Document:

EX-10.1

 

Exhibit 10.1

NEW JERSEY RESOURCES CORPORATION

2007 Stock Award and Incentive Plan

Stock Option Agreement

     This Stock Option Agreement (the “Agreement”), which includes the attached “Terms and
Conditions of Option Grant” (the “Terms and Conditions”), confirms the grant on                      ___, 200___
(the “Grant Date”) by NEW JERSEY RESOURCES CORPORATION, a New Jersey corporation (the “Company”),
to                      (“Employee”) under Section 6(b) of the 2007 Stock Award and
Incentive Plan (the “Plan”), of a non-qualified stock option (the “Option”) to purchase shares of
Stock (the “Option Shares”), as follows:

Option Shares purchasable:                              shares of Stock

Exercise Price:          $                    per share of Stock

Option vests and becomes exercisable: The Option shall vest and become exercisable as to 25%
of the Option Shares, cumulatively, on each of the first, second, third, and fourth
anniversaries of the Grant Date (rounded to the nearest whole Share); provided, however,
that the Option will become immediately vested and exercisable upon the occurrence of
certain events relating to Termination of Employment, in accordance with Section 4 of the
attached Terms and Conditions, and any unvested portion of the Option will automatically
become fully vested and exercisable upon a Change in Control.

Expiration Date:                      ___, 20___(the “Stated Expiration Date”) or, in the event of
Termination of Employment (as defined in Section 4 of the attached Terms and Conditions),
the date the Option ceases to be exercisable under Section 4 of the attached Terms and
Conditions (the earlier of which time is the “Expiration Date”). [If, at the date on which
the Option or any portion thereof is to expire or terminate, the Fair Market Value of an
Option Share exceeds the Exercise Price and if the Option or portion thereof that will
expire or terminate is otherwise exercisable, the Option shall be automatically exercised by
the withholding of Option Shares acquired on such exercise to pay the exercise price and
applicable withholding taxes.]

     The Option is subject to the terms and conditions of the Plan and this Agreement, including
the attached Terms and Conditions. The number and kind of shares of Stock purchasable, the
Exercise Price, and other terms and conditions are subject to adjustment in accordance with Section
11(c) of the Plan. 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) the Option is nontransferable, except as
provided in Section 6 of the attached Terms and Conditions and Section 11(b) of the Plan, (ii) the
Option is subject to forfeiture in the event of Employee’s Termination of Employment in certain
circumstances, as specified in Section 4 of the attached Terms and Conditions, and (iii) sales of
shares of Stock acquired on exercise of the Option will be subject to the Company’s policy
regulating trading by employees.

     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], an individual	 	 

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TERMS AND CONDITIONS OF OPTION GRANT

     The following Terms and Conditions apply to the Option granted to Employee by NEW JERSEY
RESOURCES CORPORATION (the “Company”), as specified in the Stock Option Agreement (of which these
Terms and Conditions form a part). Certain specific terms of the Option, including the number of
shares of Stock purchasable, vesting, the Stated Expiration Sate and Expiration Date, and Exercise
Price, are set forth on the cover page hereto, which is an integral part of this Agreement.

     1. General. The Option is granted to Employee under the Company’s 2007 Stock Award and
Incentive Plan (the “Plan”), which has previously been 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 Units, 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. The Option is a non-qualified stock option (not an incentive
stock option as defined under Section 422 of the Internal Revenue Code of 1986, as amended).

     2. Right to Exercise Option. Subject to all applicable laws, rules, regulations and the terms
of the Plan and this Agreement, Employee may exercise the Option only after the time and to the
extent the Option has become vested and exercisable and prior to or on the Expiration Date of the
Option.

