-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uwm+l9DOwePQwL9PYSn8Hopr6sdT+FSVAkdgbH1e+1S2KESzbRAuU3XGgtFTNaMG VkxkSHq2t3SKoEW9cY48jg== 0000070668-95-000038.txt : 19951226 0000070668-95-000038.hdr.sgml : 19951226 ACCESSION NUMBER: 0000070668-95-000038 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951222 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUI CORP CENTRAL INDEX KEY: 0000070668 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 221869941 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-08353 FILM NUMBER: 95603915 BUSINESS ADDRESS: STREET 1: 550 RTE 202-206 STREET 2: BOX 760 CITY: BEDMINSTER STATE: NJ ZIP: 07921-0760 BUSINESS PHONE: 9087810500 MAIL ADDRESS: STREET 1: 550 ROUTE 202-206 STREET 2: P.O. BOX 760 CITY: BEDMINSTER STATE: NJ ZIP: 07921-0760 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL UTILITIES & INDUSTRIES CORP DATE OF NAME CHANGE: 19830502 10-K405 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 1995 Commission File # 1-8353 NUI CORPORATION (Exact name of registrant as specified in its charter) New Jersey 22-1869941 (State of incorporation) (I.R.S. employer identification no.) 550 Route 202-206, P.O. Box 760, Bedminster, New Jersey 07921-0760 (Address of principal executive offices, including zip code) (908) 781-0500 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: COMMON STOCK, No Par Value New York Stock Exchange, Inc. (Title of class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: X Indicate by check mark if disclosure of delinquent filers, pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K: X The aggregate market value of 8,002,651 shares of common stock held by non-affiliates of the registrant calculated using the $16.50 per share closing price on November 30, 1995 was: $132,043,742. The number of shares outstanding of each of the registrant's classes of common stock, as of November 30, 1995: Common Stock, No Par Value: 9,201,237 shares outstanding. Documents incorporated by reference: NUI Corporation's definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is expected to be filed with the Securities and Exchange Commission no later than 120 days subsequent to September 30, 1995. NUI Corporation Annual Report on Form 10-K For The Fiscal Year Ended September 30, 1995 TABLE OF CONTENTS PART I Page Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 9 Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 9 Item 4. Submission of Matters to a Vote of Security Holders . . . . . 9 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . 11 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . 13 Item 8. Financial Statements and Supplementary Data . . . . . . . . . 20 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . 20 PART III Item 10. Directors and Executive Officers of the Registrant . . . . . 20 Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . 20 Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . . . . 20 Item 13. Certain Relationships and Related Transactions . . . . . . . 20 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 21 NUI Corporation Annual Report on Form 10-K for the Fiscal Year Ended September 30, 1995 PART I Item 1. Business NUI Corporation ("NUI" or the "Company") was incorporated in New Jersey in 1969, and is engaged primarily in the sale and transportation of natural gas. The Company serves more than 354,000 utility customers in six states through its Northern and Southern operating divisions. The Northern Division operates in New Jersey as Elizabethtown Gas Company. The Southern Division was formed effective April 1, 1995 through the consolidation of the Company's City Gas Company of Florida and Pennsylvania & Southern Gas Company ("PSGS") operations (see Note 3 of the Notes to the Consolidated Financial Statements). PSGS, which operated as North Carolina Gas Service, Elkton Gas Service (Maryland), Valley Cities Gas Service (Pennsylvania) and Waverly Gas Service (New York), was acquired by the Company on April 19, 1994 (see Note 2 of the Notes to the Consolidated Financial Statements). In addition to its gas distribution operations, the Company provides gas sales and related services through its Natural Gas Services, Inc. subsidiary, and bill processing and related customer services for utilities and municipalities through its Utility Billing Services, Inc. subsidiary. The principal executive offices of the Company are located at 550 Route 202-206, Box 760, Bedminster, NJ 07921-0760; telephone: (908) 781-0500. Territory and Customers Served See Item 6 - "Selected Financial Data-Summary Consolidated Operating Data" for summary information by customer class with respect to operating revenues, gas volumes sold or transported and average utility customers served. The Company's utility operations serve more than 354,000 customers, of which approximately 67% are in New Jersey and 33% are in the Southern Division states. Approximately 54% of the Company's customers are residential and commercial customers that purchase gas primarily for space heating. The Company's operating revenues for fiscal 1995 amounted to $376.4 million, of which approximately 76% was generated in New Jersey, and 24% was generated by operations in the Southern Division states. Gas volumes sold or transported in fiscal 1995 amounted to 85.9 million Mcf, of which approximately 80% was sold or transported in New Jersey, and 20% was sold or transported in the Southern Division states. An Mcf is a basic unit of measurement for natural gas comprising 1,000 cubic feet of gas. Northern Division The Company, through its Northern Division, provides gas service to approximately 237,000 customers in franchised territories within seven counties, or portions thereof, in central and northwestern New Jersey. The Northern Division's 1,300 square-mile service territory has a total population of approximately 950,000. Most of the Northern Division's customers are located in densely-populated central New Jersey, where increases in the number of customers are primarily from conversions to gas heating from alternative forms of heating. The Northern Division's gas volumes sold or transported and customers served for the past three fiscal years were as follows: Gas Volumes Sold or Transported (in thousands of Mcf) 1995 1994 1993 Firm Sales: Residential 17,855 20,315 19,115 Commercial 10,275 11,528 10,463 Industrial 4,595 5,025 4,781 Interruptible Sales 15,440 14,156 12,345 Unregulated Sales 1,044 -- -- Transportation 17,202 14,367 15,459 Services ------ ------ ------ Total 66,411 65,391 62,163 ====== ====== ====== Customers Served (twelve-month average) 1995 1994 1993 Firm Sales: Residential 159,191 155,473 151,621 --Heating Residential-- 59,688 61,012 62,520 Non-heating Commercial 17,350 16,966 16,588 Industrial 349 360 377 Interruptible Sales 75 74 75 Transportation 138 94 85 Services ------- ------- ------- Total 236,791 233,979 231,266 ======= ======= ======= Gas volumes sold to the Company's firm customers are sensitive to the weather in New Jersey. In fiscal 1995, the weather in New Jersey was 13% warmer than normal, thereby decreasing gas sales. Weather in fiscal 1994 was normal and was 6% warmer than normal in fiscal 1993. The Northern Division's tariff contains a weather normalization clause that is designed to help stabilize the Company's results by increasing amounts charged to customers when weather has been warmer than normal and decreasing amounts charged when weather has been colder than normal. For a further discussion on variations in revenues, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations". The growth in the number of residential heating customers principally reflects the Company's marketing emphasis to convert residential non-heating customers to full gas heating service. Approximately 70% of the residential heating customers added in New Jersey since 1991 represented homes that were converted to gas heating from other forms of space heating and the remainder consisted of new homes. Approximately 40 new residential developments are at various stages of the approval process before municipal planning boards throughout the Northern Division's service territory. As discussed further under "Regulation", effective January 1, 1995, the New Jersey Board of Public Utilities (the "NJBPU") authorized new tariffs which are designed to provide for the unbundling of natural gas transportation and sales service to commercial and industrial customers. As of September 30, 1995, 165 commercial sales customers had switched to transportation service under the new tariff. Despite the transfers to transportation service, the number of commercial customers increased reflecting the Company's marketing emphasis on commercial conversions. In fiscal 1995, 35 schools and 588 businesses, which are subject to New Jersey legislation requiring the registration, systematic testing and monitoring of underground fuel oil and propane storage tanks, converted to gas heating systems or switched from interruptible service to commercial firm service. In addition, changing economic conditions, coupled with environmental concerns and legislation, are creating a market for natural gas for large commercial air conditioning units and compressed natural gas fleet vehicles. The Company also has an economic development program to help spur economic growth and jobs creation which provides grants and reduced rates for qualifying businesses that start up, relocate or expand within designated areas. The Company's industrial customers also have the ability to switch to transportation service and purchase their gas from other suppliers. The rate charged to transportation customers is less than the rate charged to firm industrial and commercial sales customers because the transportation customer rate does not include any cost of gas component. However, the operating margins from both rates are substantially the same. The Northern Division's "interruptible" customers have alternative energy sources and use gas on an "as available" basis. Variations in the volume of gas sold or transported to these customers do not have a significant current effect on the Company's earnings because, in accordance with New Jersey regulatory requirements, 90% to 95% of the margins that otherwise would be realized on gas sold or transported to interruptible customers are used to reduce gas costs charged to firm customers. The Company provides gas sales and transportation services comprising twenty percent of the primary fuel requirements of a 614 megawatt cogeneration facility that began commercial operation in New Jersey in July 1992 to supply electric power to New York City. In fiscal 1995, sales and transportation of gas to this customer accounted for approximately 5% of the Company's operating revenues and approximately 9% of total gas sold or transported. The Company is authorized by the NJBPU to retain a total of approximately $2.3 million of the operating margins realized from these sales over approximately four years. Through fiscal 1995, the Company realized all of this amount, of which approximately $0.6 million was realized during fiscal 1995. All future operating margins that otherwise would be realized on gas sold or transported to the facility will be used to reduce gas costs charged to firm customers. In order to maximize the Company's gas supply portfolio, in fiscal 1995 the Company began selling available gas supply and excess interstate pipeline capacity to third party customers and other gas service companies. The price of gas sold to these customers is not regulated by the NJBPU, however the NJBPU has authorized that 80% of the margins realized from these sales be used to reduce gas costs charged to firm customers. Southern Division City Gas Company of Florida ("CGF"). CGF is the second largest natural gas utility in Florida, supplying gas to over 95,000 customers in Dade and Broward Counties in south Florida, and in Brevard and St. Lucie Counties on the central eastern coast of Florida. CGF's service areas cover approximately 850 square miles and have a population of approximately 500,000. CGF's gas volumes sold or transported and customers served for the past three fiscal years were as follows: Gas Volumes Sold or Transported (in thousands of Mcf) 1995 1994 1993 Firm Sales: Residential 1,982 1,983 1,904 Commercial 4,198 4,439 4,455 Interruptible Sales 1,533 1,958 2,186 Transportation 1,313 1,063 980 Services ----- ----- ----- Total 9,026 9,443 9,525 ===== ===== ===== Customers Served (twelve-month average) 1995 1994 1993 Firm Sales: Residential 90,960 87,194 83,541 Commercial 4,615 4,539 4,428 Interruptible Sales 20 28 30 Transportation 24 8 2 Services ------ ------ ------ Total 95,619 91,769 88,001 ====== ====== ====== CGF's residential customers purchase gas primarily for water heating, clothes drying and cooking. Some customers, principally in Brevard County, also purchase gas to provide space heating during the relatively mild winter season. The growth in the average number of customers from fiscal 1993 to fiscal 1995 primarily reflects new construction. In fiscal 1996, CGF will focus on developing the commercial and residential margin potential from mains currently in place while selectively expanding to future development areas. The Company initiated natural gas service to St. Lucie County in fiscal 1993 through the construction of a gate station interconnection with the interstate pipeline system, acquisition and conversion of an existing underground propane system and the extension of mains to potential growth areas within the city of Port St. Lucie. The Company substantially completed expansion of its mains in fiscal 1994. The net investment in utility plant in the city as of September 30, 1995 was $3.9 million. Of this amount, $2.4 million was included in the determination of a permanent rate increase authorized by the Florida Public Service Commission (the "FPSC") in November 1994 (see "Regulation"). As of September 30, 1995, service was provided to approximately 600 residential and commercial customers in St. Lucie County. The Company anticipates that this start-up development project will generate increased margins over time. The Company has the opportunity to seek FPSC approval to add the remainder of this start-up investment to its permanent rates as new customers are added. As further discussed under "Regulation", the November 29, 1994 FPSC order that authorized new permanent rates for CGF, removed the Company's leased appliance business from regulation by the FPSC. The Company raised its leasing rates effective February 1995, and in fiscal 1995, the appliance leasing operations generated operating revenues of $3.6 million and operating income before income taxes of $1.4 million. As of September 30, 1995, the Company's net investment in leased appliances amounted to $15.1 million. The Company anticipates higher returns from this business in fiscal 1996. CGF's commercial business consists primarily of schools, businesses and public facilities, of which the number of customers tends to increase concurrently with the continuing growth in population within its service areas. As with its residential markets, the Company is seeking to maximize the utilization of its existing mains by emphasizing marketing efforts toward potential commercial business along these lines. CGF's industrial customers and certain commercial customers are served under tariffs applicable to "interruptible" customers. Unlike the Company's Northern Division, CGF's interruptible customers do not generally have alternative energy sources, although their service is on an "as available" basis. The Company retains all of the operating margins from sales to these customers and does not expect any significant impact to the Company's earnings from any service interruptions which may occur. Certain commercial and industrial customers have converted their natural gas service from a sales basis to a transportation basis. CGF's transportation tariff provides margins on transportation services that are substantially the same as margins earned on gas sales. North Carolina Gas Service ("NCGS"). The Company, through NCGS, provides gas service to approximately 12,600 customers in Rockingham and Stokes Counties in North Carolina, which territories comprise approximately 560 square miles. During fiscal 1995, NCGS sold or transported approximately 3.8 million Mcf of gas as follows: 20% sold to residential customers, 13% sold to commercial customers, 43% sold to industrial customers and 24% transported to commercial and industrial customers. Elkton Gas Service ("Elkton"). The Company, through Elkton, provides gas service to approximately 3,200 customers in franchised territories comprising approximately 14 square miles within Cecil County, Maryland. During fiscal 1995, Elkton sold approximately 512,000 Mcf of gas as follows: 34% sold to residential customers, 34% sold to commercial customers and 32% sold to industrial customers. Valley Cities Gas Service ("VCGS") and Waverly Gas Service ("WGS"). VCGS and WGS provide gas service to approximately 5,700 customers in franchised territories comprising 104 square miles within Bradford County, Pennsylvania and the Village of Waverly, New York and surrounding areas, respectively. During fiscal 1995, VCGS and WGS sold or transported approximately 3.7 million Mcf of gas as follows: 14% sold to residential customers, 7% sold to commercial customers, 6% sold to industrial customers and 73% transported to commercial and industrial customers. Gas Supply and Operations In recent years, the gas industry has been undergoing structural changes in response to policies of the Federal Energy Regulatory Commission (the "FERC") and local regulatory commissions designed to increase competition. Traditionally, interstate pipelines were wholesalers of natural gas to local distribution companies and generally did not provide separate transportation or other services for specific customers. In 1985, the FERC adopted Order No. 436 that encouraged interstate pipelines to make transportation of gas available to customers on a non-discriminatory basis. Such voluntary "open access" by certain interstate pipelines enhanced the opportunity for local gas distribution companies and industrial customers to purchase natural gas directly from gas producers and others. In 1992, the FERC issued Order No. 636 that, among other things, mandated the separation or "unbundling" of interstate pipeline sales, transportation and storage services and established guidelines for capacity management effective in 1993. In fiscal 1995, the NJBPU unbundled the rates charged to New Jersey commercial and small industrial customers as well. The transition to more competitive rates and services has the effect of increasing the opportunity for local gas distribution companies and industrial and commercial customers to purchase natural gas from alternative sources, while increasing the potential business and regulatory risk borne by a local gas distribution company with respect to the acquisition and management of natural gas services. Although the implementation of Order No. 636 involved the restructuring of the Company's contracts with all of its pipeline suppliers, the most significant restructuring pertains to certain pipelines that together deliver less than one-third of the Company's total firm gas supply. Under Order No. 636 the pipeline companies are passing through to their customers transition costs associated with mandated restructuring, such as costs resulting from buying out unmarketable gas purchase contracts. The Company has been charged approximately $7 million of such costs as of September 30, 1995, which the Company has been authorized to recover through its purchased gas adjustment clauses. The Company currently estimates that its remaining Order No. 636 transition obligation will be approximately $9.1 million, which it expects to also recover through the Company's purchased gas adjustment clauses as these costs are incurred. This transition obligation is subject to possible future FERC actions based upon filings by the Company's pipeline suppliers. The Company endeavors to utilize its pipeline capacity efficiently by matching capacity to its load profile to the extent feasible. To this end, the Company has had a broad unbundled service tariff for certain of its customers since 1987. The Company continues to avail itself of opportunities to improve the utilization of its pipeline capacity by pursuing broad based customer growth, including off-peak markets, markets not on its distribution system, and utilizing capacity release provisions within Order No. 636 when operationally feasible. The Company's gas supply during fiscal 1995, came from the following sources: approximately 13% from purchases under contracts with primary pipeline suppliers and additional purchases under their filed tariffs; approximately 87% from purchases from various producers and gas marketers, and purchases under long-term contracts with independent producers and less than 1% from propane and liquefied natural gas ("LNG"). The Company manages its gas supply portfolio to assure a diverse, reliable and secure supply of natural gas at the lowest reasonable cost. In fiscal 1995, the Company's largest single supplier accounted for 13% of the Company's total gas purchases. The Company has long-term gas delivery contracts with seven interstate pipeline companies. Under these contracts, the Company has a right to delivery, on a firm year-round basis, of up to 92.2 million Mcf of natural gas annually with a maximum of approximately 273,000 Mcf per day. Both the price and conditions of service under these contracts are regulated by the FERC. The Company has long-term gas purchase contracts for the supply of natural gas for its system with nine suppliers, including two interstate pipeline companies, four gas marketers and three independent producers. The Company also has a long-term supply and delivery contract with an interstate pipeline. Under these contracts, the Company has a right to purchase, on a firm year-round basis, up to 45.6 million Mcf of natural gas annually with a maximum of approximately 132,000 Mcf per day. In addition, the Company has access to spot market gas through the interstate pipeline system to supplement or replace, on a short-term basis, portions of its long-term gas purchase contracts when such actions can reduce overall gas costs or are necessary to supply interruptible customers. In fiscal 1995, the Company, along with seven other Northeastern and Mid-Atlantic gas distribution companies, formed the East Coast Natural Gas Cooperative LLC (the "Co-op"). The Co-op was formed with the goal of jointly managing certain portions of the members' gas supply portfolios, to increase reliability and reduce costs of service to customers, and to improve the competitive position of the member companies. In order to have available sufficient quantities of gas during the heating season, the Company stores gas during non-peak periods and purchases supplemental gas, including propane, LNG and gas available under contracts with certain large cogeneration customers, as it deems necessary. The storage contracts provide the Company with an aggregate of 15.6 million Mcf of natural gas storage capacity and provide the Company with the right to receive a maximum daily quantity of 176,100 Mcf. The contracts with cogeneration customers provide 35,800 Mcf of daily gas supply to meet peak loads by allowing the Company to take back capacity and supply that otherwise is dedicated to serve those customers. The Company's peak load facilities in New Jersey include a propane-air plant with a daily production capacity of 27,400 Mcf, fixed propane storage totaling 674,000 gallons and rail car sidings capable of storing an additional 300,000 gallons. The Company has an LNG storage and vaporization facility with a daily delivery capacity of 24,300 Mcf and storage capacity of 131,000 Mcf. The Company's maximum daily sendout in fiscal 1995 was approximately 329,800 Mcf in its Northern Division and 87,500 Mcf in the Southern Division states combined. The Company maintains sufficient gas supply and delivery capacity for a maximum daily sendout capacity for the Northern Division of approximately 380,900 Mcf and approximately 122,200 Mcf for the Southern Division states combined. Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $78 million annually. The Company currently recovers, and expects to continue to recover, such fixed charges through its purchased gas adjustment clauses. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 9 million Mcf per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations. The Company is authorized by its state regulatory commissions to recover through rates (exclusive of carrying costs), surcharges from its pipeline suppliers that relate to take-or-pay obligations that the suppliers had with natural gas producers. The Company distributes gas through approximately 5,800 miles of steel, cast iron and plastic mains. The Company has physical interconnections with five interstate pipelines in New Jersey and one interstate pipeline in Florida. In addition, the Company has physical interconnections in North Carolina and Pennsylvania with interstate pipelines which also connect to the Northern Division. Common interstate pipelines along the Company's operating system provide the Company with greater flexibility in managing pipeline capacity and supply, and thereby optimize system utilization. Regulation The Company is subject to regulation with respect to, among other matters, rates, service, accounting and the issuance of securities. The Company is subject to regulation as an operating utility by the public utility commissions of the states in which it operates. The Company is also subject to regulation by the United States Department of Transportation under the Natural Gas Pipeline Safety Act of 1968, with respect to the design, installation, testing, construction and maintenance of pipeline facilities. Natural gas purchases, transportation service and storage service provided to the Company by interstate pipeline companies are subject to regulation by the FERC (see "--Gas Supply and Operations"). In addition, the Company is subject to federal and state legislation with respect to water, air quality, solid waste disposal and employee health and safety matters and to environmental regulations issued by the United States Environmental Protection Agency, the New Jersey Department of Environmental Protection and other federal and state agencies. The Company's current rates and tariffs for its Northern Division reflect a rate case that was settled in October 1991, under which the Company obtained a weather normalization clause - see "Territory and Customers Served - Northern Division". In December 1994, the NJBPU authorized new tariffs which are designed to provide for unbundling of natural gas transportation and sales services for Northern Division commercial and industrial customers. The new tariffs became effective on January 1, 1995 and are designed to be neutral as to the operating margins of the Company. On November 29, 1994, the FPSC voted to authorize the Company to increase its base rates in Florida by $1.6 million annually (the "FPSC Order"). The FPSC Order provides for a rate base amounting to approximately $82.6 million with an overall allowed after-tax rate of return of 7.26%. In addition, the FPSC Order provides for several tariff changes designed to promote growth in developing markets for natural gas and approved the deregulation of the Florida operation's leased appliance business which consists of leasing water heaters, clothes dryers and ranges to customers (see "Territory and Customers Served - Southern Division-Florida" ). The Company is currently evaluating the need to seek a rate increase in fiscal 1996, as well as tariff adjustments to improve the Florida operation's competitive position with respect to large volume customers. The current rates and tariffs for the North Carolina, Maryland, Pennsylvania and New York operations were authorized between October 1988 and September 1995. These operations serve approximately 20,000 customers in aggregate. On September 20, 1995, the North Carolina Utilities Commission approved a stipulation to increase the Company's base rates in North Carolina by $385,000 annually. The tariff for NCGS reflects a weather normalization clause for its heat sensitive residential and commercial customers. The Company's tariffs contain adjustment clauses that enable the Company to recover purchased gas costs. The adjustment clauses provide for periodic reconciliations of actual recoverable gas costs with the estimated amounts that have been billed. Under or over recoveries at the reconciliation date are recovered from or refunded to customers in subsequent periods. Seasonal Aspects Sales of gas to some classes of customers are affected by variations in demand due to changes in weather conditions, including normal seasonal variations throughout the year. The demand for gas for heating purposes is closely related to the severity of the winter heating season. Seasonal variations affect short-term cash requirements. Persons Employed As of September 30, 1995, the Company employed 1,079 persons, of which 270 employees in the Northern Division were represented by the Utility Workers Union of America (Local 424), 105 employees in Florida and 17 employees in Pennsylvania were represented by The Teamsters Union, and 43 employees in North Carolina were represented by the International Brotherhood of Electrical Workers. The current collective bargaining agreement with the Northern Division's union was negotiated effective November 20, 1994 and expires on November 20, 1998. The North Carolina union collective bargaining agreement was negotiated on August 20, 1995, and expires on August 20, 1998. The collective bargaining agreements in Pennsylvania and Florida expire on September 30, 1996 and March 31, 1997, respectively. Competition The Company competes with distributors of other fuels and forms of energy, including electricity, fuel oil and propane, in all portions of the territories in which it has distribution mains. In 1992, the FERC issued Order No. 636 (see "Gas Supply and Operations"). Subsequently, initiatives were sponsored in various states, the purposes of which were to "unbundle" or separate into distinct transactions the purchase of the gas commodity from the purchase of transportation services for the gas. To that end, as discussed under "Regulation", New Jersey has unbundled commercial and industrial gas purchase and transportation rates. The unbundled sale of gas to customers is subject to competition from unregulated marketers and brokers, which generally do not bear the obligations or costs related to operating a regulated utility. Tariffs for transportation service have generally been designed to provide the same margins as bundled sales tariffs. Therefore, the Company is financially indifferent as to whether it transports gas, or sells gas and transportation together. The Company also faces the risk of loss of transportation service for large industrial customers which may have the ability to build connections to interstate gas pipelines and bypass the Company's distribution system. With the final implementation of FERC Order No. 636, the FERC is no longer discouraging such direct connections. Gas distributors can also expect increased competition from electricity as deregulation in that industry decreases prices and increases supply sources. Alternatively, opportunities may increase for gas service to fuel generators for large industrial customers, replacing electric utility service. The Company believes that in order to compete, it must offer a greater variety of services at more competitive prices. See Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Outlook and Business Plan" for a discussion of the Company's preparation for the impact of increased competition. Franchises The Company holds non-exclusive municipal franchises and other consents which enable it to provide natural gas in the territories it serves. The Company intends to renew these franchises and consents as they expire. Environment Reference is made to Item 7- "Management's Discussion and Analysis of Financial Condition and Results of Operations- Capital Expenditures and Commitments" and Note 10, "Commitments and Contingencies" of the "Notes to the Consolidated Financial Statements" for information regarding environmental matters affecting the Company. Item 2. Properties The Company owns approximately 5,800 miles of steel, cast iron and plastic gas mains, together with gate stations, meters and other gas equipment. In addition, the Company owns peak shaving plants, including an LNG storage facility in Elizabeth, New Jersey. The Company also owns real property in Union, Middlesex, Warren, Sussex and Hunterdon Counties in New Jersey, and in Dade, Broward, Brevard and St. Lucie Counties in Florida, portions of which are under lease to others. The Company's owned properties include a general office building in Hialeah, Florida, that serves as the Southern Division's headquarters; another office facility in Rockledge, Florida; and office buildings in both Reidsville, North Carolina and Sayre, Pennsylvania, which serve as operating offices for the North Carolina and the Pennsylvania and New York operations, respectively. The Company also owns various service centers in New Jersey, Florida, North Carolina, Maryland and Pennsylvania from which the Company dispatches service crews and conducts construction and maintenance activities. The Company leases office space in Bedminster, New Jersey, that serves as its corporate headquarters and leases certain other facilities in New Jersey and Florida that are operated as customer business offices or operating offices. The Company also leases approximately 160,000 square feet in an office building in Union, New Jersey, which serves as the Northern Division's headquarters. Subject to minor exceptions and encumbrances, all other property materially important to the Company and all principal plants are owned in fee simple, except that most of the mains and pipes are installed in public streets under franchise or statutory rights or are constructed on rights of way acquired from the apparent owner of the fee. Item 3. Legal Proceedings The Company is involved in various claims and litigation incidental to its business. In the opinion of management, none of these claims and litigation will have a material adverse effect on the Company's results of operations or its financial condition. Item 4. Submission of Matters to a Vote of Security Holders No matter was presented for submission to a vote of security holders through the solicitation of proxies or otherwise during the last quarter of fiscal 1995. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters NUI common stock is listed on the New York Stock Exchange and is traded under the symbol "NUI". The quarterly cash dividends paid and the reported high and low closing prices per share of NUI common stock for the two years ended September 30, 1995 were as follows: Quarterly Price Range Cash Dividend High Low Fiscal 1995: First Quarter $0.225 $18.375 $13.50 Second Quarter 0.225 16.50 14.25 Third Quarter 0.225 17.50 14.625 Fourth Quarter 0.225 16.875 14.875 Fiscal 1994: First Quarter $0.40 $29.00 $25.25 Second Quarter 0.40 28.75 24.125 Third Quarter 0.40 24.50 21.00 Fourth Quarter 0.40 22.75 17.75 There were 6,890 shareholders of record of NUI common stock at November 30, 1995. It is the Company's intent to continue to pay quarterly dividends in the foreseeable future. The Company seeks for its annual dividend payout ratio to be consistent with industry standards. However, NUI's dividend policy is reviewed on an ongoing basis and is dependent upon the Company's expectation of future earnings, cash flow, financial condition, capital requirements and other factors. The Company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the Company is permitted to pay $17 million of cash dividends at September 30, 1995. Item 6. Selected Financial Data Selected Consolidated Financial Data (in thousands, except per share amounts)
Fiscal Years Ended September 30, 1995 1994 1993 1992 1991 Operating Revenues $376,445 $405,240 $367,456 $302,429 $301,707 Net Income $ 5,517 $ 10,780 $ 13,810 $ 11,808 $ 3,447 Net Income Per Share $ 0.60 $ 1.25 $ 1.70 $ 1.68 $ 0.55 Dividends Paid Per Share $ 0.90 $ 1.60 $ 1.59 $ 1.58 $ 1.57 Total Assets $610,165 $601,648 $ 483,911 $467,321 $406,491 Capital Lease Obligations $ 11,114 $ 11,932 $ 12,290 $ 13,422 $ 14,871 Long-Term Debt 222,060 160,928 142,090 131,546 106,189 Common Shareholders' Equity 140,912 142,768 122,384 116,933 85,182 Common Shares Outstanding 9,201 9,157 8,201 8,036 6,342
Notes to the Selected Consolidated Financial Data: Net Income for fiscal 1995 includes restructuring and other non-recurring charges amounting to $5.6 million (after tax), or $0.61 per share. Net income for fiscal 1994 includes the reversal of $1.8 million of income tax reserves and restructuring and other non-recurring charges amounting to $0.6 million (after tax). The effect of these items increased net income by $1.2 million, or $0.14 per share. Net income for fiscal 1991 includes provisions to write off certain merger- related fees and expenses and to write down certain properties and investments amounting to $3.3 million (after tax), or $0.53 per share. Summary Consolidated Operating Data
Fiscal Years Ended September 30, 1995 1994 1993 1992 1991 Operating Revenues (Dollars in thousands) Firm Sales: Residential $173,395 $191,297 $172,749 $147,650 $145,882 Commercial 98,541 110,574 97,966 80,470 79,846 Industrial 20,083 25,809 23,066 21,928 24,914 Interruptible Sales 48,282 53,077 48,254 32,758 35,956 Unregulated Sales 7,498 1,426 1,757 -- -- Transportation Services 17,696 13,273 12,154 10,410 7,792 Customer Service, 10,950 9,784 11,510 9,213 7,316 Appliance Leasing and ------- ------- ------- ------- ------- Other $376,445 $405,240 $367,456 $302,429 $301,706 ======== ======= ======= ======= ======= Gas Sold or Transported (MMcf) Firm Sales: Residential 21,276 22,558 21,019 20,251 18,133 Commercial 15,455 16,175 14,918 14,006 12,599 Industrial 5,217 5,323 4,781 5,052 5,427 Interruptible Sales 18,365 16,024 13,627 11,142 12,624 Unregulated Sales 3,398 689 904 -- -- Transportation Services 22,154 17,290 16,439 14,816 11,778 ------ ------ ------ ------ ------ 85,865 78,059 71,688 65,267 60,561 ====== ====== ====== ====== ====== Average Utility Customers Served Firm Sales: Residential 328,773 312,647 297,682 295,449 291,571 Commercial 24,510 22,726 21,016 20,670 20,292 Industrial 392 382 377 402 427 Interruptible Sales 131 101 105 104 106 Transportation Services 191 137 87 69 55 ------- ------- ------- ------- ------- 353,997 335,993 319,267 316,694 312,451 ======= ======= ======= ======= ======= Degree Days in New 4,333 4,944 4,703 4,880 4,219 Jersey (normal: 4,978) Employees (year end) 1,079 1,186 1,011 979 965 Ratio of Earnings to Fixed Charges 1.37 1.66 2.10 1.90 1.76
