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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
New Jersey Resources Corporation
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
------------------------
PROXY STATEMENT AND
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 1998
------------------------
The Annual Meeting (the "Meeting") of Stockholders of New Jersey Resources
Corporation (the "Company") will be held at 10:30 a.m., Wednesday, January 28,
1998, at the Wyndham Garden Hotel, International Trade Center, 1000
International Drive, Mt. Olive, New Jersey 07828, for the following purposes:
1. To elect four directors to the Board of Directors.
2. To approve the action of the Board of Directors in retaining
Deloitte & Touche LLP as auditors for the fiscal year ending September 30,
1998.
3. To transact any other business that may properly be brought before
the Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on December 8, 1997,
as the record date for the determination of the stockholders entitled to notice
of and to vote at the Meeting. Accordingly, only stockholders of record at the
close of business on that date will be entitled to vote at the Meeting.
A copy of the Company's Annual Report for 1997 has either been mailed to
all stockholders or is being mailed concurrently with this proxy material.
A cordial invitation is extended to you to attend the Meeting. If you do
not expect to attend the Meeting, please sign, date and return the enclosed
proxy promptly to the Secretary in the enclosed envelope.
OLETA J. HARDEN
Secretary
Wall, New Jersey
December 30, 1997
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PROXY STATEMENT
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NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
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ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 1998
This proxy statement sets forth certain information with respect to the
accompanying proxy to be used at the Annual Meeting (the "Meeting") of
Stockholders of New Jersey Resources Corporation (the "Company"), or at any
adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. The Board of Directors of the Company
(the "Board") solicits this proxy and urges you to sign, date, and return it
immediately to the Secretary of the Company. The prompt cooperation of the
stockholders is necessary in order to ensure a quorum and to avoid unnecessary
expense and delay.
The proxies hereby solicited vest in the proxy holders voting rights with
respect to the election of directors (unless the stockholder marks the proxy so
as to withhold that authority) and on all other matters voted upon at the
Meeting. The shares represented by each duly executed proxy will be voted and,
where a choice is specified by the stockholder on the proxy, the proxy will be
voted in accordance with the specification so made. As provided by New Jersey
law, abstentions, broker non-votes and withheld votes will not be included in
the total number of votes cast, and therefore will have no effect on the vote.
The proxy is revocable on written instructions or by a later dated proxy,
signed in the same manner as the proxy, and received by the Secretary of the
Company at any time at or before the balloting on the matter with respect to
which such proxy is to be exercised. If you attend the Meeting you may, if you
wish, revoke your proxy by voting in person. This proxy statement and the
accompanying proxy materials are being mailed to stockholders on or about
December 30, 1997.
PLACE OF ANNUAL MEETING
The Board has designated the Wyndham Garden Hotel, International Trade
Center, 1000 International Drive, Mt. Olive, New Jersey 07828, as the place of
the Meeting. The Meeting will be called to order at 10:30 a.m., local time, on
Wednesday, January 28, 1998.
VOTING OF SECURITIES AND STOCKHOLDER INFORMATION
Only holders of record of the Company's outstanding Common Stock at the
close of business on December 8, 1997, are entitled to notice of and to vote at
the Meeting. At the close of business on December 8, 1997, there were 17,862,730
outstanding shares of Common Stock. Each share is entitled to one vote. No
person to the knowledge of the Company held beneficially 5% or more of the
Company's Common Stock as of December 8, 1997.
The following table sets forth, as of December 8, 1997, the beneficial
ownership of equity securities of the Company of each of the directors and each
of the executive officers of the Company listed in the Summary
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Compensation Table below, and of all directors and executive officers of the
Company as a group. The shares owned by all such persons as a group constitute
approximately 1% of the total shares outstanding.
TITLE OF AMOUNT AND NATURE OF
NAME SECURITY BENEFICIAL OWNERSHIP(1)(2)
------------------------------------------ ------------ -----------------------------
Bruce G. Coe.............................. Common Stock 6,100 shares -- Direct
3,000 shares -- Indirect
Leonard S. Coleman........................ Common Stock 2,200 shares -- Direct
Laurence M. Downes........................ Common Stock 36,516 shares -- Direct
1,048 shares -- Indirect
Joe B. Foster............................. Common Stock 3,229 shares -- Direct
2,000 shares -- Indirect
Hazel S. Gluck............................ Common Stock 3,205 shares -- Direct
Oleta J. Harden........................... Common Stock 16,789 shares -- Direct
80 shares -- Indirect
Timothy C. Hearne......................... Common Stock 14,210 shares -- Direct
297 shares -- Indirect
Lester D. Johnson......................... Common Stock 4,200 shares -- Direct
Dorothy K. Light.......................... Common Stock 6,750 shares -- Direct
36 shares -- Indirect
Glenn C. Lockwood......................... Common Stock 14,254 shares -- Direct
Joseph P. Shields......................... Common Stock 7,887 shares -- Direct
9 shares -- Indirect
Charles G. Stalon......................... Common Stock 6,519 shares -- Direct
John J. Unkles, Jr........................ Common Stock 8,233 shares -- Direct
Gary W. Wolf.............................. Common Stock 1,202 shares -- Direct
George R. Zoffinger....................... Common Stock 7,200 shares -- Direct
All Directors and Executive Officers as a
Group................................... Common Stock 181,518 shares -- Direct
6,489 shares -- Indirect
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(1) The number of shares owned and the nature of each ownership, not being
within the knowledge of the Company, have been furnished by each individual.
