Form of Performance Cash Unit


     

    
      

      

    

     

    EXHIBIT
      10.3

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    PERFORMANCE UNIT
      AWARD NO. __________

     

    AGL
      RESOURCES INC.

     

    LONG-TERM
      INCENTIVE PLAN (1999)

     

    PERFORMANCE CASH
      UNIT AGREEMENT 

     

    This
      Agreement between AGL Resources Inc. (the “Company”) and the Recipient sets
      forth the terms of the Performance Units awarded under the above-named Plan.
      

     

    Name
      of Recipient:
      _________________________

     

    Date
      of Award:    Performance
      Multiple: [1]x

     

    Target
      Performance Units: $ 

     

    Performance
      Measurement Period: January
      1, 200__ through December 31, 200__

    


    Performance
      Measurement:
      The
      performance measure (PM) for this Award will be the Company’s average annual
      growth in basic earnings per share plus the average dividend yield.

    


    Performance
      Calculation: At
      the
      end of the Performance Measurement Period, the Performance Units will vest
      based
      on the increase in the PM during the Performance Measurement Period in
      accordance with the following formula:


     

    
      	
               

               Base
                Pay x Performance Multiple x PM %
                = Actual Award

               

               

            


    

     

    In
      particular, the performance calculation shall be determined as
      follows:

     

    	·  	
            Base
              pay shall be the Recipient’s base pay as of
              ____________.

          


     

    	·  	
            Performance
              Multiple is set forth in this Performance Unit
              Agreement.

          


     

    	·  	
            PM
              shall be calculated as of the end of the Performance Measurement Period.
              

          


     

    	·  	
            PM
              shall be calculated to two decimal
              places.

          


     

    Threshold,
      Target and Maximum Payout:
      Threshold payout is calculated at 6% PM growth. Target payout is calculated
      at
      10% PM growth. Maximum payout is calculated at 14% PM growth or more. If PM
      growth is less than 6%, then no payout shall be made and the Performance Units
      shall be forfeited. 

     

    Following
      is an example of threshold, target and maximum payouts under this
      Agreement:

     

    Represents
      Base x Multiple x PM

     

    
      	
              Name

               

            	
              Perf
                Period

               

            	
              Base
                Pay ($)

               

            	
              Perf
                Multiple

               

            	
              Threshold
                Payout @ 6% ($)

               

            	
              Target
                Payout @ 10%($)

               

            	
              Maximum
                Payout @ 14% ($)

               

            
	 	 	
               

               

              $

               

            	
               

               

              [1]x

               

            	
               

               

              $

               

            	
               

               

              $

               

            	
               

               

              $

               

            


    

     

    Vesting:
      At
      the
      end of the Performance Measurement Period and upon certification of the PM
      by
      the Compensation and Management Development Committee, the Performance Units
      shall be payable in cash to the Recipient within a reasonable period of time
      pursuant to the terms of the Plan. 

     

    Forfeiture
      of units; termination of employment: Subject
      to the terms of the Plan and the terms set forth above, in the event that the
      Committee does not certify the attainment of the threshold performance criteria
      set forth above, the Performance Units under this Agreement shall be forfeited
      immediately.

    


    In
      addition, unless the Committee decides otherwise, all Performance Units covered
      hereunder that remain subject to restriction upon the Recipient’s termination of
      employment for any reason (including death, disability or retirement under
      the
      terms of the Company’s Retirement Plan, or any other retirement plan approved by
      the Board, for that purpose) will be forfeited as of the date of such
      termination of employment.

     

    Tax
      Withholding: At
      the
      time the Performance Units vest, the Recipient must pay to the Company an amount
      necessary to cover minimum required income tax and other withholdings required
      by law. The Recipient may satisfy the withholding requirements by any one or
      a
      combination of the following methods: 

     

    (a)
      cash,
      or 

     

    (b)
      withholding Performance Units that are otherwise vested under this Performance
      Unit Agreement.

     

    Except
      as
      provided herein, this Performance Unit Agreement is subject to the terms and
      conditions of the Plan. The Recipient has received a copy of the Plan’s
      prospectus, including a copy of the Plan. The Recipient agrees to the terms
      of
      this Performance Unit Agreement, which may be amended only upon a written
      agreement signed by the parties hereto.

     

    This
      ___
      day of _________ 200__

     

    
      	
              AGL
                RESOURCES INC.

               

            	
              RECIPIENT:

               

            
	/s/ Melanie M.
              Platt	
               

              ____________________________

            
	
              Melanie
                M. Platt, Senior Vice President