<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
/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, 1998
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
Common Stock par value $.83 1/3 per share American Stock Exchange
- ----------------------------------------- -------------------------
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 (1,918,928) shares was $33,160,995 as of
December 14, 1998 of $17.281.
Indicate the number of shares outstanding of each of the
Registrant's classes of the latest practicable date.
Class Outstanding at December 14, 1998
- -------------------------------- --------------------------------
Common Stock, $.83 1/3 par value 2,193,912
Documents incorporated by reference:
Definitive Proxy Statement dated December 14, 1998 (Part III)
FALL RIVER GAS COMPANY
----------------------
<PAGE>
1998 FORM 10-K ANNUAL REPORT
Table of Contents
PART I
<TABLE>
Page
<S> <C>
Item 1. Business 3
General 3
Sales And Transportation 4
Rates and Regulation 6
Gas Supply And Storage 9
Competition 12
Employees 14
Item 2. Properties 14
Item 3. Legal Proceedings/Environmental Matters 15
Item 4. Submission of Matters to a Vote of Security Holders 16
PART II
Item 5. Market for the Registrant's Common Stock and 19
Related Stockholder Matters
Item 6. Selected Financial Data 20
Item 7. Management's Discussion and Analysis of Financial 21
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data 26-37
Item 9. Disagreements on Accounting and Financial Disclosure 36
PART III
Item 10. Directors and Executive Officers of the Registrant 36
Item 11. Executive Compensation 36
Item 12. Security Ownership of Certain Beneficial Owners and 36
Management
Item 13. Certain Relationships and Related Transactions 36
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports 37
of Form 8-K
</TABLE>
2
<PAGE>
PART I
ITEM 1. Business
General
The Company, organized as a Massachusetts corporation on September
25, 1880, is an investor-owned public utility company that sells, distributes
and transports natural gas (mixed with propane and liquefied natural gas
during winter months) at retail through a pipeline distribution system in the
City of Fall River and the towns of Somerset, Swansea and Westport, all
located within the southeastern portion of the Commonwealth of Massachusetts.
The principal markets served by the Company are (1) residential customers
using gas for heating, cooking and water heating, (2) industrial customers
using gas for processing items such as textile and metal goods, (3)
commercial customers using gas for cooking and heating, and (4) federal and
state housing projects using gas for heating, cooking and water heating.
The Company is engaged in only one line of business as described
above, and in activities incidental thereto. The Company has one wholly-owned
subsidiary, Fall River Gas Appliance Company, Inc., a Massachusetts
corporation, which rents water heaters and conversion burners (primarily for
residential use) in the Company's gas service area. Earnings from the
Appliance Company are primarily the result of revenues from the rental of
water heaters and conversion burners. As of September 30, 1998, the water
heater program had 14,453 rentals in service and the conversion burner
program had 4,558 rentals in service. The Appliance Company also derives
revenues from the sale of central heating and air-conditioning systems and
water heaters.
This Annual Report contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act, particularly in the "Management's Discussion and Analysis of
3
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Financial Condition and Results of Operations-Liquidity and Capital
Resources" and "Business" sections. Forward-looking statements are generally
identified with the following phrases: "believes", "expects", and
"anticipates", or words of similar import. Actual results could differ
materially from those expressed or implied in such forward-looking statements
as a result of the risk factors set forth below and other information
contained elsewhere in the Annual Report. In addition to the other
information contained and incorporated by reference in this Annual Report,
the following factors should be carefully considered in evaluating the
Company and its business.
Sales and Transportation
The Company's service territory is approximately 50 square miles in
the area surrounding the City of Fall River, Massachusetts. The Company had
an average of 47,544 sales customers during the twelve months ended September
30, 1998, of which approximately 94% were residential and 6% were commercial
and industrial. For the twelve months ended September 30, 1998 approximately
71% of the Company's gas operating revenues were derived from sales to
residential customers and 29% were derived from sales or transportation to
commercial and industrial customers. At September 30, 1998 the Company had 38
commercial and industrial transportation customers, which, in the aggregate,
accounted for 22% of the total gas carried over the Company's pipeline system
("throughput") and approximately 4% of gas operating revenues for the twelve
months ended September 30, 1998. The Company's tariffs currently do not allow
for residential transportation service. The Company's residential customers
take service only under firm sales tariffs and use natural gas for heating,
cooking and water heating, of which heating use constitutes most of such
consumption. Commercial customers (such as stores, restaurants and offices)
generally use gas for cooking and heating. Under currently effective tariffs,
commercial
4
<PAGE>
customers may take the Company's transportation service and purchase their
own gas. At this time, however, most commercial customers take firm sales
service from the Company. Industrial customers primarily use natural gas in
manufacturing and processing applications, such as for metal or textile
goods. Such firm industrial sales and transportation load is fairly level
throughout the year because generally a small part of those customers' usage
is for heating. Certain of the Company's industrial customers also take
interruptible service- either on a sales or transportation basis. These
customers are subject to service discontinuance on short notice as system
firm requirements may demand. Such customers generally use interruptible
natural gas service for boiler or plant heating and are able to change to an
alternate fuel when there are supply constraints (generally during the
heating season). Also, the prices of alternative sources of energy impact the
interruptible markets. Prices for these customers are based on the price of
the customers' alternative fuel.
The following table shows the Company's throughput during each of
the periods shown below in millions of cubic feet ("MMcf"):
5
<PAGE>
For the Fiscal
Year Ended
September 30,
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
-------------------------------
<S> <C> <C> <C> <C> <C>
Residential........................ 3,823 4,063 4,351 3,858 4,309
Commercial......................... 1,302 1,400 1,454 1,262 1,327
Industrial-firm.................... 261 383 418 443 850
Industrial-interruptible........... 32 15 71 430 317
Special Contracts.................. 0 0 498 441 78
Transportation..................... 1,523 1,701 1,101 818 716
----- ----- ----- ----- -----
TOTAL.............................. 6,941 7,562 7,893 7,252 7,597
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>
The Company's utility sales business is seasonal. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Seasonality".
Rates and Regulation
The Company is subject to the regulatory authority of the
Massachusetts Department of Telecommunications and Energy ("MDTE") with
respect to various matters, including the rates it charges for services,
financings, certain gas supply contracts and planning and safety matters.
The Company's principal firm sales rate classifications are
residential, commercial and industrial. The Company also provides
transportation service and, from time to time subject to specific MDTE
6
<PAGE>
approval, may provide service under special contracts. As of and after
October 1, 1997, the Company had no special contracts. The Company's rate
structure is based on the cost of providing service to each class of
customer. The Company's firm rate structure is based on generally seasonal
rates, whereby base rates are higher in the winter (November through April)
and lower in the summer (May through October). In addition to its base rates,
the Company has a seasonal cost of gas adjustment rate schedule (the "CGAC"),
which provides for the recovery from firm customers of all purchased gas
costs. Through the CGAC, the Company also imposes charges, subject to MDTE
approval, that are estimated semi-annually and include credits for gas
pipeline refunds and profit margins applicable to interruptible sales. Actual
gas costs are reconciled annually and any difference is included as an
adjustment in the calculation of the CGAC charges for the two subsequent
six-month periods. Charges under the CGAC rate schedule are added to the base
rates and are designed generally to recover higher costs in the winter and
refund lower gas costs in the summer. Pursuant to MDTE approvals, the Company
has collected all Federal Energy Regulatory Commission ("FERC") Order 636
transition costs billed to it.
On May 17, 1996 the Company filed revised tariffs with the MDTE to
unbundle its commercial and industrial service classes and to increase annual
revenues. By order dated October 16, 1996, the MDTE authorized the Company to
increase its rates for sales of gas effective December 1, 1996. The amount of
this increase on an annualized basis was $3,200,000. That MDTE order also
approved various changes to the Company's commercial and industrial rates to
facilitate the ability of customers on such rates to choose between
purchasing their gas supplies from the Company on a "bundled" basis or
purchasing from third parties and having the Company transport and deliver
such supplies. Such rates were also designed to make the Company economically
indifferent to a customer's choice of bundled
7
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sales service or transportation service. Such transition to local
distribution companies ("LDC's"), such as the Company, providing more service
by transporting, as opposed to selling, natural gas has continued. Over the
past year, LCDs, unregulated gas marketers, customer groups and the
Massachusetts Attorney General have worked together to address a variety of
issues relating to restructuring the natural gas industry. This effort, known
as the Massachusetts Gas Collaborative has led to further unbundling by
several Massachusetts LDCs and an agreement by such industry participants on
the basic rules governing the relationships and transactions between LDCs and
marketers. Such developments will likely lead to increased activity by
marketers and a greater percentage of LDCs' (including the Company's)
throughput being transportation rather than sales. Also the MDTE is currently
considering, and is expected soon to rule on, other issues that are central
to the structure and extent of competition within the natural gas industry in
Massachusetts. Specifically, the MDTE has undertaken to resolve the issue of
whether natural gas marketers or customers must accept portions of the LDC's
supply and transportation contract capacity rights when customers shift from
purchasing their gas supplies from LDCs to marketers. Other issues such as
LDCs auctioning their supply portfolio and exiting the business of selling
natural gas generally are also being considered.
The regulation of prices, terms and conditions of interstate
pipeline transportation and sales of natural gas is subject to the
jurisdiction of FERC. Although the Company is not under the direct
jurisdiction of FERC, the Company monitors, and periodically participates in,
proceedings before FERC that affect the Company's pipeline gas transporters,
the Company's operations and other matters pertinent to the Company's
business.
The Company 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
8
<PAGE>
of pipeline facilities. The enforcement of these standards has been delegated
to the MDTE.
Gas Supply and Storage
For several decades, until 1993, the Company primarily relied upon a
single supplier, Algonquin Gas Transmission Company ("Algonquin"), for its
gas supply needs. In its merchant role, Algonquin provided all the Company's
pipeline-supplied natural gas and storage, as well as transported such
pipeline and storage supplies to the Company's system. This supply paradigm
changed, however, in 1993 following FERC's issuance of Order 636. Order 636
was intended to encourage more competition among natural gas suppliers and
required interstate pipelines to unbundle or separate gas sales,
transportation and storage services. With the implementation of Order 636,
most pipeline companies (including Algonquin) discontinued their traditional
merchant function. Order 636 allowed pipeline companies to recover from their
customers, gas distribution companies such as the Company, costs associated
with the service unbundling and discontinuation of merchant service. This
resulted in each local distribution company becoming responsible for
obtaining all of its gas supply in the open market. While unbundling of these
services allows a local distribution company, such as the Company, more
flexibility in selecting and managing the type of services required to
provide its customers with the lowest possible priced gas while maintaining a
reliable gas supply, it also places additional responsibility on a
distribution company to obtain its natural gas supply in the open market on a
timely basis to fulfill commitments during peak demand periods.
With the advent of FERC Order 636, which was implemented on June 1,
1993, the Company assumed the full responsibility for aggregating, gathering
and arranging for the transmission of all required pipeline gas supplies to
its distribution system.
9
<PAGE>
The pipelines serving the Company, Algonquin and its affiliate Texas
Eastern Transmission Company ("Texas Eastern"), have made the required
compliance filings of tariff sheets and have fully implemented the provisions
of Order 636. The primary related issue of the billing by Algonquin and Texas
Eastern of transition costs has been resolved. The Company has made
appropriate arrangements for supplies to replace the sales service formerly
provided by Algonquin, or "Conversion Supplies".
The Company is required to obtain the approval of the MDTE for gas
supplies that are to be purchased over a period in excess of one year,
including any Conversion Supplies. Through its arrangements for the
Conversion Supplies, the Company has contracted for a "city gate management
service", which includes the provision of transportation, sales and storage
services by a third party. The Company has maintained reliability and
flexibility of service through this arrangement at a cost very competitive
with any other combination of unbundled services, but with much less
administrative risk and costs than would pertain to alternatives.
Approximately 90% of the Company's Conversion Supplies are provided under a
multi-year contract with Sempra Energy Trading (formerly CNG Energy Services
Corporation) ("SEMPRA") in quantities described below. Such contract remains
effective through May,2000. In June 1995, the MDTE approved the Company's
contract with SEMPRA. The Company also has short-term arrangements in place
for supplemental supplies for the 1998-1999 winter heating season. The
Company is currently analyzing the proper amount of such supply for future
years and plans to file a "Forecast and Supply Plan" with the MDTE, in the
near future, along with a request for approval thereof and certain
supplemental supplies.
