sjiproxy2008.htm
South Jersey
Industries
1 South Jersey Plaza, Folsom, New Jersey
08037
Tel.
(609) 561-9000 l Fax (609)
561-8225 l TDD ONLY
1-800-547-9085
Notice of Annual Meeting of
Shareholders
April 18, 2008
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of South Jersey Industries, Inc. will be held at the Renault Winery
Restaurant, 72 N. Bremen Avenue, Egg Harbor City, New Jersey, on Friday, April
18, 2008, at 10:00 a.m., Eastern Time, for the following
purposes:
1. To elect two Class I Directors to serve
on the Board of Directors until the 2011annual meeting of
shareholders.
2. To ratify the appointment of Deloitte
& Touche LLP as the independent registered public accounting firm for
2008.
3. To vote on a shareholder proposal
requesting the annual election of each Director.
4. To transact such
other business that may properly come before the meeting.
The Board of Directors has fixed the
close of business on February 22, 2008 as the record date for determining the
shareholders of the Company entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. Accordingly, only shareholders of record on
that date are entitled to notice of and to vote at the
meeting.
You are cordially invited to attend the
meeting. Whether or not you expect to attend the meeting, we urge you to vote
your shares now. Please complete and sign the enclosed proxy card and promptly
return it in the envelope provided or, if you prefer, you may vote by telephone
or on the Internet. Please refer to the enclosed proxy card for instructions on
how to use these options. Should you attend the meeting, you may revoke your
proxy and vote in person.
By Order of the Board of
Directors,
Richard
H. Walker, Jr.
Vice President, General Counsel & Secretary
Folsom, NJ
March 18, 2008
YOUR VOTE IS
IMPORTANT
PLEASE VOTE, SIGN, DATE, AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE OR VOTE BY TELEPHONE OR ON THE
INTERNET.
SOUTH
JERSEY INDUSTRIES,
INC.
1 South Jersey Plaza, Folsom, New
Jersey 08037
PROXY
STATEMENT
This statement is furnished on behalf of
the Board of Directors of South Jersey Industries, Inc. to solicit proxies for
use at its 2008 Annual Meeting of Shareholders. The meeting is scheduled for
Friday, April 18, 2008, at 10:00 a.m. at the Renault Winery Restaurant,
72 N. Bremen
Avenue, Egg Harbor City, New Jersey. The approximate date proxy materials
will be sent to shareholders is March 18, 2008. On the mailing date, a copy of
the proxy and Annual Report will be available on our website at www.sjindustries.com under the heading
“Investors”.
Proxy
Solicitation
The Company bears the cost of this
solicitation, which is primarily made by mail. However, the Secretary
or employees of the Company may solicit proxies by phone, telegram, fax, e-mail
or in person, but such persons will not be separately compensated for such
services. The Company may also use a proxy-soliciting firm at a cost not
expected to exceed $6,000, plus expenses, to distribute to brokerage houses and
other custodians, nominees, and fiduciaries additional copies of the proxy
materials and Annual Report to Shareholders for beneficial owners of our
stock.
Record
Date
Only shareholders of record at the close
of business on February 22, 2008 may vote at the meeting. On that date, the
Company had 29,624,492 shares of Common Stock
outstanding. Shareholders are entitled to one vote per share on each
matter to be acted upon.
Quorum and
Vote Required
A quorum is necessary to conduct the
business of the meeting. This means holders of at least a majority of the
outstanding shares of Common Stock must be present at the meeting, either by
proxy or in person. Directors are elected by a plurality vote of all votes cast
at the meeting. All other matters that come before the meeting require the
affirmative vote of a majority of the votes cast at the meeting. Abstentions and
broker non-votes will be treated as present to determine a quorum but will not
be deemed to be cast and, therefore, will not affect the outcome of any of the
shareholder questions. A broker non-vote occurs when a nominee holding shares
for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial
owner.
Voting of
Proxies and Revocation
Properly signed proxies received by the
Company will be voted at the meeting. If a proxy contains a specific instruction
as to any matter to be acted on, the shares represented by the proxy will be
voted in accordance with those instructions. If you sign and return your proxy
but do not indicate how to vote for a particular matter, your shares will be
voted as the Board of Directors recommends. A shareholder who returns a proxy
may revoke it at any time before it is voted by submitting a later-dated proxy
or by voting by ballot at the meeting. If you attend the meeting and wish to
revoke your proxy, you must notify the meeting’s secretary in writing prior to
the voting of the proxy. If any other matters or motions properly come before
the meeting, including any matters dealing with the conduct of the meeting, it
is the intention of the persons named in the accompanying proxy card to vote
such proxy in accordance with their judgment. The Board of Directors is not
aware of any such matters other than those described in this proxy
statement.
PROPOSAL 1
DIRECTOR
ELECTIONS
At the Annual
Meeting, two Class I directors are to be elected to the Board of Directors to
hold office for a three-year term. The persons listed below have been nominated
by the Board, and unless otherwise instructed, proxy votes will be cast for such
persons as directors: Keith Campbell and W. Cary Edwards. The Board of Directors
currently consists of ten members. All of the nominees previously have been
elected by the Company’s shareholders and are currently serving as directors.
While we do not anticipate that, if elected, any of the nominees will be unable
to serve, if any should be unable to accept the nomination or election, the
persons designated as proxies on the proxy card will vote for the election of
such other person as the Board of Directors may recommend.
NOMINEES
Class
I
Term
Expires in 2011
Keith S. Campbell
has been a director since
2000. Age 53. Member of the Compensation/Pension Committee, Environmental
Committee and Nominating and Governance Committee. Chairman of the Board,
Mannington Mills, Inc., Salem, NJ, a leading manufacturer of hard and soft
surface flooring (1995 to date); Board Member, Federal Reserve Board of
Philadelphia; trustee, Rowan University, Rowan University Foundation, Glassboro,
NJ; director, Skytop Lodge, Inc.; director, South Jersey Energy Company;
Executive Committee Member, South Jersey Energy Solutions, LLC; Marina Energy,
LLC, South Jersey Energy Service Plus, LLC and South Jersey Resources Group,
LLC.
W. Cary
Edwards has been a director
since September 1993 and was also a director from April 1990 to January 1993.
Age 63. Lead Director (April 2005 to date), Member of the Executive Committee,
Audit Committee and Nominating & Governance Committees, Chairman of the
Compensation/Pension Committee; Chairman, New Jersey State Commission on
Investigation (1997 to date); Senior Attorney, Edwards & Caldwell, LLC (1993
to date); Of Counsel (1993) and New Jersey Managing Partner (1990 - 1993), law
firm of Mudge Rose Guthrie Alexander & Ferdon; Attorney General, State of
New Jersey (1986 - 1989); Chief Legal Counsel - Governor of New Jersey (1982 -
1986); life trustee, Monmouth University; Chairman and Director, South Jersey
Sanitation, Inc.; director, South Jersey Energy Company; Executive Committee
Member, South Jersey Energy Solutions, LLC; Marina Energy, LLC, South Jersey
Energy Service Plus, LLC and South Jersey Resources Group,
LLC.
The
Board of Directors recommends a vote “FOR” each of
the
above nominees.
DIRECTORS
CONTINUING IN OFFICE
Class
I I I
Term
Expires in 2010
Helen R. Bosley,
CFA has been a director
since 2004. Age 60. Member of the Audit Committee and Nominating &
Governance Committee; Chairman of the Management Development Committee.
President, Corporate Financial Management, Inc., a financial management and
insurance consulting firm, Yardley, PA (1990 to date); President, TBN Agency,
Inc., Yardley, PA (1995 to date); trustee and Vice Chair, Board of Trustees,
Abington Memorial Hospital, Abington, PA; member, CFA Society of Philadelphia,
Philadelphia, PA; Chair, Investment Committee, Girl Scouts of Eastern PA,
Miquon, PA; director, South Jersey Energy Company; Executive Committee Member,
South Jersey Energy Solutions, LLC, Marina Energy, LLC, South Jersey Energy
Service Plus, LLC and South Jersey Resources Group, LLC.
Edward J.
Graham has been a director
since 2004. Age 50. Chairman of the Executive Committee. Chairman of
the Board (April 2005 to date), President and Chief Executive Officer of the
Company and South Jersey Gas Company (February 2004 to date); President and
Chief Operating Officer (2003 - January 2004) and President (2003 to date),
South Jersey Gas Company; President (2000 - 2003), South Jersey Energy Company;
Vice President of the Company (2000 - 2001); Senior Vice President, Energy
Management, South Jersey Gas Company (1998 - 2000); director, New Jersey
Manufacturers Insurance Company, Trenton, NJ; director, New Jersey Business
& Industry Association, Trenton, NJ; director, American Gas Association,
Washington, DC; director, New Jersey Utilities Association, Trenton, NJ; Vice
Chairman and Treasurer, Rowan University Foundation, Glassboro, NJ; member,
South Jersey Health System Foundation Board, Vineland, NJ; Vice-Chairman, New
Jersey Commission on Higher Education; director, South Jersey Gas
Company.
Ambassador William J.
Hughes has been a director
since 2002. Age 75. Member of the Audit Committee, Environmental Committee and
Nominating & Governance Committee. Of Counsel, law firm of Riker, Danzig,
Scherer, Hyland & Perretti, LLP (2000 to date), Morristown and Trenton, NJ;
Visiting Distinguished Scholar of Public Policy, The Richard Stockton College of
New Jersey (1999 to date), Pomona, NJ; Visiting Professor, Rutgers, The State
University of New Jersey (1999 - 2003), New Brunswick, NJ; United States
Ambassador to the Republic of Panama (1995 - 1998); Member, United States House
of Representatives (1975 - 1995); director, South Jersey Gas
Company.
DIRECTORS CONTINUING IN OFFICE
(continued)
Class I I I
Term Expires in 2010
Herman D. James,
Ph.D. has been a director
since 1990. Age 64. Member of the Compensation/Pension Committee, the Executive
Committee, the Management Development Committee and the Audit Committee.
Distinguished Professor, Rowan University (1998 to date), President, Rowan
University (1984 - 1998), Glassboro, NJ; director, American Association of State
Colleges and Universities, (1994 - 1998), Washington, DC; director, New Jersey
State Chamber of Commerce (1992 - 1998), Trenton, NJ; director, South Jersey
Energy Company; Executive Committee Member, South Jersey Energy Solutions, LLC,
Marina Energy, LLC, South Jersey Energy Service Plus, LLC and South Jersey
Resources Group, LLC.
DIRECTORS CONTINUING IN
OFFICE
Class I I
Term Expires in 2009
Shirli M. Billings,
Ph.D. has been a director
since 1983. Age 67. Member of the Executive Committee, Compensation/Pension
Committee, and Management Development Committee; Chairman of the Nominating
& Governance Committee. President, Billings & Company, New Albany, OH, a
human resource consulting firm (2001 to date); President, Leadership Learning
Academy, Lakeland, FL, a human resource development agency (1999 - 2001);
Superintendent of Schools, Oberlin, OH (1994 - 1997); Vice President, Human
Resource Development, Honeywell, Inc., Minneapolis, MN (1985-1990); director,
South Jersey Gas Company.
DIRECTORS CONTINUING IN OFFICE
(continued)
Class I I
Term Expires in 2009
Thomas A. Bracken
has been a director since
2004. Age 60. Member of Audit Committee, Environmental Committee and
Compensation/Pension Committee. President, TriState Capital Bank-New Jersey, a
commercial bank specializing in meeting the needs of middle market companies,
their principals, the professional community and selective industries (January
7, 2008 to date); President and CEO of Sun Bancorp, Inc. and its wholly-owned
subsidiary Sun National Bancorp, Inc., Vineland, NJ (2001 to 2007); Executive
Director Public Sector Group, First Union Bank (2000 - 2001); Executive Vice
President, Head of Commercial and Governmental Banking for New Jersey, New York
and Connecticut, First Union Bank (1998 - 2000); Former Chairman, Economic
Development Corporation of Trenton, Trenton, NJ; Former Chairman, New Jersey
Chamber of Commerce; director, New Jersey Bankers Association; director and
Chairman, Finance Committee, Cancer Institute of New Jersey Foundation;
director, New Jersey Alliance for Action; director, New Jersey Network;
director, Economic Growth Council of New Jersey; director, South Jersey Energy
Company; Executive Committee Member, South Jersey Energy Solutions, LLC, Marina
Energy, LLC, South Jersey Energy Service Plus, LLC and South Jersey Resources
Group, LLC.
