ex10_fii.htm


    
      

    

    Exhibit
10.f.ii.

    

      SOUTH
JERSEY INDUSTRIES, INC.

      


      SUPPLEMENTAL
EXECUTIVE RETIREMENT PROGRAM

      


      


      Amended
and Restated Effective January 1, 2009


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Recent History & Purpose
of Amendments & Restatements:

      


      This
January 1, 2009 amendment and restatement of the Program amends the Program to
comply with the applicable requirements of section 409A of the
Code.

      


      The
February 1, 2003 amendment changed the definition of “Final Average
Compensation” to clarify that for the purposes of the Program’s benefit
calculation, annual cash will be considered as part of compensation in the year
earned, without regard to when that annual cash might be actually paid or
deferred.

      


      The
December 1, 2001 amendment modified the definition of “Company” so that Officers
elected on or after December 1, 2001, other than officers elected in South
Jersey Industries and/or South Jersey Gas Company, would not be covered by the
Program.  The Accrued Benefit for Officers of other subsidiary
companies, who attained eligible status by reaching fifty (50) years of age
while an Officer of any of the companies listed under the pre December 1, 2001
amendment, remain eligible for Program benefits and are unaffected by this
modification.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      

        SOUTH JERSEY INDUSTRIES,
INC.

        


        SUPPLEMENTAL EXECUTIVE
RETIREMENT PROGRAM

        


        TABLE OF
CONTENTS

         

      

      
        	 	 	 	 	Page
	 	 	 	 	 
	
                I.

              	 
      	
                PURPOSE

              	 
      	
                1

              
	 
      	 
      	 
      	 
      	 
      
	
                II.

              	 
      	
                DEFINITIONS

              	 
      	
                1

              
	 
      	 
      	 
      	 
      	 
      
	
                III.

              	 
      	
                DETERMINATION
      OF PROGRAM BENEFITS

              	 
      	
                3

              
	 
      	 
      	 
      	 
      	 
      
	
                IV.

              	 
      	
                PROTECTION
      OF CONFIDENTIAL INFORMATION: NONCOMPETITION

              	 
      	
                6

              
	 
      	 
      	 
      	 
      	 
      
	
                V.

              	 
      	
                CLAIMS
      PROCEDURES

              	 
      	
                7

              
	 
      	 
      	 
      	 
      	 
      
	
                VI.

              	 
      	
                MISCELLANEOUS

              	 
      	
                8

              
	 
      	 
      	 
      	 
      	 
      
	
                ATTACHMENT
      “A”

              	 
      	
                12

              
	
                ATTACHMENT
      “B”

              	 
      	
                14

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SOUTH JERSEY INDUSTRIES,
INC.

      


      SUPPLEMENTAL EXECUTIVE
RETIREMENT PROGRAM

      


      I.    
        PURPOSE.  The
Company previously established this Program for the purpose of providing
retirement income benefits to designated Officers of the Company.  The
Program was originally effective October 1, 1983, and amended and restated
effective January 1, 1989, September 1, 1991, July 1, 1997, December 1, 2001,
February 1, 2003 and January 1, 2009.  The intention of the Company is
that the Program be at all times maintained on an unfunded basis for federal
income tax purposes under the Code and administered as a “top hat” plan exempt
from the substantive requirements of ERISA.  Except as otherwise
provided, all capitalized terms shall have the meanings set forth in Section II
below.

      


      The
Program is hereby amended and restated effective January 1, 2009 to comply with
the applicable requirements of section 409A of the Code.  The portion
of an Officer’s Accrued Benefit attributable to amounts earned and vested for
purposes of section 409A of the Code as of December 31, 2004 are intended to be
grandfathered for purposes of section 409A of the Code.  Pursuant to
section 409A of the Code, this portion is calculated as the present value of the
amount to which the Officer would have been entitled under the Program if the
Officer voluntarily terminated services without cause on December 31, 2004 and
received a payment of the benefits available under the Program on the earliest
possible date allowed under the Program to receive a payment of benefits
following the termination of services and received the benefits in the form with
the maximum value.  The portion of an Officer’s Accrued Benefit
attributable to amounts that were not earned and vested for purposes of section
409A of the Code as of December 31, 2004 and the portion of an Officer’s Accrued
Benefit attributable to amounts accrued on and after January 1, 2005 are subject
to section 409A of the Code and shall administered and interpreted in compliance
with section 409A of the Code.

      


      II.            DEFINITIONS.

      


      
        	
                 
      

              	
                (a)

              	
                “Accrued
      Benefit” shall mean a vested right to benefits under the Program which
      shall commence upon an Officer’s attaining age fifty (50) while employed
      by the Company or death after attaining age fifty (50) and while employed
      by the Company.  The “Accrued Benefit” shall be equivalent to
      two percent (2%) of Final Average Compensation per Year of Service
      (inclusive of both the Pension Plan and the Program) up to the maximum
      stipulated in Section III (a)(1) below, plus an additional five percent
      (5%) of Final Average Compensation.

