form_8-k.htm
|
UNITED
STATES
|
|
SECURITIES
AND EXCHANGE COMMISSION
|
|
Washington,
D.C. 20549
|
|
|
|
|
|
FORM
8-K/A
|
|
|
|
|
|
CURRENT
REPORT
|
|
|
|
|
|
PURSUANT
TO SECTION 13 OR 15(d) OF
|
|
THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
|
|
|
|
Date
of Report (Date of earliest event reported): February 3,
2009
|
|
|
|
|
|
|
|
|
|
AGL
RESOURCES INC.
|
|
(Exact
name of registrant as specified in its charter)
|
|
|
|
|
|
Georgia
|
1-14174
|
58-2210952
|
|
(State
or other jurisdiction of incorporation)
|
(Commission File No.)
|
(I.R.S.
Employer Identification No.)
|
|
|
|
|
|
|
|
|
|
Ten
Peachtree Place NE, Atlanta, Georgia 30309
|
|
(Address
and zip code of principal executive offices)
|
|
|
|
|
|
|
|
|
|
404-584-4000
|
|
(Registrant's
telephone number, including area code)
|
|
|
|
|
|
|
|
|
|
Not
Applicable
|
|
(Former
name or former address, if changed since last report)
|
|
|
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
|
|
|
|
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
|
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
|
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
|
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
General
Each
year, the Compensation and Management Development Committee (“C&MD
Committee”) of the Board of Directors of AGL Resources Inc. (“AGL Resources” or
the “Company”) sets base salary, sets target levels for annual incentive pay and
makes long-term incentive grants for AGL Resources’ executive
officers. For benchmarking executive compensation practices and
levels, the C&MD Committee reviews data provided by the C&MD Committee’s
independent consultant for companies in the following two groups: AGL Resources’
proxy peer group of natural gas service providers (“Proxy Peers”); and a larger
group of energy service industry companies (“Industry Peers”).
This
report contains disclosure about the 2009 compensation for AGL Resources’
chairman, president and chief executive officer along with the executive
officers named in our proxy statement for the 2008 annual meeting of
shareholders, other than Kevin P. Madden, our executive vice president, external
affairs, whose retirement is effective March 1, 2009. Mr. Madden’s
compensation is not being changed. These other four officers are
hereinafter referred to as the “named executive officers.” At its
February 3, 2009 meeting, the C&MD Committee reviewed and set base salaries
for executive officers for 2009 and granted nonqualified stock options to the
named executive officers, as well as other officers and key
employees. At its February 13, 2009 meeting, the C&MD Committee
established performance measures under our annual incentive plans and granted
other long-term incentive awards.
Base
Salary
In
reviewing base salaries, the C&MD Committee considered pay for comparable
positions reported in the Proxy Peer and Industry Peer data described above,
tenure in position, scope of responsibilities, performance, retention and other
considerations. The base salary for John W. Somerhalder, the chairman, president
and chief executive officer was increased from $800,000 to $825,000; the base
salary for Andrew W. Evans, the executive vice president and chief financial
officer was increased from $445,000 to $460,000; the base salary for Douglas N.
Schantz, president, Sequent Energy Management, LP, was increased from $320,000
to $335,000; and the base salary for Paul R. Shlanta, executive vice president,
general counsel and chief ethics and compliance officer, was increased from
$365,000 to $380,000. The base salaries for these four named
executive officers were approved by the C&MD Committee but are not otherwise
set forth in a written agreement between AGL Resources and the
executives.
2007
Omnibus Performance Incentive Plan and Annual Incentive Plan
For 2009,
AGL Resources’ annual incentive compensation program for the named executive
officers consists of the 2007 Omnibus Performance Incentive Plan (“OPIP”)
and the Annual Incentive Plan (“AIP”). The terms of the OPIP are set
forth in Annex A to the proxy statement for the Company’s 2007 annual meeting of
shareholders that was filed with the Securities and Exchange Commission on March
19, 2007, and the description of the OPIP was included in the section of the
proxy statement entitled, “Proposal 2—Approval of the 2007 Omnibus Performance
Incentive Plan.” The terms of the AIP were previously filed as
exhibit 10.1 to the Company’s current report on Form 8-K dated August 6,
2007. For 2009, the annual incentive compensation program for the
named executive officers gives weight to corporate, business unit and individual
performance.