(2) Includes shares subject to currently exercisable options or any options
exercisable within the next 60 days as follows: Mr. Coe -- -0- shares; Mr.
Coleman -- 2,000 shares; Mr. Downes -- 30,074 shares; Mr. Foster -- 3,000
shares; Ms. Gluck -- 3,000 shares; Mrs. Harden -- 11,163 shares; Mr.
Hearne -- 10,000 shares; Mr. Johnson -- 3,000 shares; Mrs. Light -- 2,000
shares; Mr. Lockwood -- 10,219 shares; Mr. Shields -- 5,350 shares; Dr.
Stalon -- 3,000 shares; Mr. Unkles -- 3,000 shares; Mr. Wolf -- 1,000
shares; Mr. Zoffinger -- 1,000 shares; and all directors and executive
officers as a group -- 116,586 shares.
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ELECTION OF DIRECTORS
[ITEM (1) ON PROXY CARD]
ITEM 1
The Board of Directors currently consists of twelve members divided into
three classes with overlapping three-year terms. Mr. Haas is retiring from the
Board of Directors, effective as of the date of the Meeting, and is not being
replaced at this time; therefore, subsequent to the Meeting, the Board of
Directors will consist of eleven (11) members.
Four individuals have been nominated for election as directors at the
Meeting, one to serve for a one-year term expiring in 1999, one to serve for a
two-year term expiring in 2000 and two to serve for three-year terms expiring in
2001, each until their respective successors are elected and have qualified.
Each of the nominees is now serving as a director of the Company. Unless
otherwise indicated on a proxy, the proxy holders intend to vote the shares it
represents for all of the nominees for election as directors.
The affirmative vote of a plurality of the shares of the Company's Common
Stock, present or represented by proxy and voted at the Meeting, is required for
the election of directors.
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of the nominees listed below. While it
is not anticipated that any of the nominees will be unable to serve, if any
should be unable to serve, the proxy holders reserve the right to substitute any
other person.
NOMINEE FOR ELECTION AS
DIRECTOR WITH TERM EXPIRING IN 1999
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Stalon photo Independent Consultant on energy regulation since 1993; Senior
Charles G. Stalon Economist at Argonne National Laboratory since 1991; Professor of
Director since 1994 Economics and Director, Institute of Public Utilities, Michigan
Age 68 State University from 1991 to 1993; Commissioner, Federal Energy
Regulatory Commission from 1984 until 1989 and the Illinois Commerce
Commission from 1981 until 1984 and Member, Advisory Committee, Gas
Research Institute.
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NOMINEE FOR ELECTION AS
DIRECTOR WITH TERM EXPIRING IN 2000
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Unkles photo Retired. Formerly Managing Director, Tucker Anthony, Inc.,
John J. Unkles, Jr. Morristown, NJ (investment bankers) for more than five years and
Director since 1982 Treasurer, Jonathan's Landing Golf Club, Inc.
Age 67
NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2001
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Downes photo Chairman of the Board of Directors of the Company since September
Laurence M. Downes 1996 and President and Chief Executive Officer of the Company
Director since 1995 since July 1995; employed by the Company since 1985, including
Age 40 Senior Vice President and Chief Financial Officer from 1990 to
1995; Member, PNC Bank Regional Advisory Board; Director,
American Gas Association and New Jersey Utilities Association;
Trustee, Georgian Court College, Public Affairs Research
Institute of New Jersey, Inc. and Prosperity New Jersey Inc.
Foster photo Chairman and Chief Executive Officer of Newfield Exploration
Joe B. Foster Company since January 1989; prior thereto, Executive Vice
Director since 1994 President, Tenneco, Inc. and Chairman of Tenneco Oil Company and
Age 63 Tenneco Gas Pipeline Group for more than five years; Director,
Baker Hughes, Inc., an oil and gas services company; Chairman of
the National Petroleum Council and Member, Independent Petroleum
Association of America.
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DIRECTORS WITH TERMS EXPIRING IN 1999
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Coleman photo President, National League of Professional Major League Baseball
Leonard S. Coleman Clubs since March 1994; Executive Director, Market Development,
Director since 1995 Major League Baseball from December 1991 to March 1994; Vice
Age 48 President, Investment Banking, Kidder Peabody from 1988 to 1991;
Director, Beneficial Corp., a financial services holding company,
Omnicom Group, Inc., an advertising holding company, Owens
Corning Corp., a glass and plastics manufacturing company, Avis,
Inc., a car rental and leasing company and HFS, Inc., a hotel
franchiser.
Johnston photo Retired. Formerly Director from 1992 through 1995, Vice Chairman
Lester D. Johnson and Chief Financial Officer from January 1995 to December 1995,
Director since 1996 Executive Vice President and Chief Financial Officer from March
Age 65 1992 to December 1994, and Senior Vice President and Chief
Financial Officer from 1986 to 1992 of Consolidated Natural Gas
Company.
