Committee on or before the last day
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of the Election Period for the Eligible Cash Award to which it
relates. In no event shall the portion of an Eligible Cash Award
which is to be converted to Stock Units and credited to the
Participant's Deferred Stock Account exceed the lesser of (a) the
amount specified by the Participant in his Stock Payment
Election, or (b) 50 percent of the amount of the Eligible Cash
Award.
2.3. Revocation and Cancellation of Stock Payment
Elections. Except as otherwise specifically provided below in
this subsection 2.3, a Stock Payment Election that is filed with
respect to any Eligible Cash Award shall be irrevocable after the
Election Period for such award expires, and shall remain in
effect with respect to Eligible Cash Awards under succeeding Long
Term Plans or Annual Plans, as the case may be, unless and until
it is revised or revoked. Any such revision or revocation shall
be in writing, signed by the Participant and filed with the
Committee, and shall specify the Incentive Plan and the Eligible
Cash Award to which it relates. Any revocation or revision shall
be effective with respect to an Eligible Cash Award only if it
filed with the Committee on or before the last day of the
Election Period for that award. Notwithstanding any provision of
the Plan to the contrary, a Stock Payment Election shall be
automatically cancelled on the Participant's Termination Date (as
defined in subsection 4.6) and shall be without effect
thereafter, except with respect to Eligible Cash Awards that have
been converted to Stock Units and credited to the Participant's
Deferred Stock Account under the Plan before such Termination
Date.
2.4. Election Period. For purposes of the Plan, the
"Election Period" with respect to an Eligible Cash Award under an
Annual Plan or a Long Term Plan shall be the period beginning on
the date on which the Committee approves such plan (and, to the
extent applicable, the performance targets, the number and
identity of recipients of performance units and any other
material terms and conditions of such plan as are subject to the
approval of the Committee) for a calendar year or longer
performance period designated thereunder, and ending 30 days
after the date of Committee approval or the June 30th immediately
following such approval date, whichever is earlier.
Notwithstanding the foregoing, the Election Period applicable to
Eligible Cash Awards under each of the following Incentive Plans
shall be the period beginning on the Effective Date and ending on
June 30, 1996: the 1994 Long Term Incentive Plan, the 1995 Long
Term Incentive Plan consisting of a three-year performance
period, the 1995 Long Term Plan consisting of a five-year
performance period, the 1996 Annual Plan and the 1996 Long Term
Plan.
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SECTION 3
Dividend Equivalents and Deferred Stock Account
3.1. Dividend Equivalents. As of each Stock dividend date,
a Participant who is credited with Stock Units under the Plan
shall be entitled to receive an amount equal to the amount of the
dividends that would have been paid by the Company on the number
of shares of Stock equal to the number of Share Units credited to
the Participant's Deferred Stock Account on the record date for
such dividend ("Dividend Equivalents"), which amount shall be
either (a) paid to the Participant in cash as soon as practicable
after the dividend payment date, or (b) converted to Stock Units
and credited to the Participant's Deferred Stock Account in
accordance with the provisions of subsection 3.2, as elected by
the Participant in writing at the time that he files his Stock
Payment Election. If no election is made by a Participant,
Dividend Equivalents shall be paid in cash as soon as practicable
after each dividend payment date. Any additional Stock Units
credited to a Participant's Deferred Stock Account by reason of
an election under this subsection 3.1 shall be distributed at the
same time as the Stock Units to which such additional units are
attributable.
3.2. Crediting and Adjustment of Deferred Stock Accounts.
A bookkeeping account shall be established and maintained by the
Company in the name of each Participant under the Plan (the
"Deferred Stock Account"). A Participant's Deferred Stock
Account shall be adjusted as follows:
(a) as of the first business day following the end of each
performance period, the Participant's Deferred Stock
Account shall be credited with the number of Stock
Units (and any fractional portion thereof) determined
in accordance with subsection 3.3 representing the
portion, if any, of an Eligible Cash Award that is
subject to a Stock Payment Election;
(b) as of the dividend payment date for any dividend paid
on Stock, the Deferred Stock Account of each
Participant who has elected to convert his Dividend
Equivalents into Stock Units shall be credited with
that number of additional Stock Units which is equal to
the number obtained by multiplying (i) the number of
Stock Units credited to the Participant's Deferred
Stock Account as of the dividend record date, by (ii)
the amount of the cash dividend or the fair market
value (as determined by the Committee) of any dividend
payable in kind on a share of Stock as of that date,
and by dividing that product by the Fair Market Value
of a share of Stock on the dividend payment date;
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(c) as of the date on which shares of Stock are distributed
to or on behalf of the Participant in accordance with
Section 4, the Participant's Deferred Stock Account
shall be charged with an equal number of Stock Units;
and
(d) in the event of any merger, consolidation,
reorganization, recapitalization, spinoff, stock split,
reverse stock split, rights offering, exchange or other
change in the corporate structure or capitalization of
the Company affecting the Stock, each Participant's
Deferred Stock Account shall be equitably adjusted in
such manner as the Committee shall determine in its
sole judgment.
