Exhibit (10)(l)(j)
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SOUTH JERSEY INDUSTRIES, INC.
1997 Stock Option and Stock Appreciation Rights Plan
1. Purpose Of Plan
The purpose of the Plan is to assist the Company in retaining the
employment of valued employees by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in obtaining
the services of individuals whos e employment would be helpful to the
Company and would contribute to its success.
2. Definitions
(a) "Board" means the board of directors of the Parent Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee described in Paragraph 5.
(d) "Company" means South Jersey Industries, Inc. and each of
its Subsidiary Companies.
(e) Date of Grant" means the date on which an Option or SAR is
granted.
(f) "Fair Market Value" means on any given date the mean
between the highest and lowest prices of actual sales of
Shares on the principal national securities exchange on
which the Shares are listed on such date or, if there are
no such sales on such date, the mean between the closing
bid and asked prices of the Shares on such exchange on such
date.
(g) "Holder" means a person to whom an SAR has been granted
under the Plan, which SAR has not been exercised and has
not expired or terminated.
(h) "Incentive Stock Option" means an Option granted under the
Plan, designated by the Committee at the time of such grant
as an Incentive Stock Option and containing the terms
specified herein for Incentive Stock Options.
(i) "Non-Qualified Option" means an Option granted under the
Plan, designated by the Committee at the time of such grant
as a Non-Qualified Option and containing the terms
specified herein for Non-Qualified Options.
(j) "Option" means any stock option granted under the Plan and
described either in Paragraph 3(a) or 3(b).
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(k) "Optionee" means a person to whom an Option has been
granted under the Plan, which Option has not been exercised
and has not expired or terminated.
(l) "Parent Company" means South Jersey Industries, Inc.
(m) "SAR" means a stock appreciation right granted under the
Plan and described in Paragraph 3(c).
(n) "Share" or "Shares" means a share or shares of Common Stock
of the Parent Company.
(o) "Subsidiary Companies" means all corporations that, at the
time in question, are subsidiary corporations of the Parent
Company within the meaning of section 425(f) of the Code.
(p) "Ten Percent Shareholder" means a person who on the Date of
Grant owns, either directly or within the meaning of the
attribution rules contained in section 425(d) of the Code,
stock possessing more than ten percent of the total
combined voting power of all classes of stock of his or her
employer corporation or of its parent or subsidiary
corporations, as defined respectively in sections 425(e)
and (f) of the Code.
(q) "Value" of an SAR means the excess of the Fair Market Value
of a Share on the date of exercise of such SAR over the
Fair Market Value of a Share on the Date of Grant of such
SAR.
3. Rights To Be Granted
Rights that may be granted under the Plan are:
(a) Incentive Stock Options, which give the Optionee the right
for a specified time period to purchase a specified number
of Shares for a price not less than their Fair Market Value
on the Date of Grant;
(b) Non-Qualified Options, which give the Optionee the right
for a specified time period to purchase a specified number
of Shares for a price determined by the Committee on the
Date of Grant; and
(c) SARs, which give the Holder the right for a specified time
period, without payment to the Company, to receive the
Value of such SARS, to be paid in cash or Shares or a
combination of cash and Shares, the number and amount of
which shall be determined pursuant to Paragraph 8(e) below.
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4. Stock Subject To Plan
Not more than 266,777 Shares in the aggregate may be delivered
pursuant to the Plan upon exercise of Options or SARs. The Shares so
delivered may, at the option of the Company, be either treasury Shares or
Shares originally issued for such p urpose. If an Option or an SAR
covering Shares terminates or expires without having been exercised in
whole or in part, other Options or SARs may be granted covering the Shares
as to which the Option or SAR was not exercised.
