SOUTH JERSEY INDUSTRIES, INC.
Number One South Jersey Plaza, Route 54
Folsom, New Jersey 08037
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 23, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
South Jersey Industries, Inc. will be held at the office of the Company,
Number One South Jersey Plaza, Route 54, Folsom, New Jersey, on Thursday,
April 23, 1998, at 10:00 A.M., Eastern Time, for the following purposes:
1. To elect four Directors:
a. Three Directors in Class III (Term expiring in 2001).
b. One Director in Class II (Term expiring in 2000).
2. To approve the action of the Board of Directors in appointing
Deloitte & Touche LLP as auditors for the year 1998.
3. To transact such other business that may come before the
meeting.
The Board of Directors has fixed the close of business on March 3, 1998
as the record date for determining the shareholders of the Company entitled
to notice of and to vote at the Annual Meeting and any adjournments
thereof, and only holders of stock of the Company of record on that date
are entitled to notice of and to vote at the meeting and any adjournments.
If you do not expect to be personally present at the meeting, please
fill in and sign the enclosed form of proxy and return it promptly in the
accompanying business reply envelope.
By Order of the Board of Directors,
George L. Baulig
Secretary
Folsom, N.J. 08037
March 13, 1998
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO VOTE, DATE, SIGN AND PROMPTLY RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
PROXY STATEMENT
This statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Shareholders of South Jersey
Industries, Inc. to be held on April 23, 1998, at the office of the
Company, located at Number One South Jersey Plaza, Route 54, Folsom, New
Jersey 08037. The approximate date on which proxy material will first be
sent to shareholders is March 13, 1998.
This solicitation of proxies is made on behalf of the Board of
Directors of South Jersey Industries, Inc. and the Company will bear the
cost of the solicitation. The solicitation will be made by mail, and, in
addition, the Secretary of the Company and regular employees of the Company
may solicit proxies by telephone, telegram or in person. The Company may
also employ a professional proxy-soliciting firm, the cost of which will
not exceed $7,500 plus expenses. The Company will furnish brokerage houses
and other custodians, nominees or fiduciaries with the number of additional
copies of its proxy material and Annual Report to Shareholders necessary to
supply those materials to the beneficial owners of stock of the Company.
Directors are elected by a plurality vote of all votes cast at the
meeting. Abstentions and broker non-votes will be treated as present for
the purposes of determining a quorum, but will not affect the election of
directors and will not be counted in tabulating the number of votes cast on
the appointment of independent accountants.
Signed proxies in the accompanying form received by the Company will be
voted at the meeting or any adjournments thereof and, where such a proxy
contains a specific instruction as to any matter to be acted on, the shares
represented by the proxy will be voted accordingly. A shareholder who signs
and returns a proxy may revoke it at any time before it is voted.
Attendance at any meeting by a shareholder who has given a proxy does not
revoke the proxy; to revoke the proxy, the attending shareholder must so
notify the secretary of the meeting in writing prior to the voting of the
proxy.
The Company had 10,773,888 shares of Common Stock outstanding as of
March 3, 1998. The holders of Common Stock have one vote per share on each
matter to be acted upon. Only shareholders of record at the close of
business on March 3, 1998 will be entitled to vote at the meeting.
ELECTION OF DIRECTORS
At the Annual Meeting, four directors are to be elected to the Board of
Directors. Three nominees are to be elected in Class III to hold office for
a term of three years and one nominee is to be elected in Class II for a
term of two years. It is intended that the votes of the persons designated
as proxies in the accompanying form of proxy will be cast for the following
persons as directors: Class III (term expiring in 2001) -Thomas L. Glenn,
Jr., Dr. Herman D. James, Frederick R. Raring; Class II (term expiring in
2000) - Clarence D. McCormick. In December 1997, Mr. William F. Ryan, a
Class II director whose term would have expired in 2000, died and as a
result, the Board of Directors was reduced from ten to nine members. Mr.
