The Laclede Group Performance Contingent Restricted Stock Award Agreement
Exhibit
10.2
The
Laclede Group
2006
Equity Incentive Plan
Performance
Contingent
THIS
AGREEMENT, made as of this 5th day
of December 2007, between The Laclede Group, Inc. (the “Company”) and «Name»
(the “Participant”).
Pursuant
to the terms of the Company’s
2006 Equity Incentive Plan, as approved by shareholders in January 2006,
(the “Plan”), this Award allows the Participant to earn up to [insert maximum]
shares of Common Stock conditioned upon the execution and delivery by the
Company and the Participant of this Agreement setting forth the terms and
conditions applicable to such award.
NOW,
THEREFORE, in consideration of the
mutual covenants set forth in this Agreement, the parties hereto hereby agree
as
follows:
1.
Award
of
Restricted Stock. Pursuant and subject to the terms and
conditions set forth herein and in the Plan, the Company awards to the
Participant, effective as of the Award Date, a maximum of «Grant»
(«Spelled_Out») shares of Common Stock of the Company, subject to the terms,
conditions and restrictions described in this Agreement and in the Plan (the
“Performance Contingent Restricted Stock”). Of the Performance
Contingent Restricted Stock,
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·
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[insert
target number] shares (“Performance Restricted Shares”) are issued on the
Award Date and Participant shall have all of the rights of a shareholder
of the Company with respect to such shares, including the right to
vote
and to receive dividends, but such shares remain subject to the
performance contingencies in Section 5 and non-transferability
restrictions in Section 7 of this
Agreement
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·
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[insert
delta to get to high performance number] shares (“Potential Performance
Restricted Shares”) represent shares, all or some of which the Participant
may earn if performance exceeds Target, but as to which Participant
shall
have no rights of a shareholder. Such rights shall only be
obtained, if at all, once performance during the Performance Period
has
exceeded Target, the Board has certified to such attainment, and
one or
more Potential Performance Restricted Shares are delivered to the
Participant.
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2.
Award
Date. The Award Date of the Performance Contingent Restricted
Stock awarded under this Agreement is December 5, 2007.
3.
Incorporation
of
Plan. All terms, conditions and restrictions of the Plan are
incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Plan and this
Agreement, the terms and conditions of the Plan, as interpreted by the
Administrator, shall govern. All capitalized terms used herein, but
not otherwise defined, shall have the meaning given to such terms in the
Plan.
4.
Restrictions
and
Conditions. Except as otherwise provided in this Agreement,
Participant shall forfeit any and all right to the Performance Contingent
Restricted Stock upon Participant’s termination of employment with the Company
and its subsidiaries for any reason prior to the end of the Performance
Period.
5.
Lapse
of
Restrictions. The Participant accepts this Performance
Contingent Restricted Stock Award and agrees that the restrictions relative
to
such Award shall lapse only following the conclusion of the Performance Period
and only to the extent that one or more of the Performance Contingencies set
forth in Appendix A have been met or exceeded. If performance on
neither Performance Contingency has been achieved at or above Threshold, then
all Performance Contingent Restricted Stock is forfeited. If
performance on one or more of the Performance Contingencies has been achieved
between the Threshold and Target or Target and High Performance levels of
performance, the Administrator shall interpolate for performance between the
applicable levels and shall determine the number of shares of Performance
Contingent Restricted Stock as to which the restrictions shall
lapse. Because the Company cannot issue fractional shares, the
Administrator will round to the nearest whole number of shares of Performance
Contingent Restricted Stock in such interpolations.
The
Award will be subject to forfeiture
of up to 50% of the shares earned based upon performance relative to the
Performance Contingencies, as determined by the Administrator in its sole
discretion, if the Company’s Total Shareholder Return, as defined in Appendix A,
for the Performance Period is in the bottom quartile relative to the defined
comparator group identified by the Administrator.
Vesting
of any Performance Restricted
Shares as well as the issuance, if any, of Potential Performance Restricted
Shares under this Agreement shall occur on the business day immediately
following the date of the certification by the Board of Directors
(“Certification Date”) of (a) the satisfaction of one or more of the Performance
Contingencies and (b) the number of shares of Performance Contingent Restricted
Stock to be vested or issued; provided, that
no Performance
Contingent Restricted Stock shall vest or be issued if Participant is terminated
with or without Cause or if the Participant voluntarily terminates employment
with the Company and all of its subsidiaries prior to the Certification
Date. Any Potential Performance Restricted Shares that the Board
certifies are earned will be issued and delivered to the Participant in no
event
later than March 15 of the year following the end of the Performance
Period. Any Performance Restricted Shares or Potential Performance
Restricted Shares as to which any or all of the respective Performance
Contingencies has not been satisfied shall be forfeited.
