CONTINUITY AGREEMENT
Exhibit 10.1a
This
Continuity Agreement ("Agreement") is entered into as of December 1, 2009, 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
Xxxx Xxxxxxxxxxx (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 Compensation and Management Development Committee of the Company's Board of
Directors (the "Committee") has authorized the Company to enter into continuity
agreements with those key executives of the Company and its subsidiaries
designated by 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 average of the annual incentive payments actually paid to the
Executive under the Company's annual incentive program for the three completed
calendar years prior to the calendar year of the Qualifying
Termination.
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 Committee 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, 2009.
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 for 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
action or inaction that constitutes a material breach by the Company of any
agreement under which the Executive provides services to the
Company;
(d) 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; or
(e) 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
reporting directly to the Board.
1.17. "Prorated Annual
Bonus" shall mean a payment equal to the product of (a) times (b), where
(a) is the greater of the (i) target annual incentive payment (i.e., annual cash
bonus opportunity under the Annual Incentive Plan or a successor plan) for the
calendar year of the Qualifying Termination, or (ii) actual annual incentive
payment which would be paid to the Executive for the calendar year of the
Qualifying Termination based on actual performance through the date of the
Qualifying Termination, 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 any one 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, 2011 (the "Term").
2.2. Modification of
Term. In the event that an Announcement of 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) 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 the Company in its sole discretion determines
additional time is needed to prepare any necessary calculations under Section
4.1, sixty (60) days) 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) 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.
(d) 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.
(e) 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
4.1. Limitation on
Payments. Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any "payments in the nature of
compensation" (as that term is used in Section 280G of the Code and any
regulations promulgated thereunder) by the Company or any of its affiliated
companies to or for the benefit of the Executive (whether paid or payable
pursuant to the terms of this Agreement or otherwise) ("Payments") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties would be incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Payments shall be either
(i) payable in full or (ii) reduced to one dollar less than the amount that
would constitute a "parachute payment" under Section 280G of the Code (the
"Reduced Amount"), whichever of the foregoing amounts, taking into account the
applicable taxes, including, without limitation, federal, state and local income
and employment taxes and the Excise Tax, results in the receipt by the
Executive, on an after-tax basis, of the greatest amount of
Payments. If the Payments are not reduced pursuant to this Section
4.1, Executive shall be responsible for payment of any Excise Tax resulting from
the Payments. If the Payments are reduced, they shall be reduced in
the following order of priority: (A) Payments under Section 3.1(b), (B) Payments
under Section 3.1(e), (C) Payments under Section 3.1(d)(ii), (D) other Payments
to be provided on or after the Executive's termination of employment and (E)
other Payments to be provided prior to the Executive's termination of
employment; provided, however, that only Payments (or portions of Payments)
that, if reduced, would reduce the total amount of "parachute payments" (as that
term is used in Section 280G of the Code) shall be reduced. If there
is a question as to which Payments within each of categories (D) and (E) of the
prior sentence are to be reduced first, such Payments shall be reduced in
reverse order beginning with Payments that are to be paid the farthest in time
from the date on which the "change in ownership or effective control" (as that
term is used in Section 280G of the Code) or "change in ownership of a
substantial portion of the assets" (as that term is used in Section 280G of the
Code), as the case may be, shall have occurred.
4.2. Accounting
Firm. All determinations required to be made under this
Section 4, including, without limitation, whether the Payments must be reduced,
the amount of any Excise Tax to be paid by the Executive, the amount and order
of any reductions and the assumptions to be utilized in arriving at such
determinations, shall be made by such nationally recognized registered public
accounting firm as may be designated by the Company (the "Accounting
Firm"). The Accounting Firm shall provide detailed supporting
calculations to the Company and the Executive within 15 business days after the
Date of Termination, and/or at such earlier time as may be requested by the
Company and the Executive. All fees and expenses of the Accounting
Firm shall be paid solely by the Company. Any determination by the
Accounting Firm shall be binding upon the Company and the
Executive.
4.3. Tax
Claim. The Executive shall notify the Company in writing of
any claim or proposed adjustment by the Internal Revenue Service or other taxing
authority ("Claim") that, if successful, would require payment of (i) any Excise
Tax on the Payments, if Payments have been reduced to avoid the Excise Tax or if
no reduction occurred because the Accounting Firm determined no Excise Tax would
be incurred, or (ii) any Excise Tax on the Payments in an amount greater than
that reported by the Company on the Executive's Form W-2 (in the case of either
(i) or (ii), an "Underpayment"). Such notification shall be given as
soon as practicable, but no later than ten (10) business days after the
Executive is informed in writing of such Claim, and shall apprise the Company of
the nature of such Claim and the date on which such Claim is
payable. If the Company desires to contest such Claim, the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such Claim and may, at its sole option, either direct the Executive to pay the
Underpayment and xxx for a refund or contest the Claim in any permissible
manner. The Executive agrees to cooperate with the Company in good
faith in order effectively to contest such Claim, including, without limitation,
providing any information and taking such action as may be reasonably requested
by the Company. The Company's control of the contest shall be limited
to issues that relate to the Underpayment, and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority. The Executive shall be
responsible for payment of the Underpayment. The Company shall pay
directly (or shall promptly reimburse the Executive for) all legal, accounting
and other costs and expenses incurred in connection with any Claim and shall
indemnify the Executive, on an after-tax basis, for any Underpayment incurred by
the Executive pursuant to such Claim. Notwithstanding anything
contained herein to the contrary, any payment or reimbursement by the Company of
costs and expenses incurred in connection with a Claim, as provided herein,
shall be paid promptly, but in all events no later than the last day of the
calendar year following the calendar year in which the Executive remitted the
Underpayment or if, following resolution of a Claim, no Underpayment is paid,
the end of the calendar year following the calendar year in which there is a
final and nonappealable settlement or other resolution of the
Claim. Any indemnification for the Executive's payment of an
Underpayment shall be paid by the Company to the Executive no later than the
last day of the calendar year following the calendar year in which the Executive
remitted the Underpayment.
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. 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/Xxxxxx X.
Xxxxxxx
Title: Lead
Director
EXECUTIVE:
/s/ Xxxx X. Xxxxxxxxxxx
XX
Signature
THIS
DOCUMENT HAS BEEN EXECUTED IN DUPLICATE
