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 day
of 20 ,
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 [Grant High Performance] 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
High Performance] 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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[Grant Target] shares
(“Performance Restricted Shares”) and dividend equivalent rights in
respect of such Performance Restricted Shares are issued on the Award
Date, as follows:
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(a)
Performance Restricted Shares shall be subject to the performance
contingencies in Section 5 and non-transferability restrictions in Section
7 of this Agreement, but the Participant shall have all of the rights of a
shareholder in respect of such Performance Restricted Shares, including
the right to vote and to receive dividends in the manner provided in
clause (b) hereof;
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(b)
any dividends payable (whether in cash or stock) in respect of such
Performance Restricted Shares (“Restricted Dividends”) shall be
accumulated during the Performance Period for such Performance Restricted
Shares and become payable, if at all, at the time the Participant’s
Performance Restricted Shares are no longer subject to forfeiture pursuant
to this Agreement (i.e., the Performance Restricted Shares
vest). If all or a portion of the Performance Restricted Shares
are forfeited, such Restricted Dividends relating to such forfeited
Performance Restricted Shares shall also be
forfeited. Restricted Dividends shall be paid as provided below
in Section 5 and shall not accrue any deemed earnings or interest during
the applicable restriction period.
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[Delta] 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. In no event will the Participant
receive dividends (including Restricted Dividends) for the period prior to
delivery of the Potential Performance Restricted
Shares.
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2. Award
Date. The Award Date of the Performance Contingent Restricted
Stock awarded under this Agreement is , .
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 and Restricted Dividends related thereto 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 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
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Performance
Contingent Restricted Stock and the Restricted Dividends related thereto are
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 (and the amount of Restricted Dividends that shall be
payable). Because the Company cannot issue fractional shares, the
Administrator will round down to the nearest whole number of shares of
Performance Contingent Restricted Stock in such interpolations.
The
Award (including Restricted Dividends) will be subject to forfeiture of up to
25% of the shares (and Restricted Dividends) 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 below the median 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
latter of: (I) the third anniversary of the Award Date and (II) the
business day immediately following the date of the certification by the
Compensation Committee (“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 (or Restricted Dividends) 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 Restricted Dividends that the
Committee certifies are earned in respect of Performance Restricted Shares will
be paid to the Participant in no event later than March 15 of the calendar year
following the end of the Performance Period. Any Potential
Performance Restricted Shares that the Committee certifies are earned will be
issued and delivered to the Participant in no event later than March 15 of the
calendar year following the end of the Performance Period. Any
Performance Restricted Shares (and Restricted Dividends attributable thereto) or
Potential Performance Restricted Shares as to which any or all of the respective
Performance Contingencies has not been satisfied shall be
forfeited.
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 (and
Restricted Dividends attributable to the Performance Restricted Shares
that become vested in accordance with this clause (i) shall be payable
within 30 days following such Change in Control) if:
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(a)
the Award has not otherwise been forfeited
and
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(b)
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 (including
Restricted Dividends), as the Administrator in its sole discretion 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
(and Restricted Dividends) 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, and
Restricted Dividends attributable thereto, 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. Restricted Dividends are intended to constitute an
“unfunded” obligation of the Company and nothing in the Plan or this Agreement
shall give the Participant any rights that are greater than those of a general
unsecured creditor of the Company. All amounts accumulated on the
Participant’s behalf under this Agreement shall continue for all purposes to be
part of the general assets of the Company.
7. Shares
Non-Transferable. The Performance Contingent Restricted Stock
(and any dividend rights thereon) 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 (and
Restricted Dividends), after the restrictions have lapsed as provided in Section
5 and such shares have been delivered (and with respect to Restricted Dividends,
such Restricted Dividends have been paid) and, with respect to the Potential
Performance Restricted Shares, after such shares have been issued and delivered
to the Participant.
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.
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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 value of shares withheld will not exceed the
minimum amount of tax required to be withheld by law. 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. Restricted Dividends that become payable as provided in
this Agreement shall be 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. The
decision to make an affirmative election under Section 83(b) of the Internal
Revenue Code depends upon a wide variety of facts and circumstances and as such
the Participant should consult his or her tax advisor. The Company
will not provide guidance to Participants on determining if an affirmative
election is appropriate.
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.
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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, 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.
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The
Laclede Group, Inc.
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By:
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▇.▇.
▇▇▇▇▇▇
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Title:
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Chairman
of the Board, President and Chief
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Executive
Officer
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[Name]
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Appendix
A to Stock Award
Performance
Period. The “Performance Period” for this Award shall be the
period beginning October 1, 2009 and ending September 30, 2012.
Performance
Contingencies. The “Performance Contingencies” for this Award
include two performance measures: EPS Growth and Portfolio
Development 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 2010, 2011, and
2012. 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 80%]
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[2/3
of PCRS in grant x 80%]
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[#
of PCRS in grant x 80%]
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Portfolio
Development – Portfolio Development is measured by organic earnings
(other than Laclede Energy Resources or Laclede Gas Company) and/or investments
or acquisitions made in new businesses entered into within the Performance
Period. 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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Investment
of $ or earnings added
of per share
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Investment
of $ or earnings added
of per share
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Investment
of $ or earnings added
of per share
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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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Total
Shareholder Return for the Company or for a comparator company shall be
calculated as follows:
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Average
share price for the quarter ending 9/30/2012
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+
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value of reinvested
dividends
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=
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Total
end of performance period value
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-
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average share price
for the quarter ending 9/30/2009
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=
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Total
value created in performance period
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¸
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average share price
for the quarter ending 9/30/2009
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=
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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 Portfolio
Development Performance Contingency, and TSR exceeded the median of the
comparator group, then upon the Committee’s certification of such performance
the 100 Performance Restricted Shares would vest and 5 shares of the 50
Potential Performance Restricted Shares would be issued and delivered to the
Participant.
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