SOUTH JERSEY INDUSTRIES SOUTH JERSEY GAS COMPANY SOUTH JERSEY ENERGY COMPANY Officer Employment Agreement
Exhibit
10(e)(iii)
SOUTH
JERSEY INDUSTRIES
SOUTH
JERSEY GAS COMPANY
SOUTH
JERSEY ENERGY COMPANY
Officer Employment
Agreement
THIS AGREEMENT made as of the first day
of January, 2009, by and between South Jersey Industries, Inc. (“SJI”) and/or
one or more of its subsidiaries South Jersey Gas Company, South Jersey Energy
Solutions, LLC and SJI Services, LLC, all corporations or limited liability
companies, having their principal offices at Number One South Jersey Plaza,
Route 54, Folsom, New Jersey (the “Companies”), and _____________(the
“Officer”).
WITNESSETH:
WHEREAS, the Companies desire to assure
themselves of the continued employment of the Officer by the Companies and to
encourage his or her continued attention and dedication to the Companies in the
best interests of the Companies and SJI shareholders; and
WHEREAS, the Officer is presently
employed by the Companies as follows:___________________, South Jersey
Industries, Inc.
WHEREAS, the Officer desires to remain
and continue in the employ of the Companies 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 Companies hereby agree to continue
to employ the Officer in the positions in which he or she presently serves, and
the Officer hereby agrees to continue to serve in those positions, on the terms
and conditions set forth herein.
Section 2.
Term.
The term of this Agreement shall be for
a period of three (3) years beginning January 1, 2009 and ending on December 31,
2011 subject to earlier termination under sections 7 and 8.
Section 3. Duties and
Responsibilities.
The Officer shall serve in the
positions in which he or she presently serves and shall report_________________.
The Officer shall perform such duties and services as are customarily performed
by him or her and as are assigned to him or her by the appropriate officer to
whom he or she reports.
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Section 4. Outside
Services.
The Officer agrees to devote
substantially all of his or her working time and efforts to the business and
affairs of the Companies and shall not, directly or indirectly, without the
written consent of the Chief Executive Officer of SJI, render any services to
any other person, firm or entity, or own, manage, operate, control or
participate in the management of any other person, firm or entity during the
term of this Agreement. However, the Officer is not prohibited or
prevented from acquiring or holding investments and securities listed on a
national or regional securities exchange or sold in an over-the-counter public
market, provided that the Officer is not part of any control group of such
corporation or entity. So long as it does not interfere with his or
her duties under this Agreement, the Officer shall have the right to serve as a
director of any other corporation upon the approval of the Chief Executive
Officer of SJI.
Section 5. Place of
Performance.
The Officer’s services during the term
of this Agreement shall be performed primarily in the corporate headquarters
building of the Companies at Number One South Jersey Plaza, Route 54, Folsom,
New Jersey or at a designated location approved by the Chief Executive Officer
of SJI. Without his or her prior consent, the Officer shall not be
required to move his or her place of permanent employment from this corporate
headquarters building, although the Officer may be required to undertake
reasonable domestic and international travel from time to time consistent with
his or her business travel obligations.
Section 6. Compensation and
Expenses.
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6.1
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Total Direct
Compensation.
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During
the period of the Officer’s employment under this Agreement, the Companies shall
pay to the Officer a base salary of not less than $________per annum; a
performance based annual cash award targeted at not less than __ % of base
salary; and a long-term incentive plan award targeted at not less than __ % of
base salary; provided that the performance based annual cash award and long-term
incentive plan award actually paid to the Officer shall be based on the level of
attainment of the applicable performance criteria for such
awards. The actual amount paid to the Officer pursuant to the
foregoing three components is referred to in this Agreement as “Total Direct
Compensation.” Base Salary shall be paid in either twenty-four (24)
or twenty-six (26) equal installments. The amount of Total Direct
Compensation shall be reviewed annually in accordance with the normal business
practices of the Companies. On or after a Change of Control, any
reduction in the targeted amount of the Officer’s performance based annual cash
award or targeted long-term incentive plan award shall constitute a material
breach of this Agreement by the Companies.
