SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant ___
Check the appropriate box:
___ Preliminary proxy statement
X Definitive Proxy Statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NUI CORPORATION
(Name of Registrant as Specified in Its Charter)
JAMES R. VAN HORN
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check appropriate box):
X $125 per Exchange Act Rule 0-11(c)(l)(ii), 14a-6(i), or 14a-
6(j)(2).
___ $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
___ Fee computed on table below per Exchange Act rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act rule 0-11:
(4) Proposed maximum aggregate value of transaction:
___ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:<PAGE>
NUI CORPORATION (LETTERHEAD)
February 2, 1996
Dear NUI Shareholder:
We are pleased to invite you to attend the Company's 1996 Annual
Meeting of Shareholders, which will be held at 10:30 a.m. on Tuesday,
March 12, 1996 at the offices of Elizabethtown Gas Company, 1085
Morris Avenue, Union, New Jersey.
At the Meeting we will review the Company's financial results for
fiscal year 1995 and share with you our thoughts on the many changes
taking place both within the Company and within our industry.
We will also consider the election of three directors, the appointment
of auditors and the approval of three new benefit plans: a Stock
Option and Stock Award Plan; an Employee Stock Purchase Plan; and a
Director Stock Purchase Plan. Your Board has unanimously adopted these
plans and recommends shareholders vote for the approval of these plans
and the other items on the agenda.
Please remember to complete, sign and date the enclosed proxy card and
return it promptly in the postage prepaid envelope provided. Your vote
is important to us.
We look forward to seeing you on March 12.
Sincerely,
JOHN KEAN JOHN KEAN, JR.
Chairman of the Board President and Chief Executive
Officer<PAGE>
NUI CORPORATION (LETTERHEAD)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of NUI Corporation will be held at
10:30 a.m. on Tuesday, March 12, 1996 at the offices of Elizabethtown
Gas Company, 1085 Morris Avenue, Union, New Jersey, for the following
purposes:
1. To elect three (3) directors for three-year terms expiring in
1999;
2. To approve the NUI Corporation 1996 Stock Option and Stock Award
Plan, as described in the accompanying proxy statement;
3. To approve the NUI Corporation 1996 Employee Stock Purchase
Plan, as described in the accompanying proxy statement;
4. To approve the NUI Corporation 1996 Director Stock Purchase
Plan, as described in the accompanying proxy statement;
5. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the fiscal year ending September 30,
1996; and
6. To transact such other business as may properly be brought
before the Annual Meeting, or any adjournment thereof.
Only shareholders of record at the close of business on January 26,
1996 shall be entitled to notice of, and to vote at, the Annual
Meeting or any adjournment thereof.
By Order of the Board of Directors
JAMES R. VAN HORN
General Counsel and Secretary
February 2, 1996
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE POSTAGE PREPAID ENVELOPE
PROVIDED.
Convenient parking is available in the immediate vicinity for
shareholders attending the meeting. Directions to the meeting site are
included on the back cover.<PAGE>
NUI CORPORATION
550 Route 202-206, P.O. Box 760
Bedminster, New Jersey 07921-0760
PROXY STATEMENT
This Proxy Statement is being furnished to shareholders in connection
with the solicitation by the Board of Directors of NUI Corporation, a
New Jersey corporation (hereinafter called the "Company" or "NUI")
of proxies to be voted at the Annual Meeting of Shareholders to be
held on Tuesday, March 12, 1996 and at any adjournment or postponement
thereof (the "Annual Meeting"). This Proxy Statement and the
accompanying form of proxy are first being mailed to shareholders on
or about February 2, 1996.
Record Date, Shareholders Entitled to Vote and Vote Required
Only shareholders of record of the Company's Common Stock, no par
value (the "Common Stock") at the close of business on January 26,
1996 are entitled to notice of and to vote at the Annual Meeting. As
of January 26, 1996 there were outstanding 9,201,237 shares of Common
Stock entitled to notice of and to vote at the Annual Meeting. These
shares were held by 6,960 shareholders of record.
The presence of a majority of the outstanding shares of Common Stock,
either in person or by proxy, is necessary to constitute a quorum at
the Annual Meeting. Each holder of Common Stock is entitled to one
vote for each share held. The Company's By-Laws require the
affirmative vote of a plurality of the votes cast at the Annual
Meeting for the election of directors. The affirmative vote of a
majority of the votes cast is required to ratify the appointment of
Arthur Andersen LLP as the Company's independent public accountants
and to approve the adoption of the 1996 Stock Option and Stock Award
Plan, the 1996 Employee Stock Purchase Plan and the 1996 Director
Stock Purchase Plan.
Solicitation, Revocation and Voting of Proxies
This solicitation is made on behalf of the Board of Directors of the
Company. The cost of soliciting these proxies will be borne by the
Company. In addition to solicitation by mail, directors, officers and
employees of the Company and its subsidiaries may solicit proxies for
the Annual Meeting from the Company's shareholders personally or by
telephone or telegram without additional remuneration. The Company
will also provide persons, firms, banks and companies holding shares
in their names or in the names of nominees, which in such cases are
beneficially owned by others, proxy material for transmittal to such
beneficial owners and will reimburse such record owners for their
expenses related to such transmittal. The Company has retained the
firm of D.F. King & Co. to assist in the solicitation of proxies at a
cost of $5,500, plus expenses.
The form of proxy enclosed is for use at the Annual Meeting. Any proxy
given pursuant to this solicitation may be revoked at any time prior
to its use by delivering a written notice of revocation or a duly
executed proxy bearing a later date to the Secretary of the Company at
the above address, or by attending the Annual Meeting and voting in
person. All shares represented by valid proxies will be voted at the
Annual Meeting in the manner indicated on the proxies. If no contrary
instructions are indicated, such proxies will be voted FOR the
election of each of the nominees to the Board of Directors, FOR the
ratification of Arthur Andersen LLP as independent public accountants
for the fiscal year ending September 30, 1996, FOR the approval of the
1996 Stock Option and Stock Award Plan, FOR the approval of the 1996
Employee Stock Purchase Plan and FOR the approval of the 1996 Director
Stock Purchase Plan.
Broker non-votes and abstentions are not treated as votes cast for
puposes of any of the matters to be voted on at the Annual Meeting.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The By-Laws of the Company provide that the Board of Directors shall
consist of not less than eight nor more than 25 directors. Effective
as of the Annual Meeting, the number of directors will be eight. The
By-Laws also provide that the Board of Directors shall be divided into
three classes, with directors in each class serving three-year terms.
Approximately one-third of the Board of Directors is elected each
year. Robert W. Kean, Jr., having reached the Board's mandatory
retirement age of 72 during his most recent term, is retiring from the
Board and not standing for re-election at the Annual Meeting.
It is the intention of the persons named as proxies to vote in favor
of Calvin R. Carver, Vera King Farris and John Winthrop as directors
of the Company for three-year terms expiring at the 1999 Annual
Meeting of Shareholders or until their successors are elected and
shall qualify, unless otherwise directed by the shareholder. Messrs.
Carver and Winthrop were last elected to the Board at the 1993 Annual
Meeting of Shareholders. Dr. Farris was elected to the Board in May,
1994 to fill an existing vacancy.
While it is not anticipated that any of the nominees will be unable to
serve, if any nominee is unable or declines to serve as a director at
the time of the Annual Meeting, proxies will be voted for any nominee
designated by the Board of Directors to fill the vacancy. The By-Laws
of the Company provide that specific advance notification and
information requirements must be satisfied in order for a shareholder
to nominate any individual for election to the Board. No such
nominations have been made. Information concerning these requirements
may be obtained by writing to the Secretary of the Company.
Nominees for Election
Set forth below is information concerning the age, current term,
committee memberships, the period served as a director and business
experience during the past five years with respect to each director
nominee:
Photo of Calvin R. Carver, age 70
Calvin R. Current term expires in 1996
Carver Member of the Audit, Executive and Investment Committees
Mr. Carver has served as a director of the Company
since 1969. He served as Executive Vice President of
the Company until his retirement in 1986. He is also
Vice President, Treasurer and a director of Penn-Jersey
Pipe Line Co.
Photo of Dr. Vera King Farris, age 55
Dr. Vera Current term expires in 1996
King Farris Member of the Compensation Committee
Dr. Farris has served as a director of the Company
since May, 1994. She is President of The Richard
Stockton College of New Jersey. She also serves as a
director of Flagstar Companies, Inc. and on the boards
of numerous educational and civic organizations.
Photo of John Winthrop, age 59
John Current term expires in 1996
Winthrop Member of the Audit and Investment Committees
Mr. Winthrop has served as a director since 1978. He is
President of John Winthrop & Co., Inc. and a partner of
Winthrop Melhado Flynn (both investment management
firms). He also serves as a director of the American
Farmland Trust and several mutual funds, including
certain Alliance Capital Funds and the Pioneer Funds.
Continuing Board Members
Set forth below is information concerning the age, current term,
committee memberships, the period served as director and business
experience during the past five years with respect to those members of
the Board of Directors whose current term extends beyond 1996:
Photo of James J. Forese, age 59
James J. Current term expires in 1997
Forese Member of the Audit, Executive and Compensation
Committees
Mr. Forese has served as a director of the Company
since 1978. Since January, 1996 he has served as
Executive Vice President, Chief Operating Officer and a
director of Alco Standard Corp. (office equipment and
supply systems). From October, 1993 through December,
1995 he served as General Manager of Customer Financing
for International Business Machines Corporation
("IBM") and as Chairman of IBM Credit Corporation.
From 1990 through 1995 he held the additional position
of Vice President-Finance of IBM. Mr. Forese also
serves as a director of American Management Systems,
Inc.
Photo of John Kean, age 66
John Kean Current term expires in 1998
Chairman of the Board of Directors
Member of the Executive and Investment Committees
Mr. Kean has served as a director since 1969. He served
as Chief Executive Officer of the Company from 1969
until his retirement in April, 1995, holding the
positions of Chairman of the Board since October, 1994
and President from 1969 until October, 1994. Mr. Kean
is also a director of E'Town Corporation and its
subsidiary, Elizabethtown Water Company
Photo of John Kean, Jr., age 38
John Current term expires in 1998
Kean, Jr. President and Chief Executive Officer
Member of the Executive Committee
Mr. Kean has served as a director since 1995. Since
April, 1995 he has served as President and Chief
Executive Officer of the Company. From October, 1994
through March, 1995 he served as President and Chief
Operating Officer. He served as Executive Vice
President of the Company from January 1992 to September
1994 and as Executive Vice President of Elizabethtown
Gas Company from March 1993 to September 1994. Prior to
March, 1993 Mr. Kean served as Chief Financial Officer
of the Company.
Photo of Dr. Bernard S. Lee, age 61
Dr. Bernard Current term expires in 1998
S. Lee Member of the Audit and Compensation Committees
Dr. Lee has served as a director since 1992. He is Chief
Executive Officer and President of the Institute of Gas
Technology. Dr. Lee is also a director of Peerless Mfg.
Co., Energy Biosystems Corp. and National Fuel Gas Company.
Photo of R. Van Whisnand, age 51
R. Van Current term expires in 1997
Whisnand Member of the Compensation and Executive Committees
Mr. Whisnand has served as a director since 1982. Since
March, 1995 he has served as a principal of Fox Asset
Management (investment management). Prior thereto Mr.
Whisnand served as a partner in Combined Capital
Management (investment management).
Committees and Meetings of the Board of Directors
The Board of Directors holds regular meetings every other month and
special meetings as necessary from time to time. The Board held eight
meetings during fiscal year 1995. During the year, total attendance at
Board and Committee meetings was 94%. No member of the Board attended
fewer than 75% of the aggregate of meetings of the Board and meetings
of Committees on which such director served. The Board has an
Executive, Audit, Compensation and Investment Committee and does not
have a Nominating Committee. Information on the Committees of the
Board is set forth below.
The Executive Committee has the authority (with certain exceptions) to
take such actions as the Board of Directors is authorized to take. The
Committee does not hold regularly scheduled meetings, but remains on
call. The Committee held no meetings during fiscal year 1995. The
current members of the Executive Committee are Calvin R. Carver, James
J. Forese, John Kean (Chairman), John Kean, Jr., Robert W. Kean, Jr.
and R. Van Whisnand.
The Audit Committee has the responsibility to review and approve the
scope of the annual audit; to recommend to the Board the appointment
of independent public accountants; to review and approve the annual
internal audit program and review the findings of internal audits; to
review with the independent public accountants the adequacy of the
Company's systems and internal controls; and to review any non-audit
services provided by the independent public accountants. The Committee
met four times during fiscal year 1995. The current members of the
Audit Committee are Calvin R. Carver, James J. Forese (Chairman),
Bernard S. Lee and John Winthrop.
The Investment Committee has the responsibility to oversee the
investment of assets held by the Company's retirement plans and
savings and investment plans. The Committee selects investment
managers, establishes guidelines under which they operate and reviews
their performance. The Committee met four times during fiscal year
1995. The current members of the Investment Committee are Calvin R.
Carver (Chairman), John Kean, Robert W. Kean, Jr. and John Winthrop.
The Compensation Committee has the responsibility to review and make
recommendations to the Board of Directors regarding the annual
salaries and cash bonuses to be paid to officers of the Company, its
divisions and subsidiaries; to review and make recommendations to the
Board concerning the Company's executive compensation policies,
practices and objectives; and to administer the Company's 1988 Stock
Plan and make grants and awards under the Plan, establishing vesting
and other criteria applicable to any such grants and awards. The
Committee met three times in fiscal year 1995. For additional
information on the role and activities of the Committee, please see
"Compensation Committee Report on Executive Compensation" located
later in this Proxy Statement. The current members of the Compensation
Committee are Vera King Farris, James J. Forese, Bernard S. Lee and R.
Van Whisnand (Chairman).
Compensation of Directors
The compensation program for directors is designed to closely align
the interests of directors with the interests of shareholders. Each
non-employee director of the Company (with the exception of John Kean)
is paid a retainer fee in stock pursuant to the Company's 1988 Stock
Plan that consists of a deferred grant of shares of Common Stock. The
number of shares of Common Stock credited to the accounts of such non-
employee directors is determined by dividing $12,000 by the closing
price of the Common Stock on the date of the annual organization
meeting of the Board. Directors who chair Board Committees (with the
exception of John Kean) receive an additional deferred grant of Common
Stock with a value of $2,500 on the date of grant. On each Common
Stock dividend payment date, non-employee directors are credited with
an additional number of shares as if the shares in their deferred
accounts had actually been issued and the dividends reinvested. The
shares of Common Stock credited to a director under the 1988 Stock
Plan are issued upon the director's retirement or other termination of
the director's service as a member of the Board. As of September 30,
1995, the total deferred grants for non-employee directors provide for
the issuance of 19,006 shares of Common Stock, an increase of 4,994
shares during fiscal year 1995. In addition to these retainers, non-
employee directors (with the exception of John Kean) are paid $600 for
attendance at each regular or special meeting of the Board of
Directors and any Committee thereof.
The Company is party to a Consulting Agreement, dated March 24,
1995, with John Kean, who retired as Chief Executive Officer of the
Company effective April 1, 1995. The Agreement has a three-year term
and expires on March 31, 1998. Under the Agreement, Mr. Kean is
providing consulting services to the Company for up to 110 hours each
calendar month. The Agreement requires Mr. Kean to devote sufficient
time and effort to perform such duties as may be assigned by the
Company or the Board of Directors from time to time. The Agreement
also provides that during the term of the Agreement, if Mr. Kean
remains a director, he shall hold the position of Chairman of the
Board. In consideration of the services rendered under the Agreement,
the Company provides Mr. Kean with an annual fee of $150,000 and
office space, clerical support, expense reimbursement and life, health
and medical coverages similar to those previously provided to him when
he was an employee of the Company. Other than this annual fee and the
benefits provided for under the Agreement, Mr. Kean does not receive
any additional compensation for serving on the Board or Committees of
the Board of the Company, its divisions or subsidiaries. The Agreement
will terminate automatically in the event of Mr. Kean's death and may
be terminated by the Company for cause or if Mr. Kean should become
disabled. Mr. Kean may terminate the Agreement for "Good Reason" (as
defined in the Agreement) following a change in control of the
Company, upon the impairment of his health or upon thirty days prior
written notice. Upon a change in control of the Company, the Agreement
is automatically extended for three years following such change in
control. In addition, if, following a change in control, the Agreement
is terminated by Mr. Kean for Good Reason or by the Company (or its
successor) other than as a result of Mr. Kean's disability or for
cause, Mr. Kean shall be entitled to receive (i) an amount equal to
the amounts which would have otherwise been paid to him if the
Agreement had remained in effect through its term, (ii) the
continuation of benefits through the term of the Agreement, and (iii)
an amount, if necessary, in order to offset the impact of the
application of any excise tax imposed under the Internal Revenue Code
upon the value of such payments and benefits.
