<PAGE>
<PAGE>
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
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Laclede Gas Company
(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:
- --------------------------------------------------------------------------------
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTIONS APPLIES:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
- --------------------------------------------------------------------------------
(5) TOTAL FEE PAID:
- --------------------------------------------------------------------------------
/ / 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
[LOGO]
Laclede Gas Company
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
JANUARY 28, 1999
<PAGE>
<PAGE>
Laclede Gas Company
720 OLIVE STREET
ST. LOUIS, MISSOURI 63101
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
The Annual Meeting of Stockholders of Laclede Gas Company will be held at
Marriott's Pavilion Hotel, One Broadway, St. Louis, Missouri, beginning at
10:00 a.m., Central Standard Time, on Thursday, January 28, 1999, for the
following purposes:
1. To elect three Directors, each to serve for a term of three years and
until the respective successor shall be duly elected and qualified (see
Proposal 1 on page 3).
2. To ratify the appointment by the Board of Directors of Deloitte & Touche
LLP as the firm of independent public accountants to audit the accounts
of the Company for the fiscal year ending September 30, 1999 (see
Proposal 2 on page 13).
3. To transact such other business as may properly come before said
meeting, or any adjournment or adjournments thereof.
By order of the Board of Directors,
MARY CAOLA KULLMAN,
Secretary
St. Louis, Missouri
December 18, 1998
I M P O R T A N T
We hope you will attend the Annual Meeting. If you are unable to be
present, please sign, date and return the enclosed proxy as soon as possible. A
return envelope, which does not require postage if mailed in the United States,
is enclosed for your convenience.
Stockholders representing a majority of Common Stock issued and outstanding
must be present or represented by proxy in order to constitute a quorum. To
ensure the presence of a quorum at this meeting, an early return of your proxy
is solicited by the Board of Directors.
<PAGE>
<PAGE>
LACLEDE GAS COMPANY
720 OLIVE STREET
ST. LOUIS, MISSOURI 63101
------------------------
P R O X Y S T A T E M E N T
This statement is furnished in connection with a solicitation of proxies by
the Board of Directors of Laclede Gas Company (hereinafter called the Company)
to be used at the Annual Meeting of Stockholders of the Company to be held on
January 28, 1999, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. The Company's Annual Report for 1998, including
financial statements, has been mailed to stockholders. The Company's proxy
statement and form of proxy are being released to stockholders beginning on
approximately December 18, 1998. Execution of the enclosed proxy given in
response to this solicitation will not affect a stockholder's right to attend
the meeting and to vote in person. Presence at the meeting of a stockholder who
has signed a proxy does not in itself revoke a proxy. Any stockholder giving a
proxy may revoke it any time before it is exercised by giving notice thereof to
the Company in writing or in open meeting. Unless so revoked, the shares
represented thereby will be voted in accordance with the specifications
thereon.
The Company has authorized 50 million shares of $1.00 Par Value Common
Stock and on October 31, 1998, there were outstanding 17,627,987 shares. Only
holders of Common Stock at the close of business on December 11, 1998, are
entitled to notice of, and to vote at, the meeting. Generally, each share of
Common Stock represents one vote; but in the election of Directors,
stockholders have cumulative voting rights. If cumulative voting rights are
exercised by any stockholder, he or she shall have the right to cast as many
votes in the aggregate as shall equal the number of Common Stock shares so held
by him or her in the Company, multiplied by the number of Directors to be
elected. Each stockholder may cast the whole number of votes, either in person
or by proxy, for one nominee, or distribute them among two or more nominees. To
exercise cumulative voting rights, please indicate appropriate instructions on
the face of the proxy. Unless directions on cumulative voting are specified in
the proxy, the persons named in the form of proxy reserve the right to vote
each proxy cumulatively and for the election of less than all the nominees, but
they do not presently intend to do so unless candidates other than those named
herein for Directors are duly proposed at the meeting.
Stockholders representing a majority of the Common Stock issued and
outstanding must be present or represented by proxy to constitute a quorum.
With regard to the election of Directors, since three Directors are to be
elected, the three nominees receiving the greatest number of affirmative votes
will be deemed elected; therefore, shares represented by proxies which are
marked "WITHHOLD AUTHORITY" will have no effect. If a stockholder excepts from
the proxy one or more Director nominees, all votes represented by the shares
held by such stockholder shall, unless otherwise specifically stated, be
allocated as evenly as possible for and among the remaining nominees. With
regard to Proposal 2, or any other matters properly brought before this
meeting, approval requires the affirmative vote of a majority of the shares
entitled to vote and represented in person or by proxy at this meeting (unless
a greater affirmative vote is required by the Company's Articles of
Incorporation or by state law). Shares represented by proxies which are marked
"ABSTAIN" or which deny discretionary authority on any other matters will be
counted as shares present for purposes of determining quorum; such shares will
also be treated as shares present and entitled to vote on Proposal 2 and any
such other matters, which will have the same effect as a vote against Proposal
2 and any such other matters. Proxies relating to "street name" shares which
are not voted by brokers on one or more, but less than all, matters will be
considered present at the Annual Meeting for purposes of determining quorum,
but will not be treated as shares represented at the meeting as to such
matter(s) not voted on, and therefore will not have the effect of either an
affirmative or negative vote, except where the vote of the holders of a
majority of outstanding Common Stock is required.
