8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 27, 2005

The Laclede Group, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Missouri	1-16681	74-2976504
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
720 Olive Street, St. Louis, Missouri		63101
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 314-342-0500

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On October 27, 2005, the Board of Directors of The Laclede Group, Inc. (the "Company"), took action on several matters relative to director and executive compensation.

Stock Ownership Guidelines

At the meeting, the Board approved the adoption of Stock Ownership Guidelines for directors and certain executive officers. Under the Guidelines, each director is expected to own shares with a value equal to two times the annual board retainer. Each executive officer is expected to own shares with a value equal to one times base salary, except the Chief Executive Officer is expected to own shares with a value equal to two times base salary, within five years of adoption of the guideline or of the first appointment to an executive officer position. Executives are also required to retain any award of restricted shares under any Company equity incentive plan and directors are expected to retain any restricted shares awarded under any Company restricted stock plan for non-employee directors for three yea rs after restrictions relative to such shares lapse. In each case, once the ownership level is reached, as long as the executive or director remains in his or her position, the ownership guideline will not increase or decrease as a result of changes in base salary or board annual retainer, as applicable, or normal fluctuations in the Company’s stock price.

Compensation of Directors

The Board of Directors approved an increase in the audit committee chair annual retainer from $4,500 to $7,500 and for each other committee chair annual retainer from $2,500 to $5,000.

The Board also amended the 2002 Restricted Stock Plan for Non-Employee Directors to increase the annual grant of restricted stock to incumbent directors from 300 to 450 shares for directors covered by the retirement plan for non-employee directors, which was frozen as to the four fully vested participants in 2002, and from 450 to 600 shares for directors not covered by the retirement plan. The Restricted Stock Plan, a s amended, is on file with the SEC as exhibits 10.12d to the Form 10-K for the year ended September 30, 2002 and 10.3 to the Form 10-Q for the quarter ended June 30, 2004; and the retirement plan, as amended, is on file with the SEC as exhibits 10.08c to the Form 10-K for the year ended September 30, 2002 and 10.2 to the Form 10-Q for the quarter ended June 30, 2004.

2005 Annual Bonus Plan Awards

Pursuant to the Company’s Management Bonus Plan, the Board of Directors authorized the payment of annual incentive awards to officers and select key contributors based on performance in the fiscal year ended September 30, 2005. The plan is on file with the SEC as exhibit 10.20 to the Form 10-K for the year ended September 30, 2002. The awards were determined by evaluating the Company’s and each executive’s performance during 2005 as measured against the performance criteria established by the Compensation Committee at the beginning of the fiscal year. For 2005, the key performan ce indicators for the corporate objectives were based on earnings per share, customer satisfaction ranking among peer companies derived from an annual Gas Residential Customer Satisfaction survey by J.D. Power & Associates and the aggregate attainment level of all participants’ individual objectives. The Compensation Committee assessed the extent to which the corporate and individual objectives were met, and the Board approved the Committee’s recommendations for awards to be paid in November 2005. Awards approved for the top five executive officers were $305,000 to D.H. Yaeger, $162,700 to K.J. Neises, $141,200 to R. E. Shively, $93,200 to B.C. Cooper, and $47,400 to M.C. Darrell.

Equity Plan Awards

The Board approved awards to the named executive officers with a grant date of November 2, 2005 of performance-contingent restricted stock under the Company’s Equity Plan, which is on file with the SEC as exhibit 10.22 to the Form 10-K for the year ended September 30, 2002. The performance-contingent restricted stock vests upon the attainment of certain earnings and dividend growth performance in the performance period ending September 30, 2008. The form of award agreement is attached to this Form 8-K as an exhibit. Under the awards, the awardees are entitled to dividend payments and voting rights while the shares remain subject to restrictions. Also, if within two years following a change in control a participant's employment is terminated by the Company without cause, the restricted shares will vest on a pro rata basis with performance deemed to have occurred at the target level of performance. If a participant dies, retires or becomes disabled during the performance period, the participant is eligible to earn a pro rata award if the performance contingency is satisfied. No shares are eligible for vesting, however, if the participant is terminated for cause prior to the vesting date. Any shares as to which any or all of the performance contingency has not been satisfie d shall be forfeited. Performance-contingent restricted stock awards approved for the top five named executive officers were 15,000 shares to D.H. Yaeger, 5,000 shares to K.J. Neises, 4,000 shares to R. E. Shively, 4,000 shares to B. C. Cooper, and 4,000 shares to M. C. Darrell.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits


Exhibit 10.1 Stock Ownership Guidelines
Exhibit 10.2 Amendment to Restricted Stock Plan for Non-Employee directors
Exhibit 10.3 Form of performance contingent restricted stock award agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	The Laclede Group, Inc.
November 1, 2005	By:	Douglas H. Yaeger
		Name: Douglas H. Yaeger
		Title: Chairman of the Board, President and Chief Executive Officer

Exhibit Index

Exhibit No.	Description
10.1	Stock Ownership Guidelines
10.2	Amendment to Restricted Stock Plan for Non-Employee Directors
10.3	Form of performance contingent restricted stock award agreement

EX-10.1

Stock Ownership Guidelines & Holding Requirements

Management

To provide a direct link between key executive and shareholder interests, executives will be expected to have a significant equity interest in the Company. The individual guidelines are established as follows:

1) The executive’s base salary is multiplied by the appropriate multiple:

Chief Executive Officer – 2 times annual base salary

Other Key Executives – 1 times annual base salary

2) The product is divided by The Laclede Group’s prior 365-day average closing common stock price as reported by the New York Stock Exchange

3) The resulting amount is rounded to the nearest 100 shares

Stock ownership levels should be achieved by each executive within 5 years of the adoption of these guidelines or within 5 years of the first appointment into a covered position. Once established, as long as the covered executive remains in his or her position, the ownership guideline does not change as a result of changes in his or her base salary or normal fluctuations in Laclede’s stock price. However, these guidelines may be amended at any time.

Ownership under these guidelines shall include individually owned shares, restricted shares and benefit plan investments in Laclede Group stock. Such guidelines apply to executives who; 1) are subject to the Section 16 requirements under the Securities Exchange Act and any other designated participants; and 2) receive annual restricted stock grants pursuant to the Equity Incentive Plan.

Active executives, covered under these guidelines, are also required to retain the shares acquired from the Equity Incentive Plan after the restrictions lapse for a minimum of 3 years.

Directors

To provide a direct link between Director and shareholder interests, members of the Board of Directors will be expected to hold equity interest in the Company. The guideline is established as follows:

1) The Director’s guideline is based on 2 times their annual cash retainer

2) The product is divided by The Laclede Group’s prior 365-day average closing common stock price as reported by the New York Stock Exchange

3) The resulting amount is rounded to the nearest 100 shares

Stock ownership levels should be achieved by each Director within 5 years of the adoption of these guidelines or within 5 years of the first appointment to the Board. Once established, as long as the covered Director remains in his or her position, the ownership guideline does not change as a result of changes in the annual retainer or normal fluctuations in Laclede’s stock price. However, these guidelines may be amended at any time. Shares considered owned include individually owned shares and restricted shares.

Active Directors, covered under these guidelines, are also required to retain the shares after the restrictions lapse for a minimum of 3 years.

AMENDMENT TO THE
2002 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

The 2002 Restricted Stock Plan for Non-Employee Directors is amended effective January 1, 2006 by replacing in Article II, Section 2(a) the number “300” with the number “450” and by replacing in Article II, Section 2(b) the number “450” with the number “600”.

The Laclede Group

Equity Incentive Plan
Performance-Contingent
Restricted Stock Award Agreement

THIS AGREEMENT, made as of this 2^nd day of November 2005, between The Laclede Group, Inc. (the “Company”) and [Participant Full Name] (the “Participant”).

Pursuant to the terms of the Company’s Equity Incentive Plan as approved by shareholders in January 2003 (the “Plan”), the Participant has been awarded shares of Restricted Stock conditioned upon the execution and delivery by the Company and the Participant of this Agreement setting forth the terms and conditions applicable to such award.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the parties hereto hereby agree as follows:

1. Award of Restricted Stock. Pursuant to, and subject to, the terms and conditions set forth herein and in the Plan, the Company awards to the Participant, effective as of the Award Date, a maximum of [Number of Shares] shares of Common Stock of the Company, subject to the terms, conditions and restrictions described in this Agreement and in the Plan (the “Performance-Contingent Restricted Stock”).