How the OPIP and AIP
work. Under the OPIP, the C&MD Committee establishes an
objective performance measure from among a list of eligible measures set forth
in the plan, and the performance measure must be met or exceeded in order for
the named executive officers to receive a payout. The C&MD Committee reviews
the actual performance at the end of each year, compares it with the
predetermined goals, and certifies the results under the plan. In
order to attempt to maximize the federal income tax deductibility
of awards made to the named executive officers, the corporate
performance portion of the covered named executive officers’ annual incentive
awards is covered under the shareholder-approved OPIP. In addition,
to the extent possible, business unit performance measures may also be covered
under the OPIP where they correspond with performance measures set forth in that
plan. In cases where business unit performance measures do not correspond with
performance measures under the OPIP, associated awards will be granted under the
AIP. The individual performance portion of the named executive
officers’ annual incentive awards is not eligible for the exemption from the
federal income tax deductibility limit under Section 162(m) of the Internal
Revenue Code of 1986, as amended and are granted under the AIP.
Under the
applicable annual incentive compensation program, each participant has a target
annual incentive compensation opportunity, expressed as a percentage of earned
base salary during the fiscal year. On February 13, 2009, the
C&MD Committee approved target annual incentive compensation opportunities
for 2009, expressed as a percentage of 2009 annual base salary, for each of AGL
Resources’ named executive officers. For 2009, the incentive target
level for Mr. Somerhalder will increase from 100% of annual base salary to 110%,
for Mr. Evans from 60% to 65%, and for Mr. Shlanta from 50% to
55%. The annual incentive compensation arrangement for Mr. Schantz
has yet to be determined by the Committee. Once it is determined, the
Company will disclose Mr. Schantz’s arrangement by amendment to this report on
Form 8-K.
On
February 13, 2009, the C&MD Committee established the corporate EPS goals,
hereinafter referred to as “Plan EPS” goals for the 2009 performance measurement
period. The Plan EPS goals under the AIP and the OPIP for 2009
are:
|
Plan
Earnings Per
Share
Goal*
|
|
Corporate
Performance
Score
|
|
$2.65
|
** |
0%
|
|
$2.70
|
|
50%
|
|
$2.75
|
|
100%
|
|
$2.85
|
|
150%
|
|
$2.95
|
|
200%
|
*Plan EPS
is based on net income determined in accordance with accounting principles
generally
accepted in the United States of America (“GAAP”), adjusted to reflect the
effect
of
economic value created in a plan year by the Company’s wholesale services and
retail
services
business units, but not yet reflected in GAAP earnings reported for that
year.
The
purpose of this adjustment is to ensure that (i) economic value created in a
previous
plan year
is included in the Plan EPS goal for the current plan year, and (ii) economic
value
created
above or below the amount expected to be created by management in the current
plan
year is
considered by the C&MD Committee when determining whether the Plan EPS goal
is met.
**The
Company’s actual Plan EPS must surpass the Plan EPS goal of $2.65 for the year
ending
December
31, 2009 in order for payments based on corporate performance to be
made.
Payouts
for the portion of total performance based on individual performance may be made
if actual
Plan EPS is less than $2.65, subject to C&MD Committee
approval. Payouts will be
calculated
using a straight-line interpolation should actual Plan EPS fall between the Plan
EPS goals listed above.
The Plan
EPS goals are established by the C&MD Committee solely for the purposes of
performance measurement under the annual incentive compensation program and
should not be considered an update to, and should not be compared to, previously
provided earnings guidance.
Long-Term
Incentive Grants
AGL
Resources’ current long-term incentive compensation program for the named
executive officers as well as other officers and key employees is provided under
the OPIP
On
February 3, 2009, the C&MD Committee approved nonqualified stock option
grants, under the OPIP, to certain of our executive officers, other officers and
key employees, including the following named executive officers:
STOCK
OPTIONS
|
Name
|
|
Number
of Nonqualified
Stock Options Awarded
|
|
|
|
|
|
|
|
John
W. Somerhalder
|
|
|
66,800 |
|
|
|
|
|
|
|
|
Andrew
W. Evans
|
|
|
23,780 |
|
|
|
|
|
|
|
|
Douglas
N. Schantz
|
|
|
9,160 |
|
|
|
|
|
|
|
|
Paul
R. Shlanta
|
|
|
11,840 |
|
A form of
nonqualified stock option agreement was previously filed as Exhibit 10.1.c to
the Company’s Quarterly Report on Form 10-Q filed August 2, 2007.
