SOUTH JERSEY GAS COMPANY
Officer Employment Agreement
THIS AGREEMENT made as of the first day of August, 1994, by
and between South Jersey Gas Company, a New Jersey corporation,
having its principal offices at Number One South Jersey Plaza,
Route 54, Folsom, New Jersey (the "Company"), and (the "Officer").
W I T N E S S E T H :
WHEREAS, the Company, a subsidiary of South Jersey
Industries, Inc. ("SJI"), desires to assure itself of the
continued employment of the Officer by the Company or one or more
of its affiliates and to encourage his or her continued attention
and dedication to the Company in the best interests of the Company
and its shareholders; and
WHEREAS, the Officer is presently employed by the Company and
its affiliates as follows:
South Jersey Gas Company -
WHEREAS, the Officer desires to remain and continue in the
employ of the Company or one or more of its affiliates on the
terms hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
Section 1. Employment.
The Company hereby agrees to continue to employ the Officer
in the positions in which he or she presently serves, and the
Officer hereby agrees to continue to serve in those positions, on
the terms and conditions set forth herein.
Section 2. Term.
The term of this Agreement shall be for a period of three (3)
years beginning August 1, 1994, and ending on July 31, 1997.
Section 3. Duties and Responsibilities.
The Officer shall serve in the positions in which he or she
presently serves and shall report only to the Chief Executive
Officer of the Company and his duly authorized officers. The
Officer shall perform such duties and services as are customarily
performed by him or her and as are assigned to him or her by the
Chief Executive Officer of the Company and his duly authorized
officers.
Section 4. Outside Services.
The Officer agrees to devote substantially all of his or her
working time and efforts to the business and affairs of the
Company and shall not, directly or indirectly, without the written
consent of the Chief Executive Officer of the Company, render any
services to any other person, firm or entity, or own, manage,
operate, control or participate in the management of any other
person, firm or entity during the term of this Agreement. However,
the Officer is not prohibited or prevented from acquiring or
holding investments and securities listed on a national or
regional securities exchange or sold in an over-the-counter public
market, provided that the Officer is not part of any control group
of such corporation or entity. So long as it does not interfere
with his or her duties under this Agreement, the Officer shall
have the right to serve as a director of any other corporation
upon the approval of the Chief Executive Officer of the Company.
Section 5. Place of Performance.
The Officer's services during the term of this Agreement
shall be performed primarily in the corporate headquarters
building of the Company at Number One South Jersey Plaza, Route
54, Folsom, New Jersey. Without his or her prior consent, the
Officer shall not be required to move his or her place of
permanent employment from this corporate headquarters building,
although the Officer may be required to undertake reasonable
domestic and international travel from time to time consistent
with his or her business travel obligations.
Section 6. Compensation and Expenses.
6.1 Base Salary.
During the period of the Officer's employment under this
Agreement, the Company shall pay to the Officer a Base Salary of
not less than $_______ per annum in twenty-four (24) equal
installments as nearly as practicable on the fifteenth (15th) and
last days of each month, in arrears. The amount of this Base
Salary shall be reviewed annually in accordance with the normal
business practices of the Company.
6.2 Additional Benefits.
In addition to the Base Salary, the Company shall pay for and
the Officer shall be entitled without limitation to participate in
any employee or executive benefit plan presently in effect or
hereafter adopted by the Company which is applicable to employees
or executive employees generally. Those additional benefits
presently in force are listed on Exhibit A, which is attached
hereto and made a part hereof. If employer contributions to any
such plan (other than a defined benefit plan) for the benefit of
the Officer or his or her dependents or beneficiaries are reduced
in amount by any statute or regulation from the payments that
would otherwise be so made but for such statute or regulation, the
amount that is prohibited from being paid to such plan because of
such statute or regulation, increased if necessary as provided in
the next sentence, shall be paid, at the time it would have been
paid to such plan except for such prohibition, by the Company to
an Employee Stock Purchase Plan account for the Officer. Such
amount shall be increased if necessary so that, after federal and
state income taxes on the amount as so increased are taken into
account, the net amount after such taxes that is to be paid to an
Employee Stock Purchase Plan account for the Officer shall be the
amount that was prohibited from being paid to such plan because of
such statute or regulation.
