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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
AGL RESOURCES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240-14a-101
SEC 1913 (3-99)
[LOGO] AGL RESOURCES INC.
PAULA G. ROSPUT
President and Chief Executive Officer
December 27, 2001
To Our Shareholders:
On behalf of the Board of Directors, I am pleased to invite you to attend
AGL Resources' annual meeting of shareholders that will be held on Friday,
February 1, 2002, at the Atlanta History Center, 130 West Paces Ferry Road,
Atlanta, Georgia. The meeting will start at 10:00 a.m., local time. A map with
directions for driving is enclosed. If you plan to attend the meeting, please
bring the enclosed admission ticket with you.
On the ballot for this year's meeting are three proposals: 1) the election
of five directors; 2) the adoption of the AGL Resources Inc. Executive
Performance Incentive Plan; and 3) the approval of an amendment to the AGL
Resources Inc. Long-Term Incentive Plan (1999). These proposals are described
in the attached proxy statement. During the meeting, we will discuss the record
of our efforts and achievements in fiscal 2001, a year of particular success.
We also will update shareholders on more recent events in the energy industry
and in our businesses. Directors, officers and other employees of the Company
will be available to answer any questions you may have.
Your vote is very important to us. Regardless of the number of shares you
own, please vote. All shareholders can vote by written proxy or vote
instruction card. All shareholders of record and many shareholders whose shares
are held in street name also can vote by proxy via the Internet
(http://www.eproxyvote.com/atg) or by telephone (toll-free at 1-877-779-8683).
All shareholders of record who do not hold their shares in "street name" (in
the name of a broker or bank) or through a Company stock plan also can attend
and vote their shares at the meeting. These various options for voting are
described on the enclosed proxy card. Also, you may view a copy of our proxy
materials and annual report on our website at www.aglresources.com.
Again, thank you for your ongoing support as we continue to transform our
Company and provide greater shareholder value. We look forward to seeing you at
our annual meeting.
Sincerely,
/s/ PAULA G. ROSPUT
TABLE OF CONTENTS
Page
Notice of Annual Meeting of Shareholders................ 2
Proxy Statement
About the Annual Meeting................................ 3
Proposal 1: Election of Directors....................... 7
Share Ownership......................................... 11
Governance of the Company............................... 13
Director Compensation................................... 16
Audit Committee Report.................................. 17
Compensation Committee Report........................... 18
Executive Compensation.................................. 22
Summary Compensation Table........................ 22
Option Grants in Last Fiscal Year................. 25
Aggregated Option Exercises....................... 26
Pension Plan Tables............................... 28
Other Matters Involving Directors and Executive Officers 30
Stock Performance Graph................................. 33
Proposal 2: Adoption of the AGL Resources Inc.
Executive Performance Incentive Plan.............. 34
Proposal 3: Amendment of the AGL Resources Inc.
Long-Term Incentive Plan (1999)................... 36
General Information..................................... 42
A copy of our 2001 annual report, which includes financial statements, is being
mailed with this proxy statement. You may receive an additional copy of the
annual report at no charge upon request directed to:
AGL Resources Inc. Shareholder Relations
P.O. Box 4569, Location 1080
Atlanta, Georgia 30302-4569
Telephone: (404) 584-9470
Financial reports also may be accessed on our web site at www.aglresources.com
or through our toll-free interactive shareholder information line at
1-877-ATG-NYSE (1-877-284-6973).
[LOGO] AGL RESOURCES INC.
817 West Peachtree Street, N.W.
Atlanta, Georgia 30308
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Time and Date: 10:00 a.m., local time, Friday, February 1, 2002
Place: Atlanta History Center, 130 West Paces Ferry Road, N.W., Atlanta,
Georgia
Items of Business: -- Elect five directors, one to serve a two-year term and four to serve
a three-year term.
-- Adopt the AGL Resources Inc. Executive Performance Incentive
Plan.
-- Amend the AGL Resources Inc. Long-Term Incentive Plan (1999).
-- Transact such other business as may properly come before the
annual meeting or any adjournments.
Who May Vote: You can vote if you owned our shares of common stock at the close of
business on November 23, 2001.
Proxy Voting: Your vote is important. Please vote in one of these ways:
-- use the toll-free telephone number shown on the enclosed proxy or
vote instruction card;
-- visit the web site listed on your proxy or vote instruction card;
-- mark, sign, date and promptly return the enclosed proxy or vote
instruction card in the postage-paid envelope; or
-- attend the meeting and vote in person if you are a shareholder of
record or a street name holder who has obtained a proxy card from
your street name nominee.
Annual Report: A copy of our 2001 annual report, which contains financial and other
information about the Company, is enclosed.
Date of Mailing: This notice and proxy statement, together with the 2001 annual report, is
first being mailed to shareholders on or about December 27, 2001.
By Order of the Board of Directors
/s/ MELANIE MCGEE PLATT
Melanie McGee Platt
Corporate Secretary
2
PROXY STATEMENT
ABOUT THE ANNUAL MEETING
What will I be voting on?
You will be voting on three matters:
. the election of five directors, one to serve a two-year term and four to
serve a three-year term;
. the adoption of the AGL Resources Inc. Executive Performance Incentive
Plan; and
. the amendment of the AGL Resources Inc. Long-Term Incentive Plan (1999).
Who is soliciting my vote?
The board of directors of AGL Resources is soliciting your vote for all shares
of AGL Resources common stock that you own.
How does the board recommend I vote on these proposals?
The board of directors recommends you vote "FOR" each of the director nominees
named in Proposal 1 and "FOR" Proposals 2 and 3.
How do I vote?
There are four different ways you may cast your vote. You can vote by:
. telephone, using the toll-free number listed on each proxy card (if you are
a shareholder of record) or vote instruction card (if your shares are held
by a broker or a bank);
. the Internet, at the address provided on your proxy or vote instruction
card;
. marking, signing and dating your proxy card or vote instruction card and
mailing it in the enclosed postage-paid envelope; or
. attending the meeting, if your shares are registered directly on AGL
Resources' books and are not held as Company plan shares or through a
broker, bank or other nominee. If you want to vote in person at the annual
meeting and your shares are held through a broker, bank or other nominee
(that is, in "street name"), you must obtain a proxy from your street name
nominee and bring that proxy to the meeting.
For AGL Resources plan participants: If you participate in the AGL Resources
Inc. Retirement Savings Plus Plan ("RSP Plan"), your telephone, Internet or
proxy vote will serve as voting instructions to the trustee of the RSP Plan. If
you have shares credited in the RSP Plan, only the trustee can vote your plan
shares even if you attend the annual meeting in person.
Can I change my vote?
Yes. You may change your vote at any time before the annual meeting by voting
again by telephone or via the Internet or by signing and returning another
proxy or vote instruction card with a later date. Shareholders of record and
street name holders who have obtained a proxy card from their street name
nominee also may attend the annual meeting and vote in person. If you attend
the annual meeting and want to vote in person, you can request that your
previously submitted proxy or vote instruction card not be used.
What if I don't specify my choices when returning my proxy or vote instruction
card?
If you return a signed proxy or vote instruction card without indicating your
vote, your shares will be voted "FOR" the director nominees listed on the card
(Proposal 1), "FOR" the proposal to adopt the AGL Resources Inc.
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Executive Performance Incentive Plan (Proposal 2) and "FOR" the proposal to
amend the AGL Resources Inc. Long-Term Incentive Plan (1999) (Proposal 3).
If you hold AGL Resources shares through the RSP Plan and (1) you do not return
the proxy card for those plan shares and do not vote by telephone or via the
Internet or (2) you properly sign and return the proxy card but do not specify
how you want your plan shares voted, the trustee, upon instruction from the
Administrative Committee of the RSP Plan, will vote your plan shares "FOR" the
election of the director nominees named in Proposal 1 and "FOR" Proposals 2 and
3.
Can my shares be voted if I don't submit any voting instructions and don't
attend the annual meeting?
If your AGL Resources shares are held in street name or by a brokerage firm or
bank and you do not submit any voting instructions, your brokerage firm or
bank, under certain circumstances, may vote your shares. When a brokerage firm
or bank votes its customers' unvoted shares, the shares are counted for
purposes of establishing a quorum.
We believe that under applicable stock exchange rules, brokerage firms and
banks will be able to vote their customers' unvoted shares with regard to the
proposal to elect directors (Proposal 1) and the proposal to adopt the AGL
Resources Inc. Executive Performance Incentive Plan (Proposal 2). We believe
that brokerage firms and banks will not be able to vote their customers'
unvoted shares with regard to the proposal to amend the AGL Resources Inc.
Long-Term Incentive Plan (1999) (Proposal 3).
If your shares are registered directly on AGL Resources' books and you do not
indicate how your shares are to be voted, your shares will not be voted.
How many shares can vote?
As of November 23, 2001 (the record date), 55,166,123 shares of common stock of
AGL Resources were outstanding and entitled to vote at the annual meeting. You
will have one vote for every share of AGL Resources common stock you owned on
the record date.
How many votes must be present to hold the annual meeting?
A majority of the 55,166,123 shares of AGL Resources common stock outstanding
on the record date must be present, either in person or represented by proxy,
to conduct the annual meeting. This total includes shares issued to certain
grantor trusts, which are not considered outstanding for financial reporting
purposes.
How many votes are needed to elect directors?
Directors are elected by a plurality of the votes, which means the five
nominees who receive the largest number of properly executed votes will be
elected as directors.
What if I vote "Withhold Authority" to elect directors"?
In voting for the election of directors, a vote to "withhold authority" for the
election of one or more director nominees will not be counted in determining
the number of votes cast for those persons and will not affect the outcome.
How many votes are needed to adopt the Executive Performance Incentive Plan?
This proposal will be approved if the number of votes cast "FOR" the proposal
exceeds the number of votes cast "AGAINST" the proposal. Therefore, abstentions
will not affect the outcome.
How many votes are needed to amend the Long-Term Incentive Plan?
This proposal requires the approval of a majority of the votes cast on the
proposal, provided that the total votes cast on the proposal constitute a
majority of all votes entitled to be cast on the proposal (determined as set
forth below).
4
Abstentions will be counted in determining the number of votes cast on the
proposal and therefore will have the effect of a vote "AGAINST" the proposal.
Broker non-votes will not be counted for the purpose of establishing a quorum
or in determining the number of votes cast on the proposal and will not affect
the outcome, except to the extent that the aggregate number of broker non-votes
causes the total votes that are considered to be cast on a proposal under
applicable stock exchange rules to constitute less than a majority of all votes
entitled to be cast on the proposal.
Could other matters be decided at the annual meeting?
We don't know of any other matters that will be considered at the annual
meeting. If a matter that is not listed on the proxy or voting instruction card
is properly brought before the annual meeting in accordance with Section 1.2 of
our bylaws, the proxies will vote in accordance with their judgment of what is
in the best interest of the Company, based on the discretionary voting
authority conferred on them by the proxy and voting instruction cards.
Who will count the vote?
Representatives of EquiServe Trust Company, N.A., our transfer and shareholder
services agent, will count the vote and act as inspector of elections.
Where and when will I be able to find the voting results?
AGL Resources will post the voting results on our web site at
www.aglresources.com approximately two weeks after the annual meeting. You also
can find the results in our Form 10-Q for the first quarter of 2002, which we
will file with the Securities and Exchange Commission in May 2002.
What does it mean if I receive more than one proxy card?
It means that you have multiple accounts with brokers, banks and/or our
transfer agent. Please vote all of these shares. We recommend that you contact
your broker, bank and/or our transfer agent to consolidate as many accounts as
possible under the same name and address. Our transfer and shareholder services
agent is EquiServe Trust Company, N.A. All communications concerning accounts
for shareholders of record, including address changes, name changes, inquiries
to transfer shares and similar issues, can be handled by making a toll-free
call to our transfer agent at the AGL Resources Shareholder Services number at
1-800-633-4236.
What do I need to bring with me if I want to attend the annual meeting?
The annual meeting is open to all holders of our common stock. To attend the
annual meeting, you will need to bring evidence of your stock ownership. If
your shares are registered in your name, your admission ticket is included with
your proxy card, and you will need to bring it with you to the meeting. If your
shares are held in "street name" by your broker or bank, you will need to bring
evidence of your stock ownership, such as a proxy obtained from your street
name nominee (particularly if you want to vote your shares at the annual
meeting) or your most recent brokerage account statement (in which case you
will not be able to vote your shares at the meeting), together with valid
picture identification. If you do not have either an admission ticket or proof
that you own our common stock, you may not be admitted into the meeting.
What happens if the annual meeting is postponed or adjourned?
Your proxy will still be good and may be voted at a postponed or adjourned
meeting, unless the board of directors fixes a new record date for the
postponed or adjourned meeting, which the board is required to do if the
postponement or adjournment is for more than 120 days. Otherwise, you will
still be able to change or revoke your proxy until it is voted.
5
When are the shareholder proposals for the 2003 annual meeting due?
All shareholders who wish to present business at the annual meeting in 2003,
whether director nominees or otherwise, must provide notice to our Corporate
Secretary of their intent to do so on or before November 14, 2002. Such notice
must provide the information set forth in Section 1.2 of our bylaws. A copy of
these bylaw requirements will be provided upon written request to the Corporate
Secretary, AGL Resources Inc., P.O. Box 4569, Location 1080, Atlanta, Georgia
30302-4569.
