1998 Severance Plan For Officers

AGL RESOURCES INC.


1998 SEVERANCE PLAN FOR OFFICERS


THIS DOCUMENT CONSTITUTES THE OFFICIAL PLAN DOCUMENT
AS WELL AS THE SUMMARY PLAN DESCRIPTION OF THIS PLAN.


1998


AGL RESOURCES INC.
1998 SEVERANCE PLAN FOR OFFICERS


TABLE OF CONTENTS


Page


I. DEFINITIONS..............................................................1
1.1 "Affiliate"..................................................1
1.2 "Base Pay"...................................................1
1.3 "Code".......................................................1
1.4 "Company"....................................................1
1.5 "ERISA"......................................................1
1.6 "Officer"....................................................1
1.7 "Participant"................................................1
1.8 "Plan".......................................................1
1.9 "Plan Administrator".........................................1
1.10 "Separation".................................................1
1.11 "Separation Benefits"........................................2
1.12 "Termination of Employment"..................................2


II. SEPARATION BENEFITS...................................................2
2.1 Notification of Separation...................................2
2.2 Eligibility for Separation Benefits..........................2
2.3 Amount and Duration of Separation Benefits...................2
(a) Salary Continuation.................................2
(b) Vacation............................................2
(c) Executive Allowance Fund............................2
(d) Automobile. .......................................2
(e) Employee Benefits...................................3
(i) Medical and Dental Insurance Coverage......3
(ii) Life Insurance.............................3
(iii) GRIP Life Insurance........................3
(iv) Accidental Death & Dismemberment Insurance.3
(v) Dependent Life Insurance...................3
(vi) Short-Term Disability and Long-Term
Disability Insurance.......................3
(vii) Flexible Benefits Plan.....................3
(viii) AGL Resources Inc. Retirement Plan.........3
(ix) AGL Resources Inc. Retirement Savings
Plus Plan and Nonqualified Savings Plan....4
(x) AGL Resources Inc. Leveraged Employee
Stock Ownership Plan.......................4
(xi) Survivor Support and Survivor Income Plan..4
(xii) Employee Assistance Plan...................4
(f) Outplacement Services...............................4
(g) Stock Options and Restricted Stock..................4


III. RESTRICTIVE COVENANTS AND GENERAL RELEASE.............................4
3.1 Consideration for Separation Benefits........................4
(a) Covenant Not to Compete.............................4
(b) Nondisclosure and Confidentiality...................5
(c) Nonsolicitation.....................................5
(d) General Release.....................................5


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3.2 Failure of Officer to Comply.................................6


IV. ADMINISTRATION OF PLAN................................................6
4.1 Control and Administration...................................6
4.2 Procedure for Review of Denial of Benefits...................6


V. ERISA RIGHTS..........................................................6


VI. GENERAL INFORMATION...................................................7 VII. MISCELLANEOUS.........................................................8
7.1 Amendment or Termination.....................................8
7.2 Miscellaneous................................................8
7.3 Validity.....................................................8
7.4 Plan Exclusive Source of Rights..............................8


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AGL RESOURCES INC.
1998 SEVERANCE PLAN FOR OFFICERS


This 1998 SEVERANCE PLAN FOR OFFICERS is hereby established effective
as of May 1, 1998, pursuant to the authorization of the Board of Directors
of AGL RESOURCES INC., a Georgia corporation (the "Company").


WHEREAS, the Company is implementing certain initiatives during the
calendar year 1998 to effect a reorganization of management of the Company
in order to achieve greater efficiency and effectiveness; and


WHEREAS, as a result of the reorganization, a number of officers will
be displaced; and


WHEREAS, the Company desires to provide assistance to the officers who
are displaced as a result of this reorganization in the form of certain
severance benefits;


NOW, THEREFORE, the Company hereby adopts the following Plan:


I. DEFINITIONS


For purposes of this Plan, the following terms, when used with an
initial capital letter, shall have the meanings set forth below unless a
different meaning plainly is required by the context.


1.1 "Affiliate" shall mean any company, partnership, organization or
other entity that is a member of the same controlled group of corporations
(within the meaning of Code Sections 414(b), (c), (m) or (o)) as the
Company.


1.2 "Base Pay" shall mean an Office's base pay per week at the time
of his Termination of Employment, excluding any incentive or bonus plan
payments.