6.3 Expenses.
In addition to the Base Salary and Additional Benefits, the
Company shall pay for and the Officer shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Officer in performing services under this Agreement, including all
expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Company,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures presently or hereafter
established by the Company.
6.4 Services Furnished.
The Company shall furnish the Officer with office space,
stenographic assistance and such other facilities and services as
shall be suitable to the Officer's position and adequate for the
performance of his or her duties.
Section 7. Reasons for Termination.
7.1 Death.
This Agreement shall terminate upon the Officer's death, and
he or she shall be entitled to such death benefits to which he or
she is otherwise entitled presently or which may be hereafter
established by the Company.
7.2 Disability.
If the Officer shall be determined to be disabled in
accordance with the disability policy or plan of the Company, the
Officer may be removed from positions within the Company in which
he or she then may be serving. However, the Officer shall not be
terminated as an employee of the Company. The Officer shall be
retained in such positions and given such duties and
responsibilities as are commensurate with his or her abilities at
the time. The Officer shall be entitled to such disability
benefits, including short term and long term, to which he or she
is otherwise entitled presently or which may be hereafter
established by the Company. Until the Officer becomes entitled to
such disability benefits, he or she shall continue to be paid his
or her Base Salary in accordance with this Agreement. The
determination of the disability of the Officer shall be made by
the Chief Executive Officer of the Company in the exercise of his
discretion in accordance with procedures set forth in the
disability policies or plan.
7.3 Retirement.
If the Officer shall retire, he or she shall be entitled to
such pension and other benefits applicable to executive employees
generally and him or her specifically including, without
limitation, those presently existing or hereafter established by
the Company.
7.4 For Cause by the Company.
The Company may terminate the Officer's employment for Cause.
For purposes of this Agreement, the Company shall have "Cause" to
terminate the Officer's employment hereunder only for the
following reasons: (1) the willful and continued failure by the
Officer to substantially perform his or her duties hereunder other
than any such failure resulting from the Officer's incapacity due
to physical or mental illness or injury; (2) the conviction of the
Officer of a crime under state or federal law and the Company's
Board of Directors or one of its committees is unable to conclude
in good faith (and in its sole discretion) that the Officer had no
reasonable cause to believe that the activities of which he or she
was convicted were unlawful and that such conviction will not
materially impair his or her ability to discharge his or her
duties; (3) the willful engaging by the Officer in misconduct
which is materially injurious to the Company, monetarily or
otherwise; or (4) the continued inability of the Officer to
perform his or her duties by reason of alcoholism or drug abuse
even after appropriate rehabilitation services have been made
available to him or her.
7.5 For Good Reason by the Officer.
The Officer may terminate the Officer's employment for Good
Reason following a Change of Control of the Company at any time
during the term of this Agreement. For purposes of this
Agreement, "Good Reason" shall mean any of the following: (1) the
assignment to the Officer by the Company, without the Officer's
express written approval, of duties inconsistent with the
Officer's position, duties, responsibilities, titles, offices or
status with the Company immediately prior to a Change of Control
of the Company, or any removal of the Officer from or any failure
to re-elect the Officer to any of such positions; (2) a reduction
by the Company not consistent with the Company's general salary
practice for Officers, in the Officer's Base Salary as in effect
on the date hereof or as the same is increased from time to time
during the term of this Agreement; (3) the Company's failure to
review and increase in accordance with the Company's general
salary practice for Officers the Officer's Base Salary within
twelve (12) months after the Officer's last increase in Base
Salary; (4) the Company's failure to continue in effect any
benefit plan or arrangement in which the Officer is participating
except for Company-wide modifications or modifications which apply
to all officers generally (provided that the Officer shall enjoy
at least the same benefits available to all employees generally),
or the taking of any action by the Company which would adversely
affect the Officer's participation in and/or materially reduce the
Officer's benefits under any such benefit plan or arrangement or
which would deprive the Officer of any material fringe benefit
enjoyed by the Officer, except for Company-wide modifications or
modifications which apply to all officers generally (provided that
the Officer shall enjoy at least the same benefits available to
all employees generally); (5) a relocation of the Company's
corporate headquarters to a location outside of Folsom, New
Jersey, or the Officer's relocation to any place other than the
location at which the Officer performed the Officer's duties
except for required travel by the Officer on the Company's
business to an extent substantially consistent with the Officer's
business travel obligations; (6) any purported termination of the
Officer's employment which is not effected pursuant to a Notice of
Termination. For purposes of this Agreement a "Change of Control"
of the Company shall mean any of the following: (1) approval by
the shareholders of SJI without the recommendation and approval of
the Board of Directors of SJI of any plan or proposal for the
consolidation, merger, liquidation, dissolution or acquisition of
SJI or all or substantially all of its assets; (2) election to the
Board of Directors of SJI of a new majority different from the
individuals who at the beginning of the term of this Agreement
constituted the entire Board of Directors of SJI, unless the
election or nomination for election by SJI's shareholders of each
such new director was approved by the Chief Executive Officer of
SJI; or (3) the acquisition by any person of 20% or more of the
stock of SJI having general voting rights in the election of
directors (for purposes of this clause (3), the term "person"
shall include two or more persons acting as a group for the
purpose of acquiring, holding or disposing of stock of SJI).
