Exhibit-10.21
SEVERANCE BENEFITS AGREEMENT
This Severance Benefits Agreement (the "Agreement") is made and entered
into as of the 31st day of July, 2000 (the "Effective Date") between Laclede
Gas Company, a Missouri corporation ("Laclede" or the "Company"), and
Xxxxxxx X. Xxxxxx ("Executive");
WITNESSETH:
WHEREAS, Executive is currently, and has for a number of years been,
employed by Laclede, most recently as Chairman of the Board, President and
Chief Executive Officer; and
WHEREAS, Laclede's Board of Directors (the "Board") recognizes that
Executive's diligence, conscientiousness and management expertise have
contributed to the growth and success of Laclede over the past several
years; and
WHEREAS, Executive is willing to continue at the pleasure of Laclede,
provided he is assured of certain additional benefits should he be
terminated without Cause (as defined in Section 2(c) of this Agreement) by
the Company or should he resign for Good Reason (as defined in Section 2(b)
of this Agreement) and provided further that he receive further additional
benefits should he terminate his employment for any reason or be terminated
by the Company without Cause following a Change in Control.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of Executive, including the availability of his advice and
counsel notwithstanding the possibility, threat, or occurrence of a Change
in Control of the Company, and to induce Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and Executive agree as follows:
1. Establishment, Term, and Purposes.
(a) This Agreement shall commence on the Effective Date and
shall continue in effect until March 31, 2004, or such later date to which
the Agreement may be extended by the parties hereto (herein the "Term").
(b) However, in the event a Change in Control occurs during
the Term, this Agreement will remain in effect for the longer of: (i) Fifty-
four (54) months beyond the month in which such Change in Control occurred;
or (ii) until all obligations of the Company hereunder have been fulfilled,
and until all benefits required hereunder have been paid to Executive.
(c) This Agreement, during its Term, shall supercede the
current Management Continuity Protection Plan and Agreement between Laclede
and Executive dated as of December 1, 1990, as amended as of December 1,
1997. The provisions of this Agreement shall take precedence over any
inconsistent provision of any Company plan with respect to Executive or any
agreement between the Company and Executive.
(d) Notwithstanding any other provision of this Agreement,
either the Company or Executive may terminate the employment of Executive at
any time. Such termination shall result in the payments and other benefits
provided in this Agreement.
2. Change in Control, Good Reason, Cause, Monthly Base Salary
Defined. For the purpose of this Agreement:
(a) "Change in Control" shall mean:
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(i) The purchase or other acquisition (other than from
Laclede) by any person, entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Exchange
Act") (excluding, for this purpose, Laclede or its subsidiaries or any
employee benefit plan of Laclede or its subsidiaries), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either Laclede's then outstanding shares of common
stock or the combined voting power of Laclede's then outstanding voting
securities entitled to vote generally in the election of directors;
(ii) Individual members of the Board of Directors, as of
January 27, 2000 (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to January 27, 2000 whose election, or
nomination for election by the Company's shareholders, was approved by the
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, as a member of the Incumbent Board, any such
individual whose initial election to office occurs as a result of either an
actual or threatened election contest (as such term is used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a party
other than the Board of Directors of Laclede; or
(iii) Approval by the shareholders of Laclede of a
reorganization, merger or consolidation, in each case, with respect to which
persons who were the shareholders of Laclede immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than 50% of the surviving entity's then outstanding shares of common
stock or the surviving entity's combined voting power entitled to vote
generally in the election of directors, or of a liquidation or dissolution
of Laclede or of the sale of all or substantially all of the assets of
Laclede. In making this computation as to any Laclede shareholder who was
also an equity owner in any other party to such reorganization, merger, or
consolidation prior to consummating such transaction, only the common stock
or voting power relating to such shareholder's equity interests in Laclede
shall be counted towards the 50% threshold in the prior sentence.
