Exhibit 10.5
Eastern Enterprises
Supplemental Executive Retirement Plan
(Amended and Restated Effective September 1, 1999)
1. Purpose. The purpose of this Plan is to provide key management
personnel of Eastern Enterprises and its subsidiaries with an appropriate level
of retirement income by supplementing the retirement benefits provided under the
Eastern Enterprises Headquarters Retirement Plan, the Boston Gas Company
Retirement Plan, and the Midland Enterprises Inc. Salaried Retirement Plan, as
applicable. The Plan as originally adopted and as subsequently amended is herein
amended and restated effective September 1, 1999.
2. Definitions. For purposes of this Plan, the following terms will have
the following meanings:
(a) The word "Eastern" will mean Eastern Enterprises and any successor,
including without limitation any successor to or acquiror of the
stock or assets of Eastern in a transaction constituting a Change of
Control.
(b) The word "Plan" will mean the amended and restated Eastern
Enterprises Supplemental Executive Retirement Plan set forth herein,
together with all amendments hereto. Where the context requires, the
term "Plan" also includes the Eastern Enterprises Supplemental
Executive Retirement Plan as in effect prior to
September 1, 1999.
(c) The words "Retirement Plan" will mean, as applicable, the Eastern
Enterprises Headquarters Retirement Plan, the Boston Gas Company
Retirement Plan, and the Midland Enterprises Inc. Salaried
Retirement Plan, as from time to time amended.
(d) The words "Participating Subsidiary" will mean any Participating
Employer (as defined in the Retirement Plan), other than Eastern.
(e) The word "Compensation" will have the meaning provided in (i) or
(ii) below, whichever is applicable.
(i) With respect to any Officer first receiving benefits under
the Plan before January 1, 1994, Compensation" means, for
any year, the salary paid by Eastern or by a Participating
Subsidiary to such Officer for such year (calculated as of
his or her Earnings Measurement Date, as defined in the
Retirement Plan) and fifty percent (50%) of bonuses and
incentive awards paid (whether in cash or stock) by Eastern
or by a Participating Subsidiary to such Officer in such
year; provided, that amounts deferred by such Officer under
Eastern's Deferred Compensation Plan for Certain Management
Employees shall be treated as paid in the year they would
have been payable but for such deferral; further provided,
that in determining for the purposes hereof the amount of
an incentive award paid (whether in cash or stock) under
Eastern's Executive Incentive Compensation Plan (x) there
shall be included only the lesser of the amount paid or the
target award amount established in creating the incentive
opportunity to earn such award and (y) awards based on a
fixed number of shares of Eastern stock shall be valued at
the price for Eastern stock utilized in creating the
incentive opportunity to earn such award; and, further
provided, that no amount will be included with respect to
stock options or stock appreciation rights.
(ii) With respect to any Officer first receiving benefits under
the Plan on or after January 1, 1994, "Compensation" means,
for any calendar year, the salary paid by Eastern or by a
Participating Subsidiary to such Officer for such calendar
year (calculated as of his or her Earnings Measurement
Date, as defined in the Retirement Plan) and one hundred
percent (100%) of bonuses and incentive awards (whether
payable in cash or stock) earned by such Officer with
respect to such calendar year under Eastern's Executive
Incentive Compensation Plan or any similar executive
incentive plan adopted by Eastern after January 1, 1994;
provided, that amounts deferred by such Officer under any
deferred compensation and/or savings plan maintained by
Eastern or any Participating Subsidiary from time to time
shall be treated as paid in the calendar year they would
have been payable but for such deferral, and the election
to so defer amounts earned shall be disregarded for
purposes of determining amounts earned; further provided,
that in determining for purposes hereof the amount of an
incentive award earned (whether payable in cash or stock),
(a) a bonus or award that relates to a plan period of more
than one calendar year, when earned in accordance with such
Plan at the end of such period, shall be deemed to have
been earned in equal annual installments during such
period, and (b) awards based on a fixed number of shares of
Eastern stock shall be valued at the price for Eastern
stock utilized in creating the incentive opportunity to
earn such award; and, further provided, that no amounts
will be included with respect to stock options, stock
appreciation rights or restricted stock awards.