McCormick, a Class III director whose current term expires this year, is
standing for election as a director in Class II for a term of two years, to
make the number of directors in each class equal. All of the nominees
have previously been elected by the Company's shareholders. While it is not
anticipated that any of the nominees will be unable to serve, if any should
become unable to accept nomination or election, it is intended that the
persons designated as proxies in the accompanying form of proxy will vote
for the election of such other person as the Board of Directors may
recommend.
- 1 -
<PAGE>
NOMINEES
Class III (Term expiring in 2001)
Thomas L. Glenn, Jr. has been a director since 1986. Age 63. Member of the
Executive Committee, the Corporate Development Committee, the Nominating
Committee and Chairman of the Environmental Committee. Chairman (1984 to
date) of Glenn Insurance, Inc. Absecon, NJ; trustee, of Atlantic City
Medical Center Foundation, Atlantic City, NJ.
Herman D. James, Ph.D. has been a director since 1990. Age 54. Member of
the Audit Committee and the Nominating Committee. President, Rowan
University (formerly Glassboro State College) (1984 to date), Glassboro,
NJ; director American Association of State Colleges and Universities,
Washington, DC; director New Jersey State Chamber of Commerce, Trenton, NJ.
Frederick R. Raring has been a director since 1995. Age 60. Member of the
Audit Committee and the Environmental Committee. President, (1990 to date)
of Seashore Supply Company, Atlantic City, NJ, a major distributor of
plumbing and heating supplies and materials.
- 2 -
<PAGE>
NOMINEES
Class II (Term expiring in 2000)
Clarence D. McCormick has been a director since 1979. Age 68. Member of the
Executive Committee, Chairman of the Compensation/Pension Committee and the
Corporate Development Committee. Chairman, President and CEO (1988 - 1995),
Chairman and CEO (1995 to date), of The Farmers and Merchants National Bank
of Bridgeton, NJ; Chairman and President of Southern Jersey Bancorp of
Delaware (1989 to date); director of such banks; director of the Cumberland
Mutual Insurance Company; director American Automobile Association of
Southern New Jersey.
DIRECTORS CONTINUING IN OFFICE
Class II (Term expiring in 2000)
Anthony G. Dickson has been a director since 1995. Age 49. Member of the
Corporate Development Committee, the Environmental Committee and the
Nominating Committee. President (1991 to date), of New Jersey Manufacturers
Insurance Company and New Jersey Re-Insurance Company, West Trenton, NJ;
director Alliance of American Insurers, Schaumburg, IL; trustee, Rider
University.
Shirli M. Vioni, Ph.D. has been a director since 1983. Age 57. Chairman of
the Audit Committee and Member of the Compensation/Pension Committee.
President, Billings-Vioni Management Associates (1990 to date), Gahanna,
OH, a human resource consulting firm; formerly Superintendent, Oberlin City
Schools (1994 to 1997), Oberlin, OH.
- 3 -
<PAGE>
DIRECTORS CONTINUING IN OFFICE
Class I (Term Expiring in 1999)
Richard L. Dunham, Chairman of the Board and Acting Chief Executive Officer
of the Company. Has been a director since 1984. Age 68. Member of the
Executive Committee and the Corporate Development Committee. Formerly
Chairman (1988 - 1995), President (1980 - 1988), of Zinder Companies, Inc.
economic and regulatory consulting firms, Washington, DC; Member (1986 -
1995) of Advisory Council of Gas Research Institute, Chicago, Il; Former
Chairman (1975-1977) of the Federal Power Commission (now FERC),
Washington, DC.
W. Cary Edwards has been a director from April 1990 - January 1993 and
September 1993 to date. Age 53. Member of the Compensation/Pension
Committee and the Environmental Committee. Commissioner, N.J. State
Commission on Investigation (1997 to date), Managing Partner, Edwards
Caldwell & Poff, Esqs. (1993 to date); Of Counsel (1993) and NJ Managing
Partner (1990 - 1993), law firm of Mudge Rose Guthrie Alexander & Ferdon;
Attorney General, State of New Jersey (1986 - 1989); Chief Legal Counsel -
Governor of NJ (1982 - 1986).
