AGL RESOURCES INC.
1998 COMMON STOCK EQUIVALENT PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Establishment and Purpose. AGL Resources Inc., a Georgia corporation
(the "Company"), hereby establishes the AGL Resources Inc. 1998 Common
Stock Equivalent Plan for Non-Employee Directors (the "Plan"), to be
effective as of January 1, 1998. The purpose of the Plan is to (i)
provide Directors participating in the Plan with an opportunity to
obtain a proprietary interest in the Company, (ii) provide such
Directors with an added incentive to continue in the service of the
Company, and (iii) stimulate such Directors' efforts in promoting the
growth, efficiency and profitability of the Company.
2. Definitions.
(a) "Account" shall mean the bookkeeping account to which a
Participant has Deferred Amounts credited under this Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Beneficiary" shall mean the person or persons (including,
without limitation, the trustees of any testamentary or inter
vivos trust) designated from time to time in writing by a
Participant on an election form provided for said purpose to
receive payments under the Plan after the death of such
Participant, or, in the absence of any such designation or in
the event that such designated persons or person shall
predecease such Participant or shall not be in existence or
shall otherwise be unable to receive such payments, the
person or persons designated under such Participant's last
will and testament or, in the absence of such designation, to
the Participant's estate.
(d) "Change in Control" shall mean the occurrence of any one of
the following events (the terms used in this Section 2(c) with
an initial capital letter shall have the meanings set forth in
this Section 2(c) unless otherwise defined in the Plan):
i. the acquisition by a Person, together with Affiliates
and Associates of such Person, whether by purchase,
tender offer, exchange, reclassification,
recapitalization, merger or otherwise, of a
sufficient number of shares of Common Stock or
Equivalents to constitute the Person an Acquiring
Person; or
ii. during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board cease for any reason to
constitute at least a majority thereof, unless the
election of each director who was not a director at
the beginning of such period has been approved in
advance by a majority of the Continuing Directors
then in office; or
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iii. any merger or consolidation the result of which is
that less than 90 percent of the common stock, Voting
Securities or other equity interests of the surviving
or resulting corporation or other Person shall be
owned in the aggregate by the former shareholders of
the Company, other than Affiliates or Associates of
any party to such merger or consolidation, as the
same shall have existed immediately prior to such
merger or consolidation; or
iv. the sale by the Company, in one transaction or a
series of related transactions, whether in
liquidation, dissolution or otherwise, of assets or
earning power aggregating more than 50 percent of the
assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person
or Persons.
The following definitions shall apply in determining when a
Change in Control has occurred:
(1) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person,
shall become the Beneficial Owner of 10 percent or more of the
shares of Common Stock then outstanding, but shall not include
the Company, any Subsidiary of the Company, or any Person who
or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of 10 percent or more of the
shares of Common Stock as of the effective date of the Plan,
any employee benefit plan of the Company or of any Subsidiary
of the Company [if approved by a majority of the Continuing
Directors], or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan.
(2) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended and in effect on
the effective date of the Plan (the "Exchange Act").
(3) "Associate" shall mean:
(a) any corporation or organization, or parent or
subsidiary of such corporation or organization, of
which a Person is an officer, director or partner or
is, directly or indirectly, the Beneficial Owner of
10 percent or more of any class of equity securities;
(b) any trust or other estate in which a Person has a
beneficial interest of 10 percent or more or as to
which such Person serves as trustee or in a similar
fiduciary capacity; and
(c) any brother or sister (whether by whole or half
blood), ancestor, lineal descendant or spouse of a
Person, or any such relative of such spouse.
(4) "Beneficial Owner" shall mean, with respect to any
securities, any Person who, together with such Person's
Affiliates and Associates, directly or indirectly:
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(a) has the right to acquire such securities (whether
such right is exercisable immediately or only after
the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or
otherwise; provided, a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own:
(i) Securities acquired by participation in
good faith in a firm commitment underwriting
by a Person engaged in business as an
underwriter of securities until the
expiration of 40 days after the date of such
acquisition; or
(ii) Securities tendered pursuant to a
tender or exchange offer made by such Person
or any of such Person's Affiliates or
Associates until such tendered securities
are accepted for purchase or exchange; or
(iii) Securities issuable upon exercise of
rights issued to all shareholders generally,
which rights are only exercisable upon
separation from the Common Stock, or
securities issuable upon exercise of rights
that have separated from the Common Stock
upon the occurrence of events specified in a
rights agreement between the Company and a
rights agent.
