EXHIBIT 10.5
April 16, 2001
Ms. Susan A. McLaughlin
14 Montclair Drive NE
Atlanta, GA 30309
Dear Sue:
This letter is a formal offer of employment to you for the position of
Executive Vice President and Chief Operating Officer of AGL Resources Inc.
("AGLR"). You will also hold the title of President, Atlanta Gas Light Company.
It is intended that in the event the CEO becomes Chairman of AGL Resources, the
title of President will be relinquished to you as well. In this position, you
will have offices at both the AGLR headquarters at 817 West Peachtree Street and
at 1251 Caroline Street. You will report directly to me.
Please review the terms outlined below, and if these terms are
satisfactory to you, please sign the acceptance at the end of this letter and
return the original to Ms. Melanie M. Platt, 817 West Peachtree Street, 10th
Floor, Atlanta, GA 30308. This offer will remain open for fifteen (15) calendar
days. If you accept this offer, you will begin employment as Chief Operating
Officer of AGLR effective as of May 1, 2001.
Below is a general discussion of the various components of the
compensation and benefits package you are to receive in this position:
Base Salary: The initial base salary will be $375,000 per year, to be
paid on a biweekly basis. Your base salary will be
reviewed annually.
Signing Incentives: As an inducement for you to enter employment with AGLR, the
Company agrees to provide the following to you upon your
hire:
1) Cash bonus of $100,000;
2) As of your first day of employment, AGLR will grant
to you a nonqualified stock option for 75,000
shares of Company Stock with a per share exercise
price equal to the fair market value of the stock
at that time, under the terms of AGLR's Long-Term
Incentive Plan ("LTIP"). This stock option will
become 33 1/3%
3) exercisable on each anniversary of your date of
hire and will include a reload feature; and
4) As of your first day of employment, AGLR will award
you 8,000 shares of Restricted Stock under the
terms of the LTIP. This award of Restricted Stock
will become 33 1/3% vested on each anniversary of
your date of hire.
Annual Incentives: This position is eligible to participate in AGLR's Annual
Team Incentive Plan for each fiscal year with a target
incentive of 55% of Base Salary (the specifics of the
performance targets and weighting of corporate, business
unit and personal objectives will be determined upon your
employment). For the fiscal year ending September 30, 2001,
you will be guaranteed a minimum bonus of $100,000.
Long-Term
Incentives: For subsequent fiscal years, grants and awards will be made
as determined and approved by the Board of Directors under
the terms of the LTIP.
Continuity
Agreement: The Company agrees to enter into a three-year Continuity
Agreement with you that will provide severance for you in
the event you are terminated from employment during a
period of 24 months following a change in control of the
Company. This agreement will provide the same protections
for you as are provided to other senior level officers of
the Company.
Stay Bonus: In the event the position of CEO becomes vacant during your
first three (3) years of employment with the Company, and
regardless of whether the CEO position is filled by you or
someone else, if you remain in the Company's employ for a
period of at least six (6) months following the new CEO's
date of hire or promotion, you will become entitled to a
lump sum payment equal to one year of your Base Salary.
This lump sum amount shall not be payable if the terms and
conditions of your Continuity Agreement apply to your
termination of employment.
Severance: You will be eligible to participate in the AGLR Employee
Severance Plan; provided, that in the event your employment
is terminated by the Company for any reason other than
"cause" (as determined by AGLR), death or disability,
during the first 12 months of your employment, you will
receive the greater of (a) the severance benefit you would
be entitled to under the terms of the Employee Severance
Plan, or (b) an amount equal to one year of annual Base
Salary. This severance benefit shall not be payable if the
terms and conditions of your Continuity Agreement apply to
your termination of employment. This Severance benefit
shall not be payable if your termination of employment
creates a right of payment to you under the terms and
conditions of your Continuity Agreement or your Stay Bonus
provision.
Mentor/Coach: The Company agrees to provide for the services of your
mentor/coach (Mr. Frank Grosser) for a period of one year
following your date of hire up to a maximum cost of
$25,000.
BENEFITS
Flexible Benefits
Plan: AGLR maintains a comprehensive flexible benefits plan,
which includes coverages for medical, dental, and group
term life insurance. In addition, long-term disability
benefits are available, plus medical reimbursement and
dependent care assistance spending accounts.
Retirement Benefits: Pension Plan. Employees are eligible to participate in the
AGLR Retirement Plan (a defined benefit pension plan) as of
the first day of the calendar month following one year of
employment.
401(k) Plan. Employees are eligible to participate in the
AGLR 401(k) plan, known as Retirement Savings Plus (RSP),
as of the first business day following 30 days of
employment. The RSP provides a 65% matching contribution on
deferrals of up to 8% of compensation (however, officers
may be limited to a lesser deferral amount due to
discrimination testing of the RSP).
Nonqualified Savings Plan. To offset the restrictions
placed on contributions by highly compensated employees,
the AGLR Nonqualified Savings Plan (NSP) is a "mirror" of
the RSP and allows participants to take full advantage of
AGLR's matching contribution on contributions up to 8% of
compensation. The NSP generally permits deferrals of up to
50% of compensation and 100% of annual bonus.
Vacation. Immediately upon your employment, you will be eligible for
four (4) weeks of paid vacation.
This letter is an offer of employment. It is not an employment contract
and does not guarantee employment through any specific date. If you accept this
offer, your employment with AGLR will be "at will" and may be terminated by
either you or AGLR at any time without notice.
By accepting this offer, you represent and warrant to AGLR that you are
not bound by any other agreement, written or oral, which would preclude you from
entering into employment by AGLR. In the event of a breach by you of this
provision that results in costs or damage to AGLR, you agree to indemnify and
hold AGLR harmless with respect to such costs or damage.
If these terms are satisfactory, please sign the acceptance below and
return the original of this letter to Melanie Platt. If you desire more detail
on any aspect of the above, we will be happy to provide it. We look forward to
working with you.
Very truly yours,
Paula G. Rosput
President and Chief Executive Officer
The above offer is ACCEPTED
on the 19th day of April , 2001.
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/s/ Susan A. McLaughlin
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Susan A. McLaughlin