1 South Jersey Plaza, Folsom, New Jersey 08037
Tel. (609) 561-9000 Fax (609) 561-8225 TDD ONLY 1-800-547-9085
Notice of Annual Meeting of Shareholders
April 19, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of South
Jersey Industries, Inc. will be held at the office of the Company, 1 South
Jersey Plaza, Folsom, New Jersey, on Wednesday, April 19, 2000, at 10:00 a.m.,
Eastern Time, for the following purposes:
1. To elect three Directors in Class II (Term expiring in 2003).
2. To approve the action of the Board of Directors in appointing
Deloitte & Touche LLP as auditors for the year 2000.
3. To transact such other business that may come before the meeting
The Board of Directors has fixed the close of business on February 28, 2000
as the record date for determining the shareholders of the Company entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof.
Accordingly, only holders of stock of the Company of record on that date are
entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting, we urge you to vote your shares now. Please complete and
sign the enclosed proxy form and promptly return it in the envelope provided, or
if you prefer, you may vote by telephone or the Internet. Please refer to the
enclosed proxy card for instructions on how to use these options. Should you
attend the meeting, you may revoke your proxy and vote in person.
By Order of the Board of Directors,
George L. Baulig
Secretary
Folsom, N.J. 08037
March 10, 2000
YOUR VOTE IS IMPORTANT
PLEASE VOTE, DATE, AND PROMPTLY RETURN YOUR VOTE IN THE
ENCLOSED ENVELOPE, OR BY TELEPHONE, OR BY THE INTERNET.
SOUTH JERSEY INDUSTRIES, INC.
PROXY STATEMENT
This statement is furnished on behalf of the Company's Board of Directors to
solicit proxies for use at its Annual Meeting of Shareholders. The meeting is
scheduled for Wednesday, April 19, 2000, at 10:00 a.m. at our headquarters, 1
South Jersey Plaza, Folsom, N.J. The approximate date proxy material will be
sent to shareholders is March 10, 2000.
The Company bears the cost of this solicitation, which is primarily made by
mail. However, the Corporate Secretary or Company employees may solicit proxies
by phone, telegram, fax, e-mail or in person. The Company may also use a proxy-
soliciting firm at a cost not exceeding $7,500. The Company furnishes brokerage
houses and other custodians, nominees, and fiduciaries with additional copies of
its proxy material and Annual Report to Shareholders for beneficial owners of
our stock.
As of February 28, 2000, the Company had 11,278,187 shares of Common Stock
outstanding. Owners of Common Stock have one vote per share on each matter to
be acted upon. Only shareholders of record at the close of business February 28,
2000 may vote at the meeting.
Directors are elected by a plurality vote of all votes cast at the meeting.
The approval of the Company's auditors and other matters that come before the
meeting require the affirmative vote of a majority of shares present at the
meeting. Abstention s and broker non-votes will be treated as present to
determine a quorum but will not affect the director elections or the approval of
the appointment of the independent auditors.
Signed proxies received by the Company are voted at the meeting. If a proxy
contains a specific instruction as to any matter to be acted on, the shares
represented by the proxy will be voted in accordance with those instructions. A
shareholder who returns a proxy may revoke it at any time before it is voted.
If you sign and return your proxy but do not include how to vote, your shares
will be voted "For" the election of the nominated slate of directors and "For"
approval of the appointment of Deloitte & Touche LLP as the Company's
independent auditors. If you attend the meeting and wish to revoke your proxy,
you must notify the meeting's secretary in writing prior to the voting of the
proxy. For a quorum to be present, the holders of a majority of the shares
outstanding on the record date must be present in person or by proxy.
DIRECTOR ELECTIONS
At the Annual Meeting, three Class II directors will be elected to the Board
of Directors to hold office until the 2003 annual meeting of shareholders. As
designated on the proxy form, unless otherwise instructed, proxy votes will be
cast for Shirli M. Billings, Ph.D., Sheila H. Coco, CFA and Clarence D.
