Description of Annual Incentive Compensation Arrangement For Douglas N. Schantz

Exhibit 10.1.ai







Annual Incentive Arrangement for Douglas N. Schantz



During 2006, at the direction of the Compensation and Management Development Committee of the Board of Directors (the "C&MD Committee") of AGL Resources Inc. (the "Company"), management adopted an annual incentive arrangement (the " Schantz Annual Incentive") for the benefit of Douglas N. Schantz, President, Sequent Energy Management, LP ("Sequent"). Generally, the Schantz Annual Incentive is based upon Company EPS, Sequent corporate performance and his individual performance in leading the Sequent business. Sequent's performance is measured by its earnings before interest and taxes (EBIT) against expectations ...