exhibit_10-1.htm


    
      

    

     

    Exhibit
10.1


     

    RETIREMENT
ENHANCEMENT AGREEMENT

     

    This
Retirement Enhancement Agreement is hereby made by and between Kevin P. Madden
(herein called "Executive") and AGL RESOURCES INC. (which, with its affiliates,
is herein called "the Company").

    


    This
Retirement Enhancement Agreement has been offered to the Executive for a period
of 21 days for his consideration. The Executive has determined to retire from
his employment with the Company effective, March 1, 2009, and the Company has
agreed to provide him with certain payments and benefits. In consideration of
the mutual benefits to each party, the parties agree as follows:

     

    
      
        	
                1.

              	
                RETIREMENT DATE. The
      Executive will cease to be an employee of the Company effective as of the
      end of the day on March 1, 2009. As the Executive is immediately eligible
      under the terms of the AGL Resources Inc Retirement Plan to commence early
      retirement, March 1, 2009 is referred to herein as the "Retirement
      Date.”

              


      

    

     

    2.            PAYMENTS.

     

    (a) Accrued Benefits. As soon as
practicable following the Retirement Date, the Company shall pay to the
Executive any earned but unpaid base salary, unused vacation pay, unreimbursed
business expenses and all other amounts earned by (but not paid to) the
Executive through and including the Retirement Date.

     

    (b) Bonus. The Executive
acknowledges that he shall not be eligible for any payments under any of the
Company’s annual incentive plans or programs for the 2009 performance
period.

     

    (c) Relocation. As soon as
practicable (but no later than fifteen (15) days) following the Retirement Date
and the expiration of any right of revocation of the Release referenced in
Paragraph 12, below, the Company shall reimburse to the Executive personal
expenses he has incurred to relocate his family to the Washington D.C. area, in
the amount of $20,022.

     

    (d)  Special
Payment.  As soon as practicable (but no later than fifteen
(15) days) following the Retirement Date and the expiration of any right of
revocation of the Release referenced in Paragraph 12, below, the Company shall
pay to the Executive a one-time lump-sum payment in the amount of $208,000, in
recognition of his distinguished and invaluable service to the
Company.  This payment is intended to represent the additional amount
the Executive would be entitled to if, as of the Retirement Date, he had
attained age 60 and had accrued ten years of credited service under the
Company’s defined benefit pension plans.

     

           
(e)  Consulting
Services.  For the period beginning on the Retirement Date and
ending December 31, 2009 (the “Consulting Period”), the Executive will receive
payments for continuing consulting services related to rate cases as well as
other matters as determined by the Chairman, President and Chief Executive
Officer.  Payments for the period will total $143,800 plus
reimbursement for related expenses, as pre-approved by the Senior Vice President
of Governmental and Regulatory Affairs. The Company and the Executive agree that
during the Consulting Period, the Executive will act as an independent
contractor in the performance of his duties. Accordingly, the Executive shall
then be responsible for payment of all taxes including Federal, State and local
taxes arising out of the consulting activities and he shall not, except as
otherwise set forth herein, be eligible to participate in any of the Company’s
compensation or benefit plans or arrangements during the Consulting
Period.  The Parties will execute a separate agreement outlining the
Parties’ respective rights and obligations regarding the Consulting Period
including, without limitation, provisions addressing indemnification rights,
ownership of work product, and confidentiality.

     

    
      	
              3.

            	
              WELFARE AND OTHER BENEFITS.
      Unless otherwise specified below, upon the Retirement Date, the
      Executive shall cease to participate in the Company's compensation and
      benefit plans, pursuant to the terms and conditions of the plan
      documents.

            


    

     

    
      	
              4.

            	
              LONG
      TERM INCENTIVES.