(b) "Good Reason" shall mean, with respect to the termination
of Executive's employment with Laclede:
(i) the assignment without Executive's written consent
of any duties inconsistent with his positions, duties, responsibilities and
status with Laclede, or a change in his reporting responsibilities, titles
or offices, as in effect on the date hereof, or any removal of him from or
any failure to re-elect him to any of such positions, except in connection
with the termination of Executive's employment for disability, retirement,
or Cause or as a result of his death; provided, however, that this
subparagraph shall only apply to Executive's positions, duties,
responsibilities and statuses as Chairman and Chief Executive Officer, and
not as President;
(ii) a reduction by Laclede in Executive's Monthly Base
Salary (as defined in Section 2(d) of this Agreement) as in effect on the
date hereof or as the same may be increased from time to time;
(iii) a failure by Laclede to continue any bonus plans in
which Executive is presently entitled to participate as the same may be
modified from time to time with respect to all participants in such plan, or
a failure by Laclede to continue Executive as a participant in such bonus
plans on at least the same basis as he presently participates in accordance
with such plans as so amended;
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(iv) Laclede's requiring Executive, without his written
consent, to be based anywhere other than within fifty (50) miles of his
present office location, except for required travel on Laclede's business to
an extent substantially consistent with present business travel obligations;
(v) the failure by Laclede to continue in effect any of
the following benefit plans:
(A) Vacation and sick pay in accordance with the
established vacation and sick pay plans of the Company now in effect;
(B) The current Laclede Gas Company Supplemental
Retirement Benefit Plan;
(C) The Senior Officers' Life Insurance Plan;
(D) Employees' Retirement Plan of Laclede Gas
Company (Management Employees);
(E) Employees' Health Insurance Plan;
(F) Laclede Gas Company Dental Insurance Plan
(Management Employees);
(G) The Deferred Income Plan II for Directors
and Selected Executives;
(H) the Incentive Compensation Plan;
or substantially similar and equivalent plans and all other employee benefit
and fringe benefit plans currently maintained, (other than the Management
Continuity Protection Plan and agreement) or hereafter adopted, by Laclede
or substantially similar and equivalent plans, as such plans may be amended
or terminated from time to time, in the same manner as such plans apply to
officers and senior executives of Laclede of comparable or lesser position
generally, or the taking of any action by Laclede which would adversely
affect Executive's participant in, or materially reduce his benefits under,
any of such plans;
(vi) the failure by Laclede to provide Executive with
the number of paid vacation days to which he was then entitled in accordance
with Laclede's normal vacation policy in effect on the Effective Date;
(vii) Laclede fails to comply with any material provision
of this Agreement, which failure is not remedied within thirty (30) days
after receipt by Laclede of written notice from Executive; or
(viii) the failure by Laclede to obtain Executive's
consent to an assignment of this Agreement or to obtain the assumption of
the obligation to perform this Agreement by any successor, as required by
Section 10 hereof.
Prior to a Change in Control, if one of the events (i) through (viii) that
constitute Good Reason occurs and is continuing, Executive shall have ninety
(90) days after such occurrence to terminate his employment with Laclede for
such Good Reason. If Executive fails to terminate his employment with
Laclede during such period, Executive may not thereafter use the occurrence
of such event (but may use the occurrence of any other event subsequent
thereto that would constitute Good Reason) as a basis for a termination for
Good Reason for purposes of this Agreement.
(c) "Cause" shall mean, with respect to the termination by a
duly authorized action of the Board of Executive's employment with Laclede:
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(i) Willful and continued insubordination and failure
by Executive to perform his duties as assigned by the Board (other than any
such failure resulting from incapacity due to physical or mental illness)
after a demand for substantial performance has been delivered by the Board
of Directors, which specifically identifies the manner in which it is
believed that Executive has not substantially performed his duties; or
(ii) Willful engagement by Executive in misconduct that
is materially injurious to Laclede. For purposes of this paragraph, no act,
or failure to act, on Executive's part shall be considered willful unless
done, or omitted to be done, by him not in good faith and without reasonable
belief that his action or omission was in the best interest of Laclede.
