Exhibit 10.2
SALIENT FEATURES OF
THE
LACLEDE GROUP, INC.
DEFERRED INCOME PLAN FOR
DIRECTORS AND SELECTED EXECUTIVES
(January 1, 2005)
Purpose of Plan
To further the long-term growth and earnings
of the Laclede Gas Company (“Gas”), Gas adopted the
Deferred Income Plan and Deferred Income Plan II, which benefits
earned and vested thereunder as of December 31, 2004 are
not subject to Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) (the “Grandfathered
Plans”). As a result of the enactment of Code
Section 409A, The Laclede Group, Inc. (the “Company”)
adopted, as of January 1, 2005, The Laclede Group, Inc.
Deferred Income Plan (the “Group Plan”), which governs
amounts earned and vested on January 1, 2005 and
thereafter. Effective as of January 1, 2005,
no additional amounts shall be deferrable to the Grandfathered
Plans. Unless otherwise stated, all references herein to
the “Plan” shall mean this “Group
Plan.”
The Plan is designed to enhance the value of
current compensation paid to such individuals by permitting a
portion of such compensation to be deferred with such deferrals
forming the basis for attractive benefits upon retirement or death
or disability before retirement.
Plan Year
A Plan Year shall be a calendar year and all
Participants (regardless of whether they are Officers, other key
executives, or non-employee Directors) shall be eligible to make
deferrals.
Applicability
The Plan will be made available to the
Company’s Directors and Officers as well as selected key
executives of the Company and Gas (and such other Affiliates that
adopt the Plan) at a salary level of 9, 10 or 11 (hereinafter known
as grade level 15 or higher) for the respective periods described
herein (“Participants”). It is intended that
the Plan constitute an unfunded deferred compensation arrangement
for the benefit of a select group of management or highly
compensated employees (and other service providers) of the Company
and its designated subsidiaries and affiliates for purposes of the
federal income tax laws and the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) and all documents,
agreements or instruments made or given pursuant to the Plan shall
be interpreted so as to effect such intent.
For purposes of the Plan, “Affiliate
” shall mean (i) any person or entity that
directly or indirectly controls, is controlled by or is under
common control with the Company and/or (ii) to the extent
provided by the Company’s Compensation Committee, any person
or entity in which the Company has a significant
interest. The term “control” (including,
with correlative meaning, the terms “controlled by” and
“under common control with”), as applied to any person
or entity, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such person or entity, whether through the ownership of
voting or other securities, by contract or otherwise;
provided , however , with respect to any deferrals
subject to Section 409A of the Code, the term
“Affiliate” shall mean any member of the
Company’s control group within the meaning of U.S. Treasury
Regulation Section 1.409A-1(h)(3), as such may be modified or
amended from time to time, by applying the “at least 50
percent” provisions thereof.
Amounts of Deferral
The Company’s Board of Directors shall
determine on an annual basis the Plan Years during which deferrals
shall be allowed under the Plan. Non-employee Directors
will be permitted to defer up to 100% of fees and retainers in each
year in which deferrals for them are allowed. The
deferral by other Participants shall not exceed 15% of the
Participant’s annual salary level (excluding incentive
compensation) as of the November 1 of the immediately
preceding Plan Year. The minimum amount of deferral in
any Plan Year will be $3,000 for each
Participant. Participants shall designate the amount of
scheduled deferrals for the upcoming Plan Year in which deferrals
are allowed and such designated deferral amounts shall not be
changed without the approval of the Company’s Compensation
Committee; provided , however , that (i) such
change shall apply only to the extent that it complies with Code
Section 409A and Final Treasury Regulation 1.409A-3(j)(4)(viii)
with respect to deferrals following an unforeseeable emergency or
hardship distribution pursuant to Treasury Regulation
1.401(k)-1(d)(3) under the 401(k) plan in which such Participant is
participating or Final Treasury Regulation 1.409A-3(j)(4)(xii) with
respect to such Participant’s Disability, (ii) such change is
approved by the Compensation Committee, and (iii) such change shall
apply only to deferrals of compensation earned after the date of
the change, and amounts already deferred under the Plan shall not
be refunded or returned until payable as otherwise provided in this
Plan. An election to defer must be made prior to the
December 1 immediately preceding each Plan Year;
provided , that a person who becomes a new
Participant in this Plan may, within 30 days following his or her
selection as a Participant, elect to defer compensation to be
earned after the date of such election (provided further that such
Participant was not eligible to participate in any plan that is
required to be aggregated for this purpose with this Plan for
purposes of Code Section 409A and published guidance thereunder,
including the Grandfathered Plans). The annual salary
deferral shall be in uniform monthly amounts.