            


    

     

    (a) Vested Stock Options. Any
outstanding, vested employee stock options granted under the Long-Term Incentive
Plan (1999) (LTIP)or Omnibus Performance Incentive Plan (2007) (OPIP), held by
the Executive on his Retirement Date for which, as of such date, the exercise
price exceeds the then fair market value of a share of Company common stock (as
determined in accordance with the terms of the LTIP and OPIP, respectively)
shall terminate and expire on the date which is thirty - six (36) months
following the Retirement Date, provided such expiration date is not beyond the
original expiration date of any such stock option. Any vested stock options
other than those described in the previous sentence, shall expire on the first
anniversary of the Retirement Date, pursuant to the terms of the subject
plans.  As required by law, any outstanding incentive stock options
shall convert to nonqualified stock options on the date three months following
the Retirement Date.

     

    (b) Unvested, Stock Options and Other
Stock-based or Cash based Awards, Unvested stock options granted under
the LTIP shall vest as of the Retirement Date.  Unvested stock options
granted under the OPIP which would otherwise have vested within twelve (12)
months of the retirement date shall vest.  Any other stock options and
all unvested restricted stock awards, restricted stock unit awards and
performance cash unit awards shall be forfeited as of the Retirement
Date.

     

    
      	
              5.

            	
              RESTRICTIVE COVENANTS.
      For and in consideration of the payment and benefits provided to
      the Executive under this Retirement Enhancement Agreement, the Executive
      agrees to the terms of the
following:

            


    

     

          
(a) Limited Disclosure of Employment or
other Business Opportunities.  Executive agrees that, during a
period beginning on the Retirement Date and ending one (1) year after the
conclusion of the Consulting Period, he will notify the Company’s Chief
Executive Officer of any employment, independent contractor, consulting, or
other similar relationship that he may accept or any business venture in which
he may become involved as an owner, operator, partner, joint venturer or in
which he otherwise may obtain an ownership interest.  Executive will
provide this notice at least ten (10) business days prior to the time that he
performs any work or other services, as described above, or obtains the
ownership interest, as described above.  The Company’s Chief Executive
Officer, or his designee, and Executive will discuss the steps, if any, to be
taken to prevent the use or disclosure of the Company’s Confidential Information
(as defined below).

     

         
(b) Nondisclosure and Confidentiality.
Executive acknowledges that, during his employment and the Consulting
Period, he has learned and will learn information that is confidential or
proprietary to the Company and its affiliated companies (“Confidential
Information”). Confidential Information is information, without regard to form,
relating to the Company and its affiliates and their employees, customers,
vendors and/or suppliers that derives economic value, actual or potential, from
not being known to others, including, but not limited to, business development
strategies, potential projects and purchases, information technology, research
and development, contracts and specific terms of contracts with and proposals
to, customers, clients and other organizations with which the Company does
business or seeks to do business; the type, quantity and specifications of
products purchased by or from customers and/or by suppliers; lists and other
information about current or prospective clients, vendors or suppliers
(including compilations of such information); plans or strategies for capacity
supply, regulatory filings, sales, marketing, purchases, acquisitions, ventures,
or other business development; sales and account records, prices and pricing
strategies/information, methods, systems, techniques, procedures, designs,
formula, inventions and know-how, whether or not in writing. Confidential
information includes information disclosed to the Company by third parties that
the Company is obligated to maintain as confidential
information.  Executive agrees that, during the Consulting Period and
for a period of one year after the termination of the Consulting Period, he will
hold in strictest confidence and not use, for his own benefit or for the benefit
of anyone else, any Confidential Information of the Company. Executive further
agrees that, to the extent that any Confidential Information is also considered
a Trade Secret under applicable law, Executive will hold in strictest confidence
and shall not use, for his own benefit or for the benefit of anyone else, any
such information as long as it remains a Trade Secret under applicable
law.