Peter M. Mitchell, Ph.D. has been a director since 1981. Age 63. Member of
the Executive Committee, the Audit Committee, the Compensation/Pension
Committee and Chairman of the Nominating Committee. President,
Massachusetts Maritime Academy, Buzzards Bay, MA (1994 to date); Vice
Chancellor (1983 - 1994), Higher Education Coordinating Council, formerly
the Board of Regents of Higher Education, Boston, MA; director, Banc
Boston, Regional Board, Boston, MA.
- 4 -
<PAGE>
<TABLE>
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
<CAPTION>
Number of Shares
of Common Stock
Owned Beneficially % of
Name as of Jan. 23, 1998 (1)(2) Class
- ---- -------------------------- -----
<S> <C> <C>
Anthony G. Dickson 4,202
Richard L. Dunham 4,395
W. Cary Edwards 2,536
Thomas L. Glenn, Jr. 6,521 0.1%
Herman D. James, Ph.D 2,486
Clarence D. McCormick 6,269 0.1%
Peter M. Mitchell, Ph.D 3,643
Frederick R. Raring 94,683 0.9%
Shirli M. Vioni, Ph.D 4,595
The Farmers and Merchants National
Bank of Bridgeton, Trustee for
Company Thrift Plan 1,453,309 13.5%
15 directors, nominees and
officers as a group 1,643,174 15.3%
<FN>
(1) Based on information furnished to the Company by the respective
directors, nominees and officers of the Company. The Company is
informed that these persons have sole voting power and sole power of
disposition with respect to the shares of Common Stock shown opposite
their names, with the following exceptions: 79,936 of the shares owned
by officers as a group are held in the Company's Thrift Plan, and the
Trustee of the Plan has sole power to vote (but no power to dispose
of) such shares; and 1,530 shares of the officers as a group are not
now held by them but may be acquired through the exercise of stock
options, which are exercisable within sixty days.
(2) Includes 50 shares awarded to each director in 1997 under the
Restricted Stock Program For Directors. Owners of restricted stock
have power to vote the shares, but have no investment power with
respect to the shares until the restrictions lapse.
</FN>
</TABLE>
- 5 -
<PAGE>
THE BOARD OF DIRECTORS
Certain Transactions
Gas Company and other subsidiaries of the Company have maintained
banking relationships for a number of years with The Farmers and Merchants
National Bank of Bridgeton, of which Mr. McCormick is Chairman, and a
director, and expect to continue such relationships. The highest aggregate
indebtedness of Gas Company and other subsidiaries of the Company to that
bank during 1997 was $5,631,000, and the amount of such indebtedness at
December 31, 1997 was $5,618,000. Loans made to Gas Company and other
subsidiaries by that bank are made on terms that are usual and customary at
the time they are made. The bank is also trustee of the Employee Thrift
Plan and the Employee Stock Ownership Plan. During 1997 Gas Company paid
$240,100 for purchases of pipe and fittings from Seashore Supply Company of
which Mr. Raring is President.
Meetings of the Board of Directors And Its Committees
The Board of Directors of the Company met twelve times in 1997. All
Directors attended 75% or more of the total of (i) the number of meetings
of the Board of Directors held during the period such director was in
office and (ii) the number of meetings of the committees of the Board on
which he or she served. The average attendance for all Board and Committee
meetings in 1997 was 98%. During 1997, each of the directors of the Company
also served on the Boards of one or more of Gas Company, EMI, R&T, Energy,
or SJ EnerTrade, the five direct subsidiaries of the Company. In 1997,
each of these Boards met nine times.
The Audit Committee of the Board of Directors, which met three times in
1997, is composed of directors who are not officers, namely, Dr. Shirli M.