Sheila
Hartnett-Devlin, CFA has
been a director since 1999. Age 49. Member of the Executive
Committee, the Compensation/Pension Committee and the Management
Development Committee; Chairman of the Audit Committee. Managing Director,
Cohen, Klingenstein & Marks, Inc., an investment management company
(September 2005 to date); Executive Vice President (1997 - 2004), Senior Vice
President (1991 - 1997), Vice President (1985 - 1991), Chair, Global Investment
Committee (1996 - 2004), Member, Investment Policy Committee (1995 - 2004),
Fiduciary Trust Company International, New York, NY; member, New York Society of
Security Analysts; director, Mercy Investment Program, Inc.; director,
Mannington Mills, Inc.; director, South Jersey Gas Company.
Frederick R.
Raring has been a director
since 1995. Age 70. Member of the Executive Committee, Management Development
Committee, and Nominating & Governance Committee; Chairman of the
Environmental Committee. President, Seashore Supply Company, Ocean City, NJ, a
distributor of plumbing and heating supplies and materials (1990 to January 1,
2007); director, South Jersey Gas Company.
SECURITY
OWNERSHIP
Directors
and Management
The following table sets forth certain
information with respect to the beneficial ownership of our common stock, as of
February 19, 2008, of (a) each continuing director and nominee for director, (b)
our principal executive officer, principal financial officer, the three other
most highly compensated executive officers during 2007 (collectively, the “Named
Executives”) and (c) all of the directors and executive officers of the Company
as a group.
|
|
Number of
Shares
of Common Stock
(1)
|
|
Percent of
Class
|
|
Shirli M.
Billings
|
|
|
16,954
|
(2) |
|
*
|
|
Helen R.
Bosley
|
|
|
5,315
|
(2) |
|
*
|
|
Thomas A.
Bracken
|
|
|
8,104
|
(2) |
|
*
|
|
Keith S.
Campbell
|
|
|
6,921
|
(2) |
|
*
|
|
Jeffrey E.
DuBois
|
|
|
15,085
|
|
|
*
|
|
W. Cary
Edwards
|
|
|
11,440
|
(2) |
|
*
|
|
Edward J.
Graham
|
|
|
70,426
|
|
|
*
|
|
Sheila
Hartnett-Devlin
|
|
|
7,113
|
(2) |
|
*
|
|
William J.
Hughes
|
|
|
7,929
|
(2) |
|
*
|
|
David A.
Kindlick
|
|
|
45,904
|
|
|
* |
|
Herman D.
James
|
|
|
15,409
|
(2) |
|
* |
|
Frederick R.
Raring
|
|
|
62,136
|
(2) |
|
* |
|
Michael J.
Renna
|
|
|
15,358
|
|
|
* |
|
Richard H.
Walker
|
|
|
27,737
|
|
|
* |
|
|
|
|
|
|
|
|
|
All continuing directors, nominees
for director and executive officers as a group
(14 persons)
|
|
|
315,831
|
|
|
1.0% |
|
* Less than
1%.
|
|
|
|
|
|
|
|
Notes:
|
(1)
|
Based on information furnished by
the Company’s directors and executive officers. Unless otherwise
indicated, each person has sole voting and dispositive power with respect
to the Common Stock shown as owned by him or
her.
|
|
(2)
|
Includes shares awarded to each
director under a Restricted Stock Program for Directors. Restricted stock
owners have the power to vote shares but no investment power with respect
to the shares until the restrictions
lapse.
|
Stock
Ownership Requirements
The Board of Directors believes
significant ownership of Company Common Stock better aligns the interests of
management of the Company and its principal subsidiaries with that of the
Company’s shareholders. Therefore, in 2001 the Board of Directors enacted the
following stock ownership requirements for officers and
directors:
|
n
|
The Chief Executive Officer is required to own
shares of Company Common Stock with a market value equal to a minimum of
three times his or her annual base
salary; |
|
n
|
Other executive officers are
required to own shares of Company Common Stock with a market value equal
to a minimum of one and one-half times their annual base
salary;
|
|
n
|
Other
officers are required to own shares of Company Common Stock with a market
value equal to a minimum of their annual base salary;
|
|
n
|
Shares owned
outright will be combined with vested restricted shares awarded under the
Stock-Based Compensation Plan and vested shares beneficially through any
employee benefit plan for purposes of determining compliance with the
stock ownership requirement for officers. Current officers will have a
period of six years from the original date of adoption and newly elected
or promoted officers will have a period of six years following their
election or promotion to a new position to meet these minimum stock
ownership requirements; and |
|
n
|
Members of the Board of Directors
are required, within six years of becoming a director of the Company or
any of its principal subsidiaries, to own shares of Company Common Stock
with a market value equal to a minimum of five times the current value of
a Director’s annual cash retainer. Shares owned outright will be combined
with restricted shares awarded as part of the annual stock retainer for
the purpose of meeting these
requirements.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the
Securities Exchange Act of 1934, the Company’s directors and executive officers
are required to file reports with the Securities and Exchange Commission
relating to their ownership of and transactions in the Company’s Common Stock.
In 2007, William J. Hughes, a Director of the Company, inadvertently filed an
untimely report of beneficial ownership on Form 4. Based on our records and
other information, the Company believes that all other Section 16(a) filing
requirements were met for 2007.
Security
Ownership of Certain Beneficial Owners
The following table sets forth certain
information, as of February 22, 2008, as to each person known to the Company,
based on filings with the Securities and Exchange Commission, who beneficially
owns 5% or more of the Company’s Common Stock. Based on filings made with the
SEC, each shareholder named below has sole voting and investment power with
respect to such shares.
Name and Address of Beneficial
Owner
|
|
Shares Beneficially
Owned
|
|
Percent
of Class
|
Dimensional Fund Advisors
LP
|
|
1,915,897 (1)
|
|
6.5%
|
1299 Ocean Avenue, 11th
Floor
|
|
|
|
|
Santa Monica, CA 90401-1005
|
|
|
|
|
|
|
|
|
|
Barclays Global Investors
(Deutschland) AG
|
|
1,803,041 (2)
|
|
6.1%
|
Apianstrasse
6
|
|
|
|
|
D-85774
|
|
|
|
|
Unterfohring,
Germany
|
|
|
|
|
|
|
|
|
|
W. H. Reaves & Co.,
Inc.
|
|
1,502,678
|
|
5.2%
|
10 Exchange
Place
|
|
|
|
|
Jersey City, NJ 07302
|
|
|
|
|
(1) Dimensional Fund Advisors LP
(“Dimensional”), an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to four investment
companies registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts. These investment companies, trusts and accounts are the “Funds.” In
its role as investment advisor or manager, Dimensional possesses investment
and/or voting
power over the securities of the Company
described above that are owned by the Funds, and may be deemed to be the
beneficial owner of the shares of the Company held by the Funds. However, all
securities reported in this schedule are owned by the Funds. Dimensional
disclaims beneficial ownership of such
securities.
(2) Barclays Global Investors
(Deutschland) AG has filed with the Securities and Exchange Commission Schedule
13G indicating that shares identified above are held by the company in trust
accounts for Barclays Global Investors NA, Barclays Global Fund Advisors and
Barclays Global Investors, LTD. Barclays Global Investors NA holds 882,855
shares representing 2.99% of the class. Barclays Global Fund Advisors holds
889,968 shares representing 3.01% of the class. Barclays Global Investors, LTD
holds 30,218 shares representing 0.10% of the class. Each company in Schedule
13G disclaims being a member of a “group” as defined under Securities and
Exchange Commission Rules.
THE BOARD OF
DIRECTORS
Corporate
Governance
Independence of Directors
The Board has adopted Corporate
Governance Guidelines which require the Board to be composed of a majority of
directors who are “independent directors” as defined by the rules of the New
York Stock Exchange. No director will be considered “independent” unless the
Board of Directors affirmatively determines that the director has no material
relationship with the Company. When making “independence” determinations, the
Board considers all relevant facts and circumstances, as well as any other facts
and considerations specified by the New York Stock Exchange, by law or by any
rule or regulation of any other regulatory body or self-regulatory body
applicable to the Company. As a part of its Corporate Governance Guidelines, the
Board established a policy that Board members may not serve on more than four
other boards of publicly traded companies. SJI’s Corporate Governance Guidelines
are available on our website at www.sjindustries.com.
The Board has determined that incumbent
directors Billings, Bosley, Bracken, Campbell, Edwards, Hartnett-Devlin, Hughes,
James and Raring, constituting all of the non-employee directors, meet the New
York Stock Exchange standards and our own standards set forth above for
independence and are, therefore, considered to be independent directors.
Accordingly, during 2007, nine of the ten directors of the Company were
considered to be “independent.” Mr. Graham is not considered independent by
virtue of his employment with the Company.
Codes of Conduct
The Company has adopted codes of conduct
for all employees, officers and directors, which include the code of ethics for
our principal executive, our principal financial officer and principal
accounting officer within the meaning of the SEC regulations adopted pursuant to
the Sarbanes-Oxley Act of 2002. Additionally, the Company has established a
hotline and website for employees to anonymously report suspected
violations.
A copy of the codes of ethics are
available on the Company’s website at www.sjindustries.com under the heading “Investors”. Copies
of our codes of conduct are also available at no cost to any shareholder who
requests them in writing at South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, NJ 08037, Attention: Corporate
Secretary.
Communication with
Directors
The
independent directors met three times during 2007. Topics of these independent
sessions included CEO performance and compensation and discussions of corporate
governance. Meetings of the independent directors are chaired by Mr. Edwards,
the Lead Director. You may communicate with the Lead Director and chairmen of
the Audit, Compensation/Pension and Nominating & Governance Committees by
sending an e-mail to auditchair@sjindustries.com, compchair@sjindustries.com (for Lead Director) or nomgovchair@sjindustries.com, respectively, or you may communicate
with our outside independent directors as a group by sending an e-mail to
sjidirectors@sjindustries.com. The charters and scope of
responsibility for each of the Company’s committees can be found on the
Company’s website at www.sjindustries.com. You may also address any
correspondence to the chairmen of the committees or to the independent directors
at South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, New Jersey 08037.
Meetings of
the Board of Directors and its Committees
The Board of Directors met seven times
in 2007. Each director attended 75% or more of the total number of meetings of
the Board of Directors and the meetings of the committees of the Board on which
he or she served. All current Board members and all nominees for election to the
Company’s Board of Directors are required to attend the Company’s annual
meetings of stockholders, provided, however, attendance shall not be required if
personal circumstances affecting the Board member or director nominee make his
or her attendance impracticable or inappropriate. All of our directors with the
exception of W. Cary Edwards, attended the 2007 Annual Meeting of Shareholders.
During 2007, each of the directors of the Company also served on the Boards or
Executive Committees of one or more of South Jersey Gas Company, South Jersey
Energy Company, South Jersey Energy Solutions, LLC, Marina Energy, LLC, South
Jersey Resources Group, LLC, South Jersey Energy Service Plus, LLC, Energy &
Minerals, Inc. and R&T Group, Inc., all of which are subsidiaries of the
Company.
There are six standing committees of the
Board: the Audit Committee; the Compensation/Pension Committee; the
Environmental Committee; the Executive Committee; the Nominating &
Governance Committee; and the Management Development
Committee.
