SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant ___
Check the appropriate box:
X Preliminary proxy statement
--- Definitive Proxy Statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-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
550 Route 202-206, P.O. Box 760
Bedminster, New Jersey 07921-0760
(908) 781-0500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of NUI Corporation will be held at
One Elizabethtown Plaza, Union, New Jersey, on Tuesday, March 12, 1996
at 10:30 A.M. for the following purposes:
1. To elect three (3) directors for three-year terms expiring
in 1999;
2. To ratify the appointment, by the Board of Directors, of
Arthur Andersen LLP as independent public accountants for
the fiscal year ending September 30, 1996;
3. To approve the NUI Corporation 1996 Stock Option and Stock
Award Plan, as described in the accompanying proxy
statement;
4. To approve the NUI Corporation 1996 Employee Stock Purchase
Plan, as described in the accompanying proxy statement;
5. To approve the NUI Corporation 1996 Stock Purchase Plan for
Outside Directors, as described in the accompanying proxy
statement; 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. YOU ARE URGED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE TO ENSURE ITS ARRIVAL IN
TIME FOR THE MEETING. PLEASE USE THE ACCOMPANYING POSTAGE-PAID
ENVELOPE.
Convenient parking is available in the immediate vicinity for
shareholders attending the meeting. Directions to the meeting site are
included on the back cover.
2<PAGE>
NUI CORPORATION
550 Route 202-206, P.O. Box 760
Bedminster, New Jersey 07921-0760
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MARCH 12, 1996
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, at 10:30 a.m.,
local time, 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 6,956 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.
3<PAGE>
In accordance with the Company's By-Laws, the affirmative vote
of the holders of a plurality of the shares of Common Stock
represented in person or by proxy and voting at the Annual Meeting is
required to elect the three directors to the Board of Directors. The
affirmative vote of the holders of a majority of the shares of the
Common Stock represented in person or by proxy and voting at the
Annual Meeting 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 Stock Purchase Plan
for Outside Directors.
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 appointment 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 1996
Stock Purchase Plan for Outside Directors.
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.
Pursuant to action taken by the Board of Directors, the number of
directors has been fixed at 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, has retired from the Board and is not standing for re-
election at the Annual Meeting.
4<PAGE>
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. As
of the date of this Proxy Statement, no such nominations had been
made.
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 (except for four months ended March 1982).
Mr. Carver served as Executive Vice President of the
Company until his retirement in 1986. He is also a
director and Treasurer 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.
5<PAGE>
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. Mr.
Winthrop 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 for 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 Mr. Forese has served
as Executive Vice President and Chief Operating Officer
of Alco Standard Corp. 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. and Lexmark International,
Inc.
Photo of John Kean, age 66
John Kean Current term expires in 1998
Chairman of the Board of Directors
Member of the Executive Committee
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.
6<PAGE>
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 he served as Chief Financial Officer of the
Company.
Photo of Dr. Bernard S. Lee, age 61
Dr. Bernard S. Current term expires in 1998
Lee Member of the Audit and Compensation Committees
Dr. Lee has served as 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, Executive and Investment
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) and prior
thereto he 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. During fiscal
year 1995, the Board of Directors held eight meetings and Board
members attended, in the aggregate, 94% of the total number of
meetings of the Board and Committees of the Board on which the
directors served. 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
7<PAGE>
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 the officers of the Company and
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).
8<PAGE>
Compensation of Directors
The compensation program for directors is closely aligned with
the Company's long-term goals for performance and the enhancement of
shareholder value. Each non-employee director of the Company (with the
exception of John Kean) is paid a retainer fee 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, the accounts of
these non-employee directors are credited with an additional number of
shares equal to the number of shares which could have been purchased
on that date if the directors" shares had actually been issued and the
dividends reinvested at the closing price on such date. The shares
of Common Stock credited to a director under the 1988 Stock Plan are
issued upon the 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 19,005 shares of
Common Stock, an increase of 4,995 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 entered into an 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
9<PAGE>
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 upon the value of such payments and benefits
under the Internal Revenue Code.