Light photo Chairman & CEO, Alden Enterprises, LLC since January 1996;
Dorothy K. Light Corporate Vice President and Secretary from June 1990 to July
Director since 1990 1995, The Prudential Insurance Company of America; Chairperson,
Age 60 the Prudential Foundation from December 1992 to July 1995 and
Conference Director, Utility Women's Conference.
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DIRECTORS WITH TERMS EXPIRING IN 2000
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Coe photo Formerly Chairman of the Board of Directors of the Company from
Bruce G. Coe April 1995 to September 1996; President, New Jersey Business &
Director since 1984 Industry Association from 1982 to April 1996; Director, First
Age 67 Option Health Plan, a health care company and Director Emeritus,
New Jersey Manufacturers Insurance Company.
Gluck photo President, The GluckShaw Group (formerly Policy Management &
Hazel S. Gluck Communications, Inc.) since April 1994, Founder and President,
Director since 1995 Public Policy Advisors, Inc. from July 1989 to March 1994, both
Age 63 consulting and public relations firms; former Commissioner, Port
Authority of New York and New Jersey, NJ Department of
Transportation, New Jersey Transit and NJ Department of
Insurance.
Wolf photo Senior Partner, Cahill Gordon & Reindel, a law firm, for more
Gary W. Wolf than five years and Director, Southwestern Public Service
Director since 1996 Company, an electric utility company, from January 1986 to
Age 59 October 1997.
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NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
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Zoffinger photo President & CEO, Value Property Trust, since 1995, a publicly
George R. Zoffinger owned real estate investment trust; President and CEO,
Director since 1996 Constellation Bancorp from 1991 through 1994; Former Chairman and
Age 49 Director, CoreStates New Jersey National Bank from 1994-1997;
Director, The Multicare Companies, Inc., a health care company,
New Jersey Alliance for Action, and New Jersey World Trade
Council; Trustee, St. Peter's Medical Center, Woodbridge Economic
Development Corporation and the Public Affairs Research Institute
of New Jersey, Inc.
The Company and/or its subsidiaries maintain a banking relationship with
CoreStates New Jersey National Bank of which Mr. Zoffinger was a director. The
Company and/or its subsidiaries also maintain a banking relationship with PNC
Bank of which Mr. Downes is a member of the Regional Advisory Board. The Company
believes that all transactions with these banks were conducted at terms and
rates no more favorable than those available to other similarly situated
commercial customers.
CERTAIN OTHER MATTERS
On December 19, 1997, the Company submitted an Offer of Settlement (the
"December 19 Offer) to the Securities and Exchange Commission ("SEC") in
connection with the previously reported investigation by the SEC into certain
transactions engaged in by subsidiaries of the Company in 1992. In the Offer,
the Company agreed, without admitting or denying the SEC's findings, to consent
to the entry of an administrative order finding that the Company had not fully
complied with Sections 10(b), 13(a) and 13(b) of the Securities Exchange Act of
1934 (the "Order"). The Order agreed to by the Company does not impose any
monetary penalty or require any restatement of the Company's financial
statements. The Company previously had submitted a similar Offer of Settlement
on October 10, 1997 (the "October 10 Offer") that was accepted by the SEC.
Following negotiations between the SEC and other parties, the Company and the
SEC agreed to modify the proposed order that was the basis for the October 10
Offer. As of this date, the December 19 Offer has not been formally accepted by
the SEC and the Order has not been filed. In addition, NJR's former Chairman and
CEO, Oliver G. Richard, III, and three current officers, Laurence M. Downes,
Glenn C. Lockwood and Jay B. Corn, submitted Offers of Settlement to the SEC,
without admitting or denying the SEC's findings, in which they consent to the
entry of orders finding that they had caused the Company to not fully comply
with Section 13(a) of the Securities Exchange Act of 1934. These orders do not
impose any fines or penalties on these individuals. These offers also have not
been formally accepted by the SEC.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
During fiscal 1997, there were nine meetings of the Board of Directors.
Each director attended more than 75% of the combined meetings of the Board of
Directors and the Committees on which he or she served during the year.
The Audit Committee, consisting of Leonard S. Coleman, Hazel S. Gluck,
Warren R. Haas, Dorothy K. Light, Charles G. Stalon and Gary W. Wolf (Committee
Chair), met four times during fiscal 1997 for the
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purpose of overseeing management's responsibilities for accounting, internal
controls, and financial reporting. While not attempting to verify the results of
any specific audit, the Committee did satisfy itself, and ultimately the Board,
that these functions are being carried out responsibly. The Committee acts to
assure itself of the independence of the independent accountants by reviewing
each non-audit service rendered or to be rendered by the accountants. After
meeting with the independent accountants to review the scope of their
examination, fees, and the planned scope of future examinations, the Committee
makes a recommendation to the Board for the appointment of an independent
accounting firm for the following fiscal year.
