-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EWWsPoY3ZiX7M6GZrDz6z423AWCYi+RF/bzk72YC52hgvazOhiQkMUU02Zeqq+gY BbVFl92/5/FSKd8P7016+Q== 0000950135-96-001479.txt : 19960326 0000950135-96-001479.hdr.sgml : 19960326 ACCESSION NUMBER: 0000950135-96-001479 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19960325 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FALL RIVER GAS CO CENTRAL INDEX KEY: 0000034371 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 041298780 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00449 FILM NUMBER: 96538054 BUSINESS ADDRESS: STREET 1: 155 N MAIN ST STREET 2: P O BOX 911 CITY: FALL RIVER STATE: MA ZIP: 02722-0911 BUSINESS PHONE: 5086757811 MAIL ADDRESS: STREET 2: 155 NO MAIN ST CITY: FALL RIVER STATE: MA ZIP: 02720 10-K/A 1 FALL RIVER GAS COMPANY 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended September 30, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) Commission File Number 0-449 FALL RIVER GAS COMPANY ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Massachusetts 04-1298780 ------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 155 North Main Street, Fall River, Massachusetts 02720 ------------------------------------------------ ----- (Address or principal executive offices) (Zip Code) Registrant's telephone number, including area code (508-675-7811 Securities registered pursuant to Section 12 (b) of the Act: Name of each exchange on Title of each class which registered ------------------- ---------------- NONE NONE ---- ---- Securities registered pursuant to Section 12 (g) of the Act: Common Stock par value $.83 1/3 per share ----------------------------------------- (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes/X/ No/ /. Indicate by check mark if disclosures of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by references in Part III of this Form 10-K or any amendment to this Form 10-K. The aggregate market value of the voting stock held by non-affiliates of the Registrant (1,500,701) shares was $32,265,072 as of December 15, 1995 of $21.50. Indicate the number of shares outstanding of each of the Registrant's classes of the latest practicable date. Class Outstanding at December 15, 1995 ----- -------------------------------- Common Stock, $.83 1/3 par value 1,780,542 Documents incorporated by reference: Definitive Proxy Statement dated December 21, 1995 (Part III) -1- 2 implementation of Order 636 has increased the potential for competition in gas procurement, supply and sales. FERC's actions have sought to encourage competition and natural gas market efficiency through deregulation and "unbundling" of services at the interstate pipeline level. This unbundling has changed the historical relationships of the natural gas industry, whereby producers sold to pipelines, pipelines sold to local distribution companies ("LDCs"), such as the Registrant, and LDCs sold to end-users. Now, LDCs or end-users may utilize pipeline services for purchases, or simply for the transportation of gas purchased from third parties. Consequently, while the Registrant has been subject to competition from electricity, oil, propane, coal and other fuels, the regulatory changes brought about by Order 636 have created the potential for competition among existing and new suppliers or brokers of natural gas. As a result, opportunities may arise for others to sell natural gas or provide brokerage service to end-users to whom the Registrant might otherwise make sales or otherwise arrange for transport service. Large volume end-users are most likely to be the primary targets for third parties seeking to make such sales. If third parties do, in fact, provide a substantial volume of sales or brokerage services to end-users located within the Registrant's service territory, and the Registrant does not increase its sales to other end-users, then the Registrant would have a smaller sales base across which it can -9- 3 subject to the jurisdiction of FERC. Although the Registrant is not under the direct jurisdiction of FERC, the Registrant monitors, and periodically participates in, proceedings before FERC that affect the Registrant's pipeline gas suppliers or transporters, the Registrant's operations and other matters pertinent to the Registrant's business. The Registrant is also subject to standards prescribed by the Secretary of Transportation under the Natural Gas Pipeline Safety Act of 1968 with respect to the design, installation, testing, construction and maintenance of pipeline facilities. The enforcement of these standards has been delegated to the MDPU, which has taken an active role in such enforcement, including the application of civil penalties and the requirement of remedial programs. Seasonal Nature of Business --------------------------- The Registrant's business has a distinct seasonal quality to it, resulting from such a large percentage of its sendout going to serve residential and commercial heating loads. Operating revenues from the sale of natural gas reflect the seasonal nature of the business to the extent that such revenues are affected by temperature variations between the heating and non-heating seasons. See "Rates and Regulation" above. Environmental Matters --------------------- In January 1990 the Registrant notification from the Massachusetts Department of Environmental Protection ("DEP") that -13- 4 Selected Financial Data - -----------------------
Twelve Months September 30, Nine Months Twelve Months ---------------------------- ------------ ------------- 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- Net Operating Revenues........ $44,418,114 $48,330,933 $44,818,763 $36,047,493 $41,704,063 Operating Expenses, Other than Income Taxes............ 41,641,929 44,564,940 40,932,252 33,082,762 39,923,856 Interest Expense.............. 1,460,927 1,101,280 1,242,756 948,168 1,361,212 Net Income................... 1,616,206 2,491,10 2,352,360 1,819,882 986,845 Earnings per Common Share (Note 2)... $ .91 $ 1.40 $ 1.32 $ 1.02 $ .55 Cash Dividend per Common Share (Note 2)... $ .96 $ .98 $ .97 $ .92 $ .92 Total Assets................... $50,956,507 $49,625,842 $46,501,414 $38,263,167 $45,498,157 Long-term Debt (excluding current maturities) $ 6,500,000 $ 7,380,000 $ 7,560,000 $ 7,680,000 $ 7,740,000 NOTE: The Company changed its year end from December 31 to September 30 effective September 30, 1992. The amounts shown in 1992 are as of September 30, 1992 and the nine months ended September 30, 1992.
-20- 5 ITEM 7. Management's Discussion And Analysis Of Financial Condition And Results Of Operations ----------------------------------- OVERVIEW The Company's sales are largely influenced by changes in temperature as the majority of its customers use natural gas for heating purposes. The Company measures weather through the use of effective degree days. An effective degree day is calculated by subtracting the average temperature for the day, adjusted for wind and cloud cover, from 65 degrees Fahrenheit.
1995 1994 1993 ---- ---- ---- Degree days............. 5,674 6,187 6,149 Percent colder (warmer) (8.3%) 0.6% from prior year 20 year average......... 5,985
Earnings per common share for fiscal 1995 was $0.91 compared with $1.40 per common share in fiscal 1994 and $1.32 per common share in fiscal 1993. Fiscal 1995 net income was $1,616,200, compared to $2,491,100 and $2,352,400 in fiscal years 1994 and 1993, respectively. RESULTS OF OPERATION Fiscal 1995 versus Fiscal 1994 In fiscal 1995 operating revenues totalled $44,418,100, an 8.1 percent decrease from fiscal 1994. Revenues from sales to firm customers decreased 8.5 percent from the prior fiscal year as a result of a $3,962,200 reduction in the gas costs recovered through the Company's Cost of Adjustment Clause (CGAC) and decreased gas sales. All changes in the price of fuel to serve our firm customer requirements are recovered through the CGAC. Gas sales to firm and special contract customers were 6,004,900 Mcf in fiscal 1995, a decrease of 8.5 percent from the prior year. The major factor causing this decrease was warmer weather. As can be seen from the table above, effective degree days were 8.3 percent warmer than the prior fiscal year. During fiscal 1995 interruptible sales increased by 34 percent over the prior year. The profits from these sales are flowed back to our firm customers through the CGAC. Cost of gas sold includes costs for gas operation including supplemental fuels, such as propane, liquefied natural gas and storage, which are used to augment the Company's primary supply of natural gas in periods of peak usage. The average cost of gas during fiscal 1995 was $4.17 per Mcf compared to $4.86 during the -21- 6 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Fall River Gas Company: We have audited the accompanying consolidated balance sheets of FALL RIVER GAS COMPANY (a Massachusetts corporation) and subsidiary as of September 30, 1995 and 1994 and the related consolidated statements of income, retained earnings and cash flows for each of the three years in the period ended September 30, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Fall River Gas Company and subsidiary as of September 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1995, in conformity with generally accepted accounting principles. As explained in Notes 4 and 7 to these consolidated financial statements, effective October 1, 1993. the Company changed its method of accounting for income taxes and postretirement benefits other than pensions. ARTHUR ANDERSEN LLP Boston, Massachusetts November 20, 1995 -24- 7 Consolidated Balance Sheets (Con't) - ----------------------------------- Fall River Gas Company and Subsidiary September 30, 1995 and 1994 STOCKHOLDERS' INVESTMENT AND LIABILITIES
1995 1994 ---- ---- CAPITALIZATION: Stockholders' investment- Common stock, par value $.83-1/3 per share, 2,201,334 shares authorized and issued (Note 2) $ 1,834,445 $ 1,834,445 Premium paid in on common stock.................. 1,356,043 1,356,043 Retained earnings (Note 5)....................... 11,149,260 11,242,374 ----------- ----------- 14,339,748 14,432,862 Less-420,792 shares in 1995 and 1994 of common stock held in treasury, at cost (Note 2)......... 1,418,743 1,418,743 ----------- ----------- 12,921,005 13,014,119 Long-term debt, less current sinking fund requirements (Note 5) 6,500,000 7,380,000 ------------ ----------- Total capitalization........................... 19,421,005 20,394,119 ----------- ----------- CURRENT LIABILITIES: Current sinking fund requirements (Note 5).......... 880,000 160,000 Notes payable to banks (Note 5)..................... 15,600,000 14,400,000 Dividends payable................................... 427,330 427,330 Accounts payable.................................... 3,585,300 3,273,833 Gas supplier refunds due customers.................. 1,367,969 1,130,603 Accrued taxes....................................... 838,617 1,499,233 Other............................................... 1,993,043 1,871,328 ----------- ----------- 24,692,259 22,762,327 ----------- ----------- COMMITMENTS AND CONTINGENCIES (Note 8) DEFERRED CREDITS: Accumulated deferred income taxes (Note 4).......... 3,905,117 3,630,933 Unamortized investment tax credits (Note 4)......... 605,653 643,702 Other............................................... 1,832,385 1,694,673 Regulatory liability (Note 4)....................... 500,088 500,088 ----------- ----------- 6,843,243 6,469,396 ----------- ----------- $50,956,507 $49,625,842 =========== ===========
The accompanying notes are an integral part of these financial statements. -27- 8 Consolidated Statements of Cash Flows - ------------------------------------- FALL RIVER GAS COMPANY AND SUBSIDIARY FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
1995 1994 1993 ---- ---- ---- Cash Provided by (Used for) Operating Activities: Net Income............................................ $ 1,616,206 $ 2,491,100 $ 2,352,360 Items not requiring (providing) cash: Depreciation................................. 1,695,854 1,587,278 1,513,745 Deferred income taxes........................ 274,184 (734,131) 172,203 Investment tax credits, net.................. (38,049) (38,44 ) (41,028) Change in working capital.................... 2,180,393 2,961,892 (5,987,492) Other sources, net........................... (221,380) 515,933 81,364 ----------- ----------- ----------- Net cash provided by (used for) operating activities 5,507,208 6,783,627 (1,908,848) ----------- ----------- ----------- Investing Activities: Additions to utility property, plant and equipment. (4,294,225) (3,711,116) (2,687,235) Additions to nonutility property....................... (589,172) (591,939) (474,631) ----------- ----------- ----------- Net cash used for investing activities (4,883,397) (4,303,055) (3,161,866) ----------- ----------- ----------- Financing Activities: Cash dividends paid on common stock.................... (1,709,320) (1,736,028) (1,709,321) Retirement of long-term debt through sinking fund...... (160,000) (140,000) (120,000) Increase (decrease) in notes payable to banks, net 1,200,000 (600,000) 7,050,000 ----------- ----------- ----------- Net cash provided by (used for) financing activities (669,320) (2,476,028) 5,220,679 Increase (decrease) in cash............................... (45,509) 4,544 149,965 Cash, beginning of period................................. 360,818 356,274 206,309 ----------- ----------- ----------- Cash, end of period....................................... $ 315,309 $ 360,818 $ 356,274 =========== =========== =========== Changes in Components of Working Capital (excluding cash): (Increase) decrease in current assets: Accounts receivable........................... $ 492,836 $ (612,385) $ 15,583 Inventories................................... (37,438) 800,611 (1,763,764) Prepayments and other......................... (72,874) (36,207) (51,459) Deferred gas cost............................. 1,787,937 (5,633) (5,172,312) Increase (decrease) in current liabilities: Accounts payable.............................. 311,467 1,168,353 608,977 Gas supplier refunds due customers............ 237,366 (390,890) 662,894 Accrued taxes................................. (660,616) 1,499,233 (494,342) Other......................................... 121,715 538,810 206,931 ----------- ----------- ----------- Change in Working Capital......... $ 2,180,393 $ 2,961,892 $(5,987,492) =========== =========== =========== Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest....................................... $ 1,695,329 $ 1,632,681 $ 1,248,569 Income taxes................................... 768,052 1,503,114 1,535,000
The accompanying notes are an integral part of these financial statements. -28- 9 The Company maintains lines of credit with various banks under which it may borrow up to $27,500,000. These lines are reviewed periodically by the various banks and may be renewed or cancelled. The Company pays a commitment fee on the lines of credit totaling $23,000,000 at rates ranging from 5/16 of 1% to 3/8 of 1%. The balance of the lines are uncommitted and carry no fee. At September 30, 1995, there were $15,600,000 borrowings under these lines of credit. The following table summarizes certain information related to the Company's short-term borrowings for the years ended September 30, 1995, and 1994:
1995 1994 ---------- ---------- Average daily balance outstanding for the period $14,586,000 $13,051,944 Weighted average interest rate for the period 6.4% 4.3% Maximum amount outstanding during the period based on month-end balance $17,900,000 $16,100,000 Weighted average interest rate at end of period 7.5% 5.8%
6) EMPLOYEES' PENSION PLANS Fall River Gas Company has defined benefit plans covering substantially all of its employees. The benefits under these plans are based on years of service and employees' compensation levels. The Company's policy is to fund pension costs accrued including amortization of past service costs. The following table sets forth the funding status of the pension plan as of September 30, 1995 and 1994:
1995 1994 ------------------------- --------------------------- Actuarial present value of benefit obligations: Union Salaried Union Salaried Vested............................................. $(5,119,504) $(4,449,398) $(5,358,714) (4,305,570) Non vested......................................... (9,224) (70,461) (6,565) (56,655) ----------- ----------- ----------- ----------- Total accumulated benefit obligation............... $(5,128,728) $(4,519,859) $(5,365,279) $(4,362,225) =========== =========== =========== =========== Projected benefit obligation....................... $(5,508,398) $(5,822,854) $(5,842,435) $(5,841,694) Plan assets at fair value............................. 6,037,834 4,293,447 5,688,667 3,348,548 ----------- ----------- ----------- ----------- Projected benefit obligation (in excess) or less than plan assets........................... 529,436 (1,529,407) (153,768) (2,493,146) Unrecognized net gain................................. (1,046,210) (804,592) (429,134) (10,877) Unrecognized prior service cost due to plan amendment.............................. 0 1,417,484 0 1,535,608 Unrecognized net obligation........................... 524,328 197,540 599,232 225,759 ----------- ----------- ----------- ----------- Prepaid pension cost (pension liability) recognized on the consolidated balance sheet....................................... $ 7,554 $ (718,975) $ 16,330 $ (742,656) =========== =========== =========== ===========
Net Pension cost included the following components:
1995 1994 1993 ---------- ---------- --------- Service Cost $ 375,838 $ 408,466 $ 315,580 Interest Cost 866,021 837,690 790,509 Return on Assets (1,287,810) (56,166) (474,692) Net Deferral and Amortization 757,372 (463,664) (59,079) ----------- --------- --------- Net Periodic Pension Cost $ 711,421 $ 726,326 $ 572,318 =========== ========= =========
Assumptions used to determine the projected benefit obligation were:
1995 1994 ---- ---- Discount rate 8.0% 7.5% Rate of increase in future compensation levels 4.0% 4.0% Expected long-term rate of return on assets 8.0% 7.6%
-32- 10 ITEM 9. Disagreements On Accounting And Financial Disclosures None. PART III ITEM 10. Directors and Executive Officers Of Registrant Information required under this item regarding directors and compliance with Section 16(A) of the Exchange Act is contained in the Registrant's 1995 Proxy Statement, to be filed with the commission pursuant to Regulation 14A, and is incorporated herein by reference, pursuant to Form 10-K General Instruction G(3). Executive Officers: Raymond H. Faxon* ----------------- Age 88, currently Vice Chairman of the Board of Directors and assistant Treasurer of the Registrant. His current business function is Vice Chairman of the Board of Directors and Assistant Treasurer. He is the father of Bradford J. Faxon. Positions held for the past five years are as follows: 1/1/88 - 12/31/93 -- Chairman of the Board of Directors and Assistant Treasurer 1/1/94 - to Present -- Vice Chairman of the Board of Directors and Assistant Treasurer. His principal occupation for the past five years has been employment with the Registrant. Bradford J. Faxon* ------------------ Age 57, currently Chairman of the Board of Directors, President and a Director of the Registrant. His current business function is Chief Executive Officer. Positions held with the Registrant for the past five years are as follows: 12/1/78 to Present -- Director 8/1/86 to Present -- President 1/1/94 to Present -- Chairman of the Board of Directors He is the son of Raymond H. Faxon. His principal occupation for the past five years has been employment with the Registrant. Peter H. Thanas --------------- Age 51, currently Senior Vice President and Treasurer of the Registrant His current business function is Chief Financial and Accounting Officer of the Registrant. Positions held for the past five years are as follows: 8/1/86 to 9/19/94 -- Financial Vice President and Treasurer 9/20/94 to Present -- Senior Vice President and Treasurer His principal occupation for the past five years has been employment with the Registrant. John F. Fanning --------------- Age 49, currently Vice President of Production and Gas Supply. His current business function is Vice President of Production and Gas Supply of the Registrant. Positions held with the Registrant for the past five years are as follows: 7/1/87 - 12/31/89 -- Manager of Gas Supply 1/1/90 - 9/20/93 -- Superintendent of Production and Gas Supply 9/21/93 to Present-- Vice President of Production and Gas Supply His principal occupation for the past five years has been employment with the Registrant. -34- 11 Wallace E. Fletcher ------------------- Age 62, currently Comptroller and Assistant Treasurer. His current business function is Comptroller and Assistant Treasurer of the Registrant. Positions held with the Registrant for the past five years are as follows: 5/27/92 to Present--Comptroller and Assistant Treasurer His principal occupation for the past five years has been three years with the Registrant and two years as a self employed consultant. All officers are either elected or appointed at the Directors' Meeting following the annual Stockholders' meeting. Their terms of office are to be for one year or until their successors have been duly elected or appointed. *Members of the Executive Committee. ITEM 11. Management Remuneration And Transactions - -------------------------------------------------- Information required under this item is contained in the Registrant's 1995 Proxy Statement, filed with the commission pursuant to Regulation 14A, and is incorporated herein by reference, pursuant to Form 10-K General Instruction G(3). ITEM 12. Security Ownership Of Certain Beneficial Owners And Management - ------------------------------------------------------------------------ Information required under this item is contained in the Registrant's 1995 Proxy Statement, filed with the commission pursuant to Regulation 14A, and is incorporated herein by reference, pursuant to Form 10-K General Instruction G(3). ITEM 13. Certain Relationships And Related Transactions - -------------------------------------------------------- Not applicable. -35- 12
Page Number Exhibit Incorporation Or Numbers Description Reference To - ------- ----------- ----------------- (10n) A copy of Precedent Agreement for Exhibit 10n to Report Firm Sales Service under Rate on Form 10-K for Schedule F-4 calendar year ended December 31, 1987 (10o) Settlement Agreement between DOMAC Exhibit 10o to Report and Registrant to terminate and on Form 10-K for abandon GS-1 and TS-1 Service calendar year ended Agreements December 31, 1988 (10p) A copy of Service Agreement for Exhibit 10p to Report Firm Liquid Service between on Form 10-K for Distrigas and Registrant calendar year ended December 31, 1988 (10q) A copy of Service Agreement for Exhibit 10q to Report Interruptible Vapor Service between on Form 10-K for Distrigas and Registrant calendar year ended December 31, 1988 (10r) A copy of Service Agreement for Exhibit 10r to Report Firm Vapor Service between on Form 10-K for Distrigas and Registrant calendar year ended December 31, 1988 (10s) A copy of a Deferred Compensation Exhibit 10s to Report Agreement with Bradford J. Faxon on Form 10-K for calendar year ended December 31, 1989 (10t) A copy of a Deferred Compensation Exhibit 10t to Report Agreement with Peter H. Thanas on Form 10-K for calendar year ended December 31, 1989 (10u) A copy of the Contract between the Exhibit 10u to Report Registrant and Utility Workers on Form 10-K for Union of America, AFL-CIO and calendar year ended Local 431, dated May 1, 1990 December 31, 1990 (10v) A copy of an Employment Contract Exhibit 10v to Report with Bradford J. Faxon on Form 10-K for calendar year ended December 31, 1991 (10w) A copy of an Employment Contract Exhibit 10w to Report with Peter H. Thanas on Form 10-K for calendar year ended December 31, 1991 (10x) A copy of the Contract between the Exhibit 10x to Report Registrant and Utility Workers on Form 10-K for Union of America, AFL-CIO and calendar year ended Local 431, dated May 1, 1995 September 30, 1995 (10y) A copy of Gas Sales Agreement Exhibit 10y to Report between CNG Gas Service Corporation on Form 10-K for fiscal and Fall River Gas Company year ended Spetember 30, 1995