(f) The word "Officer" will mean any active employee of Eastern or a
Participating Subsidiary employed as a Chairman, a President, a
Vice President, a General Counsel, an Assistant Vice President, a
Treasurer, a Secretary, or a Controller. In addition to the
offices named in the preceding sentence, the Compensation
Committee may from time to time designate other offices of
Eastern or a Participating Subsidiary, the holders of which will
be Officers within the meaning of this Section 2(f).
(g) The words "Eligible Officer" will mean any Officer who satisfies the
eligibility requirements set forth in Section 4 of the Plan.
(h) The words "Executive Service" will mean the period of service which
an employee serves as an Officer, except that no service after age
sixty-five (65) will be counted as Executive Service.
(i) The words "Break in Service" will have the same meaning as in the
Retirement Plan.
(j) The words "Computation Period" will have the same meaning as in the
Retirement Plan.
(k) The words "Hour of Service" will have the same meaning as in the
Retirement Plan.
(l) The words "Social Security Benefit" will have the same meaning as in
the Retirement Plan.
(m) A "Change of Control" will be deemed to have occurred if, after
January 1, 1998, any of the following occurs:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended) or group
of "persons" (as so defined), 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) there is consummated a merger or consolidation ("merger")
involving Eastern and immediately after such merger the
beneficial owners immediately prior to such merger of the then
outstanding voting securities of Eastern do not continue to
own beneficially at least sixty percent (60%) of the voting
securities of the entity or entities resulting from such
merger; or
(iii) there is consummated a sale, lease, exchange, spin-off or
other transfer (any of the foregoing, a ("transfer") of all or
substantially all of the assets or business of Eastern and its
subsidiaries, other than any such transfer resulting in
beneficial ownership of not less than sixty percent (60%) of
the assets or business so transferred or not less than sixty
percent (60%) of the voting securities of the entity or
entities to which such assets were transferred by the owners
immediately prior to the transfer of the then outstanding
voting securities of Eastern; or
(iv) within any two-year period, individuals who at the
beginning of such period constituted the Board of Trustees
of Eastern cease for any reason to constitute a majority
thereof; provided, that any trustee who is not in office at
the beginning of such two-year period but whose election or
nomination for election was approved by a vote of at least
two-thirds of the trustees in office at the time of such
approval who were either trustees of Eastern at the
beginning of such period or who were elected to the Board
of Trustees pursuant to an election which was, or for which
the nomination for election was, previously so approved
shall be deemed to have been in office at the beginning of
such two-year period; or
(v) in the case of an Eligible Officer employed by a
Participating Subsidiary, Eastern sells or otherwise
disposes of all or substantially all of its voting
securities of the Participating Subsidiary or the
Participating Subsidiary sells or otherwise disposes of all
or substantially all of its assets, excluding in either
case any transaction resulting in beneficial ownership of
not less than fifty percent (50%) of the assets or business
so transferred or not less than fifty percent (50%) of the
voting securities of the entity or entities to which such
assets were transferred by the owners immediately prior to
the transfer of the then outstanding voting securities of
Eastern.
(n) The words "COC Agreement" mean an agreement between an Officer and
Eastern or one or more subsidiaries of Eastern providing for
severance pay or other benefits to the Officer in the event of a
Change of Control or similar change in the control of Eastern and
its subsidiaries or upon termination of the Officer's employment in
connection with or during a specified period that includes such
Change of Control or similar change.
(p) The words "Beginning Date" means, with respect to an Officer, the
earlier of (i) the date on which Eastern enters into a definitive
agreement the transactions contemplated by which will, when
consummated, constitute a Change of Control with respect to such
Officer, or (ii) the date which precedes the Change of Control by
six (6) months.
(q) The words "Protected Period" mean, with respect to any Officer, the
period beginning on the Beginning Date for such Officer and ending
on the date which follows the related Change of Control by
twenty-four (24) months.
Wherever used in the Plan, the masculine pronoun will include the
feminine.
3. Administration. The Plan will be administered by the Compensation
Committee of Eastern, which will have full power and authority to construe,
interpret and administer the Plan. Decisions of the Compensation Committee will
be final and binding on all persons. The Compensation Committee may, in its
discretion, adopt, amend and rescind rules and regulations, not inconsistent
with the Plan, relating to the administration thereof. In individual cases, the
Compensation Committee may also credit any Officer for either eligibility or
benefit-determination purposes, or both, with periods of service in addition to
those otherwise taken into account under the Plan, whether or not such Officer
has actually performed service for Eastern or its subsidiaries in such periods.