              


      

      


      
        	
                 
      

              	
                (b)

              	
                “Actuarial
      Equivalent” shall mean that all benefit forms payable under this Program
      shall be the actuarial equivalent of a life annuity with six years
      guaranteed.  The actuarial factors used in making those
      determinations shall be the applicable actuarial factors specified in the
      Pension Plan.

              


      

      


      
        	
                 
      

              	
                (c)

              	
                “Board”
      shall mean the Board of Directors of South Jersey Industries,
      Inc.

              


      

      


      
        	
                 
      

              	
                (d)

              	
                “Change
      in Control” for the exclusive purposes of this Program, shall mean any of
      the following: (1) approval by the shareholders of the Company without the
      recommendation and approval of the Board of any plan or proposal for the
      consolidation, merger, liquidation, dissolution or acquisition of the
      Company or all or substantially all of its assets; (2) election to the
      Board who constitute a majority of the directors, different from the
      individuals who as of the Effective Date constituted the entire Board (the
      “original Board”), unless those individuals were recommended for election
      as directors by a majority of the original Board, or by successor
      directors recommended by the original Board; or (3) the acquisition by any
      person of twenty percent (20%) or more of the stock of the Company having
      general voting rights in the election of directors (for purposes of this
      clause (3), the term “person” shall include any individual or entity or
      any combination of two or more individuals or entities acting as a group
      within the meaning of section 13(d) of the Securities Exchange Act of
      1934, as amended for the purpose of acquiring, holding or disposing of
      stock of the Company).

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (e)

              	
                “Code”
      shall mean the Internal Revenue Code of 1986, as amended and the
      regulations promulgated thereunder.

              


      

      


      
        	
                 
      

              	
                (f)

              	
                “Committee”
      shall mean the Compensation/Pension Committee as appointed by the Board to
      administer the Program pursuant to Section VI (a)
    hereunder.

              


      

      


      
        	
                 
      

              	
                (g)

              	
                “Company”
      shall mean South Jersey Industries, Inc., South Jersey Energy Solutions,
      LLC and South Jersey Gas Company.

              


      

      


      
        	
                 
      

              	
                (h)

              	
                “Effective
      Date” shall mean January 1, 2009, the effective date of this amendment and
      restatement of the Program. The Program was originally effective October
      1, 1983, and previously amended and restated effective January 1, 1989,
      September 1, 1991, July 1, 1997, December 1, 2001, and February 1,
      2003.

              


      

      


      
        	
                 
      

              	
                (i)

              	
                “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as
      amended.

              


      

      


      
        	
                 
      

              	
                (j)

              	
                “Final
      Average Compensation” shall mean an Officer’s average total cash
      compensation (salary plus annual incentive bonus earned and paid before
      any reduction for amounts deferred by the Officer pursuant to a defined
      contribution plan maintained by the Company that qualifies under section
      401(a) of the Code and satisfies the requirements of section 401(k) or
      section 125 of the Code, or pursuant to any other nonqualified plan which
      permits the voluntary deferral of compensation) for the highest thirty-six
      (36) consecutive calendar months of the final sixty (60) months prior to
      the earliest of the Officer’s actual retirement, death or
      disability.

              


      

      


      
        	
                 
      

              	
                (k)

              	
                “Grandfathered
      Amount” shall mean the portion of an Officer’s Accrued Benefit
      attributable to amounts earned and vested for purposes of section 409A of
      the Code as of December 31, 2004.  Pursuant to section 409A of
      the Code, this portion is calculated as the present value of the amount to
      which the Officer would have been entitled under the Program if the
      Officer voluntarily terminated services without cause on December 31, 2004
      and received a payment of the benefits available under the Program on the
      earliest possible date allowed under the Program to receive a payment of
      benefits following the termination of services and received the benefits
      in the form with the maximum
value.

              


      


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (l)

              	
                “Officer”
      shall mean Chief Executive Officer, President, Executive Vice Presidents,
      Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents,
      Secretary, Assistant Secretaries, Treasurer, Assistant Treasurers,
      Controller and Assistant Controllers of the Company, or other officers as
      prescribed by the Bylaws of the Company from time to time, who have
      attained the age of fifty (50) and who have executed the Supplemental
      Executive Retirement Agreement, substantially in the form attached hereto
      as Attachment
      “A”.

              


      

      


      
        	
                 
      

              	
                (m)

              	
                “Pension
      Plan” shall mean the Retirement Plan for Employees of South Jersey
      Industries, Inc. as identified in the plan document for the Pension
      Plan.