Section 8. Benefits upon Termination.
8.1 Termination by the Company for Cause.
If the Officer's employment by the Company shall be
terminated for Cause (as defined in Section 7.4), the Company
shall pay the Officer his or her Base Salary through the Date of
Termination at the rate in effect at the time Notice of
Termination is given and the Company shall have no further salary
obligations to the Officer under this Agreement. The Officer
shall be entitled to such retirement benefits as he or she may
otherwise be entitled to on the Date of Termination. Effective as
of the Date of Termination, the Officer shall no longer be an
employee of the Company and shall no longer be entitled to the
privileges and benefits thereof.
8.2 Termination by the Officer for Good Reason.
If the Officer's employment shall be terminated by the
Officer for Good Reason following a Change of Control (as defined
in Section 7.5), the Company shall pay the Officer as severance
pay an amount equal to 300% of a base amount determined to be the
average of the aggregate annual compensation paid to the Officer
during the five (5) calendar years preceding the Date of
Termination and subject to federal income taxes; provided that, if
any lump-sum severance payment, either alone or together with any
other payment which the Officer has the right to receive from the
Company, would constitute a "parachute payment" as defined in
Section 280G of the Internal Revenue Code of 1986, as amended,
such lump-sum severance payment shall be reduced to the largest
amount as will result in no portion of the lump-sum payment being
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended. The Company shall pay this
lump-sum severance payment, in cash, on the Date of Termination.
The payments under this section should be in lieu of any payment
to which the Officer might otherwise be entitled to receive under
the Company's Severance Policy.
8.3 Termination by the Company for Other than Cause.
If the Company terminates the Officer's employment for other
than Cause following a Change of Control, the Officer shall be
entitled to those benefits set forth in paragraph 8.2 above. If
the Company terminates the Officer's employment for other than
Cause without a Change of Control (as defined in Section 7.5), the
Officer shall be only entitled to those benefits of the Severance
Plan presently in effect or hereafter adopted by the Company.
In addition, the Officer shall be entitled to such retirement
benefits as he may otherwise be entitled to on the Date of
Termination, and such retirement shall be deemed to occur when the
Company's salary obligations to the Officer under this Agreement
shall terminate. The continuation of such payments and benefits
shall be the Officer's sole and exclusive remedy and the Company
shall have no further obligations or liability to the Officer or
his survivors (except as otherwise provided by this section) under
this Agreement.
Section 9. Procedure for Termination.
9.1 Notice of Termination.
For the purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Officer's employment.
9.2 Date of Termination.
For the purposes of this Agreement, the "Date of Termination"
shall mean the date of the Officer's death; or thirty (30) days
after Notice of Termination is given; provided that if within ten
(10) days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that
a dispute exists concerning the termination, the date of
termination shall be extended for an additional period not to
exceed ten (10) days. During the period between Notice of
Termination and the Date of Termination the Officer may request
and shall be granted a hearing before the Board of Directors of
the Company, at which time the Board of Directors shall decide
whether in its reasonable good faith opinion the Officer was
either disabled or discharged for Cause and specifying the
particulars thereof in detail.
Section 10. No Obligation to Mitigate Damages; No Effect on
Other Contractual Rights.
