<PAGE>
April 4, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Yankee Energy System, Inc.
Form S-8
Ladies and Gentlemen:
We are filing today by electronic EDGAR submission Yankee
Energy System, Inc.'s Form S-8.
Please call the undersigned if you have any questions.
Very truly yours,
/s/ Mary J. Healey
Vice President, General Counsel
and Secretary
(203)639-4405
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Yankee Energy System, Inc.
(Exact name of registrant as specified in its charter)
Connecticut 06-1236430
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
599 Research Parkway
Meriden, Connecticut 06450-1030
(203) 639-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive
offices)
1991 Yankee Energy Long-Term Incentive Compensation Plan
(Full title of the plan)
MARY J. HEALEY
Vice President, General Counsel and Secretary
599 Research Parkway
Meriden, CT 06450-1030
(203) 639-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please address a copy of all communications to:
SCOTT L. MURPHY, ESQ.
Shipman & Goodwin
One American Row
Hartford, CT 06103-2819
(203) 251-5000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to be to be Price Per Offering Registration
Registered Registered Share (2) Price (2) Fee
Common Stock, Par
Value $5.00(1) 163,004 $20.25
to $21.63 $3,388,257 $1,168
</TABLE>
(1) The Registration Statement also pertains to Rights to
purchase one share of Common Stock of the Registrant (the
"Rights"). Until the occurrence of certain prescribed events,
the Rights are not exercisable, are evidenced by the certificates
for Yankee Energy System, Inc. Common Stock and will be
transferred only with such securities.
(2) Estimated solely for the purpose of calculating the
registration fee. Pursuant to Rule 457(h), the proposed maximum
offering price per share is based, with respect to the 64,600
shares subject to outstanding options under the plan, on exercise
prices of $21.375 to $21.63 per share, and with respect to the
remaining 98,404 shares, on the average of the high and low
prices of the Registrant's common stock on the New York Stock
Exchange Composite Tape on March 28, 1995.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information statement being delivered by Yankee Energy
System, Inc. (the "Company") to participants in the Company's
"1991 Yankee Energy Long-Term Incentive Compensation Plan (the
"Plan"), as required by Rule 428 under the Securities Act of
1933, as amended (the "Securities Act"), has been prepared in
accordance with the requirements of Form S-8 and relates to
shares of common stock, par value $5.00 per share, issued or
reserved for issuance pursuant to awards under the Plan. The
information with respect to awards granted under the Plan
required in the Section 10(a) prospectus is included in documents
being maintained and delivered by the Company as required by Rule
428 under the Securities Act. The Company shall provide to
participants a written statement advising them of the
availability without charge, upon written or oral request, of
documents incorporated by reference herein, as is required by
Item 2 of Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, previously filed with the
Commission, are hereby incorporated by reference in this
registration statement:
(a) Yankee Energy's Annual Report on Form 10-K for the
year ended September 30, 1994;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994, and Current Report on Form 8-K
dated December 6, 1994;
(c) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year
covered by the registrant document referred to in (a) above;
(d) The description of the Shares contained in the
Registration Statement on Form 10 dated April 14, 1989, filed
under the 1934 Exchange Act, including any amendment or report
filed for the purpose of updating such description; and
(e) The description of the Company's Rights contained in
the Company's 1934 Exchange Act Registration Statement on Form 8-
A filed with the Commission on December 6, 1989, including any
amendment or report filed for the purpose of updating such
description.
In addition, all documents subsequently filed by Yankee
Energy pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of
filing of such documents. The documents described above are
hereinafter referred to as "Incorporated Documents."
<PAGE>
Any statement contained herein or in an Incorporated
Document shall be deemed to be modified or superseded for
purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
registration statement.
Item 4. Description of Securities.
This item is not applicable.
Item 5. Interests of Named Experts and Counsel.
This item is not applicable.
Item 6. Indemnification of Directors and Officers.
Section 33-320a of the Stock Corporation Act of Connecticut
("Section 33-320a") requires the Company, in certain
circumstances and subject to certain limitations therein set
forth, to indemnify each of its directors and officers, among
others, made a party to any threatened, pending or completed
legal proceeding by reason of his or her being or having been
such a director or officer, against expenses, including
attorneys' fees, incurred by him or her, and, in addition in the
case of any such proceeding other than one by or in the right of
the Company, against judgments, fines and penalties incurred, and
settlement amounts paid, by him or her in connection with such
proceeding. Article VI of the Bylaws of the Company provides for
indemnification of directors and officers, among others, to the
fullest extent now or hereafter permitted by law. The rights and
remedies provided in Section 33-320a are exclusive, so Article VI
of the Bylaws of the Company does not at present add to the
indemnification rights of directors and officers.
