<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
AGL RESOURCES INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF AGL RESOURCES INC APPEARS HERE]
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 6, 1998
----------------
To the Shareholders of AGL Resources Inc.:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of AGL
Resources Inc. (the "Company") will be held at the offices of the Company, 303
Peachtree Street, N.E., Atlanta, Georgia, on Friday, February 6, 1998 at 10:00
a.m., local time, for the purpose of considering and voting upon:
(1) A proposal to elect four directors.
(2) Such other business as properly may come before the Annual Meeting or
any adjournments thereof. The Board of Directors is not aware of any
other business to be presented for a vote of the shareholders at the
Annual Meeting.
Information relating to the above matters is set forth in the attached Proxy
Statement. The Board of Directors has fixed the close of business on
November 28, 1997 as the record date for the determination of the shareholders
entitled to receive notice of and to vote at the Annual Meeting or any
adjournments thereof.
Your vote is important. Please return your marked proxy card in the enclosed
postage-paid envelope whether or not you plan to attend the Annual Meeting.
Your continued interest in the Company is genuinely appreciated by the
directors, officers and personnel who serve you.
By Order of the Board of Directors
/s/ Melanie McGee Platt
-----------------------
Melanie McGee Platt
Vice President and Corporate Secretary
Atlanta, Georgia
December 23, 1997
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN COMPLETE, DATE, SIGN AND
RETURN THE ACCOMPANYING PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS
EARLY AS POSSIBLE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY, IF YOU SO
DESIRE, REVOKE THE PROXY CARD AND VOTE IN PERSON THOSE SHARES OF STOCK HELD BY
YOU OTHER THAN SHARES OF COMMON STOCK ALLOCATED TO AN ACCOUNT FOR YOU PURSUANT
TO THE COMPANY'S RETIREMENT SAVINGS PLUS PLAN OR LEVERAGED EMPLOYEE STOCK
OWNERSHIP PLAN.
<PAGE>
[LOGO OF AGL RESOURCES INC. APPEARS HERE]
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
--------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 6, 1998
This Proxy Statement is furnished to the shareholders of AGL Resources Inc.
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the 1998 Annual Meeting of
Shareholders (the "Annual Meeting") and at any adjournments thereof. The
Annual Meeting will be held on Friday, February 6, 1998 at 10:00 a.m., local
time, at the offices of the Company, 303 Peachtree Street, N.E., Atlanta,
Georgia. The approximate date on which this Proxy Statement and the enclosed
form(s) of proxy card are first being sent or given to shareholders is
December 23, 1997.
VOTING STOCK OUTSTANDING AND VOTE REQUIRED FOR APPROVAL
The securities that may be voted at the Annual Meeting consist of Common
Stock of the Company, $5 par value per share (the "Common Stock"), with each
share entitled to one vote on each matter submitted to the shareholders. Only
shareholders of record as of the close of business on November 28, 1997 (the
"record date") will be entitled to receive notice of and to vote at the Annual
Meeting. On the record date, 56,665,070 shares of Common Stock were
outstanding and eligible to be voted at the Annual Meeting.
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum at the Annual Meeting. In
counting the votes to determine whether a quorum exists at the Annual Meeting,
the number of votes "for" and abstentions (including instructions to withhold
authority to vote) will be used.
In voting for the proposal to elect the directors (Item 1 on the proxy
card), shareholders may vote in favor of all nominees, withhold their votes as
to all nominees or withhold their votes as to specific nominees. The vote
required to approve Proposal 1 is governed by Georgia law, and is a plurality
of the votes cast by the holders of shares entitled to vote, provided a quorum
is present. As a result, in accordance with Georgia law, votes that are
withheld will not be counted and will have no effect.
Under the rules of the New York Stock Exchange (the "Exchange") that govern
most domestic stock brokerage firms, member brokerage firms that hold shares
in street name for beneficial owners may, to the extent that such beneficial
owners do not furnish voting instructions with respect to any or all proposals
submitted for shareholder action, vote in their discretion upon proposals
which are considered "discretionary" proposals under the rules of the
Exchange. Member brokerage firms that have received no instructions from their
clients as to "non-discretionary" proposals do not have discretion to vote on
these proposals, which results in "broker non-votes." Such "broker non-votes"
will not be considered in determining whether a quorum exists at the Annual
Meeting and will not be considered as votes cast in determining the outcome of
any proposal.
<PAGE>
VOTING AND REVOCATION OF PROXIES
HOLDERS OF COMMON STOCK
Proxy cards are being transmitted with this Proxy Statement to all holders
of Common Stock of the Company. Any proxy given pursuant to this solicitation
may be revoked by any shareholder who attends the Annual Meeting (other than
participants in certain employee benefit plans of the Company as set forth in
the following paragraph), gives oral notice of his or her election to vote in
person, and submits a ballot at the meeting. In addition, any proxy given
pursuant to this solicitation may be revoked prior to the meeting by
delivering an instrument revoking it or a duly executed proxy bearing a later
date to the Corporate Secretary of the Company. If the proxy is completed
properly and returned by the shareholder and is not revoked, it will be voted
at the Annual Meeting in the manner specified thereon. IF THE PROXY IS
PROPERLY EXECUTED AND RETURNED BUT WITHOUT INSTRUCTIONS FOR VOTING, THE SHARES
REPRESENTED BY THE PROXY WILL BE VOTED "FOR" THE PROPOSAL LISTED ON THE PROXY
CARD AND DESCRIBED HEREIN. Any shareholder who executes and delivers a proxy
card may revoke it at any time prior to its use by giving written notice to
the Corporate Secretary of the Company at the following address: AGL Resources
Inc., Office of Corporate Secretary, P.O. Box 4569, Atlanta, Georgia 30302, or
by executing and delivering to the Corporate Secretary a duly executed proxy
card bearing a later date, or by appearing at the meeting and voting in person
as described above. The Board of Directors of the Company does not know of any
other business to be brought before the Annual Meeting other than that
described herein, but it is intended that, as to any such other business, a
vote will be cast pursuant to the proxy in accordance with the judgment of the
persons named as proxies.
PARTICIPANTS IN EMPLOYEE BENEFIT PLANS
Separate proxy cards are being transmitted to all persons who have shares of
Common Stock allocated to their accounts as participants or beneficiaries
under the AGL Resources Inc. Retirement Savings Plus Plan (the "RSP Plan") and
the AGL Resources Inc. Leveraged Employee Stock Ownership Plan (the "LESOP").
These proxy cards appoint The Northern Trust Company, which acts as Trustee
for the RSP Plan and the LESOP, to vote the shares held for the accounts of
the participants or their beneficiaries in the RSP Plan and the LESOP in
accordance with the instructions noted thereon.
IN THE EVENT NO PROXY CARD IS RECEIVED FROM A PARTICIPANT OR BENEFICIARY OR
A PROXY CARD IS RECEIVED WITHOUT INSTRUCTIONS FOR VOTING, THE TRUSTEE WILL
VOTE THE UNVOTED ALLOCATED SHARES IN THE LESOP IN THE SAME PROPORTION AS THE
LESOP SHARES THAT ARE VOTED BY PARTICIPANTS AND BENEFICIARIES. THE TRUSTEE
WILL VOTE THE UNALLOCATED LESOP SHARES AND ANY UNVOTED RSP PLAN SHARES,
PURSUANT TO THE INSTRUCTIONS OF THE RESPECTIVE ADMINISTRATIVE COMMITTEES OF
THE PLANS, "FOR" THE PROPOSAL LISTED ON THE PROXY CARD AND DESCRIBED HEREIN.