The Company has contracted with SEMPRA for the purchase of all
pipeline commodity supplies for delivery to the Company's distribution
system, as well as storage services, management of Company-owned pipeline and
storage capacity and provision of significant amounts of back-up
10
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deliveries from a different gas production area. SEMPRA's firm, year-round
contract deliveries to the Company provide for an annual contract quantity of
5,219,255 Mcf delivered to the Company's facilities ("City Gate") on a
365-day basis and for deliveries into storage for the Company in an annual
amount of 841,355 Mcf. The maximum daily quantity ("MDQ") of City Gate
deliveries are 17,461 Mcf and the storage MDQ is 11,441 Mcf with 7,124 Mcf of
that total MDQ available for City Gate deliveries from November 16 through
April 15 as winter service supplies delivered via Algonquin.
The remainder of the MDQ is available each day of the year. All
commodity deliveries are priced at an index price reflective of the market
price. This type of pricing mechanism is designed to allow the Company to
obtain its gas supply at competitive prices. The SEMPRA supply contract
includes a mechanism whereby alternative market indices may be used in
conjunction with the futures market to fix the price of all or part of the
gas supplied if the market is such that additional price security is deemed
prudent. The SEMPRA contract commenced on June 1, 1993 and continues for 7
years.
In addition to the supplemental gas supplies described below, the
Company has requirements for a supply of approximately 1,479,000 Mcf during
the 1998-1999 heating season (November through March). To fulfill this
portion of its supply portfolio, the Company has obtained bids from several
potential suppliers and has entered into supply contracts for a term
encompassing that period with Distrigas of Massachusetts Corporation
("DOMAC") and Duke Energy Services.
The Company has a renewable one-year Firm Liquid Contract with DOMAC
for 200,000 MMBTU of liquefied natural gas ("LNG"), to be delivered by truck
to the Company's storage tank for use in "peak shaving" operations which
supplement pipeline volumes in peak requirement situations.
In addition to the LNG peak shaving facilities, the Company also
maintains storage and send out facilities for liquefied propane gas ("LPG")
11
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that provide an additional 88,000 MMBTU of sendout capacity when needed. The
Company's projected peak day requirements are 68,598 Mcf for the 1998-1999
heating season compared to the Company's peak day capacity of 70,000 Mcf.
The Company's peak day capacity is comprised of 29,859 Mcf of
pipeline deliveries pursuant to the SEMPRA contracts to the City Gate; 12,000
Mcf of DOMAC and Duke Energy gas, delivered by pipeline; vaporization of
Company stored liquid propane ("LP") into gas for injection (all by
Company-owned equipment) into the Company's distribution system in daily
amounts of about 10,000 Mcf; and vaporization of Company-stored LNG and
injection into the distribution system in daily amounts of about 20,000 Mcf.
Competition
Historically, the Company was not subject to competition from any
other gas public utility or gas marketers, but rather only from electricity,
oil, coal and other fuels for heating, water heating, cooking, air
conditioning and other purposes. As discussed above, however, the status of
competition among suppliers of natural gas service has significantly
increased with the level of marketer activity and tariff and regulatory
changes that facilitate competition. As a result, marketers are currently
selling natural gas to several large volume end-users to whom the Company has
historically made sales. Marketers can be expected to seek to provide an
increasing volume of sales services to end-users located within the Company's
service territory. At the current time, for all third-party commodity sales
that are occurring in the Company's service territory, the Company transports
those gas supplies within the Company's service territory and delivers the
supplies to the customers. The margins earned by the Company for such
transportation services are the same as margins earned on bundled
supply/delivery sales to the same end-users. Similar
12
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opportunities may exist for the Company to broker gas to new or existing
customers, whether or not located within the Company's service territory,
although the Company has not done so to date.
The principal considerations in the competition between the Company
and suppliers of other fuel or energy include price, equipment operational
efficiencies and ease of delivery. In addition, the type of equipment already
installed in the businesses and residences significantly affects the
customer's choice of fuel or energy source, and in some cases whether a
customer will choose to transport gas supplied by marketers, or to purchase
from the Company.
The price of natural gas currently compares favorably to electricity
but is generally higher than fuel oil, especially the grade of oil used by
certain commercial and industrial customers. As price is generally considered
the most significant factor affecting competition among the various energy
sources, there is always uncertainty in the continuing competition among such
energy sources, due to variations in price. Equipment operational
efficiencies and ease of delivery give natural gas advantages over oil and
also makes natural gas comparable to electricity in these respects. Because
of the environmental advantages associated with natural gas and the
efficiency and security of its supply, the demand for natural gas is expected
to continue to increase. Also, manufacturing, processing and other equipment
requirements are such that the use of gas rather than another fuel is
virtually a necessity for certain large commercial and industrial customers.
Heating, water heating and other domestic or commercial equipment is
generally designed for a particular energy source, and especially with
respect to heating equipment, the cost of conversion is a disincentive for
individuals and businesses to change their energy source. Currently, the
Company estimates that its gas heating saturation in areas in which it has
been in active service is approximately 89%.
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For all of these reasons, the Company believes that competition from
natural gas brokers and marketers, as well as from other fuel sources, will
intensify in the future.
Employees
The Company employed 166 full-time and 5 part-time employees as of
September 30, 1998. Of those employees, 74 are represented by the Utility
Workers Union of America, AFL-CIO, Local No. 431. The Company and its union
employees currently have a contract through April 30, 2002. The Company
believes that it enjoys generally good labor relations.
ITEM 2. Properties
The Company owns approximately 635 miles of distribution
mains, the major portion of which are constructed of coated steel, plastic or
cast iron. The Company owns and operates LP vaporizing equipment with an
approximate daily capacity of 14,000 Mcf and six LP storage tanks with a
total capacity of approximately 320,000 gallons. The Company also owns and
operates an LNG storage tank with a capacity of 45,000 barrels, equivalent to
approximately 157,000 Mcf of vaporized gas, and LNG vaporization equipment
with a daily vaporization rate of approximately 20,000 Mcf. The Company has
three gate stations receiving gas from the Algonquin pipeline. The Company
also owns four office and operations buildings in the service area.
All of the principal properties of the Company are owned in fee, subject
to the lien of the mortgage securing the Company's First Mortgage Bonds (the
"Indenture of First Mortgage"), and further subject to covenants,
restrictions, easements, leases, rights-of-way and other similar minor
encumbrances common to properties of comparable size and character, and none
of which, in the opinion of the Company's management, materially interferes
with the Company's use of its properties for the conduct of its
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business. The Company's gas mains are primarily located under public highways
and streets. Where they are under private property, the Company has obtained
easements or rights-of-way from the record holders of title. These easements
and rights are deemed by the Company to be adequate for the purpose for which
they are being used.
ITEM 3. Legal Proceedings/Environmental Matters
In January 1990 the Company received notification from the Massachusetts
Department of Environmental Protection ("DEP") that it is one of numerous
"potentially responsible parties" under Massachusetts laws in connection with
two sites in Massachusetts which were the subject of alleged releases of
hazardous materials, including lead, by a company which had purchased scrap
meters from various utilities including the Company. The Company has entered
into an agreement with a group of other potentially responsible parties (the
"Group") to respond jointly and to share costs associated with the DEP's
investigation. The Group negotiated an agreement with the DEP to conduct
limited response actions at one of the sites without admission of liability,
at a cost of about $100,000 to the entire Group, pursuant to which members of
the Group would be released from any further liability at the site. Remedial
actions were commenced September 5, 1995 and are substantially complete,
subject to final DEP approval of the action taken. The investigation of the
second site is in the early stages and potential remediation costs at the
second site and the Company's degree of responsibility have not been
determined. The Company does not expect its allocated share of costs of
response actions at the first site or of any response actions which it may
take or which may be required at the second site to be significant.
Although the Company is not involved in any material litigation at this
time, it may from time to time be involved in litigation in the ordinary
course of its business.
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ITEM 4. Submission of Matters To A Vote Of Security Holders
On February 10, 1998 the holders of the Company's Common
Shares approved an amendment to the Company's Articles of Organization that
increased the number of authorized Common Shares by 750,000 shares to
2,951,334. The purpose of such change was to replenish the Company's shares
available for issuance to the public, where the Company had recently
completed a secondary offering of 390,000 shares and issues shares on an
ongoing basis through its Common Share Owner Dividend Reinvestment and Stock
Purchase Plan.
16
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Additional Item - Executive Officers of the Registrant
Executive Officers:
Raymond H. Faxon*
Age 91, 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 60, 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 54, currently Senior Vice President and Treasurer
of the Registrant. His current business function is Chief Financial and
Accounting
17
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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 52, 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.
Wallace E. Fletcher
Age 65, 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
employment with the Registrant.
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.
18
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PART II
ITEM 5. Market For The Registrant's Common Stock And Related
Stock-Holders Matters
(a) Common Stock Quotations
October 31, 1997 - Present AMEX
Prior to October 31, 1997 OTC Market
3 Months
Ended 9/30/98 6/30/98 3/31/98 12/31/97 9/30/97 6/30/97 3/31/97 12/31/96
(See Note)
High 16-3/8 16-3/4 17-1/4 16-5/8 13-1/2 16 16-1/2 18-1/4
Low 14-3/8 14-1/4 14-7/8 13 12-3/4 13 16 16
National Quotation Bureau
Because of the infrequency of trading of the Registrant's Common Stock, such
quotations may reflect inter-dealer prices, not actual transactions.
(b) Number of Stockholders at September 30, 1998 is 819.
(c) Dividends:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C>
November 15, 1997 - $.24 November 15, 1996 - $.24
February 15, 1998 - .24 February 15, 1997 - .24
May 15, 1998 - .24 May 15, 1997 - .24
August 15, 1998 - .24 August 15, 1997 - .24
</TABLE>
As of September 30, 1998 the Registrant had retained earnings
totalling $10,672,783 of which $6,693,309 was restricted against payment of
cash dividends under the terms of the Registrant's Indenture of Trust.
ITEM 6. Selected Financial Data
The following table summarizes certain consolidated financial data
and is qualified in its entirety by the more detailed Consolidated Financial
Statements included herein.
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Selected Financial Data
Fall River Gas Company and Subsidiary
The following table summarizes certain consolidated financial data and
is qualified in its entirety by the more detailed Consolidated Financial
Statements included herein.
<TABLE>
<CAPTION>
Twelve Months ended September 30,
1998 1997 1996 1995 1994
----------- ----------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Assets (in thousands)
Utility plant-net................... $39,650 $39,340 $38,653 $36,209 $33,213
Non-utility plant-net............... 4,248 2,924 2,762 2,613 2,327
Current assets...................... 11,269 10,154 9,088 9,934 12,150
Other assets........................ 472 2,517 2,688 2,201 1,936
-------- ------- ------- ------- -------
Total......................... $55,639 $54,935 $53,191 $50,957 $49,626
-------- ------- ------- ------- -------
-------- ------- ------- ------- -------
Capitalization and liabilities
Capitalization
Common equity....................... $17,430 $12,618 $12,637 $12,922 $13,014
Long-term debt (less current
maturities)........................ 19,500 13,500 13,500 6,500 7,380
-------- ------- ------- ------- -------
Total.......................... 36,930 26,118 26,137 19,422 20,394
Current Liabilities................... 10,915 21,390 20,014 24,692 22,763
Other Liabilities..................... 7,794 7,427 7,040 6,843 6,469
-------- ------- ------- ------- -------
Total.......................... $55,639 $54,935 $53,191 $50,957 $49,626
-------- ------- ------- ------- -------
-------- ------- ------- ------- -------
Income Statement Data:
Gas operating revenues................... $42,671 $45,261 $48,966 $44,418 $48,331
Operating expenses:
Cost of gas sold....................... 22,921 25,315 31,133 28,097 31,162
Other operation and maintenance........ 12,601 13,314 12,257 10,992 10,953
Depreciation........................... 2,050 1,935 1,609 1,499 1,392
Taxes-other than Federal income taxes.. 1,434 1,408 1,283 1,053 1,059
Federal income......................... 687 428 342 471 988
-------- ------- ------- ------- -------
Total........................... 39,693 42,400 46,624 42,112 45,554
-------- ------- ------- ------- -------
Operating income......................... 2,978 2,861 2,342 2,306 2,777
Other income-net of tax.................. 871 850 790 772 815
Total interest charges................... 1,769 2,086 1,708 1,461 1,101
-------- ------- ------- ------- -------
Net income............................... $2,080 $1,625 $1,424 $1,617 $2,491
-------- ------- ------- ------- -------
-------- ------- ------- ------- -------
Shares outstanding-average............... 2,146,119 1,784,993 1,780,542 1,780,542 1,780,542
Earnings per share....................... $0.97 $0.91 $0.80 $0.91 $1.40
Dividends declared per share............. $0.96 $0.96 $0.96 $0.96 $0.98
Appliance Company net income............. $851 $825 $779 $753 $799
</TABLE>
20
<PAGE>
ITEM 7. Management's Discussion and Analysis
OVERVIEW
Operating results are derived from two major classifications - utility and
non-utility. Utility revenues are generated from the operations of the
regulated natural gas distribution company and include the sale and
distribution, as well as the transportation, of natural gas to firm and
interruptible customers. Non-utility revenues are almost entirely from the
rental of water heaters and conversion burners.
