Employment Agreement
between
William F. Ryan
and
South Jersey Industries, Inc.
as of June 17, 1994
Letter of Intent
dated as of June 17, 1994
Execution Copy
TABLE OF CONTENTS
Section 1. Employment. . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Duties and Responsibilities . . . . . . . . . . . . . . . . 2
3.1 Initial Period . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Subsequent Period. . . . . . . . . . . . . . . . . . . . . . 2
3.3 Negotiation of Post-Employment Status. . . . . . . . . . . . 3
Section 4. Outside Services. . . . . . . . . . . . . . . . . . . . . . 3
Section 5. Place of Performance. . . . . . . . . . . . . . . . . . . . 3
Section 6. Compensation and Expenses . . . . . . . . . . . . . . . . . 4
6.1 Base Salary. . . . . . . . . . . . . . . . . . . . . . . . . 4
6.2 Additional Benefits. . . . . . . . . . . . . . . . . . . . . 4
6.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.4 Services Furnished . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Reasons for Termination . . . . . . . . . . . . . . . . . . 5
7.1 Death. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.2 Disability . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.3 Retirement . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.4 Termination For Cause by the Company . . . . . . . . . . . . 6
7.5 Termination For Good Reason by the Executive . . . . . . . . 6
Section 8. Benefits upon Termination . . . . . . . . . . . . . . . . . 7
8.1 Termination by the Company for Cause . . . . . . . . . . . . 7
8.2 Termination by the Executive for Good Reason without a Change in
Control. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8.3 Termination by the Executive for Good Reason in connection with
a Change of Control. . . . . . . . . . . . . . . . . . . . . 8
8.4 Termination by the Company for Other Than Cause. . . . . . . 9
Section 9. Procedure for Termination . . . . . . . . . . . . . . . . . 9
9.1 Notice of Termination. . . . . . . . . . . . . . . . . . . . 9
9.2 Date of Termination. . . . . . . . . . . . . . . . . . . . . 9
Section 10. No Obligation to Mitigate Damages; No Effect on Other
Contractual Rights. . . . . . . . . . . . . . . 10
Section 11. Confidential Information . . . . . . . . . . . . . . . . . 10
Section 12. Papers . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 13. Noncompetition . . . . . . . . . . . . . . . . . . . . . . 11
Section 14. Enforcement. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 15. Survival . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 16. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 17.Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 18. Binding Effect and Non-Assignability . . . . . . . . . . . 12
Section 19. Legal Expenses . . . . . . . . . . . . . . . . . . . . . . 12
Section 20. Arbitration. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 21. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 12
Section 22. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 12
Section 23. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 24. Invalidity of Portion of Agreement . . . . . . . . . . . . 13
SOUTH JERSEY INDUSTRIES, INC.
Executive Employment Agreement
THIS AGREEMENT made as of the 17th day of June 1994, by and between
South Jersey Industries, Inc., a New Jersey corporation, having its
principal offices at Number One South Jersey Plaza, Route 54, Folsom, New
Jersey (the "Company"), and William F. Ryan (the "Executive").
W I T N E S S E T H
WHEREAS, the Company recognizes that the Executive's contribution to
the growth and success of the Company during the years has been substantial
and the Company desires to assure itself of the continued employment of the
Executive with the Company and to encourage his continued attention and
dedication to it in the best interests of the Company and its shareholders;
and
WHEREAS, the Company wishes to encourage the development of an
orderly succession as the Executive approaches retirement as an employee;
and
WHEREAS, the Executive is presently employed by the Company and its
subsidiaries as follows:
South Jersey Industries, Inc. - President and Chief Executive Officer;
South Jersey Gas Company - Chairman, President and Chief Executive Officer;
Energy & Minerals, Inc. - Chairman and Chief Executive Officer;
The Morie Company, Inc. - Chairman;
R&T Group, Inc. - Chairman and Chief Executive Officer; and
WHEREAS, the Executive presently serves on the following Boards of
Directors:
South Jersey Industries, Inc.;
South Jersey Gas Company;
Energy & Minerals, Inc. and its subsidiaries;
R&T Group, Inc. and its subsidiaries;
South Jersey Energy Company; and
WHEREAS, the Executive desires to remain and continue in the employ
of the Company 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 Executive, and
the Executive hereby agrees to continue to serve as an employee of the
Company, on the terms and conditions set forth herein.
