UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
I.R.S.
Employer
Commission Registrant, State of Incorporation, Identification
File Number Address and Telephone Number Number
- ---------------- ------------------------------------- ---------------
1-7297 Nicor Inc. 36-2855175
(An Illinois Corporation)
1844 Ferry Road
Naperville, Illinois 60563-9600
(630) 305-9500
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 April 30, 2000, were
46,447,808.
<PAGE>
Nicor Inc. Page i
Table of Contents
Part I - Financial Information
Item 1. Financial Statements (Unaudited) ............................... 1
Consolidated Statement of Income:
Three months ended
March 31, 2000 and 1999 ....................................... 2
Consolidated Statement of Cash Flows:
Three months ended
March 31, 2000 and 1999 ....................................... 3
Consolidated Balance Sheet:
March 31, 2000 and 1999, and
December 31, 1999 ............................................. 4
Notes to the Consolidated Financial Statements ................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................... 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk ..... 12
Part II - Other Information
Item 1. Legal Proceedings .............................................. 12
Item 6. Exhibits and Reports on Form 8-K ............................... 12
Signature ...................................................... 13
Exhibit Index .................................................. 14
Glossary
Degree day.....The extent to which the daily average temperature falls
below 65 degrees Fahrenheit. Normal weather for Nicor Gas'
service territory is about 6,100 degree days.
ICC............Illinois Commerce Commission, the agency that regulates
investor-owned Illinois utilities.
Mcf, Bcf .....Thousand cubic feet, billion cubic feet.
PBR............Performance-based rate, a plan that provides economic
incentives based on performance.
TEU............Twenty-foot equivalent unit, a measure of volume in
containerized shipping equal to one 20-foot-long container.
<PAGE>
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. Results for the
interim periods presented are not necessarily indicative of the results to be
expected for the full fiscal year due to seasonal and other factors.
Nicor Inc. Page 2
- -------------------------------------------------------------------------------
Consolidated Statement of Income (Unaudited)
(millions, except per share data)
Three months ended
March 31
--------------------
2000 1999
--------- ---------
Operating revenues $ 659.3 $ 576.4
--------- ---------
Operating expenses
Cost of gas 390.2 326.0
Operating and maintenance 94.3 86.6
Depreciation 56.9 55.1
Taxes, other than income taxes 47.7 43.3
--------- ---------
589.1 511.0
--------- ---------
Operating income 70.2 65.4
Other income (expense), net 2.4 6.7
--------- ---------
Income before interest on debt and income taxes 72.6 72.1
Interest on debt, net of amounts capitalized 12.3 12.0
--------- ---------
Income before income taxes 60.3 60.1
Income taxes 21.5 21.1
--------- ---------
Net income 38.8 39.0
Dividends on preferred stock .1 .1
--------- ---------
Earnings applicable to common stock $ 38.7 $ 38.9
========= =========
Average shares of common stock
Basic 46.7 47.5
Diluted 46.8 47.6
Earnings per average share of common stock
Basic $ .83 $ .82
Diluted .83 .82
Dividends declared per share of common stock $ .415 $ .390
The accompanying notes are an integral part of this statement.
Nicor Inc. Page 3
- -------------------------------------------------------------------------------
Consolidated Statement of Cash Flows (Unaudited)
(millions)
Three months ended
March 31
--------------------
2000 1999
--------- ---------
Operating activities
Net income $ 38.8 $ 39.0
Adjustments to reconcile net income to net cash flow
provided from operating activities:
Depreciation 56.9 55.1
Deferred income tax expense 3.6 4.2
Change in assets and liabilities:
Receivables, less allowances 83.1 1.0
Gas in storage 10.6 97.6
Deferred/accrued gas costs 26.1 10.0
Accounts payable (57.6) (67.3)
Temporary LIFO liquidation 111.1 67.4
Postretirement benefits (7.3) (3.7)
Other 35.7 15.6
--------- ---------
Net cash flow provided from operating activities 301.0 218.9
--------- ---------
Investing activities
Capital expenditures (34.3) (28.4)
Short-term investments (3.1) 26.7
Other (1.5) 4.3
--------- ---------
Net cash flow provided from (used for)
investing activities (38.9) 2.6
--------- ---------
Financing activities
Net proceeds from issuing long-term debt 49.9 100.7
Disbursements to retire long-term debt (50.2) (102.7)
Short-term borrowings (repayments), net (246.3) (173.9)
Dividends paid (18.4) (17.7)
Disbursements to reacquire stock (10.0) (2.4)
Other 1.3 (.1)
--------- ---------
Net cash flow used for financing activities (273.7) (196.1)
--------- ---------
Net increase (decrease) in cash and cash equivalents (11.6) 25.4
Cash and cash equivalents, beginning of period 42.5 13.0
--------- ---------
Cash and cash equivalents, end of period $ 30.9 $ 38.4
========= =========
Supplemental information
Income taxes paid, net of refunds $ - $ -
Interest paid, net of amounts capitalized 15.1 14.9
The accompanying notes are an integral part of this statement.
Nicor Inc. Page 4
- -------------------------------------------------------------------------------
Consolidated Balance Sheet (Unaudited)
(millions)
March 31 December 31 March 31
2000 1999 1999
----------- ----------- ----------
Assets
Current assets
Cash and cash equivalents $ 30.9 $ 42.5 $ 38.4
Short-term investments, at cost which
approximates market 32.8 29.7 29.1
Receivables, less allowances of $9.2,
$7.1 and $9.2, respectively 276.7 359.8 263.0
Gas in storage 20.4 31.0 7.9
Deferred gas costs - 15.9 -
Other 32.0 29.1 27.8
----------- ----------- ----------
392.8 508.0 366.2
----------- ----------- ----------
Property, plant and equipment, at cost
Gas distribution 3,223.4 3,200.3 3,131.8
Shipping 287.6 280.8 264.7
Other 2.0 2.0 1.7
----------- ----------- ----------
3,513.0 3,483.1 3,398.2
Less accumulated depreciation 1,801.3 1,747.9 1,693.8
----------- ----------- ----------
1,711.7 1,735.2 1,704.4
----------- ----------- ----------
Other assets 201.4 208.6 174.6
----------- ----------- ----------
$ 2,305.9 $ 2,451.8 $ 2,245.2
=========== =========== ==========
Liabilities and capitalization
Current liabilities
Long-term obligations due within one year $ 74.2 $ 74.2 $ 51.2
Short-term borrowings 97.9 344.2 60.6
Accounts payable 224.8 282.4 203.0
Temporary LIFO liquidation 111.1 - 67.4
Accrued gas costs 10.2 - 39.9
Other 63.8 44.9 62.2
----------- ----------- ----------
582.0 745.7 484.3
----------- ----------- ----------
Deferred credits and other liabilities
Deferred income taxes 273.1 266.6 244.8
Regulatory income tax liability 73.8 74.8 77.6
Unamortized investment tax credits 42.3 42.7 43.6
Other 94.3 91.9 102.9
----------- ----------- ----------
483.5 476.0 468.9
----------- ----------- ----------
Capitalization
Long-term debt 435.8 436.1 508.6
Preferred stock 6.3 6.3 6.3
Common equity
Common stock 116.5 117.2 118.6
Retained earnings 681.8 670.5 658.5
----------- ----------- ----------
1,240.4 1,230.1 1,292.0
----------- ----------- ----------
$ 2,305.9 $ 2,451.8 $ 2,245.2
=========== =========== ==========
The accompanying notes are an integral part of this statement.
<PAGE>
Nicor Inc. Page 5
Notes to the Consolidated Financial Statements (Unaudited)
ACCOUNTING POLICIES
Weather insurance. On an interim basis, estimated weather insurance benefits are
recorded based on a comparison of year-to-date degree days to insured degree
days for the same period. First quarter operating revenue includes $6.9 million
of estimated insurance benefits that will partially reverse if the weather
remains normal for the remainder of the year.
Depreciation. 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.
Gas in storage. The gas distribution segment's inventory is carried at cost on a
last-in, first-out (LIFO) method on a calendar-year basis. For interim periods,
the difference between current replacement cost and the LIFO cost for quantities
of gas temporarily withdrawn from storage is recorded in cost of gas and in
current liabilities as a temporary LIFO liquidation.
Nicor's wholesale gas marketing business carries its inventory at market value.
BUSINESS SEGMENT INFORMATION
Financial data by business segment is presented below:
Three months ended
March 31
-------------------
(millions) 2000 1999
--------- ---------
Operating revenues
Gas distribution $ 573.6 $ 512.6
Shipping 59.3 53.8
Other Nicor ventures 26.5 10.0
Corporate and eliminations (.1) -
--------- ---------
$ 659.3 $ 576.4
========= =========
Operating income (loss)
Gas distribution $ 65.0 $ 61.6
Shipping 5.6 4.4
Other Nicor ventures (.1) .2
Corporate and eliminations (.3) (.8)
--------- ---------
$ 70.2 $ 65.4
========= =========
Nicor Inc. Page 6
Notes to the Consolidated Financial Statements (Unaudited) (Concluded)
PERFORMANCE-BASED RATE PLAN
On January 1, 2000, Nicor Gas' performance-based rate plan for natural gas costs
went into effect. Under the PBR, Nicor Gas' total gas supply costs will be
compared to a market-sensitive benchmark. Savings and losses relative to the
benchmark will be shared equally with customers. After two years, the plan will
be subject to ICC review.
