SECOND AMENDMENT TO THE AGL RESOURCES INC. 1996 NON-EMPLOYEE DIRECTORS EQUITY COMPENSATION PLAN

 

This Second Amendment to the AGL Resources Inc. 1996 Non-Employee Directors Equity Compensation Plan (the “Plan”), is made and entered into this 2nd day of May, 2007, by AGL Resources Inc. (the “Company”).

 

W I T N E S S E T H:

WHEREAS, the Company adopted the Plan for the purposes set forth therein; and

 

WHEREAS, pursuant to Section 11 of the Plan, the Board of Directors of the Company has the right to amend the Plan with respect to certain matters; and

 

WHEREAS, the Board of Directors has approved and authorized this Amendment to the Plan;

 

NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended, effective as of the date hereof, in the following particulars:

 

1.

Section 9(d) of the Plan is hereby amended, effective as of May 2, 2007, by deleting that section in its entirety and substituting in lieu thereof the following:

“(d)

Medium and Time of Payment.  An Optionee must pay the full exercise price of an Option at the time of exercise by one of the following forms of payment: (i) by cash or check, (ii) by tendering unrestricted shares of Common Stock that have a Fair Market Value as of the exercise date equal to the exercise price, (iii) in a broker-assisted cashless exercise, (iv) by a net exercise, whereby the Company shall retain from the Option that number of underlying shares having a Fair Market Value on the date of exercise equal to some or all of the exercise price, or (v) in any combination of the above forms or any other form of payment permitted by the Company.  A tender of shares of Common Stock to pay the exercise price of an Option may be done either by attestation or by the delivery of a certificate or certificates for shares duly endorsed for transfer to the Company, and, if required, with medallion level signature guaranteed by a member firm of a national stock exchange, by a national or state bank, or by the Company’s credit union (or guaranteed or notarized in such other manner as the Company’s transfer agent may require).”

2.

Section 10 of the Plan is hereby amended, effective as of May 2, 2007, by deleting that section in its entirety and substituting in lieu thereof the following:

10.           Changes in Capital Structure

(a)           Mandatory Adjustments.  In the event of a nonreciprocal transaction between the Company and its shareholders that causes the per share value of the shares of Common Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the authorization limits under Section 5 shall be adjusted proportionately, and the Board shall make such adjustments to the Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.  Action by the Board may include: (i) adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Options; (iii) adjustment of the exercise price of outstanding Options or the measure to be used to determine the amount of the benefit payable pursuant to an award; and (iv) any other adjustments that the Board determines to be equitable.  Without limiting the foregoing, in the event of a subdivision of the outstanding Common Stock (stock-split), a declaration of a dividend payable in shares of Common Stock, or a combination or consolidation of the outstanding Common Stock into a lesser number of shares of Common Stock, the authorization limits under Section 5 shall automatically be adjusted proportionately, and the shares of Common Stock then subject to each Option shall automatically, without the necessity for any additional action by the Board, be adjusted proportionately without any change in the aggregate purchase price therefor.

(b)           Discretionary Adjustments.  Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including, without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described in Section 10(a)), the Board may, in its sole discretion, provide (i) that Options will be settled in cash rather than Common Stock, (ii) that Options will expire after a designated period of time to the extent not then exercised, (iii) that Options will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Options may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Common Stock, as of a specified date associated with the transaction, over the exercise price of the Option, or (v) any combination of the foregoing.  The Board’s determination need not be uniform and may be different for different Non-Employee Directors whether or not such Non-Employee Directors are  similarly situated.

(c)           General.  Any discretionary adjustments made pursuant to this Section 10 shall be subject to the provisions of Section 11.

3.

Except as specifically set forth herein, the terms of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Company has caused this Second Amendment to the Plan to be executed by its duly authorized officer as of the date first above written.

AGL RESOURCES INC.

By:           /s/ Melanie M. Platt                                           

                 Melanie M. Platt, Senior Vice President