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                                                                    EXHIBIT 10.4

                                  Summary of
                        Sequent Energy Management, L.P.
                      Incentive Compensation Program (ICP)

Designated employees of Sequent Energy Management, L.P. (the Company)
participate in an annual cash incentive compensation program designed to reward
performance as measured by the Company's EBIT (Earnings Before Interest and
Income Taxes) and, in some instances, "net book" as defined below.  The first
measurement period for determining incentive compensation is April 1, 2001
through September 30, 2001.  Thereafter, performance will be measured over
twelve-month periods consistent with the fiscal year of the Company.

The program provides for distribution of an incentive pool.  The pool amount
will be determined for each measurement period based on the Company's EBIT.
Aggregate awards paid to all employees of the Company pursuant to the ICP may
not exceed the funds allocated to the ICP pool.  If the specified EBIT threshold
for a measurement period is not achieved, the Company will not generally make
funds available for an ICP incentive pool.  If, however, EBIT equals or exceeds
the specified threshold, participating employees will receive incentive
compensation, based on objectives established at the beginning of the
measurement period, as follows:

1.  Annual incentive awards for some employees will be based upon EBIT results,
    and those employees will typically receive awards of a specified percentage
    of base salary.

2.  Annual incentive awards for certain officers of the Company will be
    calculated as a percentage of the Company's "net book". Net book is more
    fully defined in the ICP document, but is generally gross Company profit
    less various costs, including costs of the ICP.

3.  Some employees' annual incentive awards may be determined by a combination
    of EBIT and net book results.

4.  Some employees' annual incentive awards under the ICP may be based entirely
    upon management's subjective evaluation of their performance.

Positive or negative adjustments may be made to the ICP award pool if the size
of the pool is deemed not to appropriately reflect the Company's results.
Furthermore, the Company reserves the right to make positive or negative
adjustments to any individual award based upon management's evaluation of the
employee's performance.

The officers of the Company are provided an opportunity under the ICP to elect
to defer all or a portion of their earned bonus.  Pursuant to the deferral
mechanism, the amount of an individual's award is increased by 25% and then
exchanged for AGL Resources nonqualified stock options (NQSOs) or, at AGL
Resources' election, stock appreciation rights (SARs), under the following
terms:

1.  The number of NQSOs or SARs received in exchange for the deferred bonus will
    be determined by dividing the deferred amount (i.e., 125% of the
    individual's award) by the Black-Scholes (binomial) value of AGL Resources
    common stock on the date of exchange.

2.  The exercise price of the NQSOs or SARs will be the fair market value of AGL
    Resources shares on the date of the exchange.

3.  All NQSOs and SARs will be fully vested as of the date that is one year from
    the date of the exchange.<PAGE>

                                                                    EXHIBIT 10.5

April 16, 2001

Ms. Susan A. McLaughlin
14 Montclair Drive NE
Atlanta, GA  30309

Dear Sue:

         This letter is a formal offer of employment to you for the position of
Executive Vice President and Chief Operating Officer of AGL Resources Inc.
("AGLR"). You will also hold the title of President, Atlanta Gas Light Company.
It is intended that in the event the CEO becomes Chairman of AGL Resources, the
title of President will be relinquished to you as well. In this position, you
will have offices at both the AGLR headquarters at 817 West Peachtree Street and
at 1251 Caroline Street. You will report directly to me.

         Please review the terms outlined below, and if these terms are
satisfactory to you, please sign the acceptance at the end of this letter and
return the original to Ms. Melanie M. Platt, 817 West Peachtree Street, 10th
Floor, Atlanta, GA 30308. This offer will remain open for fifteen (15) calendar
days. If you accept this offer, you will begin employment as Chief Operating
Officer of AGLR effective as of May 1, 2001.

         Below is a general discussion of the various components of the
compensation and benefits package you are to receive in this position:

Base Salary:         The initial base salary will be $375,000 per year, to be
                     paid on a biweekly basis.  Your base salary will be
                     reviewed annually.

Signing Incentives:  As an inducement for you to enter employment with AGLR, the
                     Company agrees to provide the following to you upon your
                     hire:

                        1)   Cash bonus of $100,000;

                        2)   As of your first day of employment, AGLR will grant
                             to you a nonqualified stock option for 75,000
                             shares of Company Stock with a per share exercise
                             price equal to the fair market value of the stock
                             at that time, under the terms of AGLR's Long-Term
                             Incentive Plan ("LTIP"). This stock option will
                             become 33 1/3%
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                        3)   exercisable on each anniversary of your date of
                             hire and will include a reload feature; and

                        4)   As of your first day of employment, AGLR will award
                             you 8,000 shares of Restricted Stock under the
                             terms of the LTIP. This award of Restricted Stock
                             will become 33 1/3% vested on each anniversary of
                             your date of hire.

