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THE SOUTHERN CONNECTICUT GAS COMPANY
BOARD OF DIRECTORS RETIREMENT PLAN
The retirement plan set forth herein is known as The Southern
Connecticut Gas Company Board of Directors Retirement Plan (the
"Plan"). The Plan shall be effective October 1, 1992 and shall
continue in effect until amended, superseded or terminated by a
resolution of the Board of Directors of The Southern Connecticut
Gas Company.
1. Definitions: The following terms when used in this Plan with
initial capital letters shall have the meanings assigned to
them below:
(a) "Annual Retainer" means the annual retainer payable to
members of the Board of Directors during the fiscal year
in which the Eligible Director attains the age of sixty-
five (65).
(b) "Change in Control" of the Company shall be deemed to
have occurred if:
(i) Any Person is or becomes an Acquiring Person;
(ii) Less than 2/3 of the total membership of the Board
of Directors of the Company shall be Continuing
Directors; or
(iii) The shareholders of the Company shall approve a
merger or consolidation of the Company or a plan
of complete liquidation of the Company or an
agreement for the sale or disposition by the
Company of all or substantially all of the
Corporation's assets.
In connection with this definition of "Change in
Control", the capitalized terms in the definition are
defined as follows: (a) "Acquiring Person" means any
Person who is or becomes a "beneficial owner" as defined
in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") of securities of the
Company; (b) "Affiliate" and "Associate" shall have the
meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act; (c)
"Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board on
October 1, 1992 and any successor of that Continuing
Director while such successor is a member of the Board of
Directors of the Company and who is not an Acquiring
Person or an Affiliate or Associate of any Acquiring
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Person and who is elected to succeed the Continuing
Director by a majority of the Continuing Directors; and
(d) "Person" shall have the meaning assigned to it in
Section 13(d) and 14(d) of the Exchange Act.
(c) "Code" means the Internal Revenue Code of 1954, as
amended. All references to any section of the Code shall
be deemed to refer not only to such section but also to
any amendment thereof and any successor statutory
provision.
(d) "Company" means The Southern Connecticut Gas Company and
any person, firm or corporation which may succeed to the
business of the Company by merger, consolidation or
otherwise and which, by appropriate action, shall adopt
the Plan.
(e) "Effective Date" means October 1, 1992.
(f) "Eligible Director" means a member of the Board of
Directors of the Company eligible to receive payments in
accordance with the terms of the Plan.
(g) "Plan" means The Southern Connecticut Gas Company Board
of Directors Retirement Plan and as it may hereafter be
amended.
(h) "Plan Year" means the Fiscal Year October 1 - September
30.
(i) "Retirement Date" means the date on which the Eligible
Director retires from the Board of Directors of the
Company but shall not be earlier than the date on which
the Eligible Director attains the age of sixty-five (65).
2. Eligibility: If an individual, duly elected to the Board of
Directors of the Company, receives a retainer as a Director
for five (5) years and is sitting as a Director at Retirement
Date, such individual shall be an Eligible Director entitled
to receive payments in accordance with the terms of this Plan.
3. Payments: An Eligible Director shall receive an annual
payment, payable in monthly installments commencing on the
first day of the month following the Retirement Date, of an
amount equal to the Annual Retainer payable to Directors
during the Fiscal Year in which the Eligible Director attains
the age sixty-five (65) and is sitting as a Director of the
Company at Retirement Date. Such payments shall continue for
a period of ten (10) years or the life of the Eligible
Director, whichever is shorter. If a Director dies before
payments under this Plan are to be made, the Director's estate
shall have no claim on any amounts accrued for such Director.
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4. Accrual of Payments, Funding and Trust Accounts: Commencing
October 1, 1992 the Company shall accrue on a monthly basis
the total amount of the monthly payments to be paid to
Eligible Directors calculated on the net present value due and
owing to each Eligible Director after the Director reaches the
Retirement Date. Such amounts shall be a credit to a
special account on the Company's books designated "Directors'
Retirement Account".
The Company shall not be required to fund or otherwise
segregate assets for the payments to Eligible Directors.
Notwithstanding the foregoing, the Company shall establish a
trust fund (or amend an existing trust fund) (the "Trust").
The Company shall contribute an amount that it determines to
be sufficient to actuarially fund the Eligible Directors'
monthly payments under this Plan. The Company shall review
such funding levels once a year as of January 1 and, if needed
to maintain the funding on a sound actuarial basis, increase
or decrease the level of funding. The Trust shall be a "rabbi
trust" and shall be embodied in a trust agreement with an
institutional trustee (the "Trustee"). Payments to Eligible
Directors shall be paid from the funds in the "rabbi trust" by
the Trustee to the extent not paid by the Company. The
Trustee shall establish an account (an "Account") for this
Plan to which shall be credited annually the Company's total
contribution to be made pursuant to this Section 4. The
account shall be credited with interest as earned, including
realized an unrealized investment gains and losses. The
establishment of the Account is solely for accounting and
funding purposes and shall not otherwise restrict the use of
the funds in the Trust.
5. Directors' Contributions: This Plan is a non-contribution
retirement plan.
6. Qualification of Plan: This Plan is a non-qualified plan as
defined in Sections 401(a) and 501(a) of the Code.
7. Restrictions on Transfers: No Eligible Director shall assign,
transfer or pledge any right or claim which such Eligible
Director may have under this Plan.
8. Successors to Company: No merger or acquisition of the
Company or any Change in Control of the Company shall cause
this Plan to be amended, superseded or terminated. Such
amendment, supersedure or termination shall occur only with
the approval of the Board of Directors at a meeting of the
Board of Directors held in accordance with the By-Laws of the
Company.
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9. Accounting: The Company, at no cost to Eligible Directors,
shall annually, or at other times deemed appropriate by the
Company's management, retain the services of counsel,
independent accountants and actuaries to assure that the
accounting accruals are consistent with the terms of this Plan
and applicable laws. To the extent permitted by law, the
Company shall be entitled to rely upon all tables, valuations,
certificates, opinions and reports furnished by any actuary,
accountant, counsel or other person(s) employed or engaged for
such purposes.
10. Expenses of Administration. All expenses that shall arise in
connection with the administration of the Plan including, but
not limited to, the compensation of any actuary, accountant,
counsel, other experts or other person who shall be appointed
by the Company in connection with the administration thereof,
shall be paid by the Company.
11. Amendment: The Company reserves the right to amend, modify,
suspend or terminate the Plan by action of its Board of
Directors, provided, however, no such action shall operate to
recapture for the Company any payments previously made to an
Eligible Director under the Plan, nor except to the extent
necessary to meet the requirements of the Code or any other
governmental authority, to deprive an Eligible Director of any
benefit due such Eligible Director under the Plan.
12. Notices: Any notices required or permitted to be given under
this Plan shall be in writing and shall be deemed to have been
given when delivered, or when mailed, if mailed by registered
or certified mail, return receipt requested to the respective
addresses of the Company and Eligible Director or to such
other address as any party hereto shall designate to the other
party in writing.
13. Severability: The provisions of the Plan are severable. The
invalidity or unenforceability of any provision of the Plan
shall not affect the validity or enforceability of any other
provision.
14. Governing Law: This Plan shall be governed by and interpreted
in accordance with the substantive of laws of the State of
Connecticut, except as any such laws may be preempted by
federal law.