South Jersey Industries, Inc.
Board of Directors Code of Ethics
Effective November 22, 2002

 

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Table of Contents

Section

Subject

1

Policy

2

Responsibility & Penalties for Non-Compliance

3

Specific Areas of Policy Statement

4

Guidelines

5

Reporting of Violations

6

Distribution

  

1. Policy

It is the policy of the Board of Directors of South Jersey Industries and all of its subsidiary companies to require its directors to devote their loyalties to the interest of the Company and to keep themselves free of any influences that might conflict or create an appearance or perception of conflict with their obligations to represent the best interests of the Company at all times.

2. Responsibility & Penalties for Non-Compliance

It is the responsibility of every director of the Company to understand and comply with this policy. Appropriate action will be taken against any director who violates and/or condones any violation of this policy. It is the responsibility of the entire Board to ensure that the directors are in compliance. The Corporate Secretary and Corporate Counsel Department is responsible for the overall administration of this policy and for policy interpretation.

3. Specific Areas of Policy Statement

Procurement Activities
The highest standards of personal conduct and business ethics are required of each person directly involved in procurement activities, as well as those who are in a position to influence procurement decisions or relationships. In the procurement of equipment, supplies and services, no supplier may be given improper information, preference or advantage over others.

Conflict of Interest
No Company director shall engage in business transactions or professional activity or have a financial or other private interest, which is in conflict with the proper discharge of his/her position. A conflict of interest arises when a personal dealing or interest conflicts with the Company's interests.

Antitrust - Competition
All directors must comply with antitrust and competition laws throughout the world. These laws protect the free enterprise system and encourage vigorous, but fair, competition. All product and service development, manufacturing and sales efforts must conform to the highest ethical standards. Engaging in or conspiring to do any of the following is strictly forbidden:

  • price fixing, bid rigging, colluding to allocate customers or markets, boycotting suppliers or customers;

  • controlling the resale pricing of distributors and dealers;

  • disparaging a competitor, misrepresenting our own products or services;

  • stealing trade secrets;

  • offering or paying bribes or kickbacks

All mergers, acquisitions, strategic alliances, and other types of extraordinary business combinations which raise concerns of market domination or abuse, should receive timely legal review to assure that we compete aggressively but not unlawfully. The same is true as to the Company’s routine business and licensing plans.

Antitrust laws are vigorously enforced. Failure to comply with antitrust or competition laws could result in heavy fines and imprisonment in criminal cases, and high damage awards and injunctions in civil cases. Directors should seek the advise of the Office of Corporate Secretary and Corporate Counsel when confronted with business decisions involving significant risks of antitrust exposure for the Company or individual employees.

Company Information
Company information may take many forms - physical records, electronic data or personal knowledge - and can include financial, technical, strategic and other records of a confidential or proprietary nature. Such information is a valuable corporate asset that must never be used for personal gain or given to others for their use. Disclosure of such proprietary information by any director is strictly prohibited, unless there is an identified and valid business need, where executive authorization has been properly secured in writing.

Company Property and Funds
Every director is responsible for safeguarding Company property and funds to prevent their abuse, unauthorized personal use, loss or theft. Company property includes facilities, equipment, supplies, tools, vehicles, funds, telephone and computer lines and services and other assets that are intended for conducting the Company's business.

Legislative and Regulatory Compliance
All businesses, and public utilities in particular, are subject to many federal, state and local laws and regulations. All directors shall uphold the Constitution, laws and applicable regulations of the United States and of all governments therein and agencies thereof, and never wittingly be a party to their evasion.

Acceptance or Solicitation of Things of Value
Business decisions must be made objectively; solely on the basis of quality, service, price and similar competitive factors.

Gifts other than those of a nominal value that are received by a director should be returned to the donor, accompanied with an explanation about this policy.

Meals and other social events, the main purpose of which is to establish and maintain necessary business relationships, are considered legitimate business expenses. Directors may also accept business meals and entertainment as long as the business purpose is valid. Directors should decline any offers of lavish business meals or entertainment, or any offers that could be interpreted or appear as having been offered with the intent of influencing the employee’s business judgment.

Employment Practices
No Company director shall accept employment, engage in any business transaction or make any investment which will be detrimental to the Company or interfere in any manner whatsoever, with the discharge of his/her Board duties and responsibilities.