Under our bylaws, this deadline applies to any shareholder proposal sought to
be considered at the 2003 annual meeting, including but not limited to those
sought to be included in the proxy statement and form of proxy for the 2003
annual meeting.
This deadline does not apply to questions a shareholder may wish to ask at the
annual meeting.
How much will this proxy solicitation cost?
AGL Resources will pay the expenses of soliciting proxies. Proxies may be
solicited on our behalf by directors, officers and employees, in person or by
telephone, facsimile or electronic transmission. Directors, officers and
employees will not be paid for those services. AGL Resources has hired
Georgeson Shareholder, Inc., a proxy solicitation firm, to assist in the
distribution and solicitation of proxies. We will pay Georgeson Shareholder,
Inc. approximately $25,000 plus reasonable out-of-pocket disbursements for
those services.
6
PROPOSAL 1: ELECTION OF DIRECTORS
General
The board of directors presently consists of ten members, nine of whom are
non-employee directors. The board is divided into three classes of
approximately equal size, with the directors in each class serving a three-year
term. The terms are staggered so that the term of one class expires at each
annual meeting.
The board of directors, based on the recommendation of the Nominations
Committee, has nominated Robert S. Jepson, Jr., Arthur E. Johnson, Karen R.
Osar, Paula G. Rosput and James A. Rubright for election as directors at the
annual meeting. Mr. Jepson and Ms. Rosput are members of the class of directors
whose terms are scheduled to end at the annual meeting. Ms. Osar and Mr.
Rubright were appointed as directors by the board in August 2001 for terms that
also are scheduled to end at the annual meeting. Mr. Johnson will begin his
service as a director following the annual meeting if he is elected by the
shareholders. If elected, Messrs. Jepson, Johnson and Rubright and Ms. Rosput
will hold office for three-year terms ending at the annual meeting of
shareholders in 2005 and Ms. Osar will hold office for a two-year term ending
at the annual meeting of shareholders in 2004. Each of the nominees has agreed
to serve as a director if elected by the shareholders.
If any nominee becomes unable to stand for election, the board may:
. designate a substitute nominee, in which case the proxies or plan trustee, as
applicable, will vote all valid proxies for the election of the substitute
nominee named by the board;
. allow the vacancy to remain open until a suitable candidate is located; or
. reduce the authorized number of directors from ten to nine.
One of our other directors, Frank Barron, Jr., is not standing for re-election.
Mr. Barron, whose term is scheduled to end at the annual meeting, will retire
from the board at the annual meeting in accordance with the board policy that
states that directors may not stand for re-election after they have reached the
age of 70. Mr. Barron has served on the board since 1983. We are indebted to
Mr. Barron for his guidance and support.
Set forth below is information as of December 1, 2001 about the five director
nominees and all other current directors whose terms of office will continue
after the annual meeting. Unless otherwise stated, all directors have been
engaged in their principal occupations for more than the past five years.
7
Nominees For Election:
[PHOTO] Robert S. Jepson, Jr., Chairman and Chief Executive Officer of
Jepson Associates, Inc. since 1989; Chairman and Chief
ROBERT S. Executive Officer of Jepson Vineyards Ltd.; Chairman and
JEPSON, JR. Chief Executive Officer of Kuhlman
Corporation from 1993 until 1999; director of Circuit City
Stores, Inc. Mr. Jepson, 59, has been a director since 1999.
[PHOTO] Arthur E. Johnson, Senior Vice President, Corporate Strategic
Development of Lockheed Martin Corporation since December
ARTHUR JOHNSON 2001; Vice President, Corporate Strategic Development of
Lockheed Martin Corporation from 1999 until December 2001;
President and Chief Operating Officer of Lockheed Martin
Corporation Information and Services Sector from 1997 until
1999; President of Lockheed Martin Corporation Systems
Integration Group from January 1997 to August 1997; President
of Loral Corporation Federal Systems Group from 1994 until
1996. Mr. Johnson 54, is a director of IKON Office Solutions
Corporation.
[PHOTO] Paula G. Rosput, President and Chief Executive Officer of the
Company since August 2000; Chairman of Atlanta Gas Light
PAULA ROSPUT Company, a wholly-owned subsidiary of the Company, since
November 2000; Chairman, President and Chief Executive Officer
of Atlanta Gas Light Company from August 2000 until November
2000; President and Chief Operating Officer of Atlanta Gas
Light Company from September 1998 until November 2000;
President and Chief Executive Officer of Duke Energy Power
Services, Inc., a subsidiary of Duke Energy Corporation, from
1997 until September 1998; President of PanEnergy Power
Services, Inc. from 1995 until 1997; director of Coca-Cola
Enterprises Inc., Circuit City Stores, Inc. and Air Products
and Chemicals, Inc. Ms. Rosput, 45, has been a director since
2000.
8
[PHOTO] Karen R. Osar, Senior Vice President and Chief Financial
Officer of Westvaco Corporation, a paper manufacturing,
KAREN OSAR packaging and specialty chemical company, since 1999; Vice
President and Treasurer of Tenneco, Inc. from 1994 until 1999;
director of Allergan, Inc. and BNY Hamilton Funds, Bank of New
York. Ms. Osar, 52, has been a director since August 2001.
[PHOTO] James A. Rubright, Chairman of the Board and Chief Executive
Officer of Rock-Tenn Company, an integrated paperboard and
JIM RUBRIGHT packaging company, since 1999; Executive Vice President of
Sonat, Inc., an energy company, from 1996 until 1999; director
of Avondale Incorporated. Mr. Rubright, 54, has been a
director since August 2001.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE NOMINEES.
Directors Whose Terms Continue Until The Annual Meeting In 2003:
[PHOTO] Otis A. Brumby, Jr., Chairman of the Board and Chief Executive
Officer of The Marietta Daily Journal and Neighbor Newspapers,
OTIS A. BRUMBY, JRI.nc. since 1993; director of First Union - Georgia. Mr.
Brumby, 61, has been a director since 1990.
[PHOTO] Wyck A. Knox, Jr., Partner in and Chairman of the Executive
Committee of the law firm of Kilpatrick Stockton LLP; Chairman
WYCK A. KNOX, JR.and Chief Executive Officer of Knox-Rivers Construction
Company from 1976 until 1995; director of First Union -
Georgia and AHL Services, Inc. Mr. Knox, 61, has been a
director since 1998.
9
[PHOTO] Dennis M. Love, President of Printpack Inc. since 1987;
director of SunTrust Banks of Georgia, Inc., SunTrust Bank,
DENNIS M. LOVE Atlanta, and Caraustar Inc. Mr. Love, 46, has been a director
since 1999.
Directors Whose Terms Continue Until The Annual Meeting In 2004:
[PHOTO] D. Raymond Riddle, Chairman of the Board of Directors of the
Company since August 2000; Chairman of the Board and Chief
D. RAYMOND Executive Officer of National Service Industries, Inc. from
RIDDLE 1994 until 1996; director of Atlantic American Corporation and
Equifax Inc. Mr. Riddle, 68, has been a director since 1978.
[PHOTO] Felker W. Ward, Jr., Chairman of Pinnacle Investment Advisors,
Inc., an investment banking firm and wholly-owned subsidiary
FELKER W. of Ward and Associates, Inc., since 1994; President of Ward
WARD, JR. and Associates, Inc., an investment banking firm, from 1988
until 1998; Vice Chairman of Concessions International, Inc.
since 1997; President of Concessions International, Inc. from
1979 until 1997; director of Fidelity National Bank, Shoney's,
Inc. and Abrams Industries, Inc. Mr. Ward, 68, has been a
director since 1988.
10
SHARE OWNERSHIP
Directors and Executive Officers
The following table presents information as of September 30, 2001 concerning
the ownership of AGL Resources common stock by each director and director
nominee, by each executive officer named in the summary compensation table who
is not a director, whom we refer to collectively as the "named executive
officers," and by all executive officers and directors as a group, based on
information furnished by them to the Company.
As of September 30, 2001, all directors, director nominees and executive
officers of the Company as a group owned beneficially less than 1% of the
outstanding common stock of the Company. Beneficial ownership as reported in
this proxy statement has been determined in accordance with regulations of the
Securities and Exchange Commission and includes shares of common stock which
may be acquired within 60 days after September 30, 2001 upon the exercise of
outstanding stock options and excludes "shares" and "share equivalents" held
under deferral plans. See footnote (2) below. All directors, director nominees
and executive officers have sole voting and investment power with respect to
the shares shown.
Shares of Common "Shares" and "Share
Stock Beneficially Equivalents" Held Under Total
Name Owned(1) Deferral Plans(2)
Frank Barron, Jr. 45,408 6,254 51,662
Otis A. Brumby, Jr. 27,990 5,945 33,935
Robert S. Jepson, Jr. 16,253 0 16,253
Arthur E. Johnson(3) 0 0 0
Wyck A. Knox, Jr. 4,605 4,937 9,542
Dennis M. Love 3,067 4,103 7,170
Karen R. Osar 1,000 0 1,000
D. Raymond Riddle 9,390 6,248 15,638
Paula G. Rosput 271,872 593 272,465
James A. Rubright 1,500 0 1,500
Felker W. Ward, Jr. 38,963 3,345 42,308
Richard J. Duszynski 50,670 0 50,670
Susan A. McLaughlin 8,445 698 9,143
Richard T. O'Brien 5,238 130 5,368
Paul R. Shlanta 116,794 0 116,794
Donald P. Weinstein 0 2,348 2,348
All executive officers 601,195 34,601 635,796
and directors as a
group (18 persons)
11
Notes to share ownership table
(1) For the non-employee directors, the shares shown include: 5,681 shares
which may be acquired by each of Messrs. Barron, Brumby, Riddle and Ward;
3,012 shares which may be acquired by Mr. Jepson; 2,452 shares which may be
acquired by Mr. Knox; and 2,701 shares which may be acquired by Mr. Love,
upon exercise of stock options granted under the Non-Employee Directors
Equity Compensation Plan, which we refer to as the "Directors Plan" (a
total of 30,889 shares).
For the named executive officers, the shares shown include shares which may
be acquired upon exercise of stock options granted under the Long-Term
Incentive Plan (1999), which we refer to as the "LTIP," or the Long-Term
Stock Incentive Plan of 1990, which is the predecessor of the LTIP and
which we refer to as the "LTSIP," or under the Officers Incentive Plan,
which we refer to as the "OIP," as follows: Ms. Rosput - 259,675 shares;
and Mr. Shlanta - 114,471 shares.
For all executive officers and directors as a group, the shares shown
include an aggregate of 456,648 shares which may be acquired upon the
exercise of stock options granted under the Directors Plan, the LTIP, the
LTSIP and the OIP.
(2) Represents shares of AGL Resources common stock, AGL Resources common stock
equivalents and accrued dividends held under deferral plans. The amounts
deferred track the performance of AGL Resources common stock and are
payable in cash. The shares and share equivalents may not be voted or
transferred by the participants.
(3) Mr. Johnson is not currently serving as a director. His term of service
will begin following the annual meeting if elected by the shareholders.
Owners of More Than 5% of AGL Resources Common Stock
As of September 30, 2001, we were aware of the following shareholders who owned
beneficially more than 5% of AGL Resources' common stock.
Shares of Common Stock
Name and Address of Beneficial Owner Beneficially Owned Percent of Class
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AGL Resources Inc. Retirement 4,442,687 8.06%
Savings Plus Plan
P.O. Box 4569
Atlanta, Georgia 30302
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American Century Investment 3,160,900 (1) 5.74%
Management, Inc.
4500 Main Street
P.O. Box 418210
Kansas City, Missouri 64141-9210
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(1) Based on a Schedule 13G/A dated February 13, 2001, in which American
Century Investment Management, Inc. reported that it had sole voting and
dispositive power over all of such shares.
12
GOVERNANCE OF THE COMPANY
Board of Directors
The business affairs of AGL Resources are managed under the direction of the
board of directors in accordance with the Georgia Business Corporation Code,
AGL Resources' articles of incorporation and its bylaws. The role of the board
of directors is to effectively govern the affairs of the Company for the
benefit of its shareholders and other constituencies, which include the
Company's employees, customers, suppliers and creditors and the communities in
which it does business. The board strives to ensure the success and continuity
of the Company's business through qualified management.
Director Independence
All of the Company's directors are independent, non-employee directors except
Ms. Rosput, the President and Chief Executive Officer of AGL Resources and the
Chairman of Atlanta Gas Light Company. Ms. Rosput does not participate in any
action of the board relating to her compensation.
Mr. Wyck A. Knox, Jr. is a partner in the law firm of Kilpatrick Stockton LLP.
During the fiscal year ended September 30, 2001, which we refer to as "fiscal
2001," the Company retained Kilpatrick Stockton LLP with regard to a variety of
legal matters. The amount of fees paid to Kilpatrick Stockton LLP for such
services was less than 5% of that firm's gross revenue for the firm's last
fiscal year.
Board and Committee Meetings
Members of the board are kept informed through reports routinely presented at
board and committee meetings by the Chief Executive Officer and other officers,
and through other means. The board of directors held seven meetings during
fiscal 2001. Each director attended 75% or more of the aggregate of all
meetings of the board and each committee on which he or she served.
Committees of the Board
The board of directors has established six committees to assist it in
discharging its duties. Actions taken by any committee of the board are
reported to the board, usually at the board meeting next following a committee
meeting. The committees of the board and their members are as shown below.
Biographical information about each of the directors is described above under
the heading "Proposal 1: Election of Directors."
