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EXHIBIT 10-12A
FIRST AMENDMENT
TO THE EMPLOYMENT CONTINUATION AGREEMENT
THIS AMENDMENT to the Employment Continuation Agreement between New
Jersey Resources Corporation, a New Jersey corporation (the "Company"), and
[NAME] (the "Executive"), dated as of this 1st day of December, 1997.
W I T N E S S E T H :
WHEREAS, the Company has employed the Executive in an officer position
with the Company or affiliate thereof;
WHEREAS, the Company, having determined that the Executive holds an
important position with the Company and that his continued employment in the
event of a Change of Control or Potential Change of Control (as defined in
Section 2) is in the best interest of shareholders, entered into an employment
continuation agreement with the Executive, dated [AGREEMENT DATE] (the
"Agreement");
WHEREAS, the Company desires to assure itself of the Executive's
services during the period in which it is confronting a Change of Control or
Potential Change of Control, and to provide the Executive certain financial
assurances to enable the Executive to perform the responsibilities of his
position without undue distraction and to exercise his judgment without bias to
his personal circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive
desire to amend the Agreement, in accordance with Section 13(c), with respect to
certain rights and obligations upon the occurrence of the Executive's employment
termination under Section 7(c) following a Change of Control or a Potential
Change of Control;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in the Agreement and herein this Amendment, it is hereby agreed by and
between the Company and the Executive to amend the Agreement by the deletion of
Section 7(e) in its entirety and amended to read as follows:
"(e) Certain Further Payments by the Company.
(i) Application of Section 7(e). In the event that any amount
or benefit paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid
or distributed to the Executive by the Company or any affiliated
company (collectively, the "Covered Payments"), are or become subject
to the tax (the "Excise
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Tax") imposed under Section 4999 of the Code or any similar tax that
may hereafter be imposed, the Company shall pay to the Executive at the
time specified in Section 7(e)(v) below an additional amount (the "Tax
Reimbursement Payment") such that the net amount retained by Executive
with respect to such Covered Payments, after deduction of any Excise
Tax on the Covered Payments and any Federal, state and local income tax
and Excise Tax on the Tax Reimbursement Payment provided for by this
Section 7(e), but before deduction for any Federal, state or local
income or employment tax withholding on such Covered Payments, shall be
equal to the amount of the Covered Payments.
(ii) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(A) such Covered Payments will be treated as "parachute
payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the
"base amount" (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise
Tax, unless, and except to the extent that, in the
good faith judgment of the Company's independent
certified public accountants appointed prior to the
Effective Date or tax counsel selected by such
accountants (the "Accountants"), the Company has a
reasonable basis to conclude that such Covered
Payments (in whole or in part) either do not
constitute "parachute payments" or represent
reasonable compensation for personal services
actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the "base
amount," or such "parachute payments" are otherwise
not subject to such Excise Tax, and
(B) the value of any non-cash benefits or
any deferred payment or benefit shall be determined
by the Accountants in accordance with the principles
of Section 280G of the Code.
(iii) Calculation of Tax Reimbursement Payment. For purposes
of determining the amount of the Tax Reimbursement Payment, the
Executive shall be deemed to pay:
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(A) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the
calendar year in which the Tax Reimbursement Payment
is to be made, and
(B) any applicable state and local income taxes at the
highest applicable marginal rate of taxation for the
calendar year in which the Tax Reimbursement Payment
is to be made, net of the maximum reduction in
Federal incomes taxes which could be obtained from
the deduction of such state or local taxes if paid in
such year.
(iv) Adjustments in Respect of Tax Reimbursement Payment. In
the event that the Excise Tax is subsequently determined by the
Accountants or pursuant to any proceeding or negotiations with the
Internal Revenue Service to be less than the amount taken into account
hereunder in calculating the Tax Reimbursement Payment made, the
Executive shall repay to the Company, at the time that the amount of
such reduction in the Excise Tax is finally determined, the portion of
such prior Tax Reimbursement Payment that would not have been paid if
such Excise Tax had been applied in initially calculating such Tax
Reimbursement Payment, plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding
the foregoing, in the event any portion of the Tax Reimbursement
Payment to be refunded to the Company has been paid to any Federal,
state or local tax authority, repayment thereof shall not be required
until actual refund or credit of such portion has been made to the
Executive, and interest payable to the Company shall not exceed
interest received or credited to the Executive by such tax authority
for the period it held such portion. The Executive and the Company
shall mutually agree upon the course of action to be pursued (and the
method of allocating the expenses thereof) if the Executive's good
faith claim for refund or credit is denied.
In the event that the Excise Tax is later determined
by the Accountants or pursuant to any proceeding or negotiations with
the Internal Revenue Service to exceed the amount taken into account
hereunder at the time the Tax Reimbursement Payment is made (including,
but not limited to, by reason of any payment the existence or amount of
which cannot be determined at the time of the Tax Reimbursement
Payment), the Company shall make an additional Tax Reimbursement
Payment in respect of such excess (plus any interest or penalty payable
with respect to such excess) at the time that the amount of such excess
is finally determined.
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(v) Payment. The Tax Reimbursement Payment (or portion
thereof) provided for in Section 7(e)(i) above shall be paid to the
Executive not later than 10 business days following the payment of the
Covered Payments; provided, however, that if the amount of such Tax
Reimbursement Payment (or portion thereof) cannot be finally determined
on or before the date on which payment is due, the Company shall pay to
the Executive by such date an amount estimated in good faith by the
Accountants to be the minimum amount of such Tax Reimbursement Payment
and shall pay the remainder of such Tax Reimbursement Payment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined, but in no event
later than 45 calendar days after payment of the related Covered
Payment. In the event that the amount of the estimated Tax
Reimbursement Payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to
the Executive, payable on the fifth business day after written demand
by the Company for payment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code)."
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
NEW JERSEY RESOURCES CORPORATION
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By: XXXXXXXX X. XXXXXX
Title: President and Chief Executive Officer
ATTEST:
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NAME 2
WITNESSED:
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