MANAGEMENT CONTINUITY PROTECTION AGREEMENT
Exhibit
10.5a
This AGREEMENT is made as of the ___
day of _______________, 20__, between THE LACLEDE GROUP, INC., a Missouri
corporation (the “Company”), and ___________________________________ (the
“Executive”).
WHEREAS, upon recommendation of its
Chairman, the Board of Directors of the Company has adopted a Management
Continuity Protection Plan (the “Plan”) for all of the officers of the Company
and of Laclede Gas Company as well as certain other officers of the Company
subsidiaries as determined from time to time.
WHEREAS, the Plan was adopted in the
best interests of the Company and its stockholders for the purpose of
reinforcing and encouraging the continued attention and dedication of the Plan
Participants, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of any future change in control of the Company; and
WHEREAS, as contemplated by the Plan,
the Executive and the Company are executing this Management Continuity
Protection Agreement; and
WHEREAS, subject only to the
“Termination Benefits” (as hereinafter defined) payable hereunder following
certain “Employment Terminations” (as hereinafter defined) subsequent to a
“Change in Control” (as defined in the Plan), the execution of this Agreement by
the Executive and the Company does not give rise to a claim by the Executive
that the Executive is entitled to continued employment with the
Company.
NOW, THEREFORE, in consideration of the
mutual agreements contained herein, the Company and the Executive agree as
follows:
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1. Term of
Agreement. This Agreement shall terminate, except to the
extent that any obligation of the Company hereunder remains unpaid as of such
time, upon the earlier of: (a) the effective date of the Executive’s (i)
termination other than for Cause (as defined in the Plan), (ii) resignation, or
(iii) retirement with respect to the Company; provided, that, an event in
(i)- (iii) correlates with a “separation from service” under Final Treasury
Regulation Section 1.409A-1(h) (an event in (i)- (iii) hereinafter called an
“Employment Termination”), if such Employment Termination occurs prior to a
Change in Control; (b) the effective date of the Executive’s Termination for
Cause (as defined in the Plan); (c) the date the Executive ceases to serve as an
officer of the Company or any of its Affiliates prior to a Change in Control;
(d) forty-two (42) months after a Change in Control, if the Executive’s
Employment Termination has not yet occurred as of the end of such forty-two (42)
months; or (e) the date the Company’s Board of Directors terminates the Plan if
and only if such termination is prior to a Change in Control. For
purposes of this Agreement, employment with the Company shall also include
employment with any successor of the Company (or with any Affiliate of the
Company, or Affiliate of such successor) following a Change in
Control. No benefits shall be payable hereunder unless there shall
have been a Change in Control as defined in the Plan, and Executive’s Employment
Termination shall thereafter have occurred in accordance with Section 3
hereof.
2. Termination Following Change
in Control. If a Change in Control shall have occurred, the
Executive shall be entitled to the benefits provided in Section 3 hereof upon
the subsequent Employment Termination of the Executive.
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3. Benefits upon Employment
Termination. (a) If, after a Change in Control shall have
occurred, there is a subsequent Employment Termination of the Executive, prior
to the expiration of the forty-two (42) month period specified in Section 1(b)
hereof, the Executive shall, subject to the provisions of Sections 3(b), 3(c)
and 4 hereof, be entitled to receive, upon the effective date of such Employment
Termination (or such other time as provided below and/or in the Plan in the
event of a separation of service of a “specified employee”), a non-discounted
lump sum amount (hereinafter called the “Termination Benefits”) equal to the
average annual compensation (as referenced in the Plan) of the Executive for the
five (5) year period (or if not employed for such five (5) year period, such
shorter period) immediately preceding the Executive’s Employment Termination
with the Company (as described in Section 280G(b)(3)(A) of the Internal Revenue
Code of 1986, as amended (the “Code”)), multiplied by 2.00.1 Notwithstanding any provision
herein to the contrary, if the Company determines that the Executive is a
“specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and
regulations and other guidance issued thereunder, then payment of such amount
(or portion thereof) shall commence no earlier than the first day of the seventh
month following the month Executive’s “separation from service” (as referenced
below) occurs (with the first such payment being a lump sum equal to the
aggregate amount the Executive would have received during such period if no such
payment delay had been imposed, together with interest on such delayed amount
during the period of such restriction at a rate, per annum, equal to the
applicable federal short-term rate (compounded monthly) in effect
under
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Section
1274(d) of the Code at the time of such separation from service). For
purposes of this Agreement, an “Employment Termination” shall only have occurred
if a “separation from service” has occurred as defined in Final Treasury
Regulation 1.409A-1(h), including the default presumptions thereof.
