CONTINUITY AGREEMENT
EXHIBIT
10.1.b
This
Continuity Agreement ("Agreement") is entered into as of December 1, 2007,
by
and between AGL RESOURCES INC. (the "Company"), on behalf of itself and AGL
Services Company (its wholly owned subsidiary and the Executive's employer),
and
Xxxxxx X. Xxxxx (the "Executive").
WHEREAS,
Executive is presently employed by the Company or one of its subsidiaries in
a
key management capacity; and
WHEREAS,
the Company's Board of Directors desires to assure, and has determined that
it
is appropriate and in the best interests of the Company and its shareholders
to
reinforce and assure, the continued attention and dedication of certain key
executives of the Company and its subsidiaries to their duties of employment
without personal distraction or conflict of interest as a result of the
possibility or occurrence of a change in control of the Company;
and
WHEREAS,
the Company's Board of Directors has authorized the Company to enter into
continuity agreements with those key executives of the Company and its
subsidiaries designated by the Compensation Committee of the Company's Board
of
Directors (the "Committee"); and
WHEREAS,
the Executive is a key executive of the Company or one of its subsidiaries
and
has been designated by the Committee as an executive to be offered such a
continuity agreement with the Company.
NOW
THEREFORE, in consideration of the foregoing, and of the mutual covenants and
agreements of the parties set forth in this Agreement, and of other good and
valuable consideration including, but not limited to, Executive's continuing
employment with the Company or one of its subsidiaries, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to
be legally bound, agree as follows:
SECTION
1
DEFINITIONS
1.1. "Accrued
Benefits" shall mean the Executive's earned but unpaid base salary, Earned
and Unused Vacation Pay, unreimbursed business expenses and all other amounts
earned by (but not paid to) or owed to Executive through and including the
date
of the Qualifying Termination.
1.2. "Announcement"
shall mean a press release issued by the Company announcing the intention to
engage in a transaction or event that is expected to result in a Change in
Control of the Company as defined hereunder.
1.3. "Annual
Bonus Amount" shall mean the product of (a) times (b), where (a) is a
percentage equal to the greatest percentage of the Executive's annual rate
of
base salary upon which an annual incentive payment was paid to the Executive
under the Company's annual incentive program during the three calendar years
prior to the calendar year of the Qualifying Termination (by way of example,
if
the highest annual incentive payment, expressed as a percentage of Executive's
base salary, paid to Executive during said three year period was 100% of
Executive's base salary, then (a) would equal 100%), and (b) is the greater
of
the Executive's annual rate of base salary in effect upon the date of the
Qualifying Termination, or the Executive's annual rate of base salary in effect
as of the earliest of the date of the Announcement, the date of a Change in
Control or the date of the Consummation of a Change in Control
Transaction.
1.4. "Board"
shall mean the Board of Directors of the Company.
1.5. "Cause"
shall mean:
(a) willful
fraud, dishonesty or malfeasance by the Executive in connection with the
Executive's employment with the Company or one of its subsidiaries which results
in material harm to the Company or one of its subsidiaries;
(b) the
Executive's continued failure to substantially perform the duties and
responsibilities of the Executive's position after written notice from the
Company setting forth the particulars of such failure and a reasonable
opportunity of not less than thirty (30) business days to cure such failure;
or
(c) the
Executive's plea of guilty or nolo contendere to, or conviction of, a
felony.
Cause
shall be determined by two-thirds of the members of the Board (excluding for
this purpose the Executive if a member of the Board) at a meeting at which
the
Executive may appear and present his or her position. No act or
failure to act on the part of the Executive shall be considered "willful" unless
it is done by the Executive in bad faith or without reasonable belief that
the
Executive's action or omission was in the best interests of the Company or
one
of its subsidiaries. Any act or failure to act that is based upon
authority given pursuant to a resolution duly adopted by the Board, or the
advice of counsel for the Company or one of its subsidiaries, shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.
