December 18, 2000
Dear NUI Shareholder:
We are pleased to invite you to attend the Company's 2001 Annual
Meeting of Shareholders, which will be held at 10:30 a.m. on Tuesday,
January 23, 2001 at the Somerset Hills Hotel, 200 Liberty Corner
Road, Warren, New Jersey.
At the Annual Meeting, we will consider the election of three
directors and the appointment of Arthur Andersen LLP as our
independent public accountants for the fiscal year ending September
30, 2001.
We will also review the Company's financial results for fiscal year
2000 and discuss our progress toward achieving our mission of growing
and expanding innovative distribution channels to provide valued
products and services.
Please remember to complete, sign and date the enclosed proxy card
and return it promptly in the postage prepaid envelope provided. You
may also vote by telephone or over the Internet by following the
instructions provided. Your vote is important to us.
We look forward to seeing you on January 23.
Sincerely,
John Kean John Kean, Jr.
Chairman of the Board President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on January 23, 2001 at 10:30 a.m.
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of NUI Corporation will be held at
10:30 a.m. on Tuesday, January 23, 2001, at the Somerset Hills Hotel,
200 Liberty Corner Road, Warren, New Jersey for the following
purposes:
1. To elect three (3) directors for three-year terms expiring in
2004;
2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the fiscal year ending September 30, 2001; and
3. 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 December 11,
2000 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
Chief Administrative Officer,
General Counsel and Secretary
December 18, 2000
Your vote is important. Please complete, sign and date the enclosed
proxy card and return it promptly in the postage prepaid envelope
provided. You may also vote by telephone or over the Internet by
following the instructions provided.
NUI CORPORATION
550 Route 202-206, P.O. Box 760
Bedminster, New Jersey 07921-0760
PROXY STATEMENT
This proxy statement is being furnished to shareholders in connection
with the solicitation by the Board of Directors of NUI Corporation, a
New Jersey corporation (hereinafter referred to as the "Company" or
"NUI") of proxies to be voted at the Annual Meeting of shareholders
to be held on Tuesday, January 23, 2001 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 December 18, 2000.
Record Date, Shareholders Entitled to Vote and Vote Required
Only shareholders of record of the Company's common stock (the
"Common Stock"), no par value, at the close of business on December 11,
2000 are entitled to notice of and to vote at the Annual Meeting.
As of December 11, 2000 there were outstanding 12,979,793 shares of
Common Stock entitled to notice of and to vote at the Annual Meeting.
These shares were held by 5,670 shareholders of record.
The presence of a majority of the outstanding shares of Common Stock,
either in person or by proxy, is necessary to constitute a quorum at
the Annual Meeting. Each holder of Common Stock is entitled to one
vote for each share held. The Company's By-Laws require the
affirmative vote of a plurality of the votes cast at the Annual
Meeting for the election of directors. The affirmative vote of the
majority of the votes cast is required to ratify the appointment of
Arthur Andersen LLP as the Company's independent public accountants.
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 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., Inc. to assist in the solicitation of proxies at a
cost of $6,500 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
and FOR the ratification of Arthur Andersen LLP as independent public
accountants for the fiscal year ending September 30, 2001.
Broker non-votes and abstentions are not treated as votes cast for
purposes of any of the matters to be voted on at the Annual Meeting.
PROPOSAL NUMBER ONE: ELECTION OF DIRECTORS
The By-Laws of the Company provide that the Board of Directors shall
consist of no less than eight nor more than 25 directors. The Company
currently has eight directors. 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. The By-Laws
provide that no individual may be elected a director after having
attained his or her seventy-second birthday, although directors who
reach the age of 72 during a term may continue to serve until the
expiration of the term.
It is the intention of the persons named as proxies to vote in favor
of John Kean, John Kean, Jr. and Bernard S. Lee as directors of the
Company for three-year terms expiring at the 2004 Annual Meeting of
Shareholders or until their successors are elected and shall qualify,
unless otherwise directed by the shareholder on the proxy. Messrs.
Kean and Kean, Jr. and Dr. Lee were last elected to the Board at the
1998 Annual Meeting of Shareholders.
While it is anticipated that the nominees will be able 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 who may
be 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 an individual for election to the Board. No such
nominations have been made. Information concerning these requirements
may be obtained by writing to the Secretary of the Company.
Nominees for Election
Set forth below is information concerning the age, current term,
committee memberships, the period served as a director and business
experience during the past five years with respect to each director
nominee:
John Kean, age 71
Current term expires in 2001
Chairman of the Board of Directors
Member of the Executive and Investment Committees
Mr. Kean has served as a director since 1969. He served as Chief
Executive Officer of the Company from 1969 until his retirement in
April 1995, holding the positions of Chairman of the Board since
October 1994 and President from 1969 until October 1994.
John Kean, Jr., age 43
Current term expires in 2001
President and Chief Executive Officer
Member of the Executive Committee
Mr. Kean has served as a director since 1995. He has served as
President and Chief Executive Officer of the Company since April
1995. From October 1994 through March 1995, he served as President
and Chief Operating Officer. Mr. Kean serves as a trustee for the
Morristown Beard School, Liberty Hall Foundation and Kean University
Foundation. He is also a member of the Board of the American Gas
Association, the United States trade association for the natural gas
industry.
Dr. Bernard S. Lee, age 66
Current term expires in 2001
Member of the Audit and Compensation Committees
Dr. Lee has served as a director since 1992. He was President and
Chief Executive Officer of the Institute of Gas Technology ("IGT"), a
member of IGT Board of Trustees and Executive Committee, as well as
Chairman, M-C Power Corp., a majority-owned subsidiary of IGT, until
his retirement in 1999. Dr. Lee is also a director of Peerless Mfg.
Co. and National Fuel Gas Company.
Continuing Board Members
Set forth below is information concerning the age, current term,
committee memberships, the period served as director and business
experience during the past five years with respect to those members
of the Board of Directors whose current terms of office extend beyond
2001:
Dr. Vera King Farris, age 60
Current term expires in 2002
Member of the Compensation and Investment Committees
Dr. Farris has served as a director of the Company since 1994. She is
President of The Richard Stockton College of New Jersey. She also
serves as a director of Advantica Corporation, Inc. (previously
Flagstar Companies, Inc.) and is a member of the boards of numerous
educational and civic organizations.
