NEW JERSEY RESOURCES CORPORATION Performance Shares Agreement
Exhibit 10.21
NEW
JERSEY RESOURCES CORPORATION
2007
Stock Award and Incentive Plan
This Performance Shares Agreement (the
“Agreement”), which includes the attached “Terms and Conditions of Performance
Shares” (the “Terms and Conditions”) and the attached Exhibit A captioned
“Performance Goal and Earning
of Performance Shares”, confirms the grant on _______________ (the “Grant
Date”) by NEW JERSEY RESOURCES CORPORATION, a New Jersey corporation (the
“Company”), to _____________ (“Employee”),
under Sections 6(e), 6(i) and 7 of the 2007 Stock Award and Incentive Plan
(the “Plan”), of Performance Shares (the “Performance Shares”), including rights
to Dividend Equivalents as specified herein, as follows:
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Target
Number Granted:
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______ Performance
Shares (“Target Number”)
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How Performance Shares are
Earned and Vest: The Performance Shares, if not previously
forfeited, (i) will be earned, if and to the extent that the
Performance Goal
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defined
on Exhibit A to this Agreement is achieved, with the corresponding
number of Performance Shares earned (ranging from 0% to 150% of the Target
Number) as specified on Exhibit A, and (ii) will vest as to the
number of Performance Shares earned if Employee continues to be employed
by the Company or a Subsidiary through September 30, 2010 (the “Stated
Vesting Date”). In addition, if not previously forfeited, upon a Change in
Control the Performance Shares will be deemed earned in an amount equal to
the greater of the Target Number or the number of Performance
Shares that would have been earned based upon the actual level
of achievement if the performance period had ended at the date of the
Change in Control and will become immediately vested, and, if (and only
if) the stock of the Company remains publicly traded after the Change in
Control, any Performance Shares not earned will remain potentially
earnable in accordance with the terms of this Agreement. In
addition, if not previously forfeited, the Performance Shares will be
deemed earned and become vested upon the occurrence of certain events
relating to Termination of Employment to the extent provided in
Section 4 of the attached Terms and Conditions. The terms “vest” and
“vesting” mean that the Performance Shares have become non-forfeitable
upon the occurrence of a voluntary Termination of Employment by Employee
(excluding a Retirement). If the Performance Goal is not met
(or not fully met) and the Performance Shares are not otherwise deemed
earned by the Earning Date (as defined below), the Performance Shares (or
the unearned portion of the Performance Shares) will be immediately
forfeited. If Employee has a Termination of Employment prior to
a Stated Vesting Date and the Performance Shares are not otherwise deemed
earned and vested by that date, the Performance Shares will be immediately
forfeited except as otherwise provided in Section 4 of the attached
Terms and Conditions. Forfeited Performance Shares cease to be outstanding
and in no event will thereafter result in any delivery of shares of Stock
to Employee.
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Performance Goal and Earning
Date: The Performance Goal and Earning Date, and the number of
Performance Shares earned for specified levels of performance
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at
the Earning Date, shall be as specified in Exhibit A
hereto.
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Settlement: Performance
Shares that are to be settled hereunder, including Performance Shares
credited as a result of Dividend Equivalents, will be settled by
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delivery
of one share of Stock, for each Performance Share being settled.
Settlement shall occur at the time specified in Section 6 of the
attached Terms and
Conditions.
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The Performance Shares are subject to
the terms and conditions of the Plan and this Agreement, including the Terms and
Conditions of Performance Shares attached hereto and deemed a part hereof. The
number of Performance Shares and the kind of shares deliverable in settlement
and other terms and conditions of the Performance Shares are subject to
adjustment in accordance with Section 5 of the attached Terms and
Conditions and Section 11(c) of the Plan.