1.6. "Change
in Control" shall mean the earliest of the following to occur:
(a) The
date any one person, or more that one person acting as a group (as determined
under Treasury Regulation 1.409A-3(i)(5)(v)(B), a "Group"), acquires ownership
of stock of the Company that, together with stock held by such person or Group,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company. If any one person or
Group is considered to own more than 50% of the total fair market value or
total
voting power of the Company, the acquisition of additional control of the
Company by the same person or Group is not considered to cause a Change in
Control of the Company;
(b) The
date any one person or Group acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing thirty-five percent (35%)
or more of the total voting power of the stock of the Company;
(c) The
date a majority of the members of the Board is replaced during any twelve (12)
month period by directors whose appointment or election is not endorsed by
a
majority of the members of the Board before the date of their appointment or
election; or
(d) The
date that any one person or Group, acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than fifty percent (50%) of the total gross fair market
value of all assets of the Company immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the
value of the assets of the Company, or the assets being disposed of, determined
without regard to any liabilities associated with such assets.
It
is
intended that there will be a Change in Control under this Agreement only to
the
extent such event or transaction would constitute a "change in control event"
as
such term is defined in Treasury Regulation Section 1.409A-3(i)(5) and thus
the
provisions of the definition of Change in Control shall be applied and
interpreted consistent with the provisions of such Treasury Regulation, as
amended from time to time; recognizing however, that the definition of Change
in
Control in this Agreement may be more restrictive in certain respects than
the
definition contained in Treasury Regulation Section 1.409A-3(i)(5).
1.7. "Code"
shall mean the Internal Revenue Code of 1986, as amended.
1.8. "Company"
shall mean AGL Resources Inc., or a successor thereto.
1.9. "Consummation
of a Change in Control Transaction" shall mean the earlier of the date on
which a person or Group first becomes the beneficial owner of the requisite
number of securities of the Company described in Sections 1.6(a) or (b), the
date as of which a majority of the Board has been replaced, as described in
Section 1.6(c), or the date on which the person or Group acquires the requisite
percentage of Company assets, as described in Section 1.6(d).
1.10. "Coverage
Period" shall mean the period beginning on the earlier of (a) the date of an
Announcement, (b) the date of a Change in Control, or (c) the date of the
Consummation of a Change in Control Transaction, and ending on the earlier
of
(i) the second anniversary of the date of the Consummation of a Change in
Control Transaction, (ii) if applicable, the date the Company publicly announces
it is abandoning the transaction or event that was the subject of an
Announcement, or (iii) if applicable, the date the Company publicly announces
it
is abandoning the transaction that constituted a Change in Control pursuant
to
Section 1.6(b).
1.11. "Disability"
shall mean, for purposes of this Agreement, the Executive's absence from the
full-time performance of the Executive's duties pursuant to a determination
made
in accordance with the procedures established by the Company in connection
with
the Company's long-term disability benefits plan (as in effect as of the
earliest of the date of the Announcement, the date of a Change in Control or
the
date of the Consummation of a Change in Control Transaction) that the Executive
is disabled as a result of incapacity due to physical or mental
illness.
1.12. "Earned
and Unused Vacation" shall mean the difference between (a) Earned Vacation
(as hereinafter defined), and (b) the actual number of hours of vacation taken
by the Executive from January 1 of the calendar year in which the Qualifying
Termination occurs through and including the date of the Qualifying Termination;
provided that if the difference between (a) and (b) is a negative number, then
Executive's Earned and Unused Vacation shall be deemed to be zero.
1.13. "Earned
and Unused Vacation Pay" shall mean the product of (a) the Executive's
annual rate of base salary in effect on the date of the Qualifying Termination
divided by 2080, and (b) the hours of Executive's Earned and Unused
Vacation.
1.14. "Earned
Vacation" shall mean the product of (a) the aggregate number of hours of
vacation which Executive is entitled to take during the calendar year in which
the Qualifying Termination occurs, and (b) the quotient obtained by dividing
(i)
the number of calendar days from January 1 of the year in which the Qualifying
Termination occurs through and including the date of the Qualifying Termination,
by (ii) 365.
1.15. "Effective
Date" shall mean December 1, 2007.