Results of the company's PBR plan are determined annually. On an interim basis,
the company records an estimate of results attributable to the period. In the
first quarter, Nicor recorded $1.2 million of estimated PBR results as operating
revenue.
LONG-TERM DEBT
In January 2000, Nicor Gas issued $50 million of adjustable rate unsecured notes
due in 2001 at an initial rate of 6.11% to fund the redemption of $50 million of
unsecured notes at 5.065% that matured in January 2000.
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 may require cleanup of certain former manufactured
gas plant sites. To date, Nicor Gas has identified more than 40 properties for
which it may, in part, be responsible. The majority of these properties are not
presently owned by the company. Information regarding preliminary site reviews
has been presented to the Illinois Environmental Protection Agency, which
oversees the company's investigations and remedial actions. More detailed
investigations and remedial activities have either been completed, are in
progress or are being planned at many of these sites. The results of continued
testing and analysis should determine to what extent additional remediation is
necessary and may provide a basis for estimating any additional future costs
which, based on industry experience, could be significant. In accordance with
ICC authorization, the company has been recovering these costs from its
customers.
On December 20, 1995, Nicor Gas filed suit in the Circuit Court of Cook County
against certain insurance carriers seeking recovery of environmental cleanup
costs of certain former manufactured gas plant sites. Nicor Gas has reached a
settlement with one of the insurance carriers. In February 2000, the court
dismissed the company's case on summary judgment motions by certain defendants.
The company filed an appeal in March 2000. Management cannot predict the outcome
of the lawsuit against the remaining insurance carriers. Any recoveries will be
refunded 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.
<PAGE>
Nicor Inc. Page 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the Nicor 1999 Annual Report on Form 10-K.
SUMMARY
Nicor's first quarter 2000 diluted earnings per common share were $.83 compared
to $.82 in 1999. Operating income rose to $70.2 million from $65.4 million a
year ago, but net income for the quarter was essentially unchanged at $38.8
million. Improvements in gas distribution and shipping operating results were
offset by reductions in nonoperating items. The increase in earnings per share
was due to stock repurchases.
Operating income. Operating income (loss) by major business segment is presented
below:
Three months ended
March 31
-------------------
(millions) 2000 1999
--------- ---------
Gas distribution $ 65.0 $ 61.6
Shipping 5.6 4.4
Corporate and other (.4) (.6)
--------- ---------
$ 70.2 $ 65.4
========= =========
The following summarizes operating income comparisons for major business
segments:
o Gas distribution operating income increased to $65 million from $61.6 million
a year ago. The increase in operating income reflects the positive effect of
customer additions and contributions from the performance-based rate plan.
Although weather was 10 percent warmer than last year, its adverse impact on
operating results was mitigated by the company's weather insurance policy.
o Containerized shipping operating income increased to $5.6 million from $4.4
million a year ago. The increase was due to improved pricing and higher
volumes shipped.
Nonoperating items. Other income decreased to $2.4 million from $6.7 million a
year ago. Improved results from Nicor's equity interest in a nonregulated retail
energy services venture and higher interest income were not enough to match
nonoperating gains in the 1999 period. Last year, a gain on the sale of Nicor's
interest in an electronic energy trading system and interest benefits on
tax-related matters were both reported during the first quarter.
<PAGE>
Nicor Inc. Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
RESULTS OF OPERATIONS
The following discussion summarizes the major items impacting Nicor's results of
operations.
Operating revenues. Operating revenues by major business segment are presented
below:
Three months ended
March 31
-------------------
(millions) 2000 1999
--------- ---------
Gas distribution $ 573.6 $ 512.6
Shipping 59.3 53.8
Corporate and other 26.4 10.0
--------- ---------
$ 659.3 $ 576.4
========= =========
Gas distribution revenues increased $61 million in the first quarter as the
impact of higher gas prices, which are passed directly through to customers,
more than offset the impact of lower deliveries due to warmer weather. First
quarter gas distribution revenues also include $6.9 million of estimated weather
insurance benefits that will partially reverse if the weather remains normal for
the remainder of the year. Revenues generated from Nicor's wholesale gas
marketing business accounted for most of the increase in corporate and other.
Shipping revenues rose 10 percent on increased volumes and higher average
prices.
Gas distribution margin. Gas distribution margin, defined as operating revenues
less cost of gas and revenue taxes, which are both passed directly through to
customers, increased $6 million to $163.2 million in the first quarter. This
increase is attributable to a combination of factors including customer
additions, $1.2 million from the company's performance-based rate plan, higher
margin deliveries and positive contributions from supply-related services.
Operating and maintenance. Operating and maintenance expense increased $7.7
million in the first quarter to $94.3 million. The increase is primarily
attributable to higher costs in the shipping segment where higher volume-related
expenses accounted for most of the change. The increase is also due to costs
incurred in Nicor's unregulated businesses and higher expenses in the gas
distribution segment. Significant factors contributing to the change in the gas
distribution segment include the cost of weather insurance and reduced bad debt
expense.
<PAGE>
Nicor Inc. Page 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
FINANCIAL CONDITION AND LIQUIDITY
Operating cash flows. Net cash flow provided from operating activities increased
$82.1 million to $301 million in the first quarter from $218.9 million in the
prior period. Year-to-year changes in operating cash flow result largely from
fluctuations in working capital items occurring mainly in the gas distribution
segment because of factors including weather, the price of gas, the timing of
collections from customers and gas purchasing practices. The company generally
relies on short-term financing to meet temporary increases in working capital
needs.
Financing activities. Nicor and Nicor Gas maintain short-term credit agreements
with major domestic and foreign banks. At March 31, 2000, these agreements,
which serve as backup for the issuance of commercial paper, totaled $342.5
million and the company had $96 million of commercial paper outstanding.
In January 2000, Nicor Gas issued $50 million of adjustable rate unsecured notes
due in 2001 at an initial rate of 6.11% to fund the redemption of $50 million of
unsecured notes at 5.065% that matured in January 2000.
Under an existing common stock repurchase program, Nicor purchased and retired
286,000 common shares during the first quarter of 2000 at an aggregate cost of
$9.5 million.
Effective with the dividend paid on May 1, 2000, Nicor's quarterly dividend on
common stock was increased to 41.5 cents per share. This payment represents an
annual rate of $1.66 per share, which is 6.4 percent higher than the $1.56 rate
established with the May 1, 1999 dividend.
OTHER
Market risk. The company is exposed to market risk in the normal course of its
business operations, including the risk of loss arising from adverse changes in
natural gas commodity prices and interest rates. There has been no material
change in the company's exposure to market risk since December 31, 1999.
Nicor Inc. Page 10
- ------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
GAS DISTRIBUTION STATISTICS
Changes in weather can materially affect operating results. Operating revenues,
deliveries, customers and other statistics are presented below.
Three months ended
March 31
--------------------
2000 1999
--------- --------
Operating revenues (millions)
Sales
Residential $ 387.3 $ 344.2
Commercial 76.0 76.6
Industrial 11.0 11.8
--------- --------
474.3 432.6
--------- --------
Transportation
Residential .9 -
Commercial 24.8 22.5
Industrial 11.9 11.6
Other 2.2 1.1
--------- --------
39.8 35.2
--------- --------
Revenue taxes and other 59.5 44.8
--------- --------
$ 573.6 $ 512.6
========= ========
Deliveries (Bcf)
Sales
Residential 90.2 100.4
Commercial 17.2 21.2
Industrial 2.6 3.6
--------- --------
110.0 125.2
--------- --------
Transportation
Residential .9 -
Commercial 36.7 34.1
Industrial 44.2 46.0
--------- --------
81.8 80.1
--------- --------
191.8 205.3
========= ========
Customers at end of period (thousands)
Sales
Residential 1,763.7 1,747.7
Commercial 111.1 129.7
Industrial 7.5 9.2
--------- --------
1,882.3 1,886.6
--------- --------
Transportation
Residential 16.0 -
Commercial 56.0 35.3
Industrial 6.5 4.9
--------- --------
78.5 40.2
--------- --------
1,960.8 1,926.8
========= ========
Other statistics
Degree days 2,595 2,874
Colder (warmer) than normal (19)% (9)%
Average gas cost per Mcf sold $ 3.32 $ 2.52
Nicor Inc. Page 11
- ------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
SHIPPING STATISTICS
Three months ended
March 31
--------------------
2000 1999
--------- --------
TEUs shipped (thousands)
Southbound 33.2 30.2
Northbound 4.1 4.5
Interisland 1.9 2.2
--------- --------
39.2 36.9
========= ========
Other statistics
Revenue per TEU $ 1,505 $ 1,457
Ports served 23 25
Vessels owned 13 13
<PAGE>
Nicor Inc. Page 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk
For disclosures about market risk, see Market Risk on page 9, which is
incorporated herein by reference.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For information concerning legal proceedings, see Contingencies on page 6, which
is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 14 filed herewith.
