SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 1995 Commission File # 1-8353
NUI CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-1869941
(State of incorporation) (I.R.S. employer identification no.)
550 Route 202-206, P.O. Box 760, Bedminster, New Jersey 07921-0760
(Address of principal executive offices, including zip code)
(908) 781-0500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, No Par Value New York Stock Exchange, Inc.
(Title of class) (Name of exchange on which
registered)
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days:
X
Indicate by check mark if disclosure of delinquent filers, pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to the Form 10-K:
X
The aggregate market value of 8,002,651 shares of common stock held by
non-affiliates of the registrant calculated using the $16.50 per share
closing price on November 30, 1995 was: $132,043,742.
The number of shares outstanding of each of the registrant's classes of
common stock, as of November 30, 1995:
Common Stock, No Par Value: 9,201,237 shares outstanding.
Documents incorporated by reference: NUI Corporation's definitive Proxy
Statement for the Company's Annual Meeting of Stockholders, which is
expected to be filed with the Securities and Exchange Commission no
later than 120 days subsequent to September 30, 1995.<PAGE>
NUI Corporation
Annual Report on Form 10-K For The
Fiscal Year Ended September 30, 1995
TABLE OF CONTENTS
PART I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 9
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . 13
Item 8. Financial Statements and Supplementary Data . . . . . . . . . 20
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . . . . 20
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . 20
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . 20
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . . . 20
Item 13. Certain Relationships and Related Transactions . . . . . . . 20
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 21<PAGE>
NUI Corporation
Annual Report on Form 10-K for the
Fiscal Year Ended September 30, 1995
PART I
Item 1. Business
NUI Corporation ("NUI" or the "Company") was incorporated in New
Jersey in 1969, and is engaged primarily in the sale and transportation
of natural gas. The Company serves more than 354,000 utility customers
in six states through its Northern and Southern operating divisions. The
Northern Division operates in New Jersey as Elizabethtown Gas Company.
The Southern Division was formed effective April 1, 1995 through the
consolidation of the Company's City Gas Company of Florida and
Pennsylvania & Southern Gas Company ("PSGS") operations (see Note 3 of
the Notes to the Consolidated Financial Statements). PSGS, which
operated as North Carolina Gas Service, Elkton Gas Service (Maryland),
Valley Cities Gas Service (Pennsylvania) and Waverly Gas Service (New
York), was acquired by the Company on April 19, 1994 (see Note 2 of the
Notes to the Consolidated Financial Statements).
In addition to its gas distribution operations, the Company
provides gas sales and related services through its Natural Gas
Services, Inc. subsidiary, and bill processing and related customer
services for utilities and municipalities through its Utility Billing
Services, Inc. subsidiary.
The principal executive offices of the Company are located at
550 Route 202-206, Box 760, Bedminster, NJ 07921-0760; telephone:
(908) 781-0500.
Territory and Customers Served
See Item 6 - "Selected Financial Data-Summary Consolidated
Operating Data" for summary information by customer class with respect
to operating revenues, gas volumes sold or transported and average
utility customers served. The Company's utility operations serve more
than 354,000 customers, of which approximately 67% are in New Jersey and
33% are in the Southern Division states. Approximately 54% of the
Company's customers are residential and commercial customers that
purchase gas primarily for space heating. The Company's operating
revenues for fiscal 1995 amounted to $376.4 million, of which
approximately 76% was generated in New Jersey, and 24% was generated by
operations in the Southern Division states. Gas volumes sold or
transported in fiscal 1995 amounted to 85.9 million Mcf, of which
approximately 80% was sold or transported in New Jersey, and 20% was
sold or transported in the Southern Division states. An Mcf is a basic
unit of measurement for natural gas comprising 1,000 cubic feet of gas.
Northern Division The Company, through its Northern Division,
provides gas service to approximately 237,000 customers in franchised
territories within seven counties, or portions thereof, in central and
northwestern New Jersey. The Northern Division's 1,300 square-mile
service territory has a total population of approximately 950,000. Most<PAGE>
of the Northern Division's customers are located in densely-populated
central New Jersey, where increases in the number of customers are
primarily from conversions to gas heating from alternative forms of
heating.
The Northern Division's gas volumes sold or transported and
customers served for the past three fiscal years were as follows:
Gas Volumes Sold or Transported (in thousands of
Mcf)
1995 1994 1993
Firm Sales:
Residential 17,855 20,315 19,115
Commercial 10,275 11,528 10,463
Industrial 4,595 5,025 4,781
Interruptible
Sales 15,440 14,156 12,345
Unregulated Sales 1,044 -- --
Transportation 17,202 14,367 15,459
Services ------ ------ ------
Total 66,411 65,391 62,163
====== ====== ======
Customers Served (twelve-month average)
1995 1994 1993
Firm Sales:
Residential 159,191 155,473 151,621
--Heating
Residential-- 59,688 61,012 62,520
Non-heating
Commercial 17,350 16,966 16,588
Industrial 349 360 377
Interruptible
Sales 75 74 75
Transportation 138 94 85
Services ------- ------- -------
Total 236,791 233,979 231,266
======= ======= =======
Gas volumes sold to the Company's firm customers are sensitive to
the weather in New Jersey. In fiscal 1995, the weather in New Jersey was
13% warmer than normal, thereby decreasing gas sales. Weather in fiscal
1994 was normal and was 6% warmer than normal in fiscal 1993. The
Northern Division's tariff contains a weather normalization clause that
is designed to help stabilize the Company's results by increasing
amounts charged to customers when weather has been warmer than normal
and decreasing amounts charged when weather has been colder than normal.
For a further discussion on variations in revenues, see Item 7,
"Management's Discussion and Analysis of Financial Condition and Results
of Operations".
The growth in the number of residential heating customers
principally reflects the Company's marketing emphasis to convert
residential non-heating customers to full gas heating service.
Approximately 70% of the residential heating customers added in New
Jersey since 1991 represented homes that were converted to gas heating
from other forms of space heating and the remainder consisted of new
homes. Approximately 40 new residential developments are at various<PAGE>
stages of the approval process before municipal planning boards
throughout the Northern Division's service territory.
As discussed further under "Regulation", effective January 1,
1995, the New Jersey Board of Public Utilities (the "NJBPU") authorized
new tariffs which are designed to provide for the unbundling of natural
gas transportation and sales service to commercial and industrial
customers. As of September 30, 1995, 165 commercial sales customers had
switched to transportation service under the new tariff. Despite the
transfers to transportation service, the number of commercial customers
increased reflecting the Company's marketing emphasis on commercial
conversions. In fiscal 1995, 35 schools and 588 businesses, which are
subject to New Jersey legislation requiring the registration, systematic
testing and monitoring of underground fuel oil and propane storage
tanks, converted to gas heating systems or switched from interruptible
service to commercial firm service. In addition, changing economic
conditions, coupled with environmental concerns and legislation, are
creating a market for natural gas for large commercial air conditioning
units and compressed natural gas fleet vehicles. The Company also has an
economic development program to help spur economic growth and jobs
creation which provides grants and reduced rates for qualifying
businesses that start up, relocate or expand within designated areas.
The Company's industrial customers also have the ability to
switch to transportation service and purchase their gas from other
suppliers. The rate charged to transportation customers is less than the
rate charged to firm industrial and commercial sales customers because
the transportation customer rate does not include any cost of gas
component. However, the operating margins from both rates are
substantially the same.
The Northern Division's "interruptible" customers have
alternative energy sources and use gas on an "as available" basis.
Variations in the volume of gas sold or transported to these customers
do not have a significant current effect on the Company's earnings
because, in accordance with New Jersey regulatory requirements, 90% to
95% of the margins that otherwise would be realized on gas sold or
transported to interruptible customers are used to reduce gas costs
charged to firm customers.
The Company provides gas sales and transportation services
comprising twenty percent of the primary fuel requirements of a 614
megawatt cogeneration facility that began commercial operation in New
Jersey in July 1992 to supply electric power to New York City. In fiscal
1995, sales and transportation of gas to this customer accounted for
approximately 5% of the Company's operating revenues and approximately
9% of total gas sold or transported. The Company is authorized by the
NJBPU to retain a total of approximately $2.3 million of the operating
margins realized from these sales over approximately four years. Through
fiscal 1995, the Company realized all of this amount, of which
approximately $0.6 million was realized during fiscal 1995. All future
operating margins that otherwise would be realized on gas sold or
transported to the facility will be used to reduce gas costs charged to
firm customers.
In order to maximize the Company's gas supply portfolio, in
fiscal 1995 the Company began selling available gas supply and excess
interstate pipeline capacity to third party customers and other gas
service companies. The price of gas sold to these customers is not
regulated by the NJBPU, however the NJBPU has authorized that 80% of the<PAGE>
margins realized from these sales be used to reduce gas costs charged to
firm customers.
Southern Division
City Gas Company of Florida ("CGF"). CGF is the second largest
natural gas utility in Florida, supplying gas to over 95,000 customers
in Dade and Broward Counties in south Florida, and in Brevard and St.
Lucie Counties on the central eastern coast of Florida. CGF's service
areas cover approximately 850 square miles and have a population of
approximately 500,000.
CGF's gas volumes sold or transported and customers served for
the past three fiscal years were as follows:
Gas Volumes Sold or Transported (in thousands of
Mcf)
1995 1994 1993
Firm Sales:
Residential 1,982 1,983 1,904
Commercial 4,198 4,439 4,455
Interruptible
Sales 1,533 1,958 2,186
Transportation 1,313 1,063 980
Services ----- ----- -----
Total 9,026 9,443 9,525
===== ===== =====
Customers Served (twelve-month average)
1995 1994 1993
Firm Sales:
Residential 90,960 87,194 83,541
Commercial 4,615 4,539 4,428
Interruptible
Sales 20 28 30
Transportation 24 8 2
Services ------ ------ ------
Total 95,619 91,769 88,001
====== ====== ======
CGF's residential customers purchase gas primarily for water
heating, clothes drying and cooking. Some customers, principally in
Brevard County, also purchase gas to provide space heating during the
relatively mild winter season. The growth in the average number of
customers from fiscal 1993 to fiscal 1995 primarily reflects new
construction. In fiscal 1996, CGF will focus on developing the
commercial and residential margin potential from mains currently in
place while selectively expanding to future development areas.
The Company initiated natural gas service to St. Lucie County in
fiscal 1993 through the construction of a gate station interconnection
with the interstate pipeline system, acquisition and conversion of an
existing underground propane system and the extension of mains to<PAGE>
potential growth areas within the city of Port St. Lucie. The Company
substantially completed expansion of its mains in fiscal 1994. The net
investment in utility plant in the city as of September 30, 1995 was
$3.9 million. Of this amount, $2.4 million was included in the
determination of a permanent rate increase authorized by the Florida
Public Service Commission (the "FPSC") in November 1994 (see
"Regulation"). As of September 30, 1995, service was provided to
approximately 600 residential and commercial customers in St. Lucie
County. The Company anticipates that this start-up development project
will generate increased margins over time. The Company has the
opportunity to seek FPSC approval to add the remainder of this start-up
investment to its permanent rates as new customers are added.
As further discussed under "Regulation", the November 29, 1994
FPSC order that authorized new permanent rates for CGF, removed the
Company's leased appliance business from regulation by the FPSC. The
Company raised its leasing rates effective February 1995, and in fiscal
1995, the appliance leasing operations generated operating revenues of
$3.6 million and operating income before income taxes of $1.4 million.
As of September 30, 1995, the Company's net investment in leased
appliances amounted to $15.1 million. The Company anticipates higher
returns from this business in fiscal 1996.
CGF's commercial business consists primarily of schools,
businesses and public facilities, of which the number of customers tends
to increase concurrently with the continuing growth in population within
its service areas. As with its residential markets, the Company is
seeking to maximize the utilization of its existing mains by emphasizing
marketing efforts toward potential commercial business along these
lines.
CGF's industrial customers and certain commercial customers are
served under tariffs applicable to "interruptible" customers. Unlike
the Company's Northern Division, CGF's interruptible customers do not
generally have alternative energy sources, although their service is on
an "as available" basis. The Company retains all of the operating
margins from sales to these customers and does not expect any
significant impact to the Company's earnings from any service
interruptions which may occur.
Certain commercial and industrial customers have converted their
natural gas service from a sales basis to a transportation basis. CGF's
transportation tariff provides margins on transportation services that
are substantially the same as margins earned on gas sales.
North Carolina Gas Service ("NCGS"). The Company, through NCGS,
provides gas service to approximately 12,600 customers in Rockingham and
Stokes Counties in North Carolina, which territories comprise
approximately 560 square miles. During fiscal 1995, NCGS sold or
transported approximately 3.8 million Mcf of gas as follows: 20% sold to
residential customers, 13% sold to commercial customers, 43% sold to
industrial customers and 24% transported to commercial and industrial
customers.
Elkton Gas Service ("Elkton"). The Company, through Elkton,
provides gas service to approximately 3,200 customers in franchised
territories comprising approximately 14 square miles within Cecil
County, Maryland. During fiscal 1995, Elkton sold approximately 512,000
Mcf of gas as follows: 34% sold to residential customers, 34% sold to
commercial customers and 32% sold to industrial customers.<PAGE>
Valley Cities Gas Service ("VCGS") and Waverly Gas Service
("WGS"). VCGS and WGS provide gas service to approximately 5,700
customers in franchised territories comprising 104 square miles within
Bradford County, Pennsylvania and the Village of Waverly, New York and
surrounding areas, respectively. During fiscal 1995, VCGS and WGS sold
or transported approximately 3.7 million Mcf of gas as follows: 14% sold
to residential customers, 7% sold to commercial customers, 6% sold to
industrial customers and 73% transported to commercial and industrial
customers.
Gas Supply and Operations
In recent years, the gas industry has been undergoing structural
changes in response to policies of the Federal Energy Regulatory
Commission (the "FERC") and local regulatory commissions designed to
increase competition. Traditionally, interstate pipelines were
wholesalers of natural gas to local distribution companies and generally
did not provide separate transportation or other services for specific
customers. In 1985, the FERC adopted Order No. 436 that encouraged
interstate pipelines to make transportation of gas available to
customers on a non-discriminatory basis. Such voluntary "open access" by
certain interstate pipelines enhanced the opportunity for local gas
distribution companies and industrial customers to purchase natural gas
directly from gas producers and others. In 1992, the FERC issued Order
No. 636 that, among other things, mandated the separation or
"unbundling" of interstate pipeline sales, transportation and storage
services and established guidelines for capacity management effective in
1993. In fiscal 1995, the NJBPU unbundled the rates charged to New
Jersey commercial and small industrial customers as well. The transition
to more competitive rates and services has the effect of increasing the
opportunity for local gas distribution companies and industrial and
commercial customers to purchase natural gas from alternative sources,
while increasing the potential business and regulatory risk borne by a
local gas distribution company with respect to the acquisition and
management of natural gas services. Although the implementation of Order
No. 636 involved the restructuring of the Company's contracts with all
of its pipeline suppliers, the most significant restructuring pertains
to certain pipelines that together deliver less than one-third of the
Company's total firm gas supply.
Under Order No. 636 the pipeline companies are passing through to
their customers transition costs associated with mandated restructuring,
such as costs resulting from buying out unmarketable gas purchase
contracts. The Company has been charged approximately $7 million of such
costs as of September 30, 1995, which the Company has been authorized to
recover through its purchased gas adjustment clauses. The Company
currently estimates that its remaining Order No. 636 transition
obligation will be approximately $9.1 million, which it expects to also
recover through the Company's purchased gas adjustment clauses as these
costs are incurred. This transition obligation is subject to possible
future FERC actions based upon filings by the Company's pipeline
suppliers.
The Company endeavors to utilize its pipeline capacity
efficiently by matching capacity to its load profile to the extent
feasible. To this end, the Company has had a broad unbundled service
tariff for certain of its customers since 1987. The Company continues to
avail itself of opportunities to improve the utilization of its pipeline
capacity by pursuing broad based customer growth, including off-peak<PAGE>
markets, markets not on its distribution system, and utilizing capacity
release provisions within Order No. 636 when operationally feasible.
The Company's gas supply during fiscal 1995, came from the
following sources: approximately 13% from purchases under contracts with
primary pipeline suppliers and additional purchases under their filed
tariffs; approximately 87% from purchases from various producers and gas
marketers, and purchases under long-term contracts with independent
producers and less than 1% from propane and liquefied natural gas
("LNG"). The Company manages its gas supply portfolio to assure a
diverse, reliable and secure supply of natural gas at the lowest
reasonable cost. In fiscal 1995, the Company's largest single supplier
accounted for 13% of the Company's total gas purchases.
The Company has long-term gas delivery contracts with seven
interstate pipeline companies. Under these contracts, the Company has a
right to delivery, on a firm year-round basis, of up to 92.2 million Mcf
of natural gas annually with a maximum of approximately 273,000 Mcf per
day. Both the price and conditions of service under these contracts are
regulated by the FERC.
The Company has long-term gas purchase contracts for the supply
of natural gas for its system with nine suppliers, including two
interstate pipeline companies, four gas marketers and three independent
producers. The Company also has a long-term supply and delivery contract
with an interstate pipeline. Under these contracts, the Company has a
right to purchase, on a firm year-round basis, up to 45.6 million Mcf of
natural gas annually with a maximum of approximately 132,000 Mcf per
day. In addition, the Company has access to spot market gas through the
interstate pipeline system to supplement or replace, on a short-term
basis, portions of its long-term gas purchase contracts when such
actions can reduce overall gas costs or are necessary to supply
interruptible customers. In fiscal 1995, the Company, along with seven
other Northeastern and Mid-Atlantic gas distribution companies, formed
the East Coast Natural Gas Cooperative LLC (the "Co-op"). The Co-op was
formed with the goal of jointly managing certain portions of the
members' gas supply portfolios, to increase reliability and reduce costs
of service to customers, and to improve the competitive position of the
member companies.
In order to have available sufficient quantities of gas during
the heating season, the Company stores gas during non-peak periods and
purchases supplemental gas, including propane, LNG and gas available
under contracts with certain large cogeneration customers, as it deems
necessary. The storage contracts provide the Company with an aggregate
of 15.6 million Mcf of natural gas storage capacity and provide the
Company with the right to receive a maximum daily quantity of 176,100
Mcf. The contracts with cogeneration customers provide 35,800 Mcf of
daily gas supply to meet peak loads by allowing the Company to take back
capacity and supply that otherwise is dedicated to serve those
customers.
The Company's peak load facilities in New Jersey include a
propane-air plant with a daily production capacity of 27,400 Mcf, fixed
propane storage totaling 674,000 gallons and rail car sidings capable of
storing an additional 300,000 gallons. The Company has an LNG storage
and vaporization facility with a daily delivery capacity of 24,300 Mcf
and storage capacity of 131,000 Mcf. <PAGE>
The Company's maximum daily sendout in fiscal 1995 was
approximately 329,800 Mcf in its Northern Division and 87,500 Mcf in the
Southern Division states combined. The Company maintains sufficient gas
supply and delivery capacity for a maximum daily sendout capacity for
the Northern Division of approximately 380,900 Mcf and approximately
122,200 Mcf for the Southern Division states combined.
Certain of the Company's long-term contracts for the supply,
storage and delivery of natural gas include fixed charges that amount to
approximately $78 million annually. The Company currently recovers, and
expects to continue to recover, such fixed charges through its purchased
gas adjustment clauses. The Company also is committed to purchase, at
market-related prices, minimum quantities of gas that, in the aggregate,
are approximately 9 million Mcf per year or to pay certain costs in the
event the minimum quantities are not taken. The Company expects that
minimum demand on its systems for the duration of these contracts will
continue to exceed these minimum purchase obligations.
The Company is authorized by its state regulatory commissions to
recover through rates (exclusive of carrying costs), surcharges from its
pipeline suppliers that relate to take-or-pay obligations that the
suppliers had with natural gas producers.
The Company distributes gas through approximately 5,800 miles of
steel, cast iron and plastic mains. The Company has physical
interconnections with five interstate pipelines in New Jersey and one
interstate pipeline in Florida. In addition, the Company has physical
interconnections in North Carolina and Pennsylvania with interstate
pipelines which also connect to the Northern Division. Common interstate
pipelines along the Company's operating system provide the Company with
greater flexibility in managing pipeline capacity and supply, and
thereby optimize system utilization.
Regulation
The Company is subject to regulation with respect to, among other
matters, rates, service, accounting and the issuance of securities. The
Company is subject to regulation as an operating utility by the public
utility commissions of the states in which it operates. The Company is
also subject to regulation by the United States Department of
Transportation under the Natural Gas Pipeline Safety Act of 1968, with
respect to the design, installation, testing, construction and
maintenance of pipeline facilities. Natural gas purchases,
transportation service and storage service provided to the Company by
interstate pipeline companies are subject to regulation by the FERC (see
"--Gas Supply and Operations"). In addition, the Company is subject to
federal and state legislation with respect to water, air quality, solid
waste disposal and employee health and safety matters and to
environmental regulations issued by the United States Environmental
Protection Agency, the New Jersey Department of Environmental Protection
and other federal and state agencies.
The Company's current rates and tariffs for its Northern Division
reflect a rate case that was settled in October 1991, under which the
Company obtained a weather normalization clause - see "Territory and
Customers Served - Northern Division". In December 1994, the NJBPU
authorized new tariffs which are designed to provide for unbundling of
natural gas transportation and sales services for Northern Division
commercial and industrial customers. The new tariffs became effective on<PAGE>
January 1, 1995 and are designed to be neutral as to the operating
margins of the Company.
On November 29, 1994, the FPSC voted to authorize the Company to
increase its base rates in Florida by $1.6 million annually (the "FPSC
Order"). The FPSC Order provides for a rate base amounting to
approximately $82.6 million with an overall allowed after-tax rate of
return of 7.26%. In addition, the FPSC Order provides for several
tariff changes designed to promote growth in developing markets for
natural gas and approved the deregulation of the Florida operation's
leased appliance business which consists of leasing water heaters,
clothes dryers and ranges to customers (see "Territory and Customers
Served - Southern Division-Florida" ). The Company is currently
evaluating the need to seek a rate increase in fiscal 1996, as well as
tariff adjustments to improve the Florida operation's competitive
position with respect to large volume customers.
The current rates and tariffs for the North Carolina, Maryland,
Pennsylvania and New York operations were authorized between October
1988 and September 1995. These operations serve approximately 20,000
customers in aggregate. On September 20, 1995, the North Carolina
Utilities Commission approved a stipulation to increase the Company's
base rates in North Carolina by $385,000 annually. The tariff for NCGS
reflects a weather normalization clause for its heat sensitive
residential and commercial customers.
The Company's tariffs contain adjustment clauses that enable the
Company to recover purchased gas costs. The adjustment clauses provide
for periodic reconciliations of actual recoverable gas costs with the
estimated amounts that have been billed. Under or over recoveries at
the reconciliation date are recovered from or refunded to customers in
subsequent periods.
Seasonal Aspects
Sales of gas to some classes of customers are affected by
variations in demand due to changes in weather conditions, including
normal seasonal variations throughout the year. The demand for gas for
heating purposes is closely related to the severity of the winter
heating season. Seasonal variations affect short-term cash requirements.
Persons Employed
As of September 30, 1995, the Company employed 1,079 persons, of
which 270 employees in the Northern Division were represented by the
Utility Workers Union of America (Local 424), 105 employees in Florida
and 17 employees in Pennsylvania were represented by The Teamsters
Union, and 43 employees in North Carolina were represented by the
International Brotherhood of Electrical Workers. The current collective
bargaining agreement with the Northern Division's union was negotiated
effective November 20, 1994 and expires on November 20, 1998. The North
Carolina union collective bargaining agreement was negotiated on August
20, 1995, and expires on August 20, 1998. The collective bargaining
agreements in Pennsylvania and Florida expire on September 30, 1996 and
March 31, 1997, respectively.
Competition<PAGE>
The Company competes with distributors of other fuels and forms
of energy, including electricity, fuel oil and propane, in all portions
of the territories in which it has distribution mains. In 1992, the
FERC issued Order No. 636 (see "Gas Supply and Operations").
Subsequently, initiatives were sponsored in various states, the purposes
of which were to "unbundle" or separate into distinct transactions the
purchase of the gas commodity from the purchase of transportation
services for the gas. To that end, as discussed under "Regulation", New
Jersey has unbundled commercial and industrial gas purchase and
transportation rates.
The unbundled sale of gas to customers is subject to competition
from unregulated marketers and brokers, which generally do not bear the
obligations or costs related to operating a regulated utility. Tariffs
for transportation service have generally been designed to provide the
same margins as bundled sales tariffs. Therefore, the Company is
financially indifferent as to whether it transports gas, or sells gas
and transportation together. The Company also faces the risk of loss of
transportation service for large industrial customers which may have the
ability to build connections to interstate gas pipelines and bypass the
Company's distribution system. With the final implementation of FERC
Order No. 636, the FERC is no longer discouraging such direct
connections. Gas distributors can also expect increased competition from
electricity as deregulation in that industry decreases prices and
increases supply sources. Alternatively, opportunities may increase for
gas service to fuel generators for large industrial customers, replacing
electric utility service.
The Company believes that in order to compete, it must offer a
greater variety of services at more competitive prices. See Item 7 -
"Management's Discussion and Analysis of Financial Condition and Results
of Operations - Outlook and Business Plan" for a discussion of the
Company's preparation for the impact of increased competition.
Franchises
The Company holds non-exclusive municipal franchises and other
consents which enable it to provide natural gas in the territories it
serves. The Company intends to renew these franchises and consents as
they expire.
Environment
Reference is made to Item 7- "Management's Discussion and
Analysis of Financial Condition and Results of Operations- Capital
Expenditures and Commitments" and Note 10, "Commitments and
Contingencies" of the "Notes to the Consolidated Financial Statements"
for information regarding environmental matters affecting the Company.
Item 2. Properties
The Company owns approximately 5,800 miles of steel, cast iron
and plastic gas mains, together with gate stations, meters and other gas
equipment. In addition, the Company owns peak shaving plants, including
an LNG storage facility in Elizabeth, New Jersey.
The Company also owns real property in Union, Middlesex, Warren,
Sussex and Hunterdon Counties in New Jersey, and in Dade, Broward,
Brevard and St. Lucie Counties in Florida, portions of which are under<PAGE>
lease to others. The Company's owned properties include a general office
building in Hialeah, Florida, that serves as the Southern Division's
headquarters; another office facility in Rockledge, Florida; and office
buildings in both Reidsville, North Carolina and Sayre, Pennsylvania,
which serve as operating offices for the North Carolina and the
Pennsylvania and New York operations, respectively. The Company also
owns various service centers in New Jersey, Florida, North Carolina,
Maryland and Pennsylvania from which the Company dispatches service
crews and conducts construction and maintenance activities.
The Company leases office space in Bedminster, New Jersey, that
serves as its corporate headquarters and leases certain other facilities
in New Jersey and Florida that are operated as customer business offices
or operating offices. The Company also leases approximately 160,000
square feet in an office building in Union, New Jersey, which serves as
the Northern Division's headquarters.
Subject to minor exceptions and encumbrances, all other property
materially important to the Company and all principal plants are owned
in fee simple, except that most of the mains and pipes are installed in
public streets under franchise or statutory rights or are constructed on
rights of way acquired from the apparent owner of the fee.
Item 3. Legal Proceedings
The Company is involved in various claims and litigation
incidental to its business. In the opinion of management, none of these
claims and litigation will have a material adverse effect on the
Company's results of operations or its financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was presented for submission to a vote of security
holders through the solicitation of proxies or otherwise during the last
quarter of fiscal 1995.<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
NUI common stock is listed on the New York Stock Exchange and is
traded under the symbol "NUI". The quarterly cash dividends paid and the
reported high and low closing prices per share of NUI common stock for
the two years ended September 30, 1995 were as follows:
Quarterly Price Range
Cash
Dividend High Low
Fiscal 1995:
First Quarter $0.225 $18.375 $13.50
Second Quarter 0.225 16.50 14.25
Third Quarter 0.225 17.50 14.625
Fourth Quarter 0.225 16.875 14.875
Fiscal 1994:
First Quarter $0.40 $29.00 $25.25
Second Quarter 0.40 28.75 24.125
Third Quarter 0.40 24.50 21.00
Fourth Quarter 0.40 22.75 17.75
There were 6,890 shareholders of record of NUI common stock at
November 30, 1995.
It is the Company's intent to continue to pay quarterly dividends
in the foreseeable future. The Company seeks for its annual dividend
payout ratio to be consistent with industry standards. However, NUI's
dividend policy is reviewed on an ongoing basis and is dependent upon
the Company's expectation of future earnings, cash flow, financial
condition, capital requirements and other factors.
The Company's long-term debt agreements include, among other
things, restrictions as to the payment of cash dividends. Under the most
restrictive of these provisions, the Company is permitted to pay $17
million of cash dividends at September 30, 1995.<PAGE>
Item 6. Selected Financial Data
<TABLE>
Selected Consolidated Financial Data
(in thousands, except per share amounts)
<CAPTION>
Fiscal Years Ended September 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operating Revenues $376,445 $405,240 $367,456 $302,429 $301,707
Net Income $ 5,517 $ 10,780 $ 13,810 $ 11,808 $ 3,447
Net Income Per Share $ 0.60 $ 1.25 $ 1.70 $ 1.68 $ 0.55
Dividends Paid Per Share $ 0.90 $ 1.60 $ 1.59 $ 1.58 $ 1.57
Total Assets $610,165 $601,648 $ 483,911 $467,321 $406,491
Capital Lease Obligations $ 11,114 $ 11,932 $ 12,290 $ 13,422 $ 14,871
Long-Term Debt 222,060 160,928 142,090 131,546 106,189
Common Shareholders' Equity 140,912 142,768 122,384 116,933 85,182
Common Shares Outstanding 9,201 9,157 8,201 8,036 6,342
</TABLE>
Notes to the Selected Consolidated Financial Data:
Net Income for fiscal 1995 includes restructuring and other non-recurring
charges amounting to $5.6 million (after tax), or $0.61 per share.
Net income for fiscal 1994 includes the reversal of $1.8 million of income tax
reserves and restructuring and other non-recurring charges amounting to $0.6
million (after tax). The effect of these items increased net income by $1.2
million, or $0.14 per share.
Net income for fiscal 1991 includes provisions to write off certain merger-
related fees and expenses and to write down certain properties and investments
amounting to $3.3 million (after tax), or $0.53 per share.<PAGE>
<TABLE>
Summary Consolidated Operating Data
<CAPTION>
Fiscal Years Ended September 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operating Revenues
(Dollars in thousands)
Firm Sales:
Residential $173,395 $191,297 $172,749 $147,650 $145,882
Commercial 98,541 110,574 97,966 80,470 79,846
Industrial 20,083 25,809 23,066 21,928 24,914
Interruptible Sales 48,282 53,077 48,254 32,758 35,956
Unregulated Sales 7,498 1,426 1,757 -- --
Transportation Services 17,696 13,273 12,154 10,410 7,792
Customer Service, 10,950 9,784 11,510 9,213 7,316
Appliance Leasing and ------- ------- ------- ------- -------
Other
$376,445 $405,240 $367,456 $302,429 $301,706
======== ======= ======= ======= =======
Gas Sold or Transported
(MMcf)
Firm Sales:
Residential 21,276 22,558 21,019 20,251 18,133
Commercial 15,455 16,175 14,918 14,006 12,599
Industrial 5,217 5,323 4,781 5,052 5,427
Interruptible Sales 18,365 16,024 13,627 11,142 12,624
Unregulated Sales 3,398 689 904 -- --
Transportation Services 22,154 17,290 16,439 14,816 11,778
------ ------ ------ ------ ------
85,865 78,059 71,688 65,267 60,561
====== ====== ====== ====== ======
Average Utility
Customers Served
Firm Sales:
Residential 328,773 312,647 297,682 295,449 291,571
Commercial 24,510 22,726 21,016 20,670 20,292
Industrial 392 382 377 402 427
Interruptible Sales 131 101 105 104 106
Transportation Services 191 137 87 69 55
------- ------- ------- ------- -------
353,997 335,993 319,267 316,694 312,451
======= ======= ======= ======= =======
Degree Days in New 4,333 4,944 4,703 4,880 4,219
Jersey (normal: 4,978)
Employees (year end) 1,079 1,186 1,011 979 965
Ratio of Earnings to
Fixed Charges 1.37 1.66 2.10 1.90 1.76<PAGE>
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis refers to NUI Corporation
and all of its operating divisions and subsidiaries (collectively
referred to as "NUI" or the "Company"). The Company, through its
Northern and Southern Divisions, has utility operations in six states.
The Northern Division operates in New Jersey as Elizabethtown Gas
Company. The Southern Division was formed effective April 1, 1995
through the consolidation of the Company's City Gas Company of Florida
and Pennsylvania & Southern Gas Company ("PSGS") operations (see Note 3
of the Notes to the Consolidated Financial Statements). PSGS, which has
operations in North Carolina, Maryland, Pennsylvania and New York, was
acquired on April 19, 1994 (the "PSGS Merger") (see Note 2 of the Notes
to the Consolidated Financial Statements).
Results of Operations
Fiscal Years Ended September 30, 1995 and 1994
Net Income. Net income for fiscal 1995 was $5.5 million, or
$0.60 per share, as compared with net income of $10.8 million, or $1.25
per share in fiscal 1994. The decrease is primarily due to non-
recurring charges which, on an after-tax basis, were approximately $5.6
million, or $0.61 per share, and the reversal in fiscal 1994 of
approximately $1.8 million of income tax reserves. Partially offsetting
this decrease was approximately $1.6 million of additional net income
attributable to the inclusion of PSGS in the entire fiscal 1995 results.
Absent the non-recurring charges, net income for fiscal 1995 would have
been $11.1 million, or $1.21 per share.
Net income per share in fiscal 1995 was also reduced as a result
of the increased number of outstanding shares of NUI common stock as
compared to the prior year.
Operating Revenues and Operating Margins. The Company's operating
revenues include amounts billed for the cost of purchased gas pursuant
to purchased gas adjustment clauses. Such clauses enable the Company to
pass through to its customers, via periodic adjustments to customers'
bills, increased or decreased costs incurred by the Company for
purchased gas without affecting operating margins. Since the Company's
utility operations do not earn a profit on the sale of the gas
commodity, the Company's level of operating revenues is not necessarily
indicative of financial performance. The Company's operating revenues
decreased by $28.8 million, or 7%, in fiscal 1995 as compared with
fiscal 1994. The decrease principally reflects the effects of weather
in New Jersey that was 13% warmer than normal and 12% warmer than the
prior year, and refunds attributable to lower gas costs totaling $13.9
million to Northern Division customers (see "Regulatory Matters").
Operating revenues were also reduced by decreased sales to interruptible
customers due to lower gas prices and the effect of purchased gas
adjustment clauses. Partially offsetting these decreases were
approximately $19.5 million of additional operating revenues from the
inclusion of PSGS in the entire fiscal 1995 results, the effects of base
rate and appliance leasing rate increases in Florida, increased sales to
off-system customers and other customer growth. The Company's average
number of customers served increased by 18,004 or 5.4%, including 13,245
heating customers. Excluding the effect of a full year's inclusion of
PSGS in fiscal 1995, the average number of customers increased
approximately 2%.<PAGE>
The Company's operating margins increased by $8.6 million, or 6%,
in fiscal 1995 as compared with fiscal 1994. The increase was
principally the result of the inclusion of PSGS for the entire fiscal
1995 results, increases in the number of customers served, and the base
rate and appliance leasing rate increases in Florida. Partially
offsetting these increases was the effect of the warmer-than-normal
weather in New Jersey in fiscal 1995 not fully recovered through the
weather normalization clause. The Company has weather normalization
clauses in its New Jersey and North Carolina tariffs which are designed
to help stabilize the Company's results by increasing amounts charged to
customers when weather has been warmer than normal and by decreasing
amounts charged when weather has been colder than normal. Operating
margins were increased by approximately $4.5 million in fiscal 1995
under the weather normalization clauses. There was no adjustment to
operating margins in fiscal 1994 as the weather fell within the normal
range.
Other Operating Expenses. The Company's other operating
expenses, excluding income taxes, increased by $9.8 million, or 8%, in
fiscal 1995 as compared with fiscal 1994. The increase was primarily
the result of non-recurring pre-tax charges of $8.6 million, (see Note 3
of the Notes to the Consolidated Financial Statements), an additional
$4.6 million of other pre-tax operating expenses from the inclusion of
PSGS in the entire fiscal 1995 results and an increase in depreciation
expense due to additional utility plant in service. Partially
offsetting these increases were lower labor, pension and other employee
benefits costs as a result of an early retirement program established by
the Company in fiscal 1995 and other work force reductions.