Audit Committee
The Audit Committee of the Board of
Directors, which met ten times during 2007, comprises six “independent”
directors as that term is defined in the rules and regulations of the Securities
and Exchange Commission and the listing standards of the New York Stock
Exchange: Sheila Hartnett-Devlin, Chairman; Helen R. Bosley; Thomas A. Bracken;
W. Cary Edwards; Dr. Herman D. James; and William J. Hughes. The Board has
determined that no member of the Audit Committee has a material relationship
that would jeopardize such member’s ability to exercise independent judgment. In
January 2007, the Board of Directors designated Ms. Hartnett-Devlin, Ms. Bosley
and Mr. Bracken as “audit committee financial experts” as such term is defined
by applicable rules and regulations of the Securities and Exchange
Commission. The Audit Committee: (1) annually engages an independent
registered public accounting firm for appointment, subject to Board and
shareholder approval, as auditors of the Company and has the authority to
unilaterally retain, compensate and terminate the Company’s independent
registered public accounting firm; (2) reviews with the independent registered
public accounting firm the scope and results of each annual audit; (3) reviews
with the independent registered public accounting firm, the Company’s internal
auditors and management, the quality and adequacy of the Company’s internal
controls and the internal audit function’s organization, responsibilities,
budget and staffing; and (4) considers the possible effect on the objectivity
and independence of the independent registered public accounting firm of any
non-audit services to be rendered to the Company. The Audit Committee has
established policies and procedures for the engagement of the independent
registered public accounting firm to
provide audit and permitted non-audit services. The Audit Committee evaluates
itself on an annual basis. The Board of Directors has adopted a written charter
for the Audit Committee which is available on our website at www.sjindustries.com under the heading “Investors” or you
may obtain a copy by writing to the Secretary, South Jersey Industries Board of
Directors, South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, New
Jersey 08037.
Compensation/Pension
Committee
The Compensation/Pension Committee of
the Board of Directors, which met five times during 2007, comprises six
“independent” directors: W. Cary Edwards, Chairman; Dr. Shirli M. Billings;
Thomas A. Bracken; Keith S. Campbell; Sheila Hartnett-Devlin; and Dr. Herman D.
James. The Compensation/Pension Committee: (1) is responsible for making grants
under and otherwise administering the Company’s Stock-Based Compensation Plan;
(2) reviews and makes recommendations to the Board of Directors on the
operation, performance and administration of the retirement plans, other
employee benefit plans and employment policies; and (3) reviews and makes
recommendations to the Board of Directors on forms of compensation, including
the performance and levels of compensation of the officers of the Company. The
Committee’s charter is available on our website at www.sjindustries.com under the heading
“Investor Relations” or you may obtain a copy by writing to the Secretary, South
Jersey Industries Board of Directors, South Jersey Industries, Inc., 1 South
Jersey Plaza, Folsom, New Jersey 08037.
Compensation Committee Interlocks and
Insider Participation
The Compensation Committee of the Board
of Directors, which met five times during 2007, comprises six directors: W. Cary
Edwards, Chairman; Dr. Shirli M. Billings; Thomas A. Bracken; Keith S. Campbell;
Sheila Hartnett-Devlin; and Dr. Herman D. James. No member of the Compensation
Committee has ever been an officer or employee of the Company, or any of its
subsidiaries or affiliates. During the last fiscal year, none of the Company’s
executive officers has served on a compensation committee or as a director for
any other company, one of whose executive officers served as a director of the
Company.
Nominating and Governance
Committee
The Nominating & Governance
Committee of the Board of Directors, which met four times during 2007, comprises
six directors: Dr. Shirli M. Billings, Chairman; Helen R. Bosley; Keith S.
Campbell; W. Cary Edwards; William J. Hughes; and Frederick R. Raring. Each
member of the Committee satisfies the independence requirements of the New York
Stock Exchange. Among its functions, the Nominating and Governance
Committee: (1) maintains a list of prospective candidates for director,
including those recommended by shareholders; (2) reviews the qualifications of
candidates for director (minimum qualifications for director candidates are
provided in the Company’s Corporate Guidelines available on the Company’s
website at www.sjindustries.com under the heading “Investors” and
include consideration of education, experience, judgment, diversity and other
applicable and relevant skills as determined by an assessment of the needs of
the Board at the time an opening exists); (3) makes recommendations to the Board
of Directors to fill vacancies and for nominees for election to be voted on by
the shareholders; and (4) is responsible for monitoring the implementation of
the Company’s Corporate Governance Policy. The Committee’s charter is available
on our website at www.sjindustries.com under the heading “Investors” or you
may obtain a copy by writing to the Secretary, South Jersey Industries Board of
Directors, South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, New
Jersey 08037. The Nominating & Governance Committee will consider
nominees for the Board of Directors recommended by shareholders and submitted,
in compliance with the Company’s bylaws, in writing to the Secretary of the
Company. Any shareholder wishing to propose a nominee should submit a recommendation in
writing to the Company’s Secretary at 1 South Jersey Plaza, Folsom, New Jersey 08037,
indicating the nominee’s qualifications and other relevant biographical
information and providing confirmation of the nominee’s consent to serve as a
director.
Environmental
Committee
The Environmental Committee of the Board
of Directors, which met two times during 2007, comprises four directors:
Frederick R. Raring, Chairman; Keith S. Campbell; Thomas A. Bracken; and William
J. Hughes. The Environmental Committee reviews and evaluates management
activities with respect to environmental remediation of the Company’s and its
subsidiaries’ current and former properties.
Executive Committee
The Executive Committee of the Board of
Directors, which met one time during 2007, comprises six directors: Edward J.
Graham, Chairman; Dr. Shirli M. Billings; W. Cary Edwards; Sheila
Hartnett-Devlin; Dr. Herman D. James; and Fredrick R. Raring. The Executive
Committee: (1) oversees the Company’s succession planning process; and (2) may
act on behalf of the Board of Directors during intervals between meetings of the
Board in managing the business and affairs of the Company.
Management Development
Committee
The Management Development Committee of
the Board of Directors, which met two times during 2007, comprises five
directors: Helen R. Bosley, Chairman; Dr. Shirli M. Billings; Sheila
Hartnett-Devlin; Dr. Herman D. James; and Frederick R. Raring. The Management
Development Committee: (1) reviews the Company’s programs and practices used to
develop employees identified for leadership positions in the organization; and
(2) evaluates training and educational programs to assure that they reflect
current and emerging workplace, industry and general business
issues.
Compensation
of Directors
In 2005 and 2006, studies of
non-employee director compensation were conducted by Mercer Human Resource
Consulting and the Hay Group consultants comparing the Company’s director
compensation with a relevant peer group of 12 energy utility
companies. The Board approved targeting non-employee director
compensation at the median of the peer group. Accordingly, effective
December 1, 2006, non-employee directors receive shares of restricted stock with
a market value of $35,000. The Company has established a plan whereby directors
may elect to defer the receipt of the restricted stock until a specified date or
until upon leaving the Board. The deferred amount, together with
dividends, may be paid in a lump sum distribution or in equal annual
installments as the director elects.
Non-employee directors are paid an
annual cash retainer of $30,000. The Lead Director is paid an
additional annual retainer of $10,000. Beginning in 2007, the chairmen of the
Company’s Board committees have been paid annual retainers as follows: Audit,
$8,000; Compensation/Pension, $5,000; Nominating and Governance,
$5,000. Chairmen of the Environmental and Management Development
committees are paid an annual retainer of $2,000. Directors receive
$1,500 for each meeting of the Board of the Company or its subsidiaries
attended; however, the maximum fee paid to any person for attendance at one or
more meetings of these boards held on the same day is
$1,500. Non-employee directors also receive $750 for each meeting of
a committee of the Board of the Company or of a subsidiary that they attended if
the meeting is held on the same day as a Board meeting or $1,500 if the meeting
is held on any other day. Audit Committee members are paid $1,500 per
meeting if the meeting is telephonic on a non-board meeting
day. Non-employee directors who participate telephonically in a Board or
committee meeting receive $750. Directors who are also employees of
the Company receive no separate compensation for serving on the
Board.
Director
Compensation for Fiscal 2007
Name
|
|
Fees Earned
Or Paid in Cash ($)
|
|
|
Stock
Awards
($)
(1) (2)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Change in
Pension Value
And
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
(3)
|
|
|
Total
(3)
|
|
Shirli M.
Billings
|
|
|
59,750 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
83,530 |
|
Helen R.
Bosley
|
|
|
64,250 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
88,030 |
|
Thomas A.
Bracken
|
|
|
63,000 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
86,780 |
|
Keith S.
Campbell
|
|
|
48,750 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
72,530 |
|
Sheila
Hartnett-Devlin
|
|
|
63,500 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
87,280 |
|
W. Cary Edwards
|
|
|
78,000 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
101,780 |
|
William J.
Hughes
|
|
|
59,000 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
82,780 |
|
Herman D.
James
|
|
|
63,000 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
86,780 |
|
Frederick R.
Raring
|
|
|
53,750 |
|
|
|
23,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
580 |
|
|
|
77,530 |
|
Footnotes
(1) Represents the
compensation expense incurred by the Company in the respective fiscal year in
conjunction with grants of restricted common stock calculated in accordance with
SFAS 123R.
(2) On January 3, 2008, each
director received shares of the Company’s Common Stock with a value of
$35,000. As of January 3, 2008, each director has three outstanding
restricted stock grants with a cumulative value at grant date of $89,000 and a
market value as of January 3, 2008 of $95,455. Restricted stock grants were made
to each director in December 2005 of 634 shares with a value at grant date of
$19,000; in December 2006 of 1,029 shares with a value at grant date of $35,000
and in January 2008 of 963 shares with a value at grant date of
$35,000.
(3) Represents group life
insurance payments.
Certain
Relationships
Mr. Campbell is Chairman of Mannington
Mills, Inc., which purchases natural gas from subsidiaries of the
Company. Commencing January 2004, as a result of winning a
competitive bid, another subsidiary of the Company owns and operates a
cogeneration facility that provides electricity to Mannington Mills,
Inc.
Until January 2007, Mr. Bracken was
President of Sun National Bancorp, Inc. Sun maintains two bank accounts for a
subsidiary of the Company.
Review and
Approval Policies and Procedures for Related Party
Transactions
Pursuant to a policy adopted by the
Company’s Nominating and Governance Committee, the Company’s executive officers
and directors, and principal stockholders, including their immediate family
members and affiliates, are not permitted to enter into a related party
transaction with the Company without the prior consent of the Nominating and
Governance Committee, or other independent committee of
the Company’s Board of Directors in the case it is inappropriate for the
Nominating and Governance Committee to review such transaction due to a conflict
of interest. Any request for the Company to enter into a transaction with an
executive officer, director, principal stockholder, or any of such persons’
immediate family members or affiliates, in which the amount involved exceeds
$120,000 must first be presented to the Nominating and Governance Committee for
review, consideration and approval. All of the Company’s directors, executive
officers and employees are required to report to the Nominating and Governance
Committee any such related party transaction. In approving or rejecting the
proposed agreement, the Nominating and Governance Committee shall consider the
relevant facts and circumstances available and deemed relevant to the Committee.
The Nominating and Governance Committee shall approve only those agreements
that, in light of known circumstances, are in, or are not inconsistent with, the
Company’s best interests, as the Nominating and Governance Committee determines
in the good faith exercise of its discretion.
COMPENSATION DISCUSSION &
ANALYSIS
Compensation
Committee Report
We have reviewed the following
Compensation Discussion and Analysis with management. Based on our
review and discussion with management, we have recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in the proxy
statement and the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007.
Compensation/Pension
Committee
W. Cary Edwards,
Chairman
Dr. Shirli M.
Billings
Thomas A. Bracken
Keith S. Campbell
Sheila
Hartnett-Devlin
Dr. Herman D. James
General
Description of Executive Compensation Program and Key
Objectives
SJI, as a provider of energy related
products and services, has designed its executive compensation program to
advance the Company’s strategic plan and corporate mission which are rooted in
enhancing shareholder value while attracting and retaining qualified executive
management to carry out the work and goals of the organization. In
order to achieve the objectives of the Company’s strategic plan and increase
shareholder value, the executive compensation program incorporates to a great
degree performance-based incentives and a mix of shorter-term and longer-term
incentives. SJI’s performance over the last five years provides
evidence that the executive compensation program has been effective in
furthering the Company’s business objectives. SJI has outperformed
the S&P 500 index in the last five years and compares favorably to the
returns of the S&P Utility index over the same period. SJI has
outperformed the Company’s Long-Term Incentive Compensation Peer Group in terms
of Total Shareholder Return in every year for the past five years. By
focusing executive compensation on achievement of annual corporate goals, annual
and longer-term earnings per share targets and three-year compound annual total
shareholder returns, SJI’s executive compensation program is an integral part of
SJI’s corporate strategy for improving shareholder
value.