4. Eligibility. All Officers fifty-five (55) years of age or older who (i)
are serving in those positions of responsibility that most greatly influence
Eastern's performance (such positions to be designated from time to time by the
Compensation Committee with reference to this Section 4); (ii) have completed at
least twenty-four (24) consecutive months of service in one or more of the
positions so designated by the Compensation Committee; and (iii) are Members in
the Retirement Plan (as defined therein) will be covered by the Plan and will be
eligible to receive benefits hereunder, subject to the provisions of the Plan.
The Compensation Committee may extend eligibility under the Plan on an
individual basis to other employees of Eastern or of its subsidiaries; provided,
however, that no individual (other than a spouse or beneficiary of an Eligible
Officer) who is not a Member in the Retirement Plan will be eligible to receive
benefits under the Plan. An Officer who, at any time during his or her Protected
Period satisfies the requirements of (i), (ii) and (iii) of this Section 4 will
also be an Eligible Officer covered by the Plan, whether or not he or she has
attained age fifty-five (55), if the employment of such Officer with Eastern and
its subsidiaries terminates under circumstances which at the time or upon a
subsequent Change of Control entitle such Officer to a severance payment or
payments under a COC Agreement (but if the employment of such Officer so
terminates, he or she shall be deemed to have been an Eligible Officer from the
beginning of the Protected Period).
5. Amount of Benefit. Subject to the offset described in Section 7 below,
the actuarial adjustments described in Section 8 below and the off-sets
described in Section 9 below, the benefit provided under the Plan with respect
to any Eligible Officer will be determined as follows:
(a) Termination of Employment At or After Age 62/60.
(i) Except as otherwise provided in Section 5(a)(ii) below or
Section 5(c) below, every Eligible Officer whose employment
by Eastern and its subsidiaries terminates (other than by
death) upon or after his or her attaining age sixty-two
(62) will be eligible to receive an annual amount which is
the product of (i) his or her average annual Compensation
for those five (5) years, selected from among the last ten
(10) years of his or her Executive Service, in which his or
her aggregate Compensation was highest, and (ii) a
percentage determined according to the following table:
Years of Executive
Service Percentage
------------------ ----------
Less than 10 None
10 35
11 36.5
12 38
13 39.5
14 41
15 42.5
16 44
17 45.5
18 47
19 48.5
20 or more 50
For purposes of this Section 5(a)(i), a Computation Period in
which an Officer has one thousand (1,000) or more Hours of
Service as an Officer will be deemed to be a "year of
Executive Service," except that years of Executive Service
prior to any Break in Service will be disregarded to the
extent that Years of Vesting Service (within the meaning of
the Retirement Plan) prior to such Break in Service would be
disregarded for purposes of the Retirement Plan.
(ii) Subject to Section 5(c) below, every Eligible Officer whose
employment by Eastern and its subsidiaries terminates
(other than by death) upon or after his or her attaining
age sixty (60) and who first receives benefits under the
Plan on or after January 1, 1994 will be eligible to
receive an annual amount which is the product of (i) his or
her average annual Compensation for those five (5) calendar
years, selected from among the last ten (10) calendar years
of his or her Executive Service, in which his or her
aggregate Compensation was highest, and (ii) a percentage
determined according to the following table:
Non-Calendar Years of
Executive Service Percentage
--------------------- ----------
Less than 10 None
10 35
11 36.5
12 38
13 39.5
14 41
15 42.5
16 44
17 45.5
18 47
19 48.5
20 or more 50
For purposes of this Section 5(a)(ii), a Computation Period in
which an Officer has one thousand (1,000) or more Hours of
Service as an Officer will be deemed to be a "non-calendar
year of Executive Service," and a calendar year in which an
Officer has one thousand (1,000) or more Hours of Service as
an Officer will be deemed to be a "calendar year of Executive
Service", except that if any Years of Vesting Service (within
the meaning of the Retirement Plan) prior to any Break in
Service with respect to such Officer would be disregarded for
purposes of the Retirement Plan, an equivalent number of
non-calendar years of Executive Service and an equivalent
number of calendar years of Executive Service will be
disregarded hereunder.
(b) Termination of Employment Before Age 62/60.