(d) "Monthly Base Salary" for purposes of this Agreement
shall mean Executive's then current annual base salary divided as equal as
practicable by twelve (12).
3. Effect of Termination of Executive's Employment Prior to a
Change in Control. At any time prior to a Change in Control, Laclede may
terminate Executive's employment with Laclede without Cause or Executive may
voluntarily terminate his employment with Good Reason, whereupon Executive
shall be entitled to receive the following benefits:
(a) Executive shall be entitled to payment of an amount, in a
non-discounted lump sum, equal to 18 times Executive's Monthly Base Salary.
(b) At Executive's sole election made within ninety (90)
calendar days after the date of termination of Executive's employment with
Laclede, Executive may elect to receive a lump sum payment pursuant to this
Agreement equal to the actuarially equivalent present value of the pension
benefits payable under the Employees' Retirement Plan of Laclede Gas Company
(Management Employees) and the Laclede Gas Company Supplemental Retirement
Benefit Plan, computed as if he had Early or Normal Retirement benefits
available to him under the terms of such plans, based on: (i) Early
Retirement Age for all purposes under the plans being deemed to be the
actual age of Executive at the date of termination of Executive's employment
with Laclede and (ii) a reduction by a discount factor of 1.4% per annum
(prorated for partial years on the basis of a 365-day year) for each year
that Executive's actual age upon the date of termination of Executive's
employment with Laclede is less than age 60. In all other respects, the
computation of the lump sum benefit to be paid shall be determined in
accordance with the Employees' Retirement Plan of Laclede Gas Company
(Management Employees) and the Laclede Gas Company Supplemental Retirement
Benefit Plan, including the definition of Actuarial Equivalent. If
Executive does not make a timely election to be paid the lump sum payment as
set forth in this Section 3(b), Executive shall be paid on a periodic basis
in accordance with the terms for such payments as set forth in the
Employees' Retirement Plan of Laclede Gas Company (Management Employees) and
the Laclede Gas Company Supplemental Retirement Benefit Plan. To the extent
that any such payments set forth in this Section 3(b) cannot be made
pursuant to the terms of the Employees' Retirement Plan of Laclede Gas
Company (Management Employees), such payments shall be made under the
Laclede Gas Company Supplemental Retirement Benefit Plan.
(c) At Executive's sole election made within ninety (90)
calendar days after the date of termination of Executive's employment with
Laclede, Executive may elect to receive a lump sum payment pursuant to the
actuarially equivalent present value of vested post-retirement benefits
(based upon Laclede's dividend rate on the date of termination of
Executive's employment) payable to Executive under Laclede's Incentive
Compensation Plan at the date of termination of Executive's employment with
Laclede; provided, however: (i) that all benefits under Laclede's Incentive
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Compensation Plan that are fully vested prior to the date of termination of
Executive's employment with Laclede will be treated as fully vested for
purposes of this Section 3(c) and Laclede's Incentive Compensation Plan, and
(ii) that any benefits under Laclede's Incentive Compensation Plan that are
not fully vested prior to the date of termination of Executive's employment
with Laclede but have been granted to Executive three (3) years or more
prior to such date of termination of employment will be treated as fully
vested for purposes of this Section 3(c) and Laclede's Incentive
Compensation Plan and all other benefits will be treated as vested only to
the extent that such benefits were vested as of the date of termination of
Executive's employment with Laclede. If Executive does not make a timely
election to be paid the lump sum payment as set forth in this Section 3(c),
Executive shall be paid on a periodic basis all benefits vested and deemed
to be vested under this Section 3(c) and Laclede's Incentive Compensation
Plan in accordance with the terms for such payments as set forth in such
plan.
(d) Executive shall be entitled to receive full retiree
coverage under the Employees' Health Insurance Plan (or its full
equivalent), and the other welfare benefit plans described in Section
2(b)(v) of this Agreement as if he had retired pursuant to such plans as of
the date of termination of Executive's employment with Laclede.