The sale and distribution, as well as the transportation, of natural gas to
customers on a year-round basis for heating, water heating, cooking and
processing are the sources of firm utility revenues, as described below. Firm
customers can be residential, commercial or industrial. The revenues from
firm sales customers are determined by regulated tariff schedules and through
Massachusetts Department of Telecommunications and Energy ("MDTE") approved
commodity charge factors. These factors include the Cost of Gas Adjustment
Clause ("CGAC"), which requires the Company to collect from or return to
customers changes in gas cost from those included in the regulated tariffs,
on a semi-annual basis. The CGAC also provides for collection of: (i)
carrying costs on gas purchases; (ii) pipeline transition costs; (iii) costs;
incentives and lost base revenues associated with demand side management,
(DSM) programs; and (iv) certain costs of compliance with environmental
regulations. In accordance with the Company's approved CGAC, increases or
decreases in the cost of gas sold continue to be passed directly to firm
customers, dollar for dollar.
Sales to other utilities ("off-system sales") and to dual-fuel customers
("interruptible sales") are made when excess gas supplies are available and
prices are competitive. Interruptible sales are generally made in non-winter
months and can be interrupted by the Company at any time.
Transportation, the delivery of gas purchased by customers from marketers and
other third parties through the Company's distribution system, has recently
become a growing portion of the Company's business. With the restructuring of
the natural gas pipeline industry and the development of the state-level
policy of unbundling of delivery and commodity sales functions, the Company's
largest customers have moved first from firm tariffed sales service to firm
sales service under special contracts and more recently to transportation
service. The movement to the Company's transportation service occurred
primarily after implementation of new rates on December 1, 1996. Under these
rates, the Company earns the same margins on transportation service as it
does on bundled commodity sales and delivery. Accordingly, the Company is
generally indifferent as to whether customers take bundled sales and delivery
or unbundled transportation service only. To date, only the Company's largest
customers have moved to transportation service, although it is likely that
additional customers will as well. Such movement to transportation results in
reduced gas operating revenues, because no commodity is bought by the Company
for such customers. Correspondingly, cost of gas sold is reduced.
Consequently, there is no impact on earnings because the Company earns no
margin on the sale of natural gas itself.
The Appliance Company generates non-utility revenues primarily from the
rental of water heaters and conversion burners. The Appliance Company also
sells such equipment and other gas-burning appliances such as central heating
and air conditioning systems and water heaters. Such rentals and sales are
made to the Company's gas customers and thereby assist the utility sales
efforts. For income statement purposes, the net earnings of the Appliance
Company are shown under "Other Income." A breakdown of the revenue and
expenses of the Appliance Company is found in the Notes to Consolidated
Financial Statements.
21
<PAGE>
SEASONALITY
The nature of the Company's business is highly seasonal and
temperature-sensitive. As a result, the Company's operating results in any
given period reflect, in addition to other matters, the impact of the
weather, with colder temperatures resulting in increased sales and
transportation by the Company. The substantial impact of this sensitivity to
seasonal conditions is reflected in the Company's results of operations and
the Company anticipates that it will continue to be so reflected in future
periods.
Short-term borrowing requirements vary according to the seasonal nature of
sales and expense activities of the Company. Accordingly, there is a greater
need for short-term borrowings during periods when internally generated funds
are not sufficient to cover all capital and operating requirements,
particularly in the fall and winter. Short-term borrowings utilized for
construction expenditures generally are replaced by permanent financing when
it becomes economical and practical to do so and where appropriate to
maintain an acceptable relationship between borrowed and equity resources.
RESULTS OF OPERATION
Fiscal 1998 versus Fiscal 1997
Operating revenues in fiscal 1998 totalled $42,671,000 a decrease of 5.7%
from fiscal 1997. The decrease in revenues from the prior year was
attributable to a weather related decline in firm sales and a decrease in gas
costs recovered through the Company's CGAC. As discussed earlier,
fluctuations in the cost of gas does not impact the profitability of the
Company as these changes are recovered or returned to customers through the
CGAC.
Firm gas sendout, firm gas sales and firm transportation, was 6,910,000 Mcf
in fiscal 1998, a decrease of 6.1% from fiscal 1997. The primary factor for
the decline in gas sendout was weather, which was 8.4% warmer than a normal
year and 6.5% warmer than the prior year.
Cost of gas sold includes costs for gas operation including supplemental
fuels, such as, propane (LPG), liquefied natural gas (LNG), and storage,
which are used to augment the Company's primary supply of natural gas during
periods of peak usage. The average cost per Mcf of gas distributed in fiscal
1998 and 1997 was $4.39 and $4.46, respectively.
Other operations expense in fiscal 1998 totalled $11,113,000, a 2.0% decrease
from the prior period. A reduction in the costs of employee benefits and
pensions were primarily responsible for this decrease.
Maintenance expense totalled $1,487,000 in fiscal 1998, a 24.8% decrease from
the prior period. More efficient use of Company labor and a strict cost
cutting program generated substantial savings for the year.
Other income totalled $871,000 in fiscal 1998 and $850,000 in fiscal 1997.
Earnings of Fall River Gas Appliance Company, Inc., the Company's
wholly-owned subsidiary, totalled $850,000 and $824,000 in fiscals 1998 and
1997, respectively.
Fiscal 1998 interest expense was $1,769,000, a 15.2% decrease from the prior
fiscal period as a result of decreased short-term interest expense offset by
increased interest expense on long-term debt. The net proceeds of the Fall
River Gas Company debt and equity offerings during the first quarter of the
1998 fiscal year were used to reduce the short-term borrowing for utility
operations resulting in the decreased in interest expense.
22
<PAGE>
Fiscal 1997 versus Fiscal 1996
Operating revenues in fiscal 1997 totalled $45,261,000, a decrease of 7.6%
from fiscal 1996. The decrease in revenues from the prior year was
attributable to a decrease of $4,562,000 in gas costs recovered in CGAC and
the transfer of customers from firm sales to firm transportation. While the
transfer of firm sales customers to transportation does not affect operating
margins, it does provide less revenue.
Firm gas sendout was 7,360,000 Mcf in fiscal 1997, slightly below the
7,580,000 that was recorded in the prior fiscal year due to a slight decrease
in degree days.
Other operations expense increased 10.4% over fiscal 1996. Wage increases,
esclating health care cost, and inflationary pressures on goods and services
were the primary factors causing this increase.
Depreciation expense increased by $326,000, 20.3%, due to increase in
depreciation accrual rates as authorized by the MDTE on October 16, 1996.
Other Income totalled to $850,000 in fiscal 1997 and $791,000 in fiscal 1996.
This increase was primarily the result of increased earnings in the appliance
company attributable to increased rental fees.
Interest expense increased by $379,000, 22.2%, due to increased cost on
Long-term Debt related to the issuance of $7,000,000 of 30 year Mortgage
Bonds with a 7.99% coupon rate, offset by lower interest cost on reduced
short-term borrowings. The proceeds from the debt issue were used to reduce
the Company's short-term borrowing.
LIQUIDITY AND CAPITAL RESOURCES
On October 31, 1997 the Company began trading on the American Stock Exchange
(AMEX) under the symbol "FAL".
During the first quarter of fiscal 1998 Fall River Gas Company issued 390,000
additional shares of common stock and $6,000,000 of 7.24% Mortgage Bonds due
2027. The net proceeds of these issues, $10,859,000 before deduction of
expenses payable by the Company, were used to reduce the short-term
indebtedness. These financings favorably impacted liquidity.
The Company's major capital requirements result from upgrading the efficiency
of existing plant and expanding plant to serve additional customers. Such
capital expenditures are primarily for expansion and improvements of the
Company's distribution system. For the fiscal year 1998, capital expenditures
totalled approximately $2,289,000 compared to $2,467,000 in fiscal 1997 and
$3,780,000 in fiscal 1996.
Capital expenditures and accounts receivable balances were financed by
internally generated funds and supplemented by short-term borrowings. During
fiscal 1998 gas cost billings were lower than the Company's cost of gas,
thereby having a negative impact on cash flow of approximately $1,837,000.
Lower gas cost billings also increased the Company's deferred gas balance to
$3,618,000 in fiscal 1998 from $1,781,000.
The Company's net cash generated from operating activities in fiscal 1998 was
$4,253,000 compared to $3,289,000 and $1,215,000 in fiscal years 1997, and
1996, respectively. The Company had capital expenditures for utility and
non-utility operations in the amounts of $2,672,000, $2,894,000, and
$4,247,000 in fiscal years 1998, 1997, and 1996, respectively.
23
<PAGE>
As is customary in the utility industry, cash for construction requirements
in excess of internally generated funds are provided through short-term
borrowings under existing lines of credit, then from time to time repaid with
the proceeds from equity and long-term financing as deemed appropriate by
management. On September 30, 1998 the Company had $14,900,000 of available
borrowings under its lines of credit. These lines are reviewed annually by
our lending banks and management believes they will be renewed or replaced.
Management believes the available financings are sufficient to meet cash
requirements for the foreseeable future.
Cash flow patterns reflect the seasonality of the Company's business. Sales
of natural gas are seasonal, generating approximately seventy percent of the
Company's annual revenues between November 1 and March 31. The greatest
demand for cash is in the late fall and winter as construction projects are
brought to completion and accounts receivable balances rise.
The Company anticipates utility construction expenditures over the next
fiscal year to be approximately $2,500,000 and non-utility capital
expenditures to be approximately $400,000 over the same period. It is
anticipated that such expenditures will be financed from internally generated
sources supplemented, as required, by short-term borrowing.
Factors That May Affect Future Results
The private Securities Litigation Reform Act of 1995 encourages the use of
cautionary statements accompanying forward-looking statements. The preceding
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes forward-looking statements concerning the impact of
changes in the cost of gas and of the CGAC mechanism on total margin;
projected capital expenditures and sources of cash to fund expenditures; and
estimated costs of environmental remediation and anticipated regulatory
approval of recovery mechanisms. The Company's future results generally and
with respect to such forward-looking statements, may be affected by many
factors, among which are uncertainty as to the regulatory allowance of
recovery of changes in the cost of gas; uncertain demands for capital
expenditures and the availability of cash from various sources; uncertainty
as to whether transportation rates will be reduced in future regulatory
proceedings with resulting decreases in transportation margins; and
uncertainty as to environmental costs and as to regulatory approval of the
full recovery of environmental costs, transition costs and other regulatory
assets.
New Accounting Standards and Pronouncements
During fiscal year 1998, the Company implemented Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings per Share," which establishes
standards for computing and presenting earnings per share and SFAS No. 129,
"Disclosure of Information about Capital Structure," which establishes
standards for disclosure repuirements regarding capital structure. Both SFAS
No. 128 and No. 129 have no material impact on the Company's financial
reporting.