    


                 
(c)  Non-solicitation. Executive
covenants and agrees that, during a period beginning on the Retirement Date and
ending one (1) year after the conclusion of the Consulting Period, he will not,
without the express written consent of the Company’s Chief Executive Officer,
directly or indirectly solicit or attempt to solicit any business in competition
with the Business of Company from any of Company's customers or suppliers with
whom Executive had Material Contact during the last two years of Employee's
employment with Company.   For purposes of Paragraph 5,
"Material Contact" means
both directly by contact in person, through electronic or paper correspondence,
or by telephone for a business-related purpose of Company; or indirectly through
other employees supervised by Employee, directly or indirectly, who have contact
in person, through
electronic or paper correspondence, or by telephone for a business-related
purpose of Company. For purposes of paragraph 5, the “Business of the Company”
means operating a natural gas distribution system, marketing natural gas to
retail customers, providing asset management and related services to wholesale
natural gas customers, and the acquisition, development, marketing, operation
and sale of natural gas storage facilities.

     

    
                          
(d)  Non-Recruitment of Employees. Executive covenants and agrees
that, during a period beginning on the Retirement Date and ending one (1) year
after the conclusion of the Consulting Period, he will not directly or
indirectly solicit or attempt to solicit any employee of Company with whom he
had Material Contact during the last two years of his employment, to terminate
or resign such employee's employment with Company.

    

    


    
      	
              6.  

            	
              COOPERATION AFTER CONSULTING PERIOD. The Executive agrees
      to cooperate fully with the Company for a period of one (1) year following
      the conclusion of the Consulting Period and to reasonably assist the
      Company thereafter on all matters relating to his employment and the
      conduct of the Company's business, including any litigation, claim or suit
      involving the Company as a party or witness and as to which the Executive
      possesses knowledge or information which may be relevant to the litigation
      or in which the Company deems that the Executive's cooperation is needed.
      The Company agrees to reimburse the Executive for all reasonable
      "out-of-pocket"
      expenses related to provision of the services referenced in this
      Paragraph, provided the Executive receives advance approval of such
      expenses by the Company's Senior Vice President-Governmental and
      Regulatory Affairs and provides the Company with receipts and invoices for
      all such expenses in accordance with the Company's general expense
      reimbursement policy then in
effect.

            


    

    


    
      	
              7.  

            	
              CONFIDENTIALITY AGREEMENT.
      The Executive and the Company understand and agree that, due to the
      sensitive nature of this matter, the terms of this Retirement Enhancement
      Agreement are to be kept private and confidential and that the terms of
      this Retirement Enhancement Agreement shall not be disclosed, unless the
      party(ies) is (are) required by law to do so. While not limiting the
      generality of the foregoing, disclosure includes any statement, written or
      oral, to any person, including, but not limited to, any current or former
      Executives of the Company. The parties to this Retirement Enhancement
      Agreement acknowledge that there will be circumstances under which some or
      all of the terms of this Retirement Enhancement Agreement will have to be
      made known to some individuals in the regular course of conducting
      business and personal affairs. In keeping with that understanding, the
      Company agrees that the Executive may discuss the terms of this Retirement
      Enhancement Agreement with his attorneys, accountants, tax advisors and
      immediate family. The Executive agrees to advise such individuals of the
      confidentiality provisions of this Retirement Enhancement Agreement and
      will advise anyone so named of the requirement to keep the terms of this
      Retirement Enhancement Agreement confidential. Should the Executive
      disclose any of the terms of this Retirement Enhancement Agreement to
      persons (whether entities or individuals) other than those specified in
      this section, then such actions shall constitute a material breach of this
      Retirement Enhancement Agreement on the part of the Executive. The
      obligations under this Paragraph shall survive the termination of this
      Retirement Enhancement Agreement.

            


    

     

    
      	
              8.  

            	
              NONDISPARAGEMENT. The
      Executive agrees that he shall not make any untrue statement or criticism,
      written or oral, nor take any action which is adverse to the interests of
      the Company or that would cause the Company or its current or former
      officers, directors, Executives, agents, or shareholders embarrassment or
      humiliation or otherwise cause or contribute to such persons being held in
      disrepute by the public or by the Company's clients, customers, or
      Executives. From and after the Retirement Date, the Executive shall
      refrain from discussing the terms and conditions of the termination of the
      Executive's employment with any Executive, agent, client or customer of
      the Company. The officers and directors of the Company agree that they
      shall not make any untrue statement or criticism, written or oral, nor
      take any action which is adverse to the interests of the Executive or that
      would cause the Executive embarrassment or humiliation or otherwise cause
      or contribute to his being held in disrepute by the public or by the
      Company's clients, customers or Executives. The obligations under this
      Paragraph shall survive the termination of this Retirement Enhancement
      Agreement.