Employee acknowledges and agrees that
(i) the Performance Shares are nontransferable, except as provided in
Section 3 of the attached Terms and Conditions and Section 11(b) of the
Plan, (ii) the Performance Shares are subject to forfeiture in the event of
Employee’s Termination of Employment in certain circumstances prior to vesting,
as specified in Section 4 of the attached Terms and Conditions, and
(iii) sales of shares of Stock will be subject to any Company policy
regulating trading by employees.
Capitalized terms used in this
Agreement but not defined herein shall have the same meanings as in the
Plan.
IN WITNESS WHEREOF, NEW JERSEY
RESOURCES CORPORATION has caused this Agreement to be executed by its officer
thereunto duly authorized.
NEW JERSEY RESOURCES
CORPORATION
By:_____________________
XXXXXXXX X. XXXXXX
Chairman & CEO
EMPLOYEE
____________________
NAME
Title
Exhibit 10.21
TERMS AND
CONDITIONS OF PERFORMANCE SHARES
The following Terms and Conditions
apply to the Performance Shares granted to Employee by NEW JERSEY RESOURCES
CORPORATION (the “Company”) and Performance Shares resulting from Dividend
Equivalents (as defined below), if any, as specified in the Performance Shares
Agreement (of which these Terms and Conditions form a part). Certain terms of
the Performance Shares, including the number of Performance Shares granted,
vesting date(s) and settlement date, are set forth on the cover page hereto and
Exhibit A, which are an integral part of this Agreement.
1. General. The
Performance Shares are granted to Employee under the Company’s 2007 Stock Award
and Incentive Plan (the “Plan”), which has been previously delivered to Employee
and/or is available upon request to the Corporate Benefits Department. All of
the applicable terms, conditions and other provisions of the Plan are
incorporated by reference herein. Capitalized terms used in this Agreement but
not defined herein shall have the same meanings as in the Plan. If there is any
conflict between the provisions of this document and mandatory provisions of the
Plan, the provisions of the Plan govern. By accepting the grant of the
Performance Shares, Employee agrees to be bound by all of the terms and
provisions of the Plan (as presently in effect or later amended), the rules and
regulations under the Plan adopted from time to time, and the decisions and
determinations of the Leadership Development and Compensation Committee of the
Company’s Board of Directors (the “Committee”) made from time to
time.
2. Account for
Employee. The
Company shall maintain a bookkeeping account for Employee (the “Account”)
reflecting the number of Performance Shares then credited to Employee hereunder
as a result of such grant of Performance Shares and any crediting of additional
Performance Shares to Employee pursuant to payments equivalent to dividends paid
on shares of Stock under Section 5 hereof (“Dividend
Equivalents”).
3. Nontransferability.
Until Performance Shares become settleable in accordance with the terms of this
Agreement, Employee may not transfer Performance Shares or any rights hereunder
to any third party other than by will or the laws of descent and distribution,
except for transfers to a Beneficiary or as otherwise permitted and subject to
the conditions under Section 11(b) of the Plan. The foregoing notwithstanding,
if any Performance Share constitutes a deferral of compensation under Code
Section 409A, the Performance Share shall not be subject to anticipation,
alkienation, sale, transfer, assignment, pldege, encombrance, attachment, or
garnishment by creditors of Employee or any Beneficiary, and shall not be
subject to offset by the Company at any time before the settlement
date.
4. Termination
Provisions. The following provisions will govern the vesting and
forfeiture of the Performance Shares that are outstanding at the time of
Employee’s Termination of Employment (as defined below), unless otherwise
determined by the Committee (subject to Section 8(a) hereof):
(a) Death or Disability. In the
event of Employee’s Termination of Employment due to death or Disability (as
defined below) the Performance Shares will be deemed earned in an amount equal
to the greater of the Target Number or the number of Performance Shares that
would have been earned based upon the actual level of achievement if the
performance period had ended at the date of the Termination of Employment. A
Pro-Rata Portion (as defined below) of the Performance Shares earned, to the
extent not previously vested, will vest immediately, and such Performance
Shares, together with any then-outstanding Performance Shares that previously
became vested, will be settled in accordance with Section 6(a) hereof. Any
portion of the then-outstanding Performance Shares not earned or not vested at
or before the date of Termination will be forfeited.