When a stockholder participates in the Company's Dividend Reinvestment and
Stock Purchase Plan, the proxy to vote shares registered in the stockholder's
own name will include those shares held for the stockholder in the Dividend
Reinvestment and Stock Purchase Plan. If the stockholder does not send any
proxy to vote the
2
<PAGE>
<PAGE>
shares registered in his or her own name, the shares held for the stockholder
in the Dividend Reinvestment and Stock Purchase Plan will, unless such
stockholder attends the meeting and votes in person, not be voted or counted
for the purpose of determining a quorum.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals to be considered for inclusion in the Company's
proxy statement under the Securities and Exchange Commission's Rule 14-a8 must
be submitted on a timely basis. Proposals for the 2000 Annual Stockholders'
Meeting must be received by the Company no later than August 21, 1999. Any such
proposals, as well as any questions related thereto, should be directed to the
Secretary of the Company.
In addition to the above requirements governing stockholder proposals to be
included in the Company's Proxy Statement, stockholders who intend to submit a
proposal for the 2000 Annual Meeting, and stockholders who intend to submit
nominations for Directors for consideration at the meeting, must provide
written notice of any such proposed action in accordance with the Company's
By-laws. Such notice required by the By-laws should be addressed to the
Secretary and must be received by the Secretary at the Company's principal
executive offices by November 29, 1999 but not earlier than October 29, 1999
(not less than 60 days nor more than 90 days prior to January 28, 2000). The
written notice must satisfy certain requirements specified in the Company's
By-laws. A copy of the By-laws will be sent to any stockholder upon written
request to the Secretary. Under the requirements provided in the above-
referenced By-laws, the deadline for stockholders to submit proposals or
Director nominations to be considered at the Annual Meeting of Stockholders
on January 28, 1999 has passed.
PROPOSAL 1. ELECTION OF DIRECTORS
It is the intention of the persons named in the enclosed form of proxy to
vote such proxy FOR the election of the three nominees listed below for
Directors for terms expiring in 2002. If any nominee becomes unavailable for
any reason before the meeting (which is not anticipated), the proxies will be
voted for a person to be selected by the Board of Directors of the Company.
INFORMATION ABOUT NOMINEES AND DIRECTORS
The following information with respect to principal occupation or
employment for the past five years, name and principal business of the
corporation or other organization in which such occupation or employment is
carried on, and in regard to other affiliations, and to beneficial ownership of
securities at September 30, 1998, has been furnished to the Company by the
respective nominees and Directors continuing in office. The Board recommends
that Messrs. Beumer, Jaudes and Stupp be reelected for new three year terms.
NOMINEES FOR NEW TERM (TO EXPIRE AT ANNUAL MEETING, 2002):
RICHARD E. BEUMER, 60, has been Chairman of the Board and Chief Executive
Officer of Sverdrup Corporation since January 1, 1996. Sverdrup Corporation
provides complete capabilities for the development, design, construction and
operation of capital facilities and technical systems. From July 1, 1994 to
December 31, 1995, he was President and Chief Executive Officer of Sverdrup
Corporation. Prior to that he served as President of Sverdrup Corporation from
January 1, 1993 to June 30, 1994. He is a Director of Mercantile
Bancorporation Inc.
Year first elected a Director: 1996
3
<PAGE>
<PAGE>
ROBERT C. JAUDES, 64, has been Chairman of the Board and Chief Executive
Officer of the Company since December 1, 1997. Effective January 1, 1999 he
will relinquish the office of Chief Executive Officer, but retain his position
as Chairman of the Board until after the meeting on January 28, 1999. From
January 27, 1994 to December 1, 1997 he served as Chairman of the Board,
President and Chief Executive Officer. He served as President and Chief
Executive Officer of Laclede Gas Company from August 1, 1991 to January 26,
1994. Mr. Jaudes has been with Laclede Gas Company since 1955.
Year first elected a Director: 1983<Fa>
ROBERT P. STUPP, 68, is, and since December 31, 1990, has been, the President
of Stupp Bros., Inc., established on December 31, 1990, which has four
operating divisions: Stupp Bros. Bridge & Iron Co. of St. Louis, Missouri,
fabricator of iron and steel; Stupp Corporation of Baton Rouge, Louisiana, a
steel pipe manufacturer; Stupp Metals of St. Louis, Missouri, a steel service
center; and Fulton Iron Works International of St. Louis, Missouri, engineers
and manufacturers of machinery. Mr. Stupp currently serves in senior executive
positions in these operating divisions. He has served as a senior executive
officer of one or more of those entities since 1960. He is a Director of Stupp
Bros., Inc.
Year first elected a Director: 1990
YOUR BOARD OF DIRECTORS RECOMMENDS THAT THE FOREGOING NOMINEES
EACH BE ELECTED FOR A THREE-YEAR TERM EXPIRING IN 2002 AND UNTIL
THE RESPECTIVE SUCCESSOR SHALL BE DULY ELECTED AND QUALIFIED.
TERM EXPIRING AT ANNUAL MEETING, 2000:
ANDREW B. CRAIG, III, 67, retired on April 30, 1998 as Chairman of the Board of
NationsBank Corporation. He had served in that position since January 1, 1997.