-40- 13
Page Number Or Exhibit Incorporation Or Numbers Description Reference To - ------- ----------- ---------------- (22) The Registrant has one Subsidiary, Fall River Gas Appliance Company, Inc., that is incorporated in Massachusetts, and does business under said name
-41- 14 FALL RIVER GAS COMPANY AND SUBSIDIARY ------------------------------------- INDEX TO FINANCIAL STATEMENTS ----------------------------- (Submitted in Answer to Item 14 of Form 10-K, Securities and Exchange Commission)
Reference --------- Report of independent public accountants Page 24 Fall River Gas Company and Subsidiary- Consolidated balance sheets - As of September 30, 1995 and September 30, 1994 Page 26 Consolidated statements for the years ended September 30, 1995, 1994, and 1993 Income Page 25 Retained earnings Page 25 Cash flows Page 28 Notes to consolidated financial statements Page 29
SCHEDULES --------- II - Valuation and Qualifying Accounts and Reserves for the years ended September 30, 1995, 1994, and 1993 Attached Report to independent public accountants on schedules Attached
Schedules, other than the one listed to above, are either not required or not applicable or the required information is shown in the financial statements or notes thereto. -42- 15 ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Fall River Gas Company: We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in Fall River Gas Company's Annual Report to Stockholders, included in this Form 10-K, and have issued our report thereon dated November 20, 1995. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the accompanying index is the responsibility of the Company's management and is presented for purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the financial data equipped to be set forth therein in relation to the basic financial statements taken as a whole. /S/Arthur Andersen LLP Boston, Massachusetts November 20, 1995 -43- 16 FALL RIVER GAS COMPANY AND SUBSIDIARY SCHEDULE VII -------------------------------------------------- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES ---------------------------------------------- FOR YEAR ENDED SEPTEMBER 30, 1995 ---------------------------------
ADDITIONS DEDUCTIONS -------------------- ---------------------- Balance at Charges to Charges Charges for Balance at Beginning Costs and to Other Which Reserves End of Description of Period Expenses Accounts Were Created Other Period ----------- ---------- ---------- -------- -------------- ----- ---------- Allowance for doubtful accounts $701,734 $311,500 $368,249 ($41,665) $686,650 -------- -------- -------- -------- -------- --------
FOR YEAR ENDED SEPTEMBER 30, 1994 ---------------------------------
ADDITIONS DEDUCTIONS -------------------- ---------------------- Balance at Charges to Charges Charges for Balance at Beginning Costs and to Other Which Reserves End of Description of Period Expenses Accounts Were Created Other Period ----------- ---------- ---------- -------- -------------- ----- ---------- Allowance for doubtful accounts $470,770 $575,500 $379,613 ($35,077) $701,734 ----------------- -------- -------- ------- -------- -------- --------
FOR YEAR ENDED SEPTEMBER 30, 1993 ---------------------------------
ADDITIONS DEDUCTIONS -------------------- ---------------------- Balance at Charges to Charges Charges for Balance at Beginning Costs and Other Which Reserves End of Description of Period Expenses Accounts Were Created Other Period ----------- ---------- ---------- -------- -------------- ----- ---------- Allowance for doubtful accounts $445,825 $369,500 $383,782 ($39,227) $470,770 -------- -------- -------- -------- -------- --------
44 EX-10.X 2 CONTRACT DATED MAY 1, 1995 1 Exhibit 10x Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 A G R E E M E N T ----------------- This AGREEMENT made and entered into as of the first day of May, 1995 by and between FALL RIVER GAS COMPANY, a Massachusetts corporation hereinafter referred to as the "Company", and the UTILITY WORKERS UNION OF AMERICA, affiliated with the AFL-CIO and Local Union No. 431, and the employees of the Company as hereinafter defined, who are now or may hereafter become members of said Local Union, hereinafter called the "Union". W I T N E S S E T H ------------------- WHEREAS, following a representation election held on December 19, 1957, under the supervision of the National Labor Relations Board, the Board certified, on December 30, 1957, the Utility Workers Union of America, AFL-CIO, as the representative of the employees of the Distribution Department of the Company as hereinafter defined; and WHEREAS, following a representation election held on May 2, 1949, under the supervision of the National Labor Relations Board, the Board certified, on May 2, 1949, the Utility Workers Union of America, C.I.0., as the representative of the employees of the Production Department of the Company as hereinafter defined, and WHEREAS, the Company has agreed to the merger of Local 431 and 382 and also agreed to negotiate with Local 431, the Local resulting from said merger; and WHEREAS, the purpose of this Agreement is to provide orderly collective bargaining relations, to secure prompt and equitable disposition of grievances; to establish rates of pay, wages, hours of employment, seniority and other conditions of employment, to promote harmony and efficiency; to prevent strikes and lockouts; all to the end that there may be an adequate and uninterrupted supply of gas service in the territory and communities served by the Company; 1 2 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 2 3 Agreement: Fall River Gas Company and Local 431 UMUA Dated: May 1, 1995 NOW, THEREFORE, the Company and the Union contract and agree with each other as follows: ARTICLE I --------- Recognition ----------- SECTION 1. The Company recognizes the Union as the exclusive representative for the purposes of collective bargaining of all employees in the Distribution Department of the Company, excluding office employees, clerks, watchmen, guards, and professional, executive and administrative firm personnel, including foremen and supervisors. SECTION 2. The Company recognizes the Union as the exclusive representative for the purpose of collective bargaining of all employees in the Production Department, but excluding Superintendent, Assistant Superintendent, Chief Chemist, Laboratory Assistants, Student Engineers, Chief Clerk, Clerk, Engineer in Charge, Master Mechanic, Assistant Master Mechanic, Foreman Engineer - - Class A, Foreman Engineer - Class B, Yard Foreman, Generator House Foreman, Natural Gas Dispatcher, Instrument Technician, Utility Engineers, Executives, Guards, Office Clerical and Professional employees and other supervisory employees with authority to hire, promote, discharge, discipline or otherwise effect changes in the status of employees or effectively to recommend such action, all as defined in the Act. ARTICLE II ---------- Scope of Agreement ------------------ SECTION 1. The provisions of this Agreement shall apply only to "regular employees" in the bargaining unit, described in Article I above, "regular employees" being hereby defined to mean employees who are regularly employed and excluding probationary and temporary employees as defined hereinafter. SECTION 2. "Probationary employees" are defined as those hired on sixty (60) days' trial, either to fill regular authorized positions, which are open or expected to be open, or to fill new positions, to be authorized. Any such employees who shall have been employed 3 4 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 sixty (60) days from date of hiring shall then become entitled to the benefits of this contract, except that they may be released from employment by the Company at any time during the first six (6) months following date of hiring without assigning any cause therefor, and such release from employment shall not be subject to the grievance procedure of this contract. A released employee who is later rehired shall have his time originally worked accumulated and added to his time later worked for purpose only of determining completion of his trial period of six (6) months, but without affecting his sixty (60) day probationary period; provided, however, that on such later rehiring he must be employed no less than sixty (60) days to complete his trial period and his probationary period. SECTION 3. A. "Temporary Employees" are defined to include such temporary employees as the Company may, in its discretion, hire for emergencies, vacation relief, or in other similar situations of a temporary nature. Seniority shall not apply to such temporary employees, and they shall not be entitled to any of the benefits of this Agreement. B. The Company may, in its discretion, temporarily assign employees from one department of the Company to another department. Such employees shall retain their seniority in the department of the Company from which they have been temporarily assigned. C. If an employee istemporarily assigned for at least six (6) hours, to a position with a higher wage classification, said employee shall be compensated at the higher wage for the entire shift. Under no conditions will a temporarily assigned employee ever be compensated at a wage rate that is less than his normal straight time rate. SECTION 4. The Company shall notify the Union in writing as and when any probationary or temporary employee is hired. ARTICLE III ----------- Union Membership Requirements ----------------------------- SECTION 1. It is agreed that, upon compliance with the requirements of Section 8(a)(3)(i) of the Labor Management Relations Act, 1947, as amended, or upon a change in 4 5 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 the law eliminating such requirements, good standing membership in the Union shall be a condition of employment for all employees on and after the thirtieth day following the beginning of such employment. For the purpose of this provision, a member of the Union shall be deemed to be in good standing only if his initiation fees and periodic fixed dues are not in arrears for more than thirty (30) days. SECTION 2. Any employee of the Company who, at any time while this Agreement is in effect, has been performing a class of work which is subject to the Union membership requirements of this Agreement, but who is subsequently transferred or promoted to a class of work which is not subject to the Union membership requirements of this Agreement, shall have the privilege of withdrawing from Union membership, and the Union agrees that such withdrawal shall not prevent any such employee from renewing Union membership in the event that thereafter the employee is assigned to a class of work in which Union membership is required hereunder as a condition of employment. SECTION 3. Any employee of the Company who is required hereunder to become a member of the Union as a condition of employment and is not a member of the Union in good standing, as above defined, shall on ten (10) days' written request of the Union, be removed from the Company payroll at the end of the next weekly pay period after expiration of such ten (10) day period, provided he has not paid up such deficiency within that time. 5 6 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 ARTICLE IV ---------- Payroll Deductions ------------------ SECTION 1. The Company agrees to deduct from earned wages and remit to the office of the Union at Suite 605, 815 16th Street, N.W., Washington, D. C. 20006, dues in the amount of $7.311 (or such amount as may be voted by the Local Union) weekly of those employees who are members of the Union, and not exempt from provisions of this Agreement, and who individually authorize such deduction in writing. The deduction shall be made on account of earned wages on a weekly basis and shall be remitted to the office of the Union on a monthly basis at the end of the fourth payroll week of each month. ------------------------------ 1. As of January 14, 1995. A copy of the approved form of authorization follows:- To FALL RIVER GAS COMPANY 155 North Main Street Fall River, Massachusetts As my employer, you are authorized and directed to deduct from my earned wages during each payroll week hereafter, my Union dues in the amount of Seven Dollars and Thirty-one Cents ($7.31) (or such amount as may be voted by the Local Union) per week and remit the same to the office of UTILITY WORKERS UNION OF AMERICA, AFL-CIO, Suite 605, 815 16th Street, N.W., Washington, D.C. 20006. This authorization and direction is valid during the term of the existing contract between Fall River Gas Company and Utility Workers Union of America, AFL-CIO, and any renewal or extension thereof, unless and until revoked by me in writing. Dated at Fall River, Massachusetts. 199 ------------------- -- As Witness: ---------------------------- Employee's signature 6 7 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 ARTICLE V --------- Hours and Days of Work ---------------------- SECTION 1. Eight hours shall constitute the regular daily assignment of all employees coming within the scope of this Agreement, except as hereinafter set out. SECTION 2. Five days of eight hours shall constitute the regular weekly assignment of all employees coming within the scope of this Agreement. SECTION 3. A. The regular working hours for the Service Department shall commence at 8:00 A.M. and end at 4:30 P.M., with one-half hour for lunch. B. The regular working hours for the Street Department shall commence at 7:00 A.M. and end at 3:30 P.M., with one-half hour for lunch. SECTION 4. Nothing in this Article contained shall be deemed or construed as an Agreement or guaranty on the part of the Company that it will furnish any amount of work to its Employees. SECTION 5. During the term of this Agreement, no employee with ten (10) or more consecutive years of service with the Company shall be laid off for lack of work; provided, however, that in case of such lack of work, the Company shall assign him to such rating as the employee is capable of performing and at the pay rate of that rating; and, provided further, that if such employee is totally disabled or incapable of performing work for the Company in any rating, his employment may be terminated; and provided still further that the Company's right to discipline or discharge for just cause shall not be impaired by the provisions of this paragraph. ARTICLE VI ---------- Days of Relief - Work Assignment -------------------------------- SECTION 1. Days of relief shall be established by the Company, but may be changed when, in the discretion of the Company, its operations require same. When new positions are created, days of relief shall also be established with such positions, but may be changed thereafter when, in the discretion of the Company, its operations require same. The usual work week shall be five (5) days. The Company shall have the right to assign employees 7 8 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 to a schedule of five consecutive days, including Saturday and Sunday, where Saturday and Sunday fall within the work week. Employees working on a shift shall be deemed to be working on the day in which the shift commences. Schedules for employees concerned shall be posted in final form two (2) weeks before effective date thereof, but may be changed in event of emergency. SECTION 2. Employees will not be compelled to change their days of relief with other employees. No exchange of days off between employees shall be effected without prior approval of the immediate supervisor. SECTION 3. The Company will train a man to be added to the C&F schedule, in order to allow one full weekend off every fourth week. Any newly hired employee will require six months' training before being put on a C&F schedule. SECTION 4. The Company agrees to change the order of shift rotations in the production department from nights, days, afternoons to nights, afternoons, days. SECTION 5. The Company and the Union will establish a mutually acceptable procedure for annual change and rotation of crew assignments in the Production Department. In the absence of any agreement, the annual change of crew assignment necessary to maintain operations, will be determined by lot after taking into consideration the training and experience of each member of the Production Department. ARTICLE VII ----------- Wages ----- SECTION 1. A. Wages shall be paid employees in each class of service in accordance with the schedule showing the classification and the ultimate base rate of each class as set forth in Exhibit "A", attached hereto and made a part hereof. In all cases of promotion or permanent transfer, regular employees having six months of continuous service with the Company, prior to the promotion or permanent transfer, shall receive the ultimate rate for the class of work to which they are assigned. An employee demoted to a lower-rated position shall receive the applicable rate for such lower-rated position. 8 9 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 B. If an employee with Twenty (20) Years or more of service with the Company is unable to perform his regular duties, due to a physical condition or impairment, the Company shall endeavor to assign him, for the duration of his employment by the Company, to a rating which he is capable of performing. If he is assigned to a lower rating, he shall retain the rate of the classification from which he retrogressed. C. If an employee is unable to perform his regular duties due to a physical condition or physical impairment as defined by the DOT Rules and Regs., as applied to his job, the Company shall endeavor to assign him for the duration of his employment by the Company, to a rating which he is capable of performing. If he is assigned to a lower rating, he shall retain the rate of the classification from which he retrogressed. SECTION 2. Effective as of May 1, 1995, all employees then employed by the Company shall receive an increase in wages of Three (3.0%) percent; effective as of May 1, 1996, all employees then employed by the Company shall receive an increase in wages of Three (3.0%) percent; effective as of May 1, 1997, all employees then employed by the Company shall receive an increase in wages of Three and One-half (3.5%) percent; and effective as of May 1, 1998 all employees then employed by the Company shall receive an increase in wages of Three and One-half (3.5%) percent. SECTION 3. A. When Street Department employees are temporarily assigned to function as a Shovel Operator or a Compressor Operator, either in the absence of the regular Shovel Operator or Compressor Operator or on a direct assignment to operate a spare Shovel or Compressor, they shall be paid at the rate of the Shovel Operator or the Compressor Operator, as the case may be. Operation of the Shovel or use of the Compressor tools by any employee in the presence of the regular Shovel Operator or Compressor Operator, as the case may be, shall not constitute an assignment as a Shovel Operator or Compressor Operator. B. If a Street Department employee is assigned temporarily to observe the operations, on a construction job, of an independent contractor, hired by the Company, with the duty of seeing that the contractor complies with the Company's job 9 10 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 specifications, including among other things any or all of the following duties: taking measurements, making reports to the Company and/or performing supervisory duties; then he shall receive a premium of ten (10) percent per hour over his regular base rate of pay (but not to exceed the Foreman's rate of pay - but in no case less than a premium of $1.00 per hour) for the time so spent. C. If a Street Department employee is assigned temporarily as a foreman of a crew of three (3) or more men (including himself), then he shall receive a premium of ten (10) percent of his regular base rate of pay (but not to exceed the Foreman's rate of pay - but in no case less than $1.00 per hour premium) for the time so spent. If, a crew of two (2) or more men which is normally supervised by a foreman in attendance, the foreman is not present and one of the men is assigned temporarily as foreman, then such employee shall receive a premium of ten (10) percent of his regular base rate of pay (but not to exceed the Foreman's rate of pay but in no case less than $1.00 per hour premium) for the time so spent. D. If a Service Department Fitter is assigned temporarily as a foreman of a crew of three (3) or more men (including himself), he shall receive a premium of ten (10) percent of his regular base rate of pay (but not to exceed his supervisor's rate of pay - but in no case less than $1.00 per hour premium) for the time so spent. SECTION 4. New employees hired during the term of this Agreement shall receive a starting wage that shall not be less than eighty (80%) percent of the ultimate base rate for the class of work to which they are assigned. After six (6) months of service with the Company, new employees will receive the ultimate base rate for the class of work to which they are assigned. SECTION 5. The classification and rates of pay contained in the schedule attached hereto shall not be changed or amended during the life of this Agreement without mutual agreement of the parties hereto signatory, except as herein provided. SECTION 6. A. Employees shall receive normal compensation (called holiday pay) for eight hours on each legal holiday listed in Section 6B below, provided the employee works 10 11 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 the entire work day or such part thereof as work is available on both his scheduled work day next prec eding and his scheduled work day next following the holiday, unless justifiably absent on such work days, and provided further that he has worked within thirty (30) days before such holiday. B. When employees work on a holiday, they shall receive their regular holiday pay and in addition, shall receive one and one-half (1.5) times their regular rate of pay, except in the case of employees working on Christmas and Thanksgiving, in which case such employees shall receive two (2.0) times the regular rate of pay, for the first eight (8) hours actually worked. "Holiday pay" is an amount equal to eight multiplied by the regular base hourly rate. Holidays shall be as follows:- New Year's Day, Washington's Birthday, Patriots Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Armistice Day, Thanksgiving Day, Christmas Day and Employee's own birthday. C. If an employee works more than eight hours on a holiday, he shall receive double time for such excess hours worked, but no additional holiday pay. D. An employee shall receive holiday pay even though a holiday occurs during his scheduled vacation. The employee may elect to receive equivalent time off in lieu of the holiday pay, subject to the Company's approval. E. An employee shall receive holiday pay even though a holiday occurs on the employee's day off. The employee shall be afforded the option of taking an alternative day off, subject to the prior approval of the appropriate supervisor, so as not to interfere with the normal operation of the Company, or accepting the holiday pay. F. Each regular employee shall be entitled to two "personal days" each year which "personal days" shall for all purposes hereunder be deemed to be holidays, provided, however, the "personal days" will be taken upon reasonable advance notice to employee's supervisor and the taking of such "personal days" individually or collectively among one or more employees of the unit shall not interfere with the day-to-day operations of the Company's business. 