SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
THE LACLEDE GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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[The Laclede Group logo]
Notice of
ANNUAL MEETING
OF SHAREHOLDERS
and
PROXY STATEMENT
JANUARY 30, 2003
[The Laclede Group logo]
720 OLIVE STREET
ST. LOUIS, MISSOURI 63101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME 10:00 a.m. on Thursday, January 30, 2003
PLACE Marriott Pavilion Hotel
One Broadway
St. Louis, Missouri
ITEMS OF BUSINESS 1. TO ELECT THREE MEMBERS OF THE BOARD OF DIRECTORS
for three-year terms.
2. TO APPROVE THE RESTRICTED STOCK PLAN FOR NON-EMPLOYEE
DIRECTORS.
3. TO APPROVE THE LACLEDE GROUP EQUITY PLAN.
4. TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP as
our independent auditors for the 2003 fiscal year.
5. TO TRANSACT SUCH OTHER BUSINESS as may properly come
before the meeting and any adjournment or postponement.
RECORD DATE You can vote if you are a common shareholder of record on
December 11, 2002.
ANNUAL REPORT Our 2002 annual report was mailed together with this
proxy statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE VOTE IN ONE OF THREE WAYS: (1) USE THE TOLL FREE
TELEPHONE NUMBER SHOWN ON YOUR PROXY CARD; (2) VISIT THE WEB-SITE SHOWN
ON YOUR PROXY CARD TO VOTE VIA THE INTERNET; OR (3) MARK, SIGN, DATE AND
PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED, PRE-ADDRESSED, POSTAGE
PAID ENVELOPE. IF YOUR SHARES ARE HELD BY A BROKER, BANK OR NOMINEE, IT
IS IMPORTANT THAT YOU GIVE THEM YOUR VOTING INSTRUCTIONS.
By the order of the Board of Directors,
December 24, 2002 MARY CAOLA KULLMAN
Secretary
PROXY STATEMENT
OF
THE LACLEDE GROUP, INC.
720 OLIVE STREET
ST. LOUIS, MO 63101
INFORMATION ABOUT THE ANNUAL SHAREHOLDERS MEETING
INTRODUCTION
This proxy statement is furnished in connection with the solicitation
of proxies by the board of directors of The Laclede Group for use at the
annual meeting of its shareholders to be held on January 30, 2003 and at
any adjournment or postponement thereof. The meeting will be held at the
Marriott Pavilion Hotel, One Broadway, St. Louis, Missouri at 10:00 a.m.
The Laclede Group Annual Report for 2002 is being mailed to shareholders
together with this proxy statement beginning on or about December 24,
2002.
Effective October 1, 2001, The Laclede Group became the parent
company of Laclede Gas Company. Accordingly, to the extent information in
this proxy statement relates to the fiscal years ended
September 30, 2001 and earlier, that information is reported for Laclede
Gas Company and not The Laclede Group.
ANNUAL MEETING ADMISSION
If you are a shareholder of record, you may attend the annual meeting
by checking in with The Laclede Group representatives at the desk outside
the meeting room. If your shares are held in the name of a bank, broker
or other holder of record and you plan to attend the meeting, you must
show proof of ownership of The Laclede Group common stock at the desk.
WHO CAN VOTE
Holders of record of The Laclede Group common stock at the close of
business on December 11, 2002 are entitled to receive this proxy
statement and to vote at the meeting. As of November 1, 2002 there were
18,961,827 shares of The Laclede Group common stock outstanding. You are
entitled to one vote for each share owned of record on that date.
HOW YOU CAN VOTE
Your vote is very important. There are three convenient voting
methods:
Voting by Telephone. You can vote your shares by telephone by calling
the toll free telephone number on your proxy card. Telephone voting is
available 24 hours a day. If you vote by telephone, you should not return
your proxy card.
Voting by Internet. You can also vote via the Internet. The web site
for Internet voting is on your proxy card, and voting is available 24
hours a day. If you vote via the Internet, you should not return your
proxy card.
Voting by Mail. If you choose to vote by mail, mark your proxy card,
date and sign it, and return it in the pre-addressed, postage paid
envelope provided.
If you participate in The Laclede Group dividend reinvestment and
stock purchase plan, your proxy card will include the shares registered
in your own name as well as those shares held for you in the dividend
reinvestment and stock purchase plan. If you do not give voting
instructions for shares owned by you through the plan, none of your
shares in the plan will be voted.
If you hold your shares through a broker, bank or other holder of
record, please follow their directions for providing voting instructions.
1
HOW YOU MAY REVOKE OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the
meeting by:
* sending written notice of revocation to the corporate secretary;
* submitting another timely proxy by telephone, Internet or paper
ballot; or
* attending the annual meeting and voting in person. If your shares
are held in the name of a bank, broker or other holder of record,
you must obtain a proxy executed in your favor from the holder of
record to be able to vote at the meeting.
OTHER VOTING MATTERS
All shares that have been properly voted and not revoked will be
voted at the annual meeting in accordance with your instructions. If you
sign your proxy card but do not give voting instructions, the shares
represented by that proxy will be voted by those named in the proxy card
as recommended by the board of directors.
If any other matters are properly presented at the annual meeting for
consideration, the persons named in the enclosed proxy card will have the
discretion to vote on those matters for you. As of the date this proxy
statement was printed, we do not know of any other matter to be raised at
the annual meeting.
HOW VOTES ARE COUNTED
Each share of common stock represents one vote. As provided in The
Laclede Group bylaws, a majority of the shares entitled to vote at the
annual meeting, present in person or represented by proxy, will
constitute a quorum for the meeting.
* The three director nominees receiving the greatest number of votes
will be elected;
* The proposals to approve The Laclede Group, Inc. Equity Plan, to
approve the Restricted Stock Plan for Non-Employee Directors and to
ratify the appointment of independent public accountants must
receive the affirmative vote of a majority of the shares of The
Laclede Group common stock voted on the proposal;
* Abstentions and broker non-votes will be counted in determining a
quorum for the meeting;
* Shares withheld and broker non-votes will have no effect on the
election of directors;
* Abstentions as to the approval of The Laclede Group Equity Plan,
the approval of the Restricted Stock Plan and the ratification of
the appointment of independent public accountants will have the
same effect as votes "against" these matters; and
* Broker non-votes will have no effect on the approval of The Laclede
Group Equity Plan and the Restricted Stock Plan or ratification of
the appointment of independent public accountants.
ADJOURNMENTS
We currently expect to take votes and close the polls on all
proposals on the scheduled date of the annual meeting. However, we may:
* Keep the polls open to facilitate additional proxy solicitation
with regard to any or all proposals; or
* Allow the inspectors of the election to count and report on the
votes that have been cast after the polls have closed.
If any of the above occurs, we could propose one or more adjournments of
the annual meeting. For any adjournment to be approved, the votes cast in
favor of it must represent a majority of the total number of votes cast
by the holders of stock present at the meeting in person or represented
by proxy.
Proxies that we have solicited will be voted in favor of any
adjournment that we propose but will not be considered a direction to
vote for any adjournment proposed by anyone else. If any adjournment is
properly
2
proposed at the meeting on behalf of anyone else, the persons named as
proxies, acting in that capacity, will have the discretion to vote on the
adjournment in accordance with their best judgment.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers to file reports of holdings and
transactions in The Laclede Group shares with the Securities and Exchange
Commission and the New York Stock Exchange. Based on our records and
information, we believe that in all respects during fiscal year 2002 our
directors and executive officers met all applicable Securities and
Exchange Commission reporting requirements.
CORPORATE GOVERNANCE
This past fiscal year has been a very eventful and tumultuous year
across corporate America. Allegations of fraudulent disclosure at a
number of major public companies plus the surge in accounting
restatements at other companies have led to a general decline in investor
confidence. The federal government reacted to these events by adopting
the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange submitted
to the Securities and Exchange Commission the proposals of the New York
Stock Exchange Corporate Accountability and Listing Standards Committee
relative to corporate governance. While many of these matters still
require implementation by rule proposals or rule adoptions of the
Securities and Exchange Commission, the company's management and board of
directors determined that steps should be taken now to reassure your
confidence in the company. The following steps have been taken to date
and we continue to monitor best practices and other developments in
corporate governance.
BOARD COMMITTEES
We have developed charters for the nominating and compensation
committees in addition to that of the audit committee. Copies of the
charters for all three committees are attached to this proxy statement as
appendices A-C. The nominating and compensation committee charters meet
the listing standards proposed by the New York Stock Exchange as
submitted to the Securities and Exchange Commission on August 16, 2002.
Since the proposed standards are not yet final or effective, further
changes to those charters may be required as the standards are finalized.
As part of the process of creating the charter for the nominating
committee, the board of directors determined that the committee should
more appropriately be called the corporate governance committee. As
indicated in its charter, the corporate governance committee will be
responsible for assisting the board in identifying individuals qualified
to become board members and recommending director nominees to the board
as well as making recommendations to the board relative to corporate
governance and the board's corporate governance principles. In addition
to performing an annual evaluation of the committee's performance, this
committee will also assist the board in the annual evaluation of the
board's performance. The corporate governance committee charter also sets
forth the independence requirement for its members. The charter expressly
provides the authority of the committee to retain and terminate
consultants of its selection that it deems necessary in the performance
of its duties. The company will be responsible for any fees of those
consultants.
The compensation committee charter largely documents the committee's
previous practices. Some additions include the requirement of an annual
evaluation of the committee's performance as well as that all committee
members be independent. While the compensation committee is responsible
for administering and making recommendations to the board relative to
incentive compensation plans and equity-based compensation plans,
qualified plan matters, to the extent not delegated to management or
another board committee, are handled by the full board. This committee's
charter also expressly provides the authority to retain, at the company's
expense, and terminate consultants of its selection.
The audit committee charter, previously adopted by the company's
audit committee on August 23, 2001 and included with last year's proxy
statement, was revised to meet the requirements of Sarbanes-Oxley as in
effect on the date of this proxy statement. A copy of the latest charter
approved by the board on November 21, 2002 is attached as appendix C. The
new independence standards included in the New York
3
Stock Exchange's proposed listing standards do not impact the composition
of the company's audit committee. Its current members meet the existing
as well as the proposed standards. The charter continues to provide for
the committee's ability to retain, at company expense, and terminate such
consultants or experts it deems necessary in the performance of its
duties. Further changes may be required as the proposed listing standards
for the New York Stock Exchange are finalized.
Additionally, effective for the 2003 fiscal year, these committees,
like the audit committee, are totally independent. The members of the
corporate governance and compensation committees on and after October 1,
2002 are Messrs. Holman, Nasser and Stupp.
CORPORATE GOVERNANCE GUIDELINES AND COMMUNICATIONS WITH NON-EMPLOYEE
DIRECTORS
At its October 31, 2002 meeting, the board of directors adopted
corporate governance guidelines that are designed to meet the proposed
listing standards of the New York Stock Exchange. A copy of the
guidelines is attached as appendix D. These guidelines largely document
practices and principles already in place at the board level. An addition
in the guidelines provides for executive sessions of the non-management
directors on a quarterly basis, with these sessions to be lead by the
chair of the corporate governance committee, who is currently Mr. William
E. Nasser. Shareholders who desire to communicate with the non-management
directors should send correspondence addressed to Corporate Governance
Committee Chair, The Laclede Group, Inc., 720 Olive, Room 1517, St.
Louis, MO 63101. Like the committee charters, the guidelines provide that
the Board as a whole has the ability to retain, at the company's expense,
the consultants it deems necessary in the performance of its duties. The
guidelines also provide that the Board members have complete access to
management.
CODE OF BUSINESS CONDUCT
The company and its predecessor, Laclede Gas Company, have an
established code of business conduct to cover such areas as conflicts of
interest, trade secrets, confidential information, securities laws and
the prohibition on insider trading, accuracy of books and records,
various personnel policies, antitrust matters, environmental and safety
laws, and political activities. The code is interpreted and amended by
the company's legal department. A request for an exception to a policy
requires approval by the general counsel and the head of the internal
audit department. We are in the process of reviewing our code in light of
the proposed listing standards of the New York Stock Exchange as well as
the implementation of the Sarbanes-Oxley Act of 2002 to determine any
changes needed to meet those new requirements. You may request a copy of
the current version of the company's code of business conduct from our
corporate secretary's office.
AMENDMENT OF RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
The board also has amended the retirement plan for non-employee
directors so that it will not be available for any director not already
vested under the plan on November 1, 2002. Those directors already vested
in the Retirement Plan for Non-employee Directors will continue under the
plan, but the plan will not have any new participants after November 1,
2002. Further, any director not vested under the plan on November 1,
2002, will no longer participate in the plan. We are seeking approval by
shareholders of this plan to meet the proposed listing standards of the
New York Stock Exchange. Once approved, those nonvested directors and all
new directors will instead receive additional benefits under the
restricted stock plan for non-employee directors, which is being
submitted at this meeting for your approval and a copy of which is
attached as appendix E to this proxy statement. The restricted stock plan
is not dilutive to shareholders since the trustee of the plan, UMB Bank
n. a., purchases on the open market shares to be used for the awards
under the plan. The trustee then holds the shares as trustee for the
benefit of the non-employee directors until the restrictions expire.
Further corporate governance changes may be required as the
Securities and Exchange Commission adopts new rules to implement various
provisions of the Sarbanes-Oxley Act of 2002 and as the proposed New York
Stock Exchange listing standards are finalized.
4
PROPOSAL 1
ELECTION OF DIRECTORS
The board of directors is divided into three classes, consisting of
three directors each. Three directors will be elected at the annual
meeting to serve for a three-year term expiring at our annual meeting in
the year 2006. Having reached the mandatory age for retirement under our
bylaws, Mr. Andrew B. Craig, III, will not stand for re-election this
year. The board has selected Mr. Arnold W. Donald as the company's
nominee to fill the directorship vacancy created by Mr. Craig's
retirement, and Messrs. Holman and Nasser, the two other directors whose
terms will expire on January 30, 2003, will stand for reelection.
The persons named in the enclosed proxy card intend to vote proxies
FOR the election of the three nominees listed below for terms expiring in
2006. If any nominee becomes unavailable for any reason before the
meeting, which is not anticipated, the proxies received for that nominee
will be voted for a person to be selected by our board of directors.
INFORMATION ABOUT THE NOMINEES AND DIRECTORS
NOMINEES FOR NEW TERM (TO EXPIRE AT ANNUAL MEETING, 2006):
ARNOLD W. DONALD, 47, is Chairman of the Board and Chief Executive
Officer of Merisant Company, a global corporation that manufactures and
markets a variety of tabletop sweetener products with sales in over 100
countries. He has been Chairman of the Board and Chief Executive Officer
since Merisant's formation in March 2000. From January 1998 to March 2000
he was Senior Vice President of Monsanto Company in St. Louis, Missouri
and was responsible for Monsanto's growth, globalization and technology
initiatives. He is a director of Crown Cork & Seal Company, Inc., Oil-Dri
Corporation of America, Belden, Inc., Carnival Corporation and The Scotts
Company.
C. RAY HOLMAN, 60, is Chairman of the Board of Mallinckrodt Inc.,
which is a part of Tyco International, Inc., and Senior Vice President of
Tyco International, Inc., a diversified corporation engaged in
health-care and specialty products, telecommunications and electronics,
flow control and fire and security services. He has been Chairman since
October 1994, and President from December 1992 to December 1995 of
Mallinckrodt, Inc. and Senior Vice President of Tyco International, Inc.
since October 2000. Mr. Holman is a director of BankAmerica Corp.
The Laclede Group director since: 2000
Laclede Gas director since: 1994
WILLIAM E. NASSER, 63, is Chairman of the Board of Enchira
Biotechnology Corporation, a biotechnology company that applies its
proprietary Drug Candidate Optimization Platform(TM) to create new
therapeutic proteins. He has served as Chairman since April 1998. He was
President and Chief Executive Officer of Enchira from April 1998 to June
1999. He retired as Chairman of the Board, Chief Executive Officer and
President of Petrolite Corporation in November 1995. He had served in
that capacity since February 1992. He is a director of Enchira
Biotechnology Corporation.
The Laclede Group director since: 2000
Laclede Gas director since: 1994
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
-----
ELECTION OF THESE NOMINEES AS DIRECTORS.
5
DIRECTORS WITH TERM EXPIRING IN 2004:
DR. HENRY GIVENS, JR., 69, has been president of Harris-Stowe State
College for the last 23 years. He is a director of U.S. Bank National
Association.
The Laclede Group director since: 2000
Laclede Gas director since: 1992
MARY ANN VAN LOKEREN, 55, has been Chairman and Chief Executive
Officer of Krey Distributing Co., an Anheuser-Busch wholesaler, since
December 1986. She is a director of Commerce Bancshares, Inc. and Masco
Corporation.
The Laclede Group director since: 2000
Laclede Gas director since: 1992
DOUGLAS H. YAEGER, 53, has been Chairman of the Board, President and
Chief Executive Officer of The Laclede Group since October 26, 2000. He
has been Laclede Gas' Chairman of the Board since January 28, 1999, Chief
Executive Officer since January 1, 1999 and President since December 1,
1997. He served as Laclede Gas' Executive Vice President--Operations and
Marketing from September 1, 1995 through November 30, 1997. He is a
Director of First Banks, Inc.