(b) The company did not file a report on Form 8-K during the first quarter
of 2000.
<PAGE>
Nicor Inc. Page 13
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 May 12, 2000 By KATHLEEN L. HALLORAN
Kathleen L. Halloran
Executive Vice President
Finance and Administration
and Secretary
<PAGE>
Nicor Inc. Page 14
Exhibit Index
Exhibit
Number Description of Document
10.01 Amendment and Restatement of Nicor Gas Supplementary Retirement Plan.
10.02 Amendment and Restatement of Nicor Gas Supplementary Savings Plan.
10.03 First Amendment to Nicor Salary Deferral Plan.
10.04 First Amendment to Agreements Restating 1984 and 1985 Nicor Capital
Accumulation Plan Participation Agreements for Officers and Directors.
10.05 First Amendment to Nicor 1989 Long -Term Incentive Plan.
10.06 First Amendment to Nicor 1997 Long -Term Incentive Plan.
10.07 Second Amendment to Nicor Stock Deferral Plan.
27.01 Financial Data Schedule.
NICOR GAS SUPPLEMENTARY RETIREMENT PLAN
(As Amended and Restated
Effective as of January 1, 1999)
Mayer, Brown & Platt
Chicago
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 General..........................................................1
1.1. History, Purpose and Effective Date........................1
1.2. Definitions................................................1
1.3. Plan Administration; Source of Benefit Payments............1
1.4. Applicable Laws............................................2
1.5. Gender and Number..........................................2
1.6. Notices....................................................2
1.7. Action by Employers........................................2
1.8. Limitations on Provisions..................................2
1.9. Claims and Review Procedures...............................2
1.10. Benefits Under Plan as in Effect Prior to January 1, 1995..2
SECTION 2 Participation....................................................3
2.1. Participation..............................................3
2.2. Beneficiary................................................3
2.3. Restricted Membership......................................3
2.4. Plan Not Contract of Employment............................3
SECTION 3 Amount and Payment of Plan Benefit...............................3
3.1. Amount of Supplemental Retirement Benefit..................3
3.2. Benefits for Beneficiaries.................................4
3.3. Payment of Benefits........................................4
3.4. Distributions To Persons Under Disability..................5
3.5. Benefits May Not Be Assigned or Alienated..................5
3.6 Benefits for Limited Participants..........................5
SECTION 4 Amendment and Termination........................................5
4.1. Amendment and Termination..................................5
4.2. Successors.................................................6
<PAGE>
NICOR GAS SUPPLEMENTARY RETIREMENT PLAN
(As Amended and Restated Effective
as of January 1, 1999)
SECTION 1
General
1.1. History, Purpose and Effective Date. Northern Illinois Gas Company
(doing business as Nicor Gas Company, the "Company") previously established the
Nicor Gas Retirement Plan (previously known as the NI-Gas Retirement Plan, the
"Retirement Plan") to provide retirement and other benefits to or on behalf of
its eligible employees and those of its affiliates which, with the consent of
the Company, adopt the Retirement Plan. Contrary to the desire of the Company,
the amount of the benefit payable to or on account of an employee under the
Retirement Plan may be limited by reason of the application of certain
provisions of the Internal Revenue Code of 1986, as amended (the "Code").
Therefore, the Company previously established the NI-Gas Supplementary
Retirement Plan (the "Plan"), effective as of January 9, 1980, to assure that
affected individuals would receive total retirement and other benefits in an
amount equal to the amount that they would have received under the Retirement
Plan if certain limitations of the Code were not applicable to the Retirement
Plan. The following provisions constitute an amendment and restatement of the
Plan, effective as of January 1, 1999 (the "Effective Date"), in the form of
"Nicor Gas Supplementary Retirement Plan". The Company and any affiliate of the
Company which adopts the Plan for the benefit of its eligible employees are
referred to below, collectively, as the "Employers" and individually as an
"Employer".
1.2. Definitions. Unless the context clearly requires otherwise, any word,
term or phrase used in the Plan shall have the same meaning as is assigned to it
under the terms of the Retirement Plan. Any reference in the Plan to a provision
of the Retirement Plan shall be deemed to include reference to any comparable
provision of any amendment of that plan.
1.3. Plan Administration; Source of Benefit Payments. The authority to
control and manage the operation and administration of the Plan shall be vested
in the committee appointed by the Board of Directors of the Company to act under
the Retirement Plan (the "Committee"). In controlling and managing the operation
and administration of the Plan, the Committee shall have the same rights, powers
and duties as those delegated to it under the Retirement Plan. The amount of any
benefit payable under the Plan shall be paid from the general revenues of the
Employer with respect to whose former employee the benefit is payable; provided,
however, that if a Participant (as defined in subsection 2.1) has been employed
by more than one Employer, the portion of his Plan benefits payable by any such
Employer shall be in proportion to the benefit he accrued under the Retirement
Plan for his period of service with that Employer. An Employer's obligation
under the Plan shall be reduced to the extent that any amounts due under the
Plan are paid from one or more trusts, the assets of which are subject to the
claims of general creditors of the Employer or any affiliate thereof; provided,
however, that nothing in the Plan shall require the Company or any Employer to
establish any trust to provide benefits under the Plan.
1.4. Applicable Laws. The Plan shall be construed and administered in
accordance with the laws of the State of Illinois to the extent that such laws
are not preempted by the laws of the United States of America.
1.5. Gender and Number. Where the context admits, words in one gender
shall include the other gender, words in the singular shall include the plural
and the plural shall include the singular.
1.6. Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee, in care of the Company, at
its principal executive offices. Any notice required under the Plan may be
waived by the person entitled to notice.
1.7. Action by Employers. Any action required or permitted to be taken
under the Plan by any Employer which is a corporation shall be by resolution of
its Board of Directors, or by a person or persons authorized by its Board of
Directors. Any action required or permitted to be taken by any Employer which is
a partnership shall be by a general partner of such partnership or by a duly
authorized officer thereof.
1.8. Limitations on Provisions. The provisions of the Plan and the
benefits provided hereunder shall be limited as described herein. Any benefit
payable under the Retirement Plan shall be paid solely in accordance with the
terms and conditions of the Retirement Plan and nothing in this plan shall
operate or be construed in any way to modify, amend, or affect the terms and
provisions of the Retirement Plan.
1.9. Claims and Review Procedures. The claims procedure applicable to
claims and appeals of denied claims under the Retirement Plan shall apply to any
claims for benefits under the Plan and appeals of any such denied claims.
1.10. Benefits Under Plan as in Effect Prior to January 1, 1995. Except as
otherwise specifically provided in the Plan, the provisions of the Plan as set
forth herein shall apply only to persons who become Participants or commence
payment of their benefits under the Retirement Plan on or after the January 1,
1995. Except as otherwise specifically provided in the Plan, if a person became
a Participant or commenced payment of his benefits under the Retirement Plan
prior to January 1, 1995, his right to benefits, if any, and the amount thereof,
will be determined in accordance with the provisions of the Plan as in effect on
the date he became a Participant.
SECTION 2
Participation
2.1. Participation. Each person who was a "Participant" of the Plan
immediately prior to the Effective Date shall continue as a Participant
hereunder for periods on and after the Effective Date, subject to the terms and
conditions of the Plan. Subject to the terms and conditions of the Plan, each
other employee of an Employer who retires after the Effective Date on a
retirement date under the Retirement Plan shall become a "Participant" in the
Plan if, at the time he commences payment of his retirement benefits under the
Retirement Plan, the amount of his retirement benefit is limited by reason of
the application of sections 415 of the Code or, after December 31, 1994,
401(a)(17) of the Code (and, in each case, the regulations and rulings
thereunder). Each Participant (or, to the extent applicable, his Beneficiary (as
defined in subsection 2.2)) shall be entitled to receive the Supplemental
Retirement Benefit, if any, determined in accordance with Section 3 hereof.
Subject to the terms and conditions of the Plan, an individual who is granted
benefits under an individual agreement with the Company or, with the consent of
the Company, an Employer, which individual agreement provides for the payment of
retirement benefits or other deferred compensation, including benefits which are
in addition to the benefits to which the individual would otherwise be entitled
under the terms of the Retirement Plan, will be a "Participant" in the Plan
solely for purposes of the benefits to be provided under the individual
agreement and such individuals are sometimes referred to herein as "Limited
Participants".
2.2. Beneficiary. Each individual who becomes entitled to benefits under
the Retirement Plan on account of the death of a Participant after his
retirement shall be referred to as a "Beneficiary" under the Plan and, in the
event of the Participant's death, shall be entitled to receive the benefits in
accordance with subsection 3.3.
2.3. Restricted Participation. Notwithstanding any other provision of the
Plan to the contrary, if the Committee determines that participation by one or
more Participants (or payment of benefits to any Beneficiary) shall cause the
Plan as applied to any Employer to be subject to Part 2, 3 or 4 of Title I of
the Employee Retirement Income Security Act of 1974, as amended, the entire
interest of such Participant or Beneficiary under the Plan shall be, in the
discretion of the Committee, immediately paid to such Participant (or
Beneficiary, if applicable) by the applicable Employer or Employers, or shall
otherwise be segregated from the Plan, and such Participant(s) (or
Beneficiary(ies)) shall cease to have any interest under the Plan.