Notwithstanding anything to the contrary contained in this Agreement, if
Executive obtains employment that provides at no greater cost to Executive
comparable health insurance benefits, the health insurance provided pursuant
to this Section 3(d) shall become secondary to the coverage provided by
Executive's then employer.
4. Effect of Termination of Executive's Employment After a Change
in Control. At any time after a Change in Control, Laclede may terminate
Executive's employment with Laclede without Cause or Executive may
voluntarily terminate his employment with Laclede for any reason, whereupon
Executive shall be entitled to receive the following benefits:
(a) Executive shall be entitled to payment of an amount, in a
non-discounted lump sum, equal to 36 times Executive's Monthly Base Salary;
provided that the above amount shall be reduced 1/48th for each month, if
any, beyond six (6) full calendar months after the occurrence of the first
event that constituted the Change in Control that Executive remained
employed by the Company or any successor of the Company (or any affiliate of
the Company or affiliate of such successor).
(b) At Executive's sole election made within ninety (90) days
after the date of termination of Executive's employment with Laclede,
Executive may elect to receive a lump sum payment pursuant to this Agreement
equal to the actuarially equivalent present value of the pension benefits
payable under the Employees' Retirement Plan of Laclede Gas Company
(Management Employees) and the Laclede Gas Company Supplemental Retirement
Benefit Plan, computed as if he had Early or Normal Retirement benefits
available to him under the terms of such plans, based on: (i) Early
Retirement Age for all purposes under the plans being deemed to be the
actual age of Executive at the date of termination of Executive's employment
with Laclede and (ii) a reduction by a discount factor of 1.4% per annum
(prorated for partial years on the basis of a 365-day year) for each year
that Executive's actual age upon the date of termination of Executive's
employment with Laclede is less than age 60. In all other respects, the
computation of the lump sum benefit to be paid shall be determined in
accordance with the Employees' Retirement Plan of Laclede Gas Company
(Management Employees) and the Laclede Gas Company Supplemental Retirement
Benefit Plan, including the definition of Actuarial Equivalent. If
Executive does not make a timely election to receive such lump sum payment
as set forth in this Section 4(b), Executive shall be paid on a periodic
basis in accordance with the terms for such payments as set forth in the
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Employees' Retirement Plan of Laclede Gas Company (Management Employees) and
the Laclede Gas Company Supplemental Retirement Benefit Plan. To the extent
that any such payments set forth in this Section 4(b) cannot be made
pursuant to the terms of the Employees' Retirement Plan of Laclede Gas
Company (Management Employees), such payments shall be made under the
Laclede Gas Company Supplemental Retirement Benefit Plan.
(c) At Executive's sole election made within ninety (90) days
after the date of termination of Executive's employment with Laclede,
Executive may elect to receive a lump sum payment pursuant to the
actuarially equivalent present value of vested post-retirement benefits
(based upon Laclede's dividend rate on the date of termination of
Executive's employment) payable to Executive under Laclede's Incentive
Compensation Plan at the date of termination of Executive's employment with
Laclede; provided, however, that all benefits under Laclede's Incentive
Compensation Plan, whether previously vested or unvested, will be treated as
fully vested for purposes of this Section 4(c) and Laclede's Incentive
Compensation Plan as of the date of termination of the Executive's
employment with Laclede. If Executive does not make a timely election to
receive such lump sum payment as set forth in this Section 4(c), Executive
shall be entitled to be paid on a periodic basis all benefits vested and
deemed vested under this Section 4(c) and Laclede's Incentive Compensation
Plan in accordance with the terms for such payments as set forth in such
Plan.
(d) Executive shall be entitled to receive full retiree
coverage under the Employees' Health Insurance Plan (or its full
equivalent), and the other welfare benefit plans described in Section
2(b)(v) of this Agreement as if he had retired pursuant to such plans as of
the date of termination of Executive's employment with Laclede.