Calvin R. Carver currently serves as a director of the Company's
Elizabethtown Gas Company division and is paid a $1,000 annual
retainer and $450 for each Board and Committee meeting attended.
The Company has in effect a retirement plan for directors. To be
eligible for retirement benefits under the Plan, a director must have
served as a director for at least ten years, with a minimum of five
years of service as a non-employee of the Company and its
subsidiaries. An eligible participant in the Plan will be paid, upon
retirement at or after age 70, an annual retirement benefit for life
equal to the value of the annual Board retainer in effect at the time
of the director's retirement, subject to a minimum annual benefit of
$8,000.
Compensation Committee Interlocks and Insider Participation
Proxy disclosure rules require the Company to report certain
relationships involving the Company in which members of the
Compensation Committee have a direct or indirect material interest.
Also required is disclosure of interlocking relationships among
Compensation Committee members and those executive officers of the
Company, if any, who also serve as members of compensation committees
or executive officers at other companies. The purpose of these
requirements is to allow shareholders to assess the independence of
the Company's Compensation Committee members in making executive
compensation decisions and recommendations. While the Company has had
transactions with companies and firms with which certain members of
the Compensation Committee are, or at some point during fiscal year
1995 were, affiliated as an officer and/or director, there are no such
relationships in which members of the Committee have a direct or
indirect material interest. In addition, there are no interlocking
relationships of the nature described above involving members of the
Compensation Committee.
Certain Transactions
Companies and firms with which certain directors are, or during fiscal
year 1995 were, affiliated as an officer and/or director had
transactions in the ordinary course of business with the Company
during fiscal year 1995 and similar transactions are expected to occur
in the future. Except as discussed in the next paragraph, none of
these directors had a direct or indirect material interest in such
transactions. The companies or firms involved in these transactions
and the related directors are: Alliance Capital Management (John
Winthrop), E'Town Corporation and Elizabethtown Water Company (John
Kean and Robert W. Kean, Jr.), Fox Asset Management (R. Van Whisnand),
Institute for Gas Technology (Bernard S. Lee), International Business
Machines Corporation (James J. Forese), KCS Energy, Inc. (John Kean,
Jr.) and Penn-Jersey Pipeline Co. (Calvin R. Carver).
In August 1987, Elizabethtown Gas Company entered into an Agreement of
Lease with Liberty Hall Joint Venture for the occupancy of
approximately 160,000 square feet of a 200,000 square foot office
building in Union, New Jersey. On December 9, 1987, the predecessor to
the New Jersey Board of Public Utilities authorized the acceptance of
this agreement subject to certain conditions. The Joint Venture
participants are Cali Liberty Hall Associates (a New Jersey general
partnership) and a Kean family trust of which John Kean and Stewart B.
Kean are trustees. Stewart B. Kean is the brother of John Kean and
beneficially owns in excess of 5% of the Company's Common Stock (see
"Ownership of Voting Securities by Certain Beneficial Owners and
Management"). All negotiations relative to the lease were conducted
between Elizabethtown Gas Company and Cali Liberty Hall Associates. No
person involved with the Kean family trust participated in such
discussions. The annual base rent is approximately $2.9 million from
1996 through 1999, $3.3 million from 2000 through 2004, and $3.7
million from 2005 through 2009.
Family Relationships
John Kean is the father of John Kean, Jr. and the cousin of retiring
director Robert W. Kean, Jr.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE FOR THE ELECTION
OF THE DIRECTOR NOMINEES LISTED ABOVE. Proxies solicited by management
will be voted for the election of all director nominees unless
contrary voting instructions are indicated.
PROPOSAL NUMBER TWO
APPROVAL OF THE 1996 STOCK OPTION AND STOCK AWARD PLAN
On November 28, 1995, the Board of Directors unanimously adopted,
subject to shareholder approval at the Annual Meeting and such
regulatory approvals as may be necessary, the NUI Corporation 1996
Stock Option and Stock Award Plan (the "1996 Stock Plan"). The 1996
Stock Plan is one of several initiatives undertaken by the Board in
order to further align the interests of the Company's management with
the interests of shareholders. If approved by shareholders (subject to
regulatory approval), the 1996 Stock Plan will provide for the
granting of stock options, stock appreciation rights, restricted stock
and other stock awards in order to facilitate the attraction,
retention and motivation of key employees through participation in the
long-term growth and financial success of the Company.
Shares Reserved Under the 1996 Stock Plan
The number of shares of Common Stock with respect to which grants and
awards may be made under the 1996 Stock Plan is 250,000, subject to
adjustment in the event of stock dividends, stock splits, combinations
of shares, recapitalizations or other changes in the outstanding
Common Stock. The shares issuable under the 1996 Stock Plan may be
drawn from either authorized but previously unissued shares of Common
Stock or from reacquired shares of Common Stock, including shares
purchased by the Company on the open market or held as treasury
shares.
Material Features of the 1996 Stock Plan
The following description of the material features of the 1996 Stock
Plan is qualified in its entirety by reference to the full text of the
Plan that is attached to this Proxy Statement as Exhibit A.
The 1996 Stock Plan will be administered by a Committee designated by
the Board of Directors (the "Committee") and comprised of at least
three members, each of whom shall be a "disinterested person" within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and
an "outside director" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended from time to time (the
"Code"). Currently, the Compensation Committee serves as the
Committee. The Committee shall have, among other powers, the power to
interpret, waive, amend, and establish rules and regulations for the
1996 Stock Plan.
The Committee shall have the sole and complete authority to grant to
eligible participants one or more grants or awards, including
incentive stock options, nonqualified stock options, stock
appreciation rights, bonuses payable in stock and restricted stock, or
any combination thereof. The Committee shall have the sole discretion
to determine the amount of any such grants or awards, subject to the
condition that no participant shall receive grants or awards with
respect to more than 50,000 of the 250,000 shares reserved for
issuance under the 1996 Stock Plan. The Committee shall also have the
sole authority to establish such vesting periods and/or performance-
based goals that must be attained in order for the participant to be
able to exercise any stock option or stock appreciation right or to
obtain ownership of shares subject to the a restricted stock award.
All stock options, stock appreciation rights and restricted stock
awards shall be subject to agreements which shall be approved by the
Committee. The Agreements shall set forth the terms and conditions of
any such grants and awards and the conditions, if any, that must be
satisfied by participants in order to obtain the benefits of the
grants or awards. The Committee may, in its discretion, provide in the
Agreements that in the event of a change in control of the Company,
outstanding awards will vest, become immediately exercisable or
payable or have all restrictions lifted. All grants and awards are
non-transferable.
The 1996 Stock Plan also provides for the payment of annual retainers
to non-employee members of the Board of Directors for their service as
members of the Board and for service as the chair of a Board Committee
in the form of deferred grants of Common Stock. The Company's 1988
Stock Plan provides for the payment of Board and Committee retainers
in this same manner. The number of shares of Common Stock to be
allocated to a non-employee director's account every year is
determined by dividing the annual Board retainer (plus the annual
Committee chair retainer, if applicable) by the fair market value of
the Common Stock on the date of the annual organization meeting of the
Board. Currently, the annual Board retainer for non-employee directors
is $12,000 and the annual Committee chair retainer is $2,500. In
addition to these shares, the accounts of non-employee directors are
credited on each Common Stock dividend payment date with that number
of additional shares that could have been purchased on the accrued
shares in the account had the shares been issued and the dividends
reinvested. The number of shares accrued to a director are issued upon
the director's retirement or other termination of the director's
service as a member of the Board. As described earlier in this Proxy
Statement under "Compensation of Directors", the Company has a
Consulting Agreement with John Kean, Chairman of the Board. Under the
Agreement, he receives no Board or Committee chair retainers.
Accordingly, although he is a non-employee director, he will not be a
participant under the 1996 Stock Plan during the term of the
Consulting Agreement.
Eligible Participants
Under the 1996 Stock Plan, key salaried employees, including officers,
of the Company, its divisions and subsidiaries are eligible to receive
grants and awards. There are approximately thirty officers. The
determination of those employees who shall receive grants and awards
is determined by the Committee, in its sole discretion.
Amendments Permitted to the 1996 Stock Plan Without Shareholder
Approval
The Board of Directors may amend, alter or discontinue the 1996 Stock
Plan at any time, provided that no amendment, alteration or
discontinuation shall be made which would impair the rights of any
holder of a grant or award without the participant's written consent,
or which, without shareholder approval, would (i) increase the maximum
number of shares of Common Stock with respect to which grants and
awards may be made (except for permitted adjustments applicable to
changes in the outstanding Common Stock), (ii) decrease the exercise
price for options below 100% of the fair market value of the Common
Stock on the date of grant (except for permitted adjustments arising
as a result of changes in the outstanding Common Stock), (iii)
materially change the class of persons eligible to receive grants and
awards, (iv) extend the ten-year term of the 1996 Stock Plan, or (v)
materially increase in any other way the benefits accruing to
participants.
Discussion of Federal Income Tax Consequences
Set forth below is a summary of the federal income tax consequences
relating to grants and awards under the 1996 Stock Plan. The Plan has
been designed to meet the requirements of Section 162(m) of the Code.
Incentive Stock Options
No taxable income is recognized by the optionee upon the grant or
exercise of an incentive stock option ("ISO") that meets the
requirements of Section 422 of the Code. However, the exercise of an
ISO may result in alternative minimum tax liability for the optionee.
If no disposition of shares issued to an optionee pursuant to the
exercise of an ISO is made by the optionee within two years from the
date of grant or within one year after the date of exercise, then upon
sale of such shares, any amount realized in excess of the exercise
price (the amount paid for the shares) will be taxed to the optionee
as a long-term capital gain and any loss sustained will be a long-term
capital loss, and no deduction will be allowed to the Company for
federal income tax purposes.
If shares of Common Stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year
holding periods described above (a "disqualifying disposition"),
generally the optionee will recognize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair
market value of the shares on the date of exercise (or, if less, the
amount realized on the arm's length sale of such shares) over the
exercise price of the underlying options, and the Company will be
entitled to deduct such amount. Any gain realized from the shares in
excess of the amount taxed as ordinary income will be taxed as capital
gain and will not be deductible by the Company.
An ISO will not be eligible for the tax treatment described above if
it is exercised more than three months following termination of
employment, except in certain cases where the ISO is exercised after
the death or permanent and total disability of the optionee. If an ISO
is exercised at a time when it no longer qualifies for the tax
treatment described above, the option is treated as an nonqualified
stock option ("NQO").
Nonqualified Stock Options
No taxable income is recognized by the optionee at the time an NQO is
granted under the 1996 Stock Plan. Generally, on the date of exercise
of an NQO, ordinary income is recognized by the optionee in an amount
equal to the difference between the exercise price and the fair market
value of the shares on the date of exercise, and the Company receives
a tax deduction for the same amount. Upon disposition of the shares
acquired, an optionee generally recognizes the appreciation or
depreciation on the shares after the date of exercise as either short-
term or long-term capital gain or loss depending on how long the
shares have been held.
If the stock received upon exercise of an option or stock appreciation
right is subject to a substantial risk of forfeiture, the income and
the deduction, if any, associated with such award may be deferred in
accordance with the rules described below for restricted stock.
Stock Appreciation Rights
No income will be recognized by an optionee in connection with the
grant of a stock appreciation right ("SAR"). When the SAR is
exercised, the optionee will generally be required to include as
taxable ordinary income in the year of such exercise an amount equal
to the amount of cash received and the fair market value of any stock
received. The Company will generally be entitled to a deduction equal
to the amount included as ordinary income by such optionee.
Restricted Stock
A recipient of restricted stock generally will be subject to tax at
ordinary income rates on the excess of the fair market value of the
stock (measured at the time the stock is either transferable or is no
longer subject to forfeiture) over the amount, if any, paid for such
stock. However, a recipient who elects under Section 83(b) of the Code
within 30 days of the date of issuance of the restricted stock to be
taxed at the time of issuance of the restricted stock will recognize
ordinary income on the date of issuance equal to the fair market value
of the shares of restricted stock at the time (measured as if the
shares were unrestricted and could be sold immediately), minus any
amount paid for such stock. If the shares subject to such election are
forfeited, the recipient will be entitled to a capital loss for tax
purposes only for the amount paid for the forfeited shares, not the
amount recognized as ordinary income as a result of the Section 83(b)
election. The holding period to determine whether the recipient has
long-term or short-term capital gain or loss upon sale of the shares
begins when the forfeiture period expires (or upon issuance of the
shares, if the recipient elected immediate recognition of income under
Section 83(b) of the Code).
Non-employee directors who receive deferred grants of restricted stock
will generally recognize as ordinary income the market value of the
shares of Common Stock on the date when the shares are issued upon the
director's retirement or other termination of the director's Board
service.
New Plan Benefits Under the 1996 Stock Plan
On November 28, 1995 the Committee made grants of restricted Common
Stock to selected key employees of the Company, including the officers
listed in the Summary Compensation Table located later in this Proxy
Statement (with the exception of John Kean). The terms of the
restricted stock require that the Company achieve specific goals for
earnings per share growth during each of the next four fiscal years in
order for the recipients to receive all of the shares of Common Stock
granted. Ownership of the shares will vest 50% after two years, 25%
after the third year and 25% after the fourth year, subject to the
condition that the performance objectives have been attained. In order
for the recipients to receive all of the shares granted, the Company
must achieve a 15% growth in earnings per share during each of the
next four fiscal years. A reduced number of the granted shares will be
earned if earnings per share growth equals 7% to 14.9%; and if during
any year of the performance period a minimum of 7% earnings per share
growth is not obtained, a certain portion of the granted shares will
be forfeited. The Committee has the authority to make downward
adjustments to these performance goals if it deems such adjustments
appropriate.
The following table sets forth the value and number of shares of
restricted stock which have been granted to those officers listed in
the Summary Compensation Table and to all other executive officers and
key employees as a group, subject to shareholder and regulatory
approval of the 1996 Stock Plan. All of these grants are subject to
theterms described above and carry a risk of forfeiture in the event
that the performance objectives are not met.
Name and Position Dollar Value($)(1) Number of
Shares
John Kean, Jr.
President and CEO $243,750 15,000
Robert P. Kenney
President and CEO-
Northern Division 108,257 6,662
Lyle C. Motley, Jr.
President-Southern Division 78,146 4,809
Frank T. Bahniuk
Senior Vice President-Gas Supply 61,912 3,810
Richard J. O'Neill
Human Resources and
Administrative Officer 52,032 3,202
David P. Vincent
Chief Technology Officer 49,237 3,030
All Executive Officers as a Group 795,453 48,951
All Other Key Employees as a Group 262,632 16,162
(1) Dollar values are based upon a Common Stock market price of
$16.25 per share, which was the closing price of the Common Stock on
the date immediately prior to the date of grant.
Approval
Approval of the 1996 Stock Plan requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. In addition, the
regulatory commissions in the six states in which the Company operates
must also approve the 1996 Stock Plan, which approvals have been
requested. The Board of Directors believes that the approval of the
1996 Stock Plan is in the best interests of the Company since it will
facilitate the attraction, retention and motivation of key employees
and is consistent with the Board's compensation philosophy of aligning
the interests of the Company's management with the interests of
shareholders. In addition, the Plan will maintain the Company's
ability to fully deduct its performance-based compensation under
Section 162(m) of the Code.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED THE 1996 STOCK PLAN AND
RECOMMENDS SHAREHOLDERS VOTE FOR APPROVAL OF THE 1996 STOCK PLAN.
Proxies solicited by management will be voted FOR this proposal unless
a vote against this proposal or abstention is specifically indicated.
PROPOSAL NUMBER THREE
APPROVAL OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN
On January 23, 1996, the Board of Directors unanimously adopted,
subject to shareholder approval at the Annual Meeting and such
regulatory approvals as may be necessary, the NUI Corporation 1996
Employee Stock Purchase Plan (the "Employee Plan"). The Employee
Plan is designed to encourage employees to increase their ownership
interest in the Company and to motivate them to exert their maximum
efforts toward the success of the Company. The Employee Plan is one of
several initiatives undertaken by the Board in order to align the
interests of the Company's employees with the interests of
shareholders. If approved by shareholders (subject to regulatory
approvals), the Employee Plan will provide to employees of the Company
and its subsidiaries the opportunity to invest from one percent to ten
percent of their annual salary to purchase shares of the Company's
Common Stock, at a purchase price equal to the lesser of (i) 85% of
the fair market value at the beginning of a month, or (ii) 85% of the
fair market value at the end of that month. All employees who have
been employed with the Company or one of its divisions or subsidiaries
for at least six months will initially be eligible for participation
in the Employee Plan. Accordingly, approximately 1,000 employees will
initially be eligible.
