ex10-22.htm


    


      Exhibit
        10.22

      


      RETENTION
        AGREEMENT

      


       

      This
        RETENTION AGREEMENT (“Agreement”)
        is made and entered into as of the 24th day of September, 2007, by and
        among The Laclede Group, Inc., a Missouri corporation (“Laclede”), its
        wholly-owned subsidiary, SM&P Utility Resources, Inc., an Indiana
        corporation (“SM&P”) and Robert E. Shively (“Employee”).

       

      


      WITNESSETH
        THAT:

      


      WHEREAS,
        Laclede and SM&P
        (collectively, the “Company”) desire to explore the possible sale of SM&P
        (“Transaction”);

      


      WHEREAS,
        Employee is employed by
        SM&P and possesses skills and experience which the Company believes are of
        substantial value and importance to the success of the current operations
        of
        SM&P;

      


      WHEREAS,
        the Company believes that the
        skill and experience of Employee are also of substantial value and importance
        to
        the sale process and to potential buyers of SM&P in the Transaction
        (“Buyers” or “Buyer”);

      


      WHEREAS,
        the sale process may require
        additional time and effort on the part of the Employee;

      


      WHEREAS,
        the Company desires that
        Employee remain actively employed with SM&P through
        the day of closing of the Transaction as the term “Closing” is defined in any
        agreement evidencing the Transaction (“Closing”) and for at least a limited
        period of time following the Closing; and

      


      WHEREAS,
        Employee desires to render
        services to SM&P on the terms hereinafter set forth through the period
        indicated;

      


      NOW,
        THEREFORE, in consideration of the
        promises and of the covenants and agreements hereinafter set forth, it is
        covenanted and agreed as follows:

      


      1.           Retention
        Payment. Subject to the terms and conditions hereof, Company will pay
        Employee a retention payment (“Retention Payment”) in the amount specified on
Exhibit A.  Such payment shall be subject to applicable payroll
        tax withholding requirements.

      


      
        	
                (a)  

              	
                First
                  Payment. Company will pay one-half of the Retention Payment to
                  Employee promptly following the day of Closing, provided the Employee
                  has
                  not breached any provision of this
                  Agreement.

              


      

       

      


       

      


       

      
        
          
          

        

        
          1

          
          

        

        
          
          

        

      

      


       

      
        	
                (b)  

              	
                Second
                  Payment.  Promptly following the thirtieth (30th)
                  day after
                  Closing, Employee shall deliver a letter to Laclede in the form
                  attached
                  to this Agreement as Exhibit B certifying that the Employee has
                  not
                  breached any provision of this Agreement following
                  Closing.  Upon receipt of Employee’s letter, and provided the
                  Employee has not breached any provision of this Agreement prior
                  to
                  Closing, Company will pay promptly the remaining one-half of the
                  Retention
                  Payment to Employee.

              


      

       

      
        	
                (c)  

              	
                Resignation/Termination.
                  If, prior to Closing, Employee either (i) resigns without good
                  reason or
                  (ii) is terminated for cause, Employee shall forfeit all rights
                  to the
                  Retention Payment.  If, after Closing and through the thirtieth
                  (30th) day following Closing, Employee either (i) resigns without
                  good
                  reason or (ii) is terminated for cause, Employee shall forfeit
                  all rights
                  to the second half of the Retention
                  Payment.

              


      

       

      
        	
                 

              	
                (1)

              	
                The
                  phrase “good reason” shall mean: (i) a change in the reporting location of
                  greater than fifty (50) miles from where Employee is currently
                  performing
                  his or her job duties; or (ii) a reduction in the base salary,
                  position,
                  level of responsibilities, or conditions of the job which Employee
                  currently performs.

              


      

       

      
        	
                 

              	
                (2)

              	
                The
                  phrase “for cause” shall mean: (i) gross neglect of any of Employee’s
                  duties; (ii) willful violation of any of the Company’s policies, standards
                  or practices; (iii) fraud, dishonesty, or any other act of negligent,
                  reckless or willful misconduct; and (iv) breach of any provision
                  of this
                  Agreement.

