CNG NONEMPLOYEE DIRECTORS' FEE PLAN
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1. Purpose
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The CNG NONEMPLOYEE DIRECTORS' FEE PLAN (the "Plan") of Connecticut
Natural Gas Corporation (the "Company") is established to attract and
retain as members of the Company's Board of Directors persons who are
not full-time employees of the Company or any of its subsidiaries but
whose business experience and judgement can make a valuable
management contribution to the Company and its subsidiaries. This
document amends and restates, effective September 29, 1995, the Plan
which was originally adopted effective January 1, 1976.
2. Directors Covered
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As used in the Plan, the term "Director" means any person who was
elected to the Board of Directors of the Company and who is not a
full-time employee of the Company or any of its subsidiaries.
3. Deferral of Fees
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(a) Any Director of the Company, by giving notice to the Secretary
of the Company, may elect to defer all or a portion of the
payment of the annual retainer and meeting fees which he will
earn subsequent to the date on which such notice is given.
Such election may be revoked by the Director giving written
notice to the Secretary as to retainer and meeting fees earned
subsequent to such revocation. A Director who makes such an
election to defer hereunder shall sometimes be referred to as a
"Participant" hereunder.
(b) All fees deferred pursuant to the Plan shall earn interest at a
rate equal to such rates of return on common equity as the
Company is authorized from time to time to earn by the
Connecticut Department of Public Utility Control (DPUC),
commencing January 1, 1982. Such interest shall be compounded
quarterly. The rate of interest to be accrued hereunder shall
be adjusted on the first day of the month next following the
date on which any rates newly approved by the DPUC become fully
effective. For the purpose of calculating such interest,
current year fees shall be considered earned as of the last day
of the calendar quarter in which the services were performed.
If a Director elects a form of payment other than a lump sum,
interest shall continue to be credited to the unpaid balance
for the duration of the payment period. For purposes of the
Plan, the term "deferred fees" shall include any such interest
credited thereon. Fees so accounted for under this paragraph
3(b) shall be referred to as "Account A" of this Plan.
(c) Effective September 29, 1995, the Company has established the
CNG Nonemployee Directors' Fee Plan Trust Agreement. The
intent of the Company is to transfer assets to the Trustee of
said Trust over a period of time in amounts sufficient to equal
the amount of benefits payable under the Plan. Accordingly,
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effective September 29, 1995, an "Account B" shall be
established for each Participant under the Plan. Account B
shall include any portions of a Participant's Plan balance,
from that point forward, for which contributions have been made
to the Trust and have been invested in accordance with the
Trust Agreement. Amounts contributed to the Trust and
accounted for under Account B shall include fees deferred
subsequent to the effective date above; contributions
previously deemed made to Account A that are periodically
transferred from the Account A balance; and earnings deemed to
have been credited to Account A that are periodically
transferred from the Account A balance. This approach shall
continue until the Trust is equal in value to the amount of
benefits payable under the Plan, at which point all Plan
balances will be accounted for under Account B. A rate of
return shall be credited to Account B based on the rate of
return on assets invested in the Trust. An accounting shall be
maintained of each Participant's Plan balances allocated to
Account A and Account B. Notwithstanding the foregoing, the
Company shall have no obligation to make any contribution to
the Trust. In the event and to the extent that a contribution
is not made for such amounts, then the provisions of
subparagraph (b) hereof, relating to returns on investments,
shall apply until such time as such contributions are made.
Furthermore, any contributions shall be subject to the terms of
said Trust Agreement.
4. Payment of Deferred Fees
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(a) At the time of the election by a Director to defer all or a
portion of the fees and retainer earned for the first year for
which this Plan is in effect (1976) or, if later, the time of
the first election by a Director to defer all or a portion of
the fees and retainer hereunder, a Director by written notice
to the Secretary shall make an election specifying the terms
and conditions of the payment of the deferred fees. Unless the
Company in its sole discretion, decides to commence payment in
a different manner, a Director's deferred fees earned pursuant
to the Plan shall be paid in accordance with the Director's
aforesaid written election as to the terms and conditions.
(b) Effective September 29, 1995, except for lump sum
distributions, installment payments from the Plan shall be made
quarterly, and recorded on the last day of the quarter after
earnings are credited. Thus, in the case of a distribution
to be made over ten years for example, installment payments
shall be made as follows: 1/40 of the participant's balance
the first quarter, 1/39 in the second, 1/38 in the third, and
so forth. Such payments shall first be made out of Account A
to the extent there is a balance, and then from Account B.
5. Miscellaneous
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(a) Each Director or former Director entitled to payment of
deferred fees hereunder from time to time may name any person
or persons (including without limitation individuals, estates,
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trusts, corporations and other legal entities), who may be
named contingently or successively, to whom any deferred
Directors' fees earned by him and payable to him are to be paid
in case of his death before he receives any or all of such
deferred Directors' fees. The person or persons to whom any
deceased Director's or former Director's deferred Directors'
fees are payable under this paragraph will be referred to as
his "beneficiary." Each designation will revoke all prior
designations by the same Director or former Director, shall be
in form prescribed by the Company, and will be effective only
when filed by the Director or former Director in writing with
the Secretary of the Company during his lifetime. If a
Director or former Director dies prior to the time for the
commencement of benefits, or after commencement thereof but
prior to completion thereof, then any remaining payments
together with the interest accrued thereon shall be made to his
beneficiary as soon as practicable thereafter in a lump sum.