Section 33-320a authorizes the Company to procure insurance
providing greater indemnification than that authorized by Section
33-320a. The Company has purchased insurance policies which
insure
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directors and officers of the Company and of certain of its
subsidiaries against certain liabilities which might be incurred
by them in such capacities and which insure the Company for
amounts which may be paid by it to indemnify the directors and
officers covered by the policies.
Item 7. Exemption from Registration Claimed.
This item is not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this
Registration Statement or incorporated by reference herein:
<PAGE>
Exhibit Number Description of Exhibits
4.1 Restated Certificate of Incorporation of the
Company (filed as an Exhibit in the Company's
Registration Statement on Form 10 dated April 14, 1989 ("Form
10"))
4.2 Amended Bylaws of the Company (filed in Form 10)
4.3 Description of the Company's common stock and specimen
of the Company's common stock contained in the Company's
Registration Statement in Form 10
4.4 Rights Agreement dated as of November 20, 1989, between
the Company and Rights Agent named therein, as amended (filed in
the Company's Registration Statement on Form 8-A, dated December
6, 1989), as amended by Amendment No.1 dated as of May 10, 1990
(filed in the Company's Form 8, dated May 30, 1990), as further
amended by Amendment No. 2 dated as of January 23, 1991 (filed in
the Company's Form 8, dated January 31, 1991)
5 Opinion of Shipman & Goodwin*
15 Awareness Letter of Independent Accountants, Arthur
Andersen LLP*
23.1 Consent of Independent Accountants, Arthur Andersen
LLP*
23.2 Consent of Shipman & Goodwin (included in Exhibit 5)*
24 Power of Attorney (included in Page II-5 of this
Registration Statement)*
_________
* Filed herewith
Item 9. Undertakings.
<PAGE>
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling persons of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director,
<PAGE>
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Meriden and State of
Connecticut on the 4th day of April, 1995.
YANKEE ENERGY SYSTEM, INC.
BY /s/ BRANKO TERZIC
Branko Terzic, President and
Chief Executive Officer
POWER OF ATTORNEY
Each director and/or officer of the Registrant whose
signature appears below hereby appoints Michael E. Bielonko,
Charles E. Gooley and Mary J. Healey, and each of them severally,
as his or her attorney-in-fact to sign in his or her name and
behalf, in any and all capacities stated below and to file with
the Commission, any and all amendments, including post-effective
amendments, to this Registration Statement.
____________________________
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by
the following persons in the capacities and on the date
indicated.
Signature Title Date
/s/ BRANKO TERZIC President, Chief April 4, 1995
Branko Terzic Executive Officer
and Director
(Principal Executive
Officer)
<PAGE>
/s/ MICHAEL E. BIELONKO Vice President, April 4, 1995
Michael E. Bielonko Treasurer and Chief
Financial Officer
(Principal Financial Officer)
/s/ NICHOLAS A. RINALDI Controller April 4, 1995
Nicholas A. Rinaldi (Principal Accounting
Officer)
/s/ PHILIP T. ASHTON Chairman April 4, 1995
Philip T. Ashton
/s/ EILEEN S. KRAUS Director April 4, 1995
Eileen S. Kraus
/s/ FREDERICK M. LOWTHER Director April 4, 1995
Frederick M. Lowther
/s/ THOMAS H. O'BRIEN Director April 4, 1995
Thomas H. O'Brien
/s/ LEONARD A. O'CONNOR Director April 4, 1995
Leonard A. O'Connor
/s/ EMERY G. OLCOTT Director April 4, 1995
Emery G. Olcott
/s/ NICHOLAS L. TRIVISONNO Director April 4, 1995
Nicholas L. Trivisonno
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EXHIBIT INDEX
Exhibit Number Description of Exhibits Sequentially
Numbered Page
5 Opinion of Shipman & Goodwin
15 Awareness Letter of
Independent Accountants,
Arthur Andersen LLP
23.1 Consent of Independent Accountants,
Arthur Andersen LLP
23.2 Consent of Shipman & Goodwin
(included in Exhibit 5)
24 Power of Attorney (included in Page II-5
of this Registration Statement).