              


      

       

      
        	
                 

              	
                (3)

              	
                For
                  purposes of this section, if Employee is terminated for reasons
                  other than
                  for cause and otherwise has complied with all of the terms of this
                  Agreement, then Employee will be entitled to receive the Retention
                  Payment.

              


      

       

      
        	
                (d)  

              	
                Stock
                  Awards.   Employee has previously been awarded shares
                  of Performance Contingent Restricted Stock under Laclede’s Equity
                  Incentive Plan (“Plan”).  Employee acknowledges that the terms
                  of the Plan and such awards provide that (i) Employee will forfeit
                  and otherwise lose all rights to such shares of restricted stock
                  as a
                  result of no longer being employed by a Laclede affiliate, and
                  (ii)
                  Laclede will have no obligation or liability to Employee under
                  such Plan
                  or such awards following Closing.

              


      

       

      2.           Performance
        Contingent Payment.  Subject to the terms and conditions hereof,
        provided that each of the conditions listed in Section 2(a) below is met
        in the
        sole discretion of Laclede, and Employee has not breached any provision of
        this
        Agreement prior to Closing, Company will pay Employee a performance contingent
        payment (“Performance Payment”) in the amount specified on Exhibit
        A.  Such payment shall be subject to applicable payroll tax
        withholding requirements.

      


      (a)           Conditions.

      


      
        	
                 

              	
                (1)

              	
                Earnings.  Company
                  meets or exceeds its financial targets for those portions of fiscal
                  2007
                  and fiscal 2008 that occur within the term of this
                  Agreement.  For purposes of this section, the phrase “financial
                  targets” shall mean the rolling estimate for earnings for fiscal 2007 and
                  the targets for earnings for fiscal 2008 provided by Company to
                  Laclede at
                  its August 2007 Strategic
                  Workshop.

              


      

      


      
        
          
          

        

        
          2

          
          

        

        
          
          

        

      

      
        	
                 

              	
                (2)

              	
                Customers.  Company
                  retains all of its significant customers on terms and pricing
                  substantially similar to the terms and pricing effective for each
                  such
                  customer on the date of this
                  Agreement.

              


      

      


      
        	
                 

              	
                (b)

              	
                Payment
                  of Performance Payment.  Subject to Sections 2(b)(1) and
                  2(b)(2) below, if Company determines that Employee is entitled
                  to the
                  Performance Payment, Company will pay Employee the Performance
                  Payment, if
                  applicable, on the Second Payment
                  Date.

              


      

       

      
        	
                 

              	
                (1)

              	
                If
                  on or before the thirtieth (30th) day following Closing, Employee
                  either
                  (i) resigns without good reason or (ii) is terminated for cause,
                  Employee shall forfeit all rights to the Performance
                  Payment.

              


      

       

      
        	
                 

              	
                (2)

              	
                If
                  Employee is terminated for reasons other than for cause and otherwise
                  has
                  complied with all of the terms of this Agreement, then Employee
                  will be
                  entitled to receive the Performance
                  Payment.

              


      

       

      3.           Employee
        Covenants.  Employee covenants and agrees as follows:

      


      
        	
                (a)  

              	
                Through
                  the thirtieth (30th)
                  day
                  following Closing, Employee will use his or her best efforts to
                  perform
                  the responsibilities of his or her current position, and to maintain
                  and
                  grow the value of SM&P and its
                  business.

              


      

       

      
        	
                (b)  

              	
                Until
                  Closing, Employee will use his or her best efforts to facilitate
                  the
                  Transaction, including without limitation the following, as requested
                  by
                  Company, (i) being available when and where reasonably necessary
                  for due
                  diligence purposes or otherwise, (ii) collection of due diligence
                  information, (iii) preparation of analyses of SM&P and its business,
                  (iv) timely review and accurate verification of proposed representations
                  and warranties, (v) being positive and supportive of the Transaction
                  to
                  employees, customers and potential buyers, and (vi) communicating
                  directly
                  or indirectly with any potential Buyer or its representatives only
                  through, or in the presence of, a Laclede representative designated
                  by
                  Laclede for such purpose, or with the express authorization of
                  an officer
                  of Laclede.