Members of the Board's Committees
Corporate Finance and Risk
Audit Compensation Responsibility Executive Management Nominations
----- ------------ -------------- --------- ---------------- -----------
D.R. Riddle, F.W. Ward, Jr., W.A. Knox, Jr., D.R. Riddle, R.S. Jepson, Jr. O.A. Brumby, Jr.
Chair Chair Chair Chair Chair Chair
R.S. Jepson, Jr. F. Barron, Jr. O.A. Brumby, Jr. R.S. Jepson, Jr. D.R. Riddle F. Barron, Jr.
D.M. Love D.M. Love P.G. Rosput P.G. Rosput P.G. Rosput W.A. Knox, Jr.
K.R.Osar K.R.Osar J.A. Rubright F.W. Ward, Jr. J.A. Rubright D.R. Riddle
J.A. Rubright
13
Audit Committee
The Audit Committee met four times in fiscal 2001. All members of the Audit
Committee are independent directors as defined under the rules of the New York
Stock Exchange. The principal duties and responsibilities of the Audit
Committee are to:
. recommend to the board a firm to be selected as the Company's independent
auditor;
. review the financial information that will be provided to the shareholders
and others;
. review the systems of internal controls that management and the board have
established;
. review the audit scope and plan and the results of the audit;
. review the results of the Company's internal audit program;
. confirm the independence of the independent auditor;
. review the non-audit services provided by the independent auditor and the
fees for such services; and
. convey information between the board of directors and the Company's
independent auditor and internal auditors.
Additional information regarding the Audit Committee and its functions and
responsibilities is included in this proxy statement under the caption "Audit
Committee Report."
Compensation Committee
In September 2001, the board of directors split the Nominating and Compensation
Committee into two committees - a Compensation Committee and a Nominations
Committee. The Compensation Committee did not meet in fiscal 2001, but the
predecessor Nominating and Compensation Committee, which was comprised in
fiscal 2001 of Messrs. Riddle (Chair), Barron, Jepson and Ward, met seven times
in fiscal 2001. All members of the Compensation Committee are independent,
non-employee directors. The principal duties and responsibilities of the
Compensation Committee, all of which were previously carried out by the
Nominating and Compensation Committee, are to:
. review the compensation paid to the members of the Company's board of
directors and make recommendations for adjustments, as appropriate;
. review the performance of and recommend the appropriate compensation level
for elected officers, including base salaries, long-term incentive
compensation, other incentive compensation, and benefits; and
. review and recommend any changes in the Company's various benefit programs.
Corporate Responsibility Committee
The Corporate Responsibility Committee met one time in fiscal 2001. The
principal duties and responsibilities of the Corporate Responsibility Committee
are to:
. review the Company's employee benefit plan investment policies, funding
requirements, investment objectives, and investment policies;
. review and monitor corporate policy with respect to the Company's
relationships with employees, shareholders, customers, competitors,
suppliers and its communities;
. identify and monitor emerging political, social and environmental trends
and public policy issues that may affect the Company's business operations,
performance or public image; and
. review and monitor matters relating to employee and community health and
safety.
14
Executive Committee
The Executive Committee did not meet in fiscal 2001. The Executive Committee
may meet during intervals between board meetings and has all the authority of
the board, subject to limitations imposed by law or the Company's bylaws.
Nominations Committee
The Nominations Committee, which was created in September 2001, did not meet in
fiscal 2001, but the predecessor Nominating and Compensation Committee met
seven times in fiscal 2001. All members of the Nominations Committee are
independent, non-employee directors. The principal duties and responsibilities
of the Nominations Committee, all of which were previously carried out by the
Nominating and Compensation Committee, are to:
. identify and recommend the nominees for election to the board;
. recommend for election the senior officers of the Company and the
presidents of each of the principal subsidiaries of the Company; and
. review and develop management succession and executive development plans.
Although the Nominations Committee has not established any formal procedures
for considering director nominees recommended by shareholders, it will consider
any such nominees.
Finance and Risk Management Committee
The Finance and Risk Management Committee, which was formerly known as the
Strategy and Finance Committee, met three times in fiscal 2001. The principal
duties and responsibilities of the Finance and Risk Management Committee are to
consider and make recommendations about:
. short and long-term business goals and strategies;
. the Company's operating plans and budgets;
. the Company's strategic business combinations and proposed new business
ventures; and
. the Company's capitalization, financing plans, dividend policy and risk
management programs, with an emphasis on energy trading.
15
DIRECTOR COMPENSATION
General
A director who is an officer or employee of the Company receives no
compensation for his or her services as a director or as a member of a
committee of the board. A director who is not an officer or employee receives
compensation for his or her services as described in the following paragraphs.
All directors are reimbursed for reasonable expenses incurred in connection
with attendance at board and committee meetings.
Initial Stock Award
Upon initial election to the board, each non-employee director receives 1,000
shares of common stock on the first day of board service.
Annual Retainer
Each non-employee director receives an annual retainer for his or her services
as a director, which is paid in the form of equity awards under the Directors
Plan. Under the Directors Plan, each non-employee director receives on the
first day of each annual service term (1) a stock award equal in fair market
value to $30,000 and (2) a nonqualified stock option to purchase the same
number of shares of common stock as are awarded on such date in payment of the
retainer.
The stock award is either paid in shares of AGL Resources common stock or, at
the election of a director, deferred under the Common Stock Equivalent Plan for
Non-Employee Directors, which we refer to as the "CSE Plan." Under the CSE
Plan, the stock award is invested in common stock equivalents that track the
performance of AGL Resources common stock and are credited with dividend
payments. At the end of their board service, participating directors receive a
cash distribution based on the market value of their common stock equivalents
and dividends. Stock options have a per share exercise price that is equal to
the fair market value of the Company's common stock on the date of grant of the
option. Directors realize value from stock option grants only to the extent
that the fair market value of the common stock of the Company on the date of
exercise of the stock option exceeds the fair market value of the common stock
on the date of grant.
Meeting Fees
Each non-employee director receives $1,000 for attendance at each meeting of
the board and any standing committee of the board of which he or she is a
member.
Meeting fees may be paid in cash or, at the election of a director, may be
deferred under the CSE Plan or the Deferred Compensation Plan for Corporate
Directors, which we refer to as the "Deferred Plan." Under the CSE Plan,
meeting fees are invested in common stock equivalents that track the
performance of AGL Resources common stock and are credited with dividend
payments. At the end of their board service, participating directors receive a
cash distribution based on the market value of their common stock equivalents
and dividends. Under the Deferred Plan, at the end of their board service,
participating directors receive a cash distribution in an amount equal to their
deferred meeting fees, plus a return on such fees equal to the 26-week Treasury
Bill rate.
Director Compensation Paid
For the 2001 annual term of service that expires at the 2002 annual meeting,
Messrs. Barron, Brumby, Jepson, Knox, Love, Riddle and Ward each received their
annual retainer for services as a director. Mr. Jepson elected to receive his
stock award in the form of shares of AGL Resources common stock and was granted
a stock award for 1,437 shares. Messrs. Barron, Brumby, Knox, Love, Riddle and
Ward elected to defer receipt of their stock award, and each was credited with
1,437 common stock equivalents under the CSE Plan. The share amount and common
stock equivalent amount were calculated by dividing the $30,000 annual retainer
fee by $20.88, the then per share fair market value of AGL Resources common
stock.
16
AUDIT COMMITTEE REPORT
Additionally, each of these directors was granted an option to purchase 1,437
shares of AGL Resources common stock at a price of $20.88 per share, which
reflects the fair market value of the common stock on the date of grant.
The Audit Committee of the board of directors is composed of five directors who
are independent directors as defined under the rules of the New York Stock
Exchange. The Audit Committee operates under a written charter adopted by the
board of directors.
The Audit Committee reviews the Company's financial reporting process on behalf
of the board of directors. In fulfilling its responsibilities, the Audit
Committee has reviewed and discussed the audited financial statements contained
in the Company's Annual Report on Form 10-K for fiscal 2001 with the Company's
management and the independent auditors. Management is responsible for the
Company's financial statements and the financial reporting process, including
the system of internal controls. The independent auditors are responsible for
expressing an opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the United States.
The Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, regarding the independent
auditor's judgments about the quality of the Company's accounting principles as
applied in its financial reporting. In addition, the Audit Committee has
discussed with the independent auditors the auditors' independence from the
Company and its management, including the matters in the written disclosures
and the letter provided to the Audit Committee as required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees.
Based on the reviews and discussions referred to above, the Audit Committee
concurs with the board of directors' decision to approve the inclusion of the
audited financial statements in the Company's Annual Report on Form 10-K for
fiscal 2001 for filing with the Securities and Exchange Commission.
D. Raymond Riddle (Chair)
Robert S. Jepson, Jr.
Dennis M. Love
Karen R. Osar
James A. Rubright
The information contained in the Audit Committee Report shall not be deemed
to be "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
17
COMPENSATION COMMITTEE REPORT
Purpose and Membership of the Compensation Committee
In fiscal 2001, the board of directors split the Nominating and Compensation
Committee into two committees, one of which is the Compensation Committee. A
principal reason for creating the Compensation Committee was to create a
governing body that focuses solely on compensation matters, with the primary
goals of (1) better linking executive compensation levels to meaningful
improvements in Company performance and shareholder value, (2) placing a
significant percentage of executive compensation at risk and (3) improving the
Company's ability to attract and retain talented executive personnel in a
competitive market.
With this perspective, the Committee reviews and sets the compensation of the
Company's Chief Executive Officer and the other members of the Company's
executive management team, determines and reviews the Company's executive
compensation objectives and policies, and administers the Company's various
benefit programs.
The Compensation Committee consists entirely of non-employee, non-affiliated
directors.
Executive Compensation Philosophy
The Committee approaches executive compensation from a total compensation
perspective, carefully balancing all elements of the program to achieve the
Committee's
objectives as described above. Total compensation is deemed to include base
annual salary, annual cash incentive opportunities, and the annual value of
long-term incentive awards.
As a basic premise, the Company's executive compensation program is designed to
compensate executive officers with a base salary that generally is below market
levels. However, by placing a significant percentage of compensation at risk
through variable compensation opportunities, including annual cash incentive
and long-term incentive opportunities, executives have an opportunity to
achieve significantly greater total compensation when substantial improvements
in Company and individual performance are demonstrated.
The annual cash incentive component of the total compensation opportunity is
payable only when very aggressive and significant improvements in specific
measures of Company and individual performance are achieved over the course of
the fiscal year. The long-term incentive component of the total compensation
opportunity most frequently takes the form of nonqualified stock options
granted at fair market value, thus making a significant percentage of each
executive officer's compensation contingent upon the delivery of value to
shareholders.
Components of Compensation for Executive Officers Generally
To establish competitive total compensation opportunities that allow the
Company to attract and retain executive talent, the Committee gathers executive
compensation data from market surveys, proxy statements and independent
consultants. In 2001, an independent consulting firm was retained to assess the
executive compensation practices of companies considered comparable to AGL
Resources in terms of size and business mix, including gas utility companies,
energy companies with substantial unregulated activities and companies in
general industry.
The companies against which the Company compares its compensation are not
necessarily identical to those included in the S&P Utility Index referred to in
the Stock Performance Graph below. Based upon its review, the Committee
established total compensation
18
opportunities for the Company's executive officers generally targeted at what
it deemed to be the median of market practice.
Each component of the Company's executive compensation program serves a
specific purpose in meeting the Company's objectives and is described below. In
addition to those components, the Company may, from time to time, enter into
certain other arrangements with an executive upon his or her hiring in order to
attract and retain necessary executive talent.
Concurrent with the Company's formation of its Sequent Energy Management, LP
subsidiary, the Committee approved an incentive compensation program for
certain employees of that subsidiary, including Mr. Richard J. Duszynski, the
President and Chief Executive Officer of Sequent. In general, the Sequent
compensation program offers aggressive, risk-based incentive compensation
opportunities that are consistent with compensation practices in the energy
trading and marketing business in which Sequent is engaged.
Base Salary: Base salaries for executive officers are determined by job
responsibility, level of experience, individual performance and salaries
typically paid to executives in similar positions as determined by information
from market surveys and consultants. The goal for the base salary component is
to compensate executive officers at a level that is generally below the median
salary of individuals in positions of comparable complexity in companies of
comparable size and business mix. The Committee believes that this strategy,
along with aggressive annual and long-term incentives, will allow the Company
to retain and attract executive talent.
For fiscal 2001, the Committee approved salary increases to levels generally
below the market median for all executive officers. Mr. Duszynski's base salary
was established at about the 75/th /percentile of the market, consistent with
the practice that is typical in the energy trading and marketing industry.
Annual Incentive Compensation: The Committee has established the Annual Team
Performance Incentive Plan, which is referred to as the "ATPI Plan," as the
program under which annual cash incentives, tied to the achievement of Company
and individual performance goals, may be earned by all employees, including
executive officers. The ATPI Plan seeks to offer rewards that motivate
executives and other employees to devote their maximum efforts toward the
realization by the Company of aggressive and significant, yet achievable,
improvements in financial performance.
The program provides that each participant will have an annual incentive
compensation opportunity, expressed as a percentage of base annual salary. In
fiscal 2001, the Committee approved target percentages at levels slightly above
the market median. Annual incentives are earned to the extent that performance
exceeds a threshold level.
