SOUTH JERSEY INDUSTRIES, INC. 5,000,000 Equity Units (Initially Consisting of 5,000,000 Corporate Units) Underwriting Agreement
Exhibit 1.2
Execution Version
SOUTH JERSEY INDUSTRIES, INC.
5,000,000 Equity Units
5,000,000 Equity Units
(Initially Consisting of 5,000,000 Corporate Units)
April 18, 2018
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Guggenheim Securities, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
South Jersey Industries, Inc., a New Jersey corporation (the “Company”), proposes to (i) issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), an aggregate of 5,000,000 Corporate Units (as defined below) (the “Firm Securities”) and (ii) grant to the Underwriters, acting severally and not jointly, the option described in Section 2(b) hereof to purchase all or any part of 750,000 additional Corporate Units to cover over-allotments, if any (the “Optional Securities” and, collectively with the Firm Securities, the “Underwritten Securities”).
Each Corporate Unit will initially consist of (a) a 1/20th, or 5%, undivided beneficial ownership interest in $1,000 principal amount of the Company’s 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031 (the “Notes”) and (b) a stock purchase contract (a “Purchase Contract”) issued by the Company pursuant to which the holder of such Purchase Contract will purchase from the Company on April 15, 2021, subject to earlier termination or settlement, for an amount in cash equal to the stated amount per Equity Unit (as defined below) of $50 (the “Stated Amount”), a number of shares of common stock, par value $1.25 per share, of the Company (the “Stock”), as set forth in the Purchase Contract and Pledge Agreement. The Notes will be issued pursuant to a Junior Subordinated Indenture (the “Base Indenture”), as amended and supplemented by a Supplemental Indenture (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), each dated as of the Closing Date referred to in Section 2(d), between the Company and U.S. Bank National Association, as trustee (the “Trustee”).
In accordance with the terms of a Purchase Contract and Pledge Agreement (the “Purchase Contract and Pledge Agreement”), dated as of the Closing Date, to be entered into between the Company and U.S. Bank National Association, as purchase contract agent (the “Purchase Contract Agent”), attorney-in-fact for the holders of the Equity Units, collateral agent (the “Collateral Agent”), custodial agent and securities intermediary, a holder of the Corporate Units will initially pledge its ownership interest in the Notes to secure such holder’s obligation to purchase shares of Stock under the Purchase Contracts. The Purchase Contracts will be issued pursuant to the Purchase Contract and Pledge Agreement. The Purchase Contracts together with the related Notes are herein referred to as “Corporate Units,” certain terms of which are set forth in Schedule 2 hereto. A holder of Corporate Units, at its option, may elect to create “Treasury Units” by substituting pledged U.S. Treasury securities for any pledged ownership interests in the Notes. Unless otherwise indicated, the term “Equity Units” includes both Corporate Units and Treasury Units.
Pursuant to a Remarketing Agreement (the “Remarketing Agreement”), to be entered into by the Company, the Purchase Contract Agent, as the purchase contract agent and attorney-in-fact for the holders of the Equity Units, and the remarketing agent(s) named therein, in such form and dated as of such date as to be determined by the parties thereto in accordance with the Purchase Contract and Pledge Agreement, the Notes will be remarketed, subject to certain terms and conditions. The Purchase Contract and Pledge Agreement, the Indenture and the Remarketing Agreement are each herein referred to as a “Units Agreement” and are herein collectively referred to as the “Units Agreements.”
Concurrently with this offering, the Company will also be entering into an Underwriting Agreement, dated the date hereof, between the Company and the several underwriters party thereto (the “Stock Underwriting Agreement”) for the sale of 11,016,949 shares of Stock (of which 6,779,661 shares relate to a forward sale agreement, dated the date hereof, between the Company and Bank of America, N.A.) or 12,669,491 shares if the underwriters of that offering exercise in full their option to purchase additional shares of Stock.
