Exhibit 10-23

 

ENERGY EAST CORPORATION

DEFERRED COMPENSATION PLAN - SALARIED EMPLOYEES

 

 

     1.  Effective Date.

          Energy East Corporation (hereinafter called the Corporation) has established a deferred compensation plan (hereinafter called Deferred Compensation Plan) and is the Plan Sponsor. The DeferredCompensation Plan will permit salaried employees of the Corporation who elect to participate therein to defer receipt of a portion of their annual salary, or, if applicable, their incentive compensation, until they are no longer employed by any AffiliatedEmployer (as defined herein). The Plan, as amended, is effective January 1, 1999 and will continue in effect from year to year thereafter unless previously terminated or modified by the Corporation. All existing agreements under prior deferredcompensation plans or individual contracts with employees are unaffected hereby. Participation in the Plan shall be at the sole discretion of each eligible employee. For purposes of the Plan, "Affiliated Employer" shall mean the Corporation and themembers of the "affiliated group" within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended, of which the Corporation is the common parent.

          All officers and salaried employees who have a salary grade of at least 18 are entitled to participate in the Plan. Election to participate shall be evidenced by a deferred compensationagreement, executed by the respective participant and the Corporation, prior to January 1st of the first year of deferral, or, in the case of a participant in the Corporation's Annual Executive Incentive Plan, as amended (the "AEIP"), prior to thecommencement of the first performance period to which the election is to be effective, except that, (i) if such participant in the AEIP becomes eligible to participate in the AEIP during a performance period, the agreement may be executed prior to thefirst to occur of (a) the 15th day following the effective date of his participation in the AEIP or (b) the 182nd day of the performance period. An employee who (i) commences employment during a calendar year, (ii) immediately before commencing employmentwas employed by an Affiliated Employer, and (iii) was participating in an analogous deferred compensation plan of that Affiliated Employer shall be deemed to have elected, prior to January 1 of that calendar year, to participate in the Plan on termsanalogous to the terms under which he participated in the deferred compensation plan of the Affiliated Employer.

     2.  Plan Administrator.

          The Plan Administrator is the Corporation.

     3.  Amounts Deferred.

          A participant may elect to defer annually any amount not greater than one-third of his annual salary but no deferral will be made which would reduce salary currently payable to less than theSocial Security base as established by law from time to time. Amounts of annual salary deferred shall be in multiples of $500. The annual amount to be deferred thereafter may be eliminated or may be changed, upward, or downward, by the participant as ofany January 1st upon at least 10 days prior written notice to the Corporation. Additionally, a participant in the AEIP may elect to defer any percentage of his incentive compensation under the AEIP but no deferral will be made which would reduce the totalannual earnings currently payable to less than the Social Security base as established by law from time to time. The percentage deferred must be specified by the participant prior to the commencement of the first performance period to which it is torelate, except that, if the participant becomes eligible to participate in the AEIP during a performance period, the percentage deferred may be specified by the participant prior to the first to occur of (a) the 15th day following the effective date ofhis participation in the AEIP or (b) the 182nd day of the performance period. The percentage deferred may be eliminated or may be changed, upward, or downward, by the participant as to any future performance period upon written notice delivered to theCorporation at least 10 days prior to the commencement of such future performance period. The amounts deferred will be reflected in the Corporation's accounts as a liability in favor of the participants. At the end of each calendar year the Corporationwill credit to such account an amount equal to the prime interest rate from time to time established by The Chase Manhattan Bank, N.A. on short-term borrowings, and compounded semi-annually on the aggregate balance of the amounts deferred. The participantwill be furnished annually with a statement showing the aggregate amount deferred and the accumulated interest thereon.

     4.  Payment of Amounts Deferred.

          The accumulated amount deferred and interest thereon with respect to a participant during his employment will be paid to him after the date he is no longer employed by any Affiliated Employer("Service Termination Date"), in a lump sum within one year following the Service Termination Date or in installments in such percentages and over such period of years (not exceeding 10) as he may elect. Such election must be made prior to January 1st ofany year (except that, in the case of a participant who is not already participating and who becomes eligible to participate in the AEIP during a performance period, such election may be made prior to the first to occur of (a) the 15th day following theeffective date of his participation in the AEIP or (b) the 182nd day of the performance period, with respect to amounts to be deferred thereafter, and may be changed only in accordance with the provisions of Section 7 hereof. If he elects payment over aperiod of years, he also will be paid annually, upon retirement, or termination of employment, amounts equal to such interest on the remaining balance of the accumulated amount deferred. In the event of the participant's death, payment shall be made tohis estate or the beneficiary designated by him. Notwithstanding any other provisions of the Plan, the Corporation reserves the right to pay the accumulated amount deferred in one lump sum within a year if participant's employment is terminated by anyAffiliated Employer.

     5.  Other Provisions.

          The Corporation has reserved the right to terminate or modify the Plan by action of the Board of Directors of the Corporation. Any such termination or modification shall not affect rightspreviously accrued. Participation in the Plan shall not be deemed an employment contract. A participant's rights and benefits under the Plan may not be assigned, pledged or encumbered by the participant, his estate or beneficiary.

     6.  Funding.

          There will be no funding of any amounts to be paid pursuant to this Plan; provided, however, that the Corporation, in its discretion, may establish a trust to pay such amounts, which trustshall be subject to the claims of the Corporation's creditors in the event of the Corporation's bankruptcy or insolvency; and provided, further, that the Corporation shall remain responsible for the payment of any such amounts which are not so paid by anysuch trust.

     7.  Change in Payment Election.

          A participant may change, but only with the Corporation's consent, his election of payment terms by executing a new Pay-back Schedule. However, no such change shall be effective during theone-year period beginning with the day the participant executes the new Pay-back Schedule. If, during such one-year period, the participant becomes entitled to receive a payment or payments under the Plan pursuant to his last effective payment termselection, said last effective payment terms election shall remain in full force and effect and the new election shall be null and void.