Annual Incentives:   This position is eligible to participate in AGLR's Annual
                     Team Incentive Plan for each fiscal year with a target
                     incentive of 55% of Base Salary (the specifics of the
                     performance targets and weighting of corporate, business
                     unit and personal objectives will be determined upon your
                     employment). For the fiscal year ending September 30, 2001,
                     you will be guaranteed a minimum bonus of $100,000.

Long-Term
Incentives:          For subsequent fiscal years, grants and awards will be made
                     as determined and approved by the Board of Directors under
                     the terms of the LTIP.

Continuity
Agreement:           The Company agrees to enter into a three-year Continuity
                     Agreement with you that will provide severance for you in
                     the event you are terminated from employment during a
                     period of 24 months following a change in control of the
                     Company. This agreement will provide the same protections
                     for you as are provided to other senior level officers of
                     the Company.

Stay Bonus:          In the event the position of CEO becomes vacant during your
                     first three (3) years of employment with the Company, and
                     regardless of whether the CEO position is filled by you or
                     someone else, if you remain in the Company's employ for a
                     period of at least six (6) months following the new CEO's
                     date of hire or promotion, you will become entitled to a
                     lump sum payment equal to one year of your Base Salary.
                     This lump sum amount shall not be payable if the terms and
                     conditions of your Continuity Agreement apply to your
                     termination of employment.

Severance:           You will be eligible to participate in the AGLR Employee
                     Severance Plan; provided, that in the event your employment
                     is terminated by the Company for any reason other than
                     "cause" (as determined by AGLR), death or disability,
                     during the first 12 months of your employment, you will
                     receive the greater of (a) the severance benefit you would
                     be entitled to under the terms of the Employee Severance
                     Plan, or (b) an amount equal to one year of annual Base
                     Salary. This severance benefit shall not be payable if the
                     terms and conditions of your Continuity Agreement apply to
                     your termination of employment. This Severance benefit
                     shall not be payable if your termination of employment
                     creates a right of payment to you under the terms and
                     conditions of your Continuity Agreement or your Stay Bonus
                     provision.

Mentor/Coach:        The Company agrees to provide for the services of your
                     mentor/coach (Mr. Frank Grosser) for a period of one year
                     following your date of hire up to a maximum cost of
                     $25,000.
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BENEFITS

Flexible Benefits
Plan:                AGLR maintains a comprehensive flexible benefits plan,
                     which includes coverages for medical, dental, and group
                     term life insurance. In addition, long-term disability
                     benefits are available, plus medical reimbursement and
                     dependent care assistance spending accounts.

Retirement Benefits: Pension Plan. Employees are eligible to participate in the
                     AGLR Retirement Plan (a defined benefit pension plan) as of
                     the first day of the calendar month following one year of
                     employment.

                     401(k) Plan. Employees are eligible to participate in the
                     AGLR 401(k) plan, known as Retirement Savings Plus (RSP),
                     as of the first business day following 30 days of
                     employment. The RSP provides a 65% matching contribution on
                     deferrals of up to 8% of compensation (however, officers
                     may be limited to a lesser deferral amount due to
                     discrimination testing of the RSP).

                     Nonqualified Savings Plan. To offset the restrictions
                     placed on contributions by highly compensated employees,
                     the AGLR Nonqualified Savings Plan (NSP) is a "mirror" of
                     the RSP and allows participants to take full advantage of
                     AGLR's matching contribution on contributions up to 8% of
                     compensation. The NSP generally permits deferrals of up to
                     50% of compensation and 100% of annual bonus.

Vacation.            Immediately upon your employment, you will be eligible for
                     four (4) weeks of paid vacation.

         This letter is an offer of employment. It is not an employment contract
and does not guarantee employment through any specific date. If you accept this
offer, your employment with AGLR will be "at will" and may be terminated by
either you or AGLR at any time without notice.

         By accepting this offer, you represent and warrant to AGLR that you are
not bound by any other agreement, written or oral, which would preclude you from
entering into employment by AGLR. In the event of a breach by you of this
provision that results in costs or damage to AGLR, you agree to indemnify and
hold AGLR harmless with respect to such costs or damage.

         If these terms are satisfactory, please sign the acceptance below and
return the original of this letter to Melanie Platt. If you desire more detail
on any aspect of the above, we will be happy to provide it. We look forward to
working with you.

                             Very truly yours,

                             Paula G. Rosput
                             President and Chief  Executive Officer

The above offer is ACCEPTED
on the 19th day of April  , 2001.
       ----        -------

/s/ Susan A. McLaughlin
--------------------------------------------
Susan A. McLaughlin

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