10.1 The Officer shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise.
10.2 The amount of any payment provided to the Officer under
this Agreement shall not be reduced by any compensation earned by
the Officer as the result of employment by another employer after
the Date of Termination.
10.3 The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish the Officer's existing rights, or
rights which would accrue solely as a result of the passage of
time under any plan of benefits provided to officers and managers
of the Company.
Section 11. Confidential Information.
The Officer will not, during or after the term of this
Agreement, use for himself or herself or others, or disclose to
others, any formulae, trade secrets, customer lists, know-how or
other confidential information of or about the Company or any of
its affiliates unless authorized in writing to do so by the
Company. The Officer understands that this undertaking applies to
information of a technical or commercial or other nature and that
any information not made available to the general public is to be
considered confidential.
Section 12. Papers.
All correspondence, memoranda, notes, records, reports, plans
and other papers and items received or made by the Officer in
connection with his or her duties hereunder shall be the property
of the Company, and the Officer shall not have any property rights
to such items when he or she is no longer an employee of the
Company.
Section 13. Noncompetition.
Unless the Officer requests in writing and is thereafter
authorized in writing to do so by the Company, the Officer will
not, during the term of this Agreement, or for a period of one (1)
year thereafter, regardless whether the termination was for Cause,
for Good Reason, or for other than Cause, directly or indirectly
own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or
otherwise connected in any manner with, any business which at any
time during said period competes with the Company or which uses
any name similar to the Company's name.
Section 14. Renewal and Extension of Agreement.
The term of this Agreement shall be automatically renewed and
extended for a period of three (3) years from the date of any
Change of Control in order that the Officer obtains the full
benefit of all severance benefits in the event of termination of
employment after any Change of Control.
This Agreement, either under its normal three (3) year term
or under the term resulting from a Change of Control, shall be
considered for renewal and extension by the Board of Directors of
the Company or such committee thereof as it may designate at least
six (6) months prior to the end of its term. Action by the Board
of Directors shall be required to renew and extend this Agreement.
Section 15. Enforcement.
The Officer acknowledges that in the event of his or her
breach or threat of breach of Sections 11, 12 or 13 of this
Agreement, the Company's remedies at law will be inadequate and,
in such event, the Company will be entitled to appropriate
injunctive and other equitable relief in addition to its legal
remedies.
Section 16. Notices.
All notices and other communications provided for herein that
one party intends to give to the other party shall be in writing
and shall be considered given when mailed by certified mail,
return receipt requested, or personally delivered, either to the
party or at the address set forth below (or to such other address
as a party shall designate by notice hereunder):
South Jersey Gas Company
Attn: Chief Executive Officer
Number One South Jersey Plaza
Route 54
Folsom, New Jersey 08037
Section 17. Amendments.
This Agreement may be amended, modified, superseded,
canceled, renewed or extended only by a written instrument
executed by both parties hereto.
Section 18. Binding Effect and Non-Assignability.
This Agreement shall inure to the benefit of the Officer's
heirs and personal representatives and shall be binding upon the
successor of the Company, including any entity with which the
Company may be merged or consolidated or which may acquire all or
substantially all of the assets of the Company. This Agreement
shall not be assignable, in whole or in part, by either party,
without the written consent of the other party.
Section 19. Legal Expenses.
In the event of a dispute in connection with this Agreement,
the parties shall each pay their own costs, except that in the
event of such a dispute after a Change of Control involving
termination of employment, or involving entitlement to
compensation or benefits in the event of termination of
employment, the Company shall pay the legal expenses of the
Officer.
Section 20. Arbitration.
Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in
the County of Atlantic, State of New Jersey, in accordance with
the rules then in effect of the American Arbitration Association,
and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.
Section 21. Governing Law.
This Agreement shall be governed by the laws of the State of
New Jersey.
Section 22. Entire Agreement.
This Agreement contains the entire agreement between the
parties relative to its subject matter, superseding all prior
agreements or understandings of the parties relating thereto.
Section 23. Waiver.
Any term or provision of this Agreement may be waived in
writing at any time by the party entitled to the benefit thereof.