The proceeds of this offering, any proceeds that the Company shall receive upon settlement of the Forward Sale Agreement, together with cash on hand, and proceeds from the concurrent offering of Stock (as referred to above) (the “Proceeds”) will be used to fund a portion of the cash consideration payable in connection with the Company’s acquisition (the “Acquisition”) of the assets of Elizabethtown Gas (“Elizabethtown”) and Elkton Gas from Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas, (the “Acquired Business”) pursuant to the Asset Purchase Agreement, dated October 15, 2017, between the Company and Pivotal Utility Holdings, Inc. (the “Asset Purchase Agreement”), as described further in the Registration Statement, the Pricing Disclosure Package and the Prospectus (each as defined herein) under the heading “Use of Proceeds.” The Proceeds will also be used for capital expenditures primarily for regulated businesses, including infrastructure investments at the Company’s utility business. However, the consummation of this offering is not conditioned on the closing of the Acquisition or the concurrent offering of Stock. If the Acquisition is not consummated, the Company retains the broad discretion to use all of the proceeds from this offering for general corporate purposes.
1. Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement (File No. 333-211259), as amended, including a prospectus, relating to the Underwritten Securities. Such registration statement, as amended at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus used in connection with the offering of the Underwritten Securities and included in such registration statement (and any amendments thereto) before effectiveness, any prospectus used in connection with the offering of the Underwritten Securities and filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus used in connection with the offering of the Underwritten Securities and included in the Registration Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Underwritten Securities. Any reference in this underwriting agreement (this “Agreement”) to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be, and any reference to “amend”, “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference therein. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
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“Applicable Time” means 11:10 P.M., New York City time, on April 18, 2018.
2. Purchase of the Underwritten Securities.
(a) The Company agrees to issue and sell the Firm Securities to the several Underwriters as provided in this underwriting agreement (this “Agreement”), and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective number of Firm Securities set forth opposite such Underwriter’s name in Schedule 1 hereto at a price per Firm Security (the “Purchase Price”) of $48.50.
(b) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Underwriters shall have the option to purchase, severally and not jointly, the Optional Securities at the Purchase Price referred to in Section 2(a). The option hereby granted may be exercised only for the purpose of covering over-allotments that may be made in connection with the offering and distribution of the Firm Securities. The Underwriters may exercise such option by written notice from the Underwriters given to the Company from time to time setting forth the aggregate number of Optional Securities as to which the option is being exercised and the date and time when the Optional Securities are to be delivered and paid for, which may be the Closing Date but shall not be earlier than the Closing Date nor later than the thirteenth calendar day from, and including, the Closing Date. The Underwriters shall not be under any obligation to purchase any of the Optional Securities prior to the exercise of such option. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Underwriters to the Company.
On each Additional Closing Date (as defined below), if any, each Underwriter agrees, severally and not jointly, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, to purchase from the Company at the Purchase Price the number of Optional Securities that bears the same ratio to the aggregate number of Optional Securities being purchased on such Additional Closing Date as the number of Firm Securities set forth opposite the name of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10 hereof) bears to the aggregate number of Firm Securities being purchased by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Optional Securities as the Representatives in their sole discretion shall make.
(c) The Company understands that the Underwriters intend to make a public offering of the Underwritten Securities as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Underwritten Securities on the terms set forth in the Pricing Disclosure Package. The Company acknowledges and agrees that the Underwriters may offer and sell Underwritten Securities to or through any affiliate of an Underwriter.
(d) (i) The Company will deliver the Firm Securities, with transfer taxes thereon duly paid, to the Underwriters in book entry form through the facilities of The Depository Trust Company (“DTC”) for the account of the Underwriters against payment of the purchase price in Federal (same day) funds by wire transfer to an account of the Company in connection with the closing of the transaction at the office of Xxxxx Xxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on April 23, 2018 (unless such time and date are postponed in accordance with Section 10 hereof), or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing or, in the case of the Optional Securities, on the date (which date shall not be earlier than the Closing Date (as defined below)) and at the time and place specified in the written notice of the Underwriters’ election to purchase such Optional Securities. The time and date of such payment for the Firm Securities is referred to herein as the “Closing Date”, and the time and date for such payment for the Optional Securities, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.
(ii) The Company will deliver the Optional Securities being purchased, with transfer taxes thereon duly paid, to the Underwriters in book entry form through the facilities of the DTC on each Additional Closing Date for the account of the Underwriters against payment of the purchase price in Federal (same day) funds by wire transfer to an account of the Company at the above specified office, in connection with the closing of the transaction.
(iii) Delivery of the Underwritten Securities shall be made through the facilities of DTC unless the Representatives shall otherwise instruct.
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(e) The Company acknowledges and agrees that each of the Underwriters is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Underwritten Securities contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Company or any other person. Additionally, none of the Representatives or any other Underwriter are advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company.
