SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
New Jersey Resources Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
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NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
------------------------
PROXY STATEMENT AND
NOTICE OF 2005 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 19, 2005
------------------------
The Annual Meeting (the "Meeting") of Shareholders of New Jersey Resources
Corporation (the "Company") will be held at 10:30 a.m., Wednesday, January 19,
2005, at the Robert B. Meyner Reception Center at the PNC Bank Arts Center, Exit
116 on the Garden State Parkway, Holmdel, New Jersey 07733, for the following
purposes:
1. To elect three directors to the Board of Directors for terms
expiring in 2008.
2. To approve the action of the Board of Directors in retaining
Deloitte & Touche LLP as auditors for the fiscal year ending September 30,
2005.
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 10,
2004, as the record date for the determination of the shareholders entitled to
notice of and to vote at the Meeting. Accordingly, only shareholders 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 fiscal 2004 is being mailed
concurrently with this proxy material to all shareholders of record.
A cordial invitation is extended to you to attend the Meeting. If you do
not expect to attend the Meeting, please vote by telephone, the Internet, or
sign, date and return the enclosed proxy promptly to the Secretary in the
enclosed envelope. Please refer to the enclosed Proxy Card for instructions
about the use of each of these options.
OLETA J. HARDEN
Secretary
Wall, New Jersey
December 17, 2004
PROXY STATEMENT
------------------------
NEW JERSEY RESOURCES CORPORATION
1415 WYCKOFF ROAD
WALL, NEW JERSEY 07719
------------------------
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 19, 2005
This proxy statement sets forth certain information with respect to the
accompanying proxy to be used at the Annual Meeting (the "Meeting") of
Shareholders 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 vote immediately.
The Company's Annual Report for fiscal year 2004 is being mailed together
with this Proxy Statement. The 2004 Annual Report is not incorporated into this
Proxy Statement and shall not be considered a part of this Proxy Statement or
soliciting materials.
This proxy statement and the accompanying proxy materials are being mailed
to shareholders on or about December 17, 2004.
PLACE OF ANNUAL MEETING
The Board has designated the Robert B. Meyner Reception Center at the PNC
Bank Arts Center, Exit 116 on the Garden State Parkway, Holmdel, New Jersey
07733, as the place of the Meeting. The Meeting will be called to order at 10:30
a.m., local time, on Wednesday, January 19, 2005.
VOTING OF SECURITIES AND SHAREHOLDER INFORMATION
The proxies solicited by this proxy statement vest in the proxy holders
voting rights with respect to the election of directors (unless the shareholder
marks the proxy to withhold that authority) and on all other matters voted upon
at the Meeting. As provided by New Jersey law, if you abstain from or withhold
your vote (whether directly or through your broker), your shares will not be
included in the total number of votes cast, and therefore will have no effect on
the vote. For purposes of determining the votes cast with respect to any matter
presented for consideration at the Meeting, only those votes cast "for" or
"against" are included. Abstentions and broker non-votes are counted only for
the purpose of determining whether a quorum is present at the Meeting. A
majority of the shares outstanding on the record date will constitute a quorum
for purposes of the Meeting.
Whether you vote by telephone, Internet or by mail, you may later revoke
your proxy at any time before it is exercised by: (i) submitting a properly
signed proxy with a later date; (ii) voting by telephone or the Internet at a
later time, or (iii) voting in person at the Annual Meeting. See the enclosed
Proxy Card for instructions.
Only holders of record of the Company's outstanding Common Stock at the
close of business on December 10, 2004 are entitled to notice of and to vote at
the Meeting. At the close of business on December 10, 2004, there were
27,837,426 outstanding shares of Common Stock. Each share is entitled to one
vote. No person, to the knowledge of the Company, based upon filings with the
Securities and Exchange Commission, held beneficially 5% or more of the
Company's Common Stock as of December 10, 2004.
The following table sets forth, as of December 10, 2004, 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 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
5% of the total shares outstanding.
TITLE OF AMOUNT AND NATURE OF
NAME SECURITY BENEFICIAL OWNERSHIP(1)(2)
---- ------------ -----------------------------------
Nina Aversano............................................... Common Stock 18,594 shares -- Direct
Lawrence R. Codey........................................... Common Stock 13,411 shares -- Direct
Laurence M. Downes.......................................... Common Stock 529,514 shares -- Direct
2,904 shares -- Indirect
R. Barbara Gitenstein....................................... Common Stock 1,430 shares -- Direct
Oleta J. Harden............................................. Common Stock 103,104 shares -- Direct
59 shares -- Indirect
Alfred C. Koeppe............................................ Common Stock 1,401 shares -- Direct
Dorothy K. Light............................................ Common Stock 28,664 shares -- Direct
72 shares -- Indirect
Glenn C. Lockwood........................................... Common Stock 155,811 shares -- Direct
Joseph P. Shields........................................... Common Stock 82,263 shares -- Direct
19 shares -- Indirect
J. Terry Strange............................................ Common Stock 3,936 shares -- Direct
David A. Trice.............................................. Common Stock 1,518 shares -- Direct
Wayne K. Tarney............................................. Common Stock 74,015 shares -- Direct
William H. Turner........................................... Common Stock 12,175 shares -- Direct
Gary W. Wolf................................................ Common Stock 21,796 shares -- Direct
George R. Zoffinger......................................... Common Stock 32,617 shares -- Direct
450 shares -- Indirect(3)
300 shares -- Indirect
All Directors and Executive Officers as a Group............. Common Stock 1,439,300 shares -- Direct
4,091 shares -- Indirect
---------------
(1) Information as to the amount and nature of beneficial ownership not within
the knowledge of the Company has been furnished by each individual.