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis refers to NUI Corporation and all of its operating divisions and subsidiaries (collectively referred to as "NUI" or the "Company"). The Company, through its Northern and Southern Divisions, has utility operations in six states. The Northern Division operates in New Jersey as Elizabethtown Gas Company. The Southern Division was formed effective April 1, 1995 through the consolidation of the Company's City Gas Company of Florida and Pennsylvania & Southern Gas Company ("PSGS") operations (see Note 3 of the Notes to the Consolidated Financial Statements). PSGS, which has operations in North Carolina, Maryland, Pennsylvania and New York, was acquired on April 19, 1994 (the "PSGS Merger") (see Note 2 of the Notes to the Consolidated Financial Statements). Results of Operations Fiscal Years Ended September 30, 1995 and 1994 Net Income. Net income for fiscal 1995 was $5.5 million, or $0.60 per share, as compared with net income of $10.8 million, or $1.25 per share in fiscal 1994. The decrease is primarily due to non- recurring charges which, on an after-tax basis, were approximately $5.6 million, or $0.61 per share, and the reversal in fiscal 1994 of approximately $1.8 million of income tax reserves. Partially offsetting this decrease was approximately $1.6 million of additional net income attributable to the inclusion of PSGS in the entire fiscal 1995 results. Absent the non-recurring charges, net income for fiscal 1995 would have been $11.1 million, or $1.21 per share. Net income per share in fiscal 1995 was also reduced as a result of the increased number of outstanding shares of NUI common stock as compared to the prior year. Operating Revenues and Operating Margins. The Company's operating revenues include amounts billed for the cost of purchased gas pursuant to purchased gas adjustment clauses. Such clauses enable the Company to pass through to its customers, via periodic adjustments to customers' bills, increased or decreased costs incurred by the Company for purchased gas without affecting operating margins. Since the Company's utility operations do not earn a profit on the sale of the gas commodity, the Company's level of operating revenues is not necessarily indicative of financial performance. The Company's operating revenues decreased by $28.8 million, or 7%, in fiscal 1995 as compared with fiscal 1994. The decrease principally reflects the effects of weather in New Jersey that was 13% warmer than normal and 12% warmer than the prior year, and refunds attributable to lower gas costs totaling $13.9 million to Northern Division customers (see "Regulatory Matters"). Operating revenues were also reduced by decreased sales to interruptible customers due to lower gas prices and the effect of purchased gas adjustment clauses. Partially offsetting these decreases were approximately $19.5 million of additional operating revenues from the inclusion of PSGS in the entire fiscal 1995 results, the effects of base rate and appliance leasing rate increases in Florida, increased sales to off-system customers and other customer growth. The Company's average number of customers served increased by 18,004 or 5.4%, including 13,245 heating customers. Excluding the effect of a full year's inclusion of PSGS in fiscal 1995, the average number of customers increased approximately 2%. The Company's operating margins increased by $8.6 million, or 6%, in fiscal 1995 as compared with fiscal 1994. The increase was principally the result of the inclusion of PSGS for the entire fiscal 1995 results, increases in the number of customers served, and the base rate and appliance leasing rate increases in Florida. Partially offsetting these increases was the effect of the warmer-than-normal weather in New Jersey in fiscal 1995 not fully recovered through the weather normalization clause. The Company has weather normalization clauses in its New Jersey and North Carolina tariffs which are designed to help stabilize the Company's results by increasing amounts charged to customers when weather has been warmer than normal and by decreasing amounts charged when weather has been colder than normal. Operating margins were increased by approximately $4.5 million in fiscal 1995 under the weather normalization clauses. There was no adjustment to operating margins in fiscal 1994 as the weather fell within the normal range. Other Operating Expenses. The Company's other operating expenses, excluding income taxes, increased by $9.8 million, or 8%, in fiscal 1995 as compared with fiscal 1994. The increase was primarily the result of non-recurring pre-tax charges of $8.6 million, (see Note 3 of the Notes to the Consolidated Financial Statements), an additional $4.6 million of other pre-tax operating expenses from the inclusion of PSGS in the entire fiscal 1995 results and an increase in depreciation expense due to additional utility plant in service. Partially offsetting these increases were lower labor, pension and other employee benefits costs as a result of an early retirement program established by the Company in fiscal 1995 and other work force reductions. Income taxes increased by $0.8 million in fiscal 1995 due to the reversal in fiscal 1994 of approximately $1.8 million of income tax reserves no longer required as a result of management's review of necessary reserve levels, offset by the effect of lower pre-tax income in fiscal 1995. Interest Expense. Interest expense increased by $3.2 million in fiscal 1995 as compared with fiscal 1994. The increase was due to higher average outstanding borrowings, higher short-term interest rates and an increase of $0.6 million of interest recorded on the over collection of gas costs by the Northern Division. These increases were partially offset by a decrease in average long-term interest rates due to the refinancing of $46.5 million of the Company's 11% and 11.25% Gas Facilities Revenue Bonds at an interest rate of 6.35% in August 1994. Fiscal Years Ended September 30, 1994 and 1993 Net Income. Net income for fiscal 1994 was $10.8 million, or $1.25 per share, as compared with net income of $13.8 million, or $1.70 per share in fiscal 1993. The decrease in fiscal 1994 was primarily due to higher operating expenses in the Company's Florida operations associated with system growth, coupled with lower than anticipated operating margins in Florida due to slower than anticipated customer growth. Net income in fiscal 1994 was also adversely affected by higher interest expense and a $0.6 million net operating loss by PSGS as a result of its acquisition following the conclusion of the heating season. The PSGS Merger had a dilutive effect of $0.14 per share in fiscal 1994, including the effect of the issuance of 683,443 additional shares of NUI common stock for all the outstanding shares of PSGS. Partly offsetting these decreases was the reversal of approximately $1.8 million of income tax reserves. Net income per share in fiscal 1994 was also reduced as a result of other increases in the number of outstanding shares of NUI common stock as compared to the prior year. Operating Revenues and Operating Margins. The Company's operating revenues increased by $37.8 million, or 10%, in fiscal 1994 as compared with fiscal 1993. The increase principally reflects increases in the number of customers served, including the addition of PSGS in fiscal 1994, greater industrial demand and the effect of purchased gas adjustment clauses. The effect of weather in New Jersey contributed to higher revenues in fiscal 1994 as the weather was 5% colder than the prior year. The Company's total average number of customers served increased by 16,726, or 5%, including 12,996 heating customers. The addition of PSGS heating customers from the PSGS Merger did not have a significant impact on fiscal 1994's operating revenues and margins since PSGS was acquired after the heating season. Excluding customers acquired as a result of the PSGS Merger, the average number of customers increased approximately 2% in fiscal 1994. The Company's operating margins increased by $8.8 million, or 6%, in fiscal 1994 as compared with fiscal 1993. The increase principally reflects increases in the number of customers served. Operating margins in fiscal 1994 were not adjusted by the Company's weather normalization clauses as the weather fell within the normal range. Operating margins included $1.3 million in fiscal 1993 under weather normalization clauses as a result of the effects of warmer-than-normal weather. Other Operating Expenses. The Company's other operating expenses, excluding income taxes, increased by $14.3 million, or 14%, as compared with fiscal 1993. The increase was principally attributable to approximately $3.8 million of operating expenses from the addition of PSGS in fiscal 1994, $0.9 million of non-recurring charges related to the write-off of certain non-recoverable regulatory assets and certain restructuring costs in Florida, and increases in other operating expenses. The increase in other operating costs was due in part to higher costs associated with system growth, including the payroll and employee benefits costs attributable to a larger work force and depreciation due to additional utility plant in service. Increased operation and maintenance expenses were also the result of severe weather experienced in New Jersey during portions of fiscal 1994's heating season. The decrease in income taxes of $4.7 million for fiscal 1994 was due to the reversal of $1.8 million of income tax reserves no longer required as a result of management's review of necessary reserve levels, and lower pre-tax income. Interest Expense. Interest expense increased by $1.8 million in fiscal 1994 as compared with fiscal 1993, primarily due to higher outstanding borrowings. This increase was partially offset by decreased average interest rates due to the Company's August 1994 refinancing of $46.5 million of 11% and 11.25% Gas Facilities Revenue Bonds at an interest rate of 6.35%. Regulatory Matters Northern Division On November 4, 1994, the New Jersey Board of Public Utilities ("NJBPU") approved a petition filed by the Northern Division to reduce its annual purchased gas adjustment revenues by approximately $11.9 million. The decrease reflected the Company's projections for lower gas costs in fiscal 1995. The NJBPU also approved refunds of approximately $2.6 million, which were made in the first quarter of fiscal 1995, and $11.3 million, which were made in the third quarter of fiscal 1995, as a result of lower than projected gas prices paid in fiscal 1994 and fiscal 1995. On November 3, 1995, the NJBPU approved a petition to further reduce the amounts billed to customers by the Northern Division by approximately $13.7 million, and to refund to customers approximately $2.8 million, due to lower gas costs. None of such revenue reductions or refunds affect the operating margins of the Company. In December 1994, the NJBPU authorized new tariffs which are designed to provide for unbundling of natural gas transportation and sales service to Northern Division commercial and industrial customers (see "Outlook and Business Plan"). The new tariffs became effective on January 1, 1995 and are designed to be neutral as to the operating margins of the Company. Southern Division On November 29, 1994, the Florida Public Service Commission ("FPSC") voted to authorize the Company to increase its base rates in Florida by $1.6 million annually (the "FPSC Order"). The FPSC Order provides for a rate base amounting to approximately $82.6 million with an overall after-tax rate of return of 7.26%. In addition, the FPSC Order provides for several tariff changes designed to promote growth in developing markets for natural gas, and approved the deregulation of the Florida operation's leased appliance business which consists of leasing water heaters, clothes dryers and ranges to customers to promote natural gas usage in the residential market. On September 20, 1995, the North Carolina Utilities Commission approved a stipulation to increase the Company's base rates in North Carolina by $385,000 annually. The stipulation provides for a rate base amounting to approximately $11.9 million with an overall after-tax rate of return of 7.89%. The rate increase was effective in October 1995. Financing Activities and Resources The Company's net cash provided by operating activities was $47.9 million in fiscal 1995, $22.5 million in fiscal 1994 and $4.3 million in fiscal 1993. The improved cash flows for fiscal 1995 primarily reflect lower accounts receivable due to accelerated collections of budget billed customer accounts, lower gas costs and a lower level of payments in fiscal 1995 for New Jersey gross receipts and franchise taxes; the 1994 and 1993 New Jersey gross receipts and franchise tax payments included an additional amount representing almost a half year's liability as a result of a change in the payment schedule by the State. The increase in net cash provided by operating activities in fiscal 1994 as compared with fiscal 1993 was primarily attributable to the temporary over collection of gas costs and lower costs for fuel held in inventory. Because the Company's business is highly seasonal, short-term debt is used to meet seasonal working capital requirements. The Company also borrows under its bank lines of credit to finance portions of its capital expenditures, pending refinancing through the issuance of equity or long-term indebtedness at a later date depending upon prevailing market conditions. Short-Term Debt. The weighted average daily amounts outstanding of notes payable to banks and the weighted average interest rates on those amounts were $58 million at 5.9% in fiscal 1995, $82 million at 4.1% in fiscal 1994 and $53.9 million at 3.6% in fiscal 1993. The weighted average daily amounts of notes payable to banks decreased in fiscal 1995 primarily due to the issuance of $70 million of Medium-Term Notes, which were used to repay short-term debt, partially offset by borrowings to finance portions of the Company's construction expenditures and to complete an early redemption of the Company's First Mortgage Bonds. The weighted average daily amount of notes payable to banks increased in fiscal 1994 principally to finance portions of the Company's construction expenditures, primarily related to system growth in Florida, and the accelerated payment of New Jersey gross receipts and franchise taxes. At September 30, 1995, the Company had outstanding notes payable to banks amounting to $37.9 million and available unused lines of credit amounting to $120.1 million. Long-Term Debt and Funds for Construction Held by Trustee. In November 1994, the Company filed a shelf registration statement with the Securities and Exchange Commission for an aggregate of up to $100 million of debt and equity securities. On February 16, 1995, the Company issued $50 million aggregate principal amount of Medium-Term Notes, Series A, with a stated maturity date of February 1, 2005 and an interest rate of 8.35%. On May 25, 1995, the Company issued an additional $20 million of Medium-Term Notes, Series A, with a stated maturity date of August 1, 2002 and an interest rate of 7.125%. The net proceeds from these Medium-Term Notes were used to repay short-term debt. The Company anticipates issuing additional securities subject to the shelf registration from time to time, depending upon the Company's needs and prevailing market conditions. The Company intends to use the proceeds from any of these additional security issuances to discharge outstanding debt obligations of the Company, to finance the Company's capital expenditures and for general corporate purposes. The Company expects to issue in fiscal 1996 approximately $39 million of tax-exempt Gas Facilities Revenue Bonds for the purpose of financing the Northern Division's capital expenditure program. On July 17, 1995, the Company completed an early redemption of its remaining $8.7 million of First Mortgage Bonds. The bonds carried coupon rates of 8% and 8.5% and were redeemed with proceeds from short- term debt. On August 16, 1994, the Company issued $66.5 million of tax- exempt bonds in New Jersey and Florida. These issuances were comprised of $46.5 million of 6.35% Gas Facilities Refunding Revenue Bonds, due October 1, 2022, which replaced the same amount of outstanding debt bearing interest at 11% and 11.25%, and $20 million of 6.40% Gas Facilities Revenue Bonds, due October 1, 2024, which is being used to finance part of the Company's capital expenditure program in Florida. The Company deposits in trust the unexpended portion of the net proceeds from its Gas Facilities Revenue Bonds until drawn upon for eligible capital expenditures. As of September 30, 1995, the total unexpended portion of all of the Company's Gas Facilities Revenue Bonds was $13.6 million and is classified on the Company's consolidated balance sheet, including interest earned thereon, as funds for construction held by trustee. Common Stock. The Company periodically issues shares of common stock in connection with NUI Direct, the Company's dividend reinvestment and stock purchase plan, and various employee benefit plans. The proceeds from such issuances amounted to $1.0 million, $6.3 million and $4.2 million in fiscal 1995, 1994 and 1993, respectively, and were used primarily to reduce outstanding short-term debt. Effective in December 1994, these plans commenced purchasing shares on the open market to fulfill the plans' requirements, rather than purchasing the shares directly from the Company. Under the terms of NUI Direct, the Company may change the method of purchasing shares, no more frequently than every three months, from open market purchases to purchases directly from the Company, or vice versa; the method of purchasing shares may be changed no more frequently than every twelve months for the other plans. The Company plans to issue additional common stock in fiscal 1996 for the purpose of improving the Company's financial position by reducing outstanding debt and funding capital requirements. The issuance may be made under the Company's shelf registration statement (see "Long-Term Debt and Funds for Construction Held by Trustee") or it may be under a separate registration statement. Regulatory approval for such issuance, which is expected to be not more than two million shares, is required but has not yet been sought. On April 19, 1994, the Company issued 683,443 additional shares of NUI common stock in connection with the PSGS Merger (see Note 2 of the Notes to the Consolidated Financial Statements). Capital Expenditures and Commitments Capital expenditures, which consist primarily of expenditures to expand and upgrade the Company's gas distribution systems, were $37.9 million in fiscal 1995, $55.8 million in fiscal 1994 and $39.6 million in fiscal 1993. The Company's capital expenditures are expected to be approximately $42 million in fiscal 1996. The Company owns or previously owned six former manufactured gas plant ("MGP") sites in the Northern Division and ten MGP sites in the PSGS states. In order to quantify the potential future expenditures with respect to all of its MGP sites, the Company, with the aid of environmental consultants, regularly assesses the possible costs associated with conducting investigative activities at each of the Company's sites and implementing appropriate remedial actions, as well as the probability of whether such actions will be necessary. Based on the Company's most recent assessment, as of September 30, 1995 the Company has recorded a total reserve for probable environmental investigation and remediation costs of approximately $34 million, which the Company expects it will expend in the next twenty years to remediate 7 of the Company's 16 MGP sites. Of this reserve, approximately $30 million relates to Northern Division MGP sites and approximately $4 million relates to PSGS MGP sites. In addition to these probable costs, the Company believes that there may be up to an additional $21 million associated with conducting investigative activities and implementing remedial actions, if necessary, with respect to all of the Company's MGP sites during a future period of time that may range up to fifty years. Of this $21 million in possible future expenditures, approximately $10 million relates to the Northern Division MGP sites and approximately $11 million relates to the PSGS MGP sites. The Company believes that all costs associated with the Northern Division MGP sites will be recoverable in rates or from insurance carriers. With respect to costs which may be associated with the PSGS MGP sites, the Company intends to pursue recovery from ratepayers, former owners and operators of the sites and from insurance carriers. However, the Company is not able at this time to express a belief as to whether any or all of these recovery efforts related to PSGS MGP sites will ultimately be successful. For a further discussion of environmental matters, see Note 10 of the Notes to the Consolidated Financial Statements. Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $78 million annually. The Company currently recovers, and expects to continue to recover, such fixed charges through its purchased gas adjustment clauses. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 9 billion cubic feet per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations. The implementation of the Federal Energy Regulatory Commission's ("FERC") Order No. 636 required the restructuring of the Company's contracts with certain pipeline companies that together supply less than one-third of the Company's total firm gas supply. Under Order No. 636 the pipeline companies are passing through to their customers transition costs associated with mandated restructuring, such as costs resulting from buying out unmarketable gas purchase contracts. The Company has been charged approximately $7 million of such costs as of September 30, 1995, which the Company has been authorized to recover through its purchased gas adjustment clauses. The Company currently estimates that its remaining Order No. 636 transition obligation will be approximately $9.1 million which it expects to also recover through the Company's purchased gas adjustment clauses as these costs are incurred. This transition obligation is subject to possible future FERC actions based upon filings by the Company's pipeline suppliers. As of September 30, 1995, the scheduled repayments of the Company's long-term debt over the next five years were as follows: $0.1 million in both fiscal 1996 and 1997, $30.1 million in fiscal 1998 and $0.1 million in both fiscal 1999 and 2000. Outlook and Business Plan The natural gas distribution industry is undergoing significant changes. The sale of gas by utility companies to commercial and industrial customers has been "unbundled", or separated from the transportation service component, by several state regulatory commissions, including that in New Jersey. In these states, while the sale of the gas commodity to commercial and industrial customers is now fully competitive, the transportation service remains regulated as to price and returns and subject to various restrictions and franchise protections. It is anticipated that additional states will unbundle these services for commercial and industrial customers and that, in the near term, states will begin to unbundle these services for residential customers as well. Tariffs for transportation service have generally been designed to provide the same margins as bundled sales tariffs. Therefore, the Company is financially indifferent as to whether it transports gas, or sells gas and transportation together. Unbundling provides the Company with an opportunity to make additional margins by competing with unregulated marketers and brokers for sales of gas. The Company also faces the risk of loss of transportation service for large industrial customers which may have the ability to build connections to interstate gas pipelines and bypass the Company's distribution system. With the final implementation of FERC Order No. 636, the FERC is no longer discouraging such direct connections. Gas distributors can also expect increased competition from electricity as deregulation in that industry decreases prices and increases supply sources. Alternatively, opportunities may increase for gas service to fuel generators for large industrial customers, replacing electric utility service. The Company has taken several steps to address the risks and opportunities associated with these changes in the industry and to improve financial performance. The Company's subsidiary, Natural Gas Services, Inc. ("NGS"), was formed to take advantage of the deregulated commercial and industrial market through the sale of natural gas to these customers. The business generated to date has not been sufficient to cover its operating costs, and NGS is not expected to be profitable until fiscal 1997. The Company believes, however, that this business is important to the future success of the Company as the natural gas distribution industry deregulates, and it intends to continue to pursue this business line through NGS. The financial success of NGS or any other unregulated ventures, which are subject to competition, are likely to be more volatile than those of the regulated utility operations. During fiscal 1995, the Company restructured its operations in order to consolidate responsibilities and controls, thereby eliminating redundant functions throughout the Company. Part of this effort was achieved through an early retirement program. Overall, the work force of the Company has been reduced by 118 employees (or 10%) since its high of 1,197 in fiscal 1994. As part of this restructuring, the Southern Division was formed in fiscal 1995, combining management of City Gas Company of Florida and PSGS (see "Notes to the Consolidated Financial Statements - Note 3"). In fiscal 1995, the Company, along with seven other utility companies, formed the East Coast Natural Gas Cooperative LLC (the "Co- op"). The Co-op was formed with the goal of jointly managing certain portions of the members' gas supply portfolios, to increase reliability and reduce costs of service to customers, and to improve the competitive position of the member companies. While the Company has reduced its capital expenditures from $55.8 million in fiscal 1994 to $37.9 million in fiscal 1995, management expects capital expenditures to increase in the future as profitable investments arise. However, management believes that the Company's liquidity and borrowing capacity are stable and adequate to fund such expenditures. In addition to deregulation in the natural gas distribution industry, deregulation in all energy and utility markets is driving the goal of many companies to provide the broadest possible range of customer choices in products and services. The Company intends to pursue an expansion of the services which it provides to customers. Such services may include, among other things: gas-related services; electricity and other fuels; energy-related information services; and energy efficiency services. At the same time, the need to compete in deregulated energy markets has caused new combinations of utility and other energy-related companies with the goals of improving efficiency, improving access to new products and services, and increasing access to new markets and means of distribution. Regulatory constraints that have existed on utility combinations, due primarily to the Public Utility Holding Company Act ("PUHCA"), may be removed as Congress reviews PUHCA for possible reform or repeal. Management expects that the trend toward increasing business combinations, including mergers, joint ventures and alliances will continue. NUI may participate in one or more of such combinations, if the Company deems such actions consistent with its business plan. Effects of Inflation The Company's tariffs provide purchased gas adjustment clauses through which rates charged to customers are adjusted for changes in the cost of gas on a reasonably current basis. Increases in other utility costs and expenses not otherwise offset by increases in revenues or reductions in other expenses could have an adverse effect on earnings due to the time lag associated with obtaining regulatory approval to recover such increased costs and expenses, and the uncertainty of whether regulatory commissions will allow full recovery of such increased costs and expenses. Item 8. Financial Statements and Supplementary Data Consolidated financial statements of the Company as of September 30, 1995 and 1994 and for each of the three years in the period ended September 30, 1995, the auditors' report thereon, and the unaudited quarterly financial data for the two-year period ended September 30, 1995, are included herewith as indicated on "Index to Financial Statements and Schedule" on page F-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant Information concerning directors and officers of the Company is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. It is expected that such Proxy Statement will be filed with the Securities and Exchange Commission no later than January 28, 1996. Item 11. Executive Compensation Information concerning executive compensation is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. It is expected that such Proxy Statement will be filed with the Securities and Exchange Commission no later than January 28, 1996. Item 12. Security Ownership of Certain Beneficial Owners and Management Information concerning security ownership of certain beneficial owners and management is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. It is expected that such Proxy Statement will be filed with the Securities and Exchange Commission no later than January 28, 1996. Item 13. Certain Relationships and Related Transactions Information concerning certain relationships and related transactions is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. It is expected that such Proxy Statement will be filed with the Securities and Exchange Commission no later than January 28, 1996. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (1) Consolidated financial statements of the Company as of September 30, 1994 and 1993 and for each of the three years in the period ended September 30, 1995 and the auditors' report thereon, and the unaudited quarterly financial data for the two-year period ended September 30, 1995 are included herewith as indicated on the "Index to Financial Statement and Schedule" on page F-1. (2) The applicable financial statement schedule for the fiscal years 1995, 1994 and 1993 is included herewith as indicated on the "Index to Financial Statements and Schedule" on page F-1. (3) Exhibits: Exhibit No. Description Reference 2(i) Letter Agreement, dated June Incorporated by 29, 1993, by and between NUI reference to Exhibit Corporation and Pennsylvania & 2(i) to Registration Southern Gas Company Statement No. 33-50561 2(ii) Agreement and Plan of Merger, dated as of July 27, 1993, by Incorporated by and between NUI Corporation reference to Exhibit and Pennsylvania & Southern 2(ii) to Registration Gas Company Statement No. 33-50561 3(i) Certificate of Incorporation, Filed herewith amended and restated as of December 1, 1995 3(ii) By-Laws, amended and restated Filed herewith as of October 24, 1995 10(i) Service Agreement by and Incorporated by between Transcontinental Gas reference to Exhibit Pipe Line Corporation and 10(i) to Registration Elizabethtown Gas Company Statement No. 33-50561 ("EGC"), dated February 1, 1992 10(ii) Service Agreement under Rate Incorporated by Schedule GSS by and between reference to Exhibit Transcontinental Gas Pipe Line 10(ii) to Registration Corporation and EGC, dated May Statement No. 33-50561 3, 1972 10(iii) Service Agreement under Rate Incorporated by Schedule LG-A by and between reference to Exhibit Transcontinental Gas Pipe Line 10(iii) to Registration Corporation and EGC, dated Statement No. 33-50561 January 12, 1971 10(iv) Service Agreement by and Incorporated by between Transcontinental Gas reference to Exhibit Pipe Line Corporation and EGC, 10(iv) to Registration dated November 1, 1991 Statement No. 33-50561 Exhibit No. Description Reference 10(v) Service Agreement for Storage Incorporated by Gas by and between reference to Exhibit Transcontinental Gas Pipe Line 10(v) to NUI's Form 10-k Corporation and EGC, dated Report for Fiscal 1994 November 1, 1994 10(vi) Firm Gas Transportation Incorporated by Agreement by and among reference to Exhibit Transcontinental Gas Pipe Line 10(vi) to Registration Corporation, EGC and National Statement No. 33-50561 Fuel Gas Supply Corporation, dated November 1, 1984 10(vii) Gas Transportation Agreement Incorporated by by and among Transcontinental reference to Exhibit Gas Pipe Line Corporation and 10(vii) to Registration EGC, dated February 4, 1991 Statement No. 33-50561 10(viii) Service Agreement for Rate Incorporated by Schedule CDS by and between reference to Exhibit Texas Eastern Transmission 10(viii) to NUI's Form Corporation and EGC, dated 10-K Report for Fiscal December 1, 1993 1994 10(ix) Service Agreement under Rate Schedule FTS-7 by and between Incorporated by Texas Eastern Transmission reference to Exhibit Corporation and EGC, dated 10(ix) to NUI's Form 10- October 25, 1994 K Report for Fiscal 1994 10(x) Service Agreement for Rate Schedule FTS-5 by and between Incorporated by Texas Eastern Transmission reference to Exhibit Corporation and EGC, dated 10(x) to Registration June 1, 1993 Statement No. 33-50561 10(xi) Service Agreement under Rate Schedule FTS-8 by and between Incorporated by Texas Eastern Transmission reference to Exhibit Corporation and EGC, dated 10(xi) to NUI's Form 10- June 28, 1994 K Report for Fiscal 1994 10(xii) Service Agreement for Rate Schedule FTS-5 by and between Incorporated by Texas Eastern Transmission reference to Exhibit Corporation and EGC, dated 10(xii) to Registration June 1, 1993 Statement No. 33-50561 10(xiii) Service Agreement for Rate Schedule FTS-2 by and between Incorporated by Texas Eastern Transmission reference to Exhibit Corporation and EGC, dated 10(xiii) to Registration June 1, 1993 Statement No. 33-50561 10(xiv) Service Agreement under NTS Incorporated by Rate Schedule by and between reference to Exhibit Columbia Gas Transmission 10(xiv) to NUI's Form Corporation and EGC, dated 10-K Report for Fiscal November 1, 1993 1993 Exhibit No. Description Reference 10(xv) Service Agreement under SST Incorporated by Rate Schedule by and between reference to Exhibit Columbia Gas Transmission 10(xv) to NUI's Form 10- Corporation and EGC, dated K Report for Fiscal 1993 November 1, 1993 10(xvi) Service Agreement under FTS Incorporated by Rate Schedule by and between reference to Exhibit Columbia Gas Transmission 10(xvi) to NUI's Form Corporation and EGC, dated 10-K Report for Fiscal November 1, 1993 1993 10(xvii) Gas Transportation Agreement Incorporated by under FT-G Rate Schedule by reference to Exhibit and between Tennessee Gas 10(xvii) to NUI's Form Pipeline Company and EGC 10-K Report for Fiscal (Contract #597), dated 1993 September 1, 1993 10(xviii) Gas Transportation Agreement Incorporated by under FT-G Rate Schedule by reference to Exhibit and between Tennessee Gas 10(xviii) to NUI's Form Pipeline Company and EGC 10-K Report for Fiscal (Contract #603), dated 1993 September 1, 1993 10(xix) Gas Transportation Agreement Incorporated by by and between Tennessee Gas reference to Exhibit Pipeline Company and EGC, 10(xvii) to Registration dated March 30, 1993 Statement No. 33-50561 10(xx) Firm Transportation Service Incorporated by Agreement under FTS-1 Rate reference to Exhibit Schedule by and between City 10(xx) of NUI's Form 10- Gas and Florida Gas K Report for Fiscal 1993 Transmission dated October 1, 1993 10(xxi) Lease Agreement between EGC Incorporated by and Liberty Hall Joint reference to Exhibit Venture, dated August 17, 1987 10(vi) of EGC's Form 10-K Report for Fiscal 1987 10(xxii) 1988 Stock Plan Incorporated by reference to Exhibit 10(viii) to Registration Statement No. 33-21525 10(xxii) First Amendment to 1988 Stock Incorporated by Plan reference to Exhibit 10(xxxiii) to Registration Statement No. 33-46162 10(xxiii) Form of Termination of Employment and Change in Control Agreements Filed herewith Exhibit No. Description Reference 10(xxiv) Firm Transportation Service Incorporated by Agreement under FTS-2 Rate reference to Exhibit Schedule by and between City 10(xxiv) of NUI's Form Gas and Florida Gas 10-K Report for Fiscal Transmission, dated December 1994 12, 1991 and Amendment dated November 12, 1993 10(xxv) Service Agreement under Rate Incorporated by Schedule LG-A by and between reference to Exhibit Transcontinental Gas Pipeline 10(xxv) of NUI's Form and North Carolina Gas Service 10-K Report for Fiscal Division of Pennsylvania & 1994 Southern Gas Company, dated August 5, 1971 10(xxvi) Service Agreement under Rate Incorporated by Schedule GSS by and between reference to Exhibit Transcontinental Gas Pipeline 10(xxvi) of NUI's Form and North Carolina Gas Service 10-K Report for Fiscal Division of Pennsylvania & 1994 Southern Gas Company, dated April 13, 1974 10(xxvii) Service Agreement under Rate Incorporated by Schedule FS by and between reference to Exhibit Transcontinental Gas Pipeline 10(xxvii) of NUI's Form and North Carolina Gas Service 10-K Report for Fiscal Division of Pennsylvania & 1994 Southern Gas Company, dated August 1, 1991 10(xxviii) Service Agreement under Rate Incorporated by Schedule FT by and between reference to Exhibit Transcontinental Gas Pipeline 10(xxviii) of NUI's Form and North Carolina Gas Service 10-K Report for Fiscal Division of Pennsylvania & 1994 Southern Gas Company, dated February 1, 1992 10(xxix) Gas Sales and Purchase Incorporated by Agreement by and between reference to Exhibit Texaco Gas Marketing, Inc. and 10(xxix) of NUI's Form Pennsylvania & Southern Gas 10-K Report for Fiscal Company, dated November 1, 1994 1991 10(xxx) Gas Storage Contract under Incorporated by Rate Schedule FS by and reference to Exhibit between Tennessee Gas Pipeline 10(xxx) of NUI's Form Company and Pennsylvania & 10-K Report for Fiscal Southern Gas Company, dated 1994 September 1, 1993 Exhibit No. Description Reference 10(xxxi) Gas Transportation Agreement Incorporated by under Rate Schedule FT-A by reference to Exhibit and between Tennessee Gas 10(xxxi) of NUI's Form Pipeline Co. and Pennsylvania 10-K Report for Fiscal & Southern Gas Company, dated 1994 September 1, 1993 (Contract #935) 10(xxxii) Gas Transportation Agreement Incorporated by under Rate Schedule FT-A by reference to Exhibit and between Tennessee Gas 10(xxxii) of NUI's Form Pipeline Co. and Pennsylvania 10-K Report for Fiscal & Southern Gas Company, dated 1994 September 1, 1993 (Contract #936) 10(xxxiii) Gas Transportation Agreement Incorporated by under Rate Schedule FT-A by reference to Exhibit and between Tennessee Gas 10(xxxiii) of NUI's Form Pipeline Co. and Pennsylvania 10-K Report for Fiscal & Southern Gas Company, dated 1994 September 1, 1993 (Contract #959) 10(xxxiv) Gas Transportation Agreement Incorporated by under Rate Schedule FT-A by reference to Exhibit and between Tennessee Gas 10(xxxiv) of NUI's Form Pipeline Co. and Pennsylvania 10-K Report for Fiscal & Southern Gas Company, dated 1994 September 1, 1993 (Contract #2157) 10(xxxv) Employment Agreement, dated as Incorporated by of July 29, 1988, between NUI reference to Exhibit Corporation and Jack Langer 10(xxxv) of NUI's Form 10-K Report for Fiscal 1994 10(xxxvi) Service Agreement for Rate Filed herewith Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0431) dated April 1, 1995 10(xxxvii) Service Agreement for Rate Filed herewith Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0445) dated April 1, 1995 10(xxxviii) Service Agreement for Rate Filed herewith Schedule SS-1 by and between Texas Eastern Transmission Corporation and EGC (Contract (#400196) dated September 23, 1994 Exhibit No. Description Reference 10(xxxix) Gas Storage Agreement under Filed herewith Rate Schedule FS by and between Tennessee Gas Pipeline Company and EGC (Contract #8703) dated November 1, 1994 10(xl) Consulting Agreement, dated as Filed herewith of March 24, 1995, between NUI Corporation and John Kean 10(xli) Form of Deferred Compensation Filed herewith Agreement 21 Subsidiaries of NUI Filed herewith Corporation 23 Consent of Independent Public Filed herewith Accountants 27 Financial Data Schedule Filed herewith Exhibits listed above which have heretofore been filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, and which were designated as noted above and have not been amended, are hereby incorporated by reference and made a part hereof with the same effect as if filed herewith. The Company is a party to various agreements with respect to long-term indebtedness to which the total amount of indebtedness authorized under each agreement, respectively, does not exceed 10% of the total assets of the Company on a consolidated basis. The Company hereby agrees to furnish to the Securities and Exchange Commission copies of such agreements upon request. (b) Reports on Form 8-K: On October 24, 1995, the Company filed a Form 8-K, Item 5, Other Events, reporting an amendment to the Company's By-Laws. On December 1, 1995, the Company filed a Form 8-K, Item 5, Other Events, reporting the establishment of a Shareholder Rights Plan. INDEX TO FINANCIAL STATEMENTS AND SCHEDULE Consolidated Financial Statements of NUI Corporation and Subsidiaries: Report of Independent Public Accountants . . . . . F-2 Consolidated Financial Statements as of September 30, 1995 and 1994 and for Each of the Three Years in the Period Ended September 30, 1995 . . . . . . . . . . . . . F-3 Unaudited Quarterly Financial Data for the Two-Year Period Ended September 30, 1995 (Note 11 of the Notes to the Company's Consolidated Financial Statements) . . . . . . . . . . . . . . . F-18 Financial Statement Schedule of NUI Corporation and Subsidiaries: Report of Independent Public Accountants . . . . . F-2 Schedule II -- Valuation and Qualifying Accounts for Each of the Three Years in the Period Ended September 30, 1995 . . . . . . . . . . F-20 All other schedules are omitted because they are not required, are inapplicable or the information is otherwise shown in the financial statements or notes thereto. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To NUI Corporation: We have audited the accompanying consolidated balance sheet and consolidated statement of capitalization of NUI Corporation (a New Jersey corporation) and subsidiaries (the "Company") as of September 30, 1995 and 1994, and the related consolidated statements of income, cash flows and shareholders' equity, for each of the three years in the period ended September 30, 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects, the financial position of NUI Corporation and subsidiaries as of September 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1995, in conformity with generally accepted accounting principles. As discussed in Notes 1 and 9 to the consolidated financial statements, effective October 1, 1993, the Company changed its method of accounting for income taxes and other postretirement benefits. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14(a)(2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP New York, New York November 14, 1995 NUI Corporation and Subsidiaries Consolidated Statement of Income (Dollars in thousands, except per share amounts) Years Ended September 30, 1995 1994 1993 Operating Margins Operating revenues $376,445 $405,240 $367,456 Less- Purchased gas and fuel 189,510 223,421 195,842 Gross receipts and 33,669 37,173 35,753 franchise taxes ------- ------- ------- 153,266 144,646 135,861 ------- ------- ------- Other Operating Expenses Operations and maintenance 90,523 90,904 80,865 Depreciation and amortization 19,750 17,446 15,082 Restructuring and other non- recurring charges 8,591 923 -- Other taxes 7,657 7,435 6,428 Income taxes 2,886 2,098 6,762 ------- ------- ------- 129,407 118,806 109,137 ------- ------- ------- Operating Income 23,859 25,840 26,724 ------- ------- ------- Other Income and Expense, Net 439 506 854 ------- ------- ------- Interest Expense 18,781 15,566 13,768 ------- ------- ------- Net Income $ 5,517 $ 10,780 $ 13,810 ======= ======= ======= Net Income Per Share of Common Stock $ .60 $ 1.25 $ 1.70 ======= ======= ======= Dividends Per Share of Common Stock $ .90 $ 1.60 $ 1.59 ======= ======= ======= Weighted Average Number of Shares of Common Stock Outstanding 9,152,837 8,617,790 8,124,065 See the notes to the consolidated financial statements. NUI Corporation and Subsidiaries Consolidated Balance Sheet (Dollars in thousands) September 30, 1995 1994 ASSETS Utility Plant Utility plant, at original cost $597,360 $566,982 Accumulated depreciation and amortization (184,558) (173,894) Unamortized plant acquisition adjustments 35,269 33,604 ------- ------- 448,071 426,692 ------- ------- Funds for Construction Held by Trustee 14,405 26,906 ------- ------- Investments in Marketable Securities 2,723 3,468 ------- ------- Current Assets Cash and cash equivalents 3,601 5,637 Accounts receivable (less allowance for doubtful accounts of $1,689 in 1995 and $1,368 in 1994) 30,293 38,216 Fuel inventories, at average cost 27,629 28,616 Prepayments and other 20,007 13,435 ------- ------- 81,530 85,904 ------- ------- Other Assets Regulatory assets 54,374 47,830 Deferred charges 9,062 10,848 ------- ------- 63,436 58,678 ------- ------- $610,165 $601,648 ======= ======= CAPITALIZATION AND LIABILITIES Capitalization (See accompanying statements) Common shareholders' equity $140,912 $142,768 Preferred stock -- -- Long-term debt 222,060 160,928 ------- ------- 362,972 303,696 ------- ------- Capital Lease Obligations 11,114 11,932 ------- ------- Current Liabilities Current portion of long-term debt and capital lease obligations 1,759 2,761 Notes payable to banks 37,935 110,125 Accounts payable, customer deposits and accrued liabilities 63,665 52,721 General taxes 3,054 1,925 Federal income taxes 4,664 6,079 ------- ------- 111,077 173,611 ------- ------- Other Liabilities Deferred Federal income taxes 51,946 50,066 Unamortized investment tax credits 7,102 7,570 Environmental remediation reserve 33,981 32,181 Regulatory and other liabilities 31,973 22,592 ------- ------- 125,002 112,409 ------- ------- $610,165 $601,648 ======= ======= See the notes to the consolidated financial statements. NUI Corporation and Subsidiaries Consolidated Statement of Cash Flows (Dollars in thousands)