Any RSP Plan or LESOP participant or beneficiary who executes and delivers a
proxy card may revoke it at any time prior to its use by giving written notice
to the Trustee at the following address: The Northern Trust Company,
Attention: Master Trust Administrator, Fifty South La Salle Street, Chicago,
Illinois 60675, or by executing and delivering a duly executed proxy card
bearing a later date. Under the terms of the RSP Plan and the LESOP, only the
Trustee of the plan can vote the shares allocated to the accounts of
participants, even if such participants or their beneficiaries attend the
Annual Meeting in person.
COSTS OF SOLICITATION
The Company will bear the costs of solicitation of proxies, including the
charges and expenses of stock brokerage firms, banks, trust companies and
others for forwarding solicitation material to beneficial owners of stock. In
addition to the use of the mails, proxies may be solicited by telephone,
facsimile, telegraph or personal contact by directors, officers and employees
of the Company without additional compensation. The Company has retained
Corporate Investor Communications, Inc., a proxy solicitation firm, to assist
in the solicitation of proxies at an anticipated cost of approximately $5,000,
plus reasonable out-of-pocket disbursements.
2
<PAGE>
ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)
The Amended and Restated Articles of Incorporation (the "Articles") and the
Bylaws of the Company provide that the Board of Directors shall consist of at
least five members and not more than fifteen members and that the exact number
shall be fixed from time to time by the Board of Directors. The Board of
Directors has set the number of directors of the Company at eleven. The
Articles and the Bylaws of the Company also provide that the Board of
Directors of the Company shall be divided into three classes as nearly equal
in number as possible. The term of office of one of the classes of directors
expires each year, and a new class of directors is elected each year by the
shareholders for a term of three years and until their successors are elected
and qualified.
The Board of Directors has nominated D. Raymond Riddle, Dr. Betty L. Siegel,
Ben J. Tarbutton, Jr. and Felker W. Ward, Jr. to stand for election as
directors at the Annual Meeting. Messrs. Riddle, Tarbutton and Ward and Dr.
Siegel presently are members of the Board of Directors whose terms are
scheduled to expire at the Annual Meeting. Each of the nominees has consented
to serve as a director if elected. If re-elected by the shareholders, Messrs.
Riddle, Tarbutton and Ward and Dr. Siegel will serve a three-year term which
will expire at the time of the Annual Meeting of Shareholders in the year
2001.
Following is certain information as of September 30, 1997 regarding the four
nominees for director and all current directors whose terms of office will
continue after the Annual Meeting. Except as otherwise indicated, all
directors have been engaged in their principal occupations for more than the
past five years.
3
<PAGE>
NOMINEES FOR ELECTION AT THIS MEETING TO TERMS EXPIRING IN THE YEAR 2001:
[PHOTO D. RAYMOND RIDDLE, Retired Chairman of the Board and
APPEARS Chief Executive Officer of National Service Industries,
HERE] Inc. ("National") effective February 1996; Chairman of
the Board and Chief Executive Officer of National from
September 1994 until February 1996; President and Chief
Executive Officer of National from January 1993 until
September 1994; Executive Vice President of Wachovia
Corporation and President and Chief Executive Officer of
Wachovia Bank of Georgia, N.A. and Wachovia Corporation
of Georgia from May 1987 until January 1993; director of
Wachovia Bank, N.A., Atlantic American Corporation,
Equifax, Inc. and Fuqua Enterprises, Inc. Mr. Riddle,
64, has been a director since 1978.
DR. BETTY L. SIEGEL, President of Kennesaw State
[PHOTO University; director of Equifax, Inc., National Service
APPEARS Industries, Inc. and Acordia Benefits of the South, Inc.
HERE] Dr. Siegel, 66, has been a director since 1986.
BEN J. TARBUTTON, JR., Vice President of Sandersville
[PHOTO Railroad Co. Mr. Tarbutton, 67, has been a director
APPEARS since 1983.
HERE[
FELKER W. WARD, JR., President of Ward and Associates,
Inc., an investment banking firm, since January 1988;
[PHOTO Chairman of Pinnacle Investment Advisors, Inc., a wholly
APPEARS owned subsidiary of Ward and Associates, Inc., since
HERE] January 1994; director of Fidelity National Bank and
Abrams Industries, Inc. Mr. Ward, 64, has been a
director since 1988.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE NOMINEES.
----------------
4
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE ANNUAL MEETING IN THE YEAR 1999:
[PHOTO FRANK BARRON, JR., Vice President of Public Affairs of
APPEARS Rome Coca-Cola Bottling Company and previously officer
HERE] and director of seven Coca-Cola Bottling Companies in
Georgia. Mr. Barron, 65, has been a director since 1983.
W. WALDO BRADLEY, Chairman of the Board of Bradley
[PHOTO Plywood Corporation; director of First Union Corporation
APPEARS and Savannah Foods & Industries, Inc. Mr. Bradley is a
HERE] brother-in-law of Mr. Goocher, a named executive officer
(as hereinafter defined). Mr. Bradley, 63, has been a
director since 1991.
L.L. GELLERSTEDT, III, President and Chief Executive
Officer of Beers, Inc. ("Beers"); Chairman and Chief
[PHOTO Executive Officer of Beers Construction Company ("BCC"),
APPEARS a wholly owned subsidiary of Beers, since June 1994;
HERE] President and Chief Executive Officer of BCC from
November 1990 until June 1994; director of ALLTEL
Corporation. Mr. Gellerstedt, 41, has been a director
since 1996.
5
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE ANNUAL MEETING IN THE YEAR 2000:
OTIS A. BRUMBY, JR., Chairman of the Board and Chief
[PHOTO Executive Officer of The Marietta Daily Journal and
APPEARS Neighbor Newspapers, Inc. since October 1993 and
HERE] previously President and Publisher of The Marietta Daily
Journal and Neighbor Newspapers from March 1965 until
October 1993; director of First Union--Georgia. Mr.
Brumby, 57, has been a director since 1990.
DAVID R. JONES, President and Chief Executive Officer of
the Company since its organization in January 1996;
[PHOTO Chairman and Chief Executive Officer of Atlanta Gas
APPEARS Light Company ("AGLC") and of AGL Resources Service
HERE] Company since August 1997; President and Chief Executive
Officer of AGLC from 1988 until August 1997; President
and Chief Executive Officer of AGL Resources Service
Company from its organization in August 1996 until
August 1997 (AGLC and AGL Resources Service Company are
wholly owned subsidiaries of the Company); chairman of
the Board of Directors of the Federal Reserve Bank of
Atlanta. Mr. Jones, 60, has been a director since 1985.
[PHOTO ALBERT G. NORMAN, JR., Partner in the law firm of Long
APPEARS Aldridge & Norman LLP, General Counsel to the Company.
HERE] Mr. Norman, 68, has been a director since 1976.
CHARLES MCKENZIE TAYLOR, Chairman of Taylor & Mathis,
[PHOTO Inc., real estate developers and brokers. Mr. Taylor,
APPEARS 68, has been a director since 1984.
HERE]
6
<PAGE>
BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the full
Board and committees of the Board, consisting of an Executive Committee, an
Audit Committee, a Nominating and Compensation Committee, and a Corporate
Responsibility Committee. During the fiscal year ended September 30, 1997, the
Board of Directors met six times, the Executive Committee met seven times, the
Audit Committee met two times, the Nominating and Compensation Committee met
three times and the Corporate Responsibility Committee met one time. Each
director attended 75% or more of the aggregate of all meetings of the Board of
Directors and all committees of the Board of Directors on which he or she
served during such fiscal year, with the exception of Mr. Bradley who attended
73% of such meetings.
