Exhibit (10)(l)(i)
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SOUTH JERSEY INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM
EFFECTIVE: October 1, 1983
AMENDED and RESTATED: July 1, 1997
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SOUTH JERSEY INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM
TABLE OF CONTENTS
Item Description Page(s)
I Purpose 1
II Definitions 1
III Program Retirement Income 2
IV Protection of Confidential
Information: Non-competition 4
V Miscellaneous 5
ATTACHMENT A Individual Agreement 8
ATTACHMENT B Sample Calculation 10
ATTACHMENT C Projected Officer Benefits as of
January 1, 1997 11
- Table of Contents -
SOUTH JERSEY INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM
I. PURPOSE. South Jersey Industries, Inc., and its subsidiary
companies as defined in Section II (e), hereby establish this
Program, effective October 1, 1983, amended and restated
effective January 1, 1989, September 1, 1991, and July 1, 1997
for the purpose of providing retirement income benefits to
designated officers of the Companies.
II. DEFINITIONS.
(a) "Accrued Benefit" shall mean a vested right to benefits
under the Program which shall commence upon the Officer's
attaining age 50 while still in the service of the Company; or
death after attaining age 50 and while employed by the Company.
The "accrued benefit" shall be equivalent to 2% per year of
service (inclusive of both the qualified plan and the SERP) up to
the maximum stipulated in Section III (a)(1), plus an additional
5% of Final Average Compensation.
(b) "Actuarial Equivalent" shall mean that all benefit forms
payable under this Program shall be the actuarial equivalent of a
Life Annuity with six years guaranteed. The actuarial factors
used in making those determinations shall be the applicable
actuarial factors specified in the Plan, as defined in Section
2(i).
(c) "Board of Directors" shall mean the Board of Directors of
South Jersey Industries, Inc.
(d) "Committee" shall mean the Compensation/Pension Committee as
appointed by the Board of Directors to administer the Program
pursuant to Section 5(a) hereunder.
(e) "Company" shall mean South Jersey Industries, Inc.; South
Jersey Gas Company; Energy & Minerals, Inc; South Jersey Energy
Company; South Jersey Fuel Company and R & T Group, Inc.
(f) "Effective Date" shall mean October 1, 1983. The effective
date of this Amendment and Restatement is July 1, 1997.
(g) "Final Average Compensation" shall mean the Officer's
average total cash compensation (salary plus annual incentive
bonus earned and paid) for the highest 36 consecutive calendar
months of the final 60 months prior to the earliest of the
Officer's actual retirement, death or disability.
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(h) "Officer" shall mean Chief Executive Officer, President,
Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents, Assistant Vice Presidents, Secretary, Assistant
Secretaries, Treasurer, Assistant Treasurers, Controller and
Assistant Controllers of the Company, or Officer as prescribed by
the Bylaws of the Company from time to time, who have attained
the age of 50.
(i) "Plan" shall mean the qualified Retirement Plan for non-
union employees of South Jersey Industries, and its subsidiary
companies as identified in the Plan Document.
(j) "Program" or "SERP" shall mean the Supplemental Executive
Retirement Program of the Company as set forth in this document,
including any and all amendments hereto and restatements hereof.
(k) "Primary Social Security" shall mean the primary benefit
paid to an Officer under the Federal Social Security Act, as
amended from time to time.
(l) "Year of Service" shall have the same meaning as the
definition given under Section 3.03(a) of the Plan.
(m) "Change in Control" for the exclusive purposes of this plan,
shall mean any of the following: (1) approval by the shareholders
of the Company without the recommendation and approval of the
Board of Directors of the Company of any plan or proposal for the
consolidation, merger, liquidation, dissolution or acquisition of
the Company or all or substantially all of its assets; (2)
election to the Board of Directors of the Company of directors
who constitute a majority of the directors, different from the
individuals who at the effective date of this amendment and
restatement of the SERP constituted the entire Board of Directors
of the Company, unless those individuals were recommended for
election as directors by a majority of the original Board of
Directors, or by successor directors recommended by the original
Board of Directors; or (3) the acquisition by any person of 20%
or more of the stock of the Company having general voting rights
in the election of directors (for purposes of this clause (3),
the term "person" shall include any individual or entity or any
combination of two or more individuals or entities acting as a
group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934 for the purpose of acquiring, holding or
disposing of stock of the Company).
