Exhibit 10.18
 
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NJR ENERGY SERVICES COMPANY
 
Deferred Stock Retention Award Agreement
 
This Deferred Stock Retention Award Agreement (the "Agreement"), which includes
the attached “Terms and Conditions of Deferred Stock,” confirms the grant on
November 11, 2008 (the “Grant Date”) by NJR ENERGY SERVICES COMPANY, a New
Jersey corporation (the "Company"), to STEPHEN D. WESTHOVEN ("Employee"), under
Section 6(e) of the 2007 Stock Award and Incentive Plan (the "Plan"), of
Deferred Stock as follows:
 
Based upon his or her contribution to the success of NJR ENERGY SERVICES COMPANY
(“NJRES”) in fiscal year 2008, Employee is hereby awarded a deferred stock
retention award (“Retention Award”) of 11,309.019 deferred stock units of New
Jersey Resources Corporation (“NJR”) common stock issued under the Plan
(“Deferred Stock”). No dividends or distributions on NJR Common Stock will be
applied to the Deferred Stock.
 
Beginning on November 11, 2011, the Retention Award will be paid to Employee in
quarterly installments on the following schedule:
 
Payout Date
On
Number of Shares
November 11, 2011
2,827.255
 
February 11, 2012
2,827.255
 
May 11, 2012
2,827.255
 
August 11, 2012
2,827.255
 
Total Payout
11,309.019
 

 
This payout will be in the form of fully transferable shares of NJR common
stock. In addition, if not previously forfeited, the Retention Award will be
paid in full upon a Change in Control, and will be immediately paid upon the
occurrence of certain events relating to Disability and death to the extent
provided in Section 3 of the attached Terms and Conditions.
 
Conditions to Retention Award: Employee is not required to continue his/her
employment with NJRES in order to receive distribution of the Retention Award.
However, NJRES' obligation to pay the Retention Award and Employee's right to
distribution of the Retention Award are conditioned upon the following:
•    
Employee shall not compete with the energy trading and wholesale energy
operations of NJRES in any geographical area where NJRES is doing business
including, but not limited to, competition by engaging in energy trading and
wholesale energy operations with, or on behalf of, yourself or any person,
corporation, partnership or any other business entity;

•    
Employee shall not solicit any NJRES customers, vendors or employees including,
but not limited to, interaction with existing or prospective customers, vendors
or employees of NJRES that takes place in an effort to establish, maintain
and/or further a business relationship with such customers, vendors or
employees, diversion of a customer's or prospective customer's business from
NJRES or other interference with NJRES' business with an existing or prospective
customer, vendor or employee, even if such customer, vendor or employee
initiates contact with you;

•    
Employee shall not disclose any confidential information related to NJR's or any
of its subsidiaries' business plans or practices;

•    
Employee shall not make any statements, either verbally or in writing, that are
disparaging with regard to NJR or any of its subsidiaries (including, but not
limited to, NJRES) or their respective executives and Board members; and

•    
Employee shall not engage in any financial or other misconduct that results in
the termination of Employee's employment for “Cause.” For purposes of this
letter, "Cause" means (A) conviction of a felony or the entering by Employee of
a plea of nolo contendere to a felony charge, (B) Employee's gross neglect,
willful malfeasance or willful gross misconduct in connection with Employee's
employment hereunder which has had a significant adverse effect on the business
of NJR or any of its subsidiaries, unless Employee reasonably believed in good
faith that such act or non-act was in or not opposed to the best interests of
NJR or any of its subsidiaries, or (C) repeated material violations by Employee
of his or her obligations under any applicable employment agreement or policy of
NJR or any of its subsidiaries, which have continued after written notice
thereof from NJR or any of its subsidiaries, which violations are demonstrably
willful and deliberate on Employee's part and which result in material damage to
NJR or any of its subsidiaries' business or reputation.

 
If it is determined by the Leadership Development and Compensation Committee of
the NJR Board of Directors that Employee has engaged in any of the above
activities prior to full distribution of the Retention Award, any unpaid portion
of the Retention Award will be forfeited.
 