11 12 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 SECTION 7. When employees are scheduled to work on Sunday, they shall receive a premium of Twenty-five Per Cent (25%) of their regular rate of pay for all hours worked on Sunday. SECTION 8. A. all employees subject to this Agreement shall be paid overtime at the rate of one and one-half times their regular rate of pay for all hours worked outside their regularly scheduled hours, provided, however that an employee not on a posted work schedule for work on Sunday, if assigned work on Sunday, shall be paid for such work at 2 times his regular rate of pay. B. The above is not to conflict with holiday pay as outlined in Section 6 C. The Company will post, monthly, the list of overtime hours worked by the employees in the previous month, and will endeavor to distribute overtime work as equally as possible among employees desiring and qualified to do such overtime. Employees not desiring overtime shall notify the Company, and the Company will endeavor, to the extent reasonably feasible, not to assign overtime to such employees. If an insufficient number of employees is available for overtime work, the most junior employees shall be required to do the work. SECTION 9. Whenever hours worked in excess or outside of the regularly scheduled hours are the result of courtesy time, such excess hours shall be paid for at straight time rates. Courtesy time is understood to mean an arrangement permitted at the discretion of the Company whereby two employees on consecutive shift jobs agree to exchange shift schedules or parts thereof for the convenience of the employees. There shall be no exchange of courtesy time between employees when such exchange will result in overtime or shift differential payments to a fellow employee, and no meal shall be furnished by the Company because of courtesy time worked. SECTION 10. The following schedule shall apply to employees who are on "stand-by":- A. Employees on stand-by call week-day nights shall receive Nineteen and 00/100 ($19.00) Dollars for each night, plus compensation at time and one-half 12 13 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 for actual time worked. B. Employees on stand-by call Saturdays and sundays, including Saturday and Sunday nights, shall receive Twenty-seven and 50/100 ($27.50) Dollars for each Saturday and Sunday, plus compensation at time and one-half for actual time worked. C. Employees on stand-by call on holidays shall receive Twenty-seven and 50/100 ($27.50) Dollars for such holiday, plus compensation at time and one-half for actual time worked. D. The following shall apply to the "Stand-by" Position in the Street Department: a. There shall be four (4) persons assigned to the "Stand-by" positions and three (3) persons assigned to the "Spare Stand-by" positions. b. If there is an abundance of persons desiring to be assigned to the "Stand-by" positions or to the "Spare Stand-by" positions; the positions shall be awarded on the basis of Seniority. The most senior persons will have the right to be assigned to either the "Stand-by" or "Spare Stand-by" positions, depending on their desires and assuming they are qualified. c. When an employee progresses to the classification of B Street Person, he shall be considered qualified to be assigned to either the "Stand-by" or "Spare Stand-by" position. d. If an employee in the Street Department is not in the normal progression plan (usually leading to Utility Street Person), i.e., Shovel Operator, Welder, etc..., said employee shall be considered qualified to be assigned to either the "Stand-by" or the "Spare Stand-by" position, when both the Union and the Company mutually agree that said employee is qualified to perform the duties of those positions (neither party shall unreasonably withhold its acquiescence). e. The employees assigned to the "Spare Stand-by" positions shall be utilized on a rotating basis, by incident, with no incident lasting longer than 13 14 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 seven (7) consecutive days. E. The provisions of this Section shall not be deemed to prevent the Company from discontinuing stand-by arrangements at any time, at the Company's sole discretion. SECTION 11. An employee called in by a responsible authority of the Company outside his scheduled hours, and after he has already left the Company premises, shall receive overtime as determined under Section 8 above, for all hours worked, and in addition shall receive an allowance for idle time at straight time for the difference between four (4) hours and the number of hours actually worked in the aggregate, if less than four; provided, however, that this allowance shall not be paid in any case where employees are assigned to work continuous overtime from the end of their regular day, nor when employees are requested to report for work before their regular reporting time, (in which cases such employees shall receive overtime only for time worked up to their regular reporting time), nor where an employee is on "standby". SECTION 12. "Night Work" premium shall be paid to all employees, including auto mechanics, as follows:- A. A premium of One Dollar ($1.00) per hour will be paid for all hours worked by an employee who is on a posted schedule regularly starting at or after twelve o'clock noon and to and including four o'clock p.m. B. A premium of One Dollar and Twenty-five cents ($1.25) per hour will be paid for all hours worked by an employee who is on a posted schedule regularly starting after four o'clock p.m. and before six o'clock a.m. This premium will also be paid for work on Sunday "A" or "B" shift starting at 8:00 a.m. SECTION 13. Such premium or shift differential pay shall not apply to time allowed for sickness, accident, vacation, holidays, or leaves of absence. SECTION 14. The above-described premiums, if payable, shall on overtime hours be multiplied by one and one-half, except as otherwise provided in Section 6 B of this Article. ARTICLE VIII ------------ 14 15 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 Seniority --------- SECTION 1. A. The present seniority rank of all present bargaining unit employees of the Company shall be indicated on the seniority charts prepared by the Company and shown as Exhibits "B" & "C", attached hereto and made a part hereof. B. Additions to, and changes in, the seniority charts shall be made in accordance with the following rule: - Seniority shall begin when an employee is first hired by the Company, except, that where an employee has been dismissed or has voluntarily left the employ of the Company and has later been rehired, seniority shall begin when such employee was last hired. C. Seniority shall exist in two forms: Company Seniority and Departmental Seniority. D. Departmental Seniority is listed according to the hiring dates of all employees working within a particular department of the Company. A Departmental Seniority list establishes the order by which the employees listed thereon will be considered, as provided for in this Agreement, for layoffs, vacation assignments, rehiring, promotions, and permanent transfers within a department covered by this Agreement. E. Company Seniority is listed according to the hiring dates of all employees within the bargaining unit. The Company Seniority list establishes the order by which employees in the bargaining unit will be considered, as provided for in this Agreement, for promotions and permanent transfers between departments of the Company and for rehiring to positions not located in the departments from which the layoffs occurred. F. An employee transferred to a supervisory position with the Company and later returned to a position within the bargaining unit, shall not continue to accumulate his seniority while employed in the supervisory position. SECTION 2. In the promotion of, and filling of vacancies by, employees covered by this Agreement within and between departments of the bargaining unit, the appropriate seniority will govern, subject to qualifications of fitness and ability. If the 15 16 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 selection of the applicant for the promotions, filling of vacancies, or newly created jobs, is other than the senior applicant, the question of fitness and ability may be subject to the grievance procedure and Arbitration under this Agreement, if the Union claims the Company has exercised its rights for unjust reasons. SECTION 3. A. When forces are increased in any division, furloughed employees shall be given preference over applicants not previously employed by the Company, if they are qualified by fitness and ability to perform the work in the division of service affected. B. Furloughed employees, if offered work in writing by registered or certified mail by the Company for which they are qualified, must accept it in writing and report for work within seven (7) days after the offer is made; and furloughed employees, failing to accept work so offered and to return to work as aforesaid, shall be considered terminated. C. A furloughed employee who is not reemployed within one year from the date on which his furlough begins shall be deemed terminated; provided, however, that if such employee, within the twelfth month from the date on which his furlough begins, notifies the Company, in writing, that he desires to be considered as still on furlough for a second year, he shall not be deemed terminated unless he is not reemployed within two (2) years from the date on which his furlough begins; still further provided that, if such employee, within the twelfth month from the date on which his second year's furlough begins, notifies the Company, in writing, that he desires to be considered as still on furlough for a third year, he shall not be deemed terminated unless he is not reemployed within three (3) years from the date on which his furlough begins. D. Furloughed employees shall, during the period of their furlough, have no rights of an employee under the terms of this Agreement, other than the rights granted them in this Section. A furloughed employee, recalled to work prior to the expiration of his recall period shall retain his original Seniority date provided that he has 16 17 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 complied with the provisions of the Contract governing said recall period. The employee's longevity rights accumulated prior to his being furloughed shall be added to his time worked after his return to work following said furlough, provided that he is recalled prior to the expiration of his recall period and has complied with the provisions of the Contract governing said recall period. The provisions of this clause shall be retroactive. SECTION 4. A. Subject to the limitations of applicable laws prevailing when the question arises, any employee who, subsequent to the enactment of the Selective Service Act of 1948, as amended, left the employ of the Company for immediate entry into any of the Armed Forces of the United States of America, will retain the same seniority ratings that he would have had if he had remained in the employ of the Company during the period of absence, provided that his military service is terminated by an honorable discharge and that within ninety (90) days thereafter he shall apply in writing to the Company for reemployment. B. The Company shall assign such an employee to the rating held by him at the time of such entry, provided he is then qualified by fitness and ability to perform the work in such rating, but if he is mentally or physically unfit to perform the work in such rating, the Company shall endeavor to provide him with employment in any rating in the Company for which the Company deems him to be mentally, physically and otherwise qualified, and provided also, that his Company seniority, including aforesaid military service, shall be greater than that of the employee to be displaced. SECTION 5. The Company shall determine when a job opening is available, except where automatic progression applies. Where any such opening has been so determined by the Company to exist, such opening shall be posted and shall be filled by the senior employee qualified by fitness and ability to perform the work, in the order of priority set forth below. The change of an employee from one classification to another classification shall not be deemed as creating a job opening in the classification vacated. A. From within the classification of the Department where the 17 18 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 vacancy exists. B. From within the Department where the vacancy exists C. From senior employees within the Company. D. From furloughed employees. E. From applicants not previously employed by the Company. SECTION 6. Progression Plan. ---------- ----------------- A. The Company retains all rights to promotion as set forth in this Agreement. B. In addition to the above, in the Service Department, records will be kept of all service calls made by Servicemen and Helpers. A continuing record will be kept of all calls, including those which the employee cannot satisfactorily complete without assistance, or which require a repeat call or calls. The type of service call that such men cannot complete satisfactorily will also be catalogued. C. The Company will review, in December of 1979, and each six months thereafter, the record of each employee, to determine whether, in its opinion, any employee merits a promotion. D. Employees, if qualified to do the work of the next higher rated job within the job classifications as set out on Exhibit D attached hereto, shall move into the next higher rated job in accordance with the automatic time progression set out on Exhibit D. The Company shall have the right to accelerate such promotions if the Company determines that an employee is qualified. If an employee feels that he should move up into a higher rated job at an earlier date than set out on Exhibit D, he shall be entitled to a personal conference in June and/or December in any year, with the presence of the Steward, if the employee so requests, at which his qualifications will be reviewed as to promotion. If his qualifications are defective, they will be specified, and a program of education will be 18 19 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 outlined by the Company so that the employee shall have an opportunity to take corrective action to improve his qualifications. E. The foregoing shall not prevent the Company from advancing qualified men over more senior men who are not qualified. F. Any action of the Company in respect to the above will not be subject to the grievance procedure unless the Union claims the Company has exercised its rights for unjust reasons. 19 20 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 ARTICLE IX ---------- Leaves of Absence ----------------- SECTION 1. Allowance for sickness and non-occupational accidents shall be accumulated on and after this date by regular employees covered by this Agreement in the following manner:- A. Regular employees who already have an accumulated allowance of Two Hundred five (205) days or more shall be credited with no further allowance until their accumulation falls below Two Hundred Five (205) days. B. Except as set out in A above, regular employees shall be credited with fifteen (15) days' allowance for each full year of continuous service rendered hereafter, up to a maximum of Two Hundred Five (205) days. C. The Company shall, at the end of each contract year, advise each employee, in writing, of the amount of his accumulated allowance. D. Regular employees who have already accumulated an allowance of Two Hundred Five (205) days and who at the end of any contract year have unused sick days which such employee would have accumulated during that contract year, in excess of Two Hundred Five (205) days, shall be paid an amount equal to one-third (1/3) of the unused days in excess of two hundred five (205) days based upon such employees straight time wage rate for the contract year in question. SECTION 2. Time off due to sickness and non-occupational accidents shall be paid only for regularly scheduled work days or portions thereof lost for those reasons, computed at the normal base hourly rate, and shall be deducted from the accumulated allowance. Such payments shall be made only to the extent of the incapacity or of the amount remaining in the accumulated allowance, whichever is less, subject to the following provisions:- A. All illness or non-occupational accidents must be bona fide and reported 20 21 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 promptly to the Company. B. The Company, upon such notice, may have its doctor examine the employee for the purpose only of determining whether or not the employee is disabled or not, and the doctor shall then issue his certificate to the Company as to whether or not the employee is so disabled. In the event that such disability continues for more than one (1) day, the Company doctor may make such additional examinations as he may, in his discretion, deem necessary in order to determine the length of time during which the employee is disabled. The Company doctor's certificate as to disability or not, and as to length of time of disability, shall be final and binding on the parties. C. The Company shall pay the doctor only for examinations made pursuant to issuance of the aforesaid certificates. Should any employee engage the Company doctor for purpose of treatment, the employee, and not the Company, shall pay the doctor for services rendered in such treatment. D. If certified as disabled by the Company doctor, or if the Company elects to waive examination by its doctor after the aforesaid notice, then such absence shall be paid for at full time. E. If certified as not disabled by the Company doctor, then such absence shall not be paid for. F. Absence due to injury or illness resulting from personal violation of law, personal misconduct, or use of intoxicating beverages by the employee shall not be paid for. G. It is understood that allowances for leaves of absence are based on the assumption that the Company is the sole employer. The allowance will not be granted for absence arising from work for another employer or while self-employed. H. If an employee claims such allowances without just cause, he shall suffer the loss of benefits for that particular case. If repeated, the employee shall be disciplined or discharged, as the Company may direct, subject to the provisions of Article XII. I. Employees shall endeavor to schedule doctor's appointments during non- 21 22 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 working hours when possible, provided that if a doctor's appointment must be scheduled during working hours, then such employee shall submit to a supervisor, upon his return to work, a written notice stating the day, time and place of said appointment. J. The Company may, at its sole discretion, extend the benefits provided for under this section. K. Any employee reporting as "sick" must, beginning with the fifth (5th) incident of such absence for sickness in each contract year, provide the Company with a doctor's certificate, specifying the reasons for the sickness and stating that the employee is able to return to work. SECTION 3. A regular employee shall be granted leave of absence in the case of death in his immediate family as hereinafter defined, subject to the following provisions:- A. The employee must immediately notify his supervisor and request the leave. B. Not more than three (3) days up to and including the day of the funeral shall be allowed due to the death of a member of the immediate family, i.e., wife, husband, father, mother, brother, sister, son, daughter, father-in-law, mother-in-law, grandparent, or grandchild. One (1) day shall be allowed to attend the funeral of an aunt, uncle, brother-in-law, sister-in-law, son-in-law, daughter-in-law or spouse's grandparents. C. During such leave of absence, the employee will be paid only for regularly scheduled work days or portions thereof lost, computed at his normal base hourly rate. SECTION 4. A regular employee called for jury duty shall be paid by the Company, during such period of service, the difference between his normal straight time wages and the amount received by him for his services as a juror. SECTION 5. A. For all time lost due to occupational accidents, for which payment is being made through Workmen's Compensation Insurance, the Company will pay the difference between the normal straight time wages of the employee and the amount received by him and/or his dependents from Workmen's Compensation Insurance, in the following manner 22 23 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 and to the following extent:- B. During any consecutive twelve months' period, regular employees subject to this provision shall receive payments as set forth above, for a period of one week for each consecutive year of service with the Company hereafter, up to a maximum of thirty weeks. C. The first week of absence due to the disability shall not be counted in determining the number of weekly payments to which the employee may be entitled under this section. Such payments shall be subject to the following provisions:- 1) All occupational accidents must be bona fide and reported promptly to the Company. 