1.16. "Good
Reason" shall mean the occurrence of one or more of the following without
the Executive's express written consent:
(a) any
material diminution in the Executive's position, duties or responsibilities
with
the Company or any change that would constitute a material adverse alteration
in
the Executive's duties, responsibilities or other conditions of employment,
from
those in effect as of the earliest of the date of the Announcement, the date
of
a Change in Control or the date of the Consummation of a Change in Control
Transaction; provided, that, it will be deemed that this purpose it would be
a
material diminution in the Executive's position, duties or responsibilities
with
the Company if the Executive retains the same title or position with the Company
but the Company was not a public company and the Executive did not have the
same
title or position at the ultimate public parent of the Company;
(b) any
material diminution in the Executive's rate of annual base salary or annual
incentive compensation opportunity (i.e., annual cash bonus opportunity under
the Annual Incentive Plan or a successor plan) from the rate of annual base
salary and annual incentive compensation opportunity in effect as of the
earliest of the date of the Announcement, the date of a Change in Control or
the
date of the Consummation of a Change in Control Transaction;
(c) any
material diminution in the
authority, duties, or responsibilities of the supervisor to whom the Executive
is required to report, including a requirement that the Executive report to
a
corporate officer or employee instead of [this provision only for CEO-reporting
directly to the Board] [and for CFO and GC-reporting directly to the CEO or
the
Board];
(d) any
action or inaction that constitutes a material breach by the Company of any
agreement under which the Executive provides services to the Company;
or
(e) any
material change in the geographic location at which the Executive must perform
services for the Company, which the Company has determined is a change in the
Executive's primary employment location to a location which is in excess of
fifty (50) miles from the Executive's primary employment location as of the
earliest of the date of the Announcement, the date of a Change in Control or
the
date of the Consummation of a Change in Control Transaction.
1.17. "Prorated
Annual Bonus" shall mean a payment equal to the product of (a) times (b),
where (a) is the Annual Bonus Amount, and (b) is a fraction, the numerator
of
which is the number of days in the calendar year in which the Qualifying
Termination occurs that the Executive was employed by the Company or one of
its
subsidiaries, and the denominator of which is 365.
1.18. "Qualifying
Termination" shall mean the occurrence of anyone or more of the following
events:
(a) the
termination of Executive's employment by the Company or its subsidiary, as
applicable, without Cause; or
(b) Executive's
termination of his or her employment with the Company or its subsidiary, as
applicable, for Good Reason.
A
Qualifying Termination shall not include a termination of Executive's employment
by reason of the Executive's death, the Executive's Disability, the Executive's
termination of his or her employment without Good Reason, or the termination
of
the Executive's employment for Cause. To qualify as a termination for
Good Reason, the Executive must provide notice to the Company within ninety
(90)
days of the initial existence of the condition constituting Good Reason and
give
the Company thirty (30) days to remedy such condition.
SECTION
2
TERM
OF
AGREEMENT
2.1. Term. Subject
to Section 2.2, this Agreement shall commence on the Effective Date and shall
continue in effect until November 30, 2009 (the "Term").
2.2. Modification
of Term. In the event that an Announcement or a Change in Control
occurs during the Term, the term of this Agreement shall automatically and
irrevocably become a term ending on the later of the last day of the Term or
the
second anniversary of the date of Consummation of a Change in Control
Transaction. This Agreement shall be assigned to, and shall be
assumed by, any successor to the Company upon Consummation of a Change in
Control Transaction. During the modified term pursuant to this
section, this Agreement shall not be terminated or amended, altered or nullified
by the Company or its successor without the Executive's written
consent.
2.3. No
Assurances. Executive acknowledges and agrees that, except as is
otherwise expressly provided in Section 2.2, (i) there is no assurance that,
upon the expiration of the Term of this Agreement, this Agreement will be
renewed or extended, (ii) the Company has no obligation to renew or extend
this
Agreement, and (iii) Executive has no right to any such renewal or
extension. Executive acknowledges and agrees further that in the
event the Company, in its sole discretion, elects to offer Executive a renewal
or extension of this Agreement or a new agreement following the expiration
of
the Term of this Agreement, except for an extension pursuant to Section 2.2,
there can be no assurance as to the terms of any such renewal, extension or
new
agreement, the Company has made no representations to Executive with respect
thereto and nothing contained in this Agreement shall be relevant, or of any
precedential value whatsoever, in determining the terms of any renewal,
extension or new agreement.
SECTION
3
CHANGE
IN
CONTROL BENEFITS
3.1. Qualifying
Termination Payments and Benefits. Subject to Section 4 hereof,
the Company shall provide to the Executive the payments and benefits described
below if the Executive has a Qualifying Termination during the Coverage
Period.