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Notwithstanding
the foregoing,
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(i)
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In
the event of a Change in Control, the Performance Contingent Restricted
Stock shall be deemed earned at Target prorated based on the number
of
months in the Performance Period to the date of the Change in Control
and
all restrictions as to such number of shares shall lapse if:
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| (a) | the Award has not otherwise been forfeited and |
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(b)
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the
successor or surviving corporation (or parent thereof) does not assume
this Award or replace it with a comparable award, provided further
that if
the Award is assumed or replaced, such assumed or replaced Award
shall
provide that the restrictions shall lapse if Participant is involuntarily
terminated without Cause within 24 months of the Change in Control
(a
“Change in Control Termination”);
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(ii)
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if
a Participant leaves the employment of the Company and its subsidiaries
due to death, Disability or retirement (including early retirement
and
disability retirement) prior to the end of the Performance Period,
the
Participant will be eligible to earn a prorated Award, as the
Administrator may determine, based on the number of full months as
a
Participant during the Performance Period and will be eligible to
receive
the underlying shares if the Performance Contingencies are satisfied
and
the restrictions lapse as outlined
above.
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6.
How Shares
are Held. The Performance Restricted Shares shall be held by a
Company custodian until all of the restrictions have lapsed and all applicable
terms and conditions have been met. The Company shall deliver to the
Participant the number of whole shares of Performance Restricted Shares as
to
which the Administrator has determined the restrictions have lapsed as provided
in Section 5. Potential Performance Restricted Shares, when earned,
shall be issued and delivered as provided in Section 5.
7.
Shares
Non-Transferable. The Performance Contingent Restricted Stock
shall not be transferable by Participant and may not be, sold, assigned,
disposed of, or pledged or hypothecated as collateral for a loan or as security
for performance of any obligation or for any other purpose until, with respect
to the Performance Restricted Shares, after the restrictions have lapsed as
provided in Section 5 and, with respect to the Potential Performance Restricted
Shares, after such shares have been issued and delivered to the
Participant.
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8.
No Right
to
Continued Employment. Nothing in this Agreement shall confer
on the Participant any right to continuance of employment by the Company or
a
subsidiary, nor shall it interfere in any way with the right of Participant’s
employer to terminate Participant’s employment at any time.
9.
Tax
Withholding and Tax Election. The Company shall not be
obligated to deliver any shares of Performance Contingent Restricted Stock
until
Participant pays to the Company in cash, or any other form of property
acceptable to the Company, the amount required to be withheld for any federal,
state or local income, FICA or other taxes of any kind with respect to such
shares. The Participant may, by notice to the Company, elect to have
such withholding satisfied by a reduction of the number of whole shares
otherwise so deliverable, such reduction to be calculated based on the Fair
Market Value of the Common Stock on the date the restrictions lapse as provided
in Section 5. The Company and its subsidiaries shall, to the extent
permitted by law, have the right to deduct such taxes, from any payment of
any
kind otherwise due to Participant. Until the restrictions have lapsed
as provided in Section 5, any dividends paid relative to the Performance
Restricted Shares shall be treated as compensation and subject to tax
withholdings in accordance with tax laws then in effect.
The
Participant may, but is not
required to, elect to apply the rules of Section 83(b) of the Internal Revenue
Code, as amended, (“Code”) to the issuance of Performance Restricted Shares that
is subject to a substantial risk of forfeiture. If the Participant
makes an affirmative election under Section 83(b) of the Code, the Participant
must file such election within 30 days after the date of this Agreement with
the
Internal Revenue Service and notify the Company within 30 days after making
such
election.
10.
Confidential
Information and Restrictions on Soliciting Employees. Notwithstanding
any
provision of this Agreement to the contrary, the Participant shall pay to the
Company the Fair Market Value of the Performance Contingent Restricted Stock
vested and issued to Participant under this Award if, during the period
beginning on the date hereof and ending eighteen months following the date
the
Participant’s employment with the Company and its subsidiaries terminates
(provided that such termination is other than a Change in Control Termination),
the Participant: (1) discloses Confidential Information, as defined below,
to
any person not employed by the Company or any of its subsidiaries or not engaged
to render services to the Company or any of its subsidiaries; or (2) Solicits
Employees, as defined below. Fair Market Value shall be calculated on
the date of the first violation of this Section 10.