2) Incapacity must be determined to be compensable under the Workmen's Compensation Act of the Commonwealth of Massachusetts before being paid for. 3) No payments shall be made where occupational accidents result from personal violation of Company rules or law or personal misconduct of the employee, or use of intoxicating beverages by the employee. D. In the event a regular employee is injured on the job, and such injury is determined to be compensable under the Workmen's Compensation Act of the Commonwealth of Massachusetts, then, during the period such employee is recovering from such injury, such injured employee shall retain his employment status with the Company for the following period: (a) for regular employees with more than six (6) months but less than five (5) years of service on the date of injury - a period of one (1) year from the date of injury; and (b) regular employees with five (5) or more years of service on the date of injury - a period of two (2) years from the date of injury. If such employee has not recovered and can not return to work at the end of the period, such employee may be terminated because of failure to report. SECTION 6. A. No employee representative of the Union may be absent from his work with pay for the transaction of Union business, except for the purpose of handling 23 24 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 grievances at the request of the Company. Before leaving his job, he must request of, and receive permission from, his foreman to do so. Such permission shall not be withheld by the foreman, except for reasonable cause. B. After each such absence, the representative of the Union shall report to the foreman in charge when he returns to work. SECTION 7. Any employee may be permitted, by the Superintendent of the Company or his designated representative, to leave the job for no more than the remainder of the day, or to remain away from work for no more than that day because of an emergency existing at home, and he may, at the sole discretion of the Company, suffer no loss of pay therefor. SECTION 8. Leaves of absence for any reason not provided for in this Article may be granted upon the sole discretion of the Company, and, in such cases, the Company may grant such leaves of absence on condition that the employee shall, during such leaves, have no rights of an employee under the terms of this Agreement; provided, however, that no employee shall be disciplined or discharged, except for just cause, and provided, further, that he shall maintain his seniority. ARTICLE X --------- Vacations --------- SECTION 1. Regular employees hereafter hired and continuously employed by the Company for a period of less than six (6) months, as of May 1 of the current calendar year, shall receive one day's vacation for each full month worked with pay equal to one-sixth (1/6) of a week's wages for each full month worked. SECTION 2. Regular employees continuously employed by the Company for a period of at least six (6) months but less than a year as of May 1 of the current calendar year, and who have done actual work for at least six (6) months during the twelve (12) months preceding May 1 of the current calendar year, shall receive one week's vacation with pay. SECTION 3. Regular employees continuously employed by the Company for a 24 25 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 period of at least one (1) year but less than five (5) years as of May 1 of the current calendar year, and who have done actual work for at least six (6) months during the twelve (12) months preceding May 1 of the current calendar year, shall receive two weeks' vacation with pay. SECTION 4. Regular employees continuously employed by the Company for a period of five (5) years or more, but less than ten (10) years as of May 1 of the current calendar year, and who have done actual work for at least six (6) months during the twelve (12) months preceding May 1 of the current calendar year, shall receive three weeks' vacation with pay. The Company will endeavor to schedule the three (3) weeks consecutively, but reserves the right to schedule the third week during any part of the year, or to eliminate the third week, if circumstances do not permit scheduling the third week during the current year. The Company agrees to pay the employee the third week's wages even though the time-off for the third week is eliminated. SECTION 5. Regular employees continuously employed by the Company for a period of ten (10) years or more but less than Twenty (20) years as of May 1 of the current calendar year, and who have done actual work for at least six (6) months during the twelve (12) months preceding May 1 of the current calendar year, shall receive four (4) weeks' vacation with pay. The Company will endeavor to schedule the four (4) weeks consecutively, but reserves the right to schedule the third and fourth weeks during any part of the year, or to eliminate the third and fourth weeks, if circumstances do not permit scheduling the third and fourth weeks during the current year. The Company agrees to pay the employee the third and fourth weeks' wages even though the time-off for the third and fourth weeks is eliminated. SECTION 6. Regular employees continuously employed by the Company for a period of twenty (20) years or more as of May 1 of the current calendar year, and who have done actual work for at least six (6) months during the twelve (12) months preceding May 1 of the current calendar year, shall receive five (5) weeks vacation with pay. The Company will endeavor to schedule the five (5) weeks consecutively, but reserves the right to schedule the third, fourth, and fifth weeks during any part of the year, or to eliminate the third, fourth and 25 26 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 fifth weeks, if circumstances do not permit scheduling the third, fourth, and fifth weeks during the current year. The Company agrees to pay the employee the third, fourth, and fifth weeks' wages even though the time-off for the third, fourth, and fifth weeks is eliminated. SECTION 7. Should an employee be called back to work by the Company after going on his assigned vacation period, the Company shall arrange for his vacation time to be completed later in the year. The employee shall receive his full vacation pay for his originally assigned vacation period only, and in addition thereto, he shall be paid time and one-half for the newly scheduled hours actually worked by him during his originally assigned vacation period. SECTION 8. A. Vacations will, so far as possible, be granted at the time desired by employees. The Company will allot time of vacation in such manner as to assure the orderly operation of the Company. Within the limitations set forth above, preference for selection of vacation periods by the employees in each classification shall be given according to the order of their listing on the seniority roster. Vacations shall be taken on a week-to-week basis, except upon prior approval by the Company, employees may apply for and be granted vacations on a one (1) day basis, further provided that under no circumstances will employees be granted vacations of less than one (1) full day. B. Vacations must be taken annually between May first and April 30th within the current contract year, except in cases of emergencies or other unusual circumstances, upon request to, and at the sole discretion of, the Company. C. In special circumstances, special leave or time off, up to three (3) days, with pay, may be granted by the Company, at any time during the year, as a loan or advance against the vacation next following. ARTICLE XI ---------- Miscellaneous Working Conditions -------------------------------- SECTION 1. The hours of work shall be continuous. Except in cases of emergency, time shall be taken off for lunch, which will not be paid for or counted in the working hours. Such lunch period will start at twelve o'clock noon and shall not be changed except for good 26 27 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 reason. SECTION 2. A. In positions where the nature of the work requires continuous operation, eight (8) consecutive hours may be worked, during which lunch may be eaten without interruption to service, or deduction in pay, providing safe operation is maintained at all times. B. No employee will be required to work in excess of sixteen (16) hours of continuous work without an eight (8) hour rest period before having to report for work again. He shall receive pay at his regular base rate for those hours of his regularly scheduled work day that fall within such eight (8) hour rest period. When an employee works for sixteen hours or more in any twenty-four hour period, he shall be entitled to a rest period of eight hours, after the completion of the sixteenth hour worked. Should the Company request the employee to work during the eight hour rest period, he shall be paid at the rate of 150% of his regular straight time wage for such hours worked, if employee is already entitled to be compensated at 150% of straight time wage for such hours worked, compensation shall be at 200% of straight time wage for such hours worked and if employee is already entitled to be compensated at 200% of straight time wage for such hours worked, compensation shall be at 250% of straight time wage for such hours worked, provided, however it is the responsibility of such employee to notify the appropriate supervisor, supervisors or dispatcher sufficiently in advance of the end of the sixteen (16) hour work period to permit the Company to reschedule the employee's work day. The employee shall continue to be paid at this overtime rate for such hours worked until he has had an eight hour rest period. The eight hours of rest shall be consecutive. C. If an employee is required to work overtime for more than two (2) hours during the eight (8) hour period immediately preceding the starting time of his next scheduled daytime shift (starting between six and eight a.m.) he shall, whenever possible, be allowed rest time, at the start of that scheduled shift, equivalent to the amount of time worked during the preceding eight hour period. The employee shall be compensated for said rest time at his normal straight time wage, unless other provisions of this Agreement are applicable. 27 28 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 Whenever said rest period is not possible, the employee shall be paid at the rate of 150% of his regular straight time wage for such hours worked, if the employee is already entitled to be compensated at 150% of straight time wage for such hours worked, compensation shall be at 200% of straight time wage for such hours worked and if employee is already entitled to be compensated at 200% of straight time wage for such hours worked, compensation shall be at 250% of straight time wage for such hours worked. (Nothing in this section is to conflict with the provisions of Section B of this Article). SECTION 3. A. The Company agrees that a foreman, supervisor or executive in charge, other than to demonstrate how he desires the work to be done, shall not perform any work covered by employees which can be performed by the employees under his supervision on the particular job, except for a Working Street Foreman with a crew of four men or less, and except in cases of emergency, or in the need of specialized skill. B. The Company further agrees that, except in cases of emergency, student engineers shall not perform any work ordinarily performed by employees in the bargaining unit, where such work simultaneously displaces employees then working in the bargaining unit. SECTION 4. A. The Company will, where it considers it necessary, supply the necessary protective clothing for exposure occurring outside the ordinary activities of an employee's employment. B. The Company will furnish work gloves to employees whose work the Company deems requires this type of protection. A new pair may be obtained after a reasonable period of time by turning in the old pair. C. The Company will pay Fifty Dollars ($50.00) toward the cost of safety shoes and if the employee irreparably damages his safety shoes, while performing work for the Company, the Company will pay the full cost of replacing said shoes with an equivalent pair of shoes. SECTION 5. The Company shall maintain, in the Distribution and Production 28 29 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 Department Buildings, an adequate stock of coveralls for use by the employees when they are required to work in any place where clothing may be damaged or soiled. SECTION 6. The Company will supply the necessary equipment and tools for carrying out any assigned work. SECTION 7. A ten minute wash-up period before the noon meal shall be granted daily to employees of the Meter Shop and Garage. A ten minute wash-up period at the end of, and within, the scheduled day's work, shall be granted daily to all employees of the Distribution Department and a ten minute change-up period, in addition to the ten minute wash-up period, shall be granted to all employees required to wear Company uniforms, said change-up period shall only be granted to those employees desiring to change out of said uniforms. A twenty-minute wash-up period at the end of, and within, the day's work shall be granted daily to employees of the Production Department, except those engaged in continuous operation. SECTION 8. Each employee shall keep the Company informed in regard to his address and telephone number. SECTION 9. A. Employees, including those on stand-by, called in for overtime work not previously scheduled shall not be required to work in excess of four hours, unless furnished with a meal, at a cost of Six Dollars ($6.00) to be paid for by the Company. B. An employee including one on stand-by, required to work two hours overtime immediately following the expiration of his regularly scheduled work day shall be furnished with a meal upon completion of the two hours overtime worked. An additional meal for each additional five hours of continuous work will be provided. The expense of these meals will be Six Dollars ($6.00) and paid for by the Company. SECTION 10. The dispatcher shall have the sole authority and responsibility to assign servicemen to read meters. When servicemen are assigned to read meters and there are scatter meter readings also being done, the meter readers shall read books and the servicemen shall do the scatter readings. When servicemen are assigned to read meters, the most junior men available excluding employees who have not completed their six (6) months trial period in the 29 30 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 service department, will be assigned to such work. SECTION 11. If service work on roof-top equipment requires the service of more then one man, the Company shall assign a second man to the job. SECTION 12. The Company agrees to arrange for the printing and will deliver to the Union without cost, one hundred fifty (150) pocket-sized copies, approximately four inches by six inches, of this Collective Bargaining Agreement. The Company reserves the right to cause the Agreement to be printed or prepared by use of computer printing system in order to limit costs and expenses, or alternatively, to have the Contract printed at a printing house. If the Contract is printed at a printing house, the Company agrees to have it printed by a Union printer and to have the Union logo or "bug" printed on the cover of the Contract book. SECTION 13. UNIFORMS. Beginning May 1, 1990 or as soon thereafter as may be reasonably accomplished, the Company will provide uniforms to employees regularly assigned as meter readers, Customer Service Department and Street Department personnel. The Company will provide the uniforms on a rental basis, for a total of eleven (11) sets of uniforms to each employee. It is expected that each uniform will be changed daily, and accordingly, the Company will arrange to have five (5) sets of the uniforms picked up each week and exchanged for freshly cleaned uniforms. Through a uniform rental company, the Company will arrange for the rental of eleven (11) long-sleeved shirts, eleven (11) short-sleeved shirts, eleven (11) pants, two (2) light-weight jackets, one (1) winter weight jacket, a baseball type cap for summer use and a "watch" type cap for winter use. The colors of the garments will be light blue shirts and navy blue pants and jackets. The Company's logo is to be set forth on each shirt and jacket in a size and style which will look appropriate, located over the breast pocket of the uniform. The employee's name shall not be placed on the outside of the uniform. Each employee is required to take reasonable care of the uniforms and to deliver the soiled uniforms weekly to a designated location in the Company for exchange. It is expected that each employee assigned to the Meter Reading Department, Service Department and Street Department will wear the uniforms. The Company reserves the right to discontinue requiring 30 31 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 the use of and the furnishing of uniforms to employees at any time without any adjustment in the compensation or benefits paid to employees affected. ARTICLE XII ----------- Suspensions and Discharges -------------------------- SECTION 1. No employee shall be discharged, suspended, or disciplined without good and sufficient cause. In case of any dispute regarding such discharge, suspension or discipline, if the Company and the Union Grievance Committee cannot reach agreement within five (5) days, the matter shall be disposed of by reference within forty-five (45) days thereafter to the Arbitration Board hereinafter set out, and such dispute shall be heard by the Arbitration Board forthwith and prior to any other dispute. If the matter is not referred to the Arbitration Board within said period of forty-five (45) days, then the discharge, suspension, or discipline shall be final and not the subject of Arbitration. If the discharge, suspension, or discipline is found to be unjustified, the Arbitration Board shall have the right, in its discretion, to direct that the employee shall lose no seniority and shall be compensated for the loss of his earnings during the period thereof. However, if the discharge, suspension, or discipline, of an employee is not submitted as a grievance by the Union, in writing, to the Company within five (5) days after such discharge, suspension, or discipline, then such discharge, suspension, or discipline shall be final and not the subject of the grievance procedure. SECTION 2. A. If an employee loses his license to operate a motor vehicle, under circumstances where he is not subject to termination or suspension for breach of Company rules, violation of law, or other improper act or failure to act, then the Company shall use its best efforts to give him work, within his classification, without reduction in pay, if economically feasible. If this is economically unfeasible, then the Company shall use its best efforts to give him any available work which he is competent to perform, in which case the employee shall receive wages at the rate of the classification in which he is performing work. B. Employees must at all times hold a valid and appropriate operator's license as required by state or federal authority to operate Company vehicles. 31 32 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 C. An employee shall immediately notify the Company if his ability to operate a motor vehicle has been restricted in any way. The failure of an employee to notify the Company of such restriction, revocation or suspension of operator's license or the operation of a Company vehicle without an appropriate license shall be reason for discipline of such employee, including suspension. 32 33 ARTICLE XIII ------------ Disputes and Grievances, Arbitration ------------------------------------ SECTION 1. The Company and the Union agree that a grievance is defined as an alleged violation or misapplication of the terms of this Agreement with respect to rates of pay, wages, seniority, hours of employment or other conditions of employment, and every reasonable endeavor shall be made to settle such grievance by agreement between the Union and the responsible officers of the Company. SECTION 2. All grievances, except those covered by Article XII, shall be handled in the following manner. A. The employee or employees and/or his Steward shall discuss the grievance with his immediate supervisor. B. If the grievance has not been settled within five (5) days of the meeting in Step A, it may be reduced to writing and sent to the Director of Employee Relations with a request for a meeting with him. Present for the Local will be the President and the Steward involved. C. If the grievance is not settled within five (5) days of the request for the meeting in Step B, the Local may request in writing a meeting with the President of the Company. Present for the Union will be the Executive Board of the Local and the National Representative. D. Such conference shall be held outside of working hours, except at the request of the Company. However, the Company will give permission for an accredited representative of the Union to visit work locations in connection with grievances arising out of this Agreement, whenever such permission in the judgment of the supervisor, may be given without serious interference with the proper performance of the duties of the employees. E. Employees acting as representatives of the Union may discuss grievances with the Company during their working hours if at the request of the Company, 33 34 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 without loss of pay, upon previous and suitable notice to the supervisors involved; but no employee, not scheduled to work during the hours of discussion of grievances, shall be paid by the Company for time devoted to such discussions, and no employee shall be paid by the Company for any time lost while acting on behalf of the Union during Arbitration proceedings. F. In the event that the Company believes itself aggrieved because of any matter in connection with this Agreement, or because of failure of members of the Union to comply with the terms of this Agreement, it is understood and agreed that the Company may, in its turn, avail itself of the grievance and Arbitration procedure herein established. G. In the event a grievance shall not have been satisfactorily settled by the foregoing processes, the matter shall be referred to Arbitration under the following procedure:- (i) Either party may notify the other in writing by registered or certified mail of its desire to arbitrate, setting forth the matter in dispute and enclosing therewith a copy of the written grievance. (ii) If the parties do not agree upon an Arbitrator within ten (10) days, the American Arbitration Association shall upon written application of either party appoint one (1) Arbitrator pursuant to the AAA Rules applicable to Voluntary Labor Arbitration to conduct an Arbitration hearing on the matter which is the subject of the grievance. H. Any Arbitration established hereunder shall commence promptly and meet as often as may be necessary for the purpose of adjusting the grievance submitted to it, the decision of the Arbitrator shall be in writing, signed and dated by the Arbitrator, one copy shall be delivered to each of the parties, and such decision shall be binding upon both parties for the duration of this Agreement. 