(a) Accrued
Benefits and Prorated Annual Bonus. As soon as practicable (but
no later than fifteen (15) business days or, if applicable, the date specified
in Section 4.1(b) hereof) following the Qualifying Termination, the Company
shall pay to the Executive a lump sum cash payment equal to Executive's (i)
Accrued Benefits, and (ii) Prorated Annual Bonus. Payments made under this
subparagraph (a) shall constitute full satisfaction to the Executive for the
accrued pay and benefits described in this subparagraph.
(b) Severance
Benefit. As soon as practicable (but no later than fifteen (15)
business days or, if applicable, the date specified in Section 4.1(b) hereof)
following the Qualifying Termination, the Company shall pay to the Executive
a
lump sum cash payment equal to two (2) multiplied by the sum of (i) and (ii),
where (i) equals the greater of the Executive's annual rate of base salary
in
effect upon the date of the Qualifying Termination, or the Executive's annual
rate of base salary in effect as of the earliest of the date of the
Announcement, the date of a Change in Control or the date of the Consummation
of
a Change in Control Transaction, and (ii) equals the Annual Bonus
Amount.
(c) Supplemental
Retirement Benefits. As soon as practicable (but no later than
fifteen (15) business days or, if applicable, the date specified in Section
4.1(b) hereof) following the Qualifying Termination, the Company shall pay
to
the Executive a lump sum cash payment equal to
(i) the
excess of (A) the present value (determined as of the date of the Qualifying
Termination) of the lump-sum actuarial equivalent of the benefit the Executive
would have received, giving the Executive credit for two (2) additional years
of
age and service (for all purposes, including, but not limited to, vesting and
accrual of benefits) (such two (2) additional years, referred to hereinafter
as
the "Severance Period"), under (1) the AGL Resources Inc. Retirement Plan,
as
amended (the "Retirement Plan"), and (2) the AGL Resources Inc. Excess Benefit
Plan (the "Excess Plan"), in each case utilizing actuarial assumptions
(including the discount rate used in the present value calculation) no less
favorable to the Executive than those in effect under the Retirement Plan
immediately prior to the earliest of the date of the Announcement, the date
of a
Change in Control or the date of the Consummation of a Change in Control
Transaction, and assuming that, for purposes of determining benefits under
the
Retirement Plan and the Excess Plan, the benefits would have commenced at the
end of the Severance Period (or, if later, the earliest date distribution of
the
Executive's benefits could commence under the plans) and the Executive's covered
annual compensation ("Covered Compensation") during the Severance Period would
have been equal to the Executive's annual rate of Covered Compensation at the
time of the Qualifying Termination or, if greater, at the earliest of the date
of the Announcement, the date of a Change in Control or the date of the
Consummation of a Change in Control Transaction, over (B) the present value
(determined as of the date of the Qualifying Termination) of the lump-sum
actuarial equivalent of the Executive's actual benefits accrued as of the date
of the Qualifying Termination, if any, under the Retirement Plan and the Excess
Plan (assuming the benefits would have commenced at the end of the Severance
Period (or, if later, the earliest date distribution of the Executive's benefits
could commence under the plans), and utilizing the same actuarial assumptions
as
used above in subsection (A) of this Section 3.1(c)(i)); and
(ii) an
amount equal to the sum of the additional contributions (other than before
tax
and after tax contributions by the Executive) that would have been made or
credited (but, due to the Qualifying Termination, will not otherwise be made
or
credited) during the Severance Period (as defined in Section 3.1(c)(i) above)
by
the Company or a subsidiary to the Executive's account(s) under the AGL
Resources Inc. Retirement Savings Plus Plan, as amended (the "Savings Plan"),
and/or the AGL Resources Inc. Nonqualified Savings Plan, as amended, determined
by assuming that,
(A) the
Executive's employment had continued through the Severance Period;
(B) the
Executive's compensation recognized by each such plan (with respect to the
Savings Plan, subject to any Code limitations on covered compensation under
qualified plans) would, during the Severance Period, have been equal to (1)
the
Executive's annual rate of base salary at the time of the Qualifying Termination
or, if greater, at the earliest of the date of the Announcement, the date of
a
Change in Control or the date of the Consummation of a Change in Control
Transaction, and (2) the Annual Bonus Amount; and
(C) with
respect to matching and/or discretionary contributions, the Executive's amount
of pre-tax deferral contributions and the Company's matching contribution,
in
each year during the Severance Period, would have been equal to the maximum
amount allowed under the applicable plan at the time of the Qualifying
Termination or, if greater, at the earliest of the date of the Announcement,
the
date of a Change in Control, or the date of the Consummation of a Change in
Control Transaction.