The members of the Corporate Governance Committee (previously the
Nominating Committee) are Bruce G. Coe, Leonard S. Coleman, Hazel S. Gluck,
Dorothy K. Light (Committee Chair) and John J. Unkles, Jr. The purpose of the
Committee is to recommend to the Board the nominees for election as directors,
and to consider performance of incumbent directors to determine whether to
nominate them for re-election. This Committee met four times in fiscal 1997. The
Corporate Governance Committee will consider qualified nominations for directors
recommended by stockholders. Recommendations should be sent to New Jersey
Resources Corporation, Office of the Secretary, 1415 Wyckoff Road, P.O. Box
1464, Wall, New Jersey 07719. Any nomination for director should be received by
the Secretary on or before August 30, 1998.
The Executive Committee consists of Bruce G. Coe (Committee Chair),
Laurence M. Downes, Lester D. Johnson, Dorothy K. Light, Gary W. Wolf and George
R. Zoffinger. During the interval between meetings of the Board of Directors,
the Executive Committee is authorized under the Company's By-Laws to exercise
all the powers of the Board of Directors in the management of the Company,
unless specifically directed otherwise by the Board or otherwise proscribed by
law. This Committee met once in fiscal 1997.
The Financial Policy Committee, consisting of Joe B. Foster, Lester D.
Johnson (Committee Chair), Charles G. Stalon, John J. Unkles, Jr., Gary W. Wolf
and George R. Zoffinger, met three times during fiscal 1997 to review and make
recommendations to the Board concerning financing proposals, dividend
guidelines, and other corporate financial and pension matters.
The Management Development and Compensation Committee (previously the
Compensation and Benefits Committee), consisting of Bruce G. Coe, Joe B. Foster,
Warren R. Haas, Lester D. Johnson, John J. Unkles, Jr. and George R. Zoffinger
(Committee Chair), met three times during fiscal 1997 to oversee the performance
and qualifications of senior management, and to review and make recommendations
regarding the annual compensation and benefits of all elected officers of the
Company and its subsidiaries.
REMUNERATION OF DIRECTORS
Directors who are not officers of the Company or its subsidiaries are
compensated as follows: (1) an annual retainer of $10,800; (2) a fee of $700 for
each Board meeting attended; (3) a fee of $700 for each committee meeting
attended, unless the committee meeting was held on the same day as a Board
meeting, in which case the committee meeting fee is $500; (4) a fee of $400 for
any Board or committee meeting attended via telephone conference call, and (5)
an annual retainer for each committee chairperson of $5,000, except for the
chairperson of the Executive Committee, who receives an annual retainer of
$10,000. Directors also receive a one-time award of 200 shares and options to
purchase 5,000 shares of the Company's common stock. An additional award of
options to purchase 1,000 shares of the Company's common stock is made annually.
Directors who are also officers of the Company or its subsidiaries do not
receive additional compensation for serving on the Board. All directors are
reimbursed for any out-of-pocket expenses incurred in attending Board or
committee meetings.
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REMUNERATION OF EXECUTIVE OFFICERS
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
The Management Development and Compensation Committee (the "Committee") of
the Board of Directors consists of six outside, non-employee directors. In
addition, as Chairman and Chief Executive Officer of the Company, Mr. Downes is
a non-voting, ex officio member of the Committee.
The Committee's executive compensation philosophy is designed to attract,
energize, reward and retain qualified executive personnel who will provide
superior results over the long-term and enhance the Company's position in a
highly competitive market. The Committee also administers awards under certain
of the Company's employee benefit plans. Accordingly, the Committee reviews and
makes recommendations to the Board with respect to (1) the performance of the
officers of the Company and the Company's subsidiaries, (2) the compensation and
other benefits of officers of the Company and the Company's subsidiaries, and
(3) benefit programs that are applicable to officers of the Company and/or its
subsidiaries.
The Committee each year has utilized a national compensation consultant
(the "Consultant") to review competitive compensation levels of senior
executives in the natural gas industry. Through this process, the Committee
identifies the competitive compensation levels, both with respect to base salary
and overall executive compensation packages, at the Company's peers. Many, but
not all of the companies which compensation was reviewed for purposes of this
comparison are contained in the Standard and Poor's Utilities Index used in the
performance graph on page 13.
The Committee employs this external data by comparing the results to the
base salary and other compensation provided to senior Company executives. In
this fashion, the Committee is able to assess and make recommendations to the
Board with respect to both individual compensation levels and target performance
levels under the Company's Officer Incentive Compensation Plan (the "Incentive
Plan").
Setting compensation levels for each executive officer is based upon the
Committee's judgment as well as actual performance against established goals.
Individual performance is measured in several specific areas, including the
development and execution of annual operating plans, strategic plans, leadership
qualities, ability to develop staff, change in leadership responsibilities and
the individual's specific contributions to corporate objectives which have a
significant and positive impact on the Company. Performance of the subsidiary
companies is measured by comparing actual achievements to financial and
strategic objectives in their annual operating plans. Company performance
criteria is also measured yearly to ensure consistency with the corporate
vision, mission and strategies. In making compensation decisions for 1997 the
Committee reviewed executive accomplishments in total gas throughput, number of
new customers, cost of adding a new customer, earnings, expenses, return on
equity, market share, operating and net income and the Company's assumption of a
leadership role in natural gas-related businesses.
