Document:

<PAGE>

                                                                  Exhibit 10(aa)

                      NEW ENGLAND ELECTRIC SYSTEM COMPANIES

                    LIFE INSURANCE PROGRAM FOR EXECUTIVES II

                                       FOR

                                 ANTHONY C. PINI

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Section 1.  The Program..................................................     1
Section 2.  Prior Insurance Program......................................     2
Section 3.  Vesting and Forfeiture.......................................     2
Section 4.  Life Insurance Policy........................................     2
Section 5.  Death Benefit................................................     4
Section 6.  Termination of Agreement.....................................     4
Section 7.  Benefits Upon Termination of Employment During the
            Executive Lifetime...........................................     5
Section 8.  Policy Premiums..............................................     6
Section 9.  Return of Premiums...........................................     7
Section 10. Withdrawals from Policy; Release of Assignment...............     7
Section 11. Liability and limitation of obligation.......................     7
Section 12. Named Fiduciary, Determination of Benefits, Claims Procedure
            and Administration ..........................................     8
Section 13. Notices......................................................    10
Section 14. Binding Effect...............................................    11
Section 15. Governing Law................................................    11
Section 16. Further Documentation........................................    11
Section 17. Amendments and Transfers Within the New England Electric
            System Companies.............................................    11
Section 18. Interpretation of Agreement..................................    11
Section 19. No Implied Right to Employment...............................    12
</TABLE>

<PAGE>

                              COLLATERAL ASSIGNMENT

                            LIFE INSURANCE PROGRAM II

     Agreement entered into as of the 1st day of July, 1995, between
Massachusetts Electric Company, a Massachusetts corporation (the Company), and
Anthony C. Pini (the Executive).

     Section 1. The Program

     The program provides the Executive death benefits and post-retirement
ownership of the cash assets of the related policy. The program is designed with
a goal of two times the Executive's base pay (rounded up to the nearest even
whole thousand) at the time of death (or if the Executive has terminated
employment, two times final base pay, reduced to 1 1/2 times final base pay on
the first anniversary of his termination of employment and to one times final
base pay on the second anniversary) (the Target Benefit)). During employment,
the first $50,000 of the coverage is to be provided by the Company's group term
life insurance policy.

     For the purposes of this Agreement, "annual base pay" means the annualized
compensation being paid to the Executive on the day of determination (or, if
greater, the highest compensation paid to the Executive during any 12-month
period of employment), including compensation deferred under other plans but
excluding bonuses (including NEES Goals) and contributions made by the Company
to or under any form of employee benefit program and employer contributions
under the New England Electric System Companies Incentive Thrift Plan, and
"final annual base pay" means the Executive's annualized base pay on the last
day of employment (or, if greater, the highest compensation paid to the
Executive during any 12-month period of employment).

<PAGE>

                                        2

     Section 2. Prior Insurance Program

     The Executive hereby waives the benefits under the Company's group
term-life insurance policy, to the extent that the benefit provided to the
Executive's beneficiaries, in accordance with Section 5, from the Policy (as
hereinafter defined) equals the Target Benefit. This waiver does not extend to
any optional benefits under the group term-life policy. To the extent that such
waiver is ineffective, the amount of the death benefit provided under the Policy
and otherwise payable hereunder to the beneficiary or beneficiaries designated
by the Executive shall be correspondingly reduced and the amount payable to the
Company shall be correspondingly increased.

     Section 3. Vesting and Forfeiture

     Subject to the provisions of Section 6, the Executive is 100% vested in his
benefits under this Program.

     Section 4. Life Insurance Policy

     One or more split-dollar life insurance policies listed in Exhibit A hereto
(the Policy) have been or will be purchased on the life of the Executive by the
Company. The issuer or issuers of the Policy are hereinafter referred to as the
Insurer. Purchase of insurance policies either now or at later dates may require
proof of insurability at that time.

     To the extent that necessary insurance policies are not reasonably
available at a later date, benefits will be provided under the Company's group
term-life insurance policy so that the total death benefit to the Executive's
beneficiaries during his employment is twice base pay.

<PAGE>

                                        3

     (a) Interest in the Policy

     The Executive shall be the sole owner of the Policy and may exercise all
ownership rights granted to the owner thereof by the terms of the Policy, except
as may otherwise be provided herein.

     Except as otherwise provided herein, the Executive shall not sell, assign,
transfer, borrow against, surrender, or cancel the Policy, change the
beneficiary designation provision, or terminate the dividend election without
the express written consent of the Company.

     (b) Collateral Assignment

     To secure the right of the Company to the Excess Value and/or the Company's
Cost (both as hereafter defined), the Executive will, contemporaneously
herewith, assign the Policy to the Company as collateral, using a form
substantially similar to that attached hereto as Exhibit B. The collateral
assignment of the Policy to the Company hereunder shall not be terminated,
altered, or amended by the Executive, without the express written consent of the
Company.