In fiscal 2001, the ATPI Plan approved by the Committee provided that one-half
of the target annual incentive compensation of executive officers (other than
the Chief Executive Officer) would be determined by improvement in the
Company's financial performance as measured by earnings per share, and one-half
would be determined by the degree to which individual performance objectives
established by the Committee were achieved. For fiscal 2001, target
opportunities for executive officers, other than Mr. Duszynski and Ms. Rosput,
ranged from 40% to 55% of base salary.
For fiscal 2001, the Company's threshold level of performance was exceeded, as
evidenced by a 21% increase in core earnings per share from fiscal 2000 to
fiscal 2001. Individual performance objectives were achieved in varying degrees
by each executive officer, and all of the executive officers received an annual
cash incentive payment under the ATPI Plan, as reflected in the Summary
Compensation Table below.
19
Under the Sequent compensation program, Mr. Duszynski may earn annual incentive
compensation based upon Sequent's financial performance as measured by EBIT.
Mr. Duszynski may elect in advance to receive all or a portion of his annual
incentive compensation in the form of an option to purchase AGL Resources
common stock. Mr. Duszynski elected to receive all of his annual incentive
compensation in the form of a stock option that was granted to him on October
1, 2001, at an exercise price per share equal to the then fair market value of
AGL Resources common stock.
Long-term Incentive Compensation: The Committee believes that long-term
incentives accomplish three objectives:
. align the long-term interests of the executive officers with those of
shareholders;
. help retain key executives in a competitive market; and
. increase ownership of AGL Resources stock among the Company's key
decision-makers.
Long-term incentive compensation most frequently takes the form of
non-qualified stock options granted at fair market value. Executive officers
and key employees are eligible for the stock option grants. Stock options also
may be granted to candidates for employment as an incentive to join AGL
Resources, and stock options are granted, on occasion, to reflect a promotion
or to adjust total compensation to better reflect market practice.
In fiscal 2001, the Committee granted stock options to executive officers as
reflected in the "Option Grants in Last Fiscal Year" table below. Stock options
were granted to executives based on a percentage of the executive's then
effective base salary and the Black-Scholes pricing model. The stock options
and restricted stock awarded to Ms. McLaughlin, Mr. Duszynski, Mr. O'Brien and
one other executive officer were granted to provide an incentive for them to
join the AGL Resources executive team.
Chief Executive Officer Compensation
The Committee reviews the compensation of the Company's Chief Executive
Officer, Paula G. Rosput, on an annual basis. The Company's compensation
consultants provided the Committee with data on Ms. Rosput's compensation,
considering AGL Resources'size, complexity and markets in which it competes for
talent. In determining Ms. Rosput's total compensation, the Committee also
considered: (i) her performance in prior positions with the Company and its
subsidiaries; (ii) her tenure in her current position; (iii) her demonstrated
leadership abilities and potential; (iv) retention; and (v) the demands that
will be placed on her if the Company's long-term growth strategies are to be
achieved.
Based on market data available to the Committee, the Committee structured Ms.
Rosput's fiscal 2001 compensation package to produce total compensation that
would be below the market median if performance is delivered at target.
However, the total compensation structure is sufficiently leveraged through
annual and long-term incentives to deliver at or slightly above market
compensation if performance exceeds expectations.
Specifically, for fiscal 2001, Ms. Rosput's total target incentive opportunity
was 67% of her base salary. Of this total target incentive, three-fourths was
determined by the Company's financial performance, and one-fourth was
determined by achievement of individual performance objectives established by
the Committee. As is the case with the other executive officers, no incentive
payments are made under the ATPI Plan unless the threshold levels of Company
performance are met.
For fiscal 2001, Ms. Rosput earned base salary of $562,499. Ms. Rosput also
received annual incentives and long-term incentives as set forth in the Summary
Compensation Table below. The amount awarded to Ms. Rosput as an annual
incentive under the ATPI plan was based (1) on the Company's achievement of
specific performance measures as established by the
20
Committee, as evidenced by a 21% increase in core earnings per share from
fiscal 2000 to fiscal 2001 and (2) Ms. Rosput's achievement of individual
performance objectives including (a) the articulation of a viable growth
strategy for the business, (b) the achievement of improvements in the
performance of the Company's operating units, and (c) the building of a
high-performance culture that is focused on maintaining positive relationships
with the public, regulators and investors. The grant of long-term incentive in
the form of nonqualified stock options was determined primarily by the
Committee's desire to increase Ms. Rosput's stake in the Company and to provide
rewards consistent with Company performance over the long term.
Code Section 162(m) Implications for Executive Compensation
It is the responsibility of the Committee to address the issues raised by
Section 162(m) of the Internal Revenue Code of 1986, as amended, which we refer
to as the "Code." Code Section 162(m) limits the Company's annual deduction to
$1,000,000 for compensation paid to its chief executive officer and to each of
the next four most highly compensated executives of the Company. Certain
compensation which qualifies as "performance-based" or which meets other
requirements under the Code may be exempt from the Code Section 162(m) limit.
The Company intends to qualify certain compensation paid to executive officers
for deductibility under the Code, including Code Section 162(m). However, the
Company may from time to time pay compensation to its executive officers that
may not be deductible.
Felker W. Ward, Jr. (Chair)
Frank Barron, Jr.
Dennis M. Love
Karen R. Osar
The information contained in the Compensation Committee Report shall not be
deemed to be "soliciting material" or to be "filed" with the Securities and
Exchange Commission, nor shall such information be incorporated by reference
into any future filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates it by reference in such filing.
21
EXECUTIVE COMPENSATION
The Summary Compensation Table shows, for the last three fiscal years, the
total compensation paid to, or accrued by the Company for, our chief Executive
Officer, our four next most highly compensated executive officers, and one
former executive officer who would have been among our five most highly
compensated executive officers but for the fact that he departed the Company
during fiscal 2001.
Summary Compensation Table
----------------------------------------------------------------------------------------------------------------
--------------------------- ----------- ------- ---------
--------------------------- ----------- Long-Term ------- ---------
Annual Compensation Compensation
------------------------------------------------------
- ------------------------------------------------------- - -
Other Restricted Securities
Fiscal Year Annual Stock Underlying All Other
Ended Salary Bonus Compensation Awards Options LTIP Compen-
September ($)(1) ($)(1)(2) ($)(3) ($)(4) (#)(5) Payouts sation
Name and Principal Position- 30 -------------------------------------------------------($)(6) - ($)(7) -
----------------------------------------------------------------------------------------------------------------
Paula G. Rosput 2001 $562,499 $700,000 $ 0 $ 0 75,000 $31,278 $ 34,645
President and CEO; 2000 359,731 230,666 0 0 165,000 -- 14,128
Chairman of Atlanta 1999 646,846 194,000 148,311 0 27,177 -- 12,000
Gas Light Company
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Richard J. Duszynski 2001 283,538 222,871 0 0 80,000 -- 18,736
President and CEO of 2000 -- -- -- -- -- -- --
Sequent 1999 -- -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Susan A. McLaughlin 2001 148,558 250,000 0 177,280 75,000 -- 13,976
Executive Vice 2000 -- -- -- -- -- -- --
President and 1999 -- -- -- -- -- -- --
Chief Operating Officer
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Richard T. O'Brien 2001 123,462 225,000 0 110,800 50,000 -- 7,892
Executive Vice 2000 -- -- -- -- -- -- --
President and Chief 1999 -- -- -- -- -- -- --
Financial Officer
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Paul R. Shlanta 2001 235,846 162,000 0 0 20,000 19,543 23,491
Senior Vice President 2000 220,077 115,560 0 0 58,000 -- 8,230
and General Counsel 1999 200,000 0 13,926 0 16,471 -- 7,800
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Donald P. Weinstein 2001 240,000 178,750 91,123 0 20,000 -- 688,851
Senior Vice President 2000 216,923 363,400 31,832 173,750 96,100 -- 7,560
and Chief Financial 1999 -- -- -- -- -- -- --
Officer through
April 30, 2001 (8)
----------------------------------------------------------------------------------------------------------------
22
Notes to Summary Compensation Table
(1) Includes any before-tax contributions for the indicated fiscal years made
by the named executive officers to the RSP Plan and the AGL Resources Inc.
Nonqualified Savings Plan, which we refer to as the "NSP."
(2) For fiscal 2001: For Ms. Rosput and Mr. Shlanta, reflects annual incentive
compensation earned under the ATPI Plan in fiscal 2001 and paid in fiscal
2002. For Mr. Duszynski, includes (a) incentive payment earned and paid in
fiscal 2001 as interim President of Atlanta Gas Light Company, and (b)
annual incentive compensation earned in fiscal 2001 under the Sequent
Incentive Compensation Plan and a one-time signing incentive payment from
Sequent in fiscal 2001. At Mr. Duszynski's advance election, he received
his Sequent annual incentive compensation and one-time signing incentive in
fiscal 2002 in the form of a nonqualified stock option for 70,216 shares.
For Ms. McLaughlin and Mr. O'Brien, reflects guaranteed first-year
incentive payments and annual incentive compensation earned under the ATPI
Plan in fiscal 2001 and paid in fiscal 2002. For Mr. Weinstein, reflects a
negotiated payment made in connection with his termination of employment
with the Company and the second of two incentive payments related to the
acquisition by the Company of Virginia Natural Gas, Inc. in fiscal 2001.
For fiscal 2000: For Ms. Rosput and Messrs. Shlanta and Weinstein, reflects
annual incentive compensation earned under the ATPI Plan in fiscal 2000 and
paid in fiscal 2001. For Mr. Weinstein, reflects a guaranteed first-year
incentive payment associated with his resignation from his former employer,
as well as the first of two incentive payments related to the company's
acquisition of Virginia Natural Gas, Inc.
For fiscal 1999: For Ms. Rosput, reflects a one-time signing incentive paid
to defray the loss of income and benefits associated with her resignation
from her former employer and a guaranteed first-year incentive payment.
(3) For fiscal 2001: For Mr. Weinstein reflects the reimbursement of taxes
related to the vesting of shares of restricted stock, which were issued on
a one-time basis on his date of employment. See note (4) below.
For fiscal 2000: For Mr. Weinstein reflects the reimbursement of taxes
related to the Company's payment of relocation expenses.
For fiscal 1999: For Ms. Rosput and Mr. Shlanta, reflects the reimbursement
of taxes related to the vesting of shares of restricted stock which were
issued on a one-time basis on their respective dates of employment, and
solely for Ms. Rosput, reflects reimbursements of taxes related to the
Company's payment of relocation expenses.
(4) Dollar amounts shown equal the number of shares of restricted stock
multiplied by the fair market value on the date of grant.
For fiscal 2001: For Ms. McLaughlin and Mr. O'Brien, reflects a one-time
issuance of restricted stock on the respective dates of their employment,
which vests in equal installments over a three-year period.
For fiscal 2000: For Mr. Weinstein, reflects a one-time issuance of
restricted stock on the date of his employment which vests in equal
installments over a two-year period.
The number and value of aggregate stock holdings that were subject to
restriction on September 30, 2001, based on the fair market value of the
Company's common stock at September 30, 2001 of $19.97 per share, were as
follows: Ms. McLaughlin-8,000 shares ($159,760) and Mr. O'Brien-5,000
shares ($99,850). Dividends are paid
23
on all shares of restricted stock at the same rate as on unrestricted
shares.
(5) Reflects shares of common stock subject to options, including reload
options.
For fiscal 2001: For Ms. McLaughlin and Messrs. Duszynski and O'Brien,
reflects a one-time stock option granted on the respective dates of their
employment.
(6) No long-term incentive awards were
granted in fiscal 2001.
(7) For fiscal 2001, reflects the following: (a) Company contributions to the
RSP Plan: Ms. Rosput-$17,325; Mr. Duszynski- $18,736; Ms.
McLaughlin-$12,851; Mr. O'Brien-$6,092; Mr. Shlanta-$18,975; and Mr.
Weinstein-$17,344; (b) Company contributions to the NSP: Ms.
Rosput-$17,320; Ms. McLaughlin-$1,125; Mr. O'Brien-$1,800; Mr.
Shlanta-$4,516; and Mr. Weinstein-$2,160; and (c) negotiated payments made
upon his resignation: Mr. Weinstein-$669,347.
(8) During fiscal 2001, Mr. Weinstein served as Senior Vice President and Chief
Financial Officer through April 30, 2001. See "Other Matters Involving
Directors and Executive Officers-Other Agreements" below.
24
Option Grants
The following table presents information concerning stock options granted
to the named executive officers during fiscal 2001.
Option Grants in Last Fiscal Year
Number of % of Total
Securities Options Grant
Underlying Granted to Date
Options Employees Exercise or Present
Granted in Fiscal Base Price Expira- Value
Name (#)(1) Year ($/Sh)(2) tion date ($)(3)
--------------------------------------------------------------------------
Paula G. Rosput 75,000 6.5% $20.69 11/2/10 $290,250
--------------------------------------------------------------------------
Richard J. Duszynski 80,000 6.9 21.91 4/1/11 334,400
--------------------------------------------------------------------------
Susan A. McLaughlin 75,000 6.5 22.16 4/26/11 321,750
--------------------------------------------------------------------------
Richard T. O'Brien 50,000 4.3 22.16 4/26/11 214,500
--------------------------------------------------------------------------
Paul R. Shlanta 20,000 1.7 20.69 11/2/10 77,400
--------------------------------------------------------------------------
Donald P. Weinstein 20,000 1.7 20.69 11/2/10 77,400
Notes to Options Grant Table
(1) Options were granted to the named executive officers under the LTIP and the
OIP at prices equal to the fair market value of the Company's common stock
on the date of grant. In general, nonqualified stock options first become
exercisable 12 months after the date of grant. Options are subject to early
termination upon the occurrence of certain events related to termination of
employment. All options immediately become exercisable in the event of a
change in control.