(d) Stock
Options Restricted Stock, Performance-Based Stock and Other Long-Term Incentive
Awards. Subject to Section 4 hereof, in the event of a Qualifying
Termination during the Coverage Period, any outstanding stock options,
restricted stock, performance share, performance unit or other long-term
incentive awards of the Executive shall become vested and/or exercisable in
accordance with the terms of the plan and/or award agreements under which such
grants and awards were made as if a change in control (as defined in each
applicable plan or award agreement) had occurred immediately prior to, and
on
the same day as, the Qualifying Termination. Upon the occurrence of a
change in control (as defined in each applicable plan or award agreement),
all
grants and awards shall be subject to the provisions of the plan and award
agreements under which they were made. With regard to any outstanding
stock options, the Executive shall have a period of one (1) year (subject to
the
expiration of the original term of the option) following the date of the
Qualifying Termination in which to exercise such options; provided that such
extension of the period to exercise shall not extend the exercise period beyond
the earlier of (i) the latest date upon which the option could have expired
by
its terms, or (ii) the tenth (10th) anniversary
of
the original date of grant; and further provided that if the plan or option
agreement under which such options were granted provides a longer period of
exercise for which the Executive would be eligible, then such longer period
shall be available to the Executive.
(e) Welfare
Benefits.
(i) The
Company shall
provide the Executive with continued life insurance and disability insurance
coverage (provided, however, that long-term disability insurance coverage shall
not be provided if, following the Executive's termination of employment, the
Executive is not eligible to receive coverage under the Company's group
long-term disability insurance policy because the Executive is no longer an
employee) on the same basis (including premium) as active employees until the
earlier of (i) twenty four (24) months after the Executive's Qualifying
Termination, or (ii) the commencement of comparable coverage with a subsequent
employer.
(ii) In
addition, as long
as the Executive pays a monthly premium equal to the amount which is the COBRA
premium for such coverage, the Company shall provide the Executive and, as
applicable, the Executive's eligible dependents with continued medical and
dental coverage, on the same basis (excluding premiums) as provided to the
Company's active executives and their dependents, as applicable, until the
earlier of (i) twenty four (24) months after the Executive's Qualifying
Termination, or (ii) the date the Executive is first eligible for comparable
coverage with a subsequent employer. As a separate payment under this
Agreement, each month coverage continues under this clause (ii), the Company
shall pay to the Executive an amount equal to the excess of the COBRA premium
for such coverage over the active employee cost for such medical coverage,
each
as determined on the date of the Executive’s Qualifying
Termination.
(iii) The
medical coverage
provided under this section shall not count against any COBRA continuation
coverage required by law.
(f) Outplacement
Benefits. If so requested by the Executive, outplacement services
shall be provided for up to one (1) year following the Qualifying Termination
by
a professional outplacement provider; provided, that, such outplacement services
shall be provided at a cost to the Company of not more than 25% of the
Executive's base salary in effect as of the date of the
Announcement.
SECTION
4
LIMITATIONS
ON PAYMENTS AND EXCISE TAX
4.1. Limitation
on Payments and Benefits.
(a) If
any of the payments and benefits provided under this Agreement and/or under
any
other agreement with, or plan of, the Company or one of its subsidiaries (the
"Total Payment") (a) constitute a "parachute payment" as defined in Code Section
280G and exceed three (3) times the Executive's "base amount" as defined under
Code Section 280G(b)(3) by less than ten percent (10%) of three (3) times the
Executive's base amount, and (b) would, but for this Section 4.1, be subject
to
the excise tax imposed by Code Section 4999, then the Executive's payments
and
benefits under this Agreement shall be reduced and payable only as to the
maximum amount which would result in no portion of such Total Payment being
subject to excise tax under Code Section 4999.