The Company has established three programs providing for direct
compensation of executive officers: the Base Salary Program, the Incentive Plan
and the Long-Term Incentive Compensation Plan (the "Long-Term Plan"). The
structure of the total executive compensation package is such that when the
Company achieves its annual business objectives, the Company's senior executives
receive a level of compensation approximately equivalent to the average
compensation paid to executives of the Company's peers.
Each of these three programs is discussed in greater detail below.
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BASE SALARY PROGRAM
In setting the base salary levels of each executive officer, the Committee
considers the base salaries of executive officers in comparable positions in
other similarly situated natural gas companies and companies of similar size in
other industries. In setting levels, the Company currently targets the 50th
percentile of the relevant labor market. The Committee also considers the
executive's experience level, time and placement in grade and the actual
performance of the executive (in view of the Company's needs and objectives).
Changes in compensation are directly dependent upon individual and Company
performance. Mr. Downes' base pay of $277,000 is approximately 12% below the
median compensation for comparable companies.
INCENTIVE PLAN
Under the Incentive Plan, officers and certain key employees of the Company
and New Jersey Natural Gas Company, a wholly-owned subsidiary of the Company
("NJNG"), designated by the Committee, may receive additional cash compensation
based upon the Committee's thorough evaluation of the Company's performance
against a series of performance objectives. The Committee believes that variable
at-risk compensation, both annual and long-term, should make up a significant
part of an executive's compensation and that the amount of this compensation
component should increase with increasing levels of responsibility. Awards under
the Incentive Plan are based upon a percentage of the base salary of each
eligible Incentive Plan participant during the year. Threshold, target and
maximum incentive award levels are established annually by the Committee for
each award group.
Individual awards are payable based on the executive's attainment of a
portfolio of goals including earnings, development of new business,
productivity, customer satisfaction and resource deployment. Incentive award
levels provide payments that are at the 60th percentile of the market, which is
competitive within the industry when performance results are fully achieved.
The incentive awards to executive officers for achievements in fiscal 1997
(paid in fiscal 1998), including the $108,030 incentive award made to Mr.
Downes, reflect overall results that were above target for the Company and NJNG.
LONG-TERM PLAN
The Long-Term Plan provides for the award of stock options, (the "Stock
Options"), performance units, or restricted stock (the "Restricted Stock") to
designated employees. In 1997, the Committee made awards under the Long-Term
Plan in the form of Restricted Stock and Stock Options for 2/3 and 1/3 of the
recipients' total award value, respectively. Restricted Stock was valued at fair
market value at the time of grant. The Restricted Stock will only vest upon the
(i) attainment of a schedule of performance goals related to total shareholder
return as measured against a peer group and (ii) additional service beyond the
point when the goal is reached. No Restricted Stock will vest if the Company
does not perform in at least the top half of the peer group. Restricted Stock
was granted because the Committee believes that this award type provides
executives a strong incentive to create earnings that could be the foundation
for the payment of dividends and as a focus on stock price appreciation. Stock
Options, valued with the Black-Scholes model, were also granted with an exercise
price greater than fair market value at the time of grant. This means that the
price of Common Stock would need to increase before the Stock Options could be
exercised for any gain. As the value of the Company's stock is generally
considered the strongest indicator of overall corporate performance, awards of
Stock Options, which allow the executive to benefit by appreciation in stock
price at no direct cost to the Company, and the performance-based Restricted
Stock, provide strong incentives to executives by relating
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a portion of their compensation to the future value of the Company's stock.
Additionally, the use of stock-based compensation encourages individuals to act
as owners/managers and is an important means of fostering a mutual interest
between management and shareholders. Executives received awards under the
Long-Term Plan that are calibrated to equal the 60th percentile of the
competitive market if all awards vest.
OTHER
The Company did not pay any compensation in fiscal 1997 that was not
deductible by provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Section 162(m).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
With the exception of Mr. Downes, who is a non-voting, ex officio member of
the Committee, no member of the Committee is a former or current officer or
employee of the Company or any of its subsidiaries, nor does any executive
officer of the Company serve as an officer, director or member of a compensation
committee of any entity one of whose executive officers or directors is a
director of the Company.
MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE
Bruce G. Coe Lester D. Johnson
Joe B. Foster John J. Unkles, Jr.