Calvin R. Carver currently serves as a director of the Company"s
Elizabethtown Gas Company division and is paid an annual retainer of
$1,000 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 or any of 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
reportable 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
Some 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 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),
10<PAGE>
Institute for Gas Technology (Bernard S. Lee), International Business
Machines Corporation (James J. Forese), KCS Energy, Inc. (John Kean,
Jr.) and Penn-Jersey Pipeline Company (Mr. 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. 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
$2.5 million through 1994, $2.9 million from 1995 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 THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF THE DIRECTOR NOMINEES LISTED ABOVE.
PROPOSAL NUMBER TWO
APPROVAL 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 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 THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THIS APPOINTMENT. In the event of an insufficient
number of votes to ratify this appointment, the Board of Directors
will reconsider its decision.
PROPOSAL NUMBER THREE
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 ). If
11<PAGE>
approved by shareholders (subject to regulatory approval), the 1996
Stock Plan will provide for the granting of stock options, stock
appreciation rights and other stock awards in order to facilitate the
attraction, retention and motivation of key employees to participate
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 composed 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
12<PAGE>
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 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 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 actually been issued to the
director and the dividends on those shares been reinvested. The
number of shares accrued to a director are issued upon the
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 under the 1996 Stock Plan. There are
approximately thirty such officers. The determination of those
employees who shall be eligible to 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 grant and
awards, (iv) extend the duration of the 1996 Stock Plan, or (v)
materially increase in any other way the benefits accruing to
13<PAGE>
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.
14<PAGE>
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 includable 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 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).
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 (with the exception of John
Kean), 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 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
15<PAGE>
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 by the Board of Directors,
subject to shareholder and regulatory approval of the 1996 Stock Plan.
All of these grants are subject to the terms 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
Chairman of the Board
and Former CEO -0- -0-
John Kean, Jr.
President and CEO $243,750 15,000
Robert P. Kenney
President-Northern
Division 108,257 6,662
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
Lyle C. Motley, Jr.
President-Southern
Division 78,146 4,809
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
the holders of a majority of the shares represented at the 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. Broker non-votes will not be treated
16<PAGE>
as shares present or represented and entitled to vote at the Annual
Meeting. 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 employees 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 APPROVED THE 1996 STOCK
PLAN AND RECOMMENDS THAT YOU 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 FOUR
APPROVAL OF 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 of Directors 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 for employees of the
Company and its subsidiaries to purchase shares of the Company"s
Common Stock on a monthly basis through payroll deductions, at a
purchase price equal to the lesser of (i) 85% of the fair market value
at the beginning of the month, or (ii) 85% of the fair market value at
the end of the 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.
Shares will be isued during forty-four monthly purchase periods
commencing in May, 1996. 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
17<PAGE>
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 or any subsidiary 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 designate a percentage of their base salary ranging from one
percent (1%) to a maximum of ten percent (10%) to be withheld from
their pay in order to purchase shares of the Company"s Common Stock.
There will be regular monthly offering periods beginning in May, 1996.
In order to be eligible to participate in a monthly offering period,
enrollment and payroll deduction forms must be filed by a specified
date. Once enrolled, a Participant will continue to be enrolled in
subsequent offering periods at the percentage of pay selected until
the Participant either elects a different rate by filing appropriate
forms or withdraws from the Employee Plan.
As of the last business day of every month, the agent for the
Employee Plan will credit to the account of the Participant the number
of whole shares of Common Stock derived by dividing the total amount
withheld from the Participant"s pay during the month 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. Participants will receive periodic reports, no less
frequently than quarterly, indicating the amount of the Participants"
payroll deductions during the preceding period, the amount of those
deductions applied to purchase shares of Common Stock of the Company,
the purchase price in effect for each monthly purchase period, the
number of shares purchased and the amount of deductions, if any,
carried over to the next period.
A Participant may withdraw payroll deductions 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
18<PAGE>
Participant"s pay during such offering. Withdrawal from an offering
will not affect a Participant"s eligibility to participate in
subsequent offerings.
Participants are required to hold shares acquired under the
Employee Plan for at least six months. A violation of this
requirement will result in a six month suspension of the Participant
from eligibility to participate in the Employee Plan. Participants do
not have the right to assign or transfer their rights to purchase
Common Stock under the Employee Plan.