Shares Reserved Under the Employee Plan
The number of shares of Common Stock which may be purchased under the
Employee Plan is 140,000, subject to adjustment in the event of stock
dividends, stock splits, combinations of shares, recapitalizations or
other changes in the outstanding Common Stock. The shares issuable
under the Employee Plan may be drawn from either authorized but
previously unissued shares of Common Stock or from reacquired shares
of Common Stock, including shares purchased by the Company on the open
market or held as treasury shares.
Material Features of the Employee Plan
The following description of the material features of the Employee
Plan is qualified in its entirety by reference to the full text of the
Employee Plan that is included as Exhibit B to this Proxy Statement.
The Employee Plan is administered by a Committee designated by the
Board of Directors (the "Committee") and comprised of at least three
directors, each of whom shall be a "disinterested person within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and an
"outside director" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended from time to time (the
"Code"). Currently, the Compensation Committee serves as this
Committee.
Employees eligible to participate in the Employee Plan consist of all
employees of the Company and participating subsidiaries of the Company
who have been employed for at least six months and who regularly work
at least twenty hours per week ("Participants"). Participants shall
be entitled to purchase shares of the Company's Common Stock in the
following ways: (i) by designating a percentage of their pay ranging
from one percent (1%) to a maximum of ten percent (10%) to be withheld
on a regular basis in order to purchase shares of the Company's Common
Stock monthly ("Payroll Payments"); (ii) by delivering to the
Company funds in the minimum amount of $100 and a maximum amount of
10% of their current annual salary within three business days of the
end of a month to purchase shares of Common Stock ("Optional
Payments"); or (iii) through a combination of Payroll Payments and
Optional Payments. In no event, however, may more than 10% of an
employee's annual salary be used to purchase shares under the Employee
Plan during any Plan Year. For purposes of the Employee Plan, a "Plan
Year shall mean the twelve month period beginning on the date when
the Employee Plan is implemented and each successive twelve month
period. In order to be eligible to make Payroll Payments, enrollment
and payroll deduction forms must be filed by specified dates. Once
enrolled for Payroll Payments, a Participant will continue to be
enrolled in subsequent months at the percentage of pay selected until
the Participant either elects a different rate by filing appropriate
forms or terminates these Payroll Payments.
On a monthly basis, the agent for the Employee Plan will credit to the
account of a Participant the number of whole shares of Common Stock
derived by dividing the total amount the Participant's Payroll
Payments during the month plus any Optional Payments made by the
Participant by the lesser of (i) 85% of the fair market value of the
Common Stock on the first business day of the month, and (ii) 85% of
the fair market value of the Common Stock on the last business day of
the month. For purposes of the Employee Plan, the "fair market
value" of the Common Stock on a particular day shall be the mean
between the highest and lowest prices at which the Common Stock is
traded on a national securities exchange or, if there is no sale on
such exchange on such date, the mean between the bid and asked prices
on such exchange at the close of the market on such date, or if the
market is closed on such date, the nearest prior trading day.
Fractional shares will not be issued and any amounts remaining at the
end of a monthly purchase period will be held for the purchase of
Common Stock in the next monthly purchase period.
A Participant may withdraw Payroll Payments credited to the
Participant's account under the Employee Plan if the amounts have not
already been used to purchase Common Stock by giving at least ten days
prior written notice. The cash balance will then be paid to the
Participant and no further payroll deductions will be made from the
Participant's pay until the Participant re-enrolls for such payroll
deductions.
Participants are required to hold shares acquired under the Employee
Plan for at least six months. In the event that a Participant violates
this requirement, the Participant will be suspended from the Employee
Plan. The Participant will not be permitted to re-enroll in the
Payroll Payments feature for six months from the violation and will
not be permitted to participate in the Optional Payments feature for
the remainder of the Plan Year in which the violation occurred and the
next succeeding Plan Year. Participants do not have the ability to
assign or transfer their rights to purchase Common Stock under the
Employee Plan.
In the event that the outstanding shares of Common Stock of the
Company have been increased, decreased, changed into or been exchanged
for a different number or kind of shares of Company securities through
reorganization, merger, recapitalization, reclassification, stock
split, reverse stock split or similar transaction, the Committee may
make appropriate adjustments to the number and/or kind of shares which
may be offered under the Employee Plan.
The Board of Directors has the authority to terminate or amend the
Employee Plan at any time, provided that the Board may not, without
the approval of the shareholders of the Company, increase the maximum
number of shares which may be issued under the Employee Plan (except
as set forth in the immediately preceding paragraph), amend the
requirements as to the employees eligible to participate in the
Employee Plan or permit members of the Committee to participate in the
Employee Plan.
The Employee Plan shall become effective upon the approval of
shareholders and obtaining such regulatory approvals as may be
necessary and it will terminate upon the earlier to occur of
termination by the Board of Directors or the issuance of all shares
subject to the Employee Plan.
Tax Consequences of the Employee Plan
The rights to purchase Common Stock being granted to Participants
under the Employee Plan constitute nonqualified options ("NQO") for
Federal income tax purposes. No taxable income is recognized by the
Participant at the time an NQO is granted under the Employee Plan.
Generally, on the date of exercise of an NQO, ordinary income will be
recognized by the Participant in an amount equal to the difference
between the exercise price and the fair market value of the shares on
the date of exercise, and the Company receives a tax deduction for the
same amount. Upon disposition of the shares acquired, the Participant
generally recognizes the appreciation or depreciation on the shares
after the date of exercise as either short-term or long-term capital
gain or loss depending on how long the shares have been held. The
Participant's basis in the shares will generally be equal to the price
paid for the shares plus an amount equal to the discount on the
purchase price included as ordinary income.
New Plan Benefits Under the Employee Plan
Because participation in the Employee Plan will vary from employee to
employee and levels of participation among Participants will also
vary, it is not possible to determine the value of benefits which may
be obtained by executive officers and other employees under the
Employee Plan.
Approval
Approval of the Employee Plan requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. In addition, the
regulatory commissions of the six states in which the Company operates
must also approve the Employee Plan, and such approvals have been
requested. The Board of Directors believes that the approval of the
Employee Plan is in the best interests of the Company since it will
provide an incentive for the Company's employees to increase their
ownership in the Company and motivate them to enhance shareholder
value through improved Company performance.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED THE EMPLOYEE PLAN AND
RECOMMENDS SHAREHOLDERS VOTE FOR APPROVAL OF THE EMPLOYEE PLAN.
Proxies solicited by management will be voted FOR this proposal unless
a vote against this proposal or abstention is specifically indicated.
PROPOSAL NUMBER FOUR
APPROVAL OF THE 1996 DIRECTOR STOCK PURCHASE PLAN
On January 23, 1996 the Company's Board of Directors unanimously
adopted the NUI Corporation 1996 Director Stock Purchase Plan (the
"Director Plan"). The Director Plan is designed to encourage non-
employee members of the Board of Directors to increase their ownership
interest in the Company's Common Stock. The Director Plan is one of
several initiatives undertaken by the Board in order to further align
the interests of the Company's management and Board with the interests
of shareholders. If approved by shareholders (subject to regulatory
approvals), the Director Plan will provide to non-employee directors
of the Company an option to purchase up to 1,500 shares of Common
Stock per year at a purchase price equal to 85% of the fair market
value of the Common Stock on the date of the exercise of the option.
All non-employee directors of the Company will be eligible to
participate in the Director Plan; the Company currently has eight non-
employee directors, and following the Annual Meeting there will be
seven non-employee directors.
Shares Reserved Under the Director Plan
The number of shares of Common Stock with respect to which options may
be granted under the Director Plan is 70,000, subject to adjustment in
the event of stock dividends, stock splits, combinations of shares,
recapitalizations or other changes in the outstanding Common Stock.
The shares issuable under the Director Plan may be drawn from either
authorized but previously unissued shares of Common Stock or from
reacquired shares of Common Stock, including shares purchased by the
Company on the open market or held as treasury shares.
Material Features of the Director Plan
The following description of the Director Plan is qualified in its
entirety by reference to the text of the Director Plan, which is
included as Exhibit C to this Proxy Statement.
Under the Director Plan, as of the date of the first meeting of the
Board of Directors of the Company immediately following the Annual
Meeting of Shareholders each year (the "Annual Grant Date") each
non-employee director of the Company (a "Participant") shall
automatically be granted an option to purchase up to 1,500 shares of
the Company's Common Stock, which option will be exercisable
immediately. Each option shall have a term commencing on the Annual
Grant Date and expiring on the next succeeding Annual Grant Date.
Accordingly, at no time will a Participant have outstanding options to
purchase more than 1,500 shares of Common Stock and all options must
be exercised within a roughly one year period or they will expire.
Each option may be exercised in whole or in part at any time. An
option may be exercised by delivery of a written notification of
exercise to the Secretary of the Company, accompanied or followed
within three business days by payment of the exercise price for the
number of shares to be purchased. The date upon which the Secretary
receives an exercise notification is the "Exercise Date".
Additionally, at any time up to and including an Annual Grant Date, a
director may elect to have all Board and/or Committee attendance fees
to be paid to the director during the next succeeding year to be
utilized for the purpose of automatically exercising the director's
option for the number of shares which could be purchased on the date
of the meeting(s) at which such fee(s) are payable. The date of each
meeting at which Board and/or Committee attendance fees are earned by
such a director is the "Automatic Exercise Date".
The exercise price at which shares of Common Stock subject to
outstanding options may be purchased shall be 85% of the fair market
value of the Common Stock on the Exercise Date or Automatic Exercise
Date, as applicable. For purposes of the Director Plan, the "fair
market value" of the Common Stock on a particular day shall be the
mean between the highest and lowest prices at which the Common Stock
is traded on a national securities exchange or, if there is no sale on
such exchange on such date, the mean between the bid and asked prices
on such exchange at the close of the market on such date, or if the
market is closed on such date, the nearest prior trading day.
Fractional shares will not be issued and any amounts remaining
following an automatic exercise using Board and/or Committee
attendance fees shall be retained and be credited to the Participant's
account.
All shares purchased upon the exercise or partial exercise of an
option shall be issued to the Participant as promptly as practicable
following the Exercise Date or Automatic Exercise Date, as applicable,
or, if requested by the Participant, shall be credited to the
Participant's account in NUI Direct, the Company's dividend
reinvestment and stock purchase plan. Options which are not exercised
by the next succeeding Annual Grant Date will expire, and all shares
which are subject to such options will be returned to the number of
shares which are available for future option grants under the Director
Plan.
The Director Plan shall be administered by the Compensation Committee
of the Board of Directors (the "Committee"), which is authorized to
interpret and establish rules and procedures governing the Director
Plan. In the event that the outstanding shares of Common Stock of the
Company have been increased, decreased, changed into or been exchanged
for a different number or kind of shares of Company securities through
reorganization, merger, recapitalization, reclassification, stock
split, reverse stock split or similar transaction, the Committee may
make appropriate adjustments to the exercise price and the number
and/or kind of shares subject to outstanding options and may also make
appropriate adjustments to the number and/or kind of shares which may
be offered under the Director Plan.
Amendments Permitted to the Director Plan Without Shareholder Approval
The Board of Directors may amend, alter or discontinue the Director
Plan at any time, provided that no amendment, alteration or
discontinuation shall be made which would impair the rights of any
holder of an option without the Participant's written consent, or
which, without shareholder approval, would (i) increase the maximum
number of shares of Common Stock with respect to which options may be
awarded (except for permitted adjustments discussed in the immediately
preceding paragraph), (ii) decrease the exercise price for options
(except for permitted adjustments arising as a result of changes in
the outstanding Common Stock), (iii) materially change the class of
persons eligible to participate in the Director Plan, (iv) extend the
duration of the Director Plan, or (v) materially increase in any other
way the benefits accruing to Participants.
The Director Plan shall become effective upon the approval of
shareholders and obtaining all required regulatory approvals and it
shall terminate upon the earlier to occur of termination of the
Director Plan by the Board or the lack of shares available for option
grants.
Tax Consequences of the Director Plan
The options granted to Participants under the Director Plan are
nonqualified options ("NQO") for Federal income tax purposes. No
taxable income is recognized by the optionee at the time an NQO is
granted under the Director Plan. Generally, on the date of exercise of
an NQO, ordinary income is recognized by the optionee in an amount
equal to the difference between the exercise price and the fair market
value of the shares on the date of exercise, and the Company receives
a tax deduction for the same amount. Upon disposition of the shares
acquired, an optionee generally recognizes the appreciation or
depreciation on the shares after the date of exercise as either short-
term or long-term capital gain or loss depending on how long the
shares have been held. The Participant's basis in the shares will
generally be equal to the price paid for the shares plus an amount
equal to the discount on the purchase price included as ordinary
income.
New Plan Benefits Under the Director Plan
The benefits which directors will obtain under the Director Plan in a
given annual period will depend upon the number of shares purchased
upon the exercise of options and the fair market value of the Common
Stock on the date of exercise. Accordingly, it is not possible to
determine the number of shares which will be purchased under the
Director Plan on an annual basis. However, the following table sets
forth the benefits which would have been realized by current non-
employee directors if the Director Plan had been in effect during 1995
and all eligible directors had fully exercised their options.<PAGE>
<PAGE>
Individuals Covered Dollar Value($)(1) Number of Shares
All Non-Employee Directors as
a Group (Eight Individuals) $29,922 12,000
(1) This figure represents the aggregate value of the discount on the
purchase price for shares acquired upon the exercise of options. For
purposes of this table, it is assumed that all non-employee
directors on March 14, 1995 (the date of the first Board of
Directors Meeting following the Annual Meeting of Shareholders) were
granted an option to purchase 1,500 shares of Common Stock at 85% of
the fair market value on the exercise date. It is further assumed
that all options were exercised at an average purchase price of
$14.13, which is 85% of the closing price of $16.625 for the Common
Stock on September 29, 1995.
Approval
Approval of the Director Plan requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. In addition, the
regulatory commissions of the six states in which the Company operates
must also approve the Director Plan, and such approvals have been
requested. The Board believes that the Director Plan is in the best
interests of the Company since it will provide an incentive for the
Company's directors to increase their ownership interest in the
Company.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED THE DIRECTOR PLAN AND
RECOMMENDS SHAREHOLDERS VOTE FOR APPROVAL OF THE DIRECTOR PLAN.
Proxies solicited by management will be voted FOR this proposal unless
a vote against this proposal or abstention is specifically indicated.
PROPOSAL NUMBER FIVE
RATIFICATION OF AUDITORS
The accounting firm of Arthur Andersen LLP, 1345 Avenue of the
Americas, New York, N.Y. 10105 has been selected by the Board of
Directors, upon the recommendation of its Audit Committee, to serve as
independent public accountants for the Company and its subsidiaries
for the fiscal year ending September 30, 1996. This firm has served as
auditors for the Company since 1969. It is expected that
representatives of Arthur Andersen LLP will be present at the Annual
Meeting. They will have the opportunity to make a statement and will
be available to respond to appropriate questions.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AND RECOMMENDS SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THIS APPOINTMENT. Proxies solicited by management will
be voted FOR this proposal unless a vote against this proposal or
abstention is specifically indicated. In the event of an insufficient
number of votes to ratify this appointment, the Board of Directors
will reconsider its decision.
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners. The Company's
management is aware of two shareholders, John Kean and Stewart B.
Kean, who own beneficially more than five percent of the Company's
Common Stock. Information concerning these shareholders and their
Common Stock ownership is set forth below.
Name and Address of Percent
Beneficial Owner Number of Shares of Class
John Kean 509,013(1) 5.5%
550 Route 202-206,
Bedminster, New Jersey 07921
Stewart B. Kean 725,071(2) 7.9%
Box 1, Elizabeth,
New Jersey 07207
(1) Includes 135,389 shares over which John Kean has sole voting and
investment power and 373,624 shares over which Mr. Kean has shared
voting and investment power as a co-trustee under various trusts for
the benefit of members of the Kean family.
(2) Includes (a) 351,447 shares over which Stewart B. Kean has sole
voting and investment power, and (b) 373,624 shares over which Mr.