99 1991 Yankee Energy Long-Term
Incentive Compensation Plan
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EXHIBIT 5
April 4, 1995
Yankee Energy System, Inc.
599 Research Parkway
Meriden, CT 06450-1030
Ladies and Gentlemen:
In connection with the proposed issuance by Yankee Energy
System, Inc. (the "Company") of up to 163,004 shares of its
Common Stock, par value $5.00 per share (the "Shares"), pursuant
to the Company's 1991 Long-Term Incentive Compensation Plan, we
have examined, as counsel to the Company, the Registration
Statement on Form S-8, filed under the Securities Act of 1933
(the "Securities Act") and such other documents as we have deemed
necessary or appropriate in order to express the opinion set
forth below.
In connection with our opinion hereinafter given, we have
examined and relied upon originals, or copies, certified or
otherwise, identified to our satisfaction, of such agreements,
documents, certificates and other statements of government
officials, corporate officers and representatives and other
documents as we have deemed relevant and necessary as a basis for
such opinion. In such examination, we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with
the original documents of documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that when
(i) the Registration Statement shall have become effective, and
(ii) the Shares shall have been issued and delivered against
payment therefor as contemplated in the Registration Statement,
the Shares will be legally and validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. In giving this consent,
we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and
Exchange Commission.
Very truly yours,
Shipman & Goodwin
<PAGE>
EXHIBIT 15
April 4, 1995
Yankee Energy System, Inc.
599 Research Parkway
Meriden, CT 06450-1030
We are aware that Yankee Energy System, Inc. has
incorporated by reference in its Form S-8 Registration Statement
its Form 10-Q for the quarter ended December 31, 1994, which
includes our report dated January 31, 1995 covering the unaudited
interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933 (the "Act"), that
report is not considered a part of a registration statement
prepared or certified by our firm within the meaning of Sections
7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our
reports dated November 21, 1994 incorporated by reference in the
Yankee Energy System, Inc. Form 10-K for the year ended September
30, 1994, and to all references to our firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 4, 1995
<PAGE>
Exhibit 99
YANKEE ENERGY SYSTEM, INC.
1991 LONG-TERM INCENTIVE COMPENSATION PLAN
Article 1. General Provisions
1.1 Title
This document shall be known as the 1991 Yankee Energy Long-
Term Incentive Compensation Plan (herein referred to as the
"Plan").
1.2 Purpose
The purposes of the Plan are (i) to attract and retain
outstanding executives in key management positions of the Company
and its subsidiaries, (ii) to promote the achievement of long-
term corporate goals through the use of performance-based
incentives, (iii) to create parallel interests between executives
and shareholders by providing for some portion of executive
compensation in the form of common stock, and (iv) to reward
performance and to foster company identification on the part of
key middle managers.
1.3 Definitions
As used herein, the following terms shall have the meanings
set forth below:
(a) "Administrative Provisions" means the provisions
governing the administration of the Plan adopted pursuant to
Section 1.4 of the Plan.
(b) "Award" means an award of Restricted Common Shares,
Stock Options or Stock Appreciation Rights pursuant to Articles 2
through 4 of the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means (i) the acquisition by a
third person, including a "person" as defined in Section 13(d)(3)
of the
<PAGE>
Exchange Act, of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities of
the Company representing twenty-five percent (25%) or more of the
total number of votes that may be cast for the election of the
directors of the Company; or (ii) as the result of, or in
connection with, any tender or exchange offer, merger,
consolidation or other business combination, sale of assets or
one or more contested elections, or any combination of the
foregoing transactions, the persons who were directors of the
Company shall cease to constitute a majority of the Board of the
Company.
(e) "Committee" means the Organization and Compensation
Committee of the Board, or such other Committee of the Board as
shall be charged with the administration of the Plan.
(f) "Company" means Yankee Energy System, Inc., a
Connecticut corporation, or any successor corporation.
(g) "Executive Officer" means any Chief Executive Officer,
President, Executive Vice President, Senior Vice President, or
Vice President of the Company or its public utility subsidiary,
Yankee Gas Services Company.
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended and in effect from time to time, or any
successor statute.
(i) "Fair Market Value" means, on the relevant date, the
last quoted price of the Company's common shares or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market or, if the shares are listed or admitted
to trading on an exchange, the average of the high and low prices
of the Company's common shares as reported by such exchange.
(j) "Incentive Stock Option" means any Stock Option granted
pursuant to Article 3 of the Plan that complies with the
definition of "incentive stock option" within the meaning of
Section 422A of the Internal Revenue Code or its successor
statute.