No employee will be permitted to purchase Common Stock under the
Employee Plan if such employee, immediately after the purchase, would
own stock possessing 5% or more of the combined voting power or value
of all classes of stock of the Company. In addition, no employee will
be able to purchase Common Stock having a value in excess of $25,000
during any one calendar year.
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
subject to a current offering and may also 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 Employee Plan is intended to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code of 1986,
as amended from time to time (the "Code"). Under present law, a
Participant will not be deemed to have received any compensation for
Federal income tax purposes at either the start of the monthly
purchase period or subsequent purchase of Common Stock at the end of
the monthly period.
Participants will recognize taxable income in the year in which
there is a disposition of the Common Stock purchased under the
Employee Plan. If the Common Stock is not disposed of until at least
19<PAGE>
two years after the start date of the monthly purchase period in
which the Common Stock was acquired (a qualifying disposition ), the
Participant will realize ordinary income in the year of the qualifying
disposition equal to the lesser of (i) the amount by which the fair
market value of the Common Stock on the date of the qualifying
disposition exceeds the purchase price, or (ii) 15% of the fair
market value of the Common Stock on the start date of the monthly
purchase period in which the Common Stock was acquired. The amount of
ordinary income will be added to the basis in the stock and any
additional gain recognized upon the qualifying disposition will be a
long-term capital gain. If the fair market value on the date of the
qualifying disposition is less than the purchase price paid for the
stock, no ordinary income will be recognized and any loss recognized
will be a long-term capital loss.
If the Common Stock is disposed of at any time within two years
of the start date of the monthly purchase period during which it was
acquired (a disqualifying disposition), the Participant will recognize
ordinary income in the year of the disqualifying disposition equal to
the amount by which the fair market value of the Common Stock on the
purchase date exceeded the purchase price. The amount of the ordinary
income will be added to the basis in the stock, and any resulting gain
or loss recognized upon the disposition will be a capital gain or
loss. The capital gain or loss will be long-term if the stock has
been held for more than one year.
If the Participant disposes of the Common Stock acquired under
the Employee Plan in a disqualifying disposition, the Company will be
entitled to a deduction for Federal income tax purposes in an amount
equal to the ordinary income recognized by the Participant. The
Company is not entitled to any deduction when the stock is disposed of
in a qualifying disposition. The deductibility of capital losses
realized by Participants upon disposition may be limited by the Code.
Although the Tax Reform Act of 1986 eliminated the special long-term
capital gain deduction so that the entire gain on disposition of stock
acquired under the Employee Plan will be taxed at ordinary income tax
rates, 1990 amendments to the Code have made 28% the maximum tax rate
applicable to net long-term capital gains.
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
the holders of a majority of the shares represented 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. Broker non-votes will not be
treated as shares present or represented and entitled to vote at the
Annual Meeting. The Board of Directors believes that the approval of
20<PAGE>
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 to enhance shareholder value
through improved Company performance.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE EMPLOYEE PLAN
AND RECOMMENDS THAT YOU 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 FIVE
APPROVAL OF 1996 STOCK PURCHASE PLAN
FOR OUTSIDE DIRECTORS
On January 23, 1995 the Company"s Board of Directors unanimously
approved the NUI Corporation 1996 Stock Purchase Plan for Outside
Directors (the "Director Plan"). The Director Plan is designed to
encourage outside 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 outside
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 this 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 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 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
21<PAGE>
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 by payment of
the exercise price for the number of shares to be purchased. The date
upon which the Secretary receives both an exercise notification and
payment of the exercise price 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 the meetings
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 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 the exercise or partial exercise of the option shall be
returned to the Participant, unless the purchase was as the result of
an automatic exercise using Board and/or Committee attendance fees, in
which event all amounts remaining following such an exercise 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 be forfeited, and all
shares which are subject to such forfeited 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
22<PAGE>
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 by the Board
of Directors 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.
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 may be purchased
under the Director Plan on an annual basis. However, the following
table sets forth the benefits which would have been realized by
directors if the Director Plan had been in effect during 1995 and all
eligible directors had fully exercised their options.