Years Ended September 30, 1995 1994 1993 Operating Activities Net income $ 5,517 $ 10,780 $ 13,810 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,932 18,773 16,346 Deferred Federal income taxes 2,005 6,893 8,726 Non-cash portion of restructuring and other non-recurring charges 4,913 683 -- Amortization of deferred investment tax credits (468) (476) (461) Other 4,626 2,926 4,162 Effect of changes in: Accounts receivable, net 7,923 (5,724) (152) Fuel inventories 987 (193) (7,872) Accounts payable, deposits and accruals 10,724 6,959 (10,043) Gross receipts and franchise taxes (4,152) (11,112) (14,262) Other (5,088) ( 6,986) (5,988) ------ ------ ------ Net cash provided by operating activities 47,919 22,523 4,266 ------ ------ ------ Financing Activities Proceeds from sales of common stock 1,045 6,323 4,177 Purchases of treasury stock (468) -- -- Dividends to shareholders (8,296) (13,836) (12,905) Proceeds from issuance of long-term debt 70,000 66,500 30,000 Funds for construction held by trustee, net 10,125 (2,093) 11,015 Repayments of long-term debt (9,902) (54,159) (22,734) Principal payments under capital lease obligations (1,844) (2,055) (1,874) Net short-term (repayments) borrowings (72,190) 33,893 22,950 ------ ------ ------ Net cash (used for) provided by financing activities (11,530) 34,573 30,629 ------ ------ ------ Investing Activities Cash expenditures for utility plant (37,976) (53,601) (35,442) Proceeds from sales of marketable securities 1,199 659 56 Proceeds from sale of assets -- 1,610 -- Other (1,648) (2,000) (1,123) ------ ------ ------ Net cash (used for) investing activities (38,425) (53,332) (36,509) ------ ------ ------ Net Increase (Decrease) in Cash and Cash Equivalents $ (2,036) $3,764 $(1,614) ====== ===== ====== Cash and Cash Equivalents At beginning of period $ 5,637 $ 1,873 $ 3,487 At end of period 3,601 5,637 1,873 Supplemental Disclosures of Cash Flows Income taxes paid (refunds received), net $(1,129) $ 666 $ 2,377 Interest paid 17,436 17,597 15,135
See the notes to the consolidated financial statements. NUI Corporation and Subsidiaries Consolidated Statement of Capitalization (Dollars in thousands)
September 30, Long-Term Debt Gas facilities revenue bonds 6.625% due October 1, 2021* $ 8,400 $ 8,400 6.75% due October 1, 2021* 46,200 46,200 6.35% due October 1, 2022 46,500 46,500 6.40% due October 1, 2024* 20,000 20,000 First mortgage bonds 8% due April 1, 1997 -- 2,500 8.5% due May 1, 2002 -- 7,273 Medium-term notes 7.125% due August 1, 2002 20,000 -- 8.35% due February 1, 2005 50,000 -- Credit agreement indebtedness 30,000 30,000 ESOP indebtedness, 6% due May 31, 2002 1,088 1,217 ------ ------ 222,188 162,090 Current portion of long-term debt (128) (1,162) ------ ------ 222,060 160,928 Preferred Stock, 5,000,000 shares authorized; none issued -- -- Common Shareholders' Equity Common Stock, no par value; shares authorized: 30,000,000; shares outstanding: 9,201,237 in 1995 and 9,157,095 in 1994 139,093 138,082 Shares held in treasury (1,265) ( 797) Retained earnings 3,921 6,700 Valuation of marketable securities 232 -- Unearned employee compensation - ESOP (1,069) (1,217) ------ ------ 140,912 142,768 ------- ------- Total Capitalization $362,972 $303,696 ======= ======= * The total unexpended portion of the net proceeds from these bonds, amounting to $13.6 million and $23.7 million as of September 30, 1995 and September 30, 1994, respectively, is carried on the Company's consolidated balance sheet as funds for construction held by trustee, including interest earned thereon, until drawn upon for eligible construction expenditures.
See the notes to the consolidated financial statements. NUI Corporation and Subsidiaries Consolidated Statement of Shareholders' Equity
(Dollars in thousands) Unrealized Unearned Common Stock Gain (Loss)- Employee Shares Paid-in Held in Retained Marketable Compensation- Outstanding Amount Treasury Earnings Securities ESOP Total Balance, September 30, 1992 8,035,910 $110,718 $(797) $ 8,675 $(205) $(1,458) $116,933 Common stock issued* 165,186 4,177 4,177 Net income 13,810 13,810 Cash dividends (12,905) (12,905) Unrealized gain 112 112 ESOP transactions 138 119 257 --------- ------- ---- ------ ---- ----- ------- Balance, September 30, 1993 8,201,096 114,895 (797) 9,718 (93) (1,339) 122,384 Common stock issued PSGS acquisition 683,443 16,864 16,864 Other* 272,556 6,323 6,323 Net income 10,780 10,780 Cash dividends (13,836) (13,836) Unrealized gain 93 93 ESOP transactions 38 122 160 --------- ------- ---- ------ --- ----- ------- Balance, September 30, 1994 9,157,095 138,082 (797) 6,700 -- (1,217) 142,768 Common stock issued* 74,499 1,045 1,045 Treasury stock purchased (30,357) (468) (468) Net income 5,517 5,517 Cash dividends (8,296) (8,296) Unrealized gain 232 232 ESOP transactions (34) 148 114 --------- ------- ---- ----- --- ----- ------- Balance, September 30, 1995 9,201,237 $139,093 $(1,265) $ 3,921 $232 $ (1,069) $140,912 ========= ======= ===== ====== === ===== ======= * Represents common stock issued in connection with NUI Direct and various employee benefit plans.
See the notes to the consolidated financial statements. NUI Corporation and Subsidiaries Notes to the Consolidated Financial Statements 1. Summary of Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include all operating divisions and subsidiaries of NUI Corporation (collectively referred to as "NUI" or the "Company"). The Company, through its Northern and Southern Divisions, has utility operations in six states. The Northern Division operates in New Jersey as Elizabethtown Gas Company. The Southern Division was formed effective April 1, 1995 through the consolidation of the Company's City Gas Company of Florida ("CGF") and Pennsylvania & Southern Gas Company ("PSGS") operations (see Note 3). PSGS, which has operations in North Carolina, Maryland, Pennsylvania and New York, was acquired on April 19, 1994. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation. Regulation. The Company is subject to regulation as an operating utility by the public utility commissions of the states in which it operates. Utility Plant. Utility plant is stated at its original cost. Depreciation is provided on a straight-line basis over the remaining estimated lives of depreciable property by applying composite average annual rates as approved by the state commissions. The composite average annual depreciation rate was 3.2% in fiscal 1995 and 3.1% in both fiscal years 1994 and 1993. At the time properties are retired, the original cost plus the cost of retirement, less salvage, is charged to accumulated depreciation. Repairs of all utility plant and replacements and renewals of minor items of property are charged to maintenance expense as incurred. The unamortized plant acquisition adjustments represent the remaining portion of the excess of the purchase price over the book value of net assets acquired. The excess is being amortized on a straight-line basis over thirty years from the date of acquisition. The results of operations of acquired entities have been included in the accompanying consolidated financial statements for the periods subsequent to their acquisition. Operating Revenues and Purchased Gas and Fuel Costs. Operating revenues include accrued unbilled revenues through the end of each accounting period. Operating revenues also reflect adjustments attributable to weather normalization clauses that are accrued during the winter heating season and billed or credited to customers in the following year. Costs of purchased gas and fuel are recognized as expenses in accordance with the purchased gas adjustment clause applicable in each state. Such clauses provide for periodic reconciliations of actual recoverable gas costs and the estimated amounts that have been billed to customers. Under or over recoveries are deferred when they arise and are recovered from or refunded to customers in subsequent periods. Restricted Cash. In accordance with certain regulatory requirements in North Carolina, the Company is required to deposit pipeline supplier refunds in an interest-bearing account. These funds, including interest earned thereon, amounted to approximately $0.9 million as of September 30, 1995 and are restricted for uses as prescribed by North Carolina regulatory authorities. This balance is classified in the Company's consolidated balance sheet in deferred charges with a corresponding amount included in other liabilities. Income Taxes. In fiscal 1994, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"), which requires the liability method to be used to account for deferred income taxes. Under this method, deferred income taxes related to tax and accounting basis differences are recognized at the statutory income tax rates in effect when the tax is expected to be paid. The adoption of SFAS 109 did not have a material impact on consolidated net income because deferred taxes previously not provided are recoverable from or payable to customers through future rates as taxes come due and, accordingly, a net regulatory liability of approximately $3.4 million was recorded. Investment tax credits, which were generated principally in connection with additions to utility plant made prior to January 1, 1986, are being amortized over the estimated service lives of the properties that gave rise to the credits. Regulatory Assets and Liabilities. The Company's utility operations follow the accounting for regulated enterprises prescribed by Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" ("SFAS 71"). In general, SFAS 71 requires deferral of certain costs and obligations, based upon orders received from regulators, to be recovered from or refunded to customers in future periods. The following represents the Company's regulatory assets and liabilities deferred in the accompanying consolidated balance sheet as of September 30, 1995 and 1994: 1995 1994 Regulatory Assets Environmental investigation and remediation costs $32,967 $32,141 Unrecovered gas costs 9,675 5,398 Postretirement benefits other than pensions 5,194 2,455 Deferred piping allowances 3,249 3,066 Other 3,289 4,770 ------ ------ $54,374 $47,830 ====== ====== Regulatory Liabilities Net overcollection of income taxes $ 5,365 $ 4,135 Gas supplier refunds 1,387 1,383 Other 222 230 ------ ------ $ 6,974 $ 5,748 ====== ====== Although the gas distribution industry is becoming increasingly competitive, the Company's utility operations continue to recover their costs through cost-based rates established by the public utility commissions. As a result, the Company believes that the accounting prescribed under SFAS 71 remains appropriate. Cash Equivalents. Cash equivalents consist of a money market account which invests in securities with original maturities of three months or less. Net Income Per Share of Common Stock. Net income per share of common stock is based on the weighted average number of shares of NUI common stock outstanding. The assumed exercise of outstanding employee stock options would not have a dilutive effect on net income per share of common stock. New Accounting Standard. The Company is required to adopt Statement of Financial Accounting Standards No. 121 ("SFAS 121") in fiscal 1996. SFAS 121 establishes accounting standards for the impairment of long-lived assets. The adoption of this statement is not expected to have a material impact on the Company's financial condition or results of operations. 2. Acquisition of Pennsylvania & Southern Gas Company On April 19, 1994, the Company issued and exchanged 683,443 shares of NUI common stock for all of the outstanding common shares of PSGS pursuant to the merger of PSGS with and into NUI (the "PSGS Merger"). The transaction was valued at approximately $17 million. Upon consummation of the PSGS Merger, the Company's principal operating utility, Elizabethtown Gas Company, was merged with and into NUI. PSGS operates as part of the Southern Division of NUI. The PSGS Merger was accounted for as a purchase in accordance with generally accepted accounting principles and the results of operations of PSGS have been consolidated with those of NUI as of April 19, 1994. Due to the effects of the regulatory process, the underlying net assets of PSGS have been recorded at their historical net book value. The excess of the purchase price over the historical net book value of the underlying net assets of PSGS is included in utility plant as a "plant acquisition adjustment" and is being amortized over a thirty year period. On September 30, 1994, NUI sold its PSGS propane assets. The excess of the purchase price over the net book value of the propane assets sold reduced the plant acquisition adjustment by approximately $1.4 million. As discussed further in Note 10, the Company, in connection with the PSGS Merger, acquired former manufactured gas plant facilities. No provision for environmental remediation had been made by PSGS in its financial statements prior to the PSGS Merger. As of September 30, 1995, the Company has recorded $3.7 million additional plant acquisition adjustment to provide for probable environmental remediation liabilities, of which $1.8 million was recorded during fiscal 1995. 3. Restructuring and Other Non-Recurring Charges In fiscal 1995, the Company incurred approximately $8.6 million of non-recurring charges for, among other things, the implementation of an early retirement program and the consolidation of its Florida and PSGS operations. In November 1994, the Company offered an early retirement program to certain employees. The program, which became effective on April 1, 1995, was accepted by 95 of the eligible 112 employees. In accordance with Statement of Financial Accounting Standards No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits", the Company recorded a special termination charge of approximately $4.1 million. In addition, the Company recorded approximately $0.8 million of other benefit expenses associated with these employees. The Company also deferred, pending regulatory recovery, a charge of approximately $0.6 million for special termination benefits. Effective April 1, 1995, the Company consolidated its Florida and PSGS divisions to form a new NUI Southern Division. The Southern Division is headquartered in Hialeah, Florida. As a result, PSGS headquarters in Sayre, Pennsylvania will be closed by December 31, 1995. The Company incurred a charge of approximately $2.6 million for severance and other expenses associated with the consolidation of the two divisions. In addition, during fiscal 1995, the Company incurred a charge of approximately $0.8 million to write down certain regulatory assets as a result of the November 1994 settlement of the Company's Florida rate case. The Company also incurred approximately $0.9 million of non-recurring charges in fiscal 1994 related to the write-down of certain non- recoverable regulatory assets and for certain restructuring costs in Florida. 4. Capitalization Long-Term Debt. On February 16, 1995, the Company issued $50 million aggregate principal amount of Medium-Term Notes, Series A, with a stated maturity date of February 1, 2005 and an interest rate of 8.35%. On May 25, 1995, the Company issued an additional $20 million of Medium-Term Notes, Series A, with a stated maturity date of August 1, 2002 and an interest rate of 7.125%. The net proceeds from these Medium-Term Notes were used to repay short-term debt. On July 17, 1995, the Company completed an early redemption of its remaining $8.7 million of First Mortgage Bonds. The bonds carried coupon rates of 8% and 8.5% and were redeemed with proceeds from short-term debt. On August 16, 1994, the Company issued $66.5 million of tax-exempt bonds in New Jersey and Florida. These issuances were comprised of $46.5 million of 6.35% Gas Facilities Refunding Revenue Bonds, due October 1, 2022, which replaced the same amount of outstanding debt bearing interest at 11% and 11.25%, and $20 million of 6.40% Gas Facilities Revenue Bonds, due October 1, 2024, which is being used to finance part of the Company's capital expenditure program in Florida. The Company deposits in trust the unexpended portion of the net proceeds from its Gas Facilities Revenue Bonds until drawn upon for eligible expenditures. As of September 30, 1995, the total unexpended portion of all of the Company's Gas Facilities Revenue Bonds was $13.6 million and is classified on the Company's consolidated balance sheet, including interest earned thereon, as funds for construction held by trustee. As of September 30, 1995, the scheduled repayments of the Company's long-term debt over the next five years were as follows: $0.1 million in both fiscal 1996 and 1997, $30.1 million in fiscal 1998 and $0.1 million in both fiscal 1999 and 2000. Preferred Stock. The Company has 5,000,000 shares of authorized but unissued preferred stock. Shareholder Rights Plan. In November 1995, the Company's Board of Directors adopted a Shareholder Rights Plan under which shareholders of NUI common stock were issued as a dividend one right to buy one one- hundredth of a share of Series A Junior Participating Preferred Stock at a purchase price of $50 ("Right") for each share of common stock held. The Rights initially attach to the shares of NUI common stock and can be exercised or transferred only if a person or group (an "Acquirer"), with certain exceptions, acquires, or commences a tender offer to acquire, beneficial ownership of 15% or more of NUI common stock. Each Right, except those held by the Acquirer, may be used by the non-aquiring shareholders to purchase, at the Right's exercise price, shares of NUI common stock having a market value equivalent to twice the Right's exercise price, thus substantially reducing the Acquirer's ownership percentage. The Company may redeem the Rights at $0.001 per Right at any time prior to the occurrence of any such event. All Rights expire on November 27, 2005. Common Stock. As discussed in Note 2, the Company issued 683,443 shares of NUI common stock in connection with the acquisition of PSGS on April 19, 1994. The Company periodically issues shares of common stock in connection with NUI Direct, the Company's dividend reinvestment and stock purchase plan, and various employee benefit plans. Effective in December 1994, these common stock plans commenced purchasing shares on the open market to fulfill the plans' requirements rather than purchasing the shares directly from the Company. Under the terms of NUI Direct, the Company may change the method of purchasing shares, no more frequently than every three months, from open market purchases to purchases directly from the Company, or vice versa; the method of purchasing shares may be changed no more frequently than once every twelve months for the other plans. At September 30, 1995, shares reserved for issuance under these plans were: NUI Direct, 202,325; Savings and Investment Plan, 325,769 and the 1988 Stock Plan, 5,397. Stock Plans. The Company's Board of Directors believes that both directors' and management's interest should be closely aligned with that of shareholders. As a result, under the 1988 Stock Plan, the Company has a long-term compensation program for directors, executive officers and key employees involving shares of NUI common stock. Each non-employee director of the Company earns an annual retainer fee that consists of a deferred grant of shares of NUI common stock. As of September 30, 1995, such retainer fee was equivalent to a fair market value of $12,000 on the date of grant. In addition, non-employee directors who also chair committees of the Board receive additional deferred grants with a fair market value of $2,500 on the date of grant. Deferred stock grants are increased on each common stock dividend payment date by an amount equal to the number of shares of NUI common stock which would have been purchased had all deferred stock grants been issued and the dividends reinvested in additional shares. As of September 30, 1995, the total deferred grants for non-employee directors were 21,096 shares of NUI common stock, an increase of 7,084 shares during fiscal 1995. Shares granted as long-term compensation for executive officers and key employees amounted to 17,620 shares in fiscal 1995, 15,730 shares in fiscal 1994 and 18,300 shares in fiscal 1993. As of September 30, 1995, a total of 32,350 shares of restricted stock that have been granted as long-term compensation are subject to future vesting requirements, and are restricted from resale. Executive officers and key employees are eligible to be granted options for the purchase of NUI common stock at prices equal to the market price per share on the date of grant. The option must be exercised within ten years from the date of grant. Transactions during the last three fiscal years involving stock options were as follows: Number of Option Price Shares per share Options outstanding and exercisable at September 30, 1992 22,450 $14.42-$17.625 Fiscal 1993 Exercised (6,000) $14.42-$15.77 Fiscal 1994 Exercised (2,300) $14.42 Canceled (1,150) $14.42 Fiscal 1995 Canceled (3,200) $15.77 ------ Options outstanding and exercisable at September 30, 1995 9,800 $15.77-$17.625 ====== As of September 30, 1995, options with respect to 2,400 shares carry stock appreciation rights with an exercise price of $15.77 per share. During fiscal 1995, payment on 1,600 stock appreciation rights was made at an exercise price of $15.77. Employee Stock Ownership Plan. On March 30, 1995, the Company terminated the employee stock ownership plan ("ESOP") which was provided for certain employees of CGF. Satisfaction of ESOP indebtedness, which is guaranteed by a subsidiary of NUI, and distributions of the ESOP participants' vested account balances, will be made after the Internal Revenue Service completes its review of the ESOP's termination, which has been requested by the Company. The Company incurred ESOP contribution expense amounting to $0.2 million in fiscal 1995, and $0.9 million in both fiscal 1994 and 1993, representing contributions for loan payments and to acquire additional shares of NUI common stock. Of this amount, approximately $0.1 million in each of fiscal years 1995, 1994 and 1993, represents interest expense. As of September 30, 1995, the ESOP trust held 239,129 shares of NUI common stock, of which 175,566 shares were allocated to participating employees. Participating employees are entitled to vote the allocated shares and the ESOP trustee votes the remainder of the shares. Dividend Restrictions. The Company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the Company was permitted to pay $17 million of cash dividends at September 30, 1995. 5. Notes Payable to Banks At September 30, 1995, the Company's outstanding notes payable to banks were $37.9 million with a combined weighted average interest rate of 6.1%. Unused lines of credit at September 30, 1995 were $120.1 million. The weighted average daily amount outstanding of notes payable to banks and the weighted average interest rate on that amount was $58 million at 5.9% in fiscal 1995, $82 million at 4.1% in fiscal 1994 and $53.9 million at 3.6% in fiscal 1993. 6. Leases Utility plant held under capital leases amounted to $22.9 million at September 30, 1995 and September 30, 1994, with related accumulated amortization of $10.3 million and $9.7 million, respectively. These properties consist principally of leasehold improvements and office furniture and fixtures. A summary of future minimum payments for properties held under capital leases follows (in thousands): 1996 $ 2,710 1997 2,436 1998 2,215 1999 8,631 2000 174 2001 and thereafter 288 ------- Total future minimum payments 16,454 Amount representing interest (3,709) Current portion of capital (1,631) lease obligations ----- $11,114 Capital lease obligations ====== Minimum payments under noncancelable operating leases, which relate principally to office space, are approximately $3.9 million in fiscal 1996, $3.4 million in fiscal 1997, $3.1 million in both fiscal 1998 and 1999, and $3.3 million in fiscal 2000. Rents charged to operations expense were $4.6 million in fiscal 1995, $4.3 million in fiscal 1994 and $4.2 million in fiscal 1993. 7. Financial Instruments Effective October 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", which requires the Company to carry its investments in marketable securities at their current market value. As of September 30, 1995, the market value of the Company's investments in marketable securities exceeded their cost by approximately $372,000, which unrealized gain is reflected net of deferred income taxes in the accompanying consolidated balance sheet as a component of shareholders' equity. As of September 30, 1994, the Company's investments in marketable securities was carried at cost, which approximated market value. The fair value of the Company's cash equivalents, funds for construction held by trustee and notes payable to banks are approximately equivalent to their carrying value. The fair value of the Company's long-term debt exceeded its carrying value by approximately $8 million as of September 30, 1995, and was less than its carrying value by approximately $5 million as of September 30, 1994. The fair value of long-term debt was estimated based on quoted market prices for the same or similar issues. 8. Consolidated Taxes The provision for Federal income taxes is comprised of the following (in thousands): 1995 1994 1993 Currently payable $ 833 $(4,102) $(1,571) ----- ----- ----- Deferred: Depreciation of utility plant 3,546 2,409 2,298 Alternative minimum tax (2,679) 108 (732) Deferred charges and regulatory assets 834 1,216 1,282 Pension (1,211) (155) (200) Gross receipts and franchise taxes 1,566 3,700 4,947 Other, net (51) (385) 1,131 ----- ----- ----- Total deferred, net 2,005 6,893 8,726 ----- ----- ----- Amortization of investment tax credits (468) (476) (461) ----- ----- ----- Total provision for Federal income $2,370 $2,315 $6,694 taxes ===== ===== ===== The components of the Company's net deferred tax liability (asset) as of September 30, 1995 and 1994 are as follows (in thousands): 1995 1994 Depreciation and other utility plant differences $45,142 $42,653 Plant acquisition adjustments 11,650 11,053 Alternative minimum tax credit (4,632) (1,952) Unamortized investment tax credit (2,467) (2,629) Deferred charges and regulatory assets 5,882 5,052 Gross receipts and franchise taxes 3,132 1,566 Other (6,761) (5,677) ------ ------ $51,946 $50,066 ====== ====== The alternative minimum tax credit can be carried forward indefinitely to reduce the Company's future tax liability. The Company's effective income tax rates differ from the statutory Federal income tax rates due to the following (in thousands): 1995 1994 1993 Income before Federal income taxes $7,888 $13,095 $20,504 ----- ------ ------ Federal income taxes computed at the statutory tax rate (34% in fiscal 1995 and 1994, and 34.75% in fiscal 1993) 2,682 4,452 7,125 Increase (reduction) resulting from: Excess of book over tax depreciation 367 373 432 Amortization of investment tax credits (468) (476) (461) Adjustments of prior years' taxes -- (1,770) -- Other, net (211) (264) (402) ----- ----- ----- Total provision for Federal income taxes 2,370 2,315 6,694 Provision (benefit) for state income taxes 756 (212) 332 ----- ----- ----- Total provision for income taxes 3,126 2,103 7,026 (Less) provision included in other income and expense (240) (5) (264) ----- ----- ----- Provision for income taxes included in operating expenses $2,886 $2,098 $6,762 ===== ===== ===== 9. Retirement Benefits Pension Benefits. The Company has non-contributory defined benefit retirement plans which cover all of its employees other than the CGF union employees who participate in a union sponsored multi-employer plan. The Company funds its plans in accordance with the requirements of the Employee Retirement Income Security Act of 1974 and makes contributions to the union sponsored plan in accordance with its contractual obligations. Benefits paid under the Company's plans are based on years of service and levels of compensation. The Company's actuarial calculation of pension expense is based on the projected unit cost method. The components of pension expense for the Company's plans were as follows (in thousands): 1995 1994 1993 Service cost $2,044 $2,579 $ 1,775 Interest cost 5,290 5,016 4,394 Return on plan assets (7,292) (6,855) (11,240) Net amortization (831) (343) 4,805 Special termination benefits 4,083 -- -- ----- ----- ----- Pension expense (credit) $3,294 $ 397 $ (266) ===== ===== ===== The status of the Company's funded plans as of September 30 was as follows (in thousands): 1995 1994 Actuarial present value of benefit obligation: Vested benefits $64,125 $48,658 Non-vested benefits 2,626 3,188 ------- ------- Accumulated benefit obligation 66,751 51,846 Projected increases in compensation levels 15,658 15,869 ------- ------- Projected benefit obligation 82,409 67,715 Market value of plan assets 96,910 81,219 ------ ------ Plan assets in excess of projected benefit obligation 14,501 13,504 Unrecognized net gain (loss) and prior service cost (10,287) (5,344) Unrecognized net transition asset (3,924) (4,576) Deferred special termination -- benefits (573) ------ ------ Pension prepayment (liability)$ (283) $ 3,584 ====== ====== The projected benefit obligation was calculated using a discount rate of 7.5% in fiscal 1995 and 8% in fiscal 1994 and an assumed annual increase in compensation levels of 5% in fiscal 1995 and fiscal 1994. The expected long-term rate of return on assets is 9%. The assets of the Company's funded plans are invested primarily in publicly-traded fixed income and equity securities. Certain key employees also participate in an unfunded supplemental retirement plan. The projected benefit obligation under this plan was $3.1 million as of September 30, 1995 and $3.2 million as of September 30, 1994, and the expense for this plan was approximately $0.4 million in fiscal 1995, $0.5 million in fiscal 1994 and $0.4 million in fiscal 1993. Postretirement Benefits Other Than Pensions. The Company provides certain health care benefits to all retirees receiving benefits under a Company pension plan other than the CGF plan, who reach retirement age while working for the Company. In fiscal 1994, the Company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" ("SFAS 106"), which, among other things, requires companies to accrue the expected cost of providing other postretirement benefits to employees and their beneficiaries during the years that eligible employees render the necessary service. The Company does not currently fund these future benefits. The components of postretirement benefit expense other than pensions for the years ended September 30, 1995 and 1994 were as follows (in thousands): 1995 1994 Service cost $ 518 $ 515 Interest cost 1,713 1,462 Amortization of transition obligation 1,028 1,028 Other 132 -- ----- ----- Net postretirement benefit expense 3,391 3,005 Benefits paid (1,352) (509) ----- ----- Increase in accrued postretirement benefit obligation $ 2,039 $ 2,496 ===== ===== The status of the Company's postretirement plans other than pensions as of September 30, 1995 and 1994 was as follows (in thousands): 1995 1994 Accumulated postretirement benefit obligation: Retirees $15,045 $ 9,951 Fully eligible active plan participants 3,729 5,233 Other active plan participants 6,725 6,330 ----- ----- Total accumulated postretirement benefit obligation 25,499 21,514 Unrecognized transition obligation (18,503) (19,531) Unrecognized net gain (loss) (1,844) 1,130 ----- ----- Accrued postretirement benefit obligation $ 5,152 $ 3,113 ===== ===== The health care trend rate assumption is 11.35% in the first year gradually decreasing to 5.5% for the year 2005 and later. The discount rate used to compute the accumulated postretirement benefit obligation was 7.5% in fiscal 1995 and 8% in fiscal 1994. An increase in the health care trend rate assumption by one percentage point in all years would increase the accumulated postretirement benefit obligation by approximately $3.3 million and the aggregate annual service and interest costs by approximately $0.3 million. The Company has received an order from the North Carolina Utilities Commission to include the amount of postretirement benefit expense other than pensions computed under SFAS 106 in rates. The Company has also received an order from the New Jersey Board of Public Utilities (the "NJBPU") permitting the Northern Division to defer the difference between the amount of postretirement benefits expense other than pensions computed as claims are incurred and the amount computed on the accrual method in accordance with SFAS 106, pending ratemaking treatment that would be considered in a base rate proceeding. The consensus issued in 1993 by the Emerging Issues Task Force of the Financial Accounting Standards Board (the "EITF") permits rate regulated companies to defer such expenses for as long as five years when the ratemaking treatment provides for full recovery within the succeeding fifteen years. The Company will seek ratemaking treatment that is consistent with the EITF consensus. The Company continually evaluates alternative ways to manage these benefits and control their costs. Any changes in the plan or revisions to assumptions that affect the amount of expected future benefit may have a significant effect on the amount of the reported obligation and the annual deferral and expense. 10. Commitments and Contingencies Commitments. Capital expenditures are expected to be approximately $42 million in fiscal 1996. Environmental Matters. The Company is subject to federal and state laws with respect to water, air quality, solid waste disposal and employee health and safety matters, and to environmental regulations issued by the United States Environmental Protection Agency (the "EPA"), the New Jersey Department of Environmental Protection (the "NJDEP"), and other federal and state agencies. The Company owns, or previously owned, certain properties on which manufactured gas plants ("MGP") were operated by the Company or by other parties in the past. Coal tar residues are present on the six MGP sites located in the Northern Division. The Company has reported the presence of the six MGP sites to the EPA, the NJDEP and the NJBPU. In 1991, the NJDEP issued an Administrative Consent Order for an MGP site located at South Street in Elizabeth, New Jersey, wherein the Company agreed to conduct a remedial investigation and to design and implement a remediation plan. In 1992 and 1993, the Company entered into a Memorandum of Agreement with the NJDEP for each of the other five Northern Division MGP sites. Pursuant to the terms and conditions of the Administrative Consent Order and the Memoranda of Agreement, the Company is conducting remedial activities at all six sites with oversight from the NJDEP. PSGS owned ten former MGP facilities, only three of which PSGS currently owns. The former MGP sites are located in the states of North Carolina, South Carolina, Pennsylvania, New York and Maryland. No provision had been made, prior to the PSGS Merger, in PSGS' financial statements for environmental remediation. PSGS has joined with other North Carolina utilities to form the North Carolina Manufactured Gas Plant Group (the "MGP Group"). The MGP Group has entered into a Memorandum of Understanding with the North Carolina Department of Environment, Health and Natural Resources ("NCDEHNR") to develop a uniform program and framework for the investigation and remediation of MGP sites in North Carolina. The Memorandum of Understanding contemplates that the actual investigation and remediation of specific sites will be addressed pursuant to Administrative Consent Orders between the NCDEHNR and the responsible parties. The NCDEHNR has recently sought the investigation and remediation of sites owned by members of the MGP Group and has entered into Administrative Consent Orders with respect to four such sites. None of these four sites are currently or were previously owned by PSGS. In order to quantify the potential future expenditures with respect to all of its MGP sites, the Company, with the aid of environmental consultants, regularly assesses the possible costs associated with conducting investigative activities at each of the Company's sites and implementing appropriate remedial actions, as well as the probability of whether such actions will be necessary. Based on the Company's most recent assessment, as of September 30, 1995, the Company has recorded a total reserve for probable environmental investigation and remediation costs of approximately $34 million, which the Company expects to expend during the next twenty years. The reserve, which includes probable remediation costs for 7 of the Company's 16 MGP sites, is net of approximately $5 million which will be borne by a prior owner and operator of two of the New Jersey sites in accordance with a cost sharing agreement. Of this approximate $34 million reserve, approximately $30 million relates to Northern Division MGP sites and approximately $4 million relates to PSGS MGP sites. The Company is not able at this time to determine the requirement for remediation if contamination is present at any of the other sites and, if present, the costs associated with such remediation. The Company believes that there may be up to an additional $21 million associated with conducting investigative activities and implementing remedial actions, if necessary, with respect to all of the Company's MGP sites during a future period of time that may range up to fifty years. Of this $21 million in possible future expenditures, approximately $10 million relates to the Northern Division MGP sites and approximately $11 million relates to the PSGS MGP sites. The Company believes that its remediation costs for the Northern Division MGP sites will be recoverable in rates and that a portion of such costs may be recoverable from the Company's insurance carriers. The most recent base rate order for the Northern Division permits the Company to utilize full deferred accounting for expenditures related to MGP sites. The order also provides for the recovery of $130,000 annually of MGP related expenditures incurred prior to the rate order. Accordingly, the Company has recorded a regulatory asset of approximately $33 million as of September 30, 1995, reflecting the future recovery of environmental remediation liabilities related to the Northern Division MGP sites. In September 1995, the Northern Division filed a petition with the NJBPU to establish a MGP Remediation Adjustment Clause ("RAC"). The RAC would enable the Company to recover actual MGP expenses over a rolling 7 year period. Other New Jersey utilities have received similar authorization to recover MGP environmental expenditures in rates. With respect to costs associated with the PSGS MGP sites, the Company intends to pursue recovery from ratepayers in the PSGS states, former owners and operators, and insurance carriers, although the Company is not able to express a belief as to whether any or all of these recovery efforts will be successful. Since the Company is not able at this time to determine the extent of recovery, if any relating to the PSGS MGP sites, as of September 30, 1995, the Company recorded probable remediation costs of $3.7 million as an additional plant acquisition adjustment (see Note 2). The Company is working with the regulatory agencies to prudently manage its MGP costs so as to mitigate the impact of such costs on both ratepayers and shareholders. Gas Procurement Contracts. Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $78 million annually. The Company currently recovers, and expects to continue to recover, such fixed charges through its purchased gas adjustment clauses. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 9 billion cubic feet per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations. The implementation of the Federal Energy Regulatory Commission's ("FERC") Order No. 636 required the restructuring of the Company's contracts with certain pipeline companies that together supply less than one-third of the Company's total firm gas supply. Under Order No. 636 the pipeline companies are passing through to their customers transition costs associated with mandated restructuring, such as costs resulting from buying out unmarketable gas purchase contracts. The Company has been charged approximately $7 million of such costs as of September 30, 1995, which the Company has been authorized to recover through its purchased gas adjustment clauses. The Company currently estimates that its remaining Order No. 636 transition obligation will be approximately $9.1 million, which it expects to also recover through the Company's purchased gas adjustment clauses as these costs are incurred. This transition obligation is subject to possible future FERC actions based upon filings by the Company's pipeline suppliers. Other. The Company is involved in various claims and litigation incidental to its business. In the opinion of management, none of these claims and litigation will have a material adverse effect on the Company's results of operations or its financial condition. 11. Unaudited Quarterly Financial Data The quarterly financial data presented below reflects the seasonal nature of the Company's operations which normally results in higher earnings during the heating season which is primarily in the first two fiscal quarters (in thousands, except per share amounts): Fiscal Quarters First Second Third Fourth 1995: Operating Revenues $105,852 $147,940 $62,137 $60,516 Operating Income 8,348 12,931 2,376 204 Net Income (Loss) 3,978 8,554 (2,196) (4,819) Net Income (Loss) Per Share 0.44 0.93 (0.24) (.53) 1994: Operating Revenues $108,822 $156,120 $77,935 $62,363 Operating Income (Loss) 9,407 15,374 1,732 (673) Net Income (Loss) 5,852 11,818 (2,234) (4,656) Net Income (Loss) Per Share 0.71 1.43 (0.25) (0.51) Quarterly net income (loss) per share in fiscal 1994 does not total to the annual amounts due to rounding and to changes in the average common shares outstanding. In the first and second quarters of fiscal 1995, the Company incurred after-tax restructuring and other non-recurring charges of approximately $0.9 million and $4.7 million, respectively. In the fourth quarter of fiscal 1994, the Company reversed $1.6 million of income tax reserves no longer required as a result of management's review of necessary reserve levels, and incurred after-tax non-recurring charges of $0.6 million. SCHEDULE II NUI Corporation and Subsidiaries Valuation and Qualifying Accounts For Each of the Three Years in the Period Ended September 30, 1995 (Dollars in thousands)