Previously, he had been Chairman of the Board, Chief Executive Officer and
President of Boatmen's Bancshares, Inc.; Chairman from 1989 to 1997, Chief
Executive Officer from 1988 to 1997 and President from 1985 to 1994. In
addition, he is a Director of Grupo Modelo S.A. de C.V.
Year first elected a Director: 1994
C. RAY HOLMAN, 56, is Chairman of the Board and Chief Executive Officer of
Mallinckrodt Inc., a global medical products company. He has been Chairman
since October 1994, Chief Executive Officer since December 1992, and was
President from December 1992 to December 1995. In addition to being a Director
of Mallinckrodt Inc., Mr. Holman is a Director of BankAmerica Corp.
Year first elected a Director: 1994
WILLIAM E. NASSER, 59, is Chairman of the Board, President and Chief Executive
Officer of Energy BioSystems Corporation, a biotechnology company focusing on
biotechnology for the refining and oil production industries. 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 Energy BioSystems Corporation.
Year first elected a Director: 1994
[FN]
- -------
<Fa> "Control Person"--defined as one who, other than solely as a Director of
Laclede Gas Company, possesses the power to direct the management and
policies of Laclede Gas Company.
4
<PAGE>
<PAGE>
TERM EXPIRING AT ANNUAL MEETING, 2001:
DR. HENRY GIVENS, JR., 65, has been President of Harris-Stowe State College for
the last 19 years. He is a Director of Mercantile Bancorporation Inc.
Year first elected a Director: 1992
MARY ANN KREY, 51, 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., CPI Corporation and Masco Corp.
Year first elected a Director: 1992
H. EDWIN TRUSHEIM, 71, retired on January 26, 1995 as Chairman of the Board of
General American Life Insurance Company, a mutually owned company serving both
individuals and groups with life and health insurance as well as pension plans
and pension administrative services. Previously, he was Chairman of the Board
from May 15, 1992 until January 26, 1995. He is a Director of Angelica
Corporation, Venture Stores, Inc., RehabCare Corporation, and Reinsurance Group
of America.
Year first elected a Director: 1986
DOUGLAS H. YAEGER, 49, has been President and Chief Operating Officer of the
Company since December 1, 1997. Effective January 1, 1999, he will also be
Chief Executive Officer of the Company. He served as Executive Vice
President-Operations and Marketing of the Company from September 1, 1995
through November 30, 1997 and Senior Vice President-Operations, Gas Supply and
Technical Services from January 27, 1994 to August 31, 1995.
Year first elected a Director: 1997<Fa>
The standing committees of the Board of Directors for the fiscal year ended
September 30, 1998, included the Audit Committee, the Compensation Committee
and the Nominating Committee.
The Audit Committee, comprised of five members, now consisting of: Messrs.
Beumer, Craig, Givens, Holman and Trusheim, Chairman, met four times during the
1998 fiscal year. It is the duty of the Committee to recommend to the Board
independent auditors to perform audit and non-audit services, review the scope
and results of such services, review with management and the independent
auditors any recommendations of the auditors regarding changes and improvements
in the Company's accounting procedures and controls and management's response
thereto, and report to the Board after each Audit Committee meeting.
The Compensation Committee, comprised of four members, now consisting of:
Ms. Krey and Messrs. Nasser, Stupp and Trusheim, Chairman, met four times
during the 1998 fiscal year. It is the duty of the Committee to review and
recommend to the Board the salaries and all other forms of compensation of the
Company's Officers.
The Nominating Committee, comprised of five members, now consisting of: Ms.
Krey and Messrs. Nasser, Stupp, Trusheim and Jaudes, Chairman, met twice during
the 1998 fiscal year. It is the duty of the Nominating Committee to recommend
new Director nominees to the Board of Directors. Stockholders may recommend
Director nominees to the Committee in writing in accordance with the notice
provisions set forth in the Company's By-laws (as hereinbefore summarized),
giving pertinent background and other information as required by the Company's
By-laws, and such person will be given the same consideration as any other
person reviewed as a possible nominee.
During the 1998 fiscal year, there were 14 meetings of the Board of
Directors. All Directors attended 75% or more of the aggregate number of
meetings of the Board and applicable committee meetings.
[FN]
- -------
<Fa> "Control Person"--defined as one who, other than solely as a Director of
Laclede Gas Company, possesses the power to direct the management and
policies of Laclede Gas Company.
5
<PAGE>
<PAGE>
BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK
The following table sets forth as of September 30, 1998 the beneficial
ownership of the Company's Common Stock by (i) Stupp Bros., Inc., 120 South
Central Ave., Ste. 1650, St. Louis, MO 63105, the only person or entity who as
of September 30, 1998, is known to be the beneficial owner of 5% or more of the
Company's Common Stock, (ii) each of the Directors, (iii) each of the Company's
current Executive Officers listed in the Summary Compensation Table, and (iv)
all Directors and Executive Officers as a group.