              


      

       

      
        	
                (c)  

              	
                From
                  the date of Closing through the thirtieth (30th)
                  day
                  following Closing, Employee will use his or her best efforts to
                  aid the
                  Buyer in the transition of ownership from Laclede to
                  Buyer.

              


      

       

      
        	
                (d)  

              	
                Until
                  the earlier of (i)  thirty (30) days following Closing, or (ii)
                  termination pursuant to Section 4 of this Agreement, Employee will
                  not
                  disclose to anyone, including without limitation, customers, employees,
                  competitors, media and potential Buyers, the existence of the pending
                  Transaction, the agreements, terms, conditions, negotiation or
                  status
                  thereof, the existence, terms or conditions of this Agreement or
                  any other
                  confidential information of the Company, including without limitation,
                  pricing, strategic plans, customer information, marketing strategies
                  or
                  similar core information, except as expressly authorized by the
                  Company.   This provision shall not apply to confidential
                  information that becomes generally available to the public other
                  than as a
                  result of a disclosure by Employee.  Further, nothing in this
                  provision will preclude Employee from consulting with his or her
                  personal
                  attorney for legal advice regarding the terms and conditions of
                  this
                  Agreement.

              


      

       

      
        
          
          

        

        
          3

          
          

        

        
          
          

        

      

      
        	
                (e)  

              	
                Employee
                  acknowledges that nothing in this Agreement supersedes or amends
                  in any
                  way any confidentiality obligation that Employee owes to SM&P,
                  including without limitation, any obligations existing pursuant
                  to the
                  Employee Confidentiality Agreement between SM&P and
                  Employee.

              


      

       

      
        	
                (f)  

              	
                Employee
                  will not, directly or indirectly, perform any of the following
                  for a
                  period extending until thirty (30) days after the earlier of (i)
                  Closing,
                  or (ii) termination of this
                  Agreement:

              


      

       

      
        	
                 

              	
                (1)

              	
                solicit
                  or hire or assist anyone else to solicit or hire any employee of
                  SM&P,
                  or seek to persuade or assist anyone else to persuade any such
                  employee to
                  discontinue employment with SM&P;
                  or

              


      

       

      
        	
                 

              	
                (2)

              	
                participate
                  in, engage in, assist in, consult with, serve as an employee of
                  or partner
                  in, encourage or provide financial resources to any activity which
                  competes with SM&P in any territories in which SM&P has conducted
                  business, including without limitation solicitation of customers
                  of
                  SM&P for a competitor of SM&P.   In the event that
                  Employee has forfeited his or her rights to the Retention Payment
                  pursuant
                  to Section 1(c) of this Agreement for reasons other than due to
                  a breach
                  of this Agreement, then this Section 3(f)(2) shall no longer apply
                  and
                  will not have force and effect subsequent to Employee’s employment with
                  SM&P.

              


      

       

      4.           Term.   This
        Agreement is effective as of the date first written above and will terminate
        automatically and without notice on June 30, 2008 (“Termination Date”), unless
        unilaterally extended by Laclede, and all the obligations set forth in this
        Agreement shall terminate and be of no further force and effect; provided
        that
        termination of this Agreement will not terminate liability for any breaches
        prior to the Termination Date.  It is expressly understood and agreed
        that if this Agreement terminates without a sale of SM&P, or if Laclede
        decides not to sell SM&P, Employee will be placed in the same employment
        position he or she would have been had no sale process taken
        place.  If prior to June 30, 2008 the Company has entered into a
        definitive agreement for the Transaction, then the Termination Date shall
        be
        extended (i) until thirty (30) days following the Closing or (ii) until such
        definitive agreement is terminated without Closing.