McCormick, the nominees of the Board of Directors. The Board of Directors now
consists of nine members. Ms. Coco was elected a director by the Board of
Directors in November 1999 and is standing for election by the Company's
shareholders for the first time. While we do not anticipate that, if elected,
any of the nominees will be unable to serve, if any should be unable to accept
the nomination or election, the persons designated as proxies on the proxy form
will vote for the election of such other person as the Board of Directors may
recommend.
- 1 -
NOMINEES
Class II
Term Expires in 2003
Shirli M. Billings, Ph.D. has been a director since 1983. Age 59. Member of the
Audit Committee, the Executive Committee and Chairman of the Nominating
Committee. President, Leadership Learning Academy (1999 to date), Lakeland, FL,
a human resource development center; President, Billings-Vioni Management
Associates (1990 - 1999), Gahanna, OH, a human resource consulting firm;
Superintendent, Oberlin City Schools (1994 to 1997), Oberlin, OH; Director and
Vice President, Human Resource Development (1985-1990), Honeywell, Inc.,
Minneapolis, MN.; trustee of Citizens Scholarship Foundation of America,
Washington, DC.
Sheila H. Coco, CFA has been a director since 1999. Age 41. Member of the Audit
Committee and the Compensation/Pension Committee. Executive Vice President (1998
to date), Senior Vice President (1995 - 1998), Vice President (1993 - 1995),
Chair of Global Investment Committee (1996 to date), Member of Investment Policy
Committee (1995 to date) of Fiduciary Trust Company International, New York, NY;
director of Fiduciary Trust Company of California, Los Angeles, CA; Member, New
York Society of Security Analysts.
Clarence D. McCormick has been a director since 1979. Age 70. Member of the
Executive Committee, the Nominating Committee and Chairman of the
Compensation/Pension Committee. Retired Chairman and CEO (1995 to 1999),
Chairman, President and CEO (1988 -1995) of The Farmers and Merchants National
Bank of Bridgeton, NJ; Chairman and President of Southern Jersey Bancorp of
Delaware (1989 to 1999); director of such banks; director of the Cumberland
Mutual Insurance Company; director of American Automobile Association of
Southern New Jersey.
- 2 -
DIRECTORS CONTINUING IN OFFICE
Class I
Term Expires in 2002
Charles Biscieglia has been a director since 1998. Age 55. Chairman of the
Executive Committee, member of the Environmental Committee and the Nominating
Committee. Chairman, President and Chief Executive Officer (effective January
2000), President an d Chief Executive Officer (1998 to 1999) of the Company and
South Jersey Gas Company (Gas Company). Vice President (1997-1998) of the
Company and Executive Vice President and Chief Operating Officer (1991-1998) of
Gas Company; director of New Jersey State Chamber of Commerce, Trenton, NJ;
director New Jersey Utilities Association, Trenton, NJ; trustee Shore Memorial
Hospital, Somers Point, NJ.
Richard L. Dunham, has been a director since 1984. Age 70. Member of the
Environmental Committee, the Executive Committee and the Nominating Committee.
Retired, formerly Chairman of the Board (1999), Chairman of the Board and Acting
Chief Executive Officer (1998), of the Company; 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 since September 1993 and was also a director
from April 1990 - January 1993. Age 55. Member of the Environmental Committee,
the Executive Committee and the Compensation/Pension Committee. Commissioner,
N.J. State Commission on Investigation (1997 to date); Managing Partner, Edwards
& Caldwell, 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).
- 3 -
DIRECTORS CONTINUING IN OFFICE
Class III
Terms Expire 2001
Thomas L. Glenn, Jr. has been a director since 1986. Age 65. Member of the Audit
Committee, the Executive Committee and Chairman of the Environmental Committee.
Chairman and Secretary (1984 to date) of Glenn Insurance, Inc., Absecon, NJ;
trustee, of AtlantiCare Foundation, Atlantic City, NJ; trustee and Chairman,
Laurelwood, a Lifecare Retirement Community, Pomona, NJ.