Warren R. Haas George R. Zoffinger
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SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ---------------------
COMPENSATION RESTRICTED
------------------ STOCK ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR* ($) ($) (#) (#) ($)
---------------------------------- ----- -------- ------- ---------- ------- ------------
Laurence M. Downes................ 1997 276,408 70,000 4,185 18,256 3,363**
Chairman, Chief Executive Officer 1996 209,375 60,000 -- 30,000 5,140
and President 1995 163,650 25,000 -- 10,596 7,768
Glenn C. Lockwood................. 1997 134,146 25,000 1,740 7,589 4,024**
Senior Vice President & Chief 1996 113,342 50,000 -- 8,250 3,400
Financial Officer 1995 86,406 15,000 -- 1,056 2,592
Joseph P. Shields................. 1997 119,146 30,000 1,227 5,350 3,588**
Senior Vice President, Energy 1996 101,023 20,000 -- 4,250 3,031
Services, NJNG 1995 81,721 10,000 -- -- 3,739
Oleta J. Harden................... 1997 131,825 15,147 1,365 5,952 3,955**
Senior Vice President, General 1996 126,175 15,318 -- 7,000 3,785
Counsel & Secretary 1995 123,440 18,764 -- 2,089 6,201
Timothy C. Hearne................. 1997 125,998 18,176 1,630 7,111 3,647**
Senior Vice President, Financial & 1996 109,473 12,030 -- 5,000 1,879
Administrative Services, NJNG 1995 99,391 15,000 -- 1,246 2,891
- ---------------
* For fiscal year ended September 30.
** Represents the Company's matching contributions under the Employees'
Retirement Savings Plan (the "Savings Plan").
OPTION GRANTS IN 1997 FISCAL YEAR
----------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL STOCK
UNDERLYING OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION -------------------
NAME (#) FISCAL YEAR ($/SH)(1) DATE 5% ($) 10% ($)
----------------------------- ---------- ------------ -------- ---------- -------- --------
Laurence M. Downes........... 18,256 16.8% 32.00 01/29/02 111,736 294,444
Glenn C. Lockwood............ 7,589 7.0% 32.00 01/29/02 46,448 122,400
Joseph P. Shields............ 5,350 4.9% 32.00 01/29/02 32,745 86,288
Oleta J. Harden.............. 5,952 5.5% 32.00 01/29/02 36,429 95,998
Timothy C. Hearne............ 7,111 6.6% 32.00 01/29/02 43,523 114,691
- ---------------
(1) Represents a 7.1% premium over the fair market value on the date of grant.
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AGGREGATED OPTION EXERCISES IN 1997 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF
UNEXERCISED
SHARES NUMBER OF IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS OPTIONS AT
EXERCISE REALIZED AT FISCAL YEAR-END FISCAL
NAME (#) ($) (#) YEAR-END ($)
-------------------------------- ----------- --------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
Laurence M. Downes.............. -- -- 8,687/54,036 76,185/195,944
Glenn C. Lockwood............... -- -- 2,149/16,584 18,987/47,402
Joseph P. Shields............... -- -- 0/9,600 0/21,663
Oleta J. Harden................. -- -- 4,255/14,431 37,554/47,301
Timothy C. Hearne............... -- -- 2,341/12,970 20,665/33,212
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P UTILITIES S&P 500 THE COMPANY
SEP-92 100 100 100
SEP-93 124 113 136
SEP-94 108 117 104
SEP-95 138 152 137
SEP-96 148 183 157
SEP-97 169 256 196
- ---------------
* Assumes $100 invested on September 30, 1992, in the Company stock, the S&P 500
Index and the S&P Utility Index. Cumulative total return includes reinvestment
of dividends.
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RETIREMENT PLANS
The following table sets forth estimated annual benefits payable upon
retirement (including amounts attributable to the Plan for Retirement Allowances
for Non-Represented Employees (the "Plan") and any other defined benefit
supplementary or excess pension award plans) in specified compensation and years
of service classifications, and assumes a reduction of approximately 10% which
is applied to married employees in order to provide the spouse a survivor's
annuity of 50% of the employee's reduced retirement benefit:
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
COMPENSATION 10 15 20 25 30 35 40 45
- -------------------- ------- ------- ------- -------- -------- -------- -------- --------
$100,000............ 13,309 19,964 26,618 33,273 39,928 46,582 52,207 57,832
$125,000............ 17,022 25,533 34,043 42,554 51,065 59,576 66,607 73,638
$150,000............ 20,734 31,101 41,468 51,836 62,203 72,570 81,007 89,445
$175,000............ 24,447 36,670 48,893 61,117 73,340 85,563 95,407 105,251
$200,000............ 28,159 42,239 56,318 70,398 84,478 98,557 109,807 121,057
$225,000............ 31,872 47,808 63,743 79,679 95,615 111,551 124,207 136,863
$250,000............ 35,584 53,376 71,168 88,961 106,753 124,545 138,607 152,670
$275,000............ 39,297 58,945 78,593 98,242 117,890 137,538 153,007 168,476
$300,000............ 43,009 64,514 86,018 107,523 129,028 150,532 167,407 184,282
$325,000............ 46,722 70,083 93,443 116,804 140,165 163,526 181,807 200,088
For the five executives named in the Summary Compensation Table,
compensation covered by the Plan equals their Base Salary.
The number of years of credited service at normal retirement for the named
executive officers are as follows:
YEARS OF
NAME CREDITED SERVICE
------------------------------------------------------- ----------------
Laurence M. Downes..................................... 37
Glenn C. Lockwood...................................... 38
Joseph P. Shields...................................... 39
Oleta J. Harden........................................ 30
Timothy C. Hearne...................................... 36
Benefits are computed on a straight life, annuity basis. The benefits
listed in the above table are not subject to deduction for Social Security or
other amounts.
