<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
NEW JERSEY RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
------------------------
PROXY STATEMENT AND
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 27, 1999
------------------------
The Annual Meeting (the "Meeting") of Stockholders of New Jersey Resources
Corporation (the "Company") will be held at 10:30 a.m., Wednesday, January 27,
1999, at the Robert B. Meyner Reception Center at the PNC Bank 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 approve the action of the Board of Directors in retaining
Deloitte & Touche LLP as auditors for the fiscal year ending September 30,
1999.
3. 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 10,
1998, 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 1998 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
December 22, 1998
<PAGE> 3
PROXY STATEMENT
------------------------
NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
------------------------
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 27, 1999
This proxy statement sets forth certain information with respect to the
accompanying proxy to be used at the Annual Meeting (the "Meeting") of
Stockholders of New Jersey Resources Corporation (the "Company"), or at any
adjournment or adjournments thereof, 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 holders 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 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. As provided by New Jersey
law, abstentions, broker non-votes and withheld votes will not be included in
the total number of votes cast, and therefore will have no effect on the vote.
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
December 22, 1998.
PLACE OF ANNUAL MEETING
The Board has designated the Robert B. Meyner Reception Center at the PNC
Bank 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, January 27, 1999.
VOTING OF SECURITIES AND STOCKHOLDER INFORMATION
Only holders of record of the Company's outstanding Common Stock at the
close of business on December 10, 1998, are entitled to notice of and to vote at
the Meeting. At the close of business on December 10, 1998, there were
17,870,048 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 10, 1998.
The following table sets forth, as of December 10, 1998, 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
<PAGE> 4
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
approximately 1% of the total shares outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME TITLE OF SECURITY BENEFICIAL OWNERSHIP(1)(2)
---- ----------------- -------------------------------
<S> <C> <C> <C> <C>
Nina Aversano............................. Common Stock 1,228 shares -- Direct
Bruce G. Coe.............................. Common Stock 6,978 shares -- Direct
3,000 shares -- Indirect
Leonard S. Coleman........................ Common Stock 5,228 shares -- Direct
Laurence M. Downes........................ Common Stock 49,364 shares -- Direct
1,911 shares -- Indirect
Joe B. Foster............................. Common Stock 5,267 shares -- Direct
2,000 shares -- Indirect
Hazel S. Gluck............................ Common Stock 5,234 shares -- Direct
Oleta J. Harden........................... Common Stock 19,790 shares -- Direct
90 shares -- Indirect
Timothy C. Hearne......................... Common Stock 16,324 shares -- Direct
298 shares -- Indirect
Lester D. Johnson......................... Common Stock 6,228 shares -- Direct
Dorothy K. Light.......................... Common Stock 8,989 shares -- Direct
38 shares -- Indirect
Glenn C. Lockwood......................... Common Stock 17,374 shares -- Direct
Joseph P. Shields......................... Common Stock 9,368 shares -- Direct
9 shares -- Indirect
Charles G. Stalon......................... Common Stock 8,900 shares -- Direct
John J. Unkles, Jr........................ Common Stock 10,271 shares -- Direct
Gary W. Wolf.............................. Common Stock 3,239 shares -- Direct
George R. Zoffinger....................... Common Stock 11,228 shares -- Direct
500 shares -- Indirect
All Directors and Executive Officers as a
Group................................... Common Stock 238,028 shares -- Direct
7,884 shares -- Indirect
</TABLE>
- ---------------
(1) The number of shares owned and the nature of each ownership, not being
within the knowledge of the Company, have been furnished by each individual.
(2) Includes shares subject to currently exercisable options or any options
exercisable within the next 60 days as follows: Ms. Aversano -- 0 shares;
Mr. Coe -- 0 shares; Mr. Coleman -- 5,000 shares; Mr. Downes -- 42,723
shares; Mr. Foster -- 5,000 shares; Ms. Gluck -- 5,000 shares; Mrs.
Harden -- 14,019 shares; Mr. Hearne -- 11,978 shares; Mr. Johnson -- 5,000
shares; Mrs. Light -- 4,000 shares; Mr. Lockwood -- 13,233 shares; Mr.
Shields -- 6,767 shares; Mr. Stalon -- 5,000 shares; Mr. Unkles -- 5,000
shares; Mr. Wolf -- 3,000 shares; Mr. Zoffinger -- 3,000 shares; and all
directors and executive officers as a group -- 166,843 shares.
