Officer Change of Control Agreement - Joseph F Bodanza



                                    AGREEMENT

           This Agreement by and between  Eastern  Enterprises,  a Massachusetts
business trust with its principal offices in Weston,  Massachusetts ("Eastern"),
Boston  Gas  Company,  a  corporation  with its  principal  offices  in  Boston,
Massachusetts ("Boston Gas") and Joseph F. Bodanza (the "Executive"), is entered
into as of the 22nd day of  September,  1999,  and amends and  supersedes in its
entirety the agreement between the parties dated July 22, 1998:

                             W I T N E S S   T H A T:

           WHEREAS the Executive is an executive employee of Boston Gas; and

           WHEREAS the Board of Trustees of Eastern (the  "Board") and the Board
of Directors of Boston Gas (the "Boston Gas Board") have  determined  that it is
in the best interests of Eastern,  Boston Gas,  Eastern's  shareholders  and the
Executive to assure continuity in the management of Boston Gas's  administration
and  operations  by entering  into an  agreement to provide the  Executive  with
certain  assurances  pertaining to compensation and benefits in the event that a
Change of Control,  as defined below,  should be under  consideration  or should
have occurred.

           NOW, THEREFORE, it is hereby agreed by and between the parties hereto
as follows:

           1.  EMPLOYMENT.  Boston Gas agrees that from and after the  Effective
Date as  hereinafter  defined it shall  continue the Executive in its employ and
the Executive  agrees that from and after the Effective  Date he shall remain in
the employ of Boston  Gas,  in each case for the period  described  in Section 4
hereof and upon the other terms and conditions herein provided.

          2. CERTAIN DEFINITIONS:  For purposes of this Agreement, the following
     terms shall have the meanings set forth below:

                     (a) "Cause" shall mean,  subject to the  provisions of this
           definition,  (i)  conviction  of the Executive for (or a plea of nolo
           contendere by the Executive with respect to) a felony, or (ii) an act
           by the  Executive  of fraud or  dishonesty  which has  resulted or is
           likely to result in material  economic damage to Boston Gas,  Eastern
           or  Eastern's  subsidiaries.  No purported  termination  of Executive
           shall be deemed a  termination  for Cause unless the Boston Gas Board
           shall have made a determination  that Cause exists nor unless, in the
           case of Cause asserted  under clause  (a)(ii)  above,  the Boston Gas
           Board shall have given the Executive the  opportunity,  upon at least
           thirty (30) days' prior written  notice,  to appear and be heard with
           counsel before the Boston Gas Board.

                     (b) "Change of Control" shall mean the occurrence of any of
           the following after January 1, 1998:

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                               (i)  any  "person"  (as  such  term  is  used  in
                     Sections 13(d) and 14(d) of the Securities  Exchange Act of
                     1934,  as amended) or group of  "persons"  (as so defined),
                     other than Eastern,  becomes a beneficial owner directly or
                     indirectly of securities  representing  twenty-five percent
                     (25 %) or more of the  combined  voting  power  of the then
                     outstanding voting securities of Eastern; or

                               (ii)   there   is   consummated   a   merger   or
                     consolidation  ("merger") involving Eastern and immediately
                     after such merger the beneficial  owners  immediately prior
                     to such merger of the then outstanding voting securities of
                     Eastern do not continue to own  beneficially at least sixty
                     percent  (60 %) of the voting  securities  of the entity or
                     entities resulting from such merger; or

                               (iii)  there  is   consummated  a  sale,   lease,
                     exchange,  spinoff or other transfer (any of the foregoing,
                     a "transfer") of all or substantially  all of the assets or
                     business  of Eastern and its  subsidiaries,  other than any
                     such transfer resulting in beneficial ownership of not less
                     than  sixty  percent  (60%) of the  assets or  business  so
                     transferred  or not less than sixty  percent  (60 %) of the
                     voting  securities  of the entity or entities to which such
                     assets were transferred by the owners  immediately prior to
                     the transfer of the then outstanding  voting  securities of
                     Eastern; or

                               (iv) within any two-year period,  individuals who
                     at the  beginning of such period  constituted  the Board of
                     Trustees of Eastern  cease for any reason to  constitute  a
                     majority thereof;  provided, that any trustee who is not in
                     office at the beginning of such  two-year  period but whose
                     election or nomination  for election was approved by a vote
                     of at least  two-thirds  of the  trustees  in office at the
                     time of such  approval who were either  trustees of Eastern
                     at the  beginning of such period or who were elected to the
                     Board of Trustees pursuant to an election which was, or for
                     which  the  nomination  for  election  was,  previously  so
                     approved  shall be  deemed  to have  been in  office at the
                     beginning of such two-year period; or

                               (v) Eastern sells or otherwise disposes of all or
                     substantially all of its voting securities of Boston Gas or
                     Boston  Gas  sells  or   otherwise   disposes   of  all  or
                     substantially  all of its assets,  excluding in either case
                     any  transaction  resulting in beneficial  ownership of not
                     less than fifty percent (50 %) of the assets or business so
                     transferred  or not less than fifty  percent  (50 %) of the
                     voting  securities  of the entity or entities to which such
                     assets were transferred by the owners  immediately prior to
                     the transfer of the then outstanding  voting  securities of
                     Eastern.