     3. Method of Exercise. To exercise the Option, Employee must (a) give written notice to the
Vice President, Corporate Services or Secretary of the Company or any other officer or agent
(including any third-party administrator) as the Company may designate, which notice shall
specifically refer to this Agreement, state the number of Option Shares as to which the Option is
being exercised, and the name in which he or she wishes the shares of Stock thereby acquired to be
issued, which notice shall be signed by Employee, and (b) pay in full to the Company the Exercise
Price of the Option for the number of shares of Stock being purchased either (i) in cash (including
by check), payable in United States dollars, (ii) by delivery of shares of Stock by Employee or, if
then permitted by the Company, by directing the Company to withhold shares of Stock acquired on
such exercise having a Fair Market Value, determined as of the date the Option is exercised, equal
to all or the part of the aggregate Exercise Price being paid in this way, or (iii) in any other
manner then permitted by the Committee. Once Employee gives notice of exercise, such notice may
not be revoked. When Employee exercises the Option, or part thereof, the Company will transfer
shares of Stock to Employee in certification form or make such a transfer (or make a
non-certificated credit) to Employee’s brokerage account at a designated securities brokerage firm
or otherwise deliver shares of Stock to Employee. No Employee or Beneficiary shall have at any
time any rights with respect to shares of Stock covered by this Agreement prior to the valid
exercise as specified herein, and no adjustment shall be made for dividends or other rights for
which the record date is prior to such valid exercise.

     4. Termination Provisions. The following provisions will govern the vesting, exercisability
and expiration of the Option in the event of Employee’s Termination of Employment (as defined
below) at a time that the Option remains outstanding, unless the Committee determines to provide
more favorable terms (in this regard, Employee shall be entitled to any more favorable terms
provided in any valid employment agreement or other agreement with the Company):

     (a) Death or Disability. In the event of Employee’s Termination of Employment due to
death or Disability (as defined below), any unvested portion of the Option, to the extent
then outstanding, will vest and become immediately exercisable in full, and the Option will
remain exercisable, in accordance with Section 11(b) of the Plan, until the earlier of one
year after such Termination of Employment or the Stated Expiration Date, at which time the
Option will terminate.

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     (b) Retirement. In the event of Employee’s Termination of Employment due to Retirement
(as defined below), the Option, to the extent then outstanding, will not be forfeited, but
will remain outstanding until the date that is the earlier of one year after such
Termination or the Stated
Expiration Date, at which time the Option will terminate; provided, however, that any
portion of the Option not exercisable as of the date of Termination will become exercisable
at the date upon which it would have vested had Employee continued to be employed by the
Company through that date if that date occurs on or before the date the Option will
terminate; and provided further, that any portion of the Option that is not vested at the
date of Termination will not become vested thereafter by operation of this provision and
will terminate upon Termination.

     (c) Termination by the Company Without Cause. In the event of Employee’s Termination
of Employment by the Company without Cause (as defined below), the portion of the
then-outstanding Option not vested and exercisable at the date of Termination will
terminate, and any portion of the then-outstanding Option that is vested and exercisable at
the date of Termination will terminate at the earlier of three months after Termination of
Employment or the Stated Expiration Date.

     (d) Termination by the Company for Cause. In the event of Employee’s Termination of
Employment by the Company for Cause (as defined below), the Option, whether or not then
vested and exercisable, immediately will terminate.

     (e) Termination by the Employee Voluntarily. In the event of Employee’s voluntary
Termination of Employment, the portion of the then-outstanding Option not vested and
exercisable at the date of Termination will terminate, and any portion of the
then-outstanding Option that is vested and exercisable at the date of Termination will
terminate at the earlier of three months after Termination of Employment or the Stated
Expiration Date.

     (f) Certain Definitions. The following definitions apply for purposes of this
Agreement:

     (i) “Cause” means (A) Employee’s 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
his employment hereunder which has had a significant adverse effect on the business
of the Company and 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 the
Company, or (C) repeated material violations by Employee of his or her obligations
under any applicable employment agreement or Company policy which have continued
after written notice thereof from the Company, which violations are demonstrably
willful and deliberate on Employee’s part and which result in material damage to the
Company’s business or reputation.

     (ii) “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.

     (iii) “Retirement” means retirement on a normal, early or postponed retirement
date within the meaning of the Corporation’s pension plan applicable to the Employee
at the date of grant.