The Executive Committee is composed of Messrs. Jones (Chairman), Barron,
Norman, Riddle, Tarbutton and Ward. The Executive Committee is authorized to
exercise all of the powers of the Board of Directors in the management of the
business and affairs of the Company with the exception of certain actions
specified by the Company's Bylaws and by statute.
The Audit Committee is composed of Messrs. Riddle (Chairman), Bradley,
Brumby, Gellerstedt and Dr. Siegel. The functions of the Audit Committee are
as follows: (i) to consider the choice of the Company's independent public
accountants; (ii) to review the planned scope of the audit and the results
thereon; (iii) to report the results of the independent auditors' examinations
of the financial statements and their opinions and recommendations with
respect to accounting, internal controls and other matters; and (iv) to convey
information between the Board of Directors and the Company's independent
public accountants.
The Nominating and Compensation Committee is composed of Messrs. Tarbutton
(Chairman), Bradley, Brumby, Norman and Taylor. The purpose of the Nominating
and Compensation Committee is as follows: (i) to review the performance of the
senior officers of the Company and to recommend the appropriate compensation
level for all officers of the Company; (ii) to review and recommend any
changes in the Company's various benefit programs; (iii) to review the level
and manner of compensation paid to the members of the Company's Board of
Directors and make recommendations for adjustments, as appropriate; (iv) to
identify and recommend the nominees for election to the Board; and (v) to
administer the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (the
"LTSIP"). The Nominating and Compensation Committee will consider nominees
recommended by shareholders but has not established any formal procedures for
so doing.
The Corporate Responsibility Committee is composed of Messrs. Barron
(Chairman), Gellerstedt, Jones, Taylor, Ward and Dr. Siegel. The Corporate
Responsibility Committee is responsible for the following: (i) making periodic
reviews of all financing plans and pension plans; (ii) identifying and
monitoring trends that could affect the Company's performance and the related
interests of its employees, shareholders, customers and the general public;
and (iii) reviewing and monitoring corporate policy with respect to charitable
giving.
NON-EMPLOYEE DIRECTOR COMPENSATION
Each non-employee director of the Company receives an annual retainer for
services as a director which is paid in accordance with the terms of the AGL
Resources Inc. 1996 Non-Employee Directors Equity Compensation Plan as set
forth in the following paragraph. In addition, non-employee directors receive
$1,000 for attendance at each meeting of the Board and any standing committee
of which he or she is a member. Directors are reimbursed for expenses incurred
in connection with attendance of meetings of the Board and committees. Any
director who is an officer or employee of the Company does not receive any
compensation for his or her services as a director or as a member of a
standing committee of the Board.
1996 NON-EMPLOYEE DIRECTORS EQUITY COMPENSATION PLAN. The Company maintains
the AGL Resources Inc. 1996 Non-Employee Directors Equity Compensation Plan
(the "Directors Plan"), in which all non-employee directors participate. The
Plan provides for an automatic grant to each non-employee director on
7
<PAGE>
the first day of each annual service term of (i) an award of Common Stock
equivalent in fair market value on such date to the $16,000 annual retainer
payable to each director and (ii) a nonqualified stock option to purchase the
same number of shares of Common Stock as are awarded on such date in payment
of the retainer. The per share option exercise price is equal to the fair
market value of the Company's Common Stock on the date of grant of the option.
The stock award may not be sold or transferred until the expiration of six
months from the date of issuance. Directors realize value from option grants
only to the extent that the fair market value of the Common Stock of the
Company on the date of exercise of the option exceeds the fair market value of
the Common Stock on the date of grant.
For the 1997 annual term of service, which began in February following the
1997 Annual Meeting of Shareholders, Messrs. Barron, Bradley, Brumby,
Gellerstedt, Norman, Riddle, Tarbutton, Taylor and Ward and Dr. Siegel were
each granted stock awards for 796 shares, which was calculated by dividing the
$16,000 annual retainer fee by $20.125, the then current fair market value of
the Company's Common Stock. Each of the directors also was granted an option
to purchase 796 shares at $20.125 per share.
DEFERRED COMPENSATION PLAN FOR CORPORATE DIRECTORS. The Company also
maintains the AGL Resources Inc. Deferred Compensation Plan for Corporate
Directors pursuant to which any non-employee director of the Company may elect
to defer fees paid for attendance at Board and committee meetings. Deferred
fees are credited during any calendar year with interest at the rate
applicable to the first auction of 26-week Treasury Bills during the calendar
year.
Generally, a participant will receive payment of his or her benefit under
the plan in a lump sum or in a series of five annual installments, in cash,
beginning after such participant attains age 70 or after the director
otherwise retires from service on the Board of Directors of the Company. The
total amount of the cash payment(s) is determined by the amount of fees
deferred plus the interest accrued thereon. If a participant dies before
receiving full payment of his or her benefit under the plan, the remaining
amount will be paid to the beneficiary designated by the director.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30, 1997
regarding the ownership of Common Stock by each person known to the Company to
be the beneficial owner of more than 5% of the Common Stock of the Company, by
each director and director nominee, by each executive officer named in the
Summary Compensation Table (collectively, the "named executive officers") who
is not a director and by all executive officers and directors as a group,
based on data furnished to the Company. The Company knows of no other
beneficial owner of more than 5% of the outstanding Common Stock of the
Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK
OWNED BENEFICIALLY
NAME (PERCENT OF CLASS) (1)
- ---- ----------------------
<S> <C>
GREATER THAN 5% BENEFICIAL OWNERS:
AGL Resources Inc. Retirement Savings Plus Plan. 4,779,694 (8.4%)
P.O. Box 4569
Atlanta, Georgia 30302
DIRECTORS AND NAMED EXECUTIVE OFFICERS:
Frank Barron, Jr................................ 37,250 (2)
W. Waldo Bradley................................ 5,653 (2)
Otis A. Brumby, Jr.............................. 15,570 (2)
L.L. Gellerstedt, III........................... 4,982 (2)(3)
David R. Jones.................................. 286,694 (2)(3)(4)(5)
Albert G. Norman, Jr............................ 16,451 (2)(3)
D. Raymond Riddle............................... 5,370 (2)
Dr. Betty L. Siegel............................. 5,603 (2)
Ben J. Tarbutton, Jr............................ 7,826 (2)
Charles McKenzie Taylor......................... 7,941 (2)
Felker W. Ward, Jr.............................. 6,658 (2)
Charles W. Bass................................. 133,344 (2)(3)(4)(5)
Thomas H. Benson................................ 123,470 (2)(3)(4)(5)
Robert L. Goocher............................... 116,750 (2)(3)(4)(5)
Richard H. Woodward............................. 82,121 (2)(4)(5)
All executive officers and directors as a group
(19 persons).................................... 1,082,661 (1.9%) (2)(3)(4)(5)
</TABLE>
- --------
(1) As of September 30, 1997, no individual director, director nominee or
executive officer of the Company owned beneficially 1% or more of the
outstanding Common Stock of the Company or any class of Preferred Stock of
AGLC or any interest in any class of Preferred Stock of AGLC. Beneficial
ownership as reported in this Proxy Statement has been determined in
accordance with regulations of the Securities and Exchange Commission (the
"Commission") and includes shares of Common Stock which may be acquired
within 60 days upon the exercise of outstanding stock options. Except as
otherwise indicated in footnote (3) below, all executive officers,
directors and director nominees have sole voting and investment power with
respect to the shares shown.