                    (c) "Code" shall mean the federal  Internal  Revenue Code of
               1986, as amended.

                     (d)  "Disability"  shall mean the Executive's  demonstrated
           inability,  over a continuous  period of at least twelve (12) months,
           to perform the Executive's duties and

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           responsibilities  by reason of a disabling  injury or condition  that
           would  qualify  the  Executive  for  benefits  under  the  long  term
           disability program maintained for employees of Boston Gas.

                     (e)  "Effective  Date" means the earlier of (i) the date on
           which Eastern enters into a definitive  agreement,  the  transactions
           contemplated by which will, when consummated,  constitute a Change of
           Control, or (ii) the date which precedes the Change of Control by six
           (6) months.

                     (f)  "Good  Reason"  means  any  of  the  following  unless
           promptly,  fully and  retroactively  corrected  by Boston  Gas (or by
           Eastern,  in the case of any employee or executive  benefit,  benefit
           program,  incentive program, or perquisite  maintained by Eastern) or
           unless waived in writing by the  Executive:  (i) any reduction in the
           annual rate of base salary payable to the Executive  below the higher
           of the  annual  rate at which  base  salary is then being paid to the
           Executive  or the annual  rate at which base salary was being paid to
           the  Executive  immediately  prior to the  Effective  Date;  (ii) the
           elimination  of or any  reduction  in the  bonus  opportunities  made
           available  to the  Executive  under any bonus or  incentive  program;
           (iii) the  elimination  of or any reduction in any other  employee or
           executive  benefit,  benefit  program or perquisite then available to
           the Executive or the Executive's  family or that was available to the
           Executive  or  the  Executive's   family  immediately  prior  to  the
           Effective  Date,  or any  change in any such  employee  or  executive
           benefit,   benefit   program  or  perquisite  that  would  result  in
           additional cost to the Executive or the Executive's  family,  in each
           case  except for changes in  broad-based  employee  benefit  programs
           (that  is,  employee  benefit   programs   available  to  non-officer
           employees  generally as well as officers)  that have a similar effect
           on  both  officer  and  non-officer  participants  generally  in such
           programs;  (iv)  any  material  change  in  the  Executive's  duties,
           functions or responsibilities (including without limitation reporting
           lines);  (v) any action  resulting in a relocation of the Executive's
           regular  place  of  employment  to  a  location  that  is  more  than
           thirty-five  (35)  miles  from the  place  where  the  Executive  was
           regularly employed  immediately prior thereto or immediately prior to
           the  Effective  Date;  and (vi) any  other  material  breach  of this
           Agreement by Boston Gas or Eastern.

                     (g)  "Protected  Period" means the period  beginning on the
           Effective  Date and  ending on the date  which  follows  the  related
           Change of Control by twenty-four (24) months.

          3.  POSITION  AND  RESPONSIBILITIES.  During the period of  employment
     hereunder,  the  Executive  agrees  to  serve  Boston  Gas in an  executive
     capacity, subject to the terms of this Agreement.

          4. TERM AND DUTIES.


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                     (a) The  period of the  Executive's  employment  under this
           Agreement  shall be deemed to have commenced as of the Effective Date
           and  shall  continue  for a period  that  ends on the last day of the
           Protected Period.

                     (b) During the period of  employment  hereunder  and except
           for  illness or  incapacity  and  reasonable  vacation  periods,  the
           Executive's  business  time,  attention,  skill and efforts  shall be
           exclusively devoted to the business and affairs of Boston Gas and its
           subsidiaries; provided, however, that nothing in this Agreement shall
           preclude the Executive from engaging in the following:

                    (i)  serving as a director,  trustee or committee  member in
                         any company or organization,

                    (ii) delivering    lectures    and    fulfilling    speaking
                         engagements, and

                    (iii) engaging in charitable and community activities,

           provided that such activities do not materially  adversely  affect or
           interfere with the performance of the Executive's  obligations  under
           this Agreement.

          5. COMPENSATION AND BENEFITS.  During the Executive's employment under
     this  Agreement,  Boston Gas (or, to the extent  provided  below,  Eastern)
     shall pay, provide and make available the following:

                     (a) Boston Gas shall pay the  Executive  base  salary at an
           annual  rate  that is not less  than the  annual  rate at which  base
           salary was being  paid to the  Executive  by Boston  Gas  immediately
           prior to the Effective Date.

                     (b) In addition to the salary payable under  subsection (a)
           above,  Boston Gas and Eastern shall provide or make available to the
           Executive,  from and after the Effective  Date and during the term of
           the Executive's employment hereunder, bonus opportunities,  benefits,
           and perquisites not less favorable,  and on terms not less favorable,
           to  the  Executive  than  the  bonus   opportunities,   benefits  and
           perquisites  provided or made  available and on the terms provided or
           made  available to the Executive  immediately  prior to the Effective
           Date.

           6. BUSINESS EXPENSE.  Boston Gas shall pay or reimburse the Executive
for all  reasonable  travel or other  expenses  incurred in connection  with the
performance of the  Executive's  duties under this Agreement in accordance  with
such procedures as Boston Gas may from time to time establish.

