Exhibit 10(bb)
FIRST AMENDMENT
TO THE
EASTERN UTILITIES ASSOCIATES
KEY EXECUTIVE PLAN
WHEREAS, Eastern Utilities Associates (the "Association") previously
adopted the Eastern Utilities Associates Key Executive Plan (the "Plan")
effective July 1984;
WHEREAS, the Association amended and restated the Plan effective January 1,
1995;
WHEREAS, the Association has resolved to enhance the benefits for Donald G.
Pardus and John R. Stevens; and
WHEREAS, the Association has reserved the right to amend the Plan from time
to time under Section 10 of the Plan;
NOW, THEREFORE, in accordance with and pursuant to the foregoing, the Plan
is amended, effective January 1,1999, as follows:
1. Section 4(b) is hereby amended by deleting the same in its entirety and by
substituting therefore the following:
"The Supplemental Pension Benefit provided by this Plan shall consist of
the monthly payment of twenty-five percent of the Key Executive's Salary to
the Key Executive for the fifteen year period beginning on the first day of
the month following the termination of Key Executive's employment with the
Association; providing, however, that the Supplemental Pension Benefit
payment period shall be twenty years instead of fifteen years in the case
of Donald G. Pardus and John R. Stevens.
2. Section 8(b) is hereby amended by deleting the same in its entirety and by
substituting therefore the following:
"Notwithstanding anything to the contrary in Section 8(a) above, the
benefits payable under this Plan shall be offset by the excess cash
surrender value or death benefits in any insurance policy or policies owned
by the Key Executive over the amount payable to the Association (or any of
its affiliates) under any split-dollar insurance agreement between the
Association (or any of its affiliates) and the Key Executive, after such
excess cash value or death benefits have been further reduced by any
amounts used to offset benefits due under the Supplemental Retirement Plan
for Certain Officers of Eastern Utilities Association and Its Affiliates.
In determining the benefits that could be paid with such excess cash value,
(i) the amount of excess cash surrender value under this paragraph (b)
shall be determined effective as of the date that the split-dollar
insurance arrangement between the participant and EUA Service Corporation
terminates; and (ii) discounting for present value shall be performed using
the 83-Group Annuity Mortality table and an interest rate equal to the
then-prevailing 30 year Treasury Note rate on the date the participant
commenced benefits under the Plan; provided, however, that the interest
rate shall in no event exceed 5.19% when discounting the Plan benefits
payable to Donald G. Pardus and John R. Stevens."
IN WITNESS WHEREOF, EASTERN UTILITIES ASSOCIATES has caused this instrument
to be executed and delivered on its behalf by the undersigned on this 30th day
of September 1999.
ATTEST: EASTERN UTILITIES ASSOCIATES
/s/ Illegible /s/ Paul J. Choquette, Jr.
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Secretary By: Paul J. Choquette, Jr.
Its: Compensation and Nominating
Committee Chairman
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KEY EXECUTIVE PLAN
OF
EASTERN UTILITIES ASSOCIATES
Amended and Restated Effective January 1, 1995
The undersigned officer of Eastern Utilities Associates hereby certifies
that this is a true and complete copy of the Key Executive Plan of Eastern
Utilities Associates, amended and restated effective January 1, 1995 and as in
full force and effect on the date hereof.
KEY EXECUTIVE PLAN
OF
EASTERN UTILITIES ASSOCIATES
1. PURPOSE
The purpose of the Key Executive Plan of Eastern Utilities Associates (the
"Plan") is to advance the interests of Eastern Utilities Associates (the
"Association") by providing supplemental pension benefits and death benefit
coverage to those key employees who contribute significantly to the performance
of the Association and its affiliates (the "Key Executives"). The Plan is
intended to enhance the ability of the Association to attract and retain
individuals of superior managerial ability and to motivate such individuals to
exert their best efforts towards future progress and profitability of the
Association. This amendment and restatement of the Plan is intended to supersede
the Key Executive Insurance Plan as originally adopted by the Association in
July 1984.
2. ADMINISTRATION AND INTERPRETATION
(a) Administration. The Plan is administered by the Association. The
Association, from time to time, may adopt such rules and regulations as may be
necessary or desirable for the proper and efficient administration of the Plan
and as are consistent with the terms of the Plan, The Association, from time to
time, may also appoint such individuals to act as the Association's
representatives as the Association considers necessary or desirable for the
effective administration of the Plan. Any notice or document required to be
given or filed with the Association will be properly given or filed if delivered
or mailed, by certified or registered mail, postage prepaid, to the Association
at One Liberty Square, P.O. Box 2333, Boston, MA 02107.