Section 2. Term.
The term of this Agreement shall be for a period of five (5) years
beginning August 1, 1994, and ending on July 31, 1999.
Section 3. Duties and Responsibilities.
3.1 Initial Period.
Through July 31, 1997, (the "Initial Period"), the Executive
shall serve in the positions in which he presently serves and shall report
only to the Boards of Directors of the above-mentioned companies and their
duly authorized committees. During the Initial Period: (i) the Executive
shall perform such duties and services as are customarily performed by a
Chief Executive Officer and, by a Chairman of the Board where applicable
to a particular Company, and as are assigned to him by such Boards of
Directors and their duly authorized committees; (ii) the Executive shall
continue to serve on the Boards of Directors on which he is presently
serving, if elected, and the Company shall use its best efforts to cause
him to be so elected; and (iii) the provisions of this paragraph do not
preclude changes in the described positions, duties and services by mutual
agreement between the Company and the Executive. Except as provided in
Section 7.2, any such change without the Executive's express written
approval may constitute Good Reason for termination pursuant to Section
7.5.
3.2 Subsequent Period.
From August 1, 1997, through July 31, 1999, (the "Subsequent
Period"), the Executive shall serve as Chairman of the Board and Chief
Executive Officer of the Company and as Chairman of the Board of South
Jersey Gas Company, Energy and Minerals, Inc. and R&T Group, Inc. and shall
report only to the Boards of Directors of such companies and their duly
authorized committees. During the Subsequent Period (i) the Executive
shall perform such duties and services as are customarily performed by
a Chairman of the Board of the Company and its subsidiaries and Chief
Executive Officer of the Company and as are assigned to him by the Boards
of Directors of the companies and, when authorized by the Boards of
Directors, their committees and (ii) the Executive shall continue to serve
on the Boards of Directors of the companies if elected, and the Company
shall use its best efforts to cause him to be so elected.
3.3 Negotiation of Post-Employment Status.
Not later than the earlier of (i) August 1, 1997, (ii) the date
on which a search, duly authorized by the Company's Board of Directors,
commences for the Executive's successor outside of the Company's then-
existing employees, or (iii) the date on which negotiations, duly
authorized by the Company's Board of Directors, commences with a view to a
change in control (or a merger which would result in a change of control),
the Company through its Board of Directors or a committee of the board will
enter into negotiations with the Executive concerning his post-employment
status and benefits (other than those set forth in this Agreement). The
Company and the Executive recognize that an orderly transition will be
assisted if negotiations begin before August 1, 1997 and in any event are
concluded no later than August 1, 1998.
Section 4. Outside Services.
The Executive agrees to devote substantially all of his working time
and efforts to the business and affairs of the Company and shall not,
directly or indirectly, without the written consent of its Board of
Directors, render any service 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
Executive 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
Executive is not part of any control group of such corporation or entity.
The term "control group" shall include any combination of two or more
individuals or entities acting in concert for the purpose of controlling or
influencing, whether directly or indirectly, the management of such
corporation or entity. So long as it does not interfere with his duties
under this Agreement, the Executive shall have the right to serve as a
director of any other corporation or to acquire or hold investments or
securities in a corporation or entity in which the Executive is a part of a
control group upon the approval of the Board of Directors of the Company,
which approval shall not be unreasonably withheld.
Section 5. Place of Performance.