The failure of either party at any time to require performance of
any provision of this Agreement which has not been waived in
writing shall not affect such party's rights at a later time to
enforce such provision. No consent or waiver by either party to
any default or to any breach of a condition or term of this
Agreement shall be deemed or construed to be a consent or waiver
to any other breach or default.
Section 24. Invalidity of Portion of Agreement.
If any provision of this Agreement or the application thereof
to either party shall be invalid or unenforceable to any extent,
the remainder of this Agreement shall not be affected thereby and
shall be enforceable to the fullest extent of the law.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement effective as of the date first above written.
SOUTH JERSEY GAS COMPANY
By_________________________________
William F. Ryan,
Chief Executive Officer
___________________________________
EXHIBIT A
LIST OF OFFICERS' BENEFITS
1. Group Hospital, Surgical and Medical Insurance Plan
2. Major Medical Plan
3. Group Dental Plan
4. Group Prescription Drug Plan
5. Temporary Disability Plan
6. Long Term Disability Plan
7. Group Life Insurance Plan
8. 24-Hour Accident Protection Coverage
9. Supplementary Survivor's Benefit
10. Thrift Plan
11. Employees Stock Ownership Plan
12. Retirement Plan for Employees
13. Supplemental Executive Retirement Plan
14. Deferred Compensation Contract
15. Officers' Liability Insurance
16. Company Automobile
17. Tuition Refund Plan
18. Vacation
19. Holiday Schedule
20. Time Off w/Pay for Jury Duty, Death in Family or Marriage
21. Annual Physical Examination
22. Health Club Membership
23. Country Club House Membership
24. Severance Pay Plan
EXHIBIT A
SCHEDULE 1
DISABILITY AND DEATH BENEFITS
1. Temporary Disability (Sick Pay): - Officers
Commences on 8th consecutive day of absence. Paid @ 100% of
base salary and extends at full pay based on years of service as
follows:
Service: Maximum Benefit
Under 5 Years 120 Days
5 Years or more 365 Days
2. Long-Term Disability: - Officers
Eligibility Begins: After 1 year of service
Benefit Can Begin: Upon Expiration of Temporary Disability Benefits
Benefit: 50% of Salary, reduced by other disability income(ie.Soc Sec).
1. Benefit continues until status is changed by virtue of
rehabilitation, retirement, death, etc.
2. Medical certification for first two years of disability
against "own position". Thereafter, certification against
"any position". However, replacement may be required after one year.
3. Group Life Insurance: - Officers
Two times annual salary rounded to next higher $5,000
4. 24 Hour Accident Protection Insurance: - Officers
$250,000 Death Benefit
5. Company Paid Death Benefit (Uninsured) & Suppl. Survivor's Benefit
Benefit
Lump Sum $1,000
Service:
10-15 Years 6 Months Salary
15-25 Years 9 Months Salary
25 or More 12 Months Salary
Payment of uninsured amount is offset by pension proceeds in year of death
6. Retirement Plan Death Benefit: (Pre-retirement)
Service:
5 Years or More 50% of Accrued Benefit payable to
spouse only.
EXHIBIT A
SCHEDULE 2
South Jersey Industries, Inc.
Officer Severance Program Summary
1. Officer Participation - All officers of South Jersey Industries,
Inc. are immediately covered by this program upon being elected
officers and satisfying the age and service requirements of the
specific plans. The cost of the program will be paid entirely by
the employer unless otherwise noted.
2. Officer Severance Plan
- Participation - immediate
- Basic benefit - weekly salary times years of service.
Minimum of 12 weeks; accrual of two weeks times years of
service to a maximum of 40 weeks, except that any officer
who is or may become a party to an "Employment Agreement"
shall receive one year's salary as a basic benefit without
consideration of a service period.
- Outplacement counselling services - up to 20% of pay to a
maximum of $15,000, at the discretion of the chief Executive
Officer for all other officers and at the discretion of the
compensation Committee of the Board of Directors of the
company in the case of the Chief Executive Officer.
- Death benefits - at officer's expense, benefits may
continue.
- Disability benefits - terminate upon severance.
- Health benefits - at officer's expense, benefits may
continue.
- Company car - given title at severance, at the discretion of
the chief Executive Officer for all other officers and at
the discretion of the Compensation Committee of the Board of
Directors of the Company in the case of the Chief Executive
Officer.