James J. Forese, age 64
Current term expires in 2003
Member of the Audit, Compensation and Executive Committees
Mr. Forese has served as a director of the Company since 1978. He has
served as Chairman, CEO and a director of IKON Office Solutions
(office equipment and supply systems) since May 2000. From January
1997 through April 2000, he served as Executive Vice President and
President, International Operations, IKON Office Solutions. From
January 1996 to December 1996, he served as Executive Vice President,
Chief Operating Officer and a director of Alco Standard Corp. (office
equipment and supply systems). From October 1993 through December
1995, he served as General Manager of Customer Financing for
International Business Machines Corporation ("IBM") and as Chairman
of IBM Credit Corporation. Mr. Forese also serves as a director of
American Management Systems, Inc. and Cereva Networks.
J. Russell Hawkins, age 45
Current term expires in 2002
Member of Audit and Compensation Committees
Mr. Hawkins has served as a director of the Company since 1998. He
has served as President, CEO and a director of Paragon Networks, Inc.
(designer and manufacturer of innovative access products for use in
wide area network systems) since September 1996. Prior thereto, he
served as Managing Director of Lucent Technologies (formerly AT&T).
R. Van Whisnand, age 56
Current term expires in 2003
Member of the Compensation, Investment and Executive Committees
Mr. Whisnand has served as a director since 1982. He has served as
Managing Partner of Osprey Partners Investment Management, LLC
(investment management) since September 1998. From March 1995 through
August 1998, he served as principal of Fox Asset Management
(investment management). Mr. Whisnand also serves as a director of
Rumson-Fair Haven Bank.
John Winthrop, age 64
Current term expires in 2002
Member of the Audit, Investment and Executive Committees
Mr. Winthrop has served as a director since 1978. He is President of
John Winthrop & Co., Inc. and a partner of Winthrop Melhado Flynn
(both investment management firms). He also serves as a director of
the American Farmland Trust, the Pioneer Funds and the Palmetto
Project, Charleston, SC.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors holds regular meetings every other month and
special meetings as necessary from time to time. The Board held five
meetings during fiscal year 2000. During the year, total attendance
at Board and Committee meetings was 94%. No member of the Board
attended fewer than 80% of the aggregate of meetings of the Board and
meetings of Committees on which such director served. The Board has
an Executive, Audit, Compensation and Investment Committee and does
not have a Nominating Committee. Information on the Committees of the
Board is set forth below.
The Executive Committee has the authority (with certain exceptions)
to take such actions as the Board of Directors is authorized to take.
The Committee does not hold regularly scheduled meetings, but remains
on call. The Committee held no meetings during fiscal year 2000. The
current members of the Executive Committee are James J. Forese, John
Kean (Chairman), John Kean, Jr., R. Van Whisnand and John Winthrop.
The Audit Committee is responsible for overseeing and monitoring
management as it carries out its responsibility over the Company's
internal controls and financial reporting process. The Committee also
oversees and monitors the independent accountants as they carry out
their responsibility for performing an independent audit of the
Company's financial statements in accordance with generally accepted
auditing standards. Each member of the Committee meets the standards
of independence for Audit Committee members established by the New
York Stock Exchange. For more information on the role and activities
of the Committee, please see "Audit Committee Report" located later
in this proxy statement. The Committee met four times during fiscal
year 2000. The current members of the Audit Committee are James J.
Forese (Chairman), J. Russell Hawkins, 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. The
Committee selects investment managers, establishes guidelines under
which they operate and reviews their performance. The Committee met
three times during fiscal year 2000. The current members of the
Investment Committee are Vera King Farris, John Kean, R. Van Whisnand
and John Winthrop (Chairman).
The Compensation Committee has the responsibility to review and make
recommendations to the Board of Directors regarding the annual
salaries and cash bonuses to be paid to officers of the Company and
its subsidiaries; to review and make recommendations to the Board
concerning the Company's executive compensation policies, practices
and objectives; to administer the Company's 1996 Stock Option and
Stock Award Plan (the "Stock Plan"); to make grants and awards under
the Stock Plan; and to establish vesting and other criteria
applicable to any such grants and awards. The Committee met three
times in fiscal year 2000. 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, J. Russell Hawkins, Bernard S. Lee and
R. Van Whisnand (Chairman).
COMPENSATION OF DIRECTORS
The compensation program for directors is designed to closely align
the interests of directors with the interests of shareholders. Each
non-employee director of the Company (with the exception of John
Kean) is paid a retainer fee in stock, pursuant to the Company's
Stock Plan, that consists of a deferred grant of shares of Common
Stock. The number of shares of Common Stock to be allocated to the
accounts of such non-employee directors is determined by dividing the
annual Board retainer (plus the annual Committee Chair retainer, if
applicable) by the fair market value of the Common Stock on the date
of the annual organization meeting of the Board. Currently, the
annual Board retainer for non-employee directors is $20,000 and the
annual Chair retainer is $3,000. In addition to these shares, the
accounts of non-employee directors are credited on each Common Stock
dividend payment date with that number of additional shares that
could have been purchased on the accrued shares in the account had
the shares been issued and the dividends reinvested. The shares
accrued to a director are issued upon the director's retirement or
other termination of the director's service as a member of the Board.
As of September 30, 2000, the total deferred grants for non-employee
directors provide for the issuance of 38,595 shares of Common Stock.
These shares are issuable as follows: James J. Forese and R. Van
Whisnand, 8,461 shares each; John Winthrop, 7,708 shares; Bernard S.
Lee, 6,804 shares; Vera King Farris, 5,439 shares; and J. Russell
Hawkins, 1,720 shares. In addition to these retainers, non-employee
directors (with the exception of John Kean) are paid $1,000 for
attendance at each regular or special meeting of the Board of
Directors and any Committee thereof.