Additions ----------------------- Description Balance, Charged to Balance, Beginning Costs End of of Period and Expenses Other Deductions Period 1995 Allowance for doubtful accounts $ 1,368 $2,449 $1,127(a) $3,255(b) $ 1,689 Environmental remediation reserve(d) $32,181 -- $1,800 -- $33,981 1994 Allowance for doubtful accounts $ 1,225 $2,771 $ 970(a) $3,780(b) $ 1,368 $ 182(c) Environmental remediation reserve(d) $24,700 -- $7,481(d) -- $32,181 1993 Allowance for doubtful accounts $ 1,370 $1,852 $ 474(a) $2,471(b) $ 1,225 Environmental remediation reserve(d) $24,700 -- -- -- $24,700 (a) Recoveries. (b) Uncollectible amounts written off. (c) Added as a result of an acquisition. (d) The related cost of the reserve established in fiscal 1991, as well as $5.6 million of fiscal 1994 additions, was recorded as a regulatory asset. The remaining fiscal 1994 additions of $1.9 million and all of fiscal 1995 additions was recorded as an additional utility plant acquisition adjustment. See "Commitments and Contingencies--Environmental Matters," Note 10 of the Notes to the Consolidated Financial Statements.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Bedminster, State of New Jersey, on the 21st day of December, 1995 NUI CORPORATION By: JAMES R. VAN HORN Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. JOHN KEAN, JR. President, Chief Executive December 21, 1995 Officer and Director (Principal executive officer) JOHN KEAN Chairman and Director December 21, 1995 STEPHEN M. LIASKOS Controller (Principal December 21, 1995 financial & accounting officer) C. R. CARVER Director December 21, 1995 DR. VERA KING FARRIS Director December 21, 1995 JAMES J. FORESE Director December 21, 1995 ROBERT W. KEAN, JR. Director December 21, 1995 BERNARD S. LEE Director December 21, 1995 R. V. WHISNAND Director December 21, 1995 JOHN WINTHROP Director December 21, 1995 INDEX TO EXHIBITS Exhibit No. Description 3(i) Certificate of Incorporation, amended and restated as of December 1, 1995 3(ii) By-Laws, amended and restated as of October 24, 1995 10(xxiii) Form of Termination of Employment and Change in Control Agreements 10(xxxvi) Service Agreement for Rate Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0431) dated April 1, 1995 10(xxxvii) Service Agreement for Rate Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0445) dated April 1, 1995 10(xxxviii) Service Agreement for Rate Schedule SS-1 by and between Texas Eastern Transmission Corporation and EGC (Contract #400196) dated September 1, 1995 10(xxxix) Gas Storage Agreement under Rate Schedule FS by and between Tennessee Gas Pipeline Company and EGC (Contract #8703) dated November 1, 1994 10(xl) Consulting Agreement, dated as of March 24, 1995, between NUI Corporation and John Kean 10(xli) Form of Deferred Compensation Agreement 21 Subsidiaries of NUI Corporation 23 Consent of Independent Public Accountants 27 Financial Data Schedule EX-3.1 2 EXHIBIT 3(i) CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION of NUI CORPORATION Pursuant to Section 14A: 7-2(4) of the New Jersey Business Corporation Act NUI CORPORATION, a corporation organized and existing under the New Jersey Business Corporation Act, in accordance with the provisions of Section 14A:7-2(4) thereof, DO HEREBY CERTIFY: That pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the said Corporation, the said Board of Directors on November 28, 1995 adopted the following resolutions creating a series of Preferred Stock designated as Series A Junior Participating Preferred Stock: RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Amended and Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional, and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall initially be one hundred thousand (100,000), no par value, such number of shares to be subject to increase or decrease by action of the Board of Directors as evidenced by a certificate of designations. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, no par value, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after November 28, 1995 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any quarterly Dividend Payment Date and the next subsequent quarterly Dividend Payment Date, a dividend of $10 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such share is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a Quarterly Dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the corpora- tion shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of hares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) Directors. (ii) During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of ten percent in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Pre- ferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock. (iii) Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the Chairman of the Board, the President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 10 days and not later than 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders. (iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Restated Certificate of Incorporation or by-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Restated Certificate of Incorporation or by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. (D) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not: (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; or (iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly ex- changed or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable. Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. Section 10. Amendment. The Restated Certificate of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds (2/3) or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 1st day of December, 1995. Attest: /S/ JOHN KEAN, JR. John Kean, Jr. President and Chief Executive Officer /S/ JAMES R. VAN HORN James R. Van Horn General Counsel and Secretary EX-3.2 3 EXHIBIT 3(ii) NUI Corporation Incorporated Under the Laws of the State of New Jersey AMENDED AND RESTATED BY-LAWS Adopted as of October 24, 1995 ARTICLE I OFFICES The principal office of the Company shall be located in the State of New Jersey. The Board of Directors may change the location of the principal office of the Company and may from time to time designate other offices at such other places, either within or without the State of New Jersey, as the business of the Company may require. ARTICLE II SHAREHOLDERS Section 1. Annual Meeting: The Annual Meeting of Shareholders for the election of Directors and the transaction of any other business as may properly come before such meeting shall be held at such place as shall be designated by the Board of Directors, on the second Tuesday of March of each year at the hour of 10:30 A.M., or on such other day at such time as shall be designated by the Board of Directors. If said day be a legal holiday, said meeting shall be held at the same hour on the next succeeding business day. Section 2. Special Meetings: Special Meetings of the Shareholders may be called only by the President of the Company or by the Board of Directors or as otherwise required by law. Special Meetings shall be held at such time and place as shall from time to time be designated by the Board of Directors and stated in the notice of such meeting. At a Special Meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting. Section 3. Notice of Meetings: Written notice of the place, date and hour of any Shareholders' meeting, whether annual or special, and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given to each Shareholder entitled to vote thereat, by mailing the same to the Shareholder at the address of the Shareholder that appears upon the records of the Company not less than ten (10) nor more than sixty (60) days prior to the date of such meeting. Notice of any adjourned meeting need not be given other than by announcement at the meeting so adjourned, unless otherwise ordered in connection with such adjournment. Such further notice, if any, shall be given as may be required by law. Section 4. Waiver of Notice: A written waiver of notice signed by the person entitled to notice, whether before or after the meeting, shall be deemed equivalent to notice. Attendance of a Shareholder at a meeting shall constitute a waiver of notice of such meeting, except when a Shareholder attends a meeting and, prior to the conclusion thereof, objects to the transaction of any business on the grounds that proper notice of the meeting was not given. Section 5. Quorum: Any number of Shareholders, together holding at least a majority of the capital stock of the Company issued and outstanding and entitled to vote, present in person or represented by proxy at any meeting duly called, shall constitute a quorum for all purposes at a meeting of Shareholders except as may otherwise be provided by law. Section 6. Adjournment of Meetings: If at the time for which a meeting of Shareholders has been called less than a quorum is present, the meeting may be adjourned to another time or place by a majority vote of the Shareholders present in person or by proxy and entitled to vote thereat, without notice other than by announcement at the meeting except as may otherwise be required by law. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. Section 7. Voting: Each Shareholder entitled to vote at a meeting of the Shareholders shall be entitled to one vote for each share of stock registered in such Shareholder's name on the books of the Company on the date fixed as the record date for the determination of its Shareholders entitled to vote. In accordance with the New Jersey Business Corporation Act, each Shareholder entitled to vote at a meeting of Shareholders may authorize another person or persons to act for him by proxy, duly appointed by instrument in writing subscribed by such Shareholder. Said proxy shall not be valid for more than eleven (11) months unless a longer time is expressly provided therein. At all meetings of Shareholders all matters shall be determined by a majority vote of the Shareholders entitled to vote thereat present in person or represented by proxy except as otherwise provided by law, the Certificate of Incorporation or these By-Laws. Section 8. Notice Of Shareholder Nominations And Proposed Business: (1) At any annual meeting of the Shareholders, (i) nominations for the election of directors and (ii) business to be brought before any such Shareholders' meeting may only be made or proposed (a) pursuant to the Company's notice of meet- ing, (b) by or at the direction of the Board of Directors or (c) by any Shareholder of the Company who is a Shareholder of record at the time of giving of the notice provided for in this By-law, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this By- law. (2) Any Shareholder may nominate one or more persons for election as directors at a Shareholders' meeting or propose business to be brought before a Shareholders' meeting, or both, pursuant to clause (c) of paragraph 1 of this By-law, only if the Shareholder has given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a Shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the Shareholders' meeting; provided, however, that if less than 100 days' notice or other prior public disclosure of the date of the meeting is given or made to the Shareholders, notice by the Shareholder to be timely must be received no later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or other public disclosure was made. To be in proper written form a Shareholder's notice to the Secretary shall set forth as to each matter the Shareholder proposes to bring before the meeting: (a) a brief description of the business proposed and/or persons nominated, as applicable, and the reasons for proposing such business or making such nomination; (b) the name and address, as they appear on the Company's books, of the Shareholder proposing such business or making such nomination, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made; (c) the class or series and number of shares of the Company which are owned beneficially and of record by such Shareholder of record and by the beneficial owner, if any, on whose behalf the proposal is made; (d) with respect to any nomination, (i) a description of all arrangements and understandings between the Shareholder proposing such nomination and each nominee and any other person or persons (naming such person or persons) in connection with the nomination or nominations are to be made, (ii) the name, age, business address and residence address of such nominee, (iii) the class or series and number of shares of capital stock of the Company owned beneficially and of record by such nominee, (iv) the written consent of the proposed nominee to being named in the solicitation material and to serving as a director if elected and (v) a representation that such Shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice; (e) with respect to any business to be proposed, (i) a description of all arrangements or understandings between the Shareholder proposing such business and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Shareholder and any material interest of such Shareholder in such business and (ii) a representation that such Shareholder intends to appear in person or by proxy at the meeting to bring such business before the meeting; and (f) such other information regarding each nominee or matter of business to be proposed as would be required to be included in solicitations of proxies, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. (3) Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any Shareholders' meeting and no Shareholder may nominate any person for election at any Shareholders' meeting except in accordance with the procedures set forth in this By-law. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that any proposed business and/or any proposed nomination for election as director was not properly brought or made before the meeting or made in accordance with the procedures prescribed by these By-laws, and if he should so determine, he shall so declare to the meeting and any such proposed business or proposed nomination for election as director not properly brought before the meeting or made shall not be transacted or considered. ARTICLE III DIRECTORS Section 1. Qualifications: Directors need not be Shareholders and need not be citizens of the United States or residents of New Jersey. Section 2. Duties and Powers: The business and affairs of the Company shall be managed by or under the direction of the Board of Directors, and, unless the vote of a greater number is required by law, the Certificate of Incorporation or these By-Laws, the vote of the majority of the Directors present at a meeting shall be the act of the Board of Directors in the transaction of business, provided a quorum is present. The Directors may exercise all such powers of the Company and do all such lawful acts and things as they may deem proper and as are consistent with law, the Certificate of Incorporation and these By-Laws. Section 3. Election: Directors shall be elected by the Shareholders at the Annual Meeting of Shareholders to hold office for the term elected and until their respective successors are elected and qualified or until their earlier resignation or removal. If the election of Directors shall not be held on the day designated by or pursuant to authority granted in these By-Laws, the Directors shall cause the same to be held as soon thereafter as may be convenient. (a) Except as otherwise fixed pursuant to Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation, or to elect additional Directors under specified circumstances, the Board of Directors shall consist of not less than eight (8) nor more than twenty-five (25) persons; provided, however, that the authorized number of Directors may be changed to any number between eight (8) and twenty-five (25) from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized Directors (whether or not there exist any vacancies in previously authorized Directorships at the time any such resolution is presented to the Board for adoption). (b) The Directors (other than those who may be elected by the holders of any class or series of preferred stock having a preference over common stock as to dividends or upon liquidation) shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1992, another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1993, and another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1994, with the members of each class to hold office until their successors are elected and qualified. At each annual meeting of the Shareholders of the Company, the successors to the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of Shareholders held in the third year following the year of their election. The election of Directors need not be by ballot. (c) Except as otherwise fixed pursuant to the provisions of Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation to elect Directors under specified circumstances, newly created Directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum of the Board of Directors. If any applicable provision of New Jersey law expressly confers power on Shareholders to fill such a Directorship at a special meeting of Shareholders, such a Directorship may be filled at such a meeting only by the affirmative vote of at least 75 percent of the then-outstanding shares of the voting stock, voting together as a single class (it being understood that for all purposes of this Section 3 and compliance with Article XI of the Certificate of Incorporation, each share of the voting stock shall have the number of votes granted to it pursuant to Article VI of the Certificate of Incorporation or any resolution or resolutions of the Board of Directors pursuant to authority expressly granted to and vested in it by the provisions of Article VI of the Certificate of Incorporation). Any Director elected in accordance with the two preceding sentences shall hold office for the remainder of the full term of the class of Directors in which the new Directorship was created or the vacancy occurred and until such Director's successor shall have been elected and qualified. No decrease in the number of authorized Directors constituting the entire Board of Directors shall shorten the term of any incumbent Director. (d) Subject to the rights of the holders of any class or series of preferred stock having preference over the common stock as to dividends or upon liquidation or to elect Directors under specified circumstances, any Director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 75 percent of all of the then-outstanding shares of the voting stock, voting together as a single class. The Company must notify the Director of the grounds of his impending removal and the Director shall have an opportunity, at the expense of the Company, to present his defense to the Shareholders by a statement which accompanies or precedes the Company's solicitation of proxies to remove him. Section 4. Resignation of Directors: Any Director may resign at any time upon written notice to the Company. Such resignation shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless so specified therein. Section 5. Meetings: The Board of Directors shall hold an annual meeting for the purpose of organization and the transaction of any business immediately after the Annual Meeting of the Shareholders, provided a quorum is present. Other regular meetings may be held at such times as may be determined from time to time by resolution of the Board of Directors. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, if any, the Chief Executive Officer, if any, by the President or by a majority of the Directors then in office, though less than a quorum of the Board of Directors. Section 6. Notice and Place of Meetings: Regular meetings of the Board of Directors may be held at such time and place as shall be designated by resolution of the Board of Directors. No notice need be given of any regular meeting of the Board. Notice of any special meeting specifying the time and place of such meeting and the business to be transacted thereat shall be served upon each Director by mail at his residence or usual place of business at least two (2) days before the day on which such meeting is to be held, or sent to him at such place by telegraph, cable, electronic communication or transmitted by way of a guaranteed overnight courier service, or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held. No notice of the annual meeting shall be required if held immediately after the annual meeting of the Shareholders and if a quorum is present. Notice of a meeting need not be given to any Director who submits a signed waiver of notice before or after the meeting, nor to any Director who attends the meeting without protesting, prior to the conclusion thereof, the lack of notice. Section 7. Business Transacted at Meetings: Any business may be transacted and any corporate action may be taken at any regular meeting of the Board of Directors at which a quorum shall be present, whether such business or proposed action be stated in the notice of such meeting or not, unless special notice of such business or proposed action shall be required by law. Section 8. Quorum: A majority of the entire Board of Directors then in office shall be necessary to constitute a quorum for the transaction of business. If a quorum is not present at a meeting of the Board of Directors, a majority of the Directors present may adjourn the meeting to such time and place as they may determine without notice other than announcement at the meeting until enough Directors to constitute a quorum shall attend. When a quorum is once present to organize a meeting, it shall not be broken by the subsequent withdrawal of any Directors. Section 9. Loans to and Guarantees for Directors: The Corporation may lend money to, or guarantee any obligation of, or otherwise assist, any Officer or other employee of the Corporation or of any subsidiary who is also a Director of the Corporation whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation and such loan, guarantee or other assistance is authorized by a majority of the entire Board of Directors. The Director who is to be loaned money, or whose obligation is to be guaranteed, or who is otherwise to be assisted by the Corporation, shall abstain from voting on such authorization. Section 10. Action Without A Meeting: Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or such committee, as the case may be, consent in writing to the adoption of a resolution authorizing the action. Such resolutions and the written consents thereto by the members of the Board or a committee shall be filed with the minutes of the proceedings of the Board or such committee as the case may be. Section 11. Participation By Telephone: Any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. Section 12. Compensation: The Board of Directors may establish by resolution reasonable compensation of all Directors for services to the Company as Directors, including a fixed fee, if any, incurred in attending each meeting. Nothing herein contained shall preclude any Director from serving the Company in any other capacity, as an officer, agent or otherwise, and receiving compensation therefor. ARTICLE IV COMMITTEES Section 1. Executive Committee: The Board of Directors, by resolution passed by a majority of the entire Board then in office, may designate five (5) or more Directors to constitute an Executive Committee to hold office at the pleasure of the Board, which Committee shall, during the intervals between meetings of the Board of Directors, have and exercise all of the powers of the Board of Directors in the management of the business and affairs of the Company, subject only to such restrictions or limitations as the Board of Directors may from time to time specify, or as limited by the New Jersey Business Corporation Act, and shall have power to authorize the seal of the Company to be affixed to all instruments which may require it. Any member of the Executive Committee may be removed at any time, with or without cause, by a resolution of a majority of the entire Board of Directors then in office. Any person ceasing to be a Director shall ipso facto cease to be a member of the Executive Committee. Any vacancy in the Executive Committee occurring from any cause whatsoever may be filled from among the Directors by a resolution of a majority of the entire Board of Directors then in office. Section 2. Other Committees: Other committees, whose members are to be Directors, may be appointed by the Board of Directors, which members shall hold office for such time and have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors. Any member of such a committee may be removed at any time, with or without cause, by a majority of the Board of Directors then in office. Any vacancy in a committee occurring from any cause whatsoever may be filled by a majority of the Board of Directors then in office. Section 3. Resignation: Any member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein. Section 4. Quorum: A majority of the members of a committee shall constitute a quorum. The act of a majority of the members of a committee present at any meeting at which a quorum is present shall be the act of such committee. The members of a committee shall act only as a committee, and the individual members thereof shall have no powers as such. Section 5. Record of Proceedings: Each committee shall keep a record of its acts and proceedings and shall report the same to the Board of Directors at its next meeting following such Committee meeting. Section 6. Organization, Meetings. Notices: A committee may hold its meetings at the principal office of the Company, or at any other place upon which a majority of the committee may at any time agree. Each committee may make such rules as it may deem expedient for the regulation and carrying on of its meetings and proceedings. Notice of a special meeting of such Committee may be given by the Secretary or by the chairman of the Committee and shall be sufficiently given if mailed to each member at his residence or usual place of business at least five (5) days before the day on which the meeting is to be held, or if sent to him at such place by telegraph, cable, electronic communication or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held. Section 7. Compensation: The members of any committee shall be entitled to such compensation as may be allowed them by resolution of the Board of Directors. ARTICLE V OFFICERS Section 1. Number: The Officers of the Company shall be a President, a Secretary and a Treasurer and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. The Board of Directors, in its discretion, may also elect a Chairman of the Board of Directors or a Chief Executive Officer or both. Section 2. Election. Term of Office and Qualifications: The Officers, except as provided in Section 3 of this Article V, shall be elected annually by the Board of Directors immediately after the Annual Meeting of Shareholders. Each such Officer shall, except as herein otherwise provided, hold office until the election and qualification of his successor or until his earlier resignation or removal. Any two or more offices may be held by the same person, except the offices of the President and Secretary. Section 3. Other Officers: Other Officers, including, but not limited to, one or more Vice-Chairmen, divisional Officers, Executive Vice Presidents, Senior Vice Presidents, Vice-Presidents, Assistant Vice-Presidents, Assistant Secretaries and Assistant Treasurers, may from time to time be appointed by the Board of Directors, which other officers shall have such powers and perform such duties as may be assigned to them by the President unless otherwise directed by the Board. All such Officers shall be corporate Officers of the Company with the power to bind the Company by acts within the scope of their authority. Section 4. Removal of Officers: Any Officer of the Company may be removed from office, with or without cause, by a vote of a majority of the Board of Directors then in office. The removal of an Officer shall be without prejudice to his contract rights, if any. Election or appointment of an Officer shall not of itself create contract rights. Section 5. Resignation: Any Officer of the Company may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Secretary. The acceptance of a resignation shall not be necessary in order to make it effective, unless so specified therein. Section 6. Filling of Vacancies: A vacancy in any office shall be filled by the Board of Directors. Section 7. Compensation: The compensation of the Officers shall be fixed by the Board of Directors, or by any committee or Officer upon whom power in that regard may be conferred by the Board of Directors. Section 8. Chairman of the Board of Directors: The Chairman of the Board of Directors, if one is elected, shall be a Director and shall preside at all meetings of the Board of Directors and of the Shareholders at which the Chairman shall be present. In the absence of the Chairman of the Board, the Director or Officer designated by the Chairman shall perform and carry out the functions of the Chairman of the Board. Section 9. President: The President shall, subject only to the direction and control of the Board of Directors or the Executive Committee, have responsibility for the general management of the business affairs and property of the Company, and of its several Officers, and shall, subject only as aforesaid, have and exercise all such powers and discharge such duties as usually pertain to the office of President. The President shall perform such duties as may be assigned from time to time by the Board of Directors. Section 10. Chief Executive Officer: The Chief Executive Officer, if one is elected, shall have such duties and responsibilities and shall report to such persons as the Board of Directors shall determine from time to time. Section 11. Secretary: The Secretary shall attend all meetings of the Board of Directors and of the Shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for any committee appointed by the Board. The Secretary shall give or cause to be given notice of all meetings of Shareholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the President or the Board of Directors. The Secretary shall keep in safe custody the seal of the Company and affix it to any instrument when so authorized by the Board of Directors. In the absence of a Secretary, an Assistant Secretary may act in the Secretary's place. Section 12. Treasurer: The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all monies and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and Directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. The Treasurer may be required to give bond for the faithful discharge of his duties. In the absence of a Treasurer, an Assistant Treasurer may act in his place. The Treasurer shall perform such other duties as may be prescribed by the President or the Board of Directors. ARTICLE VI CAPITAL STOCK Section 1. Issue of Certificates of Stock: Certificates of capital stock shall be in such form as shall be approved by the Board of Directors. The Board of Directors may also provide that some or all of the shares of any class or series shall be represented by uncertificated shares. Certificated shares shall be numbered in the order of their issue, and shall be signed, either manually or by facsimile signature, by either the Chairman of the Board or the President or the Secretary and the seal of the Company or a facsimile thereof shall be impressed, affixed or reproduced thereon. In case any Officer or Officers who shall have signed any such certificate or certificates shall cease to be such Officer or Officers of the Company, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Company, such certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person or persons who signed such certificate or certificates have not ceased to be such Officer or Officers of the Company. Section 2. Registration and Transfer of Shares: The name of each person owning a share of the capital stock of the Company shall be entered on the books of the Company together with the number of shares held by such person, the numbers of the certificates covering such shares and the dates of issue of such certificates. The shares of stock of the Company shall be transferable on the books of the Company by the holders thereof in person, or by their duly authorized attorneys or legal representatives, on surrender and cancellation of certificates for a like number of shares, accompanied by an assignment of power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the authenticity of the signature as the Company or its Agents may reasonably require. A record shall be made of each transfer. The Board of Directors may make other and further rules and regulations concerning the transfer and registration of certificates of stock. Section 3. Lost, Destroyed and Mutilated Certificates: The holder of any stock of the Company shall immediately notify the Company of any loss, theft, destruction or mutilation of the certificates thereof. The Company may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen or destroyed, and the Board of Directors or its agent may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representatives, to give the Company a bond, in such sum not exceeding double the value of the stock and with such surety or sureties as they may require, to indemnify it against any claim that may be made against it in connection with the issue of such new certificate. ARTICLE VII MISCELLANEOUS PROVISIONS Section 1. Fiscal Year: The fiscal year of the Company shall commence on the first day of October and end on the last day of September. Section 2. Corporate Seal: The corporate seal shall be in such form as approved by the Board of Directors and may be altered at its pleasure. The corporate seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced. Section 3. Notices: Except as otherwise expressly provided, any notice required by these By-Laws to be given shall be sufficient if given by depositing the same in a post office or letter box in a sealed wrapper with first-class postage prepaid thereon and addressed to the person entitled thereto at his address, as the same appears upon the books of the Company, or by electronically communicating the notice to such person at such address or by transmitting the same by way of a guaranteed overnight courier service; and such notice shall be deemed to be given at the time it is mailed, electronically communicated or so transmitted. Section 4. Contracts, Checks, Drafts: The Board of Directors, except as may otherwise be required by law, may authorize any Officer or Officers, Agent or Agents, in the name of and on behalf of the Company to enter into any contract or execute or deliver any instrument. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Company, shall be signed by such Officer or Officers, Agent or Agents of the Company, and in such manner as shall be designated from time to time by resolution of the Board of Directors. Section 5. Deposits: All funds of the Company shall be deposited from time to time to the credit of the Company in such bank or banks, trust companies or other depositories as the Board of Directors may select, and, for the purpose of such deposit, checks, drafts, warrants and other orders for the payment of money which are payable to the order of the Company, may be endorsed for deposit, assigned and delivered by any Officer of the Company, or by such Agents of the Company as the Board of Directors, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President may authorize for that purpose. Section 6. Voting Stock of Other Companies: Except as otherwise ordered by the Board of Directors or the Executive Committee, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President shall have full power and authority on behalf of the Company to attend and to act and to vote at any meeting of the Shareholders of any corporation of which the Company is a shareholder and to execute a proxy to any other person to represent the Company at any such meeting, and at any such meeting the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President or the holder of any such proxy, as the case may be, shall possess and may exercise any and all rights and powers incident to ownership of such stock and which, as owner thereof, the Company might have possessed and exercised if present. The Board of Directors or the Executive Committee may from time to time confer like powers upon any other person or persons. ARTICLE VIII AMENDMENTS Except as set forth in the final sentence of this ARTICLE VIII, these By-Laws may be altered, amended or repealed by the affirmative vote of a majority of the entire Board of Directors then in office. These By-Laws may also be altered, amended or repealed by the Shareholders, but only by an affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class. Any By-Law may provide that it may only be altered, amended or repealed by the affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class, in which event such By-Law may only be altered, amended or repealed by such vote. EX-10.23 4 EXHIBIT 10(xxiii) Form of Termination of Employment and Change in Control Agreement #1 December 20, 1995 Dear: NUI Corporation, a New Jersey corporation (the "Employer") considers the establishment and maintenance of a sound and vital management team essential to protecting and enhancing its best interests and those of its shareholders. In this connection, the Employer recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Employer exists and that such possibility and the uncertainty and questions which it may raise among management personnel as to the effect of such change in control on the Employer, may result in the departure or distraction of such personnel to the detriment of the Employer and the Employer's shareholders. Accordingly, the Board of Directors of the Employer (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the key members of the Employer's management, including yourself, to their assigned duties without the distraction arising from any actual or threatened change in control. The Employer must, of course, remain free to effect changes in management and terminate employment. However, in order to induce you to remain in the Employer's employ, this letter agreement ("Agreement") sets forth the severance benefits which the Employer agrees will be provided to you in the event your employment is terminated under the circumstances described herein subsequent to or in connection with a "change in control" (as defined in Section 2). 1. TERM. This Agreement shall commence on the date hereof and shall continue in effect through December 31,1998; provided, however, that commencing on January 1, 1999 and every three years thereafter, the term of this Agreement shall automatically be extended for an additional three-year term unless, not later than September 30 preceding the expiration of the original or any extended term hereof, the Board has given you written notice that the Employer does not wish to extend this Agreement; and provided, further, that if a change in control of the Employer shall have occurred during the original or extended term of this Agreement, this Agreement shall continue in effect for a period of 36 months beyond the month in which such change in control occurred. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of your employment prior to a change in control. 2. CHANGE IN CONTROL. For purposes of this Agreement, a "change in control" shall mean: (a) a change in control of the Employer of a nature that would be reported as a change in control in response to Item l(a) of a Current Report on Form 8-K pursuant to the Securities Exchange Act of 1934 ("Exchange Act"), as in effect on the date hereof and as the same may be amended from time to time (or if Item l(a) is no longer in effect, any regulations issued by the Securities and Exchange Commission which serve similar purposes); or (b) any person (as the term "person" is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than a trustee or other fiduciary or custodian holding securities under a qualified or nonqualified employee benefit plan of the Employer (or any affiliate), is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of 25% or more of the capital stock entitled to vote in the election of directors ("Voting Stock ) of the Employer; or (c) during any period of three consecutive years, individuals who constitute the Board of Directors of the Employer at the beginning of any such period (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any person becoming a director of the Employer after the beginning of such period whose election or nomination was approved by a vote of at least three-fourths of the continuing directors comprising the Incumbent Board shall, for the purposes hereof, be considered as though such person were a member of the Incumbent Board; or (d) approval by the shareholders of the Employer of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than 50% of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners of the outstanding Employer Voting Stock immediately prior to such reorganization, merger or consolidation; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation; and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (e) approval by the shareholders of the Employer of the sale or other disposition of all or substantially all of the assets of the Employer other than to a corporation with respect to which, following such sale or other disposition (i) more than 50% of the then outstanding Voting Stock of such corporation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, of the outstanding Employer Voting Stock immediately prior to such sale or other disposition; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the shares of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of such corporation; and (iii) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Employer; or (f) execution by the Employer of a definitive agreement providing for a transaction or series of transactions which would, when consummated, result in a change in control as defined in subsections (a) or (b) above or which would be the subject of the shareholder approval referred to in subsections (d) or (e) above. In the event that a change in control occurs by virtue of the execution of a definitive agreement as provided in subsection (f) above and such agreement is subsequently terminated prior to consummation of the transaction or transactions which would constitute a change in control under subsections (a) or (b) or prior to the shareholder approval contemplated in subsections (d) and (e), then a change in control for purposes of this subsection (f) shall cease as of the date such definitive agreement is terminated. In the event that your employment is terminated by the Employer, other than for Disability or Cause (as described in Section 3), or by you for Good Reason (as described in Section 3) between the time of a change in control under this subsection (f) and the termination of the definitive agreement, you shall be entitled to benefits under this Agreement to the extent provided hereunder. In addition, in the event that a change in control occurs under both this subsection (f) and any other subsection of this Section 2, then all references in this Agreement to a change in control shall be deemed to be references to the latest of such change in control events to occur so that you shall be eligible to receive benefits and payments under this Agreement upon the termination of your employment occurring during the period commencing upon the execution of such definitive agreement and ending 36 months after the consummation of the transactions contemplated in such agreement. Notwithstanding anything in the foregoing to the contrary, no change in control of the Employer shall be deemed to have occurred with respect to you for purposes of this Agreement by virtue of any transaction which results in you, or any group, association or other organization of persons related to, including, or acting in concert with you, acquiring, directly or indirectly, control of the Employer. 