     (c) Assignment of Executive's Interest

     The Executive shall have the right to make an absolute assignment of his
entire interest, or any portion thereof, in the Policy at any time to any person
or persons, subject to the collateral assignment of the policy to the Company
pursuant to subsection (b) hereof. Upon delivery of a signed copy of such
assignment to the Company, all, or such portion, of the rights, obligations, and
duties of the Executive thereunder (subject to the collateral assignment of the
Company) and hereunder shall pass to and be binding upon such assignee

<PAGE>

                                        4

(including the right to make further assignments) and the Executive shall have
no further interest whatsoever in the Policy, or such portions.

     (d) Company's Cost

     For the purposes of this Agreement, the Company's Cost means the amount of
the premiums on the Policy paid by it hereunder, less any withdrawals by the
Company from the Policy in accordance with Section 10.

     (e) Dividends

     Any dividend declared on the Policy shall be applied to purchase paid-up
additional insurance on the life of the Executive. The dividend election
provisions of the Policy shall conform to the provisions hereof.

     Section 5. Death Benefit

     Upon the death of the Executive, the beneficiary or beneficiaries
designated by the Executive shall be paid directly, in the manner and in the
amount or amounts provided in the beneficiary designation provision of the
Policy, a death benefit equal to the smaller of (a) the death benefit payable
under the Policy or (b) the Target Benefit. After such payment to such
beneficiary, the balance, if any, of the Policy death benefit (the Excess Value)
shall be paid to the Company.

     Section 6. Termination of Agreement

     (a) This Agreement shall terminate during the Executive's lifetime, without
notice, upon the occurrence of any of the following events:

<PAGE>

                                        5

          (i)  total cessation of the Company's business;

          (ii) bankruptcy, receivership, or dissolution of the Company;

          (iii) termination for cause of the Executive's employment by the
               Company or by any direct or indirect subsidiary of the New
               England Electric System or

          (iv) payment of the Company's Cost by the Executive to the Company.

     (b) After termination of this Agreement under this section 6, the Executive
will not be permitted to re-enroll in the program. Upon such termination, the
Company may immediately withdraw its Cost from the Policy. The Executive will
receive no life insurance coverage under the New England Electric System
companies' group life insurance plan.

     Section 7. Benefits Upon Termination of Employment During the Executive's
          Lifetime.

     (a) If the Executive has Retired from the Company before the tenth
anniversary of a Policy, the Company will continue to pay premiums on that
Policy in accordance with section 8 until such tenth anniversary. On or after
such tenth anniversary, the Company may withdraw from the Policy amounts equal
to the Company's Cost. The Company may delay withdrawals from the Policy in
order to preserve the Policy's tax treatment.

          For the purposes of this Agreement, the Executive will be considered
to have Retired from the Company if the termination of employment occurs (i) at
age 61 or older with a minimum of 10 years of service (as defined in Final
Average Pay Pension Plan I) or (ii) at age 55 or older with age plus years of
service equal to at least 85.

<PAGE>

                                        6

     (b) If the Executive terminated employment but has not Retired from the
Company before the tenth anniversary of the first Policy, the Company may
immediately withdraw its Cost from the Policy. The Executive will receive no
life insurance coverage under the New England Electric System companies' group
life insurance plan.

     (c) If the Executive terminated employment but has not Retired from the
Company after the tenth anniversary of the first Policy, the Company may
withdraw its Cost from the Policy as soon as it may be withdrawn without causing
the Policy to lose its tax treatment as life insurance. The Executive will
receive no life insurance coverage under the New England Electric System
companies' group life insurance plan.

     Section 8. Policy Permiums

     During the Executive's employment and as provided in subsection 7(a), the
Company shall promptly pay all premiums on the Policy when due until the Policy
can be kept in force with no future premiums due based upon the then current
crediting of the Policy.

     The Company shall bill the Executive for an annual contribution to the
policy premium, which contribution shall be equal to the value, for Federal
income tax purposes, of the "economic benefit" of the life insurance protection
the Executive then enjoys. The Executive shall transfer the contribution to the
Company within thirty days of the bill. The Company will reimburse the Executive
for such contribution and for the related federal and state taxes. This
reimbursement is not a part of the Company's Cost.

     If the Executive fails to make such timely payment, the Company shall
report the "economic benefit" of the life insurance protection as taxable income
to the Executive for

<PAGE>

                                        7

the period, and no additional reimbursement will be made to the Executive until
payment has been made.

     Section 9. Return of Premiums

     Notwithstanding any provision hereof to the contrary, in the event that,
for any reason whatsoever, no death benefit is payable under the Policy upon the
death of the Executive and in lieu thereof the insurer refunds all or any part
of the premiums paid for the Policy, the Company and the Executive's beneficiary
or beneficiaries shall have the unqualified right to share such premiums based
on the respective cumulative contributions thereto.