The Executive'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 prior consent, the Executive shall not be required to move his place of
permanent employment from this corporate headquarters building although the
Executive may be required to undertake reasonable domestic and
international travel from time to time consistent with his business travel
obligations.
Section 6. Compensation and Expenses.
6.1 Base Salary.
The Company shall pay to the Executive a Base Salary of not less
than $375,000.00 per annum as of October 1, 1993 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 Executive shall be entitled without limitation to participate in
the benefit plan or plans generally available to executive employees,
including the Chief Executive Officer. Those additional benefits (the
"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
Executive or his 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 except for such prohibition, by the Company to or
as directed by the Executive. 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 or as directed by the Executive shall be the amount that was prohibited
from being paid because of such statute or regulation. The Company will
continue to provide the Executive and his spouse, free of charge, the same
or substantially similar medical, hospitalization, prescription and major
medical coverages as are provided to the Chief Executive Officer of the
Company. Such medical benefits will continue to be provided to the
Executive for the remainder of his life and shall continue to be provided
to his spouse, if she survives him, for the remainder of her life.
6.3 Expenses.
In addition to the Base Salary and Additional Benefits, the
Company shall pay for and the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive 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 Executive with office space,
stenographic assistance and such other facilities and services as shall be
suitable to the Executive's position and adequate for the performance of
his duties.
Section 7. Reasons for Termination.
7.1 Death.
In the event of the Executive's death during the term of this
Agreement, he shall be entitled to such death benefits to which he is
otherwise entitled presently or which may be hereafter established by the
Company. In addition, in the event of the Executive's death during the
term of this Agreement, his Base Salary shall continue to be
paid to such beneficiary or beneficiaries as he may from time to time
designate in writing, or to his estate if he has made no such designation,
until the second anniversary of the date of his death. Payment shall not
be offset by group life insurance, but shall be offset by the Company's
voluntary death benefit. If the Executive's spouse survives him, the
Company will make available to his spouse after his death the same
assistance of a financial planner or other similar expert to assist the
surviving spouse as the Company customarily provides to its executive
officers from time to time. The provisions of this Section 7.1 shall
survive the termination of this Agreement.
7.2 Disability.
If the Executive shall be determined to be disabled in
accordance with the disability policy or plan of the Company, the Executive
may be removed from positions within the Company in which he then may be
serving. However, the Executive shall not be terminated as an employee of
the Company. The Executive shall be retained in such positions and given
such duties and responsibilities as are commensurate with his abilities at
the time. Any such reduction in the Executive's duties and
responsibilities by the Company based upon a reasonable determination of
his disability by the Board of Directors shall not constitute Good Reason
for termination pursuant to Section 7.5. The Executive shall be entitled
to such disability benefits, including short term and long term, to which
he is otherwise entitled presently or which may be hereafter established by
the Company. Until the Executive becomes entitled to such disability
benefits, he shall continue to be paid his Base Salary in accordance with
this Agreement. If the Executive becomes able to return to his full duties
and responsibilities during the term of this Agreement, the refusal or
failure of the Company to do so shall constitute Good Reason for
termination pursuant to Section 7.5. The determination of the disability
of the Executive shall be made by the Board of Directors in the exercise of
its reasonable discretion in accordance with procedures set forth in the
disability policies or plan.
7.3 Retirement.
If the Executive shall retire, he shall be entitled to such
pension and other benefits applicable to executive employees generally and
him specifically including, without limitation, those presently existing or
hereafter established by the Company; provided that, in determining the
total retirement benefit due from the Company and its pension or other
benefit plans, whenever the Executive's "Average Earnings" or "Final
Average Earnings" or "Final Average Compensation" shall be relevant to the
calculation of the amount of such pension or other benefits, such Average
Earnings or Final Average Earnings or Final Average Compensation shall be
determined for a period of not more than 36 months, and shall be based on
the highest such 36 consecutive months out of the final 60 months of the
Executive's employment, notwithstanding any longer period provided for in
any such pension or other benefit plan. If the Executive has reached age
60 (or such earlier age as shall have been fixed in any arrangement
established with the Executive's consent) at the time he retires, such
pension or other benefits shall not be reduced because of early retirement.