Income taxes increased by $0.8 million in fiscal 1995 due to the
reversal in fiscal 1994 of approximately $1.8 million of income tax
reserves no longer required as a result of management's review of
necessary reserve levels, offset by the effect of lower pre-tax income
in fiscal 1995.
Interest Expense. Interest expense increased by $3.2 million in
fiscal 1995 as compared with fiscal 1994. The increase was due to
higher average outstanding borrowings, higher short-term interest rates
and an increase of $0.6 million of interest recorded on the over
collection of gas costs by the Northern Division. These increases were
partially offset by a decrease in average long-term interest rates due
to the refinancing of $46.5 million of the Company's 11% and 11.25% Gas
Facilities Revenue Bonds at an interest rate of 6.35% in August 1994.
Fiscal Years Ended September 30, 1994 and 1993
Net Income. Net income for fiscal 1994 was $10.8 million, or
$1.25 per share, as compared with net income of $13.8 million, or $1.70
per share in fiscal 1993. The decrease in fiscal 1994 was primarily due
to higher operating expenses in the Company's Florida operations
associated with system growth, coupled with lower than anticipated
operating margins in Florida due to slower than anticipated customer
growth. Net income in fiscal 1994 was also adversely affected by higher
interest expense and a $0.6 million net operating loss by PSGS as a
result of its acquisition following the conclusion of the heating
season. The PSGS Merger had a dilutive effect of $0.14 per share in
fiscal 1994, including the effect of the issuance of 683,443 additional
shares of NUI common stock for all the outstanding shares of PSGS.
Partly offsetting these decreases was the reversal of approximately $1.8
million of income tax reserves.<PAGE>
Net income per share in fiscal 1994 was also reduced as a result
of other increases in the number of outstanding shares of NUI common
stock as compared to the prior year.
Operating Revenues and Operating Margins. The Company's
operating revenues increased by $37.8 million, or 10%, in fiscal 1994 as
compared with fiscal 1993. The increase principally reflects increases
in the number of customers served, including the addition of PSGS in
fiscal 1994, greater industrial demand and the effect of purchased gas
adjustment clauses. The effect of weather in New Jersey contributed to
higher revenues in fiscal 1994 as the weather was 5% colder than the
prior year. The Company's total average number of customers served
increased by 16,726, or 5%, including 12,996 heating customers. The
addition of PSGS heating customers from the PSGS Merger did not have a
significant impact on fiscal 1994's operating revenues and margins since
PSGS was acquired after the heating season. Excluding customers
acquired as a result of the PSGS Merger, the average number of customers
increased approximately 2% in fiscal 1994.
The Company's operating margins increased by $8.8 million, or 6%,
in fiscal 1994 as compared with fiscal 1993. The increase principally
reflects increases in the number of customers served. Operating margins
in fiscal 1994 were not adjusted by the Company's weather normalization
clauses as the weather fell within the normal range. Operating margins
included $1.3 million in fiscal 1993 under weather normalization clauses
as a result of the effects of warmer-than-normal weather.
Other Operating Expenses. The Company's other operating
expenses, excluding income taxes, increased by $14.3 million, or 14%, as
compared with fiscal 1993. The increase was principally attributable to
approximately $3.8 million of operating expenses from the addition of
PSGS in fiscal 1994, $0.9 million of non-recurring charges related to
the write-off of certain non-recoverable regulatory assets and certain
restructuring costs in Florida, and increases in other operating
expenses. The increase in other operating costs was due in part to
higher costs associated with system growth, including the payroll and
employee benefits costs attributable to a larger work force and
depreciation due to additional utility plant in service. Increased
operation and maintenance expenses were also the result of severe
weather experienced in New Jersey during portions of fiscal 1994's
heating season.
The decrease in income taxes of $4.7 million for fiscal 1994 was
due to the reversal of $1.8 million of income tax reserves no longer
required as a result of management's review of necessary reserve levels,
and lower pre-tax income.
Interest Expense. Interest expense increased by $1.8 million in
fiscal 1994 as compared with fiscal 1993, primarily due to higher
outstanding borrowings. This increase was partially offset by decreased
average interest rates due to the Company's August 1994 refinancing of
$46.5 million of 11% and 11.25% Gas Facilities Revenue Bonds at an
interest rate of 6.35%.
Regulatory Matters
Northern Division
On November 4, 1994, the New Jersey Board of Public Utilities
("NJBPU") approved a petition filed by the Northern Division to reduce<PAGE>
its annual purchased gas adjustment revenues by approximately $11.9
million. The decrease reflected the Company's projections for lower gas
costs in fiscal 1995. The NJBPU also approved refunds of approximately
$2.6 million, which were made in the first quarter of fiscal 1995, and
$11.3 million, which were made in the third quarter of fiscal 1995, as a
result of lower than projected gas prices paid in fiscal 1994 and fiscal
1995. On November 3, 1995, the NJBPU approved a petition to further
reduce the amounts billed to customers by the Northern Division by
approximately $13.7 million, and to refund to customers approximately
$2.8 million, due to lower gas costs. None of such revenue reductions or
refunds affect the operating margins of the Company.
In December 1994, the NJBPU authorized new tariffs which are
designed to provide for unbundling of natural gas transportation and
sales service to Northern Division commercial and industrial customers
(see "Outlook and Business Plan"). The new tariffs became effective on
January 1, 1995 and are designed to be neutral as to the operating
margins of the Company.
Southern Division
On November 29, 1994, the Florida Public Service Commission
("FPSC") voted to authorize the Company to increase its base rates in
Florida by $1.6 million annually (the "FPSC Order"). The FPSC Order
provides for a rate base amounting to approximately $82.6 million with
an overall after-tax rate of return of 7.26%. In addition, the FPSC
Order provides for several tariff changes designed to promote growth in
developing markets for natural gas, and approved the deregulation of the
Florida operation's leased appliance business which consists of leasing
water heaters, clothes dryers and ranges to customers to promote natural
gas usage in the residential market.
On September 20, 1995, the North Carolina Utilities Commission
approved a stipulation to increase the Company's base rates in North
Carolina by $385,000 annually. The stipulation provides for a rate base
amounting to approximately $11.9 million with an overall after-tax rate
of return of 7.89%. The rate increase was effective in October 1995. <PAGE>
Financing Activities and Resources
The Company's net cash provided by operating activities was $47.9
million in fiscal 1995, $22.5 million in fiscal 1994 and $4.3 million in
fiscal 1993. The improved cash flows for fiscal 1995 primarily reflect
lower accounts receivable due to accelerated collections of budget
billed customer accounts, lower gas costs and a lower level of payments
in fiscal 1995 for New Jersey gross receipts and franchise taxes; the
1994 and 1993 New Jersey gross receipts and franchise tax payments
included an additional amount representing almost a half year's
liability as a result of a change in the payment schedule by the State.
The increase in net cash provided by operating activities in fiscal 1994
as compared with fiscal 1993 was primarily attributable to the temporary
over collection of gas costs and lower costs for fuel held in inventory.
Because the Company's business is highly seasonal, short-term
debt is used to meet seasonal working capital requirements. The Company
also borrows under its bank lines of credit to finance portions of its
capital expenditures, pending refinancing through the issuance of equity
or long-term indebtedness at a later date depending upon prevailing
market conditions.
Short-Term Debt. The weighted average daily amounts outstanding
of notes payable to banks and the weighted average interest rates on
those amounts were $58 million at 5.9% in fiscal 1995, $82 million at
4.1% in fiscal 1994 and $53.9 million at 3.6% in fiscal 1993. The
weighted average daily amounts of notes payable to banks decreased in
fiscal 1995 primarily due to the issuance of $70 million of Medium-Term
Notes, which were used to repay short-term debt, partially offset by
borrowings to finance portions of the Company's construction
expenditures and to complete an early redemption of the Company's First
Mortgage Bonds. The weighted average daily amount of notes payable to
banks increased in fiscal 1994 principally to finance portions of the
Company's construction expenditures, primarily related to system growth
in Florida, and the accelerated payment of New Jersey gross receipts and
franchise taxes. At September 30, 1995, the Company had outstanding
notes payable to banks amounting to $37.9 million and available unused
lines of credit amounting to $120.1 million.
Long-Term Debt and Funds for Construction Held by Trustee. In
November 1994, the Company filed a shelf registration statement with the
Securities and Exchange Commission for an aggregate of up to $100
million of debt and equity securities. On February 16, 1995, the
Company issued $50 million aggregate principal amount of Medium-Term
Notes, Series A, with a stated maturity date of February 1, 2005 and an
interest rate of 8.35%. On May 25, 1995, the Company issued an
additional $20 million of Medium-Term Notes, Series A, with a stated
maturity date of August 1, 2002 and an interest rate of 7.125%. The net
proceeds from these Medium-Term Notes were used to repay short-term
debt.
The Company anticipates issuing additional securities subject to
the shelf registration from time to time, depending upon the Company's
needs and prevailing market conditions. The Company intends to use the
proceeds from any of these additional security issuances to discharge
outstanding debt obligations of the Company, to finance the Company's
capital expenditures and for general corporate purposes. The Company
expects to issue in fiscal 1996 approximately $39 million of tax-exempt
Gas Facilities Revenue Bonds for the purpose of financing the Northern
Division's capital expenditure program.<PAGE>
On July 17, 1995, the Company completed an early redemption of
its remaining $8.7 million of First Mortgage Bonds. The bonds carried
coupon rates of 8% and 8.5% and were redeemed with proceeds from short-
term debt.
On August 16, 1994, the Company issued $66.5 million of tax-
exempt bonds in New Jersey and Florida. These issuances were comprised
of $46.5 million of 6.35% Gas Facilities Refunding Revenue Bonds, due
October 1, 2022, which replaced the same amount of outstanding debt
bearing interest at 11% and 11.25%, and $20 million of 6.40% Gas
Facilities Revenue Bonds, due October 1, 2024, which is being used to
finance part of the Company's capital expenditure program in Florida.
The Company deposits in trust the unexpended portion of the net
proceeds from its Gas Facilities Revenue Bonds until drawn upon for
eligible capital expenditures. As of September 30, 1995, the total
unexpended portion of all of the Company's Gas Facilities Revenue Bonds
was $13.6 million and is classified on the Company's consolidated
balance sheet, including interest earned thereon, as funds for
construction held by trustee.
Common Stock. The Company periodically issues shares of common
stock in connection with NUI Direct, the Company's dividend reinvestment
and stock purchase plan, and various employee benefit plans. The
proceeds from such issuances amounted to $1.0 million, $6.3 million and
$4.2 million in fiscal 1995, 1994 and 1993, respectively, and were used
primarily to reduce outstanding short-term debt. Effective in December
1994, these plans commenced purchasing shares on the open market to
fulfill the plans' requirements, rather than purchasing the shares
directly from the Company. Under the terms of NUI Direct, the Company
may change the method of purchasing shares, no more frequently than
every three months, from open market purchases to purchases directly
from the Company, or vice versa; the method of purchasing shares may be
changed no more frequently than every twelve months for the other plans.
The Company plans to issue additional common stock in fiscal 1996
for the purpose of improving the Company's financial position by
reducing outstanding debt and funding capital requirements. The
issuance may be made under the Company's shelf registration statement
(see "Long-Term Debt and Funds for Construction Held by Trustee") or it
may be under a separate registration statement. Regulatory approval for
such issuance, which is expected to be not more than two million shares,
is required but has not yet been sought.
On April 19, 1994, the Company issued 683,443 additional shares
of NUI common stock in connection with the PSGS Merger (see Note 2 of
the Notes to the Consolidated Financial Statements).
Capital Expenditures and Commitments
Capital expenditures, which consist primarily of expenditures to
expand and upgrade the Company's gas distribution systems, were $37.9
million in fiscal 1995, $55.8 million in fiscal 1994 and $39.6 million
in fiscal 1993. The Company's capital expenditures are expected to be
approximately $42 million in fiscal 1996.
The Company owns or previously owned six former manufactured gas
plant ("MGP") sites in the Northern Division and ten MGP sites in the
PSGS states. In order to quantify the potential future expenditures with
respect to all of its MGP sites, the Company, with the aid of<PAGE>
environmental consultants, regularly assesses the possible costs
associated with conducting investigative activities at each of the
Company's sites and implementing appropriate remedial actions, as well
as the probability of whether such actions will be necessary. Based on
the Company's most recent assessment, as of September 30, 1995 the
Company has recorded a total reserve for probable environmental
investigation and remediation costs of approximately $34 million, which
the Company expects it will expend in the next twenty years to remediate
7 of the Company's 16 MGP sites. Of this reserve, approximately $30
million relates to Northern Division MGP sites and approximately $4
million relates to PSGS MGP sites. In addition to these probable costs,
the Company believes that there may be up to an additional $21 million
associated with conducting investigative activities and implementing
remedial actions, if necessary, with respect to all of the Company's MGP
sites during a future period of time that may range up to fifty years.
Of this $21 million in possible future expenditures, approximately $10
million relates to the Northern Division MGP sites and approximately $11
million relates to the PSGS MGP sites. The Company believes that all
costs associated with the Northern Division MGP sites will be
recoverable in rates or from insurance carriers. With respect to costs
which may be associated with the PSGS MGP sites, the Company intends to
pursue recovery from ratepayers, former owners and operators of the
sites and from insurance carriers. However, the Company is not able at
this time to express a belief as to whether any or all of these recovery
efforts related to PSGS MGP sites will ultimately be successful. For a
further discussion of environmental matters, see Note 10 of the Notes to
the Consolidated Financial Statements.
Certain of the Company's long-term contracts for the supply,
storage and delivery of natural gas include fixed charges that amount to
approximately $78 million annually. The Company currently recovers, and
expects to continue to recover, such fixed charges through its purchased
gas adjustment clauses. The Company also is committed to purchase, at
market-related prices, minimum quantities of gas that, in the aggregate,
are approximately 9 billion cubic feet per year or to pay certain costs
in the event the minimum quantities are not taken. The Company expects
that minimum demand on its systems for the duration of these contracts
will continue to exceed these minimum purchase obligations.
The implementation of the Federal Energy Regulatory Commission's
("FERC") Order No. 636 required the restructuring of the Company's
contracts with certain pipeline companies that together supply less than
one-third of the Company's total firm gas supply. Under Order No. 636
the pipeline companies are passing through to their customers transition
costs associated with mandated restructuring, such as costs resulting
from buying out unmarketable gas purchase contracts. The Company has
been charged approximately $7 million of such costs as of September 30,
1995, which the Company has been authorized to recover through its
purchased gas adjustment clauses. The Company currently estimates that
its remaining Order No. 636 transition obligation will be approximately
$9.1 million which it expects to also recover through the Company's
purchased gas adjustment clauses as these costs are incurred. This
transition obligation is subject to possible future FERC actions based
upon filings by the Company's pipeline suppliers.
As of September 30, 1995, the scheduled repayments of the
Company's long-term debt over the next five years were as follows: $0.1
million in both fiscal 1996 and 1997, $30.1 million in fiscal 1998 and
$0.1 million in both fiscal 1999 and 2000.<PAGE>
Outlook and Business Plan
The natural gas distribution industry is undergoing significant
changes. The sale of gas by utility companies to commercial and
industrial customers has been "unbundled", or separated from the
transportation service component, by several state regulatory
commissions, including that in New Jersey. In these states, while the
sale of the gas commodity to commercial and industrial customers is now
fully competitive, the transportation service remains regulated as to
price and returns and subject to various restrictions and franchise
protections. It is anticipated that additional states will unbundle
these services for commercial and industrial customers and that, in the
near term, states will begin to unbundle these services for residential
customers as well.
Tariffs for transportation service have generally been designed
to provide the same margins as bundled sales tariffs. Therefore, the
Company is financially indifferent as to whether it transports gas, or
sells gas and transportation together. Unbundling provides the Company
with an opportunity to make additional margins by competing with
unregulated marketers and brokers for sales of gas.
The Company also faces the risk of loss of transportation service
for large industrial customers which may have the ability to build
connections to interstate gas pipelines and bypass the Company's
distribution system. With the final implementation of FERC Order No.
636, the FERC is no longer discouraging such direct connections. Gas
distributors can also expect increased competition from electricity as
deregulation in that industry decreases prices and increases supply
sources. Alternatively, opportunities may increase for gas service to
fuel generators for large industrial customers, replacing electric
utility service.
The Company has taken several steps to address the risks and
opportunities associated with these changes in the industry and to
improve financial performance.
The Company's subsidiary, Natural Gas Services, Inc. ("NGS"), was
formed to take advantage of the deregulated commercial and industrial
market through the sale of natural gas to these customers. The business
generated to date has not been sufficient to cover its operating costs,
and NGS is not expected to be profitable until fiscal 1997. The Company
believes, however, that this business is important to the future success
of the Company as the natural gas distribution industry deregulates, and
it intends to continue to pursue this business line through NGS. The
financial success of NGS or any other unregulated ventures, which are
subject to competition, are likely to be more volatile than those of the
regulated utility operations.
During fiscal 1995, the Company restructured its operations in
order to consolidate responsibilities and controls, thereby eliminating
redundant functions throughout the Company. Part of this effort was
achieved through an early retirement program. Overall, the work force
of the Company has been reduced by 118 employees (or 10%) since its high
of 1,197 in fiscal 1994. As part of this restructuring, the Southern
Division was formed in fiscal 1995, combining management of City Gas
Company of Florida and PSGS (see "Notes to the Consolidated Financial
Statements - Note 3").<PAGE>
In fiscal 1995, the Company, along with seven other utility
companies, formed the East Coast Natural Gas Cooperative LLC (the "Co-
op"). The Co-op was formed with the goal of jointly managing certain
portions of the members' gas supply portfolios, to increase reliability
and reduce costs of service to customers, and to improve the competitive
position of the member companies.
While the Company has reduced its capital expenditures from $55.8
million in fiscal 1994 to $37.9 million in fiscal 1995, management
expects capital expenditures to increase in the future as profitable
investments arise. However, management believes that the Company's
liquidity and borrowing capacity are stable and adequate to fund such
expenditures.
In addition to deregulation in the natural gas distribution
industry, deregulation in all energy and utility markets is driving the
goal of many companies to provide the broadest possible range of
customer choices in products and services. The Company intends to pursue
an expansion of the services which it provides to customers. Such
services may include, among other things: gas-related services;
electricity and other fuels; energy-related information services; and
energy efficiency services.
At the same time, the need to compete in deregulated energy
markets has caused new combinations of utility and other energy-related
companies with the goals of improving efficiency, improving access to
new products and services, and increasing access to new markets and
means of distribution. Regulatory constraints that have existed on
utility combinations, due primarily to the Public Utility Holding
Company Act ("PUHCA"), may be removed as Congress reviews PUHCA for
possible reform or repeal. Management expects that the trend toward
increasing business combinations, including mergers, joint ventures and
alliances will continue. NUI may participate in one or more of such
combinations, if the Company deems such actions consistent with its
business plan.
Effects of Inflation
The Company's tariffs provide purchased gas adjustment clauses
through which rates charged to customers are adjusted for changes in the
cost of gas on a reasonably current basis. Increases in other utility
costs and expenses not otherwise offset by increases in revenues or
reductions in other expenses could have an adverse effect on earnings
due to the time lag associated with obtaining regulatory approval to
recover such increased costs and expenses, and the uncertainty of
whether regulatory commissions will allow full recovery of such
increased costs and expenses. <PAGE>
Item 8. Financial Statements and Supplementary Data
Consolidated financial statements of the Company as of September
30, 1995 and 1994 and for each of the three years in the period ended
September 30, 1995, the auditors' report thereon, and the unaudited
quarterly financial data for the two-year period ended September 30,
1995, are included herewith as indicated on "Index to Financial
Statements and Schedule" on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning directors and officers of the Company is
included in the definitive Proxy Statement for the Company's Annual
Meeting of Stockholders, which is incorporated herein by reference. It
is expected that such Proxy Statement will be filed with the Securities
and Exchange Commission no later than January 28, 1996.
Item 11. Executive Compensation
Information concerning executive compensation is included in the
definitive Proxy Statement for the Company's Annual Meeting of
Stockholders, which is incorporated herein by reference. It is expected
that such Proxy Statement will be filed with the Securities and Exchange
Commission no later than January 28, 1996.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial
owners and management is included in the definitive Proxy Statement for
the Company's Annual Meeting of Stockholders, which is incorporated
herein by reference. It is expected that such Proxy Statement will be
filed with the Securities and Exchange Commission no later than
January 28, 1996.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related
transactions is included in the definitive Proxy Statement for the
Company's Annual Meeting of Stockholders, which is incorporated herein
by reference. It is expected that such Proxy Statement will be filed
with the Securities and Exchange Commission no later than January 28,
1996.<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) Consolidated financial statements of the Company as of
September 30, 1994 and 1993 and for each of the three years in the
period ended September 30, 1995 and the auditors' report thereon, and
the unaudited quarterly financial data for the two-year period ended
September 30, 1995 are included herewith as indicated on the "Index to
Financial Statement and Schedule" on page F-1.
(2) The applicable financial statement schedule for the fiscal
years 1995, 1994 and 1993 is included herewith as indicated on the
"Index to Financial Statements and Schedule" on page F-1.
(3) Exhibits:
Exhibit
No. Description Reference
2(i) Letter Agreement, dated June Incorporated by
29, 1993, by and between NUI reference to Exhibit
Corporation and Pennsylvania & 2(i) to Registration
Southern Gas Company Statement No. 33-50561
2(ii) Agreement and Plan of Merger,
dated as of July 27, 1993, by Incorporated by
and between NUI Corporation reference to Exhibit
and Pennsylvania & Southern 2(ii) to Registration
Gas Company Statement No. 33-50561
3(i) Certificate of Incorporation, Filed herewith
amended and restated as of
December 1, 1995
3(ii) By-Laws, amended and restated Filed herewith
as of October 24, 1995
10(i) Service Agreement by and Incorporated by
between Transcontinental Gas reference to Exhibit
Pipe Line Corporation and 10(i) to Registration
Elizabethtown Gas Company Statement No. 33-50561
("EGC"), dated February 1,
1992
10(ii) Service Agreement under Rate Incorporated by
Schedule GSS by and between reference to Exhibit
Transcontinental Gas Pipe Line 10(ii) to Registration
Corporation and EGC, dated May Statement No. 33-50561
3, 1972
10(iii) Service Agreement under Rate Incorporated by
Schedule LG-A by and between reference to Exhibit
Transcontinental Gas Pipe Line 10(iii) to Registration
Corporation and EGC, dated Statement No. 33-50561
January 12, 1971
10(iv) Service Agreement by and Incorporated by
between Transcontinental Gas reference to Exhibit
Pipe Line Corporation and EGC, 10(iv) to Registration
dated November 1, 1991 Statement No. 33-50561<PAGE>
Exhibit
No. Description Reference
10(v) Service Agreement for Storage Incorporated by
Gas by and between reference to Exhibit
Transcontinental Gas Pipe Line 10(v) to NUI's Form 10-k
Corporation and EGC, dated Report for Fiscal 1994
November 1, 1994
10(vi) Firm Gas Transportation Incorporated by
Agreement by and among reference to Exhibit
Transcontinental Gas Pipe Line 10(vi) to Registration
Corporation, EGC and National Statement No. 33-50561
Fuel Gas Supply Corporation,
dated November 1, 1984
10(vii) Gas Transportation Agreement Incorporated by
by and among Transcontinental reference to Exhibit
Gas Pipe Line Corporation and 10(vii) to Registration
EGC, dated February 4, 1991 Statement No. 33-50561
10(viii) Service Agreement for Rate Incorporated by
Schedule CDS by and between reference to Exhibit
Texas Eastern Transmission 10(viii) to NUI's Form
Corporation and EGC, dated 10-K Report for Fiscal
December 1, 1993 1994
10(ix) Service Agreement under Rate
Schedule FTS-7 by and between Incorporated by
Texas Eastern Transmission reference to Exhibit
Corporation and EGC, dated 10(ix) to NUI's Form 10-
October 25, 1994 K Report for Fiscal 1994
10(x) Service Agreement for Rate
Schedule FTS-5 by and between Incorporated by
Texas Eastern Transmission reference to Exhibit
Corporation and EGC, dated 10(x) to Registration
June 1, 1993 Statement No. 33-50561
10(xi) Service Agreement under Rate
Schedule FTS-8 by and between Incorporated by
Texas Eastern Transmission reference to Exhibit
Corporation and EGC, dated 10(xi) to NUI's Form 10-
June 28, 1994 K Report for Fiscal 1994
10(xii) Service Agreement for Rate
Schedule FTS-5 by and between Incorporated by
Texas Eastern Transmission reference to Exhibit
Corporation and EGC, dated 10(xii) to Registration
June 1, 1993 Statement No. 33-50561
10(xiii) Service Agreement for Rate
Schedule FTS-2 by and between Incorporated by
Texas Eastern Transmission reference to Exhibit
Corporation and EGC, dated 10(xiii) to Registration
June 1, 1993 Statement No. 33-50561
10(xiv) Service Agreement under NTS Incorporated by
Rate Schedule by and between reference to Exhibit
Columbia Gas Transmission 10(xiv) to NUI's Form
Corporation and EGC, dated 10-K Report for Fiscal
November 1, 1993 1993<PAGE>
Exhibit
No. Description Reference
10(xv) Service Agreement under SST Incorporated by
Rate Schedule by and between reference to Exhibit
Columbia Gas Transmission 10(xv) to NUI's Form 10-
Corporation and EGC, dated K Report for Fiscal 1993
November 1, 1993
10(xvi) Service Agreement under FTS Incorporated by
Rate Schedule by and between reference to Exhibit
Columbia Gas Transmission 10(xvi) to NUI's Form
Corporation and EGC, dated 10-K Report for Fiscal
November 1, 1993 1993
10(xvii) Gas Transportation Agreement Incorporated by
under FT-G Rate Schedule by reference to Exhibit
and between Tennessee Gas 10(xvii) to NUI's Form
Pipeline Company and EGC 10-K Report for Fiscal
(Contract #597), dated 1993
September 1, 1993
10(xviii) Gas Transportation Agreement Incorporated by
under FT-G Rate Schedule by reference to Exhibit
and between Tennessee Gas 10(xviii) to NUI's Form
Pipeline Company and EGC 10-K Report for Fiscal
(Contract #603), dated 1993
September 1, 1993
10(xix) Gas Transportation Agreement Incorporated by
by and between Tennessee Gas reference to Exhibit
Pipeline Company and EGC, 10(xvii) to Registration
dated March 30, 1993 Statement No. 33-50561
10(xx) Firm Transportation Service Incorporated by
Agreement under FTS-1 Rate reference to Exhibit
Schedule by and between City 10(xx) of NUI's Form 10-
Gas and Florida Gas K Report for Fiscal 1993
Transmission dated October 1,
1993
10(xxi) Lease Agreement between EGC Incorporated by
and Liberty Hall Joint reference to Exhibit
Venture, dated August 17, 1987 10(vi) of EGC's Form
10-K Report for Fiscal
1987
10(xxii) 1988 Stock Plan Incorporated by
reference to Exhibit
10(viii) to Registration
Statement No. 33-21525
10(xxii) First Amendment to 1988 Stock Incorporated by
Plan reference to Exhibit
10(xxxiii) to
Registration Statement
No. 33-46162
10(xxiii) Form of Termination of
Employment and Change in
Control Agreements Filed herewith<PAGE>
Exhibit
No. Description Reference
10(xxiv) Firm Transportation Service Incorporated by
Agreement under FTS-2 Rate reference to Exhibit
Schedule by and between City 10(xxiv) of NUI's Form
Gas and Florida Gas 10-K Report for Fiscal
Transmission, dated December 1994
12, 1991 and Amendment dated
November 12, 1993
10(xxv) Service Agreement under Rate Incorporated by
Schedule LG-A by and between reference to Exhibit
Transcontinental Gas Pipeline 10(xxv) of NUI's Form
and North Carolina Gas Service 10-K Report for Fiscal
Division of Pennsylvania & 1994
Southern Gas Company, dated
August 5, 1971
10(xxvi) Service Agreement under Rate Incorporated by
Schedule GSS by and between reference to Exhibit
Transcontinental Gas Pipeline 10(xxvi) of NUI's Form
and North Carolina Gas Service 10-K Report for Fiscal
Division of Pennsylvania & 1994
Southern Gas Company, dated
April 13, 1974
10(xxvii) Service Agreement under Rate Incorporated by
Schedule FS by and between reference to Exhibit
Transcontinental Gas Pipeline 10(xxvii) of NUI's Form
and North Carolina Gas Service 10-K Report for Fiscal
Division of Pennsylvania & 1994
Southern Gas Company, dated
August 1, 1991
10(xxviii) Service Agreement under Rate Incorporated by
Schedule FT by and between reference to Exhibit
Transcontinental Gas Pipeline 10(xxviii) of NUI's Form
and North Carolina Gas Service 10-K Report for Fiscal
Division of Pennsylvania & 1994
Southern Gas Company, dated
February 1, 1992
10(xxix) Gas Sales and Purchase Incorporated by
Agreement by and between reference to Exhibit
Texaco Gas Marketing, Inc. and 10(xxix) of NUI's Form
Pennsylvania & Southern Gas 10-K Report for Fiscal
Company, dated November 1, 1994
1991
10(xxx) Gas Storage Contract under Incorporated by
Rate Schedule FS by and reference to Exhibit
between Tennessee Gas Pipeline 10(xxx) of NUI's Form
Company and Pennsylvania & 10-K Report for Fiscal
Southern Gas Company, dated 1994
September 1, 1993<PAGE>
Exhibit
No. Description Reference
10(xxxi) Gas Transportation Agreement Incorporated by
under Rate Schedule FT-A by reference to Exhibit
and between Tennessee Gas 10(xxxi) of NUI's Form
Pipeline Co. and Pennsylvania 10-K Report for Fiscal
& Southern Gas Company, dated 1994
September 1, 1993 (Contract
#935)
10(xxxii) Gas Transportation Agreement Incorporated by
under Rate Schedule FT-A by reference to Exhibit
and between Tennessee Gas 10(xxxii) of NUI's Form
Pipeline Co. and Pennsylvania 10-K Report for Fiscal
& Southern Gas Company, dated 1994
September 1, 1993 (Contract
#936)
10(xxxiii) Gas Transportation Agreement Incorporated by
under Rate Schedule FT-A by reference to Exhibit
and between Tennessee Gas 10(xxxiii) of NUI's Form
Pipeline Co. and Pennsylvania 10-K Report for Fiscal
& Southern Gas Company, dated 1994
September 1, 1993 (Contract
#959)
10(xxxiv) Gas Transportation Agreement Incorporated by
under Rate Schedule FT-A by reference to Exhibit
and between Tennessee Gas 10(xxxiv) of NUI's Form
Pipeline Co. and Pennsylvania 10-K Report for Fiscal
& Southern Gas Company, dated 1994
September 1, 1993 (Contract
#2157)
10(xxxv) Employment Agreement, dated as Incorporated by
of July 29, 1988, between NUI reference to Exhibit
Corporation and Jack Langer 10(xxxv) of NUI's Form
10-K Report for Fiscal
1994
10(xxxvi) Service Agreement for Rate Filed herewith
Schedule FT by and between
Transcontinental Gas Pipe Line
Corporation and EGC (Contract
#1.0431) dated April 1, 1995
10(xxxvii) Service Agreement for Rate Filed herewith
Schedule FT by and between
Transcontinental Gas Pipe Line
Corporation and EGC (Contract
#1.0445) dated April 1, 1995
10(xxxviii) Service Agreement for Rate Filed herewith
Schedule SS-1 by and between
Texas Eastern Transmission
Corporation and EGC (Contract
(#400196) dated September 23,
1994<PAGE>
Exhibit
No. Description Reference
10(xxxix) Gas Storage Agreement under Filed herewith
Rate Schedule FS by and
between Tennessee Gas Pipeline
Company and EGC (Contract
#8703) dated November 1, 1994
10(xl) Consulting Agreement, dated as Filed herewith
of March 24, 1995, between NUI
Corporation and John Kean
10(xli) Form of Deferred Compensation Filed herewith
Agreement
21 Subsidiaries of NUI Filed herewith
Corporation
23 Consent of Independent Public Filed herewith
Accountants
27 Financial Data Schedule Filed herewith
Exhibits listed above which have heretofore been filed with the
Securities and Exchange Commission pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934, and which were designated
as noted above and have not been amended, are hereby incorporated by
reference and made a part hereof with the same effect as if filed
herewith.
The Company is a party to various agreements with respect to
long-term indebtedness to which the total amount of indebtedness
authorized under each agreement, respectively, does not exceed 10% of
the total assets of the Company on a consolidated basis. The Company
hereby agrees to furnish to the Securities and Exchange Commission
copies of such agreements upon request.
(b) Reports on Form 8-K:
On October 24, 1995, the Company filed a Form 8-K, Item 5, Other
Events, reporting an amendment to the Company's By-Laws.
On December 1, 1995, the Company filed a Form 8-K, Item 5, Other
Events, reporting the establishment of a Shareholder Rights Plan.<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Consolidated Financial Statements of NUI Corporation and Subsidiaries:
Report of Independent Public Accountants . . . . . F-2
Consolidated Financial Statements as of
September 30, 1995 and 1994 and for Each
of the Three Years in the Period
Ended September 30, 1995 . . . . . . . . . . . . . F-3
Unaudited Quarterly Financial Data for
the Two-Year Period Ended September 30, 1995
(Note 11 of the Notes to the Company's Consolidated
Financial Statements) . . . . . . . . . . . . . . . F-18
Financial Statement Schedule of NUI Corporation and Subsidiaries:
Report of Independent Public Accountants . . . . . F-2
Schedule II -- Valuation and Qualifying Accounts
for Each of the Three Years in the
Period Ended September 30, 1995 . . . . . . . . . . F-20
All other schedules are omitted because they are not
required, are inapplicable or the information is otherwise shown in the
financial statements or notes thereto.<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To NUI Corporation:
We have audited the accompanying consolidated balance sheet and
consolidated statement of capitalization of NUI Corporation (a New
Jersey corporation) and subsidiaries (the "Company") as of September 30,
1995 and 1994, and the related consolidated statements of income, cash
flows and shareholders' equity, for each of the three years in the
period ended September 30, 1995. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the Consolidated Financial Statements referred to
above present fairly, in all material respects, the financial position
of NUI Corporation and subsidiaries as of September 30, 1995 and 1994,
and the results of their operations and their cash flows for each of the
three years in the period ended September 30, 1995, in conformity with
generally accepted accounting principles.