Kean has shared voting and investment power as a co-trustee under
various trusts for the benefit of members of the Kean family.
Security Ownership of Management. The following table shows, as of
December 31, 1995, the number and percent of the shares of Common
Stock beneficially owned by each director, each executive officer
listed in the Summary Compensation Table and all directors and
executive officers of the Company as a group:
Number of Percent
Title of Class Beneficial Owner Shares(1)(2) of Class
Common Stock Calvin R. Carver 122,855(3) 1.3%
Vera King Farris 1,497 *
James J. Forese 3,342 *
John Kean 509,013(4) 5.5%
John Kean, Jr. 60,160(5) *
Robert W. Kean, Jr. 121,387(6) 1.3%
Bernard S. Lee 4,362 *
R. Van Whisnand 3,342 *
John Winthrop 5,875 *
Frank T. Bahniuk 5,405 *
Lyle C. Motley, Jr. 1,032 *
Richard J. O'Neill 2,867 *
Robert P. Kenney 22,467 *
David P. Vincent 25,014 *
18 directors and
executive officers
as a group 937,843 10.2%
*Less than 1.0%.
(1) Includes the following number of shares of Common Stock issuable
to non-employee directors upon termination of Board service in
payment for their annual Board and Committee chair retainers, as
follows: Calvin R. Carver, James J. Forese and R. Van Whisnand,
3,192 shares each; Robert W. Kean, Jr. and John Winthrop, 2,908
shares each; Bernard S. Lee, 2,362 shares; Vera King Farris, 1,250
shares; and all directors as a group, 19,006 shares; and (b) shares
of restricted stock, as follows: John Kean, Jr., 11,800 shares;
Robert P. Kenney, 10,290 shares; Frank T. Bahniuk, 390 shares; Lyle
C. Motley, Jr., 195 shares; David P. Vincent, 4,780 shares; and all
directors and officers as a group, 32,350 shares. Also includes
shares that are subject to currently exercisable stock options, as
follows: John Kean, Jr., 5,000 shares; David P. Vincent, 4,800
shares; and all directors and officers as a group, 9,800 shares.
(2) Except as noted, each beneficial owner indicated has sole voting
and investment power with respect to the shares indicated next to
such person's name.
(3) Includes 600 shares with respect to which Mr. Carver disclaims
beneficial ownership.
(4) Includes 135,389 shares over which John Kean has sole voting and
investment power and 373,624 shares over which Mr. Kean has shared
voting and investment power as a co-trustee under various trusts for
the benefit of members of the Kean family.
(5) Includes 17,263 shares with respect to which John Kean, Jr. has
shared voting and investment power.
(6) Includes 114,482 shares with respect to which Robert W. Kean, Jr.
has shared voting and investment power.
EXECUTIVE OFFICERS
The following information is provided with respect to each executive
officer of the Company. Officers are elected annually at the first
meeting of the Board of Directors following the Annual Meeting. There
are no arrangements or understandings between any officer and any
other person pursuant to which the officer was selected.
John Kean, Jr., age 38
President and Chief Executive Officer
Since April, 1995 Mr. Kean has served as President and Chief
Executive Officer of the Company. From October, 1994 through March,
1995 he served as President and Chief Operating Officer. From March,
1993 to September, 1994 he served as Executive Vice President of
Elizabethtown Gas Company. Prior thereto, he served as Chief Financial
Officer of the Company. He held the additional position of Executive
Vice President of the Company from January 1992 to September 1994.
Frank T. Bahniuk, age 58
Senior Vice President-Gas Supply
Mr. Bahniuk has served as Senior Vice President of the Company
since August 1994. Prior thereto, he served as Senior Vice President
of Elizabethtown Gas Company.
Michael J. Behan, age 49
Vice President-External Affairs
Mr. Behan has served as Vice President since March 1993, and prior
thereto he served as Assistant Vice President. Mr. Behan is also
President of Natural Gas Services, Inc., a subsidiary of the Company.<PAGE>
Robert P. Kenney, age 61
President and CEO-Northern Division
Mr. Kenney has served as President and Chief Executive Officer of
Elizabethtown Gas Company, which constitutes the Company's Northern
Division, since 1991. He is also Chairman of the Board of Utility
Billing Services, Inc., a subsidiary of the Company.
Stephen M. Liaskos, age 44
Controller
Mr. Liaskos has served as Controller since September, 1995. From
1992 until September, 1995 he served as an independent financial and
accounting consultant and prior thereto he served as Vice President
and Controller of Metallgesellschaft Corp.
Robert F. Lurie, age 38
Treasurer
Mr. Lurie has served as Treasurer since February 1994. Prior
thereto he served as Director of the Office of Public Finance for the
Treasury Department of the State of New Jersey.
Lyle C. Motley, Jr., age 54
President-Southern Division
Mr. Motley has served as President of the Southern Division, which
consists of City Gas Company of Florida and the former Pennsylvania
and Southern Gas Company, since April, 1995. From March, 1992 through
March, 1995 he served as President, and prior thereto as Executive
Vice President, of Pennsylvania and Southern Gas Company, which was
acquired by the Company in April, 1994.
Richard J. O'Neill, age 56
Human Resources and Administrative Officer
Mr. O'Neill has served as Human Resources and Administrative
Officer since October, 1995. From April, 1995 through September, 1995
he served as Senior Vice President, and prior thereto as Group Vice
President, of Elizabethtown Gas Company.
James R. Van Horn, age 39
General Counsel and Secretary
Mr. Van Horn has served as General Counsel and Secretary since
June, 1995. Prior thereto he served as Senior Vice President, General
Counsel and Secretary of Citizens First Bancorp, Inc. and Citizens
First National Bank of New Jersey.
David P. Vincent, age 52
Chief Technology Officer
Mr. Vincent has served as Chief Technology Officer since October,
1995. From April through September, 1995 he served as a Senior Vice
President of Elizabethtown Gas Company. From March, 1993 through
March, 1995 he served as Executive Vice President and Chief Financial
Officer of the Company and prior thereto he served as Executive Vice
President of the Company.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the
"Committee") is comprised of four independent, non-employee
directors. The Committee has the responsibility of making
recommendations to the Board concerning the Company's executive
compensation policies, practices and objectives. The Committee makes
recommendations to the Board concerning base salary levels and cash
bonus awards for the officers of the Company, its divisions and
subsidiaries and it administers the Company's 1988 Stock Plan, making
grants and awards under the Plan to selected key employees in its
discretion. In addition, the Committee is responsible for
administering and making grants and awards under the 1996 Stock Option
and Stock Award Plan (the "1996 Stock Plan"), which is being
presented for shareholder approval at this Annual Meeting.
In discharging its responsibilities, the Committee draws upon various
resources, including but not limited to the varied business
experiences and knowledge of Committee members and other non-employee
directors in the area of executive compensation and the advice of
independent compensation experts. These resources allow the Committee
to stay abreast of current trends and developments in executive
compensation and provide valuable guidance to the Committee in making
decisions and recommendations to the Board of Directors.
The Committee strongly believes that the executive compensation
program should be designed to align the interests of management
closely with the interests of shareholders and to tie compensation
levels to the performance of the Company and the achievement of long-
term and short-term goals and objectives. The Committee also
recognizes the importance of a strong executive compensation program
to attracting and retaining qualified executives. Accordingly, the
program is designed to:
-- Provide short-term incentives for individual and Company
performance through the payment of cash bonuses;
-- Provide long-term incentives for enhancing shareholder
value through equity-based compensation which is earned
upon the achievement of specific Company performance goals;
and
-- Provide the Company with the ability to attract, motivate
and retain key executives who are critical to the success
of the Company through the payment of competitive base
salaries, the opportunity to earn incentive compensation
and through the provision of a competitive benefits
package.
The components of the Company's executive compensation program are
base salary, annual cash bonuses, long-term incentive compensation and
various benefits. Long-term compensation is comprised of grants and
awards under the Company's 1988 Stock Plan (and, subject to
shareholder and regulatory approvals, the 1996 Stock Plan), pursuant
to which the Committee may make stock awards and grants of restricted
stock, stock options and stock appreciation rights. The benefits
provided to executives include medical, retirement and savings plans
which are available to employees generally and supplementary medical
and retirement plans that are not available to employees generally.
Consistent with the Committee's overall objective of aligning the
interests of management with the interests of shareholders and
providing an incentive for the enhancement of shareholder value, the
Committee recommended, and the Board of Directors approved, the 1996
Stock Plan. The 1996 Stock Plan is subject to the approval of
shareholders at this Annual Meeting and such regulatory approvals as
may be necessary (See Proposal Number Two in this Proxy Statement).
Under the 1996 Stock Plan, the Committee has the discretion to
establish specific performance criteria which must be satisfied in
order for grants and awards to be earned. On November 28, 1995 the
Committee made grants of restricted Common Stock to certain key
employees of the Company, including the officers listed in the Summary
Compensation Table (with the exception of John Kean), the terms of
which require that the Company achieve specific goals for earnings per
share growth during each of the next four fiscal years in order for
the recipients to receive all of the shares of Common Stock granted.
Ownership of the shares will vest 50% after two years, 25% after the
third year and 25% after the fourth year, subject to the condition
that the performance objectives have been attained. In order for the
recipients to receive all of the shares granted, the Company must
achieve a 15% growth in earnings per share during each of the next
four fiscal years. A reduced number of the granted shares will be
earned if earnings per share growth is 7% to 14.9%; and if during any
year of the performance period a minimum of 7% earnings per share
growth is not obtained, a certain portion of the granted shares will
be forfeited. The Committee has the authority to make downward
adjustments to these performance goals if it deems such adjustments
appropriate.
In establishing recommendations to be made to the Board of
Directors for increases in base salary and for cash bonuses for the
Company's executives, including the Chief Executive Officer, for
fiscal year 1995, the Committee considered a number of factors,
including various measures of the Company's financial performance,
relative both to historical Company performance and the performance of
other natural gas distribution companies. The Committee also
considered management's achievement of a number of goals during the
year. These factors were considered collectively, with no specific
weight given to each factor. The general conclusion of the Committee
after this evaluation was that on an overall basis salary increases
should be in line with the average level of executive raises
nationwide and cash bonus payments should be significantly reduced
from the levels granted in prior years.
The compensation paid to John Kean, Jr., President and Chief Executive
Officer of the Company, with respect to fiscal year 1995 is set forth
in the Summary Compensation Table. Mr. Kean's salary increased by
approximately 24% in 1995 from the salary he received in 1994. This
increase is the result of the significant increase in responsibility
assumed by Mr. Kean during fiscal year 1995. In October, 1994 he
became President and Chief Operating Officer of the Company and in
April, 1995 he assumed the position of Chief Executive Officer of the
Company. Mr. Kean's base salary remains below the average base salary
of Chief Executive Officers at companies in the natural gas
distribution industry with revenues comparable to the Company's
revenue level. For the second consecutive year Mr. Kean was not
awarded a cash bonus. The Committee believes that this action was
appropriate in light of the financial performance of the Company and
is not a reflection on the individual performance of Mr. Kean. In
order to provide a long-term incentive to Mr. Kean to continue to
improve upon the financial performance of the Company and enhance
shareholder value, the Committee awarded him 15,000 shares of
restricted Common Stock. The restricted stock was granted pursuant to
the 1996 Stock Plan, discussed above, which is being presented for
shareholder approval at this Annual Meeting. The vesting and Company
performance criteria which must be satisfied for Mr. Kean to obtain
ownership of these shares is set forth above. This restricted stock
award is consistent with the Committee's objective of aligning the
interests of management with the interests of shareholders.
The Committee believes that the Company's executive compensation
program is well structured and provides maximum incentive to
executives to continually improve upon the financial performance of
the Company; to attract, retain and motivate key officers; and to
enhance shareholder wealth.
Members of the Compensation Committee
R. Van Whisnand, Chairman
Vera King Farris
James J. Forese
Bernard S. Lee
Performance Graph
The graph below reflects the performance of the Company's Common Stock
during the past five fiscal years and compares that performance with
the performance of a broad market index, the S & P 500, and the
performance of an industry index during that same period of time. The
industry index is an index of natural gas distribution companies
prepared by Edward D. Jones & Co. The chart below tracks the
performance of an investment of $100 on October 1, 1990 and assumes
the reinvestment of dividends.
NUI TOTAL RETURN COMPARISON
[CHART]
1990 1991 1992 1993 1994 1995
NUI 100 130.1 203.3 266.4 179.3 173.4
Gas Utilities 100 118.8 145.2 181.5 162.0 181.0
S&P 500 100 131.0 145.4 164.2 170.2 220.6
Annual Compensation, Long-Term Compensation and All Other Compensation
The following table summarizes the compensation paid to the two
individuals who served as the Company's Chief Executive Officer during
fiscal year 1995, the four other most highly compensated executive
officers and one other officer with respect to whom proxy disclosure
is required.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Annual Compensation Compensation
Name and Restricted
Principal Other Annual Stock All Other
Position(2) Year Salary Bonus Compensation Awards Compensation
($) ($) ($)(1) ($)(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C>
John Kean 1995 $137,550 $ -0- - $ -0- $67,729
Chairman of the Board; 1994 272,450 -0- - 27,985 12,906
Chief Executive Officer 1993 261,325 115,700 - 119,025 14,660
until April, 1995
John Kean, Jr. 1995 $221,200 $ -0- - $243,750 $ 6,389
President and Chief 1994 177,800 -0- - 100,050 6,842
Executive Officer 1993 167,600 58,000 - 72,450 7,019
Robert P. Kenney 1995 $208,025 $ 20,980 - $108,257 $ 9,342
President and CEO- 1994 200,275 -0- - 82,800 7,283
Northern Division 1993 188,500 65,100 - 77,775 7,685
Frank T. Bahniuk 1995 $147,675 $ 12,000 - $ 61,912 $10,589
Senior Vice President- 1994 139,150 23,600 - 5,655 10,097
Gas Supply 1993 132,875 32,200 - 9,765
Richard J. O'Neill 1995 $124,025 $ 12,500 - $ 52,032 $ 8,576
Human Resources and 1994 119,475 20,400 - -0- 8,481
Administrative Officer 1993 114,125 28,140 - -0- 6,176
Lyle C. Motley, Jr. 1995 $117,644 $ 15,000 - $ 78,146 $ 6,643
President-Southern 1994 37,008 -0- - 2,828 2,338
Division
David P. Vincent 1995 $165,400 $ -0- - $ 49,237 $ 8,445
Chief Technology Officer;1994 163,700 -0- - 8,410 6,427
Chief Financial Officer 1993 156,700 $ 51,400 - 59,513 5,562
until April, 1995
<F1>
(1) If no figure appears in the "Other Annual Compensation" column,
the dollar value of perquisites paid to the officer does not exceed
the lesser of $50,000 or 10% of the total of annual salary and
bonus for the officer.
<F2>
(2) John Kean retired from the Company effective April 1, 1995 and
compensation information for Mr. Kean relates to the period from
October 1, 1994 through March 31, 1995. Mr. Motley joined the
Company on April 19, 1994 and compensation information for Mr.
Motley in 1994 relates to the period of April 19-September 30,
1994. Although Mr. Vincent did not serve as an executive officer of
the Company at the end of fiscal year 1995, compensation
information appears in this table because he served as an executive
officer (Chief Financial Officer) during the fiscal year and
because of his level of compensation.
<F3>
(3) The restricted stock awards for 1995 are subject to shareholder
and regulatory approval of the NUI Corporation 1996 Stock Option
and Stock Award Plan. The number of shares of restricted stock
granted to the listed officers is as follows: John Kean, Jr.-15,
000; Robert P. Kenney-6,662; Frank T. Bahniuk-3,810; Richard J.
O'Neill-3,202; Lyle C. Motley, Jr.-4,809; and David P. Vincent-
3,030. These shares will vest over a four year period as follows:
50% after two years, 25% after three years and 25% after four
years. In order for recipients to receive the granted shares,
specific performance goals must be achieved by the Company.
Set forth below is information on current outstanding restricted
stock(not including the 1995 grants) for the listed officers.
Prior to vesting, the recipients receive dividends on these
shares and have voting rights with respect to these shares.
Vesting Schedule
Date of Number of Value on
Name Grant Shares 9/30/95 Shares Date
John Kean, Jr 1/23/92 700 $11,637 700 1/23/96
11/23/92 1,400 23,275 700 11/23/95
700 11/23/96
11/22/93 2,800 46,550 1,400 11/22/95
700 11/22/96
700 11/22/97
11/22/94 6,900 114,712 3,450 11/22/96
1,725 11/22/97
1,725 11/22/98
Robert P.