          7. TERMINATION OF EMPLOYMENT.  Notwithstanding  any other provision of
     this  Agreement,  the  Executive's  employment  under this Agreement may be
     terminated:

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               (a)  by Boston  Gas for Cause  (but only if such  termination  is
                    accomplished in the manner specified in Section 2(a));

               (b)  by Boston Gas other than for Cause  pursuant to Section 7(a)
                    and other than on account of Disability or death;

               (c)  by the Executive for Good Reason;

               (d)  by the Executive  other than for Good Reason,  Disability or
                    death; or

               (e)  by Boston Gas or the Executive by reason of the  Executive's
                    Disability or death.

Except  in the  case of  termination  by  reason  of the  Executive's  death  or
termination for Cause pursuant to Section 7(a), any termination by Boston Gas of
the  Executive's  employment  under this Agreement  shall take effect only after
thirty (30) days' prior written notice by Boston Gas to the Executive.

           8. VESTING OF CERTAIN  AWARDS AND BENEFITS.1 In the event of a Change
of  Control,  the  Executive  shall  be  immediately  vested  in all  shares  of
restricted  stock of Eastern then held by the  Executive,  and all stock options
then held by the Executive  that were awarded under  Eastern's 1982 Stock Option
Plan or 1995 Stock  Option Plan (or any  successor  plan or plans) and that were
not then exercisable shall become  immediately  exercisable.  If the Executive's
employment  under this Agreement shall have terminated or been terminated  under
Section 7(b) or Section 7(c) above on or after the Effective Date but before the
related Change of Control,  the immediately  preceding sentence shall be applied
by  substituting  the  words  "held  by  the  Executive   immediately  prior  to
termination  of employment"  for the words "then held by the  Executive." If the
Executive's  employment  under  this  Agreement  shall have  terminated  or been
terminated  under  Section  7(b) or Section 7(c) above,  all of the  Executive's
stock options (including replacement options, if any, issued in substitution for
such  stock  options  in  connection  with the  Change in  Control)  held by the
Executive  immediately  prior to such  termination  shall be  exercisable  for a
period  that  ends not  earlier  than the  earlier  of (i) the date on which the
option  would  have  expired  or  terminated  had  the  Executive  continued  in
employment,  and (ii) the date which  follows  the Change of Control by thirteen
(13) months; provided, that clause (ii) of this
------------
           1 In the event of a Change of Control intended to be accounted for as
a pooling of interests, the following changes would be made to this Section 8 if
similar  changes in Eastern's  other Officer Change of Control  Agreements  were
determined (by the independent  accounting firm serving as Eastern's independent
auditors  prior to the  Change  of  Control)  to be  required  to  preserve  the
availability of such accounting treatment: (i) the term "Effective Date" as used
in this Section 8 would mean the date that precedes the Change of Control by six
months, and (ii) the extended exercisability provisions of the third sentence of
this Section 8 shall not apply; however,  options held by the Executive prior to
termination  of employment  under  Section 7(b) or Section 7(c), if  termination
occurs after the Effective  Date but before the Change of Control,  would remain
exercisable  until  thirty  (30) days  following  the Change of Control  (or, if
later,  until they would have been exercisable  without regard to the provisions
of this Section 8), subject to earlier expiration and an accelerated opportunity
to  exercise if the options  are not  assumed  (and no  replacement  options are
issued) in connection with the Change of Control.

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sentence shall not operate to extend the period of exercisability  for any stock
option that is intended to be an "incentive  stock option" within the meaning of
Section 422 of the Code;  and further  provided,  that if stock  options are not
assumed (and no replacement options are issued) in connection with the Change of
Control,  Eastern shall provide the Executive the opportunity to exercise all of
the stock options then held by the Executive (taking into account the provisions
of this  sentence)  on the same basis as options held by active  employees  that
become  exercisable in connection with the Change of Control.  The provisions of
this  Section 8 shall be in addition  to, and not in  limitation  of, any rights
that  Executive may  otherwise  have to the vesting of benefits upon a Change of
Control.  Without  limiting the foregoing,  this Agreement shall be treated as a
"COC Agreement" for purposes of the Eastern Enterprises  Supplemental  Executive
Retirement  Plan and the Eastern  Enterprises  Supplemental  Retirement Plan for
Certain Officers, each as from time to time amended.

           9. PAYMENTS UPON TERMINATION OF EMPLOYMENT.

                     (a) In the  event  of any  termination  of the  Executive's
           employment during the term of this Agreement,  if such termination is
           (1) by the  Executive  pursuant  to Section  7(c),  above,  or (2) by
           Boston Gas  pursuant to Section  7(b) above,  Boston Gas shall pay to
           the Executive the sum of the following amounts within 30 days of such
           termination (provided,  that if such termination of employment occurs
           after the  Effective  Date but  before  the  Change of  Control,  the
           Executive  shall be entitled to the payments  described at (i),  (ii)
           and (iii) below only upon consummation of the Change of Control):

                               (i) a lump sum cash  amount  equal to the product
                     of two (2) times the annual rate at which the Executive was
                     being   paid  base   salary   immediately   prior  to  such
                     termination or immediately  prior to the Effective Date, if
                     greater;

