RETIREMENT ENHANCEMENT AGREEMENT
Exhibit
10.1
This
Retirement Enhancement Agreement is hereby made by and between Xxxxx X. Xxxxxx
(herein called "Executive") and AGL RESOURCES INC. (which, with its affiliates,
is herein called "the Company").
This
Retirement Enhancement Agreement has been offered to the Executive for a period
of 21 days for his consideration. The Executive has determined to retire from
his employment with the Company effective, March 1, 2009, and the Company has
agreed to provide him with certain payments and benefits. In consideration of
the mutual benefits to each party, the parties agree as follows:
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1.
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RETIREMENT DATE. The
Executive will cease to be an employee of the Company effective as of the
end of the day on March 1, 2009. As the Executive is immediately eligible
under the terms of the AGL Resources Inc Retirement Plan to commence early
retirement, March 1, 2009 is referred to herein as the "Retirement
Date.”
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2. PAYMENTS.
(a) Accrued Benefits. As soon as
practicable following the Retirement Date, the Company shall pay to the
Executive any earned but unpaid base salary, unused vacation pay, unreimbursed
business expenses and all other amounts earned by (but not paid to) the
Executive through and including the Retirement Date.
(b) Bonus. The Executive
acknowledges that he shall not be eligible for any payments under any of the
Company’s annual incentive plans or programs for the 2009 performance
period.
(c) Relocation. As soon as
practicable (but no later than fifteen (15) days) following the Retirement Date
and the expiration of any right of revocation of the Release referenced in
Paragraph 12, below, the Company shall reimburse to the Executive personal
expenses he has incurred to relocate his family to the Washington D.C. area, in
the amount of $20,022.
(d) Special
Payment. As soon as practicable (but no later than fifteen
(15) days) following the Retirement Date and the expiration of any right of
revocation of the Release referenced in Paragraph 12, below, the Company shall
pay to the Executive a one-time lump-sum payment in the amount of $208,000, in
recognition of his distinguished and invaluable service to the
Company. This payment is intended to represent the additional amount
the Executive would be entitled to if, as of the Retirement Date, he had
attained age 60 and had accrued ten years of credited service under the
Company’s defined benefit pension plans.
(e) Consulting
Services. For the period beginning on the Retirement Date and
ending December 31, 2009 (the “Consulting Period”), the Executive will receive
payments for continuing consulting services related to rate cases as well as
other matters as determined by the Chairman, President and Chief Executive
Officer. Payments for the period will total $143,800 plus
reimbursement for related expenses, as pre-approved by the Senior Vice President
of Governmental and Regulatory Affairs. The Company and the Executive agree that
during the Consulting Period, the Executive will act as an independent
contractor in the performance of his duties. Accordingly, the Executive shall
then be responsible for payment of all taxes including Federal, State and local
taxes arising out of the consulting activities and he shall not, except as
otherwise set forth herein, be eligible to participate in any of the Company’s
compensation or benefit plans or arrangements during the Consulting
Period. The Parties will execute a separate agreement outlining the
Parties’ respective rights and obligations regarding the Consulting Period
including, without limitation, provisions addressing indemnification rights,
ownership of work product, and confidentiality.
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3.
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WELFARE AND OTHER BENEFITS.
Unless otherwise specified below, upon the Retirement Date, the
Executive shall cease to participate in the Company's compensation and
benefit plans, pursuant to the terms and conditions of the plan
documents.
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4.
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LONG
TERM INCENTIVES.
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(a) Vested Stock Options. Any
outstanding, vested employee stock options granted under the Long-Term Incentive
Plan (1999) (LTIP)or Omnibus Performance Incentive Plan (2007) (OPIP), held by
the Executive on his Retirement Date for which, as of such date, the exercise
price exceeds the then fair market value of a share of Company common stock (as
determined in accordance with the terms of the LTIP and OPIP, respectively)
shall terminate and expire on the date which is thirty - six (36) months
following the Retirement Date, provided such expiration date is not beyond the
original expiration date of any such stock option. Any vested stock options
other than those described in the previous sentence, shall expire on the first
anniversary of the Retirement Date, pursuant to the terms of the subject
plans. As required by law, any outstanding incentive stock options
shall convert to nonqualified stock options on the date three months following
the Retirement Date.
(b) Unvested, Stock Options and Other
Stock-based or Cash based Awards, Unvested stock options granted under
the LTIP shall vest as of the Retirement Date. Unvested stock options
granted under the OPIP which would otherwise have vested within twelve (12)
months of the retirement date shall vest. Any other stock options and
all unvested restricted stock awards, restricted stock unit awards and
performance cash unit awards shall be forfeited as of the Retirement
Date.
