AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 9, 2000
Registration No. 333-[ ]
Securities and Exchange Commission
Washington, D.C. 20549
_______________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
NUI Holding Company
(Exact Name of Registrant as Specified in Its Charter)
New Jersey 6719 Applied For
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification Number)
Incorporation or Classification Code
Organization) Number)
550 Route 202-206, Box 760,
Bedminster, New Jersey 07921-0760
(908) 781-0500
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
____________________
JAMES R. VAN HORN, ESQ.
General Counsel and Secretary
NUI Corporation
550 Route 202-206, Box 760,
Bedminster, New Jersey 07921-0760
(908) 781-0500
(Names, Addresses, Including Zip Codes, and Telephone Numbers,
Including Area Codes, of Agents for Service)
____________________
With copies to:
Reynold Nebel, Jr., Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
One Riverfront Plaza
Newark, New Jersey 07102-5490
(973) 643-8000
Approximate date of commencement of proposed sale of the securities to
the public: At the effective date of the share exchange, which shall
occur as soon as practicable after this Registration Statement is
declared effective and the satisfaction of all conditions precedent to
the share exchange.
If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. _
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. _
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. _
CALCULATION OF REGISTRATION FEE
Title of Each Amount to Proposed Proposed Amount of
Class of be Maximum Maximum Registration
Securities to be Registered Offering Aggregate Fee
Registered Price Offering
Price
Common Stock 12,918,121 $27 3/8 (2) $353,633,562 $93,359
$0.00 par value shares(1) (2) (2)(3)
(1) Based on the maximum number of shares that may be issued in
connection with the share exchange described in this registration
statement.
(2) The registration fee was calculated in accordance with Rule
457(f)(1) of the Securities Act of 1933, as amended, based on the
average of the high and low sale prices for shares of NUI
Corporation common stock on the New York Stock Exchange
consolidated transaction reporting system on February 7, 2000.
(3) A filing fee of $68,358.00 was paid by NUI Corporation to the
Securities and Exchange Commission on November 23, 1999, in
anticipation of filing preliminary proxy material of NUI
Corporation.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with section 8(a) of the securities act or
until this registration statement shall become effective on such date
as the Commission, acting pursuant to said section 8(a), may
determine.
The information in this proxy statement and prospectus is not complete
and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This proxy statement and prospectus is not
an offer to sell these securities and is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted.
[Letterhead of NUI Corporation]
Dear NUI Shareholder:
We are pleased to invite you to attend NUI Corporation's Annual
Meeting of Shareholders which will take place at 10:00 a.m. on
March 27, 2000 at the Hilton Cocoa Beach Oceanfront Hotel, 1550 North
Atlantic Avenue, Cocoa Beach, Florida. Your board of directors has
approved the reorganization of NUI under a holding company structure.
This is the structure that was in effect from the organization of NUI
in 1969 until 1994. We expect this new structure to provide us with
the organizational and financial flexibility needed to compete in a
deregulated market. This proxy statement/prospectus contains both a
proxy statement for the annual meeting of shareholders of NUI
Corporation and a prospectus relating to the issuance of up to
12,918,121 shares of NUI Holding Company common stock.
If you approve the reorganization, it will be implemented through
a share exchange, which is described in an exchange agreement that NUI
Corporation, and a new company, NUI Holding Company, plan to execute.
A copy of the exchange agreement is attached as Exhibit A to this
proxy statement. Under the reorganization, NUI Holding Co., which is
currently a subsidiary of NUI Corporation, would become the parent
company of NUI Corporation. NUI Holding Co. would then change its
name to NUI Corporation. Although NUI Holding Company's common stock
is not currently listed on any stock exchange, we expect that its
common stock will be listed on the New York Stock Exchange under the
symbol "NUI" following completion of the proposed reorganization.
When the exchange agreement is effective, each outstanding share
of NUI common stock together with each right to purchase preferred
stock that is attached to the NUI common stock, will automatically be
converted into one share of NUI Holding Co. common stock. Your NUI
Corporation common stock certificates will automatically become
certificates representing common stock in the new holding company.
Your proportionate interest will not change as a result of the holding
company transaction. If the holding company transaction takes place,
you need not surrender your existing stock certificates for stock
certificates of NUI Holding Co.
We are asking you to vote on the proposed exchange agreement and
related transactions at our annual meeting. We cannot complete the
holding company transaction unless a majority of the shareholders
present (either in person or by proxy) and voting at the meeting
approve the proposal, and your vote is essential to achieving a
successful result. We have unanimously approved the holding company
proposal, and urge you to VOTE YES for the proposed plan of exchange.
At the meeting, we will also consider the election of two
directors and the appointment of Arthur Andersen LLP as our
independent public accountants for the fiscal year ending September
30, 2000. The affirmative vote of a plurality of the votes cast at
the meeting is required to approve the election of directors, and the
affirmative vote of a majority of votes cast at the meeting is
required to ratify the appointment of accountants.
/S/ John Kean /S/ John Kean, Jr.
John Kean John Kean, Jr.
Chairman President and Chief Executive Officer
NUI and NUI Holding Co. have their principal executive offices at
550 Route 202-206, Box 760, Bedminster, New Jersey 07921-0760,
telephone number (908) 781-0500.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this proxy statement and
prospectus. Any representation to the contrary is a criminal offense.
Please see page 6 for a description of the risks of this
transaction.
This proxy statement/prospectus is dated February 11, 2000 and is
first being mailed to shareholders on or about February 11, 2000.
[inside front cover]
WHERE YOU CAN GET MORE INFORMATION
Current NUI files annual, quarterly and special reports, proxy
statements and other information with the SEC. Once the holding
company structure is implemented, new NUI will also make these
filings. You may read and copy any information current NUI has filed
or new NUI will file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Current NUI's and new NUI's SEC filings are also
available to the public from commercial document retrieval services at
the Internet web site maintained by the SEC at "http://www.sec.gov."
In addition, certain securities of current NUI are listed on the New
York Stock Exchange. You may read and copy any of these reports,
proxy statements and other information about current NUI at the office
of the New York Stock Exchange at 20 Broad Street, New York, New York
10005.
New NUI has filed a registration statement on Form S-4 with the
SEC under the Securities Act of 1933, to register the common stock
that new NUI will issue in order to complete the share exchange. As
SEC regulations allow, this proxy statement and prospectus does not
contain all of the information in the registration statement. For
further information, please refer to the registration statement.
After the share exchange is completed, we will list new NUI
common stock on the NYSE. We will also delist current NUI common
stock and withdraw current NUI common stock from registration under
Section 12 of the Exchange Act.
The SEC allows us to "incorporate by reference" information into
this proxy statement and prospectus, which means that we can disclose
important information to you by referring you to another document
filed separately with the SEC. The information incorporated by
reference is deemed to be part of this proxy statement and prospectus,
except for any information superseded by information in this proxy
statement and prospectus. We have incorporated by reference the
following documents:
1.Annual Report on Form 10-K, as amended, for the year ended
September 30, 1999.
2.Current Report on Form 8-K filed December 6, 1999.
3.Schedule 14A filed on February 2, 2000, containing additional
solicitation material.
We are also incorporating by reference any additional documents
that current NUI files with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act between the date of this Proxy
Statement and Prospectus and up until the implementation of the
exchange agreement.
We will supply you free of charge with any documents incorporated
by reference in this Proxy Statement and Prospectus. To request
copies, please write or telephone James R. Van Horn, Chief
Administrative Officer, General Counsel and Secretary, NUI
Corporation, 550 Route 202-206, Box 760, Bedminster, New Jersey 07921-
0760, telephone number (908) 781-0500. In order to ensure timely
delivery of the documents, please make your request no later than 5
days before making your investment decision, and at the latest by
March 17, 2000.
You should rely only on the information contained or incorporated
by reference in this proxy statement and prospectus. We have not
authorized any one to provide you with different information. This
document is dated February 11, 2000. Do not assume that the
information contained or incorporated by reference in this document is
accurate as of any date other than that date. Neither the mailing of
this document nor the issuance of new NUI common stock implies the
contrary.
[Letterhead of NUI Corporation]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on March 27, 2000, at 10:00 a.m.
February 11, 2000
TO THE SHAREHOLDERS OF NUI CORPORATION:
The annual meeting of Shareholders of NUI Corporation will be held at
10:00 a.m. on Monday, March 27, 2000 at the Hilton Cocoa Beach
Oceanfront Hotel, 1550 North Atlantic Avenue, Cocoa Beach, Florida ,
for the following purposes:
1.To consider and approve an agreement and plan of exchange pursuant
to which
A. NUI Corporation will reorganize its corporate structure and NUI
Holding Company, a New Jersey corporation formed by NUI
Corporation, will become the parent company of NUI Corporation;
and
B. All of NUI Corporation's outstanding common stock will be
exchanged automatically share-for-share for NUI Holding Company
common stock, and NUI Holding Company will become sole holder of
NUI Corporation's common stock; and
C. NUI Holding Company will be renamed NUI Corporation.
Under New Jersey law, shareholders do not have dissenters' appraisal
rights in connection with the agreement and plan of exchange described
in the accompanying proxy statement and prospectus.
2.To elect two directors for three-year terms expiring in 2003.
3.To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the fiscal year ending September 30, 2000.
4.To transact any other business properly brought before the meeting
or any adjournment of the meeting.
Only shareholders of record at the close of business on January 12,
2000 shall be entitled to notice of, and to vote at, annual meeting.
By Order of the Board of Directors
JAMES R. VAN HORN
Chief Administrative Officer,
General Counsel and Secretary
Your vote is important. Please complete, sign and date the enclosed
proxy card and return it promptly in the postage prepaid envelope
provided, whether or not you plan to attend the meeting. You may vote
in person at the meeting even if you previously sent in a proxy.
TABLE OF CONTENTS
Page
. WHERE YOU CAN GET MORE INFORMATION .................................
. QUESTIONS AND ANSWERS ABOUT THE HOLDING COMPANY FORMATION .........2
. SUMMARY OF PROXY STATEMENT AND PROSPECTUS .........................3
. RISK FACTORS ......................................................6
. FORWARD-LOOKING STATEMENTS ........................................7
. GENERAL INFORMATION ...............................................7
. VOTING RIGHTS .....................................................7
. PROXIES ...........................................................7
. PROPOSAL NO. 1: APPROVAL OF EXCHANGE AGREEMENT ...................8
The Holding Company Proposal...................................8
Reasons for the Restructuring..................................8
The Parties to the Exchange Agreement..........................9
The Holding Company's Business After the Restructuring........11
Exchange Agreement............................................12
Amendment or Termination of the Exchange Agreement............12
Conditions Precedent to the Exchange..........................13
Exchange Date.................................................13
No Dissenters' Rights.........................................13
Transfer of Unregulated Subsidiaries to new NUI...............14
Treatment of Current NUI Indebtedness.........................14
Dividend Policy...............................................14
Directors and Management of current NUI and new NUI...........15
Description of new NUI Capital Stock..........................15
Comparison of Shareholder Rights..............................16
Stock Exchange Listing........................................20
Transfer Agent and Registrar..................................20
Dividend Reinvestment and Common Stock Purchase Plan..........20
Common Stock Plans............................................20
Regulation....................................................20
Market Price of Current NUI Common Stock......................21
Exchange of Stock Certificates Not Required...................22
Accounting Treatment..........................................22
Material United States Federal Income Tax Considerations......22
Pro Forma Financial Information...............................23
Legal Opinion.................................................23
Experts.......................................................23
. PROPOSAL NO. 2: ELECTION OF DIRECTORS ...................... ....24
. MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS ................26
. COMPENSATION OF DIRECTORS ........................................27
. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION ......29
. TRANSACTIONS WITH MANAGEMENT .....................................29
. PROPOSAL NO. 3: RATIFICATION OF AUDITORS ........................29
. OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT .......................................................30
. EXECUTIVE OFFICERS ...............................................31
. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION ..........32
. PERFORMANCE GRAPH ................................................35
. ANNUAL COMPENSATION, LONG-TERM COMPENSATION AND ALL OTHER
COMPENSATION .....................................................37
. SUMMARY COMPENSATION TABLE .......................................37
. ANNUAL REPORT ....................................................41
. OTHER MATTERS ....................................................42
Solicitation of Proxies.............................................42
Shareholder Proposals...............................................42
Other Business......................................................42
EXHIBIT A Form of Agreement and Plan of Exchange
EXHIBIT B Form of Amended and Restated Certificate of Incorporation
of NUI Holding Company
EXHIBIT C Form of Amended and Restated Bylaws of NUI Holding Company
QUESTIONS AND ANSWERS ABOUT THE HOLDING COMPANY FORMATION
Q: What is being proposed?
A: We are proposing that you approve an exchange agreement and other
transactions that will enable us to restructure the corporate
organization of NUI and its subsidiaries. In the restructuring, NUI
will become a subsidiary of a holding company, NUI Holding Co., and
you will automatically become a holder of the NUI Holding Co.
shares. NUI Holding Co. would then change its name to NUI
Corporation, and NUI will change its name to NUI Utilities, Inc. In
this proxy statement and prospectus, we will refer to the existing
NUI Corporation as "current NUI" and to the holding company as "new
NUI."
Q: What do I need to do now?
A: Just mail your signed proxy card in the enclosed return envelope as
soon as possible, so that your shares can be voted at the March 27,
2000 annual meeting.
Q: Can I change my vote after I have mailed my signed proxy card?
A: Yes. You can change your vote at any time before your proxy is voted
at the annual meeting. You can do this in one of three ways.
First, you can send a written notice stating that you would like to
revoke your proxy. Second, you can complete and submit a new proxy
card. Third, you can attend the meeting and vote in person. Your
attendance alone will not, however, revoke your proxy. If you have
instructed a broker to vote your shares, you must follow directions
received from your broker to change those instructions.
Q: If my shares are held in my broker's name, will my broker vote my
shares for me?
A: Yes. Your broker will request instructions from you as to how you
want your shares to be voted. The broker will then vote the shares
according to your instructions. If you do not give a specific
instruction to your broker regarding how you want to vote, your
broker cannot vote on whether to approve the agreement and plan of
exchange, but may vote on the other proposals. Because shares that
your broker does not vote will not be counted as votes cast on any
of the three proposals, these "broker non-votes" will have no effect
on the outcome of the proposals.
Q: Should I send in my stock certificates?
A: No. You will NOT need to exchange your current NUI stock
certificates for new NUI stock certificates. Your current NUI stock
certificates will automatically represent certificates for the same
number of shares of new NUI common stock. When current NUI stock
certificates are presented for transfer to a third party we will
issue to such third party new NUI stock certificates in place of
current NUI stock certificates. After the share exchange, your
rights will be governed by new NUI's restated certificate of
incorporation and by-laws (the forms of which are included as
Exhibits B and C to this proxy statement and prospectus) rather than
those of current NUI.
Q: How will the holding company formation affect my dividends?
A: Instead of receiving your common stock dividends from current NUI
you will receive them from new NUI after the restructuring. We
expect that new NUI dividends immediately after the restructuring
will be no less than the level of current NUI dividends you are
receiving at the time of restructuring. Subsequently, new NUI
dividends will depend on the financial performance of new NUI's
subsidiaries, and on other factors, as the new NUI's board of
directors in its discretion decides. We expect that new NUI
dividends will be paid on approximately the same dates in each year
as current NUI dividends are paid now.
Q: When do you expect the exchange and holding company formation to be
complete?
A: If the exchange is approved by shareholders, it will become
effective as soon as practicable after receipt of all required
regulatory approvals, which we currently anticipate will occur
during the second quarter of calendar year 2000.
Q: What vote is required by shareholders to approve the agreement and
plan of exchange?
A: The vote of a majority of holders of current NUI common stock
present (either in person or by proxy) is required to approve the
agreement and plan of exchange.
Q: What if I have any additional questions?
A: If you have any questions, please call Linda Lennox, Director of
Corporate Communications and Investor Relations, NUI Corporation, at
(908) 719-4222.
SUMMARY OF PROXY STATEMENT AND PROSPECTUS
This summary highlights selected information about matters to
be voted on at the annual meeting, including the holding company
proposal and restructuring. It may not contain all of the information
that is important to you. You should carefully read this entire
document and the other documents to which we have referred you. See
"Where You Can Get More Information" on the inside front cover page.
Address and Nature of Business of current NUI and new NUI
The principal executive offices of current NUI and new NUI are
located at 550 Route 202-206, Box 760, Bedminster, New Jersey 07921-
0760, telephone number (908) 781-0500.
New NUI is a New Jersey corporation incorporated as a wholly
owned subsidiary by current NUI for purposes of implementing the
holding company structure. The principal executive offices of new NUI
are located at 550 Route 202-206, Box 760, Bedminster, New Jersey
07921-0760.
Current NUI is a multi-state energy sales, services and
distribution company incorporated in New Jersey in 1969. Current NUI
distributes natural gas in six eastern states through operating
utilities regulated by state public utility commissions. Current NUI
also provides retail gas sales, wholesale energy brokerage, customer
information systems, environmental project development, and
telecommunications products and services through its unregulated,
wholly owned subsidiaries. Current NUI also provides sales and
marketing services through a company in which it acquired a 49%
interest in May, 1997. To date, new NUI has not had any business
operations.
PROPOSAL NO. 1: APPROVAL OF AGREEMENT AND PLAN OF EXCHANGE
The current NUI board of directors has unanimously approved the
formation of a holding company, and recommends that you vote "FOR"
approval of the exchange agreement to form a holding company and
related transactions.
Proposed Share Exchange
We have approved the formation of a holding company structure,
which is commonly used throughout the utility industry. We intend to
form the holding company structure through the share exchange and we
need your approval to do that. The share exchange will be part of a
restructuring of current NUI's corporate organization. Your current
NUI common stock and preferred stock purchase rights will be converted
into new shares of new NUI common stock on a
share-for-share basis. Except as otherwise noted, when we refer to
current NUI common stock in this document, we are also referring to
the rights to purchase current NUI preferred stock that trade with the
current NUI common stock.
These charts show current NUI's existing structure and the
proposed structure for new NUI:
Current Structure
Current common shareholders
:
:
NUI (Current NUI)
(including all regulated utilities)
:
:
NUI Capital Corp.
:
:
Unregulated
Subsidiaries
Proposed Structure
Current common shareholders
:
:
:
NUI Holding Co. (New NUI)
(to be renamed NUI Corporation following the restructuring)
:
________________________________________________
: :
NUI Utilities, Inc. NUI
(including all regulated Capital
utilities) Corp.
:
Unregulated
Subsidiaries
As part of the restructuring, current NUI intends to transfer its
ownership interests in NUI Capital Corp. so that all of its
unregulated subsidiaries will become direct or indirect subsidiaries
of new NUI.
Reasons for the Restructuring
Recent federal and state regulatory changes are intended to
promote competition among natural gas and electricity suppliers. We
believe a holding company structure will help us to take full
advantage of these changes by helping us focus on and develop
diversification activities in areas related to our current core
business of energy sales and marketing and energy distribution. The
holding company structure will give us more flexibility to pursue
unregulated business and financing opportunities, but will also help
us protect our regulated utility business from the risks and costs
associated with unregulated activities. See "Reasons for the
Restructuring" on page 8.
Stock Exchange Listing
New NUI's common stock will be listed on the New York Stock
Exchange just as current NUI's common stock is listed, with the same
trading symbol "NUI".
Regulatory Approvals
In order to restructure, current NUI must obtain authorizations
from the New Jersey Board of Public Utilities ("NJBPU"), the New York
Public Service Commission, the Maryland Public Service Commission, the
North Carolina Utilities Commission, and the Pennsylvania Public
Utility Commission. As of the date of this proxy
statement/prospectus, current NUI has filed applications for approval
of the restructuring with all of these commissions except the New York
Public Service Commission. Current NUI must also file a notice with
the Florida Public Service Commission after the restructuring has
occurred. We will refer to these commissions as the State Public
Utility Commissions later in this document. See "Regulation" on pages
20-21.
Tax Consequences
Current NUI common stockholders who exchange their current NUI
common stock for new NUI common stock will not recognize gain or loss
for U.S. federal income tax purposes. For capital gains purposes,
your tax basis in and holding period of new NUI common stock will be
the same as for your current NUI common stock. See "Material United
States Federal Income Tax Considerations" on pages 21-22.
Stock Plans
Participation in current NUI's common stock plans will be
unaffected, except that all shares of current NUI common stock held
under current NUI's 1988 Stock Plan, 1996 Stock Option and Stock Award
Plan, 1996 Employee Stock Purchase Plan, and the 1996 Director Stock
Purchase Plan would be automatically exchanged for shares of new NUI
common stock. These common stock plans will continue with new NUI
common stock after the share exchange. See "Common Stock Plans" on
page 20.
Shareholder Vote
Only current NUI shareholders of record at the close of business
on the record date, January 12, 2000 will be entitled to receive
notice of the annual meeting to approve the exchange agreement and
related transactions. The affirmative vote of a majority of holders
of current NUI common stock present (either in person or by proxy) and
voting at the meeting will be required to approve the exchange
agreement and related transactions. See "Voting Rights" on page 7.
Directors and Management
The board of directors and current NUI's current principal
executive officers will serve as the directors and executive officers
of new NUI. Current NUI's directors and executive officers and their
affiliates own less than six percent (6%) of current NUI's voting
securities. After the restructuring, they will continue to own less
than six percent (6%) of new NUI's voting securities. See "Directors
and Management of new NUI and current NUI" on page 14.
Rights of Dissenting Shareholders
Under New Jersey law, current NUI shareholders do not have any
dissenters' appraisal rights if they vote against the exchange
agreement. See "No Dissenters' Rights" on page 13.
PROPOSAL NO. 2: ELECTION OF DIRECTORS
Two people have been nominated for election as directors of
current NUI. If elected, they will serve on the board of directors
for a three year term ending at the annual meeting in 2003. If the
agreement and plan of exchange is approved and implemented, these
directors will become, and be ratified as, directors of new NUI for
the same period. See "Directors" in the summary above.
PROPOSAL NO. 3: RATIFICATION OF AUDITORS
Current NUI's board of directors has selected Arthur Andersen LLP
as independent public accountants for current NUI and its subsidiaries
for the fiscal year ending September 30, 2000. If the agreement and
plan of exchange are approved, Arthur Andersen LLP will also become,
and be approved as, new NUI's independent auditors for the same
period.
RISK FACTORS
Dividends On New NUI Common Stock Will Depend On the Ability of Its
Subsidiaries to Pay Dividends
The source of new NUI's ability to pay dividends will be
dividends it receives from current NUI and its other subsidiaries.
The ability of all the NUI subsidiaries to pay dividends to new NUI
could be restricted as a result of their capital structure, decisions
of their boards, availability of funds, and any applicable legal
restrictions.
Because New NUI's Unregulated Businesses Will Be Separate From its
Utility Operations, the Risks Involved in These Unregulated Businesses
Will Be Borne by New NUI and Losses Will Not Be Recovered Through
Utility Rates
The unregulated subsidiaries that we intend to transfer to new
NUI during the restructuring may encounter competition and other
challenges that they have not experienced before. There can be no
assurance that the unregulated subsidiaries' businesses will be
successful or, if unsuccessful, that they will not have a direct or
indirect adverse effect on new NUI or on amounts available to
investors in new NUI or these subsidiaries. We will not be able to
recover any losses incurred by these businesses in the utility rates
of current NUI.
New NUI may obtain funds to finance its operations and to invest
in the unregulated subsidiaries from a number of sources, including
dividends new NUI receives from earnings of regulated utilities and
the unregulated subsidiaries. However, there can be no assurance that
the unregulated businesses will have any earnings, or pay any
dividends to new NUI. New NUI may also obtain funds to finance its
operations and to invest in the unregulated subsidiaries from
borrowings and issuance of additional debt or equity securities.
New NUI's Exemption Under The Public Utility Holding Company Act Could
Negatively Impact New NUI's Ability to Acquire Additional Utility
Assets or Securities and Could be Challenged by the Securities and
Exchange Commission.
We believe that after the restructuring new NUI will qualify for
an exemption from the Public Utility Holding Company Act of 1935,
except from provisions that regulate the acquisition of securities of
public utility companies. New NUI will claim an intrastate exemption
based on the fact that it and its utility subsidiaries conduct their
utility operations predominantly in the State of New Jersey.
Therefore, new NUI's ability to acquire additional utility assets or
securities outside New Jersey could be limited if it wants to maintain
this exemption from regulation as a holding company under the Holding
Company Act. In addition, while new NUI's claim of exemption will be
effective upon filing of the required exemption statement, the
Securities and Exchange Commission may subsequently revoke new NUI's
exemption if it believes that new NUI does not qualify for the
exemption, or if it finds that new NUI's exemption is "detrimental to
public interest or the interest of investors or consumers." You should
be aware that the Securities and Exchange Commission has not
affirmatively approved an intrastate exemption for a holding company with
a similar level of utility activity outside its state of incorporation.
New NUI is not,however, seeking any affirmative approval from the
Securities and Exchange Commission with respect to its exemption.
Moreover, the Securities and Exchange Commission has not attempted to
revoke similar intrastate exemption claims by other holding companies
with a similar amount of utility operations in states other than their
state of incorporation. There can be no assurances, however, that the
Securities and Exchange Commission will not exercise its revocation
authority in the future. For more details, see "Regulation" below.
New NUI Will be Able to Acquire New Non-Utility Subsidiaries With
Greater Ease But Less Regulatory Oversight
If new NUI acquires additional non-utility subsidiaries, it will
not need to obtain approval from state public utility commissions.
Although this will result in new NUI being able to react to market
opportunities faster than current NUI can today, these acquisitions
will no longer be subject to direct regulatory oversight.
FORWARD-LOOKING STATEMENTS
This proxy statement and prospectus contains some forward-looking
statements. These statements are based on our management's current
expectations and information currently available and we believe the
statements are reasonable and are made in good faith. However, the
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected
in the statements. Factors that may make the actual results differ
from anticipated results include, but are not limited to, economic
conditions; unforeseen competition; weather conditions; fluctuations
in the price of natural gas and other forms of energy; the outcome of
certain assumptions made in regard to Year 2000 issues; and other
uncertainties, all of which are difficult to predict and many of which
are beyond our control. For these reasons, you should not rely on
these forward-looking statements in making investment decisions.
Whenever we use the words "expect," "believe," "anticipate," "intend,"
or similar expressions, we intend to identify forward-looking
statements. We do not undertake any obligation to update publicly any
forward-looking statement, either as a result of new information,
future events or otherwise.
GENERAL INFORMATION
We are sending you this proxy statement and prospectus as part of
our solicitation of proxies for the annual meeting of NUI shareholders
to be held on March 27, 2000, at 10:00 a.m. at the Hilton Cocoa Beach
Oceanfront Hotel, 1550 North Atlantic Avenue, Cocoa Beach, Florida.
We are mailing this proxy statement and prospectus to you on or about
February 11, 2000.
VOTING RIGHTS
Only holders of record of shares of current NUI common stock, no
par value, at the close of business on the record date, January 12,
2000, are entitled to notice of and to vote at the meeting. Those
shareholders are entitled to one vote per share at the annual meeting.
The total number of shares entitled to vote at the meeting will be
12,818,121 shares of current NUI common stock.
A majority of the outstanding shares of current NUI common stock,
either in person or by proxy, must be present in order to form a
quorum at the annual meeting. To approve the exchange agreement and
related transactions, current NUI's bylaws and the New Jersey Business
Corporation Act require the affirmative vote of a majority of holders
of current NUI common stock present and voting at the meeting.
Current NUI's bylaws and the New Jersey Business Corporation Act
require the affirmative vote of a plurality of the votes cast at the
meeting to approve the election of directors, and the affirmative vote
of a majority of votes cast at the meeting to ratify the appointment
of Arthur Andersen LLP as independent accountants.
PROXIES
We are enclosing a form of proxy for use at the annual meeting.
You may revoke your proxy any time before its use by delivering a
written notice of revocation or a duly executed proxy bearing a later
date to the Secretary of NUI at the above address, or by attending the
annual meeting and voting in person. We will vote all shares
represented by valid proxies at the annual meeting as indicated on the
proxies. If you return a proxy to us without voting instructions, we
will vote the proxy FOR the exchange agreement and related
transactions, FOR the election of each of the nominees to the board of
directors and FOR the ratification of Arthur Andersen LLP as
independent public accountants for the fiscal year ending
September 30, 2000.
The NYSE and other securities exchanges regulate voting of shares
held by brokers or other nominees. In some cases, called
"discretionary matters," brokers or other nominees may vote, and
deliver proxies with respect to, those shares in their own discretion.
In other cases, called "nondiscretionary matters," brokers or other
nominees may deliver proxies with respect to particular shares, but
are not permitted to vote those shares without specific instructions
from the beneficial owner of the shares. These unvoted shares are
called "broker non-votes." The proposal to approve the exchange
agreement and related transactions, Proposal No. 1, is considered
"non-discretionary," and brokers or other nominees who have received
no instructions from their beneficial owners do not have the authority
to vote on the proposal. An abstention or broker non-vote will not be
counted as a vote cast for purposes of determining the outcome of
Proposal No. 1, and so will have no effect on the outcome of the vote
to form a holding company. Proposals Nos. 2 and 3 are considered
"discretionary" matters on which the brokers or nominees may vote in
their discretion. Any abstention will not be counted as a vote cast
for purposes of determining the outcome of Proposal Nos. 2 and 3, and
so will have no effect on the outcome of these proposals.
PROPOSAL NO. 1: APPROVAL OF EXCHANGE AGREEMENT
The Holding Company Proposal
The current NUI board and management believe that the holding
company restructuring described in this document and to be authorized
by the exchange agreement will be in your and current NUI's best
interests. As a result of the restructuring, current NUI will become
a separate subsidiary of the new parent holding company, new NUI. You
will become holders of new NUI common stock. As part of the
restructuring, current NUI contemplates transferring its ownership
interests in its unregulated subsidiaries so that they will become
direct or indirect subsidiaries of new NUI and not of current NUI.
Current NUI will change its name to NUI Utilities, Inc. and will
become a subsidiary of new NUI.
The board of directors has unanimously approved the exchange
agreement and related transactions, and urges you to vote "FOR"
Proposal No. 1.
Reasons for the Restructuring
General
The holding company structure is a well-established form of
organization for companies conducting multiple lines of business,
particularly entities engaging in both regulated and unregulated
activities. It is increasingly prevalent in the utility industry.
The holding company structure is intended to provide increased
organizational, managerial and financial flexibility in order to
better position current NUI to operate in the changing gas utility
industry. In its consideration of the holding company restructuring,
the board of directors of current NUI took into account potential
negative effects of the restructuring, including the fact that as a
result of the restructuring, new NUI will depend on dividends from its
subsidiaries to supply its cash flow, and that the subsidiaries'
ability to pay dividends could be restricted due to availability of
funds, capital structure, decisions of the subsidiaries' directors and
any applicable legal restrictions. In addition, new NUI could be
restricted in acquisitions of utility subsidiaries if it wishes to
maintain its exemption under the Public Utility Holding Company Act of
1935.
Regulatory Environment
In recent years, federal and state initiatives have promoted the
development of competition in the sale of natural gas and electricity.
In general, these initiatives have sought to unbundle the integrated
services that utilities have traditionally provided and to enable
customers to purchase these services directly from suppliers other
than their local utilities. To date, several states have enacted
"retail access" initiatives to allow consumers to purchase energy
services directly from a choice of suppliers.
One consequence of service unbundling and customer choice is the
creation of a new environment that mixes competition and regulation.
This mixture of competition and regulation creates new opportunities
for energy service providers. Energy companies now have increased
opportunities to grow unregulated business ventures which are related
to, but separate from, traditional utility businesses. For NUI, there
are a variety of business opportunities closely related to its current
core business: energy distribution and energy sales and marketing. By
focusing some of its diversification activities in areas related to
the purchase, transportation and delivery of energy services, new NUI
intends to take full advantage of the extensive experience it has
gained with the changes in the natural gas industry. Although we do
not have any specific plans or arrangements for acquisitions at
present, we believe that the holding company structure provides the
necessary flexibility to respond in a timely manner to these new
opportunities, while assuring appropriate protection for regulated
business stakeholders, including both customers and shareholders.
Flexibility for Utility and Competitive Businesses
Current NUI management believes that it is more desirable to
conduct unregulated activities through a holding company structure
than through current NUI's existing utility structure. The holding
company structure is a well-established form of organization for
companies conducting multiple lines of business, particularly entities
engaging in both regulated and unregulated activities. Many utility
companies have been organized as holding companies for many years, and
other utilities have recently changed their organization to a holding
company structure. Indeed, current NUI has had prior experience with
the holding company structure. From the late 1960s to the early
1990s, current NUI operated with a holding company structure until,
due to its business activities, that structure was precluded by
governmental policies. Because of changes in state and federal
policies, current NUI may once again efficiently operate under a
holding company structure.
There are a number of positive aspects to the holding company
structure. The holding company structure will enable new NUI to
engage in unregulated businesses with greater flexibility and without
the delays inherent in the regulatory process, thereby enabling new
NUI to pursue unregulated business opportunities in a timely manner.
The new corporate structure also will permit the use of financing
techniques that are more directly suited to the particular
requirements, characteristics and risks of unregulated operations
without affecting the capital structure or creditworthiness of the
regulated entities, and will increase financial flexibility by
allowing the design and implementation of capitalization ratios
appropriate for the capital and business requirements of each
subsidiary.
The holding company structure clearly separates the operations of
regulated and unregulated businesses. As a result, it provides a
better structure for regulators to assure that there is no cross-
subsidization of costs or transfer of business risk from unregulated
to regulated lines of business. A holding company structure also is
preferred by the investment community because such structure makes it
easier to analyze and value individual lines of business. Moreover,
the use of a holding company structure may protect the regulated
utilities from the risks associated with the unregulated business
activities. Overall, the holding company structure is a highly
desirable form of conducting regulated and unregulated businesses
within the same corporate group.
The Parties to the Exchange Agreement
Current NUI
Business
Current NUI is a multi-state energy sales, services and
distribution company incorporated in New Jersey in 1969. Current
NUI distributes natural gas in six eastern states through operating
utilities regulated by State Public Utility Commissions. Current
NUI also provides retail gas sales, wholesale energy brokerage,
customer information systems, environmental project development and
telecommunications products and services through its unregulated,
wholly owned subsidiaries. Current NUI also provides sales and
marketing services through a company in which it acquired a 49%
interest in May 1997.
Regulated Divisions
Current NUI includes six (6) regulated public utilities,
including New Jersey's Elizabethtown Gas, City Gas Company of
Florida, North Carolina Gas, Elkton Gas (Maryland), Valley Cities
Gas (Pennsylvania), and Waverly Gas (New York).
Unregulated Subsidiaries
Current NUI owns eight unregulated subsidiaries that are
wholly owned by its wholly owned Florida subsidiary, NUI Capital
Corp., as follows:
Current NUI
:
:
NUI Capital Corp. (FL)
:
______________________________________________________________
NUI Energy, Inc. Utility Business NUI Energy NUI Sales
(DE) Services, Inc. (NJ) Solutions, Inc. Management,
(DE) Inc. (DE)
NUI Energy Brokers NUI Environmental NUI International
Inc. (DE) Group, Inc. (NJ) International Telephone
Inc. (DE) Group, Inc.
(NJ)
- NUI Energy, Inc. (a Delaware corporation) - markets energy
services to retail commercial and industrial customers.
- NUI Energy Brokers, Inc. (a Delaware corporation) - provides
wholesale energy trading and related services to other utilities and
energy marketing companies.
- Utility Business Services, Inc. (a New Jersey corporation) -
provides billing and customer information systems and services to
investor-owned and municipal utilities and third-party energy
providers.
- NUI Environmental Group, Inc. (a New Jersey corporation) - is
developing a solution to the rapidly decreasing accessibility of the
New York/New Jersey harbor to international commercial shipping. NUI
Environmental expects to achieve this objective by constructing a
publicly-financed sediment processing facility.
- NUI Energy Solutions, Inc. (a Delaware corporation) - provides
energy management and consulting services to existing and new
customers.
- International Telephone Group, Inc. (a New Jersey corporation) _
provides telecommunications products and services, including local,
long distance, cellular, internet and computer services.
- NUI International, Inc. (a Delaware corporation) _ a company
recently formed to explore international business opportunities.
- NUI Sales Management, Inc. (a Delaware corporation) - holds
current NUI's interest in TIC Enterprises, LLC.
TIC Enterprises, LLC
In 1997, current NUI purchased a 49% interest in TIC
Enterprises, LLC, a Delaware limited liability company, through its
subsidiary, NUI Sales Management, Inc. TIC recruits, trains, and
manages sales professionals, and serves as a sales and marketing
representative for various businesses.
Properties
Current NUI owns approximately 6,100 miles of steel, cast
iron and plastic gas mains, and peak shaving plants. It owns real
property, including offices and service centers, in New Jersey,
Florida, North Carolina, Pennsylvania, New York and Maryland.
The Holding Company
New NUI is a New Jersey corporation incorporated as a wholly
owned subsidiary of current NUI in order to implement the holding
company structure. New NUI's principal executive offices are located
at 550 Route 202-206, Box 760, Bedminster, New Jersey 07921-0760. To
date, new NUI has not had any business operations.
The Holding Company's Business After the Restructuring
After the restructuring, new NUI will own all the
outstanding current NUI common stock and the stock of other
subsidiaries that will engage in competitive businesses. The
investment performance of new NUI common stock will depend on the
results of operations of current NUI and new NUI's other subsidiaries.
New NUI will finance its operations and investments in its
subsidiaries from dividends and other distributions it receives from
current NUI and its other subsidiaries, borrowings, and the sale of
equity or debt securities. New NUI may also use this income for other
transactions, including possible acquisitions of other companies and
repurchases of new NUI common stock. There can be no assurance that
the subsidiaries of new NUI other than current NUI will have earnings
or pay any dividends to new NUI
We do not expect that new NUI will be directly regulated by
any State Public Utility Commission or the Federal Energy Regulatory
Commission immediately after the restructuring, except to the extent
that the rules or orders of these agencies impose restrictions on new
NUI's relationships with current NUI or current NUI's relationships
with new NUI's other subsidiaries. New NUI will be a "public utility
holding company" under the Public Utility Holding Company Act of 1935.
It is currently expected that, following the restructuring, new NUI
will claim an exemption under the Holding Company Act. See
"Regulation" below.
Current NUI
The exchange agreement provides that, subject to certain
conditions, including receipt of NUI shareholder approval, current NUI
will become a subsidiary of new NUI through the share exchange. In
the share exchange, current NUI common stock will be exchanged for new
NUI common stock on a share-for-share basis. A copy of the exchange
agreement is incorporated by reference in and is attached to this
proxy statement and prospectus as Exhibit A. We expect current NUI to
continue to be regulated as a public utility after the restructuring.
Holding Company Subsidiaries - Transferred from current NUI
In order to accomplish the proposed restructuring, current
NUI will request authorization from the applicable State Public
Utility Commissions to transfer to new NUI its ownership interest in
its unregulated subsidiary, NUI Capital Corp., along with NUI Capital
Corp.'s unregulated subsidiaries, and its interest in TIC Enterprises,
LLC. Therefore, current NUI will not directly or indirectly own the
outstanding stock of any unregulated subsidiary after the
restructuring, but new NUI, in which you will be a shareholder, if
this reorganization is approved, will own all of these businesses. We
expect that the unregulated subsidiaries, together with all the
current NUI common stock and any other transferred assets, will
constitute all or substantially all of new NUI's business and
properties.
After the restructuring, the unregulated subsidiaries will
conduct non-utility businesses in the NUI system as subsidiaries of
new NUI rather than current NUI. If the proposed restructuring is
completed, we intend new NUI rather than current NUI to make advances
to and other investments in non-utility businesses. We also expect
current NUI to use the proceeds of its financings entirely in the
conduct of its gas utility business.
Other Holding Company Subsidiaries
After the exchange agreement is implemented, we expect that
new NUI or its unregulated subsidiaries will hold or operate any newly
acquired or commenced businesses that are not subject to regulation by
any State Public Utility Commissions.
Exchange Agreement
The exchange agreement is incorporated by reference to this
proxy statement and prospectus and is attached as Exhibit A. After
the conditions to effectiveness of the exchange agreement are
satisfied, the share exchange will become effective. Under the
exchange agreement, the following events will occur when the share
exchange is effective:
1. When we file the certificate of exchange with the New Jersey
Secretary of State, or on a later date specified in the
certificate of exchange, each outstanding share of current
NUI common stock will be exchanged automatically by
operation of law on a share-for-share basis for new NUI
common stock. You will automatically become holders of new
NUI common stock, holding the same number of shares, and
will no longer own current NUI common stock.
2. Each share of new NUI common stock issued to current NUI
when new NUI was formed will be canceled.
As a result of the share exchange, current NUI will become a
subsidiary of new NUI, with new NUI owning all shares of current NUI
common stock that were outstanding.
Amendment or Termination of the Exchange Agreement
Current NUI and new NUI may abandon the exchange agreement
by mutual consent of their respective boards of directors. Current
NUI and new NUI may also amend, modify or supplement the terms of the
exchange agreement in any way by written agreement at any time before
or after you approve the restructuring. However, no amendment,
modification or supplement agreed to after your approval may change
any of the principal terms of the exchange agreement. If we make any
change to the exchange agreement that we consider fundamental, we will
file a post-effective amendment to our registration statement, and
distribute the amendment to you.
The exchange agreement also provides that we may terminate
it, and abandon the share exchange at any time before or after you
have approved it, if we determine that completing the restructuring
would for any reason be inadvisable or not in the best interests of
current NUI or its shareholders. None of the parties to the exchange
agreement, or any officer or director, will have any liability to any
person, including any shareholder of current NUI, if the exchange
agreement is terminated or abandoned.
We may also terminate and abandon the restructuring if
current NUI has not received, within an acceptable period of time
after shareholder approval, the approval of the State Public Utility
Commissions as described above in the Summary, on terms that are
satisfactory to current NUI. We are unable to predict under what
other circumstances, if any, the restructuring might be terminated and
abandoned.
Conditions Precedent to the Exchange
The exchange agreement provides that in order to complete
the share exchange:
- current NUI's shareholders must approve its principal terms.
- current NUI, as the sole shareholder of new NUI, must approve its
principal terms.
- the NYSE must approve listing of new NUI common stock when it
receives official notice that new NUI has issued its common stock.
- current NUI must have received all approvals of, and
authorizations by, any governmental or public authorities that are
necessary or that we think are advisable (these approvals and
authorizations must be in full force and effect, not revoked, and
sufficient to authorize the share exchange at the time of the share
exchange).
- current NUI must have received a ruling from the Internal Revenue
Service or an opinion of tax counsel regarding some of the tax
consequences of the share exchange.
If current NUI shareholders approve the share exchange,
current NUI will then vote new NUI's shares in favor of the share
exchange. The proposed share exchange and restructuring will not
require approval of any state utility regulatory commission except the
State Public Utility Commissions.
Exchange Date
The exchange agreement provides that the exchange date will
be the date when we file the certificate of exchange with the
Secretary of State of the State of New Jersey, or on another later
date not more than 90 days after that filing, if the certificate of
exchange so specifies. We anticipate that the exchange date and the
other steps in the restructuring plan will occur as soon as practical
after we have received the required approvals listed above.
No Dissenters' Rights
Section 14A:11-1(1) of the New Jersey Business Corporation
Act provides that shareholders of a New Jersey corporation who dissent
from a merger, consolidation, sale of all or substantially all of the
corporation's assets or certain other corporation transactions are
generally entitled to appraisal rights. There is no statutory right
of appraisal, however, where the stock of the New Jersey corporation
is:
- listed on a national securities exchange, or
- is held of record by not less than 1,000 holders, or
- where the consideration to be received for the merger,
consolidation or sale consists of cash or securities or other
obligations which, after the transaction, will be listed on a national
securities exchange or held of record by not less than 1,000 holders.
You will not have dissenters' rights in connection with the
exchange agreement because all three conditions are met.
Transfer of Unregulated Subsidiaries to new NUI
As part of the restructuring, we contemplate transferring
directly or indirectly to new NUI all of current NUI's interest in its
unregulated subsidiaries or other non-utility companies. (See "The
Holding Company's Business after the Restructuring-Holding Company
Subsidiaries-Transferred from current NUI" above.) These transfers
may be conditioned upon obtaining consents and other approvals from
regulators. We cannot predict the specific terms and conditions of
those consents and approvals. It is possible that, based on future
events, we may determine that it is not in the best interests of
current NUI or its shareholders to transfer some or all of these
interests to new NUI. Provided the necessary regulatory and other
approvals are obtained, we may decide to proceed with the rest of the
restructuring plan without transferring some or all of these interests
to new NUI.
Treatment of Current NUI Indebtedness
The share exchange and restructuring will not affect the
terms of current NUI's indebtedness outstanding immediately before the
share exchange. New NUI will not assume or guarantee current NUI's
indebtedness through the share exchange. We decided to have current
NUI's indebtedness stay with current NUI because we did not want to
alter, or potentially alter, the nature of the investment represented
by the indebtedness. We wanted it to remain a debt obligation of a
regulated utility.
When we separate current NUI from the assets and any
earnings of some of its unregulated interests, current NUI's assets
and earnings will be decreased to the extent of contributions from its
unregulated subsidiaries. As a result, holders of current NUI's debt
securities would be disadvantaged because the assets and any earnings
of these unregulated subsidiaries will not be available to pay
interest or principal on the debt securities. As noted above, current
NUI's utility operations are now the largest part of current NUI's
consolidated assets and earnings. We expect this to be the case for
the foreseeable future. For this reason, although we are unable to
predict the ultimate outcome of regulatory and other industry changes,
we believe that the restructuring will not materially affect holders
of current NUI debt securities or the respective investment ratings of
these securities.
Dividend Policy
We anticipate that the quarterly dividends on new NUI common
stock will begin at a rate no less than that being paid on current NUI
common stock at the time of the share exchange. We expect that the
dividends will be paid on approximately the same dates each year as
dividends on current NUI common stock have been paid. The rate and
timing of dividends of new NUI in the future will depend mainly on:
- the earnings of new NUI's subsidiaries, principally current NUI
- the dividend restrictions of new NUI and its subsidiaries,
including current NUI
- other financial considerations
- other factors affecting new NUI, as the board of directors of new
NUI in its discretion decides.
The quarterly dividend that we most recently declared was
$0.245 per share of current NUI common stock payable on December 15,
1999, to holders of record on December 1, 1999.
Initially, we expect that, following the share exchange, new
NUI will derive the funds it requires to function as a holding company
and to enable it to pay dividends on new NUI common stock from
dividends current NUI pays on current NUI common stock. We anticipate
that the cash dividends that current NUI pays to new NUI along with
any amounts that other subsidiaries of new NUI provide will be
sufficient to enable new NUI to pay cash dividends on new NUI common
stock and to meet operating and other expenses. However, the current
NUI board will continue to establish current NUI dividend policy, and
the amount of dividends that current NUI declares and pays will be
subject to the availability of earnings and other funds, and the needs
of the utility business, as the current NUI board determines. In
addition, current NUI's ability to pay current NUI common stock
dividends to new NUI will be subject to any restrictions in future
loan and other agreements to which current NUI may become a party, to
other factors affecting current NUI, and to any applicable provisions
of New Jersey law.
Directors and Management of current NUI and new NUI
The directors of current NUI will become the directors of
new NUI when the share exchange has been completed. If you elect the
nominees proposed for election as directors in Proposal No. 2, the
board of directors of the new NUI will initially be as follows:
John Kean, Jr. James J. Forese
John Kean Bernard S. Lee
J. Russell Hawkins R. Van Whisnand
Vera King Farris John Winthrop
When you approve the exchange agreement, you will be
considered to have ratified the election of these people as directors
of new NUI. After the share exchange, the composition of the board of
directors of new NUI may change over time.
The following people currently hold the offices listed below
with current NUI, and are expected, at least initially, to hold the
same offices with new NUI:
NAME OFFICE
John Kean, Jr. President and Chief Executive Officer
A. Mark Senior Vice President, Chief Operating
Abramovic Officer and Chief Financial Officer
Robert F. Vice President - Corporate Development and
Lurie Treasurer
James R. Chief Administrative Officer, General
Van Horn Counsel and Secretary
Michael J. Vice President - New Ventures
Behan
Information about the names, ages, positions and business
experience of the executive officers of current NUI and information
about executive compensation, security ownership of certain beneficial
owners and management and certain relationships and related
transactions is included under "Proposal No. 2: Election of
Directors" below.
We expect that new NUI and current NUI, from time to time,
will provide each other with services and will make available to each
other the use of facilities and equipment. To the extent required by
applicable law, payment for the agreements and arrangements between
new NUI and current NUI for the provision of services and the use of
facilities and equipment will be subject to review and approval by the
relevant State Public Utility Commissions. (See "Regulation" below.)
Description of new NUI Capital Stock
You should read the following description of new NUI's
capital stock in conjunction with the Form of Amended and Restated
Certificate of Incorporation of new NUI (the "new NUI Charter")
attached as Exhibit B to this proxy statement and prospectus. The new
NUI Charter contains specific legal provisions governing new NUI's
capital stock.
General
New NUI's capital stock, as of the exchange date, will
consist of 30 million shares of common stock, and 5 million shares of
preferred stock, no par value. The terms of new NUI's common stock
will be identical to that of current NUI.
New NUI Preferred Stock
Although the new NUI Charter authorizes the issuance of
preferred stock, new NUI has no present plans to issue or register any
preferred stock. However, new NUI plans to adopt a rights plan and
authorize a series of preferred stock in connection with the plan
shortly after the holding company reorganization is completed. There
will not be any new NUI preferred stock outstanding at the exchange
date. The new NUI Charter authorizes the new NUI board of directors
to issue any authorized preferred stock in series, and to establish
the relative rights and preferences of each series. Those rights and
preferences include:
. the number of shares in the series
. the dividend rate, form and priority
. voting rights, if any
. conversion rights, if any
. redemption rights, if any
. sinking fund provisions, if any
. liquidation rights
. any other rights and preferences.
Because new NUI's board has substantial discretion in
setting the terms of any preferred stock issued by new NUI, such stock
may act as a defensive measure.
New NUI Common Stock
. Voting _ Each holder of new NUI common stock will be
entitled to one vote for each share of new NUI common
stock in the shareholder's name for all matters
requiring a shareholder vote.
. Dividends _ New NUI common stock is entitled to
dividends when, as and if declared by the NUI's board
of directors. However, this right to dividends may be
inferior to the dividend rights of the new NUI
preferred stock, if any becomes outstanding.
. Liquidation Rights - If new NUI is liquidated, any
remaining net assets of new NUI are distributable pro
rata to New NUI common stockholders. However, these
liquidation rights may be inferior to liquidation
rights of the NUI preferred stock, if any becomes
outstanding.
. Limitations _ New NUI common stock will be subject
to all the powers, rights, privileges, preferences and
priorities of any new NUI preferred stock.
Comparison of Shareholder Rights
In the share exchange, current NUI common stockholders will
receive shares of new NUI common stock. Both new NUI and current NUI
are corporations formed under New Jersey law, and New Jersey law will
govern the rights of shareholders of both corporations. Following is
a summary of the material provisions of the new NUI Charter and the
new NUI bylaws compared with the Amended and Restated Certificate of
Incorporation of the current NUI ("current NUI Charter") and the
current NUI bylaws.
You should read this summary in the context of and in conjunction
with (1) the forms of the new NUI Charter and new NUI Amended and
Restated Bylaws, attached to this proxy statement and prospectus as
Exhibits B and C, respectively, and (2) the laws of the state of New
Jersey. The new NUI Charter and bylaws and New Jersey law contain
specific legal provisions governing shareholder rights.
Except as noted below, the new NUI Charter and bylaws are
substantially the same as the current NUI Charter and bylaws, except
that they do not include certain provisions that are unnecessary.
Change of Control Provisions
The New Jersey Business Corporation Act provides that in
determining whether a proposal or offer to acquire a corporation is in
the best interest of the corporation, a board of directors may, in
addition to considering the effects of any action on shareholders,
consider any of the following:
. the effects of the proposed action on the corporation's
employees, suppliers, creditors and customers;
. the effects on the community in which the corporation
operates; and
. the longer-term as well as short-term interests of the
corporation and its shareholders, including the possibility
that those interests may be served best by the continued
independence of the corporation.
The statute also provides that if, based on those factors, a
board determines that the offer is not in the best interest of the
corporation, it may reject the offer.
The New Jersey Stockholders Protection Act prohibits some
specified business combinations between an "interested shareholder"
and a "resident domestic corporation." An "interested shareholder" is
one that is directly or indirectly a beneficial owner of 10% or more
of the voting power of the outstanding voting stock of a resident
domestic corporation. The prohibitions are as follows:
. specified business combinations are prohibited for five years
after the date the interested shareholder acquired its stock,
unless the business combination was approved by the resident
domestic corporation's board of directors before the
interested shareholder's stock acquisition date; and
. after the five-year period, the prohibition on certain
business combinations continues unless:
1. the combination is approved by the affirmative
vote of two-thirds of the voting stock not
beneficially owned by the interested shareholder;
2. the combination is approved by the board before
the interested shareholder's stock
acquisition date; or
3. the corporation's common stockholders receive
payment for their shares that meets
standards prescribed in the statute.
In addition, New Jersey law contains provisions limiting the
personal liability of directors in certain situations.
The current NUI Charter contains the following mechanisms that
may inhibit a change of control:
1. The affirmative vote of holders of at least 75% of the
then-outstanding shares of voting stock, voting as a single class, is
required (a) to remove directors for cause and (b) if shareholders
wish to fill a vacancy on the board of directors by voting at a
special meeting.
2. The current NUI board of directors is divided into
three classes, with the term of only one class expiring each year.
3. Directors may only be removed for cause.
4. Shareholders can only take action at an annual or
special meeting, or by unanimous written consent of the
shareholders.
5. Only a majority of the board of directors (in the
absence of a court order) can call special meetings.
6. A 75% affirmative vote of the shareholders is required
to alter, amend or repeal certain provisions of the
current NUI Charter.
7. Current NUI is authorized to issue 5,000,000 shares of
preferred stock. The current NUI board of directors is
also authorized to provide for the issuance of
preferred stock in series and to establish the rights
and preferences of each series. On December 1, 1995
the current NUI board of directors authorized a series
of 100,000 shares of preferred stock designated as
"Series A Junior Participating Preferred Stock." The
current NUI board of directors has reserved these
shares for possible future issuance in connection with
current NUI's shareholder rights plan, which is
described below. Because current NUI's board has
substantial discretion in setting the terms of any
preferred stock issued by current NUI, such stock may
act as a defensive measure.
The current NUI bylaws contain the following provisions that may
inhibit a change of control:
1. Shareholders must provide notice of any proposed
nominations for election to the current NUI board of
directors and any business to be brought before a
shareholders' meeting, in each case between 90-120 days
before the meeting.
2. Some provisions of the current NUI bylaws may only
be altered or amended by the board of directors or a
75% affirmative vote of the shareholders.
The change of control provisions in the new NUI Charter and
bylaws are substantively identical to the provisions of the current
NUI's charter and bylaws described above. The operation of those
provisions could have the effect of discouraging or delaying change-
of-control transactions.
Rights Plan
In November 1995, current NUI's board of directors adopted a
shareholder rights plan under which shareholders of NUI common stock
were issued as a dividend one "right" to buy one one-hundredth of a
share of Series A Junior Participating Preferred Stock at a purchase
price of $50 for each share of current NUI common stock held. The
rights initially attached to the shares of current NUI common stock
and can be exercised or transferred only if a person or group, with
certain exceptions, acquires, or commences a tender offer to acquire,
beneficial ownership of 15% or more of current NUI common stock. The
non-acquiring shareholders may use each right, except any rights held
by the acquirer, to purchase, at the right's exercise price, shares of
current NUI common stock with a market value equivalent to twice the
right's exercise price. When shareholders exercise their rights in
this way, they will substantially reduce the acquirer's ownership
percentage.
Current NUI may redeem the rights at $0.001 per right at any time
before any of the above events take place. All rights expire on
November 27, 2005. The shareholder rights plan will be amended so that
it will not be triggered by the share exchange. Immediately after the
share exchange is effective we anticipate that new NUI will enter into
a rights agreement similar to the one described above.
Number of Directors
New Jersey law allows for a board of one or more members. The
current NUI Charter and the new NUI Charter both provide for between
eight and twenty-five directors, subject to possible variance if the
board grants some specified rights to preferred stockholders.
Voting Rights
New Jersey law gives each share one vote at a shareholder's
meeting for each matter that the shareholder may vote on, unless the
charter provides otherwise. Both the current NUI Charter and the new
NUI Charter give each share one vote. Under New Jersey law,
shareholders of a New Jersey corporation do not have cumulative voting
rights in the election of directors unless the certificate of
incorporation so provides. Neither the current NUI Charter nor the
new NUI Charter provides for cumulative voting.
Removal of Directors.
Both the current NUI Charter and the new NUI Charter allow for
removal of directors only for cause by the shareholders, as provided
above. Vacancies on the board may only be filled by the majority of
directors then holding office, or, if New Jersey law expressly allows,
by a 75% vote of the shareholders at a special meeting as described
above.
Shareholder Proposals, Nomination of Directors by Shareholders.
Both the current NUI bylaws and the new NUI bylaws allow a
shareholder to propose business or nominate directors provided the
shareholder gives written notice of the proposal not less than 90 and
not more than 120 days before the meeting.
Indemnification and Liability Provisions.
Under New Jersey law, a New Jersey corporation may include in its
certificate of incorporation a provision that would eliminate or limit
directors' or officers' liability to the corporation, or to its
shareholders, for monetary damage for breaches of their fiduciary duty
of care. However, there are some limitations to this elimination of
liability. A director or officer cannot be relieved from liability or
otherwise indemnified for any breach of duty based upon an act or
omission
. in breach of such person's duty of loyalty to the entity or
its shareholders;
. not in good faith or involving a knowing violation of law; or
. resulting in receipt by such person of an improper personal
benefit.
Both the current NUI Charter and the new NUI Charter contain
provisions that limit a director's or officer's liability to the full
extent permitted by New Jersey law.
Amendment of Articles and Bylaws.
Under New Jersey law, unless a greater vote is specified in the
certificate of incorporation, the affirmative vote of a majority of
the votes cast by shareholders of the corporation entitled to vote is
required for the following:
. any amendment to a New Jersey corporation's certificate of
incorporation
. a voluntary dissolution of the corporation
. a sale or other disposition of all or substantially all of a
corporation's assets other than in the ordinary course of
business
a merger or consolidation of the corporation with another
corporation.
Both current NUI Charter and new NUI Charter contain provisions
specifying that the affirmative vote of holders of at least 75% of all
the then outstanding shares of voting stock, voting on a single class,
is required to alter certain provisions of the charter or of the
bylaws having the same effect.
Stock Exchange Listing
We expect new NUI to apply to list its common stock on the New
York Stock Exchange. We expect that the listing will occur on, or
soon after, the effective date of the share exchange. When new NUI
common stock is listed, current NUI common stock will be delisted from
trading on the New York Stock Exchange (since all outstanding shares
will be held by new NUI). However, if new NUI fails to obtain the New
York Stock Exchange listing, we might elect not to consummate the
restructuring (including the share exchange).
Transfer Agent and Registrar
First Chicago Trust Company, a Division of EquiServe, the
Transfer Agent and Registrar for current NUI common stock, will serve
in the same capacities for new NUI common stock.
Dividend Reinvestment and Common Stock Purchase Plan
On the exchange date, new NUI will assume current NUI's existing
Dividend Reinvestment and Common Stock Purchase Plan, NUI Direct, as
in effect immediately before the share exchange. Shares of current
NUI common stock held in the plan will automatically become the same
number of shares of new NUI common stock. NUI Direct may purchase
shares of new NUI common stock on and after the exchange date.
Common Stock Plans
On the exchange date, shares of current NUI common stock held
under current NUI's 1988 Stock Plan, 1996 Stock Option and Stock Award
Plan, 1996 Employee Stock Purchase Plan, and 1996 Director Stock
Purchase Plan will automatically become the same number of shares of
new NUI common stock, and shares of new NUI common stock will be
granted and delivered under these plans on and after the exchange
date.
By approving the exchange agreement and related transactions, you
will be considered to have approved the actions that we will take with
respect to NUI Direct, the 1988 Stock Plan, 1996 Stock Option and
Stock Award Plan, 1996 Employee Stock Purchase Plan, and the 1996
Director Stock Purchase Plan, including any amendments to those plans
necessary to accomplish these actions.
Regulation
Current NUI is subject to regulation with respect to rates,
service, accounting and the issuance of securities among other
matters. Current NUI is subject to regulation as an operating utility
by the State Public Utility Commissions of the states in which it
operates. Current NUI is also subject to regulation by the United
States Department of Transportation under the Natural Gas Pipeline
Safety Act of 1968, with respect to the design, installation, testing,
construction and maintenance of pipeline facilities. Natural gas
purchases, transportation service and storage service that current NUI
receives by interstate pipeline companies are subject to regulation by
the Federal Energy Regulatory Commission. In addition, current NUI is
subject to federal and state legislation with respect to water, air
quality, solid waste disposal and employee health and safety matters,
and to environmental regulation by the United States Environmental
Protection Agency, the New Jersey Department of Environmental
Protection and other federal and state agencies. Current NUI will
continue to be subject to regulation as a public utility after the
exchange date.
New NUI is not a public utility. Under existing law, new NUI
will not, simply because of the share exchange and restructuring,
become a public utility in any jurisdiction where current NUI is
subject to regulation. However, after the share exchange and
restructuring, some transactions between various companies within the
NUI organization will be subject to the jurisdiction of the State
Public Utility Commissions under provisions governing transactions
between public utilities and affiliated interests, and reorganizations
of public utilities.
After the share exchange and restructuring are completed, new
NUI will promptly file a statement under the Public Utility Holding
Company Act of 1935, claiming an exemption as an intrastate holding
company from all provisions of the Holding Company Act, except those
provisions that regulate the acquisition of securities of public
utility companies. In order to qualify for this exemption, new NUI
and its material utility subsidiaries must be incorporated in the same
state, be intrastate in character and conduct their utility operations
predominantly in that same state. We believe that new NUI will meet
these criteria for the intrastate exemption because both new NUI and
current NUI, its only material utility subsidiary, will be
incorporated in New Jersey, be intrastate in character and will
conduct their utility operations predominantly in the state of New
Jersey, despite having small gas utility operations in five states
other than New Jersey. We base our belief that new NUI will qualify
for the exemption both on the intrastate nature of the new NUI holding
company system's utility operations, and on the fact that, despite
having a procedure for revoking claimed exemptions available under the
Holding Company Act, the Securities and Exchange Commission has not
attempted to revoke intrastate exemption claims by other holding
companies with a similar level of utility operations in states other
than their state of incorporation.
New NUI's intrastate exemption under the Holding Company Act will
be effective upon the filing of the exemption statement. New NUI must
file an updated exemption statement annually with the SEC in order to
retain this exemption. The SEC may revoke the exemption from the
Holding Company Act upon a finding that the exemption's requirements
are not met or that the exemption is "detrimental to the public
interest or the interest of investors or consumers." The criteria for
determining whether a company qualifies for the exemption or whether
the exemption from the Holding Company Act may be detrimental to the
public interest or the interest of investors or consumers are subject
to change. However, new NUI has no reason to believe its claim of
exemption will be challenged in this way. You should be aware that,
although the Securities and Exchange Commission has not attempted to
revoke intrastate exemptions claimed in the same manner as new NUI
intends to claim its exemption, the Securities and Exchange Commission
has not affirmatively approved an intrastate exemption for a holding
company with a similar level of utility activity outside its state of
incorporation. New NUI is not seeking any affirmative approval from
the Securities and Exchange Commission with respect to its exemption.
The Holding Company Act may limit new NUI's ability to acquire
additional utility assets outside of New Jersey or securities of non-
New Jersey utilities if it wants to maintain this exemption from
registration under the Holding Company Act. We do not believe that
this limitation will have a material effect on new NUI's or current
NUI's operations after the share exchange is completed. In addition,
new NUI will remain subject to a provision of the Holding Company Act
that will require it to obtain the approval of the Securities and
Exchange Commission before it directly or indirectly acquires 5% or
more of the voting securities of any other electric or gas utility
company.
In June 1995, the SEC Division of Investment Management issued a
report recommending significant revisions to, or limited repeal of,
the Holding Company Act. However, new NUI and current NUI cannot
predict whether Congress will take this action. Pending any
revisions, the SEC indicated that it would revise its rules and
interpretations to modernize and simplify holding company regulation.
However, new NUI and current NUI cannot predict at present the
likelihood, timing or impact of any modernization or simplification.
Market Price of Current NUI Common Stock
On January 3, 2000 (the business day immediately preceding public
announcement of the terms of the proposed restructuring), the high and
low sales prices for current NUI common stock on the New York Stock
Exchange were $26.125 and $25.25, respectively.
Exchange of Stock Certificates Not Required
When the share exchange is completed you will not need to
exchange your existing stock certificates for stock certificates of
new NUI. Holders of current NUI common stock will automatically
become holders of new NUI common stock on a share-for-share basis, and
the present stock certificates for current NUI common stock will
automatically represent shares of new NUI common stock.
Accounting Treatment
New NUI and its subsidiaries' consolidated assets and liabilities
immediately after the exchange agreement is implemented will be the
same as those of current NUI immediately before implementation. New
NUI, on an unconsolidated basis, will record its investment in current
NUI and in subsidiaries transferred by current NUI to new NUI at their
net book value. New NUI will become the owner of current NUI common
stock as a result of the share exchange. This change in ownership has
no accounting effect on current NUI. Current NUI's transfer of
subsidiaries to new NUI will reduce current NUI's retained earnings by
an amount equal to the net book value of the subsidiaries.
Material United States Federal Income Tax Considerations
The following general discussion summarizes the material United
States federal income tax consequences of the share exchange and is
based upon the Internal Revenue Code of 1986, the applicable Treasury
Department regulations enacted under the Internal Revenue Code,
judicial authority and current administrative rulings and practice,
all as currently effective. Future legislation, regulations,
administrative rulings or court decisions could significantly change
these authorities either prospectively or retroactively. The
following discussion does not address the consequences of the share
exchange under state, local or foreign law. The discussion does not
address all aspects of United States federal income taxation that may
be important to a shareholder in light of the shareholder's particular
circumstances or to a shareholder subject to special rules including
but not limited to:
. S corporations
. financial institutions
. insurance companies
. tax-exempt entities
. dealers in securities
. taxpayers subject to alternative minimum tax
. persons who acquired the current NUI stock as exercise of an
employee option (or in any other way as compensation)
. persons holding the current NUI stock as part of a hedging or
conversion transaction, straddle or any other derivative
security.
This discussion assumes that current NUI shareholders hold their
respective shares of current NUI stock and will hold their new NUI
common stock, in each case, as capital assets within the meaning of
Section 1221 of the Code.
The following discussion is limited to the United States federal
income tax consequences relevant to:
. a holder of current NUI stock who is a citizen or resident of
the United States, or any state of the United States
. a corporation or other entity taxable as a corporation
created or organized under the laws of the United States, or
any political subdivision of the United States
. an estate the income of which is subject to United States
federal income tax regardless of its source
. a trust the administration of which is subject to the primary
supervision of a United States court and which has one or
more United States persons who have authority to control all
substantial decisions of the trust.
We do not intend to request any ruling from the Internal Revenue
Service concerning the United States federal income tax consequences
of the share exchange. In connection with the filing of this
Registration Statement, LeBoeuf, Lamb, Greene & MacRae, L.L.P. has
delivered its opinion to current NUI that the share exchange will be
treated as a tax-free transaction under Section 351 of the Code. The
opinion is subject to qualifications and is based upon currently
applicable law, specified assumptions listed in the opinion and
representations by current NUI's and new NUI's managements. Any
change in currently applicable law, which may or may not be
retroactive, or failure of any representation or assumption to be
true, correct and complete in all material respects could affect the
continuing validity of the opinion. Moreover, the opinion neither
binds nor precludes the IRS or any court from adopting a contrary
position. We cannot assure you that the IRS or a court will not
successfully assert contrary positions if the issues are litigated.
The following is a summary of material United States federal
income tax consequences of the share exchange, without reference to
the particular facts and circumstances of any particular shareholder.
In addition, this discussion does not address any non-income tax or
any foreign, state or local tax consequences of the share exchange.
This discussion does not address the tax consequences of any
transaction other than the share exchange. Each shareholder is
therefore strongly urged to consult with the shareholder's tax advisor
to determine the particular United States federal, state, local or
foreign income or other tax consequences of the share exchange to the
shareholder.
Exchange of current NUI Common Stock for new NUI Common Stock.
No gain or loss will be recognized for United States federal income
tax purposes in connection with the exchange of current NUI common
stock for new NUI common stock. The tax basis of the shares of new
NUI common stock received in the share exchange will equal the tax
basis of the current NUI common stock, and the holding period of the
shares of new NUI common stock will include the holding period of the
current NUI common stock.
Current NUI and new NUI. For United States federal income tax
purposes, neither current NUI nor new NUI will recognize any gain or
loss solely as a result of the share exchange.
Pro Forma Financial Information
We are not presenting any consolidated financial statements of
new NUI in this document since new NUI presently has no assets other
than nominal capitalization and no liabilities, and any pro forma
consolidated financial statements of new NUI would reflect no change
from the financial statements of NUI before implementation of the
share exchange.
Legal Opinion
James R. Van Horn, Esq., as counsel for current NUI and new NUI,
has given an opinion to the effect that the new NUI common stock
offered in this proxy statement and prospectus will be validly issued,
fully paid and nonassessable.
Experts
The consolidated financial statements of current NUI and
subsidiaries incorporated by reference in this proxy statement and
prospectus by reference to current NUI's Annual Report on Form 10-K,
for the year ended September 30, 1999, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their
reports with respect to the consolidated financial statements, and are
included and incorporated by reference in this document in reliance
upon the authority of Arthur Andersen LLP as experts in accounting
and auditing in giving those reports.
PROPOSAL NO. 2: ELECTION OF DIRECTORS
The Bylaws of current NUI provide that the board of directors
shall consist of not less than eight nor more than 25 directors.
Current NUI has eight directors at present. The bylaws also provide
that the board of directors shall be divided into three classes, with
directors in each class serving three-year terms. Approximately one-
third of the board of directors is elected each year. The bylaws
provide that no individual may be elected a director after having
attained his or her seventy-second birthday, although directors who
reach the age of 72 during a term may continue to serve until the
expiration of the term.
It is the intention of the persons named as proxies to vote in
favor of the election of James J. Forese and R. Van Whisnand as
directors of current NUI for three-year terms expiring at the 2003
Annual Meeting of Shareholders or until their successors are elected
and shall qualify, unless otherwise directed by the shareholder on the
proxy. Both nominees were last elected to the board at the 1997
Annual Meeting of Shareholders.
While it is anticipated that the nominees will be able to serve,
if any nominee is unable or declines to serve as a director at the
time of the Annual Meeting, proxies will be voted for any nominee who
may be designated by the board of directors to fill the vacancy. The
bylaws of current NUI provide that specific advance notification and
information requirements must be satisfied in order for a shareholder
to nominate an individual for election to the board. No such
nominations have been made. Information concerning these requirements
may be obtained by writing to the Secretary of current NUI.
Nominees for Election
Set forth below is information as of December 31, 1999,
concerning the age, current term, committee memberships, the period
served as a director and business experience during the past five
years with respect to each director nominee:
(Picture of James J. Forese)
James J. Forese, age 63
Current term expires in 2000
Member of the Audit, Compensation and Executive Committees
Mr. Forese has served as a director of current NUI since 1978.
Since July 1998 he has served as President and Chief Executive
Officer and a director of IKON Office Solutions (office equipment
and supply systems). From January 1997 to June 1998 he served as
Executive Vice President and President, International Operations,
of IKON Office Solutions. From January 1996 to December 1996, he
served as Executive Vice President, Chief Operating Officer and a
director of Alco Standard Corp. From October 1993 through
December 1995 he served as General Manager of Customer Financing
for International Business Machines Corporation and as Chairman
of IBM Credit Corporation. Mr. Forese also serves as a director
of American Management Systems, Inc.
(Picture of R. Van Whisnand)
R. Van Whisnand, age 55
Current term expires in 2000
Member of the Compensation, Investment and Executive Committees
Mr. Whisnand has served as a director since 1982. Since September
1998 he has served as Managing Partner, Osprey Partners
Investment Management, LLC (investment management firm). From
March 1995 to August 1998 he served as a principal of Fox Asset
Management (investment management firm). Prior thereto, he served
as a partner in Combined Capital Management (investment
management firm).
Continuing Board Members
Set forth below is information as of December 31, 1999,
concerning the age, current term, committee memberships, the period
served as director and business experience during the past five years
with respect to those members of the board of directors whose current
terms of office extend beyond 2000:
(Picture of Dr. Vera King Farris)
Dr. Vera King Farris, age 59
Current term expires in 2002
Member of the Compensation and Investment Committees
Dr. Farris has served as a director of current NUI since 1994.
She is President of the Richard Stockton College of New Jersey.
She also serves as a director of Flagstar Companies, Inc. and on
the boards of numerous educational and civic organizations.
(Picture of J. Russell Hawkins)
J. Russell Hawkins, age 44
Current term expires in 2002
Member of the Audit and Compensation Committees
Mr. Hawkins has served as a director of current NUI since
September 1998. Since September 1996, he has served as President
and Chief Executive Officer and a director of Paragon Networks
International (designer and manufacturer of innovative access
products for use in wide area network systems). Prior thereto, he
served as Managing Director of AT&T (Lucent Technologies).
(Picture of John Winthrop)
John Winthrop, age 63
Current term expires in 2002
Member of the Audit, Executive and Investment Committees
Mr. Winthrop has served as a director of current NUI since 1978.
He is President of John Winthrop & Co., Inc. and a partner of
Winthrop Melhado Flynn (both investment management firms). He
also serves as a director of the American Farmland Trust, the
Pioneer Funds and the Palmetto Project, Charleston, SC.
(Picture of John Kean)
John Kean, age 70
Current term expires in 2001
Chairman of the Board of Directors
Member of the Executive and Investment Committees
Mr. Kean has served as a director of current NUI since 1969. He
served as Chief Executive Officer of current NUI from 1969 until
his retirement in April 1995, holding the positions of Chairman
of the Board since October 1994 and President from 1969 until
October 1994. Mr. Kean is also a director of E'Town Corporation
and its subsidiary, Elizabethtown Water Company.
(Picture of John Kean, Jr.)
John Kean, Jr., age 42
Current term expires in 2001
President and Chief Executive Officer
Member of the Executive Committee
Mr. Kean has served as a director of current NUI since 1995.
Since April 1995 he has served as President and Chief Executive
Officer of current NUI. From October 1994 through March 1995 he served
as President and Chief Operating Officer. He served as Executive Vice
President of current NUI from January 1992 to September 1994 and as
Executive Vice President of Elizabethtown Gas Company from March 1993
to September 1994. Prior to March 1993, Mr. Kean held the additional
position of Chief Financial Officer of current NUI. Mr. Kean also
serves on the board of trustees of the Institute of Gas Technology.
(Picture of Dr. Bernard S. Lee)
Dr. Bernard S. Lee, age 65
Current term expires in 2001
Member of the Audit and Compensation Committees
Dr. Lee has served as a director of current NUI since 1992. He is
President and Chief Executive Officer of the Institute of Gas
Technology ("IGT") (a United States based energy and
environmental research and development organization providing
global support to the natural gas industry) and a member of the
IGT board of trustees and executive committee. He is Chairman of
M-C Power Corp., a majority-owned subsidiary of IGT. Dr. Lee is
also a director of Peerless Mfg. Co. and National Fuel Gas
Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors holds regular meetings every other month
and special meetings as necessary from time to time. The board held 7
meetings during fiscal year 1999. During the year, total attendance at
board and committee meetings was 98%. No member of the board attended
fewer than 85% of the aggregate of meetings of the board and meetings
of committees on which such director served. The board has an
executive, audit, compensation and investment committee and does not
have a nominating committee. Information on the committees of the
board is set forth below.
The executive committee has the authority (with certain
exceptions) to take such actions as the board of directors is
authorized to take. The committee does not hold regularly scheduled
meetings, but remains on call. The committee did not hold any meetings
during fiscal year 1999. The current members of the executive
committee are James J. Forese, John Kean (Chairman), John Kean, Jr.,
R. Van Whisnand and John Winthrop.
The audit committee has the responsibility to review and approve
the scope of the annual audit; recommend to the board the appointment
of independent public accountants; review the adequacy of current
NUI's system of internal controls; and review any non-audit services
provided by the independent public accountants. The committee met 3
times during fiscal year 1999. The current members of the audit
committee are James J. Forese (Chairman), J. Russell Hawkins, Bernard
S. Lee and John Winthrop.
The investment committee has the responsibility to oversee the
investment of assets held by current NUI's retirement plans and
savings and investment plans. The committee selects investment
managers, establishes guidelines under which they operate and reviews
their performance. The committee met 4 times during fiscal year 1999.
The current members of the investment committee are Vera King Farris,
John Kean, R. Van Whisnand and John Winthrop (Chairman).
The compensation committee has the responsibility to review and
make recommendations to the board of directors regarding the annual
salaries and cash bonuses to be paid to officers of current NUI, its
divisions and subsidiaries; review and make recommendations to the
board concerning:
. current NUI's executive compensation policies, practices and
objectives;
. administering current NUI's 1988 Stock Plan and 1996 Stock
Option and Stock Award Plan; and make grants and awards under
those stock plans; and
. establishing vesting and other criteria applicable to any
such grants and awards.
The committee met 3 times in fiscal year 1999. For additional
information on the role and activities of the committee, please see
"Compensation Committee Report on Executive Compensation" located
later in this proxy statement. The current members of the compensation
committee are Vera King Farris, James J. Forese, J. Russell Hawkins,
Bernard S. Lee and R. Van Whisnand (Chairman).
COMPENSATION OF DIRECTORS
The compensation program for directors is designed to closely
align the interests of directors with the interests of shareholders.
Each non- employee director of current NUI (with the exception of John
Kean) is paid a retainer fee pursuant to current NUI's 1988 Stock Plan
and 1996 Stock Option and Stock Award Plan that consists of a deferred
grant of shares of common stock. The number of shares of common stock
to be allocated to a non-employee director's account every year is
determined by dividing the annual board retainer (plus the annual
committee chair retainer, if applicable) by the fair market value of
the common stock on the date of the annual organization meeting of the
board. Currently, the annual board retainer for non-employee directors
is $15,000 and the annual committee chair retainer is $2,500. In
addition to these shares, the accounts of non-employee directors are
credited on each common stock dividend payment date with that number
of additional shares that could have been purchased on the accrued
shares in the account had the shares been issued and the dividends
reinvested. The number of shares accrued to a director are issued upon
the director's retirement or other termination of the director's
service as a member of the board. As of September 30, 1999, the total
deferred grants for non-employee directors provide for the issuance of
32,261 shares of common stock. These shares are issuable as follows:
James J. Forese and R. Van Whisnand, 7,277 shares each; John
Winthrop, 6,550 shares; Bernard S. Lee, 5,793 shares; Vera King
Farris, 4,476 shares; and J. Russell Hawkins, 888 shares. In addition
to these retainers, non-employee directors (with the exception of John
Kean) are paid $600 for attendance at each regular or special meeting
of the board of directors and any committee of the board.
Current NUI is party to a consulting agreement with John Kean,
who retired as Chief Executive Officer of current NUI effective April
1, 1995. The agreement expires on March 31, 2001 and contains the
following provisions:
. Mr. Kean provides consulting services to current NUI for up
to 110 hours each calendar month;
. Mr. Kean must devote sufficient time and effort to perform
such duties as may be assigned by current NUI or the board of
directors from time to time
. during the term of the agreement, if Mr. Kean remains a
director, he shall hold the position of Chairman of the board
. in consideration of the services rendered under the
agreement, current NUI provides Mr. Kean with:
1. an annual fee of $150,000;
2. office space;
3. clerical support;
4. expense reimbursement; and
5. life, health and medical coverages similar to those
previously provided to him when he was an employee of
current NUI.
. the agreement will terminate automatically in the event of
Mr. Kean's death
. the agreement may be terminated by current NUI for cause or
if Mr. Kean should become disabled
. Mr. Kean may terminate the agreement:
1. for "Good Reason" (as defined in the agreement)
following a change in control of current NUI; or
2. upon the impairment of his health or upon thirty days
prior written notice.
. upon a change in control of current NUI, the agreement is
automatically extended for three years following such change
in control
. if, following a change in control, the agreement is
terminated by Mr. Kean for Good Reason or by current NUI (or
its successor) other than as a result of Mr. Kean's
disability or for cause, Mr. Kean shall be entitled to
receive:
1. an amount equal to the amounts which would have
otherwise been paid to him if the agreement had remained
in effect through its term;
2. the continuation of benefits through the term of the
agreement; and
3. an amount, if necessary, in order to offset the impact
of the application of any excise tax imposed under the
Internal Revenue Code upon the value of such payments and
benefits.
Other than the amounts paid and the benefits provided under the
agreement, Mr. Kean does not receive any additional compensation for
serving on the board or committees of the board of current NUI, its
divisions or subsidiaries.
Current NUI has in effect a retirement plan for directors. To be
eligible for retirement benefits under the Plan, a director must have
served as a director for at least ten years, with a minimum of five
years of service as a non-employee of current NUI and its
subsidiaries. An eligible participant in the Plan will be paid, upon
retirement at or after age 70, an annual retirement benefit for life
equal to the value of the annual board retainer in effect at the time
of the director's retirement, subject to a minimum annual benefit of
$8,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Proxy disclosure rules require current NUI to report certain
relationships involving current NUI in which members of the
compensation committee have a direct or indirect material interest.
Also required is disclosure of interlocking relationships among
compensation committee members and those executive officers of current
NUI, if any, who also serve as members of compensation committees or
executive officers at other companies. The purpose of these
requirements is to allow shareholders to assess the independence of
current NUI's compensation committee members in making executive
compensation decisions and recommendations. While current NUI has had
transactions with companies and firms with which certain members of
the compensation committee are, or at some point during fiscal year
1999 were, affiliated as an officer and/or director, there are no such
relationships in which members of the committee have a direct or
indirect material interest. In addition, there are no interlocking
relationships of the nature described above involving members of the
compensation committee. The members of the compensation committee are
Vera King Farris, James J. Forese, J. Russell Hawkins, Bernard S. Lee
and R. Van Whisnand (Chairman).
TRANSACTIONS WITH MANAGEMENT
Companies and firms with which certain directors are, or during
fiscal year 1999 were, affiliated as an officer and/or director had
transactions in the ordinary course of business with current NUI
during fiscal year 1999 and similar transactions are expected to occur
in the future. Except as discussed in the next paragraph, none of
these directors had a direct or indirect material interest in such
transactions. The companies or firms involved in these transactions
and the related directors are: E'Town Corporation and Elizabethtown
Water Company (John Kean), Institute of Gas Technology (John Kean, Jr.
and Bernard S. Lee) and IKON Office Solutions (James J. Forese).
In 1987, Elizabethtown Gas Company entered into an agreement of
lease with Liberty Hall Joint Venture for the occupancy of
approximately 160,000 square feet of a 200,000 square foot office
building in Union, New Jersey. The Joint Venture participants are Cali
Liberty Hall Associates (a New Jersey general partnership) and a Kean
family trust of which John Kean is a trustee. All negotiations
relative to the lease were conducted between Elizabethtown Gas Company
and Cali Liberty Hall Associates. No person involved with the Kean
family trust participated in such discussions. The transaction was on
terms no more favorable than those that would have been agreed upon by
third parties on an arm's length basis. The annual base rent is
approximately $2.9 million from 1996 through 1999, $3.3 million from
2000 through 2004, and $3.7 million from 2005 through 2009.
Family Relationships
John Kean is the father of John Kean, Jr.
The board of directors recommends shareholders vote for the
election of the director nominees listed above. Proxies solicited by
management will be voted FOR the election of all director nominees
unless contrary voting instructions are indicated.
If the two directors who have been nominated for election by
proposal No. 2 are elected, and if the agreement and plan of exchange
is approved and implemented, these directors will become, and be
ratified as, directors of new NUI for the term ending in 2003.
PROPOSAL NO. 3: RATIFICATION OF AUDITORS
The accounting firm of Arthur Andersen LLP, 1345 Avenue of the
Americas, New York, N.Y. 10105 has been selected by the board of
directors, upon the recommendation of its audit committee, to serve as
independent public accountants for current NUI and its subsidiaries
for the fiscal year ending September 30, 2000. This firm has served as
auditors for current NUI since 1969. It is expected that
representatives of Arthur Andersen LLP will be present at the Annual
Meeting. They will have the opportunity to make a statement and will
be available to respond to appropriate questions.
The board of directors has unanimously approved the appointment
of Arthur Andersen LLP and recommends shareholders vote for the
ratification of this appointment. Proxies solicited by management will
be voted FOR this proposal unless a vote against this proposal or
abstention is specifically indicated. In the event of an insufficient
number of votes to ratify this appointment, the board of directors
will reconsider its selection of Arthur Andersen LLP as independent
public accountants.
If the agreement and plan of exchange is approved and
implemented, Arthur Andersen LLP will also become and be approved as
new NUI's independent public accountants for the fiscal year ending
September 30, 2000.
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners. Current NUI's
management is aware of only the following shareholder who owns
beneficially more than five percent of current NUI's common stock.
Number of Percent of
Name and Address Beneficial Shares Class
Owner
Fiduciary Trust Company 681,192 5.31
International
Two World Trade Center
New York, NY 10048
Security Ownership of Management. The following table shows, as
of December 31, 1999, the number and percent of the shares of common
stock beneficially owned by each director, each executive officer
listed in the Summary Compensation Table and all directors and
executive officers of current NUI as a group:
Title of Class Beneficial Owner Number of Percent of
Shares (1)(2) Class
Common Stock A. Mark Abramovic 24,810 *
Michael J. Behan 17,635 *
Vera King Farris 4,923 *
James J. Forese 7,427 *
J. Russell Hawkins 888 *
John Kean (3) 427,383 3.3%
John Kean, Jr. 121,805 *
Bernard S. Lee (4) 14,063 *
Robert F. Lurie 15,794 *
James R. Van Horn 20,157 *
R. Van Whisnand 8,927 *
John Winthrop 16,362 *
12 directors and 680,174 5.3%
executive officers
as a group
*Less than 1.0%
(1) Includes (a) the number of shares of common stock issuable to non-
employee directors upon termination of board service in payment for
their annual board and committee chair retainers, as follows: James J.
Forese and R. Van Whisnand, 7,277 shares each; John Winthrop, 6,550
shares; Bernard S. Lee, 5,793 shares; Vera King Farris, 4,476 shares;
J. Russell Hawkins, 888 shares; and all directors as a group, 32,261
shares; (b) shares of restricted stock, as follows: A. Mark Abramovic,
20,250 shares; Michael J. Behan, 9,475 shares; John Kean, Jr., 51,250
shares; Robert F. Lurie, 8,250 shares; James R. Van Horn, 9,550
shares; and all directors and executive officers as a group, 131,036
shares; and (c) shares that are subject to currently exercisable stock
options, as follows: John Kean, Jr., 5,000 shares; and all directors
and executive officers as a group, 5,000 shares.
(2) Except as noted, each beneficial owner listed has sole voting and
investment power with respect to the shares indicated next to such
person's name.
(3) Includes 157,407 shares over which John Kean has shared voting and
investment power as a co-trustee under various trusts for the benefit
of members of the Kean family.
(4) Includes 1,000 shares held by Dr. Lee's wife.
EXECUTIVE OFFICERS
The following information is provided with respect to each
executive officer of current NUI. Officers are elected annually at the
first meeting of the board of directors following the Annual Meeting.
There are no arrangements or understandings between any officer and
any other person pursuant to which the officer was selected.
John Kean, Jr., age 42
President and Chief Executive Officer
Since April 1995 Mr. Kean has served as President and Chief
Executive Officer of current NUI. From October 1994 through March 1995
he served as President and Chief Operating Officer. From March 1993
to September 1994, he served as Executive Vice President of
Elizabethtown Gas. Prior thereto, he served as Chief Financial
Officer of current NUI. He held the additional position of Executive
Vice President of current NUI from January 1992 to September 1994.
A. Mark Abramovic, age 51
Senior Vice President, Chief Operating Officer and Chief Financial
Officer
Mr. Abramovic has served as Senior Vice President and Chief
Financial Officer of current NUI since September 1997 and as Chief
Operating Officer since May 1998. From December 1993 to August 1997,
he served as Senior Vice President and Chief Financial Officer of
Equitable Resources, Inc. Prior thereto, he served as Vice President
and Chief Financial Officer of Connecticut Natural Gas Corporation.
Michael J. Behan, age 53
Vice President-New Ventures
Mr. Behan has served as Vice President of current NUI since March
1993. Prior thereto, he served as Assistant Vice President of current
NUI. He also serves as President of NUI Environmental Group, Inc. and
Utility Business Services, Inc.
Robert F. Lurie, age 42
Vice President-Corporate Development and Treasurer
Mr. Lurie has served as Vice President-Corporate Development and
Treasurer of current NUI since March 1997. He has served as Treasurer
since February 1994 and Vice President since March 1996. Prior to
February 1994, he served as Director of the Office of Public Finance
for the Treasury Department of the State of New Jersey.
James R. Van Horn, age 43
Chief Administrative Officer, General Counsel and Secretary
Mr. Van Horn has served as General Counsel and Secretary of
current NUI since June 1995 and Chief Administrative Officer since May
1998. Prior to June 1995, he served as Senior Vice President, General
Counsel and Secretary of Citizens First Bancorp, Inc. and Citizens
First National Bank of New Jersey.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the board of directors is comprised
of five independent, non-employee directors. The committee has
responsibility for making recommendations to the board concerning
current NUI's executive compensation policies, practices and
objectives. The committee makes recommendations to the board
concerning base salary levels and cash bonus awards for the officers
of current NUI and its subsidiaries. The committee also administers
current NUI's 1988 Stock Plan and 1996 Stock Option and Stock Award
Plan (the "Stock Plans"), making grants and awards under the Stock
Plans to selected key employees in its discretion.
In discharging its responsibilities, the committee draws upon
various resources, including, but not limited to, the varied business
experiences and knowledge of committee members and other non-employee
directors in the area of executive compensation and the advice of
independent compensation experts. These resources allow the committee
to stay abreast of current trends and developments in executive
compensation and provide valuable guidance to the committee in making
decisions and recommendations to the board of directors.
The committee strongly believes that the executive compensation
program should be designed to align the interests of management
closely with the interests of shareholders and to tie compensation
levels to the performance of current NUI and the achievement of long-
term and short-term goals and objectives. The committee also
recognizes the importance of a strong executive compensation program
to attract and retain qualified executives. Accordingly, the program
is designed to:
Provide short-term incentives for individual and company
performance through the payment of cash bonuses;
Provide long-term incentives for enhancing shareholder value
through equity-based compensation which is earned upon the
achievement of specific company performance goals; and
Provide current NUI with the ability to attract, motivate and
retain key executives who are critical to the success of current
NUI through the payment of competitive base salaries, the
opportunity to earn incentive compensation and the provision of a
competitive benefits package.
The components of current NUI's executive compensation program
are base salary, cash bonuses, long-term incentive compensation and
various benefits. Long-term compensation is comprised of grants and
awards under current NUI's stock plans pursuant to which the committee
may make stock awards and grants of restricted stock, stock options
and stock appreciation rights. The benefits provided to executives
include medical, retirement and savings plans, which are available to
employees generally, and supplementary medical and retirement plans
that are not available to employees generally.
In making determinations for long-term performance-based
restricted stock grants, and in establishing recommendations to be
made to the board of directors for increases in base salary and for
cash bonuses for current NUI's executives, the committee considers
data provided by independent compensation experts for the purpose of
determining competitive levels of total compensation for each of
current NUI's executives. The committee's objective is to develop a
total compensation program that is competitive in the marketplace and
provides significant incentive to increase shareholder value.
Accordingly, the mix of compensation for executive officers will
generally consist of:
. a base salary that is within the range for similar positions
in the marketplace;
. cash bonuses which are generally in line with the competitive
midpoint for similar positions in the marketplace; and
. long-term incentive grants of restricted stock that are
generally above the midpoint for similar positions in the
marketplace.
While the committee believes it is important to ensure that total
compensation levels for each of current NUI's executives are
competitive, it also believes that the mix of compensation should be
weighted toward variable components that provide a significant
incentive for the achievement of financial performance objectives by
current NUI.
In order to further align management's interest with NUI
shareholders, the board of directors has implemented a committee
recommendation to establish minimum stock ownership requirements for
both officers and directors of current NUI, as follows:
. the Chief Executive Officer must own company common stock
with a market value equal to a minimum of four times his then
current base salary;
. other executive officers must own common stock with a market
value equal to a minimum of two times their then current base
salary;
. non-executive officers must own common stock with a market
value equal to their then current base salary
. only shares which are owned outright by these officers will
be included in determining their compliance with these
requirements;
. shares of restricted common stock which have not vested, as
well as shares which have not yet vested under current NUI's
benefit plans, are not included in determining compliance;
. members of the board of directors are required to own shares
of common stock with a market value equal to a minimum of six
times the then current value of the board's annual retainer
(this would be equivalent to $90,000 based upon the current
retainer of $15,000 in a deferred grant of common stock paid
to members of the board); and
. for purposes of determining compliance with this requirement,
shares owned outright by directors will be combined with any
shares credited to their deferred stock accounts in
accordance with the Stock Plans.
These minimum stock ownership requirements were instituted in
1996 and officers and directors were given six years to comply. The
committee regularly monitors the progress of officers and directors
toward compliance.
Consistent with the committee's overall objective of aligning the
interests of management with the interests of shareholders and
providing an incentive for the enhancement of shareholder value, the
committee made grants of restricted common stock for fiscal year 1999
to certain key employees of current NUI, including the officers listed
in the Summary Compensation Table. The terms of these grants require
that current NUI achieve specific goals for earnings per share growth
during each of the next four fiscal years in order for the recipients
to receive all of the shares of common stock granted. Ownership of the
shares will vest 50% after two years, 25% after the third year and 25%
after the fourth year, subject to the condition that the performance
objectives have been attained. If minimum performance targets are not
met, all shares related to the applicable performance period are
forfeited. The committee has the authority to make adjustments to
these performance objectives if it deems such adjustments appropriate.
Current NUI's performance in fiscal year 1999 reflected a
significant improvement over results during fiscal year 1998.
Earnings per share, the primary benchmark used by the committee in
assessing company performance, increased by twentyone percent (21%)
after the elimination of non-recurring items. This performance was
despite a significantly warmer than normal winter, and was largely the
result of current NUI's cost containment measures and its successful
execution of a strategy to diversify sources of income to make current
NUI's financial performance less susceptible to the impact of weather.
The compensation paid to John Kean, Jr., President and Chief
Executive Officer of current NUI, with respect to fiscal year 1999 is
set forth in the Summary Compensation Table. Mr. Kean's salary
increased by 10.9% in 1999 from the salary he received in 1998.
Because Mr. Kean's salary is significantly lower than the bottom of
the salary range for similar positions, the committee has determined
it appropriate to provide Mr. Kean with a series of salary increases
that are intended to bring his salary in line with the competitive
marketplace. The committee believes that Mr. Kean's performance in
fiscal year 1999 was largely responsible for the strong financial
results achieved by current NUI. Accordingly, Mr. Kean was awarded a
cash bonus of $210,000. As noted above, the committee strongly
believes in performance-based compensation in order to provide an
incentive to management to create shareholder value. In order to
provide a future long-term incentive for Mr. Kean to lead current NUI
to continually improve financial performance and to enhance
shareholder value, the committee granted him 20,000 shares of
restricted common stock, which is reflected in the Summary
Compensation Table. In order for Mr. Kean to obtain ownership of these
shares, certain vesting and company performance conditions must be
satisfied. This restricted stock award is consistent with the
committee's objective of aligning the interests of management with the
interests of shareholders.
The committee believes that current NUI's executive compensation
program is well structured and provides maximum incentive for
executives to continually improve upon the financial performance of
current NUI; to attract, retain and motivate key officers; and to
enhance shareholder wealth.
Members of the Compensation Committee
R. Van Whisnand, Chairman
Vera King Farris
James J. Forese
J. Russell Hawkins
Bernard S. Lee
PERFORMANCE GRAPH
The graph below reflects the performance of current NUI's common
stock during the past five fiscal years and compares that performance
with the performance of a broad market index, the S & P 500, and the
performance of an industry index during that same period of time. The
industry index is an index of natural gas distribution companies
prepared by Edward D. Jones & Co. The chart below tracks the
performance of an investment of $100 on October 1, 1994 and assumes
the reinvestment of dividends.
NUI Total Return Comparison
Graphical Representation of Chart
[Graph appears here. Plot points are as follows]
1994 1995 1996 1997 1998 1999
NUI 100.0 96.7 116.1 150.0 152.9 171.2
Gas
Utilities 100.0 113.4 137.3 162.2 182.5 194.9
S&P 500 100.0 129.6 155.9 218.9 238.8 305.2
Although the total return for NUI during the five-year period
ending September 30, 1999 has lagged the Gas Utilities Index and the
S&P 500, during the past four years current NUI's performance has been
comparable to that of the gas utility industry. Based upon the indices
as well as current NUI's performance shown above for the four-year
period ending September 30, 1999, the total return for NUI was 77%, as
compared with a total return of 71.9% for the Gas Utilities Index. The
total return for the S&P 500 during this period was 135.5%. The
closing price of NUI common stock on September 30, 1999 was $24.75.
ANNUAL COMPENSATION, LONG-TERM COMPENSATION AND ALL OTHER
COMPENSATION
The following table summarizes the compensation paid during
fiscal year 1999 to current NUI's Chief Executive Officer and each of
the four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term
Compensation
Name and Principal Fiscal Salary Bonus All Other
Position Year ($) ($) Restricted Compensation
Stock ($)(2)
Awards
($)(1)
John Kean, Jr. 1999 290,775 210,000 523,120 5,784
President and Chief
Executive Officer
1998 261,175 -- 503,120 6,302
1997 252,650 150,000 368,438 5,366
A. Mark 1999 204,250 137,940 235,404 5,742
Abramovic(3)
Senior Vice
President, Chief
Operating Officer &
Chief Financial
Officer 1998 190,000 47,500 226,404 6,175
1997 15,800 -- 36,844 --
James R. Van Horn 1999 161,850 100,004 91,546 5,723
Chief
Administrative
Officer, General
Counsel and
Secretary 1998 154,500 39,000 88,046 6,030
1997 143,000 66,500 85,969 4,489
Robert F. Lurie 1999 154,775 46,770 78,468 4,643
Vice President,
Corporate
Development &
Treasurer 1998 146,475 30,280 75,468 4,426
1997 128,025 45,600 73,688 5,090
Michael J. Behan 1999 152,225 77,950 91,546 4,362
Vice President, New
Ventures 1998 140,175 35,300 88,046 4,763
1997 133,325 49,400 81,056 4,616
(1) Shares of restricted stock carry a significant risk of forfeiture.
In order to earn all shares, earnings per share must increase at lease
ten percent annually. The number of shares of restricted stock
granted to the listed officers with respect to fiscal year 1999 is as
follows: John Kean, Jr.: 20,000; A. Mark Abramovic: 9,000; James R.
Van Horn: 3,500; Robert F. Lurie: 3,000; and Michael J. Behan:
3,500. These shares will vest over a four year period as follows: 50%
after two years, 25% after three years and 25% after four years. The
value of the award is based upon the fair market price of the common
stock at the date of grant. In 1999, awards were granted on November
22, 1999 and the fair market price for the common stock was $26.156.
(2) Represents the employer match under qualified savings plans during
fiscal year 1999.
(3) Mr. Abramovic joined current NUI on September 2, 1997 and the
compensation information for Mr. Abramovic in 1997 relates to the
period of September 2, 1997 through September 30, 1997.
Set forth below is information on current outstanding restricted stock
for the listed officers as of September 30, 1999. Prior to vesting,
the recipients receive dividends on these shares and have voting
rights with respect to these shares.
Vesting Schedule
Shares Value on 1998 Vesting Vesting
Date of Remaining 9/30/99 Forfeitures Shares Date
Officer Grant to Vest $24.688
John 11/28/95 3,750 $ 92,580 3,750 3,750 11/28/99
Kean,
Jr.
11/15/96 7,500 185,160 3,750 11/15/99
3,750 11/15/00
11/24/97 11,250 277,740 3,750 3,750 11/24/99
3,750 11/24/00
3,750 11/24/01
11/23/98 20,000 493,760 10,000 11/23/00
5,000 11/23/01
5,000 11/23/02
A. Mark 11/24/97 3,375 $ 83,322 1,125 1,125 11/24/99
Abramovic
1,125 11/24/00
1,125 11/24/01
11/23/98 9,000 222,192 4,500 11/23/00
2,250 11/23/01
2,250 11/23/02
James R. 11/28/95 793 $ 19,578 794 793 11/28/99
Van Horn
11/15/96 1,600 39,501 800 11/15/99
800 11/15/00
11/24/97 2,625 64,806 875 875 11/24/99
875 11/24/00
875 11/24/01
11/23/98 3,500 86,408 1,750 11/23/00
875 11/23/01
875 11/23/02
Robert 11/28/95 714 $ 17,627 715 714 11/28/99
F.
Lurie
11/15/96 1,500 37,032 750 11/15/99
750 11/15/00
11/24/97 2,250 55,548 750 750 11/24/99
750 11/24/00
750 11/24/01
11/23/98 3,000 74,064 1,500 11/23/00
750 11/23/01
750 11/23/02
Michael 11/28/95 838 $20,689 838 838 11/28/99
J.
Behan
11/15/96 1,650 40,375 825 11/15/99
825 11/15/00
11/24/97 2,475 61,102 825 825 11/24/99
825 11/24/00
825 11/24/01
11/23/98 3,500 86,408 1,750 11/23/00
875 11/23/01
875 11/23/02
Options and Stock Appreciation Rights
No options or Stock Appreciation Rights (SARs) were granted
during fiscal year 1999 to any of the officers listed in the Summary
Compensation Table and no outstanding options or SARs were repriced in
the most recent fiscal year. The table set forth below provides
information concerning all currently outstanding stock options held by
officers listed in the Summary Compensation Table.
Aggregated Option/SAR Exercises in 1999 Fiscal Year
Option and SAR Values as of September 30, 1999
Name Shares Value Number of Value of
Acquired Realized Securities Unexercised
on ($) Underlying In-the-Money
Exercise Unexercised Options/SARs
(#) Options/SARs at at FY-End
FY-End(#) Exercisable/
Exercisable/ Unexercisable(1)
Unexercisable
John Kean, -- -- 5,000 $35,315
Jr.
(1) The Fair Market Value of the common stock as of September 30,
1999 was $24.688. Mr. Kean has an option to purchase 5,000 shares at
a per share exercise price of $17.625.
Retirement Benefit Plans
The executive officers of current NUI earn retirement benefits
that may be payable under three separate plans:
. current NUI's Retirement Plan, a funded plan in which more
than 70% of current NUI's employees are eligible to
participate;
. the ERISA Excess Benefits Plan, an unfunded plan that is
designed to provide benefits for those participants in the
Retirement Plan for whom benefits are reduced by reason of
the limitations imposed under Section 415 of the Internal
Revenue Code of 1986, as amended from time to time (the
"Code"); and
. the Supplemental Retirement Benefits Plan, an unfunded
plan that provides additional benefits to certain key
employees, including those listed in the Summary
Compensation Table.
While participants in the Retirement Plan and the ERISA
Excess Benefits Plan become vested in their entitlement to benefits
under vesting requirements established under the Employee Retirement
Income Security Act of 1974, participants in the Supplemental
Retirement Benefits Plan are eligible to receive benefits from the
plan only if they reach retirement age while working for current
NUI.
The Retirement Plan, which is funded entirely by current NUI,
provides that a participant retiring at or after age 65 (or at or
after age 62 with at least 25 years of credited service) will
receive an annual retirement benefit equal in amount (when
calculated as a life annuity with two years certain) to 1-1/2% of
the participant's final average compensation (the average of the
highest sixty consecutive months' base salary) multiplied by the
number of years of credited service. Benefits payable to participants
in the Retirement Plan may be reduced by reason of the limitations
imposed under Section 415 of the Code. The ERISA Excess Benefits Plan
will pay the difference between the amount payable to the participant
under the Retirement Plan and the amount the participant would have
been paid but for the limitations imposed under Section 415 of the
Code. Benefits under this plan are subject to the same terms and
conditions as the benefits payable to the participant under current
NUI's Retirement Plan.
The unfunded Supplemental Retirement Benefits Plan provides that
each eligible employee who reaches retirement age while working for
current NUI will receive an annual retirement benefit equal in amount
(when calculated as a life annuity with two years certain) to 2% of
the participant's final average total compensation (the average of the
highest sixty consecutive months' earnings, including cash bonuses
earned) multiplied by the number of years of credited service up to a
maximum of 60%. Benefits otherwise payable under the unfunded
Supplemental Retirement Benefits Plan are reduced by amounts payable
under the Retirement Plan and the ERISA Excess Benefits Plan.
The following table shows the maximum aggregate annual retirement
benefit payable from all three plans at normal retirement age for
various levels of final average compensation and years of service,
assuming payment of benefits in the form of a life annuity with two
years certain:
Remuneration 10 Years 20 Years 30 Years 40 Years
(*)
$100,000 $20,000 $40,000 $60,000 $60,000
150,000 30,000 60,000 90,000 90,000
200,000 40,000 80,000 120,000 120,000
250,000 50,000 100,000 150,000 150,000
300,000 60,000 120,000 180,000 180,000
350,000 70,000 140,000 210,000 210,000
400,000 80,000 160,000 240,000 240,000
450,000 90,000 180,000 270,000 270,000
500,000 100,000 200,000 300,000 300,000
550,000 110,000 220,000 330,000 330,000
600,000 120,000 240,000 360,000 360,000
*Average annual compensation utilized for formula purposes
includes salary and cash bonus as reported on the Summary Compensation
Table. The benefit amounts shown in the preceding table are not
subject to any deduction for Social Security benefits or other offset
amounts. The number of years of service now credited under the
Retirement Plan for the participants listed in the "Summary
Compensation Table" is as follows: John Kean, Jr., 14 years; A. Mark
Abramovic, 2 years; James R. Van Horn, 4 years; Robert F. Lurie, 5
years; and Michael J. Behan, 21 years.
Change in Control Agreements
Current NUI is party to change in control agreements with certain
officers, including those officers listed in the Summary Compensation
Table. The purpose of these agreements is to provide key management
personnel with certain financial protection in the event of a change
in control of current NUI and the subsequent termination of the
officer's employment. By providing this protection, current NUI helps
to ensure that the efforts of key employees remain focused on current
NUI's performance and the enhancement of shareholder value during
rumored, potential or actual change in control situations.
Under these agreements:
. a covered officer becomes entitled to the payments and
benefits provided for in the agreement if, within thirty-six
months after the change in control,
1. current NUI (or its successor) terminates the
employee other than for cause or as a result of the
employee's death or disability; or
2. the employee terminates his or her employment for
Good Reason (as defined in the agreement).
. the payments to which a covered officer will be entitled in
such a termination event include a payment of up to three
times the officer's annual base salary plus three times the
highest incentive compensation award received by the officer
during the preceding thirty-six months.
. following termination of employment,
1. the officer will continue to participate in all
employee benefit plans in which the officer was
eligible to participate on the date of termination;
2. all incentive awards not yet paid will be payable;
and
3. the spread between the exercise price and the
higher of the highest bid price during the twelve
months preceding termination or the highest price per
share paid in connection with any change in control
will be payable in cash in lieu of stock issuable upon
the exercise of stock options.
Most change in control agreements provide that in the event that
any payment or benefit received under the agreement would be an
"excess parachute payment" (within the meaning of Section 280G(b)(1)
of the Internal Revenue Code of 1986, as amended from time to time),
then the present value of all payments to be received under the
agreement shall be reduced to an amount which maximizes payments but
does not result in the payment of an excess parachute payment.
The agreements with John Kean, Jr., A. Mark Abramovic and James
R. Van Horn provide that, if any payments are subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code as a result
of an excess parachute payment, current NUI (or its successor) shall
gross-up the payments to be made to them so that the net amount shall
be equal to the payments prior to the payment of any excise tax and
any income taxes on the gross-up payment.
Except as set forth above, current NUI is not party to any other
employment, change in control or termination agreements with executive
officers. The proposed reorganization of NUI into a holding company
structure does not constitute a change in control as defined by any of
the agreements described above.
ANNUAL REPORT
The Annual Report of current NUI for the fiscal year ended
September 30, 1999 has been previously mailed to shareholders.
Shareholders are referred to the Annual Report for financial and other
information about current NUI. Current NUI will furnish without charge
a copy of its most recent Annual Report on Form 10-K as filed with the
Securities and Exchange Commission to any beneficial owner of Current
NUI's common stock upon receipt of a written request from such person.
Please direct all such requests to James R. Van Horn, Chief
Administrative Officer, General Counsel and Secretary, 550 Route 202-
206, P.O. Box 760, Bedminster, New Jersey 07921-0760.
OTHER MATTERS
Solicitation of Proxies
This solicitation is made on behalf of current NUI's board of
directors. Current NUI will bear the cost of soliciting these
proxies. In addition to solicitation by mail, directors, officers and
employees of current NUI and its subsidiaries may solicit proxies for
the annual meeting from current NUI's shareholders personally or by
telephone or telegram without additional remuneration. Current NUI
will also provide proxy materials to persons, firms, banks and
companies holding shares in their names, or in the names of nominees
which are beneficially owned by others, for transmittal to the
beneficial owners. Current NUI will reimburse the record owners for
their expenses related to the transmittal. Current NUI has retained
the firm of D.F. King & Co., Inc. to assist in the solicitation of
proxies at a cost of $7,000 plus expenses.
Shareholder Proposals
You are entitled to submit proposals for consideration at current
NUI's (or, if the exchange agreement has been implemented, at new
NUI's) 2001 annual meeting. Shareholders who desire to submit a
proposal to be considered for inclusion in the proxy statement
relating to that meeting must satisfy certain information and stock
ownership requirements established by the current NUI bylaws (or the
new NUI bylaws) and the SEC and submit the proposal to the Secretary
of current NUI (or new NUI) at 550 Route 202-206, P.O. Box 760,
Bedminster, New Jersey 07921-0760 to be received no later than
August 31, 2000.
Current NUI's (or new NUI's) proxies will have discretionary
authority to vote on any shareholder proposal presented at the 2001
Annual Meeting by means other than inclusion in current NUI's (or new
NUI's) proxy statement unless current NUI (or new NUI) has received
written notice of the shareholder proposal between August 31, 2000 and
September 30, 2000.
Other Business
The current NUI's board of directors does not intend to present
any other business at the annual meeting and is not aware of any
business to be presented by others. However, if any other matter is
properly presented for a vote, the proxies will be voted in respect of
those matters in accordance with the judgment of the person or persons
acting under the proxy.
By order of the board of directors
JAMES R. VAN HORN
Chief Administrative Officer,
General Counsel and Secretary
Bedminster, New Jersey
February 11, 2000
Again, we call your attention to the enclosed proxy. We would
appreciate it very much if you would vote, date, sign and return it
promptly, regardless of whether you plan to attend the meeting.
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF EXCHANGE
This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement"), dated as of
[ ], 2000, is between NUI CORPORATION, a New Jersey corporation (the
"Company") , the company whose shares will be acquired pursuant to
the Exchange described herein, and NUI Holding Company, a New Jersey
corporation ("NUI Holding Co."), the acquiring company. The Company
and NUI Holding Co. are hereinafter referred to, collectively, as the
"Companies."
WITNESSETH:
WHEREAS, the authorized capital stock of the Company consists of
(a) 30,000,000 shares of Common Stock, without par value ("Company
Common Stock"), of which 12,918,121 shares are issued and outstanding,
and (b) 5,000,000 shares of Preferred Stock, par value, of which no
shares are issued and outstanding; the number of shares of Company
Common Stock being subject to increase to the extent that shares
reserved for issuance are issued prior to the Effective Time, as
hereinafter defined;
WHEREAS, NUI Holding Co. is a wholly owned subsidiary of the
Company with authorized capital stock consisting of (a) 30 million
shares of Common Stock, without par value ("NUI Holding Co. Common
Stock"), of which [100] shares are issued and outstanding and owned of
record by the Company and (b) 5 million shares of Preferred Stock,
without par value ("NUI Holding Co. Preferred Stock"), of which no
shares are issued and outstanding;
WHEREAS, the Boards of Directors of the respective Companies deem
it desirable and in the best interests of the Companies and the
shareholders of the Company that each share of Company Common Stock be
exchanged for a share of NUI Holding Co. Common Stock with the result
that NUI Holding Co. becomes the owner of all outstanding Company
Common Stock and that each holder of Company Common Stock becomes the
owner of an equal number of shares of NUI Holding Co. Common Stock,
all on the terms and conditions hereinafter set forth; and
WHEREAS, the Boards of Directors of the Companies have each
approved and adopted this Agreement and the Board of Directors of the
Company has recommended that its shareholders approve this Agreement
pursuant to the New Jersey Business Corporation Act (the "Act");
WHEREAS, the parties hereto agree that at the Effective Time (as
hereinafter defined) each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time will be exchanged
for one share of NUI Holding Co. Common Stock (the "Exchange");
WHEREAS, for U.S. federal income tax purposes, it is intended
that the Exchange will constitute a transaction described in section
351 of the Internal Revenue Code of 1986, as amended (the "Code);
NOW, THEREFORE, in consideration of the premises, and of the
agreements, covenants and conditions hereafter contained in this
Agreement, the parties agree as follows:
ARTICLE 1.
This Agreement shall be submitted to the shareholders of the
Company entitled to vote with respect thereto for approval as provided
by the Act.
ARTICLE 2.
Subject to the satisfaction of the terms and conditions set forth
in this Agreement and to the provisions of Article VI, NUI Holding Co.
agrees to file with the Secretary of State of the State of New Jersey
(the "Secretary of State") a Certificate of Share Exchange (the
"Certificate") with respect to the Exchange, and the Exchange shall
take effect upon the effective date as specified in the Certificate
(the "Effective Time").
ARTICLE 3.
a. At the Effective Time:
i. each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be automatically
exchanged for one share of NUI Holding Co. Common Stock, which shares
shall thereupon be fully paid and non-assessable;
ii. NUI Holding Co. shall acquire and become the owner and
holder of each issued and outstanding share of Company Common Stock so
exchanged;
iii. each share of NUI Holding Co. Common Stock issued and
outstanding immediately prior to the Effective Time shall be canceled
and shall thereupon constitute an authorized and unissued share of NUI
Holding Co. Common Stock;
iv. each share of Company Common Stock held under NUI's Dividend
Reinvestment and Common Stock Purchase Plan, 1988 Stock Plan, 1996
Stock Option and Stock Award Plan, 1996 Employee Stock Purchase Plan
and 1996 Director Stock Purchase Plan (including fractional and
uncertificated shares) immediately prior to the Effective Time shall
be automatically exchanged for a like number of shares (including
fractional and uncertificated shares) of NUI Holding Co. Common Stock,
which shares shall be held under NUI's Dividend Reinvestment and
Common Stock Purchase Plan, 1988 Stock Plan, 1996 Stock Option and
Stock Award Plan, 1996 Employee Stock Purchase Plan and 1996 Director
Stock Purchase Plan, as the case may be; and
v. the former owners of Company Common Stock shall be entitled
only to receive shares of NUI Holding Co. Common Stock as provided
herein.
b. As of the Effective Time, NUI Holding Co. shall succeed to
the Dividend Reinvestment and Common Stock Purchase Plan as in effect
immediately prior to the Effective Time, and the Dividend Reinvestment
and Stock Purchase Plan shall be appropriately amended to provide for
the issuance and delivery of NUI Holding Co. Common Stock on and after
the Effective Time.
c. As of the Effective Time, the 1988 Stock Plan, 1996 Stock
Option and Stock Award Plan, 1996 Employee Stock Purchase Plan and
1996 Director Stock Purchase Plan shall be appropriately amended to
provide for the issuance and delivery of NUI Holding Co. Common Stock
on and after the Effective Time.
ARTICLE 4.
The filing of the Certificate with the Secretary of State and the
consummation of the Exchange are subject to the satisfaction of the
following conditions precedent:
i. the approval by the shareholders of the Company, to the
extent required by the Act, of this Agreement;
ii. the approval for listing, upon official notice of issuance,
by the New York Stock Exchange, of NUI Holding Co. Common Stock to be
issued and reserved for issuance pursuant to the Exchange;
iii. the receipt of such orders, authorizations, approvals or
waivers from the New Jersey Board of Public Utilities, the Florida
Public Service Commission, the North Carolina Utilities Commission,
the Maryland Public Service Commission, the New York Public Service
Commission, the Pennsylvania Public Utility Commission and all other
regulatory bodies, boards or agencies as are required in connection
with the Exchange, which orders, authorizations, approvals or waivers
remain in full force and effect and do not include, in the sole
judgment of the Board of Directors of the Company, unacceptable
conditions; and
iv. the receipt by the Company of a tax opinion of LeBoeuf,
Lamb, Greene & MacRae L.L.P. ("LeBoeuf") satisfactory to the Board of
Directors of the Company to the effect that the Exchange will be
treated as a transaction described in Section 351 of the Code. In
rendering such opinion, LeBoeuf shall be entitled to rely upon
customary assumptions and representations of the Company and NUI
Holding Company that are in form and substance reasonably satisfactory
to LeBoeuf.
ARTICLE 5.
Following the Effective Time, each outstanding certificate which,
immediately prior to the Effective Time, represented Company Common
Stock shall be deemed and treated for all corporate purposes to
represent the ownership of the same number of shares of NUI Holding
Co. Common Stock. The holders of Company Common Stock at the Effective
Time shall have no right to have their shares of Company Common Stock
transferred on the stock transfer books of the Company, and such stock
transfer books shall be deemed to be closed for this purpose at the
Effective Time.
ARTICLE 6.
This Agreement may be amended, modified or supplemented, or
compliance with any provision or condition hereof may be waived, at
any time, by the mutual consent of the Boards of Directors of the
Company and of NUI Holding Co.; provided, however, that no such
amendment, modification, supplement or waiver shall be made or
effected, if such amendment, modification, supplement or waiver
would, in the judgment of the Board of Directors of the Company,
materially and adversely affect the shareholders of the Company.
Notwithstanding shareholder approval of this Agreement, this
Agreement may be terminated and the Exchange and related transactions
abandoned at any time prior to the time the Certificate is filed with
the Secretary of State, if the Board of Directors of the Company
determines, in its sole discretion, that consummation of the Exchange
would be inadvisable or not in the best interests of the Company or
its shareholders.
IN WITNESS WHEREOF, each of the Company and NUI Holding Co., pursuant
to authorization and approval given by its Board of Directors, has
caused this Agreement to be executed as of the date first above
written.
NUI CORPORATION
By: ___________________________
Name:
Title:
NUI HOLDING COMPANY
By: ___________________________
Name:
Title:
EXHIBIT B
FORM OF
AMENDED and RESTATED
CERTIFICATE OF INCORPORATION
OF
NUI HOLDING COMPANY
ARTICLE I
The name of the Company is: NUI Holding Company
ARTICLE II
The address of its registered office in the State of New Jersey is
550 Route 202-206 Bedminster, New Jersey 07921 and the name of its
registered agent at that address is James R. Van Horn.
ARTICLE III
There are eight (8) Directors of the Company. Their names and
addresses are:
John Kean
550 Route 202-206
Bedminster, New Jersey 07921
John Kean, Jr.
550 Route 202-206
Bedminster, New Jersey 07921
Dr. Vera King Farris
550 Route 202-206
Bedminster, New Jersey 07921
James J. Forese
550 Route 202-206
Bedminster, New Jersey 07921
J. Russell Hawkins
550 Route 202-206
Bedminster, New Jersey 07921
Dr. Bernard S. Lee
550 Route 202-206
Bedminster, New Jersey 07921
R. Van Whisnand
550 Route 202-206
Bedminster, New Jersey 07921
John Winthrop
550 Route 202-206
Bedminster, New Jersey 07921
ARTICLE IV
The nature of the business or purposes to be conducted or promoted by
the Company is to engage in any lawful act or activity for which
corporations may be organized under the New Jersey Business
Corporation Act.
ARTICLE V
The total number of shares of stock which the Company shall have
authority to issue consists of 30 million shares of common stock
without par value, and 5 million shares of preferred stock without
par value. Shares of the Company shall not be subject to preemptive
rights unless otherwise determined by the Board of Directors pursuant
to the authority granted by the provisions of Article VI.
ARTICLE VI
The relative rights, preferences and limitations of a share of each
class shall be as follows:
(a) Common Stock.
Each holder of common stock shall be entitled upon all matters voted
upon by the Shareholders to one vote for each share of common stock
standing in such shareholder's name.
The common stock is subject to all the powers, rights, privileges,
preferences and priorities of the preferred stock as are stated and
expressed herein and as shall be stated and expressed in any
resolution or resolutions adopted by the Board of Directors pursuant
to authority expressly granted to and vested in it by the provisions
of this Article VI.
(b) Preferred Stock.
The Board of Directors is authorized subject to limitations
prescribed by law and the provisions of this paragraph to provide for
the issuance of additional shares of preferred stock, in one or more
series and, by filing a certificate pursuant to the applicable law of
New Jersey, to establish from time to time the number of shares to be
included in each such series and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(1) The number of shares constituting such series and the
distinctive designation of such series;
(2) The dividend rate on the shares of such series, whether
dividends shall be cumulative, and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends
on shares of such series;
(3) Whether the shares of such series shall have voting rights in
addition to any voting rights that may be provided by law and, if so,
the terms of such voting rights;
(4) Whether the shares of such series shall have conversion
privileges, and, if so, the terms and conditions of such conversion,
including provision for adjustments of the conversion rate in such
events as the Board of Directors shall determine;
(5) Whether or not the shares of such series shall be redeemable,
and, if so, the terms and conditions of redemption, including the
date or dates upon or after which the shares of such series shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates;
(6) Whether the shares of such series shall have a sinking fund for
the redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(7) The rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the Company, and the relative rights of priority, if any, of payment
of shares of such series.
(8) Any other relative rights, preference and limitations of such
series.
ARTICLE VII
(a) Except as otherwise fixed pursuant to Article VI relating to the
rights of the holders of any class or series of preferred stock
having a preference over the common stock as to dividends or upon
liquidation, or to elect additional Directors under specified
circumstances, the Board of Directors shall consist of not less than
eight (8) nor more than twenty-five (25) persons; provided, however,
that the authorized number of Directors may be changed to any number
between eight (8) and twenty-five (25) from time to time exclusively
by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized Directors (whether or not
there exist any vacancies in previously authorized directorships at
the time any such resolution is presented to the Board for adoption).
(b) The Directors (other than those who may be elected by the
holders of any class of series of preferred stock having a preference
over common stock as to dividends or upon liquidation) shall be
classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible,
one class to hold office initially for a term expiring at the annual
meeting of Shareholders to be held in 2001, another class to hold
office initially for a term expiring at the annual meeting of
Shareholders to be held in 2002, and another class to hold office
initially for a term expiring at the annual meeting of Shareholders
to be held in 2003, with the members of each class to hold office
until their successors are elected and qualified. At each annual
meeting of the Shareholders of the Company, the successors to the
class of directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual meeting of
Shareholders held in the third year following the year of their
election. The election of Directors need not be by ballot.
(c) Except as otherwise fixed pursuant to the provisions of Article
VI relating to the rights of the holders of any class or series of
preferred stock having a preference over the common stock as to
dividends or upon liquidation to elect Directors under specified
circumstances, newly created directorships resulting from any
increase in the authorized number of Directors or any vacancies in
the Board of Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause may be filled
only by a majority vote of the Directors then in office, though less
than a quorum of the Board of Directors. If any applicable provision
of New Jersey law expressly confers power on Shareholders to fill
such a directorship at a special meeting of Shareholders, such a
directorship may be filled at such a meeting only by the affirmative
vote of at least 75 percent of the then-outstanding shares of the
voting stock, voting together as a single class (it being understood
that for all purposes of this Article VII and Article XI, each share
of the voting stock shall have the number of votes granted to it
pursuant to Article VI or any resolution or resolutions of the Board
of Directors pursuant to authority expressly granted to and vested in
it by the provisions of Article VI). Any Director elected in
accordance with the two preceding sentences shall hold office for the
remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such
Director's successor shall have been elected and qualified. No
decrease in the number of authorized Directors constituting the
entire Board of Directors shall shorten the term of any incumbent
Director.
(d) Subject to the rights of the holders of any class or series of
preferred stock having preference over the common stock as to
dividends or upon liquidation or to elect Directors under specified
circumstances, any Director, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 75 percent of all of the
then-outstanding shares of the voting stock, voting together as a
single class. The Company must notify the Director of the grounds of
his impending removal and the Director shall have an opportunity, at
the expense of the Company, to present his defense to the
Shareholders by a statement which accompanies or precedes the
Company's solicitation of proxies to remove him.
ARTICLE VIII
Any action required or permitted to be taken by the Shareholders of
the Company must be effected at an annual or special meeting of
Shareholders of the Company or may be taken without a meeting if all
the Shareholders entitled to vote thereon consent thereto in writing.
ARTICLE IX
Except as otherwise required by law and subject to the rights of the
holders of any class or any series of preferred stock having a
preference over the common stock as to dividends or upon liquidation,
special meetings of Shareholders of the Company may be called only by
the Board of Directors pursuant to a resolution adopted by a majority
of the total number of authorized Directors (whether or not there
exist any vacancies in previously authorized directorships at the
time any such resolution is presented to the Board for adoption).
ARTICLE X
(a) A Director or officer of the Company shall not be personally
liable to the Company or its Shareholders for monetary damages for
breach of fiduciary duty as Director or officer, as the case may be,
except to the extent that such exemption from liability or limitation
of liability is not permitted under the New Jersey Business
Corporation Act as currently in effect or as subsequently amended.
No amendment to or repeal of this Article X and no amendment to or
repeal or termination of effectiveness of any law permitting the
exemption from or limitation of liability provided for in this
Article X shall apply to or have any effect on the liability or
alleged liability of any Director or officer for or with respect to
any acts or omissions of that director or officer occurring prior to
such amendment, repeal or termination of effectiveness.
(b)(1) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a "proceeding"), by reason of the fact
that such person or anyone for whom such person is the legal
representative, is or was a Director or officer of the Company or is
or was serving at the request of the Company as a Director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is
alleged action or inaction in an official capacity as a Director,
officer, employee or agent or in any other capacity while serving as
a Director, officer, employee or agent, shall be indemnified and held
harmless by the Company to the fullest extent authorized by the New
Jersey Business Corporation Act or any other law, as the same exists
or may hereafter be amended (but in the case of any such amendment,
only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to
provide prior to such amendment), against all expense, liability and
loss (including attorney's fees, judgments, fines ERISA, excise taxes
or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a
Director, officer, employee or agent and shall inure to the benefit
of his or her heirs, executors and administrators; provided, however,
that, except as provided in this paragraph (b), the Company shall
indemnify any such person seeking indemnification in connection with
a proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of Directors
of the Company. The right to indemnification conferred in this
paragraph (b) shall be a contract right and shall include the right
to be paid by the Company the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however,
that, if the New Jersey Business Corporation Act requires, the
payment of such expenses incurred by a Director or officer in his or
her capacity as a Director or officer of the Company (and not in any
other capacity in which service was or is rendered by such person
while a Director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Company of an
undertaking, by or on behalf of such Director or officer, to repay
all amounts so advanced unless it shall ultimately be determined that
such Director or officer is entitled to be indemnified under this
Section or otherwise. The Company may, by action of its Board of
Directors, provide indemnification to employees and agents of the
Company with the same scope and effect as the foregoing
indemnification of Directors and officers.
(2) Right of Claimant to Bring Suit. If a claim under subparagraph
(b)(1) is not paid in full by the Company within 30 days after a
written claim has been received by the Company, the claimant may at
any time thereafter bring suit against the Company to recover the
unpaid amount of the claim and, if successful in whole or part, the
claimant shall be entitled to be paid also the expense (including,
without limitation, reasonable attorney fees) of prosecuting such
claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company)
that the claimant has not met the standards of conduct which make it
permissible under the New Jersey Business Corporation Act for the
Company to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Company. Neither the
failure of the Company (including its Board of Directors, independent
legal counsel, or its Shareholders) to have made a determination
prior to the commencement of such action that indemnification of the
claimant is proper in the circumstances because the claimant has met
the applicable standard of conduct set forth in the New Jersey
Business Corporation Act nor an actual determination by the Company
(including its Board of Directors, independent legal counsel, or its
Shareholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
(3) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of
its final disposition conferred in this paragraph (b) shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of Shareholders or
disinterested Directors or otherwise.
(4) Insurance. The Company may maintain insurance, at its expense,
to protect itself and any Director, officer, employee or agent of the
Company or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or
not the Company would have the power to indemnify such person against
such expense, liability or loss under the New Jersey Business
Corporation Act.
ARTICLE XI
(a) The Company reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights
conferred upon Shareholders herein are granted subject to this
reservation.
Notwithstanding any other provision of this Certificate of
Incorporation or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of
the holders of any particular class or series of the voting stock
required by law or this Certificate of Incorporation, the affirmative
vote of the holders of at least 75 percent of all of the then-
outstanding shares of the voting stock, voting together as a single
class, shall be required to alter, amend or repeal Article VI, VII,
VIII, IX, X or this Article XI, or any provision thereof, or any
provision of the By-Laws of the Company which is to the same effect
as the aforesaid Articles.
(b) Except as set forth in the final sentence of this subsection
(b), the By-Laws of the Company may be altered, amended or repealed
by the affirmative vote of a majority of the entire Board of
Directors then in office. The By-Laws of the Company may also be
altered, amended or repealed by the Shareholders, but only by an
affirmative vote of the holders of at least 75 percent of all the
then-outstanding shares of the voting stock, voting together as a
single class. Any By-Law may provide that it may only be altered,
amended or repealed by the affirmative vote of the holders of at
least 75 percent of all the then-outstanding shares of the voting
stock, voting together as a single class, in which event such By-Law
may only be altered, amended or repealed by such vote.
EXHIBIT C
NUI Holding Company
Incorporated Under the Laws of the
State of New Jersey
FORM OF
AMENDED AND RESTATED BY-LAWS
ARTICLE I
OFFICES
The principal office of the Company shall be located in the State of
New Jersey. The Board of Directors may change the location of the
principal office of the Company and may from time to time designate
other offices at such other places, either within or without the
State of New Jersey, as the business of the Company may require.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meeting: The Annual Meeting of Shareholders
for the election of Directors and the transaction of any other
business as may properly come before such meeting shall be held at
such place as shall be designated by the Board of Directors, on the
fourth Tuesday of January of each year at the hour of 10:30 A.M., or
on such other day at such time as shall be designated by the Board of
Directors. If said day be a legal holiday, said meeting shall be held
at the same hour on the next succeeding business day.
Section 2. Special Meetings: Special Meetings of the
Shareholders may be called only by the President of the Company or by
the Board of Directors or as otherwise required by law. Special
Meetings shall be held at such time and place as shall from time to
time be designated by the Board of Directors and stated in the notice
of such meeting. At a Special Meeting no business shall be transacted
and no corporate action shall be taken other than that stated in the
notice of the meeting.
Section 3. Notice of Meetings: Written notice of the place,
date and hour of any Shareholders' meeting, whether annual or special,
and the purpose or purposes for which the meeting is called shall be
given to each Shareholder entitled to vote thereat, by mailing the
same to the Shareholder at the address of the Shareholder that appears
upon the records of the Company not less than ten (10) nor more than
sixty (60) days prior to the date of such meeting. Notice of any
adjourned meeting need not be given other than by announcement at the
meeting so adjourned, unless otherwise ordered in connection with such
adjournment. Such further notice, if any, shall be given as may be
required by law.
Section 4. Waiver of Notice: A written waiver of notice signed
by the person entitled to notice, whether before or after the
meeting, shall be deemed equivalent to notice. Attendance of a
Shareholder at a meeting shall constitute a waiver of notice of such
meeting, except when a Shareholder attends a meeting and, prior to
the conclusion thereof, objects to the transaction of any business on
the grounds that proper notice of the meeting was not given.
Section 5. Quorum: Any number of Shareholders, together holding
at least a majority of the capital stock of the Company issued and
outstanding and entitled to vote, present in person or represented by
proxy at any meeting duly called, shall constitute a quorum for all
purposes at a meeting of Shareholders except as may otherwise be
provided by law.
Section 6. Adjournment of Meetings: If at the time for which a
meeting of Shareholders has been called less than a quorum is present,
the meeting may be adjourned to another time or place by a majority
vote of the Shareholders present in person or by proxy and entitled to
vote thereat, without notice other than by announcement at the meeting
except as may otherwise be required by law. At any adjourned meeting
at which a quorum shall be present, any business may be transacted
which might have been transacted at the meeting as originally called.
Section 7. Voting: Each Shareholder entitled to vote at a
meeting of the Shareholders shall be entitled to one vote for each
share of stock registered in such Shareholder's name on the books of
the Company on the date fixed as the record date for the determination
of its Shareholders entitled to vote. In accordance with the New
Jersey Business Corporation Act, each Shareholder entitled to vote at
a meeting of Shareholders may authorize another person or persons to
act for him by proxy, duly appointed by instrument in writing
subscribed by such Shareholder. Said proxy shall not be valid for
more than eleven (11) months unless a longer time is expressly
provided therein. At all meetings of Shareholders all matters shall
be determined by a majority vote of the Shareholders entitled to vote
thereat present in person or represented by proxy except as otherwise
provided by law, the Certificate of Incorporation or these By-Laws.
Section 8. Notice Of Shareholder Nominations And Proposed
Business:
(1) At any annual meeting of the Shareholders, (i) nominations
for the election of directors and (ii) business to be brought before
any such Shareholders' meeting may only be made or proposed (a)
pursuant to the Company's notice of meeting, (b) by or at the
direction of the Board of Directors or (c) by any Shareholder of the
Company who is a Shareholder of record at the time of giving of the
notice provided for in this By-law, who shall be entitled to vote at
such meeting and who complies with the notice procedures set forth in
this By-law.
(2) Any Shareholder may nominate one or more persons for
election as directors at a Shareholders' meeting or propose business
to be brought before a Shareholders' meeting, or both, pursuant to
clause (c) of paragraph 1 of this By-law, only if the Shareholder has
given timely notice thereof in proper written form to the Secretary of
the Company. To be timely, a Shareholder's notice must be delivered
to or mailed and received at the principal executive offices of the
Company not less than 90 days nor more than 120 days prior to the
Shareholders' meeting; provided, however, that if less than 100 days'
notice or other prior public disclosure of the date of the meeting is
given or made to the Shareholders, notice by the Shareholder to be
timely must be received no later than the close of business on the
10th day following the earlier of the day on which notice of the date
of the meeting was mailed or other public disclosure was made. To be
in proper written form a Shareholder's notice to the Secretary shall
set forth as to each matter the Shareholder proposes to bring before
the meeting:
(a) a brief description of the business proposed and/or persons
nominated, as applicable, and the reasons for proposing such business
or making such nomination;
(b) the name and address, as they appear on the Company's books,
of the Shareholder proposing such business or making such nomination,
and the name and address of the beneficial owner, if any, on whose
behalf the proposal is made;
(c) the class or series and number of shares of the Company
which are owned beneficially and of record by such Shareholder of
record and by the beneficial owner, if any, on whose behalf the
proposal is made;
(d) with respect to any nomination, (i) a description of all
arrangements and understandings between the Shareholder proposing such
nomination and each nominee and any other person or persons (naming
such person or persons) in connection with the nomination or
nominations are to be made, (ii) the name, age, business address and
residence address of such nominee, (iii) the class or series and
number of shares of capital stock of the Company owned beneficially
and of record by such nominee, (iv) the written consent of the
proposed nominee to being named in the solicitation material and to
serving as a director if elected and (v) a representation that such
Shareholder intends to appear in person or by proxy at the meeting to
nominate the persons named in the notice;
(e) with respect to any business to be proposed, (i) a
description of all arrangements or understandings between the
Shareholder proposing such business and any other person or persons
(naming such person or persons) in connection with the proposal of
such business by such Shareholder and any material interest of such
Shareholder in such business and (ii) a representation that such
Shareholder intends to appear in person or by proxy at the meeting to
bring such business before the meeting; and
(f) such other information regarding each nominee or matter of
business to be proposed as would be required to be included in
solicitations of proxies, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended.
(3) Notwithstanding anything in these By-laws to the contrary,
no business shall be conducted at any Shareholders' meeting and no
Shareholder may nominate any person for election at any Shareholders'
meeting except in accordance with the procedures set forth in this By-
law. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that any proposed business and/or
any proposed nomination for election as director was not properly
brought or made before the meeting or made in accordance with the
procedures prescribed by these By-laws, and if he should so determine,
he shall so declare to the meeting and any such proposed business or
proposed nomination for election as director not properly brought
before the meeting or made shall not be transacted or considered.
ARTICLE III
DIRECTORS
Section 1. Qualifications: Directors need not be Shareholders
and need not be citizens of the United States or residents of New
Jersey.
Section 2. Duties and Powers: The business and affairs of the
Company shall be managed by or under the direction of the Board of
Directors, and, unless the vote of a greater number is required by
law, the Certificate of Incorporation or these By-Laws, the vote of
the majority of the Directors present at a meeting shall be the act of
the Board of Directors in the transaction of business, provided a
quorum is present. The Directors may exercise all such powers of the
Company and do all such lawful acts and things as they may deem proper
and as are consistent with law, the Certificate of Incorporation and
these By-Laws.
Section 3. Election: Directors shall be elected by the
Shareholders at the Annual Meeting of Shareholders to hold office for
the term elected and until their respective successors are elected and
qualified or until their earlier resignation or removal. If the
election of Directors shall not be held on the day designated by or
pursuant to authority granted in these By-Laws, the Directors shall
cause the same to be held as soon thereafter as may be convenient.
Section 4. Resignation of Directors: Any Director may resign at
any time upon written notice to the Company. Such resignation shall
take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the Chairman of the Board, if
any, the Chief Executive Officer, if any, the President or the
Secretary. The acceptance of a resignation shall not be necessary to
make it effective, unless so specified therein.
Section 5. Meetings: The Board of Directors shall hold an
annual meeting for the purpose of organization and the transaction of
any business immediately after the Annual Meeting of the Shareholders,
provided a quorum is present. Other regular meetings may be held at
such times as may be determined from time to time by resolution of the
Board of Directors. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board, if any, the Chief
Executive Officer, if any, by the President or by a majority of the
Directors then in office, though less than a quorum of the Board of
Directors.
Section 6. Notice and Place of Meetings: Regular meetings of
the Board of Directors may be held at such time and place as shall be
designated by resolution of the Board of Directors. No notice need be
given of any regular meeting of the Board. Notice of any special
meeting specifying the time and place of such meeting and the business
to be transacted thereat shall be served upon each Director by mail at
his residence or usual place of business at least two (2) days before
the day on which such meeting is to be held, or sent to him at such
place by telegraph, cable, electronic communication or transmitted by
way of a guaranteed overnight courier service, or delivered personally
or by telephone not later than 24 hours prior to the time at which the
meeting is to be held. No notice of the annual meeting shall be
required if held immediately after the annual meeting of the
Shareholders and if a quorum is present. Notice of a meeting need not
be given to any Director who submits a signed waiver of notice before
or after the meeting, nor to any Director who attends the meeting
without protesting, prior to the conclusion thereof, the lack of
notice.
Section 7. Business Transacted at Meetings: Any business may be
transacted and any corporate action may be taken at any regular
meeting of the Board of Directors at which a quorum shall be present,
whether such business or proposed action be stated in the notice of
such meeting or not, unless special notice of such business or
proposed action shall be required by law.
Section 8. Quorum: A majority of the entire Board of Directors
then in office shall be necessary to constitute a quorum for the
transaction of business. If a quorum is not present at a meeting of
the Board of Directors, a majority of the Directors present may
adjourn the meeting to such time and place as they may determine
without notice other than announcement at the meeting until enough
Directors to constitute a quorum shall attend. When a quorum is once
present to organize a meeting, it shall not be broken by the
subsequent withdrawal of any Directors.
Section 9. Loans to and Guarantees for Directors: The
Corporation may lend money to, or guarantee any obligation of, or
otherwise assist, any Officer or other employee of the Corporation or
of any subsidiary who is also a Director of the Corporation whenever,
in the judgment of the Board of Directors, such loan, guarantee or
assistance may reasonably be expected to benefit the Corporation and
such loan, guarantee or other assistance is authorized by a majority
of the entire Board of Directors. The Director who is to be loaned
money, or whose obligation is to be guaranteed, or who is otherwise to
be assisted by the Corporation, shall abstain from voting on such
authorization.
Section 10. Action Without A Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if all members of the
Board or such committee, as the case may be, consent in writing to the
adoption of a resolution authorizing the action. Such resolutions and
the written consents thereto by the members of the Board or a
committee shall be filed with the minutes of the proceedings of the
Board or such committee as the case may be.
Section 11. Participation By Telephone: Any one or more members
of the Board or any committee thereof may participate in a meeting of
the Board or such committee by means of a conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a
meeting.
Section 12. Compensation: The Board of Directors may establish
by resolution reasonable compensation of all Directors for services to
the Company as Directors, including a fixed fee, if any, incurred in
attending each meeting. Nothing herein contained shall preclude any
Director from serving the Company in any other capacity, as an
officer, agent or otherwise, and receiving compensation therefor.
ARTICLE IV
COMMITTEES
Section 1. Executive Committee: The Board of Directors, by
resolution passed by a majority of the entire Board then in office,
may designate five (5) or more Directors to constitute an Executive
Committee to hold office at the pleasure of the Board, which Committee
shall, during the intervals between meetings of the Board of
Directors, have and exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Company, subject only to such restrictions or limitations as the Board
of Directors may from time to time specify, or as limited by the New
Jersey Business Corporation Act, and shall have power to authorize the
seal of the Company to be affixed to all instruments which may require
it. Any member of the Executive Committee may be removed at any time,
with or without cause, by a resolution of a majority of the entire
Board of Directors then in office. Any person ceasing to be a
Director shall ipso facto cease to be a member of the Executive
Committee. Any vacancy in the Executive Committee occurring from any
cause whatsoever may be filled from among the Directors by a
resolution of a majority of the entire Board of Directors then in
office.
Section 2. Other Committees: Other committees, whose members
are to be Directors, may be appointed by the Board of Directors, which
members shall hold office for such time and have such powers and
perform such duties as may from time to time be assigned to them by
the Board of Directors. Any member of such a committee may be removed
at any time, with or without cause, by a majority of the Board of
Directors then in office. Any vacancy in a committee occurring from
any cause whatsoever may be filled by a majority of the Board of
Directors then in office.
Section 3. Resignation: Any member of a committee may resign at
any time. Such resignation shall be made in writing and shall take
effect at the time specified therein, or, if no time be specified, at
the time of its receipt by the Chairman of the Board, if any, the
Chief Executive Officer, if any, the President or the Secretary. The
acceptance of a resignation shall not be necessary to make it
effective unless so specified therein.
Section 4. Quorum: A majority of the members of a committee
shall constitute a quorum. The act of a majority of the members of a
committee present at any meeting at which a quorum is present shall be
the act of such committee. The members of a committee shall act only
as a committee, and the individual members thereof shall have no
powers as such.
Section 5. Record of Proceedings: Each committee shall keep a
record of its acts and proceedings and shall report the same to the
Board of Directors at its next meeting following such Committee
meeting.
Section 6. Organization, Meetings. Notices: A committee may
hold its meetings at the principal office of the Company, or at any
other place upon which a majority of the committee may at any time
agree. Each committee may make such rules as it may deem expedient
for the regulation and carrying on of its meetings and proceedings.
Notice of a special meeting of such Committee may be given by the
Secretary or by the chairman of the Committee and shall be
sufficiently given if mailed to each member at his residence or usual
place of business at least five (5) days before the day on which the
meeting is to be held, or if sent to him at such place by telegraph,
cable, electronic communication or delivered personally or by
telephone not later than 24 hours prior to the time at which the
meeting is to be held.
Section 7. Compensation: The members of any committee shall be
entitled to such compensation as may be allowed them by resolution of
the Board of Directors.
ARTICLE V
OFFICERS
Section 1. Number: The Officers of the Company shall be a
President, a Secretary and a Treasurer and such other officers as may
be appointed in accordance with the provisions of Section 3 of this
Article V. The Board of Directors, in its discretion, may also elect
a Chairman of the Board of Directors or a Chief Executive Officer or
both.
Section 2. Election. Term of Office and Qualifications: The
Officers, except as provided in Section 3 of this Article V, shall be
elected annually by the Board of Directors immediately after the
Annual Meeting of Shareholders. Each such Officer shall, except as
herein otherwise provided, hold office until the election and
qualification of his successor or until his earlier resignation or
removal. Any two or more offices may be held by the same person,
except the offices of the President and Secretary.
Section 3. Other Officers: Other Officers, including, but not
limited to, one or more Vice-Chairmen, divisional Officers, Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant
Vice Presidents, Chief Financial Officer, Chief Operating Officer,
Chief Administrative Officer, Assistant Secretaries and Assistant
Treasurers, may from time to time be appointed by the Board of
Directors, which other officers shall have such powers and perform
such duties as may be assigned to them by the President unless
otherwise directed by the Board. All such Officers shall be corporate
Officers of the Company with the power to bind the Company by acts
within the scope of their authority, which authority shall include,
but not be limited to, the execution and deliverance of any contract,
conveyance or other instrument necessary in the ordinary course of
business.
Section 4. Removal of Officers: Any Officer of the Company may
be removed from office, with or without cause, by a vote of a majority
of the Board of Directors then in office. The removal of an Officer
shall be without prejudice to his contract rights, if any. Election
or appointment of an Officer shall not of itself create contract
rights.
Section 5. Resignation: Any Officer of the Company may resign
at any time. Such resignation shall be in writing and shall take
effect at the time specified therein, and if no time be specified, at
the time of its receipt by the Secretary. The acceptance of a
resignation shall not be necessary in order to make it effective,
unless so specified therein.
Section 6. Filling of Vacancies: A vacancy in any office shall
be filled by the Board of Directors.
Section 7. Compensation: The compensation of the Officers shall
be fixed by the Board of Directors, or by any committee or Officer
upon whom power in that regard may be conferred by the Board of
Directors.
Section 8. Chairman of the Board of Directors: The Chairman of
the Board of Directors, if one is elected, shall be a Director and
shall preside at all meetings of the Board of Directors and of the
Shareholders at which the Chairman shall be present. In the absence
of the Chairman of the Board, the Director or Officer designated by
the Chairman shall perform and carry out the functions of the Chairman
of the Board.
Section 9. President: The President shall, subject only to the
direction and control of the Board of Directors or the Executive
Committee, have responsibility for the general management of the
business affairs and property of the Company, and of its several
Officers, and shall, subject only as aforesaid, have and exercise all
such powers and discharge such duties as usually pertain to the office
of President. The President shall perform such duties as may be
assigned from time to time by the Board of Directors.
Section 10. Chief Executive Officer: The Chief Executive
Officer, if one is elected, shall have such duties and
responsibilities and shall report to such persons as the Board of
Directors shall determine from time to time.
Section 11. Secretary: The Secretary shall attend all meetings
of the Board of Directors and of the Shareholders and record all votes
and the minutes of all proceedings in a book to be kept for that
purpose, and shall perform like duties for any committee appointed by
the Board. The Secretary shall give or cause to be given notice of all
meetings of Shareholders and special meetings of the Board of
Directors and shall perform such other duties as may be prescribed by
the President or the Board of Directors. The Secretary shall keep in
safe custody the seal of the Company and affix it to any instrument
when so authorized by the Board of Directors. In the absence of a
Secretary, an Assistant Secretary may act in the Secretary's place.
Section 12. Treasurer: The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Company and shall deposit all monies and other valuable effects in the
name and to the credit of the Company in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse
the funds of the Company as may be ordered by the Board, taking proper
vouchers for such disbursements, and shall render to the President and
Directors at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Company. The Treasurer may be required to
give bond for the faithful discharge of his duties. In the absence of
a Treasurer, an Assistant Treasurer may act in his place. The
Treasurer shall perform such other duties as may be prescribed by the
President or the Board of Directors.
ARTICLE VI
CAPITAL STOCK
Section 1. Issue of Certificates of Stock: Certificates of
capital stock shall be in such form as shall be approved by the Board
of Directors. The Board of Directors may also provide that some or
all of the shares of any class or series shall be represented by
uncertificated shares. Certificated shares shall be numbered in the
order of their issue, and shall be signed, either manually or by
facsimile signature, by either the Chairman of the Board or the
President or the Secretary and the seal of the Company or a facsimile
thereof shall be impressed, affixed or reproduced thereon. In case
any Officer or Officers who shall have signed any such certificate or
certificates shall cease to be such Officer or Officers of the
Company, whether because of death, resignation or otherwise, before
such certificate or certificates shall have been delivered by the
Company, such certificate or certificates may nevertheless be adopted
by the Company and be issued and delivered as though the person or
persons who signed such certificate or certificates have not ceased to
be such Officer or Officers of the Company.
Section 2. Registration and Transfer of Shares: The name of
each person owning a share of the capital stock of the Company shall
be entered on the books of the Company together with the number of
shares held by such person, the numbers of the certificates covering
such shares and the dates of issue of such certificates. The shares
of stock of the Company shall be transferable on the books of the
Company by the holders thereof in person, or by their duly authorized
attorneys or legal representatives, on surrender and cancellation of
certificates for a like number of shares, accompanied by an assignment
of power of transfer endorsed thereon or attached thereto, duly
executed, and with such proof of the authenticity of the signature as
the Company or its Agents may reasonably require. A record shall be
made of each transfer.
The Board of Directors may make other and further rules and
regulations concerning the transfer and registration of certificates
of stock.
Section 3. Lost, Destroyed and Mutilated Certificates: The
holder of any stock of the Company shall immediately notify the
Company of any loss, theft, destruction or mutilation of the
certificates thereof. The Company may issue a new certificate of
stock in the place of any certificate theretofore issued by it alleged
to have been lost, stolen or destroyed, and the Board of Directors or
its agent may, in its discretion, require the owner of the lost,
stolen or destroyed certificate, or his legal representatives, to give
the Company a bond, in such sum not exceeding double the value of the
stock and with such surety or sureties as they may require, to
indemnify it against any claim that may be made against it in
connection with the issue of such new certificate.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year: The fiscal year of the Company shall
commence on the first day of October and end on the last day of
September.
Section 2. Corporate Seal: The corporate seal shall be in such
form as approved by the Board of Directors and may be altered at its
pleasure. The corporate seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.
Section 3. Notices: Except as otherwise expressly provided, any
notice required by these By-Laws to be given shall be sufficient if
given by depositing the same in a post office or letter box in a
sealed wrapper with first-class postage prepaid thereon and addressed
to the person entitled thereto at his address, as the same appears
upon the books of the Company, or by electronically communicating the
notice to such person at such address or by transmitting the same by
way of a guaranteed overnight courier service; and such notice shall
be deemed to be given at the time it is mailed, electronically
communicated or so transmitted.
Section 4. Contracts, Checks, Drafts: The Board of Directors,
except as may otherwise be required by law, may authorize any Officer
or Officers, Agent or Agents, in the name of and on behalf of the
Company to enter into any contract or execute or deliver any
instrument. All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of
the Company, shall be signed by such Officer or Officers, Agent or
Agents of the Company, and in such manner as shall be designated from
time to time by resolution of the Board of Directors.
Section 5. Deposits: All funds of the Company shall be
deposited from time to time to the credit of the Company in such bank
or banks, trust companies or other depositories as the Board of
Directors may select, and, for the purpose of such deposit, checks,
drafts, warrants and other orders for the payment of money which are
payable to the order of the Company, may be endorsed for deposit,
assigned and delivered by any Officer of the Company, or by such
Agents of the Company as the Board of Directors, the Chairman of the
Board, if any, the Chief Executive Officer, if any, or the President
may authorize for that purpose.
Section 6. Voting Stock of Other Companies: Except as otherwise
ordered by the Board of Directors or the Executive Committee, the
Chairman of the Board, if any, the Chief Executive Officer, if any, or
the President shall have full power and authority on behalf of the
Company to attend and to act and to vote at any meeting of the
Shareholders of any corporation of which the Company is a shareholder
and to execute a proxy to any other person to represent the Company at
any such meeting, and at any such meeting the Chairman of the Board,
if any, the Chief Executive Officer, if any, or the President or the
holder of any such proxy, as the case may be, shall possess and may
exercise any and all rights and powers incident to ownership of such
stock and which, as owner thereof, the Company might have possessed
and exercised if present. The Board of Directors or the Executive
Committee may from time to time confer like powers upon any other
person or persons.
ARTICLE VIII
AMENDMENTS
Except as set forth in the final sentence of this ARTICLE VIII,
these By-Laws may be altered, amended or repealed by the affirmative
vote of a majority of the entire Board of Directors then in office.
These By-Laws may also be altered, amended or repealed by the
Shareholders, but only by an affirmative vote of the holders of at
least 75 percent of all the then-outstanding shares of the voting
stock, voting together as a single class. Any By-Law may provide that
it may only be altered, amended or repealed by the affirmative vote of
the holders of at least 75 percent of all the then-outstanding shares
of the voting stock, voting together as a single class, in which event
such By-Law may only be altered, amended or repealed by such vote.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(i) Limitation of Liability of Directors and Officers. Section
14A:2-7(3) of the New Jersey Business Corporation Act permits a
corporation to provide in its Certificate of Incorporation that a
director or officer shall not be personally liable to the corporation
or its shareholders for breach of any duty owed to the corporation or
its shareholders, except that such provision shall not relieve a
director or officer from liability for any breach of duty based upon
an act or omission (a) in breach of such persons' duty of loyalty to
the corporation or its shareholders, (b) not in good faith or
involving a knowing violation of law or (c) resulting in receipt by
such person of any improper personal benefits. New NUI's certificate
of incorporation includes limitations on the liability of officers and
directors to the full extent permitted by New Jersey law.
(ii) Indemnification of Directors, Officers, Employees and
Agents. Under Article X (b)(1) of its certificate of incorporation,
New NUI must, to the fullest extent permitted by law, indemnify its
directors, officers, employees and agents. Section 14A:3-5 of the New
Jersey Business Corporation Act provides that a corporation may
indemnify its directors, officers, employees and agents against
judgments, fines, penalties, amounts paid in settlement, and expenses,
including attorney's fees, resulting from various types of legal
actions or proceedings if the actions of the party being indemnified
meet the standards of conduct specified therein. Under Section 14A:3-
5(5) of the New Jersey Business Corporation Act, determinations
concerning whether or not the applicable standard of conduct has been
met can be made by (a) a disinterested majority of the board of
directors, (b) independent legal counsel, or (c) an affirmative vote
of a majority of shares entitled to vote thereon, if a resolution of
the board of directors or of the Shareholders so directs. No
indemnification is permitted to be made to or on behalf of a corporate
director, officer, employee or agent if a judgment or other final
adjudication adverse to such person establishes that his acts or
omissions (a) were in breach of his duty of loyalty in the corporation
or its shareholders, (b) were not in good faith or involved a knowing
violation of law or (c) resulted in receipt by such person of an
improper personal benefit.
(iii) Insurance. Under Article X (b)(4) of its certificate of
incorporation, New NUI's directors and officers may be insured against
losses arising from any claim against them such as wrongful acts or
omissions, subject to certain limitations.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith:
2 Form of Agreement and Plan of Exchange (Appendix I to the
Proxy Statement and Prospectus).
3(a) Form of Amended and Restated Certificate of Incorporation
of NUI Holding Co. (Appendix II to the Proxy Statement
and Prospectus).
3(b) Form of Amended and Restated By-laws of NUI Holding Co.
(Appendix III to the Proxy Statement and Prospectus).
3(c) Amended and Restated Certificate of Incorporation of NUI
Corporation ("NUI") (incorporated by reference to Exhibit
A to NUI's Proxy Statement (File No. 8353), dated
February 8, 1991, filed February 12, 1991).
3(d) Certificate of Amendment of Restated Certificate of
Incorporation of NUI Corporation (incorporated by
reference to Exhibit 3(ii) of NUI's Annual Report on Form
10-K for the fiscal year ended September 30, 1997 (File
No. 8353), dated September 30, 1997).
3(e) By-laws of NUI, as amended and restated (incorporated by
reference to Exhibit 3(ii) of NUI's Annual Report on Form
10-K for the year ended September 30, 1997 (File No.
8353, dated September 30, 1997).
5 Opinion of James R. Van Horn, Esq.
8 Tax opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
23(a) Consent of James R. Van Horn, Esq. (included as part of
Exhibit 5)
23(b) Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
(included as part of Exhibit 8).
23(c) Consent of Arthur Andersen LLP.
24 Power of Attorney.
99 Form of Proxy.
(b) The financial statement schedules are incorporated by
reference from NUI's Annual Report on Form 10-K for the
year ended September 30, 1999.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;"
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post- effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) If the registrant is a foreign private issuer, to
file a post-effective amendment to the registration statement
to include any financial statements required by Rule 3-19 of
this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act
need not be furnished, provided, that the registrant includes
in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as
the date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form F-
3, a post-effective amendment need not be filed to include
financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such
financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
(5) That, for purposes of determining any liability under
the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(6) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a
part of this registration statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes such reoffering prospectus will
contain the information called for by the applicable
registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information
called for by the other Items of the applicable form.
(7) That every prospectus (i) that is filed pursuant to
paragraph (2) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Securities
Act and is used in connection with an offering of securities
subject to Rule 415, will be filed as part of an amendment to
the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining
any liability under the Securities Act, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(8) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day
of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means.
This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
(9) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and
included in the registration statement when it became
effective.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in
Item 20 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Bedminster, State of New
Jersey, on February 9, 2000.
NUI HOLDING COMPANY
By: /s/James R. Van Horn
James R. Van Horn
Vice President, General Counsel and
Corporate Secretary
Pursuant to the requirements of the Securities Act, this
registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Capacity Date
*/s/ John Kean, Jr.
John Kean, Jr. President, Chief February 9, 2000
Executive Officer
and Director
(Principal
Executive Officer)
*/s/ John Kean
John Kean Chairman and February 9, 2000
Director
*/s/ A. Mark Abramovic
A. Mark Abramovic Senior Vice February 9, 2000
President, Chief
Operating Officer,
Chief Financial
Officer and
Director
(Principal
Financial Officer
and Chief
Accounting
Officer)
* James R. Van Horn, by signing his name hereto, does sign
this document on behalf of each of the persons indicated above
pursuant to powers of attorney duly executed by such persons
and filed as exhibits herewith.
/s/ James R. Van Horn
James R. Van Horn,
Attorney-in-Fact
Exhibit Index
Exhibit
Number
2 Form of Agreement and Plan of Exchange
(Appendix I to the Proxy Statement and
Prospectus).
3(a) Form of Amended and Restated Certificate of
Incorporation of NUI Holding Co. (Appendix II
to the Proxy Statement and Prospectus).
3(b) Form of Amended and Restated By-laws of NUI
Holding Co. (Appendix III to the Proxy
Statement and Prospectus).
3(c) Amended and Restated Certificate of
Incorporation of NUI Corporation ("NUI")
(incorporated by reference to Exhibit A to
NUI's Proxy Statement (File No. 8353), dated
February 8, 1991, filed February 12, 1991).
3(d) Certificate of Amendment of Restated
Certificate of Incorporation of NUI Corporation
(incorporated by reference to Exhibit 3(ii) of
NUI's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997 (File No. 8353),
dated September 30, 1997).
3(e) By-laws of NUI, as amended and restated
(incorporated by reference to Exhibit 3(ii) of
NUI's Annual Report on Form 10-K for the year
ended September 30, 1997 (File No. 8353, dated
September 30, 1997).
5 Opinion of James R. Van Horn, Esq.
8 Tax opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P.
23(a) Consent of James R. Van Horn, Esq. (included as
part of Exhibit 5)
23(b) Consent of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. (included as part of Exhibit 8).
23(c) Consent of Arthur Andersen LLP.
24 Power of Attorney.
99 Form of Proxy.
Exhibit 5
February 9, 2000
NUI Holding Company
550 Route 202-206, Box 760
Bedminster, New Jersey 07921-0760
Ladies and Gentlemen:
I have acted as counsel to NUI Holding Company, a New
Jersey corporation (the "Company"), in connection with the
proposed formation of a holding company structure for NUI
Corporation, a New Jersey corporation ("NUI"), through the
exchange (the "Exchange") of the shares of NUI for those of the
Company, pursuant to an Agreement and Plan of Exchange (the
"Exchange Agreement").
This opinion is being rendered in connection with the
filing by the Company of a Registration Statement on Form S-4
(the "Registration Statement") relating to the registration under
the Securities Act of 1933, as amended (the "Act"), of up to
12,918,121 shares of Common Stock, $0.00 par value, of the
Company (the "Company Common Stock") to be issued in the
Exchange.
For purposes of this opinion, I have examined originals
or copies, certified or otherwise identified to my satisfaction,
of (i) the Exchange Agreement; (ii) the Registration Statement;
(iii) the Articles of Incorporation of the Company, as in effect
on the date hereof and as to be amended immediately prior to
consummation of the Exchange; (iv) the By-Laws of the Company to
be in effect immediately prior to consummation of the Exchange;
(v) resolutions adopted by the Board of Directors of the Company
relating to the Exchange and the issuance and delivery of the
Company Common Stock in connection therewith; and (vi) such other
documents, certificates and other records as I have deemed
necessary or appropriate.
Based upon the foregoing, and subject to the
qualifications hereinafter expressed, I am of the opinion that:
(1) The Company is validly existing as a corporation
under the laws of the State of New Jersey; and
(2) The Company Common Stock will be validly issued,
fully paid and non-assessable when (i) the Registration
Statement shall have become effective under the Act; (ii)
NUI shareholders shall have approved the Exchange; (iii) NUI
shall have received all necessary regulatory approvals
required to consummate the Exchange; and (iv) the Exchange
shall have been consummated in accordance with the terms of
the Exchange Agreement and the laws of the State of New
Jersey.
I am a member of the New Jersey Bar and do not hold
myself out as an expert on the laws of any other State. Except
as set forth in paragraph 2(iii) above, my opinions expressed
above are limited to the laws of the State of New Jersey and the
Federal laws of the United States.
I hereby consent to the filing of this opinion as
Exhibit 5(a) to the Registration Statement and to the references
made to me under the caption "PROPOSAL NO. 1: APPROVAL OF
EXCHANGE AGREEMENT -- Legal Opinion" in said Registration
Statement and the Proxy Statement and Prospectus constituting a
part thereof, and any amendments thereof.
Very truly yours,
/s/James R. Van Horn
James R. Van Horn
Exhibit 8
New York, New York
February 9, 2000
NUI Corporation
550 Route 202-206
Box 760
Bedminster, New Jersey 07921-0760
Ladies and Gentlemen:
You have requested our opinion regarding certain U.S.
federal income tax issues related to the transactions described
in the Proxy Statement/Prospectus of NUI Corporation, a New
Jersey Corporation ("NUI") and NUI Holding Company, a New Jersey
corporation ("Holdco"), (the "Proxy Statement/Prospectus")
including the form of Agreement and Plan of Exchange between NUI
and Holdco attached as an exhibit thereto (the "Exchange
Agreement"). Except as otherwise provided, capitalized terms
used in this letter have the meanings set forth in the Exchange
Agreement. All section references, unless otherwise indicated,
are to the Internal Revenue Code of 1986, as amended (the
"Code").
In rendering our opinion to you, we have relied, with
your consent, upon representations made by NUI and Holdco to us
in their letters dated today (the "Representation Letters"), the
representations set forth in the Exchange Agreement and upon the
facts set forth in the Proxy Statement/Prospectus included in the
Registration Statement of Holdco on Form S-4 (the "Registration
Statement") and accompanying exhibits to be filed in connection
with the Exchange. We have made no independent investigation
with regard to statements made in the Representation Letters, the
representations set forth in Exchange Agreement or the facts set
forth in the Proxy Statement/Prospectus and the Registration
Statement. In rendering our opinion to you, we have assumed,
with your consent, that the preceding statements, representations
and facts are true, complete and accurate as of the date hereof
and will be true, complete and accurate as of the Effective Time.
We have also assumed, with your consent, the genuineness of all
signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as certified or photostatic copies (and the authenticity of the
originals of such documents) and that the transactions described
in the Exchange Agreement will be carried out in accordance with
their terms.
In rendering our opinion to you, we have considered the
applicable provisions of the Code, Treasury Regulations
promulgated thereunder, pertinent judicial authorities,
interpretive rulings of the Internal Revenue Service (the
"Service") and such other authorities as we have considered
relevant. It should be noted that statutes, regulations,
judicial decisions and administrative interpretations are subject
to change at any time and in certain circumstances with
retroactive effect.
Based upon and subject to the facts, statements,
representations, assumptions and limitations described herein,
our examination of the Exchange Agreement, the Proxy
Statement/Prospectus, the Registration Statement and the relevant
legal authorities, we are of the opinion that for U.S. federal
income tax purposes the Exchange will be treated as a transaction
described in Section 351 of the Code.
Our opinion is limited to the U.S. federal income tax
matters addressed, and no opinion is rendered with respect to the
tax consequences of the transactions described in the Exchange
Agreement or the Registration Statement under state, local or
foreign law or any other issue, including any other tax issues
with respect to the transactions described in the Exchange
Agreement or the Registration Statement.
In addition, our opinion is based upon U.S. federal
income tax law currently in effect, including the Code and
Treasury Regulations promulgated thereunder, administrative
pronouncements by the Service, judicial decisions and such other
legal authorities as we have deemed necessary for purposes of
this opinion, as each exists as of the date of this letter.
Existing federal income tax law is subject to change on a
prospective or retroactive basis. If any fact, statement,
representation or assumption described herein or contained in the
Exchange Agreement, the Proxy Statement/Prospectus, the
Registration Statement or the Representation Letters is not true,
correct and complete, or in the event of a change in law, our
opinion shall be void and of no force or effect. You should be
aware that although this letter represents our opinion concerning
the matter specifically discussed, it is not binding on the
courts or on any administrative agency, including the Service,
and a court or agency may act or hold to the contrary. We
undertake no obligation to update this letter or our opinion at
any time. Our opinion is provided solely to you as a legal
opinion only, and not as a guaranty or warranty, and is limited
to the specific transactions, documents and matters described
above. No opinion may be implied or inferred beyond that which
is expressly stated in this letter.
We are providing this opinion solely to you in
connection with the filling of the Proxy Statement/Prospectus.
Our opinion may not be relied upon by any person or entity other
than you and no person may be subrogated to any rights you have
in connection with our opinion. You may rely upon and refer to
the foregoing opinion in the Proxy Statement-Prospectus and we
hereby consent to the filling of this opinion as an exhibit to
the Proxy Statement-Prospectus and the reference to the above
mentioned opinion under "PROPOSAL NO. 1: APPROVAL OF EXCHANGE
AGREEMENT - Material United States Federal Income Tax
Considerations." In giving such consent, we do not hereby admit
that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended.
Without our prior written consent, this opinion may not be
furnished to any other person or entity and may not be quoted in
whole or in part or otherwise referred to in (or be the basis
for) any report or document furnished to any person or entity,
except in connection with the inspection of the addressee's files
by internal company or governmental examiners or auditors.
Very truly yours,
/s/ Leboeuf, Lamb, Greene & MacRae, L.L.P.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
Exhibit 23(c)
Consent of Independent Accountants
We consent to the incorporation by reference in this
Registration Statement of NUI Holding Company on Form S-4 of our
report dated November 9, 1999, on our audits of the consolidated
financial statements and financial statement schedule of NUI
Corporation and subsidiaries as of September 30, 1999 and 1998,
and for each of the three years in the period ended September 30,
1999. We also consent to the reference of our firm under the
caption "Experts."
/s/ Arthur Andersen, LLP
Arthur Andersen, LLP
New York, NY
February 9, 2000
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below, in his or her capacity as a
Director or Officer of NUI Holding Company, hereby
constitutes and appoints James R. Van Horn his or her true
and lawful attorney-in-fact and agent, with full power of
substitution, for him or her and his or her name, place and
stead, and in any and all capacities, to execute a Joint
Proxy Statement and Registration Statement on Form S-4 under
the Securities Act of 1933 concerning the restructuring of
NUI Corporation and the formation of a holding company
through an Agreement and Plan of Share Exchange, and the
issuance of holding company stock, and to file the same,
with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, and
to execute and file any and all amendments thereto
(including post-effective amendments), granting unto said
attorney-in-fact and agent full power and authority to do
each and every act requisite and necessary to be done, as
fully and to all intents and purposes as he or she might do
in person, and hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be
done by virtue thereof.
Dated: February 9, 2000
/s/ John Kean, Jr.
John Kean, Jr.
President, Chief Executive Officer and
Director
(Principal Executive Officer)
/s/ John Kean
John Kean
Chairman and Director
/s/ A. Mark Abramovic
A. Mark Abramovic
Senior Vice President, Chief Operating
Officer, Chief Financial
Officer and Director (Principal
Financial Officer and Chief
Accounting Officer)
Exhibit 99
NUI CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(Common Shareholders)
The undersigned shareholder hereby appoints John Kean, John
Kean, Jr., and James R. Van Horn, or any one of them, each with
power of substitution, proxies, to vote all shares that the
undersigned is entitled to vote at the Annual Meeting of the
Shareholders of NUI Corporation to be held on March 27, 2000 at
10:00 a.m. EDT at the Hilton Cocoa Beach Oceanfront Hotel, 1550
North Atlantic Avenue, Cocoa Beach, Florida, and at any
adjournments, on the proposals described in the accompanying
Proxy Statement as marked on the reverse side, and in their
discretion on any other matters that may properly come before
the meeting or any adjournment. If this proxy is properly
signed, your shares will be voted as you directed by marking the
boxes on the reverse side. IF NO DIRECTION IS GIVEN, YOUR
SHARES WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 ON THE REVERSE
SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] Please mark votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF EXCHANGE
RELATING TO THE HOLDING COMPANY RESTRUCTURING OF NUI
CORPORATION.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS
Nominees: James J. Forese
R.Van Whisnand
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[ ] WITHHELD FOR (write that nominee's name in the
space provided below)
3. RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN
LLP, AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT [ ] THE MEETING [ ]
The shareholder hereby
acknowledges receipt of the Notice
of the Annual Meeting and the
Proxy Statement/Prospectus
attached thereto.
Please date, sign exactly as
name(s) appear at left, and return
promptly in enclosed envelope. If
signing for a corporation or
partnership, sign in that name and
indicate your title. If signing
as attorney, executor, guardian,
trustee or custodian, please add
your title.
Signature: ____________________ Date: ___________