The Company is party to a Consulting Agreement 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,
2001. Under the Agreement, Mr. Kean provides 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. 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; 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
amounts paid and the benefits provided under the Agreement, Mr. Kean
does not receive any additional compensation for serving on the Board
or Committees of the Board of the Company, its divisions or
subsidiaries. The Agreement will terminate automatically in the event
of Mr. Kean's death and may be terminated by the Company for cause or
if Mr. Kean should become disabled. Mr. Kean may terminate the
Agreement for "Good Reason" (as defined in the Agreement) following a
change in control of the Company, upon the impairment of his health,
or upon thirty days prior written notice. Upon a change in control of
the Company, the Agreement is automatically extended for three years
following such change in control. In addition, if, following a change
in control, the Agreement is terminated by Mr. Kean for Good Reason
or by the Company (or its successor) other than as a result of Mr.
Kean's disability or for cause, Mr. Kean shall be entitled to receive
(i) an amount equal to the amounts which would have otherwise been
paid to him if the Agreement had remained in effect through its term,
(ii) the continuation of benefits through the term of the Agreement,
and (iii) an amount, if necessary, in order to offset the impact of
the application of any excise tax imposed under the Internal Revenue
Code upon the value of such payments and benefits.
The Company has in effect a retirement plan for directors. To be
eligible for retirement benefits under the Plan, a director must have
served as a director for at least ten years, with a minimum of five
years of service as a non-employee of the Company and its
subsidiaries. An eligible participant in the Plan will be paid, upon
retirement at or after age 70, an annual retirement benefit for life
equal to the value of the annual Board retainer in effect at the time
of the director's retirement, subject to a minimum annual benefit of
$8,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Proxy disclosure rules require the Company to report certain
relationships involving the Company in which members of the
Compensation Committee have a direct or indirect material interest.
Also required is disclosure of interlocking relationships among
Compensation Committee members and those executive officers of the
Company, if any, who also serve as members of Compensation Committees
or executive officers at other companies. The purpose of these
requirements is to allow shareholders to assess the independence of
the Company's Compensation Committee members in making executive
compensation decisions and recommendations. While the Company has had
transactions with companies and firms with which certain members of
the Compensation Committee are, or at some point during fiscal year
2000 were, affiliated as an officer and/or director, there are no
such relationships in which members of the Committee have a direct or
indirect material interest. In addition, there are no interlocking
relationships of the nature described above involving members of the
Compensation Committee. The members of the Compensation Committee are
Vera King Farris, James J. Forese, J. Russell Hawkins, Bernard S. Lee
and R. Van Whisnand (Chairman).
TRANSACTIONS WITH MANAGEMENT
Companies and firms with which certain directors are, or during
fiscal year 2000 were, affiliated as an officer and/or director had
transactions in the ordinary course of business with the Company
during fiscal year 2000 and similar transactions are expected to
occur in the future. Except as discussed in the next paragraph, none
of these directors had a direct or indirect material interest in such
transactions. The companies or firms involved in these transactions
and the related directors are: E'Town Corporation and Elizabethtown
Water Company (John Kean), Institute of Gas Technology (John Kean,
Jr. and Bernard S. Lee), and IKON Office Solutions (James J. Forese).
In 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. In April 2000, the lease was amended to increase
the amount of space to be leased by NUI Corporation, as successor to
Elizabethtown Gas Company, to 200,000 square feet. The Joint Venture
participants are Cali Liberty Hall Associates (a New Jersey general
partnership) and a Kean family trust of which John Kean is a trustee.
All negotiations relative to the lease were conducted between NUI
Corporation and Cali Liberty Hall Associates. No person involved with
the Kean family trust participated in such discussions. In accordance
with the amended lease, the annual base rent is approximately $3.2
million from 2000 through 2005, $3.4 million from 2006 through 2010,
$3.6 million from 2011 through 2015, $3.9 million from 2016 through
2020 and $4.2 million from 2021 through 2022.
Family Relationships
John Kean is the father of John Kean, Jr.
The Board of Directors recommends shareholders vote FOR the election
of the director nominees listed above. Proxies solicited by
management will be voted FOR the election of all director nominees
unless contrary voting instructions are indicated.
PROPOSAL NUMBER TWO: RATIFICATION OF AUDITORS
The accounting firm of Arthur Andersen LLP, 1345 Avenue of the
Americas, New York, N.Y. 10105 has been selected by the Board of
Directors, upon the recommendation of its Audit Committee, to serve
as independent public accountants for the Company and its
subsidiaries for the fiscal year ending September 30, 2001. This firm
has served as auditors for the Company since 1969. It is expected
that representatives of Arthur Andersen LLP will be present at the
Annual Meeting. They will have the opportunity to make a statement
and will be available to respond to appropriate questions.
The Board of Directors has unanimously approved the appointment of
Arthur Andersen LLP and recommends shareholders vote FOR the
ratification of this appointment. Proxies solicited by management
will be voted FOR this proposal unless a vote against this proposal
or abstention is specifically indicated. In the event of an
insufficient number of votes to ratify this appointment, the Board of
Directors will reconsider its selection of Arthur Andersen LLP as
independent public accountants.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is comprised
of four independent directors and operates under a written charter
adopted by the Board of Directors (which is attached to this proxy
statement as Exhibit A). The members of the Committee are James J.
Forese (Chair), J. Russell Hawkins, Bernard S. Lee and John Winthrop.
The Committee recommends to the Board of Directors, subject to
shareholder ratification, the selection of the Companys' independent
accountants. Management is responsible for the Company's internal
controls and the financial reporting process. The independent
accountants are responsible for performing an independent audit of
the Company's consolidated financial statements in accordance with
generally accepted auditing standards and for issuing a report
thereon. The Committee's responsibility is to monitor and oversee
these processes. In this context, the Committee has met and held
discussions with management and the independent accountants.
Management represented to the Committee that the Company's
consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Committee has
reviewed and discussed the consolidated financial statements with
management and the independent accountants. The Committee discussed
with the independent accountants matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit
Committees). The Company's independent accountants also provided to
the Committee the written disclosures required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Committee discussed with the independent
accountants that firms' independence.
Based upon the Committee's discussion with management and the
independent accountants, the Committee's review of the representation
of management, and the report of the independent accountants to the
Committee, the Committee recommended that the Board of Directors
include the audited consolidated financial statements in the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended September 30, 2000.