                               (ii) a lump sum cash amount  equal to the product
                     of two (2) times the total target benefit or benefits under
                     the Executive's  annual bonus or incentive plan or plans in
                     which  the  Executive  was  participating  for  the  period
                     including the date of termination or times the  Executive's
                     total target  benefit or benefits under the annual bonus or
                     incentive   plan  or  plans  in  which  the  Executive  was
                     participating  for the period  including the Effective Date
                     if higher;  provided,  that for purposes of determining the
                     Executive's  target  benefit  for any  portion  of an award
                     opportunity as to which no target amount is specified,  (A)
                     if the  portion  of the  award  opportunity  as to which no
                     target   benefit  is   specified   is  a  financial   award
                     opportunity, then the target benefit for such portion shall
                     be  662/3%  of  the  maximum  award  opportunity  for  such
                     portion, and (B) if the portion of the award opportunity as
                     to which no target  benefit is  specified  is a  management
                     objective  or "MBO"  award  opportunity,  then  the  target
                     benefit for such portion  shall be 75% of the maximum award
                     opportunity for such portion;  and further  provided,  that
                     the Executive's total target benefit or benefits will equal
                     the sum of the separate  portions of the award  opportunity
                     as hereinabove determined; and

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                               (iii) a lump sum cash amount equal to the product
                     of the  Executive's  total  target  benefit or benefits (as
                     described at paragraph (ii) above, but determined solely by
                     reference to the annual bonus or incentive plan or plans in
                     which  the  Executive  was  participating  for  the  period
                     including the date of  termination)  times a fraction,  the
                     numerator  of which is the  number of days  elapsed in such
                     bonus or incentive period prior to the date of termination,
                     and the  denominator  of which is three hundred  sixty-five
                     (365).

           In addition, upon termination of employment Boston Gas shall promptly
           pay to the Executive any salary, bonuses, or other payments earned by
           the Executive but not yet paid as of the date of termination.

                               (b)  For a  period  of  twenty-four  (24)  months
                     commencing with the month in which a termination  described
                     in  (a)(1)  or  (a)(2)  above  shall  have  occurred,   the
                     Executive and the  Executive's  family shall continue to be
                     entitled  to  participate  in  Boston  Gas's  or  Eastern's
                     medical,  dental,  life-insurance,   disability  and  other
                     welfare  benefit  plans and programs at a level of benefits
                     at least as favorable to the Executive and the  Executive's
                     family, and on terms at least as favorable to the Executive
                     and  the  Executive's  family,  as  were  available  to the
                     Executive and the Executive's  family  immediately prior to
                     termination  or  immediately  prior to the  Effective  Date
                     (whichever  is  more  favorable  to the  Executive  and the
                     Executive's  family). For purposes of any such benefit that
                     is based  on the  Executive's  length  of  employment,  the
                     Executive  shall be deemed credited with two (2) additional
                     years of employment.  For purposes of any such benefit that
                     is  based  on the  Executive's  average  compensation,  the
                     average  taken  into  account  shall  not be less  than the
                     average that would be determined by assuming continued base
                     salary and bonus or incentive  payments for a period of two
                     (2) years at the rates described at Section 9(a) above, and
                     for  purposes  of any  such  benefit  that is  based on the
                     Executive's  compensation  at  termination  of  employment,
                     there  shall  be  taken  into  account  the  higher  of the
                     Executive's  compensation at termination or the Executive's
                     compensation  immediately  prior to the Effective  Date. To
                     the extent the  continuation of benefits  described in this
                     paragraph  cannot  be  accommodated   under  the  plans  or
                     programs  of Boston Gas or Eastern  then in effect,  Boston
                     Gas shall provide for substantially  equivalent alternative
                     coverage and benefits for the Executive and the Executive's
                     family. Notwithstanding the foregoing, Boston Gas shall not
                     be  obligated  to provide a benefit or  coverage  under the
                     preceding  provisions  of this  paragraph  to the extent an
                     equivalent  or better  benefit or coverage is  available to
                     the Executive or the Executive's family, on a basis that is
                     at least as favorable to the Executive and the  Executive's
                     family,  under  a plan  or  program  of  another  employer.
                     Immediately  following  the  termination  of  the  benefits
                     provided under this Section 9(b) whenever  occurring (or at
                     any  earlier  time   subsequent  to  the   termination   of
                     employment giving rise to such benefits),  Boston Gas shall
                     provide or cause to be provided to the Executive and the