For
purposes of this Section 10,
“Confidential Information” means
information concerning the
Company, its
subsidiaries and
their
business that is not generally known
outside the Company, and includes (A) trade secrets; (B) intellectual
property; (C) methods of operation and processes; (D) information
regarding present and/or future products, developments, processes and
systems;
(E) information on customers or potential customers, including customers’
names, sales records, prices, and other terms of sales and cost information;
(F) personnel data; (G) business plans, marketing plans,
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financial
data and projections; and
(H) information received in confidence from third parties. This provision
shall not
preclude the Participant from use or disclosure of information known generally
to the public other than by his or her disclosure of such information or of
information not considered confidential by persons engaged in the business
conducted by the Company or subsidiary or from disclosure required by law or
court order.
“Solicits
Employees” means the
Participant’s direct or indirect hire of, solicit to hire, or attempt to induce
(or Participant’s assisting of any third party to hire, solicit or attempt to
induce) any employee of the Company or a subsidiary (who is an employee of
the
Company or a subsidiary as of the time of such hire or solicitation or attempt
to hire) or any former employee of the Company or a subsidiary (who was employed
by the Company or a subsidiary within the 12-month period immediately preceding
the date of such hire or solicitation or attempt to hire) to leave the
employment of the Company or a subsidiary.
11.
Integration. This
Agreement, and the other documents referred to herein or delivered pursuant
hereto which form a part hereof, contain the entire understanding of the parties
with respect to its subject matter. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein. This Agreement, including without limitation the Plan,
supersedes all prior agreements and understandings between the parties with
respect to its subject matter and may only be amended by mutual written consent
of the parties.
12.
Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri, without regard
to
the provisions governing conflict of laws.
13.
Compliance
with Laws and Regulations. The obligation
of the Company to deliver shares of Common Stock under this Award shall be
subject to all applicable federal and state laws, rules and regulations and
to
such approvals by any government or regulatory agency as may be
required.
14.
Participant
Acknowledgment. By accepting these Awards, the Participant
acknowledges receipt of a copy of the Plan, and acknowledges that all decisions,
determinations and interpretations of the Administrator in respect of the Plan
and this Agreement shall be final and conclusive.
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In
addition, the Participant expressly
acknowledges that violation by the Participant of Section 10 of
this Agreement will obligate the Participant to pay to the Company the Fair
Market Value of the Performance Contingent Restricted Stock that becomes
vested or is issued pursuant to Section 5.
| The Laclede Group, Inc. | |
| By: |
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X.
X.
Xxxxxx
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| Title: | Chairman of the Board, President and Chief | |||
| Executive Officer | ||||
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«Name»
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Appendix
A to Stock Award to
«Name»
Performance
Period. The “Performance Period” for this Award shall be the
period beginning October 1, 2007 and ending September 30, 2010.
Performance
Contingencies. The “Performance Contingencies” for this Award
include two performance measures: EPS Growth and Dividend Growth as
specified below:
EPS
Growth – EPS Growth is measured as the average of the annual
earnings per share of Common Stock for the Company’s fiscal years 2008, 2009 and
2010. The Threshold, Target, and High Performance levels of
performance and performance contingent restricted stock (PCRS) as to which
restrictions may lapse are as follows:
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Threshold
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Target
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High
Performance
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Level
of Performance
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Average
of $ per share or above
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Average
of $ per share or above
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Average
of $ per share or above
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 70%]
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[2/3
of PCRS in grant x 70%]
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[#
of PCRS in grant x 70%]
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Dividend
Growth – Dividend Growth is measured as the total dividends per
share declared on the Company’s common stock in fiscal year 2010. The
Threshold, Target and High Performance levels of performance and PCRS as to
which restrictions may lapse are as follows:
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Threshold
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Target
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High
Performance
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Level
of Performance
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Dividends
declared of $ per share or above
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Dividends
declared of $ per share or above
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Dividends
declared of $ per share or above
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 30%]
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[2/3
of PCRS in grant x 30%]
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[#
of PCRS in grant x 30%]
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Total
Shareholder Return for the Company or for a comparator company shall be
calculated as follows:
| Average share price for the 7/1/10 – 9/30/10 quarter | |||
| + | value of reinvested dividends | ||
| = | Total end of performance period value | ||
| – | average share price for the 7/1/07 – 9/30/07 quarter | ||
| = | Total value created in performance period | ||
| ÷ | average share price for the 7/1/07 – 9/30/07 quarter | ||
| = | Total Shareholder Return |
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Illustration: If
a Participant received an award of 150 shares of Performance Contingent
Restricted Stock with 100 shares being Performance Restricted Shares and 50
shares being Potential Performance Restricted Shares and if the Administrator
determines that the Company attained Target Performance on the EPS Performance
Contingency, midway between Target and High Performance on the Dividend Growth
Performance Contingency, and TSR exceeded the 50th
percentile of the comparator group, then upon the Board’s certification of such
performance the 100 Performance Restricted Shares would vest and 8 shares of
the
50 Potential Performance Restricted Shares would be issued and delivered to
the
Participant.
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