(2) The exercise price of options may be paid in cash, by delivery of
already-owned shares of common stock of the Company or by any other method
approved by the Compensation Committee, which administers the LTIP and the
OIP. To the extent that the exercise price of an option is paid with shares
of common stock of the Company, a "reload option" will be granted to the
employee. A reload option is an option granted to an employee for the same
number of shares as is exchanged in payment of the exercise price and is
subject
to all of the same terms and conditions as the original option except for
the exercise price, which is determined on the basis of the fair market
value of the Company's common stock on the date the reload option is
granted. One or more successive reload options may be granted to an
employee who pays for the exercise of a reload option with shares of common
stock of the Company.
(3) "Grant date present value" represents the estimated present value of stock
options, measured at the date of grant using the Black-Scholes Warrant
Valuation Call Option Model. An optionee realizes value from a stock option
only to the extent that the price of AGL Resources common stock on the
exercise date exceeds the price of the stock on the grant date.
Consequently, there is no assurance that the value realized by an optionee
will be at or near the estimated grant date present value. Those amounts
should not be used to predict stock performance.
(4) All of Mr. Weinstein's unexercised options were forfeited to the Company
concurrent with his resignation from the Company. See "Other Matters
Involving Directors and Executive Officers--Other Agreements" below.
25
Option Exercises
The following table presents information concerning options exercised by the
named executive officers during fiscal 2001.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values
----------------------------------------------------------------------------------------------------
Exercises During Year Fiscal Year End
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised In-
Shares Options at Fiscal Year End the-Money Options at
Acquired Value (#) Fiscal Year End ($)(1)
on Realized ------------------------------------------------------
Name Exercise(#) ($) Exercisable Unexerciseable Exercisable Unexerciseable
----------------------------------------------
----------------------------------------------------------------------------
Paula G. Rosput 0 0 217,470 79,707 $167,524 $0
----------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Richard J. Duszynski 0 0 0 80,000 0 0
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Susan A. McLaughlin 0 0 0 75,000 0 0
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Richard T. O'Brien 0 0 0 50,000 0 0
----------------------------------------------------------------------------------------------------
------------
Paul R. Shlanta 0 0 104,469 20,002 139,610 0
----------------------------------------------------------------------------------------------------
------------
Donald P. Weinstein (2) 0 0 0 0 0 0
------------
Notes to option exercises table
(1) The respective values for "in-the-money" options represent the positive
spread between the exercise price of options outstanding at September 30,
2001 and the fair market value of the Company's common stock at September
30, 2001. Certain exercisable options held by the named executive officers
were not "in-the-money" at September 30, 2001.
(2) All of Mr. Weinstein's unexercised options were forfeited to the Company
concurrent with his resignation from the Company. See "Other Matters
Involving Directors and Executive Officers-Other Agreements" below.
26
Retirement Plan
The Retirement Plan is a qualified defined benefit pension plan which covers
all employees of the Company and its participating affiliate companies (except
leased employees) who have satisfied certain standards as to hours of service,
who have attained age 21 and who have been employed for at least one year.
Benefits under the Retirement Plan are based upon age, compensation and length
of service, with varying provisions for employees who are terminated or take
early, normal or deferred retirement. The Retirement Plan also provides,
subject to certain conditions, for the payment of vested benefits of a deceased
employee to his or her spouse during such spouse's lifetime.
The Company makes contributions to the Retirement Plan to fund the benefits,
which accrue thereunder. Annual contribution amounts are determined
actuarially. Participant contributions are not permitted.
The Retirement Plan benefit formula has historically been based on a "final
average earnings" computation, based on a participant's earnings for the
highest compensation during 78 consecutive payroll periods out of his last 130
consecutive payroll periods of employment with the Company. Effective as of
July 1, 2000, the Retirement Plan was amended to change the benefit formula for
future benefit accrual from a "final average earnings" formula to a "career
average earnings" formula. Participants who were age 50 or more on June 30,
2000 will continue to be covered under the final average earnings formula until
July 1, 2010.
For individuals who are subject to the final average earnings formula, the
compensation covered by the Retirement Plan includes the base rate of earnings
actually paid to a participant by the Company (up to dollar limits imposed by
the Internal Revenue Service). That amount of compensation does not include
overtime or annual incentive compensation.
For participants who are subject to the career average earnings formula, a
participant's annual benefit accrual will be equal to 1% of compensation plus
1/2% of compensation in excess of 1/2% of the Social Security wage base for the
year. For persons subject to the career average earnings formula, the
compensation counted for purposes of the Retirement Plan will include overtime
and incentive compensation for the applicable year.
In addition, the Company maintains an Excess Benefit Plan for its employees.
The purpose of the Excess Benefit Plan is to restore pension benefits to
employees who are prevented from receiving their total accrued benefits under
the Retirement Plan because of the maximum benefit limitations imposed on
qualified retirement plans by Code Sections 415 and 401(a)(17). The Excess
Benefit Plan is not funded, and benefit payments are made directly by the
Company. Benefits under the Excess Benefit Plan are payable in the same form
and according to the same general terms and conditions as benefits under the
Retirement Plan. All employees who participate in the Retirement Plan whose
benefits are limited by the provisions of the Code will receive restoration of
benefits under the Excess Benefit Plan.
27
The following Pension Plan Table I shows the estimated annual lifetime benefits
calculated on a straight-life annuity basis and payable under the AGL Resources
Inc. Retirement Plan and the AGL Resources Inc. Excess Benefit Plan under the
final average earnings formula to persons in specified compensation and years
of service classifications upon retirement at age 65. Benefit amounts shown in
the table below are based on assumed continued employment to age 65 and are
subject to reductions for a portion of Social Security benefits.
PENSION PLAN TABLE I
Final Average Earnings Formula
Three-Year Average Years of Service
Earnings ------------------------------------------------------
5 10 15 20 25 30
-------------------------------------------------------------------------
$ 100,000 $ 8,333 $ 16,667 $ 25,000 $ 33,333 $ 41,667 $ 50,000
150,000 12,500 25,000 37,500 50,000 62,500 75,000
200,000 16,667 33,333 50,000 66,667 83,333 100,000
250,000 20,833 41,667 62,500 83,333 104,167 125,000
300,000 25,000 50,000 75,000 100,000 125,000 150,000
350,000 29,167 58,333 87,500 116,667 145,833 175,000
400,000 33,333 66,667 100,000 133,333 166,667 200,000
450,000 37,500 75,000 112,500 150,000 187,500 225,000
500,000 41,667 83,333 125,000 166,667 208,333 250,000
550,000 45,833 91,667 137,500 183,333 229,167 275,000
600,000 50,000 100,000 150,000 200,000 250,000 300,000
650,000 54,167 108,333 162,500 216,667 278,833 325,000
700,000 58,333 116,667 175,000 233,333 291,667 350,000
750,000 62,500 125,000 187,500 250,000 312,500 375,000
1,000,000 83,333 166,667 250,000 333,333 416,667 500,000
1,250,000 104,167 208,333 312,500 416,667 520,833 625,000
1,500,000 125,000 250,000 375,000 500,000 625,000 750,000
The following Pension Plan Table II shows the estimated annual lifetime
benefits calculated on a straight-life annuity basis and payable under the AGL
Resources Inc. Retirement Plan and the AGL Resources Inc. Excess Benefit Plan
under the career average earnings formula to persons in specified compensation
and years of service classifications upon retirement at age 65. Benefit amounts
shown in the table below are based on continued employment to age 65, assume a
level Social Security wage base at the current rate, and assume that the career
average earnings formula applies to all years of service.
28
PENSION PLAN TABLE II
Career Average Earnings Formula
--------------------------------------------------------------------
------------- Years of Service
------------------------------------------------------
------------------------------------------------------
Earnings Each 5 10 15 20 25 30
Year Service -------------------------------------------------------
$ 100,000. $ 6,439 $ 12,878 $ 19,316 $ 25,755 $ 32,194 $ 38,633
150,000. 10,189 20,378 30,566 40,755 50,944 61,133
200,000. 13,939 27,878 41,816 55,755 69,694 83,633
250,000. 17,689 35,378 53,066 70,755 88,444 106,133
300,000. 21,439 42,878 64,316 85,755 107,194 128,633
350,000. 25,189 50,378 75,566 100,755 125,944 151,133
400,000. 28,939 57,878 86,816 115,755 144,694 173,633
450,000. 32,689 65,378 98,066 130,755 163,444 196,133
500,000. 36,439 72,878 109,316 145,755 182,194 218,633
550,000. 40,189 80,378 120,566 160,755 200,944 241,133
600,000. 43,939 87,878 131,816 175,755 219,694 263,633
650,000. 47,689 95,378 143,066 190,755 238,444 286,133
700,000. 51,439 102,878 154,316 205,755 257,194 308,633
750,000. 55,189 110,378 165,566 220,755 275,944 331,133
1,000,000. 73,939 147,878 221,816 295,755 369,694 443,633
1,250,000. 92,689 185,378 278,066 370,755 463,444 556,133
1,500,000. 111,439 222,878 334,316 445,755 557,194 668,633
The amounts shown in the Summary Compensation Table above do not include the
Company's contributions for the named executive officers in connection with the
Retirement Plan or the Excess Benefit Plan. Such amounts are not and cannot be
readily separated or individually calculated. The Company did not make a
contribution to the Retirement Plan for the plan year ended June 30, 2001.
As of the plan year ended June 30, 2001, Ms. Rosput and Mr. Shlanta each had
three years of service for purposes of the Retirement Plan. As of June 30,
2001, Mr. Duszynski, Ms. McLaughlin and Mr. O'Brien were not yet eligible to
participate in the Retirement Plan. Mr. Weinstein was not eligible to
participate in the Retirement Plan at the time of his separation from the
Company.
The estimated annual benefit payable under the Retirement Plan and the Excess
Benefit Plan upon retirement at normal retirement age for each of the eligible
named executive officers is as follows: Ms. Rosput, $199,580; and Mr. Shlanta,
$81,874. These calculations are based on the assumptions of continued
employment to age 65 with level compensation at current rates, no projection of
the Social Security wage base or law changes and payment in the form of single
life annuity commencing at age 65.
The Retirement Plan and the Excess Benefit Plan are administered by the
Retirement Plan Administrative Committee appointed by the board of directors.
State Street Bank and Trust Company currently serves as Trustee of the
Retirement Plan.
29
OTHER MATTERS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
Change in Control Agreements
All named executive officers other than Mr. Weinstein have continuity
agreements with the Company. The purpose of these agreements is to retain key
management personnel and assure continued productivity of such personnel in the
event of a change in control of the Company.
The Continuity Agreements define a "change in control" to generally mean the
occurrence of any of the following events:
. the acquisition by a person or group of persons of 10% or more of the
voting securities of the Company;
. the approval by the shareholders of a merger, business combination, or sale
of 50% or more of the Company's assets, the result of which is that less
than 80% of the voting securities of the resulting corporation is owned by
the former shareholders of the Company; or
. the failure, during any two-year period, of incumbent directors to
constitute at least a majority of the board of directors of the Company.
Generally, no benefits are provided under the continuity agreements for any
type of termination that occurs before the Company's announcement of its
intention to engage in a transaction that is expected to result in a change in
control, which we refer to as a "change in control transaction," or for
terminations that occur after such an announcement due to death, disability,
voluntary termination without "good reason" or any termination for "cause,"
which includes failure to perform duties and responsibilities and fraud or
dishonesty. "Good reason" includes a material diminution of position or duties,
adverse changes in compensation, adverse changes in benefits (unless all
executives suffer the same changes), relocation to a location in excess of 35
miles from the location where the executive was based, and failure of a
successor to assume the agreement.
Upon the announcement of a change in control transaction, the Continuity
Agreements provide a severance benefit of three years of base salary and target
annual incentive compensation to a named executive officer who experiences a
qualifying termination. A named executive officer experiences a qualifying
termination when such officer's employment is involuntarily terminated without
cause or voluntarily terminated for good reason. The severance benefit remains
payable in connection with any qualifying termination that occurs through the
second anniversary of the date of the consummation of the change in control.
The Continuity Agreements also provide a three-year continuation of medical,
dental and life insurance benefits, full vesting of all long-term incentive
compensation, payment of any forfeited matching contributions under the RSP
Plan and NSP, and outplacement assistance. In addition, the Continuity
Agreements provide that if the officer is age 50 or above, he or she will be
deemed vested in the accrued benefits under the Retirement Plan, and if he or
she is already vested, then he or she will be deemed to be age 55 for purposes
of the Retirement Plan. The Company will pay any additional retirement benefit
payable due to these provisions of the Continuity Agreements from general
assets. The officers may also receive up to $100,000 of legal fees in
connection with the enforcement of payouts under the Continuity Agreements.
If the payments to the Chief Executive Officer under the Continuity Agreement
are subject to excise taxes under Code Section 4999, the Company will pay the
Chief Executive Officer an additional amount equal to the excise tax, plus an
amount equal to the state, federal and FICA taxes on the additional amount. If
the payments under the Continuity Agreements for
30
the other named executive officers exceed the base amount permitted under Code
Section 280G(b)(3) by 10% or more, the Company will pay the affected officer an
additional amount equal to the excise tax, plus an amount equal to the state,
federal and FICA taxes on the additional amount.