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5.
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RESTRICTIVE COVENANTS.
For and in consideration of the payment and benefits provided to
the Executive under this Retirement Enhancement Agreement, the Executive
agrees to the terms of the
following:
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(a) Limited Disclosure of Employment or
other Business Opportunities. Executive agrees that, during a
period beginning on the Retirement Date and ending one (1) year after the
conclusion of the Consulting Period, he will notify the Company’s Chief
Executive Officer of any employment, independent contractor, consulting, or
other similar relationship that he may accept or any business venture in which
he may become involved as an owner, operator, partner, joint venturer or in
which he otherwise may obtain an ownership interest. Executive will
provide this notice at least ten (10) business days prior to the time that he
performs any work or other services, as described above, or obtains the
ownership interest, as described above. The Company’s Chief Executive
Officer, or his designee, and Executive will discuss the steps, if any, to be
taken to prevent the use or disclosure of the Company’s Confidential Information
(as defined below).
(b) Nondisclosure and Confidentiality.
Executive acknowledges that, during his employment and the Consulting
Period, he has learned and will learn information that is confidential or
proprietary to the Company and its affiliated companies (“Confidential
Information”). Confidential Information is information, without regard to form,
relating to the Company and its affiliates and their employees, customers,
vendors and/or suppliers that derives economic value, actual or potential, from
not being known to others, including, but not limited to, business development
strategies, potential projects and purchases, information technology, research
and development, contracts and specific terms of contracts with and proposals
to, customers, clients and other organizations with which the Company does
business or seeks to do business; the type, quantity and specifications of
products purchased by or from customers and/or by suppliers; lists and other
information about current or prospective clients, vendors or suppliers
(including compilations of such information); plans or strategies for capacity
supply, regulatory filings, sales, marketing, purchases, acquisitions, ventures,
or other business development; sales and account records, prices and pricing
strategies/information, methods, systems, techniques, procedures, designs,
formula, inventions and know-how, whether or not in writing. Confidential
information includes information disclosed to the Company by third parties that
the Company is obligated to maintain as confidential
information. Executive agrees that, during the Consulting Period and
for a period of one year after the termination of the Consulting Period, he will
hold in strictest confidence and not use, for his own benefit or for the benefit
of anyone else, any Confidential Information of the Company. Executive further
agrees that, to the extent that any Confidential Information is also considered
a Trade Secret under applicable law, Executive will hold in strictest confidence
and shall not use, for his own benefit or for the benefit of anyone else, any
such information as long as it remains a Trade Secret under applicable
law.
(c) Non-solicitation. Executive
covenants and agrees that, during a period beginning on the Retirement Date and
ending one (1) year after the conclusion of the Consulting Period, he will not,
without the express written consent of the Company’s Chief Executive Officer,
directly or indirectly solicit or attempt to solicit any business in competition
with the Business of Company from any of Company's customers or suppliers with
whom Executive had Material Contact during the last two years of Employee's
employment with Company. For purposes of Paragraph 5,
"Material Contact" means
both directly by contact in person, through electronic or paper correspondence,
or by telephone for a business-related purpose of Company; or indirectly through
other employees supervised by Employee, directly or indirectly, who have contact
in person, through
electronic or paper correspondence, or by telephone for a business-related
purpose of Company. For purposes of paragraph 5, the “Business of the Company”
means operating a natural gas distribution system, marketing natural gas to
retail customers, providing asset management and related services to wholesale
natural gas customers, and the acquisition, development, marketing, operation
and sale of natural gas storage facilities.
(d) Non-Recruitment of Employees. Executive covenants and agrees
that, during a period beginning on the Retirement Date and ending one (1) year
after the conclusion of the Consulting Period, he will not directly or
indirectly solicit or attempt to solicit any employee of Company with whom he
had Material Contact during the last two years of his employment, to terminate
or resign such employee's employment with Company.
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6.
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COOPERATION AFTER CONSULTING PERIOD. The Executive agrees
to cooperate fully with the Company for a period of one (1) year following
the conclusion of the Consulting Period and to reasonably assist the
Company thereafter on all matters relating to his employment and the
conduct of the Company's business, including any litigation, claim or suit
involving the Company as a party or witness and as to which the Executive
possesses knowledge or information which may be relevant to the litigation
or in which the Company deems that the Executive's cooperation is needed.