              


      

      


      
        	
                 
      

              	
                (n)

              	
                “Program”
      shall mean the Supplemental Executive Retirement Program of the Company as
      set forth in this document, including any and all amendments hereto and
      restatements hereof.

              


      

      


      
        	
                 
      

              	
                (o)

              	
                “Separation
      from Service” shall mean an Officer’s “separation from service” with the
      Company within the meaning of such term under section 409A of the
      Code.

              


      

      


      
        	
                 
      

              	
                (p)

              	
                “Year
      of Service” shall mean any calendar month of service during which the
      employee was working at a rate which would yield 1,000 hours of service
      for the year measured from anniversaries of date of
  hire.

              


      

      


      III.     
     DETERMINATION OF PROGRAM
BENEFITS.

      


      The
Company agrees to pay a Program benefit to an Officer under the following
circumstances and conditions:

      


      
        	
                 
      

              	
                (a)

              	
                Normal Retirement
      Benefit.  Subject to Section III (b) below, the benefit
      payable to an Officer eligible under this Program shall be as
      follows:

              


      

      


      
        	
                 
      

              	
                (1)

              	
                A
      benefit of two percent (2%) of the Officer’s Final Average Compensation,
      multiplied by the Officer’s Years of Service (not to exceed thirty (30)
      years), inclusive of the Pension Plan benefit; except in the instance
      where the Pension Plan benefit yields a percentage of Final Average
      Compensation calculated on the basis of a life annuity with six years
      guaranteed in excess of sixty percent (60%), whereas, in such case, the
      higher qualified Pension Plan benefit shall be payable, plus an additional
      five percent (5%) of the Final Average Compensation.  (See Attachment
      “B”.)

              


      

      


      
        	
                 
      

              	
                (2)

              	
                An
      Officer’s Accrued Benefit under this Section III (a) attributable to the
      Grandfathered Amount shall be paid at the same time and in the same form
      as the Officer’s accrued benefit under the Pension Plan.  An
      Officer’s Accrued Benefit under this Section III (a) attributable to the
      non-Grandfathered Amount shall commence on the later of the first day of
      the month immediately following (A) the Officer’s Separation from Service
      or (B) the date on which the Officer attains age fifty-five (55), and
      shall be paid (I) in the form of a life annuity with six years guaranteed
      to an Officer who is unmarried as of the date payment is to commence and
      (II) in the form of a fifty percent (50%) joint and survivor annuitant
      option for the spouse of the Officer without any actuarial reduction, for
      both the Program and the Pension Plan, for an Officer who is married as of
      the date payment is to commence. Notwithstanding
      the foregoing, at the time payment is to commence under this Section III
      (a)(2), an Officer shall be permitted to choose from among such Actuarial
      Equivalent optional forms of annuity payment in lieu of the automatic form
      of payment described in the preceding sentence as the Company may
      offer.

              


      


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (3)

              	
                An
      Officer’s Accrued Benefit under this Section III (a) shall be supplemented
      to the extent necessary to ensure that the Officer receives a benefit
      under this Program which is at least equal to the benefit that would have
      been paid to the Officer under the Pension Plan had that benefit been
      determined without regard to the limit on compensation taken into account
      under the Pension Plan imposed by section 401(a)(17) of the Code and
      without regard to the limit on benefits payable under the Pension Plan
      imposed by section 415 of the Code.

              


      

      


      
        	
                 
      

              	
                (4)

              	
                To
      the extent permitted under section 409A of the Code, an Officer may defer
      the date on which payment of his Accrued Benefit attributable to
      non-Grandfathered Amounts is to commence up to two times by submitting a
      deferred payment election form to the Committee in such form and manner as
      the Committee may determine.  An Officer’s election to defer the
      payment commencement date shall be effective only if:  (A) the
      Committee receives the deferred payment election form at least twelve (12)
      full months before payment of the Officer’s Accrued Benefit under the
      Program is to commence, (B) the deferred payment election is not effective
      for a period of twelve (12) months from the date made, (C) the date on
      which payment of the Officer’s Accrued Benefit is deferred for a period of
      five years from the date payment of the Officer’s Accrued Benefit
      otherwise would have commenced and (D) the deferred payment election does
      not result in an impermissible acceleration of payment as described in
      section 409A of the Code.

              


      

      


      
        	
                 
      

              	
                (b)

              	
                Early Retirement
      Reduction.  Notwithstanding any provision of the Program
      to the contrary, if an Officer commences receiving payment prior to his
      attainment of age sixty (60), unless the Board determines otherwise, the
      amount of the Officer’s annual benefit shall be equal to the normal
      retirement benefit, as calculated under Section III (a) above, multiplied
      by one hundred percent (100%) minus one-sixth of one percent (1/6%) for
      each month by which the date on which the date of commencement of payment
      of the Officer’s Accrued Benefit precedes the Officer’s sixtieth (60th)
      birthday.