3.3. Number of Stock Units. With respect to any Eligible
Cash Award, the number of Stock Units (and fractional portions
thereof) to be credited to a Participant's Deferred Stock Account
shall be equal to:
(a) the dollar amount of such Eligible Cash Award which is
subject to a Stock Payment Election, if any, and which
would have been paid to the Participant in cash but for
such election;
DIVIDED BY:
(b) the Fair Market Value of a share of Stock on the first
business day following the end of the performance
period to which such Eligible Cash Award relates.
SECTION 4
Distribution and Deferral
4.1. Distribution and Deferral Elections. Subject to the
following provisions of this Section 4, the Stock Units credited
to a Participant's Deferred Stock Account with respect to any
Eligible Cash Award, together with any additional Stock Units
credited with respect to such units by reason of an election
under subsection 3.1 (relating to Dividend Equivalents), shall be
distributed as soon as practicable (but not more than 90 days)
after the last day of the deferral period below applicable to
such award. Except as otherwise specifically provided in this
Section 4, the last day of the deferral period with respect to an
Eligible Cash Award shall be the date selected by the Participant
in a written "Deferral Election" filed with the Committee during
the Election Period applicable to such award, which date shall
be:
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(a) the third (or later) anniversary of the last day of the
performance period to which the Eligible Cash Award
relates; provided, however, that if the Participant's
Termination Date occurs before the date selected by the
Participant under this paragraph (a), the last day of
the deferral period shall be his Termination Date; or
(b) the Participant's Termination Date.
4.2. Changes to a Deferral Election. Except as provided
below in this Section 4, a Deferral Election shall be irrevocable
with respect to an Eligible Cash Award after the Election Period
applicable to such award expires, and shall remain in effect with
respect to awards under succeeding Long Term Plans or Annual
Plans, as the case may be, until revoked or revised. Any such
revocation or revision shall be in writing, signed by the
Participant and filed with the Committee, and shall specify the
Incentive Plan and the Eligible Cash Award to which it relates.
Any such revocation or revision shall be effective with respect
to an Eligible Cash Award only if it is filed on or before the
last day of the Election Period for such award.
4.3. Payment of Deferred Stock Account. Except as
otherwise specifically provided below in this Section 4, the
Stock Units to be distributed at any date shall be distributed to
the Participant or, in the event of his death, to his Beneficiary
(as described in subsection 4.5), in whole shares of Stock and
cash in lieu of any fractional share of Stock, determined as
follows:
(a) the number of shares of Stock to be distributed shall
be equal to the number determined by rounding to the
next lower integer the number of Stock Units to be
distributed; and
(b) any fractional portion of a Stock Unit shall be
distributed in cash in an amount determined by
multiplying such fractional portion by the Fair Market
Value of a share of Stock on the date the shares of
Stock are registered in the name of the Participant or
Beneficiary.
4.4. Installment Payments. A Participant who has a Stock
Deferral Election in effect pursuant to which the distribution of
any Stock Units credited to his Deferred Stock Account is
deferred to his Termination Date may elect to have such Stock
Units distributed to him (or, in the event of his death, to his
Beneficiary) in annual installments (not exceeding 15), in lieu
of a single payment, subject to the following:
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(a) If a Participant has an installment payment election in
effect on his Termination Date, the first installment
shall be distributed as soon as practicable (but not
more than 90 days) after the Participant's Termination
Date, followed by succeeding installments to be
distributed not more than 90 days after the first
business day in each calendar year following the
calendar year in which his Termination Date occurs,
until the remaining installment payments are exhausted.
(b) An election under this subsection 4.4 to have Stock
Units distributed in installments, and any revocation
of such an election, shall be effective only if it is
filed with the Committee, in writing, at least 12
months prior to the Participant's Termination Date, and
any such election (or revocation of a prior election)
filed less than 12 months before such termination shall
be without effect.
