Exhibit 10(u)
NEW ENGLAND ELECTRIC SYSTEM
DIRECTORS DEFERRED COMPENSATION PLAN
May 13, 1985
Amended June 21, 1985
Amended November 25, 1986
Amended November 24, 1992
Amended May 20, 1996
Amended December 1, 1996
TABLE OF CONTENTS
-----------------
Page
----
I. EFFECT. . . . . . . . . . . . . . . . . . . . . . . . . . .1
II. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
2.01 Actuarial Value . . . . . . . . . . . . . . . . . .2
2.02 Beneficial Owner. . . . . . . . . . . . . . . . . .2
2.03 Beneficiary . . . . . . . . . . . . . . . . . . . .2
2.04 Benefits Committee. . . . . . . . . . . . . . . . .2
2.05 Board . . . . . . . . . . . . . . . . . . . . . . .2
2.06 Cash Account. . . . . . . . . . . . . . . . . . . .3
2.07 Cash Account Balance. . . . . . . . . . . . . . . .3
2.08 Change in Control . . . . . . . . . . . . . . . . .3
2.09 Company . . . . . . . . . . . . . . . . . . . . . .4
2.10 Compensation. . . . . . . . . . . . . . . . . . . .4
2.11 Compensation Committee. . . . . . . . . . . . . . .5
2.12 Deferred Compensation . . . . . . . . . . . . . . .5
2.13 Deferred Compensation Account . . . . . . . . . . .5
2.14 Deferral Unit . . . . . . . . . . . . . . . . . . .5
2.15 Disability. . . . . . . . . . . . . . . . . . . . .5
2.16 Dividend. . . . . . . . . . . . . . . . . . . . . .5
2.17 Dividend Reinvestment Plan. . . . . . . . . . . . .6
2.18 Election Period . . . . . . . . . . . . . . . . . .6
2.19 Interest. . . . . . . . . . . . . . . . . . . . . .6
2.20 A Major Transaction . . . . . . . . . . . . . . . .6
2.21 New England Electric System . . . . . . . . . . . .8
2.22 Other Plans . . . . . . . . . . . . . . . . . . . .8
2.23 Participant . . . . . . . . . . . . . . . . . . . .9
2.24 Person. . . . . . . . . . . . . . . . . . . . . . .9
2.25 Plan Year . . . . . . . . . . . . . . . . . . . . .9
2.26 Qualified Plan. . . . . . . . . . . . . . . . . . .9
2.27 Retainer Shares . . . . . . . . . . . . . . . . . .9
2.28 Retirement. . . . . . . . . . . . . . . . . . . . 10
2.29 Shares. . . . . . . . . . . . . . . . . . . . . . 10
2.30 Share Account . . . . . . . . . . . . . . . . . . 10
2.31 Share Account Balance . . . . . . . . . . . . . . 11
2.32 Share Price . . . . . . . . . . . . . . . . . . . 11
2.33 Subsidiary. . . . . . . . . . . . . . . . . . . . 12
III. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . 12
3.01 Benefits Committee. . . . . . . . . . . . . . . . 12
3.02 Liability for Acts. . . . . . . . . . . . . . . . 12
3.03 Minors, Etc.. . . . . . . . . . . . . . . . . . . 13
3.04 Proof.. . . . . . . . . . . . . . . . . . . . . . 13
3.05 Denied Claim. . . . . . . . . . . . . . . . . . . 14
IV. OPERATION OF THE PLAN . . . . . . . . . . . . . . . . . . 15
4.01 Deferral Election.. . . . . . . . . . . . . . . . 15
4.02 Time of Election. . . . . . . . . . . . . . . . . 16
4.03 Deferred Compensation Accounts. . . . . . . . . . 17
A. Cash Account . . . . . . . . . . . . . . . 18
B. Share Account. . . . . . . . . . . . . . . 18
4.04 Payment of Balances . . . . . . . . . . . . . . . 19
A. Election of Time of Payment. . . . . . . . 19
B. Payments After Ten Years . . . . . . . . . 19
C. Payments at Retirement . . . . . . . . . . 19
D. Hardship Payments. . . . . . . . . . . . . 20
E. Dissolution of Company; A Major
Transaction; Change in Control . . . . . . 21
F. Death or Disability. . . . . . . . . . . . 22
G. Form of Payments . . . . . . . . . . . . . 22
H. Distributed Shares . . . . . . . . . . . . 23
I. Taxes. . . . . . . . . . . . . . . . . . . 25
4.05 No Segregation of Assets. . . . . . . . . . . . . 25
4.06 Failure of Payments . . . . . . . . . . . . . . . 26
V. AMENDMENT OR TERMINATION. . . . . . . . . . . . . . . . . 27
5.01 Right to Amend and Terminate. . . . . . . . . . . 27
VI. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 28
6.01 Nonalienation of Benefits.. . . . . . . . . . . . 28
6.02 Effectuation of Interest. . . . . . . . . . . . . 28
6.03 Copy of Plan. . . . . . . . . . . . . . . . . . . 28
6.04 Headings. . . . . . . . . . . . . . . . . . . . . 29
6.05 Gender and Number.. . . . . . . . . . . . . . . . 29
6.06 Separability. . . . . . . . . . . . . . . . . . . 29