(b) Termination by the Company or
Voluntarily by the Employee. In the event of Employee’s Termination of
Employment by the Company for any reason other than Disability or by Employee
voluntarily (other than a Retirement), the portion of the then-outstanding
Performance Shares not vested at the date of Termination will be
forfeited.
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Exhibit 10.21
(c) Retirement. In the event of
Employee’s Termination of Employment due to Retirement (as defined below), the
Performance Shares will be deemed earned in an amount equal to fifty percent of
the Target Number. A Pro-Rata Portion (as defined below) of the Performance
Shares earned, to the extent not previously vested, will vest immediately, and
such Performance Shares, together with any then-outstanding Performance
Shares that previously became vested, will be settled in accordance with Section
6(a) hereof. Any portion of the then-outstanding Performance Shares not earned
or not vested at or before the date of Termination will be
forfeited.
(d) Certain Definitions. The
following definitions apply for purposes of this Agreement:
(i) “Disability” means Employee has
been incapable of substantially fulfilling the positions, duties,
responsibilities and obligations of his employment because of physical, mental
or emotional incapacity resulting from injury, sickness or disease for a period
of at least six consecutive months. The Company and Employee shall agree on the
identity of a physician to resolve any question as to Employee’s disability. If
the Company and Employee cannot agree on the physician to make such
determination, then the Company and Employee shall each select a physician and
those physicians shall jointly select a third physician, who shall make the
determination. The determination of any such physician shall be final and
conclusive for all purposes of this Agreement. In the case of Performance Shares
that do not constitute a deferral of compensation under Section 409A of the
Code, only the Company can initiate a Termination of Employment due to
Disability.
(ii) “Pro Rata Portion” means a
fraction the numerator of which is the number of days that have from the Grant
Date to the date of Employee’s Termination of Employment and the denominator of
which is the number of days from the Grant Date to the Stated Vesting
Date.
(iii) “Retirement” means the Employee
terminates employment at or after age 65, or at or after age 55 with 20 or more
years of service.
(iv) “Subsidiary” means any subsidiary
corporation of the Company within the meaning of Section 424(f) of the Code
(“Section 424(f) Corporation”) and any partnership, limited liability
company or joint venture in which either the Company or Section 424(f)
Corporation is at least a fifty percent (50%) equity participant.
(v) “Termination of Employment” and
“Termination” means the earliest time at which Employee is not employed by the
Company or a Subsidiary of the Company and is not serving as a non-employee
director of the Company or a Subsidiary of the Company.
5. Dividend
Equivalents and Adjustments.
(a) Dividend Equivalents.
Dividend Equivalents will be credited on Performance Shares (other than
Performance Shares that, at the relevant record date, previously have been
settled or forfeited) and deemed reinvested in additional Performance Shares.
Dividend Equivalents will be credited with respect to unearned Performance
Shares, earned but not vested Performance Shares, and vested but not settled
Performance Shares. Dividend Equivalents will be credited as follows, except
that the Company may vary the manner of crediting (for example, by crediting
cash dividend equivalents rather than additional Performance Shares) for
administrative convenience:
(i) Cash Dividends. If the
Company declares and pays a dividend or distribution on shares of Stock in the
form of cash, then additional Performance Shares shall be credited to Employee’s
Account in lieu of payment or crediting of cash dividend equivalents equal to
the number of Performance Shares credited to the Account as of the relevant
record date multiplied by the amount of cash paid per share of Stock in such
dividend or distribution divided by the Fair Market Value of a share of Stock at
the payment date for such dividend or distribution.