The Financial Accounting Standards Board issued new accounting standards that
the Company will adopt in future periods. SFAS No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and the disclosure
of comprehensive income and its components. This standard is effective in
fiscal year 1999 and is not expected to have a material impact on the
Company's financial reporting. SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information," requires disclosure of operating
segments, including disclosures about products and services, geographic areas
and major customers. It is effective in fiscal year 1999 and is not expected
to have a material impact on the Company's financial reporting.
24
<PAGE>
SFAS No. 132, "Employer's Disclosures About Pensions and Other Postretirement
Benefits," revises employer's disclosures about pension and other
postretirement benefit plans. It does not change the measurement of
recognition of those plans. Effective in fiscal year 1999, no significant
affect is expected on the Company's financial reporting. SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," establishes
standards for recording all derivative instruments as assets and liabilities
measured at fair value. The standard is effective in quarter four of fiscal
year 1999 and the Company is currently evaluating the impact on financial
position.
The American Institute of Certified Public Accountants issued Statement of
Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed
and Obtained for Internal Use," and SOP 98-5, "Reporting on the Costs of
Start-up Activities." Both are effective in fiscal year 2000 and adoption is
not expected to have a material impact on the Company's financial position.
The "Year 2000" Issue
The Company has evaluted its principal computer systems and noninformation
technology systems including, but not limited to, telecommunication systems,
automated meter reading systems, SCADA, regulator stations, plant remote
control systems and security systems to determine readiness for the year
2000. These systems are currently capable of processing the year 2000, or are
in the process of being upgraded or replaced by systems that are similarly
capable. All necessary program modifications and system upgrades and testing
are expected to be completed by the year 2000. Costs incurred to date and
costs expected to be incurred to complete the year 2000 readiness are not
significant and will not have a material impact on the Company's financial
position or results of operations. The Company is currently assessing year
2000 issues with material third parties. Except for the Company's major
pipeline supplier, who has provided assurance of compliance, the Company has
not determined the level of third-party risk. Preparation of a contingency
plan is in process and is expected to be finalized during fiscal year 1999.
25
<PAGE>
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,
1998 and 1997 and the related consolidated statements of income, retained
earnings and cash flows for each of the three years in the period ended
September 30, 1998. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule 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, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 1998, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The financial statement
schedule under part IV, Item 14, presented for purposes of additional
analysis and is not a required part of the basic consolidated financial
statements. This information has been subject to the auditing procedures
applied in our audit of the basic consolidated financial statements and, in
our opinion, is fairly stated, in all material respects, in relation to the
basic consolidated financial statements taken as a whole.
/S/ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 17, 1998
26
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
Fall River Gas Company and Subsidiary
For the Years Ended September 30, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
GAS OPERATING REVENUES....................... $42,670,838 $45,261,249 $48,965,547
OPERATING EXPENSES:
Operations -
Cost of gas sold.......................... 22,920,783 25,314,769 31,132,828
Other..................................... 11,113,369 11,337,000 10,268,772
Maintenance................................ 1,487,345 1,977,172 1,987,782
Depreciation .............................. 2,050,207 1,934,959 1,608,641
Taxes -
Local property and other.................. 1,433,887 1,408,507 1,283,389
Federal and state income (Note 3)......... 686,909 427,768 341,432
----------- ----------- -----------
39,692,500 42,400,175 46,622,844
----------- ----------- -----------
OPERATING INCOME.............................. 2,978,338 2,861,074 2,342,703
OTHER INCOME (EXPENSE):
Earnings of Fall River Gas Appliance
Company Inc.(Note 2)...................... 850,517 824,724 778,813
Interest income............................ 13,661 13,775 14,489
Other...................................... 6,836 11,375 (2,505)
----------- ----------- ------------
INCOME BEFORE INTEREST EXPENSE................ 3,849,352 3,710,948 3,133,500
----------- ----------- -----------
INTEREST EXPENSE:
Long-term debt............................ 1,534,900 1,172,900 683,387
Other..................................... 234,390 913,405 1,024,405
----------- ----------- -----------
1,769,290 2,086,305 1,707,792
----------- ----------- -----------
NET INCOME.................................... $ 2,080,062 $ 1,624,643 $ 1,425,708
----------- ----------- -----------
----------- ----------- -----------
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING....... 2,146,119 1,784,993 1,780,542
----------- ----------- -----------
----------- ----------- -----------
EARNINGS PER AVERAGE COMMON SHARE............. $ 0.97 $ 0.91 $ 0.80
----------- ----------- -----------
----------- ----------- -----------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For the Years Ended September 30, 1998, 1997, and 1996
1998 1997 1996
---- ---- ----
BALANCE AT BEGINNING OF YEAR................. $10,693,309 $10,865,648 $11,149,260
Net Income................................... 2,080,062 1,624,643 1,425,708
----------- ----------- -----------
Total.................................... 12,773,371 12,490,291 12,574,968
Dividends declared........................... 2,100,588 1,796,982 1,709,320
----------- ----------- -----------
BALANCE AT END OF YEAR....................... $10,672,783 $10,693,309 $10,865,648
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
CONSOLIDATED BALANCE SHEETS
Fall River Gas Company and Subsidiary
September 30, 1998 and 1997
<TABLE>
<CAPTION>
ASSETS
1998 1997
---- ----
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT, at original cost:
Gas................................................... $ 60,448,647 $ 58,413,337
Nonutility, principally rented gas appliances......... 6,288,100 6,287,417
------------ ------------
66,736,747 64,700,754
Less-Accumulated depreciation......................... 22,839,053 21,152,109
------------ ------------
43,897,694 43,548,645
------------ ------------
CURRENT ASSETS:
Cash.................................................. 356,005 329,400
Accounts receivable, less allowance for doubtful accounts
of $957,000 in 1998 and $907,000 in 1997............. 1,807,487 1,972,301
Inventories, at average cost -
Liquefied natural gas, propane, and natural gas in storage 3,148,31 3,108,887
Materials and supplies................................ 1,273,772 1,341,567
Deferred gas costs.................................... 3,617,512 1,780,798
Prepaid taxes......................................... 401,160 990,515
Prepayments and other................................. 665,243 630,581
------------ ------------
11,269,490 10,154,049
------------ ------------
DEFERRED CHARGES:
Regulatory asset (Note 6)............................. 453,471 758,832
Other................................................. 18,885 473,901
------------ ------------
472,356 1,232,733
------------ ------------
$ 55,639,540 $ 54,935,427
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statement.
28
<PAGE>
CONSOLIDATED BALANCE SHEETS(Cont.)
Fall River Gas Company and Subsidiary
September, 30, 1998 and 1997
CAPITALIZATION:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Stockholders' investment-
Common stock, par value $.83-1/3 per share, 2,951,334
shares authorized and 2,201,334 issued................ $ 1,834,445 $ 1,834,445
Premium paid-in on common stock........................ 4,954,532 1,474,850
Retained earnings (Note 4)............................. 10,672,783 10,693,309
----------- -----------
17,461,760 14,002,604
Less - 9,326 shares in 1998 and 410,511 in 1997 of
common stock held in treasury, at cost................ 31,443 1,384,079
----------- -----------
17,430,317 12,618,525
Long-term debt (Note 4) 19,500,000 13,500,000
----------- ----------
Total capitalization.............................. 36,930,317 26,118,525
----------- -----------
CURRENT LIABILITIES:
Notes payable to banks (Note 4)......................... 5,100,000 15,400,000
Dividends payable....................................... 526,173 511,655
Accounts payable........................................ 3,074,673 3,545,644
Other................................................... 2,214,022 1,932,403
----------- -----------
10,914,868 21,389,702
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 7)
DEFERRED CREDITS:
Accumulated deferred income taxes (Note 3).............. 4,462,626 4,273,840
Unamortized investment tax credits (Note 3)............. 485,453 529,737
Other................................................... 2,390,716 2,129,057
Regulatory liability (Note 3)........................... 455,560 494,566
----------- -----------
7,794,355 7,427,200
----------- -----------
$55,639,540 $54,935,427
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fall River Gas Company and Subsidiary
For the Years Ended September 30, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash Provided by (Used for)
Operating Activities:
Net Income........................................... $ 2,080,062 $ 1,624,643 $ 1,425,708
Items not requiring (providing) cash:
Depreciation....................................... 2,292,374 2,121,759 1,807,808
Deferred income taxes.............................. 188,786 149,854 218,869
Investment tax credits, net........................ (44,284) (37,958) (37,958)
Change in working capital.......................... (1,278,188) (939,194) (1,573,387)
Other sources, net................................. 1,013,970 370,037 (626,514)
----------- ----------- ------------
Net cash provided by operating activities......... 4,252,720 3,289,141 1,214,526
----------- ----------- -----------
Investing Activities:
Additions to utility property, plant and equipment... (2,288,562) (2,467,988) (3,779,718)
Additions to nonutility property..................... (383,801) (426,502) (466,862)
------------ ------------ ------------
Net cash used for investing activities............. (2,672,363) (2,894,490) (4,246,580)
------------ ------------ ------------
Financing Activities:
Cash dividends paid on common stock.................. (2,086,070) (1,712,657) (1,709,320)
Retirement of long-term debt through sinking fund.... 0 0 (880,000)
Common stock transactions............................ 4,832,318 153,471 0
Proceeds from long-term debt issue................... 6,000,000 0 7,000,000
Increase(decrease) in notes payable to banks, net.... (10,300,000) 1,100,000 (1,300,000)
------------ ------------ ------------
Net cash provided by (used for) financing activities. (1,553,752) (459,186) 3,110,680
Increase (decrease) in cash................................ 26,605 (64,535) 78,626
Cash, beginning of year.................................... 329,400 393,935 315,309
----------- ------------ -----------
Cash, end of year.......................................... $ 356,005 $ 329,400 $ 393,935
----------- ------------ -----------
----------- ------------ -----------
Changes in Components of Working Capital(excluding
cash): (Increase) decrease in current assets:
Accounts receivable................................. $ 164,814 $ 704,021 $ (517,152)
Inventories......................................... 28,371 179,311 (488,868)
Prepayments and other............................... 554,694 (434,175) (676,920)
Deferred gas cost................................... (1,836,714) (1,579,533) 2,607,617
Increase (decrease) in current liabilities:
Accounts payable.................................... (470,971) (8,980) (30,676)
Gas supplier refunds due customers.................. 0 0 (1,367,969)
Accrued taxes....................................... 0 0 (838,617)
Other............................................... 281,618 200,162 (260,802)
----------- ------------ -----------
Change in working capital.......................... $(1,278,188) $ (939,194) $(1,573,387)
------------ ------------ ------------
------------ ------------ ------------
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest............................................ $ 1,745,556 $ 2,015,215 $ 1,743,878
Income taxes........................................ 593,588 1,131,624 2,111,259
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fall River Gas Company and Subsidiary
September 30, 1998
1) ACCOUNTING POLICIES
Principles of Consolidation
The Consolidated financial statements include the accounts of Fall River
Gas Company (the Company) and subsidiary, Fall River Gas Appliance Company,
Inc., (the Appliance Company). The Company's principal business is the
operation of a regulated gas distribution company in southeastern
Massachusetts, while its wholly-owned subsidiary rents gas appliances. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
Regulation
The Company's rates, operations, accounting and certain other practices
are subject to the regulatory authority of the Massachusetts Department of
Telecommunications & Energy (MDTE). The Company's accounting policies conform
to generally accepted accounting principles applicable to rate regulated
enterprises and the reported amounts of revenues and expenses during the
reported period.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reporting and disclosure of assets and
liabilities, including those that are of a contingent nature, at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.
Depreciation & Amortization
Depreciation of property, plant and equipment is provided using the
straight-line method at rates designed to amortize the cost of these assets
over their estimated useful lives. The composite depreciation rate for gas
plant is 3.5%. Rented gas appliances have estimated useful lives of 10 to 20
years. Installation costs of rented appliances are amortized over the
estimated life of the lease period.
Gas Operating Revenues and Cost of Gas Sold
Gas operating revenues are recorded based on meter readings made on a
cycle basis throughout the month. Accordingly, in any period, the actual
volume of gas supplied to customers may be more or less than the usage for
which the customers have been billed.