<TABLE>
AMOUNT AND NATURE OF OWNERSHIP
<CAPTION>
SOLE VOTING SHARED VOTING
AND/OR AND/OR
NAME OF INVESTMENT INVESTMENT PERCENT
BENEFICIAL OWNER POWER POWER TOTAL OF CLASS
---------------- ----------- ------------- ----- --------
<S> <C> <C> <C> <C>
R. E. Beumer................................... 1,500<F1> 700 2,200 <F*>
A. B. Craig, III............................... 2,600<F1> -0- 2,600 <F*>
H. Givens, Jr.................................. 2,000<F1> -0- 2,000 <F*>
C. R. Holman................................... 2,600<F1> -0- 2,600 <F*>
R. C. Jaudes................................... 6,978 4,000 10,978 <F*>
M. A. Krey..................................... 3,000<F1> -0- 3,000 <F*>
G. T. McNeive, Jr.............................. 3,013 -0- 3,013 <F*>
W. E. Nasser................................... 2,600<F1> -0- 2,600 <F*>
K. J. Neises................................... 235 -0- 235 <F*>
R. M. Lee...................................... -0- -0- -0- <F*>
R. P. Stupp.................................... 5,032<F1><F2> -0- 5,032 <F*>
H. E. Trusheim................................. 3,074 -0- 3,074 <F*>
D. H. Yaeger................................... 2,636 -0- 2,636 <F*>
Stupp Bros., Inc............................... 1,155,000<F3> -0- 1,155,000 6.55%
All Directors and Executive Officers as a Group
(21)......................................... 53,034<F4> <F*>
<FN>
- -------
<F1> Includes restricted, nonvested shares granted under the Restricted Stock
Plan for Non-Employee Directors, as described in more detail on page 13.
<F2> Does not include the shares owned by Stupp Bros., Inc., which are set
forth separately in the table and of which shares Mr. Stupp is a
beneficial owner with shared voting and investment power.
<F3> Mr. Stupp is a Director and Executive Officer of Stupp Bros., Inc. and has
a one-third interest in a voting trust which controls 100% of the stock of
Stupp Bros., Inc.
<F4> This amount does not include the shares owned by Stupp Bros., Inc.
<F*>Less than one percent.
</TABLE>
6
<PAGE>
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Set forth below is certain information as to amounts paid, earned or
awarded by the Company for the fiscal year ended September 30, 1998, and for
the immediately preceding two fiscal years for services in all capacities by
the Chief Executive Officer and the four other most highly compensated
Executive Officers.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION
---------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION<F1> YEAR SALARY COMPENSATION<F2> COMPENSATION<F3>
---------------------- ---- ------ ---------------- ----------------
<S> <C> <C> <C> <C>
R. C. Jaudes 1998 $530,833 $151,965 $30,339
Chairman of the 1997 $506,667 $140,463 $21,877
Board and CEO 1996 $486,667 $129,640 $20,380
D. H. Yaeger 1998 $280,000 $ 54,240 $ 6,406
President and Chief 1997 $225,000 $ 25,025 $ 5,320
Operating Officer 1996 $213,333 $ 17,168 $ 5,099
K. J. Neises 1998 $188,000 $ 20,460 $10,074
Senior Vice President--Energy 1997 $177,167 $ 9,425 $ 8,605
and Administrative Services 1996 $169,000 $ 6,300 $ 6,970
G. T. McNeive, Jr. 1998 $180,333 $ 22,110 $ 6,763
Senior Vice President--Finance 1997 $161,667 $ 15,925 $ 5,446
and General Counsel 1996 $146,000 $ 9,450 $ 4,171
R. M. Lee 1998 $157,500 $ 6,600 $ 8,455
Senior Vice President-- 1997 $157,500 $ 6,500 $ 7,725
Administrative Services 1996 $155,000 $ 6,300 $ 5,976
<FN>
- -------
<F1> During the Company's last fiscal year, the following named Executive
Officers have been promoted and assigned increases in their
responsibilities: on December 1, 1997, Mr. Yaeger was promoted from
Executive Vice President--Operations and Marketing to President and Chief
Operating Officer; and on March 1, 1998, Mr. McNeive was promoted from
Senior Vice President--Finance and Chief Financial Officer to Senior Vice
President--Finance and General Counsel, and Mr. Neises was promoted from
Senior Vice President--Gas Supply and Regulatory Affairs to Senior Vice
President--Energy and Administrative Services. Effective January 1, 1999,
Mr. Yaeger will be the Company's Chief Executive Officer as Mr. Jaudes
relinquishes such office as of that date.
<F2> 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 together, in the case of Messrs. Jaudes and
Yaeger, with Board of Directors and Board committee fees for those three
years. For a more detailed discussion of the Incentive Compensation Plan,
see the Long-Term Incentive Plan Table and discussion thereof on page 8.
<F3> For 1998 this column includes (a) above-market interest on deferrals under
the Company's Deferred Income Plan described on page 10 (Mr. Jaudes,
$10,148; Mr. Yaeger, $-0-; Mr. Neises, $1,642; Mr. McNeive, $570 and Mr.
Lee, $1,647); (b) above-market interest on deferrals under the Company's
Deferred Income Plan II described on page 10 (Mr. Jaudes, $11,834; Mr.
Yaeger, $363; Mr. Neises, $2,552; Mr. McNeive, $332 and Mr. Lee, $1,079);
(c) Company matching contributions under the Company's Salary Deferral
Savings Plan which was established under Section 401(k) of the Internal
Revenue Code (Mr. Jaudes, $8,220; Mr. Yaeger, $5,906; Mr. Neises, $5,743;
Mr. McNeive, $5,724 and Mr. Lee, $5,592); and (d) Company paid premiums
for supplemental travel and accident insurance for accidental death or
dismemberment with benefits of up to $250,000 (approximately $137 for each
named Executive Officer).
</TABLE>
7
<PAGE>
<PAGE>
INCENTIVE COMPENSATION PLAN
The following table discloses certain information about the Company's
Incentive Compensation Plan, which is considered a type of long-term incentive
plan under the proxy disclosure rules of the Securities and Exchange
Commission.
<TABLE>
LONG TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<CAPTION>
PERIOD
NUMBER UNTIL
NAME OF UNITS MATURATION<F1>
---- -------- --------------
<S> <C> <C>
Robert C. Jaudes.................................... 5,500 2 years
Douglas H. Yaeger................................... 11,500 5 years
Kenneth J. Neises................................... 10,000 4 years
Gerald T. McNeive, Jr............................... 5,000 4 years
<FN>
- -------
<F1> Prior to January 26, 1995, Dividend Equivalents (equal to the cash
dividend paid on each share of the Company's Common Stock) were paid on
each of the Share Units to the recipient until his death, and thereafter
to a surviving spouse, if any, for life. Effective for awards of Share
Units made on and after January 26, 1995, no post-retirement Dividend
Equivalents and no post-retirement Deferred Compensation Amounts shall be
paid to an awardee who retires before attaining the age of 65 (other than
by reason of death or disability or following a hostile change of control)
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) subsequent to the date upon which the Share
Units are awarded:
<CAPTION>
NUMBER OF YEARS OF SERVICE
AGE AT REQUIRED FOLLOWING THE
DATE OF AWARD DATE OF SUCH AWARD
------------- --------------------------
<S> <C>
61 and older.............. 2
55-60..................... 4
54 and under.............. 5
The amount of Dividend Equivalents paid to any named Executive during the
last fiscal year is disclosed in the "Other Annual Compensation" column in
the Summary Compensation Table.
</TABLE>
Each year, the Company credits or debits an amount (Deferred Compensation
Amount) to each Share Unit outstanding at the end of a fiscal year equal,
subject to certain adjustments, to the per common share net increase or
decrease in Consolidated Retained Earnings for that fiscal year. The aggregate
of annual Deferred Compensation Amounts are payable in ten equal annual
installments to the recipient or, if he is no longer living, his designated
beneficiaries or estate beginning on the fifth month following the month in
which the earlier of the following occurs: retirement, death, disability or the
recipient's election to terminate employment with the Company following a
hostile change in control (as defined in the Plan). No Deferred Compensation
Amounts accrue on Share Units held by a recipient after the fiscal year in
which his employment has terminated due to retirement, disability, death or the
recipient's election to terminate following a hostile change in control.
Furthermore, if a participant's employment with the Company ceases other than
by reason of retirement, disability, death or termination of employment
following a hostile change in control, then all Share Units are forfeited and
all future rights to Deferred Compensation Amounts and Dividend Equivalents on
account of such Share Units lapse. Similarly, if a participant retires before
age 65 (other than by reason of death or disability or following a hostile
change in control) without providing the required additional years of service
as discussed in footnote 1 to the table above, then no post-retirement benefits
will be payable to such participant for such Share Units. During the fiscal
year ended September 30, 1998, $.26 was credited as a Deferred Compensation
Amount on account of each Share Unit. Interest accrues on the Deferred
Compensation Amounts on Share Units (for which the required additional years of
service have been provided) only after the date of retirement, disability,
death or election of recipient to terminate employment following a hostile
change in control.
8
<PAGE>
<PAGE>
PENSION PLAN
The table below shows estimated annual benefits payable at a normal
retirement date under the Employees' Retirement Plan of Laclede Gas
Company--Management Employees and the Laclede Gas Company Supplemental
Retirement Benefit Plan.
<TABLE>
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
<CAPTION>
AVERAGE YEARS OF SERVICE
FINAL --------------------------------------------------------------------------
COMPENSATION<F1> 15 20 25 30 35 40 45
---------------- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
$150,000................. $ 44,230 $ 58,974 $ 73,717 $ 88,461 $103,204 $117,948 $133,698
200,000................. 59,980 79,974 99,967 119,961 139,954 159,948 180,948
250,000................. 75,730 100,974 126,217 151,461 176,704 201,948 228,198
300,000................. 91,480 121,974 152,467 182,961 213,454 243,948 275,448
350,000................. 107,230 142,974 178,717 214,461 250,204 285,948 322,698
400,000................. 122,980 163,974 204,967 245,961 286,954 327,948 369,948
450,000................. 138,730 184,974 231,217 277,461 323,704 369,948 417,198
500,000................. 154,480 205,974 257,467 308,961 360,454 411,948 464,448
550,000................. 170,230 226,974 283,717 340,461 397,204 453,948 511,698
600,000................. 185,980 247,974 309,967 371,961 433,954 495,948 558,948
<FN>
- -------
<F1> "Average Final Compensation" is the higher of: (a) the annual average of
the highest 36 consecutive calendar months' compensation for the
participant's last 120 months of service; or (b) the annual average of the
highest three consecutive calendar years' compensation for the
participant's last ten calendar Years of Service. Compensation used for
pension formula purposes is the type of compensation included as "Salary"
in the Summary Compensation Table.
</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, 1998 for the persons named in the Summary
Compensation Table are as follows: R. C. Jaudes, 43 years; D. H. Yaeger,
7 years; K. J. Neises, 14 years; G. T. McNeive, Jr., 12 years; and R. M. Lee,
20 years.
OTHER PLANS
An Executive Salary Protection Program for Executive Officers provides that
if a participating Executive Officer dies while an active employee of the
Company, his or her beneficiaries will receive his or her annual salary for one
year, and one-half of his or her annual salary for the next nine years or until
the Executive Officer would have been 65 years old, whichever period is longer.
When an Executive Officer dies after retiring from the Company, his or her
beneficiaries will receive an amount equal to twice his or her annual salary if
he or she dies prior to age 70, or one times his or her annual salary if he or
she dies after age 70.
The Company, as of January 25, 1990, adopted a Management Continuity
Protection Plan pursuant to which the Company has entered into Management
Continuity Protection Agreements (the "Agreements") with all of its Officers.
The Agreements provide that if the Officer's employment terminates for any
reason (other than death, disability or for actions involving moral turpitude)
within 54 months, in the case of Messrs. Jaudes and Yaeger, or 42 months,
in the case of all other Officers, after a change in control of the Company,
the Officer will receive a non-discounted lump sum payment. The lump sum
payment will be in an amount equal to the Officer's average annual
compensation for the five-year period preceding termination multiplied by
2.99, in the case of Messrs. Jaudes and Yaeger, or 2.00 for all other Officers.
If the Officer remains employed by the
9
<PAGE>
<PAGE>
Company for more than six months after a change in control, the above benefit
shall be reduced, in the case of Messrs. Jaudes and Yaeger, by one forty-
eighth, or, in the case of all other Officers, by one thirty-sixth for each
month beyond such six-month period. In no event, however, will the benefit
be greater than the product of the Officer's average monthly compensation
for the five-year period preceding termination and the number of months
remaining from such termination until the date the Officer will reach the
age of 65. The Agreements expire upon the earlier of (a) the effective date
of the Officer's termination, if prior to a change in control; or (b) 54
months, in the case of Messrs. Jaudes and Yaeger, or 42 months, in the case
of all other Officers, after a change in control. Under the Agreements,
a "change in control" occurs when any person becomes a beneficial owner,
directly or indirectly, of the Company's securities representing (a) more
than 50 percent of the voting power of the Company's outstanding securities
or (b) at least 30 percent but no more than 50 percent of such securities
and a majority of the outside members of the Company's Board of Directors
decides that a change in control has occurred.
Previously, the Company established a Deferred Income Plan for: (i)
non-employee Directors, and (ii) employee Directors, Officers and certain
other employees who are deemed by the Compensation Committee of the Board of
Directors to be key executives who contribute materially to the prosperity of
the Company. The plan permitted deferral through April 30, 1990 for each of
four consecutive years of up to 100% of fees and retainers for non-employee
Directors and up to 15% of salary (excluding incentive compensation) for other
participants. Such deferrals, along with applicable income growth factors (at
rates not to exceed the greater of (i) twelve percent per annum, and (ii) the
annual corporate bond rates specified in Moody's Investors Service plus four
percent per annum), form the basis for certain benefits payable to the
participant upon retirement; death or permanent and total disability before
retirement; or termination of a participant's status as a Director or employee
before age 55. The amount of such benefit depends on the type of triggering
event, the amount deferred by a participant, the ages at which deferrals are
made and the participant's age at the time of the triggering event. In the
event a participant, following a change in control of the Company, terminates
his or her status as a Director or employee for good reason, or is terminated
by the Company without cause, such participant is entitled to receive a lump
sum benefit in the amount equal to the greater of: (i) the present value of the
account balance under the Deferred Income Plan to which the participant would
be entitled if he or she had continued to make deferrals during the remainder
of the annual deferral period and if he or she had terminated his or her status
as a Director or employee after reaching normal retirement age (for this
purpose, age 70 for all Directors, and age 65 for all other participants); or
(ii) the amount of the participant's account balance. At the Board of
Directors' meeting on September 23, 1993, the Board approved a separate
Deferred Income Plan II. Deferred Income Plan II provides that the Board of
Directors may from time to time determine to open up the Deferred Income Plan
II to allow deferrals during one or more succeeding annual periods and to allow
new participants in that Deferred Income Plan. Participants were allowed to
make deferrals during the 1998 calendar year and will also be allowed to make
deferrals during the 1999 calendar year. During each deferral period a
non-employee Director participant may defer up to 100% of fees and retainers
and an employee participant may defer up to 15% of his or her annual salary
(excluding incentive compensation). In addition, under Deferred Income Plan II
the minimum applicable income growth factor for deferrals on and after October
1, 1993 shall not exceed the greater of: (i) nine percent per annum; and (ii)
the annual corporate bond rates specified in Moody's Investors Service plus
three percent per annum. The remainder of the terms of the Deferred Income Plan
II are similar to those of the original Deferred Income Plan discussed above.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
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, THE FOLLOWING COMPENSATION COMMITTEE REPORT REGARDING
EXECUTIVE COMPENSATION AND THE PERFORMANCE GRAPH ON PAGE 12 SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
COMPENSATION COMMITTEE REPORT REGARDING EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, composed of four
independent non-employee Directors, administers the Company's executive
compensation program. None of such members is or has been an Officer or
employee of the Company or any of its subsidiaries. After review and approval
by the Committee, all material issues relating to executive compensation are
submitted to the Board for consideration and approval.
10
<PAGE>
<PAGE>
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 industry facing increasing complexity, competition, and
change; to encourage and reward excellent performance; and to encourage
individual growth as a part of the Company's management development program.
Annual compensation for the Company's senior management consists of salary, and
for certain key Executives, a long-term Incentive Compensation Plan.
Salary levels of Company Executives are reviewed and may be adjusted
annually. Salaries are also increased to recognize promotions and assignment of
increased responsibilities to the Company. 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 the
utility industry generally relating to Executives of comparable responsibility;
and (6) corporate performance. Evaluation of corporate performance takes into
account the significant effects which 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 which utilizes no specific weighting or
formula of the aforementioned factors in determining Executives' base salaries.
Awards under the Company's 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 great 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 Compensation 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 stockholders. Share Units also have a deferred
compensation component based on changes in the Company's 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
which is directly linked with earnings per share achievement, a critical factor
in creating increased shareholder value. Determination of the number of Share
Units to award to a key Executive is a subjective process which 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 long-term financial and operational integrity of the Company.
The compensation of Executive Officers was considered and adjusted in
January 1998. 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 interests of shareholders.
In determining the total compensation package of the CEO for 1998, the
Compensation 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 subjective factors related to individual performance and
responsibility for the long-term strategic direction of the Company. Noted was
the CEO's leadership in: (1) the successful implementation and execution of the
Company's Gas Supply Incentive Plan; (2) the successful implementation of
programs to protect Laclede and its customers against unusually large gas price
increases; (3) the continual
11
<PAGE>
<PAGE>
formulation, adaptation, and implementation of various policies in
response to regulatory suggestions relating to further restructuring of
the utility industry; (4) the timely negotiation of a competitive labor
contract and continued efforts to foster a mutually beneficial labor
relationship; and (5) the continued development of emerging markets
for natural gas, including large-tonnage air-conditioning, gas dessicant
cooling and dehumidification systems, and compressed natural gas for
vehicular fleet use. In January 1998, the Board of Directors, after
considering the various factors and accomplishments described above,
granted the CEO an increase in base salary and also awarded him 5,500
additional Share Units under the Incentive Compensation Plan.
Compensation Committee
H. Edwin Trusheim, Chairman
Mary Ann Krey
William E. Nasser
Robert P. Stupp
PERFORMANCE GRAPH
The following Performance Graph compares the performance of the Company's
Common Stock to the Standard & Poor's 500 Stock Index and to the Standard &
Poor's Utilities Index for the Company's last five fiscal years. The graph
assumes that the value of the investment in the Company's Common Stock and each
index was $100 at September 30, 1993 and that all dividends were reinvested.
The information contained in this graph is not necessarily indicative of future
Company performance.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
LACLEDE GAS COMPANY, S&P 500, AND S&P UTILITIES
[GRAPH]
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
1993 1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Laclede $100.00 $ 89.71 $ 93.24 $115.81 $122.82 $122.99
- ----------------------------------------------------------------------------------------------------------------
S&P 500 $100.00 $103.69 $134.53 $161.88 $227.36 $247.92
- ----------------------------------------------------------------------------------------------------------------
S&P Utilities $100.00 $ 86.90 $110.87 $118.44 $135.46 $176.14
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<PAGE>
COMPENSATION OF DIRECTORS
Directors who were not employees of the Company received a monthly retainer
fee of $1,500 per month during fiscal year 1998. Also, 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 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 except for the Nominating Committee Chairman received an
additional $1,000 annual fee. All non-employee Directors are permitted to elect
to defer all or any part of their compensation under arrangements which apply
equally to all such non-employee Directors.
The Company has also established a retirement plan for each of its
non-employee Directors who serves at least five years as a Director or who dies
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 shall be 10% for each of
the first ten years of service of such Participant as a Director. The annual
payments to the retired Participant shall continue until such Participant's
death, but if such Participant shall die before receiving at least ten annual
payments, then such Participant's designated beneficiary shall, during such
beneficiary's lifetime, receive the remainder of the first ten annual payments
which the deceased Participant would have received.