3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described in Section 2 hereof constituting a change in control shall have occurred during the term of this Agreement, and your employment is terminated within 36 months after the change in control (as determined in accordance with Section 2(f)) ( the Protection Period ) (i) by the Employer other than for Disability pursuant to subsection (a)(i) below or Cause pursuant to subsection (b) below, or (ii) by you for Good Reason pursuant to subsection (c) below, then you shall be entitled to the payments and benefits provided for in Section 4 of this Agreement. (a) Disability; Retirement. (i) If, as a result of your incapacity due to physical or mental illness, you shall have been absent from your duties with the Employer on a full-time basis for 180 consecutive days after the commencement of such incapacity and within 30 days after written Notice of Termination is given you shall not have returned to the full-time performance of your duties, the Employer may terminate your employment for "Disability" without liability hereunder. (ii) For purposes of this Agreement, termination of your employment based on "Retirement" shall mean termination in accordance with the Employer's retirement policy, including early retirement, generally applicable to its employees or in accordance with any retirement arrangement established with your consent with respect to you. (b) Cause. The Employer may terminate your employment for Cause without liability hereunder. For purposes of this Agreement, termination by the Employer of your employment for "Cause" shall mean termination upon (i) willful and continued failure by you to substantially perform your duties with the Employer (other than any such failure resulting from your incapacity due to physical or mental illness, or any such actual or anticipated failure after the issuance of a Notice of Termination by you for Good Reason, as such terms are defined in subsections (d) and (c) below, respectively) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (ii) the willful engaging by you in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise, including, but not limited to, personal dishonesty, incompetence, misconduct, breach of fiduciary duty involving personal profit, or violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or (iii) your conviction of any crime (whether or not involving the Employer or any affiliate) involving moral turpitude which subjects, or if generally known would subject, the Employer or any affiliate to public ridicule or embarrassment. For purposes of this subsection, no act or failure to act on your part shall be considered "willful" unless done or omitted to be done by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Employer. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a certified copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board at a meeting of the Board (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, you were guilty of conduct set forth above and specifying the particulars thereof in detail. (c) Good Reason. You may terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder. For purposes of this Agreement, "Good Reason" shall mean the occurrence of one or more of the following subsequent to a change in control: (i) the assignment to you of any duties substantively inconsistent with your positions, duties, responsibilities and status immediately prior to the change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to the change in control, or any removal of you from or any failure to reelect you to any of such positions, except in connection with the termination of your employment for Cause, Disability, Retirement, by you other than for Good Reason or as a result of your death; or (ii) (x) a reduction in your base salary in effect immediately prior to the change in control or such higher base salary as may thereafter be in effect, or (y) the failure by the Employer to increase your base salary annually after a change in control by an amount which at least equals, on a percentage basis, the lesser of (A) the greatest percentage increase in base salary for such year for any officer of the Employer or (B) the mean average percentage increase in base salary for all officers of the Employer during the 24-month period preceding the change in control, provided that, any such failure to increase your base salary shall not be deemed to be Good Reason if the Employer is prohibited from granting such increase pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (iii) a failure by the Employer to waive any and all exercise, vesting, transfer and other restrictions that may exist with respect to stock options, restricted stock or other securities which are the subject of awards or grants made to you under the Employer's stock option or restricted stock plan, or any other plan in effect in which you participated immediately preceding the change in control; or (iv) a failure by the Employer to continue its executive incentive compensation program or any other executive or other incentive compensation program or plan, as the same may be amended or modified from time to time, but substantially in the form in effect immediately prior to the change in control ("Program"), or a failure by the Employer to continue you as a participant in the Program on at least the basis on which you participated immediately preceding the change in control, or to pay you any installment of a previous award or of deferred compensation, if any, under the Program or any deferred compensation arrangement in which you participated immediately preceding the change in control, provided that, any such failure to continue the Program or your participation therein shall not be deemed to be Good Reason if the Employer is prohibited from continuing the Progam or your participation pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (v) the Employer requiring you to be based anywhere which is located more than 50 road miles from the office at which you were based immediately preceding the change in control ("Office"), except for required travel on business to an extent substantially consistent with the business travel obligations you experienced immediately preceding the change in control or, in the event you consent to any relocation of your Office, the failure by the Employer to pay (or reimburse you for) all reasonable moving expenses incurred by you relating to a change of your principal residence in connection with such relocation and to indemnify you against any loss (calculated by subtracting the sales price of such residence from the higher of (x) your aggregate investment in such residence, or (y) the fair market value of such residence as determined by an outside appraiser designated by you and reasonably satisfactory to the Employer), realized in the sale of your principal residence in connection with any such change of residence; or (vi) the failure by the Employer to continue in effect any benefit or compensation plan or arrangement in which you were participating immediately preceding the change in control, the taking of any action by the Employer not required by law which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you immediately prior to the change in control; or the failure by the Employer to provide you with the number of paid vacation days, holidays and personal days to which you are then entitled in accordance with the Employer's normal leave policy in effect immediately preceding the change in control; or (vii) in the event that you are a member of the Board immediately prior to the change in control, and you are not reelected to the Board or you are required to resign from the Board; or (viii) any purported termination of your employment by the Employer which is not effected pursuant to a Notice of Termination satisfying the requirements of subsection (d) below (and, if applicable, subsections (a) and (b) above) and, for the purposes of this Agreement, no such purported termination shall be effective; or the delivery to you of a Notice of Termination informing you of the termination of your employment other than for Cause or Disability; or (ix) the failure of the Employer to obtain the assumption of this Agreement, and the Employer s obligations hereunder, from any successor as contemplated in Section 5 hereof. (d) Notice of Termination. The termination of your employment by the Employer for any reason or by you for Good Reason shall be communicated by a written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which shall indicate the specific termination provisions in this Agreement relied upon and shall set forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of your employment under the provisions so indicated. In the event that the Employer terminates your employment for Cause, the Notice of Termination shall include a copy of the Board resolution required under Section 3(b). For the purposes of this Agreement, no purported termination shall be effective without such Notice of Termination. (e) Date of Termination. "Date of Termination" shall mean (i) if your employment is terminated because of your death, the date of your death; (ii) if your employment is terminated for Disability, 30 days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such 30-day period); (iii) if your employment is terminated for Cause, the date set forth in the Notice of Termination; (iv) if you terminate your employment for Retirement, the effective date of your Retirement; (v) if you terminate your employment for Good Reason, the date specified in the Notice of Termination which in no event shall be later than 90 days following the delivery of the Notice of Termination to the Employer, except as otherwise provided in Section 5(a), and (vi) if your employment is terminated by Employer other than for Cause or Disability, the date set forth in the Notice of Termination, which in no event shall be earlier than 90 days following the delivery of the Notice of Termination to you. If your Date of Termination is on a date which is beyond the period during which you are entitled to benefits under this Agreement but the Notice of Termination is given on a date which falls within such period, then your entitlement to benefits shall be determined as if your Date of Termination fell within such period. (f) In the event that Good Reason exists for you to terminate your employment and you provide notice to the Employer that such Good Reason exists, either by Notice of Termination or otherwise, the Employer shall have a one-time right to take such action as is necessary to eliminate the basis for such Good Reason within ten days of receipt of the notice provided by you. (g) Continued Employment; Nonwaiver. Your continued employment during the term of this Agreement and subsequent to an event constituting Good Reason hereunder shall not constitute consent to such event or a waiver of any rights you may have under this Agreement; and your consent to a change in your employment terms conditions or status that would otherwise constitute a Good Reason shall not affect your right to subsequently terminate your employment for Good Reason and obtain the payments and benefits provided for herein. 4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A CHANGE IN CONTROL. (a) During any period following a change in control during which you fail to perform your duties with the Employer as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate then in effect and any installments of deferred portions of awards under the Program or otherwise paid during such period until your employment is terminated pursuant to Section 3(a)(i) hereof. Thereafter, your benefits shall be determined in accordance with the Employer's Long-Term Disability Plan, or any substitute plan then in effect. (b) If, following a change in control, you terminate your employment other than for Good Reason, death or Retirement, or the Employer terminates your employment for Cause, the Employer shall pay you your base salary at the rate then in effect through the Date of Termination plus all other amounts to which you are entitled under the Program or any other plan of the Employer at the time such payments are due and the Employer shall have no further obligations to you, subject to your entitlement to benefits under any qualified or non-qualified retirement plans or any other qualified plans of the employer in which you had a vested interest. (c) If, following a change in control, you terminate your employment by reason of death or Retirement, you (or your estate in the event of death) shall be entitled to receive your base salary at the rate then in effect until the Date of Termination plus all other amounts to which you are entitled under any compensation plan of the Employer at the time such payments are due. Thereafter, your benefits shall be determined in accordance with the provisions of the benefit plans and arrangements in which you participated on the date immediately preceding the Date of Termination. (d) If the Employer terminates your employment other than for Disability or Cause or you terminate your employment for Good Reason during the Protection Period, then the Employer shall continue to pay to you your base salary at the rate then in effect through the Date of Termination. In addition, the Employer shall pay to you the following amounts: (i) An amount equal to the amount, if any, of the deferred portion of any awards which have been awarded to you pursuant to the Program or otherwise but which have not yet been paid to you and the amount of deferred compensation, if any, under the Program or otherwise which has accrued to your account; and (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, an amount equal to the product of (x) the sum of your annual base salary in effect as of the Date of Termination (without giving effect to any reduction therein after the change in control) plus an amount equal in value to the highest incentive compensation (determined without regard to vesting restrictions) awarded with respect to any fiscal year to you during the three fiscal years then most recently ended, multiplied by (y) the number three; and (iii) Notwithstanding any provision of any annual or long-term incentive compensation plan or arrangement of the Employer, an amount equal to the sum of (x) any incentive compensation which has been allocated or awarded to you for a fiscal year or other measuring period preceding the Date of Termination but has not yet been paid and (y) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to you for all uncompleted periods under such plans or arrangements; and (iv) In lieu of shares of stock of the Employer issuable upon the exercise of any employee stock options ("Options"), if any, held by you, which Options shall be canceled upon the making of the payment referred to herein, an amount in cash equal to the aggregate spread between the exercise prices of all Options held by you and the higher of (x) the highest bid price of the stock subject to the Options during the 12-month period immediately preceding the Date of Termination, or (y) the highest price per share actually paid in connection with any change in control of the Employer during the term hereof including, without limitation, prices paid in any subsequent merger or combination with any entity that acquires control. (e) The amounts set forth in (d)(i) through (iv) of this Section 4 shall be paid to you, at your election, either in a lump sum within ten days of your Date of Termination or in substantially equal installments over a 24-month period commencing within ten days of your Date of Termination. Should you elect to receive payment of these amounts over a 24-month period, then the election must be made by you at least 90 days prior to the change in control. In addition, if you elect installment payments, then the Employer shall also pay to you interest monthly on the outstanding balance of Employer s obligation to you. Interest shall be computed based upon the then current rate for three- month Certificates of Deposit, as published in The Wall Street Journal. (f) In addition to the amounts set forth above, in the event that within one year after your Date of Termination you move your principal residence more than 50 miles from its location immediately preceding your Date of Termination, the Employer shall pay to you an amount equal to all of your relocation expenses, including but not limited to brokers fees and commissions, mortgage points, routine expenses associated with the purchase and sale of your residence, travel and moving expenses and any loss (as determined in accordance with Section 3(c)(v)) incurred on the sale of your principal residence, provided that, if your move is in connection with your acceptance of new employment, the Employer s obligation to pay your relocation expenses under this subsection (f) shall be reduced to the extent that you are eligible to be reimbursed for such expenses under the normal practice of your new employer (whether or not you actually accept such reimbursement). Any payments to be made by the Employer in accordance with this subsection (f) shall be made on a regular and current basis upon presentation of documentation in support of your expenses. (g) If you become entitled to the payments described in Section 4(d) above, to the extent that your rights to any shares of stock of the Employer granted to you under the Employer's restricted stock plan, or any other plan in which you participated immediately preceding the change in control are not fully vested and nonforfeitable, your rights thereto shall automatically become fully vested and nonforfeitable as of the Date of Termination. In addition, subject to Section 4(h) below, the Employer shall maintain in full force and effect, for your continued benefit for two years after the Date of Termination, all employee welfare benefit plans, programs or arrangements in which you were entitled to participate on the date immediately preceding the date Notice of Termination was given, including, without limitation, life, disability, accident and health insurance plans or policies, ( Welfare Benefits ) provided your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is prohibited by operation of law or by the terms of such plans or programs as in effect immediately preceding the date Notice of Termination is given, the Employer shall arrange to provide you with benefits substantially similar to those which you would have been entitled to receive under such plans and programs. Except for any insurance policy used by the Employer to fund its excess benefit and deferred compensation plans under any grantor trust arrangement, at the end of the period of coverage, you shall have the option to have assigned to you at no cost and with no apportionment of prepaid premiums, any assignable insurance policy owned by the Employer and relating specifically to you. In addition, the Employer will continue to fund any executive life insurance policy, death benefit contract or agreement in effect on the date immediately preceding the date Notice of Termination was given through your Normal Retirement Age. In the alternative, the Employer shall make a lump sum payment of an amount necessary to continue these premiums through your Normal Retirement Age. "Normal Retirement Age" as used in this Agreement shall have the same meaning as that term is used in any retirement plan in which you participated on the date immediately preceding the date of the change in control. (h) You shall not be required to mitigate the amount of any payment or benefit provided for in this Section 4 by seeking other employment or otherwise. The amount of any payment provided for in this Section 4 shall not be reduced by any compensation earned by you or any retirement benefits provided to you as the result of employment by another employer after the Date of Termination or otherwise. Notwithstanding the foregoing, if as a result of employment by another employer you become eligible to participate in any plan, program or arrangement that would provide you with substantially the same type of coverage as any of the Welfare Benefits being provided to you by the Employer in accordance with Section 4(g), the Employer s obligation to provide coverage of the same type shall be correspondingly reduced (whether or not you actually accept coverage under your new employer s plan), subject to any rights that you may have to continuation of your medical coverage at your own expense under COBRA or any similar law. (i) Nothing in this Agreement shall affect your right to receive all benefits and amounts to which you are entitled under any other compensation or employee benefit plan or arrangement, whether or not qualified, in which you participated on the date immediately preceding the date on which the Notice of Termination is given, in accordance with the terms of such plans or arrangements, provided that you shall not be entitled to any severance or termination pay or allowance or any similar amount under any other plan or arrangement of the Employer; and (j) In the event that it shall be determined that any payment or benefit received under this Agreement and/or any other plan, arrangement or agreement (a Payment or, collectively, the Payments ) would be an excess parachute payment (within the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986 (the Code )) subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax ), the present value of such Payments shall be reduced to the Reduced Amount . The Reduced Amount shall be an amount expressed in present value that maximizes the aggregate present value of the Payments without causing any Payment to be an excess parachute payment subject to the Excise Tax. For these purposes, the present value of any non-cash benefit or deferred payment or benefit shall be determined in accordance with Sections 280G(d)(3) and (4) of the Code. The determination whether any Payment would be an excess parachute payment and the calculation of the Reduced Amount shall be made by a law firm or accounting firm selected by the Employer from among those regularly consulted by it regarding Federal income tax matters within the 12-month period preceding the change in control, and reasonably acceptable to you ( Tax Counsel ). Tax Counsel s opinion shall be delivered to you within five days after your Date of Termination, and shall contain detailed calculations supporting the determination of the Reduced Amount or of Tax Counsel s determination that no portion of the Payments would be subject to the Excise Tax. Upon your receipt of Tax Counsel s opinion setting forth a Reduced Amount, you shall determine which and how much of the Payments shall be eliminated or reduced, provided that, if you do not make such determination within ten days of your receipt of such opinion, the Employer shall determine which and how much of the Payments shall be eliminated or reduced and shall promptly give you written notice thereof. Within five days after you give notice or upon the expiration of ten days without notice, the Employer shall pay to or distribute to or for your benefit such amounts as are then due to you under this Agreement and shall promptly pay to or distribute for your benefit in the future such amounts as become due to you under this Agreement. As a result of the uncertainty of the application of Section 280G of the Code at the time of the initial determination hereunder, it is possible that Payments will have been made by the Employer which should not have been made ( Overpayment ) or that additional payments which will not have been made by the Employer should have been made ( Underpayment ), in each case, consistent with the calculations required to be made hereunder. In the event it is determined that an Overpayment has been made, you shall promptly repay any such Overpayment to the Employer together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code, provided that, no amount shall be payable by you to the Employer (of if paid by you shall be returned to you) if and to the extent such payment would not reduce the amount that is subject to the Excise Tax. In the event it is determined that an Underpayment has been made, any such Underpayment shall be promptly paid by the Employer to or for your benefit together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. (k) The Employer shall also pay all fees and expenses (including legal fees and expenses) incurred by you in contesting or disputing any termination of your employment or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of the Excise Tax to any payment or benefit hereunder, provided that, the Employer shall not have any obligation to pay any legal expenses incurred by you in contesting or disputing your termination of employment or seeking to obtain or enforce any right or benefit provided by this Agreement, and you shall be obligated to repay the Employer for any legal fees advanced to you by the Employer (and interest thereon) to the extent that it is determined by the arbitrator referred to in Section 10 (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, within the meaning of Section 3(b). Any payments to be made by the Employer pursuant to this subsection (k) shall be made to you on a regular and current basis upon your presentation to the Employer of documentation in support thereof. 5. SUCCESSORS, BINDING AGREEMENT. (a) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly, absolutely and unconditionally assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement whether or not such succession is a change in control described in Section 2, and shall entitle you to terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder, provided that, if such succession is not a change in control, the Date of Termination specified in your Notice of Termination shall not be later than 90 days after the date on which such succession becomes effective. As used in this Agreement, "Employer" shall mean the Employer as hereinbefore defined and any successor to its business and/or assets or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 6. NOTICE. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by United States registered mail, return receipt requested, postage prepaid or a nationally recognized overnight delivery service, addressed in either case to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Employer shall be directed to the attention of the Corporate Secretary of NUI Corporation, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 7. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. It is intended that the benefits payable hereunder shall be considered paid to you for your past services to the Employer and continuing services from the date hereof. Any payment provided for hereunder shall be paid net of any applicable income tax withholding required under Federal, State and local law. The validity, interpretation, construction and performance of this Agreement shall be governed by the substantive law of the State of New Jersey. 8. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect. 9. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 10. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in the State of New Jersey in accordance with the rules of the American Arbitration Association then in effect. Notwithstanding the pendency of any such dispute or controversy, the Employer will continue to pay you your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary and installments under the Program or otherwise) and, to the extent permitted by law, continue you as a participant in all compensation, benefit and insurance plans in which you were participating when the notice giving rise to the dispute was given, until the dispute is finally resolved, either by mutual written agreement of the parties, by a final and binding arbitration award or by a final judgment, order or decree of a court of competent jurisdiction, the time for appeal therefrom having expired and no appeal having been perfected. For the purposes of this Agreement, if a Notice of Termination is given in accordance with Section 3(d) hereof during the Protection Period, the Date of Termination shall be treated as having occurred during such period, notwithstanding the resolution of any dispute after the conclusion of such period. Amounts paid to you under this Section during the pendency of any such dispute or controversy are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement, provided that, if it is determined by the arbitrator (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, as described in Section 3(b), amounts paid to you under this Section that are attributable to any period after your Date of Termination shall be offset against and reduce payments otherwise to be made to you under this Agreement, and to the extent that the amounts you receive for such period exceed the payments otherwise to be made to you under this Agreement you shall be obligated to repay such excess to the Employer (with interest thereon). Judgment may be entered on the arbitrator's award in any court of competent jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be deemed to be a contract of employment, and the Employer retains the right to terminate your employment at any time, for any reason or for no reason. 12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any prior agreement between you and the Employer concerning the subject matter hereof. If the foregoing Agreement correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Employer the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, NUI Corporation By_____________________ John Kean Jr., President AGREED TO THIS_____DAY OF ________________,1995 ________________________ DISTRIBUTION ELECTION I hereby revoke all prior distribution elections under this Agreement. All amounts payable to me in accordance with Section 4(d) of this Agreement shall be payable as follows: (initial only one item): _______in a single lump sum payment; _______in substantially equal monthly installments over 24 months. Dated: ________________________ Signature FORM OF TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT #2 November 28, 1995 Dear: NUI Corporation, a New Jersey corporation (the "Employer") considers the establishment and maintenance of a sound and vital management team essential to protecting and enhancing its best interests and those of its shareholders. In this connection, the Employer recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Employer exists and that such possibility and the uncertainty and questions which it may raise among management personnel as to the effect of such change in control on the Employer, may result in the departure or distraction of such personnel to the detriment of the Employer and the Employer's shareholders. Accordingly, the Board of Directors of the Employer (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the key members of the Employer's management, including yourself, to their assigned duties without the distraction arising from any actual or threatened change in control. The Employer must, of course, remain free to effect changes in management and terminate employment. However, in order to induce you to remain in the Employer's employ, this letter agreement ("Agreement") sets forth the severance benefits which the Employer agrees will be provided to you in the event your employment is terminated under the circumstances described herein subsequent to or in connection with a "change in control" (as defined in Section 2). 1. TERM. This Agreement shall commence on the date hereof and shall continue in effect through December 31,1998; provided, however, that commencing on January 1, 1999 and every three years thereafter, the term of this Agreement shall automatically be extended for an additional three-year term unless, not later than September 30 preceding the expiration of the original or any extended term hereof, the Board has given you written notice that the Employer does not wish to extend this Agreement; and provided, further, that if a change in control of the Employer shall have occurred during the original or extended term of this Agreement, this Agreement shall continue in effect for a period of 36 months beyond the month in which such change in control occurred. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of your employment prior to a change in control. 2. CHANGE IN CONTROL. For purposes of this Agreement, a "change in control" shall mean: (a) a change in control of the Employer of a nature that would be reported as a change in control in response to Item l(a) of a Current Report on Form 8-K pursuant to the Securities Exchange Act of 1934 ("Exchange Act"), as in effect on the date hereof and as the same may be amended from time to time (or if Item l(a) is no longer in effect, any regulations issued by the Securities and Exchange Commission which serve similar purposes); or (b) any person (as the term "person" is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than a trustee or other fiduciary or custodian holding securities under a qualified or nonqualified employee benefit plan of the Employer (or any affiliate), is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of 25% or more of the capital stock entitled to vote in the election of directors ("Voting Stock ) of the Employer; or (c) during any period of three consecutive years, individuals who constitute the Board of Directors of the Employer at the beginning of any such period (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any person becoming a director of the Employer after the beginning of such period whose election or nomination was approved by a vote of at least three-fourths of the continuing directors comprising the Incumbent Board shall, for the purposes hereof, be considered as though such person were a member of the Incumbent Board; or (d) approval by the shareholders of the Employer of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than 50% of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners of the outstanding Employer Voting Stock immediately prior to such reorganization, merger or consolidation; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation; and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (e) approval by the shareholders of the Employer of the sale or other disposition of all or substantially all of the assets of the Employer other than to a corporation with respect to which, following such sale or other disposition (i) more than 50% of the then outstanding Voting Stock of such corporation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, of the outstanding Employer Voting Stock immediately prior to such sale or other disposition; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the shares of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of such corporation; and (iii) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Employer; or (f) execution by the Employer of a definitive agreement providing for a transaction or series of transactions which would, when consummated, result in a change in control as defined in subsections (a) or (b) above or which would be the subject of the shareholder approval referred to in subsections (d) or (e) above. In the event that a change in control occurs by virtue of the execution of a definitive agreement as provided in subsection (f) above and such agreement is subsequently terminated prior to consummation of the transaction or transactions which would constitute a change in control under subsections (a) or (b) or prior to the shareholder approval contemplated in subsections (d) and (e), then a change in control for purposes of this subsection (f) shall cease as of the date such definitive agreement is terminated. In the event that your employment is terminated by the Employer, other than for Disability or Cause (as described in Section 3), or by you for Good Reason (as described in Section 3) between the time of a change in control under this subsection (f) and the termination of the definitive agreement, you shall be entitled to benefits under this Agreement to the extent provided hereunder. In addition, in the event that a change in control occurs under both this subsection (f) and any other subsection of this Section 2, then all references in this Agreement to a change in control shall be deemed to be references to the latest of such change in control events to occur so that you shall be eligible to receive benefits and payments under this Agreement upon the termination of your employment occurring during the period commencing upon the execution of such definitive agreement and ending 36 months after the consummation of the transactions contemplated in such agreement. Notwithstanding anything in the foregoing to the contrary, no change in control of the Employer shall be deemed to have occurred with respect to you for purposes of this Agreement by virtue of any transaction which results in you, or any group, association or other organization of persons related to, including, or acting in concert with you, acquiring, directly or indirectly, control of the Employer. 3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described in Section 2 hereof constituting a change in control shall have occurred during the term of this Agreement, and your employment is terminated within 36 months after the change in control (as determined in accordance with Section 2(f)) ( the Protection Period ) (i) by the Employer other than for Disability pursuant to subsection (a)(i) below or Cause pursuant to subsection (b) below, or (ii) by you for Good Reason pursuant to subsection (c) below, then you shall be entitled to the payments and benefits provided for in Section 4 of this Agreement. (a) Disability; Retirement. (i) If, as a result of your incapacity due to physical or mental illness, you shall have been absent from your duties with the Employer on a full-time basis for 180 consecutive days after the commencement of such incapacity and within 30 days after written Notice of Termination is given you shall not have returned to the full-time performance of your duties, the Employer may terminate your employment for "Disability" without liability hereunder. (ii) For purposes of this Agreement, termination of your employment based on "Retirement" shall mean termination in accordance with the Employer's retirement policy, including early retirement, generally applicable to its employees or in accordance with any retirement arrangement established with your consent with respect to you. (b) Cause. The Employer may terminate your employment for Cause without liability hereunder. For purposes of this Agreement, termination by the Employer of your employment for "Cause" shall mean termination upon (i) willful and continued failure by you to substantially perform your duties with the Employer (other than any such failure resulting from your incapacity due to physical or mental illness, or any such actual or anticipated failure after the issuance of a Notice of Termination by you for Good Reason, as such terms are defined in subsections (d) and (c) below, respectively) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (ii) the willful engaging by you in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise, including, but not limited to, personal dishonesty, incompetence, misconduct, breach of fiduciary duty involving personal profit, or violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or (iii) your conviction of any crime (whether or not involving the Employer or any affiliate) involving moral turpitude which subjects, or if generally known would subject, the Employer or any affiliate to public ridicule or embarrassment. For purposes of this subsection, no act or failure to act on your part shall be considered "willful" unless done or omitted to be done by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Employer. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a certified copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board at a meeting of the Board (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, you were guilty of conduct set forth above and specifying the particulars thereof in detail. (c) Good Reason. You may terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder. For purposes of this Agreement, "Good Reason" shall mean the occurrence of one or more of the following subsequent to a change in control: (i) the assignment to you of any duties substantively inconsistent with your positions, duties, responsibilities and status immediately prior to the change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to the change in control, or any removal of you from or any failure to reelect you to any of such positions, except in connection with the termination of your employment for Cause, Disability, Retirement, by you other than for Good Reason or as a result of your death; or (ii) (x) a reduction in your base salary in effect immediately prior to the change in control or such higher base salary as may thereafter be in effect, or (y) the failure by the Employer to increase your base salary annually after a change in control by an amount which at least equals, on a percentage basis, the lesser of (A) the greatest percentage increase in base salary for such year for any officer of the Employer or (B) the mean average percentage increase in base salary for all officers of the Employer during the 24-month period preceding the change in control, provided that, any such failure to increase your base salary shall not be deemed to be Good Reason if the Employer is prohibited from granting such increase pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (iii) a failure by the Employer to waive any and all exercise, vesting, transfer and other restrictions that may exist with respect to stock options, restricted stock or other securities which are the subject of awards or grants made to you under the Employer's stock option or restricted stock plan, or any other plan in effect in which you participated immediately preceding the change in control; or (iv) a failure by the Employer to continue its executive incentive compensation program or any other executive or other incentive compensation program or plan, as the same may be amended or modified from time to time, but substantially in the form in effect immediately prior to the change in control ("Program"), or a failure by the Employer to continue you as a participant in the Program on at least the basis on which you participated immediately preceding the change in control, or to pay you any installment of a previous award or of deferred compensation, if any, under the Program or any deferred compensation arrangement in which you participated immediately preceding the change in control, provided that, any such failure to continue the Program or your participation therein shall not be deemed to be Good Reason if the Employer is prohibited from continuing the Progam or your participation pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (v) the Employer requiring you to be based anywhere which is located more than 50 road miles from the office at which you were based immediately preceding the change in control ("Office"), except for required travel on business to an extent substantially consistent with the business travel obligations you experienced immediately preceding the change in control or, in the event you consent to any relocation of your Office, the failure by the Employer to pay (or reimburse you for) all reasonable moving expenses incurred by you relating to a change of your principal residence in connection with such relocation and to indemnify you against any loss (calculated by subtracting the sales price of such residence from the higher of (x) your aggregate investment in such residence, or (y) the fair market value of such residence as determined by an outside appraiser designated by you and reasonably satisfactory to the Employer), realized in the sale of your principal residence in connection with any such change of residence; or (vi) the failure by the Employer to continue in effect any benefit or compensation plan or arrangement in which you were participating immediately preceding the change in control, the taking of any action by the Employer not required by law which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you immediately prior to the change in control; or the failure by the Employer to provide you with the number of paid vacation days, holidays and personal days to which you are then entitled in accordance with the Employer's normal leave policy in effect immediately preceding the change in control; or (vii) in the event that you are a member of the Board immediately prior to the change in control, and you are not reelected to the Board or you are required to resign from the Board; or (viii) any purported termination of your employment by the Employer which is not effected pursuant to a Notice of Termination satisfying the requirements of subsection (d) below (and, if applicable, subsections (a) and (b) above) and, for the purposes of this Agreement, no such purported termination shall be effective; or the delivery to you of a Notice of Termination informing you of the termination of your employment other than for Cause or Disability; or (ix) the failure of the Employer to obtain the assumption of this Agreement, and the Employer s obligations hereunder, from any successor as contemplated in Section 5 hereof. (d) Notice of Termination. The termination of your employment by the Employer for any reason or by you for Good Reason shall be communicated by a written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which shall indicate the specific termination provisions in this Agreement relied upon and shall set forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of your employment under the provisions so indicated. In the event that the Employer terminates your employment for Cause, the Notice of Termination shall include a copy of the Board resolution required under Section 3(b). For the purposes of this Agreement, no purported termination shall be effective without such Notice of Termination. (e) Date of Termination. "Date of Termination" shall mean (i) if your employment is terminated because of your death, the date of your death; (ii) if your employment is terminated for Disability, 30 days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such 30-day period); (iii) if your employment is terminated for Cause, the date set forth in the Notice of Termination; (iv) if you terminate your employment for Retirement, the effective date of your Retirement; (v) if you terminate your employment for Good Reason, the date specified in the Notice of Termination which in no event shall be later than 90 days following the delivery of the Notice of Termination to the Employer, except as otherwise provided in Section 5(a), and (vi) if your employment is terminated by Employer other than for Cause or Disability, the date set forth in the Notice of Termination, which in no event shall be earlier than 90 days following the delivery of the Notice of Termination to you. If your Date of Termination is on a date which is beyond the period during which you are entitled to benefits under this Agreement but the Notice of Termination is given on a date which falls within such period, then your entitlement to benefits shall be determined as if your Date of Termination fell within such period. (f) In the event that Good Reason exists for you to terminate your employment and you provide notice to the Employer that such Good Reason exists, either by Notice of Termination or otherwise, the Employer shall have a one-time right to take such action as is necessary to eliminate the basis for such Good Reason within ten days of receipt of the notice provided by you. (g) Continued Employment; Nonwaiver. Your continued employment during the term of this Agreement and subsequent to an event constituting Good Reason hereunder shall not constitute consent to such event or a waiver of any rights you may have under this Agreement; and your consent to a change in your employment terms conditions or status that would otherwise constitute a Good Reason shall not affect your right to subsequently terminate your employment for Good Reason and obtain the payments and benefits provided for herein. 4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A CHANGE IN CONTROL. (a) During any period following a change in control during which you fail to perform your duties with the Employer as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate then in effect and any installments of deferred portions of awards under the Program or otherwise paid during such period until your employment is terminated pursuant to Section 3(a)(i) hereof. Thereafter, your benefits shall be determined in accordance with the Employer's Long-Term Disability Plan, or any substitute plan then in effect. (b) If, following a change in control, you terminate your employment other than for Good Reason, death or Retirement, or the Employer terminates your employment for Cause, the Employer shall pay you your base salary at the rate then in effect through the Date of Termination plus all other amounts to which you are entitled under the Program or any other plan of the Employer at the time such payments are due and the Employer shall have no further obligations to you, subject to your entitlement to benefits under any qualified or non-qualified retirement plans or any other qualified plans of the employer in which you had a vested interest. (c) If, following a change in control, you terminate your employment by reason of death or Retirement, you (or your estate in the event of death) shall be entitled to receive your base salary at the rate then in effect until the Date of Termination plus all other amounts to which you are entitled under any compensation plan of the Employer at the time such payments are due. Thereafter, your benefits shall be determined in accordance with the provisions of the benefit plans and arrangements in which you participated on the date immediately preceding the Date of Termination. (d) If the Employer terminates your employment other than for Disability or Cause or you terminate your employment for Good Reason during the Protection Period, then the Employer shall continue to pay to you your base salary at the rate then in effect through the Date of Termination. In addition, the Employer shall pay to you the following amounts: (i) An amount equal to the amount, if any, of the deferred portion of any awards which have been awarded to you pursuant to the Program or otherwise but which have not yet been paid to you and the amount of deferred compensation, if any, under the Program or otherwise which has accrued to your account; and (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, an amount equal to the product of (x) the sum of your annual base salary in effect as of the Date of Termination (without giving effect to any reduction therein after the change in control) plus an amount equal in value to the highest incentive compensation (determined without regard to vesting restrictions) awarded with respect to any fiscal year to you during the two fiscal years then most recently ended, multiplied by (y) the number two; and (iii) Notwithstanding any provision of any annual or long-term incentive compensation plan or arrangement of the Employer, an amount equal to the sum of (x) any incentive compensation which has been allocated or awarded to you for a fiscal year or other measuring period preceding the Date of Termination but has not yet been paid and (y) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to you for all uncompleted periods under such plans or arrangements; and (iv) In lieu of shares of stock of the Employer issuable upon the exercise of any employee stock options ("Options"), if any, held by you, which Options shall be canceled upon the making of the payment referred to herein, an amount in cash equal to the aggregate spread between the exercise prices of all Options held by you and the higher of (x) the highest bid price of the stock subject to the Options during the 12-month period immediately preceding the Date of Termination, or (y) the highest price per share actually paid in connection with any change in control of the Employer during the term hereof including, without limitation, prices paid in any subsequent merger or combination with any entity that acquires control. (e) The amounts set forth in (d)(i) through (iv) of this Section 4 shall be paid to you, at your election, either in a lump sum within ten days of your Date of Termination or in substantially equal installments over a 24-month period commencing within ten days of your Date of Termination. Should you elect to receive payment of these amounts over a 24-month period, then the election must be made by you at least 90 days prior to the change in control. In addition, if you elect installment payments, then the Employer shall also pay to you interest monthly on the outstanding balance of Employer s obligation to you. Interest shall be computed based upon the then current rate for three- month Certificates of Deposit, as published in The Wall Street Journal. (f) In addition to the amounts set forth above, in the event that within one year after your Date of Termination you move your principal residence more than 50 miles from its location immediately preceding your Date of Termination, the Employer shall pay to you an amount equal to all of your relocation expenses, including but not limited to brokers fees and commissions, mortgage points, routine expenses associated with the purchase and sale of your residence, travel and moving expenses and any loss (as determined in accordance with Section 3(c)(v)) incurred on the sale of your principal residence, provided that, if your move is in connection with your acceptance of new employment, the Employer s obligation to pay your relocation expenses under this subsection (f) shall be reduced to the extent that you are eligible to be reimbursed for such expenses under the normal practice of your new employer (whether or not you actually accept such reimbursement). Any payments to be made by the Employer in accordance with this subsection (f) shall be made on a regular and current basis upon presentation of documentation in support of your expenses. (g) If you become entitled to the payments described in Section 4(d) above, to the extent that your rights to any shares of stock of the Employer granted to you under the Employer's restricted stock plan, or any other plan in which you participated immediately preceding the change in control are not fully vested and nonforfeitable, your rights thereto shall automatically become fully vested and nonforfeitable as of the Date of Termination. In addition, subject to Section 4(h) below, the Employer shall maintain in full force and effect, for your continued benefit for two years after the Date of Termination, all employee welfare benefit plans, programs or arrangements in which you were entitled to participate on the date immediately preceding the date Notice of Termination was given, including, without limitation, life, disability, accident and health insurance plans or policies, ( Welfare Benefits ) provided your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is prohibited by operation of law or by the terms of such plans or programs as in effect immediately preceding the date Notice of Termination is given, the Employer shall arrange to provide you with benefits substantially similar to those which you would have been entitled to receive under such plans and programs. Except for any insurance policy used by the Employer to fund its excess benefit and deferred compensation plans under any grantor trust arrangement, at the end of the period of coverage, you shall have the option to have assigned to you at no cost and with no apportionment of prepaid premiums, any assignable insurance policy owned by the Employer and relating specifically to you. In addition, the Employer will continue to fund any executive life insurance policy, death benefit contract or agreement in effect on the date immediately preceding the date Notice of Termination was given through your Normal Retirement Age. In the alternative, the Employer shall make a lump sum payment of an amount necessary to continue these premiums through your Normal Retirement Age. "Normal Retirement Age" as used in this Agreement shall have the same meaning as that term is used in any retirement plan in which you participated on the date immediately preceding the date of the change in control. (h) You shall not be required to mitigate the amount of any payment or benefit provided for in this Section 4 by seeking other employment or otherwise. The amount of any payment provided for in this Section 4 shall not be reduced by any compensation earned by you or any retirement benefits provided to you as the result of employment by another employer after the Date of Termination or otherwise. Notwithstanding the foregoing, if as a result of employment by another employer you become eligible to participate in any plan, program or arrangement that would provide you with substantially the same type of coverage as any of the Welfare Benefits being provided to you by the Employer in accordance with Section 4(g), the Employer s obligation to provide coverage of the same type shall be correspondingly reduced (whether or not you actually accept coverage under your new employer s plan), subject to any rights that you may have to continuation of your medical coverage at your own expense under COBRA or any similar law. (i) Nothing in this Agreement shall affect your right to receive all benefits and amounts to which you are entitled under any other compensation or employee benefit plan or arrangement, whether or not qualified, in which you participated on the date immediately preceding the date on which the Notice of Termination is given, in accordance with the terms of such plans or arrangements, provided that you shall not be entitled to any severance or termination pay or allowance or any similar amount under any other plan or arrangement of the Employer; and (j) In the event that it shall be determined that any payment or benefit received under this Agreement and/or any other plan, arrangement or agreement (a Payment or, collectively, the Payments ) would be an excess parachute payment (within the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986 (the Code )) subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax ), the present value of such Payments shall be reduced to the Reduced Amount . The Reduced Amount shall be an amount expressed in present value that maximizes the aggregate present value of the Payments without causing any Payment to be an excess parachute payment subject to the Excise Tax. For these purposes, the present value of any non-cash benefit or deferred payment or benefit shall be determined in accordance with Sections 280G(d)(3) and (4) of the Code. The determination whether any Payment would be an excess parachute payment and the calculation of the Reduced Amount shall be made by a law firm or accounting firm selected by the Employer from among those regularly consulted by it regarding Federal income tax matters within the 12-month period preceding the change in control, and reasonably acceptable to you ( Tax Counsel ). Tax Counsel s opinion shall be delivered to you within five days after your Date of Termination, and shall contain detailed calculations supporting the determination of the Reduced Amount or of Tax Counsel s determination that no portion of the Payments would be subject to the Excise Tax. Upon your receipt of Tax Counsel s opinion setting forth a Reduced Amount, you shall determine which and how much of the Payments shall be eliminated or reduced, provided that, if you do not make such determination within ten days of your receipt of such opinion, the Employer shall determine which and how much of the Payments shall be eliminated or reduced and shall promptly give you written notice thereof. Within five days after you give notice or upon the expiration of ten days without notice, the Employer shall pay to or distribute to or for your benefit such amounts as are then due to you under this Agreement and shall promptly pay to or distribute for your benefit in the future such amounts as become due to you under this Agreement. As a result of the uncertainty of the application of Section 280G of the Code at the time of the initial determination hereunder, it is possible that Payments will have been made by the Employer which should not have been made ( Overpayment ) or that additional payments which will not have been made by the Employer should have been made ( Underpayment ), in each case, consistent with the calculations required to be made hereunder. In the event it is determined that an Overpayment has been made, you shall promptly repay any such Overpayment to the Employer together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code, provided that, no amount shall be payable by you to the Employer (of if paid by you shall be returned to you) if and to the extent such payment would not reduce the amount that is subject to the Excise Tax. In the event it is determined that an Underpayment has been made, any such Underpayment shall be promptly paid by the Employer to or for your benefit together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. (k) The Employer shall also pay all fees and expenses (including legal fees and expenses) incurred by you in contesting or disputing any termination of your employment or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of the Excise Tax to any payment or benefit hereunder, provided that, the Employer shall not have any obligation to pay any legal expenses incurred by you in contesting or disputing your termination of employment or seeking to obtain or enforce any right or benefit provided by this Agreement, and you shall be obligated to repay the Employer for any legal fees advanced to you by the Employer (and interest thereon) to the extent that it is determined by the arbitrator referred to in Section 10 (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, within the meaning of Section 3(b). Any payments to be made by the Employer pursuant to this subsection (k) shall be made to you on a regular and current basis upon your presentation to the Employer of documentation in support thereof. 5. SUCCESSORS, BINDING AGREEMENT. (a) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly, absolutely and unconditionally assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement whether or not such succession is a change in control described in Section 2, and shall entitle you to terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder, provided that, if such succession is not a change in control, the Date of Termination specified in your Notice of Termination shall not be later than 90 days after the date on which such succession becomes effective. As used in this Agreement, "Employer" shall mean the Employer as hereinbefore defined and any successor to its business and/or assets or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 6. NOTICE. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by United States registered mail, return receipt requested, postage prepaid or a nationally recognized overnight delivery service, addressed in either case to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Employer shall be directed to the attention of the Corporate Secretary of NUI Corporation, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 7. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. It is intended that the benefits payable hereunder shall be considered paid to you for your past services to the Employer and continuing services from the date hereof. Any payment provided for hereunder shall be paid net of any applicable income tax withholding required under Federal, State and local law. The validity, interpretation, construction and performance of this Agreement shall be governed by the substantive law of the State of New Jersey. 8. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect. 9. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 10. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in the State of New Jersey in accordance with the rules of the American Arbitration Association then in effect. Notwithstanding the pendency of any such dispute or controversy, the Employer will continue to pay you your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary and installments under the Program or otherwise) and, to the extent permitted by law, continue you as a participant in all compensation, benefit and insurance plans in which you were participating when the notice giving rise to the dispute was given, until the dispute is finally resolved, either by mutual written agreement of the parties, by a final and binding arbitration award or by a final judgment, order or decree of a court of competent jurisdiction, the time for appeal therefrom having expired and no appeal having been perfected. For the purposes of this Agreement, if a Notice of Termination is given in accordance with Section 3(d) hereof during the Protection Period, the Date of Termination shall be treated as having occurred during such period, notwithstanding the resolution of any dispute after the conclusion of such period. Amounts paid to you under this Section during the pendency of any such dispute or controversy are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement, provided that, if it is determined by the arbitrator (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, as described in Section 3(b), amounts paid to you under this Section that are attributable to any period after your Date of Termination shall be offset against and reduce payments otherwise to be made to you under this Agreement, and to the extent that the amounts you receive for such period exceed the payments otherwise to be made to you under this Agreement you shall be obligated to repay such excess to the Employer (with interest thereon). Judgment may be entered on the arbitrator's award in any court of competent jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be deemed to be a contract of employment, and the Employer retains the right to terminate your employment at any time, for any reason or for no reason. 12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any prior agreement between you and the Employer concerning the subject matter hereof. If the foregoing Agreement correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Employer the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, NUI Corporation By_____________________ John Kean Jr., President AGREED TO THIS_____DAY OF ________________,1995 ________________________ DISTRIBUTION ELECTION I hereby revoke all prior distribution elections under this Agreement. All amounts payable to me in accordance with Section 4(d) of this Agreement shall be payable as follows: (initial only one item): _______in a single lump sum payment; _______in substantially equal monthly installments over 24 months. Dated: ________________________ Signature FORM OF TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT #3 Dear: NUI Corporation, a New Jersey corporation (the "Employer") considers the establishment and maintenance of a sound and vital management team essential to protecting and enhancing its best interests and those of its shareholders. In this connection, the Employer recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Employer exists and that such possibility and the uncertainty and questions which it may raise among management personnel as to the effect of such change in control on the Employer, may result in the departure or distraction of such personnel to the detriment of the Employer and the Employer's shareholders. Accordingly, the Board of Directors of the Employer (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the key members of the Employer's management, including yourself, to their assigned duties without the distraction arising from any actual or threatened change in control. The Employer must, of course, remain free to effect changes in management and terminate employment. However, in order to induce you to remain in the Employer's employ, this letter agreement ("Agreement") sets forth the severance benefits which the Employer agrees will be provided to you in the event your employment is terminated under the circumstances described herein subsequent to or in connection with a "change in control" (as defined in Section 2). 1. TERM. This Agreement shall commence on the date hereof and shall continue in effect through December 31,1998; provided, however, that commencing on January 1, 1999 and every three years thereafter, the term of this Agreement shall automatically be extended for an additional three-year term unless, not later than September 30 preceding the expiration of the original or any extended term hereof, the Board has given you written notice that the Employer does not wish to extend this Agreement; and provided, further, that if a change in control of the Employer shall have occurred during the original or extended term of this Agreement, this Agreement shall continue in effect for a period of 36 months beyond the month in which such change in control occurred. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of your employment prior to a change in control. 2. CHANGE IN CONTROL. For purposes of this Agreement, a "change in control" shall mean: (a) a change in control of the Employer of a nature that would be reported as a change in control in response to Item l(a) of a Current Report on Form 8-K pursuant to the Securities Exchange Act of 1934 ("Exchange Act"), as in effect on the date hereof and as the same may be amended from time to time (or if Item l(a) is no longer in effect, any regulations issued by the Securities and Exchange Commission which serve similar purposes); or (b) any person (as the term "person" is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than a trustee or other fiduciary or custodian holding securities under a qualified or nonqualified employee benefit plan of the Employer (or any affiliate), is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of 25% or more of the capital stock entitled to vote in the election of directors ("Voting Stock ) of the Employer; or (c) during any period of three consecutive years, individuals who constitute the Board of Directors of the Employer at the beginning of any such period (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any person becoming a director of the Employer after the beginning of such period whose election or nomination was approved by a vote of at least three-fourths of the continuing directors comprising the Incumbent Board shall, for the purposes hereof, be considered as though such person were a member of the Incumbent Board; or (d) approval by the shareholders of the Employer of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than 50% of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners of the outstanding Employer Voting Stock immediately prior to such reorganization, merger or consolidation; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of the corporation resulting from such reorganization, merger or consolidation; and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (e) approval by the shareholders of the Employer of the sale or other disposition of all or substantially all of the assets of the Employer other than to a corporation with respect to which, following such sale or other disposition (i) more than 50% of the then outstanding Voting Stock of such corporation is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, of the outstanding Employer Voting Stock immediately prior to such sale or other disposition; (ii) no Person (excluding the Employer (or any affiliate), any trustee or other fiduciary or custodian holding securities under any qualified or nonqualified employee benefit plan of the Employer (or any affiliate) or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the shares of the outstanding Employer Voting Stock) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of Voting Stock of such corporation; and (iii) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Employer; or (f) execution by the Employer of a definitive agreement providing for a transaction or series of transactions which would, when consummated, result in a change in control as defined in subsections (a) or (b) above or which would be the subject of the shareholder approval referred to in subsections (d) or (e) above. In the event that a change in control occurs by virtue of the execution of a definitive agreement as provided in subsection (f) above and such agreement is subsequently terminated prior to consummation of the transaction or transactions which would constitute a change in control under subsections (a) or (b) or prior to the shareholder approval contemplated in subsections (d) and (e), then a change in control for purposes of this subsection (f) shall cease as of the date such definitive agreement is terminated. In the event that your employment is terminated by the Employer, other than for Disability or Cause (as described in Section 3), or by you for Good Reason (as described in Section 3) between the time of a change in control under this subsection (f) and the termination of the definitive agreement, you shall be entitled to benefits under this Agreement to the extent provided hereunder. In addition, in the event that a change in control occurs under both this subsection (f) and any other subsection of this Section 2, then all references in this Agreement to a change in control shall be deemed to be references to the latest of such change in control events to occur so that you shall be eligible to receive benefits and payments under this Agreement upon the termination of your employment occurring during the period commencing upon the execution of such definitive agreement and ending 36 months after the consummation of the transactions contemplated in such agreement. Notwithstanding anything in the foregoing to the contrary, no change in control of the Employer shall be deemed to have occurred with respect to you for purposes of this Agreement by virtue of any transaction which results in you, or any group, association or other organization of persons related to, including, or acting in concert with you, acquiring, directly or indirectly, control of the Employer. 3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described in Section 2 hereof constituting a change in control shall have occurred during the term of this Agreement, and your employment is terminated within 36 months after the change in control (as determined in accordance with Section 2(f)) ( the Protection Period ) (i) by the Employer other than for Disability pursuant to subsection (a)(i) below or Cause pursuant to subsection (b) below, or (ii) by you for Good Reason pursuant to subsection (c) below, then you shall be entitled to the payments and benefits provided for in Section 4 of this Agreement. (a) Disability; Retirement. (i) If, as a result of your incapacity due to physical or mental illness, you shall have been absent from your duties with the Employer on a full-time basis for 180 consecutive days after the commencement of such incapacity and within 30 days after written Notice of Termination is given you shall not have returned to the full-time performance of your duties, the Employer may terminate your employment for "Disability" without liability hereunder. (ii) For purposes of this Agreement, termination of your employment based on "Retirement" shall mean termination in accordance with the Employer's retirement policy, including early retirement, generally applicable to its employees or in accordance with any retirement arrangement established with your consent with respect to you. (b) Cause. The Employer may terminate your employment for Cause without liability hereunder. For purposes of this Agreement, termination by the Employer of your employment for "Cause" shall mean termination upon (i) willful and continued failure by you to substantially perform your duties with the Employer (other than any such failure resulting from your incapacity due to physical or mental illness, or any such actual or anticipated failure after the issuance of a Notice of Termination by you for Good Reason, as such terms are defined in subsections (d) and (c) below, respectively) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (ii) the willful engaging by you in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise, including, but not limited to, personal dishonesty, incompetence, misconduct, breach of fiduciary duty involving personal profit, or violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or (iii) your conviction of any crime (whether or not involving the Employer or any affiliate) involving moral turpitude which subjects, or if generally known would subject, the Employer or any affiliate to public ridicule or embarrassment. For purposes of this subsection, no act or failure to act on your part shall be considered "willful" unless done or omitted to be done by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Employer. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a certified copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board at a meeting of the Board (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, you were guilty of conduct set forth above and specifying the particulars thereof in detail. (c) Good Reason. You may terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder. For purposes of this Agreement, "Good Reason" shall mean the occurrence of one or more of the following subsequent to a change in control: (i) the assignment to you of any duties substantively inconsistent with your positions, duties, responsibilities and status immediately prior to the change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to the change in control, or any removal of you from or any failure to reelect you to any of such positions, except in connection with the termination of your employment for Cause, Disability, Retirement, by you other than for Good Reason or as a result of your death; or (ii) (x) a reduction in your base salary in effect immediately prior to the change in control or such higher base salary as may thereafter be in effect, or (y) the failure by the Employer to increase your base salary annually after a change in control by an amount which at least equals, on a percentage basis, the lesser of (A) the greatest percentage increase in base salary for such year for any officer of the Employer or (B) the mean average percentage increase in base salary for all officers of the Employer during the 24-month period preceding the change in control, provided that, any such failure to increase your base salary shall not be deemed to be Good Reason if the Employer is prohibited from granting such increase pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (iii) a failure by the Employer to waive any and all exercise, vesting, transfer and other restrictions that may exist with respect to stock options, restricted stock or other securities which are the subject of awards or grants made to you under the Employer's stock option or restricted stock plan, or any other plan in effect in which you participated immediately preceding the change in control; or (iv) a failure by the Employer to continue its executive incentive compensation program or any other executive or other incentive compensation program or plan, as the same may be amended or modified from time to time, but substantially in the form in effect immediately prior to the change in control ("Program"), or a failure by the Employer to continue you as a participant in the Program on at least the basis on which you participated immediately preceding the change in control, or to pay you any installment of a previous award or of deferred compensation, if any, under the Program or any deferred compensation arrangement in which you participated immediately preceding the change in control, provided that, any such failure to continue the Program or your participation therein shall not be deemed to be Good Reason if the Employer is prohibited from continuing the Progam or your participation pursuant to any applicable law or governmental or regulatory rule, regulation or order, or any judgment, order or decree of a court of competent jurisdiction; or (v) the Employer requiring you to be based anywhere which is located more than 50 road miles from the office at which you were based immediately preceding the change in control ("Office"), except for required travel on business to an extent substantially consistent with the business travel obligations you experienced immediately preceding the change in control or, in the event you consent to any relocation of your Office, the failure by the Employer to pay (or reimburse you for) all reasonable moving expenses incurred by you relating to a change of your principal residence in connection with such relocation and to indemnify you against any loss (calculated by subtracting the sales price of such residence from the higher of (x) your aggregate investment in such residence, or (y) the fair market value of such residence as determined by an outside appraiser designated by you and reasonably satisfactory to the Employer), realized in the sale of your principal residence in connection with any such change of residence; or (vi) the failure by the Employer to continue in effect any benefit or compensation plan or arrangement in which you were participating immediately preceding the change in control, the taking of any action by the Employer not required by law which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you immediately prior to the change in control; or the failure by the Employer to provide you with the number of paid vacation days, holidays and personal days to which you are then entitled in accordance with the Employer's normal leave policy in effect immediately preceding the change in control; or (vii) in the event that you are a member of the Board immediately prior to the change in control, and you are not reelected to the Board or you are required to resign from the Board; or (viii) any purported termination of your employment by the Employer which is not effected pursuant to a Notice of Termination satisfying the requirements of subsection (d) below (and, if applicable, subsections (a) and (b) above) and, for the purposes of this Agreement, no such purported termination shall be effective; or the delivery to you of a Notice of Termination informing you of the termination of your employment other than for Cause or Disability; or (ix) the failure of the Employer to obtain the assumption of this Agreement, and the Employer s obligations hereunder, from any successor as contemplated in Section 5 hereof. (d) Notice of Termination. The termination of your employment by the Employer for any reason or by you for Good Reason shall be communicated by a written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which shall indicate the specific termination provisions in this Agreement relied upon and shall set forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of your employment under the provisions so indicated. In the event that the Employer terminates your employment for Cause, the Notice of Termination shall include a copy of the Board resolution required under Section 3(b). For the purposes of this Agreement, no purported termination shall be effective without such Notice of Termination. (e) Date of Termination. "Date of Termination" shall mean (i) if your employment is terminated because of your death, the date of your death; (ii) if your employment is terminated for Disability, 30 days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such 30-day period); (iii) if your employment is terminated for Cause, the date set forth in the Notice of Termination; (iv) if you terminate your employment for Retirement, the effective date of your Retirement; (v) if you terminate your employment for Good Reason, the date specified in the Notice of Termination which in no event shall be later than 90 days following the delivery of the Notice of Termination to the Employer, except as otherwise provided in Section 5(a), and (vi) if your employment is terminated by Employer other than for Cause or Disability, the date set forth in the Notice of Termination, which in no event shall be earlier than 90 days following the delivery of the Notice of Termination to you. If your Date of Termination is on a date which is beyond the period during which you are entitled to benefits under this Agreement but the Notice of Termination is given on a date which falls within such period, then your entitlement to benefits shall be determined as if your Date of Termination fell within such period. (f) In the event that Good Reason exists for you to terminate your employment and you provide notice to the Employer that such Good Reason exists, either by Notice of Termination or otherwise, the Employer shall have a one-time right to take such action as is necessary to eliminate the basis for such Good Reason within ten days of receipt of the notice provided by you. (g) Continued Employment; Nonwaiver. Your continued employment during the term of this Agreement and subsequent to an event constituting Good Reason hereunder shall not constitute consent to such event or a waiver of any rights you may have under this Agreement; and your consent to a change in your employment terms conditions or status that would otherwise constitute a Good Reason shall not affect your right to subsequently terminate your employment for Good Reason and obtain the payments and benefits provided for herein. 4. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A CHANGE IN CONTROL. (a) During any period following a change in control during which you fail to perform your duties with the Employer as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate then in effect and any installments of deferred portions of awards under the Program or otherwise paid during such period until your employment is terminated pursuant to Section 3(a)(i) hereof. Thereafter, your benefits shall be determined in accordance with the Employer's Long-Term Disability Plan, or any substitute plan then in effect. (b) If, following a change in control, you terminate your employment other than for Good Reason, death or Retirement, or the Employer terminates your employment for Cause, the Employer shall pay you your base salary at the rate then in effect through the Date of Termination plus all other amounts to which you are entitled under the Program or any other plan of the Employer at the time such payments are due and the Employer shall have no further obligations to you, subject to your entitlement to benefits under any qualified or non-qualified retirement plans or any other qualified plans of the employer in which you had a vested interest. (c) If, following a change in control, you terminate your employment by reason of death or Retirement, you (or your estate in the event of death) shall be entitled to receive your base salary at the rate then in effect until the Date of Termination plus all other amounts to which you are entitled under any compensation plan of the Employer at the time such payments are due. Thereafter, your benefits shall be determined in accordance with the provisions of the benefit plans and arrangements in which you participated on the date immediately preceding the Date of Termination. (d) If the Employer terminates your employment other than for Disability or Cause or you terminate your employment for Good Reason during the Protection Period, then the Employer shall continue to pay to you your base salary at the rate then in effect through the Date of Termination. In addition, the Employer shall pay to you the following amounts: (i) An amount equal to the amount, if any, of the deferred portion of any awards which have been awarded to you pursuant to the Program or otherwise but which have not yet been paid to you and the amount of deferred compensation, if any, under the Program or otherwise which has accrued to your account; and (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, an amount equal to the product of (x) the sum of your annual base salary in effect as of the Date of Termination (without giving effect to any reduction therein after the change in control) plus an amount equal in value to the highest incentive compensation (determined without regard to vesting restrictions) awarded with respect to any fiscal year to you during the three fiscal years then most recently ended, multiplied by (y) the number three; and (iii) Notwithstanding any provision of any annual or long-term incentive compensation plan or arrangement of the Employer, an amount equal to the sum of (x) any incentive compensation which has been allocated or awarded to you for a fiscal year or other measuring period preceding the Date of Termination but has not yet been paid and (y) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to you for all uncompleted periods under such plans or arrangements; and (iv) In lieu of shares of stock of the Employer issuable upon the exercise of any employee stock options ("Options"), if any, held by you, which Options shall be canceled upon the making of the payment referred to herein, an amount in cash equal to the aggregate spread between the exercise prices of all Options held by you and the higher of (x) the highest bid price of the stock subject to the Options during the 12-month period immediately preceding the Date of Termination, or (y) the highest price per share actually paid in connection with any change in control of the Employer during the term hereof including, without limitation, prices paid in any subsequent merger or combination with any entity that acquires control. (e) The amounts set forth in (d)(i) through (iv) of this Section 4 shall be paid to you, at your election, either in a lump sum within ten days of your Date of Termination or in substantially equal installments over a 24-month period commencing within ten days of your Date of Termination. Should you elect to receive payment of these amounts over a 24-month period, then the election must be made by you at least 90 days prior to the change in control. In addition, if you elect installment payments, then the Employer shall also pay to you interest monthly on the outstanding balance of Employer s obligation to you. Interest shall be computed based upon the then current rate for three- month Certificates of Deposit, as published in The Wall Street Journal. (f) In addition to the amounts set forth above, in the event that within one year after your Date of Termination you move your principal residence more than 50 miles from its location immediately preceding your Date of Termination, the Employer shall pay to you an amount equal to all of your relocation expenses, including but not limited to brokers fees and commissions, mortgage points, routine expenses associated with the purchase and sale of your residence, travel and moving expenses and any loss (as determined in accordance with Section 3(c)(v)) incurred on the sale of your principal residence, provided that, if your move is in connection with your acceptance of new employment, the Employer s obligation to pay your relocation expenses under this subsection (f) shall be reduced to the extent that you are eligible to be reimbursed for such expenses under the normal practice of your new employer (whether or not you actually accept such reimbursement). Any payments to be made by the Employer in accordance with this subsection (f) shall be made on a regular and current basis upon presentation of documentation in support of your expenses. (g) If you become entitled to the payments described in Section 4(d) above, to the extent that your rights to any shares of stock of the Employer granted to you under the Employer's restricted stock plan, or any other plan in which you participated immediately preceding the change in control are not fully vested and nonforfeitable, your rights thereto shall automatically become fully vested and nonforfeitable as of the Date of Termination. In addition, subject to Section 4(h) below, the Employer shall maintain in full force and effect, for your continued benefit for two years after the Date of Termination, all employee welfare benefit plans, programs or arrangements in which you were entitled to participate on the date immediately preceding the date Notice of Termination was given, including, without limitation, life, disability, accident and health insurance plans or policies, ( Welfare Benefits ) provided your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is prohibited by operation of law or by the terms of such plans or programs as in effect immediately preceding the date Notice of Termination is given, the Employer shall arrange to provide you with benefits substantially similar to those which you would have been entitled to receive under such plans and programs. Except for any insurance policy used by the Employer to fund its excess benefit and deferred compensation plans under any grantor trust arrangement, at the end of the period of coverage, you shall have the option to have assigned to you at no cost and with no apportionment of prepaid premiums, any assignable insurance policy owned by the Employer and relating specifically to you. In addition, the Employer will continue to fund any executive life insurance policy, death benefit contract or agreement in effect on the date immediately preceding the date Notice of Termination was given through your Normal Retirement Age. In the alternative, the Employer shall make a lump sum payment of an amount necessary to continue these premiums through your Normal Retirement Age. "Normal Retirement Age" as used in this Agreement shall have the same meaning as that term is used in any retirement plan in which you participated on the date immediately preceding the date of the change in control. (h) You shall not be required to mitigate the amount of any payment or benefit provided for in this Section 4 by seeking other employment or otherwise. The amount of any payment provided for in this Section 4 shall not be reduced by any compensation earned by you or any retirement benefits provided to you as the result of employment by another employer after the Date of Termination or otherwise. Notwithstanding the foregoing, if as a result of employment by another employer you become eligible to participate in any plan, program or arrangement that would provide you with substantially the same type of coverage as any of the Welfare Benefits being provided to you by the Employer in accordance with Section 4(g), the Employer s obligation to provide coverage of the same type shall be correspondingly reduced (whether or not you actually accept coverage under your new employer s plan), subject to any rights that you may have to continuation of your medical coverage at your own expense under COBRA or any similar law. (i) Nothing in this Agreement shall affect your right to receive all benefits and amounts to which you are entitled under any other compensation or employee benefit plan or arrangement, whether or not qualified, in which you participated on the date immediately preceding the date on which the Notice of Termination is given, in accordance with the terms of such plans or arrangements, provided that you shall not be entitled to any severance or termination pay or allowance or any similar amount under any other plan or arrangement of the Employer; and (j) In the event that any payments made to you under this Agreement or otherwise ("Payments") are subject to the excise tax imposed by Section 4999 of the Code or any successor provisions ("Excise Tax"), then the Employer shall pay you an additional amount ("Gross Up Payment") such that the net amount retained by you, after giving effect to the Excise Tax on the Payments and any Federal, State and local income taxes and Excise Tax on the Gross Up Payment, shall be equal to the Payments (prior to giving effect to the Excise Tax). For purposes of determining the amount of the Gross Up Payment, you shall be deemed to pay Federal, State and local income taxes at the highest marginal rate of taxation in the calendar year in which the Payments are made. State and local income taxes shall be determined based upon the state and locality of your domicile on the Date of Termination. The determination of whether such Excise Tax is payable and the amount thereof shall be based upon the opinion of tax counsel selected by the Employer and reasonably acceptable to you, which such opinion shall be delivered to you within 45 days of the Date of Termination. If such opinion is not finally accepted by the Internal Revenue Service, then appropriate adjustments shall be computed by such tax counsel based upon the final amount of the Excise Tax so determined and taking into account Employer s obligations under this subsection (j). To the extent that the Internal Revenue Service does not accept the opinion of such tax counsel, Employer shall add to the Gross-Up Payment required hereunder all amounts necessary to reimburse you for your costs and expenses arising from such tax counsel s opinion, including interest and penalties imposed by the Internal Revenue Service. The amount shall be paid by the Employer in one lump cash sum within 30 days of such computation. (k) The Employer shall also pay all fees and expenses (including legal fees and expenses) incurred by you in contesting or disputing any termination of your employment or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of the Excise Tax to any payment or benefit hereunder, provided that, the Employer shall not have any obligation to pay any legal expenses incurred by you in contesting or disputing your termination of employment or seeking to obtain or enforce any right or benefit provided by this Agreement, and you shall be obligated to repay the Employer for any legal fees advanced to you by the Employer (and interest thereon) to the extent that it is determined by the arbitrator referred to in Section 10 (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, within the meaning of Section 3(b). Any payments to be made by the Employer pursuant to this subsection (k) shall be made to you on a regular and current basis upon your presentation to the Employer of documentation in support thereof. 5. SUCCESSORS, BINDING AGREEMENT. (a) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly, absolutely and unconditionally assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement whether or not such succession is a change in control described in Section 2, and shall entitle you to terminate your employment for Good Reason and become entitled to the payments and benefits provided hereunder, provided that, if such succession is not a change in control, the Date of Termination specified in your Notice of Termination shall not be later than 90 days after the date on which such succession becomes effective. As used in this Agreement, "Employer" shall mean the Employer as hereinbefore defined and any successor to its business and/or assets or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 6. NOTICE. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by United States registered mail, return receipt requested, postage prepaid or a nationally recognized overnight delivery service, addressed in either case to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Employer shall be directed to the attention of the Corporate Secretary of NUI Corporation, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 7. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. It is intended that the benefits payable hereunder shall be considered paid to you for your past services to the Employer and continuing services from the date hereof. Any payment provided for hereunder shall be paid net of any applicable income tax withholding required under Federal, State and local law. The validity, interpretation, construction and performance of this Agreement shall be governed by the substantive law of the State of New Jersey. 8. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect. 9. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 10. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in the State of New Jersey in accordance with the rules of the American Arbitration Association then in effect. Notwithstanding the pendency of any such dispute or controversy, the Employer will continue to pay you your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary and installments under the Program or otherwise) and, to the extent permitted by law, continue you as a participant in all compensation, benefit and insurance plans in which you were participating when the notice giving rise to the dispute was given, until the dispute is finally resolved, either by mutual written agreement of the parties, by a final and binding arbitration award or by a final judgment, order or decree of a court of competent jurisdiction, the time for appeal therefrom having expired and no appeal having been perfected. For the purposes of this Agreement, if a Notice of Termination is given in accordance with Section 3(d) hereof during the Protection Period, the Date of Termination shall be treated as having occurred during such period, notwithstanding the resolution of any dispute after the conclusion of such period. Amounts paid to you under this Section during the pendency of any such dispute or controversy are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement, provided that, if it is determined by the arbitrator (or, if applicable, a court of competent jurisdiction) that your employment was terminated for Cause, as described in Section 3(b), amounts paid to you under this Section that are attributable to any period after your Date of Termination shall be offset against and reduce payments otherwise to be made to you under this Agreement, and to the extent that the amounts you receive for such period exceed the payments otherwise to be made to you under this Agreement you shall be obligated to repay such excess to the Employer (with interest thereon). Judgment may be entered on the arbitrator's award in any court of competent jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 11. NO EMPLOYMENT CONTRACT. Nothing in this Agreement shall be deemed to be a contract of employment, and the Employer retains the right to terminate your employment at any time, for any reason or for no reason. 12. PRIOR AGREEMENTS. This Agreement supersedes and replaces any prior agreement between you and the Employer concerning the subject matter hereof. If the foregoing Agreement correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Employer the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, NUI Corporation By_____________________ R. Van Whisnand Chairman NUI Corporation Executive Compensation Committee AGREED TO THIS_____DAY OF ________________, 1995 ________________________ DISTRIBUTION ELECTION I hereby revoke all prior distribution elections under this Agreement. All amounts payable to me in accordance with Section 4(d) of this Agreement shall be payable as follows: (initial only one item): _______in a single lump sum payment; _______in substantially equal monthly installments over 24 months. Dated: ________________________ Signature EX-10.36 5 EXHIBIT 10(xxxvi) Contract #1.0431 SERVICE AGREEMENT THIS AGREEMENT entered into as of this first day of April, 1995, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, hereinafter referred to as "Buyer," second party, WITNESSETH WHEREAS, pursuant to the Order No. 636, 636-A and 636-B, issued by the Federal Energy Regulatory Commission (Commission), Columbia Gas Transmission Corporation ("Columbia") has assigned to Buyer upstream capacity previously provided under Seller's FT Rate Schedule Service Agreement dated February 1, 1992 (System Contract 0.3167); and WHEREAS, upon the effective date of this agreement, the contractual arrangement between Columbia and Seller is terminated and abandonment of service under the FT Rate Schedule Service Agreement dated February 1, 1992 (System Contract 0.3167) is automatically authorized; and WHEREAS, Buyer has been assigned a portion of Columbia's capacity previously provided under the FT Rate Schedule Service Agreement dated February 1, 1992 (System Contract 0.3167), and agrees to such assignment and assumes Columbia's obligations pursuant to the Service Agreement and Seller's FT Rate Schedule of Vol. 1 of its FERC Gas Tariff; and WHEREAS, Seller will provide service hereunder to Buyer pursuant to Seller's blanket certificate authorization and Rate Schedule FT for the assigned capacity designated hereinbelow. NOW, THEREFORE, Seller and Buyer agree as follows: ARTICLE I GAS TRANSPORTATION SERVICE 1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller natural gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of 2,500 Mcf per day. 2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's FERC Gas Tariff. ARTICLE II POINT(S) OF RECEIPT Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter the pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of the pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer at the point(s) of receipt hereunder shall be correspondingly increased or decreased upon written notification to Buyer. The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be: See Exhibit A, attached hereto, for points of receipt. ARTICLE III POINT(S) OF DELIVERY Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of: See Exhibit B, attached hereto, for the points of delivery and pressures. ARTICLE IV TERM OF AGREEMENT This agreement shall be effective as of April 1, 1995 and shall remain in force and in effect until 8:00 a.m. Eastern Standard Time, April 1, 1999 and thereafter until terminated by Seller or Buyer upon at least three (3) years prior written notice; provided, however, this agreement shall terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable judgment fails to demonstrate credit worthiness and (b) Buyer fails to provide adequate security in accordance with Section 8.3 of Seller's' Rate Schedule FT. As set forth in Section 8 of Article II of Seller's August 7, 1989 revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d) of the Commission's Regulations shall not apply to any long term conversions from firm sales service to transportation service under Seller's Rate Schedule Ft and (b) Seller shall not exercise its right to terminate this service agreement as it applies to transportation service resulting from conversions from firm sales service so long as Buyer is willing to pay rates no less favorable than Seller is otherwise able to collect from third parties for such service. ARTICLE V RATE SCHEDULE AND PRICE 1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof. 2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GUST, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No. 44 of Volume No. I of this Tariff which relates to service under this agreement and which is incorporated herein. 3. In addition to the applicable charges for firm transportation service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction. ARTICLE VI MISCELLANEOUS 1. This agreement supersedes and cancels as of the effective date hereof the following contract(s): FT Rate Schedule Service Agreement dated February 1, 1992 (System Contract 0.3167) between Transcontinental Gas Pipe Line Corporation and Columbia Gas Transmission. 2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character. 3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities. 4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns. 5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address: (a) If to Seller: Transcontinental Gas Pipe Line Corporation P.0. Box 1396 Houston, Texas 77251 Attention: Customer Service (b) If to buyer: EIizabethtown Gas Company One Elizabethtown Plaza P. O. Box 3175 Union, New Jersey 07083 Attention: Vice President, Gas Supply & Planning Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized. TRANSCONTINENTAL GAS PIPE LINE CORPORATION (Seller) By /S/ James P. Avioli Vice President-Gas Control ELIZABETHTOWN GAS COMPANY a Division of NUI Corporation By: /S/ Thomas E. Smith Vice President - Gas Supply and Planning EX-10.37 6 EXHIBIT 10(xxxvii) Contract #1.0445 SERVICE AGREEMENT THIS AGREEMENT entered into as of this first day of April, 1995, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, hereinafter referred to as "Buyer," second party, WITNESSETH WHEREAS, pursuant to the Order No. 636, 636-A and 636-B, issued by the Federal Energy Regulatory Commission (Commission), Columbia Gas Transmission Corporation ("Columbia") has assigned to Buyer upstream capacity previously provided under the Transportation Agreement dated October 1, 1987 (System Contract 0.2256); and WHEREAS, upon the effective date of this agreement, the contractual arrangement between Columbia and Seller is terminated and abandonment of service under the Transportation Agreement dated October 1, 1987 (System Contract 0.2256) is automatically authorized; and WHEREAS, Buyer has been assigned a portion of Columbia's capacity previously provided under the Transportation Agreement dated October 1, 1987 (System Contract 0.2256), and agrees to such assignment and assumes Columbia's obligations pursuant to the Service Agreement and Seller's FT Rate Schedule of Vol. 1 of its FERC Gas Tariff; and WHEREAS, Seller will provide service hereunder to Buyer pursuant to Seller's blanket certificate authorization and Rate Schedule FT for the assigned capacity designated hereinbelow. NOW, THEREFORE, Seller and Buyer agree as follows: ARTICLE I GAS TRANSPORTATION SERVICE 1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller natural gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of 1,393 Mcf per day. 2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's FERC Gas Tariff. ARTICLE II POINT(S) OF RECEIPT Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter the pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of the pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer at the point(s) of receipt hereunder shall be correspondingly increased or decreased upon written notification to Buyer. The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be: See Exhibit A, attached hereto, for points of receipt. ARTICLE III POINT(S) OF DELIVERY Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of: See Exhibit B, attached hereto, for the points of delivery and pressures. ARTICLE IV TERM OF AGREEMENT This agreement shall be effective as of April 1, 1995 and shall remain in force and in effect until 8:00 a.m. Eastern Standard Time, February 2, 1998 and thereafter until terminated by Seller or Buyer upon at least six (6) months prior written notice; provided, however, this agreement shall terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable judgment fails to demonstrate credit worthiness and (b) Buyer fails to provide adequate security in accordance with Section 8.3 of Seller's' Rate Schedule FT. As set forth in Section 8 of Article II of Seller's August 7, 1989 revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d) of the Commission's Regulations shall not apply to any long term conversions from firm sales service to transportation service under Seller's Rate Schedule Ft and (b) Seller shall not exercise its right to terminate this service agreement as it applies to transportation service resulting from conversions from firm sales service so long as Buyer is willing to pay rates no less favorable than Seller is otherwise able to collect from third parties for such service. ARTICLE V RATE SCHEDULE AND PRICE 1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof. 2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GUST, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No. 44 of Volume No. I of this Tariff which relates to service under this agreement and which is incorporated herein. 3. In addition to the applicable charges for firm transportation service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction. ARTICLE VI MISCELLANEOUS 1. This agreement supersedes and cancels as of the effective date hereof the following contract(s): Transportation Agreement dated October 1, 1987 (System Contract 0.2256) between Transcontinental Gas Pipe Line Corporation and Columbia Gas Transmission; specifically for that portion of capacity provided in Article I above. 2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character. 3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities. 4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns. 5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address: (a) If to Seller: Transcontinental Gas Pipe Line Corporation P.0. Box 1396 Houston, Texas 77251 Attention: (b) If to buyer: EIizabethtown Gas Company One Elizabethtown Plaza P. O. Box 3175 Union, New Jersey 07083 Attention: Vice President, Gas Supply & Planning Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized. TRANSCONTINENTAL GAS PIPE LINE CORPORATION (Seller) By /S/ James P. Avioli Vice President-Gas Control ELIZABETHTOWN GAS COMPANY a Division of NUI Corporation By: /S/ Thomas E. Smith Vice President - Gas Supply and Planning EX-10.38 7 EXHIBIT 10(xxxviii) Contract #: 400196 SERVICE AGREEMENT FOR RATE SCHEDULE SS-l This Agreement, made and entered into this 23rd day of September, 1994 by and between TEXAS EASTERN TRANSMISSION CORPORATION, a Delaware Corporation (herein called "Pipeline") and ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation (herein called "Customer," whether one or more), W I T N E S S E T H: WHEREAS, there currently exists between Pipeline and Customer two service agreements under the Rate Schedule SS-1 (Pipeline's Contract No. 400116 and 400206) which specify an MDWQ of 872 dth and an MSQ of 52,290 dth and an MDWQ of 2,744 dth and an MSQ of 327,621 dth respectively; and WHEREAS, Pipeline and Customer desire to enter into one service agreement under Rate Schedule SS-1 which shall supersede the two existing Rate Schedule SS-1 service agreements reference above; and WHEREAS, withdrawal rights under the new Rate Schedule SS-1 service agreement are consistent with the existing rights of the two existing rate schedule SS-1 service agreements it supersedes; NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties do covenant and agree as follows: ARTICLE I SCOPE OF AGREEMENT Subject to the terms, conditions and limitations hereof and of Pipeline's Rate Schedule SS-1, Pipeline agrees to provide firm service for Customer under Rate Schedule SS-1 and to receive and store for Customer's account quantities of natural gas up to the following quantity: Maximum Daily Injection Quantity (MDIQ) 1,953 dth Maximum Storage Quantity (MSQ) 379,911 dth Pipeline agrees to withdraw from storage for Customer, at Customer's request, quantities of gas up to Customer's Maximum Daily Withdrawal Quantity (MDWQ) of 3,646 dekatherms, or such lesser quantity as determined pursuant to Rate Schedule SS-1, from Customer's Storage Inventory, plus Applicable Shrinkage, and to deliver for Customer's account such quantities. Pipeline's obligation to withdraw gas on any day is governed by the provisions of Rate Schedule SS-1, including but not limited to Section 6. ARTICLE II TERM OF AGREEMENT The term of this Service Agreement shall commence on September 1, 1994 and shall continue in force and effect until 04/30/2012 and year to year thereafter unless this Service Agreement is terminated as hereinafter provided. This Service Agreement may be terminated by either Pipeline or Customer upon five (5) years prior written notice to the other specifying a termination date of any year occurring on or after the expiration of the primary term. Subject to Section 22 of Pipeline's General Terms and Conditions and without prejudice to such rights, this Service Agreement may be terminated at any time by Pipeline in the event Customer fails to pay part or all of the amount of any bill for service hereunder and such failure continues for thirty (30) days after payment is due; provided, Pipeline gives thirty (30) days prior written notice to Customer of such termination and provided further such termination shall not be effective if, prior to the date of termination, Customer either pays such outstanding bill or furnishes a good and sufficient surety bond guaranteeing payment to Pipeline of such outstanding bill. THE TERMINATION OF THIS SERVICE AGREEMENT WITH A FIXED CONTRACT TERM OR THE PROVISION OF A TERMINATION NOTICE BY CUSTOMER TRIGGERS PREGRANTED ABANDONMENT UNDER SECTION 7 OF THE NATURAL GAS ACT AS OF THE EFFECTIVE DATE OF THE TERMINATION. PROVISION OF A TERMINATION NOTICE BY PIPELINE ALSO TRIGGERS CUSTOMER'S RIGHT OF FIRST REFUSAL UNDER SECTION 3.13 OF THE GENERAL TERMS AND CONDITIONS ON THE EFFECTIVE DATE OF THE TERMINATION. In the event there is gas in storage for Customer's account on April 30 of the year of termination of this Service Agreement, this Service Agreement shall continue in force and effect for the sole purpose of withdrawal and delivery of said gas to Customer for an additional one-hundred and twenty (120) days. ARTICLE III RATE SCHEDULE This Service Agreement in all respects shall be and remain subject to the applicable provisions of Rate Schedule SS-1 and of the General Terms and Conditions of Pipeline's FERC Gas Tariff on file with the Federal Energy Regulatory Commission, all of which are by this reference made a part hereof. Customer shall pay Pipeline, for all services rendered hereunder and for the availability of such service in the period stated, the applicable prices established under Pipeline's Rate Schedule SS-1 as filed with the Federal Energy Regulatory Commission and as the same may be hereafter revised or changed. Customer agrees that Pipeline shall have the unilateral right to file with the appropriate regulatory authority and make changes effective in (a) the rates and charges applicable to service pursuant to Pipeline's Rate Schedule SS-1, (b) Pipeline's Rate Schedule SS-1, pursuant to which service hereunder is rendered or (c) any provision of the General Terms and Conditions applicable to Rate Schedule SS-1. Notwithstanding the foregoing, Customer does not agree that Pipeline shall have the unilateral right without the consent of Customer subsequent to the execution of this Service Agreement and Pipeline shall not have the right during the effectiveness of this Service Agreement to make any filings pursuant to Section 4 of the Natural Gas Act to change the MDIQ, MSQ and MDWQ specified in Article I, to change the term of the service agreement as specified in Article II, to change Point(s) of Receipt specified in Article IV, to change the Point(s) of Delivery specified in Article IV, or to change the firm character of the service hereunder. Pipeline agrees that Customer may protest or contest the aforementioned filings, and Customer does not waive any rights it may have with respect to such filings. ARTICLE IV POINT(S) OF RECEIPT AND POINT(S) OF DELIVERY The natural gas received by Pipeline for Customer's account for storage injection pursuant to this Service Agreement shall be those quantities scheduled for delivery pursuant to Service Agreements between Pipeline and Customer under Rate Schedules CDS, FT-1, SCT, PTI or IT-1 which specify as a Point of Delivery the "SS-1 Storage Point". For purposes of billing of Usage Charges under Rate Schedules CDS, FT-1, SCT, PTI or IT-1, deliveries under Rate Schedules CDS, FT-1, SCT, PTI or IT-1 for injection into storage scheduled directly to the "SS-1 Storage Point" shall be deemed to have been delivered 60% in Market Zone 2 and 40% in Market Zone 3. In addition, at Customer's request any positive or negative variance between scheduled deliveries and actual deliveries on any day at Customer's Points of Delivery under Rate Schedules CDS, FT-1, SCT, or IT-1 shall be deemed for billing purposes delivered at the Point of Delivery and shall be injected into or withdrawn from storage for Customer's account. In addition to accepting gas for storage injection at the SS-1 Storage Point, Pipeline will accept gas tendered at points of interconnection between Pipeline and third party facilities at Oakford and Leidy Storage Fields provided that such receipt does not result in Customer tendering aggregate quantities for storage in excess of the Customer MDIQ. The Point(s) of Delivery at which Pipeline shall deliver gas shall be specified in Exhibit A of the executed service agreement. Exhibit A and B are hereby incorporated as part of this Service Agreement for all intents and purposes as if fully copied and set forth herein at length. ARTICLE V QUALITY All natural gas tendered to Pipeline for Customer#s account shall conform and be subject to the provisions of Section 5 of the General Terms and Conditions. Customer agrees that in the event Customer tenders for service hereunder and Pipeline agrees to accept natural gas which does not comply with Pipeline's quality specifications, as expressly provided for in Section 5 of Pipeline's General Terms and Conditions, Customer shall pay all costs associated with processing of such gas as necessary to comply with such quality specifications. ARTICLE VI ADDRESSES Except as herein otherwise provided or as provided in the General Terms and Conditions of Pipeline's FERC Gas Tariff, any notice, request, demand, statement, bill or payment provided for in this Service Agreement, or any notice which any party may desire to give to the other, shall be in writing and shall be considered as duly delivered when mailed by registered, certified, or regular mail to the post office address of the parties hereto, as the case may be, as follows: (a) Pipeline: Texas Eastern Transmission Corporation 5400 Westheimer Court Houston, Texas 77056-5310 (b) Customer: ELIZABETHTOWN GAS COMPANY ONE ELIZABETHTOWN PLAZA UNION, NJ 07083 or such other address as either party shall designate by formal written notice. ARTICLE VII ASSIGNMENTS Any Company which shall succeed by purchase, merger, or consolidation to the properties, substantially as an entirety, of Customer, or of Pipeline, as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this Service Agreement; and either Customer or Pipeline may assign or pledge this Service Agreement under the provisions of any mortgage, deed of trust, indenture, bank credit agreement, assignment, receivable sale, or similar instrument which it has executed or may execute hereafter; otherwise, neither Customer nor Pipeline shall assign this Service Agreement or any of its rights hereunder unless it first shall have obtained the consent thereto in writing of the other; provided further, however, that neither Customer nor Pipeline shall be released from its obligations hereunder without the consent of the other. In addition, Customer may assign its rights to capacity pursuant to Section 3.14 of the General Terms and Conditions. To the extent Customer so desires, when it releases capacity pursuant to Section 3.14 of the General Terms and Conditions, Customer may require privity between Customer and the Replacement Customer, as further provided in the applicable Capacity Release Umbrella Agreement. ARTICLE VIII INTERPRETATION The interpretation and performance of this Service Agreement shall be in accordance with the laws of the State of Texas without recourse to the law governing conflict of laws. This Service Agreement and the obligations of the parties are subject to all present and future valid laws with respect to the subject matter, State and Federal, and to all valid present and future orders, rules, and regulations of duly constituted authorities having jurisdiction. ARTICLE IX CANCELLATION OF PRIOR CONTRACT(S) This Service Agreement supersedes and cancels, as of the effective date of this Service Agreement, the contract(s) between the parties hereto as described below: Service Agreement(s) dated, June 1, 1993 between Pipeline and Customer under Pipeline's Rate Schedule SS-1 (Pipeline's Contract No. 400116 and 400206). IN WITNESS WHEREOF, the Parties hereto have caused this Service Agreement to be signed by their respective Presidents, Vice Presidents, or other duly authorized agents and their respective corporate seals to be hereto affixed and attested by their respective Secretaries or Assistant Secretaries, the day and year first above written. TEXAS EASTERN TRANSMISSION CORPORATION By /S/ Robert B. Evans Vice President ATTEST: /S/ Robert W. Reed Secretary ELIZABETHTOWN GAS COMPANY a Division of NUI Corporation By /S/ Thomas E. Smith Vice President Supply & Planing ATTEST: /S/ Kenneth G. Ward Asst. Secretary EX-10.39 8 EXHIBIT 10(xxxix) Service Package No. 8703 Amendment No. 0 GAS STORAGE CONTRACT (For Use Under Rate Schedule FS) THIS AGREEMENT is made and entered into as of the 1st day of November, 1994, by and between TENNESSEE GAS PIPELINE COMPANY, a Delaware Corporation, hereinafter referred to as "Transporter" and ELIZABETHTOWN GAS COMPANY, a Division of NUI Corporation, a New Jersey corporation, hereinafter referred to as "Shipper." Transporter and Shipper shall collectively be referred to herein as the "parties." ARTICLE I - SCOPE OF CONTRACT Following the commencement of service hereunder, in accordance with the terms of Transporter's Rate Schedule FS, and of this Agreement, Transporter shall receive for injection for Shipper's account a daily quantity of gas up to Shipper's Maximum Injection Quantity of 670 (Dth) and Maximum Storage Quantity of 100,485 dekatherms (Dth) (on a cumulative basis) and on demand shall withdraw from Shipper's storage account and deliver to Shipper a daily quantity of gas up to Shipper's Maximum Daily Withdrawal Quantity of 1,014 Dth. ARTICLE II - SERVICE POINT The point or points at which the gas is to be tendered for delivery by Transporter to Shipper under this Agreement shall be at the storage service point at Transporter's Compressor Station NORTHERN. ARTICLE III - PRICE 1. Shipper agrees to pay Transporter for all natural gas storage service furnished to Shipper hereunder, including compensation for system fuel and losses, at Transporter's legally effective rate or at any effective superseding rate applicable to the type of service specified herein. Transporter's present legally effectively rate for said service is contained in Transporter's Tariff as filed with the Federal Energy Regulatory Commission. 2. Shipper agrees to reimburse Transporter for any filing or similar fees, which have not been previously paid by Shipper, which Transporter incurs in rendering service hereunder. 