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                     Executive's family retiree health,  dental,  life and other
                     retiree  benefits,  in each case not less favorable (and on
                     terms  not  less   favorable)  to  the  Executive  and  the
                     Executive's   family  than  those   available  to  eligible
                     retirees  and  their  families  under the  retiree  benefit
                     program  of  similar  type (for  example,  retiree  medical
                     benefits  or  retiree  life  insurance)  as in  effect  (i)
                     immediately  prior  to the date of the  termination  of the
                     Executive's  employment if  immediately  prior to that date
                     the  benefits  available  under that  program  to  eligible
                     retirees and their  families were more  favorable (and were
                     made available on terms that were more  favorable) than the
                     benefits and terms, if any,  available to eligible retirees
                     and  their   families  under  that  program  as  in  effect
                     immediately  prior to the  Effective  Date,  or (ii) in all
                     other  cases,  the  Effective  Date;  provided,   that  the
                     Executive and the Executive's  family shall be eligible for
                     retiree  benefits under this sentence only if the Executive
                     would have been  eligible  to  participate  in the  retiree
                     program of similar type (as in effect  immediately prior to
                     the Effective Date or immediately  prior to the termination
                     of the Executive's employment,  whichever provided for more
                     liberal  eligibility  requirements) if (A) such program had
                     continued  unchanged  and the  Executive  had  continued in
                     employment  through  the end of the  benefits  continuation
                     period described in the first sentence of this Section 9(b)
                     (determined without regard to any early termination of such
                     period   attributable  to  benefits  made  available  by  a
                     subsequent  employer),  and  (B)  the  Executive  had  then
                     retired. For purposes of applying the immediately preceding
                     sentence,  any minimum age  requirement  applicable  to the
                     Executive for participation in a retiree benefit program of
                     Eastern or its  subsidiaries  shall be deemed satisfied if,
                     as of the end of the benefits continuation period described
                     in the first  sentence  of this  Section  9(b)  (determined
                     without  regard to any  early  termination  of such  period
                     attributable  to benefits  made  available  by a subsequent
                     employer), the Executive is or would have been at least age
                     52.  Nothing  in  this  paragraph  shall  be  construed  as
                     requiring  Boston  Gas  or  Eastern  to  pay  severance  in
                     addition to the payments and  benefits  otherwise  provided
                     for in this Agreement.

                               (c) If the  Executive  so requests in  connection
                     with a  termination  described  in (a)(1) or (a)(2)  above,
                     Boston Gas will pay in accordance  with prior  practice the
                     costs of an out-placement  service used by the Executive as
                     a result of such termination.

                               (d)   Upon   termination   of   the   Executive's
                     employment  under  this  Agreement  for  any  reason,   the
                     Executive  shall have the right to purchase the automobile,
                     if  any,  supplied  to  the  Executive  by  Eastern  or its
                     subsidiaries in connection with the Executive's employment,
                     or any automobile substituted therefor with the Executive's
                     approval, at its "blue book" value.

           10. CERTAIN TAX-RELATED PAYMENTS.


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                               (a) In the event it shall be determined  that any
                     "payment  in the nature of  compensation"  (as that term is
                     used in Section  2806 of the Code) to or for the benefit of
                     the  Executive,  whether paid or payable or  distributed or
                     distributable  pursuant to the terms of this  Agreement  or
                     otherwise (a "Payment"), would be subject to the excise tax
                     imposed by Section 4999 of the Code or comparable  state or
                     local tax or any interest or penalties with respect to such
                     excise tax or  comparable  state or local tax (such  excise
                     tax,  together  with any such interest and  penalties,  are
                     hereinafter  collectively referred to as the "Excise Tax"),
                     then, subject to the following sentence,  the cash payments
                     described  at Section  9(a)(i),  (ii) and (iii) hereof (but
                     excluding,   for  the  avoidance  of  doubt,  any  payments
                     referred to in the last  sentence of Section 9(a)) shall be
                     reduced, but not below zero, to the extent (and only to the
                     extent) necessary to avoid the imposition of an Excise Tax.
                     Notwithstanding  the foregoing,  if the preceding  sentence
                     would result in a reduction of more than ten percent  (10%)
                     in the Executive's total "parachute payments" (as that term
                     is defined in Section  280G(b)(2)  of the Code),  or if the
                     reduction  described in the  preceding  sentence  would not
                     eliminate the Excise Tax, no reduction shall be made in the
                     payments  or  benefits  due to  the  Executive  under  this
                     Agreement or otherwise and instead the  Executive  shall be
                     entitled  to receive  an  additional  payment (a  "Gross-Up
                     Payment").  The Gross-Up  Payment shall be equal to the sum
                     of the Excise Tax and all taxes  (including any interest or
                     penalties  imposed with respect to such taxes) imposed upon
                     the Gross-Up Payment.

                               (b) If the Executive  determines  that a Gross-Up
                     Payment is required,  the Executive  shall so notify Boston
                     Gas in writing,  specifying  the amount of Gross Up Payment
                     required and details as to the calculation thereof.  Boston
                     Gas shall, within 30 days, either pay such Gross-Up Payment
                     (net of applicable  wage  withholding)  to the Executive or
                     furnish an unqualified opinion from Independent Tax Counsel
                     (as defined  below),  addressed to the Executive and Boston
                     Gas,  that  there  is  substantial  authority  (within  the
                     meaning of Section 6661 of the Code) for the position  that
                     no Gross-Up Payment is required.  "Independent Tax Counsel"
                     means a lawyer  with  expertise  in the  area of  executive
                     compensation   tax  law,  who  shall  be  selected  by  the
                     Executive and shall be reasonably acceptable to Boston Gas,
                     and whose  fees and  disbursements  shall be paid by Boston
                     Gas.