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Exhibit 10.21
(ii) Non-Share Dividends. If the
Company declares and pays a dividend or distribution on shares of Stock in the
form of property other than shares of Stock, then a number of additional
Performance Shares shall be credited to Employee’s Account as of the payment
date for such dividend or distribution equal to the number of Performance Shares
credited to the Account as of the record date for such dividend or distribution
multiplied by the fair market value of such property actually paid as a dividend
or distribution on each outstanding share of Stock at such payment date, divided
by the Fair Market Value of a share of Stock at such payment date.
(iii) Share Dividends and Splits.
If the Company declares and pays a dividend or distribution on shares of Stock
in the form of additional shares of Stock, or there occurs a forward split of
shares of Stock, then a number of additional Performance Shares shall be
credited to Employee’s Account as of the payment date for such dividend or
distribution or forward split equal to the number of Performance Shares credited
to the Account as of the record date for such dividend or distribution or split
multiplied by the number of additional shares of Stock actually paid as a
dividend or distribution or issued in such split in respect of each outstanding
share of Stock.
(b) Adjustments. The number of
Performance Shares credited to Employee’s Account shall be appropriately
adjusted in order to prevent dilution or enlargement of Employee’s rights with
respect to Performance Shares or to reflect any changes in the number of
outstanding shares of Stock resulting from any event referred to in Section
11(c) of the Plan, taking into account any Performance Shares credited to
Employee in connection with such event under Section 5(a) hereof. In furtherance
of the foregoing, in the event of an equity restructuring, as defined in FAS
123R, which affects the shares of Stock, Employee shall have a legal right to an
adjustment to Employee’s Performance Shares which shall preserve without
enlarging the value of the Performance Shares, with the manner of such
adjustment to be determined by the Committee in its discretion.
(c) Risk of Forfeiture and Settlement of
Performance Shares Resulting from Dividend Equivalents and Adjustments.
Performance Shares which directly or indirectly result from Dividend
Equivalents on or adjustments to a Performance Share granted hereunder shall be
subject to the same risk of forfeiture and other conditions as apply to the
granted Performance Share and will be settled at the same time as the granted
Performance Share.
6. Settlement and
Deferral.
(a) Settlement Date. Performance
Shares granted hereunder that have been earned and vested, together with
Performance Shares credited as a result of Dividend Equivalents with respect
thereto, shall be settled by delivery of one share of Stock for each Performance
Share being settled. Settlement of a Performance Share granted hereunder shall
occur at the Stated Vesting Date (with shares to be delivered within five
business days after the Stated Vesting Date); provided, however, that settlement
shall occur earlier (i) within 90 days after the date of death of
Employee, (ii) within 60 days after termination due to Disability (subject
to Section 6(c)(iii), if applicable ), or (iii) upon a Change in
Control except that, if the Performance Shares are subject to Section 6(c)
hereof, no distribution shall be triggered if the Change in Control does not
involve an event that comes within the definition under
Section 409A(a)(2)(A)(v)); and provided further, that settlement shall be
deferred if so elected by Employee in accordance with Section 6(b) hereof.
Settlement of Performance Shares which directly or indirectly result from
Dividend Equivalents on Performance Shares granted hereunder shall occur at the
time of settlement of the granted Performance Share.
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Exhibit 10.21
(b) Elective Deferral. The
Committee may determine to permit Employee to elect to defer settlement (or
redefer) if such election would be permissible under Section 409A of the
Code. In addition to any applicable requirements under Section 409A of the
Code, any such deferral election shall be made only while Employee remains
employed and at a time permitted under Section 409A. Any elective deferral
will be subject to such additional terms and conditions as the Vice President —
Corporate Services, or the officer designated by the Company as responsible for
administration of the Agreement, may reasonably impose.
