AGL RESOURCES INC.
2003 Committee Charter : ATG
The Compensation Committee (the "Committee") of AGL Resources Inc., a Georgia corporation (the
"Company"), is a committee of the Board of Directors of the Company, the composition and
responsibilities of which are described in this Compensation Committee Charter ("Charter").
The Compensation Committee shall assist the Board in fulfilling its responsibility to achieve the
Company's purposes of maximizing the long-term total return to shareholders by ensuring that officers,
directors and employees are compensated in accordance with the Company's compensation
philosophy, objectives and compensation policies. In performing this function, it shall be the objective
of the Committee to: (i) encourage the achievement of the Company's long-range objectives by
providing compensation which directly relates to the performance of the individual and the achievement
of internal strategic objectives; (ii) establish compensation policies and guidelines that will attract and
retain qualified personnel through an overall level of compensation opportunity, at a reasonable cost,
that is competitive within the Company's industry; and (iii) promote a direct relationship between
compensation and the Company's performance by facilitating executive officer stock ownership through
long-term incentive awards, including awards of stock options and restricted stock. The Committee
shall produce an annual report on executive compensation for inclusion in the Company's proxy
statement for the annual meeting of shareholders, in accordance with applicable rules and regulations.
The Committee may be assisted with its functions from time to time by various members of the
Company's staff and shall consult with the Company's Chief Executive Officer and other members of
senior management as necessary. The Compensation Committee may retain and have direct access to
outside consultants to assist it in determining and establishing compensation policies and may authorize
independent studies of corporate compensation and benefits of comparable companies.
In accordance with Article III of the Bylaws of the Company, the Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate a Compensation Committee.
The Committee shall consist of no less than three (3) and no more than five (5) Directors. The
Committee shall be composed entirely of independent, non-employee Directors of the Company, in
accordance with applicable rules and regulations who are free of any relationship that would interfere
with their exercise of independent judgment as Committee members.
The members of the Committee shall serve at the pleasure of the Board of Directors or until their
successors shall be duly designated. Vacancies in the Committee shall be filled by the Board of
The Compensation Committee shall:
Evaluations and Succession Planning
· Perform an annual performance evaluation of the Committee.
· Oversee an annual evaluation of the Chief Executive Officer, which shall be communicated to the
Chief Executive Officer by the Lead Director of the Board of Directors or, in the absence of a Lead
Director, by the Chairman of the Executive Committee of the Board of Directors. Such evaluation
should be based on objective criteria including attainment of established goals and objectives,
performance of the business, accomplishment of long-term strategic objectives, development of
management, etc. Input should be solicited from any relevant parties including, for example,
executives of the Company, material investor groups, business partners, and the like.
· Use such annual evaluation of the Chief Executive Officer in the course of the Committee's
deliberations when considering the compensation of the Chief Executive Officer.
· Review management succession and executive development plans. If succession or development
responsibility is delegated to another Board committee, coordinate closely with that committee.
· Keep available on a continuing basis, the Chief Executive Officer's recommendation as to
successor(s) should he or she become disabled.
· Provide developmental feedback, when appropriate, to the Chief Executive Officer of the
· Periodically review and recommend to the Board retainer fees, meeting fees or any other
compensation (including stock based compensation) to be paid to non-employee directors. Given
the inherent conflict of directors setting their own pay levels, these recommendations should be
developed with the assistance of outside consultants.
· Annually review and approve goals with respect to compensation for the Chief Executive Officer
and the other executive officers.
· Annually review and approve a compensation philosophy/policy with respect to executive officer
compensation and set the compensation of the Chief Executive Officer and the other executive
officers. In determining the long-term incentive component of the Chief Executive Officer's
compensation, the Committee shall consider, among other things, the Company's performance and
relative shareholder return, the value of similar incentive awards to Chief Executive Officers at
comparable companies, and the awards given to the Company's Chief Executive Officer in past
· Annually establish short- and long-term performance objectives under the Company's short- and
long-term incentive compensation plans and determine the attainment of such performance
· Determine, from time to time, the advisability of retaining a compensation consultant or consultants
to assist in the evaluation of non-employee director, Chief Executive Officer or other executive
officer compensation, with the authority to retain and terminate such compensation consultants,
including sole authority to approve the consultants' fees and other retention terms.
· Prepare an annual report for the Company's proxy statement regarding executive compensation, as
required by the rules of the Securities and Exchange Commission or relevant stock exchanges.
Employee Benefit Plans
· Review material proposed changes to employee benefit plans, including the retirement plans of the
Company, and recommend plan changes to the Board of Directors, as appropriate.
· Periodically review and provide oversight of all of the Company's incentive and equity-based
compensation and benefit plans to confirm that such plans remain equitable and competitive and are
consistent with compensation policy.
· Administer the Company's long-term incentive plans and periodically recommend to the Board of
Directors (i) those executive officer employees to whom stock based awards are to be granted and
the number of shares subject to and terms of each such grant; and (ii) the number of shares to be
subject to grants made by the Chief Executive Officer to non-executive officer employees under a
delegation of authority from the Board of Directors, together with any other guidelines deemed
appropriate by the Committee in connection with such grants.
· Review and comment on the Company's strategic and financial plans to determine their relationship
to the compensation program.
· Coordinate between the Committee and other Board committees, as appropriate and necessary.
· Ensure the total compensation program and practices of the Company are designed with full
consideration of all tax, accounting, legal and regulatory requirements and are of the highest quality.
· Keep abreast of current developments in executive compensation and employee compensation
practices outside the Company.
The Committee shall keep written minutes of each meeting, which shall set forth the Committee's actions
as required by the Committee Charter, and shall be duly filed in the Company's records. Reports of
meetings of the Committee shall be made to the Board of Directors at its next regularly scheduled
meeting, following the Committee meeting, accompanied by any recommendations to the Board of
Directors approved by the Committee.