                               (c) If the Internal  Revenue Service or other tax
                     authority  proposes in writing an  adjustment to the income
                     tax of the  Executive  which  would  result  in a  Gross-Up
                     Payment,  the Executive shall promptly notify Boston Gas in
                     writing and shall  refrain  for at least  thirty days after
                     giving such notice, if so permitted by law, from paying any
                     tax  (including  interest,  penalties and additions to tax)
                     asserted  to  be  payable  as a  result  of  such  proposed
                     adjustment.  Before the  expiration of such period,  Boston
                     Gas shall  either  pay the  Gross-Up  Payment or provide an
                     opinion from  Independent  Tax Counsel to the Executive and
                     Boston Gas as to whether it

                                       -9-

<PAGE>



                     is more likely than not that the proposed  adjustment would
                     be  successfully  challenged  if  the  matter  were  to  be
                     litigated.  If the opinion  provides that a challenge would
                     be more likely than not to be  successful if the issue were
                     litigated,  and Boston  Gas  requests  in writing  that the
                     Executive  contest  such  proposed  adjustment,   then  the
                     Executive  shall contest the proposed  adjustment and shall
                     consult in good faith with  Boston Gas with  respect to the
                     nature  of all  action  to be taken in  furtherance  of the
                     contest  of such  proposed  adjustment;  provided  that the
                     Executive,  after such  consultation with Boston Gas, shall
                     determine in his sole  discretion  the nature of all action
                     to be taken to contest such proposed adjustment,  including
                     (A) whether any such action  shall  initially  be by way of
                     judicial  or  administrative   proceedings,  or  both  (B).
                     whether any such proposed  adjustment shall be contested by
                     resisting payment thereof or by paying the same and seeking
                     a refund thereof,  and (C) if the Executive shall undertake
                     judicial  action with respect to such proposed  adjustment,
                     the court or other  judicial  body before which such action
                     shall be commenced and the court or other  judicial body to
                     which any appeals should be taken.  The Executive agrees to
                     take  appropriate  appeals of any  judicial  decision  that
                     would  require  Boston  Gas  to  pay  a  Gross-Up  Payment,
                     provided  Boston Gas requests in writing that the Executive
                     do so and provides an opinion from  Independent Tax Counsel
                     to the Executive and Boston Gas that it is more likely than
                     not that the  appeal  would be  successful.  The  Executive
                     further agrees to settle, compromise or otherwise terminate
                     a contest  with the Internal  Revenue  Service or other tax
                     authority  with respect to all or a portion of the proposed
                     adjustment  giving  rise  to  the  Gross-Up   Payment,   if
                     requested by Boston Gas in writing to do so at any time, in
                     which case the Executive  shall be entitled to receive from
                     Boston  Gas the  Gross-Up  Payment.  In no event  shall the
                     Executive  compromise  or settle  all or any  portion  of a
                     proposed  adjustment  which  would  result  in  a  Gross-Up
                     Payment  without the written  consent of Boston Gas,  which
                     consent shall not be unreasonably withheld.

                     The Executive shall not be required to take or continue any
                     action  pursuant  to this  Section  10  unless  Boston  Gas
                     acknowledges  its  liability  under this  Agreement  in the
                     event  that the  Internal  Revenue  Service  or  other  tax
                     authority prevails in the contest. Boston Gas hereby agrees
                     to  indemnify   the   Executive  in  a  manner   reasonably
                     satisfactory  to the  Executive  for  any  fees,  expenses,
                     penalties, interest or additions to tax which the Executive
                     may incur as a result of  contesting  the  validity  of any
                     Excise Tax and to reimburse  the  Executive  promptly  upon
                     receipt of a written  demand of the Executive for all costs
                     and expenses  which the  Executive  may incur in connection
                     with   contesting  such  proposed   adjustment   (including
                     reasonable  fees  and   disbursements  of  Independent  Tax
                     Counsel).

                     If  the  Executive   shall  have   contested  any  proposed
                     adjustment  as  above  provided,  and  for so  long  as the
                     Executive shall be required under the terms of this Section
                     10(c) to  continue  such  contest,  Boston Gas shall not be
                     required to pay a Gross- Up Payment  until  there  occurs a
                     Final  Determination (as defined below) of the liability of
                     the Executive  for the tax and any interest,  penalties and
                     additions to tax asserted to be payable as a result of such
                     proposed adjustment. A "Final Determination" shall mean (A)
                     a decision, judgment, decree or other order by any court of
                     competent jurisdiction, which decision, judgment, decree or
                     other order has become final after all allowable appeals by
                     either  party to the action have been  exhausted,  the time
                     for filing such appeal has expired or the  Executive has no
                     right  under the terms  hereof to request an appeal,  (B) a
                     closing  agreement  entered into under  Section 7121 of the
                     Code or any  other  settlement  agreement  entered  into in
                     connection with an  administrative  or judicial  proceeding
                     and  with  the  consent  of  the  Executive,   or  (C)  the
                     expiration of the time for  instituting a claim for refund,
                     or if such a claim was filed,  the  expiration  of the time
                     for instituting suit with respect thereto.

                               (d) In  the  event  the  Executive  receives  any
                     refund  from the  Internal  Revenue  Service  or other  tax
                     authority on account of an  overpayment of Excise Tax, such
                     amount,  together  with that part of any  Gross-Up  Payment
                     attributable to such amount,  shall be promptly paid by the
                     Executive to Boston Gas.

           11.  SOURCE OF PAYMENTS.  Except as provided at Section 8 above,  all
payments  provided for under this  Agreement  shall be paid or provided from the
general assets of Boston Gas and its  subsidiaries  or affiliates (to the extent
not  provided by  insurance).  Boston Gas shall not be  required to  establish a
special or separate fund or other segregation of assets to assure such payments.
Nothing in this Section, however, shall be construed as restricting Boston Gas's
ability to establish or fund a so-called "rabbi trust" or similar arrangement to
help Boston Gas meet its liabilities hereunder,  provided that the establishment
or funding of such a trust or arrangement  does not by its terms or by operation
of law limit or purport to limit Boston Gas's liabilities hereunder or otherwise
adversely affect the Executive.