34 35 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 I. Any Arbitration established hereunder shall have jurisdiction and authority only to resolve the questions specifically submitted to it, which shall be limited to interpretation of this Agreement and the application of this Agreement to the matters in dispute which may be presented to it through the grievance procedure. The Arbitrator may make such retroactive award or settlement as the equities of the case may demand, but in no event shall any award or settlement be retroactive beyond the date on which the grievance was first presented. The Arbitrator shall have no power to alter, revise, add to, abolish, strike from, or modify in whole or in part any of the terms of this Agreement. J. The Company and the Union shall bear the expense of its own witnesses, and its own representative at the Arbitration. The expenses of the Arbitrator, the expenses of the American Arbitration Association and all other expenses, shall be borne equally by the Company and the Union. ARTICLE XIV ----------- No Strike-No Lockout -------------------- SECTION 1. It is agreed by and between the parties hereto signatory that, while this Agreement is in force, there shall be no lockouts of the employees by the Company, and neither the Union, nor its officers, agents, or members, will authorize, sanction, cause or participate, directly or indirectly, in any concerted failure to report to work, slowdown, interruption of work, or in any strike or cessation of work, for any cause whatsoever. SECTION 2. In the event of any unauthorized strike or work stoppage on the part of the employees during the life of this Agreement, the Union and the Company will publicly disavow the strike or work stoppage and the Union will cooperate with the Company in getting the employees to return to, and remain at, work. SECTION 3. The Union agrees that the Company has the right to take disciplinary action, including discharge, against any employees who engage in any unauthorized strike or concerted failure to report to work, slowdown, interruption or stoppage of work, provided, however, that the Union has the right to present a grievance as outlined in this Agreement, if 35 36 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 there is any question as to whether such employees did so engage. ARTICLE XV ---------- General ------- SECTION 1. The Union agrees collectively and individually for its members that they will not intimidate, coerce, or refuse to work cooperatively with, any employee of the Company or with safe equipment or materials furnished by the Company. SECTION 2. It is agreed that the right to determine who shall hold foremanships or other supervisory positions remains vested exclusively in the Company. SECTION 3. The parties to this Agreement agree that the members of Local #431 and the Company officials, including supervisory personnel, individually and collectively, will endeavor to perform loyal and efficient work and service and to use their influence and best efforts to protect the property of the Company and the Company's interest and to cooperate with each other in promoting and advancing the welfare of the Company and its service at all times. SECTION 4. When meter readers are assigned to read the regular book covering Westport Point, they shall receive an additional payment of $1.40 (20 miles @ 7(cent) per mile) upon completion of the book. When assigned to read the regular book covering the North Swansea District (from Maple Avenue westerly to Route 136), they shall receive an additional payment of 70(cent) (10 miles @ 7(cent) per mile) upon completion of the book. SECTION 5. A. In the event that the meaning and intent of any provision of this Agreement shall conflict with any Federal or State Law, order, directive, or regulation now or hereafter enacted or issued, such provision hereof shall not remain operative or binding upon the parties, but the remaining portion of this Agreement shall remain in full force and effect. B. Should any provision of this Agreement be invalidated as above stated, then the parties will reopen that portion of the Agreement for the purpose of negotiating a new provision which will not conflict with such law, order or 36 37 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 regulation, and the same shall thereafter become a part of this Agreement. SECTION 6. If an outside contractor is used to do work normally done by employees in the bargaining unit, the Company agrees that it will not lay off or reduce the pay rate of any employee in the bargaining unit while such contractor is doing such work, and the Company will not, while such contractor is doing such work, by any action of the Company, reduce any roster. The phrase "action of the Company" shall not include reductions in the roster caused by employees who quit, retire, die or cease to be employees because of partial or total disability; provided, however, no reductions in roster caused by quitting, retiring, dying, or ceasing to be employees because of partial or total disability, shall allow the Company to increase its normal use of outside contractors for work normally done by employees in the bargaining unit. SECTION 7. If the Union restricts its contract negotiating committee to five (5) members, the Company will pay for time lost from work by the members in negotiating a new contract. It being understood that the commitment of the Company to pay for the member of the Union's negotiation team is limited to the payment of the straight time hourly wages such member of the Union negotiation team would have earned on the day of negotiation and if such employee is on holiday or on a day off there will be no pay for attending and participating in contract negotiations. Regardless of how long contract negotiations continue there will be no pay for overtime or premium pay. The Company shall have the right to fix the time, place and length of all meetings, but the meetings, if any, held on the last two (2) days of the term of this Agreement shall last as long as either party deems necessary. Both the Company and the Union agree to use their best efforts to reach agreement on a new contract as soon as reasonably possible. SECTION 8. If the Company believes that an employee may need a Union representative at a meeting, the Company will convey this fact to the employee as part of "see me notice". If at any time during the meeting the employee believes that he would like to have a Union representative present, he has the right to request one. 37 38 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 SECTION 9. During the terms of the Agreement the Company will post and fill in accordance with the provisions of this Agreement one (1) new job classification to be that of " Senior Fitter". The one (1) new job classification of "Senior Fitter" will be filled by the most senior "Fitter Class A" having at least 25 years of service with the Company and at least 10 years of seniority as a "Fitter - Class A" and a person who is otherwise qualified by fitness and ability to perform the job. The new job classification of "Senior Fitter" shall be established to be in effect as of April 30, 1995 with a beginning wage rate of $18.65/hr. The establishment of such classification shall not increase the roster of Union employees or the number jobs in the Company and the filling of the classification of "Senior Fitter" shall not create a vacancy in any job from which a qualified employee may transfer, it being understood that the establishing of a job classification called "Senior Fitter" is deemed for all purposes to be and is a reclassification of such qualified employee. ARTICLE XVI ----------- Notification ------------ SECTION 1. A. Any employee covered by this Agreement who finds himself, for good cause, compelled to be absent from work, shall notify a supervisor (or such other person assigned by the Company to receive such notification) of his inability to report for work, including details as to the nature of the illness and an estimate of the duration of the absence. If said employee is unable to make said report, then the report shall be made by an appropriately informed person. The foregoing shall be deemed proper and complete notification under the terms of this Agreement. B. The employee is required to give such notice as far in advance as possible in order that the Company shall have sufficient time to secure another employee to do the work. SECTION 2. When an employee has been off duty for an indefinite period, such as in case of sickness, he shall be obligated to give notice of his ability and intention to return to duty as far in advance as possible and at least eight (8) hours before starting work, 38 39 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 in order that the Company will have an opportunity to reschedule the employee who has been filling the temporary vacancy. SECTION 3. The Company will endeavor to notify an employee who is asked to report to work as a substitute for another employee in sufficient time. ARTICLE XVII ------------ Safety ------ SECTION 1. A. The Company will continue to make reasonable regulations for the safety and health of its employees, not contrary to the terms of this Agreement, during their hours of employment. All employees shall:- 1). Comply with such reasonable safety regulations which are now in effect or may later become effective through the efforts of the safety committee. 2). Use the protective devices, wearing apparel and other equipment provided by the Company for the protection of the employees from injury. 3). Do everything reasonably possible to avoid accidents, and improve the safety experience of the Department. B. Failure, after due warning, of an employee to observe Company regulations for the safety and health of its employees, or refusal to use protective devices provided by the Company, shall be sufficient cause for disciplinary action, but the matter shall be taken up with the Union before discharge. C. If, for safety reasons, a cold patch job requires two workers, the Company will assign a second employee to such cold patch job. SECTION 2. A. SCOPE. Pursuant to the Mandate of the Rules and Regulations published by the Department of Transportation ("DOT"), 49 CFR Part 40, 54 Fed. Reg. 49854, Dec. 1, 1989, as amended, and 49 CFR Part 199, 54 Fed. Reg. 51842, as amended (herein the 39 40 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 "DOT Rules and Regs."), it is the intention of Company to conduct drug testing as prescribed by the above DOT Rules and Regs. The Charlton Memorial Hospital (a DOT approved collection agency) will be where all samples are taken. They will be tested by a certified DHHS Laboratory. The doctor in charge at the Charlton facility will be the M.R.O. In all instances, where an employee tests positive, the results will be given by the M.R.O. to the Director of Employee Relations and will be kept strictly confidential, except as may be necessary to notify other persons in order to carry out the intent of this Drug Program. Supervisors from each department of the Company will be given E.A.P. training and upon completing the mandatory phase, periodic reviews will be given to update the E.A.P. training. Any employee that tests positive will be offered assistance by Family Services after returning from a Drug Rehabilitation Program. B. RANDOM TESTING. All employees required to submit to random testing by the DOT Rules and Regulations will be assigned a number for purposes of random drug testing selection. The actual selection of employees will be done by computer program. The persons for random drug testing will be selected on a monthly basis. One representative of the Union and the Director of Employee Relations will be present at all times during the selection process. A sufficient number of employees will be selected to comply with the Fifty Percent (50%) testing schedule as prescribed by the DOT Rules and Regulations. If an employee, whose number is selected by the random drawing process, is on vacation or is not available, for any reason, to be tested, the selection process will continue until a sufficient number of employees have been selected for random testing. C. CONFIRMED POSITIVE. An employee whose test has been confirmed to be positive shall be removed forthwith from his or her job assignment and shall be enrolled forthwith in a drug rehabilitation program of the type defined in the DOT Rules and Regs. The cost and expense of such rehabilitation program shall be borne by the then effective medical insurance program to which the employee subscribes or to which the employee's spouse 40 41 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 subscribes. The time away from work by such first time removal of the said employee shall be deemed to be a medical leave of absence and such employee may apply for compensation from such employee's accumulated sick pay for absence from work as a result of such first time removal. If such employee shall have a second confirmed positive test for drugs such employee shall forthwith be suspended from his or her job and shall forthwith be enrolled in a drug rehabilitation program. Such second suspension shall be deemed to be leave of absence without compensation of any kind and such employee shall not be entitled to any compensation for time lost under accumulated sick days, but such employee would be entitled to accrued vacation and/or personal days. If such employee is approved to return to work by the MRO, such employee shall return to work only on a "last chance" basis. A third confirmed positive test for drugs will result in the immediate discharge of such employee for cause. SECTION 3. A. ALCOHOL TESTING POLICY - DOT RULES AND REGULATIONS. Pursuant to the Mandate of the Rules and Regulations issued by the U.S. Department of Transportation ("DOT"), and/or as the same may from time to time be amended, the disciplinary procedures for work place alcohol testing in accordance with the DOT Rules and Regulations, is adopted as set forth below. B. Any employee of the Company who is determined to be in the possession of an open container of an alcoholic beverage or is determined to have consumed alcohol during his/her work day, including any breaks, whether paid or otherwise, may be terminated. C. Any employee of the Company who refuses to report for testing and/or to produce an adequate amount of breath for sampling purposes, without valid medical proof of the inability to provide such a sample, or engages in conduct that clearly is intended to obstruct the testing procedure will be terminated. D. Any employee of the Company who refuses to report for assessment, evaluation, and/or referral for treatment with a substance abuse professional and/or satisfactorily complete prescribe treatment, may be terminated. E. Any employee of the Company who has engaged in prohibited conduct and 41 42 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 has tested at an alcohol concentration of more that 0.02 but less that 0.04 may be, for a first offense, suspended without pay for the duration of the current shift. If the employee has a reoccurrence of testing in excess of 0.02 but less that 0.04, within a two year period commencing with the date of the first infraction, the employee may be suspended without pay for the duration of the current shift and his/her entire next regularly scheduled shift. The employee will be referred to a substance abuse professional who shall determine what assistance, if any, the employee needs in resolving problems associated with alcohol misuse. The employee shall be allowed to use accumulated sick leave and/or vacation/personal days to complete any necessary rehabilitation treatment, commencing with the third day following the date of the violation of the AMPP. All time spent on rehabilitation endeavors, in excess of accumulated sick leave, vacation time and/or personal days shall be taken as lost time for the employee and shall not be compensated for by the Company. If the employee has a third occurrence of testing in excess of 0.02 but less than 0.04, within a two year period commencing with the date of the first infraction, the employee may be terminated. F. Any employee of the Company who has engaged in prohibited conduct and has tested at alcohol concentration of more than 0.04 may be suspended for up to three days. If the employee has a reoccurrence of testing in excess 0.04, within a two year period commencing with the date of the first infraction, the employee may be suspended for up to ten days. The employee will be referred to a substance abuse professional who shall determine what assistance, if any, the employee needs in resolving problems associated with alcohol misuse. The employee will be allowed to use accumulated sick time, vacation time and/or personal days to comply with any needed rehabilitation program, commencing with the eleventh day following the date of the violation of the AMPP. All time spent on rehabilitation endeavors, in excess of accumulated vacation time and/or personal days shall be taken as lost time for the employee and shall not compensated for by the Company. If the employee has a third occurrence of testing in excess of 0.04, within a three year period commencing with the date of the first infraction, the employee may be terminated. 42 43 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 G. Any employee of the Company who has engaged in prohibited conduct and has tested at an alcohol concentration of more than 0.02 but less than 0.04, within a two year period commencing with the date the employee tested at an alcohol concentration of more than 0.04, may be suspended for up to five days. The employee will be referred to a substance abuse professional who shall determine what assistance, if any, the employee needs in resolving problems associated with alcohol misuse. The employee will be allowed to use accumulated sick time, vacation time and/or personal days to comply with any needed rehabilitation program, commencing with the sixth day following the date of the violation of the AMPP. All time spent on rehabilitation endeavors, in excess of accumulated vacation time and /or personal days shall be taken as lost time for the employee and shall not be compensated for by the Company. If the employee has a second occurrence of testing in excess of 0.02 but less than 0.04, within a three year period commencing with the date the employee tested at alcohol concentration of more than 0.04, the employee may be terminated. H. In certain Post-Accident situations, the Company may assess more severe penalties than are set forth in the above policy, depending on the severity of the incident and the degree of the violation. However, no deviance of the above stated penalties will be assessed prior to the matter being discussed with appropriate representatives of the Union. Section 4. Employees may, and are urged to, make safety suggestions to the Company through the established Safety Committee of the Company. ARTICLE XVIII ------------- Additional Employee Benefits ---------------------------- SECTION 1. A. The Company agrees, during the period of the 1995 Agreement, that it will provide and pay for Blue Cross/Blue Shield "Master Health Plus" Group Plan Insurance, including chiropractic, prescription drugs and maternity benefits coverage, as was provided to bargaining unit employees under the Labor Agreement dated as of May 1, 1990, or a mutually agreeable equivalent health plan, without requiring the employees to pay any additional cost for the Plan over the amount now paid for by the Company, except that beginning 43 44 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 with May 1, 1995, and continuing through the terms of the Agreement each member of the bargaining unit will co-pay a portion of the cost of the medical-health insurance in the amount of $7.50 per week. The amount to be paid by members of the bargaining unit will be deducted from the pay of each member of the unit or if such member elects to enter into a salary reduction plan for the amount of the health insurance payment such amount will be deducted in accordance with the written salary reduction agreement established by the Company so that such employee may make such co-payments by a reduction in wages, so that the wages used to make such co-payments will not subject to tax. The Union will be provided with a copy of the Blue Cross Blue Shield monthly statement of benefits paid for members of the bargaining unit with appropriate deletions thereto, to protect the privacy of all persons. B. If an employee has twenty-five (25) years or more of service and is retired for total disability, the Company will continue to pay his full family membership Blue Cross-Blue Shield, or its equivalent, up to age 65. C. If an employee continues his employment with the Company up to age 62 or thereafter, and retires at age 62 or thereafter, the Company will continue to pay his full family membership Blue Cross-Blue Shield, or its equivalent, from the date of his retirement up to age 65. SECTION 2. The Company shall continue, during the term of this Agreement, to include the employees in the coverage of the Pension Plan, as amended. The Pension Plan shall be amended in the following respects: A. To provide for the Company to take over full payment of contributions to the Plan effective July 1, 1977. B. To eliminate the penalty for early retirement at ages 62 to 64, inclusive. C. To provide that penalty for early retirement at ages 61 down to 55 shall be one (1%) percent per year. D. Effective May 1, 1987 the Company will make the following 44 45 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 change in the pension benefit formula for each present and future employee of the Company. The pension benefit formula shall be modified to provide a present annual benefit formula calculated using (a) and (b) as follows: (a) Either of (1) or (2) below which will produce the highest benefit: (1) 1% of the first $4,200 of the member's annual earnings as of July 1, 1986, plus 1 and 1/2% of such earnings in excess of $4,200, multiplied by the years of credited service prior to July 1, 1986; or (2) 1 and 1/2% of the first $4,200 of the member's annual earnings as of July 1, 1972, plus 2% of such earnings in excess of $4,200, multiplied by the years of credited service prior to July 1, 1972; plus 1 and 1/2% of the first $4,200, plus 2% of the excess over $4,200 of the member's annual earnings for each year of credited service between July 1, 1972 and July 1, 1986; plus (b) 2% of the member's annual earnings for each year of credited service after July 1, 1986. E. PENSION PLAN IMPROVEMENTS. Effective May 1, 1997 the Company will establish and add to the Company Pension Plan established for members of the collective bargaining unit an Alternative Pension Plan with the following retirement benefits for employees retiring from the Company at age 62 or thereafter: a monthly benefit determined by multiplying the number of years of credited service on the retirement date times "55". Each employee electing to retire from the Company on or after May 1, 1997 shall have the right to elect, by written notice to the Company made 30 days prior to such employee's date of retirement, between the Present Company Pension Plan and the new Alternate Pension Plan. SECTION 3. The Company shall, during the term of this Agreement, pay the premiums for group term Life Insurance carried for the employees with Fifty Thousand Dollars 45 46 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 ($50,000) death benefit coverage. SECTION 4. The Company will continue the group term life insurance coverage, for employees who hereafter retire, in the policy face value amount of Five Thousand Dollars ($5,000), the premiums for same to be paid by the Company. SECTION 5. The Company shall provide and pay for Blue Cross-Blue Shield Dental Blue Plan including coverage under: (i) Dental Group I Preventive Benefit Group - Full, (ii) Dental Group II - Basic Benefit Group Full, (iii) Dental Group III - Major Benefit Group -50%, and Orthodontic Benefit; with "student" rider to age twenty-three (23) with $750.00 per calendar year per person maximum benefit for Dental Groups I, II and III, and with a $1,000 lifetime benefit maximum for insured persons under the age of 19 years for the Orthodontic Benefit, or a mutually agreeable equivalent Dental Plan for its employees, both single and married. The Company will include in the Health Care Plan for its employees covered by this agreement Blue Cross-Blue Shield Vision Care Rider 14 - 002 or benefits which are substantially equal thereto. SECTION 6. In the event of the death of an employee who has completed five (5) years of service with the Company, the Company will provide the deceased's spouse, if any, and dependents with same medical coverage, at the same cost, they would have been entitled to if the employee had lived. The Company will provide said coverage for a period of the earlier of: (i) two (2) years, commencing with the date of employee's death; or (ii) until such time as the deceased's spouse remarries. SECTION 7. The Company will, to the extent set forth below, reimburse employees for the employee's cost of any school and/or correspondence courses, including the cost of books and supplies, taken by the employee on the employee's own time if job-related or if a part of such employee's educational program and if the taking of such course is approved by the Company prior to the taking of such course, and if such course is given by an institution approved and recognized by the Company as a bona fide educational institution; the Company shall reimburse such employee for fifty percent (50%) of the cost of such course, books and 46 47 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 supplies, upon evidence of completion of the course with a passing grade or equivalent up to a maximum of $500.00 in any contract year. Should the employee attain a grade of "A" or "B", said employee shall be reimbursed one hundred percent (100%) of the cost of said course, books and supplies, up to a maximum of $500.00 per contract year. SECTION 8. Effective May 1, 1995, the present Long Term Disability Plan ("L.T.D. Plan") of the Company will be modified such that the benefits will be increased to seventy percent (70%) of an employee's straight time monthly rate of pay. The entire cost of the L.T.D. Plan shall be paid for by the Company. SECTION 9. The Company shall maintain a plan (herein the "Savings Plan"), whereby each employee, at his option, could have withheld from his wages, certain amounts of money for deposit with St. Anne's Credit Union; provided, however, any change in the amount withheld or the employee's option to join or withdraw from the Savings Plan shall be limited to one time each calendar quarter; and provided further that the Savings Plan shall not violate any law, rule or regulation, nor subject the Company to any liability. SECTION 10. The Company shall, upon the retirement of an employee at age 62 or older and if such employee has at least ten (10) years of continuous service with the Company, shall grant such employee retiring at age 62 or older a special retirement bonus, equal in amount to fifteen percent (15%) of the then accumulated and unused sick days as provided for in Section 1 of Article IX, the amount of special retirement bonus, to be determined as of the employee's retirement date, and to be paid to such employee as a lump sum no later than on employee's retirement date. At the employee's election, the special retirement bonus shall be paid to the employee as "terminal leave" and can be taken immediately prior to and in conjunction with the date such employee elects to retire, in which case the accumulated allowance of sick days for which such employee is eligible shall be determined on the date of the commencement of the terminal leave. The employee shall have no right or claim as to any of the remaining accumulated sick days which upon retirement shall lapse. If such employee is reemployed, by the Company for any reason, in any capacity, as an employee, consultant, or 47 48 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 otherwise, there shall be no crediting to the rehired employee's sick pay "bank" any of the accumulated sick days which at the time of retirement were in the employee's sick pay "bank". The payment of the special retirement bonus is available to employees once during their employment with the Company, and if such employee takes early retirement, and for any reason elects to be reemployed by the Company, this retirement benefit shall thereafter be no longer available to such employee. SECTION 11. 