(c) Compliance with Code
Section 409A. Other provisions of this Agreement notwithstanding, if
Performance Shares constitute a "deferral of compensation" under
Section 409A of the Code (“§ 409A”) as presently in effect or hereafter
amended (i.e., the Performance Shares are not excluded or exempted under § 409A
or a regulation or other official governmental guidance thereunder; Note: an
elective deferral under Section 6(b) would cause the Performance Shares to be a
deferral of compensation subject to § 409A, and reaching Retirement eligibility
under Section 4 could cause a portion of the Performance Shares to be a deferral
of compensation subject to § 409A), settlement shall be subject to the following
rules:
(i) The Company shall have no authority
to accelerate distributions relating to such Performance Shares in excess of the
authority permitted under § 409A;
(ii) Any distribution relating to such
Performance Shares triggered by Employee’s Termination of Employment and
intended to qualify under § 409A(a)(2)(A)(i) shall be made only at the time that
Employee has had a “separation from service” within the meaning of Treasury
Regulation § 1.409A-1(h) (or earlier at such time, after a Termination of
Employment, that there occurs another event triggering a distribution under the
Plan or this Agreement in compliance with § 409A);
(iii) Any distribution relating to such
Performance Shares subject to § 409A(a)(2)(A)(i) that would be made within six
months following a separation from service of a “Specified Employee” (or “key
employee”) as defined under § 409A(a)(2)(B)(i) shall instead occur at the
expiration of the six-month period under § 409A(a)(2)(B)(i). In the case of
installments, this delay shall not affect the timing of any installment
otherwise payable after the six-month delay period. During such six-month delay
period, settlement will not be accelerated upon occurrence of a Change in
Control, and otherwise accelerated settlement will only be permitted to the
extent permissible under § 409A; and
(iv) Any rights of Employee or retained
authority of the Company with respect to Performance Shares hereunder shall be
automatically modified and limited to the extent necessary so that Employee will
not be deemed to be in constructive receipt of income relating to the
Performance Shares prior to the distribution of shares to Employee and so that
Employee shall not be subject to any penalty under § 409A.
7. Employee
Representations and Warranties Upon Settlement. As a condition to the
settlement of the Performance Shares, the Company may require Employee to make
any representation or warranty to the Company as may be required under any
applicable law or regulation.
8. Miscellaneous.
(a) Binding Agreement; Written
Amendments. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties. This Agreement constitutes the
entire agreement between the parties with respect to the Performance Shares, and
supersedes any prior agreements or documents with respect to the Performance
Shares. No amendment or alteration of this Agreement which may impose any
additional obligation upon the Company shall be valid unless expressed in a
written instrument duly executed in the name of the Company, and no amendment,
alteration, suspension or termination of this Agreement which may materially
impair the rights of Employee with respect to the Performance Shares shall be
valid unless expressed in a written instrument executed by
Employee.
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Exhibit 10.21
(b) No Promise of Employment. The
Performance Shares and the granting thereof shall not constitute or be evidence
of any agreement or understanding, express or implied, that Employee has a right
to continue as an officer or employee of the Company for any period of time, or
at any particular rate of compensation.
(c) Governing Law. The validity,
construction, and effect of this Agreement shall be determined in accordance
with the laws (including those governing contracts) of the state of New Jersey,
without giving effect to principles of conflicts of laws, and applicable federal
law.
(d) Fractional Performance Shares and
Shares. The number of Performance Shares credited to Employee’s Account
shall include fractional Performance Shares calculated to at least three decimal
places, unless otherwise determined by the Committee. Unless settlement is
effected through a third-party broker or agent that can accommodate fractional
shares (without requiring issuance of a fractional Share by the Company), upon
settlement of the Performance Shares Employee shall be paid, in cash, an amount
equal to the value of any fractional Share that would have otherwise been
deliverable in settlement of such Performance Shares.
(e) Mandatory Tax Withholding.
Unless otherwise determined by the Committee, at the time of vesting and/or
settlement the Company will withhold from any shares of Stock deliverable in
settlement of the Performance Shares, in accordance with Section 11(d)(i)
of the Plan, the number of shares of Stock having a value nearest to, but not
exceeding, the amount of income and employment taxes required to be withheld
under applicable laws and regulations, and pay the amount of such withholding
taxes in cash to the appropriate taxing authorities. Employee will be
responsible for any withholding taxes not satisfied by means of such mandatory
withholding and for all taxes in excess of such withholding taxes that may be
due upon vesting or settlement of Performance Shares.
