CONTINUITY AGREEMENT
EXHIBIT
10.1
This
Continuity Agreement ("Agreement") is entered into as of the 30th
day of
September, 2005, 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
be deemed to have occurred when:
(a) any
"person" as defined in Section 3(a)(9) of the Securities Exchange Act of
1934,
as amended (the "Exchange Act"), and as used in Section 13(d) and 14(d) thereof,
but excluding the Company and any subsidiary and any employee benefit plan
sponsored or maintained by the Company or any subsidiary (including any trustee
of such plan acting as trustee), directly or indirectly, becomes the "beneficial
owner" (as determined pursuant to Rule 13d-3 under the Exchange Act), of
securities of the Company representing 20% or more of the combined voting
power
of the Company's then outstanding securities (unless the event causing the
20%
threshold to be crossed is an acquisition of securities directly from the
Company); or
(b) the
shareholders of the Company shall approve (i) any merger, share exchange,
reorganization, or other business combination of the Company, (ii) any sale
of
50% or more of the Company's assets, or (iii) any combination of the foregoing
transactions (the "Transactions"), other than a Transaction immediately
following which the shareholders of the Company and any trustee or fiduciary
of
any Company employee benefit plan immediately prior to the Transaction own
at
least 80% of the voting power, directly or indirectly, of (A) the surviving
corporation to any such merger, share exchange, reorganization, or other
business combination, (B) the purchaser of the Company's assets, (C) both
the
surviving corporation and the purchaser in the event of any combination of
Transactions, or (D) the parent company owning 100% of such surviving
corporation, purchaser or both the surviving corporation and the purchaser,
as
the case may be; or
(c) within
any twenty-four month period, the persons who were directors of the Board
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of or with
the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors (so long as such director was not nominated by a person
who
has entered into an agreement to effect a Change in Control or expressed
an
interest to cause such a Change in Control).
1.7. "Code"
shall
mean the Internal Revenue Code of 1986, as amended.
1.8. "Company"
shall
mean AGL Resources Inc., or a successor.
1.9. "Consummation
of a Change in Control Transaction"
shall
mean the earlier of the date on which a person first becomes the beneficial
owner of the requisite number of securities of the Company described in Section
1.6(a), the date on which a transaction described in Section 1.6(b)
is
actually closed (not the date on which the shareholders' approval is obtained),
or the date on which the Incumbent Directors cease to constitute a majority
of
the Board as described in Section 1.6(c).
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 October 1, 2005.
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 one of its subsidiaries 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, for this
purpose, it shall be a material diminution of Executive's position if the
Executive retains the same position but with a non-public company and/or
if the
Executive does not report directly to the Company’s Chief Executive
Officer;
(b) any
adverse change in the Executive's rate of annual base salary or incentive
compensation opportunity from the rate of annual base salary and 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
failure by the Company either to continue in effect, or to provide in the
aggregate, reasonably similar retirement and welfare benefit plans or coverages
and any other similar benefits, policies or programs in which the Executive
was
a participant 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 (unless such failure or discontinuance of benefits is applicable
to
all senior executives of the Company and its subsidiaries); or
(d) any
failure of the Company to obtain from any successor to the Company an agreement
reasonably satisfactory to the Executive to assume this Agreement and to
agree
to perform the Company's obligations hereunder.
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 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.
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 for a period of two (2) years (the "Term"). The Term shall
be
extended one (1) year on the first anniversary of the Effective Date and
on each
anniversary thereafter unless either party gives notice of non-extension
prior
to any such anniversary.
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 three (3) 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 three (3) additional
years
of age and service (for all purposes, including, but not limited to, vesting
and
accrual of benefits) (such three (3) 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 and Performance-Based Stock 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 similar 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 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.
The
Company shall provide the Executive and, as applicable, the Executive's eligible
dependents with continued welfare benefits coverage, including, but not limited
to, medical, dental, 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)
thirty-six (36) months after the Executive's Qualifying Termination, or (ii)
the
commencement of comparable coverage with a subsequent employer; provided,
however, that such continued coverage 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.
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 thirty (30) calendar days after such
date.
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.
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 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.
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 or the Committee by Executive
hereunder shall be properly delivered to the Company 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 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 either
party, at any time, of any breach by the other party of, or of compliance
by the
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. 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. 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/
Xxxxx X. Xxxxxxxx
Title:
Chairman, President and Chief
Executive
Officer
EXECUTIVE:
/s/
Xxxxxx Xxxxx
Signature
[THIS
DOCUMENT HAS BEEN EXECUTED IN DUPLICATE.]
