Exhibit 10.5.2
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EASTERN ENTERPRISES
Deferred Compensation Plan for Trustees
(amended and restated as of April 22, 1998)
1. Purpose
The purpose of this plan (the "Plan") is to assist members of the Board
of Trustees (the "Board") of Eastern Enterprises ("Eastern") who are not and
have never been employees of Eastern or its subsidiaries in making more
satisfactory provision for their income following their retirement from the
Board. To accomplish this purpose, the Plan provides for (a) the elective
deferral of certain fees until the participating member retires from the Board
and for the crediting of such deferrals, at the election of the member as
hereinafter provided, in Share Units, and (b) the crediting of additional Share
Units to accounts maintained hereunder for eligible members of the Board.
2. Administration
The Plan will be administered by the Treasurer of Eastern (the
"Treasurer").
3. Deferral of Retainers and of Fees for Attendance at Meetings
Each member of the Board who is not and has never been an employee of
Eastern or its subsidiaries (an "Eligible Trustee") will have the right to defer
receipt of payments on account of all cash retainers and fees for attendance at
meetings ("meeting fees") to which he or she may be entitled for any calendar
year as a member of the Board, including those to which he or she is entitled as
a member of any Committee of the Board or as Chairman of any such Committee. In
order to exercise his or her right to defer receipt of such cash payments for
any calendar year, the Eligible Trustee must make an election in accordance with
the provisions of paragraph 4 below. Such election must also set forth the
method by which the deferred amounts will be paid, subject to the provisions of
paragraph 9 below.
Any election to defer receipt of payments on account of retainers and
meeting fees payable in cash will apply to all such payments for the calendar
year to which the election relates.
4. Election to Defer
a. Except as provided in 4.b. below, any Eligible Trustee who wishes to
defer receipt of payments on account of retainers or meeting
fees payable in cash for any calendar year must make an
irrevocable election on a form satisfactory to the Treasurer
that is filed with the Treasurer prior to the beginning of the
calendar year in which the amounts would be paid if no such
election were made.
b. In the case of the first calendar year in which an Eligible
Trustee becomes a member of the Board or becomes entitled to
retainers and meeting fees, the election must be made within
thirty (30) days following the date on which the Eligible
Trustee becomes a member of the Board or becomes so entitled.
Such election will apply to all such amounts which would be
paid in cash during such year (and following such election) if
no such election had been made.
5. Cash Accounts; Share Unit Accounts
The Treasurer shall maintain for each Eligible Trustee two Accounts: a
Share Unit Account representing that portion, if any, of the amounts credited to
the Eligible Trustee hereunder that are denominated in Share Units, and a Cash
Account for all remaining amounts, if any, credited hereunder to the Eligible
Trustee. A "Share Unit" for purposes of the plan is a book-keeping unit
representing one share of the common stock, $1.00 par value, of Eastern ("Common
Stock").
6. Crediting of Elective Deferrals
a. Each Eligible Trustee who for any calendar year elects a
deferral under
paragraph 4 shall, on the form referred to therein, make an
irrevocable election to credit each such deferred payment to
his or her Cash Account or Share Unit Account or to both on
the basis of a percentage allocation specified in such
election. Amounts shall be credited to the Eligible Trustee's
Accounts as of the date they would have been paid absent the
deferral (the "crediting date").
b. If an Eligible Trustee has a balance in his or her Cash
Account, then an
additional amount in the nature of interest will be credited
to such Cash Account as of the end of each calendar year based
upon the average balance therein during such year (including
any prior interest credits) and upon a rate, as determined by
the Treasurer, equal to the prime rate, plus one percent, of
interest charged by BankBoston, N.A. as of the first day of
such year or upon a rate based on such other indices as the
Treasurer in his or her sole discretion from time to time
selects. Such credits will be made as long as there is any
amount credited to such Cash Account.
c. If an Eligible Trustee elects to have all or a portion of any
deferral under paragraph 4 credited to his or her Share Unit
Account, the number of whole and fractional Share Units
credited with respect to such deferral or portion thereof
shall be the quotient obtained by dividing the amount of such
deferral or portion thereof by the Fair Market Value of a
share of Common Stock on the crediting date with respect to
such deferral or portion thereof.