2.4. Plan Not Contract of Employment. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any employee
the right to be retained in the employ of any Employer nor any right or claim to
any benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
SECTION 3
Amount and Payment of Plan Benefit
3.1. Amount of Supplemental Retirement Benefit. Subject to the terms and
conditions of the Plan, the benefit payable under the Plan to a Participant (the
"Supplemental Retirement Benefit") as of any date shall be an amount equal to:
(a) the amount of the benefit (expressed in the form of the benefit the
Participant actually receives under the Retirement Plan) that the
Participant would have been entitled to receive as of that date
under the Retirement Plan, determined without regard to the
limitations imposed by either section 415 of the Code or, after
December 31, 1994, section 401(a)(17) of the Code, or both;
REDUCED BY
(b) the amount of the actual benefit payment under the Retirement Plan
to the Participant as of that date.
To the extent applicable, the Supplemental Retirement Benefit shall be
determined at all times in a manner consistent with the then current provisions
of sections 415 of the Code and, after December 31, 1994, 401(a)(17) of the
Code, to the extent applicable. Limited Participants shall not be entitled to a
Supplemental Retirement Benefit under this subsection 3.1.
3.2. Benefits for Beneficiaries. Upon the death of a Participant, such
Participant's Beneficiary shall be entitled to receive a Supplemental Retirement
Benefit, if any, in an amount determined in accordance with subsection 3.1 by
substituting the Beneficiary for the Participant.
3.3. Payment of Benefits. Subject to the terms and conditions of the Plan,
for benefits commencing on or after January 1, 1995, Supplemental Retirement
Benefits shall be paid in accordance with the following:
(a) The Supplemental Retirement Benefit to which a Participant or
Beneficiary, as applicable, is entitled shall be paid at such time,
in the same form and subject to substantially the same conditions as
is the benefit paid to such Participant or Beneficiary, as
applicable, under the Retirement Plan.
(b) Notwithstanding the provisions of paragraph (a), a Participant or
Beneficiary, as applicable, may elect payment of his Supplemental
Retirement Benefit in a form other than the form of benefit
payment under the Retirement Plan (but only in one of the other
optional forms of payment otherwise available to the Participant
or Beneficiary, as applicable, under the Retirement Plan);
provided, however, that any such election shall be effective only
to the extent that it is made at least one year prior to the date
as of which payment of the Supplemental Retirement Benefit would
otherwise commence.
(c) Notwithstanding the provisions of paragraphs (a) and (b), a
Participant or Beneficiary, as applicable, may request, by
writing filed with the Committee, to have payment of his
Supplemental Retirement Benefit in a form other than the form of
payment under the Retirement Plan (but only in one of the other
optional forms of payment otherwise available to the Participant
or Beneficiary, as applicable, under the Retirement Plan). After
receiving such a request, the Committee shall consider the
request and the circumstances on which it is based and shall, in
its sole and exclusive discretion, approve or disapprove the
request and inform the requesting Participant or Beneficiary of
its decision.
(d) Notwithstanding the foregoing provisions of this subsection 3.4,
if the value of the Supplement Retirement Benefit does not exceed
$5,000 ($3,500 prior to January 1, 1998), determined as of the
Participant's retirement date, or with respect to a Beneficiary,
the date of the Participant's death, and determined using the
actuarial assumptions set forth in the Retirement Plan for
purposes of determining the actuarial value of lump sum payments,
the Supplemental Retirement Benefit shall be paid to the
Participant or Beneficiary, as applicable, in a lump sum as soon
as practicable after the Participant's retirement date or death,
as applicable.
Any optional form of benefit shall be the actuarial equivalent of the
Supplemental Retirement Benefit otherwise payable to the Participant or
Beneficiary, as applicable, determined by applying the appropriate interest rate
and other actuarial assumptions then set forth in the Retirement Plan. The
Company may, but shall not be obligated to purchase an annuity for any
Participant or Beneficiary for all or any portion of such Participant's or
Beneficiary's Supplemental Retirement Benefit, notwithstanding the purchase of
an annuity with respect to any other Participant or Beneficiary or the purchase
of an annuity with respect to the benefit payable to such Participant or
Beneficiary under the Retirement Plan.
3.4. Distributions To Persons Under Disability. In the event a Participant
or Beneficiary is declared incompetent and a conservator or other person legally
charged with the care of his person or of his estate is appointed, any benefits
to which such Participant or Beneficiary is entitled under the Plan shall be
paid to such conservator or other person legally charged with the care of his
person or of his estate.
3.5. Benefits May Not Be Assigned or Alienated. The benefits payable to
any Participant or Beneficiary under the Plan may not be voluntarily or
involuntarily assigned or alienated.
3.6. Benefits for Limited Participants. Benefits payable to any Limited
Participant under an individual agreement shall be determined solely in
accordance with, and shall be, in all respects, subject to and paid in
accordance with, the provisions of the individual agreement.
SECTION 4
Amendment and Termination
4.1. Amendment and Termination. The Company may, at any time, amend or
terminate the Plan; provided, however, that, after December 31, 1994, neither an
amendment or termination of the Plan shall reduce or impair the interests of
Participants or Beneficiaries in benefits being paid under the Plan as at the
date of any such amendment or termination or in benefits that would be paid
under the Plan as of the date of the amendment or termination if all eligible
persons retired on a retirement date under the Retirement Plan as of the date of
the amendment or termination and commenced payment of benefits under the Plan as
of that date. Notwithstanding the preceding sentence, after December 31, 1994:
(a) the Company may amend or terminate the Plan, at any time, to take
effect retroactively or otherwise, as deemed necessary or advisable
for purposes of conforming the Plan to any present or future law,
regulations or rulings relating to plans of this or a similar
nature; and
(b) in the event the Retirement Plan is terminated or curtailed with the
result that pension payments to Members or Beneficiaries thereunder
are discontinued or reduced, the Supplemental Retirement Benefits
then being paid or in the future payable pursuant to the Plan shall
similarly be discontinued or reduced in the same ratio as payments
under the Retirement Plan are discontinued or reduced.
4.2. Successors. The obligations of the Company and each Employer
under the Plan shall be binding on any assignee or successor in interest
thereto.
NICOR GAS SUPPLEMENTARY SAVINGS PLAN
(As Amended and Restated Effective
as of January 1, 1999)
Mayer, Brown & Platt
Chicago
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1....................................................................1
General......................................................................1
1.1. History, Purpose and Effective Date..............................1
1.2. Definitions, References..........................................1
1.3. Plan Administration, Source of Benefit Payments..................1
1.4. Applicable Laws..................................................2
1.5. Plan Year........................................................2
1.6. Accounting Date..................................................2
1.7. Gender and Number................................................2
1.8. Notices..........................................................2
1.9. Action by Employers..............................................2
1.10. Limitations on Provisions.......................................2
1.11. Claims and Review Procedures....................................2
1.12. Benefits Under Plan as in Effect Prior to January 1, 1997.......2
SECTION 2....................................................................3
Participation................................................................3
2.1. Eligibility to Participate.......................................3
2.2. Beneficiary......................................................4
2.3. Restricted Participation.........................................4
2.4. Plan Not Contract of Employment..................................4
SECTION 3....................................................................4
Contributions................................................................4
3.1. Participant Account..............................................4
3.2. Supplemental Deferred Contributions..............................4
3.3. Supplemental Matched Contributions...............................5
3.4. Supplemental Profit Sharing Contributions........................5
SECTION 4....................................................................6
Plan Accounting..............................................................6
4.1. Allocation and Crediting of Contributions........................6
4.2. Statement of Accounts............................................6
SECTION 5....................................................................7
Payment of Plan Benefits.....................................................7
5.1 Pre-Termination Distribution................................ ....7
5.2. Distribution on Termination......................................7
5.3. Distributions To Persons Under Disability........................8
5.4. Benefits May Not Be Assigned or Alienated........................8
SECTION 6....................................................................8
Amendment and Termination....................................................8
<PAGE>
NICOR GAS SUPPLEMENTARY SAVINGS PLAN
(As Amended and Restated Effective
as of January 1, 1999)
SECTION 1
General
1.1. History, Purpose and Effective Date. Northern Illinois Gas Company
(doing business as Nicor Gas Company, the "Company") previously established
Nicor Gas Savings Investment Plan (previously known as NI-Gas Savings Investment
Plan, the "Savings Plan") to provide retirement and other benefits to or on
behalf of its eligible employees and those of its affiliates which, with the
consent of the Company, adopt the Savings Plan. Contrary to the desire of the
Company, the amount of the contributions which may be made to the Savings Plan
by or for the benefit of an employee under the Savings Plan may be limited by
reason of the application of certain provisions of the Internal Revenue Code of
1986, as amended (the "Code"). Therefore, the Company previously established the
NI-Gas Supplementary Savings Plan (the "Plan"), effective as of January 1, 1983,
to assure that affected individuals would receive benefits in an amount
comparable to the amount that they would have received under the Savings Plan if
certain limitations of the Code were not applicable to the Savings Plan . The
following provisions constitute an amendment and restatement of the Plan,
effective as of January 1, 1999 (the "Effective Date"), in the form of "Nicor
Gas Supplementary Savings Plan". The Company and any affiliate of the Company
which adopts the Plan for the benefit of its eligible employees are referred to
below, collectively, as the "Employers" and individually as an "Employer".