3. A. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with the Securities Act and the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Trust Indenture Act”), and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(b) Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof. No statement of material fact included in the Prospectus has been omitted from the Pricing Disclosure Package and no statement of material fact included in the Pricing Disclosure Package that is required to be included in the Prospectus has been omitted therefrom.
(c) Issuer Free Writing Prospectus. Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Underwritten Securities (each such communication by the Company or its agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex A hereto, each electronic road show and any other written communications approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complies in all material respects with the Securities Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and does not conflict with the information contained in the Registration Statement or the Pricing Disclosure Package, and, when taken together with the Preliminary Prospectus filed prior to the first use of such Issuer Free Writing Prospectus, did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus or Preliminary Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in such Issuer Free Writing Prospectus or Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; the Company is not an “ineligible issuer” and is a well-known seasoned issuer, in each case as defined in Rule 405 under the Securities Act; and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company. No order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering of the Underwritten Securities has been initiated or, to the Company’s knowledge, threatened by the Commission; as of the applicable effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective amendment complied and will comply in all material respects with the Securities Act and the Trust Indenture Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
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(f) Financial Statements. The financial statements (including the related notes thereto) of the Company and its consolidated subsidiaries and of Elizabethtown, each of which are included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position of the Company and its consolidated subsidiaries or of Elizabethtown (as applicable) as of the dates indicated and the results of their respective operations and the changes in their respective cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods covered thereby, and any supporting schedules included or incorporated by reference in the Registration Statement present fairly in all material respects the information required to be stated therein; and the other financial information included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus has been derived from the accounting records of the Company and its consolidated subsidiaries or of Elizabethtown and presents fairly the information shown thereby.
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(j) Stock Options. With respect to the stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock Plans”), (i) each Stock Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies, (ii) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including the rules of the New York Stock Exchange (the “Exchange”) and any other exchange on which Company securities are traded, and (iv) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Stock Options prior to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding the Company or its subsidiaries or their results of operations or prospects.
(l) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(m) Description of the Underwriting Agreement. This Agreement conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
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4. Further Agreements of the Company. The Company covenants and agrees with each Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the Securities Act; and the Company will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Underwritten Securities; and the Company will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request. The Company will pay the registration fee for this offering within the time period required by Rule 456(b)(1) under the Securities Act (without giving effect to the proviso therein) and in any event prior to the Closing Date.
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(h) Clear Market. Except as contemplated by this Agreement, for a period of 90 days after the date hereof, the Company will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Guggenheim Securities, LLC and Xxxxx Fargo Securities, LLC, other than (A) the Underwritten Securities to be sold hereunder and any shares of Stock issued pursuant to the terms of the Purchase Contract and Pledge Agreement, including, without limitation, in connection with any early settlement right at the election of holders of Purchase Contracts (as described in the Pricing Disclosure Package) or any “fundamental change early settlement right” upon the occurrence of a “fundamental change” (each as described in the Pricing Disclosure Package), (B) any shares of Stock of the Company granted pursuant to Company Stock Plans, (C) any shares of Stock of the Company issued upon the exercise of options granted under Company Stock Plans or (D) the issuance and delivery of any shares of Stock pursuant to the Stock Underwriting Agreement and upon settlement or termination of the Forward Sale Agreement or any Additional Forward Sale Agreement (each as defined in the Stock Underwriting Agreement).
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5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act with respect to the Underwritten Securities other than (i) a free writing prospectus that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Annex A or prepared pursuant to Section 3(c) or Section 4(c) above (including any electronic road show), or (iii) any free writing prospectus prepared by such Underwriter and approved by the Company in advance in writing (each such free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not, without the prior written consent of the Company, use any free writing prospectus that contains the final terms of the Underwritten Securities unless such terms have previously been included in a free writing prospectus filed with the Commission.
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(n) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
7. Indemnification and Contribution.
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8. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above.
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9. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or prior to the Additional Closing Date, as the case may be, (i) trading generally shall have been suspended or materially limited on or by any of the Exchange or The Nasdaq Stock Market; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Underwritten Securities on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by the Units Agreements, this Agreement, the Pricing Disclosure Package and the Prospectus.