     Section 10. Withdrawals from Policy; Release of Assignment

     While the Executive is employed, if no additional premiums are required to
be paid under a Policy to maintain the death benefit to the Executive's
beneficiaries, the Company may withdraw its Cost from that Policy at a time when
such withdrawal will not cause the Policy to be terminated or to lose its tax
treatment as life insurance.

     After the Company has withdrawn from the Policy amounts equal in full to
the Company's Cost (whether under section 6, 7, or 10), the Company will release
the collateral assignments of the Policy to the Executive.

     Section 11. Liability and Limitation of Obligation

     The Company and the Insurer believe the assumptions used to determine the
amount of insurance purchased are reasonable. However, the Executive recognizes
that the goals of the Agreement may not be realized and there is no guaranty
that the Target Benefit will actually be provided by the Policy and/or that
additional premiums may not be required to

<PAGE>

                                        8

keep the Policy from lapsing or to provide the Target Benefit. The Executive
also recognizes that changes in the Internal Revenue Code or rulings or
regulations thereunder could increase his tax liabilities or reduce his
benefits.

     The Company has no responsibility, liability, or obligation for the
benefits provided the Executive from the Policy.

     The Company may, upon 30 days' written notice to the Executive, limit its
obligations hereunder to purchase, pay premiums on, or otherwise provide life
insurance policies beyond the total death benefit, including all riders then in
force, and all references herein to the annual base pay or final annual base pay
of the Executive shall mean annual base pay at the time of such written
notification.

     The Insurer shall have no liability except as set forth in the Policy and
in any beneficiary designation and in any optional method of settlement election
filed with it. The Insurer shall not be bound to inquire into or take notice of
any of the covenants herein contained as to the Policy. In case of the
Executive's death, the Insurer shall be discharged from all liability on payment
of the proceeds in accordance with the Policy's provision, and any beneficiary
designation and any optional method of settlement election filed with it without
regard to this Agreement or any amendment thereof.

     Section 12. Named Fiduciary, Determination of Benefits, Claims Procedure
          and Administration

     (a) The Company is hereby designated as the named fiduciary under this
Agreement. The named fiduciary shall have authority to control and manage the
operation and administration of this Agreement, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with the
objectives of this Agreement.

<PAGE>

                                        9

     (b) (i) Claim

          A person who believes that he is being denied a benefit to which he is
entitled under this Agreement (the Claimant) may file a written request for such
benefit with the Company, setting forth his claim. The request must be addressed
to the President of the Company at its then principal place of business.

          (ii) Claim Decision

          Upon receipt of a claim, the Company shall advise the Claimant that a
reply will be forthcoming within ninety days and shall, in fact, deliver such
reply within such period. The Company may, however, extend the reply period for
an additional ninety days for reasonable cause.

          If the claim is denied in whole or in part, the Company shall adopt a
written opinion, using language calculated to be understood by the Claimant,
setting forth: (a) the specific reason or reasons for such denial; (b) the
specific reference to pertinent provisions of this Agreement on which such
denial is based; (c) a description of any additional material or information
necessary for the Claimant to perfect his claim and an explanation why such
material or such information is necessary; (d) appropriate information as to the
steps to be taken if the Claimant wishes to submit the claim for review; and (e)
the time limits for requesting a review under subsection (iii) and for review
under subsection (iv) hereof.

          (iii) Request for Review

          Within sixty days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Benefits
Appeal Committee (as defined in the Final Average Pay Pension Plan I) review the
determination of the

<PAGE>

                                       10

Company. Such request must be addressed to the Secretary of the Committee, at
its then principal place of business. The Claimant or his duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Committee. If the
Claimant does not request a review of the Company's determination by the
Committee within such sixty day period, he shall be barred and estopped from
challenging the Company's determination.

          (iv) Review of Decision

          Within sixty days after the Secretary's receipt of a request for
review, the Committee will review the Company's determination. After considering
all materials presented by the Claimant, the Committee will render an opinion,
setting forth the specific reasons for the decision and containing specific
references to the pertinent provisions of this Agreement on which the decision
is based. If special circumstances require that the sixty day time period be
extended, the Secretary will so notify the Claimant and the Committee will
render the decision as soon as possible, but no later than one hundred twenty
days after receipt of the request for review.

     Section 13. Notices

     Any notice, consent, or demand required or permitted to be given under the
provisions of this Agreement shall be in writing, and shall be signed by the
party giving or making the same. If such notice, consent, or demand is mailed to
a party hereto, it shall be sent to United States certified mail, postage
prepaid, addressed to such party's last known address as shown on the records of
the Company. The date of such mailing shall be deemed the date of notice,
consent, or demand.

<PAGE>

                                       11

     Section 14. Binding Effect

     This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns, and the Executive, and the Executive's
successors, assigns, heirs, executors, administrators, and beneficiaries.

     Section 15. Governing Law

     This Agreement shall be governed by the laws of Massachusetts.