The value of the Retention Award will not be taxable to Employee until it is
distributed and will, at that time, be equal to the value of the current fair
market value of the shares of NJR common stock. Required withholding taxes will
be deducted in the form of shares from the share payout as described in Section
7(c) of the attached Terms and Conditions, unless Employee has elected at least
90 days prior to payout to satisfy the tax obligations by other means.
 
The Retention Award will not be considered as compensation for purposes of any
pension or retirement plan, or other plan that provides for benefits based on
Employee's level of compensation.
 
The Retention Award 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 of employee of NJR or any of its subsidiaries for any
period of time, or at any particular rate of compensation.
 
The validity, construction, and effect of this Agreement and the Retention Award
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.
 
If any provision in this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will in no way be affected or impaired thereby. In the event that any
provision of this Agreement is not enforceable in accordance with its terms,
such provision shall be reformed to make it enforceable in a manner which
provides NJR and its subsidiaries the maximum rights permitted by law.
 
The terms of this Retention Award are governed by the Plan and this Agreement,
including the attached Terms and Conditions. Capitalized terms used in this
Agreement but not defined herein shall have the same meanings as in the Plan.
 
Employee acknowledges and agrees that (i) receipt of a copy of the Plan and
agrees to be bound by all the terms and provisions thereof, (ii) the Deferred
Stock is nontransferable, except as provided in Section 2 of the attached Terms
and Conditions and Section 11(b) of the Plan, (iii) the Deferred Stock is
subject to forfeiture as described above in certain limited circum-stances prior
to payout, and (iv) sales of the shares following payout of the Deferred Stock
will be subject to the Company's policy governing the purchase and sale of NJR
securities.
 

 

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IN WITNESS WHEREOF, NEW JERSEY ENERGY SERVICES COMPANY has caused this Agreement
to be executed by its officer thereunto duly authorized, and Employee has duly
executed this Agreement, by which each has agreed to the terms of this
Agreement.
 
    
 
 
/s/ Laurence M. Downes
LAURENCE M. DOWNES
Chairman and Chief Executive Officer

 
Acknowledged
/s/ Stephen D. Westhoven
 
December 30, 2008
STEPHEN D. WESTHOVEN
 
Date

 
 
 

 

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TERMS AND CONDITIONS OF DEFERRED STOCK
 
The following Terms and Conditions apply to the Deferred Stock granted to
Employee by NJR ENERGY SERVICES COMPANY (the "Company"), as specified in the
Deferred Stock Retention Award Agreement (of which these Terms and Conditions
form a part). Certain terms and conditions of the Retention Award, including the
number of shares granted and payment date(s), are set forth on the preceding
pages, which are an integral part of this Agreement.
 
1.    General. The Deferred Stock is granted to Employee under the Company's
2007 Stock Award and Incentive Plan (the "Plan"), a copy of which has been
previously delivered to Employee and/or is available upon request to the Human
Resources 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. 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.    Nontransferability. Until such time as the Deferred Stock has been
distributed in accordance with the terms of this Agreement, Employee may not
transfer Deferred Stock 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. This restriction on transfer precludes any sale,
assignment, pledge, or other encumbrance or disposition of the shares of
Deferred Stock (except for forfeitures to the Company).
 
3.    Early Payment Provisions. The following provisions will govern the payment
of the Deferred Stock that is outstanding at the time of Employee's death or
Disability:
 
(a)    Death. In the event of Employee's death, the unpaid Deferred Stock will
be paid immediately to the Employee's Beneficiary.
 
(b)    Disability. In the event of Employee's Disability (as defined below), the
unpaid Deferred Stock will be paid immediately to the Employee.
 
"Disability" means Employee has been unable to engage in any substantial gainful
activity for a period of six consecutive months by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
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 con-clusive for all purposes of this
Agreement.
 
 
4.    Dividends and Adjustments.
 
(a)    Dividends. No dividends or distributions on NJR Common Stock will be
applied to the Deferred Stock.
 
