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