6.2 Additional
Benefits.
In
addition to Total Direct Compensation, the Companies shall pay for and the
Officer shall be entitled without limitation to participate in employee benefit
plans presently in effect or hereafter adopted by the Companies which are
applicable to employees generally. To the extent said benefits have
been modified or additional benefits provided, they are detailed in Exhibit A, which is
attached hereto and made a part hereof. If employer contributions to
any such plan (other than a defined benefit plan) for the benefit of the Officer
or his
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or her
dependents or beneficiaries are reduced in amount by any statute or regulation
from the payments that would otherwise be so made but for such statute or
regulation, the amount that is prohibited from being paid to such plan because
of such statute or regulation, increased if necessary as provided in the next
sentence, shall be paid, at the time it would have been paid to such plan except
for such prohibition to the Officer in a lump sum cash payment. 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, shall be paid to the Officer. In no event shall such
amount, together with any additional tax gross-up amount, be paid later than
March 15 of the fiscal year following the fiscal year for which such amount
would have been paid to the applicable plan.
6.3 Expenses.
In
addition to Total Direct Compensation and Additional Benefits, the Companies
shall pay for and the Officer shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Officer in performing services under
this Agreement, including all expenses of travel and living expenses while away
from home on business or at the request of and in the service of the Companies,
provided that such expenses are incurred and accounted for in accordance with
the policies and procedures presently or hereafter established by the
Companies.
6.4 Services
Furnished.
The
Companies shall furnish the Officer with office space, administrative/clerical
assistance and such other facilities and services as shall be suitable to the
Officer’s position and adequate for the performance of his or her
duties.
Section 7. Reasons for
Termination.
7.1 Death.
This
Agreement shall terminate upon the Officer’s death, and he or she shall be
entitled to such death benefits to which he or she is otherwise entitled
presently or which may be hereafter established by the Companies.
7.2 Disability.
If the
Officer shall be determined to be disabled in accordance with the disability
policy or plan of the Companies, the Company may remove the Officer from
positions within the Companies in which he or she then may be serving, subject
to the requirements of applicable law. However, the Officer shall not
be terminated as an employee of the Companies. The Officer shall be
retained in such positions and given such duties and responsibilities as are
commensurate with his or her abilities at the time. The Officer shall
be entitled to such disability benefits, including short term and long term, to
which he or she is otherwise entitled presently or which may be hereafter
established by the Companies. Until the Officer becomes entitled to
such disability benefits, he or she shall continue to be paid his or her Total
Direct Compensation earned in accordance with this Agreement or other applicable
plan or program pursuant to which such Total Direct Compensation is
paid. The determination of the disability of the Officer shall be
made by the Chief Executive Officer of the Companies in the exercise of his
discretion in accordance with procedures set forth in the disability policies or
plan.
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7.3 Retirement.
If the
Officer shall retire, he or she shall be entitled to such pension and other
benefits applicable to executive employees generally and him or her specifically
including, without limitation, those presently existing or hereafter established
by the Companies.
7.4 For Cause by the
Companies.
The
Companies may terminate the Officer’s employment for Cause. For
purposes of this Agreement, the Companies shall have “Cause” to terminate the
Officer’s employment hereunder only for the following reasons: (1) the willful
and continued failure by the Officer to substantially perform his or her duties
hereunder other than any such failure resulting from the Officer’s incapacity
due to physical or mental illness or injury; (2) the conviction of the Officer
of a crime under state or federal law and the Companies’ Board of Directors or
one of its committees is unable to conclude in good faith (and in its sole
discretion) that the Officer had no reasonable cause to believe that the
activities of which he or she was convicted were unlawful and that such
conviction will not materially impair his or her ability to discharge his or her
duties; (3) the willful engaging by the Officer in misconduct which is
materially injurious to the Companies, monetarily or otherwise; or (4) the
continued inability of the Officer to perform his or her duties by reason of
alcoholism or drug abuse even after appropriate rehabilitation services have
been made available to him or her.