10. Defaulting Underwriter.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Underwritten Securities that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Underwritten Securities by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Underwritten Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Underwritten Securities on such terms. If other persons become obligated or agree to purchase the Underwritten Securities of a defaulting Underwriter, the non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement and the Prospectus necessary to effect any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases Underwritten Securities that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Underwritten Securities of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Underwritten Securities that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Underwritten Securities to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Underwritten Securities that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Underwritten Securities that such Underwriter agreed to purchase on such date) of the Underwritten Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Underwritten Securities of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Underwritten Securities that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate number of Underwritten Securities to be purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Underwritten Securities on the Additional Closing Date shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 10 shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses as set forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in effect.
11. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid upon demand all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Underwritten Securities and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including in each case all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Underwritten Securities under the securities or blue sky laws of such jurisdictions as the Representatives may reasonably designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related reasonably incurred fees and expenses of counsel for the Underwriters); (v) the cost of preparing certificates in connection with the issuance of the Underwritten Securities; (vi) the costs and charges of the Trustee, Purchase Contract Agent, Collateral Agent and any attorney-in-fact, custodial agent, securities intermediary, transfer agents, registrars, remarketing agents and other agents under the Units Agreements; (vii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering of the Underwritten Securities by, the Financial Industry Regulatory Authority, Inc.; (viii) any fees charged by investment rating agencies for the rating of the Underwritten Securities; (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors; and (x) all expenses and application fees related to the listing on the Exchange of the Underwritten Securities and the shares of Stock issuable upon settlement of the Purchase Contracts.
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14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
16. Miscellaneous.
(b) Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York.
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(d) Submission to Jurisdiction. The Company and each Underwriter hereby submits to the exclusive jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company and each Underwriter waives any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. The Company and each Underwriter agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Company or such Underwriter, as applicable, and may be enforced in any court to the jurisdiction of which the Company or such Underwriter, as applicable, is subject by a suit upon such judgment.
(g) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
[Remainder of Page Intentionally Blank]
19
If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
|
||
SOUTH JERSEY INDUSTRIES, INC.
|
||
By: |
/s/ Xxxxxxx X. Xxxxx
|
|
Name: Xxxxxxx X. Xxxxx
|
||
Title: Executive Vice President and Chief Financial Officer
|
Accepted: As of the date first written above
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
INCORPORATED
By: | /s/ Xxxxx Xxxxxx | |
Authorized Signatory
|
GUGGENHEIM SECURITIES, LLC
By: | /s/ Xxx Xxxxxxxx | |
Authorized Signatory
|
XXXXX FARGO SECURITIES, LLC
By: | /s/ Xxxxx Xxxxxx | |
Authorized Signatory
|
For themselves and on behalf of the
several Underwriters listed in Schedule 1 hereto.
several Underwriters listed in Schedule 1 hereto.
Schedule 1
Underwriter
|
Number of Firm Securities
|
|
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
|
2,000,000
|
|
Guggenheim Securities, LLC
|
750,000
|
|
Xxxxx Fargo Securities, LLC
|
375,000
|
|
TD Securities (USA) LLC
|
750,000
|
|
X.X. Xxxxxx Securities LLC
|
375,000
|
|
Xxxxxx Xxxxxxx & Co. LLC
|
375,000
|
|
PNC Capital Markets LLC
|
375,000
|
|
Total:
|
5,000,000
|
Schedule 2
Free Writing Prospectus Filed Pursuant to Rule 433
To Prospectus dated April 17, 2018
Preliminary Prospectus Supplements, each dated April 17, 2018
Registration Statement File No. 333‑211259
To Prospectus dated April 17, 2018
Preliminary Prospectus Supplements, each dated April 17, 2018
Registration Statement File No. 333‑211259
SOUTH JERSEY INDUSTRIES, INC.
Concurrent Offerings of:
11,016,949 Shares of Common Stock
(the “Common Stock Offering”)
(the “Common Stock Offering”)
and
5,000,000 Equity Units
(Initially Consisting of 5,000,000 Corporate Units)
(the “Equity Units Offering” and, together with the Common Stock Offering, the “Offerings”)
Pricing Term Sheet dated
April 18, 2018
April 18, 2018
The information in this pricing term sheet relates to the Offerings and should be read together with (i) the preliminary prospectus supplement dated April 17, 2018 relating to the Common Stock Offering (the “Common Stock Preliminary Prospectus Supplement”) and (ii) the preliminary prospectus supplement dated April 17, 2018 relating to the Equity Units Offering (the “Equity Units Preliminary Prospectus Supplement” and, together with the Common Stock Preliminary Prospectus Supplement, the “Preliminary Prospectus Supplements”), in each case, including the documents incorporated by reference therein and the related base prospectus dated April 17, 2018, filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (Registration Statement File No. 333-211259). Terms used but not defined herein, with respect to either Offering, have the meanings ascribed to them in the applicable Preliminary Prospectus Supplement.
