AGL RESOURCES INC.
COMPENSATION COMMITTEE CHARTER
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 by establishing policies by which officers, directors and key employees are to be compensated. In performing this function, it shall be the objective of the Committee to: (i) align management’s interest with those of our shareholders by creating a strong focus on stock ownership through long-term incentive awards; (ii) base pay on performance measures that drive shareholder value; (iii) promote a direct relationship between compensation and the Company’s performance by placing a significant portion of compensation “at risk” based on Company, business unit and/or individual performance; (iv) establish compensation policies and guidelines that are designed to attract and retain qualified personnel through an overall level of compensation opportunity, at a reasonable cost, that is competitive within the relevant talent pool in which the Company competes for officers, directors and key employees; (v) encourage the achievement of the Company’s long-range objectives by providing compensation that appropriately rewards performance and the achievement of internal strategic objectives; and (vi) encourage and oversee the process of management succession planning.
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 and appoint a Chairman, thereof. The Committee shall consist of four (4) or more Directors. The Committee shall be composed entirely of independent directors, each of whom is determined by the Board of Directors to (i) be independent under the rules of the New York Stock Exchange and under any applicable independence standards adopted by the Board of Directors, (ii) qualify as a “Non-employee Director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (iii) qualify as an “Outside Director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended.
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 Directors.
The Compensation Committee shall be responsible for:
- 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 Chairman of the Board (or the Lead Director if the Chief Executive Officer is also the Chairman of the Board) and/or by the Chairman of the Committee. Such evaluation should include objective criteria such as attainment of established goals and objectives, performance of the business, accomplishment of long-term strategic objectives and development of management. The Committee also may consider such other criteria, and solicit input from such other parties, as it deems relevant.
- 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.
B. Director Compensation
- Annually review and approve (or recommend to the independent directors of the Board for their approval, as the Committee deems appropriate), changes to retainer fees, meeting fees or any other compensation (including stock based compensation) to be paid to non-employee directors.
C. Executive Compensation
- Annually review and approve a compensation philosophy/policy and overall corporate goals and objectives with respect to the Chief Executive officer and the other executive officers.
- Annually review and recommend to the independent directors of the Board for their approval, the Chief Executive Officer’s compensation, including salary and short- and long-term incentives.
- Annually review and approve for each of the Company’s executive officers, other than the Chief Executive Officer, compensation, including salary and short- and long-term incentives.
- As required, from time to time: (i) review, approve, amend and/or terminate employment and severance arrangements for executive officers and other key employees; (ii) review and approve the material terms of employment offers for executive officers and other key employees; and (iii) adopt and amend stock ownership and retention guidelines.
- To the extent short- and/or long-term incentive compensation plans are used to compensate executives in a given year, establish short- and long-term performance objectives under the Company’s short- and long-term incentive compensation plans and certify the attainment of such performance objectives, including for purposes of Section 162(m) of the Internal Revenue Code.
- Approve an annual committee report for the Company’s proxy statement, as required by the rules of the Securities and Exchange Commission (the “SEC”) and relevant stock exchanges. Review and discuss with management the Company’s Compensation Discussion & Analysis (the “CD&A”) for the Company’s proxy statement, as required by the rules of the SEC, and, based on that review and discussion, determine whether the Committee recommends to the Board of Directors that the CD&A be included in the Company’s proxy statement and annual report on Form 10-K.
D. Employee Plans
- Review significant changes proposed by management to employee benefit plans, and to the extent such plans are subject to Board approval, make recommendations to the Board regarding such plans.
- Periodically review and provide oversight of those incentive and equity-based compensation and benefit plans that are applicable to Company management and to the extent such plans are subject to Board approval, make recommendations to the Board regarding such plans.
- Oversee the operation of the Company’s equity plans, including the consideration and determination of those executive officer employees and other key employees to whom stock based awards are to be granted and the number of shares subject to such grant and terms of each such grant.
- Review with management compliance of the Company’s compensation programs and practices with tax, accounting, legal and regulatory requirements.
- Review and discuss with management the wording of the proxy statement discussion and resolutions for say on pay advisory votes by shareholders on executive compensation, and review, evaluate and discuss with management the results of the advisory vote.
- Review with management management’s assessments, actions, processes and procedures with respect to certain risks related to employee compensation policies and practices, as identified from time to time by the Committee or by the Audit Committee.
- Review and discuss with management management’s actions, processes and procedures with respect to management succession planning, focusing, in particular, on succession planning with respect to the position of Chief Executive Officer, and make recommendations to the Board regarding management succession planning.
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, including a report of all actions taken, 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.
IV.Organization and Operation
- There shall be no less than two meetings per year and additional meetings may be called by the Chair of the Committee. Meetings may be held by teleconference or videoconference; a majority of Committee members is required for a quorum; the Committee may act by unanimous written consent.
- The Committee may be assisted in its operations by Company employees; Committee will consult from time to time with Chief Executive Officer and other senior officers.
- The Committee may delegate its authority granted herewith, to the extent permitted under applicable law and the applicable rules of the NYSE, to (i) a subcommittee of the Committee, (ii) management or (iii) any director or executive officer.
- The Committee shall in its sole discretion be responsible for the appointment, compensation and oversight of the work of any compensation consultants, legal counsel and other advisors as it deems appropriate and to determine the terms, costs and fees for the retention; the selection of advisors shall be made in accordance with the applicable NYSE listing rules and applicable law. The Committee shall annually review the performance of such outside consultants. The fees of any advisor retained by the Committee shall be paid solely by the Company.
The Committee may select a compensation consultant, legal counsel or other advisor to the Committee only after taking into consideration all factors relevant to that person’s independence from management, including the following:
- The provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other advisor;
- The amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other advisor, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other advisor;
- The policies and procedures of the person that employs the compensation consultant, legal counsel or other advisor that are designed to prevent conflicts of interest;
- Any business or personal relationship of the compensation consultant, legal counsel or other advisor with a member of the Committee;
- Any stock of the Company owned by the compensation consultant, legal counsel or other advisor; and
- Any business or personal relationship of the compensation consultant, legal counsel, other advisor or the person employing the advisor with an executive officer of the Company.
|Sandra N. Bane|
|Thomas D. Bell |
|Norman R. Bobins|
|Charles R. Crisp|
|Armando J. Olivera|
|James A. Rubright|
|Bettina M. Whyte |
|Henry C. Wolf |