           12.  LITIGATION  EXPENSES.  In the event of any  litigation  or other
proceeding  between  Boston Gas or Eastern and the Executive with respect to the
subject matter of this Agreement and the  enforcement of rights asserted in good
faith  hereunder,  or, in the event of  termination  of  employment  pursuant to
Section 7(b) or Section 7(c) above,  with respect to any other  remuneration  or
benefits with respect to the Executive (including, without limitation,  payments
or benefits  with respect to the Executive  under any qualified or  nonqualified
pension or retirement agreement,  plan, policy, program or arrangement),  Boston
Gas shall  reimburse the  Executive for all costs and expenses  relating to such
litigation  or  other  proceeding,   including  reasonable  attorneys  fees  and
expenses,  promptly upon receipt of a written demand  therefor and regardless of
whether such litigation  results in any settlement or judgment or order in favor
of any party.


                                      -10-

<PAGE>



           Notwithstanding  any provision of Massachusetts  law to the contrary,
in no event shall the  Executive be required to reimburse  Boston Gas or Eastern
for  any of the  costs  and  expenses  relating  to  such  litigation  or  other
proceeding.

          13. INCOME TAX  WITHHOLDING.  Boston Gas and Eastern may withhold from
     any payments made under this  Agreement all federal,  state,  city or other
     taxes as shall be required  pursuant to any law or governmental  regulation
     or ruling.

           14. CONFIDENTIAL  INFORMATION.  The Executive agrees that,  following
any  termination of his  employment  under this  Agreement,  he will continue to
comply  with   Eastern's   policies  and   procedures   regarding   confidential
information,  as that term is  hereinafter  defined,  and will never directly or
indirectly use or disclose, except to the Executive's attorney or as required by
judicial or regulatory  process or order,  any  confidential  information  as so
defined.  For purposes of this paragraph,  the term  "confidential  information"
means any and all information  (including without limitation information related
to the  development  and  implementation  of business  strategy,  financial  and
operating forecasts,  business policies and practices, and all other information
related to the future  conduct of business)  (i) that the Executive has acquired
in connection with his employment with Eastern and its subsidiaries,.  (ii) that
is not  generally  known  or  available  to  others  with  whom  Eastern  or its
subsidiaries do, or plan to, compete or do business,  and (iii) that pertains to
the  business  of,  or  belongs  to,  Eastern  or its  subsidiaries  or a person
described in clause (ii).

           The  Executive  acknowledges  and agrees that,  were he to breach the
provisions of this Section 14, the harm to Eastern and its subsidiaries would be
irreparable.  The Executive  therefore agrees that in the event of such a breach
or threatened breach, Eastern or its subsidiaries shall have the right to obtain
preliminary  and permanent  injunctive  relief  against any such breach  without
having to post bond.  Nothing herein shall prohibit  Eastern or its subsidiaries
from  seeking  damages  for a breach by the  Executive  of this  Section 14, but
neither  Eastern nor any other person  shall  withhold or offset any payments or
benefits  due or owing to the  Executive  under the terms of this  Agreement  or
otherwise (including,  without limitation,  payments or benefits with respect to
the  Executive  under  any  qualified  or  nonqualified  pension  or  retirement
agreement,  plan,  policy,  program or  arrangement),  and all such payments and
benefits shall be promptly paid or provided to the Executive in accordance  with
the terms of this Agreement (or such other agreement,  plan, policy,  program or
arrangement,  as the case may be)  without  regard to any  breach or  alleged or
threatened breach by Executive of any provision of this Section 14.

           15. ENTIRE UNDERSTANDING;  OTHER SEVERANCE BENEFITS. If the severance
pay provisions of Section 5.1 and Section 5.3 of Eastern's  Employee  Salary and
Benefits  Protection  Plan as amended and  restated  September 1, 1999 (the "COC
Severance Plan") (as such provisions would have applied to the Executive had the
Executive  been eligible to  participate  in the COC Severance  Plan) would have
yielded a larger severance pay amount than that determined under paragraphs (i),
(ii)  and  (iii) of  Section  9(a) of this  Agreement,  the  Executive  shall be
entitled under Section 9(a) hereof to such greater  severance pay amount in lieu
of the

                                      -11-

<PAGE>



formula amounts determined under Section 9(a)(i), (ii) and (iii); provided, that
such  severance  pay shall  continue  to be subject  to the other  terms of this
Agreement.  If the benefits  continuation  provisions  of Section 5.2 of the COC
Severance Plan (as such  provisions  would have applied to the Executive and the
Executive's  family had the Executive been eligible to  participate  in` the COC
Severance  Plan) would have  provided for  continuation  of benefits at least as
good as those provided under this Agreement but for a longer period of time, the
period  described  in Section 9(b) of this  Agreement  for the  continuation  of
benefits shall be deemed  modified to provide for such longer period of benefits
continuation.  Subject to the  foregoing,  this  Agreement  contains  the entire
understanding between Eastern,  Boston Gas and the Executive with respect to the
subject  matter  hereof and  supersedes  any prior  Change of Control or similar
severance  or  salary  continuation  agreement  between  Boston  Gas or  Eastern
(including  any of  Eastern's  subsidiaries  other  than  Boston  Gas)  and  the
Executive.