1.2. Definitions, References. Unless the context clearly requires
otherwise, any word, term or phrase used in the Plan shall have the same meaning
as is assigned to it under the terms of the Savings Plan. Any reference in the
Plan to a provision of the Savings Plan shall be deemed to include reference to
any comparable provision of any amendment of that plan.
1.3. Plan Administration, Source of Benefit Payments. The authority to
control and manage the operation and administration of the Plan shall be vested
in the committee appointed by the Board of Directors of the Company to act under
the Savings Plan (the "Committee"). In controlling and managing the operation
and administration of the Plan, the Committee shall have the same rights, powers
and duties as those delegated to it under the Savings Plan. The amount of any
benefit payable under the Plan shall be paid from the general revenues of the
Employer with respect to whose former employee the benefit is payable. If a
Participant (as defined in subsection 2.1) has been employed by more than one
Employer, the portion of his Plan benefit payable by each such Employer shall be
equal to that portion of his Account (as defined in subsection 3.1) attributable
to the reduction of his compensation from that Employer which is made pursuant
to his Participation Election (as defined in subsection 3.2) or otherwise made
by that Employer. An Employer's obligation under the Plan shall be reduced to
the extent that any amounts due under the Plan are paid from one or more trusts,
the assets of which are subject to the claims of general creditors of the
Employer or any affiliate thereof; provided, however, that, nothing in this Plan
shall require the Company or any Employer to establish any trust to provide
benefits under the Plan.
1.4. Applicable Laws. The Plan shall be construed and administered in
accordance with the laws of the State of Illinois to the extent that such laws
are not preempted by the laws of the United States of America.
1.5 Plan Year.The "Plan Year" shall be the calendar year.
1.6 Accounting Date. The "Accounting Date" shall be the last day of each
calendar month and each other date specified by the Committee.
1.7. Gender and Number. Where the context admits, words in the gender
shall include the other gender, words in the singular shall include the plural
and the plural shall include the singular.
1.8. Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee, in care of the Company, at
its principal executive offices. Any notice required under the Plan may be
waived by the person entitled to notice.
1.9. Action by Employers. Any action required or permitted to be taken
under the Plan by any Employer which is a corporation shall be by resolution of
its Board of Directors, or by a person or persons authorized by its Board of
Directors. Any action required or permitted to be taken by any Employer which is
a partnership shall be by a general partner of such partnership or by a duly
authorized officer thereof.
1.10. Limitations on Provisions. The provisions of the Plan and the
benefits provided hereunder shall be limited as described herein. Any benefit
payable under the Savings Plan shall be paid solely in accordance with the terms
and conditions of the Savings Plan and nothing in this Plan shall operate or be
construed in any way to modify, amend, or affect the terms and provisions of the
Savings Plan.
1.11. Claims and Review Procedures. The claims procedure applicable to
claims and appeals of denied claims under the Savings Plan shall apply to any
claims for benefits under the Plan and appeals of any such denied claims.
1.12. Benefits Under Plan as in Effect Prior to January 1, 1997. Except as
otherwise specifically provided in the Plan, the provisions of the Plan as set
forth herein shall apply only to persons who become Participants, commence
benefit payments or for whom contributions are made on or after January 1, 1997.
SECTION 2
Participation
2.1. Eligibility to Participate. Each person who was a "Participant" in
the Plan immediately prior to the Effective Date shall continue as a Participant
hereunder for periods thereafter, subject to the terms and conditions of the
Plan. Subject to the terms and conditions of the Plan, each other employee of an
Employer shall become a "Participant" in the Plan for any Plan Year in
accordance with the following:
(a) each eligible employee whose tax deferred contributions, employer
matched contributions or, for Plan Years commencing after December
31, 1998, profit sharing contributions, under the Savings Plan for
any Plan Year are limited by section 415 of the Code shall become a
Participant on the first date on which such tax deferred
contributions, employer matched contributions or profit sharing
contributions are so limited;
(b) each eligible employee whose tax deferred contributions or employer
matched contributions under the Savings Plan for Plan Years
commencing after December 31, 1993 are limited by application of the
provisions section 401(a)(17) or 402(g) of the Code shall become a
Participant on the first date on which such tax deferred or employer
matched contributions are so limited and the following conditions
are satisfied:
(i) he is employed in an executive salary grade which has been
designated by the Committee as eligible for participation in
the Plan; and
(ii) he has elected to make the maximum elective deferrals
permitted under the terms of the Savings Plan for the Plan
Year (as determined in accordance with rules established by
the Committee); and
(c) each eligible employee who is employed in an executive salary grade
which has been designated by the Committee as eligible for
participation in the Plan and whose profit sharing contributions
under the Savings Plan for any Plan Year commencing after December
31, 1998 are limited by section 401(a)(17) of the Code shall become
a Participant on the first date on which such profit sharing
contributions are so limited.
An eligible employee may become a Participant under any or all of the foregoing
paragraphs. Once an eligible employee becomes a Participant in the Plan, he
shall remain a Participant so long as he has an Account balance under the Plan;
provided, however, that, in order to have contributions (other than Supplemental
Profit Sharing Contributions (as defined subsection 3.4)) credited to his
Account for any Plan Year, a Participation Election must be in effect for him
for the Plan Year as described in subsection 3.2. Eligible employees who satisfy
the requirements of paragraph (b) or (c) next above for any Plan Year are
sometimes referred to herein as "Supplemental Participants".
2.2. Beneficiary. A Participant's "Beneficiary" under the Plan shall be
determined in accordance with the provisions of the Savings Plan, but need not
be identical to his beneficiary under the Savings Plan.
2.3. Restricted Participation. Notwithstanding any other provision of the
Plan to the contrary, if the Committee determines that participation by one or
more Participants or Beneficiaries shall cause the Plan as applied to any
Employer to be subject to Part 2, 3 or 4 of Title I of the Employee Retirement
Income Security Act of 1974, as amended, the entire interest of such Participant
or Beneficiary under the Plan shall, in the discretion of the Committee, be
immediately paid to such Participant or Beneficiary, as applicable, by the
applicable Employer or Employers, or shall otherwise be segregated from the
Plan, and such Participant(s) or Beneficiary(ies) shall cease to have any
interest under the Plan.
2.4. Plan Not Contract of Employment. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any employee
the right to be retained in the employ of any Employer nor any right or claim to
any benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
SECTION 3
Contributions
3.1. Participant Account. The Committee shall maintain an "Account", and
such subaccounts as the Committee deems necessary or appropriate, in the name of
each person who is a Participant.
3.2. Supplemental Deferred Contributions. For any Plan Year, an eligible
employee may file with the Committee a "Participation Election" which shall be
filed in accordance with uniform rules established by the Committee but, in all
events, shall be filed prior to the first day of the Plan Year to which it
relates. A Participant's Participation Election shall generally provide that if
the Participant's tax deferred contributions to the Savings Plan are limited by
the provisions of section 415 or, for Plan Years commencing after December 31,
1993 with respect to Supplemental Participants, section 401(a)(17) or 402(g) of
the Code, his compensation for the Plan Year will continue to be reduced, in
accordance with his tax deferred election as in effect under the Savings Plan as
of the date (the "Limitation Date") on which his tax deferred contributions
under the Savings Plan are first limited by section 415, 401(a)(17) or 402(g) of
the Code, as applicable, by an amount equal to the amount of tax deferred
contributions that would have been made under the Savings Plan had the
provisions of section 415 or, for Plan Years commencing after December 31, 1993
with respect to Supplemental Participants, sections 401(a)(17) or 402(g) of the
Code, had not applied to him. For any Plan Year, an amount equal to the amount
that the Participant's compensation is reduced pursuant to his Participation
Election (referred to as "Supplemental Deferred Contributions") shall be
credited to his Account under the Plan. In no event shall the sum of (a) the tax
deferred contributions made by a Participant under the Savings Plan, and (b) his
Supplemental Deferred Contributions, for any Plan Year exceed the maximum amount
of tax deferred contributions that could have been contributed to the Savings
Plan for such Plan Year in accordance with the terms thereof, determined without
regard to the limitations of sections 401(a)(17), 402(g) or 415 of the Code,
based on the Participant's tax deferred election under the Savings Plan as in
effect as of the Limitation Date. Credits to the Participant's Account pursuant
to this subsection 3.2 shall be made at the same time that tax deferred
contributions would otherwise have been credited to his accounts under the
Savings Plan. Once filed with the Committee, an employee's Participation
Election shall remain in effect until modified or revoked by the individual in
accordance with uniform rules established by the Committee. Notwithstanding any
other provision of the Plan to the contrary, any employee who is covered under
the Nicor Gas Salary Deferral Plan shall not be eligible to participate in the
Plan with respect to Supplemental Deferred Contributions.