Company
|
South Jersey Industries, Inc., a New Jersey corporation
|
Company Stock Ticker
|
New York Stock Exchange “SJI”
|
Pricing Date
|
April 18, 2018
|
Trade Date
|
April 19, 2018
|
Closing Price of the Common Stock on April 18, 2018
|
$30.11 per share
|
Settlement Date
|
April 23, 2018
|
Registration Format
|
SEC Registered
|
Common Stock Offering
Title of Securities
|
Common stock, par value $1.25 per share, of the Company (the “Common Stock”)
|
Number of Shares of Common Stock Offered by the Company
|
4,237,288 (or 5,889,830 if the underwriters of the Common Stock Offering exercise their option to purchase up to 1,652,542 additional shares of Common Stock in full)
|
Number of Shares of Common Stock Offered by the Forward Seller
|
6,779,661
|
Common Stock Public Offering Price
|
$29.50 per share of Common Stock
|
Underwriting Discounts and Commissions
|
$1.0325 per share of Common Stock
Approximately $11.4 million in aggregate (or approximately $13.1 million if the underwriters of the Common Stock Offering exercise their option to purchase up to 1,652,542 additional shares of Common Stock in full)
The underwriters of the Common Stock Offering propose to offer the shares of Common Stock to dealers at the Common Stock Public Offering Price less a concession not in excess of $0.6195 per share of Common Stock.
|
Estimated Net Proceeds to the Company from the Common Stock Offering
|
The Company estimates that it will receive net proceeds of approximately $119.9 million from the sale of Common Stock offered and sold by the Company in the Common Stock Offering after deducting the Underwriting Discounts and Commissions and estimated offering expenses. The Company estimates that it will receive net proceeds of approximately $167.0 million if the underwriters of the Common Stock Offering exercise their option to purchase additional shares of Common Stock in full. The Company will not initially receive any proceeds from the sale of Common Stock offered by the forward seller, unless an event occurs that requires the Company to sell the Common Stock to the underwriters of the Common Stock Offering. Assuming that the forward sale is physically settled, at an initial forward sale price of $28.4675 per share, the Company expects to receive net proceeds of approximately $193.0 million, subject to the price adjustment and other provisions of the forward sale agreement, in the event of full physical settlement of the forward sale agreement, which settlement must occur within approximately 12 months of the date of the Common Stock Preliminary Prospectus Supplement. The forward sale price that the Company expects to receive upon physical settlement of the forward sale agreement will be subject to adjustment on a daily basis based on a floating interest rate factor equal to the overnight bank funding rate less a spread and will be decreased on each of certain dates specified in the forward sale agreement during the term of the forward sale agreement. The forward sale price will also be subject to decrease if the cost to the forward seller of borrowing the number of shares of Common Stock underlying the forward sale agreement exceeds a specified amount. If the overnight bank funding rate is less than the spread on any day, the interest factor will result in a daily reduction of the forward sale price. As of the date of the Common Stock Preliminary Prospectus Supplement, the overnight bank funding rate was greater than the spread.