As discussed in Notes 1 and 9 to the consolidated financial
statements, effective October 1, 1993, the Company changed its method of
accounting for income taxes and other postretirement benefits.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in Item
14(a)(2) is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
New York, New York
November 14, 1995<PAGE>
NUI Corporation and Subsidiaries
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)
Years Ended September 30,
1995 1994 1993
Operating Margins
Operating revenues $376,445 $405,240 $367,456
Less- Purchased gas and fuel 189,510 223,421 195,842
Gross receipts and 33,669 37,173 35,753
franchise taxes ------- ------- -------
153,266 144,646 135,861
------- ------- -------
Other Operating Expenses
Operations and maintenance 90,523 90,904 80,865
Depreciation and amortization 19,750 17,446 15,082
Restructuring and other non-
recurring charges 8,591 923 --
Other taxes 7,657 7,435 6,428
Income taxes 2,886 2,098 6,762
------- ------- -------
129,407 118,806 109,137
------- ------- -------
Operating Income 23,859 25,840 26,724
------- ------- -------
Other Income and Expense, Net 439 506 854
------- ------- -------
Interest Expense 18,781 15,566 13,768
------- ------- -------
Net Income $ 5,517 $ 10,780 $ 13,810
======= ======= =======
Net Income Per Share of Common
Stock $ .60 $ 1.25 $ 1.70
======= ======= =======
Dividends Per Share of Common
Stock $ .90 $ 1.60 $ 1.59
======= ======= =======
Weighted Average Number of Shares
of Common Stock Outstanding 9,152,837 8,617,790 8,124,065
See the notes to the consolidated financial statements.<PAGE>
NUI Corporation and Subsidiaries
Consolidated Balance Sheet
(Dollars in thousands)
September 30,
1995 1994
ASSETS
Utility Plant
Utility plant, at
original cost $597,360 $566,982
Accumulated
depreciation and
amortization (184,558) (173,894)
Unamortized plant
acquisition
adjustments
35,269 33,604
------- -------
448,071 426,692
------- -------
Funds for Construction
Held by Trustee 14,405 26,906
------- -------
Investments in
Marketable Securities 2,723 3,468
------- -------
Current Assets
Cash and cash
equivalents 3,601 5,637
Accounts receivable
(less allowance for
doubtful accounts of
$1,689 in 1995 and
$1,368 in 1994) 30,293 38,216
Fuel inventories, at
average cost 27,629 28,616
Prepayments and other 20,007 13,435
------- -------
81,530 85,904
------- -------
Other Assets
Regulatory assets 54,374 47,830
Deferred charges 9,062 10,848
------- -------
63,436 58,678
------- -------
$610,165 $601,648
======= =======
CAPITALIZATION AND
LIABILITIES
Capitalization (See
accompanying
statements)
Common shareholders'
equity $140,912 $142,768
Preferred stock -- --
Long-term debt 222,060 160,928
------- -------
362,972 303,696
------- -------
Capital Lease
Obligations 11,114 11,932
------- -------
Current Liabilities
Current portion of
long-term debt and
capital lease
obligations 1,759 2,761
Notes payable to banks 37,935 110,125
Accounts payable,
customer deposits and
accrued liabilities 63,665 52,721
General taxes 3,054 1,925
Federal income taxes 4,664 6,079
------- -------
111,077 173,611
------- -------
Other Liabilities
Deferred Federal
income taxes 51,946 50,066
Unamortized investment
tax credits 7,102 7,570
Environmental
remediation reserve 33,981 32,181
Regulatory and other
liabilities 31,973 22,592
------- -------
125,002 112,409
------- -------
$610,165 $601,648
======= =======
See the notes to the consolidated financial statements.<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(Dollars in thousands)
<CAPTION>
Years Ended September 30,
1995 1994 1993
<S> <C> <C> <C>
Operating Activities
Net income $ 5,517 $ 10,780 $ 13,810
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 20,932 18,773 16,346
Deferred Federal income taxes 2,005 6,893 8,726
Non-cash portion of restructuring and
other non-recurring charges 4,913 683 --
Amortization of deferred investment tax credits (468) (476) (461)
Other 4,626 2,926 4,162
Effect of changes in:
Accounts receivable, net 7,923 (5,724) (152)
Fuel inventories 987 (193) (7,872)
Accounts payable, deposits and accruals 10,724 6,959 (10,043)
Gross receipts and franchise taxes (4,152) (11,112) (14,262)
Other (5,088) ( 6,986) (5,988)
------ ------ ------
Net cash provided by operating activities 47,919 22,523 4,266
------ ------ ------
Financing Activities
Proceeds from sales of common stock 1,045 6,323 4,177
Purchases of treasury stock (468) -- --
Dividends to shareholders (8,296) (13,836) (12,905)
Proceeds from issuance of long-term debt 70,000 66,500 30,000
Funds for construction held by trustee, net 10,125 (2,093) 11,015
Repayments of long-term debt (9,902) (54,159) (22,734)
Principal payments under capital lease obligations (1,844) (2,055) (1,874)
Net short-term (repayments) borrowings (72,190) 33,893 22,950
------ ------ ------
Net cash (used for) provided by financing activities (11,530) 34,573 30,629
------ ------ ------
Investing Activities
Cash expenditures for utility plant (37,976) (53,601) (35,442)
Proceeds from sales of marketable securities 1,199 659 56
Proceeds from sale of assets -- 1,610 --
Other (1,648) (2,000) (1,123)
------ ------ ------
Net cash (used for) investing activities (38,425) (53,332) (36,509)
------ ------ ------
Net Increase (Decrease) in Cash and Cash Equivalents $ (2,036) $3,764 $(1,614)
====== ===== ======
Cash and Cash Equivalents
At beginning of period $ 5,637 $ 1,873 $ 3,487
At end of period 3,601 5,637 1,873
Supplemental Disclosures of Cash Flows
Income taxes paid (refunds received), net $(1,129) $ 666 $ 2,377
Interest paid 17,436 17,597 15,135
</TABLE>
See the notes to the consolidated financial statements.<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Statement of Capitalization
(Dollars in thousands)
<CAPTION>
September 30,
<S> <C> <C>
Long-Term Debt
Gas facilities revenue bonds
6.625% due October 1, 2021* $ 8,400 $ 8,400
6.75% due October 1, 2021* 46,200 46,200
6.35% due October 1, 2022 46,500 46,500
6.40% due October 1, 2024* 20,000 20,000
First mortgage bonds
8% due April 1, 1997 -- 2,500
8.5% due May 1, 2002 -- 7,273
Medium-term notes
7.125% due August 1, 2002 20,000 --
8.35% due February 1, 2005 50,000 --
Credit agreement indebtedness 30,000 30,000
ESOP indebtedness, 6% due May 31, 2002 1,088 1,217
------ ------
222,188 162,090
Current portion of long-term debt (128) (1,162)
------ ------
222,060 160,928
Preferred Stock, 5,000,000 shares authorized; none issued -- --
Common Shareholders' Equity
Common Stock, no par value; shares authorized: 30,000,000;
shares outstanding: 9,201,237 in 1995 and 9,157,095 in 1994 139,093 138,082
Shares held in treasury (1,265) ( 797)
Retained earnings 3,921 6,700
Valuation of marketable securities 232 --
Unearned employee compensation - ESOP (1,069) (1,217)
------ ------
140,912 142,768
------- -------
Total Capitalization $362,972 $303,696
======= =======
<F1>
* The total unexpended portion of the net proceeds from these bonds, amounting to $13.6 million
and $23.7 million as of September 30, 1995 and September 30, 1994, respectively, is carried on
the Company's consolidated balance sheet as funds for construction held by trustee, including
interest earned thereon, until drawn upon for eligible construction expenditures.
</TABLE>
See the notes to the consolidated financial statements.<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Statement of Shareholders' Equity
<CAPTION>
(Dollars in thousands)
Unrealized Unearned
Common Stock Gain (Loss)- Employee
Shares Paid-in Held in Retained Marketable Compensation-
Outstanding Amount Treasury Earnings Securities ESOP Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
September 30, 1992 8,035,910 $110,718 $(797) $ 8,675 $(205) $(1,458) $116,933
Common stock issued* 165,186 4,177 4,177
Net income 13,810 13,810
Cash dividends (12,905) (12,905)
Unrealized gain 112 112
ESOP transactions 138 119 257
--------- ------- ---- ------ ---- ----- -------
Balance,
September 30, 1993 8,201,096 114,895 (797) 9,718 (93) (1,339) 122,384
Common stock issued
PSGS acquisition 683,443 16,864 16,864
Other* 272,556 6,323 6,323
Net income 10,780 10,780
Cash dividends (13,836) (13,836)
Unrealized gain 93 93
ESOP transactions 38 122 160
--------- ------- ---- ------ --- ----- -------
Balance,
September 30, 1994 9,157,095 138,082 (797) 6,700 -- (1,217) 142,768
Common stock issued* 74,499 1,045 1,045
Treasury stock purchased (30,357) (468) (468)
Net income 5,517 5,517
Cash dividends (8,296) (8,296)
Unrealized gain 232 232
ESOP transactions (34) 148 114
--------- ------- ---- ----- --- ----- -------
Balance,
September 30, 1995 9,201,237 $139,093 $(1,265) $ 3,921 $232 $ (1,069) $140,912
========= ======= ===== ====== === ===== =======
<F1>
* Represents common stock issued in connection with NUI Direct and various employee benefit plans.
</TABLE>
See the notes to the consolidated financial statements.<PAGE>
NUI Corporation and Subsidiaries
Notes to the Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial
statements include all operating divisions and subsidiaries of NUI
Corporation (collectively referred to as "NUI" or the "Company"). The
Company, through its Northern and Southern Divisions, has utility
operations in six states. The Northern Division operates in New Jersey
as Elizabethtown Gas Company. The Southern Division was formed
effective April 1, 1995 through the consolidation of the Company's City
Gas Company of Florida ("CGF") and Pennsylvania & Southern Gas Company
("PSGS") operations (see Note 3). PSGS, which has operations in North
Carolina, Maryland, Pennsylvania and New York, was acquired on April 19,
1994. All intercompany accounts and transactions have been eliminated in
consolidation.
Certain reclassifications have been made to the prior year
financial statements to conform with the current year presentation.
Regulation. The Company is subject to regulation as an operating
utility by the public utility commissions of the states in which it
operates.
Utility Plant. Utility plant is stated at its original cost.
Depreciation is provided on a straight-line basis over the remaining
estimated lives of depreciable property by applying composite average
annual rates as approved by the state commissions. The composite average
annual depreciation rate was 3.2% in fiscal 1995 and 3.1% in both fiscal
years 1994 and 1993. At the time properties are retired, the original
cost plus the cost of retirement, less salvage, is charged to
accumulated depreciation. Repairs of all utility plant and replacements
and renewals of minor items of property are charged to maintenance
expense as incurred.
The unamortized plant acquisition adjustments represent the
remaining portion of the excess of the purchase price over the book
value of net assets acquired. The excess is being amortized on a
straight-line basis over thirty years from the date of acquisition. The
results of operations of acquired entities have been included in the
accompanying consolidated financial statements for the periods
subsequent to their acquisition.
Operating Revenues and Purchased Gas and Fuel Costs. Operating
revenues include accrued unbilled revenues through the end of each
accounting period. Operating revenues also reflect adjustments
attributable to weather normalization clauses that are accrued during
the winter heating season and billed or credited to customers in the
following year.
Costs of purchased gas and fuel are recognized as expenses in
accordance with the purchased gas adjustment clause applicable in each
state. Such clauses provide for periodic reconciliations of actual
recoverable gas costs and the estimated amounts that have been billed to
customers. Under or over recoveries are deferred when they arise and are
recovered from or refunded to customers in subsequent periods.<PAGE>
Restricted Cash. In accordance with certain regulatory
requirements in North Carolina, the Company is required to deposit
pipeline supplier refunds in an interest-bearing account. These funds,
including interest earned thereon, amounted to approximately $0.9
million as of September 30, 1995 and are restricted for uses as
prescribed by North Carolina regulatory authorities. This balance is
classified in the Company's consolidated balance sheet in deferred
charges with a corresponding amount included in other liabilities.
Income Taxes. In fiscal 1994, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109"), which requires the liability method to be used to account
for deferred income taxes. Under this method, deferred income taxes
related to tax and accounting basis differences are recognized at the
statutory income tax rates in effect when the tax is expected to be
paid. The adoption of SFAS 109 did not have a material impact on
consolidated net income because deferred taxes previously not provided
are recoverable from or payable to customers through future rates as
taxes come due and, accordingly, a net regulatory liability of
approximately $3.4 million was recorded.
Investment tax credits, which were generated principally in
connection with additions to utility plant made prior to January 1,
1986, are being amortized over the estimated service lives of the
properties that gave rise to the credits.
Regulatory Assets and Liabilities. The Company's utility
operations follow the accounting for regulated enterprises prescribed by
Statement of Financial Accounting Standards No. 71, "Accounting for the
Effects of Certain Types of Regulation" ("SFAS 71"). In general, SFAS
71 requires deferral of certain costs and obligations, based upon orders
received from regulators, to be recovered from or refunded to customers
in future periods. The following represents the Company's regulatory
assets and liabilities deferred in the accompanying consolidated balance
sheet as of September 30, 1995 and 1994:
1995 1994
Regulatory Assets
Environmental
investigation
and remediation costs $32,967 $32,141
Unrecovered gas costs 9,675 5,398
Postretirement benefits
other than pensions 5,194 2,455
Deferred piping allowances 3,249 3,066
Other 3,289 4,770
------ ------
$54,374 $47,830
====== ======
Regulatory Liabilities
Net overcollection
of income taxes $ 5,365 $ 4,135
Gas supplier refunds 1,387 1,383
Other 222 230
------ ------
$ 6,974 $ 5,748
====== ======<PAGE>
Although the gas distribution industry is becoming increasingly
competitive, the Company's utility
operations continue to recover their costs through cost-based rates
established by the public utility commissions. As a result, the Company
believes that the accounting prescribed under SFAS 71 remains
appropriate.
Cash Equivalents. Cash equivalents consist of a money market account
which invests in securities with original maturities of three months or
less.
Net Income Per Share of Common Stock. Net income per share of common
stock is based on the weighted average number of shares of NUI common
stock outstanding. The assumed exercise of outstanding employee stock
options would not have a dilutive effect on net income per share of
common stock.
New Accounting Standard. The Company is required to adopt Statement of
Financial Accounting Standards No. 121 ("SFAS 121") in fiscal 1996. SFAS
121 establishes accounting standards for the impairment of long-lived
assets. The adoption of this statement is not expected to have a
material impact on the Company's financial condition or results of
operations.
2. Acquisition of Pennsylvania & Southern Gas Company
On April 19, 1994, the Company issued and exchanged 683,443 shares of
NUI common stock for all of the outstanding common shares of PSGS
pursuant to the merger of PSGS with and into NUI (the "PSGS Merger").
The transaction was valued at approximately $17 million. Upon
consummation of the PSGS Merger, the Company's principal operating
utility, Elizabethtown Gas Company, was merged with and into NUI. PSGS
operates as part of the Southern Division of NUI.
The PSGS Merger was accounted for as a purchase in accordance with
generally accepted accounting principles and the results of operations
of PSGS have been consolidated with those of NUI as of April 19, 1994.
Due to the effects of the regulatory process, the underlying net assets
of PSGS have been recorded at their historical net book value. The
excess of the purchase price over the historical net book value of the
underlying net assets of PSGS is included in utility plant as a "plant
acquisition adjustment" and is being amortized over a thirty year
period. On September 30, 1994, NUI sold its PSGS propane assets. The
excess of the purchase price over the net book value of the propane
assets sold reduced the plant acquisition adjustment by approximately
$1.4 million. As discussed further in Note 10, the Company, in
connection with the PSGS Merger, acquired former manufactured gas plant
facilities. No provision for environmental remediation had been made by
PSGS in its financial statements prior to the PSGS Merger. As of
September 30, 1995, the Company has recorded $3.7 million additional
plant acquisition adjustment to provide for probable environmental
remediation liabilities, of which $1.8 million was recorded during
fiscal 1995.
3. Restructuring and Other Non-Recurring Charges
In fiscal 1995, the Company incurred approximately $8.6 million of
non-recurring charges for, among other things, the implementation of an
early retirement program and the consolidation of its Florida and PSGS
operations.<PAGE>
In November 1994, the Company offered an early retirement program to
certain employees. The program, which became effective on April 1, 1995,
was accepted by 95 of the eligible 112 employees. In accordance with
Statement of Financial Accounting Standards No. 88, "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Pension
Plans and for Termination Benefits", the Company recorded a special
termination charge of approximately $4.1 million. In addition, the
Company recorded approximately $0.8 million of other benefit expenses
associated with these employees. The Company also deferred, pending
regulatory recovery, a charge of approximately $0.6 million for special
termination benefits.
Effective April 1, 1995, the Company consolidated its Florida and PSGS
divisions to form a new NUI Southern Division. The Southern Division is
headquartered in Hialeah, Florida. As a result, PSGS headquarters in
Sayre, Pennsylvania will be closed by December 31, 1995. The Company
incurred a charge of approximately $2.6 million for severance and other
expenses associated with the consolidation of the two divisions.
In addition, during fiscal 1995, the Company incurred a charge of
approximately $0.8 million to write down certain regulatory assets as a
result of the November 1994 settlement of the Company's Florida rate
case.
The Company also incurred approximately $0.9 million of non-recurring
charges in fiscal 1994 related to the write-down of certain non-
recoverable regulatory assets and for certain restructuring costs in
Florida.
4. Capitalization
Long-Term Debt. On February 16, 1995, the Company issued $50 million
aggregate principal amount of Medium-Term Notes, Series A, with a stated
maturity date of February 1, 2005 and an interest rate of 8.35%. On May
25, 1995, the Company issued an additional $20 million of Medium-Term
Notes, Series A, with a stated maturity date of August 1, 2002 and an
interest rate of 7.125%. The net proceeds from these Medium-Term Notes
were used to repay short-term debt. On July 17, 1995, the Company
completed an early redemption of its remaining $8.7 million of First
Mortgage Bonds. The bonds carried coupon rates of 8% and 8.5% and were
redeemed with proceeds from short-term debt.
On August 16, 1994, the Company issued $66.5 million of tax-exempt
bonds in New Jersey and Florida. These issuances were comprised of $46.5
million of 6.35% Gas Facilities Refunding Revenue Bonds, due October 1,
2022, which replaced the same amount of outstanding debt bearing
interest at 11% and 11.25%, and $20 million of 6.40% Gas Facilities
Revenue Bonds, due October 1, 2024, which is being used to finance part
of the Company's capital expenditure program in Florida.
The Company deposits in trust the unexpended portion of the net
proceeds from its Gas Facilities Revenue Bonds until drawn upon for
eligible expenditures. As of September 30, 1995, the total unexpended
portion of all of the Company's Gas Facilities Revenue Bonds was $13.6
million and is classified on the Company's consolidated balance sheet,
including interest earned thereon, as funds for construction held by
trustee.<PAGE>
As of September 30, 1995, the scheduled repayments of the Company's
long-term debt over the next five years were as follows: $0.1 million in
both fiscal 1996 and 1997, $30.1 million in fiscal 1998 and $0.1 million
in both fiscal 1999 and 2000.
Preferred Stock. The Company has 5,000,000 shares of authorized but
unissued preferred stock.
Shareholder Rights Plan. In November 1995, the Company's Board of
Directors adopted a Shareholder Rights Plan under which shareholders of
NUI common stock were issued as a dividend one right to buy one one-
hundredth of a share of Series A Junior Participating Preferred Stock at
a purchase price of $50 ("Right") for each share of common stock held.
The Rights initially attach to the shares of NUI common stock and can be
exercised or transferred only if a person or group (an "Acquirer"), with
certain exceptions, acquires, or commences a tender offer to acquire,
beneficial ownership of 15% or more of NUI common stock. Each Right,
except those held by the Acquirer, may be used by the non-aquiring
shareholders to purchase, at the Right's exercise price, shares of NUI
common stock having a market value equivalent to twice the Right's
exercise price, thus substantially reducing the Acquirer's ownership
percentage.
The Company may redeem the Rights at $0.001 per Right at any time
prior to the occurrence of any such event. All Rights expire on November
27, 2005.
Common Stock. As discussed in Note 2, the Company issued 683,443
shares of NUI common stock in connection with the acquisition of PSGS on
April 19, 1994. The Company periodically issues shares of common stock
in connection with NUI Direct, the Company's dividend reinvestment and
stock purchase plan, and various employee benefit plans. Effective in
December 1994, these common stock plans commenced purchasing shares on
the open market to fulfill the plans' requirements rather than
purchasing the shares directly from the Company. Under the terms of NUI
Direct, the Company may change the method of purchasing shares, no more
frequently than every three months, from open market purchases to
purchases directly from the Company, or vice versa; the method of
purchasing shares may be changed no more frequently than once every
twelve months for the other plans. At September 30, 1995, shares
reserved for issuance under these plans were: NUI Direct, 202,325;
Savings and Investment Plan, 325,769 and the 1988 Stock Plan, 5,397.
Stock Plans. The Company's Board of Directors believes that both
directors' and management's interest should be closely aligned with that
of shareholders. As a result, under the 1988 Stock Plan, the Company
has a long-term compensation program for directors, executive officers
and key employees involving shares of NUI common stock.
Each non-employee director of the Company earns an annual retainer fee
that consists of a deferred grant of shares of NUI common stock. As of
September 30, 1995, such retainer fee was equivalent to a fair market
value of $12,000 on the date of grant. In addition, non-employee
directors who also chair committees of the Board receive additional
deferred grants with a fair market value of $2,500 on the date of grant.
Deferred stock grants are increased on each common stock dividend
payment date by an amount equal to the number of shares of NUI common
stock which would have been purchased had all deferred stock grants been
issued and the dividends reinvested in additional shares. As of
September 30, 1995, the total deferred grants for non-employee directors<PAGE>
were 21,096 shares of NUI common stock, an increase of 7,084 shares
during fiscal 1995.
Shares granted as long-term compensation for executive officers and
key employees amounted to 17,620 shares in fiscal 1995, 15,730 shares in
fiscal 1994 and 18,300 shares in fiscal 1993. As of September 30, 1995,
a total of 32,350 shares of restricted stock that have been granted as
long-term compensation are subject to future vesting requirements, and
are restricted from resale.
Executive officers and key employees are eligible to be granted
options for the purchase of NUI common stock at prices equal to the
market price per share on the date of grant. The option must be
exercised within ten years from the date of grant. Transactions during
the last three fiscal years involving stock options were as follows:
Number of Option Price
Shares per share
Options outstanding and
exercisable at September 30, 1992 22,450 $14.42-$17.625
Fiscal 1993
Exercised (6,000) $14.42-$15.77
Fiscal 1994
Exercised (2,300) $14.42
Canceled (1,150) $14.42
Fiscal 1995
Canceled (3,200) $15.77
------
Options outstanding and
exercisable at September 30, 1995 9,800 $15.77-$17.625
======
As of September 30, 1995, options with respect to 2,400 shares carry
stock appreciation rights with an exercise price of $15.77 per share.
During fiscal 1995, payment on 1,600 stock appreciation rights was made
at an exercise price of $15.77.
Employee Stock Ownership Plan. On March 30, 1995, the Company
terminated the employee stock ownership plan ("ESOP") which was provided
for certain employees of CGF. Satisfaction of ESOP indebtedness, which
is guaranteed by a subsidiary of NUI, and distributions of the ESOP
participants' vested account balances, will be made after the Internal
Revenue Service completes its review of the ESOP's termination, which
has been requested by the Company.
The Company incurred ESOP contribution expense amounting to $0.2
million in fiscal 1995, and $0.9 million in both fiscal 1994 and 1993,
representing contributions for loan payments and to acquire additional
shares of NUI common stock. Of this amount, approximately $0.1 million
in each of fiscal years 1995, 1994 and 1993, represents interest
expense. As of September 30, 1995, the ESOP trust held 239,129 shares of
NUI common stock, of which 175,566 shares were allocated to
participating employees. Participating employees are entitled to vote
the allocated shares and the ESOP trustee votes the remainder of the
shares.<PAGE>
Dividend Restrictions. The Company's long-term debt agreements
include, among other things, restrictions as to the payment of cash
dividends. Under the most restrictive of these provisions, the Company
was permitted to pay $17 million of cash dividends at September 30,
1995.
5. Notes Payable to Banks
At September 30, 1995, the Company's outstanding notes payable to
banks were $37.9 million with a combined weighted average interest rate
of 6.1%. Unused lines of credit at September 30, 1995 were $120.1
million.
The weighted average daily amount outstanding of notes payable to
banks and the weighted average interest rate on that amount was $58
million at 5.9% in fiscal 1995, $82 million at 4.1% in fiscal 1994 and
$53.9 million at 3.6% in fiscal 1993.
6. Leases
Utility plant held under capital leases amounted to $22.9 million at
September 30, 1995 and September 30, 1994, with related accumulated
amortization of $10.3 million and $9.7 million, respectively. These
properties consist principally of leasehold improvements and office
furniture and fixtures. A summary of future minimum payments for
properties held under capital leases follows (in thousands):
1996 $ 2,710
1997 2,436
1998 2,215
1999 8,631
2000 174
2001 and thereafter 288
-------
Total future minimum
payments 16,454
Amount representing
interest (3,709)
Current portion of capital (1,631)
lease obligations -----
$11,114
Capital lease obligations ======
Minimum payments under noncancelable operating leases, which relate
principally to office space, are approximately $3.9 million in fiscal
1996, $3.4 million in fiscal 1997, $3.1 million in both fiscal 1998 and
1999, and $3.3 million in fiscal 2000.
Rents charged to operations expense were $4.6 million in fiscal 1995,
$4.3 million in fiscal 1994 and $4.2 million in fiscal 1993.
7. Financial Instruments
Effective October 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", which requires the Company to carry its
investments in marketable securities at their current market value. As
of September 30, 1995, the market value of the Company's investments in<PAGE>
marketable securities exceeded their cost by approximately $372,000,
which unrealized gain is reflected net of deferred income taxes in the
accompanying consolidated balance sheet as a component of shareholders'
equity. As of September 30, 1994, the Company's investments in
marketable securities was carried at cost, which approximated market
value.
The fair value of the Company's cash equivalents, funds for
construction held by trustee and notes payable to banks are
approximately equivalent to their carrying value. The fair value of the
Company's long-term debt exceeded its carrying value by approximately $8
million as of September 30, 1995, and was less than its carrying value
by approximately $5 million as of September 30, 1994. The fair value of
long-term debt was estimated based on quoted market prices for the same
or similar issues.
8. Consolidated Taxes
The provision for Federal income taxes is comprised of the following
(in thousands):
1995 1994 1993
Currently payable $ 833 $(4,102) $(1,571)
----- ----- -----
Deferred:
Depreciation of
utility plant 3,546 2,409 2,298
Alternative minimum
tax (2,679) 108 (732)
Deferred charges and
regulatory assets 834 1,216 1,282
Pension (1,211) (155) (200)
Gross receipts and
franchise taxes 1,566 3,700 4,947
Other, net (51) (385) 1,131
----- ----- -----
Total deferred, net 2,005 6,893 8,726
----- ----- -----
Amortization of
investment tax
credits (468) (476) (461)
----- ----- -----
Total provision
for Federal income $2,370 $2,315 $6,694
taxes ===== ===== =====
The components of the Company's net deferred tax liability (asset) as
of September 30, 1995 and 1994 are as follows (in thousands):
1995 1994
Depreciation and other utility
plant differences $45,142 $42,653
Plant acquisition adjustments 11,650 11,053
Alternative minimum tax credit (4,632) (1,952)
Unamortized investment tax credit (2,467) (2,629)<PAGE>
Deferred charges and regulatory assets 5,882 5,052
Gross receipts and franchise taxes 3,132 1,566
Other (6,761) (5,677)
------ ------
$51,946 $50,066
====== ======
The alternative minimum tax credit can be carried forward indefinitely
to reduce the Company's future tax liability.
The Company's effective income tax rates differ from the statutory
Federal income tax rates due to the following (in thousands):
1995 1994 1993
Income before
Federal income taxes $7,888 $13,095 $20,504
----- ------ ------
Federal income taxes
computed at the
statutory tax rate
(34% in fiscal 1995
and 1994, and 34.75%
in fiscal 1993) 2,682 4,452 7,125
Increase (reduction)
resulting from:
Excess of book
over tax
depreciation 367 373 432
Amortization of
investment tax
credits (468) (476) (461)
Adjustments of
prior years'
taxes -- (1,770) --
Other, net (211) (264) (402)
----- ----- -----
Total provision for
Federal income
taxes 2,370 2,315 6,694
Provision (benefit)
for state income
taxes 756 (212) 332
----- ----- -----
Total provision for
income taxes 3,126 2,103 7,026
(Less) provision
included in other
income and expense (240) (5) (264)
----- ----- -----
Provision for income
taxes included in
operating expenses $2,886 $2,098 $6,762
===== ===== =====
9. Retirement Benefits
Pension Benefits. The Company has non-contributory defined benefit
retirement plans which cover all of its employees other than the CGF
union employees who participate in a union sponsored multi-employer
plan. The Company funds its plans in accordance with the requirements of<PAGE>
the Employee Retirement Income Security Act of 1974 and makes
contributions to the union sponsored plan in accordance with its
contractual obligations. Benefits paid under the Company's plans are
based on years of service and levels of compensation. The Company's
actuarial calculation of pension expense is based on the projected unit
cost method.
The components of pension expense for the Company's plans were as
follows (in thousands):
1995 1994 1993
Service cost $2,044 $2,579 $ 1,775
Interest cost 5,290 5,016 4,394
Return on plan assets (7,292) (6,855) (11,240)
Net amortization (831) (343) 4,805
Special termination
benefits 4,083 -- --
----- ----- -----
Pension expense
(credit) $3,294 $ 397 $ (266)
===== ===== =====
The status of the Company's funded plans as of September 30 was as
follows (in thousands):
1995 1994
Actuarial present value of
benefit obligation:
Vested benefits $64,125 $48,658
Non-vested benefits 2,626 3,188
------- -------
Accumulated benefit obligation 66,751 51,846
Projected increases in
compensation levels 15,658 15,869
------- -------
Projected benefit obligation 82,409 67,715
Market value of plan assets 96,910 81,219
------ ------
Plan assets in excess of
projected benefit obligation 14,501 13,504
Unrecognized net gain (loss) and
prior service cost (10,287) (5,344)
Unrecognized net transition
asset (3,924) (4,576)
Deferred special termination --
benefits (573)
------ ------
Pension prepayment (liability)$ (283) $ 3,584
====== ======
The projected benefit obligation was calculated using a discount rate
of 7.5% in fiscal 1995 and 8% in fiscal 1994 and an assumed annual
increase in compensation levels of 5% in fiscal 1995 and fiscal 1994.
The expected long-term rate of return on assets is 9%. The assets of the
Company's funded plans are invested primarily in publicly-traded fixed
income and equity securities. <PAGE>
Certain key employees also participate in an unfunded supplemental
retirement plan. The projected benefit obligation under this plan was
$3.1 million as of September 30, 1995 and $3.2 million as of September
30, 1994, and the expense for this plan was approximately $0.4 million
in fiscal 1995, $0.5 million in fiscal 1994 and $0.4 million in fiscal
1993.
Postretirement Benefits Other Than Pensions. The Company provides
certain health care benefits to all retirees receiving benefits under a
Company pension plan other than the CGF plan, who reach retirement age
while working for the Company.
In fiscal 1994, the Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" ("SFAS 106"), which, among other things, requires
companies to accrue the expected cost of providing other postretirement
benefits to employees and their beneficiaries during the years that
eligible employees render the necessary service. The Company does not
currently fund these future benefits.
The components of postretirement benefit expense other than pensions
for the years ended September 30, 1995 and 1994 were as follows (in
thousands):
1995 1994
Service cost $ 518 $ 515
Interest cost 1,713 1,462
Amortization of transition
obligation 1,028 1,028
Other 132 --
----- -----
Net postretirement benefit
expense 3,391 3,005
Benefits paid (1,352) (509)
----- -----
Increase in accrued
postretirement benefit
obligation $ 2,039 $ 2,496
===== =====
The status of the Company's postretirement plans other than pensions
as of September 30, 1995 and 1994 was as follows (in thousands):
1995 1994
Accumulated postretirement
benefit obligation:
Retirees $15,045 $ 9,951
Fully eligible active plan
participants 3,729 5,233
Other active plan
participants 6,725 6,330
----- -----
Total accumulated postretirement
benefit obligation 25,499 21,514
Unrecognized transition
obligation (18,503) (19,531)
Unrecognized net gain (loss) (1,844) 1,130
----- ----- <PAGE>
Accrued postretirement benefit
obligation $ 5,152 $ 3,113
===== =====
The health care trend rate assumption is 11.35% in the first year
gradually decreasing to 5.5% for the year 2005 and later. The discount
rate used to compute the accumulated postretirement benefit obligation
was 7.5% in fiscal 1995 and 8% in fiscal 1994. An increase in the
health care trend rate assumption by one percentage point in all years
would increase the accumulated postretirement benefit obligation by
approximately $3.3 million and the aggregate annual service and interest
costs by approximately $0.3 million.
The Company has received an order from the North Carolina Utilities
Commission to include the amount of postretirement benefit expense other
than pensions computed under SFAS 106 in rates. The Company has also
received an order from the New Jersey Board of Public Utilities (the
"NJBPU") permitting the Northern Division to defer the difference
between the amount of postretirement benefits expense other than
pensions computed as claims are incurred and the amount computed on the
accrual method in accordance with SFAS 106, pending ratemaking treatment
that would be considered in a base rate proceeding. The consensus issued
in 1993 by the Emerging Issues Task Force of the Financial Accounting
Standards Board (the "EITF") permits rate regulated companies to defer
such expenses for as long as five years when the ratemaking treatment
provides for full recovery within the succeeding fifteen years. The
Company will seek ratemaking treatment that is consistent with the EITF
consensus.
The Company continually evaluates alternative ways to manage these
benefits and control their costs. Any changes in the plan or revisions
to assumptions that affect the amount of expected future benefit may
have a significant effect on the amount of the reported obligation and
the annual deferral and expense.
10. Commitments and Contingencies
Commitments. Capital expenditures are expected to be approximately $42
million in fiscal 1996.
Environmental Matters. The Company is subject to federal and state
laws with respect to water, air quality, solid waste disposal and
employee health and safety matters, and to environmental regulations
issued by the United States Environmental Protection Agency (the "EPA"),
the New Jersey Department of Environmental Protection (the "NJDEP"), and
other federal and state agencies.
The Company owns, or previously owned, certain properties on which
manufactured gas plants ("MGP") were operated by the Company or by other
parties in the past. Coal tar residues are present on the six MGP sites
located in the Northern Division. The Company has reported the presence
of the six MGP sites to the EPA, the NJDEP and the NJBPU. In 1991, the
NJDEP issued an Administrative Consent Order for an MGP site located at
South Street in Elizabeth, New Jersey, wherein the Company agreed to
conduct a remedial investigation and to design and implement a
remediation plan. In 1992 and 1993, the Company entered into a
Memorandum of Agreement with the NJDEP for each of the other five
Northern Division MGP sites. Pursuant to the terms and conditions of
the Administrative Consent Order and the Memoranda of Agreement, the<PAGE>
Company is conducting remedial activities at all six sites with
oversight from the NJDEP.
PSGS owned ten former MGP facilities, only three of which PSGS
currently owns. The former MGP sites are located in the states of North
Carolina, South Carolina, Pennsylvania, New York and Maryland. No
provision had been made, prior to the PSGS Merger, in PSGS' financial
statements for environmental remediation. PSGS has joined with other
North Carolina utilities to form the North Carolina Manufactured Gas
Plant Group (the "MGP Group"). The MGP Group has entered into a
Memorandum of Understanding with the North Carolina Department of
Environment, Health and Natural Resources ("NCDEHNR") to develop a
uniform program and framework for the investigation and remediation of
MGP sites in North Carolina. The Memorandum of Understanding
contemplates that the actual investigation and remediation of specific
sites will be addressed pursuant to Administrative Consent Orders
between the NCDEHNR and the responsible parties. The NCDEHNR has
recently sought the investigation and remediation of sites owned by
members of the MGP Group and has entered into Administrative Consent
Orders with respect to four such sites. None of these four sites are
currently or were previously owned by PSGS.
In order to quantify the potential future expenditures with respect to
all of its MGP sites, the Company, with the aid of environmental
consultants, regularly assesses the possible costs associated with
conducting investigative activities at each of the Company's sites and
implementing appropriate remedial actions, as well as the probability of
whether such actions will be necessary. Based on the Company's most
recent assessment, as of September 30, 1995, the Company has recorded a
total reserve for probable environmental investigation and remediation
costs of approximately $34 million, which the Company expects to expend
during the next twenty years. The reserve, which includes probable
remediation costs for 7 of the Company's 16 MGP sites, is net of
approximately $5 million which will be borne by a prior owner and
operator of two of the New Jersey sites in accordance with a cost
sharing agreement. Of this approximate $34 million reserve,
approximately $30 million relates to Northern Division MGP sites and
approximately $4 million relates to PSGS MGP sites. The Company is not
able at this time to determine the requirement for remediation if
contamination is present at any of the other sites and, if present, the
costs associated with such remediation. The Company believes that there
may be up to an additional $21 million associated with conducting
investigative activities and implementing remedial actions, if
necessary, with respect to all of the Company's MGP sites during a
future period of time that may range up to fifty years. Of this $21
million in possible future expenditures, approximately $10 million
relates to the Northern Division MGP sites and approximately $11 million
relates to the PSGS MGP sites.
The Company believes that its remediation costs for the Northern
Division MGP sites will be recoverable in rates and that a portion of
such costs may be recoverable from the Company's insurance carriers. The
most recent base rate order for the Northern Division permits the
Company to utilize full deferred accounting for expenditures related to
MGP sites. The order also provides for the recovery of $130,000 annually
of MGP related expenditures incurred prior to the rate order.
Accordingly, the Company has recorded a regulatory asset of
approximately $33 million as of September 30, 1995, reflecting the
future recovery of environmental remediation liabilities related to the
Northern Division MGP sites. In September 1995, the Northern Division<PAGE>
filed a petition with the NJBPU to establish a MGP Remediation
Adjustment Clause ("RAC"). The RAC would enable the Company to recover
actual MGP expenses over a rolling 7 year period. Other New Jersey
utilities have received similar authorization to recover MGP
environmental expenditures in rates. With respect to costs associated
with the PSGS MGP sites, the Company intends to pursue recovery from
ratepayers in the PSGS states, former owners and operators, and
insurance carriers, although the Company is not able to express a belief
as to whether any or all of these recovery efforts will be successful.