Kenney 1/23/92 850 $14,131 850 1/23/96
11/23/92 1,700 28,262 850 11/23/95
850 11/23/96
11/22/93 3,200 53,200 1,600 11/23/95
800 11/23/96
800 11/23/97
11/22/94 4,540 75,477 2,270 11/22/96
1,135 11/22/97
1,135 11/22/98
Frank T.
Bahniuk 11/22/94 390 $ 6,484 195 11/22/96
98 11/22/97
97 11/22/98
Lyle C.
Motley, Jr. 11/22/94 195 $ 3,242 98 11/22/96
49 11/22/97
48 11/22/98
David P.
Vincent 1/23/92 650 $10,806 650 1/23/96
11/23/92 1,250 20,781 625 11/23/95
625 11/23/96
11/22/93 2,300 38,237 1,150 11/22/95
575 11/22/96
575 11/22/97
11/22/94 580 9,642 290 11/22/96
145 11/22/97
145 11/22/98
<F4>
(4) For John Kean, this figure also includes $450 in directors fees
received from Elizabethtown Gas Company and $62,426 paid to Mr.
Kean for unused vacation upon his retirement from the Company. Also
includes the following amounts representing the employer match
under qualified savings plans during fiscal year 1995: John Kean-
$2,850; John Kean, Jr.-$4,725; Robert P. Kenney-$4,725; Frank T.
Bahniuk -$4,589; Richard J. O'Neill-$3,902; Lyle C. Motley, Jr.-
$5,882; and David P. Vincent-$4,725. Also includes the following
amounts representing the value of group life insurance premiums
paid during fiscal year 1995; John Kean-$1,404; John Kean, Jr.-
$264; Robert P. Kenney-$2,808; Frank T. Bahniuk-$1,800; Richard J.
O'Neill-$1,800; Lyle C. Motley, Jr.-$761; and David P. Vincent-
$1,152. Includes the following amounts paid to the listed officers
during fiscal year 1995 with respect to Company's medical expense
reimbursement plan, which provides officers with supplemental
medical coverage: John Kean-$599; John Kean, Jr.-$1,400; Robert P.
Kenney-$1,809; Frank T. Bahniuk-$4,200; Richard J. O'Neill-$2,874;
and David P. Vincent-$2,568.
</TABLE>
Options and Stock Appreciation Rights
No options or Stock Appreciation Rights (SARs) were granted during
fiscal year 1995 to any of the officers listed in the Summary
Compensation Table and no outstanding options or SARs were repriced in
the most recent fiscal year. The table set forth below provides
information concerning all currently outstanding stock options held by
officers listed in the Summary Compensation Table.
<TABLE>
Aggregated Option/SAR Exercises in 1995 Fiscal Year
Option and SAR Values as of September 30, 1995
<CAPTION>
Value of
Unexercised
Shares In-the-Money
Acquired Number of Securities Options/SARs
on Value Underlying Unexercised at FY-End
Exercise Realized Options/SARs at FY-End(#) Exercisable/
Name (#) ($) Exercisable/Unexercisable Unexercisable(1)
<S> <C> <C> <C> <C>
John Kean, Jr. - - 5,000/- -
David P. Vincent - - 4,800/- $4,104
<F1>
(1) The market value of the Common Stock as of September 30, 1995 was
$16.625. Mr. Kean has an option to purchase 5,000 shares at a per
share exercise price of $17.625, so these options are not in-the-
money. Mr. Vincent has an option to purchase 4,800 shares at a per
share exercise price of $15.77.
</TABLE>
Retirement Benefit Plans
The executive officers of the Company, other than participants in the
City Gas Company of Florida and the Pennsylvania and Southern Gas
Company Plans, earn retirement benefits that may be payable under
three separate plans: (1) the Company's Retirement Plan, a funded plan
in which more than 70% of the Company's employees are eligible to
participate; (2) the ERISA Excess Benefits Plan, an unfunded plan that
is designed to provide benefits for those participants in the
Retirement Plan for whom benefits are reduced by reason of the
limitations imposed under Section 415 of the Internal Revenue Code of
1986, as amended from time to time (the "Code"); and (3) the
Supplemental Retirement Benefits Plan, an unfunded plan that provides
additional benefits to certain key executive employees, including
those listed in the Summary Compensation Table. While participants in
the Retirement Plan and the ERISA Excess Benefits Plan become vested
in their entitlement to benefits under vesting requirements
established under the Employee Retirement Income Security Act of 1974,
participants in the Supplemental Retirement Benefits Plan are eligible
to receive benefits from the plan only if they reach retirement age
while working for the Company.
The Retirement Plan, which is funded entirely by the Company, provides
that a participant retiring at or after age 65 (or at or after age 62
with at least 25 years of credited service) will receive an annual
retirement benefit equal in amount (when calculated as a life annuity
with two years certain) to 1-1/2% of the participant's final average
compensation (the average of the highest sixty consecutive months'
base salary) multiplied by the number of years of credited service.
Benefits payable to participants in the Retirement Plan may be reduced
by reason of the limitations imposed under Section 415 of the Code.
The ERISA Excess Benefits Plan will pay the difference between the
amount payable to the participant under the Retirement Plan and the
amount the participant would have been paid but for the limitations
imposed under Section 415 of the Code. Benefits under this plan are
subject to the same terms and conditions as the benefits payable to
the participant under the Company's Retirement Plan.
The unfunded Supplemental Retirement Benefits Plan provides that each
eligible employee who reaches retirement age while working for the
Company may receive an annual retirement benefit equal in amount (when
calculated as a life annuity with two years certain) to 2% of the
participant's final average total compensation (the average of the
highest sixty consecutive months' earnings, including cash bonuses
earned) multiplied by the number of years of credited service up to a
maximum of 60%. Benefits otherwise payable under the unfunded
Supplemental Retirement Benefits Plan are reduced by amounts payable
under the Retirement Plan and the ERISA Excess Benefits Plan.
The following table shows the maximum aggregate annual retirement
benefit payable from all three plans at normal retirement age for
various levels of final average compensation and years of service,
assuming payment of benefits in the form of a life annuity with a two
year certain:
Years of Service
Remuneration 10 Years 20 Years 30 Years 40 Years
$ 50,000 $10,000 $ 20,000 $ 30,000 $ 30,000
100,000 20,000 40,000 60,000 60,000
150,000 30,000 60,000 90,000 90,000
200,000 40,000 80,000 120,000 120,000
250,000 50,000 100,000 150,000 150,000
300,000 60,000 120,000 180,000 180,000
350,000 70,000 140,000 210,000 210,000
400,000 80,000 160,000 240,000 240,000
450,000 90,000 180,000 270,000 270,000
Average annual compensation utilized for formula purposes includes
salary and bonus as reported on the Summary Compensation Table. The
benefit amounts shown in the preceding table are not subject to any
deduction for Social Security benefits or other offset amounts. The
number of years of service now credited under the Retirement Plan for
the participants listed in the "Summary Compensation Table" is as
follows: John Kean, Jr., 10 years; Robert P. Kenney, 26 years; Frank T.
Bahniuk, 17 years; Richard J. O'Neill, 25 years; and David P.
Vincent, 9 years. John Kean retired effective April 1, 1995 with 39
years of credited service under the plan; his average annual
compensation for purposes of the plan is $322,415.
City Gas Company of Florida Pension Plan. The non-bargaining-unit
employees of City Gas Company of Florida ("CGF") are eligible to
participate in the CGF Plan which, generally, is the plan that was in
effect when CGF was acquired in 1988. The CGF Plan provides that a
participant retiring at or after age 65 will receive an annual
retirement benefit equal in amount (when calculated as a life annuity)
to 1-1/2% of the participant's final average compensation (the
average of the highest sixty consecutive months' payroll compensation
in the last ten years of the participant's service as reported on
Internal Revenue Service Form W-2) multiplied by the number of years
of credited service. Benefits payable to participants in the CGF Plan
may be reduced by reason of the limitations imposed under Section 415
of the Code.
The following table shows the maximum aggregate annual retirement
benefit payable at normal retirement age for various levels of final
average compensation and years of service under the CGF Plan, assuming
the payment of benefits as a life annuity with two years certain:
Remuneration 10 Years 20 Years 30 Years 40 Years
$ 50,000 $ 6,250 $12,500 $18,750 $25,000
100,000 12,500 25,000 37,500 50,000
150,000 18,750 37,500 56,250 75,000
200,000 18,750 37,500 56,250 75,000
Average annual compensation utilized for formula purposes includes
salary, bonus, the value of restricted stock grants and payments for
unused vacation as reduced by reason of the limitations imposed under
Section 415 of the Code. The benefit amounts shown in the preceding
table are not subject to deduction for Social Security benefits or
other offset amounts. Lyle C. Motley, Jr. became a participant in the
CGF Plan effective January 1, 1996. Prior thereto, he had been a
participant in the Pennsylvania and Southern Gas Company Retirement
Plan, discussed below.
Pennsylvania and Southern Gas Company Employees Retirement Plan-All
employees of Pennsylvania and Southern Gas Company (P&S) are eligible
to participate in the P&S Retirement Plan which, generally, is the
plan that was in effect when P&S was acquired in 1994. The P&S Plan,
which is funded entirely by the Company, provides that a participant
retiring at or after age 65 will receive an annual retirement benefit
equal in amount to 1% of final average compensation (the average of
the highest sixty consecutive months' payroll compensation during the
last ten years of the participant's service) plus 1.55% of the
participant's final average compensation in excess of 50% of Covered
Compensation (defined by the Social Security Administration for
someone reaching Social Security normal retirement age in the year of
termination) multiplied by the number of years of credited service up
to a maximum of thirty-five years. Benefits payable to participants in
the P&S Plan may be reduced by reason of the limitations imposed under
Section 415 of the Code.
The following table shows the maximum aggregate annual retirement
benefit payable at normal retirement age for various levels of final
average compensation and years of service:
Years of Service
Remuneration 10 Years 20 Years 30 Years 40 Years
$ 50,000 $ 7,100 $14,150 $21,250 $24,800
100,000 14,850 29,650 44,500 51,900
150,000 22,600 45,150 67,750 79,050
200,000 22,600 45,150 67,750 79,050
Final annual compensation utilized for formula purposes includes
salary and bonus payments as reduced by reason of the limitations
imposed under Section 415 of the Internal Revenue Code, which limit
the participant's annual average compensation for formula purposes to
$150,000. Lyle C. Motley, Jr. has 14 years of credited service under
the P&S Plan; his average compensation for purposes of the Plan is
$91,648.
Change in Control Agreements
The Company has entered into Change in Control Agreements with certain
officers, including those officers listed in the Summary Compensation
Table (with the exception of John Kean). The purpose of these
Agreements is to provide key management personnel with certain
financial protection in the event of a change in control of the
Company and the subsequent termination of the officer's employment. By
providing this protection, the Company helps to ensure that the
efforts of key employees remain focused on the Company's performance
and the enhancement of shareholder value during rumored, potential or
actual change in control situations.
A covered officer becomes entitled to the payments and benefits
provided for in the Agreement if, within thirty-six months after the
change in control, the Company (or its successor) terminates the
employee other than for cause or as a result of the employee's death
or disability or the employee terminates his or her employment for
Good Reason (as defined in the Agreement). Under the Agreement, the
payments to which a covered officer will be entitled in such a
termination event include a payment not to exceed three times the
officer's annual base salary plus three times the highest incentive
compensation award received by the officer during the preceding
thirty-six months. In addition, the Agreements provide that following
termination of employment the officer will continue to participate in
all employee benefit plans in which the officer was eligible to
participate on the date of termination; all incentive awards not yet
paid will be payable; and the spread between the exercise price and
the higher of the highest bid price during the twelve months preceding
termination or the highest price per share paid in connection with any
change in control will be payable in cash in lieu of stock issuable
upon the exercise of stock options. All Change in Control Agreements,
with the exception of the Agreement with John Kean, Jr., provide that
in the event that any payment or benefit received under the Agreement
would be an "excess parachute payment" (within the meaning of
Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended
from time to time), then the present value of all payments to be
received under the Agreement shall be reduced to an amount which
maximizes payments but does not result in the payment of an excess
parachute payment. The Agreement with John Kean, Jr. provides that if
any payments are subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code as a result of an excess parachute payment,
then the Company (or its successor) shall gross-up the payments to be
made to him so that the net amount shall be equal to the payments
prior to the payment of any excise tax and any income taxes on the
gross-up payment. John Kean is employed as a consultant pursuant to a
Consulting Agreement which provides for him to receive certain
payments and benefits in the event that the agreement is terminated
following a change in control of the Company. The details of this
agreement are discussed under "Compensation of Directors" located
earlier in this Proxy Statement.
Except as set forth above, the Company is not party to any other
employment, change in control or termination agreements.
OTHER BUSINESS
The Board of Directors does not intend to present any other business
at the Annual Meeting, and is not aware of any business to be
presented by others. However, if other matters are properly presented
for a vote, the proxies will be voted upon such matters in accordance
with the judgment of the persons acting under the proxy.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended September 30,
1995 has previously been mailed to shareholders, who are referred
to such report for financial and other information about the Company.
The Company will furnish without charge a copy of its most recent
Annual Report on Form 10-K as filed with the Securities and Exchange
Commission to any beneficial owner of the Company's Common Stock upon
receipt of a written request from such person. Please direct all such
requests to James R. Van Horn, General Counsel and Secretary, 550
Route 202-206, P.O. Box 760, Bedminster, New Jersey 07921-0760.
SHAREHOLDER PROPOSALS
Shareholders are entitled to submit proposals for consideration at the
Company's 1997 Annual Meeting. Shareholders who desire to submit a
proposal to be considered for inclusion in the Proxy Statement
relating to that meeting must satisfy certain informational and stock
ownership requirements established by the Securities and Exchange
Commission and submit such proposal to the Secretary of the Company at
550 Route 202-206, P.O. Box 760, Bedminster, New Jersey 07921-0760 no
later than September 30, 1996.
By Order of the Board of Directors
James R. Van Horn
General Counsel and Secretary
Dated: February 2, 1996
Bedminster, New Jersey
Exhibit A
NUI CORPORATION
1996 STOCK OPTION AND STOCK AWARD PLAN
1. Purpose. The purpose of the NUI Corporation 1996 Stock Option
and Stock Award Plan (the "Plan'') is to maintain the ability of NUI
Corporation (the "Company") and its subsidiaries to attract and
retain highly qualified and experienced employees and directors and to
give such employees and directors a continued proprietary interest in
the success of the Company and its subsidiaries. Pursuant to the Plan,
eligible employees will be provided the opportunity to participate in
the enhancement of shareholder value through the grants of options,
stock appreciation rights, awards of restricted stock, bonuses payable
in stock, or any combination thereof. Eligible directors will
participate through awards of restricted stock as set forth in Section
8. Employees and directors who participate or become eligible to
participate in the Plan from time to time are referred to collectively
herein as "Participants".
The term "subsidiary" as used in the Plan shall mean any present or
future corporation which is or would be a "subsidiary corporation"
of the Company as the term is defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended from time to time (the
"Code").
2. Administration of the Plan. The Plan shall be administered by
a committee (the "Committee") which is appointed from time to time
by the Board of Directors of the Company (the "Board"). The
Committee shall consist of three (3) or more members of the Board,
each of whom shall be a "disinterested person" within the meaning of
Rule 16b-3 of the Securities Exchange Act of 1934 (the "Exchange
Act") and an "outside director" within the meaning of Section
162(m) of the Code. A majority of the members of the Committee shall
constitute a quorum. The majority vote of the members of the Committee
present at a meeting at which a quorum is present shall be required
for the Committee to take action under the Plan.
In administering the Plan, the Committee may adopt rules and
regulations for carrying out the Plan. The interpretation and decision
made by the Committee with regard to any question arising under the
Plan shall be final and conclusive on Participants. The Committee
shall determine the Participants to whom, and the time or times at
which, grants or awards shall be made and the number of shares, stock
appreciation rights or other grants or awards to be made under the
Plan, and the terms and conditions of such options, grants and awards,
including the periods for which options will be outstanding.
Each grant or award made pursuant to the Plan shall be evidenced by an
Option Agreement or Award Agreement (the "Agreement"). No person
shall have any rights under any option, restricted stock or other
award granted under the Plan unless and until the person to whom such
option, restricted stock or other award shall be granted shall have
executed and delivered an Agreement to the Company. The Committee
shall prescribe the form of all Agreements. A fully executed
counterpart of the Agreement shall be provided to both the Company and
the recipient of the grant or award.