Individuals Covered Dollar Value ($)(1) Number of
Shares
All Non-Employee Directors
as a Group (Seven
Individuals) $26,197 10,500
(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
the holders of a majority of the shares represented 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. Broker non-votes will not be
treated as shares present or represented and entitled to vote at the
Annual Meeting. 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 APPROVED THE DIRECTOR PLAN
AND RECOMMENDS THAT YOU 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.
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.
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 709,034 (2) 7.7%
Box 1
Elizabeth, New Jersey
07207
24<PAGE>
(1) Includes 135,389 shares over which Mr. 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) 335,410 shares over which Mr. 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:
Title of Beneficial Number of Percent of
Class Owner Shares (1)(2) 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. 56,025 (6) *
Robert W. Kean, Jr. 121,387 (5) 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 21,102 *
David P. Vincent 27,009 *
18 directors and
executive officers
as a group 951,993 10.3%
* 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 retainers, as follows: Messers. Carver, Forese
and Whisnand, 3,192 shares each; Messrs. Robert Kean and Winthrop,
2,908 shares each; Dr. Lee, 2,362 shares; Dr. Farris, 1,250 shares;
and all directors as a group, 19,005 shares; and (b) shares of
restricted stock, as follows: John Kean, Jr., 7,675 shares, Kenney,
8,925 shares, Vincent, 6,775 shares, and all directors and officers as
a group, 50,005 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 Mr. 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 114,482 shares with respect to which Mr. Kean has shared
voting and investment power.
(6) Includes 17,263 shares with respect to which Mr. Kean shares
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 meting of the Board of Directors following the Annual Meeting of
Shareholders. 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.
Robert P. Kenney, age 61
President - Northern Division
Mr. Kenney has served as President and Chief Executive Officer of
Elizabethtown Gas Company 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 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 general 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
27<PAGE>
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 independent
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 overall
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 personal and Company
performance through the payment of cash bonuses;
* Provide long-term incentives for enhancing shareholder value
through equity-based compensation which is earned only 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 approval, 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 3 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
28<PAGE>
Committee made grants of restricted Common Stock to officers of the
Company, including the officers listed in the Summary Compensation
Table (with the exception of John Kean), 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 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
29<PAGE>
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 to provide 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 borad 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 and Co. The chart below tracks
the performance of an investment of $100 on October 1, 1990 and
assumes the reinvestment of dividends.
Measurement Period Gas S&P 500
(Fiscal Year Covered) NUI Corp. Utilities Index
Measurement Pt. 9/30/90 100.0 100.0 100.0
FYE 9/30/91 130.1 118.8 131.0
FYE 9/30/92 203.3 145.2 145.4
FYE 9/30/93 166.4 181.5 164.2
FYE 9/30/94 179.3 162.0 170.2
FYE 9/30/95 173.4 164.2 220.6
30<PAGE>
Annual Compensation, Long-Term Compensation and All Other Compensation
The following table summarizes the compensation paid to the two
individuals who served as the Company"s Chief Executive Officer during
fiscal year 1995, the four other most highly compensated officers and
one officer who served as an executive officer during the year but was
not an executive officer at the conclusion of the year.
Summary Compensation Table
Other Long
Annual Term
Compen Compen-
sation sation
($)(1)
Annual Compensation Awards
Name and Year Salary Bonus Restrict All
Principal ($) ($) ed Stock Other
Position (2) Award(s) Compen-
($) (3) sation
($) (4)
)
John Kean 1995 $137,550 -0- --- -0-
Chairman of the 1994 272,450 -0- --- $27,985 $67,729
Board; Chief 1993 261,325 115,700 --- 110,025 12,906
Executive
Officer
until April,
1995
John Kean, Jr. 1995 $221,200 -0- --- $243,750 $ 6,389
President and 1994 177,800 -0- --- $100,050 6,842
Chief
Executive 1993 167,600 58,000 --- $ 72,450 7,019
Officer
Robert P. Kenney 1995 $208,025 $20,980 --- $108,257 $ 9,342
President - 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 $10,609
Senior Vice 1994 139,150 23,600 --- 5,655 10,097
President-
Gas Supply 1993 132,875 32,200 --- 9,765
Richard J. 1995 $124,025 $12,000 --- $52,032 $ 8,576
O"Neill
Human Resources 1994 $119,475 20,400 --- -0- 8,481
and
Administrative 1993 114,125 28,140 --- -0- 6,176
Officer
Lyle C. Motley, 1995 117,644 15,000 --- $78,146 $ 6,643
Jr.