(2) For the directors, includes 1,685 shares which may be acquired by each of
Messrs. Barron, Bradley, Brumby, Norman, Riddle, Tarbutton, Taylor and
Ward and Dr. Siegel and 1,212 shares which may be acquired by Mr.
Gellerstedt upon exercise of stock options granted pursuant to the
Directors Plan (a total of 16,377 shares).
For the named executive officers, includes shares which may be acquired
upon exercise of stock options granted pursuant to the LTSIP as follows:
Mr. Jones--186,384; Mr. Bass--102,746 shares; Mr. Benson--89,070 shares;
Mr. Goocher--88,224 shares; and Mr. Woodward--61,082 shares.
For all officers and directors as a group, includes an aggregate of 701,497
shares which may be acquired upon the exercise of stock options granted
pursuant to the Directors Plan and the LTSIP.
9
<PAGE>
(3) With regard to Mr. Gellerstedt, the shares shown include 2,500 shares for
which he shares voting and investment power; with regard to Mr. Jones, the
shares shown include 56,669 shares for which he shares voting and
investment power and 1,395 shares which are held of record by the spouse
of Mr. Jones as to which he disclaims beneficial ownership; with regard to
Mr. Norman, the shares shown include 5,008 shares for which he shares
voting and investment power; with regard to Mr. Bass, the shares shown
include 3,891 shares for which he shares voting and investment power; with
regard to Mr. Benson, the shares shown include 13,850 shares for which he
shares voting and investment power; with regard to Mr. Goocher, the shares
shown include 10,775 shares for which he shares voting and investment
power; and with regard to the group, the shares shown include 100,849
shares held with shared voting and investment power and 1,395 shares held
of record by certain spouses of members of the above-referenced group as
to which the respective members of the group disclaim beneficial
ownership.
(4) Includes shares held for the accounts of the above-named persons and the
above-referenced group as participants in the Company's LESOP and RSP Plan
as follows: Mr. Bass--17,162 shares; Mr. Benson--17,596 shares; Mr.
Goocher--14,797 shares; Mr. Jones--33,096 shares; Mr. Woodward--15,697
shares; and the above-referenced group--139,519 shares.
(5) Excludes shares held by the Trust of the AGL Resources Inc. Nonqualified
Savings Plan (the "NSP") for the benefit of the above-named persons and
the above-referenced group as follows: Mr. Bass--1,411 shares;
Mr. Benson--2,080 shares; Mr. Goocher--4,453 shares; Mr. Jones--3,679
shares; Mr. Woodward--578 shares; and the above-referenced group--15,314
shares. Pursuant to the terms of the NSP, such shares are not deemed to be
beneficially owned and, accordingly, are excluded from the shares of
Common Stock shown in the table above. (See footnotes (1) and (6) to
"Table 1: Summary Compensation Table" below.)
10
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
Table 1 summarizes by various categories, for the fiscal years ended
September 30, 1997, 1996 and 1995, the total compensation paid to or accrued
by the Company for the President and Chief Executive Officer of the Company
and each of the other four most highly compensated executive officers of the
Company whose salary and bonus for the fiscal year ended September 30, 1997
exceeded $100,000 (collectively referred to as the "named executive
officers"). For information regarding the various factors considered by the
Nominating and Compensation Committee in recommending the compensation of the
President and Chief Executive Officer of the Company and, generally, the other
executive officers of the Company, see "Nominating and Compensation Committee
Report" below.
TABLE 1: SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------ -------------------------
FISCAL YEAR OTHER RESTRICTED SECURITIES ALL OTHER
ENDED ANNUAL STOCK UNDERLYING COMPEN-
NAME AND PRINCIPAL SEPTEMBER SALARY BONUS COMPENSATION AWARDS OPTIONS SATION
POSITION 30 ($)(1) ($)(2) ($)(3) ($)(4) (#)(5) ($)(6)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DAVID R. JONES 1997 $495,077 $ -0- -- $150,012 49,689 $41,512
President and Chief 1996 474,923 160,800 -- -- 37,161 46,080
Executive Officer 1995 444,423 230,000 $11,750 -- 43,126 33,293
- -------------------------------------------------------------------------------------------------------
CHARLES W. BASS 1997 277,538 26,000 -- 56,994 24,783 19,485
Executive Vice 1996 248,885 83,600 -- -- 20,129 17,069
President and Chief 1995 214,085 67,500 -- -- 21,094 12,745
Operating Officer
- -------------------------------------------------------------------------------------------------------
THOMAS H. BENSON 1997 277,538 26,000 -- 56,994 27,015 20,045
Executive Vice 1996 248,885 83,600 -- -- 20,129 17,497
President; President 1995 214,362 67,500 -- -- 24,510 13,452
and Chief Operating
Officer of Atlanta Gas
Light Company*
- -------------------------------------------------------------------------------------------------------
ROBERT L. GOOCHER 1997 277,538 26,000 -- 56,994 24,783 17,731
Executive Vice 1996 248,885 83,600 -- -- 20,129 15,522
President; President 1995 213,208 67,500 -- -- 21,094 11,884
and Chief Operating
Officer of AGL
Resources Service
Company*
- -------------------------------------------------------------------------------------------------------
RICHARD H. WOODWARD 1997 190,273 17,900 -- 19,481 12,537 12,605
Vice President; 1996 174,496 58,465 -- -- 9,239 12,082
President of AGL 1995 162,962 49,200 -- -- 10,250 10,442
Investments, Inc.*
</TABLE>
- --------
* A wholly owned subsidiary of the Company.
(1) Includes before-tax contributions for the indicated fiscal years made to
the RSP Plan and the NSP.
(2) For fiscal 1997, reflects an individual cash bonus earned pursuant to the
Company's Variable Compensation Plan by each of the named executive
officers other than Mr. Jones. For fiscal 1996 and 1995, reflects a
corporate and individual cash bonus earned pursuant to the Company's
Variable Compensation Plan by each of the named executive officers other
than Mr. Jones. For fiscal 1996, reflects for Mr. Jones a corporate cash
bonus earned. For fiscal 1995, reflects for Mr. Jones a corporate cash
bonus and a bonus award of restricted stock which is not subject to any
vesting restrictions. The dollar value of the restricted stock award is
based on the number of shares of restricted stock multiplied by the fair
market value per share on the date of issuance. (See "Nominating and
Compensation Committee Report" below.)
11
<PAGE>
(3) For fiscal 1995, reflects for Mr. Jones director's fees of $11,750.
Effective January 1, 1995, Mr. Jones no longer receives any compensation
for his services as a director or as a member of a standing committee of
the Board. (See "Non-Employee Director Compensation" above.)
(4) Dollar amounts shown equal the number of shares of restricted stock
multiplied by the fair market value on the date of grant. The number and
value of unvested shares of restricted stock held on September 30, 1997,
based on the fair market value of the Company's Common Stock at September
30, 1997, of $18.9375, was Mr. Jones--7,454 shares ($141,160); Mr. Bass--
2,832 shares ($53,631); Mr. Benson--2,832 shares ($53,631); Mr. Goocher--
2,832 shares ($53,631); and Mr. Woodward--968 shares ($18,331). The shares
of restricted stock awarded to the named executive officers vest over a
period of up to three years. Dividends are paid on all shares of
restricted stock at the same rate as on unrestricted shares.
(5) Includes grants of reload options pursuant to the LTSIP.