3.3. Supplemental Matched Contributions. For any Plan Year, a
Participant's Account will be credited with an amount equal to the difference
between (a) the employer matched contributions that would have been contributed
on behalf of the Participant to the Savings Plan for that Plan Year, in
accordance with the terms thereof and based on his tax deferred election under
the Savings Plan as in effect on the Limitation Date, determined without regard
to the limitations of sections 415 or, for Plan Years beginning after December
31, 1993 with respect to Supplemental Participants, 401(a)(17) and 402(g) of the
Code, and (b) the amount of employer matched contributions actually made to the
Savings Plan on behalf of the Participant; provided, however that no
Supplemental Matched Contributions shall be made to a Participant's Account
under the Plan for periods after the Participant's termination date. Credits to
the Participant's Account pursuant to this subsection 3.3 (called "Supplemental
Matched Contributions") shall be made at the same time that employer matched
contributions would otherwise have been credited to his accounts under the
Savings Plan.
3.4. Supplemental Profit Sharing Contributions. For any Plan Year, a
Participant's Account will be credited with an amount equal to the difference
between (a) the employer profit sharing contributions that would have been
contributed on behalf of the Participant to the Savings Plan for that Plan Year,
in accordance with the terms thereof, determined without regard to the
limitations of sections 415 or, with respect to Supplemental Participants,
401(a)(17) of the Code, and (b) the amount of employer profit sharing
contributions actually made to the Savings Plan on behalf of the Participant.
Credits to the Participant's Account pursuant to this subsection 3.4 (called
"Supplemental Profit Sharing Contributions") shall be made at the same time that
employer profit sharing contributions would otherwise have been credited to his
accounts under the Savings Plan.
SECTION 4
Plan Accounting
4.1. Allocation and Crediting of Contributions. As of each Accounting
Date, the Committee shall adjust the Plan Account of each Plan Participant in
the following manner and order:
(a) first, charge to each Participant's Account the amount of any
distributions that have been paid to or on behalf of the Participant
since the last preceding Accounting Date pursuant to subsections 5.1
and 5.2 that have not previously been charged;
(b) next, credit to each Participant's Account earnings computed at a
rate of return equal to the rate of return for such accounting
period earned on amounts invested in the stated return fund under
the Savings Plan (or any other investment fund or funds which may,
in the discretion of the Committee, augment or replace the stated
return fund), based on the average monthly balance of the Account
for the accounting period;
(c) next, credit to his Account the amount of the Supplemental Deferred
Contributions, if any, made by or on behalf of the Participant since
the last preceding Accounting Date that have not previously been
credited;
(d) next, credit to his Account the amount of the Supplemental Matched
Contributions, if any, made by or on behalf of the Participant since
the last preceding Accounting Date that have not previously been
credited; and
(e) finally, credit to his Account the amount of the Supplemental Profit
Sharing Contributions, if any, made by or on behalf of the
Participant since the last preceding Accounting Date that have not
previously been credited.
The portion of a Participant's Account attributable to Supplemental Matched
Contributions and Supplemental Profit Sharing Contributions, and earnings
thereon, will be reduced to zero on the date, if any, as of which his employer
matched contribution account and employer profit sharing account, respectively,
is forfeited under the Savings Plan.
4.2. Statement of Accounts.As soon as practicable after the last day of
each Plan year, the Committee will cause to be delivered to each Plan
Participant a statement of the balance of his Plan Account as of that day.
SECTION 5
Payment of Plan Benefits
5.1. Pre-Termination Distribution. With the consent of the Committee, as
of any Accounting Date a Participant who is then employed by an Employer or
affiliate may, upon a showing of financial hardship and after exhausting all of
his rights of withdrawal under the Savings Plan, elect a single sum distribution
of all or a portion of his Account attributable to Supplemental Deferred
Contributions, and earnings thereon, in an amount not exceeding such financial
hardship.
5.2. Distribution on Termination. Subject to the following provisions of
this subsection 5.2, as of the Accounting Date coincident with or next following
a Participant's termination date, there shall be payable to him or, in the event
of his death, to his Beneficiary an amount equal to:
(a) the balance of his Account attributable to Supplemental Deferred
Contributions and earnings thereon, if any; plus
(b) to the extent that he has a nonforfeitable right to all or a
portion of his employer matched contribution account under the
Savings Plan, that portion of the balance of his Account
attributable to Supplemental Matched Contributions, and earnings
thereon, determined by applying the same vesting schedule to the
portion of his Account attributable to Supplemental Matched
Contributions, and earnings thereon, as is then applied to his
employer matched contribution account under the Savings Plan;
plus
(c) to the extent that he has a nonforfeitable right to all or a
portion of his employer profit sharing account under the Savings
Plan, that portion of the balance of his Account attributable to
Supplemental Profit Sharing Contributions, and earnings thereon,
determined by applying the same vesting schedule to the portion
of his Account attributable to Supplemental Profit Sharing
Contributions as is then applied to his employer profit sharing
account under the Savings Plan.
Any payment under this subsection 5.2 which is made after December 31, 1993
shall be made in any form permitted under the Savings Plan, as elected by the
Participant, and shall commence as of the Accounting Date coincident with or
next following the first anniversary of his termination date; provided, however,
if the Participant has filed an election with the Committee regarding his form
of payment at least one year prior to his termination date, payment of his
Account shall commence as of the Accounting Date coincident with or next
following his termination date. Notwithstanding the foregoing provisions of this
subsection 5.2, if the value of a Participant's Account balances does not exceed
$5,000, determined as of the Participant's termination date, or with respect to
a Beneficiary, the date of the Participant's death, the Participant's Account
balances shall be paid to the Participant or Beneficiary, as applicable, in a
lump sum as soon as practicable after the Participant's termination date or
death, as applicable. The Committee, in its sole discretion, may accelerate or
defer the date of payment of any benefits to the extent that it determines such
acceleration or deferral to be in the best interests of the Employers or any
Participant for any reason.
5.3. Distributions To Persons Under Disability . In the event a
Participant or his Beneficiary is declared incompetent and a conservator or
other person legally charged with the care of his person or of his estate is
appointed, any benefit to which such Participant or Beneficiary is entitled
under the Plan shall be paid to such conservator or other person legally charged
with the care of his person or of his estate.
5.4. Benefits May Not Be Assigned or Alienated. The benefit payable to any
Participant or Beneficiary under the Plan may not be voluntarily or
involuntarily assigned or alienated.
SECTION 6
Amendment and Termination
The Company may, at any time, amend or terminate the Plan; provided,
however, that subject to the provisions of the following sentence, neither an
amendment nor a termination shall adversely affect the rights of any Participant
or Beneficiary under the Plan. The Company, by Plan amendment or termination,
may prospectively (a) modify or eliminate the right of any Participant to make
Supplemental Deferred Contributions, and (b) modify or eliminate the right to
have Supplemental Matched Contributions or Supplemental Profit Sharing
Contributions credited to the Account of any Participant. Notwithstanding the
foregoing provisions of this Section 6, the Company may amend or terminate the
Plan at any time, to take effect retroactively or otherwise, as deemed necessary
or advisable for purposes of conforming the Plan to any present or future law,
regulations or rulings relating to plans of this or a similar nature.
FIRST AMENDMENT TO
NICOR, INC. SALARY DEFERRAL PLAN
Upon the recommendation of the Compensation Committee of the Board of
Directors (the "Board") of Nicor Inc. (the "Company"), the Nicor, Inc. Salary
Deferral Plan (the "Plan") has been amended by resolution of its Board of
Directors (the "Resolution") adopted on December 7, 1999, with such amendments
to be effective pursuant to the terms of the Resolution. Pursuant to the
Resolution, the following shall be substituted for the portion of subsection 5.7
beginning after "For purposes of the Plan, "Change in Control" means:"
(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of any shares of
Common Stock of the Company or any voting securities of the Company entitled
to vote generally in the election of directors if, as a result of such
acquisition, such person owns 20% or more of either (i) the outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock"), or (ii) the combined voting power of the outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection 5.7(a), the following acquisitions shall
not constitute a Change in Control: (A) any acquisition by the Company, (B)
any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company (a
"Company Plan"), or (C) any acquisition by any corporation pursuant to a
transaction which complies with subsections (c)(1), (c)(2), and (c)(3) of
this definition; provided further, that for purposes of clause (A), if any
Person (other than the Company or any Company Plan) shall become the
beneficial owner of 20% or more of the Outstanding Company Common Stock or
20% or more of the Outstanding Company Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares of the
Outstanding Company Common Stock or any additional Outstanding Company Voting
Securities (other than pursuant to any dividend reinvestment plan or
arrangement maintained by the Company) and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control; or
(b) Individuals who, as of December 7, 1999, constitute the Board of
Directors of the Company (for purposes of this definition, the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Incumbent Board; provided, however, that any individual becoming a director
subsequent to December 7, 1999 whose election, or nomination for election by
the Company shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or publicly threatened election contest (as
such terms are used in Rule 14a-11 promulgated under the Exchange Act) or
other actual or publicly threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board of Directors of the Company; or
(c) Consummation, including receipt of any necessary regulatory approval, of
(i) a reorganization, merger, consolidation, or other business combination
involving the Company or (ii) the sale or other disposition of more than 50%
of the operating assets of the Company (determined on a consolidated basis),
other than in connection with a sale-leaseback or other arrangement resulting
in the continued utilization of such assets (or the operating products of
such assets) by the Company (any transaction described in part (i) or (ii)
being referred to as a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which:
(1) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
ultimate parent entity resulting from such Corporate Transaction
(including, without limitation, an entity which, as a result of such
transaction, owns the Company or all or substantially all of the assets of
the Company either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be;
(2) no Person (other than the Company, any Company Plan or related trust,
the corporation resulting from such Corporate Transaction, and any Person
which beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding common stock of the ultimate parent
entity resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such entity; and
(3) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the ultimate
parent entity resulting from such Corporate Transaction; or
(d) A tender offer (for which a filing has been made with the Securities and
Exchange Commission (the "SEC") which purports to comply with the
requirements of Section 14(d) of the Exchange Act and the corresponding SEC
rules) is made for the stock of the Company, which has not been negotiated
and approved by the Board, provided that in case of a tender offer described
in this subsection (d), the Change in Control will be deemed to have occurred
at the first time during the offer period when the Person (as defined in
subsection (a) above) making the offer beneficially owns or has accepted for
payment stock of the Company with 20% or more of the combined voting power of
the then Outstanding Company Voting Securities; or
(e) Approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.