Vioni, Chairman, Dr. Herman D. James, Dr. Peter M. Mitchell and Frederick
R. Raring. The Audit Committee (1) annually recommends to the Board a firm
of independent public accountants for appointment as auditors of the
Company; (2) reviews with the independent auditors the scope and results of
each annual audit; (3) reviews with the independent auditors and the
Company's internal auditors suggestions or recommendations made by either
of them; (4) reviews with appropriate Company officers the performance of
the independent auditors and the internal auditors; (5) considers the
possible effect on the independence of the independent auditors of each
professional service rendered or to be rendered by such auditors; and (6)
reviews and makes recommendations to the Board of Directors regarding the
Annual Report to Shareholders.
The Compensation/Pension Committee of the Board of Directors, which met
seven times in 1997, is composed of four directors who are not officers,
namely, Clarence D. McCormick, Chairman, W. Cary Edwards, Dr. Peter M.
Mitchell and Dr. Shirli M. Vioni. The Compensation/Pension Committee (1)
grants options and otherwise administers the Stock Option and Stock
Appreciation Rights Plan; and (2) reviews and makes recommendations to the
Board of Directors on the operations, performance and administration of the
retirement plan, other employee benefit plans, and employment policies and
forms of compensation, including the performance and levels of compensation
of the officers of the Company.
- 6 -
<PAGE>
The Corporate Development Committee of the Board of Directors met four
times in 1997. It is composed of Clarence D. McCormick, Chairman, Anthony
G. Dickson, Richard L. Dunham, and Thomas L. Glenn, Jr. Among its
functions, the Corporate Development Committee (1) Reports to the Board of
Directors regarding the strategic planning function of the Company; (2)
considers proposals and makes recommendations to the Board of Directors
regarding profit opportunities related or unrelated to the Company's
current lines of business; and (3) reviews and makes recommendations to the
Board of Directors regarding corporate acquisitions, consolidations or
subsidiary joint ventures or investments.
The Environmental Committee of the Board of Directors, which met two
times in 1997, is composed of four directors, namely, Thomas L. Glenn, Jr.,
Chairman, Anthony G. Dickson, W. Cary Edwards and Frederick R. Raring. The
Environmental Committee (1) reviews and evaluates management activities
with respect to the environmental remediation of the Company's and its
subsidiaries' current and former properties; and (2) oversees litigation
against the Companies' insurance carriers for the recovery of remediation
costs.
The Executive Committee of the Board of Directors which met two times
in 1997, is composed of four directors, namely, Richard L. Dunham, Thomas
L. Glenn, Jr., Clarence D. McCormick and Dr. Peter M. Mitchell. The
Executive Committee (1) formulates policies to be followed in planning and
conducting the business and affairs of the Company; and (2) may act on
behalf of the Board of Directors during intervals between meetings of the
Board in the management of the business and affairs of the Company.
The Nominating Committee of the Board of Directors met three times in
1997. It is composed of Dr. Peter M. Mitchell, Chairman, Anthony G.
Dickson, Thomas L. Glenn, Jr. and Dr. Herman D. James. Among its
functions, the Executive Committee (1) maintains a list of prospective
candidates for directors, including those recommended by shareholders; (2)
reviews the qualifications of candidates for directors; and (3) makes
recommendations to the Board of Directors to fill vacancies and for
nominees for election to the Board at the Annual Meeting of Shareholders.
The Nominating Committee will consider nominees for the Board of Directors
recommended by shareholders and submitted in writing to the Secretary of
the Company.