Other Agreements
During fiscal 2000, the Company entered into an agreement with Mr. Weinstein to
provide Mr. Weinstein with an incentive to further the Company's objective of
gaining additional scale through strategic transactions. The agreement provided
for incentive payments to Mr. Weinstein in the event the Company engaged in any
acquisition, merger or disposition transaction with an equity value of more
that $200 million.
On April 30, 2001, Mr. Weinstein ceased to be an employee of the Company. The
Company and Mr. Weinstein entered into an agreement that provided that all
unexercised stock options held by Mr. Weinstein expired or were forfeited
effective as of the last day of his employment in exchange for a payment to Mr.
Weinstein of $669,347. Pursuant to the agreement, all of Mr. Weinstein's
performance units were forfeited to the Company and all unvested shares of
restricted stock became vested as of Mr. Weinstein's separation date. The
Company's obligation under the agreement also includes payment to Mr. Weinstein
equal to his annual base salary of $240,000 payable semi-monthly over 12
months, plus a lump sum of $78,750.
Under the agreement, Mr. Weinstein agreed to certain restrictions on his
ability to provide services to persons or entities that compete with the
Company or any of its affiliates, to solicit customers and employees of the
Company and to disclose the Company's confidential information. Mr. Weinstein
also agreed to release the Company from any claims relating to his employment
with the Company.
In connection with Ms. McLaughlin's employment as Executive Vice President and
Chief Operating Officer of the Company and as President of Atlanta Gas Light
Company effective May 1, 2001, the Company and Ms. McLaughlin entered into a
letter agreement in April 2001. The letter agreement sets forth the basic terms
of Ms. McLaughlin's employment, including compensation. The letter agreement
also provides that Ms. McLaughlin will become entitled to a lump sum payment
equal to one year of base salary in the event that (i) the position of CEO of
the Company becomes vacant at any time during the first three years of Ms.
McLaughlin's employment and (ii) Ms. McLaughlin remains in the Company's employ
for at least six months following the new CEO's date of hire or promotion. This
provision applies even if Ms. McLaughlin is selected as the new CEO. The letter
agreement also provides that in the event Ms. McLaughlin's employment is
terminated during the first twelve months of her employment, for any reason
other than cause, death or disability, she will be entitled to a severance
benefit equal to the greater of (i) the severance benefit she would be entitled
to under the Company's employee severance plan or (ii) an amount equal to one
year of base salary.
In connection with Mr. Duszynski's employment as President and Chief Executive
Officer of Sequent Energy Management, LP, AGL Services Company, a wholly-owned
subsidiary of the Company, which we refer to as "AGLS," and Mr. Duszynski
entered into an employment agreement setting forth the terms and conditions of
Mr. Duszynski's employment. The agreement has an initial term of three and
one-half years from April 1, 2001 and thereafter will be automatically extended
for consecutive one-year terms unless either party gives notice to the other
party of its intent for the agreement not to renew. In addition to setting
forth basic terms of employment, including compensation, the agreement requires
AGLS to provide Mr. Duszynski with $1 million of term life insurance during the
term of the agreement. The
31
agreement also imposes certain restrictions, both during and after the term of
the agreement, on Mr. Duszynski's ability to provide services to persons or
entities that compete with AGLS or any of its affiliates, to solicit customers
and employees of AGLS or its affiliates and to disclose confidential
information of AGLS and its affiliates.
The agreement also provides that in the event Mr. Duszynski's employment is
terminated other than for cause (as defined in the agreement) or in the event
Mr. Duszynski terminates his employment for good reason (as defined in the
agreement) and upon Mr. Duszynski's execution of a general release, he would be
entitled to severance in an amount equal to the sum of (i) the greater of (a)
12 months of his monthly base salary then in effect or (b) the base salary
payable for the remainder of the then remaining term of the agreement and (ii)
a prorated portion of the annual incentive compensation that would otherwise
have been payable to him for the year in which the termination occurs. In
addition, upon termination by AGLS other than for cause, or upon termination by
Mr. Duszynski for good reason, Mr. Duszynski and his covered dependents would
be entitled to all employee benefits and the above-referenced life insurance
until the later of (i) the date that is one year from the termination date or
(ii) the last day of the then-remaining term of the agreement. The agreement
provides that it shall terminate immediately upon Mr. Duszynski's death or
disability (as defined in the agreement). In such event, the agreement provides
that all employee benefits and the above-referenced life insurance shall
continue to be provided by AGLS to Mr. Duszynski and his covered dependents
until the later of (i) one year following the termination date or (ii) the last
day of the then-remaining term.
32
STOCK PERFORMANCE GRAPH
The following line graph and accompanying tabular presentation compare the
cumulative 62 month shareholder return on common stock of the Company with the
cumulative 62 month total return of companies in the Standard & Poor's 500
Composite Stock Price Index and the Standard & Poor's Utilities Index. The
graph and table assume that $100 was invested on September 30, 1996 in common
stock of the Company, the S&P 500 Index and the S&P Utilities Index and also
assumes dividend reinvestment.
[CHART]
COMPARISON FOR 62 MONTH CUMULATIVE TOTAL RETURN*
AMONG RESOURCES INC., THE S&P 500 INDEX
AND THE S&P UTILITIES INDEX
AGL Resources $100.00 104.54 113.15 100.32 131.57 137.38 149.25
S&P 500 $100.00 140.45 153.15 195.74 221.74 162.71 178.53
S&P Utilities $100.00 114.38 148.72 146.99 212.43 159.69 150.56
9/30/96 9/30/97 9/30/98 9/30/99 9/30/00 9/30/01 11/30/01
9/30/96 9/30/97 9/30/98 9/30/99 9/30/00 9/30/01 11/30/01
------------------------------------------------------------------------------------------
AGL Resources Inc. Common Stock $100 104.54 113.15 100.32 131.57 137.38 149.25
------------------------------------------------------------------------------------------
S&P 500 Index $100 140.45 153.15 195.74 221.74 162.71 178.53
------------------------------------------------------------------------------------------
S&P Utilities Index $100 114.38 148.72 146.99 212.43 159.69 150.56
The information contained in the Stock Performance Graph shall not be deemed
to be "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
33
PROPOSAL 2:
ADOPTION OF THE AGL RESOURCES INC.
EXECUTIVE PERFORMANCE INCENTIVE PLAN
On October 30, 2001, the board of directors adopted the AGL Resources Inc.
Executive Performance Incentive Plan, subject to approval of the shareholders.
The plan provides for the payment of annual incentive compensation to
participants based upon the achievement of performance goals established
annually by the Compensation Committee based on one or more specified
performance criteria.
If the plan is approved by the shareholders at the annual meeting, it will
become effective as of October 1, 2001 and will continue from year to year
until terminated by the board of directors. If the plan is not approved by the
shareholders at the annual meeting, certain payments of annual incentive
compensation to the Company's executive officers may not be fully deductible by
the Company as a compensation expense under Code Section 162(m), as discussed
further below.
Summary of the Plan
The following summary of the plan is qualified in its entirety by the full text
of the plan, a copy of which has been filed electronically with the Securities
and Exchange Commission with this proxy statement. You are encouraged to read
the full text of the plan if you need more information.
Consistent with the information regarding Code Section 162(m) presented in the
Compensation Committee Report above, this plan is presented for approval by the
shareholders in order to preserve the Company's deduction under Code Section
162(m) for certain performance-based compensation that may be paid to its
executive officers. Another purpose of the plan is to further the Company's
ability to attract and retain qualified executives by providing
performance-based compensation as an incentive for their efforts to achieve
financial and strategic objectives.
The plan authorizes the payment of annual incentive compensation to eligible
employees of the Company. Participation in the plan is limited to the executive
officers of the Company and any other employees of the Company or its
subsidiaries which the Committee, at the time it sets performance goals for a
particular year, reasonably believes may be deemed to be covered employees for
such year under Code Section 162(m), as the same may be amended from time to
time. Under Code Section 162(m), a covered employee currently is defined as any
individual who, on the last day of the taxable year, is the Chief Executive
Officer of the Company or acting in that capacity, or one of the four highest
compensated officers of the Company (other than the Chief Executive Officer)
determined pursuant to the executive compensation rules under the Securities
Exchange Act of 1934.
The plan will be administered by a committee of the board of directors
consisting solely of two or more outside directors, as defined in the
regulations under Code Section 162(m). Until specified otherwise, the plan will
be administered by the Compensation Committee.
At the beginning of each fiscal year, the Committee will select the
participants in the plan for that year. An employee hired or promoted during
the year may subsequently be named as a participant. No later than 90 days
after the beginning of the year, the Committee will specify in writing the
performance goals and annual performance incentive payments that are to apply
for that year. Performance incentive payments may vary among participants and
from year to year, but the maximum incentive payment to any participant in a
year is $4,000,000.
The performance goals established by the Committee must be based upon one or
more of the following factors: (i) earnings before interest expense, taxes,
depreciation and amortization, or "EBITDA;" (ii) earnings before interest
expense
34
and taxes "EBIT;" (iii) net earnings; (iv) net income; (v) operating income;
(vi) earnings per share; (vii) book value per share; (viii) return on
shareholders' equity; (ix) capital expenditures; (x) expenses and expense ratio
management; (xi) return on investment; (xii) improvements in capital structure;
(xiii) profitability of an identifiable business unit or product; (xiv)
maintenance or improvement of profit margins; (xv) stock price; (xvi) market
share; (xvii) revenues or sales; (xviii) costs; (xix) cash flow; (xx) working
capital; (xxi) return on assets; (xxii) economic value added; and (xxiii) gross
or net profit. The foregoing criteria may relate to AGL Resources, one or more
of our subsidiaries, one or more of our divisions or units or any combination
of the foregoing, and may be applied on an absolute basis or be relative to one
or more peer group companies or indices, or any combination thereof, all as the
Committee determines.
As soon as possible after the end of each year, the Committee will certify for
each participant whether the performance goals for that year have been met. If
such goals have been met, the Committee may authorize payment of the annual
performance incentive compensation to the participant. The Committee has
discretion to reduce, but not to increase, the previously established annual
performance incentive compensation if the performance goals have been met.
Annual performance incentive compensation awards will be paid in cash (or as
otherwise determined by the Committee) as soon as practicable following the
close of the performance year. However, such payment may be subject to deferral
pursuant to the provisions of any applicable deferred compensation plan
maintained by the Company or its subsidiaries.
If a participant's employment is terminated for cause during a performance
year, he or she will not receive any annual performance incentive compensation
for that year. To the extent not governed by an applicable contractual
arrangement between the Company and the participant, the effect of a change in
control (as defined in the plan) on the annual performance incentive
compensation of any participant will be determined by the Committee in its sole
discretion.
The board of directors may amend or terminate the plan at any time, but no such
amendment or termination will affect the payment of annual performance
incentive compensation for a year already ended, and no such amendment may,
without the approval of the shareholders, change the material terms of a
performance goal or effect any other change that would cause the loss of a tax
deduction to the Company under Code Section 162(m) absent shareholder approval.
Federal Income Tax Consequences.
A participant will recognize ordinary income, and the Company will be allowed a
tax deduction, at the time annual performance incentive compensation is paid or
payable. Code Section 162(m) provides that no federal income tax deduction is
allowed for compensation paid to a covered employee in any taxable year to the
extent that such compensation exceeds $1,000,000. This deduction limitation
does not apply to compensation that is performance-based compensation within
the meaning of the Code Section162(m) regulations. The plan is intended to
preserve the Company's federal income tax deduction for annual performance
incentive compensation payments under the plan by meeting the requirements for
performance-based compensation under Code Section162(m).
Benefits to Named Executive Officers and Others
Only our executive officers are currently eligible to participate in the plan.
It is not possible at this time to determine with respect to the named
executive officers or the executive officers as a group the benefits or amounts
that will be received by such persons under the plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE EXECUTIVE
PERFORMANCE INCENTIVE PLAN.
35
PROPOSAL 3:
AMENDMENT OF THE AGL RESOURCES INC.
LONG-TERM INCENTIVE PLAN (1999)
On October 30, 2001, our board of directors adopted the first amendment to the
AGL Resources Inc. Long-Term Incentive Plan (1999), subject to the approval of
the shareholders, to increase the number of shares available under the plan,
increase the maximum number of shares underlying options or performance units
that may be granted to an individual in any one calendar year, permit the
Compensation Committee to grant performance units that do not include dividend
equivalents or that will not become automatically vested upon a change of
control, permit the Committee to grant options that have exercise prices in
excess of the fair market value of the underlying shares on the date of grant,
and minor other amendments.
As of December 1, 2001, there were 1,827,238 outstanding options and 651,238
shares available for grant under the plan. We believe that the proposed
amendments are needed to provide us with the ability to continue to attract and
retain highly qualified employees. If the shareholders approve the amendment,
it will be effective as of January 1, 2002.
Summary of the Plan
A summary of the plan, as proposed to be amended, is set forth below. The
summary is qualified in its entirety by the full text of the plan as proposed
to be amended, a copy of which has been filed electronically with the
Securities and Exchange Commission as a part of this proxy statement. You are
encouraged to read the full text of the plan if you need more information.
The purpose of the plan is to reward the creation of shareholder value by
structuring long-term incentive opportunities that are directly linked to the
growth, efficiency and profitability of the Company.