6.07 Applicability.. . . . . . . . . . . . . . . . . . 30
6.08 Governing Law.. . . . . . . . . . . . . . . . . . 30
6.09 Effective Date. . . . . . . . . . . . . . . . . . 30
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ii
NEW ENGLAND ELECTRIC SYSTEM
DIRECTORS DEFERRED COMPENSATION PLAN
------------------------------------
I. EFFECT
------
The Directors Deferred Compensation Plan was first executed
in May of 1985. This instrument constitutes an amendment and
restatement of the Plan. The Plan was further amended as of May
20, 1996, in order to provide additional flexibility and to
encourage additional share equivalent ownership by Directors.
The Plan is being further amended as of December 1, 1996, in
order to permit participation by Directors of Subsidiaries. All
rights to Deferred Compensation of Participants shall be
determined exclusively by the provisions of this instrument.
Deferrals made under previous versions of the Plan and under
individual deferral agreements will provide benefits under, and
are controlled by, the terms of such versions, except that
Subsection 4.04(F) will be controlling in the event of a Change
of Control or a Major Transaction. Any deferral elections in
effect shall continue through December 31, 1996.
II. DEFINITIONS
-----------
2.01 Actuarial Value will be established using the most
recent assumptions established by the Benefits Committee for the
Qualified Plan.
2.02 Beneficial Owner shall have the meaning defined in
Rule 13d-3 under the Exchange Act.
2.03 Beneficiary means any person designated in writing
by a Participant (which designation may be changed from time to
time) to receive benefits under the Plan payable upon death of
the Participant. Unless otherwise designated, the Beneficiary
will be the beneficiary under the Participant's Group Life
Insurance enrollment and insurance provided by the Company or a
subsidiary. If there is no designated Beneficiary alive when the
Participant dies, the benefit shall be paid to the estate of the
Participant.
2.04 Benefits Committee means the Benefits Committee
established in accordance with the Qualified Plan.
2.05 Board means the Board of Directors of the New
England Electric System.
2.06 Cash Account means the account established for a
Participant in accordance with subsection 4.03(A) and the amounts
in individual cash deferral agreements with directors of
Subsidiaries executed prior to their being able to participate in
the Plan.
2.07 Cash Account Balance means the amount deferred by
the Participant in his or her Cash Account and Interest thereon,
all as provided in Subsection 4.03(A), less any payments or
reductions made in accordance with Section 4.04 or 4.06.
2.08 Change in Control occurs when the conditions set
forth in either of the following paragraphs shall have been
satisfied:
(a) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of New
England Electric System (not including in the
securities beneficially owned by such Person any
securities acquired directly from New England
Electric System or its affiliates) representing 20%
or more of the combined voting power of New England
Electric System's then outstanding securities; or
(b) during any period of not more than two consecutive
years after January 1, 1995, individuals who at the
beginning of such period constitute the Board and
any new director (other than a director designated
by a Person who has entered into an agreement with
New England Electric System to effect a transaction
described in clause (a) of this Section) whose
election by the Board or nomination for election by
New England Electric System's shareholders was
approved or recommended by a vote of at least two-
thirds of the directors then still in office who
either were directors at the beginning of the
period or whose election or nomination for election
was previously so approved or recommended, cease
for any reason to constitute a majority of the
Board.
2.09 Company means the New England Electric System.
2.10 Compensation means
(a) quarterly retainers for Board and committee
service;
(b) meeting fees for Board and committee service; and
(c) Retainer Shares.