(b) If
a reduction of the Total Payment is necessary under this section, the Executive
shall be entitled to select which payments and/or benefits will be reduced
and
the manner and method of any such reduction. Within ten (10) days
after the amount of any required reduction in payments and benefits is finally
determined under Section 4.3, the Executive shall notify the Company in writing
regarding which payments and benefits are to be reduced. If no
notification is given by the Executive, the Company will determine which
payments and/or benefits to reduce. If the Company is required to
determine which payments and/or benefits to reduce, it shall make such
determination as soon as practicable, but no later than the fifteenth (15th)
day
after the amount of any required reduction in payments and benefits is finally
determined under Section 4.3. If, as a result of any reduction
required by this section, amounts previously paid or benefits previously
provided to the Executive exceed the amount to which the Executive is entitled,
the Executive will promptly return the excess amount to the
Company. In no instance shall the reductions provided in this Section
4.1 cause the payments required by Sections 3.1(a), (b) or (c) be made any
later
than two and one-half (2½) months after the end of the year in which the
Executive terminates employment with the Company and its
Subsidiaries.
4.2. Gross
Up Payments for Excise Tax. If the Total Payment constitutes a
"parachute payment" as defined in Code Section 280G and exceeds three (3) times
the Executive's "base amount" as defined under Code Section 280G(b)(3) by at
least ten percent (10%) of three (3) times the Executive's base amount, the
Company shall provide to Executive, in cash, an additional payment in an amount
to cover the full excise tax due under Code Section 4999 (including any interest
and/or penalties), plus the Executive's city, state and federal income and
employment taxes on this additional payment (the "Gross-Up
Payment"). Any amount payable under this Section 4.2 shall be paid as
soon as possible following the date of the Executive's Qualifying Termination,
but in no event later than the end of the Executive's taxable year next
following the Executive's taxable year in which the related taxes are remitted
to the taxing authority.
4.3. Accounting
Firm. All determinations required to be made under this Section
4, including whether reductions are necessary or whether a Gross-Up Payment
is
required, the amount of any such reduction or Gross-Up Payment and the
assumptions to be used in determining such reduction or payment, shall be made
by the accounting firm selected by the Company (the "Accounting
Firm"). The Accounting Firm shall provide detailed supporting
calculations both to the Company and to Executive within fifteen (15) business
days of the receipt of a notice from the Company or Executive that there has
been a Qualifying Termination or another event that could result in parachute
payments under Code Section 280G, or such earlier time as is requested by the
Company. The Company shall not select as the Accounting Firm for this
purpose any accountant or auditor for the individual, entity, or group effecting
the Change in Control transaction (other than the Company) or any accountant
or
auditor that is precluded from providing the services required by this Section
4. All fees and expenses of the Accounting Firm shall be borne solely
by the Company.
4.4. Subsequent
Recalculation. If Executive is entitled to a Gross-Up Payment
under Section 4.2 and the Internal Revenue Service subsequently increases the
excise tax owed by the Executive, the Company shall reimburse the Executive
for
the full amount necessary to make the Executive whole on an after-tax basis
(less any amounts received by the Executive that the Executive would not have
received had the computations initially been computed as subsequently adjusted),
taking into consideration the amount of any underpaid excise tax, and any
related interest and/or penalties owed to the Internal Revenue
Service. This reimbursement for the Gross-Up Payment increase shall
be made in no event later than the end of the Executive's taxable year next
following the Executive's taxable year in which the related taxes are remitted
to the taxing authority.
SECTION
5
SUCCESSORS
AND ASSIGNMENT
5.1. Successors. The
Company shall require any successor (whether pursuant to a Change in Control
transaction, direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform the Company's obligations
under
this Agreement, in the same manner and to the same extent that the Company
would
be required to perform them if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall constitute a material
breach of the Agreement and shall entitle the Executive to terminate the
Executive's employment with Good Reason immediately prior to or at any time
after such succession. Any successor to the Company shall be deemed
to be the Company for all purposes of this Agreement.
5.2. Assignment
by Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive's executor and/or administrators, heirs, devisees,
and legatees. If the Executive should die while any amount would be
payable to Executive hereunder had the Executive continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the
terms of this Agreement to the Executive's estate. Executive's rights
hereunder shall not otherwise be assignable.