2
<PAGE> 5
ELECTION OF DIRECTORS
[ITEM (1) ON PROXY CARD]
ITEM 1
The Board of Directors currently consists of twelve members divided into
three classes with overlapping three-year terms. Dr. Stalon is retiring from the
Board of Directors, effective as of the date of the Meeting, and is not being
replaced at this time; therefore, subsequent to the Meeting, the Board of
Directors will consist of eleven (11) members.
Four individuals have been nominated for election as directors at the
Meeting, all to serve for three year terms expiring 2002, each until their
respective successors are elected and have qualified. 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, present or represented by proxy and voted at the Meeting, is required for
the election of directors.
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 holders reserve the right to substitute any
other person.
NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF NINA AVERSANO] President, North America Global Service Provider Division, Lucent Technologies,
Nina Aversano formerly AT&T Network Systems Division, from 1993 to the present.
Director since September
1998
Age 53
</TABLE>
3
<PAGE> 6
NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF LEONARD S. President, National League of Professional Major League Baseball Clubs since
COLEMAN] March 1994; Executive Director, Market Development, Major League Baseball from
Leonard S. Coleman December 1991 to March 1994; Vice President, Investment Banking, Kidder Peabody
Director since 1995 from 1988 to 1991; Director, Omnicom Group, Inc., an advertising holding company,
Age 49 Owens Corning Corp., a glass and plastics manufacturing company, Avis, Inc., a
car rental and leasing company, H. J. Heinz, and Cendant, a hotel and real estate
franchise company.
[PHOTO OF LESTER D. JOHNSON] Retired. Formerly Director from 1992 through 1995, Vice Chairman and Chief
Lester D. Johnson Financial Officer from January 1995 to December 1995, Executive Vice President
Director since 1996 and Chief Financial Officer from March 1992 to December 1994, of Consolidated
Age 66 Natural Gas Company.
[PHOTO OF DOROTHY K. LIGHT] CEO, Alden Enterprises, LLC, a consulting company since January 1996; Corporate
Dorothy K. Light Vice President and Secretary from June 1990 to July 1995, The Prudential
Director since 1990 Insurance Company of America; Chairperson, the Prudential Foundation from
Age 61 December 1992 to July 1995; Conference Director, Utility Women's Conference and
Trustee, Milkweed Editions.
</TABLE>
4
<PAGE> 7
DIRECTORS WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF BRUCE G. COE] Formerly Chairman of the Board of Directors of the Company from April 1995 to
Bruce G. Coe September 1996; President, New Jersey Business & Industry Association from 1982
Director since 1984 to April 1996; Director, First Option Health Plan, a health care company and
Age 68 Director Emeritus, New Jersey Manufacturers Insurance Company.
[PHOTO OF HAZEL S. GLUCK] President, The GluckShaw Group (formerly Policy Management & Communications,
Hazel S. Gluck Inc.) since April 1994, Founder and President, Public Policy Advisors, Inc. from
Director since 1995 July 1989 to March 1994, both consulting and public relations firms; former
Age 64 Commissioner, Port Authority of New York and New Jersey, NJ Department of
Transportation, New Jersey Transit and NJ Department of Insurance.
[PHOTO OF JOHN J. UNKLES, Retired. Formerly Managing Director, Tucker Anthony, Inc., Morristown, NJ
JR.] (investment bankers) for more than five years and Treasurer, Jonathan's Landing
John J. Unkles, Jr. Golf Club, Inc.
Director since 1982
Age 68
</TABLE>
5
<PAGE> 8
DIRECTORS WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF GARY W. WOLF] Senior Partner, Cahill Gordon & Reindel, a law firm, for more than five years and
Gary W. Wolf Director, Southwestern Public Service Company, an electric utility company, from
Director since 1996 January 1986 to October 1997.(1)
Age 60
[PHOTO OF GEORGE R. President & CEO, Constellation Capital Corp., since March 1998, a financial
ZOFFINGER] services company; former President & CEO, Value Property Trust, from 1995 to
George R. Zoffinger February 1998, a publicly owned real estate investment trust; President and CEO,
Director since 1996 Constellation Bancorp from 1991 through 1994; Former Chairman and Director,
Age 50 CoreStates New Jersey National Bank from 1994 through 1997; Director, Camelot
Music Holdings, Inc., a music retailing company, Atlas Steel Inc., a steel
manufacturing company, New Jersey Alliance for Action, and New Jersey World Trade
Council; Trustee, St. Peter's Medical Center, Woodbridge Economic Development
Corporation and the Public Affairs Research Institute of New Jersey, Inc.