Employment
No director shall use their position to unduly influence the process of hiring or promotion decision-making process. The best qualified applicants will be referred, considered and selected; the process shall be conducted in an open and objective manner. In the areas of recruitment, hiring, compensation, education, health, promotion and training, the Company’s policies are nondiscriminatory, providing fair and equal opportunities.

Maintenance of Accurate and Complete Records
Every director has the responsibility to maintain accurate and complete records. No false, misleading or artificial entries may be made on the Company’s books and records. No funds or assets may be maintained by the company for any illegal or improper purposes. All transactions must be fully and completely documented and recorded in the Company’s accounting records.

Discrimination and Under Coercion
No director of the Company shall unfairly discriminate through the dispensing of special privileges or favors, whether for remuneration or not. No director shall utilize the authority vested in him/her by virtue of his/her position with the Company, to unduly coerce peers or subordinates to provide favors or privileges, personal or financial, under fear of retribution or disparate treatment.

Affiliate Relationships (South Jersey Gas)
The New Jersey Board of Public Utilities has adopted standards in evaluating affiliate relationships, which provide for both fair competition as well as a “no harm to ratepayers” standard. Additionally, federal antitrust laws prohibit practices which restrict fair market competition. Accordingly, SJG's affiliate relationships have been structured to ensure that (1) our transactions are in compliance with applicable laws, (2) that our ratepayers are not subsidizing non-regulated operations, and (3) that procurement practices and procedures are open, unbiased and at arms length. Directors must be aware of state and federal laws and regulations governing affiliate relationships.

Policies and Procedures
All Company directors are required to understand, endorse and support Company policies and procedures, including this code of ethics and the standards it prescribes, and never wittingly be party to their evasion.

Insider Trading
The Company has a long-standing commitment to comply with all securities laws and regulations. U.S. securities laws, which apply to the Company worldwide, prohibit persons from trading in the securities of a company on the basis of material non-public information. Material non-public information is any information concerning a company’s business, prospects, securities, or market which an investor might consider important in deciding whether to buy or sell the securities, or which could effect their market price. Examples of material information include: possible mergers, acquisitions or divestitures; actual or estimated financial results or changes in dividends; purchases and sales of investments in companies; obtaining or losing significant contracts; significant discoveries or product developments; threatened major litigation or developments in such matters; and major changes in business strategies. In all cases, do not buy or sell Company securities until you have obtained pre-clearance from the Corporate Secretary and Corporate Counsel Office.

Two simple rules can help protect you in this area. (1) Don’t use material non-public information for personal gain; (2) don’t pass along such information to someone else who has no need to know.

Direct any questions to the Office of Corporate Secretary and Corporate Counsel.

4. Guidelines

Here are some general guidelines to help directors better understand what the Company believes to be in the best interests of our employees, customers, shareholders, community and those with whom we do business.

Answering the following questions may also help you handle specific situations:

  • Could this action appear “inappropriate” to others ?

  • Will my action comply with the intent and purpose of Company policies and practices?

  • May I be called upon to defend my action to other directors, executives, employees and the general public?

  • Will this action compromise me?

  • Can I feel comfortable about doing this?

If you are unsure about whether or not to act, consult with your supervisor or contact the Corporate Secretary and Corporate Counsel Department for clarification.

5. Reporting of Violations

Directors who have knowledge of or suspect a violation of this Code of Ethics must report this information to the Chairman and CEO or the Corporate Secretary and Corporate Counsel. If the Chairman and CEO is the subject of the suspected violation, the director should contact outside counsel, Patrick O’Connor of Cozen & O’Connor. Directors have an obligation to come forward and should feel comfortable in coming forward to address any issue that they believe is a violation of this policy.

The Company or the appropriate Board of Director committee shall conduct an investigation into the alleged violation and all information will be maintained in a confidential manner. The Nominating and Governance Committee is responsible for investigating conflicts of interest regarding directors and senior executives. The Audit Committee is responsible for suspected violations regarding fraud, theft or similar conduct or misrepresentation of the Company’s financial statements and accounts. Once the investigation is complete, the Corporate Secretary and Corporate Counsel Department will inform the director of the results of the investigation.

During the investigation of a suspected violation, directors are required to cooperate in the investigation. Specifically, the following conduct is strictly prohibited:

  • Interfering with or obstructing an investigation

  • Misrepresenting the facts, or failing to disclose facts during an investigation

  • Retaliating, or attempting to retaliate, against an employee who has made a good faith report of a suspected or known violation

  • Attempting to discover the identity of any person cooperating in the investigation

6. Distribution

All Directors