(2) Includes shares subject to currently exercisable options or any options
exercisable within the next 60 days, and deferred stock ("Deferrals") in the
officers' deferral plan, as follows: Ms. Aversano -- 15,750 options; Mr.
Codey -- 11,250 options; Mr. Downes -- 481,800 options and 37,787 Deferrals;
Dr. Gitenstein -- 1,000 options; Ms. Harden -- 80,000 options and 12,212
Deferrals; Mr. Koeppe -- 1,000 options; Mrs. Light 20,250 options; Mr.
Lockwood -- 135,000 options and 14,144 Deferrals; Mr. Shields -- 71,375
options and 8,824 Deferrals; Mr. Strange -- 3,500 options; Mr.
Tarney -- 65,000 options and 9,013 Deferrals; Mr. Turner -- 11,250 options;
Mr. Wolf -- 20,250 options; Mr. Zoffinger -- 20,250 options and all
directors and executive officers as a group 1,225,534 options and 117,275
Deferrals.
(3) Mr. Zoffinger disclaims beneficial ownership of these securities.
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. Leonard S. Coleman, whose
term would expire at the Meeting, has submitted his resignation from the Board
of Directors, effective as of December 20, 2004. Mr. Coleman decided not to
stand for reelection after having served on the Board of Directors for almost
ten years. We thank him for his outstanding service to the Company. Because of
this resignation, subsequent to the Meeting, the Board of Directors will consist
of eleven members.
2
Three individuals have been nominated for election as directors at the
Meeting, each to serve for three-year terms expiring in 2008 and each until
their respective successors are elected and have qualified. Each of the nominees
is currently serving as a director of the Company and except for Mr. Trice, each
has been previously elected by the Company's shareholders at least twice. Mr.
Trice's nomination to the Board was recommended by a non-management director.
There were no nominee recommendations from shareholders or from any group of
shareholders. Unless otherwise indicated on a proxy, the proxy holders intend to
vote the shares each proxy 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.
Proxies solicited by the Board will be voted in favor of the nominees
listed below, unless otherwise specified in the proxy. 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 approved by the Board of Directors.
NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2008
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
[AVERSANO PHOTO] President and Chief Executive Officer ("CEO"), Aversano
Nina Aversano Consulting, L.L.C., providing consulting services to companies in
Director since 1998 the telecommunications industry since June 2002; Advisor and
Age 59 Executive Vice President, Worldwide Field Operations, Apogee
Networks, a content building and service creation software
company, from May 2001 through March 2002 and President, North
America Global Service Provider Division, Lucent Technologies, a
designer, developer and manufacturer of telecommunications
systems, software and products, from 1993 to December 2000,
formerly AT&T Network Systems Division. Member of the Board of
Advisors, The Peter J. Tobin College of Business, St. John's
University and Executive Faculty Member, The Katz School of
Business, University of Pittsburgh.
(LIGHT PHOTO) CEO, Alden Enterprises, LLC, since January 1996, a consulting
Dorothy K. Light company; Corporate Vice President and Secretary from June 1990 to
Director since 1990 July 1995, The Prudential Insurance Company of America; former
Age 67 Trustee and Chair, Milkweed Editions, a publishing company, and
former Trustee and Chair, Save the Patient, a non-profit
educational organization.
3
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
(TRICE PHOTO) Chairman since September 2004, President and CEO since 2000,
David A. Trice President and Chief Operating Officer from 1999 to 2000 and Vice
Director since March 2004 President -- Finance and International from 1997 to 1999,
Age 56 Newfield Exploration Company, an independent crude oil and
natural gas exploration and production company. President, CEO
and Director of Huffco Group, Inc. from 1991 to 1997; Director,
Hornbeck Offshore Services, Inc., an operator of oceangoing tugs
and tank barges that transport crude and refined petroleum
products in the northeastern US and in Puerto Rico and supply
vessels that support offshore oil and gas drilling and production
in the deepwater regions of the Gulf of Mexico, and Grant
Prideco, Inc., a manufacturer and supplier of oilfield drill pipe
and other drill stem products, and provider of high-performance
premium connections and tubular products.
DIRECTORS WITH TERMS EXPIRING IN 2006
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
(STRANGE PHOTO) Retired. Vice Chair and Managing Partner of U.S. Audit Practice,
J. Terry Strange from 1996 to 2002 and Global Managing Partner of Audit Practice
Director since 2003 from 1998 to 2002, KPMG LLP, an independent accounting firm.
Age 60 Director, Compass Bancshares, a financial institution,
BearingPoint, a business consulting, systems integration and
managed services firm, Group 1 Automotive, Inc., automobile
dealer franchises and collision service centers, financing,
insurance & service contracts and Newfield Exploration Company.
(WOLF PHOTO) Retired. Partner, Cahill Gordon & Reindel, a law firm, from
Gary W. Wolf 1970-2003.
Director since 1996
Age 66
(ZOFFINGER PHOTO) President and CEO, New Jersey Sports & Exposition Authority since
George R. Zoffinger March 2002; President & CEO, Constellation Capital Corp., from
Director since 1996 March 1998 to March 2002, a financial services company; President
Age 56 & CEO, Value Property Trust, a publicly owned real estate
investment trust from 1995 to February 1998; Director, NTL, Inc.,
a United Kingdom cable company; New Jersey Alliance for Action,
and New Jersey World Trade Council, Trustee, and Chairman, New
Brunswick Development Corporation.
4
DIRECTORS WITH TERMS EXPIRING IN 2007
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
(CODY PHOTO) Retired. President and Chief Operating Officer, Public Service
Lawrence R. Codey Electric & Gas Company from September 1991 through February 2000.