3. Shares of Stock Subject to the Plan. The maximum number of shares
of the voting common stock of the Company, no par value (the "Common
Stock), that may be optioned or awarded under the Plan is 250,000
shares, subject to adjustment as provided in Section 14 hereof. No
Participant shall receive, over the term of the Plan, awards of
restricted stock, awards in the form of stock appreciation rights or
options, whether incentive stock options or options other than
incentive stock options, to purchase more than an aggregate of 50,000
shares of Common Stock. Any shares subject to an option which for any
reason expires or is terminated unexercised and any restricted stock
which is forfeited may again be optioned or awarded under the Plan;
provided, however, that forfeited shares shall not be available for
further awards if the Participant has realized the benefits of
ownership from such shares. Shares subject to the Plan may be either
authorized and unissued shares or issued shares repurchased or
otherwise acquired by the Company or its subsidiaries.
4. Eligibility. Key salaried employees, including officers, of the
Company and its divisions and subsidiaries are eligible to be granted
options, restricted stock and other awards under the Plan and to have
their bonuses payable in restricted stock. The employees who shall
receive awards or options under the Plan, and the criteria to be used
in determining the award to be made, shall be determined from time to
time by the Committee, in its sole discretion, from among those
eligible, which may be based upon information furnished to the
Committee by the Company's management; and the Committee shall
determine, in its sole discretion, the number of shares to be covered
by each award and option granted to each employee selected. Certain
non-employee directors of the Company are also eligible to participate
in the Plan in accordance with Section 8.
5. Duration of the Plan. No award or option may be granted under the
Plan after more than ten years from the earlier of the date the Plan
is adopted by the Board or the date the Plan is approved by the
shareholders of the Company, but awards or options theretofore granted
may have exercise or vesting periods which extend beyond that date.
6. Terms and Conditions of Stock Options. Options granted under the
Plan may be either incentive stock options, as defined in Section 422
of the Code, or options other than incentive stock options. Each
option shall be subject to all the applicable provisions of the Plan,
including the following terms and conditions, and to such other terms
and conditions not inconsistent therewith as the Committee shall
determine:
(a) The option price per share shall be determined by the
Committee. However, the option price per share shall not be less
than 100% of the fair market value of a share of Common Stock at
the time the option is granted. For purposes of the Plan, fair
market value shall be the mean between the highest and lowest
prices at which the Common Stock is traded on a national securities
exchange on the relevant date; provided, however, if there is no
sale of the Common Stock on such exchange on such date, fair market
value shall be the mean between the bid and asked prices on such
exchange at the close of the market on such date.
(b) Each option shall be exercisable subject to the attainment
of such performance goals, and/or during such period ending not
later than ten years from the date it was granted, as may be
determined by the Committee and stated in the Agreement. In no
event may an option be exercised more than 10 years from the date
the option was granted.
(c) An option shall not be exercisable with respect to a
fractional share of Common Stock or with respect to the lesser of
fifty (50) shares or the full number of shares then subject to the
option. No fractional shares of Common Stock shall be issued upon
the exercise of an option. If a fractional share of Common Stock
shall become subject to an option by reason of a stock dividend or
otherwise, the optionee shall not be entitled to exercise the
option with respect to such fractional share.
(d) Each option shall state whether it will or will not be
treated as an incentive stock option.
(e) Each option will be deemed exercised on the day written
notice specifying the number of shares to be purchased, accompanied
by payment in full including, if required by law, applicable taxes,
is received by the Company. Payment, except as provided in the
Agreement shall be
(i) in United States dollars by check or bank draft, or
(ii) by tendering to the Company shares of Common Stock
already owned for at least six months by the person exercising
the option, which may include shares received as the result of a
prior exercise of an option, and having a fair market value, as
determined in accordance with Section 6(a), on the date on which
the option is exercised equal to the cash exercise price
applicable to such option, or
(iii) by a combination of United States dollars and shares of
Common Stock valued as aforesaid.
No optionee shall have any rights to dividends or other rights
of a shareholder with respect to shares of Common Stock subject to
his or her option until he or she has given written notice of
exercise of such option and paid in full for such shares.
(f) Notwithstanding the foregoing, the Committee may, in its
sole discretion, include in the grant of an option the right of a
grantee (hereinafter referred to as a ``stock appreciation right'')
to elect, in the manner described below, in lieu of exercising his
or her option for all or a portion of the shares of Common Stock
covered by such option, to relinquish his or her option with
respect to any or all of such shares and to receive from the
Company a payment equal in value to (x) the fair market value, as
determined in accordance with Section 6(a), of a share of Common
Stock on the date of such election, multiplied by the number of
shares as to which the grantee shall have made such election, less
(y) the exercise price for that number of shares of Common Stock
for which the grantee shall have made such election under the terms
of such option. A stock appreciation right shall be exercisable at
the time the tandem option is exercisable, and the "expiration
date" for the stock appreciation right shall be the expiration
date for the tandem option. A grantee who makes such an election
shall receive payment in the sole discretion of the Committee (i)
in cash equal to such excess; or (ii) in the nearest whole number
of shares of Common Stock having an aggregate fair market value, as
determined in accordance with Section 6(a) as of the date of
election, which is not greater than the cash amount calculated in
(ii) above; or (iii) in a combination of (i) and (ii) above. A
stock appreciation right may be exercised only when the amount
described in (x) above exceeds the amount described in (y) above.
An election to exercise stock appreciation rights shall be deemed
to have been made on the day written notice of such election,
addressed to the Committee, is received by the Company. An option
or any portion thereof with respect to which a grantee has elected
to exercise a stock appreciation right shall be surrendered to the
Company and such option shall thereafter remain exercisable
according to its terms only with respect to the number of shares as
to which it would otherwise be exercisable, less the number of
shares with respect to which stock appreciation rights have been
exercised. The grant of a stock appreciation right shall be
evidenced by an Agreement. The Agreement evidencing stock
appreciation rights shall be personal and will provide that the
stock appreciation rights will not be transferable by the grantee
otherwise than by will or the laws of descent and distribution and
that they will be exercisable, during the lifetime of the grantee,
only by him or her.
(g) Except as provided in the applicable Agreement, an option
may be exercised only if at all times during the period beginning
with the date of the granting of the option and ending on the date
of such exercise, the grantee was an employee of either the Company
(or of a division) or subsidiary of the Company or of another
corporation referred to in Section 421(a)(2) of the Code. The
Agreement shall provide whether, and to what extent, an option may
be exercised after termination of continuous employment, but any
such exercise shall in no event be later than the termination date
of the option. If the grantee should die, or become permanently
disabled as determined by the Committee at any time when the
option, or any portion thereof, shall be exercisable, the option
will be exercisable within a period provided for in the Agreement,
by the optionee or person or persons to whom his or her rights
under the option shall have passed by will or by the laws of
descent and distribution, but in no event at a date later than the
termination of the option. The Committee may require medical
evidence of permanent disability, including medical examinations by
physicians selected by it.
(h) Each option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the laws
of descent and distribution as provided in Section 6(g) above.
During the lifetime of an optionee, the option shall be exercisable
only by the optionee. In the event any option is exercised by the
executors, administrators, heirs or distributees of the estate of a
deceased optionee as provided in Section 6(g) above, the Company
shall be under no obligation to issue Common Stock thereunder
unless and until the Company is satisfied that the person or
persons exercising the option are the duly appointed legal
representatives of the deceased optionee's estate or the proper
legatees or distributees thereof.
(i) Notwithstanding any intent to grant incentive stock options,
an option will not be considered an incentive stock option to the
extent that such option, together with any previously granted
incentive stock options, permits the exercise for the first time in
any calendar year the purchase of more than $100,000 in fair market
value of Common Stock (determined at the time of grant).
(j) No incentive stock option shall be granted to an employee
who owns or would be treated as owning by attribution under Code
Section 424(d) immediately before the grant of such option,
directly or indirectly, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company. This
restriction shall not apply if, (i) at the time such incentive
stock option is granted, the option price is at least 110% of the
fair market value of the shares of Common Stock subject to the
option, as determined in accordance with Section 6(a) on the date
of grant, and (ii) the incentive stock option by its terms is not
exercisable after the expiration of five years from the date of its
grant.
(k) An option and any Common Stock received upon the exercise of
an option shall be subject to such other transfer restrictions
and/or legending requirements as are specified in the applicable
Agreement.
7. Terms and Conditions of Restricted Stock Awards. Awards of
restricted stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions,
and to such other terms and conditions not inconsistent therewith, as
the Committee shall determine:
(a) Awards of restricted stock may be in addition to or in lieu
of option grants.
(b) Awards may be conditioned on the attainment of particular
performance goals based on criteria established by the Committee at
the time of each award of restricted stock. During a period set
forth in the Agreement (the "Restriction Period"), the recipient
shall not be permitted to sell, transfer, pledge, or otherwise
encumber the shares of restricted stock; except that such shares
may be used, if the Agreement permits, to pay the option price
pursuant to any option granted under the Plan, provided an equal
number of shares delivered to the optionee shall carry the same
restrictions as the shares so used.
(c) Shares of restricted stock shall become free of all
restrictions if during the Restriction Period, (i) the recipient
dies, (ii) the recipient's employment terminates by reason of
permanent disability, as determined by the Committee, (iii) the
recipient retires after attaining both 59-1/2 years of age and
five years of continuous service with the Company and/or a division
or subsidiary, or (iv) if provided in the Agreement, there is a
"change in control" of the Company (as defined in such
Agreement). The Committee may require medical evidence of permanent
disability, including medical examinations by physicians selected
by it.
(d) Unless and to the extent otherwise provided in the
Agreement, shares of restricted stock shall be forfeited and revert
to the Company upon the recipient's termination of employment
during the Restriction Period for any reason other than death,
permanent disability, as determined by the Committee, retirement
after attaining both 59-1/2 years of age and five years of
continuous service with the Company and/or a subsidiary or
division, or, to the extent provided in the Agreement, a "change
in control" of the Company (as defined in such Agreement), except
to the extent the Committee, in its sole discretion, finds that
such forfeiture might not be in the best interests of the Company
and, therefore, waives all or part of the application of this
provision to the restricted stock held by such recipient.
(e) Stock certificates for restricted stock shall be registered
in the name of the recipient but shall be appropriately legended
and returned to the Company by the recipient, together with a stock
power endorsed in blank by the recipient. The recipient shall be
entitled to vote shares of restricted stock and shall be entitled
to all dividends paid thereon, except that dividends paid in Common
Stock or other property shall also be subject to the same
restrictions.
(f) Restricted stock shall become free of the foregoing
restrictions upon expiration of the applicable Restriction Period
and the Company shall then deliver to the recipient Common Stock
certificates evidencing such stock.
(g) Restricted Stock and any Common Stock received upon the
expiration of the restriction period shall be subject to such other
transfer restrictions and/or legending requirements as are
specified in the applicable Agreement.
8. Terms and Conditions of Deferred Restricted Stock Grants for
Non-Employee Directors.
(a) For purposes of this Plan, a "non-employee director'' is a
member of the Board who is not a full-time employee of the
Company, or one of its or subsidiaries. Non-employee directors
will receive benefits under the Plan only as provided in this
Section 8.
A non-employee director shall receive his or her Board and Committee
chair retainers paid by the Company to its directors in deferred
restricted stock credits rather than cash. Such credits shall not be
funded, but shall exist solely as a deferred restricted stock account
on the books of the Company to reflect the number of shares of Common
Stock (including fractional shares to 5 decimal places) which could
have been purchased from time to time with the earned amount of such
retainer at 100% of fair market value. Fair market value shall be
determined on the first day of each participating director's
directorship for the year with respect to which such retainer is
credited.
Whenever a cash dividend is paid with respect to Common Stock, each
non-employee director's deferred restricted stock account shall be
credited with the number of shares of Common Stock (including
fractional shares to 5 decimal places) which could have been purchased
on the applicable dividend payment date at 100% of fair market value
on such date, based upon the per share cash dividend multiplied by the
number of shares of Common Stock then credited to such director's
account. Any stock dividend shall also be credited to each non-
employee director's deferred restricted stock account (including
fractional shares to 5 decimal places).
(b) Upon termination of his or her directorship for any reason,
the non-employee director (or his or her designated beneficiary)
shall receive the number of whole shares of Common Stock then
credited to his or her account (but not any fractional shares). Any
fractional share credits remaining in the account shall thereupon
be canceled. Such shares shall be restricted in accordance with
this Section 8.
(c) With respect to shares of restricted stock granted
pursuant to this Section 8, the Restriction Period shall end on the
later of (i) the date that such non-employee director ceases to
serve on the Board, or (ii) the date such non-employee director
would otherwise be permitted to sell such restricted stock under
Section 16(b) of the Exchange Act. The Committee shall not modify
the term of the Restriction Period with respect to shares of
restricted stock granted pursuant to this Section 8.
9. Bonuses Payable in Stock. In lieu of cash bonuses otherwise
payable under the Company's or applicable division's or subsidiary's
compensation practices to employees eligible to participate in the
Plan, the Committee, in its sole discretion, may determine that such
bonuses shall be payable in Common Stock or partly in Common Stock and
partly in cash. Such bonuses shall be in consideration of services
previously performed and as an incentive toward future services and
shall consist of shares of Common Stock subject to such terms as the
Committee may determine in its sole discretion. The number of shares
of Common Stock payable in lieu of a bonus otherwise payable shall be
determined by dividing such bonus amount by the fair market value of
one share of Common Stock on the date the bonus is payable, with fair
market value determined as of such date in accordance with Section
6(a).
10. Change in Control. Each Agreement may, in the sole discretion of
the Committee, provide that any or all of the following actions may be
taken upon the occurrence of a change in control (as defined in the
Agreement) with respect to the Company:
(i) acceleration of time periods for purposes of vesting in, or
realizing gain from, or exercise of any outstanding option or stock
appreciation right or shares of restricted stock awarded pursuant
to this Plan;
(ii) offering to purchase any outstanding option or stock
appreciation right or shares of restricted stock made pursuant to
this Plan from the holder for its equivalent cash value, as
determined by the Committee, as of the date of the change in
control; or
(iii) making adjustments or modifications to outstanding options
or stock appreciation rights or with respect to restricted stock as
the Committee deems appropriate to maintain and protect the rights
and interests of the Participants following such change in control,
provided, however, that the exercise period of any option may not
be extended beyond 10 years from the date of grant.
11. Transfer, Leave of Absence. For purposes of the Plan: (a) a
transfer of an employee from the Company to a division or subsidiary
of the Company, whether or not incorporated, or vice versa, or from
one division or subsidiary of the Company to another, and (b) a leave
of absence, duly authorized in writing by the Company or a subsidiary
or division of the Company, shall not be deemed a termination of
employment.
12. Rights of Employees. (a) No person shall have any rights or
claims under the Plan except in accordance with the provisions of the
Plan and each Agreement.
(b) Nothing contained in the Plan and Agreement shall be
deemed to give any employee the right to continued employment by
the Company or its divisions or subsidiaries.
13. Withholding Taxes. The Company shall require a payment from a
Participant to cover applicable withholding for income and employment
taxes upon the happening of any event pursuant to the Plan which
requires such withholding. The Company reserves the right to offset
such tax payment from any funds which may be due the Participant from
the Company or its subsidiaries or divisions or, in its discretion, to
the extent permitted by applicable law, to accept such tax payment
through the delivery of shares of Common Stock owned by the
Participant or by utilizing shares of the Common Stock which were to
be delivered to the Participant pursuant to the Plan, having an
aggregate fair market value, determined as of the date of payment,
equal to the amount of the payment due.
14. Adjustments. In the event of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, exchanges of
shares, spin-offs, liquidations, reclassifications or other similar
changes in the capitalization of the Company, the number of shares of
Common Stock available for grant under this Plan shall be adjusted
appropriately by the Board, and, where deemed appropriate, the number
of shares covered by outstanding stock options and stock appreciation
rights outstanding and the number of shares of restricted stock
outstanding, and the option price of outstanding stock options, shall
be similarly adjusted. If another corporation or other business entity
is acquired by the Company, and the Company has assumed outstanding
employee option grants under a prior existing plan of the acquired
entity, similar adjustments are permitted at the discretion of the
Committee. In the event of any other change affecting the shares of
Common Stock available for awards under the Plan, such adjustment, if
any, as may be deemed equitable by the Committee, shall be made to
preserve the intended benefits of the Plan giving proper effect to
such event.