2.11 Compensation Committee means the Compensation
Committee of the Board.
2.12 Deferred Compensation means the Compensation of a
Participant deferred in accordance with the terms of this Plan.
2.13 Deferred Compensation Account means the special
memorandum account established for a Participant on the books of
the Company or Subsidiary pursuant to Section 4.03.
2.14 Deferral Unit means an investment unit established
under prior provisions of the Plan.
2.15 Disability means a physical or mental condition of
the Participant which, based on satisfactory medical evidence, is
believed to be permanent and to render the Participant unfit to
engage in an occupation for compensation or profit.
2.16 Dividend has the meaning set out in subsection
4.03(B).
2.17 Dividend Reinvestment Plan means the New England
Electric System Dividend Reinvestment and Common Share Purchase
Plan, as amended from time to time.
2.18 Election Period is the 365-day period following:
(a) the mailing of the notice to the Participant of his
or her eligibility to make an election due to a
Change of Control or a Major Transaction, or
(b) the date when the Participant is no longer a member
of either the Board or the Board of Directors of a
Subsidiary,
as applicable.
2.19 Interest means the factor described in Subsection
4.03(A).
2.20 A Major Transaction shall be deemed to have
occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(a) the shareholders of New England Electric System
approve a merger or consolidation with any
corporation or business trust, other than (i) a
merger or consolidation which would result in the
individuals who prior to such merger or
consolidation constitute the Board constituting at
least two-thirds of the board of directors of New
England Electric System or the surviving or
succeeding entity immediately after such merger or
consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization (or
similar transaction) in which no Person acquires
more than 20% of the combined voting power of New
England Electric System's then outstanding
securities;
(b) the shareholders of New England Electric System
approve a plan of complete liquidation thereof; or
(c) the shareholder of New England Electric System
approve an agreement for the sale or disposition of
all or substantially all of New England Electric
System's assets, other than a sale or disposition
which would result in the individuals who prior to
such sale or disposition constitute the Board
constituting at least two-thirds of the board of
directors of the Person purchasing such assets
immediately after such sale or disposition.
2.21 New England Electric System means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation, or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer, or agent thereof assumes
or shall be held to any liability therefor.
2.22 Other Plans means the New England Electric
Companies' Executive Supplemental Retirement Plan, the New
England Electric System Companies Retirement Supplement Plan, the
New England Electric System Deferred Compensation Plan, New
England Electric Companies' Senior Incentive Compensation Plan,
New England Electric Companies' Incentive Compensation Plan I,
New England Electric Companies' Incentive Compensation Plan II,
New England Electric Companies' Incentive Compensation Plan III,
or New England Electric Companies Long-term Performance Share
Award Plan.
2.23 Participant means a Director of the Company or a
Subsidiary who is not an employee of the Company or any of its
affiliates and who has completed a participation agreement.
2.24 Person shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (i)
New England Electric System or any subsidiary thereof, (ii) a
trustee or other fiduciary holding securities under an employee
benefit plan of New England Electric System or any subsidiary
thereof, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of New England
Electric System in substantially the same proportions as their
ownership of shares of New England Electric System.
2.25 Plan Year means a calendar year.
2.26 Qualified Plan means the New England Electric
System Companies' Final Average Pay Pension Plan I.
2.27 Retainer Shares means Shares paid as of each May
for Board service and as of each August.
2.28 Retirement means the date on which a Participant
commences receiving retirement income payments under this Plan.
Such payment will normally commence on the first business day of
the month after the later of the date on which the Participant
reaches age 65 or the date when the Participant is no longer a
member of either the Board or the Board of Directors of a
Subsidiary; however, a Participant may, at any time on or after
he or she has ceased to be a member of the Board of the Company
or any Subsidiary, apply in writing to the Benefits Committee for
approval of an earlier commencement. The decision whether to
allow such earlier commencement shall be in the sole discretion
of the Benefits Committee.
Retirement under this Plan is not contingent upon retirement
under the Qualified Plan or any other plan maintained by the
Company or a Subsidiary.
2.29 Shares means common shares of New England Electric
System. After a merger, consolidation, or other similar
restructuring of New England Electric System, Shares shall mean
the common shares of the new entity.
2.30 Share Account means the account established for a
Participant in accordance with Subsection 4.03(B).