|
Joint Bookrunning Managers
|
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated Guggenheim Securities, LLC
Xxxxx Fargo Securities, LLC
|
Co-Managers
|
X.X. Xxxxxx Securities LLC
Xxxxxx Xxxxxxx & Co. LLC PNC Capital Markets LLC TD Securities (USA) LLC |
838518108
|
|
ISIN for the Common Stock
|
US8385181081
|
Equity Units Offering
Title of Securities
|
Equity Units that will each have a stated amount of $50.00 and will initially be in the form of a Corporate Unit consisting of a purchase contract issued by the Company and, initially, a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031 to be issued by the Company (each being referred to as an “RSN”)
|
Number of Equity Units Offered
|
5,000,000 (or 5,750,000 if the underwriters of the Equity Units Offering exercise their option to purchase up to 750,000 additional Corporate Units in full, solely to cover over-allotments)
|
Aggregate Offering Amount
|
$250,000,000 (or $287,500,000 if the underwriters of the Equity Units Offering exercise their over-allotment option in full)
|
Stated Amount per Equity Unit
|
$50.00
|
Corporate Unit Public Offering Price
|
$50.00 per Corporate Unit
|
Underwriting Discounts and Commissions
|
$1.50 per Corporate Unit
$7.5 million in aggregate (or approximately $8.6 million if the underwriters of the Equity Units Offering exercise their over-allotment option in full)
The underwriters of the Equity Units Offering propose to offer the Corporate Units to dealers at the Corporate Unit Public Offering Price less a concession not in excess of $0.90 per Corporate Unit.
|
Estimated Net Proceeds to the Company from the Equity Units Offering
|
The Company estimates that it will receive net proceeds of approximately $241.8 million from the sale of Corporate Units in the Equity Units Offering after deducting the Underwriting Discounts and Commissions and estimated offering expenses. The Company estimates that it will receive net proceeds of approximately $278.2 million if the underwriters of the Equity Units Offering exercise their over-allotment option in full.
|
Interest Rate on the RSNs
|
3.70% per year subject to the Company’s right to defer interest payments, as described in the Equity Units Preliminary Prospectus Supplement, and subject to modification in connection with a successful remarketing
|
Interest Payment Dates
|
Prior to a successful remarketing, January 15, April 15, July 15 and October 15 of each year, commencing on July 15, 2018
|
Deferred Interest on the RSNs
|
Deferred interest on the RSNs will bear interest at the interest rate applicable to the RSNs, compounded on each Interest Payment Date to, but excluding, the Interest Payment Date on which such deferred interest is paid
|
Contract Adjustment Payment Rate
|
3.55% per year on the Stated Amount per Equity Unit, or $1.775 per year, subject to the Company’s right to defer contract adjustment payments, as described in the Equity Units Preliminary Prospectus Supplement
|
Contract Adjustment Payment Dates
|
January 15, April 15, July 15 and October 15 of each year, commencing on July 15, 2018
|
Deferred Contract Adjustment Payments
|
Deferred contract adjustment payments will accrue additional contract adjustment payments at the rate equal to 7.25% per annum, compounded on each Contract Adjustment Payment Date to, but excluding, the Contract Adjustment Payment Date on which such deferred contract adjustment payments are paid
|
Total Distribution Rate on the Corporate Units
|
7.25% per annum
|
Reference Price
|
$29.50 (subject to adjustment, as described in the Equity Units Preliminary Prospectus Supplement)
|
Threshold Appreciation Price
|
$35.40 (subject to adjustment, as described in the Equity Units Preliminary Prospectus Supplement), which represents appreciation of 20% over the Reference Price
|
Minimum Settlement Rate
|
1.4124 shares of Common Stock (subject to adjustment, as described in the Equity Units Preliminary Prospectus Supplement), which is approximately equal to the $50.00 Stated Amount per Equity Unit, divided by the Threshold Appreciation Price
|
Maximum Settlement Rate
|
1.6949 shares of Common Stock (subject to adjustment, as described in the Equity Units Preliminary Prospectus Supplement), which is approximately equal to the $50.00 Stated Amount per Equity Unit, divided by the Reference Price
|
Purchase Contract Settlement Date
|
April 15, 2021 (or if such day is not a business day, the following business day)
|
RSN Maturity Date
|
April 15, 2031
|
Joint Bookrunning Managers
|
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Guggenheim Securities, LLC
Xxxxx Fargo Securities, LLC
|
Co-Managers
|
X.X. Xxxxxx Securities LLC
Xxxxxx Xxxxxxx & Co. LLC PNC Capital Markets LLC TD Securities (USA) LLC |
Listing
|
The Company intends to apply to list the Corporate Units on the New York Stock Exchange and expects trading to commence within 30 days of the date of initial issuance of the Corporate Units.