7.5 For Good Reason by the
Officer.
The
Officer may terminate the Officer’s employment for Good Reason following a
Change of Control at any time during the term of this Agreement. For purposes of
this Agreement, “Good Reason” shall mean any of the following: (1) the
assignment to the Officer by the Companies, without the Officer’s express
written approval, of duties inconsistent with the Officer’s position, duties,
responsibilities, titles, offices or status with the Companies immediately prior
to a Change of Control of the Companies, or any removal of the Officer from or
any failure to re-elect the Officer to any such positions; (2) a material
reduction in the Officer’s base salary as in effect on the date hereof or as the
same is increased from time to time during the term of this Agreement; (3) the
failure to continue in effect any benefit plan or arrangement in which the
Officer is participating immediately prior to a Change of Control, or the taking
of any action by the Companies which would adversely affect the Officer’s
participation in and/or materially reduce the Officer’s benefits under any such
benefit plan or arrangement or which would deprive the Officer of any material
fringe benefit enjoyed by the Officer immediately prior to a Change of Control;
(4) a relocation of the Companies’ corporate headquarters to a location more
than 50 miles outside of Folsom, New
Jersey, or the Officer’s relocation to any place more than 50 miles from the location at
which the Officer performed the Officer’s duties except for required travel by
the Officer on the Companies’ business to an extent substantially consistent
with the Officer’s business travel obligations immediately prior to a Change of
Control; (5) a material breach of this Agreement by the Companies, or (6) any
purported termination of the Officer’s employment which is not effected pursuant
to a Notice of Termination.
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Notwithstanding
the foregoing, for
any of the foregoing acts (or failure to act) to constitute “Good Reason,” the
Officer must object in writing to the Companies within 90 days
following initial notification of the occurrence or proposed occurrence of the
act (or failure to act), and which act (or failure to act) is not then rescinded
or otherwise remedied by the Board within 30 days after delivery of such notice
and the Executive actually resigns from employment within 30 days after the
expiration of the foregoing 30-day cure period. If the Executive’s
resignation occurs after such time, the resignation shall be treated as a
voluntary resignation other than for Good Reason and the Executive will not be
entitled to severance benefits under this Agreement.
For
purposes of this Agreement a “Change of Control” of the Companies shall mean any
of the following: (1) consummation of any pay or proposal for the merger,
liquidation, dissolution or acquisition of SJI or all or substantially all of
its assets; (2) election to the Board of Directors of SJI a new majority
different from the individuals who at the beginning of the term of this
Agreement constituted the entire Board of Directors of SJI, unless each such new
director stands for election as a management nominee and is elected by
shareholders immediately prior to the election of any such new majority; or (3)
the acquisition by any person of 20% or more of the stock of SJI having general
voting rights in the election of directors (for purposes of this clause (3), the
term “person” shall include two or more persons acting as a group for the
purpose of acquiring, holding or disposing of stock of SJI).
Section 8. Benefits upon
Termination.
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8.1
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Termination by the
Companies for Cause.
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If the
Officer’s employment by the Companies shall be terminated for Cause (as defined
in Section 7.4), the Companies shall pay the Officer his or her Total Base
Salary earned through the Date of Termination at the rate in effect at the time
Notice of Termination is given and the Companies shall have no further salary
obligations to the Officer under this Agreement. The Officer shall be
entitled to such retirement benefits as he or she may otherwise be entitled to
on the Date of Termination. Effective as of the Date of Termination,
the Officer shall no longer be an employee of the Companies and shall no longer
be entitled to the privileges and benefits thereof.
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8.2
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Termination by the
Officer for Good Reason.