The Laclede Group director since: 2000
Laclede Gas director since: 1998
DIRECTORS WITH TERM EXPIRING IN 2005:
ROBERT C. JAUDES, 68, retired as Laclede Gas' Chief Executive Officer
on January 1, 1999 and as Chairman of the Board on January 28, 1999. From
January 27, 1994 to December 1, 1997, he served as Chairman of the Board,
Chief Executive Officer and President of Laclede Gas. On December 1,
1997, Mr. Jaudes relinquished the title of President but continued to
serve as Laclede Gas' Chairman of the Board and Chief Executive Officer
until his retirement. Mr. Jaudes was an employee of Laclede Gas from 1955
to December 31, 1998.
The Laclede Group director since: 2000
Laclede Gas director since: 1983
W. STEPHEN MARITZ, 44, has been Chairman of the Board of Maritz Inc.
since February 26, 2001 and Chief Executive Officer since November 1998.
Maritz Inc. provides performance improvement, marketing research and
travel services on a global basis. Previously, he served as Vice Chairman
from July 1994 to February 26, 2001 and President from April 1, 1997 to
February 26, 2001. From April 1, 1997 to November 1998, Mr. Maritz was
Chief Operating Officer of Maritz Inc.
The Laclede Group director since: 2000
Laclede Gas director since: 1999
ROBERT P. STUPP, 72, is and since December 31, 1990 has been the
President and Chief Executive Officer of Stupp Bros., Inc. Stupp Bros.
has (1) two operating divisions: Stupp Bridge Company of Bowling Green,
Kentucky, fabricator of steel highway and railroad bridges; and Stupp
Corporation of Baton Rouge, Louisiana, producer of custom-made electrical
resistance welded pipe for oil and gas transmission; and (2) three
subsidiaries: Hammerts Iron Works, Inc. of St. Louis, Missouri,
fabricator of structural steel; Bayou Coating L.L.C. of Houston, Texas,
provider of applicators for steel line pipe; and Midwest Bank Centre of
St. Louis, Missouri, a Missouri bank and member of the FDIC and Federal
Reserve systems. Mr. Stupp currently serves, and has served since 1960,
as a senior executive officer of one or more of those entities. He is a
director of Stupp Bros., Inc.
The Laclede Group director since: 2000
Laclede Gas director since: 1990
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The standing committees of the board of directors as of September 30,
2002, included the audit committee, the compensation committee and the
nominating committee. During the 2002 fiscal year, there
6
were 13 meetings of our board of directors. All directors attended 75% or
more of the aggregate number of meetings of the board and applicable
committee meetings.
The audit committee assists the board of directors in fulfilling the
board's oversight responsibilities with respect to the quality and
integrity of the financial statements, financial reporting process, and
systems of internal controls. The audit committee also assists the board
in monitoring the independence and performance of the independent
auditors. The audit committee is composed of independent directors, as
defined by New York Stock Exchange listing standards, and operates under
a written charter adopted by the board of directors. The members of the
committee at fiscal year end were Andrew B. Craig, III, Dr. Henry Givens,
Jr., C. Ray Holman (chairman), W. Stephen Maritz and Mary Ann Van
Lokeren. The committee met three times in fiscal year 2002. The charter
for the audit committee, which is attached to this proxy statement as
appendix C, has been revised recently to meet the proposed New York Stock
Exchange's new listing standards.
The compensation committee reviews and recommends to the board the
salaries and all other forms of compensation of officers. The committee
members at fiscal year end were C. Ray Holman, Robert C. Jaudes, William
E. Nasser and Robert P. Stupp (chairman). The committee met five times in
fiscal year 2002. Effective October 1, 2002, the committee is comprised
solely of independent directors and operates under a written charter
adopted by the board of directors, a copy of which is attached to this
proxy statement as appendix B. Each current committee member is
independent as provided in the New York Stock Exchange's proposed listing
standards. The current members of the committee are Messrs. Holman,
Nasser and Stupp (chairman).
The nominating committee recommends new director nominees to the
board of directors. The committee members at fiscal year end were C. Ray
Holman, Robert C. Jaudes, William E. Nasser and Robert P. Stupp
(chairman). The committee met two times in fiscal year 2002. Effective
October 1, 2002, this committee is known as the corporate governance
committee and is now also responsible for considering and making
recommendations to the board relative to corporate governance and the
board's corporate governance guidelines. Each current committee member is
independent as provided in the New York Stock Exchange's proposed listing
standards. The current committee members are Messrs. Holman, Nasser
(chairman) and Stupp. The corporate governance committee also operates
pursuant to a written charter approved by the board, a copy of which is
attached to this proxy statement as appendix A.
7
BENEFICIAL OWNERSHIP OF LACLEDE GROUP COMMON STOCK
The following table sets forth as of September 30, 2002 the
beneficial ownership of The Laclede Group common stock by (i) Stupp
Bros., Inc., 3800 Weber Road, St. Louis, MO 63125, the only person or
entity who, as of September 30, 2002, is known to be the beneficial owner
of 5% or more of common stock, (ii) each director and director nominee,
(iii) each named executive officer listed in the Summary Compensation
Table, and (iv) all directors, nominees and executive officers as a
group.
AMOUNT AND NATURE OF OWNERSHIP
SOLE VOTING SHARED VOTING
AND/OR AND/OR
NAME OF INVESTMENT INVESTMENT PERCENT
BENEFICIAL OWNER POWER POWER TOTAL OF CLASS
---------------- ----------- ------------- --------- --------
A. B. Craig, III.......................... 3,400 -0- 3,400 *
A. W. Donald.............................. -0- -0- -0- *
H. Givens, Jr............................. 2,800(1) -0- 2,800 *
C. R. Holman.............................. 3,400(1) -0- 3,400 *
R. C. Jaudes.............................. 15,345 10,891(2) 26,236 *
W. S. Maritz.............................. 1,400(1) -0- 1,400 *
G. T. McNeive, Jr......................... 4,016 -0- 4,016 *
J. Moten, Jr.............................. 194 -0- 194
W. E. Nasser.............................. 3,400(1) -0- 3,400 *
K. J. Neises.............................. 545 -0- 545 *
R. E. Shively............................. -0- -0- -0- *
R. P. Stupp............................... 5,832 1,155,000(3) 1,160,832 6.14%
M. A. Van Lokeren......................... 3,800(1) -0- 3,800 *
D. H. Yaeger.............................. 4,865 -0- 4,865 *
Stupp Bros., Inc.......................... 1,155,000(3) -0- 1,155,000 6.10%
All directors and executive officers
(20) as a group......................... 1,219,741 6.45%
---------
(1) Includes restricted, nonvested shares granted under the Restricted Stock
Plan for Non-Employee Directors, as described in more detail on page 16.
(2) Owned jointly with spouse.
(3) Stupp Bros., Inc. owns these 1,155,000 shares. Mr. Stupp is a Director and
Executive Officer of Stupp Bros., Inc. and has a one-third interest in a
voting trust that controls 100% of the stock of Stupp Bros., Inc.
* Less than one percent.
8
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The table that follows presents information about compensation for
the chief executive officer and four other most highly compensated
executive officers of the company and its subsidiaries for the last three
fiscal years.
LONG TERM
COMPENSATION
ANNUAL COMPENSATION PAYOUTS
------------------------------------- ------------
NAME AND OTHER ANNUAL LTIP ALL OTHER
PRINCIPAL POSITION(1) YEAR SALARY BONUS COMPENSATION(3) PAYOUTS(4) COMPENSATION(5)
--------------------- ---- -------- ----- --------------- ---------- ---------------
D. H. Yaeger 2002 $419,400 $25,000 $15,000 $95,093 $ 9,527
Chairman of the Board, 2001 386,667 -0- 16,000 82,542 9,205
President and CEO 2000 363,333 -0- 16,000 71,522 7,571
K. J. Neises 2002 254,833 -0- -0- 45,309 25,902
Executive Vice President-- 2001 235,833 -0- -0- 39,865 19,339
Energy and Administrative 2000 219,500 -0- -0- 33,500 15,751
Services
G. T. McNeive, Jr. 2002 232,000 -0- -0- 43,969 10,189
Senior Vice President-- 2001 223,500 -0- -0- 38,860 9,967
Finance and General Counsel 2000 212,500 -0- -0- 33,500 8,280
R. E. Shively 2002 240,000 50,000(2) 96,078 7,538 501
Senior Vice President-- 2001 171,304 -0- -0- -0- 139,167
Business & Services
Development
J. Moten, Jr. 2002 170,000 -0- -0- -0- 6,627
Senior Vice President-- 2001 138,458 -0- -0- -0- 5,947
Operations and Marketing 2000 124,000 -0- -0- -0- 4,900
---------
(1) Mr. Shively first joined the company in January 2001; Mr. Moten was
promoted to senior vice president effective July 1, 2001; Mr. Neises was
promoted to executive vice president effective February 1, 2002; and
Mr. McNeive retired October 1, 2002.
(2) The bonus for Mr. Shively reflects an employment bonus payable upon his
completion of one year of service with the Company.
(3) The amounts in this column reflect fees paid for attendance at board of
directors and board committee meetings. Effective October 1, 2002, these
fees are no longer paid to directors who are also officers of the company.
For Mr. Shively, this column includes a $96,078 gross-up payment in fiscal
year 2002 for taxes on his living and relocation expenses and fees
incurred in fiscal year 2001.
(4) The amounts in this column reflect dividend equivalents paid under the
incentive compensation plan to the named executive officer during the
three most recent fiscal years. For a more detailed discussion of the
plan, see the Long-Term Incentive Plan Table and discussion beginning on
page 10.
(5) For 2002 this column includes (a) above-market interest on deferrals
under the deferred income plan described on page 10 (Mr. Yaeger, $-0-;
Mr. Neises, $6,302; Mr. McNeive, $1,954; Mr. Shively, $-0-; and Mr.
Moten, $-0-); (b) above-market interest on deferrals under the deferred
income plan II (Mr. Yaeger, $3,110; Mr. Neises, $13,433; Mr. McNeive,
$3,073; Mr. Shively, $380; and Mr. Moten, $619); (c) matching
contributions under the salary deferral savings plan, which was
established under Section 401(k) of the Internal Revenue Code (Mr.
Yaeger, $6,296; Mr. Neises, $6,046; Mr. McNeive, $5,041; Mr. Shively,
$-0-; and Mr. Moten, $5,887); and (d) the company-paid premiums for
supplemental travel and accident insurance for accidental death or
dismemberment with benefits of up to $250,000 (approximately $121 for
each named executive officer).
9
INCENTIVE COMPENSATION PLAN
The following table discloses certain information about the incentive
compensation plan, which is considered a type of long-term incentive plan
under the proxy disclosure rules of the Securities and Exchange
Commission.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
PERIOD
NUMBER UNTIL
NAME OF UNITS MATURATION
---- -------- ----------
Douglas H. Yaeger..................................... 10,000 5 years
Kenneth J. Neises..................................... 3,750 4 years
Gerald T. McNeive, Jr................................. 3,750 4 years
Robert E. Shively..................................... 7,500 5 years
Under the long-term incentive plan, each participant may be granted
a certain number of share units that are credited with quarterly dividend
equivalent payments and an annual deferred compensation amount. The
persons entitled to participate in the plan and the number of share units
awarded to the participants is determined by the compensation committee
and approved by the board of directors.
Under the plan, each time a cash dividend is paid on the company's
outstanding common stock a dividend equivalent payment is made to each
share unit in an amount equal to the dividend. The amount of dividend
equivalent payments made to the named executive officers during the last
fiscal year is disclosed in the "LTIP Payouts" column in the Summary
Compensation Table. In addition, each year a deferred compensation
adjustment is made with respect to each share unit outstanding at the end
of the most recent fiscal year in an amount equal to the increase or
decrease in the per share consolidated retained earnings for that year,
provided, however, that in a participant's first year of participation
the deferred compensation amount will not be less than zero. During the
fiscal year ended September 30, 2002, each share unit was debited $.16 as
a deferred compensation amount, except for Mr. Shively's units, which
received no deferred compensation amount since this was his first year of
participation in the plan. A participant forfeits all rights to the share
units if his or her employment is terminated for any reason other than
retirement, death, disability or resignation by the participant after a
hostile change in control of the company.
For each share unit awarded to a participant prior to January 26,
1995, the participant or the participant's spouse, as the case may be, is
entitled to receive all dividend equivalent payments and deferred
compensation adjustments on each share unit during the participant's
lifetime, and, after the participant's death, during the lifetime of the
participant's spouse, regardless of the participant's age at retirement.
For each share unit awarded after January 26, 1995, the participant or
the participant's spouse is only entitled to receive the dividend
equivalent payments and deferred compensation amounts if the participant
retired after age 65 or retired before age 65 but, based on the
participant's age at the time of the award, was employed by the company
after the date of the award of the share unit for the number of years set
forth below:
NUMBER OF YEARS OF SERVICE
AGE AT REQUIRED FOLLOWING THE
DATE OF AWARD DATE OF SUCH AWARD
------------- --------------------------
61 and older.............. 2
55-60..................... 4
54 and under.............. 5
In accordance with the above schedule, since Mr. McNeive retired
prior to age 65, he was not vested in the share units awarded on and
after January 1999.
10
PENSION PLAN
The table below shows estimated annual benefits payable at a normal
retirement date under the employees' retirement plan and the supplemental
retirement benefit plan.
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
YEARS OF SERVICE
AVERAGE FINAL --------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------- -- -- -- -- -- -- --
$150,000............. $ 43,515 $ 58,020 $ 75,525 $ 87,030 $101,535 $116,040 $131,790
200,000............. 59,265 79,020 98,775 118,530 138,285 158,040 179,040
250,000............. 75,015 100,020 125,025 150,030 175,035 200,040 226,290
300,000............. 90,765 121,020 151,275 181,530 211,785 242,040 273,540
350,000............. 106,515 142,020 177,525 213,030 248,535 284,040 320,790
400,000............. 122,265 163,020 203,775 244,530 285,285 326,040 368,040
450,000............. 138,015 184,020 230,025 276,030 322,035 368,040 415,290
500,000............. 153,765 205,020 256,275 307,530 358,785 410,040 462,540
"Average final compensation" is the greater of: (a) the annual
average of the highest compensation for 36 consecutive calendar months
during the participant's last 120 months of service; and (b) the annual
average of the highest compensation for three consecutive calendar years
during the participant's last ten calendar years of service. Compensation
used for pension formula purposes is the type of compensation included as
"Salary" and "Bonus" in the Summary Compensation Table.
Benefits shown in the table (the calculation of which, in some cases,
takes into account the portion of average final compensation in excess of
Social Security covered compensation, and, in other cases, is calculated
after the deduction of Social Security offset amounts) assume retirement
at age 65, the years of service shown, continued existence of the current
plans without substantial change and payment in the form of a single life
annuity. Years of service as of September 30, 2002 for the persons named
in the Summary Compensation Table are as follows: D. H. Yaeger, 11 years;
R. E. Shively, 1 year; K. J. Neises, 18 years; G. T. McNeive, Jr., 16
years; and J. Moten, Jr., 39 years.
OTHER PLANS
Executive Salary Protection Plan. The executive salary protection
plan entitles the designated beneficiaries of a participating executive
officer to receive certain payments upon the executive officer's death.
The amount of the payment is determined based upon the annual salary of
the executive officer, whether the executive officer was actively
employed or retired and the age of the executive officer, all as of the
time of the executive officer's death.
Management Continuity Protection Plan. The management continuity
protection plan entitles the participating officer to receive a lump sum
payment if the executive officer's employment is terminated for any
reason (other than death, disability or for actions involving moral
turpitude) within 42 months, in the case of most officers, or 54 months,
in the case of the president and any executive vice president, after a
change in control of the company. Each of the named executive officers,
except Mr. Yaeger, participate in the plan. The amount of the payment is
determined by multiplying the officer's average annual compensation for
the five-year period preceding the termination by two, but the payment
can be reduced depending upon the period of time that the officer
remained employed following the change in control, and the number of
months until the officer would attain the age of 65. Under the plan, a
"change in control" is deemed to have occurred when any person becomes a
beneficial owner, directly or indirectly, of the company's outstanding
securities representing:
* more than 50% of the voting power of the company; or
* at least 30% but not more than 50% of the voting power of the
company and a majority of the outside members of the board of
directors determine that a change in control has occurred.
Severance Benefits Agreement. Mr. Yaeger has a separate severance
benefits agreement that provides him with certain benefits payable upon
the termination of his employment. This agreement supersedes the
11
management continuity protection plan and any provision of any other plan
that is inconsistent with the agreement.
Under the severance benefit agreement, if, prior to a change in
control of the Company, Mr. Yaeger's employment is terminated without
cause or if he resigns for good reason, he is entitled to receive the
following benefits:
* a lump sum payment equal to 18 times his then monthly base salary;
* a lump sum payment equal to the present value of the pension
benefits under the retirement plan and supplemental retirement
benefit plan;
* a lump sum payment equal to the present value of any vested
post-retirement benefits;
* full retiree coverage under the health insurance plan and other
welfare benefit plans as if he had retired as of the date of
termination; and
* a payment equal to the amount of any excise tax (and income tax on
these additional amounts) paid by Mr. Yaeger on any excess
parachute payments.
If, after a change in control of the company, Mr. Yaeger's employment
is terminated without cause or he resigns for any reason, he is entitled
to receive the following benefits:
* a lump sum payment equal to 36 times his then monthly base salary,
reduced according to the number of months beyond six full calendar
months after the change in control that he remained employed;
* a lump sum payment equal to the present value of the pension
benefits under the retirement plan and supplemental retirement
benefit plan;
* a lump sum payment equal to the present value of any
post-retirement benefits, with all benefits being treated as if
they were fully vested;
* full retiree coverage under the health insurance plan and other
welfare benefit plans as if he had retired as of the date of
termination; and
* a payment equal to the amount of any excise tax (and income tax on
these additional amounts) paid by Mr. Yaeger on any excess
parachute payments.