In no event shall payment made to the Executive pursuant to Section 8.3 be
taken into account for purposes of determining Average Earnings, Final
Average Earnings or Final Average Compensation.
7.4 Termination For Cause by the Company.
The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, the Company shall have "Cause" to terminate
the Executive's employment hereunder only for the following reasons: (1)
the willful and continued failure by the Executive to substantially perform
his duties hereunder other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or injury; (2) the
conviction of the Executive 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 Executive had no
reasonable cause to believe that the activities of which he was convicted
were unlawful and that such conviction will not materially impair his
ability to discharge his duties; (3) the willful engaging by the Executive
in misconduct which is materially injurious to the Company, monetarily or
otherwise; or (4) the continued inability of the Executive to perform his
duties by reason of alcoholism or drug abuse even after appropriate
rehabilitation services have been made available to him.
7.5 Termination For Good Reason by the Executive.
At any time during the term of this Agreement during which "Good
Reason" exists, the Executive may at his option terminate the Executive's
employment by giving the Notice of Termination specified in Section 9.1
(which will then become effective in accordance with the time period set
out in Section 9.2). For purposes of this Agreement, "Good Reason" shall
exist after any of the following circumstances have occurred, the Executive
has notified the Company that it has occurred, and the circumstance
continues unremedied for 60 days after the Executive has notified the
Company that the circumstance exists. The circumstances are: (1) the
assignment to the Executive by the Company, without the Executive's express
written approval, of duties inconsistent with the Executive's position,
duties, responsibilities, titles, offices or status with the Company or any
removal of the Executive from or any failure to re-elect the Executive to
any of such positions; (2) a reduction by the Company, not consistent with
the Company's general salary practice for Executives, in the Executive'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 in accordance with the Company's general salary
practice for Executives the Executive's Base Salary within twelve (12)
months after the Executive's last increase in Base Salary; (4) the
Company's failure to continue in effect any benefit plan or arrangement in
which the Executive is participating except for Company-wide modifications
or modifications which apply to all executives generally (provided that the
Executive 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 Executive's participation in and/or materially reduce
the Executive's benefits under any such benefit plan or arrangement or
which would deprive the Executive of any material fringe benefit enjoyed by
the Executive, except for Company-wide modifications or modifications which
apply to all executives generally (provided that the Executive 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 Executive's relocation to any place other than a
location outside of the location at which the Executive performed the
Executive's duties, except for required travel by the Executive on the
Company's business to an extent substantially consistent with the
Executive's business travel obligations; (6) any purported termination of
the Executive's employment which is not effected pursuant to a Notice of
Termination; or (7) the failure or refusal to reinstate the Executive after
he has recovered from a disability as provided in section 7.2.
Section 8. Benefits upon Termination.
8.1 Termination by the Company for Cause.
If the Executive's employment shall be terminated for Cause:
(a) (i) if the Executive shall have acted in good faith,
and as to any criminal conviction constituting such Cause the Executive had
no reasonable grounds to believe his conduct was unlawful, then the Company
shall pay the Executive his Base Salary for twelve (12) months after 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 Executive or other obligations to the Executive or his survivors
(except as otherwise provided by this Section) under this Agreement; or
(ii) if the Executive shall not have acted in good faith, or as to any
criminal conviction constituting such Cause the Executive had reasonable
ground to believe his conduct was unlawful, then after the Date of
Termination the Company shall have no further salary obligations to the
Executive or other obligations to the Executive or his survivors (except as
otherwise provided by this section) under this Agreement;
(b) the Executive 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 Executive under this Agreement shall terminate; and
(c) effective as of the Date of Termination, the
Executive 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 Executive for Good Reason without a
Change in Control.