Members of the Audit Committee
James J. Forese, Chairman
J. Russell Hawkins
Bernard S. Lee
John Winthrop
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners. The Company's
management is aware of only the following shareholder who owns
beneficially more than five percent of the Company's Common Stock.
Name and Address of
Beneficial Owner Number of Shares Percent of Class
Fiduciary Trust Company
International 708,612 5.48%
Two World Trade Center
New York, NY 10048
Security Ownership of Management. The following table shows, as of
November 30, 2000, the number of shares and percent of the
outstanding Common Stock beneficially owned by each director and each
executive officer listed in the Summary Compensation Table, and all
directors and executive officers of the Company as a group:
Number of Percent
Title of Class Beneficial Owner Shares (1)(2) of Class
Common Stock A. Mark Abramovic 34,067 *
Michael J. Behan 15,305 *
Vera King Farris 5,898 *
James J. Forese 8,611 *
J. Russell Hawkins 1,721 *
John Kean 431,277 (3) 3.33%
John Kean, Jr. 137,918 1.06%
Bernard S. Lee 15,213 (4) *
Robert F. Lurie 18,225 *
James R. Van Horn 23,427 *
R. Van Whisnand 10,111 *
John Winthrop 19,021 *
12 Directors and
executive officers
as a group 720,794 5.57%
* Less than 1.0%.
(1) Includes (a) the number of shares of Common Stock issuable to
non-employee directors upon termination of board service in payment
for their annual Board and Committee chair retainers, as follows:
James J. Forese and R. Van Whisnand, 8,461 shares each; John
Winthrop, 7,708 shares; Bernard S. Lee, 6,804 shares; Vera King
Farris, 5,439 shares; J. Russell Hawkins, 1,721 shares; and all
directors as a group, 38,595 shares; (b) shares of restricted stock,
as follows: A. Mark Abramovic, 24,017 shares; Michael J. Behan, 9,340
shares; John Kean, Jr., 52,400 shares; Robert F. Lurie, 8,047 shares;
James R. Van Horn, 9,389 shares; and all directors and officers as a
group, 141,788 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 157,407 shares over which John Kean has shared voting
and investment power as a co-trustee under various trusts for the
benefit of members of the Kean family.
(4) Includes 1,000 shares held by Dr. Lee's wife.
EXECUTIVE OFFICERS
The following information is provided with respect to each executive
officer of the Company. Officers are elected annually at the first
meeting of the board of directors following the Annual Meeting. There
are no arrangements or understandings between any officer and any
other person pursuant to which the officer was selected.
John Kean, Jr., age 43
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. Prior thereto, he
served as Executive Vice President of Elizabethtown Gas Company.
A. Mark Abramovic, age 52
Senior Vice President, Chief Operating Officer and Chief Financial
Officer
Mr. Abramovic has served as Senior Vice President and Chief Financial
Officer since September 1997 and as Chief Operating Officer since May
1998. From 1993 to August 1997, he served as Senior Vice President
and Chief Financial Officer of Equitable Resources, Inc.
Michael J. Behan, age 54
Vice President-New Ventures
Mr. Behan has served as Vice President since March 1993. He
also serves as President of NUI Environmental Group, Inc.
and Utility Business Services, Inc.
Robert F. Lurie, age 43
Vice President - Corporate Development and Treasurer
Mr. Lurie has served as Vice President - Corporate
Development since March 1997 and Treasurer since 1994.
James R. Van Horn, age 44
Chief Administrative Officer, General Counsel and Secretary
Mr. Van Horn has served as Chief Administrative Officer since May
1998 and as General Counsel and Secretary as 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee") is comprised of five independent, non-employee
directors. The Committee has the responsibility of making
recommendations to the Board concerning the Company's executive
compensation policies, practices and objectives. The Committee makes
recommendations to the Board concerning base salary levels
and cash bonus awards for the officers of the Company and
its subsidiaries, and it administers the Company's 1996
Stock Option and Stock Award Plan (the "Stock Plan"),
making grants and awards under the Stock Plan to selected
key employees in its discretion.
In discharging its responsibilities, the Committee draws
upon various resources, including but not limited to the
varied business experiences and knowledge of Committee
members and other non-employee directors in the area of
executive compensation and the advice of independent
compensation experts. These resources allow the Committee
to stay abreast of current trends and developments in
executive compensation and provide valuable guidance to the
Committee in making decisions and recommendations to the
Board of Directors.
The Committee strongly believes that the executive
compensation program should be designed to align the
interests of management closely with the interests of
shareholders and to tie compensation levels to the
performance of the Company and the achievement of long-term
and short-term goals and objectives. The Committee also
recognizes the importance of a strong executive
compensation program to attracting and retaining qualified
executives. Accordingly, the program is designed to
provide:
- short-term incentives for individual and Company
performance through the payment of cash bonuses;
- long-term incentives for enhancing shareholder value
through equity-based compensation which is earned upon the
achievement of specific Company performance goals; and
- 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 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 that are available to employees generally,
and supplementary medical and retirement plans that are not
available to employees generally.
In making determinations for long-term performance-based
restricted stock grants, and in establishing
recommendations to be made to the Board of Directors for
increases in base salary and for cash bonuses for the
Company executives, the Committee considers data provided
by independent compensation experts for the purpose of
determining competitive levels of total compensation for
each Company executive. The Committee's objective is to
develop a total compensation program that is competitive in
the marketplace and provides significant incentive to
increase shareholder value. Accordingly, the mix of
compensation for executive officers will generally consist
of:
- a base salary that is within the range for similar
positions in the marketplace;
- cash bonuses which are generally in line with the
competitive midpoint for similar positions in the
marketplace; and
- long-term incentive grants of restricted stock that
are generally above the midpoint for similar positions in
the marketplace.
While the Committee believes it is important to ensure that
total compensation levels for each executive are
competitive, it also believes that the mix of compensation
should be weighted toward variable components that provide
a significant incentive for the achievement of the
Company's financial performance objectives.