</TABLE>
DIRECTORS WITH TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF LAURENCE M. Chairman of the Board of Directors of the Company since September 1996 and
DOWNES] President and Chief Executive Officer of the Company since July 1995; employed by
Laurence M. Downes the Company since 1985, including Senior Vice President and Chief Financial
Director since 1995 Officer from 1990 to 1995; Member, PNC Bank Regional Advisory Board; Director,
Age 41 American Gas Association; Chairman of the Board of Trustees, Georgian Court
College; Chairman, Jersey Shore Partnership; Director, New Jersey Alliance For
Action and Trustee, Prosperity New Jersey, Inc. (2)
</TABLE>
- ---------------
<TABLE>
<C> <S>
(1) Cahill Gordon & Reindel represents the Company as legal counsel with respect to various matters.
</TABLE>
<TABLE>
<C> <S>
(2) The Company and/or its subsidiaries maintain a banking relationship with PNC Bank of which Mr. Downes is a
member of the Regional Advisory Board. 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
banks. In December 1997, Mr. Downes (along with three other current or former officers of the Company)
entered into a settlement with the Securities and Exchange Commission ("SEC") in which he consented, without
admitting or denying the SEC's findings, to an administrative order finding that he was a cause of the
Company not fully complying with section 13(a) of the Securities Exchange Act of 1934, as amended, in
connection with the Company's reporting of certain 1992 Company subsidiary transactions. No fines or monetary
penalties were imposed upon him nor was his ability to act as an officer or director of a public company
otherwise limited.
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
<C> <S>
[PHOTO OF JOE B. FOSTER] Chairman and Chief Executive Officer of Newfield Exploration Company since
Joe B. Foster January 1989; Director, Baker Hughes, Inc., an oil and gas services company;
Director since 1994 Chairman of the National Petroleum Council and Member, Independent Petroleum
Age 64 Association of America.
</TABLE>
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
During fiscal 1998, there were ten meetings of the Board of Directors.
Except for Mr. Foster, each director attended no less than 75% of the combined
meetings of the Board of Directors and the Committees on which he or she served
during the year.
The Audit Committee, consisting of Leonard S. Coleman, Hazel S. Gluck,
Dorothy K. Light, Charles G. Stalon and Gary W. Wolf (Committee Chair), met five
times during fiscal 1998 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 Committee
did satisfy itself, and ultimately the Board, that these functions are being
carried out responsibly. The 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 Committee makes a recommendation to the Board
for the appointment of an independent accounting firm for the following fiscal
year.
The members of the Corporate Governance Committee are Bruce G. Coe, Leonard
S. Coleman, Hazel S. Gluck, Dorothy K. Light (Committee Chair) and John J.
Unkles, Jr. The purpose of the 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 five times in fiscal 1998. The Corporate Governance 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 November 14, 1999.
The Executive Committee consists of Bruce G. Coe (Committee Chair),
Laurence M. Downes, Lester D. Johnson, Dorothy K. Light, Gary W. Wolf and George
R. Zoffinger. 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 did not meet during fiscal 1998.
7
<PAGE> 10
The Financial Policy Committee, consisting of Joe B. Foster, Lester D.
Johnson (Committee Chair), Charles G. Stalon, John J. Unkles, Jr., Gary W. Wolf
and George R. Zoffinger, met three times during fiscal 1998 to review and make
recommendations to the Board concerning financing proposals, dividend
guidelines, and other corporate financial and pension matters.
The Management Development and Compensation Committee, consisting of Bruce
G. Coe, Joe B. Foster, Lester D. Johnson, John J. Unkles, Jr. and George R.
Zoffinger (Committee Chair), met once during fiscal 1998 to oversee the
performance and qualifications of senior management, and to review and make
recommendations regarding the annual compensation and benefits of all elected
officers of the Company and its subsidiaries.
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, except for the
chairperson of the Executive Committee, who receives an annual retainer of
$10,000. 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.
As of October 1, 1998, the annual retainer was increased to $14,800 with $4,000
paid in Company common stock and fees for all meetings attended increased to
$800. Effective October 1, 1998, a Supplemental Stock Option Program was
approved by the Board which provides that each outside director receive an
annual grant of 1,500 options, instead of the 1,000 options under the Restricted
Stock and Stock Option Program for Outside Directors ("Stock Option Program"),
for as long as he or she remains on the Board. All other terms of the Stock
Option Program remain the same. Directors who are also officers of the Company
or its subsidiaries do not receive additional compensation for serving on the
Board. All directors are reimbursed for any out-of-pocket expenses incurred in
attending Board or committee meetings.