              


      

      


      With
respect to an Officer’s Accrued Benefit under the Program, the Board at the
recommendation of the Committee may waive all or a portion of the early
retirement penalty stipulated in this Section III (b).  In such
instance, when the Board has waived early retirement penalties, all early
retirement penalties or reductions shall be eliminated under the Program and the
Pension Plan and the Officer shall be made whole through the
Program.  The offset for Pension Plan benefits will, however, be net
of any applicable early retirement reductions imposed under the Pension
Plan.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (c)

              	
                Disability
      Benefit.  If an Officer receives disability benefits
      under insurance provided by the Company, the Officer shall continue to
      accumulate service for purposes of the Program benefit as calculated under
      Section III (a) above until the first day following the expiration of the
      six month period beginning on the date of the Officer’s disability at
      which time the Officer shall be deemed to have incurred a Separation from
      Service.  Notwithstanding the preceding sentence, if the
      Officer’s Separation from Service occurs prior to the Officer’s attainment
      of age 55, the Officer shall continue to accumulate service for purposes
      of the Program benefit as calculated under Section III (a) above until the
      earlier of the date on which the Officer recovers from his disability or
      the date on which the Officer attains age 55.  The benefit shall
      be based on Final Average Compensation determined to the date of
      disability.  An Officer’s Accrued Benefit under this Section III
      (c) at the time specified in Section III (a)(2)
  above.

              


      

      


      
        	
                 
      

              	
                (d)

              	
                Death
      Benefit.  If an Officer dies after attaining age fifty
      (50) while employed by the Company, but before commencement of payment of
      the Officer’s Accrued Benefit hereunder, the Officer’s surviving spouse
      shall be entitled to an annual survivor pension equal to fifty percent
      (50%) of the Officer’s Accrued Benefit calculated in accordance with
      Section III (a) above, and without the application of any early retirement
      penalty reduction as described in Section III (b) above.  The
      benefit payable to the surviving spouse under this Section III (d)
      attributable to the Grandfathered Amount shall commence at the same time
      and in the same form as the death benefit under the Pension
      Plan.  The benefit payable to the surviving spouse under this
      Section III (d) attributable to the non-Grandfathered Amount shall be paid
      to the surviving spouse in a lump sum in an amount that is Actuarially
      Equivalent to the benefit described under this Section III (d) within
      sixty (60) days following the date of the Officer’s
  death.

              


      

      


      
        	
                 
      

              	
                (e)

              	
                Six Month Delay for
      Specified Employees.  Notwithstanding any provision of
      this Program to the contrary, if an Officer is a “specified employee” of
      the Company within the meaning of such term under section 409A of the Code
      at the time of the Officer’s Separation from Service and if payment of any
      benefit under the Program attributable to non-Grandfathered Amounts is
      required to be postponed for a period of six months after Separation from
      Service pursuant to section 409A of the Code, payment of such amount shall
      be postponed as required by section 409A of the Code, and the accumulated
      postponed amount shall be credited with interest at the prime rate
      published in the Wall
      Street Journal on date of the Officer’s Separation from Service for
      the period beginning on the first day of the month following the Officer’s
      Separation from Service and ending on the date payment is
      made.  Payment of the accumulated postponed amount plus interest
      shall be paid in a lump sum payment within ten (10) days after the end of
      the six (6)-month period.  If the Officer dies during the
      postponement period prior to the payment of postponed amount, the amounts
      withheld on account of section 409A shall be paid to the Officer’s
      surviving spouse or their authorized designee within sixty (60) days after
      the date of the Officer’s death.  A “specified employee” shall
      mean an employee who, at any time during the twelve (12)-month period
      ending on the identification date, is a “specified employee” under section
      409A of the Code, as determined by the Board or its
      delegate.  The determination of specified employees, including
      the number and identity of persons considered specified employees and the
      identification date, shall be made by the Board or its delegate in
      accordance with the provisions of sections 416(i) and 409A of the
      Code.

              


      


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      IV.           PROTECTION OF CONFIDENTIAL
INFORMATION: NONCOMPETITION.