In order to further align management's interest with NUI
shareholders, the Board of Directors has implemented the
following recommendations to establish minimum stock
ownership requirements for both officers and directors:
- the Chief Executive Officer must own company Common
Stock with a market value equal to a minimum of four times
his then current base salary;
- other executive officers must own Common Stock with a
market value equal to a minimum of two times their then
current base salary;
- non-executive officers must own Common Stock with a
market value equal to their then current base salary;
- only shares which are owned outright by these officers
will be included in determining their compliance with these
requirements;
- shares of restricted Common Stock that have not
vested, as well as shares that have not yet vested under
NUI's benefit plans, are not included in determining
compliance;
- members of the Board of Directors are required to own
shares of Common Stock with a market value equal to a
minimum of six times the then current value of the Board's
annual retainer (this would be equivalent to $120,000 based
upon the current retainer of $20,000 in a deferred grant of
Common Stock paid to members of the Board); and
- for purposes of determining compliance with this
requirement, shares owned outright by directors will be
combined with any shares credited to their deferred stock
accounts in accordance with the Stock Plan.
These minimum stock ownership requirements were instituted
in 1996 and officers and directors were given six years to
comply. The Committee regularly monitors the progress of
officers and directors toward compliance.
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 made grants of
restricted Common Stock for fiscal year 2000 to certain key
employees of the Company, including the officers listed in
the Summary Compensation Table. The terms of these grants
require the Company to 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 granted
shares of Common Stock. 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. If minimum
performance targets are not met, all shares related to the
applicable performance period are forfeited. The Committee
has the authority to make adjustments to these performance
objectives if it deems such adjustments appropriate.
Despite a warmer-than-normal winter, the Company achieved
earnings per share of $2.07 in fiscal 2000; an increase of
7.3% over earnings per share in fiscal 1999. This increase
in earnings per share, however, fell short of the Company's
goal of achieving a ten percent earnings per share growth.
As a result, shares totaling 27% of the shares of
restricted Common Stock previously granted by the
Committee, that were to vest upon the achievement of
performance goals in fiscal 2000, were forfeited. In total,
17,611 shares of NUI Common Stock, with a market value of
$527,238, were forfeited by the holders of restricted
stock. Of this amount, 8,900 shares of Common Stock, with a
market value of $266,448, were forfeited by those officers
listed in the Summary Compensation Table.
The compensation paid to John Kean, Jr., President and
Chief Executive Officer, with respect to fiscal year 2000
is set forth in the Summary Compensation Table. Mr. Kean's
salary increased by 18.6% in 2000 from the salary he
received in 1999. Because Mr. Kean's salary is
significantly lower than the bottom of the salary range for
similar positions, the Committee has determined it
appropriate to provide Mr. Kean with a series of salary
increases that are intended to bring his salary in line
with the competitive marketplace. The Committee believes
that Mr. Kean's performance in fiscal year 2000 was largely
responsible for the strong financial results achieved by
NUI. Accordingly, Mr. Kean was awarded a cash bonus of
$208,300. As noted above, the Committee strongly believes
in performance-based compensation in order to provide an
incentive to management to create shareholder value. In
order to provide a future long-term incentive for Mr. Kean
to lead the Company to continually improved financial
performance and to enhance shareholder value, the Committee
granted him 20,000 shares of restricted Common Stock, which
is reflected in the Summary Compensation Table. In order
for Mr. Kean to obtain ownership of these shares, certain
vesting and Company performance conditions must be
satisfied. This restricted stock award is consistent with
the Committee's objective of aligning the interests of
management with the interests of shareholders.
The Committee believes that the executive compensation
program is well structured and provides maximum incentive
for executives to continually improve the Company's the
financial performance, as well as 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
J. Russell Hawkins
Bernard S. Lee
Performance Graph
The graph below reflects the performance of the Company's
Common Stock during the past five fiscal years and compares
that performance with the performance of a broad market
index, the S & P 500, and the performance of an industry
index during that same period of time. The industry index
is an index of natural gas distribution companies prepared
by Edward D. Jones & Co. The chart below tracks the
performance of an investment of $100 on October 1, 1995 and
assumes the reinvestment of dividends. As reflected in this
chart, during fiscal year 2000, the total return for NUI
was 26.5%, as compared with a total return of 8% for the
LDC Peer Group and 13.3% for the S&P 500.
NUI TOTAL RETURN COMPARISON
1995 1996 1997 1998 1999 2000
NUI 100.0 120.1 155.2 158.1 177.1 224.1
LDC Peer Group 100.0 121.1 143.0 160.9 171.8 185.6
S&P 500 100.0 120.3 168.9 184.3 235.5 266.8
ANNUAL COMPENSATION, LONG-TERM COMPENSATION AND ALL OTHER
COMPENSATION
The following table summarizes the compensation paid during
fiscal year 2000 to the Company's Chief Executive Officer
and each of the four other most highly compensated
executive officers.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------- ---------------------------
Restricted All Other
Name and Principal Fiscal Salary Bonus Stock Awards Compensation
Position Year ($) ($) ($)(1)(2) ($)(3)
<S> <C> <C> <C> <C> <C>
John Kean, Jr. 2000 $345,000 $208,300 $598,760 $6,624
President and Chief 1999 290,775 210,000 523,120 5,784
Executive Officer 1998 261,175 -- 503,120 6,302
A. Mark Abramovic 2000 $232,500 $132,000 $299,380 $6,180
Senior Vice President 1999 204,250 137,940 235,404 5,742
Chief Operating Officer 1998 190,000 47,500 226,404 6,175
& Chief Financial
Officer
James R. Van Horn 2000 $182,225 $ 92,500 $104,783 $6,407
Chief Administrative 1999 161,850 100,004 91,546 5,723
Officer, General 1998 154,500 39,000 88,046 6,030
Counsel and Secretary
Robert F. Lurie 2000 $160,000 $ 59,500 $ 89,814 $4,800
Vice President 1999 154,775 46,770 78,468 4,643
Corporate Development 1998 146,475 30,280 75,468 4,426
& Treasurer
Michael J. Behan 2000 $159,400 $ 73,100 $104,783 $4,503
Vice President, 1999 152,225 77,950 91,546 4,362
New Ventures 1998 140,175 35,300 88,046 4,763
</TABLE>
--------------
(1) Shares of restricted stock carry a significant risk of
forfeiture. In order to earn all shares, earnings per share
must increase at lease ten percent annually. The number of
shares of restricted stock granted to the listed officers
with respect to fiscal year 2000 is as follows: John Kean,
Jr.: 20,000; A. Mark Abramovic: 10,000; James R. Van Horn:
3,500; Robert F. Lurie: 3,000; and Michael J. Behan: 3,500.