(f) For purposes of this definition of Change in Control, (i) the term
"Company" shall mean Nicor Inc. and shall include any Successor to Nicor
Inc.; and (ii) the term "Successor to Nicor Inc." shall mean any corporation,
partnership, joint venture or other entity that succeeds to the interests of
Nicor Inc. by means of a merger, consolidation or other restructuring that
does not constitute a Change in Control under subsections (a), (c) or (d)
above.
IN WITNESS WHEREOF, the undersigned officer of the Company has caused these
presents to be signed on behalf of the Company as of this 19th day of April,
2000.
Nicor Inc.
By THOMAS L. FISHER
Thomas L. Fisher
Chairman, President and
Chief Executive Officer
First Amendment to
Agreement Restating 1984 Nicor Capital Accumulation Plan Participation
Agreement
For Officers and Directors
First Amendment to
Agreement Restating 1985 Nicor Capital Accumulation Plan Participation
Agreement
For Officers and Directors
Upon the recommendation of the Compensation Committee of the Board of
Directors (the "Board") of __________________________(the "Company"), the 1984
Capital Accumulation Plan Participation Agreement dated ____________ and the
1985 Capital Accumulation Plan Participation Agreement dated ____________
between __________________ and the Company (the "CAP Agreements") have been
amended by resolution of its Board of Directors (the "Resolution") adopted on
December 7, 1999, with such amendments to be effective pursuant to the terms of
the Resolution. Pursuant to the Resolution and under the authority granted to
certain officers of the Company by the Resolution, the CAP Agreements are hereby
amended in the following particulars:
1. The following shall be substituted for the portion of the section titled
"Change in Control Benefit" of the CAP Agreement(s) beginning after "The term
"change in control" means:"
(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of any shares of
Common Stock of the Company or any voting securities of the Company entitled
to vote generally in the election of directors if, as a result of such
acquisition, such person owns 20% or more of either (i) the outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock"), or (ii) the combined voting power of the outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection 5.7(a), the following acquisitions shall
not constitute a Change in Control: (A) any acquisition by the Company, (B)
any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company (a
"Company Plan"), or (C) any acquisition by any corporation pursuant to a
transaction which complies with subsections (c)(1), (c)(2), and (c)(3) of
this definition; provided further, that for purposes of clause (A), if any
Person (other than the Company or any Company Plan) shall become the
beneficial owner of 20% or more of the Outstanding Company Common Stock or
20% or more of the Outstanding Company Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares of the
Outstanding Company Common Stock or any additional Outstanding Company Voting
Securities (other than pursuant to any dividend reinvestment plan or
arrangement maintained by the Company) and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control; or
(b) Individuals who, as of December 7, 1999, constitute the Board of
Directors of the Company (for purposes of this definition, the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Incumbent Board; provided, however, that any individual becoming a director
subsequent to December 7, 1999 whose election, or nomination for election by
the Company shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or publicly threatened election contest (as
such terms are used in Rule 14a-11 promulgated under the Exchange Act) or
other actual or publicly threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board of Directors of the Company; or
(c) Consummation, including receipt of any necessary regulatory approval, of
(i) a reorganization, merger, consolidation, or other business combination
involving the Company or (ii) the sale or other disposition of more than 50%
of the operating assets of the Company (determined on a consolidated basis),
other than in connection with a sale-leaseback or other arrangement resulting
in the continued utilization of such assets (or the operating products of
such assets) by the Company (any transaction described in part (i) or (ii)
being referred to as a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which:
(1) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
ultimate parent entity resulting from such Corporate Transaction
(including, without limitation, an entity which, as a result of such
transaction, owns the Company or all or substantially all of the assets of
the Company either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be;
(2) no Person (other than the Company, any Company Plan or related trust,
the corporation resulting from such Corporate Transaction, and any Person
which beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding common stock of the ultimate parent
entity resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such entity; and
(3) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the ultimate
parent entity resulting from such Corporate Transaction; or
(d) Tender offer (for which a filing has been made with the Securities and
Exchange Commission (the "SEC") which purports to comply with the
requirements of Section 14(d) of the Exchange Act and the corresponding SEC
rules) is made for the stock of the Company, which has not been negotiated
and approved by the Board, provided that in case of a tender offer described
in this subsection (d), the Change in Control will be deemed to have occurred
at the first time during the offer period when the Person (as defined in
subsection (a) above) making the offer beneficially owns or has accepted for
payment stock of the Company with 20% or more of the combined voting power of
the then Outstanding Company Voting Securities; or
(e) Approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.
(f) For purposes of this definition of Change in Control, (i) the term
"Company" shall mean Nicor Inc. and shall include any Successor to Nicor
Inc.; and (ii) the term "Successor to Nicor Inc." shall mean any corporation,
partnership, joint venture or other entity that succeeds to the interests of
Nicor Inc. by means of a merger, consolidation or other restructuring that
does not constitute a Change in Control under subsections (a), (c) or (d)
above.
2. The portion of the first sentence of the section titled "Change in Control
Benefit" of the CAP Agreement(s) beginning after "in a lump sum," be replaced
with the following:
"an amount determined in accordance with the following paragraphs equal to:
(a) first, increase the amount actually deferred under section 1 of this
Agreement with interest at the rate of 20% per year for the period between
the Commencement Date and the date a payment was made under paragraph 2 or 3
of this Agreement;
(b) next reduce the amount determined in accordance with paragraph (a) above
by any amounts previously paid under paragraph 2 or 3 of this Agreement;
(c) next, increase the amount determined in accordance with paragraph (b)
above with interest at the rate of 20% per year for the period between the
date of payment under paragraph 2 or 3 of this Agreement and the date of
payment under this paragraph of this Agreement.
For purposes of this paragraph, interest shall be compounded on the first day
of each calendar year with no adjustment for a partial year."
3. A sentence be added after the language in 2. above:
"If the Employe becomes entitled to payment under this paragraph, no payment
to him or on his behalf shall be made under any other paragraph of this
Agreement."