REMUNERATION OF EXECUTIVE OFFICERS
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
The Management Development and Compensation Committee (the "Committee") of
the Board of Directors consists of five outside, non-employee directors. In
addition, as Chairman and Chief Executive Officer of the Company, Mr. Downes is
a non-voting, ex officio member of the Committee.
The Committee's 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 Committee also administers awards under certain
of the Company's employee benefit plans. Accordingly, the Committee reviews the
performance of the officers of the Company and the Company's subsidiaries, and
makes recommendations to the Board with respect to the compensation and benefit
programs that are applicable to officers of the Company and/or its subsidiaries.
The Committee each year has utilized a national compensation consultant
(the "Consultant") to review competitive compensation levels of senior
executives in the natural gas industry. Through this process, the Committee
identifies the competitive compensation levels, both with respect to base salary
and overall executive compensation packages, at the Company's peers. Many, but
not all of the compensation peer companies are contained in the Standard and
Poor's Utilities Index used in the performance graph on page 12.
The 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 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").
8
<PAGE> 11
Setting compensation levels for each executive officer is based upon the
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 1998 the
Committee reviewed executive accomplishments in total gas throughput, number of
new customers, cost of adding a new customer, earnings, expenses, return on
equity, market share, 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 Long-Term Incentive 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
are expected to receive a level of compensation approximately equivalent to the
average compensation paid to executives of the Company's peers. 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 Committee
considers the base salaries of executive officers in comparable positions in
other similarly situated natural gas companies and companies of similar size in
other industries. In setting levels, the Company currently targets the 50th
percentile of the relevant labor market. The Committee also considers the
executive's experience level, time and placement in grade 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 $294,000 is below the median compensation
for comparable companies.
INCENTIVE PLAN
Under the Incentive Plan, officers and certain key employees of the Company
and New Jersey Natural Gas Company, a wholly-owned subsidiary of the Company
("NJNG"), designated by the Committee, may receive additional cash compensation
based upon the Committee's thorough evaluation of the Company's performance
against a series of performance objectives. The 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. Awards under
the Incentive Plan are based upon a percentage of the base salary of each
eligible Incentive Plan participant during the year. Threshold, target and
maximum incentive award levels are established annually by the Committee for
each award group.
Individual awards are payable based on the executive's attainment of a
portfolio of goals including earnings, development of new business, leadership,
customer satisfaction and resource deployment. Incentive award levels provide
payments that are at the 60th percentile of the market, which is competitive
within the industry when performance results are fully achieved.
The incentive awards to executive officers for achievements in fiscal 1998
(paid in fiscal 1999), including the $135,000 incentive award made to Mr.
Downes, reflect overall results that were at target for the Company and only
slightly below for NJNG.
LONG-TERM PLAN
The Long-Term Plan provides for the award of stock options, (the "Stock
Options"), performance units, or restricted stock (the "Restricted Stock") to
designated employees. The Committee believes that Restricted Stock awards
provide executives a strong incentive to create earnings that could be the
foundation for the payment of dividends and as a focus on stock price
appreciation. As the value of the Company's stock is
9
<PAGE> 12
generally considered the strongest indicator of overall corporate performance,
awards of Stock Options, which allow the executive to benefit by appreciation in
stock price at no direct cost to the Company, and the performance-based
Restricted Stock, provide strong incentives to executives by relating a portion
of their compensation to the future value of the Company's stock. Additionally,
the use of stock-based compensation encourages individuals to act as
owners/managers and is an important means of fostering a mutual interest between
management and shareholders. In 1997, the Committee made two-year awards under
the Long-Term Plan in the form of Restricted Stock and Stock Options for 2/3 and
1/3 of the recipients' total target award value, respectively. There were no
awards under the Long-Term Plan in fiscal 1998.
OTHER
The Company did not pay any compensation in fiscal 1998 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
With the exception of Mr. Downes, who is a non-voting, ex officio member of
the Committee, no member of the 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.
MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE
<TABLE>
<S> <C>
Bruce G. Coe John J. Unkles, Jr.