     Section 16. Further Documentation

     The parties hereto agree to execute any documents which may be necessary or
proper in the carrying out of the purpose and intent of this Agreement.

     Section 17. Amendments and Transfers Within the New England Electric
          System Companies

     This Agreement may be amended or altered in any of its provisions, and such
changes shall become effective when reduced to writing and signed by the parties
hereto.

     The Company may, without any consent of the Insurer or the Executive,
assign or reassign all of its rights and obligations hereunder to such other
direct or indirect subsidiary of the New England Electric System by which the
Executive may from time to time be employed.

     Section 18. Interpretation of Agreement

     Where appropriate in this Agreement, words used in the singular shall
include the plural and words used in the masculine shall include the feminine
and vice versa. The

<PAGE>

                                       12

headings of sections and subsections of this Agreement are for convenience of
reference only.

     Section 19. No Implied Right to Employment

     Neither this Agreement nor the payment of any premiums hereunder by the
Company shall be construed to create any obligation to give the Executive any
right to continue employment.

                                        /s/ Anthony C. Pini
                                        ----------------------------------------
                                        Anthony C. Pini

                                        Massachusetts Electric Company

                                        By: /s/ Illegible
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

                                       13

                                    EXHIBIT A

                               Insurance Policies

<PAGE>

                                       14

                                    EXHIBIT B

                       SPLIT-DOLLAR COLLATERAL ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned owner (hereafter the Assignor) assigns,
transfers, and sets over to Massachusetts Electric Company (Assignee), its
successors and assigns, certain rights in and to policy number _________________
(the Policy), and any and all supplemental benefit riders or agreements issued
under the Policy, issued by Metropolitan Life Insurance Company (the Insurer),
subject to all the terms and conditions of the Policy and this Assignment and to
all superior liens, if any, which the Insurer or any prior Assignee may have
against the Policy. The Assignor by this instrument and the Assignee by
acceptance of the Assignment jointly and severally agree to the conditions and
provisions hereof. This Assignment is made and the Policy is to be held as
collateral security for any and all liabilities of the Assignor to the Assignee,
either now existing or that may hereafter arise between the Assignor or any
successors or assigns and the Assignee under the New England Electric System
Companies Life Insurance Program for Executives II, dated JULY 1, 1995, with
regard to the Policy.

     1.   (a)  It is expressly agreed that the Assignee shall have the following
               rights in the Policy:

               (i)  the right to make and receive withdrawals from the Policy
                    (from the insurer or otherwise), to the extent of the
                    aggregate premiums paid by the Assignee on the Policy;

               (ii) the right to release this Assignment to the Assignor or his
                    assigns;

<PAGE>

                                       15

               (iii) the right to surrender the Policy and to receive the Policy
                    cash value and any dividend credits outstanding of the
                    excess over the Target Benefit (as defined in the Program);
                    and

               (iv) the right to receive from the death proceeds of the Policy,
                    and to elect an income settlement option with respect
                    thereto, an amount equal to the excess over the Target
                    Benefit (as defined in the Program).

          (b)  Except as provided in Paragraph (a) above, all other rights in
               the Policy, including but not limited to the right to designate
               and change the beneficiary of the Policy and the right to make
               loans against or withdrawals from the Policy and to receive any
               cash values and dividends credits outstanding in excess of
               aggregate premiums paid by the Assignee on the Policy, are
               expressly reserved to the Assignor and are, therefore, excluded
               from this Assignment.

          (c)  For purposes of Paragraphs (a) and (b) above, the signature of
               either the Assignor or the Assignee shall be adequate. Both the
               Assignor and the Assignee acknowledge that, between themselves,
               they are bound by the limitations of this Assignment and that the
               Insurer will recognize the signature of either.

     2. For purposes of this Assignment, aggregate premiums paid by the Assignee
on the Policy shall exclude premiums for any extra benefit riders or agreements
issues under the Policy.

<PAGE>

                                       16

     3. All provisions of this Assignment shall be binding upon the successors,
assigns, heirs, executors, administrators, or beneficiaries of the Assignor.

     4. All Policy options and designations in effect as of the date of this
Assignment shall remain in effect unless specifically changed by this Assignment
or by action taken thereafter consistent with this Assignment.

     5. The Insurer is hereby authorized to recognize the Assignee's claim of
right hereunder without investigating the validity or amount thereof, the giving
of any notice, or the existence or amount of any liabilities of the Assignor to
the Assignee. Payment by the Insurer of any or all death proceeds of the Policy
to the Assignee in reliance upon an affidavit of any officer of the Company as
to the share of death proceeds due it shall be a full discharge of the Insurer
for such share and shall be binding on all parties claiming any interest under
the Policy.