Since the Company is not able at this time to determine the extent of
recovery, if any relating to the PSGS MGP sites, as of September 30,
1995, the Company recorded probable remediation costs of $3.7 million as
an additional plant acquisition adjustment (see Note 2). The Company is
working with the regulatory agencies to prudently manage its MGP costs
so as to mitigate the impact of such costs on both ratepayers and
shareholders.
Gas Procurement Contracts. Certain of the Company's long-term
contracts for the supply, storage and delivery of natural gas include
fixed charges that amount to approximately $78 million annually. The
Company currently recovers, and expects to continue to recover, such
fixed charges through its purchased gas adjustment clauses. The Company
also is committed to purchase, at market-related prices, minimum
quantities of gas that, in the aggregate, are approximately 9 billion
cubic feet per year or to pay certain costs in the event the minimum
quantities are not taken. The Company expects that minimum demand on its
systems for the duration of these contracts will continue to exceed
these minimum purchase obligations.
The implementation of the Federal Energy Regulatory Commission's
("FERC") Order No. 636 required the restructuring of the Company's
contracts with certain pipeline companies that together supply less than
one-third of the Company's total firm gas supply. Under Order No. 636
the pipeline companies are passing through to their customers transition
costs associated with mandated restructuring, such as costs resulting
from buying out unmarketable gas purchase contracts. The Company has
been charged approximately $7 million of such costs as of September 30,
1995, which the Company has been authorized to recover through its
purchased gas adjustment clauses. The Company currently estimates that
its remaining Order No. 636 transition obligation will be approximately
$9.1 million, which it expects to also recover through the Company's
purchased gas adjustment clauses as these costs are incurred. This
transition obligation is subject to possible future FERC actions based
upon filings by the Company's pipeline suppliers.
Other. The Company is involved in various claims and litigation
incidental to its business. In the opinion of management, none of these
claims and litigation will have a material adverse effect on the
Company's results of operations or its financial condition.
11. Unaudited Quarterly Financial Data
The quarterly financial data presented below reflects the seasonal
nature of the Company's operations which normally results in higher
earnings during the heating season which is primarily in the first two
fiscal quarters (in thousands, except per share amounts):<PAGE>
Fiscal Quarters
First Second Third Fourth
1995:
Operating
Revenues $105,852 $147,940 $62,137 $60,516
Operating Income 8,348 12,931 2,376 204
Net Income (Loss) 3,978 8,554 (2,196) (4,819)
Net Income (Loss)
Per Share 0.44 0.93 (0.24) (.53)
1994:
Operating
Revenues $108,822 $156,120 $77,935 $62,363
Operating Income
(Loss) 9,407 15,374 1,732 (673)
Net Income (Loss) 5,852 11,818 (2,234) (4,656)
Net Income (Loss)
Per Share 0.71 1.43 (0.25) (0.51)
Quarterly net income (loss) per share in fiscal 1994 does not total to
the annual amounts due to rounding and to changes in the average common
shares outstanding.
In the first and second quarters of fiscal 1995, the Company incurred
after-tax restructuring and other non-recurring charges of approximately
$0.9 million and $4.7 million, respectively.
In the fourth quarter of fiscal 1994, the Company reversed $1.6
million of income tax reserves no longer required as a result of
management's review of necessary reserve levels, and incurred after-tax
non-recurring charges of $0.6 million.<PAGE>
<TABLE>
SCHEDULE II
NUI Corporation and Subsidiaries
Valuation and Qualifying Accounts
For Each of the Three Years in the
Period Ended September 30, 1995
(Dollars in thousands)
<CAPTION>
Additions
-----------------------
Description Balance, Charged to Balance,
Beginning Costs End of
of Period and Expenses Other Deductions Period
<S> <C> <C> <C> <C> <C>
1995
Allowance for
doubtful accounts $ 1,368 $2,449 $1,127(a) $3,255(b) $ 1,689
Environmental
remediation reserve(d) $32,181 -- $1,800 -- $33,981
1994
Allowance for
doubtful accounts $ 1,225 $2,771 $ 970(a) $3,780(b) $ 1,368
$ 182(c)
Environmental
remediation reserve(d) $24,700 -- $7,481(d) -- $32,181
1993
Allowance for
doubtful accounts $ 1,370 $1,852 $ 474(a) $2,471(b) $ 1,225
Environmental
remediation reserve(d) $24,700 -- -- -- $24,700
<F1>
(a) Recoveries.
<F2>
(b) Uncollectible amounts written off.
<F3>
(c) Added as a result of an acquisition.
<F4>
(d) The related cost of the reserve established in fiscal 1991,
as well as $5.6 million of fiscal 1994 additions, was recorded
as a regulatory asset. The remaining fiscal 1994 additions of
$1.9 million and all of fiscal 1995 additions was recorded as
an additional utility plant acquisition adjustment. See
"Commitments and Contingencies--Environmental Matters,"
Note 10 of the Notes to the Consolidated Financial Statements. <PAGE>
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the Township of Bedminster, State of New Jersey, on the 21st day of
December, 1995
NUI CORPORATION
By: JAMES R. VAN HORN
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
JOHN KEAN, JR. President, Chief Executive December 21, 1995
Officer and Director
(Principal executive
officer)
JOHN KEAN Chairman and Director December 21, 1995
STEPHEN M. LIASKOS Controller (Principal December 21, 1995
financial & accounting
officer)
C. R. CARVER Director December 21, 1995
DR. VERA KING FARRIS Director December 21, 1995
JAMES J. FORESE Director December 21, 1995
ROBERT W. KEAN, JR. Director December 21, 1995
BERNARD S. LEE Director December 21, 1995
R. V. WHISNAND Director December 21, 1995
JOHN WINTHROP Director December 21, 1995<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
3(i) Certificate of Incorporation, amended and restated as
of December 1, 1995
3(ii) By-Laws, amended and restated as of October 24, 1995
10(xxiii) Form of Termination of Employment and Change in Control
Agreements
10(xxxvi) Service Agreement for Rate Schedule FT by and between
Transcontinental Gas Pipe Line Corporation and EGC
(Contract #1.0431) dated April 1, 1995
10(xxxvii) Service Agreement for Rate Schedule FT by and between
Transcontinental Gas Pipe Line Corporation and EGC
(Contract #1.0445) dated April 1, 1995
10(xxxviii) Service Agreement for Rate Schedule SS-1 by and between
Texas Eastern Transmission Corporation and EGC
(Contract #400196) dated September 1, 1995
10(xxxix) Gas Storage Agreement under Rate Schedule FS by and
between Tennessee Gas Pipeline Company and EGC
(Contract #8703) dated November 1, 1994
10(xl) Consulting Agreement, dated as of March 24, 1995,
between NUI Corporation and John Kean
10(xli) Form of Deferred Compensation Agreement
21 Subsidiaries of NUI Corporation
23 Consent of Independent Public Accountants
27 Financial Data Schedule<PAGE>
EXHIBIT 3(i)
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION
of
NUI CORPORATION
Pursuant to Section 14A: 7-2(4) of the New Jersey
Business Corporation Act
NUI CORPORATION, a corporation organized and existing under
the New Jersey Business Corporation Act, in accordance with the
provisions of Section 14A:7-2(4) thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of
the said Corporation, the said Board of Directors on November 28, 1995
adopted the following resolutions creating a series of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
its Amended and Restated Certificate of Incorporation, a series of
Preferred Stock of the Corporation be and it hereby is created and that
the designation and amount thereof and the voting powers, preferences
and relative, participating, optional, and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock"
and the number of shares constituting such series shall initially be one
hundred thousand (100,000), no par value, such number of shares to be
subject to increase or decrease by action of the Board of Directors as
evidenced by a certificate of designations.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $10 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share<PAGE>
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, no par
value, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend payment Date, since the first issuance of any share
or fraction of a share of Series A Junior Participating Preferred Stock.
In the event the Corporation shall at any time after November 28, 1995
(the "Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any quarterly Dividend Payment Date and the next
subsequent quarterly Dividend Payment Date, a dividend of $10 per share
on the Series A Junior Participating Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A Junior Participating Preferred Stock, unless the
date of issue of such share is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a
Quarterly Dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter set<PAGE>
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the corpora-
tion shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of hares, then in each such case the
number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred
Stock (including holders of the Series A Junior Participating
Preferred Stock) with dividends in arrears in an amount equal to
(6) quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors
shall be exercised unless the holders of ten percent in number of
shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of the holders of Common Stock
shall not affect the exercise by the holders of Preferred Stock of
such voting right. At any meeting at which the holders of Pre-
ferred Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as a
class, to fill such vacancies, if any, in the Board of Directors as
may then exist up to two (2) Directors or, if such right is
exercised at an annual meeting, to elect two (2) Directors. If the
number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of<PAGE>
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu
with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the Chairman of the Board, the
President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by
mailing a copy of such notice to him at his last address as the
same appears on the books of the Corporation. Such meeting shall
be called for a time not earlier than 10 days and not later than 60
days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have exercised their
right to elect two (2) Directors voting as a class, after the
exercise of which right (x) the Directors so elected by the holders
of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors
may (except as provided in paragraph (C)(ii) of this Section 3) be
filled by vote of a majority of the remaining Directors theretofore
elected by the holders of the class of stock which elected the
Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in
the Restated Certificate of Incorporation or by-laws irrespective
of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Restated
Certificate of Incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and
(z) in the preceding sentence may be filled by a majority of the
remaining Directors.<PAGE>
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Junior Participating Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, except dividends
paid ratably on the Series A Junior Participating Preferred Stock
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series
or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the<PAGE>
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares upon their
cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of
the Corporation, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A
Junior Participating Preferred Stock shall have received $100 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately adjusted
as set forth in subparagraph C below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment Number"). Following
the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series
A Junior Participating Preferred Stock and Common Stock, respectively,
holders of Series A Junior Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for<PAGE>
or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior
Participating Preferred Stock shall at the same time be similarly ex-
changed or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change
of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any
manner which would materially alter or change the powers, preferences or
special rights of the Series A Junior Participating Preferred Stock so
as to affect them adversely without the affirmative vote of the holders
of two-thirds (2/3) or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights
of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this 1st day of December, 1995.
Attest: /S/ JOHN KEAN, JR.
John Kean, Jr.
President and Chief Executive
Officer
/S/ JAMES R. VAN HORN
James R. Van Horn
General Counsel and Secretary<PAGE>
EXHIBIT 3(ii)
NUI Corporation
Incorporated Under the Laws of the
State of New Jersey
AMENDED AND RESTATED BY-LAWS
Adopted as of October 24, 1995
ARTICLE I
OFFICES
The principal office of the Company shall be located in the State
of New Jersey. The Board of Directors may change the location of the
principal office of the Company and may from time to time designate
other offices at such other places, either within or without the State
of New Jersey, as the business of the Company may require.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meeting: The Annual Meeting of Shareholders for
the election of Directors and the transaction of any other business as
may properly come before such meeting shall be held at such place as
shall be designated by the Board of Directors, on the second Tuesday of
March of each year at the hour of 10:30 A.M., or on such other day at
such time as shall be designated by the Board of Directors. If said day
be a legal holiday, said meeting shall be held at the same hour on the
next succeeding business day.
Section 2. Special Meetings: Special Meetings of the Shareholders
may be called only by the President of the Company or by the Board of
Directors or as otherwise required by law. Special Meetings shall be
held at such time and place as shall from time to time be designated by
the Board of Directors and stated in the notice of such meeting. At a
Special Meeting no business shall be transacted and no corporate action
shall be taken other than that stated in the notice of the meeting.
Section 3. Notice of Meetings: Written notice of the place, date
and hour of any Shareholders' meeting, whether annual or special, and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called shall be given to each Shareholder entitled to vote
thereat, by mailing the same to the Shareholder at the address of the
Shareholder that appears upon the records of the Company not less than
ten (10) nor more than sixty (60) days prior to the date of such
meeting. Notice of any adjourned meeting need not be given other than by
announcement at the meeting so adjourned, unless otherwise ordered in
connection with such adjournment. Such further notice, if any, shall be
given as may be required by law.
Section 4. Waiver of Notice: A written waiver of notice signed by
the person entitled to notice, whether before or after the meeting,
shall be deemed equivalent to notice. Attendance of a Shareholder at a
meeting shall constitute a waiver of notice of such meeting, except when
a Shareholder attends a meeting and, prior to the conclusion thereof,<PAGE>
objects to the transaction of any business on the grounds that proper
notice of the meeting was not given.
Section 5. Quorum: Any number of Shareholders, together holding at
least a majority of the capital stock of the Company issued and
outstanding and entitled to vote, present in person or represented by
proxy at any meeting duly called, shall constitute a quorum for all
purposes at a meeting of Shareholders except as may otherwise be
provided by law.
Section 6. Adjournment of Meetings: If at the time for which a
meeting of Shareholders has been called less than a quorum is present,
the meeting may be adjourned to another time or place by a majority vote
of the Shareholders present in person or by proxy and entitled to vote
thereat, without notice other than by announcement at the meeting except
as may otherwise be required by law. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have
been transacted at the meeting as originally called.
Section 7. Voting: Each Shareholder entitled to vote at a meeting
of the Shareholders shall be entitled to one vote for each share of
stock registered in such Shareholder's name on the books of the Company
on the date fixed as the record date for the determination of its
Shareholders entitled to vote. In accordance with the New Jersey
Business Corporation Act, each Shareholder entitled to vote at a meeting
of Shareholders may authorize another person or persons to act for him
by proxy, duly appointed by instrument in writing subscribed by such
Shareholder. Said proxy shall not be valid for more than eleven (11)
months unless a longer time is expressly provided therein. At all
meetings of Shareholders all matters shall be determined by a majority
vote of the Shareholders entitled to vote thereat present in person or
represented by proxy except as otherwise provided by law, the
Certificate of Incorporation or these By-Laws.
Section 8. Notice Of Shareholder Nominations And Proposed Business:
(1) At any annual meeting of the Shareholders, (i)
nominations for the election of directors and (ii) business to
be brought before any such Shareholders' meeting may only be
made or proposed (a) pursuant to the Company's notice of meet-
ing, (b) by or at the direction of the Board of Directors or
(c) by any Shareholder of the Company who is a Shareholder of
record at the time of giving of the notice provided for in
this By-law, who shall be entitled to vote at such meeting and
who complies with the notice procedures set forth in this By-
law.
(2) Any Shareholder may nominate one or more persons for
election as directors at a Shareholders' meeting or propose
business to be brought before a Shareholders' meeting, or
both, pursuant to clause (c) of paragraph 1 of this By-law,
only if the Shareholder has given timely notice thereof in
proper written form to the Secretary of the Company. To be
timely, a Shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company
not less than 90 days nor more than 120 days prior to the
Shareholders' meeting; provided, however, that if less than
100 days' notice or other prior public disclosure of the date
of the meeting is given or made to the Shareholders, notice by
the Shareholder to be timely must be received no later than<PAGE>
the close of business on the 10th day following the earlier of
the day on which notice of the date of the meeting was mailed
or other public disclosure was made. To be in proper written
form a Shareholder's notice to the Secretary shall set forth
as to each matter the Shareholder proposes to bring before the
meeting:
(a) a brief description of the business proposed and/or
persons nominated, as applicable, and the reasons for
proposing such business or making such nomination;
(b) the name and address, as they appear on the Company's
books, of the Shareholder proposing such business or
making such nomination, and the name and address of the
beneficial owner, if any, on whose behalf the proposal is
made;
(c) the class or series and number of shares of the
Company which are owned beneficially and of record by
such Shareholder of record and by the beneficial owner,
if any, on whose behalf the proposal is made;
(d) with respect to any nomination, (i) a description of
all arrangements and understandings between the
Shareholder proposing such nomination and each nominee
and any other person or persons (naming such person or
persons) in connection with the nomination or nominations
are to be made, (ii) the name, age, business address and
residence address of such nominee, (iii) the class or
series and number of shares of capital stock of the
Company owned beneficially and of record by such nominee,
(iv) the written consent of the proposed nominee to being
named in the solicitation material and to serving as a
director if elected and (v) a representation that such
Shareholder intends to appear in person or by proxy at
the meeting to nominate the persons named in the notice;
(e) with respect to any business to be proposed, (i) a
description of all arrangements or understandings between
the Shareholder proposing such business and any other
person or persons (naming such person or persons) in
connection with the proposal of such business by such
Shareholder and any material interest of such Shareholder
in such business and (ii) a representation that such
Shareholder intends to appear in person or by proxy at
the meeting to bring such business before the meeting;
and
(f) such other information regarding each nominee or
matter of business to be proposed as would be required to
be included in solicitations of proxies, or is otherwise
required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended.
(3) Notwithstanding anything in these By-laws to the
contrary, no business shall be conducted at any Shareholders'
meeting and no Shareholder may nominate any person for
election at any Shareholders' meeting except in accordance
with the procedures set forth in this By-law. The Chairman of
the meeting shall, if the facts warrant, determine and declare<PAGE>
to the meeting that any proposed business and/or any proposed
nomination for election as director was not properly brought
or made before the meeting or made in accordance with the
procedures prescribed by these By-laws, and if he should so
determine, he shall so declare to the meeting and any such
proposed business or proposed nomination for election as
director not properly brought before the meeting or made shall
not be transacted or considered.
ARTICLE III
DIRECTORS
Section 1. Qualifications: Directors need not be Shareholders and
need not be citizens of the United States or residents of New Jersey.
Section 2. Duties and Powers: The business and affairs of the
Company shall be managed by or under the direction of the Board of
Directors, and, unless the vote of a greater number is required by law,
the Certificate of Incorporation or these By-Laws, the vote of the
majority of the Directors present at a meeting shall be the act of the
Board of Directors in the transaction of business, provided a quorum is
present. The Directors may exercise all such powers of the Company and
do all such lawful acts and things as they may deem proper and as are
consistent with law, the Certificate of Incorporation and these By-Laws.
Section 3. Election: Directors shall be elected by the Shareholders
at the Annual Meeting of Shareholders to hold office for the term
elected and until their respective successors are elected and qualified
or until their earlier resignation or removal. If the election of
Directors shall not be held on the day designated by or pursuant to
authority granted in these By-Laws, the Directors shall cause the same
to be held as soon thereafter as may be convenient.
(a) Except as otherwise fixed pursuant to Article VI of the
Certificate of Incorporation relating to the rights of the holders of
any class or series of preferred stock having a preference over the
common stock as to dividends or upon liquidation, or to elect additional
Directors under specified circumstances, the Board of Directors shall
consist of not less than eight (8) nor more than twenty-five (25)
persons; provided, however, that the authorized number of Directors may
be changed to any number between eight (8) and twenty-five (25) from
time to time exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized
Directors (whether or not there exist any vacancies in previously
authorized Directorships at the time any such resolution is presented to
the Board for adoption).
(b) The Directors (other than those who may be elected by the
holders of any class or series of preferred stock having a preference
over common stock as to dividends or upon liquidation) shall be
classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, one
class to hold office initially for a term expiring at the annual meeting
of Shareholders to be held in 1992, another class to hold office
initially for a term expiring at the annual meeting of Shareholders to
be held in 1993, and another class to hold office initially for a term
expiring at the annual meeting of Shareholders to be held in 1994, with<PAGE>
the members of each class to hold office until their successors are
elected and qualified. At each annual meeting of the Shareholders of the
Company, the successors to the class of Directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the
annual meeting of Shareholders held in the third year following the year
of their election. The election of Directors need not be by ballot.
(c) Except as otherwise fixed pursuant to the provisions of
Article VI of the Certificate of Incorporation relating to the rights of
the holders of any class or series of preferred stock having a
preference over the common stock as to dividends or upon liquidation to
elect Directors under specified circumstances, newly created
Directorships resulting from any increase in the authorized number of
Directors or any vacancies in the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or
other cause may be filled only by a majority vote of the Directors then
in office, though less than a quorum of the Board of Directors. If any
applicable provision of New Jersey law expressly confers power on
Shareholders to fill such a Directorship at a special meeting of
Shareholders, such a Directorship may be filled at such a meeting only
by the affirmative vote of at least 75 percent of the then-outstanding
shares of the voting stock, voting together as a single class (it being
understood that for all purposes of this Section 3 and compliance with
Article XI of the Certificate of Incorporation, each share of the voting
stock shall have the number of votes granted to it pursuant to Article
VI of the Certificate of Incorporation or any resolution or resolutions
of the Board of Directors pursuant to authority expressly granted to and
vested in it by the provisions of Article VI of the Certificate of
Incorporation). Any Director elected in accordance with the two
preceding sentences shall hold office for the remainder of the full term
of the class of Directors in which the new Directorship was created or
the vacancy occurred and until such Director's successor shall have been
elected and qualified. No decrease in the number of authorized Directors
constituting the entire Board of Directors shall shorten the term of any
incumbent Director.
(d) Subject to the rights of the holders of any class or series of
preferred stock having preference over the common stock as to dividends
or upon liquidation or to elect Directors under specified circumstances,
any Director, or the entire Board of Directors, may be removed from
office at any time, but only for cause and only by the affirmative vote
of the holders of at least 75 percent of all of the then-outstanding
shares of the voting stock, voting together as a single class. The
Company must notify the Director of the grounds of his impending removal
and the Director shall have an opportunity, at the expense of the
Company, to present his defense to the Shareholders by a statement which
accompanies or precedes the Company's solicitation of proxies to remove
him.
Section 4. Resignation of Directors: Any Director may resign at any
time upon written notice to the Company. Such resignation shall take
effect at the time specified therein, and if no time be specified, at
the time of its receipt by the Chairman of the Board, if any, the Chief
Executive Officer, if any, the President or the Secretary. The
acceptance of a resignation shall not be necessary to make it effective,
unless so specified therein.
Section 5. Meetings: The Board of Directors shall hold an annual
meeting for the purpose of organization and the transaction of any
business immediately after the Annual Meeting of the Shareholders,<PAGE>
provided a quorum is present. Other regular meetings may be held at such
times as may be determined from time to time by resolution of the Board
of Directors. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board, if any, the Chief Executive
Officer, if any, by the President or by a majority of the Directors then
in office, though less than a quorum of the Board of Directors.
Section 6. Notice and Place of Meetings: Regular meetings of the
Board of Directors may be held at such time and place as shall be
designated by resolution of the Board of Directors. No notice need be
given of any regular meeting of the Board. Notice of any special meeting
specifying the time and place of such meeting and the business to be
transacted thereat shall be served upon each Director by mail at his
residence or usual place of business at least two (2) days before the
day on which such meeting is to be held, or sent to him at such place by
telegraph, cable, electronic communication or transmitted by way of a
guaranteed overnight courier service, or delivered personally or by
telephone not later than 24 hours prior to the time at which the meeting
is to be held. No notice of the annual meeting shall be required if held
immediately after the annual meeting of the Shareholders and if a quorum
is present. Notice of a meeting need not be given to any Director who
submits a signed waiver of notice before or after the meeting, nor to
any Director who attends the meeting without protesting, prior to the
conclusion thereof, the lack of notice.
Section 7. Business Transacted at Meetings: Any business may be
transacted and any corporate action may be taken at any regular meeting
of the Board of Directors at which a quorum shall be present, whether
such business or proposed action be stated in the notice of such meeting
or not, unless special notice of such business or proposed action shall
be required by law.
Section 8. Quorum: A majority of the entire Board of Directors then
in office shall be necessary to constitute a quorum for the transaction
of business. If a quorum is not present at a meeting of the Board of
Directors, a majority of the Directors present may adjourn the meeting
to such time and place as they may determine without notice other than
announcement at the meeting until enough Directors to constitute a
quorum shall attend. When a quorum is once present to organize a
meeting, it shall not be broken by the subsequent withdrawal of any
Directors.
Section 9. Loans to and Guarantees for Directors: The Corporation
may lend money to, or guarantee any obligation of, or otherwise assist,
any Officer or other employee of the Corporation or of any subsidiary
who is also a Director of the Corporation whenever, in the judgment of
the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the Corporation and such loan,
guarantee or other assistance is authorized by a majority of the entire
Board of Directors. The Director who is to be loaned money, or whose
obligation is to be guaranteed, or who is otherwise to be assisted by
the Corporation, shall abstain from voting on such authorization.
Section 10. Action Without A Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if all members of the
Board or such committee, as the case may be, consent in writing to the
adoption of a resolution authorizing the action. Such resolutions and
the written consents thereto by the members of the Board or a committee
shall be filed with the minutes of the proceedings of the Board or such<PAGE>
committee as the case may be.
Section 11. Participation By Telephone: Any one or more members of
the Board or any committee thereof may participate in a meeting of the
Board or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other at the same time. Participation by such
means shall constitute presence in person at a meeting.
Section 12. Compensation: The Board of Directors may establish by
resolution reasonable compensation of all Directors for services to the
Company as Directors, including a fixed fee, if any, incurred in
attending each meeting. Nothing herein contained shall preclude any
Director from serving the Company in any other capacity, as an officer,
agent or otherwise, and receiving compensation therefor.
ARTICLE IV
COMMITTEES
Section 1. Executive Committee: The Board of Directors, by
resolution passed by a majority of the entire Board then in office, may
designate five (5) or more Directors to constitute an Executive
Committee to hold office at the pleasure of the Board, which Committee
shall, during the intervals between meetings of the Board of Directors,
have and exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Company, subject only to
such restrictions or limitations as the Board of Directors may from time
to time specify, or as limited by the New Jersey Business Corporation
Act, and shall have power to authorize the seal of the Company to be
affixed to all instruments which may require it. Any member of the
Executive Committee may be removed at any time, with or without cause,
by a resolution of a majority of the entire Board of Directors then in
office. Any person ceasing to be a Director shall ipso facto cease to be
a member of the Executive Committee. Any vacancy in the Executive
Committee occurring from any cause whatsoever may be filled from among
the Directors by a resolution of a majority of the entire Board of
Directors then in office.
Section 2. Other Committees: Other committees, whose members are to
be Directors, may be appointed by the Board of Directors, which members
shall hold office for such time and have such powers and perform such
duties as may from time to time be assigned to them by the Board of
Directors. Any member of such a committee may be removed at any time,
with or without cause, by a majority of the Board of Directors then in
office. Any vacancy in a committee occurring from any cause whatsoever
may be filled by a majority of the Board of Directors then in office.
Section 3. Resignation: Any member of a committee may resign at any
time. Such resignation shall be made in writing and shall take effect at
the time specified therein, or, if no time be specified, at the time of
its receipt by the Chairman of the Board, if any, the Chief Executive
Officer, if any, the President or the Secretary. The acceptance of a
resignation shall not be necessary to make it effective unless so
specified therein.
Section 4. Quorum: A majority of the members of a committee shall
constitute a quorum. The act of a majority of the members of a
committee present at any meeting at which a quorum is present shall be<PAGE>
the act of such committee. The members of a committee shall act only as
a committee, and the individual members thereof shall have no powers as
such.
Section 5. Record of Proceedings: Each committee shall keep a
record of its acts and proceedings and shall report the same to the
Board of Directors at its next meeting following such Committee meeting.
Section 6. Organization, Meetings. Notices: A committee may hold
its meetings at the principal office of the Company, or at any other
place upon which a majority of the committee may at any time agree. Each
committee may make such rules as it may deem expedient for the
regulation and carrying on of its meetings and proceedings. Notice of a
special meeting of such Committee may be given by the Secretary or by
the chairman of the Committee and shall be sufficiently given if mailed
to each member at his residence or usual place of business at least five
(5) days before the day on which the meeting is to be held, or if sent
to him at such place by telegraph, cable, electronic communication or
delivered personally or by telephone not later than 24 hours prior to
the time at which the meeting is to be held.
Section 7. Compensation: The members of any committee shall be
entitled to such compensation as may be allowed them by resolution of
the Board of Directors.
ARTICLE V
OFFICERS
Section 1. Number: The Officers of the Company shall be a
President, a Secretary and a Treasurer and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article
V. The Board of Directors, in its discretion, may also elect a Chairman
of the Board of Directors or a Chief Executive Officer or both.
Section 2. Election. Term of Office and Qualifications: The
Officers, except as provided in Section 3 of this Article V, shall be
elected annually by the Board of Directors immediately after the Annual
Meeting of Shareholders. Each such Officer shall, except as herein
otherwise provided, hold office until the election and qualification of
his successor or until his earlier resignation or removal. Any two or
more offices may be held by the same person, except the offices of the
President and Secretary.
Section 3. Other Officers: Other Officers, including, but not
limited to, one or more Vice-Chairmen, divisional Officers, Executive
Vice Presidents, Senior Vice Presidents, Vice-Presidents, Assistant
Vice-Presidents, Assistant Secretaries and Assistant Treasurers, may
from time to time be appointed by the Board of Directors, which other
officers shall have such powers and perform such duties as may be
assigned to them by the President unless otherwise directed by the
Board. All such Officers shall be corporate Officers of the Company with
the power to bind the Company by acts within the scope of their
authority.
Section 4. Removal of Officers: Any Officer of the Company may be
removed from office, with or without cause, by a vote of a majority of
the Board of Directors then in office. The removal of an Officer shall
be without prejudice to his contract rights, if any. Election or<PAGE>
appointment of an Officer shall not of itself create contract rights.
Section 5. Resignation: Any Officer of the Company may resign at
any time. Such resignation shall be in writing and shall take effect at
the time specified therein, and if no time be specified, at the time of
its receipt by the Secretary. The acceptance of a resignation shall not
be necessary in order to make it effective, unless so specified therein.
Section 6. Filling of Vacancies: A vacancy in any office shall be
filled by the Board of Directors.
Section 7. Compensation: The compensation of the Officers shall be
fixed by the Board of Directors, or by any committee or Officer upon
whom power in that regard may be conferred by the Board of Directors.
Section 8. Chairman of the Board of Directors: The Chairman of the
Board of Directors, if one is elected, shall be a Director and shall
preside at all meetings of the Board of Directors and of the
Shareholders at which the Chairman shall be present. In the absence of
the Chairman of the Board, the Director or Officer designated by the
Chairman shall perform and carry out the functions of the Chairman of
the Board.
Section 9. President: The President shall, subject only to the
direction and control of the Board of Directors or the Executive
Committee, have responsibility for the general management of the
business affairs and property of the Company, and of its several
Officers, and shall, subject only as aforesaid, have and exercise all
such powers and discharge such duties as usually pertain to the office
of President. The President shall perform such duties as may be assigned
from time to time by the Board of Directors.
Section 10. Chief Executive Officer: The Chief Executive Officer,
if one is elected, shall have such duties and responsibilities and shall
report to such persons as the Board of Directors shall determine from
time to time.
Section 11. Secretary: The Secretary shall attend all meetings of
the Board of Directors and of the Shareholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose,
and shall perform like duties for any committee appointed by the Board.
The Secretary shall give or cause to be given notice of all meetings of
Shareholders and special meetings of the Board of Directors and shall
perform such other duties as may be prescribed by the President or the
Board of Directors. The Secretary shall keep in safe custody the seal of
the Company and affix it to any instrument when so authorized by the
Board of Directors. In the absence of a Secretary, an Assistant
Secretary may act in the Secretary's place.
Section 12. Treasurer: The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Company and
shall deposit all monies and other valuable effects in the name and to
the credit of the Company in such depositories as may be designated by
the Board of Directors. The Treasurer shall disburse the funds of the
Company as may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and Directors at the
regular meetings of the Board, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial
condition of the Company. The Treasurer may be required to give bond for<PAGE>
the faithful discharge of his duties. In the absence of a Treasurer, an
Assistant Treasurer may act in his place. The Treasurer shall perform
such other duties as may be prescribed by the President or the Board of
Directors.
ARTICLE VI
CAPITAL STOCK
Section 1. Issue of Certificates of Stock: Certificates of
capital stock shall be in such form as shall be approved by the Board of
Directors. The Board of Directors may also provide that some or all of
the shares of any class or series shall be represented by uncertificated
shares. Certificated shares shall be numbered in the order of their
issue, and shall be signed, either manually or by facsimile signature,
by either the Chairman of the Board or the President or the Secretary
and the seal of the Company or a facsimile thereof shall be impressed,
affixed or reproduced thereon. In case any Officer or Officers who shall
have signed any such certificate or certificates shall cease to be such
Officer or Officers of the Company, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Company, such certificate or certificates may
nevertheless be adopted by the Company and be issued and delivered as
though the person or persons who signed such certificate or certificates
have not ceased to be such Officer or Officers of the Company.
Section 2. Registration and Transfer of Shares: The name of each
person owning a share of the capital stock of the Company shall be
entered on the books of the Company together with the number of shares
held by such person, the numbers of the certificates covering such
shares and the dates of issue of such certificates. The shares of stock
of the Company shall be transferable on the books of the Company by the
holders thereof in person, or by their duly authorized attorneys or
legal representatives, on surrender and cancellation of certificates for
a like number of shares, accompanied by an assignment of power of
transfer endorsed thereon or attached thereto, duly executed, and with
such proof of the authenticity of the signature as the Company or its
Agents may reasonably require. A record shall be made of each transfer.
The Board of Directors may make other and further rules and
regulations concerning the transfer and registration of certificates of
stock.
Section 3. Lost, Destroyed and Mutilated Certificates: The holder
of any stock of the Company shall immediately notify the Company of any
loss, theft, destruction or mutilation of the certificates thereof. The
Company may issue a new certificate of stock in the place of any
certificate theretofore issued by it alleged to have been lost, stolen
or destroyed, and the Board of Directors or its agent may, in its
discretion, require the owner of the lost, stolen or destroyed
certificate, or his legal representatives, to give the Company a bond,
in such sum not exceeding double the value of the stock and with such
surety or sureties as they may require, to indemnify it against any
claim that may be made against it in connection with the issue of such
new certificate.
ARTICLE VII<PAGE>
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year: The fiscal year of the Company shall
commence on the first day of October and end on the last day of
September.
Section 2. Corporate Seal: The corporate seal shall be in such
form as approved by the Board of Directors and may be altered at its
pleasure. The corporate seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.
Section 3. Notices: Except as otherwise expressly provided, any
notice required by these By-Laws to be given shall be sufficient if
given by depositing the same in a post office or letter box in a sealed
wrapper with first-class postage prepaid thereon and addressed to the
person entitled thereto at his address, as the same appears upon the
books of the Company, or by electronically communicating the notice to
such person at such address or by transmitting the same by way of a
guaranteed overnight courier service; and such notice shall be deemed to
be given at the time it is mailed, electronically communicated or so
transmitted.
Section 4. Contracts, Checks, Drafts: The Board of Directors,
except as may otherwise be required by law, may authorize any Officer or
Officers, Agent or Agents, in the name of and on behalf of the Company
to enter into any contract or execute or deliver any instrument. All
checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Company, shall be
signed by such Officer or Officers, Agent or Agents of the Company, and
in such manner as shall be designated from time to time by resolution of
the Board of Directors.
Section 5. Deposits: All funds of the Company shall be deposited
from time to time to the credit of the Company in such bank or banks,
trust companies or other depositories as the Board of Directors may
select, and, for the purpose of such deposit, checks, drafts, warrants
and other orders for the payment of money which are payable to the order
of the Company, may be endorsed for deposit, assigned and delivered by
any Officer of the Company, or by such Agents of the Company as the
Board of Directors, the Chairman of the Board, if any, the Chief
Executive Officer, if any, or the President may authorize for that
purpose.
Section 6. Voting Stock of Other Companies: Except as otherwise
ordered by the Board of Directors or the Executive Committee, the
Chairman of the Board, if any, the Chief Executive Officer, if any, or
the President shall have full power and authority on behalf of the
Company to attend and to act and to vote at any meeting of the
Shareholders of any corporation of which the Company is a shareholder
and to execute a proxy to any other person to represent the Company at
any such meeting, and at any such meeting the Chairman of the Board, if
any, the Chief Executive Officer, if any, or the President or the holder
of any such proxy, as the case may be, shall possess and may exercise
any and all rights and powers incident to ownership of such stock and
which, as owner thereof, the Company might have possessed and exercised
if present. The Board of Directors or the Executive Committee may from
time to time confer like powers upon any other person or persons.
ARTICLE VIII<PAGE>
AMENDMENTS
Except as set forth in the final sentence of this ARTICLE VIII,
these By-Laws may be altered, amended or repealed by the affirmative
vote of a majority of the entire Board of Directors then in office.