Director since 2000 Director, United Water Resources, Inc., a utility holding company
Age 60 with subsidiaries providing water and wastewater services,
Horizon Blue Cross Blue Shield of New Jersey, a health care
insurance provider and Sealed Air Corporation, a manufacturer and
seller of food and specialty packaging materials and systems, and
Trustee, St. Peters College.
(DOWNES PHOTO) Chairman of the Board of Directors of the Company since September
Laurence M. Downes 1996 and President and CEO of the Company since July 1995;
Director since 1995 Director and incoming Chairman, American Gas Association,
Age 47 Chairman, Safe Child Consortium, a private-public partnership for
the prevention of child abuse and neglect in New Jersey, and
Trustee, American Gas Foundation.
(GITENSTEIN PHOTO) President, The College of New Jersey since 1999; Executive Vice
R. Barbara Gitenstein President and Provost, Drake University from 1995 to 1998 and
Director since 2003 Trustee, ING Funds, a mutual funds and variable annuities
Age 56 company.
(KOEPPE PHOTO) President and Chief Operating Officer, Newark Alliance, a
Alfred C. Koeppe non-profit organization whose mission is to improve the city of
Director since 2003 Newark, NJ; President and Chief Operating Officer from March 2000
Age 58 to October 2003 and Senior Vice President -- Corporate Services
from 1996 to 2000, Public Service Electric and Gas Company;
Director, Horizon Blue Cross Blue Shield of New Jersey and a
member of the Board of Governors of the National Conference.
5
NAME AND PERIOD
SERVED AS DIRECTOR BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND OTHER AFFILIATIONS
------------------ -----------------------------------------------------------------
(TURNER PHOTO) Dean of College of Business, Stony Brook University, New York,
William H. Turner New York since January 2004; Senior Partner, Summus Limited, a
Director since 2000 consulting firm specializing in the financial services industry,
Age 64 from September 2002 to January 2004. Chairman from September 1999
to September 2002, and President from August 1997 to September
2002, PNC Bank, N.A., New Jersey and Northeast Region and retired
as Vice Chairman, Chase Bank in 1996. Director, Franklin
Electronic Publishers, an electronics reference products company,
Standard Motor Products, Inc., an automotive replacement parts
company, and Volt Information Sciences, Inc., a staffing
services, telecommunications and information solutions company.
Chairman, PNC Bank Regional Advisory Council; Trustee, NJN
Foundation, Atlantic Health Systems, a nonprofit health care
system and Trinity College, and President, Montclair Art Museum.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PROPOSED NOMINEES FOR THE BOARD OF DIRECTORS
INFORMATION ABOUT THE BOARD
During fiscal 2004, there were eleven meetings of the Board of Directors.
Each director attended more than 80% of the combined meetings of the Board of
Directors and the Committees on which he or she served during the year. The
Company encourages all directors to attend the Company's annual shareholders'
meeting if at all possible. Ten of the eleven directors serving at the time of
the 2004 annual shareholders meeting attended the Company's annual shareholders
meeting in 2004.
BOARD STANDARDS OF INDEPENDENCE
The Board has determined that each member of the Board, other than the CEO,
must be "independent" and have no relationships with the Company. The standards
set by the Board are more stringent than the definition of "independence" set
forth in the New York Stock Exchange listing standards. With the exception of
Mr. Downes, the Chairman of the Board and CEO, each member of the Board has been
determined to be independent in accordance with the above standards.
NON-MANAGEMENT DIRECTORS
The non-management members of the Board meet without management present at
each regularly scheduled meeting of the Board. The non-management director
meetings are chaired by the lead director, currently Mr. Lawrence R. Codey. Any
shareowner wishing to communicate with the non-management directors on an
anonymous basis may do so by calling Ethicspoint, Inc., an unaffiliated
toll-free hotline service at 1-866-384-4277 or via E-mail at
ethicspoint.com. Ethicspoint, Inc will then notify the lead director or another
designated representative of the non-management directors. A copy of the Board's
Corporate Governance Guidelines and the policy on communicating with the
non-management directors are available on the Company's website at
njliving.comunder the caption "Investor Relations".
CODE OF BUSINESS CONDUCT AND ETHICS
The Board of Directors has adopted a Code of Business Conduct and Ethics
governing the Company's CEO and senior financial officers, as required by the
Sarbanes-Oxley Act and SEC regulations and a code for all senior management as
required by the NYSE rules. Our Codes govern such matters as conflicts of
interest, use of corporate opportunity, confidentiality, compliance with law and
the like. A copy of both Codes of Conduct are available on the Company's website
at njliving.com under the caption "Investor Relations".
6
INFORMATION ABOUT THE BOARD'S COMMITTEES
AUDIT COMMITTEE
The Audit Committee consists of Nina Aversano, Lawrence R. Codey, Alfred C.
Koeppe, J. Terry Strange (Committee Chair) William H. Turner and Gary W. Wolf.
Mr. Strange has been determined by the Board to be the Audit Committee financial
expert, as such term is defined by SEC Regulation S-K Item 401(h)(2), and each
member of the Audit Committee has been determined to be financially literate.
Each member of the Audit Committee is independent, under the standards set by
the Board, which are more stringent than the standards set by the New York Stock
Exchange. In addition, each Audit Committee member satisfies the audit committee
independence standards under the Sarbanes-Oxley Act of 2002. The Audit Committee
met fifteen times during fiscal 2004 for the purpose of overseeing management's
responsibilities for accounting, internal controls and financial reporting. The
Committee also selects the independent public accounting firm to serve as the
Company's auditors for each fiscal year, approves the retention of such firm for
any other purposes, and approves the audit and non-audit fees the Company pays
to such firm. The functions and responsibilities of the Committee are described
in the "Report of the Audit Committee" set forth below. A copy of the Audit
Committee Charter is available on the Company's website at njliving.com under
the caption "Investor Relations".