(k) "Non-Qualified Stock Option" means any stock option
<PAGE>
granted pursuant to Article 3 of the Plan that is not an
Incentive Stock Option.
(l) "Participant" means an officer or employee of the
Company or a subsidiary who is granted an Award under the Plan.
(m) "Plan" means this 1991 Long-Term Incentive Compensation
Plan, as it may be amended from time to time in accordance with
its provisions.
(n) "Restricted Common Shares" means common shares of the
Company granted pursuant to Section 2.1 of the Plan.
(o) "Stock Appreciation Right" means an Award entitling a
Participant to receive an amount equal to (or if the Committee
shall determine at the time of grant, less than) the excess of
the Fair Market Value of a share of Common Stock on the date of
exercise over the Fair Market Value of a share of Common Stock on
the date of grant of the Stock Appreciation Right, or such other
price as set by the Committee, multiplied by the number of common
shares with respect to which the Stock Appreciation Right shall
have been exercised.
(p) "Stock Option" means an Award to purchase common shares
granted pursuant to Article 3 of the Plan.
(q) "Subsidiary" means any corporation or entity in which
the Company directly or indirectly controls 50% or more of the
total voting power of all classes of stock having voting power.
1.4 Administration
The Plan shall be administered by the Committee. Each
member of the Committee shall be a "disinterested person" as that
term is defined in Rule 16b-3 promulgated under the Exchange Act,
as such Rule now exists or as it may be amended and in effect
from time to time, or any successor to such Rule. Subject to
limitations contained in the Plan, the Committee shall have
authority (i) to select Participants, (ii) to make Awards under
the Plan and
<PAGE>
establish the terms and conditions of such Awards, (iii) to
determine the frequency of awards under the Plan, (iv) to adopt,
amend and rescind Administrative Provisions under the Plan, (v)
to interpret the Plan and (vi) to delegate its responsibilities
to others, except those responsibilities with respect to the
selection for participation of, and the granting of Awards to,
persons subject to Sections 16(a) and (b) of the Exchange Act.
1.5 Term
The Plan shall be effective upon approval by the Company's
shareholders and shall terminate on September 30, 2000, except
with respect to Awards then outstanding.
1.6 Shares of Common Stock Subject to the Plan
The maximum number of shares that may be awarded under the
Plan, subject to adjustment as provided in Section 6.3, shall be
two percent (2 0/0), rounded to the nearest whole number, of the
total issued and outstanding shares of the Company's common stock
at the time of approval of the Plan by the Company's
shareholders. For the purpose of computing the total number of
common shares available for Awards under the Plan, there shall be
counted against the foregoing limitation the number of common
shares subject to issuance upon exercise or settlement of Awards.
If any Award is forfeited, terminated, expires unexercised,
settled in cash in lieu of stock or exchanged for other Awards,
the number of shares represented by such Award shall again be
available for award under the Plan. Furthermore, any common
shares that are used as full or partial payment to the Company by
a Participant of the purchase price of common shares upon
exercise of a Stock Option shall again be available for Awards
under the Plan, as shall any shares covered by Stock Appreciation
Rights that are not issued as payment upon exercise. Common
shares that may be awarded under the Plan, at the Company's
election, may be shares that are authorized and unissued, that
have been authorized and issued or that have been issued and
reacquired by the Company. No fractional shares may be awarded
under the Plan.
1.7 Eligibility for Awards
Persons eligible for Awards under the Plan shall be officers
<PAGE>
and executive and managerial employees of the Company or its
Subsidiaries who serve in policy making roles or whose
performance, in the Committee's opinion, has contributed or will
contribute materially to the success of the Company or its
Subsidiaries; provided, however, that no Award may be made to a
member of the Committee or to a former member of the Committee
for one year after he or she ceases to be such a member.
1.8 Types of Awards
The Committee may make Awards under the Plan in the form of
Restricted Common Shares, Stock Options, Stock Appreciation
Rights or any combination of the foregoing.
1.9 Criteria for Awards
In determining whether to grant a Participant an Award under
the Plan, the Committee shall consider such factors as it deems
appropriate, including but not limited to the Company's financial
condition, the Participant's performance, and the value of the
Participant to the Company. The Committee shall have sole
discretion as to whether to grant an Award, the amount and type
thereof and any terms or conditions attached to the Award. Any
determination, decision or action of the Committee in connection
with the construction, interpretation, administration or
application of the Plan shall be final, conclusive and binding
upon all Participants and any person claiming under or through a
Participant and may not be challenged before any court, authority
or tribunal.