The Company agrees to reimburse the Executive for all reasonable
"out-of-pocket"
expenses related to provision of the services referenced in this
Paragraph, provided the Executive receives advance approval of such
expenses by the Company's Senior Vice President-Governmental and
Regulatory Affairs and provides the Company with receipts and invoices for
all such expenses in accordance with the Company's general expense
reimbursement policy then in
effect.
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7.
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CONFIDENTIALITY AGREEMENT.
The Executive and the Company understand and agree that, due to the
sensitive nature of this matter, the terms of this Retirement Enhancement
Agreement are to be kept private and confidential and that the terms of
this Retirement Enhancement Agreement shall not be disclosed, unless the
party(ies) is (are) required by law to do so. While not limiting the
generality of the foregoing, disclosure includes any statement, written or
oral, to any person, including, but not limited to, any current or former
Executives of the Company. The parties to this Retirement Enhancement
Agreement acknowledge that there will be circumstances under which some or
all of the terms of this Retirement Enhancement Agreement will have to be
made known to some individuals in the regular course of conducting
business and personal affairs. In keeping with that understanding, the
Company agrees that the Executive may discuss the terms of this Retirement
Enhancement Agreement with his attorneys, accountants, tax advisors and
immediate family. The Executive agrees to advise such individuals of the
confidentiality provisions of this Retirement Enhancement Agreement and
will advise anyone so named of the requirement to keep the terms of this
Retirement Enhancement Agreement confidential. Should the Executive
disclose any of the terms of this Retirement Enhancement Agreement to
persons (whether entities or individuals) other than those specified in
this section, then such actions shall constitute a material breach of this
Retirement Enhancement Agreement on the part of the Executive. The
obligations under this Paragraph shall survive the termination of this
Retirement Enhancement Agreement.
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8.
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NONDISPARAGEMENT. The
Executive agrees that he shall not make any untrue statement or criticism,
written or oral, nor take any action which is adverse to the interests of
the Company or that would cause the Company or its current or former
officers, directors, Executives, agents, or shareholders embarrassment or
humiliation or otherwise cause or contribute to such persons being held in
disrepute by the public or by the Company's clients, customers, or
Executives. From and after the Retirement Date, the Executive shall
refrain from discussing the terms and conditions of the termination of the
Executive's employment with any Executive, agent, client or customer of
the Company. The officers and directors of the Company agree that they
shall not make any untrue statement or criticism, written or oral, nor
take any action which is adverse to the interests of the Executive or that
would cause the Executive embarrassment or humiliation or otherwise cause
or contribute to his being held in disrepute by the public or by the
Company's clients, customers or Executives. The obligations under this
Paragraph shall survive the termination of this Retirement Enhancement
Agreement.
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9.
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RETURN OF COMPANY DOCUMENTS
AND PROPERTY. The Executive hereby represents and warrants that, as
of the conclusion of the Consulting Period, he will return to the Company
all documents (including copies and computer records thereof) of any
nature which relate to or contain proprietary or confidential information
concerning the Company, its customers, or Executives, and any and all
property of the Company which has been in his possession, including,
except as hereinafter provided, any computers, computer programs or
limited use software licenses in his possession. The Executive confirms
that all confidential information is and shall remain the exclusive
property of the Company. All business records, papers and documents kept
or made by the Executive relating to the business of the Company shall be
and remain the property of the Company, except for such papers customarily
deemed to be the personal copies of the Executive. Information in the
public domain or information that is commonly known by or available to the
public through the Company's press releases, public documents, annual
reports, SEC filings or other public filings shall not be considered
proprietary or confidential
information.
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10.
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NO ADDITONAL CONSIDERATION.
The Executive agrees that the foregoing payments and additional
consideration will constitute the entire amount of monetary and other
consideration provided to him under this Retirement Enhancement Agreement,
that he is not entitled to any further consideration whatsoever from the
Company, apart from any and all vested and non-forfeitable benefits,
payments, or stock rights, including all rights, if any, under the
Company's pension, 401(k), and nonqualified savings
plans.
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11.