If a deceased Director or former Director shall have failed to
name a beneficiary in a manner provided above, or if the
beneficiary named by a deceased Director or former Director
dies before him or before payment of all the Director's or
former Director's deferred Director's fees, and no secondary
beneficiary has been designated or is then alive, the Company
shall direct payment in a single sum of any remaining deferred
Director's fees to the Director's or former Director's spouse,
if then living; otherwise to the Director's or former
Director's living issue, PER STIRPES; and in the further event
that no such issue are then living, then to the legal
representative or representatives of the estate of the Director
or former Director.
(b) Establishment of the Plan and coverage thereunder of any person
shall not be construed to confer any right on the part of such
person to be nominated for reelection to the Board of Directors
of the Company, or to be reelected to the Board of Directors.
(c) Payment of deferred Directors' fees will be made only to the
person entitled thereto in accordance with the terms of the
Plan, and deferred Directors' fees are not in any way subject
to the debts or other obligations of persons entitled thereto,
and may not be voluntarily or unvoluntarily sold, transferred,
or assigned. When a person entitled to a payment under the
Plan is under legal disability or, in the Company's opinion, is
in any way incapacitated so as to be unable to manage his
financial affairs, the Company may direct that payment be made
to such person's legal representative, or to a relative or
friend of such person for his benefit. Any payment made in
accordance with the preceding sentence shall be in complete
discharge of the Company's obligation to make such payment
under the Plan.
(d) Any action required or permitted to be taken by the Company
under the terms of the Plan shall be by affirmative vote of a
majority of the members of the Board of Directors then in
office.
(e) The Company shall maintain such records of fees deferred and
income (or loss) credited (or charged) thereto, including
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records of fees deferred for different periods of time and
income (or loss) credited (or charged) thereto, as it shall
deem necessary or appropriate in order to accomplish the
general purposes of the Plan.
(f) The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of
Connecticut, except as such laws may be superseded by any
federal law.
(g) All payments hereunder shall be paid in cash and may be made
either directly by the Company or from the Trust referred to in
Paragraph 3. A Director shall have no right, title or interest
whatever in and to any investments which the Company may make
to aid it in meeting its obligations hereunder and shall have
no right, title or interest in any assets of the Trust referred
to in Paragraph 3. The Plan shall be considered to be
unfunded. To the extent that a Director or beneficiary
acquires a right to receive payments hereunder, such right
shall be that of a general unsecured creditor of the Company.
The Plan constitutes a mere promise by the Company to pay
benefits in the future.
(h) The provisions of sections 3(c) and 4(b) shall not apply to
past participants who have already commenced the receipt of
payouts under the Plan.
6. Amendments and Discontinuance
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While the Company expects to continue the Plan, it does hereby
reserve the right to amend or discontinue the Plan at any time;
provided, however, that any amendment or discontinuance of the Plan
shall be prospective in operation only and shall not affect the
payment of any deferred Directors' fees theretofore earned by any
Directors, or the conditions under which any such fees are to be paid
or forfeited under the Plan, unless the Director affected shall
expressly consent thereto.
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CNG NONEMPLOYEE DIRECTORS' FEE PLAN
ELECTION TO PARTICIPATE
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I hereby elect to participate in the Connecticut Natural Gas Corporation
Nonemployee Directors' Fee Plan and defer payment of _____ per cent of the
annual retainer and meeting fees earned by me in _______ and subsequent
calendar years. Such deferred retainer and meeting fees will be paid to
me as indicated below. I understand that I will be permitted to
discontinue the Plan by revoking this election and any fees earned after
such revocation will not be deferred.
________________________
Signature
________________________
Date
PAYMENT OPTIONS
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Please indicate time and manner of payment.
1. When receipt of deferred Directors' fees shall commence:
____ A. Age sixty ____ C. Any other age (Describe)
____ B. Age sixty-five ____ D. Upon termination of
being a Director
2. How payment shall be received:
____ A. One lump sum
____ B. Ten equal annual payments
____ C. Any other manner (Describe)
3. Please indicate the beneficiaries to receive deferred fees and interest
in the event of death prior to receipt of all or any part of the deferred
fees (beneficiary designation may be revoked at any time by change form
signed and filed with CNG prior to death):
_________________________, primary beneficiary
_________________________ relationship
_________________________, secondary beneficiary
_________________________ relationship
_________________________
Signature
CNG NONEMPLOYEE DIRECTORS' FEE PLAN
CHANGE OF BENEFICIARY
I hereby revoke any prior designation of beneficiary and choose the
following beneficiaries to receive deferred fees and interest in the event
of death prior to the receipt of all or any part of the deferred fees under
the CNG Nonemployee Directors' Fee Plan. I understand that this form must
be signed by me and filed with CNG prior to my death in order to be
effective. I reserve the right to revoke this designation of beneficiary
by change form signed and filed with CNG prior to my death.
________________________, primary beneficiary
________________________ relationship
________________________, secondary beneficiary
________________________ relationship
________________________
Signature
________________________
Date
CNG NONEMPLOYEE DIRECTORS' FEE PLAN
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Attached hereto is an amendment and restatement of the CNG
Nonemployee Directors' Fee Plan, which has been adopted by the Board of
Directors of CNG at its meeting held on , 1995.
The undersigned, being a CNG Director who is participating in the Plan,
hereby declares that he has been informed of the changes which have been
made to the Plan in the amendment and restatement, and hereby expressly
consents to the amendment and restatement thereto and the changes made
therein.
Date at , Connecticut this day of
, 1995.
_______________________________
Name of Director
_________________________ _______________________________
Witness Signature of Director
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