exhibit_10-1ay.htm


    
      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
10.1.ay

     

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

     

    FOR

     

    JOHN
W. SOMERHALDER II

     

    Pursuant
to the terms of the offer letter (the “Offer Letter”) dated March 2, 2006,
between John W.
Somerhalder II (the “Employee”) and AGL
Resources Inc. (the “Company”), the Company has adopted this Supplemental
Executive Retirement Plan (the “SERP”), effective January 1, 2009, in order to
attract, retain and motivate the Employee to excel on behalf of the
Company.

     

    The
Company intends the SERP to be an unfunded plan maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees within the meaning of Sections 201, 301, and
401 of the Employee Retirement Income Security Act of 1974
(“ERISA”).  The Company intends the SERP to be in good faith
compliance with Code §409A, and the SERP shall be construed
accordingly.

     

    1. Definitions.  Except
as otherwise provided herein, capitalized terms used in the SERP shall have the
meanings provided under the Retirement Plan (as defined below).  When
used herein, the following words and phrases and any derivatives thereof shall
have the meanings below unless the context clearly indicates
otherwise.  Section references indicate Sections of the SERP unless
otherwise stated.

     

    (a) “Administrator”
means the Compensation & Management Development Committee of the Company’s
Board of Directors, or its designee.

     

    (b) “Code”
means the Internal Revenue Code of 1986, as amended, and regulations promulgated
thereunder.

     

    (c) “Compensation”
means compensation as defined for purposes of calculating benefits under the
Retirement Plan, but disregarding the limits of Code Section
401(a)(17).

     

    (d) “Employee”
means John W. Somerhalder II.

     

    (e) “Excess
Plan” means the AGL Resources Inc. Excess Benefit Plan.

     

    (f) “Retirement
Plan” means the AGL Resources Inc. Retirement Plan.

     

    (g) “Separation
from Service” means separation from service with the Company, as determined
pursuant to guidance issued under Code §409A.

     

    (h) “SERP”
means this Supplemental Executive Retirement Plan, as it may be amended from
time to time.

     

    (i) “SERP
Benefit” means the benefit payable in accordance with the SERP.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. Eligibility To
Participate.  Only the Employee shall be eligible to
participate in the SERP.

     

    3. Amount of
Benefits.  The benefit paid under this SERP to the Employee
shall be equal to the actuarial equivalent of the amount determined under (a),
minus the amount determined under (b):

     

    (a) The
amount of any pension benefit the Employee would be eligible to receive from the
Retirement Plan and the Excess Plan combined, expressed in the form of a benefit
payable beginning at age 65 in the form of a single life annuity, if the
Employee had (i) remained actively employed and received Compensation in the
amount of the Compensation received by the Employee for the Plan Year
immediately prior to the Plan Year in which the Employee Separates from Service
with the Company, for an additional year for each year of service that Employee
completed with the Company prior to Separation from Service, up to a maximum of
5 years, and (ii) been credited with an additional 5 Years of Vesting Service
and 5 Years of Eligibility Service under the Retirement Plan; minus

     

    (b) The
actual amount of any pension benefit Employee is eligible to receive from the
Retirement Plan and the Excess Plan combined, expressed in the form of a benefit
payable beginning at age 65 in the form of a single life annuity;

     

    provided,
such amounts shall be calculated at the time when Employee’s SERP Benefit is
paid hereunder and shall not be recalculated thereafter, even if the Retirement
Plan benefit and/or the Excess Plan benefit changes.  For purposes of
this calculation, actuarial equivalence will be based on the assumptions used by
the Company for disclosure purposes for the fiscal year immediately preceding
the year in which the SERP Benefit is paid hereunder.

     

    4. Vesting.  The
Employee’s SERP Benefit shall be fully vested and nonforfeitable on December 31,
2010, provided Employee does not Separate from Service with the Company before
such date.  If Employee terminates employment with the Company before
such vesting date, the SERP Benefit shall be immediately forfeited and Employee
shall have no further rights thereto.

     

    5. Form and Timing of
Benefits.  Vested SERP Benefits payable hereunder shall be paid
in the form of a single lump sum payment on the 30th day
after the date the Employee Separates from Service with the
Company.  Notwithstanding the foregoing, any remaining SERP Benefits
shall be paid immediately in a single lump sum to Employee’s estate on the
30th
day after the date of the Employee’s death.  The payment dates in this
paragraph are intended as good faith compliance with Code §409A, and guidance
issued thereunder, and shall be construed in all respects in accordance
therewith.  The Company shall not be liable to the Employee for
interest or damages for any delay in any such payment, provided that payment is
made within the same calendar year as the payment date specified in this
Section.  Notwithstanding the foregoing, to the extent required by
Code §409A, no payment under this SERP shall be made within 6 months after the
date the Employee Separates from Service.