Income Benefits
Generally
The amount and timing of the income benefit
hereunder depends on the amount of the compensation deferred, the
ages at which deferrals are made, the Participant’s age at
time of separation from service, and the reason for the
Participant’s separation from service.
Benefit On or After Applicable Retirement
Age
If a Participant terminates employment with
the Company and its Affiliates on or after the Participant’s
Applicable Retirement Age (as defined below) and the Change in
Control section below is not applicable, the Participant shall be
entitled to a benefit payable in 15 substantially equal annual
installments (each not being treated separately for any
purpose under Code Section 409A). “Applicable
Retirement Age” shall mean the attainment, for employees, of
age 55; and for directors, of age 65. The amount of the
Participant’s benefit shall be determined as the greater of
the benefit calculated under subsections (a) and (b) of the
Earnings on Deferrals section of this
Plan. Notwithstanding that a Participant’s benefit
has commenced in the form of installments under this section, in
the event that the Participant dies after the commencement of such
benefits but before all 15 installments have been paid, the
remaining balance shall be paid in the form of a lump sum as soon
as practicable upon the Participant’s death to such
Participant’s beneficiary as indicated in the
Participant’s most recent designation of beneficiary form on
file with the Company and its Affiliate, or, if none is on file, to
the Participant’s estate.
Benefit Following Change in Control
If the Participant’s employment with the
Company and its Affiliates terminates at any age within two years
following a “Change in Control” (as defined below), the
Participant shall be entitled to a lump sum benefit equal to the
greater of (a) the present value of the deferred account balance
projected under the minimum retirement income formula in subsection
(b) of the Earnings on Deferrals section of this Plan through age
65 (age 71 for Directors) (calculated using a discount factor
equivalent to the minimum assured Moody’s rate incorporated
into the Plan as then in effect) or (b) the actual deferred account
balance accumulated through the date of such termination.
For purposes of this Plan, “Change in
Control” shall mean a change in ownership of the Company, a
change in effective control of the Company, or a change in
ownership of a substantial portion of the Company’s assets as
determined in accordance with the following:
(I) a change in ownership of the
Company shall occur on the date that any one person, or more than
one person acting as a group, acquires ownership of the Company
stock that, together with any Company stock held by such person or
group, constitutes more than 50% of the total fair market value or
total voting power of the outstanding Company
stock. Notwithstanding the foregoing, if any person or
group is considered to own more than 50% of the total fair market
value or the total voting power of all
outstanding Company stock, the acquisition of
additional Company stock by the same person or persons is not
considered to cause a change in the ownership of the Company;
(II) Notwithstanding that the Company has not
undergone a change in ownership as described in (I) above, a change
in effective control of the Company shall occur only on either of
the following dates:
(A) the date that any one person, or more than
one person acting as a group, acquires (or has acquired within the
preceding 12-month period ending on the date of the most recent
acquisition) ownership of Company stock possessing 30% or more of
the total voting power of all Company
stock. Notwithstanding the foregoing, if any person or
group is considered to own more than 30% of the total voting power
of all outstanding Company stock, the acquisition of additional
Company stock by the same person or group is not considered to
cause a change in the effective control of the Company;
(B) the date a majority of members of the
Company’s Board of Directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed
by a majority of the members of the Board before the date of the
appointment or election.
(III) a sale of all or
substantially all of the Company’s assets by any one person,
or more than one person acting as a group in a single acquisition
or a series of acquisitions within the preceding 12-month period
ending on the date of the most recent acquisition; provided
, however , that transfers of assets to a
“related person” as determined under Final Treasury
Regulation 1.409A-3(i)(5)(vii) shall not be considered for purposes
of this subclause (III).
In no event shall an event qualify as a Change
in Control hereunder if it fails to constitute a change in
ownership of the Company, a change in effective control of the
Company or a change in ownership of a substantial portion of the
Company assets as determined under Code Section 409A and Final
Treasury Regulatio