      


      In view
of the fact that the Officer’s work with the Company brings the Officer in close
contact with many confidential affairs of the Company, including matters of a
business nature such as information about costs, profits, markets, sales, plans
for future development and other information not readily available to the
public, the Officer who agrees to participate in the Program also
agrees:

      


      
        	
                 
      

              	
                (a)

              	
                to
      keep confidential during and after the Officer’s employment by the Company
      all matters of and information relating to the Company, and not to
      disclose them to anyone outside of the Company under any circumstances, or
      to anyone within the Company who is not in a position where the Officer
      needs to know such information;

              


      

      


      
        	
                 
      

              	
                (b)

              	
                to
      deliver promptly to the Company on termination of the Officer’s
      employment, or at any time that the Company may so request, all memoranda,
      notes, records, reports and other documents (and all copies thereof)
      relating to the business of the Company which the Officer may then possess
      or have under the Officer’s control;
and

              


      

      


      
        	
                 
      

              	
                (c)

              	
                during
      the term of the Officer’s employment and for a period of ten (10) years
      thereafter, not directly or indirectly to (1) enter the employ of, or
      render any services to, any person, firm or corporation engaged in any
      business competitive with the business of the Company in any area serviced
      by the Company or in which the Company does business; (2) engage in such
      business for the Officer’s own account; or (3) become interested in any
      such business as an individual, partner, director, Officer, principal,
      agent, employee, trustee, consultant or in any other relationship or
      capacity.  Anything to the contrary herein notwithstanding, the
      Officer may be retained as an independent advisor and consultant to the
      President of the Company as to such matters as the President of the
      Company may from time to time request; provided that in the event the
      Officer is retained as an independent advisor and consultant, no payment
      shall be made to such Officer under the Program unless such Officer has a
      Separation from Service.

              


      


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      V.         
  CLAIMS
PROCEDURES.

      


      
        	
                 
      

              	
                (a)

              	
                Claim.  Any
      person or entity claiming a benefit, requesting an interpretation or
      ruling under the Program (hereinafter referred to as “claimant”), or
      requesting information under the Program shall present the request in
      writing to the Committee, which shall respond in writing as soon as
      practical.

              


      

      


      
        	
                 
      

              	
                (b)

              	
                Denial of
      Claim.  If the claim or request is denied, the written
      notice of denial shall state:

              


      

      


      
        	
                 
      

              	
                (1)

              	
                The
      reason(s) for denial;

              


      

      


      
        	
                 
      

              	
                (2)

              	
                Reference
      to the specific Program provisions on which the denial is
      based;

              


      

      


      
        	
                 
      

              	
                (3)

              	
                A
      description of any additional material or information required and an
      explanation of why it is necessary;
and

              


      

      


      
        	
                 
      

              	
                (4)

              	
                An
      explanation of the Program’s claim review procedures and the time limits
      applicable to such procedures, including the right to bring a civil action
      under section 502(a) of ERISA.

              


      

      


      
        	
                 
      

              	
                (c)

              	
                Review of
      Claim.  Any claimant whose claim or request is denied or
      who has not received a response within sixty (60) days may request a
      review by notice given in writing or in electronic form to the
      Committee.  Such request must be made within sixty (60) days
      after receipt by the claimant of the written notice of denial, or in the
      event the claimant has not received a response, sixty (60) days after
      receipt by the Committee of the claimant’s claim or
      request.  The claim or request shall be reviewed by the
      Committee which may, but shall not be required to, grant the claimant a
      hearing.  On review, the claimant may have representation,
      examine pertinent documents, and submit issues and comments in
      writing.

              


      

      


      
        	
                 
      

              	
                (d)

              	
                Final
      Decision.  The decision on review shall normally be made
      within sixty (60) days after the Committee’s receipt of claimant’s claim
      or request.  If an extension of time is required for a hearing
      or other special circumstances, the claimant shall be notified and the
      time limit shall be one hundred twenty (120) days.  The decision
      shall be in writing or in electronic form and
  shall:

              


      

      


      
        	
                 
      

              	
                (1)

              	
                state
      the specific reason(s) for the
denial;

              


      

      


      
        	
                 
      

              	
                (2)

              	
                reference
      the relevant Program provisions;

              


      

      


      
        	
                 
      

              	
                (3)

              	
                state
      that the claimant is entitled to receive, upon request and free of charge,
      and have reasonable access to and copies of all documents, records and
      other information relevant to the claim for benefits;
  and

              


      

      


      
        	
                 
      

              	
                (4)

              	
                state
      that the claimant may bring an action under section 502(a) of
      ERISA.

              


      

      


      All
decisions on review shall be final and binding on all parties
concerned.


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      VI.           MISCELLANEOUS.

      


      
        	
                 
      

              	
                (a)

              	
                Administration of
      Program.  The Program shall be administered by the
      Committee.  The Committee shall have full power, discretion and
      authority to recommend interpretation, construction and administration of
      the Program and any part thereof to the Board.  The Committee
      may recommend to the Board employment of legal counsel, consultants,
      actuaries and agents, as it deems desirable, in the administration of the
      Program, and may rely on the opinion(s) of such counsel, the advice of
      such consultants, and the computations of such
      actuary(ies).  The Committee shall have such rights, duties and
      privileges under the Program as are allocated to the Trust Committee under
      the Pension Plan.