     (iv) “Subsidiary” means any subsidiary corporation of the Company within the

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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. Employee Representations and Warranties Upon Exercise and Related Terms. As a condition to
the exercise of the Option, the Company may require Employee to make any representation or warranty
to the Company as may be required under any applicable law or regulation.

     6. Nontransferability. Employee may not transfer the Option or any rights hereunder to
any third party other than by will or the laws of descent and distribution, and, during Employee’s
lifetime, only Employee or his or her duly appointed guardian or legal representative may exercise
the Option, except for transfers to a Beneficiary in the event of death or as otherwise permitted
and subject to the conditions under Section 11(b) of the Plan.

     7. 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 Option, and supersedes any
prior agreements or documents with respect to the Option. 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 Option shall be valid unless expressed in
a written instrument executed by Employee.

     (b) No Promise of Employment. The Option 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) Tax Withholding. Unless otherwise determined by the Committee, Employee must make
arrangements satisfactory to the Company to pay or provide for payment of withholding taxes
due upon exercise of the Option. The Committee may require or permit Employee to elect to
have the Company withhold from the shares of Stock deliverable upon exercise of the Option
the number of whole shares of Stock having a Fair Market Value not exceeding the amount of
income and employment taxes required to be withheld under applicable laws and regulations,
and pay the Fair Market Value of such withheld shares of Stock in cash to the appropriate
taxing authorities. Employee will be responsible for any withholding taxes not satisfied by
means of such withholding and for all taxes in excess of such withholding taxes that may be
due upon exercise of the Option.

     (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, or the officer designated by the Company as responsible for
administration of this Agreement, and any notice to Employee shall be addressed to Employee
at Employee’s address as then appearing in the records of the Company.

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     (f) Shareholder Rights. Employee and any Beneficiary shall not have any rights with
respect to shares of Stock (including voting rights) purchasable upon exercise of the Option
prior to the valid exercise of the Option.

6EX-10.2

 

Exhibit 10.2

NEW JERSEY RESOURCES CORPORATION

2007 Stock Award and Incentive Plan

Performance Units Agreement

          This Performance Units Agreement (the “Agreement”), which includes the attached “Terms and
Conditions of Performance Units” (the “Terms and Conditions”) and the attached Exhibit A captioned
“Performance Goal and Earning of Performance Units”, 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 Units (the “Units”), including rights to
Dividend Equivalents as specified herein, as follows:

          Target Number Granted:                                Units (“Target Number”)

How Units are Earned and Vest: The Units, if not previously forfeited, (i) will be
earned, if and to the extent that the Performance Goal defined on Exhibit A to this
Agreement are achieved, with the corresponding number of Units earned (ranging from 0%
to 150% of the Target Number) as specified on Exhibit A, and (ii) will vest as to the
number of Units earned if Employee continues to be employed by the Company or a
Subsidiary through                      ___, 200___(the “Stated Vesting Date”). In addition, if not
previously forfeited, upon a Change in Control the Units will be deemed earned in an
amount equal to the greater of the Target Number or the number of Units to be granted
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 the stock of
the Company remains publicly traded after the Change in Control, any Units not earned
will remain potentially earnable in accordance with the terms of this Agreement. In
addition, if not previously forfeited, the Units 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 Units have become non-forfeitable whether or not
there occurs a voluntary Termination of Employment by Employee. If the Performance
Goal is not met (or not fully met) and the Units are not otherwise deemed earned by the
Earning Date (as defined below), the Units (or the unearned portion of the Units) will
be immediately forfeited. If Employee has a Termination of Employment prior to a
Stated Vesting Date and the Units are not otherwise deemed earned and vested by that
date, the Units will be immediately forfeited except as otherwise provided in Section 4
of the attached Terms and Conditions. Forfeited Units cease to be outstanding and in
no event will thereafter result in any delivery of shares of Stock to Employee.

Performance Goal and Earning Date: The Performance Goal and Earning Date, and the number of
Units earned for specified levels of performance at the Earning Date, shall be as
specified in Exhibit A hereto.