If the Executive's employment shall be terminated by the
Executive for Good Reason in accordance with section 7.5, and no Change in
Control has occurred, the Company shall, from the date of Termination,
continue to pay the Executive the Executive's Base Salary for the remainder
of the year in which such terminations occurs and shall pay the Executive
$974,000. In addition, the Executive 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 Executive under this Agreement shall terminate and the
Company will continue to provide the Executive and his spouse, free of
charge, the same or substantially similar medical, hospitalization,
prescription and major medical coverages as are provided to the Chief
Executive Officer of the Company. Such medical benefits will continue to
be provided to the Executive for the remainder of his life and shall
continue to be provided to his spouse, if she survives him, for the
remainder of her life. Such payments and the provision of such benefits
shall be the Executive's sole and exclusive remedy for breach or for any
other cause of action arising out of his employment and the Company shall
have no further obligations or liability to the Executive or his survivors
(except as otherwise provided by this section) under this Agreement.
8.3 Termination by the Executive for Good Reason in connection
with a Change of Control.
If the Executive terminates this Agreement for Good Reason in
accordance with Section 7.5 following a Change in Control, the Company
shall, in lieu of the payments under Section 8.2, continue to pay the
Executive the Executive's Base Salary from the date of Termination for the
remainder of the then-current Agreement year and the Company shall pay as
severance pay an amount equal to 300% of a base amount determined to be the
average of the aggregate compensation paid to the Executive during the
three (3) 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 Executive 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 shall be in lieu of any payment to which the Executive might
otherwise be entitled to receive under the Company's Severance Policy.
For purposes of this Agreement a "Change in Control" of the
Company shall mean any of the following: (1) approval by the shareholders
of the Company without the recommendation and approval of the Board of
Directors of the Company of any plan or proposal for the consolidation,
merger, liquidation, dissolution or acquisition of the Company or all or
substantially all of its assets; (2) election to the Board of Directors of
the Company 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 the Company, unless the election or nomination for election by
the Company's shareholders of each such new director was recommended by a
majority of the Board of Directors of the Company; or (3) the acquisition
by any person of 20% or more of the stock of the Company having general
voting rights in the election of directors (for purposes of this clause
(3), the term "person" shall include any individual or entity or any
combination of two or more individuals or entities acting as a group for
the purpose of acquiring, holding or disposing of stock of the Company).
In addition, the Executive 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 Executive under this Agreement shall terminate. The
continuation of such payments and benefits shall be the Executive's sole
and exclusive remedy and the Company shall have no further obligations
or liability to the Executive or his survivors (except as otherwise
provided by this section) under this Agreement.
8.4 Termination by the Company for Other Than Cause.
If the Company terminates the Executive's employment for other
than Cause, the Executive shall be entitled to the payments specified in
Section 8.3, including the reduction in those payments by the application
of the provisions of the Internal Revenue Code referred to in Section 8.3,
even though such provisions are not required to be applied by their terms
because no change in control has occurred. In addition, the Company will
continue to provide the Executive and his spouse, free of charge, the same
or substantially similar medical, hospitalization, prescription and major
medical coverages as are provided to the Chief Executive Officer of the
Company. Such medical benefits will continue to be provided to the
Executive for the remainder of his life and shall continue to be provided
to his spouse, if she survives him, for the remainder of her life.
Section 9. Procedure for Termination.
9.1 Notice of Termination.
For 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
Executive's employment.
9.2 Date of Termination.
For the purposes of this Agreement, the "Date of Termination"
shall mean the date of the Executive'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 Executive may request and shall
be granted a hearing before the Board of Directors, at which time the Board
of Directors shall decide whether in its reasonable good faith opinion the
Executive 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 Executive 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 Executive under
this Agreement shall not be reduced by any compensation earned by the
Executive 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 Executive'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 Executive will not, during or after the term of this Agreement,
use for himself 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 Executive 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 Executive in connection with
his duties hereunder shall be the property of the Company, and the
Executive shall not have any property rights to such items when he is no
longer an employee of the Company.