(b)    Adjustments. The number and kind of shares of Deferred Stock, the number
of such shares to be distributed and other terms and conditions of Deferred
Stock or otherwise contained in this Agreement, other than the time and form of
payment of the Deferred Stock, shall be appropriately adjusted, in order to
prevent dilution or enlargement of Employee's rights hereunder, to reflect any
changes in the number of outstanding shares of Common Stock resulting from any
event referred to in Section 11(c) of the Plan, taking into account any Deferred
Stock or other amounts paid or credited to Employee in connection with such
event under Section 4(a) hereof, in the sole discretion of the Committee subject
to the requirements of Code Section 409A. The Committee may determine how to
treat or settle any fractional share resulting under this Agreement.
 

 

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5.    409A Award. The Deferred Stock payable under the Agreement is a 409A Award
and is subject to all applicable terms and conditions set forth in Section 11(k)
of the Plan. All provisions of the Agreement shall be interpreted in a manner as
to comply with Section 11(k) of the Plan and Code Section 409A.
 
6.    Other Terms of Deferred Stock.
 
(a)    Voting and Other Shareholder Rights. Employee shall not be entitled to
vote Deferred Stock on any matter submitted to a vote of holders of Common
Stock, and shall not have all other rights of a shareholder of the Company until
the Deferred Stock is distributed to Employee as described in the Agreement.
 
(b)    Consideration for Grant of Deferred Stock. Employee shall not be required
to pay cash consideration for the grant of the Deferred Stock, but Employee's
performance of services to the Company prior to the payout of the Deferred Stock
shall be deemed to be consideration for this grant of Deferred Stock.
 
(c)    Insider Trading Policy Applicable. Employee acknowledges that sales of
shares resulting from Deferred Stock that have been distributed will be subject
to the Company's policies governing the purchase and sale of Company securities.
 
(d)    Certificates Evidencing Deferred Stock. On the date any Deferred Stock
subject to the Retention Award becomes payable (the “Payment Date”), such
Deferred Stock shall be paid by the Company delivering to the Employee, a number
of shares of NJR common stock equal to the number of shares of Deferred Stock
that become payable upon that Payment Date. The Company shall issue the shares
either (i) in certificate form or (ii) in book entry form, registered in the
name of the Employee. Delivery of any certificates will be made to the
Employee's last address reflected on the books of the Company unless the Company
is otherwise instructed in writing. Neither the Employee nor any of the
Employee's successors, heirs, assigns or personal representatives shall have any
further rights or interests in any Deferred Stock that are so paid.
 
(e)     Stock Powers. Employee agrees to execute and deliver to the Company one
or more stock powers, in such form as may be specified by the General Counsel,
authorizing the transfer of the Deferred Stock to the Company, at the Grant Date
or upon request at any time thereafter.
 
7.    Employee Representations and Warranties and Release. As a condition to any
non-forfeiture of the Deferred Stock that would be distributed to Employee upon
Disability, the Company may require Employee (i) to make any representation or
warranty to the Company as may be required under any applicable law or
regulation, and (ii) to execute a release from claims against the Company
arising at or before the date of such release, in such form as may be specified
by the Company.
 
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 Deferred Stock, and supersedes any prior agreements or documents with
respect to the Deferred Stock. 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
Deferred Stock shall be valid unless expressed in a written instrument executed
by Employee. All amendments must comply with the requirements of Code Section
409A.
 
(b)    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.
 
(c)    Mandatory Tax Withholding. Unless otherwise determined by the Committee,
at the time of payment of the Deferred Stock to Employee, the Company will
withhold from any Shares deliverable, in accordance with Section 11(d)(i) of the
Plan, the number of Shares having a value nearest to, but not exceeding, the
amount of income and employment taxes required to be withheld under applicable
local 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 payment of
the Deferred Stock.
 
(e)    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, and any notice to Employee shall be addressed to
Employee at Employee's address as then appearing in the records of the Company.
 
(f)    Shareholder Rights. Employee and any Beneficiary shall not have any
rights with respect to Shares (including voting rights) covered by this
Agreement prior to the settlement and distribution of the Shares as specified
herein.