These shares will vest over a four-year period as follows:
50% after two years, 25% after three years and 25% after
four years. The value of the award is based upon the fair
market price of the Common Stock at the date of grant. In
2000, awards were granted on November 27, 2000 and the fair
market price for the Common Stock was $29.938.
(2) Since the Company did not achieve its performance
objectives in fiscal year 2000, shares of previously
granted restricted stock, the vesting of which was
contingent upon meeting these objectives, were forfeited.
The number of shares forfeited by each of the listed
officers is as follows: John Kean, Jr. - 4,726; A. Mark
Abramovic - 1,520; James R. Van Horn - 924; Robert F. Lurie
- 812; and Michael J. Behan - 918.
(3) Represents the employer match under qualified savings
plans during fiscal year 2000.
Set forth below is information on current outstanding
restricted stock for the listed officers as of September
29, 2000. Prior to vesting, the recipients receive
dividends on these shares and have voting rights with
respect to these shares.
<TABLE>
<CAPTION>
Vesting Schedule
Shares Value on -------------------------------
Date of Remaining 9/29/00 2000 Vesting Vesting
Officer Grant To Vest $30.41 Forfeitures Shares Date
<S> <C> <C> <C> <C> <C> <C>
John Kean, Jr. 11/15/96 3,750 $112,654 1,013 2,738 11/25/00
11/24/97 7,500 225,307 1,013 2,738 11/25/00
3,750 11/25/01
11/23/98 20,000 600,820 1,350 8,650 11/25/00
5,000 11/25/01
5,000 11/25/02
11/23/99 20,000 600,820 1,350 8,650 11/25/01
5,000 11/25/01
5,000 11/25/02
A. Mark Abramovic 11/24/97 2,250 $ 67,592 304 821 11/25/00
1,125 11/25/01
11/23/98 9,000 270,369 608 3,892 11/25/00
2,250 11/25/01
2,250 11/25/02
11/23/99 9,000 270,369 608 3,892 11/25/01
2,250 11/25/02
2,250 11/25/03
James R. Van Horn 11/15/96 800 $ 24,033 216 584 11/25/00
11/24/97 1,750 52,572 236 639 11/25/00
875 11/25/01
11/23/98 3,500 105,143 236 1,514 11/23/00
875 11/23/01
875 11/23/02
11/23/99 3,500 105,143 236 1,514 11/25/01
875 11/25/02
875 11/25/03
Robert F. Lurie 11/15/96 750 $ 22,531 203 548 11/25/00
11/24/97 1,500 45,062 203 548 11/25/00
750 11/25/01
11/23/98 3,000 90,123 203 1,297 11/25/00
750 11/25/01
750 11/25/02
11/23/99 3,000 90,123 203 1,297 11/25/01
750 11/25/02
750 11/25/03
Michael J. Behan 11/15/96 825 $ 24,784 223 602 11/25/00
11/24/97 1,650 49,568 223 602 11/25/00
825 11/25/01
11/23/98 3,500 105,144 236 1,514 11/25/00
875 11/25/01
875 11/25/02
11/23/99 3,500 105,144 236 1,514 11/23/01
875 1/23/02
875 1/23/03
</TABLE>
Options and Stock Appreciation Rights
During fiscal year 2000 John Kean, Jr. exercised his option to
purchase 5,000 shares at a per share exercise price of $17.625. No
Stock Appreciation Rights (SARs) were granted during fiscal year 2000
to any of the officers listed in the Summary Compensation Table and
no outstanding options or SARs were repriced in the most recent
fiscal year. There are no currently outstanding stock options or
SARs.
<TABLE>
Aggregated Option/SAR Exercises in 2000 Fiscal Year
Option and SAR Values as of September 30, 2000
<CAPTION>
Value of
Unexercised
Acquired Number of Securities In-the-Money
on Value Underlying Unexercised at FY-End
Exercise Realized Options/SAFs at FY-End (#) Exercisable (1)
Name (#) ($) Exercisable/Unexercisable Unexercisable (1)
<S> <C> <C> <C> <C>
John Kean, Jr. 5,000 $43,125 0/0 0/0
</TABLE>
Retirement Benefit Plans
The executive officers of the Company earn retirement
benefits that may be payable under three separate plans:
(1) the Company's Retirement Plan, a funded plan in which
more than 70% of the Company's employees are eligible to
participate; (2) the ERISA Excess Benefits Plan, an
unfunded plan that is designed to provide benefits for
those participants in the Retirement Plan for whom benefits
are reduced by reason of the limitations imposed under
Section 415 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"); and (3) the
Supplemental Retirement Benefits Plan, an unfunded plan
that provides additional benefits to certain key executive
employees, including those listed in the Summary
Compensation Table. While participants in the Retirement
Plan and the ERISA Excess Benefits Plan become vested in
their entitlement to benefits under vesting requirements
established under the Employee Retirement Income Security
Act of 1974, participants in the Supplemental Retirement
Benefits Plan are eligible to receive benefits from the
plan only if they reach retirement age while working for
the Company.
The Retirement Plan, which is funded entirely by the
Company, provides that a participant retiring at or after
age 65 (or at or after age 62 with at least 25 years of
credited service) will receive an annual retirement benefit
equal in amount (when calculated as a life annuity with two
years certain) to 1-1/2% of the participant's final average
compensation (the average of the highest sixty consecutive
months' base salary) multiplied by the number of years of
credited service. Benefits payable to participants in the
Retirement Plan may be reduced by reason of the limitations
imposed under Section 415 of the Code. The ERISA Excess
Benefits Plan will pay the difference between the amount
payable to the participant under the Retirement Plan and
the amount the participant would have been paid but for the
limitations imposed under Section 415 of the Code. Benefits
under this plan are subject to the same terms and
conditions as the benefits payable to the participant under
the Company's Retirement Plan.