5. Administration Of Plan
The Plan shall be administered by a committee of the Board, which
may be a standing committee of the Board and which shall be composed of not
less than three directors of the Parent Company, appointed by the Board,
none of whom shall be eligi ble (or shall have been eligible within one
year prior to the date of his or her appointment) to be granted Options or
SARs under the Plan or to be selected as a participant under any other
discretionary plan of the Company or any of its affiliates e ntitling him
or her to acquire stock, stock options or stock appreciation rights of the
Company or any of its affiliates.
6. Grant of Rights
The Committee may grant Options or SARs or both to eligible
employees of the Company.
7. Eligibility
(a) Eligible employees to whom Options and SARs may be granted
shall be officers and other key employees of the Company,
including employees who are also directors. Directors who
are not employees of the Company shall not be eligible.
(b) An Incentive Stock Option shall not be granted to a Ten
Percent Shareholder except on such terms concerning the
option price and period of exercise as are provided in
Paragraphs 8(a) and 8(f) with respect to such a person. A
Non-Qualified Option shall not be granted to a Ten Percent
Shareholder.
8. Option and SAR Agreements and Terms
All Options and SARs shall be granted within ten years from January
23, 1997 and be evidenced by Option agreements or SAR agreements which
shall be executed on behalf of the Parent Company and by the respective
Optionees or Holders. The term s of each such agreement shall be
determined from time to time by the Committee, consistent, however, with
the following:
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(a) Option Price. The option price per Share shall be
determined by the Committee but, in the case of Incentive
Stock Option, shall not be less than 100% of the Fair
Market Value of such Share on the Date of Grant. With
respect to any Incentive Stock Option granted to a Ten
Percent Shareholder, the option price per Share shall not
be less than 110% of the Fair Market Value of such Share on
the Date of Grant.
(b) Restrictions on Transferability. No Option or SAR shall be
transferable otherwise than by will or the laws of descent
and distribution and, during the lifetime of the Optionee
or Holder, shall be exercisable only by him or her. Upon
the death of an Optionee or Holder, the person to whom the
rights shall have passed by will or by the laws of descent
and distribution may exercise any Options or SARs only in
accordance with the provisions of Paragraph 8(f).
(c) Payment Upon Exercise of Options. Full payment for Shares
purchased upon the exercise of an Option shall be made in
cash or, at the election of the Optionee and as the
Committee may, in its sole discretion, approve, either (1)
by surrendering Shares with an aggregate Fair Market Value
equal to the aggregate option price, (2) by delivering such
combination of Shares and cash as the Committee may, in its
sole discretion, approve or (3) at the election of the
Optionee, and if the C ommittee, in its sole discretion
approves, by surrendering the Option in exchange for
issuance of a number of shares equal to the difference
between the exercise price of the Option and the Fair
Market Value of the Shares subject to the Option.
(d) Issuance of Certificates Upon Exercise of Options; Payment
of Cash. Only whole Shares shall be issuable upon exercise
of Options. Any right to a fractional Share shall be
satisfied in cash. Upon payment of the option price, a
certificate for the number of whole Shares and a check for
the Fair Market Value on the date of exercise of any
fractional Share to which the Optionee is entitled shall be
delivered to such Optionee by the Parent Company, provided,
however, that in the ca se of the exercise of a Non-
Qualified Option, the Optionee has remitted to his employer
an amount, determined by such employer, necessary to
satisfy applicable federal, state or local tax-withholding
requirements, or made other arrangements with his or her
employer for the satisfaction of such tax-withholding
requirements. The Parent Company shall not be obligated to
deliver any certificates for Shares until such Shares have
been listed (or authorized for listing upon official notice
of issuanc e) upon each stock exchange upon which
outstanding Shares of such class at the time are listed nor
until there has been compliance with such laws or
regulations as the Parent Company may deem applicable. The
Parent Company shall use its best efforts to effect such
listing and compliance.