1.10 Frequency of Awards
Awards to Participants shall be on a regular, periodic basis
for Participants who are Executive Officers, unless the Committee
finds such regular Awards to be inappropriate.
Article 2. Restricted Shares
2.1 Restricted Share Awards
The Committee may grant a Participant an Award of shares of
common stock subject to such terms and conditions as the
Committee
<PAGE>
deems appropriate, including, without limitation, restrictions on
the pledging, sale, assignment, transfer or other disposition of
such shares and the requirement that the Participant forfeit all
or a portion of such shares back to the Company upon voluntary or
other termination (for any reason other than death, permanent and
total disability, normal retirement as defined in the Company's
pension plan or early retirement with the approval of the Board).
2.2 Restricted Shares Agreement
Each Participant receiving an Award of Restricted Common
Shares shall enter into an agreement with the Company in a form
specified by the Committee agreeing to such terms and conditions
of the Award as the Committee deems appropriate.
2.3 Effect of Termination of Employment
If, prior to the lapse of restrictions applicable to
Restricted Common Shares, the Participant ceases to be an
employee of the Company or its subsidiaries for any reason other
than death, permanent and total disability, normal retirement or
early retirement with the approval of the Board, the Restricted
Common Shares awarded to such Participant, as to which
restrictions have not lapsed, shall be forfeited to the Company,
effective on the date of the Participant's termination of
employment. The Committee shall have the sole power to decide in
each case to what extent leaves of absence shall not be deemed a
termination of employment.
Article 3. Stock Options
3.1 Form of Opinions
Stock Options granted under the Plan may be in the form of
Incentive Stock Options or Non-Qualified Stock Options. Such
Stock Options shall be subject to the terms and conditions of
this Article and shall contain such additional terms and
conditions, not inconsistent with the express provisions of the
Plan, as the Committee shall deem desirable. Stock Options may
be granted alone or in addition to other Awards under the Plan.
<PAGE>
3.2 Exercise Price
The option exercise price per common share purchasable under
a Stock Option shall be determined by the Committee at the time
of grant, but in no event shall the exercise price be less than
one hundred percent (100%) of the Fair Market Value of the Common
Stock on the date of the grant of such Stock Option.
3.3 Term
The term of each Stock Option shall be fixed by the
Committee; except that the term of Incentive Stock Options shall
not exceed ten (10) years after the date the Incentive Stock
Option is granted.
3.4 Exercise of Option
A Stock Option shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined
by the Committee at the date of grant; provided, however, that no
Stock Option shall be exercisable during the first six (6) months
after the date of such Stock Option is granted. Except as
provided in Section 6.4 of the Plan, no Stock Option may be
exercised unless the holder thereof is at the time of such
exercise in the employ of the Company or a Subsidiary and has
been continuously so employed since the date such Stock Option
was granted; provided, however, that (i) in the case of a
Participant who terminates employment as the result of permanent
and total disability, normal retirement as defined in the
Company's pension plan or early retirement with approval of the
Board, Stock Options may be exercised within one (1) year of
termination of employment, or within three (3) months of
termination due to such retirement in the case of an Incentive
Stock Option; and (ii) any Stock Option, if not expired, shall be
exercisable at any time within one (1) year after the date of the
holder's death by the executor or administrator of his estate or
by his legatees or heirs, whichever may be entitled, but only if
and to the extent that the Stock Option might have been exercised
by the holder at the date of his death, or as determined by the
Committee or otherwise provided under the Plan, and in no case
after the Stock Option has expired.
<PAGE>
A Stock Option may be exercised, in whole or in part, by
giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price in cash or,
if acceptable the Committee in its sole discretion, in common
shares already owned by the Participant, or by surrendering
outstanding Awards denominated in share or share units. The
Committee may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Options and sell the
common shares thereby acquired, pursuant to a brokerage or
similar arrangement, approved in advance by the Committee, and
use the proceeds from such sale as payment of the purchase price
of such shares.
With respect to Incentive Stock Options granted under the
Plan, the aggregate Fair Market Value (determined as of the date
the Incentive Stock Option is granted) of the number of shares
with respect to which Incentive Stock Options are exercisable for
the first time by any Participant during any calendar year shall
not exceed One Hundred Thousand Dollars ($100,000) or such other
limit as may be required by the Internal Revenue Code.