SECTION
6
CONFIDENTIALITY;
NON-DISPARAGEMENT;
NON-SOLICITATION;
TRADE SECRETS
Without
the prior written consent of the Company, Executive agrees hereby not to
disclose or use, directly or indirectly (except as may be required for the
performance of duties assigned by the Company or one of its subsidiaries or
as
may be required by a court of competent jurisdiction), any trade secret or
other
confidential information pertaining to the conduct of the Company's business,
unless and until such trade secret or confidential information is in the public
domain. The Company's business, as that term is used herein,
includes, but is not limited to, the Company's and any of its subsidiaries'
records, processes, methods, data, reports, information, documents, equipment,
training manuals, customer lists and business secrets. Executive
further agrees that, during the twenty-four (24) month period following a
Qualifying Termination, Executive shall not initiate contact with employees
of
the Company or any of its subsidiaries for employment outside the Company or
one
of its subsidiaries, including those employees who were employed by the Company
or one of its subsidiaries up to and including the date of the Qualifying
Termination; provided, however, that nothing contained herein shall prevent
Executive from responding to contacts initiated by such
employees. Except as may be compelled by a court of competent
jurisdiction or as may otherwise be required by law, Executive shall take no
action (including without limitation the making of any oral or written
statement) which action damages the reputation of the Company or any of its
subsidiaries.
SECTION
7
MISCELLANEOUS
7.1. Contractual
Rights to Benefits. Except as expressly stated herein, nothing
herein contained shall require or be deemed to require the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder;
provided, however, that the Company may segregate, earmark, or otherwise set
aside any funds or other assets, in trust or otherwise as it deems
appropriate.
7.2. Obligation
Absolute; No Effect on Other Rights. Except for amounts that may
be owed to the Company pursuant to Section 7.3 hereof, the obligations of the
Company to make the payments and provide the benefits to the Executive and
the
Executive's dependents, and to make the arrangements provided for herein shall
be absolute and unconditional and shall not be reduced by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or
other right which the Company may have against the Executive or a third party
at
any time, nor shall the amount of any payment or benefit hereunder (except
as
provided for in Section 3.1(e)(ii) hereof) be reduced by any compensation earned
by Executive as a result of employment by another employer. Except as
provided in Section 3.1(a) with respect to Accrued Benefits and the Prorated
Annual Bonus, and except as otherwise provided in Section 7.8, the provisions
of
this Agreement, and any payment provided for herein, shall not supercede or
in
any way limit the rights, benefits, duties or obligations which the Executive
may have now or in the future under any benefit, incentive or other plan or
arrangement of the Company or a subsidiary or any other agreement with the
Company or a subsidiary.
7.3. Legal
Fees and Expenses. In addition to all other amounts payable to
the Executive under this Agreement, the Company shall pay the Executive's legal
fees and expenses (including, without limitation, any and all court costs and
attorneys' fees and expenses), as incurred by the Executive in connection with
or as a result of any claim, action or proceeding brought by the Company or
the
Executive with respect to or arising out of this Agreement or any provision
hereof; provided, however, in the case of an action brought by the Executive,
if
it is determined by an arbitrator or by a court of competent jurisdiction that
such action was frivolous or without merit, any remaining unpaid legal fees
or
expenses shall not be paid and the Executive shall repay to the Company all
amounts previously paid by the Company under this Section 7.3. No
payment or reimbursement under this Section 7.3 shall be requested or made,
after the end of the calendar year following the calendar year in which the
expense was incurred.
7.4. Dispute
Resolution. Notice of any dispute or controversy arising under
this Agreement shall be provided in writing to the other party. If
such dispute is not resolved by mutual agreement of the parties within 60
calendar days of the provision of such notice, Executive shall have the right
and option to elect (in lieu of litigation) to have any such dispute or
controversy settled by binding arbitration. Such arbitration shall be
conducted before a panel of three (3) arbitrators sitting in a location selected
by Executive in the metropolitan area nearest to, and in the same county as,
the
Executive's place of residence, in accordance with the rules of the American
Arbitration Association then in effect. Executive's election to
arbitrate, as herein provided, and the decision of the arbitrators in that
proceeding, shall be binding on the Company and Executive. The
Company may elect to have a dispute or controversy settled by binding
arbitration only if such dispute or controversy arises under Section 6 of this
Agreement.