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If the
Officer’s employment shall be terminated by the Officer for Good Reason
following a Change of Control (as defined in Section 7.5), the Companies shall
pay the Officer as severance pay an amount equal to 300% of a base amount
determined to be the average of the aggregate annual compensation paid to the
Officer during the five (5) calendar years preceding the Date of Termination and
subject to federal income taxes; provided that, if any severance payment under
this Agreement, either alone or together with any other payment which the
Officer has received or the right to receive from the Companies, would
constitute a “parachute payment” as defined in section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), such severance payment shall be
reduced to the largest amount as will result in no portion of the severance
payment being subject to the excise tax imposed by section 4999 of the
Code. The Companies shall pay this severance payment, in cash, on the
Date of Termination, provided that the Officer has executed a general release
and waiver of claims in a form of agreement prepared by the
Companies.
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Notwithstanding
any provision of this Section 8.2 to the contrary, the Companies shall pay the
Officer the severance pay described above in a lump sum only if the transaction
constituting a Change of Control meets the definition of a “change in control
event” within the meaning of such term under section 409A of the Code and the
Officer’s employment is terminated under this Section 8.2 or Section 8.3, as
applicable, within two (2) years following such Change of
Control. If, however, the transaction constituting the Change of
Control does not meet the definition of a “change in control event” within the
meaning of such term under section 409A of the Code, or the Officer’s employment
is terminated under this Section 8.2 or Section 8.3, as applicable, after the
two (2)–year period following such Change of Control, then the severance pay
shall be paid in installments as described in Section 8.3 below.
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8.3
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Termination by the
Companies for Other than
Cause.
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If the
Companies terminate the Officer’s employment for other than Cause following a
Change of Control, the Officer shall be entitled to those benefits set forth in
Section 8.2 above. If the Companies terminate the Officer’s
employment for other than Cause prior to the occurrence of a Change of Control,
which the Companies may do at any time in its sole discretion, the Companies
shall pay the Officer as severance pay an amount equal to 150% of the Officer’s
then current base salary, to be paid out in eighteen (18) equal monthly
installments, beginning on the first payroll date after the expiration of the
thirty (30)-day period following the date of the Officer’s termination of
employment and each payroll date thereafter until fully paid, in accordance with
the Companies’ regular payroll practices. However, for purposes of
the Supplemental Executive Retirement Plan (“SERP”) formula, the eighteen
(18)-month severance period shall be included as service credit and the
severance amount considered in the Final Average Compensation (“FAC”)
calculation. In no case will the inclusion of this severance period
produce a SERP benefit in excess of the maximum percentage of FAC provided for
in the SERP plan in effect on the Date of Termination. The
continuation of such payments and benefits shall be the Officer’s sole and
exclusive remedy and the Companies shall have no further obligations or
liability to the Officer or his survivors (except as otherwise provided by this
Section) under this Agreement, and shall only be provided in exchange for a
fully executed general release and waiver of claims by the Officer in a form of
agreement prepared by the Companies.
Section
9. Procedure for Termination.
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9.1
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Notice of
Termination.
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For the
purposes of this Agreement, a “Notice of Termination” shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Officer’s employment.
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9.2
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Date of
Termination.
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For the
purposes of this Agreement, the “Date of Termination” shall mean the date of the
Officer’s death; or thirty (30) days after Notice of Termination is given;
provided that if within ten (10) days after any Notice of Termination is given
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the date of termination shall be
extended for an additional period not to exceed ten (10) days. During
the period between Notice of Termination and the Date of Termination the Officer
may request and shall be granted a hearing before the Board of Directors of the
Companies or such committee thereof as it may designate, at which time the Board
of Directors shall decide whether in its reasonable good faith opinion the
Officer was either disabled or discharged for Cause and specifying the
particulars thereof in detail.
Section 10. No
Obligation to Mitigate Damages; No Effect on Other Contractual
Rights.
10.1 The
Officer shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise.
10.2 The
amount of any payment provided to the Officer under this Agreement shall not be
reduced by any compensation earned by the Officer as the result of employment by
another employer after the Date of Termination.
10.3 The
provisions of this Agreement, and any payment provided for hereunder, shall not
reduce any amounts otherwise payable, or in any way diminish the Officer’s
existing rights, or rights which would accrue solely as a result of the passage
of time under any plan of benefits provided to officers and managers of the
Companies.