Key employees of our Company and its related companies are eligible to
participate in the plan. As of December 1, 2001, there were approximately 290
participants in the plan.
The plan authorizes the granting of awards in the form of:
. options to purchase shares of common stock, which may be incentive stock
options or nonqualified stock options;
. restricted stock; and
. performance units, which represent the right to receive shares of common
stock in the future.
Prior to the proposed amendment, the maximum number of shares that may be
issued under the plan is 2,800,000 shares of common stock. The proposed
amendment would increase the maximum number of shares that may be issued under
the plan to 5,500,000 shares of common stock (an initial increase of 2,700,000
shares), plus an annual increase as of each January 1 (commencing on January 1,
2003) equal to two percent of the shares of common stock outstanding on the
immediately preceding December 31; provided that no more than 5,500,000 shares
may be issued in the form of incentive stock options. To the extent that an
award is canceled, terminates, expires, is forfeited or lapses for any reason,
any shares of stock subject to the award will again be available for the grant
of awards under the plan. Shares issued under the plan may be shares of
original issuance, treasury shares or shares acquired by the Company in the
open market.
The plan is administered by the Compensation Committee of our board of
directors. That
36
committee, or a subcommittee thereof if required for Code Section 162(m)
compliance, has full discretionary authority concerning the issuance of awards
under the plan and the interpretation and administration of the plan. The
Committee decides whether and to what extent awards will be structured to
conform with Code Section 162(m) requirements applicable to performance-based
compensation. All decisions of the Committee and its actions with respect to
the plan are final, binding and conclusive.
Stock Options. The Committee is authorized under the plan to grant options,
which may be incentive stock options or nonqualified stock options. All options
will be evidenced by a written option agreement between the Company and the
participant, which will include any provisions specified by the Committee
consistent with the terms of the plan. The terms of an incentive stock option
must meet the requirements of Code Section 422.
Prior to the proposed amendment, the exercise price of each option granted
under the plan is required to be 100% of the fair market value of the common
stock on the date of grant (or 110% in the case of certain incentive stock
options). The proposed amendment would permit the Committee to grant options
that have an exercise price of not less than 100% of the fair market value of
the common stock on the date of grant (or 110% in the case of certain incentive
stock options). In either case, the exercise price of an option granted under
the plan may not be changed after the date of grant (other than pursuant to the
anti-dilution provisions), and no stock option may be repriced by replacing,
regranting or cancelling the option.
Prior to the proposed amendment, the maximum number of shares of common stock
with respect to one or more options that may be granted during any calendar
year under the plan to any one person is 500,000. The proposed amendment would
increase that annual limit to 750,000 shares.
The term of a stock option granted under the plan may not exceed ten years from
the date of grant (or five years in the case of certain incentive stock
options). Stock options may expire earlier upon the termination of employment
of the optionee. Unless the Committee specifies otherwise, an optionee may
transfer a stock option only by will or by the laws of descent and distribution.
In the event of an optionee's termination of employment due to death,
disability or retirement, or in the event of a change of control (as defined in
the plan), any outstanding stock option will become exercisable immediately.
The Committee has the authority to accelerate the exercisability of any stock
option under other circumstances.
The Committee may grant one or more reload options to an optionee who exercises
an original option by tendering common stock in payment of the exercise price.
A reload option is granted at the time of exercise of the original option and
represents an additional stock option to acquire the same number of shares as
were tendered by the optionee to exercise the original stock option. A reload
option is subject to all of the same terms and conditions as the original stock
option, except that the exercise price for the reload option will be the fair
market value of the common stock as of the date of grant of such reload option,
and the reload option will vest six months after grant unless limited by
incentive stock option limitations.
Restricted Stock Awards. The Committee may issue restricted stock to eligible
employees in its sole discretion. An employee may not receive more than 50,000
shares of restricted stock in any one calendar year. The Committee will specify
in a restricted stock agreement the manner in which restricted stock will vest
and become nonforfeitable, as well as any conditions, restrictions and
contingencies to which the restricted stock may be subject. Such conditions,
restrictions and contingencies may
37
consist of a requirement of continuous service and/or the satisfaction of one
or more performance goals. The Committee may accelerate the vesting of any
restricted stock issued under the plan. Unless otherwise specified by the
Committee, all shares of restricted stock that remain subject to restriction
upon the recipient's termination of employment will be forfeited as of the date
of such termination of employment. In the event of a change of control of the
Company (as defined in the plan), all shares of restricted stock will become
vested and nonforfeitable. A recipient of restricted stock will have immediate
rights of ownership in the shares of restricted stock, including the right to
vote the shares and the right to receive dividends with respect to the shares.
Performance Units. The Committee may issue performance units to eligible
employees in its sole discretion. A performance unit is the right, subject to
such conditions, restrictions and contingencies as the Committee determines, to
receive one share of common stock in the future. When the Committee issues a
performance unit, it will establish a bookkeeping account for the recipient to
reflect the number of performance units issued to the recipient. The
recipient's performance unit account will be credited with performance units
and any dividend equivalents that may apply. Prior to the proposed amendment,
all performance units granted under the plan are automatically credited with
dividend equivalents, which are converted to additional performance units. The
proposed amendment would give the Committee discretion to grant performance
units without dividend equivalents.
The Committee will specify in a performance unit agreement the manner in which
performance units will vest and become nonforfeitable, as well as any
conditions, restrictions and contingencies to which the performance units may
be subject. Such conditions, restrictions and contingencies may consist of a
requirement of continuous service and/or the satisfaction of one or more
performance goals. Unless otherwise specified by the Committee, all performance
units will be forfeited as of the date of the optionee's termination of
employment for any reason. The Committee may accelerate the vesting of
performance units issued under the plan. In the event that performance units
vest, the participant will receive shares of common stock representing the
vested number of performance units standing in the participant's account. A
participant is not entitled to vote the performance units or the shares subject
to the performance units, and may not transfer performance units.
Prior to the proposed amendment, all performance units become vested and
nonforfeitable in the event of a change of control (as defined in the plan) and
will pay out on a prorated basis as if the target level of performance had been
achieved. Under the proposed amendment, the Committee may provide in the award
agreement that performance units will not become vested and nonforfeitable in
the event of a change of control or that they will pay out on a different basis.
Prior to the proposed amendment, the maximum number of shares of stock
represented by performance units that may be granted during any calendar year
under the plan to any one person is 50,000. The proposed amendment would
increase that annual limit to 400,000 shares.
Performance Goals. The Committee may determine that any award of restricted
stock or performance units will vest or become nonforfeitable on the basis of
the achievement of performance goals. In order for such awards to be fully
deductible without regard to the limitations of Code Section 162(m), such
performance goals must be objective and must be based upon one or more of the
following criteria: (i) earnings before interest expense, taxes, depreciation
and amortization ("EBITDA"); (ii) earnings before interest expense and taxes
("EBIT"); (iii) net earnings;
38
(iv) net income; (v) operating income; (vi) earnings per share; (vii) book
value per share; (viii) return on shareholders' equity; (ix) capital
expenditures; (x) expenses and expense ratio management; (xi) return on
investment; (xii) improvements in capital structure; (xiii) profitability of an
identifiable business unit or product; (xiv) maintenance or improvement of
profit margins; (xv) stock price; (xvi) market share; (xvii) revenues or sales;
(xviii) costs; (xix) cash flow; (xx) working capital; (xxi) return on assets;
(xxii) economic value added; and (xxiii) gross or net profit. The foregoing
criteria may relate to the Company, one or more of its subsidiaries, one or
more of its divisions or units or any combination of the foregoing, and may be
applied on an absolute basis or be relative to one or more peer group companies
or indices, or any combination thereof, all as the Committee determines. To the
degree consistent with Code Section162(m), the performance goals may be
calculated without regard to extraordinary items.
In order for such a performance-based award to be fully deductible without
regard to the limitations of Code Section 162(m), the Committee must establish
the performance goals no later than 90 days after the beginning of the period
for which such performance goal relates (or such later date as may be permitted
under applicable Code Section 162(m) tax regulations) and the Committee may for
any reason reduce (but not increase) any award, notwithstanding the achievement
of a specified goal. Any payment of an award granted with performance goals
will be conditioned on the written certification of the Committee in each case
that the performance goals and any other material conditions were satisfied.
Termination and Amendment. The plan is expected to remain in effect until
December 31, 2008, or as long as any awards are outstanding. The board,
however, may amend or terminate the plan at any time. If the board amends the
plan, the amendment will not adversely affect the rights of individuals who
have outstanding awards unless such individuals consent to the amendment. The
Committee may amend any award agreement under the plan if the amended agreement
is signed by the Company and the participant.
Adjustments. If the Company is involved in a corporate transaction or event
that affects our common stock (including any recapitalization,
reclassification, reverse or forward stock split, stock dividend, extraordinary
cash dividend, merger, consolidation, split-up, spin-off, combination or
exchange of shares), the Committee may make an appropriate and equitable
adjustment to the number and kind of shares that are issuable under the plan,
take action to adjust the number and kind of shares of stock subject to
outstanding awards, take action to adjust the exercise price of outstanding
stock options, and make any other equitable adjustments. Additionally, the
Committee may make certain equitable decisions regarding the securities to
which awards will pertain, the number of resulting awards and the vesting
and/or exercisability of the awards.
Certain Federal Income Tax Effects
The following discussion is a summary of the federal income tax provisions
relating to the grant and exercise of awards under the plan and the subsequent
sale of common stock acquired under the plan. The tax effect of exercising
awards may vary depending upon the particular circumstances, and the income tax
laws and regulations change frequently.
Nonqualified Stock Options. There will be no federal income tax consequences to
a participant or to the Company upon the grant of a nonqualified stock option.
When the participant exercises a nonqualified option, however, he or she will
recognize ordinary income in an amount equal to the excess of the fair market
value of the common stock received upon exercise of the option at the time of
exercise over the exercise price, and the Company will be allowed a
corresponding federal income tax deduction.
39
Any gain that a participant recognizes when he or she later sells or disposes
of the option shares will be short-term or long-term capital gain, depending on
how long the participant held the shares.
Incentive Stock Options. There typically will be no federal income tax
consequences to a participant or to the Company upon the grant or exercise of
an incentive stock option. If the participant holds the option shares for the
required holding period of at least two years after the date the option was
granted or one year after exercise of the option, the difference between the
exercise price and the amount realized upon sale or disposition of the option
shares will be long-term capital gain or loss, and the Company will not be
entitled to a federal income tax deduction. If the participant disposes of the
option shares in a sale, exchange, or other disqualifying disposition before
the required holding period ends, he or she will recognize taxable ordinary
income in an amount equal to the excess of the fair market value of the option
shares at the time of exercise over the exercise price, and the Company will be
allowed a corresponding federal income tax deduction. While the exercise of an
incentive stock option does not result in current taxable income, the excess of
the fair market value of the option shares at the time of exercise over the
exercise price will be an item of adjustment for purposes of determining the
participant's alternative minimum tax income.
Restricted Stock. Unless a participant makes an election to accelerate
recognition of the income to the date of grant as described below, the
participant will not recognize income, and the Company will not be allowed a
tax deduction, at the time a restricted stock award is granted. When the
restrictions lapse, the participant will recognize ordinary income equal to the
fair market value of the common stock as of that date (less any amount the
participant paid for the stock), and the Company will be allowed a
corresponding federal income tax deduction at that time, subject to any
applicable limitations under Code Section 162 (m).
If the participant files an election under Code Section 83(b) within 30 days
after the date of grant of the restricted stock, he or she will recognize
ordinary income as of the date of grant equal to the fair market value of the
stock as of that date (less any amount paid for the stock), and the Company
will be allowed a corresponding federal income tax deduction at that time,
subject to any applicable limitations under Code Section 162(m). Any future
appreciation in the stock will be taxable to the participant at capital gains
rates. However, if the stock is later forfeited, the participant will not be
able to recover the tax previously paid pursuant to the Code Section 83(b)
election.
Performance Units. A participant will not recognize income, and the Company
will not be allowed a tax deduction, at the time performance units are granted,
so long as the units are subject to a substantial risk of forfeiture. When the
participant receives or has the right to receive payment of shares under the
performance units, the fair market value of the shares of stock will be
ordinary income to the participant, and the Company will be allowed a
corresponding federal income tax deduction at that time, subject to any
applicable limitations under Code Section 162(m).
Benefits to Named Executive Officers and Others
During fiscal 2001, awards were granted under the plan to 123 persons,
including the following persons and groups. Any future awards will be made at
the discretion of the Committee. Therefore, it is not presently possible to
determine the benefits or amounts that will be received by such persons or
groups pursuant to the plan in the future. Because non-employee directors are
not eligible to participate in the plan, such directors will not be granted any
awards under the plan.
The closing price of AGL Resources' common stock on the New York Stock Exchange
on December 20, 2001 was $22.31 per share.