Signed at   WESTBORO, MA   on 9/6/95
          (City and State)   (date)

/s/ Illegible                           /s/ Illegible
-------------------------------------   ----------------------------------------
Witness                                 Owner

<PAGE>

                                       17

Accepted And Agreed To:                 Massachusetts Electric Company

/s/ Illegible                           BY: /s/ Illegible
-------------------------------------       ------------------------------------
Witness                                 Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

THE INSURER HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THIS COLLATERAL ASSIGNMENT
FORM.

                                        Insurer

Date:                                   By:
      -------------------------------       ------------------------------------

Recorded and Filed at the Office of Metropolitan

     The company assumes no obligation as to the validity and sufficiency of
this agreement and does not pass upon its legality.

on OCT 18 1995                          /s/ Joseph A. Reali
                                        ----------------------------------------
                                        Joseph A. Reali
                                        Vice-President and Secretary<PAGE>

                                                                  Exhibit 10(bb)

                                 FIRST AMENDMENT
                                     TO THE
                          EASTERN UTILITIES ASSOCIATES
                               KEY EXECUTIVE PLAN

     WHEREAS, Eastern Utilities Associates (the "Association") previously
adopted the Eastern Utilities Associates Key Executive Plan (the "Plan")
effective July 1984;

     WHEREAS, the Association amended and restated the Plan effective January 1,
1995;

     WHEREAS, the Association has resolved to enhance the benefits for Donald G.
Pardus and John R. Stevens; and

     WHEREAS, the Association has reserved the right to amend the Plan from time
to time under Section 10 of the Plan;

     NOW, THEREFORE, in accordance with and pursuant to the foregoing, the Plan
is amended, effective January 1,1999, as follows:

1.   Section 4(b) is hereby amended by deleting the same in its entirety and by
     substituting therefore the following:

     "The Supplemental Pension Benefit provided by this Plan shall consist of
     the monthly payment of twenty-five percent of the Key Executive's Salary to
     the Key Executive for the fifteen year period beginning on the first day of
     the month following the termination of Key Executive's employment with the
     Association; providing, however, that the Supplemental Pension Benefit
     payment period shall be twenty years instead of fifteen years in the case
     of Donald G. Pardus and John R. Stevens.

2.   Section 8(b) is hereby amended by deleting the same in its entirety and by
     substituting therefore the following:

     "Notwithstanding anything to the contrary in Section 8(a) above, the
     benefits payable under this Plan shall be offset by the excess cash
     surrender value or death benefits in any insurance policy or policies owned
     by the Key Executive over the amount payable to the Association (or any of
     its affiliates) under any split-dollar insurance agreement between the
     Association (or any of its affiliates) and the Key Executive, after such
     excess cash value or death benefits have been further reduced by any
     amounts used to offset benefits due under the Supplemental Retirement Plan
     for Certain Officers of Eastern Utilities Association and Its Affiliates.
     In determining the benefits that could be paid with such excess cash value,
     (i) the amount of excess cash surrender value under this paragraph (b)

<PAGE>

     shall be determined effective as of the date that the split-dollar
     insurance arrangement between the participant and EUA Service Corporation
     terminates; and (ii) discounting for present value shall be performed using
     the 83-Group Annuity Mortality table and an interest rate equal to the
     then-prevailing 30 year Treasury Note rate on the date the participant
     commenced benefits under the Plan; provided, however, that the interest
     rate shall in no event exceed 5.19% when discounting the Plan benefits
     payable to Donald G. Pardus and John R. Stevens."

     IN WITNESS WHEREOF, EASTERN UTILITIES ASSOCIATES has caused this instrument
to be executed and delivered on its behalf by the undersigned on this 30th day
of September 1999.

ATTEST:                                 EASTERN UTILITIES ASSOCIATES

/s/ Illegible                           /s/ Paul J. Choquette, Jr.
-------------------------------------   ----------------------------------------
Secretary                               By: Paul J. Choquette, Jr.
                                        Its: Compensation and Nominating
                                             Committee Chairman

                                       -2-

<PAGE>

                               KEY EXECUTIVE PLAN

                                       OF

                          EASTERN UTILITIES ASSOCIATES

                 Amended and Restated Effective January 1, 1995

     The undersigned officer of Eastern Utilities Associates hereby certifies
that this is a true and complete copy of the Key Executive Plan of Eastern
Utilities Associates, amended and restated effective January 1, 1995 and as in
full force and effect on the date hereof.

<PAGE>

                               KEY EXECUTIVE PLAN

                                       OF

                          EASTERN UTILITIES ASSOCIATES

1.   PURPOSE

     The purpose of the Key Executive Plan of Eastern Utilities Associates (the
"Plan") is to advance the interests of Eastern Utilities Associates (the
"Association") by providing supplemental pension benefits and death benefit
coverage to those key employees who contribute significantly to the performance
of the Association and its affiliates (the "Key Executives"). The Plan is
intended to enhance the ability of the Association to attract and retain
individuals of superior managerial ability and to motivate such individuals to
exert their best efforts towards future progress and profitability of the
Association. This amendment and restatement of the Plan is intended to supersede
the Key Executive Insurance Plan as originally adopted by the Association in
July 1984.