(c) If a Participant has filed an installment payment
election in accordance with this subsection 4.4, the
number of shares of Stock to be distributed in each
installment shall be the number of shares determined by
rounding to the next lower integer the product of:
(i) the number of Stock Units then credited to the
Participant's Deferred Stock Account, multiplied
by
(ii) a fraction, the numerator of which is one and the
denominator of which is the number of remaining
installments (including such payment).
The value (determined by the Committee based on the
Fair Market Value of a share of Stock on the date on
which the last installment payment is made) of any
fractional Stock Unit remaining after all distributions
have been made to the Participant shall be distributed
to or on behalf of the Participant in cash with the
last installment payment.
4.5. Payments to Beneficiaries In the Event of Death. If a
Participant dies before complete payment of his Deferred Stock
Account, the Stock Units credited to his Deferred Stock Account
shall be distributed to his Beneficiary in accordance with the
following:
(a) Subject to the provisions of paragraph (b) next below,
the Participant may direct that any Stock Units
credited to his Deferred Stock Account at his death be
distributed to his Beneficiary either:
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(i) in a lump sum payment as soon as practicable after
the Participant's death; or
(ii) in annual installments (not exceeding 15) in a
manner comparable to that set forth in subsection
4.4.
An election under this paragraph shall be made by the
Participant in a Beneficiary designation form filed
with the Committee before the Participant's death.
(b) If the Participant dies after installment payments have
commenced under subsection 4.4, any remaining Stock
Units shall be distributed to his Beneficiary on or as
soon as practicable after the date on which such units
would have been distributed to the Participant in
accordance with the payment schedule in effect at his
death.
(c) Notwithstanding the foregoing provisions of this
subsection 4.5, the Committee, in its sole discretion,
may accelerate the distribution of Stock Units to any
Beneficiary.
(d) Pending complete distribution of all amounts to which a
Participant is entitled under the Plan, the
Participant's Deferred Stock Account shall continue to
be adjusted in accordance with subsection 3.2 of the
Plan, and Dividend Equivalents payable with respect to
Stock Units credited to the Participant's Deferred
Stock Account shall be paid in cash to the
Participant's Beneficiary or credited to the
Participant's Deferred Stock Account as additional
Stock Units in accordance with the election, if any,
made by the Participant and filed with the Committee
before his death in accordance with subsection 3.1.
For purposes of the Plan, a Participant's "Beneficiary" is any
legal or natural person or persons that the Participant
designates in a form which is provided for that purpose by the
Committee and is filed with the Committee prior to the
Participant's death. A Beneficiary designation shall be
effective when it is filed with the Committee in accordance with
the preceding sentence, and shall supersede any Beneficiary
designation filed earlier. If more than one Beneficiary has been
designated, the balance in the Participant's Deferred Stock
Account shall be distributed to each such Beneficiary per capita
(with cash distributed in lieu of any fractional share of Stock).
If the Participant fails to file a Beneficiary designation or if
no Beneficiary survives the Participant, the Participant's
Beneficiary shall be the Participant's estate.
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4.6. Termination Date. A Participant's Termination Date is
the date on which his employment with the Company and all of its
subsidiaries terminates for any reason, including retirement,
death, disability, voluntary resignation or discharge.
SECTION 5
Amendment and Termination
While the Company expects and intends to continue the Plan,
the Board of Directors of the Company reserves the right, at any
time and in any way, to amend, suspend or terminate the Plan;
provided, however, that no amendment, suspension or termination
shall:
(a) be made without shareholder approval to the extent such
approval is required by law, agreement or the rules of
any exchange or automated quotation system upon which
the Stock is listed or quoted;
(b) materially alter or impair the rights of a Participant
under the Plan without the consent of the Participant
with respect to Stock Units already credited hereunder;
or
(c) make any change that would disqualify the Plan or any
other plan of the Company intended to be so qualified
from the exemption provided by Rule 16b-3.
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APPENDIX A
Defined Terms
1.1 Annual Plan
4.5 Beneficiary
1.1 Committee
1.1 Company
4.1 Deferral Election
3.2 Deferred Stock Account
3.1 Dividend Equivalents
1.1 Effective Date
2.4 Election Period
2.1 Eligible Cash Award
The 1989 Plan Fair Market Value
1.1 Incentive Plan(s)
1.1 Long Term Plan(s)
1.3 Participant
1.4 Rule 16b-3
The 1989 Plan Stock
2.1 Stock Payment Election
1.1 Stock Units
The 1989 Plan Subsidiaries
4.6 Termination Date
1.1 The 1989 Plan
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EXHIBIT A
1. NICOR Inc. 1989 Long-Term Incentive Plan
2. 1994 Long-Term Incentive Program
3. 1995 Long-Term Incentive Program
A. Three-Year Program
B. Five-Year Program
4. 1996 Long-Term Incentive Program
5. 1996 Annual Bonus Plans
A. NICOR Annual Bonus
B. NI-Gas Annual Bonus
C. Birdsall Annual Bonus
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NICOR Inc.