Oversight of
the Executive Compensation Program
The SJI executive compensation program
is administered by the Compensation/Pension Committee of the Board of
Directors. The Compensation/Pension Committee is composed of six
independent directors. These directors meet the independence
standards of the New York Stock Exchange. In accordance with its
charter, the Committee sets the principles and strategies that serve to guide
the design of our employee compensation and benefit
programs.
The Committee annually evaluates the
performance of the Chairman/CEO and reviews the recommendations of the
Chairman/CEO regarding the evaluations of the Chief Financial Officer, and the
other Named Executive Officers as identified in the Summary Compensation Table
in the proxy. Taking the performance evaluations into consideration,
the Committee then establishes and approves their compensation levels, including
performance-based cash and stock awards. Goals for the executives’
annual cash compensation are established at the beginning of each year for use
in the performance evaluation process.
The Committee has retained independent
compensation consultants who report directly to the Committee. The
Committee has retained Mercer Human Resource Consulting and the Hay Group to
assist the Committee in its activities. The Hay Group is the
Committee’s independent compensation expert. The Committee meets
regularly in executive session without members of management present and reports
regularly to the Board of Directors on its actions and recommendations following
each meeting.
Executive
Compensation Principles
The Company’s key compensation objective
as stated above is to advance the Company’s strategic plan and corporate mission
which are rooted in enhancing shareholder value while attracting and retaining
highly qualified executive management to carry out the work and goals of the
organization. In order to achieve the objectives of the Company’s
strategic plan and increase shareholder value, the executive compensation
program is founded on the following guiding principles:
|
n
|
Executive compensation should be
directly and measurably linked to business and individual performance with
a significant portion of the compensation designed to create incentives
for superior performance and meaningful consequences for below target
performance.
|
|
n
|
The Executives’ total compensation
should be competitive with peer companies so that the Company can attract,
retain and motivate high performing business
leaders.
|
|
n
|
Executive compensation should
align the interests of executives with shareholders so that compensation
levels are commensurate with relative shareholder returns and financial
performance through the use of performance-based restricted
stock.
|
|
n
|
Executive compensation incentive
plans should balance short-term and long-term financial and strategic
objectives whereby executives are rewarded for the businesses for which
they are responsible and for overall Company
performance.
|
|
n
|
The process for designing,
determining and monitoring executive compensation should be independent of
management utilizing the assistance of independent compensation
consultants reporting directly to the
Committee.
|
Compensation
Practices
The Company’s current executive
compensation structure has been in place since 1998 and applies to all officers
of the Company. At that time, a comprehensive study of compensation alternatives
was undertaken, a primary objective being the creation of a system which aligns
the interest of Company shareholders with the financial incentives of
executives on a short-term and long-term basis. The
study drew upon the experience and knowledge of committee members in
consultation with their independent compensation consultant. Subsequently, on an
every three-year cycle basis, a compensation structure and market
competitiveness study has been completed to ensure that the structure remained
consistent with contemporary compensation methods and tools. The next
compensation study will be performed during 2008.
The committee’s consulting firm presents
a detailed update which reexamines the component parts of the executive
compensation program as currently applied. Further, the report provides a
competitive analysis of how executives’ base salary, annual cash and long-term
compensation compare with peer companies in the energy industry and the general
business community. The committee then evaluates and assesses those findings in
the context of the Company’s performance over the years and the growth predicted
going forward.
In 2005, the committee engaged its
consultant to provide a market-based update to its executive compensation
schedule, in anticipation of future compensation adjustments. The update was
completed and presented to the Committee in January 2006. Total annual direct
compensation forecasted for 2008 for the executive group, exclusive of the CEO,
reported at 82% of the competitive market median. Using the same data sources,
the total annual direct compensation forecasted for 2008 for Mr. Graham, the
Chief Executive Officer, reported at approximately 90% of the competitive market
median.
Based on the input from the independent
executive consultants and experience and knowledge of the committee members, a
compensation structure was designed with three components: (1) base salary, (2)
annual performance-based cash awards and (3) long-term performance-based equity
awards. The annual performance-based cash awards and long-term
performance-based equity awards are “at-risk” compensation as both components
have a threshold performance level that must be achieved before any
payout. Consistent with the principle that compensation should be
directly linked to the Company’s performance, a significant portion of the
executive’s compensation is at risk. The CEO’s at risk portion of
target compensation for 2008 represents 56% of his total direct
compensation. Additionally, the compensation structure provides for a
significant portion of compensation to be paid in equity awards to continually
align executives’ interests with shareholders. The CEO’s equity compensation
component of target compensation for 2008, which consist of performance-based
restricted stock grants, represents 33% of this total direct
compensation.
The determination of peer groups for
executive compensation is a critical task of the Committee. The
Committee, with consultation from independent compensation consultants, selects
peers for the three components of executive compensation. A national
peer group of 12 similarly sized energy utility companies is used for market
comparison for base, total cash compensation and total direct compensation for
the CEO. The peer group includes AGL Resources, Atmos Energy
Corporation, Black Hills Corporation, Cascade Natural Gas Corporation, CH
Energy, Inc., Energen Corporation, LaClede Group, New Jersey Resources,
Northwest Natural Gas Company, Piedmont Natural Gas Corporation, Southwest Gas
Corporation, and WGL Holdings, Inc. As a part of the 2008 compensation review,
the Hay Group will provide an assessment of the applicable peer groups for the
committee. For the CFO and other Named Executive Officers, two or more industry
specific executive compensation studies are used by the Committee’s independent
compensation consultants to provide market-based compensation
information. A national peer group of 45 energy companies is used for
the long-term incentive program that measures total shareholder return for the
purposes of awards.
Compensation
Components
The Company’s executive compensation
structure consists of three parts, two of which are directly linked to achieving
predefined short-term and long-term performance goals. These three components
were fully implemented with respect to compensation and performance for fiscal
year 2000 and each year thereafter. The Committee has adopted a policy to use
only performance-based restricted stock as the long-term incentive component. No
stock options are outstanding. The components are as
follows:
|
n
|
Base
Salary - which is
targeted at the 50th percentile or median of the relevant peer
market. For 2007, the CEO’s base salary was targeted at 45% of
the targeted total direct compensation. For 2007, the Named Executive
Officers' base salary is targeted at an average of 55% of targeted total
direct compensation. For 2008, CEO base salary was targeted at 45% of the
targeted total direct compensation; for 2008, the Named Executive
Officers’ base salary is targeted at an average of 50% of the targeted
total direct compensation. The Committee utilizes market survey
data from executive compensation consultants in establishing base salary
amounts.
|
|
n
|
Annual
Cash Awards - For the
CEO, in 2007, 100% of the annual cash award was tied directly to the
Company’s economic earnings per share from continuing
operations. For 2008, the CEO’s annual cash award will be tied
to the Company’s economic earnings per share and 25% will be based upon
specific measurable and predefined performance objectives. For 2007, the
CFO and the other Named Executive Officers, 50% of the annual cash award
was directly tied to the Company’s economic earnings per share from
continuing operations, with the balance based upon specific, predefined
performance objectives for each executive. Performance
objectives include individual and multiple business unit financial
performance, customer goals, internal process projects and leadership
goals. Similar metrics are in place for 2008 for the CEO and other Named
Executive Officers.
|
2008 Annual Cash
Awards
Metrics
|
|
|
|
CEO
|
75% SJI Economic Earnings Per
Share
|
25% Specific, measurable, and
predefined performance
objectives
|
|
CFO and Named
Executives
|
50% SJI Economic Earnings Per
Share
|
25% Financial Performance
of
relevant subsidiary
company
|
25% Specific, measurable, and
predefined performance
objectives
|
Each executive has a pre-established
annual cash target. Annually, the Committee develops a schedule to determine the
actual amount of the annual cash award for the economic earnings per share
metric. The schedule establishes a minimum, a target and a
maximum. The amount of annual cash awards related to this metric is
capped at this maximum level. The range of payout is plus or minus
25% of the targeted annual cash amount. Importantly, a minimum
earnings per share result is required for any payout of the annual cash
award. The minimum earnings per share level is the amount of the
Company’s prior year’s actual earnings per share result. For the
Company’s executives to achieve any annual cash payout, the Company must
outperform the prior year’s earnings.
During 2007, the Company publicly
reported earnings both on a GAAP basis and an economic earnings
basis. “Economic Earnings” are defined as income from continuing
operations less unrealized gains and plus unrealized losses, as applicable and
in each case after tax, on all commodity derivative transactions that we are
marking to market each quarter. Economic Earnings is a
significant performance metric used by our management to indicate the amount and
timing of income from continuing operations we expect to earn related to
commodity transactions. Specifically, we believe this financial measure
indicates to investors the profitability of all portions of these transactions
and not just the portion subject to mark-to-market valuation measurement.
Considering only one side of the transaction can produce a false sense as to the
profitability of our commodity marketing activities, as no change in value is
reflected for the non-derivative portion of the
transaction. Beginning in 2007, the Committee determined that
Economic Earnings were the appropriate measure for the annual cash awards. For
2007, the CEO’s annual cash award was set at 45% of the CEO’s base salary. For
2007 the Named Executive Officers annual cash award was set at an average of 30%
of targeted total direct compensation. For 2008, the Named Executive Officers’
annual cash award is set at an average of 37% of the targeted total direct
compensation. For the CEO, the Committee established that the
targeted 2008 annual cash award would be 50% of the CEO’s base
salary. The Committee utilizes market survey data from executive
compensation consultants in establishing annual cash salary amounts.
|
·
|
Long-Term
Incentive - which
consists of performance-based restricted stock grants, which are earned
based upon the Company’s relative total shareholder return measured
against industry peer companies, over three-year cycles. All
executives have pre-established performance-based long-term incentive
targets. The Committee has developed a schedule to determine
the actual amount of the long-term incentive awards. The
schedule establishes a minimum, a target and maximum. The
amount of long-term incentive award is capped at this maximum
level. The range of payout is plus or minus 50% of the targeted
long-term incentive amount. The minimum level requires that the
Company’s common stock over a three-year period achieve a total
shareholder return that matches at the 35th percentile level of the peer
group companies. The target is set at the 50th
percentile. The maximum award level is set at the 80th
percentile. In the last five years, the Company has
significantly outperformed the peer group of companies. For the
three-year cycle ending December 31, 2007, the Company’s stock’s total
shareholder return in comparison with the peer group performed at the 73rd
percentile. For the CEO, the Committee established that the
targeted 2007 and 2008 long-term incentive would be 75% of the CEO’s base
salary. For the other Named Executive Officers, the Committee
has established that the 2007 and 2008 long-term incentive would be 50% of
their base salary.
|
Stock
Ownership Guidelines
The Company has stock ownership
guidelines for executives and directors to reinforce the alignment with
shareholders. The CEO is required to own shares of the Company’s
common stock with a market value equal to a minimum of three times his or her
annual base salary. The executive officers are required to own shares of Company
common stock with a market value equal to a minimum of 1½ times their annual
base salary.
Benefits and
Perquisites
The
Company provides a Retirement Plan, a 401-K Plan, medical, dental, life
insurance and disability coverage which are provided to all eligible employees
of the Company including officers. Officers of the Company who achieve the age
of 50 are eligible for the Supplemental Executive Retirement
Plan.
Executive
Pension Plans
The
executive officers of the Company are eligible for benefits under a
tax-qualified pension plan for salaried employees provided by the Company.
Compensation considered under the pension plan consists of base
salary only. Employees do not make contributions to the plan, and the employer
contributions (which are based on aggregate actuarial calculations without
individual allocation) are held and invested in a diversified portfolio of funds
of recognized standing until they are used to provide retirement benefits. Early
retirement with reduced annual benefits is permitted (but not before age
55). Executive officers who are 50 years of age or older are also
covered by an unfunded supplemental retirement plan, which is designed in
general to provide the officer with a minimum retirement benefit from the
salaried employee pension plan, and the supplemental plan, which aggregates 2%
of the average of the highest three of the final five years’ salary (as defined
in the plan) for each year of service plus 5%. Assuming continued employment and
retirement at age 60, Messrs. Graham, Kindlick, Walker, Renna and DuBois will
have, respectively, 36, 36, 31, 29 and 32 years of credited
service. No credit is provided under the supplemental plan for more
than 30 years of service.
The following details the other benefits
and perquisites provided to the Named Executive Officers.