2.31 Share Account Balance means the amount deferred by
the Participant in his or her Share Account and Dividends
thereon, all as provided in Subsection 4.03(B), less any payments
or reductions made in accordance with Sections 4.04 and 4.06.
2.32 Share Price for purchases shall be determined using
as a proxy the price of Shares being acquired by the New England
Electric System Dividend Reinvestment Plan during the time period
when the Shares for this Plan would be acquired were this Plan a
participant in that plan. The Share Price for Shares being
liquidated shall be determined by using the price actually
received by the Rabbi Trust on a sale of Shares related hereto or
by using as a proxy the price received for those Shares sold by
the Dividend Reinvestment Plan next following the date of
determination.
For a Change in Control or Major Transaction, the cash value
of Shares will be established using the highest average of the
high and low prices on the New York Stock Exchange Composite
Transaction as reported in the Wall Street Journal for any five
consecutive trading days in the 60 days preceding the Change in
Control or Major Transaction. If there is no trading in the
Shares on the New York Stock Exchange for a substantial amount of
time during the five-day period, or if publication by The Wall
Street Journal of reports of Share transactions for any day in
the five-day period does not take place or is subject to
reporting error, the value of Shares shall be determined by the
Benefits Committee on the basis of such market quotations or
other method as the Benefits Committee shall deem appropriate.
2.33 Subsidiary means Granite State Electric Company,
Massachusetts Electric Company, or The Narragansett Electric
Company.
III. ADMINISTRATION
---------------
3.01 Benefits Committee. This Plan shall be
administered by the Benefits Committee, and interpretations of
the Plan by the Benefits Committee shall be final and binding on
all parties.
3.02 Liability for Acts. Neither the Compensation
Committee, the Benefits Committee, nor the Company, nor any
Subsidiary nor the members, officers, directors, agents, or
employees of any of the foregoing shall be liable for any error
of omission or commission unless such error results from its,
his, or her own gross negligence, willful misconduct, or lack of
good faith; nor shall any such party be liable for any act of
gross negligence, willful misconduct, or lack of good faith of
any other such party.
3.03 Minors, Etc. If a minor, person declared
incompetent, or person incapable of handling the disposition of
his or her property is entitled to receive a benefit, make an
application, or make an election hereunder, the Benefits
Committee may direct that such benefits be paid to, or such
application or election be made by, the guardian, legal
representative, or person having the care and custody of such
minor, incompetent, or incapable person. Any payment made,
application allowed, or election implemented in accordance with
this Section shall completely discharge the Plan, the
Compensation Committee, the Benefits Committee, the Company, and
each Subsidiary from all liability with respect thereto.
3.04 Proof. The Benefits Committee may require proof of
the death, Disability, incompetency, minority, or incapacity of
any Participant or Beneficiary, and of the right of a person to
receive any benefit or make any application or election.
3.05 Denied Claim. The procedures when a claim under
this Plan is denied by the Benefits Committee are as follows:
(a) The Benefits Committee shall:
(i) notify the claimant within a reasonable time of
such denial, setting forth the specific reasons
therefor; and
(ii) afford the claimant a reasonable opportunity for
a review of the decision.
(b) The notice of such denial shall set forth, in addition
to the specific reasons for the denial, the following:
(i) identification of pertinent provisions of this
Plan;
(ii) such additional information as may be relevant
to denial of claim; and
(iii) an explanation of the claims review procedure;
and advice that the claimant may request an
opportunity to submit a statement of issues and
comments.
(c) Within sixty days following advice of denial of a
claim, upon request made by the claimant, the Benefits
Committee shall take appropriate steps to review its
decision in light of any further information or
comments submitted by the claimant. The Benefits
Committee may hold a hearing at which the claimant may
present the basis of any claim for review.
(d) The Benefits Committee shall render a decision within a
reasonable time (not in excess of 120 days) after the
claimant's request for review and shall advise the
claimant in writing of its decision, specifying the
reasons and identifying the appropriate provisions of
this Plan.
(e) The Benefits Committee shall report to the Compensation
Committee any denials of claims, requests for review,
and actions taken in response to such requests. The
Compensation Committee may review such denials and
actions and may affirm, modify, or reverse same.
IV. OPERATION OF THE PLAN
---------------------
4.01 Deferral Election. A Participant may elect to defer
compensation as follows:
A. A Participant may elect to defer any whole percentage
of his or her quarterly retainer, including any
committee retainer.