The unfunded Supplemental Retirement Benefits Plan provides
that each eligible employee who reaches retirement age
while working for the Company may receive an annual
retirement benefit equal in amount (when calculated as a
life annuity with two years certain) to 2% of the
participant's final average total compensation (the average
of the highest sixty consecutive months' earnings,
including cash bonuses earned) multiplied by the number of
years of credited service up to a maximum of 60%. Benefits
otherwise payable under the unfunded Supplemental
Retirement Benefits Plan are reduced by amounts payable
under the Retirement Plan and the ERISA Excess Benefits
Plan.
The following table shows the maximum aggregate annual
retirement benefit payable from all three plans at normal
retirement age for various levels of final average
compensation and years of service, assuming payment of
benefits in the form of a life annuity with a two-year
certain:
Remuneration (*) 10 Years 20 Years 30 Years 40 Years
$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
500,000 100,000 200,000 300,000 300,000
550,000 110,000 220,000 330,000 330,000
600,000 120,000 240,000 360,000 360,000
---------------
* Average annual compensation utilized for formula
purposes includes salary and cash 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 years
of service now credited under the Retirement Plan for the
participants listed in the Summary Compensation Table are
as follows: John Kean, Jr., 15 years; A. Mark Abramovic, 3
years; James R. Van Horn, 5 years; Robert F. Lurie, 6
years; and Michael J. Behan, 22 years.
Change in Control Agreements
The Company is party to Change in Control Agreements with
certain officers, including those officers listed in the
Summary Compensation Table. The purpose of these Agreements
is to provide key management personnel with certain
financial protection in the event of a change in control of
the Company and the subsequent termination of the officer's
employment. By providing this protection, the Company helps
to ensure that the efforts of key employees remain focused
on the Company's performance and the enhancement of
shareholder value during rumored, potential or actual
change in control situations.
A covered officer becomes entitled to the payments and
benefits provided for in the Agreement if, within thirty-
six months after the change in control,
1. the Company (or its successor) terminates the employee
other than for cause or as a result of the employee's death
or disability; or
2. the employee terminates his or her employment for Good
Reason (as defined in the Agreement).
Under the Agreement, the payments to which a covered
officer will be entitled in such a termination event
include a payment not to exceed three times the officer's
annual base salary plus three times the highest incentive
compensation award received by the officer during the
preceding thirty-six months.
Following termination of employment:
- the officer will continue to participate in all
employee benefit plans in which the officer was eligible to
participate on the date of termination;
- all incentive awards not yet paid will be payable; and
- the spread between the exercise price and the higher
of the highest bid price during the twelve months preceding
termination or the highest price per share paid in
connection with any change in control will be payable in
cash in lieu of stock issuable upon the exercise of stock
options.
Most Change in Control Agreements 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 Agreements with John Kean, Jr., A. Mark Abramovic and
James R. Van Horn provide 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 them 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.
Except as set forth above, the Company is not party to any
other employment, change in control or termination
agreements with executive officers.
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, 2000 has been mailed to shareholders who are
referred to such report for financial and other information
about the Company. The Company will furnish without charge
a copy of its most recent Annual Report on Form 10-K as filed
with the Securities and Exchange Commission to any beneficial
owner of the Company's Common Stock upon receipt of a written
request from such person. Please direct all such requests
to James R. Van Horn, Chief Administrative Officer, 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 2002 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 August 18,
2001.
By Order of the Board of Directors
James R. Van Horn
Chief Administrative Officer,
General Counsel and Secretary
Dated: December 18, 2000
Bedminster, New Jersey
EXHIBIT A
NUI CORPORATION
AUDIT COMMITTEE CHARTER
Purpose
The primary function of the Audit Committee is to assist
the Board of Directors in fulfilling its oversight
responsibilities with respect to: (i) the financial reports
and other financial information provided by the Corporation
to the stockholders and others; (ii) the Corporation's
system of internal controls; and (iii) the Corporation's
audit, accounting, and financial reporting processes
generally.
In carrying out this function, the Audit Committee shall
serve as an independent and objective monitor of the
performance of the Corporation's financial reporting
process and system of internal control; review and appraise
the audit efforts of the Corporation's independent
accountants and internal auditors; and provide for open,
ongoing communication among the independent accountants,
financial and senior management, internal auditors, and the
Board of Directors concerning the Corporation's financial
position and affairs.
Composition
The Audit Committee shall be comprised of three or more
directors, as determined by the Board of Directors, each of
whom shall be an independent director as determined in
accordance with the Corporation's By-laws and New York
Stock Exchange rules. In accordance with NYSE rules, all
members of the Audit Committee shall be "financially
literate" (i.e. familiar with basic finance and accounting
practices) and at least one member of the Committee shall
have accounting or related financial management expertise.
Meetings
The Committee shall meet at least three times annually, or
more frequently as circumstances dictate. The Committee
shall meet at least annually, and more often as warranted,
with the head of internal audit and the independent
accountants in separate executive sessions to discuss any
matters that the Committee or each of these groups believes
should be discussed privately. The Committee shall maintain
a high degree of independence both in establishing its
agenda and directly accessing various members of the
Corporation's management. The Committee shall meet annually
with management regarding the Corporation's system of
internal controls, results of audits, and accuracy of
financial reporting.
Responsibilities and Duties
The Committee's responsibility is oversight, and it
recognizes that the Corporation's management is responsible
for preparing the Corporation's financial statements.
Additionally, the Committee recognizes that financial
management (including the internal audit staff), as well as
the independent accountants, have more knowledge and more
detailed information about the Corporation than do the
members of the Committee; consequently, in carrying out its
oversight responsibilities the Committee is not providing
any expert or special assurance as to the Corporation's
financial statements or any professional certification as
to the independent accountants' work.
The following functions shall be the common recurring
activities of the Committee in carrying out its oversight
responsibility. These functions are set forth as a guide
with the understanding that the Committee may diverge from
this guide as appropriate given the circumstances.