If Mr. Yaeger's employment is terminated for cause at any time before
or after a change in control, he will not be entitled to any benefits
under the severance benefit agreement. If Mr. Yaeger dies while the
agreement is still in effect, the agreement will terminate except as to
any amounts that may have become payable as a result of the termination
of his employment before his death.
In consideration of the benefits granted to Mr. Yaeger under the
agreement, he is restricted from competing with the company under certain
circumstances and from disclosing confidential information concerning the
company.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S OR LACLEDE GAS' FILINGS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT
INCORPORATE THIS PROXY STATEMENT, IN WHOLE OR IN PART, COMPENSATION
REPORT REGARDING EXECUTIVE COMPENSATION, PERFORMANCE GRAPH AND AUDIT
COMMITTEE REPORT CONTAINED IN THIS PROXY STATEMENT SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
COMPENSATION COMMITTEE REPORT REGARDING EXECUTIVE COMPENSATION
The compensation committee of the board of directors ("Committee")
administers and determines the executive compensation program. After
review and approval by the Committee, all material issues relating to
executive compensation are submitted to the full board for consideration
and approval.
The philosophy of the Committee as it relates to executive
compensation is that the chief executive officer (CEO) and other
executive officers should be compensated at levels designed to attract,
motivate, and retain talented executives who are capable of leading the
Company in achieving its business objectives in an environment of
increasing complexity, competition, and change; to encourage and reward
excellent
12
performance; and to encourage individual growth as a part of the
Company's management development program.
Annual compensation for senior management consists of salary, and for
certain key executives, a long-term incentive compensation plan. Salary
levels for Company executives are reviewed and may be adjusted annually.
Salaries are also increased to recognize promotions and assignment of
increased responsibilities. In determining appropriate salaries, the
Committee considers: (1) the CEO's recommendations as to compensation for
all other executive officers; (2) the scope of responsibility,
experience, time in position, and individual performance for all
officers, including the CEO; (3) internal fairness and equity among
positions held by each executive officer; (4) special factors such as
each individual's willingness and ability to accept special assignments
and responsibilities; (5) general cognizance of pay practices of major
companies within the St. Louis region as well as within industry
generally relating to executives of comparable responsibility; and (6)
corporate performance. Evaluation of corporate performance takes into
account the significant effects that weather variations as well as other
unusual events may have on the Company's earnings per share and other
financial and operating results as compared to corporate budgeted levels.
The Committee's analysis is a subjective process that utilizes no
specific weighting or formula of the aforementioned factors in
determining executives' base salaries.
Awards under the long-term incentive compensation plan may be granted
by Committee recommendation and board approval to the CEO and/or certain
other key executives who have, in the judgment of the Committee,
demonstrated their ability and who the Company seeks to retain in
positions which can affect the long-term success of the Company,
including both the establishment and execution of the Company's business
strategies. Under this plan, upon the recommendation of the Committee,
the board of directors, exclusive of any employee director who is
eligible to participate in the plan, may award share units to these key
executives. The executives are paid quarterly dividend equivalents on
these share units at the same rate that dividends are paid to
shareholders. Share units also have a deferred compensation component
based on changes in retained earnings over the course of a year. Such
deferred compensation is payable upon the executive's retirement. Current
compensation under this plan is limited to 25% of the executive's current
annual salary. Awards granted under this plan are intended to encourage
the continued employment of these talented executives. Toward that end,
this plan requires that an executive provide a certain number of
additional years of service after the date of an award of share units in
order for post-retirement dividend equivalents and deferred compensation
amounts associated with that award to be paid. This plan provides
compensation that is directly linked with earnings per share achievement,
a critical factor in creating increased shareholder value. In determining
the number of new share units to be awarded to a key executive, the
Committee considers an individual's current salary level, the number of
share units previously awarded, as well as expectations for the
executive's performance relative to maintaining the Company's long-term
financial and operational integrity.
The compensation of executive officers was adjusted effective
February 1, 2002.
Also, the board of directors, in recognition of the prior performance
and the high level of responsibility of several of the Company's senior
officers, awarded new share units to them, as set forth in greater detail
elsewhere in this proxy statement. Such share unit awards are intended,
among other things, to relate a portion of executive compensation more
directly with the long-term interest of shareholders.
In determining the total compensation package of the CEO for 2002,
the Committee considered all of the matters discussed above. The
Committee also considered the attainment of corporate-wide budgeted
goals, giving recognition to factors such as weather, interest rates and
regulatory policies which can significantly impact operating results of
gas utilities but are generally outside the control of management.
Further, the Committee considered factors related to individual
performance and responsibility for the Company's long-term strategic
direction. Noted under Mr. Yaeger's leadership were: (1) the successful
implementation of the holding company structure, (2) the timely
negotiation of a settlement of the rate case filed in 2001, (3) the
effective use of the Price Stabilization Program at the utility level,
(4) the development and advocacy of strategies to deal with the
volatility of weather and gas prices, and (5) furthering the long-term
strategy and business planning process for the Company, including the
acquisition of SM&P Utility Resources, Inc. In January 2002, the board of
directors, after considering the various factors and accomplishments
described above, granted Mr. Yaeger an increase in base salary, a cash
bonus and also awarded him 10,000 additional share units under the
incentive compensation plan.
13
Due to the adoption of the Company's long-term strategy to stabilize
the core utility's earnings and develop supplemental sustainable growth
businesses that extend the Company's strengths, management and the Board
undertook, with the assistance of an outside consultant, a comprehensive
review of its executive compensation program based on current market
practice. The outside consultant recommended and the Committee agreed
that the Company's compensation program should include an annual
incentive compensation plan and an equity component to better link these
key employees' interests with those of the shareholders. The Committee
believes that the implementation of The Laclede Group Equity Plan
discussed beginning on page 19 of this proxy statement will advance the
interests of the Company and its shareholders by providing a means to
attract, retain, and motivate employees upon whose judgment, initiative
and effort the Company's continued success, growth and development is
dependent. The Committee and the Board of Directors endorses and
recommends that the shareholders approve the adoption of that plan.
Compensation Committee
Robert P. Stupp, Chairman
C. Ray Holman
Robert C. Jaudes
William E. Nasser
PERFORMANCE GRAPH
The following performance graph compares the performance of The
Laclede Group's common stock to the Standard & Poor's 500 Stock Index and
to the Standard & Poor's Utilities Index for The Laclede Group's last
five fiscal years. The graph assumes that the value of the investment in
The Laclede Group's common stock and each index was $100 at September 30,
1997, and that all dividends were reinvested. The information contained
in this graph is not necessarily indicative of future performance.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
THE COMPANY, S&P 500, AND S&P UTILITIES
[GRAPH]
--------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------------------------------------------------
Laclede $100.00 $100.14 $104.67 $106.11 $124.59 $127.91
--------------------------------------------------------------------------------------------------------------
S&P 500 $100.00 $109.05 $139.36 $157.88 $115.85 $ 92.12
--------------------------------------------------------------------------------------------------------------
S&P Utilities $100.00 $130.71 $128.40 $184.07 $137.62 $ 88.88
--------------------------------------------------------------------------------------------------------------
14
AUDIT COMMITTEE REPORT
The primary function of the audit committee is oversight. Management
is responsible for the preparation, presentation and integrity of the
Company's financial statements. Management is also responsible for
maintaining appropriate accounting and financial reporting practices and
policies as well as internal controls and procedures designed to provide
reasonable assurance that the Company is in compliance with accounting
standards and applicable laws and regulations. The independent auditors
are responsible for planning and performing an independent audit of the
financial statements in accordance with generally accepted accounting
standards and to issue a report thereon. The audit committee is
responsible for overseeing the conduct of these activities by Company
management and the independent auditors.
In this context, the audit committee has reviewed and discussed the
audited financial statements for fiscal year 2002 with management and the
independent auditors, Deloitte & Touche LLP. The committee has also
discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communications with
Audit Committees).
Deloitte & Touche LLP has provided the committee with the written
disclosures and letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and the committee
discussed with the independent auditors that firm's independence.
Based on the reviews and discussions referred to above, the committee
recommended to the board of directors that the audited financial
statements referred to above be included in the Annual Report on Form
10-K for the year ended September 30, 2002.
Audit Committee
C. Ray Holman, Chairman
Andrew B. Craig, III
Henry Givens, Jr.
W. Stephen Maritz
Mary Ann Van Lokeren
AUDIT FEES
The following table displays the aggregate fees billed for the fiscal
year ended September 30, 2002 by the company's principal accounting firm,
Deloitte & Touche LLP.
Audit Fees............................. $210,000
Financial Information Systems
Design and Implementation Fees....... $ -0-
All Other Fees......................... $160,200
--------
Total Fees............................. $370,200
========
The "All Other Fees" includes fees for (i) audits of benefit plans,
(ii) accounting and tax advice relative to the formation of the holding
company, and (iii) accounting and tax advice relative to the acquisition
and integration of SM&P Utility Resources, Inc., as well as the audits of
SM&P's benefit plans. The Audit Committee has considered whether the
provision of these services is compatible with maintaining the principal
accountant's independence.
COMPENSATION OF DIRECTORS
Retainer and Fees. Directors who are not employees of The Laclede
Group receive a monthly retainer fee of $1,500. Also, during fiscal year
2002, all directors received a fee of $1,000 for each board meeting
attended personally, and $500 for each board meeting attended via
telephone conference call. Directors also received fees of $500 for each
committee meeting attended personally, and $250 for each committee
meeting attended via telephone conference call. Each chairman of a
committee of the board received an additional $1,000 annual fee.
Board members may defer their fees and retainers under a deferred income
plan, under which the deferrals earn interest at rates, depending on
the director's age, based upon Moody's corporate rates.
15
Non-Employee Director Plans. Non-employee directors, i.e., those who
are not employees or former employees of the company or any of its
subsidiaries, in office prior to November 1, 2002 participate in a
retirement plan for non-employee directors. Effective November 1, 2002,
this plan has been amended to only allow as participants those who were
vested under the plan on November 1, 2002. Those directors already vested
in benefits under the plan will continue their participation. The plan
provides benefits for participants who are non-employee directors not
entitled to benefits under the Laclede Gas qualified pension plan and who
serve at least five years as a director or who die while serving as a
director. Pursuant to this plan, the eligible director (the
"participant"), or the participant's designated beneficiary, would,
following the discontinuance of the participant's service as a director
(or following the participant's attaining 65 years of age, if the
participant is not at least 65 years old at the time of such
discontinuance of service), receive an annual retirement payment amount
equal to a percentage (the "applicable percentage") of the annual board
retainer fee at the time of such participant's discontinuance of service.
The applicable percentage is 10% for each of the first ten years of
service of such participant as a director. The annual payments to the
retired participant continue until that participant's death, but if that
participant dies before receiving at least ten annual payments, then that
participant's designated beneficiary, during that beneficiary's lifetime,
receives the remainder of the first ten annual payments that the deceased
participant would have received.
For more than a decade, non-employee directors have participated in a
restricted stock plan for non-employee directors. As noted in the
corporate governance section above, that plan was amended and restated
concurrently with the prohibition on new participants, and removal of
those who were not yet vested, in the retirement plan for non-employee
directors. We are submitting the restricted stock plan for non-employee
directors to shareholders for approval now in recognition of the intent
in the New York Stock Exchange's proposal that such approval be obtained.
A detailed description of this plan begins on page 16 of this proxy
statement and a copy is attached as appendix E. In January 2002, Messrs.
Holman, Maritz, and Nasser and Mrs. Van Lokeren each received a grant of
200 non-vested shares; Dr. Givens received a grant of 100 vested shares
and 100 restricted shares; and Messrs. Craig and Stupp each received a
grant of 200 vested shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2002, Mr. Jaudes served as one of the four members
of the compensation committee. As of October 1, 2002, he no longer serves
on the committee.
EQUITY COMPENSATION PLAN INFORMATION
Currently, the company has no compensation plans under which equity
securities of the company are authorized for issuance. The 1990 Restricted
Stock Plan for Non-Employee Directors uses shares purchased in the open
market by the trustee. The 1990 plan is described in more detail starting on
this page and a copy of the current plan and its previous amendments are
exhibits to the company's annual report on Form 10-K. The company is seeking
shareholder approval of the restricted stock plan for non-employee
directors, which will continue the use of shares purchased by the trustee in
the open-market.
PROPOSAL 2
APPROVAL OF RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
PURPOSE OF THE PLAN AND REASON FOR THE PROPOSAL
The restricted stock plan for non-employee directors has been in
place since 1990. The principal purpose of the plan is to attract and
retain qualified persons who are not employees or former employees of the
company or any of its subsidiaries for service as members of the board of
directors and to encourage ownership in the company by such non-employee
directors by granting shares of common stock subject to the restrictions
described below. As indicated previously, this plan was amended and
restated concurrently with prohibition of new participants, and removal
of participants who were not vested on November 1, 2002,
16
in the retirement plan for non-employee directors. The restricted stock
plan as amended and restated is attached to this proxy statement as
appendix E. The principal change to the plan is the increase in the
annual grants to those non-employee directors who are not participants in
the retirement plan for non-employee directors. We are submitting this
plan to you for approval in anticipation of the changes to the New York
Stock Exchange's requirements.
Under the plan, the trustee, UMB Bank, n. a., acquires the shares for
the grants in the open market and holds the shares as trustee for the
benefit of the non-employee directors until the restrictions expire. The
grants of shares under the plan have been disclosed in the past in the
company's proxy statements under Compensation of Directors and filed as
an exhibit to the company's annual report on Form 10-K.
SUMMARY DESCRIPTION OF THE RESTRICTED STOCK PLAN
ELIGIBILITY
A non-employee director is a director who is not and never has been
employed by the company or any of its subsidiaries. Seven of the nine
current directors, as well as the director nominee, qualify as non-
employee directors.
GRANTS
Each new non-employee director, including one who is elected to the
board at a time other than an annual meeting of shareholders, receives an
initial grant of 800 shares of restricted stock. Annually thereafter each
non-employee director who is not a participant in the retirement plan for
non-employee directors will receive on the annual meeting date an
additional grant of 350 shares for service rendered during the year
preceding the annual meeting, while each non-employee director who is a
participant in the retirement plan for non-employee directors will
receive an annual grant of 200 shares on the annual meeting date for the
prior year's service. Prior to the November 1, 2002 amendment and
restatement, the annual grant was 200 shares to each non-employee
director on the annual meeting date for the prior year's service.
PLAN BENEFITS
Assuming the plan as amended and restated is approved by
shareholders, the following table sets forth the name of each
non-employee director and director nominee eligible to receive a grant
under the plan on January 30, 2003, the number of shares that each such
non-employee director and non-employee directors as a group may be
granted on January 30, 2003 and the value of such shares.
RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
JANUARY 30, 2003 GRANTS
NAME OF NON-EMPLOYEE DIRECTOR DOLLAR VALUE(1) NUMBER OF SHARES
----------------------------- --------------- ----------------
Andrew B. Craig, III....................................... $ 4,590 200
Arnold W. Donald........................................... 18,360 800
Henry Givens, Jr........................................... 4,590 200
C. Ray Holman.............................................. 4,590 200
W. Stephen Maritz.......................................... 8,032 350
William Nasser............................................. 4,590 200
Robert Stupp............................................... 4,590 200
Mary Ann Van Lokeren....................................... 4,590 200
------- -----
Non-employee directors as a group.......................... $53,932 2,350
-------
(1) Based upon the closing price of the company's common stock on the New York
Stock Exchange on November 15, 2002.
17
SHARES
A total of 50,000 shares of common stock will be available for grants
under the plan. Shares for grants under the plan are purchased on the
open market by the trustee and held in trust by the trustee for the
account of the non-employee director participants until they are vested.
Any shares that are forfeited shall be available for future grants.
Grants under the plan are in addition to, and do not replace, any cash or
other compensation arrangement available to non-employee directors. If
the Company subdivides or continues its outstanding common stock into a
greater or lesser number of shares, or if the board shall determine that
a stock dividend, reclassification, business combination, exchange of
shares, warrants or rights offering to purchase shares or other similar
event affects the shares such that an adjustment is required to preserve
the benefits or potential benefits intended to be made available under
the plan, the board may make adjustments to the number of shares that may
be granted and the number of shares subject to outstanding grants under
the plan.
RESTRICTIONS
Participants receive cash dividends declared and paid on the
company's common stock and may vote the shares awarded even while the
shares are restricted. Restricted shares may not be sold, pledged or
otherwise transferred, except in accordance with the terms of the plan.
Shares vest depending on the participant's age entering the plan and
years of service as a director.
If a non-employee director first becomes a director under the age of
60, no shares will vest until the director reaches age 65. If the
participant is a director on the participant's 65th birthday, one-half of
the restricted shares vest on the 65th birthday, and at each succeeding
annual meeting one-half of the shares vest automatically. If that
participant continues to serve as a director until age 70, all remaining
restricted shares vest and become unrestricted on the participant's 70th
birthday, and at each succeeding annual meeting the shares granted vest
automatically.