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(e) Issuance of Certificates Upon Exercise of SARS; Payment of
Cash. Upon exercise of an SAR, its Value shall be payable
in cash, Shares, or in such combination of cash and Shares
as is selected by the Holder and approved by the Committee
in its sole discretion. Any Shares due upon exercise of an
SAR shall be delivered to the Holder by the Parent Company
and any payment of cash shall be made by the employer of
the Holder. The employer of the Holder shall deduct from
the amount of any cash so payable an amount necessary to
satisfy applicable federal, state, or local tax-withholding
requirements. If no cash is payable (or if the amount of
cash payable is insufficient to satisfy applicable tax-
withholding requirements), no Shar es shall be delivered by
the Parent Company to the Holder until the Holder remits to
his or her employer an amount, determined by such employer,
necessary to satisfy applicable federal, state, or local
tax-withholding requirements or makes other arra ngements
for the satisfaction of such tax-withholding requirements.
The Parent Company shall not be obligated to deliver any
certificates for Shares until such Shares have been listed
(or authorized for listing upon official notice of
issuance) upon each stock exchange upon which outstanding
Shares of such class at the time are listed nor until there
has been compliance with such laws or regulations as the
Parent Company may deem applicable. The Parent Company
shall use its best efforts to eff ect such listing and
compliance.
(f) Periods of Exercise Of Options and SARs. An Option or SAR
shall be exercisable in whole or in part at such time as
may be determined by the Committee and stated in the Option
or SAR agreement, provided, however, that, unless otherwise
determined by the Committee, no Option or SAR shall be
exercisable before one year or after five years from the
Date of Grant in the case of an Option or SAR granted to a
Ten Percent Shareholder, or before one year or after ten
years from the Date of Grant in all other cases, except as
provided below:
(i) In the event that an Optionee or Holder ceases to
be employed by the Company for any reason other
than retirement, disability or death, any Option or
SAR held by such Optionee or Holder shall not be
exercisable after the date the Optionee or Holder
ceases to be employed by the Company unless
otherwise determined by the Committee and set forth
in the Option or SAR agreement or a written
amendment thereto; provided, however, that in no
event shall an Option or SAR be exerci sable after
five years from the Date of Grant in the case of a
Ten Percent Shareholder or after ten years from the
Date of Grant in all other cases;
(ii) If an Optionee or Holder ceases to be employed by
the Company, and if such cessation of employment is
due to the disability (as determined by the
Committee) or the retirement of the Optionee or
Holder, he or she shall have the right to exercise
his or her Options or SARs until the last day of
the sixth month following cessation of employment,
or such longer period as the Committee may
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determine and set out in writing, even if the date
of exercise is within any time period prescribed by
the Plan prior to which such Option or SAR shall
not be exercisable; provided, however, that in no
event shall an Option or SAR be exercisable after
five years from the Date of Grant in the case of a
Ten Percent Shareholder or after te n years from
the Date of Grant in all other cases;
(iii) In the event that an Optionee or Holder ceases to
be employed by the Company by reason of his or her
death, any Incentive Stock Option, Non-Qualified
Option or SAR held by such Optionee or Holder shall
be exercisable, the pers on to whom the rights of
the Optionee shall be passed by will or by the laws
of descent and distribution until the last day of
the twelfth month folowing the date of the
Optionee's or Holder's death, or such longer period
as the Committee may determi ne and set out in
writing, even if the date of exercise is within any
time period prescribed by the Plan prior to which
such Option or SAR shall not be exercisable;
provided, however, that in no event shall an Option
or SAR be exercisable after five years from the
Date of Grant in the case of a Ten Percent
Shareholder or after ten years from the Date of
Grant in all other cases.