(i) Except as otherwise provided in Section 5(b)(ii) below or
Section 5(c) below, every Eligible Officer whose employment
by Eastern and its subsidiaries terminates (other than by
death) upon or after his or her attaining age fifty-five
(55), but before his or her attaining age sixty-two (62),
will be eligible to receive an annual amount equal to the
amount calculated under Section 5(a)(i) above multiplied by
a percentage determined according to the following table:
Age at Commencement
of Benefit Percentage
------------------- ----------
61 95
60 90
59 85
58 80
57 75
56 70
55 65
(ii) Subject to Section 5(c) below, every Eligible Officer whose
employment by Eastern and its subsidiaries terminates
(other than by death) upon or after his or her attaining
age fifty-five (55), but before his or her attaining age
sixty (60), and who first receives benefits under the Plan
on or after January 1, 1994 will be eligible to receive an
annual amount equal to the amount calculated under Section
5(a)(ii) above multiplied by a percentage determined
according to the following table:
Age at Commencement
of Benefit Percentage
------------------- ----------
59 95
58 90
57 85
56 80
55 75
(c) Benefits Following a Change of Control. Every Eligible Officer
whose employment by Eastern and its subsidiaries terminates
(other than by death) under circumstances which at the time or
upon a subsequent Change of Control entitle him or her to a
severance payment or payments under a COC Agreement will be
eligible to receive an annual amount determined under this
paragraph (c). The annual amount determined under this paragraph
(c) is the product of
(i) The Eligible Officer's average annual Compensation for those
five (5) calendar years, selected from among the last ten (10)
calendar years of his or her Executive Service, in which his or her
aggregate Compensation was highest; provided, that the computation
of such Eligible Officer's average annual Compensation for purposes
of this paragraph (i) shall include the period by reference to which
the severance payment or payments under the COC Agreement are
determined (for example, three years in the case of a severance
payment equal to three years of compensation) and the amount of such
severance payment or payments, if the inclusion of such factors in
the computation would result in a higher amount of average annual
Compensation than would result from a determination under this
paragraph (i) without regard to such factors; and
(ii) a percentage determined according to the following table:
Non-Calendar
Years of Executive Service Percentage
-------------------------- ----------
Less than 10 None
10 35
11 36.5
12 38
13 39.5
14 41
15 42.5
16 44
17 45.5
18 47
19 48.5
20 or more 50
In determining "non-calendar years of Executive Service" for
purposes of this paragraph (c)(ii), the rules described in Section
5(a)(ii) shall apply except that an Eligible Officer described in
this subsection (c) shall be credited with a number of additional
non-calendar years of Executive Service equal to the number of years
with respect to which the severance payment or payments under his or
her COC Agreement are determined (for example, three years in the
case of a severance payment equal to three years of compensation);
and
(iii) in the case of an Eligible Officer whose age at commencement
of benefits is less than sixty (60), a percentage determined
according to the following table:
Age at Commencement
of Benefit Percentage
------------------- ----------
59 95
58 90
57 85
56 80
55 75
(d) Death Benefits. If an Eligible Officer dies while serving (or
deemed to be serving under Section 6 below) as an Eligible
Officer, or after termination of employment in accordance with
Section 5(e)(i), (ii), (iii) or (iv) but before commencement of
benefits, and leaves a surviving spouse, the spouse, if he or she
survives to the date benefits commence, will be eligible to
receive an annual amount equal to the amount, if any, the
Eligible Officer would have been entitled to receive under
(a),(b) or (c) above, whichever is applicable, had his or her
employment terminated in accordance with Section 5(e)(i), (ii),
(iii) or (iv) on the earlier of the day before the Eligible
Officer's death or the date of actual termination of employment.
(e) Conditions and Limitations. No officer whose employment terminates
before his or her attaining age sixty-five (65) will be eligible for
benefits under the Plan unless:
(i) the Compensation Committee has given the Officer its prior
written permission (any Officer who dies shall be deemed to
have retired with the prior written permission of the
Compensation Committee); or
(ii) the Officer has given written notification to the Compensation
Committee at least six months in advance of the termination;
or
(iii) the Officer is terminated by Eastern, or a subsidiary of
Eastern, and such termination is not determined by the
Compensation Committee to be a discharge for cause which casts
such discredit on the Officer or Eastern, or a division or
subsidiary of Eastern, as to justify forfeiture of any
benefits under this Plan; or
(iv) in the case of an Eligible Officer described at Section 5(c)
above, the Eligible Officer's employment terminates under
circumstances which at the time or upon a subsequent Change of
Control entitle him or her to a severance payment or payments
under a COC Agreement.