These By-Laws may also be altered, amended or repealed by the
Shareholders, but only by an affirmative vote of the holders of at least
75 percent of all the then-outstanding shares of the voting stock,
voting together as a single class. Any By-Law may provide that it may
only be altered, amended or repealed by the affirmative vote of the
holders of at least 75 percent of all the then-outstanding shares of the
voting stock, voting together as a single class, in which event such
By-Law may only be altered, amended or repealed by such vote.<PAGE>
EXHIBIT 10(xxiii)
Form of Termination of Employment and
Change in Control Agreement #1
December 20, 1995
Dear:
NUI Corporation, a New Jersey corporation (the "Employer")
considers the establishment and maintenance of a sound and vital
management team essential to protecting and enhancing its best interests
and those of its shareholders. In this connection, the Employer
recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control of the Employer exists and that
such possibility and the uncertainty and questions which it may raise
among management personnel as to the effect of such change in control on
the Employer, may result in the departure or distraction of such
personnel to the detriment of the Employer and the Employer's
shareholders. Accordingly, the Board of Directors of the Employer (the
"Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of the
key members of the Employer's management, including yourself, to their
assigned duties without the distraction arising from any actual or
threatened change in control.
The Employer must, of course, remain free to effect changes in
management and terminate employment. However, in order to induce you to
remain in the Employer's employ, this letter agreement ("Agreement")
sets forth the severance benefits which the Employer agrees will be
provided to you in the event your employment is terminated under the
circumstances described herein subsequent to or in connection with a
"change in control" (as defined in Section 2).
1. TERM. This Agreement shall commence on the date hereof and
shall continue in effect through December 31,1998; provided, however,
that commencing on January 1, 1999 and every three years thereafter, the
term of this Agreement shall automatically be extended for an additional
three-year term unless, not later than September 30 preceding the
expiration of the original or any extended term hereof, the Board has
given you written notice that the Employer does not wish to extend this
Agreement; and provided, further, that if a change in control of the
Employer shall have occurred during the original or extended term of
this Agreement, this Agreement shall continue in effect for a period of
36 months beyond the month in which such change in control occurred.
Notwithstanding the foregoing, this Agreement shall terminate
immediately upon the termination of your employment prior to a change in
control.<PAGE>
2. CHANGE IN CONTROL. For purposes of this Agreement, a "change in
control" shall mean:
(a) a change in control of the Employer of a nature that would
be reported as a change in control in response to Item l(a) of a Current
Report on Form 8-K pursuant to the Securities Exchange Act of 1934
("Exchange Act"), as in effect on the date hereof and as the same may be
amended from time to time (or if Item l(a) is no longer in effect, any
regulations issued by the Securities and Exchange Commission which serve
similar purposes); or
(b) any person (as the term "person" is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than a trustee or other
fiduciary or custodian holding securities under a qualified or
nonqualified employee benefit plan of the Employer (or any affiliate),
is or becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of 25% or more of
the capital stock entitled to vote in the election of directors ("Voting
Stock ) of the Employer; or
(c) during any period of three consecutive years, individuals
who constitute the Board of Directors of the Employer at the beginning
of any such period (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
person becoming a director of the Employer after the beginning of such
period whose election or nomination was approved by a vote of at least
three-fourths of the continuing directors comprising the Incumbent Board
shall, for the purposes hereof, be considered as though such person were
a member of the Incumbent Board; or
(d) approval by the shareholders of the Employer of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 50% of the
then outstanding shares of Voting Stock of the corporation resulting
from such reorganization, merger or consolidation is then beneficially
owned, directly or indirectly, by the individuals and entities who were
the beneficial owners of the outstanding Employer Voting Stock
immediately prior to such reorganization, merger or consolidation; (ii)
no Person (excluding the Employer (or any affiliate), any trustee or
other fiduciary or custodian holding securities under any qualified or
nonqualified employee benefit plan of the Employer (or any affiliate) or
such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly,
20% or more of the outstanding Employer Voting Stock) beneficially owns,
directly or indirectly, 20% or more of the then outstanding shares of
Voting Stock of the corporation resulting from such reorganization,
merger or consolidation; and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
(e) approval by the shareholders of the Employer of the sale
or other disposition of all or substantially all of the assets of the
Employer other than to a corporation with respect to which, following
such sale or other disposition (i) more than 50% of the then outstanding
Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial
owners, of the outstanding Employer Voting Stock immediately prior to<PAGE>
such sale or other disposition; (ii) no Person (excluding the Employer
(or any affiliate), any trustee or other fiduciary or custodian holding
securities under any qualified or nonqualified employee benefit plan of
the Employer (or any affiliate) or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the shares of the
outstanding Employer Voting Stock) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of Voting Stock
of such corporation; and (iii) at least a majority of the members of the
board of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of assets of the
Employer; or
(f) execution by the Employer of a definitive agreement
providing for a transaction or series of transactions which would, when
consummated, result in a change in control as defined in subsections (a)
or (b) above or which would be the subject of the shareholder approval
referred to in subsections (d) or (e) above.
In the event that a change in control occurs by virtue of the
execution of a definitive agreement as provided in subsection (f) above
and such agreement is subsequently terminated prior to consummation of
the transaction or transactions which would constitute a change in
control under subsections (a) or (b) or prior to the shareholder
approval contemplated in subsections (d) and (e), then a change in
control for purposes of this subsection (f) shall cease as of the date
such definitive agreement is terminated. In the event that your
employment is terminated by the Employer, other than for Disability or
Cause (as described in Section 3), or by you for Good Reason (as
described in Section 3) between the time of a change in control under
this subsection (f) and the termination of the definitive agreement, you
shall be entitled to benefits under this Agreement to the extent
provided hereunder. In addition, in the event that a change in control
occurs under both this subsection (f) and any other subsection of this
Section 2, then all references in this Agreement to a change in control
shall be deemed to be references to the latest of such change in control
events to occur so that you shall be eligible to receive benefits and
payments under this Agreement upon the termination of your employment
occurring during the period commencing upon the execution of such
definitive agreement and ending 36 months after the consummation of the
transactions contemplated in such agreement.
Notwithstanding anything in the foregoing to the contrary, no
change in control of the Employer shall be deemed to have occurred with
respect to you for purposes of this Agreement by virtue of any
transaction which results in you, or any group, association or other
organization of persons related to, including, or acting in concert with
you, acquiring, directly or indirectly, control of the Employer.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 2 hereof constituting a change in control shall
have occurred during the term of this Agreement, and your employment is
terminated within 36 months after the change in control (as determined
in accordance with Section 2(f)) ( the Protection Period ) (i) by the
Employer other than for Disability pursuant to subsection (a)(i) below
or Cause pursuant to subsection (b) below, or (ii) by you for Good
Reason pursuant to subsection (c) below, then you shall be entitled to
the payments and benefits provided for in Section 4 of this Agreement.<PAGE>
(a) Disability; Retirement.
(i) If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from your duties with the
Employer on a full-time basis for 180 consecutive days after the
commencement of such incapacity and within 30 days after written Notice
of Termination is given you shall not have returned to the full-time
performance of your duties, the Employer may terminate your employment
for "Disability" without liability hereunder.
(ii) For purposes of this Agreement, termination of your
employment based on "Retirement" shall mean termination in accordance
with the Employer's retirement policy, including early retirement,
generally applicable to its employees or in accordance with any
retirement arrangement established with your consent with respect to
you.
(b) Cause. The Employer may terminate your employment for
Cause without liability hereunder. For purposes of this Agreement,
termination by the Employer of your employment for "Cause" shall mean
termination upon (i) willful and continued failure by you to
substantially perform your duties with the Employer (other than any such
failure resulting from your incapacity due to physical or mental
illness, or any such actual or anticipated failure after the issuance of
a Notice of Termination by you for Good Reason, as such terms are
defined in subsections (d) and (c) below, respectively) after a written
demand for substantial performance is delivered to you by the Board,
which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (ii) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Employer, monetarily or otherwise, including, but not
limited to, personal dishonesty, incompetence, misconduct, breach of
fiduciary duty involving personal profit, or violation of any law, rule
or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or (iii) your conviction of any crime
(whether or not involving the Employer or any affiliate) involving moral
turpitude which subjects, or if generally known would subject, the
Employer or any affiliate to public ridicule or embarrassment. For
purposes of this subsection, no act or failure to act on your part shall
be considered "willful" unless done or omitted to be done by you not in
good faith and without reasonable belief that your action or omission
was in the best interest of the Employer. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you a certified copy
of a resolution duly adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board at a meeting of the
Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, you were guilty of conduct set
forth above and specifying the particulars thereof in detail.
(c) Good Reason. You may terminate your employment for
Good Reason and become entitled to the payments and benefits provided
hereunder. For purposes of this Agreement, "Good Reason" shall mean the
occurrence of one or more of the following subsequent to a change in
control:
(i) the assignment to you of any duties substantively
inconsistent with your positions, duties, responsibilities and status<PAGE>
immediately prior to the change in control, or a change in your
reporting responsibilities, titles or offices as in effect immediately
prior to the change in control, or any removal of you from or any
failure to reelect you to any of such positions, except in connection
with the termination of your employment for Cause, Disability,
Retirement, by you other than for Good Reason or as a result of your
death; or
(ii) (x) a reduction in your base salary in effect
immediately prior to the change in control or such higher base salary as
may thereafter be in effect, or (y) the failure by the Employer to
increase your base salary annually after a change in control by an
amount which at least equals, on a percentage basis, the lesser of (A)
the greatest percentage increase in base salary for such year for any
officer of the Employer or (B) the mean average percentage increase in
base salary for all officers of the Employer during the 24-month period
preceding the change in control, provided that, any such failure to
increase your base salary shall not be deemed to be Good Reason if the
Employer is prohibited from granting such increase pursuant to any
applicable law or governmental or regulatory rule, regulation or order,
or any judgment, order or decree of a court of competent jurisdiction;
or
(iii) a failure by the Employer to waive any and all
exercise, vesting, transfer and other restrictions that may exist with
respect to stock options, restricted stock or other securities which are
the subject of awards or grants made to you under the Employer's stock
option or restricted stock plan, or any other plan in effect in which
you participated immediately preceding the change in control; or
(iv) a failure by the Employer to continue its executive
incentive compensation program or any other executive or other incentive
compensation program or plan, as the same may be amended or modified
from time to time, but substantially in the form in effect immediately
prior to the change in control ("Program"), or a failure by the Employer
to continue you as a participant in the Program on at least the basis on
which you participated immediately preceding the change in control, or
to pay you any installment of a previous award or of deferred
compensation, if any, under the Program or any deferred compensation
arrangement in which you participated immediately preceding the change
in control, provided that, any such failure to continue the Program or
your participation therein shall not be deemed to be Good Reason if the
Employer is prohibited from continuing the Progam or your participation
pursuant to any applicable law or governmental or regulatory rule,
regulation or order, or any judgment, order or decree of a court of
competent jurisdiction; or
(v) the Employer requiring you to be based anywhere
which is located more than 50 road miles from the office at which you
were based immediately preceding the change in control ("Office"),
except for required travel on business to an extent substantially
consistent with the business travel obligations you experienced
immediately preceding the change in control or, in the event you consent
to any relocation of your Office, the failure by the Employer to pay (or
reimburse you for) all reasonable moving expenses incurred by you
relating to a change of your principal residence in connection with such
relocation and to indemnify you against any loss (calculated by
subtracting the sales price of such residence from the higher of (x)
your aggregate investment in such residence, or (y) the fair market
value of such residence as determined by an outside appraiser designated<PAGE>
by you and reasonably satisfactory to the Employer), realized in the
sale of your principal residence in connection with any such change of
residence; or
(vi) the failure by the Employer to continue in effect
any benefit or compensation plan or arrangement in which you were
participating immediately preceding the change in control, the taking of
any action by the Employer not required by law which would adversely
affect your participation in or materially reduce your benefits under
any of such plans or deprive you of any material fringe benefit enjoyed
by you immediately prior to the change in control; or the failure by the
Employer to provide you with the number of paid vacation days, holidays
and personal days to which you are then entitled in accordance with the
Employer's normal leave policy in effect immediately preceding the
change in control; or
(vii) in the event that you are a member of the Board
immediately prior to the change in control, and you are not reelected to
the Board or you are required to resign from the Board; or
(viii) any purported termination of your employment by
the Employer which is not effected pursuant to a Notice of Termination
satisfying the requirements of subsection (d) below (and, if applicable,
subsections (a) and (b) above) and, for the purposes of this Agreement,
no such purported termination shall be effective; or the delivery to you
of a Notice of Termination informing you of the termination of your
employment other than for Cause or Disability; or
(ix) the failure of the Employer to obtain the assumption
of this Agreement, and the Employer s obligations hereunder, from any
successor as contemplated in Section 5 hereof.
(d) Notice of Termination. The termination of your employment
by the Employer for any reason or by you for Good Reason shall be
communicated by a written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination
provisions in this Agreement relied upon and shall set forth, in
reasonable detail, the facts and circumstances claimed to provide a
basis for termination of your employment under the provisions so
indicated. In the event that the Employer terminates your employment
for Cause, the Notice of Termination shall include a copy of the Board
resolution required under Section 3(b). For the purposes of this
Agreement, no purported termination shall be effective without such
Notice of Termination.
(e) Date of Termination. "Date of Termination" shall mean (i)
if your employment is terminated because of your death, the date of your
death; (ii) if your employment is terminated for Disability, 30 days
after Notice of Termination is given (provided that you shall not have
returned to the performance of your duties on a full-time basis during
such 30-day period); (iii) if your employment is terminated for Cause,
the date set forth in the Notice of Termination; (iv) if you terminate
your employment for Retirement, the effective date of your Retirement;
(v) if you terminate your employment for Good Reason, the date specified
in the Notice of Termination which in no event shall be later than 90
days following the delivery of the Notice of Termination to the
Employer, except as otherwise provided in Section 5(a), and (vi) if your
employment is terminated by Employer other than for Cause or Disability,
the date set forth in the Notice of Termination, which in no event shall<PAGE>
be earlier than 90 days following the delivery of the Notice of
Termination to you. If your Date of Termination is on a date which is
beyond the period during which you are entitled to benefits under this
Agreement but the Notice of Termination is given on a date which falls
within such period, then your entitlement to benefits shall be
determined as if your Date of Termination fell within such period.
(f) In the event that Good Reason exists for you to terminate
your employment and you provide notice to the Employer that such Good
Reason exists, either by Notice of Termination or otherwise, the
Employer shall have a one-time right to take such action as is necessary
to eliminate the basis for such Good Reason within ten days of receipt
of the notice provided by you.
(g) Continued Employment; Nonwaiver. Your continued
employment during the term of this Agreement and subsequent to an event
constituting Good Reason hereunder shall not constitute consent to such
event or a waiver of any rights you may have under this Agreement; and
your consent to a change in your employment terms conditions or status
that would otherwise constitute a Good Reason shall not affect your
right to subsequently terminate your employment for Good Reason and
obtain the payments and benefits provided for herein.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A
CHANGE IN CONTROL.
(a) During any period following a change in control during
which you fail to perform your duties with the Employer as a result of
incapacity due to physical or mental illness, you shall continue to
receive your base salary at the rate then in effect and any installments
of deferred portions of awards under the Program or otherwise paid
during such period until your employment is terminated pursuant to
Section 3(a)(i) hereof. Thereafter, your benefits shall be determined
in accordance with the Employer's Long-Term Disability Plan, or any
substitute plan then in effect.
(b) If, following a change in control, you terminate your
employment other than for Good Reason, death or Retirement, or the
Employer terminates your employment for Cause, the Employer shall pay
you your base salary at the rate then in effect through the Date of
Termination plus all other amounts to which you are entitled under the
Program or any other plan of the Employer at the time such payments are
due and the Employer shall have no further obligations to you, subject
to your entitlement to benefits under any qualified or non-qualified
retirement plans or any other qualified plans of the employer in which
you had a vested interest.
(c) If, following a change in control, you terminate your
employment by reason of death or Retirement, you (or your estate in the
event of death) shall be entitled to receive your base salary at the
rate then in effect until the Date of Termination plus all other amounts
to which you are entitled under any compensation plan of the Employer at
the time such payments are due. Thereafter, your benefits shall be
determined in accordance with the provisions of the benefit plans and
arrangements in which you participated on the date immediately preceding
the Date of Termination.
(d) If the Employer terminates your employment other than for
Disability or Cause or you terminate your employment for Good Reason<PAGE>
during the Protection Period, then the Employer shall continue to pay to
you your base salary at the rate then in effect through the Date of
Termination. In addition, the Employer shall pay to you the following
amounts:
(i) An amount equal to the amount, if any, of the
deferred portion of any awards which have been awarded to you pursuant
to the Program or otherwise but which have not yet been paid to you and
the amount of deferred compensation, if any, under the Program or
otherwise which has accrued to your account; and
(ii) In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, an amount equal to the
product of (x) the sum of your annual base salary in effect as of the
Date of Termination (without giving effect to any reduction therein
after the change in control) plus an amount equal in value to the
highest incentive compensation (determined without regard to vesting
restrictions) awarded with respect to any fiscal year to you during the
three fiscal years then most recently ended, multiplied by (y) the
number three; and
(iii) Notwithstanding any provision of any annual or
long-term incentive compensation plan or arrangement of the Employer, an
amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you for a fiscal year or other measuring period
preceding the Date of Termination but has not yet been paid and (y) a
pro rata portion to the Date of Termination of the aggregate value of
all contingent incentive compensation awards to you for all uncompleted
periods under such plans or arrangements; and
(iv) In lieu of shares of stock of the Employer issuable
upon the exercise of any employee stock options ("Options"), if any,
held by you, which Options shall be canceled upon the making of the
payment referred to herein, an amount in cash equal to the aggregate
spread between the exercise prices of all Options held by you and the
higher of (x) the highest bid price of the stock subject to the Options
during the 12-month period immediately preceding the Date of
Termination, or (y) the highest price per share actually paid in
connection with any change in control of the Employer during the term
hereof including, without limitation, prices paid in any subsequent
merger or combination with any entity that acquires control.
(e) The amounts set forth in (d)(i) through (iv) of this
Section 4 shall be paid to you, at your election, either in a lump sum
within ten days of your Date of Termination or in substantially equal
installments over a 24-month period commencing within ten days of your
Date of Termination. Should you elect to receive payment of these
amounts over a 24-month period, then the election must be made by you at
least 90 days prior to the change in control. In addition, if you elect
installment payments, then the Employer shall also pay to you interest
monthly on the outstanding balance of Employer s obligation to you.
Interest shall be computed based upon the then current rate for three-
month Certificates of Deposit, as published in The Wall Street Journal.
(f) In addition to the amounts set forth above, in the event
that within one year after your Date of Termination you move your
principal residence more than 50 miles from its location immediately
preceding your Date of Termination, the Employer shall pay to you an
amount equal to all of your relocation expenses, including but not
limited to brokers fees and commissions, mortgage points, routine<PAGE>
expenses associated with the purchase and sale of your residence, travel
and moving expenses and any loss (as determined in accordance with
Section 3(c)(v)) incurred on the sale of your principal residence,
provided that, if your move is in connection with your acceptance of new
employment, the Employer s obligation to pay your relocation expenses
under this subsection (f) shall be reduced to the extent that you are
eligible to be reimbursed for such expenses under the normal practice of
your new employer (whether or not you actually accept such
reimbursement). Any payments to be made by the Employer in accordance
with this subsection (f) shall be made on a regular and current basis
upon presentation of documentation in support of your expenses.
(g) If you become entitled to the payments described in
Section 4(d) above, to the extent that your rights to any shares of
stock of the Employer granted to you under the Employer's restricted
stock plan, or any other plan in which you participated immediately
preceding the change in control are not fully vested and nonforfeitable,
your rights thereto shall automatically become fully vested and
nonforfeitable as of the Date of Termination. In addition, subject to
Section 4(h) below, the Employer shall maintain in full force and
effect, for your continued benefit for two years after the Date of
Termination, all employee welfare benefit plans, programs or
arrangements in which you were entitled to participate on the date
immediately preceding the date Notice of Termination was given,
including, without limitation, life, disability, accident and health
insurance plans or policies, ( Welfare Benefits ) provided your
continued participation is possible under the general terms and
provisions of such plans and programs. In the event that your
participation in any such plan or program is prohibited by operation of
law or by the terms of such plans or programs as in effect immediately
preceding the date Notice of Termination is given, the Employer shall
arrange to provide you with benefits substantially similar to those
which you would have been entitled to receive under such plans and
programs. Except for any insurance policy used by the Employer to fund
its excess benefit and deferred compensation plans under any grantor
trust arrangement, at the end of the period of coverage, you shall have
the option to have assigned to you at no cost and with no apportionment
of prepaid premiums, any assignable insurance policy owned by the
Employer and relating specifically to you. In addition, the Employer
will continue to fund any executive life insurance policy, death benefit
contract or agreement in effect on the date immediately preceding the
date Notice of Termination was given through your Normal Retirement Age.
In the alternative, the Employer shall make a lump sum payment of an
amount necessary to continue these premiums through your Normal
Retirement Age. "Normal Retirement Age" as used in this Agreement shall
have the same meaning as that term is used in any retirement plan in
which you participated on the date immediately preceding the date of the
change in control.
(h) You shall not be required to mitigate the amount of any
payment or benefit provided for in this Section 4 by seeking other
employment or otherwise. The amount of any payment provided for in
this Section 4 shall not be reduced by any compensation earned by you or
any retirement benefits provided to you as the result of employment by
another employer after the Date of Termination or otherwise.
Notwithstanding the foregoing, if as a result of employment by another
employer you become eligible to participate in any plan, program or
arrangement that would provide you with substantially the same type of
coverage as any of the Welfare Benefits being provided to you by the
Employer in accordance with Section 4(g), the Employer s obligation to<PAGE>
provide coverage of the same type shall be correspondingly reduced
(whether or not you actually accept coverage under your new employer s
plan), subject to any rights that you may have to continuation of your
medical coverage at your own expense under COBRA or any similar law.
(i) Nothing in this Agreement shall affect your right to
receive all benefits and amounts to which you are entitled under any
other compensation or employee benefit plan or arrangement, whether or
not qualified, in which you participated on the date immediately
preceding the date on which the Notice of Termination is given, in
accordance with the terms of such plans or arrangements, provided that
you shall not be entitled to any severance or termination pay or
allowance or any similar amount under any other plan or arrangement of
the Employer; and
(j) In the event that it shall be determined that any payment
or benefit received under this Agreement and/or any other plan,
arrangement or agreement (a Payment or, collectively, the Payments )
would be an excess parachute payment (within the meaning of Section
280G(b)(1) of the Internal Revenue Code of 1986 (the Code )) subject to
the excise tax imposed by Section 4999 of the Code (the Excise Tax ),
the present value of such Payments shall be reduced to the Reduced
Amount . The Reduced Amount shall be an amount expressed in present
value that maximizes the aggregate present value of the Payments without
causing any Payment to be an excess parachute payment subject to the
Excise Tax. For these purposes, the present value of any non-cash
benefit or deferred payment or benefit shall be determined in accordance
with Sections 280G(d)(3) and (4) of the Code. The determination whether
any Payment would be an excess parachute payment and the calculation of
the Reduced Amount shall be made by a law firm or accounting firm
selected by the Employer from among those regularly consulted by it
regarding Federal income tax matters within the 12-month period
preceding the change in control, and reasonably acceptable to you ( Tax
Counsel ). Tax Counsel s opinion shall be delivered to you within five
days after your Date of Termination, and shall contain detailed
calculations supporting the determination of the Reduced Amount or of
Tax Counsel s determination that no portion of the Payments would be
subject to the Excise Tax. Upon your receipt of Tax Counsel s opinion
setting forth a Reduced Amount, you shall determine which and how much
of the Payments shall be eliminated or reduced, provided that, if you do
not make such determination within ten days of your receipt of such
opinion, the Employer shall determine which and how much of the Payments
shall be eliminated or reduced and shall promptly give you written
notice thereof. Within five days after you give notice or upon the
expiration of ten days without notice, the Employer shall pay to or
distribute to or for your benefit such amounts as are then due to you
under this Agreement and shall promptly pay to or distribute for your
benefit in the future such amounts as become due to you under this
Agreement.
As a result of the uncertainty of the application of Section 280G
of the Code at the time of the initial determination hereunder, it is
possible that Payments will have been made by the Employer which should
not have been made ( Overpayment ) or that additional payments which
will not have been made by the Employer should have been made
( Underpayment ), in each case, consistent with the calculations
required to be made hereunder. In the event it is determined that an
Overpayment has been made, you shall promptly repay any such Overpayment
to the Employer together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code, provided that, no amount
shall be payable by you to the Employer (of if paid by you shall be<PAGE>
returned to you) if and to the extent such payment would not reduce the
amount that is subject to the Excise Tax. In the event it is determined
that an Underpayment has been made, any such Underpayment shall be
promptly paid by the Employer to or for your benefit together with
interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.
(k) The Employer shall also pay all fees and expenses
(including legal fees and expenses) incurred by you in contesting or
disputing any termination of your employment or in seeking to obtain or
enforce any right or benefit provided by this Agreement or in connection
with any tax audit or proceeding to the extent attributable to the
application of the Excise Tax to any payment or benefit hereunder,
provided that, the Employer shall not have any obligation to pay any
legal expenses incurred by you in contesting or disputing your
termination of employment or seeking to obtain or enforce any right or
benefit provided by this Agreement, and you shall be obligated to repay
the Employer for any legal fees advanced to you by the Employer (and
interest thereon) to the extent that it is determined by the arbitrator
referred to in Section 10 (or, if applicable, a court of competent
jurisdiction) that your employment was terminated for Cause, within the
meaning of Section 3(b). Any payments to be made by the Employer
pursuant to this subsection (k) shall be made to you on a regular and
current basis upon your presentation to the Employer of documentation in
support thereof.
5. SUCCESSORS, BINDING AGREEMENT.
(a) The Employer will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer to
expressly, absolutely and unconditionally assume and agree to perform
this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken
place. Failure of the Employer to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
whether or not such succession is a change in control described in
Section 2, and shall entitle you to terminate your employment for Good
Reason and become entitled to the payments and benefits provided
hereunder, provided that, if such succession is not a change in control,
the Date of Termination specified in your Notice of Termination shall
not be later than 90 days after the date on which such succession
becomes effective. As used in this Agreement, "Employer" shall mean the
Employer as hereinbefore defined and any successor to its business
and/or assets or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amounts would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee, or other designee or, if there
be no such designee, to your estate.
6. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered by United
States registered mail, return receipt requested, postage prepaid or a<PAGE>
nationally recognized overnight delivery service, addressed in either
case to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Employer shall be directed
to the attention of the Corporate Secretary of NUI Corporation, or to
such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be
authorized by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of or compliance with any condition
or provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to
the subject matter hereof have been made by either party which are not
set forth expressly in this Agreement. It is intended that the benefits
payable hereunder shall be considered paid to you for your past services
to the Employer and continuing services from the date hereof. Any
payment provided for hereunder shall be paid net of any applicable
income tax withholding required under Federal, State and local law. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the substantive law of the State of New Jersey.
8. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full force and
effect.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in the State of New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Notwithstanding the
pendency of any such dispute or controversy, the Employer will continue
to pay you your full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, base salary and
installments under the Program or otherwise) and, to the extent
permitted by law, continue you as a participant in all compensation,
benefit and insurance plans in which you were participating when the
notice giving rise to the dispute was given, until the dispute is
finally resolved, either by mutual written agreement of the parties, by
a final and binding arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction, the time for appeal
therefrom having expired and no appeal having been perfected. For the
purposes of this Agreement, if a Notice of Termination is given in
accordance with Section 3(d) hereof during the Protection Period, the
Date of Termination shall be treated as having occurred during such
period, notwithstanding the resolution of any dispute after the
conclusion of such period. Amounts paid to you under this Section
during the pendency of any such dispute or controversy are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement, provided
that, if it is determined by the arbitrator (or, if applicable, a court
of competent jurisdiction) that your employment was terminated for<PAGE>
Cause, as described in Section 3(b), amounts paid to you under this
Section that are attributable to any period after your Date of
Termination shall be offset against and reduce payments otherwise to be
made to you under this Agreement, and to the extent that the amounts you
receive for such period exceed the payments otherwise to be made to you
under this Agreement you shall be obligated to repay such excess to the
Employer (with interest thereon). Judgment may be entered on the
arbitrator's award in any court of competent jurisdiction; provided,
however, that you shall be entitled to seek specific performance of your
right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.
11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be
deemed to be a contract of employment, and the Employer retains the
right to terminate your employment at any time, for any reason or for no
reason.
12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any
prior agreement between you and the Employer concerning the subject
matter hereof.
If the foregoing Agreement correctly sets forth our agreement on
the subject matter hereof, kindly sign and return to the Employer the
enclosed copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
NUI Corporation
By_____________________
John Kean Jr., President
AGREED TO THIS_____DAY
OF ________________,1995
________________________<PAGE>
DISTRIBUTION ELECTION
I hereby revoke all prior distribution elections under this
Agreement. All amounts payable to me in accordance with Section 4(d) of
this Agreement shall be payable as follows: (initial only one item):
_______in a single lump sum payment;
_______in substantially equal monthly installments over 24 months.
Dated:
________________________
Signature<PAGE>
FORM OF TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL AGREEMENT #2
November 28, 1995
Dear:
NUI Corporation, a New Jersey corporation (the "Employer")
considers the establishment and maintenance of a sound and vital
management team essential to protecting and enhancing its best interests
and those of its shareholders. In this connection, the Employer
recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control of the Employer exists and that
such possibility and the uncertainty and questions which it may raise
among management personnel as to the effect of such change in control on
the Employer, may result in the departure or distraction of such
personnel to the detriment of the Employer and the Employer's
shareholders. Accordingly, the Board of Directors of the Employer (the
"Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of the
key members of the Employer's management, including yourself, to their
assigned duties without the distraction arising from any actual or
threatened change in control.
The Employer must, of course, remain free to effect changes in
management and terminate employment. However, in order to induce you to
remain in the Employer's employ, this letter agreement ("Agreement")
sets forth the severance benefits which the Employer agrees will be
provided to you in the event your employment is terminated under the
circumstances described herein subsequent to or in connection with a
"change in control" (as defined in Section 2).
1. TERM. This Agreement shall commence on the date hereof and
shall continue in effect through December 31,1998; provided, however,
that commencing on January 1, 1999 and every three years thereafter, the
term of this Agreement shall automatically be extended for an additional
three-year term unless, not later than September 30 preceding the
expiration of the original or any extended term hereof, the Board has
given you written notice that the Employer does not wish to extend this
Agreement; and provided, further, that if a change in control of the
Employer shall have occurred during the original or extended term of
this Agreement, this Agreement shall continue in effect for a period of
36 months beyond the month in which such change in control occurred.
Notwithstanding the foregoing, this Agreement shall terminate
immediately upon the termination of your employment prior to a change in
control.
2. CHANGE IN CONTROL. For purposes of this Agreement, a "change
in control" shall mean:
(a) a change in control of the Employer of a nature that would
be reported as a change in control in response to Item l(a) of a Current
Report on Form 8-K pursuant to the Securities Exchange Act of 1934
("Exchange Act"), as in effect on the date hereof and as the same may be
amended from time to time (or if Item l(a) is no longer in effect, any
regulations issued by the Securities and Exchange Commission which serve
similar purposes); or<PAGE>
(b) any person (as the term "person" is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than a trustee or other
fiduciary or custodian holding securities under a qualified or
nonqualified employee benefit plan of the Employer (or any affiliate),
is or becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of 25% or more of
the capital stock entitled to vote in the election of directors ("Voting
Stock ) of the Employer; or
(c) during any period of three consecutive years, individuals
who constitute the Board of Directors of the Employer at the beginning
of any such period (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
person becoming a director of the Employer after the beginning of such
period whose election or nomination was approved by a vote of at least
three-fourths of the continuing directors comprising the Incumbent Board
shall, for the purposes hereof, be considered as though such person were
a member of the Incumbent Board; or
(d) approval by the shareholders of the Employer of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 50% of the
then outstanding shares of Voting Stock of the corporation resulting
from such reorganization, merger or consolidation is then beneficially
owned, directly or indirectly, by the individuals and entities who were
the beneficial owners of the outstanding Employer Voting Stock
immediately prior to such reorganization, merger or consolidation; (ii)
no Person (excluding the Employer (or any affiliate), any trustee or
other fiduciary or custodian holding securities under any qualified or
nonqualified employee benefit plan of the Employer (or any affiliate) or
such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly,
20% or more of the outstanding Employer Voting Stock) beneficially owns,
directly or indirectly, 20% or more of the then outstanding shares of
Voting Stock of the corporation resulting from such reorganization,
merger or consolidation; and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
(e) approval by the shareholders of the Employer of the sale
or other disposition of all or substantially all of the assets of the
Employer other than to a corporation with respect to which, following
such sale or other disposition (i) more than 50% of the then outstanding
Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial
owners, of the outstanding Employer Voting Stock immediately prior to
such sale or other disposition; (ii) no Person (excluding the Employer
(or any affiliate), any trustee or other fiduciary or custodian holding
securities under any qualified or nonqualified employee benefit plan of
the Employer (or any affiliate) or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the shares of the
outstanding Employer Voting Stock) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of Voting Stock
of such corporation; and (iii) at least a majority of the members of the
board of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of<PAGE>
the Board providing for such sale or other disposition of assets of the
Employer; or
(f) execution by the Employer of a definitive agreement
providing for a transaction or series of transactions which would, when
consummated, result in a change in control as defined in subsections (a)
or (b) above or which would be the subject of the shareholder approval
referred to in subsections (d) or (e) above.
In the event that a change in control occurs by virtue of the
execution of a definitive agreement as provided in subsection (f) above
and such agreement is subsequently terminated prior to consummation of
the transaction or transactions which would constitute a change in
control under subsections (a) or (b) or prior to the shareholder
approval contemplated in subsections (d) and (e), then a change in
control for purposes of this subsection (f) shall cease as of the date
such definitive agreement is terminated. In the event that your
employment is terminated by the Employer, other than for Disability or
Cause (as described in Section 3), or by you for Good Reason (as
described in Section 3) between the time of a change in control under
this subsection (f) and the termination of the definitive agreement, you
shall be entitled to benefits under this Agreement to the extent
provided hereunder. In addition, in the event that a change in control
occurs under both this subsection (f) and any other subsection of this
Section 2, then all references in this Agreement to a change in control
shall be deemed to be references to the latest of such change in control
events to occur so that you shall be eligible to receive benefits and
payments under this Agreement upon the termination of your employment
occurring during the period commencing upon the execution of such
definitive agreement and ending 36 months after the consummation of the
transactions contemplated in such agreement.
Notwithstanding anything in the foregoing to the contrary, no
change in control of the Employer shall be deemed to have occurred with
respect to you for purposes of this Agreement by virtue of any
transaction which results in you, or any group, association or other
organization of persons related to, including, or acting in concert with
you, acquiring, directly or indirectly, control of the Employer.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 2 hereof constituting a change in control shall
have occurred during the term of this Agreement, and your employment is
terminated within 36 months after the change in control (as determined
in accordance with Section 2(f)) ( the Protection Period ) (i) by the
Employer other than for Disability pursuant to subsection (a)(i) below
or Cause pursuant to subsection (b) below, or (ii) by you for Good
Reason pursuant to subsection (c) below, then you shall be entitled to
the payments and benefits provided for in Section 4 of this Agreement.
(a) Disability; Retirement.
(i) If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from your duties with the
Employer on a full-time basis for 180 consecutive days after the
commencement of such incapacity and within 30 days after written Notice
of Termination is given you shall not have returned to the full-time
performance of your duties, the Employer may terminate your employment
for "Disability" without liability hereunder.<PAGE>
(ii) For purposes of this Agreement, termination of your
employment based on "Retirement" shall mean termination in accordance
with the Employer's retirement policy, including early retirement,
generally applicable to its employees or in accordance with any
retirement arrangement established with your consent with respect to
you.