President- 1994 37,008 -0- --- 2,828 2,338
Southern
Division
David P. Vincent 1995 $165,400 -0- --- $49,237 $ 8,445
Chief Technology 1994 163,700 -0- --- 59,513 6,427
Officer;
Chief Financial 1993 156,700 $51,400 --- 57,188 5,562
Officer until
April, 1995
(1) If no figure appears in the Other Annual Compensation column,
the dollar value of perquisites paid to each of the named executive
officers does not exceed the lesser of $50,000 or 10% of the total of
annual salary and bonus for the named executive officer.
(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.
(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 named executive officers is as follows: John Kean - 0;, John
Kean, Jr. - 15, 000; Robert P. Kenney - 6,662; Frank T. Bahniuk -
3810; Richard J. O"Neill - 3202; Lyle C. Motley, Jr. - 4,809; and
David P. Vincent - 3030. 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 named executive officers.
Prior to full vesting, the recipients receive dividends on these
shares and have voting rights with respect to these shares.
Name Date of Number of Value on Shares Date
Grant Shares 9/30/95
John Kean -------- --------
John 1/23/92 7,000 $11,637 700 1/23/96
Kean, Jr
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. 1/23/92 850 $14,131 700 1/23/96
Kenney
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. 11/22/94 390 $6,484 195 11/22/96
Bahniuk
98 11/22/97
97 11/22/98
Richard none
J.
O"Neill
Lyle C. 11/22/94 195 $3,242 98 11/22/96
Motley,
Jr. 49 11/22/97
48 11/22/98
David P. 1/23/92 650 $10,806 650 1/23/96
Vincent 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
(4) 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; Frank T. Bahniuk - $4,589, Robert P.
Kenney - $4,725; 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 named executive
33<PAGE>
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. For John Kean, this figure
also includes $450 in directors fees received from Elizabethtown Gas
Company and $62,426 paid to Mr. Kean for unused vacation upon his
retirement from the Company.
Options and Stock Appreciation Rights
No options or Stock Appreciation Rights (SARs) were granted
during fiscal year 1995 to any of the executive officers listed in the
Summary Compensation Table and no outstanding options or SARs were
repriced in the most recent fiscal year.
Aggregated Option/SAR Exercises in 1995 Fiscal Year
Option and SAR Values as of September 30, 1995
Name Shares Value Number of Securities Value of
Acquired Realized Underlying Unexercised Unexercised
on ($) Options/SARs at FY-End In-the-
Exercise (#) Money
(#) Exercisable/Unexercisa Options/ SARs
ble at FY-End
Exercisable /
Unexercisable
(1)
John -- -- 5,000/-- ---
Kean, Jr.
David -- -- 4,800/-- $4,104
P. Vincent
(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.
Long-Term Incentive Plan Awards
No long-term incentive plan awards were granted or paid out in
fiscal year 1995 to any of the executive officers listed in the
Summary Compensation Table.
Retirement Benefit Plans
The executive officers of the Company, other than participants in
theCIty 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 limita-
34<PAGE>
tions 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 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 pursuant to 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 NUI Retirement Plan.
The unfunded Supplemental Retirement Benefits Plan provides that
each eligible employee who reaches retirement age while working for
the Companymay 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
benefits 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
Renumeration 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
35<PAGE>
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 NUI
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, 6 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 $_______.
City Gas Company 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 the
CGF was acquired in 1988. TheCGF Plans, including the CGF Pension Plan
and Trust which is funded entirely by the Company, provide that a
participant retiring at or after age 65 will receive an annual
retirement benefit equal in amount (when calculated as a life annuity
with two years certain) to 1-1/4% 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 are subject to report 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, which as of the
date of this Proxy Statement limit the participant's eligible final
average compensation to $150,000.
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, assuming the election of
retirement allowance payable as a life annuity with two years certain:
Years of Service
10 Years 20 Years 30 Years 40 Years
Remuneration
$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
( P&S ) Retirement Plan, discussed below.