2.   ADMINISTRATION AND INTERPRETATION

          (a) Administration. The Plan is administered by the Association. The
Association, from time to time, may adopt such rules and regulations as may be
necessary or desirable for the proper and efficient administration of the Plan
and as are consistent with the terms of the Plan, The Association, from time to
time, may also appoint such individuals to act as the Association's
representatives as the Association considers necessary or desirable for the
effective administration of the Plan. Any notice or document required to be
given or filed with the Association will be properly given or filed if delivered
or mailed, by certified or registered mail, postage prepaid, to the Association
at One Liberty Square, P.O. Box 2333, Boston, MA 02107.

          (b) Top Hat Exemption. It is the Association's intent that this Plan,
as set forth herein, constitute an unfunded plan for a "select group of
management and highly compensated employees" within the meaning of U.S.
Department of Labor Regulation Section 2520.104-23, and comply with the
applicable requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").

          (c) Interpretation. The interpretation and construction by the
Association of any provisions of the Plan and any determination by the
Association under any provision of the Plan shall be final and conclusive for
all purposes.

                                       -1-

<PAGE>

          (d) Limitation on Liability. Neither the Association, the trustees of
the Association (collectively, the "Trustees") or any individual authorized to
act on behalf of the Association shall be liable for any act, omission,
interpretation construction or determination made in connection with the Plan in
good faith. The Trustees and any individuals authorized to act on behalf of the
Association shall be entitled to indemnification and reimbursement by the
Association in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law and under any
liability insurance coverage that may be in effect from time to time.

3.   PARTICIPATION

          The individuals eligible to participate in this Plan shall be those
Key Executives as the Association from time to time shall determine. A list of
the Key Executives is attached hereto as Appendix A. The Association shall
update Exhibit A from time to time as the Association adds additional
individuals as Key Executives under the Plan.

4.   SUPPLEMENTAL PENSION BENEFIT

          (a) Eligibility. A Key Executive shall be entitled to receive payment
of a Supplemental Pension Benefit (as defined in Section 4(b) below) upon
Retirement (as defined in Section 4(c) below) or Termination without Cause (as
defined in Section 4(d) below).

          (b) Amount and Payment of Supplemental Pension Benefit. The
Supplemental Pension Benefit provided by this Plan shall consist of the monthly
payment of twenty-five percent of the Key Executive's Salary to the Key
Executive for the fifteen year period beginning on the first day of the month
following the termination of Key Executive's employment with the Association.
For purposes of this Plan, the Key Executive's Salary shall equal the highest
annualized rate of salary paid to the Key Executive at any time prior to the Key
Executive's sixty-fifth birthday.

          (c) Retirement. A Key Executive may retire at any time on or after the
first day of any month coincident with or next following the earlier of the date
on which the Key Executive (i) attains sixty-one years of age and completes ten
or more years of vesting service under the Employees' Retirement Plan of Eastern
Utilities Associates and its Affiliated Companies (the "Tax-Qualified Pension
Plan") or (ii) qualifies for Special Early Retirement under Section 4.4 of the
Tax-Qualified Pension Plan.

          (d) Termination without Cause. Termination without Cause shall consist
of any termination of the Key Executive's employment by the Association

                                       -2-

<PAGE>

without Cause (as defined in Section 6 below) and any termination of the Key
Executive's employment by the Key Executive under circumstances which entitle
the Key Executive to severance benefits under any plan, agreement or arrangement
with the Association or its affiliates.

5.   DEATH BENEFITS

          (a) Death Benefit After Commencement of the Supplemental Pension
Benefit. In the event of the Key Executive's death after the Supplemental
Pension Benefit has commenced but before the expiration of the fifteen year
payment period for such benefit, the Association shall continue to pay the Key
Executive's Supplemental Pension Benefit for the remainder of such period to the
Beneficiary (as defined in Section 5(c) below) of such Key Executive. If the
Beneficiary dies after the death of the Key Executive, but prior to receiving
the full death benefit under this Section 5(a), any remaining benefit shall be
paid to the Beneficiary's estate. No death benefit shall be payable under this
Plan in the event that the Key Executive dies after receiving his entire
Supplemental Pension Benefit.

          (b) Death Benefit Before Commencement of the Supplemental Pension
Benefit. In the event of the Key Executive's death before the Supplemental
Pension Benefit has commenced, the Association shall pay an amount equal to two
times the Key Executive's Salary in a single lump sum to the Beneficiary (as
defined in Section 5(c) below) of such executive. Such payment shall be made
within ninety days of the Key Executive's death. If the Beneficiary dies after
the death of the Key Executive, but prior to receiving the benefit under this
Section 5(b), such benefit shall be paid to the Beneficiary's estate.