In 1990, the Company established the Restricted Stock Plan for Non-Employee
Directors, the term of which was extended to January 26, 2000. Under this Plan,
a grant of 800 restricted shares will be made on the date a person first begins
serving as a non-employee Director. Each non-employee Director will receive an
additional grant of 200 nonvested and/or vested shares on the date of each
subsequent Annual Meeting of Stockholders for services rendered by such
non-employee Director during the preceding year. Although a non-employee
Director is entitled to vote and may receive the dividends on the restricted
shares, the restricted shares are forfeitable until vested pursuant to a
schedule based upon the non-employee Director's years of participation in, and,
in some cases, age at time of entering, the Restricted Stock Plan. Under a
Trust Agreement between the Company and UMB Bank, National Association, as
Trustee, shares granted pursuant to the Restricted Stock Plan are purchased on
the open market by the Trustee, and held in trust until vested in the
non-employee Director. In January 1998, Ms. Krey and Messrs. Beumer, Craig,
Givens, Holman and Nasser each received a grant of 200 nonvested shares; and
Mr. Stupp received a grant of 100 vested and 100 nonvested shares; and Mr.
Trusheim received a grant of 200 vested shares.
PROPOSAL 2. APPOINTMENT OF AUDITORS
The Board of Directors, upon recommendation of its Audit Committee,
recommends that the stockholders ratify the appointment of Deloitte & Touche
LLP Certified Public Accountants, to audit the accounts of the Company and its
subsidiaries for the fiscal year ending September 30, 1999. The vote of a
majority of the outstanding shares entitled to vote and represented in person
or by proxy will be necessary to effect the ratification described above. Thus,
in this context, the effect of an abstention will be the same as a negative
vote. Deloitte & Touche LLP is the successor to the firm that has acted as
auditors of the Company 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.
During fiscal year 1998, Deloitte & Touche LLP performed audit services
primarily related to the limited review of quarterly reports and the
examination of annual consolidated financial statements submitted to
stockholders and the Securities and Exchange Commission and the audit of the
various employee benefit plans of the Company.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
---
THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
13
<PAGE>
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
meeting other than those stated in this proxy statement. However, if other
matters related to the purpose of the meeting properly come before the meeting,
it is the intention of the persons named in the accompanying proxy to vote said
proxies on such other matters in accordance with their judgment.
SOLICITATION OF PROXIES
Proxies will be solicited by mail. They may also be solicited by Officers
and regular employees of the Company, personally or by telephone or telegraph,
but such persons will not be specially compensated for such services. The firm
of Morrow & Co., Inc. has been retained to assist with the solicitation of
proxies at a cost of approximately $5,000. It is contemplated that brokerage
houses, custodians, nominees and fiduciaries will be requested to forward the
soliciting material to the beneficial owners of stock held of record by such
persons, and will be reimbursed for expenses incurred therein. The entire cost
of solicitation will be borne by the Company.
LACLEDE GAS COMPANY
By MARY CAOLA KULLMAN, Secretary
St. Louis, Missouri
December 18, 1998
14
<PAGE>
<PAGE>
LACLEDE GAS COMPANY
720 OLIVE STREET
ST. LOUIS, MISSOURI 63101
Dear Stockholder,
You are cordially invited to join us at the Annual Meeting of
Stockholders of Laclede Gas Company, which will be held at the Marriott
Pavilion Hotel, One Broadway, St. Louis, Missouri, at 10:00 a.m.,
Central Standard Time, on Thursday, January 28, 1999. The purposes of
this meeting are set forth in the accompanying Notice of Annual Meeting
and Proxy Statement.
We urge you to read these proxy materials and the Annual Report,
and to participate in the meeting either in person or by proxy.
Whether or not you plan to attend the meeting in person, please
sign and return promptly the attached proxy card in the envelope provided
to assure that your shares will be represented.
Sincerely,
/s/ Robert C. Jaudes
Robert C. Jaudes
Chairman of the Board and Chief Executive
Officer
/s/ Douglas H. Yaeger
Douglas H. Yaeger
President and Chief Operating Officer
- -------------------------------------------------------------------------------
[LOGO] LACLEDE GAS COMPANY
720 OLIVE STREET, ST. LOUIS, MISSOURI 63101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mary C. Kullman, Robert C. Jaudes,
Gerald T. McNeive, Jr. and each of them, with or without any of the others,
attorneys and proxies, with full power of substitution, to vote all of the
shares of common stock in Laclede Gas Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of said corporation to be held
at Marriott's Pavilion Hotel on Thursday, January 28, 1999, at 10:00 a.m.
local time, and at any adjournment thereof: (1) as hereinafter specified upon
the proposals listed below and as more particularly described in the Company's
proxy statement, receipt of which is hereby acknowledged; and (2) in their
discretion upon such other matters as may properly come before the Annual
Meeting of Stockholders.
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD.
---
1. ELECTION OF DIRECTORS: Richard E. Beumer, Robert C. Jaudes and
Robert P. Stupp.
/ / FOR all nominees listed. / / FOR all nominees listed except __________
__________
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP as independent
auditors.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
<PAGE>
- -------------------------------------------------------------------------------
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder(s). If no
direction is made, the proxy will be voted FOR Proposals 1 and 2.
Dated _______________________, 19_____
______________________________________
______________________________________
IMPORTANT: Please date this proxy
and sign exactly as your name(s)
appears thereon. If stock is held
jointly, signature should include
both names. Executors, administrators,
trustees, guardians, and others
signing in a representative capacity
should so indicate.
PROXY MUST BE RETURNED BY JANUARY 28, 1999.
<PAGE>
<PAGE>
APPENDIX
The information in the Performance Graph on page 12 of the definitive
proxy statement of Laclede Gas Company is depicted in the table that
immediately follows the graph.