(b) Top Hat Exemption. It is the Association's intent that this Plan,
as set forth herein, constitute an unfunded plan for a "select group of
management and highly compensated employees" within the meaning of U.S.
Department of Labor Regulation Section 2520.104-23, and comply with the
applicable requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(c) Interpretation. The interpretation and construction by the
Association of any provisions of the Plan and any determination by the
Association under any provision of the Plan shall be final and conclusive for
all purposes.
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(d) Limitation on Liability. Neither the Association, the trustees of
the Association (collectively, the "Trustees") or any individual authorized to
act on behalf of the Association shall be liable for any act, omission,
interpretation construction or determination made in connection with the Plan in
good faith. The Trustees and any individuals authorized to act on behalf of the
Association shall be entitled to indemnification and reimbursement by the
Association in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law and under any
liability insurance coverage that may be in effect from time to time.
3. PARTICIPATION
The individuals eligible to participate in this Plan shall be those
Key Executives as the Association from time to time shall determine. A list of
the Key Executives is attached hereto as Appendix A. The Association shall
update Exhibit A from time to time as the Association adds additional
individuals as Key Executives under the Plan.
4. SUPPLEMENTAL PENSION BENEFIT
(a) Eligibility. A Key Executive shall be entitled to receive payment
of a Supplemental Pension Benefit (as defined in Section 4(b) below) upon
Retirement (as defined in Section 4(c) below) or Termination without Cause (as
defined in Section 4(d) below).
(b) Amount and Payment of Supplemental Pension Benefit. The
Supplemental Pension Benefit provided by this Plan shall consist of the monthly
payment of twenty-five percent of the Key Executive's Salary to the Key
Executive for the fifteen year period beginning on the first day of the month
following the termination of Key Executive's employment with the Association.
For purposes of this Plan, the Key Executive's Salary shall equal the highest
annualized rate of salary paid to the Key Executive at any time prior to the Key
Executive's sixty-fifth birthday.
(c) Retirement. A Key Executive may retire at any time on or after the
first day of any month coincident with or next following the earlier of the date
on which the Key Executive (i) attains sixty-one years of age and completes ten
or more years of vesting service under the Employees' Retirement Plan of Eastern
Utilities Associates and its Affiliated Companies (the "Tax-Qualified Pension
Plan") or (ii) qualifies for Special Early Retirement under Section 4.4 of the
Tax-Qualified Pension Plan.
(d) Termination without Cause. Termination without Cause shall consist
of any termination of the Key Executive's employment by the Association
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without Cause (as defined in Section 6 below) and any termination of the Key
Executive's employment by the Key Executive under circumstances which entitle
the Key Executive to severance benefits under any plan, agreement or arrangement
with the Association or its affiliates.
5. DEATH BENEFITS
(a) Death Benefit After Commencement of the Supplemental Pension
Benefit. In the event of the Key Executive's death after the Supplemental
Pension Benefit has commenced but before the expiration of the fifteen year
payment period for such benefit, the Association shall continue to pay the Key
Executive's Supplemental Pension Benefit for the remainder of such period to the
Beneficiary (as defined in Section 5(c) below) of such Key Executive. If the
Beneficiary dies after the death of the Key Executive, but prior to receiving
the full death benefit under this Section 5(a), any remaining benefit shall be
paid to the Beneficiary's estate. No death benefit shall be payable under this
Plan in the event that the Key Executive dies after receiving his entire
Supplemental Pension Benefit.
(b) Death Benefit Before Commencement of the Supplemental Pension
Benefit. In the event of the Key Executive's death before the Supplemental
Pension Benefit has commenced, the Association shall pay an amount equal to two
times the Key Executive's Salary in a single lump sum to the Beneficiary (as
defined in Section 5(c) below) of such executive. Such payment shall be made
within ninety days of the Key Executive's death. If the Beneficiary dies after
the death of the Key Executive, but prior to receiving the benefit under this
Section 5(b), such benefit shall be paid to the Beneficiary's estate.
(c) Beneficiary. The Beneficiary shall mean the person or persons
designated by the Key Executive to receive a death benefit under the Plan in the
event of the Key Executive's death. If the Key Executive is married and
designates someone other than his legal spouse, the designation by such
executive must include the written consent of such spouse at the time the
designation is made in order to be valid. A former spouse's consent shall not be
binding on a subsequent spouse.