III. PROGRAM RETIREMENT INCOME.
The Company agrees to pay a Program benefit to an Officer under
the following circumstances and conditions:
(a) Retirement Benefit. The benefit payable to an Officer
eligible under this plan upon retirement at the age of 60, or
upon early retirement as defined in Section III(b) shall be as
follows:
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(1) A benefit of 2% of the Officer's final average
compensation as defined under Section 2(g), multiplied by
the Officer's years of service (not to exceed 30 years),
inclusive of the qualified Pension Plan Benefit; except in
the instance where the qualified Pension Plan Benefit yields
a percentage of final average compensation calculated on the
basis of a Life Annuity with six years guaranteed in excess
of 60%, whereas, in such case, the higher qualified Plan
benefit shall be payable, plus,
(2) an additional 5% of the Final Average Compensation as
defined under Section 2(g), and pursuant to the provisions
of Section II (a).
(3) The amount payable shall commence on the first day of
the month immediately following the Officer's retirement.
The benefit shall be payable in any form elected by the
officer from among the benefit forms available under
the Plan. The benefit under the program shall be the
Actuarial Equivalent of a Life Annuity with six years
guaranteed. However, the SERP shall provide for a 50% joint
annuitant option for the spouse of the Officer without any
actuarial reduction, for both the SERP and the "Plan". (See
Attachment "B")
(4) The benefit payable under Section 3(a)(1) shall be
supplemented to the extent necessary to ensure that the
Officer receives a benefit under this Program which is at
least equal to the benefit that would have been paid to the
Officer under the Plan had that benefit been determined
without regard to the limit on compensation taken into
account under the Plan imposed by section 401(a)(17) of the
Internal Revenue Code of 1986, as amended (the "Code") and
without regard to the limit on benefits payable under the
Plan imposed by section 415 of the Code.
(b) Early Retirement Benefit. If the Officer has attained the
age of 55 while in the service of the Company, the Officer may,
upon written application to retire made to the Company, and upon
receipt of the Company's written consent to such early
retirement, receive an annual benefit equal to the normal
retirement benefit, as calculated under Section 3(a) of this
Program, multiplied by 100% minus 1/6% (one-sixth of one percent)
for each month by which the Officer's retirement date precedes
the Officer's 60th birthday. The amount payable shall commence
on the first day of the month following the Officer's retirement.
The benefit shall be payable in any form elected by the officer
from among the benefit forms available under the Plan. The
benefit under the Program shall be the Actuarial Equivalent of a
Life Annuity with six years guaranteed with a 50% joint
annuitant option provided as indicated in Section 3(a)(3).
Further, the Board of Directors at the recommendation of the
Committee may waive all or a portion of the early retirement
penalty stipulated in this paragraph. Further, the CEO and
eligible Officer may agree to a retirement age between 58 and
60 years of age. In such instances, when the Board has either
waived early retirement penalties or the CEO and eligible officer
have agreed to a retirement date between 58 and 60, all early
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retirement penalties shall be eliminated under the SERP and the
Plan and the Officer shall be made whole through the SERP. In
such instances, when the Board has waived the early retirement
reduction, or the CEO and the eligible Officer have agreed to a
retirement date between 58 and 60, all early retirement
reductions shall be eliminated under the SERP. The offset for
Plan benefits will, however, be net of any applicable reductions.
(c) Disability Benefit. If the Officer receives disability
benefits under insurance provided by the Company, the Officer
shall continue to accumulate service for purposes of the Program
benefit as calculated under Section 3(a). The benefit shall be
based on Final Average Compensation determined to the date of
disability. The amount payable shall commence at the same time
and in the same form as the benefit under the Plan. The benefit
under the Program shall be the Actuarial Equivalent of a Life
Annuity with six years guaranteed, with a 50% joint annuitant
option provided as indicated in Section 3(a)(3).
