LACLEDE GAS COMPANY Incentive Compensation Plan

                   “Company”-- for the sake of clarity, the Laclede Gas Company

                   “Employee”--an officer or managerial employee of the Company.

                   “Laclede--The Laclede Group, Inc. ¹

                   “Share Unit”--an incentive compensation unit.  No stock certificate will be issued for a Share Unit.  

           No voting power resides in a Share Unit.

                   “Dividend Equivalent”--an amount in cash equivalent to the cash dividend paid on each

           share of Laclede’s common stock.

                   “Aggregate Annual Dividend Equivalent”--an amount computed, at the time of the award of a Share

           Unit, at the then current annual cash dividend rate on Laclede’s common stock.

                   “Awardee”--an Employee awarded a Share Unit.

                   “Spouse”--a spouse is that person who on the date of the Awardee’s death is lawfully

           married to the Awardee.

¹            The Laclede Group is a result of a reorganization described in Amendment No. 1 to the Form S-4

        of The Laclede Group, Inc. filed on December 14, 2000.

“Consolidated Retained Earnings”--consolidated retained earnings as stated in Laclede’s annual report to stockholders for the fiscal year next preceding the date of any calculation pursuant to Section VI hereof.

“Consolidated Earnings”--consolidated earnings (or loss) applicable to common stock as stated in Laclede’s annual report to stockholders for the fiscal year next preceding the date of any calculation hereunder, subject to any adjustments thereto pursuant to Paragraph VI hereof.

“Disability”--disability is when, based on competent medical evidence, the Awardee is unable, by reason of any medically determinable physical or mental impairment, to perform the duties required by Awardee’s job; and Awardee is unable to perform any other work available to Awardee within the Company, whether or not Awardee is eligible for any other Company disability program.

“Deferred Compensation”--an amount, allocable to each Share Unit outstanding at the end of a fiscal year, equal to the per common share net increase, or decrease in Consolidated retained Earnings for that fiscal year.  However, no Deferred Compensation Credits shall accrue on Share Units held by an Awardee after the fiscal year in which his employment has terminated due to retirement, disability, death or the election of the Awardee following a hostile Change in Control.

“Change of Control”--When any person, as such term is used in Sections 13(d) and 14(d)(2) of the Securities Act of 1934 becomes a beneficial owner, directly or indirectly, of Laclede’s securities representing more than fifty percent (50%) of the combined voting power of Laclede’s then outstanding securities, or when any such person becomes a beneficial owner, directly or indirectly, of at least thirty percent (30%) and no more than fifty percent (50%) of such securities and a majority of the outside members of Laclede’s Board of Directors decides that a de facto Change in Control has occurred.  Change in Control approved by a majority of the outside members of Laclede’s Board of Directors as constituted immediately prior to the Change in Control is hereinafter referred to as a friendly Change in Control and a Change in Control not approved by a majority of the outside members of Laclede’s Board of Directors as constituted immediately prior to the Change in Control is heretofore and hereinafter referred to as a hostile Change in Control.

           No Awardee whose employment with the Company shall be terminated other than by retirement, disability, death or at his election following a hostile Change in Control or who shall engage in any business which is competitive with the public utility business of the Company shall be eligible to receive any payments under the Plan.  All Deferred Compensation accrued prior to such termination or such competitive activity shall be forfeited.

           The Compensation Committee of Laclede’s Board of Directors shall have authority to recommend to the Board from time to time the award of Share Units to selected Employees.  Upon such recommendation, the Board of Directors, exclusive of any Directors who are eligible to participate in the Plan, may award Share Units to any or all such Employees.  The Board of Directors shall otherwise administer the Plan in all respects, and any decision of the Board with respect to any question arising as to the Employees selected for awards, the amount and form of awards and interpretations of the Plan shall be final, conclusive, and binding.

           When Laclede pays a cash dividend on its common stock, it shall, subject to the provisions of Section III., pay a Dividend Equivalent to each Awardee for each Share Unit held on the date of such payment.  Dividend Equivalents will be paid to each Awardee until his death. Upon the death of an Awardee leaving a Spouse surviving, Dividend Equivalents shall be paid to such Spouse for life.

           Notwithstanding the provisions of the final two sentences of the immediately preceding unnumbered paragraph of this Section V, with respect to awards made on or after January 26, 1995, an Awardee who later retires before attaining the age of 65 years (other than by reason of death or Disability, or following a hostile Change of Control) shall not be entitled to post-retirement Dividend Equivalents payable at any time after such Awardee’s retirement, unless the Awardee remains employed by the Company for at least the following respective periods (based on the Awardee’s age at the date of the award of the Share Units in question) subsequent to the date upon which the Share Units are awarded: