SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY
STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[x] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-(c) or Rule 14a-12
NEW JERSEY RESOURCES CORPORATION
(Name of Registrant as Specified in its Charter)
NEW JERSEY RESOURCES CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14A-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregrate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form of schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
NEW JERSEY RESOURCES CORPORATION
1415 Wyckoff Road
Wall, New Jersey 07719
-------------------
PROXY STATEMENT AND
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 14, 1996
-------------------
The Annual Meeting (the "Meeting") of Stockholders of New Jersey Resources
Corporation (the "Company") will be held at 10:30 a.m., Wednesday, February 14,
1996, at the Robert B. Meyner Reception Center at the Garden State Arts Center,
Exit 116 on the Garden State Parkway, Holmdel, New Jersey 07733, for the
following purposes:
1. To elect four directors to the Board of Directors.
2. To amend the Company's Executive Long-Term Incentive Compensation Plan
to include all full-time employees as participants eligible to receive
awards under the plan.
3. To adopt a proposal to amend the Company's Restated Certificate of
Incorporation to increase the authorized common stock, par value $2.50
per share, to 50,000,000 shares from 25,000,000 shares.
4. To adopt a proposal to amend the Company's Restated Certificate of
Incorporation to increase the authorized preferred stock to 400,000
shares from 200,000 shares.
5. To adopt a proposal to amend the Company's Restated Certificate of
Incorporation to establish the minimum and maximum permissible number
of directors.
6. To approve the action of the Board of Directors in retaining Deloitte
& Touche LLP as auditors for the fiscal year ending September 30,
1996.
7. To transact any other business that may properly be brought before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on December 27,
1995, as the record date for the determination of the stockholders entitled to
notice of and to vote at the Meeting. Accordingly, only stockholders of record
at the close of business on that date will be entitled to vote at the Meeting.
A copy of the Company's Annual Report for 1995 has either been mailed to
all stockholders or is being mailed concurrently with this proxy material.
A cordial invitation is extended to you to attend the Meeting. If you do
not expect to attend the Meeting, please sign, date and return the enclosed
proxy promptly to the Secretary in the enclosed envelope.
OLETA J. HARDEN
Secretary
Wall, New Jersey
January 3, 1996
<PAGE>
PROXY STATEMENT
---------------
NEW JERSEY RESOURCES CORPORATION
1415 Wyckoff Road
Wall, New Jersey 07719
---------------
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 14, 1996
This proxy statement (the "Statement") sets forth certain information with
respect to the accompanying proxy to be used at the Annual Meeting of
Stockholders of New Jersey Resources Corporation (the "Company"), or at any
adjournment or adjournments thereof (the "Meeting"), for the purposes set forth
in the accompanying Notice of Annual Meeting. The Board of Directors of the
Company (the "Board") solicits this proxy and urges you to sign, date, and
return it immediately to the Secretary of the Company. The prompt cooperation of
the stockholders is necessary in order to ensure a quorum and to avoid
unnecessary expense and delay.
The proxies hereby solicited vest in the proxy holder voting rights with
respect to the election of directors (unless the stockholder marks the proxy so
as to withhold that authority) and on all other matters to be voted upon at the
Meeting. The shares represented by each duly executed proxy will be voted and,
where a choice is specified by the stockholder on the proxy, the proxy will be
voted in accordance with the specification so made.
The proxy is revocable on written instructions or by a later dated proxy,
signed in the same manner as the proxy, and received by the Secretary of the
Company at any time at or before the balloting on the matter with respect to
which such proxy is to be exercised. If you attend the Meeting you may, if you
wish, revoke your proxy by voting in person.
This proxy statement and the accompanying proxy materials are being mailed
to stockholders on or about January 3, 1996.
<PAGE>
PLACE OF ANNUAL MEETING
The Board has designated the Robert B. Meyner Reception Center at the
Garden State Arts Center, Exit 116 on the Garden State Parkway, Holmdel, New
Jersey 07733, as the place of the Meeting. The Meeting will be called to order
at 10:30 a.m., local time, on Wednesday, February 14, 1996.
VOTING OF SECURITIES AND STOCKHOLDER INFORMATION
Only holders of record of the Company's outstanding common stock, par value
$2.50 per share (the "Common Stock"), at the close of business on December 27,
1995, are entitled to notice of and to vote at the Meeting. At the close of
business on December 27, 1995, there were 17,928,239 outstanding shares of
Common Stock. Each share is entitled to one vote. No person to the knowledge of
the Company held beneficially 5% or more of the Company's Common Stock as of
December 27, 1995.
The following table sets forth, as of December 27, 1995, the beneficial
ownership of equity securities of the Company of each of the directors and each
of the executive officers of the Company listed in the Summary Compensation
Table below, and of all directors and executive officers of the Company as a
group. The shares owned by all such persons as a group constitute less than 1%
of the total shares outstanding.
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF
NAME SECURITY BENEFICIAL OWNERSHIP (1) (2)
---- -------- ----------------------------
<S> <C> <C>
Roger E. Birk............................... Common Stock 16,200 shares - Direct
Bruce G. Coe................................ Common Stock 5,200 shares - Direct
Francis X. Colford.......................... Common Stock 8,450 shares - Direct
592 shares - Indirect
Leonard S. Coleman.......................... Common Stock 200 shares - Direct
Laurence M. Downes.......................... Common Stock 6,050 shares - Direct
100 shares - Indirect
Gary A. Edinger............................. Common Stock 5,204 shares - Direct
17 shares - Indirect
Joe B. Foster............................... Common Stock 3,206 shares - Direct
Hazel F. Gluck.............................. Common Stock 200 shares - Direct
Michael J. Gluckman......................... Common Stock 7,607 shares - Direct
Warren R. Haas.............................. Common Stock 6,908 shares - Direct
Oleta J. Harden............................. Common Stock 6,911 shares - Direct
59 shares - Indirect
Lester D. Johnson........................... Common Stock 0 shares - Direct
Dorothy K. Light............................ Common Stock 4,051 shares - Direct
33 shares - Indirect
Donald E. O'Neill........................... Common Stock 4,268 shares - Direct
Richard S. Sambol........................... Common Stock 34,480 shares - Direct
7,051 shares - Indirect(3)
Charles G. Stalon........................... Common Stock 3,067 shares - Direct
Thomas B. Toohey............................ Common Stock 6,942 shares - Direct
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF
NAME SECURITY BENEFICIAL OWNERSHIP (1) (2)
---- -------- ----------------------------
<S> <C> <C>
John J. Unkles, Jr.......................... Common Stock 6,210 shares - Direct
All Directors and Executive Officers as Common Stock 125,154 shares - Direct
a Group..................................... 7,852 shares - Indirect
</TABLE>
- - ----------
(1) The number of shares owned and the nature of such ownership, not being
within the knowledge of the Company, have been furnished by each
individual.
(2) Includes shares subject to currently exercisable options and to options
exercisable within the next 60 days as follows: Mr. Birk - 1,000 shares;
Mr. Coe - 1,000 shares; Mr. Colford - 2,944 shares; Mr. Downes - 3,034
shares; Mr. Edinger - 1,862 shares; Mr. Foster - 1,000 shares; Dr. Gluckman
- 5,937 shares, Mr. Haas - 1,000 shares; Mrs. Harden - 2,820 shares; Mrs.
Light - 1,000 shares; Mr. O'Neill - 1,000 shares; Mr. Sambol - 1,000
shares; Mr. Stalon - 1,000 shares; Mr. Unkles - 1,000 shares; and all
directors and executive officers as a group - 25,597 shares.
(3) These shares are owned by Sambol Construction Company.
ELECTION OF DIRECTORS
[Item (1) on Proxy Card]
Item 1
Election of Directors
The Board of Directors currently consists of thirteen members divided into
three classes with overlapping three-year terms. Mr. Birk has chosen not to
stand for re-election and is not being replaced at this time; therefore,
subsequent to the Meeting and until such time as such vacancy is filled, the
Board of Directors will consist of twelve members.
Four individuals have been nominated for election as directors at the
Meeting, one to serve for a one-year term expiring in 1997 and three to serve
for three-year terms expiring in 1999, until their respective successors are
elected and have qualified. With the exception of Mr. Johnson, each of the
nominees is now serving as a director of the Company. Unless otherwise indicated
on a proxy, the proxy holders intend to vote the shares it represents for all of
the nominees for election as directors.
The affirmative vote of a plurality of the shares of the Company's Common
Stock cast at the Meeting, by the stockholders present in person or represented
by proxy, is required for the election of directors. Abstentions, broker
non-votes and withheld votes will not be included in the total number of votes
cast and therefore will not affect the vote for election of directors.
3
<PAGE>
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of the nominees listed below. While it
is not anticipated that any of the nominees will be unable to serve, if any
should be unable to serve, the proxy holder reserve the right to substitute any
other person.
Nominee for Election as
Director with Term Expiring in 1997
Business Experience
Name and Period During Past Five Years
Served as Director Age and Other Affiliations
- - ------------------ --- ----------------------
Richard S. Sambol 69 President, Sambol Construction Corp. for
Director since 1990 more than the last five years; Trustee,
Monmouth College.
Nominees for Election as
Directors with Terms Expiring in 1999
Leonard S. Coleman 46 President, National League of
Director since Sept. 1995 Professional Major League Baseball Clubs
since March 1994; Executive Director,
Market Development, Major League Baseball
from December 1991 to March 1994; Vice
President, Investment Banking, Kidder
Peabody from 1988 to 1991; Director,
Beneficial Corp., and Omnicom Group,
Inc., an advertising holding company.
Lester D. Johnson 64 Retired. Formerly Director from 1992
through 1995, Vice Chairman and Chief
Financial Officer from January 1995 to
December 1995, Executive Vice President
and Chief Financial Officer from March
1992 to December 1994, and Senior Vice
President and Chief Financial Officer from
1986 to 1992, of Consolidated Natural Gas
Company.
4
<PAGE>
Dorothy K. Light 58 Retired. Formerly Corporate Vice
Director since 1990 President and Secretary from June 1990 to
July 1995, The Prudential Insurance
Company of America; Chairperson, the
Prudential Foundation; Former Trustee,
New Jersey Center for the Analysis of
Public Issues; Former Member, New Jersey
Governor's Economic Master Plan
Commission.
Directors with Terms Expiring in 1997
Business Experience
Name and Period During Past Five Years
Served as Director Age and Other Affiliations
- - ------------------ --- ----------------------
Bruce G. Coe 65 Chairman of the Board of Directors of the
Director since 1984 Company since April 1995; President, New
Jersey Business & Industry Association
since 1982; Director, New Jersey
Manufacturers Insurance Company, and Core
States New Jersey National Bank.
Hazel F. Gluck 61 Partner and President, Policy Management
Director since July 1995 & Communications, Inc. since April 1994
and Founder and President, Public Policy
Advisors, Inc. from July 1989 to March
1994, both of which are consulting and
public relations firms; member, Board of
Trustees, Monmouth University and St.
Francis Medical Center College.
Warren R. Haas 68 Retired. Formerly Vice President, Merrill
Director since 1987 Lynch Specialists, Inc. (stock exchange
specialists) and Partner, Tompane & Co.
prior thereto for more than five years;
Member, New York Stock Exchange and
American Arbitration Association;
Trustee, St. Clare's/Riverside Medical
5
<PAGE>
Center; Director, Fisher Armed Forces
Foundation, Marine Corps. Assoc., Inc.;
Arbitrator, New York Stock Exchange,
President, Marine Corps Law Enforcement
Foundation, and Trustee, Intrepid Founda-
tion.
Donald E. O'Neill 69 Retired. Formerly Chairman, Inter-
Director since 1982 national, of Warner Lambert Company (a
health care and consumer products
company) from October 1988 to March 1991
and Executive Vice President from April
1986 to March 1991; Director, Alliance
Pharmaceutical Corp., Scios/Nova Corp.,
Immunogen (a bio-technology company),
Cytogen (a bio-technology company),
Targeted Genetics (a genetics engineering
firm), MDL Information Systems, Inc.,
Alexander Consulting Company (management
and compensation consultants) and Fuisz
Technologies (a pharmaceutical-related)
company.
Directors with Terms Expiring in 1998
Business Experience
Name and Period During Past Five Years
Served as Director Age and Other Affiliations
- - ------------------ --- ----------------------
Laurence M. Downes 38 President and Chief Executive Officer of
Director since July 1995 the Company since July 1995; employed by
the Company since 1985 including Senior
Vice President and Chief Financial
Officer from 1987 to 1995; Member, Board
of Trustees, Georgian Court College.
Joe B. Foster 61 Chairman and Chief Executive Officer of
Director since 1994 Newfield Exploration Company since
January 1989; prior thereto, Executive
6
<PAGE>
Vice President, Tenneco, Inc. and
Chairman of Tenneco Oil Company and
Tenneco Gas Pipeline Group for more than
five years; Member of the National
Petroleum Council; Chairman, Offshore
Committee, Independent Petroleum
Association of America; Director, Baker
Hughes, Inc., an oil and gas services
company.
Charles G. Stalon 66 Independent Consultant on energy
Director since 1994 regulation since 1993; Senior Economist
at Argonne National Laboratory since
1991; Professor of Economics and
Director, Institute of Public Utilities,
Michigan State University from 1989 to
1993; Commissioner, Federal Energy
Regulatory Commission from 1984 until
1989 and the Illinois Commerce Commission
from 1981 until 1984; Member, Advisory
Committee, Bellcore, and Advisory
Committee, Gas Research Institute.
John J. Unkles, Jr. 65 Retired. Formerly Managing Director,
Director since 1982 Tucker Anthony, Inc., Morristown, NJ
(investment bankers) for more than five
years.
The Company and/or its subsidiaries maintain a banking relationship with
Core States New Jersey National Bank, of which Mr. Coe is a director. The
Company believes that all transactions with this bank were conducted at terms
and rates no more favorable than those available to other similarly situated
commercial customers.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
During fiscal 1995, there were eleven meetings of the Board of Directors.
Each director attended more than 75% of the combined meetings of the Board of
Directors and the Committees on which he or she served during the year.
7
<PAGE>
The Executive Committee consists of Roger E. Birk, Bruce G. Coe (Committee
Chair), Laurence M. Downes, Dorothy K. Light, Donald E. O'Neill, and Richard S.
Sambol. During the interval between meetings of the Board of Directors, the
Executive Committee is authorized under the Company's By-laws to exercise all
the powers of the Board of Directors in the management of the Company, unless
specifically directed otherwise by the Board or otherwise proscribed by law.
This Committee met four times in fiscal 1995.
The Audit Committee, consisting of Warren R. Haas, Dorothy K. Light
(Committee Chair), Charles G. Stalon, Thomas B. Toohey and John J. Unkles, Jr.,
met three times during fiscal 1995 for the purpose of overseeing management's
responsibilities for accounting, internal controls, and financial reporting.
While not attempting to verify the results of any specific audit, the Audit
Committee did satisfy itself, and ultimately the Board, that these functions are
being carried out responsibly. The Audit Committee acts to assure itself of the
independence of the independent accountants by reviewing each non-audit service
rendered or to be rendered by the accountants. After meeting with the
independent accountants to review the scope of their examination, fees, and the
planned scope of future examinations, the Audit Committee makes a recommendation
to the Board for the appointment of an independent accounting firm for the
following fiscal year.
The Compensation and Benefits Committee, consisting of Bruce G. Coe, Warren
R. Haas, Donald E. O'Neill (Committee Chair), Richard S. Sambol, and John J.
Unkles, Jr., met five times during fiscal 1995 to review and make
recommendations regarding the annual compensation and benefits of all elected
officers of the Company and its subsidiaries.
The Finance and Pension Investment Committee, consisting of Roger E. Birk,
Bruce G. Coe, Joe B. Foster, Richard S. Sambol, and Thomas B. Toohey (Committee
Chair), met twice during fiscal 1995 to review and make recommendations to the
Board concerning financing proposals, dividend guidelines, and other corporate
financial and pension matters.
The members of the Nominating Committee are Roger E. Birk, Bruce G. Coe,
Dorothy K. Light, Donald E. O'Neill and Richard S. Sambol (Committee Chair). The
purpose of the Nominating Committee is to recommend to the Board the nominees
for election as directors, and to consider performance of incumbent directors to
determine whether to nominate them for re-election. This Committee met twice in
fiscal 1995. The Nominating Committee will consider qualified nominations for
directors recommended by stockholders. Recommendations should be sent to New
Jersey Resources Corporation, Office of the Secretary, 1415 Wyckoff Road, P.O.
Box 1464, Wall, New Jersey 07719. Any nomination for director should be received
by the Secretary on or before September 5, 1996.
8
<PAGE>
REMUNERATION OF DIRECTORS
Directors who are not officers of the Company or its subsidiaries are
compensated as follows: (1) an annual retainer of $10,800; (2) a fee of $700 for
each Board meeting attended; (3) a fee of $700 for each committee meeting
attended, unless the committee meeting was held on the same day as a Board
meeting, in which case the committee meeting fee is $500; (4) a fee of $400 for
any Board or committee meeting attended via telephone conference call; and (5)
an annual retainer for each committee chairperson of $5,000. Directors also
receive a one-time award of 200 shares and options to purchase 5,000 shares of
the Company's Common Stock. An additional award of options to purchase 1,000
shares of the Company's Common Stock is made annually. Directors who are also
officers of the Company or its subsidiaries do not receive additional
compensation. All directors are reimbursed for any out-of-pocket expenses
incurred in attending Board or committee meetings. Mr. Coe was elected Chairman
of the Board of Directors in April 1995 and receives $50,000 in additional
compensation annually for his services as such.
REMUNERATION OF EXECUTIVE OFFICERS
Compensation and Benefits Committee Report
The Compensation and Benefits Committee (the "Compensation Committee") of
the Board of Directors consists of five outside, non-employee directors. In
addition, as Chief Executive Officer of the Company, Mr. Downes is an ex officio
but non-voting member of the Compensation Committee.
The Compensation Committee's fundamental executive compensation philosophy
is designed to attract, energize, reward and retain qualified executive
personnel who will provide superior results over the long-term and enhance the
Company's position in a highly competitive market. The Compensation Committee
also administers awards under certain of the Company's employee benefit plans.
Accordingly, the Compensation Committee reviews and makes recommendations to the
Board with respect to (1) the performance of the Company's officers and the
presidents of the Company's subsidiaries, (2) the compensation and other
benefits of officers of the Company and the presidents of the Company's
subsidiaries, and (3) benefit programs that are applicable to officers of the
Company and/or its subsidiaries.
The Compensation Committee each year has utilized a national compensation
consultant (the "Consultant") to review competitive compensation levels of
senior executives in the natural gas industry. In addition, the Consultant
utilizes more general industry data from specific surveys prepared by other
compensation consultants in the area of independent power. Through this process,
the Compensation Committee identifies the median compensation levels, both with
9
<PAGE>
respect to base salary and overall executive compensation packages, at the
Company's competitors. Many, but not all of the Companies which compensation was
reviewed for purposes of this comparison are members of the Standard and Poor's
Utilities Index used in the performance graph on page 15.
The Compensation Committee employs this external data by comparing the
results to the base salary and other compensation provided to senior Company
executives. In this fashion, the Compensation Committee is able to assess and
make recommendations to the Board with respect to both individual compensation
levels and target performance levels under the Company's Officer Incentive
Compensation Plan (the "Incentive Plan").
Setting compensation levels for each executive officer is based upon the
Compensation Committee's judgment as well as actual performance against
established goals. Individual performance is measured in several specific areas,
including the development and execution of annual operating plans, strategic
plans, leadership qualities, ability to develop staff, change in leadership
responsibilities and the individual's specific contributions to corporate
objectives which have a significant and positive impact on the Company.
Performance of the subsidiary companies is measured by comparing actual
achievements to financial and strategic objectives in their annual operating
plans. Company performance criteria is also measured yearly to ensure
consistency with the corporate vision, mission and strategies. In making
compensation decisions for 1995 the Compensation Committee reviewed executive
accomplishments in total gas throughput, number of new customers, cost of adding
a new customer, earnings, expenses, operating and net income and the Company's
assumption of a leadership role in natural gas related businesses.
The Company has established three programs providing for direct
compensation of executive officers: the Base Salary Program, the Incentive Plan
and the Executive Long- Term Compensation Plan (the "Long-Term Plan"). The
structure of the total executive compensation package is such that when the
Company achieves its annual business objectives, the Company's senior executives
receive a level of compensation approximately equivalent to the average
compensation paid to executives of the Company's competitors.
Each of these three programs is discussed in greater detail below.
Base Salary Program
In setting the base salary levels of each executive officer, the
Compensation Committee considers the base salaries of executive officers in
comparable positions in other similarly situated natural gas companies. In
setting levels, the Company currently targets the 50th percentile of the
relevant labor market. The Compensation Committee also considers the executive's
experience level and the actual performance of the executive (in view of the
Company's needs and objectives). Changes in compensation are directly dependent
upon individual and Company performance. Mr. Downes' base pay of $215,000 is
approximately 20% below the median compensation for comparable companies and
reflects the fact that Mr. Downes has only recently been promoted to this level
of responsibility and that others in the survey data have more experience in
their positions.
10
<PAGE>
Incentive Plan
Under the Incentive Plan, officers and certain key employees of the Company
and New Jesery Natural Gas Company, a wholly-owned subsidiary of the Company
("NJNG"), designated by the Compensation Committee may receive additional cash
compensation based upon the Compensation Committee's subjective evaluation of
the Company's performance against a series of performance objectives. Awards
under the Incentive Plan are based upon a percentage of the base salaries of
each eligible Incentive Plan participant during the year. Threshold, target and
maximum incentive award levels are established annually by the Compensation
Committee for each award group.
Individual performance awards are payable based on the executive's overall
performance and achievement of his or her annual performance goals. Incentive
award levels are intended to provide payments that are competitive within the
industry when performance results are fully achieved.
The incentive awards to executive officers for achievements in fiscal 1995
(paid in fiscal 1996) and the $60,000 incentive award made to Mr. Downes reflect
overall results that were above target for the Company and NJNG.
Executive officers of the Company's other subsidiaries have not
participated in the Incentive Plan. Instead, annual bonus awards are made to
these individuals based upon the executives' and subsidiaries' performance. The
Compensation Committee believes that variable at-risk compensation, both annual
and long-term, should make up a significant part of an executive's compensation
and that the amount of this compensation component should increase with
increasing levels of responsibility.
Long-Term Plan
The Long-Term Plan currently provides for the award of stock options (the
"Stock Options"), performance units (the "Performance Units") or restricted
stock (the "Service Awards") to designated officers and certain key employees.
Although awards under the Long-Term Plan were initially made in the form of
Service Awards, beginning in fiscal 1992 (awarded in fiscal 1993) the
Compensation Committee has made awards exclusively in the form of Stock Options
which the Compensation Committee believes can be more directly linked to the
Company's performance. As the value of the Company's stock is generally
considered the strongest indicator of overall corporate performance, Stock
Option awards, which allow the executive to benefit by appreciation in stock
price at no direct cost to the Company, provide a strong incentive to executives
by relating a portion of compensation to the future value of the Company's
stock. Additionally, Stock Options encourage individuals to act as owner
managers and are an important means of fostering a mutual interest between
management and shareholders. If the amendment to the Long-Term Plan is approved
11
<PAGE>
by the stockholders at the Meeting (Item 2 below) all full-time employees of the
Company and its subsidiaries will be participants in the Long-Term Plan eligible
to receive awards granted thereunder and the name will be changed to the
"Long-Term Incentive Compensation Plan".
Stock Option awards to executives for fiscal 1995 (made in fiscal 1996)
were generally determined on the basis of the executive's position within the
Company and level of 1995 base salary. A percentage (up to 100%) of the
executive's base salary, as determined by the Compensation Committee, is divided
by the prevailing market value of the underlying stock to determine the number
of the Option Shares awarded annually. The Compensation Committee also
considered the amount and terms of options already held by executives in making
the awards for fiscal 1995, concluding that greater than normal awards were
necessary to align the interests of such executives and the Company's
shareholders. Mr. Downes was awarded a normal annual grant of 8,148 Stock
Options upon his election as President and Chief Executive Officer of the
Company in July 1995 and was awarded additional 30,000 Stock Options for fiscal
1995 which represented approximatley four times the normal annual grant. It is
expected that executives who receive above average awards for fiscal 1995 will
not receive annual awards in fiscal 1996.
Other
The Company did not pay any compensation in fiscal 1995 that was not
deductible by provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Section 162(m).
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries, nor does any executive
officer of the Company serve as an officer, director or member of a compensation
committee of any entity one of whose executive officers or directors is a
director of the Company.
Compensation and Benefits Committee:
Bruce G. Coe
Warren R. Haas
Donald E. O'Neill
Richard S. Sambol
John J. Unkles, Jr.
12
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
==================================================================================================================================
Annual Compensation Long-Term Compensation
------------------------------ ----------------------
Awards Payouts
---------------------- -------
Other
Annual
Com- Restricted
pensa- Stock LTIP All Other
Name and Principal Salary Bonus tion Award(s) Options Payouts Compensation
Position Year* ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ------ ----- ---- -------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Laurence M. Downes 1995 163,650 25,000 -- -- 10,596 -- 7,768(2)
President & Chief Executive 1994 136,250 25,000 -- -- 1,923 -- 6,764
Officer (1) 1993 120,843 17,500 -- -- 1,948 -- 5,902
Oliver G. Richard III 1995 163,652 75,000 -- 20,820 -- 2,528(9)
Chairman, President and Chief 1994 310,625 75,000 -- 35,000 16,731 -- 11,236
Executive Officer (8) 1993 290,000 60,000 -- 35,000 19,550 -- 9,096
Michael J. Gluckman 1995 196,083 67,625(3) -- 4,165 7,969(4)
President, Paradigm Power, 1994 189,163 26,570 -- 3,558 -- 3,687
Inc. 1993 185,000 -- 4,157 -- --
Oleta J. Harden 1995 123,440 18,764 2,089 6,201(5)
Senior Vice President, General 1994 117,797 16,626 1,734 6,056
Counsel & Secretary, NJNG 1993 111,129 15,395 1,911 5,558
Francis X. Colford 1995 119,128 14,000 2,037 5,953(6)
Senior Vice President, 1994 116,462 11,566 1,792 6,080
Accounting & Financial Control, 1993 115,891 13,855 2,052 5,916
NJNG.
Gary A. Edinger 1995 110,085 20,000 1,766 5,441(7)
Senior Vice President - Energy 1994 99,133 15,904 1,079 5,080
Services, NJNG 1993 92,002 13,659 1,178 4,605
Peter M. Schwolsky 1995 139,052 67,625(11) -- -- 3,951 -- 2,646 (12)
Executive Vice President, Law 1994 199,387 26,570 -- -- 3,375 -- 10,398
& Corporate Development (10) 1993 195,000 14,500 -- -- 3,943 -- 6,619
James M. Bollerman 1995 116,659 15,000 -- -- 3,459 -- 6,930 (14)
President and Chief Executive 1994 158,250 15,000 -- -- 3,043 -- 6,817
Officer, Commercial Realty & 1993 158,250 26,250 -- -- 3,556 -- 3,380
Resources Corp. (13) --
==================================================================================================================================
</TABLE>
- - ----------------
* For fiscal year ended September 30.
(1) Mr. Downes was elected President and Chief Executive Officer in July 1995,
and fulfilled the duties of Chief Executive Officer on an interim basis
after Mr. Richard's resignation on August 3, 1995. Prior to that time, he
was Senior Vice President and Chief Financial Officer of the Company.
(2) Consists of the Company's matching contributions under the Employees'
Retirement Savings Plan (the "Savings Plan") ($4,910) and the Company's
contributions under the Employee Stock Ownership Plan (the "ESOP II")
($2,858).
(3) Represents second installment of a $200,000 project incentive award bonus
payable over three years of which $105,805 remains to be paid. See
"Employment Arrangements, Termination of Employment And Change of Control
Arrangements" below.
(4) Consists of the Company's matching contributions under the Savings Plan
($4,453) and the Company's contributions under the ESOP II ($3,516).
(5) Consists of the Company's matching contributions under the Savings Plan
($3,703) and the Company's contributions under the ESOP II ($2,498).
(6) Consists of the Company's matching contributions under the Savings Plan
($3,573) and the Company's contributions under the ESOP II ($2,380).
13
<PAGE>
(7) Consists of the Company's matching contributions under the Savings Plan
($3,303) and the Company's contributions under the ESOP II ($2,138).
(8) Mr. Richard resigned these positions effective April 3, 1995.
(9) Consists of the Company's matching contributions under the Savings Plan
($2,528).
(10) Mr. Schwolsky resigned these positions effective June 1, 1995.
(11) Represents second installment of a $200,000 project incentive award bonus
payable over three years of which $105,805 remains to be paid.
(12) Consists of the Company's matching contributions under the Savings Plan
($2,646).
(13) Mr. Bollerman resigned these positions effective May 31, 1995.
(14) Consists of the Company's matching contributions under the Savings Plan
($3,500) and the Company's contribution under the ESOP II Plan ($3,430).
OPTION GRANTS IN 1995 FISCAL YEAR
<TABLE>
========================================================================================================================
<CAPTION>
Individual Grants
--------------------------
Number Percent of
of Total
Securities Options Potential Realizable
Underlying Granted to Value at Assumed
Options Employees Exercise Expira- Annual Rates of Stock
Granted in Fiscal Price tion Price Appreciation
Name (#) Year ($/Sh)(1) Date for Option Term
-----------------------------
5% ($) 10% ($)
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Laurence M. Downes.......... 8,148 10.9% 23.625 7/12/05 121,059 306,789
2,448 3.3% 22.875 11/30/04 35,217 89,246
Michael J. Gluckman......... 4,165 5.6% 22.875 11/30/04 59,917 156,843
Oleta J. Harden............. 2,089 2.8% 22.875 11/30/04 30,052 76,158
Francis X. Colford.......... 2,037 2.7% 22.875 11/30/04 29,304 74,263
Gary A. Edinger............. 1,766 2.4% 22.875 11/30/04 25,405 64,383
Oliver G. Richard III....... 20,820 27.9% 22.875 11/30/04 299,514 759,031
Peter M. Schwolsky.......... 3,951 5.3% 22.875 11/30/04 56,839 144,041
James M. Bollerman.......... 3,459 4.6% 22.875 11/30/04 49,761 126,104
=========================================================================================================================
</TABLE>
(1) Represents the fair market value at the date of grant.
14
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN 1995 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
======================================================================================================================
Number of Value of
Unexercised Unexercised
Options In-the-Money
Shares Value at Fiscal Year- Options
Acquired on Realized End at Fiscal Year-
Name Exercise (#) ($) (#) End ($)
------------------------------------------
Exercisable/ Exercisable/
Unexercisable Unexercisable
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Laurence M. Downes...................... -- -- 1,455/13,012 3,531/29,208
Michael J. Gluckman..................... -- 2,968/8,912 7,533/20,031
Oleta J. Harden......................... -- -- 1,388/4,346 3,458/9,736
Francis X. Colford...................... -- -- 1,474/4,407 3,719/9,830
Gary A. Edinger......................... -- -- 858/3,165 2,132/7,437
Oliver G. Richard III................... -- -- 31,712/ -- 157,316/--
Peter M. Schwolsky...................... -- -- 2,814/ -- 7,145/--
James M. Bollerman...................... -- -- -- --
======================================================================================================================
</TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
[The following table represents a comparison graph in the printed proxy
statement]
9/90 9/91 9/92 9/93 9/94 9/95
NJR 100 119 145 200 155 202
S&P 500 100 131 146 164 171 221
S&P Utilities 100 116 133 165 143 183
* Assumes $100 invested on September 30, 1990, in NJR stock, the S&P 500 Index
and the S&P Utility Index. Cumulative total return includes reinvestment of
dividends.
RETIREMENT PLANS
The following table sets forth estimated annual benefits payable upon
retirement (including amounts attributable to the Plan for Retirement Allowances
for Non-Represented Employees (the "Retirement Plan") and any other defined
benefit supplementary or excess pension award plans) in specified compensation
and years of service classifications, and assumes a reduction of approximately
10% which is applied to married employees in order to provide the spouse a
survivor's annuity of 50% of the employee's reduced retirement benefit:
15
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Credited Service
-------------------------
Compensation 10 15 20 25 30 35 40 45
------------ -- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000 $13,485 $20,228 $26,970 $33,713 $40,455 $47,198 $52,823 58,448
$125,000 $17,198 $25,796 $34,395 $42,994 $51,593 $60,192 $67,223 74,254
$150,000 $20,910 $31,365 $41,820 $52,275 $62,730 $73,185 $81,623 90,060
$175,000 $24,623 $36,934 $49,245 $61,557 $73,868 $86,179 $96,023 105,867
$200,000 $28,335 $42,503 $56,670 $70,838 $85,005 $99,173 $110,423 121,673
$225,000 $32,048 $48,071 $64,095 $80,119 $96,143 $112,167 $124,823 137,479
$250,000 $35,760 $53,640 $71,520 $89,400 $107,280 $125,160 $139,223 153,285
$275,000 $39,473 $59,209 $78,945 $98,682 $118,418 $138,154 $153,623 169,092
$300,000 $43,185 $64,778 $86,370 $107,963 $129,555 $151,148 $168,023 184,898
$325,000 $46,898 $70,346 $93,795 $117,244 $140,693 $164,142 $182,423 200,704
$350,000 $50,610 $75,915 $101,220 $126,525 $151,830 $177,135 $196,823 216,704
</TABLE>
For the five executives named in the Summary Compensation Table who are
currently employees of the Company, compensation covered by the Retirement Plan
equals their base salary.
The number of years of credited service at normal retirement for the named
executive officers are as follows:
Years of
Name credited service
---- ----------------
Laurence M. Downes 37
Michael J. Gluckman 10
Oleta J. Harden 0
Francis X. Colford 39
Gary A. Edinger 43
Benefits are computed on a straight life, annuity basis. The benefits
listed in the above table are not subject to deduction for Social Security or
other amounts.
16
<PAGE>
The Company has supplemental retirement agreements ("Supplemental
Retirement Agreements") with Messrs. Downes, Colford and Edinger and Mrs. Harden
and certain other officers not named in the Summary Compensation Table, payable
over a five-year period commencing with retirement at age 65. At projected
retirement, the maximum total amounts currently payable over a five year period
to Messrs. Downes, Colford and Edinger and Mrs. Harden under their respective
Supplemental Retirement Agreements would be $250,000, $125,000, $125,000 and
$125,000, respectively.
EMPLOYMENT ARRANGEMENTS, TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL ARRANGEMENTS
Dr. Gluckman
The Company has entered into a letter agreement, dated March 11, 1992, with
Dr. Michael J. Gluckman, President of Paradigm Power, Inc. ("Paradigm"), the
Company's subsidiary engaged in the development of natural gas fueled
independent power production facilities. Under this agreement, Dr. Gluckman is
entitled to receive a minimum base salary of $185,000 per year during the
three-year term of the agreement, which will automatically be extended for an
additional year unless earlier terminated, and may participate in the Company's
incentive, welfare, retirement, savings and stock ownership plans. In addition,
Dr. Gluckman is entitled to receive a project incentive bonus, subject to
certain conditions, based upon a specified percentage of the capital cost of the
project, upon the successful development of newly developed Paradigm projects.
Each such project and its proposed capital costs, and thus any project incentive
bonus payable to Dr. Gluckman, will be subject to the prior approval of the
Company's Board of Directors.
In 1993, a subsidiary of Paradigm entered into an agreement to jointly
develop a proposed cogeneration project which would sell electricity to an
unaffiliated utility, pursuant to a power purchase agreement. In 1994 the power
purchase agreement was terminated in exchange for a buy-out settlement. The
Company's total share of the buy-out settlement, which is to be received over a
three-year period, including interest, is expected to be approximately
$4,800,000. Based on Dr. Gluckman's project incentive bonus arrangement and his
efforts in developing the project and then negotiating the buy-out settlement,
the Board awarded him a bonus in the amount of $200,000, payable only on a
prorated basis, over the same three-year period in which the Company receives
payment. During 1995, the Company received $1,639,631.51, or approximately 34%
of the expected total settlement. Accordingly, Dr. Gluckman received 34% of the
total bonus award, or $67,625.
17
<PAGE>
Change of Control Arrangements
Under the Long-Term Plan, in the event of a change of control (as defined
therein) of the Company, the Board may, among other things, accelerate the
entitlement to outstanding benefits awarded thereunder.
Pursuant to the Supplemental Retirement Agreements of Messrs. Downes,
Colford and Edinger and Mrs. Harden, in the event of a change of control of the
Company, the right to the amounts payable to each of them thereunder becomes
immediately vested and such amounts are immediately payable in the event of a
subsequent termination of employment for any reason. Change of control of the
Company is defined as a reportable change of control under the proxy rules of
the Securities and Exchange Commission, including the acquisition of a 30%
beneficial voting interest in the Company, or a change in any calendar year in
such number of directors as constitutes a majority of the Board of Directors,
unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
year.
The Company has entered into agreements with each of the five executives
named in the Summary Compensation Table who are currently empoloyees of the
Company that provide each such executive certain rights in the event that his or
her employment with the Company is terminated within three years following the
occurrence of a "Change of Control" (i) by the Company without "Cause" (i.e.,
conviction of a felony; gross neglect, willful malfeasance or willful gross
misconduct which has had a material adverse effect on the Company or repeated
material willful violations of the executive's duties which result in material
damage to the Company) or (ii) by the executive for "Good Reason" (e.g., due to
a material breach of the Agreement by the Company, including, without
limitation, a material adverse change in executive's position or
responsibilities or a reduction in the executive's compensation). Subject to the
limitation described below, upon either such termination of employment, the
executive will receive three times, in the case of Mr. Downes, and two times, in
all other cases, the sum of (x) his or her then annual base salary and (y) the
average of his or her annual bonuses with respect to the last three calendar
years ended prior to the Change of Control. However, if the executive would be
subject to the excise tax imposed on "excess parachute payments", the amounts
payable to the executive under this agreement will be reduced (but not below
zero) to the maximum amount which may be paid without the executive being
subject to such tax. In the case of Mr. Downes, this limit will only apply if it
will result in his receiving a greater net after tax amount than he would have
been received without applying such limit. For purposes of these agreements, a
"Change of Control" shall generally mean the acquisition by any person of
beneficial ownership of securities representing 25% or more of the combined
voting power of the Company's securities; within any 24-month period, the
persons who were directors of the Company immediately before such period (the
"Incumbent Directors") and directors whose nomination or election is approved by
two-thirds the Incumbent Directors and directors previously approved by the
Incumbent Directors ceasing to constitute a majority of the Board or the
stockholders of the Company approve a merger, consolidation, share exchange,
division, sale or other disposition of all or substantially all of the assets of
the Company, as a result of which the shareholders of the Company immediately
prior to such event do not hold, directly or indirectly, a majority of the
Voting Power of the acquiring or surviving corporation.
AMENDMENT TO EXECUTIVE LONG-TERM
INCENTIVE COMPENSATION PLAN
[Item (2) on Proxy Card]
Item 2
On November 29, 1995, the Board of Directors adopted, subject to the
approval of the Company's stockholders at the Meeting, amendments to the
Company's Long-Term Plan. The text of the proposed amendments is set forth in
Appendix A.
Under the Long-Term Plan as originally adopted by the stockholders at the
1989 Annual Meeting, only certain executive officers and designated key
employees of the Company and its subsidiaries are eligible to participate. If
adopted, the proposed amendments would make all full-time employees of the
Company and its subsidiaries eligible to receive incentive awards under the
Long-Term Plan. As of the day of this Statement, there were approximately 870
employees eligible to participate. In addition, to reflect more accurately the
expanded scope of the Long-Term Plan, its name would be changed from "Executive
Long-Term Incentive Compensation Plan" to "Long-Term Incentive Compensation
Plan."
The Board believes that expanding participation in the Long-Term Plan to
include all full-time employees will give the Company added flexibility to
18
<PAGE>
better relate employee compensation to performance, based on the attainment of
specific goals, thereby fostering a greater mutuality of interest between the
employees and the Company.
Description of the Long-Term Plan
General
The purposes of the Long-Term Plan are generally to attract and retain
executives and employees of outstanding ability by motivating executives and
other employees, by means of performance related incentives, to achieve long
range performance goals, thereby enabling the Company's employees to participate
in the Company's long-term growth and financial success.
Eligibility to participate in the Long-Term Plan is currently limited to
officers of the Company and its subsidiaries and certain designated key
employees. If the proposed plan amendments are adopted, all full-time employees
of the Company and its subsidiaries will be participants in the Long-Term Plan
eligible to receive awards granted thereunder (such employees are referred to as
"Participants").
Pursuant to the Long-Term Plan, the Compensation Committee, in its sole
discretion, may make grants of Stock Options, Performance Units or Service
Awards to Participants. Although awards under the Long-Term Plan were initially
made in the form of Service Awards, beginning in fiscal 1992 (awarded in fiscal
1993) the Compensation Committee has made awards exclusively in the form of
Stock Options which it believes can be more directly linked to the Company's
performance.
Stock Options
Stock Options may be either incentive stock options or non-qualified stock
options. In the case of incentive stock options, the terms and conditions of the
grant are subject to and must comply with such limitations as may be prescribed
by sec tion 422(b)(7) of the Code.
The Compensation Committee determines the Participants to whom Stock
Options to purchase shares of the Company's Common Stock will be granted, the
number of shares covered by each Stock Option and the conditions or limitations
applicable to the exercise of the Stock Option. At the time each Stock Option is
granted, the Compensation Committee also determines the price at which it may be
exercised, provided that the exercise price may not be less than 100% of the
fair market value of the Company's Common Stock on the date of the grant, and
any other terms and conditions regarding the exercise thereof. Fair market value
means either (1) the average of the high and low sales prices of the Common
19
<PAGE>
Stock, or (2) the closing price of the Common Stock, on the date on which it is
to be valued as reported for New York Stock Exchange -- Composite Transactions.
Performance Units
Performance Units represent a contingent award of fixed or variable dollar
amount or may be made equal to a share of Common Stock. The Compensation
Committee establishes objectives for the Company and/or its subsidiaries for the
purpose of determining the extent to which Performance Units which have been
contingently awarded have been earned (the "Performance Goals"). The
Compensation Committee also establishes the period of years during which the
performance of the Company and its subsidiaries is measured for the purpose of
determining the extent to which an award of Performance Units has been earned
(the "Performance Cycle").
The Compensation Committee has sole and complete authority to determine the
recipients of Performance Units, the number of units for each Performance Cycle,
the duration of each Performance Cycle and the value or valuation methodology of
each Performance Unit.
The Compensation Committee establishes Performance Goals for each
Performance Cycle on the basis of such criteria as the Compensation Committee
may from time to time select. It also determines the number of Performance Units
earned on the basis of performance in relation to the established Performance
Goals. Payment for Performance Units is made in cash or shares of Company Common
Stock, in such proportions as the Compensation Committee determines.
Participants who earn Performance Units may be offered the opportunity to defer
receipt of payment for the Performance Units under terms established by the
Committee.
Service Awards
Service Awards represent shares of Company Common Stock, contingently
granted, based on continued service to the Company and/or its subsidiaries for a
specified period.
The Compensation Committee has sole and complete authority to determine the
Participants to whom Service Awards will be granted, the number of shares to be
granted, the duration of the period of years selected by the Compensation
Committee during which a Service Award may be forfeited (the "Restricted
Period"), the conditions under which the Service Award may be forfeited to the
Company in the event the Participant ceases to be an employee during the
Restricted Period (other than in the cases of death, disability or retirement)
and other terms and conditions of the Service Award.
20
<PAGE>
During the Restricted Period, shares granted pursuant to a Service Award
may not be sold, assigned, transferred, pledged or otherwise encumbered by
Participants.
Other Provisions
A total of 750,000 shares of Common Stock were reserved for issuance
pursuant to the Long-Term Plan of which 577,542 shares remain available for
award. In the event that (1) a Stock Option expires or is terminated unexercised
as to any shares covered thereby, or (2) shares are forfeited for any reason
under the Long-Term Plan, such shares shall thereafter be again available for
issuance pursuant to the Long-Term Plan.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than normal cash dividends, the
Compensation Committee shall make such substitution or adjustment, if any, as it
deems to be equitable, as to the number or kind of shares of Common Stock or
other securities issued or reserved for issuance pursuant to the Long-Term Plan,
including the number of outstanding Stock Options and the option price thereof,
and the number or outstanding awards of other types.
In order to maintain the Participants' rights in the event of Change of
Control (as defined below) of the Company, the Board, in its sole discretion,
may, either at the time an award is made or at any time prior to or
simultaneously with a Change of Control (1) provide for the acceleration of any
time periods relating to the exercise or realization of such awards so that such
awards may be exercised or realized in full on or before a date fixed by the
Board; (2) provide for the purchase of such awards, upon the Participant's
request, for an amount of cash equal to the amount which could have been
attained upon the exercise or realization of such rights had such awards been
currently exercisable or payable; (3) make such adjustment to the awards then
outstanding as the Board deems appropriate to reflect such transaction or
change; or (4) cause the awards then outstanding to be assumed, or new rights
substituted therefor, by the surviving corporation in such change. The Board
may, in its discretion, include such further provisions and limitations in any
agreement entered into with respect to an award as it may deem equitable and in
the best interests of the Company. A Change of Control is deemed to have
occurred if (1) absent prior approval by the Board, thirty percent (30%) or more
of the Company's outstanding securities entitled to vote in elections of
directors shall be beneficially owned, directly or indirectly, by any person,
entity or group; or (2) individuals currently constituting the Board (or the
successors of such individuals nominated by a Board on which such individuals or
such successors constituted a majority) cease to constitute a majority of the
Board.
21
<PAGE>
The Company may deduct from all amounts paid in cash (whether under the
Long-Term Plan or otherwise) any taxes required by law to be withheld with
respect to an award. In the case of payments of awards in the form of Common
Stock, at the Compensation Committee's discretion, the Participant may be
required to pay to the Company the amount of any taxes required to be withheld
with respect to such Common Stock, or, in lieu thereof, the Company may retain
(or the Participant may be offered the opportunity to elect to tender) the
number of shares of Common Stock which fair market value equals the amount
required to be withheld.
The Board may amend, suspend or terminate the Long-Term Plan or any portion
thereof at any time, provided that no amendment shall be made without
stockholder approval which shall (1) increase (except as provided in Section I.
E(b) of the Long-Term Plan) the total number of shares of Common Stock reserved
for issuance pursuant to the Long-Term Plan; (2) change the class of employees
eligible to be Participants; (3) decrease the minimum option prices stated in
the Plan (other than to change the manner of determining fair market value to
conform to any then applicable provision of the Code or regulations thereunder);
or (4) withdraw the administration of the Long-Term Plan from a committee
consisting of three or more members, each of whom is a disinterested person (as
defined in the Long-Term Plan). The Compensation Committee may also amend the
Long-Term Plan as necessary to have the Long-Term Plan conform with applicable
laws.
The Compensation Committee may amend, modify or terminate any outstanding
award without the Participant's consent at any time prior to payment or exercise
in any manner not inconsistent with the terms of the Long-Term Plan, including
without limitation, (A) to change the date or dates as of which (1) a Stock
Option becomes exercisable, (2) a Performance Unit is deemed earned, or (3) a
Service Award becomes nonforfeitable; or (B) to cancel and reissue an award
under such different terms and conditions as it determines appropriate.
Awards may provide the Participant with (1) dividends or dividend
equivalents and voting rights prior to either vesting or earnout; and (2) to the
extent determined by the Compensation Committee, cash payments in lieu of all or
any portion of an award.
During fiscal year 1995, options to purchase a total of 137,544 shares of
Common Stock were awarded under the Long-Term Plan to all executive officers of
the Company and its subsidiaries as a group and options to purchase a total of
2,128 shares of Common Stock were awarded to key employees.
22
<PAGE>
Vote Required
For purposes of Rule 16b-3 issued under the Securities Exchange Act of
1934, as amended, the affirmative votes of the holders of a majority of the
Common Shares, present or represented by proxy, and entitled to vote at the
Meeting, is required for the amendment of the Long-Term Plan. The total number
of votes cast "For" approval is counted for the purpose of determining whether
sufficient votes are received. An abstention from voting on a matter by a
stockholder present in person or represented by proxy and entitled to vote has
the same effect as a vote "Against" the proposed amendment. Broker non-votes are
not considered shares entitled to vote and will not affect the outcome of the
vote.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
AMENDMENTS TO THE EXECUTIVE LONG-TERM INCENTIVE PLAN
AMENDMENTS TO RESTATED CERTIFICATE
OF INCORPORATION
[Items (3), (4) and (5) on Proxy Card]
The Company's Board of Directors has determined that certain amendments to
the Company's Restated Certificate of Incorporation (the "Restated Certificate")
are advisable and has voted unanimously to recommend them to the Company's
stockholders for adoption. These amendments are being submitted in the form of
three separate proposals discussed in detail below under the captions Item 3,
Item 4 and Item 5. Stockholders are urged to carefully read the materials that
follow.
The three proposals are being presented separately, and if any proposal is
approved by the stockholders it will become effective, regardless of whether the
stockholders approve the other proposals.
The Board of Directors believes that approval of these proposals is in the
best interests of all stockholders and recommends that stockholders vote FOR
their adoption.
23
<PAGE>
AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK,
PAR VALUE $2.50 PER SHARE, TO
50,000,000 SHARES FROM 25,000,000 SHARES
Item 3
AMENDMENT OF THE RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED
PREFERRED STOCK, PAR VALUE $100 PER
SHARE, TO 400,00 SHARES FROM 200,000 SHARES
Item 4
General
The Company is proposing to amend Paragraph 4 of the Restated Certificate
to increase to 50,000,000 the authorized number of shares of Common Stock and to
400,000 the authorized number of shares of preferred stock, par value $100 per
share (the "Preferred Stock"). The text of the proposed amendments is set forth
in Appendix B to this Proxy Statement. Paragraph 4 of the Restated Certificate
currently authorizes the issuance of 25,000,000 shares of Common Stock and
200,000 shares of Preferred Stock.
As of December 27, 1995, 17,928,239 shares of Common Stock were issued and
outstanding. An additional 688,037 shares of Common Stock were reserved for
issuance upon exercise of outstanding options granted under the Company's
Long-Term Plan, 133,712 shares of Common Stock were reserved for issuance upon
exercise of outstanding options granted under the Company's Employees'
Retirement Savigns Plan, 1,442,238 shares of Common Stock were reserved for
issuance upon exercise of outstanding options granted under the Company's
Automatic Dividened Reinvestment and Customer Stock Purchase Plan, and 107,400
shares of Common Stock were reserved for issuance upon exercise of outstanding
options granted under the Company's 1995 Restricted Stock and Stock Option
Program for Outside Directors. A total of 4,700,374 shares of Common Stock
remain available for issuance. As of December 27, 1995, the Company had no
shares of Preferred Stock issued and outstanding.
Because of the limited number of shares of Common and Preferred Stock
available for issuance, the Board of Directors recommends that the stockholders
approve the amendments to the Restated Certificate to increase the number of
authorized shares of Common Stock and to increase the number of authorized
shares of Preferred Stock. Such an increase will enable the Company to enjoy
greater flexibility in raising capital and could facilitate acquisitions of
assets or companies, the issuance of stock dividends, the institution of
employee benefit plans, and other corporate purposes. An increase in the amounts
of authorized Common and Preferred Stock would also allow shares to be issued
without the expense and delay of a special stockholders' meeting.
24
<PAGE>
The additional shares would not be required to be offered first to the
stockholders and would be available for issuance without further stockholder
action unless required by the Restated Certificate, applicable law or the rules
of any stock exchange upon which the Company's securities may be listed. The New
York Stock Exchange, on which shares of Common Stock are presently listed,
currently requires stockholder approval as a prerequisite to listing shares in
several instances, including certain acquisition transactions.
Possible Anti-Takeover Effect
The availability of the additional shares could discourage or frustrate an
attempt to effect a change in control of the Company. The additional shares
could be used to dilute the stock ownership of a person seeking to obtain
control of the Company. Paragraph 9 of the Company's Restated Certificate
currently requires an 80% stockholder vote to approve a merger or other business
combination with an entity owning at least 20% of the Company's voting stock
unless certain price and procedural requirements are satisfied, or unless the
Board of Directors approves the transaction. Shares of Common and Preferred
Stock could be issued to prevent a proposed business combination from receiving
the 80% stockholder approval that would be required unless such price and
procedural requirements are satisfied. The additional shares could also be used
to underlie a rights plan, pursuant to which stockholders would be given the
right to purchase shares of Common Stock at a discount in the event that a
bidder acquired more than a specified percentage of the Company's Common Stock,
unless the Company Board of Directors had first approved the redemption of the
rights or an amendment of the rights plan. Such a plan would tend to discourage
persons from purchasing large amounts of Common Stock without the consent of the
Board of Directors, and so would make it more difficult for someone to acquire
control of the Company without offering a price that the directors found to be
fair to the stockholders. The proposed amendments may therefore make it more
difficult to remove the Company's management.
The Board of Directors has discussed the concept of a rights plan but has
not determined to adopt such a plan. The Company currently has sufficient
authorized but unissued shares of its Preferred Stock for the Board to adopt
such a plan irrespective of whether the amendments are adopted. At present, the
Company has no agreements, plans or commitments with respect to the sale or
issuance of the additional shares of Common Stock and Preferred Stock which
would be authorized by the proposed amendments. The proposed amendments are not
being recommended in response to any specific effort to obtain control of the
Company, but in order to provide the Company with greater flexibility as
described above.
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Vote Required
Under New Jersey law, the affirmative vote of a majority of the votes cast
by the holders of the Company's shares entitled to vote thereon at the annual
meeting is required to adopt the proposed amendments regarding an increase in
the number of authorized shares of Common Stock and Preferred Stock.
Abstentions, broker non-votes and withheld votes will not be included in the
total number of votes cast and therefore will not affect the vote on the
amendments regarding an increase in the number of authorized shares of Common
Stock and Preferred Stock.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
AMENDMENTS TO THE RESTATED CERTIFICATE OF INCORPORATION.
AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION
TO ESTABLISH THE MINIMUM AND THE MAXIMUM
PERMISSIBLE NUMBER OF DIRECTORS
Item 5
General
The Company is proposing to amend Paragraph 6 of the Restated Certificate
to limit the number of directors on the Board to a maximum of 13 and a minimum
of 3 in order to ensure that certain existing provisions of the Restated
Certificate providing for classification of the Company's Board cannot be
circumvented. The text of the proposed amendment is set forth in Appendix C to
this Proxy Statement.
Paragraph 6 of the Restated Certificate currently provides that the number
of the directors of the Company shall be fixed from time to time by or pursuant
to the By-laws of the Company. Article I, Section 1 of the By-laws sets the
minimum of directors at 3, does not fix the maximum number of directors, and
requires that the exact number of the directors be determined from time to time
by resolution adopted by the affirmative vote of the majority of the entire
Board of Directors. However, this By-law provision may be amended or repealed at
any time by action of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors, considered for this purpose as a single class. Therefore, a third
party holding a majority of the voting power of the Company could obtain control
of the Board by amending this provision of the By-laws to increase the size of
the Board and to provide for election of directors to the newly created
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directorships by stockholder vote, notwithstanding the classified election
provisions currently set forth in Paragraph 7 of the Restated Certificate.
The proposed amendment would fix the maximum number of directors at 13 (the
number of directors which currently constitutes the Board). This limit could
only be removed by amendment or repeal of Paragraph 6 of the Restated
Certificate, which requires the affirmative vote of the holders of at least 80%
of the voting power of all the shares of capital stock of the Company entitled
to vote generally in the election of directors, voting as a single class, the
same vote required to amend or repeal the provisions of the Restated Certificate
relating to classification of the Board.
The proposed amendment to Paragraph 6 is not being recommended in response
to any specific effort to obtain control of the Company, but rather in order to
strengthen the existing Restated Certificate provisions related to
classification of the Board.
Possible Anti-Takeover Effect
The proposed amendment to establish the maximum permissible number of
directors at 13, which is the current size of the Board, together with the
existing provisions mandating the classified Board and authorizing a majority of
the directors then in office, even though less than a quorum, to fill any
vacancy, including a vacancy created by an increase in the number of directors,
could discourage or frustrate an attempt to effect a change in control of the
Company.
Under the existing Paragraph 7 of the Restated Certificate, the directors
on the Board are divided into three classes serving staggered three-year terms.
At each annual meeting, directors are elected to succeed those whose terms then
expire, each newly elected director to serve for a three year term. This
provision, combined with the ability of the majority of the entire Board to
determine the size of the Board up to a maximum of 13 directors, effectively
extends the time to elect a majority of the directors from one annual meeting to
at least two annual meetings. This makes it more difficult to change the
over-all composition of the Board and therefore may be considered to be an
anti-takeover provision.
The proposed amendment of Paragraph 6 of the Restated Certificate is
believed necessary in order to assure that the advantages of the classified
Board are not circumvented by amendment of the By-laws as described above.
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The proposed amendment is intended to strengthen the existing Restated
Certificate and By-Law provisions which were designed to help assure the
continuity and stability of the Company's business strategies and policies and
to reduce the vulnerability of the Company to any unsolicited proposals for the
takeover of the Company, or the restructuring or sale of all or part of the
Company. In addition to the provisions discussed above, the Company's By-laws
contain certain advance notice requirements which may have an anti-takeover
effect. These other provisions, as strengthened by the proposed amendment, will
better ensure that the Board, if confronted with a proposal from a third party
which has acquired a block of the Company's stock, will have sufficient time to
review the proposal and appropriate alternatives to the proposal and to seek the
best available result for the stockholders.
The proposed amendment is subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock, or upon
liquidation to elect additional directors. As of December 27, 1995 no shares of
Preferred Stock were issued and outstanding.
Vote Required
Under New Jersey law and the Restated Certificate, the affirmative vote of
the holders of at least 80% of the voting power of all the shares of capital
stock of the Company entitled to vote generally in the election of directors,
voting as a single class, is required to adopt the proposed amendment regarding
the establishment of the minimum and the maximum permissible number of
directors. The total number of votes cast "For" approval is counted for the
purpose of determining whether sufficient votes are received. An abstention from
voting on a matter by a stockholder present in person or represented by proxy
and entitled to vote, or a broker non-vote, has the same effect as a vote
"Against" the proposed amendment.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.
APPOINTMENT OF AUDITORS
[Item (6) on Proxy Card]
Item 6
It is intended that the shares represented by the proxy holders will be
voted for approval of the appointment of Deloitte & Touche LLP (unless otherwise
indicated on proxy) as independent public accountants (auditors) to report to
the stockholders on the financial statements of the Company for the fiscal year
ending September 30, 1996. Each professional service performed by Deloitte &
Touche LLP during fiscal 1995 was approved in advance or was subsequently
approved and the possible effect on the auditors' independence was considered by
the Audit Committee. The Audit Committee has recommended, and the Board of
Directors has approved, the appointment of Deloitte & Touche LLP subject to the
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approval of the stockholders at the Meeting. Although submission of the
appointment of independent public accountants to stockholders is not required by
law, the Board of Directors, consistent with its past policy, considers it
appropriate to submit the selection of auditors for stockholder approval.
Representatives of Deloitte & Touche LLP are expected to be present at the
Meeting with the opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company present, or represented by proxy, and voted at the Meeting
is required for the approval of this item. Abstentions, broker non-votes and
withheld votes will not be included in the total number of the votes cast and
therefore will not affect the vote on the appointment of auditors. The Board has
not determined what action it would take if the stockholders do not approve the
selection of Deloitte & Touche LLP, but would reconsider its selection in light
of the stockholders' action.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPOINTMENT OF DELOITTE & TOUCHE LLP
OTHER MATTERS
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Except for the following, the Company believes that all such filing
requirements applicable to its officers and directors (the Company not being
aware of any ten percent holder) were complied with during fiscal 1995: (1) Mr.
P.M. Schwolsky failed to timely file a Form 5 that should have reported exempt
transactions in the Savings Plan that took place while he was an employee, and
(2) Mr. O.G. Richard III failed to report on Form 4 an open market sale that
took place after he was no longer employed by the Company.
EXPENSES OF SOLICITATION
All expenses of soliciting proxies, including clerical work, printing, and
postage will be paid by the Company. Proxies may be solicited personally, or by
mail, telephone, facsimile, or telegraph, by officers and other employees of the
Company, but the Company will not pay any compensation for such solicitations.
In addition, the Company has agreed to pay Corporate Investor Communications a
fee of $6,000 plus reasonable expenses for proxy solicitation services. The
Company will also reimburse brokers and other persons holding shares in their
names or in the names of nominees for their expenses for sending material to
beneficial owners and obtaining their proxies.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting must be received by the Company on or before September 5, 1996 to be
considered for inclusion in the Company's Proxy Statement and for consideration
at that meeting. Stockholders submitting such proposals are required to be the
beneficial owners of shares of the Company's Common Stock amounting to $1,000 in
market value and to have held such shares for at least one year prior to the
date of submission.
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OTHER BUSINESS
The Board does not know of any other business which may be brought before
the Meeting. However, if any other matters should properly come before the
Meeting or at any adjournment thereof, it is the intention of the persons named
in the accompanying proxy to vote on such matters as they, in their discretion,
may determine.
By Order of the Board of Directors
OLETA J. HARDEN
Secretary
Dated: January 3, 1996
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APPENDIX A
NEW JERSEY RESOURCES CORPORATION
LONG-TERM INCENTIVE COMPENSATION PLAN
(As Amended, Effective October 1, 1995)
I. GENERAL PROVISIONS
A. Purposes
The purpose of the Long-Term Incentive Compensation Plan (the "Plan") of the New
Jersey Resources Corporation (the "Company") is to promote the interests of the
Company and its stockholders by (1) attracting and retaining employees of
outstanding ability; (2) strengthening the Company's capability to develop,
maintain and direct a competent management team; (3) motivating employees, by
means of performance-related incentives, to achieve long-range performance
goals; (4) providing incentive compensation opportunities which are competitive;
and (5) enabling employees to participate in the long-term growth and financial
success of the Company.
B. Definitions
Award - means a grant or award under Sections II through IV, inclusive, of the
Plan.
Board of Directors - means the Board of Directors of the Company.
Code - means the Internal Revenue Code of 1986, as amended from time to time.
Committee - means the Compensation and Benefits Committee of the Board of
Directors, or such other committee of the Board of Directors as may from time to
time be designated to administer the Plan.
Common Stock - means the common stock, $2.50 par value, of the Company.
Corporation - means the Company, its Divisions and Subsidiaries.
Disability Date - means the date on which a Participant is deemed totally and
permanently disabled under the long-term disability plan of the Corporation
applicable to the Participant,
Disinterested Person - has the meaning set forth in Rule 16b-3(d) (3)
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor definition adopted by the Commission.
Employee - means any full-time employee of the Corporation.
Fair Market Value - means, as the Committee shall determine, either (1) the
average of the high and low sales prices of the Common Stock, or (2) the closing
price of the Common Stock, on the date on which it is to be valued hereunder as
reported for New York Stock Exchange-Composite Transactions.
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Participant - means an Employee who is selected by the Committee to receive an
Award under the Plan.
Performance Cycle or Cycle - means the period of years selected by the Committee
during which the performance of the Corporation is measured for the purpose of
determining the extent to which an award of Performance Units has been earned.
Performance Goals - means the objectives for the Corporation established by the
Committee for a Performance Cycle, for the purpose of determining and measuring
the extent to which Performance Units, which have been contingently awarded for
such Cycle, have been earned.
Performance Units - means a fixed or variable dollar or Common Stock share
denominated Unit contingently awarded under Section III of the Plan.
Restricted Period - means the period of years selected by the Committee during
which a Service Award may be forfeited to the Company.
Service Award - means such number of shares of Common Stock contingently
granted, based on continued service for a specified period, to a Participant
under Section IV of the Plan.
Retirement - means retirement on a normal, early or postponed retirement date
within the meaning of the pension plan of the Corporation applicable to the
Participant.
Subsidiary - means any corporation in which the Company owns directly or
indirectly fifty (50%) percent or more of the total combined voting power of all
classes of its stock having voting power.
C. Administration
The Plan shall be administered by the Committee, which shall at all times
consist of three or more members, each of whom is a Disinterested Person. The
Committee shall have sole and complete authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation of the
Plan as it shall from time to time deem advisable, and to interpret the terms
and provisions of the Plan. The Committee's decisions are binding upon all
parties.
D. Eligibility
All Employees are eligible to be Participants in the Plan. Notwithstanding the
foregoing no member of the Committee shall be eligible to receive an Award
during such member's term of membership on the Committee.
E. Shares Reserved
a. There shall be reserved for issuance pursuant to the Plan a total of
750,000 (Seven Hundred Fifty Thousand) shares of Common Stock. In the
event that (1) a stock option granted hereunder expires or is terminated
unexercised as to any shares covered thereby, or (2) shares are forfeited
for any reason under the Plan, such shares shall thereafter be again
available for issuance pursuant to the Plan.
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b. In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off; combination or exchange of shares or other
corporate change, or any distributions to common shareholders other than
normal cash dividends, the Committee shall make such substitution or
adjustment, if any, as it deems to be equitable, as to the number or kind
of shares of Common Stock or other securities issued or reserved for
issuance pursuant to the Plan, including the number of outstanding stock
options and the option price thereof, and the number of outstanding Awards
of other types.
F. Change of Control
In order to maintain the Participants' rights in the event of Change of Control
of the Company, as hereinafter defined, the Board of Directors, in its sole
discretion, may, either at the time an Award is made hereunder or at any time
prior to or simultaneously with a Change in Control (1) provide for the
acceleration of any time period relating to the exercise or realization of such
Awards so that such Awards may be exercised or realized in full on or before a
date fixed by the Board of Directors; (2) provide for the purchase of such
Awards, upon the Participant's request, for an amount of cash equal to the
amount which could have been attained upon the exercise or realization of such
rights had such Awards been currently exercisable or payable; (3) make such
adjustment to the Awards then outstanding as the Board of Directors deems
appropriate to reflect such transaction or change; or (4) cause the Awards then
outstanding to be assumed, or new rights substituted therefor, by the surviving
corporation in such change. The Board of Directors may, in its discretion,
include such further provisions and limitations in any agreement entered into
with respect to an Award as it may deem equitable and in the best interests of
the Company.
A "Change of Control" shall be deemed to have occurred if (1) absent prior
approval by the Board of Directors, thirty (30%) percent or more of the
Company's outstanding securities entitled to vote in elections of directors
shall be beneficially owned, directly or indirectly, by any person, entity or
group; or (2) individuals currently constituting the Board of Directions (or the
successors of such individuals nominated by a Board of Directors on which such
individuals or such successors constituted a majority) cease to constitute a
majority of the Board of Directors.
G. Withholding
The Corporation shall have the right to deduct from all amounts paid in cash
(whether under this Plan or otherwise) any taxes required by law to be withheld
with respect to an Award. In the case of payments of Awards in the form of
Common Stock, at the Committee's discretion the Participant may be required to
pay to the Corporation the amount of any taxes required to be withheld with
respect to such Common Stock, or, in lieu thereof, the Corporation shall have
the right to retain (or the Participant may be offered the opportunity to elect
to tender) the number of shares of Common Stock whose Fair Market Value equals
the amount required to be withheld. The Committee shall require that, with
respect to any such election by a person who is an officer or director of the
Company within the meaning of Section 16 under the Securities Exchange Act of
1934, as amended: (1) such election must be made more than 6 months prior to the
earlier of (a) the earliest date upon which the Award vests or becomes
exercisable and (b) the earliest date on which such withholding is required to
be made pursuant to the Internal Revenue Code of 1986, as amended; (2) such
election must be irrevocable; and (3) such election shall be subject to
disapproval by the Committee.
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H. Nontransferability
No Award shall be assignable or transferable except by will or the laws of
descent and distribution, and no right or interest of any Participant shall be
subject to any lien, pledge, encumbrance, obligation or liability of or in favor
of the Participant or any other person or entity.
I. No Right to Employment
No person shall have any claim or right to be granted an Award, and the grant of
an Award shall not be construed as giving a Participant the right to be retained
in the employ of the Corporation. Further, the Corporation expressly reserves
the right at any time to dismiss a Participant free from any liability or any
claim under the Plan, except as provided herein or in any agreement entered into
with respect to an Award.
J. Construction of the Plan
The validity, construction, interpretation, administration and effect of the
Plan and of its rules and regulations, and rights relating to the Plan, shall be
determined solely in accordance with the laws of New Jersey.
K. Amendment
a. The Board of Directors may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that no amendment shall be made
without stockholder approval which shall (1) increase (except as provided
in Section I. E(b) hereof) the total number of shares of Common - Stock
reserved for issuance pursuant to the Plan; (2) change the class of
Employees eligible to be - Participants; (3) decrease the minimum option
prices stated herein (other than to change the - manner of determining Fair
Market Value to conform to any then applicable provision of the Code or
regulations thereunder); or (4) withdraw the administration of the Plan
from a committee - consisting of three or more members, each of whom is a
Disinterested Person. Notwithstanding anything to the contrary contained
herein, the Committee may amend the Plan in such manner as may be necessary
so as to have the Plan conform with applicable statutes, rules and
regulations of governmental authorities.
b. The Committee may amend, modify or terminate any outstanding Award without
the Participant's consent at any time prior to payment or exercise in any
manner not inconsistent with the terms of the Plan, including without
limitation, (A) to change the date or dates as of which (1) a Stock Option
becomes exercisable; (2) a Performance Unit is deemed earned; or (3) a
Service Award becomes nonforfeitable; or (B) to cancel and reissue an Award
under such different terms and conditions as it determines appropriate.
L. Dividends, Equivalents and Voting Rights; Cash Payments
Awards may provide the Participant with (1) dividends or dividend equivalents
and voting rights prior to either vesting or earnout; and (2) to the extent
determined by the Committee, cash payments In lieu of all or any portion of an
Award.
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M. Effective Date
The Plan shall be effective as of October 1, 1995 (subject to approval by vote
of the Company's stockholders), and shall remain in effect until terminated by
the Board of Directors.
II. STOCK OPTIONS
A. Authority of Committee
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom options shall be granted,
the number of shares to be covered by each such option and the conditions and
limitations, if any, in addition to those set forth in Section II. C hereof,
applicable to the exercise of each such option. The Committee shall have the
authority to grant both incentive stock options and non-qualified stock options,
except that incentive stock options shall only be granted to Participants who
are employees of the Company or a Subsidiary. In the case of incentive stock
options, the terms and conditions of such options shall be subject to and comply
with the grant and vesting limitations as may be prescribed by Section 422A(b)
(7) of the Code, as from time to time amended, and any implementing regulations.
B. Option Price
The Committee shall establish the option price at the time each stock option is
granted, which price shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of grant. The option price shall be subject to
adjustment in accordance with the provisions of Section I. E(b) hereof.
C. Exercise of Options
a. The Committee may determine that any stock option shall become exercisable
in installments and may determine that the right to exercise such stock
option as to such installments shall expire on different dates or on the
same date; provided that no such stock option shall be exercisable by
Participants who are officers or directors of the Company for purposes of
Section 16 of the Securities Exchange Act of 1934 prior to 6 months
following the date of grant except as otherwise permitted under the Plan.
Incentive stock options may not be exercisable later than ten years after
their date of grant.
b. In the event a Participant ceases to be an Employee with the consent of the
Committee, or upon the occurrence of a Participant's death, Retirement or
Disability Date, such Participant's Stock Options shall be exercisable at
any time during such period as may be established by the Committee. If a
Participant ceases to be an Employee for any other reason, such
Participant's rights under all Stock Options shall terminate upon the
expiration of ninety days next following the effective date of such
Participant's termination of employment.
c. Each Stock Option shall be confirmed by a stock option agreement executed
by the Company and by the Participant. The option price of each share as to
which an option is exercised shall be paid in full by the Participant at
the time of such exercise. Such payment shall be made in cash, by tender of
shares of Common Stock valued at Fair Market Value as of the date of
exercise, subject to such limitations on the tender of Common Stock as the
Committee may impose, by a combination of cash and shares of Common Stock,
or by such other arrangement as the Committee may determine.
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d. Each option agreement shall provide that the option shall not be assignable
or transferable by the Participant otherwise than by will or the laws of
descent and distribution, that no right or interest of any Participant
thereunder shall be subject to any lien, pledge, encumbrance, obligation or
liability of or in favor of the Participant or any other person or entity,
and that such option shall be exercisable only by the Participant during
the Participant's lifetime or, upon the Participant's death, by such
Participant's estate or other legal representative, in accordance with the
terms of such option agreement.
III. PERFORMANCE UNITS
A. Authority of Committee
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine (i) the Employees who shall receive Performance
Units and the number of Units awarded for each Performance Cycle; (ii) the
duration of each Performance Cycle; and (iii) the value of or valuation
methodology for each Performance unit. Performance units may be denominated in
fixed or variable dollar amounts, or may be made equal to one or more shares of
Common Stock. There may be more than one Performance Cycle in existence at any
one time, and the duration of such Performance Cycles may differ, as determined
by the Committee.
B. Option Price
The Committee shall establish Performance Goals for each Cycle on the basis of
such criteria and to accomplish such objectives as the Committee may from time
to time select. During any Cycle, the Committee may adjust the Performance Goals
for such Cycle as it deems equitable in recognition of unusual or non-recurring
events affecting the Corporation or changes in applicable tax laws or accounting
principles.
C. Terms and Conditions
The Committee shall determine the number of Performance Units which have been
earned on the basis of the Corporation's performance in relation to the
established Performance Goals. Performance Units may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as herein provided, during
the Performance Cycle. Payment for Performance Units shall be in (1) cash, or
(2) shares of Common Stock, in such proportions as the Committee shall
determine. Prior to the time Performance Units are earned, Participants may be
offered the opportunity to defer receipt of payment for earned Performance Units
under terms established by the Committee; provided, however, that such election
by a Participant who is an officer or director of the Corporation within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, must
be made prior to the time such Performance Units are earned and must be
irrevocable.
D. Termination of Employment
A Participant must be an Employee at the end of a Performance Cycle in order to
be entitled to payment of Performance Units in respect of such Cycle; provided,
however, that in the event a Participant ceases to be an Employee with the
consent of the Committee before the end of such Cycle, or upon the occurrence of
a Participant's death, Retirement or Disability Date prior to the end of such
Cycle, the Committee, in its discretion and after taking into consideration the
performance of such Participant and the performance of the Corporation during
the Cycle, may authorize payment to such
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Participant (or the Participant's legal representative) of all or a portion of
the Performance Units deemed by the Committee to have been earned by the
Participant to the date of termination.
IV. SERVICE AWARDS
A. Authority of Committee
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom Service Awards shall be
granted, the number of shares of Common Stock to be granted to each Participant,
the duration of the Restricted Period during which, and the conditions under
which, the Service Award may be forfeited to the Company, and the terms and
conditions of the Award. Such determinations shall be made by the Committee at
the time of the grant.
B. Terms and Conditions
Shares of Common Stock subject to a Service Award may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Participant, except as
herein provided, during the Restricted Period. Certificates issued in respect to
such Awards shall be registered in the name of the Participant and deposited by
the Participant, together with a stock power endorsed in blank, with the
Company. At the expiration of the Restricted Period, the Company shall deliver
such certificates to the Participant. The Committee may further require that an
appropriate legend be inserted on the certificate indicating the restrictions
imposed hereunder and such other restrictions as may exist on the
transferability of the shares represented thereby.
C. Termination of Employment
In the event a Participant ceases to be an Employee with the consent of the
Committee during the Restricted Period, or upon the occurrence of a
Participant's death, Retirement or Disability Date during the Restricted Period,
the restrictions imposed hereunder shall lapse with respect to such number of
shares of Common Stock granted as Service Awards, if any, shall be determined by
the Committee. In the event a Participant ceases to be an Employee for any other
reason during the Restricted Period, all shares of stock granted as Service
Awards and not yet earned shall thereupon be forfeited to the Company.
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APPENDIX B
PARAGRAPH 4 OF THE RESTATED CERTIFICATE OF INCORPORATION
AS AMENDED PURSUANT TO ITEMS 3 AND 4
4. The aggregate number of shares which the Corporation shall have authority to
issue is 50,400,000 shares, of which 50,000,000 shares shall be designated as
Common Stock of the par value of $2.50 per share and 400,000 shares shall be
designated as Preferred Stock of the par value of $100 per share.
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APPENDIX C
PARAGRAPH 6 OF THE RESTATED CERTIFICATE OF INCORPORATION
AS AMENDED PURSUANT TO ITEM 5
6. Except as otherwise fixed by or pursuant to the provisions of Paragraph 4
hereof, relating to the rights of the holders of any class or series of stock
having a preference over the Common Stock, or upon liquidation to elect
additional directors, the number of Directors constituting the Board of
Directors shall be not less than three nor more thirteen, the exact number to be
determined from time to time by vote of the Board of Directors of the
Corporation in the manner prescribed by the By-laws of the Corporation.
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P NEW JERSEY RESOURCES CORPORATION
R
O 1415 Wyckoff Road, Wall, NJ 07719
X
Y Solicited on behalf of the BOARD OF DIRECTORS
for the 1996 Annual Meeting of Stockholders
The undersigned hereby appoints Laurence M. Downes with full power of
substitution and to act alone, proxy to represent the undersigned at the Annual
Meeting of Stockholders of New Jersey Resources Corporation to be held at 10:30
a.m., local time, on Wednesday, February 14, 1996, at the Robert B. Meyner
Reception Center at the Garden State Arts Center, Exit 116, Garden State
Parkway, Holmdel, New Jersey 07733 and at any adjournment thereof, and thereat
to vote all of the shares of stock which the undersigned would be entitled to
vote, and, if appplicable, hereby directs the trustee(s) of employee benefit
plan(s) shown on the reverse side of this card to vote the shares of stock
allocated to the account of the undersigned.
-------------------
CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE SEE REVERSE
SIDE
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<PAGE>
[x] Please mark
votes as in
this example.
Unless otherwise indicated, this proxy will be voted "FOR" all nominees for
election as directed and "FOR" the proposals referred to herein.
1. Election of Directors
Nominees: Richard S. Sambol, Leonard
S. Coleman, Lester D. Johnson,
Dorothy K. Light
FOR WITHHELD
[ ] [ ]
[ ] _______________________
For all nominees except as written
on the line above.
FOR AGAINST ABSTAIN
2. Amend Executive Long-Term Incentive [ ] [ ] [ ]
Compensation Plan in the form set forth
in Exhibit A to the Proxy Statement
3. Amendment of the Restated Certificate [ ] [ ] [ ]
to increase the authorized number of
shares of Common Stock in the form set
forth in Exhibit B to the Proxy Statement.
4. Amendment of the Restated Certificate [ ] [ ] [ ]
to increase the authorized number of
shares of Preferred Stock in the form set
forth in Exhibit B to the Proxy Statement.
5. Amendment of the Restated Certificate [ ] [ ] [ ]
to establish the minimum and the maximum
permissible number of directors in the
form set forth in Exhibit C to the Proxy
Statement.
6. Appointment of Deloitte & Touche LLP as [ ] [ ] [ ]
auditors for 1996.
7. To act upon such other business as may [ ] [ ] [ ]
properly come before the meeting or any
adjournment or adjournments thereof.
MARK HERE MARK HERE
FOR ADDRESS [ ] IF YOU PLAN [ ]
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
In case of joint owners, each owner should sign. When signing in a fiduciary or
representative capacity, please give full title as such. Proxies executed by a
corporation should be signed in full corporate name by duly authorized officer.
Signature_______________________________________ Date___________________________
Signature_______________________________________ Date___________________________