d. Commencing six months and one day following the date on which an
Eligible Trustee ceases to be a member of the Board, such
former Eligible Trustee, to the extent of the remaining
balance (if any) in his or her Account, may elect in writing
to make annual transfers from the Cash Account to the Share
Unit Account and vice versa. Each such transfer shall be
effected on the first business day of January of the year
following the year in which the transfer election is made. In
the event of a transfer from a Cash Account to a Share Unit
Account, the Cash Account shall be reduced by the amount of
the transfer and the Share Unit Account shall be credited with
additional whole or fractional Share Units equal to the
quotient obtained by dividing the amount of the transfer by
the Fair Market Value of a share of Common Stock on the date
of transfer. In the event of a transfer from a Share Unit
Account to a Cash Account, the Share Unit Account shall be
reduced by the number of Share Units transferred and the Cash
Account shall be credited with an amount equal to the product
of the number of Share Units transferred multiplied by the
Fair Market Value of a share of Common Stock on the date of
transfer.
7. Additional Annual Share Unit Credits. As of the date this amended and
restated Plan is approved by the Board and thereafter as of the first
day of each calendar quarter beginning with July 1, 1998 and ending
with January 1, 2002 (each, a "paragraph 7 crediting date"), each
individual who is an Eligible Trustee on such paragraph 7 crediting
date shall have credited to his or her Share Unit Account 150 Share
Units. The credit described in the preceding sentence shall be
appropriately adjusted in the event of an occurrence described in
paragraph 8.c. below. In the case of an individual who first becomes an
Eligible Trustee after the date this amended and restated Plan is
approved by the Board and before April 1, 2002, the first paragraph 7
crediting date for such individual shall be the date he or she first
becomes an Eligible Trustee and the credit made to such Eligible
Trustee's Share Unit Account as of such date shall be 150 Share Units
(adjusted as appropriate to reflect any occurrence described in
paragraph 8.c. below).
8. Certain General Provisions Applicable To Share Unit Accounts.
a. For purposes of this Plan, the "Fair Market Value" of a share of
Common Stock on any day shall be the average of the high and
low prices of the Common Stock as published in the new York
Stock Exchange Composite Transactions listing for such date
(or, if the New York Stock Exchange is not open for trading on
such day, the last previous day on which such trading
occurred); provided that, in the event that such prices for
the Common Stock shall not be so published, the Fair Market
Value of the Common Stock shall be reasonably determined by
the Treasurer.
b. On the date of payment of each cash dividend declared on the
Common Stock, there shall be credited to each Share Unit
Account with Share Units therein on such date a number of
additional whole and fractional Share Units equal to the
quotient obtained by dividing the dollar amount of dividends
that would be payable on the number of shares of Common Stock
represented by the Share Units in such Account on the record
date for such dividend, by the Fair Market Value of a share of
Common Stock on the payment date of such dividend.
c. The number of Share Units in each Share Unit Account shall be
appropriately adjusted by the Treasurer in the event of any
stock dividend or split, recapitalization, merger in which
Eastern is the surviving entity, combination or exchange of
shares or similar corporate change affecting the number or
type of shares of Eastern stock outstanding.
9. Payment of Amounts Deferred
a. Amounts in an Eligible Trustee's Cash Account and/or Share
Unit Account will be paid in cash only, in either of the
following ways as elected by the Eligible Trustee:
(i) in a lump sum on the first business day in January of
the year following the year in which the Eligible
Trustee ceases to be a member of the Board; or
(ii) in a number of consecutive annual installments (the
number of such installments, not to exceed ten, to
be elected by the Eligible Trustee) beginning in the
calendar year following the calendar year in which
the Eligible Trustee ceases to be a member of the
Board, the installment in each year to be paid on
the first business day of January in such year and
each installment to equal to the quotient obtained
by dividing (x) the total amount remaining in the
member's Cash Account and Share Unit Account on the
payment date (valuing the Share Unit Account based
on the Fair Market Value of the Common Stock on such
date), by (y) the number of annual installments
elected by the Eligible Trustee that remain unpaid
(including the installment to be paid on such date).