Compensation Of Outside Directors
Directors of the Company who are not officers of the Company and who
are not members of the Executive Committee of the Board are paid an annual
retainer of $7,500 plus 50 shares of restricted common stock and fees of
$950 per meeting for each meeting of the Boards of the Company, Gas
Company, EMI, R&T, Energy and EnerTrade, respectively, that they attend,
except that the maximum fee paid to any person for attendance at one or
more meetings of these Boards held on the same day is $950. Members of the
Executive Committee of the Board who are not officers of the Company are
paid an annual retainer of $10,000 plus 50 shares of restricted common
stock and receive the same attendance fees as the other non-officer
directors. The Company has established a policy to recognize exceptional
service to the Company beyond that service normally provided by a board
member. In 1997 no payments were made under this policy. Directors who are
also officers of the Company receive no compensation other than their
regular compensation. Members of all the Committees of the Company or of a
subsidiary are paid
- 7 -
<PAGE>
$475 for each meeting of those Committees that they attend if the meeting
is held on the same day as a Board meeting or $950 if the meeting is held
on any other day. Chairmen of each of those committees are paid an
additional $200 for each meeting of their Committee that they attend. The
Company has established a plan whereby directors may elect to defer the
receipt of fees until a specified date or until retirement from the Board.
The deferred amount, together with interest, may be paid in a lump sum or
in equal annual installments, as the director elects.
<TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table
<CAPTION>
Annual Compensation
-------------------
(a) (b) (c) (d) (e) (i)
Name Other
and Annual All Other
Principal Compen- Compen-
Position Year Salary Bonus sation(2) sation(3)
- ----------------- ---- -------- ----- --------- --------
<S> <C> <C> <C> <C> <C>
William F. Ryan, 1997 $438,750 - $15,177 $31,144
Chairman, 1996 405,000 - 13,903 19,586
President & CEO 1995 395,000 - 13,371 19,576
(1)
Charles Biscieglia 1997 169,500 - 658 9,534
Vice President and 1996 159,500 - - 9,294
Executive Vice 1995 157,000 $5,000 - 9,324
President, COO of
South Jersey Gas
Company
Joseph E. 1997 142,500 - - 6,795
McCullough, Vice 1996 123,542 - - 5,093
President, Sr. 1995 117,500 4,000 - 4,823
Vice President of
South Jersey Gas
Company and
President of South
Jersey Energy
Company
George L. Baulig, 1997 126,250 - - 8,535
Secretary & 1996 110,000 - - 7,030
Treasurer 1995 105,000 3,000 - 6,842
and Secretary of
Subsidiary
Companies
David A. Kindlick, 1997 125,000 - - 4,246
Vice President and 1996 101,500 - - 3,454
Vice President of 1995 97,000 5,000 - 3,308
South Jersey
Gas Company
- 8 -
<PAGE>
<FN>
Footnotes to Summary Compensation Table
(1) Mr. Ryan died on December 28, 1997. On December 30, 1997 Mr.
Richard L. Dunham was elected Chairman and Acting CEO of the Company. No
salary or benefits were paid to Mr. Dunham in this capacity in 1997.
(2) The Internal Revenue Code limits the contributions that may be made
by or on behalf of an individual under defined contribution plans such as
the Company's Thrift Plan. The Company has adopted a policy of currently
reimbursing its executive officers with the amount of Company contributions
that may not be made because of this limitation (including the tax
liability incurred by the additional income). Pursuant to this policy,
Messrs. Ryan and Biscieglia were paid $15,177 and $658, respectively, in
1997, which amounts are included in column (e) of the Summary Compensation
Table.
(3) Column (i) includes Employer Contributions to Thrift Plan, income
value of group life insurance and increase in vested benefit level of
deferred compensation contract. 1997 values for these items are:
Ryan Biscieglia McCullough Baulig Kindlick
Thrift Plan $ 4,500 $ 4,700 $ 4,275 $ 3,788 $ 3,750
Group Life Insurance 10,062 1,949 2,520 2,265 496
Deferred Compensation 16,582 2,885 - 2,482 -
</FN>
</TABLE>
<TABLE>
Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value
Underlying of Unexercised
Unexercised In-The-Money
Shares Options at Options at
Acquired Value Fiscal Year-End Fiscal Year-End
Name on Exercise Realized (All Exercisable) (All Exercisable)
<S> <C> <C> <C> <C>
William F. Ryan 15,300 $112,575 - -
Charles Biscieglia - - 4,000 $22,500
George L. Baulig - - 1,530 19,003
David A. Kindlick - 1,510 11,959
</TABLE>
In 1987, the Company adopted a stock option and stock appreciation
rights plan for its officers and other key employees. Of the 304,475
options authorized, 87,750 options have been awarded. 74,690 of these
awarded options have been exercised. No options were granted under the plan
in 1997.
