Exhibit 10.1.af
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Annual Team Performance Incentive (ATPI) Plan
2002
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Table of Contents
Page No.
Glossary of terms
2
What is the ATPI Plan?
3
What is the performance measurement period?
3
Who is eligible to participate
3
Who is ineligible to participate
4
How does the ATPI Plan work?
4
What are the Performance Measures?
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Corporate Performance (EPS) Goals
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Business Unit Performance Goals
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IPOs
4
How is my ATPI award calculated?
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Base Pay
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Target Award
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Award Weighting Factors
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Performance Score
7
ATPI examples
9
What is the timing for payment of ATPI awards?
13
What about new hires during the measurement period?
13
What about a change in status during the measurement period?
13
What is the effect of the ATPI award on other benefits
14
Can the company amend or terminate the ATPI Plan?
14
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Glossary of Terms
ATPI Plan
Annual Team Performance Incentive Plan
Award weighting factors
The weight assigned to each of the Performance Measures. The weight of all your Performance Measures equals 100%.
Business units
The three designated business units for purposes of the ATPI Plan are: distribution operations, AGL Networks, and AGL Services Company.
Capital
Capital includes all budgeted capital expenditures and, as applicable, Manufactured Gas Plant (MGP) expenditures for each business unit.
EBIT
A designated business unit earnings before interest and taxes equals EBIT.
EPS
Earnings per share
IPOs
Individual Performance Objectives
Operating margin less direct operating and maintenance expense
Revenue minus cost of goods sold equals operating margin. Direct operating and maintenance expenses exclude allocated costs, depreciation and taxes other than income taxes and include capitalized administrative and general cost.
Performance measurement period
The performance measurement period for the current ATPI Plan is October 1, 2001 through December 31, 2002.
Performance Measures
Performance Measures are the criteria used to determine ATPI awards. Performance Measures include corporate performance (EPS) goals for the company, business unit financial performance goals and, for certain employees, IPOs.
Performance score
Represents the level of corporate, business unit and IPO performance attained at the end of the performance measurement period. The performance score is expressed as a percentage ranging from 0% to 150%.
Target award
The potential amount of compensation that you have the opportunity to earn as incentive compensation if the total performance score for the Performance Measures is 100%. A target award is expressed as a percentage of base pay.
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Q.
What is the ATPI Plan?
A.
You are eligible to participate in the Annual Team Performance Incentive (ATPI) Plan, an important component of AGL Resources' Total Rewards philosophy. The ATPI Plan pays cash awards to eligible employees if established Performance Measures are met or exceeded during the performance measurement period. Performance Measures include the company's financial performance goals and business unit goals and, for certain employees, individual performance objectives.
The ATPI Plan is designed to reward employees for:
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Adding sustainable shareholder value;
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Increasing and improving company and business unit operating efficiencies; and
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Improving customer service.
Awards under this plan must be earned and should not be viewed as an entitlement or guarantee of employment. The company must meet its corporate financial performance goal in order for any payment to be made, irrespective of the level of business unit achievement or individual performance achievement.
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What is the performance measurement period?
A.
The performance measurement period for the current ATPI Plan is October 1, 2001 through December 31, 2002.
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Who is eligible to participate?
A.
You are eligible to participate if you satisfy each of the following conditions:
Full-time employee of AGL Resources Inc. (AGLR) or one of the following subsidiaries:
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Atlanta Gas Light Company (AGLC);
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AGL Networks, LLC (AGLN);
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AGL Services Company (AGSC);
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Chattanooga Gas Company (CGC); or
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Virginia Natural Gas, Inc. (VNG)
Employed on or before September 30, 2002;
Active status as an employee or on an approved paid leave of absence when ATPI award checks are distributed; and
Signed IPOs if you are at position grade E4 or above.
Note: If you are a VNG bargaining unit employee, you are eligible to participate in the ATPI Plan effective May 6, 2002. Your award under the ATPI Plan, if any, will be prorated based on the number of months in the ATPI Plan measurement period that you were eligible to participate.
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Who is ineligible to participate?
A.
Seasonal, part-time, co-op, interns, and contract employees are not eligible to participate. Sequent Energy Management employees are not eligible to participate. In addition, employees who are hired after September 30, 2002, and those who retire, resign or are discharged on or before the date any awards are paid are not eligible for payment of an award (see page 13).
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How does the ATPI Plan work?
A.
At the beginning of the measurement period, Performance Measures are established. For the company and each of the business units, Performance Measures consist of financial performance goals. For individuals at position grade E4 and above, Performance Measures also include IPOs.
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What are the Performance Measures?
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Corporate Performance (EPS) Goal
Corporate performance is measured against an earnings per share (EPS) goal approved by the Board of Directors for the 2002 performance measurement period (October 1, 2001 through December 31, 2002). The EPS goal , which differs from management's publicly stated EPS expectations for future periods, is an aggressive earnings goal, set at a level that is intended to provide an incentive for employees to devote extraordinary efforts to improve the company's performance and, in fact, to exceed both management's EPS estimates and the top end of the range of analysts' EPS expectations. You should therefore expect EPS goals for the ATPI Plan to exceed management's EPS expectations that are set forth from time to time in the company's publicly available earnings guidance. At the end of the measurement period (December 31, 2002), the corporate ATPI payout (the company performance score) is expresse d as a percentage and can range from 0% to 150%.
The following chart shows the approved EPS goals for the ATPI Plan and corresponding ATPI payouts during the 2002 performance measurement period (October 1, 2002 through December 31, 2002).
EPS Goal
Company ATPI Payout
$2.19
50%
$2.23
100%
$2.26
125%
$2.28
150%
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The company must meet its minimum EPS goal for the ATPI Plan before any payments under the ATPI Plan will be made. In addition, in measuring the company's performance, the Board of Directors and the CEO have the discretion to remove the effects of all or a portion of one-time items from reported EPS.
Business Unit Performance Goals
We currently have three designated business units for purposes of the ATPI Plan:
Distribution Operations
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If you are an employee of AGLC, CGC, o ...
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