No benefit with respect to any Eligible Officer under the Plan will
exceed, after adjustment for the offset described in Section 7 below
but before actuarial adjustment under Section 8 below and before
adjustment for the offsets described in Section 9 below, an amount
equal to three (3) times the greater of (i) $90,000 or (ii) the
maximum benefit that could be paid with respect to such Eligible
Officer under section 415(b)(1)(A) of the Internal Revenue Code of
1986, as from time to time amended (the "Code"), as adjusted
pursuant to section 415(d) of the Code and as in effect on the date
of such Eligible Officer's termination of employment.
Except as otherwise provided herein, an Officer's employment will
terminate for purposes of the Plan as of the date on which such Officer (i)
retires, resigns or is dismissed from service as an Officer; (ii) dies while
serving as an Officer; or (iii) departs from the service of Eastern and its
subsidiaries for any reason; provided, that an Officer will not be deemed to
have terminated his or her employment solely by reason of a duly approved leave
of absence. For purposes of this Section 5 only, the age at which an Officer's
employment terminates or his or her benefits commence will be calculated in all
cases as of such Officer's nearest birthday.
Notwithstanding any other provision of this Plan, an Eligible Officer's
surviving spouse shall not be entitled to any benefits hereunder unless such
spouse was the person to whom the Eligible Officer was married at the time
benefit payments commenced under this Plan (or at the time of the Eligible
Officer's death, if earlier).
6. Disability. For purposes of satisfying the length-of-service
requirements set forth in Section 4 and Section 5 above, an Officer who is
unable to work because of a disability for which he or she is eligible to
receive benefits under a long-term disability program sponsored by Eastern or by
a Participating Subsidiary will be deemed to continue to serve as an Officer at
the same salary he or she was receiving when forced to stop working by reason of
his or her disability, until such time as he or she returns to active employment
or his or her employment terminates.
7. Offset for Social Security payments. The annual benefit calculated with
respect to any Eligible Officer under Section 5 above shall be reduced (but not
below zero), before the adjustments described in Section 8 and Section 9 below,
by a percentage of the Eligible Officer's Social Security Benefit for any year
in which such Eligible Officer is eligible to receive a Social Security benefit
(or, if the benefit hereunder becomes payable under Section 5(d) by reason of
the Eligible Officer's death, by a percentage of the Social Security Benefit to
which the Eligible Officer would have been entitled, but only for those years in
which such Eligible Officer, had he or she lived, would have been eligible for
Social Security benefits), as follows: for Officers first receiving benefits
under the Plan prior to January 1, 1994, such percentage shall be one hundred
percent (100%); for Officers first receiving benefits under the Plan on or after
January 1, 1994, such percentage shall be fifty percent (50%).
8. Actuarial adjustment. For purposes of determining the benefit provided
under this Plan with respect to any Eligible Officer, the amount calculated
under Section 5 above with respect to such Eligible Officer, after adjustment
for the offset described in Section 7 above, will be actuarially adjusted as
necessary to reflect payment in the form specified in Section 10, in the same
manner and using the same actuarial assumptions as would apply in determining
how an accrued benefit of like amount payable (with the same commencement date)
under the Retirement Plan would be actuarially adjusted (if at all) to reflect
payment under the Retirement Plan in such specified form.