Herman D. James, Ph.D. has been a director since 1990. Age 56. Member of the
Compensation/Pension Committee, the Nominating Committee and Chairman of the
Audit Committee. Distinguished Professor, Rowan University (1998 to date),
President, Rowan University (1984 - 1998), Glassboro, NJ; director (1994 -
1998) American Association of State Colleges and Universities, Washington, DC;
director (1992 - 1998) New Jersey State Chamber of Commerce, Trenton, NJ.
Frederick R. Raring has been a director since 1995. Age 62. Member of the Audit
Committee, the Environmental Committee and the Nominating Committee. President
(1990 to date) of Seashore Supply Company, Atlantic City, NJ, a major
distributor of plumbing and heating supplies and materials.
- 4 -
<TABLE>
SECURITY OWNERSHIP
Directors and Management
<CAPTION>
Number of Shares
of Common Stock
Owned Beneficially
as of Jan. 21, 2000 (1) (2) Percent of Class
---------------------------- ----------------
<S> <C> <C>
Shirli M. Billings, Ph.D. 5,641 *
Charles Biscieglia 19,384
Sheila H. Coco 577
Richard L. Dunham 7,528
W. Cary Edwards 3,370
Thomas L. Glenn, Jr. 7,597
Herman D. James, Ph.D. 3,520
Clarence D. McCormick 7,528
Frederick R. 18,414
All current directors and executive
officers as a group (16 persons) 123,990(3) 1.1%
* Individual persons less than 1%.
<FN>
Notes:
(1) Based on information furnished by the Company's directors and executive
officers. Unless otherwise indicated, each person has sole voting and
dispositive power with respect to the Common Stock shown as owned by him
or her.
(2) Includes 274 shares awarded to each director in 1999, under a Restricted
Stock Program for Directors. Restricted stock owners have the power to
vote shares but no investment power with respect to the shares until
restrictions lapse.
(3) Includes options to purchase 1,500 shares of Common Stock exercisable
within 60 days of January 21, 2000.
</FN>
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors and executive officers are required to file reports with the
Securities and Exchange Commission, within specified monthly and annual due
dates, relating to their ownership of and transactions in the Company's Common
Stock. Richard L. Dunham, a director of the Company, reported on Form 5 one
single transaction that inadvertently was not reported earlier on Form 4.
Security Ownership of Certain Beneficial Owners
Based upon information available to the Company as of February 4, 2000, the
following person beneficially owns more than 5% of the Company's Common Stock.
Name and Address of Shares Beneficially Owned Percent of Class
Beneficial Owner
- ------------------- ------------------------- ----------------
Dimensional Fund Advisors, Inc. 707,110 6.34%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401-1005
- 5 -
THE BOARD OF DIRECTORS
Certain Transactions
Gas Company and other SJI subsidiaries have maintained banking relationships
for a number of years with The Farmers and Merchants National Bank of Bridgeton,
NJ, and we expect to continue these relationships. During 1999, Mr. McCormick,
a director of the Company, was Chairman and a director of this bank. The highest
aggregate amount owed to The Farmers and Merchants National Bank by SJI and its
subsidiaries was $5,000,000 in 1999. As of December 31, 1999, the amount of such
indebtedness was $4, 000,000. During 1999, the Company paid $156,769 of
interest with respect to this loan. Loans 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 t he Employee Thrift Plan and the Employee
Stock Ownership Plan. Gas Company also routinely does business with Seashore
Supply Company, whose president is Mr. Raring, a director of the Company. In
1999, Gas Company paid $111,896 to this company for purchases of pipe and
related fittings. These purchases were made through a competitive bid process.
Meetings of the Board of Directors And Its Committees
The Board of Directors of the Company met eight times in 1999. Each director
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 1999 was 97%. During
1999, each of the directors of the Company also served on the Boards of one or
more of Gas Company, South Jersey Energy Company (Energy), Energy & Minerals,
Inc. (EMI) or R&T Group, Inc. (R&T), the four direct subsidiaries of the
Company.