15. Miscellaneous Provisions.
(a) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any
other segregation of assets to assure the issuance of shares or the
payment of cash upon exercise of any option or stock appreciation
right under the Plan. The expenses of the Plan shall be borne by
the Company.
(b) The Committee may, at any time and from time to time
after the granting of an option or the award of restricted stock or
bonuses payable in Common Stock hereunder, specify such additional
terms, conditions and restrictions with respect to such option or
stock as may be deemed necessary or appropriate to ensure
compliance with any and all applicable laws, including, but not
limited to, the Code, federal and state securities laws and methods
of withholding or providing for the payment of required taxes.
(c) If at any time the Committee shall determine in its
discretion that the listing, registration or qualification of
shares of Common Stock upon any national securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares
of Common Stock hereunder, no option or stock appreciation right
may be exercised or restricted stock or stock bonus may be
transferred in whole or in part unless and until such listing
registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Committee.
(d) By accepting any benefit under the Plan, each
Participant and each person claiming under or through such
Participant shall be conclusively deemed to have indicated his
acceptance and ratification, and consent to, any action taken under
the Plan by the Committee, the Company or the Board.
(e) The Plan shall be governed by and construed in accordance
with the laws of the State of New Jersey.
(f) Committee members exercising their functions under this Plan
are serving as directors of the Company and they shall therefore be
entitled to all rights of indemnification and advancement of
expenses accorded directors of the Company.
16. Limits of Liability.
(a) Any liability of the Company or a subsidiary of the Company
to any Participant with respect to any option or award shall be
based solely upon contractual obligations created by the Plan and
Agreement.
(b) Neither the Company nor a division or subsidiary of the
Company, nor any member of the Committee or the Board, nor any
other person participating in any determination of any question
under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability to any party for
any action taken or not taken in connection with the Plan, except
as may expressly be provided by statute.
17. Amendments and Termination. The Board may, at any time, amend,
alter or discontinue the Plan; provided, however, no amendment,
alteration or discontinuation shall be made which would impair the
rights of any holder of an award of restricted stock, option, stock
appreciation rights or stock bonus theretofore granted, without his or
her written consent, or which, without the approval of the
shareholders would:
(a) except as provided in Section 14, increase the maximum number
of shares of Common Stock which may be issued under the Plan;
(b) except as provided in Section 14, decrease the option price
of an option (and related stock appreciation rights, if any) to
less than 100% of the fair market value (as determined in
accordance with Section 6(a)) of a share of Common Stock on the
date of the granting of the option (and related stock appreciation
rights, if any);
(c) materially change the class of persons eligible to receive an
award of restricted stock or options or stock appreciation rights
under the Plan;
(d) extend the duration of the Plan; or
(e) materially increase in any other way the benefits accruing to
Participants.
18. Duration. The Plan shall be adopted by the Board and approved by
the Company's shareholders and such regulatory bodies as may be
necessary, which approvals must occur within the period ending twelve
months after the date the Plan is adopted. Subject to such approvals,
grants and awards may be made under the Plan between the date of its
adoption and receipt of such approvals. The Plan shall terminate upon
the earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating
the Plan; or
(b) the date all shares of Common Stock subject to the Plan are
purchased according to the Plan's provisions; or
(c) ten years from the date of adoption of the Plan by the Board.
No such termination of the Plan shall adversely affect the rights of
any Participant hereunder and all options or stock appreciation rights
previously granted and restricted stock and stock bonuses awarded
hereunder shall continue in force and in operation after the
termination of the Plan, except as they may be otherwise terminated in
accordance with the terms of the Plan.
19. Other Compensation Plans. The Plan shall not be deemed to
preclude the implementation by the Company or its divisions or
subsidiaries of other compensation plans which may be in effect from
time to time, nor adversely affect any rights of Participants under
any other compensation plans of the Company or its divisions or
subsidiaries.
20. Non-Transferability. No right or interest in any award granted
under the Plan shall be assignable or transferable, except as set
forth in the Plan and required by law, and no right or interest of any
participant in any award shall be liable for, or subject to, any lien,
obligation or liability except as set forth in the Plan or as required
by law.
Exhibit B
NUI CORPORATION EMPLOYEE STOCK PURCHASE PLAN
PURPOSE
1.01. Purpose. The NUI Corporation Employee Stock Purchase Plan (the
"Plan") is intended to provide a method whereby employees of NUI
Corporation, its subsidiary corporations and divisions (hereinafter
collectively referred to, unless the context otherwise requires, as
the "Company") will have an opportunity to acquire a proprietary
interest in the Company through the purchase of shares of the voting
common stock of the Company, no par value (the "Common Stock"). It
is not the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986.
DEFINITIONS
2.01. Base Pay. "Base Pay" shall mean regular earnings excluding
payments for overtime, shift premium, bonuses and other special
payments, commissions and marketing or other incentive payments.
2.02. Board. "Board" shall mean the Board of Directors of NUI
Corporation.
2.03. Committee. "Committee" shall mean the individuals described
in Article XI.
2.04. Employee. "Employee" shall mean any person who is
customarily employed on a full-time or part-time basis by the Company
and is regularly scheduled to work more than 20 hours per week and
whose customary employment is for more than 5 months in any calendar
year.
2.05. Plan Year. A "Plan Year" shall mean the twelve month period
commencing on the date of the implementation of the Plan and each
successive twelve month period.
2.06. Subsidiary Corporation. "Subsidiary Corporation" shall mean
any corporation which at any time (i) has more than 50% in value of
its stock owned directly or indirectly by NUI Corporation and (ii) is
designated as a participating subsidiary in the Plan by the Committee.
ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility. Any Employee who shall have completed one
hundred eighty (180) consecutive days of employment and shall be
employed by the Company on the date his or her participation in the
Plan is to become effective shall be eligible to participate in the
Plan.
3.02. Leave of Absence. For purposes of participation in the Plan, a
person on leave of absence shall be deemed to be an Employee for the
first 180 days of such leave of absence. An Employee's employment
shall be deemed to have terminated at the close of business on the
180th day of a leave of absence unless the Employee shall have
returned to regular full-time or part-time employment (as the case may
be) prior to the close of business on such 180th day.
3.03. Commencement of Participation. An eligible Employee may become
a participant in the Plan either (a) by completing an authorization
for a payroll deduction on the form provided by the Committee and
filing it with the Committee on or before the filing date set by the
Committee, or (b) by making a payment ($100 minimum) to the Company no
later than three (3) business days following the close of the calendar
month with respect to which the payment is being made. Payroll
deductions for a participant shall commence with the first payroll
after his or her authorization for a payroll deduction becomes
effective and shall end on the termination of the Plan or the
participant's earlier termination of participation.
SHARES OF COMMON STOCK
4.01. Shares Offered. The maximum number of shares of Common Stock
which shall be issued under the Plan, subject to adjustment as
provided in Section 12.03, shall be 140,000 shares.
The Plan shall terminate upon the issuance of the maximum number of
shares of Common Stock and as provided in Section 12.04.
DEDUCTIONS AND PAYMENTS
5.01. Amount of Payroll Deduction. At the time a participant files
an authorization for payroll deduction, he or she shall elect to have
deductions made from pay on each payday during the time he or she is a
participant at the rate of a whole number percentage from 1% to 10% of
Base Pay in effect at that date. In the case of a part-time hourly
Employee, such Employee's Base Pay shall be determined by multiplying
such Employee's hourly rate of pay then in effect by the then number
of regularly scheduled hours of work for such Employee.
5.02. Participant's Account. All payroll deductions made for a
participant shall be credited to his or her account under the Plan. A
participant may make optional cash payments of at least $100 into such
account during any month or within three business days following the
end of the month, the total of which payments when aggregated with all
other optional cash and payroll deduction payments at any time during
a Plan Year shall not exceed 10% of his or her current annualized Base
Pay.
5.03. Changes in Payroll Deductions. A participant may discontinue
payroll deductions or change his or her percentage deduction rate no
fewer than 10 business days before the beginning of the calendar month
for which the change is to become effective.
5.04. Leave of Absence. If a participant goes on a leave of absence,
such participant shall have the right to elect no less than 10
business days prior to such leave, on forms supplied by the Committee:
(a) to withdraw the balance in his or her account pursuant to Section
8.01, or (b) to discontinue contributions to the Plan but remain a
participant in the Plan.
GRANTING OF OPTION
6.01. Number of Option Shares. Each participating Employee shall be
deemed to have been granted an option to purchase a maximum number of
shares of Common Stock equal to 10% of the Employee's annualized Base
Pay with respect to each Plan Year, divided by 85% of the market value
of the Common Stock determined as provided in Section 6.02 (an
"Option"). An Employee's Base Pay shall be his or her normal monthly
rate of pay (as in effect on the first day of participation during
such plan year) multiplied by 12, provided that a part time hourly
Employee's Base Pay shall be determined in accordance with Section
5.01.
6.02. Option Price. The Option price of Common Stock purchased with
payroll deductions or optional cash payments made during (and up to
three business days following in the case of optional cash payments)
any calendar month shall be the lower of:
(a) 85% of the mean between the highest and lowest prices at
which the Common Stock is traded on a national securities exchange
on the first business day of the month or, if there is no sale on
such exchange on such date, the mean between the bid and asked
prices on such exchange at the close of the market on such date, or
if the market is closed on such date, the nearest prior trading
day; or
(b) 85% of the mean between the highest and lowest prices at
which the Common Stock is traded on a national securities exchange
on the day on which the Option is exercised, or, if there is no
sale on such exchange on such date, the mean between the bid and
asked prices on such exchange at the close of the market on such
date, or if the market is closed on such date, the nearest prior
trading day.
If the Common Stock is not traded on a national securities exchange on
any of the aforesaid dates for which prices are to be determined, then
the option price shall be 85% of fair market value of the Common Stock
on that date, as determined by the Committee.
EXERCISE OF OPTION
7.01. Automatic Exercise. Unless a participant gives written notice
to the Company as hereinafter provided, his or her Option for the
purchase of stock with payroll deductions and/or optional cash
payments made during or with respect to any calendar month will be
deemed to have been exercised automatically on the last business day
of such calendar month (but in no event prior to the approval of this
Plan by the shareholders of NUI Corporation and such regulatory bodies
as are required) for the purchase of the number of full shares of
Common Stock which the accumulated payroll deductions in his or her
account at that time and optional cash payments will purchase at the
applicable Option price. Any excess remaining in the participant's
account after exercise because of the non-issuance of fractional
shares will be carried in the account to the next month. Any other
excess will be returned to the participant, without interest. If a
participant violates Section 7.04, any excess remaining in his or her
account shall be returned to the participant, without interest.
7.02. Fractional Shares. Fractional shares will not be issued under
the Plan and any amounts which would have been used to purchase
fractional shares and which remain in the participant's account on the
termination of the Plan will be returned to the participant, without
interest.
7.03. Transferability. (a) During the lifetime of a participant, his
or her right to exercise an Option granted under the Plan shall be
exercisable only by such optionee or, if then permitted under Section
16 of the Securities Exchange Act of 1934, as amended, or regulations
thereunder, pursuant to a qualified domestic relations order as
defined in the Internal Revenue Code and regulations thereunder (a
"QDRO") and shall not be assignable or transferable by such optionee
other than by will or the laws of descent and distribution or, it then
permitted by Section 16, pursuant to a QDRO.
(b) Any transfer of Common Stock purchased by the exercise of an
Option granted under the Plan shall comply with all applicable
restrictions and holding periods set forth in Rule 16b-3 promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended
and any other requirements imposed by law.
7.04. Minimum Holding Period. Common Stock purchased by a
participant shall not be transferred by him or her during the period
commencing on the date of purchase and ending six months and one day
thereafter. Any transfer in violation of this Section 7.04 shall cause
the suspension of the participant from the Plan. The participant will
not be permitted to re-enroll in the payroll deduction feature of the
Plan for six months from the violation and will not be permitted to
participate in the optional cash payment feature for the remainder of
the then current Plan Year and the next succeeding Plan Year.
7.05. Delivery of Common Stock. Unless otherwise requested by a
participant, shares of Common Stock credited to a participant will be
maintained in a uncertificated form by the agent designated by the
Company. The Committee shall establish procedures governing this
withdrawal of shares from participants' accounts.
WITHDRAWAL
8.01. In General. A participant may withdraw amounts credited to his
or her account under the Plan which have not theretofore been used to
purchase Common Stock by giving written notice to the Committee at
least 10 business days prior to the last pay day of a month. All of
the cash balance credited to the participant's account will be paid to
him or her promptly after receipt of such notice of withdrawal, no
further payroll deductions will be made from his or her pay during
such month and no cash payment may be made by the participant with
respect to such month.
8.02. Effect on Subsequent Participation. A participant's account
withdrawal pursuant to Section 8.01 will bar him or her from
participating for the three (3) subsequent calendar months. This
Section 8.02 may be amended to reduce this period at the discretion of
the Committee.
8.03. Termination of Employment. Upon termination of the
participant's employment for any reason, including retirement, but
excluding death, any amounts credited to his or her account will be
returned to the participant, without interest.
8.04. Termination of Employment Due to Death. Upon termination of
the participant's employment because of death, his or her beneficiary
(as defined in Section 12.01) shall be entitled to receive the
remaining cash balance credited to the participant's account under the
Plan as of the date of the participant's death, without interest.
8.05. Leave of Absence. A participant while on leave of absence,
subject to the election made by such participant pursuant to Section
5.04, shall continue to be a participant in the Plan. A participant
who has been on leave of absence for more than 180 days and who
therefore is no longer an Employee for purposes of the Plan shall not
be entitled to participate in the Plan after the 180th day of such
leave of absence.
INTEREST
9.01. Payment of Interest. No interest will be paid or allowed on
any money paid into the Plan or credited to the account of any
participant.
PRO-RATING OPTIONS
10.01. Pro-Rating Options. If the total number of shares for which
Options are exercised with respect to the final month of the Plan
exceeds the maximum number of shares available for sale under the
Plan, the Company shall make a pro-rata allocation of any remaining
shares available for delivery and distribution for such month in as
nearly a uniform manner as shall be practicable and as it shall
determine to be equitable, (after first granting preference to options
exercised by payroll withholding) and any balance credited to the
account of each participant under the Plan shall be returned as
promptly as possible.
10.02. Participant's Interest in Option Stock. The participant will
have no interest in stock covered by his or her Option until such
Option has been exercised.
10.03. Registration of Stock. Stock delivered to a participant under
the Plan will be registered in the name of the participant. If at any
time the Company shall determine in its discretion that the listing,
registration or qualification of shares of Common Stock upon any
securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the sale or
purchase of shares of Common Stock hereunder, no Option may be
exercised unless and until such listing registration, qualification,
consent or approval shall have been effected or obtained, or otherwise
provided for, free of any conditions not acceptable to the Company.
10.04. Regulatory Approval and Compliance. The Company shall not be
required to issue any certificate or certificates for Common Stock
upon the exercise of an Option granted under the Plan or to record as
a holder of record of Common Stock the name of the individual
exercising an Option under the Plan or his or her transferee, without
obtaining to the complete satisfaction of the Committee the approval
of all regulatory bodies deemed necessary by the Committee and without
complying, to the Committee's complete satisfaction, with all rules
and regulations under federal, state, or local law deemed applicable
by the Committee.
ADMINISTRATION
11.01. Appointment of Committee. The Plan shall be administered by
the Committee which is appointed from time to time by the Board. The
Committee shall consist of three (3) or more members of the Board,
each of whom shall be a "disinterested person" within the meaning of
Rule 16b-3 of the Securities Exchange Act of 1934 and an " outside
director" within the meaning of Section 162(m) of the Internal
Revenue Code. A majority of the members of the Committee shall
constitute a quorum. A majority vote of the members of the Committee
present at a meeting at which a quorum is present shall be required
for the Committee to take action under the Plan.
11.02. Authority of Committee. Subject to the express provisions
of the Plan, the Committee shall have full authority to interpret and
construe the Plan, to adopt rules and regulations for administering
the Plan, and to make all other determinations deemed necessary or
advisable for administering the Plan. The Committee's determination on
the foregoing matters shall be conclusive.
11.03. Rules Governing the Administration of the Committee. The
Board may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee
may select one of its members as its Chairman and shall hold its
meetings at such times and places and in such manner as it shall deem
advisable. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable, subject to applicable law. Any
decision or determination reduced to writing and signed by a majority
of the members of the Committee shall be as fully effective as if it
had been made by a majority vote at a meeting duly called and held.