40
Long-Term Incentive Plan
Name and Position ----------------------------------------
Number
of Number
Dollar Options of Number of
Value Granted Restricted Performance
($)(1) (#)(2) Shares (#) Units (#)
------------------------------------------------------------------------------
Paula G. Rosput
President and CEO;
Chairman of Atlanta Gas Light Company $ 0 75,000 0 0
------------------------------------------------------------------------------
Richard J. Duszynski (3)
President and CEO of Sequent 0 0 0 0
------------------------------------------------------------------------------
Susan A. McLaughlin(3)
Executive Vice President and
Chief Operating Officer 159,760 0 8,000 0
------------------------------------------------------------------------------
Richard T. O'Brien (3)
Executive Vice President and
Chief Financial Officer 99,850 0 5,000 0
------------------------------------------------------------------------------
Paul R. Shlanta
Senior Vice President and
General Counsel 0 20,000 0 0
------------------------------------------------------------------------------
Donald P. Weinstein
Senior Vice President and
Chief Financial Officer
through April 30, 2001 0 20,000 0 0
------------------------------------------------------------------------------
All Executive Officers as a Group (3)
(including the above) (8 persons) 379,430 126,821 19,000 0
------------------------------------------------------------------------------
All Non-Executive Employees
as a Group (115 persons) 51,964 608,170 2,000 0
------------------------------------------------------------------------------
(1) The dollar value of the restricted shares equals the number of shares of
restricted stock multiplied by the fair market value of the shares at
September 30, 2001 of $19.97 per share. The dollar value of the options
represents the positive spread between the exercise price and the fair
market value of the Company's common stock at September 30, 2001. Certain
exercisable options held by the participants were not "in-the-money" at
September 30, 2001.
(2) Reflects options granted, including options subsequently forfeited, during
fiscal 2001.
(3) All options granted to Messrs. Duszynski and O'Brien and to Ms. McLaughlin
in fiscal 2001 were granted pursuant to the OIP. See "Summary
Compensation Table" and "Option Grants in Last Fiscal Year" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT TO
THE LONG-TERM INCENTIVE PLAN.
41
GENERAL INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and any person who owns more than 10% of the
Company's common stock to file initial reports of common stock ownership and
changes in ownership of such with the Securities and Exchange Commission and
the New York Stock Exchange. Such persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms that they file.
To the Company's knowledge, based solely on its review of the copies of such
reports received by the Company and written representations that no other
reports were required for those persons, during fiscal 2001, all filing
requirements were met, except that one director, Felker W. Ward, Jr.,
inadvertently filed late one Form 4 reporting the purchase in May 2001 of 5,000
shares of Company common stock by a trust of which he is the settlor.
Independent Auditors
The firm of Deloitte & Touche LLP, 191 Peachtree Street, Atlanta, Georgia
30303, is the independent auditor for the Company and examined the financial
statements of the Company for the fiscal year ended September 30, 2001. The
board of directors intends to continue the services of that firm for the
transition quarter ending December 31, 2001 and for our new fiscal year, which
will end on December 31, 2002 rather than September 30, 2002.A representative
of the firm will attend the annual meeting and will be available to answer
appropriate questions.
Audit Fees, Financial Information Systems Design and Implementation Fees, and
All Other Fees.
During fiscal 2001, Deloitte & Touche LLP billed the Company fees in the
aggregate amount of approximately $ 1,908,579. Of this amount, approximately
$444,500 was fees for the fiscal 2001 audit and reviews of the financial
statements included in the three Form 10-Q reports that we filed with the SEC
in fiscal 2001.
Deloitte & Touche did not provide any professional services to us for financial
information systems design and implementation in fiscal 2001.
The aggregate fees that Deloitte & Touche billed us for all other services that
it rendered to us for fiscal 2001 were $1,464,079. These fees were for
non-audit services that auditors traditionally provide, including audits of
employee benefit plans, income tax consulting services and risk management
consulting services. The Audit Committee has considered whether the provision
of the non-audit related services covered by this paragraph is compatible with
maintaining Deloitte & Touche's independence.
2001 Annual Report
A copy of our 2001 annual report is enclosed. The annual report, which contains
financial and other information about the Company, is not incorporated in this
proxy statement and is not a part of the proxy soliciting material.
42
Revocable Proxy COMMON STOCK
AGL RESOURCES INC.
817 W. Peachtree Street, N.W., Atlanta, Georgia 30308
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 2002
ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints Melanie McGee Platt, Paula G. Rosput, and Paul
R. Shlanta, and each of them, proxies, with full power of substitution, to act
for and in the name of the undersigned to vote all shares of Common Stock of AGL
Resources Inc. (the "Company") that the undersigned is entitled to vote at the
2002 Annual Meeting of Shareholders of the Company, to be held at Atlanta
History Center, 130 West Paces Ferry Road, N.W., Atlanta, Georgia, on Friday,
February 1, 2002, at 10:00 a.m., local time, and at any and all adjournments
thereof, as set forth on the reverse side.
Receipt of the Notice of the Annual Meeting, the accompanying Proxy Statement,
and the 2001 Annual Report to Shareholders hereby is acknowledged.
-------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTPAID ENVELOPE.
-------------------------------------------------------------------------------
Please mark, date, and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian, or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer or
partner.
HAS YOUR ADDRESS CHANGED? IF SO, DO YOU HAVE ANY COMMENTS? IF SO,
PRINT NEW ADDRESS BELOW: INCLUDE BELOW:
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
DETACH CARD DETACH CARD
AGL RESOURCES INC.
817 W. Peachtree Street, N.W.
Atlanta, Georgia 30308
Dear Shareholder:
Your vote is important, and you are strongly encouraged to exercise your right
to vote your shares.
1. Vote by Mail - complete, sign, date and return the proxy card in the enclosed
postage-paid envelope;
2. Vote by Telephone - use the toll-free number and follow the instructions on
the back of this page; or
3. Vote by Internet - use the website and follow the instructions on the back
of this page.
On behalf of the Board of Directors, we urge you to vote in one of these three
ways, as soon as possible, even if you currently plan to attend the Annual
Meeting.
Please note that this year we will require shareholders to present the enclosed
ticket for admission to the Annual Meeting.
Thank you in advance for your prompt response.
Sincerely,
AGL Resources Inc.
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
-------------------------------------------------------------------------------
AGL RESOURCES INC.
-------------------------------------------------------------------------------
COMMON STOCK
Mark box at right if you plan to attend the Annual Meeting. |_|
Mark box at right if comments or an address change has been noted on the reverse
side of this card. |_|
CONTROL NUMBER:
Please be sure to sign and date this proxy card, IF you are voting by proxy.
Date
Shareholder sign here Co-owner sign here
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW-LISTED PROPOSALS.
1. Elect as directors the five nominees listed below:
Robert S. Jepson, Jr. For With- For All
Arthur E. Johnson All hold Except*
Karen R. Osar All
Paula G. Rosput
James A. Rubright |_| |_| |_|
* INSTRUCTION: To withhold authority to vote for an individual nominee, mark the
"For All Except" box and strike a line through that nominee's name from the list
above.
For Against Abstain
2. Adopt the AGL Resources |_| |_| |_|
Inc. Executive Performance
Incentive Plan
3. Amend the AGL Resources Inc. |_| |_| |_|
Long-Term Incentive Plan (1999)
When properly executed, this proxy card will be voted as directed. If no
instructions are specified, this proxy card will be voted "FOR" each of the
proposals listed on this proxy card.
In their discretion, the proxies are authorized to vote upon such other business
as properly may come before the Annual Meeting and any and all adjournments
thereof.
If any other business is presented at the Annual Meeting, this proxy card will
be voted by the proxies in their best judgment. At the present time, the Board
of Directors knows of no other business to be presented at the Annual Meeting.
DETACH CARD DETACH CARD
--------------------------------------------------------------
Vote by Telephone
--------------------------------------------------------------
It's fast, convenient and immediate!
Call toll-free on a touch-tone phone.
Follow these four easy steps:
4. Read the accompanying Proxy Statement and this proxy
card.
5. Call the toll-free number 1-877-PRX-VOTE
(1-877-779-8683). For shareholders residing outside the
United States, call collect on a touch-tone
phone 1-201-536-8073. There is NO CHARGE for this call.
6. Enter your Control Number located on your proxy card
(see above).
7. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE
---------------------------------------------------------------
Vote by Internet
---------------------------------------------------------------
It's fast, convenient and your vote is immediately confirmed
and posted.
Follow these four easy steps:
8. Read the accompanying Proxy Statement and this proxy
card.
9. Go to the website http://www.eproxyvote.com/atg
10. Enter your Control Number located on your proxy card
(see above).
11. Follow the instructions provided.
Your vote is important!
Go to http://www.eproxyvote.com/atg
Do not return your proxy card if you are voting by telephone or Internet.
Revocable Proxy RETIREMENT SAVINGS PLUS PLAN
AGL RESOURCES INC.
817 W. Peachtree Street, N.W., Atlanta, Georgia 30308
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 2002
ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints AMVESCAP National Trust Company, which acts as
Trustee for the AGL Resources Inc. Retirement Savings Plus Plan (the "RSP
Plan"), as proxy, to act for and in the name of the undersigned, to vote all
shares of Common Stock of AGL Resources Inc. (the "Company") that have been
allocated to the account of the undersigned under the RSP Plan, at the 2002
Annual Meeting of Shareholders of the Company, to be held at the Atlanta History
Center, 130 West Paces Ferry Road, N.W., Atlanta, Georgia, on Friday, February
1, 2002, at 10:00 a.m., local time, and at any and all adjournments thereof, as
set forth on the reverse side.
Under the terms of the RSP Plan, only the Trustee of the plan can vote the
shares allocated to the accounts of the participants, even if such participants
or their beneficiaries attend the Annual Meeting in person.
Receipt of the Notice of the Annual Meeting, the accompanying Proxy Statement,
and the 2001 Annual Report to Shareholders hereby is acknowledged.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTPAID ENVELOPE.
--------------------------------------------------------------------------------
Please mark, date, and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer or
partner.
HAS YOUR ADDRESS CHANGED? IF SO, DO YOU HAVE ANY COMMENTS? IF SO,
PRINT NEW ADDRESS BELOW: INCLUDE BELOW:
--------------------------------- -----------------------------------
--------------------------------- -----------------------------------
--------------------------------- -----------------------------------
DETACH CARD DETACH CARD
AGL RESOURCES INC.
817 W. Peachtree Street, N.W.
Atlanta, Georgia 30308
Dear Shareholder:
Your vote is important, and you are strongly encouraged to exercise your right
to vote your shares.
1. Vote by Mail - complete, sign, date and return the proxy card in the enclosed
postage-paid envelope;
2. Vote by Telephone - use the toll-free number and follow the instructions on
the back of this page; or
3. Vote by Internet - use the website and follow the instructions on the back
of this page.
On behalf of the Board of Directors, we urge you to vote in one of these three
ways as soon as possible, even if you currently plan to attend the Annual
Meeting.
Please note that this year we will require shareholders to present the enclosed
ticket for admission to the Annual Meeting.
Thank you in advance for your prompt response.
Sincerely,
AGL Resources Inc.
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
--------------------------------------------------------------------------------
AGL RESOURCES INC.
--------------------------------------------------------------------------------
RSP PLAN
Mark box at right if you plan to attend the Annual Meeting. |_|
Mark box at right if comments or an address change has been noted on the reverse
side of this card. |_|
CONTROL NUMBER:
Please be sure to sign and date this proxy card if you are voting by proxy.
Date
Shareholder sign here Co-owner sign here
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW-LISTED PROPOSALS.
1. Elect as directors the five nominees listed below:
Robert S. Jepson, Jr. For With- For All
Arthur E. Johnson All hold Except*
Karen R. Osar All
Paula G. Rosput
James A. Rubright |_| |_| |_|
* INSTRUCTION: To withhold authority to vote for an individual nominee,
mark the "For All Except" box and strike a line through that nominee's name
from the list above.
For Against Abstain
2. Adopt the AGL Resources |_| |_| |_|
Inc. Executive Performance
Incentive Plan
3. Amend the AGL Resources Inc. |_| |_| |_|
Long-Term Incentive Plan
(1999)
When properly executed, this proxy card will be voted as directed. If no proxy
card is received or a proxy card is received without instructions for voting,
the proxy will vote the RSP Plan shares according to the instructions of the
Administrative Committee of the plan "FOR" each of the proposals listed on this
proxy card.
In its discretion, the proxy is authorized to vote upon such other business as
properly may come before the Annual Meeting and any and all adjournments
thereof. If any other business is presented at the Annual Meeting, this proxy
card will be voted by the proxy in its best judgment. At the present time, the
Board of Directors knows of no other business to be presented at the Annual
Meeting. If you also own shares otherwise than under the RSP Plan, you may vote
such other shares by proxy by following the instructions on the proxy card for
such other shares.
DETACH CARD DETACH CARD
--------------------------------------------------------------
Vote by Telephone
--------------------------------------------------------------
It's fast, convenient and immediate!
Call toll-free on a touch-tone phone.
Follow these four easy steps:
4. Read the accompanying Proxy Statement and this proxy
card.
5. Call the toll-free number 1-877-PRX-VOTE
(1-877-779-8683). For shareholders residing outside the
United States, call collect on a touch-tone phone
1-201-536-8073. There is NO CHARGE for this call.
6. Enter your Control Number located on your proxy card
(see above).
7. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE
---------------------------------------------------------------
Vote by Internet
---------------------------------------------------------------
It's fast, convenient and your vote is immediately confirmed
and posted.
Follow these four easy steps:
8. Read the accompanying Proxy Statement and this proxy
card.
9. Go to the website http://www.eproxyvote.com/atg
10. Enter your Control Number located on your proxy card
(see above).
11. Follow the instructions provided.
Your vote is important!
Go to http://www.eproxyvote.com/atg
Do not return your proxy card if you are voting by telephone or Internet.