- Review with a representative of financial management
and the independent accountants the financial information
contained in the Corporation's Quarterly Report on Form 10-Q
prior to its filing, and the results of the independent
accountants' review of Interim Financial Information
pursuant to SAS 71. The Chair may represent the entire
Audit Committee, either in person or by telephone
conference call, for purposes of this review.
- Review with management and the independent accountants
at the completion of the annual audit of the Corporation's
consolidated financial statements included in the Annual
Report on Form 10-K for the last fiscal year and prior to
its filing:
(1) the Corporation's annual consolidated financial
statements and related footnotes;
(2) independent accountants' audit of the consolidated
financial statements and the form of its report;
(3) any significant changes required in the independent
accountants' examination plan;
(4) any serious difficulties or disputes with management
encountered during the course of the audit; and
(5) other matters related to the conduct of the audit
which are to be communicated to the Audit Committee under
generally accepted auditing standards including,
discussions relating to the independent accountants'
judgments about such matters as the quality, not just the
acceptability, of the Corporation's accounting practices
and other items set forth in SAS 61 (Communication with
Audit Committees) or other such auditing standards that may
in time modify, supplement or replace SAS 61.
- On an annual basis, the Audit Committee should ensure
receipt of, and review with the independent accountants, a
written statement required by Independence Standards Board
(ISB) Standard No. 1, as may be modified or supplemented,
and discuss with the accountants their independence. The
Committee will recommend that the Board of Directors take
appropriate action on any disclosed relationships that may
reasonably be thought to bear on the independence of the
accountants and satisfy itself that the Corporation has
engaged independent accountants as required by the
Securities Acts administered by the Securities and Exchange
Commission.
- The Committee will have prepared and reviewed the
Audit Committee Report for inclusion in the annual
stockholders' meeting proxy statement. The Audit Committee
Report must state whether the Audit Committee:
(1) has reviewed and discussed the audited consolidated
financial statements with management;
(2) has discussed with the independent accountants the
matters required to be discussed by SAS 61, as may be
modified, supplemented or replaced;
(3) has received the written disclosures from the
independent accountants required by ISB Standard No. 1, as
may be modified or supplemented, and has discussed with the
accountants their independence; and
(4) has recommended to the Board of Directors, based on
the review and discussions referred to in above items (1)
through (3), that the Corporation's consolidated financial
statements be included in the Annual Report on Form 10-K
for the last fiscal year for filing with the Commission.
- The Audit Committee and Board of Directors are
responsible for the selection, evaluation and, where
appropriate, replacement of the independent accountants.
Selection for the ensuing calendar year will be submitted
to the stockholders for ratification or rejection at the
annual meeting of stockholders. Consistent with these
responsibilities, it is recognized that the independent
accountants are ultimately accountable to the Board of
Directors and Audit Committee.
- Review and reassess the adequacy of the Audit
Committee Charter on an annual basis. The charter will be
included as an appendix to the annual stockholders' meeting
proxy statement triennially or in the next annual
stockholders' meeting proxy statement after any significant
amendment to the charter.
- In consultation with the independent accountants and
the internal auditors, regularly review the integrity of
the Corporation's financial reporting processes and system
of internal controls.
- Review and concur in the appointment, replacement,
reassignment or dismissal of the head of internal audit.
Confirm and assure the objectivity of the head of internal
audit.
- Review the performance of the internal audit
department, including the objectivity and authority of its
reporting obligations, the proposed audit plans for the
coming year, and the coordination of such plans with the
independent accountants.
- Ensure the establishment of an internal audit group
charter, which shall define its purpose, authority, and
responsibilities. Review, as needed, the internal audit
group charter.
_ Review policies and procedures with respect to
officers' expense accounts and perquisites, including their
use of corporate assets, and consider the results of any
review of these areas by the internal auditors or the
independent accountants.
- Review legal and regulatory matters that may have a
material impact on the Corporation's consolidated financial
statements, related compliance policies and programs, and
reports received from regulators.
In addition to the activities described above, the Audit
Committee will perform such other functions as necessary or
appropriate under law, the Corporation's charter or By-
laws, and the resolutions and other directives of the Board
of Directors.
The Audit Committee shall have the power to conduct or
authorize investigations into any matters within its scope
of responsibilities and shall be empowered to retain
independent counsel, accountants, or others to assist it in
the conduct of any investigation.
The duties and responsibilities of a member of the Audit
Committee are in addition to those duties generally
pertaining to a member of the Board of Directors.
The Audit Committee will report its actions to the Board of
Directors with such recommendations as the Audit Committee
may deem appropriate.
Front of Proxy Card
NUI CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints John Kean,
John Kean, Jr., and James R. Van Horn, or any one of them,
each with power of substitution, proxies, to vote all
shares that the undersigned is entitled to vote at the
Annual Meeting of the Shareholders of NUI Corporation to be
held on January 23, 2001 at 10:30 AM, at the Somerset Hills
Hotel, Warren, New Jersey, and at any adjournments, on the
proposals described in the accompanying Proxy Statement as
marked on the reverse side, and in their discretion on any
other matters that may properly come before the meeting or
any adjournment. If this proxy is properly signed, your
shares will be voted as you directed by marking the boxes
on the reverse side. IF NO DIRECTION IS GIVEN, YOUR SHARES
WILL BE VOTED FOR PROPOSALS 1 AND 2 ON THE REVERSE SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Back of Proxy Card
X Please mark votes as in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS
1 AND 2.
1. ELECTION OF DIRECTORS
Nominees: John Kean
John Kean, Jr.
Bernard S. Lee
____ FOR ____ WITHHELD FOR ALL
____ WITHHELD FOR (write that nominee's name in the
space provided below)
_________________________________________________
2. RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN LLP, AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
____ FOR ____ AGAINST ____ ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT _____ THE MEETING ____
Please date, sign exactly as name(s) appear at
left, and return promptly in enclosed envelope.
If signing for a corporation or partnership,
sign in that name and indicate your title. If
signing as attorney, executor, guardian,
trustee or Custodian, please add your title.
Signature(s) ________________ Date: ___________
________________