2. Award Date. The Award Date of the Performance-Contingent Restricted Stock awarded under this Agreement is November 2, 2005.

3. Incorporation of Plan. All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein. If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Administrator, shall govern. All capitalized terms used herein, but not otherwise defined, shall have the meaning given to such terms in the Plan.

4. Restrictions and Conditions. Except as otherwise provided in this Agreement, Participant shall forfeit any and all right to the Performance-Contingent Restricted Stock under this Award upon Participant’s termination of employment for Cause prior to the lapse of restrictions as provided in Section 5. Notwithstanding the foregoing, if a Change in Control Termination, occurs (a) within two years following the Change in Control or (b) prior to the lapse of restrictions under section 5, whichever occurs first; this Award shall be deemed earned at target performance level, and the restrictions shall be deemed lapsed as to such number of shares of Performance-Contingent Restricted Stock determined by multiplying the total shares subject to this Award by a fraction the numerator of which is the number of months in the Performance Period to the date of the Change in Control and the denominator of which is the total number of months in the Performance Period.

5. Lapse of Restrictions. The Participant accepts this Performance-Contingent Restricted Stock Award and agrees that the restrictions relative to the Award shall lapse only following the conclusion of the Performance Period and only to the extent the Administrator determines, in its sole discretion, that the Performance Contingency set forth on Appendix A to this Agreement has been met or exceeded. If the Administrator determines that:

(a) the Target level of performance has been achieved, the restrictions relative to all of the shares of Performance-Contingent Restricted Stock shall lapse and the Participant shall become vested in all of such shares,

(b) the Threshold level of performance has been achieved, the restrictions relative to 50% of the shares of Performance-Contingent Restricted Stock shall lapse and the Participant shall become vested in 50% of the Performance Contingent Restricted Stock, or

(c) performance has been achieved between the Threshold and Target levels of performance, the Administrator shall interpolate for performance between the Threshold and Target levels and shall determine the additional number of shares of Performance Contingent Restricted Stock as to which the restrictions shall lapse, such additional number to be determined by the Administrator in its discretion.

Vesting of any shares under this Agreement shall occur on the date of the anniversary of the Award Date following the certification of the satisfaction of the Performance Contingency by the Board of Directors; provided, that no shares shall vest if Participant is terminated for Cause prior to the vesting date. Any shares as to which any or all of the Performance Contingency has not been satisfied shall be forfeited.

In addition, if a Participant dies during the Performance Period or leaves the employment of the Company due to retirement (including early retirement and disability retirement) or disability during the Performance Period, the Participant will be eligible to earn a prorated Award based on the number of full months as a Participant during the Performance Period, as the Administrator may determine, and will be eligible to receive the underlying shares if the Performance Contingency is satisfied and the restrictions lapse as outlined in this Section 5.

6. Shareholder Rights. Participant shall have all of the rights of a shareholder of the Company with respect to shares of Performance-Contingent Restricted Stock, including the right to vote and to receive dividends, but remain subject to the non-transferability restrictions set forth in Section 8 of this Agreement.

7. How Shares are Held. The Performance-Contingent Restricted Stock shall be held by a Company custodian until all of the restrictions have lapsed and all applicable terms and conditions have been met. The Company shall cause the shares of Performance-Contingent Restricted Stock to be issued without a restrictive legend to be issued when all restrictions lapse as provided in Section 5.

8. Shares Non-Transferable. Shares of Performance-Contingent Restricted Stock awarded hereunder shall not be transferable by Participant and may not be, sold, assigned, disposed of, or pledged or hypothecated as collateral for a loan or as security for performance of any obligation or for any other purpose until after the restrictions have lapsed as provided in Section 5.

9. Right to Continued Employment. Nothing in this Agreement shall confer on the Participant any right to continuance of employment by the Company or a subsidiary nor shall it interfere in any way with the right of Participant’s employer to terminate Participant’s employment at any time.