          (c) Beneficiary. The Beneficiary shall mean the person or persons
designated by the Key Executive to receive a death benefit under the Plan in the
event of the Key Executive's death. If the Key Executive is married and
designates someone other than his legal spouse, the designation by such
executive must include the written consent of such spouse at the time the
designation is made in order to be valid. A former spouse's consent shall not be
binding on a subsequent spouse.

          A Beneficiary designation must be filed with the Association prior to
the Key Executive's death to be effective. In addition, the designation of a
Beneficiary will not be effective if the Beneficiary dies before the Key
Executive. If there is no Beneficiary designation in effect immediately prior to
the Key Executive's death, the Beneficiary shall be (i) the Key Executive's
surviving spouse, in the case of a married Key Executive, or (ii) the estate of
the Key Executive, in the case of a Key Executive who is not married.

                                       -3-

<PAGE>

6.   TERMINATION FOR CAUSE

     For purposes of this Plan, "Cause" shall exist for the Association to
terminate the Key Executive's employment if, and only if, the Key Executive has
committed theft, embezzlement or other serious and substantial crimes against
the Association. For purposes of this definition, no act or omission shall be
considered to have been "willful" unless it was not in good faith and the Key
Executive had knowledge at the time that the act or omission was not in the best
interests of the Association. The Key Executive must be notified in writing by
the Association of any termination of his employment for Cause, which writing
shall set forth in reasonable detail the facts and circumstances relied upon
therefor. The Key Executive will then have the right, within ten days of receipt
of such notice, to file a written request for review. In such case, the Key
Executive will be given the opportunity to be heard, personally or by counsel,
by the Trustees who are not then executives of the Association (the "Independent
Trustees") and a majority of the Independent Trustees must thereafter confirm
that such termination is for Cause. If the Independent Trustees do not provide
such confirmation, the termination shall be treated under this Plan as a
termination by the Association without Cause.

7.   FINANCING OF PLAN BENEFITS

     All amounts due and benefits provided under this Plan shall constitute a
general obligation of the Association. The Association shall not be required to
segregate on their books any amount to be used for the payment of benefits under
this Plan or maintain any life insurance policy on behalf of a Key Executive.

8.   EFFECT ON OTHER PLANS AND AGREEMENTS

          (a) Benefits provided to a Key Executive hereunder shall be in
addition to any benefits the Key Executive is entitled to under any employer
stock, deferred compensation, savings, retirement, severance or other employee
benefit plan, agreement, arrangement or understanding, including but not limited
to the Tax-Qualified Pension Plan, the Supplemental Retirement Plan for Certain
Officers of Eastern Utilities Associates and its Affiliated Companies, the
Retirement and Savings Restoration Plan for Members of The Employees' Retirement
Plan of Eastern Utilities Associates and its Affiliated Companies, the Eastern
Utilities Associates Employees' Savings Plan and any severance agreement with
the Association or its affiliates.

          (b) Notwithstanding anything to the contrary in Section 8(a) above,
the benefits payable under this Plan shall be offset by the excess cash value or
death benefits in any insurance policy or policies owned by the Key Executive
over the amount payable to the Association (or any of its affiliates) under any
split-dollar

                                       -4-

<PAGE>

insurance agreement between the Association (or any of its affiliates) and the
Key Executive, after such excess cash value or death benefits have been further
reduced by any amounts used to offset benefits due under the Supplemental
Retirement Plan for Certain Officers of Eastern Utilities Associates and Its
Affiliates. The value of benefits under such plans shall be determined on the
date the Key Executive or Beneficiary, as the case may be, would begin receiving
benefits under this Plan. To the extent that the benefit due under this Plan is
offset by excess amounts under such a split-dollar life insurance agreement, no
benefit shall be due under this Plan. For purposes of determining the benefit
which could be paid with such excess amounts, discounting shall be calculated
using the 83-Group Annuity Mortality table and an interest rate equal to the
then prevailing thirty year Treasury Note rate on the date such determination is
made.

9.   CLAIMS PROCEDURE

          The procedure for all claims under this Plan is set forth in Appendix
B hereto.

10.  AMENDMENT AND TERMINATION

          The Association reserves the right to amend or terminate the Plan in
whole or in part at any time. No amendment or termination of the Plan may
deprive any Key Executive without his consent of any benefit to which the Key
Executive was previously entitled to based on the Key Executive's Salary prior
to such amendment and termination. The Plan shall survive any acquisition by or
merger or consolidation into any other corporation. In the event of a
reorganization, consolidation, dissolution or merger of the Association, the
Plan shall be continued by the successor, and in such event the successor shall
be substituted for the Association and shall assume all of the Plan liabilities
and all of the powers, duties and responsibilities of the Association under the
Plan.

11.  MISCELLANEOUS

     a. No Employment Contract. Nothing contained in the Plan shall be construed
as conferring upon any Key Executive the right to continue in the employ of the
Association and its affiliates.

     b. Employment with Affiliates. Employment by the Association for the
purposes of this Plan shall be deemed to include employment by any affiliate or
subsidiary of the Association.

     c. Withholding. The Association will withhold from any amounts payable
under this Plan all federal, state, city and local taxes as shall be legally
required.