(6) All Other Compensation paid during fiscal 1997 includes the following: (i)
Company contributions to the LESOP: Mr. Jones--$1,627; Mr. Bass--$1,627;
Mr. Benson--$1,627; Mr. Goocher--$1,627; and Mr. Woodward--$1,627; (ii)
Company contributions to the RSP Plan: Mr. Jones--$3,200; Mr. Bass--
$5,370; Mr. Benson--$5,370; Mr. Goocher--$5,370; and Mr. Woodward--$4,412;
(iii) Company contributions to the NSP: Mr. Jones--$7,875; Mr. Bass--
$5,370; Mr. Benson--$5,370; Mr. Goocher--$5,370; and Mr. Woodward--$2,455;
and (iv) premiums paid by the Company for life insurance policies, any
proceeds of which are payable to the respective beneficiaries designated
by the named officers: Mr. Jones--$28,810; Mr. Bass--$7,118; Mr. Benson--
$7,678; Mr. Goocher--$5,364; and Mr. Woodward--$4,111.
OPTION GRANTS
Table 2 sets forth information regarding the number and terms of stock
options granted to the named executive officers during the fiscal year ended
September 30, 1997. In addition, in accordance with the rules and regulations
of the Commission, set forth is the present value of each option granted,
calculated using the Black-Scholes option pricing model.
TABLE 2: OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE OR GRANT DATE
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME (#)(1) FISCAL YEAR ($/SH)(2) DATE ($)(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David R. Jones 49,689 9.7% $20.125 2/7/07 $183,849
- -------------------------------------------------------------------------------
Charles W. Bass 24,783 4.9 20.125 2/7/07 91,697
- -------------------------------------------------------------------------------
Thomas H. Benson 2,232 0.4 21.500 2/3/05 9,107
24,783 4.9 20.125 2/7/07 91,697
- -------------------------------------------------------------------------------
Robert L. Goocher 24,783 4.9 20.125 2/7/07 91,697
- -------------------------------------------------------------------------------
Richard H. Woodward 712 0.1 21.500 2/1/01 2,613
2,136 0.4 21.500 2/2/00 7,326
9,689 1.9 20.125 2/7/07 35,849
</TABLE>
- --------
(1) Options were granted to each of the named executive officers pursuant to
the LTSIP and became fully exercisable six months after the date of grant.
Options are subject to early termination upon the occurrence of certain
events related to termination of employment.
12
<PAGE>
(2) The exercise price of options may be paid in cash, by delivery of already
owned shares of Common Stock of the Company or by any other method
approved by the Nominating and Compensation Committee, which administers
the LTSIP. To the extent that the exercise price of an option is paid with
shares of Common Stock of the Company, a "Reload Option" will be granted
to the optionee. A Reload Option is an option granted for the same number
of shares as is exchanged in payment of the exercise price and is subject
to all of the same terms and conditions as the original option except for
the exercise price which is determined on the basis of the fair market
value of the Common Stock of the Company on the date the Reload Option is
granted. One or more successive Reload Options may be granted to an
optionee who pays for the exercise of a Reload Option with shares of
Common Stock of the Company.
(3) These amounts represent the estimated fair value of stock options,
measured at the date of grant using the Black-Scholes Warrant Valuation
Call Option Model. This model assumes no dilution effects and includes the
following underlying assumptions used in developing the grant valuations:
(i) an exercise price equal to the fair market value on the date of grant;
(ii) expected volatility--22.08% (22.19% with respect to the Reload
Options of Messrs. Benson and Woodward); (iii) annual risk free rate of
return (represents the yield on Treasury notes during the month of the
grant with a maturity date corresponding to the contractual term of the
option)--6.42% (6.13% with respect to Mr. Benson's Reload Option and 5.97%
and 5.90% with respect to Mr. Woodward's Reload Options for 712 and 2,136
shares, respectively); and (iv) annual dividend yield as of the date of
grant: 5.37% (5.02% with respect to the Reload Options of Messrs. Benson
and Woodward). The model also assumes a contractual exercise period for
options granted of ten years; provided, however, that with respect to Mr.
Benson's Reload Option to purchase 2,232 shares of Common Stock, an
exercise period of approximately 8.25 years was assumed, and with respect
to Mr. Woodward's Reload Options to purchase 712 and 2,136 shares of
Common Stock, an exercise period of approximately 5.25 years and 4.25
years, respectively, was assumed. The actual value, if any, an officer may
realize will depend on the amount by which the stock price exceeds the
exercise price on the date the option is exercised. Consequently, there is
no assurance the value realized by an officer will be at or near the value
estimated above. These amounts should not be used to predict stock
performance.
OPTION EXERCISES
Table 3 sets forth option exercises by the named executive officers during
the fiscal year ended September 30, 1997, including the aggregate value of
gains on the date of exercise. The table also sets forth (i) the number of
shares covered by options (both exercisable and unexercisable) as of September
30, 1997 and (ii) the respective values for "in-the-money" options, which
represent the positive spread between the exercise price of existing options
and the fair market value of the Company's Common Stock at September 30, 1997.
TABLE 3: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
EXERCISES DURING YEAR FISCAL YEAR END
---------------------------- ------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE END (#) FISCAL YEAR END ($)(1)
NAME EXERCISE (#) REALIZED ($)
------ ----------- ----------- --------------------------- ------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David R. Jones 2,000 $15,250 186,384 -- $242,875 --
- --------------------------------------------------------------------------------------------------------
Charles W. Bass -- -- 102,746 -- 160,555 --
- --------------------------------------------------------------------------------------------------------
Thomas H. Benson 3,000 16,500 89,070 -- 58,774 --
- --------------------------------------------------------------------------------------------------------
Robert L. Goocher 2,288 12,689 88,224 -- 82,222 --
- --------------------------------------------------------------------------------------------------------
Richard H. Woodward 4,332 31,899 61,082 -- 74,366 --
</TABLE>
- --------
(1) Certain exercisable options held by the named executive officers were not
"in-the-money" at September 30, 1997.
13
<PAGE>
RETIREMENT PLAN
Table 4 reflects the estimated annual lifetime benefits calculated on a
straight-life annuity basis and payable under the terms of the AGL Resources
Inc. Retirement Plan (the "Retirement Plan") and the AGL Resources Inc. Excess
Benefit Plan (the "Excess Benefit Plan") (as described below), as currently in
effect, to persons in specified compensation and years of service
classifications upon retirement at age 65. Benefit amounts as reflected in the
table are subject to reductions for a portion of Social Security benefits.
TABLE 4: PENSION PLAN TABLE
<TABLE>
<CAPTION>
3 YEAR AVERAGE
EARNINGS YEARS OF SERVICE
--------------------------------------------------------
20 25 30 35 40 45
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 33,333 $ 41,667 $ 50,000 $ 57,500 $ 65,000 $ 72,500
150,000 50,000 62,500 75,000 86,250 97,500 108,750
200,000 66,667 83,333 100,000 115,000 130,000 145,000
250,000 83,333 104,167 125,000 143,750 162,500 181,250
300,000 100,000 125,000 150,000 172,500 195,000 217,500
350,000 116,667 145,833 175,000 201,250 227,500 253,750
400,000 133,333 166,667 200,000 230,000 260,000 290,000
450,000 150,000 187,500 225,000 258,750 292,500 326,250
500,000 166,667 208,333 250,000 287,500 325,000 362,500
</TABLE>
The Retirement Plan is a qualified defined benefit pension plan which covers
all employees of the Company and its participating affiliate companies (except
leased employees) who have satisfied certain standards as to hours of service
with the Company, who have attained age 21 and who have been employed for one
year. Benefits under the Retirement Plan are based upon length of service with
the Company, with varying provisions for employees who are terminated or take
early, normal or deferred retirement. A participant's benefits also vary
depending upon the participant's earnings for the three consecutive years of
highest compensation during his or her final 60 months of employment with the
Company.