10. Tax Withholding and Tax Election. The Company shall not be obligated to transfer any shares of Performance-Contingent Restricted Stock until Participant pays to the Company in cash, or any other form of property acceptable to the Company, the amount required to be withheld for any federal, state or local income, FICA or other taxes of any kind with respect to such shares. The Participant may, by notice to the Company, elect to have such withholding satisfied by a reduction of the number of shares otherwise so deliverable, such reduction to be calculated based on the Fair Market Value of the Common Stock on the date the restrictions lapse as provided in Section 5. The Company and its subsidiaries shall, to the extent permitted by law, have the right to deduct such taxes, from any payment of any kind otherwise due to Participant. Until the restrictions have lapsed as provided in Section 5, any dividends paid relative to the Performance Contingent Restricted Stock shall be treated as compensation and subject to tax withholdings in accordance with tax laws then in effect.

The Participant may, but is not required to, elect to apply the rules of Section 83(b) of the Internal Revenue Code, as amended (“Code”) to the issuance of the shares of Performance-Contingent Restricted Stock that is subject to a substantial risk of forfeiture. If the Participant makes an affirmative election under Section 83(b) of the Code, the Participant must file such election within 30 days after the date of this Agreement with the Internal Revenue Service and notify the Company within 30 days after making such election.

11. Confidential Information and Restrictions on Soliciting Employees. Notwithstanding any provision of this Agreement to the contrary, all proceeds realized, or that could be realized on sale of the Shares by the Participant as a result of this Award, shall be payable to the Company by the Participant if, during the period beginning on the date hereof and ending eighteen months following the date the Participant’s employment with the Company and its subsidiaries terminates provided that such termination is other than a Change in Control Termination, the Participant: (1) discloses Confidential Information, as defined below, to any person not employed by the Company or not engaged to render services to the Company; or (2) Solicits Employees, as defined below.

For purposes of this Section 11, “Confidential Information” means any confidential information obtained by the Participant while in the employ of the Company or a subsidiary, including, without limitation, any of the Company’s or subsidiary’s inventions, processes, methods of distribution, customers or trade secrets; provided, however, that this provision shall not preclude the Participant from use or disclosure of information known generally to the public or of information not considered confidential by persons engaged in the business conducted by the Company or subsidiary or from disclosure required by law or court order.

“Solicits Employees” means the Participant’s direct or indirect hire, solicit to hire, or attempt to induce any employee of the Company or a subsidiary (who is an employee of the Company or a subsidiary as of the time of such hire or solicitation or attempt to hire) or any former employee of the Company or a subsidiary (who was employed by the Company or a subsidiary within the 12-month period immediately preceding the date of such hire or solicitation or attempt to hire) to leave the employment of the Company or a subsidiary.

12. Integration. This Agreement, and the other documents referred to herein or delivered pursuant hereto which form a part hereof, contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement, including without limitation the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter and may only be amended by mutual written consent of the parties.

13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri, without regard to the provisions governing conflict of laws.

14. Compliance with Laws and Regulations. The obligation of the Company to deliver shares of Performance-Contingent Restricted Stock hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.

15. Participant Acknowledgment. By accepting this Award, the Participant acknowledges receipt of a copy of the Plan, and acknowledges that all decisions, determinations and interpretations of the Committee in respect of the Plan and this Agreement shall be final and conclusive.

In addition, the Participant acknowledges that violation by the Participant of Section 11 of this Agreement will obligate the Participant to pay to the Company all proceeds realized or that could be realized by the Participant as a result of this Award.

The Laclede Group, Inc.

By:      

D. H. Yaeger

Title: Chairman of the Board, President and Chief Executive Officer

[Participant]

Appendix A to

Performance Contingent Restricted Stock Award to [Participant Full Name]

Performance Period. The “Performance Period” for this Award shall be the period beginning November 2, 2005 and ending September 30, 2008.

Performance Contingency. The “Performance Contingency” for this Award is comprised of two performance measures: EPS Growth, weighted at 70%, and Dividend Growth, weighted at 30%.

i) EPS Growth – EPS Growth is measured as the average of the annual earnings per share of common stock for fiscal years 2006, 2007 and 2008. The Threshold and Target levels of performance are:

Threshold: average of $    per share or above;

Target: average of $    per share or above.

ii) Dividend Growth – Dividend Growth is measured as the total dividends per share declared on the Company’s common stock in fiscal year 2008. The Threshold and Target levels of performance are:

Threshold: dividends declared of $    per share or above;

Target: dividends declared of $    per share or above.