B. A Participant may elect to defer any whole percentage
of his or her meeting fees, including committee fees.
C. A Participant may elect to defer all of his or her
Retainer Shares.
These elections are not exclusive and a Participant may
elect one, or any combination thereof.
4.02 Time of Election. Elections for deferrals shall be
made prior to commencement of the Plan Year in which the
Compensation is to be earned. If an individual becomes a
Participant during a Plan Year, he or she may, at the time, elect
prior to receipt of the related Compensation to defer
Compensation received or earned during that or a succeeding Plan
Year.
An election once made shall be effective for each succeeding
year until a superseding election is made or until it is
cancelled. Any superseding election shall be effective for each
Plan Year subsequent to the year in which it was made.
Each Participant qualifying for participation on April 30,
1996, may elect, prior to July 1, 1996, to make a 4.01 (A) or (B)
deferral with respect to retainers and meeting fees for the last
two quarters of 1996.
4.03 Deferred Compensation Accounts. Deferrals of cash
retainers and meeting fees shall be allocated to either a Cash
Account or a Share Account as selected by the Participant at the
time he or she makes an election for the related deferral.
Deferrals of Retainer Shares shall be allocated to a Share
Account. Share values are to be determined by the Share Price on
the date the cash or Shares would otherwise have been paid to the
Participant.
Once a deferral is allocated to the Cash or Share Account,
it may not be reallocated; provided, however, prior to July 1,
1996, a Participant may reallocate his or her existing Cash
Account Balance (other than that related to Deferral Units) or
any portion thereof to a Share Account; and, provided further,
that prior to February 1, 1997, a Participant may reallocate his
or her existing Cash Balances relating to service with a
Subsidiary, or any portion thereof, to a Share Account.
A. Cash Account. The Cash Account for each Participant
shall be credited with an amount of Deferred
Compensation as of the date the equivalent cash payment
would otherwise have been made. All Cash Accounts
shall be increased by a factor (the Interest) as
follows: As of the last day of each Plan Year, the
Company shall credit to each such account interest on
the balance in such account computed with regard to the
amount of time during the Plan Year that such amount
has been credited to such account. The rate of
interest shall be the twelve-month average for the Plan
Year of the monthly base rates on prime corporate loans
at the principal office of The First National Bank of
Boston in effect on the last day of each month.
B. Share Account. The Share Account for each Participant
shall be credited with an amount of Deferred
Compensation as of the date the equivalent cash payment
would otherwise have been made (at the Share Price on
the next investment date) or Retainer Shares awarded to
the Participant. Upon each declaration of cash
dividends on Shares, the Participant's Share Account
shall be increased by the number of Shares equivalent
to the dividend declared on a Share (the Dividend)
multiplied by the number of Shares credited to the
Participant's Share Account on the date of record
calculated as if the Shares in the Account had
participated in the Dividend Reinvestment Plan.
4.04 Payment of Balances.
A. Election of Time of Payment. At the time of electing
to defer Compensation, in accordance with Subsection
4.01, the Participant shall also elect whether to
receive payment after ten years or upon Retirement;
and, if upon Retirement, whether in ten payments or a
lump sum.
B. Payments After Ten Years. If the Participant has
elected payment after ten years, the full related Cash
and Share Account Balances shall be paid as soon as
practicable after the close of the tenth anniversary of
the close of the related Plan Year.
C. Payments at Retirement. If the Participant has elected
payment at Retirement, the Participant's full Cash and
Share Account Balances shall be paid either
(i) in ten annual payments commencing at Retirement,
or
(ii) in a lump sum as soon as practicable after
Retirement.
D. Hardship Payments. Prior to a Participant's
termination of Board service (or completion of a
subsection 4.04 (C)(i) payment stream, if applicable),
the Compensation Committee shall have the power and
discretion to make a payment to such Participant from
his or her Deferred Compensation Account at any time if
the Compensation Committee determines that the
Participant is suffering from a serious financial
emergency resulting from circumstances beyond the
Participant's control which would cause a hardship to
the Participant unless such payment was made. Payments
will be made first from the Cash Account, to the extent
not in Deferral Units, secondly from the Share Account,
and thirdly from Deferral Units. Benefits otherwise
payable from a partially liquidated Deferral Unit shall
then be actuarially adjusted, using the most recent
assumptions established by the Benefits Committee for
the Qualified Plan, for the payment made. No payments
will be made on account of Deferral Units for which a
split-dollar option has been elected under prior
provisions of the Plan.