            


    

    


    
      	
              9.  

            	
              RETURN OF COMPANY DOCUMENTS
      AND PROPERTY. The Executive hereby represents and warrants that, as
      of the conclusion of the Consulting Period, he will return to the Company
      all documents (including copies and computer records thereof) of any
      nature which relate to or contain proprietary or confidential information
      concerning the Company, its customers, or Executives, and any and all
      property of the Company which has been in his possession, including,
      except as hereinafter provided, any computers, computer programs or
      limited use software licenses in his possession. The Executive confirms
      that all confidential information is and shall remain the exclusive
      property of the Company. All business records, papers and documents kept
      or made by the Executive relating to the business of the Company shall be
      and remain the property of the Company, except for such papers customarily
      deemed to be the personal copies of the Executive. Information in the
      public domain or information that is commonly known by or available to the
      public through the Company's press releases, public documents, annual
      reports, SEC filings or other public filings shall not be considered
      proprietary or confidential
information.

            


    

     

    
      	
              10.  

            	
              NO ADDITONAL CONSIDERATION.
      The Executive agrees that the foregoing payments and additional
      consideration will constitute the entire amount of monetary and other
      consideration provided to him under this Retirement Enhancement Agreement,
      that he is not entitled to any further consideration whatsoever from the
      Company, apart from any and all vested and non-forfeitable benefits,
      payments, or stock rights, including all rights, if any, under the
      Company's pension, 401(k), and nonqualified savings
  plans.

            


    

     

    
      	
              11.  

            	
              GENERAL RELEASE. The
      Executive agrees, for himself, his spouse, heirs, executor or
      administrator, assigns, insurers, attorneys and other persons or entities
      acting or purporting to act on his behalf, to irrevocably and
      unconditionally release, acquit and forever discharge the Company, and the
      Company's directors, officers, Executives, shareholders, partners, agents,
      representatives, predecessors, successors, assigns, insurers, attorneys,
      benefit plans sponsored by the Company and said plans' fiduciaries, agents
      and trustees (the foregoing being referred to herein as the "Released
      Parties"), from any and all actions, cause of action, suits, claims,
      obligations, liabilities, debts, demands, contentions, damages, judgments,
      levies and executions of any kind, whether in law or in equity, known or
      unknown, which the Executive has, has had, or may in the future claim to
      have against any of the Released Parties by reason of, arising out of,
      related to, or resulting from Executive's employment with the Company or
      the termination thereof. This release specifically includes without
      limitation any claims arising in tort or contract, any claim based on
      wrongful discharge, any claim based on breach of contract, any claim
      arising under federal, state or local law prohibiting race, sex, age,
      religion, national origin, handicap, disability or other forms of
      discrimination, any claim arising under federal, state or local law
      concerning employment practices, and any claim relating to compensation or
      benefits. This specifically includes, without limitation, any claim which
      the Executive has or has had under Title VII of the Civil Rights Act of
      1964, as amended, the Age Discrimination in Employment Act, as amended,
      the Americans with Disabilities Act, as amended, and the Executive
      Retirement Income Security Act of 1974, as amended. It is understood and
      agreed that the waiver of benefits and claims contained in this Paragraph
      does not include a waiver of the right to payment of any vested,
      nonforfeitable benefits to which the Executive or a beneficiary of the
      Executive may be entitled under the terms and provisions of any Executive
      benefit plan of the Company which have accrued as of the Retirement Date,
      and does not include a waiver of the right to benefits and payment of
      consideration to which the Executive may be entitled under this Retirement
      Enhancement Agreement. The Executive acknowledges that he is only entitled
      to the additional benefits and compensation set forth in this Retirement
      Enhancement Agreement, and that all other claims for any other benefits or
      compensation are hereby waived, except those expressly stated in the
      preceding sentence.