IN WITNESS WHEREOF, the Employee has set his hand, and the Company has caused
these presents to be signed on behalf of the Company as of this _____ day of
_________l, 2000.
------------------------------
(Insert name of Employee)
(Name of Company)
By________________________________
Thomas L. Fisher
(Title)
FIRST AMENDMENT TO
NICOR 1989 LONG-TERM INCENTIVE PLAN
Upon the recommendation of the Compensation Committee of the Board of
Directors (the "Board") of Nicor Inc. (the "Company"), the Nicor 1989 Long-Term
Incentive Plan (the "Plan") has been amended by resolution of its Board of
Directors (the "Resolution") adopted on December 7, 1999, with such amendments
to be effective pursuant to the terms of the Resolution. Pursuant to the
Resolution the following shall be substituted for the portion of section I.11
beginning after "For purposes of this Paragraph 11, the term "change in control"
means"
(A) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of any shares of
Common Stock of the Company or any voting securities of the Company entitled
to vote generally in the election of directors if, as a result of such
acquisition, such person owns 20% or more of either (i) the outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock"), or (ii) the combined voting power of the outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection 11(a), the following acquisitions shall
not constitute a Change in Control: (A) any acquisition by the Company, (B)
any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company (a
"Company Plan"), or (C) any acquisition by any corporation pursuant to a
transaction which complies with subsections (c)(1), (c)(2), and (c)(3) of
this definition; provided further, that for purposes of clause (A), if any
Person (other than the Company or any Company Plan) shall become the
beneficial owner of 20% or more of the Outstanding Company Common Stock or
20% or more of the Outstanding Company Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares of the
Outstanding Company Common Stock or any additional Outstanding Company Voting
Securities (other than pursuant to any dividend reinvestment plan or
arrangement maintained by the Company) and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control; or
(B) Individuals who, as of December 7, 1999, constitute the Board of
Directors of the Company (for purposes of this definition, the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Incumbent Board; provided, however, that any individual becoming a director
subsequent to December 7, 1999 whose election, or nomination for election by
the Company shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or publicly threatened election contest (as
such terms are used in Rule 14a-11 promulgated under the Exchange Act) or
other actual or publicly threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board of Directors of the Company; or
(C) Consummation, including receipt of any necessary regulatory approval, of
(i) a reorganization, merger, consolidation, or other business combination
involving the Company or (ii) the sale or other disposition of more than 50%
of the operating assets of the Company (determined on a consolidated basis),
other than in connection with a sale-leaseback or other arrangement resulting
in the continued utilization of such assets (or the operating products of
such assets) by the Company (any transaction described in part (i) or (ii)
being referred to as a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which:
(1) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
ultimate parent entity resulting from such Corporate Transaction
(including, without limitation, an entity which, as a result of such
transaction, owns the Company or all or substantially all of the assets of
the Company either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be;
(2) no Person (other than the Company, any Company Plan or related trust,
the corporation resulting from such Corporate Transaction, and any Person
which beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding common stock of the ultimate parent
entity resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such entity; and
(3) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the ultimate
parent entity resulting from such Corporate Transaction; or
(d) A tender offer (for which a filing has been made with the Securities and
Exchange Commission (the "SEC") which purports to comply with the
requirements of Section 14(d) of the Exchange Act and the corresponding SEC
rules) is made for the stock of the Company, which has not been negotiated
and approved by the Board, provided that in case of a tender offer described
in this subsection (d), the Change in Control will be deemed to have occurred
at the first time during the offer period when the Person (as defined in
subsection (a) above) making the offer beneficially owns or has accepted for
payment stock of the Company with 20% or more of the combined voting power of
the then Outstanding Company Voting Securities; provided, however, that the
Change in Control shall occur three (3) business days before such tender
offer is to terminate, unless the offer is withdrawn first, if the Person
making the offer could own, by the terms of the offer plus any shares
beneficially owned by that Person, stock with 50% or more of the combined
voting power of the then Outstanding Company Voting Securities when the offer
(and any subsequent offering period) terminates; or
(e) Approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.
(f) For purposes of this definition of Change in Control, (i) the term
"Company" shall mean Nicor Inc. and shall include any Successor to Nicor
Inc.; and (ii) the term Successor to Nicor Inc." shall mean any corporation,
partnership, joint venture or other entity that succeeds to the interests of
Nicor Inc. by means of a merger, consolidation or other restructuring that
does not constitute a Change in Control under subsections (a), (c) or (d)
above.
IN WITNESS WHEREOF, the undersigned officer of the Company has caused these
presents to be signed on behalf of the Company as of this 19th day of April,
2000.
Nicor Inc.
By THOMAS L. FISHER
Thomas L. Fisher
Chairman, President and
Chief Executive Officer
FIRST AMENDMENT TO
NICOR INC. 1997 LONG-TERM INCENTIVE PLAN
Upon the recommendation of the Compensation Committee of the Board of
Directors (the "Board") of Nicor Inc. (the "Company"), the Nicor Inc. 1997
Long-Term Incentive Plan (the "Plan") has been amended by resolution of its
Board of Directors (the "Resolution") adopted on December 7, 1999, with such
amendments to be effective pursuant to the terms of the Resolution. Pursuant to
the Resolution the following shall be substituted for the portion of section
10(d) beginning after "The term "Change in Control" means the occurrence of any
of the following:"
(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of any shares of
Common Stock of the Company or any voting securities of the Company entitled
to vote generally in the election of directors if, as a result of such
acquisition, such person owns 20% or more of either (1) the outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock"), or (2) the combined voting power of the outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection 10(d)(i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition by the Company,
(B) any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company (a
"Company Plan"), or (C) any acquisition by any corporation pursuant to a
transaction which complies with subsections (iii)(A), (iii)(B), and (iii)(C)
of this definition; provided further, that for purposes of clause (A), if any
Person (other than the Company or any Company Plan) shall become the
beneficial owner of 20% or more of the Outstanding Company Common Stock or
20% or more of the Outstanding Company Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares of the
Outstanding Company Common Stock or any additional Outstanding Company Voting
Securities (other than pursuant to any dividend reinvestment plan or
arrangement maintained by the Company) and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control; or
(ii) Individuals who, as of December 7, 1999, constitute the Board of
Directors of the Company (for purposes of this definition, the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Incumbent Board; provided, however, that any individual becoming a director
subsequent to December 7, 1999 whose election, or nomination for election by
the Company shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or publicly threatened election contest (as
such terms are used in Rule 14a-11 promulgated under the Exchange Act) or
other actual or publicly threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board of Directors of the Company; or
(iii) Consummation, including receipt of any necessary regulatory approval,
of (1) a reorganization, merger, consolidation, or other business combination
involving the Company or (2) the sale or other disposition of more than 50%
of the operating assets of the Company (determined on a consolidated basis),
other than in connection with a sale-leaseback or other arrangement resulting
in the continued utilization of such assets (or the operating products of
such assets) by the Company (any transaction described in part (1) or (2)
being referred to as a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which:
(A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
ultimate parent entity resulting from such Corporate Transaction
(including, without limitation, an entity which, as a result of such
transaction, owns the Company or all or substantially all of the assets of
the Company either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be;
(B) no Person (other than the Company, any Company Plan or related trust,
the corporation resulting from such Corporate Transaction, and any Person
which beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding common stock of the ultimate parent
entity resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such entity; and
(C) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the ultimate
parent entity resulting from such Corporate Transaction; or
(iv) A tender offer (for which a filing has been made with the Securities and
Exchange Commission (the "SEC") which purports to comply with the
requirements of Section 14(d) of the Exchange Act and the corresponding SEC
rules) is made for the stock of the Company, which has not been negotiated
and approved by the Board, provided that in case of a tender offer described
in this subsection (iv), the Change in Control will be deemed to have
occurred at the first time during the offer period when the Person (as
defined in subsection (i) above) making the offer beneficially owns or has
accepted for payment stock of the Company with 20% or more of the combined
voting power of the then Outstanding Company Voting Securities; provided,
however, that the Change in Control shall occur three (3) business days
before such tender offer is to terminate, unless the offer is withdrawn
first, if the Person making the offer could own, by the terms of the offer
plus any shares beneficially owned by that Person, stock with 50% or more of
the combined voting power of the then Outstanding Company Voting Securities
when the offer (and any subsequent offering period) terminates; or
(v) Approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.
(vi) For purposes of this definition of Change in Control, (1) the term
"Company" shall mean Nicor Inc. and shall include any Successor to Nicor
Inc.; and (2) the term "Successor to Nicor Inc." shall mean any corporation,
partnership, joint venture or other entity that succeeds to the interests of
Nicor Inc. by means of a merger, consolidation or other restructuring that
does not constitute a Change in Control under subsections (i), (iii) or (iv)
above.
IN WITNESS WHEREOF, the undersigned officer of the Company has caused these
presents to be signed on behalf of the Company as of this 19th day of April,
2000.
Nicor Inc.
By THOMAS L. FISHER
Thomas L. Fisher
Chairman, President and
Chief Executive Officer
SECOND AMENDMENT TO
NICOR INC. STOCK DEFERRAL PLAN
Upon the recommendation of the Compensation Committee of the Board of
Directors (the "Board") of Nicor Inc. (the "Company"), the Nicor Inc. Stock
Deferral Plan (the "Plan") has been amended by resolution of its Board of
Directors (the "Resolution") adopted on December 7, 1999, with such amendments
to be effective pursuant to the terms of the Resolution. Pursuant to the
Resolution, the Plan is amended in the following particulars:
1. The following Section 4.7 shall be added to the Plan:
"4.7. Change in Control.
(a) In the event of a Change in Control, the Participant shall receive a lump
sum distribution equal to the closing market value per share of Stock as of
the date of the Change in Control multiplied by the number of Stock Units in
the Participant's Deferred Stock Account. Such distribution shall be made to
the Participant regardless of any elections that may otherwise be applicable
under the Plan, and shall be made as soon as practicable after the date of
such Change in Control, but in no event later than 15 days after the
occurrence of such Change in Control.
(b) For purposes of the Plan, a "Change in Control" is defined as it is
provided in the 1989 Plan as the 1989 Plan has been amended by resolution of
the Company's Board of Directors adopted on December 7, 1999."
2. The following line shall be added to APPENDIX A of the Plan following the
line ending with the word "Beneficiary:"
"The 1989 Plan Change in Control"
IN WITNESS WHEREOF, the undersigned officer of the Company has caused these
presents to be signed on behalf of the Company as of this 19th day of April,
2000.
Nicor Inc.
By THOMAS L. FISHER
Thomas L. Fisher
Chairman, President and
Chief Executive Officer
<TABLE> <S> <C>
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<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>
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<PERIOD-END> MAR-31-2000
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<TOTAL-COMMON-STOCKHOLDERS-EQ> 798
6
0
<LONG-TERM-DEBT-NET> 422
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0
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<NET-INCOME> 39
0
<EARNINGS-AVAILABLE-FOR-COMM> 39
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<EPS-BASIC> 0.83
<EPS-DILUTED> 0.83
</TABLE>