Disability Plan - Temporary disability
shall be paid at a rate of 100% of the Officer’s Base Salary, and extends at
full pay for up to 120 days for Officers with less than five years of service,
and up to 365 days for Officers with service of five or more
years. Long-term disability (LTD), begins upon the expiration of the
temporary disability benefit as described above. LTD is paid at a
rate of 50% of the Officer’s Base Salary, reduced by Social Security Disability
payments, if any.
Group Life Insurance – at a principle
equivalent of two times the Officer’s Base Salary, rounded to the next highest
$5,000 increment. The insurance premium is paid by the Company; the
Officer is responsible for resultant federal, state or local income
taxes. 24-Hour Accident Protection Coverage is provided while in the
employ of the Company in an amount of $250,000. The insurance premium
is paid by the Company; the Officer is responsible for resultant federal, state
or local income taxes.
Supplemental Survivor’s Benefit – Upon
the death of the Officer while he/she is in the employ of the Company, his/her
surviving beneficiary shall receive a lump sum payment of $1,000 to be paid as
soon as practical following the Officer’s death. The surviving
beneficiary shall also receive a lump sum death benefit based upon years of
service with the Company in the amounts of six months base salary (10-15 service
years); nine months base salary (15-25 service years); twelve months base salary
(25+ service years). Such payment shall be offset by
proceeds from the Officer’s qualified
pension plan and SERP in the year of death.
Supplemental Saving Plan Contributions -
The Internal Revenue Code limits the contributions that may be made by or on
behalf of an individual under defined contribution plans such as the Company’s
401(k) Plan. The Company has adopted a policy of reimbursing its executive
officers with the amount of Company contributions that may not be made because
of this limitation. This includes the tax liability incurred by the additional
income. Amounts paid pursuant to this policy are included in the Summary
Compensation Table.
Company Automobile – The Company’s
Officers are provided a company automobile to be used for business and at the
Officer’s discretion, for commuting and other non-business
purposes. The Officer is responsible for any federal and/or state
income taxes which result from non-business usage.
Time Off – The Company’s Officers may
take such time off for vacation or personal needs as may be accommodated while
ensuring the duties and responsibilities of his/her position are accommodated to
the satisfaction of SJI’s CEO. It is anticipated that such time off
would not normally exceed 20 days per calendar year, exclusive of scheduled
corporate holidays. Time off shall not accrue, nor shall it be
carried from one year to the next, resultantly, there shall be no payment for
“unused time off” at the time of the Officer’s death, retirement or other such
termination.
Annual Physical Examination – The
Company provides the Officer with an annual physical examination at its
expense.
Retiree Health Care – Upon retirement,
the Officer receives the same medical, hospitalization, prescription, dental and
major medical benefits as are provided to all employees.
Deferred Compensation Program – The
Company provides a Restricted Stock Deferral Plan for those employees entitled
for the awards of the Performance-Based Restricted Stock. The Plan
permits those entitled employees to defer all or a portion of the Company stock
that they would otherwise receive under the Company’s Stock-Based Compensation
Plan.
Employment
Agreements; Change of Control Agreements
The
Company has employment agreements with each of its Named
Executives. Mr. Graham and the other Named Executives have agreements
for three-year periods ending December 31, 2008, which provide for a base salary
that will be reviewed periodically but will not be less than what was being paid
at the beginning of the period. If a change of control (as defined in
each agreement) occurs, the agreement is automatically extended for three years
from the date the change of control occurs. If there is a change of control
during the term of the agreement or during the extended term of the agreement
and the Officer’s employment is terminated for other than cause, or if he
resigns after there has been a significant adverse change in his employment
arrangement with the Company due to a change of control, he is entitled to a
severance payment equal to 300% of his average annual compensation during the
preceding five calendar years. If the Officer’s employment agreement is
terminated for other than cause without a change of control, he is entitled to a
severance payment equal to 150% of his current base salary. For a
summary of the payments that would be made upon the termination or resignation
of our Officers see “Employment Agreements; Change of Control Agreements and
Other Potential Post-Employment Payments” below.
The South
Jersey Industries, Inc. 1997 Stock-Based Compensation Plan as amended and
restated effective January 26, 2005 and approved by the shareholders and the
Restricted Stock Agreements to the Named Executive Officers provide the option
to the Company that all unvested shares may vest upon a change of
control.
Tax
Implications
Section
162(m) of the Internal Revenue Code of 1986 limits the deduction allowable for
compensation paid to certain of our executive officers up to $1 million.
Qualified performance-based compensation is excluded from this limitation if
certain requirements are met. Our policy is generally to preserve the federal
income tax deductibility of compensation paid, to the extent
feasible. Awards made under the 1997 Stock-Based Compensation Plan to
employees are intended to qualify as performance-based compensation and thereby
be excluded from the $1 million limitation. Notwithstanding our policy to
preserve the federal income tax deductibility of compensation payments, under
certain circumstances the Compensation Committee, in its discretion, may
authorize payment, such as salary, bonuses or otherwise, that may cause an
executive officer’s income to exceed the deductible limits. The
Compensation Committee does not anticipate that such compensation will result in
the loss of deductibility under Section 162(m).
Summary Compensation
Table
Name and
Principal
Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Bonus
($)
(d)
|
|
Stock
Awards
($) (2)
(e)
|
|
Option
Awards
($) (f)
|
|
Non-Equity
Incentive Plan
Compensation
($) (g)
|
|
Change in
Pension Value
And
Nonqualified
Compensation
Earnings
($) (h)
|
|
|
All Other
Compensation
($)
(3)
(i)
|
|
Totals
($)
(j)
|
|
Edward J. Graham
(1)
Chairman, President
and
Chief Executive
Officer
|
|
2007
2006
|
|
513,847
482,692
|
|
-
-
|
|
286,970
248,873
|
|
-
-
|
|
271,861
181,875
|
|
2,109,000
53,000
|
(1)
|
|
28,020
23,483
|
|
3,209,698
989,923 |
|
David A.
Kindlick
Vice President
and
Chief Financial
Officer
|
|
2007
2006
|
|
242,606
228,375
|
|
-
-
|
|
106,898
106,435
|
|
-
-
|
|
83,199
74,050
|
|
182,000
174,000
|
|
|
14,220
13,441
|
|
628,923
596,301
|
|
Richard H. Walker, Jr.
Vice President,
General
Counsel &
Secretary
|
|
2007
2006
|
|
189,702
176,413
|
|
|
|
72,043
60,420
|
|
-
-
|
|
63,080
51,110
|
|
235,000
187,000
|
|
|
13,391
12,879
|
|
573,216
487,822
|
|
Michael J. Renna
(4)
Vice President and
Chief
Operating Officer of
South Jersey Energy
Solutions
|
|
2007
2006
|
|
201,359
183,060
|
|
|
|
75,075
60,027
|
|
-
-
|
|
77,668
57,378
|
|
6,000
16,000
|
|
|
11,443
10,839
|
|
371,545
327,304
|
|
Jeffrey E. DuBois
(4)
Vice President and
Senior
Vice President
Operations
& Sales of South
Jersey
Gas Company
|
|
2007
2006
|
|
194,813
167,640
|
|
|
|
69,715
54,610
|
|
-
-
|
|
83,176
50,501
|
|
36,000
39,000
|
|
|
9,471
8,643
|
|
393,175
320,394
|
|
Footnotes to
Summary Compensation Table
(1) During 2007, Mr. Graham became
eligible for the SERP, and he was given credit for all of his past service (25
years) with South Jersey Industries.
(2) Represents the
compensation expense incurred by the Company in the respective fiscal year in
connection with the grants of restricted common stock or stock options, as
applicable, calculated in accordance with SFAS 123R. See Footnote 1
of the Company’s financial statements for additional information, including
valuation assumptions used in calculating the fair value of the award. This
amount includes the SFAS 123R compensation expense for the outstanding three
years of performance based restricted stock grants.
(3) Includes employer
contributions to the Company’s 401(k) Plan, reimbursement for 401(k)
contributions not permitted under Internal Revenue Code (see footnote (1)), the
value of a company provided automobile and the income value of group life
insurance. The 2007 values for these items are listed below:
|
|
Graham
|
|
|
Kindlick
|
|
|
Walker
|
|
|
Renna
|
|
|
DuBois
|
|
401(k) Plan
|
|
|
4,754 |
|
|
|
7,278 |
|
|
|
5,471 |
|
|
|
5,814 |
|
|
|
5,844 |
|
401(k) |
|
|
15,203 |
|
|
|
927 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Reimbursement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Life
|
|
|
2,057 |
|
|
|
1,199 |
|
|
|
1,699 |
|
|
|
416 |
|
|
|
602 |
|
Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile
|
|
|
6,006 |
|
|
|
4,816 |
|
|
|
6,221 |
|
|
|
5,213 |
|
|
|
3,025 |
|
Total Value
|
|
|
28,020 |
|
|
|
14,220 |
|
|
|
13,391 |
|
|
|
11,443 |
|
|
|
9,471 |
|
4) Mr. Renna and Mr. DuBois are not
currently eligible for the SERP. The SERP covers officers of South
Jersey Industries who have attained age 50. Mr. Renna does not attain age 50
until 2017.
Mr. DuBois does not attain age 50 until
2009.
Grants of
Plan-Based Awards
The following table sets forth certain
information concerning the grant of awards made to our named executive officers
during the year ended December 31, 2007.
Grants of Plan-Based Awards –
2007
|
|
|
|
Estimated Possible Payouts
Under
Non-Equity Incentive Plan
Awards
(1)
|
|
Estimated Possible Payouts
Under
Equity Incentive Plan
Awards
(2)
|
|
All Other
Stock Awards:
Number of Shares of Stock or
Units
(#)
|
Exercise
Or Base Price of Option
Awards
($/Sh)
|
|
Grant Date Fair Value of Stock and
Option Awards
($) (3)
|
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
($)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
|
|
Edward J.
Graham
|
|
1/01/07
1/28/07
|
|
|
0
|
|
|
231,750 |
|
|
289,687 |
|
|
0 |
|
|
11,561 |
|
|
17,341 |
|
|
|
|
|
337,697 |
|
David A.
Kindlick
|
|
1/01/07
1/28/07
|
|
|
0 |
|
|
73,640 |
|
|
92,050 |
|
|
0 |
|
|
3,639 |
|
|
5,458 |
|
|
|
|
|
106,295 |
|
Richard H.
Walker
|
|
1/01/07
1/28/07
|
|
|
0 |
|
|
55,702 |
|
|
69,627 |
|
|
0 |
|
|
2,847 |
|
|
4,270 |
|
|
|
|
|
83,161 |
|
Michael J.
Renna
|
|
1/01/07
1/28/07
|
|
|
0 |
|
|
65,708 |
|
|
82,135 |
|
|
0 |
|
|
3,024 |
|
|
4,536 |
|
|
|
|
|
88,331 |
|
Jeffrey E.
DuBois
|
|
1/01/07
1/28/07
|
|
|
0 |
|
|
75,617 |
|
|
94,521 |
|
|
0 |
|
|
2,932 |
|
|
4,398 |
|
|
|
|
|
85,644 |
|
(1) Amounts represent potential cash
bonus amounts payable pursuant to the respective named executive officers if all
of goals and targets were achieved for 2007 performance to be paid in 2008 for
each named executive officer.
(2) Represents the possible payouts of
the performance based restricted stock grant at the end of the three- year
vesting and performance measurement period.
(3)
Represents the full grant date fair value of the grant of restricted common
stock calculated in accordance with SFAS 123R. See Footnote 1 of the
financial statements for additional information, including valuation assumptions
used in calculating the fair value of the awards.
Equity
Awards
The following table sets forth certain
information concerning our outstanding restricted stock awards for our named
executive officers at December 31, 2007.
Outstanding Equity Awards At Fiscal
Year-End – 2007
Stock Award
Name
|
|
Year
|
|
Number of
Shares
or Units of
Stock
That Have Not
Vested
(#)
|
|
Market Value of
Shares or Units
of
Stock That
Have
Not Vested
($)
|
|
Equity Incentive
Plan
Awards: Number
of
Unearned Shares,
Units
or Other Rights
That
Have Not
Vested
(#) (1)
|
|
Equity Incentive Plan
Awards: Market or Payout
Value of
Unearned Shares,
Units
or Other Rights
That
Have Not
Vested
($) (2)
|
|
Edward J.