     

    6. Amendment and
Termination.

     

    (a) Amendment of
SERP.  The SERP may be amended only by a writing signed by both
the Company and Employee.  The SERP is based on the current provisions
of the law applicable to such types of plan.  If there is a material
change in the law, the Company will work with Employee in good faith to provide
a comparable plan taking into account any such changes in the law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Termination of the
SERP.

     

    (i) Notwithstanding
anything in the SERP to the contrary, the Company reserves the right, at any
time, to wholly or partially terminate the SERP if necessary or desirable in the
opinion of the Company in its sole discretion, subject to the restrictions
provided in Code  §409A.

     

    (ii) Upon
termination of the SERP, in lieu of the timing provided under paragraph 5,
Employee’s SERP Benefit under paragraph 3 shall be paid to the Employee in a
single lump sum cash payment on the earlier of the date of termination, or the
earliest date permissible under Code §409A.

     

    7. Claims
Procedure.  Any grievance, complaint or claim concerning any
aspect of the operation or administration of the SERP, including but not limited
to claims for benefits (collectively referred to herein as “claim” or “claims”),
must be submitted within the “applicable limitations period.”  The
“applicable limitations period” shall be 2 years, beginning on (i) in the case
of any lump-sum payment, the date on which the payment was made, (ii) in the
case of a periodic payment, the date of the first in the series of payments, or
(iii) for all other claims, the date on which the action complained of
occurred.  Additionally, upon denial of an appeal pursuant to this
Section, Employee or other claimant shall have 90 days within which to bring
suit against the Plan for any claim related to such denied appeal; any such suit
initiated after such 90-day period shall be precluded.  All claims and
requests for benefits under the SERP shall be directed to the attention of the
Administrator in writing.  The writing must be reasonably calculated
to bring the claim to the attention of the Administrator.  The
claimant may name an authorized representative to act on his behalf under the
claims procedures of the SERP, by providing written documentation of such
authorization in such form as is acceptable to the Administrator.

     

    (a) Denial of Initial
Claims.  If a claim for SERP benefits is denied, the
Administrator will provide a written notice within 90 days to the claimant that
contains (i) specific reasons for the denial, (ii) specific references to SERP
provisions on which the Administrator based its denial, (iii) a description of
any additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary and
(iv) a description of the SERP’s review procedures and time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil
action under section 502(a) of ERISA following an adverse benefit determination
on review.

     

    The
notice will also contain a statement that the claimant may (i) request a review
upon written application to the Administrator within 60 days, (ii) submit
written comments, documents, records and other information relating to the
claim, and (iii) request copies of all documents, records, and other information
relevant to the claim.  If a claim is denied because of incomplete
information, the notice will also indicate what additional information is
required.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    If
additional time is required to make a decision on the claim, the Administrator
will notify the claimant of the delay within the original 90-day
period.  This notice will also indicate the special circumstances
requiring the extension and the date by which a decision is
expected.  This extension period may not exceed 90 days beyond the end
of the first 90-day period.

     

    (b) Appeals.  The
claimant may appeal a denied claim by submitting a written request for an appeal
review to the Administrator.  The appeal request must, however, be
made within 60 days after the claimant’s receipt of notice of the denial of the
claim.  Pertinent documents may be reviewed in preparing an appeal,
and issues and comments may be submitted in writing.  The claimant
will be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claim
for benefits (as determined under applicable regulations).  The
Administrator will completely review the appeal, taking into account all
comments, documents, records and other information submitted by the claimant
without regard to whether such information was submitted or considered in the
initial benefit determination.

     

    The
Administrator will review an appeal of a denied claim no later than 60 days
following such request for review, unless special circumstances require a
further extension of time for processing, in which case a benefit determination
shall be rendered no later than 120 days following the Administrator’s receipt
of the request for review.  If such an extension of time for review is
required because of special circumstances, the Administrator will provide the
claimant with written notice of the extension, describing the special
circumstances and the date as of which the benefit determination will be made,
prior to the commencement of the extension.

     

    8. Miscellaneous.

     

    (a) No Effect on Employment
Rights.  Nothing contained herein will confer upon the Employee
the right to be retained in the service of the Company nor limit the right of
the Company to discharge or otherwise deal with the Employee without regard to
the existence of the SERP.

