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