The Company's approved rate tariffs include a cost of gas adjustment
(CGAC) factor allowing dollar-for-dollar recovery of the cost of gas sendout
to firm customers. Actual costs incurred at the end of any period may differ
from amounts recovered through application of the CGAC. Any excess or
deficiency in amounts billed as compared to costs is deferred and either
refunded to, or recovered from, the customers over a subsequent period.
Regulatory Assets
Regulatory assets relate to unrecovered SFAS 106 expenses. These
regulatory assets do not earn a return on investment.
31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)
2) FALL RIVER GAS APPLIANCE COMPANY, INC.
The earnings of the Fall River Gas Appliance Company, Inc. are shown as
Other Income in the accompanying Consolidated Statements of Income. Condensed
operating information of the Appliance Company for the years ended September 30,
1998, 1997, and 1996 is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Operating revenues.......................... $3,409,506 $3,176,526 $2,941,885
Costs and expenses.......................... 1,976,501 1,786,944 1,629,693
---------- ---------- ----------
Income before income taxes.............. 1,433,005 1,389,582 1,312,192
Income tax expense.......................... 582,488 564,858 533,379
---------- ---------- ----------
Net income............................ $ 850,517 $ 824,724 $ 778,813
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
3) INCOME TAXES
The Company and its subsidiary file a consolidated Federal income tax
return. Each company provides Federal income taxes on a separate company basis.
The following is a summary of the provision for Federal and State income taxes:
<TABLE>
<CAPTION>
1998 1997 1996
-----------------------------------------------------------------------------
Federal State Federal State Federal State
<S> <C> <C> <C> <C> <C> <C>
Current.................... $891,431 $235,811 $693,858 $194,129 $ 535,480 $159,195
Deferred................... 155,731 33,056 123,690 26,164 181,356 37,513
Investment tax credits..... (44,284) - (37,958) - (37,958) -
-------- -------- -------- -------- ---------- --------
Total provision....... $1,002,878 $268,867 $779,590 $220,293 $ 678,878 $196,708
-------- -------- -------- -------- ---------- --------
-------- -------- -------- -------- ---------- --------
Provision for income taxes included in:
Operating expenses....... $562,784 $124,125 $348,708 $ 79,060 $ 277,028 $ 64,404
Other income-
Fall River Gas
Appliance Company... 438,145 144,343 424,858 140,001 401,207 132,172
Other.................... 1,949 399 6,024 1,232 643 132
-------- -------- -------- -------- ---------- --------
Total provision...... $1,002,878 $268,867 $779,590 $220,293 $ 678,878 $196,708
-------- -------- -------- -------- ---------- --------
-------- -------- -------- -------- ---------- --------
</TABLE>
On October 1, 1993, the Company adopted Statement of Financial Accounting
Standards ("SFAS") 109, "Accounting for Income Taxes". SFAS 109 requires
adjustments of deferred tax assets and liabilities to reflect the future tax
consequences, at currently enacted tax laws and rates, of items already
reflected in the financial statements. The implementation of SFAS 109 resulted
in the recognition of a regulatory liability of approximately $412,000 for the
tax benefit of unamortized investment tax credits, which SFAS 109 requires to be
treated as a temporary difference. This benefit is being passed on to customers
over the lives of the property giving rise to the investment tax credit.
The tax effect of the cumulative differences that gave rise to the deferred
tax liabilities and deferred tax assets for the year ended September 30, 1998
and 1997 are detailed on the following page (in thousands):
32
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Deferred Tax Assets:
Allowance for doubtful accounts............... $ 362,311 $ 343,472
Unamortized investment tax credits............ 189,326 206,597
Contributions in aid of construction.......... 226,199 202,018
Unbilled revenue.............................. 340,971 376,728
Deferred pension.............................. 253,461 253,461
Deferred compensation......................... 257,323 245,294
Regulatory liability.......................... 195,035 195,035
Other......................................... 903,024 619,218
---------- ----------
Total Deferred Tax Assets............................ $2,727,650 2,441,823
Deferred Tax Liabilities:
Property related.............................. 5,272,976 5,116,921
Deferred gas costs............................ 1,410,829 694,511
Other......................................... 513,494 301,337
---------- ----------
Total Deferred Tax Liabilities....................... 7,197,299 6,112,769
--------- ----------
Net Deferred Tax Liability........................... $4,469,649 $3,670,946
--------- ----------
--------- ----------
</TABLE>
The combined Federal and State income tax provision set forth above
represents approximately 38% of income taxes in 1998, 1997 and 1996. The
combined statutory rate for Federal and State income tax was approximately
39% in 1998, 1997, and 1996. The difference between the effective income tax
rate and statutory rate results primarily from the amortization of investment
tax credits
Investment tax credits are amortized over the life of the property giving
rise to the credits.
4) CAPITALIZATION
Common Stock Issuance
During Fiscal 1998 the Company issued 390,000 shares of common stock out if its
treasury shares with net proceeds of approximately $5,000,000
Long-Term Debt And Notes Payable to Banks
Long-term debt consists of:
<TABLE>
<CAPTION>
Amounts Outstanding
---------------------------
Amounts Sept 30, Sept. 30,
Authorized 1998 1997
---------- ------------ ------------
<S> <C> <C> <C>
FIRST MORTGAGE BONDS:
9.44% Series, due 2020............ $6,500,000 $ 6,500,000 $ 6,500,000
7.99% Series, due 2026............ 7,000,000 7,000,000 7,000,000
7.24% Series, due 2027............ 6,000,000 6,000,000 -
----------- -----------
$19,500,000 $13,500,000
----------- -----------
----------- -----------
</TABLE>
There are no aggregate maturities and sinking fund requirements for the
next five years applicable to the issues outstanding at September 30, 1998. The
First Mortgage Bonds are secured by a lien on substantially all of the Company's
gas plant. Under the terms of the most restrictive supplemental indenture,
retained earnings of $6,865,648 were restricted against payment of dividends at
September 30, 1998.
If long-term debt outstanding at September 30, 1998 had been refinanced
using new issue debt rates of interest that are lower than the outstanding
rates, the present value of those obligations would have increased from the
amounts outstanding in the September 30, 1998 balance sheet by 26.5%.
33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Cont.)
The Company maintains lines of credit with various banks under which it
may borrow up to $20,000,000. 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 at rates ranging from 5/16 of 1% to 1/2 of 1%. At
September 30, 1998, there were $5,100,000 borrowings under these lines of
credit.
The following table summarizes certain information related to the Company's
short-term borrowings for the years ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Average daily balance outstanding for the period.... $ 6,917,000 $15,449,000
Weighted average interest rate for the period....... 6.2% 6.1%
Maximum amount outstanding during the
period based on month-end balances............. $16,900,000 $23,500,000
Weighted average interest rate at end of period..... 6.0% 7.1%
</TABLE>
5) EMPLOYEES' PENSION PLANS
The Company has defined benefit plans covering substantially all of its
employees. The benefits under these plans are based on years of service and
employees' compensation levels. The Company's policy is to fund pension costs
accrued including amortization of past service costs.
The following table sets forth the funding status of the pension plan as of
September 30, 1998 and 1997:
Actuarial present value of benefit obligations:
<TABLE>
<CAPTION>
1998 1997
---- ----
Union Salaried Union Salaried
----- -------- ----- --------
<S> <C> <C> <C> <C>
Vested................................ $(6,365,981) $(6,261,757) $(6,292,407) $(5,678,595)
Non vested............................ (13,216) (44,939) (11,818) (35,926)
----------- ----------- ----------- -----------
Total accumulated benefit obligation... $(6,379,197) $(6,306,696) $(6,304,225) $(5,714,521)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Projected benefit obligation........... $(7,342,996) $(7,516,071) $(6,450,299 $(6,897,893)
Plan assets at fair value................... 7,888,434 7,619,218 7,085,208 6,382,336
----------- ----------- ----------- -----------
Projected benefit obligation (in excess)
or less than plan assets.................. 545,438 103,147 634,909 (515,557)
Unrecognized net gain....................... (1,070,741) (1,745,402) (1,244,143) (1,383,806)
Unrecognized prior service cost
due to plan amendment..................... 231,684 1,063,112 270,298 1,181,236
Unrecognized net obligation................. 299,616 112,883 374,520 141,102
----------- ----------- ----------- -----------
Prepaid pension cost (pension liability)
Recognized on the consolidated
balance sheet.......................... $ 5,997 $ (466,260) $ 35,584 $ (577,025)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net pension cost included the following components: 1998 1997 1996
---- ---- ----
Service cost........................... $ 422,619 $ 389,258 $ 365,511
Interest cost.......................... 1,067,855 1,041,044 906,500
Return on assets....................... (2,331,614) (2,178,265) (1,320,522)
Net deferral and amortization.......... 1,301,403 1,289,404 520,684
----------- ---------- ----------
Net periodic pension cost.............. $ 460,263 $ 541,441 $ 472,173
----------- ---------- ----------
----------- ---------- ----------
Assumptions used to determine the projected benefit obligation were as follows:
1998 1997
---- ----
Discount rate.............................................. 8.0% 8.0%
Rate of increase in future compensation levels............. 3.0% 3.0%
Expected long-term rate of return on assets-Salaried Plan.. 9.0% 9.0%
Expected long-term rate of return on assets-Union Plan..... 8.0% 9.0%
</TABLE>
34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
6) OTHER POST-EMPLOYMENT BENEFITS
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits to qualified retired employees.
In 1994, the Company adopted Statement of Financial Accounting Standards No.
106 "Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS 106). Prior to 1994, expense was recognized when benefits were paid. In
accordance with SFAS 106, the Company began recording the Cost for this plan on
an accrual basis for 1994. As permitted by SFAS 106, the Company is recording
the transition obligation over a twenty year period.
The following table sets forth the status of the plans at September 30, 1998 and
1997:
<TABLE>
<CAPTION>
Accumulated postretirement benefit obligation: 1998 1997
---- ----
<S> <C> <C>
Retirees................................... $(1,092,032) $ (943,560)
Fully eligible active plan participants.... ( 8,713) (26,808)
Other active plan participants............. (697,824) (898,620)
------------ -----------
(1,798,569) (1,868,988)
Plan assets..................................... 220,940 210,489
Unrecognized transition obligation.............. 2,120,800 2,262,177
Unrecognized past service costs................. 101,283 112,389
Unrecognized gain............................... (1,445,572) (1,360,927)
------------ -----------
Accrued postretirement benefit cost............. $ (801,118) $ (644,860)
------------ -----------
------------ -----------
</TABLE>
Net periodic postretirement benefit cost for fiscal 1998, 1997 and 1996
included the following components:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Service Costs-benefits attributable to service during the period..... $ 49,345 $ 58,403 $ 80,022
Iterest cost on accumulated postretirement benefit obligation........ 132,889 137,005 140,210
Net amortization and deferral........................................ 141,377 141,377 141,385
Recognized past service.............................................. 11,106 11,106 11,106
Recognized gain...................................................... (88,898) (74,678) (59,909)
-------- -------- --------
$ 245,819 $273,213 $312,814
-------- -------- --------
-------- -------- --------
</TABLE>
For measurement purposes, a 7% annual rate of increase in the per capita cost
of covered health care benefits was assumed for 1998. The rate was assumed to
decrease gradually to 4% by fiscal 2005, and to remain at that level thereafter.
The healthcare cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost trend
by 1% in each year would increase the accumulated postretirement benefit
obligation as of September 30, 1998 by $148,495 and the aggregate of the service
and the interest cost components of net periodic postretirement benefit cost
(NPPBC) for the year by $19,258. The discount rate was 7% for the development of
the NPPBC and for disclosure.
35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
As of September 30, 1998, the Company has a regulatory asset amounting to
$453,471 related to unrecovered SFAS 106 expenses. On October 16, 1996 the
MDTE approved a settlement agreement between the company and intervenors for
an increase in rates effective December 1, 1996. As part of the settlement
agreement, the Company was allowed recovery of annual SFAS 106 expenses, as
well as, amounts recorded as regulatory assets prior to December 1, 1996.