(b) Cause. The Employer may terminate your employment for
Cause without liability hereunder. For purposes of this Agreement,
termination by the Employer of your employment for "Cause" shall mean
termination upon (i) willful and continued failure by you to
substantially perform your duties with the Employer (other than any such
failure resulting from your incapacity due to physical or mental
illness, or any such actual or anticipated failure after the issuance of
a Notice of Termination by you for Good Reason, as such terms are
defined in subsections (d) and (c) below, respectively) after a written
demand for substantial performance is delivered to you by the Board,
which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (ii) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Employer, monetarily or otherwise, including, but not
limited to, personal dishonesty, incompetence, misconduct, breach of
fiduciary duty involving personal profit, or violation of any law, rule
or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or (iii) your conviction of any crime
(whether or not involving the Employer or any affiliate) involving moral
turpitude which subjects, or if generally known would subject, the
Employer or any affiliate to public ridicule or embarrassment. For
purposes of this subsection, no act or failure to act on your part shall
be considered "willful" unless done or omitted to be done by you not in
good faith and without reasonable belief that your action or omission
was in the best interest of the Employer. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you a certified copy
of a resolution duly adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board at a meeting of the
Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, you were guilty of conduct set
forth above and specifying the particulars thereof in detail.
(c) Good Reason. You may terminate your employment for
Good Reason and become entitled to the payments and benefits provided
hereunder. For purposes of this Agreement, "Good Reason" shall mean the
occurrence of one or more of the following subsequent to a change in
control:
(i) the assignment to you of any duties substantively
inconsistent with your positions, duties, responsibilities and status
immediately prior to the change in control, or a change in your
reporting responsibilities, titles or offices as in effect immediately
prior to the change in control, or any removal of you from or any
failure to reelect you to any of such positions, except in connection
with the termination of your employment for Cause, Disability,
Retirement, by you other than for Good Reason or as a result of your
death; or
(ii) (x) a reduction in your base salary in effect
immediately prior to the change in control or such higher base salary as<PAGE>
may thereafter be in effect, or (y) the failure by the Employer to
increase your base salary annually after a change in control by an
amount which at least equals, on a percentage basis, the lesser of (A)
the greatest percentage increase in base salary for such year for any
officer of the Employer or (B) the mean average percentage increase in
base salary for all officers of the Employer during the 24-month period
preceding the change in control, provided that, any such failure to
increase your base salary shall not be deemed to be Good Reason if the
Employer is prohibited from granting such increase pursuant to any
applicable law or governmental or regulatory rule, regulation or order,
or any judgment, order or decree of a court of competent jurisdiction;
or
(iii) a failure by the Employer to waive any and all
exercise, vesting, transfer and other restrictions that may exist with
respect to stock options, restricted stock or other securities which are
the subject of awards or grants made to you under the Employer's stock
option or restricted stock plan, or any other plan in effect in which
you participated immediately preceding the change in control; or
(iv) a failure by the Employer to continue its executive
incentive compensation program or any other executive or other incentive
compensation program or plan, as the same may be amended or modified
from time to time, but substantially in the form in effect immediately
prior to the change in control ("Program"), or a failure by the Employer
to continue you as a participant in the Program on at least the basis on
which you participated immediately preceding the change in control, or
to pay you any installment of a previous award or of deferred
compensation, if any, under the Program or any deferred compensation
arrangement in which you participated immediately preceding the change
in control, provided that, any such failure to continue the Program or
your participation therein shall not be deemed to be Good Reason if the
Employer is prohibited from continuing the Progam or your participation
pursuant to any applicable law or governmental or regulatory rule,
regulation or order, or any judgment, order or decree of a court of
competent jurisdiction; or
(v) the Employer requiring you to be based anywhere
which is located more than 50 road miles from the office at which you
were based immediately preceding the change in control ("Office"),
except for required travel on business to an extent substantially
consistent with the business travel obligations you experienced
immediately preceding the change in control or, in the event you consent
to any relocation of your Office, the failure by the Employer to pay (or
reimburse you for) all reasonable moving expenses incurred by you
relating to a change of your principal residence in connection with such
relocation and to indemnify you against any loss (calculated by
subtracting the sales price of such residence from the higher of (x)
your aggregate investment in such residence, or (y) the fair market
value of such residence as determined by an outside appraiser designated
by you and reasonably satisfactory to the Employer), realized in the
sale of your principal residence in connection with any such change of
residence; or
(vi) the failure by the Employer to continue in effect
any benefit or compensation plan or arrangement in which you were
participating immediately preceding the change in control, the taking of
any action by the Employer not required by law which would adversely
affect your participation in or materially reduce your benefits under
any of such plans or deprive you of any material fringe benefit enjoyed<PAGE>
by you immediately prior to the change in control; or the failure by the
Employer to provide you with the number of paid vacation days, holidays
and personal days to which you are then entitled in accordance with the
Employer's normal leave policy in effect immediately preceding the
change in control; or
(vii) in the event that you are a member of the Board
immediately prior to the change in control, and you are not reelected to
the Board or you are required to resign from the Board; or
(viii) any purported termination of your employment by
the Employer which is not effected pursuant to a Notice of Termination
satisfying the requirements of subsection (d) below (and, if applicable,
subsections (a) and (b) above) and, for the purposes of this Agreement,
no such purported termination shall be effective; or the delivery to you
of a Notice of Termination informing you of the termination of your
employment other than for Cause or Disability; or
(ix) the failure of the Employer to obtain the assumption
of this Agreement, and the Employer s obligations hereunder, from any
successor as contemplated in Section 5 hereof.
(d) Notice of Termination. The termination of your employment
by the Employer for any reason or by you for Good Reason shall be
communicated by a written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination
provisions in this Agreement relied upon and shall set forth, in
reasonable detail, the facts and circumstances claimed to provide a
basis for termination of your employment under the provisions so
indicated. In the event that the Employer terminates your employment
for Cause, the Notice of Termination shall include a copy of the Board
resolution required under Section 3(b). For the purposes of this
Agreement, no purported termination shall be effective without such
Notice of Termination.
(e) Date of Termination. "Date of Termination" shall mean (i)
if your employment is terminated because of your death, the date of your
death; (ii) if your employment is terminated for Disability, 30 days
after Notice of Termination is given (provided that you shall not have
returned to the performance of your duties on a full-time basis during
such 30-day period); (iii) if your employment is terminated for Cause,
the date set forth in the Notice of Termination; (iv) if you terminate
your employment for Retirement, the effective date of your Retirement;
(v) if you terminate your employment for Good Reason, the date specified
in the Notice of Termination which in no event shall be later than 90
days following the delivery of the Notice of Termination to the
Employer, except as otherwise provided in Section 5(a), and (vi) if your
employment is terminated by Employer other than for Cause or Disability,
the date set forth in the Notice of Termination, which in no event shall
be earlier than 90 days following the delivery of the Notice of
Termination to you. If your Date of Termination is on a date which is
beyond the period during which you are entitled to benefits under this
Agreement but the Notice of Termination is given on a date which falls
within such period, then your entitlement to benefits shall be
determined as if your Date of Termination fell within such period.
(f) In the event that Good Reason exists for you to terminate
your employment and you provide notice to the Employer that such Good
Reason exists, either by Notice of Termination or otherwise, the<PAGE>
Employer shall have a one-time right to take such action as is necessary
to eliminate the basis for such Good Reason within ten days of receipt
of the notice provided by you.
(g) Continued Employment; Nonwaiver. Your continued
employment during the term of this Agreement and subsequent to an event
constituting Good Reason hereunder shall not constitute consent to such
event or a waiver of any rights you may have under this Agreement; and
your consent to a change in your employment terms conditions or status
that would otherwise constitute a Good Reason shall not affect your
right to subsequently terminate your employment for Good Reason and
obtain the payments and benefits provided for herein.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A
CHANGE IN CONTROL.
(a) During any period following a change in control during
which you fail to perform your duties with the Employer as a result of
incapacity due to physical or mental illness, you shall continue to
receive your base salary at the rate then in effect and any installments
of deferred portions of awards under the Program or otherwise paid
during such period until your employment is terminated pursuant to
Section 3(a)(i) hereof. Thereafter, your benefits shall be determined
in accordance with the Employer's Long-Term Disability Plan, or any
substitute plan then in effect.
(b) If, following a change in control, you terminate your
employment other than for Good Reason, death or Retirement, or the
Employer terminates your employment for Cause, the Employer shall pay
you your base salary at the rate then in effect through the Date of
Termination plus all other amounts to which you are entitled under the
Program or any other plan of the Employer at the time such payments are
due and the Employer shall have no further obligations to you, subject
to your entitlement to benefits under any qualified or non-qualified
retirement plans or any other qualified plans of the employer in which
you had a vested interest.
(c) If, following a change in control, you terminate your
employment by reason of death or Retirement, you (or your estate in the
event of death) shall be entitled to receive your base salary at the
rate then in effect until the Date of Termination plus all other amounts
to which you are entitled under any compensation plan of the Employer at
the time such payments are due. Thereafter, your benefits shall be
determined in accordance with the provisions of the benefit plans and
arrangements in which you participated on the date immediately preceding
the Date of Termination.
(d) If the Employer terminates your employment other than for
Disability or Cause or you terminate your employment for Good Reason
during the Protection Period, then the Employer shall continue to pay to
you your base salary at the rate then in effect through the Date of
Termination. In addition, the Employer shall pay to you the following
amounts:
(i) An amount equal to the amount, if any, of the
deferred portion of any awards which have been awarded to you pursuant
to the Program or otherwise but which have not yet been paid to you and
the amount of deferred compensation, if any, under the Program or
otherwise which has accrued to your account; and<PAGE>
(ii) In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, an amount equal to the
product of (x) the sum of your annual base salary in effect as of the
Date of Termination (without giving effect to any reduction therein
after the change in control) plus an amount equal in value to the
highest incentive compensation (determined without regard to vesting
restrictions) awarded with respect to any fiscal year to you during the
two fiscal years then most recently ended, multiplied by (y) the number
two; and
(iii) Notwithstanding any provision of any annual or
long-term incentive compensation plan or arrangement of the Employer, an
amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you for a fiscal year or other measuring period
preceding the Date of Termination but has not yet been paid and (y) a
pro rata portion to the Date of Termination of the aggregate value of
all contingent incentive compensation awards to you for all uncompleted
periods under such plans or arrangements; and
(iv) In lieu of shares of stock of the Employer issuable
upon the exercise of any employee stock options ("Options"), if any,
held by you, which Options shall be canceled upon the making of the
payment referred to herein, an amount in cash equal to the aggregate
spread between the exercise prices of all Options held by you and the
higher of (x) the highest bid price of the stock subject to the Options
during the 12-month period immediately preceding the Date of
Termination, or (y) the highest price per share actually paid in
connection with any change in control of the Employer during the term
hereof including, without limitation, prices paid in any subsequent
merger or combination with any entity that acquires control.
(e) The amounts set forth in (d)(i) through (iv) of this
Section 4 shall be paid to you, at your election, either in a lump sum
within ten days of your Date of Termination or in substantially equal
installments over a 24-month period commencing within ten days of your
Date of Termination. Should you elect to receive payment of these
amounts over a 24-month period, then the election must be made by you at
least 90 days prior to the change in control. In addition, if you elect
installment payments, then the Employer shall also pay to you interest
monthly on the outstanding balance of Employer s obligation to you.
Interest shall be computed based upon the then current rate for three-
month Certificates of Deposit, as published in The Wall Street Journal.
(f) In addition to the amounts set forth above, in the event
that within one year after your Date of Termination you move your
principal residence more than 50 miles from its location immediately
preceding your Date of Termination, the Employer shall pay to you an
amount equal to all of your relocation expenses, including but not
limited to brokers fees and commissions, mortgage points, routine
expenses associated with the purchase and sale of your residence, travel
and moving expenses and any loss (as determined in accordance with
Section 3(c)(v)) incurred on the sale of your principal residence,
provided that, if your move is in connection with your acceptance of new
employment, the Employer s obligation to pay your relocation expenses
under this subsection (f) shall be reduced to the extent that you are
eligible to be reimbursed for such expenses under the normal practice of
your new employer (whether or not you actually accept such
reimbursement). Any payments to be made by the Employer in accordance
with this subsection (f) shall be made on a regular and current basis
upon presentation of documentation in support of your expenses.<PAGE>
(g) If you become entitled to the payments described in
Section 4(d) above, to the extent that your rights to any shares of
stock of the Employer granted to you under the Employer's restricted
stock plan, or any other plan in which you participated immediately
preceding the change in control are not fully vested and nonforfeitable,
your rights thereto shall automatically become fully vested and
nonforfeitable as of the Date of Termination. In addition, subject to
Section 4(h) below, the Employer shall maintain in full force and
effect, for your continued benefit for two years after the Date of
Termination, all employee welfare benefit plans, programs or
arrangements in which you were entitled to participate on the date
immediately preceding the date Notice of Termination was given,
including, without limitation, life, disability, accident and health
insurance plans or policies, ( Welfare Benefits ) provided your
continued participation is possible under the general terms and
provisions of such plans and programs. In the event that your
participation in any such plan or program is prohibited by operation of
law or by the terms of such plans or programs as in effect immediately
preceding the date Notice of Termination is given, the Employer shall
arrange to provide you with benefits substantially similar to those
which you would have been entitled to receive under such plans and
programs. Except for any insurance policy used by the Employer to fund
its excess benefit and deferred compensation plans under any grantor
trust arrangement, at the end of the period of coverage, you shall have
the option to have assigned to you at no cost and with no apportionment
of prepaid premiums, any assignable insurance policy owned by the
Employer and relating specifically to you. In addition, the Employer
will continue to fund any executive life insurance policy, death benefit
contract or agreement in effect on the date immediately preceding the
date Notice of Termination was given through your Normal Retirement Age.
In the alternative, the Employer shall make a lump sum payment of an
amount necessary to continue these premiums through your Normal
Retirement Age. "Normal Retirement Age" as used in this Agreement shall
have the same meaning as that term is used in any retirement plan in
which you participated on the date immediately preceding the date of the
change in control.
(h) You shall not be required to mitigate the amount of any
payment or benefit provided for in this Section 4 by seeking other
employment or otherwise. The amount of any payment provided for in
this Section 4 shall not be reduced by any compensation earned by you or
any retirement benefits provided to you as the result of employment by
another employer after the Date of Termination or otherwise.
Notwithstanding the foregoing, if as a result of employment by another
employer you become eligible to participate in any plan, program or
arrangement that would provide you with substantially the same type of
coverage as any of the Welfare Benefits being provided to you by the
Employer in accordance with Section 4(g), the Employer s obligation to
provide coverage of the same type shall be correspondingly reduced
(whether or not you actually accept coverage under your new employer s
plan), subject to any rights that you may have to continuation of your
medical coverage at your own expense under COBRA or any similar law.
(i) Nothing in this Agreement shall affect your right to
receive all benefits and amounts to which you are entitled under any
other compensation or employee benefit plan or arrangement, whether or
not qualified, in which you participated on the date immediately
preceding the date on which the Notice of Termination is given, in
accordance with the terms of such plans or arrangements, provided that
you shall not be entitled to any severance or termination pay or
allowance or any similar amount under any other plan or arrangement of<PAGE>
the Employer; and
(j) In the event that it shall be determined that any payment
or benefit received under this Agreement and/or any other plan,
arrangement or agreement (a Payment or, collectively, the Payments )
would be an excess parachute payment (within the meaning of Section
280G(b)(1) of the Internal Revenue Code of 1986 (the Code )) subject to
the excise tax imposed by Section 4999 of the Code (the Excise Tax ),
the present value of such Payments shall be reduced to the Reduced
Amount . The Reduced Amount shall be an amount expressed in present
value that maximizes the aggregate present value of the Payments without
causing any Payment to be an excess parachute payment subject to the
Excise Tax. For these purposes, the present value of any non-cash
benefit or deferred payment or benefit shall be determined in accordance
with Sections 280G(d)(3) and (4) of the Code. The determination whether
any Payment would be an excess parachute payment and the calculation of
the Reduced Amount shall be made by a law firm or accounting firm
selected by the Employer from among those regularly consulted by it
regarding Federal income tax matters within the 12-month period
preceding the change in control, and reasonably acceptable to you ( Tax
Counsel ). Tax Counsel s opinion shall be delivered to you within five
days after your Date of Termination, and shall contain detailed
calculations supporting the determination of the Reduced Amount or of
Tax Counsel s determination that no portion of the Payments would be
subject to the Excise Tax. Upon your receipt of Tax Counsel s opinion
setting forth a Reduced Amount, you shall determine which and how much
of the Payments shall be eliminated or reduced, provided that, if you do
not make such determination within ten days of your receipt of such
opinion, the Employer shall determine which and how much of the Payments
shall be eliminated or reduced and shall promptly give you written
notice thereof. Within five days after you give notice or upon the
expiration of ten days without notice, the Employer shall pay to or
distribute to or for your benefit such amounts as are then due to you
under this Agreement and shall promptly pay to or distribute for your
benefit in the future such amounts as become due to you under this
Agreement.
As a result of the uncertainty of the application of Section 280G
of the Code at the time of the initial determination hereunder, it is
possible that Payments will have been made by the Employer which should
not have been made ( Overpayment ) or that additional payments which
will not have been made by the Employer should have been made
( Underpayment ), in each case, consistent with the calculations
required to be made hereunder. In the event it is determined that an
Overpayment has been made, you shall promptly repay any such Overpayment
to the Employer together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code, provided that, no amount
shall be payable by you to the Employer (of if paid by you shall be
returned to you) if and to the extent such payment would not reduce the
amount that is subject to the Excise Tax. In the event it is determined
that an Underpayment has been made, any such Underpayment shall be
promptly paid by the Employer to or for your benefit together with
interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.
(k) The Employer shall also pay all fees and expenses
(including legal fees and expenses) incurred by you in contesting or
disputing any termination of your employment or in seeking to obtain or
enforce any right or benefit provided by this Agreement or in connection
with any tax audit or proceeding to the extent attributable to the<PAGE>
application of the Excise Tax to any payment or benefit hereunder,
provided that, the Employer shall not have any obligation to pay any
legal expenses incurred by you in contesting or disputing your
termination of employment or seeking to obtain or enforce any right or
benefit provided by this Agreement, and you shall be obligated to repay
the Employer for any legal fees advanced to you by the Employer (and
interest thereon) to the extent that it is determined by the arbitrator
referred to in Section 10 (or, if applicable, a court of competent
jurisdiction) that your employment was terminated for Cause, within the
meaning of Section 3(b). Any payments to be made by the Employer
pursuant to this subsection (k) shall be made to you on a regular and
current basis upon your presentation to the Employer of documentation in
support thereof.
5. SUCCESSORS, BINDING AGREEMENT.
(a) The Employer will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer to
expressly, absolutely and unconditionally assume and agree to perform
this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken
place. Failure of the Employer to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
whether or not such succession is a change in control described in
Section 2, and shall entitle you to terminate your employment for Good
Reason and become entitled to the payments and benefits provided
hereunder, provided that, if such succession is not a change in control,
the Date of Termination specified in your Notice of Termination shall
not be later than 90 days after the date on which such succession
becomes effective. As used in this Agreement, "Employer" shall mean the
Employer as hereinbefore defined and any successor to its business
and/or assets or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amounts would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee, or other designee or, if there
be no such designee, to your estate.
6. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered by United
States registered mail, return receipt requested, postage prepaid or a
nationally recognized overnight delivery service, addressed in either
case to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Employer shall be directed
to the attention of the Corporate Secretary of NUI Corporation, or to
such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be
authorized by the Board. No waiver by either party hereto at any time of<PAGE>
any breach by the other party hereto of or compliance with any condition
or provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to
the subject matter hereof have been made by either party which are not
set forth expressly in this Agreement. It is intended that the benefits
payable hereunder shall be considered paid to you for your past services
to the Employer and continuing services from the date hereof. Any
payment provided for hereunder shall be paid net of any applicable
income tax withholding required under Federal, State and local law. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the substantive law of the State of New Jersey.
8. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full force and
effect.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in the State of New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Notwithstanding the
pendency of any such dispute or controversy, the Employer will continue
to pay you your full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, base salary and
installments under the Program or otherwise) and, to the extent
permitted by law, continue you as a participant in all compensation,
benefit and insurance plans in which you were participating when the
notice giving rise to the dispute was given, until the dispute is
finally resolved, either by mutual written agreement of the parties, by
a final and binding arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction, the time for appeal
therefrom having expired and no appeal having been perfected. For the
purposes of this Agreement, if a Notice of Termination is given in
accordance with Section 3(d) hereof during the Protection Period, the
Date of Termination shall be treated as having occurred during such
period, notwithstanding the resolution of any dispute after the
conclusion of such period. Amounts paid to you under this Section
during the pendency of any such dispute or controversy are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement, provided
that, if it is determined by the arbitrator (or, if applicable, a court
of competent jurisdiction) that your employment was terminated for
Cause, as described in Section 3(b), amounts paid to you under this
Section that are attributable to any period after your Date of
Termination shall be offset against and reduce payments otherwise to be
made to you under this Agreement, and to the extent that the amounts you
receive for such period exceed the payments otherwise to be made to you
under this Agreement you shall be obligated to repay such excess to the
Employer (with interest thereon). Judgment may be entered on the
arbitrator's award in any court of competent jurisdiction; provided,
however, that you shall be entitled to seek specific performance of your
right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.<PAGE>
11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be
deemed to be a contract of employment, and the Employer retains the
right to terminate your employment at any time, for any reason or for no
reason.
12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any
prior agreement between you and the Employer concerning the subject
matter hereof.
If the foregoing Agreement correctly sets forth our agreement on
the subject matter hereof, kindly sign and return to the Employer the
enclosed copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
NUI Corporation
By_____________________
John Kean Jr., President
AGREED TO THIS_____DAY
OF ________________,1995
________________________<PAGE>
DISTRIBUTION ELECTION
I hereby revoke all prior distribution elections under this
Agreement. All amounts payable to me in accordance with Section 4(d) of
this Agreement shall be payable as follows: (initial only one item):
_______in a single lump sum payment;
_______in substantially equal monthly installments over 24 months.
Dated:
________________________
Signature<PAGE>
FORM OF TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL AGREEMENT #3
Dear:
NUI Corporation, a New Jersey corporation (the "Employer")
considers the establishment and maintenance of a sound and vital
management team essential to protecting and enhancing its best interests
and those of its shareholders. In this connection, the Employer
recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control of the Employer exists and that
such possibility and the uncertainty and questions which it may raise
among management personnel as to the effect of such change in control on
the Employer, may result in the departure or distraction of such
personnel to the detriment of the Employer and the Employer's
shareholders. Accordingly, the Board of Directors of the Employer (the
"Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of the
key members of the Employer's management, including yourself, to their
assigned duties without the distraction arising from any actual or
threatened change in control.
The Employer must, of course, remain free to effect changes in
management and terminate employment. However, in order to induce you to
remain in the Employer's employ, this letter agreement ("Agreement")
sets forth the severance benefits which the Employer agrees will be
provided to you in the event your employment is terminated under the
circumstances described herein subsequent to or in connection with a
"change in control" (as defined in Section 2).
1. TERM. This Agreement shall commence on the date hereof and
shall continue in effect through December 31,1998; provided, however,
that commencing on January 1, 1999 and every three years thereafter, the
term of this Agreement shall automatically be extended for an additional
three-year term unless, not later than September 30 preceding the
expiration of the original or any extended term hereof, the Board has
given you written notice that the Employer does not wish to extend this
Agreement; and provided, further, that if a change in control of the
Employer shall have occurred during the original or extended term of
this Agreement, this Agreement shall continue in effect for a period of
36 months beyond the month in which such change in control occurred.
Notwithstanding the foregoing, this Agreement shall terminate
immediately upon the termination of your employment prior to a change in
control.
2. CHANGE IN CONTROL. For purposes of this Agreement, a "change
in control" shall mean:
(a) a change in control of the Employer of a nature that would
be reported as a change in control in response to Item l(a) of a Current
Report on Form 8-K pursuant to the Securities Exchange Act of 1934
("Exchange Act"), as in effect on the date hereof and as the same may be
amended from time to time (or if Item l(a) is no longer in effect, any
regulations issued by the Securities and Exchange Commission which serve
similar purposes); or
(b) any person (as the term "person" is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than a trustee or other
fiduciary or custodian holding securities under a qualified or<PAGE>
nonqualified employee benefit plan of the Employer (or any affiliate),
is or becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of 25% or more of
the capital stock entitled to vote in the election of directors ("Voting
Stock ) of the Employer; or
(c) during any period of three consecutive years, individuals
who constitute the Board of Directors of the Employer at the beginning
of any such period (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
person becoming a director of the Employer after the beginning of such
period whose election or nomination was approved by a vote of at least
three-fourths of the continuing directors comprising the Incumbent Board
shall, for the purposes hereof, be considered as though such person were
a member of the Incumbent Board; or
(d) approval by the shareholders of the Employer of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 50% of the
then outstanding shares of Voting Stock of the corporation resulting
from such reorganization, merger or consolidation is then beneficially
owned, directly or indirectly, by the individuals and entities who were
the beneficial owners of the outstanding Employer Voting Stock
immediately prior to such reorganization, merger or consolidation; (ii)
no Person (excluding the Employer (or any affiliate), any trustee or
other fiduciary or custodian holding securities under any qualified or
nonqualified employee benefit plan of the Employer (or any affiliate) or
such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly,
20% or more of the outstanding Employer Voting Stock) beneficially owns,
directly or indirectly, 20% or more of the then outstanding shares of
Voting Stock of the corporation resulting from such reorganization,
merger or consolidation; and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
(e) approval by the shareholders of the Employer of the sale
or other disposition of all or substantially all of the assets of the
Employer other than to a corporation with respect to which, following
such sale or other disposition (i) more than 50% of the then outstanding
Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial
owners, of the outstanding Employer Voting Stock immediately prior to
such sale or other disposition; (ii) no Person (excluding the Employer
(or any affiliate), any trustee or other fiduciary or custodian holding
securities under any qualified or nonqualified employee benefit plan of
the Employer (or any affiliate) or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the shares of the
outstanding Employer Voting Stock) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of Voting Stock
of such corporation; and (iii) at least a majority of the members of the
board of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of assets of the
Employer; or <PAGE>
(f) execution by the Employer of a definitive agreement
providing for a transaction or series of transactions which would, when
consummated, result in a change in control as defined in subsections (a)
or (b) above or which would be the subject of the shareholder approval
referred to in subsections (d) or (e) above.
In the event that a change in control occurs by virtue of the
execution of a definitive agreement as provided in subsection (f) above
and such agreement is subsequently terminated prior to consummation of
the transaction or transactions which would constitute a change in
control under subsections (a) or (b) or prior to the shareholder
approval contemplated in subsections (d) and (e), then a change in
control for purposes of this subsection (f) shall cease as of the date
such definitive agreement is terminated. In the event that your
employment is terminated by the Employer, other than for Disability or
Cause (as described in Section 3), or by you for Good Reason (as
described in Section 3) between the time of a change in control under
this subsection (f) and the termination of the definitive agreement, you
shall be entitled to benefits under this Agreement to the extent
provided hereunder. In addition, in the event that a change in control
occurs under both this subsection (f) and any other subsection of this
Section 2, then all references in this Agreement to a change in control
shall be deemed to be references to the latest of such change in control
events to occur so that you shall be eligible to receive benefits and
payments under this Agreement upon the termination of your employment
occurring during the period commencing upon the execution of such
definitive agreement and ending 36 months after the consummation of the
transactions contemplated in such agreement.
Notwithstanding anything in the foregoing to the contrary, no
change in control of the Employer shall be deemed to have occurred with
respect to you for purposes of this Agreement by virtue of any
transaction which results in you, or any group, association or other
organization of persons related to, including, or acting in concert with
you, acquiring, directly or indirectly, control of the Employer.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 2 hereof constituting a change in control shall
have occurred during the term of this Agreement, and your employment is
terminated within 36 months after the change in control (as determined
in accordance with Section 2(f)) ( the Protection Period ) (i) by the
Employer other than for Disability pursuant to subsection (a)(i) below
or Cause pursuant to subsection (b) below, or (ii) by you for Good
Reason pursuant to subsection (c) below, then you shall be entitled to
the payments and benefits provided for in Section 4 of this Agreement.
(a) Disability; Retirement.
(i) If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from your duties with the
Employer on a full-time basis for 180 consecutive days after the
commencement of such incapacity and within 30 days after written Notice
of Termination is given you shall not have returned to the full-time
performance of your duties, the Employer may terminate your employment
for "Disability" without liability hereunder.
(ii) For purposes of this Agreement, termination of your
employment based on "Retirement" shall mean termination in accordance
with the Employer's retirement policy, including early retirement,<PAGE>
generally applicable to its employees or in accordance with any
retirement arrangement established with your consent with respect to
you.
(b) Cause. The Employer may terminate your employment for
Cause without liability hereunder. For purposes of this Agreement,
termination by the Employer of your employment for "Cause" shall mean
termination upon (i) willful and continued failure by you to
substantially perform your duties with the Employer (other than any such
failure resulting from your incapacity due to physical or mental
illness, or any such actual or anticipated failure after the issuance of
a Notice of Termination by you for Good Reason, as such terms are
defined in subsections (d) and (c) below, respectively) after a written
demand for substantial performance is delivered to you by the Board,
which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (ii) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Employer, monetarily or otherwise, including, but not
limited to, personal dishonesty, incompetence, misconduct, breach of
fiduciary duty involving personal profit, or violation of any law, rule
or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or (iii) your conviction of any crime
(whether or not involving the Employer or any affiliate) involving moral
turpitude which subjects, or if generally known would subject, the
Employer or any affiliate to public ridicule or embarrassment. For
purposes of this subsection, no act or failure to act on your part shall
be considered "willful" unless done or omitted to be done by you not in
good faith and without reasonable belief that your action or omission
was in the best interest of the Employer. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you a certified copy
of a resolution duly adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board at a meeting of the
Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, you were guilty of conduct set
forth above and specifying the particulars thereof in detail.
(c) Good Reason. You may terminate your employment for
Good Reason and become entitled to the payments and benefits provided
hereunder. For purposes of this Agreement, "Good Reason" shall mean the
occurrence of one or more of the following subsequent to a change in
control:
(i) the assignment to you of any duties substantively
inconsistent with your positions, duties, responsibilities and status
immediately prior to the change in control, or a change in your
reporting responsibilities, titles or offices as in effect immediately
prior to the change in control, or any removal of you from or any
failure to reelect you to any of such positions, except in connection
with the termination of your employment for Cause, Disability,
Retirement, by you other than for Good Reason or as a result of your
death; or
(ii) (x) a reduction in your base salary in effect
immediately prior to the change in control or such higher base salary as
may thereafter be in effect, or (y) the failure by the Employer to
increase your base salary annually after a change in control by an
amount which at least equals, on a percentage basis, the lesser of (A)<PAGE>
the greatest percentage increase in base salary for such year for any
officer of the Employer or (B) the mean average percentage increase in
base salary for all officers of the Employer during the 24-month period
preceding the change in control, provided that, any such failure to
increase your base salary shall not be deemed to be Good Reason if the
Employer is prohibited from granting such increase pursuant to any
applicable law or governmental or regulatory rule, regulation or order,
or any judgment, order or decree of a court of competent jurisdiction;
or
(iii) a failure by the Employer to waive any and all
exercise, vesting, transfer and other restrictions that may exist with
respect to stock options, restricted stock or other securities which are
the subject of awards or grants made to you under the Employer's stock
option or restricted stock plan, or any other plan in effect in which
you participated immediately preceding the change in control; or
(iv) a failure by the Employer to continue its executive
incentive compensation program or any other executive or other incentive
compensation program or plan, as the same may be amended or modified
from time to time, but substantially in the form in effect immediately
prior to the change in control ("Program"), or a failure by the Employer
to continue you as a participant in the Program on at least the basis on
which you participated immediately preceding the change in control, or
to pay you any installment of a previous award or of deferred
compensation, if any, under the Program or any deferred compensation
arrangement in which you participated immediately preceding the change
in control, provided that, any such failure to continue the Program or
your participation therein shall not be deemed to be Good Reason if the
Employer is prohibited from continuing the Progam or your participation
pursuant to any applicable law or governmental or regulatory rule,
regulation or order, or any judgment, order or decree of a court of
competent jurisdiction; or
(v) the Employer requiring you to be based anywhere
which is located more than 50 road miles from the office at which you
were based immediately preceding the change in control ("Office"),
except for required travel on business to an extent substantially
consistent with the business travel obligations you experienced
immediately preceding the change in control or, in the event you consent
to any relocation of your Office, the failure by the Employer to pay (or
reimburse you for) all reasonable moving expenses incurred by you
relating to a change of your principal residence in connection with such
relocation and to indemnify you against any loss (calculated by
subtracting the sales price of such residence from the higher of (x)
your aggregate investment in such residence, or (y) the fair market
value of such residence as determined by an outside appraiser designated
by you and reasonably satisfactory to the Employer), realized in the
sale of your principal residence in connection with any such change of
residence; or
(vi) the failure by the Employer to continue in effect
any benefit or compensation plan or arrangement in which you were
participating immediately preceding the change in control, the taking of
any action by the Employer not required by law which would adversely
affect your participation in or materially reduce your benefits under
any of such plans or deprive you of any material fringe benefit enjoyed
by you immediately prior to the change in control; or the failure by the
Employer to provide you with the number of paid vacation days, holidays
and personal days to which you are then entitled in accordance with the<PAGE>
Employer's normal leave policy in effect immediately preceding the
change in control; or
(vii) in the event that you are a member of the Board
immediately prior to the change in control, and you are not reelected to
the Board or you are required to resign from the Board; or
(viii) any purported termination of your employment by
the Employer which is not effected pursuant to a Notice of Termination
satisfying the requirements of subsection (d) below (and, if applicable,
subsections (a) and (b) above) and, for the purposes of this Agreement,
no such purported termination shall be effective; or the delivery to you
of a Notice of Termination informing you of the termination of your
employment other than for Cause or Disability; or
(ix) the failure of the Employer to obtain the assumption
of this Agreement, and the Employer s obligations hereunder, from any
successor as contemplated in Section 5 hereof.
(d) Notice of Termination. The termination of your employment
by the Employer for any reason or by you for Good Reason shall be
communicated by a written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination
provisions in this Agreement relied upon and shall set forth, in
reasonable detail, the facts and circumstances claimed to provide a
basis for termination of your employment under the provisions so
indicated. In the event that the Employer terminates your employment
for Cause, the Notice of Termination shall include a copy of the Board
resolution required under Section 3(b). For the purposes of this
Agreement, no purported termination shall be effective without such
Notice of Termination.
(e) Date of Termination. "Date of Termination" shall mean (i)
if your employment is terminated because of your death, the date of your
death; (ii) if your employment is terminated for Disability, 30 days
after Notice of Termination is given (provided that you shall not have
returned to the performance of your duties on a full-time basis during
such 30-day period); (iii) if your employment is terminated for Cause,
the date set forth in the Notice of Termination; (iv) if you terminate
your employment for Retirement, the effective date of your Retirement;
(v) if you terminate your employment for Good Reason, the date specified
in the Notice of Termination which in no event shall be later than 90
days following the delivery of the Notice of Termination to the
Employer, except as otherwise provided in Section 5(a), and (vi) if your
employment is terminated by Employer other than for Cause or Disability,
the date set forth in the Notice of Termination, which in no event shall
be earlier than 90 days following the delivery of the Notice of
Termination to you. If your Date of Termination is on a date which is
beyond the period during which you are entitled to benefits under this
Agreement but the Notice of Termination is given on a date which falls
within such period, then your entitlement to benefits shall be
determined as if your Date of Termination fell within such period.
(f) In the event that Good Reason exists for you to terminate
your employment and you provide notice to the Employer that such Good
Reason exists, either by Notice of Termination or otherwise, the
Employer shall have a one-time right to take such action as is necessary
to eliminate the basis for such Good Reason within ten days of receipt
of the notice provided by you.<PAGE>
(g) Continued Employment; Nonwaiver. Your continued
employment during the term of this Agreement and subsequent to an event
constituting Good Reason hereunder shall not constitute consent to such
event or a waiver of any rights you may have under this Agreement; and
your consent to a change in your employment terms conditions or status
that would otherwise constitute a Good Reason shall not affect your
right to subsequently terminate your employment for Good Reason and
obtain the payments and benefits provided for herein.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A
CHANGE IN CONTROL.
(a) During any period following a change in control during
which you fail to perform your duties with the Employer as a result of
incapacity due to physical or mental illness, you shall continue to
receive your base salary at the rate then in effect and any installments
of deferred portions of awards under the Program or otherwise paid
during such period until your employment is terminated pursuant to
Section 3(a)(i) hereof. Thereafter, your benefits shall be determined
in accordance with the Employer's Long-Term Disability Plan, or any
substitute plan then in effect.
(b) If, following a change in control, you terminate your
employment other than for Good Reason, death or Retirement, or the
Employer terminates your employment for Cause, the Employer shall pay
you your base salary at the rate then in effect through the Date of
Termination plus all other amounts to which you are entitled under the
Program or any other plan of the Employer at the time such payments are
due and the Employer shall have no further obligations to you, subject
to your entitlement to benefits under any qualified or non-qualified
retirement plans or any other qualified plans of the employer in which
you had a vested interest.