Settlement: Units that are to be settled hereunder, including Units credited as a result of
Dividend Equivalents, will be settled by delivery of one share of Stock, for each Unit
being settled. Settlement shall occur at the time specified in Section 6 of the
attached Terms and Conditions.

          The Units are subject to the terms and conditions of the Plan and this Agreement, including
the Terms and Conditions of Performance Units attached hereto and deemed a part hereof. The number
of Units and the kind of shares deliverable in settlement and other terms and conditions of the
Units 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 Units are nontransferable, except as
provided in Section 3 of the attached Terms and Conditions and Section 11(b) of the Plan, (ii) the
Units 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.

          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
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

[Name], an individual
	 	 

2

 

TERMS AND CONDITIONS OF PERFORMANCE UNITS

     The following Terms and Conditions apply to the Performance Units granted to Employee by NEW
JERSEY RESOURCES CORPORATION (the “Company”) and Units resulting from Dividend Equivalents (as
defined below), if any, as specified in the Performance Units Agreement (of which these Terms and
Conditions form a part). Certain terms of the Units, including the number of Units 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 Units 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 Units, 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 Units then credited to Employee hereunder as a result of such
grant of Units and any crediting of additional Units to Employee pursuant to payments equivalent to
dividends paid on shares of Stock under Section 5 hereof (“Dividend Equivalents”).

     3. Nontransferability. Until Units become settleable in accordance with the terms of this
Agreement, Employee may not transfer Units 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.

     4. Termination Provisions. The following provisions will govern the vesting and forfeiture of
the Units 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 Units will be deemed earned in an amount equal to
the greater of the Target Number or the number of Units to be granted 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 Units earned, to the extent not
previously vested, will vest immediately, and such Units, together with any then-outstanding
Units that previously became vested, will be settled in accordance with Section 6(a) hereof.
Any portion of the then-outstanding Units 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 or by Employee
voluntarily, the portion of the then-outstanding Units not vested at the date of Termination
will be forfeited, and the portion of the then-outstanding Units that is vested at or before
the date of Termination will be settled in accordance with Section 6(a) hereof.

     (c) Retirement. In the event of Employee’s Termination
of Employment due to Retirement (as defined below) the Units will be deemed earned in an
amount equal to fifty percent of the Target Number. A Pro-Rata Portion (as defined below)
of the Units earned, to the extent not previously vested, will vest immediately, and such
Units, together with any then-outstanding Units that previously became vested, will be
settled in accordance with Section 6(a) hereof. Any portion of the then-outstanding Units
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.

     (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 Units (other than
Units that, at the relevant record date, previously have been settled or forfeited) and
deemed reinvested in additional Units. Dividend Equivalents will be credited with respect
to unearned Units, earned but not vested Units, and vested but not settled Units. 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 Units)
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 Units shall be
credited to Employee’s Account in lieu of payment or crediting of cash dividend
equivalents equal to the number of Units 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 Units shall be credited to Employee’s Account as of the
payment date for such dividend or distribution equal to the number of Units 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.

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     (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
Units 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 Units 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.

     (b) Adjustments. The number of Units credited to Employee’s Account shall be
appropriately adjusted in order to prevent dilution or enlargement of Employee’s rights with
respect to Units 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
Units 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 Units which shall preserve without enlarging the value of the Units, with the
manner of such adjustment to be determined by the Committee in its discretion.

     (c) Risk of Forfeiture and Settlement of Units Resulting from Dividend Equivalents and
Adjustments. Units which directly or indirectly result from Dividend Equivalents on or
adjustments to a Unit granted hereunder shall be subject to the same risk of forfeiture and
other conditions as apply to the granted Unit and will be settled at the same time as the
granted Unit.