The compensation covered by the Retirement Plan includes generally the base
rate of earnings actually paid to a participant by the Company (up to dollar
limits imposed by the Internal Revenue Service). This amount of compensation
does not include the bonuses or director's fees that are included in the above
Summary Compensation Table. The Retirement Plan also provides, subject to
certain conditions, for the payment of vested benefits of a deceased employee
to his or her spouse during such spouse's lifetime.
The Company makes contributions to the Retirement Plan to fund the benefits
which accrue thereunder. Annual contribution amounts are determined
actuarially. Participant contributions are not permitted.
In addition, the Company maintains an Excess Benefit Plan for its employees,
the purpose of which is to restore pension benefits to employees who are
prevented from receiving their total accrued benefits under the Retirement
Plan because of the maximum benefit limitations imposed on qualified
retirement plans by Sections 415 and 401(a)(17) of the Internal Revenue Code
of 1986, as amended (the "Code"). The Excess Benefit Plan is not funded, but
benefit payments are made directly by the Company. Benefits under the Excess
Benefit Plan are payable in the same form and according to the same general
terms and conditions as benefits under the Retirement Plan. All employees who
participate in the Retirement Plan whose benefits are limited by the
provisions of the Code will receive restoration of benefits under the Excess
Benefit Plan.
The amounts shown in the Summary Compensation Table above do not include the
Company's contributions in connection with the Retirement Plan or the Excess
Benefit Plan for the named executive officers. Such amounts are not and cannot
be readily separated or individually calculated. The Company made a
contribution of approximately $15 million to the Retirement Plan for the plan
year ended June 30, 1997.
As of the plan year ended June 30, 1997, Messrs. Jones, Bass, Benson,
Goocher and Woodward had 37, 27, 27, 25 and 27 years of service, respectively.
14
<PAGE>
The Retirement Plan and the Excess Benefit Plan are administered by or are
under the direction of the Retirement Plan Administrative Committee appointed
by the Board of Directors. Wachovia Bank, N.A., serves as Trustee to the
Retirement Plan.
CHANGE IN CONTROL EMPLOYMENT AGREEMENTS
During fiscal 1996, the Board of Directors approved an Employment Continuity
Program in which each of the named executive officers participates on one of
three tier levels. The purpose of the program is to retain key management
personnel and assure continued productivity of such personnel in the event of
a change in control of the Company.
For purposes of the program, a "change in control" will be deemed to have
occurred in connection with any of the following events: (i) the acquisition
by a person or group of persons of 10% or more of the voting securities of the
Company; (ii) approval by the shareholders of a merger, business combination,
or sale of 50% or more of the Company's assets, the result of which is that
less than 80% of the voting securities of the resulting corporation is owned
by the former shareholders of the Company; or (iii) the failure, during any
period of two years, of incumbent directors to constitute at least a majority
of the Board of Directors of the Company.
Generally, no benefits are provided under the program for any type of
termination prior to the occurrence of a change in control, or for
terminations following a change in control due to death, disability, voluntary
termination (other than the Chief Executive Officer) or any termination for
"cause," which includes failure to perform duties and responsibilities and
fraud or dishonesty.
Upon becoming operational, and depending on the tier level of participation
and on the timing of employment termination, the program provides a severance
benefit of between one and three years of base salary and annual incentive
compensation to participants whose employment is involuntarily terminated
within twelve months following the occurrence of a change in control.
Other benefits provided include the payout of a pro rata bonus for the
portion of the year in which the termination occurs, full vesting of all long-
term incentives, a lump-sum payment of between one and three years of age and
service credits under the Company's pension plan, full vesting and funding of
nonqualified retirement and deferral plan benefits, a one to three year
continuation of health care benefits and life insurance, and outplacement
assistance. The Chief Executive Officer and the Executive Vice Presidents also
will receive payments of legal fees (up to a maximum dollar limit) in
connection with the enforcement of payouts under the program. For all
participants, total severance benefits are limited to the maximum benefit
allowable without triggering excise taxes.
NOMINATING AND COMPENSATION COMMITTEE REPORT
The following report of the Nominating and Compensation Committee (the
"Committee") of the Board of Directors discusses generally its objectives and
policies regarding compensation programs for executives of the Company and
certain of its subsidiaries. The report also specifically discusses the
Committee's bases for compensation for fiscal year 1997 of the Company's
President and Chief Executive Officer, as reported in the Summary Compensation
Table, and generally with respect to all officers. The Committee is composed
entirely of non-employee directors.
In carrying out its responsibility for the executive compensation programs
of the Company, the Committee has adopted the philosophy of rewarding
employees for their contributions to the success of the Company. The Company's
executive compensation programs are based on the following principles:
. Linking a substantial portion of each executive's total compensation to the
achievement of pre-established annual performance goals.
. Maintaining an alignment of the executive's long-term interests with those
of the Company's shareholders by encouraging ownership of the Company's
Common Stock.
. Providing base salary and incentive compensation that is competitive with
other utilities and service and industrial companies of similar
characteristics.
15
<PAGE>
To assist the Committee in performing its function, it is the Company's
practice to have its compensation programs periodically reviewed by an
independent consulting firm to ensure that the various components are
maintained at appropriate and competitive levels and are supportive of the
objectives stated above.
EXECUTIVE COMPENSATION
The compensation program for the Company's officers consists of base salary,
annual incentive compensation, and long-term incentive compensation.
The level of base salary is established by using several factors, including
a performance review of each of the officers by the President and Chief
Executive Officer or by an Executive Vice President of the Company, as
appropriate. Competitive salary data of similar positions at comparable
companies also is reviewed. The base salary for Company officers progresses
based on their experience and positive contribution toward the general
management of the Company. Salaries for officers, however, do not exceed the
average competitive market rate of the position, generally referred to as the
"midpoint."
The annual incentive program for officers (other than the President and
Chief Executive Officer) is set forth in the Company's Variable Compensation
Plan that is reviewed and approved each year by the Committee and the Board of
Directors. The annual incentive program is based on the accomplishment of
individual and corporate performance goals. Individual goals, which are
established at the beginning of the year and approved by the President and
Chief Executive Officer, focus on substantial cost reductions, increasing
revenues, improving the operations of the business units of the Company, and
increasing shareholder value. Pursuant to the guidelines of the Variable
Compensation Plan, if individual performance goals are met or exceeded, an
executive could earn an amount up to 10% of base salary. The individual
performance cash bonus generally is paid in February following attainment of
performance objectives. The individual performance goals for fiscal year 1997
were met for the named executive officers. (See "Table 1--Summary Compensation
Table.")
The corporate performance component of the annual incentive program is based
on the attainment of a fiscal year end earnings per share ("EPS") amount in
excess of the EPS target set by the Board of Directors. The range for
potential awards for 1997 was from 8% to 30% of base salary depending on the
amount by which the EPS target set by the Board was exceeded at fiscal year
end. The EPS target for fiscal year 1997 was not met, and no corporate
performance awards were paid to any of the Company's officers.