Section
11. Confidential Information.
The
Officer will not, during or after the term of this Agreement, use for himself or
herself or others, or disclose to others, any formulae, trade secrets, customer
lists, know-how or other confidential information of or about the Companies or
any of its affiliates unless authorized in writing to do so by the
Companies. The Officer understands that this undertaking applies to
information of a technical or commercial or other nature and that any
information not made available to the general public is to be considered
confidential.
Section
12. Papers.
All
correspondence, memoranda, notes, records, reports, plans and other papers and
items received or made by the Officer in connection with his or her duties
hereunder shall be the property of the Companies, and the Officer shall not have
any property rights to such items when he or she is no longer an employee of the
Companies.
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Section
13. Noncompetition.
13.1 The
Officer acknowledges that, during the course of his employment hereunder, he
will have access to the Companies’ customer and business prospects, knowledge of
and experience in the techniques and methods the Companies used to do business
in its industries and other information and know-how which, even if not directly
disclosed to a competitor of the Companies, would give a competitor significant
and unfair advantages over the Companies if made available to it through the
Officer’s employment.
13.2 Accordingly,
unless the Officer requests in writing and is thereafter authorized in writing
to do so by the Companies, the Officer will not, during the term of this
Agreement, or for a period of one (1) year thereafter, directly or indirectly
own, manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed by, any business corporation,
proprietorship, partnership or other entity which competes with or is engaged in
any alliance or joint venture with either of the Companies.
13.3 The
undertakings in this Section 13: shall apply only to those areas where the
Companies engage or propose to engage in business or which the Companies, at the
termination of the Officer’s employment hereunder have defined as their market
territory, but shall not apply if the Company is or the Companies are, and after
thirty days’ written notice to the Companies thereof continue to be, in default
of its or their obligation to make any of the payments they are then required to
make to the Officer and the Officer is not in default in the performance of his
obligations.
13.4 If
the provisions of this Section 13 should ever be adjudicated to exceed the time,
geographic or other limitations permitted by applicable law in any jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic or other limitations permitted by the law applicable in
that jurisdiction. In addition, the Officer hereby authorizes the
Company to bring the Officer’s obligations hereunder to the attention of, and to
provide a copy or description of pertinent Sections of this Agreement to, any
entity which the Company believes may offer or has offered employment to the
Officer.
Section
14. Renewal and Extension of Agreement.
The term of this Agreement shall be
automatically renewed and extended for a period of three (3) years from the date
of any Change of Control in order that the Officer obtains the full benefit of
all severance benefits in the event of termination of employment after any
Change of Control. This Agreement, either under its normal three (3) year term
or under the term resulting from a Change of Control, shall be considered for
renewal and extension by the Board of Directors of the Companies or such
committee thereof as it may designate at least six (6) months prior to the end
of its term. Action by the Board of Directors shall be required to
renew and extend this Agreement.
Section
15. Enforcement.
The Officer acknowledges that in the
event of his or her breach or threat of breach of Sections 11, 12 or 13 of this
Agreement, the Companies’ remedies at law will be inadequate and, in such event,
the Companies will be entitled to appropriate injunctive and other equitable
relief in addition to its legal remedies.
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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: Lead Director of the Board of
Directors
Number Xxx Xxxxx Xxxxxx
Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Section
17. Amendments.
This Agreement may be amended,
modified, superseded, canceled, renewed or extended only by a written instrument
executed by both parties hereto.
Section 18. Binding Effect
and Non-Assignability.
This Agreement shall inure to the
benefit of the Officer’s heirs and personal representatives and shall be binding
upon the successor of the Companies, including any entity with which the
Companies may be merged or consolidated or which may acquire all or
substantially all of the assets of the Companies. This Agreement
shall not be assignable, in whole or in part, by either party, without the
written consent of the other party.
Section 19. Legal
Expenses.