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GENERAL RELEASE. The
Executive agrees, for himself, his spouse, heirs, executor or
administrator, assigns, insurers, attorneys and other persons or entities
acting or purporting to act on his behalf, to irrevocably and
unconditionally release, acquit and forever discharge the Company, and the
Company's directors, officers, Executives, shareholders, partners, agents,
representatives, predecessors, successors, assigns, insurers, attorneys,
benefit plans sponsored by the Company and said plans' fiduciaries, agents
and trustees (the foregoing being referred to herein as the "Released
Parties"), from any and all actions, cause of action, suits, claims,
obligations, liabilities, debts, demands, contentions, damages, judgments,
levies and executions of any kind, whether in law or in equity, known or
unknown, which the Executive has, has had, or may in the future claim to
have against any of the Released Parties by reason of, arising out of,
related to, or resulting from Executive's employment with the Company or
the termination thereof. This release specifically includes without
limitation any claims arising in tort or contract, any claim based on
wrongful discharge, any claim based on breach of contract, any claim
arising under federal, state or local law prohibiting race, sex, age,
religion, national origin, handicap, disability or other forms of
discrimination, any claim arising under federal, state or local law
concerning employment practices, and any claim relating to compensation or
benefits. This specifically includes, without limitation, any claim which
the Executive has or has had under Title VII of the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act, as amended,
the Americans with Disabilities Act, as amended, and the Executive
Retirement Income Security Act of 1974, as amended. It is understood and
agreed that the waiver of benefits and claims contained in this Paragraph
does not include a waiver of the right to payment of any vested,
nonforfeitable benefits to which the Executive or a beneficiary of the
Executive may be entitled under the terms and provisions of any Executive
benefit plan of the Company which have accrued as of the Retirement Date,
and does not include a waiver of the right to benefits and payment of
consideration to which the Executive may be entitled under this Retirement
Enhancement Agreement. The Executive acknowledges that he is only entitled
to the additional benefits and compensation set forth in this Retirement
Enhancement Agreement, and that all other claims for any other benefits or
compensation are hereby waived, except those expressly stated in the
preceding sentence.
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12.
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PENALTIES. In
addition to any legal or equitable remedies available to the Company,
including injunctive relief, the Executive agrees and acknowledges that if
he violates any provision of this Retirement Enhancement Agreement, the
Company may immediately cease any and all payments and benefits payable to
the Executive hereunder. In addition, if the Company terminates the
Executive for cause prior to the Retirement Date, the Company may
terminate this Retirement Enhancement Agreement with no further liability
for any payments and benefits payable to the Executive hereunder. For
purposes of this Paragraph, "cause" shall mean (i) the Executive's willful
and continued failure to perform any substantial duty of his position with
the Company or any of its Affiliates (other than any such failure
resulting from incapacity due to Disability) which is not cured within
thirty (30) days following written notice by the Company; (ii) the
Executive's willful engagement in any illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company; (iii) the
Executive's engagement in any activity that is in conflict of interest or
competitive with the Company or any of its Affiliates; (iv) the
Executive's engaging in any act of fraud or dishonesty against the Company
or any of its Affiliates or any material breach of federal or state
securities or commodities laws or regulations; (v) the Executive's being
intoxicated or in possession of any illegal substance in the workplace;
(vi) the Executive's engaging in an act of assault or other act of
violence; (vii) the Executive's harassment of any individual in the
workplace based on age, gender or other protected status or class or
violation of any policy of the Company regarding harassment, but only
following an investigation by an independent third party into the
harassment; and (viii) the Executive's conviction for any felony or
misdemeanor charge (other than charges related to routine traffic
violations).
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13.
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REVOCATION PERIOD. For
a period of seven (7) days following execution of this Retirement
Enhancement Agreement, the Executive may revoke this Retirement
Enhancement Agreement by sending written notice of revocation by Certified
Mail (return receipt requested) within that period
to:
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Mr. Xxxx
Xxxxx
Vice
President - Human Resources
Ten
Peachtree Place – 12th
Fl
Xxxxxxx,
XX 00000
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14.
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GOVERNING LAW. This
Retirement Enhancement Agreement shall be construed in accordance with,
and governed by, the laws of the State of Georgia, except to the extent
that the federal laws of the United States shall otherwise
apply.
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15.
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ENTIRE AGREEMENT. This
Retirement Enhancement Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous oral and written agreements and
discussions.
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16.
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SUCCESSORS. It is the
Company's intent that this Retirement Enhancement Agreement is to be
binding on the Company's successors, including any entity that purchases
more than 50% of the Company's assets. The Company agrees to undertake
negotiations with any successor to assume this Retirement Enhancement
Agreement, to the extent that such assumption is not inherent in the
purchase transaction.
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IN
WITNESS WHEREOF, the undersigned have executed this Retirement Enhancement
Agreement on the day of March 4, 2009.
EXECUTIVE:
Xxxxx X. Xxxxxx
/s/ Xxxxx X.
Xxxxxx
COMPANY:
BY: Xxxx X. Xxxxxxxxxxx
XX
Xxxx X.
Xxxxxxxxxxx XX
Chairman,
President & Chief Executive Officer
[THIS
DOCUMENT HAS BEEN EXECUTED IN DUPLICATE.]