EXECUTIVE COMMITTEE
The Executive Committee consists of Lawrence R. Codey (Committee Chair),
Laurence M. Downes, Dorothy K. Light, J. Terry Strange, Gary W. Wolf and William
H. Turner. 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 did not meet during fiscal 2004.
FINANCIAL POLICY COMMITTEE
The Financial Policy Committee, which during fiscal 2004 consisted of
Leonard S. Coleman, Dr. R. Barbara Gitenstein, Dorothy K. Light, J. Terry
Strange, David A. Trice and William H. Turner (Committee Chair), met three times
during fiscal 2004 to review and make recommendations to the Board concerning
financing proposals, dividend guidelines, capital and operating budgets and
other corporate financial and pension matters.
LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
The Leadership Development and Compensation Committee, which consisted
during fiscal 2004 of Leonard S. Coleman, Dr. R. Barbara Gitenstein, Alfred C.
Koeppe, Dorothy K. Light (Committee Chair) and George R. Zoffinger, met three
times during fiscal 2004 to oversee the performance and qualifications of senior
management, and to interpret, implement and administer the annual compensation
and benefits of all elected officers of the Company and its subsidiaries. See
the "Report of the Leadership Development and Compensation Committee," below,
regarding the factors considered by the Committee in its review of executive
compensation. Each member of the Leadership Development and Compensation
Committee is "independent" under the standards set by the Board, which are more
stringent than the standards set by the New York Stock Exchange. A copy of the
Leadership Development and Compensation Committee Charter can be found on the
Company's website at njliving.com under the caption "Investor Relations".
NOMINATING/CORPORATE GOVERNANCE COMMITTEE
The Nominating/Corporate Governance Committee is comprised of Nina
Aversano, Lawrence R. Codey, Alfred C. Koeppe, David A. Trice, Gary W. Wolf
(Committee Chair) and George R. Zoffinger, and this Committee met five times in
fiscal 2004. Each member of the Nominating/Corporate Governance Committee is
independent under the standards set by the Board, which are more stringent than
the standards
7
set by the New York Stock Exchange. The purpose of the Committee is to assess
the corporate needs for an effective Board and then, using those assessments,
make recommendations to the Board regarding Board composition, size, additional
skills and talents needed. The Committee recommends to the Board the nominees
for election as directors, and considers performance of incumbent directors to
determine whether to nominate them for re-election. The Nominating/Corporate
Governance Committee will consider qualified nominations for directors
recommended by shareholders. Shareholder nominees will be evaluated under the
same standards as nominees recommended by management or the outside members of
the Board of Directors. 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 September 14, 2005. Nominees will be required to bring
the skills and talents and have the knowledge and expertise at the time needed
to assure that the composition, structure and operation of the Board serve the
best interest of the Company and its shareholders. The Nominating/Corporate
Governance Committee has a written Charter. The Committee's Charter is available
on the Company's website at njliving.com under the caption "Investor Relations".
AUDIT COMMITTEE REPORT
In accordance with the Audit Committee Charter, the Audit Committee assists
the Board in fulfilling its responsibility for oversight of the integrity of the
accounting, auditing and financial reporting practices of the Company. During
the fiscal year ended September 30, 2004, the Audit Committee met fifteen times,
and the Audit Committee reviewed and discussed the interim financial information
contained in the Company's Quarterly Reports on Form 10-Q, and discussed press
releases announcing earnings, with the Chief Financial Officer and the
independent auditors prior to public release.
In discharging its oversight responsibility as to the audit process, the
Audit Committee took the following actions, consistent with Independence
Standards Board Standard No. 1 "Independence Discussions with Audit Committees":
1) obtained from the independent auditors a formal written statement describing
all relationships between the auditors and the Company that might bear on their
independence, 2) discussed with the auditors relationships that may impact their
objectivity and independence and 3) satisfied itself as to the auditors'
independence. The Audit Committee also discussed with management, the internal
auditors and the independent auditors the quality and adequacy of the Company's
internal controls and the internal audit functions, organization,
responsibilities, budget and staffing. The Audit Committee reviewed with both
the independent and the internal auditors their audit plans, audit scope, and
identification of audit risks.
The Audit Committee reviewed and discussed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Audit Committee also discussed the results of the
internal audit examinations.
The Audit Committee reviewed and discussed the audited financial statements
of the Company as of and for the fiscal year ended September 30, 2004 with
management and the independent auditors. Management has the responsibility for
the preparation of the Company's financial statements and the independent
auditors have the responsibility for the audit of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board the filing of
the Company's audited financial statements in its Annual Report on Form 10-K for
the fiscal year ended September 30, 2004, with the Securities and Exchange
Commission. The Audit Committee also reappointed the independent auditors for
the fiscal year ending September 30, 2005.