In the event of a dispute in connection
with this Agreement, the parties shall each pay their own costs, except that in
the event of such a dispute after a Change of Control involving termination of
employment, or involving entitlement to compensation or benefits in the event of
termination of employment, the Companies shall pay the legal expenses of the
Officer.
Section
20. Arbitration.
Any controversy or claim arising out of
or relating to this Agreement or the breach thereof shall be settled by
arbitration in the County of Atlantic, State of New Jersey, in accordance with
the rules then in effect of the American Arbitration Association, and judgment
upon the award rendered may be entered in any court having jurisdiction
thereof. In any such arbitration each party will choose one
arbitrator and those two arbitrators will choose a third. Each party
will pay the costs associated with its arbitrator and will divide equally the
cost associated with the third arbitrator. Notwithstanding anything
to the contrary in this Section 20, either party may commence in any court
having jurisdiction over the parties hereto any action to obtain injunctive
relief.
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Section
21. Equitable Relief.
The Companies and the Officer confirm
that the restrictions contained in Section 11, 12 and 13 are, in view of the
nature of the business of the Companies, reasonable and necessary to protect the
legitimate interests of the Companies, and that any violation of any provision
of those Sections will result in irreparable injury to the
Companies. The Officer hereby agrees that, in the event of any breach
or threatened breach of the terms or conditions of the Agreement by the Officer,
the Companies’ remedies at law will be inadequate and, in any such event, any of
them shall be entitled to commence an action for preliminary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdiction, notwithstanding any provision hereof relating to
arbitration. The Officer further irrevocably consents to the
jurisdiction of any state or federal court located in the State of New Jersey
over any suit, action or proceeding arising out of or relating to this Section
and hereby waives, to the fullest extent permitted by law, any objection that he
may now or hereafter have to such jurisdiction or to the laying of venue of any
such suit, action or proceeding brought in such a court and any claim that such
suit, action or proceeding has been brought in an inconvenient
forum. The Officer agrees that effective service of process may be
made upon him by mail under the notice provisions contained in Section
16. No party hereto shall be required to post a bond prior to the
commencement of any suit, action or proceeding relating to this
Section.
Section
22. Governing Law.
This Agreement shall be governed by the
laws of the State of New Jersey.
Section
23. 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
24. 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 wavier 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
25. Invalidity of Portion of Agreement.
If any provision of this Agreement or
the application thereof to either party shall be valid or unenforceable to any
extent, the remainder of this Agreement shall not be affected thereby an shall
be enforceable to the fullest extent of the law.
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Section
26. Benefits of the Agreement
This Agreement is for the benefit of
each of the Companies, and each of them as well as the Companies shall have
standing to enforce it as though it is a party hereto. Each reference
in this Agreement to an obligation by either of the Companies shall be a
reference to the obligation of the Company to cause the Companies to perform
such obligation. Each undertaking by either of the Companies in this
Agreement shall be the undertaking of the Company to cause the Companies to
perform such undertaking.
Section
27. Compliance with Section 409A of the Internal Revenue
Code.
This Agreement shall be interpreted to
avoid any penalty sanctions under section 409A of the Code. If any
payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under section 409A, then such benefit or payment
shall be provided in full at the earliest time thereafter when such sanctions
will not be imposed. For purposes of section 409A of the Code, all
payments to be made upon the Officer’s termination of employment under this
Agreement may only be made upon the Officer’s “separation from service” within
the meaning of such term under section 409A of the Code, each payment made under
this Agreement shall be treated as a separate payment and the right to a series
of installment payments under this Agreement shall be treated as a right to a
series of separate payments.
All reimbursements and in kind benefits
provided under this Agreement shall be made or provided in accordance with the
requirements of section 409A, including, where applicable, the requirement that
(i) any reimbursement is for expenses incurred during the Officer’s lifetime (or
during a shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement, or in kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in kind
benefits to be provided, in any other calendar year, (iii) the reimbursement of
an eligible expense will be made on or before the last day of the calendar year
following the year in which the expense is incurred, and (iv) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit. If expenses are incurred in connection with
litigation, any reimbursements under the Agreement shall be paid not later than
the end of the calendar year following the year in which the litigation is
resolved.