              


      

      


      
        	
                 
      

              	
                (b)

              	
                Arbitration.  Any
      controversy or claim arising out of or related to this Program that
      remains after exhaustion of the claims procedures set forth in Section V
      above, including any rights to benefits which have accrued under this
      Program, or the interpretation, construction or administration of the
      Program, shall be settled by arbitration in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association, and judgment
      upon the award rendered by the Arbitrators is binding and may be entered
      in any Court having jurisdiction
thereof.

              


      

      


      
        	
                 
      

              	
                (1)

              	
                The
      arbitration panel shall consist of three arbitrators, one appointed by
      each party, and a third, neutral arbitrator appointed by the first two
      arbitrators.

              


      

      


      
        	
                 
      

              	
                (2)

              	
                Each
      party shall appoint its arbitrator within fourteen days after the filing
      of the Demand for Arbitration, and the third arbitrator shall be appointed
      within ten days thereafter.

              


      

      


      
        	
                 
      

              	
                (3)

              	
                The
      third, neutral arbitrator, shall serve as chairman of the arbitration
      panel.

              


      

      


      
        	
                 
      

              	
                (4)

              	
                All
      decisions of the arbitration panel, including the award, must be by at
      least a majority.

              


      

      


      
        	
                 
      

              	
                (c)

              	
                Amendment, Suspension
      and Termination.  The Program may be amended, suspended,
      or terminated in whole or in part at any time and from time to time by the
      Board.  No such amendment, suspension or termination shall
      retroactively impair or otherwise adversely affect the rights of any
      person to whom benefits are payable under this Program that have accrued
      prior to that date.

              


      

      


      
        	
                 
      

              	
                (d)

              	
                Change in
      Control.  Upon a Change in Control, the Company shall, as
      soon as possible, but in no event longer than forty-five (45) days
      following the Change in Control, make an irrevocable contribution to a
      Rabbi Trust or, other comparable funding vehicle in an amount that is
      equal to one hundred twenty percent (120%) of the amount necessary to pay
      each program participant or beneficiary the benefits accrued for the
      Program participants and their beneficiaries under the terms of the
      Program on the date of the Change in Control, determined using the same
      actuarial assumptions and methods as are used in funding the Pension
      Plan.

              


      


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (e)

              	
                Proof of Date of
      Birth.  In order to be eligible to receive payments under
      this Program, the Officer, or the Officer’s surviving spouse seeking
      benefits under Section III (d) of this Program shall provide written proof
      of the date of birth of the Officer to the
  Committee.

              


      

      


      
        	
                 
      

              	
                (f)

              	
                Notices.  Each
      Officer or surviving spouse or their authorized designee shall be
      responsible for furnishing the Committee with the current and proper
      address for the mailing of notices, reports and benefit
      payments.  Any notice required or permitted to be given shall be
      deemed given if directed to the person to whom addressed at such address
      and mailed by regular United States mail, first-class and
      prepaid.  If any check mailed to such address is returned as
      undeliverable to the addressee, mailing of checks will be suspended until
      the Officer or surviving spouse furnishes proper
  address.

              


      

      


      
        	
                 
      

              	
                (g)

              	
                Nonalienation of
      Benefits.  All amounts payable under the Program shall be
      made only to the person or persons designated by the Program and not to
      any other person or corporation.  No part of an Officer’s
      benefit shall be liable for the debts, contracts, or engagements of any
      Officer, the Officer’s surviving spouse, or successors in interest and,
      except as hereinafter provided with respect to family disputes, the rights
      of any Officer under this Program are personal and may not be subject to
      execution by levy, attachment, or garnishment or by any other legal or
      equitable proceeding.  In addition, the Officer, the Officer’s
      surviving spouse, or successors in interest, shall have no right to
      assign, anticipate, commute, transfer, pledge or encumber any Program
      benefits or payments in any manner whatsoever.  If any Officer,
      surviving spouse or successor in interest is adjudicated bankrupt or
      purports to anticipate, alienate, sell, transfer, assign, pledge,
      encumber, or charge any distribution or payment from the Program,
      voluntarily or involuntarily, the Committee, in its discretion, may cancel
      such distribution or payment (or any part thereof) to or for the benefit
      of such Officer, the Officer’s surviving spouse or successor in interest
      in such manner, as the Committee shall direct.  The provisions
      of the Program shall inure to the benefit of each Officer and the
      Officer’s surviving spouse, heirs, executors, administrators or successors
      in interest.  In cases of family disputes, the Company will
      observe the terms of the Program unless and until ordered to do otherwise
      by a state or federal court.  As a condition of participation,
      an Officer agrees to hold the Company harmless from any claim that arises
      out of the Company’s obeying the final order of any state or federal
      court, whether such order effects a judgment of such court or is issued to
      enforce a judgment or order of another court.  For purposes of
      this Section VI (g), “family dispute” means a dispute relating to
      provision of child support, alimony payments, or marital property rights
      to a spouse, former spouse or other dependent of the
    Officer.