Any such hardship payment will be in a lump sum
and will not exceed the lesser of (i) the amount
necessary to satisfy the hardship situation or (ii) the
balance of the Participant's Deferred Compensation
Accounts.
E. Dissolution of Company; A Major Transaction; Change in
Control. In the event of dissolution, liquidation, or
winding up of the business of the Company or, if
applicable, the Subsidiary, whether voluntary or
involuntary, the Participant shall receive, at the time
of such event, a lump sum payment equal to the balance
in his Cash and Share Accounts and the Actuarial Value
of the maximum value of future benefits from Deferral
Units.
A Participant may, at any time after either a Change in
Control or a Major Transaction, and when the
Participant has ceased to be a member of the Board or,
if applicable, the Board of Directors of the
Subsidiary, elect to receive, in lieu of any future
benefits hereunder, a lump sum payment equal to the
Cash Accounts and Share Accounts and the Actuarial
Value of the maximum value of future benefits from
Deferral Units, all less 10%. The Company or, if
applicable, the Subsidiary shall as soon as possible
after a Change in Control or Major Transaction advise
the Participant of his rights under this paragraph.
F. Death or Disability. In the event of the Participant's
death, the full Cash and Share Account Balances shall
be distributed to the Beneficiary as soon as
practicable.
At the request of the Participant following his
Disability, the full Cash and Share Account Balances
shall be distributed to the Participant as soon as
practicable.
G. Form of Payments. Except as provided herein, any
distribution from a Cash Account will be in cash. Any
distribution from a Share Account will be in the form
of Shares; however, the Participant may elect, before
the 30th day preceding the tenth anniversary or
Retirement, as the case may be, to receive cash in lieu
of Shares for any percentage up to 100% of said
distribution.
All distributions on account of Hardship, death,
Disability, dissolution, Change in Control, Major
Transaction, or failure of payments shall be in cash.
H. Distributed Shares. The date of determination for the
Share Price of Shares distributed or converted
hereunder shall be:
(i) for payments under 4.04(B), December 31 of the
concluding year;
(ii) for payments under 4.04(C)(i), the last day of
the month prior to the payment;
(iii) for payments under 4.04(C)(ii), the last day of
the month following Retirement;
(iv) for payments under 4.04(D), the last trading
date of the month prior to the month in which
the Compensation Committee authorizes the
distribution;
(v) for payments under the first paragraph of
4.04(E), the last trading date of the month
preceding the triggering event;
(vi) for payments under the second paragraph of
4.04(E), the highest average of the high and low
prices on the New York Stock Exchange Composite
Transaction as reported in the Wall Street
Journal for any five consecutive trading days in
the 60 days preceding the Change in Control or
Major Transaction (if there is no trading in the
Shares on the New York Stock Exchange for a
substantial amount of time during the five-day
period, or if publication by the Wall Street
Journal of reports of Share transactions for any
day in the five-day period does not take place
or is subject to reporting error, the value of
Shares shall be determined by the Benefits
Committee on the basis of such market quotations
or other method as the Benefits Committee shall
deem appropriate);
(vii) for payments under 4.04(F), the last day of the
month following the triggering event;
(viii) for elections made during an election period
other than under the second paragraph of
4.04(F), the last day of the month following
filing of the election with the Company; and
(ix) for payments made under 4.06, the last day of
the month preceding the triggering event.
Shares to be distributed shall be purchased by the Company
or the Subsidiary on the open market, unless an officer of the
Company determines otherwise; provided, however, if the Company
or Subsidiary has placed an appropriate number of Shares in the
Rabbi Trust for the benefit of the Participant, the Company or
Subsidiary may satisfy the requirement by distribution of said
Shares.
I. Taxes. If a distribution is to be made solely in
Shares, the Company or the Subsidiary may withhold from such
distribution an amount equal to its withholding obligations under
state and Federal tax laws.
4.05 No Segregation of Assets. Neither the Company nor any
Subsidiary shall be required to set aside or segregate any assets
of any kind to meet any obligations under this Plan. All
obligations of the Company and the Subsidiaries shall be
reflected by bookkeeping entries only. The Participants shall
have no rights under this Plan to any specific assets of the
Company or the Subsidiaries (including any Shares purchased by
the Company to reflect its obligation hereunder) and ownership of
any insurance policies relating to Deferral Units shall remain
with the Company. The rights of a Participant under this Plan
shall be those of a general, unsecured creditor of the Company or
the Subsidiary.