7) COMMITMENTS AND CONTINGENCIES
The Company and certain of its predecessors owned or operated facilities
for the manufacture of gas from coal, a process used through the mid-1900's
that produced by-products that may be considered contaminated or hazardous
under current law, and some of which may still be present at such facilities.
The Company accrues environmental investigation and clean-up costs with
respect to former manufacturing sites and other environmental matters when it
is probable that a liability exists and the amount or range of amounts is
reasonably certain.
8) UNAUDITED QUARTERLY FINANCIAL INFORMATION
The following is unaudited quarterly information for the fiscal years ended
September 30, 1998 and 1997. Quarterly variations between periods are caused
primarily by the seasonal nature of the gas distribution business.
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
(Thousands except per share amounts) Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues............... $11,273 $18,513 $8,582 $4,303 $11,164 $20,401 $9,789 $3,907
Operating Income................. 791 1,791 429 (33) 453 1,956 556 (104)
Net Income....................... 548 1,512 249 (229) 129 1,596 271 (371)
Net Income per Share............. 0.27 0.69 0.11 (0.10) 0.07 0.90 0.15 (0.21)
</TABLE>
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 1998 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). See also Additional Item - Executive Officers
of Registrant in above.
ITEM 11. Management Remuneration And Transactions
Information required under this item is contained in the Registrant's
1998 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 1998 Proxy Statement, filed with the commission pursuant to
Regulation 14A, and is incorporated herein by reference, pursuant to Form 10K
General Instruction G(3).
ITEM 13. Certain Relationships And Related Transactions
Not applicable.
36
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, And Reports On Form 8-K
(a) (1) and (2) The response to this portion if Item 14 is
submitted in the following pages.
(b) The Registrant was not required to file a Form 8-K
during fiscal year 1998.
37
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FALL RIVER GAS COMPANY
BY /S/ Peter H. Thanas
-----------------------
Senior Vice President and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
President, Chairman of
the Board and Director
/S/ Bradford J. Faxon (Chief Executive Officer 12/17/98
Vice Chairman of the
/S/ Raymond H. Faxon Board and Director 12/17/98
Senior Vice President
and Treasurer
(Chief Financial and
/S/ Peter H. Thanas Accounting Officer 12/17/98
/S/ Cindy L.J. Audette Director 12/17/98
/S/ Thomas K. Barry Director 12/17/98
/S/ Thomas H. Bilodeau Director 12/17/98
/S/ Ronald J. Ferris Director 12/17/98
/S/ Jack R. McCormick Director 12/17/98
/S/ Gilbert C. Oliveira Jr. Director 12/17/98
/S/ Donald R. Patnode Director 12/17/98
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Page Number or
Exhibit Incorporation Or
Numbers Description Reference To
- ------- ----------- ----------------
<S> <C> <C>
(3) Articles of Incorporation and Exhibit 3 to Report
By-Laws on Form 10-K for
calender year ended
December 31, 1982
(3a) A copy of an Amendment to the Exhibit 3a to Report
Articles of Incorporation to on Form 10-K for
increase the number of Common calendar year ended
Shares from 366,889 to 1,100,667 December 31, 1987
and to change the Par Value from
$5.00 to $1 2/3
(3b) A copy of an Amendment to the By-Laws Exhibit 3b to Report
on Form 10-K for
calendar year ended
December 31, 1990
(3c) A copy of an Amendment to the By-Laws Exhibit 3c to Report
on Form 10-K for
calendar year ended
December 31, 1991
(3d) A copy of an Amendment to the Articles To report on Form 10-K
of Incorporation, dated December 31, 1993 for calendar year ended
to increase the number of Common Shares December 31, 1997
from 1,100,667 to 2,201,334 and to change
the Par Value from $1 2/3 to $0.83 1/3
(3e) A copy of an Amendment to the Articles of
Attached Hereto as Incorporation, dated
February 19, 1998 to Exhibit 3 (e) increase
the number of Common Shares from 2,201,334
to 2,951,334
(4) Instruments defining the rights Exhibit 4 to Report
of security holders, including on Form 10-K for
indentures calendar year ended
December 31, 1982
(4a) Thirteenth Supplemental Indenture To report Form 10-K for
between the Registrant and calendar year ended
State Street Bank and Trust Co. December 31, 1997
(10a) Purchase of F-1 from Algonquin Exhibit 10a to Report
Gas Transmission Company on Form 10-K for
calendar year ended
(10b) Purchase of SNG from Algonquin Exhibit 10b to Report
Gas Transmission Company on Form 10-K for
calendar year ended
December 31, 1982
(10c) A copy of the contract between Exhibit 10c to Report
the Registrant and Utility on Form 10-K for
Workers Union of America, AFL-CIO calendar year ended
and Local No. 431, dated May 1, 1984 December 31, 1984
(10d) A copy of an Employment and Con- Exhibit 10d to Report
sulting Agreement dated as of on Form 10-K for
September 18, 1984, between the calendar year ended
Registrant and Jack R. McCormick December 31, 1984
(10e) A copy of an Employment and con- Exhibit 10e to Report
sulting Agreement dated as of on Form 10-K for
September 18, 1984, between the calendar year ended
Registrant and Bradford J. Faxon December 31, 1984
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
Page Number or
Exhibit Incorporation Or
Numbers Description Reference to
- ------- ----------- ----------------
<S> <C> <C>
(10f) A copy of an Employment and Con- Exhibit 10f to Report
sulting Agreement dated as of on Form 10-K for
September 18, 1984 calendar year ended
Registrant and Norman J. Meyer December 31, 1984
(10g) A copy of the Restatement of Con- Exhibit 10g to Report
sulting Agreement dated as of on Form 10-K for
December 13, 1983, between the calendar year ended
Registrant and Thomas H. Bilodeau December 31, 1984
(10h) A copy of an Agreement, Combined Sup- Exhibit 10h to Report
plementary Agreement, and Amendment on Form 10-K for
to Agreement for Employment and calendar year ended
Consulting Services between the December 31, 1984
Registrant and Raymond H. Faxon
(10i) A copy of an Amendment to Employment Exhibit 10i to Report
and Consulting Agreement dated on Form 10-K for
January 1, 1987 between the Regi- calendar year ended
strant and Bradford J. Faxon December 31, 1986
(10j) A copy of an Amendment to Employment Exhibit 10j to Report
and Consulting Agreement dated on Form 10-K for
January 1, 1987 between the Regi- calendar year ended
strant and Norman J. Meyer December 31, 1986
(10k) A copy of an Employment and Consulting Exhibit 10k to Report
Agreement dated as of August 1, 1986 on Form 10-K for
between the Registrant and Peter H. calendar year ended
Thanas December 31, 1986
(10L) A copy of an Amendment to Employment Exhibit 10L to Report
and Consulting Agreement dated on Form 10-K for
January 1, 1987 between the Regi- calendar year ended
strant and Peter H. Thanas December 31, 1986
(10m) A copy of the Contract between the Exhibit 10m to Report
Registrant and Utility Workers on Form 10-K for
Union of America, AFL-CIO and calendar year ended
Local, 431, dated May 31, 1987 December 31, 1987
(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 Firm Exhibit 10p to Report
Liquid Service between Distrigas on Form 10-K for
and Registrant calendar year ended
December 31, 1988
(10q) A copy of Service Agreement for Exhibit 10q to Report
Interruptible Vapor Service be- on Form 10-K for
tween Distrigas and Registrant calendar year ended
December 31, 1988
(10r) A copy of Service Agreement for Firm Exhibit 10r to Report
Vapor Service between Distrigas on Form 10-K for
and Registrant calendar year ended
December 31, 1988
</TABLE>
40
<PAGE>
<TABLE>
Page Number or
Incorporation Or
Numbers Description Reference To
- ------- ----------- ----------------
<S> <C> <C>
(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
September 30, 1995
(10z) A copy of the Contract between the Attached Hereto as
Registrant and Utility Workers Exhibit 10(z)
Union of America, AFL-CIO and
Local 431, dated May 1, 1998 September 30, 1998
(22) The Registrant has one Subsidiary,
Fall River Gas Appliance Company, Inc.,
that is incorporated in Massachusetts,
and does business under said name
(23) Consent of Independent Public Accountants Attached
To the Stockholders and Board of Directors
of Fall River Gas Company
</TABLE>
41
<PAGE>
FALL RIVER GAS COMPANY AND SUBSIDIARY
INDEX TO FINANCIAL STATEMENTS
(Submitted in Answer to Item 14 of Form 10-K,
Securities and Exchange Commission)
<TABLE>
<CAPTION>
Reference
<S> <C>
Report of independent public accountants Page 26
Fall River Gas Company and Subsidiary
Consolidated balance sheets - As of
September 30, 1998 and September 30, 1997 Page 28 & 29
Consolidated statements for the years ended
September 30, 1998, 1997, and 1996
Income Page 27
Retained earnings Page 27
Cash flows Page 30
Notes to consolidated financial statements Page 31-37
</TABLE>
SCHEDULES
VIII - Valuation and Qualifying Accounts and Reserves for the
years ended September 30,
1998, 1997, and 1996 Attached
Schedules, other than the one listed to above, are either not required or not
applicable or the required information is shown in the financial statements or
notes thereto.
42
<PAGE>
FALL RIVER GAS COMPANY AND SUBSIDIARY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR YEAR ENDED SEPTEMBER 30, 1998
<TABLE>
<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 $907,357 $823,500 - $472,625 ($48,916) $1,307,148
-------------- -------------- -------------- --------------- ---------- ---------
</TABLE>
FOR YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
ADDITIONS DEDUCTIONS
--------------- --------------
Balance at 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 $670,038 $761,500 - $563,691 ($39,510) $907,357
-------------- -------------- -------------- --------------- ---------- ---------
</TABLE>
FOR YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ADDITIONS DEDUCTIONS
--------------- --------------
Balance at 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 $686,650 $411,500 - $456,348 ($28,235) $670,038
-------------- -------------- -------------- --------------- ---------- ---------
</TABLE>
43
<PAGE>
Exhibit-3(e)
FED IDENTIFICATION
NO. 04-1298780
----------
Examiner. William Francis Galvin
Secretarv of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 164 Section . 8B -
Name 70
Approved
We, Bradford J. Faxon President
Robert J. Pollock
and Clerk
of FALL RIVER GAS COMPANY
(Exact name of corporation)
located at 155 North Main Street, Fall River, Massachusetts 02722
-----------------------------------------------------------------
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles numbered:
3
(Number those articles 1, 2, 3,
4, 5 and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting
held on February 10, 1998 by vote of:
1,774,983.8044
shares of Common Stock of 2,183,794. 7952 shares outstanding,
------------ ---------
(type, class & series, if any)
shares of of shares outstanding, and
(type, class & series, if any)
shares of of shares outstanding,
(type, class & series, if any)
'**being at least a majority of each type, class or series
outstanding and entitled to vote thereon: / or
change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
Common: 0 Common: 2.201,334 $0. 83-1/3
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Preferred: 0 Preferred: 0
Change the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
Common: 0 Common: 2 951,333 $0.83-1/3
Preferred: 0 Preferred: 0
That the Charter, Agreement of Association and Articles of Organization of Fall
River Gas Company (the "Company") be, and the same hereby are, amended to
increase the authorized capital stock of the Company by creating an additional
750,000 shares of the Company's Common Stock, $0.83-1/3 par value, thereby
increasing the number of authorized shares of said Common Stock from 2,201,334
to 2,951,334, such shares to be issued as authorized by the Board of Directors
for proper corporate purposes, subject to the requisite approval of the
Massachusetts Department of Telecommunications and Energy (formerly Department
of Public Utilities),
and Chapter 164. Section 8B
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date:
SIGNED UNDER, THE PENALTIES OF PERJURY, this 10th day of February l998
*President /
Bradford
'Clerk /
Robert J. Pollock
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 164, Section 8D
I hereby approve the within Articles of Amendment and, the filing fee in
the amount of $ having been paid, said articles are deemed
to have been filed with me this day of
1 9
2
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Effective date.-
FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Eric J. Krathwohl, Esq.
Rich, May, Bilodeau & Flaherty, P.C.
294 Washington Street
Boston, MA 02108
(617) 482-1360
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Exhibit 10z
AGREEMENT
This AGREEMENT made and entered into as of the first day of May,
1998 by and between the 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".