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Notwithstanding any provision in this
Agreement to the contrary, if at the time of the Officer’s termination of
employment with the Companies, SJI has securities which are publicly-traded on
an established securities market and the Officer is a “specified employee” (as
such terms is defined in section 409A of the Code) and it is necessary to
postpone the commencement of any payments upon the Officer’s termination of
employment to prevent any accelerated or additional tax under section 409A of
the Code, then the Companies shall postpone the commencement of the payment of
any such payments or benefits hereunder (without any reduction in such payments
or benefits ultimately paid or provided to the Officer) that are not otherwise
paid within the short-term deferral and separation pay plan exceptions under
Treas. Reg. section 1.409A-1(b)(4) and (7), respectively, until the first
payroll date that occurs after the date that is six (6) months following the
Officer’s “separation from service” with the Companies. If any
payments are postponed due to such requirements, such amounts shall be paid in a
lump sum to the Officer, and any installment payments due to the Officer shall
recommence, on the first payroll date that occurs after the date that is six (6)
months following the Officer’s “separation from service” with the
Companies. If the Officer dies during the postponement period prior
to the payment of the postponed amount, the amounts withheld on account of
section 409A of the Code shall be paid to the personal representative of the
Officer’s estate within sixty (60) days after the date of the Officer’s
death.
IN WITNESS WHEREOF, the parties hereto
have duly executed this Agreement effective as of the date first above
written.
FOR THE
COMPANIES:
By:
South
Jersey Industries, Inc.
By:
Officer,
South Jersey Industries, Inc.
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EXHIBIT
A
ADDITIONAL OR MODIFIED
OFFICER BENEFITS
The following benefits are provided to
the Officer who is party to this Officer Employment Agreement.
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1.
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Disability
Plan
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(a) temporary
disability (sick pay), commences on the eighth (8th)
consecutive day of absence. Temporary disability shall be paid at a
rate of one hundred percent (100%) of the Officer’s Base Salary, and extends at
full pay for up to 120 days for Officers with less than five (5) years of
service, and up to 365 days for Officers with service of five (5) or more
years.
(b) long
term disability (LTD), begins upon the expiration of the temporary disability
benefit as described above. LTD is paid at a rate of fifty percent
(50%) of the Officer’s Base Salary, reduced by Social Security Disability
payments, if any. LTD continues until the Officer’s status changes as
a result of retirement, rehabilitation, death, voluntary resignation or
reassignment as provided for in Section 7.2. For the first two years
of LTD, medical certification of the ongoing disability against the Officer’s
“own position(s)” is required. Thereafter, medical certification
shall consider “any position”. At the discretion of the CEO, the
Officer’s position may be replaced following one year of his/her
LTD.
2. Group Life Insurance
– at a principle equivalent to two times (2x) the Officer’s Base Salary, rounded
to the next highest $5,000 increment. The insurance premium shall be
paid by the Companies; the Officer shall be responsible for resultant federal,
state or local income taxes.
3. 24-Hour Accident Protection
Coverage – while in the employ of the Company in an amount of
$250,000. The insurance premium shall be paid by the Companies; the
Officer shall be responsible for resultant federal, state or local income
taxes.
4. Supplemental Survivor’s
Benefit – upon the death of the Officer while he/she is in the employ of
the Company, his/her surviving beneficiary shall receive a lump sum payment of
$1,000 to be paid within ninety (90) days following the Officer’s
death. The surviving beneficiary shall also receive a lump sum death
benefit based upon years of service with the Company in the amounts of six (6)
months base salary (10-15 service years); nine (9) months base salary (15-25
service years); twelve (12) months base salary (25+ service years). such amount
to be paid in a lump sum within ninety (90) days following the Officer’s
death. Subject to the requirements of section 409A of the Code, such
payment shall be offset by proceeds from the Officer’s qualified pension plan
and SERP in the year of death.