Joe B. Foster George R. Zoffinger
Lester D. Johnson
</TABLE>
10
<PAGE> 13
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
--------------------
ANNUAL COMPENSATION RESTRICTED
------------------- STOCK ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION**
NAME AND PRINCIPAL POSITION YEAR* ($) ($) (#) (#) ($)
--------------------------- ----- -------- -------- ---------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Laurence M. Downes............... 1998 293,984 108,030 -- -- 3,200
Chairman, Chief Executive Officer 1997 276,408 70,000 4,185 18,256 3,363
and President 1996 209,375 60,000 -- 30,000 5,140
Glenn C. Lockwood................ 1998 150,123 46,450 -- -- 4,503
Senior Vice President & Chief 1997 134,146 25,000 1,740 7,589 4,024
Financial Officer 1996 113,342 50,000 -- 8,250 3,400
Timothy C. Hearne................ 1998 144,623 35,180 -- -- 4,338
Senior Vice President, Financial 1997 125,998 18,176 1,630 7,111 3,647
&
Administrative Services, NJNG 1996 109,473 12,030 -- 5,000 1,879
Joseph P. Shields................ 1998 131,431 42,400 -- -- 3,942
Senior Vice President, Energy 1997 119,146 30,000 1,227 5,350 3,588
Services, NJNG 1996 101,023 20,000 -- 4,250 3,031
Oleta J. Harden.................. 1998 136,823 36,405 -- -- 4,104
Senior Vice President, General 1997 131,825 15,147 1,365 5,952 3,955
Counsel & Secretary 1996 126,175 15,318 -- 7,000 3,785
</TABLE>
- ---------------
* For fiscal year ended September 30.
** Represents the Company's matching contributions under the Employee's
Retirement Savings Plan (the "Savings Plan").
OPTION GRANTS IN 1998 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------------
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF ANNUAL RATES OF STOCK
UNDERLYING TOTAL OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#) FISCAL YEAR ($/SH)(1) DATE 5% ($) 10% ($)
---- ---------- ------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Laurence M. Downes........... 0 0% 0 0 0 0
Glenn C. Lockwood............ 0 0% 0 0 0 0
Timothy C. Hearne............ 0 0% 0 0 0 0
Joseph P. Shields............ 0 0% 0 0 0 0
Oleta J. Harden.............. 0 0% 0 0 0 0
</TABLE>
11
<PAGE> 14
AGGREGATED OPTION EXERCISES IN 1998 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
SHARES NUMBER OF IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS OPTIONS AT
EXERCISE REALIZED AT FISCAL YEAR-END FISCAL
NAME (#) ($) (#) YEAR-END ($)
---- ----------- -------- --------------------------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Laurence M. Downes............. 0 0 30,074/32,649 207,482/268,497
Glenn C. Lockwood.............. 0 0 10,219/8,514 58,936/68,335
Timothy C. Hearne.............. 0 0 10,000/5,311 60,297/43,340
Joseph P. Shields.............. 0 0 5,350/4,250 19,394/33,469
Oleta J. Harden................ 0 0 11,163/7,523 83,792/61,793
</TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
<TABLE>
<CAPTION>
THE COMPANY S&P 500 S&P UTILITIES
<S> <C> <C> <C>
SEP-93 100 100 100
SEP-94 76 104 87
SEP-95 100 134 111
SEP-96 114 162 119
SEP-97 139 227 136
SEP-98 162 247 176
</TABLE>
- ---------------
* Assumes $100 invested on September 30, 1993, in the Company 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 "Plan") and any other defined benefit
supplementary or excess pension award plans) in specified compensation and years
of
12
<PAGE> 15
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:
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
<TABLE>
<CAPTION>
COMPENSATION 10 15 20 25 30 35 40
- ------------ ------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000.............. $16,926 $25,389 $33,852 $ 42,315 $ 50,778 $ 59,241 $ 66,272
150,000.............. 20,639 30,958 41,277 51,596 61,916 72,235 80,673
175,000.............. 24,351 36,527 48,702 60,878 73,053 85,229 95,073
200,000.............. 28,064 42,095 56,127 70,159 84,191 98,222 109,472
225,000.............. 31,776 47,664 63,552 79,440 95,328 111,216 123,872
250,000.............. 35,489 53,233 70,977 88,721 106,466 124,210 138,273
275,000.............. 39,201 58,802 78,402 98,003 117,603 137,204 152,673
300,000.............. 42,914 64,370 85,827 107,284 128,741 150,197 167,072
325,000.............. 46,626 69,939 93,252 116,565 139,878 163,191 181,472
</TABLE>
For the five executives named in the Summary Compensation Table,
compensation covered by the Plan equals their Base Salary.