The Company has Employment Agreements with certain of its officers,
including Messrs. Biscieglia, McCullough, Baulig and Kindlick. Each
Agreement is for a 3-year period ending September 30, 1999, and provides
for a base salary that will be reviewed periodically, but will be not less
than what was being paid at the beginning of the period. If a change of
control (as defined in the Agreement) occurs during the period of the
Agreement, the Agreement is automatically extended for 3 years from the
date the change of control occurs. If, during the extended term of the
Agreement, the officer's employment is terminated for other than cause, or
he resigns after there has been a significant adverse change in his
employment arrangements with the Company, he is entitled to a severance
payment equal to 300% of his average annual
- 9 -
<PAGE>
compensation during the preceding 5 calendar years. If the officer's
employment agreement is terminated for other than cause without a change of
control, he is entitled to a severance payment equal to 150% of his average
annual compensation during the preceding 5 calendar years. The Company
also had an employment agreement with Mr. Ryan, who died on December 28,
1997. That agreement contained the same change of control provisions
summarized above. In addition, Mr. Ryan's contract, which would have ended
April 30, 2000, provided a base salary of $450,000 to be reviewed annually.
Mr. Ryan's spouse is entitled to the continuation of his base salary and
certain medical benefits for the balance of the term of his agreement. Mr.
Ryan's employment could have been terminated by the Company only for cause,
disability or retirement.
Pension Plans For Executives
The following table illustrates the current retirement benefits under
the salaried employee pension plan, and the supplemental executive
retirement plan, assuming the executive was born in 1936 and retires at the
normal retirement age of 62.
<TABLE>
<CAPTION>
Years of Service
Remuneration 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C>
$125,000 $ 43,750 $ 56,250 $ 68,750 $ 81,250 $ 81,250 $ 81,250
150,000 52,500 67,500 82,500 97,500 97,500 97,500
175,000 61,250 78,750 96,250 113,750 113,750 113,750
200,000 70,000 90,000 110,000 130,000 130,000 130,000
225,000 78,750 101,250 123,750 146,250 146,250 146,250
250,000 87,500 112,500 137,500 162,500 162,500 162,500
300,000 105,000 135,000 165,000 195,000 195,000 195,000
400,000 140,000 180,000 220,000 260,000 260,000 260,000
450,000 157,500 202,500 247,500 292,500 292,500 292,500
500,000 175,000 225,000 275,000 325,000 325,000 325,000
</TABLE>
As employees, the executive officers of the Company are eligible for
benefits under a tax-qualified pension plan for salaried employees provided
by the Company. Compensation considered under the pension plan consists of
base salary only, which in the case of the executive officers is equal to
the cash compensation reported in column (c) of the Summary Compensation
Table. Employees do not make contributions to the plan, and the employer
contributions (which are based on aggregate actuarial calculations without
individual allocation) are held and invested by insurance companies of
recognized standing until they are used to provide retirement benefits.
Under certain circumstances, early retirement with reduced annual benefits
is permitted (but not before age 55). Executive officers who are 50 years
of age or older are also covered by an unfunded supplemental retirement
plan that is designed in general to provide the officer with a minimum
retirement benefit from the salaried employee pension plan and the
supplemental plan that aggregates 2% of the average of the highest three of
the final six years salary (as defined in the plan), for each year of
service, plus 5%. Pursuant to Mr. Ryan's agreement, he would have retired
with 33.6 years of service. Assuming continued employment and retirement
at age 60, Messrs. Biscieglia, McCullough, Baulig and Kindlick will have,
respectively, 36, 19, 42 and 35 years of credited service. No credit is
provided under the supplemental plan for more than 30 years of service.