(d) Death Benefit. If an Officer dies after attaining age 50
while employed by the Company, the Officer's spouse shall be
entitled to an annual survivor pension equal to one-half of the
Officer's Accrued Benefit calculated in accordance with Section
3(a), and without the application of any early retirement penalty
(reduction).
IV. PROTECTION OF CONFIDENTIAL INFORMATION: NONCOMPETITION.
In view of the fact that the Officer's work with the Company
brings him in close contact with many confidential affairs of the
Company, including matters of a business nature such as
information about costs, profits, markets, sales, plans for
future development and other information not readily available to
the public, the Officer who agrees to participate in the Program
also agrees:
(1) to keep confidential during and after the Officer's
employment by the Company all matters of and information
relating to the Company, and not to disclose them to anyone
outside of the Company under any circumstances, or to anyone
within the Company who is not in a position where he needs
to know such information;
(2) to deliver promptly to the Company on termination of the
Officer's employment, or at any time that the Company may so
request, all memoranda, notes, records, reports and other
documents (and all copies thereof) relating to the business
of the Company which he may then possess or have under the
Officer's control; and
(3) during the term of the Officer's employment and for a
period of ten (10) years thereafter, not directly or
indirectly to (a) enter the employ of, or render any
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services to, any person, firm or corporation engaged in any
business competitive with the business of the Company in any
area serviced by the Company or in which the Company does
business; (b) engage in such business for the Officer's own
account; or (c) become interested in any such business as an
individual, partner, director, Officer, principal, agent,
employee, trustee, consultant or in any other relationship
or capacity. Anything to the contrary herein
notwithstanding, the Officer may be retained as an
independent advisor and consultant to the President of the
Company as to such matters as the President of the Company
may from time to time request.
V. MISCELLANEOUS.
(a) Administration of Program. The Program shall be administered
by the Compensation/Pension committee appointed by the Board of
Directors. The Committee shall have full power, discretion and
authority to recommend interpretation, construction and
administration of the Program and any part thereof to the Board
of Directors. The Committee may recommend to the Board of
Directors employment of legal counsel, consultants, actuaries and
agents, as it deems desirable, in the administration of the
Program, and may rely on the opinion(s) of such counsel, the
advice of such consultants, and the computations of such
actuary(ies). The Committee shall have such rights, duties and
privileges under the Program as are allocated to the
administrative committee under the Plan. The Board of Directors
shall designate the President and Chief Executive Officer as
Program Administrator.
(b) Arbitration. Any controversy or claim arising out of or
related to this Program, including any rights to benefits which
have accrued under this Program, or the interpretation,
construction or administration of the Program, shall be settled
by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon
the award rendered by the Arbitrators is binding and may be
entered in any Court having jurisdiction thereof.
(1) The arbitration panel shall consist of three arbitrators, one
appointed by each party, and a third, neutral arbitrator
appointed by the first two arbitrators.
(2) Each party shall appoint its arbitrator within fourteen
days after the filing of the Demand for Arbitration, and the
third arbitrator shall be appointed within ten days
thereafter.
(3) The third, neutral arbitrator, shall serve as chairman
of the Arbitration Panel.
(4) All decisions of the Arbitration Panel, including the
award, must: be by at least a majority.
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(c) Amendment, Suspension and Termination. The Program may be
amended, suspended, or terminated in whole or in part at any time
and from time to time by the Board of Directors. No such
amendment, suspension or termination shall retroactively impair
or otherwise adversely affect the rights of any person to
benefits under this Program that have accrued prior to that date.
(d) Change of Control. Upon a Change of Control, the Company
shall, as soon as possible, but in no event longer than 45 days
following the Change of Control, as defined herein, make an
irrevocable contribution to a Rabbi Trust or, other comparable
funding vehicle in an amount that is equal to 120% of the amount
necessary to pay each program participant or beneficiary the
benefits accrued for the program participants and their
beneficiaries under the terms of the program on the date of the
Change in Control, determined using the same actuarial
assumptions and methods as are used in funding the Plan.
(e) Proof of Date of Birth. In order to be eligible to receive
payments under this Program, the Officer, or the Officer's
surviving spouse seeking benefits under Section 3(d) of this
Program shall provide written proof of the date of birth of the
Officer to the Committee.