9. Offset for other benefits. The annual benefit calculated with respect
to any Eligible Officer under Section 5(a), Section 5(b) or Section 5(c) above,
as adjusted for the offset described in Section 7 above and as further adjusted
actuarially under Section 8 above, will be reduced (but not below zero) by the
following amounts:
(a) the amount payable annually with respect to such Eligible Officer
(1) under the Retirement Plan, assuming commencement on the
commencement date hereunder and payment (i) if the Eligible
Officer is unmarried on such commencement date, in the form of a
single life annuity over the life of the Eligible Officer but
with sixty (60) monthly payments guaranteed, or (ii) in every
other case, in the form of a joint and survivor annuity under
which reduced payments will be made to the Eligible Officer for
his or her lifetime and, following his or her death, if his or
her spouse survives the Eligible Officer, payments equal to
one-half the amount payable to the Eligible Officer during his or
her lifetime will be paid to such surviving spouse for the
remainder of such spouse's lifetime, or (2) under any other
retirement plan to which Eastern or any of its subsidiaries or
affiliates has contributed (payments under any such other plan to
be determined, for purposes of this Section 9, as though payable
in the form described in (1)(i) or (1)(ii) above, whichever is
applicable); and
(b) with respect any Eligible Officer first receiving benefits under
the Plan prior to January 1, 1994, and with respect to any
Eligible Officer previously employed by Colonial Gas Company or
Transgas Inc. who became an Eligible Officer in connection with,
or following, the acquisition of Colonial Gas Company by Eastern
and its subsidiaries, the amount, if any, which the Compensation
Committee reasonably determines, in its sole discretion, to be
the amount of annual retirement income or the equivalent thereof
to which the Eligible Officer is entitled by reason of any prior
employment (including for this purpose any service as a fiduciary
or a director), assuming the same form of payment as the
applicable benefit form under (a) above.
If an Eligible Officer dies while employed (or deemed to be employed under
Section 6 above) as an Eligible Officer, or after termination of employment in
accordance with Section 5(e)(i), (ii), (iii) or (iv) but before commencement of
benefits, and leaves a surviving spouse, the death benefit payable to his or her
spouse each year under Section 5(d) above, as adjusted for the offset described
in Section 7 above and as further adjusted actuarially pursuant to Section 8
above, will be reduced (but not below zero) by the following amounts:
(aa) the death benefit provided the spouse each year under the
Retirement Plan, assuming commencement on the same commencement
date as hereunder, or under any other retirement plan to which
Eastern or any of its subsidiaries or affiliates has contributed
(payments under any such other plan to be determined, for
purposes of this Section 9, as though payable in the same form
and commencing at the same time as the death benefit hereunder);
and
(bb) with respect to the spouse of an Eligible Officer who dies prior
to January 1, 1994, the amount, if any, which the Compensation
Committee reasonably determines, in its sole discretion, to be
the annual income to which the spouse of such Eligible Officer is
entitled under any plan, agreement or arrangement maintained by a
prior employer of such Eligible Officer (or in connection with
any service of such Eligible Officer as a fiduciary or director),
assuming the same form of payment and benefit commencement date
as hereunder.
10. Form and Timing of Benefits for Eligible Officers. Benefits provided
to an Eligible Officer under the Plan upon the termination of his or her
employment will be payable (a) if the Eligible Officer is unmarried on the
commencement date of benefits hereunder, in the form of a single-life annuity
over the life of the Eligible Officer but with sixty (60) monthly payments
guaranteed, or (b) in every other case, in the form of a joint and survivor
annuity under which reduced payments will be made to the Eligible Officer for
his or her lifetime and, following his or her death, if his or her spouse
survives the Eligible Officer, payments equal to one-half the amount payable to
the Eligible Officer during his or her lifetime will be paid to such surviving
spouse for the remainder of such spouse's lifetime. Benefits payable to a
surviving spouse under Section 5(d) above will be payable in the form of a
single-life annuity over the life of such surviving spouse. Solely for purposes
of determining the amount payable to a surviving spouse under Section 5(d), the
benefit the deceased Eligible Officer would have been entitled to receive had
such Eligible Officer's employment terminated in accordance with Section
5(e)(i), (ii), (iii) or (iv) shall be assumed to have been payable in the form
of a joint and survivor annuity under which reduced payments are payable to the
Eligible Officer for his or her lifetime and, following his or her death,
reduced payments in the same amount are payable to the Eligible Officer's
surviving spouse for the remainder of such spouse's lifetime. Benefits provided
hereunder will commence as of the first day of the month next following the
Eligible Officer's termination of employment (or the Eligible Officer's death,
in the case of benefits described in Section 5(d)), irrespective of the form and
timing of benefit payments under the Retirement Plan provided, that in the case
of an Eligible Officer described in Section 5(c), benefits shall not commence
prior to the first day of the month next following the date the Eligible Officer
attains or would have attained age 55.
11. Requirement of Non-Competition. If at any time the Compensation
Committee determines that a person receiving benefits hereunder is competing,
directly or indirectly, with the business of Eastern, it may discontinue the
payment of such benefits to such person. For purposes of this paragraph, the
phrase "competing, directly or indirectly, with the business of Eastern" will be
deemed to include (without limiting the generality of the same) engaging or
being interested, directly or indirectly, as owner, director, officer, employee,
partner, through stock ownership (other than ownership of less than two (2%)
percent of the outstanding stock of any publicly owned company), investment of
capital, lending of money or property, rendering of services or otherwise,
either alone or in association with others, in the operation of any type of
business or enterprise in any way competitive with the business of Eastern or of
any of its subsidiaries. Notwithstanding the foregoing, the Compensation
Committee may waive or modify its right to discontinue payments to any person
by written agreement with such person. The provisions of this Section 11 shall
not apply in the case of an Eligible Officer receiving benefits pursuant to
Section 5(c).
12. Limitation of Rights; Special Provision in the Event of Change in
Control. Nothing in this Plan will be construed to create a trust or to obligate
Eastern or any other person to segregate a fund, purchase an insurance contract,
or in any other way currently to fund the future payment of any benefits
hereunder, nor will anything herein be construed to give any employee or any
other person rights to any specific assets of Eastern or of any other person.
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 of Trustees 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 present value as of that
date of all benefits then in pay status under the Plan (including benefits not
yet commenced but in respect of Eligible Officers whose employment has
terminated in accordance with Section 5(e)(i), (ii), (iii) or (iv)) plus (2) the
aggregate present value as of that date of all benefits that would be payable
under the Plan if all other persons who are (or, but for not yet having attained
age 55, would be) Eligible Officers were deemed to have terminated employment on
that date in accordance with Section 5(e)(i), (ii), (iii) or (iv) plus (3) the
aggregate present value as of that date of all benefits payable (as determined
under rules similar to the rules described in (1) and (2)) under all other
defined-benefit type plans and arrangements provided for through the trust, plus
(4) the aggregate of the account balances, determined as of such date, under all
individual-account type plans and arrangements provided for through the trust.
In applying clauses (1), (2) and (3) of the previous sentence, present value
shall be determined by using the interest and mortality assumptions used in
determining lump sum present values under the qualified defined benefit pension
plan maintained by Eastern, of 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.
13. Rights Non-Assignable. No employee or beneficiary or any other person
will have any right to assign or otherwise to alienate the right to receive
payments under the Plan, in whole or in part.
14. Termination; Amendment. Eastern reserves the right at any time by
action of its Board of Trustees to terminate the Plan or to amend its provisions
in any way, except that on and after the earlier of (a) the date on which
Eastern enters into a definitive agreement the transactions contemplated by
which will, when consummated, constitute a Change of Control, or (b) the date
which precedes the Change of Control by six (6) months, no such amendment or
termination shall reduce the amount of Eastern's obligations, if any, under
Section 12 with respect to such Change of Control or extend the period within
which Eastern may satisfy such obligations. In addition, the Plan will
automatically terminate if at any time (and as of the date that) the Retirement
Plan is terminated. Notwithstanding the foregoing, no termination or amendment
of the Plan (a "Plan Change") will reduce the benefit, if any, payable under the
Plan to any person with respect to an Eligible Officer whose employment with
Eastern and its subsidiaries was terminated prior to such Plan Change, nor shall
any Plan Change reduce the benefit, if any, to be paid with respect to a person
who is (or, but for not yet having attained age 55, would be) an Eligible
Officer on the date of such Plan Change below the amount, if any, which such
person would have been entitled to receive if his or her employment had
terminated in accordance with Section 5(e)(i), (ii), (iii) or (iv) on the day
before such Plan Change; provided, however, that benefits otherwise payable
hereunder with respect to an individual may be reduced or otherwise modified by
separate agreement between Eastern and such individual.
Section 15. Other. Reference is hereby made to the declaration of trust
establishing Eastern Enterprises (formerly Eastern Gas and Fuel Associates)
dated July 18, 1929, as amended, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts. The name "Eastern Enterprises"
refers to the trustees under said declaration as trustees and not personally;
and no trustee, shareholder, officer or agent of Eastern Enterprises shall be
held to any personal liability in connection with the affairs of said Eastern
Enterprises, but the trust estate only is liable.
IN WITNESS WHEREOF, Eastern has caused this amended and restated Plan to
be executed by its duly authorized officer as of the 22nd day of September,
1999.
EASTERN ENTERPRISES
By: /s/ J. Atwood Ives
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