J. Terry Strange, Chair Alfred C. Koeppe
Nina Aversano William H. Turner
Lawrence R. Codey Gary W. Wolf
8
Dated: November 16, 2004
The "Audit Committee Report" above shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
REMUNERATION OF DIRECTORS
Directors who are not officers of the Company or its subsidiaries are
compensated as follows: (1) each Director receives an annual retainer of
$24,800, of which $8,000 is paid in Company common stock; (2) each Director
receives a fee of $1,000 for each Board and committee meeting attended, except
for Audit Committee meetings, for which a fee of $1,500 is paid and (3) the
chairs of the Audit and Executive Committees receive an annual retainer of
$10,000 and the chairs of all other Board committees receive an annual retainer
of $5,000. Directors also receive, at the time they are first elected to the
Board, a one-time award of 200 shares and options to purchase 5,000 shares of
the Company's common stock pursuant to the Employee and Outside Director
Long-Term Incentive Compensation Plan (the "Long-Term Plan"). An additional
award of options to purchase 1,500 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. Share ownership guidelines have been established for
Directors that specify the expected level of stock ownership to be achieved over
a five-year period.
LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
REMUNERATION OF EXECUTIVE OFFICERS
The Leadership Development and Compensation Committee (the "Committee") of
the Board of Directors consists of five non-employee directors who are
independent of the Company under the standards set by the Board, which are more
stringent than standards set by the New York Stock Exchange.
The Committee's executive compensation philosophy is designed to attract,
energize, reward and retain qualified executive personnel who will provide
superior results and enhance the Company's position in a highly competitive
market. The Committee reviews the performance of all officers of the Company and
its subsidiaries, sets the compensation of the CEO and makes recommendations to
the Board with respect to the compensation of all other officers. The Committee
also makes recommendations to the Board with respect to the benefit programs
that are applicable to all officers and has oversight of certain of the
Company's employee benefit plans.
The Committee uses a national compensation consultant to review competitive
compensation levels of senior executives in the industry. Through this process,
the Committee identifies the competitive compensation levels, both with respect
to base salary and overall executive compensation packages among the Company's
peers. Many, but not all, of the compensation peer companies are contained in
the Standard and Poor's Utilities Index used in the performance graph on page
13.
The Committee compares this external data to the base salary and other
compensation provided to senior Company executives. In this fashion, the
Committee is able to establish both individual compensation levels and target
performance levels under the Company's Officer Incentive Compensation Plan (the
"Incentive Plan").
Compensation levels set for each executive officer are based upon
marketplace compensation information, the Committee's judgment and 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, staff development, change in
leadership responsibilities and the individual's specific contributions to
corporate objectives which have a significant and positive impact on the
9
Company. Performance of the subsidiary companies is measured by comparing actual
achievements to financial and strategic objectives in their annual operating
plans. Company performance is reviewed to ensure consistency with the overall
corporate vision, mission and strategies. In making compensation decisions for
fiscal year 2004 the Committee reviewed executive accomplishments in total
energy deliveries, number of new customers, cost of adding a new customer,
earnings, expenses, return on equity, operating and net income, total
shareholder return and the Company's assumption of a leadership role in
energy-related businesses.
The Committee has established three programs providing for direct
compensation of executive officers: the Base Salary Program, the Incentive Plan
and the Long-Term Plan. The structure of the total executive compensation
package is such that when the Company achieves its target annual business
objectives, the Company's senior executives receive a level of compensation
approximately equivalent to the median compensation paid to similar executive
positions in the marketplace.
BASE SALARY PROGRAM
In setting the base salary level of each executive officer, the Committee
considers the base salaries of executive officers in comparable positions in
similar companies. The Committee also considers the executive's experience
level, time and placement in grade and the actual performance of the executive.
Changes in compensation are directly dependent upon individual and Company
performance.
INCENTIVE PLAN
Under the Incentive Plan, officers and certain key employees of the Company
and New Jersey Natural Gas Company ("NJNG"), a wholly-owned subsidiary of the
Company, 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 opportunity 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 attainment of a portfolio of
goals including earnings, customer satisfaction and leadership. Incentive award
levels provide payments that are at approximately market median when target
results are achieved.
LONG-TERM PLAN
The Long-Term Plan provides for the award of stock options (the "Stock
Options"), performance units (the "Performance Units"), or restricted stock (the
"Restricted Stock") to designated employees. The Committee believes that
Performance Units, each unit of which is equal to a share of Common Stock, and
Restricted Stock awards provide 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. 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, and the performance-based Performance Units and Restricted Stock provide
strong incentives to executives by relating 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. Share ownership guidelines were established for executives in
fiscal 2003, specifying by position an expected level of stock ownership to be
achieved over a five-year period.
Grants under the Long-Term Plan may be made by the Committee every other
year in the form of Performance Units and Stock Options. Grants of Restricted
Stock have not been made under the Long-Term Plan. Performance Units are valued
at fair market value of Company stock at the time of grant. The Performance
Units will only vest upon (i) the attainment of a schedule of performance goals
related to shareholder return as measured against a peer group and (ii)
additional service beyond the point when the
10
goal is reached. The higher the ranking of the Company among the peer group, the
greater the number of Performance Units that will be earned, up to a maximum of
150% of target. No Performance Units will vest if the Company does not perform
in at least the top half of the peer group. Stock Options granted have an
exercise price equal to fair market value at the time of grant. Awards made to
executives under the Long-Term Plan are calibrated to position total
remuneration at approximately the 60th percentile of the competitive marketplace
if all awards vest. No Long-Term incentive grants were made in fiscal 2004.
CEO COMPENSATION
Mr. Downes' calendar 2004 base salary was $530,000, positioned at
approximately the median level for comparable companies. The incentive award of
$360,000 made to Mr. Downes for achievements in fiscal 2004 reflects results
that exceeded the specific fiscal 2004 goals. These goals included earnings,
customer satisfaction, total shareholder return and his overall leadership.