36<PAGE>
Pennsylvania & Southern Pension Plan - The Company also maintains
the Pennsylvania & Southern Gas Company Retirement Plan (the P&S
Plan). 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 subject to Social Security taxes, plus 1.55% of the
participant"s final average compensation which is in excess of this
level, multiplied by years of credited service, up to a maximum of
thirty-five years.
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
10 20 30 40
Remuneration Years Years Years 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
37<PAGE>
Final annual compensation utilized for formula purposes includes
salary and bonus payments and as reduced by reason of the limitations
imposed under Section 415 of the Internal Revenue Code, which as of
the date of this Proxy Statement 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 $______.
Change in Control Agreements
Certain key employees of the Company, including the executives
listed in the Summary Compensation Table (with the exception of John
Kean) have entered into Change in Control Agreements with the Company
which provide for the employees to receive certain payments and
benefits in the event of a change in control of the Company (as
defined in the Agreements) and subsequent termination of employment. A
covered employee 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). The payments to which the
covered employee will be entitled in such a termination event include
a payment equal to either (i) three times the employee"s annual base
salary plus three times the highest incentive compensation award
received by the employee during the preceding thirty-six months, or
(ii) two times the employee"s annual base salary plus two times the
highest incentive award received by the employee during the preceding
twenty-four months. The level at which an employee is covered differs
among the covered officers, but all executives listed in the Summary
Compensation Table, with the exception of John Kean, have Agreements
providing for payments at the three times level described in (i)
above. 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 would be
payable; 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 would 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 an
38<PAGE>
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 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 shares 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
Exhibit A
NUI CORPORATION
1996 STOCK OPTION AND STOCK AWARD PLAN
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").
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
41<PAGE>
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.
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 any 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.
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.
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.
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
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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 pursuant 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,
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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) 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
44<PAGE>
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 representative 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 for 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.
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"
45<PAGE>
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.
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 director's
retainer then 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.
46<PAGE>
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.
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).
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
47<PAGE>
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.
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.
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 an Agreement shall be deemed
to give any employee the right to continued employment by the Company
or its divisions or subsidiaries.
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.
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.
48<PAGE>
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 share or the
payment of cash upon exercise of any option or stock appreciation
right under the Plan. Proceeds from the sale of shares of Common
Stock pursuant to options granted under this Plan shall constitute
general funds of the Company. 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.
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
49<PAGE>
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.
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 written 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.
Duration. The Plan shall be adopted by the Board and
approved by a majority of the Company's shareholders, which approval
must occur within the period ending twelve months after the date the
Plan is adopted. Subject to the approval of the Plan by shareholders,
grants and awards may be made under the Plan between the date of its
adoption and the approval of the Plan by shareholders. 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.
Other Compensation Plans. The Plan shall not be deemed to
preclude the implementation by the Company or its divisions or
50<PAGE>
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.
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.
51<PAGE>
Exhibit B
NUI CORPORATION EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I -- PURPOSE
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
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, as amended (the "Code"). The provisions of the Plan shall be
construed in a manner consistent with the requirements of the Code.
ARTICLE II -- DEFINITIONS
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.
Board.
"Board" shall mean the Board of Directors of NUI
Corporation.
Committee.
"Committee" shall mean the individuals described in Article XI.
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.
Subsidiary Corporation.
"Subsidiary Corporation" shall mean any corporation which at
any time (i) would be a "subsidiary corporation" of NUI Corporation as
that term is defined in Section 424 of the Code and (ii) is designated
as a participating subsidiary in the Plan by the Committee.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
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 offerings under the Plan
which commence on or after such one hundred eighty day period has
concluded.
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.
Restrictions on Participation.
Notwithstanding any provisions of the Plan to the contrary,
no Employee shall be granted an option pursuant to the Plan (an
"Option"):
(a) if immediately after the grant the Employee would own
Common Stock, and/or hold outstanding options (including Options under
the Plan) to purchase Common Stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company
(for purposes of this paragraph, the rules of Section 424(d) of the
Code shall apply in determining stock ownership of an Employee); or
(b) which gives him or her rights to purchase stock under
all Employee stock purchase plans of the Company and any parent or
Subsidiary Corporation to accrue at a rate which exceeds $25,000 in
fair market value of the stock (determined at the time such Option is
granted) for each calendar year in which such Option is outstanding,
all as set forth in Reg. 1.423-2 promulgated under the Code.