- 10 -
<PAGE>
Compensation/Pension Committee Report on Executive Compensation
The Compensation/Pension Committee of the Board of Directors has
prepared the following report for inclusion in this proxy statement.
Compensation of executive officers of the Company is almost exclusively
by base salary. Such compensation was last increased in October 1997. The
Company did not make use of annual incentive awards or long-term incentive
award programs during 1997. No bonuses were paid nor stock options granted
in 1996 or 1997.
The compensation recommended and approved for executive officers is
intended to enhance the earnings and financial strength of the Company
through the focus of attention and efforts on the maintenance of high
levels of customer satisfaction and a proactive stance in the operation of
the Company in an increasingly competitive environment.
Compensation paid to the executive officers of the Company as set forth
in the Summary Compensation Table on page 8 is fixed by the Board of
Directors and is based on recommendations of the Committee. These
compensation levels reflect the promotions, announced in April, June, and
November of 1997, of four employees of South Jersey Gas Company to hold
positions with the Company for the first time in connection with the
expanded rate of non-regulatory businesses and succession planning. In
setting these base salary compensation levels, the Board took into account
each executive's experience and actual performance of each of their
respective areas of responsibility in addition to the factors described
below.
The compensation of the chief executive officer, William F. Ryan, who
died on December 28, 1997, was increased by 3.4% to an annual rate of
$450,000 in October 1997. The Committee based its recommendation for this
increase on the earnings performance of the Company during 1997 and the
successful entry by the Company into non-regulated areas of activity.
In making its recommendations for executive officer compensation,
including that for the chief executive officer, the Committee considers a
number of factors: an appraisal and evaluation of the officer's
performance; the earnings performance of the Company; information supplied
by a nationally recognized compensation consulting firm and to a lesser
extent, other executive compensation surveys in which the Company or its
subsidiaries participate. External values are determined through
comparative market evaluation of executive compensation levels against
organizations of similar scope, size, industry and operating structure,
which are not necessarily included in the Standard & Poor's Utility Index.
Data from multiple survey sources is extracted from the market for both
salary and total compensation. While the long-term objective has been to
fix salary for executives at or near the median of the comparative group,
it is recognized that occasionally salaries may fall above or below the
median. The Committee has not adopted a specific formula relationship
between changes in the Company's earnings performance and changes in the
levels of executive compensation.
Clarence D. McCormick, Chairman
W. Cary Edwards
Dr. Peter M. Mitchell
Dr. Shirli M. Vioni
- 11 -
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a graph that shows in the form of an index (1992 = 100),
for the 1992 - 1997 period, the cumulative total return on the Company's
Common Stock (consisting of the change in share price during each year plus
dividends received which are assumed to be reinvested) compared to the
Standard & Poor's 500 Index and the Standard & Poor's Utility Index. The
Standard & Poor's Utility Index is a commonly used indicator of utility
common stock performance based on selected gas, electric and telephone
companies. The compounded annual growth rate for the Company on the graph
is 13.19%. This compares to 20.23% for the Standard & Poor's 500 Index and
13.91% for the Standard & Poor's Utility Index.
Indexed Total Return Assuming Dividends Reinvested Over a 5 Year Period
(Chart)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100 110.03 111.53 153.29 188.39 251.18
S&P UTILITY 100 114.35 105.33 149.39 154.03 191.79
SJI 100 111.57 91.91 125.45 140.88 185.80
</TABLE>
APPOINTMENT OF AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors,
subject to the approval of the shareholders, has appointed Deloitte &
Touche LLP, independent public accountants, as the auditors of the Company
for the year 1998. Unless otherwise directed, it is proposed to vote
proxies "FOR" approval of this appointment.
Deloitte & Touche LLP served as the auditors of the Company during the
year 1997. During 1997, the audit services performed by that firm for the
Company consisted of the audits of the financial statements of the Company
and its subsidiaries and the preparation of various reports based on those
audits, services related to filings with the Securities and Exchange
Commission, the New York Stock Exchange, and audits of employee benefit
plans as required by the Employee Retirement Income Security Act.