The Audit Committee of the Board of Directors, which met three times in
1999, is comprised of five nonemployee directors: Dr. Herman D. James, Chairman;
Dr. Shirli M. Billings; Sheila H. Coco; Thomas L. Glenn, Jr.; 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
five times in 1999, is comprised of four nonemployee directors: Clarence D.
McCormick, Chairman; Sheila H. Coco; W. Cary Edwards; and Dr. Herman D. James.
The Compensation/Pension Committee (1) is responsible for making grants under
and otherwise administering the Stock-Based Compensation Plan; (2) reviews and
makes recommendations to the Board of Directors on the operations, performance
and administration of the retirement plans, other employee benefit plans, and
employment policies; and (3) reviews and makes recommendations to the Board of
Directors on forms of compensation, including the performance and levels of
compensation of the officers of the Company.
- 6 -
The Environmental Committee of the Board of Directors, which met two times
in 1999, is comprised of five directors: Thomas L. Glenn, Jr., Chairman; Charles
Biscieglia; Richard L. Dunham; W. Cary Edwards; and Frederick R. Raring. The
Environmental Committee (1) reviews and evaluates management activities with
respect to environmental remediation of the Company's and its subsidiaries'
current and former properties and (2) oversees litigation against the Companys'
insurance carriers for the recover y of remediation costs.
The Executive Committee of the Board of Directors, which did not meet in
1999, is comprised of six directors: Charles Biscieglia, Chairman; Dr. Shirli M.
Billings; Richard L. Dunham; W. Cary Edwards; Thomas L. Glenn, Jr.; and Clarence
D. McCormick. 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 1999.
Members are: Dr. Shirli M. Billings, Chairman; Charles Biscieglia; Richard L.
Dunham; Dr. Herman D. James; Clarence D. McCormick; and Frederick R. Raring.
Among its functions, the Nominating Committee (1) maintains a list of
prospective candidates for director, including those recommended by
shareholders; (2) reviews the qualifications of candidates for director; and (3)
makes recommendations to the Board of Directors to fill vacancies and for
nominees for election to be voted on by the shareholders. The Nominating
Committee will consider nominees for the Board of Directors recommended by
shareholders and submitted in compliance with the Company's bylaws, in writing
to the Secretary of the Company.
Compensation of Outside Directors
Nonemployee directors receive annually, shares of restricted stock with a
market value of $8,000 and $950 for each meeting of the Board of the Company or
its subsidiaries attended, 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.
Nonemployee members of the Executive Committee are paid an annual retainer of
$13,000 and other nonemployee Board members receive an annual retainer of
$10,500. The Company has established a policy to recognize exceptional service
to the Company beyond that service normally provided by a board member. In 1999
no payments were made under this policy. Directors who are also officers of the
Company receive no separate compensation for serving on the Board. Nonemployee
Board members also receive $475 for each meeting of a Committee of the Board of
the Company or of a subsidiary 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.
- 7 -
<TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table
<CAPTION>
Long-Term
Annual Compensation Compensation
(a) (b) (c) (e) (f) (i)
Name Other
and Annual Restricted All Other
Principal Compen- Stock Compen-
Position(s) Year Salary sation(2) Awards(3) sation(4)
- ---------------------- ---- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Charles Biscieglia (1) 1999 $ 332,116 $ 9,721 $ 44,874 $ 11,016
Chairman, President & 1998 227,489 795 - 11,537
CEO; President 1997 169,500 658 - 9,534
of South Jersey
Gas Company
Edward J. Graham 1999 176,122 - 23,802 5,577
Vice President; Sr. 1998 141,265 - - 4,799
Vice President of 1997 118,750 - - 4,042
South Jersey Gas
Company; President
of South Jersey Energy
Company and President
of SJ EnerTrade, Inc.