            


    

     

    
      	
              12.  

            	
              PENALTIES.  In
      addition to any legal or equitable remedies available to the Company,
      including injunctive relief, the Executive agrees and acknowledges that if
      he violates any provision of this Retirement Enhancement Agreement, the
      Company may immediately cease any and all payments and benefits payable to
      the Executive hereunder. In addition, if the Company terminates the
      Executive for cause prior to the Retirement Date, the Company may
      terminate this Retirement Enhancement Agreement with no further liability
      for any payments and benefits payable to the Executive hereunder. For
      purposes of this Paragraph, "cause" shall mean (i) the Executive's willful
      and continued failure to perform any substantial duty of his position with
      the Company or any of its Affiliates (other than any such failure
      resulting from incapacity due to Disability) which is not cured within
      thirty (30) days following written notice by the Company; (ii) the
      Executive's willful engagement in any illegal conduct or gross misconduct
      which is materially and demonstrably injurious to the Company; (iii) the
      Executive's engagement in any activity that is in conflict of interest or
      competitive with the Company or any of its Affiliates; (iv) the
      Executive's engaging in any act of fraud or dishonesty against the Company
      or any of its Affiliates or any material breach of federal or state
      securities or commodities laws or regulations; (v) the Executive's being
      intoxicated or in possession of any illegal substance in the workplace;
      (vi) the Executive's engaging in an act of assault or other act of
      violence; (vii) the Executive's harassment of any individual in the
      workplace based on age, gender or other protected status or class or
      violation of any policy of the Company regarding harassment, but only
      following an investigation by an independent third party into the
      harassment; and (viii) the Executive's conviction for any felony or
      misdemeanor charge (other than charges related to routine traffic
      violations).

            


    

     

    
      	
              13.  

            	
              REVOCATION PERIOD. For
      a period of seven (7) days following execution of this Retirement
      Enhancement Agreement, the Executive may revoke this Retirement
      Enhancement Agreement by sending written notice of revocation by Certified
      Mail (return receipt requested) within that period
  to:

            


    

    


    Mr. Dave
Smith

    Vice
President - Human Resources

    AGL
Resources Inc.

    Ten
Peachtree Place – 12th
Fl

    Atlanta,
GA 30309

    


    
      	
              14.  

            	
              GOVERNING LAW. This
      Retirement Enhancement Agreement shall be construed in accordance with,
      and governed by, the laws of the State of Georgia, except to the extent
      that the federal laws of the United States shall otherwise
      apply.

            


    

    


    
      	
              15.  

            	
              ENTIRE AGREEMENT. This
      Retirement Enhancement Agreement constitutes the entire agreement between
      the parties with respect to the subject matter hereof and supersedes all
      prior or contemporaneous oral and written agreements and
      discussions.

            


    

     

    
      	
              16.  

            	
              SUCCESSORS. It is the
      Company's intent that this Retirement Enhancement Agreement is to be
      binding on the Company's successors, including any entity that purchases
      more than 50% of the Company's assets. The Company agrees to undertake
      negotiations with any successor to assume this Retirement Enhancement
      Agreement, to the extent that such assumption is not inherent in the
      purchase transaction.

            


    

     

    IN
WITNESS WHEREOF, the undersigned have executed this Retirement Enhancement
Agreement on the day of March 4, 2009.

     

    EXECUTIVE:

     

    Kevin P. Madden

    


    


    /s/ Kevin P.
Madden                                                      

    


     

    COMPANY:

    AGL
RESOURCES INC.

     

    BY: John W. Somerhalder
II                                                                           

            John W.
Somerhalder II

            Chairman,
President & Chief Executive Officer

    


    [THIS
DOCUMENT HAS BEEN EXECUTED IN DUPLICATE.]