(c) If, following a change in control, you terminate your
employment by reason of death or Retirement, you (or your estate in the
event of death) shall be entitled to receive your base salary at the
rate then in effect until the Date of Termination plus all other amounts
to which you are entitled under any compensation plan of the Employer at
the time such payments are due. Thereafter, your benefits shall be
determined in accordance with the provisions of the benefit plans and
arrangements in which you participated on the date immediately preceding
the Date of Termination.
(d) If the Employer terminates your employment other than for
Disability or Cause or you terminate your employment for Good Reason
during the Protection Period, then the Employer shall continue to pay to
you your base salary at the rate then in effect through the Date of
Termination. In addition, the Employer shall pay to you the following
amounts:
(i) An amount equal to the amount, if any, of the
deferred portion of any awards which have been awarded to you pursuant
to the Program or otherwise but which have not yet been paid to you and
the amount of deferred compensation, if any, under the Program or
otherwise which has accrued to your account; and
(ii) In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, an amount equal to the
product of (x) the sum of your annual base salary in effect as of the<PAGE>
Date of Termination (without giving effect to any reduction therein
after the change in control) plus an amount equal in value to the
highest incentive compensation (determined without regard to vesting
restrictions) awarded with respect to any fiscal year to you during the
three fiscal years then most recently ended, multiplied by (y) the
number three; and
(iii) Notwithstanding any provision of any annual or
long-term incentive compensation plan or arrangement of the Employer, an
amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you for a fiscal year or other measuring period
preceding the Date of Termination but has not yet been paid and (y) a
pro rata portion to the Date of Termination of the aggregate value of
all contingent incentive compensation awards to you for all uncompleted
periods under such plans or arrangements; and
(iv) In lieu of shares of stock of the Employer issuable
upon the exercise of any employee stock options ("Options"), if any,
held by you, which Options shall be canceled upon the making of the
payment referred to herein, an amount in cash equal to the aggregate
spread between the exercise prices of all Options held by you and the
higher of (x) the highest bid price of the stock subject to the Options
during the 12-month period immediately preceding the Date of
Termination, or (y) the highest price per share actually paid in
connection with any change in control of the Employer during the term
hereof including, without limitation, prices paid in any subsequent
merger or combination with any entity that acquires control.
(e) The amounts set forth in (d)(i) through (iv) of this
Section 4 shall be paid to you, at your election, either in a lump sum
within ten days of your Date of Termination or in substantially equal
installments over a 24-month period commencing within ten days of your
Date of Termination. Should you elect to receive payment of these
amounts over a 24-month period, then the election must be made by you at
least 90 days prior to the change in control. In addition, if you elect
installment payments, then the Employer shall also pay to you interest
monthly on the outstanding balance of Employer s obligation to you.
Interest shall be computed based upon the then current rate for three-
month Certificates of Deposit, as published in The Wall Street Journal.
(f) In addition to the amounts set forth above, in the event
that within one year after your Date of Termination you move your
principal residence more than 50 miles from its location immediately
preceding your Date of Termination, the Employer shall pay to you an
amount equal to all of your relocation expenses, including but not
limited to brokers fees and commissions, mortgage points, routine
expenses associated with the purchase and sale of your residence, travel
and moving expenses and any loss (as determined in accordance with
Section 3(c)(v)) incurred on the sale of your principal residence,
provided that, if your move is in connection with your acceptance of new
employment, the Employer s obligation to pay your relocation expenses
under this subsection (f) shall be reduced to the extent that you are
eligible to be reimbursed for such expenses under the normal practice of
your new employer (whether or not you actually accept such
reimbursement). Any payments to be made by the Employer in accordance
with this subsection (f) shall be made on a regular and current basis
upon presentation of documentation in support of your expenses.
(g) If you become entitled to the payments described in
Section 4(d) above, to the extent that your rights to any shares of<PAGE>
stock of the Employer granted to you under the Employer's restricted
stock plan, or any other plan in which you participated immediately
preceding the change in control are not fully vested and nonforfeitable,
your rights thereto shall automatically become fully vested and
nonforfeitable as of the Date of Termination. In addition, subject to
Section 4(h) below, the Employer shall maintain in full force and
effect, for your continued benefit for two years after the Date of
Termination, all employee welfare benefit plans, programs or
arrangements in which you were entitled to participate on the date
immediately preceding the date Notice of Termination was given,
including, without limitation, life, disability, accident and health
insurance plans or policies, ( Welfare Benefits ) provided your
continued participation is possible under the general terms and
provisions of such plans and programs. In the event that your
participation in any such plan or program is prohibited by operation of
law or by the terms of such plans or programs as in effect immediately
preceding the date Notice of Termination is given, the Employer shall
arrange to provide you with benefits substantially similar to those
which you would have been entitled to receive under such plans and
programs. Except for any insurance policy used by the Employer to fund
its excess benefit and deferred compensation plans under any grantor
trust arrangement, at the end of the period of coverage, you shall have
the option to have assigned to you at no cost and with no apportionment
of prepaid premiums, any assignable insurance policy owned by the
Employer and relating specifically to you. In addition, the Employer
will continue to fund any executive life insurance policy, death benefit
contract or agreement in effect on the date immediately preceding the
date Notice of Termination was given through your Normal Retirement Age.
In the alternative, the Employer shall make a lump sum payment of an
amount necessary to continue these premiums through your Normal
Retirement Age. "Normal Retirement Age" as used in this Agreement shall
have the same meaning as that term is used in any retirement plan in
which you participated on the date immediately preceding the date of the
change in control.
(h) You shall not be required to mitigate the amount of any
payment or benefit provided for in this Section 4 by seeking other
employment or otherwise. The amount of any payment provided for in
this Section 4 shall not be reduced by any compensation earned by you or
any retirement benefits provided to you as the result of employment by
another employer after the Date of Termination or otherwise.
Notwithstanding the foregoing, if as a result of employment by another
employer you become eligible to participate in any plan, program or
arrangement that would provide you with substantially the same type of
coverage as any of the Welfare Benefits being provided to you by the
Employer in accordance with Section 4(g), the Employer s obligation to
provide coverage of the same type shall be correspondingly reduced
(whether or not you actually accept coverage under your new employer s
plan), subject to any rights that you may have to continuation of your
medical coverage at your own expense under COBRA or any similar law.
(i) Nothing in this Agreement shall affect your right to
receive all benefits and amounts to which you are entitled under any
other compensation or employee benefit plan or arrangement, whether or
not qualified, in which you participated on the date immediately
preceding the date on which the Notice of Termination is given, in
accordance with the terms of such plans or arrangements, provided that
you shall not be entitled to any severance or termination pay or
allowance or any similar amount under any other plan or arrangement of
the Employer; and<PAGE>
(j) In the event that any payments made to you under this
Agreement or otherwise ("Payments") are subject to the excise tax
imposed by Section 4999 of the Code or any successor provisions ("Excise
Tax"), then the Employer shall pay you an additional amount ("Gross Up
Payment") such that the net amount retained by you, after giving effect
to the Excise Tax on the Payments and any Federal, State and local
income taxes and Excise Tax on the Gross Up Payment, shall be equal to
the Payments (prior to giving effect to the Excise Tax). For purposes
of determining the amount of the Gross Up Payment, you shall be deemed
to pay Federal, State and local income taxes at the highest marginal
rate of taxation in the calendar year in which the Payments are made.
State and local income taxes shall be determined based upon the state
and locality of your domicile on the Date of Termination. The
determination of whether such Excise Tax is payable and the amount
thereof shall be based upon the opinion of tax counsel selected by the
Employer and reasonably acceptable to you, which such opinion shall be
delivered to you within 45 days of the Date of Termination. If such
opinion is not finally accepted by the Internal Revenue Service, then
appropriate adjustments shall be computed by such tax counsel based upon
the final amount of the Excise Tax so determined and taking into account
Employer s obligations under this subsection (j). To the extent that the
Internal Revenue Service does not accept the opinion of such tax
counsel, Employer shall add to the Gross-Up Payment required hereunder
all amounts necessary to reimburse you for your costs and expenses
arising from such tax counsel s opinion, including interest and
penalties imposed by the Internal Revenue Service. The amount shall be
paid by the Employer in one lump cash sum within 30 days of such
computation.
(k) The Employer shall also pay all fees and expenses
(including legal fees and expenses) incurred by you in contesting or
disputing any termination of your employment or in seeking to obtain or
enforce any right or benefit provided by this Agreement or in connection
with any tax audit or proceeding to the extent attributable to the
application of the Excise Tax to any payment or benefit hereunder,
provided that, the Employer shall not have any obligation to pay any
legal expenses incurred by you in contesting or disputing your
termination of employment or seeking to obtain or enforce any right or
benefit provided by this Agreement, and you shall be obligated to repay
the Employer for any legal fees advanced to you by the Employer (and
interest thereon) to the extent that it is determined by the arbitrator
referred to in Section 10 (or, if applicable, a court of competent
jurisdiction) that your employment was terminated for Cause, within the
meaning of Section 3(b). Any payments to be made by the Employer
pursuant to this subsection (k) shall be made to you on a regular and
current basis upon your presentation to the Employer of documentation in
support thereof.
5. SUCCESSORS, BINDING AGREEMENT.
(a) The Employer will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer to
expressly, absolutely and unconditionally assume and agree to perform
this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken
place. Failure of the Employer to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
whether or not such succession is a change in control described in
Section 2, and shall entitle you to terminate your employment for Good<PAGE>
Reason and become entitled to the payments and benefits provided
hereunder, provided that, if such succession is not a change in control,
the Date of Termination specified in your Notice of Termination shall
not be later than 90 days after the date on which such succession
becomes effective. As used in this Agreement, "Employer" shall mean the
Employer as hereinbefore defined and any successor to its business
and/or assets or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amounts would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee, or other designee or, if there
be no such designee, to your estate.
6. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered by United
States registered mail, return receipt requested, postage prepaid or a
nationally recognized overnight delivery service, addressed in either
case to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Employer shall be directed
to the attention of the Corporate Secretary of NUI Corporation, or to
such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be
authorized by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of or compliance with any condition
or provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to
the subject matter hereof have been made by either party which are not
set forth expressly in this Agreement. It is intended that the benefits
payable hereunder shall be considered paid to you for your past services
to the Employer and continuing services from the date hereof. Any
payment provided for hereunder shall be paid net of any applicable
income tax withholding required under Federal, State and local law. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the substantive law of the State of New Jersey.
8. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full force and
effect.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in the State of New Jersey in accordance with the rules of<PAGE>
the American Arbitration Association then in effect. Notwithstanding the
pendency of any such dispute or controversy, the Employer will continue
to pay you your full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, base salary and
installments under the Program or otherwise) and, to the extent
permitted by law, continue you as a participant in all compensation,
benefit and insurance plans in which you were participating when the
notice giving rise to the dispute was given, until the dispute is
finally resolved, either by mutual written agreement of the parties, by
a final and binding arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction, the time for appeal
therefrom having expired and no appeal having been perfected. For the
purposes of this Agreement, if a Notice of Termination is given in
accordance with Section 3(d) hereof during the Protection Period, the
Date of Termination shall be treated as having occurred during such
period, notwithstanding the resolution of any dispute after the
conclusion of such period. Amounts paid to you under this Section
during the pendency of any such dispute or controversy are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement, provided
that, if it is determined by the arbitrator (or, if applicable, a court
of competent jurisdiction) that your employment was terminated for
Cause, as described in Section 3(b), amounts paid to you under this
Section that are attributable to any period after your Date of
Termination shall be offset against and reduce payments otherwise to be
made to you under this Agreement, and to the extent that the amounts you
receive for such period exceed the payments otherwise to be made to you
under this Agreement you shall be obligated to repay such excess to the
Employer (with interest thereon). Judgment may be entered on the
arbitrator's award in any court of competent jurisdiction; provided,
however, that you shall be entitled to seek specific performance of your
right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.
11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be
deemed to be a contract of employment, and the Employer retains the
right to terminate your employment at any time, for any reason or for no
reason.
12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any
prior agreement between you and the Employer concerning the subject
matter hereof.<PAGE>
If the foregoing Agreement correctly sets forth our agreement on
the subject matter hereof, kindly sign and return to the Employer the
enclosed copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
NUI Corporation
By_____________________
R. Van Whisnand
Chairman NUI Corporation Executive Compensation Committee
AGREED TO THIS_____DAY
OF ________________, 1995
________________________<PAGE>
DISTRIBUTION ELECTION
I hereby revoke all prior distribution elections under this
Agreement. All amounts payable to me in accordance with Section 4(d) of
this Agreement shall be payable as follows: (initial only one item):
_______in a single lump sum payment;
_______in substantially equal monthly installments over 24 months.
Dated:
________________________
Signature<PAGE>
EXHIBIT 10(xxxvi)
Contract #1.0431
SERVICE AGREEMENT
THIS AGREEMENT entered into as of this first day of April, 1995, by
and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware
corporation, hereinafter referred to as "Seller," first party, and
ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, hereinafter
referred to as "Buyer," second party,
WITNESSETH
WHEREAS, pursuant to the Order No. 636, 636-A and 636-B, issued by
the Federal Energy Regulatory Commission (Commission), Columbia Gas
Transmission Corporation ("Columbia") has assigned to Buyer upstream
capacity previously provided under Seller's FT Rate Schedule Service
Agreement dated February 1, 1992 (System Contract 0.3167); and
WHEREAS, upon the effective date of this agreement, the contractual
arrangement between Columbia and Seller is terminated and abandonment of
service under the FT Rate Schedule Service Agreement dated February 1,
1992 (System Contract 0.3167) is automatically authorized; and
WHEREAS, Buyer has been assigned a portion of Columbia's capacity
previously provided under the FT Rate Schedule Service Agreement dated
February 1, 1992 (System Contract 0.3167), and agrees to such assignment
and assumes Columbia's obligations pursuant to the Service Agreement and
Seller's FT Rate Schedule of Vol. 1 of its FERC Gas Tariff; and
WHEREAS, Seller will provide service hereunder to Buyer pursuant to
Seller's blanket certificate authorization and Rate Schedule FT for the
assigned capacity designated hereinbelow.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of
Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be
delivered to Seller natural gas for transportation and Seller agrees to
receive, transport and redeliver natural gas to Buyer or for the account
of Buyer, on a firm basis, up to the dekatherm equivalent of a
Transportation Contract Quantity ("TCQ") of 2,500 Mcf per day.
2. Transportation service rendered hereunder shall not be subject
to curtailment or interruption except as provided in Section 11 of the
General Terms and Conditions of Seller's FERC Gas Tariff.<PAGE>
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of
receipt hereunder at a pressure sufficient to allow the gas to enter the
pipeline system at the varying pressures that may exist in such system
from time to time; provided, however, the pressure of the gas delivered
or caused to be delivered by Buyer shall not exceed the maximum
operating pressure(s) of Seller's pipeline system at such point(s) of
receipt. In the event the maximum operating pressure(s) of the pipeline
system, at the point(s) of receipt hereunder, is from time to time
increased or decreased, then the maximum allowable pressure(s) of the
gas delivered or caused to be delivered by Buyer at the point(s) of
receipt hereunder shall be correspondingly increased or decreased upon
written notification to Buyer. The point(s) of receipt for natural gas
received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas
transported hereunder at the following point(s) of delivery and at a
pressure(s) of:
See Exhibit B, attached hereto, for the points of delivery and
pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of April 1, 1995 and shall
remain in force and in effect until 8:00 a.m. Eastern Standard Time,
April 1, 1999 and thereafter until terminated by Seller or Buyer upon at
least three (3) years prior written notice; provided, however, this
agreement shall terminate immediately and, subject to the receipt of
necessary authorizations, if any, Seller may discontinue service
hereunder if (a) Buyer, in Seller's reasonable judgment fails to
demonstrate credit worthiness and (b) Buyer fails to provide adequate
security in accordance with Section 8.3 of Seller's' Rate Schedule FT.
As set forth in Section 8 of Article II of Seller's August 7, 1989
revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a)
pregranted abandonment under Section 284.221(d) of the Commission's
Regulations shall not apply to any long term conversions from firm sales
service to transportation service under Seller's Rate Schedule Ft and
(b) Seller shall not exercise its right to terminate this service
agreement as it applies to transportation service resulting from
conversions from firm sales service so long as Buyer is willing to pay
rates no less favorable than Seller is otherwise able to collect from
third parties for such service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer
hereunder in accordance with Seller's Rate Schedule FT and the
applicable provisions of the General Terms and Conditions of Seller's
FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, <PAGE>
and as the same may be legally amended or superseded from time to time.
Such Rate Schedule and General Terms and Conditions are by this
reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer
delivers or causes to be delivered to Seller shall include the quantity
of gas retained for applicable compressor fuel, line loss make-up (and
injection fuel under Seller's Rate Schedule GUST, if applicable) in
providing the transportation service hereunder, which quantity may be
changed from time to time and which will be specified in the currently
effective Sheet No. 44 of Volume No. I of this Tariff which relates to
service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation
service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall
reimburse Seller for any and all filing fees incurred as a result of
Buyer's request for service under Seller's Rate Schedule FT, to the
extent such fees are imposed upon Seller by the Federal Energy
Regulatory Commission or any successor governmental authority having
jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This agreement supersedes and cancels as of the effective date
hereof the following contract(s):
FT Rate Schedule Service Agreement dated February 1, 1992
(System Contract 0.3167) between Transcontinental Gas Pipe
Line Corporation and Columbia Gas Transmission.
2. No waiver by either party of any one or more defaults by the
other in the performance of any provisions of this agreement shall
operate or be construed as a waiver of any future default or defaults,
whether of a like or different character.
3. The interpretation and performance of this agreement shall be
in accordance with the laws of the State of Texas, without recourse to
the law governing conflict of laws, and to all present and future valid
laws with respect to the subject matter, including present and future
orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit
of the parties hereto and their respective successors and assigns.
5. Notices to either party shall be in writing and shall be
considered as duly delivered when mailed to the other party at the
following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.0. Box 1396
Houston, Texas 77251
Attention: Customer Service
(b) If to buyer:
EIizabethtown Gas Company
One Elizabethtown Plaza
P. O. Box 3175
Union, New Jersey 07083<PAGE>
Attention: Vice President, Gas Supply &
Planning
Such addresses may be changed from time to time by mailing appropriate
notice thereof to the other party by certified or registered mail.
IN WITNESS WHEREOF, the parties hereto have caused this agreement
to be signed by their respective officers or representatives thereunto
duly authorized.
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
(Seller)
By /S/ James P. Avioli
Vice President-Gas Control
ELIZABETHTOWN GAS COMPANY
a Division of NUI Corporation
By: /S/ Thomas E. Smith
Vice President - Gas Supply and Planning <PAGE>
EXHIBIT 10(xxxvii)
Contract #1.0445
SERVICE AGREEMENT
THIS AGREEMENT entered into as of this first day of April, 1995, by
and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware
corporation, hereinafter referred to as "Seller," first party, and
ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, hereinafter
referred to as "Buyer," second party,
WITNESSETH
WHEREAS, pursuant to the Order No. 636, 636-A and 636-B, issued by
the Federal Energy Regulatory Commission (Commission), Columbia Gas
Transmission Corporation ("Columbia") has assigned to Buyer upstream
capacity previously provided under the Transportation Agreement dated
October 1, 1987 (System Contract 0.2256); and
WHEREAS, upon the effective date of this agreement, the contractual
arrangement between Columbia and Seller is terminated and abandonment of
service under the Transportation Agreement dated October 1, 1987 (System
Contract 0.2256) is automatically authorized; and
WHEREAS, Buyer has been assigned a portion of Columbia's capacity
previously provided under the Transportation Agreement dated October 1,
1987 (System Contract 0.2256), and agrees to such assignment and assumes
Columbia's obligations pursuant to the Service Agreement and Seller's FT
Rate Schedule of Vol. 1 of its FERC Gas Tariff; and
WHEREAS, Seller will provide service hereunder to Buyer pursuant to
Seller's blanket certificate authorization and Rate Schedule FT for the
assigned capacity designated hereinbelow.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of
Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be
delivered to Seller natural gas for transportation and Seller agrees to
receive, transport and redeliver natural gas to Buyer or for the account
of Buyer, on a firm basis, up to the dekatherm equivalent of a
Transportation Contract Quantity ("TCQ") of 1,393 Mcf per day.
2. Transportation service rendered hereunder shall not be subject
to curtailment or interruption except as provided in Section 11 of the
General Terms and Conditions of Seller's FERC Gas Tariff.
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of
receipt hereunder at a pressure sufficient to allow the gas to enter the
pipeline system at the varying pressures that may exist in such system
from time to time; provided, however, the pressure of the gas delivered
or caused to be delivered by Buyer shall not exceed the maximum<PAGE>
operating pressure(s) of Seller's pipeline system at such point(s) of
receipt. In the event the maximum operating pressure(s) of the pipeline
system, at the point(s) of receipt hereunder, is from time to time
increased or decreased, then the maximum allowable pressure(s) of the
gas delivered or caused to be delivered by Buyer at the point(s) of
receipt hereunder shall be correspondingly increased or decreased upon
written notification to Buyer. The point(s) of receipt for natural gas
received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas
transported hereunder at the following point(s) of delivery and at a
pressure(s) of:
See Exhibit B, attached hereto, for the points of delivery and
pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of April 1, 1995 and shall
remain in force and in effect until 8:00 a.m. Eastern Standard Time,
February 2, 1998 and thereafter until terminated by Seller or Buyer upon
at least six (6) months prior written notice; provided, however, this
agreement shall terminate immediately and, subject to the receipt of
necessary authorizations, if any, Seller may discontinue service
hereunder if (a) Buyer, in Seller's reasonable judgment fails to
demonstrate credit worthiness and (b) Buyer fails to provide adequate
security in accordance with Section 8.3 of Seller's' Rate Schedule FT.
As set forth in Section 8 of Article II of Seller's August 7, 1989
revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a)
pregranted abandonment under Section 284.221(d) of the Commission's
Regulations shall not apply to any long term conversions from firm sales
service to transportation service under Seller's Rate Schedule Ft and
(b) Seller shall not exercise its right to terminate this service
agreement as it applies to transportation service resulting from
conversions from firm sales service so long as Buyer is willing to pay
rates no less favorable than Seller is otherwise able to collect from
third parties for such service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer
hereunder in accordance with Seller's Rate Schedule FT and the
applicable provisions of the General Terms and Conditions of Seller's
FERC Gas Tariff as filed with the Federal Energy Regulatory Commission,
and as the same may be legally amended or superseded from time to time.
Such Rate Schedule and General Terms and Conditions are by this
reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer
delivers or causes to be delivered to Seller shall include the quantity
of gas retained for applicable compressor fuel, line loss make-up (and
injection fuel under Seller's Rate Schedule GUST, if applicable) in<PAGE>
providing the transportation service hereunder, which quantity may be
changed from time to time and which will be specified in the currently
effective Sheet No. 44 of Volume No. I of this Tariff which relates to
service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation
service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall
reimburse Seller for any and all filing fees incurred as a result of
Buyer's request for service under Seller's Rate Schedule FT, to the
extent such fees are imposed upon Seller by the Federal Energy
Regulatory Commission or any successor governmental authority having
jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This agreement supersedes and cancels as of the effective date
hereof the following contract(s):
Transportation Agreement dated October 1, 1987 (System
Contract 0.2256) between Transcontinental Gas Pipe Line
Corporation and Columbia Gas Transmission; specifically for
that portion of capacity provided in Article I above.
2. No waiver by either party of any one or more defaults by the
other in the performance of any provisions of this agreement shall
operate or be construed as a waiver of any future default or defaults,
whether of a like or different character.
3. The interpretation and performance of this agreement shall be
in accordance with the laws of the State of Texas, without recourse to
the law governing conflict of laws, and to all present and future valid
laws with respect to the subject matter, including present and future
orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit
of the parties hereto and their respective successors and assigns.
5. Notices to either party shall be in writing and shall be
considered as duly delivered when mailed to the other party at the
following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.0. Box 1396
Houston, Texas 77251
Attention:
(b) If to buyer:
EIizabethtown Gas Company
One Elizabethtown Plaza
P. O. Box 3175
Union, New Jersey 07083
Attention: Vice President, Gas Supply &
Planning
Such addresses may be changed from time to time by mailing appropriate
notice thereof to the other party by certified or registered mail.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this agreement
to be signed by their respective officers or representatives thereunto
duly authorized.
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
(Seller)
By /S/ James P. Avioli
Vice President-Gas Control
ELIZABETHTOWN GAS COMPANY
a Division of NUI Corporation
By: /S/ Thomas E. Smith
Vice President - Gas Supply
and Planning <PAGE>
EXHIBIT 10(xxxviii)
Contract #: 400196
SERVICE AGREEMENT
FOR RATE SCHEDULE SS-l
This Agreement, made and entered into this 23rd day of September,
1994 by and between TEXAS EASTERN TRANSMISSION CORPORATION, a Delaware
Corporation (herein called "Pipeline") and ELIZABETHTOWN GAS COMPANY, a
Division of NUI Corporation (herein called "Customer," whether one or
more),
W I T N E S S E T H:
WHEREAS, there currently exists between Pipeline and Customer two
service agreements under the Rate Schedule SS-1 (Pipeline's Contract No.
400116 and 400206) which specify an MDWQ of 872 dth and an MSQ of 52,290
dth and an MDWQ of 2,744 dth and an MSQ of 327,621 dth respectively; and
WHEREAS, Pipeline and Customer desire to enter into one service
agreement under Rate Schedule SS-1 which shall supersede the two
existing Rate Schedule SS-1 service agreements reference above; and
WHEREAS, withdrawal rights under the new Rate Schedule SS-1 service
agreement are consistent with the existing rights of the two existing
rate schedule SS-1 service agreements it supersedes;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties do covenant and
agree as follows:
ARTICLE I
SCOPE OF AGREEMENT
Subject to the terms, conditions and limitations hereof and of
Pipeline's Rate Schedule SS-1, Pipeline agrees to provide firm service
for Customer under Rate Schedule SS-1 and to receive and store for
Customer's account quantities of natural gas up to the following
quantity:
Maximum Daily Injection Quantity (MDIQ) 1,953 dth
Maximum Storage Quantity (MSQ) 379,911 dth
Pipeline agrees to withdraw from storage for Customer, at
Customer's request, quantities of gas up to Customer's Maximum
Daily Withdrawal Quantity (MDWQ) of 3,646 dekatherms, or such
lesser quantity as determined pursuant to Rate Schedule SS-1, from
Customer's Storage Inventory, plus Applicable Shrinkage, and
to deliver for Customer's account such quantities. Pipeline's
obligation to withdraw gas on any day is governed by the provisions of
Rate Schedule SS-1, including but not limited to Section 6.
ARTICLE II
TERM OF AGREEMENT
The term of this Service Agreement shall commence on September 1,
1994 and shall continue in force and effect until 04/30/2012 and year to<PAGE>
year thereafter unless this Service Agreement is terminated as
hereinafter provided. This Service Agreement may be terminated by
either Pipeline or Customer upon five (5) years prior written notice to
the other specifying a termination date of any year occurring on or
after the expiration of the primary term. Subject to Section 22 of
Pipeline's General Terms and Conditions and without prejudice to such
rights, this Service Agreement may be terminated at any time by Pipeline
in the event Customer fails to pay part or all of the amount of any bill
for service hereunder and such failure continues for thirty (30) days
after payment is due; provided, Pipeline gives thirty (30) days prior
written notice to Customer of such termination and provided further such
termination shall not be effective if, prior to the date of termination,
Customer either pays such outstanding bill or furnishes a good and
sufficient surety bond guaranteeing payment to Pipeline of such
outstanding bill.
THE TERMINATION OF THIS SERVICE AGREEMENT WITH A FIXED CONTRACT
TERM OR THE PROVISION OF A TERMINATION NOTICE BY CUSTOMER TRIGGERS
PREGRANTED ABANDONMENT UNDER SECTION 7 OF THE NATURAL GAS ACT AS OF THE
EFFECTIVE DATE OF THE TERMINATION. PROVISION OF A TERMINATION NOTICE BY
PIPELINE ALSO TRIGGERS CUSTOMER'S RIGHT OF FIRST REFUSAL UNDER SECTION
3.13 OF THE GENERAL TERMS AND CONDITIONS ON THE EFFECTIVE DATE OF THE
TERMINATION.
In the event there is gas in storage for Customer's account on
April 30 of the year of termination of this Service Agreement, this
Service Agreement shall continue in force and effect for the sole
purpose of withdrawal and delivery of said gas to Customer for an
additional one-hundred and twenty (120) days.
ARTICLE III
RATE SCHEDULE
This Service Agreement in all respects shall be and remain subject
to the applicable provisions of Rate Schedule SS-1 and of the General
Terms and Conditions of Pipeline's FERC Gas Tariff on file with the
Federal Energy Regulatory Commission, all of which are by this reference
made a part hereof.
Customer shall pay Pipeline, for all services rendered hereunder
and for the availability of such service in the period stated, the
applicable prices established under Pipeline's Rate Schedule SS-1 as
filed with the Federal Energy Regulatory Commission and as the same may
be hereafter revised or changed.
Customer agrees that Pipeline shall have the unilateral right to
file with the appropriate regulatory authority and make changes
effective in (a) the rates and charges applicable to service pursuant to
Pipeline's Rate Schedule SS-1, (b) Pipeline's Rate Schedule SS-1,
pursuant to which service hereunder is rendered or (c) any provision of
the General Terms and Conditions applicable to Rate Schedule SS-1.
Notwithstanding the foregoing, Customer does not agree that Pipeline
shall have the unilateral right without the consent of Customer
subsequent to the execution of this Service Agreement and Pipeline shall
not have the right during the effectiveness of this Service Agreement to
make any filings pursuant to Section 4 of the Natural Gas Act to change
the MDIQ, MSQ and MDWQ specified in Article I, to change the term of the
service agreement as specified in Article II, to change Point(s) of
Receipt specified in Article IV, to change the Point(s) of Delivery<PAGE>
specified in Article IV, or to change the firm character of the service
hereunder. Pipeline agrees that Customer may protest or contest the
aforementioned filings, and Customer does not waive any rights it may
have with respect to such filings.
ARTICLE IV
POINT(S) OF RECEIPT AND POINT(S) OF DELIVERY
The natural gas received by Pipeline for Customer's account for
storage injection pursuant to this Service Agreement shall be those
quantities scheduled for delivery pursuant to Service Agreements between
Pipeline and Customer under Rate Schedules CDS, FT-1, SCT, PTI or IT-1
which specify as a Point of Delivery the "SS-1 Storage Point". For
purposes of billing of Usage Charges under Rate Schedules CDS, FT-1,
SCT, PTI or IT-1, deliveries under Rate Schedules CDS, FT-1, SCT, PTI
or IT-1 for injection into storage scheduled directly to the "SS-1
Storage Point" shall be deemed to have been delivered 60% in Market Zone
2 and 40% in Market Zone 3. In addition, at Customer's request any
positive or negative variance between scheduled deliveries and actual
deliveries on any day at Customer's Points of Delivery under Rate
Schedules CDS, FT-1, SCT, or IT-1 shall be deemed for billing purposes
delivered at the Point of Delivery and shall be injected into or
withdrawn from storage for Customer's account. In addition to accepting
gas for storage injection at the SS-1 Storage Point, Pipeline will
accept gas tendered at points of interconnection between Pipeline and
third party facilities at Oakford and Leidy Storage Fields provided that
such receipt does not result in Customer tendering aggregate quantities
for storage in excess of the Customer MDIQ. The Point(s) of Delivery at
which Pipeline shall deliver gas shall be specified in Exhibit A of the
executed service agreement.
Exhibit A and B are hereby incorporated as part of this Service
Agreement for all intents and purposes as if fully copied and set forth
herein at length.
ARTICLE V
QUALITY
All natural gas tendered to Pipeline for Customer#s account shall
conform and be subject to the provisions of Section 5 of
the General Terms and Conditions. Customer agrees that in the
event Customer tenders for service hereunder and Pipeline agrees to
accept natural gas which does not comply with Pipeline's quality
specifications, as expressly provided for in Section 5 of Pipeline's
General Terms and Conditions, Customer shall pay all costs associated
with processing of such gas as necessary to comply with such quality
specifications.
ARTICLE VI
ADDRESSES
Except as herein otherwise provided or as provided in the General
Terms and Conditions of Pipeline's FERC Gas Tariff, any notice, request,
demand, statement, bill or payment provided for in this Service
Agreement, or any notice which any party may desire to give to the
other, shall be in writing and shall be considered as duly delivered
when mailed by registered, certified, or regular mail to the post office<PAGE>
address of the parties hereto, as the case may be, as follows:
(a) Pipeline: Texas Eastern Transmission Corporation
5400 Westheimer Court
Houston, Texas 77056-5310
(b) Customer: ELIZABETHTOWN GAS COMPANY
ONE ELIZABETHTOWN PLAZA
UNION, NJ 07083
or such other address as either party shall designate by formal written
notice.
ARTICLE VII
ASSIGNMENTS
Any Company which shall succeed by purchase, merger, or
consolidation to the properties, substantially as an entirety, of
Customer, or of Pipeline, as the case may be, shall be entitled to the
rights and shall be subject to the obligations of its predecessor in
title under this Service Agreement; and either Customer or Pipeline may
assign or pledge this Service Agreement under the provisions of any
mortgage, deed of trust, indenture, bank credit agreement, assignment,
receivable sale, or similar instrument which it has executed or may
execute hereafter; otherwise, neither Customer nor Pipeline shall assign
this Service Agreement or any of its rights hereunder unless it first
shall have obtained the consent thereto in writing of the other;
provided further, however, that neither Customer nor Pipeline shall be
released from its obligations hereunder without the consent of the
other. In addition, Customer may assign its rights to capacity
pursuant to Section 3.14 of the General Terms and Conditions. To the
extent Customer so desires, when it releases capacity pursuant to
Section 3.14 of the General Terms and Conditions, Customer may require
privity between Customer and the Replacement Customer, as further
provided in the applicable Capacity Release Umbrella Agreement.
ARTICLE VIII
INTERPRETATION
The interpretation and performance of this Service Agreement shall
be in accordance with the laws of the State of Texas without recourse to
the law governing conflict of laws.
This Service Agreement and the obligations of the parties are
subject to all present and future valid laws with respect to the subject
matter, State and Federal, and to all valid present and future orders,
rules, and regulations of duly constituted authorities having
jurisdiction.
ARTICLE IX
CANCELLATION OF PRIOR CONTRACT(S)
This Service Agreement supersedes and cancels, as of the effective
date of this Service Agreement, the contract(s) between the parties
hereto as described below:<PAGE>
Service Agreement(s) dated, June 1, 1993 between Pipeline and
Customer under Pipeline's Rate Schedule SS-1 (Pipeline's
Contract No. 400116 and 400206).
IN WITNESS WHEREOF, the Parties hereto have caused this Service
Agreement to be signed by their respective Presidents, Vice Presidents,
or other duly authorized agents and their respective corporate seals to
be hereto affixed and attested by their respective Secretaries or
Assistant Secretaries, the day and year first above written.
TEXAS EASTERN TRANSMISSION CORPORATION
By /S/ Robert B. Evans
Vice President
ATTEST:
/S/ Robert W. Reed
Secretary
ELIZABETHTOWN GAS COMPANY
a Division of NUI Corporation
By /S/ Thomas E. Smith
Vice President
Supply & Planing
ATTEST:
/S/ Kenneth G. Ward
Asst. Secretary<PAGE>
EXHIBIT 10(xxxix)
Service Package No. 8703
Amendment No. 0
GAS STORAGE CONTRACT
(For Use Under Rate Schedule FS)
THIS AGREEMENT is made and entered into as of the 1st day of
November, 1994, by and between TENNESSEE GAS PIPELINE COMPANY, a
Delaware Corporation, hereinafter referred to as "Transporter" and
ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, a New Jersey
corporation, hereinafter referred to as "Shipper." Transporter and
Shipper shall collectively be referred to herein as the "parties."
ARTICLE I - SCOPE OF CONTRACT
Following the commencement of service hereunder, in accordance with the
terms of Transporter's Rate Schedule FS, and of this Agreement,
Transporter shall receive for injection for Shipper's account a daily
quantity of gas up to Shipper's Maximum Injection Quantity of 670 (Dth)
and Maximum Storage Quantity of 100,485 dekatherms (Dth) (on a
cumulative basis) and on demand shall withdraw from Shipper's storage
account and deliver to Shipper a daily quantity of gas up to Shipper's
Maximum Daily Withdrawal Quantity of 1,014 Dth.