(b) has the right to vote or dispose of or has
Beneficial Ownership (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the
Exchange Act) of such securities, including pursuant
to any agreement, arrangement or understanding,
whether or not in writing; provided, a Person shall
not be deemed the Beneficial Owner of, or to
Beneficially Own, any security under this
subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if
such agreement, arrangement or understanding:
(i) arises solely from a revocable proxy
given in response to a public proxy or
consent solicitation made pursuant to, and
in accordance with, the applicable
provisions of the General Rules and
Regulations under the Exchange Act; and
(ii) is not also then reportable by such
Person on Schedule 13D under the Exchange
Act (or any comparable or successor report);
or
(iii) with respect to any securities which
are Beneficially Owned, directly or
indirectly, by any other Person (or any
Affiliate or Associate thereof), has any
agreement, arrangement or understanding
(whether or not in writing), for the purpose
of acquiring, holding, voting (except
pursuant to a revocable proxy as described
herein or disposing of any voting securities
of the Company.
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(5) "Continuing Director" shall mean:
(a) any member of the Board who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or
of any such Affiliate or Associate, and was a member
of the Board prior to the effective date of the Plan;
or
(b) any Person who subsequently becomes a member of
the Board who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination
for election or election to the Board is recommended
or approved by a majority of the Continuing
Directors.
(5) "Equivalents" shall mean preferred stock or other entity
securities of the Company having the right to be converted by
the holders thereof into shares of Common Stock, or having the
right to vote generally for the election of directors and on
other matters. For purposes of determining the total amount of
Common Stock and Equivalents owned by any Person, such
Equivalents shall be equal to the number of shares into which
they may be converted by the holders thereof, or in the case
of securities that are not convertible having the right to
vote, shall be equal to the number of votes they are entitled
to cast in elections for directors.
(7) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(8) "Subsidiary" shall mean any corporation, partnership,
joint venture, trust or other entity more than 50 percent of
the Voting Securities of which are Beneficially Owned,
directly or indirectly, by a Person.
(9) "Voting Securities" shall mean any class of then
outstanding shares of stock or other beneficial interests
entitled to vote in election of directors or other Persons
charged with management of a Person.
(e) "Common Stock" shall mean the common stock of the Company, par
value $5.00 per share.
(f) "Common Stock Equivalents" or "CSEs" shall mean the units that
are credited to a Director's Account under this Plan.
(g) "Company" shall mean AGL Resources Inc., a Georgia
corporation, and any successor of the Company.
(h) "Compensation" shall mean the meeting fees received by the Director.
(i) "Deferred Amount" shall mean an amount of Compensation
deferred at the election of the Participant under this Plan.
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(j) "Director" shall mean any member of the Board of Directors of
the Company who is not an employee of the Company.
(k) "Fair Market Value" shall mean the closing sale price per
share of the Common Stock as published in the Eastern Edition
of The Wall Street Journal report on the New York Stock
Exchange Composite Transactions (or other established exchange
on which the Common Stock is listed) on a particular date. If,
for any reason, the Fair Market Value of the Common Stock
cannot be ascertained or is unavailable for a particular date,
the Fair Market Value of the Common Stock shall be determined
as of the nearest preceding date on which such Fair Market
Value can be ascertained pursuant to the terms hereof.
(l) "Participant" shall mean any Director who elects to defer
Compensation under this Plan.
(m) "Plan" shall mean the AGL Resources Inc. 1998 Common Stock
Equivalent Plan for Non-Employee Directors, as from time to
time amended and in effect.
(n) "Termination of Service" shall mean the termination (by death,
retirement or otherwise) of a Participant's service as a
Director of the Company.
3. Deferral of Compensation. Each Director may elect to defer his or her
Compensation for any calendar year under this Plan. Such election shall
be made on a form prescribed by the Company and filed with the Corporate
Secretary of the Company prior to the beginning of the calendar year
during which such Compensation is to be earned. The election shall be
irrevocable for the first calendar year to which it relates, and it
shall continue in effect for subsequent calendar years until changed
prospectively by the Participant, in writing to the Corporate Secretary
of the Company, before the beginning of the calendar year for which the
change is effective. If an election is made by a person who has been
elected to serve as a Director, but whose term has not yet commenced,
that Director's election shall be effective as of the commencement of
said term.
4. Treatment of Deferred Amounts. The Company shall establish on its books
an Account for each Participant who defers Compensation under this Plan.
Such Account will accurately reflect the Company's liability to such
Participant. The standing balance in each account is hereafter referred
to as the "Account Balance." Despite the maintenance of such Account,
the Company's obligation to make payments under the Plan to a
Participant shall be made from the Company's general assets and
property. The Company may, in its sole discretion, establish a
separate fund or account to make payment of benefits to a Participant or
Beneficiary hereunder. Whether or not the Company, in its sole
discretion, does establish such a fund or account, no Participant,
Beneficiary or any person shall have, under any circumstances, any
interest whatever in any particular property or assets of the Company by
virtue of this Plan.