7.5. Notices. Any
notice required to be delivered to the Company, any of its affiliates or the
Committee by Executive hereunder shall be properly delivered to the Company,
any
of its affiliates or the Committee when personally delivered to, or received
through the U.S. mail, postage prepaid, by:
Attn:
General Counsel
00
Xxxxxxxxx Xxxxx, 00xx
Xxxxx
Xxxxxxx,
XX 00000
Any
notice required to be delivered to Executive by the Company, its affiliates
or
the Committee hereunder shall be properly delivered to Executive when personally
delivered to, or actually received through the U.S. mail, postage prepaid,
by
Executive.
7.6. Amendment. Except
as otherwise provided in Sections 2.2 and 2.3 hereof, no provision of this
Agreement may be amended, altered, modified, waived or discharged unless such
amendment, alteration, modification, waiver or discharge is agreed to in a
writing signed by both the Executive and such officer of the Company as is
specifically designated by the Committee or the Board. No waiver by
any party to this Agreement, at any time, of any breach by the other of, or
of
compliance by other party with, any condition or provision of this Agreement
to
be performed or complied with by such other party shall be deemed a waiver
of
any similar or dissimilar provision or condition of this Agreement or any other
breach or failure to comply with the same condition or provision at any prior
or
subsequent time.
7.7. Employment
Status. Nothing herein contained shall be deemed to create an
employment agreement between the Company and Executive providing for the
employment of Executive by the Company for any fixed period of
time. Subject to the terms of any other agreement between the Company
or a subsidiary and the Executive, if any, Executive's employment with the
Company or a subsidiary is terminable at will by the Company or a subsidiary
or
Executive and each shall have the right to terminate Executive's employment
with
the Company or a subsidiary at any time, with or without Cause and with or
without Good Reason, subject to the Company's obligation to provide any payments
or benefits required hereunder.
7.8. Entire
Agreement. Except as expressly provided herein, no agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party to this
Agreement. This Agreement represents the entire agreement between the
parties with respect to the subject matter hereof, and supersedes all prior
discussions, negotiations, and agreements concerning the subject matter hereof,
including, but not limited to, any prior severance agreement made between
Executive and the Company or any of its subsidiaries; provided, however, that
nothing contained herein shall prevent the Executive from receiving any
severance benefits to which he or she is entitled under the terms of a Company
or subsidiary provided severance plan if the Executive's termination of
employment does not qualify as a Qualifying Termination within the Coverage
Period; provided, further, that nothing contained herein shall prevent the
Executive from receiving benefits to which he or she may be entitled under
any
employee or retiree benefit or incentive plan maintained or contributed to
by
the Company or one of its subsidiaries, including, without limitation, the
AGL
Resources Inc. Executive Post Employment Medical Benefit Plan or the AGL
Resources Inc. retiree medical plan.
7.9. Tax
Withholding. The Company shall withhold from any amounts payable
under this Agreement all federal, state, city, payroll or other taxes legally
required to be withheld.
7.10. Severability. In
the event any provision of the Agreement shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of
the Agreement, and the Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.
7.11. Applicable
Law. To the extent not preempted by the laws of the United
States, the law of the State of Georgia shall be the controlling law in all
matters relating to this Agreement.
7.12. Specified
Employee. If the Executive is considered a "specified employee"
(as that term is defined in Treasury Regulations Section 1.409A-1(i)), as of
the
date of the Executive's separation from service, payments of amounts under
this
Agreement which are considered "deferred compensation" under Code Section 409A
and paid based upon a separation from service may not be made or otherwise
begin
until the date that is six months after the date of separation from service
(or,
if earlier than the end of the six-month period, the date of death of the
specified employee) to the extent such is required pursuant to Code Section
409A.
7.13. 409A. It
is the intent of the parties to this Agreement that this Agreement comply with
Code Section 409A and the regulations issued pursuant thereto and the provisions
of this Agreement shall be interpreted to be consistent therewith.
7.14. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be an
original and all of which shall be deemed to constitute one and the same
instrument.
IN
WITNESS WHEREOF, the Company and Executive have executed this Agreement, to
be
effective as of the day and year first written above.
COMPANY:
By: /s/
Xxxx X. Xxxxxxxxxxx XX
Title: Chairman,
President and Chief Executive Officer
EXECUTIVE:
/s/
Xxxxxx X. Xxxxx
Signature
[THIS
DOCUMENT HAS BEEN EXECUTED IN DUPLICATE]