US INCOME TAX LIMITS ON DEDUCTIBILITY
Section 162(m) of the Internal Revenue Code (the "Code") provides that
executive compensation in excess of $1 million will not be deductible for
purposes of corporate income tax, unless it is performance-based compensation
and is paid pursuant to a plan meeting certain requirements of the Code. The
Committee has relied and intends to continue to rely on performance-based
compensation programs. The Committee expects that such programs will fulfill
future corporate business objectives. The Committee currently anticipates that,
to the extent practicable and in the Company's best interest, such programs will
be designed to satisfy the requirements of Section 162(m) with respect to the
deductibility of compensation paid. The Committee recognizes, however, that
there may be business considerations that dictate that compensation be paid that
is not deductible under Section 162(m).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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 whose executive officer or director is a director of the Company.
LEADERSHIP DEVELOPMENT & COMPENSATION COMMITTEE:
Dorothy K. Light, Chair Alfred C. Koeppe
Leonard S. Coleman George R. Zoffinger
Dr. R. Barbara Gitenstein
The "Leadership Development and Compensation Committee Report" and
"Comparison of Five Year Cumulative Total Return" graph shall not be deemed
incorporated by reference by any general statement incorporating this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
11
EXECUTIVE COMPENSATION
The following table sets forth compensation paid to the CEO and the four
most highly compensated executive officers of the Company as of September 30.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION AWARDS
COMPENSATION ---------------------
----------------- LTIP UNIT ALL OTHER
SALARY BONUS AWARD(S)* OPTIONS* COMPENSATION**
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) (#) ($)
--------------------------- ---- ------- ------- ---------- -------- --------------
Laurence M. Downes...................... 2004 541,962 300,000 0 0 4,000
Chairman, CEO and President 2003 486,154 250,000 16,000 60,000 4,000
2002 437,711 220,000 0 0 4,000
Glenn C. Lockwood....................... 2004 225,654 74,800 0 0 6,472
Senior Vice President & 2003 207,231 54,000 6,000 30,000 6,217
Chief Financial Officer 2002 197,269 58,000 0 0 5,318
Oleta J. Harden......................... 2004 215,269 71,300 0 0 6,458
Senior Vice President, 2003 196,400 50,490 6,000 30,000 5,892
General Counsel & Secretary 2002 183,723 54,000 0 0 5,160
Joseph P. Shields....................... 2004 219,058 175,000 0 0 6,572
Senior Vice President, 2003 193,077 125,000 6,000 30,000 5,375
Energy Services, NJNG 2002 172,269 75,000 0 0 5,168
Wayne K. Tarney......................... 2004 189,196 60,000 0 0 5,676
Senior Vice President, Strategic
Planning 2003 179,170 45,401 2,700 16,000 5,792
2002 175,088 49,000 0 0 5,253
---------------
* Represents a share of Common Stock.
** Represents the Company's matching contributions under the Employees'
Retirement Savings Plan (the "Savings Plan").
SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS
NUMBER OF SECURITIES TO WEIGHTED AVERAGE NUMBER OF SECURITIES REMAINING
BE ISSUED UPON EXERCISE PRICE OF AVAILABLE FOR FUTURE ISSUANCE
EXERCISE OF OUTSTANDING OUTSTANDING UNDER EQUITY COMPENSATION
OPTIONS, OPTIONS, WARRANTS PLANS (EXCLUDING SECURITIES
WARRANTS AND RIGHTS AND RIGHTS REFLECTED IN COLUMN(A))
PLAN CATEGORY (A) (B) (C)
Equity compensation plans
approved by security
holders..................... 1,687,678 $26.90 838,722
Equity compensation plans
not approved by security
holders..................... None None 0
12
AGGREGATED OPTION EXERCISES IN 2004 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
EXERCISE REALIZED AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME (#) ($) (#) ($)
---- ----------- -------- ------------------- --------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Laurence M. Downes.... 36,722 799,956 316,800/195,000 4,908,000/2,774,700
Glenn C. Lockwood..... 13,959 307,523 127,500/22,500 1,884,203/222,975
Oleta J. Harden....... 8,634 198,700 72,500/22,500 1,073,452/222,975
Joseph P. Shields..... 40,000 616,487 63,875/22,500 867,335/222,975
Wayne K. Tarney....... 0 0 61,000/12,000 841,442/118,920
PERFORMANCE GRAPH
The graph below shows a comparison of the five-year cumulative return
assuming $100 invested on September 30, 1999, in the Company stock, the Company
Peer Group, the S&P Utilities Index and the S&P 500 Index. Cumulative total
return includes reinvestment of dividends.
(FIVE YEAR TOTAL RETURN GRAPH)
9/99 9/00 9/01 9/02 9/03 9/04
($) ($) ($) ($) ($) ($)
The Company 100.00 106.03 120.19 139.42 158.30 187.83
Company Peer Group* 100.00 113.82 117.05 116.59 138.03 158.33
S&P Utilities 100.00 143.27 107.23 69.37 84.92 101.42
S&P 500 100.00 113.25 83.17 66.17 82.30 93.65
* The twenty-four companies in the Company Peer Group noted above are as
follows: AGL Resources, Inc., Atmos Energy Corporation, Cascade Natural Gas
Corporation, Chesapeake Utilities Corp., NiSource, Inc., Consolidated Edison
Energy, Inc., Dominion Resources, Inc., Energy East Corporation, Keyspan
Energy Corp., Laclede Gas Co., Nicor, Inc., Northwest Natural Gas Co., NUI
Corporation, Oneok, Inc., PP&L Resources, Inc., Peoples Energy Corporation,
Piedmont Natural Gas Co., Inc., Public Service Enterprise Group, Inc., Scana
Corp., SEMCO Energy, Inc., Sempra Energy, South Jersey Industries, Inc.,
Vectren Corp., and Washington Gas Light Co. The Company includes the
performance of the Company Peer Group, because the Company Peer Group has a
higher percentage of natural gas utility and combination natural gas and
electric utility companies operating in the same region as the Company and
having comparable size and market capitalization to that of the Company, as
compared with the S&P Utilities Index.