     6. Settlement and Deferral.

     (a) Settlement Date. Units granted hereunder that have been earned and vested,
together with Units credited as a result of Dividend Equivalents with respect thereto, shall
be settled by delivery of one share of Stock for each Unit being settled. Settlement of a
Unit granted hereunder shall occur at 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) hereof if
Employee is not “disabled” within the meaning of Section 409A(a)(2)(C)), (iii) upon a Change
in Control except that, if the Units 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)), or (iv) within 60 days after a Termination of
Employment if and to the extent specified in Section 4(b) hereof; and provided further, that
settlement shall be deferred if so elected by Employee in accordance with Section 6(b)
hereof. Settlement of Units which directly or indirectly result from Dividend Equivalents
on Units granted hereunder shall occur at the time of settlement of the granted Unit.

     (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 Units are subject to taxation under Section 409A of the Code (“§ 409A”)
as presently in effect or hereafter amended (i.e., the Units 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 Units to be subject to § 409A),
settlement shall be subject to the following rules:

     (i) The Company shall have no authority to accelerate distributions relating to
such Units in excess of the authority permitted under § 409A;

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     (ii) Any distribution relating to such Units 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 § 409A(a)(2)(A)(i) (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 Units 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;

     (iv) If any portion of such Units scheduled to vest at a single specified date
(a vesting “tranche”) is partly deemed a 409A Award and partly deemed exempt from §
409A (as a short-term deferral or otherwise), the time of settlement of the entire
tranche will be governed by the distribution rules applicable to such tranche of
Units; and

     (v) Any rights of Employee or retained authority of the Company with respect to
Units 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 Units 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 Units, 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 Units, and supersedes any prior
agreements or documents with respect to the Units. 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 Units shall be valid unless expressed in a
written instrument executed by Employee.

     (b) No Promise of Employment. The Units 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 Units and Shares. The number of Units credited to Employee’s Account
shall include fractional Units 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 Units 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 Units.

6

 

     (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 Units, 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 Units.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 Units 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 Units, including the number of Units
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 Units 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.

     (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.

 

			
	1	 	Note to draft: Employees will have to pay FICA
withholding taxes at the time of vesting on any Units the settlement of which
is deferred past vesting. Such deferral would defer income taxes, however.

7

 

Exhibit A

NEW JERSEY RESOURCES CORPORATION

2007 Stock Award and Incentive Plan

Performance Goal and Earning of Performance Units

     The number of Performance Units earned by Participant shall be determined as of                      ___,
200___[last day of performance period] (the “Earning Date”), based on the Company’s “Total
Shareholder Return Performance” in the ___-fiscal-year period ending at that date as compared
against an established group of comparable companies (the “Comparison Group”) selected by the
Committee and attached hereto as Schedule A. The number of Units earned will then be determined
based on the following grid:

	 	 	 	 	 
	Company Total	 	 
	Shareholder Return	 	Units Earned as
	Performance—	 	Percentage of
	Percentile Achieved	 	Target Units
	Less than 30th
	 	 	0	%
	30th
	 	 	—	%
	40th
	 	 	—	%
	50th
	 	 	—	%
	60th
	 	 	—	%
	70th
	 	 	—	%
	80th 
	 	 	—	%
	90th and above
	 	 	150	%

Upon achievement of Total Shareholder Return at a percentile between 30th and
40th, 40th and 50th, 50th and 60th, or
between 60th and 70th, 70th and 80th, or between
80th and 90th, the Units earned will be mathematically interpolated on a
straight-line basis.

Determinations of the Committee regarding Total Shareholder Return performance, such performance as
a percentile within the Comparison Group, the resulting Units earned and related matters will be
final and binding on Participant. The Committee shall specify a reasonable methodology for dealing
with companies in the Comparison Group that cease to be publicly traded companies engaged in a
business comparable to that of the Company, subject to compliance with Treasury Regulation §
1.162-27(e)(2). Total Shareholder Return shall be calculated in a manner that reflects the
economic return to shareholders, such that any equity restructuring of the Company or any company
in the Comparison Group shall not have the effect of enlarging or reducing the rights of Employee
except to the extent of its effects on the real economic return of a shareholder.

8

 

Schedule A

[List of Companies in Comparison Group]

9

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