To the extent benefits that would otherwise be payable to an employee under
the Company's ESOP II and Savings Plans exceed the specified limits on such
benefits imposed by the Internal Revenue Code of 1986, as amended (the "Code"),
it is the Company's plan to pay such excess benefits to the employee at the time
the employee receives payment under the Plan. These excess benefit payments
would be made from the general funds of the Company. As of September 30, 1997,
no employee of the Company would have been entitled to payments for benefits in
excess of the Code limits under this policy.
The Company has supplemental retirement agreements ("Supplemental
Retirement Agreements") with Messrs. Downes, Lockwood, Hearne and Shields and
Mrs. Harden and certain other officers not named in the
14
17
Summary Compensation Table, payable over a five-year period commencing with
retirement at age 65. At projected retirement, the maximum amounts currently
payable to Messrs. Downes, Lockwood, Hearne and Shields and Mrs. Harden under
their respective Supplemental Retirement Agreements would be $250,000, $125,000,
$125,000, $125,000 and $125,000, respectively.
CHANGE OF CONTROL ARRANGEMENTS
Under the Long-Term Plan, in the event of a Change of Control (as defined
therein) of the Company, the Board may, among other things, accelerate the
entitlement to outstanding benefits awarded thereunder.
Pursuant to the Supplemental Retirement Agreements of Messrs. Downes,
Lockwood, Hearne and Shields and Mrs. Harden, in the event of a change of
control of the Company, the right to the amounts payable to each of them
thereunder becomes immediately vested and such amounts are immediately payable
in the event of a subsequent termination of employment for any reason. Change of
Control of the Company is defined in the Supplemental Retirement Agreements as a
reportable change of control under the proxy rules of the Securities and
Exchange Commission, including the acquisition of a 30% beneficial voting
interest in the Company, or a change in any calendar year in such number of
directors as constitutes a majority of the Board of Directors, unless the
election, or the nomination for election by the Company's stockholders, of each
new director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the year.
The Company has entered into agreements with each of the 5 executives named
in the Summary Compensation Table that provide each such executive certain
rights in the event that his or her employment with the Company is terminated
within three years following the occurrence of a Change of Control (i) by the
Company without "Cause" (i.e., conviction of a felony, gross neglect, willful
malfeasance or willful gross misconduct which has had a material adverse effect
on the Company or repeated material willful violations of the executive's duties
which result in material damage to the Company) or (ii) by the executive for
"Good Reason" (e.g., due to a material breach of the Agreement by the Company,
including, without limitation, a material adverse change in executive's position
or responsibilities or a reduction of the executive's compensation). Subject to
the limitation described below, upon either such termination of employment, the
executive will receive three times, in the case of Mr. Downes, and two times, in
all other cases, the sum of (x) his or her then annual base salary and (y) the
average of his or her annual bonuses with respect to the last three calendar
years ended prior to the Change of Control. The agreements further provide that,
if any such executive is subject to the so-called "golden parachute" excise tax
imposed under Section 4999 of the Internal Revenue Code, the Company shall make
an additional payment to the executive in an amount sufficient to place the
executive in the same after-tax position as if no such excise taxes had been
imposed. For purposes of these agreements, a "Change of Control" generally means
(i) the acquisition by any person of beneficial ownership of securities
representing 25% or more of the combined voting power of the Company's
securities; (ii) within any 24-month period, the persons who were directors of
the Company immediately before such period (the "Incumbent Directors") and
directors whose nomination or election is approved by two-thirds of the
Incumbent Directors and directors previously approved by the Incumbent Directors
ceasing to constitute a majority of the Board or (iii) the stockholders of the
Company approve a merger, consolidation, share exchange, division, sale or other
disposition of all or substantially all of the assets of the Company, as a
result of which the shareholders of the Company immediately prior to such event
do not hold, directly or indirectly, a majority of the Voting Power (as defined
in such agreements) of the acquiring or surviving corporation.
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APPOINTMENT OF AUDITORS
[ITEM (2) ON PROXY CARD]
ITEM 2
It is intended that the shares represented by the proxy holders will be
voted for approval of the appointment of Deloitte & Touche LLP (unless otherwise
indicated on proxy) as independent public accountants (auditors) to report to
the stockholders on the financial statements of the Company for the fiscal year
ending September 30, 1998. Each professional service performed by Deloitte &
Touche LLP during fiscal 1997 was approved in advance or was subsequently
approved and the possible effect on the auditors' independence was considered by
the Audit Committee. The Audit Committee has recommended, and the Board of
Directors has approved, the appointment of Deloitte & Touche LLP subject to the
approval of the stockholders at the Meeting. Although submission of the
appointment of independent public accountants to stockholders is not required by
law, the Board of Directors, consistent with its past policy, considers it
appropriate to submit the selection of auditors for stockholder approval.