WITNESSETH
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 Fall River Gas 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;
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, Student
Engineers, Chief Clerk, Clerk, Engineer in Charge, Master Mechanic, Assistant
Master Mechanic, Foreman Engineer- Class A, Foreman Engineer-Class B, Yard
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
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open or expected to be open, or to fill new positions, to be authorized. Any
such employees who shall have been employed 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 is temporarily 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 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.
ARTICLE IV
Payroll Deductions
Section 1. The COMPANY agrees to deduct from earned wages and remit to
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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 May 1, 1998.
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 the Fall River Gas Company and the 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.
_____________19___
As Witness:
- ------------------------------ -------------------
Employee's Signature
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 contained in this Article 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
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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 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 person 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 the 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.
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, 1998, all employees then employed by the
COMPANY shall receive an increase in wages of three and one-half (3.5%) percent;
effective as of May 1, 1999, all employees then employed by the COMPANY shall
receive an increase in wages of three and one-half (3.5%) percent; effective as
of May 1, 2000, all employees then employed by the COMPANY shall receive an
increase in wages of three and one-half (3.5%) percent; effective as of May 1,
2001, all employees then employed by the COMPANY shall receive an increase in
wages of three (3.0%) percent.
Section 3. A. When Street Department employees are temporarily assigned
to function as a Shovel Operator or a Compressor Operator, either in the
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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 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 persons (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 persons which is
normally supervised by a foreman in attendance, the foreman is not present and
one of the persons 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 persons (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 (8) hours on each legal holiday listed in Section 6B below, provided
the employee works the entire work day or such part thereof as work is available
on both his scheduled work day next preceding 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 their
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, Good
Friday, Patriots Day, 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 (8) hours on a holiday, he shall
receive double time for such excess hours worked, but no additional holiday pay.
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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.
Section 7. When employees are scheduled to work on Sunday, they shall receive a
premium of twenty-five percent (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 two 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
Dollars ($19.00) for each night, plus compensation at time and one-half for
actual time worked.
B. Employees on stand-by call Saturdays and Sundays, including Saturday
and Sunday nights, shall receive Twenty-Seven Dollars and Fifty Cents ($27.50)
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
Dollars and Fifty Cents ($27.50) 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:
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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
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
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
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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, when 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. The
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 rehirings 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 the employee is 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 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
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recall period shall retain his original seniority date provided that he has
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
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 Service Persons 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 persons cannot complete satisfactorily
will also be catalogued.
C. Every six months, the COMPANY will review 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 in 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 in 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,
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and a program of education will be 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
persons over more senior persons 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.
ARTICLE IX
Leaves of Absence
Section 1. Allowance for sickness and nonoccupational 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 and five (205) days or more shall be credited with no further allowance
until their accumulation falls below two hundred and 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 and 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 the full allowance of
two hundred and 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 the two hundred and five (205) days; shall be paid an amount
equal to one third (1/3) of the unused days in excess of two hundred and five
(205) days based upon such employee's 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 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
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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-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 grandparent.
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 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:
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a. All occupational accidents must be bona fide and reported promptly to
the COMPANY.
b. Incapacity must be determined to be compensable under the Workmen's
Compensation Act of the Commonwealth of Massachusetts before being paid for.
c. 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 work,
with pay, for the transaction of UNION business, except for the purpose of
handling 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 a 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 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
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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 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 reason.
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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.
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 2B 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 persons 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
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Production 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 Service Persons to read meters. When Service Persons are assigned to read
meters and there are scatter meter readings also being done, the Meter Readers
shall read books and the Service Persons shall do the scatter readings. When
Service Persons are assigned to read meters, the most junior persons available
excluding employees who have not completed their six (6) months trial period in
the Service Department, will be assigned to such work.
Section 11. If service work on roof-top equipment requires the service of more
then one person, the COMPANY shall assign a second person to the job.
Section 12. The COMPANY agrees to arrange for the printing and will deliver to
the UNION without cost, one hundred and 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 unionized printer and to have the union logo or "bug" printed on
the cover of the Contract book.
Section 13. 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
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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 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 any state or federal authority, to operate COMPANY
vehicles.
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.
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
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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 UNION
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, 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:
a. 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.
b. 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.
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
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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 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. 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
regulation, and the same shall thereafter become a part of this Agreement.
Section 5. 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 6. If the UNION restricts its contract negotiating committee to five (5)
members, the COMPANY will pay for time lost from work by the
18
<PAGE>
members in negotiating a new contract. It being understood that the commitment
of the COMPANY to pay for the member of the UNION's negotiating team is limited
to the payment of the straight time hourly wages such member of the UNION
negotiating team would have earned on the day of negotiation and if such
employee is on a 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 7. 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.
Section 8. The COMPANY will post and fill, in accordance with the provisions of
this Agreement, one (1) "Senior Fitter." The one (1) "Senior fitter" position
will be filled by the most senior employee, having at least twenty-five (25)
years of service with the COMPANY, at least ten (10) years of seniority as a
Fitter-Class A and who is otherwise qualified by fitness and ability to perform
the job. The wage rate for the "Senior Fitter" is as listed in Exhibit A of this
Agreement. The filling of the position shall not be construed as having created
a vacancy in the classification from which the new "Senior Fitter" transferred.
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, 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:
a. Comply with such reasonable safety regulations which are now in effect
or may later become effective through the efforts of the safety committee.
19
<PAGE>
b. Use the protective devices, wearing apparel and other equipment
provided by the COMPANY for the protection of the employees from injury.
c. 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 "DOT Rules and Regs."),
it is the intention of Fall River Gas 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
Company's 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. Applicable employees 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 25% testing
schedule or/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 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.
20
<PAGE>
Department of Transportation ("DOT"), and/or 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 prescribed treatment, may be terminated.
E. 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 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.
G. Any employee of the Fall River Gas 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
21
<PAGE>
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 1998 Agreement, that
it will provide and pay for Blue Cross/Blue Shield "Blue Care Elect Preferred"
Group Plan Insurance with (deductibles) Wrap and Blue Card Rider, including
chiropractic, prescription drugs, and maternity benefits coverage, or a mutually
agreeable equivalent health plan, the UNION agrees that it will not unreasonably
withhold its agreement to an equivalent Health Plan proposed by the COMPANY and
the COMPANY will maintain the existing Health Plan during and until any dispute
over an equivalent Health Plan is resolved, without requiring the employees to
pay any additional cost for the Plan over the amount now paid for by the
COMPANY, except that from May 1, 1998, and continuing through April 30, 2001
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 and commencing May 1,
2001 each member of the bargaining unit will co-pay a portion of the cost of the
medical-health insurance in the amount of $11.00 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 be 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. 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.
C. 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.
D. 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
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<PAGE>
to 55 shall be one (1%) percent per year.
D. Effective May 1, 1987 the COMPANY will make the following 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 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 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 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. 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 during the term of this contract,
shall have the right to elect by written notice to the COMPANY made 30 days
prior to such employees date of retirement between the Present COMPANY Pension
Plan and the 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 ($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 amount of Five Thousand
Dollars ($5000), the premiums for the 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:
A. Dental Group I - Preventive Benefit Group - Full,
B.Dental Group II - Basic Benefit Group - Full
C. 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
D. Or a mutually agreeable equivalent Dental Plan for its employees,
both single and married.
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 coverages, at no cost, they
would have been entitled to if the employee had lived. The COMPANY will provide
said coverage, at no cost, for a period of the earlier of:
A. Two (2) years, commencing with the date of employee's death,
or
B. Until such time as the deceased's spouse remarries.
23
<PAGE>
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 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. The Long Term Disability Plan ("L.T.D. Plan") of the COMPANY will
provide for a benefit level of seventy percent (70%) of an employee's straight
time monthly salary. 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 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. 401K Plan: The COMPANY will maintain a 401K Plan for the members of
the Collective Bargaining Unit. For the term of the current Contract, the
COMPANY will make a matching contribution of One Dollar ($1.00) for each One
Dollar ($1.00) of the employee's salary deferral contribution to said plan, to a
maximum amount of three percent (3%) the employee's annual earnings.
Section 12. A. Successor or Assigns Clause: This clause shall be binding on any
and all successors and assigns of the Fall River Gas Company, whether by sale,
transfer, merger, acquisition, consolidation, or otherwise, of the COMPANY or
part of the COMPANY. The Fall River Gas Company shall make it a written
condition of transfer that the successor or assigns shall be bound by all the
terms, provisions and intents of this Agreement.
B. The Fall River Gas Company shall notify the union, in writing,
within 24 hours, or as soon as practical, of any final decision to
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<PAGE>
convey, or otherwise transfer or assign to another entity, any of the
operations covered by the agreement.
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 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.
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FALL RIVER GAS COMPANY
By: Bradford J. Faxon, President & CEO
UTILITY WORKERS UNION OF AMERICA, AFL/CIO
LOCAL #431
By: James R. Tavares, President
By: Boetius W. Sullivan
By: Paul Camara
By: Mathew J. Stukus
By: Albert A. Senechal
By: John Holland, Jr.
National Representative of
Utility Workers Union of America, AFL/CIO
See "Letter of Understanding" attached hereto as Exhibit "E".