- 12 -
<PAGE>
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1997 accompanies this proxy statement. The Annual Report
is not proxy soliciting material or a communication by means of which any
solicitation is made. A representative of Deloitte & Touche LLP, whose
report on the Company's financial statements appears in the Annual Report,
will be present at the Annual Meeting and will have the opportunity to make
a statement, if he desires to do so, and to respond to questions from
shareholders.
Upon written request of any person who on the record date for the
Annual Meeting was a record owner of the Company's Common Stock, or who
represents in good faith that he was on such date a beneficial owner of
such stock entitled to vote at the Annual Meeting, the Company will send to
such person, without charge, a copy of its Annual Report on Form 10-K for
1997, as filed with the Securities and Exchange Commission. Requests for
this report should be directed to George L. Baulig, Secretary, South Jersey
Industries, Inc., Number One South Jersey Plaza, Route 54, Folsom, New
Jersey 08037.
OTHER MATTERS
Any proposal which a qualified shareholder of the Company wishes to
include in the Company's proxy statement to be released to shareholders in
connection with the 1998 Annual Meeting of Shareholders that is received by
the Company after November 13, 1998 will not be eligible for inclusion in
the Company's proxy statement and form of proxy for that meeting. To be a
qualified shareholder, a shareholder must have owned at least $1,000 in
market value of the Company's securities for at least one year before the
date of submission of the proposal to the Company. In compliance with the
Company's bylaws, stockholders must provide the Company with at least 60
days, but no more than 90 days, notice prior to an announced annual meeting
date of (i) business the stockholder wishes to raise at the meeting and
(ii) persons, if any, the stockholder wishes to nominate for election as
directors at that meeting.
The Board of Directors knows of no matters, other than those set forth
in the Notice of Annual Meeting of Shareholders, to come before the 1998
Annual Meeting. If any other matters or motions properly come before the
Meeting, including any matters dealing with the conduct of the Meeting, it
is the intention of the persons named in the accompanying form of proxy to
vote such proxy in accordance with their judgment.
By Order of the Board of Directors,
George L. Baulig
Secretary
March 13, 1998
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APPENDIX - FORM OF PROXY
(FRONT)
SOUTH JERSEY INDUSTRIES, INC. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
1998 Annual Meeting of Shareholders
The undersigned shareholder hereby appoints R.L. Dunham and G.L. Baulig,
and each of them, attorneys and proxies with full power of substitution and
revocation to vote the number of shares of Common Stock the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders of
South Jersey Industries, Inc. on Thursday, April 23, 1998, and at any
adjournments thereof, as indicated below and in accordance with the judgment of
said attorneys and proxies on any other business which may come before the
meeting or any adjournments, all as set forth in the accompanying notice and
proxy statement, the receipt of which the undersigned acknowledges.
1. For the election of four Directors:
FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as shown to the contrary below) all nominees listed below [ ]
Class III (Term expiring in 2001): Thomas L. Glenn, Jr., Dr. Herman D.
James, Frederick R. Raring
Class II (Term expiring in 2000): Clarence D. McCormick
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
2. To approve the action of the Board of Directors in appointing Deloitte &
Touche LLP as auditors of the Company for the year 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To act upon such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
(Continued and to be signed and dated on the other side.)
(BACK)
The shares represented by this Proxy will be voted as directed by the
shareholder. If no direction is given, they will be voted in favor of the
election of the listed nominees as a group and in favor of the above proposal.
SOUTH JERSEY INDUSTRIES, INC. - BOARD OF DIRECTORS PROXY
Please sign exactly as name is shown to the left.
When shares are held by joint tenants, both must
sign. When signing as attorney, executor, admin-
istrator, trustee or guardian, please give full
title as such.
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Signature
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Signature
Dated:------------------------------------, 1998