Section 13. Noncompetition.
Unless the Executive requests in writing and is thereafter authorized
in writing to do so by the Company, the Executive will not, during the term
of this Agreement, or for one year following the end of the period during
which the Executive serves as a member of the Board of Directors,
regardless of 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. Enforcement.
The Executive acknowledges that in the event of his 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 15. Survival.
The provisions of Sections 6.2, 7.1, 8.2, 8.4, 11, 12, 13 and 14 and
this Section 15 shall survive the termination of this Agreement.
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 Industries, Inc.
Attn: Chairman of the Compensation/Pension Committee
Number One South Jersey Plaza
Route 54
Folsom, New Jersey 08037
with a copy to the Company's Secretary at the same address
William F. Ryan
207 School House Drive
Linwood, New Jersey 08221
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 Executive'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 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 Executive.
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 INDUSTRIES, INC.
By /S/ Richard L. Dunham
Richard L. Dunham, Chairman
Compensation/Pension Committee
/S/ William F. Ryan
William F. Ryan
South Jersey Industries, Inc.
Number 1 South Jersey Plaza, Route 54
Folsom, New Jersey 08037
June 17, 1994
William F. Ryan
President and Chief Executive Officer
South Jersey Industries, Inc.
Number 1 South Jersey Plaza
Route 54
Folsom, NJ 08037
Dear Bill,
In the course of our recent discussions concerning your
employment agreement with South Jersey Industries Inc. (the
"Company"), we considered a number of matters you proposed as non-
binding expressions of intention. Rather than include those matters
in the employment contract, we agreed with you in that contract that
the Company would enter into negotiations with you concerning those
matters no later than the earlier of (i) August 1, 1997, (ii) the
date on which a search, duly authorized by the Company's Board of
Directors, commences for the Executive's successor outside of the
Company's then-existing employees, or (iii) the date on which
negotiations, duly authorized by the Company's Board of Directors,
commences with a view to a change in control (or a merger which would
result in a change of control).
This letter is a record of those matters that we agreed to
defer until those negotiations when those matters will be considered
in the light of the then contemporary business environment.
1. You and the Company will seek to reach agreement on a
succession plan to become effective on your retirement. In
that connection the Company will seek your advice and take
into account your recommendations on the appropriate
persons to fill the various officer positions of the
Company and its subsidiaries.
2. It is your and our intent that you and the Company will
enter into a consulting agreement covering the seven year
period after your retirement. Under such an agreement you
will remain available to the Company as an advisor and
consultant, and the agreement will define your
responsibilities and remuneration during that period.
3. The remuneration to be paid to you under that consulting
agreement will be an amount between 10% and 30% of your
salary at retirement.
4. The Company will consider your continuing to serve on its
board of Directors following your retirement in the light
of the succession plan and state of the Company at that
time. The Committee takes note of your experience in
serving on the board and your expertise in the Company's
business and the value that experience and expertise brings
to the deliberations of the Board.
5. The Company will provide, to the extent then practical,
additional assistance beyond that already set forth in your
employment agreement to enable your wife or your designated
beneficiary to exercise any stock options that remain
unexercised on your death.
The matters expressed above are statements of intention
only, and do not and are not intended to confer any legal rights or
create any binding or legally enforceable obligations on you, the
Company or any third party. We and you understand that you are not
relying on the statements in this letter as an inducement to remain
in the Company's employ or to enter into the employment agreement
which is dated the same date as this letter.
If this letter conforms with your understanding, please
sign the additional copy and return it to the Company's secretary for
safe keeping as a record of the matters we will take up with you at
the agreed time.
The Compensation/Pension Committee
of The Board of Directors of
South Jersey Industries, Inc.
By: Richard L. Dunham
Chairman
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.