If a non-employee director first becomes a director from age 60 to
64, no shares will vest for five years. If that participant is still a
director on the participant's fifth anniversary date of entry into the
plan, one-half of the restricted shares vest, and at each succeeding
annual meeting one-half of the shares vest automatically. If that
participant continues to serve as a director on or after the
participant's 70th birthday, all remaining shares vest on the
participant's 70th birthday, and at each succeeding annual meeting the
shares granted vest automatically.
If a non-employee director first becomes a director from age 65 to
69, no shares will vest for two years. If the participant continues to
serve as a director on that participant's second anniversary date of
entry into the plan, one-half of the restricted shares vest, and at each
succeeding annual meeting one-half of the shares vest automatically. If
that participant continues to serve as a director on or after the
participant's 70th birthday, all remaining shares vest on the
participant's 70th birthday, and at each succeeding annual meeting the
shares granted vest automatically.
If a non-employee director first becomes a director at age 70 or
over, that participant's grants under the plan will be one-half
restricted shares and one-half vested shares. On that participant's first
anniversary date of entry into the plan, if the participant continues to
serve as a director, the remaining restricted shares vest, and at each
succeeding annual meeting 200 shares vest.
In any event, a non-employee director will become fully vested in
restricted shares granted under the plan after twelve years of continuous
service, and all shares granted to the participant on and after the
twelfth anniversary will be fully vested. Shares also become fully vested
in the event of the death or disability of the participant or following a
change in control. The plan generally defines a change in control as (a)
an acquisition of 30% or more of the company's common stock or voting
power, excluding certain acquisitions by specified types of affiliates,
(b) a change in the composition of a majority of the company's board of
directors without the approval of the incumbent directors as defined in
the plan, (c) a reorganization, merger or consolidation, unless the
company's shareholders possess more than 50% of the surviving company's
outstanding common stock and the combined voting power of the outstanding
voting
18
stock entitled to vote in the election of directors, (d) a shareholder
approved liquidation or dissolution of the company, or (e) the sale or
disposition of all or substantially all of the company's assets.
AMENDMENT
The plan may be terminated by the board at any time. The board may
also amend the plan provided that no amendment may be made without the
approval of shareholders that would (a) change the types of awards
available under the plan, (b) materially increase the aggregate number of
shares that may be granted under the plan (except for the equitable
adjustments referred to above), (c) change the category of directors
eligible to receive restricted stock under the plan, or (d) materially
extend the maximum period during which restricted stock may be granted
under the plan. Furthermore, the plan may not be amended more than once
every six months, other than to comply with changes in the Internal
Revenue Code or the rules thereunder.
FEDERAL INCOME TAX MATTERS
A non-employee director who receives a grant of restricted stock and
who does not elect to be taxed at the time of grant will not recognize
taxable income upon such grant, and the company will not be entitled to a
deduction until the termination of the restricted period. Upon the
termination of the restricted period, the director will recognize taxable
ordinary income in an amount equal to the fair market value of the common
stock at that time, and the company will be entitled to a deduction in
the same amount. However, a non-employee director may elect to recognize
taxable ordinary income in the year the shares are granted in an amount
equal to their fair market value at that time, determined without regard
to the restrictions. In that event, the company will be entitled to a
deduction in such year in the same amount, and any gain or loss
recognized by the director upon subsequent disposition of the common
stock will be capital gain or loss. Any dividends with respect to the
restricted stock that are paid or made available to a non-employee
director (who has not elected to be taxed on the date of grant) while the
shares remain forfeitable are treated as additional compensation taxable
as ordinary income to the director and deductible to the company. If the
director has elected to be taxed at the time of grant, the dividends
represent ordinary dividend income to the director that are not
deductible to the company. If the director elects to be taxed on the
restricted stock on the date of grant and the director subsequently
forfeits the shares, the director is not entitled to a deduction as a
consequence of such forfeiture and the company must include as ordinary
income the amount it previously deducted in the year of grant with
respect to such shares.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF
-----
THE LACLEDE GROUP, INC. RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
PROPOSAL 3
APPROVAL OF THE LACLEDE GROUP EQUITY PLAN
PURPOSE OF THE PLAN AND REASON FOR THE PROPOSAL
Over the last few fiscal years, the board and the management of the
company have focused increased attention on the company's long-term
strategy. During the 2002 fiscal year, the compensation committee has
been meeting and working with outside advisors to align the company's
compensation program for key employees with incentives to successfully
execute the strategy and increase shareholder value. The advisors
recommended, and the compensation committee agreed, that the company's
compensation program should have an equity component to link these key
employees' interests with those of the shareholders. Unlike many
companies, most key employees have had no equity component in their
compensation. The compensation committee believes that the implementation
of The Laclede Group equity plan (the "Equity Plan") will achieve the
goal of aligning these interests. A copy of the Equity Plan is included
as appendix F.
19
The purpose of the Equity Plan is to provide a more competitive
compensation program and to attract and retain those executive and other
key employees essential to achieve the company's strategic objectives. To
accomplish this purpose, the compensation committee may grant awards
under the Equity Plan that may be earned by achieving performance
objectives and/or other criteria as determined by the compensation
committee.
This plan is being submitted to shareholders for approval in
accordance with the proposed New York Stock Exchange requirement relative
to shareholder approval as well as the Internal Revenue Code.
SUMMARY DESCRIPTION OF THE PLAN
Under the terms of the Equity Plan, if adopted by the shareholders,
key employees of the company and its subsidiaries, as determined in the
sole discretion of the administrator, will be eligible to receive
(a) restricted shares of common stock, (b) performance awards, (c) stock
options exercisable into shares of common stock that may or may not
qualify as incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") (options so
qualifying are called "incentive stock options"), (d) stock appreciation
rights, and (e) stock units, as well as any other stock-based awards not
inconsistent with the Equity Plan. Each award under the Equity Plan shall
have a minimum vesting period of at least one year.
TYPES OF AWARDS
Restricted Stock. The administrator may issue or transfer (other than
upon exercise of stock options or as performance awards) shares of common
stock subject to the restrictions and conditions specified by the
administrator at the time of grant. The period of restriction shall be
determined by the administrator at the time of grant. During the period
of restriction, holders of restricted stock shall be entitled to receive
all dividends and other distributions paid with respect to such stock and
to vote such stock without limitation. Restricted stock may be subject to
(a) restrictions on the sale or other disposition thereof, (b) rights of
the company to reacquire the restricted stock upon termination of the
participant's employment within specified periods, (c) representation by
the participant that he or she intends to acquire restricted stock for
investment and not for resale, and (d) such other restrictions,
conditions and terms as the administrator deems appropriate.
Performance Awards. The administrator may grant performance awards
consisting of shares of common stock, monetary units payable in cash or a
combination of common stock and cash. These grants would result in the
issuance, without payment therefor, of common stock or the payment of
cash upon the achievement of certain pre-established performance criteria
(such as measures of operating stability and reliability, efficiencies,
employee safety and attendance, return on assets, return on equity,
return on investments, earnings per share, net income, increases in share
price, total shareholder returns, cash flow or measures of customer
service or satisfaction) during a specified performance period. A change
of goals made in good faith is allowed upon extraordinary events or other
circumstances as determined by the administrator. The participant will
have no right to receive dividends on or to vote any shares subject to
performance awards until the awards are actually earned and the shares
are issued. If the goals are not reached, no payments are made to the
participants.
Stock Options. Stock options granted under the Equity Plan shall
entitle the holder to purchase common stock at a purchase price
established by the administrator, which price shall not be less than the
fair market value (in the case of an incentive stock option, 110% of fair
market value if the optionee owns 10% of combined voting power of all
owners of stock of the company or a subsidiary) of common stock on the
date of grant. The administrator shall determine the terms of such stock
options and the times at, and conditions under which, such stock options
will become exercisable. The aggregate fair market value, determined as
of the time an option is granted, of the stock with respect to which
incentive stock options are exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000. There is no minimum
number of shares for which a stock option may be granted.
Stock Appreciation Rights. The administrator may grant stock
appreciation rights giving the holder thereof a right to receive, at the
time of surrender, a payment equal to the difference between the fair
20
market value of the stock on the date of surrender of the stock
appreciation right and the exercise price of the stock appreciation right
established by the administrator at the time of grant, subject to any
limitation imposed by the administrator in its sole discretion. In the
administrator's discretion, the value of a stock appreciation right may
be paid in cash or common stock, or a combination thereof. A stock
appreciation right may be exercised (a) in lieu of a stock option, (b) in
conjunction with the exercise of a stock option, (c) upon lapse of a
stock option, or (d) independent of the exercise of a stock option. At
the time of grant, the administrator may establish a maximum amount per
share that will be payable upon exercise of a stock appreciation right
and may impose conditions on the exercise of a stock appreciation right.
The administrator will establish the term of any stock appreciation
right, but in no event will a stock appreciation right be exercisable
after ten years from the date of grant.
Stock Units. The administrator may issue stock units representing the
right to receive shares of common stock at a designated time in the
future, subject to the terms and conditions as established by the
administrator in its sole discretion. A holder of stock units generally
does not have the rights of a shareholder until receipt of the common
stock, but, in the administrator's sole discretion, may receive payments
in cash or adjustments in the number of stock units equivalent to the
dividends the holder would have received if the holder had been the owner
of share of common stock instead of stock units.
CHANGE IN CONTROL
Certain provisions of the Equity Plan apply in the event of a change
in control of the company. The Equity Plan generally defines a change in
control as (a) an acquisition of 30% or more of the company's common
stock or voting power, excluding certain acquisitions by specified types
of affiliates, (b) a change in the composition of a majority of the
company's board of directors without the approval of the incumbent
directors as defined in the Equity Plan, (c) a reorganization, merger or
consolidation, unless the company's shareholders possess more than 50% of
the surviving company's outstanding common stock and the combined voting
power of the outstanding voting stock entitled to vote in the election of
directors, (d) a shareholder approved liquidation or dissolution of the
company, or (e) the sale or disposition of all or substantially all of
the company's assets.
All performance awards outstanding as of the date of the change in
control become payable immediately following such change and are computed
as if the target performance criteria were achieved. Any such award shall
be prorated to the date of the change in control based on the period of
time elapsed from the date of the award to the date of the change in
control over the performance period for such award. If a participant's
employment with the company and its subsidiaries is terminated by the
company or applicable subsidiary within two years following the change in
control and the termination is not for cause, as defined in the Equity
Plan, (a) all outstanding stock options immediately vest and become
exercisable, (b) a pro-rata portion of stock appreciation rights granted
to a participant that have not become exercisable become vested and
exercisable, and (c) a pro-rata portion of any restrictions on restricted
stock or stock units lapse. The pro-rata portion shall be determined in
each case based upon the period of time from the date of grant to the
date the participant's employment terminates, the term of such award, and
the portion of such award that was vested or with respect to which
restrictions lapsed prior to the date the participant's employment
terminates. Generally, "cause" means termination of a participant's
employment with the company or any of its subsidiaries upon (i) willful
and continued failure by the participant to perform substantially the
duties of employment assigned by the company (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 company that
specifically identifies the manner in which it is believed that the
participant has not substantially performed such duties or (ii) willful
engagement by the participant in misconduct that is materially injurious
to the company.
AUTHORIZED SHARES
The total number of shares that may be issued pursuant to awards
under the Equity Plan may not exceed 1,250,000. Stock underlying
outstanding options, stock appreciation rights or performance awards will
reduce the number of shares available to be issued under the Equity Plan.
Generally, when any award is forfeited, terminates, expires or lapses or
any stock appreciation rights are exercised for cash, the shares
21
subject to that award are again available under the Equity Plan. If
shares are used to pay an exercise price, only those shares issued net of
the shares delivered will be deemed to have been issued under the Equity
Plan. Similarly, shares not delivered to a participant because such
shares are withheld to satisfy applicable tax withholding obligations
will not be deemed to have been delivered for purposes of determining the
number of shares available under the Equity Plan.
ANTI-DILUTION
In the event of any change in our capitalization without new
consideration to the company, such as by stock split or stock dividend,
the total number of shares reserved for issuance under the Equity Plan
and the number of shares covered by each outstanding benefit shall be
adjusted so that the aggregate consideration payable to the company, if
any, and the value of each such benefit shall not be changed. Awards may
also contain provisions for their continuation or for other equitable
adjustments after changes in the common stock resulting from
reorganization, sale, merger, consolidation, issuance of stock rights or
warrants, or similar occurrence. Fractional shares are rounded down to
the nearest whole share. Further, the board may authorize the issuance or
assumption of benefits in connection with any merger, consolidation,
acquisition of property or stock, or reorganization upon such terms and
conditions as it may deem appropriate.
ADMINISTRATION
The board has delegated authority for the administration of the
Equity Plan to the compensation committee. The compensation committee
has exclusive authority to interpret and administer the Equity Plan,
establish appropriate rules relating to the Equity Plan, delegate some or
all of its authority under the Equity Plan and to take all such steps and
make all such determinations in connection with the Equity Plan and the
benefits granted under the Equity Plan as it may deem necessary or
advisable. Any decision of the committee shall be final, conclusive and
binding on all parties concerned.
PERSONS ELIGIBLE
The administrator may grant awards under the Equity Plan to such
officers and key employees of the company or any of its subsidiaries as
it determines in its sole discretion. Currently, less than 60 employees
are eligible to participate under the Equity Plan. The maximum number of
shares subject to stock options or stock appreciation rights that may be
awarded under the Equity Plan to any individual in any calendar year is
125,000 shares and the maximum number of shares that may be granted in
the form of restricted stock or stock units to all participants over the
life of the Equity Plan is 125,000.
AMENDMENT OR TERMINATION
The board may amend the Equity Plan; provided that no amendment shall
be made without the approval of shareholders if such amendment would
increase the total number of shares that may be issued under the Equity
Plan, increase the amount or type of benefits that may be granted under
the Equity Plan, modify the requirements for eligibility for benefits
under the Equity Plan or reprice any of the awards under the Equity Plan.
Further, no amendment will reduce the amount of any outstanding award or
change the terms and conditions of an award to the detriment of the
participant without the participant's consent.
Unless terminated earlier by the board, the Equity Plan will
terminate on September 26, 2012. Awards outstanding at the termination of
the Equity Plan shall continue in accordance with their terms and shall
not be affected by such termination.
FEDERAL INCOME TAX CONSIDERATIONS
RESTRICTED STOCK
Subject to a voluntary election by the recipient under Section 83(b)
of the Code, a recipient will realize income as a result of the award of
restricted stock at the time the restrictions expire on such shares. An
election pursuant to Section 83(b) of the Code would cause the recipient
to realize ordinary income in the year in which such award was granted.
The amount of income realized will be the difference between fair
22
market value of the shares on the date such restrictions expire (or on
the date of issuance of the shares, in the event of a Section 83(b)
election) over the purchase price, if any, of the shares. The company
generally will be entitled to a deduction equal to the income realized by
the recipient in the year in which the recipient is required to report
such income.
PERFORMANCE AWARDS
A recipient will realize ordinary income as a result of a performance
award at the time the award is paid or made available. The amount of
income realized by a recipient will be equal to the fair market value of
the shares on the date of issuance, in the case of a stock award, and to
the amount of the cash paid, in the event of a cash award. The company
will be entitled to a corresponding deduction equal to the income
realized in the year of such issuance or payment.
INCENTIVE STOCK OPTION
Recipients of incentive stock options generally do not recognize
taxable income and the Company is not entitled to a deduction on the
grant or exercise of incentive stock options. If a recipient holds the
shares acquired for at least one year from the exercise date and does not
dispose of the shares for at least two years from the grant date, the
recipient's gain or loss upon a subsequent sale will be long-term capital
gain or loss equal to the difference between the amount realized on the
sale and the recipient's basis in the shares acquired. The company will
not be entitled to a deduction. If a recipient disposes of the shares
acquired without satisfying the required minimum holding period, such
"disqualifying disposition" will give rise to ordinary income equal to
the excess of the fair market value of the shares acquired on the
exercise date (or, if less, the amount realized upon disqualifying
disposition) over the recipient's basis in the shares acquired. The
company will ordinarily be entitled to a deduction equal to the amount of
the ordinary income resulting from a disqualifying disposition. A
recipient does recognize income for alternative minimum tax ("AMT")
purposes upon the exercise of incentive stock options in an amount equal
to the excess of the fair market value of the shares acquired over the
exercise price of the stock options; that amount is also included in the
recipient's AMT basis in the shares acquired. Upon disposition of the
stock acquired that satisfies the required minimum holding period
requirement, AMT gain or loss is equal to the excess of the amount
realized less the recipient's AMT basis. Income from a disqualifying
disposition generally is not income for AMT purposes.
NONQUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
A recipient generally does not recognize taxable income on the grant
of nonqualified stock options or stock appreciation rights, but does
recognize ordinary income on the exercise date. The amount of income in
the case of a nonqualified stock option exercise is the amount by which
the fair market value of the shares received on the date of exercise
exceeds the option price. The amount of income in the case of the
exercise of a stock appreciation right is the amount of cash received
plus the fair market value of any shares received. The company will
ordinarily be entitled to a deduction on the exercise date equal to the
ordinary income recognized by the recipient from the exercise of the
nonqualified stock options and stock appreciation rights.