Notwithstanding anything to the contrary contained in this Agreement, if
Executive obtains employment that provides at no greater cost to Executive
comparable health insurance benefits, the health insurance provided pursuant
to this Section 4(d) shall become secondary to the coverage provided by
Executive's then employer.
5. Certain Additional Payments by Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payments,
distributions, vestings, accelerations or other events constituting
"payments" within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") by Laclede to or for the benefit of
Executive (whether paid or payable pursuant to the terms of this Agreement,
other Company plans or otherwise, but determined without regard to any
additional payments required under this Section 5(a)) ("Total Payments")
would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Company
shall pay to Executive in cash an additional amount (the "Gross-Up Payment")
which after deduction of (1) any excise tax under Section 4999 thereon; (2)
any federal and state income tax thereon; (3) any city earnings tax thereon
if Executive resides or works in the City of St. Louis; and (4) the Medicare
portion of any FICA tax thereon shall be equal to the Excise Tax on such
Total Payments. The Gross-Up Payment shall be made by the Company to
Executive as soon as practical following the effective date of the
Termination. In making this computation, the following provisions shall
apply:
(i) The top federal and Missouri income tax rates shall
apply;
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(ii) The top City of St. Louis earnings tax rate shall
apply if Executive resides or works in the City;
(iii) Only the Medicare portion of the FICA tax shall
apply; and
(iv) the deductibility of any of the above taxes in
computing any of the other above taxes shall be taken into account, the
effect on the itemized deduction phase-out shall be taken into account and
the effect on the deductibility of personal exemptions shall not be taken
into account.
Currently, the rate which takes into account (i) through (iv) above is
46.38%. The computation of this rate is shown on Exhibit 1. The rate which
also takes into account the excise tax rate under Section 4999 is,
therefore, 66.38% (assuming the non-deductibility of the federal excise tax
for Missouri income tax purposes). In addition, for purposes of this
Section 5(a):
(A) any withholding by the Company of any of the above
taxes which gives rise to a credit to Executive shall be treated as a
payment to Executive.
(B) the purpose of this provision is to provide
Executive, on an after-tax basis, with sufficient cash to pay any excise tax
imposed on him under Section 4999.
(C) An example of the computation required by this
Section 5(a) is attached to this Agreement as Exhibit 2.
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this section, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall
be made by Deloitte & Touche LLP (or such other accounting firm which is
serving as the Company's independent certified public accountants at the
time) (the "Accounting Firm") which shall provide detailed supporting
calculations both to Laclede and Executive within fifteen (15) business days
of the receipt of notice from Executive that a payment of excise tax is due,
or such earlier time as is requested by Laclede. In the event that the
Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by
Laclede. Any Gross-Up Payment, as determined pursuant to this Section 5,
shall be paid by Laclede to Executive within five (5) days of the receipt of
the Accounting Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by Executive, it shall furnish Executive with a
written opinion that failure to report the Excise Tax on Executive's
applicable federal income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the Accounting Firm
shall be binding upon Laclede and Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by Laclede should have been made (an
"Underpayment"), consistent with the calculations required to be made
hereunder. In the event that Laclede exhausts its remedies pursuant to
Section 5(c) or chooses not to exercise such remedies and Executive
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thereafter is required to make a payment or additional payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by Laclede to
or for the benefit of Executive.