Form 10-Q
Exhibit 10.02
NICOR Inc. 1995
DIRECTORS STOCK PLAN
TABLE OF CONTENTS
SECTION 1. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Purpose. . . . . . . . . . . . . . . . . . . . 1
1.2. Plan Administration. . . . . . . . . . . . . . 1
1.3. Applicable Law . . . . . . . . . . . . . . . . 1
SECTION 2. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AWARDS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. General. . . . . . . . . . . . . . . . . . . . 1
2.2. Definitions. . . . . . . . . . . . . . . . . . 2
SECTION 3. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
OPERATION AND ADMINISTRATION. . . . . . . . . . . . . . . 3
3.1. Effective Date . . . . . . . . . . . . . . . . 3
3.2. Shares Subject to Plan . . . . . . . . . . . . 3
3.3. Adjustments to Shares. . . . . . . . . . . . . 3
3.4. Limit on Distribution. . . . . . . . . . . . . 3
SECTION 4. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . 3
i
NICOR 1995
DIRECTORS STOCK PLAN
SECTION 1
GENERAL
1.1. Purpose. The NICOR Inc. 1995 Directors Stock Plan
(the "Plan") has been established by NICOR Inc. (the "Company")
to promote the interests of the Company and its stockholders by
enhancing the Company's ability to attract and retain the
services of experienced and knowledgeable directors and by
encouraging such directors to acquire an increased proprietary
interest in the Company.
1.2. Plan Administration. The authority to control and
manage the operation and administration of the Plan shall be
vested in the Committee on Directors of the Board of Directors of
the Company (the "Committee"), whose decisions on all matters
regarding the Plan shall be final.
1.3. Applicable Law. The Plan shall be construed and
administered in accordance with the laws of the State of
Illinois.
SECTION 2
AWARDS
2.1. General.
(a) As of the Award Date for each Plan Year, each Director who
is an Eligible Director both on the first day of that Plan
Year and on such Award Date shall be granted a "Stock Award"
for the year of 300 shares of common stock of the Company
("Stock"), plus a "Cash Distribution" equal to the Fair
Market Value of such 300 share award, with the Fair Market
Value determined as of the Award Date. A Director shall be
fully vested in his Stock Award and Cash Distribution upon
receipt.
(b) If a Director becomes an Eligible Director during a Plan
Year, on a date other than the first day of the Plan Year,
such Director shall not be eligible for a Stock Award for
the year. Instead, he shall receive cash equal to the sum
of the Fair Market Value of the Stock Award as of the Award
Date, plus the Cash Distribution for the year, subject to a
pro-rata reduction to reflect the portion of the Plan Year
prior to the date on which he becomes an Eligible Director.
(c) If a Director ceases to be an Eligible Director during a
Plan Year for any reason and prior to the Award Date for the
year, he shall be entitled to no Stock Award or Cash
Distribution for the year; provided, however, that a
Director will not fail to receive a Stock Award or a Cash
Distribution under this paragraph (c) if he ceases to be a
Director by reason of death or Disability.
2.2. Definitions. The following terms used in the Plan
shall be defined as follows:
(a) The term "Award" shall mean a Cash Distribution or a Stock
Award granted to a Director under the Plan.
(b) The "Award Date" shall be the first business day of the
fifth full calendar month following the first day of the
Plan Year.
(c) The "Board" shall be the Board of Directors of the Company.
A "Director" is a member of the Board, and each Director who
is not an employee of the Company or any Related Company
shall be an "Eligible Director".
(d) A Director shall be considered to have a "Disability" during
the period in which he is unable, by reason of a medically
determinable physical or mental impairment, to engage in any
substantial gainful activity, which condition, in the
opinion of a physician selected by the Committee, is
expected to have a duration of not less than 120 days.
(e) The "Fair Market Value" of a share of Stock as of any date
shall be the closing market composite price for such Stock
as reported for the New York Stock Exchange - Composite
Transactions on that date or, if Stock is not traded on that
date, on the next preceding date on which Stock was traded.
