Exhibit 10.1
PIEDMONT NATURAL GAS COMPANY
EXECUTIVE LONG-TERM INCENTIVE PLAN
(Adopted by the Board of Directors August 22, 2003)
(Approved by the Shareholders February 27, 2004)
(As
revised through February 27, 2004)
[CORRECTED VERSION FILED WITH U.S. SECURITIES AND EXCHANGE
COMMISSION JUNE 9, 2008]
1.0
Purpose. The purpose of the Piedmont Natural Gas Company Executive
Long-Term Incentive Plan (the “Plan”) is to provide
executives and other key employees (the “Executives”)
of Piedmont Natural Gas Company, Inc. and its subsidiaries (the
“Company”) with incentive compensation conditioned upon
the achievement of financial and other performance objectives,
including controlling costs, promoting energy efficiency, providing
good customer service, and promoting safety.
2.0
Awards.
2.1 The
Board of Directors (the “Board”) of the Company may
grant awards of units (“Units”) each year in such
amounts and to such of the eligible Executives as it may determine
in its sole discretion (subject to the limitation in
Section 4.0 below).
Except
as otherwise provided herein, awards will be distributed only after
the end of a performance period (“Performance Period”)
of two or more years beginning with the year in which the awards
are granted. The Performance Period is to be set by the Board for
each year’s awards.
The
percentage of the Units awarded under this Section 2.1 or
credited pursuant to Section 6.0 that will be distributed to
Executives shall depend on the levels of financial performance and
other performance objectives achieved during each year of the
Performance Period; provided that the Board may adopt one or more
performance categories or eliminate all performance categories
other than financial performance. Financial performance shall be
based on the consolidated results of the Company and its
subsidiaries prepared on the same basis as the financial statements
published for financial reporting purposes and determined in
accordance with Section 10.1. Other performance categories
adopted by the Board shall be based on measurements of performance
as the Board shall deem appropriate; provided that the Board, if it
determines in its sole discretion that it is necessary or advisable
under the circumstances, may determine that distribution of awards
to persons employed shall be based on financial performance and
other performance categories, if any.
Distributions of the Units awarded will be based on financial
performance with results from other performance categories applied
as a factor, not exceeding one, against financial results. The
annual financial and other performance results will be averaged
over the Performance Period and translated into percentage factors
according to graduated criteria established by the Board for the
entire Performance Period. The resulting percentage factors shall
determine the percentage of Units to be distributed.
No
distributions of Units, based on financial performance and other
performance, shall be made if a minimum average percentage of the
applicable measurement of performance, to be
established by the Board, is not achieved for the Performance
Period. The performance levels achieved for each Performance Period
and percentage of Units to be distributed shall be conclusively
determined by the Board.
2.2
Persons granted awards under the Plan are called
“Participants”. The percentage of Units awarded which
Participants become entitled to receive based on the levels of
performance will be determined as soon as practicable after each
Performance Period and are called “Retained
Units”.
2.3 The
distribution of a Participant’s Retained Units will begin
after the number of Retained Units for each Performance Period is
determined. The distribution will be in the form of a combination
of shares and cash, consisting of a number of the Company’s
common shares (the “Shares”) equal to fifty percent
(50%) (or such greater percentage as the Participant may elect) of
the number of Retained Units and cash equal to the value
(determined in accordance with Section 8.6) of the remainder
of the Retained Units. Units that were awarded but to which
Participants do not become entitled will be cancelled.
2.4
Notwithstanding any other provision in the Plan, the Board, if it
determines in its sole discretion that it is necessary or advisable
under the circumstances, may adopt rules pursuant to which
Executives by virtue of hire, promotion or upgrade, or transfer
from another company in which the Company has or had a direct or
indirect ownership interest, or special individual circumstances,
may be granted the total award of Units or any portion thereof,
with respect to one or more Performance Periods that began in prior
years and at the time of the awards have not yet been
completed.
2.5 A
Participant who (i) is age sixty-five (65) or older at
the end of a Performance Period or (ii) retired at least one
year before the end of the period under the Company’s
standard retirement policies may elect, in accordance with this
Section 2.5, to receive Shares and cash to which he becomes
entitled under Section 2.3 in the form of a lump sum
distribution. An election to receive a lump sum distribution must
be submitted in writing to the Plan Administrator no later than one
year before the end of the applicable Performance Period and
becomes irrevocable on the last day on which it could have been
made. Distributions in accordance with this Section 2.5 will
be made as soon as practicable after the determination of the
number of Retained Units to which the Participant is
entitled.
3.0
Eligibility.
3.1
Eligibility is extended to employees of the Company who are in
active service at the time awards are granted and who are
determined by the Board to be eligible for awards under the Plan.
Employees are not rendered ineligible by reason of being a member
of the Board of the Company. The Board may grant awards to
employees on leave of absence and to employees absent on account of
disability and receiving Sickness or Accident Disability Benefits
who at the time such leave of absence or disability commenced would
have been eligible, subject to such conditions, if any, as the
Board may establish.
4.0
Limitations.
4.1 The
aggregate number of Units which may be awarded to all Participants
under this Plan in any year shall not exceed 1/2 of 1% of the total
number of Shares outstanding at the time the Units are awarded. No
award of Units to a Participant shall entitle the Participant to
any right as a stockholder of the Company.
The
aggregate number of Shares which may be issued in respect of Units
awarded to all Participants under this Plan shall not exceed
567,826 Shares.
2
5.0
Special Distribution Rules.
5.1
Death. In case of the death of a Participant prior to the end of
any Performance Period, whether before or after any event set forth
in 5.2 below, the number of Units awarded to the Participant for
such Performance Period shall be reduced pro rata based on the
number of months remaining in the Performance Period after the
month of death. The remaining Units, reduced in the discretion of
the Board to the percentage indicated by the levels of performance
achieved prior to the date of death, if any, shall be distributed
within a reasonable time after death. All other Units awarded to
the Participant for such Performance Period shall be
canceled.
5.2
Retirement/Disability. If a Participant terminates employment prior
to the end of any Performance Period under circumstances entitling
the Participant to a pension or benefit under any of the following
plans, the Units awarded under this Plan and not yet distributed
shall be prorated to the end of the month in which such termination
occurs and distributed at the end of the Performance Period based
upon the Company’s performance for such period. The plans
referenced above include:
5.21
Normal or Early Retirement Benefits as specified in the
Company’s Defined Benefit Pension Plan; and
5.22
Pensions or benefits of a similar type substituted under any such
plan or a plan substituted for, or supplementing, any such
plan.
Absence
of a Participant prior to the end of any Performance Period under
circumstances not outlined above and entitling the Participant to
Sickness Allowance and/or Long Term Disability Benefits under the
Company’s plan, or to a benefit of a similar type substituted
under or for or supplementing any such plan, or a benefit under a
plan which the Company determines to be comparable, shall not
affect Units previously granted under the Plan.
5.3
Resignation, Leave of Absence, Other Termination. In case of any
other termination of employment or any leave of absence of a
Participant, prior to the end of any Performance Period, all Units
awarded to the Participant with respect to any such Performance
Period shall be immediately forfeited and canceled.
5.4
Dismissal. All Units awarded to a Participant and not previously
dis
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