An Eligible Trustee shall elect the form of payment at the
time of his or her first deferral election under paragraph 4;
provided, that if an individual who is an Eligible Trustee on
the date this amended and restated Plan is approved by the
Board has not previously elected any deferral under paragraph
4, he or she shall make the election described in this
paragraph within thirty (30) days from and after the date of
such approval; and further provided, that in the case of an
individual who first becomes an Eligible Trustee after the
date this amended and restated Plan is approved by the Board
and before April 1, 2002, such election shall be made within
thirty (30) days of becoming an Eligible Trustee. Any election
under this paragraph 9.a that is not made in connection with
an Eligible Trustee's first deferral election under paragraph
4 shall be made in writing on a form acceptable to the
Treasurer and filed with the Treasurer within the time limits
described in the preceding sentence. In the absence of an
effective election under this paragraph 9.a., an Eligible
Trustee shall be deemed to have elected the lump sum payment
described at (i) above. Except as provided in paragraph 9.b
below, once filed with the Treasurer, an Eligible Trustee's
election under this paragraph 9.a. as to the method by which
amounts credited to his or her Accounts will be paid to him or
her will be irrevocable.
b. If an Eligible Trustee or former Eligible Trustee, or any
beneficiary of an Eligible Trustee after the Eligible
Trustee's death, incurs a severe financial hardship, the
Treasurer, in his or her sole discretion, may accelerate
payment from the Eligible Trustee's Cash Account, if any, to
the extent reasonably necessary to alleviate the severe
financial hardship. No revision shall be made with respect
to the schedule for payments from the Eligible Trustee's or
former Eligible Trustee's Share Unit Account. Any such severe
financial hardship must have been caused by an accident,
illness, or event beyond the control of the member, former
member, or beneficiary. If payment of any portion of an
Eligible Trustee's Cash Account is accelerated pursuant to
this paragraph 9.b., the remainder of such Account shall be
paid in accordance with the Eligible Trustee's election or
deemed election under paragraph 9.a.
c. If at the time of death of an Eligible Trustee or former
Eligible Trustee there is any balance remaining in his or her
Cash Account and/or Share Unit Account, Eastern will pay such
balance in cash to the beneficiary or beneficiaries
designated by the Eligible Trustee on a form satisfactory to
the Treasurer. At the Eligible Trustee's election, such
payment will be made either in a lump sum on the first
business day of January of the year following the year of the
Eligible Trustee's death or in a number of consecutive annual
installments (as elected by the Eligible Trustee but not to
exceed 10) beginning in the calendar year following the year
of the Eligible Trustee's death, each annual installment to
be paid on the first business day of January in such year and
the amount of each installment to be calculated in the manner
provided in paragraph 9.a.(ii) above. The Eligible Trustee
may at any time change his or her designation of a
beneficiary or beneficiaries and the schedule for payments
to such
beneficiary or beneficiaries with respect to amounts in his
or her Cash Account by filing an additional form with the
Treasurer. The Eligible Trustee may at any time change his
or her designation of beneficiary or beneficiaries with
respect to amounts in his or her Share Unit Account by filing
an additional form with the Treasurer. However, the Eligible
Trustee's election as to the schedule for payments to his or
her beneficiary or beneficiaries from a Share Unit Account
must be made prior to the beginning of the first calendar
year in which he or she defers receipt of payments into a
Share Unit Account under the Plan (or, if later, the election
date specified in paragraph 9 above), and shall be
irrevocable
thereafter until six months and one day following the date on
which such Eligible Trustee ceases to be a member of the
Board, after which time such former Eligible Trustee may at
any time change the schedule for payments to such beneficiary
or beneficiaries with respect to amounts, if any, remaining
in his or her Share Unit Account.
d. On the date of any payment from a Share Unit Account pursuant
to paragraph 9.a., 9.b. or 9.c. above, the number of whole
and fractional Share Units required to make such payment
shall be
converted to cash based on the Fair Market Value of the Common
Stock on such date. Payments from Share Unit Accounts shall
be made in cash only. Eligible Trustees, former Eligible
Trustees and beneficiaries shall in no event have any right
to receive Share Units or shares of Common Stock under the
Plan. In the event that any installment payment under
paragraph 9.a., 9.b. or 9.c. is to be made from both an
Eligible Trustee's or former Eligible Trustee's Share Unit
Account and Cash Account, an amount shall be paid from each
Account in proportion to the value of such Account on the
payment date, as determined by the Treasurer.