STOCK UNITS
A recipient will realize ordinary income as a result of an award of
stock units at the time shares of common stock are issued in an amount
equal to the fair market value of such shares at that time. The company
will be entitled to a corresponding deduction equal to the income
realized in the year of such issuance.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
-----
THE APPROVAL OF THE LACLEDE GROUP
EQUITY PLAN
23
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors, upon recommendation of its audit committee,
recommends that you ratify the appointment of Deloitte & Touche LLP,
certified public accountants, to audit the books, records and accounts of
The Laclede Group and its subsidiaries for the fiscal year ending
September 30, 2003. Deloitte & Touche LLP is the successor to the firm
that acted as auditors of Laclede Gas since 1953. It is expected that a
representative of Deloitte & Touche LLP will be present at the annual
meeting, will have an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate
questions.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
-----
THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS
OTHER MATTERS
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
Under our bylaws, certain procedures are provided which a shareholder
must follow to nominate persons for election as directors or to introduce
an item of business at an annual meeting of shareholders. These
procedures provide that nominations for director nominees and/or an item
of business to be introduced at an annual meeting of shareholders must be
submitted in writing to the corporate secretary of The Laclede Group,
720 Olive Street, St. Louis, Missouri 63101. For the annual meeting of the
shareholders of The Laclede Group to be held on January 29, 2004, the
nomination or proposed item of business must be received by The Laclede
Group no earlier than October 31, 2003 and no later than November 30,
2003 (not more than 90 days prior to and not less than 60 days prior to
January 29, 2004). The written notice must satisfy certain requirements
specified in the bylaws of The Laclede Group, a copy of which will be
sent to any shareholder upon written request to the corporate secretary.
The board is not aware of any matters that are expected to come
before the annual meeting other than those referred to in this proxy
statement. If any other matter comes before the meeting, the persons
named in the accompanying proxy intend to vote the proxies in accordance
with their best judgment.
The chairman of the board may refuse to allow the transaction of any
business or to acknowledge the nomination of any person, not made in
compliance with the procedures set forth in the bylaws of The Laclede
Group.
Under the rules of the Securities and Exchange Commission,
shareholder proposals intended to be included in the proxy statement for
the annual meeting of shareholders in January 2004 must be received by
the corporate secretary of The Laclede Group at its principal office at
720 Olive Street, St. Louis, Missouri 63101 by August 26, 2003.
PROXY SOLICITATION
We will pay the expense of soliciting proxies. Proxies may be
solicited on our behalf by officers or employees in person or by
telephone, electronic transmission or facsimile transmission. We have
hired Morrow & Co. to assist us in the solicitation of proxies for a fee
of $7,500 plus expenses for those services.
24
APPENDIX A
THE LACLEDE GROUP, INC.
CORPORATE GOVERNANCE COMMITTEE CHARTER
PURPOSE
The purpose of the Corporate Governance Committee is to consider and
make recommendations to the Board relative to corporate governance and
the Board's corporate governance principles as well as to assist the
Board of Directors in identifying individuals qualified to become Board
members and to recommend to the Board director nominees for election by
the Company's shareholders or for appointment by the Board in the event
of a vacancy.
RESPONSIBILITIES
The Committee shall be responsible for:
* Identifying and recommending to the Board director nominees as
required to provide a balance of independence, knowledge,
experience and capability on the Board with qualifications in line
with those set forth in the Company's Corporate Governance
Guidelines;
* Advising the Board on the size and composition of the Board in
light of the operating requirements of the Company and current
corporate governance practices;
* Making recommendations to the Board regarding corporate governance
matters and practices, including the evaluation and effectiveness
of the Board; and questions of possible conflicts of interest of
Board members and senior executives;
* Evaluating, from time to time, compensation practices and policies
relating to director compensation and providing its evaluation to
the Compensation Committee for its consideration;
* Reporting to the Board after each of the Corporate Governance
Committee's meetings; and
* Performing an annual evaluation of the Corporate Governance
Committee's performance.
MEMBERSHIP
The Corporate Governance Committee shall consist of at least three
members of the Board of Directors as the Board shall from time to time
determine. Each member shall at a minimum meet the requirements to be
"independent" as that term is defined by the listing standards of The New
York Stock Exchange at the time of the member's appointment to the
Committee.
The Board of Directors shall approve the members of the Committee on
an annual basis at its first meeting following the Annual Meeting of
Shareholders. Unless the Board approves a Chair, the members of the
Committee shall designate a Chair by majority vote of the members of the
Committee. Committee members may be removed from the Committee by the
Board of Directors.
MEETINGS
The Committee shall meet at least once a year or more frequently if
circumstances dictate. A majority of the members shall constitute a
quorum and a majority of the members present shall decide any question
brought before the Committee. The Chair of the Committee shall establish
such rules as may from time to time be necessary and proper for the
conduct of the Committee's business. The Committee shall have authority
to delegate a portion of its authority to such subcommittees as the
Committee deems necessary.
CONSULTANTS
The Committee shall have the authority, at Company expense, to retain
and terminate consultants of its selection to advise it, including the
authority to approve the firm's fees and other retention terms.
A-1
APPENDIX B
THE LACLEDE GROUP, INC.
COMPENSATION COMMITTEE CHARTER
PURPOSE
The purpose of the Compensation Committee is to (a) assist the Board
of Directors in the discharge of its responsibility relative to the
compensation of the Company's Chief Executive Officer and other senior
executives, (b) review and make recommendations to the Board relative to
the Company's incentive compensation and equity-based plans, (c) issue an
annual report on executive compensation in accordance with applicable
requirements, including rules and regulations of the Securities and
Exchange Commission, for inclusion in the Company's proxy statement and
(d) make recommendations to the Board regarding Director compensation.
MEMBERSHIP
The Compensation Committee shall consist of at least three members of
the Board, as the Board shall from time to time determine. Each member
shall be:
(a) "independent" as that term is defined by the listing standards of
the NYSE at the time of the member's appointment to the
Committee;
(b) a "non-employee director" as that term is defined under the
Securities and Exchange Commission Rule 16b-3; and
(c) an "outside director" as that term is defined for purposes of the
Internal Revenue Code, Section 162(m).
The Board of Directors shall approve the members of the Committee on
an annual basis at its first meeting following the Annual Meeting of
Shareholders. Unless the Board approves a Chair, the members of the
Committee shall designate a Chair by majority vote of the members of the
Committee. Committee members may be removed from the Committee by the
Board of Directors.
DUTIES AND RESPONSIBILITIES
CEO COMPENSATION
The Committee shall be responsible for:
* After reviewing the CEO's recommendations for corporate goals and
objectives, determining those corporate goals and objectives that
are relevant for the CEO's compensation for the next year, which
are then submitted to the entire Board for approval;
* Evaluating the performance of the CEO in meeting those goals and
objectives with input from the full Board at year end;
* Considering the performance of the Company and relative total
shareholder return;
* Considering the value of such awards granted to other CEOs at
comparable companies;
* Considering the awards to the CEO granted in prior years; and
* Based upon the evaluation and considerations outlined above,
setting and recommending to the full Board for its approval the
CEO's current compensation and long-term compensation awards.
B-1
EXECUTIVE COMPENSATION
The Committee shall also be responsible for:
* Periodically reviewing the Company's philosophy regarding
compensation and counseling with the CEO relative to different
compensation approaches;
* Annually reviewing market data to assess the Company's competitive
position for the components of its executive compensation by
reviewing current industry compensation surveys and other relevant
supplemental compensation information;
* Administering and making recommendations to the Board regarding the
adoption, amendment or rescission of incentive compensation plans
and equity-based plans, including:
* approving option guidelines and general size of overall grants,
* making grants,
* interpreting the plans,
* determining rules and regulations relating to the plans,
* modifying or canceling existing grants, and
* imposing limitations, restrictions and conditions upon any award
as the Committee deems appropriate;
* Assuring that total compensation paid to the Company's senior
executives is reasonable;
* Assuring that payments under the incentive plans comply with the
requirements set forth in such plans;
* After reviewing recommendations made by the CEO for the
compensation of the Company's officers, presenting the Committee's
suggestions for such compensation to the Board for approval; and
* Annually issuing a report on executive compensation in accordance
with applicable requirements, including the rules and regulations
of the Securities and Exchange Commission, for inclusion in the
Company's proxy statement.
BOARD COMPENSATION
The Committee shall further be responsible for:
* Making recommendations to the Board of Directors regarding the
compensation of the Board.
OTHER COMMITTEE FUNCTIONS
The Committee shall:
* Report to the Board after each of the Committee's meetings; and
* Perform an annual evaluation of the Committee's performance.
MEETINGS
The Committee shall meet at least once a year or more frequently if
circumstances dictate. A majority of the members shall constitute a
quorum and a majority of the members present shall decide any question
brought before the Committee. The Chair of the Committee shall establish
such rules as may from time to time be necessary and proper for the
conduct of the Committee's business. The Committee shall have authority
to delegate a portion of its authority to such subcommittees as the
Committee deems necessary.
CONSULTANTS
The Committee shall have authority, at Company expense, to retain and
terminate consultants of its selection to advise it, including the
authority to approve the consultants' fees and other retention terms.
B-2
APPENDIX C
THE LACLEDE GROUP, INC.
AUDIT COMMITTEE CHARTER
(ADOPTED BY THE BOARD OF DIRECTORS ON NOVEMBER 21, 2002)
PURPOSE
The principal purpose of the Audit Committee is to assist the Board
of Directors in fulfilling the Board's oversight responsibilities with
respect to the quality and integrity of the Company's financial
statements, financial reporting process, and systems of internal controls
regarding finance, accounting, legal and regulatory compliance. The
Committee also assists the Board in monitoring the independence and
performance of the Company's independent auditors, the performance of the
Internal Audit department and the operation of ethics programs as
established by management and the Board.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access
to the independent auditors as well as all books, records, facilities and
personnel of the Company. The Audit Committee has the ability to retain,
at the Company's expense, special legal, accounting or other consultants
or experts it deems necessary in the performance of its duties.
COMPOSITION
The Audit Committee shall consist of at least three (3) Directors.
Members of the Committee shall be appointed annually by the Chairman of
the Board of Directors subject to the approval of the full Board of
Directors. Committee members shall satisfy the Audit Committee member
requirements of the New York Stock Exchange, Inc. and the federal
securities laws, as such requirements are interpreted by the Board of
Directors in its business judgment, including that: 1) each member is
independent of management and the Company and free from any relationship
that would interfere with the exercise of independent judgment as a
Committee member, 2) each member is financially literate, or shall become
financially literate within a reasonable period of time after appointment
to the Committee, and 3) at least one member has accounting or related
financial management expertise. The duly appointed members of the Audit
Committee shall serve until replaced. The Chief Executive Officer of the
Company and/or his or her representative may participate in meetings but
is not a voting member.
QUORUM
A majority of the members of the Committee shall constitute a quorum.
MEETINGS
The Committee shall meet at least four times per year and at such
other times as the Committee deems necessary, upon the call of the
Chairman of the Board or the Chairman of the Audit Committee. The
Chairman of the Audit Committee will establish the agenda for each
meeting. Appropriate members of management and representatives of the
independent auditing firm retained by the Company will be invited to
attend meetings of the Committee as requested by the Audit Committee
Chairman. At least twice each year, management, the independent auditors
and the Company's senior internal audit executive will each meet
separately in executive session with the Committee to discuss any matters
that the Committee or any of these groups believes should be discussed.
RESPONSIBILITIES OF THE AUDIT COMMITTEE
The primary function of the Audit Committee is oversight. The
Company's management is responsible for the preparation, presentation and
integrity of the Company's financial statements. Management is also
responsible for maintaining appropriate accounting and financial
reporting practices and policies as well as internal controls and
procedures designed to provide reasonable assurance that the Company
is in
C-1
compliance with accounting standards and applicable laws and regulations.
The independent auditors are responsible for planning and performing a
proper audit of the Company's annual financial statements. The
independent auditors are also responsible for performing reviews of the
Company's quarterly financial statements prior to the filing of each
quarterly report with the Securities and Exchange Commission (SEC) on
Form 10-Q. The Committee is responsible for overseeing the conduct of
these activities by the Company's management and the independent
auditors.
In fulfilling the Audit Committee's responsibilities hereunder, it is
recognized that members of the Committee are not, and do not represent
themselves to be, accountants or auditors by profession or experts in the
fields of accounting or auditing. It is not the duty of the Audit
Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and prepared in accordance
with generally accepted accounting principles. As such, the Committee is
not providing any expert or special assurances as to the Company's
financial statements or any professional certification as to the
independent auditors' work. Each member of the Audit Committee shall be
entitled to rely on (i) the integrity of those persons and organizations
within and outside of the Company from which it receives information and
(ii) the accuracy of the financial and other information provided to the
Committee by such persons or organizations absent actual knowledge to the
contrary (which shall be promptly reported to the Board of Directors).
In carrying out its oversight responsibilities, the Committee shall
perform the following functions:
OVERSIGHT OF THE INDEPENDENT AUDITORS
A. Instruct the independent auditors that they are ultimately
accountable to the Board of Directors and Audit Committee.
B. Evaluate and recommend to the Board of Directors a public
accounting firm to be placed in nomination for shareowner
ratification as the Company's independent auditors for the ensuing
year.
C. Review the scope and staffing of the annual audit of the Company's
financial statements.
D. Review the fees paid to the independent auditors for audit and
other significant non-audit services. Consider whether the
provision of these other non-audit services is compatible with
maintaining the independent auditors' independence.
E. Receive the independent auditors' annual written statement of
independence delineating the relationships between the independent
auditors and the Company consistent with Independence Standards
Board Statement No. 1; discuss with the independent auditors the
scope of any relationships or services disclosed in the annual
statement of independence that may impact the independent
auditors' objectivity and independence; and if so determined by
the Audit Committee, recommend that the Board of Directors take
appropriate action in response to the independent auditors'
statement to satisfy the Board of the auditors' independence.
OVERSIGHT OF THE INTERNAL AUDITORS
A. Review and approve the scope of the annual audit plan, adequacy of
resources and organizational structure of the internal audit
department.
B. Review the appointment and replacement of the senior internal
audit executive.
C. Review, as appropriate, significant reports prepared by the
internal audit department together with management's response and
follow-up to these reports.
D. Discuss with the Company's General Counsel those legal and
regulatory matters involving the Company that may have a material
impact on the Company's financial statements.
OVERSIGHT OF MANAGEMENT'S FINANCIAL REPORTING PROCESS
A. Review the results of the annual audit of the Company's financial
statements with management, the independent auditors and internal
auditors prior to filing or distribution. Discuss the nature of
any
C-2
significant changes, adjustments, reclassifications, or disclosures
proposed by the independent auditors and the judgment of the
independent auditors concerning the quality of the Company's
accounting principles and underlying financial estimates.
B. Review with financial management and the independent auditors the
Company's quarterly financial results prior to release of earnings
and/or the filing of Form 10-Q. The Chairman of the Committee may
represent the entire Committee for purposes of this review.
C. Discuss with the CEO, CFO, and independent auditors any matters
brought to the attention of the Committee by the CEO/CFO as
required pursuant to their certifications under SEC Exchange Act
Rules 13a-14 and 15d-14. These matters would include 1) any
significant deficiencies in the design or operations of internal
controls which could adversely affect the Company's ability to
record, process, summarize, and report financial data and have
identified for the Company's independent auditors any material
weaknesses in internal controls; and 2) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal controls.
D. Discuss certain matters, if any, required to be communicated to
the Committee by the independent auditors in accordance with
Statement on Auditing Standards No. 61.
E. Obtain from the independent auditors assurance that the audit was
conducted in a manner consistent with the procedures set forth in
Section 10A of the Securities Exchange Act of 1934, as amended.
F. In consultation with management, the independent auditors and the
internal auditors, consider the adequacy and integrity of the
Company's financial reporting processes and internal controls.
Discuss significant financial risk exposures and actions that
management has taken to monitor, control, and report such
exposures. Review significant findings prepared by the independent
auditors and the internal audit department together with
management's responses.
G. Based upon the reviews and discussions with management, the
independent auditors and internal auditors, recommend to the Board
of Directors whether the audited financial statements should be
included in the Company's annual Form 10-K.
OTHER DUTIES AND RESPONSIBILITIES
A. Annually review, with the assistance of the internal auditors, the
Company's Code of Business Conduct and report on such review to
the Company's full Board of Directors.
B. Prepare the Audit Committee report required by the rules of the
SEC to be included in the Company's annual proxy statement to
shareholders.
C. Annually review and reassess the adequacy of the Audit Committee
Charter and recommend any proposed changes to the Board of
Directors for approval. Ensure that the Audit Committee Charter is
published in the Company's proxy at least every three years in
accordance with SEC regulations.
D. Perform such other functions as assigned by law, the Company's
charter or bylaws, or the Board of Directors.
E. Report to the Board of Directors after each Audit Committee
meeting.
C-3
APPENDIX D
THE LACLEDE GROUP, INC.
CORPORATE GOVERNANCE GUIDELINES
The Board of Directors of The Laclede Group, Inc. is primarily
responsible for overseeing the affairs of the Company. In executing its
responsibilities, the Board may consider the interests of the Company's
shareholders, employees, customers, and local communities. Management,
however, is responsible for the Company's day-to-day operations and
activities, with the Board overseeing management's performance of those
functions.
Long-range strategic issues are matters to be reviewed with the Board
along with the annual review of the operating and capital budgets. At
each Board meeting, the Board reviews the Company's financial and
operating performance on an actual and comparative basis.
The long-term success of the Company depends on various factors,
including the maintenance of an ethical business environment that focuses
not only on adherence to the letter and the spirit of regulatory and
legal mandates but also imposes consistently high standards for the
business conduct of the Company and its directors, officers, employees
and representatives. To further this, the Board approves the Company's
Code of Business Conduct, and the Audit Committee oversees the
implementation of the Code. Also, Board and committee agendas and
materials are established with legal and regulatory requirements in mind.