13
RETIREMENT PLANS
The following table sets forth estimated annual benefits payable upon
normal retirement at age 65, including amounts attributable to the Plan for
Retirement Allowances for Non-Represented Employees (the "Retirement Allowance
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 7% 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. Compensation used to calculate the benefit under the
Retirement Allowance Plan is the highest consecutive sixty (60) months of base
salary and is represented in the table below. Certain of the estimated benefits
below approximate those payable to the 5 executive officers named in the Summary
Compensation Table above. Benefits collected prior to age 60 and completion of
20 years of service (excluding disability retirements) are subject to early
commencement reductions ranging from 30% to 50%, depending on age at the time of
commencement.
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
COMPENSATION 10 15 20 25 30 35 40 45
------------ ------- -------- -------- -------- -------- -------- -------- --------
$175,000............. $24,232 $ 36,348 $ 48,464 $ 60,580 $ 72,831 $ 85,285 $ 97,739 $110,192
200,000............. 28,048 42,071 56,095 70,119 84,278 98,640 113,001 127,363
225,000............. 31,863 47,795 63,726 79,658 95,725 111,994 128,264 144,533
250,000............. 35,679 53,518 71,358 89,197 107,172 125,349 143,526 161,703
275,000............. 39,494 59,242 78,989 98,736 118,619 138,704 158,789 178,874
300,000............. 43,310 64,965 86,620 108,275 130,065 152,058 174,051 196,044
325,000............. 47,126 70,689 94,251 117,814 141,512 165,413 189,314 213,214
350,000............. 50,941 76,412 101,883 127,353 152,959 178,768 204,576 230,385
375,000............. 54,757 82,135 109,514 136,892 164,406 192,122 219,839 247,555
400,000............. 58,573 87,859 117,145 146,431 175,853 205,477 235,101 264,725
425,000............. 62,388 93,582 124,776 155,971 187,300 218,832 250,364 281,896
450,000............. 66,204 99,306 132,408 165,510 198,747 232,186 265,626 299,066
475,000............. 70,019 105,029 140,039 175,049 210,194 245,541 280,889 316,236
500,000............. 73,835 110,753 147,670 184,588 221,640 258,896 296,151 333,407
525,000............. 77,651 116,476 155,301 194,127 233,087 272,250 311,414 350,577
550,000............. 81,466 122,200 162,933 203,666 244,534 285,605 326,676 367,747
575,000............. 85,282 127,923 170,564 213,205 255,981 298,960 341,939 384,917
The number of years of credited service for the named executive officers
are set forth below:
YEARS OF
YEARS OF CREDITED SERVICE
NAME CREDITED SERVICE AT 65 AS OF 9/30/04
---- ---------------------- ----------------
Laurence M. Downes..................... 37 20
Oleta J. Harden........................ 30 20
Glenn C. Lockwood...................... 38 16
Joseph P. Shields...................... 39 21
Wayne K. Tarney........................ 10 9
In late 2004, the Company offered an early retirement program to certain
eligible officers of the Company and its affiliated companies, which was similar
to one offered earlier in the year to certain eligible non-officer employees.
Under the program, officers electing to participate will, for purposes of
determining their pension benefit, be treated as if they were five years older
and receive credit for three additional years of service. The election will be
effective on a date selected by the Company within the next two years. Ms.
Harden and
14
Mr. Tarney have elected to participate in the program, and so will receive three
additional years of service credit for purposes of determining their pension.
With the addition of 5 years of age under the program, Ms. Harden can collect an
unreduced pension benefit before age 60 and Mr. Tarney can collect an unreduced
benefit before age 65. These accelerated pension payments are in liew of
compensation and benefits they would otherwise receive if their employment were
to continue.
To the extent benefits that would otherwise be payable to an employee under
the Retirement Allowance Plan and the Savings Plan exceed the specified limits
on such benefits imposed by the Code, the Company intends to pay such excess
benefits to the employee at the time the employee receives payment under the
respective plan. These excess benefit payments would be made from the general
funds of the Company. As of September 30, 2004, Messrs. Downes, Lockwood and
Shields and Ms. Harden, were eligible for excess benefit payments under both
plans. Additionally, any officer electing the early retirement program,
including Mr Tarney, will be eligible for excess benefit payments under the
Retirement Allowance Plan.
The Company has supplemental retirement agreements ("Supplemental
Retirement Agreements") with Messrs. Downes, Lockwood, Shields and Tarney, and
Ms. Harden and certain other officers not named in the Summary Compensation
Table, payable over a five-year period commencing with retirement at age 65. At
projected retirement, the total maximum amount currently payable to Mr. Downes
under his Supplemental Retirement Agreement would be $250,000. Messrs. Lockwood
and Shields would each be entitled to maximum amounts of $125,000. Ms Harden's
benefit will be reduced because of her election to participate in the early
retirement program; however, Mr. Tarney will be entitled to the maximum amount
of $125,000.
CHANGE OF CONTROL ARRANGEMENTS
Under the Long-Term Plan, in the event of a Change of Control (as defined
in the Long-Term Plan) of the Company, the Board may, among other things,
accelerate the entitlement to outstanding benefits awarded thereunder. Pursuant
to the Long-Term Plan a "Change of Control" shall be deemed to have occurred if
(1) absent prior approval by the Board, thirty (30%) percent or more of the
Company's outstanding securities entitled to vote in elections of directors
shall be beneficially owned, directly or indirectly, by any person, entity or
group; or (2) individuals currently constituting the Board (or the successors of
such individuals nominated by a Board on which such individuals or such
successors constituted a majority) cease to constitute a majority of the Board.