Graham
|
|
2006
2007
|
|
-
-
|
|
-
-
|
|
9,986
11,561
|
|
360,395
417,236
|
|
David A.
Kindlick
|
|
2006
2007
|
|
-
-
|
|
-
-
|
|
3,925
3,639
|
|
141,653
131,332
|
|
Richard H.
Walker
|
|
2006
2007
|
|
-
-
|
|
-
-
|
|
3,033
2,847
|
|
109,461
102,748
|
|
Michael J.
Renna
|
|
2006
2007
|
|
-
-
|
|
-
-
|
|
3,150
3,024
|
|
113,683
109,136
|
|
Jeffrey E.
DuBois
|
|
2006
2007
|
|
-
-
|
|
-
-
|
|
2,876
2,932
|
|
103,795
105,816
|
|
(1) Represents grants of performance
based restricted stock issued in January 2006 and January 2007 at target
performance.
(2) Market value of Company common stock
at December 31, 2007 was $36.09 and was used to calculate market
value.
Stock
Vesting -
2007
The following table sets forth certain
information concerning the vesting of restricted stock for the Company’s Named
Executive Officers during the year ending December 31, 2007. No
options are outstanding and none were exercised by the Named Executive Officers
during the year ending December 31, 2007.
Stock Vested - 2007
Stock Awards
Name
|
|
Number of
Shares
Acquired on
Vesting
(#)
|
|
|
Value Realized
on Vesting
($) (1)
|
|
Edward J.
Graham
|
|
|
14,658 |
|
|
|
529,007 |
|
David A.
Kindlick
|
|
|
6,287 |
|
|
|
226,898 |
|
Richard H.
Walker
|
|
|
2,893 |
|
|
|
104,408 |
|
Michael J.
Renna
|
|
|
2,933 |
|
|
|
105,852 |
|
Jeffrey E.
DuBois
|
|
|
2,589 |
|
|
|
93,437 |
|
1) The dollar value is calculated by
multiplying the number of shares of restricted stock that has vested by the
market value of the Company’s common stock on the vesting date of December 31,
2007, which was $36.09.
Pension Benefits
Table
Name
|
Plan Name
(1) (2)
|
Number of
Years
Credited Service
under
Plan at FAS
Measurement
Date
|
Present Value
of
Accumulated Benefit
(3)
|
Payments
During
Last Fiscal
Year
|
Edward J. Graham
(4)
|
Retirement Plan
for
Employees of
SJI
SJI
Supplemental
Executive Retirement
Plan
|
25
25
|
387,000
2,077,000
|
0
0
|
David A.
Kindlick
|
Retirement Plan
for
Employees of
SJI
SJI
Supplemental
Executive Retirement
Plan
|
27
27
|
502,000
919,000
|
0
0
|
Richard H. Walker,
Jr.
|
Retirement Plan
for
Employees of
SJI
SJI
Supplemental
Executive Retirement
Plan
|
28
28
|
520,000
852,000
|
0
0
|
Michael J. Renna
(5)
|
Retirement Plan
for
Employees of
SJI
|
9
|
66,000
|
0
|
Jeffrey E. DuBois
(5)
|
Retirement Plan
for
Employees of
SJI
|
20
|
220,000
|
0
|
Footnotes:
(1) The South Jersey Industries, Inc.
Supplemental Executive Retirement Plan (the “SERP”) provides benefits to
officers of South Jersey Industries who have attained age
50.
A participant is eligible for a normal
retirement benefit under the SERP after having attained age 60. The
normal retirement benefit is based on 2% of the participant’s “final average
compensation” multiplied by years of credited service (up to 30 years), plus an
additional 5% of final average compensation. “Final average
compensation” is the average of the participant’s base pay plus annual incentive
for the highest 36 consecutive calendar months out of the final 60 months
immediately preceding retirement.
A participant is eligible for an early
retirement benefit under the SERP after having attained age 55. A
participant’s early retirement benefit equals his or her normal retirement
benefit reduced by 2% per year. (Mr. Walker is currently eligible for
early retirement.)
The SERP’s normal form of payment
is a life annuity with six years guaranteed.
(2) The Retirement Plan for Employees of
South Jersey Industries, Inc. (the “plan”) provides benefits to non-bargaining
employees who were hired before July 1, 2003. A Participant is
eligible for a normal retirement benefit under the plan after having attained
age 65. The normal retirement benefit is based on the sum of (a) the
Participant’s accrued benefit as of September 30, 1989 increased 5% per year
thereafter, and (b) 1.00% of the participant’s “final average compensation” plus
0.35% of the participant’s final average compensation in excess of covered compensation,
multiplied by years of credited service after September 30, 1989 (up to 35 years
less credited service as of September 30, 1989). “Final average compensation” is
the average of the participant’s base pay for the 36 calendar months immediately
preceding retirement.
A participant is eligible for an early
retirement benefit under the plan after having attained age 55 and completed
five years of service. A participant’s early retirement benefit
equals his or her normal retirement benefit reduced by 2% per year prior to age
60.
The plan’s normal form of payment is a
life annuity with six years guaranteed.
(3) Present values for participants are
based on a 6.36% discount rate and RP-2000 mortality projected to 2010
(postretirement only), and no preretirement decrements.
(4) During 2007 Mr. Graham became
eligible for the SERP, and he was given credit for all of his past service (25
years) with South Jersey Industries.
(5) Mr. Renna and Mr. DuBois are not
currently eligible for the SERP. The SERP covers officers of South
Jersey Industries who have attained age 50. Mr. Renna does not attain age 50
until 2017.
Mr. DuBois does not attain age 50 until
2009.
Nonqualified Deferred Compensation
Table
The following table sets forth certain
information regarding the Company’s Restricted Stock Deferral Plan, which
represents the Company’s only non tax-qualified deferred compensation
program. The Restricted Stock Deferral Plan permits the deferral of
fully vested shares of restricted stock earned by the Company’s executive
officers pursuant to previously issued performance-based restricted stock
grants. The Company does not make contributions to the plan, and all
earnings referenced in the table represent dividends paid on outstanding shares
of common stock.
Name
|
Plan Name
|
|
Executive
Contributions
in Last FY
(1)
|
|
|
Registrant
Contributions
in Last FY
|
|
|
Aggregate
Earnings in
Last FY (2)
|
|
|
Aggregate
Withdrawals
Distributions
|
|
|
Balance
at Last FYE
(1) (3)
|
|
Edward J.
Graham
|
Restricted
Stock
Deferral
Plan
|
|
|
- |
|
|
|
- |
|
|
|
46,611 |
|
|
|
- |
|
|
|
1,703,973 |
|
David A.
Kindlick
|
Restricted
Stock
Deferral
Plan
|
|
|
- |
|
|
|
- |
|
|
|
6,301 |
|
|
|
158,433 |
|
|
|
230,370 |
|
Richard H. Walker.
Jr.
|
Restricted
Stock
Deferral
Plan
|
|
|
132,871 |
|
|
|
- |
|
|
|
15,616 |
|
|
|
- |
|
|
|
570,884 |
|
Michael J.
Renna
|
Restricted
Stock
Deferral
Plan
|
|
|
119,875 |
|
|
|
- |
|
|
|
8,168 |
|
|
|
- |
|
|
|
298,611 |
|
Jeffrey E.
DuBois
|
Restricted
Stock
Deferral
Plan
|
|
|
110,988 |
|
|
|
- |
|
|
|
3,375 |
|
|
|
- |
|
|
|
123,410 |
|
Footnotes:
(1) The amounts represent the market
value of vested shares of previously restricted stock deferred by the named
executive officer calculated by multiplying the number of shares of deferred
stock by the market value of the Company’s common stock as of December 31, 2007,
which was $36.09.
(2) The amounts represent dividends paid
on the deferred common stock. These amounts are not reported in the
Summary Compensation Table as they represent dividends earned on the deferred
common stock, which dividends are
payable on all outstanding shares of the Company’s common
stock.
(3) The amounts represent the market
value of vested shares of previously restricted stock deferred by the Named
Executive Officer. The Company has in previous years disclosed the
issuance of the restricted shares as compensation in the Summary Compensation
Table for such year.
Securities
Authorized for Issuance Under Equity Compensation Plans
The following table provides information
as of December 31, 2007 relating to equity compensation plans of the Company
pursuant to which grants of restricted stock, options or other rights to acquire
shares may be made from time to time.
Equity Compensation Plan
Information
Plan
Category
|
|
(a)
Number of securities
to
be issued upon
exercise
of outstanding
options,
warrants and
rights
(#)
|
|
|
(b)
Weighted average
exercise
price of outstanding
options,
warrants and
right
($) (3)
|
|
|
(c)
Number of securities
remaining
Available for future
issuance
under equity
compensation
plans excluding
securities
Reflected in column
(a)
(#)
|
|
Equity compensation
plans
approved by security
holders(1)
|
|
|
581,627
|
|
|
|
-
|
|
|
|
1,418,373
|
|
Equity compensation
plans
not approved by security
holders(2)
|
|
|
7,104
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
1,418,373
|
|
(1) These plans include those utilized
to make awards of performance-based restricted stock to the Company’s Officers
and restricted stock to the Directors.
(2) This item includes prior year ad hoc
awards of restricted stock to the Company’s directors. In 2005, shareholders
approved inclusion of Directors into the 1997 Stock-Based Compensation Plan as
amended and restated effective January 26, 2005.
(3) Only restricted stock has been
issued. The restricted stock is issuable for no additional consideration, and
therefore the shares are not included in the calculation of weighted average
exercise price in column (b).
Employment
Agreements; Change of Control Agreements and
Other
Potential Post-Employment Payments
South Jersey Industries has entered into
certain agreements and maintains certain plans that will require the Company to
provide compensation to Named Executive Officers of the Company in the event of
a termination of employment or a change in control of the
Company. The amount of compensation payable to each Named Executive
Officer in each situation is listed in the table below.
Executive
Benefits
and Payments
Upon
Termination
|
|
Retirement
|
|
|
Termination
by the
Companies
for Cause
|
|
|
Termination
by the
Officer for
Good Reason
Following
a CIC
|
|
|
Termination
by the
Companies
For Other
Than Cause
Following a
CIC
|
|
|
Termination
by the
Companies
For Other
Than Cause
without a
CIC
|
|
Edward J.
Graham
Cash
Compensation
Equity
Compensation
Incremental Nonqualified
Pension
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
1,360,000 778,000
0
|
|
|
$
|
1,360,000 778,000
0
|
|
|
$
|
733,000
0
733,000
|
|
David A.
Kindlick
Cash
Compensation
Equity
Compensation
Incremental Nonqualified
Pension
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
1,141,000 273,000
0
|
|
|
$
|
1,141,000 273,000
0
|
|
|
$
|
365,000
0
543,000
|
|
Richard H. Walker,
Jr.
Cash
Compensation
Equity
Compensation
Incremental Nonqualified
Pension
|
|
$
|
0
107,000
0
|
|
|
$
|
0
0
0
|
|
|
$
|
541,000
212,000
0
|
|
|
$
|
541,000
212,000
0
|
|
|
$
|
285,000
0
558,000
|
|
Michael J.
Renna
Cash
Compensation
Equity
Compensation
Incremental Nonqualified
Pension
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
506,000
223,000
0
|
|
|
$
|
506,000
223,000
0
|
|
|
$
|
303,000
0
0
|
|
Jeffrey E.
DuBois
Cash
Compensation
Equity
Compensation
Incremental Nonqualified
Pension
|
|
$
|
0
0
0
|
|
|
$
|
0
0
0
|
|
|
$
|
567,000
210,000
0
|
|
|
$
|
567,000
210,000
0
|
|
|
$
|
294,000
0
0
|
|
Below is a description of the
assumptions that were used in determining the payments in the tables above upon
termination as of December 31, 2007:
Retirement
NEO retires from the Company upon
attaining both 55 years of age and ten years of continuous service with the
company.
Change in
Control
A change in control shall mean any of
the following: (1) consummation of any pay or proposal for the merger,
liquidation, dissolution or acquisition of SJI or all or substantially all of
its assets; (2) election to the Board of Directors of SJI a new majority
different from the current one, unless each such new director stands for
election as a management nominee and is elected by shareholders immediately
prior to the election of any such new majority; or (3) the acquisition by any
person(s) of 20% or more of the stock of SJI having general voting rights in the
election of directors.