The Board expects that management will strive to ensure that the
Company's operations are conducted within these ethical guidelines.
BOARD STRUCTURE
SIZE OF THE BOARD
The Board should be of appropriate size, but understands that the
actual number of Board members will fluctuate from time to time depending
on the circumstances. The Company's Articles of Incorporation provide
that the size of the Board should be in the range of 9-12 directors.
INDEPENDENT DIRECTORS
The Board believes that a majority of the Board should be independent
directors, as defined below. Independent director means a director who
has not been:
1. an employee of the Company or an affiliate within the past ten
years,
2. affiliated with or an employee of the Company's outside auditor
within the past five years,
3. part of a compensation committee interlocking directorate within
the past five years in which a director is an executive officer of
another company that has any of the Company's executive officers
serving on such other company's compensation committee,
4. an immediate family member(1) of a person falling within the
descriptions in 1, 2 or 3 above,
5. connected with the Company as a customer or supplier of goods or
services or any other relationship where the amount involved in
any such relationship is significant either to the Company or the
director or the entity with which the director is affiliated as an
executive, partner or substantial shareholder, or
6. affiliated with a tax exempt entity that receives more than five
percent of its annual contributions from the Company and its
affiliates.
The Board shall determine whether a director is independent, as
outlined above, at least annually. Independent directors shall not be
paid for consulting nor will the Company retain their firms for
consulting or services without the approval of the full Board.
-------
(1) Immediate family member of a person means such person's spouse,
parent, sibling, child, mother- or father-in-law, son- or
daughter-in-law, brother- or sister-in-law and anyone who shares
such person's home.
D-1
SELECTION OF CHAIRMAN OF THE BOARD
The Chairman of the Board may be a director who is also an officer or
an independent director and may or may not be the same individual as the
CEO, at the option of the Board. The Board believes it should be free to
make these determinations depending on what it believes is best for the
Company in light of all the circumstances.
DIRECTOR APPOINTMENTS
Directors should be nominated for Board approval by the Corporate
Governance Committee of the Board, which consists entirely of independent
directors. The Board expects the Corporate Governance Committee to
consider the views of the Corporate Governance Committee members as well
as the Chairman and the CEO (if the Chairman is not the CEO) in
recommending appointments, but it is the Corporate Governance Committee's
responsibility to make director recommendations to the full Board for
appointments to fill vacancies of any unexpired term on the Board and to
recommend nominees for submission to shareholders for approval at the
Annual Meeting. It is the responsibility of the Chairman with the support
of the Corporate Governance Committee to extend the offer to a new
director candidate to serve on the Board.
The Company does not set specific criteria for directors but believes
that candidates should evidence the following qualifications:
* Personal characteristics of
* Highest personal and professional ethics, integrity and values,
* An inquiring and independent mind, and
* Practical wisdom and mature judgment;
* Broad training and experience at the policy-making level in
business, government, education or community organizations;
* Expertise that is useful to the Company and complementary to the
background and experience of other Board members, so that an
optimum balance of members of the Board can be achieved and
maintained;
* Willingness to devote the required amount of time to carrying out
the duties and responsibilities of Board membership;
* Commitment to serve on the Board over a period of several years to
develop knowledge about the Company, its strategy, and its
principal operations;
* Willingness to represent the best interests of all constituencies
and objectively appraise management performance; and
* Involvement in activities or interests that do not create a
conflict with the director's responsibilities to the Company.
The Board expects that a director who changes his or her primary job
responsibilities shall inform the Board immediately of such change and
the Board will take such appropriate actions as it deems necessary.
DIRECTOR COMPENSATION AND SHARE OWNERSHIP
The level of director compensation generally should be competitive
with that paid to directors of similar corporations of comparable size.
The Compensation Committee is responsible for making recommendations to
the full Board with respect to the amount and form of director
compensation. The full Board approves director compensation and benefits
programs.
It is the policy of the Company to encourage its directors to own
Company stock but not to trade in Company stock during their term as
directors.
D-2
DIRECTOR ORIENTATION AND EDUCATION
To promote director effectiveness, management provides new directors
with orientation materials that include information concerning the Board
and the Company, its operations and the policies and procedures of the
Board. Meetings with key members of management and visits to Company
offices and facilities may also be arranged.
SERVICE OF FORMER CEO ON THE BOARD
The CEO, upon retirement, will be expected to offer his or her
resignation from the Board, consistent with the date of retirement. The
Board, at its option, may elect to retain the CEO as a member of the
Board after the retirement date for an additional period of time, not to
exceed one (1) year.
DIRECTOR RETIREMENT AGE
Generally, the Bylaws provide that a director is not eligible for
election after reaching age 71.
DIRECTOR EDUCATION
From time to time, management advises, or invites outside experts to
attend board meetings to advise, the Board on its responsibilities,
management's responsibilities, developments relative to corporate
governance and best corporate practices. Board members may attend, at the
Company's expense, director education programs sponsored or accredited by
the New York Stock Exchange.
MEETINGS OF THE BOARD OF DIRECTORS
FREQUENCY OF MEETINGS
The Board has six regularly scheduled meetings per year, with special
meetings called as necessary. It is the responsibility of the Directors
to make themselves available to attend both regular and special Board and
committee meetings on a consistent basis.
EXECUTIVE SESSIONS OF THE NON-MANAGEMENT DIRECTORS
The non-management directors, which shall include independent
directors and other directors who are not independent but who are not
current employees of the Company, shall meet regularly in executive
session on a quarterly basis in November, January, April, and July
following the regularly scheduled board meeting in each such month.
Special executive sessions may be called as necessary as determined by
the non-management directors. Generally, the chair of the Corporate
Governance Committee shall act as chair of each executive session.
Correspondence to the non-management directors should be directed to the
chair of the Corporate Governance Committee at the address disclosed in
the Company's proxy statement.
AGENDAS AND PRESENTATIONS
The Chairman of the Board and the CEO (if the Chairman is not the
CEO) shall establish the agenda for each Board meeting, taking into
account suggestions of Board members. Board members are encouraged to
suggest the inclusion of particular items on the agenda.
As with the agenda, the Chairman and CEO (if not the Chairman) should
determine the form of each presentation to the Board and the person to
make such presentation. It is the policy of the Board that there be a
presentation of the financial performance of the Company and related
issues at each Board meeting by the CEO or such other senior officer as
the CEO may determine.
INFORMATION FLOW
The Board should receive information important to understanding
presentations, discussions and issues covered at each meeting in writing
and sufficiently in advance of the meeting when possible to permit
appropriate review. Further, in each month in which there is no Board
meeting, management shall forward to the Board on a timely basis its
monthly financial report. The focus of the materials should be on
analysis rather than data. The Board shall periodically review the
information flow to Board members to ensure that directors receive the
right kind and amount of information from management in sufficient time
to prepare
D-3
for meetings. The Chairman shall direct the Corporate Secretary to
coordinate the information flow to the directors.
BOARD EFFECTIVENESS REVIEW
The Board will conduct an assessment of its performance on an annual
basis, which assessment may consist of surveys or self-evaluations and
will focus on the Board's contribution as a whole. The purpose of this
assessment is to increase the effectiveness of the Board.
At least once annually the Corporate Governance Committee shall
review the Board's effectiveness, including its corporate governance
policies and practices, and shall report to the Board the results of its
analysis and any recommendations following each such review. All
directors are free to make suggestions to improve the Board's practices
at any time and are encouraged to do so.
The Corporate Governance Committee is also responsible for reviewing
with the Board on an annual basis the appropriate skills and
characteristics required of Board members in the context of the current
make-up of the Board. This assessment should include issues of
experience, diversity, age and skills, all in the context of an
assessment of the perceived needs of the Board at that point in time. The
Board believes that the Corporate Governance Committee as part of its
evaluation process should review the overall effectiveness of incumbent
directors and discuss such evaluation with the Chairman of the Board and
CEO (if the Chairman is not the CEO).
ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
Board members shall have complete access to management. It is assumed
that Board members will use judgment to ensure that contact is not
distracting to the business operation of the Company and that such
contact, if in writing, be copied to the CEO and Chairman. The Board as a
whole has the ability to retain, at the Company's expense, special legal,
accounting or other consultants, experts or advisors, as it deems
necessary in the performance of its duties.
ATTENDANCE OF NON-DIRECTORS AT MEETING
The Board believes that the Chairman should have the discretion to
invite the members of management as the Chairman deems appropriate to
attend the Board meetings, subject to the Board's right to request that
such attendance be limited or discontinued. It is important for the Board
to have exposure to the Company's key senior officers through their
attendance at and participation in Board meetings.
COMMITTEES OF THE BOARD
NUMBER AND TYPES OF COMMITTEES
Committees should be created and disbanded depending on the
particular interests of the Board, issues facing the Company and legal
requirements. The current standing committees of the Board are the Audit
Committee, Corporate Governance Committee, Compensation Committee,
Capital Funds Committee, Investment Review Committee and Corporate
Development and Finance Committee. The Chairman of the Board is
responsible for making recommendations to the full Board on the committee
structure, but directors are free to make suggestions regarding
committees at any time and are encouraged to do so. The Board also
expects that the committee structure would be one of the matters
considered by the Corporate Governance Committee from time to time as
part of its review of overall Board effectiveness.
FREQUENCY OF COMMITTEE MEETINGS
Each committee shall meet as frequently and for such length of time
as may be required to carry out its assigned duties and responsibilities.
The schedule for regular meetings of the committees for each year is
submitted and approved by the Board in advance. In addition, the chair of
a committee may call a special meeting at any time if deemed advisable.
D-4
COMMITTEE AGENDAS AND REPORTS
Committee chairs, in consultation with committee members and
appropriate members of management, shall determine committee agendas.
Each committee member is free to suggest items for inclusion on the
agenda and to raise at any committee meeting subjects that are not on the
agenda for that meeting.
Committee chairs shall make reports of committee meetings to the full
Board following each committee meeting. Other committee members will be
offered the opportunity to comment on committee activities at each Board
meeting.
ASSIGNMENT AND ROTATION OF COMMITTEE MEMBERS
The Chairman and CEO (if the Chairman is not the CEO) recommend
committee appointments for the approval of the full Board. The
assignments are made within the following guidelines: assignments may be
rotated periodically, though not necessarily within any specified time
frame; the Audit Committee, the Compensation Committee and Corporate
Governance Committee should each be comprised solely of independent
directors; and committee assignments must comply with any applicable
legal and stock exchange qualifications.
MANAGEMENT COMPENSATION AND SUCCESSION
CEO PERFORMANCE EVALUATION AND COMPENSATION
The Board is responsible for the annual evaluation of CEO performance
and CEO compensation. The Board has delegated responsibility to the
Compensation Committee to evaluate CEO performance in the course of
determining and recommending to the Board CEO salary, bonus and other
compensation. The Compensation Committee is responsible for setting
annual and long-term performance goals for the CEO and for evaluating the
CEO's performance against such goals. The Compensation Committee or its
chair meets annually with the CEO to receive his or her recommendations
concerning such goals and to evaluate his or her performance against the
prior year's goals. The evaluation will be used by the Compensation
Committee in the course of its deliberations when approving the
compensation of the CEO.
The CEO's salary, bonus and any other compensation will be approved
by the Board (with the CEO excusing himself from the meeting) following
the Compensation Committee's determination. Discussion of the CEO's
performance is part of the approval process. The chair of the
Compensation Committee reviews comments of the Board with the CEO
following each such meeting, as appropriate.
The Board believes that evaluation of the CEO should be a
comprehensive process based on both qualitative and quantitative factors,
including the performance of the business, accomplishment of long-term
objectives, positioning of the Company for the future, development of
management, and leadership in the community and the industry.
COMPENSATION OF OTHER EXECUTIVE OFFICERS
The Compensation Committee recommends to the Board for its approval
the compensation and benefits programs for key executive officers,
subject in some cases to shareholder approval.
SUCCESSION PLANNING
The CEO is primarily responsible for the evaluation and review of the
abilities of the key senior managers and their likely successors, and the
CEO shall report his or her conclusions to the Board at least annually.
The Board has oversight responsibility for management succession
planning, including the selection of a new CEO. Additionally, the
independent directors may in their executive sessions discuss, among
other things, management succession issues.
COMMUNICATIONS WITH THE PUBLIC
The Board believes that the management speaks for the Company.
Individual Board members may, from time to time at the request of
management, meet or otherwise communicate with various constituencies
that are involved with the Company. If comments from the Board are
appropriate, they should, in most circumstances, come from the Chairman
of the Board.
D-5
APPENDIX E
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
AS AMENDED AND RESTATED NOVEMBER 1, 2002
ARTICLE I. GENERAL PROVISIONS.
SECTION 1. PURPOSES. The Restricted Stock Plan for Non-Employee
Directors (the "Plan") is designed to retain and attract Non-Employee
Directors and to solidify the common interest of Directors and
shareholders in enhancing the value of the Company's Shares.
SECTION 2. DEFINITIONS. Except where the context otherwise indicates,
the following definitions apply:
"ANNUAL MEETING" means the Annual Meeting of Shareholders of The
Laclede Group, Inc.
"BOARD" means the Board of Directors of the Company.
"COMPANY" means The Laclede Group, Inc., a Missouri corporation,
and any successor that assumes the Plan.
"CURRENT VESTED NON-EMPLOYEE DIRECTOR" means a Non-Employee
Director who, as of November 1, 2002, is vested under the Retirement
Plan for Non-Employee Directors.
"CURRENT NON-VESTED NON-EMPLOYEE DIRECTOR" means a Non-Employee
Director who, as of November 1, 2002, is not vested under the
Retirement Plan for Non-Employee Directors.
"DIRECTOR" means a member of the Board.
"EMPLOYEE DIRECTOR" means a member of the Board who is employed
by, or was formerly employed by, the Company or any of its
subsidiaries.
"FAIR MARKET VALUE" means the average of the highest and lowest
sales prices of the Company's shares on the effective date of a Grant
(or, if Shares were not traded on such day, the next preceding day on
which Shares were traded) as reported in The Wall Street Journal
under the heading "New York Stock Exchange Composite Transactions" or
any similar or successor heading.
"GRANT" means the instruction to the Trustee by the Company
pursuant to Article III, Section 4 for the purchase of Shares for the
account of a Participant under the Plan.
"GRANTED TO" means the act by which the Company instructs the
Trustee to purchase the Shares for the account of a Non-Employee
Director pursuant to this Plan.
"NEW NON-EMPLOYEE DIRECTOR" means a Non-Employee Director, other
than a Current Vested Non-Employee Director, elected at or after the
Annual Meeting in January 2003 or any adjournment thereof to a term
as Non-Employee Director.
"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not
and never has been employed by the Company or any of its
subsidiaries.
"PARTICIPANT" means a Non-Employee Director.
"SHARES" means shares of common stock of the Company and any
related securities including, without limitation, related preferred
stock purchase rights.
"TRUSTEE" means UMB Bank, National Association.
SECTION 3. SHARES AVAILABLE FOR GRANTS. There shall be 50,000 Shares
available for Grants under this Plan and the Shares shall be purchased on
the open market by the Trustee and held in trust by the Trustee for the
account of each of the Participants in the Plan until vested. All Shares
to be held in trust under this Plan shall be held by the Trustee pursuant
to a trust agreement between the Company and the Trustee, as amended from
time to time.
E-1
ARTICLE II. GRANTS OF SHARES.
SECTION 1. NEW NON-EMPLOYEE DIRECTORS AND CURRENT NON-VESTED
NON-EMPLOYEE DIRECTOR. Effective on the date that he or she commences to
serve as a New Non-Employee Director, a Grant of 800 Shares shall be made
for the account of such New Non-Employee Director.
SECTION 2. ADDITIONAL GRANTS. Effective on the date of each Annual
Meeting following the initial Grant of Shares to a Non-Employee Director
pursuant to this Article II, an additional Grant of (a) 200 Shares shall
be made in the name of each Current Vested Non-Employee Director
continuing to serve as a Non-Employee Director; and (b) 350 Shares shall
be made in the name of each New Non-Employee Director and the Current
Non-Vested Non-Employee Director continuing to serve as a Non-Employee
Director; in each case for service rendered during the year preceding
each such Annual Meeting.
ARTICLE III. TERMS AND CONDITIONS OF GRANTS OF SHARES.
SECTION 1. DIVIDEND AND VOTING RIGHTS. As soon as practicable after
the Trustee's receipt thereof, the Trustee shall pay to each Participant
in the Plan the applicable cash dividends declared and paid on the Shares
held by the Trustee for the account of such Participant in the Plan. In
addition, each Participant shall be entitled to vote the Shares held by
the Trustee for the account of that Participant in the Plan.
Notwithstanding any provision of this Plan, neither this Plan nor any
Grant of Shares hereunder shall impose on the Company any obligation to
declare and pay dividends on the Shares.
SECTION 2. VESTING OF SHARES. Shares will vest (or be forfeited)
depending upon the Participant's age entering the Plan, and the duration
of the Participant's service as a Non-Employee Director, as specified in
the Share Vesting Schedule hereinafter set forth, or sooner, to the
extent provided in the final unnumbered paragraph of this Section 2 of
Article III and in Article IV:
AGE ENTERING PLAN SHARE VESTING SCHEDULE
----------------- ----------------------
UNDER 60 No shares vest prior to 65th birthday. If service ends before
65th birthday, Participant forfeits all rights to any Shares.