Pursuant to the Supplemental Retirement Agreements of Messrs. Downes,
Lockwood, Shields and Tarney, and Ms. 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 SEC, 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, unless the election, or the nomination for election by the Company's
shareholders, 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 and certain other officers not named 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
15
agreements further provide that, if any such executive is subject to the
so-called "golden parachute" excise tax imposed under Section 4999 of the 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
shareholders 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Apart from the delivery of gas service to any Director or executive officer
living in the Company's service territory, the Company does not engage in
transactions with its directors or executive officers.
APPOINTMENT OF AUDITORS
[ITEM (2) ON PROXY CARD]
ITEM 2
The shares represented by the proxies 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 shareholders on the
financial statements of the Company for the fiscal year ending September 30,
2005. Each professional service performed by Deloitte & Touche LLP during fiscal
2004 was approved in advance and the possible effect on the auditors'
independence was considered by the Audit Committee. Deloitte & Touche did not
provide any non-audit related services for the Company during fiscal 2004.
Information relating to fees paid to Deloitte & Touche over the past two years
is available below.
The Audit Committee has retained Deloitte & Touche LLP to report to the
shareholders on the financial statements of the Company for the fiscal year
ending September 30, 2005. Although submission of the appointment of independent
public accountants to shareholders is not required by law, the Board of
Directors, consistent with its past policy, considers it appropriate to submit
the selection of auditors for shareholder 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 shareholders do not approve the selection of
Deloitte & Touche LLP, but would reconsider its selection if the shareholders'
action so warrants.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE APPOINTMENT OF DELOITTE & TOUCHE LLP
16
OTHER MATTERS
PRINCIPAL ACCOUNTING FIRM FEES
Aggregate fees billed to the company for the fiscal years ended September
30, 2004, and 2003 by the Company's principal accounting firm, Deloitte & Touche
LLP, the member firms of Deloitte Touche Tohmatsu, and their respective
affiliates (collectively, "Deloitte & Touche") are shown in the following table:
FISCAL YEAR ENDED
SEPTEMBER 30,
-------------------
2004 2003
-------- --------
Audit Fees.................................................. $570,210 $474,100
Audit Related fees(b)....................................... -- 34,400
-------- --------
Total audit and audit-related fees.......................... 570,210 508,500
Tax Fees(c)................................................. 74,092 47,375
All Other Fees.............................................. -- --
-------- --------
Total Fees........................................ $644,302 $555,875
======== ========
---------------
(a) Includes fees for audits of Company and subsidiary annual financial
statements, reviews of Company financial statements included in the
Company's quarterly reports on Form 10-Q, and services rendered in
connection with Sarbanes-Oxley compliance and certain financing
transactions.
(b) Includes Sarbanes-Oxley readiness training provided in fiscal year ended
September 30, 2003.
(c) Includes fees for the review of the federal tax return of the Company and
its subsidiaries in 2004 and 2003 as well as certain tax services rendered
in 2004 related to the Company's charitable foundation and Canadian
operations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's equity securities, to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
The Company believes that all such filing requirements applicable to its
officers and directors (the Company not being aware of any ten percent holder)
were complied with during fiscal 2004.
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, internet 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 The Altman Group, Inc.
a fee of $5,000 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 proxies from beneficial owners.
SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 2006 Annual
Meeting must be received by the Company on or before August 18, 2005 to be
considered for inclusion in the Company's Proxy Statement and for consideration
at that meeting. Shareholders submitting such proposals are required to be the
beneficial owners of shares of the Company's Common Stock amounting to at least
$2,000 in market value and to have held such shares for at least one year prior
to the date of submission.
17
Shareholder proposals submitted to the Company outside the processes of
Rule 14a-8 of the Exchange Act (i.e., the procedures for placing a shareholder
proposal in the Company's proxy materials) with respect to the Company's 2006
annual meeting of shareholders will be considered untimely if received by the
Company after September 13, 2005. Accordingly, the proxy with respect to the
Company's 2006 annual meeting of shareholders will confer discretionary
authority to vote on any shareholder proposals received by the Company after
such date.
OTHER BUSINESS
The Board does not know of any other business that 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 17, 2004
18
PROXY
NEW JERSEY RESOURCES CORPORATION
1415 Wyckoff Road, Wall, NJ 07719
Solicited on behalf of the BOARD OF DIRECTORS
for the 2005 Annual Meeting of Shareholders
The undersigned hereby appoints Oleta J. Harden and Gary W. Wolf, with full
power of substitution, proxies to represent the undersigned at the Annual
Meeting of Shareholders of New Jersey Resources Corporation to be held at 10:30
a.m., local time, on Wednesday, January 19, 2005, at the Robert B. Meyner
Reception Center at the PNC Bank Arts Center, Exit 116 on the Garden State
Parkway, Holmdel, New Jersey 07733 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.
---------------
SEE REVERSE SEE REVERSE
SIDE SIDE
---------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
52-4418 New 12/04
Please mark
[X] votes as in
this example.
Unless otherwise indicated, this proxy will be voted "FOR" all nominees for
election as directed and "FOR" the proposals referred to herein.
1. Election of Directors.
Nominees: (01) Nina Aversano, (02) Dorothy K. Light, (03) David A. Trice
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] __________________________________________
For all nominee(s) except as written above
2. To approve the retention of Deloitte & Touche LLP as auditors for the
fiscal year ending September 30, 2005.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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: _________