3. Shipper agrees that Transporter shall have the unilateral right to file with the appropriate regulatory authority and make effective changes in (a) the rates and charges applicable to service pursuant to Transporter's Rate Schedule FS, (b) the rate schedule(s) pursuant to which service hereunder is rendered, or (c) any provision of the General Terms and Conditions applicable to those rate schedules. Transporter agrees that Shipper may protest or contest the aforementioned filings, or may seek authorization from duly constituted regulatory authorities for such adjustment of Transporter's existing FERC Gas Tariff as may be found necessary to assure Transporter's just and reasonable rates. ARTICLE V - TERM OF CONTRACT This Agreement shall be effective as of the 1st day of November, 1994 and shall remain in force and effect until 31st March, 2013 ("Primary Term" ) and on a month to month basis thereafter unless terminated by either Party upon at least thirty (30) days prior written notice to the other Party; provided, however, that if the Primary Term is one year or more, then unless Shipper elects upon one year's prior written notice to Transporter to request a lesser extension term, the Agreement shall automatically extend upon the expiration of the primary term for a term of five years; and shall automatically extend for successive five year terms thereafter unless shipper provides notice as described above in advance of the expiration of a succeeding term; provided further, if the FERC or other governmental body having jurisdiction over the service rendered pursuant to this Agreement authorizes abandonment of such service, this Agreement shall terminate on the abandonment date permitted by the FERC or such other governmental body. ARTICLE VI - NOTICES Except as otherwise provided in the General Terms and Conditions applicable to this Agreement, any notice under this Agreement shall be in writing and mailed to the post office address of the party intended to receive the same, as follows: TRANSPORTER: Tennessee Gas Pipeline Company P. O. Box 2511 Houston, Texas 77252-2511 Attention: Transportation Marketing SHIPPER: NOTICES: ELIZABETHTOWN GAS COMPANY % NUI CORPORATION 550 Route 202-206 P. O. Box 760 Bedminster, NJ 07921-0760 Attention: NANCY SOBELSON BILLING: ELIZABETHTOWN GAS COMPANY % NUI CORPORATION 550 Route 202-206 P. O. Box 760 Bedminster, NJ 07921-0760 Attention: NANCY SOBELSON or to such other address as either Party shall designate by formal written notice to the other. ARTICLE VII - ASSIGNMENT Any company which shall succeed by purchase, merger, or consolidation to the properties, substantially as an entirety, of Transporter or of Shipper, as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this contract. Otherwise no assignment of the contract or any of the rights or obligations thereunder shall be made by shipper, except pursuant to the General Terms and Conditions of Transporter's FERC Gas Tariff. It is agreed, however, that the restrictions on assignment contained in this Article shall not in any way prevent either Party to the Contract from pledging or mortgaging its rights thereunder as security for its indebtedness. ARTICLE VIII - MISCELLANEOUS 8.1 The interpretation and performance of this Agreement shall be in accordance with and controlled by the laws of the State of Texas, without regard to the doctrines governing choice of law. 8.2 If any provision of this Agreement is declared null and void, or voidable, by a court of competent jurisdiction, then that provision will be considered severable at either Party's option; and if the severability option is exercised, the remaining provisions of the Agreement shall remain in full force and effect. 8.3 Unless otherwise expressly provided in this Agreement or Transporter's Tariff, no modification of or supplement to the terms and provisions stated in this Agreement shall be or become effective, until Shipper has submitted a request for change through the TENN-SPEED 2 System and Shipper has been notified through TENN- SPEED 2 of Transporter's agreement to such change. ARTICLE IX - PRIOR AGREEMENTS CANCELLED Transporter and shipper agree that this Contract, as of the date hereof, shall supersede and cancel the following contract(s) between the parties hereto: Agreement for Storage Service Package 1584 dated September 1, 1993. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duty executed in several counterparts as of the date first hereinabove written. TENNESSEE GAS PIPELINE COMPANY BY: /S/ David Hansen Agent and Attorney-in-Fact DATE: 1/20/05 ELIZABETHTOWN GAS COMPANY a Division of NUI Corporation BY: /S/ Michael J. Behan TITLE: Vice President, NUI Corporation DATE: August 25, 1993 EX-10.40 9 EXHIBIT 10(xl) CONSULTING AGREEMENT BETWEEN JOHN KEAN, CHAIRMAN OF THE BOARD AND NUI CORPORATION DATED: MARCH 24, 1995 AS AMENDED NOVEMBER 28, 1995 TABLE OF CONTENTS Section Subject Preamble 1 Retention 2 Position and Duties 3 Place of Performance 4 Compensation and Benefits 5 Unauthorized Disclosure 6 Termination 7 Compensation Upon Termination 8 Successors; Binding Agreement 9 Notices 10 Miscellaneous 11 Validity 12 Counterparts 13 Arbitration 14 Construction 15 Captions 16 Entire Agreement Signatures CONSULTING AGREEMENT made this 24th day of March 1995 by and between NUI CORPORATION, a New Jersey corporation (the "Company"), a multi-state natural gas distribution company with offices located in Bedminster, New Jersey and John Kean (the "Consultant"), an individual residing in Vero Beach, Florida. WITNESSETH WHEREAS, the Consultant has been employed by the Company for more than thirty nine (39) years and is currently its Chief Executive Officer; and WHEREAS, the Consultant possesses an intimate knowledge of the business and affairs of the Company, its policies, methods, personnel and projects; and WHEREAS, the Company considers the stability and continuity of its management to be essential for the protection and enhancement of the best interests of the Company and the Company's shareholders; and WHEREAS, the Board of Directors of the Company (the "Board") has determined that the Consultant's contribution to the Company has been substantial and desires to assure the Company of the Consultant's continued help and assistance and to compensate him therefor; and WHEREAS, the Consultant is willing to serve the Company as Chairman of the Board and to perform the other duties hereinafter set forth during such periods and on such terms and conditions as are required to perform the duties thereof; NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, it is agreed as follows: 1. RETENTION. The Company hereby agrees to retain the Consultant as a consultant and the Consultant hereby agrees to serve the Company on the terms and conditions set forth herein for a period commencing on April 1, 1995 (the "Effective Date") and expiring on March 31, 1998 (unless extended or sooner terminated as hereinafter set forth). 2. POSITION AND DUTIES. The Consultant shall serve as Chairman of the Board as long as Consultant shall be elected to the Board. The Consultant shall report directly to the Board. The Consultant shall serve as Chairman of the Board during the term of the Consultant's contract and shall have such other powers and duties as may from time to time be prescribed by the Board, provided that such duties are consistent with the Consultant's position. Subject to Paragraph 4(e), the Consultant shall devote sufficient time and effort to perform the duties assigned by the Company and or the Board. With the prior consent of the Consultant, the Consultant also shall serve, if elected or appointed thereto, as a director of any of the Company's subsidiary affiliates or divisions. 3. PLACE OF PERFORMANCE During the term of the Consultant's contract, the Company shall maintain an office for the Consultant in the Company's Southern Division and shall make an office available for the Consultant at the principal executive headquarters of the Company in Bedminster, New Jersey. The Company shall not, without the written consent of the Consultant, relocate or transfer the Consultant's office. 4. COMPENSATION AND BENEFITS During the term of the Consultant's contract: (a) Annual Fee. The Consultant shall receive an annual fee at the rate of at least $150,000 or at such greater rate as the Board shall from time to time determine (the "Annual Fee") payable in substantially equal monthly installments on the 15th day of each month. Any increase in this Annual Fee or other compensation shall in no way limit or reduce any other obligation of the Company hereunder and, once established at an increased specified rate, the Annual Fee hereunder shall not thereafter be reduced. (b) Other Compensation. The Board may from time to time, in its sole discretion, award the Consultant such other compensation as it deems appropriate. (c) Expenses. The Company shall promptly pay (or reimburse the Consultant for) all reasonable expenses incurred by him in the performance of his duties hereunder. The Company shall provide the Consultant with the same vehicular transportation provided to the Consultant during the period that he served as Chief Executive Officer of the Company. (d) Benefit Plans and Arrangements. The Consultant shall be entitled to participate in or receive benefits under the health and medical plans of the Company in effect from time to time (including any health or medical plans made available to executives and key management employees) and the $500,000 life insurance policy which was in effect upon the Consultant's retirement from the Company shall be continued. The Company agrees that it will not make any changes in such plans, or arrangements, which would affect the Consultant's rights or benefits whereunder in a manner inconsistent with the treatment of the Company's executives and key management employees. The Board may permit the Consultant to participate in or receive benefits under any benefit plan made available by the Company in the future to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. No amount paid to the Consultant under any benefit plan, or arrangement, presently in effect or made available in the future, shall be deemed to be in lieu of compensation to the Consultant hereunder. (e) Monthly Availability. In the performance of his duties under the Contract, the Consultant shall make himself available to the Company on a mutually convenient basis for up to 110 hours in any calendar month. (f) Working Facilities. The Consultant shall be furnished with a private office, stenographic and other necessary secretarial assistance and such other facilities, amenities and services as are appropriate for Consultant's position as Chairman of the Board and adequate for the performance of his duties hereunder. (g) Extension. Notwithstanding anything to the contrary herein contained, in the event of a "Change in Control" (as hereinafter defined) of the Company: (i) the term of this Agreement shall be extended for a period of three years from the date of such Change in Control; and (ii) Consultant shall be compensated and shall receive the benefits provided in this Section 4. 5. UNAUTHORIZED DISCLOSURE. During the period of this contract, the Consultant shall not, except as required by any court, supervisory authority or administrative agency, without the written consent of the Board or a person authorized thereby, disclose to any person, other than an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Consultant of his duties as Chairman of the Board, any confidential information obtained by him while in the employ of the Company prior to this contract or during the term hereof, provided, however, that confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Consultant). In addition, for two years following the termination of employment hereunder, the Consultant shall not disclose any confidential information of the type described above except as required by any court, supervisory authority or administrative agency or with the consent of the Board, which shall not be unreasonably withheld. 6. TERMINATION. (a) Death. The agreement shall terminate upon the death of the Consultant. For purposes of this Agreement, the death of the Consultant shall be treated as termination of the contract by the Consultant. (b) Disability. If, as a result of Consultant's incapacity due to physical or mental illness, the Consultant shall be unable to perform his duties hereunder for six consecutive months and, within 30 days after written Notice of Termination is given, shall not have returned to the performance of his duties hereunder, the Company may terminate the Consultant's contract. (c) Cause. The Company may terminate the Consultant's contract for Cause. For the purposes of this Agreement, the Company shall have "Cause" to terminate the Consultant's contract hereunder upon (i) the willful failure by the Consultant to substantially perform his duties under Paragraph 5 hereof or (ii) the willful engaging by the Consultant in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to, personal dishonesty, incompetence, misconduct, breach of fiduciary duty involving personal profit, or violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order (other than any such failure resulting from his incapacity due to physical or mental illness, or any such actual or anticipated failure after the issuance of a Notice of Termination by the Consultant for Good Reason, as such terms are defined in Subparagraphs 6(e) and 6(d) hereof, respectively). For purposes of this Paragraph, no act, or failure to act, on the Consultant's part shall be considered "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Consultant shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Consultant a certified copy of a resolution, duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the Consultant and an opportunity for him, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Consultant was guilty of conduct set forth above in clause (i) or (ii) of this Subparagraph 6(c), and specifying the particulars thereof in detail. (d) Termination by the Consultant. The Consultant may terminate his contract hereunder (i) for Good Reason, (ii) if his health should become impaired to an extent that makes the continued performance of his duties hereunder hazardous to his physical or mental health or his life, or (iii) at any time by giving thirty (30) days' written notice to the Company of his intention to terminate. For purposes of this Agreement, "Good Reason" shall mean, after a Change in Control (as hereinafter defined) of the Company: (A) any assignment to the Consultant of any duties other than those contemplated by, or any limitation of the powers of the Consultant in any respect not contemplated by, Paragraph 2 hereof, (B) any removal of the Consultant from or any failure to re-elect the Consultant in any positions indicated in Paragraph 2 hereof, except in connection with termination of the Consultant's contract for Cause, disability, or by the Consultant other than for Good Reason, or as a result of the Consultant's death, (C) any failure by the Company to comply with Sector's 3 or 4 hereof, or (D) failure of the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Paragraph 8 hereof. (e) Notice of Termination. Any termination by the Company pursuant to subsection (b) or (c), above, or by the Consultant pursuant to subsection (d) above, shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Consultant's contract under the provision so indicated. For the purposes of this Agreement, no such termination shall be effective without such Notice of Termination. (f) Date of Termination. "Date of Termination" shall mean (i) if the Consultant's contract is terminated by death, the date of his death, (ii) if the Consultant's contract is terminated pursuant to Subparagraph (b) above, 30 days after Notice of Termination is given (provided that the Consultant shall not have returned to the performance of his duties during such 30-day period), (iii) if the Consultant's contract is terminated pursuant to Subparagraph (c) or (d), above, the date specified in the Notice of Termination, and (iv) if the Consultant's contract is terminated for any other reason, the date on which a Notice of Termination is given; provided, however, that in the case of a termination pursuant to clause (iv), if within 60 days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning that termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgement, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected). For the purposes hereof, if a Notice of Termination is given during the term of this Agreement, the Date of Termination shall be treated as having occurred during such term, notwithstanding the resolution of any dispute after the conclusion of such term. (g) Continued Retention; Nonwaiver. The continuation of the Consultant's contract during the term of this Agreement, and subsequent to an event constituting Good Reason hereunder, shall not constitute consent to such event or a waiver of any rights the Consultant may have under this Agreement. (i) For purposes of this Agreement, a "Change in Control" shall mean, unless the Board otherwise directs by resolution approved by a three-fourths vote of the entire membership thereof adopted prior thereto, (ii) a Change in Control of the Company occurring after the date hereof of a nature that would be reported by the Company as a Change in Control in response to Item 1(a) of a Current Report on Form 8-K pursuant to the Securities and Exchange Act of 1934 ("Exchange Act"), as in effect on the date hereof; or (iii) if any person or entity acquires conclusive or rebuttable control of the Company, (iv) any "person" (as that term is used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, is or becomes the beneficial owner (as that term is used is Section 13(d) of the Exchange Act), directly or indirectly, of 25 percent or more of the capital stock entitled to vote in the election of directors of the Company or their successors ("Voting Stock"); or (v) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason, other the death, disability or any mandatory retirement policy applicable to Incumbent Board members, to constitute at least a majority thereof provided, however, that any person becoming a director of the Company after the beginning of such period whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board shall for the purposes hereof, be considered as though such person were a member of the Incumbent Board; or (vi) there shall occur the sale of all or substantially all of the assets of the Company. No merger, consolidation, combination or corporate reorganization in which the owners of the Voting Stock prior to said merger, consolidation, combination or corporate reorganization own 75 percent or more of the resulting entity's Voting Stock shall be considered a Change in Control for the purposes of this Agreement, nor shall any purchases or contributions of Voting Stock made to, by or on behalf of the Employee Stock Ownership Plan, the Profit-Sharing Plan (401K) or any grantor trust established by the Company in connection with any of its excess benefit or deferred compensation plans, constitute a Change in Control for purposes of this Agreement. Notwithstanding anything in the foregoing to the contrary, no Change in Control of the employer shall be deemed to have occurred for purposes of this Agreement by virtue of any transaction or series of transactions which results in the Consultant, or any group (other than the group consisting of all shareholders of the Company), or other organization of persons related to, including or acting in concert with the Consultant, acquiring, directly or indirectly, control of the Company. 7. COMPENSATION UPON TERMINATION. (a) Death. If the Consultant's contract shall be terminated by reason of the Consultant's death, the Company shall pay, within 90 days thereof, to the Consultant's estate, as a lump sum, an amount equal to the Annual Fee through the end of the month in which such death shall have occurred, not yet paid through the date of the Consultant's death. This amount shall be exclusive of and in addition to any payments the Consultant's widow, beneficiaries or estate may be entitled to receive (whether in his capacity as a former employee of the Company or pursuant to this contract) pursuant to any pension, employee benefit plan or life insurance policy or program maintained by the Company. (b) Disability. During any period that the Consultant fails to perform his duties hereunder as a result of incapacity due to physical or mental illness, the Consultant shall continue to receive his full Annual Fee until the Consultant's contract is terminated pursuant to Paragraph 6(b) hereof, or until Consultant terminates his contract pursuant to paragraph 6(d) (ii) hereof, whichever first occurs. After termination, the Consultant shall be paid 100 percent of his Annual Fee at the rate then in effect for one year and thereafter an annual amount equal to 75 percent of his Annual Fee at the rate then in effect less, in each case, any disability payments otherwise payable by or pursuant to plans provided by the Company and actually paid to the Consultant (but not less than an aggregate annual amount of $100,000) in substantially equal monthly installments until the first to occur of the expiration of the term hereof, or the Consultant's death. (c) Cause. If the Consultant's contract shall be terminated for Cause the Company shall pay the Consultant his full Annual Fee through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligation to the Consultant under this Agreement. (d) Other. if the Company shall terminate the Consultants's contract other than pursuant to Paragraph 6(b) or (c) hereof or if the Consultant shall terminate his contract for Good Reason, then: (i) the Company shall pay to the Consultant in a single lump sum on the 30th day following the Date of Termination or, at the Consultant's election, provided such election is made by written notice to the Company at least 90 days prior to the Date of Termination, in substantially equal monthly installments over 36 months: (A) his full Annual Fee through the Date of Termination at the rate in effect at the time the Notice of Termination was given. (B) an amount equal to all payments which would otherwise be payable to Consultant from the Date of Termination through the termination of this Consulting Agreement (as set forth in Section 1) as if Consultant had remained a consultant through the expiration of the Consulting Agreement. (C) In the event that any payments made to the Consultant under this Agreement or otherwise ("Payments") are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code ("Code") ("Excise Tax"), then the Company shall pay the Consultant an additional amount ("Gross Up") such that the net amount retained by the Consultant after deduction of any Excise Tax on the Payments (prior to the payment of any Excise Tax) and any Federal, State and local income taxes and Excise Tax upon the Payments (after the payment of any Excise Tax) shall be equal to the Payments (prior to the payment of any Excise Tax). For purposes of determining the amount of the Gross Up, the Consultant shall be deemed to pay Federal, State and local income taxes at the highest marginal rate of taxation in the calendar year in which the Payment is to be made. State and local income taxes shall be determined based upon the state and locality of the Consultant's domicile on the Date of Termination. The determination of whether such Excise Tax is payable and the amount thereof shall be based upon the opinion of tax counsel selected by the Company and reasonably acceptable to the Consultant. If such opinion is not finally accepted by the Internal Revenue Service upon audit, then appropriate adjustments shall be computed (without interest but with Gross Up, if applicable) by such tax counsel based upon the final amount of the Excise Tax so determined. The amount shall be paid by the appropriate party in one lump cash sum within 30 days of such computation; and (ii) The Company shall maintain in full force and effect for the continued benefit of the Consultant for the full term of this Agreement all employee benefit plans and programs in which the Consultant was entitled to participate immediately prior to the date Notice of Termination was given, including, without limitation, life, disability, accident and health insurance plans or policies, provided that the Consultant's continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Consultant's participation in any such plans or programs is prohibited by operation of law or by the terms of such plans or programs as in effect immediately preceding the date Notice of Termination is given, the Company shall arrange to provide the Consultant with benefits substantially similar to those provided under such plans and programs. Except for any insurance policy purchased by the Company in accordance with Subparagraph (v) below or used by the employer to fund its excess benefit and deferred compensation plans under any grantor trust arrangement, at the end of the period of coverage, the Consultant shall have the option to have assigned to him at no cost and with no apportionment of prepaid premiums, any assignable insurance policy owned by the Company and relating specifically to the Consultant; and (iii) The Company shall continue to fund or pay the premiums applicable to the Consultant for any executive life insurance policy, death benefit contract or agreement in effect on the date immediately preceding the date Notice of Termination was given through the term of this Agreement. In the alternative, the Company may pay a single premium sufficient to fund the policy until the term of this Agreement shall have expired. Nothing contained in this Subparagraph (v) shall entitle the Consultant or his estate to death benefits or life insurance proceeds under any such executive life insurance policy, death benefit contract or agreement other than as may be provided under such policy, contract or agreement; and (iv) There shall be no requirement that the Consultant mitigate the amount of any payment provided for in this Paragraph 7 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Paragraph 7 be reduced by any compensation earned by the Consultant or benefits, including retirement benefits, as the result of employment by any other employer after the Date of Termination or otherwise; and (v) The Company shall reimburse Consultant for all legal fees and expenses incurred by him as a result of termination hereunder (including all such fees and expenses, if any, incurred in contesting or disputing any such termination, in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit hereunder); provided, that the Company shall only be obligated to so reimburse the Consultant if the Consultant is successful in the legal actions or other proceedings in which such fees and expenses were incurred. Reimbursement of such fees and expenses shall be made by the Company at the conclusion of the legal action or proceedings upon the Consultant's presentation to the Company of a statement of such fees and expenses prepared by Consultant's counsel under standard and customary methods; and (vi) should the Consultant elect to receive payments hereunder in installments over 36 months, the amount of the outstanding obligation shall be credited with interest on a monthly basis at a rate equal to the then current rate for one-year insured certificates of deposit at Citibank. 8. SUCCESSORS; BINDING AGREEMENT (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company by agreement in form and substance reasonably satisfactory to the Consultant, to expressly, absolutely and unconditionally assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any such assumption shall not relieve Company of any of its obligations hereunder. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall constitute Good Reason for termination of the contract by the Consultant. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Paragraph 8 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement and all rights of the Consultant hereunder shall inure to the benefit of and be enforceable by the Consultant's personal or legal representatives, executors, administrators, successors, heirs, distributee, devisee and legatees. If the Consultant should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Consultant's devisee, legatee, or other designee or, if there be no such designee, to the Consultant's estate. 9. NOTICES. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed as follows: If to the Consultant: John Kean 176 North Shore Point Vero Beach, FL 32963 If to the Company: NUI Corporation 550 Route 202-206 P.O. Box 760 Bedminster, NJ 07921 Attention: Corporate Secretary or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 10. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Consultant and such officer as may be designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. It is intended that the benefits payable hereunder shall be considered paid to the Consultant for past services to the Company and continuing services from the date hereof. Any payment provided for hereunder shall be paid net of any applicable income tax withholding required under Federal, State or local laws. 11. VALIDITY. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. Notwithstanding the termination of this Agreement, the parties shall be required to comply with any provisions hereof which contemplate compliance by one or both parties subsequent to such termination; and such termination shall not affect any liability or other obligation which shall have accrued prior to such termination. 12. COUNTERPARTS. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. ARBITRATION. Any dispute or controversy arising or in connection with this Agreement shall be settled exclusively by arbitration in the State of New Jersey in accordance with the rules of the American Arbitration Association then in effect. Notwithstanding the pendency of any such dispute or controversy, the Company will, to the extent provided in subparagraph 6(f) & (g), continue to pay the Consultant's full compensation in effect when the Notice giving rise to the dispute was given (including, but not limited to, the Annual Fee) and, to the extent permitted by law, continue Consultant as a participant in all benefit and insurance plans in which the Consultant was participating when the Notice giving rise to the dispute was given, until the dispute is finally resolved. Amounts paid under this paragraph are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement. Judgment may be entered on the arbitrator's award in any court of competent jurisdiction. 14. CONSTRUCTION. The validity, interpretation, construction and performance of this Agreement shall be governed by the substantive laws of the State of New Jersey. The Consultant hereby submits and consents to the exclusive jurisdiction of the State and Federal courts of New Jersey in connection with all lawsuits arising out of this Agreement. 15. CAPTIONS. The paragraph captions in this Agreement are for convenience of reference only and do not define, limit or describe the scope or intent of this Agreement or any part hereof and shall not be considered in any construction hereof. 16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement, and supersedes all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. Attest: NUI Corporation By /S/ JOSEPH P. COUGHLIN /S/ RICHARD J. O'NEILL Corporate Secretary /S/ JOHN KEAN DISTRIBUTION ELECTION I hereby revoke all prior distribution elections under this Agreement. All amounts payable to me in accordance with Paragraph 7(d) of this Agreement shall be payable as follows (initial only one item): X in a single lump sum payment; in substantially equal monthly installments over 36 months. Dated: March 29, 1995 Signature /S/ JOHN KEAN EX-10.41 10 EXHIBIT 10(xli) AMENDED AND RESTATED NUI CORPORATION DEFERRED COMPENSATION PLAN 1. Purpose. The purpose of the NUI Corporation Deferred Compensation Plan (the "Plan") is to provide to a select group of management personnel of NUI Corporation, its divisions and subsidiaries (the "Company") the ability to defer all or a portion of cash incentive compensation awards. 2. Administration. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee shall have full authority to designate participants in the Plan and to interpret the Plan. All determinations made by the Committee shall be final and binding. 3. Participants. The Committee shall have full authority to designate, from time to time, those employees that are eligible to participate in the Plan. Initially, all officers of the Company shall be eligible to participate in the Plan. Eligible employees who participate in the Plan are referred to herein as "Participants". 4. Deferred Compensation. Any Participant may elect, in accordance with the provisions of Section 6 below, to defer the receipt of all or a portion of the Participant's incentive cash compensation awarded and payable by the Company in any calendar year. The Committee may in its discretion establish a minimum and maximum amount and/or percentages of such incentive compensation that can be deferred pursuant to the Plan. The Company shall maintain records of the compensation deferred for each Participant, including all investment earnings on such deferred compensation ( an "Account"). The Company shall provide each Participant a statement no less frequently than annually indicating the current balance in the Account and all Account earnings for the prior period. 5. Investment of Deferred Amounts. All amounts in the Account of a Participant shall be credited at least annually with interest at a rate equal to the thirty (30) day high grade unsecured commercial paper rate, as published in The Wall Street Journal on the first business day of the calendar month prior to such interest being credited. Interest shall continue to be credited to a Participant's Account until the Account has been fully distributed to a Participant or the Participant s beneficiary or beneficiaries, as applicable. 6. Election to Defer Compensation. A Participant may elect to defer incentive cash compensation by delivering to the Committee a notice, signed by the Participant, no later than January 1 of the calendar year in which the compensation to be deferred is otherwise payable to the Participant. Such election, and any subsequent election, will continue until suspended or modified in a notice delivered to the Committee. Both a new election and a notice of suspension shall only apply to compensation payable to the Participant after the end of the calendar year in which such new election or notice of suspension is delivered to the Committee. The Committee may prescribe the election form to be used by Participants. Unless amended or suspended in accordance with the provisions of the immediately preceding paragraph, all elections to defer compensation pursuant to the Plan shall be irrevocable. 7. Payment of Deferred Amount. (a) If so designated on the Participant's election form, amounts deferred under the Plan and interest thereon shall be distributed to the Participant in the manner previously selected by the Participant, as follows: (i) on the January 31st immediately following Participant's termination of employment if such termination of employment is by reason of retirement; (ii) on a date certain selected by the Participant, as previously established in the Participant's election form. Election forms indicating a date certain for the distribution of deferred compensation and interest thereon shall only be valid with respect to the next succeeding incentive cash compensation payment. (b) Unless an election made in accordance with section 7 (a) above is applicable, a Participant's Account balance shall be distributed to the Participant (or the Participant's estate or beneficiary, as applicable) on the first to occur of the following events: (i) the Participant's retirement; (ii) upon the permanent and total disability of the Participant; (iii) upon the death of the Participant; or (iv) upon the voluntary or involuntary termination of the Participant's employment with the Company (subject to the forfeiture provisions of Section 10 of the Plan). (c) Anything to the contrary in the Plan notwithstanding, a Participant shall have the right to petition the Committee for the distribution of all or part of the Participant's Account in the event of a financial hardship. For purposes of the Plan, a "financial hardship" shall be deemed to mean a significant need for financial assistance in order to (i) satisfy medical expenses for the Participant, the Participant's spouse or a dependent which expenses are not covered by insurance; (ii) avoid the eviction of the Participant from his or her principal residence or avoid the foreclosure on the mortgage secured by Participant's principal residence; (iii) satisfy commitments or other obligations directly related to the education of the Participant's children; or (iv) satisfy any other financial requirements arising from circumstances which the Committee determines to be a financial hardship on the Participant. The Committee shall have the authority to determine, in its sole discretion, whether a financial hardship exists and to grant or deny a Participant's request for the distribution of all or part of the Participant's Account. The Committee may review such information as it deems appropriate to render its decision on any such request, and the determination of the Committee shall be final and binding. 8. Form of Payment Payments of or from a Participant's Account shall be made in the following manner: (a) In the event of a Participant's termination of employment due to retirement or death, the Account shall be distributed either (i) in a lump sum , or (ii) upon the request of the Participant (or Participant's estate, in the event of death) and approval by the Committee, in substantially equal monthly installments over a five (5) year period. (b) In the event of a Participant's termination of employment for any reason other than retirement or death, a Participant's Account shall be distributed in a lump sum within thirty (30) days of termination (subject to the forfeiture provisions of Section 10). Unless an election accelerating or deferring receipt of a Participant's Account balance is valid and in effect, distributions under the Plan shall be made or commence within thirty (30) days of the termination of the Participant's employment. 9. Participant's Rights Unsecured. The right of a Participant or a Participant's designated beneficiary to receive a distribution under the Plan shall be an unsecured claim against the general assets of the Company, and neither the Participant or the Participant's designated beneficiary shall have any rights in or against any amount credited to the Participant's Account or any other specific assets of the Company. An Account may not be pledged, assigned or otherwise encumbered by the Participant or any beneficiary. 10. Forfeiture of Account. All rights which a Participant or beneficiary shall have with respect to the Participant's Account shall be immediately forfeited (i) upon the termination of the Participant's employment for acts which, in the reasonable judgment of the Committee, constitute intentional wrongdoing on the part of the Participant resulting in a loss to the Company; or (ii) in the event that the Participant shall enter into a business or employment which the Committee, in its reasonable judgment, determines to be directly competitive with the Company and substantially injurious to the Company's financial interest. 11. Amendment and Termination. The Board of Directors of the Company may at any time, and from time to time, amend, suspend or terminate the Plan, in whole or in part. No such action, however, may reduce or eliminate a Participant's or beneficiary's entitlement previously accrued under the Plan. 12. Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of New Jersey. ELECTION TO DEFER COMPENSATION Name: _______________________ (Please Print) In accordance with the Amended and Restated NUI Corporation Deferred Compensation Plan (the "Plan"), I understand that I may elect to defer twenty-five percent (25%), fifty percent (50%), seventy-five (75%), or one hundred percent (100%), but not less than five thousand dollars ($5,000.00) of any annual incentive award which may be payable to me. I also understand that such election must be made on or before the last day of the calendar year immediately prior to the calendar year in which the award is payable. In accordance with this understanding and based upon the provisions of the Plan, I hereby make the following election for incentive cash awards which may be payable to me during calendar year 1996: SECTION 1 - ELECTION TO PARTICIPATE _____ I do not wish to have any incentive compensation deferred. ____ I hereby elect to defer ___25% ___50% ___75% ___100% of any incentive cash award made to me during calendar year 1996. I understand that at least $5,000 will be deferred, even if that amount represents a greater percentage of my incentive award than selected above. SECTION 2 - FUTURE PAYMENT DATE I hereby elect to have the deferred amount of my 1996 award paid to me as follows (select one): _____ Upon the first to occur of (i) my retirement, (ii) my permanent and total disability, (iii) my death, or (iv) upon my termination of employment with NUI Corporation, its divisions or subsidiaries (the Company"). _____ On the January 31st following my retirement from the Company. (Note: If employment is terminated prior to retirement, payment will be made upon termination of employment). _____ On the following date: ______________________________ (Note: You may select any date, but payment will be made earlier than the selected date if (i) your employment terminates other than for retirement, or (ii) you die after your retirement from the Company and prior to the selected date). _________________________ _________________________ (Date) (Signature) EX-21 11 EXHIBIT 21 SUBSIDIARIES OF NUI CORPORATION Essel Corporation (a Florida corporation) and Utility Billing Services, Inc. (a New Jersey corporation) are wholly-owned subsidiaries of NUI Corporation. Natural Gas Services, Inc. (a Delaware corporation) is a wholly-owned subsidiary of Essel Corporation. EX-23 12 EXHIBIT NO. 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated November 14, 1995, included in this Form 10-K, into the Company's previously filed Registration Statements File No. 33-51459, File No. 33-57183, File No. 33-24169 and File No. 33-56509. ARTHUR ANDERSEN LLP New York, New York December 20, 1995 EX-27 13
UT YEAR SEP-30-1995 SEP-30-1995 PER-BOOK 448,071 17,128 81,530 63,436 0 610,165 0 139,093 3,921 140,912 0 0 222,060 37,935 0 0 128 0 11,114 1,631 196,385 610,165 376,445 3,127 349,700 352,586 23,859 439 24,298 18,781 5,517 0 5,517 8,296 7,522 47,919 .60 .60
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