The Committee may appoint a secretary and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
MISCELLANEOUS
12.01. Designation of Beneficiary. A participant may file a
written designation of a beneficiary who is to receive any Common
Stock and/or cash remaining in the participant's Plan account
following the participant's death. Such designation of beneficiary may
be changed by the participant at any time by written notice to the
Committee. Upon the death of a participant and upon receipt by the
Committee of proof of identity and existence at the participant's
death of a beneficiary validly designated by him under the Plan, the
Committee shall deliver such Common Stock and/or cash to the
beneficiary. In the event of the death of a participant where there is
no beneficiary validly designated under the Plan who is living at the
time of such participant's death, the Committee shall deliver such
Common Stock and/or cash to the participant's personal representative,
or if no such representative has been appointed (to the knowledge of
the Committee), the Committee in its discretion, may deliver such
Common Stock and/or cash to the spouse or to any one or more
dependents of the participant as the Committee may designate. No
beneficiary, prior to the death of the participant by whom he or she
has been designated, shall acquire any interest in the Common Stock or
cash credited to the participant under the Plan.
12.02. Use of Funds. Prior to exercise of Options, all payroll
deductions and optional cash payments received or held by the Company
under this Plan may be used by the Company for any corporate purpose
and the Company shall not be obligated to segregate such payroll
deductions and optional cash payments.
12.03. Adjustment Upon Changes in Capitalization. (a) If, while
any Options are outstanding, the outstanding shares of Common Stock
have been increased, decreased, changed into, or been exchanged for a
different number or kind of shares of securities of NUI Corporation
through reorganization, merger, recapitalization, reclassification,
stock split, reverse stock split or similar transaction, appropriate
adjustments may be made by the Committee in the number and/or kind of
shares which are subject to purchase under outstanding Options and to
the Option exercise price or prices applicable to such outstanding
Options. In addition, in any such event, the number and/or kind of
shares which may be offered in the offering described in Section 4.01
shall also be appropriately adjusted. No adjustments shall be made for
stock dividends. For the purposes of this section, any distribution of
Common Stock to shareholders in an amount aggregating 5% or more of
the outstanding shares of Common Stock shall be deemed a stock split
and any distributions of Common Stock aggregating less than 5% of the
outstanding shares of Common Stock shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of NUI Corporation, or upon
a reorganization, merger or consolidation of NUI Corporation with one
or more corporations as a result of which NUI Corporation is not the
surviving corporation, or upon a sale of substantially all of its
property or stock to another corporation, or a sale or spin off of a
division or a Subsidiary Corporation, the affected holder of each
Option then outstanding under the Plan will thereafter be entitled to
receive at the next date for the exercise of such Option, for each
share of Common Stock as to which such Option would have been
exercised, as nearly as reasonably may be determined, the cash,
securities and/or property which a holder of one share of the Common
Stock was entitled to receive upon and at the time of such
transaction. The Board and the Committee shall take such steps in
connection with such transactions as the Board and the Committee
respectively shall deem necessary to assure that the provisions of
this Section 12.03 shall thereafter be applicable, as nearly as
reasonably may be determined, in relation to the said cash, securities
and/or property as to which the holder of such Option might thereafter
be entitled to receive.
12.04. Amendment and Termination. The Board shall have complete
power and authority to terminate or amend the Plan; provided, however,
that the Board shall not, without the approval of the shareholders of
the Company (i) increase the maximum number of share of Common Stock
which may be issued under any Offering (except pursuant to Section
12.03); (ii) amend the requirements as to the class of Employees
eligible to purchase Common Stock under the Plan or to permit the
members of the Committee to purchase stock under the Plan. No
termination, modification, or amendment of the Plan may adversely
affect the rights of any participant under an Option without the
consent of all participants.
12.05. Effective Date. The Plan shall become effective as of
February 1, 1996 subject to approval by the required vote of the
holders of the Common Stock at a special or annual meeting of the
shareholders of NUI Corporation held on or before November 27, 1996
and such regulatory approvals as may be required. If the Plan is not
so approved, the Plan shall not become effective and any payroll
withholdings and optional cash payments shall promptly be returned to
the Employees. No Common Stock shall be purchased under the Plan prior
to its having been approved by the Company's shareholders and such
regulators as may be required.
12.06. No Employment Rights. The Plan does not, directly or
indirectly, create in any Employee or class of Employees any right
with respect to continuation or employment by the Company, and it
shall not be deemed to interfere in any way with the Company's right
to terminate, or otherwise modify, an Employee's employment at any
time.
12.07. Effect of Plan. The provisions of the Plan shall, in
accordance with its terms, be binding upon, and inure to the benefit
of, all successors of each Employee participating in the Plan,
including, without limitation, such Employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and
any receiver, trustee in bankruptcy or representative of creditors of
such Employee.
12.08. Indemnification; Limitation of Liability. (a) Committee
members exercising their functions under this Plan are serving as
directors of NUI Corporation and they shall therefore be entitled to
all rights of indemnification and advancement of expenses accorded
directors of NUI Corporation.
(b) NUI Corporation, any Subsidiary Corporation, and any member of
the Committee or the Board, or any other person participating in any
determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall not
have any liability to any party for any action taken or not taken in
connection with the Plan, except as may expressly be provided by
statute.
12.09. Withholding Taxes. The Company shall require a payment
from a participant to cover applicable withholding for income and
employment taxes upon the happening of any event pursuant to the Plan
which requires such withholding. The Company reserve the right to
offset such tax payment from any funds which may be due the
participant from the Company or its subsidiaries or divisions.
12.10. Governing Law. The law of the State of New Jersey will govern
all matters relating to this Plan except to the extent it is
superseded by the laws of the United States.
Exhibit C
NUI CORPORATION
1996 DIRECTOR STOCK PURCHASE PLAN
1. Purpose. The purpose of the NUI Corporation 1996 Director Stock
Purchase Plan (the "Plan") is to promote the interests of NUI
Corporation (the "Company") and its shareholders by enhancing the
ability of the Company to attract and retain the services of
knowledgeable non-employee directors by encouraging such directors to
acquire an increased proprietary interest in the Company.
2. Shares Subject to the Plan. Subject to adjustment as provided in
Section 7, the total number of shares of the voting common stock of
the Company (the "Common Stock") for which options may be granted
under the Plan (each an "Option") shall be 70,000. The Common Stock
available for issuance upon exercise of Options shall be currently
authorized but unissued shares or shares currently held or
subsequently acquired by the Company as treasury shares, including
shares purchased in the open market or in private transactions. If an
Option expires or terminates for any reason without having been
exercised in full, the Common Stock subject to but not delivered under
such Option may become available for the grant of other Options.
3. Administration of the Plan. The Plan shall be administered by the
Compensation Committee of the Company's Board of Directors (the
"Committee"). Subject to the terms of the Plan, the Committee shall
have the power to construe the provisions of the Plan, to determine
all questions arising thereunder, and to adopt and amend such rules
and regulations for administering the Plan as the Committee deems
desirable.
4. Participation in the Plan. Each member of the Company's Board of
Directors (a "Director) who is not otherwise an employee of the
Company or any subsidiary of the Company (an "Eligible Director")
shall be eligible to participate in the Plan.
5. Nonstatutory Stock Options. All Options shall be nonstatutory
Options which are not intended to be qualified under Section 422 of
the Internal Revenue Code of 1986, as amended.
6. Option Terms. Each Option granted to an Eligible Director and the
issuance of shares thereunder shall be subject to the following terms:
6.1. Option Agreements. Each Option shall be evidenced by an
option agreement (an "Agreement") duly executed on behalf of the
Company and by the Eligible Director to whom such Option is granted
and dated as of the applicable date of grant. Each Agreement shall
comply with and be subject to the terms and conditions of the Plan.
Any Agreement may contain such other provisions not inconsistent
with the Plan as may be determined by the Committee.
6.2. Option Grant. An Option to purchase 1,500 shares of
Common Stock shall be automatically granted each year to each
Eligible Director on the date of the first regularly scheduled
meeting of the Board of Directors of the Company following the
annual meeting of shareholders, and to each Eligible Director who
first becomes a director following such date.
6.3. Option Exercise Price. The Option exercise price per
share for an Option shall be eighty five percent (85%) of the Fair
Market Value of the underlying Common Stock on the date the Option
is exercised. ``Fair Market Value'' shall mean the average of the
high and low sales prices per share of the Common Stock traded on a
national securities exchange on the relevant date or, if no sales
were made on such exchange on such date, the mean between the bid
and asked prices on such exchange at the close of the market on
such date, or if the market is closed on such date, the nearest
prior trading day.
6.4. Vesting. One hundred percent (100%) of each Option shall
vest and become nonforfeitable and exercisable on the date on which
the Option is granted.
6.5. Exercise. (a) Any Option shall be exercisable in whole or
in part at any time, or from time to time, during the Option period
by written notice, signed by the person exercising the Option, to
the Company accompanied or followed within three business days by
payment for the Option exercise. The date that the notice is
received by the Secretary of the Company shall be the date of
exercise of the Option, subject to receipt of the Option exercise
price in a timely manner as provided herein. No Option may at any
time be exercised with respect to a fractional share.
(b) An Eligible Director, no later than the date of the first
regularly scheduled meeting of the Board of Directors of the
Company following the annual meeting of shareholders, may
irrevocably authorize the withholding of all his or her board
attendance and/or committee fees for the forthcoming year and the
application of such fees (when earned) to the exercise of the
current year's Option.
6.6. Payment. Payment of the Option exercise price may be made
by certified, cashier's, or personal check or by the application of
fees pursuant to Section 6.5(b).
Any amount paid in exercise of an Option which is in excess of
the number of shares then remaining subject to an Option of the
optionee shall be returned to the optionee, without interest.
6.7. Term of Options. Each Option shall expire on the date of
the first meeting of the Board of Directors following the annual
meeting of shareholders next succedding the date of grant, but
shall be subject to earlier termination if:
(a) the optionee shall cease to serve as a Director for
reason other than retirement or disability (each of which is
defined below), or death, in which event the then outstanding
Options may be exercised only within three months after such
termination or on the stated grant expiration date, whichever is
earlier, unless such termination of service shall result from
removal for cause, in which case all outstanding Options shall
immediately terminate;
(b) the optionee shall cease to serve as a Director because
of retirement or disability, in which event the then-outstanding
Options of such optionee shall expire one year after the date of
such termination or on the stated grant expiration date,
whichever is earlier. The term "by reason of retirement" shall
mean mandatory retirement pursuant to any statute, regulation,
by-law or Board of Directors' policy. ``Disability'' shall mean
the inability to perform the duties of a Director by reason of
any physical or mental impairment;
(c) the optionee shall cease to serve as a Director because
of death, in which event, the then-outstanding Options of such
optionee shall expire one year after the date of death of such
optionee or on the stated grant expiration date, whichever is
earlier. Exercise of a deceased optionee's Options shall be by
his or her personal representative or by a person or persons
whom the optionee had designated in a writing filed with the
Company, or, if no designation had been made, by the person or
persons to whom the optionee's rights have passed by will or the
laws of descent and distribution.
6.8. Transferability. (a) During the lifetime of an optionee,
his or her right to exercise an Option granted under the Plan shall
be exercisable only by such optionee or, if then permitted under
Section 16 of the Securities Exchange Act of 1934, as amended, or
regulations thereunder, pursuant to a qualified domestic relations
order as defined in the Internal Revenue Code and regulations
thereunder (a "QDRO") and shall not be assignable or transferable
by such optionee other than by will or the laws of descent and
distribution or, if then permitted by Section 16, pursuant to a
QDRO.
(b) Any transfer of Common Stock purchased by the exercise of an
Option granted under the Plan shall comply with all applicable
restrictions and holding periods set forth in Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act of
1934, as amended, and any other requirements imposed by law.
6.9. Limitation of Rights.
6.9.1 Limitation as to Shares. Neither an optionee nor an
optionee's successor or successors in interest shall have any
right as a stockholder of the Company with respect to any Common
Stock subject to an Option granted to such person until the
issuance of such shares upon exercise.
6.9.2 Limitation as to Directorship. Neither the Plan, nor
the granting of an Option, nor any other action taken pursuant
to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has
a right to continue as a Director for any period of time or at
any particular rate or compensation.
6.10. Regulatory Approval and Compliance. The Company shall not
be required to issue any certificate or certificates for Common
Stock upon the exercise of an Option granted under the Plan or to
record as a holder of record of Common Stock the name of the
individual exercising an Option under the Plan or his or her
transferee, without obtaining to the complete satisfaction of the
Committee the approval of all regulatory bodies deemed necessary by
the Committee and without complying, to the Committee's complete
satisfaction, with all rules and regulations under federal, state,
or local law deemed applicable by the Committee.
7. Capital Adjustments. In the event of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations,
exchanges of shares, spin-offs, liquidations, reclassifications or
other similar changes in the capitalization of the Company, the number
and class of shares available for grant under the Plan shall be
adjusted proportionately and the number and class of shares covered by
outstanding Options and the option price shall be similarly adjusted.
8. Expenses. All costs and expenses of the adoption and
administration of the Plan shall be borne by the Company and none of
such expenses shall be charged to any optionee.
9. Effective Date and Duration of the Plan. The Plan shall be
effective immediately following approval by the Company's shareholders
and such regulatory bodies as may be necessary for the approval of the
plan; provided, however, that grants and exercises may be made prior
to the effective date if such grants are made subject to shareholder
and regulatory approval of the Plan and no securities are issued prior
to receipt of all such approvals. The Plan shall continue in effect
until there are no longer any Options which may be granted under the
Plan or it is terminated by action of the Board or the Company's
shareholders, but such termination shall not affect the terms of any
then outstanding Options.
10. Indemnification; Limitation of Liability. (a) Committee members
exercising their functions under this Plan are serving as directors of
the Company and they shall therefore be entitled to all rights of
indemnification and advancement of expenses accorded directors of the
Company.
(b) The Company and any member of the Committee or the Board, or any
other person participating in any determination of any question under
the Plan, or in the interpretation, administration or application of
the Plan, shall not have any liability to any party for any action
taken or not taken in connection with the Plan, except as may
expressly be provided by statute.
11. Choice of Law. The validity, interpretation and administration
of the Plan and of any rules, regulations, determinations or decisions
made thereunder, and the rights of any and all persons having or
claiming to have any interest therein or thereunder, shall be
determined in accordance with the laws of the State of New Jersey.
12. Termination and Amendment of the Plan. The Company's Board of
Directors may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion; provided, however, that if required to
qualify the Plan under Rule 16b-3 promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended, no amendment shall be
made more than once every six months that would change the amount,
price or timing of Options granted under the Plan, other than to
comport with changes in the Internal Revenue Code of 1986, as amended,
or the rules and regulations promulgated thereunder, provided,
further, that if required to qualify the Plan under Rule 16b-3, no
amendment that would do any of the following shall be made without the
approval of the Company's shareholders:
(a) materially increase the number of shares that may be issued under
the Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan; or
(c) otherwise materially increase the benefits accruing to
participants under the Plan.<PAGE>
BACK PAGE
(DIRECTIONS TO MEETING)<PAGE>
PROXY CARD (BACK)
Please mark
your votes as
indicated in
this example X
1. ELECTION OF DIRECTORS WITHHELD
FOR FOR ALL
Nominees:
___ ___
Calvin R. Carver
Vera King Farris
John Winthrop
WITHHELD FOR: (Write that nominee's name in the space provided
below).
___________________________________
FOR AGAINST ABSTAIN
2. Approval of 1996 Stock Option and
Stock Award Plan. ___ ___ ___
3. Approval of 1996 Employee Stock
Purchase Plan. ___ ___ ___
4. Approval of 1996 Director Stock
Purchase Plan. ___ ___ ___
5. Ratification of the appointment
of Arthur Andersen LLP, as the
Company's independent public
accountants. ___ ___ ___
6. In their discretion, the Proxies
are authorized to vote upon such
other business as may properly
come before the meeting.
Please mark this box if you plan to attend the Annual Meeting in
person
Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED PREPAID ENVELOPE.
Signature(s) __________________________________ DATE ________________
PROXY CARD (FRONT)
PROXY
NUI Corporation
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John Kean, John Kean, Jr. and James
R. Van Horn, or any one of them, each with full power of substitution,
attorneys, agents and proxies to vote on behalf of the undersigned at
the Annual Meeting of Shareholders of NUI Corporation to be held at
10:30 a.m. on March 12, 1996, or at any adjournment thereof.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is
given, this proxy will be voted FOR with respect to items 1, 2, 3, 4,
and 5.
(Continued, and to be marked, dated and signed, on the other side)<PAGE>