(c) Executive shall notify Laclede in writing of any claim by
the Internal Revenue Service ("IRS Claim") that, if successful, would
require the payment by Laclede of a Gross-Up Payment. Such notification
shall be given as soon as practicable, but no later than ten (10) business
days after Executive is informed in writing of such an IRS Claim, and shall
apprise Laclede of the nature of such IRS Claim and the date on which such
IRS Claim is requested to be paid. Executive shall not pay such IRS Claim
prior to the expiration of the thirty (30) day period following the date on
which Executive gives such notice to Laclede (or such shorter period ending
on the date that any payment of taxes with respect to such IRS Claim is
due). If Laclede notifies Executive in writing prior to the expiration of
such period that it desires to contest such IRS Claim, Executive shall:
(i) give Laclede any information reasonably requested
by Laclede relating to such IRS Claim;
(ii) take such action in connection with contesting such
IRS Claim as Laclede shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with respect to
such IRS Claim by an attorney reasonably selected by Laclede;
(iii) cooperate with Laclede in good faith in order
effectively to contest such IRS Claim; and
(iv) permit Laclede to participate in any proceedings
relating to such IRS Claim;
provided, however, that Laclede shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive
harmless, on a grossed-up basis, for any excise tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 5(c), Laclede shall control all
proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such IRS
Claim and may, at its sole option, either direct Executive to pay the tax
claimed and xxx for a refund or contest the IRS Claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as Laclede shall determine; provided,
however, that if Laclede directs Executive to pay such IRS Claim and xxx for
a refund, Laclede shall advance the amount of such payment to Executive, on
an interest-free basis, and shall indemnify and hold Executive harmless, on
a gross-up basis, from any excise tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with respect to which
such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Laclede's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder, and Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority. Executive may elect at any time in writing not to contest
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or not to further contest the IRS Claim, or otherwise not to perform its
obligations under this Section 5(c), by notifying Laclede in writing that he
elects to forego any Gross-Up Payment or additional Gross-Up Payment under
this Section 5(c).
(d) If, after the receipt by Executive of an amount advanced
by Laclede pursuant to Section 5(c), Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to Laclede's
complying with the requirements of Section 5(c)) promptly pay to Laclede the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an
amount advanced by Laclede pursuant to Section 5(c), a determination is made
that Executive shall not be entitled to any refund with respect to such
claim and Laclede does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days
after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
6. No Benefits for Voluntary Termination Without Good Reason or
For Cause; Eligibility for Early Retirement Benefits. At any time prior to
a Change in Control, Executive may terminate his employment with Laclede
without Good Reason, but, in such case, Executive will not be entitled to
any payment or benefit pursuant to Section 3 of this Agreement. Likewise,
Laclede may terminate Executive's employment with Laclede for Cause at any
time prior to or after a Change in Control and, in such case, Executive will
not be entitled to any payment or benefit pursuant to Sections 3 and 4 of
this Agreement. The termination of Executive by Laclede or termination by
Executive, for any reason, shall not deprive Executive of the right to elect
to take Early or Normal Retirement, if he is otherwise eligible for Early or
Normal Retirement under the terms of the various plans of Laclede.
7. Payment of Benefit on Death of Executive. In the event of the
death of Executive, this Agreement shall terminate except as to any amounts
which have become payable hereunder as a result of a termination before
death and except as to the various benefit plans which, by their terms,
continue after his death or by which his estate, heirs, surviving spouse,
personal representative, devisees, legatees and beneficiaries are paid
benefits. For purposes of determining and computing, under all Company
plans, the amount of the death benefits of Executive, Early Retirement age
shall be treated as the then-current age of Executive upon such death with a
discount factor on benefits of 1.4% per annum (prorated for a partial year
on the basis of a 365-day year) for each year that Executive's actual age
upon death is less than age 60.
8. Amendment, Modification or Waiver. No provision of this
Agreement may be amended, modified or waived, unless such amendment,
modification or waiver shall be authorized by the Board or any authorized
committee of the Board, and shall be agreed to in writing, signed by
Executive and by an officer of Laclede thereunto duly authorized. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a waiver of
a similar or dissimilar provision or condition at the same or any prior or
subsequent time.
9. Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions and portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent provided by law.
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10. Successors. This Agreement shall be binding upon any successor
of Laclede and such successor shall be deemed substituted for Laclede under
the terms of this Agreement; but any such substitution shall not relieve
Laclede of any of its obligations hereunder. As used in this Agreement, the
term "successor" shall include any person, firm, corporation or like
business entity which at any time, whether by merger, purchase or otherwise,
acquires all or substantially all of the assets or business of Laclede.
