Exhibit 10.14
May 22, 1998
Mr. Richard R. Clayton
Eastern Enterprises
9 Riverside Road
Weston, MA 02193
Dear Dick:
This letter will confirm the agreement between you and Eastern Enterprises
("Eastern") concerning your status with Eastern.
1. Effective August 31, 1998, you hereby retire as an employee of
Eastern and resign your position as president and chief operating
officer of Eastern and as a member of any of its committees and the
boards and committees of any of its affiliates and subsidiaries.
The Compensation Committee has approved your retirement as
contemplated by Eastern's supplemental executive retirement plan
("SERP").
2. You will continue to serve as a Trustee of Eastern until the 1999
Annual Meeting of Shareholders although you may resign at any time.
You shall receive no fees, retainers or other compensation for such
service on the board.
3. You will be entitled to receive a pro rata share (through August
31, 1998) of the 1998 incentive award which you would have been
entitled to receive, but for your retirement, under the Executive
Incentive Compensation Plan, as determined by the Compensation
Committee.
4. You will be entitled to receive a severance payment at the time of
your retirement in an amount to be determined by the Compensation
Committee in its discretion based on the value of your unvested
stock options (other than options issued in 1998).
5. Effective August 31, 1998, you hereby waive any and all rights
under your employment agreement with Eastern, dated October 25,
1991, and your salary continuation agreement with Eastern, dated
July 28, 1994.
6. Commencing August 31, 1998, you will be retained as a consultant to
Eastern, in which capacity you will render consulting services as
requested by the Chairman and CEO of Eastern. The term of your
engagement as a consultant hereunder shall be one year, ending
August 31, 1999 (the "consulting period"). During the consulting
period, you shall be available for 104 days of consulting work on a
schedule agreed upon with the Chairman and CEO of Eastern. For this
purpose, your time spent preparing for and attending meetings of
the Board of Trustees shall be credited against your consulting
commitment.
7. During the consulting period, Eastern shall pay you for your
consulting services at the annual rate of $208,000, ($17,333.33
payable monthly), plus reimbursement of reasonable expenses. You
will also be provided with a laptop computer for your consulting
work during the consulting period.
8. All payments under paragraph 7 above shall be separate from and in
addition to any benefits to which you may be entitled under
Eastern's pension program, including the SERP, or other benefits
available generally to retirees and former employees of Eastern.
If you agree to the terms set forth above, please sign both copies of this
letter in the space provided for below, and return one fully-executed copy to
me.
Reference is hereby made to the declaration of trust establishing Eastern
Enterprises 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 of trust 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.
Sincerely,
EASTERN ENTERPRISES
By: /s/ J. Atwood Ives
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The foregoing is hereby accepted, agreed and confirmed.
By: /s/ Richard R. Clayton
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Richard R. Clayton