If service continues after 65th birthday but ends before
70th birthday, 1/2 of the previously unvested accumulated Shares
vest at 65th birthday, and at each succeeding Annual Meeting
held on or after Participant's 65th birthday, 1/2 of each annual
Grant of Shares shall be vested.
If service continues on or after 70th birthday, all previously
accumulated unvested Shares vest on Participant's 70th birthday.
Annually thereafter at each succeeding Annual Meeting, all of
each annual Grant of Shares shall be vested for each year of
continued service beyond 70th birthday.
60-64 No Shares vest prior to fifth anniversary date of entry into the
Plan. If service ends before the Annual Meeting date immediately
following the Participant's fifth anniversary of entry into the
Plan, the Participant forfeits all rights to receive any Shares.
If service continues at least until the Annual Meeting date
immediately following the Participant's fifth anniversary of
entry into the Plan, 1/2 of the previously accumulated Shares
vest on such Annual Meeting date and at each succeeding Annual
Meeting thereafter, 1/2 of each annual Grant of Shares shall be
vested.
If service continues on or after 70th birthday, all previously
accumulated unvested Shares vest on 70th birthday. Annually
thereafter at each succeeding Annual Meeting, all of each annual
Grant of Shares shall be vested for each year of continued service
beyond age 70.
65-69 No Shares vest prior to second anniversary date of entry into the
Plan. If service ends before such second anniversary date, the
Participant forfeits all rights to receive any Shares.
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AGE ENTERING PLAN SHARE VESTING SCHEDULE
----------------- ----------------------
If service continues until the Annual Meeting date
immediately following the second anniversary of entry into
the Plan, 1/2 of the previously accumulated Shares vest on
such Annual Meeting date. At each succeeding Annual Meeting
thereafter, 1/2 of each annual Grant of Shares shall be
vested.
If service continues after the Annual Meeting date
immediately following the second anniversary of entry into
the Plan and after 70th birthday, all previously accumulated
unvested Shares vest on 70th birthday. Annually thereafter
at each succeeding Annual Meeting, all of each annual Grant
of Shares shall be vested for each year of continued service
after 70th birthday.
70 OR OVER 1/2 of the Shares vest upon entry into the Plan.
If service continues after the Annual Meeting date
immediately following the first anniversary of entry into
the Plan, all previously accumulated unvested Shares vest on
such Annual Meeting date. Annually thereafter at each
succeeding Annual Meeting, all of each annual Grant of
Shares shall be vested for each year of continued service.
For purposes of the above vesting schedule in this Section 2 of
Article III, "for each year of continued service" means, for the first
year of such continued service, service as a Director from the time of
the Director's birthday, or attaining the specified years of service
under the Plan, as the case may be, until the time of the next Annual
Meeting, and thereafter shall mean the respective periods between Annual
Meetings. Any Shares that are unvested at the time a Non-Employee
Director's service as a Director ends shall be immediately forfeited,
except as set out in Article IV.
To the extent that the Grant of any Shares under the Plan, at the
time of such Grant, would only be exempt from Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") if the Plan
were to contain a provision prohibiting sale of such Shares for at least
six months after such award, Shares granted under the Plan may not be
sold for at least six months after the Grant thereof.
All fractional Shares shall be rounded down to the next lower whole
number.
Notwithstanding anything to the contrary set forth above in this
Section 2 of Article III, or elsewhere in this Plan: (a) all previously
accumulated unvested shares held by any Non-Employee Director under this
Plan shall vest following twelve years of continuous service by such
Non-Employee Director, such vesting to take place on the Annual Meeting
date immediately following the twelfth anniversary of the commencement of
service by such Non-Employee Director (the "Twelfth Anniversary Date");
and (b) all shares granted to such Non-Employee Director under this Plan
on or after said Twelfth Anniversary Date, shall vest immediately upon
the granting thereof. For the purpose of this unnumbered paragraph,
"years of continuous service" shall include any number of years of
continued membership on the Board of Directors (without any hiatus in the
period of such Board membership) by a Non-Employee Director, commencing
on the date of initial Board membership as a Non-Employee Director, and
continuing annually from anniversary date to anniversary date, so long as
such Non-Employee Director remains, without interruption, as a
Non-Employee Director.
SECTION 3. TRANSFER RESTRICTIONS. Shares granted pursuant to this
Plan may not be transferred, sold, assigned, pledged or hypothecated
until vested in accordance with the terms and conditions of this Plan, or
as otherwise provided in this Plan. A legend referring to the foregoing
restrictions may be placed on all certificates representing unvested
Shares unless such Shares are held by the Trustee as provided in Section
4 below, and an additional legend may be placed on Shares as to which
resale restrictions otherwise apply.
SECTION 4. DELIVERY OF CERTIFICATES. Certificates representing
unvested Shares granted to Non-Employee Directors pursuant to this Plan
shall be held in trust by the Trustee, so long as the transfer
restrictions set forth in Section 3 of this Article III remain in effect
with respect to such Shares. Upon direction of an authorized Company
officer designated from time to time as such in writing by the Company
(the "Officer"), the Trustee shall: (a) release certificates representing
previously unvested Shares from trust,
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cause such Shares to be registered in the Non-Employee Director's name
and reissue said certificates without the restrictive legend in the name
of the Non-Employee Director, and deliver such certificates to the
Non-Employee Director promptly upon expiration of such transfer
restrictions; and (b) release certificates representing vested Shares
from trust and deliver to the Non-Employee Director promptly; subject
only to any restrictions that may be established by the Company, on the
advice of its counsel, to comply with Federal or State securities laws or
other legal requirements, and provided, however, that the Trustee may
designate the Company as agent for the delivery of the Shares to
Participants and, to the extent any such designation shall be made, the
Trustee shall be relieved of any liability for such delivery. At the
Company's direction, the Trustee shall deliver forfeited Shares under the
terms of the Plan to the Company or use the forfeited Shares for future
Grants.
SECTION 5. ADJUSTMENT TO SHARES. If the Company subdivides or
combines its outstanding common stock into a greater or lesser number of
shares or if the Board shall determine that a stock dividend,
reclassification, business combination, exchange of shares, warrants or
rights offering to purchase Shares or other similar event affects the
Shares such that an adjustment is required to preserve the benefits or
potential benefits intended to be made available under this Plan, the
Board may make adjustments to the number of Shares that may be awarded
and the number of Shares subject to outstanding Grants under this Plan.
Any new or additional Shares or other securities to which a Non-Employee
Director, by virtue of Grants hereunder, becomes entitled due to any such
adjustment, shall be held by the Trustee in trust and shall be dealt with
in the same manner as the Shares giving rise thereto are distributed. The
Trustee shall sell any other instrument or property so received that does
not give the holder the right to acquire Shares and shall distribute the
sales proceeds to the respective participants.
ARTICLE IV. CESSATION OF SERVICE UNDER SPECIAL CIRCUMSTANCES.
SECTION 1. DEATH OR DISABILITY. Anything to the contrary
notwithstanding, if a Non-Employee Director: (a) dies; or (b) suffers an
irreversible incapacity or disability before any Shares granted to him or
her have become vested, then all such Shares which are still forfeitable
shall immediately be deemed vested and nonforfeitable. A Non-Employee
Director shall be deemed to have suffered an irreversible incapacity or
disability for purposes of this Plan if, based on competent medical
advice satisfactory to the Board, he or she is prevented from performing
the duties of Director because of an irreversible incapacity or
disability for a period of six (6) months.
SECTION 2. CESSATION OF SERVICE FOLLOWING CHANGE IN CONTROL.
Notwithstanding anything herein to the contrary, if a Non-Employee
Director's relationship as a Director of the Company is terminated and if
such termination occurs within four years following a change in control
of the Company, then all Shares that have been Granted to him or her and
that may still be forfeitable shall immediately be deemed vested and
nonforfeitable. For purposes of this Section 2, Article IV, a "change in
control of the Company" means (i) the purchase or other acquisition
(other than from the Company) by any person, entity or group of persons,
within the meaning of Sections 13(d) or 14(d) of the Exchange Act of 1934
("Exchange Act") (excluding, for this purpose, the Company or its
subsidiaries or any employee benefit plan of the Company or its
subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either the
Company's then outstanding Shares or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally
in the election of Directors; or (ii) individual members of the Board, as
of November 1, 2002 (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 November 1, 2002 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; or (iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which persons who were the shareholders of the Company immediately prior
to such reorganization, merger or consolidation do not,
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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 the Company or of the sale of all or
substantially all of the Company's assets. In making this computation as
to any Company 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 the Company shall be
counted toward the 50% threshold in the prior sentence.
ARTICLE V. MISCELLANEOUS PROVISIONS.
SECTION 1. GOVERNING LAW. This Plan and all actions taken hereunder
shall be governed by the laws of the State of Missouri.
SECTION 2. WITHHOLDING. The Company may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of
any taxes which the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any event or action under this
Plan.
SECTION 3. EFFECTIVE DATE AND TERM OF GRANTING SHARES. This Plan has
been amended and restated effective as of November 1, 2002, subject to
approval by the Company's shareholders, and the granting of Shares
hereunder shall terminate as of November 1, 2012. All references to
service by a Participant as a Non-Employee Director of the Company in
this Plan shall include any service such Participant provided to Laclede
Gas Company as a Non-Employee Director prior to October 1, 2001 as well
as any service provided to the Company as a Non-Employee Director on and
after October 1, 2001.
ARTICLE VI. AMENDMENTS.
SECTION 1. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 2
below, the Board may from time to time amend this Plan or discontinue
this Plan or any provision thereof; provided, however, that no amendment
may be made that would (a) change the types of awards under this Plan,
(b) materially increase the aggregate number of Shares that may be
granted under this Plan (except for the equitable adjustments referred to
in Article III, Section 5 above), (c) change the category of Directors
eligible to receive Shares under this Plan, (d) materially extend the
period during which Grants may be made under this Plan, or (e) amend
Articles II and III of this Plan more than once every six months, other
than to comport with changes in the Internal Revenue Code or the rules
thereunder.
SECTION 2. EFFECT ON SHARES GRANTED. No amendment or discontinuation
of this Plan or any provision thereof shall, without the written consent
of the Non-Employee Director, adversely affect any Shares theretofore
granted to such Non-Employee Director under this Plan.
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APPENDIX F
THE LACLEDE GROUP, INC.
EQUITY INCENTIVE PLAN
1. PURPOSE. The purpose of The Laclede Group, Inc. Equity Plan (the
"Plan") is to encourage key employees of The Laclede Group, Inc. (the
"Company") and such subsidiaries of the Company as the Administrator
designates, to acquire shares ("Shares") of common stock, $1.00 par
value, of the Company ("Common Stock") or to receive monetary payments
based on the value of such stock or based upon achieving certain goals on
a basis mutually advantageous to such employees and the Company and thus
provide an incentive for employees to contribute to the success of the
Company and align the interests of key employees with the interests of
the shareholders of the Company.
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company ("Board") or the Compensation Committee of the
Board as determined by the Board (the "Administrator").
The authority to select persons eligible to participate in the Plan,
to grant benefits in accordance with Section 5 of the Plan, and to
establish the timing, pricing, amount and other terms and conditions of
such grants (which need not be uniform with respect to the various
Participants or with respect to different grants to the same
Participant), may be exercised by the Administrator in its sole
discretion. No grant shall have a term in excess of ten (10) years nor
have a vesting period of less than one year, nor shall any stock option
be granted at less than fair market value on the date of grant. An award
of a benefit under this Plan ("Award") shall be evidenced by an award
agreement that shall set forth the terms and conditions applicable to
that Award, including applicable provisions in the event of the
termination of employment, retirement, death or disability of the
Participant. In the event of any inconsistency between the terms of such
an award agreement and terms of this Plan, the terms of the Plan shall
prevail. An award of stock options or stock appreciation rights under
this Plan is intended to be exempt for the one million dollar limit on
deductible compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended.
Subject to the provisions of the Plan, the Administrator shall have
exclusive authority to interpret and administer the Plan, to establish
appropriate rules relating to the Plan, to delegate some or all of its
authority under the Plan and to take all such steps and make all such
determinations in connection with the Plan and the benefits granted
pursuant to the Plan as it may deem necessary or advisable. Any decision
of the Administrator in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned (including, but not limited to, Participants and their
beneficiaries or successors). The Administrator shall have the full power
and authority to establish the terms and conditions of any Award
consistent with the provisions of the Plan and to waive any such terms
and conditions at any time (including, without limitation, accelerating
or waiving any vesting conditions); provided, however, that in no event
shall any Award be subject to repricing without shareholder approval. The
Administrator shall require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other taxes as a
result of the exercise, grant or vesting of an Award. Unless the
Administrator specifies otherwise, the Participant may elect to pay a
portion or all of such withholding taxes by (a) delivery in Shares or (b)
having Shares withheld by the Company from any Shares that would have
otherwise been received by the Participant. In no event shall any
Participant receive a loan from the Company or any subsidiary (directly
or indirectly) in connection with any Award hereunder. Whenever used
herein, the term "Fair Market Value" means, with respect to a share of
Common Stock on a particular date, the closing price on the New York
Stock Exchange on the particular date. If the New York Stock Exchange is
not open for trading on that date, Fair Market Value shall be the average
of the closing prices on the nearest trading date before and the nearest
trading date after that date.
Notwithstanding any provision of the Plan to the contrary, Awards
under the Plan may be reduced, but not increased, by the administrator of
any performance incentive plan of the Company established to provide for
the payment of qualified performance-based compensation that is not
subject to the deduction limit in Section 162(m) of the Code.
3. SHARES RESERVED UNDER THE PLAN. Subject to the provisions of
Section 12 (relating to adjustment for changes in capital stock) an
aggregate number of one million two hundred fifty thousand (1,250,000)
shares
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of Common Stock of the Company shall be available for issuance under the
Plan. The shares of Common Stock issued under the Plan may be authorized
but unissued shares or shares reacquired by the Company.
As used in this Section, the term "Plan Maximum" shall refer to the
number of shares of Common Stock of the Company that are available for
issuance pursuant to the Plan. Stock underlying outstanding options,
stock appreciation rights, or performance awards will reduce the Plan
Maximum. Shares underlying expired, canceled or forfeited options, stock
appreciation rights or performance awards shall be added back to the Plan
Maximum. When the exercise price of stock options is paid by delivery of
shares of Common Stock of the Company, or if the Administrator approves
the withholding of shares from a distribution in payment of the exercise
price, the Plan Maximum shall be reduced by the net (rather than the
gross) number of shares issued pursuant to such exercise, regardless of
the number of shares surrendered or withheld in payment. Restricted stock
issued pursuant to the Plan will reduce the Plan Maximum while
outstanding even while subject to restrictions. Shares of restricted
stock shall be added back to the Plan Maximum if such restricted stock is
forfeited.
Notwithstanding the above, the maximum number of Shares subject to
stock options or stock appreciation rights that may be awarded under the
Plan to any individual in any calendar year shall not exceed one hundred
twenty-five thousand (125,000) Shares. The number of Shares granted in
the form of Restricted Stock or Stock Units to all Participants shall not
exceed one hundred twenty-five thousand (125,000) Shares. The limitations
of this paragraph shall be adjusted in accordance with Section 12.
4. PARTICIPANTS. Participants will consist of such officers and key
employees of the Company or any designated subsidiary as the
Administrator in its sole discretion shall determine ("Participant").
Designation of a Participant in any year shall not require the
Administrator to designate such person to receive a benefit in any other
year or to receive the same type or amount of benefit as granted to the
Participant in any other year or as granted to any other Participant in
any year. The Administrator shall consider such factors as it deems
pertinent in selecting Participants and in determining the type and
amount of their respective benefits.
5. TYPES OF BENEFITS. The following benefits may be granted under the
Plan: (a) stock appreciation rights ("SARs"); (b) restricted stock
("Restricted Stock"); (c) performance awards ("Performance Awards"); (d)
incentive stock options ("ISOs"); (e) nonqualified stock options
("NQSOs"); and (f) Stock Units, all as described below; as well as any
other stock-based awards not inconsistent with the overall purpose of the
Plan.
6. STOCK APPRECIATION RIGHTS. A SAR is the right to receive all or a
portion of the difference between the fair market value of a share of
Common Stock at the time of exercise of the SAR and the exercise price of
the SAR established by the Administrator, subject to such terms and
conditions set forth in a SAR agreement as may be established by the
Administrator in its sole discretion. At the discretion of the
Administrator, SARs may be exercised (a) in lieu of exercise of an
option, (b) in conjunction with the exercise of an option, (c) upon lapse
of an option, (d) independent of an option or (e) each of the above in
connection with a previously awarded option under the Plan. If the option
referred to in (a), (b) or (c) above qualified as an ISO pursuant to
Section 422 of the Internal Revenue Code of 1986 ("Code"), the related
SAR shall comply with the applicable provisions of the Code and the
regulations issued thereunder. At the time of grant, the Administrator
may establish, in its sole discretion, a maximum amount per share which
will be payable upon exercise of a SAR, and may impose conditions on
exercise of a SAR. At the discretion of the Administrator, payment for
SARs may be made in cash or shares of Common Stock of the Company, or in
a combination thereof. SARs will be exercisable not later than ten years
after the date they are granted and will expire in accordance with the
terms established by the Administrator.