Representatives of Deloitte & Touche LLP are expected to be present at the
Meeting with the opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company present, or represented by proxy, and voted at the Meeting
is required for the approval of this item. The Board has not determined what
action it would take if the stockholders do not approve the selection of
Deloitte & Touche LLP, but would reconsider its selection in light of the
stockholders' action.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPOINTMENT OF DELOITTE & TOUCHE LLP
EXPENSES OF SOLICITATION
All expenses of soliciting proxies, including clerical work, printing, and
postage will be paid by the Company. Proxies may be solicited personally, or by
mail, telephone, facsimile, or telegraph, by officers and other regular
employees of the Company, but the Company will not pay any compensation for such
solicitations. In addition, the Company has agreed to pay Corporate Investor
Communications a fee of $6,000 plus reasonable expenses for proxy solicitation
services. The Company will also reimburse brokers and other persons holding
shares in their names or in the names of nominees for their expenses for sending
material to beneficial owners and obtaining their proxies.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting must be received by the Company on or before August 30, 1998 to be
considered for inclusion in the Company's Proxy Statement and for consideration
at that meeting. Stockholders submitting such proposals are required to be the
beneficial owners of shares of the Company's Common Stock amounting to $1,000 in
market value and to have held such shares for at least one year prior to the
date of submission.
16
19
OTHER BUSINESS
The Board does not know of any other business which may be brought before
the Meeting. However, if any other matters should properly come before the
Meeting or at any adjournment thereof, it is the intention of the persons named
in the accompanying proxy to vote on such matters as they, in their discretion,
may determine.
By Order of the Board of Directors
OLETA J. HARDEN
Secretary
Dated: December 30, 1997
17
20
WYNDHAM GARDEN HOTEL
INTERNATIONAL TRADE CENTER
1000 International Drive, Mt. Olive, NJ 07828
(973) 448-1100 FAX (973) 448-1200
DIRECTIONS FROM NEW YORK CITY AREA
George Washington Bridge following signs to Route 95 South to Route 80 West.
ROUTE 80 WEST TO EXIT 25 (206 NORTH -- NEWTON) AND FOLLOW SIGNS TO THE
INTERNATIONAL TRADE CENTER. BEAR RIGHT OFF EXIT AND STAY RIGHT TO THE FIRST EXIT
MARKED TO THE TRADE CENTER. FOLLOW INTERNATIONAL DRIVE INTO THE TRADE CENTER,
THE HOTEL WILL BE ON THE LEFT.
DIRECTIONS FROM SOUTH JERSEY
Follow the Garden State Parkway or the New Jersey Turnpike North to Route 287
North. Route 287 North to Route 80 West. Route 80 West to Exit 25 and follow
directions above in BOLD print.
DIRECTIONS FROM NEWARK AIRPORT
Exit Newark Airport following signs to Route 78 West. Route 78 West to Route 24
West. Route 24 West to Route 287 North. Route 287 North to Route 80 West. Route
80 West to Exit 25 and follow directions above in BOLD print.
DIRECTIONS FROM CONNECTICUT
Follow routes to the Tappen Zee Bridge to the New York Thruway North. Thruway
North to Route 287 South into New Jersey. Route 287 South to Route 80 West.
Route 80 West to Exit 25 and follow directions above in BOLD print.
DIRECTIONS FROM PENNSYLVANIA
Route 80 East into New Jersey to Exit 25 (Route 206 North -- Newton). Get to the
right for the first exit, following the signs to the International Trade Center.
Follow International Drive into the Trade Center and the hotel will be on the
left.
NJRC - PS - 98
21
NEW JERSEY RESOURCES CORPORATION
1415 Wyckoff Road, Wall, NJ 07719
Solicited on behalf of the BOARD OF DIRECTORS
for the 1998 Annual Meeting of Stockholders
The undersigned hereby appoints Bruce G. Coe and Oleta J. Harden, each with
full power of substitution, proxies to represent the undersigned at the Annual
Meeting of Stockholders of New Jersey Resources Corporation to be held at
10:30 a.m., local time, on Wednesday, January 28, 1998 at the Wyndham Garden
Hotel, International Trade Center, 1000 International Drive, Mt. Olive, New
Jersey 07828 and at any adjournment thereof, and thereat to vote all of the
shares of stock which the undersigned would be entitled to vote, and, if
applicable, hereby directs the trustee(s) of the employee benefit plan(s) shown
on the reverse side of this card to vote the shares of stock allocated to the
account of the undersigned.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[SEE REVERSE SIDE]
22
[X] Please mark votes as in this example.
Unless otherwise indicated, this proxy will be voted "FOR" all the nominees for
election as directed and "FOR" the proprosals referred to herein.
1. Election of Directors
Nominees: Charles G. Stalon, John J. Unkles, Jr.,
Laurence M. Downes, Joe B. Foster
FOR WITHHELD
[ ] [ ]
[ ]________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To approve the retention of Deloitte & [ ] [ ] [ ]
Touche LLP as auditors for the fiscal
year ending September 30, 1998; and
3. To transact any other business that may properly be brought before the
meeting or any adjournment or adjournments thereof.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
In case of joint owners, each owner should sign. When signing in a fiduciary or
representative capacity, please give full title as such. Proxies executed by a
corporation should be signed in full corporate name by duly authorized officer.
Signature: ________________ Date: _____ Signature: ________________ Date: _____