This Agreement may not be otherwise assigned by Laclede without Executive's
written consent, and failure of Laclede to obtain such consent prior to the
assignment shall be a breach of this Agreement and shall entitled Executive
to terminate this Agreement for Good Reason pursuant to Section 2(b)(viii)
of this Agreement.
Laclede may require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of Laclede by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Laclede would be
required to perform if no such succession had taken place. Failure of
Laclede to obtain such an agreement prior to the effectiveness of such
succession shall be a breach of this Agreement and shall entitle Executive
to terminate this Agreement for Good Reason pursuant to Section 2(b)(viii)
of this Agreement; provided further that even if such successor should
assume this Agreement, Executive may still terminate this Agreement under
Section 4.
11. Covenant Not to Compete; Confidentiality.
(a) For as long as Executive is employed by Laclede and for a
period of eighteen (18) months after the termination of Executive's
employment with Laclede, Executive agrees, in consideration of the salary
and other benefits being provided to Executive by Laclede pursuant to this
Agreement, that Executive will not directly or indirectly participate in the
ownership, management, operation or control of, or be employed by any entity
competing with Laclede in the sale or delivery of natural gas within
Laclede's service area. This covenant is not intended to prevent Executive
from making a passive investment or investments not to exceed five percent
(5%) of the aggregate equity ownership in any enterprise that may compete
with Laclede in the defined geographic areas during the restricted period.
(b) Executive agrees not to disclose, either while in
Laclede's employ or at any time thereafter, to any person not employed by
Laclede or not engaged to render services to Laclede any confidential
information obtained by him while in the employ of Laclede, including,
without limitation, any of Laclede's inventions, processes, methods of
distribution, customers or trade secrets; provided, however, that this
provision shall not preclude Executive from use or disclosure of information
known generally to the public or of information not considered confidential
by persons engaged in the business conducted by Laclede or from disclosure
required by law or court order.
12. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by Laclede hereunder to Executive or his estate
or beneficiary shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as Laclede may reasonably
determine it should withhold pursuant to any applicable law or regulation.
In lieu of withholding such amounts, Laclede may accept other provisions to
the end that it has sufficient funds to pay all taxes required by law to be
withheld in respect to any of such payments.
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13. Enforcement by Executive or His Personal Representatives,
Heirs, Distributees, Devisees and Legatees. This Agreement and all rights
of Executive hereunder shall inure to the benefit and be enforceable by
Executive's personal and legal representatives, distributees, devisees,
legatees, beneficiaries or other designee.
Laclede agrees to reimburse Executive for any attorney's fees and other
costs and expenses (collectively, "Fees and Expenses") incurred by Executive
in good faith to enforce his rights under this Agreement, to the extent he
prevails in such enforcement efforts, including Fees and Expenses relating
to:
(a) the Company's refusal to provide the payments and
benefits to which Executive is entitled under this Agreement;
(b) the Company's contesting the validity or enforceability
of this Agreement; or
(c) the Company's contesting Executive's interpretation of
provisions of this Agreement, including the computation of the Gross-Up
Payment or the computation of the Fees and Expenses payable under this
Section 13.
14. Notices. For the purpose of this Agreement, notices, demands
or other communications provided for herein shall be in writing and shall be
deemed to have been duly given when delivered or (unless other specified)
mailed by United States Certified Mail, return receipt requested, postage
prepaid, addressed as follows:
to Executive: Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Cc: Xxxxxxx X. Xxxxxx
At his home address currently
on file with Laclede
to Laclede: General Counsel
Laclede Gas Company
000 Xxxxx Xxxxxx, 00xx Xxxxx
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.
15. Construction With Missouri Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of Missouri.
16. Entire Agreement of Parties. This Agreement supercedes all
oral agreements and discussions with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LACLEDE GAS COMPANY
By: /s/ Xxxxxx X. XxXxxxx, Xx.
Title: Senior Vice President - Finance and General
Counsel
"Company"
ATTEST:
/s/ Xxxx Xxxxx Xxxxxxx
Secretary
/s/ Xxxxxxx X. Xxxxxx
"Executive"
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