(f) Notices. Each Officer or surviving spouse or their
authorized designee shall be responsible for furnishing the
Committee with the current and proper address for the mailing of
notices, reports and benefit payments. Any notice required or
permitted to be given shall be deemed given if directed to the
person to whom addressed at such address and mailed by regular
United States mail, first-class and prepaid. If any check mailed
to such address is returned as undeliverable to the addressee,
mailing of checks will be suspended until the Officer or
surviving spouse furnishes proper address.
(g) Nonalienation of Benefits. None of the payments, benefits
or rights of any Officer or surviving spouse shall be subject to
any claim or any creditor, and, in particular, to the fullest
extent permitted by law, all such payments, benefits and rights
shall be free from attachments, garnishment, trustee's process,
or any other legal or equitable process available to any creditor
of such Officer or surviving spouse.
(h) Reliance on Data. The Company, the Committee and all other
persons associated with the Program's operation shall have the
right to rely on the veracity and accuracy of any required
written data provided by the Officer or the surviving spouse
including representation of age, health and marital status.
(i) No Contract of Employment. Neither the establishment of
the Program, nor any modification thereof, nor the payment of any
benefits shall be construed as giving any Officer the right to be
retained in the service of any entity const ituting the Company,
and all officers shall remain subject to discharge to the same
extent as if the Program had never been adopted.
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(j) Severability of Provisions. If any provision of this
Program shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof,
and this Program shall be construed and forced as if such
provisions had not been included.
(k) Controlling Law. This Program shall be construed and
enforced according to the laws of the State of New Jersey, to the
extent not preempted by Federal law, which shall otherwise
control.
(l) Effect-on Other Plans. Any benefit payable under the
Program shall not be deemed salary or other compensation for the
purpose of computing benefits under any employee benefit plans or
other arrangement of the Company for the benefit of its
employees.
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ATTACHMENT "A"
SOUTH JERSEY INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Agreement dated ______________________ between South Jersey
Industries, Inc., a New Jersey Corporation, (hereinafter Referred to as the
"Company"'), and __________________________________________, an Officer of
the Company who resides at ______________________________________________.
WITNESSETH:
In consideration of the Officer's employment by the Company
hereinafter and of the covenants hereinafter set forth, it is mutually
agreed as follows:
1. OFFICER'S SERVICES. The OFFICER shall faithfully, and to the
best of the Officer's ability, devote all of the Officer's working
time exclusively to the performance of such services for the
COMPANY as may be assigned to him from time to time under written
employment agreements or otherwise and the OFFICER shall not, for
remuneration or profit, directly or indirectly render any service
to, or undertake any employment for, any other person, firm or
corporation, without first obtaining the written consent of the
President and Chief Executive Officer of the COMPANY.
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2. PROGRAM RETIREMENT INCOME. The COMPANY agrees to provide
the OFFICER with a Supplemental Executive Retirement Program as
outlined in the Plan documents attached as Exhibit "A".
3. ASSIGNABILITY. This Agreement shall inure to the benefit of
any assignee of the COMPANY, and the OFFICER specifically agrees,
on demand, to execute any and all necessary documents reasonably
requested in connection therewith.
4. ENTIRE AGREEMENT. This Agreement (including Exhibit A)
constitutes the entire understanding between the parties hereto
with reference to the subject matter hereof and shall not be
changed or modified except by a written instrument signed by both
parties. This agreement amends and restates all prior agreements
between the COMPANY and the OFFICER relating to the Supplemental
Executive Retirement Program. Otherwise, all existing contracts of
employment between the COMPANY and the OFFICER shall survive the
making of this Agreement and, except to the extent amended hereby,
remain in full force and effect.
IN WITNESS WHEREOF, the COMPANY has caused this Agreement to be
executed in duplicate by a proper and duly authorized representative
xxxxxxx, and the OFFICER has signed this Agreement in duplicate, as of the
day and year first above written.
SOUTH JERSEY INDUSTRIES, INC. OFFICER
By_______________________________ By________________________________
Title_____________________________ Title_____________________________
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