(g) Date of Exercise. The date of exercise of an Option or SAR
shall be the date on which written notice of exercise,
addressed to the Parent Company at its main office to the
attention of its Secretary, is hand delivered, telecopied
or mailed, first class postage prepaid; provided, however,
that the Parent Company shall not be obligated to deliver
any certificates for Shares pursuant to the exercise of an
Option or SAR until the Optionee shall have made payment in
full of the optio n price for such Shares. Each such
exercise shall be irrevocable when given. Each notice of
exercise must (i) specify the Incentive Stock Option, Non-
Qualified Option, SAR, or combination thereof, being
exercised; (ii) must, in the case of the exer cise of an
Option, include a statement of preference (which shall not
be binding on the Committee) as to the manner in which
payment to the Parent Company shall be made (Shares or cash
or a combination of Shares and cash); and (iii) must, in
the case of the exercise of an SAR, include a statement of
preference (which shall not be binding on the Committee) as
to the manner in which payment to the Holder shall be made
(Shares or cash or a combination of Shares and cash).
(h) Termination of Employment. For purposes of the Plan, a
transfer of an employee between two employers, each of
which is a Company, shall not be deemed a termination of
employment.
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(i) Multiple Grants of Incentive Stock Options, Non-Qualified
Options and SARs. The grant, exercise, termination or
expiration of any Incentive Stock Option, Non-Qualified
Option or SAR shall have no effect upon any other Incentive
Stock Option, Non-Qualified Option or SAR held by the same
Optionee or Holder; provided, however, that the Committee
may, in its sole discretion, provide in the Option
agreement or SAR agreement that the exercise of a certain
number of SARs is conditioned upon the exercise of a
certain number of Options or provide that an SAR shall
otherwise be attached to Options granted under the Plan.
All SARs which are attached to Options shall be subject to
the following terms:
(A) such SAR shall expire no later than the
Option to which it is attached,
(B) such SAR shall be for an amount no more
than the excess of the Fair Market Value of
the Shares subject to the attached Option
on the date such SAR is exercised over the
option price of such Option,
(C) such SAR shall be subject to the same
restrictions on transferability as the
Option to which it is attached,
(D) such SAR shall be exercisable only when the
Option to which it is attached is eligible
to be exercised,
(E) such SAR shall be exercisable only when the
Fair Market Value of the Shares subject to
the attached Option exceeds the option
price of such Option, and
(F) such SAR shall expire upon the exercise of
the Option to which it is attached.
Upon exercise of an SAR which is attached to an Option, the Option
to which the SAR is attached shall expire.
9. Limitation on Grant of Incentive Stock Options
The aggregate Fair Market Value (determined as of the time options
are granted) of the shares for which any employee may be granted incentive
stock options that first become exercisable in any one calendar year under
the Plan and any other pl an of his employer corporation and its parent and
subsidiary corporations, as defined respectively in sections 425(e) and (f)
of the Code, shall not exceed $100,000.
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10. Rights As Shareholders
Neither an Optionee nor a Holder shall have any right as a
shareholder with respect to any Shares subject to his or her Options or
SARs until the date of the issuance of a stock certificate to him or her
for such Shares.
11. Changes in Capitalization
In the event of a stock dividend, stock split, recapitalization,
combination, subdivision, issuance of rights, or other similar corporate
change, the Board shall make full anti-dilution adjustments in the
aggregate number of Shares that may b e covered by Options issued pursuant
to the Plan, the aggregate number of SARs that may be granted, the number
of Shares subject to, and the option price of, each then-outstanding
Option, the number of then-outstanding SARs and the Fair Market Value of
Shares upon which the Value of such SARs is based.