401(K) PLAN. The Company will establish a 401(k) Plan for the members of the Collective Bargaining Unit beginning May 1, 1995 and the Company will make a matching contribution of One Dollar ($1.00) for each One Dollar ($1.00) of the employees' salary deferral contribution to such plan to a maximum amount of three percent (3.00%) of the employee's annual payroll earnings as an employee of the Company. ARTICLE XIX ----------- Management ---------- SECTION 1. The Company shall have the supervision of the work, the direction and distribution of its employees to meet the needs of the business in the efficient conduct and operation of its plant, the right to suspend or discharge, for proper cause, or furlough because of lack of work, all subject to the provisions of the Articles of this Agreement. SECTION 2. All other powers, rights,privileges, management prerogatives and responsibilities not otherwise referred to herein shall remain with the Company, including the right on the part of the Company, at all times to change any of its operations, to continue or discontinue its business, or to change, alter, or modify the nature of its business or its method of doing business. SECTION 3. All regulations for the proper operation of the plant processes as now in effect, or as adopted or changed by the Company in the future, not inconsistent with the terms of this Agreement, shall be strictly observed and enforced at all times. SECTION 4. If the Union claims that the Company has exercised any of the rights set forth in this Article without justifiable cause or reason, such claim shall be subject to the grievance procedure 48 49 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 and Arbitration under the terms of this Agreement. ARTICLE XX ---------- No Further Demands or Claims ---------------------------- SECTION 1. This Agreement expresses the full and complete understanding of the parties on the subjects of working conditions, hours of labor and other conditions of employment, including rates of pay, wages, and methods of wage payment. This mutual understanding has been reached after many hours of collective bargaining and represents concessions which have been made by both parties, in order to reach an understanding. Any subject matter not mentioned herein is hereby specifically waived, and it is agreed that neither the Union nor the Company will present any demands or claims not included herein during the life of this Agreement, unless it is agreed by both parties that changes in, or amendments to, this Agreement are desirable. ARTICLE XXI ----------- Gender; Term of Agreement; Negotiation of New Agreement ------------------------------------------------------- SECTION 1. Words of any gender used in this Agreement shall be deemed to include the other gender. Words in the singular shall be deemed to include the plural when the sense requires and the reverse shall also be true. SECTION 2. The term of this Agreement shall begin on the date hereof, and shall be binding upon the parties hereto, and shall remain in full force and effect for a period of four (4) years, and shall thereafter automatically be renewed for a period of One (1) year unless either party shall notify the other party in writing at least sixty (60) days prior to the date of expiration of this Agreement or any renewal thereof, that it desires to change or modify the terms thereof. Negotiations for the renewal of this Agreement for a further term following the date of expiration hereof shall commence at least thirty (30) days prior to such date of expiration. IN WITNESS WHEREOF, the Company and the Union, each by its duly authorized officers, have executed this AGREEMENT as of the day and year first above written. FALL RIVER GAS COMPANY 49 50 Agreement: Fall River Gas Company and Local 431 UWUA Dated: May 1, 1995 By: ------------------------------- Bradford J. Faxon, President UTILITY WORKERS UNION OF AMERICA, LOCAL #431 By -------------------------------- James R. Tavares, President By -------------------------------- Boetius W. Sullivan By -------------------------------- M. J. Stukus By -------------------------------- Paul Camara By -------------------------------- M. E. Perry By -------------------------------- National Representative of UTILITY WORKERS UNION OF AMERICA, AFL-CIO See "Letter of Understanding" attached hereto as Exhibit "E". 50 EX-10.Y 3 GAS SALES AGREEMENT 1 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT GAS SALES AGREEMENT between CNG GAS SERVICES CORPORATION and FALL RIVER GAS COMPANY 2 TABLE OF CONTENTS ARTICLE 1 GENERAL REPRESENTATIONS AND WARRANTIES........................ 1 1.1 Seller's General Representations and Warranties............... 1 1.2 Buyer's General Representations and Warranties................ 2 ARTICLE 2 DEFINITIONS................................................... 2 2.1 Definitions................................................... 2 ARTICLE 3 CHARACTER OF SERVICE.......................................... 7 3.1 Character..................................................... 8 ARTICLE 4 GOVERNMENTAL ACTIONS.......................................... 8 4.1 Applicable Laws. Orders and Regulations....................... 8 4.3 Duties........................................................ 8 4.4 Approval by Massachusetts Department of Public Utilities...... 9 4.5 Disallowance of Passthrough................................... 10 ARTICLE 6 TITLE TRANSFER POINTS......................................... 11 6.1 Identification................................................ 11 6.2 Risk of Loss; Indemnification................................. 11 ARTICLE 7 TERM.......................................................... 11 7.1 Commencement Date............................................. 11 7.2 Term of Agreement............................................. 12 ARTICLE 8 PRICING, CREDITING AND REIMBURSEMENTS......................... 12 8.1 Amounts Payable by Buyer...................................... 12 8.2 .............................................................. 12 8.3 Taxes......................................................... 13 8.4 Unavailability of Information................................. 13 8.5 Alternative Commodity Unit Prices............................. 13 ARTICLE 11 BILLING AND PAYMENT........................................... 19 11.1 Basis of Billings............................................. 19 11.2 Seller's Statement............................................ 21 11.3 Buyer's Payment............................................... 21 11.4 Payment Default............................................... 21 11.5 Disputed Charges.............................................. 22 11.6 Adjustments................................................... 22 11.7 Audits........................................................ 22 11.8 Other Information............................................. 23 ARTICLE 12 PROCESSING AND MEASUREMENT.................................... 23 12.1 Processing.................................................... 23
3 12.2 Measurements.................................................. 23 ARTICLE 13 TRANSPORTATION................................................ 23 ARTICLE 14 REPRESENTATIONS AND WARRANTIES................................ 24 14.2 Quality and Pressure.......................................... 24 14.3 Title......................................................... 24 14.4 Supply........................................................ 24 ARTICLE 15 FORCE MAJEURE................................................. 24 15.1 Suspension.................................................... 24 15.2 Definition of Force Majeure................................... 25 15.3 Exclusion..................................................... 25 15.4 Other Effects................................................. 25 ARTICLE 16 DAMAGES AND TERMINATION RIGHTS................................ 26 16.1 Obtaining Alternate Supplies or Markets....................... 26 16.2 Buyer's Damages............................................... 27 16.3 Seller's Damages.............................................. 28 16.4 Termination in Event of a Delivery Shortfall by Seller........ 28 16.5 Effect of Article 16.......................................... 28 ARTICLE 17 FINANCIAL RESPONSIBILITY...................................... 29 17.2 Bankruptcy of Party........................................... 29 ARTICLE 18 ASSIGNMENT.................................................... 29 18.1 Assignment of the Agreement................................... 29 ARTICLE 19 COLLATERAL DOCUMENTS.......................................... 30 19.1 Capacity Management Agreement................................. 30 19.4 Buyer's Agreements with Transporters.......................... 30 ARTICLE 20 TRANSPORTER PENALTIES......................................... 31 20.1 Responsibility for Penalties.................................. 31 ARTICLE 21 MISCELLANEOUS................................................. 31 21.1 Choice of Law................................................. 31 21.2 Entire Agreement.............................................. 31 21.3 Notices....................................................... 31 21.4 Exclusion of Third Party Rights............................... 32 21.5 Waiver........................................................ 32 21.6 Confidentiality............................................... 32 21.8 Severability.................................................. 33 21.9 Amendments and Other Modifications............................ 33 21.10 Heading....................................................... 33
4 21.11 Arbitration................................................... 33 21.12 Further Assurances............................................ 33
5 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT GAS SALES AGREEMENT ------------------- THIS AGREEMENT, dated this 1st day of June, 1993, by and between CNG GAS SERVICES CORPORATION, a Delaware Corporation, hereinafter referred to as "Seller," and FALL RIVER GAS COMPANY, a Massachusetts Corporation, hereinafter referred to as "Buyer," each hereinafter referred to sometimes as "Party" or collectively as "Parties." WITNESSETH: WHEREAS, Seller desires to sell natural gas on a firm basis to Buyer under and as provided by the terms and conditions of this Agreement; and WHEREAS, Buyer desires to purchase natural gas on a firm basis from Seller under and provided by the terms and conditions of this Agreement; WHEREAS, Buyer, as a local distribution company with a public utility service obligation to provide reliable and affordable Gas service to its customers, requires a reliable, reasonably priced, firm source of Gas supply; WHEREAS, Seller, as a merchant acquiring Gas supply for resale, requires a firm market for such supply; WHEREAS, Seller has furnished Buyer with a signed Letter from Seller's parent corporation, Consolidated Natural Gas Company, describing the organization and ownership of itself, and its subsidiaries, CNG Gas Services Corporation and CNG Producing Company, as of the date hereof. NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, Seller and Buyer mutually agree and covenant as follows: ARTICLE 1 GENERAL REPRESENTATIONS AND WARRANTIES 1.1 Seller's General Representations and Warranties: ----------------------------------------------- Seller makes the following general representations and warranties: 6 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (a) Seller has or will acquire a supply of Gas which Seller desires to sell and deliver to Buyer on a firm basis; (b) Seller desires to enter into an agreement for the sale of Gas, as set forth herein; (c) Seller (i) holds all necessary corporate authorizations and (ii) by the execution and delivery of this Agreement will not violate its Articles of Incorporation or any applicable law or regulation; (d) Seller has duly appointed an officer or other agent to act as its attorney-in-fact to execute this Agreement; and (e) Seller possesses all required Governmental Authorizations and all such Governmental Authorizations are in full force and effect. 1.2 Buyer's General Representations and Warranties: ---------------------------------------------- Buyer makes the following general representations and warranties: (a) Buyer desires to acquire a firm supply of Gas and to purchase and receive such supply from Seller on a firm basis; (b) Buyer desires to enter into an agreement for the purchase of Gas, as set forth herein; (c) Buyer (i) holds all necessary corporate authorizations and (ii) by the execution and delivery of this Agreement will not violate its Articles of Incorporation or any applicable law or regulation; (d) Buyer has duly appointed an officer or other agent to act as its attorney-in-fact to execute this Agreement; and (e) Buyer possesses all required Governmental Authorizations, except for the authorizations identified in Section 4.4, and all such Governmental Authorizations are in full force and effect. ARTICLE 2 DEFINITIONS 2.1 DEFINITIONS. The following terms, as used in this Contract, shall have the meanings set forth below (whether or not such terms are capitalized herein): 2 7 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (a) "ABC Group" means the group of local distribution systems in New England informally organized for the purpose of engaging in joint negotiations for the purchase of Gas from Seller, and including Colonial Gas Company, Fall River Gas Company, Town of Middleborough, Massachusetts, Municipal Gas & Electric Department, and City of Norwich Department of Public Utilities; provided the existence of such group shall not confer any legal obligation on Buyer or Seller extending beyond the express language of this Agreement or restrict the ability of Buyer or Seller to separately negotiate and enter into mutually agreeable amendments to this Agreement. (b) "Algonquin" means Algonquin Gas Transmission Company, or any successor entity that may hereafter own or operate its gas transmission facilities. (c) "Back-Up Gas" means that supply of gas to be tendered by Seller into CNG Transmission for redelivery into Texas Eastern under the conditions specified in Sections 10.1 and 10.2. (d) "Base Segment Capacity Entitlement" means the quantification of Buyer's firm right to use Texas Eastern pipeline segments in Zones STX, ETX, WLA and ELA respectively, as such quantification may be stated from time to time as a "Base Segment Capacity Entitlement" in Texas Eastern's FERC Gas Tariff. (e) "Billing Quantity" means the monthly quantity of Gas employed for billing purposes hereunder, as further described in Section 11.1 hereof. (f) "Btu" means the quantity of heat contained in one British Thermal Unit, as defined in accordance with tariff and operating procedures of Transporter. Where appropriate, "Btu's" shall mean the plural of the aforementioned definition. The term "MMBtu" means one million (1,000,000) Btu's. (g) "Capacity Management Agreement" means that certain Capacity Management Agreement dated as of the date hereof, which agreement further defines Seller's rights and obligations with respect to Individually-Certificated Capacity Rights and Unbundled Capacity Rights. (h) "City Gate" means that point on the Algonquin system that interconnects with Buyer's local distribution facilities and at which Algonquin delivers and transfers custody of Gas to Buyer. (i) CNG Transmission" means CNG Transmission Corporation or any successor person or entity that may hereafter own or operate its gas transmission facilities. (j) "Commodity Unit Price" means the amount in U.S. dollars payable by Buyer for each MMBtu (as defined herein) of Gas included in the Billing Quantity. Such price shall be computed on the "as delivered", unsaturated (dry) condition of such gas. 3 8 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (k) "Contract Year" means a period of twelve (12) consecutive months, except as specified below. The first Contract Year shall begin on the Commencement Date and shall end on May 31, 1994. The second and subsequent Contract Years shall begin on June 1 and end on May 31 of the following calendar year. (l) "Day" means the 24-hour period as defined in the FERC Gas Tariffs of Texas Eastern and Algonquin, respectively. (m) "Entitlement Quantity" or "EQ" means (i) up to MMBtu's per Day of Gas, representing the sum of the MTQ and MSQ (as the MTQ and MSQ may change, as provided in the definitions thereof below), to be delivered into Algonquin for transportation to the City Gate MINUS (ii) Transportation Shrinkage on Algonquin. (n) "Extraneous Gas" means supplies available to Buyer under existing contracts to cover periods of peak demand on Buyer's distribution system, which supplies originate from such sources as propane injection facilities, exchange or transportation arrangements with other distribution companies in New England, or liquified natural gas facilities located in the vicinity of Boston, Massachusetts. On or before October 1,1993, the parties shall prepare and complete a Schedule of Extraneous Gas in substantially the form of Appendix IV hereto. (o) "FERC" means the Federal Energy Regulatory Commission, or any successor federal agency that may regulate the interstate transportation of natural gas by pipeline. (p) "Filed Rate" means the rate Transporter files with the FERC for transportation (including storage) services and which Transporter is entitled to collect, as reflected from time to time in the rate sheets contained in Transporter's FERC Gas Tariff, notwithstanding that such rate may be subject to refund. If two or more rates are stated for the same service, the highest rate shall be deemed the Filed Rate. (q) "Force Majeure Event(s)" shall be those event(s) described in Section 15.2. (r) "Gas" means pipeline quality natural gas. (s) "Governmental Authorization" means any material governmental license, permit, franchise and other authorization of any federal, state, or local governmental authority which is necessary for a Party to obtain before such Party may lawfully execute this Agreement or commence the purchase or sale of Gas hereunder. (t) "Individually-Certificated Capacity Rights" mean the rights to use the capacity of Transporter (i) conferred on Buyer through the execution of a service agreement with Transporter and (ii) qualifying as transportation (including storage) services individually certificated under Section 7(c) of the Natural Gas Act, as amended from time to time. Individually-Certificated Capacity Rights are documented in rate schedule(s) appearing in Transporter's FERC Gas Tariff. Such Individually-Certificated Capacity Rights are further identified in Exhibit "A" hereto. 4 9 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (u) "Kosciusko Input Quantity" means the quantity of gas that Texas Eastern from time to time may direct Buyer or Seller (as capacity manager of Buyer's Unbundled Capacity Rights under the Capacity Management Agreement) to tender at point(s) of interconnection with United Gas Pipeline Company and/or Southern Natural Gas Company in the vicinity of Kosciusko, Mississippi in order to maintain or increase the effective capacity of Texas Eastern's pipeline system. (v) "Maximum Storage Quantity" or "MSQ" means the maximum MMBtu's of Storage Gas per day that can be withdrawn from storage and delivered into Algonquin for transportation to the City Gate using Buyer's portfolio of Individually-Certificated Capacity Rights and Unbundled Capacity Rights (as reduced by Transportation Shrinkage on Algonquin). The MSQ is additional to the MTQ. It is recognized that the MSQ is a changing quantity which is a function, INTER ALIA, of the balance of working gas credited by Transporter to each storage customer's account, the month in which withdrawals are scheduled, the pipeline capacity of Transporter available from the storage facility to the City Gate, and, for each Transporter, Transportation Shrinkage and the specific terms and conditions of each storage rate schedule and associated transportation rate schedule and general terms and conditions of Transporter applicable to storage customers. Any such change in the MSQ shall not operate to increase or decrease the MTQ or RO hereunder and Seller shall have no obligation to cover any change in deliveries caused thereby with increased or decreased quantities of Reserved Gas. (w) "Maximum Transportation Quantity" or "MTO" means MMBtu's per day of Gas to be delivered to the City Gate using Buyer's portfolio of (i) Individually-Certificated Capacity Rights and (ii) Unbundled Capacity Rights. To the extent such Unbundled Capacity Rights and Individually-Certificated Capacity Rights are subject to reduction due to annual contract quantity, seasonal and other limitations stated in Transporter's FERC Gas Tariff, the MTQ shall be correspondingly reduced. The MTQ is stated net of Transportation Shrinkage on Texas Eastern and is additional to the MSQ. (x) "Mcf" means one thousand (1,000) cubic feet. (y) "Month" means the period beginning on the first day of the calendar month and ending on the first day of the following calendar month, as further defined in the FERC Gas Tariffs of Texas Eastern and Algonquin, respectively. (z) "National Fuel Gas" means National Fuel Gas Supply Corporation or any successor person or entity that may hereafter own or operate its gas transmission facilities. (aa) "Nominated Quantity" means that quantity of Gas per day that Buyer notifies Seller pursuant to Section 9.1 that Buyer desires be delivered by Algonquin to the City Gate, not to exceed the EQ. (ab) "Party" means either Buyer or Seller, as the context requires. 