The Laclede Group Performance Contingent Restricted Stock Award Agreement
Exhibit
10.4
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 Xxxxxxx X.
Xxxxxx (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 15,000 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 15,000 (fifteen
thousand) 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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10,000
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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5,000
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.
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.
2
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 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 | ||||
| Xxxxxxx X. Xxxxxx | ||||
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Appendix
A to Stock Award to
Xxxxxxx
X. Xxxxxx
Performance
Period. The “Performance Period” for this Award shall be the period
beginning October 1, 2007
and
ending
September 30, 2009.
Performance
Contingencies. The “Performance Contingencies” for this Award
include three performance
measures: LER
Expansion, Restructure Propane
Storage and Succession Management as specified below:
1.
LER
Expansion. 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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Develop
and present
by
7/31/08
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Implement
and
submit
by
early FY ‘09
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$
. earnings by end of FY ‘09
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 50%]
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[2/3
of PCRS in grant x 50%]
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[#
of PCRS in grant x 50%]
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2.
Propane
Operation. 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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by
6/30/08
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Obtain
develop
and
submit
by
early FY ’09
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by
end of FY ’09.
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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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3.
Sucession
Management. 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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Develop
plan to manage succession with specific developmental activities
by
9/30/08
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Substantial
progress toward implementation of plan by 9/30/09
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Direct
and oversee
through
FY ‘09
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 20%]
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[2/3
of PCRS in grant x 20%]
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[#
of PCRS in grant x 20%]
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