The stock
options are exercisable at a price of $31.09 per share and vest in accordance
with the schedule set forth in the nonqualified stock option
agreement. Subject to earlier termination as described in the OPIP,
the stock options expire ten years from the date of grant. Upon a
change of control of the Company, unless the options are assumed or substituted
for by the surviving entity, all unvested options will become vested and
exercisable. In the event of an optionee’s death, disability or
retirement, any unvested option will vest and become exercisable as to that
number of shares originally scheduled to vest within 12 months of the date of
termination. In the event of the optionee’s termination of employment
for any reason other than death, disability or retirement, any portion of the
option that was not exercisable immediately before the termination of employment
will be forfeited.
On
February 13, 2009, the C&MD Committee approved restricted stock unit awards
to certain of our executive officers, other officers and key employees,
including the following named executive officers:
RESTRICTED
STOCK UNITS
|
Name
|
Performance
Measurement Period
|
|
Number
of Restricted
Stock Units Awarded
|
|
|
|
|
|
|
|
|
John
W. Somerhalder
|
1
year
|
|
|
27,730 |
|
|
|
|
|
|
|
|
|
Andrew
W. Evans
|
1
year
|
|
|
9,870 |
|
|
|
|
|
|
|
|
|
Douglas
N. Schantz
|
1
year
|
|
|
3,800 |
|
|
|
|
|
|
|
|
|
Paul
R. Shlanta
|
1
year
|
|
|
4,920 |
|
The
restricted stock unit awards were made under the OPIP. A form of the
restricted stock unit agreement was previously filed as Exhibit 10.1.e to the
Company’s Quarterly Report on Form 10-Q filed August 2, 2007. The
performance measure for these awards is based on Plan EPS, as described
above.
If the
performance measure for the restricted stock units is met or exceeded, the
restricted stock units will be converted to an equal number of shares of Company
common stock and will vest in accordance with the schedule set forth in the
restricted stock unit agreement. If the performance measure set forth
in the agreement is not attained, the restricted stock units will be
forfeited. Upon a change in control of the Company, unless the
restricted stock units are assumed or substituted for by the surviving entity,
(i) the restricted stock units will convert to an equal number of shares of
Company common stock and become 100% vested and nonforfeitable; and (ii) any
outstanding unvested shares of restricted stock will become 100% vested and
nonforfeitable. Unless the C&MD Committee, which administers the
OPIP, decides otherwise, if the recipient’s employment is terminated for any
reason, all restricted stock units or shares of restricted stock will be
forfeited.
PERFORMANCE
CASH AWARDS
On
February 13, 2009, the C&MD Committee also approved performance cash awards
to certain of our executive officers, other officers and key employees,
including the following named executive officers:
|
Name
|
Performance
Measurement Period
|
|
Target
Payout
|
|
|
|
|
|
|
|
|
John
W. Somerhalder
|
3
years
|
|
$ |
700,000 |
|
|
|
|
|
|
|
|
|
Andrew
W. Evans
|
3
years
|
|
$ |
249,200 |
|
|
|
|
|
|
|
|
|
Douglas
N. Schantz
|
3
years
|
|
$ |
96,000
|
|
|
|
|
|
|
|
|
|
Paul
R. Shlanta
|
3
years
|
|
$ |
124,100 |
|
The
performance cash awards were made under the OPIP. The performance
cash awards are payable in cash, based upon the attainment of the performance
measure set forth in the award agreement, which relates to the Company’s
compounded annual growth rate in Plan EPS (the “Performance
Measure”). As set forth in the award agreements, the formula used to
calculate award payments is as follows: Target Performance Cash divided by
Target Performance Measure, multiplied by the actual performance
measure. The award agreements also set forth a minimum Performance
Measure percentage below which no award payments will be made and a maximum
Performance Measure percentage at which award payments will be
capped. Upon a change in control of the Company, unless the
performance cash units are assumed or substituted for by the surviving entity,
performance cash awards will become vested and nonforfeitable (i) if during the
first half of the performance period, at the target payout level; and (ii) if
during the second half of the performance period, based on the actual level of
achievement, and in any case, as prorated on a daily-basis, based on the
completed portion of the performance measurement period as of the date of the
change in control. Unless the C&MD Committee, which administers
the OPIP, decides otherwise, if the recipient’s employment is terminated for any
reason, all performance cash units will be forfeited. A form of the
performance cash award agreement was previously filed as Exhibit 10.1.d to the
Company’s Quarterly Report on Form 10-Q filed August 2, 2007.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
AGL
RESOURCES INC.
|
|
|
(Registrant)
|
|
Date: February
19, 2009
|
/s/
Paul R. Shlanta
|
|
|
Paul
R. Shlanta
Executive
Vice President, General Counsel
and
Chief Ethics and Compliance
Officer
|