              


      

      


      
        	
                 
      

              	
                (h)

              	
                Withholding.  The
      Company may make such provisions and take such actions as it may deem
      necessary or appropriate for the withholding of federal, state or local
      taxes with respect to amounts payable under this Program, including the
      withholding of appropriate amounts from benefits payable to an Officer or
      the Officer’s surviving spouse or their authorized
      designee.  The Officer, the Officer’s surviving spouse or their
      authorized designee shall be responsible for the payment of all individual
      tax liabilities relating to any
benefits.

              


      


      
        
           


        

        
          9

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (i)

              	
                Reliance on
      Data.  The Company, the Committee and all other persons
      associated with the Program’s operation shall have the right to rely on
      the veracity and accuracy of any required written data provided by the
      Officer or the surviving spouse including representation of age, health
      and marital status.

              


      

      


      
        	
                 
      

              	
                (j)

              	
                No Contract of
      Employment.  Neither the establishment of the Program,
      nor any modification thereof, nor the payment of any benefits shall be
      construed as giving any Officer the right to be retained in the service of
      any entity constituting the Company, and all Officers shall remain subject
      to discharge to the same extent as if the Program had never been
      adopted.

              


      

      


      
        	
                 
      

              	
                (k)

              	
                Unfunded Status of
      Program.  The Program is intended to constitute an
      “unfunded” deferred compensation plan for the Officers.  Nothing
      contained in the Program, and no action taken pursuant to the Program,
      shall create or be construed to create a trust of any kind.  The
      Company shall reflect on its books each Officer’s interest hereunder, but
      neither an Officer, the Officer’s surviving spouse, their designees nor
      any other person shall under any circumstances acquire any property
      interest in any specific assets of the Company.  Nothing
      contained in this Program and no action taken pursuant hereto shall create
      or be construed to create a fiduciary relationship between the Company and
      an Officer or any other person.  An Officer’s right to receive
      payments under the Program shall be no greater than the right of an
      unsecured general creditor of the Company.  All payments shall
      be made from the general funds of the Company, and no special or separate
      fund shall be established and no segregation of assets shall be made to
      assure payment.

              


      

      


      
        	
                 
      

              	
                (l)

              	
                Severability of
      Provisions.  If any provision of this Program shall be
      held invalid or unenforceable, such invalidity or unenforceability shall
      not affect any other provisions hereof, and this Program shall be
      construed and enforced as if such provisions had not been
      included.

              


      

      


      
        	
                 
      

              	
                (m)

              	
                Controlling
      Law.  This Program shall be construed and enforced
      according to the laws of the State of New Jersey without reference to the
      principles of conflict of laws, to the extent not preempted by federal
      law, which shall otherwise control.

              


      

      


      
        	
                 
      

              	
                (n)

              	
                Effect on Other
      Plans.  Any benefit payable under the Program shall not
      be deemed salary or other compensation for the purpose of computing
      benefits under any employee benefit plans or other arrangements of the
      Company for the benefit of its
employees.

              


      


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (o)

              	
                Section 409A of the
      Code.  The Program is intended to comply with the
      applicable requirements of section 409A of the Code, and shall be
      administered in accordance with section 409A of the
      Code.  Notwithstanding provision of the Program to the contrary,
      distributions under the Program shall only be made in a manner, and upon
      an event, permitted by section 409A of the Code.  If a payment
      is not made by the designated payment date under the Program, the payment
      shall be made by December 31 of the calendar year in which the designated
      date occurs.  Distributions upon termination of employment shall
      only be made upon an Officer’s “separation from service” within the
      meaning of such term under section 409A of the Code.  To the
      extent that any provision of the Program would cause a conflict with the
      requirements of section 409A of the Code, or would cause the
      administration of the Program to fail to satisfy the requirements of
      section 409A of the Code, such provision shall be deemed null and void to
      the extent permitted by applicable law.  An Officer shall not
      designate the calendar year of a payment except in accordance with the
      rules relating to payment elections under section 409A of the
      Code.

              


      

      



      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      ATTACHMENT
"A"

      


      SOUTH JERSEY INDUSTRIES,
INC.