A Beneficiary designation must be filed with the Association prior to
the Key Executive's death to be effective. In addition, the designation of a
Beneficiary will not be effective if the Beneficiary dies before the Key
Executive. If there is no Beneficiary designation in effect immediately prior to
the Key Executive's death, the Beneficiary shall be (i) the Key Executive's
surviving spouse, in the case of a married Key Executive, or (ii) the estate of
the Key Executive, in the case of a Key Executive who is not married.
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6. TERMINATION FOR CAUSE
For purposes of this Plan, "Cause" shall exist for the Association to
terminate the Key Executive's employment if, and only if, the Key Executive has
committed theft, embezzlement or other serious and substantial crimes against
the Association. For purposes of this definition, no act or omission shall be
considered to have been "willful" unless it was not in good faith and the Key
Executive had knowledge at the time that the act or omission was not in the best
interests of the Association. The Key Executive must be notified in writing by
the Association of any termination of his employment for Cause, which writing
shall set forth in reasonable detail the facts and circumstances relied upon
therefor. The Key Executive will then have the right, within ten days of receipt
of such notice, to file a written request for review. In such case, the Key
Executive will be given the opportunity to be heard, personally or by counsel,
by the Trustees who are not then executives of the Association (the "Independent
Trustees") and a majority of the Independent Trustees must thereafter confirm
that such termination is for Cause. If the Independent Trustees do not provide
such confirmation, the termination shall be treated under this Plan as a
termination by the Association without Cause.
7. FINANCING OF PLAN BENEFITS
All amounts due and benefits provided under this Plan shall constitute a
general obligation of the Association. The Association shall not be required to
segregate on their books any amount to be used for the payment of benefits under
this Plan or maintain any life insurance policy on behalf of a Key Executive.
8. EFFECT ON OTHER PLANS AND AGREEMENTS
(a) Benefits provided to a Key Executive hereunder shall be in
addition to any benefits the Key Executive is entitled to under any employer
stock, deferred compensation, savings, retirement, severance or other employee
benefit plan, agreement, arrangement or understanding, including but not limited
to the Tax-Qualified Pension Plan, the Supplemental Retirement Plan for Certain
Officers of Eastern Utilities Associates and its Affiliated Companies, the
Retirement and Savings Restoration Plan for Members of The Employees' Retirement
Plan of Eastern Utilities Associates and its Affiliated Companies, the Eastern
Utilities Associates Employees' Savings Plan and any severance agreement with
the Association or its affiliates.
(b) Notwithstanding anything to the contrary in Section 8(a) above,
the benefits payable under this Plan shall be offset by the excess cash value or
death benefits in any insurance policy or policies owned by the Key Executive
over the amount payable to the Association (or any of its affiliates) under any
split-dollar
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insurance agreement between the Association (or any of its affiliates) and the
Key Executive, after such excess cash value or death benefits have been further
reduced by any amounts used to offset benefits due under the Supplemental
Retirement Plan for Certain Officers of Eastern Utilities Associates and Its
Affiliates. The value of benefits under such plans shall be determined on the
date the Key Executive or Beneficiary, as the case may be, would begin receiving
benefits under this Plan. To the extent that the benefit due under this Plan is
offset by excess amounts under such a split-dollar life insurance agreement, no
benefit shall be due under this Plan. For purposes of determining the benefit
which could be paid with such excess amounts, discounting shall be calculated
using the 83-Group Annuity Mortality table and an interest rate equal to the
then prevailing thirty year Treasury Note rate on the date such determination is
made.
9. CLAIMS PROCEDURE
The procedure for all claims under this Plan is set forth in Appendix
B hereto.
10. AMENDMENT AND TERMINATION
The Association reserves the right to amend or terminate the Plan in
whole or in part at any time. No amendment or termination of the Plan may
deprive any Key Executive without his consent of any benefit to which the Key
Executive was previously entitled to based on the Key Executive's Salary prior
to such amendment and termination. The Plan shall survive any acquisition by or
merger or consolidation into any other corporation. In the event of a
reorganization, consolidation, dissolution or merger of the Association, the
Plan shall be continued by the successor, and in such event the successor shall
be substituted for the Association and shall assume all of the Plan liabilities
and all of the powers, duties and responsibilities of the Association under the
Plan.