|
CUSIP for the Corporate Units
|
838518116
|
ISIN for the Corporate Units
|
US8385181164
|
CUSIP for the Treasury Units
|
838518124
|
ISIN for the Treasury Units
|
US8385181248
|
CUSIP for the RSNs
|
000000XX0
|
ISIN for the RSNs
|
US838518AA63
|
Allocation of the Purchase Price
|
At the time of issuance, the fair market value of the applicable ownership interest in the RSNs will be $50.00 (or 100% of the issue price of a Corporate Unit) and the fair market value of each purchase contract will be $0 (or 0% of the issue price of a Corporate Unit).
|
Early Settlement
|
Early Settlement Upon a Fundamental Change
|
Subject to certain conditions described under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” in the Equity Units Preliminary Prospectus Supplement, following a “fundamental change” (as defined in the Equity Units Preliminary Prospectus Supplement) that occurs prior to the 20th business day preceding the Purchase Contract Settlement Date, each holder of a purchase contract will have the right to accelerate and settle the purchase contract early on the fundamental change early settlement date (as defined in the Equity Units Preliminary Prospectus Supplement) at the settlement rate determined as if the applicable market value equaled the stock price (as defined in the Equity Units Preliminary Prospectus Supplement), plus an additional make-whole amount of shares (such additional make-whole amount of shares being hereafter referred to as the “make-whole shares”). This right is referred to as the “fundamental change early settlement right.”
|
The number of make-whole shares per purchase contract applicable to a fundamental change early settlement will be determined by reference to the table below, based on the date on which the fundamental change occurs or becomes effective (the “effective date”) and the “stock price” (as defined in the Equity Units Preliminary Prospectus Supplement) for the fundamental change:
|
Stock Price on Effective Date
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date
|
$
|
10.00
|
$
|
15.00
|
$
|
20.00
|
$
|
25.00
|
$
|
29.50
|
$
|
32.00
|
$
|
35.40
|
$
|
40.00
|
$
|
45.00
|
$
|
50.00
|
$
|
75.00
|
$
|
100.00
|
$
|
150.00
|
||||||||||||||||||||||||||
April 23, 2018
|
0.5412
|
0.3388
|
0.2161
|
0.0977
|
0.0000
|
0.0880
|
0.1913
|
0.1498
|
0.1241
|
0.1092
|
0.0742
|
0.0558
|
0.0370
|
|||||||||||||||||||||||||||||||||||||||
April 15, 2019
|
0.3556
|
0.2273
|
0.1485
|
0.0549
|
0.0000
|
0.0475
|
0.1492
|
0.1089
|
0.0870
|
0.0760
|
0.0511
|
0.0383
|
0.0254
|
|||||||||||||||||||||||||||||||||||||||
April 15, 2020
|
0.1747
|
0.1142
|
0.0800
|
0.0237
|
0.0000
|
0.0116
|
0.1038
|
0.0618
|
0.0456
|
0.0395
|
0.0263
|
0.0197
|
0.0131
|
|||||||||||||||||||||||||||||||||||||||
April 15, 2021
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0003
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
The stock prices set forth in the second row of the table above (i.e., the column headers) will be adjusted upon the occurrence of certain events requiring anti-dilution adjustments to the fixed settlement rates in a manner inversely proportional to the adjustments to the fixed settlement rates, as described in the Equity Units Preliminary Prospectus Supplement.
The exact stock price and effective date applicable to a fundamental change may not be set forth on the table, in which case:
|
|
· if the stock price is between two stock prices on the table or the effective date is between two effective dates on the table, the amount of make-whole shares will be determined by straight line interpolation between the make-whole share amounts set forth for the higher and lower stock prices and the two effective dates based on a 365-day year, as applicable;
· if the stock price is in excess of $150.00 per share (subject to adjustment in the same manner as the stock prices set forth in the second row of the table, as described above), then the make-whole share amount will be zero; and
· if the stock price is less than $10.00 per share (subject to adjustment in the same manner as the stock prices set forth in the second row of the table, as described above) (the “minimum stock price”), then the make-whole share amount will be determined as if the stock price equaled the minimum stock price, using straight line interpolation, as described above in the first bullet, if the effective date is between two effective dates on the table.
|
Unless the Treasury portfolio has replaced the RSNs as a component of the Corporate Units as a result of a successful optional remarketing, holders of Corporate Units may exercise the fundamental change early settlement right only in integral multiples of 20 Corporate Units. If the Treasury portfolio has replaced the RSNs as a component of Corporate Units, holders of the Corporate Units may exercise the fundamental change early settlement right only in integral multiples of 80,000 Corporate Units. A holder of Treasury Units may exercise the fundamental change early settlement right only in integral multiples of 20 Treasury Units.