Cash Compensation
Termination
following a Change in Control – The Company shall pay the Named
Executive Officers (“NEOs”) as severance pay an amount equal to 300% of a base
amount determined to be the average annual compensation paid to the NEOs during
2003-2007 as reported on their Forms W-2. The employment agreements
require that such severance pay shall be reduced to the largest amount as will
result in no payment being subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code. The only other parachute payment that
would trigger an excise tax upon a change in control is due to the acceleration
of unvested restricted stock awards. It is assumed that the one year
non-compete agreement which the NEOs are subject to would mitigate the parachute
payments such that no excise tax would be imposed.
Termination
for Other than Cause without a Change in Control - The Company shall pay the NEO as
severance pay an amount equal to 150% of the NEO’s base salary to be paid out in
18 equal monthly installments.
Equity
Compensation
Retirement – NEOs are entitled to shares under the
Restricted Stock Agreement that are reduced by an amount equal to 1/36th of the
number of shares to which the NEO would otherwise be entitled for each month
from the date of NEO’s retirement through the end of the three-year performance
period. The amount for Mr. Walker, who is the only NEO eligible for
retirement, represents the reduced value of outstanding target shares from the
2006 and 2007 restricted stock awards.
Change in
Control – The Company shall
provide that the restricted stock awards that are outstanding shall become
non-forfeitable. Amounts represent the value of outstanding target
shares from the 2006 and 2007 restricted stock awards.
Stock
Price – The dollar value of
equity compensation assumes a stock price of $36.09 based on the closing price
as of December 31, 2007.
Incremental
Nonqualified Pension
The present values of accumulated
pension benefits under the Retirement Plan for Employees of SJI and the SJI
Supplemental Executive Retirement Plan for the NEOs are disclosed in the Pension
Benefits Table section of this proxy disclosure. The payment amounts
disclosed in this section represent the amount of the increase under such
payments upon any triggering events.
Termination
by the Companies Other than for Cause without a Change in Control – For purposes of the Supplemental
Executive Retirement Plan (“SERP”), 18 months shall be included as service
credit and the severance amount shall be considered in the final average
earnings calculation. Mr. Graham, Mr. Kindlick and Mr. Walker are
currently eligible to receive a SERP benefit.
Final
Average Earnings (“FAE”) –
FAE means the average base salary plus annual cash earned for that calendar year
for the highest 36 consecutive calendar months of the final 60
months. The FAEs were based on the amounts disclosed in the Summary
Compensation Tables for 2007, 2006, and 2005 plus the severance
pay.
Present
Values – 6.36% discount
rate and RP-2000 mortality projected to 2010 (postretirement only), and no
preretirement decrements. Assumes normal form of payment is a life
annuity with six years guaranteed.
STOCK
PERFORMANCE
The graph below compares the cumulative
total return on the Company’s Common Stock for the 5- year period ended December
31, 2007 with the cumulative total return on the S&P 500 and the S&P
Utility Indexes. The graph assumes that $100 was invested on December 31, 2002
in the Company’s Common Stock, the S&P 500 Index and the S&P Utility
Index and that all dividends were reinvested. Standard & Poor’s Utility
Index is a commonly used indicator of utility common stock performance based on
selected gas, electric and telephone companies. For the 5-year period ending
December 31, 2007, investors received a 21% annualized total return compared
with the 13% and 22% returns from the S&P 500 Index and S&P Utility
Index, respectively. The annual growth rate for 2007 for the Company was 11%.
This compares with 5% for the S&P 500 and 19% for the S&P Utility
Index.
Indexed
Total Return Over 5 Years Assuming Dividends Reinvested
S&P 500
|
100
|
128.7
|
142.7
|
149.7
|
173.3
|
182.9
|
S&P
UTIL
|
100
|
126.3
|
156.9
|
183.3
|
221.8
|
264.8
|
SJI
|
100
|
128.0
|
172.1
|
196.5
|
232.5
|
258.2
|
AUDIT COMMITTEE
REPORT
The Audit Committee of the Board of
Directors is comprised of six directors, each of whom is independent as defined
under the listing standards of the New York Stock Exchange and satisfies the
additional independence criteria applicable to Audit Committee members. The
Board has determined that Sheila Hartnett-Devlin, Thomas A. Bracken and Helen R.
Bosley are “audit committee financial experts” as defined by the rules of the
Securities and Exchange Commission. The Audit Committee’s activities and scope
of its responsibilities are set forth in a written charter adopted by the Board,
and is posted on the Company’s website at www.sjindustries.com under the heading
“Investors”.
In accordance with its charter adopted
by the Board of Directors, the Audit Committee, among other things, assists the
Board in fulfilling its responsibility for oversight of the quality and
integrity of the accounting, auditing and financial reporting practices of the
Company. Management has the responsibility for the preparation of the Company’s
financial statements and for an assessment of the effectiveness of the Company’s
internal control over financial reporting, and the independent registered public
accounting firm has the responsibility for the examination of those financial
statements and management’s assessment of the effectiveness of the Company’s
internal control over financial reporting.
The Audit Committee reviewed the audited
financial statements of the Company for the fiscal year ended December 31, 2007,
and management’s assessment of the effectiveness of the Company’s internal
control over financial reporting with management and with Deloitte & Touche
LLP, the Company’s independent registered public accounting firm. The Audit
Committee discussed with the independent registered public accounting firm the
matters required to be discussed by Statement on Auditing Standards (SAS) No.
61, “Communication with Audit Committees,” as amended by SAS 89 and SAS 90, and
Rule 2-07, “Communication with Audit Committees, of Regulation S-X”, and by
standards of the Public Company Accounting Oversight Board (United States),
relating to the conduct of the audit. The Audit Committee also received written
disclosures from Deloitte & Touche LLP regarding its independence from the
Company as required by Independence Standards Board Standard No. 1,
“Independence Discussions with Audit Committees,” and has discussed with
Deloitte & Touche LLP the independence of that firm.
Based on the above-mentioned review and
discussions with management and the independent registered public accounting
firm, the Audit Committee recommended to the Board that the Company’s audited
financial statements and management assessment of the effectiveness of the
Company’s internal controls over financial reporting be included in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2007, for filing with
the Securities and Exchange Commission.
Audit
Committee
Sheila
Hartnett-Devlin, Chairman
Helen R. Bosley
W. Cary Edwards
Thomas A. Bracken
William J. Hughes
Dr. Herman D. James
Fees Paid to
the Independent Registered Public Accounting Firm
As part of its duties, the Audit
Committee also considered whether the provision of services other than the audit
services by the independent registered public accountants to the Company is
compatible with maintaining the accountants’ independence. In accordance with
its charter, the Audit Committee must pre-approve all services provided by
Deloitte & Touche LLP. The Audit Committee discussed these services with the
independent registered public accounting firm and Company management to
determine that they are permitted under the rules and regulations concerning
auditor independence promulgated by the U.S. Securities and Exchange Commission
to implement the Sarbanes-Oxley Act of 2002, as well as the American Institute
of Certified Public Accountants.
The fees for all services provided by
the independent registered public accounting firm to the Company during 2007 and
2006 are as follows:
|
|
2007
|
|
|
2006
|
|
Audit Fees
(a)
|
|
$ |
914,795 |
|
|
$ |
1,104,650 |
|
Audit-Related Fees
(b)
|
|
|
39,000 |
|
|
|
43,660 |
|
Tax Fees
(c)
|
|
|
24,660 |
|
|
|
45,880 |
|
All other
fees
|
|
|
- |
|
|
|
- |
|
Total
|
|
$ |
978,455 |
|
|
$ |
1,194,190 |
|
(a) Fees for audit services
billed or expected to be billed relating to fiscal 2007 and 2006 include audits
of the Company’s annual financial statements, reviews of the Company’s quarterly
financial statements, comfort letters, consents and other services related to
Securities and Exchange Commission matters. In addition, audit services billed
or expected to be billed relating to fiscal 2006 include attestation of
management’s assessment of internal control, as required by the Sarbanes-Oxley
Act of 2002, Section 404.
(b) Fees for audit-related services
provided during fiscal 2007 and 2006 consisted of employee benefit plan audits,
transfer agent & registrar audits, and accounting
consultations.
(c) Fees for tax services provided
during fiscal 2007 consisted of tax compliance. Fees for tax services provided
during fiscal 2006 consisted of tax compliance and tax software. Tax compliance
services are services rendered based upon facts already in existence or
transactions that have already occurred to document, compute, and obtain
government approval for amounts to be included in tax filings and Federal, state
and local income tax return assistance.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee and the Board of
Directors, subject to the approval of the shareholders, has reappointed Deloitte
& Touche LLP, as the independent registered public accounting firm of the
Company for 2008. Unless otherwise directed, proxies will be voted “FOR”
approval of this appointment. If the shareholders do not ratify this appointment
by the affirmative vote of a majority of the votes cast at the meeting, other
auditors will be considered by the Audit Committee.
Deloitte & Touche LLP served as the
independent registered public accounting firm of the Company during 2007. During
2007, the audit services performed for the Company consisted of the audits of
the financial statements of the Company and its subsidiaries and attestation of
management’s assessment of internal control, as required by the Sarbanes-Oxley
Act of 2002, Section 404 and the preparation of various reports based on those
audits, services related to filings with the Securities and Exchange Commission
and the New York Stock Exchange, and audits of employee benefit plans as
required by the Employee Retirement Income Security Act. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting and
will have the opportunity to make a statement, if he desires to do so, and to
respond to appropriate questions from shareholders.
The
Board of Directors recommends a vote “FOR” the ratification of the
appointment
of
the Independent Registered Public Accounting Firm.
PROPOSAL 3
SHAREHOLDER PROPOSAL REQUESTING THE
ANNUAL ELECTION OF EACH DIRECTOR
Individual shareholder, Gerald R.
Armstrong, has given notice that he intends to make the following proposal at
the Annual Meeting. Mr. Armstrong resides at 820 Sixteenth Street, No.
705, Denver, Colorado, 80202-3227, and as of December 10, 2007, owned
84.616 shares. The Board recommends that you vote AGAINST this
proposal. Unless you specify otherwise, the Board intends the accompanying proxy
to be voted against this proposal.
In accordance with rules of the
Securities and Exchange Commission, the text of Mr. Armstrong’s resolution and
supporting statement is printed verbatim from his
submission:
Resolution
That the shareholders of South Jersey
Industries, Inc. request its Board of Directors to take the steps necessary to
eliminate classification of terms of its Board of Directors to require that all
Directors stand for election annually. The Board declassification shall be
completed in a manner that does not affect the unexpired terms of the
previously-elected Directors.
Statement
The proponent believes that the election
of directors is the strongest way that shareholders influence the directors of
any corporation. Currently, our board of directors is divided into three classes
with each class serving three-year terms. Because of this structure,
shareholders may only vote for one-third of the directors each year. This is not
in the best interest of shareholders because it reduces
accountability.
U. S. Bancorp, Associated Banc-Corp,
Piper-Jaffray Companies, Fifth-Third Bancorp, Pan Pacific Retail Properties,
Quest Communications International, Xcel Energy, Greater Bay Bancorp, North
Valley Bancorp, Pacific Continental Corporation, Regions Financial Corporation,
CoBiz Financial Inc., Marshall & Illsley Corporation, and Wintrust
Financial, Inc. are among the corporations electing directors annually because
of the efforts of the proponent.
The performance of our management and
our Board of Directors is now being more strongly tested due to economic
conditions and the accountability for performance must be given to the
shareholders whose capital has been entrusted in the form of share
investments.
A study by researchers at Harvard
Business School and the University of Pennsylvania’s Wharton School titled
“Corporate Governance and Equity Prices” (Quarterly Journal of Economics,
February, 2003), looked at the relationship between corporate governance
practices (including classified boards) and firm performance. The study found a
significant positive link between governance practices favoring shareholders
(such as annual directors election) and firm value.
While management may argue that
directors need and deserve continuity, management should become aware that
continuity and tenure may be best assured when their performance as directors is
exemplary and is deemed beneficial to the best interests of the corporation and
its shareholders.