The number of years of credited service at normal retirement for the named
executive officers are as follows:
<TABLE>
<CAPTION>
YEARS OF
NAME CREDITED SERVICE
- ---- ----------------
<S> <C>
Laurence M. Downes..................................... 37
Glenn C. Lockwood...................................... 38
Timothy C. Hearne...................................... 36
Joseph P. Shields...................................... 39
Oleta J. Harden........................................ 30
</TABLE>
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.
To the extent benefits that would otherwise be payable to an employee under
the Company's Savings Plan exceed the specified limits on such benefits imposed
by the Code, the Company intends to pay such excess benefits to the employee at
the time the employee receives payment under the Plan. These excess benefit
payments would be made from the general funds of the Company. As of September
30, 1998, no employee of the Company would have been entitled to payments for
benefits in excess of the Code limits under this policy.
The Company has supplemental retirement agreements ("Supplemental
Retirement Agreements") with Messrs. Downes, Lockwood, Hearne and Shields 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 amounts currently payable to Messrs. Downes,
Lockwood, Hearne and Shields and Mrs. Harden under their respective Supplemental
Retirement Agreements would be $250,000 for Mr. Downes, and $125,000 for the
remaining four officers named in the Summary Compensation Table.
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,
Lockwood, Hearne and Shields and Mrs. Harden, in the event of a change of
control of the Company, the right to the amounts
13
<PAGE> 16
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 in the Supplemental
Retirement Agreements as a reportable change of control under the proxy rules of
the SEC, 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, 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 5 executives named
in the Summary Compensation Table 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 of 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. The agreements further provide that,
if any such executive is subject to the so-called "golden parachute" excise tax
imposed under Section 4999 of the Code, the Company shall make an additional
payment to the executive in an amount sufficient to place the executive in the
same after-tax position as if no such excise taxes had been imposed. For
purposes of these agreements, a "Change of Control" generally means (i) the
acquisition by any person of beneficial ownership of securities representing 25%
or more of the combined voting power of the Company's securities; (ii) 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 of the Incumbent Directors and directors
previously approved by the Incumbent Directors ceasing to constitute a majority
of the Board or (iii) 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
stockholders of the Company immediately prior to such event do not hold,
directly or indirectly, a majority of the Voting Power (as defined in such
agreements) of the acquiring or surviving corporation.
APPOINTMENT OF AUDITORS
[ITEM (2) ON PROXY CARD]
ITEM 2
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, 1999. Each professional service performed by Deloitte &
Touche LLP during fiscal 1998 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
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. The Board has not
14
<PAGE> 17
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
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 regular
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 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2000 annual
meeting must be received by the Company on or before August 25, 1999 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 at least
$2,000 in market value and to have held such shares for at least one year prior
to the date of submission. Stockholder proposals submitted to the Company
outside the processes of Rule 14a-8 of the Exchange Act (i.e., the procedures
for placing a stockholder's proposal in the Company's proxy materials) with
respect to the Company's 2000 annual meeting of stockholders will be considered
untimely if received by the Company after November 14, 1999. Accordingly, the
proxy with respect to the Company's 2000 annual meeting of stockholders will
confer discretionary authority to vote on any stockholder proposals received by
the Company after such date.
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: December 22, 1998
15
<PAGE> 18
NJRC-PS-99
<PAGE> 19
DETACH HERE
PROXY
NEW JERSEY RESOURCES CORPORATION
1415 Wyckoff Road, Wall, NJ 07719
Solicited on behalf of the BOARD OF DIRECTORS
for the 1999 Annual Meeting of Stockholders
The undersigned hereby appoints Oleta J. Harden, with full power of
substitution, 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, January 27, 1999 at the Robert B. Meyner Reception Center at
the PNC Bank Arts Center, Exit 116 on the 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
applicable, hereby directs the trustee(s) of the 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.
- ----------------- -----------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------------- -----------------
<PAGE> 20
/x/ Please mark votes as in this example.
1. Election of Directors
Nominees: Nina Avarsano, Leonard S. Coleman, Lester D. Johnson,
Dorothy K. Light
/ / FOR ALL NOMINEES / / WITHHELD FROM ALL NOMINEES
/ / _________________________________________
For all nominees except as noted above
2. To approve the retention of Deloitte & Touche, LLP as auditors for
the fiscal year ending September 30, 1999.
/ / FOR / / AGAINST / / ABSTAIN
3. To transact any other business that may properly be brought before the
meeting or any adjournment or adjournments thereof.
Unless otherwise indicated, this proxy will be voted "FOR" all nominees
for election as directed and "FOR" the proposals referred to herein.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
MARK HERE IF YOU PLAN TO ATTEND 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:________________