ARTICLE II - SERVICE POINT
The point or points at which the gas is to be tendered for delivery by
Transporter to Shipper under this Agreement shall be at the storage
service point at Transporter's Compressor Station NORTHERN.
ARTICLE III - PRICE
1. Shipper agrees to pay Transporter for all natural gas storage
service furnished to Shipper hereunder, including compensation for
system fuel and losses, at Transporter's legally effective rate or at
any effective superseding rate applicable to the type of service
specified herein. Transporter's present legally effectively rate for
said service is contained in Transporter's Tariff as filed with the
Federal Energy Regulatory Commission.
2. Shipper agrees to reimburse Transporter for any filing or similar
fees, which have not been previously paid by Shipper, which Transporter
incurs in rendering service hereunder.
3. Shipper agrees that Transporter shall have the unilateral right to
file with the appropriate regulatory authority and make effective
changes in (a) the rates and charges applicable to service pursuant to
Transporter's Rate Schedule FS, (b) the rate schedule(s) pursuant to
which service hereunder is rendered, or (c) any provision of the General
Terms and Conditions applicable to those rate schedules. Transporter
agrees that Shipper may protest or contest the aforementioned filings,
or may seek authorization from duly constituted regulatory authorities
for such adjustment of Transporter's existing FERC Gas Tariff as may be
found necessary to assure Transporter's just and reasonable rates.<PAGE>
ARTICLE V - TERM OF CONTRACT
This Agreement shall be effective as of the 1st day of November, 1994
and shall remain in force and effect until 31st March, 2013 ("Primary
Term" ) and on a month to month basis thereafter unless terminated by
either Party upon at least thirty (30) days prior written notice to the
other Party; provided, however, that if the Primary Term is one year or
more, then unless Shipper elects upon one year's prior written notice to
Transporter to request a lesser extension term, the Agreement shall
automatically extend upon the expiration of the primary term for a term
of five years; and shall automatically extend for successive five year
terms thereafter unless shipper provides notice as described above in
advance of the expiration of a succeeding term; provided further, if the
FERC or other governmental body having jurisdiction over the service
rendered pursuant to this Agreement authorizes abandonment of such
service, this Agreement shall terminate on the abandonment date
permitted by the FERC or such other governmental body.
ARTICLE VI - NOTICES
Except as otherwise provided in the General Terms and Conditions
applicable to this Agreement, any notice under this Agreement shall be
in writing and mailed to the post office address of the party intended
to receive the same, as follows:
TRANSPORTER: Tennessee Gas Pipeline Company
P. O. Box 2511
Houston, Texas 77252-2511
Attention: Transportation Marketing
SHIPPER:
NOTICES: ELIZABETHTOWN GAS COMPANY
% NUI CORPORATION
550 Route 202-206
P. O. Box 760
Bedminster, NJ 07921-0760
Attention: NANCY SOBELSON
BILLING: ELIZABETHTOWN GAS COMPANY
% NUI CORPORATION
550 Route 202-206
P. O. Box 760
Bedminster, NJ 07921-0760
Attention: NANCY SOBELSON
or to such other address as either Party shall designate by formal
written notice to the other.
ARTICLE VII - ASSIGNMENT
Any company which shall succeed by purchase, merger, or consolidation to
the properties, substantially as an entirety, of Transporter or of
Shipper, as the case may be, shall be entitled to the rights and shall
be subject to the obligations of its predecessor in title under this
contract. Otherwise no assignment of the contract or any of the rights
or obligations thereunder shall be made by shipper, except pursuant to
the General Terms and Conditions of Transporter's FERC Gas Tariff.<PAGE>
It is agreed, however, that the restrictions on assignment contained in
this Article shall not in any way prevent either Party to the Contract
from pledging or mortgaging its rights thereunder as security for its
indebtedness.
ARTICLE VIII - MISCELLANEOUS
8.1 The interpretation and performance of this Agreement shall be in
accordance with and controlled by the laws of the State of Texas,
without regard to the doctrines governing choice of law.
8.2 If any provision of this Agreement is declared null and void, or
voidable, by a court of competent jurisdiction, then that provision
will be considered severable at either Party's option; and if the
severability option is exercised, the remaining provisions of the
Agreement shall remain in full force and effect.
8.3 Unless otherwise expressly provided in this Agreement or
Transporter's Tariff, no modification of or supplement to the terms
and provisions stated in this Agreement shall be or become
effective, until Shipper has submitted a request for change through
the TENN-SPEED 2 System and Shipper has been notified through TENN-
SPEED 2 of Transporter's agreement to such change.
ARTICLE IX - PRIOR AGREEMENTS CANCELLED
Transporter and shipper agree that this Contract, as of the date hereof,
shall supersede and cancel the following contract(s) between the parties
hereto:
Agreement for Storage Service Package 1584 dated September 1, 1993.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be duty executed in several counterparts as of the date first
hereinabove written.
TENNESSEE GAS PIPELINE COMPANY
BY: /S/ David Hansen
Agent and Attorney-in-Fact
DATE: 1/20/05
ELIZABETHTOWN GAS COMPANY
a Division of NUI Corporation
BY: /S/ Michael J. Behan
TITLE: Vice President, NUI Corporation
DATE: August 25, 1993<PAGE>
EXHIBIT 10(xl)
CONSULTING AGREEMENT
BETWEEN
JOHN KEAN, CHAIRMAN OF THE BOARD
AND
NUI CORPORATION
DATED: MARCH 24, 1995
AS AMENDED NOVEMBER 28, 1995<PAGE>
TABLE OF CONTENTS
Section Subject
Preamble
1 Retention
2 Position and Duties
3 Place of Performance
4 Compensation and Benefits
5 Unauthorized Disclosure
6 Termination
7 Compensation Upon Termination
8 Successors; Binding Agreement
9 Notices
10 Miscellaneous
11 Validity
12 Counterparts
13 Arbitration
14 Construction
15 Captions
16 Entire Agreement
Signatures<PAGE>
CONSULTING AGREEMENT made this 24th day of March 1995 by and
between NUI CORPORATION, a New Jersey corporation (the "Company"), a
multi-state natural gas distribution company with offices located in
Bedminster, New Jersey and John Kean (the "Consultant"), an individual
residing in Vero Beach, Florida.
WITNESSETH
WHEREAS, the Consultant has been employed by the Company for more
than thirty nine (39) years and is currently its Chief Executive
Officer; and
WHEREAS, the Consultant possesses an intimate knowledge of the
business and affairs of the Company, its policies, methods, personnel
and projects; and
WHEREAS, the Company considers the stability and continuity of its
management to be essential for the protection and enhancement of the
best interests of the Company and the Company's shareholders; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the Consultant's contribution to the Company has been
substantial and desires to assure the Company of the Consultant's
continued help and assistance and to compensate him therefor; and
WHEREAS, the Consultant is willing to serve the Company as Chairman
of the Board and to perform the other duties hereinafter set forth
during such periods and on such terms and conditions as are required to
perform the duties thereof;
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth, it is agreed as follows:
1. RETENTION. The Company hereby agrees to retain the Consultant
as a consultant and the Consultant hereby agrees to serve the Company on
the terms and conditions set forth herein for a period commencing on
April 1, 1995 (the "Effective Date") and expiring on March 31, 1998
(unless extended or sooner terminated as hereinafter set forth).
2. POSITION AND DUTIES. The Consultant shall serve as Chairman
of the Board as long as Consultant shall be elected to the Board. The
Consultant shall report directly to the Board. The Consultant shall
serve as Chairman of the Board during the term of the Consultant's
contract and shall have such other powers and duties as may from time to
time be prescribed by the Board, provided that such duties are
consistent with the Consultant's position. Subject to Paragraph 4(e),
the Consultant shall devote sufficient time and effort to perform the
duties assigned by the Company and or the Board. With the prior consent
of the Consultant, the Consultant also shall serve, if elected or
appointed thereto, as a director of any of the Company's subsidiary
affiliates or divisions.
3. PLACE OF PERFORMANCE
During the term of the Consultant's contract, the Company
shall maintain an office for the Consultant in the Company's Southern
Division and shall make an office available for the Consultant at the
principal executive headquarters of the Company in Bedminster, New
Jersey. The Company shall not, without the written consent of the
Consultant, relocate or transfer the Consultant's office.<PAGE>
4. COMPENSATION AND BENEFITS
During the term of the Consultant's contract:
(a) Annual Fee. The Consultant shall receive an annual fee
at the rate of at least $150,000 or at such greater rate as the Board
shall from time to time determine (the "Annual Fee") payable in
substantially equal monthly installments on the 15th day of each month.
Any increase in this Annual Fee or other compensation shall in no way
limit or reduce any other obligation of the Company hereunder and, once
established at an increased specified rate, the Annual Fee hereunder
shall not thereafter be reduced.
(b) Other Compensation. The Board may from time to time, in
its sole discretion, award the Consultant such other compensation as it
deems appropriate.
(c) Expenses. The Company shall promptly pay (or reimburse
the Consultant for) all reasonable expenses incurred by him in the
performance of his duties hereunder. The Company shall provide the
Consultant with the same vehicular transportation provided to the
Consultant during the period that he served as Chief Executive Officer
of the Company.
(d) Benefit Plans and Arrangements. The Consultant shall be
entitled to participate in or receive benefits under the health and
medical plans of the Company in effect from time to time (including any
health or medical plans made available to executives and key management
employees) and the $500,000 life insurance policy which was in effect
upon the Consultant's retirement from the Company shall be continued.
The Company agrees that it will not make any changes in such plans, or
arrangements, which would affect the Consultant's rights or benefits
whereunder in a manner inconsistent with the treatment of the Company's
executives and key management employees. The Board may permit the
Consultant to participate in or receive benefits under any benefit plan
made available by the Company in the future to its executives and key
management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and
arrangements. No amount paid to the Consultant under any benefit plan,
or arrangement, presently in effect or made available in the future,
shall be deemed to be in lieu of compensation to the Consultant
hereunder.
(e) Monthly Availability. In the performance of his duties
under the Contract, the Consultant shall make himself available to the
Company on a mutually convenient basis for up to 110 hours in any
calendar month.
(f) Working Facilities. The Consultant shall be furnished
with a private office, stenographic and other necessary secretarial
assistance and such other facilities, amenities and services as are
appropriate for Consultant's position as Chairman of the Board and
adequate for the performance of his duties hereunder.
(g) Extension. Notwithstanding anything to the contrary
herein contained, in the event of a "Change in Control" (as hereinafter
defined) of the Company: (i) the term of this Agreement shall be
extended for a period of three years from the date of such Change in
Control; and (ii) Consultant shall be compensated and shall receive the
benefits provided in this Section 4.<PAGE>
5. UNAUTHORIZED DISCLOSURE. During the period of this contract,
the Consultant shall not, except as required by any court, supervisory
authority or administrative agency, without the written consent of the
Board or a person authorized thereby, disclose to any person, other than
an employee of the Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the
Consultant of his duties as Chairman of the Board, any confidential
information obtained by him while in the employ of the Company prior to
this contract or during the term hereof, provided, however, that
confidential information shall not include any information known
generally to the public (other than as a result of unauthorized
disclosure by the Consultant). In addition, for two years following the
termination of employment hereunder, the Consultant shall not disclose
any confidential information of the type described above except as
required by any court, supervisory authority or administrative agency or
with the consent of the Board, which shall not be unreasonably withheld.
6. TERMINATION.
(a) Death. The agreement shall terminate upon the death of
the Consultant. For purposes of this Agreement, the death of the
Consultant shall be treated as termination of the contract by the
Consultant.
(b) Disability. If, as a result of Consultant's incapacity
due to physical or mental illness, the Consultant shall be unable to
perform his duties hereunder for six consecutive months and, within 30
days after written Notice of Termination is given, shall not have
returned to the performance of his duties hereunder, the Company may
terminate the Consultant's contract.
(c) Cause. The Company may terminate the Consultant's
contract for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate the Consultant's contract hereunder upon
(i) the willful failure by the Consultant to substantially perform his
duties under Paragraph 5 hereof or (ii) the willful engaging by the
Consultant in conduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise, including, but not limited to,
personal dishonesty, incompetence, misconduct, breach of fiduciary duty
involving personal profit, or violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease and
desist order (other than any such failure resulting from his incapacity
due to physical or mental illness, or any such actual or anticipated
failure after the issuance of a Notice of Termination by the Consultant
for Good Reason, as such terms are defined in Subparagraphs 6(e) and
6(d) hereof, respectively). For purposes of this Paragraph, no act, or
failure to act, on the Consultant's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest
of the Company. Notwithstanding the foregoing, the Consultant shall not
be deemed to have been terminated for Cause unless and until there shall
have been delivered to the Consultant a certified copy of a resolution,
duly adopted by the affirmative vote of not less than three-quarters of
the entire membership of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to the Consultant and an
opportunity for him, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Consultant was guilty of conduct set forth above in clause (i) or (ii)
of this Subparagraph 6(c), and specifying the particulars thereof in
detail.<PAGE>
(d) Termination by the Consultant. The Consultant may
terminate his contract hereunder (i) for Good Reason, (ii) if his health
should become impaired to an extent that makes the continued performance
of his duties hereunder hazardous to his physical or mental health or
his life, or (iii) at any time by giving thirty (30) days' written
notice to the Company of his intention to terminate. For purposes of
this Agreement, "Good Reason" shall mean, after a Change in Control (as
hereinafter defined) of the Company: (A) any assignment to the
Consultant of any duties other than those contemplated by, or any
limitation of the powers of the Consultant in any respect not
contemplated by, Paragraph 2 hereof, (B) any removal of the Consultant
from or any failure to re-elect the Consultant in any positions
indicated in Paragraph 2 hereof, except in connection with termination
of the Consultant's contract for Cause, disability, or by the Consultant
other than for Good Reason, or as a result of the Consultant's death,
(C) any failure by the Company to comply with Sector's 3 or 4 hereof, or
(D) failure of the Company to obtain the assumption of the agreement to
perform this Agreement by any successor as contemplated in Paragraph 8
hereof.
(e) Notice of Termination. Any termination by the Company
pursuant to subsection (b) or (c), above, or by the Consultant pursuant
to subsection (d) above, shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Consultant's contract under the
provision so indicated. For the purposes of this Agreement, no such
termination shall be effective without such Notice of Termination.
(f) Date of Termination. "Date of Termination" shall mean (i)
if the Consultant's contract is terminated by death, the date of his
death, (ii) if the Consultant's contract is terminated pursuant to
Subparagraph (b) above, 30 days after Notice of Termination is given
(provided that the Consultant shall not have returned to the performance
of his duties during such 30-day period), (iii) if the Consultant's
contract is terminated pursuant to Subparagraph (c) or (d), above, the
date specified in the Notice of Termination, and (iv) if the
Consultant's contract is terminated for any other reason, the date on
which a Notice of Termination is given; provided, however, that in the
case of a termination pursuant to clause (iv), if within 60 days after
any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning
that termination, the Date of Termination shall be the date on which the
dispute is finally resolved, either by mutual written agreement of the
parties, by a binding and final arbitration award or by a final
judgement, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been
perfected). For the purposes hereof, if a Notice of Termination is
given during the term of this Agreement, the Date of Termination shall
be treated as having occurred during such term, notwithstanding the
resolution of any dispute after the conclusion of such term.
(g) Continued Retention; Nonwaiver. The continuation of the
Consultant's contract during the term of this Agreement, and subsequent
to an event constituting Good Reason hereunder, shall not constitute
consent to such event or a waiver of any rights the Consultant may have
under this Agreement.<PAGE>
(i) For purposes of this Agreement, a "Change in Control"
shall mean, unless the Board otherwise directs by resolution approved by
a three-fourths vote of the entire membership thereof adopted prior
thereto, (ii) a Change in Control of the Company occurring after the
date hereof of a nature that would be reported by the Company as a
Change in Control in response to Item 1(a) of a Current Report on Form
8-K pursuant to the Securities and Exchange Act of 1934 ("Exchange
Act"), as in effect on the date hereof; or (iii) if any person or entity
acquires conclusive or rebuttable control of the Company, (iv) any
"person" (as that term is used in Sections 13(d) and 14(d) (2) of the
Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, is or becomes
the beneficial owner (as that term is used is Section 13(d) of the
Exchange Act), directly or indirectly, of 25 percent or more of the
capital stock entitled to vote in the election of directors of the
Company or their successors ("Voting Stock"); or (v) during any period
of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company (the "Incumbent
Board") cease for any reason, other the death, disability or any
mandatory retirement policy applicable to Incumbent Board members, to
constitute at least a majority thereof provided, however, that any
person becoming a director of the Company after the beginning of such
period whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board shall for the purposes
hereof, be considered as though such person were a member of the
Incumbent Board; or (vi) there shall occur the sale of all or
substantially all of the assets of the Company. No merger,
consolidation, combination or corporate reorganization in which the
owners of the Voting Stock prior to said merger, consolidation,
combination or corporate reorganization own 75 percent or more of the
resulting entity's Voting Stock shall be considered a Change in Control
for the purposes of this Agreement, nor shall any purchases or
contributions of Voting Stock made to, by or on behalf of the Employee
Stock Ownership Plan, the Profit-Sharing Plan (401K) or any grantor
trust established by the Company in connection with any of its excess
benefit or deferred compensation plans, constitute a Change in Control
for purposes of this Agreement. Notwithstanding anything in the
foregoing to the contrary, no Change in Control of the employer shall
be deemed to have occurred for purposes of this Agreement by virtue of
any transaction or series of transactions which results in the
Consultant, or any group (other than the group consisting of all
shareholders of the Company), or other organization of persons related
to, including or acting in concert with the Consultant, acquiring,
directly or indirectly, control of the Company.
7. COMPENSATION UPON TERMINATION.
(a) Death. If the Consultant's contract shall be terminated
by reason of the Consultant's death, the Company shall pay, within 90
days thereof, to the Consultant's estate, as a lump sum, an amount equal
to the Annual Fee through the end of the month in which such death shall
have occurred, not yet paid through the date of the Consultant's death.
This amount shall be exclusive of and in addition to any payments the
Consultant's widow, beneficiaries or estate may be entitled to receive
(whether in his capacity as a former employee of the Company or pursuant
to this contract) pursuant to any pension, employee benefit plan or life
insurance policy or program maintained by the Company.
(b) Disability. During any period that the Consultant fails
to perform his duties hereunder as a result of incapacity due to<PAGE>
physical or mental illness, the Consultant shall continue to receive his
full Annual Fee until the Consultant's contract is terminated pursuant
to Paragraph 6(b) hereof, or until Consultant terminates his contract
pursuant to paragraph 6(d) (ii) hereof, whichever first occurs. After
termination, the Consultant shall be paid 100 percent of his Annual Fee
at the rate then in effect for one year and thereafter an annual amount
equal to 75 percent of his Annual Fee at the rate then in effect less,
in each case, any disability payments otherwise payable by or pursuant
to plans provided by the Company and actually paid to the Consultant
(but not less than an aggregate annual amount of $100,000) in
substantially equal monthly installments until the first to occur of the
expiration of the term hereof, or the Consultant's death.
(c) Cause. If the Consultant's contract shall be terminated
for Cause the Company shall pay the Consultant his full Annual Fee
through the Date of Termination at the rate in effect at the time Notice
of Termination is given and the Company shall have no further obligation
to the Consultant under this Agreement.
(d) Other. if the Company shall terminate the Consultants's
contract other than pursuant to Paragraph 6(b) or (c) hereof or if the
Consultant shall terminate his contract for Good Reason, then:
(i) the Company shall pay to the Consultant in a single lump
sum on the 30th day following the Date of Termination or, at the
Consultant's election, provided such election is made by written notice
to the Company at least 90 days prior to the Date of Termination, in
substantially equal monthly installments over 36 months:
(A) his full Annual Fee through the Date of Termination at the
rate in effect at the time the Notice of Termination was given.
(B) an amount equal to all payments which would otherwise be
payable to Consultant from the Date of Termination through the
termination of this Consulting Agreement (as set forth in Section 1) as
if Consultant had remained a consultant through the expiration of the
Consulting Agreement.
(C) In the event that any payments made to the Consultant under
this Agreement or otherwise ("Payments") are subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code ("Code") ("Excise
Tax"), then the Company shall pay the Consultant an additional amount
("Gross Up") such that the net amount retained by the Consultant after
deduction of any Excise Tax on the Payments (prior to the payment of any
Excise Tax) and any Federal, State and local income taxes and Excise Tax
upon the Payments (after the payment of any Excise Tax) shall be equal
to the Payments (prior to the payment of any Excise Tax). For purposes
of determining the amount of the Gross Up, the Consultant shall be
deemed to pay Federal, State and local income taxes at the highest
marginal rate of taxation in the calendar year in which the Payment is
to be made. State and local income taxes shall be determined based upon
the state and locality of the Consultant's domicile on the Date of
Termination. The determination of whether such Excise Tax is payable
and the amount thereof shall be based upon the opinion of tax counsel
selected by the Company and reasonably acceptable to the Consultant. If
such opinion is not finally accepted by the Internal Revenue Service
upon audit, then appropriate adjustments shall be computed (without
interest but with Gross Up, if applicable) by such tax counsel based
upon the final amount of the Excise Tax so determined. The amount shall
be paid by the appropriate party in one lump cash sum within 30 days of <PAGE>
such computation; and
(ii) The Company shall maintain in full force and effect for
the continued benefit of the Consultant for the full term of this
Agreement all employee benefit plans and programs in which the
Consultant was entitled to participate immediately prior to the date
Notice of Termination was given, including, without limitation, life,
disability, accident and health insurance plans or policies, provided
that the Consultant's continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that the Consultant's participation in any such plans or programs is
prohibited by operation of law or by the terms of such plans or programs
as in effect immediately preceding the date Notice of Termination is
given, the Company shall arrange to provide the Consultant with benefits
substantially similar to those provided under such plans and programs.
Except for any insurance policy purchased by the Company in accordance
with Subparagraph (v) below or used by the employer to fund its excess
benefit and deferred compensation plans under any grantor trust
arrangement, at the end of the period of coverage, the Consultant shall
have the option to have assigned to him at no cost and with no
apportionment of prepaid premiums, any assignable insurance policy owned
by the Company and relating specifically to the Consultant; and
(iii) The Company shall continue to fund or pay the premiums
applicable to the Consultant for any executive life insurance policy,
death benefit contract or agreement in effect on the date immediately
preceding the date Notice of Termination was given through the term of
this Agreement. In the alternative, the Company may pay a single
premium sufficient to fund the policy until the term of this Agreement
shall have expired. Nothing contained in this Subparagraph (v) shall
entitle the Consultant or his estate to death benefits or life insurance
proceeds under any such executive life insurance policy, death benefit
contract or agreement other than as may be provided under such policy,
contract or agreement; and
(iv) There shall be no requirement that the Consultant
mitigate the amount of any payment provided for in this Paragraph 7 by
seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Paragraph 7 be reduced by any compensation
earned by the Consultant or benefits, including retirement benefits, as
the result of employment by any other employer after the Date of
Termination or otherwise; and
(v) The Company shall reimburse Consultant for all legal fees
and expenses incurred by him as a result of termination hereunder
(including all such fees and expenses, if any, incurred in contesting or
disputing any such termination, in seeking to obtain or enforce any
right or benefit provided by this Agreement or in connection with any
tax audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment or benefit hereunder); provided,
that the Company shall only be obligated to so reimburse the Consultant
if the Consultant is successful in the legal actions or other
proceedings in which such fees and expenses were incurred.
Reimbursement of such fees and expenses shall be made by the Company at
the conclusion of the legal action or proceedings upon the Consultant's
presentation to the Company of a statement of such fees and expenses
prepared by Consultant's counsel under standard and customary methods;
and
(vi) should the Consultant elect to receive payments hereunder<PAGE>
in installments over 36 months, the amount of the outstanding obligation
shall be credited with interest on a monthly basis at a rate equal to
the then current rate for one-year insured certificates of deposit at
Citibank.
8. SUCCESSORS; BINDING AGREEMENT
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company by
agreement in form and substance reasonably satisfactory to the
Consultant, to expressly, absolutely and unconditionally assume and
agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. Any such assumption shall not relieve
Company of any of its obligations hereunder. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession
shall constitute Good Reason for termination of the contract by the
Consultant. As used in this Agreement, "Company" shall mean the Company
as hereinbefore defined and any successor to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in
this Paragraph 8 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Consultant hereunder
shall inure to the benefit of and be enforceable by the Consultant's
personal or legal representatives, executors, administrators,
successors, heirs, distributee, devisee and legatees. If the Consultant
should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
the Consultant's devisee, legatee, or other designee or, if there be no
such designee, to the Consultant's estate.
9. NOTICES. For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Consultant:
John Kean
176 North Shore Point
Vero Beach, FL 32963
If to the Company:
NUI Corporation
550 Route 202-206
P.O. Box 760
Bedminster, NJ 07921
Attention: Corporate Secretary
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or<PAGE>
discharge is agreed to in writing signed by the Consultant and such
officer as may be designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or in
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this
Agreement. It is intended that the benefits payable hereunder shall be
considered paid to the Consultant for past services to the Company and
continuing services from the date hereof. Any payment provided for
hereunder shall be paid net of any applicable income tax withholding
required under Federal, State or local laws.
11. VALIDITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which shall
remain in full force and effect. Notwithstanding the termination of
this Agreement, the parties shall be required to comply with any
provisions hereof which contemplate compliance by one or both parties
subsequent to such termination; and such termination shall not affect
any liability or other obligation which shall have accrued prior to such
termination.
12. COUNTERPARTS. This agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
13. ARBITRATION. Any dispute or controversy arising or in
connection with this Agreement shall be settled exclusively by
arbitration in the State of New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Notwithstanding
the pendency of any such dispute or controversy, the Company will, to
the extent provided in subparagraph 6(f) & (g), continue to pay the
Consultant's full compensation in effect when the Notice giving rise to
the dispute was given (including, but not limited to, the Annual Fee)
and, to the extent permitted by law, continue Consultant as a
participant in all benefit and insurance plans in which the Consultant
was participating when the Notice giving rise to the dispute was given,
until the dispute is finally resolved. Amounts paid under this
paragraph are in addition to all other amounts due under this Agreement
and shall not be offset against or reduce any other amounts due under
this Agreement. Judgment may be entered on the arbitrator's award in
any court of competent jurisdiction.
14. CONSTRUCTION. The validity, interpretation, construction
and performance of this Agreement shall be governed by the substantive
laws of the State of New Jersey. The Consultant hereby submits and
consents to the exclusive jurisdiction of the State and Federal courts
of New Jersey in connection with all lawsuits arising out of this
Agreement.
15. CAPTIONS. The paragraph captions in this Agreement are
for convenience of reference only and do not define, limit or describe
the scope or intent of this Agreement or any part hereof and shall not
be considered in any construction hereof.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and undertakings, both<PAGE>
written and oral, between the parties with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Attest: NUI Corporation
By /S/ JOSEPH P. COUGHLIN /S/ RICHARD J. O'NEILL
Corporate Secretary
/S/ JOHN KEAN<PAGE>
DISTRIBUTION ELECTION
I hereby revoke all prior distribution elections under this Agreement.
All amounts payable to me in accordance with Paragraph 7(d) of this
Agreement shall be payable as follows (initial only one item):
X in a single lump sum payment;
in substantially equal monthly installments over 36 months.
Dated: March 29, 1995
Signature
/S/ JOHN KEAN<PAGE>
EXHIBIT 10(xli)
AMENDED AND RESTATED
NUI CORPORATION DEFERRED COMPENSATION PLAN
1. Purpose. The purpose of the NUI Corporation Deferred Compensation
Plan (the "Plan") is to provide to a select group of management
personnel of NUI Corporation, its divisions and subsidiaries (the
"Company") the ability to defer all or a portion of cash incentive
compensation awards.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the
"Committee"). The Committee shall have full authority to designate
participants in the Plan and to interpret the Plan. All
determinations made by the Committee shall be final and binding.
3. Participants. The Committee shall have full authority to
designate, from time to time, those employees that are eligible to
participate in the Plan. Initially, all officers of the Company
shall be eligible to participate in the Plan. Eligible employees
who participate in the Plan are referred to herein as
"Participants".
4. Deferred Compensation. Any Participant may elect, in accordance
with the provisions of Section 6 below, to defer the receipt of all
or a portion of the Participant's incentive cash compensation
awarded and payable by the Company in any calendar year. The
Committee may in its discretion establish a minimum and maximum
amount and/or percentages of such incentive compensation that can
be deferred pursuant to the Plan.
The Company shall maintain records of the compensation deferred for
each Participant, including all investment earnings on such
deferred compensation ( an "Account"). The Company shall provide
each Participant a statement no less frequently than annually
indicating the current balance in the Account and all Account
earnings for the prior period.
5. Investment of Deferred Amounts. All amounts in the Account of a
Participant shall be credited at least annually with interest at a
rate equal to the thirty (30) day high grade unsecured commercial
paper rate, as published in The Wall Street Journal on the first
business day of the calendar month prior to such interest being
credited. Interest shall continue to be credited to a
Participant's Account until the Account has been fully distributed
to a Participant or the Participant s beneficiary or beneficiaries,
as applicable.
6. Election to Defer Compensation. A Participant may elect to defer
incentive cash compensation by delivering to the Committee a
notice, signed by the Participant, no later than January 1 of the
calendar year in which the compensation to be deferred is otherwise
payable to the Participant. Such election, and any subsequent
election, will continue until suspended or modified in a notice
delivered to the Committee. Both a new election and a notice of
suspension shall only apply to compensation payable to the
Participant after the end of the calendar year in which such new
election or notice of suspension is delivered to the Committee. <PAGE>
The Committee may prescribe the election form to be used by
Participants.
Unless amended or suspended in accordance with the provisions of
the immediately preceding paragraph, all elections to defer
compensation pursuant to the Plan shall be irrevocable.
7. Payment of Deferred Amount.
(a) If so designated on the Participant's election form, amounts
deferred under the Plan and interest thereon shall be distributed
to the Participant in the manner previously selected by the
Participant, as follows:
(i) on the January 31st immediately following Participant's
termination of employment if such termination of employment is
by reason of retirement;
(ii) on a date certain selected by the Participant, as
previously established in the Participant's election form.
Election forms indicating a date certain for the distribution
of deferred compensation and interest thereon shall only be
valid with respect to the next succeeding incentive cash
compensation payment.
(b) Unless an election made in accordance with section 7 (a)
above is applicable, a Participant's Account balance shall be
distributed to the Participant (or the Participant's estate or
beneficiary, as applicable) on the first to occur of the following
events:
(i) the Participant's retirement;
(ii) upon the permanent and total disability of the
Participant;
(iii) upon the death of the Participant; or
(iv) upon the voluntary or involuntary termination of the
Participant's employment with the Company (subject to the
forfeiture provisions of Section 10 of the Plan).
(c) Anything to the contrary in the Plan notwithstanding, a
Participant shall have the right to petition the Committee for the
distribution of all or part of the Participant's Account in the
event of a financial hardship. For purposes of the Plan, a
"financial hardship" shall be deemed to mean a significant need for
financial assistance in order to (i) satisfy medical expenses for
the Participant, the Participant's spouse or a dependent which
expenses are not covered by insurance; (ii) avoid the eviction of
the Participant from his or her principal residence or avoid the
foreclosure on the mortgage secured by Participant's principal
residence; (iii) satisfy commitments or other obligations directly
related to the education of the Participant's children; or (iv)
satisfy any other financial requirements arising from circumstances
which the Committee determines to be a financial hardship on the
Participant.
The Committee shall have the authority to determine, in its sole
discretion, whether a financial hardship exists and to grant or
deny a Participant's request for the distribution of all or part of
the Participant's Account. The Committee may review such
information as it deems appropriate to render its decision on any<PAGE>
such request, and the determination of the Committee shall be final
and binding.
8. Form of Payment
Payments of or from a Participant's Account shall be made in the
following manner:
(a) In the event of a Participant's termination of employment due
to retirement or death, the Account shall be distributed either (i)
in a lump sum , or (ii) upon the request of the Participant (or
Participant's estate, in the event of death) and approval by the
Committee, in substantially equal monthly installments over a five
(5) year period.
(b) In the event of a Participant's termination of employment for
any reason other than retirement or death, a Participant's Account
shall be distributed in a lump sum within thirty (30) days of
termination (subject to the forfeiture provisions of Section 10).
Unless an election accelerating or deferring receipt of a Participant's
Account balance is valid and in effect, distributions under the Plan
shall be made or commence within thirty (30) days of the termination of
the Participant's employment.
9. Participant's Rights Unsecured. The right of a Participant or a
Participant's designated beneficiary to receive a distribution under the
Plan shall be an unsecured claim against the general assets of the
Company, and neither the Participant or the Participant's designated
beneficiary shall have any rights in or against any amount credited to
the Participant's Account or any other specific assets of the Company.
An Account may not be pledged, assigned or otherwise encumbered by the
Participant or any beneficiary.
10. Forfeiture of Account. All rights which a Participant or
beneficiary shall have with respect to the Participant's Account shall
be immediately forfeited (i) upon the termination of the Participant's
employment for acts which, in the reasonable judgment of the Committee,
constitute intentional wrongdoing on the part of the Participant
resulting in a loss to the Company; or (ii) in the event that the
Participant shall enter into a business or employment which the
Committee, in its reasonable judgment, determines to be directly
competitive with the Company and substantially injurious to the
Company's financial interest.
11. Amendment and Termination. The Board of Directors of the Company
may at any time, and from time to time, amend, suspend or terminate the
Plan, in whole or in part. No such action, however, may reduce or
eliminate a Participant's or beneficiary's entitlement previously
accrued under the Plan.
12. Governing Law. The Plan shall be governed by, and construed in
accordance with, the laws of the State of New Jersey.<PAGE>
ELECTION TO DEFER COMPENSATION
Name: _______________________
(Please Print)
In accordance with the Amended and Restated NUI Corporation Deferred
Compensation Plan (the "Plan"), I understand that I may elect to defer
twenty-five percent (25%), fifty percent (50%), seventy-five (75%), or
one hundred percent (100%), but not less than five thousand dollars
($5,000.00) of any annual incentive award which may be payable to me. I
also understand that such election must be made on or before the last
day of the calendar year immediately prior to the calendar year in which
the award is payable. In accordance with this understanding and based
upon the provisions of the Plan, I hereby make the following election
for incentive cash awards which may be payable to me during calendar
year 1996:
SECTION 1 - ELECTION TO PARTICIPATE
_____ I do not wish to have any incentive compensation deferred.
____ I hereby elect to defer ___25% ___50% ___75% ___100% of any
incentive cash award made to me during calendar year 1996. I understand
that at least $5,000 will be deferred, even if that amount represents a
greater percentage of my incentive award than selected above.
SECTION 2 - FUTURE PAYMENT DATE
I hereby elect to have the deferred amount of my 1996 award paid to me
as follows (select one):
_____ Upon the first to occur of (i) my retirement, (ii) my permanent
and total disability, (iii) my death, or (iv) upon my termination of
employment with NUI Corporation, its divisions or subsidiaries (the
Company").
_____ On the January 31st following my retirement from the Company.
(Note: If employment is terminated prior to retirement, payment
will be made upon termination of employment).
_____ On the following date: ______________________________
(Note: You may select any date, but payment will be made earlier
than the selected date if (i) your employment terminates other than
for retirement, or (ii) you die after your retirement from the
Company and prior to the selected date).
_________________________ _________________________
(Date) (Signature)<PAGE>
EXHIBIT 21
SUBSIDIARIES OF NUI CORPORATION
Essel Corporation (a Florida corporation) and Utility
Billing Services, Inc. (a New Jersey corporation) are
wholly-owned subsidiaries of NUI Corporation.
Natural Gas Services, Inc. (a Delaware corporation) is
a wholly-owned subsidiary of Essel Corporation.<PAGE>
EXHIBIT NO. 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated November 14, 1995, included in this Form 10-K, into
the Company's previously filed Registration Statements File No. 33-51459,
File No. 33-57183, File No. 33-24169 and File No. 33-56509.
ARTHUR ANDERSEN LLP
New York, New York
December 20, 1995<PAGE>
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<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 448,071
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0
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<TOTAL-INTEREST-EXPENSE> 18,781
<NET-INCOME> 5,517
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<EARNINGS-AVAILABLE-FOR-COMM> 5,517
<COMMON-STOCK-DIVIDENDS> 8,296
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