The long-term incentive component of the Company's executive compensation
program is based on the LTSIP which provides for the grant of stock options,
stock appreciation rights and awards of restricted stock. The LTSIP was
established to provide the opportunity to increase the ownership of Company
Common Stock among the Company's key decision makers and to create a stronger
alignment between the interests of those executives and the interests of
shareholders. The awards to officers pursuant to the LTSIP are based on common
practices of peer companies and on the decision of the Committee, which is
responsible for the administration of the LTSIP. During fiscal year 1997, the
Committee granted nonqualified stock options equal to 100-175% of the base
salary of the executive at the time of the stock grant. For fiscal year 1997,
each Executive Vice President was granted nonqualified stock options to
purchase Company Common Stock at the fair market value on the date of the
grant equal to 175% of base salary. All other officers were granted
nonqualified options having a fair market value on the date of the grant equal
to 100% of base salary. Additionally, in an effort to bring long-term
compensation levels of the Company's executives in line with competitive
compensation levels and to further align executive interests with shareholder
interests, the Committee awarded shares of restricted stock. Awards for each
Executive Vice President equaled 20% of base salary. All other officers were
awarded restricted shares equal to 10% of base salary. One-sixth of the shares
vests twelve months after the date of issuance of the restricted stock; two-
sixths vests after 24 months; and all remaining shares vest after 36 months.
The portion of shares scheduled to vest after 36 months also is eligible for
accelerated vesting in 1997 and 1998 if the Total Shareholder Return ranking
(stock price appreciation plus dividends) meets or exceeds the 66th percentile
when compared to the Standard & Poors Utility Index. For fiscal year 1997, the
Company's Total Shareholder Return ranking was not at the specified level, and
accelerated vesting did not occur.
16
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
Consistent with the compensation philosophy and principles stated above, the
compensation of the President and Chief Executive Officer of the Company is
competitive and is based on his contribution to the overall success of the
Company. Compensation levels are determined through a comprehensive review of
the competitive pay practices of companies in the energy business. Like the
base salary of other officers of the Company, the salary of the President and
Chief Executive Officer will not exceed the competitive market rate
(midpoint). The President and Chief Executive Officer is not a participant in
the Variable Compensation Plan, but generally the Committee would consider
granting an award to the President and Chief Executive Officer in the event
other officers of the Company received awards under the corporate performance
component of the Variable Compensation Plan. For fiscal year 1997, the EPS
target was not met, and no corporate performance awards were paid to any of
the Company's officers, including Mr. Jones.
The President and Chief Executive Officer is a participant in the LTSIP. The
Committee determines the type and amount of awards to be granted pursuant to
the LTSIP based on competitive pay practices of similar companies. For fiscal
year 1997, the Committee granted Mr. Jones nonqualified stock options equal to
200% of his base salary at the time of the stock grant. The Committee also
awarded Mr. Jones shares of restricted stock equal to 30% of his base salary
with the same vesting schedule described in the preceding section.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993 IMPLICATIONS FOR EXECUTIVE
COMPENSATION
It is the responsibility of the Committee to address the issues raised by
Section 162(m) of the Code. Section 162(m) limits to $1,000,000 the Company's
deduction for compensation paid to certain executive officers of the Company
which does not qualify as "performance-based." In this regard, the Committee
continues to carefully consider the impact of this tax code provision and must
determine whether any actions with respect to this limit should be taken by
the Company. Given the Company's current level of executive compensation, it
is not now necessary to consider this issue. The Committee will continue to
monitor this situation and will take appropriate action if it is warranted in
the future.
Ben J. Tarbutton, Jr., Chairman
W. Waldo Bradley
Otis A. Brumby, Jr.
Albert G. Norman, Jr.
Charles McKenzie Taylor
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Nominating and Compensation Committee is composed of Messrs. Bradley,
Brumby, Norman, Tarbutton and Taylor, none of whom is an officer or employee
of the Company. Mr. Norman is a partner in the law firm of Long Aldridge &
Norman LLP, General Counsel to the Company. For the fiscal year ended
September 30, 1997, the Company paid to Long Aldridge & Norman LLP
approximately $2.9 million for legal services to the Company and its
subsidiaries.
17
<PAGE>
STOCK PERFORMANCE GRAPH
The following line graph presentation compares the cumulative five year
shareholder return on Common Stock of the Company with the cumulative five
year total return of companies in the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500 Index") and the Standard & Poor's Utilities Index
(the "S&P Utilities Index").
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG AGL RESOURCES INC., THE S&P 500 INDEX AND THE S&P UTILITIES INDEX
GRAPH APPEARS HERE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
9/30/92 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97
- ----------------------------------------------------------------------
AGL Resources Inc. $100 $105 $ 91 $122 $128 $134
- ----------------------------------------------------------------------
S&P 500 Index $100 $113 $117 $152 $183 $256
- ----------------------------------------------------------------------
S&P Utilities Index $100 $123 $107 $136 $147 $168
</TABLE>
* Assumes $100 invested on September 30, 1992 in Common Stock of the Company,
the S&P 500 Index and the S&P Utilities Index and also assumes dividend
reinvestment.
18
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any director, executive officer or
person who owns more than ten percent of the Company's Common Stock who failed
to timely file with the Commission a required report under Section 16(a) of
the Securities Exchange Act of 1934. Section 16(a) and regulations of the
Commission thereunder require the Company's executive officers and directors
and persons who own more than ten percent of the Company's Common Stock, as
well as certain affiliates of such persons, to file initial reports of
ownership and changes in ownership of such Common Stock with the Commission
and the Exchange. Executive officers, directors and persons owning more than
ten percent of the Company's Common Stock are required by regulation of the
Commission to furnish the Company with copies of all Section 16(a) forms that
they file. Based solely on its review of the copies of such forms received by
it and written representations that no other reports were required for those
persons, the Company believes that, during the fiscal year ended September 30,
1997, all filing requirements applicable to its executive officers, directors,
and owners of more than ten percent of the Company's Common Stock were
complied with.
INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP, 100 Peachtree Street, Atlanta, Georgia
30303, was the independent auditor for the Company and examined the financial
statements of the Company for the fiscal year ended September 30, 1997. The
Board of Directors intends to continue the services of this firm for the
current fiscal year ending September 30, 1998. A representative of the firm
will be present at the Annual Meeting and will be afforded the opportunity to
make a statement and to respond to appropriate questions.
SHAREHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders should be submitted by certified mail, return receipt
requested, and must be received by the Company at its offices in Atlanta,
Georgia on or before August 25, 1998 to be eligible for inclusion in the
Company's proxy statement and form of proxy relating to that meeting.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Shareholders that
are to be brought before the Annual Meeting. However, if any other matter
should be properly presented for consideration and voting at the Annual
Meeting or any adjournments thereof, it is the intention of the person(s)
named as proxies on the enclosed form(s) of proxy card to vote the shares
represented by all valid proxy cards in accordance with their judgment of what
is in the best interest of the Company.
19
<PAGE>
Revocable Proxy COMMON STOCK
AGL RESOURCES INC.
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1998 ANNUAL MEETING OF
SHAREHOLDERS
The undersigned hereby appoints David R. Jones, Albert G. Norman, Jr., and
Melanie M. Platt, and each of them, proxies, with full power of substitution, to
act for and in the name of the undersigned to vote all shares of Common Stock of
AGL Resources Inc. (the "Company") that the undersigned is entitled to vote at
the 1998 Annual Meeting of Shareholders of the Company, to be held at the
offices of the Company, 303 Peachtree Street, N.E., Atlanta, Georgia, on Friday,
February 6, 1998, at 10:00 a.m., local time, and at any and all adjournments
thereof, as set forth on the reverse side.