(f) The "Plan Year" is the period (i) beginning on the date on
which members of the Board begin their yearly term as Board
members following the election of Directors at the Company's
annual stockholders meeting and (ii) ending on the day
immediately prior to the first day of the following Plan
Year. The first Plan Year shall begin on the Effective
Date.
(g) A "Related Company" is any corporation during any period in
which it is a Subsidiary, or during any period in which it
directly or indirectly owns 50% or more of the total
combined voting power of all classes of stock of the Company
that are entitled to vote. A "Subsidiary" is any
corporation during any period in which 50% or more of the
total combined voting power of all classes of stock entitled
to vote is owned, directly or indirectly, by the Company.
2
SECTION 3
OPERATION AND ADMINISTRATION
3.1. Effective Date. The Plan shall be effective as of the
"Effective Date", which is the date on which Directors begin
their yearly term of office on the Board following their election
at the Company's 1995 annual stockholders meeting.
3.2. Shares Subject to Plan. The shares of Stock with
respect to which Stock Awards may be made under the Plan shall be
authorized and unissued shares, Treasury shares, or issued and
outstanding shares purchased in the market for that purpose.
3.3. Adjustments to Shares. If the Company shall effect
any subdivision or consolidation of shares of Stock or other
capital readjustment, payment of stock dividend, stock split,
combination of shares or recapitalization or other increase or
reduction of the number of shares of Stock outstanding without
receiving compensation therefor in money, services or property,
then the Committee shall adjust the number of shares of Stock
subject to future grant.
3.4. Limit on Distribution. Distribution of shares of
Stock or other amounts under the Plan shall be subject to the
following:
(a) Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Stock under
the Plan or make any other distribution of benefits under
the Plan unless such delivery or distribution would comply
with all applicable laws and the applicable requirements of
any securities exchange or similar entity.
(b) To the extent that the Plan provides for issuance of
certificates to reflect the transfer of shares of Stock, the
transfer of such shares may, at the direction of the
Committee, be effected on a non-certificated basis, to the
extent not prohibited by the provisions of Rule 16b-3,
applicable local law, the applicable rules of any stock
exchange, or any other applicable rules.
SECTION 4
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan,
provided that no amendment or termination may adversely affect
the rights of any Director or beneficiary under any Award made
under the Plan prior to the date such amendment or termination is
adopted by the Board. Notwithstanding the provisions of this
Section 4, in no event shall the provisions of the Plan relating
3
to Awards under the Plan be amended more than once every six
months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act, or the rules thereunder; provided, however, that
the limitation set forth in this sentence shall be applied only
to the extent required under Securities and Exchange Commission
Rule 16b-3(c)(2)(ii)(B) or any successor provision thereof.
4
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME, THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1659
<OTHER-PROPERTY-AND-INVEST> 112
<TOTAL-CURRENT-ASSETS> 364
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 92
<TOTAL-ASSETS> 2227
<COMMON> 125
<CAPITAL-SURPLUS-PAID-IN> 35
<RETAINED-EARNINGS> 563
<TOTAL-COMMON-STOCKHOLDERS-EQ> 723
9
0
<LONG-TERM-DEBT-NET> 496
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 23
<COMMERCIAL-PAPER-OBLIGATIONS> 202
<LONG-TERM-DEBT-CURRENT-PORT> 25
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 749
<TOT-CAPITALIZATION-AND-LIAB> 2227
<GROSS-OPERATING-REVENUE> 1258
<INCOME-TAX-EXPENSE> 49
<OTHER-OPERATING-EXPENSES> 1088
<TOTAL-OPERATING-EXPENSES> 1137
<OPERATING-INCOME-LOSS> 121
<OTHER-INCOME-NET> (1)
<INCOME-BEFORE-INTEREST-EXPEN> 120
<TOTAL-INTEREST-EXPENSE> 34
<NET-INCOME> 101<F1>
0
<EARNINGS-AVAILABLE-FOR-COMM> 101
<COMMON-STOCK-DIVIDENDS> 50
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 110
<EPS-PRIMARY> 2.01<F2>
<EPS-DILUTED> 0
<FN>
<F1>NET INCOME CONSISTS OF INCOME FROM CONTINUING OPERATIONS OF $86 MILLION
AND INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES, OF
$15 MILLION.
<F2>EARNINGS PER AVERAGE SHARE OF COMMON STOCK CONSISTS OF $1.71 FROM
CONTINUING OPERATIONS AND $.30 FROM DISCONTINUED OPERATIONS.
</FN>
</TABLE>