      


      5.           Arbitration.  Employee
        agrees that any dispute between Employee and the Company arising out of this
        Agreement will be resolved through arbitration.  Any party may demand
        arbitration by providing notice to the other parties.  The parties
        shall agree upon an arbitrator, who shall be registered and in good standing
        with an arbitration association, or, if they cannot agree within 20 days
        of
        demand, the demanding party shall request the American Arbitration Association
        or National Arbitration Forum provide an arbitrator.  Any arbitrator
        shall apply substantive law consistent with the Federal Arbitration Act,
        9
        U.S.C. Sections 1 -16.  Each party shall bear their own expenses
        resulting from the arbitration, and shall split the joint costs of such
        arbitration proceeding fifty percent between Employee, on the one hand, and
        Company, on the other.  The foregoing does not preclude Laclede from
        seeking injunctive or other relief from a court of law or equity to enjoin
        any
        breach by Employee and pursuing consequential damages for any such breach
        in the
        same forum.  Any arbitration or litigation shall be held in St. Louis
        County, Missouri.

      


      
        
          
          

        

        
          4

          
          

        

        
          
          

        

      

      6.           Miscellaneous.This
        Agreement is not an agreement of employment and does not in any way impact
        Employee’s status as an at-will employee. This Agreement shall be interpreted in
        accordance with and governed by the laws of the State of Missouri without
        regard
        to the principles of conflicts of law which might otherwise apply. No
        modification, amendment or waiver of any provision of this Agreement shall
        be
        effective unless in writing specifically referring hereto and signed by the
        parties hereto.  Captions in this Agreement are for reference purposes
        only.  Any notice to be given by any party hereunder shall be in
        writing and shall be deemed to have been duly given if delivered or mailed,
        certified or registered mail, postage prepaid, as follows:

      


      TO
        COMPANY:

      The
        Laclede Group, Inc.

      720
        Olive
        Street

      St.
        Louis, MO 63101

      Attn:
        Mark C. Darrell, General
        Counsel

      


      and
        to
        Employee at his or her address as it appears on the payroll records of SM&P,
        or to such other address as may have been furnished by any party to the other
        parties by written notice.

      


      7.           Severability.   If
        any provision of this Agreement shall for any reason be held excessively
        broad
        or unreasonable as to time, matter or interest to be protected, the court
        is
        hereby empowered and requested to construe such provision by narrowing it
        so as
        to make it reasonable and enforceable to the extent allowed by
        law.  The covenants and agreements contained in this Agreement are
        separate and severable, and in the event any portion or portions of such
        paragraphs are declared invalid or unenforceable, the validity of the remaining
        paragraphs of this Agreement will not be affected.

      


      


      [signature
        page follows]


      
        
          
          

        

        
          5

          
          

        

        
          
          

        

      


      


      IN
        WITNESS WHEREOF, the parties hereto
        have caused this Agreement to be executed as of the date and year first above
        written.

      


       

      THIS
        CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
        THE
        PARTIES.

       

      


      


      THE
        LACLEDE GROUP, INC.

      


      


      By:
/s/
        Douglas H.
        Yaeger

      Douglas
        H. Yaeger

      Chairman,
        President and
        CEO

      


      


      SM&P
        UTILITY RESOURCES,
        INC.

      


      


      By:
/s/
        Douglas H.
        Yaeger

      Douglas
        H. Yaeger

      Chief
        Executive Officer

      


      


      EMPLOYEE

      


      


      /s/
        Robert E.
        Shively                                                                

      Robert
        E. Shively

      



      
        
          
          

        

        
          6

          
          

        

        
          
          

        

      


      Exhibit
        A

      Retention
        Payment

      


      Retention
        Payment Amount = $285,000

      


      Performance
        Payment Amount = $57,000


      
        
          
          

        

        
          7

          
          

        

        
          
          

        

      


      Exhibit
        B

      Sample
        Form Certification Letter

      


      


      
        


      

      
        Mark
          C.
          Darrell

        General
          Counsel

        The
          Laclede Group, Inc.

        720
          Olive
          Street, Suite 1504

        Saint
          Louis, Missouri 63101

        


        Re:           Employee
          Certification in Accordance with Retention Agreement

        


        Dear
          Mark:

        


        In
          accordance with Section 1(b) of the
          September __, 2007 Retention Agreement with The Laclede Group, Inc.
          and SM&P Utility Resources, Inc. (“Retention Agreement”), I hereby certify
          that since the Closing of the Transaction as defined in the Retention Agreement,
          I have not breached any of the terms of the Retention Agreement.

        


        Sincerely,

        


        


        


        ______________________________

        Employee