1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.


1.4 "Company" shall mean AGL Resources Inc.


1.5 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.


1.6 "Officer" shall mean an elected corporate officer of the Company
or any of its Affiliates (including the President of Chattanooga Gas
Company, but specifically excluding David R. Jones).


1.7 "Participant" shall mean any Officer who receives notice of his
Separation from the Company and becomes eligible for the Separation
Benefits under the Plan.


1.8 "Plan" shall mean this AGL Resources Inc.1998 Severance Plan for
Officers, which consists of this document and any written amendments thereto.


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1.9 "Plan Administrator" shall mean the Vice President of Human
Resources of the Company or any other officer as designated by the
Compan's President and Chief Executive Officer.


1.10 "Separation" shall mean the termination of an Officer's
employment by the Company as a result of: (a) the elimination of the
Officer's position; (b) a reorganization of the Company; or (c) changing
Company needs, which shall not include discharge for performance problems,
cause or similar reasons.


1.11 "Separation Benefits" shall mean the benefits to which an Officer
is entitled under Article II of this Plan upon his Termination of
Employment.


1.12 "Termination of Employment" shall mean the termination of an
Officer's employment with the Company due to a Separation. Such Termination
of Employment shall be deemed to have occurred on the last day worked.


II. SEPARATION BENEFITS


2.1 Notification of Separation. Upon his Termination of Employment due
to Separation, an Officer shall receive advance notice in writing of the
effective date of his Termination of Employment (the "date of Termination
of Employment").


2.2 Eligibility for Separation Benefits. An Officer whose employment
by the Company is terminated due to a Termination of Employment is eligible
for Separation Benefits unless the Officer voluntarily terminates
employment with the Company, declines substantially equivalent employment,
as determined by the Company's President and Chief Executive Officer, with
the Company or one of its Affiliates, or, in connection with the sale or
transfer of any portion of the Company's business, is offered or begins
employment with the buyer or transferee. In order to become eligible to
receive benefits under the Plan, the Officer must enter into a Separation
Agreement between himself and the Company, which shall include an agreement
to the terms of Article III hereof.


2.3 Amount and Duration of Separation Benefits. Unless otherwise
specified in his Separation Agreement, upon his Termination of Employment,
an eligible Officer shall be eligible to receive the following:


(a) Salary Continuation. The Officer's Base Pay shall continue to be
paid by the Company (or the employing Affiliate of the Company) for a
period of twelve (12) months following the date of Termination of
Employment. The salary continuation shall be paid on a regular payroll
basis. The Plan Administrator shall provide that payments shall be mailed
to the last known home mailing address of the affected Officers. Any
payment of salary continuation to an Officer shall be subject to normal
withholding rules for state, local and federal income taxes and Social
Security taxes. Amounts payable as salary continuation shall be reduced by
any amounts received by the Officer under workers' compensation insurance
or long-term disability insurance during the period in which the Officer
would be eligible for payment of salary continuation.


(b) Vacation. At the Officer's election, with the Company's approval,
the Officer shall receive payment for any accrued and unused vacation days
accrued through the date of the notice of his Termination of Employment in
the form of a single sum payment made as soon as practicable after the
Office's Termination of Employment. If such an election is not made or
approved, the Office's date of Termination of Employment shall be deemed
to be the date at the end of the period of accrued vacation.


(c) Executive Allowance Fund. The Officer shall be entitled to
continued use of the full amount of his Executive Allowance Fund account
for a twelve-month period following his Termination of


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Employment (with amounts prorated for any partial year). The Officer shall
be required to reimburse the Company for any expenses incurred by the
Officer in excess of his Executive Allowance for any year or partial year.
Any unused amount of the 1999 account shall be reimbursed to the Officer in
cash at the end of the twelve- month period.


(d) Automobile. Any Officer who is leasing an automobile through the
Company's Executive Allowance Fund as of his date of termination may elect
(i) to personally assume the lease payments as of the date of termination,
(ii) return the automobile to the Company for other Company use as of the
date of termination, or (iii) continue to pay the lease payments through
his Executive Allowance Fund account through the 12-month period of EAF
continuation and at the end thereof, either personally assume the lease
payments or return the automobile to the Company for other Company use.