David A. Kindlick 1999 171,090 193 23,120 5,577
Vice President; Sr. 1998 158,780 - - 5,406
Vice President of 1997 125,000 - - 4,246
South Jersey
Gas Company
Albert V. Ruggiero 1999 176,122 - 23,802 5,687
Vice President; Sr. 1998 139,598 - - 1,878
Vice President of 1997 121,250 - - 4,479
South Jersey
Gas Company
George L. Baulig 1999 140,898 - 19,053 8,337
Vice President and 1998 132,520 - - 8,827
Secretary; Sr. Vice 1997 126,250 - - 8,535
President and Secretary
of South Jersey Gas
Company and Secretary
of other Subsidiary
Companies
<FN>
Footnotes to Summary Compensation Table
(1) Charles Biscieglia was elected to the additional position of Chairman,
effective January 1, 2000.
(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. This includes the tax liability incurred by the
additional income. Amounts paid pursuant to this policy are included in column
(e) of the table.
(3) The aggregate number of shares of restricted stock granted to the named
executives is as follows: Charles Biscieglia - 1,578; Edward J. Graham - 837;
David A. Kindlick - 813; Albert V. Ruggiero - 837; and George L. Baulig - 670.
These shares will vest on December 31, 2002, three years after the end of the
year for which the shares were awarded. Ordinary dividends are paid on the
restricted shares and will be reinvested in additional restricted shares which
will vest on the same date as the original award. The value of these shares as
of December 31, 1999 is included in column (f) of the table.
- 8 -
(4) Column (i) includes employer contributions to the Thrift Plan, the income
value of group life insurance and the increase in vested benefit level of
deferred compensation contract. The 1999 values for these items are listed
below:
Biscieglia Graham Kindlick Ruggiero Baulig
Thrift Plan $4,800 $5,284 $5,020 $4,409 $4,227
Group Life Insurance 3,331 486 557 1,278 1,628
Deferred Compensation 2,885 - - - 2,482
Total Value $11,016 $5,770 $5,577 $5,687 $8,337
</FN>
</TABLE>
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<CAPTION>
(a) (b) (c) (d) (e)
Value
Number of Securities of Unexercised
Underlying 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>
David A. Kindlick - - 1,000 $ 3,750
Albert V. Ruggiero - - 500 1,875
</TABLE>
In 1987, the Company adopted a Stock-Based Compensation Plan (then called
the stock option and stock appreciation rights plan) for its officers and other
employees. The plan was amended in 1999 to include a provision for the grant of
restricted stock awards to officers and other employees. Of the 306,000 shares
authorized, options have been awarded for 87,750 shares, of which 83,250 have
been exercised. No options were granted under the plan in 1999; however 14,606
shares of restricted stock we re awarded to officers and other employees
including the named executives, in January 2000 with respect to 1999
performance.
The Company has employment agreements with certain of its officers,
including Messrs. Biscieglia, Graham, Kindlick, Ruggiero and Baulig. Each
agreement is for a three-year period ending September 30, 2002, and provides for
a base salary that will be reviewed periodically, but will not be less than what
was being paid at the beginning of the period. If a change of control (as
defined in the agreement) occurs, the agreement is automatically extended for
three 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 compensation during the preceding five
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 five
calendar years.
- 9 -
Executive Pension Plans
The following table illustrates the current retirement benefits under the
salaried employee pension plan, and the supplemental executive retirement plan,
assuming the executive retires at age 60.
<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 included in 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%. Assuming continued employment and retirement at age 60,
Messrs. Biscieglia, Graham, Kindlick, Ruggiero and Baulig will have,
respectively, 36, 36, 35, 19 and 42 years of credited service. No credit is
provided under the supplemental plan for more than 30 years of service.
Compensation/Pension Committee Report
on Executive Compensation
The Compensation/Pension Committee consists of four non-employee directors.
No member of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries. Among other charges, the Committee makes
recommendations to the Board about the Company's executive compensation
policies, practices and objectives; administers the Company's Stock-Based
Compensation Plan; and grants awards to selected key employees at its discretion
in consultation with the Chairman and/or CEO.