7. RESTRICTED STOCK. Restricted Stock is Common Stock of the Company
issued or transferred under the Plan (other than upon exercise of stock
options or as Performance Awards) subject to such terms and conditions
set forth in a Restricted Stock agreement as may be established by the
Administrator in its sole discretion. In the case of any Restricted
Stock:
(a) The period of restriction shall be established by the
Administrator for any grants of Restricted Stock.
(b) Restricted Stock may be subject to (i) restrictions on the sale
or other disposition thereof; (ii) rights of the Company to
reacquire such Restricted Stock upon termination of the
Participant's
F-2
employment within specified periods; (iii) representation by the
Participant that he or she intends to acquire Restricted Stock
for investment and not for resale; and (iv) such other
restrictions, conditions and terms as the Administrator deems
appropriate.
(c) The Participant shall be entitled to all dividends paid with
respect to Restricted Stock during the period of restriction and
shall not be required to return any such dividends to the Company
in the event of the forfeiture of the Restricted Stock.
(d) The Participant shall be entitled to vote the Restricted Stock
during the period of restriction.
(e) The Administrator shall determine whether Restricted Stock is to
be delivered to the Participant with an appropriate legend
imprinted on the certificate or if the shares are to be issued in
the name of a nominee or deposited in escrow pending removal of
the restrictions.
8. PERFORMANCE AWARDS. Performance Awards are Common Stock of the
Company, monetary units or some combination thereof, to be issued without
any payment therefor, in the event that certain performance goals
established by the Administrator are achieved over a period of time
designated by the Administrator. The goals established by the
Administrator may relate to the Company or to a subsidiary, or both, and
may include measures of operating stability and reliability,
efficiencies, employee safety and attendance, return on average total
capital employed, return on assets, return on equity, return on
investments, earnings per share, net income, increases in share price,
total shareholder returns, cash flow and cash flow return on investment,
credit rating or credit worthiness, levels of operating expense, or
measures of customer service or satisfaction, as may be established by
the Administrator; provided that the Administrator shall be permitted to
adjust or modify goals or Performance Awards upon the occurrence or
existence of extraordinary corporate events, or other circumstances that,
in the good faith determination of the Administrator, warrant such
adjustment or modification. In the event the minimum entity goal is not
achieved at the conclusion of the period, no payment shall be made to the
Participant. Actual payment of the award earned shall be in cash or in
Common Stock of the Company or in a combination of both, as the
Administrator in its sole discretion determines. If Common Stock of the
Company is used, the Participant shall not have the right to vote and
receive dividends until the goals are achieved and the actual shares are
issued.
9. INCENTIVE STOCK OPTIONS. ISOs are stock options awarded to
employees to purchase shares of Common Stock at not less than 100% of the
Fair Market Value of the shares on the date the option is granted (110%
if the optionee owns stock possessing more than 10% of the combined
voting power of all owners of stock of the Company or a subsidiary),
subject to such terms and conditions set forth in an option agreement as
may be established by the Administrator in its sole discretion that
conform to the requirements of Section 422 of the Code. Such purchase
price may be paid (a) by payment in cash or cash equivalent, (b), in the
discretion of the Administrator, by the delivery of shares of Common
Stock already owned by the Participant for at least six months, (c) in
the discretion of the Administrator, by using shares of Common Stock that
would otherwise have been received by the Participant upon exercise of
the option (which method may be restricted to a cashless exercise
procedure involving a broker or dealer), or (d) in the discretion of the
Administrator, by a combination of any of the foregoing, in the manner
and subject to the restrictions provided in the option agreement. The
aggregate Fair Market Value (determined as of the time an option is
granted) of the stock with respect to which ISOs are exercisable for the
first time by an optionee during any calendar year (under all option
plans of the Company and its subsidiary corporations) shall not exceed
$100,000.
10. NONQUALIFIED STOCK OPTIONS. NQSOs are nonqualified stock options
to purchase shares of Common Stock at not less than the Fair Market Value
of the shares on the date the options are granted, subject to such terms
and conditions set forth in an option agreement as may be established by
the Administrator in its sole discretion. The purchase price may be paid
(a) by payment in cash or cash equivalent, (b), in the discretion of the
Administrator, by the delivery of shares of Common Stock already owned by
the Participant for at least six months, (c), in the discretion of the
Administrator, by using shares of Common Stock that would otherwise have
been received by the Participant upon exercise of the option (which
method may be restricted to a cashless exercise procedure involving a
broker or dealer) or (d) in the discretion of the Administrator, by a
combination of any of the foregoing, in the manner and subject to the
restrictions provided in the option agreement.
F-3
11. STOCK UNITS. A Stock Unit represents the right to receive a share
of Common Stock from the Company at a designated time in the future,
subject to such terms and conditions set forth in a Stock Unit agreement
as may be established by the Administrator in its sole discretion. The
Participant generally does not have the rights of a shareholder until
receipt of the Common Stock. The Administrator may in its discretion
provide for payments in cash, or adjustment in the number of Stock Units,
equivalent to the dividends the Participant would have received if the
Participant had been the owner of shares of Common Stock instead of the
Stock Units.
12. ADJUSTMENT PROVISIONS.
(a) If the Company shall at any time change the number of issued
shares of Common Stock without new consideration to the Company
(such as by stock dividends or stock splits), the total number of
shares reserved for issuance under this Plan and the number of
shares covered by each outstanding benefit shall be adjusted so
that the aggregate consideration payable to the Company, if any,
and the value of each such benefit shall not be changed. Benefits
may also contain provisions for their continuation or for other
equitable adjustments after changes in the Common Stock resulting
from reorganization, sale, merger, consolidation, issuance of
stock rights or warrants, or similar occurrence. Fractional
shares shall be rounded down to the nearest whole share.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares reserved or available hereunder,
the Board may authorize the issuance or assumption of benefits in
connection with any merger, consolidation, acquisition of
property or stock, or reorganization upon such terms and
conditions as it may deem appropriate.
13. CHANGE IN CONTROL. Notwithstanding any other provision of the
Plan to the contrary, in the event of a Change in Control of the Company,
as defined below:
(a) If a Participant's employment with the Company and its
subsidiaries is terminated by the Company or subsidiary within
the period beginning on the date of the Change in Control and
ending on the second anniversary of such date, and such
termination is not for Cause (as defined below), (i) all
outstanding ISOs and NQSOs granted to such Participant shall be
immediately fully vested and exercisable and (ii) a prorata
portion of SARs granted to such Participant that have not become
exercisable shall be vested and exercisable and a prorata portion
of any restrictions on Restricted Stock or Stock Units shall
lapse, such vesting and lapse of restrictions determined based on
the period of time from the date of grant to the date the
Participant's employment terminates, the term of such Award, and
the portion of such Award that was vested or with respect to
which restrictions lapsed prior to the date the Participant's
employment terminates; and
(b) Any Performance Awards outstanding as of the date of the Change
of Control shall be payable immediately following such change and
shall be computed as if target performance were achieved. Any
such Award shall be prorated to the date of the Change of Control
based on the period of time elapsed from the date of the Award to
the date of the Change in Control over the performance period for
such Award.
For purposes of this section, "Change in Control" means:
(i) The purchase or other acquisition (other than from the Company)
by any person, entity or group of persons, within the meaning of
Sections 13(d) or 14(d) of the Exchange Act of 1934 ("Exchange
Act") (excluding, for this purpose, the Company or its
subsidiaries or any employee benefit plan of the Company or its
subsidiaries), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either the Company's then outstanding shares of Common Stock or
the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of
directors; or
(ii) Individual members of the Board of Directors, as of October 1,
2002 (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 October 1, 2002
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
F-4
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 the Company; or
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, with
respect to which persons who were the shareholders of the
Company 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 the Company or of the sale of all
or substantially all of the Company's assets. In making this
computation as to any Company 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 the Company shall be counted toward the 50%
threshold in the prior sentence.
"Cause" means termination of a Participant's employment with the
Company or any of its subsidiaries upon:
(i) Willful and continued failure by the Participant to perform
substantially the duties of employment assigned by the Company
(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 Company, which specifically
identifies the manner in which it is believed that the
Participant has not substantially performed such duties; or
(ii) Willful engagement by the Participant in misconduct that is
materially injurious to the Company.
For purposes of this definition, no act, or failure to act, on the
Participant's part shall be considered willful unless done, or omitted to
be done, by the Participant in bad faith or without reasonable belief
that the Participant's action or omission was in the best interest of the
Company and its subsidiaries. Any act or failure to act based upon
authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer or a senior officer
of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Company and
its subsidiaries.
14. NONTRANSFERABILITY. Each benefit granted under the Plan to an
employee shall not be transferable otherwise than by will or the laws of
descent and distribution; provided, however, NQSOs granted under the Plan
may be transferred, without consideration, to a Permitted Transferee (as
defined below). Benefits granted under the Plan shall be exercisable,
during the Participant's lifetime, only by the Participant; provided that
NQSOs may be exercisable by a Permitted Transferee. In the event of the
death of a Participant, exercise or payment shall be made only:
(a) By or to the Permitted Transferee, executor or administrator of
the estate of the deceased Participant or the person or persons
to whom the deceased Participant's rights under the benefit shall
pass by will or the laws of descent and distribution; and
(b) To the extent that the deceased Participant or the Permitted
Transferee, as the case may be, was entitled thereto at the date
of his death.
For purposes of this Section, "Permitted Transferee" shall include
(i) one or more members of the Participant's family, (ii) one or more
trusts for the benefit of the Participant and/or one or more members of
the Participant's family, or (iii) one or more partnerships (general or
limited), corporations, limited liability companies or other entities in
which the aggregate interests of the Participant and members of the
Participant's family exceed 80% of all interests. For this purpose, the
Participant's family shall include only the Participant's spouse,
children and grandchildren.
15. TAXES. The Company shall be entitled to withhold the amount
necessary to enable the Company to remit to the appropriate government
entity or entities the amount of any tax required to be withheld from
wages attributable to any amounts payable or shares deliverable under the
Plan, after giving the person entitled to receive such payment or
delivery notice as far in advance as practicable. The Company may defer
making payment or delivery as to any benefit if any such tax is payable
until indemnified to its satisfaction.
F-5
The person entitled to any such delivery may, by notice to the Company at
the time the requirement for such delivery is first established, elect to
have such withholding satisfied by a reduction of the number of shares
otherwise so deliverable, such reduction to be calculated based on the
Fair Market Value of the Common Stock on the date of such notice.
16. TENURE. A Participant's right, if any, to continue to serve the
Company and its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by his or her designation as a
Participant under the Plan.
17. RULES OF CONSTRUCTION. The terms of the Plan shall be constructed
in accordance with the laws of the State of Missouri; provided that the
terms of the Plan as they relate to ISOs shall be construed first in
accordance with the meaning under and in a manner that will result in the
Plan satisfying the requirements of the provisions of the Code governing
incentive stock options.
18. DURATION, INTERPRETATION, AMENDMENT AND TERMINATION. No benefit
shall be granted more than ten years after the date of adoption of this
Plan; provided, however, that the terms and conditions applicable to any
benefit granted within such period may thereafter be amended or modified
by mutual agreement between the Company and the Participant or such other
person as may then have an interest therein. To the extent that any stock
options or other benefits granted under the Plan within the terms of the
Plan would qualify under present or future laws for tax treatment that is
beneficial to a recipient, then any such beneficial treatment shall be
considered within the intent, purpose and operational purview of the Plan
and the discretion of the Administrator, and to the extent that any such
stock options or other benefits would so qualify within the terms of the
Plan, the Administrator shall have full and complete authority to grant
stock options or other benefits that so qualify (including the authority
to grant, simultaneously or otherwise, stock options or other benefits
which do not so qualify) and to prescribe the terms and conditions (which
need not be identical as among recipients) in respect to the grant or
exercise of any such stock option or other benefits under the Plan.
The Board may amend the Plan from time to time or terminate the Plan
at any time. However, no action authorized by this paragraph shall reduce
the amount of any outstanding Award or change the terms and conditions
thereof to the detriment of the Participant without such Participant's
consent. Subject to Section 12, to the extent necessary to comply with or
get an exemption from any provision of the Code, including regulations
thereunder, or of the Securities Exchange Act of 1934, as amended, no
amendment of the Plan shall, without approval of the stockholders of the
Company, (a) increase the total number of shares which may be issued
under the Plan or increase the amount or type of benefits that may be
granted under the Plan, or (b) modify the requirements as to eligibility
for benefits under the Plan.
19. EFFECTIVE DATE. This The Laclede Group, Inc. Equity Plan shall
become effective as of the date it is adopted by the Board of the Company
subject only to approval by a majority of the shares of the Company's
common stock voted on the plan within twelve months before or after the
adoption of the Plan by the Board.
The undersigned hereby certifies that this The Laclede Group, Inc.
Equity Plan was adopted by the Board of the Company at its meeting on
September 26, 2002.
By:
---------------------------------------
Douglas H. Yaeger
Chairman of the Board,
President and Chief Executive Officer
Date:
---------------------------------------
F-6
The Laclede Group, Inc.
720 Olive Street
Saint Louis, Missouri, 63101
December 24, 2002
To our shareholders:
We are pleased to invite you to our annual meeting of shareholders to be
held on January 30, 2003 at 10:00 a.m. at the Marriott Pavilion Hotel, One
Broadway, St. Louis, Missouri.
Every vote is important. You can vote in one of three ways; use the toll
free number shown on your proxy card, visit the website shown on your proxy
card to vote via the Internet, or mark, sign, date and promptly return the
proxy card in the enclosed postage paid envelope. We ask that you please vote
your proxy--even if you plan to attend the meeting.
This year's meeting has added importance, as we are seeking your approval
of the restricted stock plan for non-employee directors, which was originally
implemented in 1990, and The Laclede Group equity plan. We describe the
reasons for the two plans in the proxy statement and recommend their approval
to attract and retain our directors and our key employees needed to execute
our long-term strategy. In addition, you will vote on electing three directors
and ratification of appointment of independent accountants, which are also
described in the enclosed proxy statement.
If you plan on attending the meeting and you are a shareholder of record,
you may attend the annual meeting by checking in with our representatives at
the desk outside the meeting room. If your shares are held in the name of a
bank, broker or other holder of record and you plan to attend the meeting,
you must show proof of ownership of our common stock at the desk.
We thank you in advance for your vote this year.
Sincerely,
/s/ Douglas H. Yaeger
Douglas H. Yaeger
Chairman of the Board, President
And Chief Executive Officer
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THE LACLEDE GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 30, 2003
YOUR VOTE IS IMPORTANT!
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mary C. Kullman, Barry C. Cooper, Douglas H.
Yaeger, and each of them, as the undersigned's proxies (with power of
substitution), to represent and to vote at the Annual Meeting of Shareholders
of The Laclede Group, Inc. to be held January 30, 2003 at 10:00 a.m., at the
Marriott Pavilion Hotel, One Broadway, St. Louis, Missouri, and at any
adjournment(s) or postponement(s) thereof, subject to the directions designated
below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" PROPOSALS 1, 2, 3 AND 4 AND IN THEIR DISCRETION, THE PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
COMMENTS:
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(If you noted any comments above, please mark the
corresponding box on the reverse side.)
(TO BE SIGNED ON REVERSE SIDE)
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[THE LACLEDE GROUP LOGO] VOTE BY INTERNET www.proxyvote.com
THE LACLEDE GROUP, INC. Use the Internet to transmit your voting
C/O UMB BANK - NA instructions and for electronic delivery
928 GRAND BOULEVARD, 13TH FLOOR of information up until 11:59 P.M.
KANSAS CITY, MO 64106 Eastern Time the day before the cut-off
date or meeting date. Have your proxy
card in hand when you access the web
site. You will be prompted to enter your
12-digit Control Number which is located
below to obtain your records and to
create an electronic voting instruction
form.
VOTE BY TELEPHONE - 1-800-690-6903
Use any touch-tone telephone to transmit
your voting instructions up until 11:59
P.M. Eastern Time the day before the
cut-off date or meeting date. Have your
proxy card in hand when you call. You
will be prompted to enter your 12-digit
Control Number which is located below and
then follow the simple instructions the
Vote Voice provides you.
Your Internet and telephone votes
authorize the named proxies to vote your
shares to the same extent as if you
marked, signed, dated and returned the
proxy card.
VOTE BY MAIL
Mark, sign, and date your proxy card and
return it in the postage-paid envelope we
have provided or return it to The Laclede
Group, Inc., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
IF YOU VOTE BY INTERNET OR TELEPHONE,
PLEASE DO NOT RETURN YOUR PROXY BY MAIL.
THANK YOU FOR YOUR VOTE
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
LCLEDE KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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THE LACLEDE GROUP, INC.
1. Election of directors: 01) Arnold W. Donald FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
02) C. Ray Holman
/ / / / / /
03) William E. Nasser
To withhold authority to vote, mark "For All Except"
and write the nominee's number on the line below.
----------------------------------------------------
FOR AGAINST ABSTAIN
VOTE ON PROPOSALS
2. Approval of the restricted stock plan for
non-employee directors. / / / / / /
3. Approval of The Laclede Group equity plan. / / / / / /
4. Ratification of the appointment of Deloitte
& Touche LLP as independent auditors. / / / / / /
Please date and sign exactly as your name
appears. If shares are held by joint tenants,
both must sign. If signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by an authorized officer. If a partnership,
sign in partnership name by authorized person.
For comments, please check this box and / /
write them on the back where indicated.
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (JOINT OWNERS) Date
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APPENDIX
Page 14 of the printed proxy statement contains a Stock Performance
Graph. The information contained within the graph is presented in a tabular
format immediately following the graph.