|
The issuer has filed a registration statement (including a prospectus), as amended, with the U.S. Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates (File No. 333-211259). Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and the Offerings. You may get these documents for free by visiting XXXXX on the SEC Website at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer participating in the relevant Offering will arrange to send you the base prospectus and the relevant Preliminary Prospectus Supplement if you request them by calling Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated at 1-800-294-1322; Guggenheim Securities, LLC at 1-212-739-0700; or Xxxxx Fargo Securities, LLC at 1-800- 645-3751.
This communication should be read in conjunction with the relevant Preliminary Prospectus Supplement and the accompanying base prospectus. The information in this communication supersedes the information in the relevant Preliminary Prospectus Supplement and the accompanying base prospectus to the extent inconsistent with the information in such Preliminary Prospectus Supplement and the accompanying base prospectus. In all other respects, this communication is qualified in its entirety by reference to the relevant Preliminary Prospectus Supplement and the accompanying base prospectus.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
Annex A
a. Pricing Term Sheet containing certain final terms of the Equity Units, substantially in the form of Schedule 2 hereto
b. Road show
Exhibit A
FORM OF LOCK-UP AGREEMENT
, 2018
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Guggenheim Securities, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the several Underwriters
listed in Schedule I to the Underwriting Agreements
referred to below
listed in Schedule I to the Underwriting Agreements
referred to below
Re: South Jersey Industries, Inc. – Public Offerings
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Underwriters, propose to enter into two separate underwriting agreements (each, an “Underwriting Agreement”) with South Jersey Industries, Inc., a New Jersey corporation (the “Company”), pursuant to which one or more offerings (each, a “Public Offering”) will be made that are intended to result in an orderly market for the (i) common stock, $1.25 par value per share (the “Common Stock”) of the Company and/or (ii) corporate units of the Company (the “Corporate Units”). Capitalized terms used herein and not otherwise defined shall have the meanings as set forth in the Underwriting Agreements.
In consideration of the Underwriters’ agreement to purchase and make the Public Offerings of the Securities, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Guggenheim Securities, LLC and Xxxxx Fargo Securities, LLC on behalf of the Underwriters, the undersigned will not, during the period beginning on the date of this letter agreement (this “Letter Agreement”) and ending 90 days after the date of the final prospectuses relating to the Public Offerings (such period, the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of the Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock, Corporate Units or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock, in each case other than (A) transfers of shares of Common Stock as a bona fide gift or gifts; (B) dispositions to any trust for the direct or indirect benefit of the undersigned and/or a member of the immediate family of the undersigned; (C) the transfer or intestate succession to the legal representative or a member of the immediate family of the undersigned; or (D) transfers pursuant to domestic relations or court orders; provided that in the case of any transfer or distribution pursuant to clause (A), (B), (C) or (D), each transferee, donee or distributee shall execute and deliver to the Representative a lock-up letter in the form of this paragraph; and provided, further, that in the case of any transfer or distribution pursuant to clause (C), no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended, or other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Restricted Period referred to above); and provided, further, that any required filing or announcement (including a filing on Form 4) by the undersigned or the Company relating to a sale pursuant to clause (A), (B) or (D) shall briefly note the applicable circumstances that cause such clause to apply and explain that the filing or announcement relates solely to transfers falling within the category described in the relevant clause (including, in the case of a Form 4 filing, indicating the appropriate transaction code(s) required by General Instruction 8 to Form 4). For purposes of this paragraph, “immediate family” shall mean the undersigned and any relationship by blood, marriage or adoption, not remote than first cousin.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that the undersigned shall be released from all obligations under this Letter Agreement if and only if: (1) neither Underwriting Agreement becomes effective within 90 days of the date hereof or (2) if all Public Offerings terminate prior to payment for and delivery of the Common Stock or Corporate Units to be sold thereunder. The undersigned understands that the Underwriters are entering into the Underwriting Agreements and proceeding with the Public Offerings in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of laws principles thereof.
[Signature page as follows]
Very truly yours,
|
|||
[NAME OF STOCKHOLDER]
|
|||
By:
|
|||
Name:
|
|||
Title:
|
[Signature Page to Lock-Up Agreement]