EXHIBIT A
<TABLE>
<CAPTION>
I II III IV
ULTIMATE ULTIMATE ULTIMATE ULTIMATE
BASE RATE BASE RATE BASE RATE BASE RATE
5/1/98 5/1/99 5/1/00 5/1/01
3.5% 3.5% 3.5% 3.0%
<S> <C> <C> <C> <C>
CLASSIFICATION
STREET DEPARTMENT:
Welder - Class A 20.14 20.845 21.575 22.22
Trench Shovel Operator 20.14 20.845 21.575 22.22
Compressor Operator-Blaster 19.835 20.53 21.25 21.89
Compressor Operator 19.335 20.01 20.71 21.33
Utility Street Person 18.99 19.655 20.345 20.955
Truck Driver 18.99 19.655 20.345 20.955
Utility Person - Janitor 18.93 19.595 20.28 20.89
Street Person - Class A 18.57 19.22 19.895 20.49
Street Person - Class B 17.855 18.48 19.125 19.70
Street Person - Class C 17.245 17.85 18.475 19.03
Building Maintenance Person 17.09 17.69 18.31 18.86
CUSTOMER SERVICE DEPARTMENT:
Service Engineer Leader 23.765 24.595 25.455 26.22
Service Engineer 22.555 23.345 24.16 24.885
Appliance Utilization Person 22.555 23.345 24.16 24.885
Service Person - Class A 20.06 20.76 21.485 22.13
Service Person - Class B 19.12 19.79 20.485 21.10
Senior Fitter 21.195 21.935 22.705 23.385
Fitter - Class A 20.345 21.055 21.79 22.445
Fitter - Class B 18.99 19.655 20.345 20.955
Appliance Installer - A 18.99 19.655 20.345 20.955
Appliance Installer - B 18.315 18.955 19.62 20.21
Utility Service Person 19.775 20.465 21.18 21.815
Helper - Class A 18.315 18.955 19.62 20.21
Helper - Class B 17.615 18.23 18.87 19.435
Helper - Class C 17.09 17.69 18.31 18.86
Building Maintenance Person 17.09 17.69 18.31 18.86
</TABLE>
METER SHOP DEPARTMENT:
26
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Meter Repair Person - Class A 20.495 21.21 21.95 22.61
Meter Repair Person - Class B 19.025 19.69 20.38 20.99
Helper - Class A 18.315 18.955 19.62 20.21
Helper - Class B 17.615 18.23 18.87 19.435
Helper - Class C 17.09 17.69 18.31 18.86
GARAGE DEPARTMENT:
Automotive Mechanic 19.66 20.35 21.06 21.69
Asst. Automotive Mechanic 18.99 19.655 20.345 20.955
EXHIBIT A - (Continued)
I II III IV
ULTIMATE ULTIMATE ULTIMATE ULTIMATE
BASE RATE BASE RATE BASE RATE BASE RATE
5/1/98 5/1/99 5/1/00 5/1/01
3.5% 3.5% 3.5% 3.0%
CLASSIFICATION
STOREROOM DEPARTMENT:
Stock Person A 18.805 19.465 20.145 20.75
Stock Person B 18.035 18.665 19.32 19.90
Stock Person C 17.615 18.23 18.87 19.435
Stock Person - Helper 17.09 17.69 18.31 18.86
METER READING DEPARTMENT:
Meter Reader A 18.595 19.245 19.92 20.52
Meter Reader B 17.725 18.345 18.985 19.555
Meter Reader C 16.975 17.57 18.185 18.73
PRODUCTION DEPARTMENT:
Operator A 20.06 20.76 21.485 22.13
Operator B 19.12 19.79 20.485 21.10
Operator C 18.32 18.96 19.625 20.215
</TABLE>
EXHIBIT B
DEPARTMENTAL SENIORITY LIST
AS OF
MAY 1, 1998
Name Seniority Date
METER SHOP DEPARTMENT
Tacovelli, P.F. June 3, 1974
Ferreira, D. April 22, 1991
CUSTOMER SERVICE DEPARTMENT
R.A.Doucette June 14, 1957
P.W. Bosi June 8, 1964
W.E. Fitzgerald September 20, 1965
J.R. Tavares October 25, 1965
M.E. Perry October 14, 1969
N. Santarpia January 5, 1970
J.F. Daugherty November 17, 1971
E.P. King, Jr. January 24, 1972
D.A. Salvo August 6, 1979
R. Rutter April 28, 1980
D. Cordeiro October 12, 1982
F. Carreiro, Jr. May 16, 1983
G.M. Nunes March 24, 1986
C.P. Duarte December 12, 1986
J.P. Stanton January 2, 1987
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L.R. Rosa June 1, 1987
K.A. Viveiros July 13, 1987
W.F. Heffernan May 10, 1988
P.G. Leite September 1, 1988
K.R. Barboza November 7, 1988
J.J. Pacheco November 7, 1988
R.M. Brum June 26, 1989
P.D. Camara October 1, 1990
C.J. Cabral October 9, 1990
P.H. Dumas April 29, 1991
P.M. Mahoney September 8, 1992
J.W. Aguiar November 1, 1992
D.J. Machado January 4, 1993
T.P. Botelho October 25, 1993
J.M. DeSantis March 7, 1994
D.M. Moraes November 21, 1994
B.G. Chasse March 6, 1995
STREET DEPARTMENT
J.D. Amedeo October 16, 1967
E.P. Correia, Jr. March 16, 1970
M.E. LaFlamme November 8, 1972
J.B. Connolly June 17, 1974
R.T. Bielawski January 9, 1978
A.J. Lord, Jr. May 21, 1979
L.J. Como August 18, 1980
B.W. Sullivan November 30, 1981
EXHIBIT B (Continued)
DEPARTMENTAL SENIORITY LIST
AS OF
MAY 1, 1998
Name Seniority Date
J. Mikolazyk April 20, 1982
A.A. Senechal November 7, 1983
M. Mello December 8, 1986
F.W. Pillsbury June 3, 1987
W.R. Souza June 29, 1987
K.M. Cadorette September 14, 1987
J.H. Sylvia August 17, 1988
R.C. Curry, Jr. November 23, 1988
R.S. Ferreira April 10, 1989
J.J. Grygiel June 26, 1989
T.F. Delzenero July 10, 1989
B.P. Benevides January 15, 1990
METER READING DEPARTMENT
F. Pedro, Jr. December 5, 1977
R.N. Caron January 5, 1981
J.T. Portela January 4, 1982
S.P. Nadeau February 19, 1986
R.J. Madore March 10, 1986
R.E. Rosa January 4, 1988
D.M. Portela September 15, 1988
K.J. Garant December 11, 1989
STORE ROOM DEPARTMENT
M.J. Gorman January 24, 1955
A.G. Wichmann February 16, 1971
PRODUCTION DEPARTMENT
K.E. Oldrid December 19, 1977
M.F. Cyr October 15, 1979
P. Walsh February 23, 1981
G.L. Emard June 1, 1981
M.J. Stukus May 9, 1983
B.E. Santos August 29, 1983
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<PAGE>
J.F. Marshall, Jr. June 22, 1987
P.R. Dumas September 19, 1994
K.C. Beaudry April 1, 1996
P.D. Levesque May 13, 1996
EXHIBIT C
COMPANY SENIORITY LIST
AS OF
May 1, 1998
Name Seniority Date
M.J. Gorman January 24, 1955
R.A. Doucette June 24, 1957
P.W. Bosi June 8, 1964
W.E. Fitzgerald September 20, 1965
J.R. Tavares October 25, 1965
J.D. Amedeo October 16, 1967
M.E. Perry October 14, 1969
N. Santarpia January 5, 1970
E.P. Correia, Jr. March 16, 1970
A.G. Wichmann February 16, 1971
J.F. Daugherty November 17, 1971
E.P. King, Jr. January 24, 1972
M.E. LaFlamme November 8, 1972
P.F. Tacovelli June 3, 1974
J.B. Connolly June 17, 1974
F. Pedro, Jr. December 5, 1977
K.E. Oldrid December 19, 1977
R.T. Bielawski January 9, 1978
A.J. Lord, Jr. May 21, 1979
D.A. Salvo August 6, 1979
M.F. Cyr October 15, 1979
R. Rutter April 28, 1980
L.J. Como August 18, 1980
R.N. Caron January 5, 1981
P. Walsh February 23, 1981
G.L. Emard June 1, 1981
B.W. Sullivan November 30, 1981
J.T. Portela January 4, 1982
J. Mikolazyk April 20, 1982
D. Cordeiro October 12, 1982
M.J. Stukus May 9, 1983
F. Carreiro, Jr. May 16, 1983
B.E. Santos August 29, 1983
A.A. Senechal November 7, 1983
S.P. Nadeau February 19, 1986
R.J. Madore March 10, 1986
G.M. Nunes March 24, 1986
M. Mello December 8, 1986
C.P. Duarte December 12, 1986
J.P. Stanton January 2, 1987
L.R. Rosa June 1, 1987
F.W. Pillsbury June 3, 1987
J.F. Marshall, Jr. June 22, 1987
W.R. Souza June 29, 1987
K.A. Viveiros July 13, 1987
R.E. Rosa January 4, 1988
W.F. Heffernan May 10, 1988
J.H. Sylvia August 17, 1988
P.G. Leite September 1, 1988
EXHIBIT C- (Continued)
COMPANY SENIORITY LIST
29
<PAGE>
AS OF
May 1, 1998
Name Seniority Date
D.M. Portela September 15, 1988
J.J. Pacheco November 7, 1988
K.R. Barboza November 7, 1988
R.C. Curry, Jr. November 23, 1988
R.S. Ferreira April 10, 1989
K.M. Cadorette May 1, 1989
R.M. Brum June 26, 1989
J.J. Grygiel June 26, 1989
T.F. Delzenero July 10, 1989
K.J. Garant December 11, 1989
B.P. Benevides January 15, 1990
P.D. Camara October 1, 1990
C.J. Cabral October 9, 1990
D. Ferreira April 22, 1991
P.H. Dumas April 29, 1991
P.M. Mahoney September 8, 1992
J.W. Aguiar November 1, 1992
D.J. Machado January 4, 1993
T.P. Botelho October 25, 1993
J.M. DeSantis March 7, 1994
P.R. Dumas September 19, 1994
D.M. Moraes November 21, 1994
B.G. Chasse March 6, 1995
K.C. Beaudry April 1, 1996
P.D. Levesque May 13, 1996
EXHIBIT D
FALL RIVER GAS COMPANY
PROGRESSION PLAN
Street Department
Street Person - Class C
Street Person - Class B -- 1 year as Street Person Class C Street Person -
Class A -- 2 years as Street Person Class B Utility Person -
(1) able to perform inspectors duties
(2) qualified to act as temporary foreman
(3) have at least 2 years' experience as a Street
Person Class A
Customer Service Department
Helper - Class C
Helper - Class B - 1 year as Helper Class C Appliance Installer - Class B -
1 year as Helper Class B
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Appliance Installer - Class A - able to perform all duties required in the
delivery of appliances and installation of gas appliances to existing lines.
Promotion to Appliance Installer - Class- A, will be made only as and when a job
opening occurs, at which time the opening will be filled in accordance with the
provisions of the contract.
Helper - Class A - 1 year as Helper Class B
Service Person - Class B - 1 year as helper Class A
Service Person - Class A - Able to perform all service work with the
exception of being a completely experienced air conditioning and industrial
service and have completed 3 years as a Service Person-Class B.
Service Engineer - Able to completely service all types of equipment
and completed at least 3 years as a Service Person Class A. The number of
Service Engineer jobs shall be limited to the number of Service Engineers that
are reasonably required by the demands of the COMPANY'S business. Promotions to
the job of Service Engineer will be made only as and when a job opening occurs,
at which time the job opening will be filled in accordance with the provisions
of the contract.
Fitter - Class B - 1 year as a Helper Class A
Fitter - Class A - Able to perform all fitting work
Senior Fitter- (See Article XV, Section 8)
Meter Shop
Helper Class C
Helper Class B - 1 year as Helper Class C
Helper Class A - 1 year as Helper Class B
Meter Repair Person - Class B - 1 year as Helper Class A
Meter Repair Person - Class A - 1 year as Meter Repair Person Class B
Storeroom
Stock Person -Helper
Stock Person C - 6 months as Stock Person-Helper
Stock Person B - 6 months as Stock Person C
Stock Person A - 6 months as Stock Person B
Meter Reading Department
Meter Reader C
Meter Reader B - 1 year as Meter Reader C
Meter Reader A - 1 year as Meter Reader B
Production Department
Operator C
Operator B -- 1 year as Operator C
Operator A -- 1 year as Operator B
EXHIBIT E
LETTER OF UNDERSTANDING
1. It is recognized that the gas utility industry is undergoing, and will
continue even more radically in the future to undergo, significant changes as a
result of governmental regulations and orders relating to gas production, pipe
line gas supply, ecological restrictions, consumer and customer serving,
de-regulation, et cetera. As a result of all this, it is impossible for the
COMPANY to forecast its personnel problems or the size of its required staff of
employees. Nevertheless, for a period of 4 years from date, and only for that
period, the COMPANY and the UNION agree that the provisions of Article V,
Section 5 shall be applicable to and binding upon employees with 5 or more
consecutive years of service with the COMPANY. At the end of that 4-year period,
this "Letter of Understanding" shall be null and void and no longer binding upon
the COMPANY or the UNION.
2. In the event rain, snow or other weather conditions are so severe that
regular work cannot reasonably be performed by them, the COMPANY will authorize
Meter Readers to return to the Service Department for assignment to other work
during such severe weather conditions.
3. The COMPANY will post job openings for Service Engineer Leader and for
Service Engineer in accordance with the provisions of Section 5 of Article VIII
of the Agreement.
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4. As soon as administratively possible, after May 1, 1998, if legally
permissible, the percentage, bargaining unit members are allowed to contribute
to their 401-K plan, will be increased to twenty percent (20%) subject to the
dollar amount of the legal limit. The legal dollar amount limit for 1998 is Ten
Thousand Dollars ($10,000).
If the twenty percent (20%) figure is found to be not legally permissible,
then the percentage will be raised to the percentage that is as high as allowed.
If the twenty percent (20%) figure is found not to be legal, conclusive evidence
will be provided to the UNION to validate this finding.
5. The medical health insurance "wrap" (currently with Benemax), will be, as
presented to the bargaining unit at their meeting on April 8, 1998. The "wrap"
will include Master Health Plus benefit levels-in or out of network, full
freedom to use any doctor or hospital-in or out of network and added wellness
benefits. For the duration of this collectively bargained agreement, the COMPANY
will take no action to alter the provisions of the "wrap". It is further agreed
that, the word "wrap" is a generic term and is not solely dependent on the
utilization or existence of any particular company.
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Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Fall River Gas Company
As independent public accountants, we hereby consent to the
incorporation by reference in the registration statement on Form S-3, File
No. 333-13995 of our reports dated November 17, 1998, included in Fall River
Gas company Form 10-K for the year ended September 30, 1998, and to all
references to our firm included in this registration statement.
/S/ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 29, 1998