<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
DIRECTOR SHARE PLAN
March 1, 1994
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
DIRECTOR SHARE PLAN
1. Each non-employee Director of New England Electric System
serving on May 1 of each year shall receive 200 common shares of
New England Electric on such date.
2. All shares awarded under this Plan which are subject to
this Article shall not be commuted, sold, assigned, transferred, or
otherwise conveyed, whether voluntarily or involuntarily, for a
period of six months from the date of grant (May 1), other than the
disposition of plan securities pursuant to a qualified domestic
relations order as defined in the Internal Revenue Code or Title I
of the Employee Retirement Income Security Act, or the rules
thereunder, or other than by will or the laws of descent and
distribution.
Participants hold all voting, tender offer, exchange offer,
and dividend rights to Plan Shares during the period of the
restriction.
3. The Board of Directors may terminate the Plan at any
time; provided, however, that no such action shall affect any right
with respect to shares granted but not yet delivered hereunder.
<PAGE>
4. Any amendment to the Plan which would materially increase
the benefits accruing to participants under the Plan, materially
increase the number of securities which may be issued under the
Plan, or materially modify the requirements as to eligibility for
participation in the Plan must be approved by the affirmative vote
of the holders of a majority of the common shares of the Company
present, or represented, and entitled to vote at a meeting duly
held.
5. Except as otherwise required by law, the Plan and all
matters arising thereunder shall be governed by the laws of The
Commonwealth of Massachusetts.
Date:
