EXHIBIT 10.22
EASTERN ENTERPRISES
1994 DEFERRED COMPENSATION PLAN
I. In General.
Eastern Enterprises (the "Company") has established the
deferred compensation plan hereinafter set forth (as the same may
from time to time be amended, the "Plan") in order to provide an
incentive for eligible key management employees by enabling them
to defer compensation until termination of employment. The Plan
provides for deferral of amounts that would otherwise have been
received currently by the eligible employee as well as for the
crediting of additional deferred amounts. The Plan is intended,
in part, to make up for deferrals that cannot be made under the
Company's tax-qualified Retirement Savings Plan by reason of the
limitations imposed under Section 401(a)(17), Section 401(k)(3),
Section 401(g) or Section 415 of the Internal Revenue Code, and
shall be construed consistent with that purpose, including
without limitation consistency with the anti-conditioning rules
of Section 401(k)(4) of the Internal Revenue Code and the
regulations thereunder.
II. Defined Terms.
The following terms shall have the meanings set forth below
whenever such terms are used in the Plan, unless a different
meaning is clearly indicated by the context:
(a) "Account": Either the Elective Account
established pursuant to Article IV of the Plan or the
Matching Account established pursuant to Article V of the
Plan, including any sub-accounts.
(b) "Administrator": The Compensation Committee of
the Board of Trustees of the Company, or its delegates.
(c) "Base Salary": A Participant's basic or regular
salary, excluding bonuses and other forms of extraordinary
compensation, determined before reduction for deferrals
under this Plan or any other employee benefit plan of the
Company or its subsidiaries.
(d) "Bonus": A cash bonus or the cash portion of any
other incentive award payable to a Participant, determined
before reduction for deferrals under the Plan or any other
employee benefit plan of the Company or its subsidiaries.
The term "Bonus" does not include amounts paid upon the
exercise or settlement of a stock option or stock
appreciation right.
(e) "Code": The Internal Revenue Code of 1986, as
amended.
(f) "Company": Eastern Enterprises, a Massachusetts
business trust with its principal place of business at
Weston, MA.
(g) "Compensation": In the case of any Participant,
the sum of his or her Base Salary and Bonuses, if any.
(h) "Eligible Employee": An employee of the Company
or any of its subsidiaries who is, or who belongs to a
classification of employees that is, from time to time
designated by the Administrator as eligible to participate
in the Plan. The Administrator shall select Eligible
Employees from among those employees of the Company and its
subsidiaries who are considered "management or highly
compensated employees" for purposes of Title I of ERISA.
(i) "ERISA": The Employee Retirement Income Security
Act of 1974, as amended.
(j) "Participant": An Eligible Employee who
participates in the Plan.
(k) "Plan": The Eastern Enterprises 1994 Deferred
Compensation Plan set forth herein, as the same may from
time to time be amended and in effect.
(l) "Plan Year": The 12-month period designated as
the plan year for purposes of the Savings Plan.
(m) "Savings Plan": The Company's Retirement Savings
Plan as from time to time amended and in effect.
III. Elective Deferrals.
(a) Each Participant may elect to have the cash portion of
his or her Compensation for a Plan Year reduced and an equivalent
amount credited to an Account hereunder. Each such election must
be made at the time or times specified in (b) below and in the
manner specified in (c) below, and shall be irrevocable once
made. Separate elections may be made with respect to Base Salary
and Bonuses. If only one election (with respect to total
Compensation) is made, deferrals will be taken proportionately
from Base Salary and Bonuses. The amount, if any, deferred with
respect to Base Salary or Bonuses (or with respect to total
Compensation if separate elections are not made) shall be the sum
of (i) a whole percentage from 0% to 20% of the Participant's
Base Salary, plus (ii) a whole percentage from 0% to 100% of the
Participant's Bonuses.
(b) Elections under this Article III shall be made prior to
the beginning of a Plan Year and shall be effective as to Base
Salary payable with respect to periods beginning in such Plan
Year and to Bonuses earned in such Plan Year. Notwithstanding
the foregoing: (i) an individual who becomes an Eligible
Employee during a Plan Year may, within 30 days of becoming
eligible, elect to defer Base Salary with respect to subsequent
pay periods in that year and, if the Administrator so permits,
Bonuses to be earned in that year, and (ii) for the 1994 Plan
Year, initial elections to defer may be made within 30 days after
the Plan is communicated to Eligible Employees, effective as to
Base Salary with respect to subsequent pay periods in 1994 and to
Bonuses to be earned in 1994. The Administrator may, but need
not, provide that deferral elections with respect to a Plan Year
shall carry over and be effective with respect to subsequent Plan
Years unless affirmatively and timely modified by the
Participant.
(c) Elections under Article III shall be in writing on a
form approved or prescribed by the Administrator and shall be
effective when received by the Administrator care of the Company
at the Company's principal place of business in Weston,
Massachusetts.
IV. Crediting of Elective Deferrals.
The Administrator shall credit to a Participant's Elective
Account the amount, if any, deferred by the Participant under
Article III. Amounts shall be credited to a Participant's
Elective Account as of the date they would have been paid in cash
to the Participant, absent the deferral.
V. Matching Credits.
Effective as of the last day of each pay period, the
Administrator shall credit to each Participant's Matching Account
an amount equal to the sum of (a) and (b) below, where:
(a) is an amount equal to the excess of (1) 25% of the
sum for such period of the Participant's deferrals of Base
Salary hereunder plus the Participant's elective deferrals
under the Savings Plan, over (2) matching contributions for
the benefit of the Participant with respect to such period
under the Savings Plan; provided, that the amount described
in (1) above shall in no event exceed 1.5% of the Participant's
Base Salary for such period; and
(b) is an amount equal to 25% of the Participant's
elective deferrals of any Bonus under paragraph (a)(ii) of
Article III above to the extent such elective deferrals do
not exceed 6% of the Bonus.
VI. Notional Earnings.
At least annually, the Administrator shall credit to each
Participant's Elective Account and Matching Account an additional
amount representing notional earnings with respect to the
balances of such Accounts. Except as may otherwise be determined
by the Administrator, notional earnings shall be based on an
interest rate equal to the prime rate of interest charged by The
First National Bank of Boston as of the first day of the calendar
year, plus one (1%) percentage point. In lieu of or in addition
to the notional earnings measure described in the preceding
sentence, the Administrator may from time to time specify other
measure or measures by which notional earnings hereunder shall be
determined and may change or eliminate any measure at any time.
The Administrator may, but need not, permit Participants to
choose the measure or measures (from among those specified as
hereinabove provided) that will form the basis for crediting
notional earnings to their Accounts under this Article VI.
Notional earnings shall continue to be credited with respect to a
Participant's Accounts until such Accounts have been fully
distributed.
VII. Vesting; Rights Unsecured.
A Participant's Accounts shall be fully vested and
nonforfeitable at all times. Nevertheless, each Participant's
rights against the Company and its subsidiaries for benefits, if
any, under the Plan shall be solely those of an unsecured general
creditor. Nothing herein shall be construed as giving any
Participant rights to or in any specific assets of the Company or
its subsidiaries, nor shall anything herein be deemed to require
the Company or any of its subsidiaries to set aside assets or
create a trust or other fiduciary relationship for the purpose of
funding benefits hereunder. Notwithstanding the foregoing, the
Administrator may (but need not) establish a so-called "rabbi
trust", whether or not conforming to the requirement of Revenue
Procedure 92-64 but in any event intended to be a "grantor trust"
for purposes of the Code and an unfunded arrangement under ERISA,
to assist in providing for payment of benefits hereunder.
VIII. Distribution of Accounts.
(a) Except as provided below, each Participant's Accounts
shall be distributed in a single lump sum cash payment as soon as
practicable following the Participant's termination of employment
with the Company and its subsidiaries. For purposes of the
preceding sentence, a Participant employed by a direct or
indirect subsidiary of the Company shall be treated as having
terminated employment if such subsidiary is (or substantially all
its assets are) acquired by another person or persons and the
Participant continues to work for the acquiring entity, unless
such acquiring entity expressly assumes the obligation to make
the deferred payments to which the Participant is entitled
hereunder upon termination of the Participant's employment with
such acquiring entity.
(b) Distribution under (a) above shall be made to the
Participant if living. If the Participant's termination of
employment occurs by reason of death, distribution shall be made
to the Participant's beneficiary or beneficiaries designated in
writing for purposes of the Plan on a form prescribed or approved
by the Administrator, or in the absence of such a designation to
the Participant's estate. If the Participant's termination of
employment occurs other than by reason of death but the
Participant dies prior to actual payment, distribution shall be
made to the Participant's beneficiary or beneficiaries (or to the
Participant's estate) as provided in the foregoing sentence.
(c) The Administrator may prescribe rules under which total
and permanent disability of the Participant, as determined by the
Administrator, shall be treated as a termination of employment
for purposes of the Plan even if the Participant would not be
treated as having terminated employment for other purposes.
(d) If a Participant so elects with respect to elective
deferrals and/or matching credits for a Plan Year, that portion
of the Participant's Accounts attributable to such deferrals and
credits and the notional earnings with respect thereto shall be
distributed in annual cash installments rather than in a single
cash lump sum. The election to receive distribution in
installments rather than in a single lump sum shall be made as
part of the Participant's deferral election under Article III.