11. MISCELLANEOUS
a. No Employment Contract. Nothing contained in the Plan shall be construed
as conferring upon any Key Executive the right to continue in the employ of the
Association and its affiliates.
b. Employment with Affiliates. Employment by the Association for the
purposes of this Plan shall be deemed to include employment by any affiliate or
subsidiary of the Association.
c. Withholding. The Association will withhold from any amounts payable
under this Plan all federal, state, city and local taxes as shall be legally
required.
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d. Action by Association. Any action required of or permitted by the
Association under the Plan shall be by resolution of its Board of Trustees, by
resolution of a duly authorized committee of its Board of Trustees, or by a
person or persons authorized by resolutions of its Board of Trustees or such
committee.
e. Nonassignability. A Key Executive shall not have the power or right to
sell, exchange, pledge, transfer, assign or encumber or dispose of such
executive's interest in any benefit under this Plan nor shall such interest be
subject to seizure for the payment of a Key Executive's debts, judgments,
alimony or separate maintenance or be transferable by operation of law in the
event of a Key Executive's bankruptcy or insolvency.
f. Severability. In the event any provision of the Plan shall be held to
be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the Plan.
g. Governing Law; Construction. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the Commonwealth of Massachusetts to the extent not preempted by ERISA.
Titles and headings to Sections herein are for purposes of reference only, and
shall in no way limit, define or otherwise affect the meaning or interpretation
of any provisions of the Plan.
h. Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine and neuter genders, the plural shall include
the singular and the singular shall include the plural.
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APPENDIX A - KEY EXECUTIVES COVERED UNDER THE PLAN
The following is a list of each Key Executive covered under the Plan as of
January 1, 1995:
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APPENDIX B - CLAIMS PROCEDURE
a. Filing of a Claim for Benefits. All claims for benefits under the Plan
shall be in writing and shall be submitted to the Treasurer of the Association
or such other person as the Association may designate from time to time for the
processing of claims. Upon receipt of a claim for benefits, the Association may
require the claimant to complete such forms and provide such additional
information as may be reasonably necessary to establish the claimant's right to
benefits under the Plan.
b. Notification to Claimant of Decision. If a claim for benefits is wholly
or partially denied, the Association shall furnish to the claimant a notice of
the decision, meeting the requirements of paragraph (c) below, within ninety
(90) days after receipt of the claim. If the special circumstances require more
than ninety (90) days to process the claim, this period may be extended for up
to an additional ninety (90) days by giving written notice to the claimant
before the end of the initial 90-day period stating the special circumstances
requiring the extension and the date by which a final decision is expected.
Failure to provide a notice of decision in the time specified shall constitute a
denial of the claim and the claimant shall be entitled to require a review of
the denial under the review procedures specified in paragraphs (d) and (e)
below.
c. Content of Notice. The notice to be provided to every claimant who is
denied a claim for benefits under paragraph (b) above shall be in writing and
shall set forth, in a manner calculated to be understood by the claimant, the
following:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent Plan provisions on which the denial is
based;
(3) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(4) An explanation of the Plan's claim review procedure describing the
steps to be taken by a claimant who wishes to submit his or her claim
for review.
d. Review Procedure. The purpose of the review procedure set forth in this
paragraph and in paragraph (e) below is to provide a procedure by which a
claimant may have a reasonable opportunity to appeal a denial of a claim to the
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Association for a full and fair review. To accomplish that purpose, the claimant
or his duly authorized representative:
(1) May request a review upon written application to the Association;
(2) May review pertinent Plan documents; and
(3) May submit issues and comments in writing.
A claimant (or his duly authorized representative) shall request a review
by filing a written application for review with the Association at any time
within sixty (60) days after receipt by the claimant of written notice of the
denial of his or her claim.
e. Decision on Review. The decision on review of a denied claim shall be
made in the following manner:
(1) The decision on review shall be made by the Association, which
may in its discretion hold a hearing on the denied claim. The
Association shall make its decision promptly, which shall
ordinarily be not later than sixty (60) days after the Plan's
receipt of the request for review, unless special circumstances
(such as the need for holding a hearing) require an extension of
time for processing. In that case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120)
days after receipt of the request for review. If an extension of
time is required due to special circumstances, written notice of
the extension shall be furnished to the claimant prior to the
time the extension commences.
(2) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references
to the pertinent Plan provisions on which the decision is based.
(3) In the event the decision on review is not furnished to the
claimant within the time required, the claim shall be deemed
denied on review.
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