5. Common Stock Equivalents. Deferred Amounts credited to a Participant's
Account shall be converted into CSEs. The CSEs shall be equal to the
number of shares of Common Stock, to three decimal places, that could be
purchased on the day that the Participant's Deferred Amount would
otherwise be paid, at a per share price equal to the Fair Market Value
of the Common Stock on such date.
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6. Dividends and Stock Splits. On each date on which a dividend, in cash,
property or stock, is distributed on shares of issued and outstanding
Common Stock, the Participant's Account shall be credited with a number
of CSEs based upon the amount of cash or the fair market value of any
property or stock (the "base amount") distributed with respect to a
number of shares issued and outstanding of the Common Stock equal to
the number of CSEs (including fractions) standing to the Participant's
credit in his or her Account on the record date for such distribution
(assuming that fractional shares could be held of record and that
distributions were made with respect thereto). The number of CSEs to be
so credited shall be equal to the number of shares of Common Stock, to
three decimal places, that could be purchased on such dividend
distribution date with the base amount at a per share price equal to the
Fair Market Value of the Common Stock on such date.
7. Payment of Deferred Amounts. Upon a Participant's Termination of
Service, or upon a Change in Control of the Company, a Participant's
Account Balance shall be paid to him or her (or, in the event of the
Participant's death, to the Participant's Beneficiary). The
Participant's Account Balance will, at the irrevocable election of the
Participant on a form prescribed by the Company, be paid to the
Participant in either (i) five annual cash installments; or (ii) one
cash lump sum payment. Payment of such amounts shall commence within
thirty (30) days of such Termination of Service or Change in Control.
In converting a Participant's CSEs in his or her Account into cash for
payment purposes, such conversion shall be made on each payment date to
the Participant based on the then current Fair Market Value of the
shares of Common Stock reflected in the Participant's Account.
8. Amendment or Termination. The Board of Directors may amend or terminate
this Plan at any time; provided, however, that no amendment or
termination shall adversely affect any then existing Deferred Amounts or
rights under this Plan, and provided further that no amendment may be
made to the last sentence of Section 12 hereof.
9. Expenses. The expenses of administering the Plan shall be borne by the
Company, and shall not be charged against any Participant's Account.
10. Applicable Law. The provisions of the Plan shall be construed,
administered and enforced according to the laws of the State of Georgia.
11. No Trust. No action by the Company or its Board of Directors under this
Plan shall be construed as creating a trust, escrow or other secured or
segregated fund or other fiduciary relationship of any kind in favor of
any Participant, Beneficiary, or any other persons. The status of a
Participant or Beneficiary with respect to any liabilities assumed by
the Company hereunder shall be solely those of unsecured creditors of
the Company. Any asset acquired or held by the Company in connection
with liabilities assumed by it hereunder shall not be deemed to be held
under any trust, escrow or other secured or segregated fund or other
fiduciary relationship of any kind for the benefit of a Participant or
Beneficiary, or to be security for the performance of the obligations of
the Company, but shall be, and remain, a general, unpledged,
unrestricted asset of the Company at all times subject to the claims of
general creditors of the Company.
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12. Assignment; Successors. Neither the Participant nor any other person
shall have the power, voluntarily or involuntarily, to transfer, assign,
anticipate, pledge, mortgage or otherwise encumber, alienate or transfer
any rights hereunder in advance of any of the payments to be made
pursuant to this Plan or any portion thereof. The obligations of the
Company hereunder shall be binding upon any and all successors and
assigns to the Company.
13. Withholding. The Company shall comply with all federal and state laws
and regulations respecting the withholding, deposit and payment of any
income or employment taxes relating to the payment of Deferred Amounts
under this Plan.
14. No Impact on Directorship. This Plan shall not be construed to confer
any right on the part of a Participant to be or remain a Director or to
receive any, or any particular rate of, Compensation.
15. Interpretations. Interpretations of, and determinations related to, this
Plan made by the Company in good faith, including any determinations or
calculations of Deferred Amounts or Account Balances, shall be
conclusive and binding upon all parties; and the Company shall not incur
any liability to a Participant for any such interpretation or
determination so made or for any other action taken by it in connection
with this Plan.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officer as of January 1, 1998.
AGL RESOURCES INC.
By: /s/ Robert L. Goocher
Robert L. Goocher
Executive Vice President
S2-396657.1
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