On August 6, 2007, the AGL Resources Inc. (the “Company”) Policy Committee (the “Policy Committee”), which consists of the Company’s eight executive officers, adopted the 2007 AGL Resources Inc. Annual Incentive Plan (the “AIP”). The AIP, which is administered by the Policy Committee, is a cash incentive program that is intended to provide employees of the Company and its subsidiaries with a meaningful opportunity to earn cash awards by working together to achieve the Company’s earnings per share targets, business unit goals and individual employee performance goals. Most full-time employees of the Company and its subsidiaries, including executive officers, are eligible to participate in the AIP.
The Compensation and Management Development Committee (“C&MD Committee”) of the Company’s board of directors is charged with establishing and certifying the corporate performance earnings per share goals that must be achieved in order for associated awards to become payable under the AIP. Pursuant to the terms of the AIP, the Company is required to meet or surpass the established corporate earnings per share performance threshold in order for any incentive awards attributable to corporate or business unit performance to be made. If the corporate performance threshold is not attained, awards attributable solely to individual performance achievement may still be made, but only upon approval of the C&MD Committee.
Under the AIP, a target annual incentive compensation opportunity is provided for each participant based on the participant’s employment classification (“target opportunity”), expressed as a percentage of the participant’s Annual Rate (as defined in the AIP), which, in the case of exempt employees, is equivalent to earned annual base salary. In determining an eligible participant’s actual incentive award under the AIP, various weights are assigned to corporate performance, business unit performance (where applicable) and individual performance. Participants eligible for annual incentive awards generally are eligible to receive awards in amounts up to 200% of their target opportunity under the AIP. Payment of cash awards under the AIP, if any, are intended to be made by the Company to employees in accordance with the terms of the AIP during the first quarter following the performance measurement period. Notwithstanding any of the foregoing, under the terms of the AIP, the Company may amend or terminate the AIP at any time.
The foregoing summary of the AIP is not complete and is qualified in its entirety by reference to the AIP, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.