The undersigned may elect to withdraw this proxy card at any time prior to its
use by giving written notice to the Corporate Secretary, by executing and
delivering to the Corporate Secretary a duly executed proxy card bearing a later
date, or by appearing at the Annual Meeting and voting in person. The
undersigned hereby revokes any previous proxies with respect to matters covered
by this proxy.
Receipt of the Notice of the Meeting, the accompanying Proxy Statement, and the
Annual Report to Shareholders hereby is acknowledged.
PLEASE COMPLETE, DATE, SIGN ON THE REVERSE SIDE, AND
MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Please mark, date, and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian, or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer or
partner.
HAS YOUR ADDRESS CHANGED? IF SO,
PRINT NEW ADDRESS BELOW: DO YOU HAVE ANY COMMENTS?
- ---------------------------------- ---------------------------------------
- ---------------------------------- ---------------------------------------
- ---------------------------------- ---------------------------------------
<PAGE>
[ ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ------------------------------
AGL RESOURCES INC.
- ------------------------------
COMMON STOCK
Mark box at right if you plan to attend the Annual Meeting [ ]
Mark box at right if comments or an address change has been noted on the reverse
side of this card. [ ]
RECORD DATE SHARES:
PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD. Date
---------------------------
Shareholder sign here Co-owner sign here
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW-LISTED PROPOSAL
1. Elect as directors the four nominees listed below to serve until the Annual
Meeting of Shareholders in the year 2001 and until their successors are
elected and qualified:
D. RAYMOND RIDDLE, DR. BETTY FOR WITH- FOR ALL
L. SIEGEL, BEN J. TARBUTTON, JR., ALL HOLD EXCEPT*
AND FELKER W. WARD, JR. ALL
[ ] [ ] [ ]
* INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME FROM
THE LIST ABOVE.
When properly executed, this proxy card will be voted as directed. IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY CARD WILL BE VOTED "FOR" THE PROPOSAL
LISTED ON THIS PROXY CARD.
In their discretion, the proxies are authorized to vote upon such other business
as properly may come before the Annual Meeting and any and all adjournments
thereof.
If any other business is presented at the Annual Meeting, this proxy card will
be voted by the proxies in their best judgment. At the present time, the Board
of Directors knows of no other business to be presented at the Annual Meeting.
- -------------------------------------------------------------------------------
DETACH CARD DETACH CARD
AGL RESOURCES INC.
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
Dear Shareholder:
YOUR VOTE IS IMPORTANT, AND YOU ARE STRONGLY ENCOURAGED TO EXERCISE
YOUR RIGHT TO VOTE YOUR SHARES. ON BEHALF OF THE BOARD OF DIRECTORS,
WE URGE YOU TO SIGN, DATE, AND RETURN THIS PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE, EVEN IF YOU CURRENTLY PLAN
TO ATTEND THE ANNUAL MEETING.
Thank you in advance for your prompt cooperation.
Sincerely,
AGL Resources Inc.
<PAGE>
Revocable Proxy RETIREMENT SAVINGS PLUS PLAN
AND
LEVERAGED EMPLOYEE STOCK OWNERSHIP PLAN
AGL RESOURCES INC.
303 PEACHTREE STREET, N.E., ATLANTA, GEORGIA 30308
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1998 ANNUAL MEETING OF
SHAREHOLDERS
The undersigned hereby appoints The Northern Trust Company, which acts as
Trustee for the AGL Resources Inc. Retirement Savings Plus Plan (the "RSP Plan")
and the AGL Resources Inc. Leveraged Employee Stock Ownership Plan (the
"LESOP"), as proxy, to act for and in the name of the undersigned, to vote all
shares of Common Stock of AGL Resources Inc. (the "Company") that have been
allocated to the account of the undersigned pursuant to the RSP Plan and/or the
LESOP, at the 1998 Annual Meeting of Shareholders of the Company, to be held at
the offices of the Company, 303 Peachtree Street, N.E., Atlanta, Georgia, on
Friday, February 6, 1998, at 10:00 a.m., local time, and at any and all
adjournments thereof, as set forth on the reverse side.
The undersigned may elect to withdraw this proxy card at any time prior to its
use by giving written notice to the proxy or by executing and delivering to the
proxy a duly executed proxy card bearing a later date. Under the terms of the
RSP Plan and the LESOP, only the Trustee of each plan can vote the shares
allocated to the accounts of the participants, even if such participants or
their beneficiaries attend the Annual Meeting in person. The undersigned hereby
revokes any previous proxies with respect to matters covered by this proxy.
Receipt of the Notice of the Meeting, the accompanying Proxy Statement, and the
Annual Report to Shareholders hereby is acknowledged.
+------------------------------------------------------------------------------+
| PLEASE COMPLETE, DATE, SIGN ON THE REVERSE SIDE, |
| AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. |
+------------------------------------------------------------------------------+
Please mark, date, and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer or
partner.
HAS YOUR ADDRESS CHANGED? IF SO, DO YOU HAVE ANY COMMENTS?
PRINT NEW ADDRESS BELOW:
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ----------------------------------
AGL RESOURCES INC.
- ----------------------------------
RSP PLAN AND LESOP
Mark box at right if you plan to attend the Annual Meeting? [ ]
Mark box at right if comments or an address change has been noted on the reverse
side of this card. [ ]
RECORD DATE SHARES:
PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD. Date
----------------------
Shareholder sign here Co-owner sign here
- -------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW-LISTED PROPOSAL
1. Elect as directors the four nominees listed below to serve until the Annual
Meeting of Shareholders in the year 2001 and until their successors are
elected and qualified:
D. Raymond Riddle, Dr. Betty FOR WITH- FOR ALL
L. Siegel, Ben J. Tarbutton, Jr., ALL HOLD EXCEPT*
and Felker W. Ward, Jr. ALL
[ ] [ ] [ ]
* INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME FROM
THE LIST ABOVE.
When properly executed, this proxy card will be voted as directed. IF NO PROXY
CARD IS RECEIVED OR A PROXY CARD IS RECEIVED WITHOUT INSTRUCTIONS FOR VOTING,
THE PROXY WILL VOTE THE UNVOTED ALLOCATED SHARES IN THE LESOP IN THE SAME
PROPORTION AS THE LESOP SHARES THAT ARE VOTED BY PARTICIPANTS AND BENEFICIARIES.
THE PROXY WILL VOTE THE UNALLOCATED LESOP SHARES AND ANY UNVOTED RSP PLAN
SHARES, PURSUANT TO THE INSTRUCTIONS OF THE RESPECTIVE ADMINISTRATIVE COMMITTEES
OF THE PLANS, "FOR" THE PROPOSAL LISTED ON THIS PROXY CARD.
In its discretion, the proxy is authorized to vote upon such other business as
properly may come before the Annual Meeting and any and all adjournments
thereof.
If any other business is presented at the Annual Meeting, this proxy card will
be voted by the proxy in its best judgment. At the present time, the Board of
Directors knows of no other business to be presented at the Annual Meeting. In
the event you also own shares otherwise than pursuant to the RSP Plan and the
LESOP, you must return the proxy card relating to such other shares in
accordance with the instructions set forth thereon.
DETACH CARD DETACH CARD
AGL RESOURCES INC.
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
Dear Shareholder:
YOUR VOTE IS IMPORTANT, AND YOU ARE STRONGLY ENCOURAGED TO EXERCISE
YOUR RIGHT TO VOTE YOUR SHARES. ON BEHALF OF THE BOARD OF DIRECTORS,
WE URGE YOU TO SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
Thank you in advance for your prompt cooperation.
Sincerely,
AGL Resources Inc.