5 10 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (ac) "Resale Customer" means a residential, commercial, or industrial customer who purchases Gas on a firm basis from Buyer. (ad) "Resale Load" means the aggregate Gas consumption by Resale Customers, to the extent such consumption is attributable to firm purchases of Gas from Buyer. (ae) "Reservation Fee" means the amount payable by Buyer each month during the term hereof to obtain an available supply of Reserved Gas from Seller, as specified in Section 8.1(a). Except as provided in Sections 15.4 (a) and 16.2 (C)I the Reservation Fee shall not be refundable to or otherwise recoupable by Buyer and shall not operate as a credit against any other charge payable by Buyer hereunder, including any amount payable by Buyer as a Commodity Charge. (af) "Reservation Quantity" or "RQ" means MMBtu's per day of Reserved Gas to be made available by Seller for delivery into Texas Eastern, plus adjustments necessary to track changes in Transportation Shrinkage, as reflected in the rate or tariff sheet filings of Texas Eastern and/or Algonquin with the FERC made effective after June 1,1993, in the manner specified in Appendix ll hereto. Except as provided in Section 9.4 and 9.5 and Appendix ll, the RQ shall be fixed for the term of this Agreement. (ag) "Reserve Auditor" means Ralph E. Davis Associates, Inc., or any other successor firm selected by CNG Producing Company to prepare a report concerning CNG Producing Company's reserves for filing with the Securities and Exchange Commission. (ah) "Reserved Gas" means the Gas held or acquired by Seller for delivery under the terms and conditions hereof, excluding Supplemental Gas and Back-Up Gas; provided that in no event shall the use of such term or any other provision of this Agreement be construed to create a dedication, commitment or other charge against specific leases, properties or gas purchase contracts owned or controlled by Seller, CNG Producing Company or any other entity under common ownership and control with Seller. Further, this Agreement shall not preclude Seller from selling to others Reserved Gas that Seller determines is surplus to that required to satisfy Seller's delivery obligations hereunder. (ai) "Storage Account" means the account maintained by Seller for each Contract Year reflecting the net balance from time to time of Storage Input Quantities and Storage Output Quantities. (aj) "Storage Gas" means Reserved Gas or other Gas which is stored at the various underground storage fields pursuant to Individually-Certificated Capacity Rights and Unbundled Capacity Rights. (ak) "Storage Input Quantity" means the monthly quantity of Gas referred to in Section 9.2 and Appendix III. 6 11 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (al) "Storage Output Quantity" means the monthly quantity of Gas referred to in Section 9.2 and Appendix III. (am) "Texas Eastern" means Texas Eastern Transmission Corp. or any successor entity that may hereafter own or operate its gas transmission facilities. (an) "Texas Eastern Supply Allocation Pool" means Gas produced and available from wells or production platforms physically attached to or normally delivered into the gathering or transmission facilities of Texas Eastern. (ao) "Title Transfer Point" shall be as described in Section 6.1 hereof. (ap) "Transco" means Transcontinental Gas Pipe Line Corporation or any successor person or entity that may hereafter own or operate its gas transmission facilities. (aq) "Transporter Costs" mean all amounts that would be payable to a Transporter for the transportation (including storage) of the Billing Quantity using the billing paths described in Section 11.1 hereof were Buyer (instead of Seller) acting as shipper under the specific Rate Schedules listed in Exhibit "A" hereto, including all amounts that would be payable as reservation fees, demand charges, usage fees, volumetric fees, commodity charges and storage injection and storage withdrawal charges. Transporter Costs shall also include all additional charges that would be associated with such transportation, including, but not limited to GRI charges, ACA charges, take-or-pay charges, taxes imposed on the transportation or use of Gas, transition costs and any other charges that any Transporter would be authorized to collect under such circumstances pursuant to FERC Order Nos. 500, 528, 636, successor orders or otherwise as the result of governmental action. (ar) "Transportation Shrinkage" means fuel, line losses, storage losses and other in-kind deductions of Gas that Transporter would be entitled to make in accordance with Transporter's FERC Gas Tariff. (as) "Transportation Shrinkage Quantity" means the positive difference between Gas receipts by Transporter and Gas deliveries by Algonquin at the City Gate using the billing paths described in Section 11.1 for the Billing Quantity, reflecting Transportation Shrinkage. The Transportation Shrinkage Quantity shall be determined consistent with Section 11.1 and the example set forth in Appendix 11 hereto. (at) "Transporter" means each of Texas Eastern, Algonquin, CNG Transmission, National Fuel Gas and Transco; to the extent such pipeline renders service in connection with Buyer's Unbundled Capacity Rights and Individually-Certificated Capacity Rights. Buyer expects to acquire on each such pipeline the Unbundled Capacity Rights and/or Individually-Certificated Capacity Rights identified in Exhibit "A" hereto. (au) "Unbundled Capacity Rights" mean the firm rights to use the capacity of Transporter (i) conferred on Buyer through the execution of a service agreement with Transporter and (ii) qualifying as blanket certificate transportation (including storage) services for purposes of 18 C.F.R. Part 284 or successor regulations. Unbundled Capacity Rights are documented in rate 7 12 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT schedule(s) appearing in Transporter's FERC Gas Tariff. Such Unbundled Capacity Rights are further identified in Exhibit "A" hereto. ARTICLE 3 CHARACTER OF SERVICE 3.1 Character. --------- (a) Seller represents that it is not an entity subject to direct sales regulation by the FERC, any state public utility commission, or any other governmental agency; and (b) Seller's obligation to sell and deliver and Buyer's obligation to purchase and receive Gas are exclusively contractual and arise solely under the provisions of this Agreement. ARTICLE 4 GOVERNMENTAL ACTIONS 4.1 APPLICABLE LAWS. ORDERS AND REGULATIONS. This Agreement is subject to all valid laws, orders, rules, and regulations of duly constituted federal, local, and state governmental authorities having jurisdiction. 8 13 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 4.3 DUTIES. In all filings, discussions and other contacts with governmental authorities relating to this Agreement (excluding such filings, discussions or other contacts as may be made in connection with the litigation or arbitration of disputes among the Parties hereunder) or any Governmental Authorization sought in connection therewith, each Party shall be subject to the following continuing duties: (a) To fully inform the other Party of material developments; (b) To vigorously advocate and defend the prudence and commercial reasonableness of this Agreement; (c) To refrain from seeking and to reasonably defend against any governmental action that would materially and adversely modify the rights and obligations of either Party hereunder or trigger the termination or suspension provisions of this Agreement; (d) To otherwise exercise good faith in dealings with the other Party; and (e) Not to misrepresent any material fact relating to this Agreement to any governmental authority. 4.4 Approval by Massachusetts Department of Public Utilities. -------------------------------------------------------- (a) The Parties recognize that, to the extent it has a term that exceeds one (1) year, this Agreement is subject to the approval of the Massachusetts Department of Public Utilities ("MDPU"). Accordingly, upon execution of this Agreement, Buyer shall proceed with due diligence and use its best efforts to obtain from the MDPU all requisite authorizations and approvals to purchase and receive Gas in accordance with the terms of this Agreement. Buyer shall furnish to Seller copies of any and all petitions, testimony, exhibits, supporting, documentation and other evidence which are filed in support of Buyer's request for approval of this Agreement from the MDPU (excluding materials relating to Buyer's purchase agreements with other suppliers and other commercially sensitive materials that Buyer treats as confidential and proprietary). (b) Buyer shall notify Seller of any ruling, order or decision by the MDPU regarding the authorizations applied for above ("Authorization Order") and provide Seller with a copy of such Authorization Order. If the Authorization Order approves this 9 14 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT Agreement without any condition, material change, or other modification, then Buyer shall accept the authorizations contained therein and/or otherwise required by law to enable Buyer to perform its obligations under this Agreement. If the Authorization Order denies approval of this Agreement or conditions approval on the making of any material change or other modification, including deletion or amendment of any term or provision of this Agreement, then, promptly after the issuance of such Authorization Order, the Parties shall then commence negotiations in good faith to attempt to agree upon modifications of this Agreement which would be responsive to the Authorization Order; provided, however, that nothing contained herein shall obligate either Party to agree to any modification which would, in the view of that Party, materially and adversely affect the profitability or other benefits of this transaction or render the performance or administration of this Agreement commercially unfeasible. If the Parties fail to agree upon such responsive modifications, then this Agreement shall continue in full force and effect, in the form in which MDPU approval was originally sought, but shall expire at the end of the preliminary term identified in Section 7.2(a). If the Parties agree upon such responsive modifications, then Buyer shall accept the authorizations contained in the Authorization Order and/or otherwise required by law to enable Buyer to perform its obligations under this Agreement, and this Agreement shall continue in full force and effect, in the form so modified, until the end of the term identified in Section 7.2 (b). 4.5 Disallowance of Passthrough. --------------------------- 10 15 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT ARTICLE 6 TITLE TRANSFER POINTS 6.1 IDENTIFICATION. The Title Transfer Point(s) for Gas sold and purchased hereunder shall be at the City Gate; provided that if the FERC Gas Tariff of any Transporter requires that Buyer, rather than Seller, have title to the Gas in order for Gas to be stored or transported, the Parties shall establish upstream Title Transfer Point(s) for the Gas subject thereto. Any such upstream Title Transfer Point(s) shall be set forth in Exhibit "A" to this Agreement. The Parties shall revise Exhibit "A" from time to time as necessary to identify such upstream Title Transfer Points as are currently operative. Regardless of whether title to Gas injected into storage is transferred upstream as provided above, Buyer shall be entitled to receive delivery at the City Gate of an equivalent quantity of Gas in the manner specified in Section 5.1. 6.2 RISK OF LOSS; INDEMNIFICATION. Seller shall own and be deemed to be in actual or constructive control and possession of the Gas until such Gas shall have been delivered at the Title Transfer Point(s) identified in Section 6.1 hereof. Buyer shall own and be deemed to be in actual or constructive control and possession of the Gas after delivery of such Gas to the Title Transfer Point(s) identified in Section 6.1 hereof. As between the parties, each Party shall bear the risk of loss for such Gas and for any injury or damage caused thereby while such Gas is in its actual or constructive control or possession; provided that Seller shall be and remain liable for any and all damages attributable to processing and/or quality deficiencies occurring after such Gas has been delivered to the Title Transfer Point(s) pursuant to the exercise of Seller's rights under Section 12.1, notwithstanding Buyer's control over and possession of such Gas. ARTICLE 7 TERM 7.1 COMMENCEMENT DATE. This Agreement shall be deemed to have commenced on June 1,1993 ("Commencement Date"): 11 16 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 7.2 Term of Agreement. ----------------- (a) This Agreement shall be in effect for a preliminary term beginning on the Commencement Date and ending on the earlier of the date (i) Buyer may accept authorizations identified in and as provided in Section 4.4 (b), or (ii) one year from Commencement Date. (b) In the event such acceptance occurs on or prior to the date one year from the Commencement Date, this Agreement shall continue until May 31, 1999, and shall further continue for successive terms of one (1) year thereafter until and unless terminated by either Party upon at least eleven (11) months written notice to the other Party prior to the end of the then-current term. ARTICLE 8 PRICING, CREDITING AND REIMBURSEMENTS 8.1 AMOUNTS PAYABLE BY BUYER. The following amounts shall be payable to Seller by Buyer hereunder: (a) Reservation Fee. Each month during the term of this Agreement, Buyer shall pay a 12 17 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 8.2 8.3 TAXES. In the event any sales, use, excise, or transfer tax is imposed on the transfer of natural gas under the terms of this Agreement, or if any tax is imposed in any other manner so as to constitute directly or indirectly a charge upon the privilege of transferring ownership of the natural gas delivered to Buyer, such tax shall be the sole liability of Buyer. In addition, if Buyer and/or Seller by reason of this Agreement becomes subject to a public utilities gross receipts tax or any other gross receipts tax, which tax is attributable to deliveries of Gas made by Seller hereunder, the tax shall be the sole liability of Buyer and shall in no manner constitute an obligation of Seller. It is agreed that in the event of the enactment of a broad based energy tax, whether measured by carbon content, Btu content, Mcf's, monetary value, or any other measure, the prices designated herein exclude this tax, and that this tax will be an addition to the stated price hereunder and constitute the liability of Buyer hereunder. In the event Seller pays or remits any tax which by action of this Section is the liability of Buyer, such amounts will be added to the payments due Seller from Buyer under this Agreement. Buyer agrees to furnish to Seller required documentation in support of any claimed exemptions from any tax considered herein, including exemption certificates, registration numbers, and any other documentation required for administration of this Section 8.3. As of the date of this Agreement, no legislation has been enacted by any governmental authority which would require tax reimbursements to be paid by Buyer to Seller hereunder; provided that the Parties are aware, as of the date hereof, that federal tax legislation may be enacted calling for a Btu-based tax on gas. If Buyer makes tax reimbursements to Seller hereunder, and Seller thereafter receives a refund of the taxes so reimbursed, Seller shall promptly pay over such refund to Buyer. 13 18 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 8.4 UNAVAILABILITY OF INFORMATION. If published information required for the pricing computation under Section 8.1 hereof and Appendix I hereto ceases to be available for any reason, the Parties shall mutually agree on an alternate index or price methodology yielding substantially similar results to those produced by the previously employed index or price methodology. During negotiations, the applicable index prices which continue to be available shall be utilized. In the event the Parties fail to reach agreement on an alternate index or price methodology within thirty (30) days after such information ceases to be available, then the matter shall be determined by arbitration pursuant to Section 21.11. 8.5 Alternative Commodity Unit Prices. --------------------------------- 14 19 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 15 20 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 16 21 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 17 22 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 18 23 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 19 24 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT ARTICLE 11 BILLING AND PAYMENT 11.1 Basis of Billings. ------------------ (a) All billings for amounts due hereunder shall be based on the Billing Quantity; provided that during any period when Seller's or Buyer's performance is suspended pursuant to Section 15.1 or Seller's deliveries are reduced in accordance with Section 10.1 or 10.2, Buyer's payment obligation shall apply only to such quantities as are actually delivered for Buyer's account. The Billing Quantity shall be equal (for the applicable month of delivery) to the sum of (i) the Nominated Quantities (as modified pursuant to Section 9.1 (b) and confirmed and scheduled for transportation to the City Gate by Algonquin), (ii) the Storage Input Quantity (if applicable), and (iii) the Transportation Shrinkage Quantity MINUS the Storage Output Quantity (if applicable); provided, however, that to the extent possible, all such quantities shall be adjusted to reflect actual deliveries prior to the rendering of the bill. To the extent such adjustment cannot be made at such time, it shall be reflected in the next bill. (b) For billing and other transactional purposes hereunder, the following rules shall apply, regardless of whether such methodology corresponds with the actual physical flow of Gas to the City Gate or into or out of storage: 20 25 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 21 26 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (v) With respect to Back-Up Gas and the transportation charges associated therewith, Buyer shall be deemed to have purchased the quantities measured at the applicable receipt points into CNG Transmission. (c) The Parties understand that from time to time imbalances may arise between the Billing Quantity, which is based on the quantity nominated by Buyer pursuant to Section 9.1, and the quantity physically delivered to Buyer by Algonquin at the City Gate. Accordingly, the Parties recognize a continuing and mutual obligation that survives the term of this Agreement to reconcile nominated quantities with physical quantities and to settle positive or negative imbalances through commercially reasonable means, including but not limited to: (i) delivery by Seller of quantities designated by Buyer pursuant to Section 9.1 but not received by Buyer and (ii) with respect to quantities not nominated by Buyer pursuant to Section 9.1 but received by Buyer, return by Buyer at no cost to Seller of equivalent quantities at mutually agreeable locations and times or payment by Buyer of an amount equal to the price under this Agreement for Gas in effect at the time payment for the imbalance is rendered. 11.2 SELLER'S STATEMENT. Seller shall render a billing statement on or before the tenth day of each month setting forth the amounts due from Buyer in accordance with Article 8 for the preceding month based on the Billing Quantity. Seller shall identify all Transporter Costs in such billing statement or in a separate statement. 11.3 BUYER'S PAYMENT. Payment by Buyer shall be due ten (10) days after receipt by Buyer of Seller's invoice. All the foregoing payments to Seller shall be made by wire transfer in immediately available funds to the following bank account, or to such other bank account as Seller may designate from time to time: CNG Gas Services Corporation c/o Chase Manhattan Bank, New York ABA #021000021 For deposit to Account No. 9102565117. 11.4 PAYMENT DEFAULT. Except for any amount that Buyer disputes in accordance with Section 11.5, should Seller fail to receive full payment of any portion of any bill for when such amount is due, interest on the unpaid portion of the bill shall accrue at the then effective prime interest 22 27 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT rate (Chase Manhattan Bank) plus two percent (2%) or the then maximum lawful interest rate, whichever is lower, from the due date until payment is received. Seller shall notify Buyer if Seller has failed to receive Buyer's payment on or before five (5) days after the due date. If such failure to pay continues for fifteen (15) days after the due date, Seller, in addition to any other remedy it may have hereunder, may, upon giving, Buyer three (3) days prior notice, suspend further delivery of Gas until such amount is paid. 11.5 DISPUTED CHARGES. If Buyer in good faith shall dispute the amount of any such bill, Buyer shall timely pay to Seller such amounts as Buyer agrees are correct. With respect to the portion of the bill that Buyer may determine in good faith to be incorrect, Buyer shall follow either of the following procedures: (a) Within 15 days after the payment due date, Buyer shall furnish to Seller a good and sufficient bond from a reputable and solvent surety to secure payment to Seller of the amount ultimately found due upon such bills after a final determination, then Seller shall not be entitled to suspend delivery of Gas on account of such disputed claim while such bond is in effect (unless other grounds for suspension by Seller apply hereunder), and the dispute shall be resolved by arbitration, as provided in Section 21.11. If it is determined that Buyer does not owe the disputed amount, Seller shall reimburse Buyer for the cost of the surety bond plus the amount of interest that has accrued on the cost of the surety bond from the time the surety bond was purchased by Buyer until such time as Buyer is determined not to owe the disputed amounts, at the prime interest rate (Chase Manhattan Bank) in effect at the time of Seller's original bill or the then maximum lawful interest rate, whichever is lower; or (b) Buyer shall pay the entire amount billed and shall identify in writing the portion that Buyer determines in good faith to be incorrect. In such event, Seller shall not be entitled to suspend delivery of Gas on account of such dispute by Buyer (unless other grounds for suspension by Seller apply hereunder), and the dispute shall be resolved by arbitration, as provided in Section 21.11. If it is determined that Buyer does not owe the disputed portion, Seller shall refund the overpayment made by Buyer plus the amount of interest that has accrued on such overpayment since the date it was made at the prime interest rate (Chase Manhattan Bank) in effect at the time of Seller's original bill or the then maximum lawful interest rate, whichever is lower. 