                                       -5-

<PAGE>

     d. Action by Association. Any action required of or permitted by the
Association under the Plan shall be by resolution of its Board of Trustees, by
resolution of a duly authorized committee of its Board of Trustees, or by a
person or persons authorized by resolutions of its Board of Trustees or such
committee.

     e. Nonassignability. A Key Executive shall not have the power or right to
sell, exchange, pledge, transfer, assign or encumber or dispose of such
executive's interest in any benefit under this Plan nor shall such interest be
subject to seizure for the payment of a Key Executive's debts, judgments,
alimony or separate maintenance or be transferable by operation of law in the
event of a Key Executive's bankruptcy or insolvency.

     f. Severability. In the event any provision of the Plan shall be held to
be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the Plan.

     g. Governing Law; Construction. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the Commonwealth of Massachusetts to the extent not preempted by ERISA.
Titles and headings to Sections herein are for purposes of reference only, and
shall in no way limit, define or otherwise affect the meaning or interpretation
of any provisions of the Plan.

     h. Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine and neuter genders, the plural shall include
the singular and the singular shall include the plural.

                                       -6-

<PAGE>

               APPENDIX A - KEY EXECUTIVES COVERED UNDER THE PLAN

     The following is a list of each Key Executive covered under the Plan as of
January 1, 1995:

                                       -7-

<PAGE>

                          APPENDIX B - CLAIMS PROCEDURE

     a. Filing of a Claim for Benefits. All claims for benefits under the Plan
shall be in writing and shall be submitted to the Treasurer of the Association
or such other person as the Association may designate from time to time for the
processing of claims. Upon receipt of a claim for benefits, the Association may
require the claimant to complete such forms and provide such additional
information as may be reasonably necessary to establish the claimant's right to
benefits under the Plan.

     b. Notification to Claimant of Decision. If a claim for benefits is wholly
or partially denied, the Association shall furnish to the claimant a notice of
the decision, meeting the requirements of paragraph (c) below, within ninety
(90) days after receipt of the claim. If the special circumstances require more
than ninety (90) days to process the claim, this period may be extended for up
to an additional ninety (90) days by giving written notice to the claimant
before the end of the initial 90-day period stating the special circumstances
requiring the extension and the date by which a final decision is expected.
Failure to provide a notice of decision in the time specified shall constitute a
denial of the claim and the claimant shall be entitled to require a review of
the denial under the review procedures specified in paragraphs (d) and (e)
below.

     c. Content of Notice. The notice to be provided to every claimant who is
denied a claim for benefits under paragraph (b) above shall be in writing and
shall set forth, in a manner calculated to be understood by the claimant, the
following:

     (1)  The specific reason or reasons for the denial;

     (2)  Specific reference to pertinent Plan provisions on which the denial is
          based;

     (3)  A description of any additional material or information necessary for
          the claimant to perfect the claim and an explanation of why such
          material or information is necessary; and

     (4)  An explanation of the Plan's claim review procedure describing the
          steps to be taken by a claimant who wishes to submit his or her claim
          for review.

     d. Review Procedure. The purpose of the review procedure set forth in this
paragraph and in paragraph (e) below is to provide a procedure by which a
claimant may have a reasonable opportunity to appeal a denial of a claim to the

                                       -8-

<PAGE>

Association for a full and fair review. To accomplish that purpose, the claimant
or his duly authorized representative:

          (1)  May request a review upon written application to the Association;

          (2)  May review pertinent Plan documents; and

          (3)  May submit issues and comments in writing.

     A claimant (or his duly authorized representative) shall request a review
by filing a written application for review with the Association at any time
within sixty (60) days after receipt by the claimant of written notice of the
denial of his or her claim.

     e. Decision on Review. The decision on review of a denied claim shall be
made in the following manner:

          (1)  The decision on review shall be made by the Association, which
               may in its discretion hold a hearing on the denied claim. The
               Association shall make its decision promptly, which shall
               ordinarily be not later than sixty (60) days after the Plan's
               receipt of the request for review, unless special circumstances
               (such as the need for holding a hearing) require an extension of
               time for processing. In that case a decision shall be rendered as
               soon as possible, but not later than one hundred twenty (120)
               days after receipt of the request for review. If an extension of
               time is required due to special circumstances, written notice of
               the extension shall be furnished to the claimant prior to the
               time the extension commences.

          (2)  The decision on review shall be in writing and shall include
               specific reasons for the decision, written in a manner calculated
               to be understood by the claimant, as well as specific references
               to the pertinent Plan provisions on which the decision is based.

          (3)  In the event the decision on review is not furnished to the
               claimant within the time required, the claim shall be deemed
               denied on review.

                                      -9-

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