(e) Employee Benefits. Unless otherwise stated below or in the
Officer's Separation Agreement, the Officer's participation in any employee
benefit plan or payroll policy of the Company or its Affiliates shall cease
as of the date of the Officer's Termination of Employment.


(i) Medical and Dental Insurance Coverage. The Officer shall be
eligible to continue to participate in the Company's medical and
dental insurance coverages during the period of salary continuation.
Upon the end of the Office's salary continuation period, he (and his
covered dependents) shall become eligible to elect continuation
coverage under the Company's medical and dental insurance plan for up
to six (6) months. During the period of salary continuation, the
Officer (and his covered dependents) shall pay the same premium for
coverages as active employees (and their covered dependents) pay for
such coverages; provided, that upon the termination of such period,
the Officer (and his covered dependents) shall be subject to the full
COBRA continuation coverage premiums for the following six months.
(The 12-month period of continuation coverage during salary
continuation at Company-subsidized premium rates shall offset the
normal 18 months of COBRA continuation coverage, so that only six
months of the COBRA continuation period will be available after salary
continuation ends.)


(ii) Life Insurance. The Office's elections with regard to the
amount of life insurance coverage shall continue during his period of
payment of salary continuation. Conversion privileges shall be
available to the Officer within a reasonable period of time (and
within the provisions of the life insurance contracts) after his
period of salary continuation ends.


(iii) GRIP Life Insurance. The Company shall pay a prorated
portion of the Officer's premium for coverage under the GRIP plan for
1999 based on the number of months during 1999 for which the Officer
receives salary continuation payments.


(iv) Accidental Death & Dismemberment Insurance. Coverage under
the Company's AD&D policies shall cease upon the Officer's date of
Termination of Employment.


(v) Dependent Life Insurance. Coverage on the life of any
dependent of the Officer under the Company's policies and plans shall
cease upon the date that the Officer's salary continuation payments
cease. Conversion privileges may apply if applicable under the
insurance contracts.


(vi) Short-Term Disability and Long-Term Disability Insurance.
Coverage under the Company's Short-Term Disability Plan and Long-Term
Disability Plan shall cease upon the Officer's date of Termination of
Employment.


(vii) Flexible Benefits Plan. Allocation of Flex Dollars to the
Participant or his accounts in the Flexible Benefits Plan shall cease
at the end of the payroll period following the date of


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Termination of Employment. Otherwise, participation in the Company's
Flexible Benefits Plan, including the Healthcare and Dependent Day
Care Reimbursement Plans, shall cease on the date that the Officer's
salary continuation payments cease. At that time, the Officer may
elect continuation coverage under the Healthcare Reimbursement Plan.
If continuation coverage is elected and the Officer continues to make
contributions, he may continue to submit claims for reimbursement of
eligible expenses incurred after his salary continuation period. The
Officer may continue to submit claims for reimbursement for eligible
dependent care expenses through the end of calendar year 1999, if he
contributed to the Dependent Day Care Reimbursement Account in 1999.


(viii) AGL Resources Inc. Retirement Plan. Upon the date of the
Officer's Termination of Employment, he ceases to accrue years of
service under the Retirement Plan. If the Officer was vested (i.e.,
had at least five years of service) at the time of his Termination of
Employment, he will be eligible to receive retirement payments under
the Retirement Plan upon reaching retirement age (as early as age 55).
If the Officer was less than age 55 at the date of his Termination of
Employment, for purposes of calculating his accrued benefit under the
Retirement Plan, he shall be considered to be age 55 as of that date.
The additional benefit (i.e., the difference between this calculation
(assuming age 55) and the actual calculation of accrued benefits under
the Retirement Plan) shall be paid from the general assets of the
Company. The amount of this additional benefit shall be paid to the
Officer in a single sum present value payment at the end of his salary
continuation period.


(ix) AGL Resources Inc. Retirement Savings Plus Plan and
Nonqualified Savings Plan. Upon the date of the Officer's Termination
of Employment, he shall cease to participate in the RSP. The Officer's
account in the RSP shall continue to be invested pursuant to his
direction until distribution. As soon as practicable after the
Officer's Termination of Employment, the Officer's total account in
the RSP will be payable to him. The Officer may continue to
participate in the NSP through the period of salary continuation.


(x) AGL Resources Inc. Leveraged Employee Stock Ownership Plan.
The Company does not anticipate making any further contributions to
the LESOP. The Officer shall be eligible to rece ...