The proponent regards and unfounded the
concern expressed by some that annual election of all directors could leave
companies without experienced directors in the event that all incumbents are
voted out by shareholders. In the unlikely event that shareholders do vote to
replace all directors, such a decision would express dissatisfaction with the
incumbent directors and reflect a need for change.
If you agree that shareholders may
benefit from greater accountability afforded by annual election of all
directors, please vote “FOR” this proposal.
Directors’ Statement in
Opposition
The Board believes that this shareholder
proposal seeking to declassify the Board and to have annual elections of each
Director would not be in the best interests of the Company and its
shareholders. Your Board unanimously recommends that you vote AGAINST
this proposal for the reasons discussed below.
The Company’s Certificate of
Incorporation divides the Board of Directors into three classes with directors
elected to staggered three year terms. Under this system, approximately
one-third of the directors stand for election each year, and the entire Board
can be replaced in the course of three annual meetings, all held within
approximately two years. The Company’s practice of having a classified Board was
approved overwhelmingly by shareholders and instituted in 1983, as part of a
corporate governance system that would help the Company carry out its long-term
business strategies.
The Company has performed exceedingly
well over the past years with this governance structure in
place. Since the classified board system was introduced in 1983, the
cumulative annual total shareholder return on the Company’s common stock was
14.8%, significantly outperforming the S&P 500 Index cumulative annual total
shareholder return, which was 12.3% over the same period, and the S&P
Utility Index, which was 9.3%. For the five-year period ending
December 31, 2007, shareholders have received a 20.9% annualized total
return. This performance is in no small part due to the management
team and the Company’s experienced Board of Directors.
The Board believes that an active,
professional, independent board benefits in many ways from classifying its
Directors. The most notable benefits are increased Board stability,
improved long-term planning and an enhanced ability to protect shareholders in a
potential takeover.
Increased Board
Stability
Three-year staggered terms are designed
to provide stability and to ensure that, at any given time, a majority of the
Company’s Directors have prior experience as Directors of the Company and a
solid knowledge of the Company’s complex businesses and strategy. The Board of
Directors believes that Directors who have experience with the Company and
knowledge about its business and affairs are a valuable resource and are better
positioned to make fundamental decisions that are in the best interests of the
Company and its shareholders. The Board observes that numerous well-respected
corporations have classified boards. Such experience and knowledge are
particularly important attributes for directors of a Company which owns a
regulated utility that operates in a challenging environment comprised of
extensive state and federal regulation, a rapidly-growing service territory and
potentially volatile energy markets.
In addition, because a classified Board
produces more orderly change in the composition of the Board and in the policies
and strategies of the Company, the Company is better equipped to attract and
retain prominent and well-qualified Directors who are willing and able to commit
the time and resources required to understand fully the Company and its
operations. The Board believes that its classified structure has helped to
attract experienced Directors and to enhance shareholder value. For a small to
mid-cap company such as SJI, there are real concerns regarding our ability to
attract and retain high quality board members without a classified board. The
Directors are prominent in business, finance, law and academia, and, as stated
above, the total annual return on our stock has significantly outperformed the
S&P 500 Index and the S&P Utility Index. It is the Board’s view that Mr.
Edwards, the Lead Director, and Dr. Billings, Chair of the Nominating and
Corporate Governance Committee, have provided important leadership to the Board
and the Company in the service of the shareholders, especially
in the area of corporate governance. The Company has adopted Corporate
Governance Principles, which appear on its website, that focus on the
independence and quality of the members of the Board and its effective
functioning.
Improved Long-Term
Planning
The Board of Directors believes
that electing its Directors to staggered three-year terms enhances the Company’s
ability to engage in long-term strategic planning. It also believes that the
continuity made possible by the classified board structure promotes the proper
oversight of a complex company like SJI. The Board of Directors believes that
the benefits of the current classified board structure do not come at the cost
of Directors’ accountability to shareholders. Directors elected to three-year
terms are just as accountable to shareholders as Directors elected annually,
since all Directors are required to uphold their fiduciary duties to the Company
and its shareholders, regardless of the length of their term of office. In the
Board’s view, the annual election of approximately one-third of the Directors
provides shareholders with an orderly means to effect change and to communicate
their views on the performance of the Company and its
Directors.
Overall accountability of the Board is
achieved through shareholders’ selection of responsible, experienced and
respected individuals as Directors; it is not compromised by the length of a
Director’s term. Directors elected for staggered terms are not any less
accountable or responsive to shareholders than they would be if they were
elected annually. In any potential takeover, the Directors would act in the best
interests of shareholders and the Company, in accordance with their ongoing
fiduciary duties under New
Jersey
law.
Enhanced Ability to Protect Shareholder
Value in a Potential Takeover
A classified board structure
enhances the Board of Directors’ ability to negotiate the best results for
shareholders in a potential takeover situation. The Board of Directors believes
that a classified board structure encourages a person seeking to obtain control
of the Company to offer a full and fair price and to negotiate with the
Board. It is important to note, however, that although the classified
board is intended to cause a person seeking to obtain control of the Company to
negotiate with the Board, the existence of a classified board will not, in fact,
prevent a person from acquiring control of a board or accomplishing a hostile
acquisition. Instead, the classified board merely gives the Board additional
time and leverage in its negotiations with a potential acquirer, allowing it to
enhance shareholder value in any potential change in control
situation.
Effect of the
Proposal
Passage of the shareholder
proposal would not automatically eliminate the classified board structure.
Further action would be required to amend the Company’s Certificate of
Incorporation to effect this change. Under the Company’s Certificate of
Incorporation, the affirmative vote of 80% of the Company’s shares having voting
power with respect to such an amendment would be required for
approval.
The Board of Directors and
its Nominating and Corporate Governance Committee, with the assistance of their
professional advisors, have carefully considered this proposal and the arguments
for and against a classified Board structure. Today, there are growing trends in
corporate governance that favor a “one-size-fits-all” approach for all
companies. The Board believes that each element of corporate governance needs to
be carefully evaluated to determine the applicability for your
Company. The Board has concluded that the Company’s classified Board
structure continues to promote the best interests of the
shareholders.
THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER
PROPOSAL. Unless you specify otherwise, the Board
intends the accompanying proxy to be voted against this proposal.
.
ANNUAL REPORT AND FINANCIAL
INFORMATION
A copy of the Company’s Annual Report to
Shareholders for the year ended December 31, 2007 accompanies this proxy
statement. The Annual Report is not proxy-soliciting material or a communication
by which any solicitation is made.
Upon written request of any person who
on the record date for the Annual Meeting was a record owner of the Common
Stock, or who represents in good faith that he or she was on that date a
beneficial owner of such stock and is entitled to vote at the Annual Meeting,
the Company will send to that person, without charge, a copy of its Annual
Report on Form 10-K for 2007, as filed with the Securities and Exchange
Commission. Requests for this report should be directed to Richard H.
Walker, Jr., Vice President, General Counsel and Secretary, South Jersey
Industries, Inc., 1 South Jersey Plaza, Folsom, New Jersey
08037.
OTHER
MATTERS
Any proposal which a qualified
shareholder of the Company wishes to include in the Company’s proxy statement to
be sent to shareholders in connection with the Company’s 2009 Annual Meeting of
Shareholders that is received by the Company after November 13, 2008 will not be
eligible for inclusion in the Company’s proxy statement and form of proxy for
that meeting. To be included, proposals can be mailed to the Corporate Secretary
at 1 South Jersey Plaza, Folsom, New Jersey 08037. To be a qualified shareholder, a
shareholder must have owned at least $2,000 in market value of the Company’s
securities for at least one year before the date of submission of the proposal
to the Company. In compliance with the Company’s bylaws, shareholders
must provide the Company with at least 60 days, but no more than 90 days, notice
prior to an announced annual meeting date of (i) business the shareholder wishes
to raise at the meeting and (ii) persons, if any, the shareholder wishes to
nominate for election as directors at that meeting.
The Board of Directors knows of no
matters other than those set forth in the Notice of Annual Meeting of
Shareholders to come before the 2008 Annual Meeting.
By Order of the Board of
Directors,
Richard H. Walker,
Jr.
Vice President, General Counsel &
Secretary
March 18, 2008
Directions to the Annual Meeting of
Shareholders
From
Philadelphia:
Atlantic
City Expressway to the Egg Harbor Exit 17. Left onto Route 50 north, turn right
onto Route 30. Left onto Bremen Avenue, 2 1/4 miles to Renault.
From North
Jersey:
Garden
State Parkway south to Exit 44. Sharp right onto Moss Mill Road (Alt. #561),
follow 5 miles to Bremen Avenue. Turn right, 1/4 mile to Renault.
From Atlantic
City:
Route 30
west approximately 16 miles to Bremen Avenue. Right at the Renault wine bottle,
2 1/4 miles to Renault.
From South
Jersey:
Garden
State Parkway north to Exit at rest stop/service area, mile marker #41. Proceed
to north end of service area. Follow signs to Jim Leeds Road. At traffic light
turn left. Proceed to fork, bear right and continue on Route 561. Continue to
Bremen Avenue and turn right. 1 1/2 miles to Renault.
South Jersey
Industries
1 South
Jersey Plaza, Folsom, NJ 08037
Vote
by Telephone
Have your
proxy card available when you call the Toll-Free number
1-888-693-8683 using a
touch-tone phone and follow the simple instructions to record your
vote.
Vote by
Internet
Have your
proxy card available when you access
the website http://www.cesvote.com
and
follow the simple instructions to record your vote.
Vote by
Mail
Please
mark, sign and date your proxy card and return it in the postage-paid envelope
provided or return it to: Corporate Election Services, P. O. Box 1150,
Pittsburgh, PA 15230-1150.
Vote by
Telephone
Call toll-Free using a
Touch-Tone phone:
1-888-693-8683
|
Vote by
Internet
Access the Website and
Cast your vote:
http://www.cesvote.com
|
Vote by
Mail
Return your proxy
in the postage-paid
envelope provided.
|
Vote 24 hours a day, 7 days a
week.
If you vote by telephone or Internet,
please do not send your proxy by mail.
Proxy must be signed and dated on
the reverse side.
ê Please fold and detach card
at perforation before mailing. ê
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SOUTH JERSEY INDUSTRIES,
INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 18,
2008.
The
undersigned shareholder hereby appoints E. J. Graham and R. H. Walker, Jr., and
each of them, attorneys and proxies with full power of substitution and
revocation to vote the number of shares of Common Stock the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders of
South Jersey Industries, Inc. on Friday, April 18, 2008, and at any adjournments
thereof, as indicated on the reverse and in accordance with the judgment of said
attorneys and proxies on any other business which may come before the meeting or
any adjournments, all as set forth in the accompanying notice and proxy
statement, the receipt of which the undersigned acknowledges.
______________________________________
Signature
______________________________________
Signature
Date:
______________________ ,
2008
Please
sign exactly as name is shown to the left. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
VOTING INSTRUCTIONS ON REVERSE
SIDE
YOUR VOTE IS
IMPORTANT
If you do
not vote by Internet or telephone, please sign and date this proxy card and
return it promptly in the enclosed postage-paid envelope, or otherwise to
Corporate Election Services, P.O. Box 1150, Pittsburgh, PA 15230, so your shares
may be represented at the meeting. If you vote by Internet or telephone, please
do not mail this proxy card.
Proxy must be signed and dated on
the reverse side.
ê Please fold and detach card
at perforation before mailing. ê
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SOUTH JERSEY INDUSTRIES,
INC. Proxy
The
shares represented by this Proxy will be voted as directed by the shareholder.
If no direction is given, they will be voted in favor of the election of the
listed nominees as a group and in favor of proposal 2.
1.
|
For
the election of two Directors:
|
Class
I (1)
Keith S. Campbell
(2) W. Cary Edwards
q FOR all
nominees listed above. q WITHHOLD AUTHORITY
(except
as shown to the contrary below)
to vote for all nominees listed above.
INSTRUCTION: To withhold authority to
vote for any individual nominee, write that nominee’s name or number on the line
below.
2.
|
To
ratify the appointment of Deloitte & Touche LLP as Independent
Registered Public Accounting Firm for
2008.
|
q FOR q AGAINST q ABSTAIN
3.
|
Shareholder
proposal requesting the annual election of each
Director.
|
q FOR q AGAINST q ABSTAIN
Continued on reverse
side