(b) In
the event the Executive remains employed with the Company (which
for
this purpose, shall include employment with the Company, any of its Affiliates,
its successor or an Affiliate of its successor) subsequent to a Change in
Control beyond six (6) months following such Change in Control, the Termination
Benefits shall be reduced by 1/36 for each month beyond six months that the
Executive is so employed subsequent to a Change in Control.2
(c) Notwithstanding
the provisions of paragraph (a) and (b) of this Section 3 above, in no event
shall the Termination Benefits be greater than an amount equal to the average
monthly compensation of the Executive for the five (5) year period (or such
shorter period, as set forth above) immediately preceding cessation of
employment with the Company referred to in paragraph (a) of this Section 3
above, multiplied by the number of months remaining from such date of cessation
of employment until the date upon which the Executive would have been sixty-five
(65) years of age.
4. Limitation Upon Termination
Benefits Caused by Tax Implications.
In
the event that any payment or benefit received or to be received by the
Executive in connection with a Change in Control, or the Executive’s Employment
Termination, including all amounts payable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company (all of
the Termination Benefits, together
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with
all of such other payments or benefits being hereinafter called the “Total
Payments”), would not be deductible as a result of Section 280G of the Code, or
would trigger the payment of an additional excise tax by the Executive under
Section 4999 of the Code, the Termination Benefits (or such other Total Payments
to the extent necessary on a pro-rata basis) shall be reduced until no portion
of the Total Payments is rendered non-deductible under Section 280G of the Code
or is subject to the additional excise tax of Section 4999 of the Code, or the
Termination Benefits are reduced to zero. Parachute payments and/or
any cutback amount, and any other determination with respect to Code Section
280G shall be determined by the Plan Administrator in good faith.
5. Non-exclusivity of
Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit, bonus, incentive,
or other plan or program provided by the Company and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any other agreements with the
Company. Amounts that are vested benefits or that the Executive is
otherwise entitled to receive under any plan or program of the Company shall be
payable in accordance with the terms of such plan or program.
6. Right to Terminate
Employment. The Company expressly confirms and agrees that it
has entered into this Agreement and has assumed the obligations imposed on the
Company hereby in order to induce the Executive to continue employment with the
Company and acknowledges that the Executive is relying upon this Agreement in
such capacity. Notwithstanding the foregoing, the Company or the
Executive may terminate the employment of the Executive at any time, subject to
the Company’s
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providing
the benefits specified under this Agreement (including, without limitation,
those benefits referred to in Sections 3 and 5 hereof) in accordance with the
terms hereof.
7. Heirs, Successors and
Assigns. This Agreement shall: (a) inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives, executors,
administrators, heirs, devisees and legatees; and (b) be binding on the
successors and assigns of the Company.
8. Severability. If
any provision or aspect of this Agreement shall be held to be invalid, illegal
or unenforceable: (a) the validity, legality and enforceability of the remaining
provisions or aspects of this Agreement shall not be in any way affected or
impaired thereby; and (b) to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent manifested by
the provision or aspect held invalid, illegal or unenforceable.
9. Miscellaneous.
(a) This Agreement shall be
governed by and construed in accordance with the laws of the State of Missouri,
without regard to choice of law principles. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified other than by a
written agreement executed by the parties hereto or by their respective
successors and legal representatives.
(b) For the purposes of this
Agreement, notices, demands or other communications necessitated by the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States Post Office Registered
Mail, return receipt requested, postage prepaid and addressed
as
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follows: to
the Executive, ___________________________________, 000 Xxxxx Xxxxxx,
Xx. Xxxxx, Xxxxxxxx 00000; to the Company, The Laclede Group, Inc., Attention:
President, 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000; or to such other address
as any party may have furnished to the other in writing in accordance therewith,
except that notices of change of address shall be effective only upon
receipt.
(c) This Agreement has been
authorized by the Board of Directors of the Company. It has not been
submitted to a shareholder vote of the Company or its parent company, nor is
such a shareholder vote contemplated or required. However, if, prior
to a Change in Control, the shareholders of the Company or its parent company
should adopt a shareholder proposal to reject part or all of the provisions of
this Agreement, then the Company shall have the right unilaterally to modify
this Agreement to the extent necessary to comply with such shareholder
vote.
(d) This Agreement (and the
Plan, as hereby expressly incorporated herein) contains the entire understanding
of the parties hereto with respect to the subject matter hereof.
(e) The Company may withhold
from any amounts payable under this Agreement such federal, state or local taxes
as shall be required to be withheld pursuant to any applicable law or
regulation.
(f) Notwithstanding anything
hereinabove, the Plan shall be incorporated by reference into this Agreement,
and any inconsistency between the Plan and this Agreement shall be construed in
favor of the Plan.
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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
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THE
LACLEDE GROUP, INC.
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By:
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“Company”
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“Executive”
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