Article 4. Stock Appreciation Rights
4.1 Grants
A Stock Appreciation Right may be granted in addition to or
completely independent of a Stock Option or any other Award under
the Plan.
4.2 Exercise
A Stock Appreciation Right may be exercised by a Participant
in accordance with procedures established by the Committee,
except that in no event shall a Stock Appreciation Right be
exercisable within the first six (6) months after the date of
grant. The Committee may also provide that a Stock Appreciation
Right shall be exercised automatically on one or more specified
dates.
4.3 Payment Upon Exercise
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Payment by Yankee Energy upon exercise of a Stock
Appreciation Right may be made in cash, in common shares or a
combination thereof, as the Committee shall determine; provided,
however, that any Stock Appreciation Right exercised upon or
subsequent to the occurrence of a Change of Control shall be paid
in cash.
Article 5. Taxes
5.1 Company's Right to Withhold
The Company shall have the right to deduct from any Award
made under the Plan, or from any other sums coming due from the
Company to the Participant, any federal, state or local taxes of
any kind required by law to be withheld with respect to such
Award or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment
of such taxes.
5.2 Election Under I.R.C. Section 83(b)
No Participant receiving an Award of Restricted Common
Shares shall make, in connection with such Award, the election
permitted under Section 83(b) of the Internal Revenue Code or any
successor statute.
Article 6. Miscellaneous Provisions
6.1 No Right of Employment
Neither the adoption of the Plan nor the granting of any
Award shall confer upon any employee of the Company or any of its
Subsidiaries any right to continued employment, nor shall it
interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of all of its employees at
any time, with or without cause.
6.2 No Obligation to Make Award
Nothing in the Plan shall be construed to obligate the
Company to make an Award to a Participant or anyone claiming
under or through a Participant.
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6.3 Adjustments Upon Changes in Stock
If there shall be any change in the shares of the Company
through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, spinoff, split up, dividend in kind
or other change in the corporate structure or distribution to
shareholders, appropriate adjustments may be made by the Board
(or, if the Company is not the surviving corporate in any such
transaction, the Board of Directors of the surviving corporation)
in the aggregate numbers and kind of shares subject to the Plan,
and the number and kind of shares that may be issued under
Awards.
6.4 Non-Transferability of Awards
No Award, and no rights or interests therein, shall be
assignable or transferable by a Participant except by will or the
laws of descent and distribution. During the lifetime of a
Participant, Stock Options and Stock Appreciation Rights are
exercisable only by, and settlement of Awards will be payable
only to, the Participant or his or her legal representatives.
6.5 Change of Control
In the event of a Change of Control of the Company, and
except as the Committee may expressly provide otherwise, all
restrictions and conditions applicable to Restricted Common
Shares then outstanding shall be deemed satisfied as of the date
of the Change of Control and all Stock Options awarded at least
six (6) months prior to the Change of Control shall be
exercisable as of such date.
6.6 Amendment, Suspension and Termination of the Plan
The provisions of Section 1.5 notwithstanding, the Board may
suspend or terminate all or any portion of the Plan at any time
and may amend it from time to time to conform to any change in
applicable laws or regulations or to permit the Company, its
Subsidiaries or their employees to benefit from any change in
applicable laws or regulations, or in any other respect the Board
of Directors may deem to be in the best interests of the Company;
provided, however that no amendment of the Plan shall, without
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approval of the Company's shareholders, (i) except as provided in
Section 6.3, increase materially the numbers of shares of stock
that may be issued under the Plan, (ii) modify materially the
requirements for eligibility for participation in the Plan, (iii)
increase materially the benefits accruing to Participants in the
Plan, or (iv) make any other change that would disqualify the
Plan for the exemption provided by Rule 16b-3 of the regulations
promulgated under the Exchange Act. No amendment, suspension or
termination of the Plan in accordance with this section shall
alter or impair any grant of an Award made prior to such
amendment, suspension or termination without the consent of the
Participant affected thereby.
6.7 Costs of Administration
The costs and expenses of administering the Plan shall be
borne by the Company and its Subsidiaries.
6.8 Governing Law
The Plan and all actions taken thereunder shall be governed
by the laws of the State of Connecticut.
I hereby certify the this is a copy of the 1991 Yankee
Energy Long-Term Incentive Compensation Plan.
Date: April 4, 1995 By: /s/ MARY J. HEALEY
Mary J. Healey
Vice President, General
Counsel and Secretary