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5. Supplemental Executive
Retirement Plan (SERP) – the Officer achieving eligibility under the SERP
plan, shall be entitled to the pension benefits of that plan in place on the
effective date of the Officer Employment Agreement or, in effect on the earlier
of his/her termination or retirement date, whichever provides the greater
benefit in the opinion of the Officer.
6. Company Automobile –
the Officer shall be provided a company automobile to be used for business and
at the Officer’s discretion, for commuting and other non-business
purposes. The Companies shall provide for vehicle registration,
insurance coverage, repair, preventative maintenance and fuel. The
Officer shall be responsible for any federal and/or state income taxes which
result from non-business usage.
7. Time Off – the
Officer shall take such time off for vacation or personal needs as may be
accommodated while ensuring the duties and responsibilities of his/her position
are accommodated to the satisfaction of SJI’s CEO. It is anticipated
that such time off would not normally exceed twenty (20) days per calendar year,
exclusive of scheduled corporate holidays. Time off shall not accrue,
nor shall it be carried from one year to the next, resultantly, there shall be
no payment for “unused time off” at the time of the Officer’s death, retirement
or other such termination.
8. Annual Physical
Examination – the Companies shall provide the Officer with an annual
physical examination at its expense. The Officer shall be responsible
to schedule and undergo a reasonably comprehensive annual physical examination
by a physician of his/her choosing, between the months of June and
October. The attending physician shall provide to the Officer a
reasonably detailed oral or written report of his/her findings and
recommendations. Said report and recommendations shall neither be
requested nor provided to the Company, its other officer, employees or
agents. However, should the Officer be diagnosed with a condition
which in his or her judgment will (a) substantially effect his/her performance,
or (b) render him or her unable to continue as an Officer, or (c) likely result
in his or her death within a twelve month period of such diagnosis, the
Companies request that the Officer advise the CEO accordingly, so that proper
succession planning can be initiated.
9. Severance Benefits –
in the event the Officer terminates subject to Section 8.2 or 8.3, the Companies
shall provide reasonable outplacement services to the Officer in an amount not
to exceed $15,000 or at the discretion of the CEO, up to $20,000. The
Officer shall provide the Companies with a proposal from the consultant of the
Officer’s choosing. Consultant invoices shall be rendered directly to
the Companies and payment shall be made up to the approved amount, directly to
the outplacement firm. In the event the Officer terminates by virtue
of retirement, disability, for Good Reason by the Officer or, by the Companies
for other than Cause, the CEO of SJI may at his/her discretion, transfer title
to the companies car to the Officer (if the SJI CEO, at the discretion of the
SJI Board of Director’s Compensation & Pension
Committee). Subject to governing law and/or regulation, the Officer
may elect COBRA healthcare continuation coverage under section 4980B of the
Code, at the Officer’s sole expense and at the applicable COBRA
premium/rates. All payments for outplacement services under this
Section 9 shall be made in accordance with the requirements of section 409A of
the Code, including the requirement that the expenses for such services must be
incurred by the end of the second year following the year in which the Officer’s
Date of Termination occurs and that all payments with respect thereto must be
made by the end of the third year following the year in which the Officer’s Date
of Termination occurs.
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10. Retiree Health Care –
in the event the Officer retires from the Companies pursuant to Section 7.3
during the Agreement’s term as defined in Section 2, he/she shall continue to
receive the same or substantially similar medical, hospitalization,
prescription, dental and major medical coverage as is provided, from time to
time to the senior officers of the Companies. The COBRA health care
continuation coverage period under section 4980B of the Code shall run
concurrently with the foregoing period of continued coverage. Upon
reaching age 65, the Officer shall continue to receive such coverage as is
provided to Medicare-eligible retirees. However, during retirement,
the Officer shall continue to pay the same monthly/annual contribution toward
medical/hospitalization coverage as was in effect on the effective date of
his/her retirement. He/she will be subject to any and all future
changes to plan deductibles, co-payments, etc.
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