Commencement of Participation.
An eligible Employee may become a participant in the Plan
either 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, which date shall be prior<PAGE>
to the Offering Commencement Date for an Offering (as such terms are
defined below). Payroll deductions for a participant shall commence
on the first Offering Commencement Date 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.
ARTICLE IV -- OFFERINGS
Offerings.
The Plan will be implemented by forty-four monthly offerings
of Common Stock (each an "Offering"), beginning on the 1st day of each
month (commencing with May, 1996) in each of the years 1996, 1997,
1998 and 1999, each Offering terminating on the final day of such
month. Each Offering shall be for 3,181 shares of Common Stock, plus
any unissued shares from the prior Offerings. In no event may an
Option granted under the Plan be exercised after 27 months from the
date of grant.
ARTICLE V -- DEDUCTIONS AND PAYMENTS
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 in an Offering
at the rate of a whole number percentage from 1% to 10% of Base Pay in
effect at the Offering Commencement Date of such Offering. In the
case of a part-time hourly Employee, such Employee's Base Pay during
an Offering shall be determined by multiplying such Employee's hourly
rate of pay in effect on the Offering Commencement Date by the number
of regularly scheduled hours of work for such Employee during such
Offering.
Participant's Account.
All payroll deductions made for a participant shall be
credited to his or her account under the Plan.
Changes in Payroll Deductions.
A participant may discontinue participation in the Plan as
provided in Article VIII, but no other change can be made during an
Offering and, specifically, a participant may not alter the payroll
deduction percentage for that Offering.
Leave of Absence.
If a participant goes on a leave of absence, such
participant shall have the right to elect no less than 10 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, (b) to
discontinue contributions to the Plan but remain a participant in the
Plan, or (c) to remain a participant in the Plan during such leave of
absence.
4<PAGE>
ARTICLE VI -- GRANTING OF OPTION
Number of Option Shares.
On the Offering Commencement Date of each Offering, a
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 Base Pay during such Offering divided by 85% of the market value of
the Common Stock determined as provided in Section 6.02. An
Employee's Base Pay during the period of an Offering shall be his or
her normal monthly rate of pay (as in effect on the last day prior to
the applicable Offering Commencement Date) provided that, a part time
hourly Employee's Base Pay shall be determined in accordance with
Section 5.01.
Option Price.
The Option price of Common Stock purchased with payroll
deductions made during any Offering 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 Offering Commencement Date 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 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 listed 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.
ARTICLE VII -- EXERCISE OF OPTION
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 direct payments made during any Offering
will be deemed to have been exercised automatically on the last
business day of each calendar month after the Offering Commencement
Date (but in no event prior to the approval of this Plan by the
shareholders of NUI Corporation and such regulatory bodies as may be
necessary) for the purchase of the number of full shares of Common
Stock which the accumulated payroll deductions and direct payments in
his or her account at that time 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 Offerings. 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.
Fractional Shares.
Fractional shares will not be issued under the Plan and any
accumulated payroll deductions which would have been used to purchase
5<PAGE>
fractional shares and which remain in the participant's account on the
final Offering Termination Date will be returned to the participant,
without interest.
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 of the Securities Exchange Act of
1934, as amended and any other requirements imposed by law.
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 termination of such
participant's Option for the remainder of the then current Offering
and for the next following six (6) Offerings.
Delivery of Common Stock.
As promptly as practicable after the close of each Offering,
the Company will deliver to each participant the certificates
representing Common Stock purchased upon exercise of his or her Option
or evidence that such shares are maintained on behalf of the
participant in book share form with the agent for the Plan.
ARTICLE VIII -- WITHDRAWAL
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, and no
further payroll deductions will be made from his or her pay during
such Offering.
Effect on Subsequent Participation.
A participant's withdrawal from any Offering will bar him or
her from participating in the three (3) subsequent Offerings.
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.
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
6<PAGE>
participant's death, without interest.