11.6 ADJUSTMENTS. Subsequent to any bill having been paid, if any overcharge or undercharge in any form whatsoever shall be found, Seller shall refund the amount of any overcharge received by Seller, and Buyer shall pay the amount of any undercharge due Seller within thirty 23 28 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT (30) days after final determination thereof, provided, however, no retroactive adjustment will be made for any overcharge or undercharge identified or objected to for the first time after a period of twenty-four (24) months from the last day of the calendar year in which the invoice reflecting the overcharge or undercharge was issued. 11.7 AUDITS. Each Party shall have the right, at its sole expense, to audit the books and records of the other Party during the other Party's business hours to determine the accuracy of any such billing statement or billing rendered by the other Party; provided that neither Party shall exercise such audit right more frequently than once per year. In conducting such audits, Buyer and other members of the ABC Group shall reasonably coordinate the timing of any such audit and to endeavor to retain the same auditing firm. 11.8 OTHER INFORMATION. Upon Seller's request, Buyer shall provide Seller with a copy of all transportation requests and nominations made by Buyer to Transporter for all Gas purchased hereunder. ARTICLE 12 PROCESSING AND MEASUREMENT 12.1 PROCESSING. Subject to the requirements of the FERC tariff of Transporter transporting gas for Buyer's account, Seller reserves the continuing right, without notice to Buyer, to cause all Gas delivered and sold hereunder to be processed for the extraction of natural gas liquid products; provided that the processing right of Seller in no way relieves Seller of its obligations hereunder. When Seller exercises this right, Seller shall indemnify and hold Buyer harmless from (a) all processing fees and charges, (b) all Btu shrinkage resulting from such processing, (c) all transportation charges applicable to Gas to be processed that are additional to those that would otherwise be incurred by Buyer absent such processing, and (d) all liabilities, losses or damages to persons or property resulting from or relating to the processing, extraction or transportation of such natural gas liquid products. Seller shall retain and have title to all such natural gas liquid products. 12.2 MEASUREMENTS. The measurement of the quantity and quality of all Gas delivered at the Title Transfer Point(s) hereunder shall be conducted Consistent with the practice of Transporter and in accordance with the provisions of its approved FERC tariff; provided that If Transporter computes Btu's on other than an "as delivered" or unsaturated basis, proper adjustments shall be made to convert measured quantities to reflect the "as delivered" or unsaturated condition of the Gas at the Title Transfer Point. Such tariff shall govern the procedures to be followed and adjustments to be made, if any, in the event errors in measurement are discovered. 24 29 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT ARTICLE 13 TRANSPORTATION ARTICLE 14 REPRESENTATIONS AND WARRANTIES 14.1 JURISDICTIONAL STATUS. With respect to all Gas sold under this Agreement, Seller warrants in the alternative that (i) all such Gas shall not be subject to the jurisdiction of FERC under Section 7 of the Natural Gas Act of 1938 ("NGA") or (ii) if such Gas is subject to such jurisdiction, all authorizations from the FERC necessary to sell such Gas to Buyer have been obtained. 14.2 QUALITY AND PRESSURE. Seller warrants that all Gas delivered to Buyer shall be of merchantable quality and warrants that all Gas when delivered to the custody of Transporter or of an upstream pipeline(s) delivering Gas to Transporter (a) shall meet or exceed the minimum specifications of Transporter and any such upstream pipeline concerning quality and minimum Btu value and (b) shall be so delivered in compliance with the pressure requirements as set forth in the effective tariff of Transporter and any such upstream pipeline (anywhere within the applicable pipeline's allowable pressure range up to the maximum). 14.3 TITLE. Seller warrants that it has title to or the right to sell all Gas delivered hereunder and that such Gas shall be free and clear from liens and adverse claims by third parties upon delivery to Buyer or for Buyer's account hereunder. Seller shall indemnify Buyer and hold it harmless from any and all suits, actions, debts, accounts, damages, costs, losses, and expenses arising from or out of adverse claims of any person or entity to said Gas. 14.4 SUPPLY. Seller covenants that It will maintain under contract(s) throughout the term of this Agreement a supply of Gas, which supply will not be committed by Seller on a firm basis to any other purchaser or to any other contract and will be sufficient to satisfy Seller's delivery obligations under this Agreement; it being understood that such delivery obligations are subject 25 30 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT to the suspension provisions of Section 15.1 and the provisions of Article 10 conditioning Seller's obligation to maintain and tender supplies of Back-Up Gas. ARTICLE 15 FORCE MAJEURE 15.1 SUSPENSION. In the event either Party is prevented from performing its respective obligation to deliver or to receive any quantity of Gas by force majeure, as defined below, the obligation of that Party to deliver or to receive Gas under this Agreement shall be suspended for the duration of such event and to the extent of the quantity so affected by force majeure and such Party shall not be considered to have breached its obligations hereunder. A Party claiming force majeure hereunder shall, in good faith, take all measures reasonably required to relieve itself of the cause of the force majeure and shall promptly notify the other Party when such cause or causes are removed. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty; provided that such settlement is pursued with reasonable dispatch. The above reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of opposing entities when such course is or is deemed to be inadvisable or inappropriate in the discretion of the Party having the difficulty. A Party shall give prompt notice and reasonably full particulars to the other Party of the occurrence and duration of any claimed force majeure event. During any period in which force majeure prevents performance hereunder, Seller or Buyer shall continue to deliver or receive that quantity of Gas which it may prudently deliver or receive in light of the magnitude of the force majeure and in accordance with Article 10 hereof. 15.2 DEFINITION OF FORCE MAJEURE. Force majeure means acts of God; strikes, lockouts or other industrial disturbances; acts of the public enemy, wars, blockades, insurrections, civil disturbances and riots, and epidemics; landslides, lightning, earthquakes, fires, storms, hurricanes, floods, washouts, extreme weather conditions impairing the operation of production, transportation, or distribution facilities; orders, directives, restraints and requirements of the government and governmental agencies, either federal or state, civil, and military; failure of transportation because of an event constituting force majeure or other excuse for interruption, curtailment or discontinuation by Transporter of transportation or other services; explosions, breakage, freezing, or accident to facilities or lines of pipe; and any other cause not enumerated herein not within the control of the Party claiming excuse, which prevents a party from performing under this Agreement in the manner provided for herein (including the use by Seller or by Buyer of Texas Eastern, Algonquin, and other Transporters); provided, however, that such cause affecting performance by either Party shall not relieve it of liability to the extent that the cause resulted from that Party's negligence or willful misconduct. 26 31 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 15.3 EXCLUSION. Force majeure shall not include particularly the failure of Seller to have available sufficient Gas supply on hand to permit Seller to perform its obligations to deliver the RQ hereunder, unless such failure is caused by an event of force majeure as described in Section 15.2 hereof. 15.4 OTHER EFFECTS. In the event a Party suspends performance pursuant to Section 15.1, the other Party shall have the following rights: (a) If Seller is the Party suspending performance, and if the Force Majeure Event does not relate to a pipeline, storage or other facility under the dominion of Transporter or any other transporting pipeline, Buyer shall receive a credit against the Reservation Fee payable by Buyer ("Reservation Fee Credit") equal to $.08 times (i) the sum of the Nominated Quantities for each day of suspension during the applicable Month minus (ii) the sum of Seller's actual City-Gate deliveries for each day of suspension during that Month. (b) If Buyer is the Party suspending performance, Buyer shall be obligated to continue to pay all amounts payable hereunder, including, but not limited to the Reservation Fee. ARTICLE 16 DAMAGES AND TERMINATION RIGHTS 16.1 Obtaining Alternate Supplies or Markets. --------------------------------------- 27 32 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT entitled to receive under this Agreement, provided that once Buyer regains Its ability to receive Gas from Seller, Seller shall resume delivery to Buyer of that quantity of Gas that Seller is obligated to deliver hereunder. 16.2 BUYER'S DAMAGES. During any period when the requirements of the Damage Triggering Conditions applicable to Seller are fully satisfied, Buyer shall be entitled to collect the following damages from Seller: 28 33 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT Seller shall pay Buyer any damages to which Buyer is entitled under this Section on or before the fifteenth (15th) day after Seller receives a written calculation of the amount of such damages from Buyer. 16.3 SELLER'S DAMAGES. During any period when the requirements of the Damage Triggering Conditions applicable to Buyer are fully satisfied, Seller shall be entitled to collect the following damages from Buyer (in addition to such sums as may continue to be due and payable by Buyer under Article 8 hereof): Buyer shall pay Seller any damages to which Seller is entitled in hereunder on or before the fifteenth (15th) day after Buyer receives a written calculation of the amount of such damages from Seller. 16.4 Termination in Event of a Delivery Shortfall by Seller. ------------------------------------------------------ (a) 16.5 EFFECT OF ARTICLE 16. Except as provided in Sections 6.2,12.1,14.2 and 14.3, the damages specified in this Article 16 constitute the sole and exclusive damage remedies available to a Party in the event of a breach of any obligation specified herein (excepting the obligation to pay sums then continuing to be due and payable hereunder) and shall be payable in the event of such breach in lieu of any other damages available at law, including, but not limited to, consequential 29 34 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT or punitive damages; provided that nothing in this Article 16 shall be construed to impair the right of either Party to exercise a right to terminate this Agreement, as expressly provided for in this Article 16 or elsewhere in this Agreement, or to put an end to this Agreement by cancellation, as provided by law. ARTICLE 17 FINANCIAL RESPONSIBILITY 17.2 BANKRUPTCY OF PARTY. The filing of a petition in bankruptcy by either Party, or the initiation by such Party of proceedings for reorganization under the Bankruptcy Code, or the appointment of a receiver for such Party (or for any property of such Party required for the performance of this Agreement), or the filing of any insolvency proceeding against such Party, or the execution by such Party of an assignment for the benefit of its creditors shall constitute a breach by such Party of its warranties under this Agreement. In addition Seller shall be deemed in breach of its warranties under this Agreement if any of the foregoing acts or actions are taken by or against Seller's affiliated corporation, CNG Producing Company, or Seller's parent corporation, Consolidated Natural Gas Company. This Agreement may be terminated by the other Party, upon fifteen (15) days written notice to the Party breaching this Section 17.2. Such termination shall not be to the exclusion of any other remedies available to the terminating Party under this Agreement or applicable law. 30 35 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT ARTICLE 18 ASSIGNMENT 18.1 ASSIGNMENT OF THE AGREEMENT. This Agreement shall not be assigned in whole or in part by either Party without the prior written consent of the other Party, which consent shall not be unreasonably delayed or withheld; provided, however, that without the consent of the other Party, either Buyer or Seller, without relieving itself of its obligations under this Agreement, may assign this Agreement to its parent corporation or to an entity with which it is under common ownership and control. Any entity which shall succeed by purchase, merger, or consolidation of the properties, substantially as an entity, of Seller or of Buyer, as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this Agreement. This Agreement shall be binding on each Party's successors and assigns. ARTICLE 19 COLLATERAL DOCUMENTS 19.1 CAPACITY MANAGEMENT AGREEMENT. Contemporaneously with the execution of this document, the Parties are executing the Capacity Management Agreement. 31 36 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 19.4 BUYER'S AGREEMENTS WITH TRANSPORTERS. Buyer agrees to execute promptly and in proper form any and all transportation (including storage) service agreements with Transporters (including amendments thereto) that may be required to perfect Buyer's Unbundled Capacity Rights and Individually-Certificated Capacity Rights and to maintain agreements to receive the same level of service in full force and effect during the term hereof; provided nothing in this Section 19.4 shall impair Buyer's right to convert or otherwise modify Its Unbundled Capacity Rights and Individually-Certificated Capacity Rights to the extent permitted by FERC regulations and orders. Buyer also agrees to execute an Operational Balancing Agreement or other service agreement with Algonquin (covering gas flowing to the City Gate) and to maintain such agreement in full force and effect during the term hereof. Buyer shall be solely responsible for any balancing, payback or other obligations arising under such service agreement. ARTICLE 20 TRANSPORTER PENALTIES 20.1 RESPONSIBILITY FOR PENALTIES. Should any penalty be levied by Transporter, Seller shall pay such penalty under protest. Thereafter, the Parties shall investigate and determine whether such penalty was wrongfully assessed by Transporter, and if not wrongfully assessed, whether Buyer was at fault for causing the penalty to be incurred. If Buyer is determined to be at fault, Buyer shall be liable for payment of such penalty and will reimburse Seller in the event such penalty was earlier paid by Seller. 32 37 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT ARTICLE 21 MISCELLANEOUS 21.1 CHOICE OF LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the state of Massachusetts, excluding the conflict of laws principles applied in that state. 21.2 ENTIRE AGREEMENT. This Agreement (which includes attached hereto Exhibits "A", "B", "C", and "D" and Appendices I, II, Ill, and IV), together with the Capacity Management Agreement, constitutes the entire agreement between the Parties covering the subject matter hereof and supersedes any and all prior agreements, understandings, correspondence and other communications, written or oral, regarding the subject matter covered by this Agreement and the Capacity Management Agreement. 21.3 NOTICES. Unless otherwise specified herein, any notice required or permitted hereunder shall be in writing. Any such notice shall be deemed given (i) when sent by Federal Express or other overnight delivery service to the street address of the Parties shown below, or (ii) when transmitted by facsimile transmission (FAX) to the Parties' respective numbers shown below: (a) CNG Gas Services Corporation One Park Ridge Center Pittsburgh, PA 15244-0746 Attn: Director, Supply and Transportation FAX NO. (412) 7874260 (b) Fall River Gas Company 155 N. Main Street Fall River, MA 02720 Attn: Jack Fanning FAX NO. (508) 673-4290 Any FAX communication shall be promptly confirmed by mail. Either Party may change such address or telephone number by giving prior notice to the other Party. 33 38 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT 21.4 EXCLUSION OF THIRD PARTY RIGHTS. This Agreement is for the sole and exclusive benefit of the Parties hereto. Nothing expressed or implied herein is intended to benefit any other person or entity not a Party hereto. None of such persons or entities shall have any legal or equitable right, remedy, or claim under this Agreement or any provision herein. 21.5 WAIVER. Any waiver by either Party of performance due by the other Party hereunder shall be without prejudice to the right of that waiving Party to demand future performance which is in strict compliance with the terms hereof by that other Party. 21.6 CONFIDENTIALITY. This Agreement and all notices, statements, correspondence, and other communications relating to the negotiation or administration of this Agreement ("Agreement Information") are non-public, confidential, and proprietary. Each Party shall keep such Agreement Information strictly confidential for a period ending two (2) years after the expiration or termination of this Agreement. Subject to any disclosure obligations imposed upon Buyer as a governmental entity or as a private entity subject to state public utility commission jurisdiction, to the provisions of Section 11.7 permitting a coordinated audit by members of the ABC Group and to the provisions of 21.11 permitting joint arbitration of common issues, the Parties agree that they shall not disclose, reveal or divulge the Agreement Information to any person other than a director, officer, employee (including an employee of any affiliate of that Party), auditor, or advisor of that Party who needs to know such Agreement Information and is obligated to keep the Agreement Information strictly confidential, without the prior written consent of the other Party or except as may be required to comply with any statute, ordinance or order of a court or governmental agency having subject matter jurisdiction. Each Party hereby gives its consent in advance to disclosure of this Agreement in connection with pricing arbitration proceedings involving such other Party; provided such other Party takes steps to ensure to the extent permitted by law that the record of such arbitration proceeding does not become public information. In the event disclosure of Agreement Information is required to any governmental agency, the Party making such disclosure shall seek confidential treatment thereof by the governmental agency, including but not limited to, exemption of Agreement Information (to the extent permitted by law) from public access under any applicable freedom of information statute and the redacting of any Agreement Information included in the public record to delete pricing and other commercially sensitive data. 21.8 SEVERABILITY. If any provision of this Agreement is held invalid, illegal, or unenforceable to any extent, and for any reason, by a court of competent jurisdiction, the remainder of this 34 39 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT Agreement shall not be affected thereby and shall continue in full force and effect to the full extent permitted by law; provided, however, that if Article 10 or Section 14.3, 14.4, 19.2, 19.3 or 21.13 is held invalid, illegal, or unenforceable to any extent, Buyer shall have the right to terminate this Agreement immediately. In the event any provision is held invalid, illegal, or unenforceable, the Parties shall meet promptly to work together in good faith to replace the provision or term so as to effectuate the intent of the Parties regarding this Agreement. 21.9 AMENDMENTS AND OTHER MODIFICATIONS. Amendments and other modifications of this Agreement shall be or become effective only upon mutual execution of written documents hereto by the duly authorized representatives of the respective Parties. 21.10 HEADING. The Article and Section headings in this Agreement are for purposes of reference only and shall not affect the meaning of any provision of this Agreement. 21.11 ARBITRATION. Ali claims, disputes and other matters in question arising out of, or relating to this Agreement or the breach thereof shall be decided by arbitration using a single arbitrator who (a) is acceptable to both Parties, (b) has professional experience in and knowledge of the natural gas industry, and (c) is not now and has not been an employee of or a consultant for either Party within the past 5 years in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in force, unless the parties agree otherwise. If there are common issues in controversy involving two or more members of the ABC Group, such issues shall be resolved in a joint arbitration proceeding. If the Parties fail to agree on such single arbitrator, either Party may petition the United States District Court for the District of Massachusetts for the appointment of such arbitrator. This arbitration clause shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrator shall be final, and judgment may be entered upon it in accordance with the applicable law in any court having jurisdiction thereof. Notice of a demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. The arbitration shall be conducted in Boston, Massachusetts, or such other place as the parties may agree. The parties shall continue to perform under this Agreement during any arbitration proceedings, unless otherwise agreed in writing. 21.12 FURTHER ASSURANCES. Buyer and Seller agree that, from time to time, each of them will take such actions as may be necessary to carry out the purposes of this Agreement, including such temporary adjustments to the nominating, dispatching and billing procedures stated herein as may be reasonably required if the Commencement Date occurs other than on the first day of the month. 35 40 ATTENTION: ---------- REDACTED DOCUMENT PROTECTED MATERIALS HAVE BEEN EDITED FROM THIS DOCUMENT IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective on the day and year first written above. CNG GAS SERVICES CORPORATION, SELLER By:____________________________ Title:__________________________ FALL RIVER GAS COMPANY, BUYER By:____________________________ Title:__________________________ 36 -----END PRIVACY-ENHANCED MESSAGE-----