12. Mergers, Dispositions and Certain Other Transactions
If, during the term of any Option or SAR, the Parent Company or any
of the Subsidiary Companies shall be merged into or consolidated with or
otherwise combined with or acquired by another person or entity, or there
is a divisive reorganizatio n or a liquidation or partial liquidation of
the Parent Company, the Parent Company may choose to take no action with
regard to the Options or SARs outstanding or, notwithstanding any other
provision of the Plan, to take any of the following courses of action:
(a) Not less than 15 days or more than 60 days prior to any
such transaction, all Optionees and Holders shall be
notified that their Options and SARs shall expire on the
15th day after the date of such notice, in which event all
Optionees and Holders shall have the right to exercise all
of their Options and SARs prior to such new expiration
date; or
(b) The Parent Company shall provide in any agreement with
respect to any such merger, consolidation, combination or
acquisition that the surviving, new or acquiring
corporation shall grant options and stock appreciation
rights to the Optionees and Holders to acquire shares, or
stock appreciation rights in shares in such corporation
with respect to which the excess of the fair market value
of the shares of such corporation immediately after the
consummation of such merger, consolidat ion, combination or
acquisition over the option price, or the value of such
stock appreciation rights, shall not be greater than the
excess of the Fair Market Value of the Shares over the
option price of Options (or, in the case of an SAR, the
Value of such SAR), immediately prior to the consummation
of such merger, consolidation, combination or acquisition;
or
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(c) The Parent Company shall take such other action as the
Board shall determine to be reasonable under the
circumstances in order to permit Optionees and Holders to
realize the value of rights granted to them under the Plan.
13. Plan Not To Affect Employment
Neither the Plan nor any Option or SAR shall confer upon any
employee of the Company any right to continue in the employment of the
Company.
14. Interpretation
The Committee shall have the power to interpret the Plan and to
make and amend rules for putting it into effect and administering it. It
is intended that the Incentive Stock Options granted under the Plan shall
constitute incentive stock opt ions within the meaning of section 422A of
the Code, that the Non-Qualified Options shall constitute property subject
to federal income tax pursuant to the provisions of section 83 of the Code
and that the Plan shall qualify for the exemption availab le under Rule
16b-3 (or any similar rule) of the Securities and Exchange Commission. The
provisions of the Plan shall be interpreted and applied insofar as possible
to carry out such intent.
15. Amendments
The Plan may be amended by the Board, but any amendment that
increases the aggregate number of Shares that may be issued pursuant to the
Plan upon exercise of Options or SARs (otherwise than pursuant to Paragraph
11), that changes the class of eligible employees, or that otherwise
requires the approval of the shareholders of the Parent Company in order to
maintain the exemption available under Rule 16b-3 (or any similar rule) of
the Securities and Exchange Commission, shall require the approval of the
holders of such portion of the shares of the capital s tock of the Parent
Company present and entitled to vote on such amendment as is required by
applicable state law and the terms of the Parent Company's Articles of
Incorporation, as then in effect, to make the amendment effective. No
outstanding Opti on or SAR shall be affected by any such amendment without
the written consent of the Optionee, Holder or other person then entitled
to exercise such Option or SAR.
16. Securities Laws
The Committee shall have the power to make each grant under the
Plan subject to such conditions as it deems necessary or appropriate to
comply with the then-existing requirements of the Securities Act of 1933
or the Securities Exchange Act of 1934, including Rule 16b-3 (or any
similar rule) of the Securities and Exchange Commission.
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17. Effective Date and Term of Plan
The Plan shall become effective on the date on which the Plan is
adopted by the Board, and shall expire no later than 10 years from Board
adoption, unless sooner terminated by the Board. The Board shall submit
the Plan to the shareholders of the Parent Company for their approval
within 12 months of the grant of any Option intended to be an Incentive
Stock Option. Any Incentive Stock Option granted before the approval of
the Plan by the Parent Company's shareholders shall be expressly co
nditioned upon, and shall not be exercisable until, such approval.
18. General
Each Option or SAR shall be evidenced by a written instrument
containing such terms and conditions not inconsistent with the Plan as the
Committee may determine. The issuance of Shares on the exercise of an
Option or SAR shall be subject to all of the applicable requirements of the
New Jersey Business Corporation Act and other applicable laws, including
federal or state securities laws, and all Shares issued under the Plan
shall be subject to the terms and restrictions contained in the Articles of
Incorporation of the Parent Company, as amended from time to time. Among
other things, the Optionee or Holder may be required to deliver an
investment representation to the Company in connection with any exercise of
such Option or SAR or to agree to refrain from selling or otherwise
disposing of the Shares required for a specified period of time or on
specified terms.
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