- 10 -
In 1998, the Committee reexamined its executive compensation philosophy by
drawing upon the experience and knowledge of its members in consultation with an
independent compensation consultant. This reexamination confirmed the mission
of the Company' s compensation policies - to attract and retain qualified
executive management. The Committee determined that executive compensation
should be more closely aligned with the interests of the Company's shareholders.
Toward this end, the Committee established an objective-based, incentive
compensation structure linking compensation to the Company's financial
performance goals.
Under this compensation plan, as the Company achieves its annual and long-
term performance objectives, executives are compensated at approximately the
average compensation level (50th percentile) paid to comparable executives in
the Company's peer group. In 1999, the Committee engaged its consultant to
define the final two phases of the executive compensation program, and has
determined to implement both phases in the year 2000. They are:
a long-term incentive program which will use the Plan's equity-based
instruments and total shareholder return, measured against industry peers,
over thirty-six month cycles; and
annual cash awards which are tied to earnings per share from continuing
operations and individual performance objectives.
Executive base salaries, including that of Mr. Charles Biscieglia, Chief
Executive Officer, were last adjusted in October 1998 to reflect then current
market levels as determined by a consultant. Executive base salaries for 1999,
including Mr. Biscieglia's salary, remain unchanged from 1998 levels and are
near the 50th percentile of the Company's peer group.
In 1999, no bonuses or stock options were granted. However, annual incentive
awards were granted in the form of restricted stock to executives, including Mr.
Biscieglia, in January of 2000 with respect to 1999 performance. The awards'
value was linked to the Company's 1999 earnings per share from continuing
operations. The Committee established an at-risk threshold target and maximum
incentive levels based upon 1999 performance. Awards are detailed in the Summary
Compensation Table.
The Committee continues to believe that at-risk compensation, both annual
and long-term, should represent a significant portion of total executive
compensation and has designed its program accordingly. The Committee also
believes that using a time-restricted, stock-based incentive compensation
element strongly encourages employees to conduct business in ways that promote
long-term shareholder value and helps to align management's interests with those
of the Company's shareholders.
Clarence D. McCormick, Chairman
Sheila H. Coco
W. Cary Edwards
Dr. Herman D. James
- 11 -
Stock Performance
The graph below indexes the cumulative total return on the Company's Common
Stock for the five-year period ended December 31, 1999. The graph assumes that
$100 was invested on December 31, 1993 in the Company's Common Stock, the S&P
500 and the S&P Utility Index and that all dividends were reinvested.
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
16.32%. This compares with 28. 56% for the Standard & Poor's 500 Index and
13.81% for the Standard & Poor's Utility Index.
Indexed Total Return Assuming Dividends Reinvested Over 5 Years
(Chart)
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100 137.59 169.18 225.63 290.11 351.16
S&P UTIL 100 142.17 146.60 182.88 209.72 190.06
SJI 100 137.06 154.07 203.81 185.28 212.93
</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
2000. 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
1999. During 1999, 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 p reparation 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 . A representative of Deloitte & Touche
LLP 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.
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ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1999 accompanies this proxy statement. The Annual Report is not
proxy soliciting material or a communication by which any solicitation is made.
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 or she was on that date a beneficial owner of such stock
entitled to vote at the Annual Meeting, the Company will send to that person,
without charge, a copy of its Annual Report on Form 10-K for 1999, as filed with
the Securities and Exchange Commission. Requests for this report should be
directed to George L. Baulig, Secretary, South Jersey Industries, Inc., 1 South
Jersey Plaza, 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 2001 Annual Meeting of Shareholders that is received by the Company after
November 11, 2000 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 $2,000 in market value of the Company's
securities for at least one yea r before the date of submission of the proposal
to the Company. In compliance with the Company's bylaws, shareholders 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 shareholder wishes
to raise at the meeting and (ii) persons, if any, the shareholder 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 2000 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
Vice President, Corporate Secretary
March 10, 2000