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 any Offering commencing after the 180th day of such
leave of absence.
ARTICLE IX -- INTEREST
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.
ARTICLE X -- COMMON STOCK
Maximum Shares.
The maximum number of shares of Common Stock which shall be
issued under the Plan, subject to adjustment as provided in Section
12.04 shall be 3,181 shares in each monthly Offering, not to exceed an
aggregate of 140,000 shares for all Offerings. Shares unissued in an
Offering may be added to the shares offered in any subsequent Offering
until sold. If the total number of shares for which Options are
exercised in any Offering exceeds the maximum number of shares
available for sale under the applicable Offering, the Company shall
make a pro rata allocation of any remaining shares available for
delivery and distribution pursuant to such Offering in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance credited to the account of each participant
under the Plan shall be returned as promptly as possible.
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.
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.
7<PAGE>
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.
ARTICLE XI -- ADMINISTRATION
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 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.
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.
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.
ARTICLE XII -- MISCELLANEOUS
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
8<PAGE>
participant and upon receipt by the Committee of proof of identify 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.
Use of Funds.
Prior to exercise of Options, all payroll deductions
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.
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 on 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 Article IV 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
9<PAGE>
be entitled to receive.
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.
Effective Date.
The Plan shall become effective as of January 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 the approval of
such regulatory bodies as may be necessary. If the Plan is not so
approved, the Plan shall not become effective and any payroll
withholdings 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.
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.
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. 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.
10<PAGE>
Exhibit C
NUI CORPORATION
1996 STOCK PURCHASE PLAN FOR OUTSIDE DIRECTORS
PURPOSE
The purpose of the NUI Corporation 1996 Stock Purchase Plan for
Outside Directors (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 nonemployee directors by encouraging such directors to
acquire an increased proprietary interest in the Company.
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. No shares delivered to the Company in
full or partial payment of an Option purchase price payable pursuant
to Section 6.6 shall become available for the grant of other Options.
11<PAGE>
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.
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.
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.
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.
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
12<PAGE>
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 by payment of the Option exercise. The date that both
such notice and payment are received by the Secretary of the Company
shall be the date of exercise of the Option. 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 his or her board attendance and 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 optioner, without interest.
6.7 Term of Options
Each Option shall expire on the date of the first meeting of the
Board of Dir3ectors following the Annual Meeting of Shareholders next
succeeding 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 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
13<PAGE>
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 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 date of 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
14<PAGE>
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.
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.
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.
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 required;
provided, however, that grants may be made prior to the effective date
if such grants are made subject to 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.
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.
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.
15<PAGE>
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.
16<PAGE>
BACK PAGE
Directions to Meeting
17<PAGE>
PROXY CARD
NUI Corporation
Proxy
______________________________________________________________________
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, 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 on
March 12, 1996 at 10:30 a.m. or any adjournment thereof:
This proxy when property executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction is
made, this proxy will be voted FOR with respect to Items 1, 2, 3, 4,
and 5.
1. ELECTION OF DIRECTORS: Calvin R. Carver, Vera King Farris
and John Winthrop
For all nominees WITHHOLD Instruction: To withhold
listed above AUTHORITY authority to vote for
(except as marked to vote for individual nominee,
to the contrary) all nominees strike line through the
nominee's name.
____ ____
2. TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN & CO. AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
FOR AGAINST ABSTAIN
___ ____ ___
3. APPROVAL OF 1996 STOCK OPTION AND STOCK AWARD PLAN.
FOR AGAINST ABSTAIN
___ ___ __
4. APPROVAL OF 1996 EMPLOYEE STOCK PURCHASE PLAN.
FOR AGAINST ABSTAIN
___ ___ __
5. APPROVAL OF 1996 STOCK PURCHASE PLAN FOR OUTSIDE DIRECTORS.
FOR AGAINST ABSTAIN
____ _____ ____
6. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
WITNESS my hand this
_____ day of _____, 1996. Please Check here if you
(Please date) plan to attend the Annual
Meeting in person ________
____________________________________________
(Signature)
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.
"PLEASE MARK INSIDE BLUE
BOXES SO THAT DATA PROCESSING
EQUIPMENT WILL RECORD YOUR VOTES"