10. Payments Under the Plan
Eastern will comply with any requirements which may be established by
law with respect to payments under the Plan, including the filing of any notices
and the withholding of any taxes which may be required.
11. Rights of Eligible Trustees and Other Persons
Any rights accruing to any Eligible Trustee or other person under the
Plan will be solely those of an unsecured general creditor of Eastern. Such
rights may not be assigned or otherwise transferred by such Eligible Trustee or
person and will not be subject to be taken by creditors of such Eligible Trustee
or person by any process whatsoever, and any attempt to cause such interest to
be so subjected will not be recognized, except to such extent as may be required
by law.
Notwithstanding the foregoing, Eastern in its sole discretion may
establish a so-called "rabbi" trust or similar trust, whether or not conforming
to Rev. Proc. 92-64, or may avail itself of any such trust which it has
previously established, to provide for the payment of benefits hereunder,
subject to such terms as the Board may determine (a "trust"). In the event
Eastern establishes a trust in respect of the Plan or causes a pre-existing
trust to cover the Plan, and at the time of a Change of Control such trust (i)
has not been terminated or revoked and (ii) is not "fully funded" (as
hereinafter defined), Eastern shall promptly deposit in such trust cash
sufficient to cause the trust to be "fully funded" as of the date of the
deposit. For purposes of this subparagraph, any such trust shall be deemed
"fully funded" as of any date if, as of that date, the fair market value of the
assets held in trust is not less than (1) the aggregate of the balances,
determined as of such date, of all Cash Accounts and Share Unit Accounts
hereunder, plus (2) the aggregate of the account balances, determined as of such
date, under all other individual-account type plans and arrangements provided
for through the trust, plus (3) the aggregate of the benefits then in pay status
or otherwise payable under all other plans and arrangements provided for through
the trust, as determined in accordance with the rules set forth in such plans
and arrangements (or, with respect to any such plan or arrangement where no such
rules are set forth, the aggregate of the present value of all accrued benefits
under such plan or arrangement, determined by applying the interest and
mortality assumptions used in determining lump sum present values under the
qualified defined benefit pension plan maintained by Eastern, or if no such
qualified plan is then maintained by Eastern, by applying the assumptions used
prior to the Change of Control in determining Eastern's pension expense under
FAS 87 or any successor pronouncement with respect to such plan or arrangement).
For purposes of this subparagraph, a Change of Control will be deemed to have
occurred if (i) after January 1, 1988 any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), other than
Eastern, becomes a beneficial owner directly or indirectly of securities
representing twenty-five percent (25%) or more of the combined voting power of
the then outstanding voting securities of Eastern; or (ii) within two years
after the commencement of a tender offer or exchange offer for the voting
securities of Eastern (other than by Eastern), or as a result of a merger,
consolidation, sale of assets or contested election of trustees or directors, or
any combination of the foregoing, the individuals who were trustees of Eastern
immediately prior thereto shall cease to constitute a majority of the Board or
of the board of trustees or directors of any successor to Eastern by merger,
consolidation or sale of assets.
12. Modification and Termination of the Plan
The Plan may be amended or terminated by the Board at any time, in
whole or in part, such amendment or termination to become effective on the date
specified by the Board.
13. Miscellaneous
The Plan was originally effective as of April 1, 1980 and was amended
and restated to incorporate certain additional Share Unit provisions (see
paragraph 7 above and passim) effective as of April 22, 1998. Certain provisions
applicable to individuals who participated in the Plan prior to April 22, 1998
are set forth in the Plan as in effect prior to this April 22, 1998 amendment
and restatement.
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As amended and restated by the Board of Trustees April 22, 1998