           16.  SEVERABILITY.  If,  for  any  reason,  any  one or  more  of the
provisions or part of a provision  contained in this Agreement  shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability  shall not affect any other provision or part of a provision
of this Agreement not held so invalid, illegal or unenforceable,  and each other
provision or part of a provision  shall to the full extent  consistent  with law
continue in full force and effect.

           17.  CONSOLIDATION,  MERGER  OR  SALE  OF  ASSETS.  Nothing  in  this
Agreement  shall preclude  Eastern or Boston Gas from  consolidating  or merging
into or with, or transferring all or substantially all of its assets to, another
person that assumes this  Agreement  and all  obligations  and  undertakings  of
Eastern  or Boston  Gas,  respectfully,  hereunder.  Upon such a  consolidation,
merger or transfer of assets and  assumption,  involving  Eastern or Boston Gas,
the terms  "Eastern" and "Boston Gas",  respectfully,  as used herein shall mean
such other person and this Agreement shall continue in full force and effect.

           18.  SURVIVAL OF  OBLIGATIONS.  The obligations of Eastern and Boston
Gas under this Agreement  shall survive the  termination  for any reason of this
Agreement  (whether  such  termination  is by  Eastern,  by Boston  Gas,  by the
Executive, upon the expiration of this Agreement or otherwise).

           19. NOTICES. All notices,  requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given if delivered or mailed,  registered or  certified,  postage
prepaid with return receipt requested, as follows:

                     (a)       To Eastern:

                               Eastern Enterprises
                               9 Riverside Road
                               Weston, MA 02493

                                      -12-

<PAGE>



                            Attention: Legal Department

                     (b)    To Boston Gas:

                            Boston Gas Company
                            One Beacon Street
                            Boston, MA 02108
                            Attention: Legal Department (with a copy to Eastern)

                     (c)    To the Executive:

                            Joseph F. Bodanza
                            376 Commercial Street, #2G
                            Boston, MA 02109

or to such other  address as either  party shall have  previously  specified  in
writing to the other pursuant to this Section 19.

           20. NO  ATTACHMENT.  Except as  required  by law, no right to receive
payments under this  Agreement  shall be subject to  anticipation,  commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution,  attachment,  levy or similar  process or  assignment by operation of
law, and any attempt, voluntary or involuntary,  to effect any such action shall
be null, void and of no effect.

          21. BINDING  AGREEMENT.  This Agreement shall be binding upon (subject
     to Section 25(a)) and shall inure to the benefit of the Executive,  Eastern
     and Boston Gas and their respective successors and assigns.

           22. MODIFICATION AND WAIVER.

                     (a)  Prior to the  Effective  Date  this  Agreement  may be
           modified,  amended or terminated by the Board of Trustees of Eastern.
           From and after the Effective Date this Agreement may not be modified,
           amended or terminated  except by an  instrument in writing  signed by
           the parties hereto.

                     (b) No term or condition of this Agreement  shall be deemed
           to have been  waived,  nor shall  there be any  estoppel  against the
           enforcement  of any  provision  of this  Agreement  except by written
           instrument  signed by the party charged with such waiver or estoppel.
           No such written  waiver shall be deemed a  continuing  waiver  unless
           specifically stated therein,  and each such waiver shall operate only
           as to the specific term or condition  waived and shall not constitute
           a waiver of such term or  condition  for the  future or as to any act
           other than that specifically waived.


                                      -13-

<PAGE>


          23. HEADINGS OF NO EFFECT.  The paragraph  headings  contained in this
     Agreement are included solely for convenience of reference and shall not in
     any way affect the meaning or  interpretation  of any of the  provisions of
     this Agreement.

          24.  GOVERNING LAW. This  Agreement and its validity,  interpretation,
     performance  and  enforcement   shall  be  governed  by  the  laws  of  The
     Commonwealth of  Massachusetts,  without giving effect to the choice of law
     provisions in effect in such State.

           25. MISCELLANEOUS.

                     (a) Eastern  shall be liable  under this  Agreement  solely
           with respect to its obligations under Sections 5, 8, 9 and 21 hereof.

                     (b)  Reference is hereby made to the  declaration  of trust
           establishing  Eastern  Enterprises dated July 18, 1929, as amended, a
           copy of which is on file in the office of the  Secretary  of State of
           The  Commonwealth of  Massachusetts.  The name "Eastern  Enterprises"
           refers to the  trustees  under said  declaration  as trustees and not
           personally, and no trustee, shareholder,  officer or agent of Eastern
           Enterprises  shall be held to any personal  liability  in  connection
           with the affairs of said  Eastern  Enterprises,  but the trust estate
           only is liable.

           IN WITNESS WHEREOF, Eastern and Boston Gas have caused this Agreement
to be executed by their respective  officers thereunto duly authorized,  and the
Executive has signed this Agreement, all as of the date first above written.


                                               EASTERN ENTERPRISES

                                               By:
                                               -----------------------------


                                               BOSTON GAS COMPANY

                                               By:
                                               -----------------------------


                                               -----------------------------
                                               Joseph F. Bodanza


                                      -14-