4.06 Failure of Payments. Any provision to the contrary,
if, after termination of service on the Board of the Company or
the Subsidiary, as applicable, the Company or a Subsidiary shall
fail to make any payment to a Participant when due under this
Plan or any employer or company shall fail to make payments to
any Participant due under any of the Other Plans, each
Participant will be paid immediately a lump sum payment equal to
the balance of his Cash and Share Accounts (and the Actuarial
Value of the maximum value of future benefits from Deferral
Units). If any employer or company shall fail to make a payment
as provided above due to inadvertence or a good faith delay to
permit processing and shall immediately upon discovery of such
failure or delay make such payment in full, the original failure
to make the payment or payments shall not, for the purposes of
this paragraph, be a failure to make a payment. If any employer
or company shall, in good faith, contest a claim by a participant
under this Plan or any of the Other Plans, the failure to make
the contested payment or payments shall not, for the purpose of
this paragraph, be a failure to make a payment.
V. AMENDMENT OR TERMINATION
------------------------
5.01 Right to Amend and Terminate. The Compensation
Committee may amend or terminate this Plan at any time; provided,
however, that no such action shall affect any right or obligation
with respect to any Compensation previously earned; provided,
further, that, if the Compensation Committee, in its sole
discretion, determines that (a) changes in Federal income tax
statutes, rules, or regulations, (b) changes in the Federal tax
rate paid by the Company, or (c) the application or potential
application to the Plan of Section 406 of Title I of the Employee
Retirement Income Security Act of 1974 make it advisable,
existing Deferral Units may be modified or cancelled; and
provided further, no amendment or discontinuance in any manner
adverse to a Participant with respect to benefit formula or
optional form of payment may be made for three years following a
Change in Control or a Major Transaction. No such modification
or cancellation shall affect any Participant's Cash or Share
Account Balances. No such modification may reduce the then
established retirement income or death benefit of a Participant
who has had a Termination of Service, but it may reduce or
eliminate any subsequent increases in either or both.
VI. GENERAL PROVISIONS
------------------
6.01 Nonalienation of Benefits. Except as provided in the
split dollar option under prior provisions of the Plan, to the
fullest extent permitted by law a Participant shall not have the
right to commute, sell, assign, transfer, or otherwise convey the
right to receive any payments under this Plan, which payments and
the right thereto shall be nonassignable and nontransferable,
whether voluntarily or involuntarily.
6.02 Effectuation of Interest. In the event it should
become impossible for the Company, any Subsidiary, the
Compensation Committee, or the Benefits Committee to perform any
act required by the Plan, the Company, any Subsidiary, the
Compensation Committee, or the Benefits Committee may perform
such other act as it in good faith determines will most nearly
carry out the intent and purpose of the Plan.
6.03 Copy of Plan. An executed copy of the Plan shall be
available for inspection by Participants or other persons
entitled to benefits under the Plan at reasonable times at the
offices of the Company.
6.04 Headings. The headings of articles and sections of the
Plan are for convenience of reference only.
6.05 Gender and Number. Unless the context requires
otherwise, the singular shall include the plural; the masculine
gender shall include the feminine; and such words as "herein",
"hereinafter", "hereof", and "hereunder" shall refer to this
instrument as a whole and not merely to the subdivision in which
such words appear.
6.06 Separability. If any term or provision of this Plan,
as presently in effect or as amended from time to time, or the
application thereof to any payments or circumstances, shall to
any extent be invalid or unenforceable, the remainder of this
Plan and the application of such term or provision to payments or
circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each term or
provision of this Plan shall be valid and enforced to the fullest
extent permitted by law.
6.07 Applicability. All provisions of this Plan shall be
uniformly applicable to all Participants.
6.08 Governing Law. Except as otherwise required by law,
this Plan and all matters arising thereunder shall be governed by
the laws of The Commonwealth of Massachusetts.
6.09 Effective Date. This Amendment shall be effective
June 1, 1996 and as to Direction of Subsidiaries December 1,
1996.
s/George M. Sage
______________________________
Chairman
Pursuant to Votes of the
Compensation Committee