(f) Statements. An individual
statement of each Employee’s Account will be issued to Employee at such times as
may be determined by the Company. Such a statement shall reflect the number of
Performance Shares credited to Employee’s Account, transactions therein during
the period covered by the statement, and other information deemed relevant by
the Company. Such a statement may be combined with or include information
regarding other plans and compensatory arrangements. Employee’s statements shall
be deemed a part of this Agreement, and shall evidence the Company’s obligations
in respect of Performance Shares, including the number of Performance Shares
credited as a result of Dividend Equivalents (if any). Any statement containing
an error shall not, however, represent a binding obligation to the extent of
such error, notwithstanding the inclusion of such statement as part of this
Agreement.
(g) Unfunded Obligations. The
grant of the Performance Shares and any provision for distribution in settlement
of Employee’s Account hereunder shall be by means of bookkeeping entries on the
books of the Company and shall not create in Employee any right to, or claim
against any, specific assets of the Company, nor result in the creation of any
trust or escrow account for Employee. With respect to Employee’s entitlement to
any distribution hereunder, Employee shall be a general creditor of the
Company.
(h) Notices. Any notice to be
given the Company under this Agreement shall be addressed to the Company at its
principal executive offices, in care of the Vice President – Corporate Services,
or the officer designated by the Company as responsible for administration of
the Agreement, and any notice to Employee shall be addressed to Employee at
Employee’s address as then appearing in the records of the Company.
(i) Shareholder Rights. Employee
and any Beneficiary shall not have any rights with respect to shares of Stock
(including voting rights) covered by this Agreement prior to the settlement and
distribution of the shares of Stock as specified herein. Specifically,
Performance Shares represent a contractual right to receive shares of Stock in
the future, subject to the terms and conditions of this Agreement and the Plan,
and do not represent ownership of shares of Stock at any time before the
settlement of this Award.
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Exhibit A
NEW
JERSEY RESOURCES CORPORATION
2007 Stock Award and Incentive
Plan
Performance Goal and Earning of
Performance Shares
The number of Performance Shares earned
by Participant shall be determined as of September 30, 2010 (the “Earning
Date”), based on the Company’s “Total Shareholder Return Performance” in the
33-month period ending at that date as compared against an
established group of comparable companies (the “Comparison Group”) selected by
the Committee and attached hereto as Schedule A. The number of Performance
Shares earned will then be determined based on the following grid:
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Company
Total
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Shareholder
Return
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Performance
Shares Earned as
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Performance—
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Percentage
of
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Percentile
Achieved
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Target
Performance Shares
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Less
than 27th
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0
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%
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27th
(threshold)
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50
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%
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36th
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60
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%
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45th
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70
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%
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55th
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85
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%
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64th
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100
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%
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73rd
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120
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%
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82nd
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135
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%
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91st
and above
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150
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%
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Upon
achievement of Total Shareholder Return at a percentile between any two
specified percentiles, the Performance Shares earned will be mathematically
interpolated on a straight-line basis.
Determinations of the Committee
regarding Total Shareholder Return performance, such performance as a percentile
within the Comparison Group, the resulting Performance Shares earned and related
matters will be final and binding on Participant. The Committee shall specify a
reasonable methodology for dealing with companies in the Comparison Group that
cease to be publicly traded companies engaged in a business comparable to that
of the Company, subject to compliance with Treasury Regulation § 1.162-27(e)(2).
Total Shareholder Return shall be calculated in a manner that reflects the
economic return to shareholders, such that any equity restructuring of the
Company or any company in the Comparison Group shall not have the effect of
enlarging or reducing the rights of Employee except to the extent of its effects
on the real economic return of a shareholder.
Schedule A
INSERT PEER GROUP
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