      


      SUPPLEMENTAL EXECUTIVE
RETIREMENT AGREEMENT

      


      This
Agreement dated ____________________ between South Jersey Industries, Inc., a
New Jersey Corporation, (hereinafter Referred to as the “Company”‘), and
_______________________________________________, an Officer of the Company who
resides at _________________________________.

      


      WITNESSETH:

      


      In
consideration of the Officer’s employment by the Company hereinafter and of the
covenants hereinafter set forth, it is mutually agreed as follows:

      


      
        	
                 
      

              	
                2.

              	
                OFFICER’S
      SERVICES.  The OFFICER shall
      faithfully, and to the best of the Officer’s ability, devote all of the
      Officer’s working time exclusively to the performance of such services for
      the COMPANY as may
      be assigned to the Officer from time to time under written employment
      agreements or otherwise and the OFFICER shall not, for
      remuneration or profit, directly or indirectly render any service to, or
      undertake any employment for, any other person, firm or corporation,
      without first obtaining the written consent of the President and Chief
      Executive Officer of the COMPANY.

              


      

      


      
        	
                 
      

              	
                3.

              	
                PROGRAM
      RETIREMENT INCOME.  The COMPANY agrees to
      provide the OFFICER with a
      Supplemental Executive Retirement Program as outlined in the Program
      documents attached as Exhibit
A.

              


      


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                4.

              	
                ASSIGNABILITY.  This
      Agreement shall inure to the benefit of any assignee of the COMPANY, and the OFFICER specifically
      agrees, on demand, to execute any and all necessary documents reasonably
      requested in connection therewith.

              


      

      


      
        	
                 
      

              	
                5.

              	
                ENTIRE
      AGREEMENT.  This
      Agreement (including Exhibit A) constitutes the entire understanding
      between the parties hereto with reference to the subject matter hereof and
      shall not be changed or modified except by a written instrument signed by
      both parties.  This agreement amends and restates all prior
      agreements between the COMPANY and the OFFICER relating to the
      Supplemental Executive Retirement Program.  Otherwise, all
      existing contracts of employment between the COMPANY and the OFFICER shall survive
      the making of this Agreement and, except to the extent amended hereby,
      remain in full force and effect.

              


      

      


      IN WITNESS WHEREOF, the COMPANY has caused this
Agreement to be executed in duplicate by a proper and duly authorized
representative thereof, and the OFFICER has signed this
Agreement in duplicate, as of the day and year first above written.

      


      


      
        	
                SOUTH JERSEY INDUSTRIES,
    INC.

              	 	
                OFFICER

              
	 
      	 	 	 
      	 
	
                By:

              	 	 	
                By:

              	 
	
                Title:

              	 	 	
                Title:

              	 


      


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      ATTACHMENT
"B"

      


      SAMPLE
CALCULATION

      


      OFFICER
RETIREMENT PROJECTION

      AT
RETIREMENT DATE OF 1/1/08

      


      I.  FINAL
AVERAGE COMPENSATION

      


      
        	 
      	 	
                2007

              	 	 	
                2006

              	 	 	
                2005

              	 	 	 	 
	
                Base
      Salary

              	 	 	225,000	 	 	 	215,000	 	 	 	200,000	 	 	 	 
	
                Annual
      Cash

              	 	 	45,000	 	 	 	43,000	 	 	 	40,000	 	 	 	 
	 
      	 	
                 

              	 	 	
                 

              	 	 	
                 

              	 	 	 	 
	
                Totals

              	 	 	270,000	 	 	 	258,000	 	 	 	240,000	 	 	 	 
	
                FAC

              	 	 	 	 	 	 	 	 	 	 	 	 	 	$	256,000.00	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 


      

      


      II.  YEARS
OF SERVICE @ RETIREMENT DATE

      


      


      
        	
                doh

              	 	
                9/3/72

              	 	 	
                term

              	 	 	
                12/31/07

              	 	 	 	 
	
                dor

              	 	
                1/01/08

              	 	 	 	
              	 	 	 	
              	 	 	 	35.33	 


      

      


      III.  ANNUAL
PENSION BENEFIT

      (from
Pension Plan & Program)

      


      
        	
                Years
      of Service @ 2% for each service year

              	 	 	0.7066	 
	
                With
      incremental 5% Program benefit

              	 	 	0.7566	 
	
                Program
      maximum w/5% increment

              	 	 	0.65	 
	
                Pension
      Benefit Before Early Retirement Penalty

              	 	$	166,400.00	 
	
                Less:  0%
      Early Retirement Penalty

              	 	$	0.00	 
	 
      	 	 	 	 
	
                Annual
      Pension Benefit

              	 	$	166,400.00	 
	
                Monthly
      Pension Benefit

              	 	$	13,866.67	 


      

       

    

     

    14