     

    (b) Funding.  The
SERP at all times shall be unfunded such that SERP Benefits shall be paid solely
from the general assets of the Company.  Neither the Employee nor his
heirs or assigns shall have any interest in any particular assets of the Company
by reason of the right to receive a benefit under the SERP and the Employee or
his heirs and assigns shall have only the rights of a general unsecured creditor
of the Company with respect to any rights under the SERP.  Nothing
contained in the SERP shall constitute a guaranty by the Company or any other
entity or person that the assets of the Company will be sufficient to pay any
benefit hereunder.

     

    (c) Administration and
Interpretation.  The Administrator shall administer the
SERP.  The Administrator shall be entitled to rely conclusively upon
all tables, valuations, certificates, opinions and reports furnished by any
actuary, accountant, controller, counsel or other person employed or engaged by
the Company with respect to the SERP.  The Administrator has full
discretion and the exclusive right to construe the terms of the SERP and to
determine eligibility for benefits and payment under the SERP pursuant to its
terms.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Disclosure.  The
Employee shall be a signatory to and shall receive a copy of the
SERP.

     

    (e) State
Law.  The SERP is established under and will be construed
according to the laws of the State of Georgia, to the extent that such laws are
not preempted by ERISA and valid regulations published thereunder.

     

    (f) Spendthrift
Provisions.  No benefit payable under the SERP will be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge prior to actual receipt thereof by the
payee.  Any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge prior to such receipt will be
void.  The Company will not be liable in any manner for or subject to
the debts, contracts, liabilities, engagements or torts of any person entitled
to any benefit under the SERP.  The amounts payable under this SERP
will be exempt from the claims of the Employee’s creditors to the fullest extent
permitted by law.

     

    (g) Incapacity of
Recipient.  In the event the Employee or other payee hereunder
is declared incompetent and a conservator or other person legally charged with
the care of his person or of his estate is appointed, any benefits under the
SERP to which such person is entitled shall be paid to such conservator or other
person legally charged with the care of this person or his
estate.  Except as provided above in this paragraph, when the
Administrator in its sole discretion determines that the Employee or other payee
is unable to manage his or her financial affairs, the Administrator may direct
the Company to make distributions to a duly authorized person for the benefit of
such Employee or payee.  Any payment under this paragraph shall be in
full satisfaction of the Company’s liability therefor.

     

    (h) Unclaimed
Benefit.  The Employee shall keep the Administrator informed of
his current address and the current address of his spouse.  The
Administrator shall not be obligated to search for the whereabouts of any
person.  If the location of the Employee is not made known to the
Administrator by December 1 of the year in which any payment of the Employee’s
SERP Benefit is to be made, payment may be made as though the Employee had died
30 days prior to such December 1.  If, prior to the deadline for
payment of the SERP Benefit under Code §409A, the Administrator is unable to
locate the Employee and the survivors of the Employee, then the Company shall
have no further obligation to pay any benefit hereunder to such Employee or
heirs or assigns, or any other person, and such benefit shall be irrevocably
forfeited.

     

    (i) Limitations on
Liability.  Notwithstanding any of the preceding provisions of
the SERP, except for payment of SERP Benefits due under the SERP by the Company,
neither the Company nor any individual acting as an agent of the Company or as a
member of the Administrator shall be liable to the Employee or any other person
for any claim, loss, liability or expense incurred in connection with the
SERP.

     

    (j) No Enlargement of
Rights.  The Employee will have no right to or interest in any
portion of the SERP except as specifically provided in the SERP.

     

    (k) Withholding for
Taxes.  Payment under the SERP will be subject to withholding
for payroll taxes as required by law, including state and federal income taxes
and FICA taxes, subject to the restrictions of Code §409A.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (l) All Prior Agreements
Superseded.  The SERP, as set forth in this document is
intended to provide the supplemental pension benefit described in the Offer
Letter.  The SERP replaces and supersedes all previous written
documents and all oral agreements, of any nature whatsoever, regarding the
Company’s obligation to provide such supplemental retirement benefits to the
Employee, and the Employee has indicated his acknowledgement of said fact by
signing this agreement in the space below.

     

     

    AGL
Resources Inc.

     

     

    By:    /s/ Arthur E.
Johnson                                                  

     

     

    Title:
Director

     

     

    Date:__________________________

     

     

    Employee:

     

     

    


     

     

    John W.
Somerhalder II

     

    Date: /s/ John W. Somerhalder
II