The Administrator may specify the number or maximum number of
years over which installments will be paid. The amount of each
installment shall be determined by dividing that portion of the
Participant's Accounts payable in such installments by the number
of remaining installments. Where an Account is payable in
installments, notional earnings shall continue to be credited to
the balance of the Account until the Account is distributed in
full. If a Participant who has elected installment distributions
dies prior to the commencement or completion of the
distributions, remaining payments shall be made to the
Participant's beneficiary or beneficiaries (or to the
Participant's estate) as provided under (b) above in accordance
with the schedule of installment distributions elected by the
Participant, except that the Administrator at any time following
the Participant's death may commute the remaining installment
distributions to a single cash lump sum payment.
(e) Notwithstanding the preceding provisions of this
Article VIII, the Administrator may distribute any Account at any
time in full, in satisfaction of all remaining liabilities under
the Plan to the affected Participant, if the Administrator in its
discretion determines that exclusion of the Participant from the
Plan is necessary to preserve the Plan's status as a plan
maintained primarily for the benefit of "management or highly
compensated employees" (as those words are used in Title I of
ERISA). In addition, the Administrator in its discretion may
make distributions under the Plan, including lump sum
distributions representing the entirety of a Participant's
Accounts, upon termination of the Plan even if the Participant is
then still employed or had elected an installment distribution.
IX. Hardship Distributions.
A Participant may apply for a distribution prior to
termination of employment if he or she has suffered an
unanticipated emergency caused by an event beyond the
Participant's control and likely to result in severe financial
hardship. The Administrator shall determine if such an emergency
exists and its determination shall be final and binding on all
persons. If the Administrator determines that such an emergency
exists it shall distribute to the Participant such portion of his
or her Accounts as the Administrator deems necessary to meet the
financial emergency.
X. Administration.
(a) The Plan shall be administered by the Administrator,
which shall have full discretionary authority to interpret the
Plan, determine eligibility for participation and benefits,
prescribe rules, prescribe forms of election and other forms, and
generally do all things necessary to carry out the terms of the
Plan. Determinations by the Administrator shall be binding on
all persons.
(b) The Administrator shall prescribe such procedures as it
deems appropriate for claiming benefits under the Plan. If any
Participant or beneficiary claims benefits hereunder and the
Administrator determines that the claim should be denied, the
Administrator will provide to the claimant written notice of the
denial, setting forth such information as is required under
Section 503 of ERISA. If the claimant within 60 days of receipt
of such notice requests in writing that the decision be reviewed,
the Administrator shall afford the claimant (and his or her
representative) an opportunity for review and within 60 days of
receiving the request for review shall render a written decision,
including specific reasons for the decision. The Administrator
may extend the time for making a decision to the extent
consistent with Section 503 of ERISA. Any failure by the
Administrator to provide written notice of its decision within
the 90-day or 60-day periods hereinabove described (or within
such extensions of those periods as may apply in the particular
case) shall be deemed a denial by the Administrator.
XI. Amendment and Termination.
The Board of Trustees of the Company may terminate the Plan
at any time. Following Plan termination no further deferrals or
other amounts shall be credited to Participant Accounts, except
for notional earnings which shall continue to be credited until
the Accounts have been distributed.
The Board of Trustees of the Company may amend the Plan at
any time and in any manner, including with respect to amounts
already credited to Participant Accounts; provided, that no such
amendment shall reduce the dollar amount credited to a
Participant's Accounts as of the effective date of the amendment.
XII. Miscellaneous.
(a) Nothing in the Plan shall be construed as giving any
Eligible Employee or other person the right to continued
employment with the Company and its subsidiaries.
(b) Rights to benefits under the Plan are nonassignable and
shall not be subject to pledge, encumbrance, attachment,
garnishment or alienation of any kind whatsoever. However, each
Participant may designate a beneficiary or beneficiaries to
receive any benefits payable hereunder upon the Participant's
death.
(c) All distributions under the Plan shall be subject to
reduction for applicable tax withholding.
(d) The Plan shall be construed in accordance with the laws
of the Commonwealth of Massachusetts except to the extent such
laws are preempted by ERISA.
(e) Reference is hereby made to the trust establishing
Eastern Enterprises (formerly Eastern Gas and Fuel Associates)
dated July 29, 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 of trust as trustees and not personally, and no
trustee, shareholder, officer or agent of Eastern shall be held
to any personal liability in connection with the affairs of said
Eastern Enterprises, but the trust estate only is liable.
Approved by the Board of Trustees: January 27, 1994